Bank of Whitman ordered to raise funds or find a merger partner within 90 days

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FRB: Press Release–Board issues enforcement actions with Bank of Whitman, Idaho Banking Company, and Market Bancorporation–February 15, 2011.

Colfax-based Bank of Whitman is the last local bank of modest size. They’ve been ordered to raise capital or merge with another bank within 90 days.

While Bank of Whitman has not failed yet, this is close to a death sentence.

Bank of Whitman joins AmericanWest Bank (went into Chapter 11) and Sterling Savings (de facto “in place” bankruptcy that wiped out the shareholders and converted the taxpayer’s TARP loan into common shares). Sterling was too big to conveniently fail.

Essentially, all 3 sizable and locally owned banks in the Spokane area have failed – plus The Union Credit Union.

Whitman and AmericanWest are essentially local banks, while Sterling had a wider footprint.  Local bank failures may be a proxy measure of the local economy or they could be due to incompetent bank managers.

Will there be a local buyer or will ownership be transferred outside the area as happened with AmericanWest and Sterling?

Other regional banks include Wheatland Bank, Bank of Fairfield, and Inland Northwest Bank.

Caution: Bank of Whitman is not going “out of business”. They’ve been told to raise more funding or merge with another bank. Your accounts remain insured by FDIC up to whatever is the current maximum limit. There is no need to do a “run” on the bank.

Update: In August 2011, Bank of Whitman was closed by government regulators as a failed bank. 12 of 20 branches will close permanently. The 8 remaining branches will be transferred to Columbia State Bank.

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