All that glitters…
Good morning, Netizens...
There was a sort of an earthquake hit the Spokane region last Friday, and as of yesterday, hardly anyone is talking about it. Oh, sure the news media have been vapidly referencing the tersely-worded announcement and somnolent quotes from the Department of Financial Institutions. I am speaking, of course, of the shutdown of the Bank of Whitman formerly of Colfax, Washington, which sent yet another tremor of fear through the Spokane regional marketplace.
As of Monday harried employees of the Columbia Banking Systems Inc. of Tacoma, which has purchased control of some, not all, assets of the former Bank of Whitman attempted to reassure former patrons of the Colfax-based bank. Their money is safe, guaranteed by the FDIC, and they can continue banking under the new system without fear. Although no records are available showing how many former clients of the Bank of Whitman are bailing out of the new bank, I suspect the number is much higher than we are being told.
The bottom line is we are seeing the logical outcome of the mind-boggling descent of the national economy in action, among other things. In recent years, the former Bank of Whitman underwrote many high-end commercial real estate developments, some of which did not quite turn out the way their developers had expected, due to the downturn in the economy. When loans do not get paid, when major business developments enter into default, the FDIC begins watching things closely.
In the towns of Lacrosse, Endicott, Washtucna, Lind, Pomeroy, Mattawa, Rosalia, Royal City, Warden, Pasco and Kennewick, the doors of the Bank of Whitman are now closed, as they are now owned by the FDIC and not part of the asset purchase by the Columbia Banking Systems. Some employees will lose their jobs entirely, along with any benefits they may have accrued. I would imagine a financial chill has inexorably begun descending upon some of these towns for, until recently, The Bank of Whitman was the only bank in town for most of the smaller burgs.
An old and tested axiom states, all that glitters is not gold. Developers of some of certain huge commercial real estate should take note. Don't build edifices you cannot immediately sell, lease or rent; don't even think about asking a banker about it. Of course, your opinions may differ.
Dave