Another Washington bank has failed.
The Washington Department of Financial Institutions on Friday evening closed Shoreline Bank of Shoreline, north of Seattle.
The department cited inadequate capital and severe loan losses.
Immediately after the closure, DFI named the Federal Deposit Insurance Corp. as receiver of the bank, and the FDIC entered into a purchase and assumption agreement with GBC International Bank of Los Angeles. GBC International Bank will assume a majority of the deposits and assets of Shoreline Bank.
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“Shoreline Bank has suffered significant loan losses associated with land development and construction lending. These losses have depleted the bank’s capital, resulting in critical under-capitalization,” said Brad Williamson, director of DFI’s Division of Banks, in a release following the closure.
“The bank’s management was not able to raise sufficient capital to remain viable,” he said.
“Shoreline Bank is yet another unfortunate casualty of the extraordinary weakness in the commercial real estate land acquisition and construction lending market,” DFI Director Scott Jarvis said Friday.
Shoreline Bank had operated three branches, all in Shoreline.
Williamson said by phone Friday evening that “there might be another couple more (bank failures) this year, but I don’t think we’ll see quite this volume next year.”
According to the bank rating service Bauer Financial, Shoreline reported that bad loans represented 17.63 percent of the bank’s portfolio, and that the bank lost $9.5 million in 2009.
Founded in 1999, the bank was privately held.
According to its website, GBC International in August 2007 changed its name from Guaranty Bank of California to GBC International Bank. This was done “to better identify the bank as an active lender in providing international banking services.”
The bank operates six branches in California – two in San Francisco, and one each in Los Angeles, Monterey Park, Walnut and Westminster.