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Former American bank holding company
"WaMu" redirects here. For the radio station, see WAMU.
Washington Mutual logo
|Industry||Finance and Insurance|
|Founded||September 25, 1889; 132 years ago (1889-09-25) in Seattle, Washington as Washington National Building Loan and Investment Association|
|Defunct||September 25, 2008; 13 years ago (2008-09-25) as Washington Mutual Bank|
|Headquarters||Seattle, Washington, U.S.|
Number of employees
|Parent||Washington Mutual Inc.|
|Subsidiaries||WaMu Investments, Inc; Washington Mutual Insurance Services; Washington Mutual Card Services|
|Website||Archived official website at the Wayback Machine (archive index)|
Washington Mutual, Inc—abbreviated to WaMu—was a savings bank holding company and the former owner of WaMu Bank, which was the United States' largest savings and loan association until its collapse in 2008.
On Thursday, September 25, 2008, the United States Office of Thrift Supervision (OTS) seized WaMu Bank from WaMu, Inc. and placed it into receivership with the Federal Deposit Insurance Corporation (FDIC). The OTS took the action due to the withdrawal of $16.7 billion in deposits during a 9-day bank run (amounting to 9% of the deposits it had held on June 30, 2008). The FDIC sold the banking subsidiaries (minus unsecured debt and equity claims) to JPMorgan Chase for $1.9 billion, which JPMorgan Chase had been planning to acquire as part of a confidential plan internally nicknamed Project West. All WaMu branches were rebranded as Chase branches by the end of 2009. The holding company, WaMu, Inc., was left with $33 billion in assets, and $8 billion in debt, after being stripped of its banking subsidiary by the FDIC. The next day, WaMu, Inc. filed for Chapter 11 voluntary bankruptcy in Delaware, where it was incorporated.
Regarding total assets under management, WaMu's closure and receivership is the largest bank failure in American financial history. Before the receivership action, it was the sixth-largest bank in the United States. According to WaMu Inc.'s 2007 SEC filing, the holding company held assets valued at $327.9 billion.
On March 20, 2009, WaMu filed suit against the FDIC in the United States District Court for the District of Columbia, seeking damages of approximately $13 billion for an alleged unjustified seizure and unfair low sale price to JPMorgan Chase. JPMorgan Chase promptly filed a counterclaim in the Federal Bankruptcy Court in Delaware, where the WaMu bankruptcy proceedings had been continuing since the Office of Thrift Supervision's seizure of the holding company's bank subsidiaries.
Business operations prior to bank receivership
Despite its name, WaMu ceased being a mutual company in 1983 when it demutualized and became a public company on March 11. On June 30, 2008, WaMu had total assets of US$307 billion, with 2,239 retail branch offices operating in 15 states, with 4,932 ATMs, and 43,198 employees. It held liabilities in the form of deposits of $188.3 billion, and owed $82.9 billion to the Federal Home Loan Bank, and had subordinated debt of $7.8 billion. It held as assets of $118.9 billion in single-family loans, of which $52.9 billion were “option adjustable rate mortgages” (Option ARMs), with $16 billion in subprime mortgage loans, and $53.4 billion of Home Equity lines of Credit (HELOCs) and credit cards receivables of $10.6 billion. It was servicing for itself and other banks loans totaling $689.7 billion, of which $442.7 were for other banks. It had non-performing assets of $11.6 billion, including $3.23 billion in payment option ARMs and $3.0 billion in subprime mortgage loans.
On September 15, 2008, the holding company received a credit rating agency downgrade. From that date through September 24, 2008, WaMu experienced a bank run whereby customers withdrew $16.7 billion in deposits over those nine days, and in excess of $22 billion in cash outflow since July 2008, both conditions which ultimately led the Office of Thrift Supervision to close the bank.
The FDIC then sold most of the bank's assets to JPMorgan Chase for $1.9 billion in cash plus assumption of all secured debt and some unsecured debt. Claims of the subsidiary bank's equity holders, senior and subordinated debt (all primarily owned by the holding company) were not assumed by JPMorgan Chase.[clarification needed]
Mutual savings bank
WaMu was incorporated as the Washington National Building Loan and Investment Association on September 25, 1889, after the Great Seattle Fire destroyed 120 acres (49 ha) of the central business district of Seattle. The newly formed company made its first home mortgage loan on the West Coast on February 10, 1890. It changed its name to Washington Savings and Loan Association on June 25, 1908. By September 12, 1917, it was operating under the name WaMu Savings Bank. The company purchased its first company, the financially distressed Continental Mutual Savings Bank, on July 25, 1930. Its marketing slogan for much of its history was “The Friend of the Family”.
In April 1982, WaMu purchased the brokerage firm Murphey Favre for undisclosed amount in cash and demutualized the following year, converting into a capital stock savings bank. Stock in the capital stock savings bank was first offered for sale on March 11, 1983. By 1989, its assets had doubled.
In November 1994, WaMu formed a new holding called Washington Mutual, Inc. and separated its non-banking units from its primary banking unit, Washington Mutual Savings Bank, which was simultaneously renamed Washington Mutual Bank. The company's stock continued to trade on Nasdaq under WAMU.
In October 2005, WaMu purchased the formerly "subprime" credit card issuer Providian for approximately $6.5 billion, although Providian's new management team's strategy of targeting Prime credit card consumers had been underway since 2001, therefore the credit card unit's nonperforming loan portfolio had improved significantly prior to the company's sale to WaMu. In March 2006, WaMu began the move into its new headquarters, WaMu Center, located in downtown Seattle. The company's previous headquarters, WaMu Tower, stands about a block away from the new building on Second Avenue. In August 2006, WaMu began using the official abbreviation of WaMu in all but legal situations.
After the acquisition of Murphey Favre, WaMu made numerous acquisitions with the aim of expanding the corporation. By acquiring companies including PNC Mortgage, Fleet Mortgage and Homeside Lending, WaMu became the third-largest mortgage lender in the U.S. With the acquisition of Providian Financial Corporation in October 2005, WaMu became the nation's 9th-largest credit-card company.
Many of WaMu's acquisitions became reviled as the rapid post-merger integrations resulted in numerous errors. The purchase of the original PNC Mortgage came at a time when subprime lending was in a “boom” period, with PNC Financial Services believing that the market was too volatile. (PNC later re-entered the mortgage market in 2009 through its acquisition of National City Corp., with no plans to re-enter subprime lending.) The Dime merger resulted in account ownership to be split with account beneficiaries. The Fleet Mortgage merger resulted in entire loans simply disappearing—being serviced, but unable to be found by customer service representatives.
Expansion in Washington
In April 1983, WaMu announced the pending acquisition of three branch offices from the Tacoma-based United Mutual Savings Bank for $3.25 million. In April 1984, WaMu announced the pending acquisition of the Spokane-based Lincoln Mutual Savings Bank with 14 of its 16 branch offices for $4.5 million. At the time of the announcement, WaMu had 39 branch offices, mostly in western Washington.
In May 1987, WaMu announced the pending acquisition of the Wenatchee-based Columbia Federal Savings Bank for $40 million and also the Seattle-based Shoreline Savings Bank for $7.5 million. At the time of the announcement in May 1987, WaMu had 50 branch offices, all within Washington state. Both acquisitions were completed in April 1988.
In January 1990, WaMu announced the pending acquisition of all seven offices of the Seattle-based Old Stone Bank of Washington from the Rhode Island-based Old Stone Corporation for an undisclosed amount. Old Stone originally entered the state of Washington through the acquisition of the ailing Seattle-based Citizens Federal Savings and Loan Association in 1985 with the assistance of the Federal Savings and Loan Insurance Corporation. The acquisition by WaMu was completed in June 1990 for $10 million.
In June 1990, WaMu announced the completed acquisition of all six offices of the failed Walla Walla-based Frontier Federal Savings and Loan Association in Eastern Washington from the Resolution Trust Corporation for $1.8 million.
In September 1990, WaMu announced the completed acquisition of all three Washington branches of the failed Utah-based Williamsburg Federal Savings and Loan Association from the Resolution Trust Corporation for $1.3 million.
In November 1990, WaMu announced the pending acquisition of the Vancouver-based VanFed Bancorp with its Vancouver Federal Savings Bank subsidiary for $23.3 million. At the time of the announcement in November 1990, WaMu had 75 branch offices, all within Washington state. The acquisition was completed in August 1991.
The acquisition of the Pacific Northwest branch offices from the New York-based CrossLand Savings Bank that was announced in April 1991 and completed in November 1991 gave WaMu four offices within the state of Washington in addition to other offices located in the state of Oregon.
In August 1991, WaMu announced the pending acquisition of the Seattle-based Sound Savings and Loan Association for an undisclosed amount. At the time of the announcement in August 1991, WaMu had 84 branch offices, all within Washington state. The acquisition was completed in January 1992.
In September 1991, WaMu announced the pending acquisition of the Bremerton-based GNW Financial Corporation with its Great Northwest Bank subsidiary for $64 million in cash and stock. The acquisition was completed in April 1992.
In December 1991, WaMu announced the pending acquisition of both Washington state branch offices of the California-based World Savings and Loan Association of America, a subsidiary of Golden West Financial, for an undisclosed amount. The acquisition was completed in March 1992.
In August 1992, WaMu announced the pending acquisition of the Lynnwood-based Pioneer Savings Bank for $181 million in stock. The acquisition was completed in March 1993.
In October 1992, WaMu announced the pending acquisition of the ailing Seattle-based Pacific First Financial Corporation with its Pacific First Bank subsidiary for $663 million from its Canada-based parent Royal Trustco. The acquisition was contingent on having Pacific First dispose of its branch offices in California and having its Canadian parent Royal Trustco assume all of Pacific First's bad loans. The acquisition was completed in April 1993. At the time of the initial announcement in October 1992, WaMu had 118 branch offices in Washington and Oregon while Pacific First had 127 branch offices in Washington, Oregon and California. Pacific First had previously announced that it was trading its California offices for Great Western's Washington offices. As a result of the Pacific First acquisition, WaMu became one of the largest banking institution based upon consumer deposits in the state of Washington, second only to Seafirst.
In June 1994, WaMu announced the pending acquisition of the Bellevue-based Summit Bancorp with its Summit Savings Bank subsidiary for $25 million in stock. At the time of the announcement, WaMu had 231 branch offices in Washington and Oregon. The acquisition was completed in November 1994.
In June 1995, WaMu announced the pending acquisition of the Bellevue-based Enterprise Bank for $26.8 million in stock, this was WaMu's entry into the commercial banking sector. Enterprise Bank was a highly profitable one unit carriage trade business bank staffed with highly successful management. WaMu named Tom Cleveland President of the commercial banking unit which later included Western Bank in Coos Bay Oregon. At the time of the announcement, WaMu had 260 branch offices. Unlike the previous acquisition targets, Enterprise held a commercial bank charter and not a thrift charter.
Expansion in Oregon
In April 1991, WaMu announced the pending acquisition of the 25 offices in the Portland, Oregon / Vancouver, Washington area from the ailing New York-based CrossLand Savings Bank, a subsidiary of Brooklyn Bancorp, for an undisclosed amount. The acquisition was completed in November 1991. Seven of the 25 offices were located in Washington with the remainder in Oregon. As part of the transaction, CrossLand Savings closed seven offices in Oregon and three offices best banks in washington state Washington, leaving eleven offices in Oregon and four in Washington. CrossLand had previously entered Oregon (and three other states) through the relatively recent acquisition of the troubled Utah-based Western Savings and Loan Association. The CrossLand acquisition gave WaMu a toe hold entry into Oregon via Portland.
As a result of the Pacific First acquisition in April 1993, WaMu became the fourth largest banking institution based upon consumer deposits within the state of Oregon. Originally, Pacific First grew quickly in Oregon during the late 1980s through the acquisition of troubled savings and loans. By February 1991, Pacific First had 78 branches in Oregon, more than any other thrift. Pacific First had 71 branches in Oregon by July 1992.
In April 1994, WaMu announced the completed acquisition of three Portland-area offices of the failed Portland-based Far West Federal Savings Bank from the Resolution Trust Corporation for $2.2 million.
In October 1995, WaMu announced the pending acquisition of the Coos Bay-based Western Bank for $156 million in stock. The acquisition was completed in February 1996. Since Western Bank possessed a commercial bank charter and not a more restrictive savings & loan charter, WaMu decided to allow Western Bank to keep its charter and name and to remain semi-autonomous for a while. At the time of the acquisition, Western Bank had 41 offices throughout Oregon. Five years later, WaMu decided to abandon the Western Bank brand and integrate most of the former Western Bank offices into the existing WaMu network in Oregon in 2001. Due to branch overlaps between the two brands, 12 Western Bank branch offices and one WaMu branch office were sold to the Klamath Falls-based Klamath First Bancorp for $33 million.
Expansion in Idaho
In March 1994, WaMu announced that they were planning to expand into the state of Idaho by building new branch offices inside Fred Meyer supermarket stores with the first three being opened in the Boise-area in July and August.
In the following year, WaMu opened a fourth Idaho location in a Moscow supermarket in February 1995.
A branch office in Idaho Falls was acquired from the Utah-based United Savings Bank when WaMu purchased the savings bank in January 1997.
By March 2000, there were 9 locations within Idaho and later 22 locations in 2008 when Chase acquired WaMu.
Expansion in Utah
In July 1994, WaMu announced the pending acquisition of the Salt Lake City-based Olympus Capital Corporation with its Olympus Bank, FSB, subsidiary for $52.1 million in stock. At the time of the announcement, WaMu had 250 branch offices in Washington and Oregon while Olympus had eight branch offices in Utah and two in Montana. The acquisition was completed in May 1995.
In March 1996, WaMu announced the pending acquisition of the Ogden-based Utah Federal Savings Bank for an undisclosed amount. At the time of the announcement, Utah Federal had five branch offices while WaMu had 16 within Utah. The acquisition was completed in December 1996 for $15.2 million.
In September 1996, WaMu announced the pending acquisition of the Salt Lake City-based United Western Financial Group Inc. with its United Savings Bank subsidiary for $80.3 million in cash. At the time of the announcement, United Savings Bank had eight branch offices in Utah and one in Idaho. The acquisition was completed in January 1997.
Expansion in Montana
In May 1995, WaMu acquired two branch offices in Butte as the result of the acquisition of the Utah-based Olympus Capital Corporation with its Olympus Bank FSB subsidiary. Four years later, WaMu later sold the two offices to Glacier Bancorp in 1999 for an undisclosed amount and quietly left the state of Montana.
Expansion in California
In July 1996, WaMu announced the pending acquisition of the Fort Worth, Texas-based Keystone Holdings Inc. with its Irvine-based American Savings Bank subsidiary for $1.6 billion in stock. At the time of the announcement, WaMu had 317 branch offices in Washington, Oregon, Idaho, Utah and Montana while American Savings Bank had 220 branch offices in California. The acquisition was completed in December 1996. American kept its name after the acquisition. The result of the acquisition nearly doubled the total deposits of all WaMu subsidiaries from $22 billion to $42 billion.
In February 1997, the Chatsworth-based Great Western Financial, the holding company for second largest thrift in the nation Great Western Bank, found itself the target of a hostile takeover attempt of arch-rival H. F. Ahmanson & Co., the holding company for the largest thrift in the nation Home Savings of America, that would have involved $5.8 billion worth of stock. Since the two companies had large overlapping territories, many Great Western offices would have been closed by the victor if the takeover attempt had succeeded. The only way the combat a hostile takeover was to find another company, a so-called white knight, that would allow a merger on much better terms. One such company was WaMu. In March, Great Western Financial announced that it had accepted WaMu's merger proposal for $6.6 billion in WaMu stock. Ahmanson quickly increased their bids but the bids were also rejected. Great Western approved the merger with WaMu in June and the merger was completed in July. As part of its merger agreement, it was originally announced that Great Western offices would be allowed to keep the Great Western name and there were later discussion of converting the American Savings offices to the Great Western brand. In the end, it was felt that it was best for the company to have only one brand throughout the nation instead of multiple regional brands so it was announce in December 1997 that both Great Western and American names would be retired in favor of the WaMu name. The previous month, it was announced in November that 85 redundant branch offices were identified in California and were to be closed within the following year. Before the merger was complete, WaMu had a total of 413 branch operating under various names across the country while Great Western had 416 branch offices operating in California and Florida.
In March 1998, WaMu announced the pending acquisition of the Irwindale-based H. F. Ahmanson & Company with its Home Savings of America subsidiary for approximately $10 billion in stock. The acquisition was completed in October 1998 for only $6.9 billion in stock. Before the merger was complete, WaMu had a total of 892 branch operating under various names (WaMu, American Savings, Great Western, etc.) across the country while Home Savings had 409 branch offices operating in California and Texas. A few days after the completion of the merger, WaMu announced plans to close 161 branch offices in California.
Expansion in Texas
Through the 1998 acquisition of Home Savings, WaMu had gained 48 branch offices in Texas.
In August 2000, WaMu announced the pending acquisition of the Houston-based Bank United Corporation with its 155 branch offices, all located in Texas, for $1.49 billion in stock. The acquisition was completed in February 2001.
As a result of branch overlap between Bank United and WaMu, 17 branch offices were closed in Texas, 10 of which were in Houston.
Expansion in New York
In June 2001, WaMu announced the pending acquisition of the New York City-based Dime Bancorp with its Dime Savings Bank subsidiary for $5.2 billion in cash and stock. The acquisition was completed in January 2002. Dime had 123 branch offices in the New York City area of both New York and New Jersey.
With a thrift charter, there were a few things that WaMu was not able to do until it was able to obtain a commercial bank charter, such as making commercial loans above a certain size. To get around this problem, WaMu began to purchase commercial banks and maintain them as separate business entities. In August 1995, WaMu acquired the one office Bellevue-based Enterprise Bank in Washington. A few months later, WaMu acquired the 41 office Coos Bay-based Western Bank in Oregon. By 1997, the Enterprise name and Western Bank name were merged and operated under Western Bank moniker.
After WaMu expanded into California through the acquisitions of American Savings, Great Western, and Home Savings, WaMu quietly acquired the one-office Industrial Bank in the Van Nuys neighborhood of Los Angeles an undisclosed amount in 1999 and renamed it WM Business Bank.
By 2001, WaMu had 38 specialized business banking centers operating under the Western Bank name in the Northwest and the WM Business Bank name in California when they decided to exit their ill-fated venture into the commercial banking market that was then dominated with the likes of Wells Fargo and Bank of America.
During the late 1990s and early 2000s, WaMu decided to aggressively expand in the subprime mortgage lending field through the acquisition of existing mortgage companies at a time when other financial institutions were leaving.
In May 1999, WaMu announced the pending acquisition of the Orange, California-based Long Beach Financial Corporation with its Long Beach Mortgage Company subsidiary for $350.4 million in cash and stock. The acquisition was completed in October 1999. Long Beach had specialized in providing subprime mortgages. Some of Long Beach's questionable business practices may have led to WaMu's failure in 2008.
In January 2000, WaMu announced the pending acquisition of the Los Angeles-based Alta Residential Mortgage Trust for $23 million.
In October 2000, WaMu announced the pending acquisition of the Vernon Hills, Illinois-based PNC Mortgage Corporation and PNC Mortgage Securities Corporation from the PNC Financial Services Group for $605 million in cash. The acquisition was completed in February 2001. The result of the PNC Mortgage acquisition made WaMu the nation's third-largest lender.
In April 2001, WaMu announced the pending acquisition of the Columbia, South Carolina-based Fleet Mortgage Corporation from FleetBoston Financial for $660 million in cash. The acquisition was completed in June 2001. The result of the Fleet Mortgage acquisition made WaMu the nation's second-largest mortgage-servicing business.
In December 2001, WaMu announced the pending acquisition of the Jacksonville, Florida-based HomeSide Lending, Inc. from the National Australia Bank for $1.9 billion. The agreement did not include the mortgage servicing rights and related financial hedges for the business. The acquisition was completed in March 2002. In August 2002, WaMu announced the pending acquisition of the rest of HomeSide that included the mortgage servicing rights on a mortgage portfolio worth about $131 billion for $1.3 billion in cash and the assumption of $735 million in debt. The acquisition was completed in October 2002.
In July 2002, the San Mateo, California-based Bay View Capital Corporation announced the pending sale of the mortgage loan portfolio for its Bay View Bank subsidiary to WaMu for a "slight premium to book value". The sale was completed in the following month.
In April 2006, WaMu announced the pending acquisition of the Irvine, California-based Commercial Capital Bancorp, Inc. with its Commercial Capital Bank FSB subsidiary for $983 million in cash. The acquisition was completed in October 2006. Commercial Capital had specialized in loans for the multifamily and small commercial real estate lending markets and was the third m and t bank new account promotion multifamily lender in California.
In June 2005, WaMu announced the pending acquisition of Providian Financial Corporation, tenth-largest credit-card issuer in the country, for $6.45 billion in stock and cash. The acquisition was completed in June 2005.
Prior to this acquisition, WaMu had their credit cards initially employee benefits brokers near me by Associates National Bank and later Citibank South Dakota, N.A. and was one of the largest banking organization that did not issue its own credit cards. In 2005, chairman and chief executive officer Kerry Killinger said that lack of company-issued credit cards was a "major hole in our product line." Credit cards were not mentioned on their website nor in their published annual reports as an available service offered by their company prior to 2001.
Rise and fall
"Wal-Mart of Banking"
Chairman and CEO Kerry Killinger had pledged in 2003: "We hope to do to this industry what Wal-Mart did to theirs, Starbucks did to theirs, Costco did to theirs and Lowe's, Home Depot did to their industry. And I think if we've done our job, five years from now you're not going to call us a bank."
Killinger's goal was to build WaMu into the "Wal-Mart of Banking", which would cater to lower- and middle-class consumers that other banks deemed too risky. Complex mortgages and credit cards had terms that made it easy for the least creditworthy borrowers to get financing, a strategy the bank extended in big cities, including Chicago, New York and Los Angeles. WaMu pressed sales agents to approve loans while placing less emphasis on borrowers' incomes and assets. WaMu set up a system that enabled real estate agents to collect fees of more than $10,000 for bringing in borrowers. Variable-rate loans – Option Adjustable Rate Mortgages (Option ARMs) in particular – were especially attractive, because they carried higher fees than other loans and allowed WaMu to book profits on interest payments that borrowers deferred. As WaMu was selling many of its loans to investors, it worried less about defaults.
In December 2007, the subsidiary WaMu Bank reorganized its home-loan division, closing 160 of its 336 home-loan offices and removing 2,600 positions in its home-loan staff (a 22% reduction).
In March 2008, on the same weekend that JPMorgan Chase Chairman and CEO Jamie Dimon negotiated the takeover of Bear Stearns, he secretly dispatched members of his team to Seattle to meet with WaMu executives, urging them to consider a quick deal. However, WaMu Chairman and CEO Kerry Killinger rejected JPMorgan Chase's offer that valued WaMu at $8 a share, mostly in stock.
In April 2008, the holding company, responding to losses and difficulties sustained as a result of the 2007–2008 subprime mortgage crisis, announced that 3,000 people companywide would lose their jobs, and the company stated its intent to close its approximately 176 remaining stand-alone, home-loan offices, including 23 in Washington and a loan-processing center in Bellevue, Washington. It stopped buying loans from outside mortgage brokers — known in the trade as "wholesale lending." WaMu also announced a $7 billion infusion of new capital by new outside investors led by TPG Capital. TPG agreed to pump $2 billion into the WaMu holding company; other investors, including some of WaMu's current institutional holders, agreed to buy an additional $5 billion in newly issued stock. This angered many investors, as TPG's investment would dilute the holdings of existing shareholders, and as WaMu executives excluded mortgage losses from computing bonuses.
In June 2008, Kerry Killinger stepped down as the chairman, though remaining the Chief Executive Officer. On September 8, 2008, under pressure from investors, the WaMu holding company's board of directors dismissed Killinger as the CEO. Alan H. Fishman, chairman of mortgage broker Meridian Capital Group, and a former chief operating officer of Sovereign Bank, was named the new CEO for 17 days.
Seizure by OTS and FDIC
By mid-September 2008, WaMu's share price had closed as low as $2.00. It had been worth over $30.00 in September 2007, and had briefly traded as high as $45 in the previous year. While WaMu publicly insisted it could routing code on check independent, earlier in the month it had quietly hired Goldman Sachs to identify potential bidders. However, several deadlines passed without anyone submitting a bid. At the same time, WaMu suffered a massive run (mostly via electronic banking over the internet and wire transfer); customers pulled out $16.7 billion in deposits in a ten-day span.
This led the Federal Reserve and the Treasury Department to step up pressure for WaMu to find a buyer, as a takeover by the Federal Deposit Insurance Corporation (FDIC) could have been a severe drain on the FDIC insurance fund, which had already been hard hit by the failure of IndyMac that year. The FDIC ultimately held a secret auction of WaMu Bank, which was won by JPMorgan Chase. On the morning of Thursday, September 25 (which happened to be the 119th anniversary of WaMu's establishment), regulators informed officials at JPMorgan Chase that they were the winners.
On Thursday night (shortly after the close of business on the West Coast), the Office of Thrift Supervision seized WaMu Bank and placed it into the receivership of the FDIC. In a statement, the OTS said that the massive run meant that WaMu was no longer sound. The FDIC then sold most of WaMu Bank's assets, including the branch network, to JPMorgan Chase for $1.9 billion. JPMorgan Chase agreed to assume the bank's secured debts and liabilities to depositors. The transaction did not require any FDIC insurance funds. Normally, bank seizures take place after the close of business on Fridays. However, due to the bank's deteriorating condition and leaks that a seizure was imminent, regulators felt compelled to act a day early.
Because JPMorgan Chase bought WaMu's assets for a low price, WaMu's stockholders were nearly wiped out. Its stock price dropped to $0.16 a share, well below its high of a year earlier. In its Chapter 11 filing, WaMu listed assets of $33 billion and debt of $8 billion. (ref. Appendix A). The filing also indicates that enough funds are available for distribution to unsecured creditors.
Within days of the seizure, a hedge fund adviser and investment strategist, Mike Stathis of AVA Investment Analytics, issued a formal complaint to the Securities and Exchange Commission, demonstrating evidence of insider trading. The complaint also alleged that WaMu was not insolvent, and several Wall Street firms and hedge funds had conspired to short the stock. He also stated that he spoke with a reporter from the Associated Press who told him that he was contacted by a WaMu executive hours before the seizure, telling the reporter that it would happen for "political reasons." In later criticisms, Stathis discussed that neither the FDIC nor OTS ever disclosed any evidence of WaMu's insolvency. Stathis stated that within a few weeks of submitting his complaint, he was visited by federal agents who held him in an fractional routing number lookup room for questioning. As a result of this, Stathis stated that he felt bullied and did not release the SEC complaint into the public domain until a year later.
Shareholders fought what they considered the illegal seizure of WaMu through such websites as WaMuCoup.com (dead link) and others, claiming that the OTS acted in an arbitrary and capricious manner and seized the bank for political reasons or for the benefit of JPMorgan Chase, which acquired a large network of branches at what they claim to be an unfairly low price. Shareholders claimed that as of the date of the takeover, the bank had enough liquidity to meet all its obligations and was in compliance with the business plan negotiated with the OTS 2 weeks earlier and that the holding company's board and management was kept completely in the dark about the government's negotiations with Chase, hampering the bank's ability to sell itself on its own. Chief executive Alan H. Fishman was flying from New York to Seattle on the day the bank was closed, and eventually received a $7.5 million sign-on bonus and cash severance of $11.6 million (which he declined) after being CEO for 17 days. Senator Maria Cantwell demanded an explanation from the government and threatened to open an investigation and WaMu's former shareholders have threatened a lawsuit demanding compensation for the lost value of their shares.
The seizure of WaMu Bank resulted in the largest bank failure in American financial history, dwarfing the failure of Continental Illinois in 1984.
On September 26, 2008, WaMu, Inc., and its remaining subsidiary, WMI Investment Corp., filed for Chapter 11 bankruptcy. WaMu, Inc., was promptly delisted from trading on the New York Stock Exchange, and commenced trading via Pink Sheets. The bankruptcy was the second major filing in best banks in washington state many weeks, after the Lehman Brothers filing eleven days earlier; both bankruptcies far outpaced WorldCom's 2002 filing, which had held the record with just under $104 billion in assets (WaMu's alone, which was approximately half that of Lehman Brothers, was three times as much as WorldCom's).
All assets but only some liabilities (including deposits, covered bonds, and other secured northwest savings bank johnsonburg pa of WaMu Bank were assumed by JPMorgan Chase. Under the deal, JPMorgan Chase acquired all the banking operations of WaMu, including $307 billion in assets and $188 billion in deposits, for a price of $1.9 billion plus debt assumptions. Unsecured senior debt obligations of the bank were not assumed by JPMorgan Chase, leaving holders of those obligations with little meaningful source of recovery. On the morning of September 26, WaMu Bank customers were informed that all deposits held by WaMu were now liabilities of JPMorgan Chase.
The IRS claimed $12.5 billion in back taxes from WaMu, Inc. The company filed court papers on January 22, 2009 alleging losses were $20 billion, and the company requested that it pay nothing of the tax debt, stating that the IRS could owe WaMu Inc. a tax refund. In a 2010 settlement between Wash. Mutual Inc. (in receivership), the FDIC, and JPMorgan Chase, a tax refund of about US$5.7 billion will be shared between Wash. Mutual Inc., JPMorgan Chase and FDIC.
WaMu, Inc., sued the Federal Deposit Insurance Corporation (FDIC) for US$13 billion after the sale of its banking operations to JPMorgan Chase. WMI attorneys claim the bank did not get fair value for the bank, and multiple subsidiaries belonging to the parent company were taken.
On January 11, 2010, the United States Department of Justice, Office of the United States Trustee, District of Delaware, pursuant to Section 1102(a)(1) of the Bankruptcy Code, appointed a Committee of Equity Security Holders to represent all shareholders of both preferred and common stock. All of the Motions to Disband the Committee of Equity Security Holders were denied on January 28, 2010 by U.S. Bankruptcy Judge Mary F. Walrath, District of Delaware.
On July 20, 2010, bankruptcy judge Mary Walrath approved a motion of the EC for an examiner to investigate potential legal claims and assets of WMI, handing a victory to shareholders. The Judge directed the examiner to investigate not just the legal settlement with the FDIC and JPMorgan Chase at the heart of WaMu's reorganization, but also all potential claims and assets that are part of the settlement or that will be retained by the company.
On July 26, 2010, U.S. Trustee Roberta A. DeAngelis appointed veteran bankruptcy examiner and McKenna Long & Aldridge LLP partner Joshua R. Hochberg to conduct a probe into the proposed settlement between WMI, JPMorgan Chase and the FDIC. Hochberg is a partner in McKenna Long & Aldridge's Washington office whose practice focuses on individual and corporate white collar defense, internal investigations and compliance.
On August 10, 2010, the bankruptcy judge rejected WaMu Inc.'s effort to obtain personal financial information from shareholders demanding that the company schedule an annual meeting. Attorneys for the EC said that WMI was simply trying to delay scheduling a shareholder meeting by seeking personal information. The judge best banks in washington state that WMI was not entitled to the information.
On November 1, 2010, examiner Joshua R. Hochberg from McKenna Long & Aldridge LLP presented his long-awaited report, but it did not meet the expectations of the court, since the report was based on unsworn interviews and confidential attorney-client work. On December 12, the court decided to exclude the examiner's report during the plan confirmation hearings, saying it can't be considered expert testimony or submitted as evidence unless it is subject to questioning to determine the basis of its conclusions.
On January 7, 2011, the bankruptcy court rejected the 6th proposed plan of reorganization, which was proposed by the debtors and their lawyers from Weil, Gotshal & Manges LLP. Judge Mary Walrath focused many of her criticisms on the company's releases of liability granted to directors, officers and others including some hedge funds, who she said did not contribute anything to the settlement. She noted for example that shareholders, who will likely get nothing, should not have to release the company's board from the state income tax south carolina rate of being sued by them. However, many WaMu shareholders believe there will be a significant recovery when WaMu emerges from bankruptcy.
On September 14, 2011, the court also rejected the modified 6th proposed plan of reorganization. Judge Mary F. Walrath wrote that four hedge funds that had played a role in WaMu's restructuring might have received confidential information that could have been used to trade improperly in the bank's debt. The four hedge funds are Appaloosa Management, Aurelius Capital Management, Centerbridge Partners and Owl Creek Asset Management.
A seventh plan of reorganization was announced in February 2012 and the company finally emerged from Chapter 11 bankruptcy the following month as WMI Holdings Corporation. By 2015, WMI Holdings was able to raise $598 million and was looking for new acquisitions.
Post receivership bank operations
During 2009, all of the WaMu Bank branches that had been purchased from the FDIC after the bank had been placed into receivership, were rebranded to Chase or shuttered. All financial documents issued by WaMu were changed to carry the Chase logo. Credit and debit cards issued by WaMu or Providian were changed to carry the Chase logo.
The transition to Chase began in early 2009, when Chase ATMs became accessible for WaMu customers at no extra charge. All branches and accounts were formally merged in 2009 as the WaMu brand was retired. Branches in the Pacific Northwest, Idaho, and Utah were rebranded in May best banks in washington state branches in Florida, Georgia, Texas, Illinois, and Greater New York were rebranded in July 2009, and the remaining branches in Nevada, California, Arizona, and Colorado were rebranded in October 2009. The last rebrandings formally retired the WaMu name.
In markets where Chase already had a dominant presence, such as Greater New York and Chicago (owing to the presence of Chase and predecessor Bank One), Chase further disposed of such branches to other banks. In New York, for instance, the acquisition resulted in Chase branches located on the same block as WaMu branches.
"Free Checking Account"
This advertising campaign was introduced between 2005 and 2007. Numerous WaMu commercials showed traditionally-dressed 60-70-year-old overweight bankers laughing out loud at a WaMu representative (who is much younger and fitter), who says the words "Free Checking Account".
"The Power of Yes"
WaMu introduced an advertising campaign during the 2003 Academy Awards known as "The Power of Yes". This was to promote the offering of loans to all consumers, particularly borrowers that the banks deemed too risky. Another commercial in the ad best banks in washington state showed WaMu representatives in casual clothes, contrasting with traditionally-dressed bankers in suits.
"Whoo hoo!" was an advertising campaign introduced by WaMu in February 2008. As fears of an economic crisis were rising, and WaMu was looking to become an "iconic brand that people love", they began courting consumers with a new slogan, designed to position WaMu as a consumer-friendly institution.
During its run, the Whoo hoo! ads, created by TBWA\Chiat\Day of Playa del Rey, California, become widespread in web navigation. After WaMu launched the new advertisement, there was double digit growth at its website and the term "wamu" appeared in searches over 1,000% more between January and March than in all of 2007.
WaMu (before the bank's September 2008 conservatorship and sale to JPMorgan Chase) applied to register a trademark in the phrase. Initially, the bank wanted to use "woo hoo" (without the "h" in the first word) as the slogan, but they were concerned because of the existing use of the phrase by Homer Simpson, a character in The Simpsons.
Occasio branch design
WaMu introduced a unique branch design known as Occasio which eliminated traditional teller windows and queuing stanchions in favor of an open, circular floor plan with a greeter or "concierge" position and tellers working from behind podiums. The Occasio design was introduced in 2000 and patented in 2004, but was phased out following the JPMorgan Chase acquisition of WaMu's retail banking operations.
- ^Bansal, Paritosh (2008-09-26). "FDIC crashes WaMu's birthday bash". DealZone. Thomson Reuters. Archived from the original on 2013-07-04. Retrieved 2008-09-26.
- ^ abcd"History". Washington Mutual Bank. Archived from the original on 2008-11-16. Retrieved 2008-09-28.
- ^"WMI HOLDINGS CORP. 2013 Annual Report Form (10-K)"(XBRL). United States Securities and Exchange Commission. March 14, 2014.
- ^"WMI HOLDINGS CORP. 2012 Q3 Quarterly Report Form (10-Q)"(XBRL). United States Securities and Exchange Commission. November 8, 2013.
- ^ A savings bank holding company is defined in United States Code: Title 12: Banks and Banking; Section 1842: Definitions; Subsection (l): Savings Bank Holding Company See: 12 U.S.C. § 1841
- ^ abc"OTS 08-046 – Washington Mutual Acquired by JPMorgan Chase" (Press release). Office of Thrift Supervision. 2008-09-25. Archived from the original on 2008-10-04. Retrieved 2008-09-25.
- ^ abcdeLevy, Ari & Hester, Elizabeth (2008-09-26). "JPMorgan Buys WaMu Deposits; Regulators Seize Thrift". Bloomberg L.P. Archived from the original on 2012-10-22. Retrieved 2008-09-26.
- ^Shen, Linda (2008-09-26). "WaMu's Bank Split From Holding Company, Sparing FDIC". Bloomberg News. Archived from the original on 2012-10-23. Retrieved 2008-09-27.
- ^ abcDash, Eric (2008-04-07). "$5 Billion Said to Be Near for WaMu". The New York Times. Retrieved 2008-09-27.
- ^Rubbery, William. "OTS Fact Sheet on Washington Mutual Bank"(PDF). Stanford Edu.
- ^Zarroli, Jim (2008-09-26). "Washington Mutual Collapses". All Things Considered. National Public Radio. Retrieved 2008-10-27.
- ^Debtor's Motion for an Order Directing the Production of Documents from Knowledgeable Parties(PDF). United States Bankruptcy Court for the District of Delaware (Report). 2009-12-14. Retrieved 2009-12-14 – via Kurtzman Carson Consultants.
- ^Grind, Kirstin (2009-12-27). "Washington Mutual's final days — The deal". Puget Sound Business Journal. Retrieved 2009-12-27.
- ^Racki, Troy (2010-02-10). "WaMu Equity Makes Case Via YouTube". Seeking Alpha. Retrieved 2010-02-10.
- ^Letzing, John. "WaMu seized, sold to J.P. Morgan Chase". MarketWatch. Retrieved 2019-06-24.
- ^ abChasan, Emily & Maler, Sandra (2008-09-27). "WaMu files bankruptcy petition in Delaware". Reuters. Retrieved 2008-09-27.
- ^ abReich, John M. (2008-09-25). OTS receivership order for Washington Mutual(PDF) (Report). Office of Thrift Supervision. Archived from the original(PDF) on 2008-10-01. Retrieved 2008-09-27.
- ^ abcdefDash, Eric & Sorkin, Andrew Ross (2008-09-26). "Government Seizes WaMu and Sells Some Assets". Business. The New York Times. p. A1. Retrieved 2008-09-26.
- ^ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007 (Report). Securities and Exchange Commission. 2008-05-22. Archived from the original on 2016-04-19. Retrieved 2008-09-28.
- ^WMI v. FDIC (Washington Mutual court complaint)(PDF) (Report). United States District Court for the District of Columbia. 2009-03-20. Archived from the original(PDF) on 2010-07-14 – via Northwest Progressive Institute.
- ^Stempel, Jonathan (2009-03-21). "Washington Mutual sues FDIC for over $13 billion". Reuters. Retrieved 2009-05-07.
- ^"JPMorgan to buy WaMu - Sep. 25, 2008". money.cnn.com. Retrieved 2019-06-24.
- ^ ab"OTS Fact Sheet on Washington Mutual Bank"(PDF). Office of Thrift Supervision. 2008-09-25. Archived from the original(PDF) on 2008-10-01. Retrieved 2008-09-28.
- ^"JPMorgan Chase Acquires Banking Operations of Washington Mutual: FDIC Facilitates Transaction that Protects All Depositors and Comes at No Cost to the Deposit Insurance Fund" (Press release). Federal Deposit Insurance Corporation. 2008-09-25. Retrieved 2008-09-25.
- ^Alternate Link(subscription required) via ProQuest.
- ^"Timeline Washington Mutual: A long history". The Seattle Times. 2008-09-26. Retrieved 2008-09-29.
- ^"Business Briefs". Wall Street Journal. April 22, 1982. p. 48. Alternate Link(subscription required) via ProQuest.
- ^"Briefs; Debt Issues". New York Times. February 19, 1983. p. I40. Link(subscription required) via ProQuest.
- ^"Briefs". New York Times. March 11, 1983. p. D7. Link(subscription required) via ProQuest.
- ^"Washington Mutual Assumes New Holding-Company Name". Seattle Times. November 30, 1994.
- ^Ehrlich, Bill (November 30, 1994). "Washington Mutual completes reorganization to holding company structure". PR Newswire (Press release). p. 1. Link(subscription required) via ProQuest.
- ^"Washington Mutual's Name". Wall Street Journal. December 1, 1994. p. A3. Alternate Link(subscription required) via ProQuest.
- ^"Washington Mutual Completes Acquisition of PNC Mortgage". AllBusiness.com (Press release). February 1, 2001. Archived from the original on April 13, 2008.
- ^"UNITED STATES BANKRUPTCY COURT DISTRICT OF MASSACHUSETTS CENTRAL DIVISION"(PDF). Gov Info.
- ^"Washington Mutual Agrees To Buy 3 Branches of a Bank". Wall Street Journal. April 15, 1983. p. 14. Alternate Link(subscription required) via ProQuest.
- ^"Bank Merger Set". New York Times. April 21, 1984. p. 1.28. Link(subscription required) via ProQuest.
- ^"Washington Mutual Set To Take Over Lincoln Mutual Savings Bank". Wall Street Journal. April 23, 1984. p. 1. Alternate Link(subscription required) via ProQuest.
- ^Ramsey, Bruce (May 18, 1987). "Washington Mutual to Buy Wenatchee Bank for $40 Million". Seattle Post-Intelligencer. p. B10.
- ^ abHeberlein, Greg (May 18, 1987). "Washington Mutual Buys Seattle, Wenatchee Banks". Seattle Times. p. C11.
- ^Gapay, Les (May 19, 1987). best banks in washington state Mutual Will Buy Shoreline". Seattle Post-Intelligencer. p. B6.
- ^"Washington Mutual - Two Recent Purchases - to Merge Into One Bank". Seattle Post-Intelligencer. April 29, 1988. p. C5.
- ^Bilotti, Armand G.; Holbrook, Robert B. & Izzi, Louis R. Jr. (January 25, 1990). "Old Stone Completes Agreement to Sell Washington Retail Division to Washington Mutual Savings Bank". Business Wire (Press release). p. 1. Link(subscription required) via ProQuest.
- ^"Washington Mutual to Buy Old Stone State Subsidiary". Seattle Post-Intelligencer. January 26, 1990. p. C4.
- ^"Bank To Acquire Old Stone Branches". Seattle Times. April 7, 1990.
- ^Lane, Polly (December 30, 1985). "Old Stone Buys Citizens Federal". Seattle Times. p. D9.
- ^Lane, Polly (December 31, 1985). "FSLIC Helps Rhode Island Firm Buy Citizens". Seattle Times. p. D3.
- ^"Old Stone Acquisition Of Citizens Savings Gets Bank Board Nod". Wall Street Journal. December 31, 1985. p. 1. Alternate Link(subscription required) via ProQuest.
- ^Bilotti, Armand G. & Izzi, Louis R. Jr. (May 31, 1990). "Old Stone Completes Sale of Washington Branch Network". Business Wire (Press release). p. 1. Link(subscription required) via ProQuest.
- ^"U.S. Bank Old Stone Bank Sale Completion Announced". Seattle Post-Intelligencer. June 2, 1990. p. B6.
- ^"Frontier Federal A Deal With Washington Mutual". Seattle Post-Intelligencer. June 23, 1990. p. B6.
- ^"Washington Mutual Acquisitions to Open". Seattle Times. June 25, 1990. p. C7.
- ^MacKenzie, Bill (September 15, 1990). "Buyers Pick Segments Of Utah Thrift". The Oregonian. p. E01.
- ^ abLane, Polly (November 12, 1990). "Washington Mutual To Buy Savings Bank In Vancouver". Seattle Times.
- ^"Vanfed Purchase Completed Yesterday". Seattle Times. August 1, 1991. p. C6.
- ^ abc"Washington Mutual Completes S&L Buy". Seattle Times. November 11, 1991.
- ^ ab"Sound Savings To Merge". Seattle Times. August 9, 1991.
- ^"Washington Mutual Completes S&L Buy". Seattle Times. January 3, 1992. p. F1.
- ^Heberlein, Greg (September 20, 1991). "Washington Mutual to Buy GNW". Seattle Times. p. D8.
- ^Bill Virgin, P-I Reporter (September 21, 1991). "Washington Mutual Plans Another Buy". Seattle Post-Intelligencer. p. B4.
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Find the Best Checking Accounts in Washington State
Your checking account is the hub of your financial life. Most Americans have checking accounts and they are the most common type of bank account in the United States.
It’s easy to see why.
Paychecks can easily be deposited to your checking account and paying bills from your checking account is similarly convenient.
Because of their popularity, banks compete to draw new checking account customers.
People who open a checking account with a bank are more likely to use that bank for other services, so best banks in washington state new checking account customers is particularly important for banks.
If you live in Washington State and want to open a new checking account, this article will cover some of the best options that are available to you.
The Largest Banks in Washington State
The largest banks in Washington by deposits are:
- Wells Fargo
- U.S. Bank
- Columbia Bank
This list contains mostly national banks, but these aren’t your only option for opening a checking account. You can also consider smaller local banks, including:
- Umpqua Bank
- Washington Federal
- Banner Bank
Checking Accounts Are Available Nationwide
If you’ve taken the time to consider both local and national banks and haven’t found any checking account that is particularly appealing, you’re not completely out of luck.
There is a third option, online banks, that bring a number of benefits to the table.
Low Fees, Great Features
The greatest benefit of opening an online checking account is that they tend to have all of the features that you need, and more, without costing too much.
Online banks, when compared to traditional brick and mortar banks, are very inexpensive to run.
Traditional banks need to pay for physical locations, security, utilities, tellers and other staff at their branches, and all sorts of other costs related to maintaining a physical presence.
Online banks can centralize their operations in one area and don’t rely on running dozens or hundreds of branches around the country. That means that they save a lot of money.
Online banks then turn around and pass their savings on to their customers.
Most online checking accounts have no monthly fees and many have no minimum balance requirement. Those that do don’t tend to have requirements higher than $25.
To make matters even better, many online checking accounts pay interest, which is unusual for traditional banks’ checking accounts.
If you’re wary about trusting an online bank with your money, you don’t have to chase auto loan overnight address banks are just as safe as traditional brick and mortar banks, even if it is understandably hard to trust a bank that you can actually see in person.
The reason that online banks are safe is that they, like nearly all banks in the U.S., are insured by the Federal Deposit Insurance Corporation. The FDIC protects deposits at all banks, physical and online.
If the bank is ever unable to return your money to you, the FDIC will reimburse you for up to $250,000 per depositor per account type.
Why You'd Want a Local Washington Bank
Working with a bank local to Washington State is a great way to get a good deal on your checking account.
One of the greatest downsides of working with a national bank is that they tend to offer the same accounts to people across the country. They don’t have a way to tailor their accounts to local needs.
Local and regional banks are more in-tune with their clients because they only have to serve people in a single region.
That means that they can adapt their accounts to meet the unique needs of people who live in the area.
Here are three of the best banks in Washington State for people who need to open a new checking account.
Umpqua Bank’s Embark Checking account is a no-frills checking account that is a great choice for almost everyone.
The account has a $25 minimum deposit, which makes it relatively easy to open. It also charges no monthly fees when you sign up for electronic statements. Otherwise, there is a $3 monthly paper statement fee.
Some other perks of the account include the option to sign up for one fee-free Grow Savings Account and $10 in ATM fee rebates each month when your average balance exceeds $2,500.
The Washington Federal Free Checking Account is exactly what it says on the tin.
It’s a checking account with all the basic features, with no monthly fees after you sign up for electronic statements and direct deposit.
Another nice feature of the account is that there is no minimum balance requirement which means that you can open the account, even if you don’t have money to commit to it upfront.
Other benefits include 32,000 fee-free ATMs, online bill pay and easy peer-to-peer payments.
Banner Bank’s Connected Checking Account is a checking account that’s great for people who use ATMs on a regular basis.
The account requires a $50 minimum deposit, which is higher than the requirements of the other banks on this list. In exchange, this account is truly fee-free. There are no monthly fees, even if you want to receive paper statements each month.
What makes the account shine is its ATM fee reimbursement policy. The bank will reimburse you for up to 4 ATM charges each month, regardless of where in the US you are and with no minimum balance required to unlock the service.
Other perks of the account include overdraft protection, peer-to-peer payments, and online bill payment service.
Advantages and Disadvantages of Local Banks
Before you make the decision to open a bank account, you should carefully consider the pros and cons of working with each local bank.
Advantages and Disadvantages of Savings Accounts from Local Banks
One of the perks of local banks is that they excel at providing personalized service and providing services designed specifically for local needs, but that doesn’t mean that they’re without drawbacks.
One drawback of working with a local bank is that you might have to deal with some annoyances if you travel to other parts of the country.
You’ll probably have to rely on other banks’ ATMs when you’re away from home, which means you can face ATM surcharges.
The benefit of working with a national bank chain is that you’ll never be far from an ATM or branch that you can visit without paying fees.
What Kind of Account is Right for You?
Online banks are a great choice for many a librarys online catalog is a computerized index of, but that doesn’t mean that they’re perfect. If you’re not sure whether an online checking account is right for you, ask yourself these questions.
Do you prefer to communicate electronically, or in person?
The biggest downside of online banks:
The only way to get help is by phone, e-mail, or online chat. It’s not like a traditional bank where it is easy to walk into a branch and speak to someone face to face.
In the event that you run into account issues, you’ll be forced to work with someone over the phone or electronically, which can be stressful for some people.
Do you visit your local bank branch regularly?
If you do, you might want to think twice before opting for an online checking account. With an online bank, there’s no branch to visit, just a website.
How good are you at keeping up with new technology?
Online banks aim to make their systems as user-friendly as possible, but they can’t completely eliminate the learning curve.
Making a mistake with your money because you’re not sure how to work your bank’s app or website is the last thing that you want to do.
Digital natives are unlikely to have trouble with using an online bank, but if you know that you sometimes struggle with newer technology, you might want to consider working with a belmont savings bank watertown ma and mortar bank instead.
Most Important Features of a Checking Account
When you’re comparing checking accounts, these are the most important features to consider.
Nobody likes paying bank fees, especially maintenance fees.
Why pay the bank for the privilege of holding on to your money?
Always look for the account that has the lowest monthly fees.
If you use cash regularly, you’ll want to know that it’s easy to get cash when you need it and deposit cash when you have extra.
Think about the places that you visit frequently and whether your bank will have ATMs or branches in those areas.
Most traditional banks don’t pay interest on checking accounts, but some do, and online banks tend to pay interest on all of their accounts.
Earning interest is like getting free money, so look for accounts that do pay interest.
Almost every bank offers a mobile banking app, but their quality can vary by a lot.
Make sure that your bank’s app is easy to use and offers essential features like bill pay and mobile deposit.
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Best Banks for Retirees, 2020
On the investment and wealth management side, you can use TD Ameritrade’s brokerage services. (Keep in mind that investment options may change after Charles Schwab completes its buyout of TD Ameritrade.) With investable assets of at least $750,000, you're eligible for TD's private banking and retirement and wealth planning services, which come with a dedicated, local relationship manager.
LICENSING OPTIONS FOR WINNING BANKS:Logo Licensing • Reprint/E-Print Products • Plaques
RUNNER-UP: Charles Schwab Bank
- Why it won: With an attractive checking account and high marks for customer satisfaction, the investment company's banking division is a good choice for retirees who don't mind managing their accounts online.
- Standout account: High Yield Investor Checking is free and comes with perks well suited for retirees—especially those who like to travel.
Schwab's online High Yield Investor Checking account has no minimum balance requirement or monthly fee, personal checks and paper statements are free, and out-of-network ATM fees are reimbursed both in the U.S. and internationally. Plus, you'll be charged no foreign-exchange fee when you use your debit card to make purchases overseas, and the account yields 0.03%. To use the checking account, you must open a Schwab One brokerage account, but you don't have to keep a minimum balance or pay a monthly fee, and you can transfer money free between the accounts. For two years in a row, J.D. Power has ranked Charles Schwab Bank highest for overall customer satisfaction among internet banks.
Schwab also offers the High Yield Investor Savings account free with no minimum, and it yields 0.05%. As a major investment firm, Schwab has a range of wealth and advisory services, from a robo-advisory platform to assistance from a full-fledged wealth-management team.
LICENSING OPTIONS FOR WINNING BANKS:Logo Licensing • Reprint/E-Print Products • Plaques
The Best Bank for You, 2020We've identified the banks and credit unions that offer the best combination of high rates, low fees and a customer-friendly focus.
Best National Banks, 2020In addition to having more brick-and-mortar locations, big financial institutions offer a variety of perks and services you may not find at smaller banks.
Best Internet Banks, 2020Online banks offer several perks you won't find at brick-and-mortar locations; and in the coronavirus era, their no-touch services might entice more consumers to make the switch.
Best Credit Unions, 2020These member-owned not-for-profit banking institutions are open to the public to join.
Best Banks for High-Net-Worth Families, 2020For customers with substantial deposit amounts and investment accounts, these banks offer perks and services that might help you keep your finances in check.
Best Banks for Retirees, 2020 - currently readingFor retirees living on a fixed income, finding a bank that won't nickel-and-dime you with fees and minimum balance requirements is key to helping make your money last.
Best Banks for Parents and Kids, 2020These financial institutions offer personal banking accounts that the entire family can take advantage of.
Port Washington State Bank
We’re honored to be one of the area’s largest charitable contributors. Thanks for your support!Learn more about this honorPresident/COONMLS ID: 759019James Schowalter
Why community banks matter
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Your Wallet Just Got Smarter
Now you can use Apple Pay®, Google Pay™ or Samsung Pay® with your PWSB debit or credit card. Learn more about digital wallet.
Welcome! The best part of our website is getting a chance to share our unique story with the community.Chairman / Chief Executive OfficerNMLS ID: 759018Steve Schowalter
5 Best National Banks
The best national banks are available across the country and offer extensive ATM networks as well as features like sign-up bonuses and strong interest rates. Some have brick-and-mortar locations, and others are available only online.
6 largest national banks
If you're most interested in being able to visit a bank branch, you might want to explore the largest national banks instead. Here are the top six in the U.S., based on their assets, that also have at least 1,000 branches across 15 or more states. You can read more about each in our reviews.
Read more about these banks by clicking on their names:
Chase: Great sign-up bonus for checking; more than 4,700 branches and 16,000 ATMs.
Bank of America: Polished online experience and a virtual financial assistant in the mobile app; about 4,300 branches and about 17,000 ATMs.
Wells Fargo: Easy-to-waive monthly fees on checking; about 4,900 branches and more than 13,000 ATMs.
U.S. Bank: Competitive promotional CD rates; about 2,300 branches and 4,000 ATMs.
Truist Bank (merger of BB&T and SunTrust Bank): Easy online banking; about 2,500 branches and 3,700 ATMs.
PNC Bank: All-in-one account experience for easier money management; about 2,300 branches and 18,000 ATMs.
Why you can trust NerdWallet: Our writers and editors follow strict editorial guidelines to make sure our coverage is fair and accurate, so you can choose the financial accounts that work best for you. See our criteria for evaluating banks and credit unions.
» If you're interested in the best banks and credit unions overall, check out NerdWallet's picks
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.
Bank of America: Best for online banking
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.
Chase Bank: Best for sign-up bonuses
NerdWallet ratingNerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.
Discover Abn creditcard service Best for cash back
at Alliant Credit Union, Federally insured by the NCUA
Alliant Credit Union: Best for ATMs
Ally Bank: Best for customer service
Best National Banks
Bank of America: Best for online banking
Bank of America offers good accessibility and communication channels, but like other large brick-and-mortar banks, interest rates are minimal.
Robust branch and ATM coverage: The bank has about 4,300 branches in about 35 states and Washington, D.C.
Easy to reach customer service: Call center hours are 8 a.m. to 11 p.m. Eastern on weekdays and 8 a.m. to 8 p.m. on weekends. Bank of America's customer service through Twitter, handle @BofA_Help, is prompt, and chat support is available online, along with in-app virtual financial assistance.
Low rates: The interest is minimal on checking accounts, savings accounts and certificates of deposit.
Fees are avoidable: Fees can be avoided through qualifying activities such as using direct deposit or meeting minimum balance requirements.
Chase: Best for sign-up bonuses
Chase's checking sign-up bonus sets it apart from other large banks, and it has locations first tennessee bank online bill pay ATMs across the U.S. Accounts come with monthly fees that are fairly easy to avoid, but interest is low on checking and savings accounts.
Get a bonus: The bank regularly holds promotions for new customers. Right now, a new checking account can fetch you an additional $225 (offer expires 1/19/2022).
Fees are avoidable: Sidestep monthly charges on checking by using direct deposits, maintaining minimum daily account balances or keeping a certain amount deposited across linked Chase accounts.
Low rates: APYs are minimal for savings products.
Many branches and ATMs: Chase has more than 4,700 branches across 45+ states, and 16,000 ATMs.
» Interested in sign-up bonuses? See what other banks are offering
Discover Bank: Best for cash back
Discover is an online bank with a rewards checking account and competitive yields on savings and certificates of deposit.
Checking comes with rewards: Earn 1% cash back for up to $3,000 in qualifying debit card purchases per month.
High rates: APYs on Discover Savings and certificates of deposit are highly competitive.
Strong ATM network: Access to 60,000 free ATMs.
Fee-free: No monthly fees or minimum deposit requirements on checking and savings accounts.
» Find savings accounts with rates around 0.40% on NerdWallet’s list of best savings accounts
Alliant Credit Union: Best for ATMs
at Alliant Credit Union, Federally insured by the NCUA
Alliant offers nationwide accessibility, highly competitive interest rates and no monthly fees across deposit accounts.
All of the best bank loans that made our list offer attractive features and have some negative aspects as well. Some of the bank loans offer competitive interest rates and high maximum loan amounts such as $100,000. Others offer longer repayment terms up to 84 months and flexible repayment schedules. Overall, we recommend checking out Wells Fargo for a bank loan. The company has a solid company reputation, a long history in the industry, and offers a variety of loans with varying loan terms. It also offers additional banking services and in-branch assistance.
Compare The Best Bank Loans
|Lender||Starting Interest Rate||Minimum Credit Score||Loan Terms (range)||Maximum Loan Amount|
|Wells FargoBest Big Bank||5.74%||Not disclosed||12 to 84 months||$100,000|
|LightstreamBest for Home Improvement Loans||2.49%||Varies||24 to 144 months||$100,000|
|Marcus by Goldman SachsBest for Debt Consolidation Loans||6.99%||660||36 rondout savings bank 72 months||$40,000|
|TD Fit Loan (TD Bank)Best for Cosigners||6.99%||660||36 to 60 months||$50,000|
|American ExpressBest for Amex Cardmembers||Varies||Not disclosed||12 to 36 months||$25,000|
|USAABest for Military Members||7.24%||Not disclosed||12 to 84 months||$100,000|
|CitibankBest for Relationship Rewards||7.99%||Not disclosed||12 to 60 months||$30,000|
|DiscoverBest for Fast Funding||5.99%||Varies||36 to 84 months||$35,000|
Guide to Choosing the Best Bank for Your Personal Loan
Are You in Need of a Personal Loan?
Before making the decision about getting a personal loan, assess your needs and your current situation and decide if it is right for you. Review your needs and determine if they currently require a personal loan. Consider things like what the loan is for, how you will repay it, how soon you need it, and what you need to do to qualify for the loan. Take note of your FICO score because the higher your credit score, the better interest rate you can receive.
Common reasons to get a personal loan include debt consolidation, making a large purchase, or a financial emergency.
Compare Bank Loan Lenders
When comparing bank lenders, you will want to keep several important factors in mind so that you’re fairly comparing the loans. Consider the following when comparing bank loan lenders:
- Loan amounts: Consider the minimum and maximum loan amounts and ensure the amount you need falls within that range.
- Interest rates: Check out the interest rates and compare them with other lenders to ensure you’re getting a competitive rate and not over-paying.
- Fees: Know the fees before you sign the loan documents. Look at the cost of things like origination fees, prepayment penalties, and late fees.
- Repayment periods: How long will you have to repay the loan? Are the terms flexible? Make sure you will be able to meet the repayment schedule and not fall behind.
- Funding time: If you need the money tomorrow and the funding time is seven days, the loan won’t work for you. Find out how long the loan takes to fund and how you will receive the funds.
Apply for a Bank Loan
After you have made your bank selection and chosen your bank loan, you’re ready for the application process. Having your finances in order such as making on time payments and providing steady income will improve your chances of getting approved and getting a best banks in washington state interest rate. Typically, the higher your FICO score, the lower your rate, which saves you money over the life of the loan.
You will need to provide your identification, social security number, and proof of income. Proof of income requirements vary by bank but may be found in the form of bank statements, pay stubs, and/or tax returns. You will submit your documents and fill out the application either online or in person at a bank branch.
Frequently Asked Questions
Do All Banks Offer Personal Loans?
No, not all banks offer personal loans. Bank of America, one of the biggest financial institutions in the country, doesn’t carry them, for example. Most personal loans are unsecured, meaning they are not backed up by an asset that the lender can take if you default, and some banks don't want the risk. Others just don't want to deal with the expense of lending and servicing relatively small, 4- and 5-figure amounts.
Other large banks that do not offer unsecured personal loans are Capital One and Chase.
What Do I Need to Qualify for a Personal Bank Loan?
If you’re looking to get a bank personal loan, you need to get your paperwork in order best banks in washington state. Before applying, check your credit score and pull your credit report through AnnualCreditReport.com. This will give you an idea of whether or not you’ll qualify for a bank personal loan, as well as how low your interest payments will be.
Most banks require good to excellent credit from personal loan applicants. So you might need a higher credit score than you would for, say, a secured loan (one that does require collateral, like an auto loan or mortgage) or even a credit card. Still, if you have a solid repayment history, avoid maxing out your credit cards, and can prove your creditworthiness, there’s a strong chance you’ll qualify for a bank personal loan.
Do I Need to Be an Existing Bank Client to Get a Loan?
If you’re interested in a personal loan from a bank you don't have a relationship with, make sure that being a client isn’t a requirement before applying. Not all banks request personal loan borrowers be account holders, but some do—or they offer better terms to current clients. Also, you might need to open a checking or savings account there to take advantage of auto-pay discounts on the loan (the payments have to come from an in-house account).
What Are Alternatives to Bank Loans?
While many banks offer personal loans, there are some limitations. As noted above, many require you to have an account with the bank before taking advantage of a personal loan. Others might take longer to get you your loan. You might want to explore the below alternatives to banks for personal loans.
- Credit Unions: If you have less-than-stellar credit, you may want to reach out to credit unions near you for personal loans. While many require an account with the credit union to be open first, many are competitive with APRs and low amounts to borrow. This is best banks in washington state if you don’t need to borrow too much to cover an emergency.
- Online lenders: Many online lenders, or non-brick-and-mortar banks, give you quick and easy access to personal loans. You can see if you prequalify before applying, which doesn’t hurt your credit. If you do decide best banks in washington state apply, you can do so within a few minutes online, rather than visiting a branch in-person. After approval, you can usually get funds fairly quickly—sometimes within a day. The best online lenders offer little to no fees, flexible repayment terms, and competitive APRs.
The best banks for personal loans vary in your needs, but many have competitive offers for a variety of different potential borrowers. Before you choose to take out a personal loan with a bank, make sure you review all your options, including alternatives, first. Depending on your needs and how quickly you need money, you may find some banks or lenders are more friendly than others. If it takes you days or weeks to apply for a loan and get your money, that won't help in a time-sensitive situation.
We researched and reviewed more than 20 different lenders that offer bank loans before narrowing it down to our top choices. We considered factors such as starting interest rates, borrower requirements, and if the bank has online banking and physical branches. It was important for us to recommend bank best banks in washington state that come from reputable institutions with positive overall ratings and years in the industry.