Olympic Bancorp, the holding company for Kitsap Bank, was approved to receive up to $21 million through the Treasury’s Capital Purchase Program.

It has turned down the federal help, however.

James Carmichael, Kitsap Bank’s president and chief executive officer said, "We were notified several weeks ago that we were among the first of over 1,600 eligible Subchapter S Corporations nationwide to be approved.

"Kitsap Bank is gratified to be recognized for our safety and soundness, and that the U.S. Treasury remains confident in our long-term viability."

Federal regulators chose Kitsap Bank to assume all deposits and bank operations from failed Westsound Bank of Bremerton on May 8, 2009.

"Given the unprecedented economic environment, we wanted to keep our funding options open; and we seriously considered whether the additional capital would be beneficial as we took on the Westsound transaction, Carmichael said.

"But in the final analysis, we determined that TARP funding was not necessary and just not a fit for us. We were gratified that through our close working relationship with the FDIC, they agreed that Kitsap Bank was more than able to step up to the Westsound transaction on our own and we are very capable of moving forward without taxpayer funding."