Mail Stop 0408
November 22, 2006
David K. Johnson
President and Chief Executive Officer
WSB Financial Group, Inc.
607 Pacific Avenue
Bremerton, Washington 98337
Re: WSB Financial Group, Inc.
Amendment Number Three to Registration Statement on Form S-1
File No. 333-137038
Filed November 14, 2006
Dear Mr. Johnson:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your documents in
response to these comments. If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Cover Page
1. We note your response to comment 3 of our letter to you dated
November 9, 2006. Please revise footnote 1 to clarify that the
data
is based upon your assumption that you will sell not sell any of
the
325,000 shares offered for sale under the directed share program
to
directors, officers, employees, business associates and 538 other
persons.
WSB Financial Group, Inc., page 1
2. We note your response, on page 1, to comment 4 of our letter to
you dated November 9, 2006. Please revise this section, and
similar
disclosure elsewhere such as the MD&A and the Business section, as
follows:
* as we have requested in comment 4 of our letter to you dated
November 9, 2006 and in comment 1 of our letter to you dated
October
27, 2006, revise your claim, in the first sentence of the first
paragraph and similar claims elsewhere such as on pages 21 and 56,
that you have "an array of commercial bank and real estate lending
products" to state, as the Federal Deposit Insurance Corporation
states in its CRA Performance Evaluation that you are "a
primarily
mortgage-lending focused financial institution;" and
* supplement your claim, in the third paragraph and elsewhere such
as
page 56, that you are the "fastest growing bank in the Pacific
Northwest" to disclose your rank based on dollar growth and
disclose
the highest growth by a bank in the Pacific Northwest was $5.8
billion while your growth was $306 million.
Our Market Area, page 3
3. We note your response, on page 3, to comment 5 of our letter to
you dated November 9, 2006. Please revise this section, and
similar
disclosure elsewhere, as follows:
* revise your statement, in the second paragraph, regarding the
"national attention" that Kitsap County has received for its
"economic success" to disclose that, according to the FDIC, your
main
office in Bremerton is located in a "low income" area and that the
five branches are located in "middle income" areas;
* revise your claim, in the second paragraph, that Bremerton was
"named one of the country`s hottest small cities" to disclose that
this designation was for the hottest cities for entrepreneurs; and
* revise your claim that you benefit from the economic activity in
and around the Seattle metropolitan area to clarify that you do
not
have any branch offices in the Seattle metropolitan area and to
disclose the FDIC finding that the lending volumes in both your
locations closest to Seattle, (the branch in Mason County and your
loan office in Federal Way) "are not as significant [as your other
branches and loans offices] and do not greatly impact the bank`s
overall performance."
The Offering, page 5
4. We note your response to comment 5 of our letter to you dated
November 9, 2006. Please revise the second bullet point, and the
section on page 97, to clarify that
* you assume that you will sell none of the 325,000 shares offered
for sale under the directed share program to directors, officers,
employees, business associates and 538 other persons; and
* your assumption is based upon the fact that none of these
persons
have made binding commitments to purchase any shares or have made
indications of interest.
Management`s Discussion and Analysis, page 21
5. Please revise the third paragraph on page 21 as follows:
* disclose the percentage of revenues from real estate loans;
* discuss and provide analysis of the findings of the FDIC in its
CRA
Evaluation that your "portfolio figures do not provide an accurate
portrayal of the bank`s actual lending activity" since the
portfolio
figures do not include the "significant amount" of residential
loans
that you make and sell; and
* provide analysis of the extent that your revenues are derived
from
residential mortgages and real estate generally and the risks that
real estate market declines.
Kitsap County, page 57
6. We note your response to comment 13 of our letter to you dated
November 9, 2006. Please revise the first paragraph to disclose
that, according to the FDIC, your main office in Bremerton is
located
in a "low income" area and that the other branches are located in
"middle income" areas.
Seattle Metropolitan Area, page 59
7. As we requested in comment 14 of our letter to you dated
November
9, 2006, please disclose percentage of loans and the percentage of
your deposits that originate in Seattle and the Seattle
metropolitan
area or disclose that you do not have such information. In
addition,
please disclose the following:
* that you do not have any branches or loan offices in Seattle or
in
the Seattle metropolitan area; and
* that the FDIC found that the lending volumes in both your
locations
closest to Seattle, (the branch in Mason County and your loan
office
in Federal Way) "are not as significant [as your other branches
and
loans offices] and do not greatly impact the bank`s overall
performance."
Underwriting, page 94
8. As we requested in comment 16 of our letter to you dated
November
9, 2006, please provide more detail regarding the circumstances
under
which D.A. Davidson may change the offering price and other
selling
terms including, but not limited to, the following:
* when you are legally permitted to change the offering price and
offering terms;
* what disclosure you will make if you change the offering price
and
offering terms; and
* whether you will sell some shares within the offering range and
some shares below the offering range.
* * * * * * * * * * * * *
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company and each filing person
acknowledging that:
* the company or filing person is responsible for the adequacy and
accuracy of the disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company or filing person may not assert staff comments as a
defense in any proceeding initiated by the Commission or any
person
under the federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Margaret Fitzgerald at (202) 551-3556 or
Kevin
L. Vaughn at 202-551-3494 if you have questions regarding comments
on
the financial statements and related matters. Please contact
either
Jonathan E. Gottlieb at (202) 551-3416 or me at (202) 551-3491
with
any other questions.
Sincerely,
Todd K. Schiffman
Assistant Director
cc. Thomas A. Sterken, Esquire
Keller Rohrback, L.L.P.
Suite 3200
1201 Third Avenue
Seattle, Washington 98101
David K. Johnson
WSB Financial Group, Inc.
November 22, 2006
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