Mail Stop 0408
October 18, 2006
David K. Johnson
President and Chief Executive Officer
WSB Financial Group, Inc.
607 Pacific Avenue
Bremerton, Washington 98337
Re: WSB Financial Group, Inc.
Registration Statement on Form S-1
File No. 333-137038
Filed October 11, 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.
Loans, page 40
1. Please refer to prior comment 22. Your revisions have not
disclosed how you monitor interest-only loans for collectibility
and
have not disclosed the terms of these loans, including option
ARMs,
and negative amortization features. Please revise to include the
disclosures previously requested. Additionally, if you have no
option ARMs or negative amortizing loans, please disclose that
fact.
2. Please refer to prior comment 22. Please revise the tables on
pages 41 and 42 to further disaggregate each loan type into the
categories of interest-only loans versus principal and interest
loans.
Allowance for Loan Losses, page 43
3. Please refer to prior comment 23. In light of the significance
and growth of your unallocated portion of the allowance both in
dollars and percentage of the whole allowance, please revise to
further describe in detail the changes in the factors affecting
the
unallocated portion of the allowance and how these changes
contributed to the increasing unallocated portion of the allowance
during recent periods. Discuss the trends you have experienced
that
led to these changes in the balance of the unallocated allowance.
Loan and allowances for loan losses, page F-23
4. Please refer to prior comment 33. Your accounting policy for
the
estimated losses associated with off-balance sheet commitments is
not
consistent with GAAP. If you continue to believe the amounts
involved are not material, please revise your disclosure to comply
with the requirements of SOP 01-6 and provide us with your
analysis
of the qualitative and quantitative factors considered to
determine
that the recognition of a separate liability for the off-balance
sheet commitments is not material. Refer to SAB 99. Otherwise,
please revise your balances accordingly.
Note 11: Employee Benefits, page F-35
5. Please refer to prior comment 31. In your revision you
disclose
that you have relied upon a third party valuation expert to
determine
the valuation of your stock issuances. Please revise to identify
the
valuation expert you have relied upon in these instances. Please
revise your section labeled "Experts" to discuss the reliance upon
the valuation experts and file with your next amendment consent
from
the valuation expert to refer to them in your Form S-1. Refer to
Item 509 of Regulation S-K.
Note 12: Fair Value of Financial Instruments, page F-35
6. Please refer to prior comment 36. Please revise to disclose
when
and if quoted market prices are utilized and when the matrix
pricing
model is utilized to determine the fair market value of your
securities. If quoted market prices are not utilized, when
available, please revise to disclose that fact and how you
determined
this policy complies with the guidance of paragraph 11 of SFAS
107.
* * * * * * * * * * * * *
After we issue additional comments, 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. Glen P. Garrison, Esquire
Keller Rohrback, L.L.P.
Suite 3200
1201 Third Avenue
Seattle, Washington 98101
David K. Johnson
WSB Financial Group, Inc.
October 18, 2006
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