Tacoma, Wash.-based Sound Credit Union is set to purchase Bank of Washington in a first-of-its-kind deal for Washington State.
Sound CU and Washington Bancorp Inc. have entered into an agreement under which the credit union will purchase substantially all of the bank's assets and assume substantially all liabilities.
The proposed transaction is expected to close in the first quarter of 2019.
Under terms of the deal, Washington Bancorp shareholders will receive about $6.40 in cash per share, based on the outstanding shares as of the date of the purchase agreement.
Sound CU currently has about $1.5 billion in assets. The combined organizatoin will have approximately $1.7 billion in assets, $1.3 billion in loans, $1.5 billion in deposits and operate 29 branches throughout King, Pierce, Snohomish and Thurston Counties.
Sound CU posted net income of about $10.1 million in the first half of 2018, after recording net income of about $20.2 million in 2017.
The transaction, which has been unanimously approved by the boards of directors of both institutions, remains subject to regulatory approval, approval by Washington Bancorp shareholders and other customary approvals.
Don Clark, Sound CU’s president and CEO, stated that “this combination will help us further expand our footprint in Snohomish and King Counties, accelerate our business and mortgage lending efforts, and add great employees. We feel the value and cultures of both companies are very similar with a strong commitment to customers and the communities in which we serve.”
Marty Steele, Washington Bancorp’s President and CEO, commented: “As a larger and stronger financial institution with a significantly higher legal lending limit, we will be better able to compete in today’s competitive environment and serve our customers.”
Sound CU was advised in the transaction by Howard & Howard of Royal Oak, Mich. as legal counsel.
“This is the first credit union purchase of a whole bank in Washington State,” said Michael Bell, an attorney with Howard & Howard who regularly advises on CU-bank purchase deals. “This serves as additional proof that this is a viable option for credit unions and banks nationwide.”
