Lakewood-based credit union set to acquire Seattle bank in $22M deal
Lakewood-based Harborstone Credit Union announced this week its plans to acquire its first bank.
Harborstone said it has entered into a “definitive agreement” to acquire Seattle-based First Sound Bank.
“The transaction is structured as a purchase agreement with Harborstone Credit Union purchasing substantially all assets and assuming substantially all liabilities of First Sound Bank,” the credit union said in a news release.
The move comes after gaining approval from each institution’s board of directors and is still subject to regulatory approvals, “approval by the shareholders of First Sound Bank and other customary closing conditions,” the release said.
The transaction is tentatively set to be completed in the first quarter of next year and “serves as a historic milestone, as First Sound Bank is the first bank Harborstone Credit Union will acquire,” it added.
Upon completion, “First Sound Bank will liquidate and dissolve and distribute its remaining assets to its stockholders,” Harborstone said in its release. “When finalized, the combined institution will have approximately $2.1 billion in assets, $1.5 billion in loans, $1.8 billion in shares and deposits and will have sixteen branches throughout King, Pierce, and Thurston counties.”
First Sound shareholders will receive ”approximately $6.90-$7.10 in cash for each share of First Sound Bank common stock, subject to adjustment based on the equity value at closing,” the credit union said.
“First Sound Bank customers will become members of Harborstone Credit Union with full access to all Harborstone Credit Union’s expansive product and service offerings,” it added.
First Sound president and CEO Marty Steele told the Puget Sound Business Journal on Wednesday that the deal put the total purchase price in the range of $22 million.
Steele, in the Harborstone announcement, said, “As a community bank we are deeply focused on providing resources and services for our customers to succeed, and feel that the additional services, products and locations Harborstone Credit Union provides will help us continue to meet the needs of our customers in this competitive environment. In addition, this transaction provides excellent value to our shareholders who have supported us over the years.”
“We’re excited to grow Harborstone Credit Union,” said Geoff Bullock, president and CEO of Harborstone Credit Union, in the announcement, adding that the acquisition will provide “extended services and products to First Sound’s clients, and adds new expertise and services to Harborstone Credit Union’s members.”
Harborstone dates back to 1955 when it was founded as McChord Federal Credit Union, serving airmen on the base, now Joint Base Lewis-McChord. The credit union has more than 87,000 members and approximately $1.9 billion in total assets, with 15 branches in King, Pierce, and Thurston counties.
First Sound Bank has approximately $175 million in assets with a single branch location in downtown Seattle, catering to small/medium businesses, nonprofits, entrepreneurs and others.
American Banker reported that this is the second proposed acquisition of the bank in recent years. In November 2021, BM Technologies announced it would pay $23 million for First Sound. That proposal was called off more than a year later after regulatory delays.
