EVERETT — The largest bank headquartered in Snohomish County is planning to merge with the oldest.
Everett-based Coastal Community Bank and Prime Pacific Bank of Lynnwood announced a deal Friday to combine, pending regulatory and shareholder approval.
Together, the banks will have more than $704 million in assets and 15 branches after Coastal opens a Marysville location this summer.
The new bank would retain the Coastal Community Bank name and would rank sixth in the county by deposits, behind only national and regional banks.
“One of the reasons we’re doing this merger is there’s an increased pressure to compete with those mega-banks,” said Eric Sprink, Coastal’s CEO and president. “That is why you’re seeing a lot of smaller banks partner with each other or merge so we can maintain our growth, keep up with technologies and customer requirements.”
Coastal now has 11 branches and 142 employees, mainly in central and northern Snohomish County. Prime Pacific has 32 employees and three branches, two in south Snohomish County and one in Kenmore in King County.
Sprink would continue as Coastal’s CEO and president after the merger. Prime Pacific President and CEO Glenn Deutsch will join the merged bank as executive vice president and chief operating officer.
Prime Pacific was founded in 1995, making it the oldest bank still headquartered in the county. Coastal formed in 1997 and was the bank that forgave several loans for people who lost property in the Oso mudslide last year.
“Our core values are the same,” Deutsch said. “We both understand what relationships are and we both understand the small business person is really the economic wheel that keeps things turning.”
The banks intend to keep all employees after the merger.
“We have no branch overlap,” Deutsch said. He noted that Coastal has branches everywhere but in the south county.
Shareholders for Prime Pacific will need to vote on the deal in May or June; no vote is required for Coastal shareholders. The merger is expected to close by the third quarter of this year if the banks obtain regulatory approval. Signs for the banks will change after that. The computer systems will be integrated by next February.
Both Sprink and Deutsch declined to discuss what the deal means for Prime Pacific shareholders, saying that those shareholders will receive details with their proxy.
“From a financial opportunity for a shareholder, the ability to grow your investment can be better with a larger institution than a smaller organization,” Deutsch said.
Sprink worked in banks in Eastern Washington before joining Coastal eight years ago. That’s about the time he first met Deutsch. They both now serve on the board of directors for Community Bankers of Washington, a statewide association of independent community bankers.
“We started talking about merging the two banks back in 2009 at the start of the financial crisis,” Sprink said. “We thought it would be easier to get through it with the combined balance sheet and capital, but it just didn’t work out.”
The pair resumed discussions last September, and the conversation turned more serious in December. Last month, the bank presidents took a proposal to their respective boards, who approved the deal.
The merger means that the bank’s customers will have more locations to do business. The merger also means that the banks will have the combined expertise of two staffs. And the combined bank will be able to offer new products, such as smartphone banking.
Meanwhile, Coastal is moving its headquarters to Evergreen Way in Everett and expects to fully occupy the new building next month.
“Our investors are backing a stronger, larger bank based in Snohomish County, headquartered in Everett, that has unlimited potential,” Sprink said.
The combined banks will explore future expansion, Sprink said.
“We’ll look to continue growing and continue to look for new branch locations as well as other community banks we could partner with,” Sprink said.
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