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Whidbey Banking Company merges with off-island bank | UPDATE
Whidbey Island Bank will no longer be headquartered in Oak Harbor following a merger with Olympia-based Heritage Financial Corporation.
Washington Banking Company, the holding company for Whidbey Island Bank, and Heritage Financial jointly announced Wednesday the signing of an agreement for the “strategic merger.”
Coupeville resident Al Sherman said he was surprised by the news, but cheered the impressive growth of the bank over the past decade. His father, Clark Sherman, was among the original board members that started the bank in Coupeville in the early 1960s. Al Sherman’s uncle and he later joined the board.
“It’s been a long time since we started that little old bank in Coupeville,” he said. “It’s always been a real asset to the community.”
The headquarters of the bank was later moved to Oak Harbor and technically still remains in the city, though much administrative work occurs in Burlington.
Jack Wagner, president and chief executive officer of Washington Banking Company, said he negotiated during merger talks to ensure that the six branches in the Whidbey market will keep the name “Whidbey Island Bank.” All the other branches will bear the name “Heritage Bank.”
“I felt it was something we could do to honor the legacy of Whidbey Island Bank,” he said. “Plus, these people have always been very good to us.”
Wagner said he doesn’t expect employees at the branches to lose their jobs, but he said some “back-room folks” may lose positions because of redundancies between the two banks. He said the merger won’t be finalized until April 1, 2014, so any changes won’t occur right away.
The merger isn’t a certainty. Whidbey Island Bank announced a merger with Frontier Bank in 2007, but it fell apart after federal regulators found concerns in a consumer compliance exam of Frontier Bank.
Wagner said the merger is a great deal for investors and both banks. He said Heritage has branches from King County south to Portland, Ore. while Whidbey Island Bank has branches from King County to the Canadian border. The combined company will have a total of 73 branches.
“It will be a terrific franchise strung out on the I-5 corridor,” he said.
Wagner said the two banks are very similar. He said Whidbey Island Bank makes a little more money, but Heritage Bank is slightly larger in terms of assets. He said each is worth about $1.6 billion.
“The combination will result in one of the largest bank mergers between two in-state Washington banks, with transactions valued at approximately $265.1 million,” a press release from the bank states.
The leadership team of the merged company will be composed of executives from both organizations. Brian Vance, current chief executive officer of Heritage, will continue as CEO of the merged bank. The board of directors will be comprised of eight directors from Heritage and seven directors from Washington Banking Company.
Wagner said he plans to retire, but has agreed to help with the transition as a special adviser.