Later this year, probably this fall, Columbia Bank branches in Sequim, Port Angeles and Port Ludlow will become Sound Community Bank offices.
Sound Financial Bancorp Inc., the parent company of Sound Community Bank, announced Friday it had entered into an agreement with Columbia Bank to buy the three branches.
The deal, which will mean Columbia Bank no longer has a branch in Clallam and Jefferson counties, is expected to be finalized in the third quarter of this year.
The sale is subject to regulatory approval from the Federal Deposit Insurance Co. and the state Department of Financial Institutions, said Laurie Stewart, president and CEO of Sound Community Bank, from her Seattle office.
Fall conversion?
“We have no reason to believe it won’t be approved,” she said, adding that she expected to be converting the branches in the fall.
Employees at the Columbia Bank locations, estimated to be about a dozen overall, will become employees of Sound Community Bank, said Stewart, just as they did when Sound acquired the First Security branch in Port Angeles five years ago.
Customers will see little change, she said.
“For clients, the conversion of their accounts, their debit cards, their checks will be an automated process,” Stewart said.
“In many cases, they will be talking to the same people they talked to all along.”
Some customers will do their banking in different locations.
Moving locations
The company plans to move its Sequim branch, now at 541 N. Fifth Ave., to the present Columbia branch at 645 W. Washington St.
In Port Angeles, the present Columbia branch at 602 E. Front St. will move into the Sound Community Bank location at 110 N. Alder St.
No location changes are anticipated in Port Ludlow, where Columbia has a branch at 9500 Oak Bay Road.
Sound’s Sequim branch is a leased facility. In Port Angeles, the company owns the building but leases the land.
By the time the conversion is accomplished, those buildings may house new businesses, Stewart said.
“We know of a party that has an interest in having a building on that street” in Port Angeles, she said.
Deposits, loans
Sound Community Bank expects to receive about $30 million of deposits and $1 million of loans from the transaction.
Sound Community Bank will pay Columbia Bank a 2.35 percent total deposit premium on the transaction.
“The cost of funds from these branches is an attractive 14 basis points, and the cash received will be used to pay down FHLB [Federal Home Loan Banks] borrowings in the short term,” according to Sound’s news release.
“Therefore, the transaction is expected to be accretive by the end of 2014. The branch facilities are being acquired at book value.”
Not seeking a buyer
Columbia Bank was not looking for a buyer for the three branches, said Melanie Dressel, president and CEO of Columbia Bank and Columbia Banking System Inc., based in Tacoma.
“After careful consideration, we determined that it made sense,” she added.
“Among consideration in this decision was the treatment of our employees and customers going forward.
“With Sound’s long history on the Peninsula, they have a commitment to these communities and a well-known reputation as a good employer.”
Columbia Bank has 139 branches: 79 in Washington state and 60 in Oregon, said JoAnne Coy, vice president of corporate communications.
Sound Community Bank has done business in Clallam County since 1997.
The new branch in Port Ludlow will be the bank’s first in Jefferson County.
“We are very excited to expand our franchise on the Peninsula,” said Stewart, a graduate of Sequim High School.
“We have strong ties to the Peninsula.”
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Managing Editor/News Leah Leach can be reached at 360-417-3531 or at leah.leach@peninsuladailynews.com.
