Dive Brief:
- Tacoma, Washington-based Sound Credit Union will acquire Olympia-based Washington Business Bank, the institutions announced Monday in a press release.
- The deal, expected to be completed in the fourth quarter, will create an institution with roughly $3 billion in assets, $2.3 billion in loans and $2.5 billion in deposits, and give Sound a deeper presence in Olympia, where it already has one branch.
- At closing, Washington Business Bank shareholders will receive roughly $34 to $36 for each share of common stock they own. The $105 million-asset bank will liquidate after the transaction closes.
Dive Insight:
Buying Washington Business Bank will give Sound Credit Union just one added branch. But credit unions sometimes use bank acquisitions to strengthen their commercial lending programs, and that could be one of the factors involved in the deal.
“There are multiple strategies that seem to transcend most transactions, including geographic expansion and talent and capabilities gain,” Michael Bell, an attorney at Honigman, said in an interview.
Washington Business Bank has served as a “cornerstone” for business owners in its market for more than 20 years, Sound said.
“We look forward to providing these new members the same level of excellent service, an expanded suite of products and services, as well as all the benefits membership in a credit union brings to help their businesses and families thrive,” Don Clark, the credit union’s CEO, said in Monday’s press release.
Washington Business Bank has worked alongside small-business owners across Washington state since its founding in 2002, said Jon Jones, CEO of the bank.
“We know these owners will find the same level of partnership with the Sound Credit Union team for years to come,” he said in the release.
The deal marks the sixth purchase of a whole bank by a credit union so far in 2024, though the year has also brought two partial bank footprint acquisitions by credit unions. Daleville, Alabama-based All In Credit Union agreed to acquire five branches of 22nd State Bank, and Poughkeepsie, New York-based Hudson Valley Credit Union said last week that it will acquire eight branches from Berkshire Bank.
By comparison, there were 11 credit union-bank tie-ups proposed in all of last year — short of the record 16 announced in 2022.
The Sound deal is also the second acquisition of a bank based in Washington state this year. Renton-based First Financial Northwest Bank is being bought by Anchorage, Alaska-based Global Federal Credit Union, the institutions announced in January.
Washington Business Bank is the second bank Sound has bought. The Tacoma-based credit union purchased Bank of Washington in 2019, and acquired a branch of First Interstate Bank in 2021.
Sound Credit Union earned $21.2 million in 2023, a 6% decrease compared with a year earlier, according to call report data from the National Credit Union Administration.
Net income for Washington Business Bank was nearly $1.6 million in 2023, 34% higher than year-end 2022, the bank said in a press release.
