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What didn't kill local banks made them stronger

Snohomish County banks that weathered the financial crisis are seeing a return to profitability.

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By M.L. Dehm
Special to The Herald
Published:
There is a sense of optimism in the few banks still headquartered in Snohomish County. Stability has returned and profitability is on the rise.
CEOs are able to plan for expansion rather than survival. It's a far different picture from three years ago when local banks were struggling to stay afloat.
"A lot of them are gone now. It's really sad," said Glenn Deutsch, chief executive of Lynnwood-based Prime Pacific Bank.
Nearly half of the locally headquartered banks in Snohomish County disappeared during the financial crisis. Those that made it through have been rewarded with slow but steady growth and the return of the local customer.
"Thousands of former community bank customers, who were acquired as part of bank failures and acquisitions over the past few years, continue to move back to local community banks again," said Mark Duffy, CEO of Everett-based Mountain Pacific Bank.
People want local access to management, Duffy explained. They want someone local to make a decision about their loans and not a nameless, faceless person from out-of-state. They want the ability to meet with the CEO in his office.
Customers can choose from several local institutions. In Snohomish County, Prime Pacific Bank was founded in 1995 in Lynnwood, where it is still headquartered. Currently there are three branches -- Lynnwood, Mill Creek and Kenmore.
Prime Pacific is a full-service bank with both personal and commercial lending. The company's goal is to focus on the needs of small commercial businesses, Deutsch said.
Founded in 1997, Everett-headquartered Coastal Community Bank has investment services in addition to personal and commercial banking and lending. The company has experienced ongoing growth, according to CEO Eric Sprink, and profitability is up 51 percent.
"Coastal is doing very well and we're extremely pleased," Sprink said. "Everett and Snohomish and Island counties are wonderful markets. They are our only markets so we're very excited."
There are 10 Coastal branches, two of which opened earlier this year.
Everett-headquartered Mountain Pacific Bank returned to profitability this year. The bank was founded in 2006 and came near to closure when it was hit with a cease-and-desist order from the Federal Deposit Insurance Corp. in 2009.
The directors and some shareholders engineered Mountain Pacific Bank's survival by raising capital and through financing a development program for bank-owned real estate lots. The strategy worked.
Since 2011, Mountain Pacific Bank has been among the five fastest-growing banks in Washington. It has locations in Everett and Lynnwood.
1st Security Bank of Washington is headquartered in Mountlake Terrace with branches extending north to Lynnwood and south to Puyallup. It was established in 1936 as a credit union. Last year, the company went public with FS Bancorp as its holding company.
FS Bancorp reported 2013 second quarter net income of $1.1 million, or $0.36 per diluted share, compared to $621,000 for the same period last year.
Joe Adams, CEO of 1st Security Bank, said the company is committed to core values of service that make it a great place to bank for personal and business banking customers.
Adams said, "2013 has been a tremendous year for the bank in pursuit of this goal with increased earnings, excellent deposit and loan growth and wonderfully evolving relationships with the communities we serve, especially in Snohomish County."
Pacific Crest Savings Bank, located and headquartered in Lynnwood, began its life in 1984 as Phoenix Mortgage. It later converted to a Washington state-charted, federally insured savings bank in 1998.
Pacific Crest Savings Bank offers a variety of checking and savings products as well as specialized loans for multifamily, commercial and residential properties and construction loans for builders. There is an emphasis of online banking.
Pacific Crest Savings Bank CEO and co-founder Sheryl Nilson reported the bank has assets of more than $163 million.
Lynnwood-based UniBank is the only Korean-American bank still headquartered in Washington state. Last year, it tried to acquire troubled Pacific International but lost out to Los Angeles-based BBCN Bancorp.
Founded in 2006, UniBank has shown increased profitability for the past five consecutive years. Total assets are at $188 million with a future goal of $500 million. It features both personal and business banking as well as lending. UniBank has four branches but just one in Snohomish County that is also the corporate office.
The Bank of Washington started as The Bank of Edmonds. Currently headquartered in Lynnwood, its five branches have personal and business banking as well as real estate services.
The institution recently named Marty Steele as its CEO. He comes to The Bank of Washington at a time when the company has announced that it is poised for future growth.
But changes still occur in local banks. This doesn't always result in closure. Sometimes it's just a move of headquarters to outside the county.
In Island County, for example, Oak Harbor-headquartered Washington Banking Company, which runs the Whidbey Island Bank chain, recently struck a merger deal with Olympia-based Heritage Financial Corporation.
The deal means the headquarters for the institution will move outside of Island County and result in the renaming of several branches. It's a big step for the company that grabbed headlines in 2010 when it acquired City Bank of Lynnwood and North County Bank.
Wherever they are headquartered, most banks anticipate future growth as consumer confidence and the demand for loans increase. But most CEOs are happy to still be in business with a loyal customer base.

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