Everett bank back on its feet

EVERETT — With a single sentence from banking regulators, Mountain Pacific Bank became the first known Snohomish County-based institution to be released from recent federal oversight without an infusion of outside capital or a merger.

The Federal Deposit Insurance Corp. gave Everett-based Mountain Pacific the news in a brief letter this week:

“For your information, the joint Order to Cease and Desist issued … by the San Francisco office of the Federal Deposit Insurance Corporation and the Washington Department of Financial Institutions on March 5, 2009, has been terminated.”

Said Mountain Pacific Bank President and CEO Mark Duffy, in a news release: “We’re a better bank today for having gone through this process, but it was not an easy path. We could not have accomplished this without our loyal customers, talented employees, supportive investors and a fully engaged board of directors. We were successful in ‘keeping it local’ by working through our issues and raising new capital from local investors.”

Mountain Pacific Bank, which has branches in Everett and Lynnwood, said it had met all of the requirements of the regulatory order prior to a recent examination by regulators. Those included improving the quality of the bank’s loan portfolio and raising key capital ratios. Over the past two years, the bank reduced problem assets by $15.9 million while raising more than $10.5 million in new capital from local investors.

To date, most banks released from consent or cease-and-desist orders have followed FDIC closures, acquisitions by other institutions or loss of local ownership to out-of-area investors, Mountain Pacific Bank officials said.

Last October, Coastal Community Bank of Everett and its holding company, Coastal Financial Corp., submitted a notice of change in control to the Federal Reserve Bank of San Francisco, announcing that Steven Hovde of Barrington, Ill., would acquire “10 percent or more of the voting shares of Coastal Financial Corp., and thereby indirectly acquire Coastal Community Bank.” The notice also announced the appointment of Hovde to Coastal’s board of directors.

The same Federal Reserve Bank notice listed an investment by Seattle limited partnerships Montlake Capital II and Montlake Capital II-B to acquire voting shares of Coastal Financial Corp. and noted the appointment of Andrew Dale to the board of directors.

Coastal Community Bank CEO Eric Sprenk emphasized that the Montlake Capital II partners were one of the original investors in the bank and that Hovde is the bank’s only out-of-state investor.

“We just raised $9 million in capital,” he said. “The vast majority (of our investors) are local owners.”

Sprenk said Coastal Community Bank increased its lending in 2011 by 30 percent and saw deposits increase by 45 percent.

The Snohomish County banking landscape changed dramatically after the recession hit in 2008 and the housing and credit markets collapsed. Union Bank of California took over Frontier Bank in 2010 in a forced FDIC sale after Frontier couldn’t raise enough capital to offset its bad real-estate loan portfolio. Likewise, Whidbey Island Bank took the assets of City Bank and North County Bank when each failed. In 2011, Opus Bank of California took over Cascade Bank, and Columbia State Bank of Tacoma received the assets of First Heritage Bank after it failed.

“Local community banks provide the fuel for economic growth in communities like ours, and it’s been devastating for the people and businesses of Snohomish County to have lost so many local banks,” Mountain Pacific Bank board chairman Rick Pedack said in the news release. “We’re in this for the long term, and I’m proud that our success has helped preserve local community banking in Snohomish County. Now that we’re back on track, Mountain Pacific Bank is ready to grow into the void of locally owned, locally managed banks in this area.”

Kurt Batdorf: 425-339-3102, kbatdorf@scbj.com.

More in Herald Business Journal

Camano artist mixes flask, paintings for successful cocktail

Art flasks prove popular as bachelorette gifts, birthday presents and wedding favors.

Small retailers aim for emotional ties big chains may lack

“Put yourself into the community more and the money will come back to you.”

A look at what some stores have planned for Black Friday

With unemployment low, stores are hoping customers are in a mood to shop.

Boeing bolsters team for potential 797 with leading engineer

Terry Beezhold has been chief project engineer for the 777X program.

Uber paid off their hackers — they’re far from the only ones

“More and more companies have their own Bitcoin wallets for such cases.”

Airline defendants to pay $95 million in 9/11 settlement

The litigation claimed that security lapses led the planes to be hijacked in the Sept. 11 attacks.

Trump SoHo to shed ‘Trump’ amid reports of sagging business

The president’s company said it would have no comment beyond its news release announcing the move.

Uber reveals cover-up of hack affecting 57M riders, drivers

Uber acknowledges paying the hackers $100,000 to destroy the stolen information a year ago.

Mountlake Terrace-based 1st Security Bank wasn’t traded publicly during the recession, but it has seen a steady growth since the recession. (Jim Davis / HBJ)
How stocks in local banks fared since the recession

Every bank was hit hard during the recession, but most have bounced back in a big way.

Most Read