Bank of Everett merges with three other state banks

Four Washington state-based banks, including the Bank of Everett, will begin operation as one institution Monday.

Bank of Everett will consolidate itself into Bank of the Northwest, along with Bank of Bellevue, Bank of Tacoma and Issaquah Community Bank. The move is intended to alleviate pressure on the banks’ Michigan-based holding company, which was hit hard by federal regulators last year.

Parent company Capitol Bancorp is shrinking its nationwide holdings in the aftermath of the recession, which rendered its quick-growth approach to profitability ineffective.

“We opened four banks here in Washington in the last 4½ years, and — largely because of the recession — it’s very difficult for them to grow in this environment,” said Thomas Giovanelli, the newly-named president and chief executive of Bank of the Northwest.

Combining the four banks eliminates the need for immediate growth, he said.

The merger allowed for a stable balance sheet and cutbacks to staffing and operations. About 20 employees were laid off as part of the consolidation.

The four bank locations will continue to operate as Bank of the Northwest offices, and customers won’t be affected by the merger, according to a statement from the bank.

Giovanelli, formerly the chief executive and chairman of Bank of Bellevue, said Friday that the new institution is moving forward with plans to deliver a “relationship banking” approach to small business lending.

“It is a tough environment for banks, particularly in Washington,” he said. “But where there are problems, there are also opportunities.”

Three Washington banks were shuttered early this year, adding to a long list of closures around the nation.

Bank of Tacoma was operating under a federal order to improve capital. Giovanelli declined to comment on how that order would affect the Bank of the Northwest.

Read Amy Rolph’s small-business blog at www.heraldnet.com/TheStorefront. Contact her at 425-339-3029 or arolph@heraldnet.com.