Merger allows Coastal, Prime Pacific to meet new challenges

  • By Jim Davis The Herald Business Journal Editor
  • Tuesday, May 5, 2015 4:19pm
  • Business

It’s the latest in a long line of mergers of community banks.

Coastal Community Bank in Everett and Prime Pacific Bank of Lynnwood and announced in April that they intend to combine, pending regulatory and shareholder approval.

The deal makes sense for the banks on a lot of levels, said Eric Sprink, Coastal’s CEO and president, and Glenn Deutsch, CEO and of Prime Pacific.

“Our core values are the same,” Deutsch said. “We both understand what relationships are and we both understand the small business person is really the economic wheel that keeps things turning.”

The combined bank will have $704 million in assets and 15 branches after Coastal opens a Marysville branch later this summer.

For customers, the combined bank, which will retain the Coastal name, will have higher caps on the amount it can loan to businesses. The banks have no overlap, so the new entity isn’t expected to close any branches.

And the new bank will have new resources to handle today’s banking challenges.

“Prime Pacific and Coastal, we’re both healthy banks, but we need some size and scale to be able to fulfill the obligations of being a bank in today’s society,” Sprink said.

One of those challenges is navigating new federal financial regulations enacted after the recession.

Dealing with financial regulations wasn’t a driving force behind the proposed merger, but it was a factor, Sprink said.

The financial regulations were passed because of the failings of mega banks, he said.

But nearly all of the new regulations affect smaller banks like Coastal and Prime Pacific.

“All banks continue to feel the burden of a lot of regulation, and we’re only about halfway through the rulemaking process,” Sprink said.

This is the largest merger of banks with branches heavily centered in Snohomish County since Heritage merged with Whidbey Island Bank last year.

Expect more bank mergers to happen, said Mark MacDonald, president and CEO of Community Bankers of Washington, a group that represents independent community banks in the state.

“Certainly mergers are going to happen, because there are good fits between organizations, and I think that’s the case between Coastal and Prime Pacific,” MacDonald said.

Smaller banks are devoting between 2 1/2 to 3 1/2 full-time employees to make sure they’re in compliance with the new rules, MacDonald said.

“When you’re a small bank, that becomes very painful, to have that many resources dedicated to compliance,” MacDonald said.

MacDonald was part of a contingent of community bankers headed to Washington, D.C., in late April to press lawmakers about the very issue.

“When people talk about banks, they tend to think about the Wall Street banks, not the Main Street banks, the ones up on Colby,” MacDonald said. ““It’s our goal to get politicians to understand the difference between Main Street and Wall Street banks.”

In his opinion, regulation should be tiered, based on the size of a bank and the complexity of banking, MacDonald said.

And there should be multiple layers, with banks with $50 million in assets regulated far differently than banks with $20 billion or more in assets.

He said there’s value in community and regional banks because those institutions are often the ones that will take chances on new or struggling small businesses.

If lawmakers don’t support tiered regulation, MacDonald said, there will be fewer community banks in the future.

“I believe the big banks would love regulatory relief,” MacDonald said. “But I don’t believe they would support tiered regulation, because they would love to see the small banks disappear.”

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.