Customers probably won’t notice many changes immediately after Whidbey Island and Heritage banks merge.
Shareholders for the banks overwhelmingly approved the deal in April at meetings in Oak Harbor and Olympia. The merger is to take place by today.
“Two strong banks coming together and continuing to grow is a real strong aspect of the merger,” said Brian Vance, who is Heritage’s president and CEO and will retain the role of CEO of the combined bank.
It will take several more months for the banks to combine their data processing systems. So the banking executives decided to keep things simple by having the Whidbey and Heritage branches operate separately for now.
That means that customers of Whidbey Island will continue to receive the same banking statements and meet the same staff at their branches.
Signs won’t change at the combined banks until fall.
“The customers should not notice any difference until Oct. 4,” Vance said.
The merger of two of Washington’s largest community banks was announced last October. The combined company will take the Heritage name and have $3.3 billion in assets, with 67 branches mainly along the I-5 corridor from Bellingham to Portland, Oregon.
The combined bank will be based in Olympia and will use Heritage’s NASDAQ ticker symbol, HFWA.
Shareholders of Whidbey Island stock are receiving 0.89 shares of Heritage common stock and $2.75 in cash for each share.
It’s one of two mergers affecting banks with branches in Snohomish County. Last month, Umpqua Bank, based in Portland, and Sterling Financial Corp., based in Spokane, announced that they received regulatory approval to combine. That new bank will retain the Umpqua name. There are two Sterling branches in Snohomish County and one Umpqua branch.
Whidbey Island Bank has 12 branches in the county and six in Island County. As part of the merger with Heritage, the branches on the island itself will keep the Whidbey Island Bank name.
Since the announcement of the merger, Vance and Jeff Deuel, president and chief operating officer of the combined bank, have been visiting all Whidbey Island Bank branches to get to know staff and talk with them about the “go-forward company,” Vance said.
Whidbey Island Bank president Bryan McDonald has been traveling to meet staff at Heritage branches. His title in the new company will be executive vice president and chief lending officer.
Jack Wagner, president and CEO of Washington Banking Co., Whidbey’s parent company, will be continue as a consultant.
The new board of directors will include eight members from Heritage and seven from Whidbey Island. Tony Pickering, chair of Whidbey Island Bank, will be chair of the combined bank.
The merger means that the combined banks will be able to offer some financial services as soon as this month that they hadn’t in the past.
For instance, Heritage has approval from the Federal Deposit Insurance Corp. to manage trusts and endowments for families and nonprofits. With the merger, Heritage is extending that service to the Whidbey Island branches.
The merger will likely mean that there will be some layoffs in the customer support areas of the banks, Vance said. They’re not sure how many positions will be eliminated.
“We’re hoping that in the process between now and October, or maybe a little bit later, there will be positions created through attrition” to lessen the need for layoffs, Vance said.
One of the advantages of the merger is that Whidbey Island Bank has almost all its branches north and Heritage Bank has almost all its branches south of King County.
“With many mergers, you’ll have overlap and branch closings,” McDonald said. “In this particular case, we don’t have that.”
With the footprint of the banks meeting in King County, they see that as an area to expand.
“That’s one of the major benefits of the combination of the two companies in terms having the additional resources to expand into that market,” McDonald said.
Snohomish County has been an important area for Whidbey Island Bank. And it will continue to be for the combined company, McDonald said.
“We’re seeing very favorable business activity in Snohomish County,” McDonald said. “Our outlook for the bank and customer base in Snohomish County looks to be very favorable.”