Harborstone Credit Union Plans to Acquire First Sound Bank

The $1.9 billion Harborstone Credit Union in Lakewood, Wash., said it expects to complete its purchase of the $174 million First Sound Bank (FSB) in Seattle for approximately $22 million in cash by next year’s first quarter, pending regulatory and shareholder approvals.

According to the definitive agreement announced Tuesday, FSB will receive approximately $6.90-$7.10 in cash for each share of FSB common stock. At the end of the first quarter, the bank recorded 3,150,000 shares outstanding, according to its FDIC Call Report for the first quarter of the year.

Founded in 2004, the bank operates one branch managing $143 million in loans, $152 million in deposits and $14.9 million in equity. At the end of the first quarter it posted net income of $178,000. In 2015, FSB purchased Eastside Commercial Bank in Bellevue, according to the FDIC.

The proposed acquisition helps Harborstone grow its presence in the Seattle market, diversify its assets, and add superior talent and expertise, the credit union said in a prepared statement.

“We’re excited to grow Harborstone Credit Union and owe this opportunity to the decades of smart and strategic decisions that have created a solid foundation for our expansion,” Harborstone President/CEO Geoff Bullock said.

This is the credit union’s first bank purchase deal.

“As a community bank we are deeply focused on providing resources and services for our customers to succeed, and feel that the additional services, products and locations Harborstone Credit Union provides will help us continue to meet the needs of our customers in this competitive environment,” Marty Steele, president/CEO of FSB, said.

Harborstone’s 286 employees operate 15 locations and serve more than 86,000 members.

This is the fourth credit union-bank buy deal publicly announced so far this year. By August 2022, 10 credit union-bank buy agreements were publicly announced.