March 25 - Puget Sound Bank (OTCBB: PUGB), and Core Business Bank, both in Bellevue, Wash., have jointly announced the signing of a definitive agreement pursuant to which Puget Sound Bank will acquire Core Business Bank for $8,425,000 with a combination of 20 percent cash and 80 percent Puget Sound Bank common stock. This value represents 132 percent of Core's Dec. 31, 2012, net book value. The acquisition is expected to be accretive to Puget Sound Bank's earnings per share and tangible book value per share in the first full year of operations. The deal is expected to close in the second quarter of 2013 and is subject to the customary requirements that include regulatory approval as well as shareholder approval.
On completion of the transaction, the combined company will have more than $330 million in assets. The banks have two of the highest quality loan portfolios in the state. Puget Sound Bank has non-performing loans of 0.75 percent of its total loans and Core Business Bank has zero non-performing loans. Both banks have two of the highest percentages of commercial & industrial (C&I) loans relative to total loans in the state.
The combined net worth of the two companies will be approximately $44 million with a total risk-based capital ratio of 15 percent, well over the minimum of 10 percent, which the FDIC considers to be a well-capitalized bank. This level of net worth gives the combined company a legal lending limit, to any single entity, of approximately $9 million. The combined company will be the 29th largest bank headquartered in Washington based on deposits. There are currently 71 banks and thrifts headquartered in the state.
"2012 was an incredible year for Puget Sound Bank, with almost $2 million in net income, 53 percent over the previous year," explained Jim Mitchell, president and CEO. "We have some of the brightest and most experienced financial professionals in the business with the highest standards for customer service. This has allowed us to grow loans and deposits at the highest levels in the state since we began operations in 2005. This growth has created the platform for an acquisition strategy that has culminated in finding a partner that fits our criteria of a healthy Northwest bank that is focused on C&I lending."
"This is a great fit for both of our institutions," says Core Business Bank founder and CEO Dave Huguenin. "We have a similar culture that focuses on C&I lending and customer service, which will enable us to achieve greater success together than we could on our own."
On Dec. 31, 2012, Core Business Bank had $64 million in total assets, $57 million in deposits, net income for the year of $122,000 and zero non-performing loans.
Jim Schuler, current Core Business Bank board member, will join the Puget Sound Bank board of directors.
Puget Sound Bank was advised by Monroe Securities and Foster Pepper PLLC. Core Business Bank was advised by McAdams Wright Ragen Inc. and Keller Rohrback LLP.
Both banks are headquartered in Bellevue, Wash.
Puget Sound Bank is traded on the Over-The-Counter Bulletin Board with the symbol "PUGB."
About Puget Sound Bank
Puget Sound Bank is a locally owned and operated commercial bank proudly serving the greater Puget Sound region. Based out of Bellevue, Wash., the bank was founded to meet the specialized needs of small and medium-sized businesses, commercial real estate projects, professionals and individuals seeking a higher level of service in the Puget Sound region. Staffed by the most experienced, customer-oriented banking professionals in the region, Puget Sound Bank offers a full range of competitive financial products with superior customer service and a consultative/partnership approach to its clients. Puget Sound Bank provides online banking at www.pugetsoundbank.com and has access to a large branch network in the state of Washington. The bank can also provide remote capture technology which allows its clients to make deposits from their offices. Puget Sound Bank is located at 10500 NE 8th Street, Ste. 1500, Bellevue, WA. For more information, please call 425-455-2400.