Homegrown Washington State Bank about to change hands


The Mirror

The days of Federal Way-based Washington State Bank as an independent bank are almost over following its acquisition by the owner of two small regional banking organizations.

If, as expected, state regulators and its shareholders approve the deal, Washington State Bank will be merged into Heritage Bank, a subsidiary of Heritage Financial Corp., the companies announced last week.

Terms of the purchase call for Heritage to pay approximately $3.9 million in cash and issue 210,000 shares of common stock. The latter is valued at approximately $5.1 million, making the total transaction worth about $9 million, according to Heritage.

In addition to Heritage Bank, which has 12 branches in Pierce, Thurston and Mason counties, Heritage Financial operates Central Valley Bank through six branches in Yakima and Kittitas counties in central Washington.

Washington State Bank, which will change its name to Heritage and whose sole office is at Pacific Highway South and South 324th Street, was established in 1992. Its focus is business banking, with a mix of retail and commercial customers. Its parent company, Western Washington Bancorp, reported $57 million in assets at the time of its purchase by Heritage.

Donald Rhodes, chairman of Heritage Financial, which is based in Olympia, said the acquisition puts the company in the “vibrant business markets” of south King County and boosts Heritage’s total assets to about $800 million.

Washington State Bank, which prided itself on being the only locally owned bank in Federal Way, will benefit from “the support of a larger company that has an excellent reputation for customer service and community involvement,” said Tony Tebeau, president and one of the original 10 founders.

The sale and merger are subject to regulatory approval, which is expected in the next couple months. Shareholders will formally vote on accepting the sale in March or April, followed by the name change.

Tebeau said he’ll probably retire, but Washington State Bank’s current staff will remain. “Customers will see the same faces,” he said.

Editor Pat Jenkins: 925-5565,

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