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Bank fades into history
Everett-based Frontier Bank is acquiring Whidbey Island Bank, the only bank still headquartered on the island, in a $191 million deal announced to bank employees at 5:15 p.m. Wednesday.
When the merger closes next March, the Whidbey Island Bank name will be forever removed from the bank buildings, checks and credit cards, and even the scoreboard at the new Wildcat Memorial Stadium.
Michal Cann, president and CEO of Washington Banking Company, the holding company for Whidbey Island Bank, describes the merger as a very good move for just about everyone involved.
Its very positive for the community and our customers, its very positive in the long run for our employees, and its definitely very positive for our shareholders, he said.
Still, Cann emphasized that there will be changes and growing pains. There will be job losses across Whidbey Island Bank, Cann admits, though the exact numbers havent been worked out yet. He said the majority of senior management and some middle management will have to go.
Cann said Frontier has committed to offering outgoing employees severance packages, job outplacement and priority in job openings elsewhere in the bank. Theres currently around 70 Whidbey Island Bank employees in Oak Harbor and Coupeville.
John Dickson, president and CEO of Frontier Financial Corporation, said Whidbey Island Bank branches on the island will remain, after being converted to Frontier Banks, but its unclear whether the company will keep the administrative building in Oak Harbor. He said it depends on how many personnel work in the city.
The company is looking at creative ways of keeping jobs in Oak Harbor, Dickson said, including the possibility of a call center.
Cann will continue as senior vice president and regional manager, charged with overseeing the transition. My job will be to advocate for our employees and our customers, he said.
Cann also emphasized that the companys commitment to the community will continue after the merger. Whidbey Island Bank and its employees have long been supportive of community projects and causes, most recently the construction of the high school stadium. Cann promised folks can expect this kind of involvement to continue once Frontier takes over.
Frontier is a community bank, he said. They do the same kind of community banking we do and are involved in the community like we are.
Dickson agrees, noting that Frontier and Whidbey Island banks have similar cultures. Frontier Bank, he said, has a history of giving to causes, but more importantly, of encouraging employees to be involved in the community.
Community is an area that we always focus on. Its been part of our culture from the beginning... Dickson said. We think that being involved in the community is naturally good for business.
Both Cann and Dickson pointed out that the two companies have remarkably similar vision and mission statements. Whidbey Island Banks mission statement identified four key constituents the customer, employees, shareholders and community. Frontier identified the same constituents, with one addition regulators.
Frontier Financial Corporation, the holding company for Frontier Bank, is about four times the size of Whidbey Island Banks holding company. Frontier has $3.8 billion in assets and 48 branch offices in Western Washington. Whidbey Island Bank is worth about $850 million, with 20 branch locations in Island, Skagit, San Juan, Whatcom and Snohomish counties.
Whidbey Island Bank shareholders should be happy. Under the terms of the agreement, Frontier will pay about $21.40 per Washington Bank share.
Cann predicted that customers will also be very pleased with the change. He said they will have access to more products and services including more branches and ATMs in the state but that the commitment to building personal relationships will continue. When customers call the bank, for example, they will reach a live person, not a voice recording.
Frontier also has much more experience and expertise in real estate construction and land development financing. Because of its worth, it can make much larger loans. Whidbey Island Bank will bring its expertise in business loans to the table.
On the other hand, Cann concedes that some people will be sad to see a piece of island history change, though he argues its not really going away.
Whidbey Island Bank actually got its start in Coupeville in 1961. Cann said a group of local business people, including those with such well-known names as the Sherman family, saw a need for a locally-owned, independent bank. The bank headquarters was moved to Oak Harbor in the 1970s.
Cann said the company remained a sleepy, small bank until after he was hired in 1992. The bank opened a branch in Skagit County two years later, he said, and discovered there was a lot of demand for community banking. The bank grew from there.
Its been a tremendous success story, he said.
Scott Boyer, senior vice president of marketing for Whidbey Island Bank, said part of that success has been due to the banks involvement in the many other communities it has a presence in.
Its amazing that were considered a hometown bank in other communities. And Frontier is the same way, he said.
InterWest Bank was the other bank to get its start on Whidbey. Originally known as Island Savings and Loan, it was started in 1956 by Oak Harbor businessmen John Vanderzicht and John Vanderpol and grew into a company with $2.8 billion in assets and 55 offices in 16 Washington counties. Like Whidbey Island Bank, it was a successful company that was a very generous part of the community fabric. InterWest purchased Pacific Northwest Bankcorp in 2000, taking on the name and changing headquarters to Seattle. It was acquired by Wells Fargo in 2003.
Yet Cann contrasts Whidbey Island Banks fate with that of InterWest, pointing out that Frontier isnt a banking behemoth. He said officials from Frontier and Whidbey Island have long discussed the possibility of uniting since their philosophies and services are so compatible. In fact, Frontier has owned between 5 and 8 percent of Whidbey Island over the last decade.
It was a good time to join together, with more competition in banking and more uncertainties in the economy, he said. This will be good for everyone.