InterWest becomes commercial bank
July 3, 2008 · Updated 12:31 PM
"InterWest Bancorp, a bank holding company based in Oak Harbor, is making a bold and expensive move into business banking and consolidation of its subsidiaries throughout Central and Western Washington.The company announced Tuesday that it is converting InterWest Bank from a savings bank to a commercial bank. The company is also consolidating its five commercial bank subsidiaries into a single commercial bank under one name.By early 2001, InterWest President and CEO Patrick Fahey said InterWest and the five other banks the corporation owns will be converted to the same state-of-the-art operating system. The other five commercial banks - which include Pacific Northwest Bank in Seattle, Bank of Tukwila and others in Ellensburg, Yakima and Port Orchard - will be renamed InterWest Bank. That means InterWest customers will be able to bank at any of the subsidiaries.Fahey said that converting from a savings bank to a commercial bank isn't really a big change - and will have very little effect on customers - but is more of an image thing.He said the move sends a message to investors that InterWest is serious about commercial banking.'It will help clarify who we are, what we are and what we will become, he said, but added the biggest functional change the conversion will have is that commercial banks have a higher lending limit.InterWest Bancorp has $2.8 billion in assets and 55 branches throughout Central and Western Washington.According to Fahey, the company has been moving into commercial banking - loaning to businesses instead of individuals - since the mid-90s and the move has nothing to do with his recent rise to the top of the company. He replaced long-time CEO Barney Beeksma after a surprise vote of the board of directors last month.Fahey said the company has acquired seven commercial banks since 1996, two of which were immediately folded into InterWest, while the others became separately-functioning subsidiaries.He also said the move is very unusual in the banking business since it involved putting six different operating systems and six different banks together in one operation. You hear about putting two systems together, but never this many, he said.It will be an expensive conversion - a big investment - but Fahey believes it will be worth it. It will be more efficient to have one consolidated operation system, he said. It will make our employees' lives a lot easier."