Key Bank of New York and West One Bancorp of Boise today finalized the purchase of 86 Security Pacific branches, including 50 in the Puget Sound area.
The banks will split the branches, with West One taking most of those around Puget Sound - 35 - and Key Bank taking the other 15 in the area.
Federal regulators must approve the sale of the branches.
The branches are being spun off by BankAmerica, which is buying Security Pacific operations in five states. In Washington, BankAmerica unit Seafirst Bank will take over 82 Security Pacific branches, effective April 24.
Completion of the sale of the branches to West One and Key Bank
eliminates speculation that local investors would buy the branches and form a new bank, possibly to be called Rainier Bank, a sentimental favorite because of its local history. Rainier, the predecessor to Security Pacific, began here, last century, as National Bank of Commerce.
The investor group, headed by businessman Stuart Sloan and former Security Pacific Chairman John Mangels, hoped to buy the Security Pacific branches. But the deal reportedly got too big and expensive for the group, as BankAmerica expanded the list of branches it would spin off to 86 from 36.
The domino effect of all the bank acquisitions going on now in Washington state is to create a new lineup of big banks here: Seafirst, Key Bank (which is acquiring Puget Sound Bank in a recently announced deal), U.S. Bank and First Interstate.
The buyouts are the latest in a string of acquisitions that are consolidating the nation's banking industry into a two-tier system of megabanks and tiny "niche" banks.
Gone - or on their way out - are the mid-size banks that customers say combine the convenience of branches with the friendliness of a neighborhood banker.
Industry insiders say large banks are stronger, can save money through economies of scale and must still compete with each other to offer consumers the best deal.
But the consolidation has its disadvantages, many acknowledge.
"I question that, as banks grow larger, the personalized service will be better than it is today," said Don Vandenheuvel, president of Puget Sound Bancorp. "Larger banks tend to be more transaction-oriented, as opposed to relationship-oriented."
But he added that large banks often pay higher interest on deposits and charge less interest on loans than smaller banks.
Here are the Security Pacific bank branches and other operations West One is buying:
PUGET SOUND BRANCHES: Bellevue/Security Pacific Plaza, Bellevue Way, Bellingham, Bremerton, Enumclaw, Federal Way/West Campus, Gig Harbor, Kirkland/Carillon Point, Mount Vernon, Puyallup/Willows, Redmond/Redmond Way, Seattle/Admiral Way, Seattle/Ballard, Seattle/Battery Street, Seattle/Burien South, Seattle/Main office, Seattle/One Union Square, Seattle/Pike Place, Seattle/Seattle Pacific, Seattle/Waterfront Place, Sumner, Tacoma/Broadway Plaza, Tacoma/James Center, Tacoma/Lakewood, Tacoma/Pacific, Tacoma/Parkland, Tacoma/Proctor, Tacoma/University Place. ACROSS THE STATE (counties noted): Olympia (Thurston), Olympia/Tanglewilde (Thurston), Sedro Woolley (Skagit). SAVINGS BANK BRANCHES: Bellevue, Kent, Puyallup, Tacoma/Lincoln, Tacoma Main, Tacoma/27th Street.
Here are the Security Pacific bank branches and other operations Key Bank is buying:
PUGET SOUND BRANCHES: Arlington/Smokey Point, Everett/California Avenue, Granite Falls, Lynnwood North, Renton/Sunset Blvd., Seattle/Capitol Hill, Seattle/Crown Hill, Seattle/Holman Road, Seattle/Industrial Center/First Ave. S., Seattle/International District, Seattle/Lake Union, Seattle/Magnolia, Seattle/Rainier Beach, Seattle/University/N.E. 45th St., Tukwila/Southcenter. Also, Seattle Private Banking Office. ACROSS THE STATE (counties noted):, Aberdeen/Grays Harbor (Grays Harbor), Brewster (Okanogan), Centralia (Lewis), College Place (Walla Walla), Colville (Stevens), Coulee City (Grant), Dayton (Columbia), Elma (Grays Harbor), Goldendale (Klickitat), Grand Mound (Thurston), Ilwaco (Pacific), Kennewick (Benton), Kettle Falls (Stevens), Long Beach (Pacific), Longview (Cowlitz), McCleary (Grays Harbor), Medical Lake (Spokane), Montesano (Grays Harbor), Moses Lake (Grant), Oakville (Grays Harbor), Oroville (Okanogan), Othello (Adams), Pomeroy (Garfield), Port Angeles (Clallam), Ritzville (Adams), Spokane/Spraque & Havana (Spokane), Wapato (Yakima), Waterville (Douglas), Wenatchee (Chelan), White Salmon (Klickitat), Wilbur (Lincoln), Yakima (Yakima), Zillah (Yakima). Also, Eastern Business Banking Center, Moses Lake Business Banking Center, Wenatchee Business Banking Center, Yakima Branch Banking Center.