FS Bancorp and Pacific West Announce Merger
Mountlake Terrace, Washington-based FS Bancorp has recently reached an agreement to merge with West Linn, Oregon-based Pacific West in a deal worth approximately $34.6 million. The merger is expected to be finalized in the third quarter of this year, as reported by Banking Dive.
Key Details of the Merger
- Upon completion of the merger, the combined entity will operate 31 locations, boasting $3.6 billion in assets, $3 billion in deposits, and $3 billion in loans.
- The merger will also serve to strengthen FS Bancorp’s subsidiary, 1st Security Bank of Washington, particularly in the Portland metropolitan area where Pacific West currently has four branches.
Insight into the Banking Sector
The banking industry has witnessed a surge in mergers and acquisitions following President Donald Trump’s return to office. While the focus in 2025 was on regional banks acquiring midsize lenders to expand nationally, 2026 is projected to see smaller banks with assets under $1 billion, like Pacific West with $386 million in assets, facing a shrinking pool of potential buyers.
As part of the merger deal, Pacific West shareholders will receive a combination of 430,176 FS Bancorp shares and $16,832,742 in cash. The total value of the transaction amounts to $34.6 million, based on FS Bancorp’s closing stock price of $41.26 as of Wednesday.
Financial projections indicate that the merger will have an immediate positive impact on FS Bancorp’s earnings per share, with an expected accretion of 7.4% in 2027. The tangible book value is anticipated to be recovered within 2.4 years.
1st Security CEO Matthew Mullet expressed enthusiasm about the partnership with Pacific West, emphasizing the combined strengths of both organizations in delivering enhanced services to customers and communities in the Pacific Northwest.
Jason Wessling, CEO of Pacific West, also shared his excitement about the merger, highlighting the benefits of joining forces with FS Bancorp in terms of expanded resources, technology, and product offerings for their stakeholders.
Upon finalization of the merger, Pacific West investors are expected to hold a 5.4% stake in the newly formed company, reflecting a shared vision for growth and community engagement.
In conclusion, the merger between FS Bancorp and Pacific West represents a strategic move to consolidate their presence in the Pacific Northwest while leveraging their respective strengths to create value for customers, employees, and communities.
