Interwest Bancorp, Oak Harbor, Wash., said Friday it will buy Pacific Northwest Bank of Seattle for $61 million of stock.

The agreement calls for $197 million-asset Pacific Northwest to become a separate subsidiary of Interwest. Pacific Northwest will keep its name.

It is Interwest's third deal in Washington since 1996, when it bought Central Bancorp., Wenatchee. Interwest closed a deal for Puget Sound Bancorp, Port Orchard, last week.

"After consolidation in (Washington) state in the 1980s, there are no real state-owned, statewide organizations," said H. Glenn Mouw, chief financial officer of $2.1 billion-asset Interwest. "We are trying to fill that void."

The deal is expected to close in the second quarter.

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