Continuing its transformation into a commercial banking company, Interwest Bancorp of Oak Harbor, Wash., said this week that it would buy Liberty Bay Financial Corp. in Poulsbo, Wash., for $48.9 million in stock.

Interwest, a $2 billion-asset thrift company, would exchange 11 shares of its stock for each Liberty share. The $21-a-share deal is valued at 2.5 times Liberty's book value and 18.8 times earnings.

Liberty, the $179 million-asset parent of North Sound Bank, operates eight branches on Washington's Olympic Peninsula. North Sound would become an Interwest subsidiary.

Michael Clementz, Liberty's president and chief executive officer, said its customers "should benefit from an expanded line of services available and the convenience of an enlarged network of banking facilities throughout western and central Washington." Mr. Clementz would become an Interwest board member.

Interwest operates three banks with 54 branches in Washington. The Liberty purchase, expected to close early next year, would be Interwest's seventh of a commercial bank since 1996.

-- Alan Kline

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.