Seattle is like a trendy restaurant: Everyone wants in but there are very few tables available.

The city's economy is booming as it reaps the benefits of strong demographics, a growing population and a healthy technology sector. Banks have taken notice; in recent weeks two Seattle banks have agreed to sell themselves.

Unfortunately, there are barriers for banks eager to make a big splash in the market, industry experts said. The Pacific Northwest, and Seattle in particular, has a paucity of available banks, and the strong economy that makes the area attractive also provides a means for smaller institutions to grow and remain viable on their own.

Still, there may be opportunities for banks with the right amount of patience.

Aspiring acquirers "will be more selective" with potential targets, said Rory McKinney, co-head of investment banking at D.A. Davidson. "Publicly traded acquirers have their preferred targets in mind and are staying close to them."

Over the last four years, 17 banks in Washington — many of them around Seattle — and another nine in Oregon have found buyers.

Pricing for deals in Washington has been lower than the national average over that time, though Nathan Ail, a vice president of investment banking at D.A. Davidson, said the numbers would be in line with national trends if distressed banks were removed.

Seattle is attractive because of very low unemployment — 3.3% based on the latest data from the Bureau of Labor Statistics — and a population skewed toward well-educated professionals with good incomes. The area is also home to Fortune 500 companies such as Starbucks, Amazon and Microsoft and has more diversity that many other tech hotbeds, industry observers said.

"It is a strong growth market," said Brian Vance, president and chief executive of Heritage Financial in Olympia, Wash. "You've got a lot of tech companies that are expanding in and around Seattle and this has created a migration of employees to Seattle. The tech expansion has had a widespread regional impact."

The $3.6 billion-asset Heritage decided to strengthen its presence in Seattle by hiring lenders and opening a new office downtown. Heritage, which began looking at Seattle after buying Whidbey Island Bank in 2014, is looking for deals, Vance said.

Two Seattle-area banks are no longer available. The $120 million-asset Prime Pacific Financial in Lynwood, Wash., agreed to be sold to Cascade Bancorp in Bend, Ore, and the $443 million-asset Foundation Bancorp in Bellevue, Wash., is being sold to Pacific Continental in Eugene, Ore.

The $1.9 billion-asset Pacific Continental believes its deal should provide "meaningful operational scale and momentum in the Seattle market," said Roger Busse, the $1.9 billion-asset company's president and chief executive. "There will be more consolidation, but at a measured pace," he said.

"Certainly the Seattle market and the entire Pacific Northwest are very attractive," Busse said. "With major Fortune 500 companies headquartered in the region, a robust pace of growth and a vibrant and educated workforce, Seattle and the entire region are likely to continue to attract a healthy pace of M&A activity into the future."

The $2.5 billion-asset Cascade had been talking to Prime Pacific "for a while" about a merger, said Terry Zink, Cascade's president and chief executive.

Cascade, which had opened a loan production office in the area last year to focus on middle-market clients, was interested in the $120 million-asset Prime Pacific because of its strong Small Business Administration loan operations.

"Seattle has an incredible population base and a very robust economy," Zink said. "If you're going to be in the Pacific Northwest, you have to be in Seattle. That's where banks are looking."

Prime Pacific has low execution risk because it is small in proportion to Cascade's size, said Jacquelynne Chimera, an analyst at Keefe, Bruyette & Woods. She said Cascade can also fund loan growth around Seattle using deposits from slower-growing markets.

Most of the nation's biggest banks already have large operations in Seattle.

Bank of America, Wells Fargo, U.S. Bancorp and JPMorgan Chase collectively hold about three-fourths of the city's deposits, according to the Federal Deposit Insurance Corp. The $14.7 billion-asset Washington Federal, with a 4% share, and the $5.4 billion-asset HomeStreet, at 3.6%, are the biggest community banks.

Smaller banks in the area could also opt to merge with each other to gain the scale necessary to overcome increasing regulatory burden and low interest rates, industry experts said. At the same time, bankers in Seattle, where only 17 locally owned banks will remain after the Foundation and Prime Pacific deals close, are keenly aware of their institutions' scarcity value.

Still, the dynamics that make area banks appealing could provide enough incentive for those institutions to stay independent, said Timothy Coffey, an analyst at FIG Partners. The region "is incredibly healthy, and a lot of the banks that are doing well are small consumer types that provide mortgages," he said.

"I think M&A will be slower going forward," said Timothy O'Brien, an analyst at Sandler O'Neill.

"There are just fewer deals to be had," O'Brien added. "So much consolidation has already taken place amongst the banks in that region, and a lot of the banks I cover are considerably larger after adding several acquisitions."

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