- Supporting data: FS Bancorp in Mountlake Terrace, Wash., announced its first whole-bank acquisition since 2019 on Thursday.
- Key insight: The deal for the four-branch Pacific West Bank moves FS and its 1st Security Bank subsidiary into the Portland, Ore., market.
- Expert Quote: "This partnership with Pacific West represents a compelling step forward in our continued expansion across the Pacific Northwest." — FS President Matthew Mullet
FS Bancorp, the Mountlake Terrace, Wash.-based holding company for 1st Security Bank, has agreed to pay $34.6 million in cash and stock for Pacific West Bank in West Linn, Ore.
Though small in dollar terms, the deal, which is expected to close in the third quarter, has important strategic implications, since it would give FS its first presence in Portland. It also marks the first whole-bank acquisition by FS since 2019, when the company
The deal comes at a time of increased bank-merger activity, with institutions scrambling to take advantage of a
"We think the bull market still has legs," Hunsicker wrote Monday in a research note. "The strength in stock prices, the pent-up demand to do deals, and the substantially faster regulatory approval process will continue to accelerate M&A."
The $386 million-asset Pacific West operates four Portland-area branches. The region is home to about 2.5 million people and 45,000 businesses, most of them small enterprises with 50 or fewer employees, according to the Census Bureau.
The combined institution would have $3.6 billion of assets, $2.98 billion of loans and $3.03 billion of deposits. Its 0.5% share of Portland's $65.6 billion deposit market leaves plenty of room to grow.
"This partnership with Pacific West represents a compelling step forward in our continued expansion across the Pacific Northwest," FS President Matthew Mullet said Wednesday in a press release. "Pacific West has built a customer-focused commercial banking franchise with deep roots in the Portland-Vancouver metro area. Combining our organizations brings together complementary strengths that enhance our ability to serve our customers and communities."
Mullet, who served previously as the organization's chief financial officer,
The deal's financial highlights include expected growth in earnings-per-share of 7.4% in 2027. Tangible book value dilution is 2.2% with a projected earn-back of less than two-and-one-half years. First Security is projecting cost savings equal to 30% of Pacific West's noninterest expenses, which totaled $10.5 million in 2025, according to the Federal Deposit Insurance Corp.
FS is estimating a loan discount of $4.2 million or 1.51% of Pacific West's $276.6 million loan portfolio in assessing its fair value mark.
Pacific West reported net income totaling $650,000 in 2025, powered by 25% year-over-year growth in deposits. Pacific West lost money in 2024 and 2024, however.
Now, merging with FS will give its bankers and clients access to more capital, improved technology and a wider product set, CEO Jason Wessling said in the press release.
"We are excited to join FS Bancorp, a company that shares our commitment to relationship banking and community engagement," Wessling said.
