In a joint announcement early this morning, Heritage Financial Corp. and Puget Sound Bancorp Inc. of Bellevue said an all stock transaction will bring the King County financial institution into the parent of Heritage Bank.

The deal valued at approximately $126.1 million is expected to close in the first three months of 2018.

Puget Sound is a business bank established in 2005 with headquarters in downtown Bellevue and one branch location. It had $567 million in total assets, $371 million in total loans and $505 million in total deposits as on June 30th.

“This acquisition adds to our momentum in the Seattle- Bellevue marketplace,” says Brian Vance, president and CEO of Heritage Financial.

Jim Mitchell, Puget Sound’s CEO, adds, “We also believe this is a natural fit which increases lending capabilities, expands capital resources and provides a more expansive product offering.”

“Seattle-Bellevue is one of the strongest economies in the nation, and the combination of Heritage and Puget Sound will provide us with the operational scale to take advantage of significant growth opportunities,” explains Heritage Bank President and COO Jeff Deuel. 

Under the terms of the merger agreement, Puget Sound shareholders will receive 1.320 shares of Heritage common stock for each share of Puget Sound common stock, subject to potential adjustment.