ILWACO - ShoreBank Pacific and OneCalifornia Bank of Oakland, Calif., announced a merger this weekend after federal regulators seized ShoreBank's corporate sibling in the U.S. Midwest.

In a related development, an important local non-profit organization is dropping the "ShoreBank" from its name but will otherwise be carrying on with business as usual, now as Enterprise Cascadia. Enterprise has played a leading role in financing the rebuilt campus at Clatsop Community College and other redevelopment projects.

The for-profit ShoreBank Pacific is formally based in a landmark building on the Ilwaco waterfront but also has major operations in Portland and in the Seattle area.

Subject to regulatory and other approvals, the marriage of ShoreBank Pacific and OneCalifornia Bank will result in a new institution with combined assets of more than $300 million. Terms of the transaction were not disclosed.

ShoreBank Pacific and Enterprise Cascadia both started in the 1990s under auspices of an innovative urban lender based in Chicago's South Shore neighborhood. But the West Coast operations operated with complete separation with regard to finances. Their health wasn't seriously impacted when many of the Chicago-based bank's loans began to go sour with the collapse of the real estate bubble.

On Friday, an Illinois state agency and the Federal Deposit Insurance Corp. stepped in and dismembered the Chicago ShoreBank, selling most of its assets to a new investment group, Urban Partnership Bank. FDIC will absorb total losses of about $367.7 million in the deal.

ShoreBank Pacific still sound ShoreBank Pacific, headquartered in the Pacific Northwest, was not included in the transaction and remains financially sound. The FDIC-insured bank, which serves local businesses and depositors from around the world, is in full operation.

"We have deep respect for ShoreBank and the good work they have done for their communities during the bank's 37-year history and we are thankful its mission continues under new ownership as Urban Partnership Bank," said ShoreBank Pacific CEO David Williams.

"For ShoreBank Pacific, we have plans for ensuring the long-term continuation of our 13-year track record of fostering sustainable community development."

ShoreBank spokesperson Laurie Landeros said Monday that the merger is "very good news for us." OneCalifornia is a "unique, creative bank" and "more like us than we are," in the sense that both banks have a keen focus on helping under-served communities and clients.

Both the newly configured bank and the freestanding Enterprise Cascadia will continue to do business out of the headquarters in Ilwaco. The bank employs about two dozen people in this area and has a track record of providing financing to a cross section of local businesses.

Williams said in an interview Monday "the presence of Ilwaco in our rural strategy is just critical." He said that at most one or two people at ShoreBank currently may fill roles that are duplicated within OneCalifornia. Williams said his own future within the newly merged banks remains to be determined.

Within in its urban setting, OneCalifornia mirrors ShoreBank's fundamental guiding principle of "adding to the communities in which they operate rather than being merely extractive," Williams said. The alliance of the banks will give access to outside capital and "will allow us to get growing again."

Williams said that FDIC's decision to allow ShoreBank Pacific to make these separate arrangements is an unusual acknowledgement by the agency of the local bank's value and soundness.

Enterprise Cascadia ShoreBank Enterprise Cascadia, a nonprofit affiliate not managed or controlled by ShoreBank Pacific, also continues its work. Its president and CEO, John Berdes, said that dropping "ShoreBank" from its everyday name will help avoid confusion.

"We recognize the need to simplify our organization," he said Monday.

Lower Columbia-area executives have been key players in harnessing regional resources for sustainable community projects and using federal tax credit financing. For example, its leaders encouraged the concept of leverage in working with Wells Fargo to renovate the college campus in Astoria.

Enterprise Cascadia has been "very close to the ground and good at delivering capital in ways others cannot," Berdes said. In the past 15 years, the non-profit has made $30 million in investments on both sides of the Columbia, helping "move the community where it wants to go," he said.

It has been a continuing leader in the top-to-bottom cleanup of the old Mill Pond site in Astoria and has helped grow an array of local businesses, including Goose Point Oysters in Bay Center and Pier 39 in Astoria.

Move greeted with enthusiasm Banking executives said the newly merged for-profit company operating in the Columbia-Pacific region will emerge stronger with the California partnership.

"The biggest beneficiaries of this merger are the communities we serve," said Williams, of ShoreBank Pacific. "With a shared commitment to community banking, and a host of complimentary services, this will bring a triple-bottom-line approach to community and environmental banking throughout California and the Pacific Northwest."

The move was greeting with enthusiasm by California bankers.

"This purchase will enhance our capacity to deliver fair and beneficial banking to the communities we currently serve in California and greatly expand our reach on the West Coast," said Tom Steyer, a co-founder of OneCalifornia Bank in 2007.

"This is an important strategic acquisition for OneCalifornia Bank of a valued pioneer of mission-driven banking," added Harry Haigood, chairman and CEO of OneCalifornia Bank. "With this purchase, we are committing to broaden our products and services as well as to extend our impact from California to Washington and Oregon.

"We applaud ShoreBank Pacific for its 13-year track record of fostering sustainable community development and remain committed to building the strength of the communities we serve. OneCalifornia Bank's history of providing responsible, affordable financial services to low-wealth communities compliments ShoreBank Pacific's focus on financing environmentally sustainable businesses. We think this merger holds the promise of great synergy."

Reporting on the collapse of the bank's parent company Friday, Chicago Business said that the new owners of the bank's Midwest operations, led by former Chicago Corp. senior executive David Vitale, will reopen 15 ShoreBank branches in Chicago, Cleveland and Detroit under the name Urban Partnership Bank. This new entity is pledging to carry on ShoreBank's vision of lending to low- and moderate-income homeowners.

An FDIC press release said all the old board members would be removed. In June, the parent company reported $2.16 billion in assets and $1.54 billion in deposits.

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