Published June 25, 2004

KeyBank to acquire EverTrust

SCBJ Staff

KeyBank will pay $194.7 million to acquire Everett-based EverTrust Financial Group. The deal, which will make KeyBank the second-largest bank in Snohomish County, was signed June 24 and announced the following day.

The transaction, subject to approval by EverTrust shareholders and by appropriate state and federal banking regulators, is expected to close in the fourth quarter of this year. Under terms of the agreement, EverTrust shareholders would receive an aggregate price of $194.7 million or a cash distribution of $25.60 per EverTrust common share.

The acquisition, when completed, will add 12 banking offices in Snohomish and King counties to KeyBank’s 73 KeyCenters in its Seattle-Cascades District, which spans 12 counties.

With assets of $770 million, EverTrust’s primary market is Snohomish County, where KeyBank currently operates eight offices. The merger elevates KeyBank to the second-largest financial institution in Everett, in terms of deposits, and the fourth largest within Snohomish County, according to Cleveland-based KeyCorp, KeyBank's parent company.

EverTrust’s principal lines of business include commercial real estate, small business, private banking and asset management, all of which are among Key’s core businesses. EverTrust’s commercial real estate business represents a particularly strategic fit with KeyBank Real Estate Capital, KeyBank officials said, noting that EverTrust’s commercial real estate business operates from two stand-alone offices in Tacoma and Portland, Ore., in addition to branch offices in Seattle, Bellevue and Everett.

“This is a strategic fill-in acquisition for Key that will significantly enhance our presence in the Puget Sound region’s important Everett market and along the I-5 corridor,” said Jack Kopnisky, head of consumer banking for KeyBank. “The office network expands our reach in high-growth, attractive communities contiguous to our current operations, thereby offering great opportunities to expand Key’s small-business, middle-market, retail and high-net-worth businesses.”

“Throughout the discussion process, KeyBank proved to the EverTrust Board of Directors that this was the best fit possible for our customers, our employees and our shareholders,” said Michael Hansen, EverTrust Financial Group chief executive officer. “We believe that this merger offers substantial opportunities. We look forward to working with Key in the coming months.”

“Customers of EverTrust will benefit from a number of Key products and services to be launched in conjunction with completion of the transaction,” said KeyBank’s Seattle-Cascades District President Jim Peoples. “Key will introduce or enhance a range of products, including small-business services, home equity loans and corporate cash management products and services.”

EverTrust was formed in 1916 in Everett as the Scandinavian-American Savings Association. It was known as Everett Mutual Bank until it changed its named to EverTrust Financial Group in January 2001. Its headquarters building on Colby Avenue -- the Everett Mutual Tower -- is downtown Everett's tallest office building.

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