President and CEOTerry Zink commented during an April 27 conference call to discussfirst-quarter results on the strategy behind the announcement regarding theplanned acquisition of PrimePacific Financial Services.
"Thistransaction willcomplement our downtown commercial lending center and will expand our venture intoa larger [Small Business Administration] strategy," Zink said, accordingto a transcript. "[O]ne component of our diversification strategy is toenhance the non-interest income revenue streams. Our will enable Prime to build thatbusiness and accelerate revenue growth looking forward."
Zink notedthat Lynnwood, Wash.-based Prime is currently a $120-million-asset bank with aloan deposit ratio well above 90%. "They're located in the fast-growingSnohomish County just north of downtown Seattle. For folks who are not familiarwith the area, it's where Boeing employs 38,000 employees to assemble aircraftas well as other large employers ranging from the U.S. Navy to Wal-Mart,"Zink said. "We're very excited about this partnership given that PrimePacific is constrained in its growth by capital and core deposits, it playsdirectly into our strategy of supporting metro commercial lending growth byleveraging our abundant low-cost deposits."
He addedthat the Prime acquisition complements Cascade's branch .
"Insteadof deploying all the funds that we gathered in the BofA transaction into loweryielding securities, we can replace a relatively higher cost of deposit fromPrime Pacific and at the same time accelerate revenue. We will continue to beopportunistic as we look for acquisitions that will enhance the franchise valueof the Bank and also provide attractive return profiles. Importantly, ourinfrastructure continues to add capacity to handle the requirements of a largerbank and this does provide leverage for us," Zink said.
The Bend,Ore.-based company said that net income for the first quarter was $1.9million, or 3 cents per share, compared to $5.1 million, or 7 cents per share,for the first quarter of 2015.