Thurston County-based First Community Financial Group has announced an agreement to acquire Gig Harbor’s financially troubled Harbor Bank. The acquisition is valued at about $7 million.

After posting year-end 2001 net income losses of $2.2 million, Harbor Bank was placed under a consent order by federal regulators last May. The order was intended to improve the bank’s financial condition and was initiated by the Department of Treasury’s Office of the Comptroller of the Currency following a report of examination issued by that agency in March.

Harbor Bank employees got word of the sale directly from CEO, Rich Emery — who was named earlier this year to bring about a resolution to the local bank’s financial troubles — and Ken F. Parsons Sr., chairman and CEO of First Community Financial Group, the holding company which owns the 19-branch First Community Bank of Washington.

Emery had dismissed earlier local speculation that the bank might be up for sale but acknowledged it was exploring what options were available.

Parsons said the acquisition, already approved by the directors of both financial institutions, is part of a larger strategy to expand First Community’s existing operations in Pierce County.

The acquisition has yet to be approved by regulators or shareholders of Harbor Bank, but both Parsons and Emery expect the approval processes to be concluded within the next 45 days.

Once the transaction is complete, Harbor Bank shareholders will receive $10.75 per share in cash for each share of stock. That figure is subject to reduction if Harbor Bank fails to maintain certain capital and reserve minimums. Harbor Bank also retained the right to terminate the agreement if the purchase price falls below $10 per share.

As of June 30, First Community Bank, which was established in 1979, listed assets of $371 million, with total deposits of $316 million. It operates in 4 Western Washington counties and also has 23 ATM locations. Established in 1997, Harbor Bank listed assets of $80 million and total deposits of $75 million.

During the six months ending June 30, First Community Financial Group reported a 45 percent increase in earnings over the same period a year ago, posting total earnings of $2,990,000. The company’s stock, which is held by about 1,500 shareholders, was valued at $1.35 per share — 47 percent higher than the $0.92 it earned in the first half of 2001.

Parsons noted First Community would continue to employ the majority of Harbor Bank’s current workforce, although a small number of employees may be asked to transfer to other branches. Emery will remain until the acquisition is complete, but does not expect to stay with the bank after that.

Parsons also said no decision had been made on whether to change the name of the newly acquired branches or continue to do business at those locations as Harbor Bank, but one is expected shortly.