Founded only three and half years ago, Mariner Bank, which has $52 million in assets, operates branches in Port Townsend and Hadlock and is the only community bank serving those communities. The merger will bring 98-year old Kitsap Bank's capitalization to around $735 million, and give it 27 branches, with 25 of those located between Gig Harbor and Port Angeles. Kitsap Bank already has a branch in Port Ludlow, and is in the process of constructing a new building for that branch. It will also build a new building for Mariner's Hadlock branch.

"Mariner Bank is a three and half year old bank with 10 percent of the Jefferson County Market," stated Kitsap Bank President and CEO Jim Carmichael. "This was a natural fit for us. Our Port Ludlow branch has been extremely successful. These two offices will fit perfectly with what we're already doing. We think this makes a lot of sense for us."

Mariner Bank President & CEO Jim Grabicki, who was born in Bremerton and grew up in Port Orchard, added, "This merger enables us to step up and do some things it would have taken us several years to accomplish." He cited such things as Kitsap Bank's Cash Management services, its state-of-the-art Electronic Banking, as well as interest-bearing, overnight "Sweep Accounts" and SBA lending capabilities as examples of immediate changes Mariner Bank would be able to offer its business clients.

He also cited significantly increased legal loan limits which will help land some larger prospective business clients. Mariner Bank's legal lending limit is $1.2 million per transaction, while Kitsap Bank's is $8 million. The legal loan limit is restricted to 20 percent of capitalization. Grabicki also noted that Kitsap Bank's mortgage lending operation is an additional benefit Mariner Bank hasn't been able to offer its customers until now.

In the straight cash deal, Mariner's 375 shareholders will receive the $16.2 million, being paid $32.09 per share. Grabicki will retire as president of Mariner Bank, but stay on as a consultant and will take a seat on Kitsap Bank's board. All of Mariner Bank's 15 employees, except for the CFO, will stay on with Kitsap Bank.

Based on total assets, Kitsap Bank is the largest commercial bank in the market area between the Tacoma Narrows Bridge and Port Angeles, with Bainbridge Island's American Marine Bank ranked second and Port Angeles-based 1st Federal Savings third. It's also ranked around 20th of all the banks in Washington State. The deal will give Kitsap Bank a solid 15 percent of the total banking market in that area.

The boards of both banks have already approved the deal. It now needs shareholder approval from Mariner Bank as well as regulatory approval. Mariner Bank customers can expect to see the name changes begin taking place around the end of the year.