Delafield Leads $50 Mln Investment in Seattle Bank

Seattle Bank said Monday that it has received a more than $50 million investment from local entrepreneurs and VCs. J.D. Delafield, the chairman, CEO and president of Delafield and Hambrecht Investors, led the $50 million round. Other investors include: Nicolas Hanauer, a partner with Second Avenue Partners; Rich Barton, the founder of Expedia and co-founder of Zillow; and, McCaw Cellular’s John McCaw. Seattle Bank, the parent of Seattle Escrow Co. and Seattle Mortgage Co., had $450 million in total assets at the close of the deal.

PRESS RELEASE

In a first-of-its-kind transaction in Washington State, a group of local investors and business leaders invested more than $50 million into Seattle Bank, creating one the state’s strongest financial institutions, announced Patrick F. Patrick, president and chief executive officer of Seattle Bank.

Local business leaders and investors, led by merchant banking firm Delafield Hambrecht, Inc., infused $50 million into the community bank. The new financial foundation, new management team, and new strategic plan set Seattle Bank on a course to become the leading community bank in the Puget Sound region.

“These business and civic leaders with strong ties to the Puget Sound region are making a long-term commitment to build a strong bank headquartered in our own community,” said Patrick. “They recognize this as a once-in-a-generation opportunity to establish a truly Seattle bank, based on the needs of this region. And while the Puget Sound has no shortage of banks, there is a significant need for one that is part of the fabric of our community, gives local businesses access to decision makers, and most importantly shares a common set of values with our neighbors.”

The investors include entrepreneur and venture capitalist Nick Hanauer, Expedia/Zillow Co-Founder Rich Barton, McCaw Cellular’s John McCaw, fishing executives and investors Peter Kuttel and Roger May, and local entrepreneur, angel investor and former CEO of Everett Shipyard, Nick Eitel. More than 60 individuals invested in Seattle Bank.

“This recapitalization is extraordinary,” said J.D. Delafield, Chairman of Delafield Hambrecht, Inc. “Seattle Bank was able to do something no other bank in the state has done. We see this as a chance for Seattle once again to have a bank to call its own.”

The infusion brings Seattle Bank’s Total Risk Based Capital Ratio to 21 percent, as of the close of the transaction. This significantly exceeds the federal regulatory standard for a “well capitalized” financial institution. The recapitalization is part of a comprehensive plan approved by regulatory agencies to strengthen Seattle Bank’s balance sheet, enhance overall compliance management, and diversify and expand business and consumer lending.

“Looking ahead, Seattle Bank plans on continuing to offer competitive products and services and friendly, trusted, and knowledgeable local banking professionals,” explains Patrick. The bank’s strategic plan calls for adding new locations as well as more products created with the businesses and residents of the Puget Sound in mind. By doing so, he says, “Seattle Bank brings the community a strong, competitive, local alternative at a time when out-of-state and large national banks are controlling the majority of our community’s deposit resources and how those resources are reinvested.”

Seattle Bank had total assets of $468 million, as of December 31, 2010. Seattle Bank offers businesses and consumers the products and services of a big bank backed by the flexibility, service, and peer-to-peer relationships of a neighborhood bank. Together with its wholly-owned subsidiary, Seattle Mortgage Company, Seattle Bank operates five full-service banking centers, a comprehensive virtual online branch and three residential mortgage offices in the greater Puget Sound area. Seattle Bank is the Official Bank of the Seattle Seahawks and Seattle Sounders FC.

Seattle Bank Raises $50 Million in Private Equity

Fact Sheet

Investment

Amount and Type of Investment: $50 million private issuance of bank common stock

Lead Investor: J.D. Delafield – Delafield and Hambrecht, Inc. of Seattle, Washington

Other investors named in press release: Nick Hanauer, Rich Barton, Nick Eitel, John McCaw, Peter Kuttel

Total Risk Based Capital Ratio: Approximately 21% as of closing.

Governance and Leadership

Current Board of Directors: Patrick F. Patrick; J.D. Delafield; Robert E. Story, Jr., Robert Story, Sr., Mark Schuur, Larry Sisson, Lindsey Echelbarger.

Senior Leadership Team:

Patrick F. Patrick, president and chief executive officer (with Seattle Bank less than one year)

Brian Devereux, executive vice president and chief operating officer (with Seattle Bank two years)

John Grogan, executive vice president and chief credit officer (with Seattle Bank two and a half years)

Affiliated companies:

Seattle Bank is the parent company for Seattle Escrow Company and Seattle Mortgage Company, one of the state’s oldest independent mortgage banking firms.

Key Partnerships:

Exclusive banking partner of the Seattle Seahawks and Seattle Sounders FC.

About Seattle Bank:

History: Seattle Mortgage Company was founded in 1944 and it became of subsidiary of Seattle Savings Bank when it was chartered in 1999. Seattle Savings Bank changed its name to Seattle Bank in 2009.

Mission: Our mission is to be the “community bank of choice” with financial solutions that enable our customers to succeed and our communities to thrive.

Vision: Our goal is to be the premier community bank in the Puget Sound region, recognized as a successful and diversified financial services company. As an independent, local, entrepreneurial bank, we will deliver service excellence through knowledgeable, skilled professionals working collaboratively to achieve customer and community goals.

Target Markets:

Businesses in King, Pierce and Snohomish County with up to $50 million in annual revenues, with a niche focus on companies that are:

* Family-owned or closely held
* Manufacturers, wholesalers, distributors and retailers
* Professional service providers (doctors, lawyers, dentists, etc.)
* Nonprofit organizations and associations

Consumers in King, Pierce and Snohomish County

Locations:

Seattle Bank Banking Centers: Queen Anne, Wallingford, Bellevue, Tacoma, Southcenter

Seattle Mortgage Company Branches: Queen Anne, Kirkland, Tacoma

Seattle Bank Virtual Branch: www.seattlebank.com

Financial Profile: As of close of transaction Seattle Bank has total assets of $450 million, total deposits of $370 million and total gross loans of $335 million.

Products and Services: Seattle Bank offers a full suite of financial solutions specifically tailored for our personal and business clients in our community. In addition to a competitive home mortgage program we offer a full suite of business and personal loan and deposit products, free internet banking, free bill payment and a comprehensive suite of payment processing and treasury management services. Most services are available both through our physical branches and banking centers and on line at www.seattlebank.com.