Puget Sound Bank will buy Bellevue’s Core Business Bank for $8,425,000 with a combination of 20 percent cash and 80 percent Puget Sound Bank common stock.

The value represents 132 percent of Core’s Dec. 31, 2012 net book value.

The deal is expected to close in the second quarter of 2013 and is subject to the customary requirements that include regulatory approval as well as shareholder approval.

Upon completion of the transaction, the combined company will have over $330 million in assets.

The banks have two of the highest quality loan portfolios in the State. Puget Sound Bank has non-performing loans of 0.75 percent of its total loans and Core Business Bank has zero non-performing loans. The combined net worth of the two companies will be approximately $44 million with a total risk based capital ratio of 15 percent, well over the minimum of 10 percent, which the FDIC considers to be a well-capitalized bank. The level of net worth gives the combined company a legal lending limit, to any single entity, of approximately $9 million. The combined company will be the 29th largest bank headquartered in Washington based on deposits. There are currently 71 banks and thrifts headquartered in the State.

“[The year] 2012 was an incredible year for Puget Sound Bank, with almost $2 million in net income, 53 percent over the previous year,” said Jim Mitchell, President and Chief Executive Officer. “This has allowed us to grow loans and deposits at the highest levels in the state since we began operations in 2005.”

“This is a great fit for both of our institutions,” said Core Business Bank founder and Chief Executive Officer, Dave Huguenin. “We have a similar culture.”

On December 31, 2012, Core Business Bank had $64 million in total assets, $57 million in deposits, net income for the year of $122,000 and zero non-performing loans.

Jim Schuler, Core Business Bank board member, will join the Puget Sound Bank board of directors.Both banks are headquartered in Bellevue.