SMOKEY POINT — One local bank branch changed hands over the Memorial Day weekend, while another bank with two branches in the area is on its way toward a merger, but representatives of both banks want their customers to remain assured that their service will remain the same.

Columbia State Bank assumed all the deposits of First Heritage Bank, whose Arlington branch reopened on May 31 as a branch of Columbia State Bank. Also on May 31, the shareholders of Cascade Financial approved the merger of Cascade Bank, which has branches in Marysville and Smokey Point, with Opus Bank.

The Washington Department of Financial Institutions closed First Heritage Bank, noting that its capital has been depleted by large loan losses associated with land development and construction lending. According to Gloria McVey, acting director of DFI’s Division of Banks, the bank’s management was unable to raise sufficient capital to remain viable.

“The closure of a Washington state chartered bank is never a welcome event,” DFI Director Scott Jarvis said. “However, a very positive signal is sent when Columbia, a financially strong state-chartered bank with an excellent reputation, steps up to acquire a failing institution and continues service to the affected communities.”

Adela Coronado, the ombudsman specialist for Columbia State Bank in Snohomish, reported that it’s been “business as usual” at the former First Heritage Bank branches.

“It’s been a steady flow of traffic, about the same as before,” Coronado said.

Coronado explained that former depositors of First Heritage Bank have automatically become depositors of Columbia State Bank, and because their deposits will continue to be insured by the Federal Deposit Insurance Corporation, customers don’t need to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits.  Customers of First Heritage Bank in Arlington are advised to use that branch until they receive notice from Columbia State Bank that it has completed systems changes to allow other Columbia State Bank branches to process their accounts as well.

“No one has lost their money on deposits because of this closure,” Coronado said. “They can still access the same services, with their existing ATM and debit cards. Although we’ll gradually be issuing new checks, they can continue to use their existing checks. Their electronic and direct deposits have not changed.”

Carol Nelson, president and CEO of Cascade Bank, echoed all these same assurances to her own customers, even as she emphasized that the nature of her bank’s transition is very different. She’ll retain her current job titles once Cascade Bank becomes Opus Bank, but she noted that the merger will probably not be complete until July of this year. In the meantime, she promised her customers that they could look forward to seeing the same staff at their local branches in Marysville and Smokey Point.

“After our merger, we’re looking forward to opportunities to expand into new branches,” Nelson said. “A merger is very different from a bank defaulting. We’ve gained additional capital through this move, which means more money to lend. We also hope to reinvest in our local communities through our giving foundation.”