WALLA WALLA - Speculation about a merger between Banner Corp. and Sterling Financial was fueled last week after an economic development official raised the issue in a crowded public meeting.
Bank executives have said the mention by Port of Walla Walla Executive Director Jim Kuntz in the Port's Economic Development Advisory Committee meeting was irresponsible, as was the reporting from the business newsletter where Kuntz first read the information.
Officials from neither Banner nor Sterling would comment on the actual possibility of a merger. "We've heard that before, and we have no comment on speculation. That's really all it is," said Sterling spokeswoman Cara Coon in a statement that was echoed later in the week from Banner.
But that hasn't stopped officials in the community from wondering what would happen if Walla Walla-based Banner and Sterling of Spokane became one company.
"If there's a grain of truth somewhere in this, what can and what should we do as a community and city and Port in order to keep them here?" wondered Walla Walla City Manager Nabiel Shawa on Friday.
Banner Corp. is the parent company of Banner Bank, which operates 89 branches and seven loan offices in 29 Washington, Oregon and Idaho counties and has $4.2 billion in assets. It is also the parent of Islanders Bank, which has about $239 million in assets.
Sterling Financial is the parent of Sterling Savings Bank, which has more than $10 billion in assets and operates 178 branches in Washington, Oregon, Idaho, Oregon, Montana and California.
For his part, Kuntz said job retention was the reason he briefly raised the issue toward the end of the roughly two-hour economic development meeting on Tuesday. Banner is a major employer with a storied history, a large footprint and a major contributor to the community.
Though some of the estimated 50-plus business people had already left the bimonthly meeting at the Walla Walla Regional Airport, Kuntz told those in attendance the two Eastern Washington banks had reportedly been in merger talks. He said he planned to meet with Banner's chief executive officer the next day to ask about the rumor.
Afterward, Kuntz said he had read the merger information about Banner in Marple's Northwest Business Letter. The newsletter is a subscription-based publication that aims to provide "advance notice on trends" that may affect businesses and for investor-subscribers who may spot opportunities among more than 250 publicly held Pacific Northwest companies, according to its website.
The particular piece Kuntz referenced was published in the Feb. 9 edition. The report explored the progress made by banks in 2010 as part of their economic recovery. It predicted the Northwest banking industry will see fewer FDIC-assisted closures and more consolidations through mergers and acquisitions.
The three-sentence piece about Banner and Sterling reported merger talks have been taking place, but that a location for the corporate headquarters has been a "sticking point."
Marple's Editor Jim Murez declined to say who provided the tip, but that it came from a trusted source in the banking industry. He said Banner and Sterling officials declined to address the speculation. He said he heard no feedback from either institution after the piece ran.
But Banner officials characterized the piece as irresponsible reporting last week. Banner Chief Executive Officer Lloyd Baker said Friday there was no basis for the article.
As much was conveyed to Port officials during the Wednesday meeting with Banner, said Port Commissioner Paul Schneidmiller.
He, Kuntz and Port Economic Development Director Paul Gerola attended the followup meeting with Banner CEO Mark Grescovich, who conveyed his disappointment over the speculation of a merger.
"They definitely took issue with the Marple's article," Schneidmiller said.
"I thought it was handled diplomatically on their part, but they certainly made us aware that it was not the proper forum."
Schneidmiller said he had not been aware the issue would be mentioned at the economic development meeting. "If a similar situation came up in the future, we would handle it differently," he said.