Heritage Financial to Buy Northwest Commercial in Washington

Heritage Financial (HFWA) is buying Northwest Commercial Bank of Lakewood, Wash.

Heritage, which is based in Olympia, Wash., would pay $3 million in cash for Northwest, the companies said Friday. Northwest's shareholders can receive an additional $1.8 million based on an earn-out provision included in the deal, which is expected to close by the end of this year.

The $72 million-asset Northwest would also redeem roughly $2 million in preferred stock that that Treasury Department purchased in 2009 as part of the Troubled Asset Relief Program.

The deal would give the $1.3 billion-asset Heritage Financial, which has roughly 27 branches in Washington and Oregon, an additional branch in Lakewood and Auburn, Wash.