Heritage Financial (HFWA) in Olympia, Wash., is buying a fellow lender in the Puget Sound region.
Heritage has agreed to pay $44.2 million for Valley Community Bancshares in Puyallup, Wash., the holding company for the $242 million-asset Valley Bank, the companies announced Tuesday.
Valley Community shareholders would receive $19.50 in cash and 1.3611 shares of Heritage stock in exchange for each of their shares, which prices Valley Community's stock at approximately $39 per share.
The deal is expected to close in the third quarter.
Valley Community Chief Executive David Brown plans to retire after the deal closes and has been nominated to serve on Heritage's board.
"Both of our franchises have well-established community bank cultures with excellent customer service, community involvement and strong credit disciplines," Heritage President and Chief Executive Brian Vance said in a news release. "We are excited about this acquisition because it is another step towards fulfilling our growth initiatives and leveraging our strong capital position."
The $1.3 billion-asset Heritage Financial has been growing rapidly through acquisitions for the last several years. In September, it agreed to buy Northwest Commercial Bank in Lakewood, Wash., for $3 million. In 2011, it bought two failed Washington banks: Cowitz Bank in Longview and Pierce Commercial Bank in Tacoma.
Keefe, Bruyette and Woods and Breyer & Associates advised Heritage, and McAdams Wright Ragen and Keller Rohrback advised Valley Community.