Banner Corp. in Walla Walla, Wash., has agreed to buy AltaPacific Bancorp in Santa Rosa, Calif.
The $11.8 billion-asset Banner said in a press release Wednesday that it will pay $87.4 million in stock for the $436 million-asset AltaPacific. The deal, which is expected to close in the fourth quarter, priced AltaPacific at 168% of its tangible book value.
AltaPacific “is a respected business-focused bank and we consider it a compliment they chose us as their merger partner,” Mark Grescovich, Banner’s president and CEO, said in the release. “This is an excellent addition … because it provides scale to our California franchise with attractive core deposits, commercial banking relationships and a similar credit culture.”
AltaPacific has six branches, including five in Southern California. It has $339 million in loans and $307 million in deposits.
When the deal closes, Banner will have more than $1 billion in assets in Southern California.
Banner said it expects the transaction to be immediately accretive to its earnings per share, excluding merger-related expenses. It should take less than three years for Banner to earn back any dilution to its tangible book value.
Banner plans to cut about 45% of AltaPacific’s annual noninterest expenses, including three branch closures. The company expects to incur roughly $9.4 million in merger-related expenses.
Banner was advised by Stephens and Davis, Wright Tremaine. AltaPacific was advised by Panoramic Capital Advisors; Vining Sparks Community Bank Advisory Group; and King, Holmes, Paterno & Soriano.
