Cowlitz Bancorp of Longview, Wash., says the investor who two months ago blocked its purchase of a troubled Oregon bank has come around.
The two companies have been working on a deal for nearly a year.
In a March vote, a Portland stockbroker who controls 33% of the shares of Northern Bank of Commerce there derailed Cowlitz's $5.2 million stock and cash deal for Northern, objecting that the price was inadquate. Oregon law requires two-thirds approval for such sales.
But last month the stockbroker, whose name neither company would disclose, agreed to an even lower offer, said Don Kiser, Cowlitz's chief financial officer. The stockbroker's position had been weakened by Northern's sagging performance, Mr. Kaiser said.
The boards of both companies approved the new deal April 25, he said. The price will be $3.3 million to $3.6 million, depending on adjustments made at the closing, he said.
The new deal is expected to sail through votes by both companies' shareholders and close in July, he said.
Cowlitz had $219 million of assets on March 31. Northern, which has not yet released first-quarter figures, had $54.9 million at yearend, 23% less than at midyear.
Last July the FDIC slapped Northern with a cease-and-desist order citing underperforming loans and inadequate capital. The bank was not forced to close, but instead satisfied regulators by firing its chief executive officer and increasing its capital reserves. The fired CEO, John Holloway, is still on Northern's board.
Mr. Holloway said negotiations with Cowlitz "continued without stopping" even after the March 9 rebuff. "This is a big relief," he said. "Everyone from my wife to our customers is pleased."
Buying Northern will give Cowlitz a first toehold in Portland. Mr. Kiser said Cowlitz would not make another acquisition in the next three years, in which it will focus on integrating Northern and some earlier acquisitions.
Cowlitz itself is facing challenges on the financial front. The company reported a net loss of $210,000 for the first three months of 2000, even though revenues increased to $4 million, from $2.9 million for the first quarter of 1999.
"We are still not hitting on all cylinders," Mr. Kiser said. "We are not satisfied with those results by any means."