Cascade Bancorp (CACB) in Bend, Ore., has outbid another company to snag Home Federal (HOME) in Nampa, Idaho.
The $1 billion-asset Home Federal had agreed last month to sell to Banner Corp. (BANR) in Walla Walla, Wash., for $197 million in cash and stock. On Wednesday, Home Federal said it would instead sell to Cascade for $266 million. Banner, which had the right to match the offer, declined to do so.
Roughly 45% of the consideration from the $1.4 billion-asset Cascade will involve cash. Cascade said it expects the transaction, which should close in the first quarter, to be immediately accretive to its earnings per share, excluding transaction costs.
"We are truly pleased to join forces with Home Federal and to provide an opportunity of unique and compelling value to both organizations," Terry Zink, Cascade's president and chief executive, said in a press release. "The combination will result in a strong balance sheet and capital base, attractive margins and good earnings potential."
"We are very excited about the transaction," Len Williams, Home Federal's president and chief executive, said. The companies "have similar cultures, complementary geographies, and service strengths that make this transaction a natural fit. Cascade shares our commitment to customers and community, and this transaction is a terrific result for our shareholders."
Cascade said it will look to cut about 24% of total noninterest expenses.
Cascade was advised by Macquarie Capital and Hunton & Williams. Home Federal was advised by Keefe, Bruyette & Woods and Vorys, Sater, Seymour and Pease.
Home Federal agreed to pay the $4.3 billion-asset Banner a $3 million termination fee.
"We spent a significant amount of time analyzing and structuring the transaction with Home and believe that it would have mutually benefited both organizations," Mark Grescovich, Banner's president and CEO, said in a separate press release. "While it is unfortunate that the transaction has been terminated, we will maintain our discipline in evaluating future opportunities. Banner will continue to proactively seek acquisition opportunities in our markets, including Boise."