D.L. Evans Bancorp in Burley, Idaho, was the successful bidder for Idaho Banking in Boise following a bankruptcy auction.
The $1 billion-asset company announced Friday that it had entered into an asset purchase agreement to buy Idaho Banking from its bankrupt holding company, Idaho Bancorp. The deal for the $102 million-asset bank is pending approval by the U.S. Bankruptcy Court, D.L. Evans said. It is expected to close in the third quarter.
D.L. Evans did not disclose the price it would pay, but the Idaho Statesman reported that the company's final bid was roughly $10.1 million.
Banner Corp. (BANR) in Walla Walla, Wash., was the initial bidder for Idaho Banking, saying it April that it had placed a $2.6 million stalking horse bid on the bank. At the time, Lloyd Baker, chief financial officer of the $4.5 billion-asset Banner, said the company was expecting at least one other bidder to emerge. On Monday, Banner announced that it had terminated its agreement because of the higher bid.
The Statesmen also reported that Sunwest Bancorp had participated in the auction.
D.L Evans said Idaho Banking is its first acquisition. The company described the deal as financially attractive and a key strategic move as it grows in the Treasure Valley market, which includes Boise.
"The acquisition of Idaho Banking Company further enhances our footprint in Idaho's largest city and helps us continue to further solidify our position as the largest bank headquartered in Idaho," John Evans, chief executive of D.L. Evans, said in a press release.
The deal marks the second time that Banner has been publicly outbid in Idaho in the last year. Last year, its $197 million offer to buy Home Federal Bancorp in Nampa was bested by a $266 million offer from Cascade Bancorp (CACB). Analysts have said that Banner's management is willing to walk away if it views pricing as irrational.
"We have been and will continue to be a disciplined buyer in evaluating opportunities to expand our franchise," Mark Grescovich, Banner's president and chief executive, said in a press release. "Unfortunately, the bidding process for Idaho Banking resulted in a price that exceeded the economic benefit to Banner."
Banner will continue to search for transactions that are fairly valued and have upside potential for shareholders, Grescovich said, adding that the company remains committed to increasing its presence in southern Idaho.