In its second major acquisition announcement this month, Glacier Bancorp of Kalispell, Mont., said Wednesday that it plans to buy the state's largest thrift company for $95 million in cash and stock.
Buying Westerfed Financial Corp. of Missoula would nearly double Glacier's assets, to $2 billion, creating one of the largest banking companies in the Northwest. The deal is to close in the first quarter.
And Glacier, a multibank holding company that has acquired eight banks in Montana and Idaho since 1992, says it has no intention of slowing down.
Last week it announced that it was buying seven divested branches in Utah and Idaho from Wells Fargo & Co. and First Security Corp.
"We think we pretty well covered the market area in Montana, and we want to move further west into Idaho and into eastern Washington," said James H. Strosahl, Glacier's executive vice president and chief financial officer. "And while we really haven't focused on Utah, now that we have a foot in the area we'll look at opportunities there as well."
Westerfed, with $946 million of assets, is the parent of Western Security Bank. Western Security would retain its name but would eventually be merged into one of Glacier's current subsidiaries. Ralph Holliday, Westerfed's president and chief executive officer, would hold those titles at Western Security.
"The new, larger Glacier franchise will provide our organization with the ability to provide more banking products and services to our customers, as well as accelerating our transition to a commercial lending organization," Mr. Holliday said in a press statement.
Glacier would wind up with a total of 50 branches and roughly $1.2 billion of deposits in Montana, pulling ahead of U.S. Bancorp in deposit share. Only First Interstate Bancsystem in Billings, Mont., and San Francisco-based Wells Fargo would have more Montana deposits.
Glacier would exchange 1.1 shares of its stock and $9.05 in cash for each share of Westerfed stock. At Glacier's closing price Wednesday of $12.88, that equals $23.21 per Westerfed share, or 1.33 times tangible book value.
Paul Miller, an analyst with Friedman, Billings, Ramsey & Co. in Arlington, Va., said the price is about right for a thrift in a slow-growing area. "Nobody is going to criticize Glacier for paying too much," he said.
Westerfed's stock soared on news of the deal. It closed at $19.875 Thursday, up 26%. Glacier's stock closed at $11.4375, down 11%.
John Reosti contributed to this article.
| Branch Deposit Market Share for Montana |
Deposit market share data as of June 30, 1999 ($ in thousands)
|Rank||Company Name||City||State||Inst. Type||Number of Branches||6/30/99 Total |
|6/30/99 State Market Share %|
|1||First Interstate Bancsystem||Billings||MT||HC||28||$1,315,168||12.72%|
|2||Wells Fargo & Company||San Francisco||CA||HC||41||$1,203,336||11.64%|
|4||WesterFed Financial Corp.||Missoula||MT||HC||28||$588,188||5.69%|
|5||Glacier Bancorp, Inc.||Kalispell||MT||HC||22||$545,551||5.28%|
| Source: BankSource - Sheshunoff Information Services |
Ownership as of September 20, 2000 and all Pending Transactions
Glacier Bancorp agreed to acquire WesterFed Financial on Sept. 20. Together it would have 10.97% market share in Montana (ranked 3d)