Heritage Financial in Olympia, Wash., has agreed to buy Premier Commercial Bancorp in Hillsboro, Ore.

The $4.6 billion-asset Heritage said in a press release late Thursday that it will pay $88.6 million in stock for the $401 million-asset Premier. The deal, which is expected to close in the third quarter, prices Premier at 222% of its tangible book value.

The deal gives Heritage a lift in Portland, Ore., where it already has three branches and $64 million in loans. Once the acquisition closes, Heritage will have nine branches and $408 million in loans around Portland.

The acquisition "is an excellent way for us to expand our franchise in the Portland market,” Brian Vance, Heritage’s president and CEO, said in the release. “Heritage has significant momentum in Portland and Seattle, which are two of the most attractive banking markets in the Pacific Northwest."

Heritage expects the deal to be immediately accretive to its 2018 earnings per share and 3.3% accretive the following year. It should take less than two years to earn back the deal’s expected 0.9% dilution to Heritage’s tangible book value.

Heritage plans to cut about 30% of Premier’s annual noninterest expense, or roughly $3.9 million. The company expects to incur about $8.3 million in merger-related expenses tied to the acquisition.

D.A. Davidson; Breyer & Associates; and Silver, Freedman, Taff & Tiernan advised Heritage. Sandler O'Neill and Miller Nash Graham & Dunn advised Premier.

Portland, Ore.
Portland, Ore.

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