Heritage Financial in Olympia, Wash., has agreed to buy Puget Sound Bancorp in Bellevue, Wash.
The $4 billion-asset Heritage said in a press release late Wednesday that it will pay $126.1 million in stock for the $567 million-asset Puget Sound. The deal, which is expected to close in the first quarter, prices Puget Sound at 243.5% of its tangible book value.
Puget Sound is a business bank with one branch, $371 million in loans and $505 million in deposits.
“Puget Sound is a premier banking institution which has focused on serving the needs of small- and medium-sized businesses in the vibrant Seattle-Bellevue economy,” Brian Vance, Heritage’s president and CEO, said in the release.
Jim Mitchell, Puget Sound’s CEO, will stay with Heritage as a market president.
Heritage said it expects to cut about $4.8 million in costs, 35% of Puget Sound’s annual noninterest expenses. It expects to incur about $9 million in merger-related expenses.
D.A. Davidson, Breyer & Associates and Silver, Freedman, Taff & Tiernan advised Heritage. Sandler O'Neill and Keller Rohrback advised Puget Sound.