VRB Bancorp dipped a toe into the burgeoning Portland, Ore., market last week with its agreement to buy $112 million-asset Colonial Banking Co.

VRB, the Rogue River, Ore.-based holding company for Valley of the Rogue Bank, said it would pay $17.5 million in cash for Grants Pass, Ore.-based Colonial. The $191 million-asset company, which has nine branches, was especially interested in Colonial's recently opened Portland loan production center.

"The loans coming out of Portland are diversified throughout the state," said Felice Belfiore, chief financial officer at VRB Bancorp. "This gives us a little more balance."

Rollie M. Hutton, president and chief executive officer at Colonial, said the company had considered three offers but accepted VRB's because it promised to keep Colonial's five branches open and retain all its employees. He said the deal works out to $43.36 per share, or about 2.5 times book value.

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