TriCo Bancshares in Chico, Calif., paid a lower deposit premium for its purchase of Bank of America branches after deposit levels at those offices fell.

The $4.2 billion-asset TriCo said in a press release Tuesday that it closed its acquisition of three B of A branches, which included $161 million in deposits and $323,000 in loans. The amount of deposits fell 34% from the $245 million that were part of the deal when it was announced in October.

TriCo ended up paying a lower deposit premium because of the attrition, Tim O'Brien, an analyst at Sandler O'Neill, wrote in a note to clients after a conversation he had with the company's management. TriCo executives also told O'Brien that B of A was always expected to retain some clients and deposits even though it would no longer have branches in certain markets.

"TriCo has a good, long-term opportunity to recapture business that recently moved on," O'Brien added.

Washington Federal in Seattle had a similar issue with attrition in 2014 when it bought 23 Bank of America branches. Washington Federal negotiated a discount on its deal after deposit levels fell 11% between the announcement and closing of the deal.

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