Umpqua Holdings (UMPQ) in Portland, Ore., has agreed to buy Financial Pacific Holding in Federal Way, Wash.
Umpqua will pay $158 million in cash for the commercial leasing firm, which is expected to have $279 million in assets and $57 million in tangible equity at the close of the deal. Umpqua, which has $11.5 billion in assets, said it expects to complete the transaction within 30 days.
Financial Pacific will take the Umpqua brand and will be managed by Cort O'Haver, Umpqua's executive vice president of commercial banking.
Financial Pacific is majority owned by Flexpoint Ford, a Chicago private equity company. It originates and services commercial equipment leases in various industries, with leases generally ranging from $5,000 to $75,000, according to its website.
Umpqua expects the deal to improve its earnings per share by 14% in the first full year after the transaction. The purchase should immediately improve the net interest margin by 35 basis points. Umpqua said it expects to earn back the dilution to tangible book value in four years.
"Combining FinPac's talented staff and national reach with Umpqua Bank's funding will provide valuable diversification and enhance Umpqua's profitability," O'Haver said in a press release Tuesday. "The platform is scalable, and is consistent with other key expansion initiatives we've completed over the last three years, including our business banking, agriculture lending and home builder lending groups."