Washington Federal Pays Less for B of A Branches on Deposit Decline

Washington Federal (WAFD) in Seattle negotiated a discount on its recent purchase of Bank of America (BAC) branches after deposits levels at those locations fell.

The $14.4 billion-asset company disclosed in a regulatory filing that the deposit premium for the 23 branches fell to 0.5% of deposits from 1.3%. The premium fell because deposits at the Arizona and Nevada branches were 11% lower than the $610 million Washington Federal planned to obtain when it announced the deal in January. The deal closed May 2.

Washington Federal said it gained 98,000 deposit accounts, $5 million in loans, $11 million in branch properties and $523 million in cash from the acquisition.

This is Washington Federal's second branch deal with Bank of America. The earlier deal, which involved 51 branches, also suffered from branch attrition. In that transaction, the branches lost $500 million in deposits between the July 2013 announcement and completion in the fourth quarter. Washington Federal still ended up with roughly $1.3 billion in deposits.