The parent company to Heritage Bank of Olympia is set to merge with the parent company of Whidbey Island Bank of Oak Harbor, making it the sixth acquisition or merger for Heritage Financial Corp. since 2010.
The $265.1 million deal between Heritage Financial and Washington Banking Co., which was announced Wednesday, is expected to close during the first half of 2014.
Heritage Financial President and Chief Executive Brian Vance emphasized Wednesday that the announcement was very much a merger between equals, similar in size, culture and how each does business, he said.
“You couldn’t find more similarly matched companies than these two,” Vance said.
“The contiguous branch footprints along the I-5 corridor and complementary business models make this combination a natural fit,” Washington Banking Co. President and Chief Executive Jack Wagner added in a statement.
Also key to the deal, Vance said, is that earnings per share growth rates that the two companies couldn’t grow independently should significantly increase as a result of the merger.
Heritage’s stock, which trades under the ticker symbol HFWA, closed up four cents Wednesday to $15.89 a share. Washington Banking Co.’s stock, which trades under the ticker symbol WBCO, closed down three cents to $14.25 a share.
Other details of the planned merger:
-The combined company will have $3.3 billion assets, more than 800 employees and 73 bank branches, stretching from Portland, Ore., to Bellingham.
-Washington Banking shareholders will receive 0.89000 shares of Heritage common stock and $2.75 in cash for each share of Washington Banking common stock, according to a news release.
-Heritage shareholders will own about 54 percent of the combined company and Washington Banking shareholders will own about 46 percent.
-Washington Banking branches also will adopt the Heritage Bank name, except for six branches in the Whidbey Island area which will continue to use the Whidbey Island Bank name.
-Heritage Financial President and Chief Executive Brian Vance will serve as chief executive of the combined company, which will be headquartered in Olympia, while Washington Banking chief executive Wagner will serve as special adviser to the company.
-Executives from both banking companies will serve on a leadership team, and Heritage will have eight directors on the board to Washington Banking's seven.
Heritage also announced third-quarter earnings Wednesday, earning net income of $3.3 million, or 20 cents a share, compared to net income of $2.9 million, or 19 cents a share in the third quarter of 2012.
Since 2010, Heritage has acquired Cowlitz Bank in Longview, Pierce Commercial Bank in Tacoma, Northwest Commercial Bank in Lakewood and Valley Community Bancshares in Puyallup, the bank-holding company to Valley Bank. Heritage also merged with its Yakima-area subsidiary Central Valley Bank in June.
Rolf Boone email@example.com 360-754-5403