Heritage Financial buys another South Sound rival
Heritage, parent of Olympia-based Heritage Bank and Yakima’s Central Valley Bank, is buying Valley Community Bancshares of Puyallup.
Seattle Times business reporter
Barely two months after absorbing Lakewood’s Northwest Commercial Bank, Heritage Financial is buying out another smaller South Sound rival.
Heritage, parent of Olympia-based Heritage Bank and Yakima’s Central Valley Bank, said Tuesday it was buying Valley Community Bancshares of Puyallup, in a cash and stock deal valued at $44.2 million, or $39 per Valley share.
The deal, which needs approval by regulators and Valley shareholders, would add $242.2 million in assets to Heritage Financial’s $1.4 billion, and nine branches (seven in Pierce County, two in King) to the company’s current 34.
Heritage CEO Brian Vance called it “another step towards fulfilling our growth initiatives and leveraging our strong capital position.”
“Both of our franchises have well-established community-bank cultures with excellent customer service, community involvement and strong credit disciplines,” Vance said in a statement announcing the deal. “We look forward to growing together, continuing to support our customers’ needs and meeting our combined shareholders’ expectations.”
Valley CEO David Brown will join the Heritage Financial board after the deal closes, but otherwise won’t have any operational role in the combined company.
The deal includes a $1.76 million breakup fee if Valley pulls out or finds another buyer, and allows Heritage to walk away or add more cash if its share price falls below $11.46.
This will be Heritage Financial’s fourth deal in the past three years. In 2010 it acquired Cowlitz Bank of Longview and Pierce Commercial Bank of Tacoma after they were closed by regulators.
Though Heritage Financial’s footprint extends from Seattle to the south suburbs of Portland, and east to the Yakima area with six Central Valley Bank branches, its core market is in Pierce, Thurston and South King counties.
Tuesday’s deal with Valley Bank would make the combined institution Pierce County’s fifth-biggest bank in terms of deposits, though it would still be one third the size of that county’s dominant bank, Columbia Bank.
Investors appeared to give the deal a thumbs-up: Heritage Financial shares closed up 44 cents, or 3.2 percent, at $14.28 in Nasdaq trading.
Drew DeSilver: 206-464-3145 or email@example.com