(By Balaseshan) Heritage Financial Corp. (NASDAQ:HFWA), the parent company of Heritage Bank, said it has agreed to buy Northwest Commercial Bank of Lakewood, Washington for cash consideration of $3.0 million or $5.50 per share.
The Northwest Commercial Bank (NCB) shareholders can potentially receive additional consideration based on an earn-out structure, which could provide an additional $1.8 million or $3.34 per NCB share.
NCB will redeem, ahead of closing, outstanding TARP preferred stock of about $2.0 million from the U.S. Treasury. The addition of NCB will provide Heritage Bank an expanded presence in Lakewood in Pierce County and a new Auburn branch in King County.
NCB, which was founded in 2002, offers banking services to individuals, professionals and small business clients throughout the Tacoma and south King County areas. As of June 30, 2012, NCB had about $72.1 million in total assets, $51.9 million in net loans, $63.2 million in deposits and $8.4 million in equity.
The boards of HFWA, Heritage Bank and NCB unanimously approved the transaction, which is subject to approval by NCB's shareholders, as well as regulatory approvals. Upon closing of the transaction, which is expected to take place in the fourth quarter of 2012, NCB will be merged into Heritage Bank.
Heritage Financial was advised in the transaction by D.A. Davidson & Co. as financial advisor and Breyer & Associate PC as legal counsel. NCB was advised by McAdams Wright Ragen Inc. as financial advisor and Graham & Dunn PC as legal counsel.
HFWA is trading down 0.97% at $14.24 on Friday. The stock has been trading between $10.20 and $15.57 for the past 52 weeks.