Washington banking company makes Portland buy

Heritage Financial Corporation, Olympia, Wash., announced it will acquire Premier Community Bank, Hillsboro, Ore., in an all-stock transaction. The deal is valued at approximately $88.6 million, or $15.12 per share based on the closing price of Heritage common stock of $31.10 on March 8.

Premier subsidiary, Premier Community Bank, opened in 1999, has six locations in the greater Portland area; it has $401 million in assets, $344 million in total loans, and $331 million in deposits.

Heritage Bank has 60 banking locations in Washington and Oregon. Heritage Bank does business under the Central Valley Bank name in the Yakima and Kittitas counties of Washington and under the Whidbey Island Bank name on Whidbey Island.

When the deal is final, Heritage will have more than $5 billion in assets.

“The partnership with Premier is an excellent way for us to expand our franchise in the Portland market,” said Brian Vance, president and CEO of Heritage Financial Corp.

“We have followed Premier’s success for several years and have been impressed with the strong community banking culture its team has built,” said Jeff Deuel, president and COO of Heritage Bank. “We believe this will provide us with the operational scale to take advantage of more growth opportunities going forward.”

Under terms of the merger agreement, Premier shareholders will receive 0.4863 shares of Heritage common stock for each share of Premier common stock. Upon consummation, shareholders of Premier will own approximately 7.7 percent of the combined company.

The definitive agreement has been unanimously approved by the boards of directors of both organizations. The merger is subject to regulatory approvals and approval by Premier’s shareholders. The deal is expected to close third quarter of 2018.

D.A. Davidson & Co., served as financial advisor to Heritage. Breyer & Associates PC and Silver, Freedman, Taff & Tiernan, LLP served as legal counsel to Heritage. Sandler O’Neill + Partners, L.P., served as financial advisor to Premier and Miller Nash Graham & Dunn LLP served as legal counsel to Premier.