Bank of the Cascades to buy Home Federal for $266 million
Cascade Bancorp (Bank of the Cascades) CEO Terry Zink
Cascade Bancorp[5] late Wednesday announced a $266 million deal for Home Federal Bancorp, a deal that trumped a $197 million offer[6] Banner Corp.[7] made for Home Federal last month.
Bend-based Cascade Bancorp is the parent of Bank of the Cascades, the third-largest bank based in Oregon.
Cascade Bancorp CEO Terry Zink[8] decided to make an offer for Home Federal the moment the Banner Corp. deal was announced.
The deal contained a "go shop" provision that gave Nampa, Idaho-based Home Federal 30 days to find a better deal. Such provisions are meant to ensure companies get the best price.
"When I saw the deal announced with Banner I felt pretty strongly we should at least enter an offer," said Zink, who has long considered Home Federal an acquisition target.
Thirty days isn't a lot of time to thoroughly examine a bank's loan portfolio. Zink said Cascade Bancorp hired an outside firm to help it with due diligence.
"It is a shorter time than I would like," Zink said. "But we're very comfortable with the portfolio."
The final deal values Home Federal at $265.7 million, or $17.83 per diluted share, nearly a 40 percent premium to the stock's closing price on Wednesday (NASDAQ: HOME).
The deal includes $120.8 million in cash and the rest in stock.
After the merger Cascade Bancorp will have $2.4 billion in assets. It would also double its market share in the high-growth Boise area and add to its market share in Eugene.
Like any bank merger, it also provides an opportunity to cut duplicate overhead costs and increase the bottom line.
In a news release, Cascade Bancorp said it also "provides the opportunity to right-size the branch distribution networks and infrastructure of the combined bank."
Matthew Kish covers banking, finance, footwear/apparel and higher education.
References
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- ^ Cascade Bancorp (www.bizjournals.com)
- ^ $197 million offer (www.bizjournals.com)
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