Oct 22 - Northrim BanCorp Inc., Anchorage, Alaska, (Nasdaq: NRIM) and Alaska Pacific Bancshares Inc., Juneau, Alaska, (OTCQB: AKPB) have jointly announced the signing of a definitive agreement for Northrim BanCorp to acquire Alaska Pacific in a stock and cash transaction currently valued at approximately $14.31 million or approximately $17.28 per share of Alaska Pacific common stock. The transaction value is expected to change based on fluctuations in the price of Northrim BanCorp's common stock. In connection with the transaction, Alaska Pacific will merge into a wholly owned subsidiary of Northrim BanCorp, and Alaska Pacific Bank will merge with and into Northrim Bank. The current value of the transaction represents approximately 87 percent of Alaska Pacific's adjusted book value per common share based on full exercise of warrants and options.
The board directors of both companies unanimously approved the transaction, which is subject to approval by Alaska Pacific's shareholders and applicable bank regulators, as well as other customary closing conditions. At June 30, 2013, Northrim BanCorp had approximately $1.16 billion in assets and 10 offices in the greater Anchorage and Fairbanks markets. At June 30, 2013, Alaska Pacific had approximately $177 million in assets, $148 million in net loans, $154 million in deposits and $20.8 million in equity capital, including $4.7 million in preferred equity issued to the U. S. Treasury in 2009 that is currently held by private investors. Alaska Pacific will redeem its outstanding preferred stock in full prior to the closing of the transaction.
"We expect the transaction to close in the first quarter of 2014, and for it to be accretive to our earnings in 2015," said Marc Langland, chairman, president and CEO of Northrim BanCorp. "With a solid mix of core deposits and a loyal customer base, the Alaska Pacific franchise will expand our statewide network from our Interior and Southcentral base into Southeast Alaska. With two branch offices in Juneau, two branches in Ketchikan and one in Sitka, the Alaska Pacific branches do not overlap any of our existing office locations."
"We believe that we can efficiently merge our operations, and customers of both banks will enjoy the benefits of our business combination," said Joe Beedle, Northrim Bank's president and CEO. "Having grown up in Southeast Alaska, I am looking forward to renewing old friendships and making new alliances in the area. I believe the opportunities in Southeast Alaska are attractive and will contribute nicely to our franchise."
"We believe joining with Northrim BanCorp, one of Alaska's premier companies, will bring solid benefits to our customers, employees and shareholders," said Craig E. Dahl, president and CEO of Alaska Pacific. "Joe Beedle and I have had the pleasure of working together in the past, and his knowledge of our local business communities is extensive. I am confident that our customers and employees will find Northrim to be a good partner and that the transition will be a seamless one. Our customers will continue to receive outstanding service and the benefit of new products, new services and higher lending limits, and our employees will have continued opportunities for growth and advancement."
The terms of the transaction call for Northrim BanCorp to pay approximately $6.4 million in cash and based on the 15-day weighted average closing price as of Oct. 18, 2013, of $23.67 per share of Northrim BanCorp common stock, approximately 304,631 shares of Northrim BanCorp common stock, which would result in less than 1 percent dilution in Northrim BanCorp's tangible book value per share at June 30, 2013. "We currently expect to earn back any dilution to our tangible book value in less than one year," added Langland.
The actual number of shares of Northrim BanCorp common stock expected to be issued to Alaska Pacific shareholders is based on an exchange ratio that depends on the value of Northrim BanCorp common stock as measured by the 15-day volume weighted average for the period ending five days prior to closing the transaction. In the event that the weighted average price of Northrim BanCorp common stock is less than $18.90, the transaction is subject to an adjustment of the ratio of common stock and cash consideration or termination.
Alaska Pacific common shareholders may elect to receive cash or shares of Northrim BanCorp common stock, subject to certain proration procedures that are described in detail in the merger agreement.
Alaska Pacific's directors and executive officers, owning the aggregate of approximately 12.36 percent of Alaska Pacific's outstanding shares as of Oct. 21, 2013, have signed voting support agreements pursuant to which they have agreed to vote their shares in favor of the proposed transaction.
Northrim BanCorp's legal counsel for the transaction was Davis Wright Tremaine LLP and its consultant is Jean-Luc Servat. Keefe Bruyette & Woods Inc. acted as financial adviser for Alaska Pacific, while Breyer & Associates PC served as its legal counsel.
About Northrim BanCorp
Northrim BanCorp Inc. is the parent company of Northrim Bank, an Alaska-based community bank with 10 branches in Anchorage, the Matanuska Valley, and Fairbanks serving 70 percent of Alaska's population; and an asset based lending division in Washington. The bank differentiates itself with its detailed knowledge of Alaska's economy and its "Customer First Service" philosophy. Affiliated companies include Elliott Cove Insurance Agency, LLC; Elliott Cove Capital Management LLC; Residential Mortgage, LLC; Northrim Benefits Group LLC; and Pacific Wealth Advisors LLC.
About Alaska Pacific Bancshares
Alaska Pacific Bancshares, Inc. is the parent company of Alaska Pacific Bank, a federally chartered savings bank headquartered in Juneau, Alaska. Alaska Pacific offers a full range of banking services to individuals and businesses through five offices in Juneau (two), Ketchikan (two) and Sitka (one), Alaska. The bank offers a wide range of business loans and is a leading SBA lender; is active in many types of consumer lending, including home equity loans, boat and vehicle loans; and is a regional leader in land development and construction loans.