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Heritage Financial Acquires Valley Community Bancshares
March 13 - Heritage Financial Corp., the parent company of Heritage Bank, has announced the signing of a definitive agreement to acquire Valley Community Bancshares Inc., the holding company for Valley Bank of Puyallup, Wash. The combined company will have approximately $1.6 billion in assets with enhanced market share in the Puget Sound region.
"Both of our franchises have well-established community bank cultures with excellent customer service, community involvement and strong credit disciplines," said Brian Vance, president and CEO of Heritage Financial Corp. We are excited about this acquisition because it is another step toward fulfilling our growth initiatives and leveraging our strong capital position. Valley Bank has created a great franchise that is well-respected in the community. We believe that the combination of our two franchises provides good synergies and that we will be able to provide the Valley Bank customers with additional products, increased lending limits and a much broader Western Washington branch delivery network. We look forward to growing together, continuing to support our customer's needs and meeting our combined shareholders' expectations."
David Brown, president and CEO of Valley Bank, said, "This merger is a combination of two high quality organizations with similar philosophies, cultures and core values. We feel the transaction will provide outstanding benefits to our customers, shareholders and the communities that we support."
The board of directors of Heritage Financial Corp. and Valley Community Bancshares Inc. unanimously approved the transaction, which is subject to approval by Valley's shareholders, as well as regulatory approvals and other customary closing conditions. On closing of the transaction, which is anticipated to take place in the third quarter of 2013, Valley Bank will be merged into Heritage Bank.
The purchase price will be paid 50 percent in cash and 50 percent in Heritage common stock. As a result, Valley's shareholders will be entitled to receive approximately $19.50 in cash and 1.3611 shares of Heritage's common stock per share. Using a 30-day average price per share of Heritage stock for a period ending March 1, 2013, results in a Heritage stock price of $14.327, which when multiplied by the fixed exchange ratio of 1.3611 provides an initial valuation of $39 per share or approximately $44.2 million. The total purchase price is subject to adjustments and closing conditions, including potential adjustments if the volume weighted average trading price of Heritage common shares rises or falls beyond certain levels prior to closing.
David Brown, CEO of Valley, has been nominated by the Valley board to serve on Heritage's board. Brown will also assist with the transition process and plans to retire from active employment after a successful integration.
Heritage Financial Corp. was advised in the transaction by Keefe, Bruyette and Woods as financial adviser and Breyer & Associate PC as legal counsel. Valley was advised by McAdams Wright Ragen Inc. as financial adviser and Keller Rohrback LLP as legal counsel.
About Heritage Financial Corp.
Heritage Financial Corp. is an Olympia, Wash.-based bank holding company with approximately $1.35 billion in assets at Dec. 31, 2012, whose wholly owned banking subsidiaries are Heritage Bank and Central Valley Bank. Heritage Bank operates a full-service commercial bank primarily along the I-5 corridor with 28 banking offices in western Washington and the greater Portland, Ore., area. Central Valley Bank, headquartered in Yakima, Wash., operates six branches in the Yakima Valley. Central Valley Bank specializes in agricultural lending and works with many of the businesses in that region. More information about Heritage Financial Corp. can be found on its website at www.hf-wa.com and more information about Heritage Bank can be found on its website at www.heritagebanknw.com.
About Valley Community Bancshares Inc.
Valley Community Bancshares Inc. is a Puyallup, Wash.-based bank holding company with approximately $242 million in assets at Dec. 31, 2012, with a wholly owned banking subsidiary, Valley Bank, which was established in 1972. Valley Bank primarily serves individuals, professionals and small business clients throughout Pierce and South King Counties with its nine banking offices.