SEATTLE — Washington Federal, Inc. and Anchor Bancorp announced Thursday the signing of a merger agreement. The deal calls for the merger of Anchor with and into Washington Federal followed by the merger of Anchor’s wholly owned subsidiary, Anchor Bank, into the Company’s wholly owned subsidiary, Washington Federal, National Association.
Anchor Bank, once headquartered in Aberdeen, but now in Lacey, operates 10 full-service branches — half of those are located in Grays Harbor County — and had total assets of $441 million, total deposits of $328 million and total stockholders’ equity of $64 million as of December 31, 2016.
Locally, Anchor has branch locations in Aberdeen, Ocean Shores, Westport, Montesano and Elma.
It has not been determined if all Anchor Bank locations will remain open, said a Washington Federal spokesman Thursday afternoon.
“We don’t know at this point, as we’re trying to configure all that,” said Brad Goode, Washington Federal’s vice president of communications, marketing and community relations. “As we said when we met with all the Anchor Bank employees two days ago, the acquisition won’t be finalized until September or October. But we are thrilled to be in that portion of southwest Washington.”
The merger consideration consists of shares of Washington Federal common stock having a value of approximately $63.9 million. This purchase price represents 99.7 percent of Anchor’s tangible book value as of December 31, 2016. After closing, the combined company will have 248 offices in eight western states with total assets of approximately $15.3 billion and total deposits of approximately $11.0 billion, based on financial results as of December 31, 2016.
“This transaction will enhance Washington Federal’s presence in southwestern Washington,” said Brent J. Beardall, president and chief executive officer of Washington Federal. “By partnering with a bank that has a similar heritage and values. The merger will allow us to establish a commercial banking presence in downtown Tacoma. We look forward to working with Anchor’s professional and experienced bankers to increase our market position and extend them a warm and enthusiastic welcome. Once we complete the transaction, our focus will be on continued great service to every single Anchor and Washington Federal client.”
“We are proud to join forces with another Washington company that, like Anchor, is known for doing business with integrity and treating people fairly. Washington Federal also has a long history of solid financial performance,” said Jerald L. Shaw, Anchor president and chief executive officer. “By joining forces with them, we believe that a stronger financial partner for the communities served by Anchor will result and that shareholders will experience better returns and improved liquidity over the long run. Anchor employees will find in Washington Federal an institution of similar values and culture with enhanced career opportunities. Clients will benefit from the greater convenience of a larger branch network and greater lending capacity. We look forward to working with our new colleagues to offer the finest customer experience in the industry and improved return for our shareholders.”
Under the terms of the merger agreement, upon closing of the transaction, each outstanding share of Anchor common stock will be exchanged for shares of Washington Federal common stock. Each share of Anchor common stock was valued at $25.75. The exact number of shares to be issued and the exchange ratio will be determined based upon the average of the volume-weighted price of Washington Federal common stock for the 20 trading days ending on the fifth trading day immediately preceding the closing date, subject to a negotiated collar.
The merger is expected to close in the third quarter of 2017, pending regulatory approvals, the approval of Anchor’s shareholders and the satisfaction of other customary closing conditions.
Washington Federal, headquartered in Seattle, operates 237 branches in eight western states, had $14.9 billion in assets, $10.6 billion in deposits and $2.0 billion in stockholders’ equity.
