Shareholders for both Cascade Bancorp, the holding company for Bank of the Cascades, and Home Federal Bancorp, Inc., the holding company for Home Federal Bank, will vote May 16 on whether to approve a $265.7 million merger plan.
The transaction, announced October 23, 2013, will be payable in a mix of $120.8 million in cash and 24,309,066 shares of Cascade common stock to Home Federal’s stockholders. Both figures are subject to adjustment based on closing capital and other adjustments described in the definitive merger agreement.
The deal immediately terminated a September 24, 2013 deal between Banner Corporation, the parent firm of Banner Bank and Islanders Bank, and Home Federal, due to the “superior proposal” from Cascade Bancorp. According to the original deal, Banner had the right to match Cascade’s offer and Home Federal paid a $3 million termination fee.
While the boards of directors for both banks unanimously approved the transaction, which is subject to regulatory approval and other conditions of closing, the shareholders of both banks will have the last word May 16.
“Having a thriving community bank, such as Bank of the Cascades, headquartered in Bend is a sign of the growth of Central Oregon,” explains Chip Reeves, executive vice president and chief banking officer for Bank of the Cascades.
The merger will allow Bank of the Cascades to have approximately $2.4 billion in assets as they serve communities across Oregon and Idaho. As the new, fourth largest community bank in the Pacific Northwest, Bank of the Cascade would have the number one market share in Central Oregon. In addition, the deal will double Bank of the Cascades’ market share in greater Boise/Treasure Valley area and expand their reach into the Eugene, Oregon market.
The resulting company is expected to have one of the nation’s strongest core deposit base, excellent credit quality and a strong earnings potential. In addition, the transaction is expected to bring about significant improvements in efficiency and profitability.
“For our customers, we believe the banks are culturally compatible and the combined institution will deliver an expanded product offering and stronger lending capacity,” illustrates Terry E. Zink, Cascade Bancorp president and CEO. “For shareholders, we believe the increased scale of the combined company will position our bank to grow organically while also providing additional strength to pursue future acquisition opportunities.”
Upon completion of the merger, Home Federal customers will be able to take advantage of local mortgage lending, expanded SBA loan opportunities, a variety of consumer and business credit card programs, and mobile banking that includes mobile deposit and bill pay.
Central Oregon Branches
Closer to home, Bank of the Cascades will keep the Bend/Century Drive Home Federal location open, while the Greenwood Avenue and Downtown Bend locations, as well as the Redmond branch, will close. Meanwhile, on the other side of the Cascade Mountains, the Eugene and Grants Pass branches will convert into Bank of the Cascades branches, including a north Grants Pass location reopening May 27.
Headquartered in Bend, Cascade Bancorp (NASDAQ: CACB), and its wholly owned subsidiary, Bank of the Cascades were founded in 1977 and have grown to offer 28 branches in Oregon and Idaho. According to their mission, they are, “dedicated to delivering the best in banking for the financial well-being of our customers and shareholders.”
Bank of the Cascades is rated among the top performing banks in the United States by the Independent Community Bankers of America and US Bankers Magazine.
“Whether it be in our philanthropy or small business lending, the addition to our size will enable us to contribute more to Central Oregon,” emphasizes Reeves.
The transaction is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.
Cascade was advised in this Transaction by Macquarie Capital, as financial advisor, and Hunton & Williams LLP, as legal counsel. Home Federal was advised by Keefe, Bruyette & Woods, as financial advisor, and Vorys, Sater, Seymour and Pease LLP, as legal counsel.
Bank of the Cascades
Branch locations throughout Oregon and Idaho, www.botc.com, 541-617-3500
Cascade Bancorp President & CEO: Terry E. Zink
Year established: 1977
Products and services: Offers a full line of banking products and services, ranging from personal banking to commercial lending.
Hot News: In the final stages of a $265.7 million merger deal with Home Federal Bank.
Outlook for Growth: Bank of the Cascades is poised to become the fourth largest community bank in the Pacific Northwest after the merger.