D.L. Evans buying Idaho Banking Co. for $10 million

D.L. Evans Bank will acquire Idaho Banking Co. in bankruptcy proceedings, with a sale price close to quadruple an original offer made by Banner Bank. The $10 million acquisition makes D.L. Evans Bank the seventh-largest bank in the Treasure Valley market.

D.L. Evans won out over Banner and Sunwest Bank in a bankruptcy auction for Idaho Banking Co., said D.L. Evans President and CEO John V. Evans Jr.  In April, Idaho Banking Co. announced that its holding company, Idaho Bancorp, would file for bankruptcy and that Banner Bank would acquire the bank for $2.6 million.

The banks traded bids, increasing in $100,000 increments, on June 27. Evans said Sunwest was the first to exit the bidding, dropping out at less than $5 million. Sunwest CEO Chris Walsh said the bank was part of bidding, but wouldn’t comment on the amount Sunwest offered. Evans said D.L. Evans’ $10 million bid was just below the maximum the bank was willing to bid for Idaho Banking Co., which was $10.125 million.

“All they had to do was bid one more time and it would’ve been theirs,” Evans said.

Executives with Banner didn’t return requests for comment, but the bank said in a news release that the price for Idaho Banking Co. exceeded the economic benefit to Banner.

“While we are disappointed with the outcome of the bidding process and the termination of the transaction, we remain enthusiastic about the opportunities in the Boise market and committed to increasing our presence in Southern Idaho,” Mark Grescovich, Banner president and CEO, said in the release. “We have been and will continue to be a disciplined buyer in evaluating opportunities to expand our franchise.”

This is the third unsuccessful Idaho acquisition in less than a year for the Walla Walla-based bank. Last year, Banner announced a planned acquisition of Home Federal Bank, but a month later, Home Federal announced Bank of the Cascades had a higher offer. Banner also bid on the failed Syringa Bank, which was acquired by Sunwest. Sunwest Bank entered Idaho earlier this year.

Walsh said that Idaho Banking Co. would have increased Sunwest’s presence in Idaho. He said the bank is still seeking to grow in Idaho, organically and perhaps through other acquisitions.

“If the right opportunity comes up, we have no problem looking at another bank in that marketplace,” Walsh said.

Idaho Department of Finance Director Gavin Gee said the bidding war and the D.L. Evans acquisition were positive developments for D.L. Evans and the banking sector in Idaho.

“This is the last bank that still owed TARP and was under formal regulatory orders from the department and federal regulatory agencies. This will resolve the last of those issues,” Gee said.

Idaho Banking Co. was the last Idaho bank that owed money under the Troubled Asset Relief Program, with its holding company, Idaho Bancorp, owing $6.9 million to the U.S. Treasury. The banks’ assets had dropped each of the past five years, falling from $246 million in 2008 to $99 million in 2013.

The higher bid by D.L Evans bank will help repay the TARP loan as well as other trust-preferred securities holders.

All four of Idaho Banking Co.’s branches are in Ada County. Evans said all the branches will remain open.

“We see the whole Treasure Valley being a strong growth area, particularly Ada County,” he said.

Evans said the bank hopes to keep on most employees of the acquired bank, though no staffing decisions have been made yet. He praised the work and loyalty of the employees and CEO James Latta during the past few years.

“A lot of times when you have turmoil like this over a lot of years, you lose employees,” Evans said.

The four new branches represent most of D.L. Evans’ expansion plan this year. Evans said the bank is building a branch in Ammon now and has plans for another branch in Caldwell. The bank, based in Burley, has close to $1 billion in assets, according to its most recent filing with the Federal Deposit Insurance Corp. Based on data from June 2013, the bank will have approximately 3.5 percent of bank deposits in the Treasure Valley after the acquisition, and just over 4 percent of statewide bank deposits.

Updated 7/1 with comments from Mark Grescovich.