In an effort to expand its Northwest presence, First Interstate BancSystem has announced its intention to purchase Northwest Bancorporation Inc, which operates in Washington and Idaho as Inland Northwest Bank. Inland Northwest has three branches in Idaho, two in Coeur d’Alene and one in Spirit Lake.
“Since entering the Pacific Northwest, we have developed a great appreciation for these markets, and had a strong desire to increase our franchise in this region,” Kevin Riley, president and CEO of First Interstate, said on an investors’ call. Based in Spokane, Inland Northwest is a community bank with 20 offices across Washington, Idaho, and Oregon, while First Interstate is based in Billings, Montana. “It fills in our footprint in the Pacific Northwest,” he said, including enhancing its presence in Portland, and entering the high-growth markets of Spokane and Coeur d’Alene, particularly with the aerospace industry in Spokane, he said. The bank intends to continue operating all 20 of the existing offices, though not all the executives will make the move, Riley said.
The purchase is an all-stock transaction valued at approximately $160.9 million in aggregate, or $21.03 per share, the company said.
INB, a state-chartered community bank, currently has $826.8 million of assets, $669.0 million in loans, $721.0 million in deposits and $81.7 million in shareholders’ equity. After completion of the acquisition, First Interstate will have approximately $13.1 billion in total assets, $8.3 billion in total loans, $10.7 billion in total deposits, $1.5 billion in shareholders’ equity and 146 banking offices, the company said. First Interstate and Northwest expect to close the transaction late in the third or early in the fourth quarter of 2018, after satisfaction of customary closing conditions, including regulatory approvals and the approval of the Northwest shareholders, the company said.
First Interstate might not be done acquiring, either. “There’s a lot of banks for sale out there,” Riley said. However, it has no plans to move into California and in general plans to stay within the six Northwest states in which it already operates, he said.
Riley, who also presented quarterly results, noted that the company earned 0.65 cents per quarter, a 27 percent increase, even with merger and severance impacts of 5 cents per share. He credited this growth to the 2017 acquisition of Cascade Bancorp, which operated as Bank of the Cascades, as well as the change in tax rates.
First Interstate purchased Bank of the Cascades in November 2016 for $589 million. It operates about a dozen branches in Idaho.