Alaska bank to buy Oregon lender for $167.3M

Dive Brief:

Anchorage, Alaska-based Northrim BanCorp has agreed to acquire Medford, Oregon-based PBCO Financial Corp. in an all-stock deal valued at $167.3 million, the companies said Wednesday.
With PBCO, the holding company of People’s Bank of Commerce, Northrim would gain about $776.6 million in assets, $570.1 million in loans and $610.1 million in deposits, as well as 11 branches in southern Oregon and the Willamette Valley.
The deal, which will mark the Alaska community bank’s first out-of-state branch expansion, is expected to close by the first quarter of 2027.

Dive Insight:

The combined company will have about $4.2 billion in assets, $3 billion in loans and $3.5 billion in deposits, and 32 branches in Alaska and Oregon. Northrim also operates a factoring and asset-based lending division in Washington called Northrim Funding Services.

People’s Bank of Commerce was founded in 1998. The lender’s branches will take on the Northrim name but continue to be managed by People’s Bank employees, the companies said.

Both banks “share a core value that community banking is built on strong relationships, local expertise, and commitment to our communities,” Northrim CEO Mike Huston said in Wednesday’s news release. “Together, we expect to be able to invest more in our people, technology, customer experience and community organizations, while preserving the personalized service and local decision-making that have defined our banks for decades.”

Under the deal’s terms, PBCO shareholders will receive 1.160 shares of Northrim stock for each share of PBCO common stock they own. The same applies for PBCO restricted stockholders. PBCO phantom stock units will be cashed out.

The merger is expected to qualify as a tax-free reorganization for PBCO shareholders, the banks said. The transaction is valued at $32.36 per share of PBCO common stock, based on Northrim’s Tuesday closing price of $27.90 per share.

PBCO shareholders will own about 21% of the combined company, and one director from PBCO will join the boards of the holding company and Northrim Bank.

“Partnering with Northrim gives us the opportunity to enhance the products, services and resources available to our customers while maintaining the personal relationships and local decision-making that define People’s Bank,” PBCO CEO Julia Beattie said in the release. “Together, we believe we will be better positioned to support the continued growth and success of our customers and communities we serve.”