Northrim acquires Alaska Pacific for $14.3M
Alaska Pacific Bank is merging with Northrim Bank in a $14.31 million stock and cash transaction, pending shareholder and regulatory approval.
If approved, Northrim BanCorp would acquire Alaska Pacific Bancshares, the Southeast Alaska bank’s parent company, as a wholly-owned subsidiary.
Both companies’ boards of directors have unanimously approved the transaction, but it is still subject to approval by bank regulators and Alaska Pacific shareholders.
Northrim is based primarily in Southcentral and Interior Alaska, and the acquisition would expand its reach to Southeast Alaska, where Alaska Pacific operates.
Under the terms of the transaction, Northrim BanCorp will pay about $6.4 million in cash and approximately 304,631 shares of Northrim BanCorp common stock.
That number of shares is based on a 15-day weighted average closing price as of Oct. 18, but the true number will be figured for the 15-average for a period that ends five days prior to the transaction closing.
The Oct. 18 average was $23.67; if the average falls below $18.90, the transaction is subject to an adjustment or termination.
Alaska Pacific’s directors and executive officers own a combined 12.36 percent of Alaska Pacific’s shares as of Oct. 21, and have signed voting support agreements agreeing to vote their shares in favor of the transaction.
“We believe joining with Northrim BanCorp, one of Alaska’s premier companies, will bring solid benefits to our customers, employees and shareholders,” Alaska Pacific President and CEO Craig Dahl said in the announcement. “Joe Beedle and I have had the pleasure of working together in the past, and his knowledge of our local business communities is extensive.
“I am confident that our customers and employees will find Northrim to be a good partner and that the transition will be a seamless one. Our customers will continue to receive outstanding service and the benefit of new products, new services and higher lending limits, and our employees will have continued opportunities for growth and advancement.”
According to the announcement, Alaska Pacific common shareholders may elect to receive cash or shares of Northrim BanCorp common stock.
The transaction is worth about $17.28 per share of Alaska Pacific common stock.
In the announcement, Northrim executives supported the acquisition.
“We expect the transaction to close in the first quarter of 2014, and for it to be accretive to our earnings in 2015,” said Northrim BanCorp Chairman, President and CEO Marc Langland. “With a solid mix of core deposits and a loyal customer base, the Alaska Pacific franchise will expand our statewide network from our Interior and Southcentral base into Southeast Alaska. With two branch offices in Juneau, two branches in Ketchikan, and one in Sitka, the Alaska Pacific branches do not overlap any of our existing office locations.”
Northrim Bank’s President and CEO Joe Beedle concurred.
“We believe that we can efficiently merge our operations, and customers of both banks will enjoy the benefits of our business combination,” Beedle wrote. “Having grown up in Southeast Alaska, I am looking forward to renewing old friendships and making new alliances in the area. I believe the opportunities in Southeast Alaska are attractive and will contribute nicely to our franchise.”
Through June 30, Northrim BanCorp had approximately $1.16 billion in assets. Alaska Pacific had about $177 million in assets, $148 million in net loans, $154 million in deposits and $20.8 million in equity capital, including $4.7 million in preferred equity held by private investors that will be redeemed before the transaction closes, according to the announcement from the two banks.
According to the Oct. 22 announcement about the merger, the current terms would dilute Northrim BanCorp’s tangible book value per share, as of June 30, by less than 1 percent. Langland wrote that the company expected to earn that back in less than one year.
Northrim also announced Oct. 22 that the company had net profits of $3.5 million, or 53 cents per diluted share, in the third quarter of 2013, which ended Sept. 30.
That was less than the bank earned during the third quarter of 2012, when it had $4.1 million, but unchanged from the second quarter of 2013.
For the first nine months of this year, Northrim has earned $9.6 million compared to $9.8 million for the same time in 2012.
Northrim’s mortgage affiliate has made less of a contribution so far this year, although an increase in portfolio loans partially offset that.
Northrim also saw fewer net recoveries on previously charged off loans for 2013 than it did in prior periods.
Shareholder equity has increased this year, up 6 percent to $21.98 per share as of Sept. 30 compared to $20.70 per share for the same period in 2012.
“Our profitability reflects our ongoing efforts to deliver solid returns to shareholders and build a dynamic, sustainable franchise in Alaska,” Langland said in an announcement about the company’s third quarter performance.
Molly Dischner can be reached at [email protected].