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In Washington, Timberland Bancorp to buy South Sound Bank

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In Washington, Timberland Bancorp to buy South Sound Bank

Hoquiam, Wash.-based Timberland Bancorp Inc. has agreed to acquire Olympia, Wash.-based South Sound Bank in a cash-and-stock deal.

Under the deal terms, South Sound shareholders will receive 904,918 shares of Timberland's common stock and $6.9 million in cash.

On an aggregate basis, SNL calculates that the deal value is 152.6% of book, 154.9% of tangible book and 27.3x earnings. It is 19.74% of assets, 22.96% of deposits and the tangible book premium-to-deposits ratio is 8.14%.

For reference, SNL valuations for bank and thrift targets in the West region between May 23, 2017, and May 23, 2018, averaged 187.70% of book, 195.81% of tangible book and had a median of 25.44x last-12-months earnings, on an aggregate basis.

The deal, which is subject to regulatory and South Sound shareholders' approval, is expected to close in the fourth quarter.

Upon completion, South Sound will merge with and into Timberland Bancorp unit Timberland Bank.

The deal is expected to be accretive to Timberland's earnings within the first year after its completion and will be immediately accretive to tangible book value per share.

SNL data shows that Timberland Bancorp will expand in Thurston County, Wash., by two branches to be ranked fifth with an 8.94% share of roughly $3.54 billion in total market deposits.

As of March 31, Timberland Bancorp had about $1.0 billion in assets, $880.4 million in deposits and $117.8 million in total shareholders' equity. South Sound Bank had roughly $186.9 million in assets.

Keefe Bruyette & Woods Inc. served as financial adviser to Timberland, while Breyer & Associates PC and Silver Freedman Taff & Tiernan LLP served as its legal advisers. For South Sound, Wedbush Securities Inc. was financial adviser, while Keller Rohrback LLP was legal adviser.

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SNL is owned by S&P Global Market Intelligence.

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