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Commencement Bank, Thurston First Bank strike MOE

Tacoma, Wash.-basedCommencement Bank ($177.2million) and Olympia, Wash.-based ThurstonFirst Bank ($130.7 million) have struck a deal for a .

The two willconsolidate their respective regulatory charters with Thurston First merging intoCommencement, but will continue to operate under separate names, according to aJuly 8 news release.

Deal terms stipulatethat Thurston First will receive 0.9024 of a Commencement common share in exchangefor each Thurston First common share. Fractional shares will be exchanged for cashbased on the book value of Commencement stock as of the month-end preceding theclosing date. At the close of the merger, Commencement's shareholders are expectedto own approximately 65% of the combined company while Thurston First's shareholderswill have a roughly 35% ownership stake.

SNL valuationsfor bank and thrift targets in the West region between July 8, 2015, and July 8,2016, averaged 142.45% of book, 144.14% of tangible book and had a median of 26.07xlast-12-months earnings, on an aggregate basis.

The combinedinstitution is expected to have approximately $308 million in assets, $228 millionin loans, $265 million in deposits, and over $35 million in common equity. The dealis set to close during the fourth quarter and is subject to approval from regulatorsand the shareholders of both banks.

Data compiledby SNL also shows that the combined bank will operate one branch in ThurstonCounty, Wash., ranked No. 12 with a 3.50% share of approximately $3.01 billion intotal market deposits, and another branch in Pierce County, Wash., ranked No. 11with a 1.54% share of approximately $9.86 billion in total market deposits.

Excluding one-timemerger-related expenses, the transaction is expected to be immediately accretiveto the earnings per share of the combined bank.

CommencementBank President and CEO Harald Russell, as well as Thurston First President and CEOJames Haley, will keep their posts at their respective banks. Four directors ofThurston First will join Commencement's board, while most members of the ThurstonFirst board will join an advisory board to the combined company.

PerformanceTrust Capital Partners LLC, led by Al Glowasky, served as financial adviser to CommencementBank, while Keller Rohrback LLP, led by Glen Garrison, was legal counsel. D.A. Davidson& Co., led by Tom Hayes, was financial adviser, and Stinson Leonard Street LLP,led by Ernie Panasci, was legal counsel to Thurston First Bank.

To use branch analytics tools to compare market overlap, clickhere.To create custom maps, click here.

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