Deal talks between Eagle Bancorp Montana Inc. and Western Holding Co. of Wolf Point began in March when Western Holding President Duane Kurokawa and Eagle Bancorp Montana President and CEO Peter Johnson discussed a possible business combination.

The two executives then met during the week of March 18 in Nashville, Tenn., and the two companies entered into a nondisclosure agreement April 1. Eagle Bancorp Montana then began to prepare its indication of interest.

The Helena, Mont.-based bank delivered its final nonbinding letter of interest May 16, proposing to acquire its Wolf Point, Mont.-based peer for around $13 million to $14 million, based on a deal mix of 70% stock and 30% cash, or for around $12.5 million to $13.5 million, based on a deal mix of 50% stock and 50% cash.

Eagle Bancorp Montana set its valuation of Western Holding at $13 million, based on a deal mix of 50% stock and 50% cash, after completing its due diligence process and taking into account changes in market conditions. The boards of Western Holding and unit Western Bank of Wolf Point met Aug. 8, where adviser Vining Sparks said the deal is fair to the companies' shareholders from a financial point of view.

The deal was announced before market open Aug. 9.