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Glacier Bancorp to acquire Columbine Capital for $73.9M

Kalispell, Mont.-based Glacier Bancorp Inc. agreed to acquire Buena Vista, Colo.-based Columbine Capital Corp. for roughly $73.9 million, based on the buyer's June 6 closing per-share price of $32.88. The aggregate transaction value includes the value of Columbine options assumed by Glacier.

The deal provides for the payment to Columbine shareholders of a total of $15.7 million in cash and 1,717,229 Glacier common shares. Subject to regulatory and Columbine shareholder approvals, the transaction is expected to close in the first quarter of 2018.

On an aggregate basis, SNL calculates the deal value to be 172.2% of book and 204.5% of tangible book, and 15.8x last-12-months earnings. The price is 18.43% of deposits and 15.77% of assets, and the tangible book premium-to-core deposits ratio is 10.32%.

For comparison, SNL valuations for bank and thrift targets in the Southwest region between June 6, 2016, and June 6, 2017, averaged 149.73% of book, 168.03% of tangible book and had a median of 21.79x LTM earnings, on an aggregate basis.

Upon deal completion, Columbine Capital unit Collegiate Peaks Bank will merge into Glacier Bancorp subsidiary Glacier Bank and operate as a separate banking division under its existing name and with its current staff.

Glacier expects pretax expenses of $3.9 million, according to a merger presentation. Other transaction projections include cost savings of roughly $1.8 million or 14.6% of Columbine's 2018 estimated noninterest expense, with 80% phased-in during 2018 and 100% thereafter.

In addition, the company said the pro forma deal value is 1.92x tangible book value and 14.6x LTM earnings, while the core deposit premium is 9.5%. EPS accretion for 2018 and 2019 is expected to be approximately 1.4% and 1.7%, respectively. The tangible book value earnback period is estimated to be around 2.5 years, while the internal rate of return is greater than 15%.

Collegiate Peaks Bank had $469 million in total assets, $331 million in gross loans and $401 million in total deposits as of March 31, according to the merger release. In Colorado, the combination of Glacier's existing Bank of the San Juans and Collegiate Peaks Bank would exceed $875 million in gross loans and $1.1 billion in total deposits as of the same date.

According to data compiled by SNL, Glacier Bancorp Inc. will enter Denver County, Colo., with two branches to be ranked No. 21 with a 0.40% share of approximately $39.03 billion in total market deposits; it will also enter Chaffee County, Colo., with two branches to be ranked second with a 32.54% share of approximately $497.3 million in total market deposits; and it will also enter Adams County, Colo., with one branch to be ranked No. 18 with a 0.53% share of approximately $4.19 billion in total market deposits.

SNL data shows that as of March 31, Glacier Bancorp had assets of $9.55 billion.

Keefe Bruyette & Woods served as financial adviser and Miller Nash Graham & Dunn LLP served as legal counsel for Glacier; D.A. Davidson & Co. acted as financial adviser and Fairfield and Woods PC acted as legal counsel for Columbine.

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