Banner Corp. will grow its California footprint with the acquisition of AltaPacific Bancorp.

Banner, the holding company for Walla Walla-based Banner Bank, announced Wednesday it will merge the six branches of AltaPacific Bank, held under California-based AltaPacific Bancorp, with and into Banner Bank in an all-stock acquisition with an aggregate value estimated at about $87.4 million.

The merger will build Banner’s presence in its existing California market, the announcement said. The combined company will have about $12.2 billion in assets. Of that, $436 million comes from AltaPacific.

“AltaPacific Bank is a respected business-focused bank, and we consider it a compliment they chose us as their merger partner,” said Banner President and CEO Mark Grescovich in a prepared statement. “This is an excellent addition to Banner because it provides scale to our California franchise with attractive core deposits, commercial banking relationships and a similar credit culture.”

The acquisition is subject to approval by AltaPacific shareholders, regulatory agencies and other customary closing conditions, the announcement said. Closure is anticipated in the fourth quarter of 2019.

Under the proposal, AltaPacific shareholders would receive 0.2712 shares of Banner common stock for every one share of AltaPacific common stock. The value of the transaction is based on a closing price per share of $54.19 for Banner common stock as of Tuesday.

The announcement came on the same day Banner announced 10 percent year-over-year revenue growth as part of its second quarter earnings.

Banner’s net income jumped 22 percent to $39.7 million, or $1.14 per diluted share, in the second quarter from the same period a year ago.

That increase includes $301,000 of acquisition-related expenses. In the second quarter of 2018, there were no acquisition-related expenses, the announcement said.

“Banner’s second-quarter financial results demonstrate the effectiveness of our strategic plan and the success of our super community bank model,” Grescovich said in a prepared statement.

At the end of June, Banner Corp., also the holding company for Islanders Bank, had $11.85 billion in assets, $8.65 billion in net loans and $9.29 billion in deposits.

Its acquisition of Skagit Bancorp Inc. and its subsidiary Skagit Bank, closed last November, adding $917 million in assets and, after consolidation, six banking locations along the I-5 corridor between Seattle and the Canadian border, the information detailed.

With the acquisition of AltaPacific, Banner will add locations in Santa Rosa in Northern California, and Ontario, Temecula, Glendora, Riverside and San Bernadino in Southern California.

“Today’s banking environment is challenging for small community banks, even strong ones like ours,” AltaPacific CEO Charles O. Hall said in the announcement. “Choosing to merge with Banner Bank is a great win-win for our customers and employees. Our customers will benefit from larger lending limits, more resources, and expanded product and service offerings, while our team remains part of an outstanding community bank.”

Vicki Hillhouse can be reached at 509-526-8321, vickihillhouse@wwub.com or on Twitter at https://twitter.com/VickiHillhouse.

Vicki covers business and economic development, including tourism, the Port of Walla Walla and the Strictly Business column, as well as features. She has been reporting for the Union-Bulletin since late 2001.

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