Two become one


Bend-based Bank of the Cascades purchases Home Federal Bancorp, Inc.

Two community banks in Prineville recently reached a merger agreement, but local customers can expect little to change in the short term.

Bank of the Cascades (Cascade Bancorp) and Home Federal Bancorp, Inc., announced the agreement on Wednesday in which the two banks will merge in a transaction valued at about $265.7 million, payable in a mix of cash and Cascade common stock to Home Federal’s stockholders. The combined company will have approximately $2.4 billion in assets, serving communities throughout Oregon and Idaho. Bank of the Cascades will become the fourth-largest Northwest community bank.

According to a joint news release, the transaction is expected to create a premiere Pacific Northwest bank with scale in high growth markets while simultaneously unlocking earnings and efficiency improvements.

“It strengthens the community banking hold in the Central Oregon market,” said Terry Zink, President and CEO of Cascade Bankcorp. “We believe that it is important to the customers in especially some of our smaller markets to have choices besides the big banks.”

Zink went on to point out that community banks have seen increased regulations, which makes it difficult to for them to remain viable.

“What a lot of us are looking for are partners to get together with,” he said. “Size matters when it comes to regulatory stuff.” Zink explained that the merger will increase the number of people within the new bank who can work on regulatory and compliance issues.

“If community banking is to survive, you are going to have to have combinations like this that make sense.”

The news release stated that the transaction provides “the opportunity to right-size branch distribution networks and infrastructure of the combined bank. However, neither Zink nor Williams anticipate many immediate changes for local customers of their respective banks.

“When it comes to individual locations, we have not gotten into any of those discussions yet,” Williams said. “I don’t see, frankly, a whole lot of change from a customer perspective. Both organizations are community banks that focus on the customers really well, so I think that will continue.”

At the same time, Williams anticipates some product and service crossover. He noted that Home Federal may have some superior offerings while Bank of the Cascades may have others.

“We’ll combine and put out the best offering of the two organizations.”