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Home Federal, Bank of Cascades to merge

Banner Corporation, the parent company of Banner Bank and Islanders Bank, announced last week that its planned merger revealed Sept. 24 with Home Federal Bancorp Inc. had been terminated, due to a superior offer to Home Federal Oct. 16, from Cascade Bancorp.

Under the terms of the agreement, Banner had the right to match Cascades' offer through Oct. 22. In connection with the termination of the agreement, Home Federal Bancorp paid a termination fee of approximately $3 million to Banner.

Immediately afterward, on Oct. 23, Cascade Bancorp, the holding company for Bank of the Cascades, and Home Federal Bancorp Inc. announced the merger of Bank of the Cascades and Home Federal.

The transaction is valued at approximately $265.7 million, payable in a mix of cash and Cascade common stock to Home Federal's stockholders. The resulting combined company will have approximately $2.4 billion in assets, serving communities across Oregon and Idaho.

Cascades Bancorp is headquartered in Bend, and Madras has a branch of Home Federal Bank.

The boards of directors of Cascade and Home Federal unanimously approved the Transaction, which is subject to regulatory approval, approval by the shareholders of Cascade and Home Federal, and other customary conditions of closing. It is anticipated the merger will be complete in the first quarter of 2014.

Terry E. Zink, Cascade Bancorp president and chief executive officer, said "We are truly pleased to join forces with Home Federal and to provide an opportunity of unique and compelling value to both organizations. The combination of our two outstanding franchises will result in a strong balance sheet and capital base, attractive margins and good earnings potential. For our customers, we believe the banks are culturally compatible and the combined institution will deliver an expanded product offering and stronger lending capacity. For shareholders, we believe the increased scale of the combined company will position our bank to grow organically while also providing additional strength to pursue future acquisition opportunities. Finally, for our communities, we believe our combined organization will provide increased opportunity to deliver the advantages of community banking and to contribute to regional economic vitality."

On a pro-forma basis, Bank of the Cascades would be the fourth largest Northwest community bank after completing the merger. In addition, the combination represents an opportunity for Cascade to enter the attractive Eugene, market to expand its footprint and services in Oregon.  

Len E. Williams, Home Federal president and CEO, commented, "We are very excited about the transaction. Home Federal and Cascade have similar cultures, complementary geographies, and service strengths that make this transaction a natural fit. Cascade shares our commitment to customers and community, and this Transaction is a terrific result for our shareholders.  We see great opportunity in combining to create a bank with enormous potential for future success."

About Cascade Bancorp  Cascade Bancorp, headquartered in Bend, and its wholly owned subsidiary, Bank of the Cascades, operate in the Oregon and Idaho markets. Founded in 1977, Bank of the Cascades offers full-service community banking through 32 branches in Central, Southern and Northwest Oregon, as well as in the greater Boise/Treasure Valley, Idaho area.




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