Banner Corporation announced it will acquire Pacific Financial Corporation, the holding company for Bank of the Pacific, in an all‑stock transaction valued at approximately $177 million. In the deal, each share of Pacific Financial common stock will be exchanged for 0.2633 shares of Banner common stock, giving Pacific shareholders an estimated 7% stake in the combined company and leaving Banner shareholders with about 93%.
The transaction will combine Banner’s $16.34 billion in assets with Pacific’s $1.29 billion, creating a single entity with roughly $18 billion in assets. Bank of the Pacific’s 18 branches and offices, a $762 million loan portfolio, and a $1.14 billion deposit base—of which 38% are non‑interest‑bearing—will be added to Banner’s existing operations. The deal is expected to close in the third quarter of 2026.
Strategically, the acquisition expands Banner’s presence in Western Washington and Northern Oregon, markets where it seeks higher deposit density. Pacific’s low‑cost deposit mix, with a cost of deposits around 1.03% as of March 31, 2026, is projected to lift Banner’s net interest margin and support earnings growth. The combination also delivers immediate scale, allowing Banner to leverage its broader geographic footprint and technology platform across a larger customer base.
Banner’s management projects the transaction to be immediately accretive to 2027 earnings per share, excluding one‑time transaction expenses. The deal is expected to generate about $16.4 million in cost savings in 2027, representing 40% of Pacific’s non‑interest expense and fully realized after the phased implementation of synergies. The transaction is valued at roughly 1.54 times tangible book value and 6.3 times projected 2027 earnings, underscoring the financial upside for Banner shareholders.
"Bank of the Pacific is a highly‑respected, financially strong community bank with exceptional core deposits, and we’re pleased they selected Banner as their merger partner," said Mark Grescovich, President and CEO of Banner. "This transaction expands our presence and density in attractive Western Washington and Western Oregon markets while offering Bank of the Pacific customers broader product offerings and technology tools, increased commercial lending limits and an expanded branch delivery system." "Combining with Banner represents an exciting next chapter, creating tremendous opportunities for our employees, customers and shareholders," added Denise Portmann, President and CEO of Bank of the Pacific.
The transaction requires approval from Pacific Financial shareholders, regulatory authorities, and customary closing conditions. Once those approvals are obtained, the parties anticipate closing in the third quarter of 2026, at which point the combined entity will operate under the Banner name and brand.
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