Heritage Financial signed a definitive agreement to acquire Premier Commercial Bancorp in an all-stock transaction valued at approximately $88.6 million, or $15.12 per share, based on the closing price of Heritage common stock of $31.10 on March 8, 2018.

Under the terms of the merger agreement, Premier shareholders will receive 0.4863 shares of Heritage common stock for each share of Premier common stock. The value of the merger consideration will fluctuate until closing based on the value of Heritage’s common stock price. Upon consummation, the shareholders of Premier will own approximately 7.7% of the combined company.

Established in 1999 and headquartered in Hillsboro, OR, Premier’s wholly owned subsidiary Premier Community Bank has six branch locations and $401 million in total assets, $344 million in total loans and $331 million in total deposits as of December 31, 2017. Its acquisition will bring Heritage’s total assets to more than $5 billion on a pro forma basis.

“The partnership with Premier is an excellent way for us to expand our franchise in the Portland market. Heritage has significant momentum in Portland and Seattle, which are two of the most attractive banking markets in the Pacific Northwest,” said Brian Vance, president and CEO of Heritage. “We welcome the employees and customers of Premier to Heritage, and we look forward to our combined success going forward.”

The definitive agreement was unanimously approved by both boards of directors. The merger is subject to regulatory approvals, approval by Premier shareholders, and certain other customary closing conditions and is expected to close in Q3/18.

D.A. Davidson served as financial advisor and provided a fairness opinion to Heritage’s board, while Breyer & Associates and Silver, Freedman, Taff & Tiernan served as legal counsel. Sandler O’Neill + Partners served as financial advisor and provided a fairness opinion to Premier, with Miller Nash Graham & Dunn acting as Premier’s legal counsel.