Northrim Bank is expanding its network beyond the Anchorage and Fairbanks areas and into Southeast Alaska.
Northrim BanCorp, the parent company for Northrim Bank, is set to acquire Alaska Pacific Bank for about $14.31 million — the equivalent of about $17.28 per share of the Southeast bank’s common stock.
The two companies announced the move in a joint press release Tuesday.
“Having grown up in Southeast Alaska, I am looking forward to renewing old friendships and making new alliances in the area,” Northrim Bank President and CEO Joe Beedle said in the release. “I believe the opportunities in Southeast Alaska are attractive and will contribute nicely to our franchise.”
Alaska Pacific will be seeking the approval of its shareholders while Northrim gets the necessary approval from bank regulators over the next three to four months before the deal is finalized. It is expected to close during the first quarter of next year.
“I am confident that our customers and employees will find Northrim to be a good partner and that the transition will be a seamless one,” Alaska Pacific President and CEO Craig E. Dahl said. “Our customers will continue to receive outstanding services and the benefits of new products, new services and higher lending limits, and our employees will have continued opportunities for growth and advancement.”
Alaska Pacific has been overburdened by an increasing number of federal regulations, and it was getting harder and harder to offer products and services for customers at competitive rates, Dahl said.
“We had too many resources for our size tied up in compliance,” he said. “So we’re growing Northrim ... but at the same time preserving our footprint, reputation and the majority of our employees.”
All front-facing employees who work directly with customers in the five Alaska Pacific branches in Southeast and their direct managers will keep their jobs, but a presently unknown number of “backroom” jobs will be consolidated and likely moved to Anchorage, Beedle said.
“We like the people — like the way they operate — they do some stuff better than us,” Beedle said.
One Alaska Pacific board member will be named to the Northrim board, and the others will serve in advisory roles.
In addition to the increasing regulatory burden, Alaska Pacific was seeing some clients opt for other banks for their loan needs because the Southeast community bank could only loan about $3.2 million to a single client, Dahl said. The merger changes that limit to $25 million and, in turn, opens up more possibilities for the bank’s operations in Southeast Alaska, added Beedle.
Additional support services such as health insurance advising and financial statement analysis will also become available to Southeast Alaska customers after the merger is complete.
For non-business customers, Northrim is working to ensure a full arsenal of mobile banking applications for popular smart phones are available to users by the time the two banks become one, Beedle said.
“You need less bricks and more clicks,” he said.
During the merger process all services at Alaska Pacific Bank’s branches will continue to be offered.
“We’ll be continuing to serve our customers,” Dahl said.
A conference call about the transaction is scheduled for Wednesday at 8:30 a.m. Alaska time, and the call-in number is 480-629-9643.