F&M Bank, a Spokane institution that celebrated its 100th year in business this year, will be sold to Banner Bank in a cash and stock deal valued at $98.8 million.
The bank was long-known as Farmers and Merchants Bank. It has 14 branches, thousands of accounts and deep experience in the Spokane market, which made it an attractive merger candidate.
Banner Bank has had aspirations for several years to make a big move into the Spokane region, said Banner CEO Michael Jones.
Banner is based in Walla Walla and had focused on the Northwest’s three other population centers of Seattle, Portland and Boise.
But the surging Spokane economy, from its low unemployment rates and influx of affluent retirees, to big downtown investments and rising home values, persuaded Banner that the time was right to make a splash in Spokane.
F&M has 160 employees, assets valued at $406 million, loans of $354 million, and $339 million in deposits. It’s net worth is about $40 million.
By comparison, Banner’s net worth is $320 million.
F&M CEO John Wagner said the two banks complement each other’s services. The sale, he said, will be a boost to customers of both.
“Banner Bank complements our history extremely well as it is 116 years old with its roots in southeastern Washington,” Wagner said.
A group of farmers and business owners started the state-chartered bank in the farming town of Rockford, Wash., to meet the town’s agricultural financing needs.
It grew fast, absorbed the Rockford State Bank after a run on that bank, and survived the Great Depression.
The bank grew during World War II and prospered throughout the 1950s and 1960s, according to a history write-up on the bank’s Web site.
The bank expanded into the Spokane Valley, diversified its lending base, and ditched “banker’s hours” by opening on Saturdays.
The Layman and Klaue families became major shareholders in 1963. The families maintain seats on the board to this day.
David Klaue, the son of former F&M chairman August Klaue, will now be a director of Banner, holding more than 6 percent of the publicly traded company’s common stock.
Banner will pay about $19.4 million in cash and award about 1.77 million shares of common stock valued at about $80 million.
Jones said all branches will remain open and assume the Banner name.
In all, the bank will have 72 branches across Washington, Idaho and Oregon.
The transaction is expected to close by the end of the second quarter next year.