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Glacier Bancorp (GBCI) to Buy Altabancorp (ALTA) for $933.5M

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Glacier Bancorp, Inc. GBCI has announced a definitive agreement to acquire American Fork, UT-based Altabancorp ALTA, the bank holding company of Altabank, for $933.5million. The transaction is expected to further strengthen Glacier Bancorp’s presence in the booming Utah market. The all-stock deal is likely to close in the fourth quarter of 2021.

Len Williams, Altabancorp’s president and CEO said, “Altabank has been a market leader in Utah for decades. In our constant quest to be bigger, better and stronger, the opportunity to join the Glacier family of banks was an undeniably great one for us. Becoming part of the Glacier family gives us the chance to compete with anyone, anywhere in our market, all while maintaining our local autonomy.”

Per Randy Chesler, president and CEO of Glacier Bancorp, stated, “We have been keenly focused on building our presence in Utah and this opportunity checks all the boxes.” Chesler further noted “This acquisition is consistent with our history of adding high quality community banks to our proven banking model. Altabank has been serving customers in Utah for over 100 years, and has developed a leading position and lasting legacy in the markets it serves.”

Transaction Details

Per the terms of the deal, shareholders of Altabancorp will get 0.8 share of Glacier Bancorp for each share of Altabancorp.

As of Mar 31, 2021, Altabancorp had total assets of $3.5 billion, deposits of $3.2 billion and loans of $1.8 billion. After the conclusion of the deal, Altabancorp will become Glacier Bancorp’s 17th bank division, and operate under its existing name.

The deal has been already approved by the boards of both companies. It still needs a go-ahead from Altabancorp shareholders, and is subject to regulatory approvals and other customary closing conditions.

Synergies & Other Financial Benefits

Glacier Bancorp projects the acquisition to be 5.2% accretive to earnings (excluding the one-time transaction costs) in 2022. Also, the buyout will be instantly accretive to the company’s tangible book value per share. The deal is likely to lead to significant revenue synergies.

The transaction will result in one-time transaction charges of roughly $33 million. Glacier Bancorp anticipates 80% of cost savings to be realized in 2022 and 100% thereafter.

Further, the transaction will lead to internal rate of return above 15%.

Conclusion

Glacier Bancorp believes the latest development will complement its 2019 acquisition of First Community Bank in Utah, and help it compete in the growing and dynamic markets by partnering with the largest community bank in the state. Since 2000, the company has been engaged in 24 strategic acquisitions till date, which reflects its solid balance sheet and liquidity position.

Shares of Glacier Bancorp and Altabancorp have rallied 39.5% and 59.3%, respectively, compared with the industry’s 52.5% over the past six months.

Six-Month Price Performance

Currently, both stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Banks Undertaking Similar Moves

Bank of America BAC in March acquired Santa Barbara, CA-based Axia Technologies, Inc., a health care payment and technology firm that provides secure patient payments. Terms of the transaction remain undisclosed.

In April, PacWest Bancorp PACW announced that its banking subsidiary, Pacific Western Bank, has signed an all-cash deal worth $250 million to acquire MUFG Union Bank, N.A.’s HOA Services Division. The transaction is likely to close in the fourth quarter of 2021, subject to necessary approvals.

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Bank of America Corporation (BAC) : Free Stock Analysis Report

Glacier Bancorp, Inc. (GBCI) : Free Stock Analysis Report

PacWest Bancorp (PACW) : Free Stock Analysis Report

Altabancorp (ALTA) : Free Stock Analysis Report

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