The two have signed an agreement for Northrim to acquire Alaska Pacific in a stock and cash transaction valued at about $14.31 million, or approximately $17.28 per share of Alaska Pacific common stock.
Craig Dahl and Joe Beedle have known each other since they were teenagers in Juneau. Now they’re both presidents and CEOs of publicly traded banks – one company in the Railbelt, the other in Southeast Alaska.
Alaska Pacific’s Dahl says the two started talking more than six months ago.
“They wanted to expand their market and we wanted to see a way to grow the bank in this market,” Dahl says.
Northrim’s size dwarfs Alaska Pacific and Dahl says his small company will now be able to grow “from the standpoint of increasing the products and services that our customers will have. It’ll bring to our market a much larger lending limit capacity to assist our business customers and we feel that for the employees of the bank, this will offer other opportunities for career growth that we might not be able to give them as a smaller institution.”
Northrim CEO Beedle calls Alaska Pacific a strong company.
“There are not issues with this bank,” he says.
Alaska Pacific has rebounded from problem loans and losses earlier this decade and become profitable again. Beedle says Alaska Pacific had choices in merging, and the two institutions are compatible.
“We’re about 6 and a half times the size of Alaska Pacific so together we grow from being a 1.2 billion dollar bank to a 1.35 billion dollar bank. And that means that individual loans, our lending limits, will after this merger be in the 25 million dollar range,” he says.
Northrim BanCorp, Inc. is the parent company of Northrim Bank, with ten offices in Anchorage, the Mat-Su and Fairbanks as well as a lending division in Washington state. Alaska Pacific has branches in Juneau, Ketchikan and Sitka.
The merger is subject to review by the Federal Reserve and FDIC. While both companies’ boards of directors have approved it, Alaska Pacific shareholders will vote on the merger early in the first quarter of 2014.
Beedle says at least one member of the Alaska Pacific board of directors will become a member of the Northrim board.
The transaction will not close until next year, according to Dahl.
“After the merger, there’s still a good five to six, seven months involved in actual conversion of systems in products and services. So from this moment forward we’re really looking at almost a year in the process of bringing this altogether,” he says.
Beedle says Alaska Pacific branches will eventually be called Northrim Bank, but no branches will close. The current Alaska Pacific management team will stay in place. Beedle says some backroom functions, such as computer and processing systems, will be consolidated in Anchorage.
When the deal is closed, Craig Dahl says he is headed to retirement and sailing the waters of Southeast Alaska.
A conference call on the merger is set for Wednesday, at 8:30 a.m. Alaska time. The number is (480) 629-9643, or listen online.