Washington Federal to acquire Luther Burbank in $654m deal

Seattle-based Washington Federal, the holding company for Washington Federal Bank, has agreed to acquire California-based Luther Burbank and its fully-owned subsidiary, Luther Burbank Savings, in an all-stock deal valued at around $654 million.

The transaction is expected to expand Washington Federal’s franchise into California.

The combined entity will have total assets of around $29 billion, total loans of $23 billion, and total deposits of $22 billion. It will have more than 210 locations in Washington, Oregon, California, Utah, Idaho, Nevada, Texas, Arizona, and New Mexico.

Brent Beardall — Washington Federal President and CEO said: “One thing I have learned is that you do not find the right deal – the right deal finds you. That is the case here.

“It checks all the boxes. It creates scale. It creates a contiguous footprint from Seattle to Austin. Unlike so many comparable transactions, this transaction does not negatively affect our tangible book value and is accretive to forward-estimated earnings and capital.”

Post-closing, Luther Burbank shareholders will exchange each of their shares in the bank holding for 0.3353 shares of Washington Federal.

Victor Trione — Luther Burbank board chairman said “This truly is a great opportunity for our shareholders to reinvest in a larger pro forma institution with a shared legacy and long-term perspective on value, customers and community.”

As of 30 September 2022, Washington Federal had $20.8 billion in total assets, $16.3 billion of total loans, and $16 billion in total deposits while Luther Burbank had total assets of $7.9 billion, $6.9 billion of total loans, and $5.8 billion in total deposits.

Expected to close as early as Q2 2023, the deal is subject to shareholder and regulatory approval and other customary conditions.