The company, which first went public in 1998, sought to raise $35 million in its offering but wound up raising more because of investor demand, Vance said.
Investor activity the past year had been idled by the slower economy, but it has picked up as the economy improves, he said.
“There is strong interest from the investor community in well-managed and well-positioned banks,” Vance said.
As part of the public offering of common stock, the company sold 3.8 million shares at $11.50 a share, raising $43.4 million. After expenses and commissions, Heritage Financial expects to net $40.5 million.
Although the transaction doesn’t officially close until Tuesday, the investment “commitments have been made,” Vance said. Both Vance and Chief Financial Officer Don Hinson spent Monday, Tuesday and Wednesday in New York City, pitching the company to potential investors.
The company expects to use the money raised for future growth, including the possible acquisition of other community banks, Vance said. He said the company has no specific targets today, but as the economy improves there is the chance to “acquire other community banks with FDIC-assisted sales as well as other banks that are looking for a stronger partner.”
The money also could be used to pay off all or some of the $24 million that the company received as part of the U.S. Treasury’s Troubled Asset Relief Program, although Vance said Heritage’s first priority is to “grow the franchise.”
The underwriters on the deal were Keefe, Bruyette & Woods Inc. of New York and D.A. Davidson & Co. of Montana. State Division of Banks Director Brad Williamson acknowledged that the capital markets are open to those banks in good financial shape. He also noted that Tacoma-based Columbia Bank recently raised $120 million, and Seattle-based Washington Federal also seeks to raise $330 million.
Overall, though, community banks in Washington continue to struggle with a “fairly high level of problem assets,” Williamson said. Of community banks nationally, Washington’s are in the “upper quartile in the problem loan arena,” he said.
Still, Washington has its share of well-capitalized banks that can weather the slower economy and those, such as Heritage, that are looked upon favorably by investors, Williamson said.
Rolf Boone: 360-754-5403
rboone@theolympian.com
