Glacier Bancorp in Kalispell, Mont., has agreed to buy Altabancorp in American Fork, Utah.
The $19.8 billion-asset Glacier said in a press release Tuesday that it will pay $933.5 million in stock for the $3.5 billion-asset parent of Altabank. The deal, which is expected to close in the fourth quarter, priced Altabancorp at 290.1% of its tangible book value, or one of the highest premiums for a bank in 2021.
Altabancorp has 25 branches in Utah and southern Idaho, along with $1.8 billion of loans and $3.2 billion of deposits. Altabank will operate under its existing name as Glacier’s 17th bank division once the deal closes.
“This is an exceptional opportunity to solidify Glacier’s presence in the booming Utah market by partnering with the largest community bank in the state,” Randy Chesler, Glacier’s president and CEO, said in the release.
“We have been keenly focused on building our presence in Utah and this opportunity checks all the boxes,” Chesler added.
Glacier said the deal will be immediately accretive to its tangible book value per share and 5.2% accretive to its 2022 earnings per share, excluding merger-related expenses.
Glacier said it expects to cut about 17.5% of Altabancorp’s annual noninterest expenses. The company said it will likely incur $33 million of merger-related expenses.
The acquisition will be the biggest ever for Glacier and will make Utah its second-largest state.
“The deal is not a surprise to us given [Glacier’s] existing presence and desire to build a larger foothold in Utah’s attractive markets,” Matthew Clark, an analyst at Piper Sandler, wrote in a client note. “But the size and pricing is on the higher end of our expectations.”
Once known at People’s Utah Bancorp, Altabancorp had been facing calls from members of the Gunther family, who own nearly a third of the company’s stock, to consider selling. The family had recently disclosed plans to oppose the reelection of several Altabancorp directors.
“The announcement comes sooner than we would have expected given [Altabancorp’s] strong profitability and favorable growth outlook,” Andrew Liesch, an analyst at Piper Sandler, wrote in a note to clients. “That said, we think the deal price is rewarding to … shareholders and believe the combination with Glacier should provide long-term value.”
Glacier said it had received voting commitments from members of the Gunther family.
Glacier was advised by D.A. Davidson and Miller Nash Graham & Dunn. Altabancorp was advised by Keefe Bruyette & Woods and Jones Day.