Bank of Idaho nixed higher offer from credit union to sell to Glacier
Bank of Idaho Holding Co. in Idaho Falls considered selling to a credit union but cooled on the idea after meeting with legal counsel and the director of the Idaho Department of Finance.
The $1.3 billion-asset company agreed last month to sell to Glacier Bancorp in Kalispell, Mont. for $245 million in a deal that is expected to close in the second quarter.
An unsolicited overture by the unnamed credit union in January 2024 prompted Bank of Idaho’s board to consider “limited but capable acquirers,” including Glacier and an unidentified regional bank, according to a regulatory filing tied to the pending merger.
The two banks were asked to consider a transaction “in part to validate the pricing indication received from the credit union,” the filing added. Bank of Idaho “had not been actively seeking a buyer at that time.”
Glacier and Bank of Idaho signed a confidentiality agreement on Feb. 15. In early March, the other bank withdrew from the process—it was unable to meet Bank of Idaho’s pricing expectations.
Glacier and the credit union submitted indications of interest in early March. Glacier’s offer was lower than the credit union’s valuation, and Bank of Idaho let the letter of interest expire on March 8.
Bank of Idaho signed a letter of intent with the credit union on March 18.
Complications Arise
The credit union’s bid carried significant execution risk due to regulatory challenges. Bank of Idaho’s legal advisers raised concerns about whether a bank-credit union deal would receive the regulatory approvals, particularly in Idaho.
Those views were supported during conversations the bank had with the director of the Idaho Department of Finance. Those talks, along with concerns that banking industry groups would oppose the deal, led Bank of Idaho to terminate the letter of intent on April 10.
The credit union tried one last time to make a deal work, sending an updated letter of intent to Bank of Idaho on Oct. 16. The bank told the credit union on Oct. 21 that it did not plan to pursue a deal.
Glacier Reenters the Conversation
Glacier sent Bank of Idaho an updated indication of interest on Oct. 4, following it up with a revised letter of intent on Oct. 12. A 90-day exclusivity agreement was signed a week later.
Each board unanimously approved the transaction at separate Jan. 13 meetings; the deal was announced later that day. The deal priced the seller at 191.9% of its tangible book value.
“This is a unique opportunity to find a bank that not only fits strategically within our existing footprint but will also meaningfully expand our presence in strong core growth markets for Glacier,” Randy Chesler, Glacier’s president and CEO, said in a press release announcing the acquisition.
“Idaho is the fastest-growing state in the country and the addition of Bank of Idaho … will secure our position as the leading community bank in the state,” he added.
The deal should be 3% accretive to Glacier’s 2026 earnings per share. It should take less than a year for Glacier to earn back about 0.4% dilution to its tangible book value.
Glacier plans to cut about 30% of Bank of Idaho’s annual noninterest expense. The company expects to incur $17.7 million of merger-related charges.