Cascade Bancorp and Home Federal Bancorp Agree to Join Forces to Create Premier Northwest Community Bank

  • Transaction will provide significant value to shareholders of both banks
  • Acquisition valued at $265.7 million or $17.83 per diluted share as of October 22, 2013
  • Combined bank will have significant scale and market share
  • Creates bank with estimated $2.4 billion in assets, 4th largest community bank in the Pacific Northwest1
  • Doubles Cascade market share in Boise/Treasure Valley
  • Solidifies Cascade #1 market share in Central Oregon
  • Expands Cascade footprint to Eugene, Oregon market
  • Transaction expected to unlock significant efficiency and profitability improvements
  • Resulting company expected to have strong capital, excellent credit quality and strong earnings prospects

BEND, Ore., Oct. 23, 2013 (GLOBE NEWSWIRE) -- Cascade Bancorp (Nasdaq:CACB) ("Cascade") the holding company for Bank of the Cascades and Home Federal Bancorp, Inc. (Nasdaq:HOME) ("Home Federal"), the holding company for Home Federal Bank, today announced the signing of a definitive agreement and plan of merger whereby Cascade and Home Federal will merge in a transaction (the "Transaction") valued at approximately $265.7 million, payable in a mix of cash and Cascade common stock to Home Federal's stockholders. The combined company will have approximately $2.4 billion in assets, serving communities across Oregon and Idaho.

The Transaction is expected to create a premier Pacific Northwest bank with scale in high growth markets while simultaneously unlocking earnings and efficiency improvements. A hallmark of the combination between Cascade and Home Federal is expected to be its strong core deposit base, which will likely rank among the top banks in the nation. Importantly, the Transaction provides the opportunity to right-size the branch distribution networks and infrastructure of the combined bank.

The boards of directors of Cascade and Home Federal unanimously approved the Transaction, which is subject to regulatory approval, approval by the shareholders of Cascade and Home Federal, and other customary conditions of closing. The Transaction provides for the payment to Home Federal shareholders and option holders of $120.8 million in cash (subject to adjustment based on closing capital and other adjustments described in the definitive merger agreement) and 24,309,066 shares of Cascade common stock, subject to adjustment described in the definitive merger agreement. Based on the closing price of $5.96 for Cascade shares on October 22, 2013, the transaction would have an aggregate value of $265.7 million. Cascade expects the Transaction to be immediately accretive to its earnings per share, excluding one-time transaction expenses. Upon closing of the Transaction, which is anticipated to take place in the first quarter of 2014, Home Federal will be merged into Cascade and Home Federal Bank will be merged into Bank of the Cascades. As of June 30, 2013, Home Federal had tangible common equity of $168.1 million.

Terry E. Zink, Cascade Bancorp President & CEO, commented "We are truly pleased to join forces with Home Federal and to provide an opportunity of unique and compelling value to both organizations. The combination of our two outstanding franchises will result in a strong balance sheet and capital base, attractive margins and good earnings potential. For our customers, we believe the banks are culturally compatible and the combined institution will deliver an expanded product offering and stronger lending capacity. For shareholders, we believe the increased scale of the combined company will position our bank to grow organically while also providing additional strength to pursue future acquisition opportunities. Finally, for our communities, we believe our combined organization will provide increased opportunity to deliver the advantages of community banking and to contribute to regional economic vitality."

On a pro-forma basis, Bank of the Cascades would be the #4 largest NW community bank(1) after completing the merger. In addition, the combination represents an opportunity for Cascade to enter the attractive Eugene, Oregon market to expand its footprint and services in its home state of Oregon.

Len E. Williams, Home Federal President and CEO, commented, "We are very excited about the Transaction. Home Federal and Cascade have similar cultures, complementary geographies, and service strengths that make this Transaction a natural fit. Cascade shares our commitment to customers and community, and this Transaction is a terrific result for our shareholders. We see great opportunity in combining to create a bank with enormous potential for future success."

Cascade's management believes this Transaction represents an opportunity to realize significant cost savings and, in doing so, allows Cascade to pursue efficiencies in infrastructure. The annualized combined synergies are estimated at 24% of the combined core non-interest expense. Deposit cost reductions and scale efficiencies are currently expected to create opportunity for the Transaction to result in favorable revenue synergies.

The Transaction is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes.

Cascade was advised in this Transaction by Macquarie Capital, as financial advisor, and Hunton & Williams LLP, as legal counsel. Home Federal was advised by Keefe, Bruyette & Woods, as financial advisor, and Vorys, Sater, Seymour and Pease LLP, as legal counsel.

Conference Call

A conference call to discuss the Transaction will be hosted by Cascade Bancorp on October 24, 2013 at 10am Pacific Time. The call may be accessed by dialing (855) 212-0212 and the conference ID is 491-175-152. A slide presentation to accompany management's commentary may be accessed from Cascade's October 24, 2013 Form 8-K filing with the Securities and Exchange Commission or at

(1) Defined as headquartered in Washington, Oregon, and Idaho with total assets of $10 billion or less

CONTACT: Terry E. Zink President and Chief Executive Officer Cascade Bancorp (541) 617-3527 Gregory D. Newton EVP and Chief Financial Officer Cascade Bancorp (541) 617-3526 Len Williams President and Chief Executive Officer Home Federal Bancorp 208) 468-5048 Eric Nadeau EVP and Chief Financial Officer Home Federal Bancorp 208) 468-5156Source:Home Federal Bancorp, Inc.