By Angela McDaniels
Seattle, July 3 - Washington Federal, Inc. said it signed a definitive merger agreement with First Mutual Bancshares, Inc. under which First Mutual Bank will merge into Washington Federal's wholly owned subsidiary, Washington Federal Savings, in a stock and cash transaction valued at $189.8 million.
Under the agreement, First Mutual shareholders may elect to receive stock, cash or a combination of stock and cash equal to about $27.05 for each share of First Mutual common stock they own. In total, Washington Federal plans to pay 50% of the consideration in cash and 50% in stock, according to a company news release.
The exchange price of Washington Federal's common stock will be the average closing price during a 10-day period ending five days prior to the closing of the merger. If the average closing price during this period is less than $22.75, Washington Federal said it can opt to substitute cash.
The merger is expected to close in the fourth quarter, pending the receipt of regulatory approvals and the approval of First Mutual's shareholders.
After the merger, the combined Washington Federal will have 148 offices in eight states with total assets of $11 billion and total deposits of $6.8 billion.
First Mutual is the bank holding company for First Mutual Bank and is based in Bellevue, Wash.
Seattle-based Washington Federal is the holding company for Washington Federal Savings, a savings and loan company.
| Acquirer: | Washington Federal, Inc.
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| Target: | First Mutual Bancshares, Inc.
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| Transaction total: | $189.8 million
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| Payment per share: | $27.05
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| Announcement date: | July 2
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| Expected closing: | Fourth quarter of 2007
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| Stock price of target: | Nasdaq: FMSB; $22.38 on July 2
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| Stock price of acquirer: | Nasdaq: WFSL; $24.14 on July 2
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