Shareholders sign off on Northrim's purchase of Oregon bank, its first move outside Alaska

Shareholders of Anchorage-based Northrim BanCorp and Oregon's PBCO Financial Corp. signed off Oct. 20 on Northrim's purchase of the Medford, Oregon, lender, moving Northrim a step closer to its first branches outside Alaska.

The deal still needs approval from the Federal Reserve, the Federal Deposit Insurance Corp. and banking regulators in Alaska and Oregon. The companies applied Sept. 3, and their filings do not say whether any approvals have come through. They expect to close on or about Jan. 1, 2027.

If it goes through, 11 branches of PBCO's People's Bank of Commerce in southern Oregon and the Willamette Valley, including Medford, Ashland and Eugene, would take the Northrim name. Northrim has 21 branches, all in Alaska. The combined company would have about $4.2 billion in assets, up from Northrim's $3.4 billion, according to the joint proxy statement.

Northrim shareholders voted on issuing the stock that pays for the deal. More than 98% of shares voted were in favor, according to a company filing. The yes votes came to about 71% of all outstanding shares, above the majority required. PBCO shareholders approved the merger agreement. PBCO does not file with the Securities and Exchange Commission and did not release a count.

The vote came five days after Northrim took an $8.8 million hit on a single specialty finance customer that owed it $20 million. Northrim said the charge is expected to cut third-quarter after-tax earnings by about $6.7 million, or 29 cents a share.

The deal is paid in stock. PBCO shareholders would get 1.16 Northrim shares for each PBCO share, about 5.96 million new Northrim shares in all, and would own about 21% of the combined company. One PBCO director would join Northrim's board. The deal was worth about $167.3 million when it was announced in July. After Northrim's share price fell from $27.90 to $25.56 by Sept. 16, it was worth about $153.3 million.

The exchange ratio can be cut if PBCO's adjusted tangible common equity, a measure of its capital, falls below about $102.5 million at closing. PBCO estimated it at about $103.7 million as of June 30. Either company can walk away if the deal has not closed by April 30, 2027, a deadline that can be pushed to June 30, 2027, in some circumstances to wait on regulators.