Oregon Bank to Expand Into Washington

Portland’s U.S. Bancorp announced Wednesday that it has agreed to buy Old National Bancorporation of Spokane for $174 million, creating the Northwest’s largest banking organization.

If approved by shareholders and regulators, the cash deal will be completed shortly after July 1, when Washington state law allows interstate bank acquisitions.

The combination joins Oregon’s largest bank with the sixth-largest bank in Washington. The resulting company, with $10.8 billion in assets, becomes the region’s biggest bank, passing Seattle-based Seafirst’s $10 billion in assets. Seafirst is a subsidiary of BankAmerica.

U.S. Bancorp tried to buy Seafirst earlier this year, but BankAmerica said its Washington unit was not for sale.

Old National Bancorp, with $1.8 billion in assets, is the parent of Spokane’s Old National Bank, which has 77 branches in western Washington and the Puget Sound area. U.S. Bancorp is the $9-billion (assets) holding company for U.S. National Bank of Oregon and several smaller banks. It has 200 branches across Oregon.

“We intend to approach the Washington market aggressively so we will need the talent, skills and experience that ONBC (Old National Bancorporation) currently possesses. We will build on the program and people ONBC has in place,” said John A. Elorriaga, U.S. Bancorp’s chief executive.