KLAMATH FALLS - Klamath First Bancorp Inc. announced that Klamath First Federal had agreed to sell seven branches located in northeastern Oregon to the Bank of Eastern Oregon. The branches that will be sold are located in the towns of John Day, Burns, Condon, Fossil, Heppner, Prairie City and Moro. The sale includes deposit accounts of approximately $66 million, which will double the size of the Bank of Eastern Oregon's six branches, and its $78 million in total assets. The fixed assets and branch location will also be included in the sale; however, loans will not be included. It is anticipated that the Bank of Eastern Oregon will offer employment to all current branch employees.
President and Chief Executive Officer Kermit K. Hoser said, "As part of our strategic plan, management and the board of Directors have looked at the possibility of branch sales, closures and consolidations in an effort to improve Klamath First's operating efficiency over the past year, but did not have any specific areas or branches targeted. With the recent announcement of our proposed merge with Sterling Financial Corporation, several community banks indicated an interest in many of our rural branch locations. Klamath First determined that Bank of Eastern Oregon was the best candidate to acquire its branches since Bank of Eastern Oregon shared Klamath First Federal's commitment to customers and employees. In addition, a sale at this time would ensure that the Klamath First customers and employees at these branches experience only one organizational change rather than two.
"We do not anticipate any further sales or closures of branches prior to the Sterling merger," added Houser.
"The Bank of Eastern Oregon is pleased to offer customers and employees of these branches the opportunity to join our great team. We were established in 1945 to meet the financial needs of rural communities in Eastern Oregon, and these branch purchases will allow us to continue that tradition in markets and with customers we are very familiar with," stated George Koffler, President and Chief Executive Officer of the Bank of Eastern Oregon. Bank of Eastern Oregon currently intends to partially finance the proposed branch acquisition through the issuance of $2 million of Trust Preferred Securities.
As previously announced, Klamath is party to a merger agreement pursuant to which Klamath will merge into Sterling Financial Corporation. Sterling was apprised of and concurred in the sale of these seven branches. The branch sale is expected to close in December subject to regulatory approval.
Klamath First Bancorp Inc. is the holding company for Klamath First Federal Savings and Loan Association, which operates 59 offices, 57 in 26 counties throughout Oregon and two in-store branches in south-central Washington. Klamath First serves the state of Oregon through these offices by offering a full range of products and services for both the consumer and business customer, including commercial, consumer and real estate loans, various checking and savings products, 24-hour telephone banking, and online banking with bill pay through its Web site www.KlamathFirst.com. Customers have access to brokerage and investment services through the company's subsidiary Klamath First Financial Services. Additionally, customers may visit new in-store branches seven day a week with extended banking hours.