Acquisition of Sonoma County’s Luther Burbank Savings by WaFd Bank gets regulatory OK

A $654 million deal that would merge Santa Rosa-based Luther Burbank Savings Bank into Seattle-based Washington Federal Bank has been approved by federal and state regulators, the institutions’ parent companies announced Tuesday.

The all-stock deal would fold Luther Burbank Corporation (Nasdaq: LBC) into WaFd Inc. (Nasdaq: WAFD), expanding Washington Federal, or WaFd Bank, into California and creating an institution with combined assets of $30.8 billion and 208 branches in nine Western states.

The merger is set to be completed Feb. 29, with Luther Burbank customers moving to WaFd the first week of March.

“A lot has transpired in the fourteen months since we announced this combination, but the more we have worked with the Luther Burbank team, the more convinced we are our combined bank will create significant opportunities for current and future customers and shareholders,” Brent Beardall, president and CEO of Washington Federal, said in the news release.

The two institutions first unveiled the combination in November 2022.

”Our expectation is that most client-facing Luther Burbank employees, and many of the Luther Burbank team members who directly support these client-facing employees, will continue with the combined institution,” WaFd Bank said at the time.

But some “back office administrative support teams” may not stay on.

Luther Burbank President and CEO Simone Lagomarsino said the deal aligns with the institution’s “deep commitment to acting with integrity.”

“We believe we have found a long-term partner in WaFd whose values align with ours, can offer our customers a wider range of technology-enabled financial solutions and expanded geographic footprint that will help our customers thrive,” Lagomarsino said.

Two directors from Luther Burbank Corp. will join the WaFd Inc. and Washington Federal boards: Brad Shuster and Max Yzaguirre on the closing of the deal.

WaFd Bank started in 1917. At year-end the commercial bank operated 198 branches in Washington, Oregon, Idaho, Utah, Nevada, Arizona, Texas and New Mexico. It reported $22.6 billion in assets and $16 billion in deposits as of Dec. 31 and $17.5 billion in loans as of Dec. 23.

Launched in 1983, Luther Burbank Savings operates 10 branches in California, one in Washington and several loan production offices throughout the Golden State. At year-end, it had total assets of $8.2 billion, a loan portfolio of $6.8 billion and total deposits of $5.8 billion.

Jeff Quackenbush covers wine, construction and real estate. Reach him at jquackenbush@busjrnl.com or 707-521-4256.