Washington Federal, Inc. and Anchor Bank have announced an amendment to their merger, extending from December to June the date when either party can terminate the transaction.
Specifically, the amendment allows either entity to stop the merger agreement until June 30, 2018 if the merger hasn’t yet been completed. The amendment also provides for up to three additional six-month extensions beyond June 30. Previously, that cutoff date had been Dec. 31, 2017.
The move effectively adds a delay to the merger that the two banks had previously entered into in April. The amendment, according to an announcement from both parties, was due to “the identification of certain issues with respect to procedures, systems and processes of Washington Federal’s bank subsidiary, Washington Federal, National Association, relating to its Bank Secrecy Act (‘BSA’) program.”
Washington Federal is taking steps to remedy those issues, but those efforts would likely affect regulatory approvals necessary for the merger. Because of this, Washington Federal has decided to withdraw its regulatory applications relating to the merger and resubmit them after the remediation has progressed.
“We are disappointed that we will not be able to complete the Anchor transaction in the time-frame originally anticipated; however, we will use this opportunity to improve our processes and systems,” said Washington Federal president and CEO Brent Beardall. “We have been very impressed with both the clients and employees of Anchor Bank and look forward to bringing our two banks together.”
“We continue to believe that a merger with Washington Federal is beneficial to our shareholders and the communities we serve,” added Jerry Shaw, president and CEO of Anchor Bank. “We could not have asked for a better strategic partner than Washington Federal as we continue to work together towards a successful outcome.”