Olympia-based South Sound Bank will be merging with and into Hoquiam-based Timberland Bank, a subsidiary of Timberland Bancorp, according to a joint statement released by the companies.

Per the terms of the merger agreement, and based on 1,213,027 shares of South Sound Bank currently outstanding, South Sound Bank shareholders will receive $6.9 million in cash and 904,918 shares of Timberland Bank stock.

As of March 31, 2018, Timberland Bank’s assets were estimated at approximately $1 billion, with deposits in the amount of $880.4 million and shareholders’ equity in the amount of $117.8 million. As of the same date, South Sound Bank’s assets were estimated at approximately $186.9 million.

“We look forward to welcoming the customers of South Sound Bank to Timberland Bank and working with its employees,” said Michael Sand, president and CEO of Timberland Bank. “This business combination leverages our unique talents and abilities within the Puget Sound market area and strengthens our position in the marketplace.”

The merger is expected to close by the end of 2018 and is subject to the approval of South Sound Bank’s shareholders, the receipts of regulatory approvals, and the fulfillment of certain conditions of closing.