Wells Agrees to Pacific Northwest Bank Acquisition

San Francisco-based Wells Fargo & Co. has agreed to acquire Pacific Northwest Bancorp in a stock swap, the banks said Monday.

Under terms of the agreement, which has been approved by the boards of both companies, shareholders of Seattle-based Pacific Northwest would receive $35 in Wells Fargo stock for each share of Pacific Northwest stock they own.

That would value the deal at about $590 million, based on Pacific Northwest’s 17 million shares outstanding and its Monday closing price of $28.44, down 74 cents, on the Nasdaq Stock Market.

Wells stock closed at $47.56, down 83 cents, in New York Stock Exchange trading. The proposed merger, which must be approved by regulators and Pacific Northwest shareholders, was announced after the markets closed.

Pacific Northwest, parent of Pacific Northwest Bank, has 53 banking locations in Washington and five in Oregon and almost $3.1 billion in assets. That compares with $370 billion in assets for Wells, the largest banking company based in California and second only to Bank of America Corp. in operations in the state.

If the merger is completed, Patrick Fahey, chairman and chief executive of Pacific Northwest Bank, would become chairman of regional banking for Wells Fargo in Washington, the banks said.