Glacier buying Citizens

The Associated Press

and The Daily Inter Lake

Glacier Bancorp Inc. of Kalispell has reached an agreement to buy Citizens Development Co., a Billings-based bank holding company, and expand its reach into eastern Montana.

The merger will strengthen Glacier Bancorp's presence in the state's top banking markets of Billings, the Flathead Valley and the Bitterroot Valley, company officials said.

Glacier Bancorp operates nine banks with 73 branch locations in Montana, Idaho, Washington and Wyoming.

Citizens Development owns the First Citizens Bank branches in Columbia Falls and Kalispell, along with four locations in Billings plus banks in Laurel, Lewistown, Chinook and Hamilton.

"The Citizens banks are very well run and located in some highly attractive markets," said Mick Blodnick, Glacier Bancorp's president and chief executive. "Simply put, it's a great fit for us."

The companies started negotiating the merger in February. Under the agreement, Glacier will pay Citizens Development investors $77 million. Sixty percent will be in cash and the balance in Glacier common stock. In addition, investors will be paid the bank's earnings until the sale closes in July or August.

Glacier Bancorp said it plans to keep existing management and employees, even next year when the banks are merged.

Initially the branches in the Flathead Valley will continue to operate as First Citizens Banks. In the second quarter next year, the banks will be converted to Glacier Bancorp's data system.

"We couldn't have chosen a better partner than Glacier," said Dean Comes, president of Citizens Development.

Boards of both holding companies have unanimously approved the sale, which now needs regulatory approval. The deal will add more than $300 million to Glacier's core deposits.

At the end of 2005, Glacier reported total assets of $3.7 billion. Citizens Development had assets of $430 million.