Washington Federal, Inc. (NasdaqGS:WAFD) entered into a definitive merger agreement to acquire Luther Burbank Corporation (NasdaqGS:LBC) for approximately $650 million on November 13, 2022. Under the terms of the agreement, Luther Burbank shareholders will be entitled to receive 0.3353 shares of Washington Federal common stock for each share of Luther Burbank common stock they own. In connection with the closing of the transaction, WAFD will assume the obligations under Luther Burbank's 6.50% senior unsecured term notes and Luther Burbank's fixed/floating rate junior subordinated deferrable interest debentures. Pursuant to the merger agreement, WAFD has agreed that, effective as of the effective time of the proposed transaction, each of the WAFD Board of Directors and the WAFD Bank Board of Directors shall be comprised of 12 members, including two (2) new directors, who shall be recommended by Luther Burbank and be agreeable to WAFD. Luther Burbank must pay WAFD a termination fee in the amount of $26.17 million, in case Luther Burbank terminates the transaction.

The transaction is subject to approval of shareholders of both Luther Burbank and WAFD, regulatory approval, effectiveness of registration statement, listing approval approval for shares on the Nasdaq Global Market, and other customary closing conditions. The transaction was unanimously approved by the Board of Directors of each of Washington Federal and Luther Burbank. As of May 4, 2023, transaction has been approved by the shareholders of WAFD and LBC. The consummation of the Merger remains subject to customary closing conditions, including receipt of required regulatory approvals. The transaction is expected to close in second calendar quarter of 2023. The transaction is accretive to forward-estimated earnings and capital.

Jeffrey D. Haas and Shawn M. Turner of Holland & Knight LLP acted as legal advisor to Luther Burbank. Andrew J. Schultheis of Davis Wright Tremaine LLP acted as legal advisor to WAFD. Broadridge Corporate Issuer Solutions, Inc. acted as exchange agent to WAFD. Piper Sandler & Co. acted as financial advisor and fairness opinion provider to Luther Burbank. Keefe, Bruyette & Woods, Inc. acted as financial advisor to WAFD. Davis Wright Tremaine LLP acted as due diligence provider to WAFD and Holland & Knight LLP acted as due diligence provider to LBC. Keefe, Bruyette & Woods, Inc. (KBW) also acted as fairness opinion provider to Washington Federal. Washington Federal has engaged MacKenzie Partners, Inc. to assist in distributing proxy materials and soliciting proxies and has agreed to pay a fee of $15,000, including out-of-pocket expenses, for its services to be rendered on behalf of Washington Federal. Pursuant to the KBW engagement agreement, Washington Federal has agreed to pay KBW a total cash fee of $3,600,000, $1,000,000 of which became payable with the rendering of KBW's opinion, and the balance of which is contingent upon the consummation of the merger. Piper Sandler's fee will be 1.10% of the aggregate transaction value, which at the date of announcement was approximately $8.94 million. Piper Sandler also received a $500,000 fee from Luther Burbank upon rendering its opinion, which opinion fee will be credited in full towards the transaction fee which will become payable to Piper Sandler upon closing of the merger.