Northwest Bancorporation Inc., the Spokane-based parent of Inland Northwest Bank, has agreed to acquire Fairfield Financial Holdings Corp., which owns Bank of Fairfield, in a transaction valued at about $20.75 million.

Based in Fairfield, Wash., a small farming town 30 miles south of Spokane, Bank of Fairfield has seven branches in Eastern Washington, including one in downtown Spokane and another in Spokane Valley. As of March 31, the bank had $151.6 million in total assets, $103.1 million in gross loans, and $134 million in total deposits.

Northwest Bancorp said in a press release that the combined bank will have about $600 million in assets.

The transaction is expected to be completed in the fourth quarter. Both the Northwest Bancorp and the Fairfield Financial boards have approved the sale, but it remains contingent upon other conditions, including regulatory approval and raising capital. Northwest Bancorp said it expects to raise capital by offering shares of its common stock to accredited investors through a private offering.

Randall Fewel, president and CEO of INB’s parent, said in a press release that Bank of Fairfield “has been a leader in serving the agricultural community throughout Eastern Washington, and INB is enthusiastic about this opportunity to grow and diversify our customer base. This is the right fit at the right time.”