Banner Corp., the publicly-traded, Walla Walla-based holding company for Banner Bank and Islanders Bank, announced this afternoon that it has agreed to merge into its operations privately-held, Spokane-based AmericanWest Bank in a $702 million transaction.

The transaction, contingent upon Banner Bank shareholder and regulatory approval, is expected to be completed in the second quarter of 2015.

Under the terms of the agreement, AmericanWest equity holders will receive 13.23 million shares of Banner common stock and $130 million in cash.

The combined banks are expected to have more than $9.7 billion in assets, $6.8 billion in loans, and $7.9 billion in deposits. Together, they have 190 branches in five states: Washington, Idaho, Oregon, Utah, and California.

Following the merger, Banner President and CEO Mark J. Grescovich will lead the company, and five representatives from AmericanWest will join the Banner board of directors.

Banner stock is traded on the NASDAQ exchange under the symbol BANR.