Timberland Bancorp, Inc., parent company of Timberland Bank, has acquired South Sound Bank through a merger agreement.

South Sound Bank was founded in 2000 and has offices in Olympia and Lacey.

Under the agreement, based on 1,213,027 shares of South Sound Bank currently outstanding, South Sound Bank shareholders will receive 904,918 shares of Timberland common stock and $6.9 million in cash.

Timberland has about $1 billion in assets, deposits of $880.4 million and total shareholders’ equity of $117.8 million as of March 31. South Sound Bank is a Washington-state chartered bank with about $186.9 million in assets as of March 31. It is headquartered in Olympia.

“We look forward to welcoming the customers of South Sound Bank to Timberland Bank and working with its employees. This business combination leverages our unique talents and abilities within the Puget Sound market area and strengthens our position in the marketplace,” said Michael Sand, president and chief executive officer of Timberland.

The transaction is expected to close during the fourth calendar quarter of 2018, subject to approval by South Sound Bank shareholders, regulatory approval and customary closing conditions.

Timberland Bancorp has 22 branches in Grays Harbor, Thurston, Pierce, King, Kitsap and Lewis counties. Its main office is in Hoquiam.

South Sound Bank is a community bank with two offices in the South Puget Sound area.