Indiana-based Old National Bancorp, the parent of Old National Bank, has agreed to acquire Minnesota-based Anchor Bancorp, the parent of Anchor Bank, in a stock-cash deal valued at around $303.2m.

Anchor reported $2.1bn in total assets, $1.6bn in total loans, $1.7bn in deposits, and $164m in common shareholder’s equity at the end of June 2017. Anchor Bank, which has 18 branches, is based in the Twin Cities as well as serves Mankato, Minnesota.

Old National, which manages $15bn in total assets and has 188 banking centres, said that the transaction will make it the seventh largest deposit holder in the Twin Cities.

As per the agreed terms of the merger deal, shareholders of Anchor will be entitled to receive 1.35 shares of Old National common stock and $2.625 in cash for each share they hold.

The deal already secured the go-ahead from the board of directors of the two companies. It is expected to be completed early in the first quarter of 2018, subject to shareholder and regulatory approvals.

Old National president and CEO Bob Jones said: “This partnership, which marks Old National’s entry into Minnesota, is a natural extension of our franchise. Not only does it position us in strong, vibrant markets with proven growth potential, it also represents a perfect cultural fit and an opportunity to continue the strong legacy of service that has distinguished Anchor Bank for 50 years.”