Western Alliance Bancorporation and Western Liberty Bancorp have inked a definitive agreement following to which the former will acquire the latter in a $55m transaction.

Pursuant to clauses of the deal, instantly after the completion of the takeover, Western Liberty’s principal operating subsidiary, Service1st Bank of Nevada, will merge with and into Bank of Nevada, a wholly owned subsidiary of Western Alliance Bancorporation.

Under the agreement, each shareholder of Western Liberty Bancorp may opt to receive either $4.02 in cash or 0.4341 of a share of Western Alliance Bancorporation for each Western Liberty share owned (based on existing shares of Western Liberty stock outstanding as of the date hereof and assuming the conversion of outstanding restricted stock units), subject to certain collar and proration provisions.

The transaction is worth of nearly $55m, while the exchange is belived to be tax free; to the extent shareholders receive shares of Western Alliance Bancorporation.

Western Alliance Bancorporation chairman and chief executive officer Robert Sarver said, "This transaction further strengthens our capital position, increases our core deposits, and enables us to further leverage our existing infrastructure in Las Vegas. We expect the transaction to be immediately accretive to our tangible book value."

Bank of Nevada chief executive officer Bruce Hendricks said, "With significant customer overlap between Bank of Nevada and Service1st Bank, we anticipate quickly integrating the two institutions, giving added convenience and services to clients of Service1st."

The deal is anticipated to close in the fourth quarter of 2012, after satisfying certain terms and conditions approval from regulatory authorities.

Western Alliance Bancorporation is a bank holding company of Bank of Nevada, Western Alliance Bank doing business as Alliance Bank of Arizona and First Independent Bank, Torrey Pines Bank, and Shine Investment Advisory Services.