Tacoma-based Columbia Banking System Inc., parent company of Columbia State Bank, and Umpqua Holdings Corp., the parent of Umpqua Bank, have agreed to merge in an all-stock combination, the companies announced today.
The Wall Street Journal valued the deal at about $5 billion.
Under terms of the agreement, Umpqua shareholders will receive 0.5958 of a share of Columbia stock for each Umpqua share they own. Upon completion of the transaction, expected in mid-2022 pending regulatory approvals, Umpqua shareholders will own about 62 percent of the combined company and Columbia shareholders will own approximately 38 percent. The combined organization will have more than $50 billion in assets after the deal is done, according to a news release.
Umpqua reported total assets of $30.3 billion through June and Columbia reported $18 billion.
The combined holding company will operate as Columbia Banking System Inc. and be headquartered in Tacoma. The combined bank will operate under the Umpqua Bank name and be headquartered in the Portland area.
Other major subsidiaries and divisions will include Columbia Trust Co., CB Financial Services, and Columbia Private Bank, which will operate under the banner of Columbia Wealth Management, as well as Financial Pacific Leasing Inc. The company will trade under Columbia's ticker symbol (COLB) on the Nasdaq Stock Market, the release said.
The combined company will be the West Coast's leading regional bank with $43 billion in deposits, including $16 billion in Oregon, $15 billion in Washington, $10 billion in California, and $2 billion collectively in Idaho and Nevada, the companies said. The transaction strengthens the combined company's competitive position in high-growth markets, including leading market share in the Seattle, Portland, and Sacramento metro areas, the release added.
Columbia had 70 offices in Washington and Umpqua had 67 through June, according to Federal Deposit Insurance Corp. reports.
Executives from Columbia and Umpqua will lead the combined company. Cort O'Haver, president and CEO of Umpqua, will serve as executive chairman. Clint Stein, president and CEO of Columbia, will serve as CEO.
In the release, Stein said, "This is a historic partnership that will enhance what both banks are able to do for clients, team members, and communities while driving significant value for our shareholders. Importantly, Umpqua shares our values and relationship-based business model. We believe blending the complementary expertise, services and innovative technology of both banks will position the combined organization as the preferred bank for business and families across the West. We look forward to bringing our companies together to better serve all stakeholders."
O'Haver said, "This is an exciting combination that brings together two well-respected organizations and talented teams, accelerating our shared strategic objectives to create the leading regional bank headquartered in the West. Together, with increased scale, we’ll have the ability to provide expanded opportunities for associates and serve customers through an even more comprehensive suite of solutions. We’ll also be able to strengthen our ongoing investment in our communities and deliver tremendous value for shareholders. I look forward to partnering with the Columbia team to expand our market share as a combined organization.”