Columbia Banking to Buy West Coast Bancorp for $506M

Columbia Banking System (COLB) has agreed to buy West Coast Bancorp (WCBO).

The acquisition, valued at about $506 million, will create a community bank in the Pacific Northwest with more than $7 billion in assets.

West Coast shareholders can receive a combination of cash and stock for each West Coast share they own. Columbia's offer includes $264.5 million in cash and roughly 12.8 million shares of its common stock.

Based on the companies' closing stock prices Tuesday, the deal would be valued at $23.10 a share, or a 14% premium for West Coast shareholders. About 22% of West Coast's shareholders have already approved the deal.

Columbia, a $4.8 billion-asset company in Tacoma, Wash., has acquired seven banks in the past five years, many of them failed institutions, while growing from 33 to 102 branches over that time. The $2.4 billion-asset West Coast in Lake Oswego, Ore., has branches in Oregon and Washington.

"We are very pleased that West Coast has agreed to join and grow with Columbia," Melanie Dressel, Columbia's president and chief executive, said in a press release. "On a combined basis, we will have extensive coverage throughout Washington and Oregon."

Robert Sznewajs, the president and chief executive at West Coast, will retire when the deal closes in the first quarter of 2013.

Columbia expects the acquisition to immediately add to its earnings. The company will cut a quarter of the operating expenses at West Coast, with half of those cuts planned for next year.