Columbia Banking System in Tacoma, Washington, and Umpqua Holdings in Portland, Oregon, are merging in a deal that would create a leading West Coast franchise with roughly $50 billion of assets, $43 billion of deposits and a network of branches stretching from Washington to Nevada.
The smaller Columbia is technically the acquirer, but Umpqua shareholders would own 62% of the combined company, and the banking unit would operate under the Umpqua Bank brand and be based in Portland, the companies said in a news release early Tuesday. The holding company would operate as Columbia Banking System and have its headquarters in Tacoma.
Umpqua’s chairman and CEO, Cort O’Haver, would be executive chairman and Clint Stein, Columbia’s president and CEO, would hold the same titles at the combined company.
"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,” O’Haver said in a news release. “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 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,” Stein said.
The deal would combine two companies that have grown largely through acquisitions over the past two decades.
Umpqua has made more than 20 acquisitions since 2000 and now has roughly $30.3 billion of assets and more than 230 branches in Oregon, Washington, Idaho, California and Nevada. Columbia has rolled up nearly a dozen banks since then and has $18 billion of assets and more than 150 branches in Washington, Oregon and Idaho.
The companies said they expect to reduce annual overhead by up to $100 million. That savings would likely occur largely by combining back-office operations and consolidating overlapping branches.
Under terms of the agreement, Umpqua shareholders would receive 0.598 shares of Columbia stock for each share owned. Based on Monday’s closing prices, the price works out to $23.44 per share, or about $5.2 billion.
Keefe, Bruyette & Woods advised Columbia on the deal, and Sullivan & Cromwell is the bank’s legal counsel. Umpqua was advised by J.P. Morgan Securities, and Wachtell, Lipton, Rosen & Katz is serving as its legal counsel.
The deal is expected to close in mid-2022.
