Dive Brief:
- Tacoma, Washington-based Columbia Banking System, the parent company of Columbia State Bank, has agreed to buy Portland, Oregon-based Umpqua Holdings Corp. — Umpqua Bank's parent — in an all-stock deal set to close in mid-2022, the companies announced Tuesday.
- Although Columbia is the acquirer, Umpqua will be the surviving brand, with the banking unit operating out of Portland and the holding company remaining in Tacoma with its name intact. Under the agreement, Umpqua would hold 62% of the combined company, to Columbia's 38%. Umpqua shareholders would receive 0.5958 shares of Columbia stock for each share owned — roughly $5.2 billion in total, or $23.44 per share based on Monday's closing stock price, American Banker reported.
- The combined company will oversee more than $50 billion in assets and $43 billion in deposits, and operate branches in California, Idaho, Nevada, Oregon and Washington.
Dive Insight:
The deal would combine Umpqua's $30.3 billion in assets and 230-branch footprint with Columbia's $18 billion in assets and 150 brick-and-mortar locations. It's also a mash-up of two serial acquirers. Umpqua has made more than 20 acquisitions since 2000, according to American Banker, and Columbia, almost a dozen during the same time frame.
Under the transaction, Columbia’s president and CEO, Clint Stein, would retain those titles at the combined entity. Umpqua’s chairman and CEO, Cort O’Haver, would become executive chairman.
"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," Stein said in Tuesday's release. "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."
The companies said the combined bank expects to count $100 million in annual cost savings and deliver $1.1 billion in value creation.
"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," O'Haver said.
Umpqua came under fire from regulators in May, when the FDIC fined the bank $1.8 million for the debt- and fee-collection practices of its subsidiary, Financial Pacific Leasing. In addition, Umpqua Bank paid more than $1.6 million in restitution to 16,902 customers who were hit with undisclosed collection fees.
