Columbia Banking System And Umpqua Holdings Corporation Combining To Create The West Coast’s Leading Regional Bank
- A Scaled Organization, Positioned to Win in Some of the Country’s Most Attractive Growth Markets
- Commercial Lending Focus Complemented by Highly Recognized Retail Franchise
- Meaningful Value Creation to Shareholders and Strong Pro Forma Profitability
- Like-minded Institutions with Common Cultural Values
TACOMA, Wash. and PORTLAND, Ore., Oct. 12, 2021 /PRNewswire/ — Columbia Banking System, Inc. (“Columbia”) (Nasdaq: COLB), the parent company of Columbia State Bank, and Umpqua Holdings Corporation (“Umpqua”) (Nasdaq: UMPQ), the parent company of Umpqua Bank, today announced that they have entered into a definitive agreement under which the companies will join together in an all-stock combination.
Under the terms of the agreement, which was unanimously approved by the boards of directors of both companies, Umpqua shareholders will receive 0.5958 of a share of Columbia stock for each Umpqua share they own. Upon completion of the transaction, Umpqua shareholders will own approximately 62% and Columbia shareholders will own approximately 38% of the combined company. Once the transaction is completed, the combined organization will be a leading West Coast franchise with more than $50 billion in assets.
Cort O’Haver, President and CEO of Umpqua, 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.”
Columbia President and CEO Clint 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.”
- A West Coast Franchise Unlike Any Other – The combined company will be the West Coast’s leading regional bank with $43 billion in deposits, including $16 billion of deposits in Oregon, $15 billion in Washington, $10 billion in California and $2 billion collectively in Idaho and Nevada. The transaction strengthens the combined company’s competitive position in high-growth, attractive markets, including leading market share in the Seattle, Portland and Sacramento metro areas.
- Commercial Lending Focus Complemented by Highly-recognized Retail Franchise – Through this combination, Umpqua and Columbia will build on each company’s strong commercial and retail foundations to create an enhanced, more competitive financial institution. The combined bank’s middle market focus will be strengthened by Columbia’s small business expertise and Umpqua’s corporate banking franchise. The combined company’s low-cost core deposit base will provide price stability in rising rate environments, and its differentiated technology infrastructure will support a larger institution built for commercial and retail customers.
- Potential to Unlock Meaningful Growth through Business Diversification and a Larger Balance Sheet – The combined organization will offer a more comprehensive suite of products and services for commercial, consumer and small business customers, including specialized lending products, treasury management, mortgage banking and wealth management solutions. This transaction will result in a more diversified revenue mix with approximately $33 billion in loans and strong fee-based income sources.
- Strong Technology Foundation Combined with Larger Scale Enhances Competitive Position and Customer Offerings – The combination will create additional capacity for strategic technology investments to deliver an enhanced offering for customers. Together, Columbia and Umpqua will leverage their existing investments and capabilities to create new customer experiences and accelerate growth.
- Strong Governance, Proven Leadership – The combined management team has significant experience in leading and scaling institutions. With roots in many of the same markets, the companies share a deep commitment to the employees, customers and communities they serve. Columbia and Umpqua are dedicated to blending the talent and strong, relationship-based cultures of both companies.
- Supporting Communities and Employees – Both companies’ longstanding commitments to serve their communities will remain central to the combined organization. Columbia and Umpqua will together contribute $20 million to the charitable foundation of the combined company following the close of the transaction.
- Significant Earnings Accretion – The transaction is projected to deliver approximately 25% cash EPS accretion and 23% GAAP EPS accretion to Columbia, and approximately 11% cash EPS accretion and 8% GAAP EPS accretion to Umpqua in 2023, assuming fully phased-in cost savings.
- Value Creation – The transaction is expected to deliver approximately $1.1 billion of value creation based on reasonable and highly achievable cost synergies1.
- Improved Profitability – The combined company will be well positioned to achieve improved profitability and operating metrics, including anticipated 15% ROATCE and 1.3% ROAA in 2023, assuming fully phased-in cost savings.
Governance, Leadership Team and Headquarters
The combined company will be led by an executive team composed of leaders from both Columbia and Umpqua. Cort O’Haver, President and CEO of Umpqua, will serve as the Executive Chairman and Clint Stein, President and CEO of Columbia, will serve as CEO. Chris Merrywell will serve as President of Consumer Banking, Tory Nixon as President of Commercial Banking, and Ron Farnsworth as CFO. Upon closing of the transaction, the combined company’s board will consist of seven directions from each of Columbia and Umpqua with Craig Eerkes, the current Chairman of Columbia, serving as the Lead Independent Director.
The combined holding company will operate under the Columbia Banking System, Inc. name and will be headquartered in Tacoma, Washington. The combined bank will operate under the Umpqua Bank name and will be headquartered in the greater Portland metropolitan area. Other major subsidiaries and divisions will include Columbia Trust Company, 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.
Timing and Approvals
The transaction is expected to close in mid-2022, subject to satisfaction of customary closing conditions, including receipt of regulatory approvals and approvals from each company’s shareholders.
Keefe, Bruyette & Woods, A Stifel Company, is serving as financial advisor and Sullivan & Cromwell LLP is serving as legal counsel to Columbia. J.P. Morgan Securities LLC is serving as financial advisor and Wachtell, Lipton, Rosen & Katz is serving as legal counsel to Umpqua.
Joint Conference Call Details
Columbia and Umpqua will hold a joint conference call to discuss the transaction at 5:30 a.m. Pacific Time today. To listen to the live call, please dial 1-866-440-7407 and enter the participant code 2964686. Presentation slides will be available on the Columbia website (https://www.columbiabank.com/) and the Umpqua website (https://www.umpquabank.com/investor-relations/). A replay of the call will be available until November 12, 2021 by dialing 1-855-859-2056. The confirmation code for the replay is 2964686.
Headquartered in Tacoma, Washington, Columbia Banking System, Inc. (NASDAQ: COLB) is the holding company of Columbia Bank, a Washington state-chartered full-service commercial bank with locations throughout Washington, Oregon, Idaho and California. The bank has been named one of Puget Sound Business Journal’s “Washington’s Best Workplaces,” more than 10 times and was ranked #1 in Customer Satisfaction with Retail Banking in the Northwest region by J.D. Power in the 2020 U.S. Retail Banking Satisfaction Study. Columbia was named the #1 bank in the Northwest on the Forbes 2020 list of “America’s Best Banks” marking nearly 10 consecutive years on the publication’s list of top financial institutions.
Umpqua Holdings Corporation (NASDAQ: UMPQ) is the parent company of Umpqua Bank, an Oregon-based community bank recognized for its entrepreneurial approach, innovative customer experience, and distinctive banking solutions. Umpqua Bank has locations across Oregon, Washington, California, Idaho and Nevada. Umpqua Holdings Corporation is headquartered in Portland, Oregon. For more information, visit umpquabank.com.
Umpqua Bank has been recognized for its innovative customer experience and banking strategy by national publications including The Wall Street Journal, The New York Times, BusinessWeek, Fast Company and CNBC. The company has been recognized for eight years in a row on FORTUNE magazine’s list of the country’s “100 Best Companies to Work For,” and was recently named by The Portland Business Journal the Most Admired Financial Services Company in Oregon for the sixteenth consecutive year. In addition to its retail banking presence, Umpqua Bank also owns Financial Pacific Leasing, Inc., a nationally recognized commercial finance company that provides equipment leases to businesses.