Columbia Banking System in Tacoma, Wash., is merging with Umpqua Holdings in Portland, Ore.
While the $18 billion-asset Columbia is the legal acquirer, shareholders of the $29.2 billion-asset Umpqua will own 62% of the combined company. The deal, estimated to have a value of $5.2 billion, is expected to close in mid-2022.
The merger “brings together two well-respected organizations and talented teams, accelerating our shared strategic objectives to create the leading regional bank headquartered in the West,” Cort O’Haver, Umpqua’s president and CEO, said in a Tuesday press 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,” O’Haver added. “We’ll also be able to strengthen our ongoing investment in our communities and deliver tremendous value for shareholders.
“Umpqua shares our values and relationship-based business model,” Clint Stein, Columbia’s president and CEO, added. “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.”
The companies plan to cut about 12.5% of their combined annual noninterest expenses, or $135 million. They expect to incur $236 million of merger-related expenses, including a $20 million charitable foundation donation.
Columbia agreed in June to buy Bank of Commerce Holdings in Sacramento, Calif., for $266 million in stock.