Columbia Banking System in Tacoma, Wash., has agreed to buy Pacific Premier Bancorp in Irvine, Calif.
The $50 billion-asset Columbia said in a press release that it will pay $2 billion for the $18.1 billion-asset Pacific Premier. The deal, which is expected to close in the second half of this year, priced Pacific Premier at 99% of its tangible book value.
Columbia said the acquisition accelerates its Southern California expansion by 10 years. It also adds $2.6 billion of deposits tied to homeowners’ associations.
The acquisition “truly establishes the leading banking franchise in the Western region,” Clint Stein, Columbia’s president and CEO, said in the release. “It is a natural and strategic fit that strengthens our competitive position in Southern California, enhances our service offerings, and elevates our performance.”
Three Pacific Premier directors, including Steve Gardner, the company’s chairman, president and CEO, will join Columbia’s board.
The deal is expected to be 14% accretive to Columbia’s 2026 earnings per share. It should take three years for Columbia to earn back any dilution to its tangible book value.
Columbia plans to cut about 30% of Pacific Premier’s annual noninterest expenses, or roughly $127 million. The company expects to incur $146 million of merger-related expenses.
Columbia also announced the Umpqua Bank, which it gained from a previous acquisition, will soon change its name to Columbia Bank.
Piper Sandler and Sullivan & Cromwell advised Columbia. Keefe, Bruyette & Woods and Holland & Knight advised Pacific Premier.