Columbia Banking System To Acquire Pacific Premier Bancorp In All-stock Transaction; Merger Is Valued At About $2.0B

Author: Benzinga Newsdesk | April 23, 2025 04:06pm

Natural Combination of the Western Region's Leading Business Banks Builds Market Presence and Drives Financial Performance

TACOMA, Wash. and IRVINE, Calif., April 23, 2025 /PRNewswire/ -- Columbia Banking System, Inc. ("Columbia") (NASDAQ:COLB), the parent company of Umpqua Bank, and Pacific Premier Bancorp, Inc. ("Pacific Premier") (Nasdaq: PPBI), the parent company of Pacific Premier Bank, National Association, jointly announced today that they have entered into a definitive merger agreement, pursuant to which Columbia will acquire Pacific Premier in an all-stock transaction. The combined company will have approximately $70 billion in assets and will be a market leader in the largest banking markets within the Western U.S.

Pursuant to the terms of the definitive merger agreement, Pacific Premier stockholders will receive 0.9150 of a share of Columbia common stock for each Pacific Premier share they own. The merger is valued at approximately $2.0 billion, or $20.83 per Pacific Premier share, based on Columbia's closing stock price of $22.77 on April 22, 2025. Following closing, Pacific Premier stockholders will own approximately 30% of Columbia's outstanding shares of common stock. Three Pacific Premier directors, including Steve Gardner and two other current Pacific Premier directors to be mutually agreed by Columbia and Pacific Premier, will join the Columbia board upon the completion of the transaction. The definitive merger agreement was unanimously approved by the Boards of Directors of Columbia and Pacific Premier. 

Strategic Benefits

• A Regional Bank Champion in the West – The acquisition enhances Columbia's position as a leading regional bank throughout the West with over $57 billion in deposits, including nearly $21 billion in deposits in California, $17 billion in Oregon, and $16 billion in Washington.
• Builds Density and Accelerates Expansion – The combined company will benefit from enhanced scale in key market areas. Most notably, the transaction accelerates Columbia's expansion in Southern California by approximately a decade, moving its deposit market share to a top-10 position.
• Expands and Enhances Columbia's Product Set – Pacific Premier's strength in attractive, specialized, and nationwide banking verticals such as Homeowners Association (HOA) Banking and Custodial Trust will enhance Columbia's product offering.
• Enhances Products and Services for Pacific Premier Clients – Pacific Premier clients will gain access to Columbia's robust Treasury Management products and Wealth Management services.
• Supporting Communities and Employees – The combined company will continue to support local communities through volunteerism, charitable giving, and other bank-sponsored programs. Columbia will continue to foster an engaging work environment while providing additional opportunities to develop talent across a larger organization.

Financial Benefits

• Attractive Financial Impact – The transaction is projected to deliver mid-teens EPS accretion to Columbia (assuming fully phased-in cost savings), with tangible book value dilution earned back in three years (crossover method) under conservative transaction modeling assumptions.
• Capital Efficient – The transaction requires no outside capital, which will preserve the value creation for Columbia's and Pacific Premier's stockholders. Columbia's pro forma capital ratios are expected to be nearly unchanged following closing of the transaction.
• Improved Profitability – The combined company will be well positioned to achieve top-quartile profitability and operating metrics versus peers, including an anticipated 20% ROATCE and 1.4% ROAA in 2026, assuming fully phased-in cost savings.
• Value Creation – The transaction is expected to deliver approximately $0.9 billion of value creation based on reasonable and highly achievable cost synergies (expense savings of $88 million after-tax capitalized at 12.5x, net of transaction expenses of $146 million after-tax).

Umpqua Bank Name Change

To ensure brand clarity as Umpqua Bank deepens its expansion throughout the West and to simplify the bank's family of brands, Umpqua Bank plans to change its name to Columbia Bank later this year. The Columbia Bank name aligns with the holding company and a variety of other brands the bank operates today, including Columbia Wealth Management, Columbia Trust Company, Columbia Private Bank, and Columbia Wealth Advisors.

Timing and Expected Closing

The transaction is subject to customary closing conditions, including regulatory approvals and the approval of Columbia's and Pacific Premier's stockholders. The transaction is anticipated to close in the second half of 2025.

 

Posted In: COLB PPBI