Umpqua and Columbia Bank merge, Umpqua brand wins
Columbia State Bank and Umpqua Bank announced on Oct. 12 that they would merge. The banks' respective holding companies have entered into a definitive agreement under which the companies will join in an all-stock combination.
The Portland Business Journal first reported that Umpqua President and CEO Cort O'Haver said Umpqua Bank would move its headquarters to Lake Oswego, cutting down its presence in Umpqua Bank Plaza at 1 S.W. Columbia St, but retaining "a significant presence" in Portland with its stores or retail branches.
In June, the Portland Business Journal reported that Umpqua had leased 25,000 square feet at Kruse Way in Lake Oswego. Now it is clear the company plans to bail on the blighted section of south downtown. The area, near Front Avenue, the Keller Auditorium and the boarded-up Justice Center, offers little in the way of street activity to incentivize office workers to fill the building.
Umpqua spokesperson Kurt Keith told the Business Tribune that Umpqua would keep its store on street level at 1 S.W. Columbia St., "But in terms of what exactly it looks like, in terms of numbers (in the tower), I think that's still being determined."
The combined holding company will operate under the Columbia Banking System, Inc. name and be headquartered in Tacoma, Washington, while the combined bank will operate under the Umpqua Bank name and be headquartered in the greater Portland area.
All but store staff switched to remote working when the COVID-19 pandemic hit Portland in March 2020. The company has had time to rethink its staffing model and is coming down on the side of being a hybrid, which will mean less of a need for office seats downtown. Heath said Umpqua workers would be spread out over the quadrants of the city to cut commute times.
Heath said that when asked how the staff want to work in the future, "it turns out that many of them really value the flexibility and work-life balance that a remote or hybrid work arrangement provides. And it also really provides a company with a significant opportunity to consolidate our back-office locations and adopt a new model that locates our offices in, you know, various parts of the city where people live and work."
While the headquarters of the main holding company, Columbia Banking System, will be in Tacoma, much of Umpqua's essential staff will be moved to Lake Oswego at some point in 2022.
"Most likely, there'll be a significant leadership presence there (in Kruse Way) and all that goes with that. And I think the other pieces are still being determined," said Heath.
Once the transaction is completed, the combined organization will be a leading West Coast franchise with more than $50 billion in assets.
As part of the merger, Umpqua shareholders will receive 0.5958 of a share of Columbia stock for each Umpqua share they own. As a result, Umpqua shareholders will own approximately 62% and Columbia shareholders will own approximately 38% of the combined company.
Cort O'Haver of Umpqua, said in a 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. We'll also be able to strengthen our ongoing investment in our communities and deliver tremendous value for shareholders."
Both banks claim shared values.
Columbia President and CEO Clint Stein said, "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."
The combined company will be led by 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.
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