Combined company will be the third largest regional bank on the West Coast, retaining the Umpqua name.

COURTESY PHOTO: UMPQUA BANK - Umpqua bank went all-in on building branches that make customers feel welcome. Now it is merging with the more commerically minded Columbia Bank.

Columbia State Bank and Umpqua Bank announced Oct. 12 that they will merge. The banks' respective holding companies have entered into a definitive agreement under which the companies will join together in an all-stock combination.

FILE - Umpqua Bank operates a location on Northwest Norman Avenue in Gresham Station. 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, "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. O'Haver will serve as the Executive Chairman and Stein 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 directors from 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.

In a media release the companies touted the benefits of the merger.

"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."

Umpqua shares closed at $19.93 Tuesday, Oct. 12, down 4.69%.

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