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Oct. 12, 2021, 7:18 a.m. EDT

Columbia Banking, Umpqua to merge in a deal valuing Umpqua shares at a 12% premium

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By Tomi Kilgore

Columbia Banking System Inc. /zigman2/quotes/203605401/composite COLB +1.11% and Umpqua Holdings Corp. /zigman2/quotes/203440669/composite UMPQ +1.37% announced Tuesday an all-stock merger deal that would bring together two West Coast regional banks with a combined market capitalization of about $7.7 billion and a combined more than $50 billion in assets. Under terms of the deal, Umpqua shareholders will receive 0.5968 Columbia Banking shares for each Umpqua share they own. Based on Monday's stock closing prices, that implies a value of $23.44 for each Umpqua share, a 12.1% premium. After the deal closes, which is expected to occur in mid-2022, Umpqua shareholders will own 62% of the combined company. Umpqua shares are rallying 5.2% in premarket trading while Columbia Banking shares are still inactive. The deal is expected to deliver about 25% cash earnings-per-share accretion to Umpqua in 2023, and about $1.1 billion in value creation based on "highly achievable" cost synergies. Umpqua shares have rallied 38.1% year to date through Monday and Columbia Banking's stock has gained 9.4%, while SPDR S&P Regional Banking ETF /zigman2/quotes/200108291/composite KRE +0.63% has run up 34.5% and the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.25% has advanced 16.1%.

/zigman2/quotes/203605401/composite
US : U.S.: Nasdaq
$ 30.05
+0.33 +1.11%
Volume: 1.12M
Jan. 27, 2023 4:00p
P/E Ratio
9.39
Dividend Yield
3.99%
Market Cap
$2.36 billion
Rev. per Employee
$329,872
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/zigman2/quotes/203440669/composite
US : U.S.: Nasdaq
$ 17.72
+0.24 +1.37%
Volume: 1.93M
Jan. 27, 2023 4:00p
P/E Ratio
11.45
Dividend Yield
4.74%
Market Cap
$3.85 billion
Rev. per Employee
$337,138
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/zigman2/quotes/200108291/composite
US : U.S.: NYSE Arca
$ 60.94
+0.38 +0.63%
Volume: 6.29M
Jan. 27, 2023 4:00p
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/zigman2/quotes/210599714/realtime
US : S&P US
4,070.56
+10.13 +0.25%
Volume: 0.00
Jan. 27, 2023 5:10p
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