Columbia Banking System Inc. /zigman2/quotes/203605401/composite COLB +1.72% and Umpqua Holdings Corp. /zigman2/quotes/203440669/composite UMPQ +0.89% 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 -1.57% has run up 34.5% and the S&P 500 /zigman2/quotes/210599714/realtime SPX -1.32% has advanced 16.1%.