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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 +1.72% 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%.

/zigman2/quotes/203605401/composite
US : U.S.: Nasdaq
$ 35.50
+0.60 +1.72%
Volume: 173,316
Jan. 21, 2022 10:22a
P/E Ratio
12.74
Dividend Yield
3.37%
Market Cap
$2.74 billion
Rev. per Employee
$288,139
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/zigman2/quotes/203440669/composite
US : U.S.: Nasdaq
$ 20.31
+0.18 +0.89%
Volume: 229,995
Jan. 21, 2022 10:23a
P/E Ratio
10.64
Dividend Yield
4.13%
Market Cap
$4.36 billion
Rev. per Employee
$336,317
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/zigman2/quotes/200108291/composite
US : U.S.: NYSE Arca
$ 71.89
-1.15 -1.57%
Volume: 3.13M
Jan. 21, 2022 10:23a
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/zigman2/quotes/210599714/realtime
US : S&P US
4,423.50
-59.23 -1.32%
Volume: 661.34M
Jan. 21, 2022 10:23a
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