Columbia Banking System, the holding company of Umpqua Bank, has announced the acquisition of Pacific Premier Bancorp, in an all-stock transaction worth around $2bn.
Pacific Premier Bancorp is the parent company of Pacific Premier Bank.
The deal aims to form a regional banking institution with approximately $70bn in total assets. It positions the combined company as a major financial services provider across key markets in the Western US.
Columbia Banking System president, CEO, and director Clint Stein said: “This combination truly establishes the leading banking franchise in the Western region.
“It is a natural and strategic fit that strengthens our competitive position in Southern California, enhances our service offerings, and elevates our performance.”
Under the terms of the agreement, each Pacific Premier Bancorp shareholder will receive 0.915 shares of Columbia Banking System common stock for every share held.
Based on Columbia Banking System’s closing stock price of $22.77 as of 22 April 2025, the transaction represents $20.83 per Pacific Premier share.
Upon completion, existing Pacific Premier shareholders will hold nearly 30% of the enlarged Columbia Banking System’s outstanding shares.
The boards of directors of both Columbia Banking System and Pacific Premier unanimously approved the merger.
The agreement also outlines that three Pacific Premier board members, including CEO Steve Gardner, will join the board of the merged entity.
The acquisition will significantly strengthen Columbia Banking System’s market presence throughout California, Oregon, and Washington. Post-merger, the entity will hold over $57bn in total deposits, including $21bn in California, $17bn in Oregon, and $16bn in Washington.
Pacific Premier brings with it established verticals in homeowners association banking and custodial trust services. These offerings are set to broaden Columbia Banking System’s financial services suite, complementing its existing capabilities in wealth management and treasury services.
Following the closing of the deal, Pacific Premier’s customers will gain access to Columbia Banking System’s treasury and wealth advisory divisions, enabling wider financial planning and corporate solutions under a unified platform.
Columbia Banking System has confirmed plans to align its brand identity by renaming Umpqua Bank as Columbia Bank later this year. The rebranding is aimed at unifying its service offerings across subsidiaries such as Columbia Wealth Management, Columbia Private Bank, and Columbia Trust Company.
According to Columbia Banking System, the merger will yield mid-teen earnings per share (EPS) accretion, with the tangible book value dilution expected to be recovered within three years, using the crossover method. The transaction will require no external capital infusion and is structured to be capital-efficient.
Operating profitability for the combined bank is forecasted to reach a return on average tangible common equity (ROATCE) of 20% and a return on average assets (ROAA) of 1.4% by 2026, assuming cost savings are fully realised.
The companies estimate about $88m in post-tax annual expense synergies, which are projected to generate around $900m in value creation after accounting for $146m in after-tax transaction expenses.
Gardner said: “We have worked tirelessly for more than two decades to build a strong franchise at Pacific Premier. We are thrilled to have the opportunity to join Columbia, a company whose culture, business model, and credit discipline align with our own.
“The combination of these two companies operating in growing markets provides a great opportunity for our teams to continue to deliver high-quality, relationship-based banking products, services, and expertise to our clients, and to continue to generate long-term value for our stockholders.”
Final closure of the deal is expected in the second half of 2025, subject to regulatory and shareholder approvals.
Piper Sandler & Co. served as Columbia Banking System’s financial adviser, with legal counsel provided by Sullivan & Cromwell. Pacific Premier received financial advice from Keefe, Bruyette & Woods, a Stifel company, while Holland & Knight acted as its legal counsel.
Separately, Columbia Banking System reported net interest income of $425m for the first quarter of 2025 (Q1 2025), a decline of $12m from the previous quarter. The decrease was attributed primarily to reduced accretion income and lower interest earnings, partially mitigated by declining funding costs following federal funds rate cuts in late 2024.
On the other hand, Pacific Premier reported first-quarter 2025 net income of $36m, or $0.37 per diluted share. This marked an increase from $33.9m, or $0.35 per share, in the previous quarter, though a decrease from $47m, or $0.49 per share, recorded in Q1 2024.
