Columbia Banking, Pacific sign merger agreement

Tacoma -  Columbia Banking System, Inc. and Pacific Continental Corporation jointly announced the signing of a definitive agreement to merge Pacific Continental into Columbia in a transaction valued at approximately $644.1 million, or $27.85 per share based on Columbia’s January 9, 2017 stock price.

The combined company will have approximately $12 billion in assets with over 150 branches throughout Washington, Oregon and Idaho. “We are delighted that Pacific Continental has agreed to join with Columbia, strengthening and growing our position as the premier Northwest focused regional community bank,” said Melanie J. Dressel, President and Chief Executive Officer of Columbia. “We admire Pacific Continental and it’s over 40-year commitment to the communities it serves. We see this as an exciting opportunity for both companies, our shareholders, and our respective teams of bankers. This merger exceeds our financial metrics with double digit earnings accretion and a tangible book value earnback of 3.7 years. We look forward to continuing Pacific Continental’s leadership position in the Eugene market while enhancing our presence in the Portland and Seattle markets with the help of Pacific Continental’s key niche practice and market leaders. Additionally, at closing, one current community-based director from Pacific Continental’s Board of Directors will join the Board of Columbia.”

“We are very pleased and excited to partner with Columbia and view it as a wonderful opportunity to continue serving our communities as the premier community bank, offering our clients additional products and services” said Roger Busse, President and Chief Executive Officer of Pacific Continental. “We strongly believe that our corporate values are aligned with Columbia’s which will undoubtedly aid in the integration of our two banks and our clients will continue to work with their existing relationship personnel in all markets. We are partnering with one of the most recognized and awarded community banks in the nation and share a proud heritage of service and community investment.”

Under the terms of the merger agreement, Pacific Continental shareholders are entitled to receive 0.6430 of a share of Columbia common stock for each share of Pacific Continental stock, subject to certain potential adjustments. Based on Columbia’s closing stock price as of January 9, 2017, the aggregate merger consideration is valued at $644.1 million, or $27.85 per share, which includes $629.5 million of stock to be issued to Pacific Continental shareholders and $14.6 million of cash to be issued to the holders of options, stock appreciation rights and restricted stock units. The value of the merger consideration will fluctuate until closing based on the value of Columbia’s stock and subject to a cap/collar. At closing, Pacific Continental shareholders will own approximately 20.0% of the combined company.

The agreement was approved by the Board of Directors of each company. Closing of the transaction is contingent on shareholder approval and receipt of necessary regulatory approvals, along with satisfaction of other customary closing conditions.

The acquisition is expected to close in mid-2017 and to be immediately accretive to Columbia’s earnings per share with 8% and 10% projected accretion in 2018 and 2019, respectively. The tangible book value earnback is approximately 3.7 years.

Published in The Nation, January 22nd, 2017