Columbia Banking System (Columbia) has signed a definitive agreement to acquire Umpqua Holdings (Umpqua) in an all-stock transaction.
Under the agreement, Columbia will offer 0.5958 of its stock for each Umpqua stock held by the shareholder.
Columbia and Umpqua are the parent companies of Columbia State Bank and Umpqua Bank, respectively.
Upon completion of the around $5bn deal, which is subject to customary closing conditions, the merged entity will have over $50bn in assets.
Columbia and Umpqua have banking operations in Washington, California, Oregon, and Idaho. Umpqua has a presence in Nevada as well.
The deal, which is expected to close by mid-2022, will create a leading regional bank in the West Coast, with $43bn in deposits, Umpqua said.
Columbia president and CEO Clint Stein said: “This is a historic partnership that will enhance what both banks are able to do for clients, team members and communities while driving significant value for our shareholders.
“We believe blending the complementary expertise, services and innovative technology of both banks will position the combined organization as the preferred bank for business and families across the West.”
Through the merger, the firms seek to leverage each other’s commercial and retail lending capabilities.
It is also expected to expand their product portfolio and offer a diversified source of revenue with nearly $33bn in loans.
Umpqua president and CEO Cort O’Haver said: “Together, with increased scale, we will have the ability to provide expanded opportunities for associates and serve customers through an even more comprehensive suite of solutions.
“We will also be able to strengthen our ongoing investment in our communities and deliver tremendous value for shareholders. I look forward to partnering with the Columbia team to expand our market share as a combined organization.”
Last month, US Bancorp agreed to acquire MUFG Union Bank’s core regional banking franchise from Mitsubishi UFJ Financial Group (MUFG) for $8bn.