Columbia to make a significant move in Southern California with a $2 billion acquisition of Pacific Premier.
Columbia Bank Acquires Pacific Premier Bank for $2 Billion
Columbia Banking System has announced a strategic all-stock acquisition of Pacific Premier Bank, a deal valued by asset combination rather than disclosed deal price. The acquisition, expected to close around August 31, 2025, will combine Columbia's $50 billion in assets with Pacific Premier's $18 billion, significantly expanding Columbia's footprint in the western U.S. market.
Background
Announced on April 23, 2025, the acquisition has received all required shareholder, stockholder, and regulatory approvals from the Federal Reserve, FDIC, and Oregon regulators by early August 2025. Columbia Bank, formerly Umpqua Bank, will continue under the Columbia Bank brand starting September 1, 2025.
Implications and Potential Benefits
The merger will enhance Columbia's market leadership across the West, enabling deeper penetration and competitive strength in high-growth regions like Southern California. Revenue synergy is expected through the integration of Pacific Premier’s expertise in areas such as homeowners association banking and custodial trust services with Columbia’s treasury and wealth management capabilities.
Projected cost savings of approximately $127 million in pre-tax synergies by 2026 through operational efficiencies and streamlined processes support improved profitability. Enhancements in key financial metrics are forecast, with return on average tangible common equity (ROATCE) expected to rise to 20% and return on average assets (ROAA) to 1.4% by 2026.
The combined franchise aims to create long-term value for customers, communities, and shareholders by leveraging complementary strengths and expanding banking services. Columbia maintains strong capital ratios, enabling sustained dividend payments and share repurchase programs while investing in growth opportunities such as this acquisition.
Key Points
- The acquisition adds approximately $18 billion in assets to Columbia Bank.
- Pacific Premier stockholders will receive 0.9150 of a share of Columbia common stock for every Pacific Premier share they own, equivalent to $20.83 per share based on Columbia's closing stock price.
- After the acquisition, the combined entity would count about $70 billion in assets.
- Three Pacific Premier directors, including the bank's CEO, Steve Gardner, will join Columbia’s board once the transaction closes.
- The acquisition gives Columbia Bank access to Pacific Premier's homeowners association banking and custodial trust verticals.
- For Pacific Premier clients, the transaction unlocks Columbia Bank's treasury management products and wealth management services.
- Pacific Premier stockholders will own approximately 30% of Columbia's outstanding shares after the deal.
- The acquisition continues the momentum in mergers and acquisitions, following the final approvals for Capital One's $35.3 billion purchase of Discover.
- Columbia Bank projects it would earn back its tangible book value dilution within three years.
This acquisition solidifies Columbia Banking System as a regional powerhouse with enhanced scale, diversified product offerings, cost efficiencies, and accelerated market share growth, delivering strategic growth catalysts and long-term value creation for both institutions and their stakeholders.
The strategic all-stock acquisition of Pacific Premier Bank by Columbia Banking System, worth $2 billion in combined assets, will strengthen Columbia's market position in finance and expand its business reach, particularly in the West, by leveraging Pacific Premier's expertise in homeowners association banking and custodial trust services. This move is expected to improve Columbia's financial metrics, such as return on average tangible common equity (ROATCE) rising to 20% and return on average assets (ROAA) to 1.4% by 2026.
