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Yahoo
01-05-2025
- Business
- Yahoo
The ‘joiner' era of bank M&A has begun
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. For months, the Capital One-Discover deal had been spotlighted as the bellwether for how bank mergers and acquisitions could go under a second Trump administration. Not just the will-they-or-won't-they (as in, would regulators sign off on the combination?), but how long will transactions sit in evaluation? Which potential stumbling blocks would be eased or de-emphasized? In the two weeks since the deal received green lights from the Federal Reserve and Office of the Comptroller of the Currency, it's fair to say bank M&A is off to the races. Perhaps the first clue that the bank-mashup floodgates had opened came last Wednesday, when Columbia Banking System said it would buy Pacific Premier Bank in an all-stock $2 billion deal that would cement the Pacific Northwest juggernaut deeper into Southern California. But the dominoes continued. The next day, Boston-based Eastern Bank announced it would merge with in-state competitor HarborOne in a $490 million cash-and-stock deal. A day later, Cadence Bank said it would buy Industry Bancshares, the beleaguered holding company that owns six community banks in Texas, for between $20 million and $60 million in cash. And that's just banks that hold $25 billion or more in assets. Smaller deals in Pennsylvania and Tennessee, for example, have followed – as has a partial-bank transaction in which St. Louis-based Enterprise Bank & Trust will acquire 10 locations in Arizona and two in Kansas from Montana-based First Interstate Bank. That M&A is ramping up shouldn't be a surprise. Christopher Olsen, managing partner and co-founder of investment-banking firm Olsen Palmer, told Banking Dive last month that smaller banks, in particular, have felt consolidation pressure for several years, adding that Trump's reelection could act as 'sort of the powder keg' to drive that trend. Some of the participants, on the other hand, may be a surprise. It would be understandable if Columbia had been trigger-shy on acquisitions. Its $5.2 billion merger with Umpqua Bank, announced in October 2021, took more than 16 months to close – and did so less than two weeks before Silvergate, Signature and Silicon Valley Bank failed. Columbia CEO Clint Stein, in a call last week addressing the Pacific Premier deal, pointed to a "seismic shift in the operating or rate environment" during the Umpqua integration, according to American Banker. Stein, however, characterized today's M&A environment as more 'conducive' by comparison. The roughly $50 billion-asset Columbia said it expects the Pacific Premier deal to close in the second half of this year – meaning it estimates the transaction will await regulatory approval only half as long as the Umpqua deal did. "There's a body of evidence that continues to build on deals getting approved quicker for banks either our size or to create banks that are our size," Stein said last week. "The other thing is that we had fairly robust pre-flight conversations with the regulators, both at the regional office level as well as in D.C." A shorter approval timeline would no doubt appease some regulators. Federal Deposit Insurance Corp. Acting Chair Travis Hill put more timely bank merger approvals among his 15 priorities beginning on his first day leading the agency. Since Trump regained office, the timeline for several deals has shortened. Evansville, Indiana-based Old National disclosed last week that it expects its $1.4 billion acquisition of Bremer Bank will close May 1. That's likely a quicker turnaround than the more vague 'mid-2025' time frame the bank gave when the transaction was announced. In any case, it would mean the tie-up would have spent barely five months in evaluation. By comparison, Mississippi-based Renasant's acquisition of The First Bancshares – a similar value at $1.2 billion – took eight months to approve. UMB's $2 billion acquisition of Heartland Financial took nine. Old National is not alone in its truncated timeline. When Busey Bank announced in August (before Trump's reelection) that it planned to buy CrossFirst, it initially gave itself a 10-month timeline. The deal closed in six. Likewise, Atlantic Union Bank gave itself a year to close its $1.6 billion acquisition of Sandy Spring. It wrapped in just over five months. Sometimes longer timelines can't be helped. Columbia's Umpqua deal, for example, saw an 11-month Justice Department investigation. The Capital One-Discover deal awaited regulator approval for 14 months likely out of caution for its size ($35.3 billion) and potential impact. Mergers and acquisitions still likely will face pitfalls. U.S. bank stocks saw their worst quarterly loss since in two years over 2025's first 90 days. And if bank valuations indeed 'grease the skids' of M&A, as Olsen put it, deals with a cash component may prove an easier sell. Sign in to access your portfolio
Yahoo
25-04-2025
- Business
- Yahoo
Columbia to expand in SoCal with $2B acquisition of Pacific Premier
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. Tacoma, Washington-based Columbia Banking System amplified its push into Southern California on Wednesday, announcing it would acquire Irvine-based Pacific Premier Bank in a $2 billion, all-stock transaction that it expects to close in the second half of this year. The deal marks Columbia's second multibillion-dollar acquisition since October 2021, when it agreed to purchase Oregon-based Umpqua Bank for $5.2 billion. Though Columbia was the acquirer, the company's retail bank network uses the Umpqua brand. Columbia is walking that back in Wednesday's deal, though. The company plans to tag its network as Columbia Bank later this year 'to ensure brand clarity as Umpqua Bank deepens its expansion throughout the West,' it said. The name change would align the retail brand with the holding company, as well as its wealth management and advisory arm, its private bank and its trust team, Columbia said. Acquiring Pacific Premier would add roughly $18 billion in assets to Columbia and accelerate the bank's expansion in Southern California 'by approximately a decade,' said the lender, which would crack the top 10 in deposit market share in the area. The combined entity would count about $70 billion in assets after the transaction closes, the banks said. The deal would also avail Columbia clients to Pacific Premier's homeowners association banking and custodial trust verticals, the banks noted. Pacific Premier clients, by the same measure, would gain access to Columbia's treasury management products and wealth management services. "This combination truly establishes the leading banking franchise in the Western region,' Columbia CEO Clint Stein said Wednesday in a statement. 'It is a natural and strategic fit that strengthens our competitive position in Southern California, enhances our service offerings, and elevates our performance.' Columbia said it expects to gain roughly $900 million in value creation after $146 million in transaction expenses. The bank projected it would earn back its tangible book value dilution within three years. As part of the deal, Pacific Premier stockholders will receive 0.9150 of a share of Columbia common stock for every Pacific Premier share they own. That comes out to $20.83 per share, based on Columbia's closing stock price of $22.77 from Tuesday. Three Pacific Premier directors, including the bank's CEO, Steve Gardner, will join Columbia's board once the transaction closes. Pacific Premier stockholders will own roughly 30% of Columbia's outstanding shares from that point, the banks said. The deal's $2 billion value easily makes it the most valuable banking tie-up of 2025 so far – matching the richest deals completed in 2024 (UMB's $2 billion acquisition of Heartland Financial, and SouthState's $2 billion purchase of Independent Bank). It also continues the momentum in mergers and acquisitions after the Federal Reserve and Office of the Comptroller of the Currency last week gave the final approvals necessary to close Capital One's $35.3 billion purchase of Discover. 'We are thrilled to have the opportunity to join Columbia, a company whose culture, business model, and credit discipline align with our own,' Gardner said. '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.' Recommended Reading WaFd to buy Luther Burbank in $654M deal to enter California Sign in to access your portfolio
Los Angeles Times
25-04-2025
- Business
- Los Angeles Times
Pacific Premier Bancorp Acquired by Umpqua Bank in $2 Billion Deal
Columbia Banking System Inc. announced plans to acquire Irvine-based Pacific Premier Bancorp Inc. in a transaction value of approximately $2 billion. Columbia Banking System will merge the bank with its subsidiary Umpqua Bank and plans to rebrand as Columbia Bank later in the year. The transaction is expected to close in the second half of 2025. '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,' said Steve Gardner, chairman, chief executive and president of Pacific Premier Bank, in a statement. The merger valued Pacific Premier at $20.83 per share based on Columbia's closing stock price of $22.77 on April 22. Following the completion of the acquisition, Pacific Premier shareholders will own approximately 30% of Columbia's outstanding shares of common stock. The combined company will have $70 billion in assets and operate 350 branches across the Western United States. Three Pacific Premier directors, including Gardner, will join the Columbia board upon the completion of the transaction. 'It is a natural and strategic fit that strengthens our competitive position in Southern California, enhances our service offerings and elevates our performance,' said Clint Stein, chief executive and president of Columbia, in a statement. Piper Sandler & Co. acted as financial advisor to Columbia. Sullivan & Cromwell LLP acted as legal advisor to Columbia. Pacific Premier Bancorp was advised by Keefe, Bruyette & Woods Inc. as financial advisor and Holland & Knight LLP as legal advisor. Information for this article was sourced from Umpqua Bank.
Yahoo
25-04-2025
- Business
- Yahoo
Columbia Bank announces latest acquisition, set to expand California interests
Tacoma-based Columbia Banking System on Wednesday announced the planned acquisition of a California-based bank. Columbia and Irvine, California-based Pacific Premier Bancorp announced entering a definitive merger agreement. Under the terms, Columbia will acquire Pacific Premier in an all-stock transaction. The combined institution will have approximately $70 billion in assets, according to a joint news release. The deal faces regulatory approvals and the approval of Columbia's and Pacific Premier's stockholders. It is anticipated to close in the second half of this year. 'This combination truly establishes the leading banking franchise in the Western region,' said Clint Stein, president, CEO, and director of Columbia, in a statement. 'It is a natural and strategic fit that strengthens our competitive position in Southern California, enhances our service offerings, and elevates our performance.' Pacific Premier chairman, president and CEO Steve 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.' Under the merger's terms, Pacific Premier stockholders would receive 0.9150 of a share of Columbia common stock for each Pacific Premier share they own, according to the release. The merger is valued at approximately $2 billion, or $20.83 per Pacific Premier share, based on Columbia's closing stock price of $22.77 on April 22, the release noted. After closing, Pacific Premier stockholders will own approximately 30% of Columbia's outstanding shares of common stock. Three Pacific Premier directors, including Steve Gardner and two current Pacific Premier directors to be approved by Columbia and Pacific Premier, will join the Columbia board upon merger completion. The agreement announced Wednesday was unanimously approved by the Boards of Directors of Columbia and Pacific Premier. While Pacific Premier customers would gain access to Columbia's Treasury Management products and Wealth Management services, Columbia customers would gain access to Pacific Premier's own specialized products, including Homeowners Association (HOA) Banking and Custodial Trust. Columbia is the parent company of Umpqua Bank. The two announced their own merger in 2021 and completed in 2023. Wednesday's release noted that Umpqua Bank plans to change its name to Columbia Bank later this year, 'to ensure brand clarity as Umpqua Bank deepens its expansion throughout the West and to simplify the bank's family of brands.' This means Columbia branches in the region will be switching back to that name, following previous rebranding as Umpqua. The release also noted that the merger with Premier, 'accelerates Columbia's expansion in Southern California by approximately a decade, moving its deposit market share to a top-10 position.'
Reuters
25-04-2025
- Business
- Reuters
Columbia Banking to acquire Pacific Premier in a $2 billion deal
April 23 (Reuters) - Columbia Banking System (COLB.O), opens new tab will acquire Pacific Premier Bancorp (PPBI.O), opens new tab in an all-stock deal for about $2 billion, the companies said on Wednesday, adding to the growing consolidation in the industry amid market uncertainty. U.S. regional bank mergers have seen a notable rise in recent times as lenders are looking to strengthen their balance sheets and to compete better against larger rivals, as the market trudges through President Donald Trump's fluctuating tariff decisions. Lower consumer confidence due to these tariffs may curb spending and dampen loan demand. Pacific Premier shareholders will receive 0.9150 shares of Columbia for each stock held, valuing the bank at $20.83 each, representing a 3.6% premium to the closing price on Wednesday. Following the merger's completion, expected in the second half of 2025, Pacific Premier stockholders will own about 30% of Columbia's outstanding shares of common stock. "We expect the transaction to have minimal impact on Columbia's capital ratios, and we do not need to raise additional capital to support the deal," Clint Stein, president and CEO of Columbia Banking, said in a conference call. Shares of Columbia Banking fell 2.2% while those of Pacific Premier rose 5% after the bell. The acquisition will help Columbia Banking expand its presence in the Western U.S. with over $57 billion in deposits and is projected to deliver mid-teens EPS accretion to the bank. "This combination truly establishes the leading banking franchise in the Western region," Stein said in a statement. The combined company will have about $70 billion in assets. Three directors of Pacific Premier, including President and CEO Steve Gardner, will join the Columbia board once the merger is complete. Piper Sandler & Co acted as the financial adviser to Columbia, and Keefe, Bruyette & Woods, a Stifel company, was Pacific Premier's adviser. Umpqua Bank, a subsidiary of Columbia Banking System, plans to change its name to Columbia Bank later in the year for brand clarity.
