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Columbia Banking Enters California through Acquisition of Bank of Commerce

June 24, 2021, 07:12 AM
Filed Under: Mergers & Acquisitions

Columbia Banking System, Inc., the holding company for Columbia State Bank, and Bank of Commerce Holdings, the holding company for Merchants Bank of Commerce, announced the signing of a definitive agreement to merge Bank of Commerce into Columbia in an all-stock transaction valued at approximately $266.0 million.

 This transaction represents Columbia's entrance into the California market, and the combined company will have over 150 branches with $19 billion in assets throughout Washington, Oregon, Idaho and California.

"We are delighted to welcome Merchants Bank of Commerce clients and employees into the Columbia Bank family, extending our footprint beyond the Northwest and into California," said Clint Stein, Columbia's President and Chief Executive Officer. "We have tremendous respect for the Merchants Bank of Commerce franchise and view this as an opportunity to expand with an organization that aligns with our long-standing commitment to clients and community. Northern California shares many similarities with the Northwest in both metropolitan and rural markets, making expansion into this region a natural extension of our existing footprint. We appreciate how the management team has grown this franchise in a profitable manner and are excited to have them join Columbia to help manage our California expansion."

All locations will continue operations under the Merchants Bank of Commerce brand as a division of Columbia Bank following the close of the merger. Bank of Commerce Chief Executive Officer Randy Eslick will continue leadership of the division in the role of President.

"We are pleased to embark on the next chapter for Merchants Bank of Commerce in partnership with Columbia. Our companies share a common set of cultural values that serve as the foundation of our commitment to our clients and the communities we serve," said Eslick, President and Chief Executive Officer of Bank of Commerce and Merchants Bank of Commerce. "We look forward to continuing to honor those values while offering clients an expansive array of additional products and solutions as part of the Columbia family. Additionally, I am very pleased to continue to lead the same teams of exceptional bankers serving our clients in each of our markets following the close of the merger, ensuring clients continue to enjoy access to the same local expertise and relationships."

Under the terms of the merger agreement, Bank of Commerce shareholders are entitled to receive 0.40 of a share of Columbia common stock for each share of Bank of Commerce's stock subject to certain potential adjustments. Based on Columbia's closing stock price on June 23, 2021, the aggregate merger consideration is valued at $266.0 million.

The agreement was unanimously approved by the Board of Directors of each company.

Columbia was advised in this transaction by Keefe, Bruyette & Woods, A Stifel Company as financial advisor and Sullivan & Cromwell LLP as legal counsel. Bank of Commerce was advised by Raymond James & Associates, Inc. as financial advisor, and Miller Nash LLP as legal counsel.

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