West Coast Bank has four branches in Clark County, while Columbia Bank operates two branches in the county. The merger is part of an intensifying competition in community banking. Earlier this year, Sterling Bank took over operations of Vancouver-based First Independent Bank. Heritage Bank, based in Olympia, recently announced plans to open a regional headquarters in Vancouver, with the intention of purchasing banks in Portland and Clark County.
LAKE OSWEGO, Ore. — Columbia Banking System Inc. said Wednesday it will buy West Coast Bancorp in a $506 million deal that will create a dominant Pacific Northwest bank.
Columbia Banking, based in Tacoma, is the parent company of Columbia State Bank. It operates 101 branches in Oregon and Washington. West Coast, based in Lake Oswego, Ore., is the parent company for West Coast Bank and West Coast Trust Co. It operates 58 branches in Oregon and Washington.
The combined company will have approximately $7.2 billion in assets and will become the largest commercial community bank in the two-state region based on deposits, according to the companies.
Under the terms of the deal, West Coast shareholders will receive a mix of $264.5 million in cash and 12.8 million shares of Columbia stock for their West Coast shares. Based on Columbia’s closing stock price of $18.85 on Tuesday, the companies said shareholders would receive a payment valued at roughly $23.10 per share.
West Coast shares closed at $20.18 Tuesday, giving the offer a premium of 14 percent.
Shares of West Coast jumped nearly 10 percent to $22.14 in afternoon trading. Earlier, the stock hit a 52-week high of $22.75. Columbia Banking’s shares dipped 87 cents, or 4.6 percent, to $17.98.
West Coast shareholders will own approximately 24 percent of the common stock of the combined company.
“West Coast CEO Robert Sznewajs will retire once the companies are integrated, and Hadley Robbins, West Coast’s chief credit officer, will take over as group manager for Oregon of the combined organization. One independent member of West Coast’s current board will join Columbia’s board of directors. The companies did not identify further executive leaders.
The banks expect to complete the deal in the first quarter of 2013 following shareholder and regulatory approval. The boards of both companies have already approved the transaction.
Columbia expects the deal will add to earnings immediately.