Columbia Banking System in Tacoma, Wash., landed the first sizeable deal of the New Year with an agreement to buy Pacific Continental in Eugene, Ore.

The $9.6 billion-asset Columbia said in a press release Monday that it will pay roughly $644.1 million, or $27.85 a share, for the $2.5 billion-asset Pacific. The combined company would have more than 150 branches in Washington, Oregon and Idaho. The cash-and-stock deal is expected to close by mid-2017.

As one of the few women leading a community bank, Dressel spoke frequently about her experience in banking and the opportunity women have to succeed in the male-dominated industry.
"We see this as an exciting opportunity for both companies, our shareholders and our respective teams of bankers," said Melanie Dressel, Columbia's president and CEO.

"We are delighted that Pacific Continental has agreed to join with Columbia, strengthening and growing our position as the premier Northwest-focused regional community bank," Melanie Dressel, Columbia's president and CEO, said in the release. "We see this as an exciting opportunity for both companies, our shareholders and our respective teams of bankers."

Columbia was very acquisitive after the financial crisis, scooping up seven banks since early 2010, but had been quiet since buying Intermountain Community Bancorp more than two years ago. Buying Pacific Continental would enhance Columbia's presence in Portland, Ore., and Seattle, Dressel said.

The deal should provide an immediate boost to Columbia's earnings per share with 8% and 10% projected accretion in 2018 and 2019, respectively. It should take the company about four years to earn back any dilution to its tangible book value.

Pacific Continental's shareholders will get about $630 million in Columbia stock. Another $14.6 million in cash will be paid to those who hold options, stock-appreciation rights and restricted-stock units. Pacific Continental shareholders would own about a fifth of Columbia after the deal closes.

The deal will also help Columbia to easily jump over $10 billion in assets, where it will face mandatory stress testing and caps on interchange fees.

Columbia was advised by Keefe, Bruyette & Woods and Sullivan & Cromwell. Pacific Continental was advised by D.A. Davidson and Pillsbury Winthrop Shaw Pittman.

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Jackie Stewart

Jackie Stewart covers community banks and mergers and acquisitions for American Banker.