Columbia Banking System Inc. in Tacoma is inching closer to its goal of becoming a regional banking company.
In a span of minutes late Wednesday, the $2.6 billion-asset company announced two acquisition deals: one that would beef up its operations in the Puget Sound area, and one that would take it into the Portland, Ore., market for the first time.
The deals for Mountain Bank Holding Co. in Enumclaw, Wash., and Town Center Bancorp in Portland would boost Columbia's assets to nearly $3 billion and give it 11 more branches in Washington and Oregon.
Columbia's last acquisition was in 2004, and before that it had not bought a bank since 1997, but Gary R. Schminkey, its chief financial officer, said in an interview Thursday that his company has never stopped looking.
"We've always told investors that we want to be a Pacific Northwest bank," he said.
Columbia said it would pay $60 million in cash and stock for the $229 million-asset Mountain and $45 million in cash and stock for the $133 million-asset Town Center. The price for Mountain, the parent of Mt. Rainier National Bank, works out to about 2.69 times book value, while the price for Town Center is about 3.5 times book.
Aaron Deer, an analyst with Royal Bank of Canada's RBC Capital Markets in San Francisco, said that the deals are relatively low-risk, because both sellers have a commercial focus and experienced management teams, which Columbia intends to retain.
"They recognize the importance of those relationships in the local markets," Mr. Deer said.
Louis J. Feldman, an analyst in the Portland office of Punk, Ziegel & Co., said that the deals are a bit of a departure for Columbia, which has grown in the last decade largely by identifying bankers it wanted to hire then opening branches in those markets. "Here they are getting several bankers and existing branches, so they don't have the lag time to get a branch profitable."
Mr. Feldman also said he does not foresee any problems with Columbia's integrating two banks at once, because both are relatively small.
"If they were taking on two banks of half to equal size, I would be much more concerned," he said.
Mt. Rainier National has four branches in King County, where Columbia already has eight, and two in Pierce County, where Columbia has 22. Mt. Rainier would be merged into Columbia Bank but would continue to do business as Mt. Rainier.
"There is no overlap to speak of with Mt. Rainier Bank. It puts us in a desirable areas with a quality banking organization that looks somewhat similar to the way we do business," Mr. Schminkey said.
Roy Brooks, Mountain's chairman and CEO, would chair an advisory board, and Steve Moergeli, the CEO of Mt. Rainier Bank, would remain its president. Bruce Bryant, Town Center's president and CEO, said in an interview that he and his staff would also remain with Columbia after the sale is completed. Both deals are expected to close in the third quarter.
Columbia entered Oregon in 2004 by acquiring the $151.4 million-asset Bank of Astoria, and Sara E. Hasan, an analyst with McAdams Wright Ragen Inc. in Seattle, said that it was only a matter of time before Columbia expanded into Portland.
"We have all been waiting for them to enter Portland since they acquired Bank of Astoria," said Ms. Hasan, whose firm represented the 10-year-old Town Center in the deal.
There was some speculation that Columbia might try to build its way into the Portland market, but buying makes more sense, she said.
"I do think it was smart of them to find experienced lenders and an experienced institution in that market," Ms. Hasan said. The Seattle and Portland markets "appear similar," but "there are a lot of local differences."
Town Center's shares soared on news of the deal to close at $20.11 Thursday, up more than 18%. Columbia's rose slightly, to $33.78. No Mountain shares were traded.
