Umpqua Holdings Corp. of Roseburg, Ore., and VRB Bancorp of Medford, Ore., plan to merge in a deal that would create the third-largest bank holding company in the state.

VRB's Valley of the Rogue Bank and South Umpqua Bank would be combined into Umpqua Bank, an Umpqua Holdings' subsidiary with nearly $750 million of assets and 27 branches stretching from Portland to Ashland. Billed as a merger of equals, the deal, announced Tuesday, would be valued at $54 million and is expected to close in the fourth quarter.

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