Yahoo Finance Columbia (COLB) to Sell Washington Branches to 1st Security
Columbia Banking System, Inc. COLB, the parent company of Columbia Bank, has entered a purchase and assumption agreement to sell seven branches in Washington and Oregon to 1st Security Bank of Washington, the wholly-owned subsidiary of FS Bancorp, Inc. The sale is expected to be completed in the first quarter of 2023, subject to regulatory approvals and other closing conditions.
The agreement includes $510 million in deposits and $76 million in loans, as well as owned real estate and fixed assets associated with the branches. All employees will be retained by 1st Security and all branches will remain in operation after the sale.
Notably, the divestiture is taking place to satisfy commitments to the Department of Justice in relation to COLB’s pending merger agreement with Umpqua Holdings Corporation UMPQ.
In October 2021, COLB and Umpqua entered an all-stock merger deal. At the time of the deal announcement, it was agreed that Umpqua shareholders would get 0.5958 shares of Columbia stock for each of their shares held. Per the terms of the deal, once the transaction is complete, Umpqua shareholders will own 62% and Columbia shareholders will own 38% of the combined company.
The merger will create an organization, which will be a leading West Coast franchise, with more than $50 billion in assets. Also, the merger is expected to deliver 25% cash earnings accretion and 23% GAAP accretion to Columbia, and 11% cash earnings accretion and 8% GAAP accretion to Umpqua in 2023, assuming fully phased-in cost savings.
While announcing the branch divestitures, Columbia’s president and CEO, Clint Stein, stated, “We are pleased to find a partner for these branches with a reputation for service and community support and will work to provide a seamless transition for our customers and employees. This agreement satisfies a key DOJ requirement to proceed toward closing our transformational merger with Umpqua.”
Joe Adams, the CEO of 1st Security, said, “We are excited about the proposed acquisition of these branches and the expansion of our franchise into the Oregon market. As experienced acquirers, we are committed to providing our new customers and employees with the best possible transition from Columbia and look forward to offering our personalized banking services to these communities for years to come.”
In the past year, shares of COLB have lost 6.5% compared with a decline of 37.2% of the industry.
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Currently, COLB carries a Zacks Rank #2 (Buy).
Another stock from the same industry worth having a look at is First Financial Northwest FFNW. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 8.4% upward over the past 30 days. Over the past two years, shares of FFNW have gained 34.7%. Currently, FFNW sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Columbia Banking System, Inc. (COLB) : Free Stock Analysis Report
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