TACOMA, Wash.
and SACRAMENTO, Calif., June 23,
2021 /PRNewswire/ -- Columbia Banking System, Inc. (NASDAQ:
COLB, "Columbia"), the holding
company for Columbia State Bank, and Bank of Commerce Holdings
(NASDAQ: BOCH, "Bank of Commerce"), the holding company for Merchants
Bank of Commerce, today announced
the signing of a definitive agreement to merge Bank of Commerce into Columbia in an all-stock transaction valued at
approximately $266.0 million, or
$15.72 per share of Bank of
Commerce common stock based on
Columbia's stock price on
June 23, 2021. This transaction
represents Columbia's entrance
into the California market, and
the combined company will have over 150 branches with $19 billion in assets throughout Washington, Oregon, Idaho
and California.
"We are delighted to welcome Merchants Bank of Commerce clients and employees into the
Columbia Bank family, extending our footprint beyond the Northwest
and into California," said
Clint Stein, Columbia's President and Chief Executive
Officer. "We have tremendous respect for the Merchants Bank of
Commerce franchise and view this
as an opportunity to expand with an organization that aligns with
our long-standing commitment to clients and community. Northern California shares many similarities
with the Northwest in both metropolitan and rural markets, making
expansion into this region a natural extension of our existing
footprint. We appreciate how the management team has grown this
franchise in a profitable manner and are excited to have them join
Columbia to help manage our
California expansion."
This transaction is expected to be accretive to Columbia's earnings with 3% accretion to
earnings per share in 2022 and 4% accretion in 2023, and 0.3%
accretion to tangible book value per share. All locations
will continue operations under the Merchants Bank of Commerce brand
as a division of Columbia Bank following the close of the merger.
Bank of Commerce Chief Executive
Officer Randy Eslick will continue
leadership of the division in the role of President.
"We are pleased to embark on the next chapter for Merchants Bank
of Commerce in partnership with
Columbia. Our companies share a
common set of cultural values that serve as the foundation of our
commitment to our clients and the communities we serve," said
Randy Eslick, President and Chief
Executive Officer of Bank of Commerce and Merchants Bank of Commerce. "We look forward to continuing to
honor those values while offering clients an expansive array of
additional products and solutions as part of the Columbia family. Additionally, I am very
pleased to continue to lead the same teams of exceptional bankers
serving our clients in each of our markets following the close of
the merger, ensuring clients continue to enjoy access to the same
local expertise and relationships."
Under the terms of the merger agreement, Bank of Commerce shareholders are entitled to receive
0.40 of a share of Columbia common
stock for each share of Bank of Commerce's stock subject to certain potential
adjustments. Based on Columbia's
closing stock price on June 23, 2021,
the aggregate merger consideration is valued at $266.0 million, which includes $265.6 million of Columbia common stock to be issued to Bank of
Commerce shareholders and
$0.4 million of cash to be paid to
option holders. The value of the merger consideration will
fluctuate until closing based on the value of Columbia's stock.
The agreement was unanimously approved by the Board of Directors
of each company. At closing, Bank of Commerce shareholders will own approximately
9% of the combined company. Additionally, Columbia plans to pay $500,000 to small businesses throughout
Northern California as part of its
Pass It On Project following the close of the merger. The project
began in the summer of 2020 as an effort to help support businesses
working to recover from statewide stay-at-home orders while
providing additional support for the community. The
transaction is expected to close in the fourth quarter of 2021, and
its completion is contingent upon approval from BOCH's
shareholders, the receipt of other customary regulatory approvals,
and other customary closing conditions.
Columbia was advised in this
transaction by Keefe, Bruyette & Woods, A Stifel Company
as financial advisor and Sullivan & Cromwell LLP as legal
counsel. Bank of Commerce was
advised by Raymond James &
Associates, Inc. as financial advisor, and Miller Nash LLP as legal
counsel.
Conference Call
Columbia and Bank of
Commerce will hold a joint
conference call regarding this announcement on Thursday, June 24, 2021 at 8:00a.m. PT. Interested parties may listen to
this discussion through one of two options:
Option One: Webcast
Join the call through a live-streamed web-based event. If you
choose this option, it is recommended that you listen through your
phone or computer speakers and not dial into the conference number
listed below in option two. Please note, you will not be able to
ask questions through the webcast.
On the day of the conference call, use the link below to access
the webcast:
https://edge.media-server.com/mmc/p/ms6p2ax9
Option Two: Dial-in only
Join the call on the day of the event using the toll-free number:
(833) 301-1160
Conference ID: 2679095
A replay of the call will be accessible beginning Friday, June 25, 2021 using the link below:
https://edge.media-server.com/mmc/p/ms6p2ax9
About Columbia
Headquartered in Tacoma,
Washington, Columbia Banking System, Inc. (NASDAQ: COLB) is
the holding company of Columbia State Bank, a Washington state-chartered full-service
commercial bank with locations throughout Washington, Oregon and Idaho. The bank has been named one of Puget
Sound Business Journal's "Washington's Best Workplaces," more than 10
times and was ranked #1 in Customer Satisfaction with Retail
Banking in the Northwest region by J.D. Power in the 2020 U.S.
Retail Banking Satisfaction Study. Columbia was named the #1 bank in the
Northwest on the Forbes 2020 list of "America's Best Banks" marking
nearly 10 consecutive years on the publication's list of top
financial institutions.
About Bank of Commerce
Bank of Commerce Holdings is a bank holding company
headquartered in Sacramento,
California and is the parent company for Merchants Bank of
Commerce (the "Bank"). The Bank is
an FDIC-insured California banking
corporation providing community banking and financial services in
northern California along the
Interstate 5 corridor from Sacramento to Yreka and in the wine region north of
San Francisco. The Bank was
incorporated as a California
banking corporation on November 25,
1981 and opened for business on October 22, 1982. The Company's common stock is
listed on the NASDAQ Global Market and trades under the symbol
"BOCH".
Forward-Looking Statements
This news release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements include, but are not limited to,
descriptions of Columbia and Bank
of Commerce's management's
beliefs, goals, intentions and expectations regarding future events
and developments such as operating results, growth in loans, the
continued success of Columbia and
Bank of Commerce's style of
banking and the strength of the local economy as well as the
potential effects of the COVID-19 pandemic on Columbia and Bank of Commerce's business, operations, financial
performance and prospects, statements relating to the terms, timing
and closing of the proposed transaction, and other statements that
are not historical facts. The words "will," "believe," "expect,"
"intend," "should," "outlook," "estimate," "forecast," "project,"
"would," and "anticipate" or the negative of these words or words
of similar construction are intended in part to help identify
forward-looking statements, which are subject to numerous
assumptions, risks, and uncertainties that change over time.
Future events are difficult to predict, and the expectations
described above are necessarily subject to risks, assumptions and
uncertainties, many of which are outside our control, that may
cause actual results to differ materially and adversely from those
indicated in such forward-looking statements. In addition to
discussions about risks, assumptions and uncertainties set forth
from time to time in Columbia and
Bank of Commerce's filings with
the Securities and Exchange Commission, available at the U.S.
Securities and Exchange Commission's (the "SEC") website at
www.sec.gov and the Company's website at www.columbiabank.com,
including the "Risk Factors," "Business" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" sections of our annual reports on Form 10-K and
quarterly reports on Form 10-Q (as applicable), factors that may
cause actual results to differ materially from those contemplated
by such forward-looking statements include, among others, the
following:
(i) the possibility that the merger does not close when expected
or at all because required regulatory, shareholder or other
approvals and other conditions to closing are not received or
satisfied on a timely basis or at all or regulatory approvals are
obtained subject to conditions that are not anticipated; (ii)
changes in COLB's stock price before closing, including as a result
of the financial performance of BOCH prior to closing, or more
generally due to broader stock market movements, and the
performance of financial companies and peer group companies; (iii)
the risk that the benefits from the transaction may not be fully
realized when expected or at all or may take longer to realize than
expected, including as a result of changes in general economic and
market conditions, interest and exchange rates, monetary policy,
laws and regulations and their enforcement, and the degree of
competition in the geographic and business areas in which COLB and
BOCH operate; (iv) the ability to promptly and effectively
integrate the businesses of COLB and BOCH within the expected
timeframes or at all; (v) the reaction to the transaction of the
companies' customers, employees and counterparties; (vi) diversion
of management time on merger-related issues from ongoing business
operations and opportunities; (vii) lower than expected revenues,
credit quality deterioration or a reduction in real estate values
or a reduction in net earnings; (viii) the risk that any
announcements relating to the merger could have adverse effects on
the market price of the common stock of either or both parties to
the merger; (ix) certain restrictions during the pendency of the
proposed transaction that may impact the parties' ability to pursue
certain business opportunities or strategic transactions; and (x)
other risks that are described in COLB's and BOCH's public filings
with the Securities and Exchange Commission (the "SEC").
We believe the expectations reflected in our forward-looking
statements are reasonable, based on information available to us on
the date hereof. However, given the described uncertainties and
risks, we cannot guarantee our future performance or results of
operations and you should not place undue reliance on these
forward-looking statements which speak only as of the date hereof.
We undertake no obligation and do not assume any duty to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by the
federal securities laws. The factors noted above and the risks and
uncertainties described in our SEC filings should be considered
when reading any forward-looking statements in this release.
Additional Information
Shareholders are urged to carefully review and consider each of
Columbia's and Bank of
Commerce's public filings with the
SEC, including but not limited to their Annual Reports on Form
10-K, their proxy statements, their Current Reports on Form 8-K and
their Quarterly Reports on Form 10-Q. In connection with the
proposed transaction, Columbia
will file with the SEC a Registration Statement on Form S-4 that
will include a Proxy Statement of Bank of Commerce and a Prospectus of Columbia, as well as other relevant documents
concerning the proposed transaction. Shareholders of Bank of
Commerce are urged to carefully
read the Registration Statement and the Proxy Statement/Prospectus
regarding the transaction in their entirety when they become
available and any other relevant documents filed with the SEC, as
well as any amendments or supplements to those documents, because
they will contain important information. A definitive Proxy
Statement/Prospectus will be sent to the shareholders of Bank of
Commerce seeking any required
shareholder approvals. The Proxy Statement/Prospectus and
other relevant materials (when they become available) filed with
the SEC may be obtained free of charge at the SEC's website at
http://www.sec.gov. Bank of Commerce shareholders are urged to read the
Proxy Statement/Prospectus and the other relevant materials before
voting on the transaction.
Investors will also be able to obtain these documents, free of
charge, from Bank of Commerce by
accessing its website at www.bankofcommerceholdings.com under the
tab "Investor Services" and then under the heading "Corporate
Profile" or from Columbia at
www.columbiabank.com under the tab "About Us" and then under the
heading "Investor Relations." Copies can also be obtained,
free of charge, by directing a written request to Columbia Banking
System, Inc., Attention: Corporate Secretary, 1301 A Street, Suite
800, Tacoma, Washington 98401-2156
or to Bank of Commerce Holdings, Attention: Corporate Secretary 555
Capitol Mall, Suite 1255, Sacramento,
California 95814-4606.
Participants in the Solicitation
Columbia and Bank of
Commerce and Bank of Commerce's directors and executive officers
and certain other persons may be deemed to be participants in the
solicitation of proxies from the shareholders of Bank of
Commerce in connection with the
Merger. Information about the directors and executive officers of
Bank of Commerce and their
ownership of Bank of Commerce Common Stock is set forth in the
proxy statement for Bank of Commerce's 2021 annual meeting of
shareholders, as filed with the SEC on a Schedule 14A on
April 6, 2021. Additional information
regarding the interests of those participants and other persons who
may be deemed participants in the transaction may be obtained by
reading the Proxy Statement/Prospectus regarding the Merger when it
becomes available. Free copies of this document may be obtained as
described in the preceding paragraph.
Contact
Information
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Columbia:
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Clint Stein,
President & Chief Executive Officer
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(253)
593-8304
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Aaron Deer, Chief
Financial Officer
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(253)
305-1966
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Bank of
Commerce:
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Randy Eslick,
President & Chief Executive Officer
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(916)
677-5800
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Jim Sundquist,
Chief Financial Officer
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(916)
677-5825
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SOURCE Columbia Banking System, Inc.