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.
PST. Interested parties may listen to this discussion through one
of two options:
Option One: WebcastJoin 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 onlyJoin the call on the day of the event
using the toll-free number: (833)
301-1160Conference 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
Columbia:
Clint Stein, President & Chief Executive Officer
(253) 593-8304
Aaron Deer, Chief Financial Officer
(253) 305-1966
Bank of Commerce:
Randy Eslick, President & Chief Executive Officer
(916) 677-5800
Jim Sundquist, Chief Financial Officer
(916) 677-5825
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