Columbia + Umpqua

​​Uniquely structured merger to result in one of the West Coast's largest banks based right here in Oregon.

Pictured are Umpqua Bank's Cort O'Haver and Columbia Bank's Clint Stein.

In October, Tacoma-based Columbia Banking System Inc. and Portland-based Umpqua Holdings Corporation announced
a plan to merge. While the surviving holding company will be Columbia Banking Systems in Tacoma, the combined bank will be Umpqua Bank based in Portland. With roughly $50 billion in assets, $43 billion in deposits and a branch network covering six states, the bank will be the largest in the Pacific Northwest and among the top three on the West Coast. The merger is expected to close mid-year.

Much has been said about the unusual structure of the merger, with the smaller Columbia Banking System serving as the official acquirer; but for the leaders of these two institutions, the deal is a true partnership of equals, combining complimentary cultures and business models.

OBA President and CEO Linda Navarro sat down with Columbia Bank President and CEO Client Stein, who will retain that title in the combined company, and Umpqua Bank CEO Cort O’Haver, who will become the executive chairman, to discuss their thoughts on the merger and its impact on the Pacific Northwest. 

Navarro: What are the greatest strengths of Columbia Bank that you bring to the table in a merger with Umpqua Bank?

Stein: Through the diligence process, we learned that both organizations have strengths that are additive to what the other
bank does. We are now four months into our integration planning and have continued to surface opportunities on a combined basis that enhance what either of us could do individually. We are looking forward to leveraging Columbia’s wealth management, ag banking and small business lending platforms across the combined customer base.

Navarro: What about Umpqua Bank? What are the greatest strengths you bring to the table?
 
O’Haver: Like Columbia and every successful company, our greatest assets can’t be found on a balance sheet. Our reputation for pushing the boundaries of what banking can and should be, and our commitment to investing in people and communities are terrific. The way we’ve stayed true to building deep, accessible and trusted relationships with our customers as we’ve grown significantly over the years will be as important as ever moving forward. More practically, there are aspects of our business that uniquely complement Columbia. We’ve recruited tremendous talent focused on upper-middle market banking and built a very strong portfolio of mid-size companies across our footprint. Our subsidiary Financial Pacific Leasing is a top-notch equipment lender that will have access to a broader customer base, including health care companies and firms in other dynamic industries. On the technology side, we’ve developed operational tools and customer-facing platforms, like Umpqua Go-To, that model our commitment to innovation and empowering human connection in banking and will inform the new investment opportunities in technology our combination creates.
 
Navarro: Cort has mentioned that he started seriously thinking about the cultural compatibility when the two of you connected over the distribution of the $500 one-time payments to unemployed Oregonians in 2020. I guess you made a good impression, although I’m not surprised! Seriously though, what were the factors that led you to believe Umpqua Bank was the right fit for a merger with Columbia Bank?
 
Stein: We have collaborated with Umpqua on various lending and industry issues for over 10 years. Therefore, I knew they had great people. What Cort helped me to understand was how complimentary our business models are. Moreover, strategically we were aligned in that we were looking at identical markets for expansion and aspiring to the same long-term goal of being the premier regional community banking franchise headquartered in the Northwest. We quickly discovered that our corporate values were consistent and our identified stakeholder groups were identical. Once we knew our cultures would align, it was clear to us that the merger was a fit.
 
Navarro: The structure of the deal doesn’t fit in the usual box. Could you comment to the extent possible on the overall structure of the deal? What were some of the drivers in how the merger was designed?

O’Haver: Our two banks are premier and successful financial institutions in the Northwest. We saw tremendous opportunity in the marketplace to join forces, but neither bank had any interest in selling to the other. So, we structured the deal to reflect a true partnership of equals. It’s really as simple as that. We’re combining complementary strengths, resources, people, and creating a bank that’s equal parts Umpqua and Columbia in our corporate structure, board makeup, executive leadership and organizational plan.
 
Navarro: Why do you think this will be a good deal for the customers and communities you serve?
 
Stein: In my prior comments, I mentioned the complementary nature of our business models and the additive benefit of our combined strengths. More simply, our combination provides customers with an enhanced suite of products and services that they can access in more locations or through one of our various digital channels. Today, we both serve many rural communities, and in some cases, we are competing against each other for customers and bankers in the same community. Our combination instantly improves our scale and operating leverage within each community we serve. The improved scale firmly cements our presence and ongoing commitment to the communities we serve today.
 
Navarro: Both Columbia Bank and Umpqua Bank are viewed as successful regional community banks. With the combined bank having assets over $50 billion and growth in its future, will the organization continue to view and brand itself as a community bank?
 
Stein: My roots are in community banking, and I have always believed that how you serve your markets is a better measure of being a community bank than asset size. What has made Umpqua and Columbia successful regional community banks is our people and the commitment they have to the communities where they live and work. Just like the employees at all the other banks headquartered in Oregon, our people are passionate about making their communities prosperous. The only difference is we serve more communities across a broader geography.
 
Navarro: Looking ahead, how do you envision the combined bank serving its customers and communities through technology? In other words, will digital delivery and decisioning channels be a primary focus of the bank?
 
O’Haver: Absolutely. The ability to scale investments in technology is one of the most important benefits our  
customers will experience as a result of our combination. What will differentiate the variety and breadth of tools we’ll be able to offer is the fact that both banks take a very human and relational approach to technology. By that, I mean we believe technology is not just about creating convenience, it’s also about strengthening connections between people --
customers and associates — using digital platforms and tools. The combination of access to sophisticated digital tools plus access to trusted, human expertise has always been the focus of our approach to technology, and our combined size will allow us to make significant investments that deliver for customers on both fronts.
 
Navarro: The regulatory environment for banks only gets more complicated and demanding over time. What are some of the regulatory issues that arise when a bank is over $50 billion that may not have been as prominent for a bank of Columbia’s current size?
 
Stein: It is true that with growth the regulatory environment gets more complicated. Columbia Bank has been under the large bank supervision program for many years. A couple of the biggest differences under the large bank model are that safety and soundness exams are conducted on a continuous monitoring basis, and we are subject to examination by the CFPB. We have actually found it beneficial to have ongoing, near real-time feedback from our regulators as opposed to our previous annual exam cycle.
 
Navarro: Whenever there is a bank merger, there is a lot of talk about culture compatibility. You’ve both talked about this in relation to a Columbia/Umpqua combination. What do you consider the most valuable elements of your current bank’s culture, and how do you keep them alive in a $50+ billion bank?
 
O’Haver: Our commitment to people is far and away the most valuable part of our culture because it informs every other commitment. We’re a bank that really tries to filter every decision we make by whether it strengthens our connections with associates, customers and the communities we support. That truly has been key to our success for nearly 75 years.
It’s why we’ve given our associates more than half-a-million paid volunteer hours to invest in their communities. It’s what enabled us to roll up our sleeves and pivot our entire bank to help 26,000 businesses get financial relief through the federal Paycheck Protection Program. It shapes how we think about using technology and how we structure and empower our local banking teams. Best of all, it’s one of the main reasons we’re thrilled to combine with Columbia, which has just as strong of a commitment to people as we do. Since we announced plans to combine and we’ve begun planning for integration, doing right by people shapes every decision we make.
 
Navarro: Clint, I remember when you started working for Community Bank in Joseph about 25 years ago and were a member of the OBA’s Financial Officers Committee. Do you feel like assuming the CEO role of an Oregon headquartered bank is a bit like returning home? Will you work in Oregon, Washington or both?
 
Stein: In a way, I feel like I never left Oregon. When I joined Columbia in 2005, we had a small presence on the coast that has since grown to 58 locations across Oregon. I haven’t thought about my role in our combined organization as a homecoming of sorts. My focus and excitement have been centered on what we are creating through this merger and the team I have the privilege of leading.
 
Growing up and starting my career in Oregon laid the foundation for who I am as a person. However, as the CEO of Columbia Bank, I care equally about each market we serve. So I guess the answer is both, as well as Idaho and California, and when our merger closes, Nevada and Arizona also.
 
Navarro: What will your new title of Executive Chairman mean in terms of your engagement in running the combined bank and/or holding company?
 
O’Haver: Bringing together banks of our combined size is an enormous undertaking. My primary role will be to work
closely with Clint to ensure the full and final integration of our two banks is as successful and smooth as possible for our associates and our customers.
 
Navarro: What will be the greatest benefit to Oregonians and Oregon businesses of this merger?
 
Stein: I believe the greatest benefit is that we are bringing two Northwest-based companies together to create one of the 30 largest banks in the country. Both banks' success to date has been due in part to Oregonians and Oregon businesses. The Northwest is our home, and going forward we have an opportunity to have an outsized impact on the economic vibrancy of the region. This notion was one of the many compelling reasons for our merger that Cort and I discussed. If either of our two organizations were combining with an institution from the mid-West, mid-Atlantic, or some other part of the U.S., the benefits would be spread across multiple regions, diluting the positive impact to Oregon.