Dive Brief:

• The Federal Reserve on Tuesday approved the proposed $5.2 billion merger between Tacoma, Washington-based Columbia Banking System and Portland, Oregon-based Umpqua Holdings.
• The move marks the central bank’s third approval in the past three weeks of a deal worth $100 million or more.
• Although the Fed is usually the last regulator to sign off on banking combinations, the Federal Deposit Insurance Corp. (FDIC), in this case, has yet to give the tie-up its blessing.

Dive Insight:

The approval comes more than a year after the banks — both serial acquirers — proposed combining. Columbia CEO Clint Stein, on a third-quarter earnings call last week, said "the delay in the close has enabled us to get the social and cultural elements more defined and in front of folks,” according to American Banker.

The tie-up, announced last October, will bring Umpqua’s $30.1 billion in assets under Columbia’s umbrella — and give Columbia a presence in Nevada for the first time. Among the deal’s quirks, the smaller of the banks — $20.4 billion-asset Columbia — is the acquirer, but the combined entity will carry the Umpqua name after close.

The Fed found the combination would not have a “significantly adverse effect” in the 28 banking markets it examined. Columbia, however, will have to divest 10 branches in certain areas, according to a Justice Department order. 

Columbia has indicated it would close or consolidate 49 branches as part of the deal, the Fed reported. That would still give the combined entity well over 300 brick-and-mortar locations across five states.

The Fed this month approved two other deals worth more than $100 million — Pittsburgh-based FNB Corp.’s $117 million acquisition of North Carolina-based UB Bancorp, and U.S. Bank’s long-awaited $8 billion acquisition of MUFG Union Bank.

As Columbia and Umpqua waited for the regulatory green light, the timeline of expectations extended, too. Executives expected the deal to close in mid-2022 when it was first announced. That estimate changed to the third quarter by July. Systems conversion between the banks is on track for the first quarter of 2023, Columbia executives said last week, according to American Banker.

“We believe blending the complementary expertise, services and innovative technology of both banks will position the combined organization as the preferred bank for business and families across the West,” Stein said in October 2021.

Stein will remain the combined entity’s CEO. Umpqua CEO Cort O’Haver will serve as executive chairman.

“Together, with increased scale, we’ll have the ability to provide expanded opportunities for associates and serve customers through an even more comprehensive suite of solutions,” O’Haver said last fall.