(By Balachander) Columbia Banking System Inc. (NASDAQ:COLB) and West Coast Bancorp (NASDAQ:WCBO) have agreed to merge in a deal valued at roughly $506 million.
The companies expect the merger to create the Premier Pacific Northwest community banking franchise.
Tacoma, Washington-based Columbia expects the deal to immediately add to its earnings.
The combined company will have around $7.2 billion in assets with over 150 branches throughout Washington and Oregon. West Coast Bancorp is a publicly held, Northwest bank holding company headquartered in Oregon with $2.4 billion in assets.
Based on Columbia's closing stock price of $18.85 on Tuesday, West Coast shareholders would have received consideration valued at around $23.10 per share.
West Coast shareholders will own roughly 24 percent of the combined company.
Columbia expects cost savings to be roughly 25 percent of the operating expense base of West Coast, with 50 percent being realized in 2013 and 100 percent being realized thereafter.
The deal is expected to close in the first quarter of 2013.
On Tuesday, COLB shares ended at $18.85, while WCBO shares closed at $2.18.