TACOMA, Wash., June 7 /PRNewswire-FirstCall/ -- Columbia Banking System,
Inc. (Nasdaq: COLB - $1.8 billion in assets) and Bank of Astoria, Astoria,
Oregon (OTC Bulletin Board: BKAO - $151.4 million in assets) today announced
the signing of a definitive agreement for Columbia to acquire Bank of Astoria
in a cash-and-stock deal valued at approximately $45.8 million. Upon
completion of the transaction, Columbia's total assets will approach $2
billion, and the combined entity will have 39 branches.
The boards of both companies unanimously approved the transaction, which
is subject to approval by Bank of Astoria's stockholders, as well as
regulators and other customary conditions of closing. The parties expect the
transaction to close in the third quarter of 2004.
Terms of the agreement call for Columbia to pay $18.2 million in cash and
issue 1,277,750 shares of common stock. Based on the June 4, 2004 closing
price of $21.59, the value of the stock consideration is approximately $27.6
million. The transaction is expected to be accretive to Columbia's 2005
earnings. Bank of Astoria stockholders will have an opportunity to choose
between stock and cash consideration within certain limits. To the extent
that Columbia shares are received, the exchange is expected to be a tax-free
transaction to Bank of Astoria stockholders. Based on Bank of Astoria's March
31, 2004 financials, the price represents 296% of book value and 19.2x
Under the agreement, Bank of Astoria will join Columbia as a separately
operated banking subsidiary in Oregon and will continue to operate under the
Bank of Astoria name. This will be Columbia's initial entry into Oregon.
Bank of Astoria operates five branches located in Clatsop and Tillamook
counties, where it holds 34.4% and 5.7% deposit share, respectively, in those
counties. The five branches are located in Astoria, Warrenton, Cannon Beach,
Seaside and Manzanita. The bank specializes in small business financial
Cheri Folk, President and Chief Executive Officer of Bank of Astoria
explained, "We are very excited to join the Columbia team and leverage the
combined resources of our franchises. This transaction is very positive for
Bank of Astoria shareholders, customers and employees. Both immediate and
long-term benefits will be realized for our current and new customer base
through increased lending capacities, as well as an expanded line of
competitive products and services. Both of our organizations hold as core
values that our success depends upon the vitality of our communities and the
satisfaction of our customers."
Melanie J. Dressel, President and Chief Executive Officer of Columbia
Banking System added, "We believe this is an excellent strategic transaction
that will provide us a premier Oregon franchise with a strong business culture
and a respected team of local bankers. This extends our presence in
southwestern Washington to the northern Oregon Coast. The combined financial
and management resources should provide a formidable platform for market share
gains in Oregon which we believe will result in long term shareholder value."
Columbia Banking System used RBC Capital Markets as its financial adviser,
and Graham & Dunn served as legal counsel. Sandler O'Neill & Partners, LP
acted as financial adviser for Bank of Astoria, while Schwabe, Williamson &
Wyatt provided legal counsel.
About Columbia Banking System, Inc.
Columbia Banking System, Inc. is a Tacoma-based bank holding company whose
wholly owned bank subsidiary is Columbia Bank, a Washington state-chartered
full-service commercial bank. Providing products and services to individuals
and the real estate community, Columbia Bank currently operates 34 banking
offices in Pierce, King, Cowlitz, Kitsap and Thurston counties.
About Bank of Astoria
Bank of Astoria, which is headquartered in Astoria, Oregon, operates four
branches in Clatsop County: Astoria, Warrenton, Seaside, Cannon Beach and one
branch in Tillamook County: Manzanita. Bank of Astoria was chartered in 1967
by the State of Oregon and is a federally-insured commercial bank. The Bank
specializes in small business financial services.
This news release includes forward looking statements, which management
believes are a benefit to shareholders. These forward looking statements
describe Columbia's management's expectations regarding future events and
developments such as future operating results, growth in loans and deposits,
continued success of Columbia's style of banking and the strength of the local
economy. The words "will," "believe," "expect," "should," and "anticipate"
and words of similar construction are intended in part to help identify
forward looking statements. Future events are difficult to predict, and the
expectations described above are necessarily subject to risk and uncertainty
that may cause actual results to differ materially and adversely. In addition
to discussions about risks and uncertainties set forth from time to time in
Columbia's filings with the SEC, factors that may cause actual results to
differ materially from those contemplated by such forward looking statements
include, among others, the following possibilities: (1) local, national and
international economic conditions are less favorable than expected or have a
more direct and pronounced effect on Columbia than expected and adversely
affect Columbia's ability to continue its internal growth at historical rates
and maintain the quality of its earning assets; (2) changes in interest rates
reduce interest margins more than expected and negatively affect funding
sources; (3) projected business increases following strategic expansion or
opening or acquiring new branches are lower than expected; (4) costs or
difficulties related to the integration of acquisitions are greater than
expected; (5) competitive pressure among financial institutions increases
significantly; (6) legislation or regulatory requirements or changes adversely
affect the businesses in which Columbia is engaged.
Contacts: Melanie J. Dressel
President and Chief Executive Officer
Columbia Banking System, Inc.
Cheri J. Folk
President and Chief Executive Officer
Bank of Astoria
SOURCE Columbia Banking System, Inc.