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TACOMA, Wash. and IRVINE, Calif. - Columbia Banking System, Inc. (NASDAQ: COLB), the parent company of Umpqua Bank, and Pacific Premier Bancorp, Inc. (NASDAQ: PPBI), the parent company of Pacific Premier Bank, National Association, have announced a definitive merger agreement. Columbia will acquire Pacific Premier in an all-stock transaction valued at approximately $2.0 billion, or $20.83 per Pacific Premier share, based on Columbia’s closing stock price as of April 22, 2025. According to InvestingPro data, Pacific Premier’s current market capitalization stands at $1.95 billion, with the stock trading at $20.11, suggesting the market sees potential value in this deal.
The merger will create a combined entity with about $70 billion in assets, positioning it as a significant market presence in the Western U.S. banking sector. Pacific Premier stockholders are set to receive 0.9150 of a share of Columbia common stock for each share they own, and will hold around 30% of Columbia’s outstanding shares post-merger. Pacific Premier currently offers a notable 6.7% dividend yield and maintains strong financial health metrics, as indicated by InvestingPro’s comprehensive analysis.
Columbia’s President, CEO, and Director Clint Stein commented on the strategic fit of the merger, highlighting the strengthened position in Southern California and enhanced service offerings. Steve Gardner, Chairman, President, and CEO of Pacific Premier, also expressed enthusiasm for the opportunity to join forces with a company that shares a similar business model and credit discipline.
This transaction is expected to bring mid-teens EPS accretion to Columbia, with tangible book value dilution earned back in three years, assuming fully realized cost savings. The merger is anticipated to close in the second half of 2025, subject to customary closing conditions, including regulatory approvals and the approval of both companies’ stockholders. Pacific Premier’s current price-to-book ratio of 0.66 and P/E ratio of 12.09 suggest the company may be undervalued relative to peers. For deeper insights into banking sector valuations and comprehensive analysis, investors can access detailed Pro Research Reports through InvestingPro.
In light of the merger, Umpqua Bank plans to change its name to Columbia Bank later this year, aligning with the holding company and other brands it operates.
Columbia and Pacific Premier will hold a joint conference call to discuss the merger details and Columbia’s first-quarter 2025 financial results.
The information provided is based on a press release statement, and investors are advised to read the joint proxy statement/prospectus regarding the transaction when available for more details.
In other recent news, Pacific Premier Bancorp reported strong financial results for the third quarter of 2024, with earnings per share (EPS) of $0.37, surpassing analyst expectations of $0.32. The company also achieved total revenue of $149.8 million, exceeding the anticipated $143.47 million. This performance reflects the bank’s strategic focus on expanding its loan pipeline and managing expenses effectively, despite a slight decline in net interest margin. Additionally, DA Davidson adjusted its price target for Pacific Premier Bancorp from $33.00 to $30.00 while maintaining a Buy rating, highlighting the bank’s proactive risk management and growth potential. The firm noted Pacific Premier’s increase in new loan originations, which contributes to an optimistic outlook for loan growth in 2025. The bank’s strategic initiatives include capital deployment strategies such as securities repositioning, share buybacks, and potential mergers and acquisitions. These developments underscore Pacific Premier’s strong market position and financial health amidst challenging market conditions.
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