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Columbia Banking System Stock Price slips 13% in reaction to the merger with Umpqu Holdings

Updated: 12 Oct 2021

Columbia Banking System Inc (NASDAQ: COLB) stock slipped over 13% in Tuesday mid-market trading. It seems backing of the banking entity has dropped off following today’s merger with Umpqua Holdings Corp – which has also witnessed a 2% slip in stock price. 

The all-stock merger followed an initiative to bring together two of the West Coast’s largest regional banks. The numbers spoke for themselves, creating a single entity with a combined market cap of roughly $7.7 billion, with more than $50 billion worth of assets under joint control. 

The terms of the deal also involved Umpqua shareholders receiving 0.59 Columbia Banking shares for each UMPQ share owned – creating a 12% premium at the time of Monday’s close. By the finalization of the deal, Umpqua shareholders will officially own 62% of the new combined company. It isn’t much of a surprise that UMPQ stock enjoyed a rally off the bat, yet it wasn’t the same story for COLB investors – who haven’t reacted kindly to the merger. 

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The COLB stock price is continuing to slip further downwards as the market has time to react to the recent news – now trading around the $34.16 mark – extending a bearish edge of 13.7%. With COLB investors dumping stock and UMPQ stock starting to turn, the next few days should shine some more light on market sentiment following the merger.

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