Kroll Bond Rating Agency Comments on Columbia Banking System, Inc. and Pacific Continental Corporation Merger

01/10/17 04:27 PM EST

Kroll Bond Rating Agency Comments on Columbia Banking System, Inc. and Pacific Continental Corporation Merger

Kroll Bond Rating Agency (KBRA) comments on Columbia Banking System, Inc. and Pacific Continental Corporation Merger.

The report makes the following key points:

  • Columbia Banking System, Inc. (NASDAQ: COLB, “Columbia”) and Pacific Continental Corporation (NASDAQ: PCBK, “Pacific Continental”) announced a Definitive Agreement and Plan of Merger with Columbia Banking System, Inc. as the surviving entity.
  • The deal is expected to close in mid- 2017, and Columbia anticipates the merger to be immediately accretive to its earnings starting.
  • After completion of the merger, Columbia’s branch network will expand to over 150 locations throughout Washington, Oregon and Idaho with pro-forma total assets of approximately $12 billion.
  • In June 2016, KBRA assigned a senior unsecured debt rating of BBB+, a subordinated debt rating of BBB, and a short-term debt rating of K2 to Pacific Continental. In addition, KBRA assigned a deposit rating of A-, a senior unsecured debt rating of A-, and short-term debt and deposit ratings of K2 to the banking subsidiary, Pacific Continental Bank. The outlook on all long-term ratings is stable.
  • Columbia appears to have strong overall financial condition. As of third quarter 2016 data, KBRA’s Subscription Rating Service (SRS) rated Columbia’s lead subsidiary, Columbia State Bank, “A-” on the financial strength rating (FSR) scale.
  • Ratings of Pacific Continental and its subsidiary bank will likely be withdrawn when the merger closes, given that Pacific Continental and Pacific Continental Bank will be merged into Columbia and Columbia State Bank, respectively.

The ratings are based on KBRA’s Global Bank and Bank Holding Company Rating Methodology published on February 19, 2016.

Please click here to view the report.

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Analytical:
Kroll Bond Rating Agency
Thomas Curley, 301-969-3245
Senior Analyst
tcurley@kbra.com
or
Christopher Whalen, 646-731-2366
Senior Managing Director
cwhalen@kbra.com
or
Joseph Scott, 646-731-2438
Managing Director
jscott@kbra.com