On April 23, Washington-based Columbia Banking System announced that it agreed to acquire California-based Pacific Premier Bancorp in an all-stock transaction that would boost its size by about one-third. We think the acquisition could benefit Columbia's scale, geographic diversification, and profitability, but will further increase the company's already-high dependence on commercial lending and pose integration risks. We affirmed our 'BBB-/A-3' issuer credit ratings on Columbia Banking System and our 'BBB/A-2' ratings on Umpqua Bank. The stable outlook indicates our expectation that the combined company's asset quality, capital ratios, and earnings generation will remain solid, and integration risks will be manageable. On April 25, 2025, S&P Global Ratings affirmed its 'BBB-/A-3' long- and short-term issuer credit ratings on Columbia Banking System
