Magazine article American Banker

Umpqua's New Deal in California Makes Up for the One That Got Away

Magazine article American Banker

Umpqua's New Deal in California Makes Up for the One That Got Away

Article excerpt

Byline: Matthew Monks

Ray Davis has proven there are plenty of fish in the bank M&A sea.

The California deal that Umpqua Holdings (UMPQ) announced Thursday is just as good as the one it lost three months ago, the chief executive of the Portland, Ore., company says.

Umpqua's $24.9 million agreement for the six-branch Circle Bank near San Francisco justifies walking away in May from the three-branch American Perspective Bank in central California, Davis says. PacWest Bancorp (PACW) broke up Umpqua's $45 million deal by offering to pay $58 million.

Getting into a bidding war in a buyer's market did not make sense, Davis says.

"We love that market. We still love that market," Davis says of San Luis Obispo, where American Perspective was located. "That deal went away. This one popped up. And this one is in the sweet spot of what we've been looking for."

So which deal is better?

"Interesting question," Davis says.

They are both relatively small, all-cash offers for private institutions that signal to Wall Street that Umpqua a having last bought a bank in 2007 a is a buy-side player, he says.

"We know how to do acquisitions," Davis says, noting that the bank has integrated 23 banks in 20 years. "We do have price discipline."

Umpqua prefers the demographics of the San Francisco area to San Luis Obispo further south, he says. It is bigger, and Umpqua already has branches there. Acquiring Circle, based in Novato, would double Umpqua's branch count to ten around San Francisco and Oakland. …

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