COLUMBIA BANKING SYSTEM INC

Current report

The Merger Agreement may be terminated in accordance with its terms and the Mergers may not be completed.

Current report

The Merger Agreement is subject to a number of conditions which must be fulfilled in order to complete the Mergers. Those conditions include, among other things: (i) approval by each of Columbia’s shareholders and the Pacific Premier stockholders of certain matters relating to the Mergers at each company’s respective special meeting; (ii) the receipt of required regulatory approvals, including the approval of the Federal Reserve, the FDIC, and the Oregon Department of Consumer and Business Services, Division of Financial Regulation; and (iii) the absence of any order, injunction, decree, or other law preventing or making illegal the completion of the Mergers, the Bank Merger or any of the other transactions contemplated by the Merger Agreement. Each party’s obligation to complete the Merger is also subject to certain additional customary conditions, including (a) subject to applicable materiality standards, the accuracy of the representations and warranties of the other party, (b) the performance in all material respects by the other party of its obligations under the Merger Agreement and (c) the receipt by each party of an opinion from its counsel to the effect that the Mergers will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986.

Current report

These conditions to the closing of the Mergers may not be fulfilled in a timely manner or at all, and, accordingly, the Mergers may not be completed. In addition, the parties can mutually decide to terminate the Merger Agreement at any time, before or after the requisite shareholder and stockholder approvals, or Columbia or Pacific Premier may unilaterally elect to terminate the Merger Agreement in certain other circumstances.

Current report

Before the Mergers and the Bank Merger may be completed, various approvals, consents and non-objections must be obtained from the Federal Reserve, the FDIC, the Oregon Department of Consumer and Business Services, Division of Financial Regulation, and other regulatory authorities in the United States. In determining whether to grant these approvals, such regulatory authorities consider a variety of factors, including the regulatory standing of each party. These approvals could be delayed or not obtained at all, including due to an adverse development in either party’s regulatory standing or in any other factors considered by regulators when granting such approvals; governmental, political, or community group inquiries, investigations, or opposition; or changes in legislation or the political environment generally.

Current report

The approvals that are granted may impose terms and conditions, limitations, obligations, or costs, or place restrictions on the conduct of the combined company’s business or require changes to the terms of the transactions contemplated by the Merger Agreement. There can be no assurance that regulators will not impose any such conditions, limitations, obligations, or restrictions and that such conditions, limitations, obligations, or restrictions will not have the effect of delaying the completion of any of the transactions contemplated by the Merger Agreement, imposing additional material costs on or materially limiting the revenues of the combined company following the Mergers or otherwise reducing the anticipated benefits of the Mergers if the Mergers were consummated successfully within the expected timeframe. In addition, there can be no assurance that any such conditions, terms, obligations, or restrictions will not result in the delay or abandonment of the Mergers. Additionally, the completion of the Mergers is conditioned on the absence of certain orders, injunctions or decrees by any court or regulatory agency of competent jurisdiction that would prohibit or make illegal the completion of any of the transactions contemplated by the Merger Agreement.

Current report

In addition, despite the parties’ commitments to using their reasonable best efforts to comply with conditions imposed by regulators, under the terms of the Merger Agreement, neither Columbia nor Pacific Premier, nor any of their respective subsidiaries, is permitted (without the written consent of the other party), to take any action, or commit to take any action, or agree to any condition or restriction, in connection with obtaining the required permits, consents, approvals and authorizations of governmental entities that would reasonably be expected to have a material adverse effect on the combined company and its subsidiaries, taken as a whole, after giving effect to the Mergers and the Bank Merger.

Current report

Failure to complete the Mergers could negatively impact Columbia.

Current report

If the Mergers are not completed for any reason, including as a result of Columbia shareholders or Pacific Premier stockholders failing to approve certain matters in connection with the Mergers at each company’s respective special meeting, there may be various adverse consequences and Columbia may experience negative reactions from the financial markets and from its customers and employees. For example, Columbia’s business may have been impacted adversely by the failure to pursue other beneficial opportunities due to the focus of management on the Mergers, without realizing any of the anticipated benefits of completing the Mergers. Also, Columbia has devoted significant internal resources to the pursuit of the Mergers and the expected benefit of those resource allocations would be lost if the Mergers are not completed. Additionally, if the Merger Agreement is terminated, the market price of Columbia’s common stock could decline to the extent that current market prices reflect a market assumption that the Mergers will be beneficial and will be completed. Columbia also could be subject to litigation related to any failure to complete the Mergers or to proceedings commenced against Columbia to perform its obligations under the Merger Agreement. If the Merger Agreement is terminated under certain circumstances, Columbia may be required to pay a termination fee of $75 million to Pacific Premier.

Current report

Combining Columbia and Pacific Premier may be more difficult, costly or time-consuming than expected, and Columbia may fail to realize the anticipated benefits of the Mergers.

Current report

Columbia and Pacific Premier have operated and, until the completion of the Mergers, will continue to operate independently. The success of the Mergers, including anticipated benefits and cost savings, will depend, in part, on our ability to successfully combine and integrate the businesses of Columbia and Pacific Premier in a manner that permits growth opportunities and does not materially disrupt the existing customer relations nor result in decreased revenues due to loss of customers. It is possible that the integration process could result in the loss of key employees, the disruption of either company’s ongoing businesses or inconsistencies in standards, controls, procedures, and policies that adversely affect the combined company’s ability to maintain relationships with clients, customers, depositors, and employees or to achieve the anticipated benefits and cost savings of the Mergers. The loss of key employees could adversely affect Columbia’s ability to successfully conduct its business, which could have an adverse effect on Columbia’s financial results and the value of its common stock. If Columbia experiences difficulties with the integration process, the anticipated benefits of the Mergers may not be realized fully or at all, or may take longer to realize than expected. As with any merger of financial institutions, there also may be business disruptions that cause Columbia or Pacific Premier to lose customers or cause customers to remove their accounts from Columbia or Pacific Premier and move their business to competing financial institutions. Integration efforts between the two companies will also divert management attention and resources. These integration matters could have an adverse effect on each of Columbia and Pacific Premier during this transition period and for an undetermined period after completion of the Mergers on the combined company. In addition, the actual cost savings of the Mergers could be less than anticipated.

Current report

The combined company may be unable to retain Columbia and/or Pacific Premier personnel successfully after the Mergers are completed.

Current report

The success of the Mergers will depend in part on the combined company’s ability to retain the talent and dedication of key employees currently employed by Columbia and Pacific Premier. It is possible that these employees may decide not to remain with Columbia or Pacific Premier, as applicable, while the Mergers are pending or with the combined company after the Mergers are consummated. If Columbia and Pacific Premier are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, Columbia and Pacific Premier could face disruptions in their operations, loss of existing customers, loss of key information, expertise, or know-how and unanticipated additional recruitment costs. In addition, following the Mergers, if key employees terminate their employment, the combined company’s business activities may be adversely affected, and management’s attention may be diverted from successfully hiring suitable replacements, all of which may cause the combined company’s business to suffer. Columbia and Pacific Premier also may not be able to locate or retain suitable replacements for any key employees who leave either company.

Current report

Columbia will be subject to business uncertainties and contractual restrictions while the Mergers are pending.

Current report

Uncertainty about the effect of the Mergers on employees and customers may have an adverse effect on Columbia. These uncertainties may impair Columbia’s ability to attract, retain and motivate key personnel until the Mergers are completed, and could cause customers and others that deal with Columbia to seek to change existing business relationships with Columbia. In addition, subject to certain exceptions, Columbia has agreed to operate its business in the ordinary course prior to closing in all material respects. These restrictions may prevent Columbia from pursuing attractive business opportunities that may arise prior to the completion of the Mergers.

Current report

Columbia has incurred and is expected to incur substantial costs related to the Mergers and integration.

Current report

Both Columbia and Pacific Premier will incur substantial expenses in connection with the negotiation and completion of the transactions contemplated by the Merger Agreement. These costs include legal, financial advisory, accounting, consulting, and other advisory fees, retention, severance and employee benefit-related costs, public company filing fees and other regulatory fees, financial printing and other printing costs, closing, integration, and other related costs. Some of these costs are payable by Columbia regardless of whether or not the Mergers are completed.

Current report

Shareholder litigation related to the Mergers could prevent or delay the completion of the Mergers, result in the payment of damages or otherwise negatively impact the business and operations of Columbia.

Current report

Shareholders may bring claims in connection with the proposed Mergers and, among other remedies, may seek damages or an injunction preventing the Mergers from closing. If any plaintiff were successful in obtaining an injunction prohibiting Columbia or Pacific Premier from completing the Mergers or any other transactions contemplated by the Merger Agreement, then such injunction may delay or prevent the effectiveness of the Mergers and could result in costs to Columbia, including costs in connection with the defense or settlement of any shareholder lawsuits filed in connection with the Mergers. Further, such lawsuits and the defense or settlement of any such lawsuits may have an adverse effect on the financial condition and results of operations of Columbia.

Current report

The Merger Agreement limits Columbia’s ability to pursue acquisition proposals.

Current report

The Merger Agreement prohibits Columbia from initiating, soliciting, knowingly encouraging, or knowingly facilitating certain third-party acquisition proposals. These provisions might discourage a potential competing acquirer that might have an interest in acquiring all or a significant part of Columbia from considering or proposing such an acquisition.