By Tatiana Bautzer

NEW YORK, April 25 (Reuters) - Columbia Banking System COLB.O, which is acquiring Pacific Premier Bancorp PPBI.O, decided to go ahead with the $2 billion deal, lured by Pacific's strong capital and presence in California despite a broader market selloff, its chief executive said.

"We didn't need to raise any capital for the deal, so we could go ahead," Columbia Banking CEO Clint Stein said.

Stein and Pacific Premier PPBI.O CEO Steve Gardner decided to ignore the losses close to 15% on their shares this year and announced the transaction on Wednesday soon after market close. "We focused on the longer term benefits," Stein added.

Pacific Premier has a high capital ratio, 17%, more than enough to absorb any markdown in securities portfolios, Gardner said. But both CEOs that acknowledged volatile markets may be preventing deals that need capital raises.

Although small, the Columbia-Premier deal is one more step in the consolidation trend among the 4,500 banks in the U.S. Columbia Banking concentrates its activities in the states of Washington and Oregon, and was attracted by Pacific Premier's business in southern California, especially in the Los Angeles metropolitan area, the banks said in a statement.

Former Columbia's shareholders will own 70% of the new combined bank, which is expected to have around $70 billion in assets. Even after the acquisition, Columbia will remain below the $100 billion in assets threshold, that increases bank regulatory requirements and creates higher costs.

The discussions between the CEOs began two years ago, they said in a video interview from Irvine, California, on Thursday. The complementary businesses and cost savings may increase Columbia's profitability of 15% in return over tangible common equity to 20%.

So far, the banks are not seeing strong signs of a recession or larger delinquencies in their loan portfolio, Stein added.

"If you talk to people on Main Street, they may be worried about how tariffs are going to impact their businesses, but it's not the same mood we see on Wall Street," said Columbia CEO Stein.

Small businesses and lower income consumers are stretched by inflation, but have not yet felt the full effect of the higher tariffs, the executives added.

(Reporting by Tatiana Bautzer; Editing by David Gregorio)

((tatiana.bautzer@tr.com; Mob: +1-646-2397968; Reuters Messaging: tatiana.bautzer.thomsonreuters.com@reuters.net))