It is looking like one of the pilots deliberately hit the other plane.
Pilot committed suicide?
Witnesses told KREM-TV they saw the two airplanes flying towards each other and colliding in mid-air, then plunging a few hundred feet into the lake. "It was a cracking nose – a loud crack," said Grant Marchant, who said he saw one of the planes falling from the sky. Angie Bishop told the station she saw a "big eruption of flames." "You could just see debris falling with it and you can tell it was obviously an airplane in the sky. But it fell to the ground and a huge loud noise followed it," she said. "t was pretty terrifying. We were all standing at the beach watching it and completely shocked at what we saw." Source
"All of a sudden out of nowhere, a huge, big eruption of flames. It's like a full fire ball flame in the sky," Angie Bishop told KREM, describing the scene. "And my friend and I are just standing there you could just see debris falling with it and you can tell it was obviously an airplane in the sky. But it fell to the ground and a huge loud noise followed it." Source
"So I was just pulling off the dock, was just riding the Jet ski and then all of a sudden heard like a high-pitched sound of an airplane and I looked up and saw the explosion," Pierce said. "It was definitely two airplanes. It wasn't necessarily an immediate explosion. It was more of like a clipping if you will, you know both airplanes kind of running into each other and then followed by an explosion after that. And then I rushed out there and saw it." Source