Core Insights - The acquisition of Pacific Premier has strengthened Columbia Banking System's competitive position in the Western markets, particularly in Southern California, where it now holds a top-10 deposit market share [3][7] - The company reported consistent operating performance for 2025, driven by the Pacific Premier acquisition, balance sheet optimization, and disciplined expense control [4] - Management expects continued improvement in net interest margin (NIM) and plans to launch additional retail deposit campaigns [6][19] Integration and Operational Performance - The integration of Pacific Premier is progressing smoothly, with a systems conversion expected this quarter and a focus on cultural integration and customer service [2][7] - Columbia achieved a 27% increase in pre-provision net revenue and a 19% increase in operating net income in Q4 compared to the previous quarter [8] - Non-interest income for the quarter was strong, totaling $90 million, with contributions from Pacific Premier and increased customer fees [11] Financial Metrics - Q4 operating EPS was reported at $0.82, with a net interest margin of 4.06%, up from 3.84% in Q3 [6][9] - Total deposits decreased to $54.2 billion due to intentional reductions in brokered deposits, but deposit campaigns added $1.3 billion in 2025 [5][15][17] - The company raised its dividend to $0.37 per share and repurchased 3.7 million shares in Q4, with plans for further buybacks in 2026 [5][18] Loan and Deposit Trends - Gross loans and leases ended the year at $47.8 billion, with a 23% increase in new loan origination volume in Q4 compared to the previous year [13][14] - Management anticipates modest contraction in deposits through Q1, with expectations for net growth to resume in the spring [16] - The company has opened new de novo locations in multiple states and plans targeted additional openings in 2026 [7] Future Outlook - Management expects NIM to be between 3.90% and 3.95% in Q1, with improvements anticipated throughout 2026 [18][19] - The company is actively managing deposit pricing based on competitive conditions, with a focus on a "rates down deposit playbook" [19] - Share repurchases are expected to increase to $150 million to $200 million per quarter in 2026, with significant excess capital available [23]

Core Insights - Columbia Banking (COLB) reported quarterly earnings of $0.82 per share, exceeding the Zacks Consensus Estimate of $0.72 per share, and showing an increase from $0.71 per share a year ago, resulting in an earnings surprise of +13.89% [1] - The company achieved revenues of $717 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 3.30%, and up from $487.12 million year-over-year [2] - Columbia Banking has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Performance - The earnings surprise for the previous quarter was +28.79%, with actual earnings of $0.85 per share compared to an expected $0.66 per share [1] - The company has surpassed consensus EPS estimates four times in the last four quarters [2] Stock Performance - Columbia Banking shares have increased by approximately 6.3% since the beginning of the year, outperforming the S&P 500, which gained 0.4% [3] - The stock's immediate price movement will depend on management's commentary during the earnings call [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.71 on revenues of $667.9 million, and for the current fiscal year, it is $2.95 on revenues of $2.75 billion [7] - The estimate revisions trend prior to the earnings release was unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Banks - West industry, to which Columbia Banking belongs, is currently in the top 33% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - In Q4 2025, operating pre-provision net revenue increased by 27% from Q3, while operating net income rose by 19% compared to the previous quarter [9] - Full year 2025 results showed a 22% increase in operating pre-provision net revenue and a 31% increase in operating net income compared to 2024 [9] - Earnings per share (EPS) for Q4 was $0.72, with operating EPS at $0.82, reflecting increases of 6% and 15% respectively from the prior year's fourth quarter [9][10] Business Line Data and Key Metrics Changes - New loan origination volume reached $1.4 billion in Q4, up 23% from the year-ago quarter, contributing to a 6% annualized increase in the commercial loan portfolio [19] - Non-interest income for Q4 was $90 million on a GAAP basis, with an operating basis of $88 million, marking a $16 million sequential quarter increase [11] - The commercial loan portfolio growth was offset by declines in transactional loan balances and construction loans [19] Market Data and Key Metrics Changes - Total deposits decreased to $54.2 billion as of December 31, down from $55.8 billion at the end of Q3, primarily due to intentional reductions in brokered and select public deposits [14] - The net interest margin for Q4 was 4.06%, up from 3.84% in Q3 and 3.64% in Q4 2024, driven by improved funding performance [10] Company Strategy and Development Direction - The acquisition of Pacific Premier Bank was highlighted as a strategic move to enhance the company's regional footprint and competitive position, particularly in Southern California [4] - The company plans to continue targeted de novo growth in 2026, funded by resources set aside from previous expense initiatives [5] - The focus remains on profitability over growth for its own sake, with an emphasis on optimizing performance and supporting existing customers [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong credit profile, which remained stable throughout 2025, unaffected by external events impacting peers [7] - The expectation for net interest margin in Q1 2026 is between 3.90% and 3.95%, with a projected increase throughout the year as customer deposit balances rebound [16] - The company anticipates continued strong profitability and return on tangible common equity exceeding 17% as it moves into 2026 [18] Other Important Information - The company achieved $63 million in annualized deal-related cost savings from the acquisition, representing approximately 50% of the targeted $127 million [11] - The common dividend was increased to $0.37 per share from $0.36, and 3.7 million shares were repurchased at an average price of $27.07 [15] Q&A Session Summary Question: Insights on Pac Premier's integration and contributions - Management noted strong enthusiasm from Pac Premier employees and highlighted their ability to grow existing customer relationships and call on larger clients [30][33] Question: Clarification on loan portfolio decline - The decline was attributed to a combination of intentional runoff and elevated payoffs, with expectations of retaining 75% to 80% of transactional relationships [43][46] Question: Future loan sales opportunities - Management indicated that while there may be surgical opportunities for loan sales, significant bulk sales are not expected due to potential capital hits [74] Question: Deposit pricing outlook - The company is actively managing deposit pricing based on market conditions and competitor actions, with a focus on maintaining a competitive edge [75][78] Question: Capital allocation priorities - The company prioritizes capital for core lending, dividends, business investments, and share buybacks, with a programmatic approach to buybacks expected to continue [65][66]

Financial Data and Key Metrics Changes - In Q4 2025, operating pre-provision net revenue (PPNR) increased by 27% from Q3 2025, while operating net income rose by 19% compared to the prior quarter [9][10] - Full year 2025 results showed a 22% increase in operating PPNR and a 31% increase in operating net income compared to 2024 [9] - Earnings per share (EPS) for Q4 2025 was $0.72, with operating EPS at $0.82, reflecting increases of 6% and 15% respectively from Q4 2024 [9][10] Business Line Data and Key Metrics Changes - New loan origination volume reached $1.4 billion in Q4 2025, up 23% from the year-ago quarter, contributing to a 6% annualized increase in the commercial loan portfolio [19] - Non-interest income for Q4 was $90 million on a GAAP basis, with a sequential increase of $16 million driven by the acquisition of Pac Premier and higher customer fee income [11][20] Market Data and Key Metrics Changes - Total deposits decreased to $54.2 billion as of December 31, 2025, down from $55.8 billion as of September 30, 2025, due to intentional reductions in brokered and select public deposits [14] - The net interest margin for Q4 2025 was 4.06%, up from 3.84% in Q3 2025 and 3.64% in Q4 2024, driven by improved funding performance and earning asset optimization [10][11] Company Strategy and Development Direction - The company aims to prioritize profitability over growth for its own sake, focusing on optimizing performance and supporting existing customers while delivering superior financial results [7][8] - The acquisition of Pacific Premier Bank is seen as a strategic move to enhance the company's competitive position in key Western markets, particularly in Southern California [4][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive strong profitability into 2026, supported by healthy customer pipelines and ongoing balance sheet management strategies [7][18] - The company anticipates continued net interest margin improvement throughout 2026, with expectations to surpass 4% in the second or third quarter [16] Other Important Information - The company achieved $63 million in annualized deal-related cost savings from the acquisition, representing approximately 50% of the targeted $127 million [11] - The common dividend was increased to $0.37 per share from $0.36 per share, and 3.7 million common shares were repurchased at an average price of $27.07 [15] Q&A Session Summary Question: Insights on Pac Premier's integration and contributions - Management highlighted the excitement and enthusiasm from Pac Premier employees, noting their ability to grow existing customer relationships and call on larger clients [30][33] Question: Clarification on loan balance expectations - Management indicated that the loan portfolio is expected to remain relatively flat, with core relationship-based lending activities offsetting transactional runoff [62] Question: Future capital allocation strategies - Management confirmed a continued focus on share buybacks, with no immediate interest in M&A, while also considering investments in talent and business expansion [65][68]

Financial Data and Key Metrics Changes - In Q4 2025, operating pre-provision net revenue increased by 27% from Q3, while operating net income rose by 19% compared to the previous quarter [8][10] - Full year 2025 results showed a 22% increase in operating pre-provision net revenue and a 31% increase in operating net income compared to 2024 [8] - Earnings per share (EPS) for Q4 was $0.72, a 6% increase year-over-year, while operating EPS was $0.82, up 15% from the prior year's fourth quarter [8][10] - Net interest margin expanded to 4.06% in Q4, up from 3.84% in Q3 and 3.64% in Q4 2024 [9] Business Line Data and Key Metrics Changes - Non-interest income for Q4 was $90 million on a GAAP basis, with an operating basis of $88 million, reflecting a $16 million sequential increase [10] - The commercial loan portfolio increased by 6% on an annualized basis, driven by new loan origination volume of $1.4 billion, which was up 23% from the year-ago quarter [18][19] - Customer fee income increased significantly, particularly in treasury management and international banking, contributing to a 26% increase in non-interest income for the full year 2025 compared to 2024 [20] Market Data and Key Metrics Changes - Total deposits decreased to $54.2 billion as of December 31, down from $55.8 billion at the end of Q3, primarily due to intentional reductions in brokered and select public deposits [12] - The company experienced seasonal decreases in customer accounts, which are expected to continue into Q1 2026 due to tax payments and other year-end payouts [19] Company Strategy and Development Direction - The acquisition of Pacific Premier Bank was highlighted as a strategic move to enhance the company's position in the Northwest and Southern California markets [3][4] - The company plans to continue targeted de novo growth in 2026, funded by resources set aside from previous expense initiatives [4] - The focus remains on profitability over growth for its own sake, with an emphasis on operational enhancement and consistent financial results [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strong credit profile, which remained stable throughout 2025, unaffected by external events impacting peers [5] - The outlook for 2026 includes expectations for net interest margin to trend higher each quarter, surpassing 4% in the second or third quarter [15] - The company aims to maintain a conservative level of excess liquidity while optimizing its funding structure [16] Other Important Information - The company increased its common dividend to $0.37 per share from $0.36 and repurchased 3.7 million common shares at an average price of $27.07 [14] - The allowance for credit losses was reported at 1.02% of loans at quarter-end, indicating a stable credit environment [11] Q&A Session Summary Question: Can you talk more about the contributions from Pacific Premier? - Management noted that the integration has been positive, with excitement from the Pac Premier team and growth in existing customer relationships [24][25] Question: What is the outlook for earning assets? - The company expects earning assets to remain flat to modestly down in Q1, with a range of $60.5 billion to $61 billion [31][32] Question: How do you view the loan portfolio and transactional relationships? - Management indicated that they expect to retain 75% to 80% of the transactional portfolio as it matures or reprices [38] Question: What is the appetite for additional loan sales? - The company is open to surgical opportunities for loan sales but does not expect significant bulk sales from the transactional portfolio [63] Question: How should we think about deposit pricing moving forward? - Management emphasized a market-driven approach to deposit pricing, actively seeking opportunities to adjust rates based on competitive dynamics [67][68]

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Financial Performance - Net income for Q4 2025 was $215 million, down from $243 million in Q3 2025, with diluted earnings per share at $0.72 compared to $0.82 in the prior quarter[2]. - Net income for Q4 2025 was $215 million, a 124% increase from $96 million in Q3 2025[29]. - Earnings per common share (diluted) was $0.72 for Q4 2025, an 80% increase from $0.40 in Q3 2025[29]. - Net income for the year was $550 million, a 3% increase compared to the previous year[32]. - Earnings per common share (diluted) decreased by 10% to $2.30, reflecting the impact of increased expenses and provisions[32]. - Total revenue (GAAP) reached $717 million, up 23% sequentially and 47% year-over-year[60]. - Operating net income (non-GAAP) increased by 31% to $746 million from $568 million year-over-year[65]. Income and Expenses - Net interest income increased by $122 million to $627 million in Q4 2025, driven by two additional months of combined operations and a favorable funding mix[5][10]. - Non-interest income was $90 million, an increase of $13 million from the previous quarter, with customer fee income contributing significantly to the growth[5][14]. - Total non-interest income was $90 million in Q4 2025, reflecting a 17% increase from $77 million in Q3 2025[29]. - Total non-interest expense increased to $412 million in Q4 2025, a 5% increase from $393 million in Q3 2025[29]. - Total non-interest expense increased by 29% to $1,423 million, primarily due to higher salaries and employee benefits (up 14%) and merger and restructuring expenses[32]. - Operating non-interest expense (non-GAAP) was reported at $1,220 million, a 14% increase from $1,071 million in 2024[68]. Assets and Liabilities - Total assets decreased to $66.8 billion as of December 31, 2025, from $67.5 billion at the end of Q3 2025, reflecting balance sheet optimization[5][16]. - Total assets grew to $67.114 billion as of December 31, 2025, compared to $56.823 billion a year earlier, marking a year-over-year increase of 18.9%[49]. - Total deposits were $54.2 billion, a decrease from $55.8 billion in Q3 2025, attributed to intentional reductions in brokered deposits and seasonal factors[5][18]. - Total deposits grew by 30% to $54,211 million, with non-interest-bearing deposits increasing by 31%[33]. - Total risk-based capital ratio increased to 13.6%, up 0.20% sequentially and 0.80% year-over-year[35]. Credit Quality - The allowance for credit losses (ACL) was $485 million, or 1.02% of loans and leases, as of December 31, 2025, compared to $492 million, or 1.01% as of September 30, 2025[19]. - Net charge-offs were 0.25% of average loans and leases (annualized) for Q4 2025, up from 0.22% in Q3 2025, with total net charge-offs of $30 million in Q4 compared to $22 million in Q3[21]. - Non-performing assets totaled $200 million, or 0.30% of total assets, as of December 31, 2025, compared to $199 million, or 0.29% as of September 30, 2025[21]. - The provision for credit losses decreased to $23 million in Q4 2025, down 67% from $70 million in Q3 2025[29]. - The allowance for credit losses on loans and leases (ACLLL) increased to $485 million as of December 31, 2025, reflecting a 10% year-over-year growth from $441 million[48]. Shareholder Returns - The company declared a quarterly cash dividend of $0.37 per common share, paid on December 15, 2025[5][6]. - Dividends per share increased to $0.37, reflecting a 3% sequential and year-over-year growth[35]. - Columbia's book value per common share increased to $26.54 as of December 31, 2025, from $26.04 as of September 30, 2025[22]. - Book value per share rose to $26.54, a 2% increase sequentially and 9% year-over-year[35]. Operational Efficiency - Return on average assets (ROAA) improved to 1.27%, up 0.60% sequentially and 0.17% year-over-year[35]. - Efficiency ratio decreased to 57.30%, showing a 9.99% improvement sequentially and 2.69% year-over-year[35]. - The efficiency ratio improved to 61.68%, up from 57.14% in the previous year, indicating a decline in operational efficiency[68].

4th Quarter 2025 Earnings Presentation January 22, 2026 Disclaimer FORWARD-LOOKING STATEMENTS This communication may contain certain forward-looking statements, including, but not limited to, certain plans, expectations, goals, projections, and statements about the benefits of the acquisition of Pacific Premier Bancorp, Inc. ("Pacific Premier") by Columbia Banking System, Inc. ("Columbia") the plans, objectives, expectations and intentions of Columbia and other statements that are not historical facts. Such ...

Core Insights - Columbia Banking System, Inc. reported strong financial performance for Q4 2025, with net income of $215 million and diluted earnings per share of $0.72, reflecting a significant increase from the previous quarter [1][5][28] - The company experienced a net interest income increase of $122 million, driven by favorable funding mix and two additional months of combined operations following the acquisition of Pacific Premier [3][9][10] - The net interest margin improved to 4.06%, up 22 basis points from the prior quarter, benefiting from lower funding costs and an increase in customer deposits [2][10][11] Financial Performance - Net interest income reached $627 million, a 24% increase sequentially, while non-interest income rose to $90 million, up 17% from the previous quarter [5][13] - Non-interest expense increased by $19 million to $412 million, primarily due to the integration of Pacific Premier, although lower merger expenses partially offset this rise [14] - The provision for credit losses was significantly reduced to $23 million from $70 million in the prior quarter, indicating improved credit quality [18][19] Balance Sheet Highlights - Total assets decreased to $66.8 billion from $67.5 billion, reflecting balance sheet optimization and accelerated loan repayments [15][31] - Total deposits were $54.2 billion, down from $55.8 billion, attributed to intentional reductions in brokered deposits and seasonal declines [17] - The allowance for credit losses stood at $485 million, or 1.02% of loans and leases, showing a slight decrease from the previous quarter [18] Capital and Shareholder Returns - The book value per common share increased to $26.54, while tangible book value per common share rose to $19.11 [20] - The company declared a quarterly cash dividend of $0.37 per share and repurchased $100 million of common stock under its repurchase plan [4][21] - Columbia's estimated total risk-based capital ratio was 13.6%, remaining above regulatory minimums [21]

Group 1 - Columbia Banking System, Inc. has elected Clint Stein as Chair of the Board of Directors, effective January 22, 2026, while Maria Pope transitions to Lead Independent Director [1][2] - The Board's decision reflects confidence in Mr. Stein's leadership and aims to ensure continuity and strong governance as the company pursues its long-term strategic priorities [2][3] - Maria Pope's role as Lead Independent Director emphasizes the Board's commitment to best practice governance and independent oversight, with responsibilities including presiding over executive sessions and engaging with shareholders [3][4] Group 2 - Clint Stein has been with Columbia since 2020, focusing on disciplined growth and prudent risk management, while Maria Pope and Luis Machuca have been on the Board since 2014 and 2010, respectively [4] - Columbia Banking System, Inc. is headquartered in Tacoma, Washington, and operates as a regional bank with a presence in multiple states, offering a wide range of banking services [5]