Financial Data and Key Metrics Changes - Columbia Banking System reported a third-quarter operating PP&R increase of 12% from the second quarter and 22% year-over-year, reflecting strong profitability and balance sheet optimization [6][12] - The operating return on average tangible equity was 18.2%, with a tangible book value per share increasing to $18.57, a 4% rise since Q1 2025 [12][14] - The net interest margin expanded by nine basis points to 3.84%, driven by customer deposit growth and a reduction in reliance on higher-cost wholesale funding [15][16] Business Line Data and Key Metrics Changes - New loan originations reached $1.2 billion, up 36% quarter-over-quarter and 21% year-to-date, with a 5% annualized increase in the commercial portfolio [18][19] - Customer deposits increased nearly $800 million organically during the quarter, with approximately 30% of this growth attributed to new customers [18][19] - Non-interest income for the quarter was $77 million, with operating non-interest income increasing by $6 million due to the contribution from Pacific Premier Bancorp [16][19] Market Data and Key Metrics Changes - The acquisition of Pacific Premier Bancorp has enhanced Columbia's competitive position in the Pacific Northwest, with nearly 10% deposit market share in the region [3][4] - The company is focusing on organic growth opportunities in dynamic markets such as Arizona, Colorado, Nevada, and Utah, leveraging its expanded footprint [4][5] Company Strategy and Development Direction - Columbia Banking System aims to optimize its balance sheet while focusing on organic growth and enhancing customer relationships, particularly in Southern California [4][5] - The company has initiated a $700 million share repurchase program, reflecting confidence in its balance sheet and long-term shareholder value creation [21][22] - Management emphasizes a disciplined approach to lending and profitability over growth for the sake of growth, with a focus on relationship-driven loans [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate capital beyond what is required for growth, with a focus on delivering top-tier performance and capital returns [21][34] - The integration of Pacific Premier Bancorp is expected to enhance customer relationships and drive revenue synergies, with management committed to a disciplined, cost-conscious culture [9][20] - The company anticipates continued strong profitability and capital generation, with a focus on optimizing its balance sheet and enhancing long-term shareholder value [21][22] Other Important Information - The company reported a GAAP provision expense of $70 million due to purchase accounting from the acquisition, with an overall allowance for credit losses at 1.1% of total loans [12][16] - Management announced that Ron Farnsworth, the CFO, will be stepping down, with Ivan Shetta appointed as the new CFO [10][11] Q&A Session Summary Question: Insights on the buyback program and balance sheet optimization - Management indicated that the buyback program is a 12-month initiative, balancing capitalizing on valuation and maintaining flexibility for macroeconomic uncertainties [25][26] Question: Thoughts on recent activist investor presentations - Management acknowledged awareness of the presentation and reiterated their focus on consistent performance, capital returns, and the successful integration of Pacific Premier Bancorp [32][34] Question: Drivers behind strong deposit growth - Approximately 30% of the $800 million organic deposit growth came from new customers, with significant contributions from commercial and retail banking [38][39] Question: Outlook on loan growth and balance sheet optimization - Management expects to achieve around 5% annual loan growth while remixing the balance sheet to focus on higher-quality, relationship-based loans [51][52] Question: Expectations for net interest margin in the upcoming quarter - Management provided a range for net interest margin expectations, indicating stability with modest upside in Q4 [56][58]

3rd Quarter 2025 Earnings Presentation October 30, 2025 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 ...

Financial Performance - Net income for Q3 2025 was $96 million, with operating net income at $204 million, resulting in diluted earnings per share of $0.40 and operating earnings per share of $0.85[1] - Net income for Q3 2025 was $96 million, down 37% from $152 million in Q2 2025[28] - The company reported a net income of $335 million, down 14% from $390 million in the previous year[31] - Earnings per common share (basic and diluted) decreased by 18% year-over-year to $1.53[31] - Operating earnings per share (basic) was $0.86, a 12% increase from the previous quarter and a 25% increase year-over-year[61] - Net income (GAAP) for the quarter was $96 million, down 37% sequentially and 34% year-over-year[60] Revenue and Income Sources - Total interest income for Q3 2025 was $740 million, a 10% increase from $670 million in Q2 2025[28] - Non-interest income increased by $12 million to $77 million, driven by fair value adjustments and mortgage servicing rights hedging activity[14] - Total non-interest income was $77 million in Q3 2025, an 18% increase from $65 million in Q2 2025[28] - Non-interest income (GAAP) reached $77 million, reflecting an 18% increase from the previous quarter and a 17% increase year-over-year[60] - Total revenue (GAAP) for the quarter was $582 million, up 14% sequentially and 17% year-over-year[60] Assets and Liabilities - Total assets reached $67.5 billion, an increase from $51.9 billion in the previous quarter, primarily due to the acquisition of Pacific Premier[4] - Total assets grew by 30% year-over-year to $67,496 million, with loans and leases increasing by 29% to $48,462 million[33] - Total liabilities increased to $50,666 million as of September 30, 2025, compared to $46,265 million a year earlier, marking an increase of 9.2%[49] Deposits - Total deposits rose to $55.8 billion, up $14.0 billion from the prior quarter, with organic customer deposit growth of approximately $800 million[18] - Total deposits increased by 34% year-over-year to $55,771 million, with non-interest-bearing deposits rising by 35% to $17,810 million[33] - Demand, non-interest bearing deposits reached $17,810 million, up 35% sequentially and 32% year-over-year[39] Expenses - Non-interest expense rose by $115 million to $393 million, largely due to merger and restructuring expenses[15] - Total non-interest expense increased to $393 million in Q3 2025, a 41% rise from $278 million in Q2 2025[28] - Non-interest expense (GAAP) increased to $393 million, a 41% sequential increase and a 45% year-over-year increase[63] Credit Quality - The provision for credit losses was $70 million, reflecting the acquisition of Pacific Premier and adjustments to credit loss models[19] - Provision for credit losses rose significantly to $70 million in Q3 2025, compared to $30 million in Q2 2025, marking a 133% increase[28] - Non-performing assets totaled $199 million, or 0.29% of total assets, as of September 30, 2025, compared to $180 million, or 0.35% in the previous quarter[20] - The allowance for credit losses was $492 million, or 1.01% of loans and leases, compared to 1.17% in the previous quarter[19] - Net charge-offs were 0.22% of average loans and leases for Q3 2025, down from 0.31% in Q2 2025[20] Shareholder Returns - The Board of Directors authorized a $700 million share repurchase program to enhance capital return to shareholders[8] - Dividends per common share remained stable at $0.36 for the quarter ended September 30, 2025, unchanged from the previous year[34] Capital Position - Shareholders' equity rose by 46% year-over-year to $7,790 million, reflecting strong capital growth[33] - Total risk-based capital ratio increased to 13.4%, up from 13.0% in the previous quarter, indicating stronger capital position[34] - The tangible common shareholders' equity increased by 43% sequentially to $5,555 million as of September 30, 2025, from $3,883 million as of June 30, 2025[58] Operational Efficiency - Return on average assets (ROAA) decreased to 0.67%, down from 1.19% in the previous quarter and 1.10% a year ago[34] - Efficiency ratio rose to 67.29%, compared to 54.29% in the previous quarter and 54.61% a year ago, indicating increased operational costs[34] - Operating return on average tangible common equity increased to 18.24%, up from 16.85% in the previous quarter, showing improved operational efficiency[34]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Insights - Columbia Banking System, Inc. reported a net income of $96 million for Q3 2025, with diluted earnings per share of $0.40, reflecting a strategic acquisition of Pacific Premier and strong core profitability despite acquisition-related impacts [1][7][33] - The company authorized a $700 million share repurchase program, indicating confidence in its capital generation and strategic direction [1][6][14] Financial Performance - Net interest income increased to $505 million, up $59 million from Q2 2025, driven by one month of combined operations and a favorable shift to lower-cost funding sources [7][14][18] - The net interest margin improved to 3.84%, a rise of 9 basis points from the previous quarter, supported by increased customer deposits and reduced reliance on higher-cost funding [2][15][16] - Non-interest income rose to $77 million, an increase of $12 million from Q2 2025, primarily due to fair value adjustments and one month of combined operations [8][18] Expenses and Credit Quality - Non-interest expenses surged to $393 million, up $115 million from the prior quarter, largely due to merger and restructuring costs [3][19] - The provision for credit losses was $70 million, reflecting the acquisition of Pacific Premier, with net charge-offs at 0.22% of average loans, down from 0.31% in the previous quarter [4][9][24] - Non-performing assets decreased to 0.29% of total assets, down from 0.35% as of June 30, 2025, indicating improved credit quality [4][24] Balance Sheet and Capital - Total assets reached $67.5 billion, up from $51.9 billion as of June 30, 2025, due to the acquisition [20] - Total deposits increased to $55.8 billion, a rise of $14 billion, driven by the acquisition and organic growth [22] - The book value per common share was $26.04, reflecting an increase from $25.41 as of June 30, 2025, supported by capital generation and the acquisition [25][26] Strategic Developments - The acquisition of Pacific Premier was completed on August 31, 2025, enhancing Columbia's market position in Southern California and completing its Western footprint [11][12] - The company began operating under a unified brand on September 1, 2025, streamlining its identity across various business lines [12]

Core Insights - HoldCo Asset Management, LP has released a follow-up presentation to the Board of Directors of Columbia Banking System, Inc., highlighting the need for protective covenants due to failed gambles solely borne by owners [1] Company Overview - HoldCo Asset Management, LP is based in Fort Lauderdale, Florida, and manages approximately $2.6 billion in regulatory assets [2] Investment Position - HoldCo disclosed ownership of common stock in Columbia Banking System, Inc., indicating an economic interest in the price of these securities [1][2]

Core Viewpoint - HoldCo Asset Management, a hedge fund based in Fort Lauderdale, Florida, is challenging American banks, particularly regional lenders, to improve governance and shareholder value, threatening public campaigns against underperforming management [1][4][5]. Group 1: Activism and Mergers - HoldCo successfully pressured Comerica to agree to a $10.9 billion merger with Fifth Third, marking the largest bank merger of the year [2]. - The fund has initiated activist campaigns against Eastern Bank and First Interstate, with plans for a proxy battle against Columbia Bank, which has $70 billion in assets [3][5]. - HoldCo's activism is reviving a trend in an industry that has been largely insulated from such movements since the 2008 financial crisis [4]. Group 2: Market Conditions and Opportunities - Regional banks are currently vulnerable due to struggles following the 2023 crisis involving Silicon Valley Bank and First Republic, making them attractive targets for activists [5][13]. - The current regulatory environment under the Trump administration is perceived to favor mergers, providing activists with a clearer exit strategy [5]. Group 3: Management Critique - HoldCo's founders argue that many regional bank CEOs prioritize personal financial gain over shareholder interests, leading to undervaluation of their banks [8][9]. - Compensation structures incentivize CEOs to pursue acquisitions that may not benefit shareholders, with boards often acting as rubber stamps for such decisions [9][12]. - The performance of regional banks has lagged behind larger peers and broader stock indexes, with the S&P Regional Banking ETF still 14% below its 2021 peak [13]. Group 4: HoldCo's Strategy and Background - HoldCo has amassed over $1 billion in regional bank shares and is employing a strategy of public shaming and proxy battles to enforce accountability [15][32]. - The founders, Ghei and Zaitzeff, have a history of identifying undervalued assets and have built their reputation through confrontations with bank management [22][29]. - Their approach includes direct discussions with bank CEOs and public presentations to advocate for shareholder-friendly actions [16][21]. Group 5: Future Plans - HoldCo intends to continue its activist approach, planning to publish reports on banks that destroy shareholder value, even if they do not hold stakes in those firms [32]. - The firm is also targeting Bank United, having acquired nearly 5% of its shares, and plans to initiate a proxy battle unless management agrees to enhance shareholder returns [31].

Group 1: JPMorgan Chase & Co. - JPMorgan Chase reported third-quarter 2025 net income of $14.4 billion, or $5.07 per share, which is a 12% increase year over year, surpassing the analyst estimate of $4.84 per share [1] - The company's sales reached $47.12 billion, exceeding expectations of $45.39 billion [1] - Shares of JPMorgan gained 1.6% to close at $302.36 [6] Group 2: Illumina, Inc. - Illumina is set to announce its third-quarter earnings on October 30, with analysts expecting earnings of $1.17 per share on revenue of $1.07 billion [2] - Illumina shares rose 4.2% to close at $99.50 during the session [6] Group 3: Columbia Banking System, Inc. - Columbia Banking System was upgraded from Market Perform to Outperform by Keefe, Bruyette & Woods, with a price target raised from $30 to $31 [3] - The stock has a yield of 5.7% and a price-to-earnings ratio of 10 times [2] - Shares of Columbia Banking System gained 4.3% to close at $25.36 [6] Group 4: Alibaba Group Holding Limited - Alibaba introduced a new computing pooling system called Aegaeon, which reduces reliance on Nvidia GPUs by 82% for AI models [4] - Shares of Alibaba gained 3.8% to settle at $173.47 [6]

Core Insights - Columbia Banking (COLB) has a strong track record of exceeding earnings estimates, particularly in the last two quarters, with an average surprise of 10.75% [1][5] - The most recent earnings report showed an actual earnings per share (EPS) of $0.76, surpassing the expected $0.66 by 15.15%, while the previous quarter's EPS was $0.67 against an expectation of $0.63, resulting in a 6.35% surprise [2] Earnings Estimates and Predictions - Estimates for Columbia Banking have been increasing, driven by its history of earnings surprises, and the stock currently has a positive Zacks Earnings ESP of +1.78%, indicating bullish sentiment among analysts [5][8] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat, with historical data showing that such combinations lead to positive surprises nearly 70% of the time [6][8] Earnings ESP Explanation - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions, which may provide a more accurate prediction [7] - A negative Earnings ESP can diminish the predictive power of the metric, but it does not necessarily indicate an earnings miss [9] Importance of Earnings ESP - While many companies may beat consensus EPS estimates, this alone may not drive stock price increases; thus, checking the Earnings ESP before quarterly releases is crucial for investment decisions [10]

Core Viewpoint - Value investing remains a preferred strategy for identifying strong stocks across various market conditions, focusing on undervalued stocks to maximize profits [2]. Group 1: Columbia Banking System (COLB) - Columbia Banking System (COLB) has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong investment potential [4]. - COLB's P/E ratio is 8.7, significantly lower than the industry average of 10.82, suggesting it may be undervalued [4]. - The stock's P/B ratio is 1.04, compared to the industry's average of 1.34, further indicating solid valuation metrics [5]. - COLB's P/S ratio stands at 1.87, lower than the industry average of 2.32, reinforcing its attractiveness to value investors [6]. - The P/CF ratio for COLB is 9.39, compared to the industry's average of 10.97, highlighting its favorable cash flow outlook [7]. - Over the past year, COLB's Forward P/E has fluctuated between 7.59 and 11.81, with a median of 9.10 [4]. Group 2: Zions Bancorporation (ZION) - Zions Bancorporation (ZION) also holds a Zacks Rank of 2 (Buy) and a Value score of A, making it another attractive investment option [8]. - ZION's forward earnings multiple is 10.10, which is in line with the industry average P/E of 10.82 [8]. - The PEG ratio for ZION is 1.52, compared to the industry's PEG ratio of 1.23, indicating a reasonable growth valuation [8]. - ZION's P/B ratio is 1.33, closely matching the industry's average of 1.34, suggesting it is fairly valued [9]. - Over the past year, ZION's Forward P/E has ranged from 7.65 to 12.64, with a median of 9.98 [9]. Group 3: Investment Outlook - Both COLB and ZION exhibit strong value grades and are likely undervalued based on their key financial metrics, making them compelling investment opportunities [10].