Columbia Banking System(US:COLB)2025-11-05 22:35Earnings Performance - Earnings per diluted common share decreased to $0.40 for Q3 2025 from $0.73 in Q2 2025, primarily due to higher non-interest expenses related to the Pacific Premier acquisition [163]. - Net income for the three months ended September 30, 2025, was $96 million, a decrease from $152 million for the prior quarter, primarily due to a $115 million increase in non-interest expense [180]. - For the nine months ended September 30, 2025, net income was $335 million, down from $390 million in the same period last year, attributed to increased non-interest expenses and provisions for credit losses [181]. Interest Income and Margin - Net interest margin improved to 3.84% for Q3 2025, up from 3.75% in Q2 2025, driven by a favorable shift to lower-cost funding sources [163]. - Net interest income for the three months ended September 30, 2025, was $505 million, an increase of $59 million compared to the prior quarter [187]. - The net interest margin for the three months ended September 30, 2025, was 3.84%, up from 3.75% in the previous quarter [188]. Loan and Deposit Growth - Total loans and leases rose to $48.5 billion as of September 30, 2025, an increase of $10.8 billion since December 31, 2024, mainly from the Pacific Premier acquisition [167]. - Total deposits reached $55.8 billion as of September 30, 2025, up $14.1 billion from December 31, 2024, driven by the addition of Pacific Premier deposits [167]. - Core deposits reached $51.5 billion as of September 30, 2025, compared to $37.5 billion at December 31, 2024, reflecting a significant increase in stable funding sources [261]. Non-Interest Income and Expenses - Non-interest income increased to $77 million in Q3 2025, compared to $65 million in Q2 2025, attributed to fair value adjustments and MSR hedging activity [163]. - Non-interest expense for the nine months ended September 30, 2025, was $1.0 billion, an increase from $838 million in the same period of 2024, largely due to merger-related costs [167]. - Total non-interest expense for the nine months ended September 30, 2025, rose by 21% to $1,011 million from $838 million in the prior year, largely due to the acquisition-related costs [207]. Credit Quality and Allowance for Credit Losses - The allowance for credit losses (ACL) was $492 million as of September 30, 2025, reflecting an increase of $51 million from December 31, 2024, due to loan growth from the acquisition [167]. - Provision for credit losses was $70 million for Q3 2025, compared to $30 million in Q2 2025, reflecting initial provisions for acquired loans [168]. - Net charge-offs for the nine months ended September 30, 2025, were $81 million, a decrease of 22% from $104 million in the prior year, with a net charge-off rate of 0.28% compared to 0.37% [200]. Capital and Liquidity - Total available liquidity was $26.7 billion, representing 40% of total assets and 130% of estimated uninsured deposits as of September 30, 2025 [174]. - Shareholders' equity increased to $7.8 billion as of September 30, 2025, up $2.7 billion from December 31, 2024, driven by the fair value of common shares issued and net income of $335 million [268]. - The Company recorded $270 million in dividends paid by the Bank during the nine months ended September 30, 2025, reflecting ongoing capital returns to shareholders [264]. Acquisition Impact - The acquisition of Pacific Premier was completed on August 31, 2025, enhancing the company's footprint and service offerings in the western United States [162]. - The increase in non-interest income was attributed to one month of combined operations following the acquisition of Pacific Premier [203]. - Goodwill increased to $1.5 billion as of September 30, 2025, from $1.0 billion at December 31, 2024, primarily due to the $452 million goodwill recorded from the acquisition of Pacific Premier [251]. Risk Management and Regulatory Compliance - Columbia's total risk-based capital ratio was 13.4% and CET1 capital ratio was 11.6% as of September 30, 2025, up from 12.8% and 10.5% respectively as of December 31, 2024 [174]. - The total capital to risk-weighted assets ratio for Columbia was 13.45% as of September 30, 2025, exceeding the regulatory minimum of 8.00% [272]. - The Bank's credit quality administration department is responsible for monitoring asset quality and enforcing credit policies across the institution [241].