Core Insights - Columbia Banking System (COLB) is shifting from transactional loans to full relationship banking following the Pacific Premier acquisition, focusing on granular deposits and fee platforms to enhance earnings durability [1][9] Loan Strategy - Management plans to reduce $8 billion in inherited transactional loans, primarily multifamily, over eight quarters starting in Q3 2025, reallocating capital to relationship-driven commercial and industrial (C&I) and owner-occupied commercial real estate (CRE) [2][9] - As of September 30, 2025, C&I and owner-occupied CRE loans represented approximately 21% and 15% of total loans, respectively, with a focus on lending that enhances leverage and returns [4] Financial Performance - The net interest margin (NIM) improved to 3.84% in Q3 2025 from 3.56% a year earlier, driven by increased customer deposits and reduced reliance on higher-cost wholesale funding [3][9] - NIM is projected to reach 3.90% in Q4 2025 and Q1 2026, supported by lower funding costs from relationship deposits [6] Revenue Growth - Fee income from treasury management and commercial card services has expanded, with non-interest income from these services making up nearly 30% as of September 30, 2025 [7] - Management anticipates a high-teens operating return on tangible common equity (ROTCE) and earnings in the low $3s for 2026, aligning with synergy realization and the loan mix shift [7][10] Relationship Development - Columbia Banking has seen improvements in C&I production and pipelines, indicating the effectiveness of its new strategy, with over 1,200 cross-sell referrals generated since the Pacific Premier deal [5] - The acquisition is expected to enhance the breadth of products offered, supporting deeper customer relationships and increasing wallet share [4]

Financial Performance - Net income for Q3 2025 was $7.5 million, with diluted EPS at $0.47[8] - Pre-tax pre-provision net income improved by 28% sequentially[8] - The tax-equivalent net interest margin increased to 3.08% from 2.93%, a 15 basis point increase[8, 15] Loan and Deposit Portfolio - Total deposits increased by $137.5 million, driven by existing and new relationships[8] - Non-interest bearing deposits represent 43.1% of total deposits[8, 27] - $100.7 million in new loans were originated, with $69.0 million funded, including $85.3 million in commercial loans originated ($65.4 million funded)[8] - Non-accrual loans decreased to 1.51% of total loans from 1.57% in the prior quarter[8] Capital and Liquidity - The bank repurchased $1.1 million in shares in Q3 2025[8, 18] - Total risk-based capital remained strong at 16.13%[8, 17] - Immediately available net funding of $2.0 billion, representing 202% coverage of estimated uninsured deposits[8, 20]