Columbia Banking System(US:COLB)2026-01-22 23:00Financial 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]