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Is Columbia Banking Attractive Now With Dividend Yield and Buybacks?
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Key Takeaways
COLB offers a 5.1% dividend yield and a $700M buyback plan, backed by strong capital levels.
The Pacific Premier deal is set to deliver $127M in annual cost savings, $48M realized so far.
COLB trades at 9.55X forward earnings, below peers and sector averages, despite improving fundamentals.
Columbia Banking (COLB - Free Report) has leaned into dividend income and share buybacks while it integrates Pacific Premier. The balance sheet and margin profile give management room to reward shareholders, with execution through 2026 the swing factor.
Columbia Banking’s shares are up 29.4% in the past six months, outperforming the industry’s rally of 17.4%.
Image Source: Zacks Investment Research
COLB’s Income and Capital Return Snapshot
Columbia Banking has a 5.06% dividend yield supported by a recent increase to 37 cents per share. The board has also authorized up to $700 million in share repurchases through Nov. 30, 2026.
Columbia Banking System, Inc. Dividend Yield (TTM)
Columbia Banking’s capital levels sit above the regulatory requirements. As of Sept. 30, 2025, the common equity Tier 1 ratio was 11.6% and total risk-based capital was 13.4%. This gives the bank excess capacity to fund dividends and buybacks as Pacific Premier integration synergies ramp. Management has highlighted strong capital generation and tangible book earnback backing opportunistic deployment.
Columbia Banking Trades at a Discount
COLB trades at 9.55X forward 12-month earnings versus 17.36X for the broader Finance sector and 23.35X for the S&P 500.
Columbia Banking is also trading at a discount compared with peers, including East West Bancorp (EWBC - Free Report) and WaFd (WAFD - Free Report) , shares of which are trading at 11.28X and 10.61X, respectively.
Over five years, COLB stock’s P/E has ranged from 4.94X to 22.43X, with a median of 9.24X. That setup leaves room for return drivers (repurchases, synergy capture, margin defense) to close part of the relative discount, even as the company navigates integration milestones.
COLB’s Earnings Drivers to Support Returns
Columbia Banking’s net interest margin (NIM) improved to 3.84% in the third quarter of 2025 and is expected to be approximately 3.90% in the fourth quarter, aided by a one-time deposit premium amortization that fully runs off by year-end. In the first quarter of 2026, management expects a similar NIM, with earning assets likely to be modestly lower. Further, excluding the one-time item, core net interest income is anticipated to be relatively stable.
With deposit betas for interest rate cuts targeted around half and proactive repricing, the company is set up to defend NIM, underpinning steady core earnings as rates fall.
On the cost front, the Pacific Premier deal is expected to generate $127 million of targeted annualized savings, of which $48 million was realized by Sept. 30, 2025. The synergy cadence, together with a shift toward relationship-driven C&I and owner-occupied CRE, supports steady earnings growth in 2026.
The Zacks Consensus Estimate for COLB’s fourth-quarter 2025 earnings is pegged at 74 cents per share, reflecting a year-over-year growth of 4.2%. For 2025, the consensus mark is pegged at $2.91 per share, unchanged over the past 30 days and suggests a rise of 7.4% from 2024.
Non-interest expenses rose sharply in the third quarter on the back of merger and restructuring costs and one month of combined operations. Management targets operating expenses (excluding core deposit intangible amortization) to be $330-$340 million per quarter for the next several quarters, with CDI amortization around $40 million per quarter.
The Pacific Premier system conversion is planned for the first quarter of 2026, with a normalized expense run-rate targeted for the third quarter of 2026 as cost savings fully materialize. Until then, efficiency and near-term returns will remain pressured.
Execution Risks to Hurt COLB’s Prospects
Headline loan growth expectations for Columbia Banking looks muted as it intentionally manages down roughly $8 billion of inherited transactional loans over about eight quarters starting in the third quarter of 2025. Further, competitive deposit markets across the footprint, including pushback from national and regional peers, will continue to pressure funding costs.
Additionally, credit remains a watch item in small-ticket leasing (FinPac) and office loans (comprise 8% of total loans). During the third quarter of 2025, net charge-offs increased sequentially in FinPac, and non-performing assets rose year over year. Credit costs are likely to stay uneven while integration progresses.
Given the Pacific Premier conversion timing and expense normalization later in 2026, patient investors should wait for confirmation from margin stability, operating expense traction and credit trends before leaning into COLB’s valuation gap. Columbia Banking trades around $29 with a 6–12 months price target of $31, implying modest upside from current levels.
Among its peers, East West Bancorp carries a Zacks Rank #2 (Buy), while WaFd carries a Zacks Rank #3.
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Is Columbia Banking Attractive Now With Dividend Yield and Buybacks?
Key Takeaways
Columbia Banking (COLB - Free Report) has leaned into dividend income and share buybacks while it integrates Pacific Premier. The balance sheet and margin profile give management room to reward shareholders, with execution through 2026 the swing factor.
Columbia Banking’s shares are up 29.4% in the past six months, outperforming the industry’s rally of 17.4%.
Image Source: Zacks Investment Research
COLB’s Income and Capital Return Snapshot
Columbia Banking has a 5.06% dividend yield supported by a recent increase to 37 cents per share. The board has also authorized up to $700 million in share repurchases through Nov. 30, 2026.
Columbia Banking System, Inc. Dividend Yield (TTM)
Columbia Banking System, Inc. dividend-yield-ttm | Columbia Banking System, Inc. Quote
Columbia Banking’s capital levels sit above the regulatory requirements. As of Sept. 30, 2025, the common equity Tier 1 ratio was 11.6% and total risk-based capital was 13.4%. This gives the bank excess capacity to fund dividends and buybacks as Pacific Premier integration synergies ramp. Management has highlighted strong capital generation and tangible book earnback backing opportunistic deployment.
Columbia Banking Trades at a Discount
COLB trades at 9.55X forward 12-month earnings versus 17.36X for the broader Finance sector and 23.35X for the S&P 500.
Columbia Banking is also trading at a discount compared with peers, including East West Bancorp (EWBC - Free Report) and WaFd (WAFD - Free Report) , shares of which are trading at 11.28X and 10.61X, respectively.
Over five years, COLB stock’s P/E has ranged from 4.94X to 22.43X, with a median of 9.24X. That setup leaves room for return drivers (repurchases, synergy capture, margin defense) to close part of the relative discount, even as the company navigates integration milestones.
COLB’s Earnings Drivers to Support Returns
Columbia Banking’s net interest margin (NIM) improved to 3.84% in the third quarter of 2025 and is expected to be approximately 3.90% in the fourth quarter, aided by a one-time deposit premium amortization that fully runs off by year-end. In the first quarter of 2026, management expects a similar NIM, with earning assets likely to be modestly lower. Further, excluding the one-time item, core net interest income is anticipated to be relatively stable.
With deposit betas for interest rate cuts targeted around half and proactive repricing, the company is set up to defend NIM, underpinning steady core earnings as rates fall.
On the cost front, the Pacific Premier deal is expected to generate $127 million of targeted annualized savings, of which $48 million was realized by Sept. 30, 2025. The synergy cadence, together with a shift toward relationship-driven C&I and owner-occupied CRE, supports steady earnings growth in 2026.
The Zacks Consensus Estimate for COLB’s fourth-quarter 2025 earnings is pegged at 74 cents per share, reflecting a year-over-year growth of 4.2%. For 2025, the consensus mark is pegged at $2.91 per share, unchanged over the past 30 days and suggests a rise of 7.4% from 2024.
Columbia Banking System, Inc. Price and Consensus
Columbia Banking System, Inc. price-consensus-chart | Columbia Banking System, Inc. Quote
Integration Costs Weigh on COLB’s Efficiency
Non-interest expenses rose sharply in the third quarter on the back of merger and restructuring costs and one month of combined operations. Management targets operating expenses (excluding core deposit intangible amortization) to be $330-$340 million per quarter for the next several quarters, with CDI amortization around $40 million per quarter.
The Pacific Premier system conversion is planned for the first quarter of 2026, with a normalized expense run-rate targeted for the third quarter of 2026 as cost savings fully materialize. Until then, efficiency and near-term returns will remain pressured.
Execution Risks to Hurt COLB’s Prospects
Headline loan growth expectations for Columbia Banking looks muted as it intentionally manages down roughly $8 billion of inherited transactional loans over about eight quarters starting in the third quarter of 2025. Further, competitive deposit markets across the footprint, including pushback from national and regional peers, will continue to pressure funding costs.
Additionally, credit remains a watch item in small-ticket leasing (FinPac) and office loans (comprise 8% of total loans). During the third quarter of 2025, net charge-offs increased sequentially in FinPac, and non-performing assets rose year over year. Credit costs are likely to stay uneven while integration progresses.
Is Columbia Banking Stock Worth Considering?
At present, COLB carries a Zacks Rank #3 (Hold) with a VGM Score D and component scores of Value C, Growth F, and Momentum C. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Given the Pacific Premier conversion timing and expense normalization later in 2026, patient investors should wait for confirmation from margin stability, operating expense traction and credit trends before leaning into COLB’s valuation gap. Columbia Banking trades around $29 with a 6–12 months price target of $31, implying modest upside from current levels.
Among its peers, East West Bancorp carries a Zacks Rank #2 (Buy), while WaFd carries a Zacks Rank #3.