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COLB Stock Rallies 33% in 6 Months: Can It Sustain the Momentum?
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Key Takeaways
COLB stock rose 32.6% in six months, outpacing peers after strong Q3 results and a major acquisition.
The Pacific Premier deal boosted NIM, with Q4 and Q1 NIM guided to stay just above 3.90%.
COLB targets $127M in annual cost savings, with $48M already realized and more synergies ahead.
Columbia Banking (COLB - Free Report) stock has risen 32.6% in the past six months on the back of robust quarterly performance, the Pacific Premier acquisition (completed in August) and favorable changes to the operating backdrop. The company shares have outperformed the industry’s gain of 19.1% and its peers, East West Bancorp (EWBC - Free Report) and Western Alliance Bancorporation (WAL - Free Report) , in the same time frame.
The company’s third-quarter 2025 results showed improving net interest margin (NIM), strong capital base and a broader Western footprint following the Pacific Premier deal. Total revenues rose 17% year over year, with net interest income (NII) up 17% and NIM at 3.84% versus 3.56% a year ago. The company emphasized a diversified, granular deposit base across eight Western states, supporting resilient NII.
Six-Month Price Performance
Image Source: Zacks Investment Research
Factors to Support COLB Stock's Upward Momentum
Management expects fourth-quarter 2025 NIM “just north of” 3.90%, aided by roughly $12 million of deposit premium amortization that temporarily adds about 8 basis points. A similar NIM is targeted for the first quarter of 2026, with earning assets slightly lower.
Additionally, deposit costs will continue to ease as the bank defends core relationship deposits, lowers wholesale funding, and targets deposit betas of roughly half on cuts, supporting NII resilience in a down-rate drift. This points to stable quarterly NII excluding the one-time item, a potential support for the stock if reported as guided.
COLB board authorized up to $700 million in share repurchases through Nov. 30, 2026, providing a sizable buyback lever that can lift per-share metrics if deployed. The quarterly dividend was raised 2.8% to 37 cents per share, with a 5.1% yield. The company’s robust capital ratios, CET1 at 11.6% and total risk-based at 13.4% as of Sept. 30, 2025, sit above regulatory requirements. This will enable sustainable dividends and opportunistic buybacks without crimping growth.
Management targets $127 million in annual cost savings from the Pacific Premier deal, with $48 million already realized by Sept. 30, 2025. Operating expenses ex-core deposit intangible are anticipated to be in the range of $330–$340 million per quarter for the next several quarters. Further, Pacific Premier system conversion is slated for the first quarter of 2026, with a normalized expense run rate expected by the third quarter of 2026. As Columbia Banking reaches these milestones and generates expense synergies, its stock will have further upside potential.
COLB plans to run off roughly $8 billion of inherited transactional loans over about eight quarters starting in the third quarter of 2025, pivoting toward relationship-based C&I and owner-occupied CRE tied to deposits. Also, mix shift toward durable fee income generation from fee platforms, like treasury management, card, wealth and trust, homeowners association banking, escrow and 1031 exchanges, will drive the company’s performance.
Columbia Banking’s Cheap Valuation
COLB trades at 9.52X forward 12-month earnings, which is below the industry level and carries a $31 price target that anchors base-case expectations. To approach that level, management should deliver on the NIM targets, execute the expense run-rate timeline and drive steady credit. Shortfalls on any of these could result in bearish investor sentiments.
Columbia Banking is also trading at a discount compared with East West Bancorp, which has a forward P/E of 11.27X. On the other hand, COLB stock is expensive compared with Western Alliance’s forward P/E of 8.30X.
The Zacks Consensus Estimate for COLB’s 2025 and 2026 earnings is pegged at $2.91 and $3.07, respectively. This reflects a year-over-year growth of 7.4% for 2025 and 5.6% for 2026.
Image: Bigstock
COLB Stock Rallies 33% in 6 Months: Can It Sustain the Momentum?
Key Takeaways
Columbia Banking (COLB - Free Report) stock has risen 32.6% in the past six months on the back of robust quarterly performance, the Pacific Premier acquisition (completed in August) and favorable changes to the operating backdrop. The company shares have outperformed the industry’s gain of 19.1% and its peers, East West Bancorp (EWBC - Free Report) and Western Alliance Bancorporation (WAL - Free Report) , in the same time frame.
The company’s third-quarter 2025 results showed improving net interest margin (NIM), strong capital base and a broader Western footprint following the Pacific Premier deal. Total revenues rose 17% year over year, with net interest income (NII) up 17% and NIM at 3.84% versus 3.56% a year ago. The company emphasized a diversified, granular deposit base across eight Western states, supporting resilient NII.
Six-Month Price Performance
Image Source: Zacks Investment Research
Factors to Support COLB Stock's Upward Momentum
Management expects fourth-quarter 2025 NIM “just north of” 3.90%, aided by roughly $12 million of deposit premium amortization that temporarily adds about 8 basis points. A similar NIM is targeted for the first quarter of 2026, with earning assets slightly lower.
Additionally, deposit costs will continue to ease as the bank defends core relationship deposits, lowers wholesale funding, and targets deposit betas of roughly half on cuts, supporting NII resilience in a down-rate drift. This points to stable quarterly NII excluding the one-time item, a potential support for the stock if reported as guided.
COLB board authorized up to $700 million in share repurchases through Nov. 30, 2026, providing a sizable buyback lever that can lift per-share metrics if deployed. The quarterly dividend was raised 2.8% to 37 cents per share, with a 5.1% yield. The company’s robust capital ratios, CET1 at 11.6% and total risk-based at 13.4% as of Sept. 30, 2025, sit above regulatory requirements. This will enable sustainable dividends and opportunistic buybacks without crimping growth.
Management targets $127 million in annual cost savings from the Pacific Premier deal, with $48 million already realized by Sept. 30, 2025. Operating expenses ex-core deposit intangible are anticipated to be in the range of $330–$340 million per quarter for the next several quarters. Further, Pacific Premier system conversion is slated for the first quarter of 2026, with a normalized expense run rate expected by the third quarter of 2026. As Columbia Banking reaches these milestones and generates expense synergies, its stock will have further upside potential.
COLB plans to run off roughly $8 billion of inherited transactional loans over about eight quarters starting in the third quarter of 2025, pivoting toward relationship-based C&I and owner-occupied CRE tied to deposits. Also, mix shift toward durable fee income generation from fee platforms, like treasury management, card, wealth and trust, homeowners association banking, escrow and 1031 exchanges, will drive the company’s performance.
Columbia Banking’s Cheap Valuation
COLB trades at 9.52X forward 12-month earnings, which is below the industry level and carries a $31 price target that anchors base-case expectations. To approach that level, management should deliver on the NIM targets, execute the expense run-rate timeline and drive steady credit. Shortfalls on any of these could result in bearish investor sentiments.
Columbia Banking is also trading at a discount compared with East West Bancorp, which has a forward P/E of 11.27X. On the other hand, COLB stock is expensive compared with Western Alliance’s forward P/E of 8.30X.
The Zacks Consensus Estimate for COLB’s 2025 and 2026 earnings is pegged at $2.91 and $3.07, respectively. This reflects a year-over-year growth of 7.4% for 2025 and 5.6% for 2026.
Columbia Banking System, Inc. Price and Consensus
Columbia Banking System, Inc. price-consensus-chart | Columbia Banking System, Inc. Quote
COLB’s Zacks Rank
With a Zacks Rank #3 (Hold) and VGM Score of D, Columbia Banking’s next 1–3 months look balanced. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.