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Columbia Banking's 2026 Playbook After Pacific Premier Buyout

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Key Takeaways

  • COLB now spans eight Western states and ~350 branches after the Pacific Premier deal closed in August 2025.
  • COLB's NIM rose to 4.06% in Q4 2025, with management aiming to stay above 4% by mid-2026.
  • COLB has $700M buyback authority through late 2026, with plans for $150-$200M repurchased per quarter.

Columbia Banking (COLB - Free Report) now spans eight Western states with roughly 350 branches and a relationship-first model linking commercial, small business, consumer and wealth teams. Shares have outperformed the industry over six months, aided by four consecutive earnings beats. 

 

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COLB’s non-interest income base is broadening as treasury, card, and trust take a larger role, while capital strength supports a ramped share buyback plan.  

COLB’s Scale and Fee Income Durability

Columbia Banking’s enlarged Western footprint, bolstered by the Pacific Premier acquisition (closed in August 2025), is feeding a stronger cross-sell engine across treasury, card and trust. In 2025, treasury management and commercial card fees grew, while financial services and trust revenues expanded notably. Card, financial services and trust represented nearly 34% of non-interest income in 2025, helping shift the mix toward more durable fee income streams. 

The acquired platforms add depth, including Custodial Trust Services, homeowners association banking, escrow and 1031 exchanges. Since closing, post-merger cross-sell referrals have exceeded 1,200, with campaign activity also driving deposit inflows, evidence that the broader Western network is unlocking higher wallet share.

Columbia Banking’s Margin Defense in a Easing-Rate World

COLB’s net interest margin (NIM) improved from 3.64% in fourth-quarter 2024 to 4.06% in fourth-quarter 2025 as deposit costs eased and wholesale funding was reduced. Management targets deposit betas for rate cuts around half and is proactively repricing, positioning NIM to trend higher each quarter in 2026 and surpass 4% by mid-year. 

As of Dec. 31, 2025, deposits totaled $54.2 billion and remain granular, skewed toward non-interest-bearing and money market balances. Columbia Banking’s focus on protecting core relationships and optimizing funding will likely help NIM expansion even as policy rates edge lower.

COLB’s Remix Away From Transactional Credit

Columbia Banking is deliberately running off roughly $8 billion of inherited transactional credits, mostly multifamily, over eight quarters that began in the third-quarter of 2025, and does not plan to rebuild that portfolio. The pivot is toward relationship-driven commercial and industrial (C&I) lending and owner-occupied commercial real estate (CRE) tied to deposits and fees. 

As of December 31, 2025, C&I and owner-occupied CRE accounted for 22% and 15% of loans, respectively, with C&I production and pipelines improving in the fourth quarter. Loan growth is expected to remain subdued as runoff offsets originations into roughly 2027, but the mix shift supports better economics and operating leverage.

COLB’s Operating Leverage From Integration

The Pacific Premier transaction carries $127 million of targeted annualized cost saves, with $63 million realized by year-end 2025. Systems conversion is slated for the ongoing quarter, with Columbia Banking expecting all cost savings to be realized by the end of the second quarter 2026 and a normalized expense base thereafter. 

COLB projects operating expenses (excluding core deposit intangible amortization) to $335-$345 million in the first two quarters before modestly declining in the third. That cadence sets the foundation for multi-year earnings growth models as efficiencies replace near-term integration noise. 
 

Capital Deployment as a Differentiator for Columbia Banking

Columbia Banking’s CET1 ratio stands at 11.8% and total risk-based capital ratio at 13.6% as of Dec. 31, 2025, creating capacity for stepped-up share repurchases and a higher dividend payout. In October 2025, the board authorized up to $700 million of repurchases through late 2026. The company plans to repurchase $150-$200 million per quarter this year, with $600 million remaining at the end of 2025. 

COLB repurchased 3.7 million shares in fourth-quarter 2025 at an average $27.07 and raised the quarterly dividend to 37 cents. With headline loan growth muted by runoff, excess capital and repurchases can magnify per-share value and offset mix-related balance-sheet shrinkage.

Columbia Banking’s Zacks Rank & Peer Comparison

Some major factors to watch for COLB include office exposure at 8% of loans, where repricing runs over multiple years, and loss normalization in small-ticket leasing at FinPac after sequentially higher net charge-offs in the fourth quarter. Moreover, non-performing assets have edged higher, though reserves and discounts provide absorption capacity. 

COLB currently carries a Zacks Rank #3 (Hold) with Style Scores of VGM: D, Value: C, Growth: F and Momentum: C. The combination suggests a balanced near-term risk-reward profile while momentum trends improve. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among Western peers, East West Bancorp (EWBC - Free Report) and Western Alliance (WAL - Free Report) also sit at Zacks Rank #3, reflecting a similar balance between macro cross-currents and franchise-specific execution. EWBC and WAL remain key competitors for COLB in the region’s commercial banking space. 


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