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COLB Leans on Relationship Deposits as Western Competition Heats Up
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Key Takeaways
Columbia Banking faces rising deposit pressure from fintechs and major banks in Western markets.
COLB targets NIM above 4% in 2026 through deposit repricing and lower-cost funding shifts.
Pacific Premier adds fee platforms and cross-sell opportunities to deepen customer relationships.
Columbia Banking System, Inc. (COLB - Free Report) is operating in a Western banking arena where deposit competition is turning into a daily grind. Large national banks are pressing deeper into key Pacific Northwest corridors, while fintech and online banks are pulling rate-sensitive customers toward higher-yield products.
That backdrop matters because deposit strength is central to funding costs and long-term profitability. COLB is leaning on relationship banking and portfolio repositioning to defend funding and keep earnings power intact.
COLB Competition Is Shifting Across Western Markets
Competition is intensifying across COLB’s footprint as large national banks, including U.S. Bank, JPMorgan Chase, and Wells Fargo, expand in the Pacific Northwest. At the same time, fintech and online banks are attracting depositors with higher-yield offerings.
COLB has meaningful scale in its home markets, holding about 10% deposit share in its core regions. But its presence is limited in faster-growing markets like Phoenix and Denver, where it has less than 0.1% deposit share. This competitive gap makes Zions Bancorporation, N.A. (ZION - Free Report) and Western Alliance Bancorporation (WAL - Free Report) especially relevant benchmarks for COLB, as both Zions Bancorporation and Western Alliance Bancorporation have stronger regional positioning in markets where Columbia Banking is still building scale.
The risk is straightforward, as pricing pressure rises, low-cost deposits become harder to protect. The company has already experienced periods when higher short-term rates forced deposit repricing, lifting funding costs and compressing the advantage of a granular deposit base.
Columbia Banking’s Defense: Relationship Deposits
COLB positions itself as a “Business Bank of Choice,” built around full-relationship banking that connects commercial, small business, consumer, and wealth teams. The goal is to broaden wallet share and make deposits stickier by embedding the bank deeper into customer operations.
Deposits are described as granular and diversified by segment and product, spanning non-interest-bearing, demand, money market, savings, and time balances. As of March 31, 2026, enterprise-wide deposits were $53.5 billion, with the customer mix skewed toward non-interest and money market categories.
That relationship focus also links directly to profitability management. Management remains focused on protecting core relationship deposits while managing deposit mix, including winding down higher-cost, non-core sources that can pressure the margin when competition heats up.
Columbia Banking’s Deposit Mix and Q1 Movement
Deposits slipped sequentially in the first quarter, but the mix movement was aligned with management’s stated strategy. Total deposits declined 1% sequentially to $53.5 billion as of March 31, 2026.
The key driver was an intentional reduction in brokered deposits, partially offset by an increase in customer deposits. That shift reflects a deliberate effort to reduce higher-cost funding sources and protect relationship-based balances that can be more durable through cycles.
This approach also ties back to the margin story. Lower-cost relationship deposits support profitability, while brokered and other non-core categories can add volatility when markets demand higher rates.
COLB Margin Resilience if Rates Drift Down
COLB has outlined a margin playbook aimed at holding up even if rates move lower. Management targets deposit betas for rate cuts around half, pairs that with proactive repricing, and continues balance sheet optimization actions to support profitability.
Recent results show tangible progress. The net interest margin (NIM) improved from 3.64% in the fourth quarter of 2024 to 4.06% in the fourth quarter of 2025 as deposit costs declined and higher-cost wholesale funding was reduced. The NIM expanded 36 basis points year over year to 3.96% in the first quarter of 2026.
Management expects the net interest margin to trend higher each quarter throughout 2026, ultimately surpassing 4% in the second and third quarter of 2026. The same framework supports its broader expectation for margin strength through 2026 as optimization work continues.
Fee income is another lever that can offset deposit pricing pressure. In 2025, treasury management and commercial card fees grew versus the prior year, while financial services and trust and international banking revenues expanded notably, with the trend continuing in the first quarter of 2026.
The Pacific Premier acquisition adds new fee platforms, including Custodial Trust Services, homeowners association banking, escrow, and 1031 exchanges. Since closing, the company has generated more than 1,200 cross-sell referrals, and its de novo and campaign efforts produced meaningful deposit inflows through mid-October.
Management expects the broader product set and intentional referral activity to deepen relationships, raise wallet share, and gradually shift the revenue mix toward more durable core fees. That mix shift can help cushion profitability when deposit competition forces banks to pay up for funding.
The Zacks Consensus Estimate for 2026 and 2027 revenues indicates a year-over-year growth of 20.6% and 3.2%, respectively, suggesting continued revenue momentum as margin expansion and fee growth support the top line.
Sales Estimates
Image Source: Zacks Investment Research
COLB Price Performance & Zacks Rank
Over the past year, shares of Columbia Banking have gained 27.2%, outperforming the industry’s rally of 20.2%.
View the Zacks #1 Rank List
Image: Bigstock
COLB Leans on Relationship Deposits as Western Competition Heats Up
Key Takeaways
Columbia Banking System, Inc. (COLB - Free Report) is operating in a Western banking arena where deposit competition is turning into a daily grind. Large national banks are pressing deeper into key Pacific Northwest corridors, while fintech and online banks are pulling rate-sensitive customers toward higher-yield products.
That backdrop matters because deposit strength is central to funding costs and long-term profitability. COLB is leaning on relationship banking and portfolio repositioning to defend funding and keep earnings power intact.
COLB Competition Is Shifting Across Western Markets
Competition is intensifying across COLB’s footprint as large national banks, including U.S. Bank, JPMorgan Chase, and Wells Fargo, expand in the Pacific Northwest. At the same time, fintech and online banks are attracting depositors with higher-yield offerings.
COLB has meaningful scale in its home markets, holding about 10% deposit share in its core regions. But its presence is limited in faster-growing markets like Phoenix and Denver, where it has less than 0.1% deposit share. This competitive gap makes Zions Bancorporation, N.A. (ZION - Free Report) and Western Alliance Bancorporation (WAL - Free Report) especially relevant benchmarks for COLB, as both Zions Bancorporation and Western Alliance Bancorporation have stronger regional positioning in markets where Columbia Banking is still building scale.
The risk is straightforward, as pricing pressure rises, low-cost deposits become harder to protect. The company has already experienced periods when higher short-term rates forced deposit repricing, lifting funding costs and compressing the advantage of a granular deposit base.
Columbia Banking’s Defense: Relationship Deposits
COLB positions itself as a “Business Bank of Choice,” built around full-relationship banking that connects commercial, small business, consumer, and wealth teams. The goal is to broaden wallet share and make deposits stickier by embedding the bank deeper into customer operations.
Deposits are described as granular and diversified by segment and product, spanning non-interest-bearing, demand, money market, savings, and time balances. As of March 31, 2026, enterprise-wide deposits were $53.5 billion, with the customer mix skewed toward non-interest and money market categories.
That relationship focus also links directly to profitability management. Management remains focused on protecting core relationship deposits while managing deposit mix, including winding down higher-cost, non-core sources that can pressure the margin when competition heats up.
Columbia Banking’s Deposit Mix and Q1 Movement
Deposits slipped sequentially in the first quarter, but the mix movement was aligned with management’s stated strategy. Total deposits declined 1% sequentially to $53.5 billion as of March 31, 2026.
The key driver was an intentional reduction in brokered deposits, partially offset by an increase in customer deposits. That shift reflects a deliberate effort to reduce higher-cost funding sources and protect relationship-based balances that can be more durable through cycles.
This approach also ties back to the margin story. Lower-cost relationship deposits support profitability, while brokered and other non-core categories can add volatility when markets demand higher rates.
COLB Margin Resilience if Rates Drift Down
COLB has outlined a margin playbook aimed at holding up even if rates move lower. Management targets deposit betas for rate cuts around half, pairs that with proactive repricing, and continues balance sheet optimization actions to support profitability.
Recent results show tangible progress. The net interest margin (NIM) improved from 3.64% in the fourth quarter of 2024 to 4.06% in the fourth quarter of 2025 as deposit costs declined and higher-cost wholesale funding was reduced. The NIM expanded 36 basis points year over year to 3.96% in the first quarter of 2026.
Management expects the net interest margin to trend higher each quarter throughout 2026, ultimately surpassing 4% in the second and third quarter of 2026. The same framework supports its broader expectation for margin strength through 2026 as optimization work continues.
Fee income is another lever that can offset deposit pricing pressure. In 2025, treasury management and commercial card fees grew versus the prior year, while financial services and trust and international banking revenues expanded notably, with the trend continuing in the first quarter of 2026.
The Pacific Premier acquisition adds new fee platforms, including Custodial Trust Services, homeowners association banking, escrow, and 1031 exchanges. Since closing, the company has generated more than 1,200 cross-sell referrals, and its de novo and campaign efforts produced meaningful deposit inflows through mid-October.
Management expects the broader product set and intentional referral activity to deepen relationships, raise wallet share, and gradually shift the revenue mix toward more durable core fees. That mix shift can help cushion profitability when deposit competition forces banks to pay up for funding.
The Zacks Consensus Estimate for 2026 and 2027 revenues indicates a year-over-year growth of 20.6% and 3.2%, respectively, suggesting continued revenue momentum as margin expansion and fee growth support the top line.
Sales Estimates
Image Source: Zacks Investment Research
COLB Price Performance & Zacks Rank
Over the past year, shares of Columbia Banking have gained 27.2%, outperforming the industry’s rally of 20.2%.
Price Performance
Image Source: Zacks Investment Research
At present, COLB carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.