Columbia Banking System (NASDAQ:COLB) reported third-quarter 2026 earnings per share of $0.78 and operating EPS of $0.82, as the regional bank cited balance-sheet optimization, customer deposit growth and expense discipline as drivers of improved profitability.
Operating pre-provision net revenue rose 7% from the second quarter and 25% from a year earlier, while operating net income increased 6% sequentially and 12% year over year, according to Chief Financial Officer Ivan Seda. The year-over-year comparison also benefited from the addition of Pacific Premier, whose acquisition closed in August 2025.
Chairman, Chief Executive Officer and President Clint Stein said the company has focused on consistent performance, reshaping its balance sheet and returning excess capital to shareholders. Columbia returned more than $1 billion to shareholders over the past year through dividends and share repurchases, he said, and completed a buyback program that reduced its common share count by 8% over the authorization period.
The board has authorized a new $1.2 billion share repurchase program. Columbia expects to repurchase between $150 million and $200 million of shares during the fourth quarter, Seda said.
Margin expansion and funding changes
Net interest margin rose to 4.11% in the third quarter. Adjusting for a 3-basis-point benefit from accelerated repayments during the quarter and a 3-basis-point effect from one-time credit-related interest reversals in the prior quarter, Seda said margin expanded 12 basis points sequentially.
Average earning assets totaled $59.8 billion, reflecting modest contraction as the company continued to optimize its balance sheet and experienced elevated commercial real estate payoffs. Columbia reduced wholesale funding by $1.5 billion between June 30 and Sept. 30, including public wholesale balances, as customer deposits increased.
The company forecast fourth-quarter net interest margin of about 4.05%, including the modest negative carry from holding excess subordinated debt during the quarter while it works through planned trust-preferred securities redemptions. Seda said Columbia expects margin to remain above 4%, excluding unusual items, and to operate in the low-4% range over the next several quarters.
During the third quarter, Columbia issued $250 million of subordinated notes. The company expects to use the proceeds to redeem about $240 million of junior subordinated debentures tied to trust-preferred securities through early 2027. The redemptions are expected to reduce the total risk-based capital ratio by roughly 50 basis points, all else equal.
Commercial lending, deposits and fee income
Co-President Tory Nixon said the loan portfolio continues to shift toward relationship-based commercial banking. Commercial loans, including owner-occupied commercial real estate, represented 43% of the total portfolio at quarter end, compared with 42% at June 30 and 39% a year earlier.
Total loans declined to $46.9 billion from $47.2 billion in the prior quarter, though the rate of decline slowed. Columbia originated $1.2 billion in loans during the quarter, with nearly 70% tied to commercial lending. Management said it continued to avoid transactions with pricing, leverage levels or non-recourse structures it considered unattractive.
Columbia expects loan balances to remain flat to modestly lower through the fourth quarter and into early 2027 as it continues to run off transactional lending and emphasizes commercial relationship growth. Nixon said commercial and industrial lending has grown at a low- to mid-single-digit annualized pace in recent quarters.
Total deposits rose to $52.7 billion from $52.1 billion at June 30. Customer deposits increased by nearly $1.2 billion during the quarter, aided by seasonal balances and new customer activity, while the company intentionally reduced public wholesale and brokered balances.
The average cost of interest-bearing deposits declined 1 basis point to 1.95%, while the spot cost of deposits stood at 1.96% at Sept. 30. Seda said management continues to use a through-the-cycle deposit beta assumption of roughly 50%.
Management also pointed to growth in fee-generating businesses. Nixon said treasury management revenue increased 7% year over year, international banking rose 19%, commercial card income increased 23%, and merchant card income rose 11%. He said commercial deposit growth was led in part by Southern California teams acquired through Pacific Premier.
Expenses, credit and capital
Operating noninterest expense was $365 million, unchanged from the second quarter. Excluding core deposit intangible amortization, Columbia expects fourth-quarter noninterest expense of $330 million to $335 million as it continues to invest in the franchise.
Seda said the company identified roughly $132 million to $133 million in savings tied to the Pacific Premier integration, above its original $127 million target. For 2027, he said an expense-growth assumption around 2% would be reasonable as the bank balances continued investments in people, technology and infrastructure with cost discipline.
Provision expense was $33 million in the quarter. The allowance for credit losses was 1.02% of total loans at quarter end, or 1.25% including the credit discount on acquired loans. Seda said credit metrics remained stable and healthy, and characterized the reserve change as primarily reflecting the economic forecast used in credit models rather than portfolio-specific deterioration.
Columbia’s CET1 ratio was 11.5% at quarter end, while its total risk-based capital ratio rose to 13.8%. Tangible book value per share declined to $18.10, primarily because higher interest rates increased accumulated other comprehensive losses.
Management said it closed four branches during the quarter while opening a branch and a financial hub in Utah. Stein said the company will continue to assess branch density, customer demand and opportunities in growth markets, while maintaining that branches remain important to its relationship-banking strategy.
About Columbia Banking System (NASDAQ:COLB)
Columbia Banking System, Inc is a bank holding company headquartered in Tacoma, Washington. It operates through Umpqua Bank, a full-service financial institution serving consumers, businesses, professionals and institutions.
Umpqua Bank provides deposit accounts, residential and commercial lending, business banking, treasury and cash-management services, mortgage banking, personal banking and wealth-management solutions. Its offerings include checking and savings accounts, commercial real estate and business loans, consumer credit, online and mobile banking, and investment and advisory services.
Columbia Banking System traces its roots to the formation of Columbia State Bank in Washington in 1993.
