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COLUMBIA BANKING SYSTEM, INC. REPORTS FOURTH QUARTER 2025 RESULTS

$215 million

$243 million

$0.72

$0.82

Net income

Operating net income1

Earnings per common share - diluted

Operating earnings per common share - diluted1

0

CEO Commentary
“Our fourth quarter performance marked a strong end to a tremendous year for Columbia, reflecting continued momentum across our businesses and our commitment to consistent, repeatable results,” said Clint Stein, President and CEO. “Our operating performance was supported by disciplined balance sheet management, new and expanding customer relationships, and the first full-quarter contribution from Pacific Premier. We remain on track for a seamless systems conversion later this quarter, which will enable us to fully realize deal-related cost savings and achieve a clean expense run rate by the third quarter. Investments made throughout 2025 strengthened our western footprint and enhanced our long-term earnings power, and we entered 2026 with healthy pipelines, solid capital generation, and a clear path to continued operational improvement, all in support of long-term value creation and ongoing capital return to our shareholders."
–Clint Stein, Chair, CEO & President of Columbia Banking System, Inc.

Jacquelynne "Jacque" Bohlen, SVP/Director of Investor Relations, 503-727-4100, jacquebohlen@columbiabank.com

1 "Non-GAAP" financial measure. See GAAP to Non-GAAP Reconciliation for additional information.

Columbia Banking System, Inc. ("Columbia," the "Company," "we," or "our") closed its acquisition of Pacific Premier Bancorp, Inc. ("Pacific Premier") on August 31, 2025, and integration efforts continue to progress smoothly. We remain on track to complete the systems conversion and branch consolidations during the first quarter of 2026. We continue to expect to realize all related cost savings by June 30, 2026.

The Columbia Board of Directors elected Clint Stein, President and Chief Executive Officer, to also serve as Chair of the Board, effective January 22, 2026, as previously announced. Maria Pope, the immediate past Chair of the Board, was also appointed, effective the same date, to serve as Lead Independent Director until the Company’s 2026 annual meeting of shareholders. Following the annual meeting, Luis Machuca, the current Chair of the Company’s Nominating and Governance Committee, will succeed Ms. Pope as Lead Independent Director. The Board’s actions reflect its confidence in Mr. Stein’s leadership and are intended to support continuity, accountability, and strong governance as Columbia executes on its long-term strategic priorities. “Clint has demonstrated steady, disciplined leadership and a clear strategic vision for Columbia,” said Ms. Pope. “Combining the roles of Chair and CEO at this time will enhance alignment between the Board and management, further strengthening our ability to deliver long-term value for shareholders while remaining firmly committed to strong, independent oversight."

Ivan Seda assumed the role of Executive Vice President, Chief Financial Officer, effective December 31, 2025, as previously announced. Mr. Seda joined Columbia in August 2025 as Executive Vice President, Deputy Chief Financial Officer, supporting a seamless leadership transition. “Ivan’s first five months with Columbia have already delivered meaningful contributions, and he has transitioned smoothly into his expanded role,” stated Mr. Stein. “Recent strategic actions, including our acquisition of Pacific Premier and ongoing balance sheet optimization, have positioned Columbia for an exciting future. We have the resources, talent, and vision to excel across every market we serve, and I am confident Ivan will play a key role in driving consistent, repeatable performance and long-term value creation for our shareholders.”

Net interest income was $627 million for the fourth quarter of 2025, up $122 million from the prior quarter. The increase largely reflects the impact of two additional months operating as a combined company in the current period. Lower interest expense due to a favorable shift in Columbia's funding mix during the prior quarter also contributed to the increase, as did an additional $5 million in interest income related to an accelerated loan repayment.

Columbia's net interest margin was 4.06% for the fourth quarter of 2025, up 22 basis points from the third quarter of 2025. Net interest margin benefited from lower funding costs, due to an increase in customer deposits and corresponding reduction in higher-cost funding sources during the third quarter. The net interest margin also was impacted by two additional months operating as a combined company, which includes an 8-basis point benefit related to the amortization of a premium on acquired time deposits, as described in the following paragraph, and a 3-basis point benefit related to an accelerated loan repayment.

The cost of interest-bearing deposits decreased 35 basis points from the prior quarter to 2.08% for the fourth quarter of 2025. The cost of interest-bearing deposits benefited from the amortization of a premium related to Pacific Premier's time deposits, which contributed $12 million to net interest income during the fourth quarter of 2025, compared to $4 million during the third quarter of 2025, favorably impacting deposit rates in each quarter. The premium was fully amortized as of December 31, 2025. Excluding this impact, the cost of interest-bearing deposits was 2.20% for the fourth quarter of 2025, compared to 2.09% for the month of December and 2.06% as of December 31, 2025. The declining cost of deposits reflects our proactive management of deposit rates ahead of and following reductions to the federal fund rates.

Columbia's cost of interest-bearing liabilities decreased 38 basis points from the prior quarter to 2.27% for the fourth quarter of 2025. Excluding the previously discussed premium amortization, the cost of interest-bearing liabilities was 2.38% for the fourth quarter of 2025, compared to 2.28% for both the month of December and as of December 31 2025. Please refer to the Q4 2025 Earnings Presentation for additional net interest margin change details and interest rate sensitivity information.

Non-interest income was $90 million for the fourth quarter of 2025, up $13 million from the prior quarter. Quarterly changes in fair value adjustments and mortgage servicing rights ("MSR") hedging activity, which reflect interest rate fluctuations during the quarter, collectively resulted in a net fair value gain of $2 million for the fourth quarter, compared to a net fair value gain of $5 million for the third quarter, as detailed in our non-GAAP disclosures. Excluding these items, non-interest income was $88 million2 for the fourth quarter of 2025, up $16 million between periods, as Pacific Premier contributed an additional $13 million to the quarter's run rate. Customer fee income, including swap and international banking revenue, drove the remainder of the increase.

Non-interest expense was $412 million for the fourth quarter of 2025, up $19 million from the prior quarter, as two additional months operating as a combined company more than offset lower merger expense. Excluding merger and restructuring expense, exit and disposal costs, a $5 million reversal of prior FDIC assessment expense, and $4 million of other non-operating expense, as detailed in our non-GAAP disclosures, non-interest expense was $373 million2, up $66 million from the prior quarter, as Pacific Premier contributed an additional $62 million to the fourth quarter, as compared to the prior quarter's run rate. The Pacific Premier run rate includes deal-related cost savings. Other miscellaneous expenses, including marketing and software costs, contributed to the increase. Please refer to the Q4 2025 Earnings Presentation for additional expense details.

Total consolidated assets were $66.8 billion as of December 31, 2025, compared to $67.5 billion as of September 30, 2025. The decrease reflects balance sheet optimization activity and an accelerated level of loan repayments. Cash and cash equivalents were $2.4 billion as of December 31, 2025, compared to $2.3 billion as of September 30, 2025. Including secured off-balance sheet lines of credit, total available liquidity was $27.9 billion as of December 31, 2025, representing 42% of total assets, 51% of total deposits, and 141% of uninsured deposits. Available-for-sale securities, which are held on balance sheet at fair value, were $11.1 billion as of December 31, 2025, compared to $11.0 billion as of September 30, 2025. The increase is due to the purchase of $246 million of investment securities, partially offset by paydowns. Please refer to the Q4 2025 Earnings Presentation for additional details related to our securities portfolio and liquidity position.

Gross loans and leases were $47.8 billion as of December 31, 2025, compared to $48.5 billion as of September 30, 2025. The decrease reflects continued run-off in commercial development and below-market-rate transactional loans, as well as the sale of $45 million in acquired loans risk rated special mention. Commercial loans increased by 6% on an annualized basis relative to September 30, 2025, partially offsetting contraction in other portfolios. "Our ability to generate relationship-based commercial business was strengthened by the addition of bankers from Pacific Premier," commented Tory Nixon, President of Columbia Bank. "Loan origination volume increased 17% from the prior quarter, and full-year 2025 volume was up 22% compared to 2024, resulting in strong commercial loan growth, offset by the intentional reduction in transactional loan balances and elevated prepayment activity during the fourth quarter." Please refer to the Q4 2025 Earnings Presentation for additional details related to our loan portfolio, which include underwriting characteristics, the composition of our commercial portfolios, and disclosure related to transactional loans.

Total deposits were $54.2 billion as of December 31, 2025, compared to $55.8 billion as of September 30, 2025. The decrease reflects an intentional reduction in brokered and select public deposits, as alternative funding sources offered a more attractive interest rate. Seasonal reductions in customer deposit balances also contributed to the quarter's decline. "Momentum from the third quarter's exceptional customer deposit growth carried into the fourth quarter," stated Mr. Nixon. "However, balances followed seasonal norms in December, declining in the latter part of the month, due to company distributions, tax payments, and other year-end payouts." We utilized borrowings, which were $3.2 billion as of December 31, 2025, compared to $2.3 billion as of September 30, 2025, to supplement funding needs. Please refer to the Q4 2025 Earnings Presentation for additional details related to deposit characteristics and flows.

The allowance for credit losses ("ACL") was $485 million, or 1.02% of loans and leases, as of December 31, 2025, compared to $492 million, or 1.01% of loans and leases, as of September 30, 2025. The provision for credit losses was $23 million for the fourth quarter of 2025 and reflects loan portfolio runoff, credit migration trends, charge-off activity, and changes in the economic forecasts used in credit models.

2 "Non-GAAP" financial measure. See GAAP to Non-GAAP Reconciliation for additional information.

Net charge-offs were 0.25% of average loans and leases (annualized) for the fourth quarter of 2025, compared to 0.22% for the third quarter of 2025. Net charge-offs in the FinPac portfolio were $14 million in the fourth quarter, compared to $16 million in the third quarter. Net charge-offs excluding the FinPac portfolio were $16 million in the fourth quarter, compared to $6 million in the third quarter. Non-performing assets were $200 million, or 0.30% of total assets, as of December 31, 2025, compared to $199 million, or 0.29% of total assets, as of September 30, 2025. Please refer to the Q4 2025 Earnings Presentation for additional details related to the allowance for credit losses and other credit trends.

Columbia's book value per common share was $26.54 as of December 31, 2025, compared to $26.04 as of September 30, 2025. During the fourth quarter, Columbia repurchased 3.7 million common shares under its current repurchase plan at an average price of $27.07. Book value was also impacted by a favorable change in accumulated other comprehensive (loss) income ("AOCI") to $(233) million as of December 31, 2025, compared to $(268) million as of the prior quarter-end. The change in AOCI is due primarily to a decrease in the tax-effected net unrealized loss on available-for-sale securities to $199 million as of December 31, 2025, compared to $240 million as of September 30, 2025. Tangible book value per common share3 was $19.11 as of December 31, 2025, compared to $18.57 as of September 30, 2025.

Columbia's estimated total risk-based capital ratio was 13.6% and its estimated common equity tier 1 risk-based capital ratio was 11.8% as of December 31, 2025, compared to 13.4% and 11.6%, respectively, as of September 30, 2025. Columbia remains above current “well-capitalized” regulatory minimums. The regulatory capital ratios as of December 31, 2025 are estimates, pending completion and filing of Columbia's regulatory reports.

Columbia's Q4 2025 Earnings Presentation provides additional disclosure. A copy will be available on our investor relations page: www.columbiabankingsystem.com.

Columbia will host its fourth quarter 2025 earnings conference call on January 22, 2025 at 2:00 p.m. PT (5:00 p.m. ET). During the call, Columbia's management will provide an update on recent activities and discuss its fourth quarter 2025 financial results. Participants may join the audiocast or register for the call using the link below to receive dial-in details and their own unique PINs. It is recommended you join 10 minutes prior to the start time.

Join the audiocast: https://edge.media-server.com/mmc/p/r4vb6kw9/

Register for the call: https://register-conf.media-server.com/register/BIea441cbeb5cf482194e96ffe3b448071

Access the replay through Columbia's investor relations page: https://www.columbiabankingsystem.com/news-market-data/event-calendar/default.aspx

Columbia Banking System, Inc. (Nasdaq: COLB) is headquartered in Tacoma, Washington and is the parent company of Columbia Bank, an award-winning western U.S. regional bank. Columbia Bank is the largest bank headquartered in the Northwest and one of the largest banks headquartered in the West with offices in Arizona, California, Colorado, Idaho, Nevada, Oregon, Texas, Utah, and Washington. Columbia Bank combines the resources, sophistication, and expertise of a national bank with a commitment to deliver superior, personalized service. The bank supports consumers and businesses through a full suite of services, including retail and commercial banking, Small Business Administration lending, institutional and corporate banking, and equipment leasing. Columbia Bank customers also have access to comprehensive investment and wealth management expertise as well as healthcare and private banking through Columbia Wealth Management. Learn more at www.columbiabankingsystem.com.

3 "Non-GAAP" financial measure. See GAAP to Non-GAAP Reconciliation for additional information.

This press release includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to various risk factors, including those set forth from time to time in our filings with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "target," "projects," "outlook," "forecast," "will," "may," "could," "should," "can" and similar references to future periods. In this press release we make forward-looking statements about strategic and growth initiatives and the result of such activity. Risks and uncertainties that could cause results to differ from forward-looking statements we make include, without limitation: current and future economic and market conditions, including the effects of declines in housing and commercial real estate prices, high unemployment rates, renewed inflation and any recession or slowdown in economic growth particularly in the western United States; economic forecast variables that are either materially worse or better than end of quarter projections and deterioration in the economy that could result in increased loan and lease losses, especially those risks associated with concentrations in real estate related loans; risks related to our acquisition of Pacific Premier (the "Transaction"), including, among others, (i) diversion of management’s attention from ongoing business operations and opportunities, (ii) cost savings and any revenue or expense synergies from the Transaction may not be fully realized or may take longer than anticipated to be realized, (iii) deposit attrition, customer or employee loss, and/or revenue loss as a result of the Transaction, and (iv) shareholder litigation that could negatively impact our business and operations; the impact of proposed or imposed tariffs by the U.S. government and retaliatory tariffs proposed or imposed by U.S. trading partners that could have an adverse impact on customers; our ability to effectively manage problem credits; the impact of bank failures or adverse developments at other banks on general investor sentiment regarding the liquidity and stability of banks; changes in interest rates that could significantly reduce net interest income and negatively affect asset yields and valuations and funding sources; changes in the scope and cost of FDIC insurance and other coverage; our ability to successfully implement efficiency and operational excellence initiatives; our ability to successfully develop and market new products and technology; changes in laws or regulations; potential adverse reactions or changes to business or employee relationships; the effect of geopolitical instability, including wars, conflicts and terrorist attacks; and natural disasters and other similar unexpected events outside of our control. We also caution that the amount and timing of any future common stock dividends or repurchases will depend on the earnings, cash requirements and financial condition of Columbia, market conditions, capital requirements, applicable law and regulations (including federal securities laws and federal banking and state regulations), and other factors deemed relevant by Columbia's Board of Directors.

Columbia Banking System, Inc.
Consolidated Statements of Income
(Unaudited)
						Year Ended												% Change
($ in millions, shares in thousands)						Dec 31, 2025						Dec 31, 2024						Year over Year
Interest income:
Loans and leases						$	2,458					$	2,320					6		%
Interest and dividends on investments:
Taxable						340						305						11		%
Exempt from federal income tax						34						28						21		%
Dividends						13						12						8		%
Temporary investments and interest bearing deposits						71						90						(21)		%
Total interest income						2,916						2,755						6		%
Interest expense:
Deposits						747						803						(7)		%
Securities sold under agreement to repurchase and federal funds purchased						4						5						(20)		%
Borrowings						128						190						(33)		%
Junior and other subordinated debentures						34						39						(13)		%
Total interest expense						913						1,037						(12)		%
Net interest income						2,003						1,718						17		%
Provision for credit losses						150						106						42		%
Non-interest income:
Service charges on deposits						84						72						17		%
Card-based fees						58						57						2		%
Financial services and trust revenue						35						20						75		%
Residential mortgage banking revenue, net						31						24						29		%
Gain on investment securities, net						6						—						nm
Gain (loss) on loan and lease sales, net						1						(3)						nm
Gain (loss) on loans held for investment, at fair value						11						(10)						nm
BOLI income						25						19						32		%
Other income						47						32						47		%
Total non-interest income						298						211						41		%
Non-interest expense:
Salaries and employee benefits						672						589						14		%
Occupancy and equipment, net						216						182						19		%
Intangible amortization						127						119						7		%
FDIC assessments						28						42						(33)		%
Merger and restructuring expense						148						24						nm
Legal settlement						55						—						nm
Other expenses						177						148						20		%
Total non-interest expense						1,423						1,104						29		%
Income before provision for income taxes						728						719						1		%
Provision for income taxes						178						185						(4)		%
Net income						$	550					$	534					3		%
Weighted average basic shares outstanding (in thousands)						238,022						208,463						14		%
Weighted average diluted shares outstanding (in thousands)						239,121						209,337						14		%
Earnings per common share – basic						$	2.31					$	2.56					(10)		%
Earnings per common share – diluted						$	2.30					$	2.55					(10)		%
nm = Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

(1) See GAAP to Non-GAAP Reconciliation.

(2) Tax-exempt interest was adjusted to a taxable equivalent basis using a 21% tax rate.

(3) Total funding = total deposits + total borrowings.

(4) Estimated holding company ratios.

(1) See GAAP to Non-GAAP Reconciliation.

(2) Tax-exempt interest was adjusted to a taxable equivalent basis using a 21% tax rate.

(3) Total funding = Total deposits + Total borrowings.

 

(1) Core deposits are defined as total deposits less time deposits greater than $250,000 and all brokered deposits.

(1) Non-accrual and 90+ days past due loans include government guarantees of $79 million, $70 million, $68 million, $67 million, and $74 million at December 31, 2025, September 30, 2025, June 30, 2025, March 31, 2025, and December 31, 2024, respectively.

(2) Excludes certain mortgage loans guaranteed by GNMA, which Columbia has the unilateral right to repurchase but has not done so, totaling $3 million, $2 million, $2 million, $3 million, and $2 million at December 31, 2025, September 30, 2025, June 30, 2025, March 31, 2025, and December 31, 2024, respectively.