Columbia Banking System reports third-quarter profit of $220 million, up from $96 million

Columbia Banking System, Inc. (COLB) said Thursday it earned $220 million in the third quarter of 2026, up from $96 million a year earlier, according to a press release filed with the Securities and Exchange Commission.

Diluted earnings per share were 78 cents, compared with 40 cents a year earlier. On an operating basis, which excludes non-operating items such as merger and restructuring expense, net income was $229 million.

Here's how the company did:

• Net income: $220 million vs. $96 million a year earlier
• Diluted earnings per share: 78 cents vs. 40 cents a year earlier
• Operating net income: $229 million vs. $204 million a year earlier
• Revenue: $695 million vs. $582 million a year earlier

Net income rose 6% from the second quarter, when the company reported $208 million. The company said the increase was driven by higher net interest income and disciplined expense management, partially offset by a slight increase in the provision for credit losses.

Net interest income and margin

Net interest income was $615 million, up $26 million from the second quarter and up from $505 million a year earlier. The company said the increase reflected higher income on loans and investment securities and lower funding costs.

Net interest income also benefited from $5 million of interest income related to the accelerated repayment of two acquired loans. Second-quarter results included $4 million of interest income reversals that did not recur.

Net interest margin was 4.11%, up 18 basis points from 3.93% in the second quarter and up from 3.84% a year earlier. The company said customer deposits replaced higher-cost wholesale funding sources.

The cost of interest-bearing deposits was 1.95%, compared with 1.96% in the second quarter and 2.43% a year earlier.

Fees, expenses and provisions

Non-interest income was $80 million, down $8 million from the second quarter and up from $77 million a year earlier. A net fair value loss of $7 million, tied to interest rate movements and hedging, was a larger drag than the $3 million loss in the second quarter.

Non-interest income excluding those items was $87 million, down $4 million. The company said that decline reflected $3 million of death benefit proceeds recorded in the second quarter on a single policy that did not recur.

Non-interest expense was $370 million, down $5 million from the second quarter and from $393 million a year earlier. The company attributed the quarterly decline to lower merger expense.

Merger and restructuring expense was $2 million, compared with $87 million in the third quarter of 2025.

The provision for credit losses was $33 million, compared with $27 million in the second quarter and $70 million a year earlier. The company said the provision reflects loan portfolio runoff, credit migration trends, charge-off activity and changes in the economic forecasts used in its credit models.

Credit quality

Net charge-offs were 0.24% of average loans and leases on an annualized basis, compared with 0.25% in the second quarter. Net charge-offs in the FinPac portfolio were $11 million, down from $15 million.

Non-performing assets were $255 million, or 0.39% of total assets, down from $273 million, or 0.42%, at June 30. The allowance for credit losses was $480 million, or 1.02% of loans and leases, compared with $475 million, or 1.01%, at June 30.

Capital and share repurchases

The company declared a quarterly cash dividend of 37 cents per common share on Aug. 14, paid Sept. 14. The dividend was unchanged from the second quarter and up from 36 cents a year earlier.

During the quarter, the company repurchased $199 million of common stock, completing its previously announced plan. Under that plan, it bought back 23.3 million shares at an average price of $29.88 between November 2025 and Sept. 30, 2026.

On Oct. 22, the Board of Directors authorized the repurchase of up to $1.2 billion of common stock under a new plan. The authorization has no expiration date, and the board may suspend, terminate or modify it at any time.

"Our third quarter performance demonstrates the benefits of consistent execution and active balance sheet management," said Chairman, CEO & President Clint Stein. "Over the past year, we returned over $1 billion to our shareholders through dividends and share repurchases, completing our existing buyback authorization in the process."

The company's common equity tier 1 risk-based capital ratio was 11.5%, and its total risk-based capital ratio was 13.8%, compared with 11.7% and 13.5% at June 30. The ratios are preliminary, pending completion and filing of regulatory reports.

Subordinated notes and branches

In September, Columbia Bank, the wholly-owned subsidiary of Columbia, issued $250 million of subordinated notes due in 2036. The notes bear a fixed rate of 6.721% for the first five years, after which they reset to the Five-Year U.S. Treasury Rate plus 195 basis points.

The company intends to use part of the proceeds to redeem about $240 million of junior subordinated debentures tied to certain trust preferred securities structures. Redemptions are expected in the fourth quarter of 2026 and early 2027.

During the quarter, the company opened two depository locations in Utah, a branch in Draper and a financial hub in Pleasant Grove, and closed four branches.

Balance sheet and funding

Total deposits were $52.7 billion, up from $52.1 billion at June 30. Loans and leases fell to $46.9 billion from $47.2 billion.

The company said customer deposit growth enabled it to reduce borrowings to $3.3 billion from $4.3 billion. A second customer deposit campaign of 2026, which ran from June to mid-August, brought over $700 million in new deposits.

Total assets were $65.1 billion, compared with $65.4 billion at June 30. Book value per common share was $25.62, down from $26.70, and tangible book value per share was $18.10, down from $19.22. The company said the decline was due primarily to an increase in accumulated other comprehensive loss.

The release does not include updated financial guidance. Columbia will host its earnings conference call on Oct. 22 at 2:00 p.m. PT (5:00 p.m. ET).