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Sep 30
Columbia Banking System Q3 2025 Earnings Report
Columbia Banking System reported its third quarter 2025 results, highlighting meaningful progress and growing momentum following the acquisition of Pacific Premier.
Key Takeaways
Columbia Banking System reported a net income of $96 million and diluted EPS of $0.40 for Q3 2025. Operating net income was $204 million and operating diluted EPS was $0.85. The company's performance was significantly impacted by the acquisition of Pacific Premier, which closed on August 31, 2025, leading to increased net interest income and non-interest expense, primarily due to merger-related costs. Customer deposit growth was strong, supporting balance sheet optimization and a reduction in higher-cost funding sources.
Net income for Q3 2025 was $96 million, a 37% decrease sequentially and a 34% decrease year-over-year, primarily due to acquisition-related items.
Diluted EPS was $0.40, a 45% decrease sequentially and a 43% decrease year-over-year, also impacted by acquisition-related items.
Operating net income was $204 million and operating diluted EPS was $0.85, reflecting strong core profitability despite acquisition impacts.
Total assets increased by 30% to $67.5 billion, and total deposits grew by 34% to $55.8 billion, largely driven by the Pacific Premier acquisition and organic customer deposit growth.
Columbia Banking System
Columbia Banking System
Forward Guidance
Columbia Banking System is focused on integrating the Pacific Premier acquisition, driving organic growth, optimizing the balance sheet, and returning capital to shareholders through a new $700 million share repurchase program. The company expects continued strong profitability and capital generation.
Positive Outlook
- Integration efforts for the Pacific Premier acquisition are progressing smoothly, with system integration on track for Q1 2026.
- The acquisition elevates Columbia's deposit market share to a top-10 position in Southern California and strengthens its presence in the western United States.
- The Board of Directors authorized a new $700 million share repurchase program, underscoring confidence in the strategy and outlook for continued excess capital generation.
- The company expects to produce exceptional profitability, resulting in meaningful capital generation over the coming quarters.
- Organic customer deposit growth of approximately $800 million during the quarter reflects new customer activity and reduced reliance on wholesale funding sources.
Challenges Ahead
- Reported results were impacted by acquisition-related items, including $87 million in merger and restructuring expense.
- The amortization of a premium related to Pacific Premier's time deposits, which favorably impacted deposit rates, is expected to be fully amortized by December 31, 2025.
- The provision for credit losses was $70 million, driven by the acquisition of Pacific Premier, including an initial provision for acquired non-PCD loans and recalibration of models.
- Net charge-offs in the FinPac portfolio increased to $16 million in Q3 from $14 million in Q2.
- The company is continuing to reduce exposure to non-relationship loans as part of its balance sheet optimization, which could impact loan growth in certain segments.