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1. Company Snapshot

1.a. Company Description

Columbia Banking System, Inc.operates as the bank holding company for Columbia State Bank that provides a range of banking services to small and medium-sized businesses, professionals, and individuals in the United States.It offers personal banking products and services, including noninterest and interest-bearing checking, savings, money market, and certificate of deposit accounts; home mortgages for purchases and refinances, home equity loans and lines of credit, and other personal loans; debit and credit cards; and digital banking services.


The company also provides business banking products and services, such as checking, savings, interest-bearing money market, and certificate of deposit accounts; agricultural, asset-based, builder, and other commercial real estate loans, as well as loans guaranteed by the small business administration; and professional banking, treasury management, merchant card, and international banking services.In addition, it offers wealth management solutions that include financial planning services, such as asset allocation, net worth analysis, estate planning and preservation, education funding, and wealth transfer; long-term care, and life and disability insurance solutions; individual retirement solutions comprising retirement planning, retirement income strategies, and traditional and Roth individual retirement accounts; and business solutions, which comprise business retirement plans, key person insurance, business succession planning, and deferred compensation plans to individuals, families, and professional businesses.Further, the company provides fiduciary, investment, and administrative trust services, such as personal and special needs trusts, estate settlement, and investment agency and charitable management.


It operates a network of 153 branch locations, including 68 in the state of Washington, 59 in Oregon, 15 in Idaho, and 11 in California.The company was founded in 1993 and is headquartered in Tacoma, Washington.

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1.b. Last Insights on COLB

Columbia Banking System's recent performance has been driven by several positive factors. The company's Q2 earnings beat, with $0.76 per share exceeding the Zacks Consensus Estimate of $0.66 per share. Additionally, Columbia Banking has a strong profit margin and a dividend yield above 5%. The planned acquisition of Pacific Premier Bancorp is expected to drive business expansion. The company has also announced a quarterly cash dividend of $0.36 per common share. Furthermore, Columbia Banking has been rated as a "Buy" by analysts, with a future price target presenting an average upside of +11%.

1.c. Company Highlights

2. Columbia Banking System's Q3 Earnings: A Strong Beat

The company's financial performance in Q3 was impressive, with operating EPS coming in at $0.85, significantly beating estimates of $0.66. Operating PPNR grew 12% from the previous quarter and 22% from the year-ago quarter, driven by the contribution of Pacific Premier and favorable balance sheet remix trends. The company's operating return on average tangible equity was 18.2%, while operating PPNR increased to $270 million.

Publication Date: Nov -03

📋 Highlights
  • Strategic Acquisition Expansion: Closed the acquisition of Pacific Premier, expanding to $68 billion in assets, completing an 8-state Western U.S. footprint.
  • Operating PPNR Growth: Q3 operating PPNR rose 12% QoQ to $270 million and 22% YoY, driven by 1 month of Pacific Premier integration and balance sheet remix trends.
  • Capital Return Authorization: Announced a $700 million share repurchase program, leveraging $550 million in excess capital above long-term targets.
  • Deposit and Loan Momentum: Achieved $800 million in organic customer deposit growth and a $700 million C&I loan pipeline increase in Q3, with $12 million in Q4 NIM accretion from CD premiums.
  • Cost Efficiency and Dilution: Tangible book dilution of 1.7% from the Pacific Premier deal, well below the anticipated 7.6%, and $12 million in Q4 net interest income boost from premium accretion.

Revenue Growth and Net Interest Margin

The company's revenue growth is expected to continue, with analysts estimating a 23.2% increase in revenues next year. The net interest margin (NIM) is expected to be around 3.84% in Q4, with a similar level of earning assets in Q1. The company's ability to generate capital beyond what is required for prudent growth and its regular dividend has been significantly enhanced by the acquisition of Pacific Premier.

Acquisition and Integration

The acquisition of Pacific Premier has completed the company's 8-state Western footprint and bolstered its position as the preeminent regional bank in the Northwest. The integration of Pacific Premier is progressing well, with the company expecting to achieve significant cost savings and revenue synergies. The tangible book dilution from the acquisition was 1.7%, well below the 7.6% anticipated at deal announcement.

Capital Return and Share Repurchase

The company's Board of Directors has authorized a $700 million share repurchase program, which is expected to be executed over the next 12 months. The program is a sign of the company's confidence in its financial performance and its commitment to returning capital to shareholders. The company's dividend yield is currently around 5.37%, making it an attractive option for income investors.

Valuation

Using relevant valuation metrics for banks, the Price-to-Tangible Book Value (P/TBV) ratio can be calculated. Given the 'P/B Ratio' is 0.82, it implies that the stock is trading slightly below its book value. The 'P/E Ratio' is 13.33, and the 'Dividend Yield (%)' is 5.37%. These metrics suggest that the stock may be undervalued, considering its strong financial performance and growth prospects.

3. NewsRoom

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Columbia Banking System's Post-Merger Playbook for 2026

Dec -05

Source: zacks.com

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Fisher Asset Management LLC Has $46.81 Million Stake in Columbia Banking System, Inc. $COLB

Dec -03

Source: defenseworld.net

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3 Bank Stocks With Solid Dividend Yield to Keep an Eye On

Nov -28

Source: zacks.com

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Columbia Banking System (NASDAQ:COLB) Shares Acquired Rep. Gilbert Ray Cisneros, Jr.

Nov -21

Source: defenseworld.net

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Columbia Banking Rewards Shareholders With a 2.8% Dividend Hike

Nov -18

Source: zacks.com

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Columbia Banking System Announces Increase to Common Share Dividend

Nov -14

Source: prnewswire.com

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Allworth Financial LP Increases Holdings in Columbia Banking System, Inc. $COLB

Nov -12

Source: defenseworld.net

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HOLDCO ASSET MANAGEMENT RELEASES PRESENTATION TO FIRST INTERSTATE BANCSYSTEM, INC.

Nov -06

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.00%)

6. Segments

Commercial and Consumer Banking

Expected Growth: 2.0%

Columbia Banking System's 2.0% growth in Commercial and Consumer Banking is driven by a strong loan pipeline, increased commercial lending, and expansion of treasury management services. Additionally, strategic investments in digital banking platforms and targeted marketing efforts have contributed to growth in consumer deposits and fee income.

7. Detailed Products

Commercial Banking

Columbia Banking System provides commercial banking services to businesses, including cash management, treasury management, and commercial lending.

Consumer Banking

Columbia Banking System offers consumer banking services, including checking and savings accounts, credit cards, and personal loans.

Mortgage Banking

Columbia Banking System provides mortgage banking services, including residential and commercial mortgage lending.

Wealth Management

Columbia Banking System offers wealth management services, including investment management, trust services, and financial planning.

Treasury Management

Columbia Banking System provides treasury management services, including cash management, wire transfers, and account reconciliation.

Digital Banking

Columbia Banking System offers digital banking services, including online banking, mobile banking, and mobile deposit.

8. Columbia Banking System, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Columbia Banking System, Inc. operates in a highly competitive industry, with many banks and financial institutions offering similar services. However, the company's strong brand recognition and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

Columbia Banking System, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong relationships with its customers and personalized services reduce the likelihood of customers switching to competitors.

Bargaining Power Of Suppliers

Columbia Banking System, Inc. has a diversified supplier base, which reduces the bargaining power of individual suppliers. The company's strong financial position and long-term relationships with suppliers also mitigate the bargaining power of suppliers.

Threat Of New Entrants

The banking industry has high barriers to entry, including regulatory hurdles and significant capital requirements. Additionally, Columbia Banking System, Inc.'s strong brand recognition and established customer base make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The banking industry is highly competitive, with many established players competing for market share. Columbia Banking System, Inc. faces intense competition from larger banks and fintech companies, which increases the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 48.27%
Debt Cost 7.97%
Equity Weight 51.73%
Equity Cost 8.35%
WACC 8.17%
Leverage 93.30%

11. Quality Control: Columbia Banking System, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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United Bankshares

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Value: 6.8

Growth: 5.0

Quality: 7.6

Yield: 8.0

Momentum: 5.0

Volatility: 8.7

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Growth: 4.2

Quality: 7.4

Yield: 10.0

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Home Bancshares

A-Score: 6.6/10

Value: 5.4

Growth: 5.6

Quality: 7.8

Yield: 6.0

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Cullen Frost Bankers

A-Score: 6.3/10

Value: 4.2

Growth: 6.9

Quality: 6.9

Yield: 6.0

Momentum: 6.0

Volatility: 8.0

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Columbia Banking System

A-Score: 6.3/10

Value: 6.7

Growth: 7.1

Quality: 6.4

Yield: 8.0

Momentum: 4.0

Volatility: 5.7

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A-Score: 5.3/10

Value: 6.6

Growth: 5.0

Quality: 7.5

Yield: 5.0

Momentum: 5.0

Volatility: 3.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

28.18$

Current Price

28.18$

Potential

-0.00%

Expected Cash-Flows