Columbia Banking System, Inc. "Lacking Balance Sheet Growth Weighing on NII"

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Columbia Banking System, Inc. "Lacking Balance Sheet Growth Weighing on NII"

a slight slowdown in 1Q, coming in at $1.6B or 1.5x Q4E 0.79 0.78 -1 0.82

net originations, and exceeding originations even when excluding the transactional 12/26E 2.97 3.02 2 3.05

12/27E 3.25 3.20 -2 3.38

runoff. Mgt. flagged increased pricing competition as a key driver, which limits the

12/28E 3.57 3.37 -5 3.60

potential for near-term relief in our view and pushes out net loan growth to 1H27. We

expect ~2% loan shrinkage in 2026 before 1.3% growth in 2027. Deposit growth Timur Braziler

independent of this and to seasonally rebound in 3Q, reducing borrowings by ~$1B. Analyst

timur.braziler@ubs.com

Fees/expenses +1-860-275 8004

2Q strong on fees, and mid-$80MM guide for 3Q straightforward. Fee growth should Sámuel Varga

outpace b/s growth for the next several years, with bolt-on acquisitions a possibility. On Associate Analyst

opex, cost save target exceeded and merger costs lower than at announcement. Ex. CDI samuel.varga@ubs.com

+1-201-352 6887

opex guide for 3/4Q of $330-335MM, we are closer to lower end for both qtrs.

Andrew Gorczyca

Capital Associate Analyst

andrew.gorczyca@ubs.com

2Q buybacks ~$200MM with same left in auth. Can buy back ~$600MM/yr and keep +1-212-649 8017

TCE ratio ~flat, CET1 moving lower to 11.1% by YE27, without any benefit from Basel

3e. Bolt-on fee/deposit-related acquisition possibile, but wholebank M&A off the table.

Highlights (US$m) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E

Revenues 2,008 1,942 2,284 2,730 2,763 2,795 2,841 2,898

Pre-tax profit 785 765 985 1,142 1,124 1,101 1,109 1,096

Net earnings (reported) 437 534 604 830 837 820 826 817

Net earnings (UBS) 589 568 746 856 837 820 826 817

Tier 1 ratio % 9.6 10.5 11.8 11.5 10.9 10.5 10.1 9.7