Columbia Banking System, Inc.

Second-quarter EPS was $0.73 and operating EPS was $0.76. Operating pre-provision net revenue increased 30% year over year and operating net income increased 36% year over year, supported by Pacific Premier, balance sheet optimization, and expense discipline. Net interest margin was 3.93%; adjusted for 3 basis points of one-time credit-related interest reversals, management said NIM was in line with Q1. Noninterest income was $88 million GAAP and $91 million operating, above the guided $80 million to $85 million range. Operating noninterest expense was $366 million; excluding intangible amortization of $38 million, the $328 million run rate was below guidance. Provision expense was $27 million, allowance for credit losses coverage of total loans was 1.01%, and CET1 and total risk-based capital ratios were 11.6% and 13.4%, respectively. Tangible book value increased 1% to $19.22. For Q3, management expects noninterest revenue in the mid-$80 million range, noninterest expense of $330 million to $335 million, share repurchases of $150 million to $200 million, and NIM to move beyond 4% on a quarterly-average basis. Full-year core deposit growth remains targeted in the low single-digit range.

Clint Stein emphasized that the company is focused on repeatable results, balance sheet reshaping, and returning excess capital rather than pursuing loan growth at any price. He repeatedly said Columbia will not chase irrational pricing, especially in CRE, and framed the quarter as evidence that the bank can improve earnings quality without expanding the balance sheet aggressively. His tone was confident and upbeat, with comments about being 'as optimistic as ever,' a 'fortress balance sheet,' and 'having fun again' after integration work.

Ivan Seda highlighted that reported EPS was $0.73 and operating EPS was $0.76, with operating PPNR and operating net income up 30% and 36% year over year. He pointed to NIM of 3.93%, saying the quarter had a 3 basis point hit from one-time credit-related reversals and another headwind from securities accounting, but still reiterated an expectation for NIM to get beyond 4% this year. On expenses, he said operating noninterest expense was $366 million and that the $328 million ex-intangible amortization run rate beat guidance, with Pacific Premier synergies ahead of plan by $5 million. On capital, he noted 6.6 million shares repurchased, about $200 million returned in the quarter, roughly $530 million of excess capital above long-term targets, and $200 million remaining under the current authorization.

Analysts focused on how much of the loan decline was intentional runoff versus CRE payoffs, and management broke it into three parts: about $270 million of transactional portfolio decline, about $200 million-plus growth in the targeted C&I and owner-occupied CRE book, and elevated CRE payoffs tied to competitive pricing. Management said the CRE market is 'frothy' and that it will not lower pricing or weaken underwriting to retain deals, though it still sees growth in the pipeline. Questions also centered on NIM, deposit costs, and capital deployment; management said Q3 NIM should average beyond 4%, deposit costs may be near a trough but competition could pressure them higher, and buybacks remain the primary capital return tool. On M&A, Clint Stein said there is 'zero interest' in whole-bank acquisitions, though a small bolt-on could be considered for fee income or deposits.