COLUMBIA BANKING SYSTEM, INC.
For the period ended Sep 30, 2025. Filed Nov 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 6, 2025
COLB$30.48+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0000887343-25-000233
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0000887343-25-000268
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 195 previous paragraphs and 212 current paragraphs.
115 unchanged; 56 reworded; 40 added; 23 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 25 previous and 25 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (40)
Current report
Effective September 1, 2025, the Bank began serving customers under its unified "Columbia Bank" name and brand. This strategic transition streamlines our identity across all business lines including Columbia Wealth Management, Columbia Trust Company, Columbia Private Bank, Columbia Wealth Advisors, and Columbia Private Trust making it easier for customers to recognize and engage with the full breadth of our services.
Current report
Columbia Bank is the largest bank headquartered in the Northwest and one of the largest banks headquartered in the West, with locations in Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah, and Washington. The Company's wholly owned banking subsidiary provides a comprehensive range of banking, private banking, mortgage, and other financial services to corporate, institutional, small business, and individual customers. FinPac, a commercial equipment leasing company, is a subsidiary of Columbia Bank.
Current report
The Company and its subsidiaries are subject to regulation and regular examination by various state and federal agencies. Columbia Bank is an Oregon state-chartered commercial bank, and its deposits are insured in whole or in part by the FDIC.
Current report
Acquisition of Pacific Premier
Current report
•On August 31, 2025, the Company completed its all-stock acquisition of Pacific Premier, the parent company of Pacific Premier Bank, National Association. Pursuant to the terms of the acquisition agreement, Pacific Premier stockholders received 0.9150 of a share of Columbia common stock for each share of Pacific Premier common stock they held. Integration efforts are progressing as planned, supported by comprehensive cross-company teams led by Columbia's Integration Management Office. The acquisition rounds out our Western footprint and strengthens our presence as a leading financial institution in the western United States. It also expands our product and service offerings, enabling us to deliver more comprehensive, needs-based financial solutions to both existing and prospective customers.
Current report
•Net interest margin, on a tax-equivalent basis, was 3.84% for the three months ended September 30, 2025, as compared to 3.75% for the three months ended June 30, 2025, due to one month operating as a combined company and a favorable shift into lower-cost funding sources, which reduced deposit costs. The average cost of interest-bearing deposits declined by 9 basis points to 2.43%, reflecting proactive rate management following the Federal Reserve's September rate cut and a reduction in brokered deposits. Additionally, the amortization of Pacific Premier's time deposit premiums contributed approximately $4 million to net interest income. Overall, the cost of interest-bearing liabilities declined to 2.65%, a 13-basis-point decrease from the prior quarter, as a reduction in the balance of borrowings provided further benefit.
Current report
•Non-interest income was $77 million for the three months ended September 30, 2025, as compared to $65 million for the three months ended June 30, 2025. The increase was driven by one month operating as a combined company and quarterly changes in fair value adjustments and MSR hedging activity, due to interest rate fluctuations during the quarter, resulting in a net fair value gain of $5 million in the third quarter compared to a net fair value loss of $1 million in the prior quarter.
Current report
•Non-interest expense was $393 million for the three months ended September 30, 2025, an increase of $115 million as compared to the three months ended June 30, 2025, primarily due to an increase of $79 million in merger and restructuring expenses compared to the prior quarter and one month operating as a combined company.
Current report
•Earnings per diluted common share was $1.53 for the nine months ended September 30, 2025, as compared to $1.87 for the nine months ended September 30, 2024. The decline reflects higher non-interest expense, including a legal settlement and one-time merger and restructuring expenses, and increased provision expense related to the initial provision for non-PCD loans. These impacts were partially offset by higher net interest income, driven by one month of combined operations following the Pacific Premier acquisition.
Current report
•Net interest margin, on a tax-equivalent basis, was 3.73% for the nine months ended September 30, 2025, as compared to 3.55% for the nine months ended September 30, 2024. The increase reflects lower funding costs and a favorable shift toward lower-cost customer deposits from higher-cost wholesale funding, partially offset by lower earning asset yields from fluctuating interest rates and product repricing between periods. The amortization of Pacific Premier's time deposit premiums contributed approximately $4 million to net interest income during September 2025.
Current report
•Non-interest income was $208 million for the nine months ended September 30, 2025, as compared to $161 million for the nine months ended September 30, 2024. The increase was driven by changes in fair value adjustments and growth in customer-related fee income, as well as one month operating as a combined company. The change in fair value included a net gain of $14 million related to loans held for sale and MSR hedging activity for the nine months ended September 30, 2025, compared to a net loss of $7 million for the nine months ended September 30, 2024.
Current report
•Non-interest expense was $1.0 billion for the nine months ended September 30, 2025, as compared to $838 million for the nine months ended September 30, 2024. The increase was primarily driven by an $88 million increase in merger and restructuring expense to $109 million, primarily related to the Pacific Premier acquisition, one month of combined operations, higher salaries and employee benefits, increased software costs, and a $55 million accrual for a legal settlement.
Current report
•Total loans and leases were $48.5 billion as of September 30, 2025, an increase of $10.8 billion as compared to December 31, 2024. The increase was driven by loans acquired through the Pacific Premier acquisition, partially offset by runoff in commercial development and transactional loans, as well as the transfer of $282 million in residential real estate loans to held-for-sale.
Current report
•Total deposits were $55.8 billion as of September 30, 2025, an increase of $14.1 billion as compared to December 31, 2024. The growth was driven by the addition of Pacific Premier deposits and organic increases from recent small business and retail deposit campaigns, partially offset by a reduction in brokered deposits.
Current report
•The ACL was $492 million as of September 30, 2025, an increase of $51 million from December 31, 2024. The change reflects loan growth from the Pacific Premier acquisition, updated economic forecasts incorporated into credit models, and includes $5 million related to PCD loans booked at closing, which did not impact earnings.
Current report
•Provision for credit losses was $70 million and $127 million for the three and nine months ended September 30, 2025, as compared to $30 million for the three months ended June 30, 2025 and $78 million for the nine months ended September 30, 2024. The increase in the provision includes an initial provision for acquired non-PCD loans and unfunded commitments and recalibration of credit models to incorporate Pacific Premier's historical data, and changes in economic forecasts used in the ACL methodology.
Current report
•On October 29, 2025, Columbia's Board of Directors authorized the repurchase of up to $700 million of the Company's common stock under a new repurchase plan, which will expire on November 30, 2026. The timing and amount of common share repurchases will be at the discretion of senior management and subject to various factors, including, without limitation, Columbia’s capital position, financial performance, market conditions, and regulatory considerations. Columbia’s strong capital position supports the expansion of a capital return strategy. We anticipate continued profitability and capital generation, enabling us to execute share repurchases while investing in organic growth and optimizing the balance sheet, consistent with our long-term commitment to shareholder value.
Current report
As a result of the recent acquisition, the Company has identified a new critical accounting estimate related to the fair value measurement of assets acquired and liabilities assumed. Management believes the estimates and assumptions used in determining these fair values, particularly for loans, intangible assets, and goodwill, are significant to understanding the Company's financial condition and results of operations. These estimates require complex and subjective judgments, and accordingly, management considers them to be critical accounting estimates.
Current report
Business Combinations
Current report
The Company accounts for business combinations using the acquisition method of accounting. Under this approach, the acquired company's assets and liabilities are recorded at fair value as of the acquisition date, except where otherwise specified by applicable accounting standards. Any excess of the purchase price over the fair value of net identifiable assets is recognized as goodwill. The operating results of the acquired entity are included in the Company's financial statements beginning on the acquisition date.
Current report
Management applies significant judgment and estimates in valuing acquired assets and liabilities, including assumptions related to projected cash flows, repayment and default rates, discount rates, and realizable collateral values. For PCD loans, the ACL is recognized at acquisition. For non-PCD assets, the ACL is recorded as a provision for credit losses in the same reporting period. Fair value adjustments are subsequently amortized or accreted over the estimated life of the related assets or liabilities.
Current report
Fair value determinations may involve the use of third-party valuation specialists and are based on management's assumptions regarding growth rates, customer attrition, market-based earnings multiples, and other relevant factors. Preliminary fair values may be adjusted post-acquisition if new information becomes available about conditions that existed at the acquisition date. Such adjustments are recognized in the reporting period in which they are identified.
Current report
Valuation of certain assets and liabilities, such as loans, deposits, and identifiable intangibles, may involve significant judgment due to the absence of active markets. Changes in assumptions or adverse economic conditions could materially affect these valuations, including goodwill, and may result in future impairment charges.
Current report
For the nine months ended September 30, 2025, the Company had net income of $335 million, compared to net income of $390 million for the same period in the prior year. The decrease in net income was mainly attributable to an increase in non-interest expense and provision for credit losses, partially offset by increases in net interest income and non-interest income. Non-interest expense increased $173 million, primarily driven by increased merger and restructuring expenses, salaries and employee benefits, and software expenses, associated with the acquisition, as well as a $55 million accrual for a legal settlement. The provision increased mainly due to an initial provision for acquired non-PCD loans and unfunded commitments and a recalibration of our models to incorporate historical Pacific Premier data into our ACL assumptions, where applicable. The increase of $95 million in net interest income reflects lower funding costs, partially offset by lower interest income in the period.
Current report
Net interest income for the three months ended September 30, 2025 was $505 million, an increase of $59 million compared to the three months ended June 30, 2025. The increase was driven by a $70 million increase in interest income, largely reflective of the impact of one month as a combined company in the current period, partially offset by an increase in interest expense due to the addition of deposit balances from the acquisition of Pacific Premier.
Current report
The net interest margin (net interest income as a percentage of average interest-earning assets) on a fully tax-equivalent basis was 3.84% for the three months ended September 30, 2025, as compared to 3.75% for the three months ended June 30, 2025. The increase primarily reflects the impact of one month as a combined company in the current period as well as lower cost of interest-bearing deposits. A favorable shift in Columbia's funding mix also contributed to the increase.
Current report
The cost of interest-bearing deposits for the three months ended September 30, 2025 was 2.43%, a decrease of 9 basis points compared to the three months ended June 30, 2025, reflecting our proactive management of deposit rates ahead of and following a 25-basis point reduction in the federal funds rate in mid-September, and a reduction in higher-cost brokered deposits during the period. The cost of interest-bearing deposits in September also benefited from the amortization of a premium related to Pacific Premier's time deposits, which will continue through December 31, 2025 at an equivalent monthly amount. The amortization contributed $4 million to net interest income during September, and favorably impacted deposit rates. The cost of interest-bearing liabilities for the three months ended September 30, 2025 was 2.65%, a decrease of 13 basis points compared to the three months ended June 30, 2025.
Current report
The increase in non-interest income is generally attributable to one month of combined operations following the acquisition of Pacific Premier. Quarterly changes in fair value adjustments also contributed to the increase in non-interest income between periods.
Current report
The increase in non-interest expense is generally attributable to there being one month of higher expense as result of the acquisition of Pacific Premier, which included one month of combined operations.
Current report
Salaries and employee benefits increased during the three months ended September 30, 2025, as compared to the three months ended June 30, 2025, driven by additional expenses associated with the larger employee base as a result of the acquisition of Pacific Premier, with one month as a combined organization.
Current report
Deposit costs increased during the three months ended September 30, 2025, as compared to the three months ended June 30, 2025, primarily related to one month of combined operations, with HOA-related fees being the driver of the increase. HOA deposit costs primarily reflect pricing arrangements with third-party entities that manage HOA accounts. These costs are variable and tied to account activity and transaction volume. This upward trend is expected to continue, as HOA-related fees are expected to be $10 million quarterly. Columbia's acquisition of Pacific Premier expanded the Company's HOA banking business, which contributes low-cost deposits to our funding base and provides other business-generating opportunities.
Current report
Intangible amortization increased during the three months ended September 30, 2025, as compared to the three months ended June 30, 2025, due to amortization of the core deposit intangibles associated with the acquisition of Pacific Premier. This upward trend is expected to continue; refer to Note 6 -Goodwill and Other Intangible Assets for the table detailing expected amortization expense for intangible assets.
Current report
Merger and restructuring expense increased during the three months ended September 30, 2025, as compared to the three months ended June 30, 2025, driven by personnel costs and legal and professional fees. Merger and restructuring expenses are expected to remain elevated through system integration in the first quarter of 2026. Post-integration, we anticipate realizing cost synergies that will reduce overall expense levels.
Current report
Salaries and employee benefits increased during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, driven by additional expenses associated with the larger employee base as a result of the acquisition of Pacific Premier, with one month as a combined organization, as well as increases to incentive payouts and compensation costs related to stock awards.
Current report
Occupancy and equipment, net increased during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, primarily due to an increase in branch locations and software costs related to the acquisition of Pacific Premier.
Current report
Merger and restructuring expense increased during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, driven by personnel costs and legal and professional fees. Refer to Note 2 –Business Combinationsfor the breakout of acquisition expenses.
Current report
Total loans and leases outstanding as of September 30, 2025 were $48.5 billion, an increase of $10.8 billion as compared to December 31, 2024. The increase was driven by $11.4 billion in loans acquired through the Pacific Premier acquisition, partially offset by runoff in commercial development and transactional loans, as well as the transfer of $282 million in residential mortgage loans to held-for-sale. The loan-to-deposit ratio was 87% and 90% as of September 30, 2025 and December 31, 2024, respectively.
Current report
The ACL represents management's best estimate of lifetime credit losses for loans and leases and unfunded commitments. The ACL totaled $492 million as of September 30, 2025, an increase of $51 million from $441 million as of December 31, 2024. The increase in the ACL during the three and nine months ended September 30, 2025, reflect the addition of the Pacific Premier loan portfolio, which contributed to a $10.8 billion increase in total loans and leases held for investment. The ACL reflects $70 million provision for credit losses attributed to the acquired non-PCD loans and unfunded commitments and includes $5 million related to Pacific Premier PCD loans booked at acquisition closing and updated economic forecasts incorporated into credit models. Offsetting adjustments were recognized at both the Bank and FinPac, reflecting routine provisioning and recapture activity within the overall allowance methodology.
Current report
Total deposits were $55.8 billion as of September 30, 2025, an increase of $14.1 billion as compared to December 31, 2024. The increase was due to the acquisition of Pacific Premier and organic growth in customer deposits, partially offset by a decrease in brokered deposits.
Current report
On October 29, 2025, Columbia's Board of Directors authorized the repurchase of up to $700 million of the Company's common stock under a new repurchase plan, which will expire on November 30, 2026. The timing and amount of common share repurchases will be at the discretion of senior management and subject to various factors, including, without limitation, Columbia’s capital position, financial performance, market conditions, and regulatory considerations.
Removed paragraphs (23)
Previous report
The majority of the Bank’s loans and deposits are within its service areas in Oregon, Washington, California, Idaho, Nevada, Arizona, Colorado, and Utah. The Bank is an Oregon state-chartered commercial bank, the deposits of which are insured in whole or in part by the FDIC.
Previous report
Pending Acquisition
Previous report
•On April 23, 2025, we announced that we and Pacific Premier, the parent company of Pacific Premier Bank, National Association, entered into the Merger Agreement, pursuant to which Columbia will acquire Pacific Premier in an all-stock transaction. Pursuant to the terms of the Merger Agreement, Pacific Premier stockholders will receive 0.9150 of a share of Columbia common stock for each Pacific Premier share they own. Columbia’s shareholders and Pacific Premier’s stockholders approved the acquisition at their respective special meetings, which were held on July 21, 2025. The acquisition is expected to close as soon as August 31, 2025, pending satisfaction of the remaining customary closing conditions. Integration efforts are progressing as planned, driven by the comprehensive preparation of cross-company teams, which are led by Columbia's Integration Management Office, positioning us for a smooth and timely closing once the remaining customary closing conditions are satisfied. The acquisition is a natural and strategic fit that supports our Business Bank of Choice operating strategy. Pacific Premier’s footprint accelerates and strengthens Columbia’s competitive position in Southern California, and it brings new products and services that enhance our offerings and elevate our ability to provide needs-based solutions for our existing and prospective customers.
Previous report
•Earnings per diluted common share was $0.73 for the three months ended June 30, 2025, as compared to $0.41 for the three months ended March 31, 2025. The increase for the three months ended June 30, 2025, as compared to the prior period, was primarily driven by a decrease in non-interest expense, as the prior period included a $55.0 million accrual for a legal settlement and $14.6 million in severance expense not repeated in the current quarter. Higher net interest income also contributed to the increase in earnings per diluted common share between periods.
Previous report
•Net interest margin, on a tax-equivalent basis, was 3.75% for the three months ended June 30, 2025, as compared to 3.60% for the three months ended March 31, 2025, due primarily to higher earning asset yields. Net interest income was $446.4 million for the three months ended June 30, 2025, an increase of $21.5 million compared to the three months ended March 31, 2025. The increase reflects higher interest income earned on loans and investment securities and relatively stable funding costs.
Previous report
•Non-interest income was $64.5 million for the three months ended June 30, 2025, as compared to $66.4 million for the three months ended March 31, 2025. The decrease was driven by changes in fair value adjustments, which include adjustments in fair value for certain loans held for investment and MSR hedging activity due to rate changes, which collectively resulted in a net fair value loss of $640,000 in the three months ended June 30, 2025, compared to a net fair value gain of $9.5 million in the prior period. The change between periods was partially offset by higher core fee-generating businesses, including card-based fee income, swap-related income, and financial services and trust revenue.
Previous report
•Non-interest expense was $278.0 million for the three months ended June 30, 2025, down $62.1 million as compared to the three months ended March 31, 2025, which included a $55.0 million accrual for a legal settlement and $14.6 million in severance expense recorded in merger and restructuring expense that was not repeated in the current quarter.
Previous report
•Net interest margin, on a tax-equivalent basis, was 3.67% for the six months ended June 30, 2025, as compared to 3.54% for the six months ended June 30, 2024. The increase for the six months ended June 30, 2025 compared to the prior year period was due to lower funding costs, which were partially offset by lower earning asset yields due to fluctuating interest rates and product repricing between the periods. A favorable balance sheet mix shift to lower-cost customer deposits from higher-cost wholesale funding sources between periods contributed positively to net interest margin. Net interest income increased $20.6 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, due to the same factors that impacted net interest margin, partially offset by slight contraction in the balance of average interest-earning assets between periods.
Previous report
•Non-interest income was $130.8 million for the six months ended June 30, 2025, as compared to $95.1 million for the six months ended June 30, 2024. The increase was mainly due to fluctuations in fair value adjustments for certain loans held for sale and MSR hedging activity, which collectively resulted in a favorable change due to a net fair value gain of $8.8 million for the six months ended June 30, 2025, compared to a net fair value loss of $13.6 million for the six months ended June 30, 2024.
Previous report
•Non-interest expense was $618.1 million for the six months ended June 30, 2025, as compared to $566.8 million for the six months ended June 30, 2024. The increase for the six months ended June 30, 2025 is mainly related to a $55.0 million accrual for a legal settlement and $14.6 million in severance expense recorded in merger and restructuring expense recorded in the first quarter. This increase was partially offset by lower FDIC assessment fees and intangible amortization during the period.
Previous report
•Total loans and leases were $37.6 billion as of June 30, 2025, a decrease of $43.9 million, as compared to December 31, 2024. The decrease in total loans and leases was primarily in residential and commercial loan balances, partially offset by an increase in CRE balances. The contraction was driven by loan payoffs and slower origination volume, partially offset by draws in CRE construction loans and growth in owner-occupied term CRE balances.
Previous report
•Total deposits were $41.7 billion as of June 30, 2025, an increase of $21.9 million, as compared to December 31, 2024. The increase was due to our recent small business and retail deposits campaign, as well as an increase in brokered deposits, partially offset by a decrease in customer deposits, due in part to seasonally anticipated customer tax payments and owner distributions. Customers also continue to use their own cash to make investments in their businesses or pay down debt.
Previous report
•The ACL was $439.0 million as of June 30, 2025, a decrease of $1.8 million compared to December 31, 2024. The decrease in the ACL reflects credit migration trends, changes in the economic assumptions used in credit models and decreases in loan portfolio balances during the period.
Previous report
•The Company had a provision for credit losses of $29.4 million and $56.9 million for the three and six months ended June 30, 2025. This compares to a provision for credit losses of $27.4 million for the three months ended March 31, 2025 and $49.0 million for the six months ended June 30, 2024. The increase for the three and six months ended June 30, 2025 compared to the prior periods was mainly due to credit migration trends, charge-off activity, and changes in the economic forecasts used in credit models.
Previous report
For the six months ended June 30, 2025, the Company had net income of $239.0 million, compared to net income of $244.2 million for the same period in the prior year. The decrease in net income was mainly attributable to an increase in non-interest expense, partially offset by increases in non-interest income and net interest income. The $51.4 million increase in non-interest expense was primarily driven by a $55.0 million accrual for a legal settlement and $14.6 million in severance expense recorded in merger and restructuring expense, partially offset by decreases in FDIC assessment fees and intangible amortization. The increase of $35.8 million in non-interest income was primarily driven by favorable fluctuations in fair value adjustments, which include adjustments in fair value for certain loans held for investment and MSR hedging activity. These adjustments resulted in a net fair value gain of $8.8 million in the six months ended June 30, 2025, compared to a net fair value loss of $13.6 million in the prior period, driven by changes in interest rates during the periods as well as growth in other core fee-generating businesses, including swap-related income, financial services and trust revenue, and treasury management fees. The increase of $20.6 million in net interest income reflects lower funding costs, only partially offset by lower interest income in the period.
Previous report
Net interest income for the three months ended June 30, 2025 was $446.4 million, an increase of $21.5 million compared to the three months ended March 31, 2025. The increase was driven by a $23.4 million increase in interest income, mainly on loans and investment securities, and relatively stable funding costs.
Previous report
The net interest margin (net interest income as a percentage of average interest-earning assets) on a fully tax-equivalent basis was 3.75% for the three months ended June 30, 2025, as compared to 3.60% for the three months ended March 31, 2025. Net interest margin benefited from an increase in the yield on taxable investment securities to 4.22% for the three months ended June 30, 2025, from 3.72% for the three months ended March 31, 2025. The increase is due to higher prepayment speeds and the purchase of higher-yielding investment securities during the quarter. The average yield on the loan portfolio increased 8 basis points between periods to 6.00% for the three months ended June 30, 2025, due primarily to higher yields on commercial and construction loans. Loan yields also benefited from a $1.6 million interest recovery recorded during the month of June 2025 related to a non-performing loan that repaid in full. The cost of interest-bearing deposits was unchanged between periods at 2.52% for the second quarter of 2025. The cost of interest-bearing liabilities for the three months ended June 30, 2025 was 2.78%, a decrease of 2 basis points compared to the three months ended March 31, 2025.
Previous report
Gain on certain loans held for investment, at fair value for the three months ended June 30, 2025, as compared to the three months ended March 31, 2025, decreased due to interest rate fluctuations between periods that resulted in a gain on the fair value of certain loans held for investment of $212,000, as compared to a gain of $7.0 million for the prior quarter.
Previous report
Salaries and employee benefits increased during the three months ended June 30, 2025, as compared to the three months ended March 31, 2025, driven by compensation accruals to salaries, annual merit increases, and incentive payouts earned during the quarter.
Previous report
Merger and restructuring expense decreased during the three months ended June 30, 2025, as compared to the three months ended March 31, 2025, mainly due to a decrease in restructuring expense as compared to the prior period, which included higher severance expense. The three months ended June 30, 2025 includes higher merger-related expense related to Columbia’s pending acquisition of Pacific Premier, as compared to the three months ended March 31, 2025. This upward trend is expected to continue as merger and integration activities progress.
Previous report
Total loans and leases outstanding as of June 30, 2025 were $37.6 billion, a decrease of $43.9 million as compared to December 31, 2024. The decrease was primarily in residential and commercial loan balances, partially offset by an increase in CRE balances. The contraction was driven by loan payoffs and slower origination volume, partially offset by draws in CRE construction loans and growth in owner-occupied term CRE balances. The loan to deposit ratio was 90% at both June 30, 2025 and December 31, 2024.
Previous report
The ACL represents management's best estimate of lifetime credit losses for loans and leases and unfunded commitments. The ACL totaled $439.0 million as of June 30, 2025, a decrease of $1.8 million from $440.8 million as of December 31, 2024. The changes in the ACL estimate during the three and six months ended June 30, 2025, reflect credit migration trends, changes in the economic assumptions used in the credit models, and a recalibration of the CRE, residential mortgage, and home equity line of credit CECL models in the first quarter of 2025.
Previous report
Total deposits were $41.7 billion as of June 30, 2025, an increase of $21.9 million as compared to December 31, 2024. The increase was due to our recent small business and retail deposits campaign, as well as an increase in brokered deposits, partially offset by a decrease in customer deposits, due in part to seasonally anticipated customer tax payments and owner distributions. Customers also continue to use their own cash to make investments in their businesses or pay down debt.
Reworded paragraphs (56)
Previous wording
•risks related to the proposed Merger with Pacific Premier including, among others, (i) failure to complete the Merger or unexpected delays related to the Merger or either party's inability to satisfy the remaining customary closing conditions required to complete the Merger outlined in the Merger Agreement, (ii) certain restrictions during the pendency of the Merger that may impact the parties' ability to pursue certain business opportunities or strategic transactions, (iii) diversion of management's attention from ongoing business operations and opportunities, (iv) cost savings and any revenue or expense synergies from the Merger may not be fully realized or may take longer than anticipated to be realized, (v) deposit attrition, customer or employee loss, and/or revenue loss as a result of the announcement of the Merger, (vi) expenses related to the Merger being greater than expected, and (vii) shareholder litigation that could prevent or delay the closing of the Merger or otherwise negatively impact the Company’s business and operations;
Current wording
•risks related to the acquisition of Pacific Premier including, among others, (i) diversion of management's attention from ongoing business operations and opportunities, (ii) cost savings and any revenue or expense synergies from the acquisition may not be fully realized or may take longer than anticipated to be realized, (iii) deposit attrition, customer or employee loss, and/or revenue loss as a result of the acquisition, and (iv) shareholder litigation that could negatively impact the Company's business and operations;
Previous wording
Columbia Banking System, Inc. (referred to in this Quarterly Report on Form 10-Q as "we," "our," "the Company" and "Columbia") is a registered financial holding company, which wholly owns the Bank. In order to align with the name of the holding company and the variety of brands already operated by the Bank today under the Columbia name, Columbia renamed the Bank to "Columbia Bank" effective July 1, 2025, and the Bank will begin doing business under the Columbia Bank name and branding beginning on September 1, 2025. Through the Bank, we provide a broad range of banking, private banking, mortgage and other financial services to corporate, institutional, small business, and individual customers. FinPac, a commercial equipment leasing company, is a subsidiary of the Bank. Along with its subsidiaries, the Company is subject to the regulations of state and federal agencies and undergoes regular examinations by these regulatory agencies.
Current wording
Columbia Banking System, Inc. (referred to in this Quarterly Report on Form 10-Q as "we," "our," "the Company" and "Columbia") is a registered financial holding company. On August 31, 2025, Columbia completed its previously announced acquisition of Pacific Premier.
Previous wording
The following is a discussion of our results for the three and six months ended June 30, 2025, as compared to the applicable prior periods.
Current wording
The following is a discussion of our results for the three and nine months ended September 30, 2025, as compared to the applicable prior periods.
Previous wording
•Earnings per diluted common share was $1.14 for the six months ended June 30, 2025, as compared to $1.17 for the six months ended June 30, 2024. The decrease for the six months ended June 30, 2025, as compared to the prior year period, was primarily driven by an increase in non-interest expense, due to the litigation accrual and severance, as noted above. Higher non-interest income and net interest income partially offset the increase in non-interest expense.
Current wording
•Earnings per diluted common share was $0.40 for the three months ended September 30, 2025, as compared to $0.73 for the three months ended June 30, 2025. The decrease was primarily attributable to higher non-interest expense, largely driven by merger and restructuring expenses related to the acquisition of Pacific Premier, as well as an increase in provision expense due to the initial provision for non-PCD loans acquired from Pacific Premier. These impacts were partially offset by higher net interest income, reflecting one month of income from the combined organization.
Previous wording
•Total consolidated assets were $51.9 billion as of June 30, 2025, compared to $51.6 billion as of December 31, 2024.
Current wording
•Total consolidated assets were $67.5 billion as of September 30, 2025, as compared to $51.6 billion as of December 31, 2024. The increase was primarily due to $16.7 billion in assets acquired through the Pacific Premier acquisition, with the majority of the growth concentrated in loans and investment securities.
Previous wording
•Non-performing assets increased to $180.3 million, or 0.35% of total assets, as of June 30, 2025, compared to $169.6 million, or 0.33% of total assets, as of December 31, 2024. Non-performing loans and leases were $177.4 million, or 0.47% of total loans and leases, as of June 30, 2025, compared to $166.9 million, or 0.44% of total loans and leases, as of December 31, 2024. As of June 30, 2025, non-performing loans included $67.8 million in government guarantees.
Current wording
•Non-performing assets were $199 million, or 0.29% of total assets, as of September 30, 2025, as compared to $170 million, or 0.33% of total assets, as of December 31, 2024. Non-performing loans and leases were $196 million, or 0.40% of total loans and leases, as of September 30, 2025, compared to $167 million, or 0.44% of total loans and leases, as of December 31, 2024. As of September 30, 2025, non-performing loans included $70 million in government guarantees. The increases in non-performing assets and loans primarily reflect assets acquired through the Pacific Premier acquisition.
Previous wording
•Total cash and cash equivalents were $1.9 billion as of June 30, 2025, an increase of $63.9 million from December 31, 2024. The Company manages its cash position as part of management's strategy to maintain a high-quality liquid asset position to support balance sheet flexibility, fund growth in lending and investment portfolios, and deleverage the balance sheet by decreasing debt and non-deposit liabilities as economic conditions permit.
Current wording
•Total cash and cash equivalents were $2.3 billion as of September 30, 2025, an increase of $464 million from December 31, 2024. The Company actively manages its cash position as part of its strategy to maintain a high-quality liquid asset position that supports balance sheet flexibility, funds growth in lending and investment portfolios, and enables deleveraging the balance sheet by decreasing debt and non-deposit liabilities as economic conditions allow.
Previous wording
•Including secured off-balance sheet lines of credit, total available liquidity was $18.6 billion as of June 30, 2025, representing 36% of total assets, 44% of total deposits, and 132% of estimated uninsured deposits.
Current wording
•Including secured off-balance sheet lines of credit, total available liquidity was $26.7 billion as of September 30, 2025, representing 40% of total assets, 48% of total deposits, and 130% of estimated uninsured deposits.
Previous wording
•The Company's total risk-based capital ratio was 13.0% and its common equity tier 1 ("CET1") capital ratio was 10.8% as of June 30, 2025. As of December 31, 2024, the Company's total risk-based capital ratio was 12.8% and its CET1 capital ratio was 10.5%.
Current wording
•The Company's total risk-based capital ratio was 13.4% and its common equity tier 1 ("CET1") capital ratio was 11.6% as of September 30, 2025. As of December 31, 2024, the Company's total risk-based capital ratio was 12.8% and its CET1 capital ratio was 10.5%.
Previous wording
Our critical accounting estimates are described in detail in the Critical Accounting Estimates section of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 25, 2025. The condensed consolidated financial statements are prepared in conformity with GAAP and follow general practices within the financial services industry, in which the Company operates. This preparation requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, actual results could differ from the estimates, assumptions, and judgments reflected in the financial statements. Certain estimates inherently have a greater reliance on the use of assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. Management believes that the estimates for ACL and goodwill are important to the portrayal of the Company's financial condition and results of operations and require difficult, subjective, or complex judgments. There have been no material changes in the methodology of these estimates during the six months ended June 30, 2025.
Current wording
Our critical accounting estimates are described in detail in the Critical Accounting Estimates section of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 25, 2025. The condensed consolidated financial statements are prepared in conformity with GAAP and follow general practices within the financial services industry in which the Company operates. This preparation requires management to make estimates, assumptions, and judgments that affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions, and judgments are based on information available as of the date of the financial statements; accordingly, as this information changes, actual results could differ from the estimates, assumptions, and judgments reflected in the financial statements. Certain estimates inherently have a greater reliance on the use of assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported.
Previous wording
The Company had net income of $152.4 million for the three months ended June 30, 2025, compared to net income of $86.6 million for the three months ended March 31, 2025. The increase in net income was mainly attributable to a decrease of $62.1 million in non-interest expense, which related to a $55.0 million accrual for a legal settlement and $14.6 million in severance expense recorded in merger and restructuring expense in the first quarter of 2025 that was not repeated in the current quarter. There was also an increase of $21.5 million in net interest income reflecting higher interest income earned on loans and investment securities and relatively stable funding costs as compared to the prior quarter.
Current wording
The Company had net income of $96 million for the three months ended September 30, 2025, compared to net income of $152 million for the three months ended June 30, 2025. The decrease in net income was mainly attributable to an increase of $115 million in non-interest expense, due mainly to higher merger and restructuring expense, as well as higher expense as a result of the acquisition of Pacific Premier, which included one month of combined operations. There was also an increase in the provision driven by the $70 million initial provision related to non-PCD loans and unfunded commitments from the acquisition of Pacific Premier. The decrease in net income was partially offset by an increase of $59 million in net interest income reflecting the impact of one month as a combined company in the current period.
Previous wording
Net interest income for the six months ended June 30, 2025 was $871.4 million, an increase of $20.6 million compared to the six months ended June 30, 2024. The change in net interest income was mainly due to lower interest rates, driven by the reductions in the federal funds rate in the latter half of 2024, which resulted in lower rates on interest-bearing liabilities, almost completely offset by lower yields on interest-earning assets for the six months ended June 30, 2025 compared to the prior year period.
Current wording
Net interest income for the nine months ended September 30, 2025 was $1.4 billion, an increase of $95 million compared to the nine months ended September 30, 2024. The increase in net interest income was driven by a decrease of $116 million in interest expense mainly due to lower interest rates driven by the reductions in the federal funds rate of 125 basis points since the first part of 2024, which resulted in lower rates on interest-bearing liabilities, partially offset by lower yields on interest-earning assets for the nine months ended September 30, 2025 compared to the prior-year period.
Previous wording
The net interest margin on a fully tax-equivalent basis was 3.67% for the six months ended June 30, 2025, as compared to 3.54% for the six months ended June 30, 2024. The increase for the six months ended June 30, 2025 compared to the prior year period was due to lower funding costs, partially offset by lower earning yields. A favorable balance sheet mix shift to lower-cost customer deposits from higher-cost wholesale funding sources between periods contributed positively to net interest margin. The yield on loans and leases for the six months ended June 30, 2025 and 2024 was 5.96% and 6.17%, respectively, a decrease of 21 basis points, primarily due to the declining rate environment. The cost of interest-bearing liabilities was 2.79% for the six months ended June 30, 2025, compared to 3.28% for the six months ended June 30, 2024, a decrease of 49 basis points, due to the reductions in the federal funds rate and the favorable balance sheet mix shift.
Current wording
The net interest margin on a fully tax-equivalent basis was 3.73% for the nine months ended September 30, 2025, as compared to 3.55% for the nine months ended September 30, 2024. The increase for the nine months ended September 30, 2025 compared to the prior year period was due primarily to lower funding costs, partially offset by lower earning yields. A favorable balance sheet mix shift to lower-cost customer deposits from higher-cost wholesale funding sources between periods contributed positively to net interest margin. The cost of interest-bearing liabilities was 2.74% for the nine months ended September 30, 2025, compared to 3.28% for the nine months ended September 30, 2024, a decrease of 54 basis points, due mainly to a favorable shift in Columbia's funding mix and reductions in the federal funds rate. The yield on loans and leases for the nine months ended September 30, 2025 and 2024 was 5.96% and 6.18%, respectively, a decrease of 22 basis points, primarily due to the declining rate environment, partially offset by a relative increase in average loan balances as a percentage of average earning asset balances.
Previous wording
The Federal Reserve lowered the target range for the federal funds rate by 0.50% in September 2024 and an additional 0.25% in both November and December 2024. In the 2025 meetings, the Federal Reserve maintained the target rate at 4.25%-4.50%. The balance sheet remained in a slightly liability-sensitive position as of June 30, 2025. We expect customer deposit balance trends to be a driver of net interest margin performance, as we continue to target a lower funding contribution from wholesale sources, like FHLB Advances and brokered deposits.
Current wording
The Federal Reserve lowered the target range for the federal funds rate by 0.50% in September 2024 and an additional 0.25% in both November and December 2024. In September 2025, the Federal Reserve again decreased the target for the federal funds rate by 0.25%. The balance sheet remained in a slightly liability-sensitive position as of September 30, 2025. We expect customer deposit balance trends to be a driver of net interest margin performance, as we continue to target a lower funding contribution from wholesale sources, like FHLB advances and brokered deposits.
Previous wording
The following tables present condensed average balance sheet information, together with interest income and yields on average interest-earning assets, and interest expense and rates paid on average interest-bearing liabilities for periods presented:
Current wording
The following tables present condensed average balance sheet information, together with interest income and yields on average interest-earning assets, and interest expense and rates paid on average interest-bearing liabilities for the periods presented:
Previous wording
The Company had a $29.4 million provision for credit losses for the three months ended June 30, 2025, as compared to a $27.4 million provision for the three months ended March 31, 2025. As an annualized percentage of average outstanding loans and leases, the provision for credit losses recorded for the three months ended June 30, 2025 was 0.31%, as compared to 0.29% for the three months ended March 31, 2025. The change in provision for credit losses reflects credit migration trends, charge-off activity, and changes in the economic forecasts used in credit models.
Current wording
The Company had a $70 million provision for credit losses for the three months ended September 30, 2025, as compared to a $30 million provision for the three months ended June 30, 2025. The September 30, 2025 provision was $70 million, which was attributed to the acquired non-PCD loans and unfunded commitments and includes $5 million related to Pacific Premier PCD loans booked at acquisition closing, and updated economic forecasts incorporated into credit models. Offsetting adjustments were recognized at both the Bank and FinPac, reflecting routine provisioning and recapture activity within the overall allowance methodology. As an annualized percentage of average outstanding loans and leases, the provision for credit losses recorded for the three months ended September 30, 2025 was 0.67%, as compared to 0.31% for the three months ended June 30, 2025.
Previous wording
For the three months ended June 30, 2025 and March 31, 2025, net charge-offs were $29.3 million. As an annualized percentage of average outstanding loans and leases, net charge-offs for the three months ended June 30, 2025 were 0.31%, as compared to 0.32% for the three months ended March 31, 2025. Net charge-offs in the FinPac portfolio were $14.2 million for the three months ended June 30, 2025, a $2.6 million decrease from the three months ended March 31, 2025. Net charge-offs, exclusive of the FinPac portfolio, were $15.2 million, as compared to $12.6 million in the prior period, which reflects the partial charge-off of two relationships with previously established reserves.
Current wording
For the three months ended September 30, 2025 and June 30, 2025, net charge-offs were $22 million and $29 million, respectively. As an annualized percentage of average outstanding loans and leases, net charge-offs for the three months ended September 30, 2025 were 0.21%, as compared to 0.31% for the three months ended June 30, 2025. Net charge-offs in the FinPac portfolio were $16 million for the three months ended September 30, 2025, a $2 million increase from the three months ended June 30, 2025. Exclusive of the FinPac portfolio, net charge-offs were $6 million, as compared to $15 million in the prior period.
Previous wording
The Company had a $56.9 million provision for credit losses for the six months ended June 30, 2025, as compared to $49.0 million for the six months ended June 30, 2024. The increase was primarily driven by credit migration trends and changes in the economic forecasts used in credit models. As an annualized percentage of average outstanding loans and leases, the provision for credit losses recorded for the six months ended June 30, 2025 was 0.30%, as compared to 0.26% for the six months ended June 30, 2024.
Current wording
The Company had a $127 million provision for credit losses for the nine months ended September 30, 2025, as compared to $78 million for the nine months ended September 30, 2024. The increase was driven by the $70 million provision for credit losses attributed to the acquired non-PCD loans and unfunded commitments and includes $5 million related to Pacific Premier PCD loans booked at acquisition closing, and updated economic forecasts incorporated into credit models. Offsetting adjustments were recognized at both the Bank and FinPac, reflecting routine provisioning and recapture activity within the overall allowance methodology. As an annualized percentage of average outstanding loans and leases, the provision for credit losses recorded for the nine months ended September 30, 2025 was 0.44%, as compared to 0.28% for the nine months ended September 30, 2024.
Previous wording
For the six months ended June 30, 2025, net charge-offs were $58.7 million, as compared to $74.4 million for the six months ended June 30, 2024. As an annualized percentage of average outstanding loans and leases, net charge-offs for the six months ended June 30, 2025 were 0.31%, as compared to 0.40% for the six months ended June 30, 2024. Net charge-offs in the FinPac portfolio were $30.9 million for the six months ended June 30, 2025, as compared to $48.5 million for the six months ended June 30, 2024, which is reflective of continued improvement in the transportation sector of the lease portfolio. Net charge-offs were $27.8 million for the Bank for the six months ended June 30, 2025, an increase of $1.8 million, as compared to the six months ended June 30, 2024.
Current wording
For the nine months ended September 30, 2025, net charge-offs were $81 million, as compared to $104 million for the nine months ended September 30, 2024. As an annualized percentage of average outstanding loans and leases, net charge-offs for the nine months ended September 30, 2025 were 0.28%, as compared to 0.37% for the nine months ended September 30, 2024. Exclusive of the FinPac portfolio, net charge-offs were $47 million for the nine months ended September 30, 2025, as compared to $68 million for the nine months ended September 30, 2024, which is reflective of continued improvement of the lease portfolio. Net charge-offs were $34 million for the Bank for the nine months ended September 30, 2025 and 2024.
Previous wording
Typically, loans in a non-accrual status will not have an ACL as they will be written down to their net realizable value or charged off. However, the net realizable value for homogeneous leases and equipment finance agreements are determined by the LGD calculated by the CECL model, and therefore homogeneous leases and equipment finance agreements on non-accrual will have an ACL amount until they become 181 days past due, at which time they are charged off. The non-accrual leases and equipment finance agreements of $19.4 million as of June 30, 2025 have a related ACL of $17.2 million, with the remaining loans written-down to the estimated fair value of the collateral, less estimated costs to sell, and are expected to be resolved with no additional material loss, absent further decline in market prices.
Current wording
Typically, loans in a non-accrual status will not have an ACL as they will be written down to their net realizable value or charged off. However, the net realizable value for homogeneous leases and equipment finance agreements are determined by the LGD calculated by the CECL model, and therefore homogeneous leases and equipment finance agreements on non-accrual will have an ACL amount until they become 181 days past due, at which time they are charged off. The non-accrual leases and equipment finance agreements of $17 million as of September 30, 2025 have a related ACL of $15 million, with the remaining loans written-down to the estimated fair value of the collateral, less estimated costs to sell, and are expected to be resolved with no additional material loss, absent further decline in market prices.
Previous wording
Residential mortgage banking revenue increased during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The variance was driven by the MSR hedge gain of $5.0 million during the six months ended June 30, 2025, as compared to a loss of $5.9 million in the six months ended June 30, 2024, partially offset by interest rate fluctuations, which decreased the fair value of the MSR asset during the six months ended June 30, 2025.
Current wording
Residential mortgage banking revenue increased during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The variance was driven by the MSR hedge gain of $5 million during the nine months ended September 30, 2025, as compared to a loss of $1 million in the nine months ended September 30, 2024, with changes in the fair value of the MSR asset reported in non-interest income consistent between periods.
Previous wording
Gain (loss) on certain loans held for investment, at fair value for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, increased due to interest rate fluctuations between periods that resulted in a gain on the fair value of certain loans held for investment of $7.2 million in the current period, as compared to a loss of $12.5 million in the prior year period.
Current wording
Gain (loss) on certain loans held for investment, at fair value for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, increased due to interest rate fluctuations between periods that resulted in a gain of $11 million in the current period, as compared to a loss of $3 million in the prior year period.
Previous wording
Other income for the three months ended June 30, 2025, as compared to the three months ended March 31, 2025, increased primarily due to interest rate fluctuations between periods that resulted in higher trading income and a favorable change of $1.3 million in swap customer fee revenue due to a higher transaction volumes in the current quarter compared to the prior quarter.
Current wording
Other income increased during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, primarily due to a favorable change related to swap customer fee revenue and related income of $8 million between periods.
Previous wording
FDIC assessments decreased during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, due mainly to the $5.7 million in FDIC special assessment expense in the first half of 2024 that was not repeated in the current period.
Current wording
FDIC assessments decreased during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, due mainly to the $6 million in FDIC special assessment expense in the first half of 2024 that was not repeated in the current period, as well as a reversal of prior FDIC assessment expense during the current period.
Previous wording
Legal settlement increased during the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, due to the $55.0 million accrual related to a legal settlement reached in the first quarter of 2025. Refer to Note 7 –Commitments and Contingencies for further information.
Current wording
Legal settlement increased during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, due to the $55 million accrual related to a legal settlement reached in the first quarter of 2025. Refer to Note 8 –Commitments and Contingencies for further information.
Previous wording
The Company's effective tax rate for the three and six months ended June 30, 2025 was 25.1% and 27.0%, respectively, as compared to 30.1% for the three months ended March 31, 2025 and 26.0% for the six months ended June 30, 2024. The effective tax rates differed from the statutory rate principally because of state taxes, non-deductible compensation, nondeductible FDIC assessments, and income on tax-exempt investment securities and loans. The change to the effective tax rates for the three and six months ended June 30, 2025, as compared to prior periods, was primarily attributable to changes in non-deductible compensation.
Current wording
The Company's effective tax rate for the three and nine months ended September 30, 2025 was 19.3% and 24.9%, respectively, as compared to 25.1% for the three months ended June 30, 2025 and 25.8% for the nine months ended September 30, 2024. The effective tax rates differed from the statutory rate principally because of state taxes, non-deductible compensation, non-deductible FDIC assessments, and income on tax-exempt investment securities and loans. The change to the effective tax rate for the three and nine months ended September 30, 2025, compared to the three months ended June 30, 2025 and the nine months ended September 30, 2024, was primarily attributable to a benefit recorded for the revaluation of the net deferred tax asset due to the effects of the acquisition of Pacific Premier.
Previous wording
Investment debt securities available for sale were $8.7 billion as of June 30, 2025, compared to $8.3 billion as of December 31, 2024. The increase was primarily due to securities purchases of $547.6 million and an increase of $165.5 million in fair value of investment securities available for sale, due to lower rates during the period, partially offset by paydowns, calls, and maturities of $371.5 million.
Current wording
Investment debt securities available for sale were $11.0 billion as of September 30, 2025, compared to $8.3 billion as of December 31, 2024. The increase was primarily due to $2.8 billion in securities acquired in connection with the acquisition of Pacific Premier, sales of $1.8 billion of acquired investment securities, purchases of $2.2 billion in securities, and an increase of $262 million in fair value of investment securities available for sale, due to lower rates during the period.
Previous wording
The following tables present the par value, amortized cost, and fair values of debt securities as available for sale and held to maturity investment debt securities portfolio by major type as of the dates presented:
Current wording
The following tables present the par value, amortized cost, and fair values of investment debt securities as available for sale and held to maturity by major type as of the dates presented:
Previous wording
As of June 30, 2025, the available for sale investment portfolio had gross unrealized losses of $459.8 million. Unrealized losses consisted primarily of unrealized losses on mortgage-backed securities and collateralized mortgage obligations of $379.3 million. The unrealized losses were attributable to changes in market interest rates or the widening of market spreads subsequent to the initial purchase of these securities and are not attributable to changes in credit quality. In the opinion of management, no ACL was considered necessary on these debt securities as of June 30, 2025.
Current wording
As of September 30, 2025, the available for sale investment portfolio had gross unrealized losses of $410 million. Unrealized losses consisted primarily of unrealized losses on mortgage-backed securities and collateralized mortgage obligations of $349 million. The unrealized losses were attributable to changes in market interest rates or the widening of market spreads subsequent to the initial purchase of these securities and are not attributable to changes in credit quality. In the opinion of management, no ACL was considered necessary on these debt securities as of September 30, 2025.
Previous wording
Delinquency and non-accrual loan movements during the period reflect an anticipated move toward a normalized credit environment following a phase of exceptional high credit quality. Non-performing loans in the CRE and commercial portfolios include $37.1 million in government guarantees, which offsets our credit exposure in those portfolios.
Current wording
Delinquency and non-accrual loan movements during the period reflect an anticipated move toward a normalized credit environment following a phase of exceptionally high credit quality. Non-performing loans in the CRE and commercial portfolios include $37 million in government guarantees, which offsets our credit exposure in those portfolios.
Previous wording
The CRE portfolio includes loans to developers and institutional sponsors supporting income-producing or for-sale CRE properties. We mitigate our risk on these loans by requiring collateral values that exceed the loan amount and underwriting the loan with projected cash flow in excess of the debt service requirement. In addition, management tracks the level of owner-occupied CRE loans versus non-owner occupied loans. Owner-occupied real estate loans are based on cash flows from ongoing operations and the borrower must generally occupy more than 50% of rentable space or pay more than 50% of rents. As of June 30, 2025, approximately 27.1% of the outstanding principal balance of our CRE loan portfolio, which includes multifamily properties, were secured by owner-occupied properties.
Current wording
The CRE portfolio includes loans to developers and institutional sponsors supporting income-producing or for-sale CRE properties. We mitigate our risk on these loans by requiring collateral values that exceed the loan amount and underwriting the loan with projected cash flow in excess of the debt service requirement. In addition, management tracks the level of owner-occupied CRE loans versus non-owner occupied loans. Owner-occupied real estate loans are based on cash flows from ongoing operations, and the borrower must generally occupy more than 50% of rentable space or pay more than 50% of rents. As of September 30, 2025, approximately 26% of the outstanding principal balance of our CRE loan portfolio, which includes multifamily properties, were secured by owner-occupied properties.
Previous wording
As of June 30, 2025, the CRE loan portfolio was $19.6 billion, an increase of $32.8 million compared to December 31, 2024, driven by construction and development loan and line utilization. CRE concentrations are managed with a goal of optimizing relationship-driven commercial loans, as well as geographic, and business diversity, primarily in our footprint.
Current wording
As of September 30, 2025, the CRE loan portfolio was $28.6 billion, an increase of $9.1 billion compared to December 31, 2024, driven primarily by loans acquired through the Pacific Premier acquisition, partially offset by a reduction in transactional balances. CRE concentrations are managed with a goal of optimizing relationship-driven commercial loans, as well as geographic and business diversity, primarily in our footprint.
Previous wording
(1)CRE non-accrual loans are inclusive of government guarantees of $16.5 million and $16.3 million as of June 30, 2025 and December 31, 2024, respectively.
Current wording
(1)CRE non-accrual loans are inclusive of government guarantees of $18 million and $16 million as of September 30, 2025 and December 31, 2024, respectively.
Previous wording
Loans secured by multifamily properties, including construction, represented 19% of the total loan portfolio at both June 30, 2025 and December 31, 2024. These assets continue to perform well due to demand for rental properties in our geographic footprint. Although management believes such concentrations have no more than the normal risk of collectability, a substantial decline in the economy in general, material increases in interest rates, changes in tax and rent control policies, tightening credit or refinancing markets, or a decline in real estate values in the Bank's primary geographic footprint in particular, could have an adverse impact on the repayment of these loans.
Current wording
Loans secured by multifamily properties, including construction, represented 24% and 19% of the total loan portfolio at September 30, 2025 and December 31, 2024, respectively. These assets continue to perform well due to demand for rental properties in our geographic footprint. Although management believes such concentrations have no more than the normal risk of collectability, a substantial decline in the economy in general, material increases in interest rates, changes in tax and rent control policies, tightening credit or refinancing markets, or a decline in real estate values in the Bank's primary geographic footprint in particular, could have an adverse impact on the repayment of these loans.
Previous wording
Loans secured by office properties, which are predominantly located in suburban markets, represented approximately 8% of our total loan portfolio at both June 30, 2025 and December 31, 2024, and were comprised of 56% non-owner occupied, 41% owner occupied, and 3% construction loans at June 30, 2025, compared to 57% non-owner occupied, 40% owner occupied, and 3% construction loans at December 31, 2024.
Current wording
Loans secured by office properties, which are predominantly located in suburban markets, represented approximately 8% of our total loan portfolio at both September 30, 2025 and December 31, 2024, and were comprised of 55% non-owner occupied, 43% owner occupied, and 2% construction loans at September 30, 2025, compared to 57% non-owner occupied, 40% owner occupied, and 3% construction loans at December 31, 2024.
Previous wording
Commercial loans are made to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, or other projects. We focus on borrowers doing business within our geographic markets. Commercial loans are generally underwritten individually and secured with the assets of the company and/or the personal guarantee of the business owners. Lease and equipment financing products are designed to address the diverse financing needs of small to large companies, primarily for the acquisition of equipment. As of June 30, 2025, commercial loans held in our loan portfolio were $9.9 billion, a decrease of $23.3 million compared to December 31, 2024, which is mainly attributable to paydowns during the period.
Current wording
Commercial loans are made to commercial customers for use in normal business operations to finance working capital needs, equipment purchases, or other projects. We focus on borrowers doing business within our geographic markets. Commercial loans are generally underwritten individually and secured with the assets of the company and/or the personal guarantee of the business owners. Lease and equipment financing products are designed to address the diverse financing needs of small to large companies, primarily for the acquisition of equipment. As of September 30, 2025, commercial loans held in our loan portfolio were $11.8 billion, an increase of $1.8 billion compared to December 31, 2024, driven primarily by loans acquired through the Pacific Premier acquisition and an organic increase in commercial lines of credit.
Previous wording
The leases and equipment finance portfolio represents approximately 17% of the commercial portfolio and 4% of the total loan portfolio as of June 30, 2025 and December 31, 2024. Net charge-offs in the FinPac lease portfolio were $14.2 million for the three months ended June 30, 2025, as compared to $16.8 million for the three months ended March 31, 2025, reflecting improvements in the trucking and transportation sector of the portfolio. Net charge-offs were up $2.7 million in the remaining commercial portfolio from the prior quarter, which reflects the charge-off of a loan with a previously established reserve.
Current wording
The leases and equipment finance portfolio represented approximately 14% and 17% of the commercial portfolio and 3% and 4% of the total loan portfolio as of September 30, 2025 and December 31, 2024, respectively. Net charge-offs in the FinPac lease portfolio were $16 million for the three months ended September 30, 2025, as compared to $14 million for the three months ended June 30, 2025. Net charge-offs were down $11 million in the remaining commercial portfolio from the prior quarter, which included the charge-off of a loan with a previously established reserve.
Previous wording
(1)Commercial non-accrual loans and leases are inclusive of government guarantees of $20.6 million and $25.2 million as of June 30, 2025 and December 31, 2024, respectively.
Current wording
(1)Commercial non-accrual loans and leases are inclusive of government guarantees of $19 million and $25 million as of September 30, 2025 and December 31, 2024, respectively.
Previous wording
Residential real estate loans represent mortgage loans and lines of credit to consumers for the purchase or refinance of a residence. As of June 30, 2025, residential real estate loans held in our loan portfolio were $7.9 billion, a decrease of $52.4 million as compared to December 31, 2024. The decrease was primarily attributable to greater originations of loans sold on the secondary market, rather than being retained in our loans held for investment portfolio.
Current wording
Residential real estate loans represent mortgage loans and lines of credit to consumers for the purchase or refinance of a residence. As of September 30, 2025, residential real estate loans held in our loan portfolio were $7.9 billion, a decrease of $90 million as compared to December 31, 2024. The decrease was primarily attributable to the transfer of $282 million of residential mortgage loans to the held-for-sale portfolio, partially offset by expanding mortgage lines of credit and a small balance addition through the acquisition of Pacific Premier.
Previous wording
Consumer loans, including secured and unsecured personal loans, personal lines of credit, and motor vehicle loans, decreased $1.0 million to $179.1 million as of June 30, 2025, as compared to December 31, 2024. The decrease was due to normal business activity.
Current wording
Consumer loans, including secured and unsecured personal loans, personal lines of credit, and motor vehicle loans, increased $1 million to $181 million as of September 30, 2025, as compared to December 31, 2024. The change was due to normal business activity.
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Current report — wording carried from elsewhere
Management believes that the estimate for ACL is important to the portrayal of the Company's financial condition and results of operations and require difficult, subjective, or complex judgments. There have been no material changes in the ACL methodology estimate during the nine months ended September 30, 2025.
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Previous report — wording carried elsewhere
Legal settlement decreased during the three months ended June 30, 2025, as compared to the three months ended March 31, 2025, due to the $55.0 million accrual related to a legal settlement reached in the first quarter of 2025 that was not repeated in the current quarter. Refer to Note 7 –Commitments and Contingencies for further information.