COLUMBIA BANKING SYSTEM, INC.
For the period ended Dec 31, 2025. Filed Feb 26, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 26, 2026
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-K
Period ended 2024-12-31; filed 2025-02-25.
0000887343-25-000054
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-26.
0000887343-26-000088
ITEM 7. 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 197 current paragraphs.
93 unchanged; 62 reworded; 42 added; 37 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 27 previous and 27 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 (42)
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. 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. Systems conversion and branch consolidations are on track to be completed during the first quarter of 2026, 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. For additional information regarding this acquisition, see Note 2 –Business Combinationsand Note 9 –Goodwill and Other Intangible Assetsin Item 8 of this Annual Report on Form 10-K.
Current report
•Earnings per diluted common share were $2.30 for the year ended December 31, 2025, compared to $2.55 for the year ended December 31, 2024. The decrease was driven by an increase in weighted-average diluted common shares outstanding as common shares were issued in connection with the Pacific Premier acquisition. The impact was partially offset by an increase in net income.
Current report
•Net income was $550 million for the year ended December 31, 2025, compared to $534 million for the year ended December 31, 2024. The increase was driven by higher net interest income and non-interest income, partially offset by an increase in non-interest expense due to higher expenses related to the acquisition. In addition, provision for credit losses increased, primarily due to the initial provision for credit losses attributed to the acquired non-PCD loans and unfunded commitments.
Current report
•Net interest income was $2.0 billion for the year ended December 31, 2025, as compared to $1.7 billion for the year ended December 31, 2024. The increase was driven by a larger average balance sheet and the impact of four months as a combined company due to the Pacific Premier acquisition, as well as a decrease in interest expense due to lower interest rates and a favorable shift in our funding mix.
Current report
•Net interest margin, on a tax equivalent basis, was 3.83% for the year ended December 31, 2025, compared to 3.57% for the year ended December 31, 2024. The increase was due to a reduction in the cost of interest-bearing liabilities, partially offset by lower average yields on interest-earning assets. Net interest margin also benefited from a favorable shift in our funding mix, reflecting a higher contribution from lower-cost customer deposits and a lower contribution from higher-cost wholesale funding sources, like brokered deposits and term debt.
Current report
•Non-interest income was $298 million for the year ended December 31, 2025, compared to $211 million for the year ended December 31, 2024. The increase was driven by four months of combined operations following the Pacific Premier acquisition, as well as fair value adjustments. The impact of fair value adjustments and hedges resulted in a net fair value gain of $16 million related mainly to loans held for investment at fair value, gain on investment securities, and MSR hedging activity in 2025, compared to a net fair value loss of $13 million in 2024.
Current report
•Non-interest expense was $1.4 billion for the year ended December 31, 2025, compared to $1.1 billion for the year ended December 31, 2024. The increase was primarily driven by a $124 million increase in merger and restructuring expense to $148 million, primarily related to the Pacific Premier acquisition, four months of combined operations, higher salaries and employee benefits, increased occupancy costs, and a $55 million accrual for a legal settlement. The increase was partially offset by the partial recognition of cost savings related to the Pacific Premier acquisition later in 2025.
Current report
•Total loans and leases were $47.8 billion as of December 31, 2025, an increase of $10.1 billion, or 27%, compared to December 31, 2024. The increase in total loans and leases was driven by $11.4 billion in loans acquired through the Pacific Premier acquisition, partially offset by runoff in commercial development and below-market-rate transactional loans, as well as the transfer of $295 million in residential real estate loans to held-for-sale.
Current report
•Total deposits were $54.2 billion as of December 31, 2025, an increase of $12.5 billion, or 30%, from December 31, 2024. The increase was primarily driven by the Pacific Premier acquisition, which contributed $14.5 billion of deposits, and organic increases from recent small business and retail deposit campaigns, partially offset by a reduction in brokered deposits.
Current report
•Total consolidated assets were $66.8 billion as of December 31, 2025, compared to $51.6 billion as of December 31, 2024. The increase was primarily driven by the acquisition of Pacific Premier, which contributed $11.4 billion in loans, $2.8 billion in investment securities, and $874 million in cash.
Current report
•The ACL was $485 million, or 1.02% of loans and leases, as of December 31, 2025, an increase of $44 million, as compared to $441 million, or 1.17% of loans and leases, as of 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
•The Company repurchased 3.7 million common shares for a total of $100 million during the year ended December 31, 2025, under the new repurchase program, approved by Columbia's Board in October 2025, which authorizes the Company to repurchase up to $700 million of common stock through 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 and financial performance, market conditions, and regulatory considerations. Our capital deployment strategy remains focused on supporting organic growth, maintaining strong regulatory ratios, and returning capital to shareholders through dividends and share repurchases.
Current report
Business Combinations
Current report
The Company accounts for business combinations using the acquisition method of accounting. Under this accounting method, the acquired company’s assets and liabilities are recorded at fair value at the date of the acquisition, except as provided for by the applicable accounting guidance, and the results of operations of the acquired company are combined with the acquiree’s results from the date of the acquisition forward. The difference between the purchase price and the fair value of the net assets acquired (including identifiable intangible assets) is recorded as goodwill. Management uses significant estimates and assumptions to value such items, including projected cash flows, repayment rates, default rates and losses assuming default, discount rates, and realizable collateral values. The ACL for PCD loans is recognized within acquisition accounting. The ACL for non-PCD assets is recognized as provision for credit losses in the same reporting period as the acquisition. Fair value adjustments are amortized or accreted into the statement of operations over the estimated life of the acquired assets or assumed liabilities. The purchase date valuations and any subsequent adjustments determine the amount of goodwill recognized in connection with the acquisition. The use of different assumptions could produce significantly different valuation results, which could have material positive or negative effects on our results of operations.
Current report
The determination of fair values is based on valuations using management’s assumptions of future growth rates, future attrition, discount rates, multiples of earnings or other relevant factors. In addition, the Company engages third-party specialists to assist in the development of fair values. Preliminary estimates of fair values may be adjusted for a period of time subsequent to the effective time of the acquisition if new information is obtained about facts and circumstances that existed as of the effective time of the acquisition that, if known, would have affected the measurement of the amounts recognized as of that date. Adjustments recorded during this period are recognized in the current reporting period. Management uses various valuation methodologies to estimate the fair value of these assets and liabilities and often involves a significant degree of judgment, particularly when liquid markets do not exist for the particular item being valued. Examples of such items include loans, deposits, identifiable intangible assets, and certain other assets and liabilities.
Current report
Changes in these factors, as well as downturns in economic or business conditions, could have a significant adverse impact on the carrying value of assets, including goodwill and liabilities, which could result in impairment losses affecting our financial statements as a whole and our banking subsidiary in which the goodwill is recorded.
Current report
For the year ended December 31, 2025, the Company had net income of $550 million, compared to net income of $534 million for the same period in the prior year. The increase in net income was mainly attributable to increases in net interest income and non-interest income, partially offset by increases in non-interest expense and provision for credit losses. Net interest income increased $285 million primarily due to a larger average balance sheet for the year compared to the prior year, primarily due to the Pacific Premier acquisition and lower rates on interest-bearing liabilities, partially offset by lower average yields on interest-earning assets. Non-interest income increased $87 million, reflecting four months of combined operations following the acquisition. Non-interest expense increased $319 million primarily due to increases in merger and restructuring expenses, salaries and employee benefits, and occupancy and equipment, net, each of which was associated with the Pacific Premier acquisition, as well as a $55 million accrual for a legal settlement. The increase of $44 million in provision for credit losses 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.
Current report
On August 31, 2025, Columbia completed its acquisition of Pacific Premier. Systems conversion and branch consolidations are on track to be completed during the first quarter of 2026. The Company expects to realize all related cost savings by June 30, 2026 and expects to stay within the original expected merger-related expense amount of $185 million for this acquisition.
Current report
Net interest income for 2025 was $2.0 billion, an increase of $285 million, or 17%, compared to 2024. The increase was driven by a $161 million increase in interest income, largely reflective of the impact of four months as a combined company in the current period, as well as a $124 million decrease in interest expense mainly due to lower interest rates driven by the 75 basis point reduction in the federal funds rate in 2025, as well as a favorable shift in Columbia's funding mix during the year.
Current report
The Federal Reserve lowered the target for the federal funds rate by 0.25% in September, October, and December 2025, respectively, resulting in a decrease of 0.75% as compared to December 31, 2024. The 2025 reductions to the targeted federal funds rate followed decreases of 1.00% in the last quarter of 2024. Columbia's balance sheet remained in a slightly liability-sensitive position as of December 31, 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 brokered deposits and FHLB advances.
Current report
Service charges on deposits and financial services and trust revenue increased in 2025 compared to 2024. The increases reflect four months of combined operations following the acquisition of Pacific Premier, which contributed to higher transaction volumes and an expanded client base. In addition, the Pacific Premier acquisition significantly expanded the Company's wealth management platform with the addition of Pacific Premier's custodial trust business, which contributed to the 75% increase in financial services and trust revenue in 2025 compared to 2024.
Current report
Gain (loss) on certain loans held for investment, at fair value, for 2025, compared to 2024, increased due to interest rate fluctuations between periods that resulted in a gain of $11 million in the current year, as compared to a loss of $10 million in the prior year.
Current report
Other income in 2025 compared to 2024 increased primarily due to a favorable change related to swap customer fee revenue and related income, resulting in a favorable change of $12 million combined.
Current report
Salaries and employee benefits increased in 2025 compared to 2024 primarily due to the acquisition of Pacific Premier and the associates that joined Columbia as a result. The year‑over‑year increase is consistent with our expectations and reflects the four-month impact of our larger associate base.
Current report
Occupancy and equipment, net increased in 2025 compared to 2024 primarily due to an increase in branch locations and software costs related to the acquisition of Pacific Premier. We remain on track to complete the systems conversion and branch consolidations related to the acquisition during the first quarter of 2026, and we expect to realize all related cost savings by June 2026.
Current report
Deposit costs increased in 2025 compared to 2024 primarily due to the acquisition of Pacific Premier, which expanded the Company's HOA banking business. Our HOA banking business contributes relatively low-cost deposits to our funding base and provides other business-generating opportunities. 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 in 2026, as 2025 reflects only four months with the expanded business. HOA-related costs are expected to be $10 million per quarter.
Current report
FDIC assessments decreased in 2025 compared to 2024, primarily due to a $6 million reversal of prior FDIC special assessment expense accrual during the current period, compared to $6 million in additional FDIC special assessment expense accrual in 2024. The reversal reflects updated expectations of lower future payments under the FDIC’s special deposit insurance assessment. Excluding these special‑assessment impacts, deposit insurance expense remained relatively consistent between periods.
Current report
Merger and restructuring expense increased in 2025 compared to 2024, primarily due to costs associated with the acquisition of Pacific Premier. These expenses include severance and retention payments, professional service fees, systems conversion and integration activities, contract termination costs, facility consolidation, and other one‑time charges necessary to combine operations and align the merged organization. Refer to Note 2 –Business Combinationsfor the breakout of acquisition expenses.
Current report
Legal settlement increased in 2025 compared to 2024, due to the $55 million class action settlement finalized and funded in 2025.
Current report
Cash and cash equivalents were $2.4 billion as of December 31, 2025, compared to $1.9 billion as of December 31, 2024. The increase was driven by the interest-bearing cash acquired through the Pacific Premier acquisition. The Company manages its cash position within the broader liquidity framework designed to maintain a high‑quality liquid asset base, support balance sheet flexibility, fund growth across lending and investment activities, and reduce debt and other non‑deposit liabilities when market conditions are favorable.
Current report
Investment debt securities available for sale were $11.1 billion as of December 31, 2025, compared to $8.3 billion as of December 31, 2024. The increase was primarily attributable to $2.8 billion in securities acquired in the Pacific Premier acquisition, purchases of $2.4 billion in securities, and an increase of $319 million in fair value due to lower rates during the period. These increases were partially offset by $2.8 billion in proceeds, which included $1.8 billion of securities acquired as part of the Pacific Premier acquisition.
Current report
Total loans and leases outstanding as of December 31, 2025 were $47.8 billion, an increase of $10.1 billion 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 below-market-rate transactional loans, and the transfer of $295 million in residential mortgage loans held for sale. The loan to deposit ratio was 88% at December 31, 2025, compared to 90% at December 31, 2024.
Current report
As of December 31, 2025, residential real estate loans held in our loan portfolio were $7.8 billion, a decrease of $192 million as compared to December 31, 2024. The decrease was primarily attributable to the transfer of $295 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.
Current report
The ACL represents management's best estimate of lifetime credit losses for loans and leases and unfunded commitments. The ACL totaled $485 million as of December 31, 2025, an increase of $44 million from the $441 million as of December 31, 2024. The increase in the ACL during 2025 compared to 2024 reflects the addition of the Pacific Premier loan portfolio, which contributed to a $10.1 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.
Current report
Total deposits were $54.2 billion as of December 31, 2025, an increase of $12.5 billion, or 30%, compared to December 31, 2024. The increase was primarily driven by the acquisition of Pacific Premier, as well as organic growth in customer deposits. The increase was partially offset by a decrease in brokered deposits, reflecting a strategic shift to utilize additional FHLB advances due to their more favorable interest rates as compared to brokered deposits, aligning with the Company's broader funding strategy.
Current report
(1)Represents estimated uninsured deposits as calculated based on the methodologies and assumptions used for the Bank's Call Report, which is prepared on an unconsolidated bank basis.
Current report
The Bank regularly conducts liquidity stress testing to assess its ability to withstand adverse market conditions and unexpected funding needs. These stress tests evaluate the impact of various scenarios, including rapid deposit outflows, changes in collateral requirements for public deposits, and limited access to wholesale funding markets. Management uses the results to inform contingency planning, ensuring that sufficient liquidity is maintained to meet obligations under both normal and stressed conditions. The Bank’s diversified funding sources and substantial available liquidity provide resilience against potential disruptions. The Company also maintains a liquidity buffer and identified contingent sources to meet obligations independent of bank dividends under adverse scenarios.
Current report
Looking ahead, management expects the Bank's and the Company's liquidity positions to remain satisfactory during 2026, deposit balances may fluctuate due to pricing pressure or customers' behavior in the current economic environment. To support liquidity, the Bank may adjust deposit pricing, which could increase interest expense, or utilize more costly borrowings and other funding sources. The Bank will continue to monitor liquidity closely, conduct regular stress testing, and maintain contingency plans to address potential risks, including regulatory changes and market volatility.
Current report
(1) Periods prior to February 28, 2023 were restated in 2023 as a result of the adjustment to common shares outstanding based on the exchange ratio from the Company's merger with UHC of 0.5958.
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Removed paragraphs (37)
Previous report
•Earnings per diluted common share were $2.55 for the year ended December 31, 2024, compared to $1.78 for the year ended December 31, 2023. The increase for the year ended December 31, 2024, as compared to the prior year, was primarily driven by a decrease in non-interest expense due to lower expenses related to the Merger, as the majority were recognized in 2023. In addition, provision for credit losses decreased, primarily due to the initial provision for historical Columbia non-PCD loans that was recorded in the first quarter of 2023, as well as credit migration trends, charge-off activity, changes in the economic forecasts used in credit models, and a recalibration of the commercial CECL model in the first quarter of 2024. These favorable changes were partially offset by a decrease in net interest income.
Previous report
•Net interest income was $1.7 billion for the year ended December 31, 2024, as compared to $1.8 billion for the year ended December 31, 2023. The decrease was primarily driven by higher rates on interest-bearing liabilities and a shift in the funding mix into higher-cost sources, partially offset by higher average yields on interest-earning assets and higher average balances.
Previous report
•Net interest margin, on a tax equivalent basis, was 3.57% for the year ended December 31, 2024, compared to 3.91% for the year ended December 31, 2023. The decrease is primarily due to higher funding costs that reflect deposit repricing and a shift in product mix. This was partially offset by an increase in interest-earning asset yields given interest rate movements, with the most impactful average rate increase in the loan and leases category.
Previous report
•Non-interest income was $211.0 million for the year ended December 31, 2024, compared to $203.9 million for the year ended December 31, 2023. The increase was partially due to a favorable change in the net fair value loss of the MSR asset as a result of a $15.9 million loss for the year ended December 31, 2024, compared to a net fair value loss of $28.5 million for the prior year. In addition, there were increases in many other non-interest income categories, largely due to the impact of a full year as a combined company compared to only ten months as a combined company for the prior year, as well as increasing fee-generating product traction with our customer base as we execute our Business Bank of Choice operating strategy. These favorable changes were partially offset by a decrease in other income of $8.0 million, largely driven by interest rate fluctuations impacting the fair value of certain loans held for investment, partially offset by the impact of rate fluctuations on swap derivatives.
Previous report
•Non-interest expense was $1.1 billion for the year ended December 31, 2024, compared to $1.3 billion for the year ended December 31, 2023. This reflects a decrease in merger and restructuring expenses of $147.9 million and decreases in FDIC assessments, which was impacted by the $32.9 million special assessment expense that was incurred in 2023. Salaries and employee benefits also decreased, largely due a reduction in employees as a result of Merger synergies realized in 2023 and operational efficiency activities in 2024.
Previous report
•Total loans and leases were $37.7 billion as of December 31, 2024, an increase of $239.0 million, or 0.6%, compared to December 31, 2023. The increase in total loans and leases was primarily due to increases in the commercial and commercial real estate loan balances, partially offset by a decrease in residential balances. The increase was driven by commercial line utilization and new originations, partially offset by charge-offs and loan payoffs. Balances were also impacted by a decline in transactional multifamily and residential loans, which trended lower as we organically remix the portfolio into relationship-driven commercial loans.
Previous report
•Total deposits were $41.7 billion as of December 31, 2024, an increase of $113.7 million, or 0.3%, from December 31, 2023. The increase was primarily due to an increase in customer deposits with the largest change being in the commercial customer balances, reflective of our Business Bank of Choice operating strategy. This was partially offset by a decrease in brokered deposits. The interest-bearing deposit mix increased mainly due to a migration from non-interest-bearing to interest-bearing accounts as customers seek higher rates in the current interest rate environment.
Previous report
•Total consolidated assets were $51.6 billion as of December 31, 2024, compared to $52.2 billion as of December 31, 2023. The reduction is primarily due to decline in investment debt securities, driven by paydowns, calls, maturities, and a reduction in fair value given interest rate changes during the year. Additionally, there was a decrease in cash and cash equivalents, reflecting the deleveraging of wholesale borrowings. These reductions were partially offset by an increase in loans and leases, primarily driven by organic loan growth.
Previous report
•The ACL was $440.8 million, or 1.17% of loans and leases, as of December 31, 2024, a decrease of $23.3 million, as compared to $464.1 million, or 1.24% of loans and leases, as of December 31, 2023. The change in the ACL was due to changes in the economic assumptions used in credit models, credit migration trends, and a recalibration of the commercial CECL model in the first quarter of 2024.
Previous report
California Wildfires
Previous report
•Southern California has experienced unprecedented wildfires in recent years, which have impacted the Bank's customers and associates. While some of our businesses and associates have been directly affected by the damage, the response from our teams across the organization has been truly inspiring. As a company, we have established grant programs to support communities in the wake of disasters like wildfires. We actively collaborate with community organizations to aid in recovery efforts as they unfold. Our commitment to our communities, customers, and associates is unwavering, and we are dedicated to supporting, rebuilding, and restoring the communities affected by these devastating fires.
Previous report
Goodwill
Previous report
Goodwill is tested for impairment at the reporting unit level on an annual basis as of October 31 each year, and more frequently if events or circumstances indicate that there may be impairment. Goodwill impairment is determined by comparing the fair value of a reporting unit to its carrying amount. If the fair value of the reporting unit is less than its carrying value, the difference is the amount of impairment and goodwill is written down to the fair value of the reporting unit. The Company has a single reporting unit.
Previous report
In testing goodwill, the Company may assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. In this qualitative assessment, the Company evaluates events and circumstances which may include, but are not limited to: the general economic environment; banking industry and market conditions; a significant adverse change in legal factors; significant decline in our stock price and market capitalization; unanticipated competition; the testing for recoverability of a significant asset group within the reporting unit; and an adverse action or assessment by a regulator.
Previous report
If the quantitative impairment test is required or the decision to bypass the qualitative assessment is elected, the Company performs the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The determination of the fair value of a reporting unit is a subjective process that involves the use of estimates and judgments about economic and industry factors and the growth and earnings prospects of the Bank. Variability in the market and changes in assumptions or subjective measurements used to estimate fair value are reasonably possible and may have a material impact on our consolidated financial statements or results of operations.
Previous report
Based on the results of the annual goodwill impairment test, it was determined that no goodwill impairment charges were required as our single reporting unit’s fair value exceeded its carrying amount. The determination of the fair value is a subjective process that involves the use of estimates and judgments, particularly related to the appropriate discount rates and an applicable control premium. The Company determined the fair value utilizing average acquisition multiples as well as calculating its market capitalization based on the closing price of the Company’s stock at the measurement date, incorporating an additional control premium, and comparing this market-based fair value measurement to the aggregate fair value of the Company. The percentage at which the fair value exceeded the carrying value is approximately 25%. As of October 31, 2024, a decrease in market multiples and utilizing an average stock price for market capitalization would reduce estimated entity fair value by approximately $1 million and would not result in any impairment. As of December 31, 2024, we determined there were no events or circumstances which would more likely than not reduce the fair value of our reporting unit below its carrying amount.
Previous report
For the year ended December 31, 2024, the Company had net income of $533.7 million, compared to net income of $348.7 million for the same period in the prior year. The increase in net income was mainly attributable to decreases in non-interest expense and provision for credit losses, partially offset by a decrease in net interest income. The $208.0 million decrease in non-interest expense was primarily due to a decrease in merger and restructuring expenses, as the majority of the merger expenses associated with the Merger were recognized in 2023. The decrease of $107.3 million in provision for credit losses was impacted by the initial provision of $88.4 million for historical Columbia non-PCD loans that was recorded in the first quarter of 2023, in addition to credit migration trends, charge-off activity, changes in the economic forecasts used in credit models, and the recalibration of the commercial CECL model in the first quarter of 2024. The decrease of $74.8 million in net interest income was due to higher rates on interest-bearing liabilities and a shift in the funding mix into higher-cost sources, partially offset by higher average yields on interest-earning assets and a larger average balance sheet for the year ended December 31, 2024. The Company paid down term debt and reduced brokered deposit balances during the year to continue to rebalance our funding sources in support of our liquidity management program and lower the cost of liabilities.
Previous report
During the first quarter of 2024, the Company conducted an enterprise-wide evaluation of our operations, which resulted in consolidated positions and simplified reporting and organizational structures. As of December 31, 2024, the Company incurred $12.9 million in restructuring expenses, but achieved $82 million in annualized cost savings, or $70 million net of planned reinvestment associated with recent operational initiatives. The Company will continue to invest in customer-focused technology, experienced bankers, and strategic locations going forward. There are five branches slated to open in 2025, as well as technological enhancements that are targeted to create additional operational efficiencies and bring additional revenue opportunities to the Company in the future.
Previous report
Net interest income for 2024 was $1.7 billion, a decrease of $74.8 million, or 4%, compared to the same period in 2023. The decrease was due to higher rates on interest-bearing liabilities and a shift in the funding mix into higher-cost sources, partially offset by higher average yields on interest-earning assets and a larger average balance sheet for the year ended December 31, 2024 compared to the prior year, as a result of the Merger.
Previous report
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. During the January 2025 meeting, the Federal Reserve maintained the target rate at 4.25%-4.50%. Between March 2022 and July 2023, the Federal Reserve raised the target range for the federal funds rate by 5.25%. During that period, our net interest margin expanded as our balance sheet became increasingly profitable due to active rate increases by the Federal Reserve and the lagged impact to deposit pricing compared to earning asset repricing. After the Federal Reserve ceased increasing the federal funds rate, we experienced an increase in our funding costs that outpaced the increase in our earning asset yields, as our deposits continued to reprice higher and our funding base experienced a shift toward higher-cost sources as Federal Reserve actions reduced available liquidity within the banking industry. As a result, our net interest margin contracted during the latter half of 2023 due to the impact of higher funding costs and minimal change to the average yield on earning assets. Our net interest margin began to stabilize in the 3.5% to 3.6% range beginning in February 2024, following a comprehensive review related to how we evaluate and approve deposit pricing. Further, the impact of balance sheet composition changes and the higher interest rate environment shifted the interest rate sensitivity position of the balance sheet to a liability sensitive position as of December 31, 2024 from an asset sensitive position at the onset of the rising rate environment.
Previous report
Service charges on deposits, card-based fees, and financial services and trust revenue increased in 2024 compared to 2023. The increases reflect the impact of a full year as a combined company compared to only ten months as a combined company for the prior year period, as well as increasing fee-generating product traction with our customer base as we execute our Business Bank of Choice operating strategy. We continue to focus on generating sustainable core fee income with new and existing customers.
Previous report
(Loss) gain on loan and lease sales, net had an unfavorable change in 2024 compared to 2023, largely driven by lower volume of SBA loan sales combined with strategic sales of existing loans that had greater potential for charge-offs in the future.
Previous report
Other income in 2024 compared to 2023 decreased primarily due to an unfavorable change of $13.1 million in the fair value of certain loans held for investment, as the impact of interest rate fluctuations resulted in a loss of $10.5 million in the current year as compared to a gain of $2.6 million in the prior year. The decrease was partially offset by the impact of rate fluctuations on swap derivatives with a gain in the current year compared to a loss in the prior year, resulting in a favorable change of $6.3 million.
Previous report
Salaries and employee benefits decreased in 2024 compared to 2023 due primarily to a reduction in employees related to the merger synergies realized in 2023 and the additional operational efficiency activities in 2024, partially offset by the current year including a full year as a combined company, compared to only ten months during the year ended December 31, 2023.
Previous report
FDIC assessments decreased in 2024 compared to 2023 due to the prior period including $32.9 million in expense related to the FDIC special assessment to replenish the DIF following bank closures in March 2023, whereas the current period includes $5.7 million in FDIC special assessment expense.
Previous report
Merger and restructuring expense decreased in 2024 compared to 2023, with the largest drivers of the decrease being lower legal and professional fees and premises and equipment expense related to the Merger. Columbia closed the Merger and completed the core systems conversion during the first quarter of 2023. The decrease in Merger expenses was partially offset by $12.9 million in restructuring expenses during the year ended December 31, 2024.
Previous report
Cash and cash equivalents were $1.9 billion as of December 31, 2024, compared to $2.2 billion at December 31, 2023. Excess cash was used to pay down borrowings, as well as to fund loan portfolio growth of $239.0 million.
Previous report
Investment debt securities available for sale were $8.3 billion as of December 31, 2024, compared to $8.8 billion as of December 31, 2023. The decrease was primarily due to paydowns, calls, and maturities of $552.4 million and a decrease of $150.8 million in fair value of investment securities available for sale, due to changes in market interest rates during the period, partially offset by net accretion and purchases, which have been focused on CRA qualifying investments.
Previous report
Total loans and leases outstanding as of December 31, 2024 were $37.7 billion, an increase of $239.0 million compared to December 31, 2023. The increase was primarily attributable to organic loan growth of $538.6 million, partially offset by charge-offs of $151.2 million and loan sales of $148.5 million. The loan to deposit ratio as of both December 31, 2024 and 2023 was 90%.
Previous report
As of December 31, 2024, residential real estate loans held in our loan portfolio were $8.0 billion, a decrease of $130.3 million as compared to December 31, 2023. 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.
Previous report
The ACL represents management's best estimate of lifetime credit losses for loans and leases and unfunded commitments. The ACL totaled $440.8 million as of December 31, 2024, a decrease of $23.3 million from the $464.1 million as of December 31, 2023. The changes in the ACL estimate during the year ended December 31, 2024 reflect credit migration trends, changes in the economic assumptions used in the credit models, and the recalibration of the commercial CECL model during the first quarter of 2024.
Previous report
(1) For the year ended December 31, 2023, the provision for credit losses on loans and leases includes $88.4 million initial provision related to non-PCD loans acquired during the period.
Previous report
In September 2023, the Company closed the sale of $57.3 million in mortgage servicing rights, which related to the non-relationship component of the serviced loan portfolio.
Previous report
Total deposits were $41.7 billion as of December 31, 2024, an increase of $113.7 million, or 0.3%, compared to December 31, 2023. The increase was due to an increase in customer deposits with the largest change being in the commercial customer balances, reflective of our Business Bank of Choice strategy, partially offset by a decrease in brokered deposits. The interest-bearing deposit mix increased mainly due to a migration from non-interest-bearing to interest-bearing accounts as customers seek higher rates in the current interest rate environment.
Previous report
The FDIC generally provides a standard amount of insurance of $250,000 per depositor for each account ownership category defined by the FDIC. Depositors may qualify for coverage of accounts over $250,000 if they have funds in different ownership categories and all FDIC requirements are met. All deposits that an account owner has in the same ownership category at the same bank are added together and insured up to the standard insurance amount. As of December 31, 2024 and December 31, 2023, $27.7 billion, or 66%, and $28.1 billion, or 68%, respectively, of the Bank’s deposits were estimated to be insured. Uninsured deposits as of December 31, 2024, totaled $14.0 billion, as compared to $13.5 billion as of December 31, 2023. Uninsured deposits are an estimated amount based on the methodologies and assumptions used for the Bank's regulatory requirements. As of December 31, 2024, total available liquidity was $18.0 billion, or 128% of estimated uninsured deposits.
Previous report
Although we expect the Bank's and the Company's liquidity positions to remain satisfactory during 2025, it is possible that our deposit balances may not be maintained at previous levels due to pricing pressure or customers' behavior in the current economic environment. In addition, in order to generate deposit growth, our pricing may need to be adjusted in a manner that results in increased interest expense on deposits. We may utilize borrowings or other funding sources, which are generally more costly than deposit funding, to support our liquidity levels.
Previous report
Along with enactment of the CARES Act, the federal bank regulatory authorities issued an interim final rule to provide banking organizations that are required to implement CECL before the end of 2020 the option to delay the estimated impact on regulatory capital by up to two years, with a three-year transition period to phase out the cumulative benefit to regulatory capital provided during the two-year delay. The Company elected this capital relief and delayed the estimated regulatory capital impact of adopting CECL, relative to the incurred loss methodology's effect on regulatory capital.
Reworded paragraphs (62)
Previous wording
•Non-performing assets increased to $169.6 million, or 0.33% of total assets, as of December 31, 2024, compared to $113.9 million, or 0.22% of total assets, as of December 31, 2023. Non-performing loans were $166.9 million, or 0.44% of total loans and leases, as of December 31, 2024, compared to $112.9 million, or 0.30% of total loans and leases, as of December 31, 2023. As of December 31, 2024, non-performing loans included $73.6 million in government guarantees. The rise in non-performing assets was mainly due to migration in our SBA portfolio, an owner-occupied commercial real estate property, and the end of certain COVID-related designations in the residential mortgage portfolio.
Current wording
•Non-performing assets were $200 million, or 0.30% of total assets, as of December 31, 2025, compared to $170 million, or 0.33% of total assets, as of December 31, 2024. Non-performing loans were $198 million, or 0.41% of total loans and leases, as of December 31, 2025, compared to $167 million, or 0.44% of total loans and leases, as of December 31, 2024. As of December 31, 2025, non-performing loans included $79 million in government guarantees. The increases in non-performing assets and loans primarily reflect assets acquired through the Pacific Premier acquisition.
Previous wording
•The Company had a provision for credit losses of $105.9 million for the year ended December 31, 2024, compared to a provision for credit losses of $213.2 million in the prior year. The decrease in provision expense for the year ended December 31, 2024 as compared to the prior year was due to the prior year including an $88.4 million initial provision for historical Columbia non-PCD loans related to the Merger. This initial provision, as well as changes in the economic assumptions used in credit models and a recalibration of the commercial CECL model in the first quarter of 2024, contributed to the change when compared to the same period in the current year. As a percentage of average outstanding loans and leases, the provision for credit losses for the year ended December 31, 2024 was 0.28%, as compared to 0.60% for the prior year.
Current wording
•Provision for credit losses was $150 million for the year ended December 31, 2025, compared to a provision for credit losses of $106 million in the prior year. The increase in the provision includes an initial provision of $70 million for acquired non-PCD loans and unfunded commitments, and changes in economic forecasts used in the ACL methodology. As a percentage of average outstanding loans and leases, the provision for credit losses for the year ended December 31, 2025 was 0.36%, as compared to 0.28% for the prior year.
Previous wording
•Total cash and cash equivalents were $1.9 billion as of December 31, 2024, a decrease of $284.3 million from December 31, 2023. 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 $2.4 billion as of December 31, 2025, an increase of $502 million from December 31, 2024. The increase was primarily driven by the acquisition of Pacific Premier, which contributed $874 million in cash. 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-relationship deposit liabilities as economic conditions permit.
Previous wording
•Including secured off-balance sheet lines of credit, total available liquidity was $18.0 billion as of December 31, 2024, representing 35% of total assets, 43% of total deposits, and 128% of estimated uninsured deposits.
Current wording
•Including secured off-balance sheet lines of credit, total available liquidity was $27.9 billion as of December 31, 2025, representing 42% of total assets, 51% of total deposits, and 141% of uninsured deposits.
Previous wording
•The Company's total risk-based capital ratio was 12.8% and its CET1 risk-based capital ratio was 10.5% as of December 31, 2024, as compared to 11.9% and 9.6%, respectively, as of December 31, 2023.
Current wording
•The Company's total risk-based capital ratio was 13.6% and its CET1 risk-based capital ratio was 11.8% as of December 31, 2025, as compared to 12.8% and 10.5%, respectively, as of December 31, 2024. In November 2025, the Company increased its quarterly dividend to $0.37 per common share, compared to $0.36 per common share previously.
Previous wording
•The Company paid cash dividends of $1.44 per common share during the year ended December 31, 2024.
Current wording
•The Company paid cash dividends of $1.45 per common share during the year ended December 31, 2025, as compared to $1.44 in 2024.
Previous wording
Management believes the ACL and goodwill estimates are important to the portrayal of the Company's financial condition and results of operations and requires difficult, subjective, or complex judgments and, therefore, management considers them to be critical accounting estimates.
Current wording
Management believes the ACL and business combination estimates are important to the portrayal of the Company's financial condition and results of operations and requires difficult, subjective, or complex judgments and, therefore, management considers them to be critical accounting estimates.
Previous wording
The ACL represents management's best estimate of lifetime credit losses for loans and leases and unfunded commitments. The ACL was $440.8 million at December 31, 2024 and $464.1 million at December 31, 2023.
Current wording
The ACL represents management's best estimate of lifetime credit losses for loans and leases and unfunded commitments. The ACL was $485 million at December 31, 2025 and $441 million at December 31, 2024.
Previous wording
This scenario would result in a quantitative lifetime loss estimate approximately 1.2 times our modeled period-end ACL, an increase of approximately $87 million, without qualitative adjustments. This analysis pertains solely to the modeled credit loss estimate and does not encompass the overall period-end ACL, which incorporates qualitative adjustments.
Current wording
This scenario would result in a quantitative lifetime loss estimate approximately 1.4 times our modeled period-end ACL, an increase of approximately $147 million, without qualitative adjustments. This analysis pertains solely to the modeled credit loss estimate and does not encompass the overall period-end ACL, which incorporates qualitative adjustments.
Previous wording
Columbia's financial results for any periods ended prior to February 28, 2023, the Merger Date, reflect UHC results only on a standalone basis. Accordingly, Columbia's reported financial results for the first quarter of 2023 reflect only UHC financial results through the closing of the Merger. As a result of these two factors, Columbia's financial results for the year ended December 31, 2023, may not be directly comparable to prior or future reported periods.
Current wording
Columbia's financial results for any periods ended prior to August 31, 2025, the acquisition date for Pacific Premier, reflect Columbia's results only on a standalone basis. Accordingly, Columbia's reported financial results for the first eight months of 2025 reflect only Columbia's financial results through the closing of the acquisition. In addition, Columbia’s financial results for any periods ended prior to February 28, 2023, the closing date of the Company’s merger with UHC, reflect UHC’s results only on a standalone basis. Accordingly, Columbia’s reported financial results for the first two months of 2023 reflect only UHC’s financial results through the closing of the Company’s merger with UHC. As a result of these factors, Columbia's financial results for the years ended December 31, 2025 and December 31, 2023, may not be directly comparable to prior or future reported periods.
Previous wording
The net interest margin (net interest income as a percentage of average interest-earning assets) on a fully tax equivalent basis was 3.57% for 2024, as compared to 3.91% for 2023, a decrease of 34 basis points. This decrease for the year ended December 31, 2024 compared to the prior year was due to higher funding costs that reflect deposit repricing and a shift in product mix.
Current wording
The net interest margin (net interest income as a percentage of average interest-earning assets) on a fully tax equivalent basis was 3.83% for 2025, as compared to 3.57% for 2024, an increase of 26 basis points. The increase for the year ended December 31, 2025 compared to the prior year was due to a reduction in the cost of interest-bearing liabilities, partially offset by lower yields on average loans and leases and cash. 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.
Previous wording
The yield on loans and leases for 2024 and 2023 was 6.15% and 5.95%, respectively, an increase of 20 basis points, primarily attributable to the higher interest rate environment during most of 2024. The cost of interest-bearing liabilities was 3.21% for the year ended December 31, 2024, compared to 2.56% for the year ended December 31, 2023. This increase of 65 basis points reflects a mix of higher-cost interest-bearing demand, money market, and time deposits and higher interest rates not offset by a reduction in borrowing and borrowing rates. Our net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, as well as changes in the yields earned on interest-earning assets and rates paid on deposits and borrowed funds.
Current wording
The average yields on loans and leases for 2025 and 2024 were 5.95% and 6.15%, respectively, a decrease of 20 basis points, primarily attributable to the lower interest rate environment during most of 2025, partially offset by the increase in average loans and leases related to the Pacific Premier acquisition as these balances were recorded at fair value as of August 31, 2025. The cost of interest-bearing liabilities was 2.61% for the year ended December 31, 2025, compared to 3.21% for the year ended December 31, 2024. The 60-basis point decrease was due primarily to reductions in the federal funds rate as compared to the prior period and a favorable shift in Columbia's funding mix. Our net interest income is affected by changes in the amount and mix of interest-earning assets and interest-bearing liabilities, as well as changes in the yields earned on interest-earning assets and rates paid on deposits and borrowed funds.
Previous wording
(2)Tax-exempt income was adjusted to a tax equivalent basis at a 21% tax rate. The amount of such adjustment was an addition to recorded income of approximately $4.0 million, $4.1 million, and $1.3 million for the years ended December 31, 2024, 2023, and 2022, respectively.
Current wording
(2)Tax-exempt income was adjusted to a tax equivalent basis at a 21% tax rate. The amount of such adjustment was an addition to recorded income of approximately $6 million, $4 million, and $4 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Previous wording
The Company had a $105.9 million provision for credit losses for 2024, as compared to a $213.2 million provision for credit losses for 2023. The change was primarily driven by the $88.4 million initial provision for historical Columbia non-PCD loans that was recorded in the first quarter of 2023, in addition to credit migration trends, charge-off activity, and changes in the economic forecasts used in credit models. Additionally, during the first quarter of 2024, we recalibrated the commercial CECL model to be more reflective of the post-Merger loan portfolio after a full year operating as a combined organization. We believe the recalibrated model is more reflective of the quality of our underwriting and borrower profiles. As a percentage of average outstanding loans and leases, the provision for credit losses recorded for 2024 was 0.28%, as compared to 0.60% for the prior period.
Current wording
The Company had a $150 million provision for credit losses for 2025, as compared to a $106 million provision for credit losses for 2024. The increase was driven by the $70 million provision for credit losses attributed to the acquired non-PCD loans and unfunded commitments. The increase was offset by loan portfolio runoff, credit migration trends, charge-off activity, and changes in the economic forecasts used in credit models. As a percentage of average outstanding loans and leases, the provision for credit losses recorded for 2025 was 0.36%, as compared to 0.28% for the prior period.
Previous wording
Net charge-offs were $129.2 million for 2024, or 0.34% of average loans and leases, compared to net charge-offs of $96.7 million, or 0.27% of average loans and leases, for 2023. Net charge-offs in the FinPac portfolio were $87.6 million for the year ended December 31, 2024, as compared to $87.3 million for the year ended December 31, 2023. Net charge-offs for the Bank were $41.6 million and $9.4 million for the years ended December 31, 2024 and 2023, respectively. Net charge-offs for the Bank in 2024 reflect the transition to a more typical credit environment after a period of exceptional quality and a charge-off in the first quarter of 2024 centered in a single commercial credit.
Current wording
Net charge-offs were $111 million for 2025, or 0.27% of average loans and leases, compared to net charge-offs of $129 million, or 0.34% of average loans and leases, for 2024. Net charge-offs in the FinPac portfolio were $61 million for the year ended December 31, 2025, as compared to $88 million for the year ended December 31, 2024. Net charge-offs for the Bank were $50 million and $41 million for the years ended December 31, 2025 and 2024, respectively.
Previous wording
Typically, loans in 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 loss given default 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 $21.0 million as of December 31, 2024 have a related ACL of $18.3 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 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 loss given default 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 million as of December 31, 2025 have a related ACL of $17 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 in 2024 compared to 2023. The variance was due to a favorable change in the net fair value loss of the MSR asset as a result of a $15.9 million loss for the year ended December 31, 2024, compared to a net fair value loss of $28.5 million for the same period in 2023, which is inclusive of MSR hedge losses of $8.6 million for the current year compared to $4.7 million in the prior year. While there was an increase in the origination and sale of mortgages during 2024 when compared to 2023, it was more than offset by a decrease in servicing revenue. The decrease in servicing revenue was expected for 2024 due to a reduction in the serviced loan portfolio size as result of the September 2023 sale of approximately one-third of the MSR portfolio. This sale was the result of strategic actions taken by the Company to restructure its mortgage business given the lower mortgage origination volume in the higher rate environment and focus on relationship banking that drives balanced growth in loans, deposits, and core fee income. These changes were intended to reduce expenses, limit the impact of fair value changes to the statement of income, and moderate portfolio mortgage growth.
Current wording
Residential mortgage banking revenue increased in 2025 compared to 2024. The variance was due to a favorable shift in the hedged change in fair value of the MSR asset due to valuation inputs or assumptions, which drove a $7 million increase in residential mortgage banking revenue between periods. While there was an increase in the origination and sale of mortgages during 2025 when compared to 2024, it was partially offset by a decrease in servicing revenue, due to a decline in the balance of the residential serviced loan portfolio.
Previous wording
Our consolidated effective tax rate for 2024 was 25.7%, compared to 26.0% for 2023. The 2024 effective tax rate differed from the federal statutory rate of 21% principally because of state taxes, net tax-exempt income on investment securities, non-deductible FDIC assessments, and tax credits and benefits arising from low-income housing investments. Refer to Note 25 –Income Taxesin Item 8 of this Annual Report on Form 10-K for more information about the Company's taxes.
Current wording
Our consolidated effective tax rate for 2025 was 24.4%, compared to 25.7% for 2024. The 2025 effective tax rate differed from the federal statutory rate of 21% principally because of state taxes, net tax-exempt income on investment securities, non-deductible FDIC assessments, and tax credits and benefits arising from low-income housing investments. Refer to Note 25 –Income Taxes and Investment Tax Creditsin Item 8 of this Annual Report on Form 10-K for more information about the Company's taxes.
Previous wording
The composition of our investment securities portfolio reflects management's investment strategy of maintaining an appropriate level of liquidity while providing a relatively stable source of interest income. The investment securities portfolio provides a vehicle for the investment of available funds, a source of liquidity (by pledging as collateral or through repurchase agreements) and collateral for certain public funds deposits.
Current wording
The composition of our investment securities portfolio reflects management's investment strategy to maintain an appropriate level of liquidity while generating a relatively stable source of interest income. The investment securities portfolio serves as a vehicle for investing available funds, provides a source of liquidity (by pledging collateral or through repurchase agreements) and supplies collateral for certain public funds deposits.
Previous wording
Equity and other securities consist primarily of investments in fixed income mutual funds to support our CRA initiatives and securities invested in rabbi trusts for the benefit of certain current or former executives and employees as required by the underlying agreements. Equity and other securities were $78.1 million at December 31, 2024, compared to $77.0 million as of December 31, 2023.
Current wording
Equity and other securities consist primarily of investments in fixed income mutual funds to support our CRA initiatives and securities invested in rabbi trusts for the benefit of certain current or former executives and employees, as required by the underlying agreements. Equity and other securities were $113 million at December 31, 2025, compared to $78 million as of December 31, 2024. The increase is primarily driven by a $31 million increase in non-trading equity, of which $17 million resulted from equity investments acquired in the Pacific Premier acquisition, and by a $4 million increase in rabbi trust assets.
Previous wording
The mortgage-related securities in the table above include both pooled mortgage-backed issues and high-quality collateralized mortgage obligation structures, with an average duration of 5.1 years. These mortgage-related securities provide yield spread to U.S. Treasury or agency securities; however, the cash flows arising from them can be volatile due to refinancing of the underlying mortgage loans.
Current wording
The mortgage-related securities in the table above include both pooled mortgage-backed issues and high-quality collateralized mortgage obligation structures, with an average duration of 5.2 years. These securities generally provide a yield spread to U.S. Treasury or agency securities; however, the cash flows arising from them can be volatile due to refinance activity on the underlying mortgage loans.
Previous wording
We review investment securities on an ongoing basis for the presence of impairment, taking into consideration current market conditions, fair value in relationship to cost, extent and nature of the change in fair value, issuer rating changes and trends, whether we intend to sell a security or if it is more likely than not that we will be required to sell the security before recovery of our amortized cost basis of the investment, which may be maturity, and other factors.
Current wording
We evaluate our investment securities on an ongoing basis for potential impairment. This review considers current market conditions, fair value in relationship to cost, the magnitude and duration of unrealized losses, changes in issuer credit ratings or credit trends, and other relevant factors. We also assess whether we intend to sell a security or if it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis, which may be maturity.
Previous wording
As December 31, 2024, the available for sale investment portfolio had gross unrealized losses of $591.5 million. Unrealized losses included unrealized losses on mortgage-backed securities and collateralized mortgage obligations of $485.4 million. The unrealized losses were primarily 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 December 31, 2024.
Current wording
As December 31, 2025, the available for sale investment portfolio had gross unrealized losses of $380 million, including $327 million of unrealized losses on mortgage-backed securities and collateralized mortgage obligations. The unrealized losses were primarily attributable to changes in market interest rates or the widening of market spreads subsequent to the initial purchase of these securities, rather than deterioration in credit quality. In the opinion of management, no ACL was considered necessary on these debt securities as of December 31, 2025.
Previous wording
Restricted equity securities were $150.0 million and $179.3 million as of December 31, 2024 and 2023, respectively, the majority of which represents the Bank's investment in the FHLB. The decrease is attributable to redemptions of FHLB stock due to decreased FHLB borrowing activity during the period. FHLB stock is carried at par and does not have a readily determinable fair value. Ownership of FHLB stock is restricted to the FHLB and member institutions, and can only be purchased and redeemed at par. As of December 31, 2024, the Bank's minimum required investment in FHLB stock was $149.5 million.
Current wording
Restricted equity securities were $159 million and $150 million as of December 31, 2025 and 2024, respectively, the majority of which represents the Bank's investment in the FHLB. The increase reflects purchases of FHLB stock made to support higher levels of FHLB borrowing activity during the period. FHLB stock is carried at par and does not have a readily determinable fair value. Ownership of FHLB stock is restricted to the FHLB and member institutions, and shares may only be purchased or redeemed at par. As of December 31, 2025, the Bank's minimum required investment in FHLB stock was $154 million.
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 as of December 31, 2024 included $73.6 million in government guarantees on the commercial real estate, commercial, and residential portfolios, which offsets our credit exposure in those portfolios.
Current wording
CRE and commercial loans are the largest classifications within earning assets, representing 43% and 20%, respectively, of average earning assets for the year ended December 31, 2025, as compared to 41% and 20%, respectively, for the year ended December 31, 2024. 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. As of December 31, 2025, non-accrual loans in the CRE and commercial portfolios include $38 million in government guarantees, which offsets our credit exposure in those portfolios.
Previous wording
The commercial real estate portfolio includes loans to developers and institutional sponsors supporting income-producing or for-sale commercial real estate 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. Commercial real estate loans are underwritten after evaluating and understanding the borrower's ability to operate profitably and are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The properties securing the commercial real estate portfolio are diverse in terms of type and geographic location. This diversity helps reduce the exposure to adverse economic events that affect any single market or industry.
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. CRE loans are underwritten after evaluating and understanding the borrower's ability to operate profitably and are viewed primarily as cash flow loans and secondarily as loans secured by real estate. CRE lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. CRE loans may be more adversely affected by conditions in the real estate markets or in the general economy. The properties securing the CRE portfolio are diverse in terms of type and geographic location. This diversity helps reduce the exposure to adverse economic events that affect any single market or industry.
Previous wording
Management monitors and evaluates commercial real estate loans based on debt service coverage, collateral, and risk grade criteria. As a general rule, we avoid financing single-purpose projects unless other underwriting factors are present to help mitigate risk. Third-party experts are also utilized to provide insight and guidance about economic conditions and trends affecting market areas we serve. In addition, management tracks the level of owner-occupied commercial real estate 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. At December 31, 2024, approximately 26.9% of the outstanding principal balance of our commercial real estate loan portfolio were secured by owner-occupied properties.
Current wording
Management monitors and evaluates CRE loans based on debt service coverage, collateral, and risk grade criteria. As a general rule, we avoid financing single-purpose projects unless other underwriting factors are present to help mitigate risk. Third-party experts are also utilized to provide insight and guidance about economic conditions and trends affecting market areas we serve. 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. At December 31, 2025, approximately 26% of the outstanding principal balance of our CRE loan portfolio, secured by owner-occupied properties.
Previous wording
As of December 31, 2024, the commercial real estate loan portfolio was $19.6 billion, an increase of $113.2 million compared to December 31, 2023, driven by construction and development loan and line utilization, offset by loan payoffs. Commercial real estate 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 December 31, 2025, the CRE loan portfolio was $27.9 billion, an increase of $8.3 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
The following table provides detail on commercial real estate loans by property type:
Current wording
The following table provides detail on CRE loans by property type:
Previous wording
(1)Commercial real estate non-accrual loans are inclusive of government guarantees of $16.3 million and $7.7 million as of December 31, 2024 and 2023, respectively.
Current wording
(1)CRE non-accrual loans are inclusive of government guarantees of $21 million and $16 million as of December 31, 2025 and 2024, respectively.
Previous wording
The following table provides detail on the geographic distribution of our commercial real estate portfolio as of the periods indicated:
Current wording
The following table provides detail on the geographic distribution of our CRE portfolio as of the periods indicated:
Previous wording
Loans secured by multifamily properties, including construction, represented 19% of the total loan portfolio at both December 31, 2024 and 2023. These assets continue to perform well due to demand for rental properties in our geographical 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 December 31, 2025 and 2024, respectively. These assets continue to perform well due to demand for rental properties in our geographical 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 December 31, 2024 and December 31, 2023, and were comprised of 57% non-owner occupied, 40% owner occupied, and 3% construction loans at December 31, 2024, compared to 57% non-owner occupied, 39% owner occupied, and 4% construction loans at December 31, 2023. Excluding floating rate loans, which have already repriced to prevailing rates, only 5% of our office portfolio reprices through 2025.
Current wording
Loans secured by office properties, which are predominantly located in suburban markets, represented approximately 8% of our total loan portfolio at both December 31, 2025 and 2024, and were comprised of 53% non-owner occupied, 45% owner occupied, and 2% construction loans at December 31, 2025, compared to 57% non-owner occupied, 40% owner occupied, and 3% construction loans at December 31, 2024.
Previous wording
The following table provides detail on the geographic distribution of our commercial real estate portfolio secured by office properties:
Current wording
The following table provides detail on the geographic distribution of our CRE portfolio secured by office properties:
Previous wording
Commercial loans and leases are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans and leases are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. As of December 31, 2024, commercial loans held in our loan portfolio were $10.0 billion, an increase of $271.7 million compared to December 31, 2023, which is mainly attributable to relationship driven commercial loan growth and line utilization.
Current wording
Commercial loans and leases are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans and leases are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee; however, some short-term loans may be made on an unsecured basis. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. As of December 31, 2025, commercial loans held in our loan portfolio were $12.0 billion, an increase of $2.0 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
Lease and equipment financing products are designed to address the diverse financing needs of small to large companies, primarily for the acquisition of equipment. The leases and equipment finance portfolio represented 17% of the commercial portfolio and 4% of the total loan portfolio as of December 31, 2024, as compared to 18% of the commercial portfolio and 5% of the total loan portfolio as of December 31, 2023. The leasing portfolio has had non-performing leases and charge-offs centered in the trucking and transportation portion of the portfolio. Net charge-offs in the FinPac lease portfolio were $87.6 million for the year ended December 31, 2024, as compared to $87.3 million for the year ended December 31, 2023. Net charge-offs were up $27.6 million in the remaining commercial portfolio from the prior year, largely due to a charge-off on a single commercial credit in the first quarter as well as the transition to a more typical credit environment after a period of exceptional quality. Delinquencies and non-accrual loan movements in the transportation and trucking portion of the FinPac lease portfolio over the year were anticipated and a slow recovery is in process for this portfolio.
Current wording
Lease and equipment financing products are designed to address the diverse financing needs of small to large companies, primarily for the acquisition of equipment. The leases and equipment finance portfolio represented 13% and 17% of the commercial portfolio and 3% and 4% of the total loan portfolio as of December 31, 2025, and 2024, respectively. Net charge-offs in the FinPac lease portfolio were $61 million for the year ended December 31, 2025, as compared to $88 million for the year ended December 31, 2024. Net charge-offs were down approximately $1 million in the remaining commercial portfolio as compared to the prior year.
Previous wording
(1)Commercial non-accrual loans and leases are inclusive of government guarantees of $25.2 million and $11.7 million as of December 31, 2024 and 2023, respectively.
Current wording
(1)Commercial non-accrual loans and leases are inclusive of government guarantees of $17 million and $25 million as of December 31, 2025 and 2024, respectively.
Previous wording
Consumer loans, including secured and unsecured personal loans, home equity and personal lines of credit, and motor vehicle loans, decreased $15.6 million to $180.1 millionas of December 31, 2024, as compared to December 31, 2023. The decrease was due to normal business activity. Consumer loans are originated utilizing a credit scoring analysis to supplement the underwriting process. To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed, jointly by line and staff personnel. This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, minimizes risk. Additionally, trend and outlook reports are reviewed by management on a regular basis.
Current wording
Consumer loans, including secured and unsecured personal loans, home equity and personal lines of credit, and motor vehicle loans, decreased $2 million to $178 million as of December 31, 2025, as compared to December 31, 2024. The decrease was due to normal business activity. Consumer loans are originated utilizing a credit scoring analysis to supplement the underwriting process. To monitor and manage consumer loan risk, policies and procedures are developed and modified, as needed, jointly by line and staff personnel. This activity, coupled with relatively small loan amounts that are spread across many individual borrowers, minimizes risk. Additionally, trend and outlook reports are reviewed by management on a regular basis.
Previous wording
The Bank manages asset quality and controls credit risk through diversification of the loan and lease portfolio and the application of policies designed to promote sound underwriting and loan and lease monitoring practices. The Bank's Credit Quality Administration department is charged with monitoring asset quality, establishing credit policies and procedures, and enforcing the consistent application of these policies and procedures across the Bank. Reviews of non-performing, past due loans and leases and larger credits, designed to identify potential charges to the allowance for credit losses, and to determine the adequacy of the allowance, are conducted on an ongoing basis. These reviews consider such factors as the financial strength of borrowers, the value of the applicable collateral, loan and lease loss experience, estimated loan and lease losses, growth in the loan and lease portfolio, prevailing economic conditions, and other factors.
Current wording
The Bank manages asset quality and controls credit risk through diversification of the loan and lease portfolio and the application of policies designed to promote sound underwriting and loan and lease monitoring practices. The Bank's Credit Quality Administration department monitors asset quality, establishing credit policies and procedures, and enforcing the consistent application of these policies and procedures across the Bank. Reviews of non-performing, past due, and larger credits are conducted to identify potential charges to the ACL and to assess the adequacy of the allowance. These reviews consider such factors as the financial strength of borrowers, collateral value, historical loss experience, portfolio growth, prevailing economic conditions, and other factors.
Previous wording
(1) Non-accrual and 90+ days past due loans include government guarantees of $41.5 million and $32.1 million, respectively, as of December 31, 2024. As of December 31, 2023, non-accrual and 90+ days past due loans include government guarantees of and $19.3 million and $12.3 million, respectively.
Current wording
(1) Non-accrual and 90+ days past due loans include government guarantees of $38 million and $41 million, respectively, as of December 31, 2025. As of December 31, 2024, non-accrual and 90+ days past due loans include government guarantees of $42 million and $32 million, respectively.
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Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Commercial real estate and commercial loans are the largest classifications within earning assets, representing 41% and 20%, respectively, of average earning assets for the year ended December 31, 2024, as compared to 40% and 20%, respectively, for the year ended December 31, 2023. The increase in commercial real estate and commercial loan balances between December 31, 2024 and December 31, 2023 was driven by commercial line utilization and new originations, partially offset by loan payoffs.
Previous report — wording carried elsewhere
In addition to liquidity from core deposits and the repayments and maturities of loans and investment securities, the Bank can sell securities under agreements to repurchase, issue brokered certificates of deposit, or utilize off-balance sheet funding sources.
Previous report — wording carried elsewhere
As of December 31, 2024, the most recent notification from the FDIC categorized the Bank as "well-capitalized" under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank's regulatory capital category.