Columbia Banking at Barclays Conference: Strategic Integration and Profit Focus

On Wednesday, 10 September 2025, Columbia Banking System (NASDAQ:COLB) presented at the Barclays 23rd Annual Global Financial Services Conference. The company discussed its strategic integration of Pacific Premier Bancorp, highlighting a positive cultural alignment and a focus on profitability over growth. While financial performance remains steady, challenges in loan growth persist.

Key Takeaways

• Columbia Banking System successfully integrated Pacific Premier Bancorp, enhancing its strategic goals in Southern California.
• Loan growth remains a challenge, with a focus on profitability and reducing wholesale funding levels.
• The company aims to optimize capital levels and achieve a balance sheet composition similar to previous years.

Financial Results

• Deposits: A seasonal uptick in deposits was observed, with positive results from deposit acquisition efforts.
• Loans: Loan growth continues to be elusive, with a focus on profitability. The company plans to remove $9 billion in transactional real estate loans from its balance sheet.
• Capital Ratios: Capital ratios have increased by a couple of hundred basis points since the AMCLA deal, with total risk-based capital at 13%.
• Loan Origination: Pre-acquisition, loan origination was $1 to $1.1 billion per quarter, increasing to an estimated $1.4 billion post-acquisition.
• Organic Loan Growth: Expected to be in the 3-5% range next year.

Operational Updates

• Pacific Premier Bancorp Integration: The integration is progressing smoothly, with high cultural alignment and employee excitement. Rebranding was completed over a weekend.
• Southern California Expansion: The acquisition accelerates strategic goals for Southern California by a decade or more.
• Cross-Business Referrals: Cross-business referral activity began immediately after the acquisition.
• Training Programs: Training for Pacific Premier employees is set to start next week.
• New Market Growth: Success has been noted in new markets like Colorado and Arizona, with a focus on Utah as a growth market.

Future Outlook

• Organic Growth: Organic growth is unlikely to reach the $100 billion regulatory threshold soon.
• Capital Return Story: Columbia Banking System remains focused on capital return, with potential share repurchases after the Pacific Premier Bancorp close.
• Balance Sheet Composition: The goal is to achieve a balance sheet composition similar to 2020-2022, with a shift towards more C&I loans.
• Optimal Capital Levels: Capital targets are set at 150 basis points above regulatory requirements.
• M&A Strategy: The focus is on optimizing current operations rather than pursuing more acquisitions.

Q&A Highlights

• Shareholder Value: Emphasis on delivering relative NIM performance and reducing wholesale funding levels.
• Pacific Premier Bancorp Integration Risks: Confidence in managing integration risks based on past experience.
• Strategic Goals: The acquisition of Pacific Premier Bancorp is seen as a perfect strategic fit.
• M&A Super Team: There are no plans for a buying spree.
• CRE Exposure: Focus on relationship-based CRE lending rather than transactional lending.

For more details, please refer to the full transcript below.

Full transcript - Barclays 23rd Annual Global Financial Services Conference:

Jared, Analyst: All right. Let’s go there and put.

Clint Stein, President, Chief Executive Officer, Columbia Banking System: Okay.

Jared, Analyst: All three of us up or? Yes. Okay. Thanks, everybody. Sorry for the brief delay. We’re excited to have Columbia Banking System with us for our final mid-cap fireside chat of the conference. I’m really excited to have Clint Stein, President, Chief Executive Officer, and Chris Merrywell, the President of Columbia Bank, join us. Thanks a lot, guys.

Clint Stein, President, Chief Executive Officer, Columbia Banking System: Yeah.

Jared, Analyst: Thanks, Jared. You know, it’s been a busy year for you all. Maybe just give a quick start with how things are going so far this quarter. You know, what you’re seeing in broader trends, and then we can maybe jump into talking a little bit about your deal.

Clint Stein, President, Chief Executive Officer, Columbia Banking System: Yeah. You know, we strive to be boring. If I think about just the core operations of our company, it’s been just kind of, you know, steady state, not in a bad way. You know, we’ve talked in the past about the seasonality that we see in our customer base. Starting on the deposit side, we’ve seen what we would expect in terms of a seasonal uptick in deposits, but we’ve also seen the results of our bankers and customer acquisition. From that standpoint, very pleased with what we’re seeing quarter to date. On the loan side, growth continues to be elusive, but our bankers are doing the right things. They’re excited about their pipelines. We’re staying disciplined in the type of customers that we’re pursuing. I mentioned on my second quarter comments on the earnings call that we’re focused on profitability, not growth for the sake of growth.

I know some of your counterparts, that’s a challenge for them to figure out because they just want to run their model off of some sort of growth in earning assets as opposed to really digging into the elements of what drives that. I would say that it’s been business as usual for 98% of our employee base this quarter. We have Drew Anderson with us on this trip. He would argue that it hasn’t been business as usual because he has the facilities, he has technology, he has operations, all the things that have been impacted by the Pacific Premier Bancorp acquisition, the rebranding, and all of those things. For the core of our company, it truly has just been another quarter of consistent performance.

Jared, Analyst: You know, with the deal, maybe just give us a recap of what the deal really brings to the table for you, you know, what you’re excited about with the addition of Pacific Premier.

Clint Stein, President, Chief Executive Officer, Columbia Banking System: Yeah. For us, you know, I made a comment when we announced the deal, and I think it’s in the deck that it says it accelerates our strategic goals for Southern California by a decade or more. It really exceeds it for what would be what I would view as the rest of my career, in terms of the density that it brings. We’ve had questions about, you know, Pacific Premier Bancorp kind of shut down lending a few years ago and made a call on what they thought was going to happen with the economy and those things. I viewed that as their deposit base is a mirror image of ours. It’s actually priced a couple basis points better than what ours was. It’s something, you know, aspirationally, Chris is a competitive guy. He wants to beat that.

As we prepare for what might be Fed cuts coming up next week, he’s got a very sharp pencil there. The quality of that deposit base, the quality of their people, the excitement that we saw when we announced it and we went out and we met with several hundred of their key leaders. We were in market last week. What was it, Chris? Probably 500 people that we met with.

Jared, Analyst: Yeah.

Clint Stein, President, Chief Executive Officer, Columbia Banking System: That level of excitement we’ve never seen at this moment in time of where you’re bringing a group on board. The cross-business referral activity started last week, and it was very surprising in terms of the level of it. Every branch has made a referral to something they didn’t previously have. It’s been fantastic. The engagement is off the charts.

Jared, Analyst: You know, we had another bank yesterday speaking a lot about their pending deal and the cultural integration and how important that is. I guess to your point, Chris, how much do you feel like you’re going to have to sort of train this new group to promote that cross-sell? I mean, it sounds like it’s good early stages, but is that, you know, sort of part of that culture? You know, what do you see working, and where do you see things maybe needing some investment in time or training?

Chris Merrywell, President of Columbia Bank, Columbia Banking System: Yeah. We have a little different approach than they did from the standpoint of being proactive and outbound and calling on small businesses. From day one, we’d do these town halls before we ever came together. What I took away from it is when they were done, everybody kind of talks, and you can see people gravitate to where they went. The branch managers gravitated around our leader of Retail. It was something I’d never seen before. They were asking questions, and they were very engaged. The good news is, you know, our conversion is not till mid-January of next year, and training starts rolling out next week. They’re fully engaged. They’re ready to go. They want to be outbound. It’s something I really haven’t seen before. It’s really exciting to have them so engaged. We’ll start training. We’ll roll out a campaign.

We have one going on right now, and they’re participating. They’ll start training as early as next week on, you know, the CBWAY that we call it. You know, it’s our relationship selling strategy. It’s not promotional pricing. It’s none of that. It’s what we have off the shelf and doing the right things, asking questions. From that standpoint, they’re so excited about being outbound that, yeah, I think it’s going to be fantastic. I couldn’t be more excited about it.

Jared, Analyst: How about looking more on the C&I side? Where do you see similarities and maybe differences in the approach? You had said that they had slowed down the pace of lending. What are you going to have to do there to really get things going?

Clint Stein, President, Chief Executive Officer, Columbia Banking System: I think that, you know, to tag on to Chris Merrywell’s comments about the excitement that they have, they’re ready to hit the ground running. Literally, the day after the announcement and the first town halls we did, their questions were around, what types of deals do you want us to look at? How does credit approval work? How do we get deal flow through? I’ll go back to that, you know, it’s really what one of the key differences that I look at in that market in particular is they were a lot like what Columbia Bank was pre-AMCLA in terms of the size of customer, the types of C&I businesses that they pursued. In Southern California, we’ve been more upmarket because we had very limited infrastructure. You had to kind of pick and choose. You couldn’t really be a mass C&I bank in that market.

Now, with over 40 locations and the granularity that they bring to us, I look at that as a great attribute because big deals move the needle when you put them on, when they pay off, they move the needle the other way. Those lower $15 million to $50 million revenue customers are very sticky, very loyal, and it just helps diversify the impact if there’s any type of downturn, if there’s payoff activity. The one thing that we do see, and we’ve seen this over the years many times as you go through different cycles, is that our customers build very attractive businesses that end up selling. Sometimes that impacts your overall net growth.

That’s why we really focus more on what are the activities, what are they doing to develop business, what do originations look like as opposed to just focusing on a bottom line growth number, because as those businesses sell, then we have a robust wealth management platform and they’re no longer a borrower, but either they’re already in existing or they become a wealth management customer for us.

Jared, Analyst: Do you think there’s a need for any sort of additional changes at the local market leadership level to implement the growth strategy, or do you think you have the team on the field that you need?

Chris Merrywell, President of Columbia Bank, Columbia Banking System: I think we got the right people there. Their Head of Commercial Banking, Jamie Robinson, he’s right in market. He’s right there. He’s going to lead that charge for us. We’ve paired him up, and he’s reporting to our Head of Commercial Banking, Richard Cabrera, who is right in Orange County. He lives there, works there already. I think it’s a natural fit. We retained their regional leaders from that business. It’s really intact, and it’s more about how do we do business, teaching them that, and them going to market. They’ve been pretty excited. As Clint said, they were asking, how do I process a deal? Who do I go to for approval and all of that? We’ve changed very little for them. They weren’t ready to go, but the leadership’s intact.

We pivoted retail away from Jamie because we have a little different approach, and we want to get more outbound into the small business. It’s a very robust market for that, and he was very accommodating of that and said, yeah, that makes perfect sense. I think they’re off to the races. Yeah.

Jared, Analyst: Great. With the deal, you’re just under $70 billion, with obviously a growth trajectory that at some point will get you closer to what’s currently the $100 billion regulatory threshold. How are you thinking about the infrastructure, the investments in systems and processes as you approach $100 billion? If we see some tangible relief from that level, does that change your expense expectations, maybe over the next 3 years?

Clint Stein, President, Chief Executive Officer, Columbia Banking System: Yeah. You know, we’ve had this question quite a bit, and we hear different numbers. We hear numbers that it’s, you know, $20 million of incremental expense. It’s $50 million of incremental expense. I always say it’s like you play golf with that guy that says, I’ve only played 3 times this year, and he goes out and he shoots a 75. You don’t know where individual banks are in terms of their preparedness. You don’t know what kind of infrastructure they have. You don’t know how developed their risk management processes are. When you hear those numbers, I think there could be a lot of variability in what it actually is. We’re so far away from $100 billion. I mean, we’re 70% of the way there.

The way we look at it is we have, pre-Pacific Premier, we’ve talked about, you know, C&I, call it $6 billion of loans that we want to remix off our balance sheet. I think there’s another roughly $3 billion that comes with Pacific Premier. No credit issues. We’re not concerned about the credit side. It’s just they’re just transactional real estate loans, and that’s not the core of our franchise. You have $9 billion that needs to come off there. We’re originating $1 to $1.1 billion a quarter of the type of stuff that we will continue to do. You add in Pacific Premier, and let’s say that number goes to $1.4 billion.

Jared, Analyst: 1.4? 1.5?

Clint Stein, President, Chief Executive Officer, Columbia Banking System: Yeah, kind of the rule of thumb is you have to do 3 to 4X depending on what’s going on in the economy and with the customer base. If you want $100 million of loan growth in the type of stuff we do, you have to do between $300 million and $400 million of originations just to counteract prepayments and payoffs and amortization in the book. If you use that rule of thumb and you just do the math, it’s going to be a long time before we approach that $100 billion threshold organically. There’s zero pressure on us to start building that infrastructure. As I’ve mentioned before, our focus is more profitability. By remixing our balance sheet and getting the composition so it looks more like historical Columbia, that gives us the opportunity to improve revenue, profitability, and still stay roughly $70 billion.

Jared, Analyst: I guess that’s a follow-up to that. With this deal at $70 billion, do you feel you have sufficient scale? You said organically, it’s going to take you a long time to get to $100 billion. Is there any reason to think you need to get bigger from here, or is this sufficient scale for the time being?

Clint Stein, President, Chief Executive Officer, Columbia Banking System: Five years ago, we had a strategic retreat with our board. My biggest concern at that time was relevancy. You know, we’re in a consolidating industry. We were sub $20 billion at the time and very relevant. I think $20 billion today is very relevant. I don’t know that it’s relevant five years or ten years from now. What we wanted to do was just achieve a level of scale so that no matter what happens in the industry, we’ve got something of value for our shareholders. We’ve achieved that. Candidly, we achieved it with Columbia Bank. Our focus was the Northwest and creating that undisputed regional champion in the Northwest. As we did that, we saw Pacific Premier Bancorp, and we had a kind of a beachhead in Southern California, more branches, roughly $700 million, $750 million in deposits per branch.

It’s such a deep market that we were trying to figure out organically how do we tackle that market. Pacific Premier Bancorp was the missing link, and it was actionable. I think the price was right, the deposit base was, as I’ve mentioned, a mirror image of ours. Now I sit here and at $70 billion, I feel like we’re in the sweet spot. If you look at banks headquartered west of the Mississippi, there’s only four of us in that regional space. There’s not one that’s identical to us. There’s not one that has that market presence up and down the coast. Our focus is just making it the best version of what it is today that it can possibly be, consistent performer, top tier performer. I feel like no matter what happens in our industry now, we have the scale today to always be relevant.

Jared, Analyst: Great. Thanks. We have a few questions for the audience. Maybe we can pull those up. Busy day at the end of a conference, but we’ll run through them. What’s your current position in Columbia shares? 1, long; 2, equal weight; 3, underweight or short; or 4, not involved?

Clint Stein, President, Chief Executive Officer, Columbia Banking System: Personally, mine’s long.

Jared, Analyst: Yeah. I’ll give you overweight long. You guys can plug in as well. You know, a little bit of a mixed room, some long, some short, some not involved, but good opportunity to have the discussions. Which would have the largest impact on improving the relative valuation of shares of Columbia from here? 1, better relative margin performance; 2, above peer loan growth; 3, better expense control; 4, credit quality outperformance; 5, more active share repurchase; or 6, accretive bank acquisition. These are asking all of the mid-caps to get a sense of where people’s thoughts are. From here, carry purchases, buybacks, and better margin performance. Any thoughts as you’re looking at that?

Clint Stein, President, Chief Executive Officer, Columbia Banking System: Yeah. One of the things that we’ve been talking about the last couple of years was that we’re a capital return story, you know, and all the value that’s unlocked. I mean, personally, I tell everybody I’m a recovering CPA, and purchase accounting doesn’t make any sense. In the current rate environment, it unlocks a lot of value, and it’s basically a non-diluted capital raise as that comes in. We’ve seen that if you look at the two and a half years since we closed the AMCLA deal, our capital ratios have gone up a couple hundred basis points. We’re now above our long-term targets. Once the dust settles from the Pacific Premier Bancorp close, it’s, I think, going to actually increase the level of capital accretion that we’ll have and increase our ability to significantly look at share repurchases. I see that that’s 50% of it.

Relative NIM performance is 10%. So 60% of that, I think, are things that just all the work we’ve done, we’re positioned to deliver on. Above pure loan growth is the other 40%. There are some of the mechanics you walk through. We had talked about that remix and things. I’m not going to commit to number two. The other two, I think, with the stuff that Chris Merrywell and his team are doing and generating new customer growth and what we’re seeing, the impacts there, especially on the deposit side and our ability to reduce the wholesale funding levels that we have. I think we’ve got two out of the three.

Jared, Analyst: Yeah. Yeah. All right. Number 3, what will organic loan growth be at Columbia next year in 2026? Again, this is a standard question for our group, but 1, 3 to 5%; 2, 5 to 7%; 3, 7 to 9%; or 4, 9+%. Overwhelmingly, 3 to 5. I think we certainly walked through some of that. Number 4, you like the decision to acquire Pacific Premier Bancorp. If not, why not? 1, yes, it was a good decision. 2, no, the deal was announced too soon following the AMCLA merger, which could lead to elevated integration risk. 3, no, capital levels were not high enough at the time of the deal announcement. 4, no, the acquired lending book footprint and/or the other core competencies are not attractive enough at the price paid. It seems like, you know, people like the growth opportunity.

Clint Stein, President, Chief Executive Officer, Columbia Banking System: Yeah. The question number 2 on elevated integration risk, that’s something that I was very intentional on our earnings calls and investor meetings after we announced that. We actually had a slide that showed, over the last 15 years, our track record and history with acquisitions, and we showed Pacific Premier Bancorp’s history. I think we both had 10 different acquisitions that we had done. The whole intent of that was to reinforce to people that the integration, I mean, I don’t want this to come across as arrogant, but we’ve got that. We closed it last week. At the same time, we rebranded the entire company to Columbia Bank. Over the course of the weekend, it went, you know, online banking apps changed, emails changed, signs changed, and it was just like it went Columbia Bank everywhere up and down the West Coast and throughout the West.

That was the intent of that message. Sometimes you hear people try to read too much into it. The thought was we put that message out there. We invited Steve Gardner to stay on our board. Our board is very adamant about wanting somebody with banking experience in the boardroom. Steve has run a regional bank similar to what we are, and so he has a lot of perspective in terms of the challenges and opportunities that our industry provides. That’s why Steve’s on the board. Some of the narrative that we’ve heard is that, oh, we were creating, we put that slide out there, and my comments were centered around that now we’ve created this M&A super team, and we’re going to go on a buying spree. It’s like, no, that’s not the purpose.

Hopefully, with my comments that I made earlier about, I’m content with we’ve, that Pacific Premier Bancorp was the missing piece to the puzzle. Now it’s just about making it the best, highest performing company that it can be.

Jared, Analyst: Very cool. Thanks. I think we have one more question. Nope. Nothing? Okay. Any questions in the audience? Happy to open it up. No? Okay. You know, maybe looking now at the consolidated company and just sort of going forward, what’s the growth like in some of the newer markets that you’d been entering earlier on your own, Colorado and Arizona? What’s the outlook there?

Clint Stein, President, Chief Executive Officer, Columbia Banking System: Yeah. I know some people feel like they’ve bought Colorado, we’re taking it for free. We have had tremendous success in those de novo markets, and it starts with the right people. We’ll loosely call it a team, and specific to Colorado. The reason I say loosely a team is it was 2 people. They just recently added a third person in our wealth management or private banking group. Over the course of their first year, those 2 individuals brought in $80 million of deposit relationships, over $40 million of loans. As you think about, in a typical branch type setting, that would be a pretty high-performing branch, but you would have maybe 5, 6 FTE. You’d have infrastructure in terms of your facility and things. These 2 individuals just sit in 2 offices in our administrative space that we have in Denver. That’s just one example.

When we look at Utah and some of the investments that we’re going to continue to make in that market, and the types of well-established companies that we’re winning, we’re winning their business and earning their trust. The other market would be Arizona. Just the way that traffic flows in the Phoenix area, my view is if we were to build our company today, it would be still C&I lead with C&I first, wealth management platform to bank the owners and executives. You need to have a retail network to support the needs of those businesses and those individuals and their employees. Phoenix is, depending on what stat you look at, what time of year it is, the 4th or 5th largest MSA in the country. We now have 5 locations there, and you can get to virtually any of those any time of the day within 30 minutes.

I feel like we’ve covered that market. Now it’s a matter of if we find a key banker that’s got a specialty, we’ll add them. In terms of the build-out for that market, it’s essentially done. Maybe in a few years, we might want to add a couple of locations in the West Valley where there’s a tremendous amount of growth. That’s kind of the prototypical example of what we’re going to recreate in Utah and what we’ll recreate in Denver. It’s not a ton of investment, but then the growth that comes in, you know, back to my earlier comment about that, you know, you have to have 3 to 4X the growth if you have a portfolio just to manage the rundown and the natural amortization of those. In these markets, virtually every dollar of production is on micrometal growth.

Chris Merrywell, President of Columbia Bank, Columbia Banking System: Because of the Pacific Premier acquisition, we’ve pivoted our what was going to be an investment in trying to grow out Southern California. We’ve pivoted that into, you know, the mountain states, Utah, Colorado. We’re seeing some really good traction with those team leaders about their plans and what they want to do, and we’re really optimistic about that.

Jared, Analyst: What are your thoughts on CRE here? I know that this increases your capital concentration a little bit. You have some identified parts of the portfolio that you’re running down. Do you have an appetite to add new CRE here, or not at this point?

Clint Stein, President, Chief Executive Officer, Columbia Banking System: Yeah. For relationships, we’ll continue to serve their needs. You know, if it’s a developer, if it’s office, if it’s multifamily. The stuff we don’t like is just the transactional where there’s no ancillary business. There’s no relationship. It’s just a transaction. We inherited what we had pre-Pac Premier from the AMCLA deal. Pac Premier inherited what they have from the Opus deal. We don’t have credit concerns. They’re underwritten. The underwriting on it was very solid. The credit quality is good. The performance we’ve had, you know, very good performance from that standpoint. It’s just there’s no other relationship, and so we can’t drive any fee income out of it. We’re not getting the deposit balances from it.

Where we do have a meaningful relationship, and a lot of times with some of these existing customers, you know, if they’re a developer, we’ll have their wealth management business as well. As I kind of think about it, if you want to know what we’re striving for from a balance sheet composition point of view, look at Columbia Banking System’s balance sheet in 2020, 2021, 2022. That’s the goal of getting that composition and that mix back. Less multifamily, we will still have some multifamily, less resi, and more C&I.

Jared, Analyst: With that broader backdrop and, you know, looking at capital and you’re talking about the ability of or the ability to grow capital with PAA, where do you see the optimal capital levels for the bank that you’re building here, especially, I guess, with the backdrop of maybe an improving regulatory backdrop?

Clint Stein, President, Chief Executive Officer, Columbia Banking System: I think it was in 2010, coming out of the financial crisis, that we established our capital targets. If you think about what that looks like, they’re unchanged from that point in time because we feel like it’s at a level sufficiently above what it takes to be considered well capitalized. Take the regulatory ratios, add 150 basis points, and that’s what our target is. It doesn’t mean we’re always going to be above it or that we’re always going to be right on that target. There are times where we might be below it. When we closed the AMCLA acquisition, it took us to below 11% total risk-based capital. That’s been our binding constraint, and that was because the rate environment changed dramatically on us. We’ve grown that to now 13%. We think that we still have to finalize the marks and everything.

It’s just been a little over a week since we closed Pacific Premier Bancorp, but we think that those levels will be relatively unchanged because Pacific Premier Bancorp had so much capital that they’re kind of funding their own marks on that balance sheet. Once the noise settles, we accreted, call it 85, 90 basis points of capital to those ratios over the past year. With the addition of Pacific Premier Bancorp, we would expect that we would accrete more than that. We’re already above our targets. The question that we get is, is this still a capital return story? The answer is absolutely yes. That’s conversations that we’ll have with our board next week, with our board in October, and with our board in January as to what that looks like and the timing of that.

Jared, Analyst: Great. I think we’ve hit a lot of topics here. I don’t know if you have any closing comments, or if not, happy to wrap it up here.

Clint Stein, President, Chief Executive Officer, Columbia Banking System: I don’t have any closing comments.

Jared, Analyst: Great. Thank you very much. I really appreciate you joining us this year again. Thank you, everybody, for joining us here in the room.

Clint Stein, President, Chief Executive Officer, Columbia Banking System: Yeah, thanks, Jeremy.

Jared, Analyst: Thanks.

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