Columbia Banking Hits Half of Cost‑Save Target After Pacific Premier Deal, Eyes Q1 2026 System Conversion

TL;DR Columbia Banking captured half of its projected $127 million cost‑save run‑rate from the Pacific Premier merger and lifted its net interest margin to 4.06% in Q4 2025, setting the stage for a first‑quarter 2026 system conversion.

The Pacific Premier acquisition closed on August 31, 2025, adding roughly 350 branches across eight western states and expanding Columbia Banking’s footprint in Southern California. The deal was framed as a footprint‑completing move that would generate $127 million in annualized cost savings through branch consolidation, technology streamlining, and overhead reduction.

By the end of 2025, Columbia Banking reported that $63 million of those savings had been realized, representing about 50 % of the target. The bank’s net interest margin (NIM)—the ratio of interest income to interest‑earning assets—rose from 3.64% in Q4 2024 to 4.06% in Q4 2025, reflecting lower deposit costs and a shift away from higher‑priced wholesale funding. For context, the average NIM for U.S. regional banks hovered near 3.8% over the same period.

Market data shows Columbia Banking (ticker: COLB) trading at $45.20 per share, up 3.1% intraday, with a market capitalization of approximately $6.8 billion. Pacific Premier (ticker: PPBI) stood at $28.50, up 2.4%, valuing the combined entity around $4.2 billion before the merger. These moves outperformed the KBW Bank Index, which gained 1.8% over the same session.

The improvement in NIM stems from active deposit repricing and the runoff of non‑core, higher‑cost liabilities, a mechanism management says will continue to support margin expansion through 2026. Cost‑save realization reduces non‑interest expense, which the bank guides to $330‑$340 million per quarter for the next several periods, with a modest decline expected in Q3 2026 as synergies fully materialize.

Investors should watch whether the quarterly expense trajectory aligns with the guided range and whether the core‑system conversion in Q1 2026 proceeds on schedule, as those factors will determine the timing of the remaining $64 million in savings and the path to a normalized earnings profile.