Is COLB a good stock to buy? We came across a bullish thesis on Columbia Banking System, Inc. on The Dividend Auditor’s Substack. In this article, we will summarize the bulls’ thesis on COLB. Columbia Banking System, Inc.’s share was trading at $29.18 as of June 2nd. COLB’s trailing and forward P/E were 11.37 and 9.51 respectively according to Yahoo Finance.
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Columbia Banking System, Inc. operates as the bank holding company for Columbia Bank that provides banking, private banking, mortgage, and other financial services in the United States. COLB is presented as a misunderstood regional bank whose reported earnings obscure a significantly stronger underlying business.
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While investors focus on GAAP earnings weighed down by merger-related costs, core operating performance remains robust, with operating EPS of $3.25 in FY2025 expected to grow to $3.48 in FY2026. At roughly $26 per share, COLB trades at just 7.5x forward operating earnings and offers a 5.7% dividend yield, creating an attractive valuation disconnect.
The market remains concerned about integration costs from the Pacific Premier acquisition, a seemingly elevated fourth-quarter net interest margin (NIM), muted loan growth, and broader regional banking risks. However, management has clarified that the reported 4.06% NIM included temporary benefits, with a normalized core NIM of approximately 3.95%, still among the strongest in its peer group. As Pacific Premier synergies are fully realized, management expects NIM to exceed 4.0% again during 2026.
The acquisition has already expanded Columbia into a $66.8 billion asset bank with a strong Western U.S. footprint, accelerating loan originations, fee income opportunities, and operating leverage while targeting $127 million of pretax cost synergies. Tangible book value increased 11% year over year to $19.11 per share, buybacks are expected to remain substantial, and the dividend has resumed growth after a five-year pause, signaling confidence in future earnings power.
Beyond organic growth, COLB offers additional upside through potential acquisition interest, as its scale, balance sheet quality, and valuable Southern California deposit franchise make it an attractive target for larger banks. A normalized valuation supports a price target of approximately $34 per share, while a takeover scenario could imply a value of $34–39 per share, representing substantial upside from current levels.
Previously, we covered a bullish thesis on JPMorgan Chase & Co. (JPM) by Pacific Northwest Edge in March 2025, which highlighted the bank’s dominant deposit franchise, strong capital generation, consistent share repurchases, and systemic importance within the U.S. financial system. JPM’s stock price has appreciated by approximately 25.86% since our coverage. The Dividend Auditor shares a similar view but emphasizes Columbia Banking System’s valuation disconnect, merger synergy realization, dividend growth prospects, and potential M&A-driven upside.
Columbia Banking System, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held COLB at the end of the first quarter which was 36 in the previous quarter. While we acknowledge the risk and potential of COLB as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than COLB and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
