What happened?
Shares of regional banking company Columbia Banking System (NASDAQ: COLB) jumped 3.7% in the afternoon session after the company reported third-quarter 2026 results with revenue and adjusted earnings per share above analyst estimates. According to the company’s press release, Columbia Banking System reported revenue of $695 million, up 20% from a year earlier and above the $688.3 million consensus. Adjusted earnings were 82 cents a share, down from 85 cents a year earlier but above the 77-cent consensus.
Net interest income rose 21.8% to $615 million, above the $603.2 million estimate, and the net interest margin was 4.11%, above the 4% estimate and up 18 basis points from the prior quarter.
Management said the wider margin came from a shift toward higher-yielding relationship loans, higher securities yields, and customer deposits replacing wholesale funding. The bank paid down about $1.5 billion of wholesale funding in the quarter. About 3 basis points of the margin came from accelerated repayment of two acquired loans. The efficiency ratio was 53.1%, better than the 53.9% estimate. Tangible book value was the soft spot, down 2.5% to $18.10 a share versus an estimate of $19.31.
On the earnings call, management guided fourth-quarter net interest margin to about 4.05%, still above 4%, including a modest drag from carrying excess subordinated debt, and said it expects the margin to stay in the low-4% range over the next several quarters. It also has a new $1.2 billion repurchase authorization and expects to buy back $150 million to $200 million of stock in the fourth quarter.
After the initial pop, the shares cooled down to $31.00, up 3.7% from the previous close.
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What is the market telling us
Columbia Banking System’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock dropped 6.4% on the news that reports revealed a surprisingly discouraging update on inflation at the wholesale level. The report showed inflation was at 2.9% last month, significantly higher than economists had anticipated. This unexpected rise rattled investors, as it could influence the Federal Reserve's monetary policy. The central bank has been considering interest rate cuts, which are generally seen as a way to boost the economy and support investment prices. However, with inflation proving more persistent than expected, the Fed may be persuaded to delay these cuts for a longer period. This potential delay creates uncertainty in the market, leading to a broad sell-off as traders reassess the outlook for corporate profits and economic growth in a higher-rate environment.
Columbia Banking System is up 10% since the beginning of the year, and at $31.00 per share, it is trading close to its 52-week high of $33.61 from July 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Columbia Banking System’s shares 5 years ago would now be looking at only $878.12.
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