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Business Combinations | 9 Months Ended
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Sep. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
Business Combinations | Business Combinations Acquisition of Pacific Premier On August 31, 2025, Columbia completed its acquisition of Pacific Premier in an all-stock transaction valued at $2.4 billion. On September 1, 2025, Pacific Premier's wholly owned banking subsidiary, Pacific Premier Bank, National Association, merged with and into Columbia Bank. Pursuant to the acquisition agreement, each share of Pacific Premier common stock was exchanged for 0.9150 of a share of Columbia common stock. The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. Fair value estimates were based on information available as of the acquisition date and are considered preliminary as of September 30, 2025. These preliminary estimates, including the initial accounting for deferred taxes, may be revised during the measurement period, which ends no later than one year after the acquisition date. Adjustments may occur as additional information becomes available regarding facts and circumstances that existed at the acquisition date. Fair value determinations required significant estimates and assumptions, including discount rates, expected cash flows, and market conditions and are inherently subjective. Management believes the preliminary estimates are reasonable; however, refinements may occur as additional information becomes available.
(in millions, shares in thousands) |
Shares of Columbia common stock issued to Pacific Premier Stockholders | 87,632 |
Columbia's market price per common share (in dollars) as of August 31, 2025 | $ | 26.77 |
Fair value of purchase price consideration transferred | $ | 2,346 |
Fair value of restricted stock exchanged | $ | 9 |
Purchase price consideration | $ | 2,355 |
The following summarizes the allocation of purchase price consideration to the estimated fair values of assets acquired and liabilities and equity assumed from Pacific Premier as of August 31, 2025.
(in millions) | August 31, 2025
Purchase price consideration |  |  |
| Fair value of common shares issued and exchanged |  |  | $ | 2,355 |
| Total purchase price consideration |  |  | $ | 2,355 |
Fair value of assets acquired: |  |  |
| Cash and due from banks | $ | 874 |  |  |
| Investment securities | 2,828 |  |  |
| Loans held for sale | 1 |  |  |
| Loans and leases | 11,382 |  |  |
| Restricted equity securities | 98 |  |  |
| Premises and equipment | 53 |  |  |
| Other intangible assets | 355 |  |  |
| Deferred tax asset, net | 132 |  |  |
| Other assets | 889 |  |  |
| Total assets acquired | $ | 16,612 |  |  |
Fair value of liabilities assumed: |  |  |
| Deposits | $ | 14,542 |  |  |
| Other liabilities | 167 |  |  |
| Total liabilities assumed | $ | 14,709 |  |  |
Net assets acquired |  |  | $ | 1,903 |
Goodwill |  |  | $ | 452 |
In connection with the acquisition of Pacific Premier, the Company recorded approximately $452 million of goodwill, representing the excess of purchase price consideration over the fair value of net assets acquired. Goodwill primarily reflects expected synergies, expanded market opportunities, and the value of the assembled workforce. None of the goodwill is deductible for tax purposes. Additional details on goodwill and intangible assets are provided in Note 6 – Goodwill and Other Intangible Assets. The following is a description of the methods used to determine the fair values of significant assets and liabilities presented above. Cash and due from banks: Carrying amounts approximate fair value due to the short-term nature. Investment Securities: Fair values were based on quoted prices when available or, when not observable, on market-based inputs and valuation models using discounted cash flows. Loans held for sal e: Fair value was based on indicative quotes or bids from third party investors. Loans and leases: A third-party valuation was performed to estimate the fair value of the loans held for investment. The portfolio was segmented into performing PCD loans, non-performing PCD loans, and non-PCD loans. Loans were further pooled by type and risk rating. Each loan was valued individually using a discounted cash flow approach, incorporating contractual terms, expected credit losses, prepayment assumptions, and market-based discount rates. Discount rates reflected loan type, credit risk, liquidity, and prevailing market conditions. The present value of expected cash flows, adjusted for credit loss expectations, was used to determine fair value. The Company is required to record PCD assets, defined as a more-than-insignificant deterioration in credit quality since origination or issuance, at the purchase price plus the allowance for credit losses expected at the acquisition date. Under this method, no credit loss expense is recognized in net income at acquisition. Subsequent changes in expected credit losses are recognized in the provision for credit losses (or recapture) in future periods. Any non-credit discount or premium resulting from the acquisition is allocated to the individual assets and accreted to interest income using the effective interest method. At the acquisition date, the initial allowance for credit losses determined on a collective basis is allocated to individual assets to appropriately adjust the non-credit discount or premium. Of the $11.4 billion in net loans acquired, $404 million were identified as PCD assets at the acquisition date. The following summarizes these PCD loans as of the acquisition date:
(in millions) | August 31, 2025
Principal of PCD loans acquired | $ | 463 |
PCD ACL at acquisition | (5) |
Non-credit discount on PCD loans | (54) |
Fair value of PCD loans | $ | 404 |
Premises and equipmen t: Fair values were determined using a market approach, supported by third-party appraisals and broker opinions of value for land, office buildings, and branch facilities. Core deposit intangibles: Core deposit intangibles represent the value of certain acquired deposit relationships. Fair value was estimated using a discounted cash flow methodology based on the present value of expected cost savings from utilizing core deposit funding compared to alternative funding sources. Key assumptions included expected customer attrition rates, net maintenance costs of the deposit base, alternative cost of funds, and interest costs associated with customer deposits. The resulting intangible assets are amortized over 10 years using the sum-of-years-digits method, reflecting the pattern of expected economic benefits. Deposits: Fair values for demand and savings deposits were estimated to equal the amounts payable on demand at the acquisition date. Fair values for time deposits were determined using a discounted cash flow approach that applied current market interest rates to the contractual terms of the deposits. The Company's operating results for the three and nine months ended September 30, 2025 include the results of Pacific Premier's operations subsequent to the acquisition date. Disclosure of Pacific Premier's revenue and net income (excluding integration costs) included in the Consolidated Statements of Operations is impracticable due to the integration of systems and operations following the acquisition. The following summarizes the impact of acquisition-related expenses for the periods presented:
|  | Three Months Ended |  | Nine Months Ended
(in millions) |  | September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Personnel |  | $ | 39 |  |  | $ | 2 |  |  | $ | 53 |  |  | $ | 8 |
Premises and equipment |  | 17 |  |  | — |  |  | 17 |  |  | 1 |
Legal and professional |  | 26 |  |  | — |  |  | 29 |  |  | — |
Other |  | 1 |  |  | — |  |  | 2 |  |  | — |
Total acquisition-related expenses |  | $ | 83 |  |  | $ | 2 |  |  | $ | 101 |  |  | $ | 9 |
The following presents unaudited pro forma financial information as if the acquisition had occurred on January 1, 2024. Pro forma adjustments reflect changes in interest income from the accretion of discounts and premiums on acquired loans and leases, changes in interest expense from the amortization or accretion of fair value adjustments on interest-bearing deposits, and the amortization of core deposit intangibles as if the deposits had been acquired on January 1, 2024. This pro forma information is provided for illustrative purposes only and is not necessarily indicative of the results that would have occurred had the acquisition been completed at the beginning of the prior year. The amounts do not reflect anticipated operating cost savings, revenue enhancements, or other synergies expected to result from the acquisition. Actual results may differ from the unaudited pro forma information presented.
| Unaudited Pro Forma for the
| Three Months Ended |  | Nine Months Ended
(in millions) | September 30, 2025 |  | September 30, 2024 |  | September 30, 2025 |  | September 30, 2024
Net interest income | $ | 626 |  |  | $ | 619 |  |  | $ | 1,840 |  |  | $ | 1,882 |
Non-interest income | $ | 90 |  |  | $ | 85 |  |  | $ | 260 |  |  | $ | 224 |
Net income (1) | $ | 242 |  |  | $ | 215 |  |  | $ | 618 |  |  | $ | 455 |
(1) Pro forma net income for the three and nine months ended September 30, 2025 was adjusted to exclude acquisition-related costs of $135 million and $161 million, respectively, including historical Pacific Premier acquisition-related costs incurred during those periods. Pro forma net income for the nine months ended September 30, 2024 was adjusted to include acquisition-related costs of $161 million. The pro forma assumes acquisition-related costs were incurred the first quarter of 2024.

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