HoldCo’s Push in COLB: Governance, Growth & the Case for a Big Buyback

HoldCo Asset Management’s move to materially increase its exposure to Columbia Banking System reveals both conviction in COLB’s post-acquisition trajectory and a strategic intent to influence capital allocation. The sizable stake (5.72 million shares) granted HoldCo standing from which to engage in governance, underpinned by its approximately $2.6 billion in regulatory AUM. [4] By situating COLB as its second-largest portfolio position (~15.55%), HoldCo signals expectation of improved returns driven by COLB’s recent financial performance and future upside from integration benefits of its Pacific Premier acquisition. [1]

COLB’s third quarter 2025 financials substantiate the areas HoldCo is likely targeting: net interest margin expanded 9 basis points QoQ to 3.84%, total assets rose sharply to $67.5 billion mainly due to the Pacific Premier acquisition, and deposits increased by ~$14 billion. Operating EPS, which excludes merger, restructuring, and acquisition-related provisioning costs, came in at $0.85 vs a GAAP EPS of $0.40; operating return on tangible common equity moved above 18%. These metrics underscore a trajectory toward normalized profitability and capital efficiency. [2]

However, there are some risks and frictions. Reported (GAAP) EPS was dragged by a one-time $70 million credit provision tied to the acquisition and merger and restructuring costs of $87 million. Operational leverage is still adjusting: non-interest expenses jumped, and commercial loan origination outside of acquisition lagged, with transactional and non-core loan runoff. [2] Meanwhile, COLB stock has underperformed the broader market, suggesting either investor skepticism around execution or concerns about sustained margin pressures, competition for deposits, or regulatory risk. [1][2]

HoldCo’s governance posture is cautious but firm. Its decision not to pursue a proxy battle in 2026 suggests it believes concessions from management have been sufficient for now; yet its conditional stance—especially that it may advocate for a sale—introduces potential strategic alternatives for COLB’s future, including M&A, increased shareholder returns, or tighter oversight. [4]

For investors, the situation presents an asymmetric risk-reward profile. The upside rests on COLB delivering on integration synergies, maintaining deposit cost discipline, and successfully executing cost savings, while downside risks include macroeconomic or credit shocks, interest rate reversals, or failure to meet HoldCo’s expectations around capital allocation. Monitoring upcoming quarters for margin trends, realized versus forecasted cost synergies, and management’s responsiveness will be key.