Why Regional Banking Plays Like Columbia Banking System Are Attracting Smart Money in a Challenging Year

A $147 Million Bet Reveals Institutional Conviction

HoldCo Asset Management just made a significant move that tells us something about where sophisticated investors see value. On November 13, the Florida-based fund disclosed a substantial addition to its Columbia Banking System (NASDAQ:COLB) holdings, purchasing 1.24 million shares worth approximately $31.48 million during the third quarter. The cumulative position now stands at 5.72 million shares valued at $147.30 million as of September 30—a signal of deliberate, conviction-driven capital deployment.

The Numbers Behind the Position

What makes this move noteworthy is the concentration: Columbia Banking System now represents 15.55% of HoldCo’s $947.56 million in 13F assets under management, placing it as the fund’s second-largest holding. This isn’t casual portfolio construction—it’s the kind of concentrated bet that suggests management sees durable earning power or near-term catalysts.

The fund’s top five positions paint a picture of regional financial institution exposure:

• Comerica Inc. (NYSE: CMA): $156.94 million (16.56%)
• Columbia Banking System (NASDAQ: COLB): $147.30 million (15.55%)
• First Bancorp (NASDAQ: FIBK): $125.89 million (13.29%)
• Ellington Financial (NASDAQ: EBC): $116.32 million (12.28%)
• Cullen/Frost Bankers (NYSE: CFG): $110.91 million (11.70%)

The clustering around regional banks isn’t accidental—it reflects a thematic view on margin recovery and capital efficiency in the banking sector.

A Job Stock Performing Below Its Potential

At $27.95 per share as of Thursday, COLB has gained just 3.5% over the past year, significantly lagging the S&P 500’s 16% advance. For a stock in this relative weakness, institutional conviction typically signals either valuation opportunity or operational improvements ahead. This is precisely the environment where patient capital finds opportunity—underperforming securities that possess solid fundamentals.

Columbia Banking System generates $2.07 billion in trailing twelve-month revenue with net income of $478.68 million and offers a 5% dividend yield. The bank operates hundreds of branches across Washington, Oregon, Idaho, and California, serving small-to-mid-market businesses, professionals, and consumer segments through a diversified product platform including commercial real estate loans, wealth management, and deposit products.

Recent Catalysts Building Momentum

The bank recently completed an acquisition of Pacific Premier, expanding total assets to approximately $67.5 billion. More importantly, the deal is driving tangible improvements: the net interest margin expanded to 3.84% in the most recent quarter from 3.56% a year prior. Core deposit growth surged roughly $14 billion quarter-over-quarter to $55.8 billion, directly attributable to the integration efforts.

While reported GAAP earnings appeared messy at $0.40 per share (down from $0.73 previously), the decline reflected merger-related costs and a $70 million credit provision—one-time headwinds. Operating earnings per share of $0.85 with an operating return on tangible common equity exceeding 18% present a clearer picture of normalized earning capacity once integration noise subsides.

Capital Return Signals Confidence

Management’s authorization of a $700 million share repurchase program through late 2026 carries particular weight. It signals confidence that the institution can generate excess capital even while absorbing a major transformation. For institutional investors focused on long-term equity value creation, this represents the kind of job stock characteristic that compounds returns: improving margins, disciplined capital allocation, and shareholder-friendly stewardship.

HoldCo’s concentrated position reflects conviction that margin expansion, deposit stability, and capital return will drive meaningful shareholder value as the market eventually prices in normalized earnings power rather than fixating on temporary integration costs. Whether that thesis plays out will largely depend on execution during the next two to three quarters.