KBRA assigns a rating of A- with a Stable Outlook to the $250 million subordinated notes issued by Columbia Bank ("the bank") with a final maturity date of September 18, 2036. The notes are callable at the option of the bank, commencing on September 18, 2031. Net proceeds will be used for general corporate purposes and to retire trust preferred securities outstanding at its holding company, Columbia Banking System, Inc. (NASDAQ:COLB).

Key Credit Considerations

The ratings for Columbia Bank remain tied to its solid, multi-year performance record, underpinned by its rich deposit base, which anchors bottom line earnings. On a consolidated basis, NIM performance continued to exhibit strong results in 2Q26 at 3.93%, with slightly stronger performance at the bank. The key driver of the enviable margin performance remains the bank’s attractive deposit base, encompassing a large proportion of noninterest-bearing deposits that have been remarkably stable in relation to total deposits (33% at 2Q26). Capital ratios were essentially unchanged on a linked quarter basis, as shareholder distributions (common dividends and share repurchases) that exceeded quarterly net income were effectively counterbalanced by a modest decline in assets. The issuance of the subordinated notes, together with the repayment of certain trust preferred securities noted above, the proceeds of which were originally contributed to the bank as common equity, will result in a modest reduction in the bank’s capital ratios.

Rating Sensitivities

Positive rating action is unlikely over the intermediate term, given the company’s high rating position within KBRA’s rated universe. Conversely, negative rating pressure could arise if the gap between the company’s consolidated capital ratios and rated peer averages widens, particularly if KBRA views the company’s ability to rebuild capital as uncertain or limited. A significant deterioration in asset quality that results in elevated credit costs and materially pressures earnings could also result in negative rating action.

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Methodology

Financial Institutions: Bank & Bank Holding Company Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1017085

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Analytical Contacts

Shannon Servaes, Managing Director (Lead Analyst)

+1 301-969-3247

shannon.servaes@kbra.com

John Rempe, Senior Director

+1 301-969-3045

john.rempe@kbra.com

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Justin Fuller, Managing Director

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