Columbia Bank prices $250M subordinated notes to fund growth, capital return

What's the deal? Columbia BankDealroom has a profile for this one. Try Dealroom →, the banking subsidiary of Nasdaq-listed Columbia Banking System, has priced $250 million in fixed-to-fixed rate subordinated notes due 2036. The offering carries an initial interest rate of 6.721% per annum and is expected to close on September 18, 2026.

The details: The notes pay a fixed 6.721% semi-annually through September 18, 2031. After that, the rate resets to the five-year US Treasury rate plus 195 basis points through maturity, unless redeemed earlier.

What's the endgame? The Tacoma, Washington-based bank intends to use the proceeds for general corporate purposes, including to support growth and capital adequacy. It also plans to return up to $250 million of capital to its parent, which will use the funds to redeem certain outstanding trust preferred securities.

The fine print: The notes are intended to qualify as Tier 2 capital for regulatory purposes. They are unsecured, subordinated obligations of the bank only — not guaranteed by the parent — and rank behind senior debt, including claims of depositors and general creditors. They were offered to institutional accredited investors and are not FDIC-insured.

The signal: The raise ranks in the top fifth by size among comparable deals in our database. Columbia Bank operates across nine states — Arizona, California, Colorado, Idaho, Nevada, Oregon, Texas, Utah, and Washington — and the issuance shows regional banks tapping debt markets to shore up capital and refinance older instruments as they pursue growth.

Image credit: Columbia Bank