Almost 5% a year from a bank you've never heard of
It pays a quarterly dividend without interruption, and it didn't touch it during two mergers or amid a banking panic. Yet its shares have been flat for a year now. The market sees it as a bank that keeps digesting what it swallowed. But the numbers tell a different story.
Key points
An American bank with a dividend yield around 4.9% a year that almost nobody in Europe knows
Net income jumped 37%, but per share it's exactly the same $0.73 as a year ago
In a single quarter the bank bought back 2.3% of all its shares, and the dividend was the smaller part of the payout
Deposits fell by $1.4 billion in three months, while market borrowings rose by $900 million
The October 29 results will show four numbers that reveal whether the stock moves off the spot
$0.37 per share. From a bank nobody in Europe knows
Anyone holding Columbia Banking System $COLB shares at the end of August received $0.37 per share into their account in mid-September. The board approved the dividend on August 14 and set the payment for September 14. That's $1.48 per year, which at a price around $30 means a yield of roughly 4.9% a year. Almost no large bank in the US pays that much.
Who is it actually? A bank from Tacoma, Washington, which after two big mergers manages $65.4 billion in assets and has branches in nine states in the western US – from Seattle through California to Texas. Its market capitalization is around $8.5 billion. In most European countries, with that size it would rank among the two or three largest banks in the market, and everyone would know its name. In America it's one of dozens of regional banks that no one outside their home states has heard of.
So let's introduce it.