Aristotle Small Cap Equity Fund's Update on Columbia Banking System, Inc. (COLB)

Aristotle Capital Boston, LLC, an investment advisor, released its “Small Cap Equity Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the third quarter, the small-cap equities delivered strong results with the Russell 2000 Index reaching its first all-time high since November 2021. A favorable macroeconomic backdrop led the rally. In the quarter, the fund (Class I-2) delivered a return of 3.16% underperforming the 12.39% total return of the Russell 2000 Index. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its third-quarter 2025 investor letter, Aristotle Small Cap Equity Fund highlighted stocks such as Columbia Banking System, Inc. (NASDAQ:COLB). Columbia Banking System, Inc. (NASDAQ:COLB) is a Bank holding company of Columbia Bank. The one-month return for Columbia Banking System, Inc. (NASDAQ:COLB) was 6.22%, and its shares gained 6.14% over the last 52 weeks. On December 18, 2025, Columbia Banking System, Inc. (NASDAQ:COLB) stock closed at $28.86 per share, with a market capitalization of $8.634 billion.

Aristotle Small Cap Equity Fund stated the following regarding Columbia Banking System, Inc. (NASDAQ:COLB) in its third quarter 2025 investor letter:

"Columbia Banking System, Inc. (NASDAQ:COLB) is a Washington state-based commercial bank that is in the early stages of winding down a large portfolio of low-yielding loans with organically driven higher-yielding relationship loans and lower-cost core deposit funding. A combination of operational-cost savings associated with the Pacific Premier Bancorp merger and an increased focus on increasing fee-based income should allow for higher-than historical profit margins and an attractive earnings-per-share (“EPS”) growth outlook, ultimately allowing for incremental share buybacks or dividend increases."

Columbia Banking System, Inc. (NASDAQ:COLB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 26 hedge fund portfolios held Columbia Banking System, Inc. (NASDAQ:COLB) at the end of the third quarter, compared to 28 in the previous quarter. While we acknowledge the potential of Columbia Banking System, Inc. (NASDAQ:COLB) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.