NEW YORK ( TheStreet) -- Columbia Banking System (Nasdaq: COLB) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • COLUMBIA BANKING SYSTEM INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, COLUMBIA BANKING SYSTEM INC turned its bottom line around by earning $0.73 versus -$0.44 in the prior year. This year, the market expects an improvement in earnings ($0.92 versus $0.73).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 262.6% when compared to the same quarter one year prior, rising from $5.20 million to $18.87 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 20.7%. Since the same quarter one year prior, revenues rose by 20.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for COLUMBIA BANKING SYSTEM INC is currently very high, coming in at 93.40%. It has increased significantly from the same period last year. Along with this, the net profit margin of 27.40% significantly outperformed against the industry average.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Commercial Banks industry and the overall market, COLUMBIA BANKING SYSTEM INC's return on equity is below that of both the industry average and the S&P 500.

Columbia Banking System, Inc. operates as the bank holding company for Columbia State Bank, which provides a range of banking products and services to small and medium-sized businesses, professionals, and individuals in the states of Washington and Oregon. The company has a P/E ratio of 22.7, above the average banking industry P/E ratio of 21.6 and above the S&P 500 P/E ratio of 17.7. Columbia Banking System has a market cap of $658.4 million and is part of the financial sector and banking industry. Shares are down 10.9% year to date as of the close of trading on Friday.

You can view the full Columbia Banking System Ratings Report or get investment ideas from our investment research center.
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