0000887343false00008873432024-07-252024-07-25
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report: July 25, 2024
(Date of earliest event reported)
Columbia Banking System, Inc.
(Exact Name of Registrant as Specified in Its Charter)
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| Washington | 000-20288 | 91-1422237 |
(State or Other Jurisdiction of Incorporation or Organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
1301 A Street
Tacoma, Washington 98402-2156
(address of Principal Executive Offices)(Zip Code)
(253) 305-1900
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ☐ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ☐ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ☐ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ☐ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | |
| TITLE OF EACH CLASS | TRADING SYMBOL | NAME OF EXCHANGE |
| Common Stock, No Par Value | COLB | The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ☐ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
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| Item 2.02 | Results of Operations and Financial Condition. |
On July 25, 2024, Columbia Banking System, Inc. issued a press release announcing second quarter 2024 financial results. The release is attached hereto as Exhibit 99.1. The information included in the press release is considered to be "furnished" under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Columbia Banking System, Inc. will include final financial statements and additional analyses for the quarter ended June 30, 2024 as part of its quarterly report on Form 10-Q covering that period.
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| Item 7.01 | Regulation FD Disclosure. |
Columbia Banking System, Inc. is filing an investor slide presentation that it intends to review in conjunction with its earnings release conference call on July 25, 2024. The slides are included as Exhibit 99.2 to this report and shall not be deemed to be "filed" for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
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| Item 9.01 | Financial Statements and Exhibits. |
| (d) | EXHIBITS |
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| 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| | Columbia Banking System, Inc. (Registrant) |
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Dated: July 25, 2024 | By: /s/ Ronald L. Farnsworth Ronald L. Farnsworth Executive Vice President/Chief Financial Officer |
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COLUMBIA BANKING SYSTEM, INC. REPORTS SECOND QUARTER 2024 RESULTS |
| $120 million | | $140 million | | $0.57 | | $0.67 |
| Net income | | Operating net income 1 | | Earnings per diluted common share | | Operating earnings per diluted common share 1 |
0 | | |
| CEO Commentary |
"Our second quarter results reflect continued progress on our targeted actions to improve our financial performance and drive shareholder value,” said Clint Stein, President and CEO. "The successful execution of identified changes following enterprise-wide evaluations resulted in a lower recurring expense run rate and increased stabilization in the cost of customer deposits during the second quarter. While we are encouraged by the early success of our near-term initiatives, we have not diminished our laser focus on regaining Columbia's placement as a top-performing bank across financial metrics. Longer-term initiatives will further enhance our growth and profitability as we strive toward long-term, consistent, repeatable performance." |
–Clint Stein, President and CEO of Columbia Banking System, Inc. |
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2Q24 HIGHLIGHTS (COMPARED TO 1Q24) | |
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| Net Interest Income and NIM | •Net interest income expanded by $4 million on a linked-quarter basis due to higher income earned on loans and investment securities, including increased accretion income, partially offset by higher deposit costs. | |
•Net interest margin was 3.56%, up 4 basis points from the prior quarter as the increase in earning asset yields outpaced the increase in the cost of interest-bearing liabilities given targeted actions taken to stabilize the cost of customer deposits. | |
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| Non-Interest Income and Expense | •Non-interest income decreased by $6 million due to the quarterly fluctuation in cumulative fair value accounting and hedges. Excluding these items, non-interest income was stable. | |
•Non-interest expense decreased by $8 million due to lower compensation and CDI amortization, modest decreases in other categories, and the first quarter's larger FDIC special assessment. The effect was partially offset by restructuring expense. | |
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| Credit Quality | •Net charge-offs were 0.32% of average loans and leases (annualized), compared to 0.47% in the prior quarter. | |
•Provision expense of $32 million compares to $17 million in the prior quarter, which benefited from the recalibration of the commercial CECL model. | |
•Non-performing assets to total assets was 0.30%, compared to 0.28% as of March 31, 2024. | |
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| Capital | •Estimated total risk-based capital ratio of 12.1% and estimated common equity tier 1 risk-based capital ratio of 9.9%. | |
•Declared a quarterly cash dividend of $0.36 per common share on May 13, 2024, which was paid June 10, 2024. | |
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| Notable Items | •Substantially completed our announced near-term initiatives related to operational effectiveness. | |
•Opened our first retail location in Phoenix, Arizona and our first Financial Hub in Southern California, replacing an existing branch. | |
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2Q24 KEY FINANCIAL DATA |
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| PERFORMANCE METRICS | 2Q24 | | 1Q24 | | 2Q23 |
| Return on average assets | 0.93% | | 0.96% | | 1.00% |
| Return on average common equity | 9.85% | | 10.01% | | 10.84% |
Return on average tangible common equity 1 | 14.55% | | 14.82% | | 16.63% |
Operating return on average assets 1 | 1.08% | | 1.04% | | 1.27% |
Operating return on average common equity 1 | 11.47% | | 10.89% | | 13.77% |
Operating return on average tangible common equity 1 | 16.96% | | 16.12% | | 21.13% |
| Net interest margin | 3.56% | | 3.52% | | 3.93% |
| Efficiency ratio | 59.02% | | 60.57% | | 62.60% |
Operating efficiency ratio, as adjusted 1 | 53.56% | | 56.97% | | 54.04% |
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INCOME STATEMENT ($ in 000s, excl. per share data) | 2Q24 | | 1Q24 | | 2Q23 |
| Net interest income | $427,449 | | $423,362 | | $483,975 |
| Provision for credit losses | $31,820 | | $17,136 | | $16,014 |
| Non-interest income | $44,703 | | $50,357 | | $39,678 |
| Non-interest expense | $279,244 | | $287,516 | | $328,559 |
Pre-provision net revenue 1 | $192,908 | | $186,203 | | $195,094 |
Operating pre-provision net revenue 1 | $219,390 | | $200,683 | | $243,114 |
| Earnings per common share - diluted | $0.57 | | $0.59 | | $0.64 |
Operating earnings per common share - diluted 1 | $0.67 | | $0.65 | | $0.81 |
| Dividends paid per share | $0.36 | | $0.36 | | $0.36 |
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| BALANCE SHEET | 2Q24 | | 1Q24 | | 2Q23 |
| Total assets | $52.0 | B | | $52.2 | B | | $53.6 | B |
| Loans and leases | $37.7 | B | | $37.6 | B | | $37.0 | B |
| Deposits | $41.5 | B | | $41.7 | B | | $40.8 | B |
| Book value per common share | $23.76 | | $23.68 | | $23.16 |
Tangible book value per share 1 | $16.26 | | $16.03 | | $15.02 |
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Investor Contact
Jacquelynne "Jacque" Bohlen, SVP/Investor Relations Director, 503-727-4117, jacquebohlen@umpquabank.com
1 "Non-GAAP" financial measure. See GAAP to Non-GAAP Reconciliation for additional information.
Columbia Banking System, Inc. Reports Second Quarter 2024 Results
July 25, 2024
Page 2
Organizational Update
Columbia Banking System, Inc. ("Columbia," the "Company," "we," or "our") completed an enterprise-wide evaluation of our operations during the first quarter of 2024. The full-scale review resulted in consolidated positions, simplified reporting and organizational structures, and an improved profitability outlook. Through June 30, 2024, 91% of the identified cost savings have been realized, and we expect to carry out the remaining actions during the third quarter of 2024. Please refer to the Q2 2024 Earnings Presentation for additional details.
Columbia's primary subsidiary, Umpqua Bank ("Umpqua"), opened its first retail location in Phoenix, Arizona and its first Financial Hub in Southern California, replacing an existing branch. Umpqua has closed four branches on a net basis during 2024 as strategic consolidations offset new locations in targeted growth markets.
On February 28, 2023, Columbia completed its merger with Umpqua Holdings Corporation ("UHC"), combining the two premier banks in the Northwest to create one of the largest banks headquartered in the West (the "merger"). Columbia's financial results for any periods ended prior to February 28, 2023 reflect UHC results only on a standalone basis. In addition, Columbia's reported financial results for the six months ended June 30, 2023 reflect UHC financial results only until the closing of the merger after the close of business on February 28, 2023. As a result of these two factors, Columbia's financial results for the six months ended June 30, 2024 may not be directly comparable to prior reported periods. Under the reverse acquisition method of accounting, the assets and liabilities of Columbia as of February 28, 2023 ("historical Columbia") were recorded at their respective fair values.
Net Interest Income
Net interest income was $427 million for the second quarter of 2024, up $4 million from the prior quarter. The increase reflects higher income earned on loans and investment securities, including accretion income, and lower borrowing costs. The favorable change was only partially offset by higher deposit costs as targeted pricing actions limited the increase in Columbia's cost of interest-bearing deposits.
Columbia's net interest margin was 3.56% for the second quarter of 2024, up 4 basis points from 3.52% for the first quarter of 2024. The expansion was driven by higher yields on loans and investment securities, including the benefit of accretion income, which offset a modest increase in the cost of interest-bearing deposits following a comprehensive review undertaken during the first quarter of 2024 related to how Columbia evaluates and approves deposit pricing. The cost of interest-bearing deposits increased 9 basis points on a linked-quarter basis, and was 2.97% for both the three months ended June 30, 2024 and as of June 30, 2024, which compares to 3.00% for the month of June. "Actions taken during the first quarter resulted in enhanced pricing visibility, which contributed to stability in interest-bearing core deposit rates during the second quarter," commented Chris Merrywell, President of Umpqua Bank. "Our teams have done an exceptional job leading with service, not price, as they meet with current and prospective customers."
Columbia's cost of interest-bearing liabilities increased 6 basis points on a linked-quarter basis, and was 3.31% for both the three months ended June 30, 2024 and as of June 30, 2024, which compares to 3.34% for the month of June. Please refer to the Q2 2024 Earnings Presentation for additional net interest margin change details and interest rate sensitivity information as well as to our non-GAAP disclosures in this press release for the impact of purchase accounting accretion and amortization on individual line items.
Non-interest Income
Non-interest income was $45 million for the second quarter of 2024, down $6 million from the prior quarter. The decline was driven by quarterly fluctuations in fair value adjustments and mortgage servicing rights ("MSR") hedging activity, which collectively resulted in a net fair value loss of $10 million in the second quarter compared to a net fair value loss of $4 million in the first quarter, as detailed in our non-GAAP disclosures. Excluding these items, non-interest income was stable between periods, with favorable trends in card activity, financial services and trust revenue, and mortgage banking.
Non-interest Expense
Non-interest expense was $279 million for the second quarter of 2024, down $8 million from the prior quarter level. Excluding merger and restructuring expense, exit and disposal costs, and accruals for the FDIC special assessment, non-interest expense was $263 million2, down $14 million from the prior quarter due to ongoing strategic actions taken to reduce our non-interest expense run rate, lower CDI amortization following the one-year anniversary of the merger, and a $7.7 million reversal of prior compensation-related accruals. Please refer to the Q2 2024 Earnings Presentation for additional expense details.
2 "Non-GAAP" financial measure. See GAAP to Non-GAAP Reconciliation for additional information.
Columbia Banking System, Inc. Reports Second Quarter 2024 Results
July 25, 2024
Page 3
Balance Sheet
Total consolidated assets were $52.0 billion as of June 30, 2024, down slightly from $52.2 billion as of March 31, 2024. Cash and cash equivalents were $2.1 billion as of June 30, 2024, also down slightly from $2.2 billion as of March 31, 2024. Including secured off-balance sheet lines of credit, total available liquidity was $19.1 billion as of June 30, 2024, representing 37% of total assets, 46% of total deposits, and 140% of uninsured deposits. Available-for-sale securities, which are held on balance sheet at fair value, were $8.5 billion as of June 30, 2024, a decrease of $114 million relative to March 31, 2024, due to paydowns and a decline in the fair value of the portfolio. Please refer to the Q2 2024 Earnings Presentation for additional details related to our securities portfolio and liquidity position.
Gross loans and leases were $37.7 billion as of June 30, 2024, an increase of $68 million relative to March 31, 2024. Columbia sold loans with a book balance of $95 million during the second quarter of 2024, including $80 million in residential mortgage loans held on the balance sheet at fair value. Excluding these actions, the loan portfolio increased by 2% on an annualized basis during the quarter due primarily to commercial line utilization and construction project activity. Please refer to the Q2 2024 Earnings Presentation for additional details related to our loan portfolio, which include underwriting characteristics, the composition of our commercial portfolios, and disclosure related to our office portfolio.
Total deposits were $41.5 billion as of June 30, 2024, a decrease of $183 million relative to March 31, 2024. Customer deposits drove the quarter's decrease due in part to anticipated customer tax payments, partially offset by targeted campaigns run by our branch network. "Our teams wrapped up a successful small business account campaign in April, generating nearly 6,000 accounts and $345 million in new deposits to the bank, 27% of which were non-interest-bearing balances," stated Mr. Merrywell. "We use a collaborative approach to find needs-based solutions for our customers—and these campaigns do not include promotional pricing." Please refer to the Q2 2024 Earnings Presentation for additional details related to deposit characteristics and flows.
Credit Quality
The allowance for credit losses was $439 million, or 1.16% of loans and leases, essentially unchanged from March 31, 2024. The provision for credit losses was $32 million for the second quarter of 2024, and it reflects credit migration trends and changes in the economic forecasts used in credit models.
Net charge-offs were 0.32% of average loans and leases (annualized) for the second quarter of 2024, compared to 0.47% for the first quarter of 2024. Net charge-offs in the FinPac portfolio were $25 million in the second quarter, largely unchanged from the first quarter. Net charge-offs excluding the FinPac portfolio were only $6 million in the second quarter. As of June 30, 2024, non-accrual loans were $93 million compared to $99 million as of March 31, 2024, due to lower balances in commercial portfolios. Non-performing assets were $156 million, or 0.30% of total assets, as of June 30, 2024, compared to $144 million, or 0.28% of total assets, as of March 31, 2024. The quarter's increase in loans and leases past due 90+ days and accruing, which accounted for the increase in nonperforming assets, was driven in part by the expiration of COVID-related designations within the residential mortgage portfolio. After accounting for government guarantees, non-performing assets declined by $9 million during the second quarter due primarily to lower balances in the FinPac portfolio. Please refer to the Q2 2024 Earnings Presentation for additional details related to the allowance for credit losses and other credit trends.
Capital
Columbia's book value per common share was $23.76 as of June 30, 2024, compared to $23.68 as of March 31, 2024. The linked-quarter change reflects organic net capital generation, partially offset by a change in accumulated other comprehensive (loss) income ("AOCI") to $(456) million at June 30, 2024, compared to $(426) million at the prior quarter-end. The change in AOCI is due primarily to an increase in the tax-effected net unrealized loss on available-for-sale securities to $442 million as of June 30, 2024, compared to $413 million as of March 31, 2024. Tangible book value per common share3 was $16.26 as of June 30, 2024, compared to $16.03 as of March 31, 2024.
Columbia's estimated total risk-based capital ratio was 12.1% and its estimated common equity tier 1 risk-based capital ratio was 9.9% as of June 30, 2024, compared to 12.0% and 9.8%, respectively, as of March 31, 2024. Columbia remains above current “well-capitalized” regulatory minimums. The regulatory capital ratios as of June 30, 2024 are estimates, pending completion and filing of Columbia's regulatory reports.
3 "Non-GAAP" financial measure. See GAAP to Non-GAAP Reconciliation for additional information.
Columbia Banking System, Inc. Reports Second Quarter 2024 Results
July 25, 2024
Page 4
Earnings Presentation and Conference Call Information
Columbia's Q2 2024 Earnings Presentation provides additional disclosure. A copy will be available on our investor relations page: www.columbiabankingsystem.com.
Columbia will host its second quarter 2024 earnings conference call on July 25, 2024, at 2:00 p.m. PT (5:00 p.m. ET). During the call, Columbia's management will provide an update on recent activities and discuss its second quarter 2024 financial results. Participants may register for the call using the below link to receive dial-in details and their own unique PINs or join the audiocast. It is recommended you join 10 minutes prior to the start time.
Register for the call: https://register.vevent.com/register/BIdb1fd24ce3994192abaccb701c2ce451
Join the audiocast: https://edge.media-server.com/mmc/p/tog4rq49/
Access the replay through Columbia's investor relations page: www.columbiabankingsystem.com
About Columbia Banking System, Inc.
Columbia (Nasdaq: COLB) is headquartered in Tacoma, Washington and is the parent company of Umpqua Bank, an award-winning western U.S. regional bank based in Lake Oswego, Oregon. Umpqua Bank is the largest bank headquartered in the Northwest and one of the largest banks headquartered in the West with locations in Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah, and Washington. With over $50 billion of assets, Umpqua Bank combines the resources, sophistication and expertise of a national bank with a commitment to deliver superior, personalized service. The bank supports consumers and businesses through a full suite of services, including retail and commercial banking; Small Business Administration lending; institutional and corporate banking; and equipment leasing. Umpqua Bank customers also have access to comprehensive investment and wealth management expertise as well as healthcare and private banking through Columbia Wealth Advisors and Columbia Trust Company, a division of Umpqua Bank. Learn more at www.columbiabankingsystem.com.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to various risk factors, including those set forth from time to time in our filings with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "target," "projects," "outlook," "forecast," "will," "may," "could," "should," "can" and similar references to future periods. In this press release we make forward-looking statements about strategic and growth initiatives and the result of such activity. Risks and uncertainties that could cause results to differ from forward-looking statements we make include, without limitation: current and future economic and market conditions, including the effects of declines in housing and commercial real estate prices, high unemployment rates, continued inflation and any recession or slowdown in economic growth particularly in the western United States; economic forecast variables that are either materially worse or better than end of quarter projections and deterioration in the economy that could result in increased loan and lease losses, especially those risks associated with concentrations in real estate related loans; our ability to effectively manage problem credits; the impact of bank failures or adverse developments at other banks on general investor sentiment regarding the liquidity and stability of banks; changes in interest rates that could significantly reduce net interest income and negatively affect asset yields and valuations and funding sources; changes in the scope and cost of FDIC insurance and other coverage; our ability to successfully implement efficiency and operational excellence initiatives; our ability to successfully develop and market new products and technology; changes in laws or regulations; any failure to realize the anticipated benefits of the merger when expected or at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the merger and integration of the companies; the effect of geopolitical instability, including wars, conflicts and terrorist attacks; and natural disasters and other similar unexpected events outside of our control. We also caution that the amount and timing of any future common stock dividends or repurchases will depend on the earnings, cash requirements and financial condition of Columbia, market conditions, capital requirements, applicable law and regulations (including federal securities laws and federal banking regulations), and other factors deemed relevant by Columbia's Board of Directors, and may be subject to regulatory approval or conditions.
Columbia Banking System, Inc. Reports Second Quarter 2024 Results
July 25, 2024
Page 5
Columbia Banking System, Inc. Reports Second Quarter 2024 Results
July 25, 2024
Page 6
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| Columbia Banking System, Inc. |
| Consolidated Statements of Income |
| (Unaudited) |
| | Quarter Ended | | % Change |
| ($ in thousands, except per share data) | Jun 30, 2024 | | Mar 31, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Seq.
Quarter | | Year over Year |
| Interest income: | | | | | | | | | | | | | |
| Loans and leases | $ | 583,874 | | | $ | 575,044 | | | $ | 577,741 | | | $ | 569,670 | | | $ | 552,679 | | | 2 | % | | 6 | % |
| Interest and dividends on investments: | | | | | | | | | | | | | |
| Taxable | 78,828 | | | 75,017 | | | 78,010 | | | 80,066 | | | 79,036 | | | 5 | % | | — | % |
| Exempt from federal income tax | 6,904 | | | 6,904 | | | 6,966 | | | 6,929 | | | 6,817 | | | — | % | | 1 | % |
| Dividends | 2,895 | | | 3,707 | | | 4,862 | | | 4,941 | | | 2,581 | | | (22) | % | | 12 | % |
| Temporary investments and interest bearing deposits | 23,035 | | | 23,553 | | | 24,055 | | | 34,407 | | | 34,616 | | | (2) | % | | (33) | % |
| Total interest income | 695,536 | | | 684,225 | | | 691,634 | | | 696,013 | | | 675,729 | | | 2 | % | | 3 | % |
| Interest expense: | | | | | | | | | | | | | |
| Deposits | 207,307 | | | 198,435 | | | 170,659 | | | 126,974 | | | 100,408 | | | 4 | % | | 106 | % |
| Securities sold under agreement to repurchase and federal funds purchased | 1,515 | | | 1,266 | | | 1,226 | | | 1,220 | | | 1,071 | | | 20 | % | | 41 | % |
| Borrowings | 49,418 | | | 51,275 | | | 56,066 | | | 77,080 | | | 81,004 | | | (4) | % | | (39) | % |
| Junior and other subordinated debentures | 9,847 | | | 9,887 | | | 10,060 | | | 9,864 | | | 9,271 | | | — | % | | 6 | % |
| Total interest expense | 268,087 | | | 260,863 | | | 238,011 | | | 215,138 | | | 191,754 | | | 3 | % | | 40 | % |
| Net interest income | 427,449 | | | 423,362 | | | 453,623 | | | 480,875 | | | 483,975 | | | 1 | % | | (12) | % |
| Provision for credit losses | 31,820 | | | 17,136 | | | 54,909 | | | 36,737 | | | 16,014 | | | 86 | % | | 99 | % |
| Non-interest income: | | | | | | | | | | | | | |
| Service charges on deposits | 18,503 | | | 16,064 | | | 17,349 | | | 17,410 | | | 16,454 | | | 15 | % | | 12 | % |
| Card-based fees | 14,681 | | | 13,183 | | | 14,593 | | | 15,674 | | | 13,435 | | | 11 | % | | 9 | % |
| Financial services and trust revenue | 5,396 | | | 4,464 | | | 3,011 | | | 4,651 | | | 4,512 | | | 21 | % | | 20 | % |
| Residential mortgage banking revenue (loss), net | 5,848 | | | 4,634 | | | 4,212 | | | 7,103 | | | (2,342) | | | 26 | % | | nm |
| (Loss) gain on sale of debt securities, net | (1) | | | 12 | | | 9 | | | 4 | | | — | | | (108) | % | | nm |
| Gain (loss) on equity securities, net | 325 | | | (1,565) | | | 2,636 | | | (2,055) | | | (697) | | | nm | | nm |
| (Loss) gain on loan and lease sales, net | (1,516) | | | 221 | | | 1,161 | | | 1,871 | | | 442 | | | nm | | (443) | % |
| BOLI income | 4,705 | | | 4,639 | | | 4,331 | | | 4,440 | | | 4,063 | | | 1 | % | | 16 | % |
| Other (loss) income | (3,238) | | | 8,705 | | | 18,231 | | | (5,117) | | | 3,811 | | | (137) | % | | (185) | % |
| Total non-interest income | 44,703 | | | 50,357 | | | 65,533 | | | 43,981 | | | 39,678 | | | (11) | % | | 13 | % |
| Non-interest expense: | | | | | | | | | | | | | |
| Salaries and employee benefits | 145,066 | | | 154,538 | | | 157,572 | | | 159,041 | | | 163,398 | | | (6) | % | | (11) | % |
| Occupancy and equipment, net | 45,147 | | | 45,291 | | | 48,160 | | | 43,070 | | | 50,550 | | | — | % | | (11) | % |
| Intangible amortization | 29,230 | | | 32,091 | | | 33,204 | | | 29,879 | | | 35,553 | | | (9) | % | | (18) | % |
| FDIC assessments | 9,664 | | | 14,460 | | | 42,510 | | | 11,200 | | | 11,579 | | | (33) | % | | (17) | % |
| Merger and restructuring expense | 14,641 | | | 4,478 | | | 7,174 | | | 18,938 | | | 29,649 | | | 227 | % | | (51) | % |
| Other expenses | 35,496 | | | 36,658 | | | 48,556 | | | 42,019 | | | 37,830 | | | (3) | % | | (6) | % |
| Total non-interest expense | 279,244 | | | 287,516 | | | 337,176 | | | 304,147 | | | 328,559 | | | (3) | % | | (15) | % |
| Income before provision for income taxes | 161,088 | | | 169,067 | | | 127,071 | | | 183,972 | | | 179,080 | | | (5) | % | | (10) | % |
| Provision for income taxes | 40,944 | | | 44,987 | | | 33,540 | | | 48,127 | | | 45,703 | | | (9) | % | | (10) | % |
| Net income | $ | 120,144 | | | $ | 124,080 | | | $ | 93,531 | | | $ | 135,845 | | | $ | 133,377 | | | (3) | % | | (10) | % |
| | | | | | | | | | | | | |
| Weighted average basic shares outstanding | 208,498 | | | 208,260 | | | 208,083 | | | 208,070 | | | 207,977 | | | — | % | | — | % |
| Weighted average diluted shares outstanding | 209,011 | | | 208,956 | | | 208,739 | | | 208,645 | | | 208,545 | | | — | % | | — | % |
| Earnings per common share – basic | $ | 0.58 | | | $ | 0.60 | | | $ | 0.45 | | | $ | 0.65 | | | $ | 0.64 | | | (3) | % | | (9) | % |
| Earnings per common share – diluted | $ | 0.57 | | | $ | 0.59 | | | $ | 0.45 | | | $ | 0.65 | | | $ | 0.64 | | | (3) | % | | (11) | % |
| | | | | | | | | | | | | |
| nm = Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm." |
Columbia Banking System, Inc. Reports Second Quarter 2024 Results
July 25, 2024
Page 7
| | | | | | | | | | | | | | | | | | | | |
| Columbia Banking System, Inc. |
| Consolidated Statements of Income |
| (Unaudited) |
| | | Six Months Ended | | % Change |
| ($ in thousands, except per share data) | | Jun 30, 2024 | | Jun 30, 2023 | | Year over Year |
| Interest income: | | | | | | |
| Loans and leases | | $ | 1,158,918 | | | $ | 966,204 | | | 20 | % |
| Interest and dividends on investments: | | | | | | |
| Taxable | | 153,845 | | | 118,765 | | | 30 | % |
| Exempt from federal income tax | | 13,808 | | | 10,214 | | | 35 | % |
| Dividends | | 6,602 | | | 3,300 | | | 100 | % |
| Temporary investments and interest bearing deposits | | 46,588 | | | 53,197 | | | (12) | % |
| Total interest income | | 1,379,761 | | | 1,151,680 | | | 20 | % |
| Interest expense: | | | | | | |
| Deposits | | 405,742 | | | 164,021 | | | 147 | % |
| Securities sold under agreement to repurchase and federal funds purchased | | 2,781 | | | 1,477 | | | 88 | % |
| Borrowings | | 100,693 | | | 109,768 | | | (8) | % |
| Junior and other subordinated debentures | | 19,734 | | | 17,741 | | | 11 | % |
| Total interest expense | | 528,950 | | | 293,007 | | | 81 | % |
| Net interest income | | 850,811 | | | 858,673 | | | (1) | % |
| Provision for credit losses | | 48,956 | | | 121,553 | | | (60) | % |
| Non-interest income: | | | | | | |
| Service charges on deposits | | 34,567 | | | 30,766 | | | 12 | % |
| Card-based fees | | 27,864 | | | 24,996 | | | 11 | % |
| Financial services and trust revenue | | 9,860 | | | 5,809 | | | 70 | % |
| Residential mortgage banking revenue, net | | 10,482 | | | 5,474 | | | 91 | % |
| Gain on sale of debt securities, net | | 11 | | | — | | | nm |
| (Loss) gain on equity securities, net | | (1,240) | | | 1,719 | | | (172) | % |
| (Loss) gain on loan and lease sales, net | | (1,295) | | | 1,382 | | | (194) | % |
| BOLI income | | 9,344 | | | 6,853 | | | 36 | % |
| Other income | | 5,467 | | | 17,414 | | | (69) | % |
| Total non-interest income | | 95,060 | | | 94,413 | | | 1 | % |
| Non-interest expense: | | | | | | |
| Salaries and employee benefits | | 299,604 | | | 299,490 | | | — | % |
| Occupancy and equipment, net | | 90,438 | | | 92,250 | | | (2) | % |
| Intangible amortization | | 61,321 | | | 48,213 | | | 27 | % |
| FDIC assessments | | 24,124 | | | 17,692 | | | 36 | % |
| Merger and restructuring expense | | 19,119 | | | 145,547 | | | (87) | % |
| Other expenses | | 72,154 | | | 68,185 | | | 6 | % |
| Total non-interest expense | | 566,760 | | | 671,377 | | | (16) | % |
| Income before provision for income taxes | | 330,155 | | | 160,156 | | | 106 | % |
| Provision for income taxes | | 85,931 | | | 40,817 | | | 111 | % |
| Net income | | $ | 244,224 | | | $ | 119,339 | | | 105 | % |
| | | | | | |
| Weighted average basic shares outstanding | | 208,379 | | | 182,325 | | | 14 | % |
| Weighted average diluted shares outstanding | | 208,999 | | | 182,860 | | | 14 | % |
| Earnings per common share – basic | | $ | 1.17 | | | $ | 0.65 | | | 80 | % |
| Earnings per common share – diluted | | $ | 1.17 | | | $ | 0.65 | | | 80 | % |
| | | | | | |
| nm = Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm." |
Columbia Banking System, Inc. Reports Second Quarter 2024 Results
July 25, 2024
Page 8
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Columbia Banking System, Inc. |
| Consolidated Balance Sheets |
| (Unaudited) |
| | | | | | | | | | | | % Change |
| ($ in thousands, except per share data) | Jun 30, 2024 | | Mar 31, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Seq.
Quarter | | Year over Year |
| Assets: | | | | | | | | | | | | | |
| Cash and due from banks | $ | 515,263 | | | $ | 440,215 | | | $ | 498,496 | | | $ | 492,474 | | | $ | 538,653 | | | 17 | % | | (4) | % |
| Interest-bearing cash and temporary investments | 1,553,568 | | | 1,760,902 | | | 1,664,038 | | | 1,911,221 | | | 2,868,563 | | | (12) | % | | (46) | % |
| Investment securities: | | | | | | | | | | | | | |
| Equity and other, at fair value | 77,221 | | | 77,203 | | | 76,995 | | | 73,638 | | | 76,361 | | | — | % | | 1 | % |
| Available for sale, at fair value | 8,503,000 | | | 8,616,545 | | | 8,829,870 | | | 8,503,986 | | | 8,998,428 | | | (1) | % | | (6) | % |
| Held to maturity, at amortized cost | 2,203 | | | 2,247 | | | 2,300 | | | 2,344 | | | 2,388 | | | (2) | % | | (8) | % |
| Loans held for sale | 56,310 | | | 47,201 | | | 30,715 | | | 60,313 | | | 183,633 | | | 19 | % | | (69) | % |
| Loans and leases | 37,709,987 | | | 37,642,413 | | | 37,441,951 | | | 37,170,598 | | | 37,049,299 | | | — | % | | 2 | % |
| Allowance for credit losses on loans and leases | (418,671) | | | (414,344) | | | (440,871) | | | (416,560) | | | (404,603) | | | 1 | % | | 3 | % |
| Net loans and leases | 37,291,316 | | | 37,228,069 | | | 37,001,080 | | | 36,754,038 | | | 36,644,696 | | | — | % | | 2 | % |
| Restricted equity securities | 116,274 | | | 116,274 | | | 179,274 | | | 168,524 | | | 258,524 | | | — | % | | (55) | % |
| Premises and equipment, net | 337,842 | | | 336,869 | | | 338,970 | | | 337,855 | | | 368,698 | | | — | % | | (8) | % |
| Operating lease right-of-use assets | 108,278 | | | 113,833 | | | 115,811 | | | 114,220 | | | 119,255 | | | (5) | % | | (9) | % |
| Goodwill | 1,029,234 | | | 1,029,234 | | | 1,029,234 | | | 1,029,234 | | | 1,029,234 | | | — | % | | — | % |
| Other intangible assets, net | 542,358 | | | 571,588 | | | 603,679 | | | 636,883 | | | 666,762 | | | (5) | % | | (19) | % |
| Residential mortgage servicing rights, at fair value | 110,039 | | | 110,444 | | | 109,243 | | | 117,640 | | | 172,929 | | | — | % | | (36) | % |
| Bank-owned life insurance | 686,485 | | | 682,293 | | | 680,948 | | | 648,232 | | | 643,727 | | | 1 | % | | 7 | % |
| Deferred tax asset, net | 361,773 | | | 356,031 | | | 347,203 | | | 469,841 | | | 362,880 | | | 2 | % | | — | % |
| Other assets | 756,319 | | | 735,058 | | | 665,740 | | | 673,372 | | | 657,365 | | | 3 | % | | 15 | % |
| Total assets | $ | 52,047,483 | | | $ | 52,224,006 | | | $ | 52,173,596 | | | $ | 51,993,815 | | | $ | 53,592,096 | | | — | % | | (3) | % |
| Liabilities: | | | | | | | | | | | | | |
| Deposits | | | | | | | | | | | | | |
| Non-interest-bearing | $ | 13,481,616 | | | $ | 13,808,554 | | | $ | 14,256,452 | | | $ | 15,532,948 | | | $ | 16,019,408 | | | (2) | % | | (16) | % |
| Interest-bearing | 28,041,656 | | | 27,897,606 | | | 27,350,568 | | | 26,091,420 | | | 24,815,509 | | | 1 | % | | 13 | % |
| Total deposits | 41,523,272 | | | 41,706,160 | | | 41,607,020 | | | 41,624,368 | | | 40,834,917 | | | — | % | | 2 | % |
| Securities sold under agreements to repurchase | 197,860 | | | 213,573 | | | 252,119 | | | 258,383 | | | 294,914 | | | (7) | % | | (33) | % |
| Borrowings | 3,900,000 | | | 3,900,000 | | | 3,950,000 | | | 3,985,000 | | | 6,250,000 | | | — | % | | (38) | % |
| Junior subordinated debentures, at fair value | 310,187 | | | 309,544 | | | 316,440 | | | 331,545 | | | 312,872 | | | — | % | | (1) | % |
| Junior and other subordinated debentures, at amortized cost | 107,781 | | | 107,838 | | | 107,895 | | | 107,952 | | | 108,009 | | | — | % | | — | % |
| Operating lease liabilities | 123,082 | | | 129,240 | | | 130,576 | | | 129,845 | | | 132,099 | | | (5) | % | | (7) | % |
| | | | | | | | | | | | | |
| Other liabilities | 908,629 | | | 900,406 | | | 814,512 | | | 924,560 | | | 831,097 | | | 1 | % | | 9 | % |
| Total liabilities | 47,070,811 | | | 47,266,761 | | | 47,178,562 | | | 47,361,653 | | | 48,763,908 | | | — | % | | (3) | % |
| Shareholders' equity: | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Common stock | 5,807,041 | | | 5,802,322 | | | 5,802,747 | | | 5,798,167 | | | 5,792,792 | | | — | % | | — | % |
| Accumulated deficit | (374,687) | | | (418,946) | | | (467,571) | | | (485,576) | | | (545,842) | | | (11) | % | | (31) | % |
| Accumulated other comprehensive loss | (455,682) | | | (426,131) | | | (340,142) | | | (680,429) | | | (418,762) | | | 7 | % | | 9 | % |
| Total shareholders' equity | 4,976,672 | | | 4,957,245 | | | 4,995,034 | | | 4,632,162 | | | 4,828,188 | | | — | % | | 3 | % |
| Total liabilities and shareholders' equity | $ | 52,047,483 | | | $ | 52,224,006 | | | $ | 52,173,596 | | | $ | 51,993,815 | | | $ | 53,592,096 | | | — | % | | (3) | % |
| | | | | | | | | | | | | |
| Common shares outstanding at period end | 209,459 | | | 209,370 | | | 208,585 | | | 208,575 | | | 208,514 | | | — | % | | — | % |
| | | | | | | | | | | | | |
|
Columbia Banking System, Inc. Reports Second Quarter 2024 Results
July 25, 2024
Page 9
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Columbia Banking System, Inc. |
| Financial Highlights |
| (Unaudited) |
| | | Quarter Ended | | % Change |
| | | Jun 30, 2024 | | Mar 31, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Seq. Quarter | | Year over Year |
Per Common Share Data: | | | | | | | | | | | | | | |
| Dividends | | $ | 0.36 | | | $ | 0.36 | | | $ | 0.36 | | | $ | 0.36 | | | $ | 0.36 | | | — | % | | — | % |
| Book value | | $ | 23.76 | | | $ | 23.68 | | | $ | 23.95 | | | $ | 22.21 | | | $ | 23.16 | | | — | % | | 3 | % |
Tangible book value (1) | | $ | 16.26 | | | $ | 16.03 | | | $ | 16.12 | | | $ | 14.22 | | | $ | 15.02 | | | 1 | % | | 8 | % |
| | | | | | | | | | | | | | |
| Performance Ratios: | | | | | | | | | | | | | | |
Efficiency ratio (2) | | 59.02 | % | | 60.57 | % | | 64.81 | % | | 57.82 | % | | 62.60 | % | | (1.55) | | | (3.58) | |
Non-interest expense to average assets (1) | | 2.16 | % | | 2.22 | % | | 2.58 | % | | 2.28 | % | | 2.46 | % | | (0.06) | | | (0.30) | |
| Return on average assets ("ROAA") | | 0.93 | % | | 0.96 | % | | 0.72 | % | | 1.02 | % | | 1.00 | % | | (0.03) | | | (0.07) | |
Pre-provision net revenue ("PPNR") ROAA (1) | | 1.49 | % | | 1.44 | % | | 1.39 | % | | 1.65 | % | | 1.46 | % | | 0.05 | | | 0.03 | |
| Return on average common equity | | 9.85 | % | | 10.01 | % | | 7.90 | % | | 11.07 | % | | 10.84 | % | | (0.16) | | | (0.99) | |
Return on average tangible common equity (1) | | 14.55 | % | | 14.82 | % | | 12.19 | % | | 16.93 | % | | 16.63 | % | | (0.27) | | | (2.08) | |
| | | | | | | | | | | | | | |
Performance Ratios - Operating: (1) | | | | | | | | | | | | | | |
Operating efficiency ratio, as adjusted (1), (2), (5), (6) | | 53.56 | % | | 56.97 | % | | 57.31 | % | | 51.26 | % | | 54.04 | % | | (3.41) | | | (0.48) | |
Operating non-interest expense to average assets (1) | | 2.03 | % | | 2.14 | % | | 2.25 | % | | 2.10 | % | | 2.22 | % | | (0.11) | | | (0.19) | |
Operating ROAA (1), (6) | | 1.08 | % | | 1.04 | % | | 0.89 | % | | 1.23 | % | | 1.27 | % | | 0.04 | | | (0.19) | |
Operating PPNR ROAA (1), (6) | | 1.70 | % | | 1.55 | % | | 1.62 | % | | 1.94 | % | | 1.82 | % | | 0.15 | | | (0.12) | |
Operating return on average common equity (1), (6) | | 11.47 | % | | 10.89 | % | | 9.81 | % | | 13.40 | % | | 13.77 | % | | 0.58 | | | (2.30) | |
Operating return on average tangible common equity (1), (6) | | 16.96 | % | | 16.12 | % | | 15.14 | % | | 20.48 | % | | 21.13 | % | | 0.84 | | | (4.17) | |
| | | | | | | | | | | | | | |
| Average Balance Sheet Yields, Rates, & Ratios: | | | | | | | | | | | | | | |
| Yield on loans and leases | | 6.20 | % | | 6.13 | % | | 6.13 | % | | 6.08 | % | | 5.95 | % | | 0.07 | | | 0.25 | |
Yield on earning assets (2) | | 5.80 | % | | 5.69 | % | | 5.75 | % | | 5.65 | % | | 5.48 | % | | 0.11 | | | 0.32 | |
| Cost of interest bearing deposits | | 2.97 | % | | 2.88 | % | | 2.54 | % | | 2.01 | % | | 1.64 | % | | 0.09 | | | 1.33 | |
| Cost of interest bearing liabilities | | 3.31 | % | | 3.25 | % | | 3.02 | % | | 2.72 | % | | 2.45 | % | | 0.06 | | | 0.86 | |
| Cost of total deposits | | 2.01 | % | | 1.92 | % | | 1.63 | % | | 1.23 | % | | 0.99 | % | | 0.09 | | | 1.02 | |
Cost of total funding (3) | | 2.34 | % | | 2.27 | % | | 2.05 | % | | 1.81 | % | | 1.61 | % | | 0.07 | | | 0.73 | |
Net interest margin (2) | | 3.56 | % | | 3.52 | % | | 3.78 | % | | 3.91 | % | | 3.93 | % | | 0.04 | | | (0.37) | |
| Average interest bearing cash / Average interest earning assets | | 3.51 | % | | 3.56 | % | | 3.64 | % | | 5.17 | % | | 5.47 | % | | (0.05) | | | (1.96) | |
| Average loans and leases / Average interest earning assets | | 78.27 | % | | 77.87 | % | | 78.04 | % | | 75.64 | % | | 75.18 | % | | 0.40 | | | 3.09 | |
| Average loans and leases / Average total deposits | | 90.61 | % | | 90.41 | % | | 89.91 | % | | 90.63 | % | | 90.98 | % | | 0.20 | | | (0.37) | |
| Average non-interest bearing deposits / Average total deposits | | 32.54 | % | | 33.29 | % | | 35.88 | % | | 38.55 | % | | 40.05 | % | | (0.75) | | | (7.51) | |
Average total deposits / Average total funding (3) | | 90.15 | % | | 90.09 | % | | 90.02 | % | | 86.66 | % | | 85.59 | % | | 0.06 | | | 4.56 | |
| | | | | | | | | | | | | | |
| Select Credit & Capital Ratios: | | | | | | | | | | | | | | |
Non-performing loans and leases to total loans and leases | | 0.41 | % | | 0.38 | % | | 0.30 | % | | 0.28 | % | | 0.22 | % | | 0.03 | | | 0.19 | |
Non-performing assets to total assets | | 0.30 | % | | 0.28 | % | | 0.22 | % | | 0.20 | % | | 0.15 | % | | 0.02 | | | 0.15 | |
| Allowance for credit losses to loans and leases | | 1.16 | % | | 1.16 | % | | 1.24 | % | | 1.18 | % | | 1.15 | % | | — | | | 0.01 | |
Total risk-based capital ratio (4) | | 12.1 | % | | 12.0 | % | | 11.9 | % | | 11.6 | % | | 11.3 | % | | 0.10 | | | 0.80 | |
Common equity tier 1 risk-based capital ratio (4) | | 9.9 | % | | 9.8 | % | | 9.6 | % | | 9.5 | % | | 9.2 | % | | 0.10 | | | 0.70 | |
| |
(1) See GAAP to Non-GAAP Reconciliation.
(2) Tax-exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.
(3) Total funding = Total deposits + Total borrowings.
(4) Estimated holding company ratios.
(5) The operating efficiency ratio was adjusted in the first quarter of 2024 to remove B&O taxes and for a tax-equivalent adjustment to BOLI income. The Company views the adjusted operating efficiency ratio as a better representation of its efficiency ratio when compared to other banks as it normalizes for the tax treatment of the adjusted items. The adjustment re-aligns Columbia's calculation of its operating efficiency ratio with its pre-merger calculation.
(6) Non-interest expense adjustments were revised subsequent to the Company's reporting of its earnings results for the period ended December 31, 2023. The revision includes adding the FDIC special assessment to the non-interest expense adjustments, which removes the special assessment from the Company's calculation of operating non-interest expense. The Company views the special assessment as an infrequent expense that is outside the control of the Company.
Columbia Banking System, Inc. Reports Second Quarter 2024 Results
July 25, 2024
Page 10
| | | | | | | | | | | | | | | | | | | | |
| Columbia Banking System, Inc. |
| Financial Highlights |
| (Unaudited) |
| | Six Months Ended | | % Change |
| | | Jun 30, 2024 | | Jun 30, 2023 | | Year over Year |
| Per Common Share Data: | | | | | | |
| Dividends | | $ | 0.72 | | | $ | 0.71 | | | 1.41 | % |
| | | | | | |
| Performance Ratios: | | | | | | |
Efficiency ratio (2) | | 59.80 | % | | 70.30 | % | | (10.50) | |
Non-interest expense to average assets (1) | | 2.19 | % | | 2.91 | % | | (0.72) | |
| Return on average assets | | 0.94 | % | | 0.52 | % | | 0.42 | |
PPNR ROAA (1) | | 1.47 | % | | 1.22 | % | | 0.25 | |
| Return on average common equity | | 9.93 | % | | 5.80 | % | | 4.13 | |
Return on average tangible common equity (1) | | 14.69 | % | | 8.09 | % | | 6.60 | |
| | | | | | |
Performance Ratios - Operating: (1) | | | | | | |
Operating efficiency ratio, as adjusted (1), (2), (4), (5) | | 55.26 | % | | 53.51 | % | | 1.75 | |
Operating non-interest expense to average assets (1) | | 2.08 | % | | 2.26 | % | | (0.18) | |
Operating ROAA (1), (5) | | 1.06 | % | | 1.04 | % | | 0.02 | |
Operating PPNR ROAA (1), (5) | | 1.62 | % | | 1.90 | % | | (0.28) | |
Operating return on average common equity (1), (5) | | 11.18 | % | | 11.72 | % | | (0.54) | |
Operating return on average tangible common equity (1), (5) | | 16.54 | % | | 16.34 | % | | 0.20 | |
| | | | | | |
| Average Balance Sheet Yields, Rates, & Ratios: | | | | | | |
| Yield on loans and leases | | 6.17 | % | | 5.77 | % | | 0.40 | |
Yield on earning assets (2) | | 5.75 | % | | 5.35 | % | | 0.40 | |
| Cost of interest bearing deposits | | 2.93 | % | | 1.50 | % | | 1.43 | |
| Cost of interest bearing liabilities | | 3.28 | % | | 2.19 | % | | 1.09 | |
| Cost of total deposits | | 1.96 | % | | 0.90 | % | | 1.06 | |
Cost of total funding (3) | | 2.31 | % | | 1.42 | % | | 0.89 | |
Net interest margin (2) | | 3.54 | % | | 3.99 | % | | (0.45) | |
| Average interest bearing cash / Average interest earning assets | | 3.54 | % | | 4.99 | % | | (1.45) | |
| Average loans and leases / Average interest earning assets | | 78.07 | % | | 77.64 | % | | 0.43 | |
| Average loans and leases / Average total deposits | | 90.51 | % | | 91.87 | % | | (1.36) | |
| Average non-interest bearing deposits / Average total deposits | | 32.91 | % | | 39.69 | % | | (6.78) | |
Average total deposits / Average total funding (3) | | 90.12 | % | | 88.03 | % | | 2.09 | |
| | | | | | |
|
(1) See GAAP to Non-GAAP Reconciliation.
(2) Tax-exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.
(3) Total funding = Total deposits + Total borrowings.
(4) The operating efficiency ratio was adjusted in the first quarter of 2024 to remove B&O taxes and for a tax-equivalent adjustment to BOLI income. The Company views the adjusted operating efficiency ratio as a better representation of its efficiency ratio when compared to other banks as it normalizes for the tax treatment of the adjusted items. The adjustment re-aligns Columbia's calculation of its operating efficiency ratio with its pre-merger calculation.
(5) Non-interest expense adjustments were revised subsequent to the Company's reporting of its earnings results for the period ended December 31, 2023. The revision includes adding the FDIC special assessment to the non-interest expense adjustments, which removes the special assessment from the Company's calculation of operating non-interest expense. The Company views the special assessment as an infrequent expense that is outside the control of the Company.
Columbia Banking System, Inc. Reports Second Quarter 2024 Results
July 25, 2024
Page 11
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Columbia Banking System, Inc. |
| Loan & Lease Portfolio Balances and Mix |
| (Unaudited) |
| Jun 30, 2024 | | Mar 31, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | % Change |
| ($ in thousands) | Amount | | Amount | | Amount | | Amount | | Amount | | Seq. Quarter | | Year over Year |
| Loans and leases: | | | | | | | | | | | | | |
| Commercial real estate: | | | | | | | | | | | | | |
| Non-owner occupied term, net | $ | 6,407,351 | | | $ | 6,557,768 | | | $ | 6,482,940 | | | $ | 6,490,638 | | | $ | 6,434,673 | | | (2) | % | | — | % |
| Owner occupied term, net | 5,230,511 | | | 5,231,676 | | | 5,195,605 | | | 5,235,227 | | | 5,254,401 | | | — | % | | — | % |
| Multifamily, net | 5,868,848 | | | 5,828,960 | | | 5,704,734 | | | 5,684,495 | | | 5,622,875 | | | 1 | % | | 4 | % |
| Construction & development, net | 1,946,693 | | | 1,728,652 | | | 1,747,302 | | | 1,669,918 | | | 1,528,924 | | | 13 | % | | 27 | % |
| Residential development, net | 269,106 | | | 284,117 | | | 323,899 | | | 354,922 | | | 388,641 | | | (5) | % | | (31) | % |
| Commercial: | | | | | | | | | | | | | |
| Term, net | 5,559,548 | | | 5,544,450 | | | 5,536,765 | | | 5,437,915 | | | 5,449,787 | | | — | % | | 2 | % |
| Lines of credit & other, net | 2,558,633 | | | 2,491,557 | | | 2,430,127 | | | 2,353,548 | | | 2,268,790 | | | 3 | % | | 13 | % |
| Leases & equipment finance, net | 1,701,943 | | | 1,706,759 | | | 1,729,512 | | | 1,728,991 | | | 1,740,037 | | | — | % | | (2) | % |
| Residential: | | | | | | | | | | | | | |
| Mortgage, net | 5,992,163 | | | 6,128,884 | | | 6,157,166 | | | 6,121,838 | | | 6,272,898 | | | (2) | % | | (4) | % |
| Home equity loans & lines, net | 1,982,786 | | | 1,950,421 | | | 1,938,166 | | | 1,899,948 | | | 1,898,958 | | | 2 | % | | 4 | % |
| Consumer & other, net | 192,405 | | | 189,169 | | | 195,735 | | | 193,158 | | | 189,315 | | | 2 | % | | 2 | % |
| Total loans and leases, net of deferred fees and costs | $ | 37,709,987 | | | $ | 37,642,413 | | | $ | 37,441,951 | | | $ | 37,170,598 | | | $ | 37,049,299 | | | — | % | | 2 | % |
| | | | | | | | | | | | | |
| Loans and leases mix: | | | | | | | | | | | | | |
| Commercial real estate: | | | | | | | | | | | | | |
| Non-owner occupied term, net | 17 | % | | 17 | % | | 17 | % | | 17 | % | | 17 | % | | | | |
| Owner occupied term, net | 14 | % | | 14 | % | | 14 | % | | 14 | % | | 14 | % | | | | |
| Multifamily, net | 15 | % | | 15 | % | | 15 | % | | 15 | % | | 15 | % | | | | |
| Construction & development, net | 5 | % | | 5 | % | | 5 | % | | 4 | % | | 4 | % | | | | |
| Residential development, net | 1 | % | | 1 | % | | 1 | % | | 1 | % | | 1 | % | | | | |
| Commercial: | | | | | | | | | | | | | |
| Term, net | 15 | % | | 15 | % | | 15 | % | | 15 | % | | 15 | % | | | | |
| Lines of credit & other, net | 6 | % | | 6 | % | | 6 | % | | 6 | % | | 6 | % | | | | |
| Leases & equipment finance, net | 5 | % | | 5 | % | | 5 | % | | 5 | % | | 5 | % | | | | |
| Residential: | | | | | | | | | | | | | |
| Mortgage, net | 16 | % | | 16 | % | | 16 | % | | 17 | % | | 17 | % | | | | |
| Home equity loans & lines, net | 5 | % | | 5 | % | | 5 | % | | 5 | % | | 5 | % | | | | |
| Consumer & other, net | 1 | % | | 1 | % | | 1 | % | | 1 | % | | 1 | % | | | | |
| Total | 100 | % | | 100 | % | | 100 | % | | 100 | % | | 100 | % | | | | |
| | | | | | | | | | | | | |
|
Columbia Banking System, Inc. Reports Second Quarter 2024 Results
July 25, 2024
Page 12
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Columbia Banking System, Inc. |
| Deposit Portfolio Balances and Mix |
| (Unaudited) |
| Jun 30, 2024 | | Mar 31, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | % Change |
| ($ in thousands) | Amount | | Amount | | Amount | | Amount | | Amount | | Seq. Quarter | | Year over Year |
| Deposits: | | | | | | | | | | | | | |
| Demand, non-interest bearing | $ | 13,481,616 | | | $ | 13,808,554 | | | $ | 14,256,452 | | | $ | 15,532,948 | | | $ | 16,019,408 | | | (2) | % | | (16) | % |
| Demand, interest bearing | 8,195,284 | | | 8,095,211 | | | 8,044,432 | | | 6,898,831 | | | 6,300,082 | | | 1 | % | | 30 | % |
| Money market | 10,927,813 | | | 10,822,498 | | | 10,324,454 | | | 10,349,217 | | | 10,115,908 | | | 1 | % | | 8 | % |
| Savings | 2,508,598 | | | 2,640,060 | | | 2,754,113 | | | 3,018,706 | | | 3,171,714 | | | (5) | % | | (21) | % |
| Time | 6,409,961 | | | 6,339,837 | | | 6,227,569 | | | 5,824,666 | | | 5,227,805 | | | 1 | % | | 23 | % |
| Total | $ | 41,523,272 | | | $ | 41,706,160 | | | $ | 41,607,020 | | | $ | 41,624,368 | | | $ | 40,834,917 | | | — | % | | 2 | % |
| | | | | | | | | | | | | |
Total core deposits (1) | $ | 37,159,069 | | | $ | 37,436,569 | | | $ | 37,423,402 | | | $ | 37,597,830 | | | $ | 37,639,368 | | | (1) | % | | (1) | % |
| | | | | | | | | | | | | |
| Deposit mix: | | | | | | | | | | | | | |
| Demand, non-interest bearing | 33 | % | | 34 | % | | 34 | % | | 37 | % | | 39 | % | | | | |
| Demand, interest bearing | 20 | % | | 19 | % | | 19 | % | | 17 | % | | 15 | % | | | | |
| Money market | 26 | % | | 26 | % | | 25 | % | | 25 | % | | 25 | % | | | | |
| Savings | 6 | % | | 6 | % | | 7 | % | | 7 | % | | 8 | % | | | | |
| Time | 15 | % | | 15 | % | | 15 | % | | 14 | % | | 13 | % | | | | |
| Total | 100 | % | | 100 | % | | 100 | % | | 100 | % | | 100 | % | | | | |
| | | | | | | | | | | | | |
|
(1) Core deposits are defined as total deposits less time deposits greater than $250,000 and all brokered deposits.
Columbia Banking System, Inc. Reports Second Quarter 2024 Results
July 25, 2024
Page 13
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Columbia Banking System, Inc. |
| Credit Quality – Non-performing Assets |
| (Unaudited) |
| | Quarter Ended | | % Change |
| ($ in thousands) | Jun 30, 2024 | | Mar 31, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Seq. Quarter | | Year over Year |
Non-performing assets: (1) | | | | | | | | | | | | | |
| Loans and leases on non-accrual status: | | | | | | | | | | | | | |
| Commercial real estate, net | $ | 37,584 | | | $ | 39,736 | | | $ | 28,689 | | | $ | 26,053 | | | $ | 10,994 | | | (5) | % | | 242 | % |
| Commercial, net | 54,986 | | | 58,960 | | | 45,682 | | | 44,341 | | | 39,316 | | | (7) | % | | 40 | % |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Total loans and leases on non-accrual status | 92,570 | | | 98,696 | | | 74,371 | | | 70,394 | | | 50,310 | | | (6) | % | | 84 | % |
Loans and leases past due 90+ days and accruing: (2) | | | | | | | | | | | | | |
| Commercial real estate, net | — | | | 253 | | | 870 | | | 71 | | | 184 | | | (100) | % | | (100) | % |
| Commercial, net | 5,778 | | | 10,733 | | | 8,232 | | | 8,606 | | | 7,720 | | | (46) | % | | (25) | % |
| Residential, net (2) | 54,525 | | | 31,916 | | | 29,102 | | | 25,180 | | | 21,370 | | | 71 | % | | 155 | % |
| Consumer & other, net | 220 | | | 437 | | | 326 | | | 240 | | | 399 | | | (50) | % | | (45) | % |
| Total loans and leases past due 90+ days and accruing (2) | 60,523 | | | 43,339 | | | 38,530 | | | 34,097 | | | 29,673 | | | 40 | % | | 104 | % |
Total non-performing loans and leases (1), (2) | 153,093 | | | 142,035 | | | 112,901 | | | 104,491 | | | 79,983 | | | 8 | % | | 91 | % |
| Other real estate owned | 2,839 | | | 1,762 | | | 1,036 | | | 1,170 | | | 278 | | | 61 | % | | nm |
Total non-performing assets (1), (2) | $ | 155,932 | | | $ | 143,797 | | | $ | 113,937 | | | $ | 105,661 | | | $ | 80,261 | | | 8 | % | | 94 | % |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Loans and leases past due 31-89 days | $ | 85,998 | | | $ | 109,673 | | | $ | 85,235 | | | $ | 82,918 | | | $ | 73,376 | | | (22) | % | | 17 | % |
| Loans and leases past due 31-89 days to total loans and leases | 0.23 | % | | 0.29 | % | | 0.23 | % | | 0.22 | % | | 0.20 | % | | (0.06) | | | 0.03 | |
Non-performing loans and leases to total loans and leases (1), (2) | 0.41 | % | | 0.38 | % | | 0.30 | % | | 0.28 | % | | 0.22 | % | | 0.03 | | | 0.19 | |
Non-performing assets to total assets (1), (2) | 0.30 | % | | 0.28 | % | | 0.22 | % | | 0.20 | % | | 0.15 | % | | 0.02 | | | 0.15 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| nm = Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm." | |
(1) Non-accrual and 90+ days past due loans include government guarantees of $64.6 million, $43.0 million, $31.6 million, $26.9 million, and $26.6 million at June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023, respectively.
(2) Excludes certain mortgage loans guaranteed by GNMA, which Columbia has the unilateral right to repurchase but has not done so, totaling $1.0 million, $1.6 million, $1.0 million, $700,000, and $1.6 million at June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023, respectively.
Columbia Banking System, Inc. Reports Second Quarter 2024 Results
July 25, 2024
Page 14
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Columbia Banking System, Inc. |
| Credit Quality – Allowance for Credit Losses |
| (Unaudited) |
| | Quarter Ended | | % Change |
| ($ in thousands) | Jun 30, 2024 | | Mar 31, 2024 | | Dec 31, 2023 | | Sep 30, 2023 | | Jun 30, 2023 | | Seq. Quarter | | Year over Year |
| Allowance for credit losses on loans and leases (ACLLL) | | | | | | | | | | | | | |
| Balance, beginning of period | $ | 414,344 | | | $ | 440,871 | | | $ | 416,560 | | | $ | 404,603 | | | $ | 417,464 | | | (6) | % | | (1) | % |
| | | | | | | | | | | | | |
| Provision for credit losses on loans and leases | 34,760 | | | 17,476 | | | 53,183 | | | 35,082 | | | 15,216 | | | 99 | % | | 128 | % |
| Charge-offs | | | | | | | | | | | | | |
| Commercial real estate, net | (585) | | | (161) | | | (629) | | | — | | | (174) | | | 263 | % | | 236 | % |
| Commercial, net | (33,561) | | | (47,232) | | | (31,949) | | | (26,629) | | | (32,036) | | | (29) | % | | 5 | % |
| Residential, net | (504) | | | (490) | | | (89) | | | (206) | | | (4) | | | 3 | % | | nm |
| Consumer & other, net | (1,551) | | | (1,870) | | | (1,841) | | | (1,884) | | | (1,264) | | | (17) | % | | 23 | % |
| Total charge-offs | (36,201) | | | (49,753) | | | (34,508) | | | (28,719) | | | (33,478) | | | (27) | % | | 8 | % |
| Recoveries | | | | | | | | | | | | | |
| Commercial real estate, net | 551 | | | 358 | | | 35 | | | 31 | | | 209 | | | 54 | % | | 164 | % |
| Commercial, net | 4,198 | | | 4,732 | | | 4,414 | | | 4,901 | | | 4,511 | | | (11) | % | | (7) | % |
| Residential, net | 411 | | | 170 | | | 781 | | | 156 | | | 63 | | | 142 | % | | nm |
| Consumer & other, net | 608 | | | 490 | | | 406 | | | 506 | | | 618 | | | 24 | % | | (2) | % |
| Total recoveries | 5,768 | | | 5,750 | | | 5,636 | | | 5,594 | | | 5,401 | | | 0 | % | | 7 | % |
| Net (charge-offs) recoveries | | | | | | | | | | | | | |
| Commercial real estate, net | (34) | | | 197 | | | (594) | | | 31 | | | 35 | | | (117) | % | | (197) | % |
| Commercial, net | (29,363) | | | (42,500) | | | (27,535) | | | (21,728) | | | (27,525) | | | (31) | % | | 7 | % |
| Residential, net | (93) | | | (320) | | | 692 | | | (50) | | | 59 | | | (71) | % | | (258) | % |
| Consumer & other, net | (943) | | | (1,380) | | | (1,435) | | | (1,378) | | | (646) | | | (32) | % | | 46 | % |
| Total net charge-offs | (30,433) | | | (44,003) | | | (28,872) | | | (23,125) | | | (28,077) | | | (31) | % | | 8 | % |
| Balance, end of period | $ | 418,671 | | | $ | 414,344 | | | $ | 440,871 | | | $ | 416,560 | | | $ | 404,603 | | | 1 | % | | 3 | % |
| Reserve for unfunded commitments | | | | | | | | | | | | | |
| Balance, beginning of period | $ | 22,868 | | | $ | 23,208 | | | $ | 21,482 | | | $ | 19,827 | | | $ | 19,029 | | | (1) | % | | 20 | % |
| | | | |