COLUMBIA BANKING SYSTEM, INC. REPORTS FIRST QUARTER 2024 RESULTS
TACOMA, Wash., April 25, 2024 /PRNewswire/ --
$0.59
$0.65
$23.68
$16.03
Earnings per diluted common share
Operating earnings per diluted common share 1
Book value per common share
Tangible book value per common share 1
CEO Commentary
"Our first quarter results reflect early progress on our targeted actions to improve our financial performance and drive shareholder value," said Clint Stein, President and CEO. "Enterprise-wide evaluations and targeted changes resulted in tighter expense control and stabilizing deposit costs in the latter part of the quarter. We will continue to exercise prudent expense management, and we expect to see the positive financial impact of near-term initiatives fully reflected in the fourth quarter's expense run rate. Longer-term initiatives will optimize our performance from a revenue, expense, and profitability standpoint. As an organization, Columbia remains laser-focused on regaining our placement as a top-quartile bank across financial metrics as we strive to drive long-term, consistent, repeatable performance."
-Clint Stein, President and CEO of Columbia Banking System, Inc.
1Q24 HIGHLIGHTS (COMPARED TO 4Q23)
Net Interest Income and NIM
o Net interest income decreased by $30 million on a linked-quarter basis due to higher deposit costs relative to the fourth quarter and lower income earned on investment securities given slower prepayment activity.
o Net interest margin was 3.52%, down 26 basis points from the prior quarter given the full-quarter effect of deposit repricing and balance mix shift during the fourth quarter.
Non-Interest Income and Expense
o Non-interest income decreased by $15 million due to the quarterly fluctuation in cumulative non-merger fair value accounting and hedges. Excluding these items, non-interest income increased by $1 million.
o Non-interest expense decreased by $50 million due to lower discretionary spend and the fourth quarter's larger FDIC special assessment.
Credit Quality
o Net charge-offs were 0.47% of average loans and leases (annualized), compared to 0.31% in the prior quarter.
o Provision expense of $17 million compares to $55 million in the prior quarter.
o Non-performing assets to total assets was 0.28%, compared to 0.22% as of December 31, 2023.
Capital
o Estimated total risk-based capital ratio of 12.0% and estimated common equity tier 1 risk-based capital ratio of 9.8%.
o Declared a quarterly cash dividend of $0.36 per common share on February 9, 2024, which was paid March 11, 2024.
Notable Items
o Recalibrated the commercial CECL model to be more reflective of the post-merger loan portfolio after a full year operating as a combined organization.
o Incurred $4 million in merger-related expense and $5 million in expense related to an FDIC special assessment.
1Q24 KEY FINANCIAL DATA
PERFORMANCE METRICS
1Q24
4Q23
1Q23
Return on average assets
0.96 %
0.72 %
(0.14) %
Return on average common equity
10.01 %
7.90 %
(1.70) %
Return on average tangible common equity 1
14.82 %
12.19 %
(2.09) %
Operating return on average assets 1
1.04 %
0.89 %
0.74 %
Operating return on average common equity 1
10.89 %
9.81 %
8.66 %
Operating return on average tangible common equity 1
16.12 %
15.14 %
10.64 %
Net interest margin
3.52 %
3.78 %
4.08 %
Efficiency ratio
60.57 %
64.81 %
79.71 %
Operating efficiency ratio, as adjusted 1
56.97 %
57.31 %
52.84 %
INCOME STATEMENT
($ in 000s, excl. per share data)
1Q24
4Q23
1Q23
Net interest income
$423,362
$453,623
$374,698
Provision for credit losses
$17,136
$54,909
$105,539
Non-interest income
$50,357
$65,533
$54,735
Non-interest expense
$287,516
$337,176
$342,818
Pre-provision net revenue 1
$186,203
$181,980
$86,615
Operating pre-provision net revenue 1
$200,684
$212,136
$195,730
Earnings per common share - diluted
$0.59
$0.45
($0.09)
Operating earnings per common share - diluted 1
$0.65
$0.56
$0.46
Dividends paid per share
$0.36
$0.36
$0.35
BALANCE SHEET
1Q24
4Q23
1Q23
Total assets
$52.2B
$52.2B
$54.0B
Loans and leases
$37.6B
$37.4B
$37.1B
Total deposits
$41.7B
$41.6B
$41.6B
Book value per common share
$23.68
$23.95
$23.44
Tangible book value per share 1
$16.03
$16.12
$15.12
Organizational Update
Columbia Banking System, Inc. ("Columbia," "we," or "our") conducted 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. These changes are expected to be carried out during the second and third quarters of 2024. Please refer to the Q1 2024 Earnings Presentation for additional details.
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 first quarter of 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 each of the quarters of 2023 and the year ended December 31, 2023 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 $423 million for the first quarter of 2024, down $30 million from the prior quarter. The decline reflects higher deposit costs relative to the fourth quarter and lower income earned on investment securities given slower prepayment activity.
Columbia's net interest margin was 3.52% for the first quarter of 2024, down 26 basis points from 3.78% for the fourth quarter of 2023. The contraction was driven by higher average deposit costs, which increased at an accelerated pace through the fourth quarter and into January before stabilizing in the latter part of the first quarter. The cost of interest-bearing deposits increased 34 basis points on a linked-quarter basis to 2.88% for the first quarter of 2024, which compares to 2.90% for the month of March and 2.89% at March 31, 2024. "During the first quarter, we executed a comprehensive review related to how we evaluate and approve deposit pricing," commented Tory Nixon, President of Umpqua Bank. "This resulted in enhanced pricing visibility, which contributed to stability in interest-bearing core deposit rates."
The cost of interest-bearing liabilities benefited from the movement of $1.4 billion in FHLB Advances to the Federal Reserve's Bank Term Funding Program in January, lowering the cost of these funds by approximately 75 basis points. Columbia's cost of interest-bearing liabilities increased 23 basis points on a linked-quarter basis to 3.25% for the first quarter of 2024, which compares to 3.24% for both the month of March and at March 31, 2024. Please refer to the Q1 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 $50 million for the first quarter of 2024, down $15 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 $4 million in the first quarter compared to a net fair value gain of $13 million in the fourth quarter, as detailed in our non-GAAP disclosures. Excluding these items, non-interest income increased by $1 million from the prior quarter.
Non-interest Expense
Non-interest expense was $288 million for the first quarter of 2024, down $50 million from the prior quarter level. Excluding merger-related expense, exit and disposal costs, and accruals for the FDIC special assessment, non-interest expense was $277 million2, down $17 million from the prior quarter due to lower discretionary spending and other expense items compared to elevated expense items in the fourth quarter. Please refer to the Q1 2024 Earnings Presentation for additional expense details.
Balance Sheet
Total consolidated assets were $52.2 billion as of March 31, 2024, unchanged from December 31, 2023. Cash and cash equivalents was $2.2 billion as of March 31, 2024, also unchanged from December 31, 2023. Including secured off-balance sheet lines of credit, total available liquidity was $18.6 billion as of March 31, 2024, representing 36% of total assets, 45% of total deposits, and 138% of uninsured deposits. Available-for-sale securities, which are held on balance sheet at fair value, were $8.6 billion as of March 31, 2024, a decrease of $213 million relative to December 31, 2023 due to paydowns and a decline in the fair value of the portfolio. Please refer to the Q1 2024 Earnings Presentation for additional details related to our securities portfolio and liquidity position.
Gross loans and leases were $37.6 billion as of March 31, 2024, an increase of $200 million relative to December 31, 2023. Commercial line utilization and construction project activity were the primary contributors to the 2% annualized loan growth in the quarter. Higher commercial real estate ("CRE") term balances reflect projects that transitioned from construction to permanent financing. Excluding this shift, origination volume during the first quarter was centered in our commercial and owner-occupied CRE portfolios. Please refer to the Q1 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 $41.7 billion as of March 31, 2024, an increase of $99 million relative to December 31, 2023. Customer deposits drove the quarter's increase, enabling a slight reduction in brokered deposits and borrowings. "Our teams are focused on customer deposit generation to reduce wholesale funding sources that create a drag on our earnings power," stated Mr. Nixon. "While inflationary pressures and seasonal patterns affected deposit flows, the teams generated successful momentum through targeted campaigns focused on extraordinary products and service, not price." Please refer to the Q1 2024 Earnings Presentation for additional details related to deposit characteristics and flows.
Credit Quality
The allowance for credit losses was $437 million, or 1.16% of loans and leases, as of March 31, 2024, compared to $464 million, or 1.24% of loans and leases, as of December 31, 2023. The provision for credit losses was $17 million for the first quarter of 2024, and it reflects credit migration trends, changes in the economic forecasts used in credit models, charge-off activity, and a change within our Current Expected Credit Losses ("CECL") methodology. During the first quarter, we recalibrated the commercial CECL model to be more reflective of the post-merger loan portfolio after a full year operating as a combined organization. We believe the recalibrated CECL model is more reflective of the quality of our underwriting and borrower profiles.
Net charge-offs were 0.47% of average loans and leases (annualized) for the first quarter of 2024, compared to 0.31% for the fourth quarter of 2023. Net charge-offs in the FinPac portfolio were $24 million in the first quarter, largely unchanged from the fourth quarter, and were up $14 million in the commercial portfolio from the prior quarter, with the increase centered in a single credit. Charge-off activity in other portfolios, inclusive of a small net recovery in the CRE portfolio, was at an insignificant level. As of March 31, 2024, non-performing assets were $144 million, or 0.28% of total assets, compared to $114 million, or 0.22% of total assets, as of December 31, 2023. The quarter's increase was driven primarily by migration in our SBA portfolio and an owner-occupied CRE property. Nonperforming assets as of March 31, 2024 included $43 million of government guarantees. Please refer to the Q1 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 $23.68 as of March 31, 2024, compared to $23.95 as of December 31, 2023. The linked-quarter change primarily reflects a change in accumulated other comprehensive (loss) income ("AOCI") to $(426) million at March 31, 2024, compared to $(340) 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 $413 million as of March 31, 2024, compared to $322 million as of December 31, 2023. Tangible book value per common share3 was $16.03 as of March 31, 2024, compared to $16.12 as of December 31, 2023.
Columbia's estimated total risk-based capital ratio was 12.0% and its estimated common equity tier 1 risk-based capital ratio was 9.8% as of March 31, 2024, compared to 11.9% and 9.6%, respectively, as of December 31, 2023. Columbia remains above current "well-capitalized" regulatory minimums. "Our total risk-based capital ratio at the parent company is now at our long-term target of 12%," stated Ron Farnsworth, Chief Financial Officer of Columbia. "We expect continued organic earnings generation to drive all capital ratios above target levels over time, increasing our flexibility for capital return in the future." The regulatory capital ratios as of March 31, 2024 are estimates, pending completion and filing of Columbia's regulatory reports.
Earnings Presentation and Conference Call Information
Columbia's Q1 2024 Earnings Presentation provides additional disclosure. A copy will be available on our investor relations page: www.columbiabankingsystem.com.
Columbia will host its first quarter 2024 earnings conference call on April 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 first 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.
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.
1 "Non-GAAP" financial measure. See GAAP to Non-GAAP Reconciliation for additional information. 2 "Non-GAAP" financial measure. See GAAP to Non-GAAP Reconciliation for additional information. 3 "Non-GAAP" financial measure. See GAAP to Non-GAAP Reconciliation for additional information.
TABLE INDEX
Page
Consolidated Statements of Operations
7
Consolidated Balance Sheets
7
Financial Highlights
9
Loan & Lease Portfolio Balances and Mix
10
Deposit Portfolio Balances and Mix
11
Credit Quality - Non-performing Assets
12
Credit Quality - Allowance for Credit Losses
13
Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates
14
Residential Mortgage Banking Activity
15
GAAP to Non-GAAP Reconciliation
16
Columbia Banking System, Inc.
Consolidated Statements of Operations
(Unaudited)
Quarter Ended
% Change
($ in thousands, except per share data)
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Seq.
Quarter
Year over Year
Interest income:
Loans and leases
$ 575,044
$ 577,741
$ 569,670
$ 552,679
$ 413,525
- %
39 %
Interest and dividends on investments:
Taxable
75,017
78,010
80,066
79,036
39,729
(4) %
89 %
Exempt from federal income tax
6,904
6,966
6,929
6,817
3,397
(1) %
103 %
Dividends
3,707
4,862
4,941
2,581
719
(24) %
416 %
Temporary investments and interest bearing deposits
23,553
24,055
34,407
34,616
18,581
(2) %
27 %
Total interest income
684,225
691,634
696,013
675,729
475,951
(1) %
44 %
Interest expense:
Deposits
198,435
170,659
126,974
100,408
63,613
16 %
212 %
Securities sold under agreement to repurchase and federal funds purchased
1,266
1,226
1,220
1,071
406
3 %
212 %
Borrowings
51,275
56,066
77,080
81,004
28,764
(9) %
78 %
Junior and other subordinated debentures
9,887
10,060
9,864
9,271
8,470
(2) %
17 %
Total interest expense
260,863
238,011
215,138
191,754
101,253
10 %
158 %
Net interest income
423,362
453,623
480,875
483,975
374,698
(7) %
13 %
Provision for credit losses
17,136
54,909
36,737
16,014
105,539
(69) %
(84) %
Non-interest income:
Service charges on deposits
16,064
17,349
17,410
16,454
14,312
(7) %
12 %
Card-based fees
13,183
14,593
15,674
13,435
11,561
(10) %
14 %
Financial services and trust revenue
4,464
3,011
4,651
4,512
1,297
48 %
244 %
Residential mortgage banking revenue (loss), net
4,634
4,212
7,103
(2,342)
7,816
10 %
(41) %
Gain on sale of debt securities, net
12
9
4
-
-
33 %
nm
(Loss) gain on equity securities, net
(1,565)
2,636
(2,055)
(697)
2,416
(159) %
(165) %
Gain on loan and lease sales, net
221
1,161
1,871
442
940
(81) %
(76) %
BOLI income
4,639
4,331
4,440
4,063
2,790
7 %
66 %
Other income (loss)
8,705
18,231
(5,117)
3,811
13,603
(52) %
(36) %
Total non-interest income
50,357
65,533
43,981
39,678
54,735
(23) %
(8) %
Non-interest expense:
Salaries and employee benefits
154,538
157,572
159,041
163,398
136,092
(2) %
14 %
Occupancy and equipment, net
45,291
48,160
43,070
50,550
41,700
(6) %
9 %
Intangible amortization
32,091
33,204
29,879
35,553
12,660
(3) %
153 %
FDIC assessments
14,460
42,510
11,200
11,579
6,113
(66) %
137 %
Merger-related expense
4,478
7,174
18,938
29,649
115,898
(38) %
(96) %
Other expenses
36,658
48,556
42,019
37,830
30,355
(25) %
21 %
Total non-interest expense
287,516
337,176
304,147
328,559
342,818
(15) %
(16) %
Income (loss) before provision (benefit) for income taxes
169,067
127,071
183,972
179,080
(18,924)
33 %
nm
Provision (benefit) for income taxes
44,987
33,540
48,127
45,703
(4,886)
34 %
nm
Net income (loss)
$ 124,080
$ 93,531
$ 135,845
$ 133,377
$ (14,038)
33 %
nm
Weighted average basic shares outstanding
208,260
208,083
208,070
207,977
156,383
- %
33 %
Weighted average diluted shares outstanding
208,956
208,739
208,645
208,545
156,383
- %
34 %
Earnings (loss) per common share - basic
$ 0.60
$ 0.45
$ 0.65
$ 0.64
$ (0.09)
33 %
nm
Earnings (loss) per common share - diluted
$ 0.59
$ 0.45
$ 0.65
$ 0.64
$ (0.09)
31 %
nm
nm = Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."
Columbia Banking System, Inc.
Consolidated Balance Sheets
(Unaudited)
% Change
($ in thousands, except per share data)
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Seq.
Quarter
Year over Year
Assets:
Cash and due from banks
$ 440,215
$ 498,496
$ 492,474
$ 538,653
$ 555,919
(12) %
(21) %
Interest-bearing cash and temporary investments
1,760,902
1,664,038
1,911,221
2,868,563
3,079,266
6 %
(43) %
Investment securities:
Equity and other, at fair value
77,203
76,995
73,638
76,361
76,532
- %
1 %
Available for sale, at fair value
8,616,545
8,829,870
8,503,986
8,998,428
9,249,600
(2) %
(7) %
Held to maturity, at amortized cost
2,247
2,300
2,344
2,388
2,432
(2) %
(8) %
Loans held for sale
47,201
30,715
60,313
183,633
49,338
54 %
(4) %
Loans and leases
37,642,413
37,441,951
37,170,598
37,049,299
37,091,280
1 %
1 %
Allowance for credit losses on loans and leases
(414,344)
(440,871)
(416,560)
(404,603)
(417,464)
(6) %
(1) %
Net loans and leases
37,228,069
37,001,080
36,754,038
36,644,696
36,673,816
1 %
2 %
Restricted equity securities
116,274
179,274
168,524
258,524
246,525
(35) %
(53) %
Premises and equipment, net
336,869
338,970
337,855
368,698
375,190
(1) %
(10) %
Operating lease right-of-use assets
113,833
115,811
114,220
119,255
127,296
(2) %
(11) %
Goodwill
1,029,234
1,029,234
1,029,234
1,029,234
1,030,142
- %
- %
Other intangible assets, net
571,588
603,679
636,883
666,762
702,315
(5) %
(19) %
Residential mortgage servicing rights, at fair value
110,444
109,243
117,640
172,929
178,800
1 %
(38) %
Bank-owned life insurance
682,293
680,948
648,232
643,727
641,922
- %
6 %
Deferred tax asset, net
356,031
347,203
469,841
362,880
351,229
3 %
1 %
Other assets
735,058
665,740
673,372
657,365
653,904
10 %
12 %
Total assets
$ 52,224,006
$ 52,173,596
$ 51,993,815
$ 53,592,096
$ 53,994,226
- %
(3) %
Liabilities:
Deposits
Non-interest-bearing
$ 13,808,554
$ 14,256,452
$ 15,532,948
$ 16,019,408
$ 17,215,781
(3) %
(20) %
Interest-bearing
27,897,606
27,350,568
26,091,420
24,815,509
24,370,566
2 %
14 %
Total deposits
41,706,160
41,607,020
41,624,368
40,834,917
41,586,347
- %
- %
Securities sold under agreements to repurchase
213,573
252,119
258,383
294,914
271,047
(15) %
(21) %
Borrowings
3,900,000
3,950,000
3,985,000
6,250,000
5,950,000
(1) %
(34) %
Junior subordinated debentures, at fair value
309,544
316,440
331,545
312,872
297,721
(2) %
4 %
Junior and other subordinated debentures, at amortized cost
107,838
107,895
107,952
108,009
108,066
- %
- %
Operating lease liabilities
129,240
130,576
129,845
132,099
140,648
(1) %
(8) %
Other liabilities
900,406
814,512
924,560
831,097
755,674
11 %
19 %
Total liabilities
47,266,761
47,178,562
47,361,653
48,763,908
49,109,503
- %
(4) %
Shareholders' equity:
Common stock
5,802,322
5,802,747
5,798,167
5,792,792
5,788,553
- %
- %
Accumulated deficit
(418,946)
(467,571)
(485,576)
(545,842)
(603,696)
(10) %
(31) %
Accumulated other comprehensive loss
(426,131)
(340,142)
(680,429)
(418,762)
(300,134)
25 %
42 %
Total shareholders' equity
4,957,245
4,995,034
4,632,162
4,828,188
4,884,723
(1) %
1 %
Total liabilities and shareholders' equity
$ 52,224,006
$ 52,173,596
$ 51,993,815
$ 53,592,096
$ 53,994,226
- %
(3) %
Common shares outstanding at period end
209,370
208,585
208,575
208,514
208,429
- %
- %
Columbia Banking System, Inc.
Financial Highlights
(Unaudited)
Quarter Ended
% Change
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Seq. Quarter
Year over Year
Per Common Share Data:
Dividends
$ 0.36
$ 0.36
$ 0.36
$ 0.36
$ 0.35
- %
3 %
Book value
$ 23.68
$ 23.95
$ 22.21
$ 23.16
$ 23.44
(1) %
1 %
Tangible book value (1)
$ 16.03
$ 16.12
$ 14.22
$ 15.02
$ 15.12
(1) %
6 %
Performance Ratios:
Efficiency ratio (2)
60.57 %
64.81 %
57.82 %
62.60 %
79.71 %
(4.24)
(19.14)
Non-interest expense to average assets (1)
2.22 %
2.58 %
2.28 %
2.46 %
3.53 %
(0.36)
(1.31)
Return on average assets ("ROAA")
0.96 %
0.72 %
1.02 %
1.00 %
(0.14) %
0.24
1.10
Pre-provision net revenue ("PPNR") ROAA (1)
1.44 %
1.39 %
1.65 %
1.46 %
0.89 %
0.05
0.55
Return on average common equity
10.01 %
7.90 %
11.07 %
10.84 %
(1.70) %
2.11
11.71
Return on average tangible common equity (1)
14.82 %
12.19 %
16.93 %
16.63 %
(2.09) %
2.63
16.91
Performance Ratios - Operating: (1)
Operating efficiency ratio, as adjusted (1),(2), (5), (6)
56.97 %
57.31 %
51.26 %
54.04 %
52.84 %
(0.34)
4.13
Operating non-interest expense to average assets (1)
2.14 %
2.25 %
2.10 %
2.22 %
2.32 %
(0.11)
(0.18)
Operating ROAA (1), (5)
1.04 %
0.89 %
1.23 %
1.27 %
0.74 %
0.15
0.30
Operating PPNR ROAA (1), (5)
1.55 %
1.62 %
1.94 %
1.82 %
2.01 %
(0.07)
(0.46)
Operating return on average common equity (1), (5)
10.89 %
9.81 %
13.40 %
13.77 %
8.66 %
1.08
2.23
Operating return on average tangible common equity (1), (5)
16.12 %
15.14 %
20.48 %
21.13 %
10.64 %
0.98
5.48
Average Balance Sheet Yields, Rates, & Ratios:
Yield on loans and leases
6.13 %
6.13 %
6.08 %
5.95 %
5.55 %
-
0.58
Yield on earning assets (2)
5.69 %
5.75 %
5.65 %
5.48 %
5.19 %
(0.06)
0.50
Cost of interest bearing deposits
2.88 %
2.54 %
2.01 %
1.64 %
1.32 %
0.34
1.56
Cost of interest bearing liabilities
3.25 %
3.02 %
2.72 %
2.45 %
1.82 %
0.23
1.43
Cost of total deposits
1.92 %
1.63 %
1.23 %
0.99 %
0.80 %
0.29
1.12
Cost of total funding (3)
2.27 %
2.05 %
1.81 %
1.61 %
1.16 %
0.22
1.11
Net interest margin (2)
3.52 %
3.78 %
3.91 %
3.93 %
4.08 %
(0.26)
(0.56)
Average interest bearing cash / Average interest earning assets
3.56 %
3.64 %
5.17 %
5.47 %
4.33 %
(0.08)
(0.77)
Average loans and leases / Average interest earning assets
77.87 %
78.04 %
75.64 %
75.18 %
80.96 %
(0.17)
(3.09)
Average loans and leases / Average total deposits
90.41 %
89.91 %
90.63 %
90.98 %
93.01 %
0.50
(2.60)
Average non-interest bearing deposits / Average total deposits
33.29 %
35.88 %
38.55 %
40.05 %
39.55 %
(2.59)
(6.26)
Average total deposits / Average total funding (3)
90.09 %
90.02 %
86.66 %
85.59 %
91.36 %
0.07
(1.27)
Select Credit & Capital Ratios:
Non-performing loans and leases to total loans and leases
0.38 %
0.30 %
0.28 %
0.22 %
0.20 %
0.08
0.18
Non-performing assets to total assets
0.28 %
0.22 %
0.20 %
0.15 %
0.14 %
0.06
0.14
Allowance for credit losses to loans and leases
1.16 %
1.24 %
1.18 %
1.15 %
1.18 %
(0.08)
(0.02)
Total risk-based capital ratio (4)
12.0 %
11.9 %
11.6 %
11.3 %
10.9 %
0.10
1.10
Common equity tier 1 risk-based capital ratio (4)
9.8 %
9.6 %
9.5 %
9.2 %
8.9 %
0.20
0.90
nm = Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."
(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)
Non-interest expense adjustments were revised subsequent to the Company's reporting of its earnings results for the three months 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.
(6)
The operating efficiency ratio has been adjusted 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.
Columbia Banking System, Inc.
Loan & Lease Portfolio Balances and Mix
(Unaudited)
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 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
$ 6,557,768
$ 6,482,940
$ 6,490,638
$ 6,434,673
$ 6,353,550
1 %
3 %
Owner occupied term, net
5,231,676
5,195,605
5,235,227
5,254,401
5,156,848
1 %
1 %
Multifamily, net
5,828,960
5,704,734
5,684,495
5,622,875
5,590,587
2 %
4 %
Construction & development, net
1,728,652
1,747,302
1,669,918
1,528,924
1,467,561
(1) %
18 %
Residential development, net
284,117
323,899
354,922
388,641
440,667
(12) %
(36) %
Commercial:
Term, net
5,544,450
5,536,765
5,437,915
5,449,787
5,906,774
- %
(6) %
Lines of credit & other, net
2,491,557
2,430,127
2,353,548
2,268,790
2,184,762
3 %
14 %
Leases & equipment finance, net
1,706,759
1,729,512
1,728,991
1,740,037
1,746,267
(1) %
(2) %
Residential:
Mortgage, net
6,128,884
6,157,166
6,121,838
6,272,898
6,187,964
- %
(1) %
Home equity loans & lines, net
1,950,421
1,938,166
1,899,948
1,898,958
1,870,002
1 %
4 %
Consumer & other, net
189,169
195,735
193,158
189,315
186,298
(3) %
2 %
Total loans and leases, net of deferred fees and costs
$ 37,642,413
$ 37,441,951
$ 37,170,598
$ 37,049,299
$ 37,091,280
1 %
1 %
Loans and leases mix:
Commercial real estate:
Non-owner occupied term, net
17 %
17 %
17 %
17 %
16 %
Owner occupied term, net
14 %
14 %
14 %
14 %
14 %
Multifamily, net
15 %
15 %
15 %
15 %
15 %
Construction & development, net
5 %
5 %
4 %
4 %
4 %
Residential development, net
1 %
1 %
1 %
1 %
1 %
Commercial:
Term, net
15 %
15 %
15 %
15 %
16 %
Lines of credit & other, net
6 %
6 %
6 %
6 %
6 %
Leases & equipment finance, net
5 %
5 %
5 %
5 %
5 %
Residential:
Mortgage, net
16 %
16 %
17 %
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.
Deposit Portfolio Balances and Mix
(Unaudited)
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
% Change
($ in thousands)
Amount
Amount
Amount
Amount
Amount
Seq. Quarter
Year over Year
Deposits:
Demand, non-interest bearing
$ 13,808,554
$ 14,256,452
$ 15,532,948
$ 16,019,408
$ 17,215,781
(3) %
(20) %
Demand, interest bearing
8,095,211
8,044,432
6,898,831
6,300,082
5,900,462
1 %
37 %
Money market
10,822,498
10,324,454
10,349,217
10,115,908
10,681,422
5 %
1 %
Savings
2,640,060
2,754,113
3,018,706
3,171,714
3,469,112
(4) %
(24) %
Time
6,339,837
6,227,569
5,824,666
5,227,805
4,319,570
2 %
47 %
Total
$ 41,706,160
$ 41,607,020
$ 41,624,368
$ 40,834,917
$ 41,586,347
- %
- %
Total core deposits (1)
$ 37,436,569
$ 37,423,402
$ 37,597,830
$ 37,639,368
$ 39,155,298
- %
(4) %
Deposit mix:
Demand, non-interest bearing
33 %
34 %
37 %
39 %
41 %
Demand, interest bearing
20 %
19 %
17 %
15 %
14 %
Money market
26 %
25 %
25 %
25 %
26 %
Savings
6 %
7 %
7 %
8 %
9 %
Time
15 %
15 %
14 %
13 %
10 %
Total
100 %
100 %
100 %
100 %
100 %
(1)
Core deposits are defined as total deposits less time deposits greater than $250,000 and all brokered deposits.
Columbia Banking System, Inc.
Credit Quality - Non-performing Assets
(Unaudited)
Quarter Ended
% Change
($ in thousands)
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Seq. Quarter
Year over Year
Non-performing assets:(1)
Loans and leases on non-accrual status:
Commercial real estate, net
$ 39,736
$ 28,689
$ 26,053
$ 10,994
$ 15,612
39 %
155 %
Commercial, net
58,960
45,682
44,341
39,316
42,301
29 %
39 %
Total loans and leases on non-accrual status
98,696
74,371
70,394
50,310
57,913
33 %
70 %
Loans and leases past due 90+ days and accruing: (2)
Commercial real estate, net
253
870
71
184
1
(71) %
nm
Commercial, net
10,733
8,232
8,606
7,720
151
30 %
nm
Residential, net (2)
31,916
29,102
25,180
21,370
17,423
10 %
83 %
Consumer & other, net
437
326
240
399
140
34 %
212 %
Total loans and leases past due 90+ days and accruing
43,339
38,530
34,097
29,673
17,715
12 %
145 %
Total non-performing loans and leases (1), (2)
142,035
112,901
104,491
79,983
75,628
26 %
88 %
Other real estate owned
1,762
1,036
1,170
278
409
70 %
331 %
Total non-performing assets (1), (2)
$ 143,797
$ 113,937
$ 105,661
$ 80,261
$ 76,037
26 %
89 %
Loans and leases past due 31-89 days
$ 109,673
$ 85,235
$ 82,918
$ 73,376
$ 78,641
29 %
39 %
Loans and leases past due 31-89 days to total loans and leases
0.29 %
0.23 %
0.22 %
0.20 %
0.21 %
0.06
0.08
Non-performing loans and leases to total loans and leases (1), (2)
0.38 %
0.30 %
0.28 %
0.22 %
0.20 %
0.08
0.18
Non-performing assets to total assets (1), (2)
0.28 %
0.22 %
0.20 %
0.15 %
0.14 %
0.06
0.14
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 $43.0 million, $31.6 million, $26.9 million, $26.6 million, and $24.4 million at March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, respectively.
(2)
Excludes certain mortgage loans guaranteed by Ginnie Mae, which Columbia has the unilateral right to repurchase but has not done so, totaling $1.6 million, $1.0 million, $700,000, $1.6 million, and $5.4 million at March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023, and March 31, 2023, respectively.
Columbia Banking System, Inc.
Credit Quality - Allowance for Credit Losses
(Unaudited)
Quarter Ended
% Change
($ in thousands)
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Seq. Quarter
Year over Year
Allowance for credit losses on loans and leases (ACLLL)
Balance, beginning of period
$ 440,871
$ 416,560
$ 404,603
$ 417,464
$ 301,135
6 %
46 %
Initial ACL recorded for PCD loans acquired during the period
-
-
-
-
26,492
nm
(100) %
Provision for credit losses on loans and leases (1)
17,476
53,183
35,082
15,216
106,498
(67) %
(84) %
Charge-offs
Commercial real estate, net
(161)
(629)
-
(174)
-
(74) %
nm
Commercial, net
(47,232)
(31,949)
(26,629)
(32,036)
(19,248)
48 %
145 %
Residential, net
(490)
(89)
(206)
(4)
(248)
451 %
98 %
Consumer & other, net
(1,870)
(1,841)
(1,884)
(1,264)
(773)
2 %
142 %
Total charge-offs
(49,753)
(34,508)
(28,719)
(33,478)
(20,269)
44 %
145 %
Recoveries
Commercial real estate, net
358
35
31
209
58
nm
nm
Commercial, net
4,732
4,414
4,901
4,511
3,058
7 %
55 %
Residential, net
170
781
156
63
123
(78) %
38 %
Consumer & other, net
490
406
506
618
369
21 %
33 %
Total recoveries
5,750
5,636
5,594
5,401
3,608
2 %
59 %
Net (charge-offs) recoveries
Commercial real estate, net
197
(594)
31
35
58
nm
240 %
Commercial, net
(42,500)
(27,535)
(21,728)
(27,525)
(16,190)
54 %
163 %
Residential, net
(320)
692
(50)
59
(125)
(146) %
156 %
Consumer & other, net
(1,380)
(1,435)
(1,378)
(646)
(404)
(4) %
242 %
Total net charge-offs
(44,003)
(28,872)
(23,125)
(28,077)
(16,661)
52 %
164 %
Balance, end of period
$ 414,344
$ 440,871
$ 416,560
$ 404,603
$ 417,464
(6) %
(1) %
Reserve for unfunded commitments
Balance, beginning of period
$ 23,208
$ 21,482
$ 19,827
$ 19,029
$ 14,221
8 %
63 %
Initial ACL recorded for unfunded commitments acquired during the period
-
-
-
-
5,767
nm
(100) %
(Recapture) provision for credit losses on unfunded commitments
(340)
1,726
1,655
798
(959)
(120) %
(65) %
Balance, end of period
22,868
23,208
21,482
19,827
19,029
(1) %
20 %
Total Allowance for credit losses (ACL)
$ 437,212
$ 464,079
$ 438,042
$ 424,430
$ 436,493
(6) %
- %
Net charge-offs to average loans and leases (annualized)
0.47 %
0.31 %
0.25 %
0.30 %
0.23 %
0.16
0.24
Recoveries to gross charge-offs
11.56 %
16.33 %
19.48 %
16.13 %
17.80 %
(4.77)
(6.24)
ACLLL to loans and leases
1.10 %
1.18 %
1.12 %
1.09 %
1.13 %
(0.08)
(0.03)
ACL to loans and leases
1.16 %
1.24 %
1.18 %
1.15 %
1.18 %
(0.08)
(0.02)
nm = Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."
(1)
For the quarter ended March 31, 2023, the provision for credit losses on loans and leases includes $88.4 million initial provision related to non-PCD loans acquired during the period.
Columbia Banking System, Inc.
Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates
(Unaudited)
Quarter Ended
March 31, 2024
December 31, 2023
March 31, 2023
($ in thousands)
Average Balance
Interest Income or Expense
Average Yields or Rates
Average Balance
Interest Income or Expense
Average Yields or Rates
Average Balance
Interest Income or Expense
Average Yields or Rates
INTEREST-EARNING ASSETS:
Loans held for sale
$ 30,550
$ 525
6.88 %
$ 48,868
$ 649
5.31 %
$ 54,008
$ 799
5.92 %
Loans and leases (1)
37,597,101
574,519
6.13 %
37,333,310
577,092
6.13 %
29,998,630
412,726
5.55 %
Taxable securities
8,081,003
78,724
3.90 %
7,903,053
82,872
4.19 %
4,960,966
40,448
3.26 %
Non-taxable securities (2)
851,342
7,886
3.71 %
809,551
8,073
3.99 %
437,020
4,068
3.72 %
Temporary investments and interest-bearing cash
1,720,791
23,553
5.51 %
1,743,447
24,055
5.47 %
1,605,081
18,581
4.69 %
Total interest-earning assets
48,280,787
$ 685,207
5.69 %
47,838,229
$ 692,741
5.75 %
37,055,705
$ 476,622
5.19 %
Goodwill and other intangible assets
1,619,134
1,652,282
623,042
Other assets
2,184,052
2,341,845
1,747,228
Total assets
$ 52,083,973
$ 51,832,356
$ 39,425,975
INTEREST-BEARING LIABILITIES:
Interest-bearing demand deposits
$ 8,035,339
$ 51,378
2.57 %
$ 7,617,427
$ 44,861
2.34 %
$ 4,759,251
$ 9,815
0.84 %
Money market deposits
10,612,073
72,497
2.75 %
10,276,894
61,055
2.36 %
8,845,784
32,238
1.48 %
Savings deposits
2,688,360
715
0.11 %
2,880,622
698
0.10 %
2,686,388
556
0.08 %
Time deposits
6,406,807
73,845
4.64 %
5,847,400
64,045
4.35 %
3,205,128
21,004
2.66 %
Total interest-bearing deposits
27,742,579
198,435
2.88 %
26,622,343
170,659
2.54 %
19,496,551
63,613
1.32 %
Repurchase agreements and federal funds purchased
231,667
1,266
2.20 %
245,989
1,226
1.98 %
281,032
406
0.59 %
Borrowings
3,920,879
51,275
5.26 %
3,918,261
56,066
5.68 %
2,352,715
28,764
4.96 %
Junior and other subordinated debentures
423,528
9,887
9.39 %
440,007
10,060
9.07 %
417,966
8,470
8.22 %
Total interest-bearing liabilities
32,318,653
$ 260,863
3.25 %
31,226,600
$ 238,011
3.02 %
22,548,264
$ 101,253
1.82 %
Non-interest-bearing deposits
13,841,582
14,899,001
12,755,080
Other liabilities
937,863
1,011,019
772,870
Total liabilities
47,098,098
47,136,620
36,076,214
Common equity
4,985,875
4,695,736
3,349,761
Total liabilities and shareholders' equity
$ 52,083,973
$ 51,832,356
$ 39,425,975
NET INTEREST INCOME (2)
$ 424,344
$ 454,730
$ 375,369
NET INTEREST SPREAD
2.44 %
2.73 %
3.37 %
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)
3.52 %
3.78 %
4.08 %
(1)
Non-accrual loans and leases are included in the average balance.
(2)
Tax-exempt income has been adjusted to a tax equivalent basis at a 21% tax rate. The amount of such adjustment was an addition to recorded income of approximately $982,000 for the three months ended March 31, 2024, as compared to $1.1 million for the three months ended December 31, 2023 and $671,000 for the three months ended March 31, 2023.
Columbia Banking System, Inc.
Residential Mortgage Banking Activity
(Unaudited)
Quarter Ended
% Change
($ in thousands)
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Seq. Quarter
Year over Year
Residential mortgage banking revenue:
Origination and sale
$ 2,920
$ 2,686
$ 2,442
$ 3,166
$ 3,587
9 %
(19) %
Servicing
6,021
5,966
8,887
9,167
9,397
1 %
(36) %
Change in fair value of MSR asset:
Changes due to collection/realization of expected cash flows over time
(3,153)
(3,215)
(4,801)
(4,797)
(4,881)
(2) %
(35) %
Changes due to valuation inputs or assumptions
3,117
(6,251)
5,308
(2,242)
(2,937)
nm
nm
MSR hedge (loss) gain
(4,271)
5,026
(4,733)
(7,636)
2,650
(185) %
(261) %
Total
$ 4,634
$ 4,212
$ 7,103
$ (2,342)
$ 7,816
10 %
(41) %
Closed loan volume for-sale
$ 86,903
$ 87,033
$ 103,333
$ 119,476
$ 131,726
- %
(34) %
Gain on sale margin
3.36 %
3.09 %
2.36 %
2.65 %
2.72 %
0.27
0.64
Residential mortgage servicing rights:
Balance, beginning of period
$ 109,243
$ 117,640
$ 172,929
$ 178,800
$ 185,017
(7) %
(41) %
Additions for new MSR capitalized
1,237
920
1,658
1,168
1,601
34 %
(23) %
Sale of MSR assets
-
149
(57,454)
-
-
(100) %
nm
Change in fair value of MSR asset:
Changes due to collection/realization of expected cash flows over time
(3,153)
(3,215)
(4,801)
(4,797)
(4,881)
(2) %
(35) %
Changes due to valuation inputs or assumptions
3,117
(6,251)
5,308
(2,242)
(2,937)
nm
nm
Balance, end of period
$ 110,444
$ 109,243
$ 117,640
$ 172,929
$ 178,800
1 %
(38) %
Residential mortgage loans serviced for others
$ 8,081,039
$ 8,175,664
$ 8,240,950
$ 12,726,615
$ 12,914,046
(1) %
(37) %
MSR as % of serviced portfolio
1.37 %
1.34 %
1.43 %
1.36 %
1.38 %
0.03
(0.01)
nm = Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."
Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles in the United States of America ("GAAP"), this press release contains certain non-GAAP financial measures. The company believes presenting certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends, and our financial position. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitution for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
Columbia Banking System, Inc.
GAAP to Non-GAAP Reconciliation
(Unaudited)
Quarter Ended
% Change
($ in thousands, except per share data)
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Seq. Quarter
Year over Year
Total shareholders' equity
a
$ 4,957,245
$ 4,995,034
$ 4,632,162
$ 4,828,188
$ 4,884,723
(1) %
1 %
Less: Goodwill
1,029,234
1,029,234
1,029,234
1,029,234
1,030,142
- %
- %
Less: Other intangible assets, net
571,588
603,679
636,883
666,762
702,315
(5) %
(19) %
Tangible common shareholders' equity
b
$ 3,356,423
$ 3,362,121
$ 2,966,045
$ 3,132,192
$ 3,152,266
- %
6 %
Total assets
c
$ 52,224,006
$ 52,173,596
$ 51,993,815
$ 53,592,096
$ 53,994,226
- %
(3) %
Less: Goodwill
1,029,234
1,029,234
1,029,234
1,029,234
1,030,142
- %
- %
Less: Other intangible assets, net
571,588
603,679
636,883
666,762
702,315
(5) %
(19) %
Tangible assets
d
$ 50,623,184
$ 50,540,683
$ 50,327,698
$ 51,896,100
$ 52,261,769
- %
(3) %
Common shares outstanding at period end
e
209,370
208,585
208,575
208,514
208,429
- %
- %
Total shareholders' equity to total assets ratio
a / c
9.49 %
9.57 %
8.91 %
9.01 %
9.05 %
(0.08)
0.44
Tangible common equity ratio
b / d
6.63 %
6.65 %
5.89 %
6.04 %
6.03 %
(0.02)
0.60
Book value per common share
a / e
$ 23.68
$ 23.95
$ 22.21
$ 23.16
$ 23.44
(1) %
1 %
Tangible book value per common share
b / e
$ 16.03
$ 16.12
$ 14.22
$ 15.02
$ 15.12
(1) %
6 %
Columbia Banking System, Inc.
GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
Quarter Ended
% Change
($ in thousands)
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Seq. Quarter
Year over Year
Non-Interest Income Adjustments
Gain on sale of debt securities, net
$ 12
$ 9
$ 4
$ -
$ -
33 %
nm
(Loss) gain on equity securities, net
(1,565)
2,636
(2,055)
(697)
2,416
(159) %
(165) %
Gain (loss) on swap derivatives
1,197
(8,042)
5,700
1,288
(3,543)
nm
nm
Change in fair value of certain loans held for investment
(2,372)
19,354
(19,247)
(6,965)
9,488
(112) %
(125) %
Change in fair value of MSR due to valuation inputs or assumptions
3,116
(6,251)
5,308
(2,242)
(2,937)
nm
nm
MSR hedge (loss) gain
(4,271)
5,026
(4,733)
(7,636)
2,650
(185) %
(261) %
Total non-interest income adjustments
a
$ (3,883)
$ 12,732
$ (15,023)
$ (16,252)
$ 8,074
(130) %
(148) %
Non-Interest Expense Adjustments
Merger-related expense
$ 4,478
$ 7,174
$ 18,938
$ 29,649
$ 115,898
(38) %
(96) %
Exit and disposal costs
1,272
2,791
4,017
2,119
1,291
(54) %
(1) %
FDIC special assessment (2)
4,848
32,923
-
-
-
(85) %
nm
Total non-interest expense adjustments
b
$ 10,598
$ 42,888
$ 22,955
$ 31,768
$ 117,189
(75) %
(91) %
Net interest income
c
$ 423,362
$ 453,623
$ 480,875
$ 483,975
$ 374,698
(7) %
13 %
Non-interest income (GAAP)
d
$ 50,357
$ 65,533
$ 43,981
$ 39,678
$ 54,735
(23) %
(8) %
Less: Non-interest income adjustments
a
3,883
(12,732)
15,023
16,252
(8,074)
nm
nm
Operating non-interest income (non-GAAP)
e
$ 54,240
$ 52,801
$ 59,004
$ 55,930
$ 46,661
3 %
16 %
Revenue (GAAP)
f=c+d
$ 473,719
$ 519,156
$ 524,856
$ 523,653
$ 429,433
(9) %
10 %
Operating revenue (non-GAAP)
g=c+e
$ 477,602
$ 506,424
$ 539,879
$ 539,905
$ 421,359
(6) %
13 %
Non-interest expense (GAAP)
h
$ 287,516
$ 337,176
$ 304,147
$ 328,559
$ 342,818
(15) %
(16) %
Less: Non-interest expense adjustments
b
(10,598)
(42,888)
(22,955)
(31,768)
(117,189)
(75) %
(91) %
Operating non-interest expense (non-GAAP)
i
$ 276,918
$ 294,288
$ 281,192
$ 296,791
$ 225,629
(6) %
23 %
Net income (loss) (GAAP)
j
$ 124,080
$ 93,531
$ 135,845
$ 133,377
$ (14,038)
33 %
nm
Provision (benefit) for income taxes
44,987
33,540
48,127
45,703
(4,886)
34 %
nm
Income (loss) before provision for income taxes
169,067
127,071
183,972
179,080
(18,924)
33 %
nm
Provision for credit losses
17,136
54,909
36,737
16,014
105,539
(69) %
(84) %
Pre-provision net revenue (PPNR) (non-GAAP)
k
186,203
181,980
220,709
195,094
86,615
2 %
115 %
Less: Non-interest income adjustments
a
3,883
(12,732)
15,023
16,252
(8,074)
nm
nm
Add: Non-interest expense adjustments
b
10,598
42,888
22,955
31,768
117,189
(75) %
(91) %
Operating PPNR (non-GAAP)
l
$ 200,684
$ 212,136
$ 258,687
$ 243,114
$ 195,730
(5) %
3 %
Net income (loss) (GAAP)
j
$ 124,080
$ 93,531
$ 135,845
$ 133,377
$ (14,038)
33 %
nm
Less: Non-interest income adjustments
a
3,883
(12,732)
15,023
16,252
(8,074)
nm
nm
Add: Non-interest expense adjustments
b
10,598
42,888
22,955
31,768
117,189
(75) %
(91) %
Tax effect of adjustments
(3,620)
(7,539)
(9,482)
(11,981)
(23,565)
(52) %
(85) %
Operating net income (non-GAAP)
m
$ 134,941
$ 116,148
$ 164,341
$ 169,416
$ 71,512
16 %
89 %
nm = Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."
Columbia Banking System, Inc.
GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
Quarter Ended
% Change
($ in thousands, except per share data)
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Seq. Quarter
Year over Year
Average assets
n
$ 52,083,973
$ 51,832,356
$ 53,011,361
$ 53,540,574
$ 39,425,975
- %
32 %
Less: Average goodwill and other intangible assets, net
1,619,134
1,652,282
1,684,093
1,718,705
623,042
(2) %
160 %
Average tangible assets
o
$ 50,464,839
$ 50,180,074
$ 51,327,268
$ 51,821,869
$ 38,802,933
1 %
30 %
Average common shareholders' equity
p
$ 4,985,875
$ 4,695,736
$ 4,866,975
$ 4,935,239
$ 3,349,761
6 %
49 %
Less: Average goodwill and other intangible assets, net
1,619,134
1,652,282
1,684,093
1,718,705
623,042
(2) %
160 %
Average tangible common equity
q
$ 3,366,741
$ 3,043,454
$ 3,182,882
$ 3,216,534
$ 2,726,719
11 %
23 %
Weighted average basic shares outstanding
r
208,260
208,083
208,070
207,977
156,383
- %
33 %
Weighted average diluted shares outstanding
s
208,956
208,739
208,645
208,545
156,383
- %
34 %
Select Per-Share & Performance Metrics
Earnings-per-share - basic
j / r
$ 0.60
$ 0.45
$ 0.65
$ 0.64
$ (0.09)
33 %
nm
Earnings-per-share - diluted
j / s
$ 0.59
$ 0.45
$ 0.65
$ 0.64
$ (0.09)
31 %
nm
Efficiency ratio (1)
h / f
60.57 %
64.81 %
57.82 %
62.60 %
79.71 %
(4.24)
(19.14)
Non-interest expense to average assets
h / n
2.22 %
2.58 %
2.28 %
2.46 %
3.53 %
(0.36)
(1.31)
Return on average assets
j / n
0.96 %
0.72 %
1.02 %
1.00 %
(0.14) %
0.24
1.10
Return on average tangible assets
j / o
0.99 %
0.74 %
1.05 %
1.03 %
(0.15) %
0.25
1.14
PPNR return on average assets
k / n
1.44 %
1.39 %
1.65 %
1.46 %
0.89 %
0.05
0.55
Return on average common equity
j / p
10.01 %
7.90 %
11.07 %
10.84 %
(1.70) %
2.11
11.71
Return on average tangible common equity
j / q
14.82 %
12.19 %
16.93 %
16.63 %
(2.09) %
2.63
16.91
Operating Per-Share & Performance Metrics
Operating earnings-per-share - basic (2)
m / r
$ 0.65
$ 0.56
$ 0.79
$ 0.81
$ 0.46
16 %
41 %
Operating earnings-per-share - diluted (2)
m / s
$ 0.65
$ 0.56
$ 0.79
$ 0.81
$ 0.46
16 %
41 %
Operating efficiency ratio, as adjusted (1), (2), (3)
u / y
56.97 %
57.31 %
51.26 %
54.04 %
52.84 %
(0.34)
4.13
Operating non-interest expense to average assets
i / n
2.14 %
2.25 %
2.10 %
2.22 %
2.32 %
(0.11)
(0.18)
Operating return on average assets (2)
m / n
1.04 %
0.89 %
1.23 %
1.27 %
0.74 %
0.15
0.30
Operating return on average tangible assets (2)
m / o
1.08 %
0.92 %
1.27 %
1.31 %
0.75 %
0.16
0.33
Operating PPNR return on average assets (2)
l / n
1.55 %
1.62 %
1.94 %
1.82 %
2.01 %
(0.07)
(0.46)
Operating return on average common equity (2)
m / p
10.89 %
9.81 %
13.40 %
13.77 %
8.66 %
1.08
2.23
Operating return on average tangible common equity (2)
m / q
16.12 %
15.14 %
20.48 %
21.13 %
10.64 %
0.98
5.48
nm = Percentage changes greater than +/-500% are considered not meaningful and are presented as "n/m."
(1)
Tax-exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate and added to stated revenue for this calculation.
(2)
Non-interest expense adjustments were revised subsequent to the Company's reporting of its earnings results for the three months ended December 31, 2023. The revision includes the FDIC special assessment in 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.
(3)
The operating efficiency ratio has been adjusted 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.
Total Revenue, excluding BOLI tax equivalent adjustments (tax equivalent)
x
476,510
521,445
527,190
526,206
431,061
(9) %
11 %
Less: Non-interest income adjustments
a
3,883
(12,732)
15,023
16,252
(8,074)
nm
nm
Total Adjusted Operating Revenue, excluding BOLI tax equivalent adjustments (tax equivalent) (non-GAAP)
y
$ 480,393
$ 508,713
$ 542,213
$ 542,458
$ 422,987
(6) %
14 %
Efficiency ratio (1)
h / f
60.57 %
64.81 %
57.82 %
62.60 %
79.71 %
(4.24)
(19.14)
Operating efficiency ratio, as adjusted (non-GAAP) (1), (2), (3)
u / y
56.97 %
57.31 %
51.26 %
54.04 %
52.84 %
(0.34)
4.13
nm = Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."
(1)
Tax-exempt income has been adjusted to a taxable equivalent basis using a 21% tax rate and added to stated revenue for this calculation.
(2)
Non-interest expense adjustments were revised subsequent to the Company's reporting of its earnings results for the three months ended December 31, 2023. The revision includes the FDIC special assessment in 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.
(3)
The operating efficiency ratio has been adjusted 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.
Columbia Banking System, Inc.
GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
Quarter Ended
% Change
($ in thousands)
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Seq. Quarter
Year over Year
Loans and leases interest income
a
$ 574,519
$ 577,092
$ 567,929
$ 551,997
$ 412,726
- %
39 %
Less: Acquired loan accretion - rate related (2), (3)
b
23,482
26,914
28,963
30,548
11,832
(13) %
98 %
Less: Acquired loan accretion - credit related (3)
c
5,119
5,430
6,370
7,100
3,806
(6) %
34 %
Adjusted loans and leases interest income
d=a-b-c
$ 545,918
$ 544,748
$ 532,596
$ 514,349
$ 397,088
- %
37 %
Taxable securities interest income
e
$ 78,724
$ 82,872
$ 85,007
$ 81,617
$ 40,448
(5) %
95 %
Less: Acquired taxable securities accretion - rate related
f
31,527
34,290
39,219
34,801
15,356
(8) %
105 %
Adjusted Taxable securities interest income
g=e-f
$ 47,197
$ 48,582
$ 45,788
$ 46,816
$ 25,092
(3) %
88 %
Non-taxable securities interest income (1)
h
$ 7,886
$ 8,073
$ 8,085
$ 8,010
$ 4,068
(2) %
94 %
Less: Acquired non-taxable securities accretion - rate related
i
2,270
2,309
2,288
2,274
901
(2) %
152 %
Adjusted Taxable securities interest income (1)
j=h-i
$ 5,616
$ 5,764
$ 5,797
$ 5,736
$ 3,167
(3) %
77 %
Interest income (1)
k
$ 685,207
$ 692,741
$ 697,169
$ 676,922
$ 476,622
(1) %
44 %
Less: Acquired loan and securities accretion - rate related
Less: Acquired loan, securities, and interest-bearing liabilities accretion - rate related (3)
u=l-r
57,336
63,757
70,900
67,960
28,239
(10) %
103 %
Less: Acquired loan accretion - credit related (3)
c
5,119
5,430
6,370
7,100
3,806
(6) %
34 %
Adjusted net interest income (1)
v=t-u-c
$ 361,889
$ 385,543
$ 404,761
$ 410,108
$ 343,324
(6) %
5 %
Average loans and leases
aa
37,597,101
37,333,310
37,050,518
37,169,315
29,998,630
1 %
25 %
Average taxable securities
ab
8,081,003
7,903,053
8,356,165
8,656,147
4,960,966
2 %
63 %
Average non-taxable securities
ac
851,342
809,551
844,417
865,278
437,020
5 %
95 %
Average interest-earning assets
ad
48,280,787
47,838,229
48,981,105
49,442,518
37,055,705
1 %
30 %
Average interest-bearing deposits
ae
27,742,579
26,622,343
25,121,745
24,494,717
19,496,551
4 %
42 %
Average interest-bearing liabilities
af
32,318,653
31,226,600
31,413,978
31,372,416
22,548,264
3 %
43 %
nm = Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."
(1)
Tax-exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.
(2)
Includes discount accretion related to UHC's 2014 acquisition of Sterling Financial Corporation.
(3)
The cumulative fair value discount on historical Columbia loans was established as of February 28, 2023, and the allocation between the credit-related discount and the rate-related discount was established at that time. Our disclosure of credit-related and rate-related discount accretion is an estimate based on the relative allocation of these two items to the discount at the closing of the merger.
Columbia Banking System, Inc.
GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
Quarter Ended
% Change
($ in thousands)
Mar 31, 2024
Dec 31, 2023
Sep 30, 2023
Jun 30, 2023
Mar 31, 2023
Seq. Quarter
Year over Year
Average yield on loans and leases
a / aa
6.13 %
6.13 %
6.08 %
5.95 %
5.55 %
-
0.58
Less: Acquired loan accretion - rate related (2),(3)
b / aa
0.25 %
0.29 %
0.31 %
0.33 %
0.16 %
(0.04)
0.09
Less: Acquired loan accretion - credit related (3)
c / aa
0.05 %
0.06 %
0.07 %
0.08 %
0.05 %
(0.01)
-
Adjusted average yield on loans and leases
d / aa
5.83 %
5.78 %
5.70 %
5.54 %
5.34 %
0.05
0.49
Average yield on taxable securities
e / ab
3.90 %
4.19 %
4.07 %
3.77 %
3.26 %
(0.29)
0.64
Less: Acquired taxable securities accretion - rate related
f / ab
1.57 %
1.72 %
1.86 %
1.61 %
1.26 %
(0.15)
0.31
Adjusted average yield on taxable securities
g / ab
2.33 %
2.47 %
2.21 %
2.16 %
2.00 %
(0.14)
0.33
Average yield on non-taxable securities (1)
h / ac
3.71 %
3.99 %
3.83 %
3.70 %
3.72 %
(0.28)
(0.01)
Less: Acquired non-taxable securities accretion - rate related
i / ac
1.07 %
1.13 %
1.07 %
1.05 %
0.84 %
(0.06)
0.23
Adjusted yield on non-taxable securities (1)
j / ac
2.64 %
2.86 %
2.76 %
2.65 %
2.88 %
(0.22)
(0.24)
Average yield on interest-earning assets (1)
k / ad
5.69 %
5.75 %
5.65 %
5.48 %
5.19 %
(0.06)
0.50
Less: Acquired loan and securities accretion - rate related
l / ad
0.48 %
0.53 %
0.57 %
0.55 %
0.31 %
(0.05)
0.17
Less: Acquired loan accretion - credit related
c / ad
0.04 %
0.05 %
0.05 %
0.06 %
0.04 %
(0.01)
-
Adjusted average yield on interest-earning assets (1)
m / ad
5.17 %
5.17 %
5.03 %
4.87 %
4.84 %
-
0.33
Average rate on interest-bearing deposits
n / ae
2.88 %
2.54 %
2.01 %
1.64 %
1.32 %
0.34
1.56
Less: Acquired deposit accretion
o / ae
- %
- %
(0.01) %
- %
- %
-
-
Adjusted average rate on interest-bearing deposits
Adjusted average rate on interest-bearing liabilities
s / af
3.25 %
3.02 %
2.73 %
2.45 %
1.82 %
0.23
1.43
Net interest margin (1)
t / ad
3.52 %
3.78 %
3.91 %
3.93 %
4.08 %
(0.26)
(0.56)
Less: Acquired loan, securities, and interest-bearing liabilities accretion - rate related (3)
u / ad
0.48 %
0.53 %
0.58 %
0.55 %
0.31 %
(0.05)
0.17
Less: Acquired loan accretion - credit related (3)
c / ad
0.04 %
0.05 %
0.05 %
0.06 %
0.04 %
(0.01)
-
Adjusted net interest margin (1)
v / ad
3.00 %
3.20 %
3.28 %
3.32 %
3.73 %
(0.20)
(0.73)
(1)
Tax-exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.
(2)
Includes discount accretion related to UHC's 2014 acquisition of Sterling Financial Corporation.
(3)
The cumulative fair value discount on historical Columbia loans was established as of February 28, 2023, and the allocation between the credit-related discount and the rate-related discount was established at that time. Our disclosure of credit-related and rate-related discount accretion is an estimate based on the relative allocation of these two items to the discount at closing.