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 | Operating earnings per | Book value per | Tangible book value |
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 | • 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. | |
• 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 | • 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. | |
• Non-interest expense decreased by $50 million due to lower discretionary spend and the fourth quarter's larger FDIC special assessment. | ||
Credit | • Net charge-offs were 0.47% of average loans and leases (annualized), compared to 0.31% in the prior quarter. | |
• Provision expense of $17 million compares to $55 million in the prior quarter. | ||
• Non-performing assets to total assets was 0.28%, compared to 0.22% as of December 31, 2023. | ||
Capital | • Estimated total risk-based capital ratio of 12.0% and estimated common equity tier 1 risk-based capital ratio of 9.8%. | |
• Declared a quarterly cash dividend of $0.36 per common share on February 9, 2024, which was paid March 11, 2024. | ||
Notable | • Recalibrated the commercial CECL model to be more reflective of the post-merger loan portfolio after a full year operating as a combined organization. | |
• 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.
Register for the call: https://register.vevent.com/register/BI5839ee065d874d2fa744be1fe2d2558d
Join the audiocast: https://edge.media-server.com/mmc/p/jc6j526v/
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.
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 | ||||||
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 | ||||||
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. | 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. | 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. | 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. | 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. | 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 | Interest | Average | Average | Interest | Average | Average | Interest | Average | ||||||||
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. | 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. | 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. | 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 | ||||||||
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. |
Columbia Banking System, Inc. | |||||||||||||||
GAAP to Non-GAAP Reconciliation - Continued | |||||||||||||||
Operating Efficiency Ratio, as adjusted | |||||||||||||||
(Unaudited) | |||||||||||||||
Quarter Ended | % Change | ||||||||||||||
($ in thousands) | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Seq. | Year | ||||||||
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 % | |||||||
Less: B&O taxes | t | (3,223) | (2,727) | (3,275) | (3,647) | (2,129) | 18 % | 51 % | |||||||
Operating non-interest expense, excluding B&O taxes (non-GAAP) | u | $ 273,695 | $ 291,561 | $ 277,917 | $ 293,144 | $ 223,500 | (6) % | 22 % | |||||||
Net interest income (tax equivalent) (1) | v | $ 424,344 | $ 454,730 | $ 482,031 | $ 485,168 | $ 375,369 | (7) % | 13 % | |||||||
Non-interest income (GAAP) | d | 50,357 | 65,533 | 43,981 | 39,678 | 54,735 | (23) % | (8) % | |||||||
Add: BOLI tax equivalent adjustment (1) | w | 1,809 | 1,182 | 1,178 | 1,360 | 957 | 53 % | 89 % | |||||||
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. | 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 | l=b+f+i | 57,279 | 63,513 | 70,470 | 67,623 | 28,089 | (10) % | 104 % | |||||||
Less: Acquired loan accretion - credit related | c | 5,119 | 5,430 | 6,370 | 7,100 | 3,806 | (6) % | 34 % | |||||||
Adjusted interest income (1) | m=k-l-c | $ 622,809 | $ 623,798 | $ 620,329 | $ 602,199 | $ 444,727 | — % | 40 % | |||||||
Interest-bearing deposits interest expense | n | $ 198,435 | $ 170,659 | $ 126,974 | $ 100,408 | $ 63,613 | 16 % | 212 % | |||||||
Less: Acquired deposit accretion | o | — | (187) | (373) | (280) | (93) | nm | nm | |||||||
Adjusted interest-bearing deposits interest expense | p=n-o | $ 198,435 | $ 170,846 | $ 127,347 | $ 100,688 | $ 63,706 | 16 % | 211 % | |||||||
Interest expense | q | $ 260,863 | $ 238,011 | $ 215,138 | $ 191,754 | $ 101,253 | 10 % | 158 % | |||||||
Less: Acquired interest-bearing liabilities accretion (2) | r | (57) | (244) | (430) | (337) | (150) | (77) % | (62) % | |||||||
Adjusted interest expense | s=q-r | $ 260,920 | $ 238,255 | $ 215,568 | $ 192,091 | $ 101,403 | 10 % | 157 % | |||||||
Net Interest Income (1) | t | $ 424,344 | $ 454,730 | $ 482,031 | $ 485,168 | $ 375,369 | (7) % | 13 % | |||||||
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. | 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 | p / ae | 2.88 % | 2.54 % | 2.02 % | 1.64 % | 1.32 % | 0.34 | 1.56 | |||||||
Average rate on interest-bearing liabilities | q / af | 3.25 % | 3.02 % | 2.72 % | 2.45 % | 1.82 % | 0.23 | 1.43 | |||||||
Less: Acquired interest-bearing liabilities accretion (2) | r / af | — % | — % | (0.01) % | — % | — % | — | — | |||||||
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. |
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SOURCE Columbia Banking System, Inc.
