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PORTLAND, Ore., April 26, 2023 First Quarter 2023 Results
/PRNewswire/ --
COLUMBIA BANKING SYSTEM, INC. REPORTS FIRST QUARTER 2023 RESULTS | ||||||
$(0.09) | $0.46 | $23.44 | $15.12 | |||
Net loss 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 |
"Today marks a historic moment for our franchise as we report results for Columbia Banking System and its subsidiary Umpqua Bank together as one company," said Clint Stein, President and CEO. "Our first quarter results highlight a flexible balance sheet characterized by solid liquidity, a diversified loan portfolio, and a granular core deposit base. While purchase accounting adjustments such as the initial provision for credit losses and merger-related expenses impacted our reported results, I am pleased to announce we successfully completed our core systems conversion in March, keeping us on target to realize our cost-savings expectations by the end of the third quarter. It was a transformative quarter for our company, and I want to thank our associates for their tireless efforts helping customers and each other through the merger close and systems conversion." |
–Clint Stein, President and CEO of Columbia Banking System, Inc. |
1Q23 HIGHLIGHTS (COMPARED TO 4Q22) | ||
Net Interest Income and NIM | • Net interest income increased by $69 million or 23% on a quarter-to-quarter basis due to one month as a combined organization and the net favorable impact of higher interest rates. | |
• Net interest margin was 4.08%, up 7 basis points from the prior quarter. Net interest margin for the month of March was 4.31%, which includes a 76-basis point net benefit from purchase accounting accretion and amortization. | ||
Non-Interest Income and Expense | • Non-interest income increased by $20 million due primarily to a $16 million linked-quarter favorable change related to cumulative non-merger fair value accounting and hedges. | |
• Non-interest expense increased by $148 million due to higher merger-related expenses and a higher expense run rate in March as a combined organization. | ||
Credit Quality | • Net charge-offs were 0.23% of average loans and leases (annualized) and centered in the FinPac portfolio as activity was otherwise de minimis. | |
• Provision expense of $106 million includes an $88 million initial provision related to non-purchased credit deteriorated loan balances. The remaining expense relates to changes in the economic forecasts used in credit models. | ||
• Non-performing assets to total assets was 0.14%. | ||
Capital | • Estimated total risk-based capital ratio of 11.0% and estimated common equity tier 1 risk-based capital ratio of 8.9%. | |
• We expect the accretion of purchase accounting fair value marks through income to meaningfully and consistently build capital and enhance flexibility in the coming quarters. | ||
Notable items | • Purchase accounting fair value adjustments related to credit of $130 million and interest rates of $1.6 billion at closing on historical Columbia loans and securities. | |
• $116 million in merger-related expenses, including a $20 million charitable contribution to the Umpqua Bank Charitable Foundation. | ||
1Q23 KEY FINANCIAL DATA | |||||
PERFORMANCE METRICS | 1Q23 | 4Q22 | 1Q22 | ||
Return on average assets | (0.14) % | 1.04 % | 1.21 % | ||
Return on average tangible common equity1 | (2.09) % | 13.53 % | 13.66 % | ||
Operating return on average assets1 | 0.74 % | 1.24 % | 1.03 % | ||
Operating return on average tangible common equity1 | 10.64 % | 16.18 % | 11.62 % | ||
Net interest margin | 4.08 % | 4.01 % | 3.14 % | ||
Efficiency ratio - consolidated | 79.71 % | 57.24 % | 59.02 % | ||
Loan to deposit ratio | 89.19 % | 96.64 % | 86.05 % | ||
INCOME STATEMENT ($ in 000s, excl. per share data) | 1Q23 | 4Q22 | 1Q22 | ||
Net interest income | $374,698 | $305,479 | $228,763 | ||
Provision for credit losses | $105,539 | $32,948 | $4,804 | ||
Non-interest income | $54,735 | $34,879 | $79,969 | ||
Non-interest expense | $342,818 | $194,982 | $182,430 | ||
Pre-provision net revenue 1 | $86,615 | $145,376 | $126,302 | ||
Operating pre-provision net revenue1 | $195,730 | $167,094 | $108,125 | ||
Earnings per common share - diluted 2 | ($0.09) | $0.64 | $0.70 | ||
Operating earnings per common share - diluted 1,2 | $0.46 | $0.76 | $0.60 | ||
Dividends paid per share 2 | $0.35 | $0.35 | $0.35 | ||
BALANCE SHEET | 1Q23 | 4Q22 | 1Q22 | ||
Total assets | $54.0B | $31.8B | $30.6B | ||
Loans and leases | $37.1B | $26.2B | $23.0B | ||
Total deposits | $41.6B | $27.1B | $26.7B | ||
Book value per common share 2 | $23.44 | $19.18 | $20.17 | ||
Tangible book value per share[1][2] | $15.12 | $19.14 | $20.11 | ||
Tangible book value per share, ex AOCI 1,2 | $16.56 | $22.44 | $21.53 | ||
Organizational Update
On February 28, 2023, Columbia Banking System, Inc. ("Columbia", "we" or "our") 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 completed its core systems conversion on March 20, 2023, and branch consolidations are scheduled to occur through the second quarter of 2023.
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 the first quarter of 2023 may not be directly comparable to prior reported periods. The number of shares issued and outstanding, earnings per share, additional paid-in capital, and all references to share quantities or metrics of Columbia have been retrospectively restated to reflect the equivalent number of shares issued in the merger as the merger was treated as a reverse merger. 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 $375 million for the first quarter of 2023, up $69 million from the prior quarter. The increase, which includes $32 million of purchase accounting accretion and amortization, reflects one month of the combined company's larger balance sheet as well as the net favorable impact of higher interest rates.
Columbia's net interest margin was 4.08% for the first quarter of 2023, up 7 basis points from 4.01% for the fourth quarter of 2022. The net interest margin for the month of March was 4.31%, which includes a 76-basis point net benefit from purchase accounting accretion and amortization and an approximate 10-basis point adverse impact from holding higher cash balances funded by borrowings beginning March 13, 2023. The cost of interest-bearing deposits increased 55 basis points on a linked-quarter basis to 1.32% for the first quarter of 2023, which compares to 1.33% for the month of March and 1.43% on March 31, 2023. Please refer to the Q1 2023 Earnings Presentation for additional net interest margin change details and interest rate sensitivity information as well as 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 $55 million for the first quarter of 2023, up $20 million from the prior quarter. While results benefited from one month as a combined organization, the increase was primarily driven by a $16 million favorable change in cumulative fair value adjustments and mortgage servicing rights ("MSR") hedging activity. A net fair value gain of $8.1 million in the first quarter compares to a net fair value loss of $8.1 million in the fourth quarter, as detailed in our non-GAAP disclosures.
Non-interest Expense
Non-interest expense was $343 million for the first quarter of 2023, up $148 million from the prior quarter level. The increase reflects one month of the higher expense rate of the combined organization as well as a $104 million linked-quarter increase in merger-related expenses, which were $116 million in the first quarter, inclusive of a $20 million contribution to the Umpqua Bank Charitable Foundation that was outlined when the merger was announced in October 2021. Please refer to the Q1 2023 Earnings Presentation for additional expense details, including an update on realized merger-related cost-savings through March 31, 2023.
Balance Sheet
Total consolidated assets were $54.0 billion as of March 31, 2023, an increase of $22.2 billion compared to $31.8 billion as of December 31, 2022. The increase was driven by the addition of historical Columbia balances at fair value on February 28, 2023, related intangible assets, and higher cash balances added in March that were funded by borrowings. Cash and cash equivalents was $3.6 billion as of March 31, 2023, an increase of $2.3 billion relative to December 31, 2022. Including secured off-balance sheet lines of credit, total available liquidity was $17.9 billion as of March 31, 2023, representing 33% of total assets, 43% of total deposits, and 121% of uninsured deposits. Please refer to the Q1 2023 Earnings Presentation for additional details related to our liquidity position.
Available for sale securities, which are held on balance sheet at fair value, were $9.2 billion as of March 31, 2023, an increase of $6.1 billion relative to December 31, 2022, primarily due to the addition of $6.2 billion of historical Columbia balances, which were categorized as available for sale at quarter end. The net unrealized loss on historical Columbia securities was eliminated as of February 28, 2023, as part of the reverse merger method of accounting, and these securities had a pre-tax net unrealized gain of $84 million as of March 31, 2023. On a consolidated basis, our available for sale securities balance of $9.2 billion includes a pre-tax net unrealized loss of $397 million as historical UHC balances were not marked as part of the merger, and the net unrealized gain position associated with historical Columbia balances does not fully offset the net unrealized loss position related to the remainder of the consolidated portfolio. Held to maturity securities were $2.4 million at March 31, 2023, and represent investments in local community housing bonds; there is no unrealized loss associated with these balances.
Following the close of the merger, we restructured a portion of the historical Columbia securities portfolio during the first week of March by selling $1.2 billion of securities and purchasing $937 million of securities with the proceeds. The restructure transactions resulted in no gain or loss on the income statement. Purchases included agencies, mortgage-backed securities, and collateralized mortgage obligations with a projected average yield of 4.63%. The restructuring reduced the potential adverse impact to net interest income in a declining interest rate environment, which the Q1 2023 Earnings Presentation reviews.
Gross loans and leases were $37.1 billion as of March 31, 2023, an increase of $10.9 billion relative to December 31, 2022, due to the addition of $10.9 billion of historical Columbia balances at fair value. "On an organic basis, loans were up just slightly during the first quarter, as drawdowns related to single-family home construction offset slight declines in commercial portfolio balances," commented Tory Nixon, President of Umpqua Bank. Please refer to the Q1 2023 Earnings Presentation for additional details related to our loan portfolio, which include underwriting characteristics, the composition of our commercial portfolios, and enhanced disclosure related to our office portfolio.
Total deposits were $41.6 billion as of March 31, 2023, an increase of $14.5 billion relative to December 31, 2022, primarily due to the addition of $15.2 billion of historical Columbia balances at fair value. "Our deposit balances continued to be affected by market liquidity tightening and the impact of inflation on customer spending," stated Mr. Nixon. "Declining balances with existing customers was the primary driver of the net reduction in deposits during the month of March and for the first quarter on an organic basis. We were pleased to see continued new account acquisition in March in both the consumer and commercial bank across all major product types." Please refer to the Q1 2023 Earnings Presentation for additional details related to deposit characteristics and flows.
Credit Quality
The allowance for credit losses was $436 million, or 1.18% of loans and leases, as of March 31, 2023, compared to $315 million, or 1.21% of loans and leases, as of December 31, 2022. The $121 million increase in the allowance includes the addition of $26 million related to historical Columbia purchased credit deteriorated ("PCD") loans and $5.8 million related to historical Columbia off balance sheet commitments, which were booked at the merger's close and did not affect the income statement. The provision for credit losses was $106 million for the first quarter of 2023, which includes an initial provision of $88 million for historical Columbia non-PCD loans. Outside the initial provision, the quarter's expense was driven almost entirely by changes between the November 2022 and February 2023 economic forecasts used in credit models, with a modest expense associated with the change in mix. Please refer to the Q1 2023 Earnings Presentation for additional details related to the allowance for credit losses, including a breakout of the aforementioned impacts of the merger.
Net charge-offs were 0.23% of average loans and leases (annualized) for the first quarter of 2023, compared to 0.19% for the fourth quarter of 2022. Net charge-off activity continued to be centered in the FinPac portfolio as bank charge-off activity was de minimis. As of March 31, 2023, non-performing assets were $76 million, or 0.14% of total assets, compared to $59 million, or 0.18% as of December 31, 2022. The $17 million linked-quarter increase primarily reflects the addition of historical Columbia balances.
Capital
As of March 31, 2023, Columbia's book value per common share increased to $23.44, compared to $19.18 at December 31, 2022, which was retrospectively restated under the reverse merger method of accounting. The linked-quarter change in book value primarily reflects common shares issued and exchanged as a result of the merger and a change in accumulated other comprehensive (loss) income ("AOCI") to $(300) million at March 31, 2023, compared to $(427) million at the prior quarter-end. The change in AOCI is due primarily to a reduction in the tax-effected net unrealized loss on available for sale securities to $295 million at March 31, 2023, compared to $403 million at December 31, 2022. Tangible book value per common share[3] decreased to $15.12, compared to $19.14 at December 31, 2023 as a result of $1.0 billion of goodwill and $710 million of core deposit intangible assets added through the merger.
Columbia's estimated total risk-based capital ratio was 11.0% and its estimated common equity tier 1 risk-based capital ratio was 8.9% as of March 31, 2023. Columbia remains above current "well-capitalized" regulatory minimums. "While initial fair value marks drove the linked quarter decline in our regulatory capital ratios, we expect loan and investment securities discount accretion to contribute meaningfully to capital build over time," stated Ron Farnsworth, Chief Financial Officer of Columbia. The regulatory capital ratios as of March 31, 2023 are estimates, pending completion and filing of Columbia's regulatory reports.
Earnings Presentation and Conference Call Information
Columbia's Q1 2023 Earnings Presentation provides additional disclosure. A copy will be available on our investor relations page: www.columbiabankingsystem.com.
Columbia will host its first quarter 2023 earnings conference call on April 26, 2023, 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 2023 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/BI3ca3e280dadd437cafdf87ba3e2fcb28 Join the audiocast: https://edge.media-server.com/mmc/p/jtad2627Access 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. In March of 2023, Columbia and Umpqua combined two of the Pacific Northwest's premier financial institutions under the Umpqua Bank brand to create one of the largest banks headquartered in the West and a top-30 U.S. bank. With over $50 billion of assets, Umpqua Bank combines the resources, sophistication and expertise of a national bank with a commitment to deliver personalized service at scale. The bank operates in Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah, and Washington and 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 Management and Columbia Trust Company, a subsidiary of Columbia. 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 (the "SEC"). 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 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 or news developments concerning other banks on general investor sentiment regarding the liquidity 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; the possibility that the integration following the merger may be more expensive than anticipated, including as a result of unexpected factors or events, diversion of management's attention from ongoing business operations and opportunities; 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 the 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 the comparable GAAP measurement.2 Prior periods have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the merger of 0.5958.3 "Non-GAAP" financial measure. See GAAP to Non-GAAP Reconciliation for the comparable GAAP measurement.
TABLE INDEX | |
Page | |
Consolidated Statements of Operations | 7 |
Consolidated Balance Sheets | 7 |
Financial Highlights | 9 |
Loan & Lease Portfolio Balances and Mix | 9 |
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 | 14 |
Purchase Price Allocation | 15 |
GAAP to Non-GAAP Reconciliation | 17 |
Columbia Banking System, Inc. | |||||||||||||
Consolidated Statements of Operations | |||||||||||||
(Unaudited) | |||||||||||||
Quarter Ended | % Change | ||||||||||||
($ in thousands, except per share data) | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Seq. Quarter | Year over Year | ||||||
Interest income: | |||||||||||||
Loans and leases | $ 413,525 | $ 322,350 | $ 278,830 | $ 234,674 | $ 214,404 | 28 % | 93 % | ||||||
Interest and dividends on investments: | |||||||||||||
Taxable | 39,729 | 18,108 | 18,175 | 17,256 | 18,725 | 119 % | 112 % | ||||||
Exempt from federal income tax | 3,397 | 1,288 | 1,322 | 1,369 | 1,372 | 164 % | 148 % | ||||||
Dividends | 719 | 182 | 86 | 84 | 86 | 295 % | nm | ||||||
Temporary investments and interest bearing deposits | 18,581 | 10,319 | 5,115 | 2,919 | 1,353 | 80 % | nm | ||||||
Total interest income | 475,951 | 352,247 | 303,528 | 256,302 | 235,940 | 35 % | 102 % | ||||||
Interest expense: | |||||||||||||
Deposits | 63,613 | 31,174 | 9,090 | 4,015 | 3,916 | 104 % | nm | ||||||
Securities sold under agreement to repurchase and federal funds purchased | 406 | 323 | 545 | 66 | 63 | 26 % | nm | ||||||
Borrowings | 28,764 | 8,023 | 798 | 50 | 49 | 259 % | nm | ||||||
Junior and other subordinated debentures | 8,470 | 7,248 | 5,491 | 4,001 | 3,149 | 17 % | 169 % | ||||||
Total interest expense | 101,253 | 46,768 | 15,924 | 8,132 | 7,177 | 117 % | nm | ||||||
Net interest income | 374,698 | 305,479 | 287,604 | 248,170 | 228,763 | 23 % | 64 % | ||||||
Provision for credit losses | 105,539 | 32,948 | 27,572 | 18,692 | 4,804 | 220 % | nm | ||||||
Non-interest income: | |||||||||||||
Service charges on deposits | 14,312 | 12,139 | 12,632 | 12,011 | 11,583 | 18 % | 24 % | ||||||
Card-based fees | 11,561 | 9,017 | 9,115 | 10,530 | 8,708 | 28 % | 33 % | ||||||
Financial services and trust revenue | 1,297 | 25 | 27 | 27 | 11 | nm | nm | ||||||
Residential mortgage banking revenue (loss), net | 7,816 | (1,812) | 17,341 | 30,544 | 60,786 | nm | (87) % | ||||||
Gain on sale of debt securities, net | — | — | — | — | 2 | nm | (100) % | ||||||
Gain (loss) on equity securities, net | 2,416 | 284 | (2,647) | (2,075) | (2,661) | nm | nm | ||||||
Gain on loan and lease sales, net | 940 | 1,531 | 1,525 | 1,303 | 2,337 | (39) % | (60) % | ||||||
BOLI income | 2,790 | 2,033 | 2,023 | 2,110 | 2,087 | 37 % | 34 % | ||||||
Other income (loss) | 13,603 | 11,662 | (10,571) | 785 | (2,884) | 17 % | nm | ||||||
Total non-interest income | 54,735 | 34,879 | 29,445 | 55,235 | 79,969 | 57 % | (32) % | ||||||
Non-interest expense: | |||||||||||||
Salaries and employee benefits | 136,092 | 107,982 | 109,164 | 110,942 | 113,138 | 26 % | 20 % | ||||||
Occupancy and equipment, net | 41,700 | 34,021 | 35,042 | 34,559 | 34,829 | 23 % | 20 % | ||||||
Intangible amortization | 12,660 | 1,019 | 1,025 | 1,026 | 1,025 | nm | nm | ||||||
FDIC assessments | 6,113 | 3,487 | 3,007 | 2,954 | 4,516 | 75 % | 35 % | ||||||
Merger related expenses | 115,898 | 11,637 | 769 | 2,672 | 2,278 | nm | nm | ||||||
Other expenses | 30,355 | 36,836 | 28,957 | 27,421 | 26,644 | (18) % | 14 % | ||||||
Total non-interest expense | 342,818 | 194,982 | 177,964 | 179,574 | 182,430 | 76 % | 88 % | ||||||
(Loss) income before (benefit) provision for income taxes | (18,924) | 112,428 | 111,513 | 105,139 | 121,498 | (117) % | (116) % | ||||||
(Benefit) provision for income taxes | (4,886) | 29,464 | 27,473 | 26,548 | 30,341 | (117) % | (116) % | ||||||
Net (loss) income | $ (14,038) | $ 82,964 | $ 84,040 | $ 78,591 | $ 91,157 | (117) % | (115) % | ||||||
Weighted average basic shares outstanding (1) | 156,383 | 129,321 | 129,319 | 129,306 | 129,159 | 21 % | 21 % | ||||||
Weighted average diluted shares outstanding (1) | 156,383 | 129,801 | 129,733 | 129,673 | 129,693 | 20 % | 21 % | ||||||
(Loss) earnings per common share – basic (1) | $ (0.09) | $ 0.64 | $ 0.65 | $ 0.61 | $ 0.71 | (114) % | (113) % | ||||||
(Loss) earnings per common share – diluted (1) | $ (0.09) | $ 0.64 | $ 0.65 | $ 0.61 | $ 0.70 | (114) % | (113) % | ||||||
nm = not meaningful |
(1) | Prior periods have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the merger of 0.5958. |
Columbia Banking System, Inc. Consolidated Balance Sheets | |||||||||||||
(Unaudited) | |||||||||||||
% Change | |||||||||||||
($ in thousands, except per share data) | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Seq. Quarter | Year over Year | ||||||
Assets: | |||||||||||||
Cash and due from banks | $ 555,919 | $ 327,313 | $ 321,447 | $ 315,348 | $ 307,144 | 70 % | 81 % | ||||||
Interest bearing cash and temporary investments | 3,079,266 | 967,330 | 1,232,412 | 687,233 | 2,358,292 | 218 % | 31 % | ||||||
Investment securities: | |||||||||||||
Equity and other, at fair value | 76,532 | 72,959 | 72,277 | 75,347 | 78,966 | 5 % | (3) % | ||||||
Available for sale, at fair value | 9,249,600 | 3,196,166 | 3,136,391 | 3,416,707 | 3,638,080 | 189 % | 154 % | ||||||
Held to maturity, at amortized cost | 2,432 | 2,476 | 2,547 | 2,637 | 2,700 | (2) % | (10) % | ||||||
Loans held for sale | 49,338 | 71,647 | 148,275 | 228,889 | 309,946 | (31) % | (84) % | ||||||
Loans and leases | 37,091,280 | 26,155,981 | 25,507,951 | 24,432,678 | 22,975,761 | 42 % | 61 % | ||||||
Allowance for credit losses on loans and leases | (417,464) | (301,135) | (283,065) | (261,111) | (248,564) | 39 % | 68 % | ||||||
Net loans and leases | 36,673,816 | 25,854,846 | 25,224,886 | 24,171,567 | 22,727,197 | 42 % | 61 % | ||||||
Restricted equity securities | 246,525 | 47,144 | 40,993 | 10,867 | 10,889 | 423 % | nm | ||||||
Premises and equipment, net | 375,190 | 176,016 | 165,305 | 165,196 | 167,369 | 113 % | 124 % | ||||||
Operating lease right-of-use assets | 127,296 | 78,598 | 81,729 | 87,249 | 87,333 | 62 % | 46 % | ||||||
Goodwill | 1,030,142 | — | — | — | — | nm | nm | ||||||
Other intangible assets, net | 702,315 | 4,745 | 5,764 | 6,789 | 7,815 | nm | nm | ||||||
Residential mortgage servicing rights, at fair value | 178,800 | 185,017 | 196,177 | 179,558 | 165,807 | (3) % | 8 % | ||||||
Bank owned life insurance | 641,922 | 331,759 | 329,699 | 328,764 | 328,040 | 93 % | 96 % | ||||||
Deferred tax asset, net | 351,229 | 132,823 | 128,120 | 70,134 | 39,051 | 164 % | nm | ||||||
Other assets | 653,904 | 399,800 | 385,938 | 389,409 | 408,497 | 64 % | 60 % | ||||||
Total assets | $ 53,994,226 | $ 31,848,639 | $ 31,471,960 | $ 30,135,694 | $ 30,637,126 | 70 % | 76 % | ||||||
Liabilities: | |||||||||||||
Deposits | |||||||||||||
Non-interest bearing | $ 17,215,781 | $ 10,288,849 | $ 11,246,358 | $ 11,129,209 | $ 11,058,251 | 67 % | 56 % | ||||||
Interest bearing | 24,370,566 | 16,776,763 | 15,570,749 | 15,003,214 | 15,641,336 | 45 % | 56 % | ||||||
Total deposits | 41,586,347 | 27,065,612 | 26,817,107 | 26,132,423 | 26,699,587 | 54 % | 56 % | ||||||
Securities sold under agreements to repurchase | 271,047 | 308,769 | 383,569 | 527,961 | 499,539 | (12) % | (46) % | ||||||
Borrowings | 5,950,000 | 906,175 | 756,214 | 6,252 | 6,290 | nm | nm | ||||||
Junior subordinated debentures, at fair value | 297,721 | 323,639 | 325,744 | 321,268 | 305,719 | (8) % | (3) % | ||||||
Junior and other subordinated debentures, at amortized cost | 108,066 | 87,813 | 87,870 | 87,927 | 87,984 | 23 % | 23 % | ||||||
Operating lease liabilities | 140,648 | 91,694 | 95,512 | 101,352 | 101,732 | 53 % | 38 % | ||||||
Other liabilities | 755,674 | 585,111 | 588,430 | 440,235 | 328,677 | 29 % | 130 % | ||||||
Total liabilities | 49,109,503 | 29,368,813 | 29,054,446 | 27,617,418 | 28,029,528 | 67 % | 75 % | ||||||
Shareholders' equity: | |||||||||||||
Common stock | 5,788,553 | 3,450,493 | 3,448,007 | 3,445,531 | 3,443,266 | 68 % | 68 % | ||||||
Accumulated deficit | (603,696) | (543,803) | (580,933) | (619,108) | (651,912) | 11 % | (7) % | ||||||
Accumulated other comprehensive loss | (300,134) | (426,864) | (449,560) | (308,147) | (183,756) | (30) % | 63 % | ||||||
Total shareholders' equity | 4,884,723 | 2,479,826 | 2,417,514 | 2,518,276 | 2,607,598 | 97 % | 87 % | ||||||
Total liabilities and shareholders' equity | $ 53,994,226 | $ 31,848,639 | $ 31,471,960 | $ 30,135,694 | $ 30,637,126 | 70 % | 76 % | ||||||
Common shares outstanding at period end (2) | 208,429 | 129,321 | 129,320 | 129,318 | 129,269 | 61 % | 61 % | ||||||
Book value per common share (2) | $ 23.44 | $ 19.18 | $ 18.69 | $ 19.47 | $ 20.17 | 22 % | 16 % | ||||||
Tangible book value per common share (1),(2) | $ 15.12 | $ 19.14 | $ 18.65 | $ 19.42 | $ 20.11 | (21) % | (25) % | ||||||
Tangible equity - common (1),(2) | $ 3,152,266 | $ 2,475,081 | $ 2,411,750 | $ 2,511,487 | $ 2,599,783 | 27 % | 21 % | ||||||
Tangible common equity to tangible assets (1) | 6.03 % | 7.77 % | 7.66 % | 8.34 % | 8.49 % | (1.74) | (2.46) | ||||||
nm = not meaningful |
(1) | See GAAP to Non-GAAP Reconciliation. |
(2) | Prior periods have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the merger of 0.5958. |
Columbia Banking System, Inc. | ||||||||||||||
Financial Highlights | ||||||||||||||
(Unaudited) | ||||||||||||||
Quarter Ended | % Change | |||||||||||||
Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Seq. Quarter | Year over Year | ||||||||
Per Common Share Data: (5) | ||||||||||||||
Dividends (5) | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | 0 % | 0 % | |||||||
Book value (5) | $ 23.44 | $ 19.18 | $ 18.69 | $ 19.47 | $ 20.17 | 22 % | 16 % | |||||||
Tangible book value (1),(5) | $ 15.12 | $ 19.14 | $ 18.65 | $ 19.42 | $ 20.11 | (21) % | (25) % | |||||||
Tangible book value, ex accumulated other comprehensive income (1),(5) | $ 16.56 | $ 22.44 | $ 22.13 | $ 21.80 | $ 21.53 | (26) % | (23) % | |||||||
Performance Ratios: | ||||||||||||||
Efficiency ratio | 79.71 % | 57.24 % | 56.07 % | 59.12 % | 59.02 % | 22.47 | 20.69 | |||||||
Pre-provision net revenue ("PPNR") ROAA (1) | 0.89 % | 1.82 % | 1.80 % | 1.64 % | 1.67 % | (0.93) | (0.78) | |||||||
Return on average assets ("ROAA") | (0.14) % | 1.04 % | 1.09 % | 1.04 % | 1.21 % | (1.18) | (1.35) | |||||||
Return on average common equity | (1.70) % | 13.50 % | 12.99 % | 12.20 % | 13.62 % | (15.20) | (15.32) | |||||||
Return on average tangible common equity (1) | (2.09) % | 13.53 % | 13.02 % | 12.23 % | 13.66 % | (15.62) | (15.75) | |||||||
Performance Ratios - Operating: (1) | ||||||||||||||
Operating efficiency ratio (1) | 53.46 % | 52.01 % | 51.72 % | 58.27 % | 62.02 % | 1.45 | (8.56) | |||||||
Operating PPNR return on average assets (1) | 2.01 % | 2.10 % | 2.12 % | 1.66 % | 1.43 % | (0.09) | 0.58 | |||||||
Operating return on average assets (1) | 0.74 % | 1.24 % | 1.33 % | 1.06 % | 1.03 % | (0.50) | (0.29) | |||||||
Operating return on average common equity (1) | 8.66 % | 16.14 % | 15.86 % | 12.46 % | 11.58 % | (7.48) | (2.92) | |||||||
Operating return on average tangible common equity (1) | 10.64 % | 16.18 % | 15.90 % | 12.49 % | 11.62 % | (5.54) | (0.98) | |||||||
Average Balance Sheet Yields, Rates, & Ratios: | ||||||||||||||
Yield on loans and leases | 5.55 % | 4.92 % | 4.41 % | 3.94 % | 3.79 % | 0.63 | 1.76 | |||||||
Yield on earning assets (2) | 5.19 % | 4.62 % | 4.10 % | 3.53 % | 3.24 % | 0.57 | 1.95 | |||||||
Cost of interest bearing deposits | 1.32 % | 0.77 % | 0.23 % | 0.11 % | 0.10 % | 0.55 | 1.22 | |||||||
Cost of interest bearing liabilities | 1.82 % | 1.05 % | 0.39 % | 0.20 % | 0.18 % | 0.77 | 1.64 | |||||||
Cost of total deposits | 0.80 % | 0.46 % | 0.14 % | 0.06 % | 0.06 % | 0.34 | 0.74 | |||||||
Cost of total funding (3) | 1.16 % | 0.65 % | 0.23 % | 0.12 % | 0.11 % | 0.51 | 1.05 | |||||||
Net interest margin (2) | 4.08 % | 4.01 % | 3.88 % | 3.41 % | 3.14 % | 0.07 | 0.94 | |||||||
Average interest bearing cash / Average interest earning assets | 4.33 % | 3.62 % | 3.04 % | 5.71 % | 8.92 % | 0.71 | (4.59) | |||||||
Average loans and leases / Average interest earning assets | 80.96 % | 85.32 % | 84.54 % | 80.91 % | 76.85 % | (4.36) | 4.11 | |||||||
Average loans and leases / Average total deposits | 93.01 % | 95.85 % | 93.55 % | 89.23 % | 84.77 % | (2.84) | 8.24 | |||||||
Average non-interest bearing deposits / Average total deposits | 39.55 % | 40.30 % | 42.29 % | 42.00 % | 41.35 % | (0.75) | (1.80) | |||||||
Average total deposits / Average total funding (3) | 91.36 % | 94.52 % | 96.34 % | 96.66 % | 96.82 % | (3.16) | (5.46) | |||||||
Select Credit & Capital Ratios: | ||||||||||||||
Non-performing loans and leases to total loans and leases | 0.20 % | 0.22 % | 0.20 % | 0.18 % | 0.18 % | (0.02) | 0.02 | |||||||
Non-performing assets to total assets | 0.14 % | 0.18 % | 0.16 % | 0.15 % | 0.14 % | (0.04) | — | |||||||
Allowance for credit losses to loans and leases | 1.18 % | 1.21 % | 1.16 % | 1.12 % | 1.14 % | (0.03) | 0.04 | |||||||
Total risk-based capital ratio (4) | 11.0 % | 13.7 % | 13.2 % | 13.5 % | 14.0 % | (2.70) | (3.00) | |||||||
Common equity tier 1 risk-based capital ratio (4) | 8.9 % | 11.0 % | 10.7 % | 11.0 % | 11.4 % | (2.10) | (2.50) | |||||||
(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) | Prior periods have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the merger of 0.5958. |
Columbia Banking System, Inc. | |||||||||||||
Loan & Lease Portfolio Balances and Mix | |||||||||||||
(Unaudited) | |||||||||||||
Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | % Change | ||||||||
($ in thousands) | Amount | Amount | Amount | Amount | Amount | Seq. Quarter | Year over Year | ||||||
Loans and leases: | |||||||||||||
Commercial real estate: | |||||||||||||
Non-owner occupied term, net | $ 6,353,550 | $ 3,894,840 | $ 3,846,426 | $ 3,798,242 | $ 3,884,784 | 63 % | 64 % | ||||||
Owner occupied term, net | 5,156,848 | 2,567,761 | 2,549,761 | 2,497,553 | 2,327,899 | 101 % | 122 % | ||||||
Multifamily, net | 5,590,587 | 5,285,791 | 5,090,661 | 4,768,273 | 4,323,633 | 6 % | 29 % | ||||||
Construction & development, net | 1,467,561 | 1,077,346 | 1,036,931 | 1,017,297 | 940,286 | 36 % | 56 % | ||||||
Residential development, net | 440,667 | 200,838 | 205,935 | 194,909 | 195,308 | 119 % | 126 % | ||||||
Commercial: | |||||||||||||
Term, net | 5,906,774 | 3,029,547 | 3,003,424 | 2,904,861 | 2,772,206 | 95 % | 113 % | ||||||
Lines of credit & other, net | 2,184,762 | 960,054 | 914,507 | 920,604 | 871,483 | 128 % | 151 % | ||||||
Leases & equipment finance, net | 1,746,267 | 1,706,172 | 1,669,817 | 1,576,144 | 1,484,252 | 2 % | 18 % | ||||||
Residential: | |||||||||||||
Mortgage, net | 6,187,964 | 5,647,035 | 5,470,624 | 5,168,457 | 4,748,266 | 10 % | 30 % | ||||||
Home equity loans & lines, net | 1,870,002 | 1,631,965 | 1,565,094 | 1,415,722 | 1,250,702 | 15 % | 50 % | ||||||
Consumer & other, net | 186,298 | 154,632 | 154,771 | 170,616 | 176,942 | 20 % | 5 % | ||||||
Total loans and leases, net of deferred fees and costs | $ 37,091,280 | $ 26,155,981 | $ 25,507,951 | $ 24,432,678 | $ 22,975,761 | 42 % | 61 % | ||||||
Loans and leases mix: | |||||||||||||
Commercial real estate: | |||||||||||||
Non-owner occupied term, net | 16 % | 15 % | 15 % | 15 % | 17 % | ||||||||
Owner occupied term, net | 14 % | 10 % | 10 % | 10 % | 10 % | ||||||||
Multifamily, net | 15 % | 20 % | 20 % | 20 % | 19 % | ||||||||
Construction & development, net | 4 % | 4 % | 4 % | 4 % | 4 % | ||||||||
Residential development, net | 1 % | 1 % | 1 % | 1 % | 1 % | ||||||||
Commercial: | |||||||||||||
Term, net | 16 % | 12 % | 12 % | 12 % | 12 % | ||||||||
Lines of credit & other, net | 6 % | 4 % | 4 % | 4 % | 4 % | ||||||||
Leases & equipment finance, net | 5 % | 6 % | 6 % | 6 % | 6 % | ||||||||
Residential: | |||||||||||||
Mortgage, net | 17 % | 21 % | 21 % | 21 % | 21 % | ||||||||
Home equity loans & lines, net | 5 % | 6 % | 6 % | 6 % | 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, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | % Change | ||||||||
($ in thousands) | Amount | Amount | Amount | Amount | Amount | Seq. Quarter | Year over Year | ||||||
Deposits: | |||||||||||||
Demand, non-interest bearing | $ 17,215,781 | $ 10,288,849 | $ 11,246,358 | $ 11,129,209 | $ 11,058,251 | 67 % | 56 % | ||||||
Demand, interest bearing | 5,900,462 | 4,080,469 | 3,903,746 | 3,723,650 | 3,955,329 | 45 % | 49 % | ||||||
Money market | 10,681,422 | 7,721,011 | 7,601,506 | 7,284,641 | 7,572,581 | 38 % | 41 % | ||||||
Savings | 3,469,112 | 2,265,052 | 2,455,917 | 2,446,876 | 2,429,073 | 53 % | 43 % | ||||||
Time | 4,319,570 | 2,710,231 | 1,609,580 | 1,548,047 | 1,684,353 | 59 % | 156 % | ||||||
Total | $ 41,586,347 | $ 27,065,612 | $ 26,817,107 | $ 26,132,423 | $ 26,699,587 | 54 % | 56 % | ||||||
Total core deposits (1) | $ 39,155,298 | $ 25,616,010 | $ 26,292,548 | $ 25,619,500 | $ 26,140,993 | 53 % | 50 % | ||||||
Deposit mix: | |||||||||||||
Demand, non-interest bearing | 41 % | 38 % | 42 % | 43 % | 42 % | ||||||||
Demand, interest bearing | 14 % | 15 % | 15 % | 14 % | 15 % | ||||||||
Money market | 26 % | 29 % | 28 % | 28 % | 28 % | ||||||||
Savings | 9 % | 8 % | 9 % | 9 % | 9 % | ||||||||
Time | 10 % | 10 % | 6 % | 6 % | 6 % | ||||||||
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, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Seq. Quarter | Year over Year | |||||||
Non-performing assets: | ||||||||||||||
Loans and leases on non-accrual status: | ||||||||||||||
Commercial real estate, net | $ 15,612 | $ 5,011 | $ 5,403 | $ 5,514 | $ 5,950 | 212 % | 162 % | |||||||
Commercial, net | 42,301 | 25,691 | 18,652 | 12,645 | 12,415 | 65 % | 241 % | |||||||
Residential, net | — | — | — | — | — | nm | nm | |||||||
Consumer & other, net | — | — | — | — | — | nm | nm | |||||||
Total loans and leases on non-accrual status | 57,913 | 30,702 | 24,055 | 18,159 | 18,365 | 89 % | 215 % | |||||||
Loans and leases past due 90+ days and accruing (1): | ||||||||||||||
Commercial real estate, net | 1 | 1 | 1 | 23 | 1 | 0 % | 0 % | |||||||
Commercial, net | 151 | 7,909 | 5,143 | 3,311 | 8 | (98) % | nm | |||||||
Residential, net (1) | 17,423 | 19,894 | 21,411 | 22,340 | 23,162 | (12) % | (25) % | |||||||
Consumer & other, net | 140 | 134 | 152 | 196 | 111 | 4 % | 26 % | |||||||
Total loans and leases past due 90+ days and accruing (1) | 17,715 | 27,938 | 26,707 | 25,870 | 23,282 | (37) % | (24) % | |||||||
Total non-performing loans and leases | 75,628 | 58,640 | 50,762 | 44,029 | 41,647 | 29 % | 82 % | |||||||
Other real estate owned | 409 | 203 | — | 1,868 | 1,868 | 101 % | (78) % | |||||||
Total non-performing assets | $ 76,037 | $ 58,843 | $ 50,762 | $ 45,897 | $ 43,515 | 29 % | 75 % | |||||||
Loans and leases past due 31-89 days | $ 78,641 | $ 64,893 | $ 53,538 | $ 34,659 | $ 42,409 | 21 % | 85 % | |||||||
Loans and leases past due 31-89 days to total loans and leases | 0.21 % | 0.25 % | 0.21 % | 0.14 % | 0.18 % | (0.04) | 0.03 | |||||||
Non-performing loans and leases to total loans and leases (1) | 0.20 % | 0.22 % | 0.20 % | 0.18 % | 0.18 % | (0.02) | 0.02 | |||||||
Non-performing assets to total assets (1) | 0.14 % | 0.18 % | 0.16 % | 0.15 % | 0.14 % | (0.04) | — | |||||||
nm = not meaningful | ||||||||||||||
(1) | Excludes certain mortgage loans guaranteed by Ginnie Mae, which Columbia has the unilateral right to repurchase but has not done so, totaling $5.4 million, $6.6 million, $1.0 million, and $356,000 at March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively. |
Columbia Banking System, Inc. | ||||||||||||||
Credit Quality – Allowance for Credit Losses | ||||||||||||||
(Unaudited) | ||||||||||||||
Quarter Ended | % Change | |||||||||||||
($ in thousands) | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Seq. Quarter | Year over Year | |||||||
Allowance for credit losses on loans and leases (ACLLL) | ||||||||||||||
Balance, beginning of period | $ 301,135 | $ 283,065 | $ 261,111 | $ 248,564 | $ 248,412 | 6 % | 21 % | |||||||
Initial ACL recorded for PCD loans acquired during the period | 26,492 | — | — | — | — | nm | nm | |||||||
Provision for credit losses on loans and leases (1) | 106,498 | 30,580 | 28,542 | 18,787 | 5,696 | 248 % | nm | |||||||
Charge-offs | ||||||||||||||
Commercial real estate, net | — | (128) | — | (8) | — | nm | nm | |||||||
Commercial, net | (19,248) | (14,721) | (9,459) | (9,035) | (7,858) | 31 % | 145 % | |||||||
Residential, net | (248) | (53) | (4) | — | (167) | 368 % | 49 % | |||||||
Consumer & other, net | (774) | (906) | (929) | (836) | (885) | (15) % | (13) % | |||||||
Total charge-offs | (20,270) | (15,808) | (10,392) | (9,879) | (8,910) | 28 % | 127 % | |||||||
Recoveries | ||||||||||||||
Commercial real estate, net | 58 | 163 | 123 | 73 | 25 | (64) % | 132 % | |||||||
Commercial, net | 3,058 | 2,708 | 2,842 | 2,934 | 2,545 | 13 % | 20 % | |||||||
Residential, net | 124 | 24 | 249 | 216 | 173 | 417 % | (28) % | |||||||
Consumer & other, net | 369 | 403 | 590 | 416 | 623 | (8) % | (41) % | |||||||
Total recoveries | 3,609 | 3,298 | 3,804 | 3,639 | 3,366 | 9 % | 7 % | |||||||
Net (charge-offs) recoveries | ||||||||||||||
Commercial real estate, net | 58 | 35 | 123 | 65 | 25 | 66 % | 132 % | |||||||
Commercial, net | (16,190) | (12,013) | (6,617) | (6,101) | (5,313) | 35 % | 205 % | |||||||
Residential, net | (124) | (29) | 245 | 216 | 6 | 328 % | nm | |||||||
Consumer & other, net | (405) | (503) | (339) | (420) | (262) | (19) % | 55 % | |||||||
Total net charge-offs | (16,661) | (12,510) | (6,588) | (6,240) | (5,544) | 33 % | 201 % | |||||||
Balance, end of period | $ 417,464 | $ 301,135 | $ 283,065 | $ 261,111 | $ 248,564 | 39 % | 68 % | |||||||
Reserve for unfunded commitments | ||||||||||||||
Balance, beginning of period | $ 14,221 | $ 11,853 | $ 12,823 | $ 12,918 | $ 12,767 | 20 % | 11 % | |||||||
Initial ACL recorded for unfunded commitments acquired during the period | 5,767 | — | — | — | — | nm | nm | |||||||
(Recapture) provision for credit losses on unfunded commitments | (959) | 2,368 | (970) | (95) | 151 | (140) % | nm | |||||||
Balance, end of period | 19,029 | 14,221 | 11,853 | 12,823 | 12,918 | 34 % | 47 % | |||||||
Total Allowance for credit losses (ACL) | $ 436,493 | $ 315,356 | $ 294,918 | $ 273,934 | $ 261,482 | 38 % | 67 % | |||||||
Net charge-offs to average loans and leases (annualized) | 0.23 % | 0.19 % | 0.11 % | 0.11 % | 0.10 % | 0.04 | 0.13 | |||||||
Recoveries to gross charge-offs | 17.80 % | 20.86 % | 36.61 % | 36.84 % | 37.78 % | (3.06) | (19.98) | |||||||
ACLLL to loans and leases | 1.13 % | 1.15 % | 1.11 % | 1.07 % | 1.08 % | (0.02) | 0.05 | |||||||
ACL to loans and leases | 1.18 % | 1.21 % | 1.16 % | 1.12 % | 1.14 % | (0.03) | 0.04 | |||||||
nm = not meaningful | ||||||||||||||
(1) | Includes $88.4 million initial provision related to non-PCD loans acquired during the period. |
Columbia Banking System, Inc.Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Quarter Ended | |||||||||||||||||
March 31, 2023 | December 31, 2022 | March 31, 2022 | |||||||||||||||
($ 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 | $ 54,008 | $ 799 | 5.92 % | $ 110,850 | $ 1,603 | 5.79 % | $ 286,307 | $ 2,262 | 3.16 % | ||||||||
Loans and leases (1) | 29,998,630 | 412,726 | 5.55 % | 25,855,556 | 320,747 | 4.92 % | 22,566,109 | 212,142 | 3.79 % | ||||||||
Taxable securities | 4,960,966 | 40,448 | 3.26 % | 3,042,044 | 18,290 | 2.40 % | 3,659,145 | 18,811 | 2.06 % | ||||||||
Non-taxable securities (2) | 437,020 | 4,068 | 3.72 % | 200,825 | 1,571 | 3.13 % | 234,186 | 1,726 | 2.95 % | ||||||||
Temporary investments and interest-bearing cash | 1,605,081 | 18,581 | 4.69 % | 1,095,854 | 10,319 | 3.74 % | 2,618,528 | 1,353 | 0.21 % | ||||||||
Total interest-earning assets | 37,055,705 | $ 476,622 | 5.19 % | 30,305,129 | $ 352,530 | 4.62 % | 29,364,275 | $ 236,294 | 3.24 % | ||||||||
Goodwill and other intangible assets | 623,042 | 5,298 | 8,407 | ||||||||||||||
Other assets | 1,747,228 | 1,327,063 | 1,224,731 | ||||||||||||||
Total assets | $ 39,425,975 | $ 31,637,490 | $ 30,597,413 | ||||||||||||||
INTEREST-BEARING LIABILITIES: | |||||||||||||||||
Interest-bearing demand deposits | $ 4,759,251 | $ 9,815 | 0.84 % | $ 4,005,643 | $ 5,372 | 0.53 % | $ 3,812,173 | $ 498 | 0.05 % | ||||||||
Money market deposits | 8,845,784 | 32,238 | 1.48 % | 7,651,974 | 17,473 | 0.91 % | 7,640,810 | 1,408 | 0.07 % | ||||||||
Savings deposits | 2,686,388 | 556 | 0.08 % | 2,345,564 | 226 | 0.04 % | 2,405,958 | 205 | 0.03 % | ||||||||
Time deposits | 3,205,128 | 21,004 | 2.66 % | 2,100,803 | 8,103 | 1.53 % | 1,753,880 | 1,805 | 0.42 % | ||||||||
Total interest-bearing deposits | 19,496,551 | 63,613 | 1.32 % | 16,103,984 | 31,174 | 0.77 % | 15,612,821 | 3,916 | 0.10 % | ||||||||
Repurchase agreements and federal funds purchased | 281,032 | 406 | 0.59 % | 354,624 | 323 | 0.36 % | 486,542 | 63 | 0.05 % | ||||||||
Borrowings | 2,352,715 | 28,764 | 4.96 % | 796,414 | 8,023 | 4.00 % | 6,313 | 49 | 3.16 % | ||||||||
Junior and other subordinated debentures | 417,966 | 8,470 | 8.22 % | 413,708 | 7,248 | 6.95 % | 380,985 | 3,149 | 3.35 % | ||||||||
Total interest-bearing liabilities | 22,548,264 | $ 101,253 | 1.82 % | 17,668,730 | $ 46,768 | 1.05 % | 16,486,661 | $ 7,177 | 0.18 % | ||||||||
Non-interest-bearing deposits | 12,755,080 | 10,870,842 | 11,007,034 | ||||||||||||||
Other liabilities | 772,870 | 659,279 | 388,659 | ||||||||||||||
Total liabilities | 36,076,214 | 29,198,851 | 27,882,354 | ||||||||||||||
Common equity | 3,349,761 | 2,438,639 | 2,715,059 | ||||||||||||||
Total liabilities and shareholders' equity | $ 39,425,975 | $ 31,637,490 | $ 30,597,413 | ||||||||||||||
NET INTEREST INCOME | $ 375,369 | $ 305,762 | $ 229,117 | ||||||||||||||
NET INTEREST SPREAD | 3.37 % | 3.57 % | 3.06 % | ||||||||||||||
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2) | 4.08 % | 4.01 % | 3.14 % | ||||||||||||||
(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 $671,000 for the three months ended March 31, 2023, as compared to $283,000 for the three months ended December 31, 2022 and $354,000 for the three months ended March 31, 2022. | |
Columbia Banking System, Inc.Residential Mortgage Banking Activity | |||||||||||||
(Unaudited) | |||||||||||||
Quarter Ended | % Change | ||||||||||||
($ in thousands) | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Seq. Quarter | Year over Year | ||||||
Residential mortgage banking revenue: | |||||||||||||
Origination and sale | $ 3,587 | $ 4,252 | $ 10,515 | $ 15,101 | $ 16,844 | (16) % | (79) % | ||||||
Servicing | 9,397 | 9,184 | 9,529 | 9,505 | 9,140 | 2 % | 3 % | ||||||
Change in fair value of MSR asset: | |||||||||||||
Changes due to collection/realization of expected cash flows over time | (4,881) | (4,986) | (4,978) | (4,961) | (5,347) | (2) % | (9) % | ||||||
Changes due to valuation inputs or assumptions | (2,937) | (9,914) | 16,403 | 10,899 | 40,149 | (70) % | (107) % | ||||||
MSR hedge gain (loss) (1) | 2,650 | (348) | (14,128) | — | — | nm | nm | ||||||
Total | $ 7,816 | $ (1,812) | $ 17,341 | $ 30,544 | $ 60,786 | nm | (87) % | ||||||
Closed loan volume for-sale | $ 131,726 | $ 216,833 | $ 396,979 | $ 576,532 | $ 649,122 | (39) % | (80) % | ||||||
Gain on sale margin | 2.72 % | 1.96 % | 2.65 % | 2.62 % | 2.59 % | 0.76 | 0.13 | ||||||
Residential mortgage servicing rights: | |||||||||||||
Balance, beginning of period | $ 185,017 | $ 196,177 | $ 179,558 | $ 165,807 | $ 123,615 | (6) % | 50 % | ||||||
Additions for new MSR capitalized | 1,601 | 3,740 | 5,194 | 7,813 | 7,390 | (57) % | (78) % | ||||||
Change in fair value of MSR asset: | |||||||||||||
Changes due to collection/realization of expected cash flows over time | (4,881) | (4,986) | (4,978) | (4,961) | (5,347) | (2) % | (9) % | ||||||
Changes due to valuation inputs or assumptions | (2,937) | (9,914) | 16,403 | 10,899 | 40,149 | (70) % | (107) % | ||||||
Balance, end of period | $ 178,800 | $ 185,017 | $ 196,177 | $ 179,558 | $ 165,807 | (3) % | 8 % | ||||||
Residential mortgage loans serviced for others | $ 12,911,341 | $ 13,020,189 | $ 12,997,911 | $ 12,932,747 | $ 12,810,574 | (1) % | 1 % | ||||||
MSR as % of serviced portfolio | 1.38 % | 1.42 % | 1.51 % | 1.39 % | 1.29 % | (0.04) | 0.09 | ||||||
(1) | MSR hedges were put in place during the three months ended September 30, 2022. |
Columbia Banking System, Inc. Purchase Price Allocation(1) | ||||
(Unaudited) | ||||
($ in thousands) | February 28, 2023 | |||
Purchase price consideration | ||||
Total merger consideration | $ 2,337,632 | |||
Fair value of assets acquired: | ||||
Cash and due from banks | $ 274,587 | |||
Equity and other | 1,288 | |||
Available for sale | 4,516,574 | |||
Held to maturity | 1,707,409 | |||
Loans held for sale | 2,358 | |||
Loans and leases | 10,884,106 | |||
Restricted equity securities | 101,760 | |||
Premises and equipment | 203,270 | |||
Other intangible assets | 710,230 | |||
Deferred tax assets | 253,481 | |||
Other assets | 571,753 | |||
Total assets acquired | $ 19,226,816 | |||
Fair value of liabilities assumed: | ||||
Deposits | $ 15,193,474 | |||
Securities sold under agreements to repurchase | 70,025 | |||
Borrowings | 2,294,360 | |||
Junior and other subordinated debentures | 20,310 | |||
Other liabilities | 341,157 | |||
Total liabilities assumed | $ 17,919,326 | |||
Net assets acquired | $ 1,307,490 | |||
Goodwill | $ 1,030,142 | |||
(1) | The estimates of fair value were recorded based on initial valuations available at February 28, 2023 (the "Merger Date") and these estimates, including initial accounting for deferred taxes, were considered preliminary as of March 31, 2023 and subject to adjustment for up to one year after the Merger Date. |
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, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Seq. Quarter | Year over Year | ||||||||
Total shareholders' equity | a | $ 4,884,723 | $ 2,479,826 | $ 2,417,514 | $ 2,518,276 | $ 2,607,598 | 97 % | 87 % | |||||||
Less: Goodwill | 1,030,142 | — | — | — | — | nm | nm | ||||||||
Less: Other intangible assets, net | 702,315 | 4,745 | 5,764 | 6,789 | 7,815 | nm | nm | ||||||||
Tangible common shareholders' equity | b | $ 3,152,266 | $ 2,475,081 | $ 2,411,750 | $ 2,511,487 | $ 2,599,783 | 27 % | 21 % | |||||||
Less: Accumulated other comprehensive (loss) income (AOCI) | $ (300,134) | (426,864) | (449,560) | (308,147) | (183,756) | (30) % | 63 % | ||||||||
Tangible common shareholders' equity, ex AOCI | c | $ 3,452,400 | $ 2,901,945 | $ 2,861,310 | $ 2,819,634 | $ 2,783,539 | 19 % | 24 % | |||||||
Total assets | d | $ 53,994,226 | $ 31,848,639 | $ 31,471,960 | $ 30,135,694 | $ 30,637,126 | 70 % | 76 % | |||||||
Less: Goodwill | 1,030,142 | — | — | — | — | nm | nm | ||||||||
Less: Other intangible assets, net | 702,315 | 4,745 | 5,764 | 6,789 | 7,815 | nm | nm | ||||||||
Tangible assets | e | $ 52,261,769 | $ 31,843,894 | $ 31,466,196 | $ 30,128,905 | $ 30,629,311 | 64 % | 71 % | |||||||
Common shares outstanding at period end (1) | f | 208,429 | 129,321 | 129,320 | 129,318 | 129,269 | 61 % | 61 % | |||||||
Total shareholders' equity to total assets ratio | a / d | 9.05 % | 7.79 % | 7.68 % | 8.36 % | 8.51 % | 1.26 | 0.54 | |||||||
Tangible common equity ratio | b / e | 6.03 % | 7.77 % | 7.66 % | 8.34 % | 8.49 % | (1.74) | (2.46) | |||||||
Tangible common equity ratio, ex AOCI | c / e | 6.61 % | 9.11 % | 9.09 % | 9.36 % | 9.09 % | (2.50) | (2.48) | |||||||
Book value per common share (1) | a / f | $ 23.44 | $ 19.18 | $ 18.69 | $ 19.47 | $ 20.17 | 22 % | 16 % | |||||||
Tangible book value per common share (1) | b / f | $ 15.12 | $ 19.14 | $ 18.65 | $ 19.42 | $ 20.11 | (21) % | (25) % | |||||||
Tangible book value per common share, ex AOCI (1) | c / f | $ 16.56 | $ 22.44 | $ 22.13 | $ 21.80 | $ 21.53 | (26) % | (23) % | |||||||
nm = not meaningful |
(1) | Prior periods have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the merger of 0.5958. |
Columbia Banking System, Inc. GAAP to Non-GAAP Reconciliation - Continued | |||||||||||||||
(Unaudited) | |||||||||||||||
Quarter Ended | % Change | ||||||||||||||
($ in thousands) | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Seq. Quarter | Year over Year | ||||||||
Non-Interest Income Adjustments | |||||||||||||||
Gain on sale of debt securities, net | $ — | $ — | $ — | $ — | $ 2 | nm | (100) % | ||||||||
Gain (loss) on equity securities, net | 2,416 | 284 | (2,647) | (2,075) | (2,661) | nm | nm | ||||||||
(Loss) gain on swap derivatives | (3,543) | (2,329) | 4,194 | 7,337 | 7,047 | 52 % | (150) % | ||||||||
Change in fair value of certain loans held for investment | 9,488 | 4,192 | (26,397) | (15,210) | (21,049) | 126 % | nm | ||||||||
Change in fair value of MSR due to valuation inputs or assumptions | (2,937) | (9,914) | 16,403 | 10,899 | 40,149 | (70) % | (107) % | ||||||||
MSR hedge gain (loss) | 2,650 | (348) | (14,128) | — | — | nm | nm | ||||||||
Total non-interest income adjustments | a | $ 8,074 | $ (8,115) | $ (22,575) | $ 951 | $ 23,488 | nm | (66) % | |||||||
Non-Interest Expense Adjustments | |||||||||||||||
Merger related expenses | $ 115,898 | $ 11,637 | $ 769 | $ 2,672 | $ 2,278 | nm | nm | ||||||||
Exit and disposal costs | 1,291 | 1,966 | 1,364 | 442 | 3,033 | (34) % | (57) % | ||||||||
Total non-interest expense adjustments | b | $ 117,189 | $ 13,603 | $ 2,133 | $ 3,114 | $ 5,311 | nm | nm | |||||||
Net interest income (1) | c | $ 375,369 | $ 305,762 | $ 287,933 | $ 248,522 | $ 229,117 | 23 % | 64 % | |||||||
Non-interest income (GAAP) | d | $ 54,735 | $ 34,879 | $ 29,445 | $ 55,235 | $ 79,969 | 57 % | (32) % | |||||||
Less: Non-interest income adjustments | a | (8,074) | 8,115 | 22,575 | (951) | (23,488) | (199) % | (66) % | |||||||
Operating non-interest income (non-GAAP) | e | $ 46,661 | $ 42,994 | $ 52,020 | $ 54,284 | $ 56,481 | 9 % | (17) % | |||||||
Revenue (GAAP) (1) | f=c+d | $ 430,104 | $ 340,641 | $ 317,378 | $ 303,757 | $ 309,086 | 26 % | 39 % | |||||||
Operating revenue (non-GAAP) (1) | g=c+e | $ 422,030 | $ 348,756 | $ 339,953 | $ 302,806 | $ 285,598 | 21 % | 48 % | |||||||
Non-interest expense (GAAP) | h | $ 342,818 | $ 194,982 | $ 177,964 | $ 179,574 | $ 182,430 | 76 % | 88 % | |||||||
Less: Non-interest expense adjustments | b | (117,189) | (13,603) | (2,133) | (3,114) | (5,311) | nm | nm | |||||||
Operating non-interest expense (non-GAAP) | i | $ 225,629 | $ 181,379 | $ 175,831 | $ 176,460 | $ 177,119 | 24 % | 27 % | |||||||
Net (loss) income (GAAP) | j | $ (14,038) | $ 82,964 | $ 84,040 | $ 78,591 | $ 91,157 | (117) % | (115) % | |||||||
(Benefit) provision for income taxes | (4,886) | 29,464 | 27,473 | 26,548 | 30,341 | (117) % | (116) % | ||||||||
(Loss) income before provision for income taxes | (18,924) | 112,428 | 111,513 | 105,139 | 121,498 | (117) % | (116) % | ||||||||
Provision for credit losses | 105,539 | 32,948 | 27,572 | 18,692 | 4,804 | 220 % | nm | ||||||||
Pre-provision net revenue (PPNR) (non-GAAP) | k | 86,615 | 145,376 | 139,085 | 123,831 | 126,302 | (40) % | (31) % | |||||||
Less: Non-interest income adjustments | a | (8,074) | 8,115 | 22,575 | (951) | (23,488) | (199) % | (66) % | |||||||
Add: Non-interest expense adjustments | b | 117,189 | 13,603 | 2,133 | 3,114 | 5,311 | nm | nm | |||||||
Operating PPNR (non-GAAP) | l | $ 195,730 | $ 167,094 | $ 163,793 | $ 125,994 | $ 108,125 | 17 % | 81 % | |||||||
Net (loss) income (GAAP) | j | $ (14,038) | $ 82,964 | $ 84,040 | $ 78,591 | $ 91,157 | (117) % | (115) % | |||||||
Less: Non-interest income adjustments | a | (8,074) | 8,115 | 22,575 | (951) | (23,488) | (199) % | (66) % | |||||||
Add: Non-interest expense adjustments | b | 117,189 | 13,603 | 2,133 | 3,114 | 5,311 | nm | nm | |||||||
Tax effect of adjustments | (23,565) | (5,459) | (6,116) | (480) | 4,576 | 332 % | nm | ||||||||
Operating net income (non-GAAP) | m | $ 71,512 | $ 99,223 | $ 102,632 | $ 80,274 | $ 77,556 | (28) % | (8) % | |||||||
nm = not meaningful | |||||||||||||||
(1) | Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate. |
Columbia Banking System, Inc. GAAP to Non-GAAP Reconciliation - Continued | |||||||||||||||
(Unaudited) | |||||||||||||||
Quarter Ended | % Change | ||||||||||||||
($ in thousands, except per share data) | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Seq. Quarter | Year over Year | ||||||||
Average assets | n | $ 39,425,975 | $ 31,637,490 | $ 30,668,177 | $ 30,356,903 | $ 30,597,413 | 25 % | 29 % | |||||||
Less: Average goodwill and other intangible assets, net | 623,042 | 5,298 | 6,343 | 7,379 | 8,407 | nm | nm | ||||||||
Average tangible assets | o | $ 38,802,933 | $ 31,632,192 | $ 30,661,834 | $ 30,349,524 | $ 30,589,006 | 23 % | 27 % | |||||||
Average common shareholders' equity | p | $ 3,349,761 | $ 2,438,639 | $ 2,567,266 | $ 2,584,836 | $ 2,715,059 | 37 % | 23 % | |||||||
Less: Average goodwill and other intangible assets, net | 623,042 | 5,298 | 6,343 | 7,379 | 8,407 | nm | nm | ||||||||
Average tangible common equity | q | $ 2,726,719 | $ 2,433,341 | $ 2,560,923 | $ 2,577,457 | $ 2,706,652 | 12 % | 1 % | |||||||
Weighted average basic shares outstanding (1) | r | 156,383 | 129,321 | 129,319 | 129,306 | 129,159 | 21 % | 21 % | |||||||
Weighted average diluted shares outstanding (1) | s | 156,383 | 129,801 | 129,733 | 129,673 | 129,693 | 20 % | 21 % | |||||||
Select Per-Share & Performance Metrics | |||||||||||||||
Earnings-per-share - basic (1) | j / r | $ (0.09) | $ 0.64 | $ 0.65 | $ 0.61 | $ 0.71 | (114) % | (113) % | |||||||
Earnings-per-share - diluted (1) | j / s | $ (0.09) | $ 0.64 | $ 0.65 | $ 0.61 | $ 0.70 | (114) % | (113) % | |||||||
Efficiency ratio | h / f | 79.71 % | 57.24 % | 56.07 % | 59.12 % | 59.02 % | 22.47 | 20.69 | |||||||
PPNR return on average assets | k / n | 0.89 % | 1.82 % | 1.80 % | 1.64 % | 1.67 % | (0.93) | (0.78) | |||||||
Return on average assets | j / n | (0.14) % | 1.04 % | 1.09 % | 1.04 % | 1.21 % | (1.18) | (1.35) | |||||||
Return on average tangible assets | j / o | (0.15) % | 1.04 % | 1.09 % | 1.04 % | 1.21 % | (1.19) | (1.36) | |||||||
Return on average common equity | j / p | (1.70) % | 13.50 % | 12.99 % | 12.20 % | 13.62 % | (15.20) | (15.32) | |||||||
Return on average tangible common equity | j / q | (2.09) % | 13.53 % | 13.02 % | 12.23 % | 13.66 % | (15.62) | (15.75) | |||||||
Operating Per-Share & Performance Metrics | |||||||||||||||
Operating earnings-per-share - basic (1) | m / r | $ 0.46 | $ 0.77 | $ 0.79 | $ 0.62 | $ 0.60 | (40) % | (23) % | |||||||
Operating earnings-per-share - diluted (1) | m / s | $ 0.46 | $ 0.76 | $ 0.79 | $ 0.62 | $ 0.60 | (39) % | (23) % | |||||||
Operating efficiency ratio | i / g | 53.46 % | 52.01 % | 51.72 % | 58.27 % | 62.02 % | 1.45 | (8.56) | |||||||
Operating PPNR return on average assets | l / n | 2.01 % | 2.10 % | 2.12 % | 1.66 % | 1.43 % | (0.09) | 0.58 | |||||||
Operating return on average assets | m / n | 0.74 % | 1.24 % | 1.33 % | 1.06 % | 1.03 % | (0.50) | (0.29) | |||||||
Operating return on average tangible assets | m / o | 0.75 % | 1.24 % | 1.33 % | 1.06 % | 1.03 % | (0.49) | (0.28) | |||||||
Operating return on average common equity | m / p | 8.66 % | 16.14 % | 15.86 % | 12.46 % | 11.58 % | (7.48) | (2.92) | |||||||
Operating return on average tangible common equity | m / q | 10.64 % | 16.18 % | 15.90 % | 12.49 % | 11.62 % | (5.54) | (0.98) | |||||||
(1) | Prior periods have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the merger of 0.5958. |
Columbia Banking System, Inc. GAAP to Non-GAAP Reconciliation - Continued | |||||||||||||||
(Unaudited) | |||||||||||||||
Quarter Ended | % Change | ||||||||||||||
($ in thousands) | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Seq. Quarter | Year over Year | ||||||||
Loans and leases interest income | a | $ 412,726 | $ 320,747 | $ 276,625 | $ 231,932 | $ 212,142 | 29 % | 95 % | |||||||
Less: Acquired loan accretion - rate related (2), (3) | b | 11,832 | 387 | 789 | 1,069 | 1,432 | nm | nm | |||||||
Less: Acquired loan accretion - credit related (3) | c | 3,806 | — | — | — | — | nm | nm | |||||||
Adjusted loans and leases interest income | d=a-b-c | $ 397,088 | $ 320,360 | $ 275,836 | $ 230,863 | $ 210,710 | 24 % | 88 % | |||||||
Taxable securities interest income | e | 40,448 | 18,290 | 18,261 | 17,340 | 18,811 | 121 % | 115 % | |||||||
Less: Acquired taxable securities accretion - rate related | f | 15,356 | — | — | — | — | nm | nm | |||||||
Adjusted Taxable securities interest income | g=e-f | $ 25,092 | $ 18,290 | $ 18,261 | $ 17,340 | $ 18,811 | 37 % | 33 % | |||||||
Non-taxable securities interest income (1) | h | 4,068 | 1,571 | 1,651 | 1,721 | 1,726 | 159 % | 136 % | |||||||
Less: Acquired non-taxable securities accretion - rate related | i | 901 | — | — | — | — | nm | nm | |||||||
Adjusted Taxable securities interest income (1) | j=h-i | $ 3,167 | $ 1,571 | $ 1,651 | $ 1,721 | $ 1,726 | 102 % | 83 % | |||||||
Interest income (1) | k | $ 476,622 | $ 352,530 | $ 303,857 | $ 256,654 | $ 236,294 | 35 % | 102 % | |||||||
Less: Acquired loan and securities accretion - rate related | l=b+f+i | 28,089 | 387 | 789 | 1,069 | 1,432 | nm | nm | |||||||
Less: Acquired loan accretion - credit related | c | 3,806 | — | — | — | — | nm | nm | |||||||
Adjusted interest income (1) | m=k-l-c | $ 444,727 | $ 352,143 | $ 303,068 | $ 255,585 | $ 234,862 | 26 % | 89 % | |||||||
Interest-bearing deposits interest expense | n | 63,613 | 31,174 | 9,090 | 4,015 | 3,916 | 104 % | nm | |||||||
Less: Acquired deposit accretion | o | (93) | — | — | — | — | nm | nm | |||||||
Adjusted interest-bearing deposits interest expense | p=n-o | $ 63,706 | $ 31,174 | $ 9,090 | $ 4,015 | $ 3,916 | 104 % | nm | |||||||
Interest expense | q | 101,253 | 46,768 | 15,924 | 8,132 | 7,177 | 117 % | nm | |||||||
Less: Acquired interest-bearing liabilities accretion (2) | r | (150) | (57) | (57) | (57) | (57) | 163 % | 163 % | |||||||
Adjusted interest expense | s=q-r | $ 101,403 | $ 46,825 | $ 15,981 | $ 8,189 | $ 7,234 | 117 % | nm | |||||||
Net Interest Income (1) | t | $ 375,369 | $ 305,762 | $ 287,933 | $ 248,522 | $ 229,117 | 23 % | 64 % | |||||||
Less: Acquired loan, securities, and interest-bearing liabilities accretion - rate related | u=l-r | 27,939 | 330 | 732 | 1,012 | 1,375 | nm | nm | |||||||
Less: Acquired loan accretion - credit related | c | 3,806 | — | — | — | — | nm | nm | |||||||
Adjusted interest income (1) | v=t-u-c | $ 343,624 | $ 305,432 | $ 287,201 | $ 247,510 | $ 227,742 | 13 % | 51 % | |||||||
Average loans and leases | aa | 29,998,630 | 25,855,556 | 24,886,203 | 23,550,796 | 22,566,109 | 16 % | 33 % | |||||||
Average taxable securities | ab | 4,960,966 | 3,042,044 | 3,271,185 | 3,410,091 | 3,659,145 | 63 % | 36 % | |||||||
Average non-taxable securities | ac | 437,020 | 200,825 | 212,847 | 220,327 | 234,186 | 118 % | 87 % | |||||||
Average interest-earning assets | ad | 37,055,705 | 30,305,129 | 29,437,103 | 29,108,988 | 29,364,275 | 22 % | 26 % | |||||||
Average interest-bearing deposits | ae | 19,496,551 | 16,103,984 | 15,350,390 | 15,308,058 | 15,612,821 | 21 % | 25 % | |||||||
Average interest-bearing liabilities | af | 22,548,264 | 17,668,730 | 16,359,575 | 16,220,936 | 16,486,661 | 28 % | 37 % | |||||||
(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. |
Columbia Banking System, Inc. GAAP to Non-GAAP Reconciliation - Continued | |||||||||||||||
(Unaudited) | |||||||||||||||
Quarter Ended | % Change | ||||||||||||||
($ in thousands) | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Seq. Quarter | Year over Year | ||||||||
Average yield on loans and leases | a / aa | 5.55 % | 4.92 % | 4.41 % | 3.94 % | 3.79 % | 0.63 | 1.76 | |||||||
Less: Acquired loan accretion - rate related (2),(3) | b / aa | 0.16 % | 0.01 % | 0.01 % | 0.02 % | 0.03 % | 0.15 | 0.13 | |||||||
Less: Acquired loan accretion - credit related (3) | c / aa | 0.05 % | — % | — % | — % | — % | 0.05 | 0.05 | |||||||
Adjusted average yield on loans and leases | d / aa | 5.34 % | 4.91 % | 4.40 % | 3.92 % | 3.76 % | 0.43 | 1.58 | |||||||
Average yield on taxable securities | e / ab | 3.26 % | 2.40 % | 2.23 % | 2.03 % | 2.06 % | 0.86 | 1.20 | |||||||
Less: Acquired taxable securities accretion - rate related | f / ab | 1.26 % | — % | — % | — % | — % | 1.26 | 1.26 | |||||||
Adjusted average yield on taxable securities | g / ab | 2.00 % | 2.40 % | 2.23 % | 2.03 % | 2.06 % | (0.40) | (0.06) | |||||||
Average yield on non-taxable securities (1) | h / ac | 3.72 % | 3.13 % | 3.10 % | 3.13 % | 2.95 % | 0.59 | 0.77 | |||||||
Less: Acquired non-taxable securities accretion - rate related | i / ac | 0.84 % | — % | — % | — % | — % | 0.84 | 0.84 | |||||||
Adjusted yield on non-taxable securities (1) | j / ac | 2.88 % | 3.13 % | 3.10 % | 3.13 % | 2.95 % | (0.25) | (0.07) | |||||||
Average yield on interest-earning assets (1) | k / ad | 5.19 % | 4.62 % | 4.10 % | 3.53 % | 3.24 % | 0.57 | 1.95 | |||||||
Less: Acquired loan and securities accretion - rate related | l / ad | 0.31 % | 0.01 % | 0.01 % | 0.01 % | 0.02 % | 0.30 | 0.29 | |||||||
Less: Acquired loan accretion - credit related | c / ad | 0.04 % | — % | — % | — % | — % | 0.04 | 0.04 | |||||||
Adjusted average yield on interest-earning assets (1) | m / ad | 4.84 % | 4.61 % | 4.09 % | 3.52 % | 3.22 % | 0.23 | 1.62 | |||||||
Average rate on interest-bearing deposits | n / ae | 1.32 % | 0.77 % | 0.23 % | 0.11 % | 0.10 % | 0.55 | 1.22 | |||||||
Less: Acquired deposit accretion | o / ae | — % | — % | — % | — % | — % | — | — | |||||||
Adjusted average rate on interest-bearing deposits | p / ae | 1.33 % | 0.77 % | 0.23 % | 0.11 % | 0.10 % | 0.56 | 1.23 | |||||||
Average rate on interest-bearing liabilities | q / af | 1.82 % | 1.05 % | 0.39 % | 0.20 % | 0.18 % | 0.77 | 1.64 | |||||||
Less: Acquired interest-bearing liabilities accretion (2) | r / af | — % | — % | — % | — % | — % | — | — | |||||||
Adjusted average rate on interest-bearing liabilities | s / af | 1.82 % | 1.05 % | 0.39 % | 0.20 % | 0.18 % | 0.77 | 1.64 | |||||||
Net interest margin (1) | t / ad | 4.08 % | 4.01 % | 3.88 % | 3.41 % | 3.14 % | 0.07 | 0.94 | |||||||
Less: Acquired loan, securities, and interest-bearing liabilities accretion - rate related | u / ad | 0.31 % | — % | 0.01 % | 0.01 % | 0.02 % | 0.31 | 0.29 | |||||||
Less: Acquired loan accretion - credit related | c / ad | 0.04 % | — % | — % | — % | — % | 0.04 | 0.04 | |||||||
Adjusted net interest margin (1) | v / ad | 3.73 % | 4.01 % | 3.87 % | 3.40 % | 3.12 % | (0.28) | 0.61 | |||||||
(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.
