Columbia Banking System, Inc. · NASDAQ:COLB
Columbia Banking System — Q2 2024 Earnings Presentation
33 slides from Columbia Banking System's earnings presentation, Jul 25, 2024
Slide 1: 2nd Quarter 2024 Earnings Presentation
2nd Quarter 2024 Earnings Presentation July 25, 2024
Slide 2: Disclaimer
2 Disclaimer FORWARD-LOOKING STATEMENTS This presentation 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
Slide 3: Columbia Banking System: A Franchise Like No Other
3 Columbia Banking System: A Franchise Like No Other Columbia at a Glance West-Focused Regional Powerhouse Business Bank of Choice Ticker COLB ■ In-market, relationship-based commercial banking Corporate Headquarters Tacoma, Washington ■ Attractive footprint in high-growth markets Offices ~300 in ei
Slide 4: Why Columbia?
4 Why Columbia? ■ Community banking at scale business model drives granular, low-cost core deposit base ■ Opportunity to gain share in California and growing metros in the West while increasing density in the Northwest ■ Solid capital generation supports long-term organic growth and return to shareh
Slide 5: Operating in Large, Attractive Western Markets
5 Operating in Large, Attractive Western Markets Foothold in the West(1) Top Regional Bank in the NW (WA, OR, ID)(1) Established Presence in Attractive Markets(1) (population in millions) Total Northwest Northwest Rank Bank (HQ State) Assets ($B) Deposits ($B) Mkt Shr ■ Our market share in the North
Slide 6: Opportunity to Increase Density and Gain Share throughout Our Footprint
6 Opportunity to Increase Density and Gain Share throughout Our Footprint Improve Density in the Northwest Expand Footprint in California Broaden Presence in Other Western Markets Population Deposits ($mm) COLB Population Deposits ($mm) COLB Population Deposits ($mm) COLB (1) (1) (1) MSA (000s) Mark
Slide 7: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 8: YTD 2024 Highlights
8 YTD 2024 Highlights Reported Operating(1) ■ Opened Umpqua Bank’s first retail location in Phoenix, AZ and its first Financial Hub in Southern CA, replacing an existing branch. $244 million $275 million Umpqua has closed four branches on a net basis during 2024 as Net Income Net Income strategic co
Slide 9: Second Quarter 2024 Highlights
9 Second Quarter 2024 Highlights Reported Operating(1) ■ Completed an enterprise-wide evaluation of our operations during Q1 2024 that resulted in consolidated positions, simplified reporting $120 million $140 million and organizational structures, and an improved profitability outlook. Net Income N
Slide 10: Diversified Commercial Bank Business Model Supports Granular Deposit Base
10 Our Diversified Commercial Bank Business Model with a Strong Retail Network Supports our Granular, High-Quality Deposit Base Enterprise-wide Deposit Composition Deposits by Category Customer Deposit Composition(1) Commercial - Small Business, 19% Non-interest, 33% Demand, 20% Non-interest, 36% De
Slide 11: Securities Portfolio Overview
11 Securities Portfolio Overview Available-for-Sale Securities Portfolio as of June 30, 2024 % of Total Amortized Unrealized Unrealized AFS Effective ($ in millions) Current Par Cost Gains Losses Fair Value Portfolio Duration Book Yield U.S. Treasuries $390 $382 $0 ($7) $375 4% 1.9 3.56 % U.S. Agenc
Slide 12: Loan Roll Forward Activity
12 Loan Roll Forward Activity Three Months Ended June 30, 2024 Six Months Ended June 30, 2024 $910 $1,681 $37,642 $113 $37,710 $37,442 $— $133 $37,710 ($95) ($168) $ in millions $ in millions ($392) ($468) ($734) ($644) Beginning New Net Prepayments Payoffs or Other¹ Ending Beginning Merger New Net
Slide 13: Diversified, High Quality Loan and Lease Portfolio
13 Diversified, High Quality Loan and Lease Portfolio Mortgage Portfolio Composition at June 30, 2024 Owner Occupied CRE • Portfolio average loan size of $1.0 million • Portfolio average loan size of $484,000 Multifamily, 15% • 2Q24 average loan size of $1.8 million • 2Q24 average loan size of $462,
Slide 14: C&I and CRE Portfolio Composition
14 C&I and CRE Portfolio Composition C&I Portfolio Composition(1) CRE Portfolio Composition(1) $9.8 Billion at June 30, 2024 $17.5 Billion at June 30, 2024 Agriculture, 8.8% Special Purpose, 7.5% Hotel/Motel, 4.2% Other, 13.1% Other Healthcare, 3.5% Contractors, 7.8% Retail, 11.3% Other, 11.0% Denti
Slide 15: Office Portfolio Details
15 Office Portfolio Details Office Portfolio Metrics at June 30, 2024 Number of Loans by Balance ■ Loans secured by office properties Average loan size $1.35 million represented 8% of our total loan portfolio 1,746 1,719 1,649 at June 30, 2024. Average LTV 57% DSC (non-owner occupied) 1.78x ■ Our of
Slide 16: Continued Strong Credit Quality
16 Continued Strong Credit Quality Allowance for Credit Losses 1.40% 1.41% 1.45% 1.36% 1.35% ■ The remaining credit discount on loans of 1.24% $69 million as of June 30, 2024 provides an 1.15% 1.18% 1.16% 1.16% $94 $86 $80 $74 $69 additional 19 basis points of loss absorption when added to the ACL o
Slide 17: ACL Reflects Strong Portfolio Credit Metrics
17 ACL Reflects Strong Portfolio Credit Metrics Allowance for Credit Losses (“ACL”) by Loan Segment Total ACL Remaining including Lease & Commercial Residential & Credit Discount Credit Discount ($ in thousands) Commercial Equipment Real Estate Home Equity Consumer Total(1) on Loans on Loans(1) Bala
Slide 18: Capital Management
18 Capital Management Regulatory Capital Ratios: Bank and Holding Company as of June 30, 2024 Capital Ratios Continue to Trend Up 11.7% 12.1% 11.6% 11.9% 12.0% 12.1% 12.0% 12.0% 11.3% 10.7% 10.7% 9.9% 9.9% 9.5% 9.6% 9.8% 9.9% 10.0% 10.0% 9.2% 8.5% 7.9% 8.0% 8.0% 6.0% 6.0% 4.0% 4.0% 6.5% 9% 9% 12% 2.
Slide 19: Net Interest Income and Net Interest Margin
19 Net Interest Income and Net Interest Margin Net Interest Income and Net Interest Margin Net Interest Margin: Q1 2024 vs Q2 2024 $484 $481 $454 0.04% $423 $427 0.01% 0.05% 0.02% 3.56% 3.52% 3.93% (0.07)% (0.01)% 3.91% 3.78% 3.52% 3.56% Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q1 2024 LHFI-ex LHFI-P
Slide 20: Interest Rate Sensitivity
20 Interest Rate Sensitivity Loan Maturities at June 30, 2024 Floors: Floating and Adjustable Rate Loans at June 30, 2024 <=6 7 to 12 13 to 24 25 to 36 37 to 60 61+ % of ($ in millions) No Floor(3) At Floor(3) Above Floor(3) Total ($ in millions) Months(1) Months Months Months Months Months Total To
Slide 21: Non-Interest Income
21 Non-Interest Income For the Quarter Ended Q2 2024 Highlights (compared to Q1 2024) ($ in millions) Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 ■ The second quarter’s results reflect Service charges on deposits $18.5 $16.1 $17.3 $17.4 $16.5 favorable trends in card activity, financial Card-based fees
Slide 22: Non-Interest Expense
22 Non-Interest Expense Non-Interest Expense ("NIE") Non-Interest Expense: Q1 2024 vs Q2 2024 $337.2 $328.6 $287.5 $304.1 $296.8 $294.3 $287.5 $6.1 $279.2 $ in millions $ in millions $281.2 $276.9 $279.2 $262.5 $(7.7) $(1.8) $(2.9) $(2.0) Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q1 2024 Comp. Other C
Slide 23: Appendix
APPENDIX
Slide 24: Summary Income Statements
24 Summary Income Statements For the Quarter Ended Q2 2024 Highlights (compared to Q1 2024) ($ in millions, except per-share data) Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Net interest income before provision $427.4 $423.4 $453.6 $480.9 $484.0 ■ Net interest income increased by $4 million due to high
Slide 25: Summary Period-End Balance Sheets
25 Summary Period-End Balance Sheets ($ in millions, except per-share data) Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q2 2024 Highlights (compared to Q1 2024) ASSETS: ■ Commercial line utilization and Total assets $52,047.5 $52,224.0 $52,173.6 $51,993.8 $53,592.1 construction project activity were the
Slide 26: Liquidity Overview
26 Liquidity Overview Select Balance Sheet Items Total Off-Balance Sheet Liquidity Available at June 30, 2024 Sequential Gross Net Three Months Ended Quarter Change ($ in millions) Availability Utilization Availability ($ in millions) Q2 2024 Q1 2024 Q2 2023 Q2 2024 FHLB lines $11,772 $2,370 $9,402
Slide 27: Purchase Accounting Details
27 Purchase Accounting Details Adjustment at Closing Remaining Balances at Select Purchase Accounting Items(1) February 28, 2023 March 31, 2024 June 30, 2024 Notes ITEMS TO ACCRETE THROUGH INTEREST INCOME: Available for sale securities - rate discount $(1,011) million $(543) million $(518) million W
Slide 28: Non-GAAP Reconciliation: Tangible Capital
28 Non-GAAP Reconciliation: Tangible Capital ($ in thousands, except per-share data) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Total shareholders' equity a $4,976,672 $4,957,245 $4,995,034 $4,632,162 $4,828,188 Less: Goodwill 1,029,234 1,029,234 1,029,234 1,029,234 1,029,234 Less: Other int
Slide 29: Non-GAAP Reconciliation: Adjustments and Average Balances
29 Non-GAAP Reconciliation: Adjustments and Average Balances For the Quarter Ended For the Six Months Ended ($ in thousands) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 6/30/2024 6/30/2023 Non-Interest Income Adjustments (Loss) gain on sale of debt securities, net $ (1) $ 12 $ 9 $ 4 $ — $ 11
Slide 30: Non-GAAP Reconciliation: Income Statements
30 Non-GAAP Reconciliation: Income Statements For the Quarter Ended For the Six Months Ended ($ in thousands) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 6/30/2024 6/30/2023 Net interest income c $ 427,449 $ 423,362 $ 453,623 $ 480,875 $ 483,975 $ 850,811 $ 858,673 Non-interest income (GAAP)
Slide 31: Non-GAAP Reconciliation: Earnings Per-Share and Performance Metrics
31 Non-GAAP Reconciliation: Earnings Per-Share and Performance Metrics For the Quarter Ended For the Six Months Ended ($ in thousands, except per-share data) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 6/30/2024 6/30/2023 Select Per-Share & Performance Metrics Earnings per share - basic j/r $
Slide 32: Non-GAAP Reconciliation: Operating Efficiency Ratio, as Adjusted
32 Non-GAAP Reconciliation: Operating Efficiency Ratio, as Adjusted For the Quarter Ended For the Six Months Ended ($ in thousands) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 6/30/2024 6/30/2023 Non-interest expense (GAAP) h $279,244 $287,516 $337,176 $304,147 $328,559 $566,760 $671,377 Less
Slide 33: Non-GAAP Reconciliation: Net Interest Income & Net Interest Margin
33 Non-GAAP Reconciliation: Net Interest Income & Net Interest Margin For the Quarter Ended For the Six Months Ended ($ in thousands) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 6/30/2024 6/30/2023 Net interest income(2) a $428,434 $424,344 $454,730 $482,031 $485,168 $852,778 $860,537 Less: A
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