Columbia Banking System, Inc. · NASDAQ:COLB
Columbia Banking System — Q1 2023 Earnings Presentation
35 slides from Columbia Banking System's earnings presentation, Apr 26, 2023
Slide 1: 1st Quarter 2023 Earnings Presentation
st 1 Quarter 2023 Earnings Presentation April 26, 2023
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: Strategic Updates and Forward Outlook
STRATEGIC UPDATES AND FORWARD OUTLOOK
Slide 4: Merger Update: Execution Timing Is Unchanged Despite the Delayed Closing
4 Merger Update: Execution Timing Is Unchanged Despite the Delayed Closing Expectations at Actual Results and Updated ■ The integration management office (“IMO”) Announcement Expectations planned for the core systems conversion and October 12, 2021 (1) April 26, 2023 other integration activities for
Slide 5: Merger Update: Higher Interest Rates Drove Significant Fair Value Changes
5 Merger Update: Higher Interest Rates Drove Significant Fair Value Changes Between Announcement and Closing Expectations at ■ The significant increase in interest rates Announcement Actual Results at Closing between merger announcement and closing October 12, 2021 February 28, 2023 resulted in a dr
Slide 6: Merger Update: Purchase Accounting Accretion and Amortization Expected Net Benefit
6 Merger Update: Purchase Accounting Accretion and Amortization Expected to Provide a Meaningful Net Benefit to Income and Capital Adjustment at Closing Remaining Balances at Select Purchase Accounting Items (1) February 28, 2023 March 31, 2023 (2) Notes ITEMS TO ACCRETE THROUGH INTEREST INCOME: Ava
Slide 7: Merger Update: Cost Synergies Targeted for Completion by September 30, 2023
7 Merger Update: Cost Synergies Targeted for Completion by September 30, 2023 Expected Composition of Cost Synergies Annualized Cost Synergies Realized by Period End at September 30, 2023 $150 $135 million(1) $105-110 million(1) Branch Consolidations, $100 21% FTE, 43% (1) $46 million $50 Other Real
Slide 8: Liquidity Overview
8 Liquidity Overview Deposit, Funding, and Cash Changes: Combined Basis Pre-Closing and Consolidated Basis Post-Closing (1) Total Off-Balance Sheet Liquidity Available at March 31, 2023 Two Months One Month Gross Net Ended Ended Three Months Ended ($ in millions) Availability Utilization Availabilit
Slide 9: Securities Portfolio Overview
9 Securities Portfolio Overview Available for Sale Securities Portfolio at March 31, 2023 Available for Sale Securities Portfolio % of Total Percentage Gain / Loss at March 31, 2023 Amortized Unrealized Unrealized AFS Effective ($ in millions) Current Par Cost Gains Losses Fair Value Portfolio Durat
Slide 10: Outlook
10 Outlook Results (1) Outlook (1) Q1 2023 Q2 2023 Full-Year 2023 Notes Assumes cash balance at 3/31 remains consistent through Average earning assets $37b $48b - $49b $45b - $46b remainder of 2023 Forward outlook does not include any additional changes to Net interest margin - adjusted (2) 3.73% 3.
Slide 11: Financial Highlights and Summary Financial Statements
FINANCIAL HIGHLIGHTS AND SUMMARY FINANCIAL STATEMENTS Q1 2023
Slide 12: Performance Ratios
12 Performance Ratios For the Quarter Ended Q1 2023 Highlights (compared to Q4 2022) Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 ■ Operating results include the initial (1) Net interest margin 4.08 % 4.01 % 3.88 % 3.41 % 3.14 % provision related to non-PCD loans added Efficiency ratio (1) 79.71 % 57.24
Slide 13: Selected Period-End Balance Sheet
13 Selected Period-End Balance Sheet ($ in millions, except per-share data) Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q1 2023 Highlights (compared to Q4 2022) ASSETS: ■ Results were impacted by the closing of Total assets $53,994.2 $31,848.6 $31,472.0 $30,135.7 $30,637.1 the merger on February 28, 202
Slide 14: Summary Income Statement
14 Summary Income Statement For the Quarter Ended Q1 2023 Highlights (compared to Q4 2022) ($ in millions, except per-share data) Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Net interest income before provision $374.7 $305.5 $287.6 $248.2 $228.8 ■ Results include one month of the combined company’s oper
Slide 15: Income Statement Component Details
15 Income Statement Component Details For the Quarter Ended March 31, 2023 Q1 2023 Highlights LESS: EQUALS LESS: EQUALS Adjusted ■ Results include one month of the Non-Operating Operating Merger-Related Operating ($ in thousands, except per-share amounts) GAAP Income Items (1) Income (2) Items (3) c
Slide 16: Income Statement Highlights
INCOME STATEMENT HIGHLIGHTS Q1 2023
Slide 17: Net Interest Income
17 Net Interest Income Net Interest Income Net Interest Income $400.0 excluding Purchase Accounting Adjustments ("PAA") $374.7 $400.0 $350.0 $350.0 $343.0 ($ in millions) $305.5 ($ in millions) $305.2 $300.0 $287.6 $300.0 $286.9 $248.2 $247.2 $250.0 $250.0 $228.8 $227.4 $200.0 $200.0 Q1 2022 Q2 2022
Slide 18: Net Interest Margin
18 Net Interest Margin Net Interest Margin Comparison Net Interest Margin: Q4 2022 vs Q1 2023 5.00% 0.05% 0.05% 4.01% 4.01% 4.08% 0.24% 3.88% 3.87% 3.73% 4.00% 0.47% 3.41% 3.40% 3.14% 3.12% 3.00% (0.43)% 4.08% 4.01% (0.27)% (0.04)% 2.00% 1.00% —% Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q4 2022 LHFI-
Slide 19: Interest Rate Sensitivity: Loans
19 Interest Rate Sensitivity: Loans Loan Repricing Detail (1), (2) Loan Maturities at March 31, 2023 ($ in millions) Q4 2022 Q1 2023 Q4 2022 Q1 2023 <=6 7 to 12 13 to 24 25 to 36 37 to 60 61+ Fixed $ 8,981 $ 17,289 34 % 46 % ($ in millions) Months Months Months Months Months Months Total Fixed $ 2,5
Slide 20: Interest Rate Sensitivity: Balance Sheet
20 Interest Rate Sensitivity: Balance Sheet Interest Rate Simulation Impact on Net Interest Income (1), (2) March 31, 2023 December 31, 2022 September 30, 2022 Ramp Shock Ramp Shock Ramp Shock Year 1 Year 2 Year 1 Year 2 Year 1 Year 2 Year 1 Year 2 Year 1 Year 2 Year 1 Year 2 Up 200 basis points (0.
Slide 21: Non-Interest Income
21 Non-Interest Income For the quarter ended Q1 2023 Highlights (compared to Q4 2022) ($ in millions) Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 ■ Results include one month of the Service charges on deposits $14.3 $12.1 $12.6 $12.0 $11.6 combined company’s operations. Card-based fees 11.6 9.0 9.1 10.5
Slide 22: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Q1 2023
Slide 23: Q1 2023 Loan Roll Forward
23 Q1 2023 Loan Roll Forward $ in millions $40,000 $10,884 $56 $37,091 $35,000 $30,000 $756 ($132) $26,156 ($452) ($177) $25,000 $20,000 Beginning Balance New Originations Net Advances/ Prepayments Payoffs Merger Other Ending Balance (12/31/2022) Payments (3/31/2023) Footnotes: Other includes purcha
Slide 24: Loan and Lease Characteristics: Overall Portfolio and Q1 2023 Production
24 Loan and Lease Characteristics: Overall Portfolio and Q1 2023 Production Mortgage Portfolio Composition at March 31, 2023 Owner Occupied CRE • Portfolio average loan size of $956,000 • Portfolio average loan size of $470,000 Multifamily, 15% • 1Q23 average loan size of $1.7 million • 1Q23 average
Slide 25: CRE and C&I Portfolio Composition
25 CRE and C&I Portfolio Composition CRE Portfolio Composition (1) C&I Portfolio Composition (1) $17.1 Billion at March 31, 2023 $9.8 Billion at March 31, 2023 Special Purpose, 7.2% Agriculture, 7.4% Hotel/Motel, 3.9% Other, 11.4% Other Healthcare, 3.1% Contractors, 7.5% Other, 11.7% Retail, 11.8% D
Slide 26: Office Portfolio Details
26 Office Portfolio Details Number of Loans by Balance Geography Office Portfolio Metrics at March 31, 2023 Average loan size $1.3 million Other, 9% 1,746 Average LTV 57% Southern CA, 20% DSC (non-owner occupied) 1.75x Puget Sound, 21% % with guaranty (by $ / by #) 83% / 82% Past due 30-89 days $0.4
Slide 27: Allowance for Credit Losses (ACL)
27 Allowance for Credit Losses (“ACL”) Allowance for Credit Losses: Merger Impacts Current Expected Credit Losses (“CECL”) Details Loans and Unfunded ($ in thousands) Leases Commitments Total ■ Recorded an initial ACL for historical Columbia Allowance for credit losses at December 31, 2022 $301,135
Slide 28: Credit Quality
28 Credit Quality ■ If the remaining credit discount on loans of $107 million at March 31, 2023 is added to the ACL of $436 million at March 31, 2023, the ACL would increase to 1.46% of loans from the reported 1.18% level. ■ The increase in classified asset ratios between December 31, 2022 and March
Slide 29: Diversified Commercial Bank Business Model Supports Granular Deposit Base
29 Our Diversified Commercial Bank Business Model with a Strong Retail Presence Supports our Granular, High-Quality Deposit Base Deposits by Type Deposits by Business Line March 31, 2023 Average consumer account balance $20 thousand Average commercial account balance $108 thousand Demand, 14.2% Aver
Slide 30: Capital Impacts: Q4 2022 to Q1 2023
30 Capital Impacts: Q4 2022 to Q1 2023 12.0% Common Equity Tier 1 ("CET1") Ratio 11.0% 9.5% 0.5% 0.5% 10.0% 8.9% 8.9% 12.5% 11.0% 0.4% 8.0% 1.9% 10.0% (0.2)% (0.1)% 8.9% 3.5% (2.3)% 6.0% 7.5% 10.5% 4.0% 8.5% 5.0% 7.0% 6.0% 2.0% 2.5% —% —% Tier 1 Leverage ³ CET1 Tier 1 Risk-Based Total Risk-Based 12/
Slide 31: Appendix: Non-GAAP Reconciliation
APPENDIX Non-GAAP Reconciliation
Slide 32: Non-GAAP Reconciliation: Tangible Capital
32 Non-GAAP Reconciliation: Tangible Capital ($ in thousands, except per share data) Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Total shareholders' equity a $4,884,723 $2,479,826 $2,417,514 $2,518,276 $2,607,598 Less: Goodwill 1,030,142 — — — — Less: Other intangible assets, ne
Slide 33: Non-GAAP Reconciliation
33 Non-GAAP Reconciliation For the Quarter Ended For the Quarter Ended ($ in thousands) Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 ($ in thousands) Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 (1) Net interest income c $ 375,369 $ 305,762 $ 287,933 $ 248,522 $ 229,117 Non-Interest Income Adjustments Gain on
Slide 34: Non-GAAP Reconciliation (cont.)
34 Non-GAAP Reconciliation (cont.) For the Quarter Ended For the Quarter Ended ($ in thousands, except per share data) Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 ($ in thousands) Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Select Per-Share & Performance Metrics Earnings-per-share - basic (1) j/r $ (0.09) $
Slide 35: www.columbiabankingsystem.com
www.columbiabankingsystem.com
Columbia Banking System — Q1 2023 Earnings Presentation on 6ix