Columbia Banking System, Inc. · NASDAQ:COLB
Columbia Banking System — Q2 2021 Earnings Presentation
37 slides from Columbia Banking System's earnings presentation, Jul 29, 2021
Slide 1: 2Q 2021 Forward Looking Statements
NASDAQ - COLB 2Q 2021 Portland, Oregon Forward Looking Statements This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words such as “may,” “expected,” “anticipate”, “continue,” or other comparabl
Slide 2: Lasting Strength
OVERVIEW OF COLUMBIA BANK Lasting Strength Sustained track record of driving long-term shareholder value Maintained a strong capital position with ample liquidity Seasoned acquirer with proven integration success Low-cost deposit funding base Award-winning company that is committed to the communitie
Slide 3: By the Numbers
OVERVIEW OF COLUMBIA BANK By the Numbers $18.0 Billion in Total Assets $9.7 Billion in Total Loans $15.3 Billion in Total Deposits 145 Branches 48 Branch Consolidations 6 Acquisitions 3 Branch Sales Over past 10 years 14.0% Total Risk-Based Capital (1) 10.00% CB 8.6% Leverage Ratio (1) 5.00% CB 3 (1
Slide 4: Continually Building Value
Continually Building Value June 2021 January 2010 Announced merger with April 2013 November 2017 Bank of Commerce Holdings Completed Two FDIC Assisted Acquisitions: Acquired: Acquired: $1.8B Assets Columbia River Bank $913MM Assets West Coast Bancorp $2.6B Assets Pacific Continental Corp $2.9B Asset
Slide 5: 2Q 2021 Recap
(1) Pre-tax, Pre-provision Income OVERVIEW OF COLUMBIA BANK Q1 Q2 Q3 Q4 Totals may not foot due to rounding 2Q 2021 Recap 2021 YTD $66 $66 $132 Second quarter net income of $55.0 2020 $61 $82 $64 $71 $278 million; diluted earnings per share of $0.77 2019 $59 $66 $64 $61 $250 Pre-tax, pre-provision i
Slide 6: Summary Income Statement
Summary Income Statement $ in thousands 2Q21 1Q21 4Q20 3Q20 2Q20 (except EPS) Net Interest Income $125,462 $123,994 $131,112 $124,726 $121,851 Provision/(Recapture) for Credit Losses (5,500) (800) (4,700) 7,400 33,500 Net Interest Income after 130,962 124,794 135,812 117,326 88,351 Provision/(Recapt
Slide 7: Selected Balance Sheet & Ratios
Selected Balance Sheet & Ratios $ in millions Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Total Assets $18,013 $17,335 $16,585 $16,233 $15,921 Securities, Including Debt Securities, Equity Securities 6,238 5,520 5,234 4,305 3,723 & FHLB Stock Loans, Net of unearned Income 9,693
Slide 8: Diversified, Relationship-Centered Deposit Base
Diversified, Relationship-Centered Deposit Base 2Q20 2Q21 $13.1 billion $15.3 billion 59% Business & 41% Consumer 61% Business & 39% Consumer Cost of Deposits = 7 bps Cost of Deposits = 4 bps 9.7% 9.9% 19.7% 19.2% 51.2% 50.2% 9.0% 7.9% 4.7% 4.7% 1.3% 1.6% 0.8% 0.7% 4.4% 5.0% As of Jun 30, 2020 As of
Slide 9: Net Interest Margin
Net Interest Margin 4.33% 4.24% 4.18% 3.67% 3.68% 3.56% 3.52% 3.65% 3.23% 3.64% 3.31% $501.8 $507.6 3.47% 3.47% 3.16% $486.7 3.19% 3.25% 3.15% $133.0 $380.1 $126.6 $125.9 $127.4 $123.7 $253.3 2017 2018 2019 2020 2021 YTD 2Q20 3Q20 4Q20 1Q21 2Q21 Net Interest Income (tax equivalent) Net Interest Marg
Slide 10: Interest Rate Sensitivity
Interest Rate Sensitivity (1) Floors: Floating and Variable Rate Loans (in millions) YTD Operating Net Interest Margin 100-200 Balances At Floor 0-100 bps bps >200 bps No Floor Total 0.06% 3.82% PRIME $541 $103 $10 $4 $227 $884 (0.06)% 0.02% 1 MO 573 46 — — 1,472 2,091 (0.18)% 3 MO 14 — — — 98 112 (
Slide 11: Noninterest Income
Noninterest Income $109,642 $104,500 14,000 $97,181 16,710 $88,256 $37,259 11,474 20,024 8,464 9,211 4,283 12,399 11,866 13,465 16,425 24,802 11,478 12,135 $23,562 $23,166 12,799 $22,472 $22,730 2,275 2,325 2,082 2,497 $45,896 19,719 12,830 2,893 25,627 15,198 4,824 4,514 6,645 7,960 7,369 11,882 5,
Slide 12: Strong Earnings Performance
Strong Earnings Performance $2.68 $2.36 $2.17 $1.86 $1.50 $0.82 $0.73 $0.77 $0.63 $194,451 $0.52 $172,882 $58,300 $152,244 $55,039 $51,853 $44,734 $112,828 $106,892 $36,582 2017 2018 2019 2020 2021 YTD 2Q20 3Q20 4Q20 1Q21 2Q21 Net Income Earnings Per Share (Diluted) 12 $ in thousands
Slide 13: Improved Operating Leverage
Improved Operating Leverage 2.67% 2.61% 2.59% 2.17% 2.13% 2.13% 2.05% 1.98% 1.93% 1.89% $17,283 $17,670 $16,892 $16,477 $15,965 $15,401 $15,148 $13,341 $12,725 $10,134 2017 2018 2019 2020 2021 YTD 2Q20 3Q20 4Q20 1Q21 2Q21 Average Total Assets Core NIE/Avg Assets(1) $ in millions 13 (1) Non-GAAP fina
Slide 14: Total Loans
Total Loans Rolling 5 Quarters Loan Production Total Loans, Net of Unearned Income $1,257 $9.7 billion Annualized Quarterly Growth =10% (excluding PPP Loans (3)) $895 962 $657 511 $468 $279 605 295 384 270 (1) (2) 2Q20 3Q20 4Q20 1Q21 2Q21 Commercial Business Loan Originations PPP Loan Originations 3
Slide 15: Well Diversified C&I and Agriculture Loan Portfolios
Well Diversified C&I and Agriculture Loan Portfolios C&I Portfolio Agriculture Portfolio $3.7 billion $798 million Healthcare 4.3% Dairy Cattle & Milk Wholesalers Production 2.5% 3.9% Dentists 20.5% Cattle 12.3% Finance/ Insurance Contractors Fishing 5.8% 9.2% 7.8% Other 38.0% Retail 3.6% Manufactur
Slide 16: Balanced CRE Loan Portfolio
Balanced CRE Loan Portfolio CRE Portfolio $4.1 billion Consistent CRE Coverage Balanced with 51% Income Property and 49% Owner-occupied 183.4% 186.8% 180.1% 181.3% 185.6% 137.1% 133.7% 132.7% 129.6% 131.1% $4,925 $5,016 $4,737 $4,823 $4,840 Office 23.7% 843 915 Multifamily Education 704 796 778 10.4
Slide 17: Paycheck Protection Program
Change in PPP Portfolio (Gross of unearned income) $ in millions Paycheck Protection $563 Program $971 $709 During 2021, Columbia Bank originated more $-822 than 4,800 loans through Round 2 of the $0 Paycheck Protection Program, for a total of $-3 $563 million. Mar 31, Round 1 Round 2 Round 1 Round
Slide 18: Exposure in Stressed Sectors
Exposure in Stressed Sectors(1) Total Outstanding Loans Total Stressed Sector Commitments $9.7 billion $1.4 billion Aviation $139.0 Airlines, Leasing Remaining Portfolio Restaurants/ Restaurants, Drinking Establishments, 87.2% $230.3 Specialty Food Services(2) Food Service Hotels/ $353.8 Motels Reta
Slide 19: Loan Deferral Update
Loan Deferral Update % % Number of Loan Deferrals Change Change 6/30/20 Ended (1) Redeferrals New 12/31/20 Ended (1) Redeferrals New 6/30/21 Dental 1,569 (1,570) 1 1 1 (99.9)% (2) — 1 — (100.0)% Hotel/Motel 73 (87) 14 10 10 (86.3)% (10) 1 — 1 (90.0)% Office 158 (160) 3 5 6 (96.2)% (6) — — — (100.0)%
Slide 20: Components of 2Q Change in Loans
Components of 2Q Change in Loans 2Q21 $657 $9 $9,676 $9,693 $(364) $(225) $(60) Beginning Balance Net Advances/ Prepayments Payoffs New Originations Other Ending Balance Payments inclusive of $52 million in PPP loans 2Q20 $1,257 $(20) $9,772 $8,933 $(208) $(161) $(29) Beginning Balance Net Advances/
Slide 21: Allowance for Credit Losses (ACL)
Allowance for Credit Losses (ACL) 1.80% 1.72% 1.70% 1.69% 1.59% 1.62% 1.55% 1.58% 1.53% 1.48% $156,968 $151,546 $149,140 $148,294 $142,988 Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 (1) Allowance for Credit Losses % Allowance for Credit Losses % Allowance for Credit Losses excl
Slide 22: Nonperforming Assets
Nonperforming Assets 0.34% 0.29% 0.21% $54,479 0.20% $47,854 0.14% $35,359 $34,102 53,732 $24,402 47,231 34,806 33,581 24,021 Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Nonaccrual loans OREO and OPPO Nonperforming assets to period-end assets 22 $ in thousands
Slide 23: High Quality Securities Portfolio
Highly Quality Securities Portfolio(1) Portfolio Mix Portfolio is well positioned for a challenging economic environment: $6.2 billion • Strong credit quality with focus on agencies and high-quality municipal securities; no private-label MBS Municipals 12.3% • Over half of the MBS portfolio is Agenc
Slide 24: Strong Capital, Dividend Payouts & Total Return
Strong Capital, Dividend Payouts & Total Return 14.2% 14.5% 14.7% 14.5% Total Return Performance 14.0% 600 500 9.8% 9.8% 9.8% 9.0% 9.0% $0.82 400 $0.77 $0.73 Index Value $0.63 300 $0.52 200 $0.28 $0.28 $0.28 $0.28 $0.28 100 0 2Q20 3Q20 4Q20 1Q21 2Q21 3 30 20 0 7 4 1 1 8 08 5 2 9 9 6 01 01 01 01 02 0
Slide 25: Diversity, Equity and Inclusivity
Diversity, Equity and Inclusivity Columbia's Diversity, Equity and Inclusivity program continues to make a positive impact on clients and the broader Northwest Community. Over More than $120,000 $360,000 $100,000 Awarded through the Bank's Provided to BIPOC and Scholarship Fund for NW Equity and Inc
Slide 26: Dedicated to Our Communities
Fundraising Volunteer Hours Dedicated to Our $369,978 16,373 Communities $430,988 28,313 $342,754 26,944 At Columbia Bank, we empower $303,929 20,614 employees to address the unique needs $286,027 15,336 $229,591 18,979 of their communities and offer support in the manner that makes the biggest diff
Slide 27: Columbia – An Award-Winning Company
Columbia – An Award-Winning Company 27
Slide 28: Responsibility: ESG Encompasses Columbia's Do RIGHT Values
NEW SLIDE - NEEDS APPROVAL Responsibility ESG Encompasses Columbia's Do RIGHT Values When we Do RIGHT by our people and our clients, shareholders invest and communities prosper. E nvironment S ocial G overnance Investing in Board Climate Valuing our Charitable Stewardship Investment our Independence
Slide 29: Acquisition of Bank of Commerce Holdings (BOCH)
Acquisition of Bank of Commerce Holdings (BOCH) • Columbia Banking Systems Inc. (COLB) will acquire Bank of Commerce Holdings (BOCH), the bank holding company for Merchants of Commerce, a community bank headquartered in Sacramento, California Transaction • This will be COLB's 11th acquisition since
Slide 30: Attractive West Coast Footprint
PRO FORMA COMPANY OVERVIEW Attractive West Coast Footprint Top 5 MSAs by Pro Forma Deposits(1) Market Market Deposits Share 1 Seattle-Tacoma-Bellevue, WA $5.1bn 3.8% 2 Portland-Vancouver-Hillsboro, OR-WA $2.3bn 3.5% 3 Salem, OR $1.0bn 13.3% 4 Olympia-Lacey-Tumwater, WA $0.8bn 15.0% 5 Sacramento-Rose
Slide 31: Transaction Structure
Transaction Structure Fixed Exchange Ratio • 0.400 of a COLB share issued for each BOCH common share outstanding • 100% stock-for-stock outstanding Consideration Mix • In-the-money options will receive cash consideration Pro Forma Ownership • 91% COLB | 9% BOCH Local Leadership • Randy Eslick, curre
Slide 32: Key Assumptions
Key Assumptions Earnings Estimates • Consensus earnings estimates for both companies • Estimated $10.6 million of pre-tax run-rate savings, or 30.0% of BOCH's noninterest expense (excluding amortization of intangibles) Cost Savings / Other – Phased in 70% in 2022, and 100% thereafter Earnings Adjust
Slide 33: Executive Leadership Team
Executive Leadership Team Investor Relations 253-471-4065 investorrelations@columbiabank.com Clint Stein Kumi Yamamoto Baruffi Aaron James Deer President Executive Vice President Executive Vice President Chief Executive Officer General Counsel Chief Financial Officer Columbia Bank Center 1301 A Stre
Slide 34: Non-GAAP Financial Measures
Non-GAAP Financial Measures Tangible Book Value per Common Share $ in thousands 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 YTD Total Shareholders' Equity $706,878 $759,338 $764,008 $1,053,249 $1,228,175 $1,242,128 $1,251,012 $1,949,922 $2,033,649 $2,159,962 $2,347,607 $2,333,246 -Pr
Slide 35: Non-GAAP Financial Measures
Non-GAAP Financial Measures NIE/Average Assets $ in thousands 2017 2018 2019 2020 2021 2Q20 3Q20 4Q20 1Q21 2Q21 Reported Noninterest Expense (numerator A) $ 291,017 $ 340,490 $ 345,482 $ 334,519 $ 167,675 $ 80,833 $ 85,115 $ 84,300 $ 83,559 $ 84,116 (2) - FDIC Clawback (Expense)/Recap 54 — — — — — —
Slide 36: Non-GAAP Financial Measures
Non-GAAP Financial Measures Net Interest Margin $ in Thousands 2017 2018 2019 2020 2021 YTD 2Q20 3Q20 4Q20 1Q21 2Q21 Net Interest Income (tax equivalent) (numerator A) $ 380,107 $ 486,667 $ 501,770 $ 507,574 $ 253,298 $ 123,692 $ 126,554 $ 132,995 $ 125,889 $ 127,409 Adjustments to arrive at operati
Slide 37: Non-GAAP Financial Measures
Non-GAAP Financial Measures Operating Efficiency Ratio Tangible Common Equity $ in thousand 2Q20 3Q20 4Q20 1Q21 2Q21 $ in thousands 2Q20 3Q20 4Q20 1Q21 2Q21 Total Shareholders' Equity (numerator Noninterest expense (numerator A) $ 80,833 $ 85,115 $ 84,300 $ 83,559 $ 84,116 A) $2,276,755 $2,301,981 $
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