Columbia Banking System, Inc. · NASDAQ:COLB
Columbia Banking System — Q4 2020 Earnings Presentation
34 slides from Columbia Banking System's earnings presentation, Jan 28, 2021
Slide 1: 4Q 2020 / Forward Looking Statements
NASDAQ - COLB 4Q 2020 North Cascade Mountains 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 co
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 results 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 $16.6 Billion in Total Assets $9.4 Billion in Total Loans $13.9 Billion in Total Deposits 145 Branches 45 Branch Consolidations 6 Acquisitions 3 Branch Sales Over past 10 years 14.3% Total Risk-Based Capital (1) 10.00% CB 9.1% Leverage Ratio (1) 5.00% CB 3 (1
Slide 4: Continually Building Value
Continually Building Value January 2010 April 2013 November 2017 Completed Two FDIC Assisted Acquisitions: Acquired: Acquired: Columbia River Bank $913MM Assets West Coast Bancorp $2.6B Assets American Marine Bank $308MM Pacific Continental Corp $2.9B Assets $24.19 May 2011 November 2014 Completed T
Slide 5: 4Q 2020 Recap
(1) Pre-tax, Pre-provision Income OVERVIEW OF COLUMBIA BANK Q1 Q2 Q3 Q4 Totals may not foot due to rounding 4Q 2020 Recap 2020 $59 $78 $62 $70 $270 Fourth quarter net income of $58.3 million; 2019 $58 $64 $63 $60 $245 diluted earnings per share of $0.82 2018 $53 $56 $61 $57 $227 Pre-tax, pre-provisi
Slide 6: Summary Income Statement
Summary Income Statement $ in thousands 4Q20 3Q20 2Q20 1Q20 4Q19 2020 2019 (except EPS) Net Interest Income $131,112 $124,726 $121,851 $122,422 $124,817 $500,111 $493,405 Provision/(Recapture) for Credit Losses (4,700) 7,400 33,500 41,500 1,614 77,700 3,493 Net Interest Income 135,812 117,326 88,351
Slide 7: Selected Balance Sheet & Ratios
Selected Balance Sheet & Ratios $ in millions Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Total Assets $16,585 $16,233 $15,921 $14,039 $14,080 Securities, Including Equity Securities & FHLB Stock 5,234 4,305 3,723 3,591 3,794 Loans, Net of unearned Income 9,428 9,689 9,772 8,933
Slide 8: Diversified, Relationship-Centered Deposit Base
Diversified, Relationship-Centered Deposit Base 4Q19 4Q20 $10.7 billion $13.9 billion 59% Business & 41% Consumer 60% Business & 40% Consumer Cost of Deposits = 21 bps Cost of Deposits = 5 bps 10.8% 10.3% 21.7% 20.1% 49.9% 49.8% 8.4% 8.3% 4.7% 2.8% 2.0% 1.5% 0.8% 1.4% 3.1% 4.4% As of Dec 31, 2019 As
Slide 9: Reported Net Interest Margin
Reported Net Interest Margin 4.33% 4.24% 4.12% 4.18% 4.11% 3.68% 3.67% 4.00% 3.56% 3.52% 3.65% 3.64% 3.47% 3.47% $501.8 $507.6 $133.0 $486.7 $126.9 $124.3 $126.6 $123.7 $380.1 $344.4 2016 2017 2018 2019 2020 4Q19 1Q20 2Q20 3Q20 4Q20 Reported Net Interest Income (tax equivalent) Reported Net Interest
Slide 10: Interest Rate Sensitivity
Interest Rate Sensitivity Year over Year Operating Net Interest Margin Floors: Floating and Variable Rate Loans (in millions) 100-200 Balances At Floor 0-100 bps bps >200 bps No Floor Total 4.23% PRIME $504 $96 $12 $5 $253 $870 (0.03)% 1 MO 556 29 — 1 1,469 2,055 (0.16)% 3 MO 9 — — — 106 115 (0.21)%
Slide 11: Noninterest Income
Noninterest Income $109,642 $104,500 14,000 16,710 $97,181 $88,082 $88,256 $37,259 11,474 4,997 20,024 8,464 9,211 4,283 8,732 12,399 11,866 10,967 13,465 16,425 24,802 11,478 12,135 $23,562 11,266 12,799 $22,472 $21,807 $21,207 25,627 19,719 2,275 2,082 23,620 2,559 2,246 15,198 12,830 2,893 3,625
Slide 12: Strong Earnings Performance
Strong Earnings Performance $2.68 $2.36 $2.17 $1.81 $1.86 $0.82 $0.64 $0.63 $194,451 $0.52 $172,882 $0.20 $58,300 $154,244 $46,129 $44,734 $36,582 $112,828 $104,866 $14,628 2016 2017 2018 2019 2020 4Q19 1Q20 2Q20 3Q20 4Q20 Net Income Earnings Per Share (Diluted) 12 $ in thousands
Slide 13: Improved Operating Leverage
Improved Operating Leverage 2.77% 2.67% 2.61% 2.59% 2.53% 2.41% 2.13% 2.13% 2.05% 2.17% $16,477 $15,965 $15,401 $15,148 $13,751 $13,996 $13,341 $12,725 $10,134 $9,312 2016 2017 2018 2019 2020 4Q19 1Q20 2Q20 3Q20 4Q20 Average Total Assets Core NIE/Avg Assets(1) $ in millions 13 (1) Non-GAAP financial
Slide 14: Total Loans, Net of Unearned Income
Total Loans, Net of Unearned Income Annual Loan Production Total Loans = $9.4 billion LTM growth = 7.8% $2,335 971 $1,576 $1,434 $1,261 $1,201 1,364 (1) Commercial 2016 2017 2018 2019 2020 Business 38.2% Commercial Real Estate 4th Quarter Loan Production 43.0% $468 $427 $378 $388 $294 Agriculture 8.
Slide 15: Well Diversified C&I and Agriculture Loan Portfolios
Well Diversified C&I and Agriculture Loan Portfolios C&I Portfolio Agriculture Portfolio $3.6 billion $780 million Healthcare 4.9% Dairy Cattle Wholesalers & Milk Dentists 21.0% Cattle 12.0% 2.6% Production 3.9% Finance/ Insurance 10.3% Contractors Fishing 7.1% 8.3% Other 38.9% Retail 3.1% Row Crops
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 200.4% 186.4% 183.4% 186.8% 180.1% 139.3% 138.5% 137.1% 133.7% 132.7% $4,766 $4,737 $4,823 $4,840 $4,670 Office 22.7% Multifamily 796 778 Education 820 700 704 9.6%
Slide 17: Paycheck Protection Program
Change in PPP Portfolio (Gross of unearned income) $ in millions Paycheck Protection $971 Program $-58 $662 During 2020, Columbia Bank originated nearly $-252 $1 billion through the Paycheck Protection Program. The average loan size was approximately $0 $217,000. Mar 31, 2020 Originations Paydowns P
Slide 18: Exposure in Stressed Sectors
Exposure in Stressed Sectors(1) Total Outstanding Loans Total Stressed Sector Commitments $9.4 billion $2.4 billion Unused Commitments Aviation $144.8 Airlines, Leasing Restaurants/ (2) $213.9 Restaurants, Drinking Establishments, Specialty Food Services Remaining Portfolio Food Service 74.8% Veteri
Slide 19: Loan Deferral Update
Loan Deferral Update % % Number of Loan Deferrals Change Change 6/30/20 Ended (1) Redeferrals New 9/30/20 Ended (1) Redeferrals New 12/31/20 Dental 1,569 (1,562) — 1 8 (99.5)% (8) 1 — 1 (87.5)% Hotel/Motel 73 (74) 12 6 17 (76.7)% (13) 2 4 10 (41.2)% Office 158 (154) 2 2 8 (94.9)% (6) 1 3 6 (25.0)% H
Slide 20: Components of Annual Change in Loans
Components of Annual Change in Loans 2020 $2,335 $36 $9,428 $8,743 $(713) $(765) $(208) Beginning Balance Net Advances/ Prepayments Payoffs New Originations Other Ending Balance Payments inclusive of $971 million in PPP loans 2019 $1,576 $55 $8,392 $8,743 $(382) $(609) $(289) Beginning Balance Net A
Slide 21: Drivers of Allowance for Credit Losses (ACL) Change
Drivers of Allowance for Credit Losses (ACL) Change Day 1 Adjustment - CECL Day 1 transition adjustment Portfolio Changes - new loans, line utilization change, other balance changes, management overlays Economic Factors - macro-economic variables; primarily forecasted deterioration in GDP and Unempl
Slide 22: Nonperforming Assets
Nonperforming Assets 0.34% 0.34% 0.29% 0.24% $54,479 0.21% $48,157 $47,854 $35,359 $33,612 53,732 47,647 47,231 33,060 34,806 Dec 31, 2019 Mar 31, 2020 Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Nonaccrual loans OREO and OPPO Nonperforming assets to period-end assets 22 $ in thousands
Slide 23: Highly Quality Securities Portfolio
Highly Quality Securities Portfolio(1) Portfolio Mix Portfolio is well positioned for a challenging economic environment: $5.2 billion • Strong credit quality with focus on agencies and high-quality municipal securities; no private-label MBS Municipals 14% • Over half of the MBS portfolio is Agency
Slide 24: Strong Capital, Dividend Payouts & Total Return
Strong Capital, Dividend Payouts & Total Return 14.2% 14.5% Total Return Performance 13.6% 14.0% 13.4% 500 10.7% 400 10.2% 9.8% 9.8% 9.8% $0.82 300 Index Value $0.64 $0.63 $0.50 $0.52 200 0.22 $0.28 $0.28 $0.28 $0.28 100 0.28 $0.20 0 4Q19 1Q20 2Q20 3Q20 4Q20 16 31 13 31 10 0 31 17 31 14 31 11 31 08
Slide 25: Welcome to the Boise NeighborHub
NOW OPEN Welcome to the Boise NeighborHub We opened our first retail location in Downtown Boise, ID on September 28th, 2020. The opening marks the second location of the bank's signature NeighborHub concept, which serves the broader community as a hub for educational seminars, local events, and comm
Slide 26: Providing Support During COVID-19
Providing Support During COVID-19 Employees: • Implemented social distancing best practices Columbia Bank responded to the pandemic • Required daily wellness attestation with an established, comprehensive and well- Clients: organized pandemic response plan that was • Continuing to provide relief opt
Slide 27: On the Road to Recovery
REVISED CONTENT FOR On the Road to Recovery PREVIOUS SLIDE At Columbia Bank, we are dedicated to helping our communities navigate the road to recovery during this challenging time through various initiatives. 27 27
Slide 28: Dedicated to Our Communities
Dedicated to Our 2020 Communities $315,025 FUNDRAISING Warm Hearts Winter Drive $35,902 At Columbia Bank, we empower American Heart Association employees to address the unique needs of their communities and offer support in the manner that makes the biggest 16,373 VOLUNTEERISM Hours difference. 736
Slide 29: Columbia – An Award-Winning Company
Columbia – An Award-Winning Company 29
Slide 30: Executive Leadership Team
Executive Leadership Team Investor Relations 253-305-1921 investorrelations@columbiabank.com Clint Stein Kumi Yamamoto Baruffi Aaron James Deer President Executive Vice President Executive Vice President Columbia Bank Center Chief Executive Officer General Counsel Chief Financial Officer 1301 A Stre
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures Operating Efficiency Ratio Tangible Common Equity $ in thousand 4Q19 1Q20 2Q20 3Q20 4Q20 $ in thousands 4Q19 1Q20 2Q20 3Q20 4Q20 Total Shareholders' Equity Noninterest expense (numerator A) $ 86,978 $ 84,271 $ 80,833 $ 85,115 $ 84,300 $ 2,159,962 $ 2,213,602 $ 2,276,755 $
Slide 32: Non-GAAP Financial Measures
Non-GAAP Financial Measures NIE/Average Assets $ in thousands 2016 2017 2018 2019 2020 4Q19 1Q20 2Q20 3Q20 4Q20 Reported Noninterest Expense (numerator A) $ 261,142 $ 291,017 $ 340,490 $ 345,482 $ 334,519 $ 86,978 $ 84,271 $ 80,833 $ 85,115 $ 84,300 - FDIC Clawback (Expense)/Recap(2) (280) 54 — — —
Slide 33: Non-GAAP Financial Measures
Non-GAAP Financial Measures Net Interest Margin $ in Thousands 2016 2017 2018 2019 2020 4Q19 1Q20 2Q20 3Q20 4Q20 Net Interest Income (tax equivalent) (numerator A) $ 344,425 $ 380,107 $ 486,667 $ 501,770 $ 507,574 $ 126,852 $ 124,333 $ 123,692 $ 126,554 $ 132,995 Average Earning Assets (denominator
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 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 -Preferred Equity — — —
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