Columbia Banking System, Inc. · NASDAQ:COLB
Columbia Banking System — Q2 2020 Earnings Presentation
29 slides from Columbia Banking System's earnings presentation, Jul 23, 2020
Slide 1: 2Q 2020
NASDAQ - COLB 2Q 2020 Mount Hood, 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 compara
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 $15.9 Billion in Total Assets $9.8 Billion in Total Loans $13.1 Billion in Total Deposits 146 Branches 48 Branch Consolidations 8 Acquisitions 3 Branch Sales Over past 10 years 14.02% Total Risk-Based Capital 10.00% CB 9.56% Leverage Ratio 5.00% CB Represents
Slide 4: Providing Support During COVID-19
OVERVIEW OF COLUMBIA BANK Employees: • Continuing remote-working, split locations and Providing Support During staggered schedules • Implemented social distancing best practices COVID-19 • Enhanced employee pay and sick time • Required daily wellness attestation Columbia Bank responded to the pandem
Slide 5: Paycheck Protection Program
Paycheck Protection Program Loan Originations OVERVIEW OF COLUMBIA BANK Paycheck Protection $962,010 4,454 Program $402,669 2,586 During 2Q 2020, Columbia Bank originated April more than 4,400 loans to existing clients May $558,835 through the Paycheck Protection Program, June 1,863 totaling nearly
Slide 6: 2Q 2020 Recap
(1) Pre-tax, Pre-provision Income OVERVIEW OF COLUMBIA BANK Q1 Q2 Q3 Q4 Totals may not foot due to rounding 2Q 2020 Recap 2020 $59 $78 $138 2019 $58 $64 $63 $60 $245 Second quarter net income of $36.6 million; diluted earnings per share of $0.52 2018 $53 $56 $61 $57 $227 (1) Pre-tax, pre-provision i
Slide 7: Summary Income Statement
Summary Income Statement $ in Thousands 2Q20 1Q20 4Q19 3Q19 2Q19 YTD 2020 YTD 2019 (except EPS) Net Interest Income $121,851 $122,422 $124,817 $122,450 $125,116 $244,273 $246,138 Provision for Credit Losses 33,500 41,500 1,614 299 218 75,000 1,580 Net Interest Income 88,351 80,922 123,203 122,151 12
Slide 8: Selected Balance Sheet & Ratios
Selected Balance Sheet & Ratios $ in Millions Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Total Assets $15,921 $14,039 $14,080 $13,758 $13,091 Securities, Including Equity Securities & FHLB Stock 3,723 3,591 3,794 3,397 2,894 Loans, Net of unearned Income 9,772 8,933 8,743 8,756
Slide 9: Diversified, Relationship-Centered Deposit Base
Diversified, Relationship-Centered Deposit Base Solid deposit base that is well diversified across business & consumer. Jun 30, 2019 Jun 30, 2020 $10.2 billion $13.1 billion 58% Business & 42% Consumer 59% Business & 41% Consumer 10.4% 9.7% 21.9% 19.7% 49.8% 51.2% 7.9% 8.7% 4.7% 2.7% 2.2% 1.6% 0.8%
Slide 10: Reported Net Interest Margin
Reported Net Interest Margin 4.33% 4.40% 4.24% 4.18% 4.14% 4.12% 4.11% 4.00% 3.82% $600 $160 3.64% $501.8 $500 $486.7 $127.2 $124.6 $126.9 $124.3 $123.7 $120 $400 $380.1 $344.4 $300 $80 $248.0 $200 $40 $100 $0 $0 2016 2017 2018 2019 2020 YTD 2Q19 3Q19 4Q19 1Q20 2Q20 Reported Net Interest Income (tax
Slide 11: Interest Rate Sensitivity
Interest Rate Sensitivity Duration in Years All Variable or Floating Rate Loans (in millions) 0-100 100-200 Balances No Floor At Floor bps bps >200 bps Total 4.3 4.6 4.7 4.5 PRIME $349 $530 $57 $7 $13 $955 3.3 3.1 3.3 3.5 2.8 2.5 2.9 1 MO 1,551 315 16 — — 1,883 2.2 2.2 2.1 2.2 2.4 3 MO 112 23 2 — —
Slide 12: Noninterest Income & Noninterest Expense
Noninterest Income & Noninterest Expense Noninterest Income Noninterest Expense 56.3% 58.7% 58.1% 57.2% 54.9% $37,259 $87,076 $86,728 $86,978 $84,271 $80,833 26,001 23,972 23,660 20,232 $28,030 16,425 25,978 $25,648 7,928 8,645 9,010 9,197 $21,807 8,712 5,829 $21,207 2,559 8,812 2,246 2,893 3,596 3,
Slide 13: Improved Expense Management
Improved Expense Management 2.77% 2.67% 2.65% 2.59% 2.61% 2.59% 2.53% 2.41% 2.13% 2.27% $15,148 $14,572 $13,751 $13,996 $13,341 $13,460 $13,096 $12,725 $10,134 $ (Millions) $ (Millions) $9,312 2016 2017 2018 2019 2020 YTD 2Q19 3Q19 4Q19 1Q20 2Q20 Average Total Assets Core NIE/Avg Assets(1) $ in Mill
Slide 14: Total Loans, Net of Unearned Income
Total Loans, Net of Unearned Income Rolling 5 Quarter Loan Production Total Loans = $9.8 billion LTM growth = 13.0% $1,257 $962 $401 $383 $427 $331 $295 (1) Commercial 2Q19 3Q19 4Q19 1Q20 2Q20 Business 39.5% Commercial 2nd Quarter Loan Production Real Estate 41.3% $1,257 $962 Agriculture 8.7% $373 $
Slide 15: Well Diversified C&I and Agriculture Loans Portfolios
Well Diversified C&I and Agriculture Loans Portfolios C&I Portfolio Agriculture Portfolio $3.9 billion $846 million Healthcare 5.0% Wholesalers Dairy Cattle Dentists 19.9% 3.0% & Milk Cattle 13.1% Production 2.9% Finance/Insurance Contractors Other 37.1% Fishing 7.2% 8.8% 9.6% Retail 3.2% Row Crops
Slide 16: Balanced CRE Loan Portfolio
Balanced CRE Loan Portfolio CRE Portfolio $4.0 billion Consistent CRE Coverage Balanced with 52% Income Property and 48% Owner-occupied 199.7% 200.8% 200.4% 186.4% 186.6% 134.5% 139.3% 141.6% 138.9% 131.0% $4,766 $4,670 $4,737 $4,578 $4,661 820 700 704 Office 23.1% Multifamily 889 915 Education 9.0%
Slide 17: Exposure in Stressed Sectors
Exposure in Stressed Sectors(1) Total Outstanding Loans Total Stressed Sector Commitments $9.8 billion $2.8 billion Unused Commitments Aviation $158.0 Airlines, Leasing Restaurants/ (2) $229.9 Restaurants, Drinking Establishments, Specialty Food Services Food Service Remaining Portfolio 73.9% Veteri
Slide 18: Components of 2Q Change in Loans
Components of 2Q Change in Loans 2Q 2020 $1,257 $(20) $9,772 $8,933 $(208) $(161) inclusive of $962 million $(29) in PPP loans Beginning Balance Net Advances/ Prepayments Payoffs New Originations Other Ending Balance Payments 2Q 2019 $401 $17 $8,647 $8,521 $(43) $(176) $(73) Beginning Balance Net Ad
Slide 19: Drivers of Allowance for Credit Losses (ACL) Change
Example Total Return Performance 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 1.72% Economic Factors - macro-economic variables; primarily forecasted deterioration
Slide 20: Nonperforming Assets
Nonperforming Assets 0.34% 0.34% 0.31% 0.27% 0.24% $54,479 $48,157 $40,156 $37,646 $33,612 53,732 47,647 39,038 37,021 33,060 Jun 30, 2019 Sep 30, 2019 Dec 31, 2019 Mar 31, 2020 Jun 30, 2020 Nonaccrual loans OREO and OPPO Nonperforming assets to period-end assets 20 $ in Thousands
Slide 21: Highly Liquid, Risk Averse Securities Portfolio
Highly Liquid, Risk Averse Securities Portfolio(1) Portfolio Mix Portfolio is well positioned for a challenging economic environment: $3.7 billion • Strong credit quality with focus on agencies and high-quality municipal securities; no private-label MBS Municipals 13% • Partially funded with short-t
Slide 22: Strong Capital, Dividend Payouts & Total Return
Strong Capital, Dividend Payouts & Total Return 13.8% 14.0% 13.5% 13.6% 13.4% Total Return Performance 500 10.8% 10.5% 10.7% 10.2% 9.8% 400 $0.71 $0.70 $0.64 300 Index Value $0.50 $0.52 0.22 200 $0.28 $0.28 $0.28 $0.28 0.28 $0.20 100 0 2Q19 3Q19 4Q19 1Q20 2Q20 16 31 13 10 0 31 17 31 14 31 11 8 31 18
Slide 23: On the Road to Recovery
REVISED CONTENT FOR On the Road to Recovery PREVIOUS SLIDE At Columbia Bank, we are helping our communities navigate the road to recovery from the COVID-19 pandemic and other social issues. We feel it is important to support our regions during this challenging time through various initiatives. At C
Slide 24: Dedicated to Our Communities
OVERVIEW OF COLUMBIA BANK Dedicated to Our Communities Four Pillars of Community Engagement At Columbia Bank, we empower employees to address the unique needs of their communities and offer support in the manner that makes the biggest difference. Annual Employee Volunteer Hours Our employees are enc
Slide 25: Columbia – An Award-Winning Company
Columbia – An Award-Winning Company 25
Slide 26: Executive Leadership Team
Executive Leadership Team Clint Stein Kumi Yamamoto Baruffi Lisa Dow President Executive Vice President Executive Vice President Chief Executive Officer General Counsel Chief Risk Officer Investor Relations 253-305-1921 investorrelations@columbiabank.com Aaron James Deer Eric Eid Chris Merrywell Exe
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures Operating Efficiency Ratio Tangible Common Equity $ in Thousands 2Q19 3Q19 4Q19 1Q20 2Q20 $ in Thousands 2Q19 3Q19 4Q19 1Q20 2Q20 Total Shareholders' Noninterest expense (numerator A) $ 86,728 $ 87,076 $ 86,978 $ 84,271 $ 80,833 $ 2,133,638 $ 2,161,577 $ 2,159,962 $ 2,213
Slide 28: Non-GAAP Financial Measures
Non-GAAP Financial Measures NIE/Average Assets $ in Thousands 2016 2017 2018 2019 2020 2Q19 3Q19 4Q19 1Q20 2Q20 Reported Noninterest Expense $ 261,142 $ 291,017 $ 340,490 $ 345,482 $ 165,104 $ 86,728 $ 87,076 $ 86,978 $ 84,271 $ 80,833 - FDIC Clawback (Expense)/ (280) 54 — — — — — — — — Recap(3) - A
Slide 29: Non-GAAP Financial Measures
Non-GAAP Financial Measures Allowance Coverage Ratio $ in Thousands 1Q19 1Q20 2Q20 Allowance for credit losses ("ACL") (numerator) $ 80,517 $ 122,074 $ 151,546 Total loans (denominator A) 8,646,990 8,933,321 9,771,898 Less: PPP loans (0% Allowance) — — 941,373 Total loans, net of PPP loans (denomina
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