Slide 1: Building a Premier Regional Community Bank
COLUMBIA BANK BUILDING A DB PREMIER REGIONAL » COMMUNITY BANK NASDAQ:COLB o © (} Columbia Banking System Inc. WN
Slide 2: Forward Looking Statements
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 comparable words. In addition, all statements ot
Slide 3: Why Columbia Bank?
Why Columbia Bank? • Fortress balance sheet ▪ Very low cost, stable funding base ▪ Relationship centric C&I focused loan portfolio ▪ Diversified loan portfolio with top tier credit quality • Sustained track record of driving long-term shareholder value • Seasoned acquirer with proven integration res
Slide 4: Pacific Northwest Economy is Growing Fast
Pacific Northwest Economy is Growing Fast AAnetwork networkofof147 150 branches branches throughout A network of the throughout the Northwest Northwest 150 branches throughout the Northwest
Slide 5: The Strongest Economic Region in the US
The Strongest Economic Region in the US • Washington’s annual GDP growth rate of 5.7% was the best in the nation in 2018. Idaho was third growing by 4.1% and Oregon was eighth growing by 3.4%. Information services and retail trade were the leading contributors to the increase in Washington and durab
Slide 6: Demographics: Attractive Northwest Markets
Attractive Northwest Markets Seattle- ü Better Than or Equal to Portland- United Tacoma- Boise Washington Oregon Idaho U.S. Average Vancouver States Bellevue Population Increase 15.08%ü 12.64%ü 18.91%ü 12.60%ü 10.24%ü 12.18%ü 6.64% (2010 – 2019) Demographics Projected Population Change 6.85%ü 6.48%ü
Slide 7: Seasoned Acquirer with Proven Integration Track Record
Seasoned Acquirer with Proven Integration Track Record Over the past 10 years, completed 8 acquisitions, 3 branch sales and 47 branch consolidations FDIC Assisted FDIC Assisted Acquired acquisition acquisition West Coast Bancorp Columbia River Bank Summit Bank Apr-2013 Jan-2010 May-2011 $2.6B Assets
Slide 8: Third Quarter 2019 Highlights
Third Quarter 2019 Highlights • Strong quarterly net income of $50.7 million; diluted earnings per share of $0.70 • Strong third quarter loan production of $383 million, second to the third quarter record set in 2018 of $409 million • Nonperforming assets to period end assets ratio decreased to 0.27
Slide 9: Favorable Trend of Earnings
Favorable Trend of Earnings Earnings per Share (Diluted) Net Income 3Q YTD 4 Yr CAGR= 12% ($ Millions) $2.36 $2.04 2019 $46 $52 $51 $149 $148 $0.61 $1.86 $1.81 $1.71 $0.23 $0.70 2018 $40 $42 $46 $45 $173 $0.53 $0.46 $0.63 $0.70 2017 $29 $27 $41 $16 $113 $0.45 $0.47 $0.71 $0.57 $0.47 2016 $21 $25 $27
Slide 10: Total Loans, Net of Unearned Income
Total Loans, Net of Unearned Income Total Loans = $8.8 billion Annualized quarterly growth = 9% Rolling 5 Quarter Loan Production 1-4 Family Residential 3.1% $409 $388 $401 $366 $383 Owner Occupied Com'l RE 22.4% 3Q18 4Q18 1Q19 2Q19 3Q19 Commercial Business 42.2% Income Property Com'l RE 3rd Quarter
Slide 11: Well Diversified C&I and Agriculture Loan Portfolios
Well Diversified C&I and Agriculture Loan Portfolios C&I Portfolio $3.7 billion Construction 6.0% Wholesalers 3.5% Retail 2.2% Agriculture Portfolio Healthcare $590 million 3.8% Public Admin 8.7% Cattle 15.4% Forestry/ Other Logging Agriculture/ 29.6% 8.1% Dentists 18.7% Forest/Fish 15.9% Fishing 11
Slide 12: Balanced CRE Loan Portfolio
Balanced CRE Loan Portfolio CRE Portfolio $4.0 billion Consistent CRE Coverage Balanced with 50% Income Property and 50% Owner-occupied 208.4% 209.6% 198.3% 199.7% 200.8% 130.3% 135.6% 130.1% 131.0% 134.8% Office 21.4% $4,556 $4,552 $4,546 $4,578 $4,661 769 706 628 664 685 Multifamily 9.1% Retail 10
Slide 13: Components of Third Quarter Change in Loans
Components of Third Quarter Change in Loans Third Quarter 2019 $383 $8,756 $8,647 (2) $(64) $(208) Beginning Net Advances/ Prepayments/ New Other Ending Balance Payments Payoffs Originations Balance Third Quarter 2018 $409 $8,514 $8,454 $(47) $(22) $(280) Beginning Net Advances/ Prepayments/ New Oth
Slide 14: Favorable Trend in Nonperforming Assets
Favorable Trend in Nonperforming Assets 0.52% 0.46% 0.45% $67,747 7,415 $60,891 0.31% $58,690 0.27% 6,049 6,075 $40,156 $37,646 60,332 54,842 52,615 39,038 37,021 Sep 30, 2018 Dec 31, 2018 Mar 31, 2019 Jun 30, 2019 Sep 30, 2019 Nonaccrual loans OREO and OPPO Nonperforming assets to period-end assets
Slide 15: ALLL Components
ALLL Components 0.98% 0.99% 0.98% 0.93% 0.94% 5,287 4,915 3,153 2,975 3,372 2,207 2,988 1,789 2,091 1,362 1,457 218 299 0 0 -484 (1,531) (2,575) (2,312) -1,844 (2,708) (5,216) 3Q18 4Q18 1Q19 2Q19 3Q19 Provision Expense Charge-offs Recoveries Net Charge-Offs/Recoveries ALLL/Total Loans 15 $ in Thousa
Slide 16: Diversified, Relationship Centered Deposit Base
Diversified, Relationship Centered Deposit Base Solid deposit base that is well diversified across business & consumer with a migration toward noninterest bearing. $10.6 billion $10.9 billion 59% Business & 41% Consumer 61% Business & 39% Consumer 3.9% 3.0% 5.8% 8.6% 8.2% 22.1% 21.1% 10.5% 9.8% 49.5
Slide 17: Operating Net Interest Margin
Operating Net Interest Margin * 4.35% 4.33% 4.37% 4.36% 4.32% 4.40% 4.28% 4.12% 4.18% 4.14% 4.30% 4.34% 4.34% 4.33% 4.38% 4.28% $500 4.15% 4.15% 4.12% 4.01% $483.4 $400 $120 $125.4 $126.9 $124.1 $123.9 $123.5 $377.5 $374.4 $300 $319.3 $335.3 $80 $200 $40 $100 $0 $0 2015 2016 2017 2018 2019 YTD 3Q18
Slide 18: Interest Rate Sensitivity
Interest Rate Sensitivity Duration in Years Loan Duration in Years by Repricing Period (Balances in $Billions) $1.2 $1.7 $0.1 $0.2 $1.2 $0.0 $0.1 $4.0 $8.7 4.3 4.5 4.3 4.3 4.3 3.4 3.2 3.8 2.9 3.2 3.3 3.0 2.2 2.3 2.1 2.4 2.4 1.8 1.9 2.0 2.1 2.2 2.6 2.5 2.5 2.2 2.0 Investments Loans Earning Assets Fun
Slide 19: Selected Balance Sheet & Ratios
Selected Balance Sheet & Ratios $ in Millions 3Q19 2Q19 1Q19 4Q18 3Q18 Total Assets $13,758 $13,091 $13,064 $13,095 $12,957 Securities, Including Equity Securities & FHLB Stock 3,397 2,894 3,053 3,193 2,943 Loans, Net of unearned Income 8,756 8,647 8,521 8,392 8,514 Allowance for Loan & Leases Losse
Slide 20: Summary Income Statement
Summary Income Statement $ in Thousands (except EPS) 3Q19 2Q19 1Q19 4Q18 3Q18 2019 YTD 2018 YTD Net Interest Income $122,450 $125,116 $121,022 $123,888 $122,796 $368,588 $354,951 Provision for Loan Losses 299 218 1,362 1,789 3,153 1,879 12,980 Net Interest Income 122,151 124,898 119,660 122,099 119,
Slide 21: Noninterest Income
Noninterest Income $28,030 $25,648 7,928 $21,696 5,829 $21,019 $20,402 1,782 3,708 1,888 3,596 3,855 3,282 2,344 2,389 2,975 3,211 2,957 3,425 3,226 3,714 3,576 3,662 3,763 4,006 9,266 9,383 8,980 9,035 9,015 3Q18 4Q18 1Q19 2Q19 3Q19 Deposit Account & Treasury Management Fees Card Revenue Financial
Slide 22: Noninterest Expense and Operating Efficiency Ratio
Noninterest Expense and Operating Efficiency Ratio** 54.83% 58.10% 57.54% 56.34% 58.65% $87,019 $86,728 $87,076 $82,841 $84,700 26,617 26,001 23,972 23,806 24,972 8,645 8,858 8,809 8,712 8,292 51,051 52,085 52,015 54,459 48,496 3Q18 4Q18 1Q19 2Q19 3Q19 Compensation & Employee Benefits* Occupancy, Eq
Slide 23: Stable Expense Management
Stable Expense Management 2.96% 2.77% 2.67% 2.60% 2.65% 2.59% 2.67% 2.55% 2.61% 2.61% $13,460 $13,203 $13,096 $12,958 $13,048 $12,725 $12,805 $ (Millions) $10,134 $9,312 $8,655 2015 2016 2017 2018 2019 YTD 3Q18 4Q18 1Q19 2Q19 3Q19 $ in Millions Average Total Assets Core NIE/Avg Assets* * Core NIE/Av
Slide 24: 2019 Digital Program Summary
2019 Digital Program Summary Vision A future where clients can choose to interact with us in-person or through digital channels while seamlessly changing between them. This includes delivering a modern banking experience through digital channels and digitally-enabled bankers allowing us to attract a
Slide 25: Current & Completed Technology Initiatives
Current & Completed Technology Initiatives 25
Slide 26: New Technology Initiatives
New Technology Initiatives 26
Slide 27: Strong Capital, Dividend Payouts & Total Return
Strong Capital, Dividend Payouts & Total Return 13.7% 14.0% 14.0% 13.8% 10 Year Total Return Performance 600 10.4% 10.8% 10.5% 9.6% 9.9% 0.71 0.70 500 0.63 0.61 0.63 400 0.40 0.42 0.42 Index Value 0.14 0.14 0.14 0.28 0.28 300 0.26 0.28 0.28 200 3Q18 4Q18 1Q19 2Q19 3Q19 100 EPS 0 Dec 31, 2011 Dec 31,
Slide 28: Columbia – An Award-Winning Company
Columbia – An Award-Winning Company 28
Slide 29: Management and Investor Relations Contacts
Hadley Robbins President & Chief Executive Officer Andy McDonald Chief Credit Officer Greg Sigrist Chief Financial Officer Clint Stein Chief Operating Officer Columbia Bank Center 1301 A Street, Suite 900 Chris Merrywell P.O. Box 2156 Chief Consumer Banking Officer Tacoma, WA 98401-2156 Investor Rel
Slide 30: Non-GAAP Financial Measures
Non-GAAP Financial Measures Net Interest Margin 2019 Tangible Common 2015 2016 2017 2018 3Q18 4Q18 1Q19 2Q19 3Q19 Equity 3Q18 4Q18 1Q19 2Q19 3Q19 $ in Thousands YTD $ in Thousands Net interest income (tax $334,548 $344,425 $380,107 $486,667 $374,918 $124,789 $125,917 $123,110 $127,236 $124,572 Total
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures Operating Efficiency Ratio Non-interest Expense net of Acquisition Related Expense 3Q18 4Q18 1Q19 2Q19 3Q19 $ in Thousands $ in Thousands 3Q18 4Q18 1Q19 2Q19 3Q19 Noninterest expense (numerator A) $ 82,841 $ 87,019 $ 84,700 $ 86,728 $ 87,076 Compensation & Employee Benefi