Columbia Banking System, Inc. · NASDAQ:COLB
Columbia Banking System — Investor Presentation (March 2024)
36 slides from Columbia Banking System's investor presentation, Mar 4, 2024
Slide 1: March 2024 Investor Presentation
March 2024 Investor Presentation
Slide 2: Disclaimer
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 to
Slide 3: Columbia Banking System: A Franchise Like No Other
Columbia Banking System: A Franchise Like No Other 3 West-Focused Regional Powerhouse Business Bank of Choice ■ In-market, relationship-based commercial banking ■ Attractive footprint in high-growth markets ■ Full suite of deposit products and services with contemporary digital capabilities ■ Expert
Slide 4: Why Columbia?
Why Columbia? 4 ■ Community banking at scale business model drives granular, low-cost core deposit base ■ Opportunity to gain share in California and growing metros in the West while increasing density in the Northwest ■ Solid capital generation supports long-term organic growth and return to shareh
Slide 5: Operating in Large, Attractive Western Markets
Operating in Large, Attractive Western Markets 5 Foothold in the West(1) Northwest (population in millions) Seattle, WA Portland, OR California and Nevada Los Angeles, CA Sacramento, CA Other West Phoenix, AZ Denver, CO 4.1mm 2.5mm 12.9mm 2.4mm 5.1mm 3.0mm Top Regional Bank in the NW (WA, OR, ID)(1)
Slide 6: Opportunity to Increase Density and Gain Share throughout Our Footprint
Opportunity to Increase Density and Gain Share throughout Our Footprint 6 Expand Footprint in California Broaden Presence in Other Western MarketsImprove Density in the Northwest Population Deposits ($mm) COLB MSA(1) (000s) Market COLB Mkt Shr Seattle 4,107 $143,835 $7,561 5.2 % Portland 2,537 67,10
Slide 7: Performance Improvement: Near-Term Initiatives
Performance Improvement: Near-Term Initiatives 7 1H 2024 Actions to Improve Operational Efficiency ■ Ongoing operational review to improve efficiency throughout the organization is expected to result in a Q4 2024 core expense run rate of $965 million to $985 million annualized(1) ■ Closed five branc
Slide 8: Performance Improvement: Longer-Term
Performance Improvement: Longer-Term 8 ■ Our relationship-based lending verticals and a strong core deposit base remain the cornerstone of our franchise. ■ Past transactional lending and the wholesale sources that fund these assets have muted the balance sheet’s profitability, but they have not dilu
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 10: Full Year 2023 Highlights
Full Year 2023 Highlights (1) All items in this “Operating” column are non-GAAP financial measures. A reconciliation to the comparable GAAP measurement for each is provided in the appendix of this slide presentation. (2) Periods prior to February 28, 2023, have been restated as a result of the adjus
Slide 11: Fourth Quarter 2023 Highlights
Fourth Quarter 2023 Highlights (1) All items in this “Operating” column are non-GAAP financial measures. A reconciliation to the comparable GAAP measurement for each is provided in the appendix of this slide presentation. 11 ■ Continued to advance initiatives to grow sustainable, core fee income ■ S
Slide 12: Selected Period-End Balance Sheet
Selected Period-End Balance Sheet Note: Tables may not foot due to rounding. Q1 2023 results were impacted by the closing of the merger on February 28, 2023 and the addition of historical Columbia balances at fair value. (1) Periods prior to February 28, 2023, have been restated as a result of the a
Slide 13: Our Diversified Commercial Bank Business Model Supports Our Deposit Base
Our Diversified Commercial Bank Business Model with a Strong Retail Network Supports our Granular, High-Quality Deposit Base (1) Includes small business deposits. (2) Excludes public and brokered deposit balances. This is a non-GAAP financial measure. (3) Includes Reich & Tang Demand Deposit Marketp
Slide 14: Liquidity Overview
Liquidity Overview Total Available Liquidity at December 31, 2023 ($ in millions) Total off-balance sheet liquidity (available lines of credit): $11,692 Cash and equivalents, less reserve requirement 1,910 Excess bond collateral 5,125 Total available liquidity $18,727 TOTAL AVAILABLE LIQUIDITY AS A
Slide 15: Available-for-Sale Securities Portfolio
Available-for-Sale Securities Portfolio at December 31, 2023 ($ in millions) Current Par Amortized Cost Unrealized Gains Unrealized Losses Fair Value % of Total AFS Portfolio Effective Duration Book Yield U.S. Treasuries $390 $378 $1 ($5) $374 4 % 2.4 3.55 % U.S. Agencies 1,156 1,173 5 (74) 1,104 13
Slide 16: Loan Roll Forward Activity
Loan Roll Forward Activity $ in m ill io ns Three Months Ended December 31, 2023 $37,171 $— $1,076 ($119) ($447) ($281) $42 $37,442 Beginning Balance (9/30/23) Merger New Originations Net Advances/ Payments Prepayments Payoffs or Sales Other¹ Ending Balance (12/31/23) 16 (1) Other includes purchase
Slide 17: Diversified, High Quality Loan and Lease Portfolio
Diversified, High Quality Loan and Lease Portfolio Note: Portfolio statistics and delinquencies as of December 31, 2023. Annualized net charge-off rates for Q4 2023. Loan-to-value (“LTV”), FICO, and debt service coverage (“DSC”) ratios are based on weighted averages for portfolios where data are ava
Slide 18: C&I and CRE Portfolio Composition
C&I and CRE Portfolio Composition Agriculture, 8.3% Contractors, 7.4% Finance/Insurance, 7.6% Manufacturing, 7.4% Professional, 4.6% Public Admin, 6.5% Rental & Leasing, 7.0% Retail, 2.3%Support Services, 4.2% Transportation/ Warehousing, 8.4% Wholesale, 6.8% Gaming, 5.0% Dentists, 7.1% Other Health
Slide 19: Office Portfolio Details
Office Portfolio Details Puget Sound, 22% WA Other, 6% Portland Metro, 12% OR Other, 15%Bay Area, 5% N. CA, 11% S. CA, 20% Other, 9% Office Portfolio Metrics at December 31, 2023 Average loan size $1.3 million Average LTV 56% DSC (non-owner occupied) 1.72x % with guaranty (by $ / by #) 85% / 83% Pas
Slide 20: Capital Management
Capital Management 20 Regulatory Capital Ratios: Bank and Holding Company 8.3% 10.5% 10.5% 7.6% 9.6% 9.6% 11.9% Umpqua Bank Columbia Banking System Tier 1 Leverage CET1 Tier 1 Risk-Based Total Risk-Based —% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% ■ Regulatory capital ratios declined during Q1 2023 as a resu
Slide 21: Continued Strong Credit Quality
Continued Strong Credit Quality Pr ov is io n Ex pe ns e ($ in m ill io ns ) Provision Expense, Net Charge-Offs to Average Loans, and Non-Performing Assets to Total Assets¹ $32.9 $17.1 $16.0 $36.7 $54.9 $88.4 0.19% 0.23% 0.30% 0.25% 0.31% 0.18% 0.14% 0.15% 0.20% 0.22% Provision Expense Initial Provi
Slide 22: Robust ACL Coverage
Robust ACL Coverage (1) Total includes reserve for unfunded commitments of $23.2 million and $21.5 million as of December 31, 2023 and September 30, 2023, respectively. 22 ■ Our reserve coverage by loan segment and for the overall loan and lease portfolio reflects our robust underwriting criteria an
Slide 23: Summary Income Statement
Summary Income Statement Note: Tables may not foot due to rounding. (1) Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the merger of 0.5958. (2) Non-GAAP financial measure. A reconciliation to the com
Slide 24: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin (1) Chart Abbreviations: “PAA” = purchase accounting accretion and amortization; “LHFI” = loans held for investment. $ in m ill io ns Net Interest Income and Net Interest Margin $305 $375 $484 $481 $454 4.01% 4.08% 3.93% 3.91% 3.78% Net Interest Income Net
Slide 25: Loan Maturities at December 31, 2023
Loan Maturities at December 31, 2023 <=6 7 to 12 13 to 24 25 to 36 37 to 60 61+ % of ($ in millions) Months(1) Months Months Months Months Months Total Total(2) Fixed $1,849 $224 $645 $887 $2,294 $9,658 $15,557 41 % Floating 1,620 1,140 1,279 777 1,611 4,814 11,243 30 % Adjustable 62 60 234 264 697
Slide 26: Non-Interest Income
Non-Interest Income Note: Tables may not foot due to rounding. (1) Commercial product revenue includes swaps, syndication, and international banking revenue, which are captured in “other income” on the income statement. Other income statement line items, like card-based fees, include other sources o
Slide 27: Non-Interest Expense
Non-Interest Expense 27 $ in m ill io ns Non-Interest Expense ("NIE") $342.8 $328.6 $304.1 $337.2 $225.6 $296.8 $281.2 $294.3 GAAP Non-Interest Expense Operating Non-Interest Expense¹ Q1 2023 Q2 2023 Q3 2023 Q4 2023 ■ We realized $143 million in annualized cost synergies through December 31, 2023, e
Slide 28: Outlook
Outlook (1) Twelve months ended December 31, 2023 impacted by the February 28, 2023 merger close. (2) The cumulative fair value discount on historical Columbia loans was established as of February 28, 2023, and the allocation between the credit-related discount and the rate-related discount was esta
Slide 29: Appendix: Non-GAAP Reconciliation
APPENDIX Non-GAAP Reconciliation
Slide 30: Purchase Accounting Details
Purchase Accounting Details (1) Table does not capture all assets and liabilities with an associated fair value discount or premium. Assets and liabilities not presented have a significantly smaller impact on income through the accretion or amortization of their discount or premium. (2) The cumulati
Slide 31: Non-GAAP Reconciliation: Tangible Capital
Non-GAAP Reconciliation: Tangible Capital ($ in thousands, except per-share data) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Total shareholders' equity a $4,995,034 $4,632,162 $4,828,188 $4,884,723 $2,479,826 Less: Goodwill 1,029,234 1,029,234 1,029,234 1,030,142 — Less: Other intangible assets, net 60
Slide 32: Non-GAAP Reconciliation: Quarterly
Non-GAAP Reconciliation: Quarterly For the Quarter Ended ($ in thousands) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Net interest income c $ 453,623 $ 480,875 $ 483,975 $ 374,698 $ 305,479 Non-interest income (GAAP) d $ 65,533 $ 43,981 $ 39,678 $ 54,735 $ 34,879 Less: Non-interest income adjustments a
Slide 33: Non-GAAP Reconciliation: Quarterly (cont.)
Non-GAAP Reconciliation: Quarterly (cont.) For the Quarter Ended ($ in thousands, except per-share data) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Select Per-Share & Performance Metrics Earnings per share - basic(1) j/r $ 0.45 $ 0.65 $ 0.64 $ (0.09) $ 0.64 Earnings per share - diluted(1) j/s $ 0.45 $
Slide 34: Non-GAAP Reconciliation: Annual
Non-GAAP Reconciliation: Annual For the Year Ended ($ in thousands) Dec 31, 2023 Dec 31, 2022 Net interest income c $ 1,793,171 $ 1,070,016 Non-interest income (GAAP) d $ 203,927 $ 199,528 Less: Non-interest income adjustments a 10,469 6,251 Operating non-interest income (non-GAAP) e $ 214,396 $ 205
Slide 35: Non-GAAP Reconciliation: Annual (cont.)
Non-GAAP Reconciliation: Annual (cont.) For the Year Ended ($ in thousands, except per-share data) Dec 31, 2023 Dec 31, 2022 Select Per-Share & Performance Metrics Earnings per share - basic(1) j/r $ 1.79 $ 2.60 Earnings per share - diluted(1) j/s $ 1.78 $ 2.60 Efficiency ratio(2) h/f 65.59 % 57.83
Slide 36: Non-GAAP Reconciliation: Net Interest Income & Net Interest Margin and Operating Non-Interest Expense
Non-GAAP Reconciliation: Net Interest Income & Net Interest Margin and Operating Non-Interest Expense, Excluding CDI Amortization (1) The cumulative fair value discount on historical Columbia loans was established as of February 28, 2023, and the allocation between the credit-related discount and th
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