Columbia Banking System, Inc. · NASDAQ:COLB
Columbia Banking System — Q3 2020 Earnings Presentation
33 slides from Columbia Banking System's earnings presentation, Oct 29, 2020
Slide 1: 3Q 2020
NASDAQ - COLB 3Q 2020 Sawtooth Mountain Range, Idaho 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 o
Slide 2: Overview of Columbia Bank: 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 $16.2 Billion in Total Assets $9.7 Billion in Total Loans $13.6 Billion in Total Deposits 147 Branches 45 Branch Consolidations 6 Acquisitions 3 Branch Sales Over past 10 years 14.2% Total Risk-Based Capital 10.00% CB 8.9% Leverage Ratio 5.00% CB 3 Represents
Slide 4: Continually Enhancing Value
Continually Enhancing Value Annual Special Dividends Per Share: $0.00 $0.05 $0.64 $0.00 $0.40 $0.64 $0.76 $0.00 $0.14 $0.28 $0.22 January 2020 April 2013 November 2017 Completed Two FDIC Assisted Acquisitions: Acquired: Acquired: Columbia River Bank $913MM Assets West Coast Bancorp $2.6B Assets Paci
Slide 5: 3Q 2020 Recap
(1) Pre-tax, Pre-provision Income OVERVIEW OF COLUMBIA BANK Q1 Q2 Q3 Q4 Totals may not foot due to rounding 3Q 2020 Recap 2020 $59 $78 $62 $200 2019 $58 $64 $63 $60 $245 Third quarter net income of $44.7 million; diluted earnings per share of $0.63 2018 $53 $56 $61 $57 $227 (1) Pre-tax, pre-provisio
Slide 6: Summary Income Statement
Summary Income Statement $ in Thousands 3Q20 2Q20 1Q20 4Q19 3Q19 YTD 2020 YTD 2019 (except EPS) Net Interest Income $124,726 $121,851 $122,422 $124,817 $122,450 $368,999 $368,588 Provision for Credit Losses 7,400 33,500 41,500 1,614 299 82,400 1,879 Net Interest Income 117,326 88,351 80,922 123,203
Slide 7: Selected Balance Sheet & Ratios
Selected Balance Sheet & Ratios $ in Millions Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Total Assets $16,233 $15,921 $14,039 $14,080 $13,758 Securities, Including Equity Securities & FHLB Stock 4,305 3,723 3,591 3,794 3,397 Loans, Net of unearned Income 9,689 9,772 8,933 8,743
Slide 8: Diversified, Relationship-Centered Deposit Base
Diversified, Relationship-Centered Deposit Base Solid deposit base that is well diversified across business and consumer. $10.9 billion $13.6 billion 61% Business & 39% Consumer 62% Business & 38% Consumer 9.8% 9.7% 21.1% 19.9% 50.7% 49.0% 8.2% 8.2% 4.7% 5.8% 1.5% 2.1% 0.8% 1.0% 4.5% 3.0% As of Sep
Slide 9: Reported Net Interest Margin
Reported Net Interest Margin 4.33% 4.24% 4.18% 4.14% 4.11% 4.12% 4.00% 3.69% 3.64% 3.47% $501.8 $486.7 $124.6 $126.9 $124.3 $126.6 $123.7 $380.1 $374.6 $344.4 2016 2017 2018 2019 2020 YTD 3Q19 4Q19 1Q20 2Q20 3Q20 Reported Net Interest Income (tax equivalent) Reported Net Interest Reported Net Intere
Slide 10: Interest Rate Sensitivity
Interest Rate Sensitivity Duration in Years All Variable or Floating Rate Loans (in millions) 100-200 Balances No Floor At Floor 0-100 bps bps >200 bps Total 4.6 4.7 4.5 4.4 PRIME $306 $520 $71 $7 $8 $912 3.5 1 MO 1,396 529 18 — 1 1,944 3.1 3.3 3.0 2.8 3 MO 110 16 — — — 125 2.5 2.2 2.1 1 YR 2 23 65
Slide 11: Noninterest Income & Noninterest Expense
Noninterest Income & Noninterest Expense Noninterest Income Noninterest Expense 58.7% 58.1% 57.2% 54.9% 56.3% $37,259 $87,076 $86,978 $85,115 $84,271 $80,833 23,972 23,660 20,232 21,248 $28,030 16,425 25,978 8,645 9,010 9,197 8,734 7,928 $21,807 $22,472 $21,207 2,082 8,812 2,559 2,246 2,893 3,855 3,
Slide 12: Strong Earnings Performance
Strong Earnings Performance Total Operating Revenue(1) and Operating Net Income and Earnings Per Share Efficiency Ratio(1) $0.70 $0.64 $0.63 $147,665 $148,630 $0.52 $146,392 $146,118 $144,903 $50,727 $0.20 $46,129 $44,734 $36,582 58.7% 58.1% 57.2% 56.3% 54.9% $14,628 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q
Slide 13: Improved Operating Leverage
Improved Operating Leverage 2.77% 2.67% 2.59% 2.61% 2.59% 2.53% 2.41% 2.13% 2.13% 2.22% $15,965 $15,040 $15,148 $13,751 $13,996 $13,341 $13,460 $12,725 $10,134 $ (Millions) $ (Millions) $9,312 2016 2017 2018 2019 2020 YTD 3Q19 4Q19 1Q20 2Q20 3Q20 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 = $9.7 billion $1,257 LTM growth = 10.7% $962 $383 $427 $331 $279 $295 $270 (1) (2) Commercial 3Q19 4Q19 1Q20 2Q20 3Q20 Business 39.6% Commercial 3rd Quarter Loan Production Real Estate 41.5% $409 $375 $383 $279 $255 A
Slide 15: Well Diversified C&I and Agriculture Loans Portfolios
Well Diversified C&I and Agriculture Loans Portfolios C&I Portfolio Agriculture Portfolio $3.8 billion $850 million Healthcare 5.0% Wholesalers Dairy Cattle Dentists 19.9% 2.8% & Milk Cattle 13.0% Production 1.8% Finance/ Insurance Other 36.2% Fishing 5.8% 9.8% Contractors 9.4% Row Crops 6.0% Manufa
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 200.8% 200.4% 186.4% 183.4% 186.8% 134.5% 139.3% 141.6% 137.1% 133.7% $4,766 $4,737 $4,823 $4,661 $4,670 Office 22.9% Multifamily Education 796 820 700 704 9.1% 3.5
Slide 17: Paycheck Protection Program Loan Originations
Paycheck Protection Program Loan Originations OVERVIEW OF COLUMBIA BANK $ Originations (in Millions) Number of Loans Paycheck Protection Program $962 4,454 During 3Q 2020, Columbia Bank originated an additional $9.4 million through the Paycheck Protection Program bringing the annual total to nearly
Slide 18: Exposure in Stressed Sectors
Exposure in Stressed Sectors(1) Total Outstanding Loans Total Stressed Sector Commitments $9.7 billion $2.4 billion Unused Commitments Aviation $151.9 Airlines, Leasing Restaurants/ (2) $229.3 Restaurants, Drinking Establishments, Specialty Food Services Remaining Portfolio Food Service 74.9% Veteri
Slide 19: Loan Deferral Update
Loan Deferral Update Number of % Loan Deferrals % Loan Deferrals Change ($ in Thousands) Change 6/30/20 Ended (1) Redeferrals New 9/30/20 6/30/20 Ended (1) Redeferrals New 9/30/20 Dental 1,569 (1,562) — 1 8 (99.5)% $ 683,729 $ (681,603) $ — $ 283 $ 2,409 (99.6)% Hotel/Motel 73 (74) 12 6 17 (76.7)% $
Slide 20: Components of 3Q Change in Loans
Components of 3Q Change in Loans 3Q 2020 $279 $7 $9,772 $(84) $9,689 $(219) $(66) Beginning Balance Net Advances/ Prepayments Payoffs New Originations Other Ending Balance Payments inclusive of $9.4 million in PPP loans 3Q 2019 $383 $(2) $8,756 $8,647 $(64) $(146) $(62) Beginning Balance Net Advance
Slide 21: Drivers of Allowance for Credit Losses 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 1.80% 1.72% Economic Factors - macro-economic variables; primarily forecasted deterio
Slide 22: Nonperforming Assets
Nonperforming Assets 0.34% 0.34% 0.29% 0.27% 0.24% $54,479 $48,157 $47,854 $37,646 $33,612 53,732 47,647 47,231 37,021 33,060 Sep 30, 2019 Dec 31, 2019 Mar 31, 2020 Jun 30, 2020 Sep 30, 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: $4.3 billion • Strong credit quality with focus on agencies and high-quality municipal securities; no private-label MBS Municipals 13% • Over half of the MBS portfolio is Agency
Slide 24: Strong Capital, Dividend Payouts & Total Return
Strong Capital, Dividend Payouts & Total Return 14.2% 13.5% 13.6% 13.4% 14.0% Total Return Performance 500 10.5% 10.7% 10.2% 9.8% 9.8% 400 $0.70 $0.64 $0.63 300 Index Value $0.50 $0.52 0.22 200 $0.28 $0.28 $0.28 $0.28 0.28 $0.20 100 0 3Q19 4Q19 1Q20 2Q20 3Q20 16 31 13 10 0 31 17 31 14 31 11 8 31 18
Slide 25: Providing Support During COVID-19
OVERVIEW OF COLUMBIA BANK 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 • Contin
Slide 26: 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. 26 26
Slide 27: 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 28: 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 29: Columbia – An Award-Winning Company
Columbia – An Award-Winning Company 29
Slide 30: 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 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures Operating Efficiency Ratio Tangible Common Equity $ in Thousands 3Q19 4Q19 1Q20 2Q20 3Q20 $ in Thousands 3Q19 4Q19 1Q20 2Q20 3Q20 Total Shareholders' Equity Noninterest expense (numerator A) $ 87,076 $ 86,978 $ 84,271 $ 80,833 $ 85,115 $ 2,161,577 $ 2,159,962 $ 2,213,602
Slide 32: Non-GAAP Financial Measures
Non-GAAP Financial Measures NIE/Average Assets $ in Thousands 2016 2017 2018 2019 2020 3Q19 4Q19 1Q20 2Q20 3Q20 Reported Noninterest Expense (numerator A) $ 261,142 $ 291,017 $ 340,490 $ 345,482 $ 250,219 $ 87,076 $ 86,978 $ 84,271 $ 80,833 $ 85,115 - FDIC Clawback (Expense)/Recap(2) (280) 54 — — —
Slide 33: 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 YTD 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 $2,301,981 -Preferred Equity —
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