Columbia Banking System, Inc. · NASDAQ:COLB
Columbia Banking System — Q1 2024 Earnings Presentation
34 slides from Columbia Banking System's earnings presentation, Apr 25, 2024
Slide 1: 1st Quarter 2024 Earnings Presentation
st 1 Quarter 2024 Earnings Presentation April 25, 2024
Slide 2: Disclaimer
2 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
Slide 3: Columbia Banking System: A Franchise Like No Other
3 Columbia Banking System: A Franchise Like No Other Columbia at a Glance West-Focused Regional Powerhouse Business Bank of Choice Ticker COLB ■ In-market, relationship-based commercial banking Corporate Headquarters Tacoma, Washington ■ Attractive footprint in high-growth markets Offices ~300 in ei
Slide 4: Why Columbia?
4 Why Columbia? ■ 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
5 Operating in Large, Attractive Western Markets Foothold in the West(1) Top Regional Bank in the NW (WA, OR, ID)(1) Established Presence in Attractive Markets(1) (population in millions) Total Northwest Northwest Rank Bank (HQ State) Assets ($B) Deposits ($B) Mkt Shr ■ Our market share in the North
Slide 6: Opportunity to Increase Density and Gain Share throughout Our Footprint
6 Opportunity to Increase Density and Gain Share throughout Our Footprint Improve Density in the Northwest Expand Footprint in California Broaden Presence in Other Western Markets Population Deposits ($mm) COLB Population Deposits ($mm) COLB Population Deposits ($mm) COLB (1) (1) (1) MSA (000s) Mark
Slide 7: Performance Improvement: Near-Term Initiatives
7 Performance Improvement: Near-Term Initiatives 1H 2024 Actions to Improve Operational Efficiency ■ Initiatives to improve operating efficiency throughout the organization are expected to result in a Q4 2024 core expense run rate of $965 million to $985 million annualized, which excludes CDI amorti
Slide 8: Performance Improvement: Longer-Term
8 Performance Improvement: Longer-Term Opportunity to Strategically Reposition Balance Sheet Over Time ■ Our relationship-based lending verticals and a strong core deposit base remain the cornerstone of our franchise. ■ Past transactional lending and the wholesale $37B Relationship $45B sources that
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 10: First Quarter 2024 Highlights
10 First Quarter 2024 Highlights Reported Operating(1) ■ Total risk-based capital ratio of 12.0%(2) as of March 31, 2024 $124 million $135 million reached our long-term internal target after increasing over 100 basis Net Income Net Income points since the merger closed in Q1 2023. $186 million $201
Slide 11: Diversified Commercial Bank Business Model Supports Granular Deposit Base
11 Our Diversified Commercial Bank Business Model with a Strong Retail Network Supports our Granular, High-Quality Deposit Base Enterprise-wide Deposit Composition Deposits by Category Customer Deposit Composition(1) Commercial - Small Business, 20% Non-interest, 33% Demand, 20% Non-interest, 37% De
Slide 12: Securities Portfolio Overview
12 Securities Portfolio Overview Available-for-Sale Securities Portfolio as of March 31, 2024 Available-for-Sale Securities Portfolio % of Total Percentage at Gain / Loss as of March 31, 2024 Current Amortized Unrealized Unrealized AFS Effective ($ in millions) Par Cost Gains Losses Fair Value Portf
Slide 13: Loan Roll Forward Activity
13 Loan Roll Forward Activity Three Months Ended March 31, 2024 $37,442 $— $772 $20 $37,642 ($74) ($342) ($176) $ in millions Beginning Balance Merger New Originations Net Advances/ Prepayments Payoffs or Sales Other¹ Ending Balance (12/31/2023) Payments (3/31/2024) Three Months Ended March 31, 2023
Slide 14: Diversified, High Quality Loan and Lease Portfolio
14 Diversified, High Quality Loan and Lease Portfolio Mortgage Portfolio Composition at March 31, 2024 Owner Occupied CRE • Portfolio average loan size of $1.0 million • Portfolio average loan size of $481,000 Multifamily, 15% • 1Q24 average loan size of $1.8 million • 1Q24 average loan size of $540
Slide 15: C&I and CRE Portfolio Composition
15 C&I and CRE Portfolio Composition C&I Portfolio Composition(1) CRE Portfolio Composition(1) $9.7 Billion at March 31, 2024 $17.6 Billion at March 31, 2024 Agriculture, 8.5% Special Purpose, 7.5% Hotel/Motel, 4.2% Other, 12.6% Other Healthcare, 3.4% Contractors, 7.4% Retail, 11.5% Other, 11.2% Den
Slide 16: Office Portfolio Details
16 Office Portfolio Details Office Portfolio Metrics at March 31, 2024 Number of Loans by Balance ■ Loans secured by office properties Average loan size $1.35 million represented 8% of our total loan portfolio 1,746 1,719 1,666 at March 31, 2024. Average LTV 56% DSC (non-owner occupied) 1.70x ■ Our
Slide 17: Continued Strong Credit Quality
17 Continued Strong Credit Quality 1.46% 1.40% Allowance for Credit Losses 1.41% 1.45% 1.36% 1.18% 1.15% 1.18% 1.24% 1.16% ■ The remaining credit discount on loans of ACL / Total Loans and ACL ($ in millions) $107 $94 $86 $80 $74 $74 million as of March 31, 2024 provides an additional 20 basis point
Slide 18: Robust ACL Coverage
18 Robust ACL Coverage Allowance for Credit Losses (“ACL”) by Loan Segment Total ACL Remaining including Lease & Commercial Residential & Credit Discount Credit Discount ($ in thousands) Commercial Equipment Real Estate Home Equity Consumer Total(1) on Loans on Loans(1) Balance as of December 31, 20
Slide 19: Capital Management
19 Capital Management Regulatory Capital Ratios: Bank and Holding Company as of March 31, 2024 Capital Ratios Continue to Trend Up Post Merger Closing 11.7% 12.0% 11.6% 11.9% 12.0% 12.0% 12.0% 10.9% 11.3% 10.6% 10.6% 9.8% 9.8% 9.5% 9.6% 9.8% 10.0% 10.0% 8.9% 9.2% 8.4% 7.7% 8.0% 8.0% 6.0% 6.0% 4.0% 4
Slide 20: Net Interest Income and Net Interest Margin
20 Net Interest Income and Net Interest Margin Net Interest Income and Net Interest Margin Net Interest Margin: Q4 2023 vs Q1 2024 $500 $484 $481 5.00% $454 $423 $375 3.78% 0.04% $400 4.50% (0.03)% (0.05)% 0.03% 3.52% $ in millions $300 (0.25)% 4.00% 4.08% $200 3.93% 3.91% 3.78% 3.50% $100 3.52% $—
Slide 21: Interest Rate Sensitivity
21 Interest Rate Sensitivity Loan Maturities at March 31, 2024 Floors: Floating and Adjustable Rate Loans at March 31, 2024 <=6 7 to 12 13 to 24 25 to 36 37 to 60 61+ % of ($ in millions) No Floor(3) At Floor(3) Above Floor(3) Total ($ in millions) Months(1) Months Months Months Months Months Total
Slide 22: Non-Interest Income
22 Non-Interest Income For the Quarter Ended Q1 2024 Highlights (compared to Q4 2023) ($ in millions) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 ■ Financial services and trust revenue Service charges on deposits $16.1 $17.3 $17.4 $16.5 $14.3 increased following a temporary decline in Card-based fees 13
Slide 23: Non-Interest Expense
23 Non-Interest Expense Non-Interest Expense ("NIE") Non-Interest Expense: Q4 2023 vs Q1 2024 $337.2 $342.8 $328.6 $337.2 $296.8 $304.1 $294.3 $287.5$276.9 $(3.0) $(2.0) $281.2 $(3.6) $(2.1) $(1.1) $(5.6) $287.5 $ in millions $225.6 $ in millions $(32.3) Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q4 Co
Slide 24: Appendix
APPENDIX
Slide 25: Summary Income Statements
25 Summary Income Statements For the Quarter Ended Q1 2024 Highlights (compared to Q4 2023) ($ in millions, except per-share data) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Net interest income before provision $423.4 $453.6 $480.9 $484.0 $374.7 ■ Net interest income decreased by $30 million due to hig
Slide 26: Summary Period-End Balance Sheets
26 Summary Period-End Balance Sheets ($ in millions, except per-share data) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q1 2024 Highlights (compared to Q4 2023) ASSETS: ■ Commercial line utilization and Total assets $52,224.0 $52,173.6 $51,993.8 $53,592.1 $53,994.2 construction project activity were the
Slide 27: Liquidity Overview
27 Liquidity Overview Select Balance Sheet Items Total Off-Balance Sheet Liquidity Available at March 31, 2024 Sequential Gross Net Three Months Ended Quarter Change ($ in millions) Availability Utilization Availability ($ in millions) Q1 2024 Q4 2023 Q1 2023 Q1 2024 FHLB lines $11,965 $2,370 $9,596
Slide 28: Purchase Accounting Details
28 Purchase Accounting Details Adjustment at Closing Remaining Balances at Select Purchase Accounting Items(1) February 28, 2023 December 31, 2023 March 31, 2024 Notes ITEMS TO ACCRETE THROUGH INTEREST INCOME: Available for sale securities - rate discount $(1,011) million $(565) million $(543) milli
Slide 29: Non-GAAP Reconciliation: Tangible Capital
29 Non-GAAP Reconciliation: Tangible Capital ($ in thousands, except per-share data) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Total shareholders' equity a $4,957,245 $4,995,034 $4,632,162 $4,828,188 $4,884,723 Less: Goodwill 1,029,234 1,029,234 1,029,234 1,029,234 1,030,142 Less: Other intangible ass
Slide 30: Non-GAAP Reconciliation: Adjustments and Average Balances
30 Non-GAAP Reconciliation: Adjustments and Average Balances For the Quarter Ended ($ in thousands) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Non-Interest Income Adjustments Gain on sale of debt securities, net $ 12 $ 9 $ 4 $ — $ — (Loss) gain on equity securities, net (1,565) 2,636 (2,055) (697) 2,41
Slide 31: Non-GAAP Reconciliation: Income Statements
31 Non-GAAP Reconciliation: Income Statements For the Quarter Ended ($ in thousands) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Net interest income c $ 423,362 $ 453,623 $ 480,875 $ 483,975 $ 374,698 Non-interest income (GAAP) d $ 50,357 $ 65,533 $ 43,981 $ 39,678 $ 54,735 Less: Non-interest income adj
Slide 32: Non-GAAP Reconciliation: Earnings Per-Share and Performance Metrics
32 Non-GAAP Reconciliation: Earnings Per-Share and Performance Metrics For the Quarter Ended ($ in thousands, except per-share data) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Select Per-Share & Performance Metrics Earnings per share - basic j/r $ 0.60 $ 0.45 $ 0.65 $ 0.64 $ (0.09) Earnings per share -
Slide 33: Non-GAAP Reconciliation: Operating Efficiency Ratio, as Adjusted
33 Non-GAAP Reconciliation: Operating Efficiency Ratio, as Adjusted For the Quarter Ended ($ in thousands) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Non-interest expense (GAAP) h $287,516 $337,176 $304,147 $328,559 $342,818 Less: Non-interest expense adjustments b (10,598) (42,888) (22,955) (31,768) (
Slide 34: Non-GAAP Reconciliation: Net Interest Income & Net Interest Margin
34 Non-GAAP Reconciliation: Net Interest Income & Net Interest Margin For the Quarter Ended ($ in thousands) Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Net interest income a $424,344 $454,730 $482,031 $485,168 $375,369 Less: Acquired loan accretion - credit related(1) b 5,119 5,430 6,370 7,100 3,806 Ne
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