Columbia Banking System, Inc. · NASDAQ:COLB
Columbia Banking System — Q4 2022 Earnings Presentation
37 slides from Columbia Banking System's earnings presentation, January 2023
Slide 1: 4Q 2022 Earnings Presentation
NASDAQ - COLB 4Q 2022 Mountaineer, Mount Shasta, California 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
Slide 2: Lasting Strength
Commercial Purse Seine Fishing Boat, Puget Sound, Washington 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 success Low-cost deposit funding b
Slide 3: By the Numbers
OVERVIEW OF COLUMBIA BANK By the Numbers $20.3 Billion in Total Assets $11.6 Billion in Total Loans $16.7 Billion in Total Deposits 152 Branches 14 Acquisitions Since founded in 1993 14.0% Total Risk-Based Capital (1) 10.00% CB 9.5% Leverage Ratio (1) 5.00% CB 3 Represents Well-Capitalized Regulator
Slide 4: Continually Building Value
Continually Building Value October 2021 Acquired: $26.16 April 2013 November 2017 Bank of Commerce Acquired: Acquired: Holdings $2.0B Assets West Coast Bancorp $2.6B Assets Pacific Continental Corp $2.9B Assets $23.85 $23.83 November 2014 Acquired: Intermountain Community $22.05 Bancorp $964MM Asset
Slide 5: 4Q 2022 Recap
(1) Pre-tax, Pre-provision Income OVERVIEW OF COLUMBIA BANK Q1 Q2 Q3 Q4 Totals may not foot due to rounding 4Q 2022 Recap 2022 $67 $79 $89 $91 $326 Fourth quarter net income of $68.9 million; 2021 $66 $66 $69 $67 $267 diluted earnings per share of $0.88 2020 $61 $82 $64 $71 $278 Pre-tax, pre-provisi
Slide 6: Summary Income Statement
Summary Income Statement $ in thousands 4Q22 3Q22 2Q22 1Q22 4Q21 (except EPS) Net Interest Income $166,693 $162,492 $147,451 $146,200 $145,523 Provision/(Recapture) for Credit Losses 2,400 5,250 2,100 (7,800) 11,100 Net Interest Income after 164,293 157,242 145,351 154,000 134,423 Provision/(Recaptu
Slide 7: Selected Balance Sheet & Ratios
Selected Balance Sheet & Ratios $ in millions Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Total Assets $20,266 $20,405 $20,564 $20,964 $20,945 Securities, Including Debt Securities, Equity Securities 6,685 6,804 7,296 7,754 8,083 & FHLB Stock Loans, Net of unearned Income 11,611
Slide 8: Diversified, Relationship-Centered Deposit Base
Diversified, Relationship-Centered Deposit Base 4Q21 4Q22 $18.0 billion $16.7 billion 60% Business & 40% Consumer 59% Business & 41% Consumer Cost of Deposits = 4 bps Cost of Deposits = 18 bps 11.1% 11.9% 19.6% 17.8% 49.1% 50.1% 9.0% 9.3% 4.3% 4.0% 1.4% 1.3% 0.9% 0.7% 4.6% 4.9% As of Dec 31, 2021 As
Slide 9: Net Interest Margin
Net Interest Margin 4.33% 4.24% 3.64% 3.67% 3.47% 3.34% 3.64% 3.65% 3.17% 3.16% 3.12% 3.47% 3.05% 3.33% 3.09% $631.1 3.09% 3.14% 2.99% $168.4 $164.9 $535.3 $501.8 $507.6 $486.7 $148.3 $149.5 $147.6 2018 2019 2020 2021 2022 4Q21 1Q22 2Q22 3Q22 4Q22 Net Interest Income (tax equivalent) Net Interest Ma
Slide 10: Deposit Rate Sensitivity
Deposit Rate Sensitivity Columbia Bank Deposit Rates vs Federal Funds Relationship-focused deposits well-positioned for rising rates (Fed Effective) • Columbia's deposit rate movements have historically lagged and were 4.50% materially less than changes in market rates 3.75% • Our deposit mix remain
Slide 11: Interest Rate Sensitivity
Interest Rate Sensitivity Loan Repricing Detail (in millions) (1) Sep-22 Dec-22 Sep-22 Dec-22 Operating Net Interest Margin Fixed $6,342 $6,347 54 % 54 % Prime 1,167 1,178 10 % 10 % 3Q22 vs 4Q22 Other Short Term Indexes 2,628 2,613 23 % 23 % Floating Rate Indexes $3,795 $3,791 33 % 33 % 0.29% Variab
Slide 12: Noninterest Income
Noninterest Income $104,500 $99,144 $97,181 16,710 $94,094 $88,256 17,219 20,024 10,687 8,464 9,211 11,866 12,582 22,044 13,465 24,802 $26,627 12,135 $25,006 17,659 $24,240 $24,180 $23,331 12,799 3,690 6,313 15,753 3,123 4,275 2,941 19,719 12,830 3,881 2,655 4,977 3,193 2,853 15,198 20,186 18,503 4,
Slide 13: Strong Earnings Performance
Strong Earnings Performance $0.19 $0.16 $0.09 $0.05 $3.20 $0.03 $2.68 $2.78 $0.07 $0.04 $2.36 $2.17 $0.12 $0.88 $0.83 $0.74 $0.75 $0.55 $15,090 $250,178 $11,466 $202,820 $194,451 $6,842 $3,868 $172,882 $2,565 $68,906 $5,575 $3,082 $64,942 $152,244 $58,808 $57,522 $9,332 $42,911 (1) 2018 2019 2020 $0
Slide 14: Total Loans
Total Loans Rolling 5 Quarters Loan Production Total Loans, Net of Unearned Income $11.6 billion Annual Growth = 11% (excluding PPP Loans (1)) $734 $640 $598 $464 $402 Commercial Business 4Q21 1Q22 2Q22 3Q22 4Q22 Commercial 32.3% Real Estate 4th Quarter Loan Production 46.1% $640 Agriculture $468 7.
Slide 15: Loan Growth Momentum
Loan Growth Momentum 4Q22 $29 $11,692 $(22) $(33) $(54) $— $11,611 Sep 30, 2022 Commercial Real Commercial Business Agriculture Construction Consumer Loans Dec 31, 2022 Estate 2022 $156 $60 $327 $53 $11,611 $372 $10,642 Dec 31, 2021 Commercial Real Commercial Business Agriculture Construction Consum
Slide 16: Well Diversified C&I and Agriculture Loan Portfolios
Well Diversified C&I and Agriculture Loan Portfolios C&I Portfolio Agriculture Portfolio $3.8 billion $849 million Dairy Cattle Healthcare 3.6% & Milk Wholesalers Production 5.1% 3.2% Dentists 21.1% Cattle 12.5% Fishing 3.0% Finance/ Contractors Insurance 7.1% Other 35.7% 10.0% Row Crops 8.5% Retail
Slide 17: Improved Operating Leverage
Improved Operating Leverage 2.61% 2.59% 2.17% 1.87% 1.85% 1.87% 1.90% 1.89% 1.74% 1.76% $20,672 $20,858 $20,956 $20,770 $20,698 $20,271 $18,448 $15,401 $13,341 $12,725 2018 2019 2020 2021 2022 4Q21 1Q22 2Q22 3Q22 4Q22 Average Total Assets Core NIE/Avg Assets (1) $ in millions 17 (1) Non-GAAP financi
Slide 18: Balanced CRE Loan Portfolio
Balanced CRE Loan Portfolio CRE Portfolio $5.4 billion Consistent CRE Coverage Balanced with 54% Income Property and 46% Owner-occupied 212.4% 215.7% 210.9% 200.6% 195.6% 128.3% 127.0% 127.6% 128.5% 125.5% $6,850 $6,881 Office 24.3% $6,584 $6,127 $6,217 Multifamily 10.2% Education 1,475 1,528 1,333
Slide 19: Components of Annual Change in Loans
Components of Annual Change in Loans 2022 $2,199 $28 $(739) $(205) $(164) $(150) $11,611 $10,642 Beginning Balance New Originations Net Advances/ Prepayments Payoffs PPP Payoffs Other Ending Balance Payments 2021 $1,085 $2,558 $(462) $(976) $235 $(198) $(1,028) $10,642 $9,428 Beginning New Acquired
Slide 20: Allowance for Credit Losses (ACL)
Allowance for Credit Losses (ACL) 1.49% 1.38% 1.37% 1.33% 1.33% 1.46% 1.37% 1.36% 1.32% 1.32% $158,438 $155,578 $154,871 $149,935 $146,949 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 (1) Allowance for Credit Losses % Allowance for Credit Losses % Allowance for Credit Losses excl
Slide 21: Nonperforming Assets
Nonperforming Assets 0.46% 0.24% 0.21% $60,891 0.11% 0.11% 0.09% 0.08% 0.07% 0.07% 0.07% 6,049 $35,359 $33,612 54,842 $23,422 $23,422 $17,822 $17,031 33,060 34,806 $13,441 $13,485 $13,441 23,041 23,041 17,441 16,998 13,441 13,485 13,441 Dec 31, 2018 Dec 31, 2019 Dec 31, 2020 Dec 31, 2021 Dec 31, 202
Slide 22: High Quality Securities Portfolio
Highly Quality Securities Portfolio (1) Investment Portfolio Mix (1) Portfolio is conservatively positioned: $6.3 billion • Strong credit quality with focus on agencies and high-quality municipal securities Municipals 13.2% • About half of the MBS portfolio is Agency Commercial Mortgage Backed Secur
Slide 23: Strong Capital, Dividend Payouts & Total Return
Strong Capital, Dividend Payouts & Total Return 14.21% 14.00% 13.98% Total Return Performance 13.69% 13.59% 600 500 8.62% 7.49% 7.05% 7.03% 400 6.47% Index Value $0.88 $0.83 $0.74 $0.75 300 $0.55 200 $0.30 $0.30 $0.30 $0.30 $0.30 100 0 4Q21 1Q22 2Q22 3Q22 4Q22 D 1, 2 1 D 1, 2 6 31 21 D 1, 0 D 1, 5 D
Slide 24: Diversity, Equity and Inclusion
Diversity, Equity and Inclusion Columbia's Diversity, Equity and Inclusivity program continues to make a positive impact on clients and the broader Northwest Community. Over More than $350,000 $360,000 $100,000 Awarded through the Bank's Provided to BIPOC and Scholarship Fund for NW Equity and Inclu
Slide 25: Dedicated to Our Communities
Airplane flying near Mount Hood, Oregon Dedicated to Our 2022 FUNDRAISING Communities $277,817 Warm Hearts Winter Drive At Columbia Bank, we empower $15,909 employees to address the unique needs American Cancer Society of their communities and offer support $21,016 American Heart Association in the
Slide 26: Columbia – An Award-Winning Company
Columbia – An Award-Winning Company 26
Slide 27: Responsibility: ESG Encompasses Columbia's Do RIGHT Values
NEW SLIDE - NEEDS APPROVAL Responsibility ESG Encompasses Columbia's Do RIGHT Values When we Do RIGHT by our people and our clients, shareholders invest and communities prosper. E nvironment S ocial G overnance Investing in Board Climate Valuing our Charitable Stewardship Investment our Independence
Slide 28: Executive Leadership Team
Executive Leadership Team Wind Turbines, Columbia River Gorge, Oregon Clint Stein Kumi Yamamoto Baruffi Aaron James Deer President Executive Vice President Executive Vice President Chief Executive Officer General Counsel Chief Financial Officer Investor Relations 253-471-4065 investorrelations@colum
Slide 29: Strategic Updates
Strategic Updates 29 Big Rig Industrial Semi Truck near Shasta Lake, California
Slide 30: Columbia and Umpqua Expect to Combine and Complete Core System Conversion in 1Q 2023
Columbia and Umpqua Expect to Combine and Complete the Scheduled Core System Conversion in 1Q 2023 • Columbia and Umpqua expect the closing of our merger to take place after the close of business on February 28, 2023 (1). • Last spring, we bifurcated our integration planning activities to be separat
Slide 31: Current Priorities: Integration and Growth
Current Priorities: Integration and Growth • The top priorities at Columbia and Umpqua are to prepare and execute the seamless integration of our two banks following the closing without disrupting our externally focused associates' ability to serve our customers and our communities and to generate n
Slide 32: Appendix
Appendix Snow Covered Farm, Coeur d'Alene, Idaho 32
Slide 33: Non-GAAP Financial Measures
Non-GAAP Financial Measures Tangible Book Value per Common Share $ in thousands 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 12/31/16 12/31/17 12/21/18 12/31/19 12/31/20 12/31/21 12/31/22 Total Shareholders' Equity $759,338 $764,008 $1,053,249 $1,228,175 $1,242,128 $1,251,012 $1,949,922 $2,033,649 $
Slide 34: Non-GAAP Financial Measures
Non-GAAP Financial Measures NIE/Average Assets $ in thousands 2018 2019 2020 2021 2022 4Q21 1Q22 2Q22 3Q22 4Q22 Reported Noninterest Expense (numerator A) $ 340,490 $ 345,482 $ 334,519 $ 360,304 $ 402,383 $ 102,622 $ 105,053 $ 95,379 $ 101,446 $ 100,505 -Merger Related Costs (8,661) — — (14,514) (19
Slide 35: Non-GAAP Financial Measures
Non-GAAP Financial Measures Net Interest Margin $ in Thousands 2018 2019 2020 2021 2022 4Q21 1Q22 2Q22 3Q22 4Q22 Net Interest Income (tax equivalent) (numerator A) $ 486,667 $ 501,770 $ 507,574 $ 535,311 $ 631,058 $ 147,574 $ 148,268 $ 149,542 $ 164,859 $ 168,389 Adjustments to arrive at operating n
Slide 36: Non-GAAP Financial Measures
Non-GAAP Financial Measures Tangible Common Equity ROATCE $ in thousands 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 $ in thousands 4Q21 1Q22 2Q22 3Q22 4Q22 Net Inc Applicable to Common Total Shareholders' Equity (numerator A) $2,588,742 $2,360,779 $2,243,218 $2,115,481 $2,213,153 Shareholders (numera
Slide 37: Non-GAAP Financial Measures
Non-GAAP Financial Measures Operating Efficiency Ratio $ in thousand 4Q21 1Q22 2Q22 3Q22 4Q22 Noninterest expense (numerator A) $ 102,622 $ 105,053 $ 95,379 $ 101,446 $ 100,505 Adjustments to arrive at operating noninterest expense: Merger related expenses (11,812) (7,057) (3,901) (3,246) (4,897) Ne
Columbia Banking System — Q4 2022 Earnings Presentation on 6ix