Columbia Banking System, Inc. · NASDAQ:COLB
Columbia Banking System — Q4 2021 Earnings Presentation
41 slides from Columbia Banking System's earnings presentation, Jan 20, 2022
Slide 1: 4Q 2021 Earnings Presentation
NASDAQ - COLB 4Q 2021 Tacoma Washington Boise, Idaho Portland, Oregon Sacramento, 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,” “e
Slide 2: Strategic Updates
Strategic Updates 2 Mount Shasta, Southern Cascades, California
Slide 3: Creating a West Coast Franchise Unlike Any Other
Creating a West Coast Franchise Unlike Any Other Combined company deepens its Synergies anticipated to drive growth in loans, foothold in the Northwest and ...creating a West Coast regional powerhouse deposits, and fee-based products and services* California... • Dramatically increases delivery chan
Slide 4: 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 the growth momentum that began in 2H 2020 and that we expect to continue into 2023. • The establishment
Slide 5: Revenue: Scale Expected to Enhances Opportunities
Revenue: Scale Expected to Enhances Opportunities Our combination enables us to: • Lend with a bigger balance sheet ◦ Magnifies the opportunity to grow the loan book as it reduces the need to participate out larger deals, favorably impacting new business and enabling the expansion of existing client
Slide 6: Fourth Quarter 2021 Performance
Fourth Quarter 2021 Performance California State Capital, Sacramento, California 6
Slide 7: Lasting Strength
OVERVIEW OF COLUMBIA BANK Shasta Dam, Shasta Lake, California 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 base Award-winning company
Slide 8: By the Numbers
OVERVIEW OF COLUMBIA BANK By the Numbers $20.9 Billion in Total Assets $10.6 Billion in Total Loans $18.0 Billion in Total Deposits 153 Branches 49 Branch Consolidations 4 Acquisitions 3 Branch Sales Over past 10 years 14.2% Total Risk-Based Capital (1) 10.00% CB 8.6% Leverage Ratio (1) 5.00% CB 8 R
Slide 9: Continually Building Value
Continually Building Value October 2021 Acquired: January 2010 April 2013 November 2017 Bank of Commerce Holdings Completed Two FDIC Assisted Acquisitions: Acquired: Acquired: $2.0B Assets Columbia River Bank $913MM Assets West Coast Bancorp $2.6B Assets Pacific Continental Corp $2.9B Assets America
Slide 10: 4Q 2021 Recap
(1) Pre-tax, Pre-provision Income OVERVIEW OF COLUMBIA BANK Q1 Q2 Q3 Q4 Totals may not foot due to rounding 4Q 2021 Recap 2021 $66 $66 $69 $67 $267 Fourth quarter net income of $42.9 million; 2020 $61 $82 $64 $71 $278 diluted earnings per share of $0.55 2019 $59 $66 $64 $61 $250 Pre-tax, pre-provisi
Slide 11: Summary Income Statement
Summary Income Statement $ in thousands 4Q21 3Q21 2Q21 1Q21 4Q20 (except EPS) Net Interest Income $145,523 $132,540 $125,462 $123,994 $131,112 Provision/(Recapture) for Credit Losses 11,100 — (5,500) (800) (4,700) Net Interest Income after 134,423 132,540 130,962 124,794 135,812 Provision/(Recapture
Slide 12: Selected Balance Sheet & Ratios
Selected Balance Sheet & Ratios $ in millions Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Total Assets $20,945 $18,602 $18,013 $17,335 $16,585 Securities, Including Debt Securities, Equity Securities 8,083 6,931 6,238 5,520 5,234 & FHLB Stock Loans, Net of unearned Income 10,642
Slide 13: Diversified, Relationship-Centered Deposit Base
Diversified, Relationship-Centered Deposit Base 4Q20 4Q21 $13.9 billion $18.0 billion 60% Business & 40% Consumer 60% Business & 40% Consumer Cost of Deposits = 5 bps Cost of Deposits = 4 bps 10.3% 11.1% 20.1% 19.6% 49.8% 49.1% 8.4% 9.0% 4.7% 4.3% 1.5% 1.4% 0.8% 0.9% 4.4% 4.6% As of Dec 31, 2020 As
Slide 14: Net Interest Margin
Net Interest Margin 4.33% 4.24% 4.18% 3.67% 3.47% 3.65% 3.31% 3.52% 3.16% 3.17% 3.17% 3.05% 3.25% 3.15% 3.09% 3.00% 2.99% $535.3 $501.8 $507.6 $486.7 $147.6 $133.0 $134.4 $380.1 $127.4 $125.9 2017 2018 2019 2020 2021 4Q20 1Q21 2Q21 3Q21 4Q21 Net Interest Income (tax equivalent) Net Interest Margin (
Slide 15: Interest Rate Sensitivity
Interest Rate Sensitivity Loan Repricing Detail (in millions) Upward Rate Change to Move from Floor (in millions) (in millions) Sep-21 Dec-21 Sep-21 Dec-21 Loans At <25 26-50 51-75 76-100 101-125 >150 Floor bps bps bps bps bps bps Total Fixed $4,953 $5,654 52 % 53 % Balances (in millions) PPP $345 $
Slide 16: Deposit Rate Sensitivity
Deposit Rate Sensitivity Columbia Bank Deposit Rates vs Federal Funds Relationship-focused deposits well-positioned for rising rates (Fed Effective) 3.00% • Columbia's deposit rate movements have historically lagged and 2.50% were materially less than changes in market rates 2.00% • Deposit growth h
Slide 17: Noninterest Income
Noninterest Income $109,642 $104,500 14,000 $97,181 16,710 $94,094 11,474 $88,256 20,024 10,687 8,464 9,211 4,283 12,399 11,866 22,044 13,465 24,802 11,478 12,135 $23,958 $24,240 $23,562 $23,166 12,799 $22,730 15,753 2,275 2,325 2,742 3,123 2,497 19,719 12,830 25,627 15,198 4,514 5,184 4,977 7,960 7
Slide 18: Strong Earnings Performance
Strong Earnings Performance $0.16 $0.09 $0.23 $2.78 $0.01 $0.02 $2.68 $2.36 $2.17 $1.86 $0.12 $11,466 $0.82 $0.73 $0.77 $0.74 $202,820 $0.55 $194,451 $6,842 $172,882 $152,244 $13,585 $403 $1,731 $112,828 $58,300 $55,039 $53,017 $51,853 $9,332 $42,911 (1) 2017 2018 2019 $0 2020 2021 4Q20 1Q21 2Q21 3Q
Slide 19: Improved Operating Leverage
Improved Operating Leverage 2.67% 2.61% 2.59% 2.17% 2.05% 1.98% 1.87% 1.89% 1.92% 1.74% $20,858 $18,448 $18,330 $17,670 $16,477 $16,892 $15,401 $13,341 $12,725 $10,134 2017 2018 2019 2020 2021 4Q20 1Q21 2Q21 3Q21 4Q21 Average Total Assets Core NIE/Avg Assets (1) $ in millions 19 (1) Non-GAAP financi
Slide 20: Total Loans
Total Loans Annual Loan Production Total Loans, Net of Unearned Income $10.6 billion $2,558 Annualized Quarterly Growth = 9% $2,335 563 (excluding PPP Loans (1)) 971 $1,576 1,995 $1,434 $1,201 1,364 2017 2018 2019 2020 2021 Commercial Loan Originations PPP Loan Originations Business Commercial 32.2%
Slide 21: Well Diversified C&I and Agriculture Loan Portfolios
Well Diversified C&I and Agriculture Loan Portfolios C&I Portfolio Agriculture Portfolio $3.4 billion $796 million Dairy Cattle Healthcare & Milk 3.9% Production Wholesalers 3.3% Dentists 21.0% 2.7% Cattle 11.9% Finance/ Fishing Insurance 5.4% 9.6% Contractors Other 36.1% 6.9% Manufacturing 4.3% Ret
Slide 22: Balanced CRE Loan Portfolio
Balanced CRE Loan Portfolio CRE Portfolio $5.0 billion Consistent CRE Coverage Balanced with 53% Income Property and 47% Owner-occupied 200.6% 180.1% 181.3% 185.6% 184.8% 132.7% 129.6% 131.1% 132.0% 128.3% $6,127 Office 24.6% 1,146 Multifamily Education $5,016 $5,083 $4,840 $4,925 9.7% 2.4% 778 843
Slide 23: Paycheck Protection Program
Change in PPP Portfolio (Gross of unearned income) $ in millions Paycheck Protection $563 $40 Program $971 Overall, we originated approximately 9,300 loans and infused over $1.5 billion into the $-955 Pacific Northwest economy through PPP. We $188 were pleased to provide much needed aid for $0 $-431
Slide 24: Components of Annual Change in Loans
Components of Annual Change in Loans 2021 $1,085 $2,558 $(462) $(976) $(198) $235 $(1,028) $10,642 $9,428 Beginning New Acquired Loans Net Advances/ Prepayments Payoffs PPP Payoffs Other Ending Balance Balance Originations Payments inclusive of $563 million in PPP loans 2020 $2,335 $(713) $288 $(765
Slide 25: Allowance for Credit Losses (ACL)
Allowance for Credit Losses (ACL) 1.70% 1.69% 1.59% 1.55% 1.49% 1.58% 1.53% 1.50% 1.48% 1.46% $155,578 $149,140 $148,294 $142,988 $142,785 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 (1) Allowance for Credit Losses % Allowance for Credit Losses % Allowance for Credit Losses excl
Slide 26: Nonperforming Assets
Nonperforming Assets 0.21% 0.20% 0.14% 0.13% 0.11% $35,359 $34,102 $24,402 $24,557 $23,422 34,806 33,581 24,021 24,176 23,041 Dec 31, 2020 Mar 31, 2021 Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Nonaccrual loans OREO and OPPO Nonperforming assets to period-end assets 26 $ in thousands
Slide 27: Highly Quality Securities Portfolio
Highly Quality Securities Portfolio (1) Investment Portfolio Mix (1) Portfolio is conservatively positioned: $8.0 billion • Strong credit quality with focus on agencies and high-quality municipal securities Municipals 12.4% • About half of the MBS portfolio is Agency Commercial Mortgage Backed Secur
Slide 28: Strong Capital, Dividend Payouts & Total Return
Strong Capital, Dividend Payouts & Total Return 14.5% 14.7% 14.5% 14.3% Total Return Performance 600 500 9.8% 9.0% 9.0% 8.6% 8.6% $0.82 400 $0.77 $0.73 $0.74 Index Value 300 $0.55 200 $0.28 $0.28 $0.28 $0.30 $0.30 100 0 4Q20 1Q21 2Q21 3Q21 4Q21 3 0 0 7 4 1 1 8 08 5 2 9 9 6 01 02 01 01 01 02 01 01 01
Slide 29: 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 $120,000 $360,000 $100,000 Awarded through the Bank's Provided to BIPOC and Scholarship Fund for NW Equity and Inclu
Slide 30: Dedicated to Our Communities
2021 Sundial Bridge, Redding, California Dedicated to Our $351,611 Communities Warm Hearts Winter Drive FUNDRAISING $12,435 American Heart Association At Columbia Bank, we empower employees to address the unique needs of their communities and offer support 20,549 in the manner that makes the biggest
Slide 31: Columbia – An Award-Winning Company
Columbia – An Award-Winning Company 31
Slide 32: 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 33: Executive Leadership Team
Executive Leadership Team Investor Relations 253-471-4065 investorrelations@columbiabank.com Clint Stein Kumi Yamamoto Baruffi Aaron James Deer President Executive Vice President Executive Vice President Chief Executive Officer General Counsel Chief Financial Officer Columbia Bank Center 1301 A Stre
Slide 34: Appendix
Appendix 34 Old Sacramento, California
Slide 35: 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 2020 2021 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 $2,347,607 $2,588,742 -Prefer
Slide 36: Non-GAAP Financial Measures
Non-GAAP Financial Measures NIE/Average Assets $ in thousands 2017 2018 2019 2020 2021 4Q20 1Q21 2Q21 3Q21 4Q21 Reported Noninterest Expense (numerator A) $ 291,017 $ 340,490 $ 345,482 $ 334,519 $ 360,304 $ 84,300 $ 83,559 $ 84,116 $ 90,007 $ 102,622 (2) - FDIC Clawback (Expense)/Recap 54 — — — — —
Slide 37: Non-GAAP Financial Measures
Non-GAAP Financial Measures Net Interest Margin $ in Thousands 2017 2018 2019 2020 2021 4Q20 1Q21 2Q21 3Q21 4Q21 Net Interest Income (tax equivalent) (numerator A) $ 380,107 $ 486,667 $ 501,770 $ 507,574 $ 535,311 $ 132,995 $ 125,889 $ 127,409 $ 134,439 $ 147,574 Adjustments to arrive at operating n
Slide 38: Non-GAAP Financial Measures
Non-GAAP Financial Measures Operating Efficiency Ratio Tangible Common Equity $ in thousand 4Q20 1Q21 2Q21 3Q21 4Q21 $ in thousands 4Q20 1Q21 2Q21 3Q21 4Q21 Total Shareholders' Equity (numerator Noninterest expense (numerator A) $ 84,300 $ 83,559 $ 84,116 $ 90,007 $ 102,622 A) $2,347,607 $2,275,063
Slide 39: The Power of a Larger Balance Sheet: A Hypothetical Example
The Power of a Larger Balance Sheet: A Hypothetical Example • The opportunities to grow the loan book by expanding business with our existing customer base are dramatic, and they are potentially multiplicative as we continue to win business in our markets. (a) Columbia 9/30/21 Tangible Common Equity
Slide 40: Non-GAAP Reconciliation: GAAP and Core Cash EPS Accretion
Non-GAAP Reconciliation: GAAP and Core Case Earnings per Share Accretion GAAP ($mm) Core cash ($mm) Millions of diluted shares Columbia 2023E standalone net income $215 $215 78.7 Umpqua 2023E standalone net income 407 407 218.1 Combined net income $623 $623 After-tax cash adjustments Cost savings -
Slide 41: Non-GAAP Reconciliation: Purchase Accounting Summary
Non-GAAP Reconciliation: Purchase Accounting Summary Tangible Book Value Per Share Dilution Calculation of Intangibles Created Millions of $ millions basic shares $ per share $ millons Columbia Columbia tangible book value as of June 30, 2021 $1,692 78.5 Fixed exchange ratio 0.5989x (-) Reduction in
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