Columbia Banking System, Inc. · NASDAQ:COLB
Columbia Banking System — Q4 2018 Earnings Presentation
27 slides from Columbia Banking System's earnings presentation, Jan 24, 2019
Slide 1: Building a Premier Regional Community Bank
COLUMBIA BANK BUILDING A PREMIER REGIONAL COMMUNITY BANK NASDAQ:COLB Q / (} Columbia Banking System Inc. 2018
Slide 2: Fourth Quarter 2018 Highlights
Fourth Quarter 2018 Highlights • Record quarterly net income of $44.7 million; diluted earnings per share of $0.61 which included $0.01 per share negative impact from acquisition-related expenses • Quarterly loan production of $388.4 million second only to third quarter 2018 of $409 million. New ann
Slide 3: On the Call ...
On the Call ... Hadley Robbins President & Chief Executive Officer Andy McDonald Chief Credit Officer Gregory Sigrist Chief Financial Officer Clint Stein Chief Operating Officer Columbia Bank Center 1301 A Street, Suite 900 P.O. Box 2156 Tacoma, WA 98401-2156 Investor Relations: 253-305-1921 3
Slide 4: Forward Looking Statements
Forward Looking Statements This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which can be identified by words such as “may,” “expected,” “anticipate”, “continue,” or other comparable words. In addition, all statements ot
Slide 5: Favorable Trend of Earnings
Favorable Trend of Earnings Net Income Earnings per Share (Diluted) ($ Millions) $2.36 2018 $40 $42 $46 $45 $173 $0.61 $1.86 $1.81 $1.71 $0.23 2017 $29 $27 $41 $16 $113 $1.52 $0.53 $0.46 $0.63 $0.34 $0.70 2016 $21 $25 $27 $31 $104 $0.45 $0.47 $0.41 $0.57 2015 $24 $22 $26 $27 $99 $0.47 $0.40 $0.38 $0
Slide 6: Summary Income Statement
Summary Income Statement Full Year $ in Thousands (except EPS) 4Q18 3Q18 2Q18 1Q18 4Q17 2018 2017 Net Interest Income $123,888 $122,796 $116,674 $115,481 $106,224 $478,839 $367,989 Provision for Loan Losses 1,789 3,153 3,975 5,852 3,327 14,769 8,631 Net Interest Income 122,099 119,643 112,699 109,62
Slide 7: Operating Net Interest Margin
Operating Net Interest Margin * Impact of Impact of 4.76% Tax Reform Tax Reform 4.35% -7 bps 4.41% 4.40% -7 bps 4.33% 4.29% 4.12% 4.18% 4.20% 4.22% 4.30% $500 4.27% 4.38% 4.38% 4.21% 4.15% 4.15% 4.25% 4.18% $483.4 $400 4.01% $120 $118.0 $123.9 $125.4 $377.5 $111.1 $116.2 $300 $319.3 $335.3 $80 $276.
Slide 8: Non-Interest Income
Non-Interest Income $109,642 14,000 $88,256 11,474 8,464 4,283 11,866 $23,143 $23,692 12,399 $23,581 2,674 2,120 $21,019 12,135 2,980 $20,402 3,054 1,782 11,478 3,186 1,888 2,663 3,282 2,344 3,219 2,958 2,730 2,975 3,211 24,692 25,627 7,102 7,837 4,787 6,967 4,965 8,013 8,740 8,683 9,266 9,383 36,07
Slide 9: Non-Interest Expense and Operating Efficiency Ratio
Non-Interest Expense and Operating Efficiency Ratio** Quarterly NIE Change 88,000 57.59% 56.02% 54.83% 58.10% 56.06% 56.63% 52.24% 856 $87,019 1,715 $340,490 8,661 86,000 (588) 841 $291,017 17,196 100,293 1,354 Compensation & Employee Benefits* $ (Millions) 84,000 Occupancy, Equipment & Depreciation
Slide 10: Favorable Trend in Expense Management
Favorable Trend in Expense Management 3.09% 2.96% 2.77% 2.67% 2.61% 2.59% 2.61% 2.67% 2.55% 2.45% $12,958 $12,725 $12,805 $12,603 $12,530 $11,751 $ (Millions) $10,134 $9,312 $8,655 $7,468 2014 2015 2016 2017 YTD 4Q17 1Q18 2Q18 3Q18 4Q18 $ in Thousands Average Total Assets Core NIE/Avg Assets* *Core
Slide 11: Acquisition Related Expense
Acquisition Related Expense Full Year $ in Thousands 4Q18 3Q18 2Q18 1Q18 4Q17 2018 2017 Compensation and employee benefits $210 $923 $931 $1,556 $8,011 $3,620 $8,014 Occupancy — 29 586 1,004 967 1,619 1,912 Advertising and promotion 3 — 22 512 266 537 467 Data processing 22 20 634 287 1,016 963 1,55
Slide 12: Selected Balance Sheet & Ratios
Selected Balance Sheet & Ratios $ in Millions 4Q18 3Q18 2Q18 1Q18 4Q17 Total Assets $ 13,095 $ 12,957 $ 12,629 $ 12,531 $ 12,717 Securities, Including Equity Securities & FHLB Stock 3,193 2,943 2,665 2,641 2,753 Loans, Net of unearned Income 8,392 8,514 8,454 8,340 8,359 Allowance for Loan & Leases
Slide 13: Diversified, Relationship Centered Deposit Base
Diversified, Relationship Centered Deposit Base Total Deposits $10.5 billion $10,604 58% Business & 42% Consumer $10,532 $10,396 $10,384 $10,458 Core deposit ratio = 95% Interest Bearing Demand 11.9% Money Market 22.6% Noninterest Bearing 50.0% Savings 8.5% CDs < $250,000 2.3% CDs > $250,000 As of D
Slide 14: Total Loans, Net of Unearned Income
Total Loans, Net of Unearned Income Total Loans = $8.4 billion 1-4 Family Residential $8,514 3% $8,454 $8,359 $8,340 $8,392 Owner Occupied Com'l RE 21% Commercial Business Income 41% Property Com'l RE 24% Residential RE Purchased Credit Construction Impaired 3% 1% 12/31/17 03/31/18 06/30/18 09/30/18
Slide 15: Record Annual Loan Production
Record Annual Loan Production Annual Loan Production Rolling 5 Quarter Loan Production $409 $388 $378 $373 $1,434 $264 $1,261 $1,201 $1,119 $1,040 4Q17 1Q18 2Q18 3Q18 4Q18 4th Quarter Loan Production $378 $388 $325 $272 $294 2014 2015 2016 2017 2018 YTD 4Q14 4Q15 4Q16 4Q17 4Q18 $ in Millions 15
Slide 16: Well Diversified C&I and Agriculture Loan Portfolios
Well Diversified C&I and Agriculture Loan Portfolios C&I Portfolio $3.4 billion Construction Wholesalers 4% 6% Retail 2% Agriculture Portfolio Healthcare 4% $473 million Public Admin 8% Cattle 16% Forestry/Logging Other 10% Dentists 20% Agriculture/ 30% Forest/Fish 14% Fishing 10% Finance & Professi
Slide 17: Balanced CRE Loan Portfolio
Balanced CRE Loan Portfolio CRE Portfolio $3.8 billion Consistent CRE Coverage Balanced with 54% Income Property and 46% Owner-occupied 228.0% 219.2% 211.8% 208.4% 209.6% 140.5% 139.2% 133.7% 130.3% 135.6% Office 22% $4,641 $4,604 $4,561 $4,556 $4,552 815 827 803 769 706 Retail 12% Multifamily 9% 3,
Slide 18: Components of Fourth Quarter Change in Loans
Components of Fourth Quarter Change in Loans Fourth Quarter 2018 $8,514 2,152 $8,392 (22) 388 (2,372) (268) Beginning Balance Scheduled Prepayments/ New Existing Other Ending Balance Payments Payoffs Originations Loan Advances Fourth Quarter 2017 1,874 $8,359 $6,512 2,225 (69) 378 (2,381) (180) Begi
Slide 19: Components of Year-to-Date Change in Loans
Components of Year-to-Date Change in Loans Year-to-date 2018 $8,359 9,735 48 $8,392 (78) (10,043) 1,434 (1,063) Beginning Balance Scheduled Prepayments/ New Existing Other Acquired Loans Ending Balance Payments Payoffs Originations Loan Advances Year-to-date 2017 1,874 $8,359 $6,213 8,831 (164) (8,9
Slide 20: ALLL Components
ALLL Components 0.91% 0.96% 0.95% 0.98% 0.99% 5,852 3,975 3,652 3,327 7,242 3,153 2,207 4,915 1,671 4,307 1,789 3,569 2,091 0 0 -703 -484 (2,636) (2,575) (2,708) (3,590) (4,272) 4Q17 1Q18 2Q18 3Q18 4Q18 Provision Expense Charge-offs Recoveries Net Charge-Offs ALLL/Total Loans 20 $ in Thousands
Slide 21: Nonperforming Assets
Nonperforming Assets 0.63% 0.72% 0.61% 0.52% 0.46% $89,971 11,507 $79,487 $76,584 13,298 7,080 $67,747 7,415 $60,891 6,049 78,464 69,504 66,189 60,332 54,842 12/31/17 03/31/18 06/30/18 09/30/18 12/31/18 $ in Thousands Nonaccrual loans OREO and OPPO Nonperforming assets to period-end assets 21
Slide 22: Attractive Northwest Markets
Attractive Northwest Markets Seattle- ü Better Than or Equal to Portland- United Tacoma- Boise Washington Oregon Idaho U.S. Average Vancouver States Bellevue Population Increase 12.96%ü 11.34%ü 15.44%ü 10.73ü 8.95%ü 9.58%ü 5.76% (2010 – 2018) Demographics Projected Population Change 6.74ü 6.59%ü 7.3
Slide 23: Pacific Northwest Economy is Growing Fast
Pacific Northwest Economy is Growing Fast A network of 150 branches A network of the throughout Northwest 150 branches throughout the Northwest
Slide 24: Strong Capital, Dividend Payouts & Total Return
Strong Capital, Dividend Payouts & Total Return 13.2% 13.4% 13.7% 13.0% 10 Year Total Return Performance 600 9.5% 9.6% 9.7% 9.6% 9.9% 500 0.63 0.61 0.55 0.57 400 Index Value 0.40 0.42 0.14 0.14 300 0.26 0.26 0.23 0.22 0.26 0.28 200 4Q17 1Q18 2Q18 3Q18 4Q18 100 EPS 0 12/31/2011 12/31/2008 12/31/2009
Slide 25: Columbia – An Award-Winning Company
Columbia – An Award-Winning Company 25
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures Net Interest Margin Tangible 2014 2015 2016 2017 2018 4Q17 1Q18 2Q18 3Q18 4Q18 $ in Thousands Common Equity 4Q17 1Q18 2Q18 3Q18 4Q18 $ in Thousands Net interest income (tax $312,146 $334,548 $344,425 $380,107 $486,667 $109,627 $117,359 $118,602 $124,789 $125,917 equivalen
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures Operating Efficiency Ratio Non-interest Expense net of Acquisition Related Expense $ in Thousands 4Q17 1Q18 2Q18 3Q18 4Q18 2017 2018 Noninterest expense (numerator A) $ 85,627 $ 85,987 $ 84,643 $ 82,841 $ 87,019 $ 291,017 $ 340,490 $ in Thousands 4Q17 1Q18 2Q18 3Q18 4Q18
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