Columbia Banking System, Inc. · NASDAQ:COLB
Columbia Banking System — Q4 2019 Earnings Presentation
32 slides from Columbia Banking System's earnings presentation, Jan 23, 2020
Slide 1: Building a Premier Regional Community Bank
COLUMBIA BANK BUILDING A PREMIER REGIONAL COMMUNITY BANK NASDAQ:COLB Q (} Columbia Banking System Inc. : 2019
Slide 2: 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 3: Why Columbia Bank?
Why Columbia Bank? • Fortress balance sheet ▪ Very low cost, stable funding base ▪ Relationship centric C&I focused loan portfolio ▪ Diversified loan portfolio with top tier credit quality • Sustained track record of driving long-term shareholder value • Seasoned acquirer with proven integration res
Slide 4: A network of 146 branches throughout the Northwest
A network of 146 branches throughout the Northwest
Slide 5: Located in a Strong Economic Region in the US
Located in a Strong Economic Region in the US Superior Annual GDP Growth Established Presence in Various Industries Diversified Agriculture • Washington’s annual GDP growth rate of • Aerospace, technology, agriculture and • Washington, Oregon, and Idaho together 5.7% was the best in the nation in 20
Slide 6: 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 17.12%ü 13.70%ü 22.56%ü 14.54%ü 11.32%ü 14.72%ü 7.00% (2010 – 2020) Demographics Projected Population Change 6.75%ü 6.12%ü
Slide 7: Seasoned Acquirer with Proven Integration Track Record
Seasoned Acquirer with Proven Integration Track Record Over the past 10 years, completed 8 acquisitions, 3 branch sales and 48 branch consolidations FDIC Assisted acquisition FDIC Assisted acquisition Acquired Columbia River Bank Summit Bank West Coast Bancorp Jan-2010 May-2011 Apr-2013 $913MM Asset
Slide 8: Fourth Quarter 2019 Highlights
Fourth Quarter 2019 Highlights • Record full year 2019 net income of $194.5 million; diluted earnings per share of $2.68 • Strong fourth quarter net income of $46.1 million; diluted earnings per share of $0.64 • Record full year loan production of $1.58 billion and strong fourth quarter loan product
Slide 9: Favorable Trend of Earnings
Favorable Trend of Earnings Earnings per Share (Diluted) Net Income ($ Millions) $2.68 $2.36 2019 $46 $52 $51 $46 $195 $194 $0.64 $0.61 $1.86 2018 $40 $42 $46 $45 $173 $1.81 $1.71 $0.23 $0.70 $0.53 $0.46 $0.63 2017 $29 $27 $41 $16 $113 $0.70 $0.45 $0.47 $0.71 $0.57 2016 $21 $25 $27 $31 $104 $0.47 $0
Slide 10: Total Loans, Net of Unearned Income
Total Loans, Net of Unearned Income Total Loans = $8.7 billion Annual growth = 4% Rolling 5 Quarter Loan Production $427 1-4 Family Residential $388 $401 $383 $366 3.02% Owner Occupied Com'l RE 4Q18 1Q19 2Q19 3Q19 4Q19 23.62% Commercial Business 41.04% Income 4th Quarter Loan Production Property Com
Slide 11: Well Diversified C&I and Agriculture Loan Portfolios
Well Diversified C&I and Agriculture Loan Portfolios C&I Portfolio $3.6 billion Construction Wholesalers 5.8% 3.3% Retail 2.2% Agriculture Portfolio Healthcare $561 million 4.0% Public Admin 7.5% Cattle 16.1% Forestry/ Other Agriculture/ Logging 27.4% Dentists 19.0% Forest/Fish 8.8% 15.6% Fishing 11
Slide 12: Balanced CRE Loan Portfolio
Balanced CRE Loan Portfolio CRE Portfolio $4.2 billion Consistent CRE Coverage Balanced with 50% Income Property and 50% Owner-occupied 209.6% 198.3% 199.7% 200.8% 200.4% 135.6% 130.1% 131.0% 134.5% 139.3% Office 21.2% $4,766 $4,552 $4,546 $4,578 $4,661 582 706 628 664 685 Multifamily 9.2% Retail 10
Slide 13: Components of Fourth Quarter Change in Loans
Components of Fourth Quarter Change in Loans Fourth Quarter 2019 $8,756 $427 $28 $8,743 $(215) $(168) $(85) Beginning Net Advances/ Prepayments Payoffs New Other Ending Balance Payments Originations Balance Fourth Quarter 2018 $8,514 $388 $8,392 $(22) $(220) $(162) $(106) Beginning Net Advances/ Pre
Slide 14: Components of Annual Change in Loans
Components of Annual Change in Loans 2019 $1,576 $55 $8,743 $8,392 $(382) $(609) $(289) Beginning Net Advances/ Prepayments Payoffs New Other Ending Balance Payments Originations Balance 2018 $8,359 $1,434 $8,392 $(30) $(308) $(686) $(377) Beginning Net Advances/ Prepayments Payoffs New Other Ending
Slide 15: Favorable Trend in Nonperforming Assets
Favorable Trend in Nonperforming Assets 0.46% 0.45% $60,891 0.31% $58,690 0.27% 6,049 0.24% 6,075 $40,156 $37,646 $33,612 54,842 52,615 39,038 37,021 33,060 Dec 31, 2018 Mar 31, 2019 Jun 30, 2019 Sep 30, 2019 Dec 31, 2019 Nonaccrual loans OREO and OPPO Nonperforming assets to period-end assets $ in
Slide 16: ALLL Components
ALLL Components 0.99% 0.98% 0.93% 0.94% 0.96% 5,287 4,915 2,975 3,568 3,372 2,207 2,988 1,789 1,614 1,362 1,457 218 299 306 0 0 (1,531) (2,312) -1,844 (2,708) (3,262) (5,216) 4Q18 1Q19 2Q19 3Q19 4Q19 Provision Expense Charge-offs Recoveries Net Charge-Offs/Recoveries ALLL/Total Loans 16 $ in Thousan
Slide 17: Diversified, Relationship Centered Deposit Base
Diversified, Relationship Centered Deposit Base Solid deposit base that is well diversified across business & consumer. $10.5 billion $10.7 billion 58% Business & 42% Consumer 59% Business & 41% Consumer 3.8% 3.1% 8.5% 8.3% 21.9% 21.7% 10.4% 10.8% 50.0% 49.9% Dec 31, 2018 Dec 31, 2019 Demand and oth
Slide 18: Operating Net Interest Margin
Operating Net Interest Margin * 4.35% 4.33% 4.36% 4.32% 4.40% 4.18% 4.24% 4.12% 4.14% 4.11% 4.30% 4.34% 4.33% 4.38% 4.15% 4.15% 4.23% 4.12% 4.09% $500 4.01% $483.4 $500.4 $400 $120 $125.4 $126.9 $124.1 $125.9 $123.5 $377.5 $300 $319.3 $335.3 $80 $200 $40 $100 $0 $0 2015 2016 2017 2018 2019 4Q18 1Q19
Slide 19: Interest Rate Sensitivity
Interest Rate Sensitivity Duration in Years Loan Duration in Years by Repricing Period Balances: (Balances in $Billions) Mar-19 Jun-19 Sep-19 Dec-19 $1.1 $1.8 $1.1 $4.2 $8.7 $0.1 $0.2 $0.0 $0.2 3.8 2.6 3.0 2.5 2.5 2.2 2.0 4.6 4.3 4.3 4.3 0.2 0.1 3.2 3.3 3.1 2.8 2.9 2.4 2.4 2.0 2.1 2.2 2.2 2.1 Prime
Slide 20: Selected Balance Sheet & Ratios
Selected Balance Sheet & Ratios $ in Millions Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Total Assets $14,080 $13,758 $13,091 $13,064 $13,095 Securities, Including Equity Securities & FHLB Stock 3,794 3,397 2,894 3,053 3,193 Loans, Net of unearned Income 8,743 8,756 8,647 8,521
Slide 21: Summary Income Statement
Summary Income Statement $ in Thousands (except EPS) 4Q19 3Q19 2Q19 1Q19 4Q18 2019 2018 Net Interest Income $124,817 $122,450 $125,116 $121,022 $123,888 $493,405 $478,839 Provision for Loan Losses 1,614 299 218 1,362 1,789 3,493 14,769 Net Interest Income 123,203 122,151 124,898 119,660 122,099 489,
Slide 22: Noninterest Income
Noninterest Income $97,181 $88,256 20,024 8,464 11,866 13,465 12,135 $28,030 12,799 $25,648 19,719 7,928 15,198 $21,696 5,829 $21,807 $20,402 2,559 1,888 3,708 3,596 3,855 2,344 2,389 3,625 3,211 2,957 3,425 3,226 3,191 3,576 3,662 3,763 4,006 3,767 36,072 35,695 9,383 8,980 9,035 9,015 8,665 4Q18 1
Slide 23: Noninterest Expense and Operating Efficiency Ratio
Noninterest Expense and Operating Efficiency Ratio** 58.10% 57.54% 56.34% 58.65% 58.07% $87,019 $86,728 $87,076 $86,978 $84,700 26,617 26,001 23,972 23,660 23,806 8,645 9,010 8,858 8,809 8,712 51,051 52,085 52,015 54,459 54,308 4Q18 1Q19 2Q19 3Q19 4Q19 Compensation & Employee Benefits* Occupancy, Eq
Slide 24: Stable Expense Management
Stable Expense Management 2.96% 2.77% 2.67% 2.61% 2.59% 2.67% 2.65% 2.60% 2.59% 2.53% $13,751 $13,341 $13,460 $13,048 $13,096 $12,958 $12,725 $ (Millions) $10,134 $9,312 $8,655 2015 2016 2017 2018 2019 4Q18 1Q19 2Q19 3Q19 4Q19 $ in Millions Average Total Assets Core NIE/Avg Assets* * Core NIE/Averag
Slide 25: 2020 Digital Program Summary
2020 Digital Program Summary Vision A future where clients can choose to interact with us in-person or through digital channels while seamlessly changing between them. This includes delivering a modern banking experience through digital channels and digitally-enabled bankers allowing us to attract a
Slide 26: Current & Completed Technology Initiatives
Current & Completed Technology Initiatives 26
Slide 27: New Technology Initiatives
New Technology Initiatives 27
Slide 28: Strong Capital, Dividend Payouts & Total Return
Strong Capital, Dividend Payouts & Total Return 14.0% 14.0% 13.8% 13.5% 10 Year Total Return Performance 600 10.4% 10.8% 10.5% 9.9% 10.2% 0.71 0.70 500 0.63 0.64 0.61 400 0.42 0.42 Index Value 0.14 0.14 0.28 0.28 300 0.28 0.28 200 4Q18 1Q19 2Q19 3Q19 4Q19 100 EPS 0 Dec 31, 2011 Dec 31, 2009 Dec 31,
Slide 29: Columbia – An Award-Winning Company
Columbia – An Award-Winning Company 29
Slide 30: Executive Leadership Team
Executive Leadership Team Columbia Bank Center Investor Relations: 1301 A Street, Suite 900 253-305-1921 P.O. Box 2156 investorrelations@columbiabank.com 30 Tacoma, WA 98401-2156
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures Net Interest Margin Tangible Common 2015 2016 2017 2018 2019 4Q18 1Q19 2Q19 3Q19 4Q19 Equity 4Q18 1Q19 2Q19 3Q19 4Q19 $ in Thousands $ in Thousands Net interest income (tax $334,548 $344,425 $380,107 $486,667 $501,770 $125,917 $123,110 $127,236 $124,572 $126,852 Total equ
Slide 32: Non-GAAP Financial Measures
Non-GAAP Financial Measures Operating Efficiency Ratio Non-interest Expense net of Acquisition Related Expense 4Q18 1Q19 2Q19 3Q19 4Q19 $ in Thousands $ in Thousands 4Q18 1Q19 2Q19 3Q19 4Q19 Noninterest expense (numerator A) $ 87,019 $ 84,700 $ 86,728 $ 87,076 $ 86,978 Compensation & Employee Benefi
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