Second Quarter 2023 Results
- Net income of $133 million, or $0.64 per common share
- Operating net income of $169 million, or $0.81 per common share1
- Consolidated asset balances of $54 billion at quarter end
- Loan balances of $37 billion and deposit balances of $41 billion at quarter end
- Estimated CET1 and total capital ratios of 9.1% and 11.1% at quarter end
PORTLAND, Ore., July 19, 2023 /PRNewswire/ --
COLUMBIA BANKING SYSTEM, INC. REPORTS SECOND QUARTER 2023 RESULTS | ||||||
$0.64 | $0.81 | $23.16 | $15.02 | |||
Earnings per diluted common share | Operating earnings per diluted common share 1 | Book value per common share | Tangible book value per common share 1 | |||
CEO Commentary |
"Our teams continued to drive success during the second quarter, which was characterized by further integration progress and relationship-focused business activity," said Clint Stein, President and CEO. "We successfully completed planned branch consolidations during the quarter, and though merger-related expenses continued to impact our reported results, we remain on track to achieve our guided cost-savings expectations by the end of the third quarter, with additional opportunities already identified. We are not immune to quantitative actions affecting industry deposit balances and contributing to the modest remix of our deposit base. However, our talented associates, service-driven operating model, and expansion in newer markets provide us with the opportunities and resources to retain our favorable placement within the industry." |
–Clint Stein, President and CEO of Columbia Banking System, Inc. |
2Q23 HIGHLIGHTS (COMPARED TO 1Q23) | ||
Net Interest Income and NIM | • Net interest income increased by $109 million or 29% on a linked-quarter basis due to the full quarter run rate as a combined organization, which offset the impact of higher funding costs related to deposit and liability mix shift and rising interest rates. | |
• Net interest margin was 3.93%, down 15 basis points from the prior quarter. Excluding purchase accounting accretion and amortization, net interest margin was 3.32%, down 41 basis points from the prior quarter due primarily to higher funding costs. | ||
Non-Interest Income and Expense | • Non-interest income decreased by $15 million due primarily to a $24 million linked-quarter unfavorable change related to cumulative non-merger fair value accounting and hedges. | |
• Non-interest expense decreased by $14 million as lower merger-related expenses and the realization of cost savings offset the full quarter run rate of the combined organization. | ||
Credit Quality | • Net charge-offs were 0.30% of average loans and leases (annualized) and centered in the FinPac portfolio. | |
• Provision expense of $16 million reflects stabilizing credit trends in the FinPac portfolio, changes in the economic forecasts used in credit models, and portfolio mix changes. | ||
• Non-performing assets to total assets was 0.15%. | ||
Capital | • Estimated total risk-based capital ratio of 11.1% and estimated common equity tier 1 risk-based capital ratio of 9.1%. | |
• Declared a quarterly cash dividend of $0.36 per common share on May 15, 2023, which was paid June 15, 2023. | ||
Notable items | • Sold $373 million in non-relationship loans and reclassified an additional $118 million to loans held for sale. | |
• Entered into an agreement to sell approximately one-third of the MSR portfolio, which relates to the non-relationship component of the serviced loan portfolio. | ||
• $30 million in merger-related expenses. | ||
2Q23 KEY FINANCIAL DATA | |||||
PERFORMANCE METRICS | 2Q23 | 1Q23 | 2Q22 | ||
Return on average assets | 1.00 % | (0.14) % | 1.04 % | ||
Return on average tangible common equity1 | 16.63 % | (2.09) % | 12.23 % | ||
Operating return on average assets1 | 1.27 % | 0.74 % | 1.06 % | ||
Operating return on average tangible common equity1 | 21.13 % | 10.64 % | 12.49 % | ||
Net interest margin | 3.93 % | 4.08 % | 3.41 % | ||
Adjusted net interest margin1 | 3.32 % | 3.73 % | 3.40 % | ||
Efficiency ratio | 62.60 % | 79.71 % | 59.12 % | ||
INCOME STATEMENT ($ in 000s, excl. per share data) | 2Q23 | 1Q23 | 2Q22 | ||
Net interest income | $483,975 | $374,698 | $248,170 | ||
Provision for credit losses | $16,014 | $105,539 | $18,692 | ||
Non-interest income | $39,678 | $54,735 | $55,235 | ||
Non-interest expense | $328,559 | $342,818 | $179,574 | ||
Pre-provision net revenue 1 | $195,094 | $86,615 | $123,831 | ||
Operating pre-provision net revenue1 | $243,114 | $195,730 | $125,994 | ||
Earnings per common share - diluted 2 | $0.64 | ($0.09) | $0.61 | ||
Operating earnings per common share - diluted 1,2 | $0.81 | $0.46 | $0.62 | ||
Dividends paid per share 2 | $0.36 | $0.35 | $0.35 | ||
BALANCE SHEET | 2Q23 | 1Q23 | 2Q22 | ||
Total assets | $53.6B | $54.0B | $30.1B | ||
Loans and leases | $37.0B | $37.1B | $24.4B | ||
Total deposits | $40.8B | $41.6B | $26.1B | ||
Book value per common share 2 | $23.16 | $23.44 | $19.47 | ||
Tangible book value per share[1][2] | $15.02 | $15.12 | $19.42 | ||
Tangible book value per share, ex AOCI 1,2 | $17.03 | $16.56 | $21.80 | ||
Organizational UpdateColumbia Banking System, Inc. ("Columbia", "we", or "our") completed the planned consolidation of 47 branches during the latter half of the second quarter. We remain on track to realize the previously communicated $135 million in annualized cost-savings expectations by the end of the third quarter.
On February 28, 2023, Columbia completed its merger with Umpqua Holdings Corporation ("UHC"), combining the two premier banks in the Northwest to create one of the largest banks headquartered in the West ("the merger"). Columbia's financial results for any periods ended prior to February 28, 2023 reflect UHC results only on a standalone basis. In addition, Columbia's reported financial results for the first quarter of 2023 reflect UHC financial results only until the closing of the merger after the close of business on February 28, 2023. As a result of these two factors, Columbia's financial results for the first and second quarters of 2023 and the six months ended June 30, 2023 may not be directly comparable to prior reported periods. The number of shares issued and outstanding, earnings per share, additional paid-in capital, and all references to share quantities or metrics of Columbia have been retrospectively restated to reflect the equivalent number of shares issued in the merger as the merger was treated as a reverse merger. Under the reverse acquisition method of accounting, the assets and liabilities of Columbia as of February 28, 2023 ("historical Columbia") were recorded at their respective fair values.
Net Interest IncomeNet interest income was $484 million for the second quarter of 2023, up $109 million from the prior quarter. The increase, which includes $74 million of purchase accounting accretion and amortization compared to $32 million in the first quarter, reflects the benefit of a full quarter run rate as a combined organization, partially offset by higher funding costs related to deposit and liability mix shift and rising interest rates.
Columbia's net interest margin was 3.93% for the second quarter of 2023, down 15 basis points from 4.08% for the first quarter of 2023. Excluding purchase accounting accretion and amortization, the net interest margin was 3.32% for the second quarter of 2023 compared to 3.73% for the first quarter of 2023. The cost of interest-bearing deposits increased 32 basis points on a linked-quarter basis to 1.64% for the second quarter of 2023, which compares to 1.83% for both the month of June and at June 30, 2023. Please refer to the Q2 2023 Earnings Presentation for additional net interest margin change details and interest rate sensitivity information as well as our non-GAAP disclosures in this press release for the impact of purchase accounting accretion and amortization on individual line items.
Non-interest IncomeNon-interest income was $40 million for the second quarter of 2023, down $15 million from the prior quarter. A $24 million unfavorable change in cumulative fair value adjustments and mortgage servicing rights ("MSR") hedging activity offset the benefit of the full quarter run rate as a combined organization. A net fair value loss of $16 million in the second quarter compares to a net fair value gain of $8 million in the first quarter, as detailed in our non-GAAP disclosures. The planned sale of approximately one-third of our MSR and the associated accounting treatment was the primary driver of the ineffectiveness of our MSR hedging activity during the second quarter. The transaction, which we expect to close at the end of the third quarter or beginning of the fourth quarter, relates to a non-relationship component of our serviced loan portfolio, and the transaction is expected to be accretive to capital given the impact to risk-weighted assets from the reduction in our MSR balance.
Non-interest ExpenseNon-interest expense was $329 million for the second quarter of 2023, down $14 million from the prior quarter level. The decrease reflects an $86 million decline in merger-related expenses, which were $30 million in the second quarter, and the realization of cost savings, with the impact partially offset by the full quarter run rate of the combined organization. Please refer to the Q2 2023 Earnings Presentation for additional expense details, including an update on realized merger-related cost-savings through June 30, 2023.
Balance SheetTotal consolidated assets were $53.6 billion as of June 30, 2023, compared to $54.0 billion as of March 31, 2023. Cash and cash equivalents was $3.4 billion as of June 30, 2023, a decrease of $228 million relative to March 31, 2023. We continued to maintain a higher on-balance sheet level of liquidity during the second quarter. Including secured off-balance sheet lines of credit, total available liquidity was $18.1 billion as of June 30, 2023, representing 34% of total assets, 44% of total deposits, and 134% of uninsured deposits. Please refer to the Q2 2023 Earnings Presentation for additional details related to our liquidity position.
Available for sale securities, which are held on balance sheet at fair value, were $9.0 billion as of June 30, 2023, a decrease of $251 million relative to March 31, 2023, as paydowns and a decline in the fair value of the portfolio were only partially offset by accretion of the discount on historical Columbia securities. Please refer to the Q2 2023 Earnings Presentation for additional details related to our securities portfolio.
Gross loans and leases were $37.0 billion as of June 30, 2023, essentially unchanged from March 31, 2023, as net organic growth during the quarter was offset by the sale of $373 million in loans and the corresponding reclassification of $118 million in balances to loans held for sale. "We elected to sell approximately $500 million in loans that were transactional in nature during the quarter," commented Chris Merrywell, President of Umpqua Bank. "Our teams remain focused on generating balanced growth through existing and new customer relationships, which contributed to 5% annualized growth in the second quarter when loan sales and transfers are excluded." Please refer to the Q2 2023 Earnings Presentation for additional details related to our loan portfolio, which include underwriting characteristics, the composition of our commercial portfolios, and disclosure related to our office portfolio.
Total deposits were $40.8 billion as of June 30, 2023, a decrease of $751 million relative to March 31, 2023. "Our deposit balances continued to be affected by market liquidity tightening, the impact of inflation on customer spending, and commercial customers' deployment of cash, which includes tax payments," stated Mr. Merrywell. "Declining balances do not reflect customer attrition, and to date we have not experienced any adverse impact from the planned branch consolidations completed during the quarter given our teams' dedication to limiting any potential disruption to customers from the activity." Please refer to the Q2 2023 Earnings Presentation for additional details related to deposit characteristics and flows.
Credit QualityThe allowance for credit losses was $424 million, or 1.15% of loans and leases, as of June 30, 2023, compared to $436 million, or 1.18% of loans and leases, as of March 31, 2023. The provision for credit losses was $16 million for the second quarter of 2023 and is reflective of stabilizing credit trends in the FinPac portfolio; changes between the February 2023 and May 2023 economic forecasts; and portfolio mix changes, which include the reserve release associated with loan sales completed during the quarter. Please refer to the Q2 2023 Earnings Presentation for additional details related to the allowance for credit losses and other credit trends.
Net charge-offs were 0.30% of average loans and leases (annualized) for the second quarter of 2023, compared to 0.23% for the first quarter of 2023. Net charge-off activity continued to be centered in the FinPac portfolio, which experienced an anticipated increase in charge-offs. Bank charge-off activity remained low at 0.03% of average bank loans. As of June 30, 2023, non-performing assets were $80 million, or 0.15% of total assets, compared to $76 million, or 0.14% as of March 31, 2023.
CapitalAs of June 30, 2023, Columbia's book value per common share decreased to $23.16, compared to $23.44 at March 31, 2023. The linked-quarter change in book value primarily reflects a change in accumulated other comprehensive (loss) income ("AOCI") to $(419) million at June 30, 2023, compared to $(300) million at the prior quarter-end. The change in AOCI is due primarily to a reduction in the tax-effected net unrealized loss on available for sale securities to $403 million at June 30, 2023, compared to $295 million at March 31, 2023. Tangible book value per common share3 decreased to $15.02, compared to $15.12 at March 31, 2023.
Columbia's estimated total risk-based capital ratio was 11.1% and its estimated common equity tier 1 risk-based capital ratio was 9.1% as of June 30, 2023, compared to 10.9% and 8.9%, respectively, at March 31, 2023. Columbia remains above current "well-capitalized" regulatory minimums. "Our regulatory capital ratios expanded as anticipated during the second quarter, due in part to the realization of loan and investment securities discount accretion," stated Ron Farnsworth, Chief Financial Officer of Columbia. "We expect meaningful capital build over time to enhance future deployment opportunities." The regulatory capital ratios as of June 30, 2023 are estimates, pending completion and filing of Columbia's regulatory reports.
Earnings Presentation and Conference Call InformationColumbia's Q2 2023 Earnings Presentation provides additional disclosure. A copy will be available on our investor relations page: www.columbiabankingsystem.com.
Columbia will host its second quarter 2023 earnings conference call on July 19, 2023, at 2:30 p.m. PT (5:30 p.m. ET). During the call, Columbia's management will provide an update on recent activities and discuss its second quarter 2023 financial results. Participants may register for the call using the below link to receive dial-in details and their own unique PINs or join the audiocast. It is recommended you join 10 minutes prior to the start time.
Register for the call: https://register.vevent.com/register/BIdd0fac4229134dff9718a687c2bb37fcJoin the audiocast: https://edge.media-server.com/mmc/p/9uf3dn2pAccess the replay through Columbia's investor relations page: www.columbiabankingsystem.com
About Columbia Banking System, Inc.Columbia (Nasdaq: COLB) is headquartered in Tacoma, Washington and is the parent company of Umpqua Bank, an award-winning western U.S. regional bank based in Lake Oswego, Oregon. In March of 2023, Columbia and Umpqua combined two of the Pacific Northwest's premier financial institutions under the Umpqua Bank brand to create one of the largest banks headquartered in the West and a top-30 U.S. bank. With over $50 billion of assets, Umpqua Bank combines the resources, sophistication and expertise of a national bank with a commitment to deliver personalized service at scale. The bank operates in Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah, and Washington and supports consumers and businesses through a full suite of services, including retail and commercial banking; Small Business Administration lending; institutional and corporate banking; and equipment leasing. Umpqua Bank customers also have access to comprehensive investment and wealth management expertise as well as healthcare and private banking through Columbia Wealth Management and Columbia Trust Company, a subsidiary of Columbia. Learn more at www.columbiabankingsystem.com.
Forward-Looking StatementsThis press release 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 to risk and uncertainty and actual results could differ materially due to various risk factors, including those set forth from time to time in our filings with the Securities and Exchange Commission (the "SEC"). You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "target," "projects," "outlook," "forecast," "will," "may," "could," "should," "can" and similar references to future periods. In this press release we make forward-looking statements about strategic and growth initiatives and the result of such activity. Risks that could cause results to differ from forward-looking statements we make include, without limitation: current and future economic and market conditions, including the effects of declines in housing and commercial real estate prices, high unemployment rates, continued inflation and any recession or slowdown in economic growth particularly in the western United States; economic forecast variables that are either materially worse or better than end of quarter projections and deterioration in the economy that could result in increased loan and lease losses, especially those risks associated with concentrations in real estate related loans; our ability to effectively manage problem credits; the impact of bank failures or adverse developments at or news developments concerning other banks on general investor sentiment regarding the liquidity stability of banks; changes in interest rates that could significantly reduce net interest income and negatively affect asset yields and valuations and funding sources; changes in the scope and cost of FDIC insurance and other coverage; our ability to successfully implement efficiency and operational excellence initiatives; our ability to successfully develop and market new products and technology; changes in laws or regulations; any failure to realize the anticipated benefits of the UHC merger when expected or at all; the possibility that the integration following the UHC merger may be more expensive than anticipated, including as a result of unexpected factors or events, diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the UHC merger and integration of the companies; the effect of geopolitical instability, including wars, conflicts and terrorist attacks; and natural disasters and other similar unexpected events outside of our control. We also caution that the amount and timing of any future common stock dividends or repurchases will depend on the earnings, cash requirements and financial condition of Columbia, market conditions, capital requirements, applicable law and regulations (including federal securities laws and federal banking regulations), and other factors deemed relevant by Columbia's Board of Directors, and may be subject to regulatory approval or conditions.
1 "Non-GAAP" financial measure. See GAAP to Non-GAAP Reconciliation for the comparable GAAP measurement.
2 Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958.
3 "Non-GAAP" financial measure. See GAAP to Non-GAAP Reconciliation for the comparable GAAP measurement.
TABLE INDEX | |
Page | |
Consolidated Statements of Operations | 8 |
Consolidated Balance Sheets | 9 |
Financial Highlights | 11 |
Loan & Lease Portfolio Balances and Mix | 12 |
Deposit Portfolio Balances and Mix | 14 |
Credit Quality - Non-performing Assets | 15 |
Credit Quality - Allowance for Credit Losses | 16 |
Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates | 18 |
Residential Mortgage Banking Activity | 20 |
GAAP to Non-GAAP Reconciliation | 22 |
Columbia Banking System, Inc. | |||||||||||||
Consolidated Statements of Operations | |||||||||||||
(Unaudited) | |||||||||||||
Quarter Ended | % Change | ||||||||||||
($ in thousands, except per share data) | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Seq. Quarter | Year over Year | ||||||
Interest income: | |||||||||||||
Loans and leases | $ 552,679 | $ 413,525 | $ 322,350 | $ 278,830 | $ 234,674 | 34 % | 136 % | ||||||
Interest and dividends on investments: | |||||||||||||
Taxable | 79,036 | 39,729 | 18,108 | 18,175 | 17,256 | 99 % | 358 % | ||||||
Exempt from federal income tax | 6,817 | 3,397 | 1,288 | 1,322 | 1,369 | 101 % | 398 % | ||||||
Dividends | 2,581 | 719 | 182 | 86 | 84 | 259 % | nm | ||||||
Temporary investments and interest bearing deposits | 34,616 | 18,581 | 10,319 | 5,115 | 2,919 | 86 % | nm | ||||||
Total interest income | 675,729 | 475,951 | 352,247 | 303,528 | 256,302 | 42 % | 164 % | ||||||
Interest expense: | |||||||||||||
Deposits | 100,408 | 63,613 | 31,174 | 9,090 | 4,015 | 58 % | nm | ||||||
Securities sold under agreement to repurchase and federal funds purchased | 1,071 | 406 | 323 | 545 | 66 | 164 % | nm | ||||||
Borrowings | 81,004 | 28,764 | 8,023 | 798 | 50 | 182 % | nm | ||||||
Junior and other subordinated debentures | 9,271 | 8,470 | 7,248 | 5,491 | 4,001 | 9 % | 132 % | ||||||
Total interest expense | 191,754 | 101,253 | 46,768 | 15,924 | 8,132 | 89 % | nm | ||||||
Net interest income | 483,975 | 374,698 | 305,479 | 287,604 | 248,170 | 29 % | 95 % | ||||||
Provision for credit losses | 16,014 | 105,539 | 32,948 | 27,572 | 18,692 | (85) % | (14) % | ||||||
Non-interest income: | |||||||||||||
Service charges on deposits | 16,454 | 14,312 | 12,139 | 12,632 | 12,011 | 15 % | 37 % | ||||||
Card-based fees | 13,435 | 11,561 | 9,017 | 9,115 | 10,530 | 16 % | 28 % | ||||||
Financial services and trust revenue | 4,512 | 1,297 | 25 | 27 | 27 | 248 % | nm | ||||||
Residential mortgage banking (loss) revenue, net | (2,342) | 7,816 | (1,812) | 17,341 | 30,544 | (130) % | (108) % | ||||||
(Loss) gain on equity securities, net | (697) | 2,416 | 284 | (2,647) | (2,075) | (129) % | (66) % | ||||||
Gain on loan and lease sales, net | 442 | 940 | 1,531 | 1,525 | 1,303 | (53) % | (66) % | ||||||
BOLI income | 4,063 | 2,790 | 2,033 | 2,023 | 2,110 | 46 % | 93 % | ||||||
Other income (loss) | 3,811 | 13,603 | 11,662 | (10,571) | 785 | (72) % | 385 % | ||||||
Total non-interest income | 39,678 | 54,735 | 34,879 | 29,445 | 55,235 | (28) % | (28) % | ||||||
Non-interest expense: | |||||||||||||
Salaries and employee benefits | 163,398 | 136,092 | 107,982 | 109,164 | 110,942 | 20 % | 47 % | ||||||
Occupancy and equipment, net | 50,550 | 41,700 | 34,021 | 35,042 | 34,559 | 21 % | 46 % | ||||||
Intangible amortization | 35,553 | 12,660 | 1,019 | 1,025 | 1,026 | 181 % | nm | ||||||
FDIC assessments | 11,579 | 6,113 | 3,487 | 3,007 | 2,954 | 89 % | 292 % | ||||||
Merger related expenses | 29,649 | 115,898 | 11,637 | 769 | 2,672 | (74) % | nm | ||||||
Other expenses | 37,830 | 30,355 | 36,836 | 28,957 | 27,421 | 25 % | 38 % | ||||||
Total non-interest expense | 328,559 | 342,818 | 194,982 | 177,964 | 179,574 | (4) % | 83 % | ||||||
Income (loss) before provision (benefit) for income taxes | 179,080 | (18,924) | 112,428 | 111,513 | 105,139 | nm | 70 % | ||||||
Provision (benefit) for income taxes | 45,703 | (4,886) | 29,464 | 27,473 | 26,548 | nm | 72 % | ||||||
Net income (loss) | $ 133,377 | $ (14,038) | $ 82,964 | $ 84,040 | $ 78,591 | nm | 70 % | ||||||
Weighted average basic shares outstanding (1) | 207,977 | 156,383 | 129,321 | 129,319 | 129,306 | 33 % | 61 % | ||||||
Weighted average diluted shares outstanding (1) | 208,545 | 156,383 | 129,801 | 129,733 | 129,673 | 33 % | 61 % | ||||||
Earnings (loss) per common share – basic (1) | $ 0.64 | $ (0.09) | $ 0.64 | $ 0.65 | $ 0.61 | nm | 5 % | ||||||
Earnings (loss) per common share – diluted (1) | $ 0.64 | $ (0.09) | $ 0.64 | $ 0.65 | $ 0.61 | nm | 5 % | ||||||
nm = not meaningful | |||||||||||||
(1) | Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958. |
Columbia Banking System, Inc. | ||||||
Consolidated Statements of Operations | ||||||
(Unaudited) | ||||||
Six Months Ended | % Change | |||||
($ in thousands, except per share data) | Jun 30, 2023 | Jun 30, 2022 | Year over Year | |||
Interest income: | ||||||
Loans and leases | $ 966,204 | $ 449,078 | 115 % | |||
Interest and dividends on investments: | ||||||
Taxable | 118,765 | 35,981 | 230 % | |||
Exempt from federal income tax | 10,214 | 2,741 | 273 % | |||
Dividends | 3,300 | 170 | nm | |||
Temporary investments and interest bearing deposits | 53,197 | 4,272 | nm | |||
Total interest income | 1,151,680 | 492,242 | 134 % | |||
Interest expense: | ||||||
Deposits | 164,021 | 7,931 | nm | |||
Securities sold under agreement to repurchase and federal funds purchased | 1,477 | 129 | nm | |||
Borrowings | 109,768 | 99 | nm | |||
Junior and other subordinated debentures | 17,741 | 7,150 | 148 % | |||
Total interest expense | 293,007 | 15,309 | nm | |||
Net interest income | 858,673 | 476,933 | 80 % | |||
Provision for credit losses | 121,553 | 23,496 | 417 % | |||
Non-interest income: | ||||||
Service charges on deposits | 30,766 | 23,594 | 30 % | |||
Card-based fees | 24,996 | 19,238 | 30 % | |||
Brokerage revenue | 5,809 | 38 | nm | |||
Residential mortgage banking revenue, net | 5,474 | 91,330 | (94) % | |||
Gain on sale of debt securities, net | — | 2 | (100) % | |||
Gain (loss) on equity securities, net | 1,719 | (4,736) | nm | |||
Gain on loan and lease sales, net | 1,382 | 3,640 | (62) % | |||
BOLI income | 6,853 | 4,197 | 63 % | |||
Other income (loss) | 17,414 | (2,099) | nm | |||
Total non-interest income | 94,413 | 135,204 | (30) % | |||
Non-interest expense: | ||||||
Salaries and employee benefits | 299,490 | 224,080 | 34 % | |||
Occupancy and equipment, net | 92,250 | 69,388 | 33 % | |||
Intangible amortization | 48,213 | 2,051 | nm | |||
FDIC assessments | 17,692 | 7,470 | 137 % | |||
Merger related expenses | 145,547 | 4,950 | nm | |||
Other expenses | 68,185 | 54,065 | 26 % | |||
Total non-interest expense | 671,377 | 362,004 | 85 % | |||
Income before provision for income taxes | 160,156 | 226,637 | (29) % | |||
Provision for income taxes | 40,817 | 56,889 | (28) % | |||
Net income | $ 119,339 | $ 169,748 | (30) % | |||
Weighted average basic shares outstanding (1) | 182,325 | 129,233 | 41 % | |||
Weighted average diluted shares outstanding (1) | 182,860 | 129,685 | 41 % | |||
Earnings per common share – basic (1) | $ 0.65 | $ 1.31 | (50) % | |||
Earnings per common share – diluted (1) | $ 0.65 | $ 1.31 | (50) % | |||
nm = not meaningful | ||||||
(1) | Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958. |
Columbia Banking System, Inc. Consolidated Balance Sheets | |||||||||||||
(Unaudited) | |||||||||||||
% Change | |||||||||||||
($ in thousands, except per share data) | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Seq. Quarter | Year over Year | ||||||
Assets: | |||||||||||||
Cash and due from banks | $ 538,653 | $ 555,919 | $ 327,313 | $ 321,447 | $ 315,348 | (3) % | 71 % | ||||||
Interest bearing cash and temporary investments | 2,868,563 | 3,079,266 | 967,330 | 1,232,412 | 687,233 | (7) % | 317 % | ||||||
Investment securities: | |||||||||||||
Equity and other, at fair value | 76,361 | 76,532 | 72,959 | 72,277 | 75,347 | 0 % | 1 % | ||||||
Available for sale, at fair value | 8,998,428 | 9,249,600 | 3,196,166 | 3,136,391 | 3,416,707 | (3) % | 163 % | ||||||
Held to maturity, at amortized cost | 2,388 | 2,432 | 2,476 | 2,547 | 2,637 | (2) % | (9) % | ||||||
Loans held for sale | 183,633 | 49,338 | 71,647 | 148,275 | 228,889 | 272 % | (20) % | ||||||
Loans and leases | 37,049,299 | 37,091,280 | 26,155,981 | 25,507,951 | 24,432,678 | 0 % | 52 % | ||||||
Allowance for credit losses on loans and leases | (404,603) | (417,464) | (301,135) | (283,065) | (261,111) | (3) % | 55 % | ||||||
Net loans and leases | 36,644,696 | 36,673,816 | 25,854,846 | 25,224,886 | 24,171,567 | 0 % | 52 % | ||||||
Restricted equity securities | 258,524 | 246,525 | 47,144 | 40,993 | 10,867 | 5 % | nm | ||||||
Premises and equipment, net | 368,698 | 375,190 | 176,016 | 165,305 | 165,196 | (2) % | 123 % | ||||||
Operating lease right-of-use assets | 119,255 | 127,296 | 78,598 | 81,729 | 87,249 | (6) % | 37 % | ||||||
Goodwill | 1,029,234 | 1,030,142 | — | — | — | 0 % | nm | ||||||
Other intangible assets, net | 666,762 | 702,315 | 4,745 | 5,764 | 6,789 | (5) % | nm | ||||||
Residential mortgage servicing rights, at fair value | 172,929 | 178,800 | 185,017 | 196,177 | 179,558 | (3) % | (4) % | ||||||
Bank owned life insurance | 643,727 | 641,922 | 331,759 | 329,699 | 328,764 | 0 % | 96 % | ||||||
Deferred tax asset, net | 362,880 | 351,229 | 132,823 | 128,120 | 70,134 | 3 % | 417 % | ||||||
Other assets | 657,365 | 653,904 | 399,800 | 385,938 | 389,409 | 1 % | 69 % | ||||||
Total assets | $ 53,592,096 | $ 53,994,226 | $ 31,848,639 | $ 31,471,960 | $ 30,135,694 | (1) % | 78 % | ||||||
Liabilities: | |||||||||||||
Deposits | |||||||||||||
Non-interest bearing | $ 16,019,408 | $ 17,215,781 | $ 10,288,849 | $ 11,246,358 | $ 11,129,209 | (7) % | 44 % | ||||||
Interest bearing | 24,815,509 | 24,370,566 | 16,776,763 | 15,570,749 | 15,003,214 | 2 % | 65 % | ||||||
Total deposits | 40,834,917 | 41,586,347 | 27,065,612 | 26,817,107 | 26,132,423 | (2) % | 56 % | ||||||
Securities sold under agreements to repurchase | 294,914 | 271,047 | 308,769 | 383,569 | 527,961 | 9 % | (44) % | ||||||
Borrowings | 6,250,000 | 5,950,000 | 906,175 | 756,214 | 6,252 | 5 % | nm | ||||||
Junior subordinated debentures, at fair value | 312,872 | 297,721 | 323,639 | 325,744 | 321,268 | 5 % | (3) % | ||||||
Junior and other subordinated debentures, at amortized cost | 108,009 | 108,066 | 87,813 | 87,870 | 87,927 | 0 % | 23 % | ||||||
Operating lease liabilities | 132,099 | 140,648 | 91,694 | 95,512 | 101,352 | (6) % | 30 % | ||||||
Other liabilities | 831,097 | 755,674 | 585,111 | 588,430 | 440,235 | 10 % | 89 % | ||||||
Total liabilities | 48,763,908 | 49,109,503 | 29,368,813 | 29,054,446 | 27,617,418 | (1) % | 77 % | ||||||
Shareholders' equity: | |||||||||||||
Common stock | 5,792,792 | 5,788,553 | 3,450,493 | 3,448,007 | 3,445,531 | 0 % | 68 % | ||||||
Accumulated deficit | (545,842) | (603,696) | (543,803) | (580,933) | (619,108) | (10) % | (12) % | ||||||
Accumulated other comprehensive loss | (418,762) | (300,134) | (426,864) | (449,560) | (308,147) | 40 % | 36 % | ||||||
Total shareholders' equity | 4,828,188 | 4,884,723 | 2,479,826 | 2,417,514 | 2,518,276 | (1) % | 92 % | ||||||
Total liabilities and shareholders' equity | $ 53,592,096 | $ 53,994,226 | $ 31,848,639 | $ 31,471,960 | $ 30,135,694 | (1) % | 78 % | ||||||
Common shares outstanding at period end (2) | 208,514 | 208,429 | 129,321 | 129,320 | 129,318 | 0 % | 61 % | ||||||
Book value per common share (2) | $ 23.16 | $ 23.44 | $ 19.18 | $ 18.69 | $ 19.47 | (1) % | 19 % | ||||||
Tangible book value per common share (1),(2) | $ 15.02 | $ 15.12 | $ 19.14 | $ 18.65 | $ 19.42 | (1) % | (23) % | ||||||
Tangible equity - common (1),(2) | $ 3,132,192 | $ 3,152,266 | $ 2,475,081 | $ 2,411,750 | $ 2,511,487 | (1) % | 25 % | ||||||
Tangible common equity to tangible assets (1) | 6.04 % | 6.03 % | 7.77 % | 7.66 % | 8.34 % | 0.01 | (2.30) | ||||||
nm = not meaningful | |||||||||||||
(1) | See GAAP to Non-GAAP Reconciliation. |
(2) | Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958. |
Columbia Banking System, Inc. | ||||||||||||||
Financial Highlights | ||||||||||||||
(Unaudited) | ||||||||||||||
Quarter Ended | % Change | |||||||||||||
Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Seq. Quarter | Year over Year | ||||||||
Per Common Share Data: (5) | ||||||||||||||
Dividends (5) | $ 0.36 | $ 0.35 | $ 0.35 | $ 0.35 | $ 0.35 | 3 % | 3 % | |||||||
Book value (5) | $ 23.16 | $ 23.44 | $ 19.18 | $ 18.69 | $ 19.47 | (1) % | 19 % | |||||||
Tangible book value (1),(5) | $ 15.02 | $ 15.12 | $ 19.14 | $ 18.65 | $ 19.42 | (1) % | (23) % | |||||||
Tangible book value, ex accumulated other comprehensive income (1),(5) | $ 17.03 | $ 16.56 | $ 22.44 | $ 22.13 | $ 21.80 | 3 % | (22) % | |||||||
Performance Ratios: | ||||||||||||||
Efficiency ratio | 62.60 % | 79.71 % | 57.24 % | 56.07 % | 59.12 % | (17.11) | 3.48 | |||||||
Return on average assets ("ROAA") | 1.00 % | (0.14) % | 1.04 % | 1.09 % | 1.04 % | 1.14 | (0.04) | |||||||
Pre-provision net revenue ("PPNR") ROAA (1) | 1.46 % | 0.89 % | 1.82 % | 1.80 % | 1.64 % | 0.57 | (0.18) | |||||||
Return on average common equity | 10.84 % | (1.70) % | 13.50 % | 12.99 % | 12.20 % | 12.54 | (1.36) | |||||||
Return on average tangible common equity (1) | 16.63 % | (2.09) % | 13.53 % | 13.02 % | 12.23 % | 18.72 | 4.40 | |||||||
Performance Ratios - Operating: (1) | ||||||||||||||
Operating efficiency ratio (1) | 54.85 % | 53.46 % | 52.01 % | 51.72 % | 58.27 % | 1.39 | (3.42) | |||||||
Operating return on average assets (1) | 1.27 % | 0.74 % | 1.24 % | 1.33 % | 1.06 % | 0.53 | 0.21 | |||||||
Operating PPNR return on average assets (1) | 1.82 % | 2.01 % | 2.10 % | 2.12 % | 1.66 % | (0.19) | 0.16 | |||||||
Operating return on average common equity (1) | 13.77 % | 8.66 % | 16.14 % | 15.86 % | 12.46 % | 5.11 | 1.31 | |||||||
Operating return on average tangible common equity (1) | 21.13 % | 10.64 % | 16.18 % | 15.90 % | 12.49 % | 10.49 | 8.64 | |||||||
Average Balance Sheet Yields, Rates, & Ratios: | ||||||||||||||
Yield on loans and leases | 5.95 % | 5.55 % | 4.92 % | 4.41 % | 3.94 % | 0.40 | 2.01 | |||||||
Yield on earning assets (2) | 5.48 % | 5.19 % | 4.62 % | 4.10 % | 3.53 % | 0.29 | 1.95 | |||||||
Cost of interest bearing deposits | 1.64 % | 1.32 % | 0.77 % | 0.23 % | 0.11 % | 0.32 | 1.53 | |||||||
Cost of interest bearing liabilities | 2.45 % | 1.82 % | 1.05 % | 0.39 % | 0.20 % | 0.63 | 2.25 | |||||||
Cost of total deposits | 0.99 % | 0.80 % | 0.46 % | 0.14 % | 0.06 % | 0.19 | 0.93 | |||||||
Cost of total funding (3) | 1.61 % | 1.16 % | 0.65 % | 0.23 % | 0.12 % | 0.45 | 1.49 | |||||||
Net interest margin (2) | 3.93 % | 4.08 % | 4.01 % | 3.88 % | 3.41 % | (0.15) | 0.52 | |||||||
Average interest bearing cash / Average interest earning assets | 5.47 % | 4.33 % | 3.62 % | 3.04 % | 5.71 % | 1.14 | (0.24) | |||||||
Average loans and leases / Average interest earning assets | 75.18 % | 80.96 % | 85.32 % | 84.54 % | 80.91 % | (5.78) | (5.73) | |||||||
Average loans and leases / Average total deposits | 90.98 % | 93.01 % | 95.85 % | 93.55 % | 89.23 % | (2.03) | 1.75 | |||||||
Average non-interest bearing deposits / Average total deposits | 40.05 % | 39.55 % | 40.30 % | 42.29 % | 42.00 % | 0.50 | (1.95) | |||||||
Average total deposits / Average total funding (3) | 85.59 % | 91.36 % | 94.52 % | 96.34 % | 96.66 % | (5.77) | (11.07) | |||||||
Select Credit & Capital Ratios: | ||||||||||||||
Non-performing loans and leases to total loans and leases | 0.22 % | 0.20 % | 0.22 % | 0.20 % | 0.18 % | 0.02 | 0.04 | |||||||
Non-performing assets to total assets | 0.15 % | 0.14 % | 0.18 % | 0.16 % | 0.15 % | 0.01 | — | |||||||
Allowance for credit losses to loans and leases | 1.15 % | 1.18 % | 1.21 % | 1.16 % | 1.12 % | (0.03) | 0.03 | |||||||
Total risk-based capital ratio (4) | 11.1 % | 10.9 % | 13.7 % | 13.2 % | 13.5 % | 0.20 | (2.40) | |||||||
Common equity tier 1 risk-based capital ratio (4) | 9.1 % | 8.9 % | 11.0 % | 10.7 % | 11.0 % | 0.20 | (1.90) | |||||||
(1) | See GAAP to Non-GAAP Reconciliation. |
(2) | Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate. |
(3) | Total funding = Total deposits + Total borrowings. |
(4) | Estimated holding company ratios. |
(5) | Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958. |
Columbia Banking System, Inc. | ||||||
Financial Highlights | ||||||
(Unaudited) | ||||||
Six Months Ended | % Change | |||||
Jun 30, 2023 | Jun 30, 2022 | Year over Year | ||||
Per Common Share Data: (4) | ||||||
Dividends (4) | $ 0.71 | $ 0.70 | 1.43 % | |||
Performance Ratios: | ||||||
Efficiency ratio | 70.30 % | 59.07 % | 11.23 | |||
Return on average assets (ROAA) | 0.52 % | 1.12 % | (0.60) | |||
Pre-provision net revenue (PPNR) ROAA (1) | 1.22 % | 1.66 % | (0.44) | |||
Return on average common equity | 5.80 % | 12.92 % | (7.12) | |||
Return on average tangible common equity (1) | 8.09 % | 12.96 % | (4.87) | |||
Performance Ratios - Operating: (1) | ||||||
Operating efficiency ratio (1) | 54.24 % | 60.09 % | (5.85) | |||
Operating return on average assets (1) | 1.04 % | 1.04 % | — | |||
Operating PPNR return on average assets (1) | 1.90 % | 1.55 % | 0.35 | |||
Operating return on average common equity (1) | 11.72 % | 12.01 % | (0.29) | |||
Operating return on average tangible common equity (1) | 16.34 % | 12.05 % | 4.29 | |||
Average Balance Sheet Yields, Rates, & Ratios: | ||||||
Yield on loans and leases | 5.77 % | 3.86 % | 1.91 | |||
Yield on earning assets (2) | 5.35 % | 3.38 % | 1.97 | |||
Cost of interest bearing deposits | 1.50 % | 0.10 % | 1.40 | |||
Cost of interest bearing liabilities | 2.19 % | 0.19 % | 2.00 | |||
Cost of total deposits | 0.90 % | 0.06 % | 0.84 | |||
Cost of total funding (3) | 1.42 % | 0.11 % | 1.31 | |||
Net interest margin (2) | 3.99 % | 3.28 % | 0.71 | |||
Average interest bearing cash / Average interest earning assets | 4.99 % | 7.31 % | (2.32) | |||
Average loans and leases / Average interest earning assets | 77.64 % | 78.88 % | (1.24) | |||
Average loans and leases / Average total deposits | 91.87 % | 87.00 % | 4.87 | |||
Average non-interest bearing deposits / Average total deposits | 39.69 % | 41.68 % | (1.99) | |||
Average total deposits / Average total funding (3) | 88.03 % | 96.74 % | (8.71) | |||
(1) | See GAAP to Non-GAAP Reconciliation. |
(2) | Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate. |
(3) | Total funding = Total deposits + Total borrowings. |
(4) | Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958. |
Columbia Banking System, Inc. | |||||||||||||
Loan & Lease Portfolio Balances and Mix | |||||||||||||
(Unaudited) | |||||||||||||
Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | % Change | ||||||||
($ in thousands) | Amount | Amount | Amount | Amount | Amount | Seq. Quarter | Year over Year | ||||||
Loans and leases: | |||||||||||||
Commercial real estate: | |||||||||||||
Non-owner occupied term, net | $ 6,434,673 | $ 6,353,550 | $ 3,894,840 | $ 3,846,426 | $ 3,798,242 | 1 % | 69 % | ||||||
Owner occupied term, net | 5,254,401 | 5,156,848 | 2,567,761 | 2,549,761 | 2,497,553 | 2 % | 110 % | ||||||
Multifamily, net | 5,622,875 | 5,590,587 | 5,285,791 | 5,090,661 | 4,768,273 | 1 % | 18 % | ||||||
Construction & development, net | 1,528,924 | 1,467,561 | 1,077,346 | 1,036,931 | 1,017,297 | 4 % | 50 % | ||||||
Residential development, net | 388,641 | 440,667 | 200,838 | 205,935 | 194,909 | (12) % | 99 % | ||||||
Commercial: | |||||||||||||
Term, net | 5,449,787 | 5,906,774 | 3,029,547 | 3,003,424 | 2,904,861 | (8) % | 88 % | ||||||
Lines of credit & other, net | 2,268,790 | 2,184,762 | 960,054 | 914,507 | 920,604 | 4 % | 146 % | ||||||
Leases & equipment finance, net | 1,740,037 | 1,746,267 | 1,706,172 | 1,669,817 | 1,576,144 | 0 % | 10 % | ||||||
Residential: | |||||||||||||
Mortgage, net | 6,272,898 | 6,187,964 | 5,647,035 | 5,470,624 | 5,168,457 | 1 % | 21 % | ||||||
Home equity loans & lines, net | 1,898,958 | 1,870,002 | 1,631,965 | 1,565,094 | 1,415,722 | 2 % | 34 % | ||||||
Consumer & other, net | 189,315 | 186,298 | 154,632 | 154,771 | 170,616 | 2 % | 11 % | ||||||
Total loans and leases, net of deferred fees and costs | $ 37,049,299 | $ 37,091,280 | $ 26,155,981 | $ 25,507,951 | $ 24,432,678 | 0 % | 52 % | ||||||
Loans and leases mix: | |||||||||||||
Commercial real estate: | |||||||||||||
Non-owner occupied term, net | 17 % | 16 % | 15 % | 15 % | 15 % | ||||||||
Owner occupied term, net | 14 % | 14 % | 10 % | 10 % | 10 % | ||||||||
Multifamily, net | 15 % | 15 % | 20 % | 20 % | 20 % | ||||||||
Construction & development, net | 4 % | 4 % | 4 % | 4 % | 4 % | ||||||||
Residential development, net | 1 % | 1 % | 1 % | 1 % | 1 % | ||||||||
Commercial: | |||||||||||||
Term, net | 15 % | 16 % | 12 % | 12 % | 12 % | ||||||||
Lines of credit & other, net | 6 % | 6 % | 4 % | 4 % | 4 % | ||||||||
Leases & equipment finance, net | 5 % | 5 % | 6 % | 6 % | 6 % | ||||||||
Residential: | |||||||||||||
Mortgage, net | 17 % | 17 % | 21 % | 21 % | 21 % | ||||||||
Home equity loans & lines, net | 5 % | 5 % | 6 % | 6 % | 6 % | ||||||||
Consumer & other, net | 1 % | 1 % | 1 % | 1 % | 1 % | ||||||||
Total | 100 % | 100 % | 100 % | 100 % | 100 % | ||||||||
Columbia Banking System, Inc. | |||||||||||||
Deposit Portfolio Balances and Mix | |||||||||||||
(Unaudited) | |||||||||||||
Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | % Change | ||||||||
($ in thousands) | Amount | Amount | Amount | Amount | Amount | Seq. Quarter | Year over Year | ||||||
Deposits: | |||||||||||||
Demand, non-interest bearing | $ 16,019,408 | $ 17,215,781 | $ 10,288,849 | $ 11,246,358 | $ 11,129,209 | (7) % | 44 % | ||||||
Demand, interest bearing | 6,300,082 | 5,900,462 | 4,080,469 | 3,903,746 | 3,723,650 | 7 % | 69 % | ||||||
Money market | 10,115,908 | 10,681,422 | 7,721,011 | 7,601,506 | 7,284,641 | (5) % | 39 % | ||||||
Savings | 3,171,714 | 3,469,112 | 2,265,052 | 2,455,917 | 2,446,876 | (9) % | 30 % | ||||||
Time | 5,227,805 | 4,319,570 | 2,710,231 | 1,609,580 | 1,548,047 | 21 % | 238 % | ||||||
Total | $ 40,834,917 | $ 41,586,347 | $ 27,065,612 | $ 26,817,107 | $ 26,132,423 | (2) % | 56 % | ||||||
Total core deposits (1) | $ 37,639,368 | $ 39,155,298 | $ 25,616,010 | $ 26,292,548 | $ 25,619,500 | (4) % | 47 % | ||||||
Deposit mix: | |||||||||||||
Demand, non-interest bearing | 39 % | 41 % | 38 % | 42 % | 43 % | ||||||||
Demand, interest bearing | 15 % | 14 % | 15 % | 15 % | 14 % | ||||||||
Money market | 25 % | 26 % | 29 % | 28 % | 28 % | ||||||||
Savings | 8 % | 9 % | 8 % | 9 % | 9 % | ||||||||
Time | 13 % | 10 % | 10 % | 6 % | 6 % | ||||||||
Total | 100 % | 100 % | 100 % | 100 % | 100 % | ||||||||
(1) | Core deposits are defined as total deposits less time deposits greater than $250,000 and all brokered deposits. |
Columbia Banking System, Inc. | ||||||||||||||
Credit Quality – Non-performing Assets | ||||||||||||||
(Unaudited) | ||||||||||||||
Quarter Ended | % Change | |||||||||||||
($ in thousands) | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Seq. Quarter | Year over Year | |||||||
Non-performing assets: | ||||||||||||||
Loans and leases on non-accrual status: | ||||||||||||||
Commercial real estate, net | $ 10,994 | $ 15,612 | $ 5,011 | $ 5,403 | $ 5,514 | (30) % | 99 % | |||||||
Commercial, net | 39,316 | 42,301 | 25,691 | 18,652 | 12,645 | (7) % | 211 % | |||||||
Residential, net | — | — | — | — | — | nm | nm | |||||||
Consumer & other, net | — | — | — | — | — | nm | nm | |||||||
Total loans and leases on non-accrual status | 50,310 | 57,913 | 30,702 | 24,055 | 18,159 | (13) % | 177 % | |||||||
Loans and leases past due 90+ days and accruing (1): | ||||||||||||||
Commercial real estate, net | 184 | 1 | 1 | 1 | 23 | nm | nm | |||||||
Commercial, net | 7,720 | 151 | 7,909 | 5,143 | 3,311 | nm | 133 % | |||||||
Residential, net (1) | 21,370 | 17,423 | 19,894 | 21,411 | 22,340 | 23 % | (4) % | |||||||
Consumer & other, net | 399 | 140 | 134 | 152 | 196 | 185 % | 104 % | |||||||
Total loans and leases past due 90+ days and accruing (1) | 29,673 | 17,715 | 27,938 | 26,707 | 25,870 | 68 % | 15 % | |||||||
Total non-performing loans and leases | 79,983 | 75,628 | 58,640 | 50,762 | 44,029 | 6 % | 82 % | |||||||
Other real estate owned | 278 | 409 | 203 | — | 1,868 | (32) % | (85) % | |||||||
Total non-performing assets | $ 80,261 | $ 76,037 | $ 58,843 | $ 50,762 | $ 45,897 | 6 % | 75 % | |||||||
Loans and leases past due 31-89 days | $ 73,376 | $ 78,641 | $ 64,893 | $ 53,538 | $ 34,659 | (7) % | 112 % | |||||||
Loans and leases past due 31-89 days to total loans and leases | 0.20 % | 0.21 % | 0.25 % | 0.21 % | 0.14 % | (0.01) | 0.06 | |||||||
Non-performing loans and leases to total loans and leases (1) | 0.22 % | 0.20 % | 0.22 % | 0.20 % | 0.18 % | 0.02 | 0.04 | |||||||
Non-performing assets to total assets (1) | 0.15 % | 0.14 % | 0.18 % | 0.16 % | 0.15 % | 0.01 | — | |||||||
nm = not meaningful | ||||||||||||||
(1) | Excludes certain mortgage loans guaranteed by Ginnie Mae, which Columbia has the unilateral right to repurchase but has not done so, totaling $1.6 million, $5.4 million, $6.6 million, $1.0 million, and $356,000 at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively. |
Columbia Banking System, Inc. | ||||||||||||||
Credit Quality – Allowance for Credit Losses | ||||||||||||||
(Unaudited) | ||||||||||||||
Quarter Ended | % Change | |||||||||||||
($ in thousands) | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Seq. Quarter | Year over Year | |||||||
Allowance for credit losses on loans and leases (ACLLL) | ||||||||||||||
Balance, beginning of period | $ 417,464 | $ 301,135 | $ 283,065 | $ 261,111 | $ 248,564 | 39 % | 68 % | |||||||
Initial ACL recorded for PCD loans acquired during the period | — | 26,492 | — | — | — | (100) % | nm | |||||||
Provision for credit losses on loans and leases (1) | 15,216 | 106,498 | 30,580 | 28,542 | 18,787 | (86) % | (19) % | |||||||
Charge-offs | ||||||||||||||
Commercial real estate, net | (174) | — | (128) | — | (8) | nm | nm | |||||||
Commercial, net | (32,036) | (19,248) | (14,721) | (9,459) | (9,035) | 66 % | 255 % | |||||||
Residential, net | (4) | (248) | (53) | (4) | — | (98) % | nm | |||||||
Consumer & other, net | (1,264) | (773) | (906) | (929) | (836) | 64 % | 51 % | |||||||
Total charge-offs | (33,478) | (20,269) | (15,808) | (10,392) | (9,879) | 65 % | 239 % | |||||||
Recoveries | ||||||||||||||
Commercial real estate, net | 209 | 58 | 163 | 123 | 73 | 260 % | 186 % | |||||||
Commercial, net | 4,511 | 3,058 | 2,708 | 2,842 | 2,934 | 48 % | 54 % | |||||||
Residential, net | 63 | 123 | 24 | 249 | 216 | (49) % | (71) % | |||||||
Consumer & other, net | 618 | 369 | 403 | 590 | 416 | 67 % | 49 % | |||||||
Total recoveries | 5,401 | 3,608 | 3,298 | 3,804 | 3,639 | 50 % | 48 % | |||||||
Net (charge-offs) recoveries | ||||||||||||||
Commercial real estate, net | 35 | 58 | 35 | 123 | 65 | (40) % | (46) % | |||||||
Commercial, net | (27,525) | (16,190) | (12,013) | (6,617) | (6,101) | 70 % | 351 % | |||||||
Residential, net | 59 | (125) | (29) | 245 | 216 | nm | (73) % | |||||||
Consumer & other, net | (646) | (404) | (503) | (339) | (420) | 60 % | 54 % | |||||||
Total net charge-offs | (28,077) | (16,661) | (12,510) | (6,588) | (6,240) | 69 % | 350 % | |||||||
Balance, end of period | $ 404,603 | $ 417,464 | $ 301,135 | $ 283,065 | $ 261,111 | (3) % | 55 % | |||||||
Reserve for unfunded commitments | ||||||||||||||
Balance, beginning of period | $ 19,029 | $ 14,221 | $ 11,853 | $ 12,823 | $ 12,918 | 34 % | 47 % | |||||||
Initial ACL recorded for unfunded commitments acquired during the period | — | 5,767 | — | — | — | (100) % | nm | |||||||
Provision (recapture) for credit losses on unfunded commitments | 798 | (959) | 2,368 | (970) | (95) | nm | nm | |||||||
Balance, end of period | 19,827 | 19,029 | 14,221 | 11,853 | 12,823 | 4 % | 55 % | |||||||
Total Allowance for credit losses (ACL) | $ 424,430 | $ 436,493 | $ 315,356 | $ 294,918 | $ 273,934 | (3) % | 55 % | |||||||
Net charge-offs to average loans and leases (annualized) | 0.30 % | 0.23 % | 0.19 % | 0.11 % | 0.11 % | 0.07 | 0.19 | |||||||
Recoveries to gross charge-offs | 16.13 % | 17.80 % | 20.86 % | 36.61 % | 36.84 % | (1.67) | (20.71) | |||||||
ACLLL to loans and leases | 1.09 % | 1.13 % | 1.15 % | 1.11 % | 1.07 % | (0.04) | 0.02 | |||||||
ACL to loans and leases | 1.15 % | 1.18 % | 1.21 % | 1.16 % | 1.12 % | (0.03) | 0.03 | |||||||
nm = not meaningful | ||||||||||||||
(1) | For the quarter ended March 31, 2023, the provision for credit losses on loans and leases includes $88.4 million initial provision related to non-PCD loans acquired during the period. |
Columbia Banking System, Inc. | |||||||
Credit Quality – Allowance for Credit Losses | |||||||
(Unaudited) | |||||||
Six Months Ended | % Change | ||||||
($ in thousands) | Jun 30, 2023 | Jun 30, 2022 | Year over Year | ||||
Allowance for credit losses on loans and leases (ACLLL) | |||||||
Balance, beginning of period | $ 301,135 | $ 248,412 | 21 % | ||||
Initial ACL recorded for PCD loans acquired during the period | 26,492 | — | nm | ||||
Provision for credit losses on loans and leases (1) | 121,714 | 24,483 | 397 % | ||||
Charge-offs | |||||||
Commercial real estate, net | (174) | (8) | nm | ||||
Commercial, net | (51,284) | (16,893) | 204 % | ||||
Residential, net | (252) | (167) | 51 % | ||||
Consumer & other, net | (2,037) | (1,721) | 18 % | ||||
Total charge-offs | (53,747) | (18,789) | 186 % | ||||
Recoveries | |||||||
Commercial real estate, net | 267 | 98 | 172 % | ||||
Commercial, net | 7,569 | 5,479 | 38 % | ||||
Residential, net | 186 | 389 | (52) % | ||||
Consumer & other, net | 987 | 1,039 | (5) % | ||||
Total recoveries | 9,009 | 7,005 | 29 % | ||||
Net (charge-offs) recoveries | |||||||
Commercial real estate, net | 93 | 90 | 3 % | ||||
Commercial, net | (43,715) | (11,414) | 283 % | ||||
Residential, net | (66) | 222 | (130) % | ||||
Consumer & other, net | (1,050) | (682) | 54 % | ||||
Total net charge-offs | (44,738) | (11,784) | 280 % | ||||
Balance, end of period | $ 404,603 | $ 261,111 | 55 % | ||||
Reserve for unfunded commitments | |||||||
Balance, beginning of period | $ 14,221 | $ 12,767 | 11 % | ||||
Initial ACL recorded for unfunded commitments acquired during the period | 5,767 | — | nm | ||||
(Recapture) provision for credit losses on unfunded commitments | (161) | 56 | (388) % | ||||
Balance, end of period | 19,827 | 12,823 | 55 % | ||||
Total Allowance for credit losses (ACL) | $ 424,430 | $ 273,934 | 55 % | ||||
Net charge-offs to average loans and leases (annualized) | 0.27 % | 0.10 % | 0.17 | ||||
Recoveries to gross charge-offs | 16.76 % | 37.28 % | (20.52) | ||||
nm = not meaningful | |||||||
(1) | For the six months ended June 30, 2023, the provision for credit losses on loans and leases includes $88.4 million initial provision related to non-PCD loans acquired during the period. |
Columbia Banking System, Inc. | |||||||||||||||||
Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Quarter Ended | |||||||||||||||||
June 30, 2023 | March 31, 2023 | June 30, 2022 | |||||||||||||||
($ in thousands) | Average Balance | Interest Income or Expense | Average Yields or Rates | Average Balance | Interest Income or Expense | Average Yields or Rates | Average Balance | Interest Income or Expense | Average Yields or Rates | ||||||||
INTEREST-EARNING ASSETS: | |||||||||||||||||
Loans held for sale | $ 46,794 | $ 682 | 5.83 % | $ 54,008 | $ 799 | 5.92 % | $ 264,320 | $ 2,742 | 4.15 % | ||||||||
Loans and leases (1) | 37,169,315 | 551,997 | 5.95 % | 29,998,630 | 412,726 | 5.55 % | 23,550,796 | 231,932 | 3.94 % | ||||||||
Taxable securities | 8,656,147 | 81,617 | 3.77 % | 4,960,966 | 40,448 | 3.26 % | 3,410,091 | 17,340 | 2.03 % | ||||||||
Non-taxable securities (2) | 865,278 | 8,010 | 3.70 % | 437,020 | 4,068 | 3.72 % | 220,327 | 1,721 | 3.13 % | ||||||||
Temporary investments and interest-bearing cash | 2,704,984 | 34,616 | 5.13 % | 1,605,081 | 18,581 | 4.69 % | 1,663,454 | 2,919 | 0.70 % | ||||||||
Total interest-earning assets | 49,442,518 | $ 676,922 | 5.48 % | 37,055,705 | $ 476,622 | 5.19 % | 29,108,988 | $ 256,654 | 3.53 % | ||||||||
Goodwill and other intangible assets | 1,718,705 | 623,042 | 7,379 | ||||||||||||||
Other assets | 2,379,351 | 1,747,228 | 1,240,536 | ||||||||||||||
Total assets | $ 53,540,574 | $ 39,425,975 | $ 30,356,903 | ||||||||||||||
INTEREST-BEARING LIABILITIES: | |||||||||||||||||
Interest-bearing demand deposits | $ 6,131,117 | $ 17,277 | 1.15 % | $ 4,759,251 | $ 9,815 | 0.84 % | $ 3,896,553 | $ 610 | 0.06 % | ||||||||
Money market deposits | 10,362,495 | 41,703 | 1.60 % | 8,845,784 | 32,238 | 1.48 % | 7,366,987 | 1,717 | 0.09 % | ||||||||
Savings deposits | 3,297,138 | 877 | 0.11 % | 2,686,388 | 556 | 0.08 % | 2,426,124 | 199 | 0.03 % | ||||||||
Time deposits | 4,703,967 | 40,551 | 3.46 % | 3,205,128 | 21,004 | 2.66 % | 1,618,394 | 1,489 | 0.37 % | ||||||||
Total interest-bearing deposits | 24,494,717 | 100,408 | 1.64 % | 19,496,551 | 63,613 | 1.32 % | 15,308,058 | 4,015 | 0.11 % | ||||||||
Repurchase agreements and federal funds purchased | 284,347 | 1,071 | 1.51 % | 281,032 | 406 | 0.59 % | 512,641 | 66 | 0.05 % | ||||||||
Borrowings | 6,187,363 | 81,004 | 5.25 % | 2,352,715 | 28,764 | 4.96 % | 6,273 | 50 | 3.21 % | ||||||||
Junior and other subordinated debentures | 405,989 | 9,271 | 9.16 % | 417,966 | 8,470 | 8.22 % | 393,964 | 4,001 | 4.07 % | ||||||||
Total interest-bearing liabilities | 31,372,416 | $ 191,754 | 2.45 % | 22,548,264 | $ 101,253 | 1.82 % | 16,220,936 | $ 8,132 | 0.20 % | ||||||||
Non-interest-bearing deposits | 16,361,541 | 12,755,080 | 11,086,376 | ||||||||||||||
Other liabilities | 871,378 | 772,870 | 464,755 | ||||||||||||||
Total liabilities | 48,605,335 | 36,076,214 | 27,772,067 | ||||||||||||||
Common equity | 4,935,239 | 3,349,761 | 2,584,836 | ||||||||||||||
Total liabilities and shareholders' equity | $ 53,540,574 | $ 39,425,975 | $ 30,356,903 | ||||||||||||||
NET INTEREST INCOME | $ 485,168 | $ 375,369 | $ 248,522 | ||||||||||||||
NET INTEREST SPREAD | 3.03 % | 3.37 % | 3.33 % | ||||||||||||||
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2) | 3.93 % | 4.08 % | 3.41 % | ||||||||||||||
(1) | Non-accrual loans and leases are included in the average balance. |
(2) | Tax-exempt income has been adjusted to a tax equivalent basis at a 21% tax rate. The amount of such adjustment was an addition to recorded income of approximately $1.2 million for the three months ended June 30, 2023, as compared to $671,000 for the three months ended March 31, 2023 and $352,000 for the three months ended June 30, 2022. |
Columbia Banking System, Inc. | |||||||||||
Average Rates and Balances | |||||||||||
(Unaudited) | |||||||||||
Six Months Ended | |||||||||||
June 30, 2023 | June 30, 2022 | ||||||||||
($ in thousands) | Average Balance | Interest Income or Expense | Average Yields or Rates | Average Balance | InterestIncome or Expense | Average Yields or Rates | |||||
INTEREST-EARNING ASSETS: | |||||||||||
Loans held for sale | $ 50,381 | $ 1,481 | 5.88 % | $ 275,253 | $ 5,004 | 3.64 % | |||||
Loans and leases (1) | 33,603,781 | 964,723 | 5.77 % | 23,061,173 | 444,074 | 3.86 % | |||||
Taxable securities | 6,818,764 | 122,065 | 3.58 % | 3,533,930 | 36,151 | 2.05 % | |||||
Non-taxable securities (2) | 652,332 | 12,078 | 3.70 % | 227,218 | 3,447 | 3.03 % | |||||
Temporary investments and interest-bearing cash | 2,158,071 | 53,197 | 4.97 % | 2,138,352 | 4,272 | 0.40 % | |||||
Total interest-earning assets | 43,283,329 | $ 1,153,544 | 5.35 % | 29,235,926 | $ 492,948 | 3.38 % | |||||
Goodwill and other intangible assets | 1,173,900 | 7,890 | |||||||||
Other assets | 2,065,036 | 1,232,496 | |||||||||
Total assets | $ 46,522,265 | $ 30,476,312 | |||||||||
INTEREST-BEARING LIABILITIES: | |||||||||||
Interest-bearing demand deposits | $ 5,448,974 | $ 27,092 | 1.00 % | $ 3,854,596 | $ 1,108 | 0.06 % | |||||
Money market deposits | 9,657,738 | 73,941 | 1.54 % | 7,503,142 | 3,125 | 0.08 % | |||||
Savings deposits | 2,993,450 | 1,433 | 0.10 % | 2,416,096 | 404 | 0.03 % | |||||
Time deposits | 3,958,688 | 61,555 | 3.14 % | 1,685,763 | 3,294 | 0.39 % | |||||
Total interest-bearing deposits | 22,058,850 | 164,021 | 1.50 % | 15,459,597 | 7,931 | 0.10 % | |||||
Repurchase agreements and federal funds purchased | 282,699 | 1,477 | 1.05 % | 499,664 | 129 | 0.05 % | |||||
Borrowings | 4,280,632 | 109,768 | 5.17 % | 6,293 | 99 | 3.18 % | |||||
Junior and other subordinated debentures | 411,944 | 17,741 | 8.68 % | 387,510 | 7,150 | 3.72 % | |||||
Total interest-bearing liabilities | 27,034,125 | $ 293,007 | 2.19 % | 16,353,064 | $ 15,309 | 0.19 % | |||||
Non-interest-bearing deposits | 14,518,864 | 11,046,925 | |||||||||
Other liabilities | 822,396 | 426,917 | |||||||||
Total liabilities | 42,375,385 | 27,826,906 | |||||||||
Common equity | 4,146,880 | 2,649,406 | |||||||||
Total liabilities and shareholders' equity | $ 46,522,265 | $ 30,476,312 | |||||||||
NET INTEREST INCOME | $ 860,537 | $ 477,639 | |||||||||
NET INTEREST SPREAD | 3.16 % | 3.19 % | |||||||||
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2) | 3.99 % | 3.28 % | |||||||||
(1) | Non-accrual loans and leases are included in the average balance. |
(2) | Tax-exempt income has been adjusted to a tax equivalent basis at a 21% tax rate. The amount of such adjustment was an addition to recorded income of approximately $1.9 million for the six months ended June 30, 2023, as compared to $706,000 for the same period in 2022. |
Columbia Banking System, Inc. | |||||||||||||
Residential Mortgage Banking Activity | |||||||||||||
(Unaudited) | |||||||||||||
Quarter Ended | % Change | ||||||||||||
($ in thousands) | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Seq. Quarter | Year over Year | ||||||
Residential mortgage banking revenue: | |||||||||||||
Origination and sale | $ 3,166 | $ 3,587 | $ 4,252 | $ 10,515 | $ 15,101 | (12) % | (79) % | ||||||
Servicing | 9,167 | 9,397 | 9,184 | 9,529 | 9,505 | (2) % | (4) % | ||||||
Change in fair value of MSR asset: | |||||||||||||
Changes due to collection/realization of expected cash flows over time | (4,797) | (4,881) | (4,986) | (4,978) | (4,961) | (2) % | (3) % | ||||||
Changes due to valuation inputs or assumptions | (2,242) | (2,937) | (9,914) | 16,403 | 10,899 | (24) % | (121) % | ||||||
MSR hedge (loss) gain | (7,636) | 2,650 | (348) | (14,128) | — | (388) % | nm | ||||||
Total | $ (2,342) | $ 7,816 | $ (1,812) | $ 17,341 | $ 30,544 | (130) % | (108) % | ||||||
Closed loan volume for-sale | $ 119,476 | $ 131,726 | $ 216,833 | $ 396,979 | $ 576,532 | (9) % | (79) % | ||||||
Gain on sale margin | 2.65 % | 2.72 % | 1.96 % | 2.65 % | 2.62 % | (0.07) | 0.03 | ||||||
Residential mortgage servicing rights: | |||||||||||||
Balance, beginning of period | $ 178,800 | $ 185,017 | $ 196,177 | $ 179,558 | $ 165,807 | (3) % | 8 % | ||||||
Additions for new MSR capitalized | 1,168 | 1,601 | 3,740 | 5,194 | 7,813 | (27) % | (85) % | ||||||
Change in fair value of MSR asset: | |||||||||||||
Changes due to collection/realization of expected cash flows over time | (4,797) | (4,881) | (4,986) | (4,978) | (4,961) | (2) % | (3) % | ||||||
Changes due to valuation inputs or assumptions | (2,242) | (2,937) | (9,914) | 16,403 | 10,899 | (24) % | (121) % | ||||||
Balance, end of period | $ 172,929 | $ 178,800 | $ 185,017 | $ 196,177 | $ 179,558 | (3) % | (4) % | ||||||
Residential mortgage loans serviced for others | $ 12,723,932 | $ 12,914,046 | $ 13,020,189 | $ 12,997,911 | $ 12,932,747 | (1) % | (2) % | ||||||
MSR as % of serviced portfolio | 1.36 % | 1.38 % | 1.42 % | 1.51 % | 1.39 % | (0.02) | (0.03) | ||||||
nm = not meaningful | |||||||||||||
Columbia Banking System, Inc. | |||||
Residential Mortgage Banking Activity | |||||
(Unaudited) | |||||
Six Months Ended | % Change | ||||
($ in thousands) | Jun 30, 2023 | Jun 30, 2022 | Year over Year | ||
Residential mortgage banking revenue: | |||||
Origination and sale | $ 6,753 | $ 31,945 | (79) % | ||
Servicing | 18,564 | 18,645 | 0 % | ||
Change in fair value of MSR asset: | |||||
Changes due to collection/realization of expected cash flows over time | (9,678) | (10,308) | (6) % | ||
Changes due to valuation inputs or assumptions | (5,179) | 51,048 | (110) % | ||
MSR hedge loss | (4,986) | — | nm | ||
Total | $ 5,474 | $ 91,330 | (94) % | ||
Closed loan volume for-sale | $ 251,202 | $ 1,225,654 | (80) % | ||
Gain on sale margin | 2.69 % | 2.61 % | 0.08 | ||
Residential mortgage servicing rights: | |||||
Balance, beginning of period | $ 185,017 | $ 123,615 | 50 % | ||
Additions for new MSR capitalized | 2,769 | 15,203 | (82) % | ||
Change in fair value of MSR asset: | |||||
Changes due to collection/realization of expected cash flows over time | (9,678) | (10,308) | (6) % | ||
Changes due to valuation inputs or assumptions | (5,179) | 51,048 | (110) % | ||
Balance, end of period | $ 172,929 | $ 179,558 | (4) % | ||
nm = not meaningful | |||||
Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. The company believes presenting certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends, and our financial position. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitution for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
Columbia Banking System, Inc. | |||||||||||||||
GAAP to Non-GAAP Reconciliation | |||||||||||||||
(Unaudited) | |||||||||||||||
Quarter Ended | % Change | ||||||||||||||
($ in thousands, except per share data) | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Seq. Quarter | Year over Year | ||||||||
Total shareholders' equity | a | $ 4,828,188 | $ 4,884,723 | $ 2,479,826 | $ 2,417,514 | $ 2,518,276 | (1) % | 92 % | |||||||
Less: Goodwill | 1,029,234 | 1,030,142 | — | — | — | — % | nm | ||||||||
Less: Other intangible assets, net | 666,762 | 702,315 | 4,745 | 5,764 | 6,789 | (5) % | nm | ||||||||
Tangible common shareholders' equity | b | $ 3,132,192 | $ 3,152,266 | $ 2,475,081 | $ 2,411,750 | $ 2,511,487 | (1) % | 25 % | |||||||
Less: Accumulated other comprehensive (loss) income (AOCI) | $ (418,762) | (300,134) | (426,864) | (449,560) | (308,147) | 40 % | 36 % | ||||||||
Tangible common shareholders' equity, ex AOCI | c | $ 3,550,954 | $ 3,452,400 | $ 2,901,945 | $ 2,861,310 | $ 2,819,634 | 3 % | 26 % | |||||||
Total assets | d | $ 53,592,096 | $ 53,994,226 | $ 31,848,639 | $ 31,471,960 | $ 30,135,694 | (1) % | 78 % | |||||||
Less: Goodwill | 1,029,234 | 1,030,142 | — | — | — | 0 % | nm | ||||||||
Less: Other intangible assets, net | 666,762 | 702,315 | 4,745 | 5,764 | 6,789 | (5) % | nm | ||||||||
Tangible assets | e | $ 51,896,100 | $ 52,261,769 | $ 31,843,894 | $ 31,466,196 | $ 30,128,905 | (1) % | 72 % | |||||||
Common shares outstanding at period end (1) | f | 208,514 | 208,429 | 129,321 | 129,320 | 129,318 | 0 % | 61 % | |||||||
Total shareholders' equity to total assets ratio | a / d | 9.01 % | 9.05 % | 7.79 % | 7.68 % | 8.36 % | (0.04) | 0.65 | |||||||
Tangible common equity ratio | b / e | 6.04 % | 6.03 % | 7.77 % | 7.66 % | 8.34 % | 0.01 | (2.30) | |||||||
Tangible common equity ratio, ex AOCI | c / e | 6.84 % | 6.61 % | 9.11 % | 9.09 % | 9.36 % | 0.23 | (2.52) | |||||||
Book value per common share (1) | a / f | $ 23.16 | $ 23.44 | $ 19.18 | $ 18.69 | $ 19.47 | (1) % | 19 % | |||||||
Tangible book value per common share (1) | b / f | $ 15.02 | $ 15.12 | $ 19.14 | $ 18.65 | $ 19.42 | (1) % | (23) % | |||||||
Tangible book value per common share, ex AOCI (1) | c / f | $ 17.03 | $ 16.56 | $ 22.44 | $ 22.13 | $ 21.80 | 3 % | (22) % | |||||||
nm = not meaningful | |||||||||||||||
(1) | Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958. |
Columbia Banking System, Inc. | |||||||||||||||
GAAP to Non-GAAP Reconciliation - Continued | |||||||||||||||
(Unaudited) | |||||||||||||||
Quarter Ended | % Change | ||||||||||||||
($ in thousands) | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Seq. Quarter | Year over Year | ||||||||
Non-Interest Income Adjustments | |||||||||||||||
(Loss) gain on equity securities, net | $ (697) | $ 2,416 | $ 284 | $ (2,647) | $ (2,075) | (129) % | (66) % | ||||||||
Gain (loss) on swap derivatives | 1,288 | (3,543) | (2,329) | 4,194 | 7,337 | nm | (82) % | ||||||||
Change in fair value of certain loans held for investment | (6,965) | 9,488 | 4,192 | (26,397) | (15,210) | (173) % | (54) % | ||||||||
Change in fair value of MSR due to valuation inputs or assumptions | (2,242) | (2,937) | (9,914) | 16,403 | 10,899 | (24) % | (121) % | ||||||||
MSR hedge (loss) gain | (7,636) | 2,650 | (348) | (14,128) | — | (388) % | nm | ||||||||
Total non-interest income adjustments | a | $ (16,252) | $ 8,074 | $ (8,115) | $ (22,575) | $ 951 | (301) % | nm | |||||||
Non-Interest Expense Adjustments | |||||||||||||||
Merger related expenses | $ 29,649 | $ 115,898 | $ 11,637 | $ 769 | $ 2,672 | (74) % | nm | ||||||||
Exit and disposal costs | 2,119 | 1,291 | 1,966 | 1,364 | 442 | 64 % | 379 % | ||||||||
Total non-interest expense adjustments | b | $ 31,768 | $ 117,189 | $ 13,603 | $ 2,133 | $ 3,114 | (73) % | nm | |||||||
Net interest income (1) | c | $ 485,168 | $ 375,369 | $ 305,762 | $ 287,933 | $ 248,522 | 29 % | 95 % | |||||||
Non-interest income (GAAP) | d | $ 39,678 | $ 54,735 | $ 34,879 | $ 29,445 | $ 55,235 | (28) % | (28) % | |||||||
Less: Non-interest income adjustments | a | 16,252 | (8,074) | 8,115 | 22,575 | (951) | nm | nm | |||||||
Operating non-interest income (non-GAAP) | e | $ 55,930 | $ 46,661 | $ 42,994 | $ 52,020 | $ 54,284 | 20 % | 3 % | |||||||
Revenue (GAAP) (1) | f=c+d | $ 524,846 | $ 430,104 | $ 340,641 | $ 317,378 | $ 303,757 | 22 % | 73 % | |||||||
Operating revenue (non-GAAP) (1) | g=c+e | $ 541,098 | $ 422,030 | $ 348,756 | $ 339,953 | $ 302,806 | 28 % | 79 % | |||||||
Non-interest expense (GAAP) | h | $ 328,559 | $ 342,818 | $ 194,982 | $ 177,964 | $ 179,574 | (4) % | 83 % | |||||||
Less: Non-interest expense adjustments | b | (31,768) | (117,189) | (13,603) | (2,133) | (3,114) | (73) % | nm | |||||||
Operating non-interest expense (non-GAAP) | i | $ 296,791 | $ 225,629 | $ 181,379 | $ 175,831 | $ 176,460 | 32 % | 68 % | |||||||
Net income (loss) (GAAP) | j | $ 133,377 | $ (14,038) | $ 82,964 | $ 84,040 | $ 78,591 | nm | 70 % | |||||||
Provision (benefit) for income taxes | 45,703 | (4,886) | 29,464 | 27,473 | 26,548 | nm | 72 % | ||||||||
Income (loss) before provision for income taxes | 179,080 | (18,924) | 112,428 | 111,513 | 105,139 | nm | 70 % | ||||||||
Provision for credit losses | 16,014 | 105,539 | 32,948 | 27,572 | 18,692 | (85) % | (14) % | ||||||||
Pre-provision net revenue (PPNR) (non-GAAP) | k | 195,094 | 86,615 | 145,376 | 139,085 | 123,831 | 125 % | 58 % | |||||||
Less: Non-interest income adjustments | a | 16,252 | (8,074) | 8,115 | 22,575 | (951) | nm | nm | |||||||
Add: Non-interest expense adjustments | b | 31,768 | 117,189 | 13,603 | 2,133 | 3,114 | (73) % | nm | |||||||
Operating PPNR (non-GAAP) | l | $ 243,114 | $ 195,730 | $ 167,094 | $ 163,793 | $ 125,994 | 24 % | 93 % | |||||||
Net income (loss) (GAAP) | j | $ 133,377 | $ (14,038) | $ 82,964 | $ 84,040 | $ 78,591 | nm | 70 % | |||||||
Less: Non-interest income adjustments | a | 16,252 | (8,074) | 8,115 | 22,575 | (951) | nm | nm | |||||||
Add: Non-interest expense adjustments | b | 31,768 | 117,189 | 13,603 | 2,133 | 3,114 | (73) % | nm | |||||||
Tax effect of adjustments | (11,981) | (23,565) | (5,459) | (6,116) | (480) | (49) % | nm | ||||||||
Operating net income (non-GAAP) | m | $ 169,416 | $ 71,512 | $ 99,223 | $ 102,632 | $ 80,274 | 137 % | 111 % | |||||||
nm = not meaningful | |||||||||||||||
(1) | Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate. |
Columbia Banking System, Inc. | |||||||||||||||
GAAP to Non-GAAP Reconciliation - Continued | |||||||||||||||
(Unaudited) | |||||||||||||||
Quarter Ended | % Change | ||||||||||||||
($ in thousands, except per share data) | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Seq. Quarter | Year over Year | ||||||||
Average assets | n | $ 53,540,574 | $ 39,425,975 | $ 31,637,490 | $ 30,668,177 | $ 30,356,903 | 36 % | 76 % | |||||||
Less: Average goodwill and other intangible assets, net | 1,718,705 | 623,042 | 5,298 | 6,343 | 7,379 | 176 % | nm | ||||||||
Average tangible assets | o | $ 51,821,869 | $ 38,802,933 | $ 31,632,192 | $ 30,661,834 | $ 30,349,524 | 34 % | 71 % | |||||||
Average common shareholders' equity | p | $ 4,935,239 | $ 3,349,761 | $ 2,438,639 | $ 2,567,266 | $ 2,584,836 | 47 % | 91 % | |||||||
Less: Average goodwill and other intangible assets, net | 1,718,705 | 623,042 | 5,298 | 6,343 | 7,379 | 176 % | nm | ||||||||
Average tangible common equity | q | $ 3,216,534 | $ 2,726,719 | $ 2,433,341 | $ 2,560,923 | $ 2,577,457 | 18 % | 25 % | |||||||
Weighted average basic shares outstanding (1) | r | 207,977 | 156,383 | 129,321 | 129,319 | 129,306 | 33 % | 61 % | |||||||
Weighted average diluted shares outstanding (1) | s | 208,545 | 156,383 | 129,801 | 129,733 | 129,673 | 33 % | 61 % | |||||||
Select Per-Share & Performance Metrics | |||||||||||||||
Earnings-per-share - basic (1) | j / r | $ 0.64 | $ (0.09) | $ 0.64 | $ 0.65 | $ 0.61 | (811) % | 5 % | |||||||
Earnings-per-share - diluted (1) | j / s | $ 0.64 | $ (0.09) | $ 0.64 | $ 0.65 | $ 0.61 | (811) % | 5 % | |||||||
Efficiency ratio | h / f | 62.60 % | 79.71 % | 57.24 % | 56.07 % | 59.12 % | (17.11) | 3.48 | |||||||
Return on average assets | j / n | 1.00 % | (0.14) % | 1.04 % | 1.09 % | 1.04 % | 1.14 | (0.04) | |||||||
Return on average tangible assets | j / o | 1.03 % | (0.15) % | 1.04 % | 1.09 % | 1.04 % | 1.18 | (0.01) | |||||||
PPNR return on average assets | k / n | 1.46 % | 0.89 % | 1.82 % | 1.80 % | 1.64 % | 0.57 | (0.18) | |||||||
Return on average common equity | j / p | 10.84 % | (1.70) % | 13.50 % | 12.99 % | 12.20 % | 12.54 | (1.36) | |||||||
Return on average tangible common equity | j / q | 16.63 % | (2.09) % | 13.53 % | 13.02 % | 12.23 % | 18.72 | 4.40 | |||||||
Operating Per-Share & Performance Metrics | |||||||||||||||
Operating earnings-per-share - basic (1) | m / r | $ 0.81 | $ 0.46 | $ 0.77 | $ 0.79 | $ 0.62 | 76 % | 31 % | |||||||
Operating earnings-per-share - diluted (1) | m / s | $ 0.81 | $ 0.46 | $ 0.76 | $ 0.79 | $ 0.62 | 76 % | 31 % | |||||||
Operating efficiency ratio | i / g | 54.85 % | 53.46 % | 52.01 % | 51.72 % | 58.27 % | 1.39 | (3.42) | |||||||
Operating return on average assets | m / n | 1.27 % | 0.74 % | 1.24 % | 1.33 % | 1.06 % | 0.53 | 0.21 | |||||||
Operating return on average tangible assets | m / o | 1.31 % | 0.75 % | 1.24 % | 1.33 % | 1.06 % | 0.56 | 0.25 | |||||||
Operating PPNR return on average assets | l / n | 1.82 % | 2.01 % | 2.10 % | 2.12 % | 1.66 % | (0.19) | 0.16 | |||||||
Operating return on average common equity | m / p | 13.77 % | 8.66 % | 16.14 % | 15.86 % | 12.46 % | 5.11 | 1.31 | |||||||
Operating return on average tangible common equity | m / q | 21.13 % | 10.64 % | 16.18 % | 15.90 % | 12.49 % | 10.49 | 8.64 | |||||||
(1) | Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958. |
Columbia Banking System, Inc. | |||||||
GAAP to Non-GAAP Reconciliation - Continued | |||||||
(Unaudited) | |||||||
Six Months Ended | % Change | ||||||
($ in thousands) | Jun 30, 2023 | Jun 30, 2022 | Year over Year | ||||
Non-Interest Income Adjustments | |||||||
Gain on sale of debt securities, net | $ — | $ 2 | (100) % | ||||
Gain (loss) on equity securities, net | 1,719 | (4,736) | nm | ||||
(Loss) gain on swap derivatives | (2,255) | 14,384 | (116) % | ||||
Change in fair value of certain loans held for investment | 2,523 | (36,259) | nm | ||||
Change in fair value of MSR due to valuation inputs or assumptions | (5,179) | 51,048 | nm | ||||
MSR hedge loss | (4,986) | — | nm | ||||
Total non-interest income adjustments | a | $ (8,178) | $ 24,439 | (133) % | |||
Non-Interest Expense Adjustments | |||||||
Merger related expenses | $ 145,547 | $ 4,950 | nm | ||||
Exit and disposal costs | 3,410 | 3,475 | (2) % | ||||
Total non-interest expense adjustments | b | $ 148,957 | $ 8,425 | nm | |||
Net interest income (1) | c | $ 860,537 | $ 477,639 | 80 % | |||
Non-interest income (GAAP) | d | $ 94,413 | $ 135,204 | (30) % | |||
Less: Non-interest income adjustments | a | 8,178 | (24,439) | (133) % | |||
Operating non-interest income (non-GAAP) | e | $ 102,591 | $ 110,765 | (7) % | |||
Revenue (GAAP) (1) | f=c+d | $ 954,950 | $ 612,843 | 56 % | |||
Operating revenue (non-GAAP) (1) | g=c+e | $ 963,128 | $ 588,404 | 64 % | |||
Non-interest expense (GAAP) | h | $ 671,377 | $ 362,004 | 85 % | |||
Less: Non-interest expense adjustments | b | (148,957) | (8,425) | nm | |||
Operating non-interest expense (non-GAAP) | i | $ 522,420 | $ 353,579 | 48 % | |||
Net income (GAAP) | j | $ 119,339 | $ 169,748 | (30) % | |||
Provision for income taxes | 40,817 | 56,889 | (28) % | ||||
Income before provision for income taxes | 160,156 | 226,637 | (29) % | ||||
Provision for credit losses | 121,553 | 23,496 | 417 % | ||||
Pre-provision net revenue (PPNR) (non-GAAP) | k | 281,709 | 250,133 | 13 % | |||
Less: Non-interest income adjustments | a | 8,178 | (24,439) | (133) % | |||
Add: Non-interest expense adjustments | b | 148,957 | 8,425 | nm | |||
Operating PPNR (non-GAAP) | l | $ 438,844 | $ 234,119 | 87 % | |||
Net income (GAAP) | j | $ 119,339 | $ 169,748 | (30) % | |||
Less: Non-interest income adjustments | a | 8,178 | (24,439) | (133) % | |||
Add: Non-interest expense adjustments | b | 148,957 | 8,425 | nm | |||
Tax effect of adjustments | (35,546) | 4,096 | nm | ||||
Operating net income (non-GAAP) | m | $ 240,928 | $ 157,830 | 53 % | |||
nm = not meaningful | |||||||
(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate. | |||||||
Average assets | n | $ 46,522,265 | $ 30,476,312 | 53 % | |||
Less: Average goodwill and other intangible assets, net | $ 1,173,900 | $ 7,890 | nm | ||||
Average tangible assets | o | $ 45,348,365 | $ 30,468,422 | 49 % | |||
Average common shareholders' equity | p | $ 4,146,880 | $ 2,649,406 | 57 % | |||
Less: Average goodwill and other intangible assets, net | $ 1,173,900 | $ 7,890 | nm | ||||
Average tangible common equity | q | $ 2,972,980 | $ 2,641,516 | 13 % | |||
Weighted average basic shares outstanding (1) | r | 182,325 | 129,233 | 41 % | |||
Weighted average diluted shares outstanding (1) | s | 182,860 | 129,685 | 41 % | |||
Select Per-Share & Performance Metrics | |||||||
Earnings-per-share - basic (1) | j / r | $ 0.65 | $ 1.31 | (50) % | |||
Earnings-per-share - diluted (1) | j / s | $ 0.65 | $ 1.31 | (50) % | |||
Efficiency ratio | h / f | 70.30 % | 59.07 % | 11.23 | |||
Return on average assets | j / n | 0.52 % | 1.12 % | (0.60) | |||
Return on average tangible assets | j / o | 0.53 % | 1.12 % | (0.59) | |||
PPNR return on average assets | k/n | 1.22 % | 1.66 % | (0.44) | |||
Return on average common equity | j / p | 5.80 % | 12.92 % | (7.12) | |||
Return on average tangible common equity | j / q | 8.09 % | 12.96 % | (4.87) | |||
Operating Per-Share & Performance Metrics | |||||||
Operating earnings-per-share - basic (1) | m / r | $ 1.32 | $ 1.22 | 8 % | |||
Operating earnings-per-share - diluted (1) | m / s | $ 1.32 | $ 1.22 | 8 % | |||
Operating efficiency ratio | i / g | 54.24 % | 60.09 % | (5.85) | |||
Operating return on average assets | m / n | 1.04 % | 1.04 % | — | |||
Operating return on average tangible assets | m / o | 1.07 % | 1.04 % | 0.03 | |||
Operating PPNR return on average assets | l / n | 1.90 % | 1.55 % | 0.35 | |||
Operating return on average common equity | m / p | 11.72 % | 12.01 % | (0.29) | |||
Operating return on average tangible common equity | m / q | 16.34 % | 12.05 % | 4.29 | |||
(1) | Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958. |
Columbia Banking System, Inc. | |||||||||||||||
GAAP to Non-GAAP Reconciliation - Continued | |||||||||||||||
(Unaudited) | |||||||||||||||
Quarter Ended | % Change | ||||||||||||||
($ in thousands) | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Seq. Quarter | Year over Year | ||||||||
Loans and leases interest income | a | $ 551,997 | $ 412,726 | $ 320,747 | $ 276,625 | $ 231,932 | 34 % | 138 % | |||||||
Less: Acquired loan accretion - rate related (2), (3) | b | 30,548 | 11,832 | 387 | 789 | 1,069 | 158 % | nm | |||||||
Less: Acquired loan accretion - credit related (3) | c | 7,100 | 3,806 | — | — | — | 87 % | nm | |||||||
Adjusted loans and leases interest income | d=a-b-c | $ 514,349 | $ 397,088 | $ 320,360 | $ 275,836 | $ 230,863 | 30 % | 123 % | |||||||
Taxable securities interest income | e | $ 81,617 | $ 40,448 | $ 18,290 | $ 18,261 | $ 17,340 | 102 % | 371 % | |||||||
Less: Acquired taxable securities accretion - rate related | f | 34,801 | 15,356 | — | — | — | 127 % | nm | |||||||
Adjusted Taxable securities interest income | g=e-f | $ 46,816 | $ 25,092 | $ 18,290 | $ 18,261 | $ 17,340 | 87 % | 170 % | |||||||
Non-taxable securities interest income (1) | h | $ 8,010 | $ 4,068 | $ 1,571 | $ 1,651 | $ 1,721 | 97 % | 365 % | |||||||
Less: Acquired non-taxable securities accretion - rate related | i | 2,274 | 901 | — | — | — | 152 % | nm | |||||||
Adjusted Taxable securities interest income (1) | j=h-i | $ 5,736 | $ 3,167 | $ 1,571 | $ 1,651 | $ 1,721 | 81 % | 233 % | |||||||
Interest income (1) | k | $ 676,922 | $ 476,622 | $ 352,530 | $ 303,857 | $ 256,654 | 42 % | 164 % | |||||||
Less: Acquired loan and securities accretion - rate related | l=b+f+i | 67,623 | 28,089 | 387 | 789 | 1,069 | 141 % | nm | |||||||
Less: Acquired loan accretion - credit related | c | 7,100 | 3,806 | — | — | — | 87 % | nm | |||||||
Adjusted interest income (1) | m=k-l-c | $ 602,199 | $ 444,727 | $ 352,143 | $ 303,068 | $ 255,585 | 35 % | 136 % | |||||||
Interest-bearing deposits interest expense | n | $ 100,408 | $ 63,613 | $ 31,174 | $ 9,090 | $ 4,015 | 58 % | nm | |||||||
Less: Acquired deposit accretion | o | (280) | (93) | — | — | — | 201 % | nm | |||||||
Adjusted interest-bearing deposits interest expense | p=n-o | $ 100,688 | $ 63,706 | $ 31,174 | $ 9,090 | $ 4,015 | 58 % | nm | |||||||
Interest expense | q | $ 191,754 | $ 101,253 | $ 46,768 | $ 15,924 | $ 8,132 | 89 % | nm | |||||||
Less: Acquired interest-bearing liabilities accretion (2) | r | (337) | (150) | (57) | (57) | (57) | 125 % | 491 % | |||||||
Adjusted interest expense | s=q-r | $ 192,091 | $ 101,403 | $ 46,825 | $ 15,981 | $ 8,189 | 89 % | nm | |||||||
Net Interest Income (1) | t | $ 485,168 | $ 375,369 | $ 305,762 | $ 287,933 | $ 248,522 | 29 % | 95 % | |||||||
Less: Acquired loan, securities, and interest-bearing liabilities accretion - rate related | u=l-r | 67,286 | 27,939 | 330 | 732 | 1,012 | 141 % | nm | |||||||
Less: Acquired loan accretion - credit related | c | 7,100 | 3,806 | — | — | — | 87 % | nm | |||||||
Adjusted net interest income (1) | v=t-u-c | $ 410,782 | $ 343,624 | $ 305,432 | $ 287,201 | $ 247,510 | 20 % | 66 % | |||||||
Average loans and leases | aa | 37,169,315 | 29,998,630 | 25,855,556 | 24,886,203 | 23,550,796 | 24 % | 58 % | |||||||
Average taxable securities | ab | 8,656,147 | 4,960,966 | 3,042,044 | 3,271,185 | 3,410,091 | 74 % | 154 % | |||||||
Average non-taxable securities | ac | 865,278 | 437,020 | 200,825 | 212,847 | 220,327 | 98 % | 293 % | |||||||
Average interest-earning assets | ad | 49,442,518 | 37,055,705 | 30,305,129 | 29,437,103 | 29,108,988 | 33 % | 70 % | |||||||
Average interest-bearing deposits | ae | 24,494,717 | 19,496,551 | 16,103,984 | 15,350,390 | 15,308,058 | 26 % | 60 % | |||||||
Average interest-bearing liabilities | af | 31,372,416 | 22,548,264 | 17,668,730 | 16,359,575 | 16,220,936 | 39 % | 93 % | |||||||
(1) | Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate. |
(2) | Includes discount accretion related to UHC's 2014 acquisition of Sterling Financial Corporation. |
(3) | The cumulative fair value discount on historical Columbia loans was established as of February 28, 2023, and the allocation between the credit-related discount and the rate-related discount was established at that time. Our disclosure of credit-related and rate-related discount accretion is an estimate based on the relative allocation of these two items to the discount at closing. |
Columbia Banking System, Inc. | |||||||||||||||
GAAP to Non-GAAP Reconciliation - Continued | |||||||||||||||
(Unaudited) | |||||||||||||||
Quarter Ended | % Change | ||||||||||||||
($ in thousands) | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Seq. Quarter | Year over Year | ||||||||
Average yield on loans and leases | a / aa | 5.95 % | 5.55 % | 4.92 % | 4.41 % | 3.94 % | 0.40 | 2.01 | |||||||
Less: Acquired loan accretion - rate related (2),(3) | b / aa | 0.33 % | 0.16 % | 0.01 % | 0.01 % | 0.02 % | 0.17 | 0.31 | |||||||
Less: Acquired loan accretion - credit related (3) | c / aa | 0.08 % | 0.05 % | — % | — % | — % | 0.03 | 0.08 | |||||||
Adjusted average yield on loans and leases | d / aa | 5.54 % | 5.34 % | 4.91 % | 4.40 % | 3.92 % | 0.20 | 1.62 | |||||||
Average yield on taxable securities | e / ab | 3.77 % | 3.26 % | 2.40 % | 2.23 % | 2.03 % | 0.51 | 1.74 | |||||||
Less: Acquired taxable securities accretion - rate related | f / ab | 1.61 % | 1.26 % | — % | — % | — % | 0.35 | 1.61 | |||||||
Adjusted average yield on taxable securities | g / ab | 2.16 % | 2.00 % | 2.40 % | 2.23 % | 2.03 % | 0.16 | 0.13 | |||||||
Average yield on non-taxable securities (1) | h / ac | 3.70 % | 3.72 % | 3.13 % | 3.10 % | 3.13 % | (0.02) | 0.57 | |||||||
Less: Acquired non-taxable securities accretion - rate related | i / ac | 1.05 % | 0.84 % | — % | — % | — % | 0.21 | 1.05 | |||||||
Adjusted yield on non-taxable securities (1) | j / ac | 2.65 % | 2.88 % | 3.13 % | 3.10 % | 3.13 % | (0.23) | (0.48) | |||||||
Average yield on interest-earning assets (1) | k / ad | 5.48 % | 5.19 % | 4.62 % | 4.10 % | 3.53 % | 0.29 | 1.95 | |||||||
Less: Acquired loan and securities accretion - rate related | l / ad | 0.55 % | 0.31 % | 0.01 % | 0.01 % | 0.01 % | 0.24 | 0.54 | |||||||
Less: Acquired loan accretion - credit related | c / ad | 0.06 % | 0.04 % | — % | — % | — % | 0.02 | 0.06 | |||||||
Adjusted average yield on interest-earning assets (1) | m / ad | 4.87 % | 4.84 % | 4.61 % | 4.09 % | 3.52 % | 0.03 | 1.35 | |||||||
Average rate on interest-bearing deposits | n / ae | 1.64 % | 1.32 % | 0.77 % | 0.23 % | 0.11 % | 0.32 | 1.53 | |||||||
Less: Acquired deposit accretion | o / ae | — % | — % | — % | — % | — % | — | — | |||||||
Adjusted average rate on interest-bearing deposits | p / ae | 1.64 % | 1.32 % | 0.77 % | 0.23 % | 0.11 % | 0.32 | 1.53 | |||||||
Average rate on interest-bearing liabilities | q / af | 2.45 % | 1.82 % | 1.05 % | 0.39 % | 0.20 % | 0.63 | 2.25 | |||||||
Less: Acquired interest-bearing liabilities accretion (2) | r / af | — % | — % | — % | — % | — % | — | — | |||||||
Adjusted average rate on interest-bearing liabilities | s / af | 2.45 % | 1.82 % | 1.05 % | 0.39 % | 0.20 % | 0.63 | 2.25 | |||||||
Net interest margin (1) | t / ad | 3.93 % | 4.08 % | 4.01 % | 3.88 % | 3.41 % | (0.15) | 0.52 | |||||||
Less: Acquired loan, securities, and interest-bearing liabilities accretion - rate related | u / ad | 0.55 % | 0.31 % | — % | 0.01 % | 0.01 % | 0.24 | 0.54 | |||||||
Less: Acquired loan accretion - credit related | c / ad | 0.06 % | 0.04 % | — % | — % | — % | 0.02 | 0.06 | |||||||
Adjusted net interest margin (1) | v / ad | 3.32 % | 3.73 % | 4.01 % | 3.87 % | 3.40 % | (0.41) | (0.08) | |||||||
(1) | Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate. |
(2) | Includes discount accretion related to UHC's 2014 acquisition of Sterling Financial Corporation. |
(3) | The cumulative fair value discount on historical Columbia loans was established as of February 28, 2023, and the allocation between the credit-related discount and the rate-related discount was established at that time. Our disclosure of credit-related and rate-related discount accretion is an estimate based on the relative allocation of these two items to the discount at closing. |
Columbia Banking System, Inc. | |||||||
GAAP to Non-GAAP Reconciliation - Continued | |||||||
(Unaudited) | |||||||
Six Months Ended | |||||||
($ in thousands) | Jun 30, 2023 | Jun 30, 2022 | Year over Year | ||||
Loans and leases interest income | a | $ 964,723 | $ 444,074 | 117 % | |||
Less: Acquired loan accretion - rate related (2), (3) | b | 42,380 | 2,501 | nm | |||
Less: Acquired loan accretion - credit related (3) | c | 10,906 | — | nm | |||
Adjusted loans and leases interest income | d=a-b-c | $ 911,437 | $ 441,573 | 106 % | |||
Taxable securities interest income | e | $ 122,065 | $ 36,151 | 238 % | |||
Less: Acquired taxable securities accretion - rate related | f | 50,157 | — | nm | |||
Adjusted Taxable securities interest income | g=e-f | $ 71,908 | $ 36,151 | 99 % | |||
Non-taxable securities interest income (1) | h | $ 12,078 | $ 3,447 | 250 % | |||
Less: Acquired non-taxable securities accretion - rate related | i | 3,175 | — | nm | |||
Adjusted Taxable securities interest income (1) | j=h-i | $ 8,903 | $ 3,447 | 158 % | |||
Interest income (1) | k | $ 1,153,544 | $ 492,948 | 134 % | |||
Less: Acquired loan and securities accretion - rate related | l=b+f+i | 95,712 | 2,501 | nm | |||
Less: Acquired loan accretion - credit related | c | 10,906 | — | nm | |||
Adjusted interest income (1) | m=k-l-c | $ 1,046,926 | $ 490,447 | 113 % | |||
Interest-bearing deposits interest expense | n | $ 164,021 | $ 7,931 | nm | |||
Less: Acquired deposit accretion | o | (373) | — | nm | |||
Adjusted interest-bearing deposits interest expense | p=n-o | $ 164,394 | $ 7,931 | nm | |||
Interest expense | q | $ 293,007 | $ 15,309 | nm | |||
Less: Acquired interest-bearing liabilities accretion (2) | r | (487) | (114) | 327 % | |||
Adjusted interest expense | s=q-r | $ 293,494 | $ 15,423 | nm | |||
Net Interest Income (1) | t | $ 860,537 | $ 477,639 | 80 % | |||
Less: Acquired loan, securities, and interest-bearing liabilities accretion - rate related | u=l-r | 95,225 | 2,387 | nm | |||
Less: Acquired loan accretion - credit related | c | 10,906 | — | nm | |||
Adjusted net interest income (1) | v=t-u-c | $ 754,406 | $ 475,252 | 59 % | |||
Average loans and leases | aa | 33,603,781 | 23,061,173 | 46 % | |||
Average taxable securities | ab | 6,818,764 | 3,533,930 | 93 % | |||
Average non-taxable securities | ac | 652,332 | 227,218 | 187 % | |||
Average interest-earning assets | ad | 43,283,329 | 29,235,926 | 48 % | |||
Average interest-bearing deposits | ae | 22,058,850 | 15,459,597 | 43 % | |||
Average interest-bearing liabilities | af | 27,034,125 | 16,353,064 | 65 % | |||
(1) | Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate. |
(2) | Includes discount accretion related to UHC's 2014 acquisition of Sterling Financial Corporation. |
(3) | The cumulative fair value discount on historical Columbia loans was established as of February 28, 2023, and the allocation between the credit-related discount and the rate-related discount was established at that time. Our disclosure of credit-related and rate-related discount accretion is an estimate based on the relative allocation of these two items to the discount at closing. |
Columbia Banking System, Inc. | |||||||
GAAP to Non-GAAP Reconciliation - Continued | |||||||
(Unaudited) | |||||||
Six Months Ended | |||||||
($ in thousands) | Jun 30, 2023 | Jun 30, 2022 | Year over Year | ||||
Average yield on loans and leases | a / aa | 5.77 % | 3.86 % | 1.91 | |||
Less: Acquired loan accretion - rate related (2),(3) | b / aa | 0.25 % | 0.02 % | 0.23 | |||
Less: Acquired loan accretion - credit related (3) | c / aa | 0.07 % | — % | 0.07 | |||
Adjusted average yield on loans and leases | d / aa | 5.45 % | 3.84 % | 1.61 | |||
Average yield on taxable securities | e / ab | 3.58 % | 2.05 % | 1.53 | |||
Less: Acquired taxable securities accretion - rate related | f / ab | 1.48 % | — % | 1.48 | |||
Adjusted average yield on taxable securities | g / ab | 2.10 % | 2.05 % | 0.05 | |||
Average yield on non-taxable securities (1) | h / ac | 3.70 % | 3.03 % | 0.67 | |||
Less: Acquired non-taxable securities accretion - rate related | i / ac | 0.98 % | — % | 0.98 | |||
Adjusted yield on non-taxable securities (1) | j / ac | 2.72 % | 3.03 % | (0.31) | |||
Average yield on interest-earning assets (1) | k / ad | 5.35 % | 3.38 % | 1.97 | |||
Less: Acquired loan and securities accretion - rate related | l / ad | 0.45 % | 0.02 % | 0.43 | |||
Less: Acquired loan accretion - credit related | c / ad | 0.05 % | — % | 0.05 | |||
Adjusted average yield on interest-earning assets (1) | m / ad | 4.85 % | 3.36 % | 1.49 | |||
Average rate on interest-bearing deposits | n / ae | 1.50 % | 0.10 % | 1.40 | |||
Less: Acquired deposit accretion | o / ae | — % | — % | — | |||
Adjusted average rate on interest-bearing deposits | p / ae | 1.50 % | 0.10 % | 1.40 | |||
Average rate on interest-bearing liabilities | q / af | 2.19 % | 0.19 % | 2.00 | |||
Less: Acquired interest-bearing liabilities accretion (2) | r / af | — % | — % | — | |||
Adjusted average rate on interest-bearing liabilities | s / af | 2.19 % | 0.19 % | 2.00 | |||
Net interest margin (1) | t / ad | 3.99 % | 3.28 % | 0.71 | |||
Less: Acquired loan, securities, and interest-bearing liabilities accretion - rate related | u / ad | 0.44 % | 0.02 % | 0.42 | |||
Less: Acquired loan accretion - credit related | c / ad | 0.05 % | — % | 0.05 | |||
Adjusted net interest margin (1) | v / ad | 3.50 % | 3.26 % | 0.24 | |||
(1) | Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate. |
(2) | Includes discount accretion related to UHC's 2014 acquisition of Sterling Financial Corporation. |
(3) | The cumulative fair value discount on historical Columbia loans was established as of February 28, 2023, and the allocation between the credit-related discount and the rate-related discount was established at that time. Our disclosure of credit-related and rate-related discount accretion is an estimate based on the relative allocation of these two items to the discount at closing. |
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SOURCE Columbia Banking System, Inc.