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COLUMBIA BANKING SYSTEM, INC. REPORTS FOURTH QUARTER 2023 RESULTS

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Columbia Banking System, Inc. reported net income of $94 million, or $0.45 per diluted common share, and operating net income of $91 million, or $0.44 per diluted common share for the fourth quarter of 2023. The company also achieved consolidated asset balances of $52 billion, loan balances of $37 billion, and deposit balances of $42 billion at quarter end. The estimated CET1 and total capital ratios were 9.6% and 11.8% at quarter end. The net interest income decreased to $454 million, and the net interest margin was 3.78%, down 13 basis points from the prior quarter. Non-interest income increased by $22 million, and non-interest expense increased by $33 million, driven by a recorded $33 million expense for the special assessment from the FDIC. The allowance for credit losses was $464 million, and the provision for credit losses was $55 million. The book value per common share increased to $23.95, and the tangible book value per common share increased to $16.12.
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Insights

The reported net income of $94 million, or $0.45 per diluted common share and operating net income of $91 million, or $0.44 per diluted common share, indicate a stable profitability for Columbia Banking System. However, the decline in net interest income from $481 million to $454 million and a decrease in net interest margin from 3.91% to 3.78% reflects the impact of a rising rate environment and higher deposit costs. The efficiency ratio has worsened from 57.82% to 64.81%, suggesting increased costs relative to revenue.

The provision for credit losses increasing to $55 million may raise concerns about potential future loan defaults, especially in a challenging economic climate. Moreover, the net charge-offs rising from 0.25% to 0.31% of average loans and leases also warrants attention, as it could signify deteriorating credit quality within the portfolio, particularly the FinPac portfolio.

The integration of Umpqua Bank and the achievement of cost-savings targets ahead of schedule could be seen as positive indicators of management's efficiency and the potential for future profitability. The focus on optimizing performance and driving shareholder value post-integration suggests a strategic pivot towards operational excellence.

However, the FDIC special assessment and one-time expense items have added noise to the quarter's financials, highlighting the impact of external regulatory costs on the banking sector. Additionally, the consolidation of five branches may reflect a strategic shift towards digital banking and a more streamlined physical presence.

The higher-rate environment has led to increased deposit costs, particularly evident in the repricing of CDs and increased public deposits, impacting Columbia's margin. This is indicative of broader economic trends where central banks are raising rates to combat inflation, affecting banks' cost of funds.

The stable total asset and deposit balances at $52 billion and $42 billion respectively, alongside a slight increase in loan balances to $37 billion, demonstrate a solid liquidity position. The capital ratios, with an estimated CET1 of 9.6% and total capital ratio of 11.8%, suggest that Columbia maintains a robust capital buffer, which is crucial for weathering potential economic downturns.

Fourth Quarter 2023 Results

  • Net income of $94 million, or $0.45 per diluted common share
  • Operating net income of $91 million, or $0.44 per diluted common share1
  • Consolidated asset balances of $52 billion at quarter end
  • Loan balances of $37 billion and deposit balances of $42 billion at quarter end
  • Estimated CET1 and total capital ratios of 9.6% and 11.8% at quarter end

TACOMA, Wash., Jan. 24, 2024 /PRNewswire/ --

COLUMBIA BANKING SYSTEM, INC. REPORTS FOURTH QUARTER 2023 RESULTS

$0.45


$0.44


$23.95


$16.12

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

"It was a historic year for Columbia Banking System and Umpqua Bank," said Clint Stein, President and CEO. "We closed and integrated the transformational combination of the Northwest's premier banking organizations, expanding our footprint to encompass eight Western states as we achieved our cost-savings targets ahead of schedule and above our original projections. With the integration behind us, we are now turning our focus to optimizing performance and driving shareholder value. The fourth quarter was noisy with the FDIC special assessment and some one-time expense items. Our cost of funds is not immune to the higher-rate environment, as we had some 2022 vintage CDs reprice and saw a material increase in public deposits impact our margin. However, we believe neither of these items dilutes the quality of our core deposit base. Our scale, products, and services empower our talented base of associates to win business, which we believe long-term will drive consistent, repeatable performance."

Clint Stein, President and CEO of Columbia Banking System, Inc.

 

4Q23 HIGHLIGHTS (COMPARED TO 3Q23)





Net Interest
Income and
NIM

•   Net interest income decreased to $454 million from $481 million in 3Q23 due primarily to higher deposit costs that more than offset a decline in the cost of wholesale borrowings.


•   Net interest margin was 3.78%, down 13 basis points from the prior quarter. Higher earning asset yields and a more profitable mix of earning assets were offset by higher deposit costs. Higher balances in public deposits and CD repricing contributed to the quarter's net interest margin contraction.





Non-Interest
Income and
Expense

•   Non-interest income increased by $22 million due primarily to a $28 million favorable change in cumulative non-merger fair value accounting and hedges. Lower mortgage banking revenue reflects an anticipated decline in servicing revenue following the MSR asset sale that closed on September 30, 2023.


•   Non-interest expense increased by $33 million due to a $33 million FDIC special assessment recorded during the quarter and other elevated expense items, which offset lower merger-related expense.





Credit
Quality

•   Net charge-offs were 0.31% of average loans and leases (annualized) compared to 0.25% in the prior quarter. Charge-off activity remains primarily centered in the FinPac portfolio.


•   Provision expense of $55 million reflects changes in the economic forecasts used in credit models and portfolio migration trends.


•   Non-performing assets to total assets was 0.22% compared to 0.20% at September 30, 2023.





Capital

•   Estimated total risk-based capital ratio of 11.8% and estimated common equity tier 1 risk-based capital ratio of 9.6%.


•   Declared a quarterly cash dividend of $0.36 per common share on November 13, 2023, which was paid December 11, 2023.





Notable
items

•   Consolidated five branches in January 2024.


•   Incurred $7 million in merger-related expense.


 

4Q23 KEY FINANCIAL DATA







PERFORMANCE METRICS

4Q23


3Q23


4Q22

Return on average assets

0.72 %


1.02 %


1.04 %

Return on average common equity

7.90 %


11.07 %


13.50 %

Return on average tangible common equity 1

12.19 %


16.93 %


13.53 %

Operating return on average assets 1

0.70 %


1.23 %


1.24 %

Operating return on average common equity 1

7.73 %


13.40 %


16.14 %

Operating return on average tangible common equity 1

11.92 %


20.48 %


16.18 %

Net interest margin

3.78 %


3.91 %


4.01 %

Efficiency ratio

64.81 %


57.82 %


57.24 %







INCOME STATEMENT

($ in 000s, excl. per share data)

4Q23


3Q23


4Q22

Net interest income

$453,623


$480,875


$305,479

Provision for credit losses

$54,909


$36,737


$32,948

Non-interest income

$65,533


$43,981


$34,879

Non-interest expense

$337,176


$304,147


$194,982

Pre-provision net revenue 1

$181,980


$220,709


$145,376

Operating pre-provision net revenue1

$179,213


$258,687


$167,094

Earnings per common share - diluted 2

$0.45


$0.65


$0.64

Operating earnings per common share - diluted 1,2

$0.44


$0.79


$0.76

Dividends paid per share 2

$0.36


$0.36


$0.35







BALANCE SHEET

4Q23


3Q23


4Q22

Total assets

       $52.2B


       $52.0B


       $31.8B

Loans and leases

       $37.4B


       $37.2B


       $26.2B

Total deposits

       $41.6B


       $41.6B


       $27.1B

Book value per common share 2

$23.95


$22.21


$19.18

Tangible book value per share1,2

$16.12


$14.22


$19.14

 









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 merger of 0.5958.

 

Organizational Update
Columbia Banking System, Inc. ("Columbia", "we", or "our") realized $143 million in annualized net merger-related cost-savings as of December 31, 2023, outpacing the $135 million target communicated when the combination was announced. As the integration process is now largely complete, we do not intend to provide future updates on cost savings realizations. However, Columbia has a history of prudent expense management, and the company will continue to evaluate opportunities for improved efficiency as part of the normal course of business to offset franchise development investments. As previously disclosed, Umpqua Bank, the primary subsidiary of Columbia, consolidated five branches during January 2024. 

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 each of the quarters of 2023 and the year ended December 31, 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 Income
Net interest income was $454 million for the fourth quarter of 2023, down $27 million from the prior quarter. The decline reflects higher deposit costs that more than offset a decline in the cost of wholesale borrowings.

Columbia's net interest margin was 3.78% for the fourth quarter of 2023, down 13 basis points from 3.91% for the third quarter of 2023. The cost of interest-bearing deposits increased 53 basis points on a linked-quarter basis to 2.54% for the fourth quarter of 2023, which compares to 2.71% for the month of December and 2.75% at December 31, 2023. Deposit costs were impacted by the full quarter's run rate of brokered deposits added during the third quarter to replace maturing FHLB advances. Further, higher public deposit balances, which reflect seasonal tax-related trends and a focused effort to attract relationship-based public funds in local communities as we work to reduce wholesale funding, also had an impact. Public balances tend to carry a higher interest rate than most other non-maturity deposit balances. Time deposits also contributed to the quarter's increased cost of deposits as many maturing balances repriced over 200 basis points higher at the expiration of their 12- and 13-month terms. Columbia's cost of interest-bearing liabilities increased 30 basis points on a linked-quarter basis to 3.02% for the fourth quarter of 2023, which compares to 3.15% for the month of December and 3.19% at December 31, 2023. A reduction in the balance of average wholesale borrowings resulted in a smaller increase in the cost of interest-bearing liabilities compared to interest-bearing deposits. Please refer to the Q4 2023 Earnings Presentation for additional net interest margin change details and interest rate sensitivity information as well as to our non-GAAP disclosures in this press release for the impact of purchase accounting accretion and amortization on individual line items.

Non-interest Income
Non-interest income was $66 million for the fourth quarter of 2023, up $22 million from the prior quarter. A $28 million favorable change in fair value adjustments and mortgage servicing rights ("MSR") hedging activity reflects a net fair value gain of $13 million in the fourth quarter, compared to a net fair value loss of $15 million in the third quarter, as detailed in our non-GAAP disclosures. This benefit was partially offset by lower mortgage servicing income following the September 30, 2023 sale of approximately one-third of Columbia's MSR assets, which reduced the serviced loan portfolio by an equivalent amount.

Non-interest Expense
Non-interest expense was $337 million for the fourth quarter of 2023, up $33 million from the prior quarter. The increase was driven by a recorded $33 million expense for the special assessment from the FDIC to replenish the Deposit Insurance Fund following bank closures earlier in 2023. The fourth quarter was also impacted by other elevated expense items that offset a $12 million decline in merger-related expense, which was $7 million in the fourth quarter. Please refer to the Q4 2023 Earnings Presentation for additional expense details, including an update on realized merger-related cost-savings through December 31, 2023.

Balance Sheet
Total consolidated assets were $52.2 billion as of December 31, 2023, essentially unchanged from September 30, 2023. Cash and cash equivalents was $2.2 billion as of December 31, 2023, a decrease of $241 million relative to September 30, 2023. Including secured off-balance sheet lines of credit, total available liquidity was $18.7 billion as of December 31, 2023, representing 36% of total assets, 45% of total deposits, and 138% of uninsured deposits. Available for sale ("AFS") securities, which are held on balance sheet at fair value, were $8.8 billion as of December 31, 2023, an increase of $326 million relative to September 30, 2023, as an increase in the fair value of the portfolio and accretion of the discount on historical Columbia securities more than offset paydowns. Columbia did not purchase any securities during the fourth quarter. Please refer to the Q4 2023 Earnings Presentation for additional details related to our securities portfolio and liquidity position.

Gross loans and leases were $37.4 billion as of December 31, 2023, an increase of $271 million relative to September 30, 2023. "Higher outstanding commercial term and line balances and other relationship-driven expansion contributed to 3% annualized loan growth in the fourth quarter," stated Chris Merrywell, President of Umpqua Bank. "Our bankers remain laser-focused on generating business founded through relationships that drive balanced growth." Please refer to the Q4 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 $41.6 billion as of December 31, 2023, essentially unchanged from September 30, 2023. "While total deposit balances were stable between September and December, the mix reflects a shift into interest-bearing demand accounts," commented Mr. Merrywell. "Non-interest bearing balance changes continue to reflect customers' use of cash, which includes tax payments and lower escrow balances during the fourth quarter. Our targeted efforts to expand our network of public deposits throughout our communities helped offset seasonal customer declines without the use of wholesale funding." Please refer to the Q4 2023 Earnings Presentation for additional details related to deposit characteristics and flows.

Credit Quality
The allowance for credit losses was $464 million, or 1.24% of loans and leases, as of December 31, 2023, compared to $438 million, or 1.18% of loans and leases, as of September 30, 2023. The provision for credit losses was $55 million for the fourth quarter of 2023, and it reflects changes in the economic forecasts used in credit models and portfolio migration trends. Please refer to the Q4 2023 Earnings Presentation for additional details related to the allowance for credit losses and other credit trends.

Net charge-offs were 0.31% of average loans and leases (annualized) for the fourth quarter of 2023, compared to 0.25% for the third quarter of 2023. Net charge-off activity continued to be centered in the FinPac portfolio as bank charge-off activity was low at 0.06% of average bank loans. As of December 31, 2023, non-performing assets were $114 million, or 0.22% of total assets, compared to $106 million, or 0.20% of total assets, as of September 30, 2023.

Capital
As of December 31, 2023, Columbia's book value per common share increased to $23.95, compared to $22.21 at September 30, 2023. The linked-quarter change in book value primarily reflects a change in accumulated other comprehensive (loss) income ("AOCI") to $(340) million at December 31, 2023, compared to $(680) million at the prior quarter-end. The change in AOCI is due primarily to a decrease in the tax-effected net unrealized loss on AFS securities to $322 million as of December 31, 2023, compared to $650 million as of September 30, 2023. As of December 31, 2023, 54% of the AFS securities portfolio was in an unrealized gain position. Tangible book value per common share[3] correspondingly increased to $16.12, compared to $14.22 at September 30, 2023.

Columbia's estimated total risk-based capital ratio was 11.8% and its estimated common equity tier 1 risk-based capital ratio was 9.6% as of December 31, 2023, compared to 11.6% and 9.5%, respectively, as of September 30, 2023. Columbia remains above current "well-capitalized" regulatory minimums. "Our regulatory capital ratios continued to expand in the fourth quarter," stated Ron Farnsworth, Chief Financial Officer of Columbia. "We expect our capital position to continue to build over time, supporting our franchise expansion and increasing flexibility for capital return." The regulatory capital ratios as of December 31, 2023 are estimates, pending completion and filing of Columbia's regulatory reports. 

Earnings Presentation and Conference Call Information
Columbia's Q4 2023 Earnings Presentation provides additional disclosure. A copy will be available on our investor relations page: www.columbiabankingsystem.com.

Columbia will host its fourth quarter 2023 earnings conference call on January 24, 2024, at 2:00 p.m. PT (5:00 p.m. ET). During the call, Columbia's management will provide an update on recent activities and discuss its fourth 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/BI2ed0e3ce03e94a7a968c1bbb26fa939c
Join the audiocast: https://edge.media-server.com/mmc/p/eo4z866c/
Access 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 Statements
This 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 and 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 merger when expected or at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the 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.

 

TABLE INDEX


Page

Consolidated Statements of Operations

7

Consolidated Balance Sheets

8

Financial Highlights

10

Loan & Lease Portfolio Balances and Mix

11

Deposit Portfolio Balances and Mix

13

Credit Quality - Non-performing Assets

14

Credit Quality - Allowance for Credit Losses

15

Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates

17

Residential Mortgage Banking Activity

19

GAAP to Non-GAAP Reconciliation

21

 

Columbia Banking System, Inc.

Consolidated Statements of Operations

(Unaudited)


Quarter Ended


% Change (2)

($ in thousands, except per share data)

Dec 31, 2023


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Seq.

Quarter


Year
over
Year

Interest income:














Loans and leases

$      577,741


$      569,670


$      552,679


$      413,525


$      322,350


1 %


79 %

Interest and dividends on investments:














Taxable

78,010


80,066


79,036


39,729


18,108


(3) %


331 %

Exempt from federal income tax

6,966


6,929


6,817


3,397


1,288


1 %


441 %

Dividends

4,862


4,941


2,581


719


182


(2) %


nm

Temporary investments and interest bearing deposits

24,055


34,407


34,616


18,581


10,319


(30) %


133 %

Total interest income

691,634


696,013


675,729


475,951


352,247


(1) %


96 %

Interest expense:














Deposits

170,659


126,974


100,408


63,613


31,174


34 %


447 %

Securities sold under agreement to repurchase and federal funds purchased

1,226


1,220


1,071


406


323


0 %


280 %

Borrowings

56,066


77,080


81,004


28,764


8,023


(27) %


nm

Junior and other subordinated debentures

10,060


9,864


9,271


8,470


7,248


2 %


39 %

Total interest expense

238,011


215,138


191,754


101,253


46,768


11 %


409 %

Net interest income

453,623


480,875


483,975


374,698


305,479


(6) %


48 %

Provision for credit losses

54,909


36,737


16,014


105,539


32,948


49 %


67 %

Non-interest income:














Service charges on deposits

17,349


17,410


16,454


14,312


12,139


0 %


43 %

Card-based fees

14,593


15,674


13,435


11,561


9,017


(7) %


62 %

Financial services and trust revenue

3,011


4,651


4,512


1,297


25


(35) %


nm

Residential mortgage banking revenue (loss), net

4,212


7,103


(2,342)


7,816


(1,812)


(41) %


nm

Gain on sale of debt securities, net

9


4





125 %


nm

Gain (loss) on equity securities, net

2,636


(2,055)


(697)


2,416


284


nm


nm

Gain on loan and lease sales, net

1,161


1,871


442


940


1,531


(38) %


(24) %

BOLI income

4,331


4,440


4,063


2,790


2,033


(2) %


113 %

Other income (loss)

18,231


(5,117)


3,811


13,603


11,662


nm


56 %

Total non-interest income

65,533


43,981


39,678


54,735


34,879


49 %


88 %

Non-interest expense:














Salaries and employee benefits

157,572


159,041


163,398


136,092


107,982


(1) %


46 %

Occupancy and equipment, net

48,160


43,070


50,550


41,700


34,021


12 %


42 %

Intangible amortization

33,204


29,879


35,553


12,660


1,019


11 %


nm

FDIC assessments

42,510


11,200


11,579


6,113


3,487


280 %


nm

Merger-related expense

7,174


18,938


29,649


115,898


11,637


(62) %


(38) %

Other expenses

48,556


42,019


37,830


30,355


36,836


16 %


32 %

Total non-interest expense

337,176


304,147


328,559


342,818


194,982


11 %


73 %

Income (loss) before provision (benefit) for income taxes

127,071


183,972


179,080


(18,924)


112,428


(31) %


13 %

Provision (benefit) for income taxes

33,540


48,127


45,703


(4,886)


29,464


(30) %


14 %

Net income (loss)

$        93,531


$      135,845


$      133,377


$      (14,038)


$        82,964


(31) %


13 %















Weighted average basic shares outstanding (1)

208,083


208,070


207,977


156,383


129,321


0 %


61 %

Weighted average diluted shares outstanding (1)

208,739


208,645


208,545


156,383


129,801


0 %


61 %

Earnings (loss) per common share – basic (1)

$           0.45


$           0.65


$           0.64


$          (0.09)


$           0.64


(31) %


(30) %

Earnings (loss) per common share – diluted (1)

$           0.45


$           0.65


$           0.64


$          (0.09)


$           0.64


(31) %


(30) %















(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 merger of 0.5958.

(2)

Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

 

Columbia Banking System, Inc.

Consolidated Statements of Operations

(Unaudited)



Twelve months ended


% Change (2)

($ in thousands, except per share data)


Dec 31, 2023


Dec 31, 2022


Year over
Year

Interest income:







Loans and leases


$          2,113,615


$          1,050,258


101 %

Interest and dividends on investments:







Taxable


276,841


72,264


283 %

Exempt from federal income tax


24,109


5,351


351 %

Dividends


13,103


438


nm

Temporary investments and interest bearing deposits


111,659


19,706


467 %

Total interest income


2,539,327


1,148,017


121 %

Interest expense:







Deposits


461,654


48,195


nm

Securities sold under agreement to repurchase and federal funds purchased


3,923


997


293 %

Borrowings


242,914


8,920


nm

Junior and other subordinated debentures


37,665


19,889


89 %

Total interest expense


746,156


78,001


nm

Net interest income


1,793,171


1,070,016


68 %

Provision for credit losses


213,199


84,016


154 %

Non-interest income:







Service charges on deposits


65,525


48,365


35 %

Card-based fees


55,263


37,370


48 %

Brokerage revenue


13,471


90


nm

Residential mortgage banking revenue, net


16,789


106,859


(84) %

Gain on sale of debt securities, net


13


2


nm

Gain (loss) on equity securities, net


2,300


(7,099)


nm

Gain on loan and lease sales, net


4,414


6,696


(34) %

BOLI income


15,624


8,253


89 %

Other income (loss)


30,528


(1,008)


nm

Total non-interest income


203,927


199,528


2 %

Non-interest expense:







Salaries and employee benefits


616,103


441,226


40 %

Occupancy and equipment, net


183,480


138,451


33 %

Intangible amortization


111,296


4,095


nm

FDIC assessments


71,402


13,964


411 %

Merger-related expense


171,659


17,356


nm

Other expenses


158,760


119,858


32 %

Total non-interest expense


1,312,700


734,950


79 %

Income before provision for income taxes


471,199


450,578


5 %

Provision for income taxes


122,484


113,826


8 %

Net income


$             348,715


$             336,752


4 %








Weighted average basic shares outstanding (1)


195,304


129,277


51 %

Weighted average diluted shares outstanding (1)


195,871


129,732


51 %

Earnings per common share – basic (1)


$                  1.79


$                  2.60


(31) %

Earnings per common share – diluted (1)


$                  1.78


$                  2.60


(32) %








(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 merger of 0.5958.

(2)

Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

 

Columbia Banking System, Inc.

Consolidated Balance Sheets

(Unaudited)












% Change (2)

($ in thousands, except per share data)

Dec 31, 2023


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Seq.

Quarter


Year
over
Year

Assets:














Cash and due from banks

$         498,496


$         492,474


$         538,653


$         555,919


$         327,313


1 %


52 %

Interest bearing cash and temporary investments

1,664,038


1,911,221


2,868,563


3,079,266


967,330


(13) %


72 %

Investment securities:














Equity and other, at fair value

76,995


73,638


76,361


76,532


72,959


5 %


6 %

Available for sale, at fair value

8,829,870


8,503,986


8,998,428


9,249,600


3,196,166


4 %


176 %

Held to maturity, at amortized cost

2,300


2,344


2,388


2,432


2,476


(2) %


(7) %

Loans held for sale

30,715


60,313


183,633


49,338


71,647


(49) %


(57) %

Loans and leases

37,441,951


37,170,598


37,049,299


37,091,280


26,155,981


1 %


43 %

Allowance for credit losses on loans and leases

(440,871)


(416,560)


(404,603)


(417,464)


(301,135)


6 %


46 %

Net loans and leases

37,001,080


36,754,038


36,644,696


36,673,816


25,854,846


1 %


43 %

Restricted equity securities

179,274


168,524


258,524


246,525


47,144


6 %


280 %

Premises and equipment, net

338,970


337,855


368,698


375,190


176,016


0 %


93 %

Operating lease right-of-use assets

115,811


114,220


119,255


127,296


78,598


1 %


47 %

Goodwill

1,029,234


1,029,234


1,029,234


1,030,142



0 %


nm

Other intangible assets, net

603,679


636,883


666,762


702,315


4,745


(5) %


nm

Residential mortgage servicing rights, at fair value

109,243


117,640


172,929


178,800


185,017


(7) %


(41) %

Bank owned life insurance

680,948


648,232


643,727


641,922


331,759


5 %


105 %

Deferred tax asset, net

347,203


469,841


362,880


351,229


132,823


(26) %


161 %

Other assets

665,740


673,372


657,365


653,904


399,800


(1) %


67 %

Total assets

$     52,173,596


$     51,993,815


$     53,592,096


$     53,994,226


$     31,848,639


0 %


64 %

Liabilities:














 Deposits














Non-interest bearing

$     14,256,452


$     15,532,948


$     16,019,408


$     17,215,781


$     10,288,849


(8) %


39 %

Interest bearing

27,350,568


26,091,420


24,815,509


24,370,566


16,776,763


5 %


63 %

  Total deposits

41,607,020


41,624,368


40,834,917


41,586,347


27,065,612


0 %


54 %

Securities sold under agreements to repurchase

252,119


258,383


294,914


271,047


308,769


(2) %


(18) %

Borrowings

3,950,000


3,985,000


6,250,000


5,950,000


906,175


(1) %


336 %

Junior subordinated debentures, at fair value

316,440


331,545


312,872


297,721


323,639


(5) %


(2) %

Junior and other subordinated debentures, at amortized cost

107,895


107,952


108,009


108,066


87,813


0 %


23 %

Operating lease liabilities

130,576


129,845


132,099


140,648


91,694


1 %


42 %

Other liabilities

814,512


924,560


831,097


755,674


585,111


(12) %


39 %

Total liabilities

47,178,562


47,361,653


48,763,908


49,109,503


29,368,813


0 %


61 %

Shareholders' equity:














Common stock

5,802,747


5,798,167


5,792,792


5,788,553


3,450,493


0 %


68 %

Accumulated deficit

(467,571)


(485,576)


(545,842)


(603,696)


(543,803)


(4) %


(14) %

Accumulated other comprehensive loss

(340,142)


(680,429)


(418,762)


(300,134)


(426,864)


(50) %


(20) %

Total shareholders' equity

4,995,034


4,632,162


4,828,188


4,884,723


2,479,826


8 %


101 %

Total liabilities and shareholders' equity

$     52,173,596


$     51,993,815


$     53,592,096


$     53,994,226


$     31,848,639


0 %


64 %















Common shares outstanding at period end (1)

208,585


208,575


208,514


208,429


129,321


0 %


61 %

(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 merger of 0.5958.

(2)

Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

 

Columbia Banking System, Inc.

Financial Highlights

(Unaudited)



Quarter Ended


% Change



Dec 31,
2023


Sep 30,
2023


Jun 30,
2023


Mar 31,
2023


Dec 31,
2022


Seq.
Quarter


Year
over
Year

Per Common Share Data: (5)















Dividends (5)


$         0.36


$         0.36


$         0.36


$         0.35


$         0.35


0 %


3 %

Book value (5)


$       23.95


$       22.21


$       23.16


$       23.44


$       19.18


8 %


25 %

Tangible book value (1),(5)


$       16.12


$       14.22


$       15.02


$       15.12


$       19.14


13 %


(16) %
















Performance Ratios:















Efficiency ratio (2)


64.81 %


57.82 %


62.60 %


79.71 %


57.24 %


6.99


7.57

Return on average assets ("ROAA")


0.72 %


1.02 %


1.00 %


(0.14) %


1.04 %


(0.30)


(0.32)

Pre-provision net revenue ("PPNR") ROAA (1)


1.39 %


1.65 %


1.46 %


0.89 %


1.82 %


(0.26)


(0.43)

Return on average common equity


7.90 %


11.07 %


10.84 %


(1.70) %


13.50 %


(3.17)


(5.60)

Return on average tangible common equity (1)


12.19 %


16.93 %


16.63 %


(2.09) %


13.53 %


(4.74)


(1.34)
















Performance Ratios - Operating: (1)















Operating efficiency ratio (1), (2)


64.47 %


51.97 %


54.85 %


53.46 %


52.01 %


12.50


12.46

Operating ROAA (1)


0.70 %


1.23 %


1.27 %


0.74 %


1.24 %


(0.53)


(0.54)

Operating PPNR ROAA (1)


1.37 %


1.94 %


1.82 %


2.01 %


2.10 %


(0.57)


(0.73)

Operating return on average common equity (1)


7.73 %


13.40 %


13.77 %


8.66 %


16.14 %


(5.67)


(8.41)

Operating return on average tangible common equity (1)


11.92 %


20.48 %


21.13 %


10.64 %


16.18 %


(8.56)


(4.26)
















Average Balance Sheet Yields, Rates, & Ratios:















Yield on loans and leases


6.13 %


6.08 %


5.95 %


5.55 %


4.92 %


0.05


1.21

Yield on earning assets (2)


5.75 %


5.65 %


5.48 %


5.19 %


4.62 %


0.10


1.13

Cost of interest bearing deposits


2.54 %


2.01 %


1.64 %


1.32 %


0.77 %


0.53


1.77

Cost of interest bearing liabilities


3.02 %


2.72 %


2.45 %


1.82 %


1.05 %


0.30


1.97

Cost of total deposits


1.63 %


1.23 %


0.99 %


0.80 %


0.46 %


0.40


1.17

Cost of total funding (3)


2.05 %


1.81 %


1.61 %


1.16 %


0.65 %


0.24


1.40

Net interest margin (2)


3.78 %


3.91 %


3.93 %


4.08 %


4.01 %


(0.13)


(0.23)

Average interest bearing cash / Average interest earning assets


3.64 %


5.17 %


5.47 %


4.33 %


3.62 %


(1.53)


0.02

Average loans and leases / Average interest earning assets


78.04 %


75.64 %


75.18 %


80.96 %


85.32 %


2.40


(7.28)

Average loans and leases / Average total deposits


89.91 %


90.63 %


90.98 %


93.01 %


95.85 %


(0.72)


(5.94)

Average non-interest bearing deposits / Average total deposits


35.88 %


38.55 %


40.05 %


39.55 %


40.30 %


(2.67)


(4.42)

Average total deposits / Average total funding (3)


90.02 %


86.66 %


85.59 %


91.36 %


94.52 %


3.36


(4.50)
















Select Credit & Capital Ratios:















Non-performing loans and leases to total loans and leases


0.30 %


0.28 %


0.22 %


0.20 %


0.22 %


0.02


0.08

Non-performing assets to total assets


0.22 %


0.20 %


0.15 %


0.14 %


0.18 %


0.02


0.04

Allowance for credit losses to loans and leases


1.24 %


1.18 %


1.15 %


1.18 %


1.21 %


0.06


0.03

Total risk-based capital ratio (4)


11.8 %


11.6 %


11.3 %


10.9 %


13.7 %


0.20


(1.90)

Common equity tier 1 risk-based capital ratio (4)


9.6 %


9.5 %


9.2 %


8.9 %


11.0 %


0.10


(1.40)

(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  merger of 0.5958.

 

Columbia Banking System, Inc.

Financial Highlights

(Unaudited)



Twelve months ended


% Change



Dec 31, 2023


Dec 31, 2022


Year over Year

Per Common Share Data: (4)







Dividends (4)


$                      1.43


$                      1.40


2.14 %








Performance Ratios:







Efficiency ratio (2)


65.59 %


57.83 %


7.76

ROAA


0.70 %


1.09 %


(0.39)

PPNR ROAA (1)


1.38 %


1.73 %


(0.35)

Return on average common equity


7.81 %


13.07 %


(5.26)

Return on average tangible common equity (1)


11.46 %


13.11 %


(1.65)








Performance Ratios - Operating: (1)







Operating efficiency ratio (1), (2)


56.21 %


55.66 %


0.55

Operating ROAA (1)


1.00 %


1.17 %


(0.17)

Operating PPNR ROAA (1)


1.77 %


1.83 %


(0.06)

Operating return on average common equity (1)


11.12 %


13.97 %


(2.85)

Operating return on average tangible common equity (1)


16.32 %


14.00 %


2.32








Average Balance Sheet Yields, Rates, & Ratios:







Yield on loans and leases


5.95 %


4.29 %


1.66

Yield on earning assets (2)


5.54 %


3.88 %


1.66

Cost of interest bearing deposits


1.93 %


0.31 %


1.62

Cost of interest bearing liabilities


2.56 %


0.47 %


2.09

Cost of total deposits


1.19 %


0.18 %


1.01

Cost of total funding (3)


1.69 %


0.28 %


1.41

Net interest margin (2)


3.91 %


3.62 %


0.29

Average interest bearing cash / Average interest earning assets


4.68 %


5.28 %


(0.60)

Average loans and leases / Average interest earning assets


77.21 %


81.96 %


(4.75)

Average loans and leases / Average total deposits


91.01 %


90.91 %


0.10

Average non-interest bearing deposits / Average total deposits


38.37 %


41.48 %


(3.11)

Average total deposits / Average total funding (3)


88.18 %


96.06 %


(7.88)

(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 merger of 0.5958.

 

Columbia Banking System, Inc.

Loan & Lease Portfolio Balances and Mix

(Unaudited)


Dec 31, 2023


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 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

$    6,482,940


$    6,490,638


$    6,434,673


$    6,353,550


$    3,894,840


0 %


66 %

Owner occupied term, net

5,195,605


5,235,227


5,254,401


5,156,848


2,567,761


(1) %


102 %

Multifamily, net

5,704,734


5,684,495


5,622,875


5,590,587


5,285,791


0 %


8 %

Construction & development, net

1,747,302


1,669,918


1,528,924


1,467,561


1,077,346


5 %


62 %

Residential development, net

323,899


354,922


388,641


440,667


200,838


(9) %


61 %

Commercial:














Term, net

5,536,765


5,437,915


5,449,787


5,906,774


3,029,547


2 %


83 %

Lines of credit & other, net

2,430,127


2,353,548


2,268,790


2,184,762


960,054


3 %


153 %

Leases & equipment finance, net

1,729,512


1,728,991


1,740,037


1,746,267


1,706,172


0 %


1 %

Residential:














Mortgage, net

6,157,166


6,121,838


6,272,898


6,187,964


5,647,035


1 %


9 %

Home equity loans & lines, net

1,938,166


1,899,948


1,898,958


1,870,002


1,631,965


2 %


19 %

   Consumer & other, net

195,735


193,158


189,315


186,298


154,632


1 %


27 %

Total loans and leases, net of deferred fees and costs

$  37,441,951


$  37,170,598


$  37,049,299


$  37,091,280


$  26,155,981


1 %


43 %















Loans and leases mix:














Commercial real estate:














   Non-owner occupied term, net

17 %


17 %


17 %


16 %


15 %





   Owner occupied term, net

14 %


14 %


14 %


14 %


10 %





   Multifamily, net

15 %


15 %


15 %


15 %


20 %





Construction & development, net

5 %


4 %


4 %


4 %


4 %





Residential development, net

1 %


1 %


1 %


1 %


1 %





Commercial:














Term, net

15 %


15 %


15 %


16 %


12 %





Lines of credit & other, net

6 %


6 %


6 %


6 %


4 %





Leases & equipment finance, net

5 %


5 %


5 %


5 %


6 %





Residential:














Mortgage, net

16 %


17 %


17 %


17 %


21 %





Home equity loans & lines, net

5 %


5 %


5 %


5 %


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)


Dec 31, 2023


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


% Change

($ in thousands)

Amount


Amount


Amount


Amount


Amount


Seq.
Quarter


Year
over
Year

Deposits:














Demand, non-interest bearing

$  14,256,452


$  15,532,948


$  16,019,408


$  17,215,781


$  10,288,849


(8) %


39 %

Demand, interest bearing

8,044,432


6,898,831


6,300,082


5,900,462


4,080,469


17 %


97 %

Money market

10,324,454


10,349,217


10,115,908


10,681,422


7,721,011


0 %


34 %

Savings

2,754,113


3,018,706


3,171,714


3,469,112


2,265,052


(9) %


22 %

Time

6,227,569


5,824,666


5,227,805


4,319,570


2,710,231


7 %


130 %

Total

$  41,607,020


$  41,624,368


$  40,834,917


$  41,586,347


$  27,065,612


0 %


54 %















Total core deposits (1)

$  37,423,402


$  37,597,830


$  37,639,368


$  39,155,298


$  25,616,010


0 %


46 %















Deposit mix:














Demand, non-interest bearing

34 %


37 %


39 %


41 %


38 %





Demand, interest bearing

19 %


17 %


15 %


14 %


15 %





Money market

25 %


25 %


25 %


26 %


29 %





Savings

7 %


7 %


8 %


9 %


8 %





Time

15 %


14 %


13 %


10 %


10 %





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 (2)

($ in thousands)

Dec 31, 2023


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Seq.

Quarter


Year
over
Year

Non-performing assets:














Loans and leases on non-accrual status:















Commercial real estate, net

$     28,689


$     26,053


$     10,994


$     15,612


$       5,011


10 %


473 %


Commercial, net

45,682


44,341


39,316


42,301


25,691


3 %


78 %


Total loans and leases on non-accrual status

74,371


70,394


50,310


57,913


30,702


6 %


142 %

Loans and leases past due 90+ days and accruing (1):















Commercial real estate, net

870


71


184


1


1


nm


nm


Commercial, net

8,232


8,606


7,720


151


7,909


(4) %


4 %


Residential, net (1)

29,102


25,180


21,370


17,423


19,894


16 %


46 %


Consumer & other, net

326


240


399


140


134


36 %


143 %


Total loans and leases past due 90+ days and accruing (1)

38,530


34,097


29,673


17,715


27,938


13 %


38 %

Total non-performing loans and leases

112,901


104,491


79,983


75,628


58,640


8 %


93 %

Other real estate owned

1,036


1,170


278


409


203


(11) %


410 %

Total non-performing assets

$    113,937


$    105,661


$     80,261


$     76,037


$     58,843


8 %


94 %
















Loans and leases past due 31-89 days

$     85,235


$     82,918


$     73,376


$     78,641


$     64,893


3 %


31 %

Loans and leases past due 31-89 days to total loans and leases

0.23 %


0.22 %


0.20 %


0.21 %


0.25 %


0.01


(0.02)

Non-performing loans and leases to total loans and leases (1)

0.30 %


0.28 %


0.22 %


0.20 %


0.22 %


0.02


0.08

Non-performing assets to total assets (1)

0.22 %


0.20 %


0.15 %


0.14 %


0.18 %


0.02


0.04

(1)

Excludes certain mortgage loans guaranteed by Ginnie Mae, which Columbia has the unilateral right to repurchase but has not done so, totaling $1.0 million, $700,000, $1.6 million, $5.4 million, and $6.6 million at December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.

(2)

Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

 


Columbia Banking System, Inc.


Credit Quality – Allowance for Credit Losses


(Unaudited)



Quarter Ended


% Change (2)

($ in thousands)

Dec 31, 2023


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Seq.

Quarter


Year
over
Year

Allowance for credit losses on loans and leases (ACLLL)














Balance, beginning of period

$    416,560


$    404,603


$    417,464


$    301,135


$    283,065


3 %


47 %

Initial ACL recorded for PCD loans acquired during the period




26,492



nm


nm

Provision for credit losses on loans and leases (1)

53,183


35,082


15,216


106,498


30,580


52 %


74 %

Charge-offs















Commercial real estate, net

(629)



(174)



(128)


nm


391 %


Commercial, net

(31,949)


(26,629)


(32,036)


(19,248)


(14,721)


20 %


117 %


Residential, net

(89)


(206)


(4)


(248)


(53)


(57) %


68 %


Consumer & other, net

(1,841)


(1,884)


(1,264)


(773)


(906)


(2) %


103 %


Total charge-offs

(34,508)


(28,719)


(33,478)


(20,269)


(15,808)


20 %


118 %

Recoveries















Commercial real estate, net

35


31


209


58


163


13 %


(79) %


Commercial, net

4,414


4,901


4,511


3,058


2,708


(10) %


63 %


Residential, net

781


156


63


123


24


401 %


nm


Consumer & other, net

406


506


618


369


403


(20) %


1 %


Total recoveries

5,636


5,594


5,401


3,608


3,298


1 %


71 %

Net (charge-offs) recoveries















Commercial real estate, net

(594)


31


35


58


35


nm


nm


Commercial, net

(27,535)


(21,728)


(27,525)


(16,190)


(12,013)


27 %


129 %


Residential, net

692


(50)


59


(125)


(29)


nm


nm


Consumer & other, net

(1,435)


(1,378)


(646)


(404)


(503)


4 %


185 %


Total net charge-offs

(28,872)


(23,125)


(28,077)


(16,661)


(12,510)


25 %


131 %

Balance, end of period

$    440,871


$    416,560


$    404,603


$    417,464


$    301,135


6 %


46 %

Reserve for unfunded commitments














Balance, beginning of period

$     21,482


$     19,827


$     19,029


$     14,221


$     11,853


8 %


81 %

Initial ACL recorded for unfunded commitments acquired during the period




5,767



nm


nm

Provision (recapture) for credit losses on unfunded commitments

1,726


1,655


798


(959)


2,368


4 %


(27) %

Balance, end of period

23,208


21,482


19,827


19,029


14,221


8 %


63 %

Total Allowance for credit losses (ACL)

$    464,079


$    438,042


$    424,430


$    436,493


$    315,356


6 %


47 %















Net charge-offs to average loans and leases (annualized)

0.31 %


0.25 %


0.30 %


0.23 %


0.19 %


0.06


0.12

Recoveries to gross charge-offs

16.33 %


19.48 %


16.13 %


17.80 %


20.86 %


(3.15)


(4.53)

ACLLL to loans and leases

1.18 %


1.12 %


1.09 %


1.13 %


1.15 %


0.06


0.03

ACL to loans and leases

1.24 %


1.18 %


1.15 %


1.18 %


1.21 %


0.06


0.03

(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.

(2)

Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

 

Columbia Banking System, Inc.

Credit Quality – Allowance for Credit Losses

(Unaudited)



Twelve Months Ended


% Change (2)

($ in thousands)


Dec 31, 2023


Dec 31, 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)


209,979


83,605


151 %

Charge-offs








Commercial real estate, net


(803)


(136)


490 %


Commercial, net


(109,862)


(41,073)


167 %


Residential, net


(547)


(224)


144 %


Consumer & other, net


(5,762)


(3,556)


62 %


Total charge-offs


(116,974)


(44,989)


160 %

Recoveries








Commercial real estate, net


333


384


(13) %


Commercial, net


16,884


11,029


53 %


Residential, net


1,123


662


70 %


Consumer & other, net


1,899


2,032


(7) %


Total recoveries


20,239


14,107


43 %

Net (charge-offs) recoveries








Commercial real estate, net


(470)


248


(290) %


Commercial, net


(92,978)


(30,044)


209 %


Residential, net


576


438


32 %


Consumer & other, net


(3,863)


(1,524)


153 %


Total net charge-offs


(96,735)


(30,882)


213 %

Balance, end of period


$          440,871


$          301,135


46 %

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

Provision for credit losses on unfunded commitments


3,220


1,454


121 %

Balance, end of period


23,208


14,221


63 %

Total Allowance for credit losses (ACL)


$          464,079


$          315,356


47 %








Net charge-offs to average loans and leases (annualized)


0.27 %


0.13 %


0.14

Recoveries to gross charge-offs


17.30 %


31.36 %


(14.06)

(1)

For the twelve months ended December 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.

(2)

Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

 

Columbia Banking System, Inc.

Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates

(Unaudited)


Quarter Ended


December 31, 2023


September 30, 2023


December 31, 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

$        48,868


$       649


5.31 %


$      199,855


$     1,741


3.49 %


$      110,850


$     1,603


5.79 %

Loans and leases (1)

37,333,310


577,092


6.13 %


37,050,518


567,929


6.08 %


25,855,556


320,747


4.92 %

Taxable securities

7,903,053


82,872


4.19 %


8,356,165


85,007


4.07 %


3,042,044


18,290


2.40 %

Non-taxable securities (2)

809,551


8,073


3.99 %


844,417


8,085


3.83 %


200,825


1,571


3.13 %

Temporary investments and interest-bearing cash

1,743,447


24,055


5.47 %


2,530,150


34,407


5.40 %


1,095,854


10,319


3.74 %

Total interest-earning assets

47,838,229


$ 692,741


5.75 %


48,981,105


$ 697,169


5.65 %


30,305,129


$ 352,530


4.62 %

Goodwill and other intangible assets

1,652,282






1,684,093






5,298





Other assets

2,341,845






2,346,163






1,327,063





Total assets

$  51,832,356






$  53,011,361






$  31,637,490





INTEREST-BEARING LIABILITIES:


















Interest-bearing demand deposits

$   7,617,427


$   44,861


2.34 %


$   6,578,849


$   25,209


1.52 %


$   4,005,643


$     5,372


0.53 %

Money market deposits

10,276,894


61,055


2.36 %


10,249,028


50,039


1.94 %


7,651,974


17,473


0.91 %

Savings deposits

2,880,622


698


0.10 %


3,109,779


1,253


0.16 %


2,345,564


226


0.04 %

Time deposits

5,847,400


64,045


4.35 %


5,184,089


50,473


3.86 %


2,100,803


8,103


1.53 %

Total interest-bearing deposits

26,622,343


170,659


2.54 %


25,121,745


126,974


2.01 %


16,103,984


31,174


0.77 %

Repurchase agreements and federal funds purchased

245,989


1,226


1.98 %


268,444


1,220


1.80 %


354,624


323


0.36 %

Borrowings

3,918,261


56,066


5.68 %


5,603,207


77,080


5.46 %


796,414


8,023


4.00 %

Junior and other subordinated debentures

440,007


10,060


9.07 %


420,582


9,864


9.30 %


413,708


7,248


6.95 %

Total interest-bearing liabilities

31,226,600


$ 238,011


3.02 %


31,413,978


$ 215,138


2.72 %


17,668,730


$   46,768


1.05 %

Non-interest-bearing deposits

14,899,001






15,759,720






10,870,842





Other liabilities

1,011,019






970,688






659,279





Total liabilities

47,136,620






48,144,386






29,198,851





Common equity

4,695,736






4,866,975






2,438,639





Total liabilities and shareholders' equity

$  51,832,356






$  53,011,361






$  31,637,490





NET INTEREST INCOME (2)



$ 454,730






$ 482,031






$ 305,762



NET INTEREST SPREAD





2.73 %






2.93 %






3.57 %

NET INTEREST INCOME TO EARNING ASSETS
OR NET INTEREST MARGIN (1), (2)





3.78 %






3.91 %






4.01 %

(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 $1.1 million for the three months ended December 31, 2023, as compared to $1.2 million for the three months ended September 30, 2023 and $283,000 for the three months ended December 31, 2022. 

 

Columbia Banking System, Inc.

Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates

(Unaudited)


Twelve months ended


December 31, 2023


December 31, 2022

($ in thousands)

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

$           87,675


$         3,871


4.42 %


$         208,141


$         8,812


4.23 %

Loans and leases (1)

35,412,594


2,109,744


5.95 %


24,225,518


1,041,446


4.29 %

Taxable securities

7,479,573


289,944


3.88 %


3,343,721


72,702


2.17 %

Non-taxable securities (2)

740,376


28,236


3.81 %


216,943


6,669


3.07 %

Temporary investments and interest-bearing cash

2,147,348


111,659


5.20 %


1,561,808


19,706


1.26 %

Total interest-earning assets

45,867,566


$   2,543,454


5.54 %


29,556,131


$   1,149,335


3.88 %

Goodwill and other intangible assets

1,423,075






6,847





Other assets

2,205,678






1,254,418





Total assets

$     49,496,319






$     30,817,396





INTEREST-BEARING LIABILITIES:












Interest-bearing demand deposits

$      6,280,333


$       97,162


1.55 %


$      3,886,390


$         8,185


0.21 %

Money market deposits

9,962,837


185,035


1.86 %


7,552,666


26,415


0.35 %

Savings deposits

2,994,333


3,384


0.11 %


2,411,448


880


0.04 %

Time deposits

4,743,615


176,073


3.71 %


1,743,988


12,715


0.73 %

Total interest-bearing deposits

23,981,118


461,654


1.93 %


15,594,492


48,195


0.31 %

Repurchase agreements and federal funds purchased

269,853


3,923


1.45 %


465,600


997


0.21 %

Borrowings

4,522,656


242,914


5.37 %


226,665


8,920


3.94 %

Junior and other subordinated debentures

421,195


37,665


8.94 %


399,568


19,889


4.98 %

Total interest-bearing liabilities

29,194,822


$     746,156


2.56 %


16,686,325


$       78,001


0.47 %

Non-interest-bearing deposits

14,927,443






11,053,921





Other liabilities

907,329






501,573





Total liabilities

45,029,594






28,241,819





Common equity

4,466,725






2,575,577





Total liabilities and shareholders' equity

$     49,496,319






$     30,817,396





NET INTEREST INCOME (2)



$   1,797,298






$   1,071,334



NET INTEREST SPREAD





2.98 %






3.41 %

NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)





3.91 %






3.62 %













(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 $4.1 million for the twelve months ended December 31, 2023, as compared to $1.3 million for the same period in 2022. 

 

Columbia Banking System, Inc.

Residential Mortgage Banking Activity

(Unaudited)


Quarter Ended


% Change (1)

($ in thousands)

Dec 31, 2023


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Seq.
Quarter


Year
over
Year

Residential mortgage banking revenue:














Origination and sale

$       2,686


$       2,442


$       3,166


$       3,587


$       4,252


10 %


(37) %

Servicing

5,966


8,887


9,167


9,397


9,184


(33) %


(35) %

Change in fair value of MSR asset:














Changes due to collection/realization of expected cash flows over time

(3,215)


(4,801)


(4,797)


(4,881)


(4,986)


(33) %


(36) %

Changes due to valuation inputs or assumptions

(6,251)


5,308


(2,242)


(2,937)


(9,914)


(218) %


(37) %

MSR hedge gain (loss)

5,026


(4,733)


(7,636)


2,650


(348)


nm


nm

Total

$       4,212


$       7,103


$      (2,342)


$       7,816


$      (1,812)


(41) %


nm















Closed loan volume for-sale

$     87,033


$    103,333


$    119,476


$    131,726


$    216,833


(16) %


(60) %

Gain on sale margin

3.09 %


2.36 %


2.65 %


2.72 %


1.96 %


0.73


1.13















Residential mortgage servicing rights:














Balance, beginning of period

$    117,640


$    172,929


$    178,800


$    185,017


$    196,177


(32) %


(40) %

Additions for new MSR capitalized

920


1,658


1,168


1,601


3,740


(45) %


(75) %

Sale of MSR assets

149


(57,454)





nm


nm

Change in fair value of MSR asset:














Changes due to collection/realization of expected cash flows over time

(3,215)


(4,801)


(4,797)


(4,881)


(4,986)


(33) %


(36) %

Changes due to valuation inputs or assumptions

(6,251)


5,308


(2,242)


(2,937)


(9,914)


(218) %


(37) %

Balance, end of period

$    109,243


$    117,640


$    172,929


$    178,800


$    185,017


(7) %


(41) %















Residential mortgage loans serviced for others

$   8,175,664


$ 8,240,950


$  12,726,615


$  12,914,046


$  13,020,189


(1) %


(37) %

MSR as % of serviced portfolio

1.34 %


1.43 %


1.36 %


1.38 %


1.42 %


(0.09)


(0.08)

(1) Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

 

Columbia Banking System, Inc.

Residential Mortgage Banking Activity

(Unaudited)


Twelve Months Ended


% Change (1)

($ in thousands)

Dec 31, 2023


Dec 31, 2022


Year over
Year

Residential mortgage banking revenue:






Origination and sale

$          11,881


$          46,712


(75) %

Servicing

33,417


37,358


(11) %

Change in fair value of MSR asset:






Changes due to collection/realization of expected cash flows over time

(17,694)


(20,272)


(13) %

Changes due to valuation inputs or assumptions

(6,122)


57,537


(111) %

MSR hedge loss

(4,693)


(14,476)


(68) %

Total

$          16,789


$        106,859


(84) %







Closed loan volume for-sale

$        441,568


$      1,839,466


(76) %

Gain on sale margin

2.69 %


2.54 %


0.15







Residential mortgage servicing rights:






Balance, beginning of period

$        185,017


$        123,615


50 %

Additions for new MSR capitalized

5,347


24,137


(78) %

Sale of MSR assets

(57,305)



nm

Change in fair value of MSR asset:






Changes due to collection/realization of expected cash flows over time

(17,694)


(20,272)


(13) %

Changes due to valuation inputs or assumptions

(6,122)


57,537


(111) %

Balance, end of period

$        109,243


$        185,017


(41) %







(1)

Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

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 (2)

($ in thousands, except per share data)



Dec 31, 2023


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Seq.
Quarter


Year
over
Year

Total shareholders' equity

a


$  4,995,034


$  4,632,162


$  4,828,188


$  4,884,723


$  2,479,826


8 %


101 %

Less: Goodwill



1,029,234


1,029,234


1,029,234


1,030,142



0 %


nm

Less: Other intangible assets, net



603,679


636,883


666,762


702,315


4,745


(5) %


nm

Tangible common shareholders' equity

b


$  3,362,121


$  2,966,045


$  3,132,192


$  3,152,266


$  2,475,081


13 %


36 %

















Total assets

c


$   52,173,596


$   51,993,815


$   53,592,096


$   53,994,226


$   31,848,639


0 %


64 %

Less: Goodwill



1,029,234


1,029,234


1,029,234


1,030,142



0 %


nm

Less: Other intangible assets, net



603,679


636,883


666,762


702,315


4,745


(5) %


nm

Tangible assets

d


$   50,540,683


$   50,327,698


$   51,896,100


$   52,261,769


$   31,843,894


0 %


59 %

Common shares outstanding at period end (1)

e


208,585


208,575


208,514


208,429


129,321


0 %


61 %

















Total shareholders' equity to total assets ratio

a / c


9.57 %


8.91 %


9.01 %


9.05 %


7.79 %


0.66


1.78

Tangible common equity ratio

b / d


6.65 %


5.89 %


6.04 %


6.03 %


7.77 %


0.76


(1.12)

Book value per common share (1)

a / e


$           23.95


$           22.21


$           23.16


$           23.44


$           19.18


8 %


25 %

Tangible book value per common share (1)

b / e


$           16.12


$           14.22


$           15.02


$           15.12


$           19.14


13 %


(16) %

















(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 merger of 0.5958.

(2)

Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

 

Columbia Banking System, Inc.

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)




Quarter Ended


% Change (1)

($ in thousands)



Dec 31, 2023


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Seq.
Quarter


Year
over
Year

Non-Interest Income Adjustments
















Gain on sale of debt securities, net



$                     9


$                     4


$                     —


$                   —


$                   —


125 %


nm

(Loss) gain on equity securities, net



2,636


(2,055)


(697)


2,416


284


nm


nm

Gain (loss) on swap derivatives



(8,042)


5,700


1,288


(3,543)


(2,329)


(241) %


245 %

Change in fair value of certain loans held for investment



19,354


(19,247)


(6,965)


9,488


4,192


nm


362 %

Change in fair value of MSR due to valuation inputs or assumptions



(6,251)


5,308


(2,242)


(2,937)


(9,914)


(218) %


(37) %

MSR hedge (loss) gain



5,026


(4,733)


(7,636)


2,650


(348)


nm


nm

Total non-interest income adjustments

a


$          12,732


$        (15,023)


$         (16,252)


$             8,074


$          (8,115)


nm


nm

















Non-Interest Expense Adjustments
















Merger-related expense



$             7,174


$          18,938


$            29,649


$        115,898


$          11,637


(62) %


(38) %

Exit and disposal costs



2,791


4,017


2,119


1,291


1,966


(31) %


42 %

Total non-interest expense adjustments

b


$             9,965


$          22,955


$            31,768


$        117,189


$          13,603


(57) %


(27) %

















Net interest income

c


$        453,623


$        480,875


$         483,975


$        374,698


$        305,479


(6) %


48 %

















Non-interest income (GAAP)

d


$          65,533


$          43,981


$            39,678


$          54,735


$          34,879


49 %


88 %

Less: Non-interest income adjustments

a


(12,732)


15,023


16,252


(8,074)


8,115


(185) %


(257) %

Operating non-interest income (non-GAAP)

e


$          52,801


$          59,004


$            55,930


$          46,661


$          42,994


(11) %


23 %

















Revenue (GAAP)

f=c+d


$        519,156


$        524,856


$         523,653


$        429,433


$        340,358


(1) %


53 %

Operating revenue (non-GAAP)

g=c+e


$        506,424


$        539,879


$         539,905


$        421,359


$        348,473


(6) %


45 %

















Non-interest expense (GAAP)

h


$        337,176


$        304,147


$         328,559


$        342,818


$        194,982


11 %


73 %

Less: Non-interest expense adjustments

b


(9,965)


(22,955)


(31,768)


(117,189)


(13,603)


(57) %


(27) %

Operating non-interest expense (non-GAAP)

i


$        327,211


$        281,192


$         296,791


$        225,629


$        181,379


16 %


80 %

















Net income (loss) (GAAP)

j


$          93,531


$        135,845


$         133,377


$        (14,038)


$          82,964


(31) %


13 %

Provision (benefit) for income taxes



33,540


48,127


45,703


(4,886)


29,464


(30) %


14 %

Income (loss) before provision for income taxes



127,071


183,972


179,080


(18,924)


112,428


(31) %


13 %

Provision for credit losses



54,909


36,737


16,014


105,539


32,948


49 %


67 %

Pre-provision net revenue (PPNR) (non-GAAP)

k


181,980


220,709


195,094


86,615


145,376


(18) %


25 %

Less: Non-interest income adjustments

a


(12,732)


15,023


16,252


(8,074)


8,115


(185) %


(257) %

Add: Non-interest expense adjustments

b


9,965


22,955


31,768


117,189


13,603


(57) %


(27) %

Operating PPNR (non-GAAP)

l


$        179,213


$        258,687


$         243,114


$        195,730


$        167,094


(31) %


7 %

















Net income (loss) (GAAP)

j


$          93,531


$        135,845


$         133,377


$        (14,038)


$          82,964


(31) %


13 %

Less: Non-interest income adjustments

a


(12,732)


15,023


16,252


(8,074)


8,115


(185) %


(257) %

Add: Non-interest expense adjustments

b


9,965


22,955


31,768


117,189


13,603


(57) %


(27) %

Tax effect of adjustments



691


(9,482)


(11,981)


(23,565)


(5,459)


nm


nm

Operating net income (non-GAAP)

m


$          91,455


$        164,341


$         169,416


$          71,512


$          99,223


(44) %


(8) %

 (1)

Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

 

Columbia Banking System, Inc.

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)




Quarter Ended


% Change (3)

($ in thousands, except per share data)



Dec 31, 2023


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Seq.
Quarter


Year
over
Year

Average assets

n


$   51,832,356


$   53,011,361


$   53,540,574


$   39,425,975


$   31,637,490


(2) %


64 %

Less: Average goodwill and other intangible assets, net



1,652,282


1,684,093


1,718,705


623,042


5,298


(2) %


nm

Average tangible assets

o


$   50,180,074


$   51,327,268


$   51,821,869


$   38,802,933


$   31,632,192


(2) %


59 %

















Average common shareholders' equity

p


$     4,695,736


$     4,866,975


$  4,935,239


$     3,349,761


$     2,438,639


(4) %


93 %

Less: Average goodwill and other intangible assets, net



1,652,282


1,684,093


1,718,705


623,042


5,298


(2) %


nm

Average tangible common equity

q


$     3,043,454


$     3,182,882


$  3,216,534


$     2,726,719


$     2,433,341


(4) %


25 %

















Weighted average basic shares outstanding  (1)

r


208,083


208,070


207,977


156,383


129,321


0 %


61 %

Weighted average diluted shares outstanding  (1)

s


208,739


208,645


208,545


156,383


129,801


0 %


61 %

















Select Per-Share & Performance Metrics
















Earnings-per-share - basic (1)

j / r


$            0.45


$            0.65


$             0.64


$         (0.09)


$            0.64


(31) %


(30) %

Earnings-per-share - diluted (1)

j / s


$            0.45


$            0.65


$             0.64


$         (0.09)


$            0.64


(31) %


(30) %

Efficiency ratio (2)

h / f


64.81 %


57.82 %


62.60 %


79.71 %


57.24 %


6.99


7.57

ROAA

j / n


0.72 %


1.02 %


1.00 %


(0.14) %


1.04 %


(0.30)


(0.32)

Return on average tangible assets

j / o


0.74 %


1.05 %


1.03 %


(0.15) %


1.04 %


(0.31)


(0.30)

PPNR ROAA

k / n


1.39 %


1.65 %


1.46 %


0.89 %


1.82 %


(0.26)


(0.43)

Return on average common equity

j / p


7.90 %


11.07 %


10.84 %


(1.70) %


13.50 %


(3.17)


(5.60)

Return on average tangible common equity

j / q


12.19 %


16.93 %


16.63 %


(2.09) %


13.53 %


(4.74)


(1.34)

















Operating Per-Share & Performance Metrics
















Operating earnings-per-share - basic (1)

m / r


$            0.44


$            0.79


$             0.81


$            0.46


$            0.77


(44) %


(43) %

Operating earnings-per-share - diluted (1)

m / s


$            0.44


$            0.79


$             0.81


$            0.46


$            0.76


(44) %


(42) %

Operating efficiency ratio (2)

i / g


64.47 %


51.97 %


54.85 %


53.46 %


52.01 %


12.50


12.46

Operating ROAA

m / n


0.70 %


1.23 %


1.27 %


0.74 %


1.24 %


(0.53)


(0.54)

Operating return on average tangible assets

m / o


0.72 %


1.27 %


1.31 %


0.75 %


1.24 %


(0.55)


(0.52)

Operating PPNR ROAA

l / n


1.37 %


1.94 %


1.82 %


2.01 %


2.10 %


(0.57)


(0.73)

Operating return on average common equity

m / p


7.73 %


13.40 %


13.77 %


8.66 %


16.14 %


(5.67)


(8.41)

Operating return on average tangible common equity

m / q


11.92 %


20.48 %


21.13 %


10.64 %


16.18 %


(8.56)


(4.26)

(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 merger of 0.5958.

(2)

Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate and added to stated revenue for this calculation.

(3) 

Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

 

Columbia Banking System, Inc.

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)




Twelve Months Ended


% Change (1)

($ in thousands)



Dec 31, 2023


Dec 31, 2022


Year over 
Year

Non-Interest Income Adjustments








Gain on sale of debt securities, net



$                                 13


$                                   2


nm

Gain (loss) on equity securities, net



2,300


(7,099)


(132) %

(Loss) gain on swap derivatives



(4,597)


16,249


(128) %

Change in fair value of certain loans held for investment



2,630


(58,464)


(104) %

Change in fair value of MSR due to valuation inputs or assumptions



(6,122)


57,537


(111) %

   MSR hedge loss



(4,693)


(14,476)


(68) %

Total non-interest income adjustments

a


$                         (10,469)


$                           (6,251)


67 %









Non-Interest Expense Adjustments








Merger-related expense



$                        171,659


$                          17,356


nm

Exit and disposal costs



10,218


6,805


50 %

Total non-interest expense adjustments

b


$                        181,877


$                          24,161


nm









Net interest income

c


$                     1,793,171


$                     1,070,016


68 %









Non-interest income (GAAP)

d


$                        203,927


$                        199,528


2 %

Less: Non-interest income adjustments

a


10,469


6,251


67 %

Operating non-interest income (non-GAAP)

e


$                        214,396


$                        205,779


4 %









Revenue (GAAP)

f=c+d


$                     1,997,098


$                     1,269,544


57 %

Operating revenue (non-GAAP)

g=c+e


$                     2,007,567


$                     1,275,795


57 %









Non-interest expense (GAAP)

h


$                     1,312,700


$                        734,950


79 %

Less: Non-interest expense adjustments

b


(181,877)


(24,161)


nm

Operating non-interest expense (non-GAAP)

i


$                     1,130,823


$                        710,789


59 %









Net income (GAAP)

j


$                        348,715


$                        336,752


4 %

Provision for income taxes



122,484


113,826


8 %

Income before provision for income taxes



471,199


450,578


5 %

Provision for credit losses



213,199


84,016


154 %

Pre-provision net revenue (PPNR) (non-GAAP)

k


684,398


534,594


28 %

Less: Non-interest income adjustments

a


10,469


6,251


67 %

Add: Non-interest expense adjustments

b


181,877


24,161


nm

Operating PPNR (non-GAAP)

l


$                        876,744


$                        565,006


55 %









Net income (GAAP)

j


$                        348,715


$                        336,752


4 %

Less: Non-interest income adjustments

a


10,469


6,251


67 %

Add: Non-interest expense adjustments

b


181,877


24,161


nm

Tax effect of adjustments



(44,337)


(7,479)


493 %

Operating net income (non-GAAP)

m


$                       496,724


$                       359,685


38 %

(1)  Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

Average assets

n


$                  49,496,319


$                  30,817,396


61 %

Less: Average goodwill and other intangible assets, net



1,423,075


6,847


nm

Average tangible assets

o


$                  48,073,244


$                  30,810,549


56 %









Average common shareholders' equity

p


$                    4,466,725


$                    2,575,577


73 %

Less: Average goodwill and other intangible assets, net



1,423,075


6,847


nm

Average tangible common equity

q


$                    3,043,650


$                    2,568,730


18 %









Weighted average basic shares outstanding (1)

r


195,304


129,277


51 %

Weighted average diluted shares outstanding (1)

s


195,871


129,732


51 %









Select Per-Share & Performance Metrics








Earnings-per-share - basic (1)

j / r


$                                1.79


$                                2.60


(31) %

Earnings-per-share - diluted (1)

j / s


$                                1.78


$                                2.60


(32) %

Efficiency ratio (2)

h / f


65.59 %


57.83 %


7.76

ROAA

j / n


0.70 %


1.09 %


(0.39)

Return on average tangible assets

j / o


0.73 %


1.09 %


(0.36)

PPNR ROAA

k/n


1.38 %


1.73 %


(0.35)

Return on average common equity

j / p


7.81 %


13.07 %


(5.26)

Return on average tangible common equity

j / q


11.46 %


13.11 %


(1.65)









Operating Per-Share & Performance Metrics








Operating earnings-per-share - basic (1)

m / r


$                                2.54


$                                2.78


(9) %

Operating earnings-per-share - diluted (1)

m / s


$                                2.54


$                                2.77


(8) %

Operating efficiency ratio (2)

i / g


56.21 %


55.66 %


0.55

Operating ROAA

m / n


1.00 %


1.17 %


(0.17)

Operating return on average tangible assets

m / o


1.03 %


1.17 %


(0.14)

Operating PPNR ROAA

l / n


1.77 %


1.83 %


(0.06)

Operating return on average common equity

m / p


11.12 %


13.97 %


(2.85)

Operating return on average tangible common equity

m / q


16.32 %


14.00 %


2.32

(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 merger of 0.5958.

(2)

Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate and added to stated revenue for this calculation.

(3)

Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

 

Columbia Banking System, Inc.

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)




Quarter Ended


% Change (4)

($ in thousands)



Dec 31, 2023


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Seq.
Quarter


Year over
Year

Loans and leases interest income

a


$     577,092


$     567,929


$     551,997


$     412,726


$        320,747


2 %


80 %

Less: Acquired loan accretion - rate related (2), (3)

b


26,914


28,963


30,548


11,832


387


(7) %


nm

Less: Acquired loan accretion - credit related (3)

c


5,430


6,370


7,100


3,806



(15) %


nm

Adjusted loans and leases interest income

d=a-b-c


$     544,748


$     532,596


$     514,349


$     397,088


$        320,360


2 %


70 %

















Taxable securities interest income

e


$       82,872


$       85,007


$       81,617


$       40,448


$          18,290


(3) %


353 %

Less: Acquired taxable securities accretion - rate related

f


34,290


39,219


34,801


15,356



(13) %


nm

Adjusted Taxable securities interest income

g=e-f


$       48,582


$       45,788


$       46,816


$       25,092


$          18,290


6 %


166 %

















Non-taxable securities interest income (1)

h


$         8,073


$         8,085


$         8,010


$         4,068


$            1,571


0 %


414 %

Less: Acquired non-taxable securities accretion - rate related

i


2,309


2,288


2,274


901



1 %


nm

Adjusted Taxable securities interest income (1)

j=h-i


$         5,764


$         5,797


$         5,736


$         3,167


$            1,571


(1) %


267 %

















Interest income (1)

k


$     692,741


$     697,169


$     676,922


$     476,622


$        352,530


(1) %


97 %

Less: Acquired loan and securities accretion - rate related

l=b+f+i


63,513


70,470


67,623


28,089


387


(10) %


nm

Less: Acquired loan accretion - credit related

c


5,430


6,370


7,100


3,806



(15) %


nm

Adjusted interest income (1)

m=k-l-c


$     623,798


$     620,329


$     602,199


$     444,727


$        352,143


1 %


77 %

















Interest-bearing deposits interest expense

n


$     170,659


$     126,974


$     100,408


$       63,613


$          31,174


34 %


447 %

Less: Acquired deposit accretion

o


(187)


(373)


(280)


(93)



(50) %


nm

Adjusted interest-bearing deposits interest expense

p=n-o


$     170,846


$     127,347


$     100,688


$       63,706


$          31,174


34 %


448 %

















Interest expense

q


$     238,011


$     215,138


$     191,754


$     101,253


$          46,768


11 %


409 %

Less: Acquired interest-bearing liabilities accretion (2)

r


(244)


(430)


(337)


(150)


(57)


(43) %


328 %

Adjusted interest expense

s=q-r


$     238,255


$     215,568


$     192,091


$     101,403


$          46,825


11 %


409 %

















Net Interest Income (1)

t


$     454,730


$     482,031


$     485,168


$     375,369


$        305,762


(6) %


49 %

Less: Acquired loan, securities, and interest-bearing liabilities accretion - rate related (3)

u=l-r


63,757


70,900


67,960


28,239


444


(10) %


nm

Less: Acquired loan accretion - credit related (3)

c


5,430


6,370


7,100


3,806



(15) %


nm

Adjusted net interest income (1)

v=t-u-c


$     385,543


$     404,761


$     410,108


$     343,324


$        305,318


(5) %


26 %

















Average loans and leases

aa


37,333,310


37,050,518


37,169,315


29,998,630


25,855,556


1 %


44 %

Average taxable securities

ab


7,903,053


8,356,165


8,656,147


4,960,966


3,042,044


(5) %


160 %

Average non-taxable securities

ac


809,551


844,417


865,278


437,020


200,825


(4) %


303 %

Average interest-earning assets

ad


47,838,229


48,981,105


49,442,518


37,055,705


30,305,129


(2) %


58 %

Average interest-bearing deposits

ae


26,622,343


25,121,745


24,494,717


19,496,551


16,103,984


6 %


65 %

Average interest-bearing liabilities

af


31,226,600


31,413,978


31,372,416


22,548,264


17,668,730


(1) %


77 %

(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 the closing of the merger. 

(4)         

Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

 

Columbia Banking System, Inc.

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)




Quarter Ended


% Change

($ in thousands)



Dec 31, 2023


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Seq.
Quarter


Year over
Year

Average yield on loans and leases

a / aa


6.13 %


6.08 %


5.95 %


5.55 %


4.92 %


0.05


1.21

Less: Acquired loan accretion - rate related (2),(3)

b / aa


0.29 %


0.31 %


0.33 %


0.16 %


0.01 %


(0.02)


0.28

Less: Acquired loan accretion - credit related (3)

c / aa


0.06 %


0.07 %


0.08 %


0.05 %


— %


(0.01)


0.06

Adjusted average yield on loans and leases

d / aa


5.78 %


5.70 %


5.54 %


5.34 %


4.91 %


0.08


0.87

















Average yield on taxable securities

e / ab


4.19 %


4.07 %


3.77 %


3.26 %


2.40 %


0.12


1.79

Less: Acquired taxable securities accretion - rate related

f / ab


1.72 %


1.86 %


1.61 %


1.26 %


— %


(0.14)


1.72

Adjusted average yield on taxable securities

g / ab


2.47 %


2.21 %


2.16 %


2.00 %


2.40 %


0.26


0.07

















Average yield on non-taxable securities (1)

h / ac


3.99 %


3.83 %


3.70 %


3.72 %


3.13 %


0.16


0.86

Less: Acquired non-taxable securities accretion - rate related

i / ac


1.13 %


1.07 %


1.05 %


0.84 %


— %


0.06


1.13

Adjusted yield on non-taxable securities (1)

j / ac


2.86 %


2.76 %


2.65 %


2.88 %


3.13 %


0.10


(0.27)

















Average yield on interest-earning assets (1)

k / ad


5.75 %


5.65 %


5.48 %


5.19 %


4.62 %


0.10


1.13

Less: Acquired loan and securities accretion - rate related

l / ad


0.53 %


0.57 %


0.55 %


0.31 %


0.01 %


(0.04)


0.52

Less: Acquired loan accretion - credit related

c / ad


0.05 %


0.05 %


0.06 %


0.04 %


— %



0.05

Adjusted average yield on interest-earning assets (1)

m / ad


5.17 %


5.03 %


4.87 %


4.84 %


4.61 %


0.14


0.56

















Average rate on interest-bearing deposits

n / ae


2.54 %


2.01 %


1.64 %


1.32 %


0.77 %


0.53


1.77

Less: Acquired deposit accretion

o / ae


— %


(0.01) %


— %


— %


— %


0.01


Adjusted average rate on interest-bearing deposits

p / ae


2.54 %


2.02 %


1.64 %


1.32 %


0.77 %


0.52


1.77

















Average rate on interest-bearing liabilities

q / af


3.02 %


2.72 %


2.45 %


1.82 %


1.05 %


0.30


1.97

Less: Acquired interest-bearing liabilities accretion (2)

r / af


— %


(0.01) %


— %


— %


— %


0.01


Adjusted average rate on interest-bearing liabilities

s / af


3.02 %


2.73 %


2.45 %


1.82 %


1.05 %


0.29


1.97

















Net interest margin (1)

t / ad


3.78 %


3.91 %


3.93 %


4.08 %


4.01 %


(0.13)


(0.23)

Less: Acquired loan, securities, and interest-bearing liabilities accretion - rate related (3)

u / ad


0.53 %


0.58 %


0.55 %


0.31 %


— %


(0.05)


0.53

Less: Acquired loan accretion - credit related (3)

c / ad


0.05 %


0.05 %


0.06 %


0.04 %


— %



0.05

Adjusted net interest margin (1)

v / ad


3.20 %


3.28 %


3.32 %


3.73 %


4.01 %


(0.08)


(0.81)

(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 the closing of the merger.

 

Columbia Banking System, Inc.

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)




Twelve Months Ended



($ in thousands)



Dec 31, 2023


Dec 31, 2022


Year over
Year (4)

Loans and leases interest income

a


$              2,109,744


$              1,041,446


103 %

Less: Acquired loan accretion - rate related (2), (3)

b


98,257


3,677


nm

Less: Acquired loan accretion - credit related (3)

c


22,706



nm

Adjusted loans and leases interest income

d=a-b-c


$              1,988,781


$              1,037,769


92 %









Taxable securities interest income

e


$                  289,944


$                    72,702


299 %

Less: Acquired taxable securities accretion - rate related

f


123,666



nm

Adjusted Taxable securities interest income

g=e-f


$                  166,278


$                    72,702


129 %









Non-taxable securities interest income (1)

h


$                    28,236


$                       6,669


323 %

Less: Acquired non-taxable securities accretion - rate related

i


7,772



nm

Adjusted Taxable securities interest income (1)

j=h-i


$                    20,464


$                       6,669


207 %









Interest income (1)

k


$              2,543,454


$              1,149,335


121 %

Less: Acquired loan and securities accretion - rate related

l=b+f+i


229,695


3,677


nm

Less: Acquired loan accretion - credit related

c


22,706



nm

Adjusted interest income (1)

m=k-l-c


$              2,291,053


$              1,145,658


100 %









Interest-bearing deposits interest expense

n


$                  461,654


$                    48,195


nm

Less: Acquired deposit accretion

o


(933)



nm

Adjusted interest-bearing deposits interest expense

p=n-o


$                  462,587


$                    48,195


nm









Interest expense

q


$                  746,156


$                    78,001


nm

Less: Acquired interest-bearing liabilities accretion (2)

r


(1,161)


(228)


409 %

Adjusted interest expense

s=q-r


$                  747,317


$                    78,229


nm









Net Interest Income (1)

t


$              1,797,298


$              1,071,334


68 %

Less: Acquired loan, securities, and interest-bearing liabilities accretion - rate related (3)

u=l-r


230,856


3,905


nm

Less: Acquired loan accretion - credit related (3)

c


22,706



nm

Adjusted net interest income (1)

v=t-u-c


$              1,543,736


$              1,067,429


45 %









Average loans and leases

aa


35,412,594


24,225,518


46 %

Average taxable securities

ab


7,479,573


3,343,721


124 %

Average non-taxable securities

ac


740,376


216,943


241 %

Average interest-earning assets

ad


45,867,566


29,556,131


55 %

Average interest-bearing deposits

ae


23,981,118


15,594,492


54 %

Average interest-bearing liabilities

af


29,194,822


16,686,325


75 %

(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 the closing of the merger. 

(4)         

Percentage changes greater than +/-500% are considered not meaningful and are presented as "nm."

 

Columbia Banking System, Inc.

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)




Twelve Months Ended



($ in thousands)



Dec 31, 2023


Dec 31, 2022


Year over
Year

Average yield on loans and leases

a / aa


5.95 %


4.29 %


1.66

Less: Acquired loan accretion - rate related (2),(3)

b / aa


0.28 %


0.02 %


0.26

Less: Acquired loan accretion - credit related (3)

c / aa


0.06 %


— %


0.06

Adjusted average yield on loans and leases

d / aa


5.61 %


4.27 %


1.34









Average yield on taxable securities

e / ab


3.88 %


2.17 %


1.71

Less: Acquired taxable securities accretion - rate related

f / ab


1.65 %


— %


1.65

Adjusted average yield on taxable securities

g / ab


2.23 %


2.17 %


0.06









Average yield on non-taxable securities (1)

h / ac


3.81 %


3.07 %


0.74

Less: Acquired non-taxable securities accretion - rate related

i / ac


1.05 %


— %


1.05

Adjusted yield on non-taxable securities (1)

j / ac


2.76 %


3.07 %


(0.31)









Average yield on interest-earning assets (1)

k / ad


5.54 %


3.88 %


1.66

Less: Acquired loan and securities accretion - rate related

l / ad


0.50 %


0.01 %


0.49

Less: Acquired loan accretion - credit related

c / ad


0.05 %


— %


0.05

Adjusted average yield on interest-earning assets (1)

m / ad


4.99 %


3.87 %


1.12









Average rate on interest-bearing deposits

n / ae


1.93 %


0.31 %


1.62

Less: Acquired deposit accretion

o / ae


— %


— %


Adjusted average rate on interest-bearing deposits

p / ae


1.93 %


0.31 %


1.62









Average rate on interest-bearing liabilities

q / af


2.56 %


0.47 %


2.09

Less: Acquired interest-bearing liabilities accretion (2)

r / af


— %


— %


Adjusted average rate on interest-bearing liabilities

s / af


2.56 %


0.47 %


2.09









Net interest margin (1)

t / ad


3.91 %


3.62 %


0.29

Less: Acquired loan, securities, and interest-bearing liabilities accretion - rate related (3)

u / ad


0.50 %


0.01 %


0.49

Less: Acquired loan accretion - credit related (3)

c / ad


0.05 %


— %


0.05

Adjusted net interest margin (1)

v / ad


3.36 %


3.61 %


(0.25)

(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 the closing of the merger. 

 

 

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SOURCE Columbia Banking System, Inc.

FAQ

What was the net income reported by Columbia Banking System, Inc. for the fourth quarter of 2023?

Columbia Banking System, Inc. reported a net income of $94 million for the fourth quarter of 2023.

What were the estimated CET1 and total capital ratios at quarter end for Columbia Banking System, Inc. in the fourth quarter of 2023?

The estimated CET1 and total capital ratios were 9.6% and 11.8% at quarter end for Columbia Banking System, Inc. in the fourth quarter of 2023.

What was the net interest margin for Columbia Banking System, Inc. in the fourth quarter of 2023?

The net interest margin for Columbia Banking System, Inc. was 3.78% in the fourth quarter of 2023, down 13 basis points from the prior quarter.

What was the allowance for credit losses for Columbia Banking System, Inc. as of December 31, 2023?

The allowance for credit losses for Columbia Banking System, Inc. was $464 million as of December 31, 2023.

What were the book value per common share and tangible book value per common share for Columbia Banking System, Inc. as of December 31, 2023?

The book value per common share increased to $23.95, and the tangible book value per common share increased to $16.12 as of December 31, 2023 for Columbia Banking System, Inc.

Columbia Banking Systems Inc

NASDAQ:COLB

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