COLUMBIA BANKING SYSTEM, INC. REPORTS SECOND QUARTER 2023 RESULTS

Rhea-AI Summary

Columbia Banking System, Inc. reported net income of $133 million, or $0.64 per common share, and operating net income of $169 million, or $0.81 per common share, for the second quarter of 2023. Consolidated asset balances were $54 billion, with loan balances of $37 billion and deposit balances of $41 billion. The estimated CET1 and total capital ratios were 9.1% and 11.1%, respectively.

Second Quarter 2023 Results

• Net income of $133 million, or $0.64 per common share
• Operating net income of $169 million, or $0.81 per common share¹
• Consolidated asset balances of $54 billion at quarter end
• Loan balances of $37 billion and deposit balances of $41 billion at quarter end
• Estimated CET1 and total capital ratios of 9.1% and 11.1% at quarter end

PORTLAND, Ore., July 19, 2023 /PRNewswire/ --

 

COLUMBIA BANKING SYSTEM, INC. REPORTS SECOND QUARTER 2023 RESULTS
$0.64		$0.81		$23.16		$15.02
Earnings per diluted common share		Operating earnings per diluted common share 1		Book value per common share		Tangible book value per common share 1

 

CEO Commentary

"Our teams continued to drive success during the second quarter, which was characterized by further integration progress and relationship-focused business activity," said Clint Stein, President and CEO. "We successfully completed planned branch consolidations during the quarter, and though merger-related expenses continued to impact our reported results, we remain on track to achieve our guided cost-savings expectations by the end of the third quarter, with additional opportunities already identified. We are not immune to quantitative actions affecting industry deposit balances and contributing to the modest remix of our deposit base. However, our talented associates, service-driven operating model, and expansion in newer markets provide us with the opportunities and resources to retain our favorable placement within the industry."

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

 

2Q23 HIGHLIGHTS (COMPARED TO 1Q23)
Net Interest Income and NIM	•   Net interest income increased by $109 million or 29% on a linked-quarter basis due to the full quarter run rate as a combined organization, which offset the impact of higher funding costs related to deposit and liability mix shift and rising interest rates.
	•   Net interest margin was 3.93%, down 15 basis points from the prior quarter. Excluding purchase accounting accretion and amortization, net interest margin was 3.32%, down 41 basis points from the prior quarter due primarily to higher funding costs.
Non-Interest Income and Expense	•   Non-interest income decreased by $15 million due primarily to a $24 million linked-quarter unfavorable change related to cumulative non-merger fair value accounting and hedges.
	•   Non-interest expense decreased by $14 million as lower merger-related expenses and the realization of cost savings offset the full quarter run rate of the combined organization.
Credit Quality	•   Net charge-offs were 0.30% of average loans and leases (annualized) and centered in the FinPac portfolio.
	•   Provision expense of $16 million reflects stabilizing credit trends in the FinPac portfolio, changes in the economic forecasts used in credit models, and portfolio mix changes.
	•   Non-performing assets to total assets was 0.15%.
Capital	•   Estimated total risk-based capital ratio of 11.1% and estimated common equity tier 1 risk-based capital ratio of 9.1%.
	•   Declared a quarterly cash dividend of $0.36 per common share on May 15, 2023, which was paid June 15, 2023.
Notable items	•   Sold $373 million in non-relationship loans and reclassified an additional $118 million to loans held for sale.
	•   Entered into an agreement to sell approximately one-third of the MSR portfolio, which relates to the non-relationship component of the serviced loan portfolio.
	•   $30 million in merger-related expenses.

 

2Q23 KEY FINANCIAL DATA
PERFORMANCE METRICS	2Q23		1Q23		2Q22
Return on average assets	1.00 %		(0.14) %		1.04 %
Return on average tangible common equity1	16.63 %		(2.09) %		12.23 %
Operating return on average assets1	1.27 %		0.74 %		1.06 %
Operating return on average tangible common equity1	21.13 %		10.64 %		12.49 %
Net interest margin	3.93 %		4.08 %		3.41 %
Adjusted net interest margin1	3.32 %		3.73 %		3.40 %
Efficiency ratio	62.60 %		79.71 %		59.12 %
INCOME STATEMENT ($ in 000s, excl. per share data)	2Q23		1Q23		2Q22
Net interest income	$483,975		$374,698		$248,170
Provision for credit losses	$16,014		$105,539		$18,692
Non-interest income	$39,678		$54,735		$55,235
Non-interest expense	$328,559		$342,818		$179,574
Pre-provision net revenue 1	$195,094		$86,615		$123,831
Operating pre-provision net revenue1	$243,114		$195,730		$125,994
Earnings per common share - diluted 2	$0.64		($0.09)		$0.61
Operating earnings per common share - diluted 1,2	$0.81		$0.46		$0.62
Dividends paid per share 2	$0.36		$0.35		$0.35
BALANCE SHEET	2Q23		1Q23		2Q22
Total assets	$53.6B		$54.0B		$30.1B
Loans and leases	$37.0B		$37.1B		$24.4B
Total deposits	$40.8B		$41.6B		$26.1B
Book value per common share 2	$23.16		$23.44		$19.47
Tangible book value per share[1][2]	$15.02		$15.12		$19.42
Tangible book value per share, ex AOCI 1,2	$17.03		$16.56		$21.80

 

Organizational Update
Columbia Banking System, Inc. ("Columbia", "we", or "our") completed the planned consolidation of 47 branches during the latter half of the second quarter. We remain on track to realize the previously communicated $135 million in annualized cost-savings expectations by the end of the third quarter.

On February 28, 2023, Columbia completed its merger with Umpqua Holdings Corporation ("UHC"), combining the two premier banks in the Northwest to create one of the largest banks headquartered in the West ("the merger"). Columbia's financial results for any periods ended prior to February 28, 2023 reflect UHC results only on a standalone basis. In addition, Columbia's reported financial results for the first quarter of 2023 reflect UHC financial results only until the closing of the merger after the close of business on February 28, 2023. As a result of these two factors, Columbia's financial results for the first and second quarters of 2023 and the six months ended June 30, 2023 may not be directly comparable to prior reported periods. The number of shares issued and outstanding, earnings per share, additional paid-in capital, and all references to share quantities or metrics of Columbia have been retrospectively restated to reflect the equivalent number of shares issued in the merger as the merger was treated as a reverse merger. Under the reverse acquisition method of accounting, the assets and liabilities of Columbia as of February 28, 2023 ("historical Columbia") were recorded at their respective fair values.

Net Interest Income
Net interest income was $484 million for the second quarter of 2023, up $109 million from the prior quarter. The increase, which includes $74 million of purchase accounting accretion and amortization compared to $32 million in the first quarter, reflects the benefit of a full quarter run rate as a combined organization, partially offset by higher funding costs related to deposit and liability mix shift and rising interest rates.

Columbia's net interest margin was 3.93% for the second quarter of 2023, down 15 basis points from 4.08% for the first quarter of 2023. Excluding purchase accounting accretion and amortization, the net interest margin was 3.32% for the second quarter of 2023 compared to 3.73% for the first quarter of 2023. The cost of interest-bearing deposits increased 32 basis points on a linked-quarter basis to 1.64% for the second quarter of 2023, which compares to 1.83% for both the month of June and at June 30, 2023. Please refer to the Q2 2023 Earnings Presentation for additional net interest margin change details and interest rate sensitivity information as well as our non-GAAP disclosures in this press release for the impact of purchase accounting accretion and amortization on individual line items.

Non-interest Income
Non-interest income was $40 million for the second quarter of 2023, down $15 million from the prior quarter. A $24 million unfavorable change in cumulative fair value adjustments and mortgage servicing rights ("MSR") hedging activity offset the benefit of the full quarter run rate as a combined organization. A net fair value loss of $16 million in the second quarter compares to a net fair value gain of $8 million in the first quarter, as detailed in our non-GAAP disclosures. The planned sale of approximately one-third of our MSR and the associated accounting treatment was the primary driver of the ineffectiveness of our MSR hedging activity during the second quarter. The transaction, which we expect to close at the end of the third quarter or beginning of the fourth quarter, relates to a non-relationship component of our serviced loan portfolio, and the transaction is expected to be accretive to capital given the impact to risk-weighted assets from the reduction in our MSR balance.

Non-interest Expense
Non-interest expense was $329 million for the second quarter of 2023, down $14 million from the prior quarter level. The decrease reflects an $86 million decline in merger-related expenses, which were $30 million in the second quarter, and the realization of cost savings, with the impact partially offset by the full quarter run rate of the combined organization. Please refer to the Q2 2023 Earnings Presentation for additional expense details, including an update on realized merger-related cost-savings through June 30, 2023.

Balance Sheet
Total consolidated assets were $53.6 billion as of June 30, 2023, compared to $54.0 billion as of March 31, 2023. Cash and cash equivalents was $3.4 billion as of June 30, 2023, a decrease of $228 million relative to March 31, 2023. We continued to maintain a higher on-balance sheet level of liquidity during the second quarter. Including secured off-balance sheet lines of credit, total available liquidity was $18.1 billion as of June 30, 2023, representing 34% of total assets, 44% of total deposits, and 134% of uninsured deposits. Please refer to the Q2 2023 Earnings Presentation for additional details related to our liquidity position.

Available for sale securities, which are held on balance sheet at fair value, were $9.0 billion as of June 30, 2023, a decrease of $251 million relative to March 31, 2023, as paydowns and a decline in the fair value of the portfolio were only partially offset by accretion of the discount on historical Columbia securities. Please refer to the Q2 2023 Earnings Presentation for additional details related to our securities portfolio.

Gross loans and leases were $37.0 billion as of June 30, 2023, essentially unchanged from March 31, 2023, as net organic growth during the quarter was offset by the sale of $373 million in loans and the corresponding reclassification of $118 million in balances to  loans held for sale. "We elected to sell approximately $500 million in loans that were transactional in nature during the quarter," commented Chris Merrywell, President of Umpqua Bank. "Our teams remain focused on generating balanced growth through existing and new customer relationships, which contributed to 5% annualized growth in the second quarter when loan sales and transfers are excluded." Please refer to the Q2 2023 Earnings Presentation for additional details related to our loan portfolio, which include underwriting characteristics, the composition of our commercial portfolios, and disclosure related to our office portfolio.

Total deposits were $40.8 billion as of June 30, 2023, a decrease of $751 million relative to March 31, 2023. "Our deposit balances continued to be affected by market liquidity tightening, the impact of inflation on customer spending, and commercial customers' deployment of cash, which includes tax payments," stated Mr. Merrywell. "Declining balances do not reflect customer attrition, and to date we have not experienced any adverse impact from the planned branch consolidations completed during the quarter given our teams' dedication to limiting any potential disruption to customers from the activity." Please refer to the Q2 2023 Earnings Presentation for additional details related to deposit characteristics and flows.

Credit Quality
The allowance for credit losses was $424 million, or 1.15% of loans and leases, as of June 30, 2023, compared to $436 million, or 1.18% of loans and leases, as of March 31, 2023. The provision for credit losses was $16 million for the second quarter of 2023 and is reflective of stabilizing credit trends in the FinPac portfolio; changes between the February 2023 and May 2023 economic forecasts; and portfolio mix changes, which include the reserve release associated with loan sales completed during the quarter. Please refer to the Q2 2023 Earnings Presentation for additional details related to the allowance for credit losses and other credit trends.

Net charge-offs were 0.30% of average loans and leases (annualized) for the second quarter of 2023, compared to 0.23% for the first quarter of 2023. Net charge-off activity continued to be centered in the FinPac portfolio, which experienced an anticipated increase in charge-offs. Bank charge-off activity remained low at 0.03% of average bank loans. As of June 30, 2023, non-performing assets were $80 million, or 0.15% of total assets, compared to $76 million, or 0.14% as of March 31, 2023.

Capital
As of June 30, 2023, Columbia's book value per common share decreased to $23.16, compared to $23.44 at March 31, 2023. The linked-quarter change in book value primarily reflects a change in accumulated other comprehensive (loss) income ("AOCI") to $(419) million at June 30, 2023, compared to $(300) million at the prior quarter-end. The change in AOCI is due primarily to a reduction in the tax-effected net unrealized loss on available for sale securities to $403 million at June 30, 2023, compared to $295 million at March 31, 2023.  Tangible book value per common share³ decreased to $15.02, compared to $15.12 at March 31, 2023.

Columbia's estimated total risk-based capital ratio was 11.1% and its estimated common equity tier 1 risk-based capital ratio was 9.1% as of June 30, 2023, compared to 10.9% and 8.9%, respectively, at March 31, 2023. Columbia remains above current "well-capitalized" regulatory minimums. "Our regulatory capital ratios expanded as anticipated during the second quarter, due in part to the realization of loan and investment securities discount accretion," stated Ron Farnsworth, Chief Financial Officer of Columbia. "We expect meaningful capital build over time to enhance future deployment opportunities." The regulatory capital ratios as of June 30, 2023 are estimates, pending completion and filing of Columbia's regulatory reports. 

Earnings Presentation and Conference Call Information
Columbia's Q2 2023 Earnings Presentation provides additional disclosure. A copy will be available on our investor relations page: www.columbiabankingsystem.com.

Columbia will host its second quarter 2023 earnings conference call on July 19, 2023, at 2:30 p.m. PT (5:30 p.m. ET). During the call, Columbia's management will provide an update on recent activities and discuss its second quarter 2023 financial results. Participants may register for the call using the below link to receive dial-in details and their own unique PINs or join the audiocast. It is recommended you join 10 minutes prior to the start time.

Register for the call: https://register.vevent.com/register/BIdd0fac4229134dff9718a687c2bb37fc
Join the audiocast: https://edge.media-server.com/mmc/p/9uf3dn2p
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 stability of banks; changes in interest rates that could significantly reduce net interest income and negatively affect asset yields and valuations and funding sources; changes in the scope and cost of FDIC insurance and other coverage; our ability to successfully implement efficiency and operational excellence initiatives; our ability to successfully develop and market new products and technology; changes in laws or regulations; any failure to realize the anticipated benefits of the UHC merger when expected or at all; the possibility that the integration following the UHC merger may be more expensive than anticipated, including as a result of unexpected factors or events, diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the UHC merger and integration of the companies; the effect of geopolitical instability, including wars, conflicts and terrorist attacks; and natural disasters and other similar unexpected events outside of our control. We also caution that the amount and timing of any future common stock dividends or repurchases will depend on the earnings, cash requirements and financial condition of  Columbia, market conditions, capital requirements, applicable law and regulations (including federal securities laws and federal banking regulations), and other factors deemed relevant by Columbia's Board of Directors, and may be subject to regulatory approval or conditions.

¹ "Non-GAAP" financial measure.  See GAAP to Non-GAAP Reconciliation for the comparable GAAP measurement.

² Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958.

³ "Non-GAAP" financial measure. See GAAP to Non-GAAP Reconciliation for the comparable GAAP measurement.

 

TABLE INDEX
	Page
Consolidated Statements of Operations	8
Consolidated Balance Sheets	9
Financial Highlights	11
Loan & Lease Portfolio Balances and Mix	12
Deposit Portfolio Balances and Mix	14
Credit Quality - Non-performing Assets	15
Credit Quality - Allowance for Credit Losses	16
Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates	18
Residential Mortgage Banking Activity	20
GAAP to Non-GAAP Reconciliation	22

 

Columbia Banking System, Inc.
Consolidated Statements of Operations
(Unaudited)
	Quarter Ended										% Change
($ in thousands, except per share data)	Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Seq. Quarter		Year over Year
Interest income:
Loans and leases	$      552,679		$      413,525		$      322,350		$      278,830		$      234,674		34 %		136 %
Interest and dividends on investments:
Taxable	79,036		39,729		18,108		18,175		17,256		99 %		358 %
Exempt from federal income tax	6,817		3,397		1,288		1,322		1,369		101 %		398 %
Dividends	2,581		719		182		86		84		259 %		nm
Temporary investments and interest bearing deposits	34,616		18,581		10,319		5,115		2,919		86 %		nm
Total interest income	675,729		475,951		352,247		303,528		256,302		42 %		164 %
Interest expense:
Deposits	100,408		63,613		31,174		9,090		4,015		58 %		nm
Securities sold under agreement to repurchase and federal funds purchased	1,071		406		323		545		66		164 %		nm
Borrowings	81,004		28,764		8,023		798		50		182 %		nm
Junior and other subordinated debentures	9,271		8,470		7,248		5,491		4,001		9 %		132 %
Total interest expense	191,754		101,253		46,768		15,924		8,132		89 %		nm
Net interest income	483,975		374,698		305,479		287,604		248,170		29 %		95 %
Provision for credit losses	16,014		105,539		32,948		27,572		18,692		(85) %		(14) %
Non-interest income:
Service charges on deposits	16,454		14,312		12,139		12,632		12,011		15 %		37 %
Card-based fees	13,435		11,561		9,017		9,115		10,530		16 %		28 %
Financial services and trust revenue	4,512		1,297		25		27		27		248 %		nm
Residential mortgage banking (loss) revenue, net	(2,342)		7,816		(1,812)		17,341		30,544		(130) %		(108) %
(Loss) gain on equity securities, net	(697)		2,416		284		(2,647)		(2,075)		(129) %		(66) %
Gain on loan and lease sales, net	442		940		1,531		1,525		1,303		(53) %		(66) %
BOLI income	4,063		2,790		2,033		2,023		2,110		46 %		93 %
Other income (loss)	3,811		13,603		11,662		(10,571)		785		(72) %		385 %
Total non-interest income	39,678		54,735		34,879		29,445		55,235		(28) %		(28) %
Non-interest expense:
Salaries and employee benefits	163,398		136,092		107,982		109,164		110,942		20 %		47 %
Occupancy and equipment, net	50,550		41,700		34,021		35,042		34,559		21 %		46 %
Intangible amortization	35,553		12,660		1,019		1,025		1,026		181 %		nm
FDIC assessments	11,579		6,113		3,487		3,007		2,954		89 %		292 %
Merger related expenses	29,649		115,898		11,637		769		2,672		(74) %		nm
Other expenses	37,830		30,355		36,836		28,957		27,421		25 %		38 %
Total non-interest expense	328,559		342,818		194,982		177,964		179,574		(4) %		83 %
Income (loss) before provision (benefit)  for income taxes	179,080		(18,924)		112,428		111,513		105,139		nm		70 %
Provision (benefit) for income taxes	45,703		(4,886)		29,464		27,473		26,548		nm		72 %
Net income (loss)	$      133,377		$      (14,038)		$        82,964		$        84,040		$        78,591		nm		70 %
Weighted average basic shares outstanding (1)	207,977		156,383		129,321		129,319		129,306		33 %		61 %
Weighted average diluted shares outstanding (1)	208,545		156,383		129,801		129,733		129,673		33 %		61 %
Earnings (loss) per common share – basic (1)	$           0.64		$          (0.09)		$           0.64		$           0.65		$           0.61		nm		5 %
Earnings (loss) per common share – diluted (1)	$           0.64		$          (0.09)		$           0.64		$           0.65		$           0.61		nm		5 %
nm = not meaningful

(1)	Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958.

 

Columbia Banking System, Inc.
Consolidated Statements of Operations
(Unaudited)
		Six Months Ended				% Change
($ in thousands, except per share data)		Jun 30, 2023		Jun 30, 2022		Year over Year
Interest income:
Loans and leases		$             966,204		$             449,078		115 %
Interest and dividends on investments:
Taxable		118,765		35,981		230 %
Exempt from federal income tax		10,214		2,741		273 %
Dividends		3,300		170		nm
Temporary investments and interest bearing deposits		53,197		4,272		nm
Total interest income		1,151,680		492,242		134 %
Interest expense:
Deposits		164,021		7,931		nm
Securities sold under agreement to repurchase and federal funds purchased		1,477		129		nm
Borrowings		109,768		99		nm
Junior and other subordinated debentures		17,741		7,150		148 %
Total interest expense		293,007		15,309		nm
Net interest income		858,673		476,933		80 %
Provision for credit losses		121,553		23,496		417 %
Non-interest income:
Service charges on deposits		30,766		23,594		30 %
Card-based fees		24,996		19,238		30 %
Brokerage revenue		5,809		38		nm
Residential mortgage banking revenue, net		5,474		91,330		(94) %
Gain on sale of debt securities, net		—		2		(100) %
Gain (loss) on equity securities, net		1,719		(4,736)		nm
Gain on loan and lease sales, net		1,382		3,640		(62) %
BOLI income		6,853		4,197		63 %
Other income (loss)		17,414		(2,099)		nm
Total non-interest income		94,413		135,204		(30) %
Non-interest expense:
Salaries and employee benefits		299,490		224,080		34 %
Occupancy and equipment, net		92,250		69,388		33 %
Intangible amortization		48,213		2,051		nm
FDIC assessments		17,692		7,470		137 %
Merger related expenses		145,547		4,950		nm
Other expenses		68,185		54,065		26 %
Total non-interest expense		671,377		362,004		85 %
Income before provision for income taxes		160,156		226,637		(29) %
Provision for income taxes		40,817		56,889		(28) %
Net income		$             119,339		$             169,748		(30) %
Weighted average basic shares outstanding (1)		182,325		129,233		41 %
Weighted average diluted shares outstanding (1)		182,860		129,685		41 %
Earnings per common share – basic (1)		$                  0.65		$                  1.31		(50) %
Earnings per common share – diluted (1)		$                  0.65		$                  1.31		(50) %
nm = not meaningful

(1)	Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958.

 

Columbia Banking System, Inc. Consolidated Balance Sheets
(Unaudited)
											% Change
($ in thousands, except per share data)	Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Seq. Quarter		Year over Year
Assets:
Cash and due from banks	$       538,653		$       555,919		$       327,313		$       321,447		$       315,348		(3) %		71 %
Interest bearing cash and temporary investments	2,868,563		3,079,266		967,330		1,232,412		687,233		(7) %		317 %
Investment securities:
Equity and other, at fair value	76,361		76,532		72,959		72,277		75,347		0 %		1 %
Available for sale, at fair value	8,998,428		9,249,600		3,196,166		3,136,391		3,416,707		(3) %		163 %
Held to maturity, at amortized cost	2,388		2,432		2,476		2,547		2,637		(2) %		(9) %
Loans held for sale	183,633		49,338		71,647		148,275		228,889		272 %		(20) %
Loans and leases	37,049,299		37,091,280		26,155,981		25,507,951		24,432,678		0 %		52 %
Allowance for credit losses on loans and leases	(404,603)		(417,464)		(301,135)		(283,065)		(261,111)		(3) %		55 %
Net loans and leases	36,644,696		36,673,816		25,854,846		25,224,886		24,171,567		0 %		52 %
Restricted equity securities	258,524		246,525		47,144		40,993		10,867		5 %		nm
Premises and equipment, net	368,698		375,190		176,016		165,305		165,196		(2) %		123 %
Operating lease right-of-use assets	119,255		127,296		78,598		81,729		87,249		(6) %		37 %
Goodwill	1,029,234		1,030,142		—		—		—		0 %		nm
Other intangible assets, net	666,762		702,315		4,745		5,764		6,789		(5) %		nm
Residential mortgage servicing rights, at fair value	172,929		178,800		185,017		196,177		179,558		(3) %		(4) %
Bank owned life insurance	643,727		641,922		331,759		329,699		328,764		0 %		96 %
Deferred tax asset, net	362,880		351,229		132,823		128,120		70,134		3 %		417 %
Other assets	657,365		653,904		399,800		385,938		389,409		1 %		69 %
Total assets	$  53,592,096		$  53,994,226		$  31,848,639		$  31,471,960		$  30,135,694		(1) %		78 %
Liabilities:
Deposits
Non-interest bearing	$  16,019,408		$  17,215,781		$  10,288,849		$  11,246,358		$  11,129,209		(7) %		44 %
Interest bearing	24,815,509		24,370,566		16,776,763		15,570,749		15,003,214		2 %		65 %
Total deposits	40,834,917		41,586,347		27,065,612		26,817,107		26,132,423		(2) %		56 %
Securities sold under agreements to repurchase	294,914		271,047		308,769		383,569		527,961		9 %		(44) %
Borrowings	6,250,000		5,950,000		906,175		756,214		6,252		5 %		nm
Junior subordinated debentures, at fair value	312,872		297,721		323,639		325,744		321,268		5 %		(3) %
Junior and other subordinated debentures, at amortized cost	108,009		108,066		87,813		87,870		87,927		0 %		23 %
Operating lease liabilities	132,099		140,648		91,694		95,512		101,352		(6) %		30 %
Other liabilities	831,097		755,674		585,111		588,430		440,235		10 %		89 %
Total liabilities	48,763,908		49,109,503		29,368,813		29,054,446		27,617,418		(1) %		77 %
Shareholders' equity:
Common stock	5,792,792		5,788,553		3,450,493		3,448,007		3,445,531		0 %		68 %
Accumulated deficit	(545,842)		(603,696)		(543,803)		(580,933)		(619,108)		(10) %		(12) %
Accumulated other comprehensive loss	(418,762)		(300,134)		(426,864)		(449,560)		(308,147)		40 %		36 %
Total shareholders' equity	4,828,188		4,884,723		2,479,826		2,417,514		2,518,276		(1) %		92 %
Total liabilities and shareholders' equity	$  53,592,096		$  53,994,226		$  31,848,639		$  31,471,960		$  30,135,694		(1) %		78 %
Common shares outstanding at period end (2)	208,514		208,429		129,321		129,320		129,318		0 %		61 %
Book value per common share (2)	$          23.16		$          23.44		$          19.18		$          18.69		$          19.47		(1) %		19 %
Tangible book value per common share (1),(2)	$          15.02		$          15.12		$          19.14		$          18.65		$          19.42		(1) %		(23) %
Tangible equity - common (1),(2)	$    3,132,192		$    3,152,266		$    2,475,081		$    2,411,750		$    2,511,487		(1) %		25 %
Tangible common equity to tangible assets (1)	6.04 %		6.03 %		7.77 %		7.66 %		8.34 %		0.01		(2.30)
nm = not meaningful

(1)	See GAAP to Non-GAAP Reconciliation.
(2)	Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958.

 

Columbia Banking System, Inc.
Financial Highlights
(Unaudited)
		Quarter Ended										% Change
		Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Seq. Quarter		Year over Year
Per Common Share Data: (5)
Dividends (5)		$         0.36		$         0.35		$         0.35		$         0.35		$         0.35		3 %		3 %
Book value (5)		$       23.16		$       23.44		$       19.18		$       18.69		$       19.47		(1) %		19 %
Tangible book value (1),(5)		$       15.02		$       15.12		$       19.14		$       18.65		$       19.42		(1) %		(23) %
Tangible book value, ex accumulated other comprehensive income (1),(5)		$       17.03		$       16.56		$       22.44		$       22.13		$       21.80		3 %		(22) %
Performance Ratios:
Efficiency ratio		62.60 %		79.71 %		57.24 %		56.07 %		59.12 %		(17.11)		3.48
Return on average assets ("ROAA")		1.00 %		(0.14) %		1.04 %		1.09 %		1.04 %		1.14		(0.04)
Pre-provision net revenue ("PPNR") ROAA (1)		1.46 %		0.89 %		1.82 %		1.80 %		1.64 %		0.57		(0.18)
Return on average common equity		10.84 %		(1.70) %		13.50 %		12.99 %		12.20 %		12.54		(1.36)
Return on average tangible common equity (1)		16.63 %		(2.09) %		13.53 %		13.02 %		12.23 %		18.72		4.40
Performance Ratios - Operating: (1)
Operating efficiency ratio (1)		54.85 %		53.46 %		52.01 %		51.72 %		58.27 %		1.39		(3.42)
Operating return on average assets (1)		1.27 %		0.74 %		1.24 %		1.33 %		1.06 %		0.53		0.21
Operating PPNR return on average assets (1)		1.82 %		2.01 %		2.10 %		2.12 %		1.66 %		(0.19)		0.16
Operating return on average common equity (1)		13.77 %		8.66 %		16.14 %		15.86 %		12.46 %		5.11		1.31
Operating return on average tangible common equity (1)		21.13 %		10.64 %		16.18 %		15.90 %		12.49 %		10.49		8.64
Average Balance Sheet Yields, Rates, & Ratios:
Yield on loans and leases		5.95 %		5.55 %		4.92 %		4.41 %		3.94 %		0.40		2.01
Yield on earning assets (2)		5.48 %		5.19 %		4.62 %		4.10 %		3.53 %		0.29		1.95
Cost of interest bearing deposits		1.64 %		1.32 %		0.77 %		0.23 %		0.11 %		0.32		1.53
Cost of interest bearing liabilities		2.45 %		1.82 %		1.05 %		0.39 %		0.20 %		0.63		2.25
Cost of total deposits		0.99 %		0.80 %		0.46 %		0.14 %		0.06 %		0.19		0.93
Cost of total funding (3)		1.61 %		1.16 %		0.65 %		0.23 %		0.12 %		0.45		1.49
Net interest margin (2)		3.93 %		4.08 %		4.01 %		3.88 %		3.41 %		(0.15)		0.52
Average interest bearing cash / Average interest earning assets		5.47 %		4.33 %		3.62 %		3.04 %		5.71 %		1.14		(0.24)
Average loans and leases / Average interest earning assets		75.18 %		80.96 %		85.32 %		84.54 %		80.91 %		(5.78)		(5.73)
Average loans and leases / Average total deposits		90.98 %		93.01 %		95.85 %		93.55 %		89.23 %		(2.03)		1.75
Average non-interest bearing deposits / Average total deposits		40.05 %		39.55 %		40.30 %		42.29 %		42.00 %		0.50		(1.95)
Average total deposits / Average total funding (3)		85.59 %		91.36 %		94.52 %		96.34 %		96.66 %		(5.77)		(11.07)
Select Credit & Capital Ratios:
Non-performing loans and leases to total loans and leases		0.22 %		0.20 %		0.22 %		0.20 %		0.18 %		0.02		0.04
Non-performing assets to total assets		0.15 %		0.14 %		0.18 %		0.16 %		0.15 %		0.01		—
Allowance for credit losses to loans and leases		1.15 %		1.18 %		1.21 %		1.16 %		1.12 %		(0.03)		0.03
Total risk-based capital ratio (4)		11.1 %		10.9 %		13.7 %		13.2 %		13.5 %		0.20		(2.40)
Common equity tier 1 risk-based capital ratio (4)		9.1 %		8.9 %		11.0 %		10.7 %		11.0 %		0.20		(1.90)

(1)	See GAAP to Non-GAAP Reconciliation.
(2)	Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.
(3)	Total funding = Total deposits + Total borrowings.
(4)	Estimated holding company ratios.
(5)	Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958.

 

Columbia Banking System, Inc.
Financial Highlights
(Unaudited)
		Six Months Ended				% Change
		Jun 30, 2023		Jun 30, 2022		Year over Year
Per Common Share Data: (4)
Dividends (4)		$                      0.71		$                      0.70		1.43 %
Performance Ratios:
Efficiency ratio		70.30 %		59.07 %		11.23
Return on average assets (ROAA)		0.52 %		1.12 %		(0.60)
Pre-provision net revenue (PPNR) ROAA (1)		1.22 %		1.66 %		(0.44)
Return on average common equity		5.80 %		12.92 %		(7.12)
Return on average tangible common equity (1)		8.09 %		12.96 %		(4.87)
Performance Ratios - Operating: (1)
Operating efficiency ratio (1)		54.24 %		60.09 %		(5.85)
Operating return on average assets (1)		1.04 %		1.04 %		—
Operating PPNR return on average assets (1)		1.90 %		1.55 %		0.35
Operating return on average common equity (1)		11.72 %		12.01 %		(0.29)
Operating return on average tangible common equity (1)		16.34 %		12.05 %		4.29
Average Balance Sheet Yields, Rates, & Ratios:
Yield on loans and leases		5.77 %		3.86 %		1.91
Yield on earning assets (2)		5.35 %		3.38 %		1.97
Cost of interest bearing deposits		1.50 %		0.10 %		1.40
Cost of interest bearing liabilities		2.19 %		0.19 %		2.00
Cost of total deposits		0.90 %		0.06 %		0.84
Cost of total funding (3)		1.42 %		0.11 %		1.31
Net interest margin (2)		3.99 %		3.28 %		0.71
Average interest bearing cash / Average interest earning assets		4.99 %		7.31 %		(2.32)
Average loans and leases / Average interest earning assets		77.64 %		78.88 %		(1.24)
Average loans and leases / Average total deposits		91.87 %		87.00 %		4.87
Average non-interest bearing deposits / Average total deposits		39.69 %		41.68 %		(1.99)
Average total deposits / Average total funding (3)		88.03 %		96.74 %		(8.71)

(1)	See GAAP to Non-GAAP Reconciliation.
(2)	Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.
(3)	Total funding = Total deposits + Total borrowings.
(4)	Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958.

 

Columbia Banking System, Inc.
Loan & Lease Portfolio Balances and Mix
(Unaudited)
	Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		% Change
($ in thousands)	Amount		Amount		Amount		Amount		Amount		Seq. Quarter		Year over Year
Loans and leases:
Commercial real estate:
Non-owner occupied term, net	$    6,434,673		$    6,353,550		$    3,894,840		$    3,846,426		$    3,798,242		1 %		69 %
Owner occupied term, net	5,254,401		5,156,848		2,567,761		2,549,761		2,497,553		2 %		110 %
Multifamily, net	5,622,875		5,590,587		5,285,791		5,090,661		4,768,273		1 %		18 %
Construction & development, net	1,528,924		1,467,561		1,077,346		1,036,931		1,017,297		4 %		50 %
Residential development, net	388,641		440,667		200,838		205,935		194,909		(12) %		99 %
Commercial:
Term, net	5,449,787		5,906,774		3,029,547		3,003,424		2,904,861		(8) %		88 %
Lines of credit & other, net	2,268,790		2,184,762		960,054		914,507		920,604		4 %		146 %
Leases & equipment finance, net	1,740,037		1,746,267		1,706,172		1,669,817		1,576,144		0 %		10 %
Residential:
Mortgage, net	6,272,898		6,187,964		5,647,035		5,470,624		5,168,457		1 %		21 %
Home equity loans & lines, net	1,898,958		1,870,002		1,631,965		1,565,094		1,415,722		2 %		34 %
Consumer & other, net	189,315		186,298		154,632		154,771		170,616		2 %		11 %
Total loans and leases, net of deferred fees and costs	$  37,049,299		$  37,091,280		$  26,155,981		$  25,507,951		$  24,432,678		0 %		52 %
Loans and leases mix:
Commercial real estate:
Non-owner occupied term, net	17 %		16 %		15 %		15 %		15 %
Owner occupied term, net	14 %		14 %		10 %		10 %		10 %
Multifamily, net	15 %		15 %		20 %		20 %		20 %
Construction & development, net	4 %		4 %		4 %		4 %		4 %
Residential development, net	1 %		1 %		1 %		1 %		1 %
Commercial:
Term, net	15 %		16 %		12 %		12 %		12 %
Lines of credit & other, net	6 %		6 %		4 %		4 %		4 %
Leases & equipment finance, net	5 %		5 %		6 %		6 %		6 %
Residential:
Mortgage, net	17 %		17 %		21 %		21 %		21 %
Home equity loans & lines, net	5 %		5 %		6 %		6 %		6 %
Consumer & other, net	1 %		1 %		1 %		1 %		1 %
Total	100 %		100 %		100 %		100 %		100 %

 

Columbia Banking System, Inc.
Deposit Portfolio Balances and Mix
(Unaudited)
	Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		% Change
($ in thousands)	Amount		Amount		Amount		Amount		Amount		Seq. Quarter		Year over Year
Deposits:
Demand, non-interest bearing	$  16,019,408		$  17,215,781		$  10,288,849		$  11,246,358		$  11,129,209		(7) %		44 %
Demand, interest bearing	6,300,082		5,900,462		4,080,469		3,903,746		3,723,650		7 %		69 %
Money market	10,115,908		10,681,422		7,721,011		7,601,506		7,284,641		(5) %		39 %
Savings	3,171,714		3,469,112		2,265,052		2,455,917		2,446,876		(9) %		30 %
Time	5,227,805		4,319,570		2,710,231		1,609,580		1,548,047		21 %		238 %
Total	$  40,834,917		$  41,586,347		$  27,065,612		$  26,817,107		$  26,132,423		(2) %		56 %
Total core deposits (1)	$  37,639,368		$  39,155,298		$  25,616,010		$  26,292,548		$  25,619,500		(4) %		47 %
Deposit mix:
Demand, non-interest bearing	39 %		41 %		38 %		42 %		43 %
Demand, interest bearing	15 %		14 %		15 %		15 %		14 %
Money market	25 %		26 %		29 %		28 %		28 %
Savings	8 %		9 %		8 %		9 %		9 %
Time	13 %		10 %		10 %		6 %		6 %
Total	100 %		100 %		100 %		100 %		100 %

(1)	Core deposits are defined as total deposits less time deposits greater than $250,000 and all brokered deposits.

 

	Columbia Banking System, Inc.
	Credit Quality – Non-performing Assets
	(Unaudited)
		Quarter Ended										% Change
($ in thousands)		Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Seq. Quarter		Year over Year
Non-performing assets:
Loans and leases on non-accrual status:
	Commercial real estate, net	$     10,994		$     15,612		$       5,011		$       5,403		$       5,514		(30) %		99 %
	Commercial, net	39,316		42,301		25,691		18,652		12,645		(7) %		211 %
	Residential, net	—		—		—		—		—		nm		nm
	Consumer & other, net	—		—		—		—		—		nm		nm
	Total loans and leases on non-accrual status	50,310		57,913		30,702		24,055		18,159		(13) %		177 %
Loans and leases past due 90+ days and accruing (1):
	Commercial real estate, net	184		1		1		1		23		nm		nm
	Commercial, net	7,720		151		7,909		5,143		3,311		nm		133 %
	Residential, net (1)	21,370		17,423		19,894		21,411		22,340		23 %		(4) %
	Consumer & other, net	399		140		134		152		196		185 %		104 %
	Total loans and leases past due 90+ days and accruing (1)	29,673		17,715		27,938		26,707		25,870		68 %		15 %
Total non-performing loans and leases		79,983		75,628		58,640		50,762		44,029		6 %		82 %
Other real estate owned		278		409		203		—		1,868		(32) %		(85) %
Total non-performing assets		$     80,261		$     76,037		$     58,843		$     50,762		$     45,897		6 %		75 %
Loans and leases past due 31-89 days		$     73,376		$     78,641		$     64,893		$     53,538		$     34,659		(7) %		112 %
Loans and leases past due 31-89 days to total loans and leases		0.20 %		0.21 %		0.25 %		0.21 %		0.14 %		(0.01)		0.06
Non-performing loans and leases to total loans and leases (1)		0.22 %		0.20 %		0.22 %		0.20 %		0.18 %		0.02		0.04
Non-performing assets to total assets (1)		0.15 %		0.14 %		0.18 %		0.16 %		0.15 %		0.01		—
nm = not meaningful

(1)	Excludes certain mortgage loans guaranteed by Ginnie Mae, which Columbia has the unilateral right to repurchase but has not done so, totaling $1.6 million, $5.4 million, $6.6 million, $1.0 million, and $356,000 at June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively.

 

	Columbia Banking System, Inc.
	Credit Quality – Allowance for Credit Losses
	(Unaudited)
		Quarter Ended										% Change
($ in thousands)		Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Seq. Quarter		Year over Year
Allowance for credit losses on loans and leases (ACLLL)
Balance, beginning of period		$   417,464		$   301,135		$   283,065		$   261,111		$   248,564		39 %		68 %
Initial ACL recorded for PCD loans acquired during the period		—		26,492		—		—		—		(100) %		nm
Provision for credit losses on loans and leases (1)		15,216		106,498		30,580		28,542		18,787		(86) %		(19) %
Charge-offs
	Commercial real estate, net	(174)		—		(128)		—		(8)		nm		nm
	Commercial, net	(32,036)		(19,248)		(14,721)		(9,459)		(9,035)		66 %		255 %
	Residential, net	(4)		(248)		(53)		(4)		—		(98) %		nm
	Consumer & other, net	(1,264)		(773)		(906)		(929)		(836)		64 %		51 %
	Total charge-offs	(33,478)		(20,269)		(15,808)		(10,392)		(9,879)		65 %		239 %
Recoveries
	Commercial real estate, net	209		58		163		123		73		260 %		186 %
	Commercial, net	4,511		3,058		2,708		2,842		2,934		48 %		54 %
	Residential, net	63		123		24		249		216		(49) %		(71) %
	Consumer & other, net	618		369		403		590		416		67 %		49 %
	Total recoveries	5,401		3,608		3,298		3,804		3,639		50 %		48 %
Net (charge-offs) recoveries
	Commercial real estate, net	35		58		35		123		65		(40) %		(46) %
	Commercial, net	(27,525)		(16,190)		(12,013)		(6,617)		(6,101)		70 %		351 %
	Residential, net	59		(125)		(29)		245		216		nm		(73) %
	Consumer & other, net	(646)		(404)		(503)		(339)		(420)		60 %		54 %
	Total net charge-offs	(28,077)		(16,661)		(12,510)		(6,588)		(6,240)		69 %		350 %
Balance, end of period		$   404,603		$   417,464		$   301,135		$   283,065		$   261,111		(3) %		55 %
Reserve for unfunded commitments
Balance, beginning of period		$     19,029		$     14,221		$     11,853		$     12,823		$     12,918		34 %		47 %
Initial ACL recorded for unfunded commitments acquired during the period		—		5,767		—		—		—		(100) %		nm
Provision (recapture) for credit losses on unfunded commitments		798		(959)		2,368		(970)		(95)		nm		nm
Balance, end of period		19,827		19,029		14,221		11,853		12,823		4 %		55 %
Total Allowance for credit losses (ACL)		$   424,430		$   436,493		$   315,356		$   294,918		$   273,934		(3) %		55 %
Net charge-offs to average loans and leases (annualized)		0.30 %		0.23 %		0.19 %		0.11 %		0.11 %		0.07		0.19
Recoveries to gross charge-offs		16.13 %		17.80 %		20.86 %		36.61 %		36.84 %		(1.67)		(20.71)
ACLLL to loans and leases		1.09 %		1.13 %		1.15 %		1.11 %		1.07 %		(0.04)		0.02
ACL to loans and leases		1.15 %		1.18 %		1.21 %		1.16 %		1.12 %		(0.03)		0.03
nm = not meaningful

(1)	For the quarter ended March 31, 2023, the provision for credit losses on loans and leases includes $88.4 million initial provision related to non-PCD loans acquired during the period.

 

Columbia Banking System, Inc.
Credit Quality – Allowance for Credit Losses
(Unaudited)
			Six Months Ended				% Change
($ in thousands)			Jun 30, 2023		Jun 30, 2022		Year over Year
Allowance for credit losses on loans and leases (ACLLL)
Balance, beginning of period			$          301,135		$          248,412		21 %
Initial ACL recorded for PCD loans acquired during the period			26,492		—		nm
Provision for credit losses on loans and leases  (1)			121,714		24,483		397 %
Charge-offs
	Commercial real estate, net		(174)		(8)		nm
	Commercial, net		(51,284)		(16,893)		204 %
	Residential, net		(252)		(167)		51 %
	Consumer & other, net		(2,037)		(1,721)		18 %
	Total charge-offs		(53,747)		(18,789)		186 %
Recoveries
	Commercial real estate, net		267		98		172 %
	Commercial, net		7,569		5,479		38 %
	Residential, net		186		389		(52) %
	Consumer & other, net		987		1,039		(5) %
	Total recoveries		9,009		7,005		29 %
Net (charge-offs) recoveries
	Commercial real estate, net		93		90		3 %
	Commercial, net		(43,715)		(11,414)		283 %
	Residential, net		(66)		222		(130) %
	Consumer & other, net		(1,050)		(682)		54 %
	Total net charge-offs		(44,738)		(11,784)		280 %
Balance, end of period			$          404,603		$          261,111		55 %
Reserve for unfunded commitments
Balance, beginning of period			$           14,221		$           12,767		11 %
Initial ACL recorded for unfunded commitments acquired during the period			5,767		—		nm
(Recapture) provision for credit losses on unfunded commitments			(161)		56		(388) %
Balance, end of period			19,827		12,823		55 %
Total Allowance for credit losses (ACL)			$          424,430		$          273,934		55 %
Net charge-offs to average loans and leases (annualized)			0.27 %		0.10 %		0.17
Recoveries to gross charge-offs			16.76 %		37.28 %		(20.52)
nm = not meaningful

(1)	For the six months ended June 30, 2023, the provision for credit losses on loans and leases includes $88.4 million initial provision related to non-PCD loans acquired during the period.

 

 

Columbia Banking System, Inc.
Consolidated Average Balance Sheets, Net Interest Income, and Yields/Rates
(Unaudited)
	Quarter Ended
	June 30, 2023						March 31, 2023						June 30, 2022
($ in thousands)	Average Balance		Interest Income or Expense		Average Yields or Rates		Average Balance		Interest Income or Expense		Average Yields or Rates		Average Balance		Interest Income or Expense		Average Yields or Rates
INTEREST-EARNING ASSETS:
Loans held for sale	$        46,794		$       682		5.83 %		$        54,008		$       799		5.92 %		$      264,320		$     2,742		4.15 %
Loans and leases (1)	37,169,315		551,997		5.95 %		29,998,630		412,726		5.55 %		23,550,796		231,932		3.94 %
Taxable securities	8,656,147		81,617		3.77 %		4,960,966		40,448		3.26 %		3,410,091		17,340		2.03 %
Non-taxable securities (2)	865,278		8,010		3.70 %		437,020		4,068		3.72 %		220,327		1,721		3.13 %
Temporary investments and interest-bearing cash	2,704,984		34,616		5.13 %		1,605,081		18,581		4.69 %		1,663,454		2,919		0.70 %
Total interest-earning assets	49,442,518		$ 676,922		5.48 %		37,055,705		$ 476,622		5.19 %		29,108,988		$ 256,654		3.53 %
Goodwill and other intangible assets	1,718,705						623,042						7,379
Other assets	2,379,351						1,747,228						1,240,536
Total assets	$  53,540,574						$  39,425,975						$  30,356,903
INTEREST-BEARING LIABILITIES:
Interest-bearing demand deposits	$   6,131,117		$   17,277		1.15 %		$   4,759,251		$     9,815		0.84 %		$   3,896,553		$       610		0.06 %
Money market deposits	10,362,495		41,703		1.60 %		8,845,784		32,238		1.48 %		7,366,987		1,717		0.09 %
Savings deposits	3,297,138		877		0.11 %		2,686,388		556		0.08 %		2,426,124		199		0.03 %
Time deposits	4,703,967		40,551		3.46 %		3,205,128		21,004		2.66 %		1,618,394		1,489		0.37 %
Total interest-bearing deposits	24,494,717		100,408		1.64 %		19,496,551		63,613		1.32 %		15,308,058		4,015		0.11 %
Repurchase agreements and federal funds purchased	284,347		1,071		1.51 %		281,032		406		0.59 %		512,641		66		0.05 %
Borrowings	6,187,363		81,004		5.25 %		2,352,715		28,764		4.96 %		6,273		50		3.21 %
Junior and other subordinated debentures	405,989		9,271		9.16 %		417,966		8,470		8.22 %		393,964		4,001		4.07 %
Total interest-bearing liabilities	31,372,416		$ 191,754		2.45 %		22,548,264		$ 101,253		1.82 %		16,220,936		$     8,132		0.20 %
Non-interest-bearing deposits	16,361,541						12,755,080						11,086,376
Other liabilities	871,378						772,870						464,755
Total liabilities	48,605,335						36,076,214						27,772,067
Common equity	4,935,239						3,349,761						2,584,836
Total liabilities and shareholders' equity	$  53,540,574						$  39,425,975						$  30,356,903
NET INTEREST INCOME			$ 485,168						$ 375,369						$ 248,522
NET INTEREST SPREAD					3.03 %						3.37 %						3.33 %
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)					3.93 %						4.08 %						3.41 %

(1)	Non-accrual loans and leases are included in the average balance.
(2)	Tax-exempt income has been adjusted to a tax equivalent basis at a 21% tax rate. The amount of such adjustment was an addition to recorded income of approximately $1.2 million for the three months ended June 30, 2023, as compared to $671,000 for the three months ended March 31, 2023 and $352,000 for the three months ended June 30, 2022.

 

Columbia Banking System, Inc.
Average Rates and Balances
(Unaudited)
	Six Months Ended
	June 30, 2023						June 30, 2022
($ in thousands)	Average Balance		Interest Income or Expense		Average Yields or Rates		Average Balance		Interest Income or Expense		Average Yields or Rates
INTEREST-EARNING ASSETS:
Loans held for sale	$           50,381		$         1,481		5.88 %		$         275,253		$         5,004		3.64 %
Loans and leases (1)	33,603,781		964,723		5.77 %		23,061,173		444,074		3.86 %
Taxable securities	6,818,764		122,065		3.58 %		3,533,930		36,151		2.05 %
Non-taxable securities (2)	652,332		12,078		3.70 %		227,218		3,447		3.03 %
Temporary investments and interest-bearing cash	2,158,071		53,197		4.97 %		2,138,352		4,272		0.40 %
Total interest-earning assets	43,283,329		$   1,153,544		5.35 %		29,235,926		$     492,948		3.38 %
Goodwill and other intangible assets	1,173,900						7,890
Other assets	2,065,036						1,232,496
Total assets	$     46,522,265						$     30,476,312
INTEREST-BEARING LIABILITIES:
Interest-bearing demand deposits	$      5,448,974		$       27,092		1.00 %		$      3,854,596		$         1,108		0.06 %
Money market deposits	9,657,738		73,941		1.54 %		7,503,142		3,125		0.08 %
Savings deposits	2,993,450		1,433		0.10 %		2,416,096		404		0.03 %
Time deposits	3,958,688		61,555		3.14 %		1,685,763		3,294		0.39 %
Total interest-bearing deposits	22,058,850		164,021		1.50 %		15,459,597		7,931		0.10 %
Repurchase agreements and federal funds purchased	282,699		1,477		1.05 %		499,664		129		0.05 %
Borrowings	4,280,632		109,768		5.17 %		6,293		99		3.18 %
Junior and other subordinated debentures	411,944		17,741		8.68 %		387,510		7,150		3.72 %
Total interest-bearing liabilities	27,034,125		$     293,007		2.19 %		16,353,064		$       15,309		0.19 %
Non-interest-bearing deposits	14,518,864						11,046,925
Other liabilities	822,396						426,917
Total liabilities	42,375,385						27,826,906
Common equity	4,146,880						2,649,406
Total liabilities and shareholders' equity	$     46,522,265						$     30,476,312
NET INTEREST INCOME			$     860,537						$     477,639
NET INTEREST SPREAD					3.16 %						3.19 %
NET INTEREST INCOME TO EARNING ASSETS OR NET INTEREST MARGIN (1), (2)					3.99 %						3.28 %

(1)	Non-accrual loans and leases are included in the average balance.
(2)	Tax-exempt income has been adjusted to a tax equivalent basis at a 21% tax rate. The amount of such adjustment was an addition to recorded income of approximately $1.9 million for the six months ended June 30, 2023, as compared to $706,000 for the same period in 2022.

 

Columbia Banking System, Inc.
Residential Mortgage Banking Activity
(Unaudited)
	Quarter Ended										% Change
($ in thousands)	Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Seq. Quarter		Year over Year
Residential mortgage banking revenue:
Origination and sale	$       3,166		$       3,587		$       4,252		$     10,515		$     15,101		(12) %		(79) %
Servicing	9,167		9,397		9,184		9,529		9,505		(2) %		(4) %
Change in fair value of MSR asset:
Changes due to collection/realization of expected cash flows over time	(4,797)		(4,881)		(4,986)		(4,978)		(4,961)		(2) %		(3) %
Changes due to valuation inputs or assumptions	(2,242)		(2,937)		(9,914)		16,403		10,899		(24) %		(121) %
MSR hedge (loss) gain	(7,636)		2,650		(348)		(14,128)		—		(388) %		nm
Total	$      (2,342)		$       7,816		$      (1,812)		$     17,341		$     30,544		(130) %		(108) %
Closed loan volume for-sale	$    119,476		$    131,726		$    216,833		$    396,979		$    576,532		(9) %		(79) %
Gain on sale margin	2.65 %		2.72 %		1.96 %		2.65 %		2.62 %		(0.07)		0.03
Residential mortgage servicing rights:
Balance, beginning of period	$    178,800		$    185,017		$    196,177		$    179,558		$    165,807		(3) %		8 %
Additions for new MSR capitalized	1,168		1,601		3,740		5,194		7,813		(27) %		(85) %
Change in fair value of MSR asset:
Changes due to collection/realization of expected cash flows over time	(4,797)		(4,881)		(4,986)		(4,978)		(4,961)		(2) %		(3) %
Changes due to valuation inputs or assumptions	(2,242)		(2,937)		(9,914)		16,403		10,899		(24) %		(121) %
Balance, end of period	$    172,929		$    178,800		$    185,017		$    196,177		$    179,558		(3) %		(4) %
Residential mortgage loans serviced for others	$  12,723,932		$  12,914,046		$  13,020,189		$  12,997,911		$  12,932,747		(1) %		(2) %
MSR as % of serviced portfolio	1.36 %		1.38 %		1.42 %		1.51 %		1.39 %		(0.02)		(0.03)
nm = not meaningful

 

Columbia Banking System, Inc.
Residential Mortgage Banking Activity
(Unaudited)
	Six Months Ended				% Change
($ in thousands)	Jun 30, 2023		Jun 30, 2022		Year over Year
Residential mortgage banking revenue:
Origination and sale	$            6,753		$          31,945		(79) %
Servicing	18,564		18,645		0 %
Change in fair value of MSR asset:
Changes due to collection/realization of expected cash flows over time	(9,678)		(10,308)		(6) %
Changes due to valuation inputs or assumptions	(5,179)		51,048		(110) %
MSR hedge loss	(4,986)		—		nm
Total	$            5,474		$          91,330		(94) %
Closed loan volume for-sale	$        251,202		$      1,225,654		(80) %
Gain on sale margin	2.69 %		2.61 %		0.08
Residential mortgage servicing rights:
Balance, beginning of period	$        185,017		$        123,615		50 %
Additions for new MSR capitalized	2,769		15,203		(82) %
Change in fair value of MSR asset:
Changes due to collection/realization of expected cash flows over time	(9,678)		(10,308)		(6) %
Changes due to valuation inputs or assumptions	(5,179)		51,048		(110) %
Balance, end of period	$        172,929		$        179,558		(4) %
nm = not meaningful

 

Non-GAAP Financial Measures

In addition to results presented in accordance with generally accepted accounting principles in the United States of America (GAAP), this press release contains certain non-GAAP financial measures. The company believes presenting certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends, and our financial position. We utilize these measures for internal planning and forecasting purposes. We, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitution for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

 

Columbia Banking System, Inc.
GAAP to Non-GAAP Reconciliation
(Unaudited)
			Quarter Ended										% Change
($ in thousands, except per share data)			Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Seq. Quarter		Year over Year
Total shareholders' equity	a		$  4,828,188		$  4,884,723		$  2,479,826		$  2,417,514		$  2,518,276		(1) %		92 %
Less: Goodwill			1,029,234		1,030,142		—		—		—		— %		nm
Less: Other intangible assets, net			666,762		702,315		4,745		5,764		6,789		(5) %		nm
Tangible common shareholders' equity	b		$  3,132,192		$  3,152,266		$  2,475,081		$  2,411,750		$  2,511,487		(1) %		25 %
Less: Accumulated other comprehensive (loss) income (AOCI)			$   (418,762)		(300,134)		(426,864)		(449,560)		(308,147)		40 %		36 %
Tangible common shareholders' equity, ex AOCI	c		$  3,550,954		$  3,452,400		$  2,901,945		$  2,861,310		$  2,819,634		3 %		26 %
Total assets	d		$   53,592,096		$   53,994,226		$   31,848,639		$   31,471,960		$   30,135,694		(1) %		78 %
Less: Goodwill			1,029,234		1,030,142		—		—		—		0 %		nm
Less: Other intangible assets, net			666,762		702,315		4,745		5,764		6,789		(5) %		nm
Tangible assets	e		$   51,896,100		$   52,261,769		$   31,843,894		$   31,466,196		$   30,128,905		(1) %		72 %
Common shares outstanding at period end (1)	f		208,514		208,429		129,321		129,320		129,318		0 %		61 %
Total shareholders' equity to total assets ratio	a / d		9.01 %		9.05 %		7.79 %		7.68 %		8.36 %		(0.04)		0.65
Tangible common equity ratio	b / e		6.04 %		6.03 %		7.77 %		7.66 %		8.34 %		0.01		(2.30)
Tangible common equity ratio, ex AOCI	c / e		6.84 %		6.61 %		9.11 %		9.09 %		9.36 %		0.23		(2.52)
Book value per common share (1)	a / f		$           23.16		$           23.44		$           19.18		$           18.69		$           19.47		(1) %		19 %
Tangible book value per common share (1)	b / f		$           15.02		$           15.12		$           19.14		$           18.65		$           19.42		(1) %		(23) %
Tangible book value per common share, ex AOCI (1)	c / f		$           17.03		$           16.56		$           22.44		$           22.13		$           21.80		3 %		(22) %
nm = not meaningful

(1)	Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958.

 

Columbia Banking System, Inc.
GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
			Quarter Ended										% Change
($ in thousands)			Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Seq. Quarter		Year over Year
Non-Interest Income Adjustments
(Loss) gain on equity securities, net			$              (697)		$             2,416		$                284		$          (2,647)		$          (2,075)		(129) %		(66) %
Gain (loss) on swap derivatives			1,288		(3,543)		(2,329)		4,194		7,337		nm		(82) %
Change in fair value of certain loans held for investment			(6,965)		9,488		4,192		(26,397)		(15,210)		(173) %		(54) %
Change in fair value of MSR due to valuation inputs or assumptions			(2,242)		(2,937)		(9,914)		16,403		10,899		(24) %		(121) %
MSR hedge (loss) gain			(7,636)		2,650		(348)		(14,128)		—		(388) %		nm
Total non-interest income adjustments	a		$        (16,252)		$             8,074		$          (8,115)		$        (22,575)		$                951		(301) %		nm
Non-Interest Expense Adjustments
Merger related expenses			$          29,649		$        115,898		$          11,637		$                769		$             2,672		(74) %		nm
Exit and disposal costs			2,119		1,291		1,966		1,364		442		64 %		379 %
Total non-interest expense adjustments	b		$          31,768		$        117,189		$          13,603		$             2,133		$             3,114		(73) %		nm
Net interest income (1)	c		$        485,168		$        375,369		$        305,762		$        287,933		$        248,522		29 %		95 %
Non-interest income (GAAP)	d		$          39,678		$          54,735		$          34,879		$          29,445		$          55,235		(28) %		(28) %
Less: Non-interest income adjustments	a		16,252		(8,074)		8,115		22,575		(951)		nm		nm
Operating non-interest income (non-GAAP)	e		$          55,930		$          46,661		$          42,994		$          52,020		$          54,284		20 %		3 %
Revenue (GAAP) (1)	f=c+d		$        524,846		$        430,104		$        340,641		$        317,378		$        303,757		22 %		73 %
Operating revenue (non-GAAP)  (1)	g=c+e		$        541,098		$        422,030		$        348,756		$        339,953		$        302,806		28 %		79 %
Non-interest expense (GAAP)	h		$        328,559		$        342,818		$        194,982		$        177,964		$        179,574		(4) %		83 %
Less: Non-interest expense adjustments	b		(31,768)		(117,189)		(13,603)		(2,133)		(3,114)		(73) %		nm
Operating non-interest expense (non-GAAP)	i		$        296,791		$        225,629		$        181,379		$        175,831		$        176,460		32 %		68 %
Net income (loss) (GAAP)	j		$        133,377		$        (14,038)		$          82,964		$          84,040		$          78,591		nm		70 %
Provision (benefit) for income taxes			45,703		(4,886)		29,464		27,473		26,548		nm		72 %
Income (loss) before provision for income taxes			179,080		(18,924)		112,428		111,513		105,139		nm		70 %
Provision for credit losses			16,014		105,539		32,948		27,572		18,692		(85) %		(14) %
Pre-provision net revenue (PPNR) (non-GAAP)	k		195,094		86,615		145,376		139,085		123,831		125 %		58 %
Less: Non-interest income adjustments	a		16,252		(8,074)		8,115		22,575		(951)		nm		nm
Add: Non-interest expense adjustments	b		31,768		117,189		13,603		2,133		3,114		(73) %		nm
Operating PPNR (non-GAAP)	l		$        243,114		$        195,730		$        167,094		$        163,793		$        125,994		24 %		93 %
Net income (loss) (GAAP)	j		$        133,377		$        (14,038)		$          82,964		$          84,040		$          78,591		nm		70 %
Less: Non-interest income adjustments	a		16,252		(8,074)		8,115		22,575		(951)		nm		nm
Add: Non-interest expense adjustments	b		31,768		117,189		13,603		2,133		3,114		(73) %		nm
Tax effect of adjustments			(11,981)		(23,565)		(5,459)		(6,116)		(480)		(49) %		nm
Operating net income (non-GAAP)	m		$        169,416		$          71,512		$          99,223		$        102,632		$          80,274		137 %		111 %
nm = not meaningful

(1)	Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.

 

Columbia Banking System, Inc.
GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
			Quarter Ended										% Change
($ in thousands, except per share data)			Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Seq. Quarter		Year over Year
Average assets	n		$   53,540,574		$   39,425,975		$   31,637,490		$   30,668,177		$   30,356,903		36 %		76 %
Less: Average goodwill and other intangible assets, net			1,718,705		623,042		5,298		6,343		7,379		176 %		nm
Average tangible assets	o		$   51,821,869		$   38,802,933		$   31,632,192		$   30,661,834		$   30,349,524		34 %		71 %
Average common shareholders' equity	p		$                          4,935,239		$                          3,349,761		$                          2,438,639		$                          2,567,266		$                          2,584,836		47 %		91 %
Less: Average goodwill and other intangible assets, net			1,718,705		623,042		5,298		6,343		7,379		176 %		nm
Average tangible common equity	q		$                          3,216,534		$                          2,726,719		$                          2,433,341		$                          2,560,923		$                          2,577,457		18 %		25 %
Weighted average basic shares outstanding  (1)	r		207,977		156,383		129,321		129,319		129,306		33 %		61 %
Weighted average diluted shares outstanding  (1)	s		208,545		156,383		129,801		129,733		129,673		33 %		61 %
Select Per-Share & Performance Metrics
Earnings-per-share - basic (1)	j / r		$            0.64		$         (0.09)		$            0.64		$            0.65		$            0.61		(811) %		5 %
Earnings-per-share - diluted (1)	j / s		$            0.64		$         (0.09)		$            0.64		$            0.65		$            0.61		(811) %		5 %
Efficiency ratio	h / f		62.60 %		79.71 %		57.24 %		56.07 %		59.12 %		(17.11)		3.48
Return on average assets	j / n		1.00 %		(0.14) %		1.04 %		1.09 %		1.04 %		1.14		(0.04)
Return on average tangible assets	j / o		1.03 %		(0.15) %		1.04 %		1.09 %		1.04 %		1.18		(0.01)
PPNR return on average assets	k / n		1.46 %		0.89 %		1.82 %		1.80 %		1.64 %		0.57		(0.18)
Return on average common equity	j / p		10.84 %		(1.70) %		13.50 %		12.99 %		12.20 %		12.54		(1.36)
Return on average tangible common equity	j / q		16.63 %		(2.09) %		13.53 %		13.02 %		12.23 %		18.72		4.40
Operating Per-Share & Performance Metrics
Operating earnings-per-share - basic (1)	m / r		$            0.81		$            0.46		$            0.77		$            0.79		$            0.62		76 %		31 %
Operating earnings-per-share - diluted (1)	m / s		$            0.81		$            0.46		$            0.76		$            0.79		$            0.62		76 %		31 %
Operating efficiency ratio	i / g		54.85 %		53.46 %		52.01 %		51.72 %		58.27 %		1.39		(3.42)
Operating return on average assets	m / n		1.27 %		0.74 %		1.24 %		1.33 %		1.06 %		0.53		0.21
Operating return on average tangible assets	m / o		1.31 %		0.75 %		1.24 %		1.33 %		1.06 %		0.56		0.25
Operating PPNR return on average assets	l / n		1.82 %		2.01 %		2.10 %		2.12 %		1.66 %		(0.19)		0.16
Operating return on average common equity	m / p		13.77 %		8.66 %		16.14 %		15.86 %		12.46 %		5.11		1.31
Operating return on average tangible common equity	m / q		21.13 %		10.64 %		16.18 %		15.90 %		12.49 %		10.49		8.64

(1)	Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958.

 

Columbia Banking System, Inc.
GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
			Six Months Ended				% Change
($ in thousands)			Jun 30, 2023		Jun 30, 2022		Year over Year
Non-Interest Income Adjustments
Gain on sale of debt securities, net			$                                    —		$                                      2		(100) %
Gain (loss) on equity securities, net			1,719		(4,736)		nm
(Loss) gain on swap derivatives			(2,255)		14,384		(116) %
Change in fair value of certain loans held for investment			2,523		(36,259)		nm
Change in fair value of MSR due to valuation inputs or assumptions			(5,179)		51,048		nm
MSR hedge loss			(4,986)		—		nm
Total non-interest income adjustments	a		$                           (8,178)		$                           24,439		(133) %
Non-Interest Expense Adjustments
Merger related expenses			$                        145,547		$                             4,950		nm
Exit and disposal costs			3,410		3,475		(2) %
Total non-interest expense adjustments	b		$                        148,957		$                             8,425		nm
Net interest income (1)	c		$                        860,537		$                        477,639		80 %
Non-interest income (GAAP)	d		$                           94,413		$                        135,204		(30) %
Less: Non-interest income adjustments	a		8,178		(24,439)		(133) %
Operating non-interest income (non-GAAP)	e		$                        102,591		$                        110,765		(7) %
Revenue (GAAP) (1)	f=c+d		$                        954,950		$                        612,843		56 %
Operating revenue (non-GAAP)  (1)	g=c+e		$                        963,128		$                        588,404		64 %
Non-interest expense (GAAP)	h		$                        671,377		$                        362,004		85 %
Less: Non-interest expense adjustments	b		(148,957)		(8,425)		nm
Operating non-interest expense (non-GAAP)	i		$                        522,420		$                        353,579		48 %
Net income (GAAP)	j		$                        119,339		$                        169,748		(30) %
Provision for income taxes			40,817		56,889		(28) %
Income before provision for income taxes			160,156		226,637		(29) %
Provision for credit losses			121,553		23,496		417 %
Pre-provision net revenue (PPNR) (non-GAAP)	k		281,709		250,133		13 %
Less: Non-interest income adjustments	a		8,178		(24,439)		(133) %
Add: Non-interest expense adjustments	b		148,957		8,425		nm
Operating PPNR (non-GAAP)	l		$                        438,844		$                        234,119		87 %
Net income (GAAP)	j		$                        119,339		$                        169,748		(30) %
Less: Non-interest income adjustments	a		8,178		(24,439)		(133) %
Add: Non-interest expense adjustments	b		148,957		8,425		nm
Tax effect of adjustments			(35,546)		4,096		nm
Operating net income (non-GAAP)	m		$                        240,928		$                        157,830		53 %
nm = not meaningful
(1) Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.
Average assets	n		$                  46,522,265		$                  30,476,312		53 %
Less: Average goodwill and other intangible assets, net			$                    1,173,900		$                             7,890		nm
Average tangible assets	o		$                  45,348,365		$                  30,468,422		49 %
Average common shareholders' equity	p		$                    4,146,880		$                    2,649,406		57 %
Less: Average goodwill and other intangible assets, net			$                    1,173,900		$                             7,890		nm
Average tangible common equity	q		$                    2,972,980		$                    2,641,516		13 %
Weighted average basic shares outstanding (1)	r		182,325		129,233		41 %
Weighted average diluted shares outstanding (1)	s		182,860		129,685		41 %
Select Per-Share & Performance Metrics
Earnings-per-share - basic (1)	j / r		$                                0.65		$                                1.31		(50) %
Earnings-per-share - diluted (1)	j / s		$                                0.65		$                                1.31		(50) %
Efficiency ratio	h / f		70.30 %		59.07 %		11.23
Return on average assets	j / n		0.52 %		1.12 %		(0.60)
Return on average tangible assets	j / o		0.53 %		1.12 %		(0.59)
PPNR return on average assets	k/n		1.22 %		1.66 %		(0.44)
Return on average common equity	j / p		5.80 %		12.92 %		(7.12)
Return on average tangible common equity	j / q		8.09 %		12.96 %		(4.87)
Operating Per-Share & Performance Metrics
Operating earnings-per-share - basic (1)	m / r		$                                1.32		$                                1.22		8 %
Operating earnings-per-share - diluted (1)	m / s		$                                1.32		$                                1.22		8 %
Operating efficiency ratio	i / g		54.24 %		60.09 %		(5.85)
Operating return on average assets	m / n		1.04 %		1.04 %		—
Operating return on average tangible assets	m / o		1.07 %		1.04 %		0.03
Operating PPNR return on average assets	l / n		1.90 %		1.55 %		0.35
Operating return on average common equity	m / p		11.72 %		12.01 %		(0.29)
Operating return on average tangible common equity	m / q		16.34 %		12.05 %		4.29

(1)	Periods prior to February 28, 2023, have been restated as a result of the adjustment to common shares outstanding based on the exchange ratio from the UHC merger of 0.5958.

 

Columbia Banking System, Inc.
GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
			Quarter Ended										% Change
($ in thousands)			Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Seq. Quarter		Year over Year
Loans and leases interest income	a		$     551,997		$     412,726		$     320,747		$     276,625		$        231,932		34 %		138 %
Less: Acquired loan accretion - rate related (2), (3)	b		30,548		11,832		387		789		1,069		158 %		nm
Less: Acquired loan accretion - credit related (3)	c		7,100		3,806		—		—		—		87 %		nm
Adjusted loans and leases interest income	d=a-b-c		$     514,349		$     397,088		$     320,360		$     275,836		$        230,863		30 %		123 %
Taxable securities interest income	e		$        81,617		$        40,448		$        18,290		$        18,261		$          17,340		102 %		371 %
Less: Acquired taxable securities accretion - rate related	f		34,801		15,356		—		—		—		127 %		nm
Adjusted Taxable securities interest income	g=e-f		$        46,816		$        25,092		$        18,290		$        18,261		$          17,340		87 %		170 %
Non-taxable securities interest income (1)	h		$          8,010		$          4,068		$          1,571		$          1,651		$             1,721		97 %		365 %
Less: Acquired non-taxable securities accretion - rate related	i		2,274		901		—		—		—		152 %		nm
Adjusted Taxable securities interest income (1)	j=h-i		$          5,736		$          3,167		$          1,571		$          1,651		$             1,721		81 %		233 %
Interest income (1)	k		$     676,922		$     476,622		$     352,530		$     303,857		$        256,654		42 %		164 %
Less: Acquired loan and securities accretion - rate related	l=b+f+i		67,623		28,089		387		789		1,069		141 %		nm
Less: Acquired loan accretion - credit related	c		7,100		3,806		—		—		—		87 %		nm
Adjusted interest income (1)	m=k-l-c		$     602,199		$     444,727		$     352,143		$     303,068		$        255,585		35 %		136 %
Interest-bearing deposits interest expense	n		$     100,408		$        63,613		$        31,174		$          9,090		$             4,015		58 %		nm
Less: Acquired deposit accretion	o		(280)		(93)		—		—		—		201 %		nm
Adjusted interest-bearing deposits interest expense	p=n-o		$     100,688		$        63,706		$        31,174		$          9,090		$             4,015		58 %		nm
Interest expense	q		$     191,754		$     101,253		$        46,768		$        15,924		$             8,132		89 %		nm
Less: Acquired interest-bearing liabilities accretion (2)	r		(337)		(150)		(57)		(57)		(57)		125 %		491 %
Adjusted interest expense	s=q-r		$     192,091		$     101,403		$        46,825		$        15,981		$             8,189		89 %		nm
Net Interest Income (1)	t		$     485,168		$     375,369		$     305,762		$     287,933		$        248,522		29 %		95 %
Less: Acquired loan, securities, and interest-bearing liabilities  accretion - rate related	u=l-r		67,286		27,939		330		732		1,012		141 %		nm
Less: Acquired loan accretion - credit related	c		7,100		3,806		—		—		—		87 %		nm
Adjusted net interest income (1)	v=t-u-c		$     410,782		$     343,624		$     305,432		$     287,201		$        247,510		20 %		66 %
Average loans and leases	aa		37,169,315		29,998,630		25,855,556		24,886,203		23,550,796		24 %		58 %
Average taxable securities	ab		8,656,147		4,960,966		3,042,044		3,271,185		3,410,091		74 %		154 %
Average non-taxable securities	ac		865,278		437,020		200,825		212,847		220,327		98 %		293 %
Average interest-earning assets	ad		49,442,518		37,055,705		30,305,129		29,437,103		29,108,988		33 %		70 %
Average interest-bearing deposits	ae		24,494,717		19,496,551		16,103,984		15,350,390		15,308,058		26 %		60 %
Average interest-bearing liabilities	af		31,372,416		22,548,264		17,668,730		16,359,575		16,220,936		39 %		93 %

(1)	Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.
(2)	Includes discount accretion related to UHC's 2014 acquisition of Sterling Financial Corporation.
(3)	The cumulative fair value discount on historical Columbia loans was established as of February 28, 2023, and the allocation between the credit-related discount and the rate-related discount was established at that time. Our disclosure of credit-related and rate-related discount accretion is an estimate based on the relative allocation of these two items to the discount at closing.

 

 

Columbia Banking System, Inc.
GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
			Quarter Ended										% Change
($ in thousands)			Jun 30, 2023		Mar 31, 2023		Dec 31, 2022		Sep 30, 2022		Jun 30, 2022		Seq. Quarter		Year over Year
Average yield on loans and leases	a / aa		5.95 %		5.55 %		4.92 %		4.41 %		3.94 %		0.40		2.01
Less: Acquired loan accretion - rate related (2),(3)	b / aa		0.33 %		0.16 %		0.01 %		0.01 %		0.02 %		0.17		0.31
Less: Acquired loan accretion - credit related (3)	c / aa		0.08 %		0.05 %		— %		— %		— %		0.03		0.08
Adjusted average yield on loans and leases	d / aa		5.54 %		5.34 %		4.91 %		4.40 %		3.92 %		0.20		1.62
Average yield on taxable securities	e / ab		3.77 %		3.26 %		2.40 %		2.23 %		2.03 %		0.51		1.74
Less: Acquired taxable securities accretion - rate related	f / ab		1.61 %		1.26 %		— %		— %		— %		0.35		1.61
Adjusted average yield on taxable securities	g / ab		2.16 %		2.00 %		2.40 %		2.23 %		2.03 %		0.16		0.13
Average yield on non-taxable securities (1)	h / ac		3.70 %		3.72 %		3.13 %		3.10 %		3.13 %		(0.02)		0.57
Less: Acquired non-taxable securities accretion - rate related	i / ac		1.05 %		0.84 %		— %		— %		— %		0.21		1.05
Adjusted yield on non-taxable securities (1)	j / ac		2.65 %		2.88 %		3.13 %		3.10 %		3.13 %		(0.23)		(0.48)
Average yield on interest-earning assets (1)	k / ad		5.48 %		5.19 %		4.62 %		4.10 %		3.53 %		0.29		1.95
Less: Acquired loan and securities accretion - rate related	l / ad		0.55 %		0.31 %		0.01 %		0.01 %		0.01 %		0.24		0.54
Less: Acquired loan accretion - credit related	c / ad		0.06 %		0.04 %		— %		— %		— %		0.02		0.06
Adjusted average yield on interest-earning assets (1)	m / ad		4.87 %		4.84 %		4.61 %		4.09 %		3.52 %		0.03		1.35
Average rate on interest-bearing deposits	n / ae		1.64 %		1.32 %		0.77 %		0.23 %		0.11 %		0.32		1.53
Less: Acquired deposit accretion	o / ae		— %		— %		— %		— %		— %		—		—
Adjusted average rate on interest-bearing deposits	p / ae		1.64 %		1.32 %		0.77 %		0.23 %		0.11 %		0.32		1.53
Average rate on interest-bearing liabilities	q / af		2.45 %		1.82 %		1.05 %		0.39 %		0.20 %		0.63		2.25
Less: Acquired interest-bearing liabilities accretion (2)	r / af		— %		— %		— %		— %		— %		—		—
Adjusted average rate on interest-bearing liabilities	s / af		2.45 %		1.82 %		1.05 %		0.39 %		0.20 %		0.63		2.25
Net interest margin (1)	t / ad		3.93 %		4.08 %		4.01 %		3.88 %		3.41 %		(0.15)		0.52
Less: Acquired loan, securities, and interest-bearing liabilities  accretion - rate related	u / ad		0.55 %		0.31 %		— %		0.01 %		0.01 %		0.24		0.54
Less: Acquired loan accretion - credit related	c / ad		0.06 %		0.04 %		— %		— %		— %		0.02		0.06
Adjusted net interest margin (1)	v / ad		3.32 %		3.73 %		4.01 %		3.87 %		3.40 %		(0.41)		(0.08)

(1)	Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.
(2)	Includes discount accretion related to UHC's 2014 acquisition of Sterling Financial Corporation.
(3)	The cumulative fair value discount on historical Columbia loans was established as of February 28, 2023, and the allocation between the credit-related discount and the rate-related discount was established at that time. Our disclosure of credit-related and rate-related discount accretion is an estimate based on the relative allocation of these two items to the discount at closing.

 

 

Columbia Banking System, Inc.
GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
			Six Months Ended
($ in thousands)			Jun 30, 2023		Jun 30, 2022		Year over Year
Loans and leases interest income	a		$                  964,723		$                  444,074		117 %
Less: Acquired loan accretion - rate related (2), (3)	b		42,380		2,501		nm
Less: Acquired loan accretion - credit related (3)	c		10,906		—		nm
Adjusted loans and leases interest income	d=a-b-c		$                  911,437		$                  441,573		106 %
Taxable securities interest income	e		$                  122,065		$                    36,151		238 %
Less: Acquired taxable securities accretion - rate related	f		50,157		—		nm
Adjusted Taxable securities interest income	g=e-f		$                    71,908		$                    36,151		99 %
Non-taxable securities interest income (1)	h		$                    12,078		$                       3,447		250 %
Less: Acquired non-taxable securities accretion - rate related	i		3,175		—		nm
Adjusted Taxable securities interest income (1)	j=h-i		$                       8,903		$                       3,447		158 %
Interest income (1)	k		$              1,153,544		$                  492,948		134 %
Less: Acquired loan and securities accretion - rate related	l=b+f+i		95,712		2,501		nm
Less: Acquired loan accretion - credit related	c		10,906		—		nm
Adjusted interest income (1)	m=k-l-c		$              1,046,926		$                  490,447		113 %
Interest-bearing deposits interest expense	n		$                  164,021		$                       7,931		nm
Less: Acquired deposit accretion	o		(373)		—		nm
Adjusted interest-bearing deposits interest expense	p=n-o		$                  164,394		$                       7,931		nm
Interest expense	q		$                  293,007		$                    15,309		nm
Less: Acquired interest-bearing liabilities accretion (2)	r		(487)		(114)		327 %
Adjusted interest expense	s=q-r		$                  293,494		$                    15,423		nm
Net Interest Income (1)	t		$                  860,537		$                  477,639		80 %
Less: Acquired loan, securities, and interest-bearing liabilities  accretion - rate related	u=l-r		95,225		2,387		nm
Less: Acquired loan accretion - credit related	c		10,906		—		nm
Adjusted net interest income (1)	v=t-u-c		$                  754,406		$                  475,252		59 %
Average loans and leases	aa		33,603,781		23,061,173		46 %
Average taxable securities	ab		6,818,764		3,533,930		93 %
Average non-taxable securities	ac		652,332		227,218		187 %
Average interest-earning assets	ad		43,283,329		29,235,926		48 %
Average interest-bearing deposits	ae		22,058,850		15,459,597		43 %
Average interest-bearing liabilities	af		27,034,125		16,353,064		65 %

(1)	Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.
(2)	Includes discount accretion related to UHC's 2014 acquisition of Sterling Financial Corporation.
(3)	The cumulative fair value discount on historical Columbia loans was established as of February 28, 2023, and the allocation between the credit-related discount and the rate-related discount was established at that time. Our disclosure of credit-related and rate-related discount accretion is an estimate based on the relative allocation of these two items to the discount at closing.

 

Columbia Banking System, Inc.
GAAP to Non-GAAP Reconciliation - Continued
(Unaudited)
			Six Months Ended
($ in thousands)			Jun 30, 2023		Jun 30, 2022		Year over Year
Average yield on loans and leases	a / aa		5.77 %		3.86 %		1.91
Less: Acquired loan accretion - rate related (2),(3)	b / aa		0.25 %		0.02 %		0.23
Less: Acquired loan accretion - credit related (3)	c / aa		0.07 %		— %		0.07
Adjusted average yield on loans and leases	d / aa		5.45 %		3.84 %		1.61
Average yield on taxable securities	e / ab		3.58 %		2.05 %		1.53
Less: Acquired taxable securities accretion - rate related	f / ab		1.48 %		— %		1.48
Adjusted average yield on taxable securities	g / ab		2.10 %		2.05 %		0.05
Average yield on non-taxable securities (1)	h / ac		3.70 %		3.03 %		0.67
Less: Acquired non-taxable securities accretion - rate related	i / ac		0.98 %		— %		0.98
Adjusted yield on non-taxable securities (1)	j / ac		2.72 %		3.03 %		(0.31)
Average yield on interest-earning assets (1)	k / ad		5.35 %		3.38 %		1.97
Less: Acquired loan and securities accretion - rate related	l / ad		0.45 %		0.02 %		0.43
Less: Acquired loan accretion - credit related	c / ad		0.05 %		— %		0.05
Adjusted average yield on interest-earning assets (1)	m / ad		4.85 %		3.36 %		1.49
Average rate on interest-bearing deposits	n / ae		1.50 %		0.10 %		1.40
Less: Acquired deposit accretion	o / ae		— %		— %		—
Adjusted average rate on interest-bearing deposits	p / ae		1.50 %		0.10 %		1.40
Average rate on interest-bearing liabilities	q / af		2.19 %		0.19 %		2.00
Less: Acquired interest-bearing liabilities accretion (2)	r / af		— %		— %		—
Adjusted average rate on interest-bearing liabilities	s / af		2.19 %		0.19 %		2.00
Net interest margin (1)	t / ad		3.99 %		3.28 %		0.71
Less: Acquired loan, securities, and interest-bearing liabilities  accretion - rate related	u / ad		0.44 %		0.02 %		0.42
Less: Acquired loan accretion - credit related	c / ad		0.05 %		— %		0.05
Adjusted net interest margin (1)	v / ad		3.50 %		3.26 %		0.24

(1)	Tax exempt interest has been adjusted to a taxable equivalent basis using a 21% tax rate.
(2)	Includes discount accretion related to UHC's 2014 acquisition of Sterling Financial Corporation.
(3)	The cumulative fair value discount on historical Columbia loans was established as of February 28, 2023, and the allocation between the credit-related discount and the rate-related discount was established at that time. Our disclosure of credit-related and rate-related discount accretion is an estimate based on the relative allocation of these two items to the discount at closing.

 

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SOURCE Columbia Banking System, Inc.

FAQ

What were Columbia Banking System's net income and earnings per share for the second quarter of 2023?

Columbia Banking System reported net income of $133 million, or $0.64 per common share, for the second quarter of 2023.

What were Columbia Banking System's consolidated asset balances at the end of the second quarter of 2023?

Columbia Banking System had consolidated asset balances of $54 billion at the end of the second quarter of 2023.

What were Columbia Banking System's CET1 and total capital ratios at the end of the second quarter of 2023?

Columbia Banking System had estimated CET1 and total capital ratios of 9.1% and 11.1%, respectively, at the end of the second quarter of 2023.

What were Columbia Banking System's loan and deposit balances at the end of the second quarter of 2023?

Columbia Banking System had loan balances of $37 billion and deposit balances of $41 billion at the end of the second quarter of 2023.