2014

Columbia Banking System Announces First Quarter 2014 Earnings Highlights

- Net income of $19.8 million and diluted earnings per share of $0.37, net of a reduction in net income of $1.1 million, or $0.03 per diluted share, associated with acquisition-related expenses and FDIC acquired loan accounting.

- New loan production of over $210 million during the quarter

- Nonperforming assets to period end noncovered assets reduced to 0.75%, a decrease of 9 basis points from year-end

- Solid core deposits at 96% of total deposits

TACOMA, Wash., April 23, 2014 /PRNewswire/ -- Melanie Dressel, President and Chief Executive Officer of Columbia Banking System and Columbia Bank (NASDAQ: COLB ("Columbia") said today upon the release of Columbia's first quarter 2014 earnings, "Our results for the quarter reflect continued strong loan production throughout our footprint.  This is the second consecutive quarter with over $200 million in new loan originations.  It is encouraging to see more of our loan production translating to net bottom line portfolio growth.  In addition, our integration of West Coast is essentially complete.  Due in part to the accelerated implementation of our cost savings measures, we are ahead of schedule for achieving the full benefit of our projected accretion to earnings during the first full year following the acquisition."



Significant Influences on the Quarter Ended March 31, 2014

Balance Sheet

At March 31, 2014, Columbia's total assets were $7.24 billion, an increase of $75.5 million from December 31, 2013. Noncovered loans were $4.30 billion at March 31, 2014, up $77.6 million, or 2% from $4.22 billion at December 31, 2013. The increase in noncovered loans was driven by originations of over $210 million during the current quarter. Securities were $1.67 billion at March 31, 2014, a decrease of $25.0 million, or 1% from $1.70 billion at December 31, 2013.

Total deposits at March 31, 2014 were $6.04 billion, an increase of $84.9 million, or 1% from $5.96 billion at December 31, 2013. Core deposits comprised 96% of total deposits and were $5.77 billion at March 31, 2014.   

Asset Quality

At March 31, 2014, nonperforming assets to noncovered assets were 0.75% or $52.3 million, down from 0.84%, or $57.9 million, at December 31, 2013.  Nonaccrual loans increased $2.4 million during the first quarter driven by $8.4 million of new nonaccrual loans, partially offset by payments of $2.4 million, the return of $2.0 million of nonaccrual loans to accrual status, charge-offs of $1.4 million, and $244 thousand of loans transferred to other real estate owned ("OREO"). Noncovered OREO and other personal property owned ("OPPO") decreased by $8.0 million during the first quarter, primarily due to $7.3 million in sales and $929 thousand in write-downs, partially offset by the previously mentioned $244 thousand transferred from loans. 

The following table sets forth, at the dates indicated, information regarding noncovered nonaccrual loans and total noncovered nonperforming assets:



March 31,

2014


December 31,

 2013



(dollars in thousands)

Nonaccrual noncovered loans:





Commercial business


$

14,541



$

12,609


Real estate:





One-to-four family residential


2,900



2,667


Commercial and multifamily residential


11,050



11,043


Total real estate


13,950



13,710


Real estate construction:





One-to-four family residential


3,026



3,705


Total real estate construction


3,026



3,705


Consumer


4,880



3,991


Total nonaccrual loans


36,397



34,015


Noncovered other real estate owned and other personal property owned


15,924



23,918


Total nonperforming noncovered assets


$

52,321



$

57,933


The following table provides an analysis of the Company's allowance for loan and lease losses ("ALLL") at the dates and the periods indicated:



Three Months Ended March 31,



2014


2013



(in thousands)

Beginning balance


$

52,280



$

52,244

Charge-offs:





Commercial business


(233)



(1,314)

One-to-four family residential real estate


(207)



(116)

Commercial and multifamily residential real estate


(1,023)



(783)

One-to-four family residential real estate construction




(133)

Consumer


(727)



(171)

Total charge-offs


(2,190)



(2,517)

Recoveries:





Commercial business


490



113

One-to-four family residential real estate


28



Commercial and multifamily residential real estate


39



93

One-to-four family residential real estate construction


42



2,139

Consumer


253



47

Total recoveries


852



2,392

Net charge-offs


(1,338)



(125)

Recapture of provision for loan and lease losses


(500)



(1,000)

Ending balance


$

50,442



$

51,119

 

Columbia's allowance for loan losses to nonperforming, noncovered loans ratio was 139% at March 31, 2014, down from 154% at December 31, 2013 and down from 155% at March 31, 2013.  The allowance for noncovered loan losses to period end loans was 1.17% at March 31, 2014 compared to 1.24% at December 31, 2013 and 1.95% at March 31, 2013. The decrease in the allowance percentage compared to March 31, 2013 reflects the inclusion of acquired loans in the ratio, for which only a small allowance was estimated at quarter-end given management's judgment that the remaining discount on the loans still significantly addresses the estimated credit losses in acquired loans. Excluding acquired loans, the allowance at March 31, 2014 represented 1.46% of noncovered loans, compared to 1.58% of noncovered loans at December 31, 2013. The decline reflects strong organic loan growth as well as continued improvement in the Company's asset quality metrics.

For the first quarter of 2014, Columbia had a recapture of provision of $500 thousand for noncovered loans. For the comparable quarter last year the company had a recapture of provision of $1.0 million.

Net Interest Margin ("NIM")

Columbia's net interest margin decreased to 4.85% for the first quarter of 2014, down from 5.03% for the fourth quarter of 2013. The 18 basis point decline in the net interest margin for the current quarter was primarily due to fewer accruing days in the current quarter, which negatively impacted the net interest margin by approximately 11 basis points. The remaining decrease can be attributed to the continuing low interest rate environment which negatively impacted yields on new floating rate loan originations priced off of Libor and other indices. 

Compared to the first quarter of 2013, Columbia's net interest margin decreased 21 basis points. Approximately 10 basis points of the decrease was due to net premium amortization recorded during the current quarter stemming from the West Coast investment portfolio, which was acquired on April 1, 2013. The remaining decrease can be attributed to the continuing low interest rate environment.

Columbia's operating net interest margin(1) decreased to 4.19% for the first quarter of 2014, compared to 4.31% for the fourth quarter of 2013. The decrease was primarily due to fewer accruing days in the current quarter compared to the fourth quarter of 2013. The operating net interest margin was relatively flat compared to the first quarter of 2013, decreasing only 2 basis points from 4.21%.

The following table shows the impact to interest income resulting from accretion of income on acquired loan portfolios as well as the net interest margin and operating net interest margin for the periods presented:



Three Months Ended



March 31, 2014


March 31, 2013



(dollars in thousands)

Incremental accretion income due to:





FDIC acquired impaired loans


$

6,489



$

8,375


Other FDIC acquired loans


204



1,070


Other acquired loans


5,615




Incremental accretion income


$

12,308



$

9,445







Reported net interest margin


4.85

%


5.06

%

Operating net interest margin (1)


4.19

%


4.21

%


(1) Operating net interest margin is a non-GAAP financial measure. See section titled "Non-GAAP Financial Measures" on the last page of this earnings release for the reconciliation of operating net interest margin to net interest margin.

Impact of FDIC Acquired Loan Accounting

The following table illustrates the impact to earnings associated with Columbia's FDIC acquired loan portfolios:

FDIC Acquired Loan Activity








Three Months Ended



March 31, 2014


March 31, 2013



(in thousands)

Incremental accretion income on FDIC acquired impaired loans


$

6,489



$

8,375

Incremental accretion income on other FDIC acquired loans


204



1,070

Recapture (provision) for losses on covered loans


(2,422)



(980)

Change in FDIC loss-sharing asset


(4,819)



(10,483)

Claw back liability expense


(204)



(231)

Pre-tax earnings impact


$

(752)



$

(2,249)

The incremental accretion income on FDIC acquired impaired loans in the table above represents the amount of income recorded on acquired loans above the contractual rate stated in the individual loan notes and stems from the discount established at the time these loan portfolios were acquired. At March 31, 2014, the accretable yield on acquired impaired loans was $101.5 million. The accretable yield represents income to be recorded by Columbia over the remaining life of the acquired loans. Accretable yield is subject to change based upon expected future loan cash flows, which are remeasured by Columbia on a quarterly basis. 

The $2.4 million net provision for losses on covered loans in the current period is substantially offset by an 80%, or $1.9 million, benefit to the change in the FDIC loss-sharing asset, resulting in a negative net pre-tax earnings impact of $484 thousand. The provision for losses on covered loans was primarily due to decreased expected future cash flows as remeasured during the current quarter when compared to the prior quarter's remeasurement. 

The $4.8 million change in the FDIC loss-sharing asset in the current quarter negatively affected noninterest income and consists of $6.5 million of amortization expense and approximately $305 thousand of expense related to covered other real estate owned, partially offset by the $1.9 million adjustment described above.


First Quarter 2014 Results

Net Interest Income

Net interest income for the first quarter of 2014 was $73.9 million, an increase of $20.4 million from $53.5 million for the same quarter in 2013.  The increase over the prior year period is primarily due to the interest and accretion income recorded during the first quarter of 2014 related to the West Coast acquisition, which closed on April 1, 2013. Compared to the fourth quarter of 2013, net interest income decreased $3.3 million from $77.2 million due to fewer accruing days in the current quarter, which negatively impacted net interest income by approximately $1.6 million, as well as lower rates on loans and $1.0 million less accretion recognized on the acquired loan portfolios.

Noninterest Income

Total noninterest income was $14.0 million for the first quarter of 2014, compared to $1.7 million for the first quarter of 2013. The increase from the prior year period was due to a $5.3 million increase in service charges and other fees resulting from the increased customer base from the acquisition of West Coast. In addition, the expense recorded for the change in FDIC loss-sharing asset was $5.7 million less in the current quarter compared to the first quarter of 2013.  Compared to the prior quarter, noninterest income before change in loss-sharing asset decreased $1.4 million, primarily due to $1.0 million of noninterest income recorded in the fourth quarter of 2013 related to the integration of a West Coast operating platform.

The change in the FDIC loss-sharing asset is a significant component of noninterest income. The following table reflects the income statement components of the change in the FDIC loss-sharing asset for the three month periods indicated:



Three Months Ended



March 31,



2014


2013



(in thousands)

Adjustments reflected in income





Amortization, net


(6,452)



(9,779)

Loan impairment


1,938



784

Sale of other real estate


(756)



(1,346)

Write-downs of other real estate


516



52

Other


(65)



(194)

Change in FDIC loss-sharing asset


$

(4,819)



$

(10,483)

Noninterest Expense

Total noninterest expense for the first quarter of 2014 was $57.4 million, an increase of $19.3 million, or 51% from $38.0 million for the same quarter in 2013. The increase from the prior year period was primarily due to additional ongoing noninterest expense stemming from the growth resulting from the West Coast acquisition. In addition, acquisition-related expenses were $966 thousand for the current quarter compared to $723 thousand for the prior year period.

Compared to the fourth quarter of 2013, noninterest expense decreased $6.2 million. The decrease was primarily due to the decline in acquisition-related costs, which were $966 thousand for the current period, compared to $7.9 million for the fourth quarter of 2013.

Clint Stein, Columbia's Chief Financial Officer, commented, "We continue to show improvement in our controllable expenses and that is evident in our current period financial results. With the West Coast integration behind us, we believe we can gain further operating efficiencies which, despite ongoing upward expense pressure, should allow us to make additional progress towards lowering our future expense run rate."

Organizational Update

Melanie Dressel commented, "We continue to pursue initiatives designed to improve our operating efficiency without sacrificing our core value of providing customer satisfaction.  We have completed the planned consolidations of overlapping locations as a result of the West Coast acquisition, and currently operate 140 branches throughout our footprint.  We have also taken a strategic look at where our branches should be to best serve our customers efficiently and effectively. As a result, during the first quarter we relocated a branch in Bellevue and a branch in Federal Way to new locations. In addition, during the second quarter we will merge two of our Tacoma branches."

Conference Call

Columbia's management will discuss the first quarter 2014 results on a conference call scheduled for Thursday, April 24, 2014 at 1:00 p.m. PST (4:00 pm EST). Interested parties may listen to this discussion by calling 1-866-378-3802; Conference ID code #22707799.

A conference call replay will be available from approximately 5:00 p.m. PST on April 24, 2014 through midnight PST on May 1, 2014. The conference call replay can be accessed by dialing 1-855-859-2056 and entering Conference ID code #22707799.

About Columbia

Headquartered in Tacoma, Washington, Columbia Banking System, Inc. is the holding Company of Columbia State Bank, a Washington state-chartered full-service commercial bank. For the seventh consecutive year, the bank was named in 2013 as one of Puget Sound Business Journal's "Washington's Best Workplaces."

More information about Columbia can be found on its website at www.columbiabank.com.

Note Regarding Forward-Looking Statements

This news release includes forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These forward looking statements describe Columbia's management's expectations regarding future events and developments such as future operating results, growth in loans and deposits, continued success of Columbia's style of banking and the strength of the local economy. The words "will," "believe," "expect," "intend," "should," and "anticipate" and words of similar construction are intended in part to help identify forward looking statements. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely.  In addition to discussions about risks and uncertainties set forth from time to time in Columbia's filings with the Securities and Exchange Commission, available at the SEC's website at www.sec.gov and the Company's website at www.columbiabank.com, including the "Risk Factors," "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our annual reports on Form 10-K and quarterly reports on Form 10-Q, factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following:  (1) local, national and international economic conditions may be less favorable than expected or have a more direct and pronounced effect on Columbia than expected and adversely affect Columbia's ability to continue its internal growth at historical rates and maintain the quality of its earning assets; (2) changes in interest rates may reduce interest margins more than expected and negatively affect funding sources; (3) projected business increases following strategic expansion or opening or acquiring new branches may be lower than expected; (4) costs or difficulties related to the integration of acquisitions may be greater than expected; (5) competitive pressure among financial institutions may increase significantly; and (6) legislation or regulatory requirements or changes may adversely affect the businesses in which Columbia is engaged. We believe the expectations reflected in our forward-looking statements are reasonable, based on information available to us on the date hereof. However, given the described uncertainties and risks, we cannot guarantee our future performance or results of operations and you should not place undue reliance on these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The factors noted above and the risks and uncertainties described in our SEC filings should be considered when reading any forward-looking statements in this release.

 

Contacts:

Melanie J. Dressel,


President and


Chief Executive Officer


(253) 305-1911




Clint E. Stein,


Executive Vice President and


Chief Financial Officer


(253) 593-8304




FINANCIAL STATISTICS





Columbia Banking System, Inc.





Unaudited


Three Months Ended






March 31,






2014


2013




Earnings


(dollars in thousands except per share amounts)




Net interest income


$

73,940



$

53,482





Recapture of provision for loan and lease losses


$

(500)



$

(1,000)





Provision for losses on covered loans, net (1)


$

2,422



$

980





Noninterest income


$

14,008



$

1,658





Noninterest expense


$

57,386



$

38,049





Acquisition-related expense (included in noninterest expense)


$

966



$

723





Net income


$

19,844



$

12,176





Per Common Share








Earnings (basic)


$

0.38



$

0.31





Earnings (diluted)


$

0.37



$

0.31





Book value


$

20.39



$

19.32





Averages








Total assets


$

7,143,759



$

4,851,044





Interest-earning assets


$

6,244,692



$

4,336,978





Loans, including covered loans


$

4,537,107



$

2,962,559





Securities


$

1,682,370



$

1,051,657





Deposits


$

5,901,838



$

3,990,127





Core deposits


$

5,637,926



$

3,741,086





Interest-bearing deposits


$

3,772,370



$

2,740,100





Interest-bearing liabilities


$

3,868,060



$

2,771,743





Noninterest-bearing deposits


$

2,129,468



$

1,250,027





Shareholders' equity


$

1,067,353



$

768,390





Financial Ratios








Return on average assets


1.11

%


1.02

%




Return on average common equity


7.45

%


6.43

%




Average equity to average assets


14.94

%


15.84

%




Net interest margin


4.85

%


5.06

%




Efficiency ratio (tax equivalent)(2)


66.49

%


68.68

%






















March 31,


December 31,


Period end


2014


2013


2013


Total assets


$

7,237,053



$

4,905,011



$

7,161,582



Covered assets, net


$

274,896



$

377,024



$

289,790



Loans, excluding covered loans, net


$

4,297,076



$

2,621,212



$

4,219,451



Allowance for noncovered loan and lease losses


$

50,442



$

51,119



$

52,280



Securities


$

1,671,594



$

1,033,783



$

1,696,640



Deposits


$

6,044,416



$

4,046,539



$

5,959,475



Core deposits


$

5,768,434



$

3,796,574



$

5,696,357



Shareholders' equity


$

1,074,491



$

769,660



$

1,053,249



Nonperforming, noncovered assets








Nonaccrual loans


$

36,397



$

32,886



$

34,015



Other real estate owned ("OREO") and other personal property owned ("OPPO")


15,924



12,000



23,918



Total nonperforming, noncovered assets


$

52,321



$

44,886



$

57,933



Nonperforming assets to period-end noncovered loans + OREO and OPPO


1.21

%


1.70

%


1.37

%


Nonperforming loans to period-end noncovered loans


0.85

%


1.25

%


0.81

%


Nonperforming assets to period-end noncovered assets


0.75

%


0.99

%


0.84

%


Allowance for loan and lease losses to period-end noncovered loans


1.17

%


1.95

%


1.24

%


Allowance for loan and lease losses to nonperforming noncovered loans


138.59

%


155.44

%


153.70

%


Net noncovered loan charge-offs


$

1,338


(3)

$

125


(4)

$

3,124


(5)









(1) Provision(recapture) for losses on covered loans was partially offset by $1.9 million and $784 thousand in income recorded to Change in FDIC loss-sharing asset in the Consolidated Statements of Income for the three months ended March 31, 2014 and 2013, respectively.

(2) Noninterest expense, excluding net benefit of operation of other real estate and other personal property, FDIC clawback liability and acquisition-related expenses, divided by the sum of (1)net interest income on a tax equivalent basis, excluding incremental accretion income on the acquired loan portfolio, premium amortization on acquired securities, interest reversals on nonaccrual loans, and prepayment expenses on FHLB advances, and (2)noninterest income on a tax equivalent basis, excluding gain/loss on investment securities and the change in FDIC loss-sharing asset.

(3)  For the three months ended March 31, 2014.

(4)  For the three months ended March 31, 2013.

(5)  For the twelve months ended December 31, 2013.















FINANCIAL STATISTICS







Columbia Banking System, Inc.







Unaudited


March 31,


December 31,



2014


2013

Loan Portfolio Composition


(dollars in thousands)

Noncovered loans:









Commercial business


$

1,601,676



37.3

%


$

1,561,782



37.0

%

Real estate:









One-to-four family residential


105,141



2.4

%


108,317



2.6

%

Commercial and multifamily residential


2,113,609



49.3

%


2,080,075



49.2

%

Total real estate


2,218,750



51.7

%


2,188,392



51.8

%

Real estate construction:









One-to-four family residential


57,310



1.3

%


54,155



1.3

%

Commercial and multifamily residential


130,809



3.0

%


126,390



3.0

%

Total real estate construction


188,119



4.3

%


180,545



4.3

%

Consumer


351,255



8.2

%


357,014



8.5

%

Subtotal loans


4,359,800



101.5

%


4,287,733



101.6

%

Less:  Net unearned income


(62,724)



(1.5)

%


(68,282)



(1.6)

%

Total noncovered loans, net of unearned income


4,297,076



100.0

%


4,219,451



100.0

%

Less:  Allowance for loan and lease losses


(50,442)





(52,280)




Noncovered loans, net


4,246,634





4,167,171




Covered loans, net of allowance for loan losses of ($20,129) and ($20,174), respectively


260,158





277,671




Total loans, net


$

4,506,792





$

4,444,842




Loans held for sale


$





$

735

























March 31,


December 31,



2014


2013

Deposit Composition


(dollars in thousands)

Core deposits:









Demand and other non-interest bearing


$

2,225,212



36.8

%


$

2,171,703



36.4

%

Interest bearing demand


1,188,109



19.7

%


1,170,006



19.6

%

Money market


1,545,802



25.6

%


1,569,261



26.3

%

Savings


530,112



8.8

%


496,444



8.3

%

Certificates of deposit less than $100,000


279,199



4.6

%


288,943



4.9

%

Total core deposits


5,768,434



95.5

%


5,696,357



95.5

%










Certificates of deposit greater than $100,000


191,175



3.1

%


201,498



3.5

%

Certificates of deposit insured by CDARS®


19,380



0.3

%


19,488



0.3

%

Brokered money market accounts


65,138



1.1

%


41,765



0.7

%

Subtotal


6,044,127



100.0

%


5,959,108



100.0

%

Premium resulting from acquisition date fair value adjustment


289





367




Total deposits


$

6,044,416





$

5,959,475




 


FINANCIAL STATISTICS







Columbia Banking System, Inc.







Unaudited


















March 31,


December 31,



2014


2013



OREO


OPPO


OREO


OPPO

OREO and OPPO Composition


(in thousands)

Covered


$

14,712



$

26



$

12,093



$

26


Noncovered


15,840



84



23,834



84


Total


$

30,552



$

110



$

35,927



$

110


















Three Months Ended





March 31,





2014


2013





OREO and OPPO Earnings Impact


(in thousands)





Net cost (benefit) of operation of noncovered OREO


$

327



$

(54)






Net benefit of operation of covered OREO


(181)



(2,447)






Net cost (benefit) of operation of OREO


$

146



$

(2,501)















Noncovered OPPO benefit, net


$

(125)



$

(104)






Covered OPPO cost, net


1








OPPO benefit, net (1)


$

(124)



$

(104)















(1) OPPO benefit, net is included in Other noninterest expense in the Consolidated Statements of Income.

The following table shows a summary of FDIC acquired loan accounting for the five most recent quarters:



Three Months Ended



March 31,


December 31,


September 30,


June 30,


March 31,



2014


2013


2013


2013


2013



(in thousands)

Expense to pre-tax earnings (1)


$

(752)



$

(1,248)



$

(3,362)



$

(3,149)



$

(2,249)













Balance sheet components:











Covered loans, net of allowance


$

260,158



$

277,671



$

302,160



$

338,661



$

363,213


Covered OREO


14,712



12,093



12,730



12,854



13,811


FDIC loss-sharing asset


36,837



39,846



53,559



67,374



83,115



(1) For details of the components of expense to pre-tax earnings related to FDIC acquired loan accounting, see previous table entitled "FDIC Acquired Loan Activity."


QUARTERLY FINANCIAL STATISTICS

Columbia Banking System, Inc.

Three Months Ended

Unaudited


March 31,


December 31,


September 30,


June 30,


March 31,



2014


2013


2013


2013


2013



(dollars in thousands except per share)

Earnings



Net interest income


$

73,940



$

77,209



$

80,415



$

79,989



$

53,482


Provision (recapture) for loan and lease losses


$

(500)



$

(2,100)



$

4,260



$

2,000



$

(1,000)


Provision (recapture) for losses on covered loans


$

2,422



$

(1,582)



$

(947)



$

(1,712)



$

980


Noninterest income


$

14,008



$

10,612



$

7,622



$

6,808



$

1,658


Noninterest expense


$

57,386



$

63,619



$

64,714



$

64,504



$

38,049


Acquisition-related expense (included in noninterest expense)


$

966



$

7,910



$

7,621



$

9,234



$

723


Net income


$

19,844



$

19,973



$

13,276



$

14,591



$

12,176


Per Common Share











Earnings (basic)


$

0.38



$

0.39



$

0.26



$

0.28



$

0.31


Earnings (diluted)


$

0.37



$

0.38



$

0.25



$

0.28



$

0.31


Book value


$

20.39



$

20.50



$

20.35



$

20.07



$

19.32


Averages











Total assets


$

7,143,759



$

7,192,084



$

7,048,864



$

7,110,957



$

4,851,044


Interest-earning assets


$

6,244,692



$

6,269,894



$

6,101,960



$

6,284,281



$

4,336,978


Loans, including covered loans


$

4,537,107



$

4,504,587



$

4,504,040



$

4,571,181



$

2,962,559


Securities


$

1,682,370



$

1,662,720



$

1,512,292



$

1,665,180



$

1,051,657


Deposits


$

5,901,838



$

6,003,657



$

5,837,018



$

5,824,802



$

3,990,127


Core deposits


$

5,637,926



$

5,735,099



$

5,558,246



$

5,526,238



$

3,741,086


Interest-bearing deposits


$

3,772,370



$

3,839,060



$

3,805,260



$

3,986,581



$

2,740,100


Interest-bearing liabilities


$

3,868,060



$

3,886,126



$

3,898,997



$

4,161,095



$

2,771,743


Noninterest-bearing deposits


$

2,129,468



$

2,164,597



$

2,031,758



$

1,838,221



$

1,250,027


Shareholders' equity


$

1,067,353



$

1,056,694



$

1,036,134



$

1,051,380



$

768,390


Financial Ratios











Return on average assets


1.11

%


1.11

%


0.75

%


0.82

%


1.02

%

Return on average common equity


7.45

%


7.57

%


5.13

%


5.56

%


6.43

%

Average equity to average assets


14.94

%


14.69

%


14.70

%


14.79

%


15.84

%

Net interest margin


4.85

%


5.03

%


5.37

%


5.19

%


5.06

%

Efficiency ratio (tax equivalent)


66.49

%


64.83

%


66.59

%


65.54

%


68.68

%

Period end











Total assets


$

7,237,053



$

7,161,582



$

7,150,297



$

7,070,465



$

4,905,011


Covered assets, net


$

274,896



$

289,790



$

314,898



$

351,545



$

377,024


Loans, excluding covered loans, net


$

4,297,076



$

4,219,451



$

4,193,732



$

4,181,018



$

2,621,212


Allowance for noncovered loan and lease losses


$

50,442



$

52,280



$

55,844



$

51,698



$

51,119


Securities


$

1,671,594



$

1,696,640



$

1,602,484



$

1,541,039



$

1,033,783


Deposits


$

6,044,416



$

5,959,475



$

5,948,967



$

5,747,861



$

4,046,539


Core deposits


$

5,768,434



$

5,696,357



$

5,662,958



$

5,467,899



$

3,796,574


Shareholders' equity


$

1,074,491



$

1,053,249



$

1,045,797



$

1,030,674



$

769,660


Nonperforming, noncovered assets











Nonaccrual loans


$

36,397



$

34,015



$

35,961



$

43,610



$

32,886


OREO and OPPO


15,924



23,918



23,641



24,423



12,000


Total nonperforming, noncovered assets


$

52,321



$

57,933



$

59,602



$

68,033



$

44,886


Nonperforming assets to period-end noncovered loans + OREO and OPPO


1.21

%


1.37

%


1.41

%


1.62

%


1.70

%

Nonperforming loans to period-end noncovered loans


0.85

%


0.81

%


0.86

%


1.04

%


1.25

%

Nonperforming assets to period-end noncovered assets


0.75

%


0.84

%


0.87

%


1.01

%


0.99

%

Allowance for loan and lease losses to period-end noncovered loans


1.17

%


1.24

%


1.33

%


1.24

%


1.95

%

Allowance for loan and lease losses to nonperforming noncovered loans


138.59

%


153.70

%


155.29

%


118.55

%


155.44

%

Net noncovered loan charge-offs


$

1,338



$

1,464



$

114



$

1,421



$

125


 

 


CONSOLIDATED STATEMENTS OF INCOME



Columbia Banking System, Inc.


Three Months Ended

Unaudited


March 31,



2014


2013



(in thousands except per share)

Interest Income





Loans


$

65,541



$

48,028

Taxable securities


6,752



4,234

Tax-exempt securities


2,618



2,298

Federal funds sold and deposits in banks


14



201

Total interest income


74,925



54,761

Interest Expense





Deposits


752



1,089

Federal Home Loan Bank advances


114



71

Other borrowings


119



119

Total interest expense


985



1,279

Net Interest Income


73,940



53,482

Recapture of provision for loan and lease losses


(500)



(1,000)

Provision for losses on covered loans, net


2,422



980

Net interest income after provision (recapture) for loan and lease losses


72,018



53,502

Noninterest Income





Service charges and other fees


12,936



7,594

Merchant services fees


1,870



1,851

Investment securities gains, net


223



370

Bank owned life insurance


965



698

Change in FDIC loss-sharing asset


(4,819)



(10,483)

Other


2,833



1,628

Total noninterest income


14,008



1,658

Noninterest Expense





Compensation and employee benefits


31,338



21,653

Occupancy


8,244



4,753

Merchant processing


980



857

Advertising and promotion


769



870

Data processing and communications


3,520



2,580

Legal and professional fees


2,169



2,050

Taxes, licenses and fees


1,180



1,387

Regulatory premiums


1,176



857

Net cost (benefit) of operation of other real estate


146



(2,501)

Amortization of intangibles


1,580



1,029

Other


6,284



4,514

Total noninterest expense


57,386



38,049

Income before income taxes


28,640



17,111

Provision for income taxes


8,796



4,935

Net Income


$

19,844



$

12,176

Earnings per common share





Basic


$

0.38



$

0.31

Diluted


$

0.37



$

0.31

Dividends paid per common share


$

0.12



$

0.10

Weighted average number of common shares outstanding


51,097



39,348

Weighted average number of diluted common shares outstanding


52,433



39,351

 


CONSOLIDATED BALANCE SHEETS

Columbia Banking System, Inc.

Unaudited





March 31,


December 31,






2014


2013






(in thousands)

ASSETS



Cash and due from banks


$

191,706



$

165,030

Interest-earning deposits with banks


45,083



14,531

Total cash and cash equivalents


236,789



179,561

Securities available for sale at fair value (amortized cost of $1,644,805 and $1,680,491, respectively)


1,639,370



1,664,111

Federal Home Loan Bank stock at cost


32,224



32,529

Loans held for sale




735

Loans, excluding covered loans, net of unearned income of ($62,724) and ($68,282), respectively


4,297,076



4,219,451

Less: allowance for loan and lease losses


50,442



52,280

Loans, excluding covered loans, net


4,246,634



4,167,171

Covered loans, net of allowance for loan losses of ($20,129) and ($20,174), respectively


260,158



277,671

Total loans, net


4,506,792



4,444,842

FDIC loss-sharing asset


36,837



39,846

Interest receivable


23,600



22,206

Premises and equipment, net


156,836



154,732

Other real estate owned ($14,712 and $12,093 covered by FDIC loss-share, respectively)


30,552



35,927

Goodwill


343,952



343,952

Other intangible assets, net


24,273



25,852

Other assets


205,828



217,289

Total assets


$

7,237,053



$

7,161,582

LIABILITIES AND SHAREHOLDERS' EQUITY





Deposits:





Noninterest-bearing


$

2,225,212



$

2,171,703

Interest-bearing


3,819,204



3,787,772

Total deposits


6,044,416



5,959,475

Federal Home Loan Bank advances


6,597



36,606

Securities sold under agreements to repurchase


25,000



25,000

Other liabilities


86,549



87,252

Total liabilities


6,162,562



6,108,333

Commitments and contingent liabilities









March 31,


December 31,






2014


2013





Preferred stock (no par value)








Authorized shares

2,000



2,000






Issued and outstanding

9



9



2,217



2,217

Common stock (no par value)








Authorized shares

63,033



63,033






Issued and outstanding

52,600



51,265



861,125



860,562

Retained earnings


216,192



202,514

Accumulated other comprehensive loss


(5,043)



(12,044)

Total shareholders' equity


1,074,491



1,053,249

Total liabilities and shareholders' equity


$

7,237,053



$

7,161,582

 

 


AVERAGE BALANCES AND RATES

Columbia Banking System, Inc.

Unaudited



Three Months Ended March 31,


Three Months Ended March 31,



2014


2013



Average
Balances


Interest
Earned / Paid


Average
Rate


Average
Balances


Interest
Earned / Paid


Average
Rate



(dollars in thousands)

ASSETS













Loans, excluding covered loans, net (1) (3)


$

4,248,105



$

54,946



5.17

%


$

2,559,177



$

33,163



5.18

%

Covered loans, net (2)


289,002



10,952



15.16

%


403,382



14,992



14.87

%

Taxable securities


1,329,679



6,752



2.03

%


782,158



4,234



2.17

%

Tax exempt securities (3)


352,691



4,109



4.66

%


269,499



3,566



5.29

%

Interest-earning deposits with banks and federal funds sold


25,215



14



0.23

%


322,761



201



0.25

%

Total interest-earning assets


6,244,692



$

76,773



4.92

%


4,336,977



$

56,156



5.18

%

Other earning assets


126,924







80,604






Noninterest-earning assets


772,143







433,463






Total assets


$

7,143,759







$

4,851,044






LIABILITIES AND SHAREHOLDERS' EQUITY

Certificates of deposit


$

503,129



$

362



0.29

%


$

482,644



$

580



0.48

%

Savings accounts


513,911



13



0.01

%


326,760



16



0.02

%

Interest-bearing demand


1,168,708



109



0.04

%


839,716



179



0.09

%

Money market accounts


1,586,622



268



0.07

%


1,090,980



314



0.12

%

Total interest-bearing deposits


3,772,370



752



0.08

%


2,740,100



1,089



0.16

%

Federal Home Loan Bank advances


70,690



114



0.65

%


6,643



71



4.26

%

Other borrowings


25,000



119



1.90

%


25,000



119



1.90

%

Total interest-bearing liabilities


3,868,060



$

985



0.10

%


2,771,743



$

1,279



0.18

%

Noninterest-bearing deposits


2,129,468







1,250,028






Other noninterest-bearing liabilities


78,878







60,883






Shareholders' equity


1,067,353







768,390






Total liabilities & shareholders' equity


$

7,143,759







$

4,851,044






Net interest income


$

75,788







$

54,877




Net interest margin


4.85

%






5.06

%


(1) Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on certain acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $983 thousand and $661 thousand for the three months ended March 31, 2014 and 2013, respectively. The accretion of net unearned discounts on certain acquired loans was $5.8 million and $1.1 million for the three months ended March 31, 2014 and 2013, respectively.

(2) Incremental accretion on acquired impaired loans is included in covered loan interest earned. The incremental accretion income on acquired impaired loans was $6.5 million and $8.4 million for the three months ended March 31, 2014 and 2013, respectively.

(3) Yields on a fully tax equivalent basis, based on a marginal tax rate of 35% for 2013 and 36% for 2014. The tax equivalent yield adjustment to interest earned on noncovered loans was $357 thousand and $127 thousand for the three months ended March 31, 2014 and 2013, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.5 million and $1.3 million for the three months ended March 31, 2014 and 2013, respectively.

Non-GAAP Financial Measures

The Company considers operating net interest margin to be an important measurement as it more closely reflects the ongoing operating performance of the Company. Despite the importance of the operating net interest margin to the Company, there is no standardized definition for it and, as a result, the Company's calculations may not be comparable with other organizations. Also, there may be limits in the usefulness of this measure to investors. As a result, the Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following table reconciles the Company's calculation of the operating net interest margin to the net interest margin:



Three Months Ended March 31,



2014


2013






Net interest margin


4.85

%


5.06

%

Adjustments to net interest margin to arrive at operating net interest margin:





Incremental accretion income on FDIC acquired impaired loans


(0.41)

%


(0.77)

%

Incremental accretion income on other FDIC acquired loans


(0.01)

%


(0.10)

%

Incremental accretion income on other acquired loans


(0.36)

%


%

Premium amortization on acquired securities


0.10

%


%

Interest reversals on nonaccrual loans


0.02

%


0.02

%

Operating net interest margin


4.19

%


4.21

%

 

Logo - http://photos.prnewswire.com/prnh/20130708/SF43770LOGO

SOURCE Columbia Banking System, Inc.



RELATED LINKS
http://www.columbiabank.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.