COLUMBIA BANKING SYSTEM, INC. REPORTS THIRD QUARTER 2023 RESULTS

News provided by

Columbia Banking System, Inc.

Oct 18, 2023, 16:02 ET

Third Quarter 2023 Results

  • Net income of $136 million, or $0.65 per diluted common share
  • Operating net income of $164 million, or $0.79 per diluted common share1
  • Consolidated asset balances of $52 billion at quarter end
  • Loan balances of $37 billion and deposit balances of $42 billion at quarter end
  • Estimated CET1 and total capital ratios of 9.4% and 11.5% at quarter end

TACOMA, Wash., Oct. 18, 2023 /PRNewswire/ -- 

$0.65


$0.79


$22.21


$14.22

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 remain focused on their customers and communities as we continue to drive balanced growth for the organization," said Clint Stein, President and CEO. "We are back to business as usual, and our third quarter results highlight stabilizing customer deposit trends, relationship-driven growth in our loan portfolio and customer-based fee income, and a smaller impact from merger-related expense that affect our reported results. We achieved $140 million in annualized net merger-related cost savings through quarter end, surpassing our originally announced target of $135 million despite continued investment in our growing franchise, which includes the opening of our first branch in Utah during the third quarter.  Our talented associates, expanding footprint, and customer-focused business model enable us to continue to win business and drive shareholder value."

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

3Q23 HIGHLIGHTS (COMPARED TO 2Q23)





Net Interest
Income and
NIM

•   Net interest income decreased by $3 million or 1% on a linked-quarter basis as the increase in interest income due to higher yields was more than offset by higher funding costs.


•   Net interest margin was 3.91%, down 2 basis points from the prior quarter. The second full quarter as a combined organization, higher customer balances, and consistent purchase accounting trends contributed to net interest margin stabilization between quarters.





Non-Interest
Income and
Expense

•   Non-interest income increased by $4 million due primarily to higher customer-related fee income and loan gain-on-sale income as well as a lower loss due to cumulative non-merger fair value accounting and hedges.


•   Non-interest expense decreased by $24 million due to the realization of cost savings and lower merger-related expense.





Credit Quality

•   Net charge-offs were 0.25% of average loans and leases (annualized) compared to 0.30% in the prior quarter. Charge-off activity remains centered in the FinPac portfolio.


•   Provision expense of $37 million relates to portfolio mix changes and credit migration trends.


•   Non-performing assets to total assets was 0.20% compared to 0.15% at June 30, 2023.





Capital

•   Estimated total risk-based capital ratio of 11.5% and estimated common equity tier 1 risk-based capital ratio of 9.4%.


•   Declared a quarterly cash dividend of $0.36 per common share on August 14, 2023, which was paid September 11, 2023.





Notable items

•   Sold $159 million in non-relationship jumbo residential mortgage loans that were marked to fair value at merger close.


•   Completed the sale of approximately one-third of the MSR portfolio.


•   Incurred $19 million in merger-related expense.


3Q23 KEY FINANCIAL DATA







PERFORMANCE METRICS

3Q23


2Q23


3Q22

Return on average assets

1.02 %


1.00 %


1.09 %

Return on average common
equity

11.07 %


10.84 %


12.99 %

Return on average tangible
common equity 1

16.93 %


16.63 %


13.02 %

Operating return on average
assets 1

1.23 %


1.27 %


1.33 %

Operating return on average
common equity 1

13.40 %


13.77 %


15.86 %

Operating return on average
tangible common equity 1

20.48 %


21.13 %


15.90 %

Net interest margin

3.91 %


3.93 %


3.88 %

Efficiency ratio

57.82 %


62.60 %


56.07 %







INCOME STATEMENT

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

3Q23


2Q23


3Q22

Net interest income

$480,875


$483,975


$287,604

Provision for credit losses

$36,737


$16,014


$27,572

Non-interest income

$43,981


$39,678


$29,445

Non-interest expense

$304,147


$328,559


$177,964

Pre-provision net revenue 1

$220,709


$195,094


$139,085

Operating pre-provision net
revenue1

$258,687


$243,114


$163,793

Earnings per common share -
diluted 2

$0.65


$0.64


$0.65

Operating earnings per common
share - diluted 1,2

$0.79


$0.81


$0.79

Dividends paid per share 2

$0.36


$0.36


$0.35







BALANCE SHEET

3Q23


2Q23


3Q22

Total assets

       $52.0B


       $53.6B


       $31.5B

Loans and leases

       $37.2B


       $37.0B


       $25.5B

Total deposits

       $41.6B


       $40.8B


       $26.8B

Book value per common share 2

$22.21


$23.16


$18.69

Tangible book value per share1,2

$14.22


$15.02


$18.65

____________________

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.

Organizational Update
Columbia Banking System, Inc. ("Columbia", "we", or "our") has completed substantially all integration priorities, driving the realization of $140 million in annualized net merger-related cost-savings as of September 30, 2023, outpacing the $135 million target communicated when the combination was announced. Further, Umpqua Bank, the primary subsidiary of Columbia, continued to expand its presence in Utah with the opening of its first branch in the state during 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, second, and third quarters of 2023 and the nine months ended September 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 $481 million for the third quarter of 2023, down $3 million from the prior quarter. The slight decline reflects higher interest income given expanded earning asset yields that were more than offset by higher funding costs.

Columbia's net interest margin was 3.91% for the third quarter of 2023, down 2 basis points from 3.93% for the second quarter of 2023. The second full quarter as a combined organization, higher customer balances, and consistent purchase accounting trends contributed to net interest margin stabilization between quarters. The cost of interest-bearing deposits increased 37 basis points on a linked-quarter basis to 2.01% for the third quarter of 2023, which compares to 2.18% for the month of September and 2.27% at September 30, 2023. Deposit costs were impacted by the decision to replace a portion of maturing FHLB advances with brokered deposits during the third quarter, which increased our cost of deposits but was fairly neutral to our cost of interest-bearing liabilities. Columbia's cost of interest-bearing liabilities increased 27 basis points on a linked-quarter basis to 2.72% for the third quarter of 2023, which compares to 2.77% for the month of September and 2.78% at September 30, 2023. Please refer to the Q3 2023 Earnings Presentation for additional net interest margin change details and interest rate sensitivity information as well as to our non-GAAP disclosures in this press release for the impact of purchase accounting accretion and amortization on individual line items.

Non-interest Income
Non-interest income was $44 million for the third quarter of 2023, up $4 million from the prior quarter. Higher customer-related fee income, loan gain-on-sale income from select portfolio sales, and a smaller loss related to fair value adjustments and mortgage servicing rights ("MSR") hedging activity drove the increase. A net fair value loss of $15 million in the third quarter compares to a net fair value loss of $16 million in the second quarter, as detailed in our non-GAAP disclosures. As previously communicated, Columbia entered an agreement to sell approximately one-third of its MSR portfolio that relates to a non-relationship component of the serviced loan portfolio. The transaction closed in late September without any income statement impact. 

Non-interest Expense
Non-interest expense was $304 million for the third quarter of 2023, down $24 million from the prior quarter level. The decrease reflects the realization of cost savings as well as an $11 million decline in merger-related expense, which were $19 million in the third quarter. Please refer to the Q3 2023 Earnings Presentation for additional expense details, including an update on realized merger-related cost-savings through September 30, 2023.

Balance Sheet
Total consolidated assets were $52.0 billion as of September 30, 2023, compared to $53.6 billion as of June 30, 2023. Cash and cash equivalents was $2.4 billion as of September 30, 2023, a decrease of $1.0 billion relative to June 30, 2023. We reduced our cash position during the third quarter given stabilizing industry trends and ample sources of available liquidity. Excess cash was used to pay off maturing FHLB advances, which declined to $4.0 billion as of September 30, 2023, compared to $6.3 billion as of June 30, 2023. Including secured off-balance sheet lines of credit, total available liquidity was $19.1 billion as of September 30, 2023, representing 37% of total assets, 46% of total deposits, and 142% of uninsured deposits. Please refer to the Q3 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 $8.5 billion as of September 30, 2023, a decrease of $494 million relative to June 30, 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 Q3 2023 Earnings Presentation for additional details related to our securities portfolio.

Gross loans and leases were $37.2 billion as of September 30, 2023, an increase of $121 million relative to June 30, 2023, as organic growth during the quarter more than offset the sale of $159 million in non-relationship jumbo residential mortgage loans that were marked to fair value at merger close. "We continued to selectively prune the portfolio during the third quarter, bringing the transfer and sale of loans that were transactional in nature to approximately $650 million over the past two quarters," commented Tory Nixon, President of Umpqua Bank. "Higher outstanding commercial line balances and other relationship-driven expansion contributed to 3% annualized loan growth in the third quarter when loan sales are excluded." Please refer to the Q3 2023 Earnings Presentation for additional details related to our loan portfolio, which include underwriting characteristics, the composition of our commercial portfolios, and disclosure related to our office portfolio.

Total deposits were $41.6 billion as of September 30, 2023, an increase of $789 million relative to June 30, 2023. "Customer deposit balances stabilized during the third quarter, increasing slightly between September and June," stated Mr. Nixon. "While market liquidity tightening, the impact of inflation on customer spending, and businesses' use of cash continue to impact our deposit flows, our teams' focus on balancing deposit generation alongside other growth resulted in net deposit increases throughout many business lines." Please refer to the Q3 2023 Earnings Presentation for additional details related to deposit characteristics and flows.

Credit Quality
The allowance for credit losses was $438 million, or 1.18% of loans and leases, as of September 30, 2023, compared to $424 million, or 1.15% of loans and leases, as of June 30, 2023. The provision for credit losses was $37 million for the third quarter of 2023 and reflects portfolio mix changes and credit migration trends. Please refer to the Q3 2023 Earnings Presentation for additional details related to the allowance for credit losses and other credit trends.

Net charge-offs were 0.25% of average loans and leases (annualized) for the third quarter of 2023, compared to 0.30% for the second quarter of 2023. Net charge-off activity continued to be centered in the FinPac portfolio, which experienced a decline in charge-offs. Bank charge-off activity remained low at 0.01% of average bank loans. As of September 30, 2023, non-performing assets were $106 million, or 0.20% of total assets, compared to $80 million, or 0.15% as of June 30, 2023.

Capital
As of September 30, 2023, Columbia's book value per common share decreased to $22.21, compared to $23.16 at June 30, 2023. The linked-quarter change in book value primarily reflects a change in accumulated other comprehensive (loss) income ("AOCI") to $(680) million at September 30, 2023, compared to $(419) million at the prior quarter-end. The change in AOCI is due primarily to an increase in the tax-effected net unrealized loss on available for sale securities to $650 million as of September 30, 2023, compared to $403 million as of June 30, 2023. Tangible book value per common share[3] decreased to $14.22, compared to $15.02 at June 30, 2023.

Columbia's estimated total risk-based capital ratio was 11.5% and its estimated common equity tier 1 risk-based capital ratio was 9.4% as of September 30, 2023, compared to 11.3% and 9.2%, respectively, at June 30, 2023. Columbia remains above current "well-capitalized" regulatory minimums. "We continued to build capital during the quarter through organic earnings generation and the realization of loan and investment securities discount accretion," stated Ron Farnsworth, Chief Financial Officer of Columbia. "We expect our capital position to continue to build over time, supporting our growing franchise and increasing flexibility for capital return." The regulatory capital ratios as of September 30, 2023 are estimates, pending completion and filing of Columbia's regulatory reports. 

Earnings Presentation and Conference Call Information
Columbia's Q3 2023 Earnings Presentation provides additional disclosure. A copy will be available on our investor relations page: www.columbiabankingsystem.com.

Columbia will host its third quarter 2023 earnings conference call on October 18, 2023, at 2:00 p.m. PT (5:00 p.m. ET). During the call, Columbia's management will provide an update on recent activities and discuss its third 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/BIcd18f9ce2ec34fdf915aa619af3a3d01
Join the audiocast: https://edge.media-server.com/mmc/p/ih23hqkg/
Access the replay through Columbia's investor relations page: www.columbiabankingsystem.com 

About Columbia Banking System, Inc.
Columbia (Nasdaq: COLB) is headquartered in Tacoma, Washington and is the parent company of Umpqua Bank, an award-winning western U.S. regional bank based in Lake Oswego, Oregon. In March of 2023, Columbia and Umpqua combined two of the Pacific Northwest's premier financial institutions under the Umpqua Bank brand to create one of the largest banks headquartered in the West and a top-30 U.S. bank. With over $50 billion of assets, Umpqua Bank combines the resources, sophistication and expertise of a national bank with a commitment to deliver personalized service at scale. The bank operates in Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah, and Washington and supports consumers and businesses through a full suite of services, including retail and commercial banking; Small Business Administration lending; institutional and corporate banking; and equipment leasing. Umpqua Bank customers also have access to comprehensive investment and wealth management expertise as well as healthcare and private banking through Columbia Wealth Management and Columbia Trust Company, a subsidiary of Columbia. Learn more at www.columbiabankingsystem.com.

Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to various risk factors, including those set forth from time to time in our filings with the Securities and Exchange Commission (the "SEC"). You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "target," "projects," "outlook," "forecast," "will," "may," "could," "should," "can" and similar references to future periods. In this press release we make forward-looking statements about strategic and growth initiatives and the result of such activity. Risks that could cause results to differ from forward-looking statements we make include, without limitation: current and future economic and market conditions, including the effects of declines in housing and commercial real estate prices, high unemployment rates, continued inflation and any recession or slowdown in economic growth particularly in the western United States; economic forecast variables that are either materially worse or better than end of quarter projections and deterioration in the economy that could result in increased loan and lease losses, especially those risks associated with concentrations in real estate related loans; our ability to effectively manage problem credits; the impact of bank failures or adverse developments at or news developments concerning other banks on general investor sentiment regarding the liquidity and stability of banks; changes in interest rates that could significantly reduce net interest income and negatively affect asset yields and valuations and funding sources; changes in the scope and cost of FDIC insurance and other coverage; our ability to successfully implement efficiency and operational excellence initiatives; our ability to successfully develop and market new products and technology; changes in laws or regulations; any failure to realize the anticipated benefits of the 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.

____________________

3

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

TABLE INDEX


Page

Consolidated Statements of Operations

7

Consolidated Balance Sheets

8

Financial Highlights

10

Loan & Lease Portfolio Balances and Mix

11

Deposit Portfolio Balances and Mix

13

Credit Quality - Non-performing Assets

14

Credit Quality - Allowance for Credit Losses

15

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

17

Residential Mortgage Banking Activity

19

GAAP to Non-GAAP Reconciliation

21

Columbia Banking System, Inc.

Consolidated Statements of Operations

(Unaudited)


Quarter Ended


% Change

($ in thousands, except per share data)

Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022


Seq.
Quarter


Year
over
Year

Interest income:














Loans and leases

$      569,670


$      552,679


$      413,525


$      322,350


$      278,830


3 %


104 %

Interest and dividends on investments:














Taxable

80,066


79,036


39,729


18,108


18,175


1 %


341 %

Exempt from federal income tax

6,929


6,817


3,397


1,288


1,322


2 %


424 %

Dividends

4,941


2,581


719


182


86


91 %


nm

Temporary investments and interest bearing deposits

34,407


34,616


18,581


10,319


5,115


(1) %


nm

Total interest income

696,013


675,729


475,951


352,247


303,528


3 %


129 %

Interest expense:














Deposits

126,974


100,408


63,613


31,174


9,090


26 %


nm

Securities sold under agreement to repurchase and
federal funds purchased

1,220


1,071


406


323


545


14 %


124 %

Borrowings

77,080


81,004


28,764


8,023


798


(5) %


nm

Junior and other subordinated debentures

9,864


9,271


8,470


7,248


5,491


6 %


80 %

Total interest expense

215,138


191,754


101,253


46,768


15,924


12 %


nm

Net interest income

480,875


483,975


374,698


305,479


287,604


(1) %


67 %

Provision for credit losses

36,737


16,014


105,539


32,948


27,572


129 %


33 %

Non-interest income:














Service charges on deposits

17,410


16,454


14,312


12,139


12,632


6 %


38 %

Card-based fees

15,674


13,435


11,561


9,017


9,115


17 %


72 %

Financial services and trust revenue

4,651


4,512


1,297


25


27


3 %


nm

Residential mortgage banking revenue (loss), net

7,103


(2,342)


7,816


(1,812)


17,341


nm


(59) %

Gain on sale of debt securities, net

4


—


—


—


—


nm


nm

(Loss) gain on equity securities, net

(2,055)


(697)


2,416


284


(2,647)


195 %


(22) %

Gain on loan and lease sales, net

1,871


442


940


1,531


1,525


323 %


23 %

BOLI income

4,440


4,063


2,790


2,033


2,023


9 %


119 %

Other (loss) income

(5,117)


3,811


13,603


11,662


(10,571)


(234) %


(52) %

Total non-interest income

43,981


39,678


54,735


34,879


29,445


11 %


49 %

Non-interest expense:














Salaries and employee benefits

159,041


163,398


136,092


107,982


109,164


(3) %


46 %

Occupancy and equipment, net

43,070


50,550


41,700


34,021


35,042


(15) %


23 %

Intangible amortization

29,879


35,553


12,660


1,019


1,025


(16) %


nm

FDIC assessments

11,200


11,579


6,113


3,487


3,007


(3) %


272 %

Merger related expense

18,938


29,649


115,898


11,637


769


(36) %


nm

Other expenses

42,019


37,830


30,355


36,836


28,957


11 %


45 %

Total non-interest expense

304,147


328,559


342,818


194,982


177,964


(7) %


71 %

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

183,972


179,080


(18,924)


112,428


111,513


3 %


65 %

Provision (benefit) for income taxes

48,127


45,703


(4,886)


29,464


27,473


5 %


75 %

Net income (loss)

$      135,845


$      133,377


$      (14,038)


$        82,964


$        84,040


2 %


62 %















Weighted average basic shares outstanding (1)

208,070


207,977


156,383


129,321


129,319


0 %


61 %

Weighted average diluted shares outstanding (1)

208,645


208,545


156,383


129,801


129,733


0 %


61 %

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

$           0.65


$           0.64


$          (0.09)


$           0.64


$           0.65


2 %


0 %

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

$           0.65


$           0.64


$          (0.09)


$           0.64


$           0.65


2 %


0 %















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)



Nine Months Ended


% Change

($ in thousands, except per share data)


Sep 30, 2023


Sep 30, 2022


Year over
Year

Interest income:







Loans and leases


$          1,535,874


$             727,908


111 %

Interest and dividends on investments:







Taxable


198,831


54,156


267 %

Exempt from federal income tax


17,143


4,063


322 %

Dividends


8,241


256


nm

Temporary investments and interest bearing deposits


87,604


9,387


nm

Total interest income


1,847,693


795,770


132 %

Interest expense:







Deposits


290,995


17,021


nm

Securities sold under agreement to repurchase and federal funds purchased


2,697


674


300 %

Borrowings


186,848


897


nm

Junior and other subordinated debentures


27,605


12,641


118 %

Total interest expense


508,145


31,233


nm

Net interest income


1,339,548


764,537


75 %

Provision for credit losses


158,290


51,068


210 %

Non-interest income:







Service charges on deposits


48,176


36,226


33 %

Card-based fees


40,670


28,353


43 %

Brokerage revenue


10,460


65


nm

Residential mortgage banking revenue, net


12,577


108,671


(88) %

Gain on sale of debt securities, net


4


2


100 %

Loss on equity securities, net


(336)


(7,383)


(95) %

Gain on loan and lease sales, net


3,253


5,165


(37) %

BOLI income


11,293


6,220


82 %

Other income (loss)


12,297


(12,670)


nm

Total non-interest income


138,394


164,649


(16) %

Non-interest expense:







Salaries and employee benefits


458,531


333,244


38 %

Occupancy and equipment, net


135,320


104,430


30 %

Intangible amortization


78,092


3,076


nm

FDIC assessments


28,892


10,477


176 %

Merger related expense


164,485


5,719


nm

Other expenses


110,204


83,022


33 %

Total non-interest expense


975,524


539,968


81 %

Income before provision for income taxes


344,128


338,150


2 %

Provision for income taxes


88,944


84,362


5 %

Net income


$             255,184


$             253,788


1 %








Weighted average basic shares outstanding (1)


190,997


129,262


48 %

Weighted average diluted shares outstanding (1)


191,546


129,702


48 %

Earnings per common share – basic (1)


$                  1.34


$                  1.96


(32) %

Earnings per common share – diluted (1)


$                  1.33


$                  1.96


(32) %








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)

Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022


Seq.
Quarter


Year
over
Year

Assets:














Cash and due from banks

$       492,474


$       538,653


$       555,919


$       327,313


$       321,447


(9) %


53 %

Interest bearing cash and temporary
investments

1,911,221


2,868,563


3,079,266


967,330


1,232,412


(33) %


55 %

Investment securities:














Equity and other, at fair value

73,638


76,361


76,532


72,959


72,277


(4) %


2 %

Available for sale, at fair value

8,503,986


8,998,428


9,249,600


3,196,166


3,136,391


(5) %


171 %

Held to maturity, at amortized cost

2,344


2,388


2,432


2,476


2,547


(2) %


(8) %

Loans held for sale

60,313


183,633


49,338


71,647


148,275


(67) %


(59) %

Loans and leases

37,170,598


37,049,299


37,091,280


26,155,981


25,507,951


0 %


46 %

Allowance for credit losses on loans and
leases

(416,560)


(404,603)


(417,464)


(301,135)


(283,065)


3 %


47 %

Net loans and leases

36,754,038


36,644,696


36,673,816


25,854,846


25,224,886


0 %


46 %

Restricted equity securities

168,524


258,524


246,525


47,144


40,993


(35) %


311 %

Premises and equipment, net

337,855


368,698


375,190


176,016


165,305


(8) %


104 %

Operating lease right-of-use assets

114,220


119,255


127,296


78,598


81,729


(4) %


40 %

Goodwill

1,029,234


1,029,234


1,030,142


—


—


0 %


nm

Other intangible assets, net

636,883


666,762


702,315


4,745


5,764


(4) %


nm

Residential mortgage servicing rights, at
fair value

117,640


172,929


178,800


185,017


196,177


(32) %


(40) %

Bank owned life insurance

648,232


643,727


641,922


331,759


329,699


1 %


97 %

Deferred tax asset, net

469,841


362,880


351,229


132,823


128,120


29 %


267 %

Other assets

669,150


657,365


653,904


399,800


385,938


2 %


73 %

Total assets

$  51,989,593


$  53,592,096


$  53,994,226


$  31,848,639


$  31,471,960


(3) %


65 %

Liabilities:














 Deposits














Non-interest bearing

$  15,532,948


$  16,019,408


$  17,215,781


$  10,288,849


$  11,246,358


(3) %


38 %

Interest bearing

26,091,420


24,815,509


24,370,566


16,776,763


15,570,749


5 %


68 %

  Total deposits

41,624,368


40,834,917


41,586,347


27,065,612


26,817,107


2 %


55 %

Securities sold under agreements to
repurchase

258,383


294,914


271,047


308,769


383,569


(12) %


(33) %

Borrowings

3,985,000


6,250,000


5,950,000


906,175


756,214


(36) %


427 %

Junior subordinated debentures, at fair value

331,545


312,872


297,721


323,639


325,744


6 %


2 %

Junior and other subordinated debentures, at
amortized cost

107,952


108,009


108,066


87,813


87,870


0 %


23 %

Operating lease liabilities

129,845


132,099


140,648


91,694


95,512


(2) %


36 %

Other liabilities

920,338


831,097


755,674


585,111


588,430


11 %


56 %

Total liabilities

47,357,431


48,763,908


49,109,503


29,368,813


29,054,446


(3) %


63 %

Shareholders' equity:














Common stock

5,798,167


5,792,792


5,788,553


3,450,493


3,448,007


0 %


68 %

Accumulated deficit

(485,576)


(545,842)


(603,696)


(543,803)


(580,933)


(11) %


(16) %

Accumulated other comprehensive loss

(680,429)


(418,762)


(300,134)


(426,864)


(449,560)


62 %


51 %

Total shareholders' equity

4,632,162


4,828,188


4,884,723


2,479,826


2,417,514


(4) %


92 %

Total liabilities and shareholders' equity

$  51,989,593


$  53,592,096


$  53,994,226


$  31,848,639


$  31,471,960


(3) %


65 %















Common shares outstanding at period end (1)

208,575


208,514


208,429


129,321


129,320


0 %


61 %

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.

Financial Highlights

(Unaudited)



Quarter Ended


% Change



Sep 30,
2023


Jun 30,
2023


Mar 31,
2023


Dec 31,
2022


Sep 30,
2022


Seq.
Quarter


Year over
Year

Per Common Share Data: (5)















Dividends (5)


$         0.36


$         0.36


$         0.35


$         0.35


$         0.35


0 %


3 %

Book value (5)


$       22.21


$       23.16


$       23.44


$       19.18


$       18.69


(4) %


19 %

Tangible book value (1),(5)


$       14.22


$       15.02


$       15.12


$       19.14


$       18.65


(5) %


(24) %
















Performance Ratios:















Efficiency ratio (2)


57.82 %


62.60 %


79.71 %


57.24 %


56.07 %


(4.78)


1.75

Return on average assets ("ROAA")


1.02 %


1.00 %


(0.14) %


1.04 %


1.09 %


0.02


(0.07)

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


1.65 %


1.46 %


0.89 %


1.82 %


1.80 %


0.19


(0.15)

Return on average common equity


11.07 %


10.84 %


(1.70) %


13.50 %


12.99 %


0.23


(1.92)

Return on average tangible common equity (1)


16.93 %


16.63 %


(2.09) %


13.53 %


13.02 %


0.30


3.91
















Performance Ratios - Operating: (1)















Operating efficiency ratio (1),(2)


51.97 %


54.85 %


53.46 %


52.01 %


51.72 %


(2.88)


0.25

Operating return on average assets (1)


1.23 %


1.27 %


0.74 %


1.24 %


1.33 %


(0.04)


(0.10)

Operating PPNR return on average assets (1)


1.94 %


1.82 %


2.01 %


2.10 %


2.12 %


0.12


(0.18)

Operating return on average common equity (1)


13.40 %


13.77 %


8.66 %


16.14 %


15.86 %


(0.37)


(2.46)

Operating return on average tangible common equity (1)


20.48 %


21.13 %


10.64 %


16.18 %


15.90 %


(0.65)


4.58
















Average Balance Sheet Yields, Rates, & Ratios:















Yield on loans and leases


6.08 %


5.95 %


5.55 %


4.92 %


4.41 %


0.13


1.67

Yield on earning assets (2)


5.65 %


5.48 %


5.19 %


4.62 %


4.10 %


0.17


1.55

Cost of interest bearing deposits


2.01 %


1.64 %


1.32 %


0.77 %


0.23 %


0.37


1.78

Cost of interest bearing liabilities


2.72 %


2.45 %


1.82 %


1.05 %


0.39 %


0.27


2.33

Cost of total deposits


1.23 %


0.99 %


0.80 %


0.46 %


0.14 %


0.24


1.09

Cost of total funding (3)


1.81 %


1.61 %


1.16 %


0.65 %


0.23 %


0.20


1.58

Net interest margin (2)


3.91 %


3.93 %


4.08 %


4.01 %


3.88 %


(0.02)


0.03

Average interest bearing cash / Average interest earning assets


5.17 %


5.47 %


4.33 %


3.62 %


3.04 %


(0.30)


2.13

Average loans and leases / Average interest earning assets


75.64 %


75.18 %


80.96 %


85.32 %


84.54 %


0.46


(8.90)

Average loans and leases / Average total deposits


90.63 %


90.98 %


93.01 %


95.85 %


93.55 %


(0.35)


(2.92)

Average non-interest bearing deposits / Average total deposits


38.55 %


40.05 %


39.55 %


40.30 %


42.29 %


(1.50)


(3.74)

Average total deposits / Average total funding (3)


86.66 %


85.59 %


91.36 %


94.52 %


96.34 %


1.07


(9.68)
















Select Credit & Capital Ratios:















Non-performing loans and leases to total loans and leases


0.28 %


0.22 %


0.20 %


0.22 %


0.20 %


0.06


0.08

Non-performing assets to total assets


0.20 %


0.15 %


0.14 %


0.18 %


0.16 %


0.05


0.04

Allowance for credit losses to loans and leases


1.18 %


1.15 %


1.18 %


1.21 %


1.16 %


0.03


0.02

Total risk-based capital ratio (4)


11.5 %


11.3 %


10.9 %


13.7 %


13.2 %


0.20


(1.70)

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


9.4 %


9.2 %


8.9 %


11.0 %


10.7 %


0.20


(1.30)



(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)



Nine Months Ended


% Change



Sep 30, 2023


Sep 30, 2022


Year over Year

Per Common Share Data: (4)







Dividends (4)


$                      1.07


$                      1.05


1.90 %








Performance Ratios:







Efficiency ratio (2)


65.87 %


58.05 %


7.82

Return on average assets


0.70 %


1.11 %


(0.41)

PPNR return on average assets (1)


1.38 %


1.70 %


(0.32)

Return on average common equity


7.77 %


12.94 %


(5.17)

Return on average tangible common equity (1)


11.21 %


12.98 %


(1.77)








Performance Ratios - Operating: (1)







Operating efficiency ratio (1),(2)


53.43 %


57.03 %


(3.60)

Operating return on average assets (1)


1.11 %


1.14 %


(0.03)

Operating PPNR return on average assets (1)


1.91 %


1.74 %


0.17

Operating return on average common equity (1)


12.34 %


13.28 %


(0.94)

Operating return on average tangible common equity (1)


17.80 %


13.32 %


4.48








Average Balance Sheet Yields, Rates, & Ratios:







Yield on loans and leases


5.88 %


4.06 %


1.82

Yield on earning assets (2)


5.46 %


3.62 %


1.84

Cost of interest bearing deposits


1.68 %


0.15 %


1.53

Cost of interest bearing liabilities


2.38 %


0.26 %


2.12

Cost of total deposits


1.02 %


0.09 %


0.93

Cost of total funding (3)


1.56 %


0.15 %


1.41

Net interest margin (2)


3.96 %


3.48 %


0.48

Average interest bearing cash / Average interest earning assets


5.05 %


5.87 %


(0.82)

Average loans and leases / Average interest earning assets


76.91 %


80.80 %


(3.89)

Average loans and leases / Average total deposits


91.42 %


89.21 %


2.21

Average non-interest bearing deposits / Average total deposits


39.28 %


41.89 %


(2.61)

Average total deposits / Average total funding (3)


87.53 %


96.61 %


(9.08)



(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)


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 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

$    6,490,638


$    6,434,673


$    6,353,550


$    3,894,840


$    3,846,426


1 %


69 %

Owner occupied term, net

5,235,227


5,254,401


5,156,848


2,567,761


2,549,761


0 %


105 %

Multifamily, net

5,684,495


5,622,875


5,590,587


5,285,791


5,090,661


1 %


12 %

Construction & development, net

1,669,918


1,528,924


1,467,561


1,077,346


1,036,931


9 %


61 %

Residential development, net

354,922


388,641


440,667


200,838


205,935


(9) %


72 %

Commercial:














Term, net

5,437,915


5,449,787


5,906,774


3,029,547


3,003,424


0 %


81 %

Lines of credit & other, net

2,353,548


2,268,790


2,184,762


960,054


914,507


4 %


157 %

Leases & equipment finance, net

1,728,991


1,740,037


1,746,267


1,706,172


1,669,817


(1) %


4 %

Residential:














Mortgage, net

6,121,838


6,272,898


6,187,964


5,647,035


5,470,624


(2) %


12 %

Home equity loans & lines, net

1,899,948


1,898,958


1,870,002


1,631,965


1,565,094


0 %


21 %

   Consumer & other, net

193,158


189,315


186,298


154,632


154,771


2 %


25 %

Total loans and leases, net of deferred fees
and costs

$  37,170,598


$  37,049,299


$  37,091,280


$  26,155,981


$  25,507,951


0 %


46 %















Loans and leases mix:














Commercial real estate:














   Non-owner occupied term, net

17 %


17 %


16 %


15 %


15 %





   Owner occupied term, net

14 %


14 %


14 %


10 %


10 %





   Multifamily, net

15 %


15 %


15 %


20 %


20 %





Construction & development, net

4 %


4 %


4 %


4 %


4 %





Residential development, net

1 %


1 %


1 %


1 %


1 %





Commercial:














Term, net

15 %


15 %


16 %


12 %


12 %





Lines of credit & other, net

6 %


6 %


6 %


4 %


4 %





Leases & equipment finance, net

5 %


5 %


5 %


6 %


6 %





Residential:














Mortgage, net

17 %


17 %


17 %


21 %


21 %





Home equity loans & lines, net

5 %


5 %


5 %


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)


Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022


% Change

($ in thousands)

Amount


Amount


Amount


Amount


Amount


Seq. Quarter


Year over Year

Deposits:














Demand, non-interest bearing

$  15,532,948


$  16,019,408


$  17,215,781


$  10,288,849


$  11,246,358


(3) %


38 %

Demand, interest bearing

6,898,831


6,300,082


5,900,462


4,080,469


3,903,746


10 %


77 %

Money market

10,349,217


10,115,908


10,681,422


7,721,011


7,601,506


2 %


36 %

Savings

3,018,706


3,171,714


3,469,112


2,265,052


2,455,917


(5) %


23 %

Time

5,824,666


5,227,805


4,319,570


2,710,231


1,609,580


11 %


262 %

Total

$  41,624,368


$  40,834,917


$  41,586,347


$  27,065,612


$  26,817,107


2 %


55 %















Total core deposits (1)

$  37,597,830


$  37,639,368


$  39,155,298


$  25,616,010


$  26,292,548


0 %


43 %















Deposit mix:














Demand, non-interest bearing

37 %


39 %


41 %


38 %


42 %





Demand, interest bearing

17 %


15 %


14 %


15 %


15 %





Money market

25 %


25 %


26 %


29 %


28 %





Savings

7 %


8 %


9 %


8 %


9 %





Time

14 %


13 %


10 %


10 %


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)

Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022


Seq. Quarter


Year over Year

Non-performing assets:














Loans and leases on non-accrual status:















Commercial real estate, net

$     26,053


$     10,994


$     15,612


$       5,011


$       5,403


137 %


382 %


Commercial, net

44,341


39,316


42,301


25,691


18,652


13 %


138 %


Residential, net

—


—


—


—


—


nm


nm


Consumer & other, net

—


—


—


—


—


nm


nm


Total loans and leases on non-accrual status

70,394


50,310


57,913


30,702


24,055


40 %


193 %

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















Commercial real estate, net

71


184


1


1


1


(61) %


nm


Commercial, net

8,606


7,720


151


7,909


5,143


11 %


67 %


Residential, net (1)

25,180


21,370


17,423


19,894


21,411


18 %


18 %


Consumer & other, net

240


399


140


134


152


(40) %


58 %


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

34,097


29,673


17,715


27,938


26,707


15 %


28 %

Total non-performing loans and leases

104,491


79,983


75,628


58,640


50,762


31 %


106 %

Other real estate owned

1,170


278


409


203


—


321 %


nm

Total non-performing assets

$    105,661


$     80,261


$     76,037


$     58,843


$     50,762


32 %


108 %
















Loans and leases past due 31-89 days

$     82,918


$     73,376


$     78,641


$     64,893


$     53,538


13 %


55 %

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

0.22 %


0.20 %


0.21 %


0.25 %


0.21 %


0.02


0.01

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

0.28 %


0.22 %


0.20 %


0.22 %


0.20 %


0.06


0.08

Non-performing assets to total assets (1)

0.20 %


0.15 %


0.14 %


0.18 %


0.16 %


0.05


0.04

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 $700,000, $1.6 million, $5.4 million, $6.6 million and $1.0 million at September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022 and September 30, 2022, respectively.


Columbia Banking System, Inc.


Credit Quality – Allowance for Credit Losses


(Unaudited)



Quarter Ended


% Change

($ in thousands)

Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022


Seq. Quarter


Year over Year

Allowance for credit losses on loans and leases (ACLLL)














Balance, beginning of period

$    404,603


$    417,464


$    301,135


$    283,065


$    261,111


(3) %


55 %

Initial ACL recorded for PCD loans acquired during the
period

—


—


26,492


—


—


nm


nm

Provision for credit losses on loans and leases (1)

35,082


15,216


106,498


30,580


28,542


131 %


23 %

Charge-offs















Commercial real estate, net

—


(174)


—


(128)


—


nm


nm


Commercial, net

(26,629)


(32,036)


(19,248)


(14,721)


(9,459)


(17) %


182 %


Residential, net

(206)


(4)


(248)


(53)


(4)


nm


nm


Consumer & other, net

(1,884)


(1,264)


(773)


(906)


(929)


49 %


103 %


Total charge-offs

(28,719)


(33,478)


(20,269)


(15,808)


(10,392)


(14) %


176 %

Recoveries















Commercial real estate, net

31


209


58


163


123


(85) %


(75) %


Commercial, net

4,901


4,511


3,058


2,708


2,842


9 %


72 %


Residential, net

156


63


123


24


249


148 %


(37) %


Consumer & other, net

506


618


369


403


590


(18) %


(14) %


Total recoveries

5,594


5,401


3,608


3,298


3,804


4 %


47 %

Net (charge-offs) recoveries















Commercial real estate, net

31


35


58


35


123


(11) %


(75) %


Commercial, net

(21,728)


(27,525)


(16,190)


(12,013)


(6,617)


(21) %


228 %


Residential, net

(50)


59


(125)


(29)


245


(185) %


(120) %


Consumer & other, net

(1,378)


(646)


(404)


(503)


(339)


113 %


306 %


Total net charge-offs

(23,125)


(28,077)


(16,661)


(12,510)


(6,588)


(18) %


251 %

Balance, end of period

$    416,560


$    404,603


$    417,464


$    301,135


$    283,065


3 %


47 %

Reserve for unfunded commitments














Balance, beginning of period

$     19,827


$     19,029


$     14,221


$     11,853


$     12,823


4 %


55 %

Initial ACL recorded for unfunded commitments
acquired during the period

—


—


5,767


—


—


nm


nm

Provision (recapture) for credit losses on unfunded
commitments

1,655


798


(959)


2,368


(970)


107 %


nm

Balance, end of period

21,482


19,827


19,029


14,221


11,853


8 %


81 %

Total Allowance for credit losses (ACL)

$    438,042


$    424,430


$    436,493


$    315,356


$    294,918


3 %


49 %















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

0.25 %


0.30 %


0.23 %


0.19 %


0.11 %


(0.05)


0.14

Recoveries to gross charge-offs

19.48 %


16.13 %


17.80 %


20.86 %


36.61 %


3.35


(17.13)

ACLLL to loans and leases

1.12 %


1.09 %


1.13 %


1.15 %


1.11 %


0.03


0.01

ACL to loans and leases

1.18 %


1.15 %


1.18 %


1.21 %


1.16 %


0.03


0.02

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)



Nine Months Ended


% Change

($ in thousands)


Sep 30, 2023


Sep 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)


156,796


53,025


196 %

Charge-offs








Commercial real estate, net


(174)


(8)


nm


Commercial, net


(77,913)


(26,352)


196 %


Residential, net


(458)


(171)


168 %


Consumer & other, net


(3,921)


(2,650)


48 %


Total charge-offs


(82,466)


(29,181)


183 %

Recoveries








Commercial real estate, net


298


221


35 %


Commercial, net


12,470


8,321


50 %


Residential, net


342


638


(46) %


Consumer & other, net


1,493


1,629


(8) %


Total recoveries


14,603


10,809


35 %

Net (charge-offs) recoveries








Commercial real estate, net


124


213


(42) %


Commercial, net


(65,443)


(18,031)


263 %


Residential, net


(116)


467


(125) %


Consumer & other, net


(2,428)


(1,021)


138 %


Total net charge-offs


(67,863)


(18,372)


269 %

Balance, end of period


$          416,560


$          283,065


47 %

Reserve for unfunded commitments







Balance, beginning of period


$           14,221


$           12,767


11 %

Initial ACL recorded for unfunded commitments acquired during the period


5,767


—


nm

Provision (recapture)  for credit losses on unfunded commitments


1,494


(914)


nm

Balance, end of period


21,482


11,853


81 %

Total Allowance for credit losses (ACL)


$          438,042


$          294,918


49 %








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


0.26 %


0.10 %


0.16

Recoveries to gross charge-offs


17.71 %


37.04 %


(19.33)

nm = not meaningful









(1)

For the nine months ended September 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


September 30, 2023


June 30, 2023


September 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

$      199,855


$     1,741


3.49 %


$        46,794


$       682


5.83 %


$      173,397


$     2,205


5.09 %

Loans and leases (1)

37,050,518


567,929


6.08 %


37,169,315


551,997


5.95 %


24,886,203


276,625


4.41 %

Taxable securities

8,356,165


85,007


4.07 %


8,656,147


81,617


3.77 %


3,271,185


18,261


2.23 %

Non-taxable securities (2)

844,417


8,085


3.83 %


865,278


8,010


3.70 %


212,847


1,651


3.10 %

Temporary investments and
interest-bearing cash

2,530,150


34,407


5.40 %


2,704,984


34,616


5.13 %


893,471


5,115


2.27 %

Total interest-earning assets

48,981,105


$ 697,169


5.65 %


49,442,518


$ 676,922


5.48 %


29,437,103


$ 303,857


4.10 %

Goodwill and other intangible
assets

1,684,093






1,718,705






6,343





Other assets

2,346,163






2,379,351






1,224,731





Total assets

$  53,011,361






$  53,540,574






$  30,668,177





INTEREST-BEARING LIABILITIES:


















Interest-bearing demand
deposits

$   6,578,849


$   25,209


1.52 %


$   6,131,117


$   17,277


1.15 %


$   3,829,688


$     1,705


0.18 %

Money market deposits

10,249,028


50,039


1.94 %


10,362,495


41,703


1.60 %


7,550,791


5,817


0.31 %

Savings deposits

3,109,779


1,253


0.16 %


3,297,138


877


0.11 %


2,468,187


250


0.04 %

Time deposits

5,184,089


50,473


3.86 %


4,703,967


40,551


3.46 %


1,501,724


1,318


0.35 %

Total interest-bearing deposits

25,121,745


126,974


2.01 %


24,494,717


100,408


1.64 %


15,350,390


9,090


0.23 %

Repurchase agreements and
federal funds purchased

268,444


1,220


1.80 %


284,347


1,071


1.51 %


509,559


545


0.42 %

Borrowings

5,603,207


77,080


5.46 %


6,187,363


81,004


5.25 %


90,475


798


3.50 %

Junior and other subordinated
debentures

420,582


9,864


9.30 %


405,989


9,271


9.16 %


409,151


5,491


5.33 %

Total interest-bearing liabilities

31,413,978


$ 215,138


2.72 %


31,372,416


$ 191,754


2.45 %


16,359,575


$   15,924


0.39 %

Non-interest-bearing deposits

15,759,720






16,361,541






11,250,764





Other liabilities

970,688






871,378






490,572





Total liabilities

48,144,386






48,605,335






28,100,911





Common equity

4,866,975






4,935,239






2,567,266





Total liabilities and shareholders'
equity

$  53,011,361






$  53,540,574






$  30,668,177





NET INTEREST INCOME (2)



$ 482,031






$ 485,168






$ 287,933



NET INTEREST SPREAD





2.93 %






3.03 %






3.71 %

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





3.91 %






3.93 %






3.88 %



(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 September 30, 2023, as compared to $1.2 million for the three months ended June 30, 2023 and $329,000 for the three months ended September 30, 2022. 

Columbia Banking System, Inc.

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

(Unaudited)


Nine Months Ended


September 30, 2023


September 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

$         100,753


$         3,222


4.26 %


$         240,928


$         7,209


3.99 %

Loans and leases (1)

34,765,319


1,532,652


5.88 %


23,676,201


720,699


4.06 %

Taxable securities

7,336,862


207,072


3.76 %


3,445,386


54,412


2.11 %

Non-taxable securities (2)

717,064


20,163


3.75 %


222,375


5,098


3.06 %

Temporary investments and interest-bearing cash

2,283,461


87,604


5.13 %


1,718,832


9,387


0.73 %

Total interest-earning assets

45,203,459


$   1,850,713


5.46 %


29,303,722


$     796,805


3.62 %

Goodwill and other intangible assets

1,345,833






7,369





Other assets

2,159,775






1,229,936





Total assets

$     48,709,067






$     30,541,027





INTEREST-BEARING LIABILITIES:












Interest-bearing demand deposits

$      5,829,737


$       52,301


1.20 %


$      3,846,202


$         2,813


0.10 %

Money market deposits

9,857,001


123,980


1.68 %


7,519,200


8,942


0.16 %

Savings deposits

3,032,653


2,686


0.12 %


2,433,651


654


0.04 %

Time deposits

4,371,643


112,028


3.43 %


1,623,742


4,612


0.38 %

Total interest-bearing deposits

23,091,034


290,995


1.68 %


15,422,795


17,021


0.15 %

Repurchase agreements and federal funds purchased

277,896


2,697


1.30 %


502,998


674


0.18 %

Borrowings

4,726,335


186,848


5.29 %


34,662


897


3.46 %

Junior and other subordinated debentures

414,855


27,605


8.90 %


394,803


12,641


4.28 %

Total interest-bearing liabilities

28,510,120


$     508,145


2.38 %


16,355,258


$       31,233


0.26 %

Non-interest-bearing deposits

14,937,028






11,115,618





Other liabilities

872,370






448,426





Total liabilities

44,319,518






27,919,302





Common equity

4,389,549






2,621,725





Total liabilities and shareholders' equity

$     48,709,067






$     30,541,027





NET INTEREST INCOME (2)



$   1,342,568






$     765,572



NET INTEREST SPREAD





3.08 %






3.36 %

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





3.96 %






3.48 %















(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 $3.0 million for the nine months ended September 30, 2023, as compared to $1.0 million for the same period in 2022. 

Columbia Banking System, Inc.

Residential Mortgage Banking Activity

(Unaudited)


Quarter Ended


% Change

($ in thousands)

Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022


Seq. Quarter


Year over Year

Residential mortgage banking revenue:














Origination and sale

$       2,442


$       3,166


$       3,587


$       4,252


$     10,515


(23) %


(77) %

Servicing

8,887


9,167


9,397


9,184


9,529


(3) %


(7) %

Change in fair value of MSR asset:














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

(4,801)


(4,797)


(4,881)


(4,986)


(4,978)


0 %


(4) %

Changes due to valuation inputs or assumptions

5,308


(2,242)


(2,937)


(9,914)


16,403


nm


(68) %

MSR hedge (loss) gain

(4,733)


(7,636)


2,650


(348)


(14,128)


(38) %


(66) %

Total

$       7,103


$      (2,342)


$       7,816


$      (1,812)


$     17,341


nm


(59) %















Closed loan volume for-sale

$    103,333


$    119,476


$    131,726


$    216,833


$    396,979


(14) %


(74) %

Gain on sale margin

2.36 %


2.65 %


2.72 %


1.96 %


2.65 %


(0.29)


(0.29)















Residential mortgage servicing rights:














Balance, beginning of period

$    172,929


$    178,800


$    185,017


$    196,177


$    179,558


(3) %


(4) %

Additions for new MSR capitalized

1,658


1,168


1,601


3,740


5,194


42 %


(68) %

Sale of MSR assets

(57,454)


—


—


—


—


nm


nm

Change in fair value of MSR asset:














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

(4,801)


(4,797)


(4,881)


(4,986)


(4,978)


0 %


(4) %

Changes due to valuation inputs or assumptions

5,308


(2,242)


(2,937)


(9,914)


16,403


nm


(68) %

Balance, end of period

$    117,640


$    172,929


$    178,800


$    185,017


$    196,177


(32) %


(40) %















Residential mortgage loans serviced for others

$ 8,240,950


$  12,726,615


$  12,914,046


$  13,020,189


$  12,997,911


(35) %


(37) %

MSR as % of serviced portfolio

1.43 %


1.36 %


1.38 %


1.42 %


1.51 %


0.07


(0.08)

nm = not meaningful














Columbia Banking System, Inc.

Residential Mortgage Banking Activity

(Unaudited)


Nine Months Ended


% Change

($ in thousands)

Sep 30, 2023


Sep 30, 2022


Year over Year

Residential mortgage banking revenue:






Origination and sale

$            9,195


$          42,460


(78) %

Servicing

27,451


28,174


(3) %

Change in fair value of MSR asset:






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

(14,479)


(15,286)


(5) %

Changes due to valuation inputs or assumptions

129


67,451


(100) %

MSR hedge loss

(9,719)


(14,128)


(31) %

Total

$          12,577


$        108,671


(88) %







Closed loan volume for-sale

$        354,535


$      1,622,633


(78) %

Gain on sale margin

2.59 %


2.62 %


(0.03)







Residential mortgage servicing rights:






Balance, beginning of period

$        185,017


$        123,615


50 %

Additions for new MSR capitalized

4,427


20,397


(78) %

Sale of MSR assets

(57,454)


—


nm

Change in fair value of MSR asset:






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

(14,479)


(15,286)


(5) %

Changes due to valuation inputs or assumptions

129


67,451


(100) %

Balance, end of period

$        117,640


$        196,177


(40) %

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)



Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022


Seq. Quarter


Year over Year

Total shareholders' equity

a


$  4,632,162


$  4,828,188


$  4,884,723


$  2,479,826


$  2,417,514


(4) %


92 %

Less: Goodwill



1,029,234


1,029,234


1,030,142


—


—


— %


nm

Less: Other intangible assets, net



636,883


666,762


702,315


4,745


5,764


(4) %


nm

Tangible common shareholders' equity

b


$  2,966,045


$  3,132,192


$  3,152,266


$  2,475,081


$  2,411,750


(5) %


23 %

















Total assets

c


$   51,989,593


$   53,592,096


$   53,994,226


$   31,848,639


$   31,471,960


(3) %


65 %

Less: Goodwill



1,029,234


1,029,234


1,030,142


—


—


0 %


nm

Less: Other intangible assets, net



636,883


666,762


702,315


4,745


5,764


(4) %


nm

Tangible assets

d


$   50,323,476


$   51,896,100


$   52,261,769


$   31,843,894


$   31,466,196


(3) %


60 %

Common shares outstanding at period end (1)

e


208,575


208,514


208,429


129,321


129,320


0 %


61 %

















Total shareholders' equity to total assets ratio

a / c


8.91 %


9.01 %


9.05 %


7.79 %


7.68 %


(0.10)


1.23

Tangible common equity ratio

b / d


5.89 %


6.04 %


6.03 %


7.77 %


7.66 %


(0.15)


(1.77)

Book value per common share (1)

a / e


$           22.21


$           23.16


$           23.44


$           19.18


$           18.69


(4) %


19 %

Tangible book value per common share (1)

b / e


$           14.22


$           15.02


$           15.12


$           19.14


$           18.65


(5) %


(24) %

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)



Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022


Seq. Quarter


Year over Year

Non-Interest Income Adjustments
















Gain on sale of debt securities, net



$                     4


$                   —


$                     —


$                   —


$                   —


nm


nm

(Loss) gain on equity securities, net



(2,055)


(697)


2,416


284


(2,647)


195 %


(22) %

Gain (loss) on swap derivatives



5,700


1,288


(3,543)


(2,329)


4,194


343 %


36 %

Change in fair value of certain loans held for investment



(19,247)


(6,965)


9,488


4,192


(26,397)


176 %


(27) %

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



5,308


(2,242)


(2,937)


(9,914)


16,403


nm


(68) %

MSR hedge (loss) gain



(4,733)


(7,636)


2,650


(348)


(14,128)


(38) %


(66) %

Total non-interest income adjustments

a


$        (15,023)


$        (16,252)


$              8,074


$          (8,115)


$        (22,575)


(8) %


(33) %

















Non-Interest Expense Adjustments
















Merger related expense



$          18,938


$          29,649


$         115,898


$          11,637


$                769


(36) %


nm

Exit and disposal costs



4,017


2,119


1,291


1,966


1,364


90 %


195 %

Total non-interest expense adjustments

b


$          22,955


$          31,768


$         117,189


$          13,603


$             2,133


(28) %


nm

















Net interest income

c


$        480,875


$        483,975


$         374,698


$        305,479


$        287,604


(1) %


67 %

















Non-interest income (GAAP)

d


$          43,981


$          39,678


$            54,735


$          34,879


$          29,445


11 %


49 %

Less: Non-interest income adjustments

a


15,023


16,252


(8,074)


8,115


22,575


(8) %


(33) %

Operating non-interest income (non-GAAP)

e


$          59,004


$          55,930


$            46,661


$          42,994


$          52,020


5 %


13 %

















Revenue (GAAP)

f=c+d


$        524,856


$        523,653


$         429,433


$        340,358


$        317,049


— %


66 %

Operating revenue (non-GAAP)

g=c+e


$        539,879


$        539,905


$         421,359


$        348,473


$        339,624


— %


59 %

















Non-interest expense (GAAP)

h


$        304,147


$        328,559


$         342,818


$        194,982


$        177,964


(7) %


71 %

Less: Non-interest expense adjustments

b


(22,955)


(31,768)


(117,189)


(13,603)


(2,133)


(28) %


nm

Operating non-interest expense (non-GAAP)

i


$        281,192


$        296,791


$         225,629


$        181,379


$        175,831


(5) %


60 %

















Net income (loss) (GAAP)

j


$        135,845


$        133,377


$         (14,038)


$          82,964


$          84,040


2 %


62 %

Provision (benefit) for income taxes



48,127


45,703


(4,886)


29,464


27,473


5 %


75 %

Income (loss) before provision for income taxes



183,972


179,080


(18,924)


112,428


111,513


3 %


65 %

Provision for credit losses



36,737


16,014


105,539


32,948


27,572


129 %


33 %

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

k


220,709


195,094


86,615


145,376


139,085


13 %


59 %

Less: Non-interest income adjustments

a


15,023


16,252


(8,074)


8,115


22,575


(8) %


(33) %

Add: Non-interest expense adjustments

b


22,955


31,768


117,189


13,603


2,133


(28) %


nm

Operating PPNR (non-GAAP)

l


$        258,687


$        243,114


$         195,730


$        167,094


$        163,793


6 %


58 %

















Net income (loss) (GAAP)

j


$        135,845


$        133,377


$         (14,038)


$          82,964


$          84,040


2 %


62 %

Less: Non-interest income adjustments

a


15,023


16,252


(8,074)


8,115


22,575


(8) %


(33) %

Add: Non-interest expense adjustments

b


22,955


31,768


117,189


13,603


2,133


(28) %


nm

Tax effect of adjustments



(9,482)


(11,981)


(23,565)


(5,459)


(6,116)


(21) %


55 %

Operating net income (non-GAAP)

m


$        164,341


$        169,416


$            71,512


$          99,223


$        102,632


(3) %


60 %

nm = not meaningful
































Columbia Banking System, Inc.

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)




Quarter Ended


% Change

($ in thousands, except per share data)



Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022


Seq. Quarter


Year over Year

Average assets

n


$   53,011,361


$   53,540,574


$   39,425,975


$   31,637,490


$   30,668,177


(1) %


73 %

Less: Average goodwill and other intangible assets, net



1,684,093


1,718,705


623,042


5,298


6,343


(2) %


nm

Average tangible assets

o


$   51,327,268


$   51,821,869


$   38,802,933


$   31,632,192


$   30,661,834


(1) %


67 %

















Average common shareholders' equity

p


$    4,866,975


$     4,935,239


$     3,349,761


$     2,438,639


$    2,567,266


(1) %


90 %

Less: Average goodwill and other intangible assets, net



1,684,093


1,718,705


623,042


5,298


6,343


(2) %


nm

Average tangible common equity

q


$    3,182,882


$     3,216,534


$     2,726,719


$     2,433,341


$    2,560,923


(1) %


24 %

















Weighted average basic shares outstanding  (1)

r


208,070


207,977


156,383


129,321


129,319


0 %


61 %

Weighted average diluted shares outstanding  (1)

s


208,645


208,545


156,383


129,801


129,733


0 %


61 %

















Select Per-Share & Performance Metrics
















Earnings-per-share - basic (1)

j / r


$            0.65


$            0.64


$           (0.09)


$            0.64


$            0.65


2 %


— %

Earnings-per-share - diluted (1)

j / s


$            0.65


$            0.64


$           (0.09)


$            0.64


$            0.65


2 %


— %

Efficiency ratio (2)

h / f


57.82 %


62.60 %


79.71 %


57.24 %


56.07 %


(4.78)


1.75

Return on average assets

j / n


1.02 %


1.00 %


(0.14) %


1.04 %


1.09 %


0.02


(0.07)

Return on average tangible assets

j / o


1.05 %


1.03 %


(0.15) %


1.04 %


1.09 %


0.02


(0.04)

PPNR return on average assets

k / n


1.65 %


1.46 %


0.89 %


1.82 %


1.80 %


0.19


(0.15)

Return on average common equity

j / p


11.07 %


10.84 %


(1.70) %


13.50 %


12.99 %


0.23


(1.92)

Return on average tangible common equity

j / q


16.93 %


16.63 %


(2.09) %


13.53 %


13.02 %


0.30


3.91

















Operating Per-Share & Performance Metrics
















Operating earnings-per-share - basic (1)

m / r


$            0.79


$            0.81


$             0.46


$            0.77


$            0.79


(2) %


— %

Operating earnings-per-share - diluted (1)

m / s


$            0.79


$            0.81


$             0.46


$            0.76


$            0.79


(2) %


— %

Operating efficiency ratio (2)

i / g


51.97 %


54.85 %


53.46 %


52.01 %


51.72 %


(2.88)


0.25

Operating return on average assets

m / n


1.23 %


1.27 %


0.74 %


1.24 %


1.33 %


(0.04)


(0.10)

Operating return on average tangible assets

m / o


1.27 %


1.31 %


0.75 %


1.24 %


1.33 %


(0.04)


(0.06)

Operating PPNR return on average assets

l / n


1.94 %


1.82 %


2.01 %


2.10 %


2.12 %


0.12


(0.18)

Operating return on average common equity

m / p


13.40 %


13.77 %


8.66 %


16.14 %


15.86 %


(0.37)


(2.46)

Operating return on average tangible common equity

m / q


20.48 %


21.13 %


10.64 %


16.18 %


15.90 %


(0.65)


4.58



(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.

(2)

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

Columbia Banking System, Inc.

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)




Nine Months Ended


% Change

($ in thousands)



Sep 30, 2023


Sep 30, 2022


Year over Year

Non-Interest Income Adjustments








Gain on sale of debt securities, net



$                                      4


$                                      2


100 %

Loss on equity securities, net



(336)


(7,383)


(95) %

Gain on swap derivatives



3,445


18,578


(81) %

Change in fair value of certain loans held for investment



(16,724)


(62,656)


(73) %

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



129


67,451


(100) %

   MSR hedge loss



(9,719)


(14,128)


(31) %

Total non-interest income adjustments

a


$                        (23,201)


$                             1,864


nm









Non-Interest Expense Adjustments








Merger related expense



$                        164,485


$                             5,719


nm

Exit and disposal costs



7,427


4,839


53 %

Total non-interest expense adjustments

b


$                        171,912


$                           10,558


nm









Net interest income

c


$                    1,339,548


$                        764,537


75 %









Non-interest income (GAAP)

d


$                        138,394


$                        164,649


(16) %

Less: Non-interest income adjustments

a


23,201


(1,864)


nm

Operating non-interest income (non-GAAP)

e


$                        161,595


$                        162,785


(1) %









Revenue (GAAP)

f=c+d


$                    1,477,942


$                        929,186


59 %

Operating revenue (non-GAAP)

g=c+e


$                    1,501,143


$                        927,322


62 %









Non-interest expense (GAAP)

h


$                        975,524


$                        539,968


81 %

Less: Non-interest expense adjustments

b


(171,912)


(10,558)


nm

Operating non-interest expense (non-GAAP)

i


$                        803,612


$                        529,410


52 %









Net income (GAAP)

j


$                        255,184


$                        253,788


1 %

Provision for income taxes



88,944


84,362


5 %

Income before provision for income taxes



344,128


338,150


2 %

Provision for credit losses



158,290


51,068


210 %

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

k


502,418


389,218


29 %

Less: Non-interest income adjustments

a


23,201


(1,864)


nm

Add: Non-interest expense adjustments

b


171,912


10,558


nm

Operating PPNR (non-GAAP)

l


$                        697,531


$                        397,912


75 %









Net income (GAAP)

j


$                        255,184


$                        253,788


1 %

Less: Non-interest income adjustments

a


23,201


(1,864)


nm

Add: Non-interest expense adjustments

b


171,912


10,558


nm

Tax effect of adjustments



(45,028)


(2,020)


nm

Operating net income (non-GAAP)

m


$                        405,269


$                        260,462


56 %

nm = not meaningful
















Average assets

n


$                  48,709,067


$                  30,541,027


59 %

Less: Average goodwill and other intangible assets, net



1,345,833


7,369


nm

Average tangible assets

o


$                  47,363,234


$                  30,533,658


55 %









Average common shareholders' equity

p


$                    4,389,549


$                    2,621,725


67 %

Less: Average goodwill and other intangible assets, net



1,345,833


7,369


nm

Average tangible common equity

q


$                    3,043,716


$                    2,614,356


16 %









Weighted average basic shares outstanding (1)

r


190,997


129,262


48 %

Weighted average diluted shares outstanding (1)

s


191,546


129,702


48 %









Select Per-Share & Performance Metrics








Earnings-per-share - basic (1)

j / r


$                                1.34


$                                1.96


(32) %

Earnings-per-share - diluted (1)

j / s


$                                1.33


$                                1.96


(32) %

Efficiency ratio (2)

h / f


65.87 %


58.05 %


7.82

Return on average assets

j / n


0.70 %


1.11 %


(0.41)

Return on average tangible assets

j / o


0.72 %


1.11 %


(0.39)

PPNR return on average assets

k/n


1.38 %


1.70 %


(0.32)

Return on average common equity

j / p


7.77 %


12.94 %


(5.17)

Return on average tangible common equity

j / q


11.21 %


12.98 %


(1.77)









Operating Per-Share & Performance Metrics








Operating earnings-per-share - basic (1)

m / r


$                                2.12


$                                2.01


5 %

Operating earnings-per-share - diluted (1)

m / s


$                                2.12


$                                2.01


5 %

Operating efficiency ratio (2)

i / g


53.43 %


57.03 %


(3.60)

Operating return on average assets

m / n


1.11 %


1.14 %


(0.03)

Operating return on average tangible assets

m / o


1.14 %


1.14 %


—

Operating PPNR return on average assets

l / n


1.91 %


1.74 %


0.17

Operating return on average common equity

m / p


12.34 %


13.28 %


(0.94)

Operating return on average tangible common equity

m / q


17.80 %


13.32 %


4.48



(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.

(2)

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

Columbia Banking System, Inc.

GAAP to Non-GAAP Reconciliation - Continued

(Unaudited)




Quarter Ended


% Change

($ in thousands)



Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022


Seq. Quarter


Year over Year

Loans and leases interest income

a


$     567,929


$     551,997


$     412,726


$     320,747


$        276,625


3 %


105 %

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

b


28,963


30,548


11,832


387


789


(5) %


nm

Less: Acquired loan accretion - credit related (3)

c


6,370


7,100


3,806


—


—


(10) %


nm

Adjusted loans and leases interest income

d=a-b-c


$     532,596


$     514,349


$     397,088


$     320,360


$        275,836


4 %


93 %

















Taxable securities interest income

e


$        85,007


$        81,617


$        40,448


$        18,290


$          18,261


4 %


366 %

Less: Acquired taxable securities accretion - rate related

f


39,219


34,801


15,356


—


—


13 %


nm

Adjusted Taxable securities interest income

g=e-f


$        45,788


$        46,816


$        25,092


$        18,290


$          18,261


(2) %


151 %

















Non-taxable securities interest income (1)

h


$          8,085


$          8,010


$          4,068


$          1,571


$             1,651


1 %


390 %

Less: Acquired non-taxable securities accretion - rate related

i


2,288


2,274


901


—


—


1 %


nm

Adjusted Taxable securities interest income (1)

j=h-i


$          5,797


$          5,736


$          3,167


$          1,571


$             1,651


1 %


251 %

















Interest income (1)

k


$     697,169


$     676,922


$     476,622


$     352,530


$        303,857


3 %


129 %

Less: Acquired loan and securities accretion - rate related

l=b+f+i


70,470


67,623


28,089


387


789


4 %


nm

Less: Acquired loan accretion - credit related

c


6,370


7,100


3,806


—


—


(10) %


nm

Adjusted interest income (1)

m=k-l-c


$     620,329


$     602,199


$     444,727


$     352,143


$        303,068


3 %


105 %

















Interest-bearing deposits interest expense

n


$     126,974


$     100,408


$        63,613


$        31,174


$             9,090


26 %


nm

Less: Acquired deposit accretion

o


(373)


(280)


(93)


—


—


33 %


nm

Adjusted interest-bearing deposits interest expense

p=n-o


$     127,347


$     100,688


$        63,706


$        31,174


$             9,090


26 %


nm

















Interest expense

q


$     215,138


$     191,754


$     101,253


$        46,768


$          15,924


12 %


nm

Less: Acquired interest-bearing liabilities accretion (2)

r


(430)


(337)


(150)


(57)


(57)


28 %


nm

Adjusted interest expense

s=q-r


$     215,568


$     192,091


$     101,403


$        46,825


$          15,981


12 %


nm

















Net Interest Income (1)

t


$     482,031


$     485,168


$     375,369


$     305,762


$        287,933


(1) %


67 %

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

u=l-r


70,900


67,960


28,239


444


846


4 %


nm

Less: Acquired loan accretion - credit related (3)

c


6,370


7,100


3,806


—


—


(10) %


nm

Adjusted net interest income (1)

v=t-u-c


$     404,761


$     410,108


$     343,324


$     305,318


$        287,087


(1) %


41 %

















Average loans and leases

aa


37,050,518


37,169,315


29,998,630


25,855,556


24,886,203


0 %


49 %

Average taxable securities

ab


8,356,165


8,656,147


4,960,966


3,042,044


3,271,185


(3) %


155 %

Average non-taxable securities

ac


844,417


865,278


437,020


200,825


212,847


(2) %


297 %

Average interest-earning assets

ad


48,981,105


49,442,518


37,055,705


30,305,129


29,437,103


(1) %


66 %

Average interest-bearing deposits

ae


25,121,745


24,494,717


19,496,551


16,103,984


15,350,390


3 %


64 %

Average interest-bearing liabilities

af


31,413,978


31,372,416


22,548,264


17,668,730


16,359,575


0 %


92 %



(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)



Sep 30, 2023


Jun 30, 2023


Mar 31, 2023


Dec 31, 2022


Sep 30, 2022


Seq. Quarter


Year over Year

Average yield on loans and leases

a / aa


6.08 %


5.95 %


5.55 %


4.92 %


4.41 %


0.13


1.67

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

b / aa


0.31 %


0.33 %


0.16 %


0.01 %


0.01 %


(0.02)


0.30

Less: Acquired loan accretion - credit related (3)

c / aa


0.07 %


0.08 %


0.05 %


— %


— %


(0.01)


0.07

Adjusted average yield on loans and leases

d / aa


5.70 %


5.54 %


5.34 %


4.91 %


4.40 %


0.16


1.30

















Average yield on taxable securities

e / ab


4.07 %


3.77 %


3.26 %


2.40 %


2.23 %


0.30


1.84

Less: Acquired taxable securities accretion - rate related

f / ab


1.86 %


1.61 %


1.26 %


— %


— %


0.25


1.86

Adjusted average yield on taxable securities

g / ab


2.21 %


2.16 %


2.00 %


2.40 %


2.23 %


0.05


(0.02)

















Average yield on non-taxable securities (1)

h / ac


3.83 %


3.70 %


3.72 %


3.13 %


3.10 %


0.13


0.73

Less: Acquired non-taxable securities accretion - rate related

i / ac


1.07 %


1.05 %


0.84 %


— %


— %


0.02


1.07

Adjusted yield on non-taxable securities (1)

j / ac


2.76 %


2.65 %


2.88 %


3.13 %


3.10 %


0.11


(0.34)

















Average yield on interest-earning assets (1)

k / ad


5.65 %


5.48 %


5.19 %


4.62 %


4.10 %


0.17


1.55

Less: Acquired loan and securities accretion - rate related

l / ad


0.57 %


0.55 %


0.31 %


0.01 %


0.01 %


0.02


0.56

Less: Acquired loan accretion - credit related

c / ad


0.05 %


0.06 %


0.04 %


— %


— %


(0.01)


0.05

Adjusted average yield on interest-earning assets (1)

m / ad


5.03 %


4.87 %


4.84 %


4.61 %


4.09 %


0.16


0.94

















Average rate on interest-bearing deposits

n / ae


2.01 %


1.64 %


1.32 %


0.77 %


0.23 %


0.37


1.78

Less: Acquired deposit accretion

o / ae


(0.01) %


— %


— %


— %


— %


(0.01)


(0.01)

Adjusted average rate on interest-bearing deposits

p / ae


2.02 %


1.64 %


1.32 %


0.77 %


0.23 %


0.38


1.79

















Average rate on interest-bearing liabilities

q / af


2.72 %


2.45 %


1.82 %


1.05 %


0.39 %


0.27


2.33

Less: Acquired interest-bearing liabilities accretion (2)

r / af


(0.01) %


— %


— %


— %


— %


(0.01)


(0.01)

Adjusted average rate on interest-bearing liabilities

s / af


2.73 %


2.45 %


1.82 %


1.05 %


0.39 %


0.28


2.34

















Net interest margin (1)

t / ad


3.91 %


3.93 %


4.08 %


4.01 %


3.88 %


(0.02)


0.03

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

u / ad


0.58 %


0.55 %


0.31 %


— %


0.01 %


0.03


0.57

Less: Acquired loan accretion - credit related (3)

c / ad


0.05 %


0.06 %


0.04 %


— %


— %


(0.01)


0.05

Adjusted net interest margin (1)

v / ad


3.28 %


3.32 %


3.73 %


4.01 %


3.87 %


(0.04)


(0.59)



(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)




Nine Months Ended



($ in thousands)



Sep 30, 2023


Sep 30, 2022


Year over Year

Loans and leases interest income

a


$              1,532,652


$                  720,699


113 %

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

b


71,343


3,290


nm

Less: Acquired loan accretion - credit related (3)

c


17,276


—


nm

Adjusted loans and leases interest income

d=a-b-c


$              1,444,033


$                  717,409


101 %









Taxable securities interest income

e


$                  207,072


$                    54,412


281 %

Less: Acquired taxable securities accretion - rate related

f


89,376


—


nm

Adjusted Taxable securities interest income

g=e-f


$                  117,696


$                    54,412


116 %









Non-taxable securities interest income (1)

h


$                    20,163


$                       5,098


296 %

Less: Acquired non-taxable securities accretion - rate related

i


5,463


—


nm

Adjusted Taxable securities interest income (1)

j=h-i


$                    14,700


$                       5,098


188 %









Interest income (1)

k


$              1,850,713


$                  796,805


132 %

Less: Acquired loan and securities accretion - rate related

l=b+f+i


166,182


3,290


nm

Less: Acquired loan accretion - credit related

c


17,276


—


nm

Adjusted interest income (1)

m=k-l-c


$              1,667,255


$                  793,515


110 %









Interest-bearing deposits interest expense

n


$                  290,995


$                    17,021


nm

Less: Acquired deposit accretion

o


(746)


—


nm

Adjusted interest-bearing deposits interest expense

p=n-o


$                  291,741


$                    17,021


nm









Interest expense

q


$                  508,145


$                    31,233


nm

Less: Acquired interest-bearing liabilities accretion (2)

r


(917)


(171)


436 %

Adjusted interest expense

s=q-r


$                  509,062


$                    31,404


nm









Net Interest Income (1)

t


$              1,342,568


$                  765,572


75 %

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

u=l-r


167,099


3,461


nm

Less: Acquired loan accretion - credit related (3)

c


17,276


—


nm

Adjusted net interest income (1)

v=t-u-c


$              1,158,193


$                  762,111


52 %









Average loans and leases

aa


34,765,319


23,676,201


47 %

Average taxable securities

ab


7,336,862


3,445,386


113 %

Average non-taxable securities

ac


717,064


222,375


222 %

Average interest-earning assets

ad


45,203,459


29,303,722


54 %

Average interest-bearing deposits

ae


23,091,034


15,422,795


50 %

Average interest-bearing liabilities

af


28,510,120


16,355,258


74 %



(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)









($ in thousands)



Sep 30, 2023


Sep 30, 2022


Year over Year

Average yield on loans and leases

a / aa


5.88 %


4.06 %


1.82

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

b / aa


0.27 %


0.02 %


0.25

Less: Acquired loan accretion - credit related (3)

c / aa


0.07 %


— %


0.07

Adjusted average yield on loans and leases

d / aa


5.54 %


4.04 %


1.50









Average yield on taxable securities

e / ab


3.76 %


2.11 %


1.65

Less: Acquired taxable securities accretion - rate related

f / ab


1.63 %


— %


1.63

Adjusted average yield on taxable securities

g / ab


2.13 %


2.11 %


0.02









Average yield on non-taxable securities (1)

h / ac


3.75 %


3.06 %


0.69

Less: Acquired non-taxable securities accretion - rate related

i / ac


1.02 %


— %


1.02

Adjusted yield on non-taxable securities (1)

j / ac


2.73 %


3.06 %


(0.33)









Average yield on interest-earning assets (1)

k / ad


5.46 %


3.62 %


1.84

Less: Acquired loan and securities accretion - rate related

l / ad


0.49 %


0.02 %


0.47

Less: Acquired loan accretion - credit related

c / ad


0.05 %


— %


0.05

Adjusted average yield on interest-earning assets (1)

m / ad


4.92 %


3.60 %


1.32









Average rate on interest-bearing deposits

n / ae


1.68 %


0.15 %


1.53

Less: Acquired deposit accretion

o / ae


— %


— %


—

Adjusted average rate on interest-bearing deposits

p / ae


1.68 %


0.15 %


1.53









Average rate on interest-bearing liabilities

q / af


2.38 %


0.26 %


2.12

Less: Acquired interest-bearing liabilities accretion (2)

r / af


— %


— %


—

Adjusted average rate on interest-bearing liabilities

s / af


2.38 %


0.26 %


2.12









Net interest margin (1)

t / ad


3.96 %


3.48 %


0.48

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

u / ad


0.49 %


0.02 %


0.47

Less: Acquired loan accretion - credit related (3)

c / ad


0.05 %


— %


0.05

Adjusted net interest margin (1)

v / ad


3.42 %


3.46 %


(0.04)



(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. 

SOURCE Columbia Banking System, Inc.

Also from this source

COLUMBIA BANKING SYSTEM, INC. REPORTS THIRD QUARTER 2026 RESULTS

COLUMBIA BANKING SYSTEM, INC. REPORTS THIRD QUARTER 2026 RESULTS

$220 million $229 million $0.78 $0.82 Net income Operating net income1 Earnings per common share - diluted Operating earnings per common share -...
Columbia Banking System Named the Top Performing Large U.S. Bank in Bank Director's 2026 RankingBanking Study

Columbia Banking System Named the Top Performing Large U.S. Bank in Bank Director's 2026 RankingBanking Study

Columbia Banking System, Inc. (Nasdaq: COLB), the parent company of Columbia Bank, has been recognized as the No. 1 Top Performing Bank in the $50...
More Releases From This Source

Explore

Banking & Financial Services

Banking & Financial Services

Earnings

Earnings

News Releases in Similar Topics