TACOMA, Wash., April 22,
2015 /PRNewswire/ -- Melanie Dressel, President and Chief
Executive Officer of Columbia Banking System and Columbia Bank
(NASDAQ: COLB) ("Columbia") said
today upon the release of Columbia's first quarter 2015 earnings, "We
are pleased with our financial performance for the quarter,
especially in light of the after tax impact to earnings of
$1.9 million, or $0.03 per diluted share, resulting from
acquisition-related expenses and FDIC acquired loan accounting. We
had good loan production, solid core deposit growth, increased
quarter over quarter revenue, and the operating net interest margin
continued to show great resiliency."
Ms. Dressel continued, "The integration of our acquisition of
Intermountain Community Bancorp remains on track. As expected, we
plan to realize more of the operational synergies as the second and
third quarters progress."
Significant Influences on the Quarter Ended March 31,
2015
Balance Sheet
Loans were $5.45 billion at
March 31, 2015, up $5.5 million
from December 31, 2014. Securities were $2.04 billion at March 31, 2015, a decrease
of $91.5 million, or 4% from
$2.13 billion at December 31,
2014 primarily due to sales of investment
securities.
Total deposits at March 31, 2015 were $7.07 billion, an increase of $150.2 million, or 2% from $6.92 billion at December 31, 2014. Core
deposits were $6.77 billion at
March 31, 2015, an increase of $151.8
million from December 31, 2014. The average rate on
interest-bearing deposits and total deposits for the quarter was
0.07% and 0.04%, respectively, compared to 0.08% and 0.05% for the
fourth quarter of 2014.
Asset Quality
At March 31, 2015, nonperforming assets to total assets
were 0.65% or $55.2 million, compared
to 0.62%, or $53.6 million, at
December 31, 2014. The $1.6
million increase was the result of a $476 thousand increase in nonaccrual loans and a
$1.1 million increase in other real
estate owned, most of which came from the purchased credit impaired
loan portfolio.
The following table sets forth information regarding nonaccrual
loans and total nonperforming assets:
|
|
March 31,
2015
|
|
December 31,
2014
|
|
|
(in
thousands)
|
Nonaccrual
loans:
|
|
|
|
|
Commercial
business
|
|
$
|
17,429
|
|
|
$
|
16,799
|
|
Real
estate:
|
|
|
|
|
One-to-four family
residential
|
|
4,429
|
|
|
2,822
|
|
Commercial and
multifamily residential
|
|
4,498
|
|
|
7,847
|
|
Total real
estate
|
|
8,927
|
|
|
10,669
|
|
Real estate
construction:
|
|
|
|
|
One-to-four family
residential
|
|
2,134
|
|
|
465
|
|
Commercial and
multifamily residential
|
|
470
|
|
|
480
|
|
Total real estate
construction
|
|
2,604
|
|
|
945
|
|
Consumer
|
|
2,868
|
|
|
2,939
|
|
Total nonaccrual
loans
|
|
31,828
|
|
|
31,352
|
|
Other real estate
owned and other personal property owned
|
|
23,347
|
|
|
22,225
|
|
Total nonperforming
assets
|
|
$
|
55,175
|
|
|
$
|
53,577
|
|
The following table provides an analysis of the Company's
allowance for loan and lease losses ("ALLL"):
|
|
Three Months Ended
March 31,
|
|
|
2015
|
|
2014 (1)
|
|
|
(in
thousands)
|
Beginning
balance
|
|
$
|
69,569
|
|
|
$
|
72,454
|
|
Charge-offs:
|
|
|
|
|
Commercial
business
|
|
(1,426)
|
|
|
(233)
|
|
One-to-four family
residential real estate
|
|
(8)
|
|
|
(207)
|
|
Commercial and
multifamily residential real estate
|
|
—
|
|
|
(1,023)
|
|
Consumer
|
|
(891)
|
|
|
(727)
|
|
Purchased credit
impaired (1)
|
|
(4,100)
|
|
|
(4,273)
|
|
Total
charge-offs
|
|
(6,425)
|
|
|
(6,463)
|
|
Recoveries:
|
|
|
|
|
Commercial
business
|
|
618
|
|
|
490
|
|
One-to-four family
residential real estate
|
|
12
|
|
|
28
|
|
Commercial and
multifamily residential real estate
|
|
3,261
|
|
|
39
|
|
One-to-four family
residential real estate construction
|
|
28
|
|
|
42
|
|
Commercial and
multifamily residential real estate construction
|
|
3
|
|
|
—
|
|
Consumer
|
|
273
|
|
|
253
|
|
Purchased credit
impaired (1)
|
|
1,686
|
|
|
1,806
|
|
Total
recoveries
|
|
5,881
|
|
|
2,658
|
|
Net
charge-offs
|
|
(544)
|
|
|
(3,805)
|
|
Provision for loan
and lease losses (1)
|
|
1,209
|
|
|
1,922
|
|
Ending
balance
|
|
$
|
70,234
|
|
|
$
|
70,571
|
|
|
__________
|
(1) Reclassified to
conform to the current period's presentation. The reclassification
was limited to including charge-off, recovery, and provision
activity related to the purchased credit impaired loan
portfolio.
|
The allowance for loan losses to period end loans was 1.29% at
March 31, 2015 compared to 1.28% at December 31, 2014.
Excluding acquired loans, the allowance at March 31, 2015
represented 1.17% of originated loans, compared to 1.21% of
originated loans at December 31, 2014. The decline reflects
strong organic loan growth. The allowance to loans, excluding
acquired loans, is a non-GAAP financial measure. See the section
titled "Non-GAAP Financial Measures" on the last pages of this
earnings release for the reconciliation of the allowance for loan
losses to period end loans, excluding acquired loans.
For the first quarter of 2015, Columbia recorded a net provision for loan and
lease losses of $1.2 million compared
to a net provision of $1.9 million
for the comparable quarter last year. The net provision for loan
and lease losses recorded during the current quarter was primarily
driven by the purchased credit impaired ("PCI") loan portfolio, for
which Columbia recorded a
provision of $2.6 million, which was
partially offset by a provision recapture of $1.4 million related to loans, excluding PCI
loans. The provision recorded relating to PCI loans was due to the
decrease in the present value of expected future cash flows as
remeasured during the current quarter, compared to the present
value of expected future cash flows during the fourth quarter of
2014. The $2.6 million provision
related to PCI loans was partially offset by a $1.5 million favorable adjustment to the change
in FDIC loss-sharing asset. The $1.4
million provision recapture related to loans, excluding PCI
loans, was due to loan recovery activity during the current quarter
and improvement in credit quality.
Net Interest Margin ("NIM")
Columbia's net interest margin
(tax equivalent) of 4.39% for the first quarter of 2015 was down 11
basis points from 4.50% for the fourth quarter of 2014. The
decrease was primarily due to fewer accruing days in the current
quarter, which negatively impacted the net interest margin by 10
basis points. Compared to the first quarter of 2014, Columbia's net interest margin decreased 46
basis points from 4.85%, due to lower incremental accretion on
acquired loans, which was $12.3
million for the prior year quarter, and only $7.5 million for the current quarter.
Columbia's operating net
interest margin (tax equivalent)(1) increased to 4.18%
for the first quarter of 2015, compared to 4.17% for the fourth
quarter of 2014, despite the negative impact of fewer accruing days
in the current quarter.
The following table shows the impact to interest income
resulting from accretion of income on acquired loan portfolios as
well as the net interest margin and operating net interest
margin:
|
|
Three Months
Ended
|
|
|
March 31,
2015
|
|
March 31,
2014
|
|
|
(dollars in
thousands)
|
Incremental accretion
income due to:
|
|
|
|
|
FDIC purchased credit
impaired loans
|
|
$
|
2,447
|
|
|
$
|
6,489
|
|
Other FDIC acquired
loans
|
|
117
|
|
|
204
|
|
Other acquired
loans
|
|
4,934
|
|
|
5,615
|
|
Incremental accretion
income
|
|
$
|
7,498
|
|
|
$
|
12,308
|
|
|
|
|
|
|
Net interest margin
(tax equivalent)
|
|
4.39
|
%
|
|
4.85
|
%
|
Operating net
interest margin (tax equivalent) (1)
|
|
4.18
|
%
|
|
4.19
|
%
|
|
__________
|
(1) Operating net
interest margin (tax equivalent) is a non-GAAP financial measure.
See the section titled "Non-GAAP Financial Measures" on the last
pages of this earnings release for the reconciliation of operating
net interest margin (tax equivalent) to net interest
margin.
|
Impact of FDIC Acquired Loan Accounting
The following table illustrates the impact to earnings
associated with Columbia's FDIC
acquired loan portfolios:
FDIC Acquired Loan
Activity
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2015
|
|
March 31,
2014
|
|
|
(in
thousands)
|
Incremental accretion
income on FDIC purchased credit impaired loans
|
|
$
|
2,447
|
|
|
$
|
6,489
|
|
Incremental accretion
income on other FDIC acquired loans
|
|
117
|
|
|
204
|
|
Provision for losses
on FDIC purchased credit impaired loans
|
|
(2,609)
|
|
|
(2,422)
|
|
Change in FDIC
loss-sharing asset
|
|
150
|
|
|
(4,819)
|
|
FDIC clawback
liability expense
|
|
(23)
|
|
|
(204)
|
|
Pre-tax earnings
impact
|
|
$
|
82
|
|
|
$
|
(752)
|
|
The incremental accretion income on FDIC purchased credit
impaired loans represents the amount of income recorded above the
contractual rate stated in the individual loan notes and stems from
the discount established at the time these loan portfolios were
acquired. At March 31, 2015, the accretable yield on purchased
credit impaired loans was $68.7
million. Accretable yield is subject to change based upon
expected future loan cash flows, which are remeasured by
Columbia on a quarterly basis.
The $150 thousand change in the
FDIC loss-sharing asset in the current quarter added to noninterest
income and consisted primarily of loan impairment of $1.5 million and write-downs on OREO of
$1.1 million, partially offset by
$2.3 million in amortization expense.
Additional details of the components of the change in the FDIC
loss-sharing asset are provided in tabular format in the section
titled "Noninterest Income" in the following pages.
First Quarter 2015 Results
Net Interest Income
Net interest income for the first quarter of 2015 was
$80.4 million, an increase of
$1.6 million compared to the fourth
quarter of 2014. This increase was primarily due to the acquired
loans and securities from the Intermountain transaction. Compared
to the first quarter of 2014, net interest income increased by
$6.4 million from $73.9 million. The increase from the prior year
period is due to the combination of acquired loans and securities
from the acquisition of Intermountain and organic loan growth,
partially offset by a decline in incremental accretion income. For
additional information regarding net interest income, see the
"Average Balances and Rates" table.
Noninterest Income
Total noninterest income was $22.8
million for the first quarter of 2015, an increase of
$7.6 million compared to $15.2 million for the fourth quarter of 2014.
This increase was primarily due to a $5.5
million positive variance related to the change in FDIC
loss-sharing asset. For the prior quarter, the change in FDIC
loss-sharing asset was an expense of $5.3
million, compared to a net benefit in the current quarter of
$150 thousand. The current period net
benefit was driven by reduced amortization as well as increases in
the asset resulting from loan impairment and covered asset
write-downs. The decline in amortization resulted from the recent
expiration of our two most significant FDIC loss-sharing
agreements. Additional details of the components of the change in
the FDIC loss-sharing asset are provided in tabular format on the
following page. Also contributing to the linked quarter growth in
noninterest income was an increase in investment securities gains
of $721 thousand and an increase in
other noninterest income of $882
thousand. The increase in other noninterest income was due
to a gain on sale of loans in the current quarter of $923 thousand compared to only $286 thousand in the fourth quarter of 2014.
Compared to the first quarter of 2014, noninterest income
increased by $8.8 million. The
increase from the prior year period was primarily due to the change
in FDIC loss-sharing asset, which, as previously mentioned was a
benefit of $150 thousand in the
current quarter, but was an expense of $4.8
million in the first quarter of 2014. Additional details of
the components of the change in the FDIC loss-sharing asset are
provided in tabular format on the following page. Also contributing
to the increase compared to the first quarter of 2014 was an
increase in service charges and other fees of $1.9 million resulting primarily from the
increased customer base from the acquisition of Intermountain.
The change in the FDIC loss-sharing asset has been a significant
component of noninterest income. The following table reflects the
income statement components of the change in the FDIC loss-sharing
asset:
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2015
|
|
2014
|
|
|
(in
thousands)
|
Adjustments reflected
in income
|
|
|
|
|
Amortization,
net
|
|
(2,294)
|
|
|
(6,452)
|
|
Loan
impairment
|
|
1,532
|
|
|
1,938
|
|
Sale of other real
estate
|
|
(420)
|
|
|
(756)
|
|
Write-downs of other
real estate
|
|
1,071
|
|
|
516
|
|
Other
|
|
261
|
|
|
(65)
|
|
Change in FDIC
loss-sharing asset
|
|
$
|
150
|
|
|
$
|
(4,819)
|
|
|
|
|
|
|
|
|
|
|
Noninterest Expense
Total noninterest expense for the first quarter of 2015 was
$66.7 million, an increase of
$2.6 million compared to $64.2 million for the fourth quarter of 2014.
This increase was driven by higher compensation and benefit
expenses due to including a full quarter of such expenses from the
November 1, 2014 Intermountain
acquisition. In addition, the current quarter included certain
additional incentive and employee benefit expenses, typical in the
first quarter. These expense increases were partially offset by a
$1.4 million favorable change in OREO
costs as well as a decrease of $1.6
million in acquisition-related expenses. Substantially all
of the acquisition-related expenses recorded in the current quarter
related to the recently completed Intermountain acquisition.
Compared to the first quarter of 2014, noninterest expense
increased $9.3 million, or 16% from
$57.4 million, due to the
$2.0 million increase in
acquisition-related expenses as well as additional ongoing expense
resulting from the Intermountain acquisition, partially offset by
the benefit recorded in the current quarter related to OREO.
Conference Call Information
Columbia's management will
discuss the first quarter 2015 results on a conference call
scheduled for Thursday, April 23,
2015 at 1:00 p.m. PDT
(4:00 pm EDT). Interested parties may
listen to this discussion by calling 1-866-378-3802; Conference ID
code #22782055.
A conference call replay will be available from approximately
4:00 p.m. PDT on April 23, 2015 through midnight PDT on April 30,
2015. The conference call replay can be accessed by dialing
1-855-859-2056 and entering Conference ID code #22782055.
Annual Meeting of Shareholders
Columbia Banking System's Annual Meeting of Shareholders will be
held at 1:00 PDT on April 22, 2015, at the William W. Philip Hall at
the University of Washington Tacoma.,
1900 Commerce Street, Tacoma,
Washington 98402. The Hall is named in honor of William W.
"Bill" Philip, who had a seminal role in establishing UW Tacoma,
and was a co-founder of Columbia Bank.
Directions and parking information are available at
http://www.tacoma.uw.edu/getting-campus/getting-campus.
About Columbia
Headquartered in Tacoma,
Washington, Columbia Banking System, Inc. is the holding
company of Columbia Bank, a Washington
state-chartered full-service commercial bank, with over 150
branches throughout Washington,
Oregon and Idaho. For the
eighth consecutive year, the bank was named in 2014 as one
of Puget Sound Business Journal's "Washington's Best Workplaces."
Columbia ranked in the top 20 on
the 2015 Forbes list of best banks in the country, as well as
ranking the best in Washington and
second in the Pacific Northwest for the fourth year in a row.
More information about Columbia can be found on its website at
www.columbiabank.com.
Note Regarding Forward-Looking
Statements
This news release includes forward looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995,
which management believes are a benefit to shareholders. These
forward looking statements describe Columbia's management's expectations regarding
future events and developments such as future operating results,
growth in loans and deposits, continued success of Columbia's style of banking and the strength
of the local economy. The words "will," "believe," "expect,"
"intend," "should," and "anticipate" and words of similar
construction are intended in part to help identify forward looking
statements. Future events are difficult to predict, and the
expectations described above are necessarily subject to risk and
uncertainty that may cause actual results to differ materially and
adversely. In addition to discussions about risks and uncertainties
set forth from time to time in Columbia's filings with the Securities and
Exchange Commission, available at the SEC's website at www.sec.gov
and the Company's website at www.columbiabank.com, including the
"Risk Factors," "Business" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" sections
of our annual reports on Form 10-K and quarterly reports on Form
10-Q, factors that may cause actual results to differ materially
from those contemplated by such forward-looking statements include,
among others, the following: (1) local, national and
international economic conditions may be less favorable than
expected or have a more direct and pronounced effect on
Columbia than expected and
adversely affect Columbia's
ability to continue its internal growth at historical rates and
maintain the quality of its earning assets; (2) changes in interest
rates may reduce interest margins more than expected and negatively
affect funding sources; (3) projected business increases following
strategic expansion or opening or acquiring new branches may be
lower than expected; (4) costs or difficulties related to the
integration of acquisitions may be greater than expected; (5)
competitive pressure among financial institutions may increase
significantly; and (6) legislation or regulatory requirements or
changes may adversely affect the businesses in which Columbia is engaged. We believe the
expectations reflected in our forward-looking statements are
reasonable, based on information available to us on the date
hereof. However, given the described uncertainties and risks, we
cannot guarantee our future performance or results of operations
and you should not place undue reliance on these forward-looking
statements. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. The factors noted above and the risks
and uncertainties described in our SEC filings should be considered
when reading any forward-looking statements in this release.
Contacts:
|
Melanie J.
Dressel,
|
|
President
and
|
|
Chief Executive
Officer
|
|
(253)
305-1911
|
|
|
|
Clint E.
Stein,
|
|
Executive Vice
President
|
|
and Chief Financial
Officer
|
|
(253)
593-8304
|
FINANCIAL
STATISTICS
|
|
|
|
Columbia
Banking System, Inc.
|
|
Three Months
Ended
|
|
|
|
Unaudited
|
|
March
31,
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
Earnings
|
|
(dollars in
thousands except per share amounts)
|
|
|
|
Net interest
income
|
|
$
|
80,364
|
|
|
$
|
73,940
|
|
|
|
|
Provision for loan
and lease losses
|
|
$
|
1,209
|
|
|
$
|
1,922
|
|
|
|
|
Noninterest
income
|
|
$
|
22,767
|
|
|
$
|
14,008
|
|
|
|
|
Noninterest
expense
|
|
$
|
66,734
|
|
|
$
|
57,386
|
|
|
|
|
Acquisition-related
expense (included in noninterest expense)
|
|
$
|
2,974
|
|
|
$
|
966
|
|
|
|
|
Net income
|
|
$
|
24,361
|
|
|
$
|
19,844
|
|
|
|
|
Per Common
Share
|
|
|
|
|
|
|
|
Earnings
(basic)
|
|
$
|
0.42
|
|
|
$
|
0.38
|
|
|
|
|
Earnings
(diluted)
|
|
$
|
0.42
|
|
|
$
|
0.37
|
|
|
|
|
Book value
|
|
$
|
21.53
|
|
|
$
|
20.39
|
|
|
|
|
Averages
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
8,505,776
|
|
|
$
|
7,143,759
|
|
|
|
|
Interest-earning
assets
|
|
$
|
7,529,040
|
|
|
$
|
6,244,692
|
|
|
|
|
Loans
|
|
$
|
5,414,942
|
|
|
$
|
4,537,107
|
|
|
|
|
Securities, including
Federal Home Loan Bank stock
|
|
$
|
2,068,806
|
|
|
$
|
1,682,370
|
|
|
|
|
Deposits
|
|
$
|
6,927,756
|
|
|
$
|
5,901,838
|
|
|
|
|
Interest-bearing
deposits
|
|
$
|
4,157,491
|
|
|
$
|
3,772,370
|
|
|
|
|
Interest-bearing
liabilities
|
|
$
|
4,395,502
|
|
|
$
|
3,868,060
|
|
|
|
|
Noninterest-bearing
deposits
|
|
$
|
2,770,265
|
|
|
$
|
2,129,468
|
|
|
|
|
Shareholders'
equity
|
|
$
|
1,240,853
|
|
|
$
|
1,067,353
|
|
|
|
|
Financial
Ratios
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.15
|
%
|
|
1.11
|
%
|
|
|
|
Return on average
common equity
|
|
7.86
|
%
|
|
7.45
|
%
|
|
|
|
Average equity to
average assets
|
|
14.59
|
%
|
|
14.94
|
%
|
|
|
|
Net interest margin
(tax equivalent)
|
|
4.39
|
%
|
|
4.85
|
%
|
|
|
|
Efficiency ratio (tax
equivalent) (1)
|
|
62.95
|
%
|
|
63.52
|
%
|
|
|
|
Operating efficiency
ratio (tax equivalent) (2)
|
|
63.02
|
%
|
|
65.20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
Period
end
|
|
2015
|
|
2014
|
|
2014
|
|
Total
assets
|
|
$
|
8,552,902
|
|
|
$
|
7,237,053
|
|
|
$
|
8,584,325
|
|
|
Loans, net of
unearned income
|
|
$
|
5,450,895
|
|
|
$
|
4,577,363
|
|
|
$
|
5,445,378
|
|
|
Allowance for loan
and lease losses
|
|
$
|
70,234
|
|
|
$
|
70,571
|
|
|
$
|
69,569
|
|
|
Securities, including
Federal Home Loan Bank stock
|
|
$
|
2,040,163
|
|
|
$
|
1,671,594
|
|
|
$
|
2,131,622
|
|
|
Deposits
|
|
$
|
7,074,965
|
|
|
$
|
6,044,416
|
|
|
$
|
6,924,722
|
|
|
Core
deposits
|
|
$
|
6,771,755
|
|
|
$
|
5,768,434
|
|
|
$
|
6,619,944
|
|
|
Shareholders'
equity
|
|
$
|
1,244,443
|
|
|
$
|
1,074,491
|
|
|
$
|
1,228,175
|
|
|
Nonperforming
assets
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
|
$
|
31,828
|
|
|
$
|
36,397
|
|
|
$
|
31,352
|
|
|
Other real estate
owned ("OREO") and other personal property owned
("OPPO")
|
|
23,347
|
|
|
30,662
|
|
|
22,225
|
|
|
Total
nonperforming assets
|
|
$
|
55,175
|
|
|
$
|
67,059
|
|
|
$
|
53,577
|
|
|
Nonperforming loans
to period-end loans
|
|
0.58
|
%
|
|
0.80
|
%
|
|
0.58
|
%
|
|
Nonperforming assets
to period-end assets
|
|
0.65
|
%
|
|
0.93
|
%
|
|
0.62
|
%
|
|
Allowance for loan
and lease losses to period-end loans
|
|
1.29
|
%
|
|
1.54
|
%
|
|
1.28
|
%
|
|
Net loan
charge-offs
|
|
$
|
544
|
|
(3)
|
$
|
3,805
|
|
(4)
|
$
|
9,612
|
|
(5)
|
|
|
|
|
|
|
|
|
(1) Noninterest
expense divided by the sum of net interest income on a tax
equivalent basis and noninterest income on a tax equivalent
basis.
|
(2) The operating
efficiency ratio (tax equivalent) is a non-GAAP financial measure.
See section titled "Non-GAAP Financial Measures" on the last pages
of this earnings release for the reconciliation of the operating
efficiency ratio (tax equivalent) to the efficiency ratio (tax
equivalent). During the second quarter of 2014, the methodology was
changed to exclude Washington State Business and Occupation
("B&O") taxes. Amounts presented in prior periods have been
adjusted to conform with the current methodology.
|
(3) For the three
months ended March 31, 2015.
|
(4) For the three
months ended March 31, 2014.
|
(5) For the twelve
months ended December 31, 2014.
|
FINANCIAL
STATISTICS
|
|
|
|
Columbia
Banking System, Inc.
|
|
|
|
Unaudited
|
|
March
31,
|
|
December
31,
|
|
|
2015
|
|
2014
|
Loan Portfolio
Composition
|
|
(dollars in
thousands)
|
Commercial
business
|
|
$
|
2,139,873
|
|
|
39.3
|
%
|
|
$
|
2,119,565
|
|
|
38.9
|
%
|
Real
estate:
|
|
|
|
|
|
|
|
|
One-to-four family
residential
|
|
173,739
|
|
|
3.2
|
%
|
|
175,571
|
|
|
3.2
|
%
|
Commercial and
multifamily residential
|
|
2,374,454
|
|
|
43.5
|
%
|
|
2,363,541
|
|
|
43.5
|
%
|
Total real
estate
|
|
2,548,193
|
|
|
46.7
|
%
|
|
2,539,112
|
|
|
46.7
|
%
|
Real estate
construction:
|
|
|
|
|
|
|
|
|
One-to-four family
residential
|
|
124,017
|
|
|
2.3
|
%
|
|
116,866
|
|
|
2.1
|
%
|
Commercial and
multifamily residential
|
|
119,880
|
|
|
2.2
|
%
|
|
134,443
|
|
|
2.5
|
%
|
Total real
estate construction
|
|
243,897
|
|
|
4.5
|
%
|
|
251,309
|
|
|
4.6
|
%
|
Consumer
|
|
352,960
|
|
|
6.5
|
%
|
|
364,182
|
|
|
6.7
|
%
|
Purchased credit
impaired
|
|
219,839
|
|
|
4.0
|
%
|
|
230,584
|
|
|
4.2
|
%
|
Subtotal
loans
|
|
5,504,762
|
|
|
101.0
|
%
|
|
5,504,752
|
|
|
101.1
|
%
|
Less: Net
unearned income
|
|
(53,867)
|
|
|
(1.0)
|
%
|
|
(59,374)
|
|
|
(1.1)
|
%
|
Loans, net of
unearned income
|
|
5,450,895
|
|
|
100.0
|
%
|
|
5,445,378
|
|
|
100.0
|
%
|
Less: Allowance
for loan and lease losses
|
|
(70,234)
|
|
|
|
|
(69,569)
|
|
|
|
Total loans,
net
|
|
5,380,661
|
|
|
|
|
5,375,809
|
|
|
|
Loans held for
sale
|
|
$
|
3,545
|
|
|
|
|
$
|
1,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2015
|
|
2014
|
Deposit
Composition
|
|
(dollars in
thousands)
|
Core
deposits:
|
|
|
|
|
|
|
|
|
Demand and other
non-interest bearing
|
|
$
|
3,260,376
|
|
|
46.2
|
%
|
|
$
|
2,651,373
|
|
|
38.3
|
%
|
Interest bearing
demand
|
|
901,684
|
|
|
12.7
|
%
|
|
1,304,258
|
|
|
18.8
|
%
|
Money
market
|
|
1,700,014
|
|
|
24.0
|
%
|
|
1,760,331
|
|
|
25.4
|
%
|
Savings
|
|
630,423
|
|
|
8.9
|
%
|
|
615,721
|
|
|
8.9
|
%
|
Certificates of
deposit less than $100,000
|
|
279,258
|
|
|
3.9
|
%
|
|
288,261
|
|
|
4.2
|
%
|
Total core
deposits
|
|
6,771,755
|
|
|
95.7
|
%
|
|
6,619,944
|
|
|
95.6
|
%
|
|
|
|
|
|
|
|
|
|
Certificates of
deposit greater than $100,000
|
|
199,728
|
|
|
2.8
|
%
|
|
202,014
|
|
|
2.9
|
%
|
Certificates of
deposit insured by CDARS®
|
|
18,430
|
|
|
0.3
|
%
|
|
18,429
|
|
|
0.3
|
%
|
Brokered money market
accounts
|
|
84,336
|
|
|
1.2
|
%
|
|
83,402
|
|
|
1.2
|
%
|
Subtotal
|
|
7,074,249
|
|
|
100.0
|
%
|
|
6,923,789
|
|
|
100.0
|
%
|
Premium
resulting from acquisition date fair value adjustment
|
|
716
|
|
|
|
|
933
|
|
|
|
Total
deposits
|
|
$
|
7,074,965
|
|
|
|
|
$
|
6,924,722
|
|
|
|
QUARTERLY
FINANCIAL STATISTICS
|
|
|
|
|
Columbia
Banking System, Inc.
|
|
Three Months
Ended
|
Unaudited
|
|
March
31,
|
|
December
31,
|
|
September
30,
|
|
June
30,
|
|
March
31,
|
|
|
2015
|
|
2014
|
|
2014
|
|
2014
|
|
2014
|
|
|
(dollars in
thousands except per share)
|
Earnings
|
|
|
Net interest
income
|
|
$
|
80,364
|
|
|
$
|
78,764
|
|
|
$
|
76,220
|
|
|
$
|
75,124
|
|
|
$
|
73,940
|
|
Provision for loan
and lease losses
|
|
$
|
1,209
|
|
|
$
|
1,708
|
|
|
$
|
980
|
|
|
$
|
2,117
|
|
|
$
|
1,922
|
|
Noninterest
income
|
|
$
|
22,767
|
|
|
$
|
15,185
|
|
|
$
|
15,930
|
|
|
$
|
14,627
|
|
|
$
|
14,008
|
|
Noninterest
expense
|
|
$
|
66,734
|
|
|
$
|
64,154
|
|
|
$
|
59,982
|
|
|
$
|
57,764
|
|
|
$
|
57,386
|
|
Acquisition-related
expense (included in noninterest expense)
|
|
$
|
2,974
|
|
|
$
|
4,556
|
|
|
$
|
3,238
|
|
|
$
|
672
|
|
|
$
|
966
|
|
Net income
|
|
$
|
24,361
|
|
|
$
|
18,920
|
|
|
$
|
21,583
|
|
|
$
|
21,227
|
|
|
$
|
19,844
|
|
Per Common
Share
|
|
|
|
|
|
|
|
|
|
|
Earnings
(basic)
|
|
$
|
0.42
|
|
|
$
|
0.34
|
|
|
$
|
0.41
|
|
|
$
|
0.40
|
|
|
$
|
0.38
|
|
Earnings
(diluted)
|
|
$
|
0.42
|
|
|
$
|
0.34
|
|
|
$
|
0.41
|
|
|
$
|
0.40
|
|
|
$
|
0.37
|
|
Book value
|
|
$
|
21.53
|
|
|
$
|
21.34
|
|
|
$
|
20.78
|
|
|
$
|
20.71
|
|
|
$
|
20.39
|
|
Averages
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
8,505,776
|
|
|
$
|
8,152,463
|
|
|
$
|
7,337,306
|
|
|
$
|
7,229,187
|
|
|
$
|
7,143,759
|
|
Interest-earning
assets
|
|
$
|
7,529,040
|
|
|
$
|
7,199,443
|
|
|
$
|
6,451,660
|
|
|
$
|
6,339,102
|
|
|
$
|
6,244,692
|
|
Loans
|
|
$
|
5,414,942
|
|
|
$
|
5,168,761
|
|
|
$
|
4,770,443
|
|
|
$
|
4,646,356
|
|
|
$
|
4,537,107
|
|
Securities, including
Federal Home Loan Bank stock
|
|
$
|
2,068,806
|
|
|
$
|
1,918,690
|
|
|
$
|
1,585,996
|
|
|
$
|
1,645,993
|
|
|
$
|
1,682,370
|
|
Deposits
|
|
$
|
6,927,756
|
|
|
$
|
6,759,259
|
|
|
$
|
6,110,809
|
|
|
$
|
5,968,881
|
|
|
$
|
5,901,838
|
|
Interest-bearing
deposits
|
|
$
|
4,157,491
|
|
|
$
|
4,174,459
|
|
|
$
|
3,847,730
|
|
|
$
|
3,807,710
|
|
|
$
|
3,772,370
|
|
Interest-bearing
liabilities
|
|
$
|
4,395,502
|
|
|
$
|
4,282,273
|
|
|
$
|
3,889,233
|
|
|
$
|
3,901,016
|
|
|
$
|
3,868,060
|
|
Noninterest-bearing
deposits
|
|
$
|
2,770,265
|
|
|
$
|
2,584,800
|
|
|
$
|
2,263,079
|
|
|
$
|
2,161,171
|
|
|
$
|
2,129,468
|
|
Shareholders'
equity
|
|
$
|
1,240,853
|
|
|
$
|
1,185,346
|
|
|
$
|
1,099,512
|
|
|
$
|
1,084,927
|
|
|
$
|
1,067,353
|
|
Financial
Ratios
|
|
|
|
|
|
|
|
|
|
|
Return on average
assets
|
|
1.15
|
%
|
|
0.93
|
%
|
|
1.18
|
%
|
|
1.17
|
%
|
|
1.11
|
%
|
Return on average
common equity
|
|
7.86
|
%
|
|
6.39
|
%
|
|
7.86
|
%
|
|
7.83
|
%
|
|
7.45
|
%
|
Average equity to
average assets
|
|
14.59
|
%
|
|
14.54
|
%
|
|
14.99
|
%
|
|
15.01
|
%
|
|
14.94
|
%
|
Net interest margin
(tax equivalent)
|
|
4.39
|
%
|
|
4.50
|
%
|
|
4.85
|
%
|
|
4.86
|
%
|
|
4.85
|
%
|
Period
end
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
8,552,902
|
|
|
$
|
8,584,325
|
|
|
$
|
7,466,081
|
|
|
$
|
7,297,458
|
|
|
$
|
7,237,053
|
|
Loans, net of
unearned income
|
|
$
|
5,450,895
|
|
|
$
|
5,445,378
|
|
|
$
|
4,823,022
|
|
|
$
|
4,714,575
|
|
|
$
|
4,577,363
|
|
Allowance for loan
and lease losses
|
|
$
|
70,234
|
|
|
$
|
69,569
|
|
|
$
|
67,871
|
|
|
$
|
69,295
|
|
|
$
|
70,571
|
|
Securities, including
Federal Home Loan Bank stock
|
|
$
|
2,040,163
|
|
|
$
|
2,131,622
|
|
|
$
|
1,643,003
|
|
|
$
|
1,621,929
|
|
|
$
|
1,671,594
|
|
Deposits
|
|
$
|
7,074,965
|
|
|
$
|
6,924,722
|
|
|
$
|
6,244,401
|
|
|
$
|
5,985,069
|
|
|
$
|
6,044,416
|
|
Core
deposits
|
|
$
|
6,771,755
|
|
|
$
|
6,619,944
|
|
|
$
|
5,990,118
|
|
|
$
|
5,735,047
|
|
|
$
|
5,768,434
|
|
Shareholders'
equity
|
|
$
|
1,244,443
|
|
|
$
|
1,228,175
|
|
|
$
|
1,096,211
|
|
|
$
|
1,092,151
|
|
|
$
|
1,074,491
|
|
Nonperforming,
assets
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans
|
|
$
|
31,828
|
|
|
$
|
31,352
|
|
|
$
|
27,998
|
|
|
$
|
30,613
|
|
|
$
|
36,397
|
|
OREO and
OPPO
|
|
23,347
|
|
|
22,225
|
|
|
21,941
|
|
|
28,254
|
|
|
30,662
|
|
Total
nonperforming assets
|
|
$
|
55,175
|
|
|
$
|
53,577
|
|
|
$
|
49,939
|
|
|
$
|
58,867
|
|
|
$
|
67,059
|
|
Nonperforming loans
to period-end loans
|
|
0.58
|
%
|
|
0.58
|
%
|
|
0.58
|
%
|
|
0.65
|
%
|
|
0.80
|
%
|
Nonperforming assets
to period-end assets
|
|
0.65
|
%
|
|
0.62
|
%
|
|
0.67
|
%
|
|
0.81
|
%
|
|
0.93
|
%
|
Allowance for loan
and lease losses to period-end loans
|
|
1.29
|
%
|
|
1.28
|
%
|
|
1.41
|
%
|
|
1.47
|
%
|
|
1.54
|
%
|
Net loan
charge-offs
|
|
$
|
544
|
|
|
$
|
10
|
|
|
$
|
2,404
|
|
|
$
|
3,393
|
|
|
$
|
3,805
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
Columbia
Banking System, Inc.
|
|
Three Months
Ended
|
Unaudited
|
|
March
31,
|
|
|
2015
|
|
2014
|
|
|
(in thousands
except per share)
|
Interest
Income
|
|
|
|
|
Loans
|
|
$
|
70,822
|
|
|
$
|
65,541
|
|
Taxable
securities
|
|
7,526
|
|
|
6,752
|
|
Tax-exempt
securities
|
|
3,042
|
|
|
2,618
|
|
Deposits in
banks
|
|
27
|
|
|
14
|
|
Total interest
income
|
|
81,417
|
|
|
74,925
|
|
Interest
Expense
|
|
|
|
|
Deposits
|
|
748
|
|
|
752
|
|
Federal Home Loan
Bank advances
|
|
159
|
|
|
114
|
|
Other
borrowings
|
|
146
|
|
|
119
|
|
Total interest
expense
|
|
1,053
|
|
|
985
|
|
Net Interest
Income
|
|
80,364
|
|
|
73,940
|
|
Provision for loan
and lease losses
|
|
1,209
|
|
|
1,922
|
|
Net interest income
after provision for loan and lease losses
|
|
79,155
|
|
|
72,018
|
|
Noninterest
Income
|
|
|
|
|
Service charges and
other fees
|
|
14,869
|
|
|
12,936
|
|
Merchant services
fees
|
|
2,040
|
|
|
1,870
|
|
Investment securities
gains, net
|
|
721
|
|
|
223
|
|
Bank owned life
insurance
|
|
1,078
|
|
|
965
|
|
Change in FDIC
loss-sharing asset
|
|
150
|
|
|
(4,819)
|
|
Other
|
|
3,909
|
|
|
2,833
|
|
Total noninterest
income
|
|
22,767
|
|
|
14,008
|
|
Noninterest
Expense
|
|
|
|
|
Compensation and
employee benefits
|
|
39,100
|
|
|
31,338
|
|
Occupancy
|
|
7,993
|
|
|
8,244
|
|
Merchant
processing
|
|
977
|
|
|
980
|
|
Advertising and
promotion
|
|
931
|
|
|
769
|
|
Data processing and
communications
|
|
4,984
|
|
|
3,520
|
|
Legal and
professional fees
|
|
2,507
|
|
|
2,169
|
|
Taxes, licenses and
fees
|
|
1,232
|
|
|
1,180
|
|
Regulatory
premiums
|
|
1,221
|
|
|
1,176
|
|
Net cost (benefit) of
operation of other real estate
|
|
(1,246)
|
|
|
146
|
|
Amortization of
intangibles
|
|
1,817
|
|
|
1,580
|
|
Other
|
|
7,218
|
|
|
6,284
|
|
Total noninterest
expense
|
|
66,734
|
|
|
57,386
|
|
Income before income
taxes
|
|
35,188
|
|
|
28,640
|
|
Provision for income
taxes
|
|
10,827
|
|
|
8,796
|
|
Net
Income
|
|
$
|
24,361
|
|
|
$
|
19,844
|
|
Earnings per common
share
|
|
|
|
|
Basic
|
|
$
|
0.42
|
|
|
$
|
0.38
|
|
Diluted
|
|
$
|
0.42
|
|
|
$
|
0.37
|
|
Dividends paid per
common share
|
|
$
|
0.30
|
|
|
$
|
0.12
|
|
Weighted average
number of common shares outstanding
|
|
56,965
|
|
|
51,097
|
|
Weighted average
number of diluted common shares outstanding
|
|
56,978
|
|
|
52,433
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
Columbia
Banking System, Inc.
|
|
|
Unaudited
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
(in
thousands)
|
ASSETS
|
|
|
Cash and due from
banks
|
|
$
|
177,026
|
|
|
$
|
171,221
|
|
Interest-earning
deposits with banks
|
|
71,575
|
|
|
16,949
|
|
Total cash and
cash equivalents
|
|
248,601
|
|
|
188,170
|
|
Securities available
for sale at fair value (amortized cost of $1,981,977 and
$2,087,069, respectively)
|
|
2,007,159
|
|
|
2,098,257
|
|
Federal Home Loan
Bank stock at cost
|
|
33,004
|
|
|
33,365
|
|
Loans held for
sale
|
|
3,545
|
|
|
1,116
|
|
Loans, net of
unearned income of ($53,867) and ($59,374), respectively
|
|
5,450,895
|
|
|
5,445,378
|
|
Less:
allowance for loan and lease losses
|
|
70,234
|
|
|
69,569
|
|
Loans,
net
|
|
5,380,661
|
|
|
5,375,809
|
|
FDIC loss-sharing
asset
|
|
14,644
|
|
|
15,174
|
|
Interest
receivable
|
|
29,088
|
|
|
27,802
|
|
Premises and
equipment, net
|
|
172,958
|
|
|
172,090
|
|
Other real estate
owned
|
|
23,299
|
|
|
22,190
|
|
Goodwill
|
|
382,537
|
|
|
382,537
|
|
Other intangible
assets, net
|
|
28,642
|
|
|
30,459
|
|
Other
assets
|
|
228,764
|
|
|
231,877
|
|
Total
assets
|
|
$
|
8,552,902
|
|
|
$
|
8,578,846
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Deposits:
|
|
|
|
|
Noninterest-bearing
|
|
$
|
3,260,376
|
|
|
$
|
2,651,373
|
|
Interest-bearing
|
|
3,814,589
|
|
|
4,273,349
|
|
Total
deposits
|
|
7,074,965
|
|
|
6,924,722
|
|
Federal Home Loan
Bank advances
|
|
36,559
|
|
|
216,568
|
|
Securities sold under
agreements to repurchase
|
|
96,852
|
|
|
105,080
|
|
Other
borrowings
|
|
|
|
|
—
|
|
|
8,248
|
|
Other
liabilities
|
|
100,083
|
|
|
96,053
|
|
Total
liabilities
|
|
7,308,459
|
|
|
7,350,671
|
|
Commitments and
contingent liabilities
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
Preferred stock (no
par value)
|
(in
thousands)
|
|
|
|
|
Authorized
shares
|
2,000
|
|
|
2,000
|
|
|
|
|
|
Issued and
outstanding
|
9
|
|
|
9
|
|
|
2,217
|
|
|
2,217
|
|
Common stock (no par
value)
|
|
|
|
|
|
|
|
Authorized
shares
|
63,033
|
|
|
63,033
|
|
|
|
|
|
Issued and
outstanding
|
57,699
|
|
|
57,437
|
|
|
986,348
|
|
|
985,839
|
|
Retained
earnings
|
|
241,592
|
|
|
234,498
|
|
Accumulated other
comprehensive income
|
|
14,286
|
|
|
5,621
|
|
Total
shareholders' equity
|
|
1,244,443
|
|
|
1,228,175
|
|
Total
liabilities and shareholders' equity
|
|
$
|
8,552,902
|
|
|
$
|
8,578,846
|
|
AVERAGE
BALANCES AND RATES
|
|
|
|
|
|
|
Columbia
Banking System, Inc.
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
Three Months Ended
March 31,
|
|
|
2015
|
|
2014 (1)
|
|
|
Average
Balances
|
|
Interest
Earned / Paid
|
|
Average
Rate
|
|
Average
Balances
|
|
Interest
Earned / Paid
|
|
Average
Rate
|
|
|
(dollars in
thousands)
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, net
(1)(2)(3)
|
|
$
|
5,414,942
|
|
|
$
|
71,487
|
|
|
5.28
|
%
|
|
$
|
4,537,107
|
|
|
$
|
65,898
|
|
|
5.81
|
%
|
Taxable
securities
|
|
1,609,323
|
|
|
7,526
|
|
|
1.87
|
%
|
|
1,329,679
|
|
|
6,752
|
|
|
2.03
|
%
|
Tax exempt securities
(3)
|
|
459,483
|
|
|
4,680
|
|
|
4.07
|
%
|
|
352,691
|
|
|
4,109
|
|
|
4.66
|
%
|
Interest-earning
deposits with banks
|
|
45,292
|
|
|
27
|
|
|
0.24
|
%
|
|
25,215
|
|
|
14
|
|
|
0.23
|
%
|
Total
interest-earning assets
|
|
7,529,040
|
|
|
$
|
83,720
|
|
|
4.45
|
%
|
|
6,244,692
|
|
|
$
|
76,773
|
|
|
4.92
|
%
|
Other earning
assets
|
|
146,055
|
|
|
|
|
|
|
126,924
|
|
|
|
|
|
Noninterest-earning
assets
|
|
830,681
|
|
|
|
|
|
|
772,143
|
|
|
|
|
|
Total
assets
|
|
$
|
8,505,776
|
|
|
|
|
|
|
$
|
7,143,759
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
Certificates of
deposit
|
|
$
|
502,287
|
|
|
$
|
240
|
|
|
0.19
|
%
|
|
$
|
503,129
|
|
|
$
|
362
|
|
|
0.29
|
%
|
Savings
accounts
|
|
625,132
|
|
|
19
|
|
|
0.01
|
%
|
|
513,911
|
|
|
13
|
|
|
0.01
|
%
|
Interest-bearing
demand
|
|
1,214,149
|
|
|
138
|
|
|
0.05
|
%
|
|
1,168,708
|
|
|
109
|
|
|
0.04
|
%
|
Money market
accounts
|
|
1,815,923
|
|
|
351
|
|
|
0.08
|
%
|
|
1,586,622
|
|
|
268
|
|
|
0.07
|
%
|
Total
interest-bearing deposits
|
|
4,157,491
|
|
|
748
|
|
|
0.07
|
%
|
|
3,772,370
|
|
|
752
|
|
|
0.08
|
%
|
Federal Home Loan
Bank advances
|
|
129,841
|
|
|
159
|
|
|
0.49
|
%
|
|
70,690
|
|
|
114
|
|
|
0.65
|
%
|
Other
borrowings
|
|
108,170
|
|
|
146
|
|
|
0.54
|
%
|
|
25,000
|
|
|
119
|
|
|
1.90
|
%
|
Total
interest-bearing liabilities
|
|
4,395,502
|
|
|
$
|
1,053
|
|
|
0.10
|
%
|
|
3,868,060
|
|
|
$
|
985
|
|
|
0.10
|
%
|
Noninterest-bearing
deposits
|
|
2,770,265
|
|
|
|
|
|
|
2,129,468
|
|
|
|
|
|
Other
noninterest-bearing liabilities
|
|
99,156
|
|
|
|
|
|
|
78,878
|
|
|
|
|
|
Shareholders'
equity
|
|
1,240,853
|
|
|
|
|
|
|
1,067,353
|
|
|
|
|
|
Total
liabilities & shareholders' equity
|
|
$
|
8,505,776
|
|
|
|
|
|
|
$
|
7,143,759
|
|
|
|
|
|
Net interest income
(tax equivalent)
|
|
$
|
82,667
|
|
|
|
|
|
|
$
|
75,788
|
|
|
|
Net interest margin
(tax equivalent)
|
|
4.39
|
%
|
|
|
|
|
|
4.85
|
%
|
|
|
(1)
|
Adjusted to conform
to the current period presentation. The adjustment was limited to
including amounts historically disclosed as "Covered loans" in
"Loans, net".
|
|
|
(2)
|
Nonaccrual loans have
been included in the tables as loans carrying a zero yield.
Amortized net deferred loan fees and net unearned discounts on
certain acquired loans were included in the interest income
calculations. The amortization of net deferred loan fees was $1.1
million and $983 thousand for the three months ended March 31, 2015
and 2014, respectively. The incremental accretion on acquired loans
was $7.5 million and $12.3 million for the three months ended March
31, 2015 and 2014, respectively.
|
|
|
(3)
|
Yields on a fully tax
equivalent basis. The tax equivalent yield adjustment to interest
earned on loans was $665 thousand and $357 thousand for the three
months ended March 31, 2015 and 2014, respectively. The tax
equivalent yield adjustment to interest earned on tax exempt
securities was $1.6 million and $1.5 million for the three months
ended March 31, 2015 and 2014, respectively.
|
Non-GAAP Financial Measures
The Company considers its operating net interest margin and
operating efficiency ratios to be important measurements as they
more closely reflect the ongoing operating performance of the
Company. Despite the importance of the operating net interest
margin and operating efficiency ratio to the Company, there are no
standardized definitions for them and, as a result, the Company's
calculations may not be comparable with other organizations. Also,
there may be limits in the usefulness of these measure to
investors. As a result, the Company encourages readers to consider
its consolidated financial statements in their entirety and not to
rely on any single financial measure.
The following tables reconcile the Company's calculation of the
operating net interest margin and operating efficiency ratio:
|
|
Three Months Ended
March 31,
|
|
|
2015
|
|
2014
|
Operating net
interest margin non-GAAP reconciliation:
|
|
(dollars in
thousands)
|
Net interest income
(tax equivalent) (1)
|
|
$
|
82,667
|
|
|
$
|
75,788
|
|
Adjustments to arrive
at operating net interest income (tax equivalent):
|
|
|
|
|
Incremental accretion
income on FDIC purchased credit impaired loans
|
|
(2,447)
|
|
|
(6,489)
|
|
Incremental accretion
income on other FDIC acquired loans
|
|
(117)
|
|
|
(204)
|
|
Incremental accretion
income on other acquired loans
|
|
(4,934)
|
|
|
(5,615)
|
|
Premium amortization
on acquired securities
|
|
2,861
|
|
|
1,625
|
|
Interest reversals on
nonaccrual loans
|
|
650
|
|
|
287
|
|
Operating net
interest income (tax equivalent) (1)
|
|
$
|
78,680
|
|
|
$
|
65,392
|
|
Average interest
earning assets
|
|
$
|
7,529,040
|
|
|
$
|
6,244,692
|
|
Net interest margin
(tax equivalent) (1)
|
|
4.39
|
%
|
|
4.85
|
%
|
Operating net
interest margin (tax equivalent) (1)
|
|
4.18
|
%
|
|
4.19
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2015
|
|
2014
|
Operating
efficiency ratio non-GAAP reconciliation:
|
|
(dollars in
thousands)
|
Noninterest expense
(numerator A)
|
|
$
|
66,734
|
|
|
$
|
57,386
|
|
Adjustments to arrive
at operating noninterest expense:
|
|
|
|
|
Acquisition-related
expenses
|
|
(2,974)
|
|
|
(966)
|
|
Net benefit (cost) of
operation of OREO and OPPO
|
|
1,241
|
|
|
(22)
|
|
FDIC clawback
liability expense
|
|
(23)
|
|
|
(204)
|
|
Loss on asset
disposals
|
|
(96)
|
|
|
(20)
|
|
State of Washington
Business and Occupation ("B&O") taxes
|
|
(1,129)
|
|
|
(1,075)
|
|
Operating noninterest
expense (numerator B)
|
|
$
|
63,753
|
|
|
$
|
55,099
|
|
|
|
|
|
|
Net interest income
(tax equivalent) (1)
|
|
$
|
82,667
|
|
|
$
|
75,788
|
|
Noninterest
income
|
|
22,767
|
|
|
14,008
|
|
Bank owned life
insurance tax equivalent adjustment
|
|
581
|
|
|
550
|
|
Total revenue (tax
equivalent) (denominator A)
|
|
$
|
106,015
|
|
|
$
|
90,346
|
|
|
|
|
|
|
Operating net
interest income (tax equivalent) (1)
|
|
$
|
78,680
|
|
|
$
|
65,392
|
|
Adjustments to arrive
at operating noninterest income (tax equivalent):
|
|
|
|
|
Investment securities
gains, net
|
|
(721)
|
|
|
(223)
|
|
Gain on asset
disposals
|
|
—
|
|
|
(32)
|
|
Change in FDIC
loss-sharing asset
|
|
(150)
|
|
|
4,819
|
|
Operating noninterest
income (tax equivalent)
|
|
22,477
|
|
|
19,122
|
|
Total operating
revenue (tax equivalent) (denominator B)
|
|
$
|
101,157
|
|
|
$
|
84,514
|
|
Efficiency ratio (tax
equivalent) (numerator A/denominator A)
|
|
62.95
|
%
|
|
63.52
|
%
|
Operating efficiency
ratio (tax equivalent) (numerator B/denominator B)
|
|
63.02
|
%
|
|
65.20
|
%
|
|
__________
|
(1)
|
Tax-exempt interest
income has been adjusted to a tax equivalent basis. The amount of
such adjustment was an addition to net interest income of $2.3
million and $1.8 million for the three months
ended March 31, 2015 and 2014,
respectively.
|
Non-GAAP Financial Measures - Continued
The Company considers its ratio of allowance for loan and lease
losses to period-end loans, excluding acquired loans to be an
important measurement because it more closely reflects the ongoing
allowance coverage and provides a ratio that is more comparable to
other bank holding companies that have not had similar
acquisitions. Despite the importance of this ratio to the Company,
there are no standardized definitions for it and, as a result, the
Company's calculations may not be comparable with other
organizations. Also, there may be limits in the usefulness of this
measure to investors. As a result, the Company encourages readers
to consider its consolidated financial statements in their entirety
and not to rely on any single financial measure.
The following table reconciles the Company's calculation of the
allowance for loan and lease losses to period-end loans, excluding
acquired loans:
|
|
March
31,
|
|
December
31,
|
|
|
2015
|
|
2014
|
|
|
(dollars in
thousands)
|
Allowance for loan
and lease losses (numerator A)
|
|
$
|
70,234
|
|
|
$
|
69,569
|
|
Less: Allowance for
loan and lease losses attributable to acquired loans
|
|
(24,100)
|
|
|
(23,212)
|
|
Equals: Allowance for
loan and lease losses, excluding acquired loans (numerator
B)
|
|
$
|
46,134
|
|
|
46,357
|
|
|
|
|
|
|
Loans, net of
unearned income (denominator A)
|
|
$
|
5,450,895
|
|
|
$
|
5,445,378
|
|
Less: acquired loans,
net
|
|
(1,519,334)
|
|
|
(1,615,496)
|
|
Equals: Loans,
excluding acquired loans, net of unearned income (denominator
B)
|
|
$
|
3,931,561
|
|
|
$
|
3,829,882
|
|
|
|
|
|
|
Allowance for loan
and lease losses to period-end loans (numerator A/denominator
A)
|
|
1.29
|
%
|
|
1.28
|
%
|
Allowance for loan
and lease losses to period-end loans, excluding acquired loans
(numerator B/denominator B)
|
|
1.17
|
%
|
|
1.21
|
%
|
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SOURCE Columbia Banking System