Washington | 0-20288 | 91-1422237 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
1301 A Street Tacoma, WA | 98402 | |||
(Address of principal executive offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1 | Press Release dated April 23, 2014 reporting the financial results of Columbia Banking System, Inc. for the quarter ended March 31, 2014. |
99.2 | Press Release dated April 23, 2014 announcing a regular quarterly dividend and a special, one-time cash dividend. |
COLUMBIA BANKING SYSTEM, INC. | |||||
Date: | April 24, 2014 | /s/ MELANIE J. DRESSEL | |||
Melanie J. Dressel | |||||
President and Chief Executive Officer |
99.1 | Press Release dated April 23, 2014 reporting the financial results of Columbia Banking System, Inc. for the quarter ended March 31, 2014. |
99.2 | Press Release dated April 23, 2014 announcing a regular quarterly dividend and a special, one-time cash dividend. |
• | Net income of $19.8 million and diluted earnings per share of $0.37, net of a reduction in net income of $1.1 million, or $0.03 per diluted share, associated with acquisition-related expenses and FDIC acquired loan accounting. |
• | New loan production of over $210 million during the quarter |
• | Nonperforming assets to period end noncovered assets reduced to 0.75%, a decrease of 9 basis points from year-end |
• | Solid core deposits at 96% of total deposits |
March 31, 2014 | December 31, 2013 | |||||||
(dollars in thousands) | ||||||||
Nonaccrual noncovered loans: | ||||||||
Commercial business | $ | 14,541 | $ | 12,609 | ||||
Real estate: | ||||||||
One-to-four family residential | 2,900 | 2,667 | ||||||
Commercial and multifamily residential | 11,050 | 11,043 | ||||||
Total real estate | 13,950 | 13,710 | ||||||
Real estate construction: | ||||||||
One-to-four family residential | 3,026 | 3,705 | ||||||
Total real estate construction | 3,026 | 3,705 | ||||||
Consumer | 4,880 | 3,991 | ||||||
Total nonaccrual loans | 36,397 | 34,015 | ||||||
Noncovered other real estate owned and other personal property owned | 15,924 | 23,918 | ||||||
Total nonperforming noncovered assets | $ | 52,321 | $ | 57,933 |
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Beginning balance | $ | 52,280 | $ | 52,244 | ||||
Charge-offs: | ||||||||
Commercial business | (233 | ) | (1,314 | ) | ||||
One-to-four family residential real estate | (207 | ) | (116 | ) | ||||
Commercial and multifamily residential real estate | (1,023 | ) | (783 | ) | ||||
One-to-four family residential real estate construction | — | (133 | ) | |||||
Consumer | (727 | ) | (171 | ) | ||||
Total charge-offs | (2,190 | ) | (2,517 | ) | ||||
Recoveries: | ||||||||
Commercial business | 490 | 113 | ||||||
One-to-four family residential real estate | 28 | — | ||||||
Commercial and multifamily residential real estate | 39 | 93 | ||||||
One-to-four family residential real estate construction | 42 | 2,139 | ||||||
Consumer | 253 | 47 | ||||||
Total recoveries | 852 | 2,392 | ||||||
Net charge-offs | (1,338 | ) | (125 | ) | ||||
Recapture of provision for loan and lease losses | (500 | ) | (1,000 | ) | ||||
Ending balance | $ | 50,442 | $ | 51,119 |
Three Months Ended | ||||||||
March 31, 2014 | March 31, 2013 | |||||||
(dollars in thousands) | ||||||||
Incremental accretion income due to: | ||||||||
FDIC acquired impaired loans | $ | 6,489 | $ | 8,375 | ||||
Other FDIC acquired loans | 204 | 1,070 | ||||||
Other acquired loans | 5,615 | — | ||||||
Incremental accretion income | $ | 12,308 | $ | 9,445 | ||||
Reported net interest margin | 4.85 | % | 5.06 | % | ||||
Operating net interest margin (1) | 4.19 | % | 4.21 | % |
FDIC Acquired Loan Activity | ||||||||
Three Months Ended | ||||||||
March 31, 2014 | March 31, 2013 | |||||||
(in thousands) | ||||||||
Incremental accretion income on FDIC acquired impaired loans | $ | 6,489 | $ | 8,375 | ||||
Incremental accretion income on other FDIC acquired loans | 204 | 1,070 | ||||||
Recapture (provision) for losses on covered loans | (2,422 | ) | (980 | ) | ||||
Change in FDIC loss-sharing asset | (4,819 | ) | (10,483 | ) | ||||
Claw back liability expense | (204 | ) | (231 | ) | ||||
Pre-tax earnings impact | $ | (752 | ) | $ | (2,249 | ) |
Three Months Ended | ||||||||
March 31, | ||||||||
2014 | 2013 | |||||||
(in thousands) | ||||||||
Adjustments reflected in income | ||||||||
Amortization, net | (6,452 | ) | (9,779 | ) | ||||
Loan impairment | 1,938 | 784 | ||||||
Sale of other real estate | (756 | ) | (1,346 | ) | ||||
Write-downs of other real estate | 516 | 52 | ||||||
Other | (65 | ) | (194 | ) | ||||
Change in FDIC loss-sharing asset | $ | (4,819 | ) | $ | (10,483 | ) |
FINANCIAL STATISTICS | |||||||||||||
Columbia Banking System, Inc. | Three Months Ended | ||||||||||||
Unaudited | March 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Earnings | (dollars in thousands except per share amounts) | ||||||||||||
Net interest income | $ | 73,940 | $ | 53,482 | |||||||||
Recapture of provision for loan and lease losses | $ | (500 | ) | $ | (1,000 | ) | |||||||
Provision for losses on covered loans, net (1) | $ | 2,422 | $ | 980 | |||||||||
Noninterest income | $ | 14,008 | $ | 1,658 | |||||||||
Noninterest expense | $ | 57,386 | $ | 38,049 | |||||||||
Acquisition-related expense (included in noninterest expense) | $ | 966 | $ | 723 | |||||||||
Net income | $ | 19,844 | $ | 12,176 | |||||||||
Per Common Share | |||||||||||||
Earnings (basic) | $ | 0.38 | $ | 0.31 | |||||||||
Earnings (diluted) | $ | 0.37 | $ | 0.31 | |||||||||
Book value | $ | 20.39 | $ | 19.32 | |||||||||
Averages | |||||||||||||
Total assets | $ | 7,143,759 | $ | 4,851,044 | |||||||||
Interest-earning assets | $ | 6,244,692 | $ | 4,336,978 | |||||||||
Loans, including covered loans | $ | 4,537,107 | $ | 2,962,559 | |||||||||
Securities | $ | 1,682,370 | $ | 1,051,657 | |||||||||
Deposits | $ | 5,901,838 | $ | 3,990,127 | |||||||||
Core deposits | $ | 5,637,926 | $ | 3,741,086 | |||||||||
Interest-bearing deposits | $ | 3,772,370 | $ | 2,740,100 | |||||||||
Interest-bearing liabilities | $ | 3,868,060 | $ | 2,771,743 | |||||||||
Noninterest-bearing deposits | $ | 2,129,468 | $ | 1,250,027 | |||||||||
Shareholders' equity | $ | 1,067,353 | $ | 768,390 | |||||||||
Financial Ratios | |||||||||||||
Return on average assets | 1.11 | % | 1.02 | % | |||||||||
Return on average common equity | 7.45 | % | 6.43 | % | |||||||||
Average equity to average assets | 14.94 | % | 15.84 | % | |||||||||
Net interest margin | 4.85 | % | 5.06 | % | |||||||||
Efficiency ratio (tax equivalent)(2) | 66.49 | % | 68.68 | % | |||||||||
March 31, | December 31, | ||||||||||||
Period end | 2014 | 2013 | 2013 | ||||||||||
Total assets | $ | 7,237,053 | $ | 4,905,011 | $ | 7,161,582 | |||||||
Covered assets, net | $ | 274,896 | $ | 377,024 | $ | 289,790 | |||||||
Loans, excluding covered loans, net | $ | 4,297,076 | $ | 2,621,212 | $ | 4,219,451 | |||||||
Allowance for noncovered loan and lease losses | $ | 50,442 | $ | 51,119 | $ | 52,280 | |||||||
Securities | $ | 1,671,594 | $ | 1,033,783 | $ | 1,696,640 | |||||||
Deposits | $ | 6,044,416 | $ | 4,046,539 | $ | 5,959,475 | |||||||
Core deposits | $ | 5,768,434 | $ | 3,796,574 | $ | 5,696,357 | |||||||
Shareholders' equity | $ | 1,074,491 | $ | 769,660 | $ | 1,053,249 | |||||||
Nonperforming, noncovered assets | |||||||||||||
Nonaccrual loans | $ | 36,397 | $ | 32,886 | $ | 34,015 | |||||||
Other real estate owned ("OREO") and other personal property owned ("OPPO") | 15,924 | 12,000 | 23,918 | ||||||||||
Total nonperforming, noncovered assets | $ | 52,321 | $ | 44,886 | $ | 57,933 | |||||||
Nonperforming assets to period-end noncovered loans + OREO and OPPO | 1.21 | % | 1.70 | % | 1.37 | % | |||||||
Nonperforming loans to period-end noncovered loans | 0.85 | % | 1.25 | % | 0.81 | % | |||||||
Nonperforming assets to period-end noncovered assets | 0.75 | % | 0.99 | % | 0.84 | % | |||||||
Allowance for loan and lease losses to period-end noncovered loans | 1.17 | % | 1.95 | % | 1.24 | % | |||||||
Allowance for loan and lease losses to nonperforming noncovered loans | 138.59 | % | 155.44 | % | 153.70 | % | |||||||
Net noncovered loan charge-offs | $ | 1,338 | (3) | $ | 125 | (4) | $ | 3,124 | (5) | ||||
(1) Provision(recapture) for losses on covered loans was partially offset by $1.9 million and $784 thousand in income recorded to Change in FDIC loss-sharing asset in the Consolidated Statements of Income for the three months ended March 31, 2014 and 2013, respectively. | |||||||||||||
(2) Noninterest expense, excluding net benefit of operation of other real estate and other personal property, FDIC clawback liability and acquisition-related expenses, divided by the sum of (1)net interest income on a tax equivalent basis, excluding incremental accretion income on the acquired loan portfolio, premium amortization on acquired securities, interest reversals on nonaccrual loans, and prepayment expenses on FHLB advances, and (2)noninterest income on a tax equivalent basis, excluding gain/loss on investment securities and the change in FDIC loss-sharing asset. | |||||||||||||
(3) For the three months ended March 31, 2014. | |||||||||||||
(4) For the three months ended March 31, 2013. | |||||||||||||
(5) For the twelve months ended December 31, 2013. |
FINANCIAL STATISTICS | ||||||||||||||
Columbia Banking System, Inc. | ||||||||||||||
Unaudited | March 31, | December 31, | ||||||||||||
2014 | 2013 | |||||||||||||
Loan Portfolio Composition | (dollars in thousands) | |||||||||||||
Noncovered loans: | ||||||||||||||
Commercial business | $ | 1,601,676 | 37.3 | % | $ | 1,561,782 | 37.0 | % | ||||||
Real estate: | ||||||||||||||
One-to-four family residential | 105,141 | 2.4 | % | 108,317 | 2.6 | % | ||||||||
Commercial and multifamily residential | 2,113,609 | 49.3 | % | 2,080,075 | 49.2 | % | ||||||||
Total real estate | 2,218,750 | 51.7 | % | 2,188,392 | 51.8 | % | ||||||||
Real estate construction: | ||||||||||||||
One-to-four family residential | 57,310 | 1.3 | % | 54,155 | 1.3 | % | ||||||||
Commercial and multifamily residential | 130,809 | 3.0 | % | 126,390 | 3.0 | % | ||||||||
Total real estate construction | 188,119 | 4.3 | % | 180,545 | 4.3 | % | ||||||||
Consumer | 351,255 | 8.2 | % | 357,014 | 8.5 | % | ||||||||
Subtotal loans | 4,359,800 | 101.5 | % | 4,287,733 | 101.6 | % | ||||||||
Less: Net unearned income | (62,724 | ) | (1.5 | )% | (68,282 | ) | (1.6 | )% | ||||||
Total noncovered loans, net of unearned income | 4,297,076 | 100.0 | % | 4,219,451 | 100.0 | % | ||||||||
Less: Allowance for loan and lease losses | (50,442 | ) | (52,280 | ) | ||||||||||
Noncovered loans, net | 4,246,634 | 4,167,171 | ||||||||||||
Covered loans, net of allowance for loan losses of ($20,129) and ($20,174), respectively | 260,158 | 277,671 | ||||||||||||
Total loans, net | $ | 4,506,792 | $ | 4,444,842 | ||||||||||
Loans held for sale | $ | — | $ | 735 | ||||||||||
March 31, | December 31, | |||||||||||||
2014 | 2013 | |||||||||||||
Deposit Composition | (dollars in thousands) | |||||||||||||
Core deposits: | ||||||||||||||
Demand and other non-interest bearing | $ | 2,225,212 | 36.8 | % | $ | 2,171,703 | 36.4 | % | ||||||
Interest bearing demand | 1,188,109 | 19.7 | % | 1,170,006 | 19.6 | % | ||||||||
Money market | 1,545,802 | 25.6 | % | 1,569,261 | 26.3 | % | ||||||||
Savings | 530,112 | 8.8 | % | 496,444 | 8.3 | % | ||||||||
Certificates of deposit less than $100,000 | 279,199 | 4.6 | % | 288,943 | 4.9 | % | ||||||||
Total core deposits | 5,768,434 | 95.5 | % | 5,696,357 | 95.5 | % | ||||||||
Certificates of deposit greater than $100,000 | 191,175 | 3.1 | % | 201,498 | 3.5 | % | ||||||||
Certificates of deposit insured by CDARS® | 19,380 | 0.3 | % | 19,488 | 0.3 | % | ||||||||
Brokered money market accounts | 65,138 | 1.1 | % | 41,765 | 0.7 | % | ||||||||
Subtotal | 6,044,127 | 100.0 | % | 5,959,108 | 100.0 | % | ||||||||
Premium resulting from acquisition date fair value adjustment | 289 | 367 | ||||||||||||
Total deposits | $ | 6,044,416 | $ | 5,959,475 |
FINANCIAL STATISTICS | ||||||||||||||||
Columbia Banking System, Inc. | ||||||||||||||||
Unaudited | ||||||||||||||||
March 31, | December 31, | |||||||||||||||
2014 | 2013 | |||||||||||||||
OREO | OPPO | OREO | OPPO | |||||||||||||
OREO and OPPO Composition | (in thousands) | |||||||||||||||
Covered | $ | 14,712 | $ | 26 | $ | 12,093 | $ | 26 | ||||||||
Noncovered | 15,840 | 84 | 23,834 | 84 | ||||||||||||
Total | $ | 30,552 | $ | 110 | $ | 35,927 | $ | 110 | ||||||||
Three Months Ended | ||||||||||||||||
March 31, | ||||||||||||||||
2014 | 2013 | |||||||||||||||
OREO and OPPO Earnings Impact | (in thousands) | |||||||||||||||
Net cost (benefit) of operation of noncovered OREO | $ | 327 | $ | (54 | ) | |||||||||||
Net benefit of operation of covered OREO | (181 | ) | (2,447 | ) | ||||||||||||
Net cost (benefit) of operation of OREO | $ | 146 | $ | (2,501 | ) | |||||||||||
Noncovered OPPO benefit, net | $ | (125 | ) | $ | (104 | ) | ||||||||||
Covered OPPO cost, net | 1 | — | ||||||||||||||
OPPO benefit, net (1) | $ | (124 | ) | $ | (104 | ) | ||||||||||
(1) OPPO benefit, net is included in Other noninterest expense in the Consolidated Statements of Income. |
Three Months Ended | ||||||||||||||||||||
March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||||
2014 | 2013 | 2013 | 2013 | 2013 | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Expense to pre-tax earnings (1) | $ | (752 | ) | $ | (1,248 | ) | $ | (3,362 | ) | $ | (3,149 | ) | $ | (2,249 | ) | |||||
Balance sheet components: | ||||||||||||||||||||
Covered loans, net of allowance | $ | 260,158 | $ | 277,671 | $ | 302,160 | $ | 338,661 | $ | 363,213 | ||||||||||
Covered OREO | 14,712 | 12,093 | 12,730 | 12,854 | 13,811 | |||||||||||||||
FDIC loss-sharing asset | 36,837 | 39,846 | 53,559 | 67,374 | 83,115 | |||||||||||||||
(1) For details of the components of expense to pre-tax earnings related to FDIC acquired loan accounting, see previous table entitled "FDIC Acquired Loan Activity." |
QUARTERLY FINANCIAL STATISTICS | ||||||||||||||||||||
Columbia Banking System, Inc. | Three Months Ended | |||||||||||||||||||
Unaudited | March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
2014 | 2013 | 2013 | 2013 | 2013 | ||||||||||||||||
(dollars in thousands except per share) | ||||||||||||||||||||
Earnings | ||||||||||||||||||||
Net interest income | $ | 73,940 | $ | 77,209 | $ | 80,415 | $ | 79,989 | $ | 53,482 | ||||||||||
Provision (recapture) for loan and lease losses | $ | (500 | ) | $ | (2,100 | ) | $ | 4,260 | $ | 2,000 | $ | (1,000 | ) | |||||||
Provision (recapture) for losses on covered loans | $ | 2,422 | $ | (1,582 | ) | $ | (947 | ) | $ | (1,712 | ) | $ | 980 | |||||||
Noninterest income | $ | 14,008 | $ | 10,612 | $ | 7,622 | $ | 6,808 | $ | 1,658 | ||||||||||
Noninterest expense | $ | 57,386 | $ | 63,619 | $ | 64,714 | $ | 64,504 | $ | 38,049 | ||||||||||
Acquisition-related expense (included in noninterest expense) | $ | 966 | $ | 7,910 | $ | 7,621 | $ | 9,234 | $ | 723 | ||||||||||
Net income | $ | 19,844 | $ | 19,973 | $ | 13,276 | $ | 14,591 | $ | 12,176 | ||||||||||
Per Common Share | ||||||||||||||||||||
Earnings (basic) | $ | 0.38 | $ | 0.39 | $ | 0.26 | $ | 0.28 | $ | 0.31 | ||||||||||
Earnings (diluted) | $ | 0.37 | $ | 0.38 | $ | 0.25 | $ | 0.28 | $ | 0.31 | ||||||||||
Book value | $ | 20.39 | $ | 20.50 | $ | 20.35 | $ | 20.07 | $ | 19.32 | ||||||||||
Averages | ||||||||||||||||||||
Total assets | $ | 7,143,759 | $ | 7,192,084 | $ | 7,048,864 | $ | 7,110,957 | $ | 4,851,044 | ||||||||||
Interest-earning assets | $ | 6,244,692 | $ | 6,269,894 | $ | 6,101,960 | $ | 6,284,281 | $ | 4,336,978 | ||||||||||
Loans, including covered loans | $ | 4,537,107 | $ | 4,504,587 | $ | 4,504,040 | $ | 4,571,181 | $ | 2,962,559 | ||||||||||
Securities | $ | 1,682,370 | $ | 1,662,720 | $ | 1,512,292 | $ | 1,665,180 | $ | 1,051,657 | ||||||||||
Deposits | $ | 5,901,838 | $ | 6,003,657 | $ | 5,837,018 | $ | 5,824,802 | $ | 3,990,127 | ||||||||||
Core deposits | $ | 5,637,926 | $ | 5,735,099 | $ | 5,558,246 | $ | 5,526,238 | $ | 3,741,086 | ||||||||||
Interest-bearing deposits | $ | 3,772,370 | $ | 3,839,060 | $ | 3,805,260 | $ | 3,986,581 | $ | 2,740,100 | ||||||||||
Interest-bearing liabilities | $ | 3,868,060 | $ | 3,886,126 | $ | 3,898,997 | $ | 4,161,095 | $ | 2,771,743 | ||||||||||
Noninterest-bearing deposits | $ | 2,129,468 | $ | 2,164,597 | $ | 2,031,758 | $ | 1,838,221 | $ | 1,250,027 | ||||||||||
Shareholders' equity | $ | 1,067,353 | $ | 1,056,694 | $ | 1,036,134 | $ | 1,051,380 | $ | 768,390 | ||||||||||
Financial Ratios | ||||||||||||||||||||
Return on average assets | 1.11 | % | 1.11 | % | 0.75 | % | 0.82 | % | 1.02 | % | ||||||||||
Return on average common equity | 7.45 | % | 7.57 | % | 5.13 | % | 5.56 | % | 6.43 | % | ||||||||||
Average equity to average assets | 14.94 | % | 14.69 | % | 14.70 | % | 14.79 | % | 15.84 | % | ||||||||||
Net interest margin | 4.85 | % | 5.03 | % | 5.37 | % | 5.19 | % | 5.06 | % | ||||||||||
Efficiency ratio (tax equivalent) | 66.49 | % | 64.83 | % | 66.59 | % | 65.54 | % | 68.68 | % | ||||||||||
Period end | ||||||||||||||||||||
Total assets | $ | 7,237,053 | $ | 7,161,582 | $ | 7,150,297 | $ | 7,070,465 | $ | 4,905,011 | ||||||||||
Covered assets, net | $ | 274,896 | $ | 289,790 | $ | 314,898 | $ | 351,545 | $ | 377,024 | ||||||||||
Loans, excluding covered loans, net | $ | 4,297,076 | $ | 4,219,451 | $ | 4,193,732 | $ | 4,181,018 | $ | 2,621,212 | ||||||||||
Allowance for noncovered loan and lease losses | $ | 50,442 | $ | 52,280 | $ | 55,844 | $ | 51,698 | $ | 51,119 | ||||||||||
Securities | $ | 1,671,594 | $ | 1,696,640 | $ | 1,602,484 | $ | 1,541,039 | $ | 1,033,783 | ||||||||||
Deposits | $ | 6,044,416 | $ | 5,959,475 | $ | 5,948,967 | $ | 5,747,861 | $ | 4,046,539 | ||||||||||
Core deposits | $ | 5,768,434 | $ | 5,696,357 | $ | 5,662,958 | $ | 5,467,899 | $ | 3,796,574 | ||||||||||
Shareholders' equity | $ | 1,074,491 | $ | 1,053,249 | $ | 1,045,797 | $ | 1,030,674 | $ | 769,660 | ||||||||||
Nonperforming, noncovered assets | ||||||||||||||||||||
Nonaccrual loans | $ | 36,397 | $ | 34,015 | $ | 35,961 | $ | 43,610 | $ | 32,886 | ||||||||||
OREO and OPPO | 15,924 | 23,918 | 23,641 | 24,423 | 12,000 | |||||||||||||||
Total nonperforming, noncovered assets | $ | 52,321 | $ | 57,933 | $ | 59,602 | $ | 68,033 | $ | 44,886 | ||||||||||
Nonperforming assets to period-end noncovered loans + OREO and OPPO | 1.21 | % | 1.37 | % | 1.41 | % | 1.62 | % | 1.70 | % | ||||||||||
Nonperforming loans to period-end noncovered loans | 0.85 | % | 0.81 | % | 0.86 | % | 1.04 | % | 1.25 | % | ||||||||||
Nonperforming assets to period-end noncovered assets | 0.75 | % | 0.84 | % | 0.87 | % | 1.01 | % | 0.99 | % | ||||||||||
Allowance for loan and lease losses to period-end noncovered loans | 1.17 | % | 1.24 | % | 1.33 | % | 1.24 | % | 1.95 | % | ||||||||||
Allowance for loan and lease losses to nonperforming noncovered loans | 138.59 | % | 153.70 | % | 155.29 | % | 118.55 | % | 155.44 | % | ||||||||||
Net noncovered loan charge-offs | $ | 1,338 | $ | 1,464 | $ | 114 | $ | 1,421 | $ | 125 |
CONSOLIDATED STATEMENTS OF INCOME | ||||||||
Columbia Banking System, Inc. | Three Months Ended | |||||||
Unaudited | March 31, | |||||||
2014 | 2013 | |||||||
(in thousands except per share) | ||||||||
Interest Income | ||||||||
Loans | $ | 65,541 | $ | 48,028 | ||||
Taxable securities | 6,752 | 4,234 | ||||||
Tax-exempt securities | 2,618 | 2,298 | ||||||
Federal funds sold and deposits in banks | 14 | 201 | ||||||
Total interest income | 74,925 | 54,761 | ||||||
Interest Expense | ||||||||
Deposits | 752 | 1,089 | ||||||
Federal Home Loan Bank advances | 114 | 71 | ||||||
Other borrowings | 119 | 119 | ||||||
Total interest expense | 985 | 1,279 | ||||||
Net Interest Income | 73,940 | 53,482 | ||||||
Recapture of provision for loan and lease losses | (500 | ) | (1,000 | ) | ||||
Provision for losses on covered loans, net | 2,422 | 980 | ||||||
Net interest income after provision (recapture) for loan and lease losses | 72,018 | 53,502 | ||||||
Noninterest Income | ||||||||
Service charges and other fees | 12,936 | 7,594 | ||||||
Merchant services fees | 1,870 | 1,851 | ||||||
Investment securities gains, net | 223 | 370 | ||||||
Bank owned life insurance | 965 | 698 | ||||||
Change in FDIC loss-sharing asset | (4,819 | ) | (10,483 | ) | ||||
Other | 2,833 | 1,628 | ||||||
Total noninterest income | 14,008 | 1,658 | ||||||
Noninterest Expense | ||||||||
Compensation and employee benefits | 31,338 | 21,653 | ||||||
Occupancy | 8,244 | 4,753 | ||||||
Merchant processing | 980 | 857 | ||||||
Advertising and promotion | 769 | 870 | ||||||
Data processing and communications | 3,520 | 2,580 | ||||||
Legal and professional fees | 2,169 | 2,050 | ||||||
Taxes, licenses and fees | 1,180 | 1,387 | ||||||
Regulatory premiums | 1,176 | 857 | ||||||
Net cost (benefit) of operation of other real estate | 146 | (2,501 | ) | |||||
Amortization of intangibles | 1,580 | 1,029 | ||||||
Other | 6,284 | 4,514 | ||||||
Total noninterest expense | 57,386 | 38,049 | ||||||
Income before income taxes | 28,640 | 17,111 | ||||||
Provision for income taxes | 8,796 | 4,935 | ||||||
Net Income | $ | 19,844 | $ | 12,176 | ||||
Earnings per common share | ||||||||
Basic | $ | 0.38 | $ | 0.31 | ||||
Diluted | $ | 0.37 | $ | 0.31 | ||||
Dividends paid per common share | $ | 0.12 | $ | 0.10 | ||||
Weighted average number of common shares outstanding | 51,097 | 39,348 | ||||||
Weighted average number of diluted common shares outstanding | 52,433 | 39,351 |
CONSOLIDATED BALANCE SHEETS | |||||||||||||
Columbia Banking System, Inc. | |||||||||||||
Unaudited | March 31, | December 31, | |||||||||||
2014 | 2013 | ||||||||||||
(in thousands) | |||||||||||||
ASSETS | |||||||||||||
Cash and due from banks | $ | 191,706 | $ | 165,030 | |||||||||
Interest-earning deposits with banks | 45,083 | 14,531 | |||||||||||
Total cash and cash equivalents | 236,789 | 179,561 | |||||||||||
Securities available for sale at fair value (amortized cost of $1,644,805 and $1,680,491, respectively) | 1,639,370 | 1,664,111 | |||||||||||
Federal Home Loan Bank stock at cost | 32,224 | 32,529 | |||||||||||
Loans held for sale | — | 735 | |||||||||||
Loans, excluding covered loans, net of unearned income of ($62,724) and ($68,282), respectively | 4,297,076 | 4,219,451 | |||||||||||
Less: allowance for loan and lease losses | 50,442 | 52,280 | |||||||||||
Loans, excluding covered loans, net | 4,246,634 | 4,167,171 | |||||||||||
Covered loans, net of allowance for loan losses of ($20,129) and ($20,174), respectively | 260,158 | 277,671 | |||||||||||
Total loans, net | 4,506,792 | 4,444,842 | |||||||||||
FDIC loss-sharing asset | 36,837 | 39,846 | |||||||||||
Interest receivable | 23,600 | 22,206 | |||||||||||
Premises and equipment, net | 156,836 | 154,732 | |||||||||||
Other real estate owned ($14,712 and $12,093 covered by FDIC loss-share, respectively) | 30,552 | 35,927 | |||||||||||
Goodwill | 343,952 | 343,952 | |||||||||||
Other intangible assets, net | 24,273 | 25,852 | |||||||||||
Other assets | 205,828 | 217,289 | |||||||||||
Total assets | $ | 7,237,053 | $ | 7,161,582 | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||
Deposits: | |||||||||||||
Noninterest-bearing | $ | 2,225,212 | $ | 2,171,703 | |||||||||
Interest-bearing | 3,819,204 | 3,787,772 | |||||||||||
Total deposits | 6,044,416 | 5,959,475 | |||||||||||
Federal Home Loan Bank advances | 6,597 | 36,606 | |||||||||||
Securities sold under agreements to repurchase | 25,000 | 25,000 | |||||||||||
Other liabilities | 86,549 | 87,252 | |||||||||||
Total liabilities | 6,162,562 | 6,108,333 | |||||||||||
Commitments and contingent liabilities | |||||||||||||
March 31, | December 31, | ||||||||||||
2014 | 2013 | ||||||||||||
Preferred stock (no par value) | |||||||||||||
Authorized shares | 2,000 | 2,000 | |||||||||||
Issued and outstanding | 9 | 9 | 2,217 | 2,217 | |||||||||
Common stock (no par value) | |||||||||||||
Authorized shares | 63,033 | 63,033 | |||||||||||
Issued and outstanding | 52,600 | 51,265 | 861,125 | 860,562 | |||||||||
Retained earnings | 216,192 | 202,514 | |||||||||||
Accumulated other comprehensive loss | (5,043 | ) | (12,044 | ) | |||||||||
Total shareholders' equity | 1,074,491 | 1,053,249 | |||||||||||
Total liabilities and shareholders' equity | $ | 7,237,053 | $ | 7,161,582 |
AVERAGE BALANCES AND RATES | ||||||||||||||||||||||
Columbia Banking System, Inc. | ||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | |||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||
Average Balances | Interest Earned / Paid | Average Rate | Average Balances | Interest Earned / Paid | Average Rate | |||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||
Loans, excluding covered loans, net (1) (3) | $ | 4,248,105 | $ | 54,946 | 5.17 | % | $ | 2,559,177 | $ | 33,163 | 5.18 | % | ||||||||||
Covered loans, net (2) | 289,002 | 10,952 | 15.16 | % | 403,382 | 14,992 | 14.87 | % | ||||||||||||||
Taxable securities | 1,329,679 | 6,752 | 2.03 | % | 782,158 | 4,234 | 2.17 | % | ||||||||||||||
Tax exempt securities (3) | 352,691 | 4,109 | 4.66 | % | 269,499 | 3,566 | 5.29 | % | ||||||||||||||
Interest-earning deposits with banks and federal funds sold | 25,215 | 14 | 0.23 | % | 322,761 | 201 | 0.25 | % | ||||||||||||||
Total interest-earning assets | 6,244,692 | $ | 76,773 | 4.92 | % | 4,336,977 | $ | 56,156 | 5.18 | % | ||||||||||||
Other earning assets | 126,924 | 80,604 | ||||||||||||||||||||
Noninterest-earning assets | 772,143 | 433,463 | ||||||||||||||||||||
Total assets | $ | 7,143,759 | $ | 4,851,044 | ||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||
Certificates of deposit | $ | 503,129 | $ | 362 | 0.29 | % | $ | 482,644 | $ | 580 | 0.48 | % | ||||||||||
Savings accounts | 513,911 | 13 | 0.01 | % | 326,760 | 16 | 0.02 | % | ||||||||||||||
Interest-bearing demand | 1,168,708 | 109 | 0.04 | % | 839,716 | 179 | 0.09 | % | ||||||||||||||
Money market accounts | 1,586,622 | 268 | 0.07 | % | 1,090,980 | 314 | 0.12 | % | ||||||||||||||
Total interest-bearing deposits | 3,772,370 | 752 | 0.08 | % | 2,740,100 | 1,089 | 0.16 | % | ||||||||||||||
Federal Home Loan Bank advances | 70,690 | 114 | 0.65 | % | 6,643 | 71 | 4.26 | % | ||||||||||||||
Other borrowings | 25,000 | 119 | 1.90 | % | 25,000 | 119 | 1.90 | % | ||||||||||||||
Total interest-bearing liabilities | 3,868,060 | $ | 985 | 0.10 | % | 2,771,743 | $ | 1,279 | 0.18 | % | ||||||||||||
Noninterest-bearing deposits | 2,129,468 | 1,250,028 | ||||||||||||||||||||
Other noninterest-bearing liabilities | 78,878 | 60,883 | ||||||||||||||||||||
Shareholders’ equity | 1,067,353 | 768,390 | ||||||||||||||||||||
Total liabilities & shareholders’ equity | $ | 7,143,759 | $ | 4,851,044 | ||||||||||||||||||
Net interest income | $ | 75,788 | $ | 54,877 | ||||||||||||||||||
Net interest margin | 4.85 | % | 5.06 | % |
(1) | Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on certain acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $983 thousand and $661 thousand for the three months ended March 31, 2014 and 2013, respectively. The accretion of net unearned discounts on certain acquired loans was $5.8 million and $1.1 million for the three months ended March 31, 2014 and 2013, respectively. |
(2) | Incremental accretion on acquired impaired loans is included in covered loan interest earned. The incremental accretion income on acquired impaired loans was $6.5 million and $8.4 million for the three months ended March 31, 2014 and 2013, respectively. |
(3) | Yields on a fully tax equivalent basis, based on a marginal tax rate of 35% for 2013 and 36% for 2014. The tax equivalent yield adjustment to interest earned on noncovered loans was $357 thousand and $127 thousand for the three months ended March 31, 2014 and 2013, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.5 million and $1.3 million for the three months ended March 31, 2014 and 2013, respectively. |
Three Months Ended March 31, | ||||||
2014 | 2013 | |||||
Net interest margin | 4.85 | % | 5.06 | % | ||
Adjustments to net interest margin to arrive at operating net interest margin: | ||||||
Incremental accretion income on FDIC acquired impaired loans | (0.41 | )% | (0.77 | )% | ||
Incremental accretion income on other FDIC acquired loans | (0.01 | )% | (0.10 | )% | ||
Incremental accretion income on other acquired loans | (0.36 | )% | — | % | ||
Premium amortization on acquired securities | 0.10 | % | — | % | ||
Interest reversals on nonaccrual loans | 0.02 | % | 0.02 | % | ||
Operating net interest margin | 4.19 | % | 4.21 | % |