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 October 29, 2015 reporting the financial results of Columbia Banking System, Inc. for the quarter ended September 30, 2015. |
99.2 | Press Release dated October 29, 2015 announcing a regular quarterly dividend and a special cash dividend. |
COLUMBIA BANKING SYSTEM, INC. | |||||
Date: | October 30, 2015 | /s/ BARRY S. RAY | |||
Barry S. Ray | |||||
Senior Vice President and Chief Accounting Officer (Principal Accounting Officer) |
99.1 | Press Release dated October 29, 2015 reporting the financial results of Columbia Banking System, Inc. for the quarter ended September 30, 2015. |
99.2 | Press Release dated October 29, 2015 announcing a regular quarterly dividend and a special cash dividend. |
• | Record net income of $25.8 million with diluted earnings per share of $0.45 |
• | Record new loan production for the quarter of $348 million |
• | Solid deposit growth of $270 million, or 4% for the quarter |
• | Nonperforming assets to period end assets reduced to 0.44%, a decrease of 10 basis points from June 30, 2015 and a decrease of 18 basis points from year end 2014 |
• | Efficiency ratio for the quarter improves to less than 60% |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
(in thousands) | ||||||||||||||||
Adjustments reflected in income | ||||||||||||||||
Amortization, net | (1,416 | ) | (3,992 | ) | (5,086 | ) | (16,208 | ) | ||||||||
Loan impairment | (119 | ) | (416 | ) | 1,413 | 2,735 | ||||||||||
Sale of other real estate | (126 | ) | (383 | ) | (753 | ) | (2,104 | ) | ||||||||
Write-downs of other real estate | 25 | 67 | 1,148 | 860 | ||||||||||||
Other | 1 | (92 | ) | 299 | 32 | |||||||||||
Change in FDIC loss-sharing asset | $ | (1,635 | ) | $ | (4,816 | ) | $ | (2,979 | ) | $ | (14,685 | ) |
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Incremental accretion income due to: | ||||||||||||||||
FDIC purchased credit impaired loans | $ | 2,082 | $ | 4,205 | $ | 6,896 | $ | 16,428 | ||||||||
Other FDIC acquired loans | 34 | 175 | 166 | 474 | ||||||||||||
Other acquired loans | 4,293 | 5,040 | 14,116 | 16,136 | ||||||||||||
Incremental accretion income | $ | 6,409 | $ | 9,420 | $ | 21,178 | $ | 33,038 | ||||||||
Net interest margin (tax equivalent) | 4.37 | % | 4.85 | % | 4.39 | % | 4.86 | % | ||||||||
Operating net interest margin (tax equivalent) (1) | 4.18 | % | 4.22 | % | 4.18 | % | 4.23 | % |
September 30, 2015 | June 30, 2015 | December 31, 2014 | ||||||||||
(in thousands) | ||||||||||||
Nonaccrual loans: | ||||||||||||
Commercial business | $ | 10,150 | $ | 13,539 | $ | 16,799 | ||||||
Real estate: | ||||||||||||
One-to-four family residential | 2,012 | 4,193 | 2,822 | |||||||||
Commercial and multifamily residential | 4,317 | 3,809 | 7,847 | |||||||||
Total real estate | 6,329 | 8,002 | 10,669 | |||||||||
Real estate construction: | ||||||||||||
One-to-four family residential | 1,472 | 1,937 | 465 | |||||||||
Commercial and multifamily residential | 470 | 469 | 480 | |||||||||
Total real estate construction | 1,942 | 2,406 | 945 | |||||||||
Consumer | 659 | 1,799 | 2,939 | |||||||||
Total nonaccrual loans | 19,080 | 25,746 | 31,352 | |||||||||
Other real estate owned and other personal property owned | 19,475 | 20,665 | 22,225 | |||||||||
Total nonperforming assets | $ | 38,555 | $ | 46,411 | $ | 53,577 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 (1) | 2015 | 2014 (1) | |||||||||||||
(in thousands) | ||||||||||||||||
Beginning balance | $ | 69,257 | $ | 69,295 | $ | 69,569 | $ | 72,454 | ||||||||
Charge-offs: | ||||||||||||||||
Commercial business | (2,570 | ) | (1,348 | ) | (6,082 | ) | (3,298 | ) | ||||||||
One-to-four family residential real estate | — | — | (297 | ) | (207 | ) | ||||||||||
Commercial and multifamily residential real estate | (198 | ) | (7 | ) | (241 | ) | (2,993 | ) | ||||||||
Consumer | (311 | ) | (620 | ) | (1,521 | ) | (2,256 | ) | ||||||||
Purchased credit impaired (1) | (3,198 | ) | (3,236 | ) | (10,174 | ) | (11,350 | ) | ||||||||
Total charge-offs | (6,277 | ) | (5,211 | ) | (18,315 | ) | (20,104 | ) | ||||||||
Recoveries: | ||||||||||||||||
Commercial business | 623 | 356 | 1,450 | 2,558 | ||||||||||||
One-to-four family residential real estate | 261 | 63 | 288 | 103 | ||||||||||||
Commercial and multifamily residential real estate | 417 | 140 | 3,698 | 716 | ||||||||||||
One-to-four family residential real estate construction | 105 | 20 | 141 | 504 | ||||||||||||
Commercial and multifamily residential real estate construction | 2 | — | 7 | — | ||||||||||||
Consumer | 297 | 340 | 707 | 931 | ||||||||||||
Purchased credit impaired (1) | 1,533 | 1,888 | 5,262 | 5,690 | ||||||||||||
Total recoveries | 3,238 | 2,807 | 11,553 | 10,502 | ||||||||||||
Net charge-offs | (3,039 | ) | (2,404 | ) | (6,762 | ) | (9,602 | ) | ||||||||
Provision for loan and lease losses (1) | 2,831 | 980 | 6,242 | 5,019 | ||||||||||||
Ending balance | $ | 69,049 | $ | 67,871 | $ | 69,049 | $ | 67,871 |
FDIC Acquired Loan Accounting | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, 2015 | September 30, 2014 | September 30, 2015 | September 30, 2014 | |||||||||||||
(in thousands) | ||||||||||||||||
Incremental accretion income on FDIC purchased credit impaired loans | $ | 2,082 | $ | 4,205 | $ | 6,896 | $ | 16,428 | ||||||||
Incremental accretion income on other FDIC acquired loans | 34 | 175 | 166 | 474 | ||||||||||||
Recapture (provision) for losses on FDIC purchased credit impaired loans | 519 | 520 | (2,566 | ) | (3,419 | ) | ||||||||||
Change in FDIC loss-sharing asset | (1,635 | ) | (4,816 | ) | (2,979 | ) | (14,685 | ) | ||||||||
FDIC clawback liability recovery (expense) | (174 | ) | (201 | ) | (167 | ) | (302 | ) | ||||||||
Pre-tax earnings impact | $ | 826 | $ | (117 | ) | $ | 1,350 | $ | (1,504 | ) |
FINANCIAL STATISTICS | ||||||||||||||||
Columbia Banking System, Inc. | Three Months Ended | Nine Months Ended | ||||||||||||||
Unaudited | September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Earnings | (dollars in thousands except per share amounts) | |||||||||||||||
Net interest income | $ | 81,694 | $ | 76,220 | $ | 243,068 | $ | 225,284 | ||||||||
Provision for loan and lease losses | $ | 2,831 | $ | 980 | $ | 6,242 | $ | 5,019 | ||||||||
Noninterest income | $ | 22,499 | $ | 15,930 | $ | 66,728 | $ | 44,565 | ||||||||
Noninterest expense | $ | 64,067 | $ | 59,982 | $ | 199,272 | $ | 175,132 | ||||||||
Acquisition-related expense (included in noninterest expense) | $ | 428 | $ | 3,238 | $ | 9,045 | $ | 4,876 | ||||||||
Net income | $ | 25,780 | $ | 21,583 | $ | 72,087 | $ | 62,654 | ||||||||
Per Common Share | ||||||||||||||||
Earnings (basic) | $ | 0.45 | $ | 0.41 | $ | 1.25 | $ | 1.20 | ||||||||
Earnings (diluted) | $ | 0.45 | $ | 0.41 | $ | 1.25 | $ | 1.18 | ||||||||
Book value | $ | 21.69 | $ | 20.78 | $ | 21.69 | $ | 20.78 | ||||||||
Averages | ||||||||||||||||
Total assets | $ | 8,672,692 | $ | 7,337,306 | $ | 8,570,825 | $ | 7,237,459 | ||||||||
Interest-earning assets | $ | 7,711,531 | $ | 6,451,660 | $ | 7,600,954 | $ | 6,345,909 | ||||||||
Loans | $ | 5,712,614 | $ | 4,770,443 | $ | 5,557,771 | $ | 4,652,157 | ||||||||
Securities, including Federal Home Loan Bank stock | $ | 1,945,174 | $ | 1,585,996 | $ | 1,996,527 | $ | 1,637,766 | ||||||||
Deposits | $ | 7,233,863 | $ | 6,110,809 | $ | 7,047,818 | $ | 5,994,608 | ||||||||
Interest-bearing deposits | $ | 3,910,695 | $ | 3,847,730 | $ | 3,939,525 | $ | 3,809,546 | ||||||||
Interest-bearing liabilities | $ | 4,007,198 | $ | 3,889,233 | $ | 4,119,815 | $ | 3,886,180 | ||||||||
Noninterest-bearing deposits | $ | 3,323,168 | $ | 2,263,079 | $ | 3,108,293 | $ | 2,185,062 | ||||||||
Shareholders' equity | $ | 1,239,830 | $ | 1,099,512 | $ | 1,242,853 | $ | 1,084,049 | ||||||||
Financial Ratios | ||||||||||||||||
Return on average assets | 1.19 | % | 1.18 | % | 1.12 | % | 1.15 | % | ||||||||
Return on average common equity | 8.32 | % | 7.86 | % | 7.74 | % | 7.71 | % | ||||||||
Average equity to average assets | 14.30 | % | 14.99 | % | 14.50 | % | 14.98 | % | ||||||||
Net interest margin (tax equivalent) | 4.37 | % | 4.85 | % | 4.39 | % | 4.86 | % | ||||||||
Efficiency ratio (tax equivalent) (1) | 59.69 | % | 63.33 | % | 62.51 | % | 63.16 | % | ||||||||
Operating efficiency ratio (tax equivalent) (2) | 58.85 | % | 63.81 | % | 60.86 | % | 64.26 | % | ||||||||
September 30, | December 31, | |||||||||||||||
Period end | 2015 | 2014 | 2014 | |||||||||||||
Total assets | $ | 8,755,984 | $ | 7,466,081 | $ | 8,578,846 | ||||||||||
Loans, net of unearned income | $ | 5,746,511 | $ | 4,823,022 | $ | 5,445,378 | ||||||||||
Allowance for loan and lease losses | $ | 69,049 | $ | 67,871 | $ | 69,569 | ||||||||||
Securities, including Federal Home Loan Bank stock | $ | 2,037,666 | $ | 1,643,003 | $ | 2,131,622 | ||||||||||
Deposits | $ | 7,314,805 | $ | 6,244,401 | $ | 6,924,722 | ||||||||||
Core deposits | $ | 6,986,206 | $ | 5,990,118 | $ | 6,619,944 | ||||||||||
Shareholders' equity | $ | 1,254,136 | $ | 1,096,211 | $ | 1,228,175 | ||||||||||
Nonperforming assets | ||||||||||||||||
Nonaccrual loans | $ | 19,080 | $ | 27,998 | $ | 31,352 | ||||||||||
Other real estate owned ("OREO") and other personal property owned ("OPPO") | 19,475 | 21,941 | 22,225 | |||||||||||||
Total nonperforming assets | $ | 38,555 | $ | 49,939 | $ | 53,577 | ||||||||||
Nonperforming loans to period-end loans | 0.33 | % | 0.58 | % | 0.58 | % | ||||||||||
Nonperforming assets to period-end assets | 0.44 | % | 0.67 | % | 0.62 | % | ||||||||||
Allowance for loan and lease losses to period-end loans | 1.20 | % | 1.41 | % | 1.28 | % | ||||||||||
Net loan charge-offs | $ | 6,762 | (3) | $ | 9,602 | (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). | ||||||||||||||||
(3) For the nine months ended September 30, 2015. | ||||||||||||||||
(4) For the nine months ended September 30, 2014. | ||||||||||||||||
(5) For the twelve months ended December 31, 2014. |
FINANCIAL STATISTICS | ||||||||||||||
Columbia Banking System, Inc. | ||||||||||||||
Unaudited | September 30, | December 31, | ||||||||||||
2015 | 2014 | |||||||||||||
Loan Portfolio Composition | (dollars in thousands) | |||||||||||||
Commercial business | $ | 2,354,731 | 41.0 | % | $ | 2,119,565 | 38.9 | % | ||||||
Real estate: | ||||||||||||||
One-to-four family residential | 177,108 | 3.1 | % | 175,571 | 3.2 | % | ||||||||
Commercial and multifamily residential | 2,449,847 | 42.6 | % | 2,363,541 | 43.5 | % | ||||||||
Total real estate | 2,626,955 | 45.7 | % | 2,539,112 | 46.7 | % | ||||||||
Real estate construction: | ||||||||||||||
One-to-four family residential | 136,783 | 2.4 | % | 116,866 | 2.1 | % | ||||||||
Commercial and multifamily residential | 134,097 | 2.3 | % | 134,443 | 2.5 | % | ||||||||
Total real estate construction | 270,880 | 4.7 | % | 251,309 | 4.6 | % | ||||||||
Consumer | 348,315 | 6.1 | % | 364,182 | 6.7 | % | ||||||||
Purchased credit impaired | 191,066 | 3.3 | % | 230,584 | 4.2 | % | ||||||||
Subtotal loans | 5,791,947 | 100.8 | % | 5,504,752 | 101.1 | % | ||||||||
Less: Net unearned income | (45,436 | ) | (0.8 | )% | (59,374 | ) | (1.1 | )% | ||||||
Loans, net of unearned income | 5,746,511 | 100.0 | % | 5,445,378 | 100.0 | % | ||||||||
Less: Allowance for loan and lease losses | (69,049 | ) | (69,569 | ) | ||||||||||
Total loans, net | 5,677,462 | 5,375,809 | ||||||||||||
Loans held for sale | $ | 6,637 | $ | 1,116 | ||||||||||
September 30, | December 31, | |||||||||||||
2015 | 2014 | |||||||||||||
Deposit Composition | (dollars in thousands) | |||||||||||||
Core deposits: | ||||||||||||||
Demand and other non-interest bearing | $ | 3,386,968 | 46.3 | % | $ | 2,651,373 | 38.3 | % | ||||||
Interest bearing demand | 911,686 | 12.5 | % | 1,304,258 | 18.8 | % | ||||||||
Money market | 1,776,087 | 24.3 | % | 1,760,331 | 25.4 | % | ||||||||
Savings | 651,695 | 8.9 | % | 615,721 | 8.9 | % | ||||||||
Certificates of deposit less than $100,000 | 259,770 | 3.6 | % | 288,261 | 4.2 | % | ||||||||
Total core deposits | 6,986,206 | 95.6 | % | 6,619,944 | 95.6 | % | ||||||||
Certificates of deposit greater than $100,000 | 184,047 | 2.4 | % | 202,014 | 2.9 | % | ||||||||
Certificates of deposit insured by CDARS® | 26,975 | 0.4 | % | 18,429 | 0.3 | % | ||||||||
Brokered money market accounts | 117,196 | 1.6 | % | 83,402 | 1.2 | % | ||||||||
Subtotal | 7,314,424 | 100.0 | % | 6,923,789 | 100.0 | % | ||||||||
Premium resulting from acquisition date fair value adjustment | 381 | 933 | ||||||||||||
Total deposits | $ | 7,314,805 | $ | 6,924,722 |
QUARTERLY FINANCIAL STATISTICS | ||||||||||||||||||||
Columbia Banking System, Inc. | Three Months Ended | |||||||||||||||||||
Unaudited | September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
2015 | 2015 | 2015 | 2014 | 2014 | ||||||||||||||||
(dollars in thousands except per share) | ||||||||||||||||||||
Earnings | ||||||||||||||||||||
Net interest income | $ | 81,694 | $ | 81,010 | $ | 80,364 | $ | 78,764 | $ | 76,220 | ||||||||||
Provision for loan and lease losses | $ | 2,831 | $ | 2,202 | $ | 1,209 | $ | 1,708 | $ | 980 | ||||||||||
Noninterest income | $ | 22,499 | $ | 21,462 | $ | 22,767 | $ | 15,185 | $ | 15,930 | ||||||||||
Noninterest expense | $ | 64,067 | $ | 68,471 | $ | 66,734 | $ | 64,154 | $ | 59,982 | ||||||||||
Acquisition-related expense (included in noninterest expense) | $ | 428 | $ | 5,643 | $ | 2,974 | $ | 4,556 | $ | 3,238 | ||||||||||
Net income | $ | 25,780 | $ | 21,946 | $ | 24,361 | $ | 18,920 | $ | 21,583 | ||||||||||
Per Common Share | ||||||||||||||||||||
Earnings (basic) | $ | 0.45 | $ | 0.38 | $ | 0.42 | $ | 0.34 | $ | 0.41 | ||||||||||
Earnings (diluted) | $ | 0.45 | $ | 0.38 | $ | 0.42 | $ | 0.34 | $ | 0.41 | ||||||||||
Book value | $ | 21.69 | $ | 21.38 | $ | 21.53 | $ | 21.34 | $ | 20.78 | ||||||||||
Averages | ||||||||||||||||||||
Total assets | $ | 8,672,692 | $ | 8,532,173 | $ | 8,505,776 | $ | 8,152,463 | $ | 7,337,306 | ||||||||||
Interest-earning assets | $ | 7,711,531 | $ | 7,560,288 | $ | 7,529,040 | $ | 7,199,443 | $ | 6,451,660 | ||||||||||
Loans | $ | 5,712,614 | $ | 5,542,489 | $ | 5,414,942 | $ | 5,168,761 | $ | 4,770,443 | ||||||||||
Securities, including Federal Home Loan Bank stock | $ | 1,945,174 | $ | 1,976,959 | $ | 2,068,806 | $ | 1,918,690 | $ | 1,585,996 | ||||||||||
Deposits | $ | 7,233,863 | $ | 6,978,472 | $ | 6,927,756 | $ | 6,759,259 | $ | 6,110,809 | ||||||||||
Interest-bearing deposits | $ | 3,910,695 | $ | 3,753,101 | $ | 4,157,491 | $ | 4,174,459 | $ | 3,847,730 | ||||||||||
Interest-bearing liabilities | $ | 4,007,198 | $ | 3,961,013 | $ | 4,395,502 | $ | 4,282,273 | $ | 3,889,233 | ||||||||||
Noninterest-bearing deposits | $ | 3,323,168 | $ | 3,225,371 | $ | 2,770,265 | $ | 2,584,800 | $ | 2,263,079 | ||||||||||
Shareholders' equity | $ | 1,239,830 | $ | 1,247,887 | $ | 1,240,853 | $ | 1,185,346 | $ | 1,099,512 | ||||||||||
Financial Ratios | ||||||||||||||||||||
Return on average assets | 1.19 | % | 1.03 | % | 1.15 | % | 0.93 | % | 1.18 | % | ||||||||||
Return on average common equity | 8.32 | % | 7.04 | % | 7.86 | % | 6.39 | % | 7.86 | % | ||||||||||
Average equity to average assets | 14.30 | % | 14.63 | % | 14.59 | % | 14.54 | % | 14.99 | % | ||||||||||
Net interest margin (tax equivalent) | 4.37 | % | 4.41 | % | 4.39 | % | 4.50 | % | 4.85 | % | ||||||||||
Period end | ||||||||||||||||||||
Total assets | $ | 8,755,984 | $ | 8,518,019 | $ | 8,552,902 | $ | 8,578,846 | $ | 7,466,081 | ||||||||||
Loans, net of unearned income | $ | 5,746,511 | $ | 5,611,897 | $ | 5,450,895 | $ | 5,445,378 | $ | 4,823,022 | ||||||||||
Allowance for loan and lease losses | $ | 69,049 | $ | 69,257 | $ | 70,234 | $ | 69,569 | $ | 67,871 | ||||||||||
Securities, including Federal Home Loan Bank stock | $ | 2,037,666 | $ | 1,926,248 | $ | 2,040,163 | $ | 2,131,622 | $ | 1,643,003 | ||||||||||
Deposits | $ | 7,314,805 | $ | 7,044,373 | $ | 7,074,965 | $ | 6,924,722 | $ | 6,244,401 | ||||||||||
Core deposits | $ | 6,986,206 | $ | 6,737,969 | $ | 6,771,755 | $ | 6,619,944 | $ | 5,990,118 | ||||||||||
Shareholders' equity | $ | 1,254,136 | $ | 1,236,214 | $ | 1,244,443 | $ | 1,228,175 | $ | 1,096,211 | ||||||||||
Nonperforming, assets | ||||||||||||||||||||
Nonaccrual loans | $ | 19,080 | $ | 25,746 | $ | 31,828 | $ | 31,352 | $ | 27,998 | ||||||||||
OREO and OPPO | 19,475 | 20,665 | 23,347 | 22,225 | 21,941 | |||||||||||||||
Total nonperforming assets | $ | 38,555 | $ | 46,411 | $ | 55,175 | $ | 53,577 | $ | 49,939 | ||||||||||
Nonperforming loans to period-end loans | 0.33 | % | 0.46 | % | 0.58 | % | 0.58 | % | 0.58 | % | ||||||||||
Nonperforming assets to period-end assets | 0.44 | % | 0.54 | % | 0.65 | % | 0.62 | % | 0.67 | % | ||||||||||
Allowance for loan and lease losses to period-end loans | 1.20 | % | 1.23 | % | 1.29 | % | 1.28 | % | 1.41 | % | ||||||||||
Net loan charge-offs | $ | 3,039 | $ | 3,179 | $ | 544 | $ | 10 | $ | 2,404 |
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
Columbia Banking System, Inc. | Three Months Ended | Nine Months Ended | ||||||||||||||
Unaudited | September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
(in thousands except per share) | ||||||||||||||||
Interest Income | ||||||||||||||||
Loans | $ | 72,242 | $ | 65,903 | $ | 214,808 | $ | 198,448 | ||||||||
Taxable securities | 7,472 | 8,545 | 22,258 | 21,679 | ||||||||||||
Tax-exempt securities | 2,920 | 2,624 | 8,972 | 7,913 | ||||||||||||
Deposits in banks | 31 | 61 | 84 | 105 | ||||||||||||
Total interest income | 82,665 | 77,133 | 246,122 | 228,145 | ||||||||||||
Interest Expense | ||||||||||||||||
Deposits | 756 | 713 | 2,244 | 2,194 | ||||||||||||
Federal Home Loan Bank advances | 78 | 80 | 391 | 309 | ||||||||||||
Other borrowings | 137 | 120 | 419 | 358 | ||||||||||||
Total interest expense | 971 | 913 | 3,054 | 2,861 | ||||||||||||
Net Interest Income | 81,694 | 76,220 | 243,068 | 225,284 | ||||||||||||
Provision for loan and lease losses | 2,831 | 980 | 6,242 | 5,019 | ||||||||||||
Net interest income after provision for loan and lease losses | 78,863 | 75,240 | 236,826 | 220,265 | ||||||||||||
Noninterest Income | ||||||||||||||||
Service charges and other fees | 15,893 | 14,254 | 46,636 | 40,980 | ||||||||||||
Merchant services fees | 2,422 | 2,104 | 6,802 | 6,014 | ||||||||||||
Investment securities gains, net | 236 | 33 | 1,300 | 552 | ||||||||||||
Bank owned life insurance | 1,086 | 956 | 3,370 | 2,897 | ||||||||||||
Change in FDIC loss-sharing asset | (1,635 | ) | (4,816 | ) | (2,979 | ) | (14,685 | ) | ||||||||
Other | 4,497 | 3,399 | 11,599 | 8,807 | ||||||||||||
Total noninterest income | 22,499 | 15,930 | 66,728 | 44,565 | ||||||||||||
Noninterest Expense | ||||||||||||||||
Compensation and employee benefits | 35,175 | 32,559 | 112,721 | 94,961 | ||||||||||||
Occupancy | 8,101 | 7,445 | 24,781 | 24,276 | ||||||||||||
Merchant processing | 1,090 | 1,080 | 3,146 | 3,058 | ||||||||||||
Advertising and promotion | 1,354 | 1,027 | 3,480 | 2,746 | ||||||||||||
Data processing and communications | 3,796 | 4,269 | 13,022 | 11,469 | ||||||||||||
Legal and professional fees | 2,173 | 2,905 | 7,527 | 7,377 | ||||||||||||
Taxes, licenses and fees | 1,344 | 1,156 | 4,003 | 3,387 | ||||||||||||
Regulatory premiums | 1,084 | 1,195 | 3,626 | 3,444 | ||||||||||||
Net cost (benefit) of operation of other real estate owned | 240 | (1,256 | ) | (1,569 | ) | (1,207 | ) | |||||||||
Amortization of intangibles | 1,695 | 1,456 | 5,230 | 4,516 | ||||||||||||
Other | 8,015 | 8,146 | 23,305 | 21,105 | ||||||||||||
Total noninterest expense | 64,067 | 59,982 | 199,272 | 175,132 | ||||||||||||
Income before income taxes | 37,295 | 31,188 | 104,282 | 89,698 | ||||||||||||
Provision for income taxes | 11,515 | 9,605 | 32,195 | 27,044 | ||||||||||||
Net Income | $ | 25,780 | $ | 21,583 | $ | 72,087 | $ | 62,654 | ||||||||
Earnings per common share | ||||||||||||||||
Basic | $ | 0.45 | $ | 0.41 | $ | 1.25 | $ | 1.20 | ||||||||
Diluted | $ | 0.45 | $ | 0.41 | $ | 1.25 | $ | 1.18 | ||||||||
Dividends paid per common share | $ | 0.34 | $ | 0.28 | $ | 0.98 | $ | 0.64 | ||||||||
Weighted average number of common shares outstanding | 57,051 | 52,112 | 57,007 | 51,772 | ||||||||||||
Weighted average number of diluted common shares outstanding | 57,064 | 52,516 | 57,021 | 52,479 |
CONSOLIDATED BALANCE SHEETS | |||||||||||||
Columbia Banking System, Inc. | |||||||||||||
Unaudited | September 30, | December 31, | |||||||||||
2015 | 2014 | ||||||||||||
(in thousands) | |||||||||||||
ASSETS | |||||||||||||
Cash and due from banks | $ | 149,610 | $ | 171,221 | |||||||||
Interest-earning deposits with banks | 22,578 | 16,949 | |||||||||||
Total cash and cash equivalents | 172,188 | 188,170 | |||||||||||
Securities available for sale at fair value (amortized cost of $2,004,728 and $2,087,069, respectively) | 2,027,424 | 2,098,257 | |||||||||||
Federal Home Loan Bank stock at cost | 10,242 | 33,365 | |||||||||||
Loans held for sale | 6,637 | 1,116 | |||||||||||
Loans, net of unearned income of ($45,436) and ($59,374), respectively | 5,746,511 | 5,445,378 | |||||||||||
Less: allowance for loan and lease losses | 69,049 | 69,569 | |||||||||||
Loans, net | 5,677,462 | 5,375,809 | |||||||||||
FDIC loss-sharing asset | 8,146 | 15,174 | |||||||||||
Interest receivable | 30,486 | 27,802 | |||||||||||
Premises and equipment, net | 168,495 | 172,090 | |||||||||||
Other real estate owned | 19,456 | 22,190 | |||||||||||
Goodwill | 382,762 | 382,537 | |||||||||||
Other intangible assets, net | 25,229 | 30,459 | |||||||||||
Other assets | 227,457 | 231,877 | |||||||||||
Total assets | $ | 8,755,984 | $ | 8,578,846 | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||
Deposits: | |||||||||||||
Noninterest-bearing | $ | 3,386,968 | $ | 2,651,373 | |||||||||
Interest-bearing | 3,927,837 | 4,273,349 | |||||||||||
Total deposits | 7,314,805 | 6,924,722 | |||||||||||
Federal Home Loan Bank advances | 6,540 | 216,568 | |||||||||||
Securities sold under agreements to repurchase | 73,182 | 105,080 | |||||||||||
Other borrowings | — | 8,248 | |||||||||||
Other liabilities | 107,321 | 96,053 | |||||||||||
Total liabilities | 7,501,848 | 7,350,671 | |||||||||||
Commitments and contingent liabilities | |||||||||||||
September 30, | 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 | 115,000 | 63,033 | |||||||||||
Issued and outstanding | 57,729 | 57,437 | 989,088 | 985,839 | |||||||||
Retained earnings | 250,005 | 234,498 | |||||||||||
Accumulated other comprehensive income | 12,826 | 5,621 | |||||||||||
Total shareholders' equity | 1,254,136 | 1,228,175 | |||||||||||
Total liabilities and shareholders' equity | $ | 8,755,984 | $ | 8,578,846 |
AVERAGE BALANCES AND RATES | ||||||||||||||||||||||
Columbia Banking System, Inc. | ||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | |||||||||||||||||||||
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)(4) | $ | 5,712,614 | $ | 73,231 | 5.13 | % | $ | 4,770,443 | $ | 66,421 | 5.57 | % | ||||||||||
Taxable securities (3) | 1,498,211 | 7,472 | 1.99 | % | 1,224,608 | 8,545 | 2.79 | % | ||||||||||||||
Tax exempt securities (4) | 446,963 | 4,491 | 4.02 | % | 361,388 | 4,118 | 4.56 | % | ||||||||||||||
Interest-earning deposits with banks | 53,743 | 31 | 0.23 | % | 95,221 | 61 | 0.26 | % | ||||||||||||||
Total interest-earning assets | 7,711,531 | $ | 85,225 | 4.42 | % | 6,451,660 | $ | 79,145 | 4.91 | % | ||||||||||||
Other earning assets | 149,895 | 131,887 | ||||||||||||||||||||
Noninterest-earning assets | 811,266 | 753,759 | ||||||||||||||||||||
Total assets | $ | 8,672,692 | $ | 7,337,306 | ||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||
Certificates of deposit | $ | 480,132 | $ | 213 | 0.18 | % | $ | 460,985 | $ | 288 | 0.25 | % | ||||||||||
Savings accounts | 643,672 | 17 | 0.01 | % | 539,982 | 15 | 0.01 | % | ||||||||||||||
Interest-bearing demand | 916,388 | 158 | 0.07 | % | 1,201,154 | 117 | 0.04 | % | ||||||||||||||
Money market accounts | 1,870,503 | 368 | 0.08 | % | 1,645,609 | 293 | 0.07 | % | ||||||||||||||
Total interest-bearing deposits | 3,910,695 | 756 | 0.08 | % | 3,847,730 | 713 | 0.07 | % | ||||||||||||||
Federal Home Loan Bank advances | 13,968 | 78 | 2.23 | % | 16,503 | 80 | 1.94 | % | ||||||||||||||
Other borrowings | 82,535 | 137 | 0.66 | % | 25,000 | 120 | 1.92 | % | ||||||||||||||
Total interest-bearing liabilities | 4,007,198 | $ | 971 | 0.10 | % | 3,889,233 | $ | 913 | 0.09 | % | ||||||||||||
Noninterest-bearing deposits | 3,323,168 | 2,263,079 | ||||||||||||||||||||
Other noninterest-bearing liabilities | 102,496 | 85,482 | ||||||||||||||||||||
Shareholders’ equity | 1,239,830 | 1,099,512 | ||||||||||||||||||||
Total liabilities & shareholders’ equity | $ | 8,672,692 | $ | 7,337,306 | ||||||||||||||||||
Net interest income (tax equivalent) | $ | 84,254 | $ | 78,232 | ||||||||||||||||||
Net interest margin (tax equivalent) | 4.37 | % | 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 $1.2 million for both three month periods ended September 30, 2015 and 2014. The incremental accretion on acquired loans was $6.4 million and $9.4 million for the three months ended September 30, 2015 and 2014, respectively. |
(3) | During the three months ended September 30, 2014, the Company recorded a $2.6 million reversal of premium amortization, which increased interest income on taxable securities. |
(4) | Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $989 thousand and $518 thousand for the three months ended September 30, 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 September 30, 2015 and 2014, respectively. |
AVERAGE BALANCES AND RATES | ||||||||||||||||||||||
Columbia Banking System, Inc. | ||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
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)(4) | $ | 5,557,771 | $ | 217,128 | 5.21 | % | $ | 4,652,157 | $ | 199,747 | 5.72 | % | ||||||||||
Taxable securities (3) | 1,541,018 | 22,258 | 1.93 | % | 1,278,295 | 21,679 | 2.26 | % | ||||||||||||||
Tax exempt securities (4) | 455,509 | 13,802 | 4.04 | % | 359,471 | 12,419 | 4.61 | % | ||||||||||||||
Interest-earning deposits with banks | 46,656 | 84 | 0.24 | % | 55,986 | 105 | 0.25 | % | ||||||||||||||
Total interest-earning assets | 7,600,954 | $ | 253,272 | 4.44 | % | 6,345,909 | $ | 233,950 | 4.92 | % | ||||||||||||
Other earning assets | 148,189 | 129,819 | ||||||||||||||||||||
Noninterest-earning assets | 821,682 | 761,731 | ||||||||||||||||||||
Total assets | $ | 8,570,825 | $ | 7,237,459 | ||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||
Certificates of deposit | $ | 490,720 | $ | 689 | 0.19 | % | $ | 481,370 | $ | 975 | 0.27 | % | ||||||||||
Savings accounts | 631,979 | 53 | 0.01 | % | 527,183 | 42 | 0.01 | % | ||||||||||||||
Interest-bearing demand | 1,003,544 | 451 | 0.06 | % | 1,185,831 | 340 | 0.04 | % | ||||||||||||||
Money market accounts | 1,813,282 | 1,051 | 0.08 | % | 1,615,162 | 837 | 0.07 | % | ||||||||||||||
Total interest-bearing deposits | 3,939,525 | 2,244 | 0.08 | % | 3,809,546 | 2,194 | 0.08 | % | ||||||||||||||
Federal Home Loan Bank advances | 88,121 | 391 | 0.59 | % | 51,634 | 309 | 0.80 | % | ||||||||||||||
Other borrowings | 92,169 | 419 | 0.61 | % | 25,000 | 358 | 1.91 | % | ||||||||||||||
Total interest-bearing liabilities | 4,119,815 | $ | 3,054 | 0.10 | % | 3,886,180 | $ | 2,861 | 0.10 | % | ||||||||||||
Noninterest-bearing deposits | 3,108,293 | 2,185,062 | ||||||||||||||||||||
Other noninterest-bearing liabilities | 99,864 | 82,168 | ||||||||||||||||||||
Shareholders’ equity | 1,242,853 | 1,084,049 | ||||||||||||||||||||
Total liabilities & shareholders’ equity | $ | 8,570,825 | $ | 7,237,459 | ||||||||||||||||||
Net interest income (tax equivalent) | $ | 250,218 | $ | 231,089 | ||||||||||||||||||
Net interest margin (tax equivalent) | 4.39 | % | 4.86 | % |
(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 table 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 $3.8 million and $3.3 million for the nine months ended September 30, 2015 and 2014, respectively. The incremental accretion on certain loans was $21.2 million and $33.0 million for the nine months ended September 30, 2015 and 2014, respectively. |
(3) | During the nine months ended September 30, 2014, the Company recorded a $2.6 million reversal of premium amortization, which increased interest income on taxable securities. |
(4) | Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $2.3 million and $1.3 million for the nine months ended September 30, 2015 and 2014, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $4.8 million and $4.5 million for the nine months ended September 30, 2015 and 2014, respectively. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Operating net interest margin non-GAAP reconciliation: | (dollars in thousands) | |||||||||||||||
Net interest income (tax equivalent) (1) | $ | 84,254 | $ | 78,232 | $ | 250,218 | $ | 231,089 | ||||||||
Adjustments to arrive at operating net interest income (tax equivalent): | ||||||||||||||||
Incremental accretion income on FDIC purchased credit impaired loans | (2,082 | ) | (4,205 | ) | (6,896 | ) | (16,428 | ) | ||||||||
Incremental accretion income on other FDIC acquired loans | (34 | ) | (175 | ) | (166 | ) | (474 | ) | ||||||||
Incremental accretion income on other acquired loans | (4,293 | ) | (5,040 | ) | (14,116 | ) | (16,136 | ) | ||||||||
Premium amortization on acquired securities | 2,396 | 1,454 | 7,964 | 4,633 | ||||||||||||
Correction of immaterial error - securities premium amortization | — | (2,622 | ) | — | (2,622 | ) | ||||||||||
Interest reversals on nonaccrual loans | 325 | 423 | 1,131 | 1,103 | ||||||||||||
Operating net interest income (tax equivalent) (1) | $ | 80,566 | $ | 68,067 | $ | 238,135 | $ | 201,165 | ||||||||
Average interest earning assets | $ | 7,711,531 | $ | 6,451,660 | $ | 7,600,954 | $ | 6,345,909 | ||||||||
Net interest margin (tax equivalent) (1) | 4.37 | % | 4.85 | % | 4.39 | % | 4.86 | % | ||||||||
Operating net interest margin (tax equivalent) (1) | 4.18 | % | 4.22 | % | 4.18 | % | 4.23 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Operating efficiency ratio non-GAAP reconciliation: | (dollars in thousands) | |||||||||||||||
Noninterest expense (numerator A) | $ | 64,067 | $ | 59,982 | $ | 199,272 | $ | 175,132 | ||||||||
Adjustments to arrive at operating noninterest expense: | ||||||||||||||||
Acquisition-related expenses | (428 | ) | (3,238 | ) | (9,045 | ) | (4,876 | ) | ||||||||
Net benefit of operation of OREO and OPPO | (228 | ) | 1,247 | 1,574 | 1,342 | |||||||||||
FDIC clawback liability expense | (174 | ) | (201 | ) | (167 | ) | (302 | ) | ||||||||
Loss on asset disposals | (274 | ) | (106 | ) | (381 | ) | (557 | ) | ||||||||
State of Washington Business and Occupation ("B&O") taxes | (1,212 | ) | (1,069 | ) | (3,668 | ) | (3,116 | ) | ||||||||
Operating noninterest expense (numerator B) | $ | 61,751 | $ | 56,615 | $ | 187,585 | $ | 167,623 | ||||||||
Net interest income (tax equivalent) (1) | $ | 84,254 | $ | 78,232 | $ | 250,218 | $ | 231,089 | ||||||||
Noninterest income | 22,499 | 15,930 | 66,728 | 44,565 | ||||||||||||
Bank owned life insurance tax equivalent adjustment | 585 | 544 | 1,815 | 1,649 | ||||||||||||
Total revenue (tax equivalent) (denominator A) | $ | 107,338 | $ | 94,706 | $ | 318,761 | $ | 277,303 | ||||||||
Operating net interest income (tax equivalent) (1) | $ | 80,566 | $ | 68,067 | $ | 238,135 | $ | 201,165 | ||||||||
Adjustments to arrive at operating noninterest income (tax equivalent): | ||||||||||||||||
Investment securities gains, net | (236 | ) | (33 | ) | (1,300 | ) | (552 | ) | ||||||||
Gain on asset disposals | (120 | ) | (28 | ) | (125 | ) | (78 | ) | ||||||||
Change in FDIC loss-sharing asset | 1,635 | 4,816 | 2,979 | 14,685 | ||||||||||||
Operating noninterest income (tax equivalent) | 24,363 | 20,664 | 70,097 | 59,704 | ||||||||||||
Total operating revenue (tax equivalent) (denominator B) | $ | 104,929 | $ | 88,731 | $ | 308,232 | $ | 260,869 | ||||||||
Efficiency ratio (tax equivalent) (numerator A/denominator A) | 59.69 | % | 63.33 | % | 62.51 | % | 63.16 | % | ||||||||
Operating efficiency ratio (tax equivalent) (numerator B/denominator B) | 58.85 | % | 63.81 | % | 60.86 | % | 64.26 | % |