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)) |
COLUMBIA BANKING SYSTEM, INC. | |||||
Date: | January 24, 2019 | /s/ HADLEY S. ROBBINS | |||
Hadley S. Robbins | |||||
President and Chief Executive Officer |
• | Record full year 2018 net income of $172.9 million; diluted earnings per share of $2.36 |
• | Fourth quarter net income of $44.7 million; diluted earnings per share of $0.61, which included $0.01 per share negative impact from acquisition-related expenses |
• | Record full year production of $1.43 billion and fourth quarter loan production of $388.4 million |
• | Deposit costs increased modestly but remained low at 15 basis points |
• | Nonperforming assets to period end assets ratio decreased to 0.46% |
• | Regular cash dividend increased to $0.28 while special cash dividend maintained at $0.14 |
Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||||
2018 | 2018 | 2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||
Incremental accretion income due to: | ||||||||||||||||||||||||||||
FDIC purchased credit impaired loans | $ | 395 | $ | 585 | $ | 326 | $ | 329 | $ | 265 | $ | 1,635 | $ | 4,107 | ||||||||||||||
Other acquired loans | 2,218 | 2,643 | 2,690 | 3,370 | 2,482 | 10,921 | 8,689 | |||||||||||||||||||||
Incremental accretion income | $ | 2,613 | $ | 3,228 | $ | 3,016 | $ | 3,699 | $ | 2,747 | $ | 12,556 | $ | 12,796 | ||||||||||||||
Net interest margin (tax equivalent) | 4.40 | % | 4.41 | % | 4.29 | % | 4.22 | % | 4.20 | % | 4.33 | % | 4.18 | % | ||||||||||||||
Operating net interest margin (tax equivalent) (1) | 4.38 | % | 4.38 | % | 4.27 | % | 4.18 | % | 4.25 | % | 4.30 | % | 4.15 | % |
December 31, 2018 | September 30, 2018 | December 31, 2017 | ||||||||||
(in thousands) | ||||||||||||
Nonaccrual loans: | ||||||||||||
Commercial business | $ | 35,513 | $ | 45,753 | $ | 45,460 | ||||||
Real estate: | ||||||||||||
One-to-four family residential | 1,158 | 501 | 785 | |||||||||
Commercial and multifamily residential | 14,904 | 11,012 | 13,941 | |||||||||
Total real estate | 16,062 | 11,513 | 14,726 | |||||||||
Real estate construction: | ||||||||||||
One-to-four family residential | 318 | 318 | 1,854 | |||||||||
Total real estate construction | 318 | 318 | 1,854 | |||||||||
Consumer | 2,949 | 2,748 | 4,149 | |||||||||
Total nonaccrual loans | 54,842 | 60,332 | 66,189 | |||||||||
Other real estate owned and other personal property owned | 6,049 | 7,415 | 13,298 | |||||||||
Total nonperforming assets | $ | 60,891 | $ | 67,747 | $ | 79,487 |
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
December 31, 2018 | September 30, 2018 | December 31, 2017 | December 31, 2018 | December 31, 2017 | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Beginning balance, loans excluding PCI loans | $ | 79,770 | $ | 75,368 | $ | 64,272 | $ | 68,739 | $ | 59,528 | ||||||||||
Beginning balance, PCI loans | 4,017 | 4,782 | 7,344 | 6,907 | 10,515 | |||||||||||||||
Beginning balance | 83,787 | 80,150 | 71,616 | 75,646 | 70,043 | |||||||||||||||
Charge-offs: | ||||||||||||||||||||
Commercial business | (2,861 | ) | (606 | ) | (1,524 | ) | (11,719 | ) | (7,613 | ) | ||||||||||
One-to-four family residential real estate | — | — | — | — | (460 | ) | ||||||||||||||
Commercial and multifamily residential real estate | (557 | ) | — | (287 | ) | (780 | ) | (287 | ) | |||||||||||
One-to-four family residential real estate construction | — | — | — | — | (14 | ) | ||||||||||||||
Consumer | (421 | ) | (277 | ) | (318 | ) | (1,194 | ) | (1,474 | ) | ||||||||||
Purchased credit impaired | (1,076 | ) | (1,208 | ) | (1,440 | ) | (4,862 | ) | (6,812 | ) | ||||||||||
Total charge-offs | (4,915 | ) | (2,091 | ) | (3,569 | ) | (18,555 | ) | (16,660 | ) | ||||||||||
Recoveries: | ||||||||||||||||||||
Commercial business | 535 | 547 | 839 | 3,427 | 4,836 | |||||||||||||||
One-to-four family residential real estate | 19 | 21 | 188 | 408 | 568 | |||||||||||||||
Commercial and multifamily residential real estate | 19 | 213 | 412 | 1,031 | 675 | |||||||||||||||
One-to-four family residential real estate construction | 1,000 | 583 | 71 | 1,616 | 178 | |||||||||||||||
Commercial and multifamily residential real estate construction | — | — | 1 | — | 1 | |||||||||||||||
Consumer | 384 | 266 | 311 | 1,180 | 1,187 | |||||||||||||||
Purchased credit impaired | 751 | 945 | 2,450 | 3,847 | 6,187 | |||||||||||||||
Total recoveries | 2,708 | 2,575 | 4,272 | 11,509 | 13,632 | |||||||||||||||
Net recoveries (charge-offs) | (2,207 | ) | 484 | 703 | (7,046 | ) | (3,028 | ) | ||||||||||||
Provision for loan and lease losses, excluding PCI loans | 1,870 | 3,655 | 4,774 | 17,050 | 11,614 | |||||||||||||||
Recapture for loan and lease losses, PCI loans | (81 | ) | (502 | ) | (1,447 | ) | (2,281 | ) | (2,983 | ) | ||||||||||
Provision for loan and lease losses | 1,789 | 3,153 | 3,327 | 14,769 | 8,631 | |||||||||||||||
Ending balance, loans excluding PCI loans | 79,758 | 79,770 | 68,739 | 79,758 | 68,739 | |||||||||||||||
Ending balance, PCI loans | 3,611 | 4,017 | 6,907 | 3,611 | 6,907 | |||||||||||||||
Ending balance | $ | 83,369 | $ | 83,787 | $ | 75,646 | $ | 83,369 | $ | 75,646 |
Contacts: | Hadley S. Robbins, |
President and | |
Chief Executive Officer | |
Gregory A. Sigrist, | |
Executive Vice President and | |
Chief Financial Officer | |
Investor Relations | |
InvestorRelations@columbiabank.com | |
253-305-1921 |
CONSOLIDATED BALANCE SHEETS | ||||||||||||||||||||
Columbia Banking System, Inc. | ||||||||||||||||||||
Unaudited | December 31, | September 30, | December 31, | |||||||||||||||||
2018 | 2018 | 2017 | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and due from banks | $ | 260,180 | $ | 220,706 | $ | 244,615 | ||||||||||||||
Interest-earning deposits with banks | 17,407 | 21,456 | 97,918 | |||||||||||||||||
Total cash and cash equivalents | 277,587 | 242,162 | 342,533 | |||||||||||||||||
Debt securities available for sale at fair value | 3,167,448 | 2,921,114 | 2,737,751 | |||||||||||||||||
Equity securities at fair value | — | 4,901 | 5,080 | |||||||||||||||||
Federal Home Loan Bank (“FHLB”) stock at cost | 25,960 | 16,640 | 10,440 | |||||||||||||||||
Loans held for sale | 3,849 | 5,275 | 5,766 | |||||||||||||||||
Loans, net of unearned income | 8,391,511 | 8,514,317 | 8,358,657 | |||||||||||||||||
Less: allowance for loan and lease losses | 83,369 | 83,787 | 75,646 | |||||||||||||||||
Loans, net | 8,308,142 | 8,430,530 | 8,283,011 | |||||||||||||||||
Interest receivable | 45,323 | 48,476 | 40,881 | |||||||||||||||||
Premises and equipment, net | 168,788 | 169,681 | 169,490 | |||||||||||||||||
Other real estate owned | 6,019 | 7,331 | 13,298 | |||||||||||||||||
Goodwill | 765,842 | 765,842 | 765,842 | |||||||||||||||||
Other intangible assets, net | 45,937 | 48,827 | 58,173 | |||||||||||||||||
Other assets | 280,250 | 295,817 | 284,621 | |||||||||||||||||
Total assets | $ | 13,095,145 | $ | 12,956,596 | $ | 12,716,886 | ||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest-bearing | $ | 5,227,216 | $ | 5,250,222 | $ | 5,081,901 | ||||||||||||||
Interest-bearing | 5,230,910 | 5,353,735 | 5,450,184 | |||||||||||||||||
Total deposits | 10,458,126 | 10,603,957 | 10,532,085 | |||||||||||||||||
FHLB advances | 399,523 | 166,536 | 11,579 | |||||||||||||||||
Securities sold under agreements to repurchase | 61,094 | 62,197 | 79,059 | |||||||||||||||||
Subordinated debentures | 35,462 | 35,508 | 35,647 | |||||||||||||||||
Junior subordinated debentures | — | — | 8,248 | |||||||||||||||||
Other liabilities | 107,291 | 107,003 | 100,346 | |||||||||||||||||
Total liabilities | 11,061,496 | 10,975,201 | 10,766,964 | |||||||||||||||||
Commitments and contingent liabilities | ||||||||||||||||||||
December 31, | September 30, | December 31, | ||||||||||||||||||
2018 | 2018 | 2017 | ||||||||||||||||||
(in thousands) | ||||||||||||||||||||
Preferred stock (no par value) | ||||||||||||||||||||
Authorized shares | 2,000 | 2,000 | 2,000 | |||||||||||||||||
Common stock (no par value) | ||||||||||||||||||||
Authorized shares | 115,000 | 115,000 | 115,000 | |||||||||||||||||
Issued and outstanding | 73,249 | 73,260 | 73,020 | 1,642,246 | 1,640,140 | 1,634,705 | ||||||||||||||
Retained earnings | 426,708 | 411,264 | 337,442 | |||||||||||||||||
Accumulated other comprehensive loss | (35,305 | ) | (70,009 | ) | (22,225 | ) | ||||||||||||||
Total shareholders’ equity | 2,033,649 | 1,981,395 | 1,949,922 | |||||||||||||||||
Total liabilities and shareholders’ equity | $ | 13,095,145 | $ | 12,956,596 | $ | 12,716,886 |
CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||||||
Columbia Banking System, Inc. | Three Months Ended | Twelve Months Ended | ||||||||||||||||||
Unaudited | December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Interest Income | (in thousands except per share) | |||||||||||||||||||
Loans | $ | 110,010 | $ | 109,748 | $ | 95,889 | $ | 428,197 | $ | 324,229 | ||||||||||
Taxable securities | 16,684 | 14,654 | 9,487 | 55,969 | 38,659 | |||||||||||||||
Tax-exempt securities | 3,005 | 3,069 | 2,920 | 12,201 | 11,045 | |||||||||||||||
Deposits in banks | 102 | 104 | 545 | 702 | 813 | |||||||||||||||
Total interest income | 129,801 | 127,575 | 108,841 | 497,069 | 374,746 | |||||||||||||||
Interest Expense | ||||||||||||||||||||
Deposits | 3,831 | 3,193 | 2,022 | 12,105 | 4,800 | |||||||||||||||
FHLB advances | 1,399 | 966 | 99 | 3,750 | 1,078 | |||||||||||||||
Subordinated debentures | 467 | 468 | 304 | 1,871 | 304 | |||||||||||||||
Other borrowings | 216 | 152 | 192 | 504 | 575 | |||||||||||||||
Total interest expense | 5,913 | 4,779 | 2,617 | 18,230 | 6,757 | |||||||||||||||
Net Interest Income | 123,888 | 122,796 | 106,224 | 478,839 | 367,989 | |||||||||||||||
Provision for loan and lease losses | 1,789 | 3,153 | 3,327 | 14,769 | 8,631 | |||||||||||||||
Net interest income after provision for loan and lease losses | 122,099 | 119,643 | 102,897 | 464,070 | 359,358 | |||||||||||||||
Noninterest Income | ||||||||||||||||||||
Deposit account and treasury management fees | 9,383 | 9,266 | 8,013 | 36,072 | 30,381 | |||||||||||||||
Card revenue | 3,576 | 3,714 | 6,967 | 19,719 | 25,627 | |||||||||||||||
Financial services and trust revenue | 3,211 | 2,975 | 2,958 | 12,135 | 11,478 | |||||||||||||||
Loan revenue | 2,344 | 3,282 | 2,663 | 11,866 | 12,399 | |||||||||||||||
Merchant processing revenue | — | — | — | — | 4,283 | |||||||||||||||
Bank owned life insurance | 1,467 | 1,402 | 1,377 | 6,007 | 5,380 | |||||||||||||||
Investment securities losses, net | (16 | ) | (62 | ) | (11 | ) | (89 | ) | (11 | ) | ||||||||||
Change in FDIC loss-sharing asset | — | — | — | — | (447 | ) | ||||||||||||||
Gain on sale of merchant card services portfolio | — | — | — | — | 14,000 | |||||||||||||||
Other | 437 | 442 | 1,614 | 2,546 | 6,552 | |||||||||||||||
Total noninterest income | 20,402 | 21,019 | 23,581 | 88,256 | 109,642 | |||||||||||||||
Noninterest Expense | ||||||||||||||||||||
Compensation and employee benefits | 51,261 | 49,419 | 50,473 | 200,199 | 169,674 | |||||||||||||||
Occupancy | 8,858 | 8,321 | 9,554 | 36,576 | 32,407 | |||||||||||||||
Merchant processing expense | — | — | — | — | 2,196 | |||||||||||||||
Advertising and promotion | 1,061 | 1,472 | 1,543 | 5,584 | 4,466 | |||||||||||||||
Data processing | 5,278 | 4,466 | 5,134 | 20,235 | 18,205 | |||||||||||||||
Legal and professional fees | 5,941 | 4,695 | 5,955 | 18,044 | 15,151 | |||||||||||||||
Taxes, licenses and fees | 1,514 | 1,562 | 1,279 | 6,061 | 4,773 | |||||||||||||||
Regulatory premiums | 932 | 904 | 884 | 3,710 | 3,183 | |||||||||||||||
Net cost (benefit) of operation of other real estate owned | (26 | ) | 485 | 46 | 1,218 | 468 | ||||||||||||||
Amortization of intangibles | 2,890 | 3,070 | 2,547 | 12,236 | 6,333 | |||||||||||||||
Other | 9,310 | 8,447 | 8,212 | 36,627 | 34,161 | |||||||||||||||
Total noninterest expense | 87,019 | 82,841 | 85,627 | 340,490 | 291,017 | |||||||||||||||
Income before income taxes | 55,482 | 57,821 | 40,851 | 211,836 | 177,983 | |||||||||||||||
Provision for income taxes | 10,734 | 11,406 | 25,123 | 38,954 | 65,155 | |||||||||||||||
Net Income | $ | 44,748 | $ | 46,415 | $ | 15,728 | $ | 172,882 | $ | 112,828 | ||||||||||
Earnings per common share | ||||||||||||||||||||
Basic | $ | 0.61 | $ | 0.63 | $ | 0.23 | $ | 2.36 | $ | 1.86 | ||||||||||
Diluted | $ | 0.61 | $ | 0.63 | $ | 0.23 | $ | 2.36 | $ | 1.86 | ||||||||||
Dividends declared per common share - regular | $ | 0.26 | $ | 0.26 | $ | 0.22 | $ | 1.00 | $ | 0.88 | ||||||||||
Dividends declared per common share - special | $ | 0.14 | $ | — | $ | — | $ | 0.14 | $ | — | ||||||||||
Dividends declared per common share - total | $ | 0.40 | $ | 0.26 | $ | 0.22 | $ | 1.14 | $ | 0.88 | ||||||||||
Weighted average number of common shares outstanding | 72,434 | 72,427 | 67,120 | 72,385 | 59,882 | |||||||||||||||
Weighted average number of diluted common shares outstanding | 72,438 | 72,432 | 67,125 | 72,390 | 59,888 |
FINANCIAL STATISTICS | ||||||||||||||||||||
Columbia Banking System, Inc. | Three Months Ended | Twelve Months Ended | ||||||||||||||||||
Unaudited | December 31, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||
2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Earnings | (dollars in thousands except per share amounts) | |||||||||||||||||||
Net interest income | $ | 123,888 | $ | 122,796 | $ | 106,224 | $ | 478,839 | $ | 367,989 | ||||||||||
Provision for loan and lease losses | $ | 1,789 | $ | 3,153 | $ | 3,327 | $ | 14,769 | $ | 8,631 | ||||||||||
Noninterest income | $ | 20,402 | $ | 21,019 | $ | 23,581 | $ | 88,256 | $ | 109,642 | ||||||||||
Noninterest expense | $ | 87,019 | $ | 82,841 | $ | 85,627 | $ | 340,490 | $ | 291,017 | ||||||||||
Acquisition-related expense (included in noninterest expense) | $ | 493 | $ | 1,081 | $ | 13,638 | $ | 8,661 | $ | 17,196 | ||||||||||
Net income | $ | 44,748 | $ | 46,415 | $ | 15,728 | $ | 172,882 | $ | 112,828 | ||||||||||
Per Common Share | ||||||||||||||||||||
Earnings (basic) | $ | 0.61 | $ | 0.63 | $ | 0.23 | $ | 2.36 | $ | 1.86 | ||||||||||
Earnings (diluted) | $ | 0.61 | $ | 0.63 | $ | 0.23 | $ | 2.36 | $ | 1.86 | ||||||||||
Book value | $ | 27.76 | $ | 27.05 | $ | 26.70 | $ | 27.76 | $ | 26.70 | ||||||||||
Tangible book value per common share (1) | $ | 16.68 | $ | 15.93 | $ | 15.42 | $ | 16.68 | $ | 15.42 | ||||||||||
Averages | ||||||||||||||||||||
Total assets | $ | 12,957,754 | $ | 12,805,131 | $ | 11,751,049 | $ | 12,725,086 | $ | 10,134,306 | ||||||||||
Interest-earning assets | $ | 11,458,470 | $ | 11,326,629 | $ | 10,453,097 | $ | 11,241,321 | $ | 9,098,276 | ||||||||||
Loans | $ | 8,441,354 | $ | 8,456,632 | $ | 7,749,420 | $ | 8,409,373 | $ | 6,682,259 | ||||||||||
Securities, including equity securities and FHLB stock | $ | 2,998,638 | $ | 2,849,495 | $ | 2,539,321 | $ | 2,790,700 | $ | 2,350,844 | ||||||||||
Deposits | $ | 10,560,280 | $ | 10,478,800 | $ | 9,804,456 | $ | 10,410,404 | $ | 8,482,350 | ||||||||||
Interest-bearing deposits | $ | 5,298,590 | $ | 5,376,300 | $ | 5,033,980 | $ | 5,367,602 | $ | 4,371,121 | ||||||||||
Interest-bearing liabilities | $ | 5,599,646 | $ | 5,620,997 | $ | 5,127,100 | $ | 5,614,827 | $ | 4,512,727 | ||||||||||
Noninterest-bearing deposits | $ | 5,261,690 | $ | 5,102,500 | $ | 4,770,476 | $ | 5,042,802 | $ | 4,111,229 | ||||||||||
Shareholders’ equity | $ | 1,988,981 | $ | 1,983,317 | $ | 1,754,745 | $ | 1,969,179 | $ | 1,410,056 | ||||||||||
Financial Ratios | ||||||||||||||||||||
Return on average assets | 1.38 | % | 1.45 | % | 0.54 | % | 1.36 | % | 1.11 | % | ||||||||||
Return on average common equity | 9.00 | % | 9.36 | % | 3.59 | % | 8.78 | % | 8.00 | % | ||||||||||
Return on average tangible common equity (1) | 16.00 | % | 16.74 | % | 6.37 | % | 15.85 | % | 12.38 | % | ||||||||||
Average equity to average assets | 15.35 | % | 15.49 | % | 14.93 | % | 15.47 | % | 13.91 | % | ||||||||||
Shareholders equity to total assets | 15.53 | % | 15.29 | % | 15.33 | % | 15.53 | % | 15.33 | % | ||||||||||
Tangible common shareholders’ equity to tangible assets (1) | 9.95 | % | 9.61 | % | 9.47 | % | 9.95 | % | 9.47 | % | ||||||||||
Net interest margin (tax equivalent) | 4.40 | % | 4.41 | % | 4.20 | % | 4.33 | % | 4.18 | % | ||||||||||
Efficiency ratio (tax equivalent) (2) | 59.31 | % | 56.67 | % | 63.93 | % | 59.06 | % | 59.07 | % | ||||||||||
Operating efficiency ratio (tax equivalent) (1) | 58.10 | % | 54.83 | % | 52.24 | % | 56.63 | % | 56.06 | % | ||||||||||
Noninterest expense ratio | 2.69 | % | 2.59 | % | 2.91 | % | 2.68 | % | 2.87 | % | ||||||||||
Core noninterest expense ratio (1) | 2.67 | % | 2.55 | % | 2.45 | % | 2.61 | % | 2.67 | % | ||||||||||
December 31, | September 30, | December 31, | ||||||||||||||||||
Period end | 2018 | 2018 | 2017 | |||||||||||||||||
Total assets | $ | 13,095,145 | $ | 12,956,596 | $ | 12,716,886 | ||||||||||||||
Loans, net of unearned income | $ | 8,391,511 | $ | 8,514,317 | $ | 8,358,657 | ||||||||||||||
Allowance for loan and lease losses | $ | 83,369 | $ | 83,787 | $ | 75,646 | ||||||||||||||
Securities, including equity securities and FHLB stock | $ | 3,193,408 | $ | 2,942,655 | $ | 2,753,271 | ||||||||||||||
Deposits | $ | 10,458,126 | $ | 10,603,957 | $ | 10,532,085 | ||||||||||||||
Core deposits | $ | 9,973,840 | $ | 10,084,687 | $ | 10,039,557 | ||||||||||||||
Shareholders’ equity | $ | 2,033,649 | $ | 1,981,395 | $ | 1,949,922 | ||||||||||||||
Nonperforming assets | ||||||||||||||||||||
Nonaccrual loans | $ | 54,842 | $ | 60,332 | $ | 66,189 | ||||||||||||||
Other real estate owned (“OREO”) and other personal property owned (“OPPO”) | 6,049 | 7,415 | 13,298 | |||||||||||||||||
Total nonperforming assets | $ | 60,891 | $ | 67,747 | $ | 79,487 | ||||||||||||||
Nonperforming loans to period-end loans | 0.65 | % | 0.71 | % | 0.79 | % | ||||||||||||||
Nonperforming assets to period-end assets | 0.46 | % | 0.52 | % | 0.63 | % | ||||||||||||||
Allowance for loan and lease losses to period-end loans | 0.99 | % | 0.98 | % | 0.91 | % | ||||||||||||||
Net loan charge-offs (recoveries) (3) | $ | 2,207 | $ | (484 | ) | $ | (703 | ) | ||||||||||||
(1) This is a non-GAAP measure. See section titled "Non-GAAP Financial Measures" on the last three pages of this earnings release for a reconciliation to the most comparable GAAP measure. | ||||||||||||||||||||
(2) Noninterest expense divided by the sum of net interest income on a tax equivalent basis and noninterest income on a tax equivalent basis. | ||||||||||||||||||||
(3) For the three months ended. |
QUARTERLY FINANCIAL STATISTICS | ||||||||||||||||||||
Columbia Banking System, Inc. | Three Months Ended | |||||||||||||||||||
Unaudited | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||||||||
Earnings | (dollars in thousands except per share) | |||||||||||||||||||
Net interest income | $ | 123,888 | $ | 122,796 | $ | 116,674 | $ | 115,481 | $ | 106,224 | ||||||||||
Provision for loan and lease losses | $ | 1,789 | $ | 3,153 | $ | 3,975 | $ | 5,852 | $ | 3,327 | ||||||||||
Noninterest income | $ | 20,402 | $ | 21,019 | $ | 23,692 | $ | 23,143 | $ | 23,581 | ||||||||||
Noninterest expense | $ | 87,019 | $ | 82,841 | $ | 84,643 | $ | 85,987 | $ | 85,627 | ||||||||||
Acquisition-related expense (included in noninterest expense) | $ | 493 | $ | 1,081 | $ | 2,822 | $ | 4,265 | $ | 13,638 | ||||||||||
Net income | $ | 44,748 | $ | 46,415 | $ | 41,749 | $ | 39,970 | $ | 15,728 | ||||||||||
Per Common Share | ||||||||||||||||||||
Earnings (basic) | $ | 0.61 | $ | 0.63 | $ | 0.57 | $ | 0.55 | $ | 0.23 | ||||||||||
Earnings (diluted) | $ | 0.61 | $ | 0.63 | $ | 0.57 | $ | 0.55 | $ | 0.23 | ||||||||||
Book value | $ | 27.76 | $ | 27.05 | $ | 26.83 | $ | 26.60 | $ | 26.70 | ||||||||||
Averages | ||||||||||||||||||||
Total assets | $ | 12,957,754 | $ | 12,805,131 | $ | 12,529,540 | $ | 12,603,144 | $ | 11,751,049 | ||||||||||
Interest-earning assets | $ | 11,458,470 | $ | 11,326,629 | $ | 11,052,807 | $ | 11,122,753 | $ | 10,453,097 | ||||||||||
Loans | $ | 8,441,354 | $ | 8,456,632 | $ | 8,389,230 | $ | 8,348,740 | $ | 7,749,420 | ||||||||||
Securities, including equity securities and FHLB stock | $ | 2,998,638 | $ | 2,849,495 | $ | 2,628,292 | $ | 2,682,250 | $ | 2,539,321 | ||||||||||
Deposits | $ | 10,560,280 | $ | 10,478,800 | $ | 10,264,822 | $ | 10,334,480 | $ | 9,804,456 | ||||||||||
Interest-bearing deposits | $ | 5,298,590 | $ | 5,376,300 | $ | 5,390,869 | $ | 5,405,730 | $ | 5,033,980 | ||||||||||
Interest-bearing liabilities | $ | 5,599,646 | $ | 5,620,997 | $ | 5,611,055 | $ | 5,627,853 | $ | 5,127,100 | ||||||||||
Noninterest-bearing deposits | $ | 5,261,690 | $ | 5,102,500 | $ | 4,873,953 | $ | 4,928,750 | $ | 4,770,476 | ||||||||||
Shareholders’ equity | $ | 1,988,981 | $ | 1,983,317 | $ | 1,954,552 | $ | 1,949,275 | $ | 1,754,745 | ||||||||||
Financial Ratios | ||||||||||||||||||||
Return on average assets | 1.38 | % | 1.45 | % | 1.33 | % | 1.27 | % | 0.54 | % | ||||||||||
Return on average common equity | 9.00 | % | 9.36 | % | 8.54 | % | 8.20 | % | 3.59 | % | ||||||||||
Average equity to average assets | 15.35 | % | 15.49 | % | 15.60 | % | 15.47 | % | 14.93 | % | ||||||||||
Shareholders’ equity to total assets | 15.53 | % | 15.29 | % | 15.56 | % | 15.55 | % | 15.33 | % | ||||||||||
Net interest margin (tax equivalent) | 4.40 | % | 4.41 | % | 4.29 | % | 4.22 | % | 4.20 | % | ||||||||||
Period end | ||||||||||||||||||||
Total assets | $ | 13,095,145 | $ | 12,956,596 | $ | 12,628,586 | $ | 12,530,636 | $ | 12,716,886 | ||||||||||
Loans, net of unearned income | $ | 8,391,511 | $ | 8,514,317 | $ | 8,454,107 | $ | 8,339,631 | $ | 8,358,657 | ||||||||||
Allowance for loan and lease losses | $ | 83,369 | $ | 83,787 | $ | 80,150 | $ | 79,827 | $ | 75,646 | ||||||||||
Securities, including equity securities and FHLB stock | $ | 3,193,408 | $ | 2,942,655 | $ | 2,665,131 | $ | 2,640,685 | $ | 2,753,271 | ||||||||||
Deposits | $ | 10,458,126 | $ | 10,603,957 | $ | 10,384,004 | $ | 10,395,523 | $ | 10,532,085 | ||||||||||
Core deposits | $ | 9,973,840 | $ | 10,084,687 | $ | 9,888,696 | $ | 9,897,185 | $ | 10,039,557 | ||||||||||
Shareholders’ equity | $ | 2,033,649 | $ | 1,981,395 | $ | 1,964,881 | $ | 1,947,923 | $ | 1,949,922 | ||||||||||
Goodwill | $ | 765,842 | $ | 765,842 | $ | 765,842 | $ | 765,842 | $ | 765,842 | ||||||||||
Other intangible assets, net | $ | 45,937 | $ | 48,827 | $ | 51,897 | $ | 54,985 | $ | 58,173 | ||||||||||
Nonperforming assets | ||||||||||||||||||||
Nonaccrual loans | $ | 54,842 | $ | 60,332 | $ | 69,504 | $ | 78,464 | $ | 66,189 | ||||||||||
OREO and OPPO | 6,049 | 7,415 | 7,080 | 11,507 | 13,298 | |||||||||||||||
Total nonperforming assets | $ | 60,891 | $ | 67,747 | $ | 76,584 | $ | 89,971 | $ | 79,487 | ||||||||||
Nonperforming loans to period-end loans | 0.65 | % | 0.71 | % | 0.82 | % | 0.94 | % | 0.79 | % | ||||||||||
Nonperforming assets to period-end assets | 0.46 | % | 0.52 | % | 0.61 | % | 0.72 | % | 0.63 | % | ||||||||||
Allowance for loan and lease losses to period-end loans | 0.99 | % | 0.98 | % | 0.95 | % | 0.96 | % | 0.91 | % | ||||||||||
Net loan charge-offs (recoveries) | $ | 2,207 | $ | (484 | ) | $ | 3,652 | $ | 1,671 | $ | (703 | ) |
LOAN PORTFOLIO COMPOSITION | ||||||||||||||||||||
Columbia Banking System, Inc. | ||||||||||||||||||||
Unaudited | December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||||||||
Loan Portfolio Composition - Dollars | (dollars in thousands) | |||||||||||||||||||
Commercial business | $ | 3,438,422 | $ | 3,554,147 | $ | 3,538,492 | $ | 3,402,162 | $ | 3,377,324 | ||||||||||
Real estate: | ||||||||||||||||||||
One-to-four family residential | 238,367 | 232,924 | 180,522 | 182,302 | 188,396 | |||||||||||||||
Commercial and multifamily residential | 3,846,027 | 3,786,615 | 3,758,207 | 3,776,709 | 3,825,739 | |||||||||||||||
Total real estate | 4,084,394 | 4,019,539 | 3,938,729 | 3,959,011 | 4,014,135 | |||||||||||||||
Real estate construction: | ||||||||||||||||||||
One-to-four family residential | 217,790 | 211,629 | 206,181 | 208,441 | 200,518 | |||||||||||||||
Commercial and multifamily residential | 284,394 | 349,328 | 387,951 | 385,339 | 371,931 | |||||||||||||||
Total real estate construction | 502,184 | 560,957 | 594,132 | 593,780 | 572,449 | |||||||||||||||
Consumer | 318,945 | 327,863 | 326,402 | 323,631 | 334,190 | |||||||||||||||
Purchased credit impaired | 89,760 | 95,936 | 101,782 | 109,299 | 112,670 | |||||||||||||||
Subtotal loans | 8,433,705 | 8,558,442 | 8,499,537 | 8,387,883 | 8,410,768 | |||||||||||||||
Less: Net unearned income | (42,194 | ) | (44,125 | ) | (45,430 | ) | (48,252 | ) | (52,111 | ) | ||||||||||
Loans, net of unearned income | 8,391,511 | 8,514,317 | 8,454,107 | 8,339,631 | 8,358,657 | |||||||||||||||
Less: Allowance for loan and lease losses | (83,369 | ) | (83,787 | ) | (80,150 | ) | (79,827 | ) | (75,646 | ) | ||||||||||
Total loans, net | 8,308,142 | 8,430,530 | 8,373,957 | 8,259,804 | 8,283,011 | |||||||||||||||
Loans held for sale | $ | 3,849 | $ | 5,275 | $ | 6,773 | $ | 4,312 | $ | 5,766 |
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||
Loan Portfolio Composition - Percentages | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||
Commercial business | 41.0 | % | 41.7 | % | 41.9 | % | 40.8 | % | 40.4 | % | |||||
Real estate: | |||||||||||||||
One-to-four family residential | 2.8 | % | 2.7 | % | 2.1 | % | 2.2 | % | 2.3 | % | |||||
Commercial and multifamily residential | 45.8 | % | 44.5 | % | 44.4 | % | 45.3 | % | 45.8 | % | |||||
Total real estate | 48.6 | % | 47.2 | % | 46.5 | % | 47.5 | % | 48.1 | % | |||||
Real estate construction: | |||||||||||||||
One-to-four family residential | 2.6 | % | 2.5 | % | 2.4 | % | 2.5 | % | 2.4 | % | |||||
Commercial and multifamily residential | 3.4 | % | 4.1 | % | 4.6 | % | 4.6 | % | 4.4 | % | |||||
Total real estate construction | 6.0 | % | 6.6 | % | 7.0 | % | 7.1 | % | 6.8 | % | |||||
Consumer | 3.8 | % | 3.9 | % | 3.9 | % | 3.9 | % | 4.0 | % | |||||
Purchased credit impaired | 1.1 | % | 1.1 | % | 1.2 | % | 1.3 | % | 1.3 | % | |||||
Subtotal loans | 100.5 | % | 100.5 | % | 100.5 | % | 100.6 | % | 100.6 | % | |||||
Less: Net unearned income | (0.5 | )% | (0.5 | )% | (0.5 | )% | (0.6 | )% | (0.6 | )% | |||||
Loans, net of unearned income | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
DEPOSIT COMPOSITION | ||||||||||||||||||||
Columbia Banking System, Inc. | ||||||||||||||||||||
Unaudited | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||||||||
Deposit Composition - Dollars | (dollars in thousands) | |||||||||||||||||||
Core deposits: | ||||||||||||||||||||
Demand and other non-interest bearing | $ | 5,227,216 | $ | 5,250,222 | $ | 4,953,993 | $ | 4,927,226 | $ | 5,081,901 | ||||||||||
Interest bearing demand | 1,244,254 | 1,260,543 | 1,278,686 | 1,328,756 | 1,265,212 | |||||||||||||||
Money market | 2,367,964 | 2,413,185 | 2,513,648 | 2,477,487 | 2,543,712 | |||||||||||||||
Savings | 890,557 | 908,945 | 875,707 | 886,171 | 861,941 | |||||||||||||||
Certificates of deposit, less than $250,000 | 243,849 | 251,792 | 266,662 | 277,545 | 286,791 | |||||||||||||||
Total core deposits | 9,973,840 | 10,084,687 | 9,888,696 | 9,897,185 | 10,039,557 | |||||||||||||||
Certificates of deposit, $250,000 or more | 89,473 | 90,387 | 91,578 | 96,333 | 100,399 | |||||||||||||||
Certificates of deposit insured by CDARS® | 23,580 | 23,841 | 23,492 | 23,191 | 25,374 | |||||||||||||||
Brokered certificates of deposit | 57,930 | 65,476 | 68,870 | 76,931 | 78,481 | |||||||||||||||
Reciprocal money market accounts | 313,692 | 340,044 | 311,935 | 302,544 | 289,031 | |||||||||||||||
Subtotal | 10,458,515 | 10,604,435 | 10,384,571 | 10,396,184 | 10,532,842 | |||||||||||||||
Premium (discount) resulting from acquisition date fair value adjustment | (389 | ) | (478 | ) | (567 | ) | (661 | ) | (757 | ) | ||||||||||
Total deposits | $ | 10,458,126 | $ | 10,603,957 | $ | 10,384,004 | $ | 10,395,523 | $ | 10,532,085 |
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||
Deposit Composition - Percentages | 2018 | 2018 | 2018 | 2018 | 2017 | ||||||||||
Core deposits: | |||||||||||||||
Demand and other non-interest bearing | 50.0 | % | 49.5 | % | 47.7 | % | 47.4 | % | 48.2 | % | |||||
Interest bearing demand | 11.9 | % | 11.9 | % | 12.3 | % | 12.8 | % | 12.0 | % | |||||
Money market | 22.6 | % | 22.8 | % | 24.2 | % | 23.8 | % | 24.2 | % | |||||
Savings | 8.5 | % | 8.6 | % | 8.4 | % | 8.5 | % | 8.2 | % | |||||
Certificates of deposit, less than $250,000 | 2.3 | % | 2.4 | % | 2.6 | % | 2.7 | % | 2.7 | % | |||||
Total core deposits | 95.3 | % | 95.2 | % | 95.2 | % | 95.2 | % | 95.3 | % | |||||
Certificates of deposit, $250,000 or more | 0.9 | % | 0.9 | % | 0.9 | % | 0.9 | % | 1.0 | % | |||||
Certificates of deposit insured by CDARS® | 0.2 | % | 0.2 | % | 0.2 | % | 0.2 | % | 0.2 | % | |||||
Brokered certificates of deposit | 0.6 | % | 0.6 | % | 0.7 | % | 0.7 | % | 0.7 | % | |||||
Reciprocal money market accounts | 3.0 | % | 3.1 | % | 3.0 | % | 3.0 | % | 2.8 | % | |||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
AVERAGE BALANCES AND RATES | ||||||||||||||||||||||
Columbia Banking System, Inc. | ||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||||
December 31, 2018 | December 31, 2017 | |||||||||||||||||||||
Average Balances | Interest Earned / Paid | Average Rate | Average Balances | Interest Earned / Paid | Average Rate | |||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||
Loans, net (1)(2) | $ | 8,441,354 | $ | 111,239 | 5.27 | % | $ | 7,749,420 | $ | 97,720 | 5.04 | % | ||||||||||
Taxable securities | 2,493,683 | 16,684 | 2.68 | % | 2,035,788 | 9,487 | 1.86 | % | ||||||||||||||
Tax exempt securities (2) | 504,955 | 3,805 | 3.01 | % | 503,533 | 4,492 | 3.57 | % | ||||||||||||||
Interest-earning deposits with banks | 18,478 | 102 | 2.21 | % | 164,356 | 545 | 1.33 | % | ||||||||||||||
Total interest-earning assets | 11,458,470 | $ | 131,830 | 4.60 | % | 10,453,097 | $ | 112,244 | 4.30 | % | ||||||||||||
Other earning assets | 230,601 | 202,246 | ||||||||||||||||||||
Noninterest-earning assets | 1,268,683 | 1,095,706 | ||||||||||||||||||||
Total assets | $ | 12,957,754 | $ | 11,751,049 | ||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||
Certificates of deposit | $ | 427,592 | $ | 587 | 0.55 | % | $ | 457,285 | $ | 374 | 0.33 | % | ||||||||||
Savings accounts | 897,976 | 36 | 0.02 | % | 835,952 | 39 | 0.02 | % | ||||||||||||||
Interest-bearing demand | 1,230,351 | 730 | 0.24 | % | 1,168,496 | 376 | 0.13 | % | ||||||||||||||
Money market accounts | 2,742,671 | 2,478 | 0.36 | % | 2,572,247 | 1,233 | 0.19 | % | ||||||||||||||
Total interest-bearing deposits | 5,298,590 | 3,831 | 0.29 | % | 5,033,980 | 2,022 | 0.16 | % | ||||||||||||||
FHLB advances | 215,606 | 1,399 | 2.60 | % | 9,817 | 99 | 4.03 | % | ||||||||||||||
Subordinated debentures | 35,484 | 467 | 5.26 | % | 23,427 | 304 | 5.19 | % | ||||||||||||||
Other borrowings | 49,966 | 216 | 1.73 | % | 59,876 | 192 | 1.28 | % | ||||||||||||||
Total interest-bearing liabilities | 5,599,646 | $ | 5,913 | 0.42 | % | 5,127,100 | $ | 2,617 | 0.20 | % | ||||||||||||
Noninterest-bearing deposits | 5,261,690 | 4,770,476 | ||||||||||||||||||||
Other noninterest-bearing liabilities | 107,437 | 98,728 | ||||||||||||||||||||
Shareholders’ equity | 1,988,981 | 1,754,745 | ||||||||||||||||||||
Total liabilities & shareholders’ equity | $ | 12,957,754 | $ | 11,751,049 | ||||||||||||||||||
Net interest income (tax equivalent) | $ | 125,917 | $ | 109,627 | ||||||||||||||||||
Net interest margin (tax equivalent) | 4.40 | % | 4.20 | % |
(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 acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $2.5 million and $1.9 million for the three month periods ended December 31, 2018 and December 31, 2017, respectively. The incremental accretion on acquired loans was $2.6 million and $2.7 million for the three months ended December 31, 2018 and 2017, respectively. |
(2) | Tax-exempt income is calculated on a tax equivalent basis at a rate of 21% for 2018 and 35% for 2017. The tax equivalent yield adjustment to interest earned on loans was $1.2 million and $1.8 million for the three months ended December 31, 2018 and 2017, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $800 thousand and $1.6 million for the three month periods ended December 31, 2018 and 2017, respectively. |
AVERAGE BALANCES AND RATES | ||||||||||||||||||||||
Columbia Banking System, Inc. | ||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||||||||
December 31, 2018 | September 30, 2018 | |||||||||||||||||||||
Average Balances | Interest Earned / Paid | Average Rate | Average Balances | Interest Earned / Paid | Average Rate | |||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||
Loans, net (1)(2) | $ | 8,441,354 | $ | 111,239 | 5.27 | % | $ | 8,456,632 | $ | 110,925 | 5.25 | % | ||||||||||
Taxable securities | 2,493,683 | 16,684 | 2.68 | % | 2,336,405 | 14,654 | 2.51 | % | ||||||||||||||
Tax exempt securities (2) | 504,955 | 3,805 | 3.01 | % | 513,090 | 3,885 | 3.03 | % | ||||||||||||||
Interest-earning deposits with banks | 18,478 | 102 | 2.21 | % | 20,502 | 104 | 2.03 | % | ||||||||||||||
Total interest-earning assets | 11,458,470 | $ | 131,830 | 4.60 | % | 11,326,629 | $ | 129,568 | 4.58 | % | ||||||||||||
Other earning assets | 230,601 | 228,332 | ||||||||||||||||||||
Noninterest-earning assets | 1,268,683 | 1,250,170 | ||||||||||||||||||||
Total assets | $ | 12,957,754 | $ | 12,805,131 | ||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||
Certificates of deposit | $ | 427,592 | $ | 587 | 0.55 | % | $ | 440,196 | $ | 544 | 0.49 | % | ||||||||||
Savings accounts | 897,976 | 36 | 0.02 | % | 889,793 | 31 | 0.01 | % | ||||||||||||||
Interest-bearing demand | 1,230,351 | 730 | 0.24 | % | 1,246,592 | 689 | 0.22 | % | ||||||||||||||
Money market accounts | 2,742,671 | 2,478 | 0.36 | % | 2,799,719 | 1,929 | 0.28 | % | ||||||||||||||
Total interest-bearing deposits | 5,298,590 | 3,831 | 0.29 | % | 5,376,300 | 3,193 | 0.24 | % | ||||||||||||||
FHLB advances | 215,606 | 1,399 | 2.60 | % | 167,531 | 966 | 2.31 | % | ||||||||||||||
Subordinated debentures | 35,484 | 467 | 5.26 | % | 35,530 | 468 | 5.27 | % | ||||||||||||||
Other borrowings | 49,966 | 216 | 1.73 | % | 41,636 | 152 | 1.46 | % | ||||||||||||||
Total interest-bearing liabilities | 5,599,646 | $ | 5,913 | 0.42 | % | 5,620,997 | $ | 4,779 | 0.34 | % | ||||||||||||
Noninterest-bearing deposits | 5,261,690 | 5,102,500 | ||||||||||||||||||||
Other noninterest-bearing liabilities | 107,437 | 98,317 | ||||||||||||||||||||
Shareholders’ equity | 1,988,981 | 1,983,317 | ||||||||||||||||||||
Total liabilities & shareholders’ equity | $ | 12,957,754 | $ | 12,805,131 | ||||||||||||||||||
Net interest income (tax equivalent) | $ | 125,917 | $ | 124,789 | ||||||||||||||||||
Net interest margin (tax equivalent) | 4.40 | % | 4.41 | % |
(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 acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $2.5 million for both the three month periods ended December 31, 2018 and September 30, 2018. The incremental accretion on acquired loans was $2.6 million and $3.2 million for the three months ended December 31, 2018 and September 30, 2018, respectively. |
(2) | Tax-exempt income is calculated on a tax equivalent basis at a rate of 21% for 2018. The tax equivalent yield adjustment to interest earned on loans was $1.2 million and $1.2 million for the three months ended December 31, 2018 and September 30, 2018, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $800 thousand and $816 thousand for the three month periods ended December 31, 2018 and September 30, 2018, respectively. |
AVERAGE BALANCES AND RATES | ||||||||||||||||||||||
Columbia Banking System, Inc. | ||||||||||||||||||||||
Unaudited | ||||||||||||||||||||||
Twelve Months Ended | Twelve Months Ended | |||||||||||||||||||||
December 31, 2018 | December 31, 2017 | |||||||||||||||||||||
Average Balances | Interest Earned / Paid | Average Rate | Average Balances | Interest Earned / Paid | Average Rate | |||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||
Loans, net (1)(2) | $ | 8,409,373 | $ | 432,781 | 5.15 | % | $ | 6,682,259 | $ | 330,400 | 4.94 | % | ||||||||||
Taxable securities | 2,275,892 | 55,969 | 2.46 | % | 1,886,128 | 38,659 | 2.05 | % | ||||||||||||||
Tax exempt securities (2) | 514,808 | 15,445 | 3.00 | % | 464,716 | 16,992 | 3.66 | % | ||||||||||||||
Interest-earning deposits with banks | 41,248 | 702 | 1.70 | % | 65,173 | 813 | 1.25 | % | ||||||||||||||
Total interest-earning assets | 11,241,321 | $ | 504,897 | 4.49 | % | 9,098,276 | $ | 386,864 | 4.25 | % | ||||||||||||
Other earning assets | 224,595 | 181,792 | ||||||||||||||||||||
Noninterest-earning assets | 1,259,170 | 854,238 | ||||||||||||||||||||
Total assets | $ | 12,725,086 | $ | 10,134,306 | ||||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||||||||
Certificates of deposit | $ | 452,756 | $ | 2,206 | 0.49 | % | $ | 406,406 | $ | 656 | 0.16 | % | ||||||||||
Savings accounts | 885,433 | 138 | 0.02 | % | 774,340 | 96 | 0.01 | % | ||||||||||||||
Interest-bearing demand | 1,256,205 | 2,562 | 0.20 | % | 1,031,719 | 950 | 0.09 | % | ||||||||||||||
Money market accounts | 2,773,208 | 7,199 | 0.26 | % | 2,158,656 | 3,098 | 0.14 | % | ||||||||||||||
Total interest-bearing deposits | 5,367,602 | 12,105 | 0.23 | % | 4,371,121 | 4,800 | 0.11 | % | ||||||||||||||
FHLB advances | 166,577 | 3,750 | 2.25 | % | 79,788 | 1,078 | 1.35 | % | ||||||||||||||
Subordinated debentures | 35,553 | 1,871 | 5.26 | % | 5,905 | 304 | 5.15 | % | ||||||||||||||
Other borrowings | 45,095 | 504 | 1.12 | % | 55,913 | 575 | 1.03 | % | ||||||||||||||
Total interest-bearing liabilities | 5,614,827 | $ | 18,230 | 0.32 | % | 4,512,727 | $ | 6,757 | 0.15 | % | ||||||||||||
Noninterest-bearing deposits | 5,042,802 | 4,111,229 | ||||||||||||||||||||
Other noninterest-bearing liabilities | 98,278 | 100,294 | ||||||||||||||||||||
Shareholders’ equity | 1,969,179 | 1,410,056 | ||||||||||||||||||||
Total liabilities & shareholders’ equity | $ | 12,725,086 | $ | 10,134,306 | ||||||||||||||||||
Net interest income (tax equivalent) | $ | 486,667 | $ | 380,107 | ||||||||||||||||||
Net interest margin (tax equivalent) | 4.33 | % | 4.18 | % |
(1) | Nonaccrual loans have been included in the table as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $9.3 million and $7.1 million for the twelve months ended December 31, 2018 and 2017, respectively. The incremental accretion on acquired loans was $12.6 million and $12.8 million for the twelve months ended December 31, 2018 and 2017, respectively. |
(2) | Tax-exempt income is calculated on a tax equivalent basis at a rate of 21% for 2018 and 35% for 2017. The tax equivalent yield adjustment to interest earned on loans was $4.6 million and $6.2 million for the twelve months ended December 31, 2018 and 2017, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $3.2 million and $5.9 million for the twelve months ended December 31, 2018 and 2017, respectively. |
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Operating net interest margin non-GAAP reconciliation: | (dollars in thousands) | |||||||||||||||||||
Net interest income (tax equivalent) (1) | $ | 125,917 | $ | 124,789 | $ | 109,627 | $ | 486,667 | $ | 380,107 | ||||||||||
Adjustments to arrive at operating net interest income (tax equivalent): | ||||||||||||||||||||
Incremental accretion income on FDIC purchased credit impaired loans | (395 | ) | (585 | ) | (265 | ) | (1,635 | ) | (4,107 | ) | ||||||||||
Incremental accretion income on other acquired loans | (2,218 | ) | (2,643 | ) | (2,482 | ) | (10,921 | ) | (8,689 | ) | ||||||||||
Premium amortization on acquired securities | 1,671 | 1,859 | 1,978 | 7,736 | 6,636 | |||||||||||||||
Correction of immaterial error - securities premium amortization | — | — | 1,771 | — | 1,771 | |||||||||||||||
Interest reversals on nonaccrual loans | 417 | 477 | 443 | 1,564 | 1,766 | |||||||||||||||
Operating net interest income (tax equivalent) (1) | $ | 125,392 | $ | 123,897 | $ | 111,072 | $ | 483,411 | $ | 377,484 | ||||||||||
Average interest earning assets | $ | 11,458,470 | $ | 11,326,629 | $ | 10,453,097 | $ | 11,241,321 | $ | 9,098,276 | ||||||||||
Net interest margin (tax equivalent) (1) | 4.40 | % | 4.41 | % | 4.20 | % | 4.33 | % | 4.18 | % | ||||||||||
Operating net interest margin (tax equivalent) (1) | 4.38 | % | 4.38 | % | 4.25 | % | 4.30 | % | 4.15 | % |
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Operating efficiency ratio non-GAAP reconciliation: | (dollars in thousands) | |||||||||||||||||||
Noninterest expense (numerator A) | $ | 87,019 | $ | 82,841 | $ | 85,627 | $ | 340,490 | $ | 291,017 | ||||||||||
Adjustments to arrive at operating noninterest expense: | ||||||||||||||||||||
Acquisition-related expenses | (493 | ) | (1,081 | ) | (13,638 | ) | (8,661 | ) | (17,196 | ) | ||||||||||
Net benefit (cost) of operation of OREO and OPPO | (23 | ) | (485 | ) | (46 | ) | (1,262 | ) | (466 | ) | ||||||||||
FDIC clawback liability recovery | — | — | — | — | 54 | |||||||||||||||
Loss on asset disposals | (166 | ) | (110 | ) | (56 | ) | (277 | ) | (70 | ) | ||||||||||
Termination of FDIC loss share agreements charge | — | — | — | — | (2,409 | ) | ||||||||||||||
State of Washington Business and Occupation (“B&O”) taxes | (1,410 | ) | (1,478 | ) | (1,167 | ) | (5,664 | ) | (4,326 | ) | ||||||||||
Operating noninterest expense (numerator B) | $ | 84,927 | $ | 79,687 | $ | 70,720 | $ | 324,626 | $ | 266,604 | ||||||||||
Net interest income (tax equivalent) (1) | $ | 125,917 | $ | 124,789 | $ | 109,627 | $ | 486,667 | $ | 380,107 | ||||||||||
Noninterest income | 20,402 | 21,019 | 23,581 | 88,256 | 109,642 | |||||||||||||||
Bank owned life insurance tax equivalent adjustment | 390 | 373 | 741 | 1,597 | 2,897 | |||||||||||||||
Total revenue (tax equivalent) (denominator A) | $ | 146,709 | $ | 146,181 | $ | 133,949 | $ | 576,520 | $ | 492,646 | ||||||||||
Operating net interest income (tax equivalent) (1) | $ | 125,392 | $ | 123,897 | $ | 111,072 | $ | 483,411 | $ | 377,484 | ||||||||||
Adjustments to arrive at operating noninterest income (tax equivalent): | ||||||||||||||||||||
Investment securities losses, net | 16 | 62 | 11 | 89 | 11 | |||||||||||||||
Gain on asset disposals | (30 | ) | (29 | ) | (34 | ) | (141 | ) | (357 | ) | ||||||||||
Mortgage loan repurchase liability adjustment | — | — | — | — | (573 | ) | ||||||||||||||
Change in FDIC loss-sharing asset | — | — | — | — | 447 | |||||||||||||||
Gain on sale of merchant card services portfolio | — | — | — | — | (14,000 | ) | ||||||||||||||
Operating noninterest income (tax equivalent) | 20,778 | 21,425 | 24,299 | 89,801 | 98,067 | |||||||||||||||
Total operating revenue (tax equivalent) (denominator B) | $ | 146,170 | $ | 145,322 | $ | 135,371 | $ | 573,212 | $ | 475,551 | ||||||||||
Efficiency ratio (tax equivalent) (numerator A/denominator A) | 59.31 | % | 56.67 | % | 63.93 | % | 59.06 | % | 59.07 | % | ||||||||||
Operating efficiency ratio (tax equivalent) (numerator B/denominator B) | 58.10 | % | 54.83 | % | 52.24 | % | 56.63 | % | 56.06 | % |
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Core noninterest expense ratio non-GAAP reconciliation: | (dollars in thousands) | |||||||||||||||||||
Noninterest expense (numerator A) | $ | 87,019 | $ | 82,841 | $ | 85,627 | $ | 340,490 | $ | 291,017 | ||||||||||
Adjustments to arrive at core noninterest expense: | ||||||||||||||||||||
FDIC clawback liability recovery | — | — | — | — | 54 | |||||||||||||||
Acquisition-related expenses | (493 | ) | (1,081 | ) | (13,638 | ) | (8,661 | ) | (17,196 | ) | ||||||||||
Net benefit (cost) of operation of OREO and OPPO (1) | — | — | (46 | ) | — | (466 | ) | |||||||||||||
Termination of FDIC loss share agreements charge | — | — | — | — | (2,409 | ) | ||||||||||||||
Core noninterest expense (numerator B) | $ | 86,526 | $ | 81,760 | $ | 71,943 | $ | 331,829 | $ | 271,000 | ||||||||||
Average assets (denominator) | $ | 12,957,754 | $ | 12,805,131 | $ | 11,751,049 | $ | 12,725,086 | $ | 10,134,306 | ||||||||||
Noninterest expense ratio (numerator A/denominator) (2) | 2.69 | % | 2.59 | % | 2.91 | % | 2.68 | % | 2.87 | % | ||||||||||
Core noninterest expense ratio (numerator B/denominator) (3) | 2.67 | % | 2.55 | % | 2.45 | % | 2.61 | % | 2.67 | % |
December 31, | September 30, | December 31, | ||||||||||
2018 | 2018 | 2017 | ||||||||||
Tangible common equity ratio and tangible book value per common share non-GAAP reconciliation: | (dollars in thousands) | |||||||||||
Shareholders’ equity (numerator A) | $ | 2,033,649 | $ | 1,981,395 | $ | 1,949,922 | ||||||
Adjustments to arrive at tangible common equity: | ||||||||||||
Goodwill | (765,842 | ) | (765,842 | ) | (765,842 | ) | ||||||
Other intangible assets, net | (45,937 | ) | (48,827 | ) | (58,173 | ) | ||||||
Tangible common equity (numerator B) | $ | 1,221,870 | $ | 1,166,726 | $ | 1,125,907 | ||||||
Total assets (denominator A) | $ | 13,095,145 | $ | 12,956,596 | $ | 12,716,886 | ||||||
Adjustments to arrive at tangible assets: | ||||||||||||
Goodwill | (765,842 | ) | (765,842 | ) | (765,842 | ) | ||||||
Other intangible assets, net | (45,937 | ) | (48,827 | ) | (58,173 | ) | ||||||
Tangible assets (denominator B) | $ | 12,283,366 | $ | 12,141,927 | $ | 11,892,871 | ||||||
Shareholders’ equity to total assets (numerator A/denominator A) | 15.53 | % | 15.29 | % | 15.33 | % | ||||||
Tangible common shareholders’ equity to tangible assets (numerator B/denominator B) | 9.95 | % | 9.61 | % | 9.47 | % | ||||||
Common shares outstanding (denominator C) | 73,249 | 73,260 | 73,020 | |||||||||
Book value per common share (numerator A/denominator C) | $ | 27.76 | $ | 27.05 | $ | 26.70 | ||||||
Tangible book value per common share (numerator B/denominator C) | $ | 16.68 | $ | 15.93 | $ | 15.42 |
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
2018 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Return on average tangible common equity non-GAAP reconciliation: | (dollars in thousands) | |||||||||||||||||||
Net income (numerator A) | $ | 44,748 | $ | 46,415 | $ | 15,728 | $ | 172,882 | $ | 112,828 | ||||||||||
Adjustments to arrive at tangible income applicable to common shareholders: | ||||||||||||||||||||
Amortization of intangibles | 2,890 | 3,070 | 2,547 | 12,236 | 6,333 | |||||||||||||||
Tax effect on intangible amortization | (607 | ) | (645 | ) | (891 | ) | (2,570 | ) | (2,217 | ) | ||||||||||
Tangible income applicable to common shareholders (numerator B) | $ | 47,031 | $ | 48,840 | $ | 17,384 | 182,548 | $ | 116,944 | |||||||||||
Average shareholders’ equity (denominator A) | $ | 1,988,981 | $ | 1,983,317 | $ | 1,754,745 | 1,969,179 | $ | 1,410,056 | |||||||||||
Adjustments to arrive at average tangible common equity: | ||||||||||||||||||||
Average preferred equity | — | — | — | — | (67 | ) | ||||||||||||||
Average intangibles | (813,145 | ) | (816,128 | ) | (662,815 | ) | (817,685 | ) | (465,044 | ) | ||||||||||
Average tangible common equity (denominator B) | $ | 1,175,836 | $ | 1,167,189 | $ | 1,091,930 | $ | 1,151,494 | $ | 944,945 | ||||||||||
Return on average common equity (numerator A/denominator A) (1) | 9.00 | % | 9.36 | % | 3.59 | % | 8.78 | % | 8.00 | % | ||||||||||
Return on average tangible common equity (numerator B/denominator B) (2) | 16.00 | % | 16.74 | % | 6.37 | % | 15.85 | % | 12.38 | % |
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