COLUMBIA BANKING SYSTEM, INC. TACOMA, Wash., Jan. 26, 2017 /PRNewswire/ -- Melanie Dressel, President and Chief Executive Officer of Columbia Banking System and Columbia Bank (NASDAQ: COLB) ("Columbia"), said today upon the release of Columbia's fourth quarter and full year 2016 earnings, "We are very pleased with our results for the fourth quarter, which continued to build upon our second and third quarter performance. Record loan production during the year, good credit quality metrics, and a continued focus on improved operating leverage helped us achieve record fourth quarter net income." Ms. Dressel continued, "I was also inspired by the shared commitment of our team, customers and business partners for helping to care for those who are truly in need. It's a privilege to give back to each of the communities we serve through our annual Warm Hearts Winter Drive."
Balance Sheet
Total assets at December 31, 2016 were $9.51 billion, a decrease of $77.1 million from September 30, 2016. Loans declined $46.3 million during the quarter as payments and a seasonal decline in line utilization offset strong loan originations of $294.1 million. Loan production was diversified across the portfolio sectors, with growth primarily centered in commercial business loans. Securities available for sale were $2.28 billion at December 31, 2016, a decrease of $81.5 million, or 3% from $2.36 billion at September 30, 2016. Total deposits at December 31, 2016 were $8.06 billion, relatively unchanged from September 30, 2016. Core deposits comprised 96% of total deposits and were $7.75 billion at December 31, 2016, a decrease of $59.5 million from September 30, 2016. The average cost of total deposits for the quarter was 0.04%, unchanged from the third quarter of 2016.
Income Statement
Net Interest Income
Net interest income for the fourth quarter of 2016 was $85.7 million, an increase of $165 thousand and $3.9 million from the linked and prior year periods, respectively. The linked quarter increase was principally from taxable securities income, whose yields benefited from a market-driven reduction in premium amortization. The increase from the prior year period was due to higher loan and securities volumes as well as the previously noted reduction in securities premium amortization. Incremental accretion income from purchased loans in the current period was $1.7 million lower than the prior year period. For additional information regarding net interest income, see the "Average Balances and Rates" table.
Noninterest Income
Noninterest income was $22.3 million for the fourth quarter of 2016, a decrease of $836 thousand compared to $23.2 million for the third quarter of 2016. The linked quarter decrease was due to lower card and merchant processing revenue as well as investment securities gains, partially offset by higher other noninterest income. Noninterest income was favorably impacted by a $391 thousand adjustment to our estimated mortgage repurchase liability which was recognized with our acquisition of West Coast Bank. Compared to the fourth quarter of 2015, noninterest income decreased by $2.4 million due to the $3.1 million adjustment recorded in the prior year period related to the previously noted mortgage repurchase liability. This decrease was partially offset by lower expenses from the FDIC loss-sharing asset. Additional details of the components of the change in the FDIC loss-sharing asset are provided in tabular format below.
The change in the FDIC loss-sharing asset has been a significant component of noninterest income but, as our larger loss-sharing agreements have expired, the significance continues to diminish. The following table reflects the income statement components of the change in the FDIC loss-sharing asset:
Three Months Ended Twelve Months Ended
December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
(in thousands)
Adjustments reflected in
income
Amortization, net $(299) $(315) $(1,098) (2,829) (6,184)
Loan impairment
(recapture) (92) 266 855 301 2,268
Sales of other real estate
owned 77 (49) (484) 148 (1,237)
Valuation adjustments on
other real estate owned - - 10 (22) 1,158
Other (74) (6) (314) (183) (15)
--- --- ----
Change in FDIC loss-
sharing asset $(388) $(104) $(1,031) $(2,585) $(4,010)
===== ===== ======= ======= =======
Noninterest Expense
Total noninterest expense for the fourth quarter of 2016 was $65.0 million, a decrease of $2.3 million from $67.3 million for the third quarter of 2016. The decrease was due to lower advertising and occupancy costs in the current quarter. During the prior quarter we incurred increased advertising costs from production and broadcast of refreshed television commercials as well as occupancy costs associated with the consolidation of a branch location.
Compared to the fourth quarter of 2015, noninterest expense decreased $1.9 million, or 3%, from $66.9 million. After removing the effect of $291 thousand in acquisition-related expenses from the current quarter and $1.9 million from the prior year period, noninterest expense was relatively unchanged from the fourth quarter of 2015. Compensation expense was higher in the current quarter due to recognizing additional incentive expense relative to the record loan production, deposit growth and financial performance. However, the increased compensation costs were substantially offset by decreases in several noninterest expense line items, the largest being occupancy.
Net Interest Margin ("NIM")
Columbia's net interest margin (tax equivalent) for the fourth quarter of 2016 was 4.11%, a decrease of 2 basis points from the linked quarter and a decline of 14 basis points from the prior year period. The decrease from the linked quarter was due to higher volume of interest-earning deposits with banks as well as lower incremental accretion income from acquired loans. The decrease from the prior year period was due to both lower incremental accretion income from acquired loans and lower yielding originated loans. Incremental accretion income was $4.3 million in the current period compared to $6.0 million in the prior year quarter.
Columbia's operating net interest margin (tax equivalent)((1) )was 3.99% for the fourth quarter of 2016, a decline of 4 and 10 basis points from the linked and prior year periods, respectively. Higher volumes of deposits with banks contributed to the decrease from both the linked and prior year periods. Lower yielding originated loans also contributed to the decrease from the prior year period.
Clint Stein, Columbia's Executive Vice President and Chief Financial Officer, commented, "We held higher than normal balances of overnight funds throughout the quarter to maintain balance sheet flexibility through year end." Mr. Stein continued, "The impact of the additional overnight funds was a reduction in our net interest margin of three basis points."
The following table shows the impact to interest income resulting from income accretion on acquired loan portfolios as well as the net interest margin and operating net interest margin:
Three Months Ended Twelve Months Ended
December 31, September 30, June 30, March 31, December 31, December 31, December 31,
2016 2016 2016 2016 2015 2016 2015
---- ---- ---- ---- ---- ---- ----
(dollars in thousands)
Incremental
accretion income
due to:
FDIC purchased
credit impaired
loans $1,199 $1,816 $1,300 $1,657 $2,200 $5,972 $9,096
Other FDIC
acquired loans
(2) - - - - 68 - 234
Other acquired
loans 3,087 2,749 3,074 3,073 3,746 11,983 17,862
----- ----- ----- ----- ----- ------ ------
Incremental
accretion income $4,286 $4,565 $4,374 $4,730 $6,014 $17,955 $27,192
====== ====== ====== ====== ====== ======= =======
Net interest
margin (tax
equivalent) 4.11% 4.13% 4.10% 4.13% 4.25% 4.12% 4.35%
Operating net
interest margin
(tax equivalent)
(1) 3.99% 4.03% 4.00% 4.03% 4.09% 4.01% 4.15%
__________
(1) Operating net interest
margin (tax equivalent) is a
non-GAAP financial measure.
See the section titled "Non-
GAAP Financial Measures" on the
last pages of this earnings
release for the reconciliation
of operating net interest
margin (tax equivalent) to net
interest margin.
(2) For 2016, incremental
accretion income on other FDIC
acquired loans is no longer
considered significant.
Asset Quality
At December 31, 2016, nonperforming assets to total assets were 0.35% compared to 0.32% at September 30, 2016 and 0.39% at December 31, 2015. Total nonperforming assets increased $3.4 million from the linked quarter due to a $6.4 million increase in nonaccrual loans, partially offset by a decrease in other real estate owned.
The following table sets forth information regarding nonaccrual loans and total nonperforming assets:
December 31, 2016 September 30, 2016 December 31, 2015
----------------- ------------------ -----------------
(in thousands)
Nonaccrual loans:
Commercial business $11,555 $9,502 $9,437
Real estate:
One-to-four family
residential 568 579 820
Commercial and multifamily
residential 11,187 7,052 9,513
------ ----- -----
Total real estate 11,755 7,631 10,333
Real estate construction:
One-to-four family
residential 563 461 928
--- --- ---
Total real estate
construction 563 461 928
Consumer 3,883 3,772 766
----- ----- ---
Total nonaccrual loans 27,756 21,366 21,464
Other real estate owned and
other personal property
owned 5,998 8,994 13,738
Total nonperforming assets $33,754 $30,360 $35,202
======= ======= =======
The following table provides an analysis of the Company's allowance for loan and lease losses:
Three Months Ended Twelve Months Ended
December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
(in thousands)
Beginning balance $70,264 $69,304 $69,049 $68,172 $69,569
Charge-offs:
Commercial business (1,195) (2,159) (2,184) (10,068) (8,266)
One-to-four family
residential real estate - - (79) (35) (376)
Commercial and
multifamily residential
real estate (63) - (264) (89) (505)
One-to-four family
residential real estate
construction (88) - - (88) -
Consumer (255) (383) (545) (1,238) (2,066)
Purchased credit impaired (2,118) (2,062) (3,680) (9,944) (13,854)
------ ------ ------ ------ -------
Total charge-offs (3,719) (4,604) (6,752) (21,462) (25,067)
Recoveries:
Commercial business 377 854 886 2,646 2,336
One-to-four family
residential real estate 29 81 19 171 307
Commercial and
multifamily residential
real estate 1,182 20 277 1,401 3,975
One-to-four family
residential real estate
construction 11 21 52 291 193
Commercial and
multifamily residential
real estate construction - 107 1 109 8
Consumer 168 399 224 933 931
Purchased credit impaired 1,713 2,216 2,067 7,004 7,329
----- ----- ----- ----- -----
Total recoveries 3,480 3,698 3,526 12,555 15,079
----- ----- ----- ------ ------
Net charge-offs (239) (906) (3,226) (8,907) (9,988)
Provision for loan and
lease losses 18 1,866 2,349 10,778 8,591
--- ----- ----- ------ -----
Ending balance $70,043 $70,264 $68,172 $70,043 $68,172
======= ======= ======= ======= =======
The allowance for loan losses to period end loans was 1.13% at December 31, 2016 compared to 1.12% at September 30, 2016 and 1.17% at December 31, 2015. For the fourth quarter of 2016, Columbia recorded a net provision for loan and lease losses of $18 thousand compared to a net provision of $1.9 million for the linked quarter and $2.3 million for the comparable quarter last year. The net provision for loan and lease losses recorded during the current quarter consisted of $600 thousand of provision for loan losses for loans, excluding PCI loans, substantially offset by a provision recovery of $582 thousand for PCI loans.
Andy McDonald, Columbia's Executive Vice President and Chief Credit Officer, commented, "Our credit quality metrics continue to compare favorably to our peers. Our nonperforming assets to total assets of thirty five basis points remains below the fifty basis points we have long considered as a sustainable level for this point in the current economic cycle."
Impact of FDIC Acquired Loan Accounting
The following table illustrates the impact to earnings associated with Columbia's FDIC acquired loan portfolios:
FDIC Acquired Loan Accounting
Three Months Ended Twelve Months Ended
December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
(in thousands)
Incremental
accretion
income on
FDIC
purchased
credit
impaired
loans $1,199 $1,816 $2,200 $5,972 $9,096
Incremental
accretion
income on
other FDIC
acquired
loans (1) - - 68 - 234
Recapture
(provision)
for losses on
FDIC
purchased
credit
impaired
loans 582 433 (1,349) 271 (3,915)
Change in FDIC
loss-sharing
asset (388) (104) (1,031) (2,585) (4,010)
FDIC clawback
liability
recovery
(expense) 28 (29) (812) (280) (979)
Pre-tax
earnings
impact $1,421 $2,116 $(924) $3,378 $426
====== ====== ===== ====== ====
_________
(1) For 2016, incremental
accretion income on other
FDIC acquired loans is no
longer considered
significant.
The incremental accretion income on FDIC purchased credit impaired loans represents the amount of income recorded above the contractual rate stated in the individual loan notes. At December 31, 2016, the accretable yield on purchased credit impaired loans was $45.2 million. Accretable yield is subject to change based upon expected future loan cash flows, which are remeasured by Columbia on a quarterly basis.
The $388 thousand change in the FDIC loss-sharing asset in the current quarter reduced noninterest income and consisted primarily of $299 thousand in amortization expense. Additional details of the components of the change in the FDIC loss-sharing asset are provided in tabular format in the section titled "Noninterest Income" in the prior page
Organizational Update
Ms. Dressel commented, "Earlier this month we announced the signing of a definitive agreement to purchase Pacific Continental Corporation. We are looking forward to this well respected Northwest franchise joining the Columbia team." Ms. Dressel continued, "Aside from both of our companies being commercially oriented community banks, we share a common passion for serving our customers and broader communities while creating an exceptional working environment for our employees."
Conference Call Information
Columbia's management will discuss the fourth quarter and full-year 2016 results on a conference call scheduled for Thursday, January 26, 2017 at 1:00 p.m. Pacific Standard Time (4:00 p.m. Eastern Standard Time). Interested parties may listen to this discussion by calling 1-866-378-3802; Conference ID code #22782095.
A conference call replay will be available from approximately 4:00 p.m. PST on January 26, 2017 through midnight PST on February 2, 2017. The conference call replay can be accessed by dialing 1-855-859-2056 and entering Conference ID code #22782095.
About Columbia
Headquartered in Tacoma, Washington, Columbia Banking System, Inc. is the holding company of Columbia Bank, a Washington state-chartered full-service commercial bank with locations throughout Washington, Oregon and Idaho. For the tenth consecutive year, the bank was named in 2016 as one of Puget Sound Business Journal's "Washington's Best Workplaces." Columbia ranked in the top 20 on the 2016 Forbes list of best banks in the country for the fifth year in a row.
More information about Columbia can be found on its website at www.columbiabank.com.
Note Regarding Forward-Looking Statements
This news release includes forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements include, but are not limited to, descriptions of Columbia's management's expectations regarding future events and developments such as future operating results, growth in loans and deposits, continued success of Columbia's style of banking and the strength of the local economy. The words "will," "believe," "expect," "intend," "should," and "anticipate" or the negative of these words or words of similar construction are intended in part to help identify forward looking statements. Future events are difficult to predict, and the expectations described above are necessarily subject to risks and uncertainties, many of which are outside our control, that may cause actual results to differ materially and adversely. In addition to discussions about risks and uncertainties set forth from time to time in Columbia's filings with the Securities and Exchange Commission, available at the SEC's website at www.sec.gov and the Company's website at www.columbiabank.com, including the "Risk Factors," "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our annual reports on Form 10-K and quarterly reports on Form 10-Q, (as applicable), factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following: (1) local, national and international economic conditions may be less favorable than expected or have a more direct and pronounced effect on Columbia than expected and adversely affect Columbia's ability to continue its internal growth at historical rates and maintain the quality of its earning assets; (2) changes in interest rates could significantly reduce net interest income and negatively affect funding sources; (3) projected business increases following strategic expansion or opening or acquiring new branches may be lower than expected; (4) costs or difficulties related to the integration of acquisitions may be greater than expected; (5) competitive pressure among financial institutions may increase significantly; (6) legislation or regulatory requirements or changes may adversely affect the businesses in which Columbia is engaged; and (7) the proposed merger with Pacific Continental Corporation ("Pacific Continental") may not close when expected or at all because required regulatory, shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all, which may have an effect on the trading prices of Columbia's stock. We believe the expectations reflected in our forward-looking statements are reasonable, based on information available to us on the date hereof. However, given the described uncertainties and risks, we cannot guarantee our future performance or results of operations and you should not place undue reliance on these forward-looking statements which speak only as of the date hereof. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws. The factors noted above and the risks and uncertainties described in our SEC filings should be considered when reading any forward-looking statements in this release.
Additional Information
In connection with the Agreement and Plan of Merger, dated as of January 9, 2017, by and between Columbia Banking System, Inc. and Pacific Continental, Columbia will file with the SEC a Registration Statement on Form S-4 that will include a Joint Proxy Statement of Columbia and Pacific Continental and a Prospectus of Columbia, as well as other relevant documents concerning the proposed transaction. Shareholders of Columbia and Pacific Continental are urged to carefully read the Registration Statement and the Joint Proxy Statement/Prospectus regarding the transaction in their entirety when they become available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. Shareholders of Columbia and Pacific Continental are also urged to carefully review and consider each of Columbia's and Pacific Continental's public filings with the SEC, including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. A definitive Joint Proxy Statement/Prospectus will be sent to the shareholders of each institution seeking any required shareholder approvals. The Joint Proxy Statement/Prospectus and other relevant materials (when they become available) filed with the SEC may be obtained free of charge at the SEC's Website at http://www.sec.gov. PACIFIC CONTINENTAL AND COLUMBIA SHAREHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND THE OTHER RELEVANT MATERIALS BEFORE VOTING ON THE TRANSACTION.
Investors will also be able to obtain these documents, free of charge, from Pacific Continental by accessing Pacific Continental's website at www.therightbank.com under the link "Investor Relations" or from Columbia at www.columbiabank.com under the tab "About" and then under the heading "Investor Relations." Copies can also be obtained, free of charge, by directing a written request to Columbia, Attention: Corporate Secretary, 1301 A Street, Suite 800, Tacoma, Washington 98401-2156 or to Pacific Continental, Attention: Corporate Secretary, 111 West Seventh Avenue, P.O. Box 10727, Eugene Oregon 97440-2727.
Participants in Solicitation
Columbia and Pacific Continental and their directors and executive officers and certain other persons may be deemed to be participants in the solicitation of proxies from the shareholders of Pacific Continental or Columbia in connection with the transaction. Information about the directors and executive officers of Columbia and their ownership of Columbia common stock is set forth in the proxy statement for Columbia's 2016 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 16, 2016. Information about the directors and executive officers of Pacific Continental and their ownership of Pacific Continental common stock is set forth in the proxy statement for Pacific Continental's 2016 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on March 15, 2016. Additional information regarding the interests of those participants and other persons who may be deemed participants in the solicitation may be obtained by reading the Joint Proxy Statement/Prospectus regarding the transaction when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.
Contacts: Melanie J. Dressel,
President and
Chief Executive Officer
Clint E. Stein,
Executive Vice President
and Chief Financial
Officer
Investor Relations
(253) 305-1965
FINANCIAL STATISTICS
Columbia Banking System,
Inc. Three Months Ended Twelve Months Ended
Unaudited December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
Earnings (dollars in thousands except per share amounts)
--------
Net interest income $85,737 $85,572 $81,819 $333,619 $324,887
Provision for loan and
lease losses $18 $1,866 $2,349 $10,778 $8,591
Noninterest income $22,330 $23,166 $24,745 $88,082 $91,473
Noninterest expense $65,014 $67,264 $66,877 $261,142 $266,149
Acquisition-related
expense (included in
noninterest expense) $291 $ - $1,872 $2,727 $10,917
Net income $30,718 $27,484 $26,740 $104,866 $98,827
Per Common Share
----------------
Earnings (basic) $0.53 $0.47 $0.46 $1.81 $1.71
Earnings (diluted) $0.53 $0.47 $0.46 $1.81 $1.71
Book value $21.52 $21.96 $21.48 $21.52 $21.48
Averages
--------
Total assets $9,568,214 $9,493,451 $8,905,743 $9,311,621 $8,655,243
Interest-earning assets $8,612,498 $8,544,876 $7,937,308 $8,363,309 $7,685,734
Loans $6,200,506 $6,179,163 $5,762,048 $6,052,389 $5,609,261
Securities, including
Federal Home Loan Bank
stock $2,314,521 $2,351,093 $2,136,703 $2,269,121 $2,031,859
Deposits $8,105,522 $7,918,532 $7,440,628 $7,774,309 $7,146,828
Interest-bearing deposits $4,151,695 $4,118,787 $3,933,001 $4,070,401 $3,937,881
Interest-bearing
liabilities $4,222,820 $4,295,485 $4,031,214 $4,227,096 $4,097,483
Noninterest-bearing
deposits $3,953,827 $3,799,745 $3,507,627 $3,703,908 $3,208,947
Shareholders' equity $1,274,388 $1,278,588 $1,259,117 $1,269,801 $1,246,952
Financial Ratios
----------------
Return on average assets 1.29% 1.16% 1.20% 1.13% 1.14%
Return on average common
equity 9.68% 8.60% 8.50% 8.27% 7.93%
Average equity to average
assets 13.32% 13.47% 14.14% 13.64% 14.41%
Net interest margin (tax
equivalent) 4.11% 4.13% 4.25% 4.12% 4.35%
Efficiency ratio (tax
equivalent) (1) 58.35% 60.02% 60.99% 60.04% 62.12%
Operating efficiency ratio
(tax equivalent) (2) 58.10% 60.47% 60.53% 59.21% 60.78%
December 31, September 30, December 31,
Period end 2016 2016 2015
---------- ---- ---- ----
Total assets $9,509,607 $9,586,754 8,951,697
Loans, net of unearned
income $6,213,423 $6,259,757 5,815,027
Allowance for loan and
lease losses $70,043 $70,264 68,172
Securities, including
Federal Home Loan Bank
stock $2,288,817 $2,372,724 2,170,416
Deposits $8,059,415 $8,057,816 7,438,829
Core deposits $7,749,568 $7,809,064 7,238,713
Shareholders' equity $1,251,012 $1,276,735 1,242,128
Nonperforming assets
--------------------
Nonaccrual loans $27,756 $21,366 21,464
Other real estate owned
("OREO") and other
personal property owned
("OPPO") 5,998 8,994 13,738
Total nonperforming assets $33,754 $30,360 $35,202
======= ======= =======
Nonperforming loans to
period-end loans 0.45% 0.34% 0.37%
Nonperforming assets to
period-end assets 0.35% 0.32% 0.39%
Allowance for loan and
lease losses to period-
end loans 1.13% 1.12% 1.17%
Net loan charge-offs $239 (3) $906 (4) $3,226 (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
page of this earnings release
for the reconciliation of the
operating efficiency ratio (tax
equivalent) to the efficiency
ratio (tax equivalent).
(3) For the three months ended
December 31, 2016.
(4) For the three months ended
September 30, 2016.
(5) For the three months ended
December 31, 2015.
QUARTERLY FINANCIAL
STATISTICS
Columbia Banking System,
Inc. Three Months Ended
Unaudited December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
(dollars in thousands except per share)
Earnings
--------
Net interest income $85,737 $85,572 $82,140 $80,170 $81,819
Provision for loan and
lease losses $18 $1,866 $3,640 $5,254 $2,349
Noninterest income $22,330 $23,166 $21,940 $20,646 $24,745
Noninterest expense $65,014 $67,264 $63,790 $65,074 $66,877
Acquisition-related
expense (included in
noninterest expense) $291 $ - $ - $2,436 $1,872
Net income $30,718 $27,484 $25,405 $21,259 $26,740
Per Common Share
----------------
Earnings (basic) $0.53 $0.47 $0.44 $0.37 $0.46
Earnings (diluted) $0.53 $0.47 $0.44 $0.37 $0.46
Book value $21.52 $21.96 $21.93 $21.70 $21.48
Averages
--------
Total assets $9,568,214 $9,493,451 $9,230,791 $8,949,212 $8,905,743
Interest-earning assets $8,612,498 $8,544,876 $8,285,183 $8,005,945 $7,937,308
Loans $6,200,506 $6,179,163 $5,999,428 $5,827,440 $5,762,048
Securities, including
Federal Home Loan Bank
stock $2,314,521 $2,351,093 $2,262,012 $2,147,457 $2,136,703
Deposits $8,105,522 $7,918,532 $7,622,266 $7,445,693 $7,440,628
Interest-bearing deposits $4,151,695 $4,118,787 $4,026,384 $3,983,314 $3,933,001
Interest-bearing
liabilities $4,222,820 $4,295,485 $4,264,792 $4,124,582 $4,031,214
Noninterest-bearing
deposits $3,953,827 $3,799,745 $3,595,882 $3,462,379 $3,507,627
Shareholders' equity $1,274,388 $1,278,588 $1,267,670 $1,258,411 $1,259,117
Financial Ratios
----------------
Return on average assets 1.29% 1.16% 1.10% 0.95% 1.20%
Return on average common
equity 9.68% 8.60% 8.02% 6.76% 8.50%
Average equity to average
assets 13.32% 13.47% 13.73% 14.06% 14.14%
Net interest margin (tax
equivalent) 4.11% 4.13% 4.10% 4.13% 4.25%
Period end
----------
Total assets $9,509,607 $9,586,754 $9,353,651 $9,035,932 $8,951,697
Loans, net of unearned
income $6,213,423 $6,259,757 $6,107,143 $5,877,283 $5,815,027
Allowance for loan and
lease losses $70,043 $70,264 $69,304 $69,264 $68,172
Securities, including
Federal Home Loan Bank
stock $2,288,817 $2,372,724 $2,297,713 $2,196,407 $2,170,416
Deposits $8,059,415 $8,057,816 $7,673,213 $7,596,949 $7,438,829
Core deposits $7,749,568 $7,809,064 $7,447,963 $7,384,622 $7,238,713
Shareholders' equity $1,251,012 $1,276,735 $1,274,479 $1,260,788 $1,242,128
Nonperforming, assets
---------------------
Nonaccrual loans $27,756 $21,366 $22,915 $36,891 $21,464
OREO and OPPO 5,998 8,994 10,613 12,427 13,738
----- ----- ------ ------ ------
Total nonperforming assets $33,754 $30,360 $33,528 $49,318 $35,202
------- ------- ------- ------- -------
Nonperforming loans to
period-end loans 0.45% 0.34% 0.38% 0.63% 0.37%
Nonperforming assets to
period-end assets 0.35% 0.32% 0.36% 0.55% 0.39%
Allowance for loan and
lease losses to period-
end loans 1.13% 1.12% 1.13% 1.18% 1.17%
Net loan charge-offs $239 $906 $3,600 $4,162 $3,226
LOAN PORTFOLIO COMPOSITION
Columbia Banking System,
Inc.
Unaudited December 31, September 30, June 30, March 31, December 31,
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
Loan Portfolio Composition
-Dollars (dollars in thousands)
--------------------------
Commercial business $2,551,054 $2,630,017 $2,518,682 $2,401,193 $2,362,575
Real estate:
One-to-four family
residential 170,331 168,511 172,957 175,050 176,295
Commercial and multifamily
residential 2,719,830 2,686,783 2,651,476 2,520,352 2,491,736
--------- --------- --------- --------- ---------
Total real estate 2,890,161 2,855,294 2,824,433 2,695,402 2,668,031
Real estate construction:
One-to-four family
residential 121,887 130,163 129,195 133,447 135,874
Commercial and multifamily
residential 209,118 202,014 185,315 183,548 167,413
------- ------- ------- ------- -------
Total real estate
construction 331,005 332,177 314,510 316,995 303,287
Consumer 329,261 325,741 325,632 329,902 342,601
Purchased credit impaired 145,660 152,764 161,107 173,201 180,906
------- ------- ------- ------- -------
Subtotal loans 6,247,141 6,295,993 6,144,364 5,916,693 5,857,400
Less: Net unearned income (33,718) (36,236) (37,221) (39,410) (42,373)
------- ------- ------- ------- -------
Loans, net of unearned
income 6,213,423 6,259,757 6,107,143 5,877,283 5,815,027
Less: Allowance for loan
and lease losses (70,043) (70,264) (69,304) (69,264) (68,172)
Total loans, net 6,143,380 6,189,493 6,037,839 5,808,019 5,746,855
========= ========= ========= ========= =========
Loans held for sale $5,846 $3,361 $7,649 $3,681 $4,509
====== ====== ====== ====== ======
December 31,
2016
September 30,
June 30,
March 31,
December 31,
Loan Portfolio Composition
-Percentages 2016 2016 2016 2015
-------------------------- ---- ---- ---- ----
Commercial business 41.1% 42.0% 41.2% 40.9% 40.6%
Real estate:
One-to-four family
residential 2.7% 2.7% 2.8% 3.0% 3.0%
Commercial and multifamily
residential 43.7% 43.0% 43.6% 42.9% 42.9%
---- ---- ---- ---- ----
Total real estate 46.4% 45.7% 46.4% 45.9% 45.9%
Real estate construction:
One-to-four family
residential 2.0% 2.1% 2.1% 2.3% 2.3%
Commercial and multifamily
residential 3.4% 3.2% 3.0% 3.1% 2.9%
--- --- --- --- ---
Total real estate
construction 5.4% 5.3% 5.1% 5.4% 5.2%
Consumer 5.3% 5.2% 5.3% 5.6% 5.9%
Purchased credit impaired 2.3% 2.4% 2.6% 2.9% 3.1%
--- --- --- --- ---
Subtotal loans 100.5% 100.6% 100.6% 100.7% 100.7%
Less: Net unearned income (0.5)% (0.6)% (0.6)% (0.7)% (0.7)%
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,
2016 2016 2016 2016 2015
---- ---- ---- ---- ----
Deposit Composition -
Dollars (dollars in thousands)
---------------------
Core deposits:
Demand and other non-
interest bearing $3,944,495 $3,942,434 $3,652,951 $3,553,468 $3,507,358
Interest bearing demand 985,293 963,242 957,548 958,469 925,909
Money market 1,791,283 1,873,376 1,818,337 1,838,364 1,788,552
Savings 723,667 714,047 692,694 695,588 657,016
Certificates of deposit,
less than $250,000 304,830 315,965 326,433 338,733 359,878
------- ------- ------- ------- -------
Total core deposits 7,749,568 7,809,064 7,447,963 7,384,622 7,238,713
Certificates of deposit,
$250,000 or more 79,424 79,590 72,812 70,571 72,126
Certificates of deposit
insured by CDARS(R) 22,039 16,951 22,755 24,752 26,901
Brokered money market
accounts 208,348 152,151 129,590 116,878 100,854
------- ------- ------- ------- -------
Subtotal 8,059,379 8,057,756 7,673,120 7,596,823 7,438,594
Premium resulting from
acquisition date fair
value adjustment 36 60 93 126 235
--- --- --- --- ---
Total deposits $8,059,415 $8,057,816 $7,673,213 $7,596,949 $7,438,829
========== ========== ========== ========== ==========
December 31,
September 30,
June 30,
March 31, December 31,
2015
Deposit Composition -
Percentages 2016 2016 2016 2016
--------------------- ---- ---- ---- ----
Core deposits:
Demand and other non-
interest bearing 48.9% 48.9% 47.6% 46.8% 47.2%
Interest bearing demand 12.2% 12.0% 12.5% 12.6% 12.4%
Money market 22.2% 23.2% 23.7% 24.2% 24.0%
Savings 9.0% 8.9% 9.0% 9.2% 8.8%
Certificates of deposit,
less than $250,000 3.8% 3.9% 4.3% 4.5% 4.8%
--- --- --- --- ---
Total core deposits 96.1% 96.9% 97.1% 97.3% 97.2%
Certificates of deposit,
$250,000 or more 1.0% 1.0% 0.9% 0.9% 1.0%
Certificates of deposit
insured by CDARS(R) 0.3% 0.2% 0.3% 0.3% 0.4%
Brokered money market
accounts 2.6% 1.9% 1.7% 1.5% 1.4%
Total 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
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,
2016 2016 2015 (1) 2016 2015 (1)
---- ---- ------- ---- -------
(in thousands except per share)
Interest Income
Loans $74,542 $74,956 $71,358 $291,465 $286,166
Taxable securities 9,333 8,988 8,516 35,167 30,774
Tax-exempt securities 2,724 2,799 2,870 11,121 11,842
Deposits in banks 135 15 25 216 109
--- --- --- --- ---
Total interest income 86,734 86,758 82,769 337,969 328,891
Interest Expense
Deposits 782 823 733 3,134 2,977
Federal Home Loan Bank
advances 77 229 83 671 474
Other borrowings 138 134 134 545 553
--- --- --- --- ---
Total interest expense 997 1,186 950 4,350 4,004
--- ----- --- ----- -----
Net Interest Income 85,737 85,572 81,819 333,619 324,887
Provision for loan and lease
losses 18 1,866 2,349 10,778 8,591
--- ----- ----- ------ -----
Net interest income after
provision for loan and lease
losses 85,719 83,706 79,470 322,841 316,296
Noninterest Income
Deposit account and treasury
management fees (1) 7,196 7,222 7,010 28,500 28,451
Card revenue (1) 5,803 6,114 5,776 23,620 22,690
Financial services and trust
revenue (1) 2,919 2,746 2,939 11,266 12,596
Loan revenue (1) 2,954 2,949 2,807 10,967 10,932
Merchant processing revenue 2,006 2,352 2,173 8,732 8,975
Bank owned life insurance 1,087 1,073 1,071 4,546 4,441
Investment securities gains,
net 7 572 281 1,181 1,581
Change in FDIC loss-sharing
asset (388) (104) (1,031) (2,585) (4,010)
Other (1) 746 242 3,719 1,855 5,817
--- --- ----- ----- -----
Total noninterest income 22,330 23,166 24,745 88,082 91,473
Noninterest Expense
Compensation and employee
benefits 38,196 38,476 36,689 150,282 149,410
Occupancy 7,690 8,219 10,037 33,734 34,818
Merchant processing expense 1,018 1,161 1,058 4,330 4,204
Advertising and promotion 720 1,993 1,233 4,598 4,713
Data processing 4,138 4,275 4,399 16,488 17,421
Legal and professional fees 2,523 2,264 2,081 7,889 9,608
Taxes, licenses and fees 1,106 1,491 1,392 5,185 5,395
Regulatory premiums 792 776 1,180 3,777 4,806
Net cost (benefit) of
operation of other real
estate owned 612 (249) (60) 551 (1,629)
Amortization of intangibles 1,420 1,460 1,652 5,946 6,882
Other 6,799 7,398 7,216 28,362 30,521
----- ----- ----- ------ ------
Total noninterest expense 65,014 67,264 66,877 261,142 266,149
------ ------ ------ ------- -------
Income before income taxes 43,035 39,608 37,338 149,781 141,620
Provision for income taxes 12,317 12,124 10,598 44,915 42,793
------ ------ ------ ------ ------
Net Income $30,718 $27,484 $26,740 $104,866 $98,827
======= ======= ======= ======== =======
Earnings per common share
Basic $0.53 $0.47 $0.46 $1.81 $1.71
Diluted $0.53 $0.47 $0.46 $1.81 $1.71
Dividends paid per common
share $0.39 $0.39 $0.36 $1.53 $1.34
Weighted average number of
common shares outstanding 57,220 57,215 57,057 57,184 57,019
Weighted average number of
diluted common shares
outstanding 57,229 57,225 57,070 57,193 57,032
__________
(1) Reclassified to conform to the
current period's presentation.
Reclassifications consisted of
disaggregating fee revenue previously
presented in 'Service charges and other
fees' and certain revenue previously
presented in 'Other' into the
presentation above. The Company made
these reclassifications to provide
additional information about its
sources of noninterest income. There
was no change to total noninterest
income as previously reported as a
result of these reclassifications.
CONSOLIDATED BALANCE SHEETS
Columbia Banking System, Inc.
Unaudited December 31, September 30, December 31,
2016 2016 2015
---- ---- ----
(in thousands)
ASSETS
Cash and due from banks $193,038 $180,839 $166,929
Interest-earning deposits with banks 31,200 11,225 8,373
------ ------ -----
Total cash and cash equivalents 224,238 192,064 175,302
Securities available for sale at fair value (amortized cost of $2,299,037, $2,324,721 and $2,157,610, respectively) 2,278,577 2,360,084 2,157,694
Federal Home Loan Bank stock at cost 10,240 12,640 12,722
Loans held for sale 5,846 3,361 4,509
Loans, net of unearned income of ($33,718), ($36,236) and ($42,373), respectively 6,213,423 6,259,757 5,815,027
Less: allowance for loan and lease losses 70,043 70,264 68,172
------ ------ ------
Loans, net 6,143,380 6,189,493 5,746,855
FDIC loss-sharing asset 3,535 3,592 6,568
Interest receivable 30,074 31,606 27,877
Premises and equipment, net 150,342 152,908 164,239
Other real estate owned 5,998 8,994 13,738
Goodwill 382,762 382,762 382,762
Other intangible assets, net 17,631 19,051 23,577
Other assets 256,984 230,199 235,854
Total assets $9,509,607 $9,586,754 $8,951,697
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing $3,944,495 $3,942,434 $3,507,358
Interest-bearing 4,114,920 4,115,382 3,931,471
--------- --------- ---------
Total deposits 8,059,415 8,057,816 7,438,829
Federal Home Loan Bank advances 6,493 66,502 68,531
Securities sold under agreements to repurchase 80,822 69,189 99,699
Other liabilities 111.865 116,512 102,510
------- ------- -------
Total liabilities 8,258,595 8,310,019 7,709,569
Commitments and contingent liabilities
December 31, September 30, December 31,
2016 2016 2015
---- ---- ----
Preferred stock (no par value) (in thousands)
Authorized shares 2,000 2,000 2,000
Issued and outstanding 9 9 9 2,217 2,217 2,217
Common stock (no par value)
Authorized shares 115,000 115,000 115,000
Issued and outstanding 58,042 58,043 57,724 995,837 994,098 990,281
Retained earnings 271,957 263,915 255,925
Accumulated other comprehensive income (loss) (18,999) 16,505 (6,295)
------- ------ ------
Total shareholders' equity 1,251,012 1,276,735 1,242,128
Total liabilities and shareholders' equity $9.509,607 $9,586,754 $8,951,697
========== ========== ==========
AVERAGE BALANCES AND RATES
Columbia Banking System, Inc.
Unaudited
Three Months Ended Three Months Ended
------------------ ------------------
December 31, 2016 December 31, 2015
Average Interest Average Average Interest Average
Balances Earned / Paid Rate Balances Earned / Paid Rate
-------- ------------- ---- -------- ------------- ----
(dollars in thousands)
ASSETS
Loans, net (1)(2) $6,200,506 $75,838 4.89% $5,762,048 $72,322 5.02%
Taxable securities 1,853,788 9,333 2.01% 1,686,594 8,516 2.02%
Tax exempt securities (2) 460,733 4,191 3.64% 450,109 4,417 3.93%
Interest-earning deposits
with banks 97,471 135 0.55% 38,557 25 0.26%
------ --- ------ ---
Total interest-earning
assets 8,612,498 $89,497 4.16% 7,937,308 $85,280 4.30%
Other earning assets 162,591 153,298
Noninterest-earning assets 793,125 815,137
------- -------
Total assets $9,568,214 $8,905,743
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Certificates of deposit $410,372 $114 0.11% $460,858 $179 0.16%
Savings accounts 720,453 18 0.01% 653,738 17 0.01%
Interest-bearing demand 969,104 154 0.06% 920,021 161 0.07%
Money market accounts 2,051,766 496 0.10% 1,898,384 376 0.08%
--------- --- --------- ---
Total interest-bearing
deposits 4,151,695 782 0.08% 3,933,001 733 0.07%
Federal Home Loan Bank
advances 10,128 77 3.04% 18,915 83 1.76%
Other borrowings 60,997 138 0.90% 79,298 134 0.68%
------ --- ------ ---
Total interest-bearing
liabilities 4,222,820 $997 0.09% 4,031,214 $950 0.09%
Noninterest-bearing
deposits 3,953,827 3,507,627
Other noninterest-bearing
liabilities 117,179 107,785
Shareholders' equity 1,274,388 1,259,117
--------- ---------
Total liabilities &
shareholders' equity $9,568,214 $8,905,743
========== ==========
Net interest income (tax equivalent) $88,500 $84,330
======= =======
Net interest margin (tax equivalent) 4.11% 4.25%
==== ====
(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 $1.7 million and $1.1
million for the three month
periods ended December 31, 2016
and December 31, 2015,
respectively. The incremental
accretion on acquired loans was
$4.3 million and $6.0 million for
the three months ended December
31, 2016 and 2015, respectively.
(2) Tax-exempt income is calculated
on a tax equivalent basis. The
tax equivalent yield adjustment
to interest earned on loans was
$1.3 million and $964 thousand
for the three months ended
December 31, 2016 and 2015,
respectively. The tax equivalent
yield adjustment to interest
earned on tax exempt securities
was $1.5 million for both three
months ended December 31, 2016
and 2015.
AVERAGE BALANCES AND RATES
Columbia Banking System, Inc.
Unaudited
Three Months Ended Three Months Ended
------------------ ------------------
December 31, 2016 September 30, 2016
Average Interest Average Average Interest Average
Earned / Paid Rate Balances Earned / Paid
Balances Rate
-------- ----
(dollars in thousands)
ASSETS
Loans, net (1)(2) $6,200,506 $75,838 4.89% $6,179,163 $76,195 4.93%
Taxable securities 1,853,788 9,333 2.01% 1,870,466 8,988 1.92%
Tax exempt securities (2) 460,733 4,191 3.64% 480,627 4,306 3.58%
Interest-earning deposits
with banks 97,471 135 0.55% 14,620 15 0.41%
------ --- ------ ---
Total interest-earning
assets 8,612,498 $89,497 4.16% 8,544,876 $89,504 4.19%
Other earning assets 162,591 155,663
Noninterest-earning assets 793,125 792,912
------- -------
Total assets $9,568,214 $9,493,451
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Certificates of deposit $410,372 $114 0.11% $417,887 $124 0.12%
Savings accounts 720,453 18 0.01% 705,923 18 0.01%
Interest-bearing demand 969,104 154 0.06% 961,527 189 0.08%
Money market accounts 2,051,766 496 0.10% 2,033,450 492 0.10%
--------- --- --------- ---
Total interest-bearing
deposits 4,151,695 782 0.08% 4,118,787 823 0.08%
Federal Home Loan Bank
advances 10,128 77 3.04% 96,931 229 0.95%
Other borrowings 60,997 138 0.90% 79,767 134 0.67%
------ --- ------ ---
Total interest-bearing
liabilities 4,222,820 $997 0.09% 4,295,485 $1,186 0.11%
Noninterest-bearing
deposits 3,953,827 3,799,745
Other noninterest-bearing
liabilities 117,179 119,633
Shareholders' equity 1,274,388 1,278,588
--------- ---------
Total liabilities &
shareholders' equity $9,568,214 $9,493,451
========== ==========
Net interest income (tax equivalent) $88,500 $88,318
======= =======
Net interest margin (tax equivalent) 4.11% 4.13%
==== ====
(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 $1.7
million and $1.4 million for the
three month periods ended December
31, 2016 and September 30, 2016.
The incremental accretion on
acquired loans was $4.3 million
and $4.6 million for the three
months ended December 31, 2016 and
September 30, 2016, respectively.
(2) Tax-exempt income is calculated on
a tax equivalent basis. The tax
equivalent yield adjustment to
interest earned on loans was $1.3
million and $1.2 million for the
three months ended December 31,
2016 and September 30, 2016,
respectively. The tax equivalent
yield adjustment to interest
earned on tax exempt securities
was $1.5 million and $1.5 million
for the three month periods ended
December 31, 2016 and September
30, 2016, respectively.
AVERAGE BALANCES AND RATES
Columbia Banking System, Inc.
Unaudited
Twelve Months Ended December 31, Twelve Months Ended December 31,
-------------------------------- --------------------------------
2016 2015
Average Interest Average Average Interest Average
Balances Earned / Paid Rate Balances Earned / Paid Rate
-------- ------------- ---- -------- ------------- ----
(dollars in thousands)
ASSETS
Loans, net (1)(2) $6,052,389 $296,283 4.90% $5,609,261 $289,450 5.16%
Taxable securities 1,804,004 35,167 1.95% 1,577,711 30,774 1.95%
Tax exempt securities (2) 465,117 17,109 3.68% 454,148 18,219 4.01%
Interest-earning deposits
with banks 41,799 216 0.52% 44,614 109 0.24%
------ --- ------ ---
Total interest-earning
assets 8,363,309 $348,775 4.17% 7,685,734 $338,552 4.40%
Other earning assets 156,871 149,476
Noninterest-earning assets 791,441 820,033
------- -------
Total assets $9,311,621 $8,655,243
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Certificates of deposit $426,296 $522 0.12% $483,193 $868 0.18%
Savings accounts 698,687 71 0.01% 637,464 70 0.01%
Interest-bearing demand 952,135 695 0.07% 982,491 612 0.06%
Money market accounts 1,993,283 1,846 0.09% 1,834,733 1,427 0.08%
--------- ----- --------- -----
Total interest-bearing
deposits 4,070,401 3,134 0.08% 3,937,881 2,977 0.08%
Federal Home Loan Bank
advances 79,673 671 0.84% 70,678 474 0.67%
Other borrowings 77,022 545 0.71% 88,924 553 0.62%
------ --- ------ ---
Total interest-bearing
liabilities 4,227,096 $4,350 0.10% 4,097,483 $4,004 0.10%
Noninterest-bearing
deposits 3,703,908 3,208,947
Other noninterest-bearing
liabilities 110,816 101,861
Shareholders' equity 1,269,801 1,246,952
--------- ---------
Total liabilities &
shareholders' equity $9,311,621 $8,655,243
========== ==========
Net interest income (tax equivalent) $344,425 $334,548
======== ========
Net interest margin (tax equivalent) 4.12% 4.35%
==== ====
(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 $5.3 million and $4.9
million for the twelve months
ended December 31, 2016 and 2015,
respectively. The incremental
accretion on acquired loans was
$18.0 million and $27.2 million
for the twelve months ended
December 31, 2016 and 2015,
respectively.
(2) Tax-exempt income is calculated
on a tax equivalent basis. The
tax equivalent yield adjustment
to interest earned on loans was
$4.8 million and $3.3 million for
the twelve months ended December
31, 2016 and 2015, respectively.
The tax equivalent yield
adjustment to interest earned on
tax exempt securities was $6.0
million and $6.4 million for the
twelve months ended December 31,
2016 and 2015, respectively.
Non-GAAP Financial Measures
The Company considers its operating net interest margin and operating efficiency ratios to be important measurements as they more closely reflect the ongoing operating performance of the Company. Despite the importance of the operating net interest margin and operating efficiency ratio to the Company, there are no standardized definitions for them and, as a result, the Company's calculations may not be comparable with other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.
The following tables reconcile the Company's calculation of the operating net interest margin and operating efficiency ratio:
Three Months Ended Twelve Months Ended
December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
Operating net interest
margin non-GAAP
reconciliation: (dollars in thousands)
Net interest income
(tax equivalent) (1) $88,500 $88,318 $84,330 $344,425 $334,548
------- ------- ------- -------- --------
Adjustments to arrive
at operating net
interest income (tax
equivalent):
Incremental accretion
income on FDIC
purchased credit
impaired loans (1,199) (1,816) (2,200) (5,972) (9,096)
Incremental accretion
income on other FDIC
acquired loans (2) - - (68) - (234)
Incremental accretion
income on other
acquired loans (3,087) (2,749) (3,746) (11,983) (17,862)
Premium amortization on
acquired securities 1,348 1,991 2,253 7,738 10,217
Interest reversals on
nonaccrual loans 246 266 582 1,072 1,713
Operating net interest
income (tax
equivalent) (1) $85,808 $86,010 $81,151 $335,280 $319,286
======= ======= ======= ======== ========
Average interest
earning assets $8,612,498 $8,544,876 $7,937,308 $8,363,309 $7,685,734
Net interest margin
(tax equivalent) (1) 4.11% 4.13% 4.25% 4.12% 4.35%
Operating net interest
margin (tax
equivalent) (1) 3.99% 4.03% 4.09% 4.01% 4.15%
Three Months Ended Twelve Months Ended
December 31, September 30, December 31, December 31, December 31,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
Operating efficiency
ratio non-GAAP
reconciliation: (dollars in thousands)
Noninterest expense
(numerator A) $65,014 $67,264 $66,877 $261,142 $266,149
Adjustments to arrive
at operating
noninterest expense:
Acquisition-related
expenses (291) - (1,872) (2,727) (10,917)
Net benefit (cost) of
operation of OREO and
OPPO (612) 254 150 (544) 1,724
FDIC clawback liability
expense 28 (29) (812) (280) (979)
Loss on asset disposals (7) (31) (52) (205) (433)
State of Washington
Business and
Occupation ("B&O")
taxes (995) (1,382) (1,294) (4,752) (4,962)
Operating noninterest
expense (numerator B) $63,137 $66,076 $62,997 $252,634 $250,582
Net interest income
(tax equivalent) (1) $88,500 $88,318 $84,330 $344,425 $334,548
Noninterest income 22,330 23,166 24,745 88,082 91,473
Bank owned life
insurance tax
equivalent adjustment 586 577 576 2,448 2,391
--- --- --- ----- -----
Total revenue (tax
equivalent)
(denominator A) $111,416 $112,061 $109,651 $434,955 $428,412
Operating net interest
income (tax
equivalent) (1) $85,808 $86,010 $81,151 $335,280 $319,286
Adjustments to arrive
at operating
noninterest income
(tax equivalent):
Investment securities
gains, net (7) (572) (281) (1,181) (1,581)
Gain on asset disposals (52) (16) (4) (124) (129)
Mortgage loan
repurchase liability
adjustment (391) - (3,147) (391) (3,147)
Change in FDIC loss-
sharing asset 388 104 1,031 2,585 4,010
---
Operating noninterest
income (tax
equivalent) 22,854 23,259 22,920 91,419 93,017
------ ------ ------ ------ ------
Total operating revenue
(tax equivalent)
(denominator B) $108,662 $109,269 $104,071 $426,699 $412,303
Efficiency ratio (tax
equivalent) (numerator
A/denominator A) 58.35% 60.02% 60.99% 60.04% 62.12%
Operating efficiency
ratio (tax equivalent)
(numerator B/
denominator B) 58.10% 60.47% 60.53% 59.21% 60.78%
__________
(1) Tax-exempt interest income has been
adjusted to a tax equivalent basis. The amount
of such adjustment was an addition to net
interest income of $2.8 million, $2.7 million
and $2.5 million for the three months ended
December 31, 2016, September 30, 2016 and
December 31, 2015, respectively; and $10.8
million and $9.7 million for the twelve months
ended December 31, 2016 and December 31, 2015,
respectively.
(2) For 2016, incremental accretion income on
other FDIC acquired loans is no longer
considered significant and will no longer be
tracked for these non-GAAP financial measures.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/columbia-banking-system-announces-record-fourth-quarter-and-full-year-2016-results-300397183.html
SOURCE Columbia Banking System, Inc.
