COLUMBIA BANKING SYSTEM, INC. TACOMA, Wash., July 28, 2016 /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 second quarter 2016 earnings, "The second quarter of the year has traditionally been a strong quarter for us and it was again this year. Our bankers continue their impressive level of loan production, our nonperforming assets to total assets remains well below our peers, and the results of our expense initiatives are reflected in the continued improvement in our efficiency ratio." Ms. Dressel continued, "Our net interest margin has held up remarkably well over the past several years, but the prolonged low interest rate environment and flattening of the yield curve continue to apply downward pressure on the margin."
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Balance Sheet
Total assets at June 30, 2016 were $9.35 billion, an increase of $317.7 million from March 31, 2016. Loan growth of $229.9 million during the quarter was driven by strong loan originations of $337.8 million and seasonal increases in line utilization. Loan production was diversified across the portfolio, but was centered in our commercial business and commercial and multifamily residential real estate sectors. Securities available for sale were $2.28 billion at June 30, 2016, an increase of $93.4 million, or 4% from $2.19 billion at March 31, 2016. Total deposits at June 30, 2016 were $7.67 billion, an increase of $76.3 million from $7.60 billion at March 31, 2016. Core deposits comprised 97% of total deposits and were $7.45 billion at June 30, 2016, an increase of $63.3 million from March 31, 2016. The average cost of total deposits for the quarter was 0.04%, unchanged from the first quarter of 2016.
Income Statement
Net Interest Income
Net interest income for the second quarter of 2016 was $82.1 million, an increase of $2.0 million and $1.1 million from the linked and prior year periods, respectively. The linked quarter increase was driven principally by higher loan and securities volumes. The increase from the prior year period was also due to higher loan and securities volumes, partially offset by lower incremental accretion income on loans. Such accretion income was $2.9 million lower in the current quarter as compared to the second quarter of 2015. For additional information regarding net interest income, see the "Average Balances and Rates" table.
Noninterest Income
Noninterest income was $21.9 million for the second quarter of 2016, an increase of $1.3 million compared to $20.6 million for the first quarter of 2016. The linked quarter increase was primarily driven by higher loan and card revenue during the current quarter. The loan revenue increase was a result of loan fees as well as revenue from interest rate contracts associated with certain commercial loan production. Revenue from such contracts was $190 thousand higher than the linked quarter. Additionally, card revenue increased $399 thousand due primarily to increased interchange fees associated with higher debit card transaction volumes.
Compared to the second quarter of 2015, noninterest income increased by $478 thousand due to loan and card revenue as well as lower expenses from the FDIC loss-sharing asset. Card revenue was up $349 thousand principally from interchange fees as noted above. The increased loan revenue was driven by sales of Small Business Administration-guaranteed loans and, to a lesser extent, mortgage banking activity. These increases were partially offset by lower financial services revenue which is sensitive to volatility in the stock market.
The change in the FDIC loss-sharing asset has been a significant component of noninterest income but, over time, the significance has diminished. The following table reflects the income statement components of the change in the FDIC loss-sharing asset:
Three Months Ended Six Months Ended
------------------ ----------------
June 30, March 31, June 30, June 30, June 30,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
(in thousands)
Adjustments reflected in
income
Amortization, net $(883) $(1,332) $(1,376) (2,215) (3,670)
Loan impairment (20) 147 1 127 1,532
Sale of other real estate (24) 144 (208) 120 (627)
Write-downs of other real
estate (40) 18 52 (22) 1,124
Other (23) (80) 37 (103) 297
--- --- ---
Change in FDIC loss-
sharing asset $(990) $(1,103) $(1,494) $(2,093) $(1,344)
===== ======= ======= ======= =======
Noninterest Expense
Total noninterest expense for the second quarter of 2016 was $63.8 million, a decrease of $1.3 million compared to $65.1 million for the first quarter of 2016, which included $2.4 million of acquisition-related expenses. Removing those acquisition-related expenses from the prior quarter results in an increase in noninterest expense of $1.2 million. The increase was due to higher compensation costs in the current quarter.
Compared to the second quarter of 2015, noninterest expense decreased $4.7 million, or 7%, from $68.5 million. After removing the effect of the acquisition-related expenses, noninterest expense for the current quarter was $962 thousand higher than the second quarter of 2015 on the same basis. This increase was due to higher compensation and benefits, driven by higher insurance expense as well as higher OREO expenses. OREO expenses were a net cost of $84 thousand in the current quarter but were a net benefit of $563 thousand in the second quarter of 2015. These increases were partially offset by decreased legal and professional fees as well as decreased occupancy expense in the current quarter.
Net Interest Margin ("NIM")
Columbia's net interest margin (tax equivalent) for the second quarter of 2016 was 4.10%, a decline of 3 and 31 basis points from the linked and prior year periods, respectively. The declines were due to both lower incremental accretion income on acquired loans and lower yielding originated loans. Incremental accretion income was $4.4 million in the current period compared to $7.3 million in the prior year quarter. Columbia's operating net interest margin (tax equivalent)((1) )was 4.00% for the second quarter of 2016, a decrease of 3 basis points from 4.03% for the first quarter of 2016 and down 17 basis points compared to 4.17% for the second quarter of 2015 as a result of lower yielding originated loans.
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 Six Months Ended
------------------ ----------------
June 30, March 31, December 31, September 30, June 30, June 30, June 30,
2016 2016 2015 2015 2015 2016 2015
---- ---- ---- ---- ---- ---- ----
(dollars in thousands)
Incremental
accretion income
due to:
FDIC purchased
credit impaired
loans $1,300 $1,657 $2,200 $2,082 $2,367 $2,957 $4,814
Other FDIC
acquired loans
(2) - - 68 34 15 - 132
Other acquired
loans 3,074 3,073 3,746 4,293 4,889 6,147 9,823
----- ----- ----- ----- ----- ----- -----
Incremental
accretion income $4,374 $4,730 $6,014 $6,409 $7,271 $9,104 $14,769
====== ====== ====== ====== ====== ====== =======
Net interest
margin (tax
equivalent) 4.10% 4.13% 4.25% 4.37% 4.41% 4.12% 4.40%
Operating net
interest margin
(tax equivalent)
(1) 4.00% 4.03% 4.09% 4.18% 4.17% 4.01% 4.18%
(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 June 30, 2016, nonperforming assets to total assets were 0.36% compared to 0.55% at March 31, 2016 and 0.39% at December 31, 2015. Total nonperforming assets decreased $15.8 million due to a $14.0 million decrease in nonaccrual loans as well as a decrease in other real estate owned.
The following table sets forth information regarding nonaccrual loans and total nonperforming assets:
June 30, 2016 March 31, 2016 December 31,
2015
------------- -------------- -------------
(in thousands)
Nonaccrual loans:
Commercial business $9,548 $22,559 $9,437
Real estate:
One-to-four family
residential 957 730 820
Commercial and multifamily
residential 7,834 8,117 9,513
----- ----- -----
Total real estate 8,791 8,847 10,333
Real estate construction:
One-to-four family
residential 562 768 928
--- --- ---
Total real estate
construction 562 768 928
Consumer 4,014 4,717 766
----- ----- ---
Total nonaccrual loans 22,915 36,891 21,464
Other real estate owned and
other personal property
owned 10,613 12,427 13,738
Total nonperforming assets $33,528 $49,318 $35,202
======= ======= =======
The following table provides an analysis of the Company's allowance for loan and lease losses:
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 2016 March 31, 2016 June 30, 2015 June 30, 2016 June 30, 2015
------------- -------------- ------------- ------------- -------------
(in thousands)
Beginning balance $69,264 $68,172 $70,234 $68,172 $69,569
Charge-offs:
Commercial business (2,941) (3,773) (2,086) (6,714) (3,512)
One-to-four family
residential real estate (35) - (289) (35) (297)
Commercial and
multifamily residential
real estate (26) - (43) (26) (43)
Consumer (334) (266) (319) (600) (1,210)
Purchased credit impaired (2,898) (2,866) (2,876) (5,764) (6,976)
------ ------ ------ ------ ------
Total charge-offs (6,234) (6,905) (5,613) (13,139) (12,038)
Recoveries:
Commercial business 753 662 209 1,415 827
One-to-four family
residential real estate 20 41 15 61 27
Commercial and
multifamily residential
real estate 130 69 20 199 3,281
One-to-four family
residential real estate
construction 5 254 8 259 36
Commercial and
multifamily residential
real estate construction 1 1 2 2 5
Consumer 201 165 137 366 410
Purchased credit impaired 1,524 1,551 2,043 3,075 3,729
----- ----- ----- ----- -----
Total recoveries 2,634 2,743 2,434 5,377 8,315
----- ----- ----- ----- -----
Net charge-offs (3,600) (4,162) (3,179) (7,762) (3,723)
Provision for loan and
lease losses 3,640 5,254 2,202 8,894 3,411
----- ----- ----- ----- -----
Ending balance $69,304 $69,264 $69,257 $69,304 $69,257
======= ======= ======= ======= =======
The allowance for loan losses to period end loans was 1.13% at June 30, 2016 compared to 1.18% at March 31, 2016 and 1.17% at December 31, 2015. For the second quarter of 2016, Columbia recorded a net provision for loan and lease losses of $3.6 million compared to a net provision of $5.3 million for the linked quarter and $2.2 million for the comparable quarter last year. The provision for loan and lease losses recorded during the current quarter was due to growth in the loan portfolio and net charge-off activity.
Andy McDonald, Columbia's Executive Vice President and Chief Credit Officer, commented, "As we have previously stated, one of our long standing benchmarks coming out of the great recession was to have nonperforming assets at a level of 50 basis points or below. We achieved this metric during the second half of 2015 and now see this ratio moving within a range on either side of 50 basis points." Mr. McDonald continued, "The ratio is expected to move from period to period due to events occurring within the normal course of business."
Impact of FDIC Acquired Loan Accounting
While the significance of the FDIC acquired loan accounting has diminished over time, the following table illustrates the impact to earnings associated with Columbia's FDIC acquired loan portfolios:
FDIC Acquired Loan Accounting
Three Months Ended Six Months Ended
------------------ ----------------
June 30, 2016 March 31, 2016 June 30, 2015 June 30, 2016 June 30, 2015
------------- -------------- ------------- ------------- -------------
(in thousands)
Incremental
accretion
income on
FDIC
purchased
credit
impaired
loans $1,300 $1,657 $2,367 $2,957 $4,814
Incremental
accretion
income on
other FDIC
acquired
loans (1) - - 15 - 132
Provision for
losses on
FDIC
purchased
credit
impaired
loans (91) (653) (476) (744) (3,085)
Change in FDIC
loss-sharing
asset (990) (1,103) (1,494) (2,093) (1,344)
FDIC clawback
liability
recovery
(expense) (70) (209) 30 (279) 7
Pre-tax
earnings
impact $149 $(308) $442 $(159) $524
==== ===== ==== ===== ====
(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 June 30, 2016, the accretable yield on purchased credit impaired loans was $52.9 million. Accretable yield is subject to change based upon expected future loan cash flows, which are remeasured by Columbia on a quarterly basis.
The $990 thousand change in the FDIC loss-sharing asset in the current quarter reduced noninterest income and consisted primarily of $883 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 pages.
Stock Repurchase Program
The Board of Directors approved a stock repurchase program which succeeds the prior program that was adopted in October 2011. The program authorizes the Company to repurchase up to 2.9 million shares of our outstanding common stock, representing approximately 5% of the common shares outstanding. The Company intends to repurchase the shares from time to time in the open market or in private transactions, under conditions which allow such repurchases to be accretive to earnings while maintaining capital ratios that exceed the guidelines for a well-capitalized financial institution.
Organizational Update
Ms. Dressel commented, "As a result of our ongoing efforts to improve operating leverage while still preserving our commitment to our customers and the communities we serve, we consolidated two branches during the second quarter of 2016."
Ms. Dressel continued, "We firmly believe that in order to be a great place to bank, we must first be a great place to work. We strive to create an engaged work environment in which our employees can serve our customers effectively. We are delighted and gratified that Columbia Bank was recently named one of "Washington's Best Places to Work" 2016 by the Puget Sound Business Journal for the tenth consecutive year."
Conference Call Information
Columbia's management will discuss the second quarter 2016 results on a conference call scheduled for Thursday, July 28, 2016 at 1:00 p.m. Pacific Daylight Time (4:00 p.m. Eastern Daylight Time). Interested parties may listen to this discussion by calling 1-866-378-3802; Conference ID code #22782088.
A conference call replay will be available from approximately 4:00 p.m. PDT on July 28, 2016 through midnight PDT on August 4, 2016. The conference call replay can be accessed by dialing 1-855-859-2056 and entering Conference ID code #22782088.
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; and (6) legislation or regulatory requirements or changes may adversely affect the businesses in which Columbia is engaged. We believe the expectations reflected in our forward-looking statements are reasonable, based on information available to us on the date hereof. However, given the described uncertainties and risks, we cannot guarantee our future performance or results of operations and you should not place undue reliance on these forward-looking statements 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.
FINANCIAL STATISTICS
Columbia Banking System, Inc. Three Months Ended Six Months Ended
------------------ ----------------
Unaudited June 30, March 31, June 30, June 30, June 30,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
Earnings (dollars in thousands except per share amounts)
--------
Net interest income $82,140 $80,170 $81,010 $162,310 $161,374
Provision for loan and lease losses $3,640 $5,254 $2,202 $8,894 $3,411
Noninterest income $21,940 $20,646 $21,462 $42,586 $44,229
Noninterest expense $63,790 $65,074 $68,471 $128,864 $135,205
Acquisition-related expense
(included in noninterest expense) $ - $2,436 $5,643 $2,436 $8,617
Net income $25,405 $21,259 $21,946 $46,664 $46,307
Per Common Share
----------------
Earnings (basic) $0.44 $0.37 $0.38 $0.80 $0.80
Earnings (diluted) $0.44 $0.37 $0.38 $0.80 $0.80
Book value $21.93 $21.70 $21.38 $21.93 $21.38
Averages
--------
Total assets $9,230,791 $8,949,212 $8,532,173 $9,090,001 $8,519,047
Interest-earning assets $8,285,183 $8,005,945 $7,560,288 $8,145,564 $7,544,750
Loans $5,999,428 $5,827,440 $5,542,489 $5,913,434 $5,479,067
Securities, including Federal Home
Loan Bank stock $2,262,012 $2,147,457 $1,976,959 $2,204,734 $2,022,629
Deposits $7,622,266 $7,445,693 $6,978,472 $7,533,980 $6,953,254
Interest-bearing deposits $4,026,384 $3,983,314 $3,753,101 $4,004,849 $3,954,179
Interest-bearing liabilities $4,264,792 $4,124,582 $3,961,013 $4,194,687 $4,177,057
Noninterest-bearing deposits $3,595,882 $3,462,379 $3,225,371 $3,529,131 $2,999,075
Shareholders' equity $1,267,670 $1,258,411 $1,247,887 $1,263,040 $1,244,389
Financial Ratios
----------------
Return on average assets 1.10% 0.95% 1.03% 1.03% 1.09%
Return on average common equity 8.02% 6.76% 7.04% 7.39% 7.45%
Average equity to average assets 13.73% 14.06% 14.63% 13.89% 14.61%
Net interest margin (tax
equivalent) 4.10% 4.13% 4.41% 4.12% 4.40%
Efficiency ratio (tax equivalent)
(1) 59.30% 62.63% 64.96% 60.93% 63.95%
Operating efficiency ratio (tax
equivalent) (2) 58.81% 59.43% 60.78% 59.12% 61.90%
June 30, March 31, December 31,
Period end 2016 2016 2015
---------- ---- ---- ----
Total assets $9,353,651 $9,035,932 8,951,697
Loans, net of unearned income $6,107,143 $5,877,283 5,815,027
Allowance for loan and lease losses $69,304 $69,264 68,172
Securities, including Federal Home
Loan Bank stock $2,297,713 $2,196,407 2,170,416
Deposits $7,673,213 $7,596,949 7,438,829
Core deposits $7,447,963 $7,384,622 7,238,713
Shareholders' equity $1,274,479 $1,260,788 1,242,128
Nonperforming assets
--------------------
Nonaccrual loans $22,915 $36,891 21,464
Other real estate owned ("OREO")
and other personal property owned
("OPPO") 10,613 12,427 13,738
Total nonperforming assets $33,528 $49,318 $35,202
======= ======= =======
Nonperforming loans to period-end
loans 0.38% 0.63% 0.37%
Nonperforming assets to period-end
assets 0.36% 0.55% 0.39%
Allowance for loan and lease losses
to period-end loans 1.13% 1.18% 1.17%
Net loan charge-offs $3,600 (3) $4,162 (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 pages 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 June
30, 2016.
(4) For the three months ended March 31, 2016.
(5) For the three months ended December 31, 2015.
QUARTERLY FINANCIAL
STATISTICS
Columbia Banking System,
Inc. Three Months Ended
------------------
Unaudited June 30, March 31, December 31, September 30, June 30,
2016 2016 2015 2015 2015
---- ---- ---- ---- ----
(dollars in thousands except per share)
Earnings
--------
Net interest income $82,140 $80,170 $81,819 $81,694 $81,010
Provision for loan and
lease losses $3,640 $5,254 $2,349 $2,831 $2,202
Noninterest income $21,940 $20,646 $24,745 $22,499 $21,462
Noninterest expense $63,790 $65,074 $66,877 $64,067 $68,471
Acquisition-related
expense (included in
noninterest expense) $ - $2,436 $1,872 $428 $5,643
Net income $25,405 $21,259 $26,740 $25,780 $21,946
Per Common Share
----------------
Earnings (basic) $0.44 $0.37 $0.46 $0.45 $0.38
Earnings (diluted) $0.44 $0.37 $0.46 $0.45 $0.38
Book value $21.93 $21.70 $21.48 $21.69 $21.38
Averages
--------
Total assets $9,230,791 $8,949,212 $8,905,743 $8,672,692 $8,532,173
Interest-earning assets $8,285,183 $8,005,945 $7,937,308 $7,711,531 $7,560,288
Loans $5,999,428 $5,827,440 $5,762,048 $5,712,614 $5,542,489
Securities, including
Federal Home Loan Bank
stock $2,262,012 $2,147,457 $2,136,703 $1,945,174 $1,976,959
Deposits $7,622,266 $7,445,693 $7,440,628 $7,233,863 $6,978,472
Interest-bearing deposits $4,026,384 $3,983,314 $3,933,001 $3,910,695 $3,753,101
Interest-bearing
liabilities $4,264,792 $4,124,582 $4,031,214 $4,007,198 $3,961,013
Noninterest-bearing
deposits $3,595,882 $3,462,379 $3,507,627 $3,323,168 $3,225,371
Shareholders' equity $1,267,670 $1,258,411 $1,259,117 $1,239,830 $1,247,887
Financial Ratios
----------------
Return on average assets 1.10% 0.95% 1.20% 1.19% 1.03%
Return on average common
equity 8.02% 6.76% 8.50% 8.32% 7.04%
Average equity to average
assets 13.73% 14.06% 14.14% 14.30% 14.63%
Net interest margin (tax
equivalent) 4.10% 4.13% 4.25% 4.37% 4.41%
Period end
----------
Total assets $9,353,651 $9,035,932 $8,951,697 $8,755,984 $8,518,019
Loans, net of unearned
income $6,107,143 $5,877,283 $5,815,027 $5,746,511 $5,611,897
Allowance for loan and
lease losses $69,304 $69,264 $68,172 $69,049 $69,257
Securities, including
Federal Home Loan Bank
stock $2,297,713 $2,196,407 $2,170,416 $2,037,666 $1,926,248
Deposits $7,673,213 $7,596,949 $7,438,829 $7,314,805 $7,044,373
Core deposits $7,447,963 $7,384,622 $7,238,713 $7,104,554 $6,862,970
Shareholders' equity $1,274,479 $1,260,788 $1,242,128 $1,254,136 $1,236,214
Nonperforming, assets
---------------------
Nonaccrual loans $22,915 $36,891 $21,464 $19,080 $25,746
OREO and OPPO 10,613 12,427 13,738 19,475 20,665
------ ------ ------ ------ ------
Total nonperforming assets $33,528 $49,318 $35,202 $38,555 $46,411
------- ------- ------- ------- -------
Nonperforming loans to
period-end loans 0.38% 0.63% 0.37% 0.33% 0.46%
Nonperforming assets to
period-end assets 0.36% 0.55% 0.39% 0.44% 0.54%
Allowance for loan and
lease losses to period-
end loans 1.13% 1.18% 1.17% 1.20% 1.23%
Net loan charge-offs $3,600 $4,162 $3,226 $3,039 $3,179
LOAN PORTFOLIO COMPOSITION
Columbia Banking System,
Inc.
Unaudited June 30, March 31, December 31, September 30, June 30,
2016 2016 2015 2015 2015
---- ---- ---- ---- ----
Loan Portfolio Composition
-Dollars (dollars in thousands)
--------------------------
Commercial business $2,518,682 $2,401,193 $2,362,575 $2,354,731 $2,255,468
Real estate:
One-to-four family
residential 172,957 175,050 176,295 177,108 181,849
Commercial and multifamily
residential 2,651,476 2,520,352 2,491,736 2,449,847 2,406,594
--------- --------- --------- --------- ---------
Total real estate 2,824,433 2,695,402 2,668,031 2,626,955 2,588,443
Real estate construction:
One-to-four family
residential 129,195 133,447 135,874 136,783 127,311
Commercial and multifamily
residential 185,315 183,548 167,413 134,097 129,302
------- ------- ------- ------- -------
Total real estate
construction 314,510 316,995 303,287 270,880 256,613
Consumer 325,632 329,902 342,601 348,315 358,365
Purchased credit impaired 161,107 173,201 180,906 191,066 202,367
------- ------- ------- ------- -------
Subtotal loans 6,144,364 5,916,693 5,857,400 5,791,947 5,661,256
Less: Net unearned income (37,221) (39,410) (42,373) (45,436) (49,359)
------- ------- ------- ------- -------
Loans, net of unearned
income 6,107,143 5,877,283 5,815,027 5,746,511 5,611,897
Less: Allowance for loan
and lease losses (69,304) (69,264) (68,172) (69,049) (69,257)
Total loans, net 6,037,839 5,808,019 5,746,855 5,677,462 5,542,640
========= ========= ========= ========= =========
Loans held for sale $7,649 $3,681 $4,509 $6,637 $4,220
====== ====== ====== ====== ======
June 30, March 31, December 31, September 30, June 30,
Loan Portfolio
Composition -
Percentages 2016 2016 2015 2015 2015
-------------- ---- ---- ---- ---- ----
Commercial business 41.2% 40.9% 40.6% 41.0% 40.2%
Real estate:
One-to-four family
residential 2.8% 3.0% 3.0% 3.1% 3.2%
Commercial and
multifamily
residential 43.6% 42.9% 42.9% 42.6% 42.9%
---- ---- ---- ---- ----
Total real estate 46.4% 45.9% 45.9% 45.7% 46.1%
Real estate
construction:
One-to-four family
residential 2.1% 2.3% 2.3% 2.4% 2.3%
Commercial and
multifamily
residential 3.0% 3.1% 2.9% 2.3% 2.3%
--- --- --- --- ---
Total real estate
construction 5.1% 5.4% 5.2% 4.7% 4.6%
Consumer 5.3% 5.6% 5.9% 6.1% 6.4%
Purchased credit
impaired 2.6% 2.9% 3.1% 3.3% 3.6%
--- --- --- --- ---
Subtotal loans 100.6% 100.7% 100.7% 100.8% 100.9%
Less: Net unearned
income (0.6)% (0.7)% (0.7)% (0.8)% (0.9)%
Loans, net of
unearned income 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
DEPOSIT COMPOSITION
Columbia Banking System,
Inc.
Unaudited
June 30, March 31, December 31, September 30, June 30,
2016 2016 (1) 2015 (1) 2015 (1) 2015 (1)
---- ------- ------- ------- -------
Deposit Composition -
Dollars (dollars in thousands)
---------------------
Core deposits:
Demand and other non-
interest bearing $3,652,951 $3,553,468 $3,507,358 $3,386,968 $3,207,538
Interest bearing demand 957,548 958,469 925,909 911,686 912,637
Money market 1,818,337 1,838,364 1,788,552 1,776,087 1,718,000
Savings 692,694 695,588 657,016 651,695 630,897
Certificates of deposit,
less than $250,000 (1) 326,433 338,733 359,878 378,118 393,898
------- ------- ------- ------- -------
Total core deposits 7,447,963 7,384,622 7,238,713 7,104,554 6,862,970
Certificates of deposit,
$250,000 or more (1) 72,812 70,571 72,126 65,699 69,448
Certificates of deposit
insured by CDARS(R) 22,755 24,752 26,901 26,975 18,357
Brokered money market
accounts 129,590 116,878 100,854 117,196 93,061
------- ------- ------- ------- ------
Subtotal 7,673,120 7,596,823 7,438,594 7,314,424 7,043,836
Premium resulting from
acquisition date fair
value adjustment 93 126 235 381 537
--- --- --- --- ---
Total deposits $7,673,213 $7,596,949 $7,438,829 $7,314,805 $7,044,373
========== ========== ========== ========== ==========
June 30, March 31, December 31, September 30, June 30,
Deposit Composition -
Percentages 2016 2016 2015 2015 2015
--------------------- ---- ---- ---- ---- ----
Core deposits:
Demand and other non-
interest bearing 47.6% 46.8% 47.2% 46.3% 45.5%
Interest bearing
demand 12.5% 12.6% 12.4% 12.5% 13.0%
Money market 23.7% 24.2% 24.0% 24.3% 24.4%
Savings 9.0% 9.2% 8.8% 8.9% 9.0%
Certificates of
deposit, less than
$250,000 (1) 4.3% 4.5% 4.8% 5.2% 5.6%
--- --- --- --- ---
Total core deposits 97.1% 97.3% 97.2% 97.2% 97.5%
Certificates of
deposit, $250,000 or
more (1) 0.9% 0.9% 1.0% 0.8% 0.9%
Certificates of
deposit insured by
CDARS(R) 0.3% 0.3% 0.4% 0.4% 0.3%
Brokered money market
accounts 1.7% 1.5% 1.4% 1.6% 1.3%
Total 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====
(1) Reclassified to conform to
current period's presentation. The
reclassification was limited to
changing the threshold for
certificates of deposit presented to
the current FDIC insurance limit.
CONSOLIDATED STATEMENTS OF
INCOME
Columbia Banking System, Inc. Three Months Ended Six Months Ended
------------------ ----------------
Unaudited June 30, March 31, June 30, June 30, June 30,
2016 2016 2015 (1) 2016 2015 (1)
---- ---- ------- ---- -------
(in thousands except per share)
Interest Income
Loans $71,651 $70,316 $71,744 $141,967 $142,566
Taxable securities 8,829 8,017 7,260 16,846 14,786
Tax-exempt securities 2,795 2,803 3,010 5,598 6,052
Deposits in banks 28 38 26 66 53
--- --- --- --- ---
Total interest income 83,303 81,174 82,040 164,477 163,457
Interest Expense
Deposits 787 742 740 1,529 1,488
Federal Home Loan Bank
advances 241 124 154 365 313
Other borrowings 135 138 136 273 282
--- --- --- --- ---
Total interest expense 1,163 1,004 1,030 2,167 2,083
----- ----- ----- ----- -----
Net Interest Income 82,140 80,170 81,010 162,310 161,374
Provision for loan and lease
losses 3,640 5,254 2,202 8,894 3,411
----- ----- ----- ----- -----
Net interest income after
provision for loan and lease
losses 78,500 74,916 78,808 153,416 157,963
Noninterest Income
Deposit account and treasury
management fees (1) 7,093 6,989 7,351 14,082 14,211
Card revenue (1) 6,051 5,652 5,702 11,703 11,065
Financial services and trust
revenue (1) 2,780 2,821 3,217 5,601 6,341
Loan revenue (1) 2,802 2,262 2,322 5,064 4,925
Merchant processing revenue 2,272 2,102 2,340 4,374 4,380
Bank owned life insurance 1,270 1,116 1,206 2,386 2,284
Investment securities gains,
net 229 373 343 602 1,064
Change in FDIC loss-sharing
asset (990) (1,103) (1,494) (2,093) (1,344)
Other (1) 433 434 475 867 1,303
--- --- --- --- -----
Total noninterest income 21,940 20,646 21,462 42,586 44,229
Noninterest Expense
Compensation and employee
benefits 37,291 36,319 38,446 73,610 77,546
Occupancy 7,652 10,173 8,687 17,825 16,680
Merchant processing expense 1,118 1,033 1,079 2,151 2,056
Advertising and promotion 1,043 842 1,195 1,885 2,126
Data processing 3,929 4,146 4,242 8,075 9,226
Legal and professional fees 1,777 1,325 2,847 3,102 5,354
Taxes, licenses and fees 1,298 1,290 1,427 2,588 2,659
Regulatory premiums 1,068 1,141 1,321 2,209 2,542
Net cost (benefit) of
operation of other real
estate owned 84 104 (563) 188 (1,809)
Amortization of intangibles 1,483 1,583 1,718 3,066 3,535
Other 7,047 7,118 8,072 14,165 15,290
----- ----- ----- ------ ------
Total noninterest expense 63,790 65,074 68,471 128,864 135,205
------ ------ ------ ------- -------
Income before income taxes 36,650 30,488 31,799 67,138 66,987
Provision for income taxes 11,245 9,229 9,853 20,474 20,680
------ ----- ----- ------ ------
Net Income $25,405 $21,259 $21,946 $46,664 $46,307
======= ======= ======= ======= =======
Earnings per common share
Basic $0.44 $0.37 $0.38 $0.80 $0.80
Diluted $0.44 $0.37 $0.38 $0.80 $0.80
Dividends paid per common
share $0.37 $0.38 $0.34 $0.75 $0.64
Weighted average number of
common shares outstanding 57,185 57,114 57,055 57,149 56,999
Weighted average number of
diluted common shares
outstanding 57,195 57,125 57,069 57,160 57,012
(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 June 30, March 31, December 31,
2016 2016 2015
---- ---- ----
(in thousands)
ASSETS
Cash and due from banks $167,172 $150,683 $166,929
Interest-earning deposits with banks 11,216 38,248 8,373
------ ------ -----
Total cash and cash equivalents 178,388 188,931 175,302
Securities available for sale at fair value (amortized cost of $2,237,264, $2,156,999 and $2,157,610, respectively) 2,279,552 2,186,166 2,157,694
Federal Home Loan Bank stock at cost 18,161 10,241 12,722
Loans held for sale 7,649 3,681 4,509
Loans, net of unearned income of ($37,221), ($39,410) and ($42,373), respectively 6,107,143 5,877,283 5,815,027
Less: allowance for loan and lease losses 69,304 69,264 68,172
------ ------ ------
Loans, net 6,037,839 5,808,019 5,746,855
FDIC loss-sharing asset 4,266 5,954 6,568
Interest receivable 29,738 29,304 27,877
Premises and equipment, net 156,446 158,101 164,239
Other real estate owned 10,613 12,427 13,738
Goodwill 382,762 382,762 382,762
Other intangible assets, net 20,511 21,994 23,577
Other assets 227,726 228,352 235,854
Total assets $9,353,651 $9,035,932 $8,951,697
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing $3,652,951 $3,553,468 $3,507,358
Interest-bearing 4,020,262 4,043,481 3,931,471
--------- --------- ---------
Total deposits 7,673,213 7,596,949 7,438,829
Federal Home Loan Bank advances 204,512 6,521 68,531
Securities sold under agreements to repurchase 89,218 73,839 99,699
Other liabilities 112,229 97,835 102,510
------- ------ -------
Total liabilities 8,079,172 7,775,144 7,709,569
Commitments and contingent liabilities
June 30, March 31, 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 58,025 58,008 57,724 992,343 991,026 990,281
Retained earnings 259,108 255,202 255,925
Accumulated other comprehensive income
(loss) 20,811 12,343 (6,295)
------ ------ ------
Total shareholders' equity 1,274,479 1,260,788 1,242,128
Total liabilities and shareholders' equity $9,353,651 $9,035,932 $8,951,697
========== ========== ==========
AVERAGE BALANCES AND RATES
Columbia Banking System, Inc.
Unaudited
Three Months Ended Three Months Ended
------------------ ------------------
June 30, 2016 June 30, 2015
------------- -------------
Average Interest Average Average Interest Average
Balances Earned / Paid Rate Balances Earned / Paid Rate
-------- ------------- ---- -------- ------------- ----
(dollars in thousands)
ASSETS
Loans, net (1)(2) $5,999,428 $72,952 4.86% $5,542,489 $72,410 5.23%
Taxable securities 1,801,195 8,829 1.96% 1,516,740 7,260 1.91%
Tax exempt securities (2) 460,817 4,300 3.73% 460,219 4,632 4.03%
Interest-earning deposits
with banks 23,743 28 0.47% 40,840 26 0.25%
------ --- ------ ---
Total interest-earning
assets 8,285,183 $86,109 4.16% 7,560,288 $84,328 4.46%
Other earning assets 154,843 148,573
Noninterest-earning assets 790,765 823,312
------- -------
Total assets $9,230,791 $8,532,173
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Certificates of deposit $428,279 $140 0.13% $489,984 $236 0.19%
Savings accounts 692,179 18 0.01% 626,930 17 0.01%
Interest-bearing demand 949,669 183 0.08% 883,366 155 0.07%
Money market accounts 1,956,257 446 0.09% 1,752,821 332 0.08%
--------- --- --------- ---
Total interest-bearing
deposits 4,026,384 787 0.08% 3,753,101 740 0.08%
Federal Home Loan Bank
advances 161,637 241 0.60% 121,828 154 0.51%
Other borrowings 76,771 135 0.70% 86,084 136 0.63%
------ --- ------ ---
Total interest-bearing
liabilities 4,264,792 $1,163 0.11% 3,961,013 $1,030 0.10%
Noninterest-bearing
deposits 3,595,882 3,225,371
Other noninterest-bearing
liabilities 102,447 97,902
Shareholders' equity 1,267,670 1,247,887
--------- ---------
Total liabilities &
shareholders' equity $9,230,791 $8,532,173
========== ==========
Net interest income (tax equivalent) $84,946 $83,298
======= =======
Net interest margin (tax equivalent) 4.10% 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
$1.2 million and $1.5 million
for the three month periods
ended June 30, 2016 and June
30, 2015, respectively. The
incremental accretion on
acquired loans was $4.4 million
and $7.3 million for the three
months ended June 30, 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 $666 thousand
for the three months ended June
30, 2016 and 2015,
respectively. The tax
equivalent yield adjustment to
interest earned on tax exempt
securities was $1.5 million and
$1.6 million for the three
months ended June 30, 2016 and
2015, respectively.
AVERAGE BALANCES AND RATES
Columbia Banking System, Inc.
Unaudited
Three Months Ended Three Months Ended
------------------ ------------------
June 30, 2016 March 31, 2016
------------- --------------
Average Interest Average Average Interest Average
Balances Earned / Paid Rate Balances Earned / Paid Rate
-------- ------------- ---- -------- ------------- ----
(dollars in thousands)
ASSETS
Loans, net (1)(2) $5,999,428 $72,952 4.86% $5,827,440 $71,298 4.89%
Taxable securities 1,801,195 8,829 1.96% 1,689,289 8,017 1.90%
Tax exempt securities (2) 460,817 4,300 3.73% 458,168 4,312 3.76%
Interest-earning deposits
with banks 23,743 28 0.47% 31,048 38 0.49%
------ --- ------ ---
Total interest-earning
assets 8,285,183 $86,109 4.16% 8,005,945 $83,665 4.18%
Other earning assets 154,843 154,336
Noninterest-earning assets 790,765 788,931
------- -------
Total assets $9,230,791 $8,949,212
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Certificates of deposit $428,279 $140 0.13% $448,915 $144 0.13%
Savings accounts 692,179 18 0.01% 675,876 17 0.01%
Interest-bearing demand 949,669 183 0.08% 927,948 169 0.07%
Money market accounts 1,956,257 446 0.09% 1,930,575 412 0.09%
--------- --- --------- ---
Total interest-bearing
deposits 4,026,384 787 0.08% 3,983,314 742 0.07%
Federal Home Loan Bank
advances 161,637 241 0.60% 50,569 124 0.98%
Other borrowings 76,771 135 0.70% 90,699 138 0.61%
------ --- ------ ---
Total interest-bearing
liabilities 4,264,792 $1,163 0.11% 4,124,582 $1,004 0.10%
Noninterest-bearing
deposits 3,595,882 3,462,379
Other noninterest-bearing
liabilities 102,447 103,840
Shareholders' equity 1,267,670 1,258,411
--------- ---------
Total liabilities &
shareholders' equity $9,230,791 $8,949,212
========== ==========
Net interest income (tax equivalent) $84,946 $82,661
======= =======
Net interest margin (tax equivalent) 4.10% 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
$1.2 million and $1.1 million
for the three month periods
ended June 30, 2016 and March
31, 2016. The incremental
accretion on acquired loans was
$4.4 million and $4.7 million
for the three months ended June
30, 2016 and March 31, 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 $982 thousand
for the three months ended June
30, 2016 and March 31, 2016,
respectively. The tax
equivalent yield adjustment to
interest earned on tax exempt
securities was $1.5 million for
both three month periods ended
June 30, 2016 and March 31,
2016.
AVERAGE BALANCES AND RATES
Columbia Banking System, Inc.
Unaudited
Six Months Ended June 30, Six Months Ended June 30,
------------------------- -------------------------
2016 2015
---- ----
Average Interest Average Average Interest Average
Balances Earned / Paid Rate Balances Earned / Paid Rate
-------- ------------- ---- -------- ------------- ----
(dollars in thousands)
ASSETS
Loans, net (1)(2) $5,913,434 $144,250 4.88% $5,479,067 $143,897 5.25%
Taxable securities 1,745,242 16,846 1.93% 1,562,776 14,786 1.89%
Tax exempt securities (2) 459,492 8,612 3.75% 459,853 9,311 4.05%
Interest-earning deposits
with banks 27,396 66 0.48% 43,054 53 0.25%
------ --- ------ ---
Total interest-earning
assets 8,145,564 $169,774 4.17% 7,544,750 $168,047 4.45%
Other earning assets 154,589 147,321
Noninterest-earning assets 789,848 826,976
------- -------
Total assets $9,090,001 $8,519,047
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Certificates of deposit $438,597 $284 0.13% $496,101 $476 0.19%
Savings accounts 684,027 35 0.01% 626,036 36 0.01%
Interest-bearing demand 938,809 352 0.07% 1,047,844 293 0.06%
Money market accounts 1,943,416 858 0.09% 1,784,198 683 0.08%
--------- --- --------- ---
Total interest-bearing
deposits 4,004,849 1,529 0.08% 3,954,179 1,488 0.08%
Federal Home Loan Bank
advances 106,103 365 0.69% 125,812 313 0.50%
Other borrowings 83,735 273 0.65% 97,066 282 0.58%
------ --- ------ ---
Total interest-bearing
liabilities 4,194,687 $2,167 0.10% 4,177,057 $2,083 0.10%
Noninterest-bearing
deposits 3,529,131 2,999,075
Other noninterest-bearing
liabilities 103,143 98,526
Shareholders' equity 1,263,040 1,244,389
--------- ---------
Total liabilities &
shareholders' equity $9,090,001 $8,519,047
========== ==========
Net interest income (tax equivalent) $167,607 $165,964
======== ========
Net interest margin (tax equivalent) 4.12% 4.40%
==== ====
(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
$2.3 million and $2.6 million
for the six months ended June
30, 2016 and 2015,
respectively. The incremental
accretion on acquired loans was
$9.1 million and $14.8 million
for the six months ended June
30, 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
$2.3 million and $1.3 million
for the six months ended June
30, 2016 and 2015,
respectively. The tax
equivalent yield adjustment to
interest earned on tax exempt
securities was $3.0 million and
$3.3 million for the six months
ended June 30, 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 Six Months Ended
------------------ ----------------
June 30, March 31, June 30, June 30, June 30,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
Operating net interest
margin non-GAAP
reconciliation: (dollars in thousands)
Net interest income
(tax equivalent) (1) $84,946 $82,661 $83,298 $167,607 $165,964
------- ------- ------- -------- --------
Adjustments to arrive
at operating net
interest income (tax
equivalent):
Incremental accretion
income on FDIC
purchased credit
impaired loans (1,300) (1,657) (2,367) (2,957) (4,814)
Incremental accretion
income on other FDIC
acquired loans (2) - - (15) - (132)
Incremental accretion
income on other
acquired loans (3,074) (3,073) (4,889) (6,147) (9,823)
Premium amortization on
acquired securities 2,075 2,324 2,706 4,399 5,567
Interest reversals on
nonaccrual loans 107 453 156 560 806
Operating net interest
income (tax
equivalent) (1) $82,754 $80,708 $78,889 $163,462 $157,568
======= ======= ======= ======== ========
Average interest
earning assets $8,285,183 $8,005,945 $7,560,288 $8,145,564 $7,544,750
Net interest margin
(tax equivalent) (1) 4.10% 4.13% 4.41% 4.12% 4.40%
Operating net interest
margin (tax
equivalent) (1) 4.00% 4.03% 4.17% 4.01% 4.18%
Three Months Ended Six Months Ended
------------------ ----------------
June 30, March 31, June 30, June 30, June 30,
2016 2016 2015 2016 2015
---- ---- ---- ---- ----
Operating efficiency
ratio non-GAAP
reconciliation: (dollars in thousands)
Noninterest expense
(numerator A) $63,790 $65,074 $68,471 $128,864 $135,205
Adjustments to arrive
at operating
noninterest expense:
Acquisition-related
expenses - (2,436) (5,643) (2,436) (8,617)
Net benefit (cost) of
operation of OREO and
OPPO (84) (102) 561 (186) 1,802
FDIC clawback liability
expense (70) (209) 30 (279) 7
Loss on asset disposals (7) (160) (10) (167) (106)
State of Washington
Business and
Occupation ("B&O")
taxes (1,204) (1,171) (1,327) (2,375) (2,456)
Operating noninterest
expense (numerator B) $62,425 $60,996 $62,082 $123,421 $125,835
Net interest income
(tax equivalent) (1) $84,946 $82,661 $83,298 $167,607 $165,964
Noninterest income 21,940 20,646 21,462 42,586 44,229
Bank owned life
insurance tax
equivalent adjustment 685 600 649 1,285 1,230
--- --- --- ----- -----
Total revenue (tax
equivalent)
(denominator A) $107,571 $103,907 $105,409 $211,478 $211,423
Operating net interest
income (tax
equivalent) (1) $82,754 $80,708 $78,889 $163,462 $157,568
Adjustments to arrive
at operating
noninterest income
(tax equivalent):
Investment securities
gains, net (229) (373) (343) (602) (1,064)
Gain on asset disposals (2) (54) (5) (56) (5)
Change in FDIC loss-
sharing asset 990 1,103 1,494 2,093 1,344
-----
Operating noninterest
income (tax
equivalent) 23,384 21,922 23,257 45,306 45,734
------ ------ ------ ------ ------
Total operating revenue
(tax equivalent)
(denominator B) $106,138 $102,630 $102,146 $208,768 $203,302
Efficiency ratio (tax
equivalent) (numerator
A/denominator A) 59.30% 62.63% 64.96% 60.93% 63.95%
Operating efficiency
ratio (tax equivalent)
(numerator B/
denominator B) 58.81% 59.43% 60.78% 59.12% 61.90%
(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, $2.5 million
and $2.3 million for the three
months ended June 30, 2016, March
31, 2016 and June 30, 2015,
respectively; and $5.3 million and
$4.6 million for the six months
ended June 30, 2016 and June 30,
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.
Contacts: Melanie J. Dressel,
President and
Chief Executive Officer
(253) 305-1911
Clint E. Stein,
Executive Vice President
and Chief Financial
Officer
(253) 593-8304
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SOURCE Columbia Banking System, Inc.
