Highlights
- Record fourth quarter net income of $26.7 million with diluted earnings per share of $0.46
- Record full year 2015 net income of $98.8 million with diluted earnings per share of $1.71
- New loan production for the quarter of $272 million and record full year loan production of $1.12 billion
- Solid deposit growth of $124 million, or 2% for the quarter and $514 million, or 7% for the year
- Nonperforming assets to period end assets reduced to 0.39%, a decrease of 5 basis points from September 30, 2015 and a decrease of 23 basis points from year end 2014
TACOMA, Wash., Jan. 28, 2016 /PRNewswire/ -- Melanie Dressel, President and Chief Executive Officer of Columbia Banking System and Columbia Bank COLB ("Columbia"), said today upon the release of Columbia's fourth quarter 2015 earnings, "Our record earnings for the fourth quarter and full year were the result of several positive trends that continued to build throughout 2015. We are proud of our record loan production of $1.1 billion for the year." Ms. Dressel continued, "Our operating leverage continues to improve as we experienced growth in non-interest income and a lower expense to asset ratio. Asset quality improved further with our nonperforming assets to total assets declining to 0.39%. However, the future is not without challenges as we continue to experience intense pricing competition and the increasing probability of a lower interest rate environment for a longer period of time."
Balance Sheet
Loans were $5.82 billion at December 31, 2015, up $68.5 million from September 30, 2015 due to substantial loan originations during the current quarter. Compared to the prior year end, loans increased $369.6 million, or 7%, during 2015. Securities were $2.17 billion at December 31, 2015, an increase of $132.8 million, or 7% from $2.04 billion at September 30, 2015 due primarily to purchases of securities resulting from deposits growing in excess of loans. Total deposits at December 31, 2015 were $7.44 billion, an increase of $124.0 million from $7.31 billion at September 30, 2015. Core deposits comprised 96% of total deposits and were $7.13 billion at December 31, 2015, an increase of $141.7 million from September 30, 2015. The average rate on interest-bearing deposits was 0.07%, down from 0.08% for the third quarter of 2015 and the average cost on all deposits was 0.04%, unchanged from the third quarter of 2015.
Income Statement
Net Interest Income
Net interest income for the fourth quarter of 2015 was $81.8 million, an increase of $125 thousand compared to the third quarter of 2015. This increase was primarily due to higher average loan and securities balances in the current quarter, which were largely offset by lower yields on loans, lower incremental accretion income and an increase in interest reversals on nonaccrual loans. Compared to the fourth quarter of 2014, net interest income increased by $3.1 million from $78.8 million. The increase from the prior year period was the result of organic loan growth, partially offset by a decline in incremental accretion income. For additional information regarding net interest income, see the "Average Balances and Rates" table.
Noninterest Income
Noninterest income was $24.7 million for the fourth quarter of 2015, an increase of $2.2 million compared to $22.5 million for the third quarter of 2015. The linked quarter increase was primarily due to the $3.1 million adjustment to the mortgage repurchase liability related to our acquisition of West Coast Bank recorded during the current quarter through other noninterest income. This increase was partially offset by lower service charge and merchant fee income, which were down $648 thousand and $249 thousand from the prior quarter, respectively. In addition, there were lower loan sale gains recorded in the current quarter, which were down $593 thousand from the prior quarter.
Compared to the fourth quarter of 2014, noninterest income increased by $9.6 million due to both the change in FDIC loss-sharing asset, which accounted for $4.3 million of the increase, and a $4.0 million increase in other noninterest income primarily due to the previously noted $3.1 million adjustment to the mortgage repurchase liability. 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 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 |
Twelve Months Ended | |||||||||||||||
December 31, |
December 31, | |||||||||||||||
2015 |
2014 |
2015 |
2014 | |||||||||||||
(in thousands) | ||||||||||||||||
Adjustments reflected in income |
||||||||||||||||
Amortization, net |
(1,098) |
(5,071) |
(6,184) |
(21,279) |
||||||||||||
Loan impairment (recapture) |
855 |
(434) |
2,268 |
2,301 |
||||||||||||
Sale of other real estate |
(484) |
(75) |
(1,237) |
(2,179) |
||||||||||||
Write-downs of other real estate |
10 |
206 |
1,158 |
1,065 |
||||||||||||
Other |
(314) |
70 |
(15) |
103 |
||||||||||||
Change in FDIC loss-sharing asset |
$ |
(1,031) |
$ |
(5,304) |
$ |
(4,010) |
$ |
(19,989) |
||||||||
Noninterest Expense
Total noninterest expense for the fourth quarter of 2015 was $66.9 million, an increase of $2.8 million compared to $64.1 million for the third quarter of 2015. This increase was driven by higher acquisition-related expenses in the current quarter of $1.9 million compared to $428 thousand in the linked quarter. After removing the effect of the acquisition-related expenses, noninterest expense for the current quarter was $1.4 million higher than the third quarter of 2015 on the same basis. This increase was due to $852 thousand in higher occupancy costs related to the write-down of land pending sale as well as higher expense related to the FDIC clawback liability of $813 thousand during the current quarter compared to $174 thousand in the prior quarter. These increases were partially offset by lower fraud losses of $209 thousand in the current quarter compared to $834 thousand during the third quarter of 2015.
Compared to the fourth quarter of 2014, noninterest expense increased $2.7 million, or 4%, from $64.2 million. The primary drivers of the increase were higher expenses resulting from the Intermountain Community Bancorp acquisition, which occurred during the fourth quarter of 2014 as well as higher clawback liability expense and occupancy expense as noted above. Also contributing to the increase was our fourth quarter 2014 adoption of Accounting Standards Update 2014-01, which reclassified approximately $800 thousand in affordable housing projects expense from noninterest expense to tax expense. These increases were partially offset by a decrease of $2.7 million in acquisition-related expenses.
Net Interest Margin ("NIM")
Columbia's net interest margin (tax equivalent) of 4.25% for the fourth quarter of 2015 decreased 12 basis points from 4.37% for the third quarter of 2015 due to lower yields on loans, lower incremental accretion on acquired loans and an increase in securities as a percentage of earning assets. Compared to the fourth quarter of 2014, Columbia's net interest margin decreased 25 basis points from 4.50%, because of both lower yields on loans and lower incremental accretion on acquired loans, which was $8.8 million for the prior year quarter, compared to $6.0 million for the current quarter. Columbia's operating net interest margin (tax equivalent)(1) was 4.09% for the fourth quarter of 2015, a decrease of 9 basis points from 4.18% for the third quarter of 2015 and down 8 basis points compared to 4.17% for the fourth quarter of 2014 as a result of the continuing low interest rate environment.
The following table shows the impact to interest income resulting from accretion of income on acquired loan portfolios as well as the net interest margin and operating net interest margin:
Three Months Ended |
Twelve Months Ended | |||||||||||||||
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Incremental accretion income due to: |
||||||||||||||||
FDIC purchased credit impaired loans |
$ |
2,200 |
$ |
3,796 |
$ |
9,096 |
$ |
20,224 |
||||||||
Other FDIC acquired loans |
68 |
10 |
234 |
484 |
||||||||||||
Other acquired loans |
3,746 |
4,957 |
17,862 |
21,093 |
||||||||||||
Incremental accretion income |
$ |
6,014 |
$ |
8,763 |
$ |
27,192 |
$ |
41,801 |
||||||||
Net interest margin (tax equivalent) |
4.25 |
% |
4.50 |
% |
4.35 |
% |
4.76 |
% | ||||||||
Operating net interest margin (tax equivalent) (1) |
4.09 |
% |
4.17 |
% |
4.15 |
% |
4.21 |
% |
__________ | |
(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. |
Asset Quality
At December 31, 2015, nonperforming assets to total assets were 0.39% compared to 0.44% at September 30, 2015. Total nonperforming assets decreased $3.4 million due to a $5.7 million reduction in other real estate owned resulting from sales activity during the current quarter, partially offset by an increase in nonaccrual loans.
The following table sets forth information regarding nonaccrual loans and total nonperforming assets:
December 31, 2015 |
September 30, 2015 |
December 31, 2014 | ||||||||||
(in thousands) | ||||||||||||
Nonaccrual loans: |
||||||||||||
Commercial business |
$ |
9,437 |
$ |
10,150 |
$ |
16,799 |
||||||
Real estate: |
||||||||||||
One-to-four family residential |
820 |
2,012 |
2,822 |
|||||||||
Commercial and multifamily residential |
9,513 |
4,317 |
7,847 |
|||||||||
Total real estate |
10,333 |
6,329 |
10,669 |
|||||||||
Real estate construction: |
||||||||||||
One-to-four family residential |
928 |
1,472 |
465 |
|||||||||
Commercial and multifamily residential |
— |
470 |
480 |
|||||||||
Total real estate construction |
928 |
1,942 |
945 |
|||||||||
Consumer |
766 |
659 |
2,939 |
|||||||||
Total nonaccrual loans |
21,464 |
19,080 |
31,352 |
|||||||||
Other real estate owned and other personal property owned |
13,738 |
19,475 |
22,225 |
|||||||||
Total nonperforming assets |
$ |
35,202 |
$ |
38,555 |
$ |
53,577 |
The following table provides an analysis of the Company's allowance for loan and lease losses:
Three Months Ended December 31, |
Twelve Months Ended December 31, | |||||||||||||||
2015 |
2014 |
2015 |
2014 | |||||||||||||
(in thousands) | ||||||||||||||||
Beginning balance |
$ |
69,049 |
$ |
67,871 |
$ |
69,569 |
$ |
72,454 |
||||||||
Charge-offs: |
||||||||||||||||
Commercial business |
(2,184) |
(991) |
(8,266) |
(4,289) |
||||||||||||
One-to-four family residential real estate |
(79) |
(23) |
(376) |
(230) |
||||||||||||
Commercial and multifamily residential real estate |
(264) |
— |
(505) |
(2,993) |
||||||||||||
Consumer |
(545) |
(518) |
(2,066) |
(2,774) |
||||||||||||
Purchased credit impaired |
(3,680) |
(3,086) |
(13,854) |
(14,436) |
||||||||||||
Total charge-offs |
(6,752) |
(4,618) |
(25,067) |
(24,722) |
||||||||||||
Recoveries: |
||||||||||||||||
Commercial business |
886 |
449 |
2,336 |
3,007 |
||||||||||||
One-to-four family residential real estate |
19 |
56 |
307 |
159 |
||||||||||||
Commercial and multifamily residential real estate |
277 |
224 |
3,975 |
940 |
||||||||||||
One-to-four family residential real estate construction |
52 |
1,426 |
193 |
1,930 |
||||||||||||
Commercial and multifamily residential real estate construction |
1 |
— |
8 |
— |
||||||||||||
Consumer |
224 |
422 |
931 |
1,353 |
||||||||||||
Purchased credit impaired |
2,067 |
2,031 |
7,329 |
7,721 |
||||||||||||
Total recoveries |
3,526 |
4,608 |
15,079 |
15,110 |
||||||||||||
Net charge-offs |
(3,226) |
(10) |
(9,988) |
(9,612) |
||||||||||||
Provision for loan and lease losses |
2,349 |
1,708 |
8,591 |
6,727 |
||||||||||||
Ending balance |
$ |
68,172 |
$ |
69,569 |
$ |
68,172 |
$ |
69,569 |
The allowance for loan losses to period end loans was 1.17% at December 31, 2015 compared to 1.20% at September 30, 2015. For the fourth quarter of 2015, Columbia recorded a net provision for loan and lease losses of $2.3 million compared to a net provision of $1.7 million for the comparable quarter last year.
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 |
Twelve Months Ended | |||||||||||||||
December 31, 2015 |
December 31, 2014 |
December 31, 2015 |
December 31, 2014 | |||||||||||||
(in thousands) | ||||||||||||||||
Incremental accretion income on FDIC purchased credit impaired loans |
$ |
2,200 |
$ |
3,796 |
$ |
9,096 |
$ |
20,224 |
||||||||
Incremental accretion income on other FDIC acquired loans |
68 |
10 |
234 |
484 |
||||||||||||
Recapture (provision) for losses on FDIC purchased credit impaired loans |
(1,349) |
542 |
(3,915) |
(2,877) |
||||||||||||
Change in FDIC loss-sharing asset |
(1,031) |
(5,304) |
(4,010) |
(19,989) |
||||||||||||
FDIC clawback liability recovery (expense) |
(812) |
8 |
(979) |
(294) |
||||||||||||
Pre-tax earnings impact |
$ |
(924) |
$ |
(948) |
$ |
426 |
$ |
(2,452) |
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, 2015, the accretable yield on purchased credit impaired loans was $59.0 million. Accretable yield is subject to change based upon expected future loan cash flows, which are remeasured by Columbia on a quarterly basis.
The $1.0 million change in the FDIC loss-sharing asset in the current quarter reduced noninterest income and consisted primarily of $1.1 million 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 following pages.
Organizational Update
Ms. Dressel commented, "We were very pleased to be recognized again by Forbes on its 2016 list of "America's Best Banks", ranking 19th in the country. The rankings are based on asset quality, capital adequacy, net interest margin and profitability of the nation's 100 largest publicly traded banks and thrifts."
Ms. Dressel continued, "I am proud and delighted that Columbia Bank's "Warm Hearts Winter Drive" has so far raised over $150,000 in cash and almost 12,000 pieces of new cold weather items in response to the urgent need of people struggling with homelessness throughout our footprint. With the generous support of our employees and customers, we more than surpassed our goal, making a real difference in the lives of people in need across all the communities we serve."
Conference Call Information
Columbia's management will discuss the fourth quarter 2015 results on a conference call scheduled for Thursday, January 28, 2016 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 #22782080.
A conference call replay will be available from approximately 4:00 p.m. PST on January 28, 2016 through 9:00 p.m. PST on February 4, 2016. The conference call replay can be accessed by dialing 1-855-859-2056 and entering Conference ID code #22782080.
Annual Meeting of Shareholders
Columbia Banking System's Annual Meeting of Shareholders will be held at 1:00 PDT on Wednesday, April 27, 2016 at the Greater Tacoma Convention and Trade Center, 1500 Broadway, Tacoma, Washington 98402. Directions and parking are available at http://gtctc.org/parking-directions.
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 ninth consecutive year, the bank was named in 2015 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.
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 |
FINANCIAL STATISTICS |
||||||||||||||||
Columbia Banking System, Inc. |
Three Months Ended |
Twelve Months Ended | ||||||||||||||
Unaudited |
December 31, |
December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | |||||||||||||
Earnings |
(dollars in thousands except per share amounts) | |||||||||||||||
Net interest income |
$ |
81,819 |
$ |
78,764 |
$ |
324,887 |
$ |
304,048 |
||||||||
Provision for loan and lease losses |
$ |
2,349 |
$ |
1,708 |
$ |
8,591 |
$ |
6,727 |
||||||||
Noninterest income |
$ |
24,745 |
$ |
15,185 |
$ |
91,473 |
$ |
59,750 |
||||||||
Noninterest expense |
$ |
66,877 |
$ |
64,154 |
$ |
266,149 |
$ |
239,286 |
||||||||
Acquisition-related expense (included in noninterest expense) |
$ |
1,872 |
$ |
4,556 |
$ |
10,917 |
$ |
9,432 |
||||||||
Net income |
$ |
26,740 |
$ |
18,920 |
$ |
98,827 |
$ |
81,574 |
||||||||
Per Common Share |
||||||||||||||||
Earnings (basic) |
$ |
0.46 |
$ |
0.34 |
$ |
1.71 |
$ |
1.53 |
||||||||
Earnings (diluted) |
$ |
0.46 |
$ |
0.34 |
$ |
1.71 |
$ |
1.52 |
||||||||
Book value |
$ |
21.48 |
$ |
21.34 |
$ |
21.48 |
$ |
21.34 |
||||||||
Averages |
||||||||||||||||
Total assets |
$ |
8,905,743 |
$ |
8,152,463 |
$ |
8,655,243 |
$ |
7,468,091 |
||||||||
Interest-earning assets |
$ |
7,937,308 |
$ |
7,199,443 |
$ |
7,685,734 |
$ |
6,561,047 |
||||||||
Loans |
$ |
5,762,048 |
$ |
5,168,761 |
$ |
5,609,261 |
$ |
4,782,369 |
||||||||
Securities, including Federal Home Loan Bank stock |
$ |
2,136,703 |
$ |
1,918,690 |
$ |
2,031,859 |
$ |
1,708,575 |
||||||||
Deposits |
$ |
7,440,628 |
$ |
6,759,259 |
$ |
7,146,828 |
$ |
6,187,342 |
||||||||
Interest-bearing deposits |
$ |
3,933,001 |
$ |
4,174,459 |
$ |
3,937,881 |
$ |
3,901,524 |
||||||||
Interest-bearing liabilities |
$ |
4,031,214 |
$ |
4,282,273 |
$ |
4,097,483 |
$ |
3,986,017 |
||||||||
Noninterest-bearing deposits |
$ |
3,507,627 |
$ |
2,584,800 |
$ |
3,208,947 |
$ |
2,285,818 |
||||||||
Shareholders' equity |
$ |
1,259,117 |
$ |
1,185,346 |
$ |
1,246,952 |
$ |
1,109,581 |
||||||||
Financial Ratios |
||||||||||||||||
Return on average assets |
1.20 |
% |
0.93 |
% |
1.14 |
% |
1.09 |
% | ||||||||
Return on average common equity |
8.50 |
% |
6.39 |
% |
7.93 |
% |
7.36 |
% | ||||||||
Average equity to average assets |
14.14 |
% |
14.54 |
% |
14.41 |
% |
14.86 |
% | ||||||||
Net interest margin (tax equivalent) |
4.25 |
% |
4.50 |
% |
4.35 |
% |
4.76 |
% | ||||||||
Efficiency ratio (tax equivalent) (1) |
60.99 |
% |
66.30 |
% |
62.12 |
% |
63.97 |
% | ||||||||
Operating efficiency ratio (tax equivalent) (2) |
60.53 |
% |
60.82 |
% |
60.78 |
% |
63.33 |
% | ||||||||
December 31, |
||||||||||||||||
Period end |
2015 |
2014 |
||||||||||||||
Total assets |
$ |
8,954,382 |
$ |
8,578,846 |
||||||||||||
Loans, net of unearned income |
$ |
5,815,027 |
$ |
5,445,378 |
||||||||||||
Allowance for loan and lease losses |
$ |
68,172 |
$ |
69,569 |
||||||||||||
Securities, including Federal Home Loan Bank stock |
$ |
2,170,416 |
$ |
2,131,622 |
||||||||||||
Deposits |
$ |
7,438,829 |
$ |
6,924,722 |
||||||||||||
Core deposits |
$ |
7,127,866 |
$ |
6,619,944 |
||||||||||||
Shareholders' equity |
$ |
1,242,128 |
$ |
1,228,175 |
||||||||||||
Nonperforming assets |
||||||||||||||||
Nonaccrual loans |
$ |
21,464 |
$ |
31,352 |
||||||||||||
Other real estate owned ("OREO") and other personal property owned ("OPPO") |
13,738 |
22,225 |
||||||||||||||
Total nonperforming assets |
$ |
35,202 |
$ |
53,577 |
||||||||||||
Nonperforming loans to period-end loans |
0.37 |
% |
0.58 |
% |
||||||||||||
Nonperforming assets to period-end assets |
0.39 |
% |
0.62 |
% |
||||||||||||
Allowance for loan and lease losses to period-end loans |
1.17 |
% |
1.28 |
% |
||||||||||||
Net loan charge-offs |
$ |
9,988 |
(3) |
$ |
9,612 |
(4) |
||||||||||
(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 twelve months ended December 31, 2015. |
||||||||||||||||
(4) For the twelve months ended December 31, 2014. |
FINANCIAL STATISTICS |
||||||||||||||
Columbia Banking System, Inc. |
||||||||||||||
Unaudited |
December 31, |
December 31, | ||||||||||||
2015 |
2014 | |||||||||||||
Loan Portfolio Composition |
(dollars in thousands) | |||||||||||||
Commercial business |
$ |
2,362,575 |
40.6 |
% |
$ |
2,119,565 |
38.9 |
% | ||||||
Real estate: |
||||||||||||||
One-to-four family residential |
176,295 |
3.0 |
% |
175,571 |
3.2 |
% | ||||||||
Commercial and multifamily residential |
2,491,736 |
42.9 |
% |
2,363,541 |
43.5 |
% | ||||||||
Total real estate |
2,668,031 |
45.9 |
% |
2,539,112 |
46.7 |
% | ||||||||
Real estate construction: |
||||||||||||||
One-to-four family residential |
135,874 |
2.3 |
% |
116,866 |
2.1 |
% | ||||||||
Commercial and multifamily residential |
167,413 |
2.9 |
% |
134,443 |
2.5 |
% | ||||||||
Total real estate construction |
303,287 |
5.2 |
% |
251,309 |
4.6 |
% | ||||||||
Consumer |
342,601 |
5.9 |
% |
364,182 |
6.7 |
% | ||||||||
Purchased credit impaired |
180,906 |
3.1 |
% |
230,584 |
4.2 |
% | ||||||||
Subtotal loans |
5,857,400 |
100.7 |
% |
5,504,752 |
101.1 |
% | ||||||||
Less: Net unearned income |
(42,373) |
(0.7) |
% |
(59,374) |
(1.1) |
% | ||||||||
Loans, net of unearned income |
5,815,027 |
100.0 |
% |
5,445,378 |
100.0 |
% | ||||||||
Less: Allowance for loan and lease losses |
(68,172) |
(69,569) |
||||||||||||
Total loans, net |
5,746,855 |
5,375,809 |
||||||||||||
Loans held for sale |
$ |
4,509 |
$ |
1,116 |
||||||||||
December 31, |
December 31, | |||||||||||||
2015 |
2014 | |||||||||||||
Deposit Composition |
(dollars in thousands) | |||||||||||||
Core deposits: |
||||||||||||||
Demand and other non-interest bearing |
$ |
3,507,358 |
47.2 |
% |
$ |
2,651,373 |
38.3 |
% | ||||||
Interest bearing demand |
925,909 |
12.4 |
% |
1,304,258 |
18.8 |
% | ||||||||
Money market |
1,788,552 |
24.0 |
% |
1,760,331 |
25.4 |
% | ||||||||
Savings |
657,016 |
8.8 |
% |
615,721 |
8.9 |
% | ||||||||
Certificates of deposit less than $100,000 |
249,031 |
3.3 |
% |
288,261 |
4.2 |
% | ||||||||
Total core deposits |
7,127,866 |
95.7 |
% |
6,619,944 |
95.6 |
% | ||||||||
Certificates of deposit greater than $100,000 |
182,973 |
2.5 |
% |
202,014 |
2.9 |
% | ||||||||
Certificates of deposit insured by CDARS® |
26,901 |
0.4 |
% |
18,429 |
0.3 |
% | ||||||||
Brokered money market accounts |
100,854 |
1.4 |
% |
83,402 |
1.2 |
% | ||||||||
Subtotal |
7,438,594 |
100.0 |
% |
6,923,789 |
100.0 |
% | ||||||||
Premium resulting from acquisition date fair value adjustment |
235 |
933 |
||||||||||||
Total deposits |
$ |
7,438,829 |
$ |
6,924,722 |
QUARTERLY FINANCIAL STATISTICS |
||||||||||||||||||||
Columbia Banking System, Inc. |
Three Months Ended | |||||||||||||||||||
Unaudited |
December 31, |
September 30, |
June 30, |
March 31, |
December 31, | |||||||||||||||
2015 |
2015 |
2015 |
2015 |
2014 | ||||||||||||||||
(dollars in thousands except per share) | ||||||||||||||||||||
Earnings |
||||||||||||||||||||
Net interest income |
$ |
81,819 |
$ |
81,694 |
$ |
81,010 |
$ |
80,364 |
$ |
78,764 |
||||||||||
Provision for loan and lease losses |
$ |
2,349 |
$ |
2,831 |
$ |
2,202 |
$ |
1,209 |
$ |
1,708 |
||||||||||
Noninterest income |
$ |
24,745 |
$ |
22,499 |
$ |
21,462 |
$ |
22,767 |
$ |
15,185 |
||||||||||
Noninterest expense |
$ |
66,877 |
$ |
64,067 |
$ |
68,471 |
$ |
66,734 |
$ |
64,154 |
||||||||||
Acquisition-related expense (included in noninterest expense) |
$ |
1,872 |
$ |
428 |
$ |
5,643 |
$ |
2,974 |
$ |
4,556 |
||||||||||
Net income |
$ |
26,740 |
$ |
25,780 |
$ |
21,946 |
$ |
24,361 |
$ |
18,920 |
||||||||||
Per Common Share |
||||||||||||||||||||
Earnings (basic) |
$ |
0.46 |
$ |
0.45 |
$ |
0.38 |
$ |
0.42 |
$ |
0.34 |
||||||||||
Earnings (diluted) |
$ |
0.46 |
$ |
0.45 |
$ |
0.38 |
$ |
0.42 |
$ |
0.34 |
||||||||||
Book value |
$ |
21.48 |
$ |
21.69 |
$ |
21.38 |
$ |
21.53 |
$ |
21.34 |
||||||||||
Averages |
||||||||||||||||||||
Total assets |
$ |
8,905,743 |
$ |
8,672,692 |
$ |
8,532,173 |
$ |
8,505,776 |
$ |
8,152,463 |
||||||||||
Interest-earning assets |
$ |
7,937,308 |
$ |
7,711,531 |
$ |
7,560,288 |
$ |
7,529,040 |
$ |
7,199,443 |
||||||||||
Loans |
$ |
5,762,048 |
$ |
5,712,614 |
$ |
5,542,489 |
$ |
5,414,942 |
$ |
5,168,761 |
||||||||||
Securities, including Federal Home Loan Bank stock |
$ |
2,136,703 |
$ |
1,945,174 |
$ |
1,976,959 |
$ |
2,068,806 |
$ |
1,918,690 |
||||||||||
Deposits |
$ |
7,440,628 |
$ |
7,233,863 |
$ |
6,978,472 |
$ |
6,927,756 |
$ |
6,759,259 |
||||||||||
Interest-bearing deposits |
$ |
3,933,001 |
$ |
3,910,695 |
$ |
3,753,101 |
$ |
4,157,491 |
$ |
4,174,459 |
||||||||||
Interest-bearing liabilities |
$ |
4,031,214 |
$ |
4,007,198 |
$ |
3,961,013 |
$ |
4,395,502 |
$ |
4,282,273 |
||||||||||
Noninterest-bearing deposits |
$ |
3,507,627 |
$ |
3,323,168 |
$ |
3,225,371 |
$ |
2,770,265 |
$ |
2,584,800 |
||||||||||
Shareholders' equity |
$ |
1,259,117 |
$ |
1,239,830 |
$ |
1,247,887 |
$ |
1,240,853 |
$ |
1,185,346 |
||||||||||
Financial Ratios |
||||||||||||||||||||
Return on average assets |
1.20 |
% |
1.19 |
% |
1.03 |
% |
1.15 |
% |
0.93 |
% | ||||||||||
Return on average common equity |
8.50 |
% |
8.32 |
% |
7.04 |
% |
7.86 |
% |
6.39 |
% | ||||||||||
Average equity to average assets |
14.14 |
% |
14.30 |
% |
14.63 |
% |
14.59 |
% |
14.54 |
% | ||||||||||
Net interest margin (tax equivalent) |
4.25 |
% |
4.37 |
% |
4.41 |
% |
4.39 |
% |
4.50 |
% | ||||||||||
Period end |
||||||||||||||||||||
Total assets |
$ |
8,954,382 |
$ |
8,755,984 |
$ |
8,518,019 |
$ |
8,552,902 |
$ |
8,578,846 |
||||||||||
Loans, net of unearned income |
$ |
5,815,027 |
$ |
5,746,511 |
$ |
5,611,897 |
$ |
5,450,895 |
$ |
5,445,378 |
||||||||||
Allowance for loan and lease losses |
$ |
68,172 |
$ |
69,049 |
$ |
69,257 |
$ |
70,234 |
$ |
69,569 |
||||||||||
Securities, including Federal Home Loan Bank stock |
$ |
2,170,416 |
$ |
2,037,666 |
$ |
1,926,248 |
$ |
2,040,163 |
$ |
2,131,622 |
||||||||||
Deposits |
$ |
7,438,829 |
$ |
7,314,805 |
$ |
7,044,373 |
$ |
7,074,965 |
$ |
6,924,722 |
||||||||||
Core deposits |
$ |
7,127,866 |
$ |
6,986,206 |
$ |
6,737,969 |
$ |
6,771,755 |
$ |
6,619,944 |
||||||||||
Shareholders' equity |
$ |
1,242,128 |
$ |
1,254,136 |
$ |
1,236,214 |
$ |
1,244,443 |
$ |
1,228,175 |
||||||||||
Nonperforming, assets |
||||||||||||||||||||
Nonaccrual loans |
$ |
21,464 |
$ |
19,080 |
$ |
25,746 |
$ |
31,828 |
$ |
31,352 |
||||||||||
OREO and OPPO |
13,738 |
19,475 |
20,665 |
23,347 |
22,225 |
|||||||||||||||
Total nonperforming assets |
$ |
35,202 |
$ |
38,555 |
$ |
46,411 |
$ |
55,175 |
$ |
53,577 |
||||||||||
Nonperforming loans to period-end loans |
0.37 |
% |
0.33 |
% |
0.46 |
% |
0.58 |
% |
0.58 |
% | ||||||||||
Nonperforming assets to period-end assets |
0.39 |
% |
0.44 |
% |
0.54 |
% |
0.65 |
% |
0.62 |
% | ||||||||||
Allowance for loan and lease losses to period-end loans |
1.17 |
% |
1.20 |
% |
1.23 |
% |
1.29 |
% |
1.28 |
% | ||||||||||
Net loan charge-offs |
$ |
3,226 |
$ |
3,039 |
$ |
3,179 |
$ |
544 |
$ |
10 |
CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||||||
Columbia Banking System, Inc. |
Three Months Ended |
Twelve Months Ended | ||||||||||||||
Unaudited |
December 31, |
December 31, | ||||||||||||||
2015 |
2014 |
2015 |
2014 | |||||||||||||
(in thousands except per share) | ||||||||||||||||
Interest Income |
||||||||||||||||
Loans |
$ |
71,358 |
$ |
69,831 |
$ |
286,166 |
$ |
268,279 |
||||||||
Taxable securities |
8,516 |
7,075 |
30,774 |
28,754 |
||||||||||||
Tax-exempt securities |
2,870 |
2,917 |
11,842 |
10,830 |
||||||||||||
Deposits in banks |
25 |
74 |
109 |
179 |
||||||||||||
Total interest income |
82,769 |
79,897 |
328,891 |
308,042 |
||||||||||||
Interest Expense |
||||||||||||||||
Deposits |
733 |
811 |
2,977 |
3,005 |
||||||||||||
Federal Home Loan Bank advances |
83 |
87 |
474 |
396 |
||||||||||||
Other borrowings |
134 |
235 |
553 |
593 |
||||||||||||
Total interest expense |
950 |
1,133 |
4,004 |
3,994 |
||||||||||||
Net Interest Income |
81,819 |
78,764 |
324,887 |
304,048 |
||||||||||||
Provision for loan and lease losses |
2,349 |
1,708 |
8,591 |
6,727 |
||||||||||||
Net interest income after provision for loan and lease losses |
79,470 |
77,056 |
316,296 |
297,321 |
||||||||||||
Noninterest Income |
||||||||||||||||
Service charges and other fees |
15,245 |
14,575 |
61,881 |
55,555 |
||||||||||||
Merchant services fees |
2,173 |
1,961 |
8,975 |
7,975 |
||||||||||||
Investment securities gains, net |
281 |
— |
1,581 |
552 |
||||||||||||
Bank owned life insurance |
1,071 |
926 |
4,441 |
3,823 |
||||||||||||
Change in FDIC loss-sharing asset |
(1,031) |
(5,304) |
(4,010) |
(19,989) |
||||||||||||
Other |
7,006 |
3,027 |
18,605 |
11,834 |
||||||||||||
Total noninterest income |
24,745 |
15,185 |
91,473 |
59,750 |
||||||||||||
Noninterest Expense |
||||||||||||||||
Compensation and employee benefits |
36,689 |
35,903 |
149,410 |
130,864 |
||||||||||||
Occupancy |
10,037 |
8,024 |
34,818 |
32,300 |
||||||||||||
Merchant processing |
1,058 |
948 |
4,204 |
4,006 |
||||||||||||
Advertising and promotion |
1,233 |
1,218 |
4,713 |
3,964 |
||||||||||||
Data processing |
4,399 |
3,900 |
17,421 |
15,369 |
||||||||||||
Legal and professional fees |
2,081 |
4,012 |
9,608 |
11,389 |
||||||||||||
Taxes, licenses and fees |
1,392 |
1,165 |
5,395 |
4,552 |
||||||||||||
Regulatory premiums |
1,180 |
1,105 |
4,806 |
4,549 |
||||||||||||
Net cost (benefit) of operation of other real estate owned |
(60) |
162 |
(1,629) |
(1,045) |
||||||||||||
Amortization of intangibles |
1,652 |
1,777 |
6,882 |
6,293 |
||||||||||||
Other |
7,216 |
5,940 |
30,521 |
27,045 |
||||||||||||
Total noninterest expense |
66,877 |
64,154 |
266,149 |
239,286 |
||||||||||||
Income before income taxes |
37,338 |
28,087 |
141,620 |
117,785 |
||||||||||||
Provision for income taxes |
10,598 |
9,167 |
42,793 |
36,211 |
||||||||||||
Net Income |
$ |
26,740 |
$ |
18,920 |
$ |
98,827 |
$ |
81,574 |
||||||||
Earnings per common share |
||||||||||||||||
Basic |
$ |
0.46 |
$ |
0.34 |
$ |
1.71 |
$ |
1.53 |
||||||||
Diluted |
$ |
0.46 |
$ |
0.34 |
$ |
1.71 |
$ |
1.52 |
||||||||
Dividends paid per common share |
$ |
0.36 |
$ |
0.30 |
$ |
1.34 |
$ |
0.94 |
||||||||
Weighted average number of common shares outstanding |
57,057 |
55,137 |
57,019 |
52,618 |
||||||||||||
Weighted average number of diluted common shares outstanding |
57,070 |
55,272 |
57,032 |
53,183 |
CONSOLIDATED BALANCE SHEETS |
|||||||||||||
Columbia Banking System, Inc. |
|||||||||||||
Unaudited |
December 31, |
December 31, | |||||||||||
2015 |
2014 | ||||||||||||
(in thousands) | |||||||||||||
ASSETS |
|||||||||||||
Cash and due from banks |
$ |
166,929 |
$ |
171,221 |
|||||||||
Interest-earning deposits with banks |
8,373 |
16,949 |
|||||||||||
Total cash and cash equivalents |
175,302 |
188,170 |
|||||||||||
Securities available for sale at fair value (amortized cost of $2,157,610 and $2,087,069, respectively) |
2,157,694 |
2,098,257 |
|||||||||||
Federal Home Loan Bank stock at cost |
12,722 |
33,365 |
|||||||||||
Loans held for sale |
4,509 |
1,116 |
|||||||||||
Loans, net of unearned income of ($42,373) and ($59,374), respectively |
5,815,027 |
5,445,378 |
|||||||||||
Less: allowance for loan and lease losses |
68,172 |
69,569 |
|||||||||||
Loans, net |
5,746,855 |
5,375,809 |
|||||||||||
FDIC loss-sharing asset |
6,568 |
15,174 |
|||||||||||
Interest receivable |
27,877 |
27,802 |
|||||||||||
Premises and equipment, net |
164,239 |
172,090 |
|||||||||||
Other real estate owned |
13,738 |
22,190 |
|||||||||||
Goodwill |
382,762 |
382,537 |
|||||||||||
Other intangible assets, net |
23,577 |
30,459 |
|||||||||||
Other assets |
238,539 |
231,877 |
|||||||||||
Total assets |
$ |
8,954,382 |
$ |
8,578,846 |
|||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||||||||
Deposits: |
|||||||||||||
Noninterest-bearing |
$ |
3,507,358 |
$ |
2,651,373 |
|||||||||
Interest-bearing |
3,931,471 |
4,273,349 |
|||||||||||
Total deposits |
7,438,829 |
6,924,722 |
|||||||||||
Federal Home Loan Bank advances |
68,531 |
216,568 |
|||||||||||
Securities sold under agreements to repurchase |
99,699 |
105,080 |
|||||||||||
Other borrowings |
— |
8,248 |
|||||||||||
Other liabilities |
105,195 |
96,053 |
|||||||||||
Total liabilities |
7,712,254 |
7,350,671 |
|||||||||||
Commitments and contingent liabilities |
|||||||||||||
December 31, |
December 31, |
||||||||||||
2015 |
2014 |
||||||||||||
Preferred stock (no par value) |
(in thousands) |
||||||||||||
Authorized shares |
2,000 |
2,000 |
|||||||||||
Issued and outstanding |
9 |
9 |
2,217 |
2,217 |
|||||||||
Common stock (no par value) |
|||||||||||||
Authorized shares |
115,000 |
63,033 |
|||||||||||
Issued and outstanding |
57,724 |
57,437 |
990,281 |
985,839 |
|||||||||
Retained earnings |
255,925 |
234,498 |
|||||||||||
Accumulated other comprehensive income (loss) |
(6,295) |
5,621 |
|||||||||||
Total shareholders' equity |
1,242,128 |
1,228,175 |
|||||||||||
Total liabilities and shareholders' equity |
$ |
8,954,382 |
$ |
8,578,846 |
AVERAGE BALANCES AND RATES |
||||||||||||||||||||||
Columbia Banking System, Inc. |
||||||||||||||||||||||
Unaudited |
||||||||||||||||||||||
Three Months Ended December 31, |
Three Months Ended December 31, | |||||||||||||||||||||
2015 |
2014 | |||||||||||||||||||||
Average |
Interest |
Average |
Average |
Interest |
Average | |||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||
Loans, net (1)(2) |
$ |
5,762,048 |
$ |
72,322 |
5.02 |
% |
$ |
5,168,761 |
$ |
70,463 |
5.45 |
% | ||||||||||
Taxable securities |
1,686,594 |
8,516 |
2.02 |
% |
1,491,931 |
7,075 |
1.90 |
% | ||||||||||||||
Tax exempt securities (2) |
450,109 |
4,417 |
3.93 |
% |
426,759 |
4,577 |
4.29 |
% | ||||||||||||||
Interest-earning deposits with banks |
38,557 |
25 |
0.26 |
% |
111,992 |
74 |
0.26 |
% | ||||||||||||||
Total interest-earning assets |
7,937,308 |
$ |
85,280 |
4.30 |
% |
7,199,443 |
$ |
82,189 |
4.57 |
% | ||||||||||||
Other earning assets |
153,298 |
140,135 |
||||||||||||||||||||
Noninterest-earning assets |
815,137 |
812,885 |
||||||||||||||||||||
Total assets |
$ |
8,905,743 |
$ |
8,152,463 |
||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||
Certificates of deposit |
$ |
460,858 |
$ |
179 |
0.16 |
% |
$ |
497,704 |
$ |
284 |
0.23 |
% | ||||||||||
Savings accounts |
653,738 |
17 |
0.01 |
% |
591,137 |
18 |
0.01 |
% | ||||||||||||||
Interest-bearing demand |
920,021 |
161 |
0.07 |
% |
1,260,231 |
138 |
0.04 |
% | ||||||||||||||
Money market accounts |
1,898,384 |
376 |
0.08 |
% |
1,825,387 |
371 |
0.08 |
% | ||||||||||||||
Total interest-bearing deposits |
3,933,001 |
733 |
0.07 |
% |
4,174,459 |
811 |
0.08 |
% | ||||||||||||||
Federal Home Loan Bank advances |
18,915 |
83 |
1.76 |
% |
24,823 |
87 |
1.40 |
% | ||||||||||||||
Other borrowings |
79,298 |
134 |
0.68 |
% |
82,991 |
235 |
1.13 |
% | ||||||||||||||
Total interest-bearing liabilities |
4,031,214 |
$ |
950 |
0.09 |
% |
4,282,273 |
$ |
1,133 |
0.11 |
% | ||||||||||||
Noninterest-bearing deposits |
3,507,627 |
2,584,800 |
||||||||||||||||||||
Other noninterest-bearing liabilities |
107,785 |
100,044 |
||||||||||||||||||||
Shareholders' equity |
1,259,117 |
1,185,346 |
||||||||||||||||||||
Total liabilities & shareholders' equity |
$ |
8,905,743 |
$ |
8,152,463 |
||||||||||||||||||
Net interest income (tax equivalent) |
$ |
84,330 |
$ |
81,056 |
||||||||||||||||||
Net interest margin (tax equivalent) |
4.25 |
% |
4.50 |
% |
(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 $1.1 million for the three months ended December 31, 2015 and $1.2 million for the three months ended December 31, 2014. The incremental accretion on acquired loans was $6.0 million and $8.8 million for the three months ended December 31, 2015 and 2014, respectively. |
(2) |
Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $964 thousand and $632 thousand for the three months ended December 31, 2015 and 2014, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.5 million and $1.7 million for the three months ended December 31, 2015 and 2014, respectively. |
AVERAGE BALANCES AND RATES |
||||||||||||||||||||||
Columbia Banking System, Inc. | ||||||||||||||||||||||
Unaudited |
||||||||||||||||||||||
Twelve Months Ended December 31, |
Twelve Months Ended December 31, | |||||||||||||||||||||
2015 |
2014 | |||||||||||||||||||||
Average |
Interest |
Average |
Average |
Interest |
Average | |||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||
Loans, net (1)(3) |
$ |
5,609,261 |
$ |
289,450 |
5.16 |
% |
$ |
4,782,369 |
$ |
270,210 |
5.65 |
% | ||||||||||
Taxable securities (2) |
1,577,711 |
30,774 |
1.95 |
% |
1,332,144 |
28,754 |
2.16 |
% | ||||||||||||||
Tax exempt securities (3) |
454,148 |
18,219 |
4.01 |
% |
376,431 |
16,997 |
4.52 |
% | ||||||||||||||
Interest-earning deposits with banks |
44,614 |
109 |
0.24 |
% |
70,103 |
179 |
0.26 |
% | ||||||||||||||
Total interest-earning assets |
7,685,734 |
$ |
338,552 |
4.40 |
% |
6,561,047 |
$ |
316,140 |
4.82 |
% | ||||||||||||
Other earning assets |
149,476 |
132,419 |
||||||||||||||||||||
Noninterest-earning assets |
820,033 |
774,625 |
||||||||||||||||||||
Total assets |
$ |
8,655,243 |
$ |
7,468,091 |
||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||
Certificates of deposit |
$ |
483,193 |
$ |
868 |
0.18 |
% |
$ |
485,487 |
$ |
1,259 |
0.26 |
% | ||||||||||
Savings accounts |
637,464 |
70 |
0.01 |
% |
543,303 |
60 |
0.01 |
% | ||||||||||||||
Interest-bearing demand |
982,491 |
612 |
0.06 |
% |
1,204,584 |
478 |
0.04 |
% | ||||||||||||||
Money market accounts |
1,834,733 |
1,427 |
0.08 |
% |
1,668,150 |
1,208 |
0.07 |
% | ||||||||||||||
Total interest-bearing deposits |
3,937,881 |
2,977 |
0.08 |
% |
3,901,524 |
3,005 |
0.08 |
% | ||||||||||||||
Federal Home Loan Bank advances |
70,678 |
474 |
0.67 |
% |
44,876 |
396 |
0.88 |
% | ||||||||||||||
Other borrowings |
88,924 |
553 |
0.62 |
% |
39,617 |
593 |
1.50 |
% | ||||||||||||||
Total interest-bearing liabilities |
4,097,483 |
$ |
4,004 |
0.10 |
% |
3,986,017 |
$ |
3,994 |
0.10 |
% | ||||||||||||
Noninterest-bearing deposits |
3,208,947 |
2,285,818 |
||||||||||||||||||||
Other noninterest-bearing liabilities |
101,861 |
86,675 |
||||||||||||||||||||
Shareholders' equity |
1,246,952 |
1,109,581 |
||||||||||||||||||||
Total liabilities & shareholders' equity |
$ |
8,655,243 |
$ |
7,468,091 |
||||||||||||||||||
Net interest income (tax equivalent) |
$ |
334,548 |
$ |
312,146 |
||||||||||||||||||
Net interest margin (tax equivalent) |
4.35 |
% |
4.76 |
% |
(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 $4.9 million and $4.5 million for the twelve months ended December 31, 2015 and 2014, respectively. The incremental accretion on acquired loans was $27.2 million and $41.8 million for the twelve months ended December 31, 2015 and 2014, respectively. |
(2) |
During the twelve months ended December 31, 2014 the Company recorded a $2.6 million reversal of premium amortization, which increased interest income on taxable securities. |
(3) |
Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $3.3 million and $1.9 million for the twelve months ended December 31, 2015 and 2014, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $6.4 million and $6.2 million for the twelve months ended December 31, 2015 and 2014, 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. Also, there may be limits in the usefulness of these measures to investors. As a result, 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 December 31, |
Twelve Months Ended December 31, | |||||||||||||||
2015 |
2014 |
2015 |
2014 | |||||||||||||
Operating net interest margin non-GAAP reconciliation: |
(dollars in thousands) | |||||||||||||||
Net interest income (tax equivalent) (1) |
$ |
84,330 |
$ |
81,056 |
$ |
334,548 |
$ |
312,146 |
||||||||
Adjustments to arrive at operating net interest income (tax equivalent): |
||||||||||||||||
Incremental accretion income on FDIC purchased credit impaired loans |
(2,200) |
(3,796) |
(9,096) |
(20,224) |
||||||||||||
Incremental accretion income on other FDIC acquired loans |
(68) |
(10) |
(234) |
(484) |
||||||||||||
Incremental accretion income on other acquired loans |
(3,746) |
(4,957) |
(17,862) |
(21,093) |
||||||||||||
Premium amortization on acquired securities |
2,253 |
2,490 |
10,217 |
7,123 |
||||||||||||
Correction of immaterial error - securities premium amortization |
— |
— |
— |
(2,622) |
||||||||||||
Interest reversals on nonaccrual loans |
582 |
189 |
1,713 |
1,291 |
||||||||||||
Operating net interest income (tax equivalent) (1) |
$ |
81,151 |
$ |
74,972 |
$ |
319,286 |
$ |
276,137 |
||||||||
Average interest earning assets |
$ |
7,937,308 |
$ |
7,199,443 |
$ |
7,685,734 |
$ |
6,561,047 |
||||||||
Net interest margin (tax equivalent) (1) |
4.25 |
% |
4.50 |
% |
4.35 |
% |
4.76 |
% | ||||||||
Operating net interest margin (tax equivalent) (1) |
4.09 |
% |
4.17 |
% |
4.15 |
% |
4.21 |
% |
Three Months Ended December 31, |
Twelve Months Ended December 31, | |||||||||||||||
2015 |
2014 |
2015 |
2014 | |||||||||||||
Operating efficiency ratio non-GAAP reconciliation: |
(dollars in thousands) | |||||||||||||||
Noninterest expense (numerator A) |
$ |
66,877 |
$ |
64,154 |
$ |
266,149 |
$ |
239,286 |
||||||||
Adjustments to arrive at operating noninterest expense: |
||||||||||||||||
Acquisition-related expenses |
(1,872) |
(4,556) |
(10,917) |
(9,432) |
||||||||||||
Net benefit of operation of OREO and OPPO |
150 |
(160) |
1,724 |
1,182 |
||||||||||||
FDIC clawback liability expense |
(812) |
8 |
(979) |
(294) |
||||||||||||
Loss on asset disposals |
(52) |
(6) |
(433) |
(563) |
||||||||||||
State of Washington Business and Occupation ("B&O") taxes |
(1,294) |
(1,067) |
(4,962) |
(4,183) |
||||||||||||
Operating noninterest expense (numerator B) |
$ |
62,997 |
$ |
58,373 |
$ |
250,582 |
$ |
225,996 |
||||||||
Net interest income (tax equivalent) (1) |
$ |
84,330 |
$ |
81,056 |
$ |
334,548 |
$ |
312,146 |
||||||||
Noninterest income |
24,745 |
15,185 |
91,473 |
59,750 |
||||||||||||
Bank owned life insurance tax equivalent adjustment |
576 |
528 |
2,391 |
2,177 |
||||||||||||
Total revenue (tax equivalent) (denominator A) |
$ |
109,651 |
$ |
96,769 |
$ |
428,412 |
$ |
374,073 |
||||||||
Operating net interest income (tax equivalent) (1) |
$ |
81,151 |
$ |
74,972 |
$ |
319,286 |
$ |
276,137 |
||||||||
Adjustments to arrive at operating noninterest income (tax equivalent): |
||||||||||||||||
Investment securities gains, net |
(281) |
— |
(1,581) |
(552) |
||||||||||||
Gain on asset disposals |
(4) |
(8) |
(129) |
(86) |
||||||||||||
Gain related to branch sale deposit premium |
— |
— |
— |
(565) |
||||||||||||
Mortgage loan repurchase liability adjustment |
(3,147) |
— |
(3,147) |
— |
||||||||||||
Change in FDIC loss-sharing asset |
1,031 |
5,304 |
4,010 |
19,989 |
||||||||||||
Operating noninterest income (tax equivalent) |
22,920 |
21,009 |
93,017 |
80,713 |
||||||||||||
Total operating revenue (tax equivalent) (denominator B) |
$ |
104,071 |
$ |
95,981 |
$ |
412,303 |
$ |
356,850 |
||||||||
Efficiency ratio (tax equivalent) (numerator A/denominator A) |
60.99 |
% |
66.30 |
% |
62.12 |
% |
63.97 |
% | ||||||||
Operating efficiency ratio (tax equivalent) (numerator B/denominator B) |
60.53 |
% |
60.82 |
% |
60.78 |
% |
63.33 |
% |
__________ | |
(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 $2.5 million and $2.3 million for the three months ended December 31, 2015 and 2014, respectively, and an addition to net interest income of $9.7 million and $8.1 million for the twelve months ended December 31, 2015 and 2014, respectively. |
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SOURCE Columbia Banking System, Inc.
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