Columbia Banking System Announces First Quarter 2021 Results and Quarterly Cash Dividend

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TACOMA, Wash., April 29, 2021 /PRNewswire/ --

Columbia Banking System Logo. (PRNewsFoto/Columbia Banking System, Inc.)
Columbia Banking System Logo. (PRNewsFoto/Columbia Banking System, Inc.)

Notable Items for First Quarter 2021

  • Quarterly net income of $51.9 million and diluted earnings per share of $0.73

  • Net loans increased $248.7 million, or 3%, during the first quarter of 2021

  • Deposits increased $897.6 million, or 6%, during the first quarter of 2021

  • Net interest margin of 3.31%, a decrease of 21 basis points from the linked quarter

  • Nonperforming assets to period-end assets ratio decreased to 0.20%

  • Loan balances subject to deferral were down 51% from December 31, 2020

  • Regular cash dividend declared of $0.28 per share

Clint Stein, President and Chief Executive Officer of Columbia Banking System, Inc. and Columbia Bank (NASDAQ: COLB) ("Columbia"), said today upon the release of Columbia's first quarter 2021 earnings, "The momentum gained by our bankers at the end of 2020 accelerated during the quarter, resulting in record first-quarter, non-PPP loan production, exceptional deposit inflows, and record performance for the financial services group. Creating this momentum was intentional. Throughout the pandemic we remained forward-looking and focused on keeping our operations open safely while supporting the unique needs of both existing and new clients."

Mr. Stein continued, "I cannot be more proud of our team's efforts. Every one of our employees has helped our clients and communities weather the difficulties of an unprecedented year. During the quarter, we handled a higher number of PPP loan applications in the second round than we did in the first round, supporting existing and gaining new clients, and we handled the forgiveness process for first round PPP clients. Those not directly involved in the PPP program focused on growing our business. As the pandemic eases and communities fully reopen, we are well-positioned to take advantage of new opportunities."


Balance Sheet

Total assets at March 31, 2021 were $17.34 billion, an increase of $750.3 million from the linked quarter. Loans were $9.68 billion, up $248.7 million from December 31, 2020 as loan originations of $894.6 million were partially offset by loan payments and a decrease in loan utilization. Total Paycheck Protection Program ("PPP") loans increased from $651.6 million at December 31, 2020 to $894.1 million at March 31, 2021, which includes $399.3 million from the first round of PPP loans from 2020 and $494.8 million from the more recent round of PPP loans in 2021. Interest-earning deposits with banks were $706.4 million, an increase of $271.5 million from the linked quarter. Debt securities available for sale were $5.50 billion at March 31, 2021, an increase of $286.2 million from $5.21 billion at December 31, 2020 as a result of purchases during the quarter partially offset by principal pay downs and a decline in unrealized gains. Total deposits at March 31, 2021 were $14.77 billion, an increase of $897.6 million from December 31, 2020 largely due to an increase in demand and other noninterest-bearing deposits. The deposit mix remained fairly consistent from December 31, 2020 with 50% noninterest-bearing and 50% interest-bearing.

Income Statement

Net Interest Income

Net interest income for the first quarter of 2021 was $124.0 million, a decrease of $7.1 million from the linked quarter and an increase of $1.6 million from the prior-year period. The decrease from the linked quarter is primarily due to interest income from loans, which decreased mainly due to lower average rates. In addition, the linked quarter included a $1.7 million recovery of interest related to a nonaccrual loan that paid off during the fourth quarter of 2020. The increase in net interest income from the prior year period was primarily a result of a reduction in interest expense on Federal Home Loan Bank ("FHLB") advances and deposits, partially offset by a decline in interest income on loans. The decrease in interest expense was due to lower average balances of FHLB advances and lower rates on deposits. The decline in interest income from loans was mainly due to lower average rates. For additional information regarding net interest income, see the "Net Interest Margin" section and the "Average Balances and Rates" tables.

Provision for Credit Losses

The Bank recorded a net provision recovery for credit losses for the first quarter of 2021 of $800 thousand compared to a net provision recovery of $4.7 million for the linked quarter and a net provision of $41.5 million for the comparable quarter in 2020.

Andy McDonald, Columbia's Executive Vice President and Chief Credit Officer, commented, "Overall credit metrics for the quarter were relatively stable. There were no material changes in our nonaccruals or nonperforming assets or within the loan portfolio, and we saw a modest release from the provision stemming from the improving economic forecast. We are seeing positive signs that the economy is recovering from the pandemic, and our focus with our clients has shifted to their longer-term cash flow needs."

Noninterest Income

Noninterest income was $23.2 million for the first quarter of 2021, a decrease of $396 thousand from the linked quarter and an increase of $2.0 million from the first quarter of 2020. The decrease compared to the linked quarter was principally due to lower loan revenue. The increase in noninterest income during the first quarter of 2021 compared to the same quarter in 2020 was principally due to an increase in loan revenue partially offset by a decrease in deposit account and treasury management fees. The increase in loan revenue compared to the first quarter of 2020 was due to mortgage banking revenue, which increased $3.4 million due to higher loan volume and increased premium per loan on sold loans. The decrease in deposit account and treasury management fees was driven by a decrease in overdraft fees of $988 thousand compared to the same quarter in 2020 due to an overall decrease in the number of transactions amidst the pandemic as well as clients generally carrying higher cash balances in their deposit accounts.

Chris Merrywell, Columbia's Executive Vice President and Chief Operating Officer, stated, "Our bankers have been busy delivering products and services that our clients value as we exit the pandemic. Our approach of staying open while maintaining the health and safety of our clients and our employees during the past year has resulted in expanded relationships and solid fee income. Mortgage volumes and sale executions continued to be very strong during the quarter, and our investment professional teams' performance was the best in our history."

Noninterest Expense

Total noninterest expense for the first quarter of 2021 was $83.6 million, a decrease of $741 thousand compared to the fourth quarter of 2020, principally due to a decrease in compensation and employee benefits expense partially offset by an increase in data processing and software expense. The decrease in compensation and employee benefits expense was mostly attributable to labor costs related to the origination of PPP loans. These labor costs are capitalized and amortized as a reduction to interest income over the life of the loan. The increase in data processing and software expense was driven by additional data processing expense associated with PPP loans.

Compared to the first quarter of 2020, noninterest expense decreased $712 thousand, principally due to a decrease in compensation and employee benefits expense partially offset by increases in data processing and software expense and regulatory premiums. The decrease in compensation and employee benefits expense and the increase in data processing and software expense are due to the items described in the preceding paragraph. The increase in regulatory premiums was the result of the Bank utilizing a portion of its Small Bank Assessment Credit during the first quarter of 2020 to pay for Federal Deposit Insurance Corporation ("FDIC") deposit insurance premiums. The final portion of the credit was utilized during the second quarter of 2020.

The provision for unfunded loan commitments, a component of other noninterest expense, for the periods indicated are as follows:



Three Months Ended



March 31, 2021


December 31, 2020


March 31, 2020



(in thousands)

Provision (recapture) for unfunded loan commitments


$

1,500



$

(1,300)



$

1,000















Net Interest Margin

Columbia's net interest margin (tax equivalent) for the first quarter of 2021 was 3.31%, a decrease of 21 basis points and 69 basis points from the linked quarter and prior-year period, respectively. The decrease in the net interest margin (tax equivalent) compared to the linked quarter was due to a decrease in interest income from loans as result of the lower rate environment, as well as the linked quarter including additional interest income related to a nonaccrual loan that was paid off during the quarter. Notably, the average cost of total deposits for the quarter was 4 basis points, a decrease of 1 basis point from the fourth quarter of 2020. The decrease in the net interest margin (tax equivalent) compared to the prior-year period was driven by higher average interest-earning deposits with banks at an average rate of 10 basis points as well as lower rates on the loan and securities portfolios. For additional information regarding net interest margin, see the "Average Balances and Rates" tables.

Columbia's operating net interest margin (tax equivalent)1 was 3.30% for the first quarter of 2021, which decreased 21 basis points compared to the linked quarter and decreased 72 basis points compared to the prior-year period. The decrease in the operating net interest margin for the first quarter of 2021 compared to the linked quarter and the decrease compared to the prior-year period were due to the items noted in the preceding paragraph.

The following table highlights the yield on our PPP loans for the periods indicated:



Three Months Ended



March 31, 2021


December 31, 2020

Paycheck Protection Program loans


(dollars in thousands)

Interest income


$

9,097



$

9,218


Average balance


$

828,051



$

822,970


Yield


4.46

%


4.46

%

Aaron James Deer, Columbia's Executive Vice President and Chief Financial Officer, stated, "While we are very encouraged by the strengthening economic outlook and steepening yield curve, our net interest margin may remain under modest pressure over the near term with some volatility stemming from PPP forgiveness. Longer term, we expect the margin to stabilize and ultimately expand as the rate environment improves and earning asset growth shifts back toward loans."

Asset Quality

At March 31, 2021, nonperforming assets to total assets decreased to 0.20% compared to 0.21% at December 31, 2020. Total nonperforming assets decreased $1.3 million from the linked quarter, primarily due to a decrease in agriculture nonaccrual loans.

The following table sets forth information regarding nonaccrual loans and total nonperforming assets:



March 31, 2021


December 31, 2020



(in thousands)

Nonaccrual loans:





Commercial loans:





Commercial real estate


$

7,317



$

7,712


Commercial business


13,551



13,222


Agriculture


10,629



11,614


Construction


191



217


Consumer loans:





One-to-four family residential real estate


1,751



2,001


Other consumer


142



40


Total nonaccrual loans


33,581



34,806


OREO and other personal property owned


521



553


Total nonperforming assets


$

34,102



$

35,359


Nonperforming assets to total loans was 0.35% at March 31, 2021 compared to 0.37% at December 31, 2020.

The following table provides an analysis of the Company's allowance for credit losses:



Three Months Ended



March 31, 2021


December 31, 2020


March 31, 2020



(in thousands)

Beginning balance


$

149,140



$

156,968



$

83,968


Impact of adopting ASC 326






1,632


Charge-offs:







Commercial loans:







Commercial real estate




(1,318)



(101)


Commercial business


(3,339)



(2,106)



(1,684)


Agriculture




(432)



(4,726)


Consumer loans:







One-to-four family residential real estate




(58)



(10)


Other consumer


(127)



(167)



(268)


Total charge-offs


(3,466)



(4,081)



(6,789)


Recoveries:







Commercial loans:







Commercial real estate


36



39



14


Commercial business


3,214



643



860


Agriculture


12



103



41


Construction


46



21



442


Consumer loans:







One-to-four family residential real estate


51



78



282


Other consumer


61



69



124


Total recoveries


3,420



953



1,763


Net charge-offs


(46)



(3,128)



(5,026)


Provision (recapture) for credit losses


(800)



(4,700)



41,500


Ending balance


$

148,294



$

149,140



$

122,074


The allowance for credit losses to period-end loans was 1.53% at March 31, 2021 compared to 1.58% at December 31, 2020. Excluding PPP loans, the allowance for credit losses to period-end loans2 was 1.69% at March 31, 2021 compared to 1.70% at December 31, 2020.

Loan Deferrals

The following table shows the loan balances subject to deferral for the periods indicated:



March 31, 2021


December 31, 2020



(in thousands)

Loan balances subject to deferral


$

71,426



$

146,725











Organizational Update

COVID-19 Update

Columbia continues to adapt to evolving COVID-19 guidance from federal, state and local healthcare officials as the availability of vaccines increases throughout the Northwest. Throughout the quarter, we periodically updated team members on vaccination information, directing them to government and local resources for appointment instructions, efficacy and safety information. All social distancing, cleaning protocols and other safety measures taken by Columbia remain in place and the Bank's branch lobbies continue to serve clients in accordance with local guidance.

Cash Dividend Announcement

Columbia will pay a regular cash dividend of $0.28 per common share on May 26, 2021 to shareholders of record as of the close of business on May 12, 2021.

Conference Call Information

Columbia's management will discuss the first quarter 2021 financial results on a conference call scheduled for Thursday, April 29, 2021 at 10:00 a.m. Pacific Time (1:00 p.m. ET). Interested parties may join the live-streamed event by using the site:
https://edge.media-server.com/mmc/p/bqd4pgqe

The conference call can also be accessed on Thursday, April 29, 2021 at 10:00 a.m. Pacific Time (1:00 p.m. ET) by calling 833-301-1160; Conference ID password: 2249249.

A replay of the call will be accessible beginning Friday, April 30, 2021 using the link below:
https://edge.media-server.com/mmc/p/bqd4pgqe

About Columbia

Headquartered in Tacoma, Washington, Columbia Banking System, Inc. (NASDAQ: COLB) is the holding company of Columbia Bank, a Washington state-chartered full-service commercial bank with locations throughout Washington, Oregon and Idaho. The bank has been named one of Puget Sound Business Journal's "Washington's Best Workplaces," more than 10 times and was ranked #1 in Customer Satisfaction with Retail Banking in the Northwest region by J.D. Power3 in the 2020 U.S. Retail Banking Satisfaction Study. Columbia was named the #1 bank in the Northwest on the Forbes 2020 list of "America's Best Banks" marking nearly 10 consecutive years on the publication's list of top financial institutions.

More information about Columbia can be found on its website at www.columbiabank.com.

______________________________

1 Operating net interest margin (tax equivalent) is a non-GAAP financial measure. See the section titled "Non-GAAP Financial Measures" in this earnings release for the reconciliation of operating net interest margin (tax equivalent) to net interest margin.

2 Allowance for credit losses to period-end loans, excluding PPP is a non-GAAP financial measure. See the section titled "Non-GAAP Financial Measures" in this earnings release for the reconciliation of allowance for credit losses to period-end loans to allowance for credit losses to period-end loans, excluding PPP loans.

3 Columbia Bank received the highest score in the Northwest region of the J.D. Power 2020 U.S. Retail Banking Satisfaction Study of customer satisfaction with their own retail bank. Visit jdpower.com/awards.

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 as well as the potential effects of the COVID-19 pandemic on Columbia's business, operations, financial performance and prospects. 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 U.S. Securities and Exchange Commission's (the "SEC") 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:

  • national and global economic conditions could be less favorable than expected or could have a more direct and pronounced effect on us than expected and adversely affect our ability to continue internal growth and maintain the quality of our earning assets;

  • the markets where we operate and make loans could face challenges;

  • the risks presented by the economy, which could adversely affect credit quality, collateral values, including real estate collateral, investment values, liquidity and loan originations and loan portfolio delinquency rates;

  • the efficiencies and enhanced financial and operating performance we expect to realize from investments in personnel, acquisitions and infrastructure may not be realized;

  • interest rate changes could significantly reduce net interest income and negatively affect asset yields and funding sources;

  • the effect of the discontinuation or replacement of LIBOR;

  • results of operations following strategic expansion, including the impact of acquired loans on our earnings, could differ from expectations;

  • changes in the scope and cost of FDIC insurance and other coverages;

  • changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies could materially affect our financial statements and how we report those results, and expectations and preliminary analysis relating to how such changes will affect our financial results could prove incorrect;

  • changes in laws and regulations affecting our businesses, including changes in the enforcement and interpretation of such laws and regulations by applicable governmental and regulatory agencies;

  • increased competition among financial institutions and nontraditional providers of financial services;

  • continued consolidation in the Northwest financial services industry resulting in the creation of larger financial institutions that have greater resources could change the competitive landscape;

  • the goodwill we have recorded in connection with acquisitions could become impaired, which may have an adverse impact on our earnings and capital;

  • our ability to identify and address cyber-security risks, including security breaches, "denial of service attacks," "hacking" and identity theft;

  • any material failure or interruption of our information and communications systems;

  • inability to keep pace with technological changes;

  • our ability to effectively manage credit risk, interest rate risk, market risk, operational risk, legal risk, liquidity risk and regulatory and compliance risk;

  • failure to maintain effective internal control over financial reporting or disclosure controls and procedures;

  • the effect of geopolitical instability, including wars, conflicts and terrorist attacks;

  • our profitability measures could be adversely affected if we are unable to effectively manage our capital;

  • natural disasters, including earthquakes, tsunamis, flooding, fires and other unexpected events;

  • the effect of COVID-19 and other infectious illness outbreaks that may arise in the future, which has created significant impacts and uncertainties in U.S. and global markets;

  • changes in governmental policy and regulation, including measures taken in response to economic, business, political and social conditions, including with regard to COVID-19; and

  • the effects of any damage to our reputation resulting from developments related to any of the items identified above.

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:

Clint Stein,


Aaron James Deer,


President and


Executive Vice President and


Chief Executive Officer


Chief Financial Officer






Investor Relations




InvestorRelations@columbiabank.com




253-471-4065




(COLB-ER)



CONSOLIDATED BALANCE SHEETS







Columbia Banking System, Inc.








Unaudited





March 31,


December 31,






2021


2020






(in thousands)

ASSETS



Cash and due from banks





$

178,096



$

218,899


Interest-earning deposits with banks





706,389



434,867


Total cash and cash equivalents





884,485



653,766


Debt securities available for sale at fair value (amortized cost of $5,417,373 and $4,997,529, respectively)


5,496,290



5,210,134


Equity securities





13,425



13,425


Federal Home Loan Bank ("FHLB") stock at cost




10,280



10,280


Loans held for sale





26,176



26,481


Loans, net of unearned income





9,676,318



9,427,660


Less: Allowance for credit losses




148,294



149,140


Loans, net





9,528,024



9,278,520


Interest receivable





52,667



54,831


Premises and equipment, net





160,179



162,059


Other real estate owned





521



553


Goodwill





765,842



765,842


Other intangible assets, net





24,810



26,734

...

Other assets





372,417



382,154


Total assets





$

17,335,116



$

16,584,779


LIABILITIES AND SHAREHOLDERS' EQUITY





Deposits:








Noninterest-bearing





$

7,424,472



$

6,913,214


Interest-bearing





7,342,994



6,956,648


Total deposits





14,767,466



13,869,862


FHLB advances





7,400



7,414


Securities sold under agreements to repurchase




38,624



73,859


Subordinated debentures





35,046



35,092


Other liabilities





211,517



250,945


Total liabilities





15,060,053



14,237,172


Commitments and contingent liabilities








Shareholders' equity:









March 31,


December 31,






2021


2020






(in thousands)





Preferred stock (no par value)








Authorized shares

2,000



2,000






Common stock (no par value)








Authorized shares

115,000



115,000






Issued

73,923



73,782



1,661,129



1,660,998


Outstanding

71,739



71,598






Retained earnings





607,040



575,248


Accumulated other comprehensive income




77,728



182,195


Treasury stock at cost

2,184



2,184



(70,834)



(70,834)


Total shareholders' equity





2,275,063



2,347,607


Total liabilities and shareholders' equity




$

17,335,116



$

16,584,779


CONSOLIDATED STATEMENTS OF INCOME







Columbia Banking System, Inc.


Three Months Ended

Unaudited


March 31,


December 31,


March 31,



2021


2020


2020

Interest Income


(in thousands except per share amounts)

Loans


$

100,315



$

107,402



$

107,366


Taxable securities


22,816



23,045



21,088


Tax-exempt securities


2,759



2,668



2,302


Deposits in banks


152



181



141


Total interest income


126,042



133,296



130,897


Interest Expense







Deposits


1,485



1,626



3,642


FHLB advances and Federal Reserve Bank ("FRB") borrowings


72



73



4,229


Subordinated debentures


468



467



468


Other borrowings


23



18



136


Total interest expense


2,048



2,184



8,475


Net Interest Income


123,994



131,112



122,422


Provision (recapture) for credit losses


(800)



(4,700)



41,500


Net interest income after provision (recapture) for credit losses


124,794



135,812



80,922


Noninterest Income







Deposit account and treasury management fees


6,358



6,481



7,788


Card revenue


3,733



3,497



3,518


Financial services and trust revenue


3,381



3,349



3,065


Loan revenue


7,369



7,960



4,590


Bank owned life insurance


1,560



1,619



1,596


Investment securities gains, net




36



249


Other


765



620



401


Total noninterest income


23,166



23,562



21,207


Noninterest Expense







Compensation and employee benefits


51,736



53,704



54,842


Occupancy


9,006



9,270



9,197


Data processing and software (1)


8,451



7,274



7,099


Legal and professional fees


2,815



3,573



2,102


Amortization of intangibles


1,924



2,011



2,310


Business and Occupation ("B&O") taxes


1,259



1,543



624


Advertising and promotion


760



1,644



1,305


Regulatory premiums


1,105



1,062



34


Net cost (benefit) of operation of other real estate owned


(63)



33



12


Other (1)


6,566



4,186



6,746


Total noninterest expense


83,559



84,300



84,271


Income before income taxes


64,401



75,074



17,858


Provision for income taxes


12,548



16,774



3,230


Net Income


$

51,853



$

58,300



$

14,628


Earnings per common share







Basic


$

0.73



$

0.82



$

0.20


Diluted


$

0.73



$

0.82



$

0.20


Dividends declared per common share - regular


$

0.28



$

0.28



$

0.28


Dividends declared per common share - special






0.22


Dividends declared per common share - total


$

0.28



$

0.28



$

0.50


Weighted average number of common shares outstanding


70,869



70,732



71,206


Weighted average number of diluted common shares outstanding


71,109



70,838



71,264


__________

(1) Prior periods adjusted to conform to current period presentation.

FINANCIAL STATISTICS







Columbia Banking System, Inc.


Three Months Ended

Unaudited


March 31,


December 31,


March 31,



2021


2020


2020

Earnings


(dollars in thousands except per share amounts)

Net interest income


$

123,994



$

131,112



$

122,422


Provision (recapture) for credit losses


$

(800)



$

(4,700)



$

41,500


Noninterest income


$

23,166



$

23,562



$

21,207


Noninterest expense


$

83,559



$

84,300



$

84,271


Net income


$

51,853



$

58,300



$

14,628


Per Common Share







Earnings (basic)


$

0.73



$

0.82



$

0.20


Earnings (diluted)


$

0.73



$

0.82



$

0.20


Book value


$

31.71



$

32.79



$

30.93


Tangible book value per common share (1)


$

20.69



$

21.72



$

19.76


Averages







Total assets


$

16,891,682



$

16,477,246



$

13,995,632


Interest-earning assets


$

15,419,371



$

15,010,392



$

12,487,550


Loans


$

9,586,984



$

9,533,655



$

8,815,755


Securities, including equity securities and FHLB stock


$

5,230,304



$

4,765,158



$

3,618,567


Deposits


$

14,212,616



$

13,864,027



$

10,622,379


Interest-bearing deposits


$

7,121,300



$

6,873,405



$

5,383,203


Interest-bearing liabilities


$

7,217,471



$

6,954,287



$

6,375,931


Noninterest-bearing deposits


$

7,091,316



$

6,990,622



$

5,239,176


Shareholders' equity


$

2,346,593



$

2,311,070



$

2,193,051


Financial Ratios







Return on average assets


1.23

%


1.42

%


0.42

%

Return on average common equity


8.84

%


10.09

%


2.67

%

Return on average tangible common equity (1)


13.73

%


15.79

%


4.72

%

Average equity to average assets


13.89

%


14.03

%


15.67

%

Shareholders' equity to total assets


13.12

%


14.16

%


15.77

%

Tangible common shareholders' equity to tangible assets (1)


8.97

%


9.85

%


10.68

%

Net interest margin (tax equivalent)


3.31

%


3.52

%


4.00

%

Efficiency ratio (tax equivalent) (2)


55.90

%


53.70

%


57.73

%

Operating efficiency ratio (tax equivalent) (1)


55.30

%


53.03

%


57.24

%

Noninterest expense ratio


1.98

%


2.05

%


2.41

%










March 31,


December 31,



Period-end


2021


2020



Total assets


$

17,335,116



$

16,584,779




Loans, net of unearned income


$

9,676,318



$

9,427,660




Allowance for credit losses


$

148,294



$

149,140




Securities, including equity securities and FHLB stock


$

5,519,995



$

5,233,839




Deposits


$

14,767,466



$

13,869,862




Shareholders' equity


$

2,275,063



$

2,347,607




Nonperforming assets







Nonaccrual loans


$

33,581



$

34,806




Other real estate owned ("OREO") and other personal property owned ("OPPO")


521



553




Total nonperforming assets


$

34,102



$

35,359




Nonperforming loans to period-end loans


0.35

%


0.37

%



Nonperforming assets to period-end assets


0.20

%


0.21

%



Allowance for credit losses to period-end loans


1.53

%


1.58

%



Net loan charge-offs (for the three months ended)


$

46



$

3,128




__________

(1) This is a non-GAAP measure. See section titled "Non-GAAP Financial Measures" on the last three pages of this earnings release for a reconciliation to the
most comparable GAAP measure.

(2) Noninterest expense divided by the sum of net interest income on a tax equivalent basis and noninterest income on a tax equivalent basis.

QUARTERLY FINANCIAL STATISTICS











Columbia Banking System, Inc.


Three Months Ended

Unaudited


March 31,


December 31,


September 30,


June 30,


March 31,



2021


2020


2020


2020


2020

Earnings


(dollars in thousands except per share amounts)

Net interest income


$

123,994



$

131,112



$

124,726



$

121,851



$

122,422


Provision (recapture) for credit losses


$

(800)



$

(4,700)



$

7,400



$

33,500



$

41,500


Noninterest income


$

23,166



$

23,562



$

22,472



$

37,259



$

21,207


Noninterest expense


$

83,559



$

84,300



$

85,115



$

80,833



$

84,271


Net income


$

51,853



$

58,300



$

44,734



$

36,582



$

14,628


Per Common Share











Earnings (basic)


$

0.73



$

0.82



$

0.63



$

0.52



$

0.20


Earnings (diluted)


$

0.73



$

0.82



$

0.63



$

0.52



$

0.20


Book value


$

31.71



$

32.79



$

32.14



$

31.80



$

30.93


Averages











Total assets


$

16,891,682



$

16,477,246



$

15,965,485



$

15,148,488



$

13,995,632


Interest-earning assets


$

15,419,371



$

15,010,392



$

14,492,435



$

13,657,719



$

12,487,550


Loans


$

9,586,984



$

9,533,655



$

9,744,336



$

9,546,099



$

8,815,755


Securities, including equity securities and FHLB stock


$

5,230,304



$

4,765,158



$

3,948,041



$

3,591,693



$

3,618,567


Deposits


$

14,212,616



$

13,864,027



$

13,318,485



$

12,220,415



$

10,622,379


Interest-bearing deposits


$

7,121,300



$

6,873,405



$

6,527,695



$

6,037,107



$

5,383,203


Interest-bearing liabilities


$

7,217,471



$

6,954,287



$

6,659,119



$

6,514,012



$

6,375,931


Noninterest-bearing deposits


$

7,091,316



$

6,990,622



$

6,790,790



$

6,183,308



$

5,239,176


Shareholders' equity


$

2,346,593



$

2,311,070



$

2,293,771



$

2,254,349



$

2,193,051


Financial Ratios











Return on average assets


1.23

%


1.42

%


1.12

%


0.97

%


0.42

%

Return on average common equity


8.84

%


10.09

%


7.80

%


6.49

%


2.67

%

Average equity to average assets


13.89

%


14.03

%


14.37

%


14.88

%


15.67

%

Shareholders' equity to total assets


13.12

%


14.16

%


14.18

%


14.30

%


15.77

%

Net interest margin (tax equivalent)


3.31

%


3.52

%


3.47

%


3.64

%


4.00

%

Period-end











Total assets


$

17,335,116



$

16,584,779



$

16,233,424



$

15,920,944



$

14,038,503


Loans, net of unearned income


$

9,676,318



$

9,427,660



$

9,688,947



$

9,771,898



$

8,933,321


Allowance for credit losses


$

148,294



$

149,140



$

156,968



$

151,546



$

122,074


Securities, including equity securities and FHLB stock


$

5,519,995



$

5,233,839



$

4,305,425



$

3,723,492



$

3,591,408


Deposits


$

14,767,466



$

13,869,862



$

13,600,260



$

13,131,477



$

10,812,756


Shareholders' equity


$

2,275,063



$

2,347,607



$

2,301,981



$

2,276,755



$

2,213,602


Goodwill


$

765,842



$

765,842



$

765,842



$

765,842



$

765,842


Other intangible assets, net


$

24,810



$

26,734



$

28,745



$

30,938



$

33,148


Nonperforming assets











Nonaccrual loans


$

33,581



$

34,806



$

47,231



$

53,732



$

47,647


OREO and OPPO


521



553



623



747



510


Total nonperforming assets


$

34,102



$

35,359



$

47,854



$

54,479



$

48,157


Nonperforming loans to period-end loans


0.35

%


0.37

%


0.49

%


0.55

%


0.53

%

Nonperforming assets to period-end assets


0.20

%


0.21

%


0.29

%


0.34

%


0.34

%

Allowance for credit losses to period-end loans


1.53

%


1.58

%


1.62

%


1.55

%


1.37

%

Net loan charge-offs


$

46



$

3,128



$

1,978



$

4,028



$

5,026


LOAN PORTFOLIO COMPOSITION











Columbia Banking System, Inc.











Unaudited


March 31,


December 31,


September 30,


June 30,


March 31,



2021


2020


2020


2020


2020

Loan Portfolio Composition - Dollars


(dollars in thousands)

Commercial loans:











Commercial real estate


$

4,081,915



$

4,062,313



$

4,027,035



$

4,032,643



$

3,969,974


Commercial business


3,792,813



3,597,968



3,836,009



3,859,513



3,169,668


Agriculture


751,800



779,627



850,290



845,950



754,491


Construction


282,534



268,663



273,176



304,015



308,186


Consumer loans:











One-to-four family residential real estate


735,314



683,570



665,432



692,837



690,506


Other consumer


31,942



35,519



37,005



36,940



40,496


Total loans


9,676,318



9,427,660



9,688,947



9,771,898



8,933,321


Less: Allowance for credit losses


(148,294)



(149,140)



(156,968)



(151,546)



(122,074)


Total loans, net


$

9,528,024



$

9,278,520



$

9,531,979



$

9,620,352



$

8,811,247


Loans held for sale


$

26,176



$

26,481



$

24,407



$

28,803



$

9,701






March 31,


December 31,


September 30,


June 30,


March 31,

Loan Portfolio Composition - Percentages


2021


2020


2020


2020


2020

Commercial loans:











Commercial real estate


42.2

%


43.0

%


41.5

%


41.2

%


44.5

%

Commercial business


39.2

%


38.2

%


39.6

%


39.5

%


35.5

%

Agriculture


7.8

%


8.3

%


8.8

%


8.7

%


8.4

%

Construction


2.9

%


2.8

%


2.8

%


3.1

%


3.4

%

Consumer loans:











One-to-four family residential real estate


7.6

%


7.3

%


6.9

%


7.1

%


7.7

%

Other consumer


0.3

%


0.4

%


0.4

%


0.4

%


0.5

%

Total loans


100.0

%


100.0

%


100.0

%


100.0

%


100.0

%

DEPOSIT COMPOSITION











Columbia Banking System, Inc.











Unaudited













March 31,


December 31,


September 30,


June 30,


March 31,



2021


2020


2020


2020


2020

Deposit Composition - Dollars


(dollars in thousands)

Demand and other noninterest-bearing


$

7,424,472



$

6,913,214



$

6,897,054



$

6,719,437



$

5,323,908


Money market


2,913,689



2,780,922



2,708,949



2,586,376



2,313,717


Interest-bearing demand


1,512,808



1,433,083



1,322,618



1,274,058



1,131,874


Savings


1,282,151



1,169,721



1,109,155



1,035,723



905,931


Interest-bearing public funds, other than certificates of
deposit


662,461



656,273



635,980



623,496



405,810


Certificates of deposit, less than $250,000


198,568



201,805



204,578



210,357



214,449


Certificates of deposit, $250,000 or more


107,421



108,935



105,041



104,330



109,659


Certificates of deposit insured by the CD Option of
IntraFi Network Deposits


25,929



23,105



22,609



17,078



17,171


Brokered certificates of deposit


5,000



5,000



5,000



8,427



12,259


Reciprocal money market accounts


634,967



577,804



589,276



552,195



377,980


Subtotal


14,767,466



13,869,862



13,600,260



13,131,477



10,812,758


Valuation adjustment resulting from acquisition
accounting










(2)


Total deposits


$

14,767,466



$

13,869,862



$

13,600,260



$

13,131,477



$

10,812,756




March 31,


December 31,


September 30,


June 30,


March 31,

Deposit Composition - Percentages


2021


2020


2020


2020


2020

Demand and other noninterest-bearing


50.4

%


49.8

%


50.7

%


51.2

%


49.2

%

Money market


19.7

%


20.1

%


19.9

%


19.7

%


21.4

%

Interest-bearing demand


10.2

%


10.3

%


9.7

%


9.7

%


10.5

%

Savings


8.7

%


8.4

%


8.2

%


7.9

%


8.4

%

Interest-bearing public funds, other than certificates of
deposit


4.5

%


4.7

%


4.7

%


4.7

%


3.8

%

Certificates of deposit, less than $250,000


1.3

%


1.5

%


1.5

%


1.6

%


2.0

%

Certificates of deposit, $250,000 or more


0.7

%


0.8

%


0.8

%


0.8

%


1.0

%

Certificates of deposit insured by the CD Option of
IntraFi Network Deposits


0.2

%


0.2

%


0.2

%


0.1

%


0.2

%

Brokered certificates of deposit


%


%


%


0.1

%


0.1

%

Reciprocal money market accounts


4.3

%


4.2

%


4.3

%


4.2

%


3.4

%

Total


100.0

%


100.0

%


100.0

%


100.0

%


100.0

%

AVERAGE BALANCES AND RATES











Columbia Banking System, Inc.











Unaudited















Three Months Ended


Three Months Ended



March 31, 2021


March 31, 2020



Average

Balances


Interest

Earned / Paid


Average

Rate


Average

Balances


Interest

Earned / Paid


Average

Rate



(dollars in thousands)

ASSETS













Loans, net (1)(2)


$

9,586,984



$

101,477



4.29

%


$

8,815,755



$

108,665



4.96

%

Taxable securities


4,624,175



22,816



2.00

%


3,209,110



21,088



2.64

%

Tax exempt securities (2)


606,129



3,492



2.34

%


409,457



2,914



2.86

%

Interest-earning deposits with banks


602,083



152



0.10

%


53,228



141



1.07

%

Total interest-earning assets


15,419,371



127,937



3.36

%


12,487,550



132,808



4.28

%

Other earning assets


242,684







232,361






Noninterest-earning assets


1,229,627







1,275,721






Total assets


$

16,891,682







$

13,995,632






LIABILITIES AND SHAREHOLDERS' EQUITY

Money market accounts


$

3,450,750



$

699



0.08

%


$

2,633,931



$

1,728



0.26

%

Interest-bearing demand


1,449,642



265



0.07

%


1,125,691



484



0.17

%

Savings accounts


1,221,431



40



0.01

%


897,276



43



0.02

%

Interest-bearing public funds, other than
certificates of deposit


663,158



276



0.17

%


355,401



903



1.02

%

Certificates of deposit


336,319



205



0.25

%


370,904



484



0.52

%

Total interest-bearing deposits


7,121,300



1,485



0.08

%


5,383,203



3,642



0.27

%

FHLB advances and FRB borrowings


7,408



72



3.94

%


909,110



4,229



1.87

%

Subordinated debentures


35,072



468



5.41

%


35,253



468



5.34

%

Other borrowings and interest-bearing
liabilities


53,691



23



0.17

%


48,365



136



1.13

%

Total interest-bearing liabilities


7,217,471



2,048



0.12

%


6,375,931



8,475



0.53

%

Noninterest-bearing deposits


7,091,316







5,239,176






Other noninterest-bearing liabilities


236,302







187,474






Shareholders' equity


2,346,593







2,193,051






Total liabilities & shareholders'
equity


$

16,891,682







$

13,995,632






Net interest income (tax equivalent)


$

125,889







$

124,333




Net interest margin (tax equivalent)


3.31

%






4.00

%

__________

(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 calcul