Exhibit 99.1
FOR IMMEDIATE RELEASE
July 28, 2016
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
Columbia Banking System Announces Second Quarter 2016 Results
Highlights
| |
| • | Net income of $25.4 million with diluted earnings per common share of $0.44 |
| |
| • | New loan production for the quarter of $337.8 million, resulting in solid loan growth of $229.9 million, or 16% annualized |
| |
| • | Nonperforming assets to period end assets ratio improves to 0.36%, lowest in 8 years |
| |
| • | Efficiency ratio for the quarter improves to less than 60% |
| |
| • | Named one of “Washington’s Best Workplaces” 2016 by the Puget Sound Business Journal |
TACOMA, Washington, July 28, 2016 -- 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.”
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 from $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.
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| | | | | | | | | | | | | | | | | | | | |
| 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® | | 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® | | 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
Balances | | Interest
Earned / Paid | | Average
Rate | | Average
Balances | | Interest
Earned / Paid | | Average
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
Balances | | Interest
Earned / Paid | | Average
Rate | | Average
Balances | | Interest
Earned / Paid | | Average
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
Balances | | Interest
Earned / Paid | | Average
Rate | | Average
Balances | | Interest
Earned / Paid | | Average
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.
