Exhibit 99.1
FOR IMMEDIATE RELEASE
January 25, 2007
| | |
Contacts: | | Melanie J. Dressel, President and Chief Executive Officer (253) 305-1911 Gary R. Schminkey, Executive Vice President and Chief Financial Officer (253) 305-1966 |
COLUMBIA BANKING SYSTEM ANNOUNCES
FOURTH QUARTER AND FULL YEAR 2006 EARNINGS
HIGHLIGHTS
| | • | | Earnings for the year of $32.1 million, up 8% from $29.6 million in 2005. |
| | • | | Diluted earnings per share for the year of $1.99, up 6% from 2005. |
| | • | | Net interest margin expanded to 4.49%, up from 4.44% in 2005. |
| | • | | Earnings for the quarter of $8.3 million, compared to $8.6 million for 4th quarter 2005. |
| | • | | Diluted earnings per share for the quarter of $0.52, compared to $0.54 for the same period in 2005. |
| | • | | Efficiency ratio improved to 57.41% |
| | • | | Total assets at $2.55 billion, a 7% increase from 2005. |
| | • | | Total loans increased $144 million, or 9%, from 2005. |
| | • | | Stable core deposits at 73% of total deposits. |
| | • | | Columbia Bank named Outstanding Philanthropic Corporation of 2006 by Association of Fundraising Professionals |
TACOMA, Washington—Columbia Banking System, Inc. (Nasdaq: COLB) today announced net income of $8.3 million for the quarter ended December 31, 2006, compared to $8.6 million for the same quarter of 2005. On a diluted per share basis, net income for the quarter was $0.52, a decline from $0.54 in 2005. Return on average assets and return on average equity for the quarter were 1.31% and 13.28%, respectively, compared to 1.47% and 15.23%, respectively, for the same period in 2005. Revenue (net interest income plus noninterest income) was $31.1 million for the fourth quarter of 2006, up 2% from $30.4 million one year ago.
Melanie J. Dressel, President and Chief Executive Officer, said “Our momentum continued to build in the second half of 2006, as evidenced by good growth in loans. Despite industry-wide challenges in attracting and retaining low-cost deposits, we have continued to manage the pressure on our net
interest margin by maintaining a stable core deposit base, which comprises 73% of our total deposits. While credit quality remained good, we did increase our loan loss provision by $950,000 for the 4th quarter of 2006 as a result of loan growth and a $1.5 million loan charge-off on a “legacy credit” dating back to 1999. We remain focused on increasing our share of the market by building complete relationships with our customers and continuing to leverage the strong infrastructure we have built. Our significant investment in time and resources to enhance our core systems has resulted in lower data processing expenses, as well as increased flexibility in developing and implementing new products and services for current and potential customers.”
For the year ended December 31, 2006, net income increased $2.5 million to $32.1 million, up 8% from $29.6 million for 2005. On a diluted per share basis, earnings for the year were $1.99, an increase of 6% from $1.87 in the prior year. Return on average assets and return on average equity for the year were 1.30% and 13.50%, respectively, compared with 1.29% and 13.81% for 2005. Revenue for 2006 totaled $122.4 million, up 6% from $115.7 million for the year 2005. Total nonperforming assets decreased $1.4 million, or 29%, to $3.5 million at December 31, 2006.
Ms. Dressel continued, “We achieved loan growth of 9 percent, while maintaining exceptional portfolio diversity. Mark Nelson, Executive Vice President and Chief Banking Officer, added, “Columbia continues to attract talented bankers who will help us capitalize on our existing advantages of a balanced portfolio, core deposit mix and strong capital base. We recently hired two new lending teams based in King County, including a four-person commercial team in Bellevue and an experienced builder banking team. Our balanced portfolio structure affords us the ability to consider new lending relationships based on their merits without the constraints created by excessive concentrations in any single category.”
In November 2006, Columbia Bank was named 2006 Outstanding Philanthropic Corporation by the Association of Fundraising Professionals, Washington Chapter. In accepting the award on behalf of the bank, Melanie Dressel praised Columbia bankers for their ongoing commitment, and said, “We are only as strong as the communities we serve. Thank you for making a real difference.”
At December 31, 2006, Columbia’s total assets were $2.55 billion, an increase of 7% from $2.38 billion at December 31, 2005. Total loans were $1.71 billion at December 31, 2006, up 9% from December 31, 2005, and total securities increased $19.8 million to $605.1 million at December 31,
2006, an increase of 3% from the prior year. Total deposits increased 1% from December 31, 2005, ending at $2.02 billion at December 31, 2006. Core deposits totaled $1.47 billion at year-end 2006, comprising 73% of total deposits.
Core Financial Results
For the year ended December 31, 2006, core earnings were $32.9 million, an increase of 11% from $29.6 million for the year ended December 31, 2005; core earnings on a diluted per share basis for the year ended December 31, 2006 was $2.03 compared with $1.87 for the same period in 2005, an increase of 9%. Core earnings exclude the interest rate floor valuation adjustments which were taken in the second and third quarters of 2006. Return on average assets and return on average equity for the year ended December 31, 2006 were 1.33% and 13.79%, respectively, compared to 1.29% and 13.81%, respectively, for the period in 2005. For the quarter ended June 30, 2006 core earnings were $8.4 million with GAAP earnings of $7.2 million. For the quarter ended September 30, 2006 core earnings were $7.9 million with GAAP earnings of $8.3 million.
The following table reconciles GAAP net income to core earnings, including per-share figures:
(Dollars in thousands, except per share data)
| | | | | | |
| | | Twelve months ended December 31, |
| | | 2006 | | 2005 |
Net income | | $ | 32,103 | | $ | 29,631 |
Add: Interest rate floor mark-to-market, net of tax | | | 757 | | | — |
| | | | | | |
Core earnings | | $ | 32,860 | | $ | 29,631 |
| | | | | | |
Earnings per Diluted Share: | | | | | | |
GAAP earnings | | $ | 1.99 | | $ | 1.87 |
Core earnings | | $ | 2.03 | | $ | 1.87 |
Operating Results
Quarter and Year-Ended December 31, 2006
Net Interest Income
Net interest income for the quarter increased 3% to $24.8 million, from $23.9 million for the same quarter in 2005, primarily due to moderately increased loan volumes. Columbia’s net interest margin decreased to 4.43% in the fourth quarter of 2006 from 4.61% for the same quarter last year; however, it was an increase from 4.41% for the third quarter of 2006. The compression on net interest margin resulted from increased competition for loans, slower core deposit growth and an increasing reliance on higher cost deposits and borrowings to fund loan growth. Total revenue was $31.1 million for the quarter, up 2% from $30.4 million in the same quarter of 2005.
Average interest-earning assets grew to $2.31 billion during the quarter, an increase of 9% compared with $2.12 billion during the same quarter of 2005. The yield on average interest-earning assets increased 75 basis points (a basis point equals 1/100 of 1%) to 7.05% during the quarter compared with 6.30% during the same quarter of 2005. During the same period, average interest-bearing liabilities were unchanged at $1.80 billion. The cost of average interest-bearing liabilities increased 116 basis points to 3.36% during the quarter, from 2.20% in the same quarter of 2005.
For the twelve months ended December 31, 2006, net interest income increased 8% to $97.8 million from $90.9 million in 2005. During 2006, the Company’s net interest margin increased to 4.49% from 4.44% for 2005. Total revenue for the year was $122.4 million, an increase of 6% from $115.7 million at year-end 2005. Average interest-earning assets grew to $2.27 billion during 2006, compared with $2.10 billion during 2005. The yield on average interest-earning assets increased 94 basis points to 6.87% during 2006, from 5.93% in 2005. In comparison, average interest-bearing liabilities grew to $1.77 billion compared with $1.64 billion for 2005. The cost of average interest-bearing liabilities increased 113 basis points to 3.04% during 2006 from 1.91% in 2005.
Noninterest Income
Noninterest income for the quarter was $6.3 million, a decrease of $144,000, or 2% from the same quarter in 2005. The decrease is primarily due to decreases in mortgage banking income and a decline in merchant services fees. The gross volume for merchant card services increased during 2006; however, the increased income attributable to volume was offset by net fees paid to the card associations and several correspondent banking relationships which were acquired and no longer using the service. For the year, noninterest income was $24.7 million, a slight decrease from $24.8 million for 2005.
Noninterest Expense
Total noninterest expense for the quarter was $18.6 million, an increase of 2% from $18.3 million for the same quarter in 2005. Noninterest expense for the year was $76.1 million, an increase of 5% from $72.9 million from the prior year. Ms. Dressel commented, “These moderate increases were primarily due to higher compensation, employee benefits, and advertising and promotion expenses, partially offset by lower data processing expenses.
Nonperforming Assets and Loan Loss Provision
During the fourth quarter of 2006, the Company allocated $950,000 to its provision for loan and lease losses, compared to $15,000 for the same period in 2005. The increased allocation for the three months ending December 31, 2006 is due to loan growth during the period, coupled with an increase in loan charge-offs when compared to the fourth quarter of 2005. Net charge-offs in the fourth quarter were $1.7 million, compared to net recoveries of $24,000 for the same period in 2005. The increase in net charge offs was primarily centered in one “legacy credit” originated at December of 1999, which was classified as non-performing in November of 2003. Based upon recently obtained information, management deemed it prudent to recognize a partial loss on this loan as some of the assets assigned to the bank as additional collateral became impaired and reduced the book value of the loan to $1.1 million from $2.6 million during the quarter ending December 31, 2006.
Management believes the balance to be collectible based upon the remaining collateral which secures the loan. Ms. Dressel commented, “This has been a protracted work-out situation spanning several years. Although some recovery is possible, we felt the prudent action was to take the charge-off based on the information we have today. The balance of the bank’s loan portfolio continues to perform extremely well with non-performing loans at their lowest level in seven years”. At December 31, 2006 non-performing loans were $3.5 million, or 0.20% of period end loans, compared to $4.8 million, or 0.31% at December 31, 2005.
As a result of the decline in nonperforming loans and an increase in the allowance for loan losses year-over-year, the ratio of the allowance for credit losses to nonperforming assets was 579.94% at December 31, 2006, compared with 427.26% at December 31, 2005. The reserve for loan losses stood at $20.2 million, or 1.18%, of period end loans as of December 31, 2006 compared to $20.8 million, or
1.33%, as of December 31, 2005. Management believes this level of reserve is appropriate based upon analysis of the loan portfolio and the economic conditions in markets in which the bank does business.
Expansion Activities
Ms. Dressel further noted, “Our stated goal is to expand our geographic footprint throughout the Pacific Northwest with de novo branching and strategic acquisitions that make economic sense for our shareholders. While we opened no new branches in 2006, due to challenges in acquiring locations that meet our criteria, we have several new branches in the pipeline. We will move ahead with these expansion efforts, while continuing our strategy of leveraging our strong base of branches in both Washington and Oregon. In addition, our new remote deposit product will launch in early April, providing current and potential business customers a convenient, cost-effective method of making deposits without needing to leave their place of business.”
Conference Call
Columbia will discuss the quarterly and year-end results on a conference call on Thursday, January 25, 2007 at 1:00 PST. Interested investors, analysts, media representatives and the public are invited to listen to this discussion by calling 1-866-404-2271; Conference ID code 5789817. A conference call replay will be available from approximately 3:00 p.m. PST on January 25 through midnight PST on Thursday, February 1, 2007. The conference call replay can be accessed by dialing 1-800-642-1687 and entering Conference ID code 5789817.
Annual Meeting of Shareholders
Columbia Banking System’s Annual Meeting of Shareholders will be held at 1:00 PST on April 25, 2006, at the Greater Tacoma Convention & Trade Center; 1500 Broadway, Tacoma, Washington.
Columbia Banking System, Inc. is a Tacoma-based bank holding company whose wholly owned banking subsidiaries are Columbia Bank and Bank of Astoria. Columbia Bank is a Washington state-chartered full-service commercial bank with 35 banking offices in Pierce, King, Cowlitz, Kitsap and Thurston counties. Bank of Astoria, a federally insured commercial bank headquartered in
Astoria, Oregon, operates four branches in Clatsop County: Astoria, Warrenton, Seaside and Cannon Beach; and one branch in Manzanita in Tillamook County. More information about Columbia can be found on its website atwww.columbiabank.com.
# # #
Note Regarding Forward-Looking Statements
This news release includes forward looking statements, which management believes are a benefit to shareholders. These forward looking statements describe 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,” “should,” and “anticipate” and 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 risk and uncertainty 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 SEC, factors that may cause actual results to differ materially from those contemplated by such forward looking statements include, among others, the following possibilities: (1) local, national and international economic conditions are 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 reduce interest margins more than expected and negatively affect funding sources; (3) projected business increases following strategic expansion or opening or acquiring new branches are lower than expected; (4) costs or difficulties related to the integration of acquisitions are greater than expected; (5) competitive pressure among financial institutions increases significantly; (6) legislation or regulatory requirements or changes adversely affect the businesses in which Columbia is engaged.
FINANCIAL STATISTICS
Columbia Banking System, Inc.
Unaudited
| | | | | | | | | | | | | | | | |
| | | Three Months Ended
December 31, | | | Twelve Months Ended
December 31, | |
(in thousands, except per share amounts) | | 2006 | | | 2005 | | | 2006 | | | 2005 | |
Earnings | | | | | | | | | | | | | | | | |
Net interest income | | $ | 24,750 | | | $ | 23,934 | | | $ | 97,763 | | | $ | 90,912 | |
Provision for loan and lease losses | | $ | 950 | | | $ | 15 | | | $ | 2,065 | | | $ | 1,520 | |
Noninterest income | | $ | 6,324 | | | $ | 6,468 | | | $ | 24,672 | | | $ | 24,786 | |
Noninterest expense | | $ | 18,560 | | | $ | 18,271 | | | $ | 76,134 | | | $ | 72,855 | |
Net income | | $ | 8,341 | | | $ | 8,583 | | | $ | 32,103 | | | $ | 29,631 | |
| | | | |
Per Share | | | | | | | | | | | | | | | | |
Net income (basic) | | $ | 0.52 | | | $ | 0.55 | | | $ | 2.01 | | | $ | 1.89 | |
Net income (diluted) | | $ | 0.52 | | | $ | 0.54 | | | $ | 1.99 | | | $ | 1.87 | |
| | | | |
Averages | | | | | | | | | | | | | | | | |
Total assets | | $ | 2,517,836 | | | $ | 2,316,654 | | | $ | 2,473,404 | | | $ | 2,290,746 | |
Interest-earning assets | | $ | 2,310,502 | | | $ | 2,116,345 | | | $ | 2,265,393 | | | $ | 2,102,513 | |
Loans | | $ | 1,688,600 | | | $ | 1,534,068 | | | $ | 1,629,616 | | | $ | 1,494,567 | |
Securities | | $ | 602,075 | | | $ | 579,177 | | | $ | 623,631 | | | $ | 605,395 | |
Deposits | | $ | 2,024,108 | | | $ | 2,006,448 | | | $ | 1,976,448 | | | $ | 1,923,778 | |
Core deposits | | $ | 1,459,281 | | | $ | 1,467,077 | | | $ | 1,433,395 | | | $ | 1,423,862 | |
Shareholders’ Equity | | $ | 249,202 | | | $ | 223,538 | | | $ | 237,843 | | | $ | 214,612 | |
| | | | |
Financial Ratios | | | | | | | | | | | | | | | | |
Return on average assets | | | 1.31 | % | | | 1.47 | % | | | 1.30 | % | | | 1.29 | % |
Return on average equity | | | 13.28 | % | | | 15.23 | % | | | 13.50 | % | | | 13.81 | % |
Return on average tangible equity(1) | | | 15.49 | % | | | 18.17 | % | | | 15.88 | % | | | 16.63 | % |
Average equity to average assets | | | 9.90 | % | | | 9.65 | % | | | 9.62 | % | | | 9.37 | % |
Net interest margin | | | 4.43 | % | | | 4.61 | % | | | 4.49 | % | | | 4.44 | % |
Efficiency ratio (tax equivalent) (2) | | | 57.41 | % | | | 58.46 | % | | | 58.95 | % | | | 61.20 | % |
| | | |
| | | December 31, | | | | | | | |
Period end | | 2006 | | | 2005 | | | | | | | |
Total assets | | $ | 2,553,131 | | | $ | 2,377,322 | | | | | | | | | |
Loans | | $ | 1,708,962 | | | $ | 1,564,704 | | | | | | | | | |
Allowance for loan and lease losses | | $ | 20,182 | | | $ | 20,829 | | | | | | | | | |
Securities | | $ | 605,133 | | | $ | 585,332 | | | | | | | | | |
Deposits | | $ | 2,023,351 | | | $ | 2,005,489 | | | | | | | | | |
Core deposits | | $ | 1,473,701 | | | $ | 1,478,090 | | | | | | | | | |
Shareholders’ equity | | $ | 252,347 | | | $ | 226,242 | | | | | | | | | |
Book value per share | | $ | 15.71 | | | $ | 14.29 | | | | | | | | | |
Tangible book value per share | | $ | 13.68 | | | $ | 12.20 | | | | | | | | | |
| | | | |
Nonperforming assets | | | | | | | | | | | | | | | | |
Nonaccrual loans | | $ | 2,414 | | | $ | 4,733 | | | | | | | | | |
Restructured loans | | | 1,066 | | | | 124 | | | | | | | | | |
Personal property owned | | | — | | | | — | | | | | | | | | |
Other real estate owned | | | — | | | | 18 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Total nonperforming assets | | $ | 3,480 | | | $ | 4,875 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Nonperforming loans to period-end loans | | | 0.20 | % | | | 0.31 | % | | | | | | | | |
Nonperforming assets to period-end assets | | | 0.14 | % | | | 0.21 | % | | | | | | | | |
Allowance for loan and lease losses to period-end loans | | | 1.18 | % | | | 1.33 | % | | | | | | | | |
Allowance for loan and lease losses to nonperforming loans | | | 579.94 | % | | | 428.84 | % | | | | | | | | |
Allowance for loan and lease losses to nonperforming assets | | | 579.94 | % | | | 427.26 | % | | | | | | | | |
Net loan charge-offs | | $ | 2,712 | (3) | | $ | 572 | (4) | | | | | | | | |
| (1) | Annualized net income, excluding core deposit intangible asset amortization, divided by average daily shareholders’ equity, excluding average goodwill and average core deposit intangible asset. |
| (2) | Noninterest expense divided by the sum of net interest income and noninterest income on a tax equivalent basis, excluding nonrecurring income and expense, such as gains/losses on investment securities, net cost (gain) of OREO and mark-to-market adjustments of interest rate floor instruments. |
| (3) | For the twelve months ended December 31, 2006. |
| (4) | For the twelve months ended December 31, 2005. |
FINANCIAL STATISTICS
Columbia Banking System, Inc.
Unaudited
| | | | | | | | |
| | | Period End December 31, | |
(in thousands) | | 2006 | | | 2005 | |
| Loan Portfolio Composition | | | | | | | | |
Commercial business | | $ | 608,636 | | | $ | 556,589 | |
| | |
Leases | | | 9,263 | | | | 14,385 | |
| | |
Real Estate: | | | | | | | | |
One-to-four family residential | | | 51,277 | | | | 74,930 | |
Five or more family residential and commercial | | | 687,635 | | | | 651,393 | |
| | | | | | | | |
Total Real Estate | | | 738,912 | | | | 726,323 | |
| | |
Real Estate Construction: | | | | | | | | |
One-to-four family residential | | | 92,124 | | | | 41,033 | |
Five or more family residential and commercial | | | 115,185 | | | | 89,134 | |
| | | | | | | | |
Total Real Estate Construction | | | 207,309 | | | | 130,167 | |
| | |
Consumer | | | 147,782 | | | | 140,110 | |
| | | | | | | | |
Subtotal loans | | | 1,711,902 | | | | 1,567,574 | |
Less: Deferred loan fees | | | (2,940 | ) | | | (2,870 | ) |
| | | | | | | | |
Total loans | | $ | 1,708,962 | | | $ | 1,564,704 | |
| | | | | | | | |
Loans held for sale | | $ | 933 | | | $ | 1,850 | |
| | | | | | | | |
| Deposit Composition | | | | | | | | |
Demand and other noninterest bearing | | $ | 432,293 | | | $ | 455,838 | |
| | |
Interest bearing demand | | | 414,198 | | | | 339,686 | |
| | |
Money market | | | 516,415 | | | | 563,973 | |
| | |
Savings | | | 110,795 | | | | 118,604 | |
| | |
Certificates of deposit | | | 549,650 | | | | 527,388 | |
| | | | | | | | |
Total deposits | | $ | 2,023,351 | | | $ | 2,005,489 | |
| | | | | | | | |
QUARTERLY FINANCIAL STATISTICS
Columbia Banking System, Inc.
Unaudited
| | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended | |
(in thousands, except per share amounts) | | Dec 31 2006 | | | Sept 30 2006 | | | Jun 30 2006 | | | Mar 31 2006 | | | Dec 31 2005 | |
Earnings | | | | | | | | | | | | | | | | | | | | |
Net interest income | | $ | 24,750 | | | $ | 24,405 | | | $ | 24,302 | | | $ | 24,306 | | | $ | 23,934 | |
Provision for loan and lease losses | | $ | 950 | | | $ | 650 | | | $ | 250 | | | $ | 215 | | | $ | 15 | |
Noninterest income | | $ | 6,324 | | | $ | 6,108 | | | $ | 6,267 | | | $ | 5,973 | | | $ | 6,468 | |
Noninterest expense | | $ | 18,560 | | | $ | 18,098 | | | $ | 21,136 | | | $ | 18,340 | | | $ | 18,271 | |
Net income | | $ | 8,341 | | | $ | 8,335 | | | $ | 7,239 | | | $ | 8,188 | | | $ | 8,583 | |
| | | | | |
Per Share | | | | | | | | | | | | | | | | | | | | |
Net income [basic] | | $ | 0.52 | | | $ | 0.52 | | | $ | 0.45 | | | $ | 0.52 | | | $ | 0.55 | |
Net income [diluted] | | $ | 0.52 | | | $ | 0.52 | | | $ | 0.45 | | | $ | 0.51 | | | $ | 0.54 | |
| | | | | |
Averages | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 2,517,836 | | | $ | 2,504,371 | | | $ | 2,480,585 | | | $ | 2,388,680 | | | $ | 2,316,654 | |
Interest-earning assets | | $ | 2,310,502 | | | $ | 2,290,351 | | | $ | 2,268,259 | | | $ | 2,190,872 | | | $ | 2,116,345 | |
Loans | | $ | 1,688,600 | | | $ | 1,647,471 | | | $ | 1,613,253 | | | $ | 1,567,615 | | | $ | 1,534,068 | |
Securities | | $ | 602,075 | | | $ | 627,821 | | | $ | 645,343 | | | $ | 619,428 | | | $ | 579,177 | |
Deposits | | $ | 2,024,108 | | | $ | 1,975,103 | | | $ | 1,949,608 | | | $ | 1,955,851 | | | $ | 2,006,448 | |
Core deposits | | $ | 1,459,281 | | | $ | 1,433,641 | | | $ | 1,414,455 | | | $ | 1,425,442 | | | $ | 1,467,077 | |
Shareholders’ Equity | | $ | 249,202 | | | $ | 238,272 | | | $ | 232,614 | | | $ | 231,080 | | | $ | 223,538 | |
| | | | | |
Financial Ratios | | | | | | | | | | | | | | | | | | | | |
Return on average assets | | | 1.31 | % | | | 1.32 | % | | | 1.17 | % | | | 1.39 | % | | | 1.47 | % |
Return on average equity | | | 13.28 | % | | | 13.88 | % | | | 12.48 | % | | | 14.37 | % | | | 15.23 | % |
Return on average tangible equity | | | 15.49 | % | | | 16.32 | % | | | 14.77 | % | | | 17.00 | % | | | 18.17 | % |
Average equity to average assets | | | 9.90 | % | | | 9.51 | % | | | 9.38 | % | | | 9.67 | % | | | 9.65 | % |
Net interest margin | | | 4.43 | % | | | 4.41 | % | | | 4.47 | % | | | 4.65 | % | | | 4.61 | % |
Efficiency ratio (tax equivalent) | | | 57.41 | % | | | 58.81 | % | | | 60.97 | % | | | 58.64 | % | | | 58.46 | % |
| | | | | |
Period end | | | | | | | | | | | | | | | | | | | | |
Total assets | | $ | 2,553,131 | | | $ | 2,507,450 | | | $ | 2,544,598 | | | $ | 2,460,453 | | | $ | 2,377,322 | |
Loans | | $ | 1,708,962 | | | $ | 1,655,809 | | | $ | 1,625,255 | | | $ | 1,595,262 | | | $ | 1,564,704 | |
Allowance for loan losses | | $ | 20,182 | | | $ | 20,926 | | | $ | 20,990 | | | $ | 20,691 | | | $ | 20,829 | |
Securities | | $ | 605,133 | | | $ | 611,497 | | | $ | 650,955 | | | $ | 634,620 | | | $ | 585,332 | |
Deposits | | $ | 2,023,351 | | | $ | 2,020,065 | | | $ | 1,962,748 | | | $ | 1,990,363 | | | $ | 2,005,489 | |
Core deposits | | $ | 1,473,701 | | | $ | 1,460,634 | | | $ | 1,418,313 | | | $ | 1,455,390 | | | $ | 1,478,090 | |
Shareholders’ equity | | $ | 252,347 | | | $ | 245,801 | | | $ | 232,241 | | | $ | 231,137 | | | $ | 226,242 | |
| | | | | |
Book value per share | | $ | 15.71 | | | $ | 15.32 | | | $ | 14.49 | | | $ | 14.47 | | | $ | 14.29 | |
Tangible book value per share | | $ | 13.68 | | | $ | 13.27 | | | $ | 12.44 | | | $ | 12.41 | | | $ | 12.20 | |
| | | | | |
Nonperforming assets | | | | | | | | | | | | | | | | | | | | |
Nonaccrual loans | | $ | 2,414 | | | $ | 4,101 | | | $ | 4,575 | | | $ | 5,115 | | | $ | 4,733 | |
Restructured loans | | | 1,066 | | | | 804 | | | | 1,197 | | | | 1,146 | | | | 124 | |
Personal property owned | | | — | | | | — | | | | — | | | | — | | | | — | |
Other real estate owned | | | — | | | | — | | | | — | | | | 18 | | | | 18 | |
| | | | | | | | | | | | | | | | | | | | |
Total nonperforming assets | | $ | 3,480 | | | $ | 4,905 | | | $ | 5,772 | | | $ | 6,279 | | | $ | 4,875 | |
| | | | | | | | | | | | | | | | | | | | |
Nonperforming loans to period-end loans | | | 0.20 | % | | | 0.30 | % | | | 0.36 | % | | | 0.39 | % | | | 0.31 | % |
Nonperforming assets to period-end assets | | | 0.14 | % | | | 0.20 | % | | | 0.23 | % | | | 0.26 | % | | | 0.21 | % |
Allowance for loan and lease losses to period-end loans | | | 1.18 | % | | | 1.26 | % | | | 1.29 | % | | | 1.30 | % | | | 1.33 | % |
Allowance for loan and lease losses to nonperforming loans | | | 579.94 | % | | | 426.63 | % | | | 363.65 | % | | | 330.47 | % | | | 428.84 | % |
Allowance for loan and lease losses to nonperforming assets | | | 579.94 | % | | | 426.63 | % | | | 363.65 | % | | | 329.53 | % | | | 427.26 | % |
| | | | | |
Net loan (recoveries) charge-offs | | $ | 1,694 | | | $ | 714 | | | $ | (49 | ) | | $ | 353 | | | $ | (24 | ) |
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
Columbia Banking System, Inc.
(Unaudited)
| | | | | | | | | | | | | | |
| | | Three Months Ended December 31, | | Twelve Months Ended December 31, | |
(in thousands except per share) | | 2006 | | 2005 | | 2006 | | | 2005 | |
Interest Income | | | | | | | | | | | | | | |
Loans | | $ | 33,016 | | $ | 27,320 | | $ | 123,998 | | | $ | 99,535 | |
Taxable securities | | | 4,823 | | | 4,455 | | | 20,008 | | | | 18,079 | |
Tax-exempt securities | | | 1,918 | | | 1,148 | | | 7,042 | | | | 4,452 | |
Dividends on Federal Home Loan Bank stock | | | 10 | | | — | | | 10 | | | | 56 | |
Federal funds sold and deposits with banks | | | 263 | | | 30 | | | 617 | | | | 85 | |
| | | | | | | | | | | | | | |
Total interest income | | | 40,030 | | | 32,953 | | | 151,675 | | | | 122,207 | |
| | | | |
Interest Expense | | | | | | | | | | | | | | |
Deposits | | | 12,071 | | | 8,110 | | | 40,838 | | | | 25,983 | |
Federal Home Loan Bank advances | | | 2,600 | | | 364 | | | 10,944 | | | | 3,515 | |
Long-term obligations | | | 522 | | | 443 | | | 1,992 | | | | 1,583 | |
Other borrowings | | | 87 | | | 102 | | | 138 | | | | 214 | |
| | | | | | | | | | | | | | |
Total interest expense | | | 15,280 | | | 9,019 | | | 53,912 | | | | 31,295 | |
| | | | | | | | | | | | | | |
Net Interest Income | | | 24,750 | | | 23,934 | | | 97,763 | | | | 90,912 | |
Provision for loan and lease losses | | | 950 | | | 15 | | | 2,065 | | | | 1,520 | |
| | | | | | | | | | | | | | |
Net interest income after provision for loan and lease losses | | | 23,800 | | | 23,919 | | | 95,698 | | | | 89,392 | |
| | | | |
Noninterest Income | | | | | | | | | | | | | | |
Service charges and other fees | | | 3,019 | | | 2,922 | | | 11,651 | | | | 11,310 | |
Mortgage banking | | | 55 | | | 233 | | | 288 | | | | 1,121 | |
Merchant services fees | | | 1,948 | | | 2,088 | | | 8,314 | | | | 8,480 | |
Gain on sale of investment securities, net | | | 26 | | | 6 | | | 36 | | | | 6 | |
Bank owned life insurance (“BOLI”) | | | 427 | | | 393 | | | 1,687 | | | | 1,577 | |
Other | | | 849 | | | 826 | | | 2,696 | | | | 2,292 | |
| | | | | | | | | | | | | | |
Total noninterest income | | | 6,324 | | | 6,468 | | | 24,672 | | | | 24,786 | |
| | | | |
Noninterest Expense | | | | | | | | | | | | | | |
Compensation and employee benefits | | | 9,796 | | | 9,145 | | | 38,769 | | | | 37,285 | |
Occupancy | | | 2,692 | | | 2,610 | | | 10,760 | | | | 10,107 | |
Merchant processing | | | 809 | | | 804 | | | 3,361 | | | | 3,258 | |
Advertising and promotion | | | 468 | | | 404 | | | 2,582 | | | | 1,978 | |
Data processing | | | 519 | | | 735 | | | 2,314 | | | | 2,904 | |
Legal & professional services | | | 552 | | | 914 | | | 2,099 | | | | 3,503 | |
Taxes, licenses & fees | | | 626 | | | 538 | | | 2,499 | | | | 2,018 | |
Net gain of other real estate owned | | | — | | | — | | | (11 | ) | | | (8 | ) |
Other | | | 3,098 | | | 3,121 | | | 13,761 | | | | 11,810 | |
| | | | | | | | | | | | | | |
Total noninterest expense | | | 18,560 | | | 18,271 | | | 76,134 | | | | 72,855 | |
| | | | | | | | | | | | | | |
Income before income taxes | | | 11,564 | | | 12,116 | | | 44,236 | | | | 41,323 | |
Provision for income taxes | | | 3,223 | | | 3,533 | | | 12,133 | | | | 11,692 | |
| | | | | | | | | | | | | | |
Net Income | | $ | 8,341 | | $ | 8,583 | | $ | 32,103 | | | $ | 29,631 | |
| | | | | | | | | | | | | | |
Net income per common share: | | | | | | | | | | | | | | |
Basic | | $ | 0.52 | | $ | 0.55 | | $ | 2.01 | | | $ | 1.89 | |
Diluted | | $ | 0.52 | | $ | 0.54 | | $ | 1.99 | | | $ | 1.87 | |
Dividend paid per common share | | $ | 0.15 | | $ | 0.12 | | $ | 0.57 | | | $ | 0.39 | |
Average number of common shares outstanding | | | 15,988 | | | 15,813 | | | 15,946 | | | | 15,708 | |
Average number of diluted common shares outstanding | | | 16,161 | | | 16,012 | | | 16,148 | | | | 15,885 | |
CONSOLIDATED CONDENSED BALANCE SHEETS
Columbia Banking System, Inc.
(Unaudited)
| | | | | | | | | | | | |
(in thousands) | | | | | | December 31, 2006 | | | December 31, 2005 | |
Assets | | | | | | | | | | | | |
Cash and due from banks | | | | | | $ | 76,365 | | | $ | 96,787 | |
Interest-earning deposits with banks | | | | | | | 13,979 | | | | 3,619 | |
Federal funds sold | | | | | | | 14,000 | | | | — | |
| | | | | | | | | | | | |
Total cash and cash equivalents | | | | | | | 104,344 | | | | 100,406 | |
| | | | |
Securities available for sale at fair value (amortized cost of $598,703 and $576,619 respectively) | | | | | | | 592,858 | | | | 572,355 | |
Securities held to maturity (fair value of $1,871 and $2,587 respectively) | | | | | | | 1,822 | | | | 2,524 | |
Federal Home Loan Bank stock | | | | | | | 10,453 | | | | 10,453 | |
Loans held for sale | | | | | | | 933 | | | | 1,850 | |
Loans, net of unearned income of ($2,940) and ($2,870) respectively | | | | | | | 1,708,962 | | | | 1,564,704 | |
Less: allowance for loan and lease losses | | | | | | | 20,182 | | | | 20,829 | |
| | | | | | | | | | | | |
Loans, net | | | | | | | 1,688,780 | | | | 1,543,875 | |
| | | | |
Interest receivable | | | | | | | 12,549 | | | | 11,671 | |
Premises and equipment, net | | | | | | | 44,635 | | | | 44,690 | |
Other real estate owned | | | | | | | — | | | | 18 | |
Goodwill | | | | | | | 29,723 | | | | 29,723 | |
Other assets | | | | | | | 67,034 | | | | 59,757 | |
| | | | | | | | | | | | |
Total Assets | | | | | | $ | 2,553,131 | | | $ | 2,377,322 | |
| | | | | | | | | | | | |
Liabilities and Shareholders’ Equity | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | |
Noninterest-bearing | | | | | | $ | 432,293 | | | $ | 455,838 | |
Interest-bearing | | | | | | | 1,591,058 | | | | 1,549,651 | |
| | | | | | | | | | | | |
Total deposits | | | | | | | 2,023,351 | | | | 2,005,489 | |
| | | | |
Short-term borrowing: | | | | | | | | | | | | |
Federal Home Loan Bank advances | | | | | | | 205,800 | | | | 94,400 | |
Securities sold under agreements to repurchase | | | | | | | 20,000 | | | | — | |
Other borrowings | | | | | | | 198 | | | | 2,572 | |
| | | | | | | | | | | | |
Total short-term borrowing | | | | | | | 225,998 | | | | 96,972 | |
Long-term subordinated debt | | | | | | | 22,378 | | | | 22,312 | |
Other liabilities | | | | | | | 29,057 | | �� | | 26,307 | |
| | | | | | | | | | | | |
Total liabilities | | | | | | | 2,300,784 | | | | 2,151,080 | |
| | | | |
Shareholders’ equity: | | | | | | | | | | | | |
Preferred stock (no par value) | | | | | | | | | | | | |
Authorized, 2 million shares; none outstanding | | | | | | | | | | | | |
| | | | |
| | | December 31,
2006 | | December 31,
2005 | | | | | | |
Common stock (no par value) | | | | | | | | | | | | |
Authorized shares | | 63,034 | | 63,034 | | | | | | | | |
Issued and outstanding | | 16,060 | | 15,831 | | | 166,763 | | | | 162,973 | |
Retained earnings | | | | | | | 89,037 | | | | 66,051 | |
Accumulated other comprehensive income | | | | | | | (3,453 | ) | | | (2,782 | ) |
| | | | | | | | | | | | |
Total shareholders’ equity | | | | | | | 252,347 | | | | 226,242 | |
| | | | | | | | | | | | |
Total Liabilities and Shareholders’ Equity | | | | | | $ | 2,553,131 | | | $ | 2,377,322 | |
| | | | | | | | | | | | |
