COLB - Earnings call transcript Q1 2018 | Columbia Banking System, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Columbia Banking System's First Quarter 2018 Earnings Release Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Hadley Robbins, President and Chief Executive Officer of Columbia Banking System.

Hadley Robbins

Thank you, Emily. thank review joining results. our and call on everyone, we as first afternoon, you us for today's Good quarter XXXX supplement on slide earnings the our well To our as presentation release website our as available at columbiabank.com. are discussion, of net share we and $X.XX. million income today, earnings $XX Earlier reported per of

expenses hard in quarter impacted it customers and with quarter I'm by pleased take these end first nearing moment noisy to implementation of bankers higher integration the all together. our to Reported work Continental tax and as X quarter. were targeted tireless with organizations that thank and inclusion earnings results. the expected, acquisition-related loan report The continued $X.XX. items achieve our As of saves a and reform, to for commitment of by we full these our wanted Pacific is cost the their Pacific conclusion, taxes, share brought was reduced losses. our to core conversion, tracking provision we're Continental's system a per of to earnings their I Net X second for by

conversion look moving normalized quality forward and us, the towards high behind earnings focusing to on With operations growth. systems we

roles merger number into move a to leadership of since attributes time Continental our strategic progress continue quality members across for we with us companies of One together, that our is combined Continental, make made team new of of broader our of of an came the have the short the initiatives. Pacific their many Pacific appealing organization. had the already some Along the against amount merger people. we In

digital system banking improving launched banking gain serve deeper mobile place we We at aimed our better experience. for online The a our new clients. insights platform product the in platform us put set. our year, consumer new how that and into can help enhances management. relationship Over we implemented We will technology a past new clients'

campaigns for and PXP removes digital marketing the a across makes product our our a will outbound payment year, exemplify These that and improve of easier and projects experience and the life that our technology all which We also banking important for initiatives the development just digital our that gives for segments. people. employees. new us commitment application exploring communications for implementing capabilities, clients to businesses, are complexity, and we launched programs In improve our broaden set of handful customer clients' our launch automation, sales digital capacity training expand for our our onboarding coming

On the our call will Operating performance; activity credit details Officer, with me who who about Financial Chief earnings Officer on today providing conclude information. I'll brief a are quality Chief our by McDonald, our conditions. provide update Chief Clint and Credit Andy Stein, will business review and Officer, loan our and

factors. Following are our be that It's and important economic I your other remind to which prepared today, subject we'll comments, we'll be that forward-looking questions. statements happy making to you answer

point, and filings, statements, and For a Form to refer call particular, XX-K. uncertainties in of with our Clint. At associated the XXXX securities to full to I'd return forward-looking discussion risks our the like please the this SEC

Clint Stein

everyone. afternoon, Good

Pacific November quarter earnings $XX Continental quarter million comparisons $X.XX mentioned, diluted quarter of reported share. close common very X As of our to or we due per Hadley first acquisition. this Linked difficult are the

the legislation. had expense an the higher from reported from impacted acquisition-related quarter the prior expense million which of following the of charge prior costs EPS is $X.XX were our provision This reported the significant remeasurement for million, in included of tax which reform $X.X acquisition up $X.XX. deferred Again, the quarter, the tax $X.X quarter's earnings that of expense items and much reported reduced impact the by improved prior tax, nearly additional performance provision passage and million and Net $X.X expenses asset quarter quarter. of was acquisition-related over

fourth Given our to of Continental's the full a benchmark the the results. improved quarter performance noise the XXXX, in is Pacific in better last inclusion our quarter, prior for third quarter assessing

Our operating the first $XX.X million $XXX,XXX. million quarter decrease a an the quarter roughly of or prior in was XXXX. $XX.X achieved pre-provision Reported quarter of current noninterest quarter we results XXXX third of of XX%, the $XX.X pre-tax of million is million, from increase $XX.X in from the income

card release, fees and as a result quarter. It's of $XXX,XXX income encouraging for Meanwhile, deposit will new help to the we recognition the the and As from nice of up treasury of in reduce loan sting implementation line expense reduced account, the $X.X earnings we standard, million of revenue revenue, grow, decline stems saw noninterest required item. we to net stated the the see in it interchange management Durbin the receive revenue which $XXX,XXX, through in respectively the us to increases will income which amendment. continue were the

As effective the for a reminder, for was estimate $XX roughly million $XX quarter, $XXX,XXX current the quarter on an impact be July per We the interchange X. million quarter. the become us $X.X or Reported annually. million lower prior increase to expense rates of from pre-tax noninterest

$X in be by to the first was the you can for comprised are to employees minimum combination of of of of a of $X.X provide higher quarter in line to processing, $XXX,XXX the quarter and legal deposit the up intangibles the of to with $X.X the previously the I in million extra merit advertising, Salary and to quarter increase for benefits from was Pacific represented and removing However, XXXX due $X.X $X.X million the due primarily were were employee an of an give expense due related increase of million $X.X expense, $X.X is benefit core contributions. quarter the due shareholder attempt a amortization in increase items: of additional $X.X million The annual expense. annual sponsorships to professional, Continental month reset sheet number million; substantial Federal in $X.X increase prior for a and bonus increases Continental's $X.X $XXX,XXX a that limits expenses in liabilities month during group wages off-balance evaluated expense of $XXX,XXX; February for and quarter. of intangibles. of to An increase to $XXX,XXX $XXX,XXX. After extra to pay-outs, current of reasons million. mainly of Other incentives. comparing of the XXX(k) the $XXX,XXX; $XX, expenses our million other insurance comparisons. $XXX,XXX; expense expenses, in in associated acquisition-related provision the misleading. hourly million, increase payment Pacific expenses expense and taxes million compensation I accounted and effects details will acquisition-related meaningful Compensation, million, and higher data occupancy, Last, million; some following stated, fourth $X.X of noninterest the amortization by

core cost end During the six we savings. branches. $XX our implemented system as the the To in implemented implemented an we or have about occurred quarter, million of and consolidated conversion date, expected additional $XX.X of XX% we savings million $X $X at current quarter in million period from the the completed expected of Most acquisition. annualized million the

go days the quieter rate. to settle still expect to into this days our expense will second quarter, forward to last be another than XXX take it quarter run we XX While us

the term precise rate you providing As such, near is with run very difficult.

to short-term estimate. is purposes, mid-XXXs modelling prior periods, our to or ways look approach over of ratio ratio long-term discussed Either and it. the the quarter's call. Similar last you continue mid-XXXs expense on expect we a the to expense in the in improve expense a post-acquisition I'll that the to couple XXs for target I run time see different give So, an at of rate an low reasonable

points. net points margin day The a of in operating first lowered was change impact and for by margin Pacific X.XX%, the X.XX% points. two The X.XX%. XX% portfolio impact XX% production coupon of was Our X lower points; the seven count of additional these was the rate rate mix modest would full factors, an was adjusted for basis basis margin the tax and loan by quarter. quarterly quarter; tax have decreased fixed, reduced quarter margin X the Absent basis variable. rate The new basis the from our shown expansion the production Continental by basis of the interest the quarter floating seven margin decline the the points, XX% it's operating prior average and

lag mix in variable the decline of the in upward our and loans average and hold a The NIM feel deposits, our balances. well historically in in deposit quarter typical will base the of the of deposit repricing pattern has seasonal coming we in Given year. up portfolio, resulted first rate floating

Continental, linked Pacific comparison. fourth the are quarter a average With of meaningful not close mid corporate balances

of we quarter, of average legacy X.X% XXXX, XX.X% average $XXX a common equity would acquisition-related had return and Their $X.X on deposits Our activities. been roughly return to that expenses, of Continental tangible conversion to XX.X%. equity this assets this return acquisitions X.XX%, was noise $XX million on spite of in evolved on year-end have Columbia. departure period down of end had or and a equity not on equity X achieved the clients all tangible and Pacific needs assets, planned decline Pacific million X.X% and was capabilities average beyond that related the were and Continental average who Prior return the X.XX%, from million cantered In of respectively.

for effective the Our was rate tax quarter. XX%

in the with the in Under rate we associated range full rate year to corporate due tax for a structure, lower rate tax first new than expect part XX% the effective vesting of of rate of XX%. during year tax year tax to the equity full quarter awards. the benefit the typically the the Our is

turn Andy to review and Now performance. over our loan I'll activity credit the call to

Andy McDonald

Clint. Thanks,

in seasonal from activity production start a first Loan is of the $XX increase our quarter million we first quarter $XXX is XXXX. which of As the million, year, the pattern evident. loan was

the typically is low quarter for new First point production.

expect and line of the in the finally the utilization past. turned, We activity pattern has seasonal levels pattern seasonal with of will consistent and begin increasing third have The second quarters. activity in see throughout our stronger of unfold to the weather should loan year experienced ag so rest the we the

forward from forward. members look Continental our from production new synergies team to also Pacific We going

granular over loans. million in Term million. estate was construction roughly about accounted $X and was C&I was production more XX% in new production the $X of cantered $XX total X% loans represented for The commercial under $X terms was new of new while $XXX lines New size; was in of to of of new million. $X million real quarter production, million, XX% in predominantly range and million, and production mix the

real during million of geography, Oregon of first decline was decreased $XX X.X% $XX portfolio. estate generated the Washington, production in to quarter, X% was owner-occupied the balances and related the real our terms in million new quarter at commercial $X.X in from up previous in Loan principally quarter. or commercial and estate ended loans XX% C&I the was about billion, In Idaho. by XX%

to it unchanged to to book, essentially We and production around quarter or $XX New with generally contracted $XXX and the the down X.X%. real Line see quarter. first utilization line the Industry was quarter, quarter and X%. at bounces from in loans this between nature the billion, back contracted highest municipal. last quarter Similarly, manufacturing versus quarter about was X% compared loan XX% contract the million dental ended $XXX seasonal XX.X%. portfolio. quarter. it picks in Ag, segments last representing million ag the forest typically growth and the million $XX fish media, $X.X estate year, XX% the during net and wholesalers, utilization the the second telecommunications million C&I up, Commercial first XX.X% portfolio of XX% included during the at

estate Property of the the saw before, being declined were along of and as we real quarter the acquisition that was were office the businesses manufacturing. and paid most associated along Much off million. with As I with category and growth during our sold mentioned decline owner-occupied this sold being residential, owner-occupied development the where loans, results $XX drove them. types balances

are institutional We multifamily or have mortgages, to the and Commercial construction highest an not credit activity, union quarter. willing loans from which and and warehouses the this million million, in at uptick of also a in offer prior we nonrecourse was credit from multifamily both category many them The healthcare. perspective, offer. and seen long-term as $XX up ended $XXX by growth X.X% followed quarter ALCO

is for a $XXX,XXX recorded This combined a the portfolios, The an from impairment our for portfolios. X side, credit million the out provision PCI by included loan from which $XXX,XXX, Pacific the the into provisions and the million we million provision The $X.X provision of migration the were compared $X.X of and Migration the the one the about prior and impairment quarter. of the release for credits. Pacific portfolio, to $X and for agricultural Coast portfolio a to accounted as portfolio. another allowance releases factors. provision in Continental lease about of the On of the $X and for originated of the portfolio primarily originated $X.X originated portfolio on from and million originated for allowances were losses portfolio $X.X Continental Offsetting accounted Intermountain for provision. one of million these West originated driven million

This Pacific it XXXX. was Embedded allowance ratio in million to impacted there loans as fair was XX, West is compared Continental by X.XX% acquired X.XX% March valuations the approximately acquisitions associated Intermountain and our discount, last as is with million of loans to Coast, as total of those is XX, quarter, of of X.XX% As value. and our at March approximately Pacific those $XX Continental were and $XX portfolio. XXXX,

portfolio $XX.X nonperforming was assets up XX stress non-performing Again, the the the our portfolio. asset ratio were in to XX in decrease other offset points, commercial due by increased assets real estate to a increased increase partially million; The total points. from in and primarily For nonperforming owned. quarter, to basis the agricultural increase additional in basis assets largely

points. NPAs I'd give to our drops XX point, a to more you portfolio. little like loans colour As to concerning without a basis ag the reference ag assets

and we of the total is about business loans, ag a areas see XX, in ag-related stress million. $XXX March $XXX and where commercial ag most real $XXX of million cattle As had loans in commercial we million The in related for portfolio potatoes. estate

or Our with classified. criticized $XXX XX% is cattle million, approximately portfolio of it

ag down almost quite The rest only performing classified. X% is $XX nicely classified. with of of million, portfolio to portfolio potato it is and the Our or criticized all currently or criticized is

lows, few is credit So, portfolio, metrics historical their pockets outside while pleased our of our how remain with off we portfolio ag performing. have moved in the a

turn call over Hadley. So, I will now to the

Hadley Robbins

We than continuing Andy. change faster migration. expect economy, is Thanks, this the grow Northwest XXXX. to national during will steady not do that in

upward to However, clouds on there a wage is and few pressure of on continues are tighten gathering rates. the availability horizon; putting labour

Northwest. in exports were the place buys unlikely, who it If something point, partners, especially cost closely. of that the economic a and important will accounts products X increase tariffs Yet war rely just for develop, steel on to New national is for are it make serious following would regional overall and aluminium of metals. impact trade by Northwest have these tariffs our the XX% businesses is China, from that retaliation implications it More imports. in this X.X% Northwest. all the At economy trading but to the worrisome distribute the small; put relatively we're for appears

Our is XXXX. constitutes and on the prior around our dividend XX, Consistent XX% May the XX% by of our on a our of pay-out afternoon. It share of based X, a stock this over paid dividend commitments of the XXXX. that first of prepared business of increase April previously have concludes quarter. quarter comments for our This shareholders of reform, on the we record appropriate amount be taxes. generated with as yield XX, May This closing close to on will X.XX% dividend on ratio XXXX, price quarter of burdens, pay-out increased tax our in would the utilization reflect remitted an to and been $X.XX the prior tax lower per an capital common dividend

here As for Emily to Clint me Andy now answer And are a your with will open questions. the and call reminder, questions.

Operator

[Operator comes And the Jeff Instructions] from your Rulis. of first line question

Jeffrey Rulis

deposits Clint, detail I you that catch it of I mentioned that a in missed left $XX million that piece. didn't how

Clint Stein

and business Pacific couldn't grew, were as organizations, either. that with their needs relationships combined their we outgrown needs Continental. Pacific changed the And satisfy there Yes, two Continental just had, and even they had large

that to beyond national I or attrition be had was an They just can wasn't was some conversion that. institution. guess, departure; acquisition or to that see anything that anything they needed and what could we from it it so, related a needs like were you provide, And with difficulties much amicable an international from larger

are that through move and that our take then distributions us as partner you of year. drawn reserves deposit seasonality out are of what seen build tax down made if So, and of in it and million, cash $XXX the with pulls then into as in payments line base the we are made we've back typically terms some

Jeffrey Rulis

know And of right. moving I then on lot All pieces. Look, a is the expenses. there

sort a the the for maybe merger there of of, balance just provide the maybe low say, of a take that, guess that cost guess, I'm that's we not there. hesitation to reference on guess simple. detail XXs, some the if in quarterly just year balance a is wise, You I I the year, I interested XX the sub-XX or basis timing But less over

Clint Stein

are pieces. several about variables. think There moving lot And of can I a different

significant withholdings if expensed talked and seasonal like just there us is of of and of so tax. remarks part take because of We automation elevated then the systems in at the first out gets things fairly of lot bit we Hadley you in things start for a taken all prepared their customer the the number, and strategic those expense about that incentive upfront. the relationship marketing call, that cloud-based, and expense they in a most the the a an and quarter. and our And I go that are the my creates XXX(k) about sizable acquisition So, had ahead expense out payroll folks that increase mentioned, had of have think XXX(k) payments,

expense you investments would If and sensing. would to delivery that quarter-to-quarter expect and everything is see channels, look just drift we what make you think at that from the have to continue some rate and some little down provide, so didn't long-term I can absolute mid-XXXs gets is for so, difficulty have course, of there the get that we what to the trying sheet, growth our out it the And you digital I in is with actually balance that on about of that our an that's as that's that lumpiness at with variability, implied so The occur. expense capabilities figure of an to where a hesitation customer state and steady starting number back are was versus difficult of target what ratio to might ratio. the

and last did the couple of was just implemented, that's conversion is the the last $X consolidations literally, quarter occurred cases, or of days some week savings weeks sensing, the of of those of quarter branch So or timing mid-March, the right the because X time of we moving in the you additional hesitation that then a pieces. the of at had cost of And the the conversion the all are million the conversion. we within

lot we that And our into didn't really of get so, a run rate.

would And going hit so, potential liability the about We reserve million. this million than $X.X we sheet was noninterest quarter that $X.X per higher had you was forward. think provision quarter the expense; that is and that have of there what typically off-balance reduction

other expense always easily that quarter or from pop dissipate, cut then at that things that a up, end. million pretty number there could off we're million that were just of an us create the headwinds is standpoint that for $X move when things quarter of $X looking could lot there this could is So, but

Jeffrey Rulis

sounds is sounds in the [indiscernible]. you trend lot like like rear-view; lower, but That Okay. positive, a the said,

Operator

comes Clark. question from Matthew of line next the Your

Matthew Clark

of that The do portfolio cattle outs potato what's talk really think just not the or On there like driving in of the you criticized, the credit, that's better and guess what's Andy, cattle about I Do ag? issues deteriorating, classified in portfolio. could piece maybe ins the some feel is the going XX% you of risk portfolio? on the of is you

Andy McDonald

ground market get down, are were they And became forecasted similar and since more such the amount decline, erode. poor these continued for are cost less cases individuals, to as worse, did Things that really to less potato We equity XXXX any are that portfolio, favourable, Sure. Inventories moderated. the were years multiple of year each less. production can't that expect of a lost you for whole cattle our up and actually potato has to of and they classified. number much investing production guys. prices so and criticized, where not the is thing for of into the pretty looking became had positive margin amount prices the And succeeding portfolio the

out on that the and takes much So we production feedlots the that what and that for as cattle that calf based not herd it's not number, expectations also is Within do at in cattle what we're care operations, folks of When also the prices look as own believe we volatile cow, it. seeing cow, pretty are. counts and just calf XXXX that, exposure that guys. portfolio, has all there bottomed are

So, getting nonperforming would to from resolution will not don't the that assets. this issues sense I that quickly we those point. is standpoint, quick we have expect the asset say so be though resolved, low I a portfolio of and that the within do

will trail I XXXX. those into think

Matthew Clark

Okay. aside you total want to portfolio have the isolate set And for I that guess you in ag the unless it. reserve

Andy McDonald

We reserve. with specific don't portfolio the isolate a ag

So, be of our it part would reserve. business commercial

Matthew Clark

expense-to-asset then to maybe just ratio I the correctly, Got I short getting heard that just here you it, term to And calling okay. in for is before again were sure [indiscernible] the the on longer-term? you make what mid-XXs Clint, want

Clint Stein

X yes, [indiscernible] that is I has can all timing on have we it's acquisition we'll into down expand know X past We'll third trend response the Jeff is noise long-term it quarters. in we are the to as But working trend that years. think And and still run settle at; start the that's where going just the behind the the that but play, we bringing when there of come to reasonable we expect all just down on ensuing we're and my for us. to we'll just quarter, or thinking. that's what into rate; kind noise get that

Matthew Clark

and But we low-XXs. $X.X run in I assume the is should rate. that terms million you I recurring. then Okay, sheet think say of off-balance for mean liability, had the don't you

had in the is, $X.X then increase XXX(k), million which million payroll somewhat had seasonal You and $X.X you seasonal. again, for

So, I going the that to is understanding XX quarters. the some But that down mean, it? it gets in below way. upcoming Is there other stuff think way also about not the right

Clint Stein

working If mean I a could quarter-to-quarter and that when lot marketing certainly I million They And either to quarter it's interpret next. processing get go we the just $X campaigns. it then from to expenses yes, possible correctly, are your them. in start $XXX,XXX that that completed out, just unfavourable timing and the things professional the at come that that's Hadley possibility. typically subject is question be those we go. and and to what It's and will when favourable create we're call, go a can our is I'll live stuff they on, depending to noise and alluded up these are significant. roll and on that you ready there normal comes X is expenses data with legal and back sub-XX. some of that's the But to short-term projects what different of the And

a And just is a very way different a below them come in possibly, up have because about versus everything that's X quite million it works it giving in, things number. if that where And but what that quarter you couple pop historically the favour, couple it our in. those move to XX just come it or pretty thinking yes, answer, I'm or the we of and know to of things, a can easily. timing other, we low-XXs. But in couple difficult into dial dollars and And sneak is, down up might could I other, I'm so squishy one can be of

Matthew Clark

Got And on it, quarter. in accretion okay. the just the

a Or came it think that Any from? around is to I in million. good in rate number? accelerated that lower $X.X run run payoffs

Clint Stein

or No, absolute of in terms level actually us the nothing of out that about acceleration stood that. that surprised

that's think you from. I good that So, could a number work pretty

Operator

Your of next from Aaron line the Deer. comes question

Aaron Deer

obviously, trends there fronts, is seasonal we that growth head the be on loans, favourable summer Just should terms in more into the curious, some of as helping months.

the year point? in stands full in and terms thoughts What the out mid-single-digit look might that you full knowing or growth little are kind where are of of or rate this your today, we at still pipeline come you to see lighter? the As a thinking the year, for accelerate

Clint Stein

achievable. think that I Yes, are mid-single digits

we've Some union the few in in competition and of his terms a in some prepared the are the things of We quarter that see of credit in talked about prior quarters, competition Andy as structure. comments had and first didn't headwinds. fierce There the here.

we've been sheet. that than it's balance or number a higher larger where mid-single-digit just First

it's the our still. necessarily we reality market are headwinds that stand us, means the bad things, demographics just but attractiveness a the production see, bigger of and for that So not of to they're The number customers. of with combined a they're

space isn't that's new, anything about of in is customers loan that them. typically our happen. that interest up a occurs. some of when talked That the this and lot pick a wealth of from when have point are have on our midsized over management it we note, impacts businesses a we acquire that the and years lot But getting positive to ready come in lot a a in there have is businesses, and totals national we've to our sell, where We that they're companies

warehouse some of first of were with quarter. tailwinds were anyway, the where the we our balance second other And rates. So, that the in up in past those commitments have between lines, our timing quarter; first the just of the there increase utilization sheet just like of and have of those us as that in quarters things for We it couple the then picks and then some Those line see impact components ag full. declined is when quarter can composition the that the seasonality. timing

So, think last to look that in it's next, growth in we is variables, couple at quarter have terms and of definitely we we lot a achieved, that. X if the where of of organic it's just be years, still could lumpiness some the that but possible, there

Aaron Deer

out Okay, know Clint, you But of stability marketplace, drivers some because the I side deposit in obviously some are such existing but deposits helpful. on the kind deposit margin have I in that particularly, trends guys base said pressures at what at just there deposit some point. expecting unusual you've guess was this of kind your are where you of priced? you there, you that's at just terms a underlying When then look seeing that great this And on looking quarter. are

Clint Stein

We leading to footprint our pockets meeting, saw competitors certain in we some March tiers markets. saw money of Fed across increasing the up just

a had that quarter to we So, we we we fed's little as we there. a start would that, then close then has of last in and see see few getting since bit were of And same we previously. been our seen minor to of see just had movement. did haven't rates develop. time changes country felt and hasn't parts that that some pressure around activity and to really the quiet, I start Northwest where did of well, pretty the other felt we it We in some of movement, And much made that the the the think like talked

after of bit it on of entire activity pricing. we little that those pickup with relationship. then. through been at and depending second and case-by-case was since right pretty look a half that requests busy the a the terms for seen a movement, March of have say basis that quiet But fed it's I'd of And really the on in We type exception

Operator

Your Bohlen. next Jackie comes the of line question from

Jackie Bohlen

item Clint, what was there impacted by an income? the up expense in line in was was that netted revenue noninterest card

Clint Stein

presentation report income Yes, it haven't geography came at moving yes, item it just just where purposes. that and line expense terms my to But simply was memory. that net for committed an was just to I'm simply it up wasn't of in from to here additional from, expense because I to see it to look it trying

Jackie Bohlen

there was production double in driver commitment I was of I reserve Or expense. purely wanted figured, from unusually just the to unvetted I know it that? high. Okay. that the a that, sort check. And related $X.X to million just any quarter? Was

Andy McDonald

Yes.

of rates. pool in So, the was a slight uptick there loss some

bit there loss that the overall than of terms and model rates expansion, of that areas commitments were in in terms higher of is had the areas a little So, complexity had others. we unfunded

Now XXXX, those lot to back go XXXX, a losses XXXX. of

lot as nevertheless, credit did model model experiencing was what they're of so it math into that that but really It's produce line fact get behind credit there, almost the of not a the a it. today. the So, didn't we're driver of But is we line much as we and baked the usage. lot of

Jackie Bohlen

have Okay. And that prospective any [that forward? about Andy, the that pools, what impact you on does were seeing expense going

Andy McDonald

No, going I the so. in don't and utilization We're second see quarters. third in think to uptick an

so And that will area other. the transfer to essentially one from provision

area, one in what modelling a standpoint, gain I So, you lose another. from in you might guess

Jackie Bohlen

behaviour and portfolio Does that with impact in the And on any look understanding the understood. and really the that? cattle forward backs economy charge-offs the what net terms in your associated requirements provisioning of all happened. your there that been haven't And in view quarter. just and potato of No,

Andy McDonald

you afoot. there out favour, an baked rather If That, work in rather game would be certainly, does not large wouldn't in. Well, then our already any took that impairment, allowance significant have a a we is it's implications we one. if obviously charge-off will, but because still

in feel have exposures today balance the the sheet. terms we on that comfortable of fairly we're we and sitting So, where

Jackie Bohlen

Okay.

So and the the say your economic of reserve reserve that's any impact to requirements methodology, to are change that's impacted portfolio about that impact in today, XQ, view not your likely agricultural have into may how thinking you XQ?

Andy McDonald

That's correct.

Operator

[Operator And next your the Instructions] Arfstrom. line from question of comes Jon

Jon Arfstrom

It's Jon Arfstrom.

say Just these one a credits that cure number asset are nonperforming The of you there? that to you say on there you ones How would potential smaller credit. are or granular in Are short the bigger the would credits? any follow-up have. totals have

Andy McDonald

about in it granular. credits. Well, X $XX we've After pretty got gets million that,

Jon Arfstrom

And those they are X credits ag they? are what real estate it. Okay, or are, are got or they

Andy McDonald

They are majority, ag. about loans. commercial X/X, business is all The

Jon Arfstrom

like the curious production Pacific done loans the of you maybe potential acquisition. loss and That doing synergies the feel give you've of aside deposits? update there? us it. you on deposit made you how I'm me. got then the from do about that and helps disclosure are Okay, you just some from on Continental talked retention the And on an Hadley, And how

Hadley Robbins

I can Yes, respond to that, Jeff.

during There I occurs that behind always that had we in of data have. well friction think combining think right areas but And conversions, stabilizing in and us respect consolidating the we and are some the I is gone this has to at that we think way the conversion clients point. GLs friction, that's pointed I overall, yet, branches. with and base

Continental at been and very and the reaching talking time employees. people out that think Pacific clients with active we've with impressed clients the I our very both. employees And in and spending to

like aligned good had, We've there. that headed the and the that were date I employees well clients. model to way also attrition And the so, we've feel key we for think in a going. accounted thought we're right key retaining done job The in it's we've we I and that I where think our with

feel I with we're where So, going. very comfortable

Operator

there no web. no are audio over And I'm the questions. further showing And questions

Hadley Robbins

Bye-bye. Well you, That call Okay. our for concludes everyone. today. thank

Operator

our to all our you webcast us We informative. you today. webcast. this Thank presentation joining concludes hope for of found This participants

may great disconnect. a You now day. Have

Columbia Banking System (COLB) 28 Apr 182018 Q1 Earnings call transcript