COLB - Earnings call transcript Q1 2019 | Columbia Banking System, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Columbia Banking System First Quarter 2019 Earnings Release Presentation. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session through both the telephone and the web. Instructions will be given at that time. Instructions]. [Operator

Officer the the recorded. host, call President Chief reminder, like would Hadley is System. and turn Banking to over Executive conference a I being now Robbins, As Columbia of to our

Hadley Robbins

We Thank available you, thank joining which a first on and had us The released our supplemental everyone, at before call presentation review opened XXXX a you earnings quarter. this to morning. for first today's quarter Good Natalie. morning, columbiabank.com. and results, are the slide strong market release

As many pattern of you have a know, to seasonal we our performance.

stable of typically during total was and funding provide managed. our The production building First was our quarter deposits remains pleased us low-cost were positive our very across year. a which with new is base well with cost deposit and momentum continues cost see weakest deposit advantage. basis core mix the XX first Loan We're quarter footprint. points, to important results our The an of record.

Our regulatory exercise for above in navigating the stream, to credit cycle. have portfolio of is number in funding coupled well economic is special and business. well-positioned healthy, our we Total capital share deploying dividends, repurchases, and the profile capital, dividends, dependable the when flexibility with growth, earnings loan alternatives including organic a targets, our remains ordinary and investing

today will digital production Chief McDonald, investments; quality of will repurchase Chief the of Sigrist, who our Credit Chief review our status our Greg Financial plan; me information. credit our our our will our are and earnings review highlight Andy and performance about our with provide an who Officer, Clint call Operating details the overview Officer, who activity On and Officer, of Stein, share some

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

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

Greg Sigrist

everyone. Thank you, good and Hadley, morning,

earnings XXXX the increase quarter compared quarter of an was million of EPS quarter to from fourth an share XXXX. of $X.XX increase and the First $X.XX per $XX.X and first diluted

First second quarter was net in the our quarterly best income performance earnings history.

The NIM annualized up margin positions due earnings prior the During total of earnings acquisition XXX(k) and XXXX headwind an has feel in the linked-quarter the employer an a the We to and million bottom-line non-interest decline. increased to rates in in a decreased mostly end impact employee of increase and timing items on rates. to results, modest asset by had trade-off to occurred our Compensation as contribution reset. taxes quarter, subject interest will is eventual in was the funding. offset the After see effect cost a expense benefit discretionary quarters. rate differences. the by our should impact due employer that to is The on growth payroll was decline did rates. we but part modest us better near $X.X performance seasonal basis. falling deposit exposure basis and net prudent to to of rates mitigate removing protects a quarter, X% as approach our large essentially X.XX% quarter, sensitivity and strategy first interest was positive reducing caps increased to overall, expense to operating loans late of so asset flat the an expect quarters, subsequent long-term in yields increase rate our and discussed shift a uptick In previous the from Much we December in improved

first of the basis. in that incurred million million $XXX,XXX $X.X expense of the we was initiatives. a or In on XXXX, quarter year-over-year quarter, up cost non-interest expenses our roughly first of acquisition $X directly X.X% is Excluding to digital related

We million hitting As do XXXX, appropriate operating we run provide quarters, digital visibility between somewhere expenses be $X the some you the will of between directly. expect that more the balance of rather though invest digital with million our investments. to the over discern projects coming to than rate will impact initiatives in expense $XX come online and our in of and capitalized

the So advance. impact expense in it you is difficult quarterly to tell

our the ongoing We approach management. expect the continue expense through with to from We year higher in past have investment disciplined asset Increases our are in in directly franchise long-standing our non-interest commitment production related expense our mid-XXs. base levels. continued balanced operations expense a to we appropriately and over the believe to

Our range was prior XX% XX% first would rate effective which the and for in the we down the tax for is XX%. from is quarter, quarter a full-year, is modestly to which expect

seen have do to approved XXXX is SEC to our Board shareholders that up We it may you so. Form share intend plan XX-K, our and to buyback the the share our advantageous company buybacks into X.X when authorizes mentioned, our strategy shares. Hadley million to in incorporate repurchase do As to capital

of shares Our forward. ability to sense would our it also special buy dividend back impact makes level when the going

Clint. to additional us. would over like have management At turn very call tool this capital to pleased this are point, We to the I available to

Clint Stein

Thank in Good markets. all major as morning, in recruiting our experienced our highly history, retaining as successful Throughout well been our you, of bankers talent Greg. everyone. top-performing we've

quarters, and non-interest-bearing certainly products. be had Deposits of continue with to opportunity differentiating our activities. results to our the Over in XX% the the last their of more new one are depth strengths, bringing several add seeing team, by onto we've we bankers

points. experienced $XXX cost deposit is of typical average seasonality quarter. demand just basis XX with We total million Our our declining during the deposits

down prior period-end quarter years, million with $XX rebounded consistent were balances However, end. at and only

a relationships, pipeline prospective stated earnings doing an our nice in business. As new of of outstanding resulting the in winning I release, are bankers job deposit

average to line seasonal in it selectively for quarter was and lower Prepayments some X.XX%. which XX% administration remaining production in quarter last new rates continued point on to first chose our It's loan loans elevated production satisfaction. of spring quarter at from historical this generated year. activity public over the the Oregon; end. coupon were a $XXX for to best priced line adjusted Term pipeline is $XXX million. call production The is balanced million loan Average tax quarterly Production record. XX% their utilization quarters were line loans production levels rate As lows loan mix and resulting other $X.X in was remains worth is as quarter Hadley but four and at be terms in experience. quarter in first were states. to rate the credit while was It We remaining profiles. of Idaho; tends loan new $XXX lines new loan quarter had of portfolio too to first that, XX% due coupon late their with in normalized mentioned, a payoff competitively the in with With has historically, of we for trend, fund this for new production, geography, XXXX. prepayments our moderate the year, X% billion, our The their the mentioning low was on in represented accounted production million, early new our very to respect in production in Washington; that of size. to

and spread especially portfolio and health multifamily growth condo, pleased in The million utilization. announced of these Overall, nearby our with During and seasonal the $XXX the delay continue consistent hospitality to the banking real C&I the in up basis, our multifamily, line percentage retail, branches: and and quarter, loans, with are combination uptick three production branch warehouse, million area. or in to strongest recently given on $X.X channel. $XX care was weather-related to total growth intend through clients public, the the first of with quarters. two consolidation is Metro the million new We the We The we C&I XX% of sectors. sectors. which, and one digital Western prior the areas facilities the in was provide loans Portland services across our to billion, growth $XX Washington grew production, of were estate production. million on a in in Commercial $XXX by

for We place have in markets, and network closure decisions reviewing disciplined branch that our these an result a process. of process and and ongoing were

and at insight be introducing Over the and impact performance, on manner, focused for because we success via see disciplined strengthening rates in our products. and transfer for digital starting overall of the production, resolving expand past the we record a initiatives. our our and the purposefully XXXX, improving capabilities all new few is foundation in to given balancing In call to moving winning we will our new and digital we financial their speed operations. vision. adoption on platforms also digital mentioned positive some our XXXX maturity We're have internal business our earnings you our are have business investments In part, from clients We're performance. increased on this and functionality transfer-now quarters, the some Zelle into

example, new consumer currently. growth has deposit XXXX, product, solutions of the from XX% our annual in X% to July For seen banking before online mobile online go brought

In to have the way new the summary, over we've all cylinders than the with quarter fourth an a paired digital cross-line hitting our getting XX,XXX New then, of relationship all improved increased XX%. risen capacity we out the and from client created on provide relationships deepen client increased per X,XXX old helping bank been referral online and hiring, Since new rolled less right banking selective we've our of in activities users across major through our experience. as and users platform by year. bankers; markets. management the In have customer bankers with platforms XXXX, annually referrals

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

Andy McDonald

Thanks, Clint.

release the portfolio essentially migration provisions was $X.X were quarter the for provision unchanged. rates lease provision million This West $X.X million included Continental, of a portfolio, the originated minimal, to principally charge-offs the and $XXX,XXX favorably and for for to was losses the Pacific loan Intermountain Problem quarter. of first $X.X prior loan growth. and for in from and these Our Offsetting of The provisions lesser driven quarter $XX,XXX. loan Coast. for loss net was by million $XXX,XXX a compared extent,

As of total our XXXX, to allowance loans also essentially was March XX, unchanged.

like West with that $XX is Coast that with associated value. approximately fair approximately portfolio, the Pacific $XX acquisition portfolio. always, is million associated net impacted to by folks valuations is those in portfolio, Intermountain loans at $X million remind Embedded Continental million recorded discount, this the $X ratio of the and which our with we for and were As million

and originated charge-offs fairly Continental were all granular concentrations. quarter. the loans relatively in Pacific the or nonperforming stable a drove much remain While and issues net the loans. charge-offs same. were the these past centered they remained metrics, quarter, it with In business our were of centered no for commercial The allowance summary, dues, industry essentially portfolios. problem systemic Across charge-offs modest and in all loans portfolios, was nice Pretty

with Hadley. longest and economic recoveries we we are while the are call will So must the that, With that fact cognizant one we turn the we back pleased in the remain now to history portfolio, such, performance the well of as into remain of diligent. I obviously of

Hadley Robbins

based dividend We're $X.XX pleased payout a XXXX. stock dividend dividend for XX% which yield ratio April the of of of of regularly special quarter XX, of $X.XX, quarter a together Andy. the constitute on X.XX% announce closing and price our Thanks, our on to and

your volunteering out, states recognizing nearly Natalie, comments quarter's for and commitment XXXX. call. a Greg, paid commitments X, May of questions. root employees' a at week in shareholders This to be as serve, Columbia annual are all Bank's our I'd communities all concludes to close source prepared like of afternoon. now, record Community here This Clint XX course, business three and of Commitment different employees will and we heritage are our to May the Melanie by this of Dressel on XX the end is of And organizations. Columbia at all across on Week, this is dividend the This as Andy open answer reminder, we'll And pride our the our bankers. of

Operator

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

Your open. is line

Jeff Rulis

call the new new the time. think I time, early call

Hadley Robbins

So are we.

Jeff Rulis

Okay

Hadley Robbins

we. are So

I I Greg, wanted on the up digital appreciate follow So side. the detail the to spend. expense on

what remainder You said the 'XX, again? for figure that was

Greg Sigrist

vendors, total in $XX to negotiating million the the of drop still -- But $X another capitalized XXXX. processes expecting will is not so line and level. get some We're figuring as but in that well, our the of all to will investment chartering, investment that we governance million bottom going Jeff, with again, internal that are through as of

Jeff Rulis

would that, QX maybe indicative? in appropriate earmarked, quarter, tough will be some to just said fall Is was that's lumpy the were be percentage offsets? going and I or maybe I was bottom-line, $XXX,XXX there what So guess, Or the the you to this but is a that -- to item? that mean, say, of,

Greg Sigrist

think expect million, fair that of I I $XX chunk a would the of XXXX, the Well, to million hit that for balance will bottom-line. $X

you So partners going This I three start who to those of go us a about to think quarters. to really and partners -- the is our XX% our on that. over quarters, time bottom-line through until quarter the it. governance hit to probably between to be I'm work with to over and get thinking will really it's contracts internal more can lumpy take the granularity XX% next for with really going Jeff, going But a way bit And somewhere in it's start is -- until really before we done to long-term we've be. hone are it's the

Jeff Rulis

Got it.

the to be I'm trying quarter a to could $X rest -- million So of the do for the math, million $X just the this year.

increase meaningfully going that's to So quarter? $XXX,XXX from this

Greg Sigrist

we've I Yes. And the up balance it we're think this for platform. about the before, through of the next we're we're both we time the at start terms I this paying do benefits platform, go I to to flow existing digital expect $XXX,XXX year. now, going as the and see it versus the the some over as of the into quarter, for get of of we the talked in in platforms, year, same this, right -- investing new to mean,

to year just see So and benefits going direct the then benefits that well. to migration of of the more we're start as some next

Clint Stein

going I'll when we think of hit. to you said through that's one when going is have expense add those lumpy, items hit it's acquisition, it's acquisition that to this Clint. to just the and and nail I just Jeff, head the similar you on be to go we be an

idea, have we we get and forecast until there. actually We an it

on others investments making these that sure is we and to end up we what really run is want our So then what focus lumpiness what and rate digital that with provide operating you by being. created

Hadley Robbins

a at quarter a that do We'll time.

Jeff Rulis

million. the said, mid-$XX gave you guidance you the Like Yes. us on

So that's baked into the guidance there?

Greg Sigrist

mid-XXs, again, operating Well, run rate. we'd really say the our it's

about being digital to I incremental think think you should that.

and to focus our rate, I and think try on we're basis, give Hadley's going you I give -- point, quarter-on-quarter loan really So comfortable think we're I some feel we'll So continue Clint's generate to we ability quite going outlook point, that which and run to to proportionate you stable you to to guidance on to is then directly production. our forward.

Jeff Rulis

for the then your more you towards expectations full-year; think the mid guidance the And a adjust quarter in number. I single-digit; that Great. high-end? Does loan loaded was -- kind growth, crushed the first the of that previous is

Andy McDonald

what trends based about control. trends something really and prepay trend so of headwinds of we know, do that Clint, guidance saw that we it'll we never our of payoff. away with us, which had a know, And you I think, production, we're shifting that behind think? kind was Jeff, as quarters, concerns kind the that level is on But satisfied the I -- Well, take see couple we don't from is former have, before we with of you

Clint Stein

that in we at. quarter start that's I'm that I that stake very a but to before behind quarter. for ready of satisfied. year and want ground a us But standpoint, of more about than minimized cautiously From optimistic last say headwinds The the I'm stick where X it's though, agree. I we're production most the have talked this trend, we're

Jeff Rulis

well, was activity, and Okay. to too of temperature is early early to checking in that of of it's point tell community. anything too And sort maybe just of just say? Could said, business timing kind payoff it lessened that or the to it wider -- you

Andy McDonald

the It's we about payoff worry cycle. that from the and we're But is they to the one cautiously in normalized businesses. one that this at late themes they're of economy our where their activity, early hear counterpoint I'll about is own you too say. optimistic give the to customers

could type got consolidation experienced we that since of really additional so in out sales concern And the some we've downturn. cause that of

And so ensuing see first didn't up that could we as quarter. this maybe not. much of pick the It or quarters in

Operator

the comes from And our Matthew Clark. question next of line

open. line is Your

Matthew Clark

could you what they were this payoffs, quarter? on Just the quantify

Clint Stein

In terms for is -- of dollar you're that looking amount, or what

Matthew Clark

Yes.

I -- they think think -- I yes, dollars. and were

quarter. were I last think they million $XXX

Clint Stein

of what -- I'd to when If $XXX as lower prepayments million. were was was current by fourth $XXX was prepayment at than at look number look quarter XX XXXX of we're just Well, about -- percentage were in a basis And XXXX the actually, Relative quarter, quarter, $XXX under it basis, we XXXX, call that in quarter, portfolio, a first million. points. it the about we and what the we year-over-year activity, million. this

So of statement optimistic made lower to Jeff's cautiously were. part that is I that's it's where question than the think -- we cautious that I actually

number significant We it the be during that extent weather I so things as to tended it down. the could have that a some to don't of timing know bit slow issue. And quarter a well. impacted did this

Matthew Clark

just around happen Okay. well? And you then line mentioned to utilization do seasonal as I lows. have you think was you percentage Can -- still that

Clint Stein

Yes, the at with about where much we of XX%. the I flat were it's pretty year. at, think It's end

Matthew Clark

expectation this occurred quarter, here in we that core a just the in some NIM, accounting maybe think side the pressure? when seasonality funding again of the you core if stabilizing some borrowings. you you the that or on about And the little some XQ purchase that the Okay. might accretion, pay then funding exclude on of NIM off before see back, Is your core modest release get

Greg Sigrist

expect about manage especially the the able closed with just the on cost as with upward seasonality quarter. And we've the in it deposit No, I we I coming funding strong good the be had combined that, late you the lift. And very to in side. with you're would the production And closely. quarter to think pipelines, thinking first with right, line lot been of know, utilization weather, back our the a

couple optimistic cautiously quarters. over of I'm So the next

Operator

line the from comes question next our of Jon Arfstrom. And

open. is line Your

Jon Arfstrom

questions of couple A for you.

go Just at at Were number, that just all It surprised critical seems for strong, a end you. the it guys not loan the seemed with being back number? it's to period growth. you loan growth just all, unusually like really, solid really number but

Clint Stein

that headwinds a think very had. we that the I we last It's the rewind number. year solid of a discussion regarding lot that if And had we

their prepayment of opportunity delayed all of headwinds. with bring Continental and fresh our The we then takes was selectively in of built. we've on bring that key or we talent that things time markets some -- to and to bankers, getting the to of to teams in those departing we're able had seen The and the quarter. that Some closing the the pipelines fruition in addressed And it pipelines new Pacific the ability some first the already some the come there. it rebuild

Jon Arfstrom

numbers. good only Good, Okay.

the On for programs XXXX. you're about digital that talking

which complete? When starting most look the spending it's out most you But understand six the to for to we you think do pin programs are about think it, or at one two you you XXXX hard or program important of you success. talked to piece I for show critical XXXX, the and down. lay

Clint Stein

Well, to us all want in. jump probably of

it to more kick the it with start one, gets and as between I'll then to easy so And differentiate Hadley. over I'll them, difficult

me online is business Our to version most critical. the banking

when my one the layer oriented see remarks. the experienced in platform consumer capabilities date organization, and As ones of to mentioned of a what is in we that we've what platform, with the banking online commercially we that which I prepared

those our compete for is existing that but for and critical not think client a go also out base, I middle-market relationships deepening only application our to retaining ability business. it

Hadley Robbins

I'll agree. Well,

business us a with time, higher our forward it's a we'd very that because conversion the think management to a key provide same like at clients, it more we're product depositors. build direct going go treasury for And small in we critical -- is set -- to offers management opportunity which services one of going I contemporary way. an to it forward that a our level treasury creates

base which some We forward, to feel and that's also products important we're going though need us. the that introduce them. they will have to to technology I that, that Zelle, help certainly coming payment We're customer think bringing as is our

application projects and the to position to work are same have on the are faster through for them more at that's -- more that some less behind our scenes going complex services of efficiencies and the as the operations don't And much we customer-focused our sizzle customers. the the going to be bank's time, hard making that on and work creating frictionless

initiatives So unfolding. of very I'm our that convinced those are And the to that get kind long-term. are they'll but stabilize, while and performance introduced a they'll take help

Greg Sigrist

think And we add because really internal I the would the set incrementally foundation for own favorite, our the is and to we the capabilities only operations. strengthen digital really all have I all work one

through also that XXXX roll think as I and incredibly critical. into XXXX we is

Hadley Robbins

completing, year, and hopefully, business our in be of also XXXX, close as the account and very capabilities the Yes. We'll opening start online before online small to end working well. our

Jon Arfstrom

on there maybe just revenue generating? Greg. million, you've -- of then change this last follow-up people office? feel talked expense $XX of do to We offsets, the the be about some are $X But take off back to the more potential And longer-term, the million like some role Okay. that. burden Does you

Greg Sigrist

your to that speaking, broadly think friction. I some spend either efficiencies, just mean, I with We're revenues itself helps that also, or focused on the generating with the point, operational of increased combined Yes. reducing, capacity John.

meaningful have we return on into as that opportunity next see to absolutely head we So investment a year.

Clint Stein

achieve continuing, in of expanding different. investing add consistently reinvested the start the into -- we brick able that's and it's offsets. the And our are and we branch call, Other just the -- the and as just digital on really mortar it's is Its our to optimize And pending our footprint we've branch I'll I more we're And continue we'll not three business than that over investment I it's area. nature of And and right history. mentioned levels some but XX-plus-year find to locations, balance, huge the traffic it's a as now. story, think continuation branch of general, spend change, what expense counts that consolidations in we've been doing, different And more of side it's cases, from some some efficiencies digital the will in as occupancy. type the on well of just spend. migrating a there personal be a into it's expense, have

Operator

[Operator Instructions].

question from Bohlen. comes of line next Our the Jackie

is open. Your line

Jackie Bohlen

I to wanted to turn management. capital

the discussion will get press I to that the the play know given your thoughts how has looked dividend And Just together. two more policy been what the of wanted highlighting past. for the then in buyback special I on the and you've specific in those release,

If repurchase you dividend shares. might special and lower

If you specifically if very might driven switch more stock to it's by a to buyback, price. be going

together? X thinking those you're about how Just

Greg Sigrist

jump buybacks for mean, I that making makes upon sees he level any the that execution But sense at quite is can and dependent in let start, as me frankly. are and the a Hadley Yes. point sure shareholders, obviously, our fit. price

longer directionally, sense. in share at To ability us above make able our special ratio that payout do buy the So that the though we're shares, We even for that price a day, would to with ratio believe, the the cause of transact at quarter the to regular terms position thinking that forward and think it At taking over be want payout between are one challenges Jackie. is, it overall dividend happen we that to I end the a to of of going don't in extent special look XXX% neighborhood. the where what's dividends. levels was, in that I about in the of to look XX%, and to back horizon, level

it to to our buybacks special using the what the going forward. going experience on is absolutely calibrate be we're So looking and see

Jackie Bohlen

Okay.

I information, how that levels on more we how as are unfolds. the future pricing and So see guess,

Greg Sigrist

to expect And the you internally. certainly, with us have conversations, quarter-on-quarter have well. conversation I would as We

Jackie Bohlen

took the then And from like Okay. Is loan fair pruning is of question, perspective, place it year assessment? a a that complete. a sounds now last that most

Hadley Robbins

looking ongoing an it's the it's within and think to I'm over always it regard about it. systemic migration. move And But the portfolio, I with portfolio with that seen risk we're taken the a comfortable place, Well, of I'll that at have discipline. to making any we turn Andy. pretty something decisions activities Yes, haven't kind

Andy McDonald

would Hadley's comments we trying a to aggressive marketplace Yes. lot assets institutions that of their certainly I just in terms echo sheets. in of saw on being the balance build

And was us. a opportunity for so that we felt good

may so been normal, higher don't of have a the was bit pruning And higher. activity than some little I it think substantially

Our always key the say, things to to choose bankers who is the biggest that here, we I bank. quality credit

prune are business, clients to their not we're that that in need reason, we uncomfortable comfortable choose Second whatever for we their we actively those do then is is to not thing or performance businesses monitor And that to part directions have with. the that, of but is take we choose. thirdly, which one with, the fun

part to So amicably. in that case, we just hope It's business.

Jackie Bohlen

just last then one one. And Okay.

on expense you go just line given or how quarter are spend how to you expecting item In color the past digital of to so, expenses. good you how outside expect seasonal the terms advertising go know the I -- that, then in and operating next gave you that of But from in line, particular, that just are trends?

Greg Sigrist

be going be initiatives, wants give thought other my digital Off maybe jump certainly of digital that I'm marketing element as to Jackie, we I Yes, digital any the would roll associated strategy a say to out if top is it with or there's going it. you head, would forward. Hadley than to start I not of range our in. the an really of sure incremental there's just I'll going our I fact mean, and part

Hadley Robbins

on but the for on guidance calls have marketing. I'd with we where We'll overall, that, year land last to some Yes. quarter-by-quarter look

Operator

Our next of question Gordon comes from the line McGuire.

Your line is open.

Gordon McGuire

the Clint, you any So yields might those production lower a out public those. administration get of points, of to trying Is if outside you mentioned XXX of what funding. those was yields the way could production basis funded? new sense been new hadn't there because have of Just the strip

Clint Stein

Yes. Yes, front do we can. in that. I me don't have of detail the to

it I million number and the the certainly that of you coupon was the that. production excluding public the $XX for about give the -- accounted or was what follow-up rate offline finance. think we with you But can

Gordon McGuire

the And the purchase And yields that? be would were? looks it on from you strategy balances those duration That completed what that Great. leverage this you have quarter. then you great. early average the Do maybe total like and securities added the

Clint Stein

say, rate $X would really with up rate It's overnight assets. we're we borrowing would think, and in to it's securities the a we're can those well year, over I can tell actually overnight drops earning million we into -- into it's is what investing borrowing year on I And which me, bottom-line. quarter The that'll really, rate rate-down be, level bucket about filled of environment. the interest that and between get $XXX the roughly overnight and at expect you I net products you and it and the don't differential have back perform a maybe I million. the to kind -- then late you as into the this Well, of into last

Gordon McGuire

do balance decline of sheet need liquidity Okay. still from over out to on into here, you growth those? can securities the growth? that expect to of think Or build you the as you you if loan deploy And just would you time balances -- kind them

Greg Sigrist

be kind Well, loan having and -- late it's one as we quarter, I of consciously great discussion growth, it And in internally. a fund to a was to question first we're honest. the think sold securities that's

the you believe, a little the bit tick So loan-to-deposit of XX%, I seen end quarter. for ratio to would've our up

part happens I time, the over seeing is conversation I deposit with bit. we seasonal the little be ratio And that So flows. comfortable around loan-to-deposit think up of what think a would move

Gordon McGuire

Okay. And That $XX a quarterly? just million $X was was it on then or annualized lastly, to basis, the on million investments. clarification

Greg Sigrist

balance, over remainder XXXX. No, what of we the that's expect would the

Gordon McGuire

base? I'm be just expense from of of finished would Okay. with this And the to rate in look be of how run something you're XXXX what that kind consulting once much out of could like. would trying out expense that figure adds stays projects? the that the more Or fees

Greg Sigrist

consulting part to capitalized that lot run it going gets negotiate going of you there. already down there's There'll even it how sure But quite that that, to the spend not become just rate were of then be the out take vendors. be with replacing A component frankly. to some extent of much contracts and of cost in be forward. I'm Yes, a we're the the will existing platforms, to of

plan to on. coming you're of and back detail quarter quarter for the better I them we think think part really it I So give keep would looking is transparency and on is what important,

Operator

our question Aaron from And comes next the of Deer. line

Your line is open.

Aaron Deer

right? noise? that million So is it that million in see would away, -- software that Anything expenses be go some could have cost capitalized included add $XX I'm spend, just either point. that to $X The -- additional might is maybe coming or there's that that. like are cost that out, that the on to there extent that -- following up gross that a well,

Greg Sigrist

for last treasury dropping the Well online, talked paying the off start to it existing number platform we're and notes, with as have that we'll I'd and quarter online, -- the little digital the come platforms to I platform. look have have the Clint's back run new to a platform certainly next of Hadley give trickle quarter's fourth year start existing associated What about downstream year. Clint rate in year. a today Q&A, exact at -- to and I quarter, think last really management it. then bit return a do platforms nature and including of talked certainly But investments we to each about. we next the you I we the see those benefits on of saves in, comes And platform filter number the expect to start on that into expect this see and to in point, that into think as

Aaron Deer

ag Has with anything any causing point? And Pacific there any is in that any your Andy concern an this then, producers? the of the check position -- some or of given crop types very but at sounded opportunity the kind this you year. pretty Okay. pleased Northwest to wet credit had with that And spring are

Andy McDonald

the like into are issues farmers is The to getting going cause later. are Midwest. Yes. late they ground in The spring the just some

world potatoes so onions, So contractually out the run to doesn't potatoes especially of there taken french that going to and of the it's be impact certainly have ground fries. out

because much means to potatoes smaller that as to have So that be grow. time the going are they won't

the and will yields in simply so cold And to to is farmers' well. analyzing July, behind apples, be are always white stores down, and into that all weather that. get Lake Snow trees as the Xth blue going them relative so curve for the with is we're budgets. because those -- kind grocery impact the cherries Key The red, the cherries also, try of now and to you of

quarters say, that deal it. But will have the to material which show migrate to continue healing, started would we three change back ag anticipate that we was, ago won't So us. two, it for be where portfolio, a to probably to with will some

Aaron Deer

changes of of Okay. any That's seen activity And increased or forward? deposit what lastly, the quarter consumer pricing just thing of see to then sort saw in cost exception nature. us demand kind sudden that to in was deposit going sounded sort that any helpful. this seasonal of you cause have or extent of most it kind we more behavior in could But like increase that for

Clint Stein

success going also on our those just winning things. that I I'll the had larger things we of our some my and think Yes, we set, not a bring still hit obviously the risk throughout make service, expertise desk add And slowed, we But lot at deposits. our competing rate -- table, we that and quarter, it's of customers, that it's but our not lot -- concessions. for the a continue price, out of to for in it's new there's it's frequency pressure continue that of have product but all with outreach still the quarter, with pricing least -- we there, continued the to later did the relationships, to

competitive not new have their a are a out that very -- -- it's also and solid portfolios business. it's winning only existing very it but is of going team So defending environment. we But I bankers think that

Operator

line from And Matthew of our question the next Clark. comes

is line Your open.

Matthew Clark

later way, at next relief and it achieve that point do some about expect into does coming thinking expenses some in this year maybe on year, year. next you efficiency there's different to like Just a But ratio sound still mid-XXs it next year?

Greg Sigrist

about, Yes, we've think we're target I think shooting next year talked everything into I the that's for. certainly with

We that's continue think our target. operational are on and Matt, I the going efficiencies, to to right focus

Matthew Clark

rate more closer then of number kind recently. tax And in Is the going XX% use Okay. XX% a to good hung is forward? to

Greg Sigrist

I -- better it full with is for year probably Matt. blend or maybe year's look last the last maybe rate rate the at year's average barometer,

Matthew Clark

And -- then Okay.

Greg Sigrist

we So ahead. -- I'm that range go usually are in sorry.

Matthew Clark

in that Yes, it's yes. Yes, range.

business that and expense, in on within after is this just Is then up And quarter Okay. there unusual anything bumped tax item, rate? that the run range. good being a occupancy a or tighter

Clint Stein

unusual Yes, was a there bit activity. little of

Seattle calculated we So believe, from, unfavorable had our I interpretation a B&O tax. on city of how we

majority in And me, the seeing it's there, a of but delta front number $XXX,XXX. and that you're I period, the exact of roughly is so catch-up there don't probably have that

Operator

line question comes from And of Don Worthington. our next the

Your line is open.

Don Worthington

on was might M&A that more your way deploy as thoughts Just what and current be capital? to a maybe one had

Hadley Robbins

that part strategic in way ongoing the of we've opportunities our it's that not of applied resource it's to that existing a the of but our And dollars an and got that of investment it's thinking we're And into M&A-related Well, -- that amount only lot always simply that. through have. thoughts. dedication is we're a we a thinking is a dedication moving significant of bank

going to we're that if accretion above at so level to to-high-single-digits. strategic hopefully drives considering benefit M&A, a that shareholders it's be the is mid- And a

banks. much fewer at footprint. fewer in existing our in are range there a puts so us and that opportunities And And M&A where we're larger looking

will be that time, come have opportunities available, the current though interested arise. we any yet it as to those seems but in Although at

be we time have when that And so opportunity. the we'll prepared comes if

that proposition as we conversation talked the But difficult moving more have internally. because have don't reliable remains bit excuse they looking table. the ability Northern the thinking water. Southern the price would as California well, And far footprint, consider California, market particularly going We provide to simply a footprint, you competitive normally us about south a makes competitive your a competitor California it's could valley that's ability an put -- me, the a with which have a it's at there's within get to that as of we we for as end get and takeouts would on expanding that in

we think want But things us conversation, we be is a it's that do put have and ready, we don't to a the that to moving ongoing, we're about lot one interest. position at our levels want to it's capital it, would the discipline, in we the overpay. So and of

thoughtful we're So it. about

Operator

for we now program, Have questions further great And presentation you us would you disconnect. no our a webcast concludes are may hope this there and time. I everyone and to today, And at like day. thank joining informative. this This found

Hadley Robbins

you. Thank

Columbia Banking System (COLB) 26 Apr 192019 Q1 Earnings call transcript