Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________________
FORM 10-Q
________________________________________________________
(Mark One)
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☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2018.
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☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission File Number 0-20288
________________________________________________________
COLUMBIA BANKING SYSTEM, INC.
(Exact name of registrant as specified in its charter)
________________________________________________________
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| | |
Washington | | 91-1422237 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification Number) |
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1301 A Street Tacoma, Washington | | 98402-2156 |
(Address of principal executive offices) | | (Zip Code) |
(253) 305-1900
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)________________________________________________________
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer | | ☒ | | Accelerated filer | | ☐ |
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Non-accelerated filer | | ☐ | (Do not check if a smaller reporting company) | Smaller reporting company | | ☐ |
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| | | | Emerging growth company | | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
The number of shares of common stock outstanding at April 30, 2018 was 73,238,908.
TABLE OF CONTENTS
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| PART I — FINANCIAL INFORMATION | |
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Item 1. | | |
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Item 2. | | |
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Item 3. | | |
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Item 4. | | |
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| PART II — OTHER INFORMATION | |
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Item 1. | | |
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Item 1A. | | |
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Item 2. | | |
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Item 3. | | |
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Item 4. | | |
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Item 5. | | |
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Item 6. | | |
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PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
Columbia Banking System, Inc.
(Unaudited)
|
| | | | | | | | | | | | | |
| | | | | March 31, 2018 | | December 31, 2017 |
ASSETS | | (in thousands) |
Cash and due from banks | | $ | 206,532 |
| | $ | 244,615 |
|
Interest-earning deposits with banks | | 87,124 |
| | 97,918 |
|
Total cash and cash equivalents | | 293,656 |
| | 342,533 |
|
Debt securities available for sale at fair value | | 2,624,045 |
| | 2,737,751 |
|
Equity securities at fair value | | 5,000 |
| | 5,080 |
|
Federal Home Loan Bank stock at cost | | 11,640 |
| | 10,440 |
|
Loans held for sale | | 4,312 |
| | 5,766 |
|
Loans, net of unearned income | | 8,339,631 |
| | 8,358,657 |
|
Less: allowance for loan and lease losses | | 79,827 |
| | 75,646 |
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Loans, net | | 8,259,804 |
| | 8,283,011 |
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Interest receivable | | 41,795 |
| | 40,881 |
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Premises and equipment, net | | 168,366 |
| | 169,490 |
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Other real estate owned | | 11,507 |
| | 13,298 |
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Goodwill | | 765,842 |
| | 765,842 |
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Other intangible assets, net | | 54,985 |
| | 58,173 |
|
Other assets | | 289,684 |
| | 284,621 |
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Total assets | | $ | 12,530,636 |
| | $ | 12,716,886 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | |
Deposits: | | | | | | | |
Noninterest-bearing | | $ | 4,927,226 |
| | $ | 5,081,901 |
|
Interest-bearing | | 5,468,297 |
| | 5,450,184 |
|
Total deposits | | 10,395,523 |
| | 10,532,085 |
|
Federal Home Loan Bank advances | | 41,564 |
| | 11,579 |
|
Securities sold under agreements to repurchase | | 24,247 |
| | 79,059 |
|
Subordinated debentures | | 35,601 |
| | 35,647 |
|
Junior subordinated debentures | | — |
| | 8,248 |
|
Other liabilities | | 85,778 |
| | 100,346 |
|
Total liabilities | | 10,582,713 |
| | 10,766,964 |
|
Commitments and contingent liabilities (Note 12) | |
| |
|
Shareholders’ equity: | | | | | | | |
| March 31, 2018 | | December 31, 2017 | | | | |
| (in thousands) | | | | |
Common stock (no par value) | | | | | | | |
Authorized shares | 115,000 |
| | 115,000 |
| | | | |
Issued and outstanding | 73,240 |
| | 73,020 |
| | 1,634,916 |
| | 1,634,705 |
|
Retained earnings | | 361,140 |
| | 337,442 |
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Accumulated other comprehensive loss | | (48,133 | ) | | (22,225 | ) |
Total shareholders’ equity | | 1,947,923 |
| | 1,949,922 |
|
Total liabilities and shareholders’ equity | | $ | 12,530,636 |
| | $ | 12,716,886 |
|
See accompanying Notes to unaudited Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF INCOME
Columbia Banking System, Inc.
(Unaudited)
|
| | | | | | | | |
| | Three Months Ended |
| | March 31, |
| | 2018 | | 2017 |
| | (in thousands except per share amounts) |
Interest Income | | | | |
Loans | | $ | 103,027 |
| | $ | 74,120 |
|
Taxable securities | | 12,708 |
| | 10,986 |
|
Tax-exempt securities | | 3,064 |
| | 2,691 |
|
Deposits in banks | | 345 |
| | 19 |
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Total interest income | | 119,144 |
| | 87,816 |
|
Interest Expense | | | | |
Deposits | | 2,509 |
| | 787 |
|
Federal Home Loan Bank advances | | 570 |
| | 225 |
|
Subordinated debentures | | 468 |
| | — |
|
Other borrowings | | 116 |
| | 129 |
|
Total interest expense | | 3,663 |
| | 1,141 |
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Net Interest Income | | 115,481 |
| | 86,675 |
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Provision for loan and lease losses | | 5,852 |
| | 2,775 |
|
Net interest income after provision for loan and lease losses | | 109,629 |
| | 83,900 |
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Noninterest Income | | | | |
Deposit account and treasury management fees | | 8,740 |
| | 7,287 |
|
Card revenue | | 5,813 |
| | 5,723 |
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Financial services and trust revenue | | 2,730 |
| | 2,839 |
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Loan revenue | | 3,186 |
| | 3,593 |
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Merchant processing revenue | | — |
| | 2,019 |
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Bank owned life insurance | | 1,426 |
| | 1,280 |
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Investment securities gains, net | | 22 |
| | — |
|
Change in FDIC loss-sharing asset | | — |
| | (274 | ) |
Other | | 1,226 |
| | 2,392 |
|
Total noninterest income | | 23,143 |
| | 24,859 |
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Noninterest Expense | | | | |
Compensation and employee benefits | | 50,570 |
| | 40,825 |
|
Occupancy | | 10,121 |
| | 7,191 |
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Merchant processing expense | | — |
| | 1,049 |
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Advertising and promotion | | 1,429 |
| | 817 |
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Data processing | | 5,270 |
| | 4,208 |
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Legal and professional fees | | 3,237 |
| | 3,369 |
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Taxes, licenses and fees | | 1,425 |
| | 1,241 |
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Regulatory premiums | | 937 |
| | 776 |
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Net cost of operation of other real estate owned | | 1 |
| | 152 |
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Amortization of intangibles | | 3,188 |
| | 1,349 |
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Other | | 9,809 |
| | 8,009 |
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Total noninterest expense | | 85,987 |
| | 68,986 |
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Income before income taxes | | 46,785 |
| | 39,773 |
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Income tax provision | | 6,815 |
| | 10,574 |
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Net Income | | $ | 39,970 |
| | $ | 29,199 |
|
Earnings per common share | | | | |
Basic | | $ | 0.55 |
| | $ | 0.50 |
|
Diluted | | $ | 0.55 |
| | $ | 0.50 |
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Dividends paid per common share | | $ | 0.22 |
| | $ | 0.22 |
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Weighted average number of common shares outstanding | | 72,300 |
| | 57,388 |
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Weighted average number of diluted common shares outstanding | | 72,305 |
| | 57,394 |
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See accompanying Notes to unaudited Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Columbia Banking System, Inc.
(Unaudited) |
| | | | | | | | |
| | Three Months Ended |
| | March 31, |
| | 2018 | | 2017 |
| | (in thousands) |
Net income | | $ | 39,970 |
| | $ | 29,199 |
|
Other comprehensive income (loss), net of tax: | | | | |
Unrealized gain (loss) from securities: | | | | |
Net unrealized holding gain (loss) from available for sale debt securities arising during the period, net of tax of $7,891 and ($968) | | (26,048 | ) | | 1,702 |
|
Reclassification adjustment of net gain from sale of available for sale debt securities included in income, net of tax of $24 and $0 | | (78 | ) | | — |
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Net unrealized gain (loss) from securities, net of reclassification adjustment | | (26,126 | ) | | 1,702 |
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Pension plan liability adjustment: | | | | |
Reduction in unfunded defined benefit plan liability during the period, net of tax of $0 and ($2,622) | | — |
| | 4,604 |
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Amortization of unrecognized net actuarial loss included in net periodic pension cost, net of tax of ($19) and ($49) | | 61 |
| | 87 |
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Pension plan liability adjustment, net | | 61 |
| | 4,691 |
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Other comprehensive income (loss) | | (26,065 | ) | | 6,393 |
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Total comprehensive income | | $ | 13,905 |
| | $ | 35,592 |
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See accompanying Notes to unaudited Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Columbia Banking System, Inc.
(Unaudited)
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| | Preferred Stock | | Common Stock | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss) | | Total Shareholders’ Equity |
| | Number of Shares | | Amount | | Number of Shares | | Amount | |
| | (in thousands) |
Balance at January 1, 2018 | | — |
| | $ | — |
| | 73,020 |
| | $ | 1,634,705 |
| | $ | 337,442 |
| | $ | (22,225 | ) | | $ | 1,949,922 |
|
Adjustment to opening retained earnings pursuant to adoption of ASU 2016-01 | | — |
| | — |
| | — |
| | — |
| | (203 | ) | | 157 |
| | (46 | ) |
Net income | | — |
| | — |
| | — |
| | — |
| | 39,970 |
| | — |
| | 39,970 |
|
Other comprehensive loss | | — |
| | — |
| | — |
| | — |
| | — |
| | (26,065 | ) | | (26,065 | ) |
Issuance of common stock - stock option and other plans | | — |
| | — |
| | 17 |
| | 719 |
| | — |
| | — |
| | 719 |
|
Activity in deferred compensation plan | | — |
| | — |
| | — |
| | 3 |
| | — |
| | — |
| | 3 |
|
Issuance of common stock - restricted stock awards, net of canceled awards | | — |
| | — |
| | 263 |
| | 2,064 |
| | — |
| | — |
| | 2,064 |
|
Purchase and retirement of common stock | | — |
| | — |
| | (60 | ) | | (2,575 | ) | | — |
| | — |
| | (2,575 | ) |
Cash dividends paid on common stock | | — |
| | — |
| | — |
| | — |
| | (16,069 | ) | | — |
| | (16,069 | ) |
Balance at March 31, 2018 | | — |
| | $ | — |
| | 73,240 |
| | $ | 1,634,916 |
| | $ | 361,140 |
| | $ | (48,133 | ) | | $ | 1,947,923 |
|
Balance at January 1, 2017 | | 9 |
| | $ | 2,217 |
| | 58,042 |
| | $ | 995,837 |
| | $ | 271,957 |
| | $ | (18,999 | ) | | $ | 1,251,012 |
|
Adjustment to opening retained earnings pursuant to adoption of ASU 2016-09 | | — |
| | — |
| | — |
| | 184 |
| | (117 | ) | | — |
| | 67 |
|
Net income | | — |
| | — |
| | — |
| | — |
| | 29,199 |
| | — |
| | 29,199 |
|
Other comprehensive income | | — |
| | — |
| | — |
| | — |
| | — |
| | 6,393 |
| | 6,393 |
|
Issuance of common stock - stock option and other plans | | — |
| | — |
| | 28 |
| | 1,145 |
| | — |
| | — |
| | 1,145 |
|
Issuance of common stock - restricted stock awards, net of canceled awards | | — |
| | — |
| | 207 |
| | 2,358 |
| | — |
| | — |
| | 2,358 |
|
Preferred stock conversion to common stock | | (9 | ) | | (2,217 | ) | | 102 |
| | 2,217 |
| | — |
| | — |
| | — |
|
Purchase and retirement of common stock | | — |
| | — |
| | (50 | ) | | (2,039 | ) | | — |
| | — |
| | (2,039 | ) |
Cash dividends paid on common stock | | — |
| | — |
| | — |
| | — |
| | (12,792 | ) | | — |
| | (12,792 | ) |
Balance at March 31, 2017 | | — |
| | $ | — |
| | 58,329 |
| | $ | 999,702 |
| | $ | 288,247 |
| | $ | (12,606 | ) | | $ | 1,275,343 |
|
See accompanying Notes to unaudited Consolidated Financial Statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS Columbia Banking System, Inc. (Unaudited) |
| | | | | | | | |
| | Three Months Ended March 31, |
| | 2018 | | 2017 |
| | (in thousands) |
Cash Flows From Operating Activities | | | | |
Net income | | $ | 39,970 |
| | $ | 29,199 |
|
Adjustments to reconcile net income to net cash provided by operating activities | | | | |
Provision for loan and lease losses | | 5,852 |
| | 2,775 |
|
Stock-based compensation expense | | 2,064 |
| | 2,358 |
|
Depreciation, amortization and accretion | | 7,618 |
| | 6,074 |
|
Investment securities gains, net | | (22 | ) | | — |
|
Net realized (gain) loss on sale of premises and equipment, loans held for investment and other assets | | (630 | ) | | 55 |
|
Net realized loss on sale and valuation adjustments of other real estate owned | | 135 |
| | 204 |
|
Gain on bank owned life insurance death benefit | | — |
| | (1,514 | ) |
Originations of loans held for sale | | (27,553 | ) | | (31,295 | ) |
Proceeds from sales of loans held for sale | | 29,007 |
| | 33,896 |
|
Net change in: | | | | |
Interest receivable | | (914 | ) | | (1,271 | ) |
Interest payable | | 452 |
| | (9 | ) |
Other assets | | 2,530 |
| | (650 | ) |
Other liabilities | | (15,014 | ) | | (3,841 | ) |
Net cash provided by operating activities | | 43,495 |
| | 35,981 |
|
Cash Flows From Investing Activities | | | | |
Loans originated and acquired, net of principal collected | | 17,688 |
| | (21,936 | ) |
Purchases of: | | | | |
Debt securities available for sale | | (27,497 | ) | | (108,958 | ) |
Premises and equipment | | (2,099 | ) | | (336 | ) |
Federal Home Loan Bank stock | | (45,080 | ) | | (31,400 | ) |
Proceeds from: | | | | |
FDIC reimbursement on loss-sharing asset | | — |
| | 26 |
|
Sales of debt securities available for sale | | 19,761 |
| | — |
|
Principal repayments and maturities of debt securities available for sale | | 82,643 |
| | 55,369 |
|
Sales of premises and equipment and loans held for investment | | 3,721 |
| | 6,893 |
|
Redemption of Federal Home Loan Bank stock | | 43,880 |
| | 31,040 |
|
Sales of other real estate and other personal property owned | | 2,062 |
| | 1,275 |
|
Payments to FDIC related to loss-sharing asset | | — |
| | (210 | ) |
Net cash provided by (used in) investing activities | | 95,079 |
| | (68,237 | ) |
Cash Flows From Financing Activities | | | | |
Net (decrease) increase in deposits | | (136,466 | ) | | 29,433 |
|
Net decrease in sweep repurchase agreements | | (54,812 | ) | | (33,908 | ) |
Proceeds from: | | | | |
Federal Home Loan Bank advances | | 1,127,000 |
| | 785,000 |
|
Exercise of stock options | | 719 |
| | 1,145 |
|
Payments for: | | | | |
Repayment of Federal Home Loan Bank advances | | (1,097,000 | ) | | (776,000 | ) |
Common stock dividends | | (16,069 | ) | | (12,792 | ) |
Repayment of junior subordinated debentures | | (8,248 | ) | | — |
|
Purchase and retirement of common stock | | (2,575 | ) | | (2,039 | ) |
Net cash used in financing activities | | (187,451 | ) | | (9,161 | ) |
Decrease in cash and cash equivalents | | (48,877 | ) | | (41,417 | ) |
Cash and cash equivalents at beginning of period | | 342,533 |
| | 224,238 |
|
Cash and cash equivalents at end of period | | $ | 293,656 |
| | $ | 182,821 |
|
| | | | |
CONSOLIDATED STATEMENTS OF CASH FLOWS, Continued Columbia Banking System, Inc. (Unaudited) |
| | | | | | | | |
| | Three Months Ended March 31, |
| | 2018 | | 2017 |
| | (in thousands) |
Supplemental Information: | | | | |
Cash paid during the period for: | | | | |
Cash paid for interest | | $ | 3,211 |
| | $ | 1,150 |
|
Cash paid for income tax | | $ | 24 |
| | $ | — |
|
Non-cash investing and financing activities | | | | |
Loans transferred to other real estate owned | | $ | 406 |
| | $ | — |
|
See accompanying Notes to unaudited Consolidated Financial Statements.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Columbia Banking System, Inc.
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1. | Basis of Presentation, Significant Accounting Policies and Recent Developments |
Basis of Presentation
The interim unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. The Consolidated Financial Statements include the accounts of Columbia Banking System, Inc. (“we”, “our”, “Columbia” or the “Company”) and its subsidiaries, including its wholly owned banking subsidiary Columbia State Bank (“Columbia Bank” or the “Bank”) and Columbia Trust Company (“Columbia Trust”). All intercompany transactions and accounts have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of results to be anticipated for the year ending December 31, 2018. The accompanying interim unaudited Consolidated Financial Statements should be read in conjunction with the financial statements and related notes contained in the Company’s 2017 Annual Report on Form 10-K.
Significant Accounting Policies
The significant accounting policies used in preparation of our Consolidated Financial Statements are disclosed in our 2017 Annual Report on Form 10-K. There have not been any changes in our significant accounting policies compared to those contained in our 2017 Form 10-K disclosure for the year ended December 31, 2017.
Reclassifications
Certain amounts reported in prior periods may have been reclassified in the Consolidated Financial Statements to conform to the current presentation. The reclassifications have no effect on net income or stockholders’ equity as previously reported.
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2. | Accounting Pronouncements Recently Issued |
In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-15, Classification of Certain Cash Receipts and Cash Payments. The amendments in this ASU provide specific guidance on several statement of cash flow classification issues to reduce diversity in practice. The amendments in ASU 2016-15 are effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company has reclassified items in the Statement of Cash Flows for the three months ended March 31, 2017 to conform with its current presentation based on its adoption of ASU 2016-15.
In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. The amendments included in this ASU require an entity to reflect its current estimate of all expected credit losses for assets held at an amortized cost basis. For available for sale debt securities, credit losses will be measured in a manner similar to current GAAP, however, this ASU will require that credit losses be presented as an allowance rather than as a write-down. The amendments in ASU 2016-13 are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and are required to be adopted through a modified retrospective approach, with a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the ASU is effective.
Currently, the Company cannot reasonably estimate the impact that adoption of ASU 2016-13 will have on its Consolidated Financial Statements; however, the impact may be significant. That assessment is based upon the fact that, unlike the incurred loss models in existing GAAP, the current expected credit loss (“CECL”) model in ASU 2016-13 does not specify a threshold for the recognition of an impairment allowance. Rather, the Company will recognize an impairment allowance equal to its estimate of lifetime expected credit losses, adjusted for prepayments, for in-scope financial instruments as of the end of the reporting period. Accordingly, the impairment allowance measured under the CECL model could increase significantly from the impairment allowance measured under the Company’s existing incurred loss model. Significant CECL implementation matters to be addressed by the Company include selecting loss estimation methodologies, identifying, sourcing and storing data, addressing data gaps, defining a reasonable and supportable forecast period, selecting historical loss information which will be reverted to, documenting the CECL estimation process, assessing the impact to internal controls over financial reporting, capital planning and seeking process approval from audit and regulatory stakeholders.
In February 2016, the FASB issued ASU 2016-02, Leases. The amendments included in this ASU create a new accounting model for both lessees and lessors. The new guidance requires lessees to recognize lease liabilities, initially measured as the present value of future lease payments, and corresponding right-of-use assets for all leases with lease terms greater than 12 months. This model differs from the current lease accounting model, which does not require such lease liabilities and corresponding right-of-use assets to be recorded for operating leases. The amendments in ASU 2016-02 must be adopted using the modified retrospective approach and will be effective for the first interim or annual period beginning after December 15, 2018. Early adoption is permitted. During 2017, the Company selected a third-party lease accounting application to assist in the implementation of this new guidance. Significant implementation matters to be addressed by the Company include assessing the impact to our internal controls over financial reporting and documenting the new lease accounting process. We do not expect a material impact to our Consolidated Statement of Income as a result of this ASU. See Note 18, “Commitments and Contingent Liabilities” to our 2017 Form 10-K, for more information regarding the minimum future payments related to our operating leases.
In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. The amendments in ASU 2016-01 require all equity investments to be measured at fair value with changes in the fair value recognized through net income. The amendments in ASU 2016-01 also require an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. In addition, the amendments in this update eliminate the requirement to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet for public business entities. The amendments in ASU 2016-01 are effective for the first interim or annual period beginning after December 15, 2017. The Company adopted the amendments of ASU 2016-01 effective January 1, 2018 and recorded a cumulative effect adjustment of $203 thousand to retained earnings related to the unrealized holding losses on equity securities with readily determinable fair value included in accumulated other comprehensive loss. The Company also added a separate line item on the Consolidated Balance Sheet for equity securities at fair value and reclassified amounts previously included in securities available for sale at fair value to conform to current period presentation. In addition, as required by the ASU, the fair value disclosure for loans is computed using an exit price notion and deposits with no stated maturity are no longer included in the fair value disclosures in Note 15.
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which provides revenue recognition guidance that is intended to create greater consistency with respect to how and when revenue from contracts with customers is shown in the income statement. The guidance requires that revenue from contracts with customers be recognized when transfer of control over goods or services is passed to customers in the amount of consideration expected to be received. Subsequent Accounting Standard Updates have been issued clarifying the original pronouncement (ASU 2016-08, ASU 2016-10, ASU 2016-12 and ASU 2016-20). The majority of the Company’s revenue is comprised of interest income from financial assets, which is specifically outside the scope of ASU 2014-09.
On January 1, 2018, we adopted the accounting guidance in ASU 2014-09 and all the related amendments (“Topic 606”) using the modified retrospective method for all contracts that have not been completed (i.e. open contracts). Therefore, the comparative information has not been adjusted and continues to be reported under Topic 605. There was no cumulative effect adjustment as of January 1, 2018, and there were no material changes to the timing or amount of revenue recognized for the three months ended March 31, 2018; however, additional disclosures were incorporated in the footnotes upon adoption. See Note 17, “Revenue from Contracts with Customers,” for more information.
On November 1, 2017, the Company completed its acquisition of Pacific Continental Corporation (“Pacific Continental”) and its wholly-owned banking subsidiary Pacific Continental Bank. The Company acquired 100% of the equity interests of Pacific Continental. The primary reasons for the acquisition were to expand in the Eugene, Oregon market and improve branch network efficiencies in the Seattle and Portland markets.
The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their fair values as of the November 1, 2017 acquisition date. Initial accounting for deferred taxes was incomplete as of March 31, 2018. The deferred taxes currently recognized in the financial statements have been determined provisionally as the final Pacific Continental tax return has not yet been completed. The application of the acquisition method of accounting resulted in the recognition of goodwill of $383.1 million and a core deposit intangible of $46.9 million, or 2.34% of core deposits. The goodwill represents the excess purchase price over the fair value of the net assets acquired. The goodwill is not deductible for income tax purposes.
The table below summarizes the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed:
|
| | | | | | | | |
| | November 1, 2017 |
| | (in thousands) |
Merger consideration | | | | $ | 637,103 |
|
Identifiable net assets acquired, at fair value | | | | |
Assets acquired | | | | |
Cash and cash equivalents | | $ | 81,190 |
| | |
Investment securities | | 449,291 |
| | |
Federal Home Loan Bank stock | | 7,084 |
| | |
Loans | | 1,873,987 |
| | |
Interest receivable | | 7,827 |
| | |
Premises and equipment | | 27,343 |
| | |
Other real estate owned | | 10,279 |
| | |
Core deposit intangible | | 46,875 |
| | |
Other assets | | 50,638 |
| | |
Total assets acquired | | | | 2,554,514 |
|
Liabilities assumed | | | | |
Deposits | | (2,118,982 | ) | | |
Federal Home Loan Bank advances | | (101,127 | ) | | |
Subordinated debentures | | (35,678 | ) | | |
Junior subordinated debentures | | (14,434 | ) | | |
Securities sold under agreements to repurchase | | (1,617 | ) | | |
Other liabilities | | (28,653 | ) | | |
Total liabilities assumed | | | | (2,300,491 | ) |
Total fair value of identifiable net assets, at fair value | | | | 254,023 |
|
Goodwill | | | | $ | 383,080 |
|
See Note 8, “Goodwill and Other Intangible Assets,” for further discussion of the accounting for goodwill and other intangible assets.
The operating results of the Company reported herein include the operating results produced by the acquired assets and assumed liabilities for the period January 1, 2018 to March 31, 2018. Disclosure of the amount of Pacific Continental’s revenue and net income (excluding integration costs) included in Columbia’s Consolidated Statements of Income is impracticable due to the integration of the operations and accounting for this acquisition.
For illustrative purposes only, the following table presents certain unaudited pro forma information for the three months ended March 31, 2017. This unaudited estimated pro forma financial information was calculated as if Pacific Continental had been acquired as of the beginning of the year prior to the date of acquisition. This unaudited pro forma information combines the historical results of Pacific Continental with the Company’s consolidated historical results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. The pro forma information is not indicative of what would have occurred had the acquisition occurred as of the beginning of the year prior to the acquisition. In particular, no adjustments have been made to eliminate the impact of other-than-temporary impairment losses and losses recognized on the sale of securities that may not have been necessary had the investment securities been recorded at fair value as of the beginning of the year prior to the date of acquisition. The unaudited pro forma information does not consider any changes to the provision for credit losses resulting from recording loan assets at fair value. Additionally, Columbia expects to achieve further operating cost savings and other business synergies, including revenue growth as a result of the acquisition, which are not reflected in the pro forma amounts that follow. As a result, actual amounts would have differed from the unaudited pro forma information presented.
|
| | | | |
| | Unaudited Pro Forma |
| | Three Months Ended March 31, |
| | 2017 |
| | (in thousands except per share) |
Total revenues (net interest income plus noninterest income) | | $ | 139,363 |
|
Net income | | $ | 37,147 |
|
Earnings per share - basic | | $ | 0.52 |
|
Earnings per share - diluted | | $ | 0.52 |
|
The following table shows the impact of the acquisition-related expenses related to the acquisition of Pacific Continental for the periods indicated to the various components of noninterest expense:
|
| | | | | | | | |
| | Three Months Ended March 31, |
| | 2018 | | 2017 |
| | (in thousands) |
Noninterest Expense | | | | |
Compensation and employee benefits | | $ | 1,556 |
| | $ | — |
|
Occupancy | | 1,004 |
| | 1 |
|
Advertising and promotion | | 512 |
| | 6 |
|
Data processing | | 287 |
| | — |
|
Legal and professional fees | | 574 |
| | 1,311 |
|
Other | | 332 |
| | 46 |
|
Total impact of acquisition-related costs to noninterest expense | | $ | 4,265 |
| | $ | 1,364 |
|
As a result of the acquisition of Pacific Continental, we have consolidated assets exceeding $10 billion and we will be subject to the interchange fee cap imposed under the Dodd-Frank Wall Street Reform and Consumer Protection Act beginning July 1, 2018. We currently anticipate a pre-tax annual impact of approximately $10 million because we will no longer qualify for the small issuer exemption.
The following table summarizes the amortized cost, gross unrealized gains and losses and the resulting fair value of debt securities available for sale: |
| | | | | | | | | | | | | | | | |
| | Amortized Cost | | Gross Unrealized Gains | | Gross Unrealized Losses | | Fair Value |
| | (in thousands) |
March 31, 2018 | | | | | | | | |
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations | | $ | 1,693,149 |
| | $ | 698 |
| | $ | (48,629 | ) | | $ | 1,645,218 |
|
State and municipal securities | | 588,218 |
| | 3,467 |
| | (8,937 | ) | | 582,748 |
|
U.S. government agency and government-sponsored enterprise securities | | 402,036 |
| | 43 |
| | (6,247 | ) | | 395,832 |
|
U.S. government securities | | 251 |
| | — |
| | (4 | ) | | 247 |
|
Total | | $ | 2,683,654 |
| | $ | 4,208 |
| | $ | (63,817 | ) | | $ | 2,624,045 |
|
December 31, 2017 | | | | | | | | |
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations | | $ | 1,752,236 |
| | $ | 1,815 |
| | $ | (27,326 | ) | | $ | 1,726,725 |
|
State and municipal securities | | 593,940 |
| | 6,023 |
| | (3,959 | ) | | 596,004 |
|
U.S. government agency and government-sponsored enterprise securities | | 416,894 |
| | 642 |
| | (2,762 | ) | | 414,774 |
|
U.S. government securities | | 251 |
| | — |
| | (3 | ) | | 248 |
|
Total | | $ | 2,763,321 |
| | $ | 8,480 |
| | $ | (34,050 | ) | | $ | 2,737,751 |
|
The following table provides the proceeds and gross realized gains and losses on sales of debt securities available for sale as well as other securities gains and losses for the periods indicated:
|
| | | | | | | | |
| | Three Months Ended |
| | March 31, |
| | 2018 | | 2017 |
| | (in thousands) |
Proceeds from sales of debt securities available for sale | | $ | 19,761 |
| | $ | — |
|
| | | | |
Gross realized gains from sales of debt securities available for sale | | $ | 148 |
| | $ | — |
|
Gross realized losses from sales of debt securities available for sale | | (46 | ) | | — |
|
Other securities losses, net (1) | | (80 | ) | | — |
|
Investment securities gains, net | | $ | 22 |
| | $ | — |
|
__________
(1) Other securities losses, net includes net unrealized loss activity associated with equity securities. There were no sales of equity securities during the periods presented.
The scheduled contractual maturities of debt securities available for sale at March 31, 2018 are presented as follows: |
| | | | | | | | |
| | March 31, 2018 |
| | Amortized Cost | | Fair Value |
| | (in thousands) |
Due within one year | | $ | 161,538 |
| | $ | 161,314 |
|
Due after one year through five years | | 635,254 |
| | 626,693 |
|
Due after five years through ten years | | 756,950 |
| | 737,927 |
|
Due after ten years | | 1,129,912 |
| | 1,098,111 |
|
Total debt securities available for sale | | $ | 2,683,654 |
| | $ | 2,624,045 |
|
The following table summarizes the carrying value of securities pledged as collateral to secure public deposits, borrowings and other purposes as permitted or required by law: |
| | | | |
| | March 31, 2018 |
| | (in thousands) |
Washington and Oregon State to secure public deposits | | $ | 246,950 |
|
Federal Reserve Bank to secure borrowings | | 52,754 |
|
Other securities pledged | | 102,363 |
|
Total securities pledged as collateral | | $ | 402,067 |
|
The following table shows the gross unrealized losses and fair value of the Company’s debt securities available for sale with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2018 and December 31, 2017: |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Less than 12 Months | | 12 Months or More | | Total |
| | Fair Value | | Unrealized Losses | | Fair Value | | Unrealized Losses | | Fair Value | | Unrealized Losses |
| | (in thousands) |
March 31, 2018 | | | | | | | | | | | | |
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations | | $ | 921,993 |
| | $ | (19,073 | ) | | $ | 681,577 |
| | $ | (29,556 | ) | | $ | 1,603,570 |
| | $ | (48,629 | ) |
State and municipal securities | | 315,392 |
| | (4,972 | ) | | 76,452 |
| | (3,965 | ) | | 391,844 |
| | (8,937 | ) |
U.S. government agency and government-sponsored enterprise securities | | 251,626 |
| | (3,969 | ) | | 140,455 |
| | (2,278 | ) | | 392,081 |
| | (6,247 | ) |
U.S. government securities | | 247 |
| | (4 | ) | | — |
| | — |
| | 247 |
| | (4 | ) |
Total | | $ | 1,489,258 |
| | $ | (28,018 | ) | | $ | 898,484 |
| | $ | (35,799 | ) | | $ | 2,387,742 |
| | $ | (63,817 | ) |
| | | | | | | | | | | | |
December 31, 2017 | | | | | | | | | | | | |
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations | | $ | 816,678 |
| | $ | (6,710 | ) | | $ | 717,211 |
| | $ | (20,616 | ) | | $ | 1,533,889 |
| | $ | (27,326 | ) |
State and municipal securities | | 220,019 |
| | (1,723 | ) | | 75,172 |
| | (2,236 | ) | | 295,191 |
| | (3,959 | ) |
U.S. government agency and government-sponsored enterprise securities | | 184,046 |
| | (1,006 | ) | | 155,983 |
| | (1,756 | ) | | 340,029 |
| | (2,762 | ) |
U.S. government securities | | 249 |
| | (3 | ) | | — |
| | — |
| | 249 |
| | (3 | ) |
Total | | $ | 1,220,992 |
| | $ | (9,442 | ) | | $ | 948,366 |
| | $ | (24,608 | ) | | $ | 2,169,358 |
| | $ | (34,050 | ) |
At March 31, 2018, there were 446 U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations securities in an unrealized loss position, of which 117 were in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2018.
At March 31, 2018, there were 406 state and municipal government securities in an unrealized loss position, of which 71 were in a continuous loss position for 12 months or more. The unrealized losses on state and municipal securities were caused by interest rate changes or widening of market spreads subsequent to the purchase of the individual securities. Management monitors published credit ratings of these securities for adverse changes. As of March 31, 2018, none of the rated obligations of state and local government entities held by the Company had a below investment grade credit rating. Because the credit quality of these securities are investment grade and the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2018.
At March 31, 2018, there were 50 U.S. government agency and government-sponsored enterprise securities in an unrealized loss position, of which 16 were in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not currently intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2018.
At March 31, 2018, there was one U.S. government security in an unrealized loss position, which was not in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where this investment falls within the yield curve and its individual characteristics. Because the Company does not currently intend to sell this security nor does the Company consider it more likely than not that it will be required to sell this security before the recovery of amortized cost basis, which may be upon maturity, the Company does not consider this investment to be other-than-temporarily impaired at March 31, 2018.
The Company’s loan portfolio includes originated and purchased loans. Originated loans and purchased loans for which there was no evidence of credit deterioration at their acquisition date and it was probable that we would be able to collect all contractually required payments are referred to collectively as loans, excluding purchased credit impaired loans. Purchased loans for which there was, at acquisition date, evidence of credit deterioration since their origination and it was probable that we would be unable to collect all contractually required payments are referred to as purchased credit impaired loans, or “PCI loans.”
The following is an analysis of the loan portfolio by segment (net of unearned income): |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2018 | | December 31, 2017 |
| | Loans, excluding PCI loans | | PCI Loans | | Total | | Loans, excluding PCI loans | | PCI Loans | | Total |
| | (in thousands) |
Commercial business | | $ | 3,402,162 |
| | $ | 13,536 |
| | $ | 3,415,698 |
| | $ | 3,377,324 |
| | $ | 12,628 |
| | $ | 3,389,952 |
|
Real estate: | | | | | | | | | | | | |
One-to-four family residential | | 182,302 |
| | 10,684 |
| | 192,986 |
| | 188,396 |
| | 12,395 |
| | 200,791 |
|
Commercial and multifamily residential | | 3,776,709 |
| | 73,446 |
| | 3,850,155 |
| | 3,825,739 |
| | 75,594 |
| | 3,901,333 |
|
Total real estate | | 3,959,011 |
| | 84,130 |
| | 4,043,141 |
| | 4,014,135 |
| | 87,989 |
| | 4,102,124 |
|
Real estate construction: | | | | | | | | | | | | |
One-to-four family residential | | 208,441 |
| | 171 |
| | 208,612 |
| | 200,518 |
| | 177 |
| | 200,695 |
|
Commercial and multifamily residential | | 385,339 |
| | 611 |
| | 385,950 |
| | 371,931 |
| | 607 |
| | 372,538 |
|
Total real estate construction | | 593,780 |
| | 782 |
| | 594,562 |
| | 572,449 |
| | 784 |
| | 573,233 |
|
Consumer | | 323,631 |
| | 10,851 |
| | 334,482 |
| | 334,190 |
| | 11,269 |
| | 345,459 |
|
Less: Net unearned income | | (48,252 | ) | | — |
| | (48,252 | ) | | (52,111 | ) | | — |
| | (52,111 | ) |
Total loans, net of unearned income | | 8,230,332 |
| | 109,299 |
| | 8,339,631 |
| | 8,245,987 |
| | 112,670 |
| | 8,358,657 |
|
Less: Allowance for loan and lease losses | | (74,162 | ) | | (5,665 | ) | | (79,827 | ) | | (68,739 | ) | | (6,907 | ) | | (75,646 | ) |
Total loans, net | | $ | 8,156,170 |
| | $ | 103,634 |
| | $ | 8,259,804 |
| | $ | 8,177,248 |
| | $ | 105,763 |
| | $ | 8,283,011 |
|
Loans held for sale | | $ | 4,312 |
| | $ | — |
| | $ | 4,312 |
| | $ | 5,766 |
| | $ | — |
| | $ | 5,766 |
|
At March 31, 2018 and December 31, 2017, the Company had no material foreign activities. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington, Oregon and Idaho.
The Company has made loans to executive officers and directors of the Company and related interests. These loans are made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than the normal risk of collectability. The aggregate dollar amount of these loans was $9.9 million and $10.0 million at March 31, 2018 and December 31, 2017, respectively. During the first three months of 2018, there were no advances and $86 thousand in repayments.
At March 31, 2018 and December 31, 2017, $2.28 billion and $2.25 billion of commercial and residential real estate loans were pledged as collateral on Federal Home Loan Bank of Des Moines (“FHLB”) borrowings and additional borrowing capacity. The Company has also pledged $72.5 million and $70.2 million of commercial loans to the Federal Reserve Bank for additional borrowing capacity at March 31, 2018 and December 31, 2017, respectively.
The following is an analysis of nonaccrual loans as of March 31, 2018 and December 31, 2017:
|
| | | | | | | | | | | | | | | | |
| | March 31, 2018 | | December 31, 2017 |
| | Recorded Investment Nonaccrual Loans | | Unpaid Principal Balance Nonaccrual Loans | | Recorded Investment Nonaccrual Loans | | Unpaid Principal Balance Nonaccrual Loans |
| | (in thousands) |
Commercial business: | | | | | | | | |
Secured | | $ | 57,504 |
| | $ | 69,056 |
| | $ | 45,410 |
| | $ | 56,865 |
|
Unsecured | | 115 |
| | 115 |
| | 50 |
| | 49 |
|
Real estate: | | | | | | | | |
One-to-four family residential | | 1,054 |
| | 1,426 |
| | 785 |
| | 1,182 |
|
Commercial & multifamily residential: | | | | | | | | |
Commercial land | | 3,192 |
| | 3,201 |
| | 2,628 |
| | 2,623 |
|
Income property | | 3,980 |
| | 4,264 |
| | 4,284 |
| | 5,410 |
|
Owner occupied | | 7,367 |
| | 7,621 |
| | 7,029 |
| | 7,270 |
|
Real estate construction: | | | | | | | | |
One-to-four family residential: | | | | | | | | |
Land and acquisition | | — |
| | — |
| | 25 |
| | 26 |
|
Residential construction | | 1,210 |
| | 1,210 |
| | 1,829 |
| | 1,828 |
|
Consumer | | 4,042 |
| | 4,378 |
| | 4,149 |
| | 4,633 |
|
Total | | $ | 78,464 |
| | $ | 91,271 |
| | $ | 66,189 |
| | $ | 79,886 |
|
Loans, excluding purchased credit impaired loans
The following is an aging of the recorded investment of the loan portfolio as of March 31, 2018 and December 31, 2017:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Current Loans | | 30 - 59 Days Past Due | | 60 - 89 Days Past Due | | Greater than 90 Days Past Due | | Total Past Due | | Nonaccrual Loans | | Total Loans |
March 31, 2018 | | (in thousands) |
Commercial business: | | | | | | | | | | | | | | |
Secured | | $ | 3,189,473 |
| | $ | 16,410 |
| | $ | 2,872 |
| | $ | — |
| | $ | 19,282 |
| | $ | 57,504 |
| | $ | 3,266,259 |
|
Unsecured | | 119,863 |
| | 50 |
| | 51 |
| | — |
| | 101 |
| | 115 |
| | 120,079 |
|
Real estate: | | | | | | | | | | | | | | |
One-to-four family residential | | 179,174 |
| | 340 |
| | — |
| | — |
| | 340 |
| | 1,054 |
| | 180,568 |
|
Commercial & multifamily residential: | | | | | | | | | | | | | | |
Commercial land | | 283,973 |
| | 2,299 |
| | — |
| | — |
| | 2,299 |
| | 3,192 |
| | 289,464 |
|
Income property | | 1,867,450 |
| | 1,929 |
| | 815 |
| | — |
| | 2,744 |
| | 3,980 |
| | 1,874,174 |
|
Owner occupied | | 1,570,051 |
| | 10,751 |
| | 2,772 |
| | — |
| | 13,523 |
| | 7,367 |
| | 1,590,941 |
|
Real estate construction: | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | |
Land and acquisition | | 5,937 |
| | 318 |
| | 285 |
| | — |
| | 603 |
| | — |
| | 6,540 |
|
Residential construction | | 199,756 |
| | 112 |
| | — |
| | — |
| | 112 |
| | 1,210 |
| | 201,078 |
|
Commercial & multifamily residential: | | | | | | | | | | | | | | |
Income property | | 295,067 |
| | 11,070 |
| | — |
| | — |
| | 11,070 |
| | — |
| | 306,137 |
|
Owner occupied | | 73,016 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 73,016 |
|
Consumer | | 316,557 |
| | 1,229 |
| | 248 |
| | — |
| | 1,477 |
| | 4,042 |
| | 322,076 |
|
Total | | $ | 8,100,317 |
| | $ | 44,508 |
| | $ | 7,043 |
| | $ | — |
| | $ | 51,551 |
| | $ | 78,464 |
| | $ | 8,230,332 |
|
| | | | | | | | | | | | | | |
| | Current Loans | | 30 - 59 Days Past Due | | 60 - 89 Days Past Due | | Greater than 90 Days Past Due | | Total Past Due | | Nonaccrual Loans | | Total Loans |
December 31, 2017 | | (in thousands) |
Commercial business: | | | | | | | | | | | | | | |
Secured | | $ | 3,185,321 |
| | $ | 2,530 |
| | $ | 2,400 |
| | $ | — |
| | $ | 4,930 |
| | $ | 45,410 |
| | $ | 3,235,661 |
|
Unsecured | | 123,524 |
| | 100 |
| | 501 |
| | — |
| | 601 |
| | 50 |
| | 124,175 |
|
Real estate: | | | | | | | | | | | | | | |
One-to-four family residential | | 184,256 |
| | 1,111 |
| | 402 |
| | — |
| | 1,513 |
| | 785 |
| | 186,554 |
|
Commercial & multifamily residential: | | | | | | | | | | | | | | |
Commercial land | | 292,680 |
| | 92 |
| | — |
| | 581 |
| | 673 |
| | 2,628 |
| | 295,981 |
|
Income property | | 1,898,655 |
| | 2,426 |
| | 971 |
| | — |
| | 3,397 |
| | 4,284 |
| | 1,906,336 |
|
Owner occupied | | 1,590,004 |
| | 2,485 |
| | 468 |
| | — |
| | 2,953 |
| | 7,029 |
| | 1,599,986 |
|
Real estate construction: | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | |
Land and acquisition | | 9,882 |
| | — |
| | — |
| | — |
| | — |
| | 25 |
| | 9,907 |
|
Residential construction | | 187,862 |
| | — |
| | — |
| | — |
| | — |
| | 1,829 |
| | 189,691 |
|
Commercial & multifamily residential: | | | | | | | | | | | | | | |
Income property | | 293,028 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 293,028 |
|
Owner occupied | | 72,443 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 72,443 |
|
Consumer | | 325,928 |
| | 1,446 |
| | 702 |
| | — |
| | 2,148 |
| | 4,149 |
| | 332,225 |
|
Total | | $ | 8,163,583 |
| | $ | 10,190 |
| | $ | 5,444 |
| | $ | 581 |
| | $ | 16,215 |
| | $ | 66,189 |
| | $ | 8,245,987 |
|
The following is an analysis of impaired loans as of March 31, 2018 and December 31, 2017:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Recorded Investment of Loans Collectively Measured for Contingency Provision | | Recorded Investment of Loans Individually Measured for Specific Impairment | | Impaired Loans With Recorded Allowance | | Impaired Loans Without Recorded Allowance |
| | Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | Recorded Investment | | Unpaid Principal Balance |
March 31, 2018 | | (in thousands) |
Commercial business: | | | | | | | | | | | | | | |
Secured | | $ | 3,221,659 |
| | $ | 44,600 |
| | $ | 13,836 |
| | $ | 18,931 |
| | $ | 5,657 |
| | $ | 30,764 |
| | $ | 33,785 |
|
Unsecured | | 120,056 |
| | 23 |
| | 23 |
| | 23 |
| | 2 |
| | — |
| | — |
|
Real estate: | | | | | | | | | | | | | | |
One-to-four family residential | | 179,700 |
| | 868 |
| | 428 |
| | 715 |
| | 22 |
| | 440 |
| | 1,017 |
|
Commercial & multifamily residential: | | | | | | | | | | | | | | |
Commercial land | | 286,613 |
| | 2,851 |
| | — |
| | — |
| | — |
| | 2,851 |
| | 2,860 |
|
Income property | | 1,870,614 |
| | 3,560 |
| | — |
| | — |
| | — |
| | 3,560 |
| | 3,623 |
|
Owner occupied | | 1,582,385 |
| | 8,556 |
| | 3,399 |
| | 4,821 |
| | 5 |
| | 5,157 |
| | 5,269 |
|
Real estate construction: | | | | | | | | | | | | | | |
One-to-four family residential: | | | | | | | | | | | | | | |
Land and acquisition | | 6,540 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
Residential construction | | 199,868 |
| | 1,210 |
| | — |
| | — |
| | — |
| | 1,210 |
| | 1,210 |
|
Commercial & multifamily residential: | | | | | | | | | | | | | | |
Income property | | 306,137 |
| | — |
| | — |
| | |