Record New Loan Production and 10 Percent Deposit Growth
Melanie Dressel, president and chief executive officer of Columbia Banking System and Columbia Bank said, upon the release of Columbia’s third quarter 2016 earnings, “The competitive landscape and interest rate environment remain challenging. However, we are very pleased with our results for the third quarter, which built upon the momentum of our second quarter performance. Our bankers delivered another impressive quarter of record loan production while maintaining good portfolio diversification. We also had outstanding year-over-year deposit growth of 10 percent, while our cost of funds remained one of the best in the country.”
Highlights
• Net income of $27.5 million with diluted earnings per common share of $0.47
• Record new loan production for the quarter of $375.3 million, resulting in solid loan growth of $152.6 million, or 10 percent annualized
• Deposits increased $384.6 million during the quarter, resulting in growth of 10 percent from 3Q 2015
• Nonperforming assets to period end assets ratio improves to 0.32 percent, lowest in 8 years
• Net interest margin expanded to 4.13 percent
• For the seventh time, Melanie Dressel honored as one of The 25 Most Powerful Women in Banking by American Banker Magazine
Balance Sheet
Total assets at September 30, 2016 were $9.59 billion, an increase of $233.1 million from June 30, 2016. Loan growth of $152.6 million during the quarter was driven by strong loan originations of $375.3 million. Loan production was diversified across the portfolio sectors, with growth primarily centered in commercial business loans. Securities available for sale were $2.36 billion at September 30, 2016, an increase of $80.5 million, or 4 percent from $2.28 billion at June 30, 2016. Total deposits at September 30, 2016 were $8.06 billion, an increase of $384.6 million from $7.67 billion at June 30, 2016. Core deposits comprised 97 percent of total deposits and were $7.81 billion at September 30, 2016, an increase of $361.1 million from June 30, 2016. The average cost of total deposits for the quarter was 0.04 percent, unchanged from the second quarter of 2016.
Income Statement
Net Interest Income
Net interest income for the third quarter of 2016 was $85.6 million, an increase of $3.4 million and $3.9 million from the linked and prior year periods, respectively. The linked quarter increase was driven principally by higher loan and securities volumes as well as higher rates on loans. The increase from the prior year period was also due to higher loan and securities volumes, partially offset by lower incremental accretion income on loans, which was $1.8 million lower in the current quarter as compared to the third quarter of 2015. For additional information regarding net interest income, see the “Average Balances and Rates” table.
Noninterest Income
Noninterest income was $23.2 million for the third quarter of 2016, an increase of $1.2 million compared to $21.9 million for the second quarter of 2016. The linked quarter increase was due to lower expense related to the change in FDIC loss-sharing asset as well as higher investment security gains.
Compared to the third quarter of 2015, noninterest income increased by $667 thousand due to lower expenses from the FDIC loss-sharing asset.
The change in the FDIC loss-sharing asset has been a significant component of noninterest income but, as the larger loss-sharing agreements have expired, the significance has diminished.
