Organizational Update
Columbia Banking System, Inc. ("Columbia," the "Company," "we," or "our"), the parent company of Umpqua Bank, and Pacific Premier Bancorp, Inc. ("Pacific Premier") (Nasdaq: PPBI), the parent company of Pacific Premier Bank, National Association, jointly announced in a separate press release on April 23, 2025 that they have entered into a definitive merger agreement, pursuant to which Columbia will acquire Pacific Premier in an all-stock transaction. The combined company will have approximately $70 billion in assets and will be a market leader in the largest banking markets within the Western U.S. The acquisition, which is anticipated to close in the second half of 2025, is projected to deliver mid-teens earnings-per-share accretion and enhance scale in key market areas, including Southern California. Columbia and Pacific Premier will hold a joint conference call to discuss this announcement, and details are available in the "Earnings Presentation and Conference Call" section of this press release.

During the first quarter, Columbia opened a branch location in Denver, Colorado. Our first retail office in Colorado supports our commercial, wealth, trust, retail business, and healthcare banking teams already serving customers in the market. We continue to make progress on our plans to open additional branches in the coming months in support of our customers and bankers.

Net Interest Income
Net interest income was $425 million for the first quarter of 2025, down $12 million from the prior quarter. The decrease reflects lower interest income that was only partially offset by lower funding costs, due in part to the reductions in the federal funds rate that occurred in November and December. Lower accretion income, primarily related to investment securities income, accounted for the majority of the decline in net interest income.

Columbia's net interest margin was 3.60% for the first quarter of 2025, down 4 basis points from the fourth quarter of 2024. Lower earning asset yields were only partially offset by lower funding costs. Lower accretion income contributed to a decline in the yield on investment securities. The cost of interest-bearing deposits decreased 14 basis points from the prior quarter to 2.52% for the first quarter of 2025, which compares to 2.51% for the month of March and 2.50% as of March 31, 2025. Columbia's cost of interest-bearing liabilities decreased 18 basis points from the prior quarter to 2.80% for the first quarter of 2025, which compares to 2.76% for the month of March and 2.74% as of March 31, 2025. Please refer to the Q1 2025 Earnings Presentation for additional net interest margin change details and interest rate sensitivity information as well as to our non-GAAP disclosures in this press release for the impact of purchase accounting accretion and amortization on individual line items.

Non-interest Income
Non-interest income was $66 million for the first quarter of 2025, up $17 million from the prior quarter. The increase was driven by quarterly changes in fair value adjustments and mortgage servicing rights ("MSR") hedging activity, due to interest rate fluctuations during the quarter, collectively resulting in a net fair value gain of $9 million in the first quarter compared to a net fair value loss of $6 million in the fourth quarter, as detailed in our non-GAAP disclosures. Excluding these items, non-interest income was up $2 million² between periods, due primarily to a $2 million loss on the sale of loans in the fourth quarter that did not repeat in the first quarter. Other changes include a slower level of customer activity that is typical for the first quarter.

Non-interest Expense

Non-interest expense was $340 million for the first quarter of 2025, up $74 million from the prior quarter. The quarter included a $55 million accrual related to a legal settlement, as previously disclosed, and $15 million in severance expense. Excluding the legal settlement, exit and disposal costs, and merger and restructuring expense, which includes the severance expense, non-interest expense was $270 million², up $7 million from the prior quarter, due primarily to higher payroll taxes and elevated legal expense separate from the legal settlement. Please refer to the Q1 2025 Earnings Presentation for additional expense details.

Balance Sheet
Total consolidated assets were $51.5 billion as of March 31, 2025, down slightly from $51.6 billion as of December 31, 2024. Cash and cash equivalents were $2.1 billion as of March 31, 2025, up from $1.9 billion as of December 31, 2024. Including secured off-balance sheet lines of credit, total available liquidity was $19.0 billion as of March 31, 2025, representing 37% of total assets, 45% of total deposits, and 131% of uninsured deposits. Available-for-sale securities, which are held on balance sheet at fair value, were $8.2 billion as of March 31, 2025, a decrease of $46 million relative to December 31, 2024, as paydowns slightly offset an increase in the fair value of the portfolio. Please refer to the Q1 2025 Earnings Presentation for additional details related to our securities portfolio and liquidity position.

Gross loans and leases were $37.6 billion as of March 31, 2025, a decrease of $65 million relative to December 31, 2024. "Loan payoffs and a slower pace of origination volume contributed to a slight portfolio contraction in the quarter," commented Tory Nixon, President of Umpqua Bank. "Our teams remain focused on relationship-driven loan volume, which expands our deposit and core fee income generation opportunities as we deliver needs-based solutions to our customers and prospects." Please refer to the Q1 2025 Earnings Presentation for additional details related to our loan portfolio, which include underwriting characteristics, the composition of our commercial portfolios, and disclosure related to our office portfolio.

Total deposits were $42.2 billion as of March 31, 2025, an increase of $497 million relative to December 31, 2024, as customer deposits increased $440 million during the quarter. "We experienced strong customer deposit growth in March, following anticipated seasonal balance declines earlier in the quarter," stated Mr. Nixon. "Our small business campaigns continue to bring new business to the bank, complementing our success with middle-market and corporate customers." Customer deposit growth was used to help pay down $550 million in FHLB Advances during the first quarter. Please refer to the Q1 2025 Earnings Presentation for additional details related to deposit characteristics and flows.

Credit Quality
The allowance for credit losses was $439 million, or 1.17% of loans and leases, as of March 31, 2025, compared to $441 million, or 1.17% of loans and leases, as of December 31, 2024. The provision for credit losses was $27 million for the first quarter of 2025, and reflects credit migration trends, charge-off activity, and changes in the economic forecasts used in credit models.

Net charge-offs were 0.32% of average loans and leases (annualized) for the first quarter of 2025, compared to 0.27% for the fourth quarter of 2025. Net charge-offs in the FinPac portfolio were $17 million in the first quarter, down from $19 million in the fourth quarter as improvement continues within the transportation sector of the portfolio. Net charge-offs excluding the FinPac portfolio were $13 million in the first quarter, compared to $6 million in the fourth quarter. The increase reflects the partial charge-off of a loan with a previously established reserve. Non-performing assets were $178 million, or 0.35% of total assets, as of March 31, 2025, compared to $170 million, or 0.33% of total assets, as of December 31, 2024. Please refer to the Q1 2025 Earnings Presentation for additional details related to the allowance for credit losses and other credit trends.

Capital
Columbia's book value per common share was $24.93 as of March 31, 2025, compared to $24.43 as of December 31, 2024. The increase primarily reflects a change in accumulated other comprehensive (loss) income ("AOCI") to $(358) million at March 31, 2025, compared to $(462) million at the prior quarter-end. The change in AOCI is due primarily to a decrease in the tax-effected net unrealized loss on available-for-sale securities to $337 million as of March 31, 2025, compared to $434 million as of December 31, 2024. Tangible book value per common share³ was $17.86 as of March 31, 2025, compared to $17.20 as of December 31, 2024.

Columbia's estimated total risk-based capital ratio was 12.8%, and its estimated common equity tier 1 risk-based capital ratio was 10.6% as of March 31, 2025, compared to 12.8% and 10.5%, respectively, as of December 31, 2024. Columbia remains above current "well-capitalized" regulatory minimums. The regulatory capital ratios as of March 31, 2025 are estimates, pending completion and filing of Columbia's regulatory reports.

Earnings Presentation and Conference Call Information
Columbia's Q1 2025 Earnings Presentation provides additional disclosure. A copy will be available on our investor relations page: www.columbiabankingsystem.com.

Columbia and Pacific Premier will hold a joint conference call to discuss the definitive merger agreement on April 23, 2025 at 3:00 p.m. PT (6:00 p.m. ET). During the call, Columbia's management team will also discuss its first quarter 2025 financial results, replacing the call previously scheduled for April 24, 2025.

Participants may join the audiocast or register for the call using the link below to receive dial-in details and their own unique PINs. It is recommended you join 10 minutes prior to the start time.

Join the audiocast: https://edge.media-server.com/mmc/p/ruitqcd6/
Register for the call: https://register-conf.media-server.com/register/BIf5345fce534d4cddaaa08c0ab8dc548b
Access the replay through Columbia's investor relations page: https://www.columbiabankingsystem.com/news-market-data/event-calendar/default.aspx

About Columbia Banking System, Inc.
Columbia (Nasdaq: COLB) is headquartered in Tacoma, Washington and is the parent company of Umpqua Bank, an award-winning western U.S. regional bank based in Lake Oswego, Oregon. Umpqua Bank is the largest bank headquartered in the Northwest and one of the largest banks headquartered in the West with locations in Arizona, California, Colorado, Idaho, Nevada, Oregon, Utah, and Washington. With over $50 billion of assets, Umpqua Bank combines the resources, sophistication, and expertise of a national bank with a commitment to deliver superior, personalized service. The bank supports consumers and businesses through a full suite of services, including retail and commercial banking; Small Business Administration lending; institutional and corporate banking; and equipment leasing. Umpqua Bank customers also have access to comprehensive investment and wealth management expertise as well as healthcare and private banking through Columbia Wealth Advisors and Columbia Trust Company, a division of Umpqua Bank. Learn more at www.columbiabankingsystem.com.

Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These statements are necessarily subject to risk and uncertainty and actual results could differ materially due to various risk factors, including those set forth from time to time in our filings with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements and we undertake no obligation to update any such statements. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "target," "projects," "outlook," "forecast," "will," "may," "could," "should," "can" and similar references to future periods. In this press release we make forward-looking statements about strategic and growth initiatives and the result of such activity. Risks and uncertainties that could cause results to differ from forward-looking statements we make include, without limitation: current and future economic and market conditions, including the effects of declines in housing and commercial real estate prices, high unemployment rates, continued or renewed inflation and any recession or slowdown in economic growth particularly in the western United States; economic forecast variables that are either materially worse or better than end of quarter projections and deterioration in the economy that could result in increased loan and lease losses, especially those risks associated with concentrations in real estate related loans; the impact of proposed or imposed tariffs by the U.S. government and retaliatory tariffs proposed or imposed by U.S. trading partners that could have an adverse impact on customers; our ability to effectively manage problem credits; the impact of bank failures or adverse developments at other banks on general investor sentiment regarding the liquidity and stability of banks; changes in interest rates that could significantly reduce net interest income and negatively affect asset yields and valuations and funding sources; changes in the scope and cost of FDIC insurance and other coverage; our ability to successfully implement efficiency and operational excellence initiatives; our ability to successfully develop and market new products and technology; changes in laws or regulations; potential adverse reactions or changes to business or employee relationships; the effect of geopolitical instability, including wars, conflicts and terrorist attacks; and natural disasters and other similar unexpected events outside of our control. We also caution that the amount and timing of any future common stock dividends or repurchases will depend on the earnings, cash requirements and financial condition of Columbia, market conditions, capital requirements, applicable law and regulations (including federal securities laws and federal banking regulations), and other factors deemed relevant by Columbia's Board of Directors, and may be subject to regulatory approval or conditions.

 

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Measures
In addition to results presented in accordance with generally accepted accounting principles in the United States of America ("GAAP"), this press release contains certain non-GAAP financial measures. The Company believes presenting certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends, and our financial position. We utilize these measures for internal planning and forecasting purposes, and operating pre-provision net revenue and operating return on tangible common equity are also used as part of our incentive compensation program for our executive officers. We, as well as securities analysts, investors, and other interested parties, also use these measures to compare peer company operating performance. We believe that our presentation and discussion, together with the accompanying reconciliations, provides a complete understanding of factors and trends affecting our business and allows investors to view performance in a manner similar to management. These non-GAAP measures should not be considered a substitution for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

 

 

 

 

 

FORWARD-LOOKING STATEMENTS

This communication may contain certain forward-looking statements, including, but not limited to, certain plans, expectations, goals, projections, and statements about the benefits of the proposed business combination transaction between Columbia Banking System, Inc. ("Columbia") and Pacific Premier Bancorp, Inc. ("Pacific Premier") (the "Transaction"), the plans, objectives, expectations and intentions of Columbia and Pacific Premier, the expected timing of completion of the Transaction, and other statements that are not historical facts.  Such statements are subject to numerous assumptions, risks, and uncertainties.  All statements other than statements of historical fact, including statements about beliefs and expectations, are forward-looking statements.  Forward-looking statements may be identified by words such as "expect," "anticipate," "believe," "intend," "estimate," "plan," "believe," "target," "goal," or similar expressions, or future or conditional verbs such as "will," "may," "might," "should," "would," "could," or similar variations.  The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995.

Although there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements or historical performance: changes in general economic, political, or industry conditions, and in conditions impacting the banking industry specifically; uncertainty in U.S. fiscal, monetary and trade policy, including the interest rate policies of the Federal Reserve Board or the effects of any declines in housing and commercial real estate prices, high or increasing unemployment rates, continued or renewed inflation, the impact of proposed or imposed tariffs by the U.S. government or retaliatory tariffs proposed or imposed by U.S. trading partners that could have an adverse impact on customers or any recession or slowdown in economic growth particularly in the western United States; volatility and disruptions in global capital and credit markets; the impact of bank failures or adverse developments at other banks on general investor sentiment regarding the stability and liquidity of banks; changes in interest rates that could significantly reduce net interest income and negatively affect asset yields and valuations and funding sources, including impacts on prepayment speeds; competitive pressures among financial institutions and nontraditional providers of financial services, including on product pricing and services; concentrations within Columbia's or Pacific Premier's loan portfolio (including commercial real estate loans), large loans to certain borrowers, and large deposits from certain clients; the success, impact, and timing of Columbia's and Pacific Premier's respective business strategies, including market acceptance of any new products or services and Columbia's and Pacific Premier's ability to successfully implement efficiency and operational excellence initiatives; the nature, extent, timing, and results of governmental actions, examinations, reviews, reforms, regulations, and interpretations; changes in laws or regulations; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement to which Columbia and Pacific Premier are parties; the outcome of any legal proceedings that may be instituted against Columbia or Pacific Premier; delays in completing the Transaction; the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Transaction); the failure to obtain shareholder or stockholder approvals, as applicable, or to satisfy any of the other conditions to the closing of the Transaction on a timely basis or at all; changes in Columbia's or Pacific Premier's share price before closing, including as a result of the financial performance of the other party prior to closing, or more generally due to broader stock market movements, and the performance of financial companies and peer group companies; the possibility that the anticipated benefits of the Transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Columbia and Pacific Premier do business; certain restrictions during the pendency of the proposed Transaction that may impact the parties' ability to pursue certain business opportunities or strategic Transactions; the possibility that the Transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of management's attention from ongoing business operations and opportunities; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the Transaction; the ability to complete the Transaction and integration of Columbia and Pacific Premier promptly and successfully; the dilution caused by Columbia's issuance of additional shares of its capital stock in connection with the Transaction; and other factors that may affect the future results of Columbia and Pacific Premier.  Additional factors that could cause results to differ materially from those described above can be found in Columbia's Annual Report on Form 10-K for the year ended December 31, 2024, which is on file with the Securities and Exchange Commission (the "SEC") (available here) and available on Columbia's investor relations website, www.columbiabankingsystem.com, under the heading "SEC Filings," and in other documents Columbia files with the SEC, and in Pacific Premier's Annual Report on Form 10-K for the year ended December 31, 2024, which is on file with the SEC (available here) and available on Pacific Premier's website, www.investors.ppbi.com, under the heading "SEC Filings" and in other documents Pacific Premier files with the SEC.

All forward-looking statements speak only as of the date they are made and are based on information available at that time.  Neither Columbia nor Pacific Premier assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws.  As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.

IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT

In connection with the proposed Transaction, Columbia will file with the SEC a Registration Statement on Form S-4 that will include a Joint Proxy Statement of Columbia and Pacific Premier and a Prospectus of Columbia, as well as other relevant documents concerning the Transaction.  Certain matters in respect of the Transaction involving Columbia and Pacific Premier will be submitted to Columbia's and Pacific Premier's shareholders or stockholders, as applicable, for their consideration.  This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.  INVESTORS, COLUMBIA SHAREHOLDERS AND PACIFIC PREMIER STOCKHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION WHEN THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.  Shareholders or stockholders, as applicable, will be able to obtain a free copy of the definitive joint proxy statement/prospectus, as well as other filings containing information about the Transaction, Columbia and Pacific Premier, without charge, at the SEC's website, www.sec.gov.  Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to Columbia Banking System, Inc., Attention: Investor Relations, 1301 A Street, Tacoma, WA 98402-4200, (503) 727-4100 or to Pacific Premier Bancorp, Inc., Attention: Corporate Secretary, 17901 Von Karman Avenue, Suite 1200, Irvine, CA 92614, (949) 864-8000.

PARTICIPANTS IN THE SOLICITATION

Columbia, Pacific Premier, and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Columbia shareholders or Pacific Premier stockholders in connection with the Transaction under the rules of the SEC.  Information regarding Columbia's directors and executive officers is available in the sections entitled "Directors, Executive Officers and Corporate Governance" and "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" in Columbia's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on February 25, 2025 (available here); in the sections entitled "Board Structure and Compensation," "Compensation Discussion and Analysis," "Compensation Tables," "Information about Executive Officers," "Beneficial Ownership of Directors and Executive Officers" and "Certain Relationships and Related Transactions" in Columbia's definitive proxy statement relating to its 2025 Annual Meeting of Shareholders, which was filed with the SEC on April 3, 2025 (available here); and other documents filed by Columbia with the SEC.  Information regarding Pacific Premier's directors and executive officers is available in the sections entitled "Directors, Executive Officers and Corporate Governance" and "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" in Pacific Premier's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on February 28, 2025 (available here); in the sections entitled "Compensation of Non-Employee Directors," "Security Ownership of Directors and Executive Officers," "Certain Relationships and Related Transactions," "Summary Compensation Table," "Employment Agreements, Salary Continuation Plans, Severance, and Change-in-Control Payments," and "Summary of Potential Termination Payments" in Pacific Premier's definitive proxy statement relating to its 2025 Annual Meeting of Stockholders, which was filed with the SEC on April 7, 2025 (available here); and other documents filed by Pacific Premier with the SEC.  To the extent holdings of Columbia common stock by the directors and executive officers of Columbia or holdings of Pacific Premier common stock by directors and executive officers of Pacific Premier have changed from the amounts held by such persons as reflected in the documents described above, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC.  Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus relating to the Transaction.  Free copies of this document may be obtained as described in the preceding paragraph.

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/columbia-banking-system-inc-reports-first-quarter-2025-results-302436142.html

SOURCE Columbia Banking System, Inc.