Columbia Banking System (COLB) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $146 million, with diluted EPS of $0.70 and operating EPS of $0.69, reflecting strong profitability and capital generation; year-to-date net income reached $390 million and operating net income $418 million.

• Achieved core deposit growth while reducing deposit costs, and completed $270 million in merger-to-date gross expense reductions, doubling the original target; $82 million in annualized savings realized, with $12 million reinvested into growth and technology.

• Reinvested in talent, technology, and new markets, expanding presence in Arizona, Colorado, Utah, and California, with new branches opened and more planned.

• Focused on relationship banking, reducing exposure to transactional loans and funding sources, and shifting loan mix toward C&I lending.

• Completed an enterprise-wide operational review, realizing significant cost savings and improving profitability outlook.

Financial highlights

• Q3 2024 net interest income was $430 million, up $3 million sequentially; net interest margin held steady at 3.56%, at the upper end of the estimated range.

• Non-interest income rose by $21 million to $66 million, driven by fair value changes and higher core banking activity.

• Non-interest expense declined by $8 million to $271 million, with operating non-interest expense at $268 million, reflecting efficiency gains.

• Tangible book value per share increased 10% to $17.81, and book value per share rose to $25.17 as of September 30, 2024.

• Allowance for credit losses was 1.17% of loans and leases; nonperforming assets increased to $167.6 million (0.32% of assets).

Outlook and guidance

• Q4 2024 core expense run rate expected at $965–$985 million annualized, excluding certain items; ongoing reinvestment in talent, branches, and technology planned into 2025.

• Capital ratios expected to continue building, providing flexibility for future allocation and potential shareholder returns.

• Projected continued reductions in interest-bearing deposit costs and wholesale funding balances in Q4.

• Net interest margin expected to remain stable as deposit repricing and funding mix changes continue.

• Buyback and capital return to shareholders under active evaluation, with potential in 2025.