Columbia Banking System Inc. (COLB) filed Quarterly Report for the period ended 2009-09-30.
Columbia Banking System Inc. is a registered bank holding company whose wholly owned subsidiary Columbia State Bankconducts a full-service commercial banking business. Headquartered in Tacoma Washington the Company provides a full range of banking services to small and medium-sized businesses professionals and other individuals through banking offices located in the Tacoma metropolitan area and contiguous parts of the Puget Sound region of Washington as well as the Longview and Woodland communities in southwestern Washington. Columbia Banking System Inc. has a market cap of $261.1 million; its shares were traded at around $14.26 with and P/S ratio of 1.3. The dividend yield of Columbia Banking System Inc. stocks is 0.3%. Columbia Banking System Inc. had an annual average earning growth of 15.3% over the past 5 years.
Highlight of Business Operations:
Goodwill represented $95.5 million of our $3.17 billion in total assets and $527.9 million in total shareholders’ equity as of September 30, 2009. Goodwill is assigned to reporting units for purposes of impairment testing. The Company has three reporting units: retail banking, commercial banking, and private banking. The products and services of companies previously acquired are comparable to the Company’s retail banking operations. Accordingly, all of the Company’s goodwill is assigned to the retail banking reporting unit. We review our goodwill for impairment annually, during the third quarter. Goodwill of a reporting unit is also tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Such indicators may include, among others: a significant adverse change in legal factors or in the general business climate; significant decline in our stock price and market capitalization; unanticipated competition; the testing for recoverability of a significant asset group within a reporting unit; and an adverse action or assessment by a regulator. Any adverse change in these factors could have a significant impact on the recoverability of goodwill and could have a material impact on our consolidated financial statements.
For the third quarter 2009, the Company reported a net loss of $1.5 million, a net loss applicable to common shareholders of $2.6 million and a loss per diluted common share of $0.11, compared to a net loss of $8.8 million and a loss per diluted common share of $0.49 for the year-earlier quarter. Net loss applicable to common shareholders for 2009 is net of the preferred stock dividend of $961 thousand and the accretion of the preferred stock discount totaling $142 thousand. The net loss for the period was primarily attributable to the provision for loan and lease losses in the third quarter of 2009 reflective of the level of net charge-offs and the continued deterioration in credit quality as evidenced by the elevated level of nonperforming assets. Return on average assets and return on average common equity were (0.19%) and (2.56%), respectively, for the third quarter of 2009, compared with returns of (1.12%) and (10.10%), respectively for the same period of 2008.
For the first nine months of 2009, the Company reported a net loss of $5.5 million, a net loss applicable to common shareholders of $8.8 million and a loss per diluted common share of $(0.45), compared to net income applicable to common shareholders of $4.2 million and earnings per diluted common share of $0.23 for the first nine months of 2008. Net loss applicable to common shareholders for the first nine months of 2009 is net of the preferred stock dividend of $2.9 million and the accretion of the preferred stock discount totaling $414 thousand. The decline in net income from the prior year was primarily attributable to the large increase in the provision for loan and lease losses in the first nine months of 2009 reflective of the level of net charge-offs and the continued deterioration in credit quality. Return on average assets and return on average equity were (0.24%) and (3.23%), respectively, for the first nine months of 2009, compared with returns of 0.18% and 1.59%, respectively for the same period of 2008. As stated above, the Company’s results for the first nine months of 2009 declined from the same period in 2008, primarily as a result of a provision for loan and lease losses of $48.5 million in the current period as compared to $27.9 million in the year-earlier period.
The provision for loan and lease losses for the third quarter of 2009 was $16.5 million compared with $10.5 million for the third quarter of 2008. The increased provision reflects management’s continuing assessment of the credit quality of the Company’s loan portfolio, which is affected by a broad range of economic factors, including weak valuations in commercial and residential real estate collateral. The provision increased the Company’s total allowance for loan and lease losses to 2.50% of net loans at September 30, 2009 from 1.91% at year-end. Net charge-offs for the current quarter were $13.7 million compared to $16.4 million for the third quarter of 2008.
The provision for loan and lease losses for the first nine months of 2009 was $48.5 million compared with $27.9 million for the first nine months of 2008. Net charge-offs for the first nine months of 2009 were $39.6 million as compared to $18.7 million for the first nine months of 2008.
On August 11, 2009, we consummated an underwritten public offering of 9,775,000 shares of our common stock at a purchase price of $12.25 per share, resulting in gross proceeds of $120.0 million and net proceeds to us of approximately $113.8 million after deducting underwriting discounts and commissions and other expenses of the offering. As a result of our completion of a qualifying offering prior to December 31, 2009, the number of shares of our common stock subject to the warrant we issued to the United States Treasury in connection with our participation in Treasury’s Capital Purchase Program has been reduced by 50% from 796,046 to 398,023.
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