Columbia Banking System (COLB) Q4 2024 earnings summary

Executive summary

• Achieved full-year 2024 reported net income of $534M and operating net income of $568M, with diluted EPS of $2.55 (reported) and $2.71 (operating); Q4 net income was $143M, operating net income $150M, and EPS $0.68 (reported), $0.71 (operating).

• Net income rose 53% year-over-year in Q4, with a 29% increase in operating net income, driven by improved net interest margin, commercial loan growth, and higher core fee income.

• Achieved $82M in annualized cost savings in 2024, reinvesting $12M into growth markets, technology, and talent, with five new branches planned for 2025.

• Maintained strong credit quality, with low delinquencies, net charge-offs, and robust capital ratios.

• Expanded presence in high-growth Western markets, with a diversified loan and deposit base.

Financial highlights

• Q4 net interest income was $437M, with net interest margin increasing 8 bps sequentially to 3.64%; interest-bearing deposit costs declined to 2.66%.

• Q4 EPS was $0.68; operating EPS was $0.71; operating return on average tangible equity reached 16%.

• Non-interest expense in Q4 declined $5M sequentially to $263M–$267M, reflecting lower benefits expense.

• Total loans increased $178M in Q4, driven by $228M growth in commercial loans, offsetting a $50M decline in CRE loans; loans and leases at $37.7B at year-end.

• Deposits totaled $42B at year-end, with a granular, diversified base; borrowings declined $550M; $500M in broker deposits added at lower cost.

• Provision for credit loss was $28M; allowance for credit loss at 1.17% of total loans (1.33% including credit discount).

• Non-interest income was $50M, with operating non-interest income at $55.3M, down from $59.6M in Q3.

• Total assets at December 31, 2024 were $52.2B.

Outlook and guidance

• Expect low single-digit total loan growth in 2025, with C&I growth in the low- to mid-single digits and continued contraction in transactional real estate loans.

• Operating expense guidance for 2025 is $1.0–$1.01B, reflecting inflation and reinvestment in branches and talent.

• NIM expected to be in the lower half of recent quarters in early 2025 due to seasonal deposit outflows and increased wholesale funding; potential for improvement later in the year if deposit growth materializes.

• Five new branches to open in 2025, funded by cost savings from 2024 consolidations.

• Continued investments in real-time payments, digital solutions, and data analytics to drive fee income growth and operational efficiency.