x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
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¨
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Washington
|
91-1422237
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
Number)
|
Common
Stock, No Par Value
|
The NASDAQ Stock Market LLC |
(Title
of class)
|
(Name of each exchange on which
registered)
|
Portions
of the Registrant’s definitive 2009 Annual Meeting Proxy Statement Dated
March 23, 2009.
|
Part III
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PART
I
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||
Item 1.
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3
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Item 1A.
|
15
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Item
1B.
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18
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Item
2.
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18
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Item
3.
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19
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Item
4.
|
19
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PART
II
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||
Item
5.
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20
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Item
6.
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22
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Item
7.
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26
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Item
7A.
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49
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Item
8.
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51
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Item
9.
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86
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Item
9A.
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86
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Item
9B.
|
88
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PART
III
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||
Item
10.
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89
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Item
11.
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89
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Item
12.
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89
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Item
13.
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89
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Item
14.
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89
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PART
IV
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||
Item 15.
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90
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91
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||
92
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the
risks associated with lending and potential adverse changes in credit
quality;
|
|
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increased
delinquency rates;
|
|
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competition
from other financial services companies in our
markets;
|
|
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the
risks presented by a continuing economic slowdown, which could adversely
affect credit quality, collateral values, including real estate
collateral, investment values, liquidity and loan
originations;
|
|
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demand
for banking products and services may
decline;
|
|
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legislative
or regulatory changes that adversely affect our business or our ability to
complete prospective future
acquisitions;
|
|
|
the
risks presented by a continued economic slowdown and the public stock
market volatility, which could adversely affect our stock value and our
ability to raise capital in the future;
and
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|
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our
success in managing risks involved in the
foregoing.
|
BUSINESS
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Name
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Principal
Position
|
Melanie J. Dressel
|
President
& Chief Executive Officer
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Andrew McDonald
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Executive
Vice President & Chief Credit Officer
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Mark W. Nelson
|
Executive
Vice President & Chief Operating Officer
|
Kent
L Roberts
|
Executive
Vice President & Human Resources Director
|
Gary R. Schminkey
|
Executive
Vice President & Chief Financial
Officer
|
Personal
Banking
|
Business
Banking
|
|
•Checking
and Saving Accounts
|
•Checking
& Saving Accounts
|
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•Online
Banking
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•Online
Banking
|
|
•Electronic
Bill Pay
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•Electronic
Bill Pay
|
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•Consumer
Lending
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•Remote
Deposit Capture
|
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•Residential
Lending
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•Cash
Management
|
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•Visa
Card Services
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•Commercial
& Industrial Lending
|
|
•Investment
Services
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•Real
Estate and Real Estate Construction Lending
|
|
•Private
Banking
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•Equipment
Finance
|
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•Small
Business Services
|
||
•Visa
Card Services
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||
•Investment
Services
|
||
•International
Banking
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||
•Merchant
Card Services
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(1)
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Securities
and insurance products are offered by Primevest Financial Services, Inc.,
an independent, registered broker/dealer. Member FINRA/SIPC.
Investment products are * Not FDIC insured * May lose value * Not
bank guaranteed * Not a deposit * Not insured by any federal government
agency.
|
(3)
|
Source:
FDIC Annual Summary of Deposit Report as of June 30,
2008.
|
(3)
|
Source:
FDIC Annual Summary of Deposit Report as of June 30,
2008.
|
ITEM 1A.
|
RISK
FACTORS
|
·
|
loan
delinquencies may increase further;
|
·
|
collateral
for loans made may decline in value, in turn reducing customers’ borrowing
power, reducing the value of assets and collateral associated with
existing loans;
|
·
|
certain
securities within our investment portfolio could become other than
temporarily impaired, requiring a write down through earnings to fair
value thereby reducing equity;
|
·
|
demand
for banking products and services may
decline
|
·
|
low
cost or non-interest bearing deposits may decrease;
and
|
·
|
substantial
increase in office space availability in downtown
Seattle.
|
UNRESOLVED
STAFF COMMENTS
|
PROPERTIES
|
LEGAL
PROCEEDINGS
|
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY
HOLDERS
|
MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
|
Cash
Dividend
|
||||||||||||
2008
|
High
|
Low
|
Declared
|
|||||||||
First
quarter
|
$ | 29.90 | $ | 21.07 | $ | 0.17 | ||||||
Second
quarter
|
$ | 29.57 | $ | 19.31 | 0.17 | |||||||
Third
quarter
|
$ | 29.00 | $ | 8.50 | 0.17 | |||||||
Fourth
quarter
|
$ | 18.49 | $ | 7.64 | 0.07 | |||||||
For
the year
|
$ | 29.90 | $ | 7.64 | $ | 0.58 | ||||||
Cash
Dividend
|
||||||||||||
2007
|
High
|
Low
|
Declared
|
|||||||||
First
quarter
|
$ | 35.96 | $ | 32.36 | $ | 0.15 | ||||||
Second
quarter
|
$ | 34.18 | $ | 28.35 | 0.17 | |||||||
Third
quarter
|
$ | 33.41 | $ | 24.71 | 0.17 | |||||||
Fourth
quarter
|
$ | 34.00 | $ | 27.19 | 0.17 | |||||||
For
the year
|
$ | 35.96 | $ | 24.71 | $ | 0.66 |
Year
Ended December 31, 2008
|
||||||||||||
Number
of Shares to be Issued Upon Exercise of Outstanding Options, Warrants and
Rights (1)
|
Weighted-Average
Exercise Price of Outstanding Options, Warrants and Rights
|
Number
of Shares Remaining Available for Future Issuance Under Equity
Compensation Plans (2)
|
||||||||||
Equity
compensation plans approved by security holders
|
201,981 | $ | 16.49 | 116,752 | ||||||||
Equity compensation plans not approved by security holders
|
- - | - - | - - |
(1)
|
Consists
of shares that are subject to outstanding
options.
|
(2)
|
Includes
87,611shares available for future issuance under the stock option and
equity compensation plan and 29,141 shares available for purchase under
the Employee Stock Purchase Plan as of December 31,
2008.
|
Period Ending
December 31,
|
||||||||||||||||||||||||
Index
|
2003
|
2004
|
2005
|
2006
|
2007
|
2008
|
||||||||||||||||||
Columbia
Banking System, Inc.
|
100.00 | 122.54 | 142.13 | 177.95 | 154.04 | 63.61 | ||||||||||||||||||
NASDAQ
Composite
|
100.00 | 108.59 | 110.08 | 120.56 | 132.39 | 78.72 | ||||||||||||||||||
Columbia
Peer Group
|
100.00 | 130.01 | 140.31 | 163.99 | 115.95 | 67.67 |
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
For
the Year
|
(dollars
in thousands except per share)
|
|||||||||||||||||||
Total
revenue
|
$ | 134,363 | $ | 136,568 | $ | 122,435 | $ | 115,698 | $ | 94,187 | ||||||||||
Net
interest income
|
$ | 119,513 | $ | 108,820 | $ | 97,763 | $ | 90,912 | $ | 71,943 | ||||||||||
Provision
for loan and lease losses
|
$ | 41,176 | $ | 3,605 | $ | 2,065 | $ | 1,520 | $ | 995 | ||||||||||
Noninterest
income
|
$ | 14,850 | $ | 27,748 | $ | 24,672 | $ | 24,786 | $ | 22,244 | ||||||||||
Noninterest
expense
|
$ | 92,125 | $ | 88,829 | $ | 76,134 | $ | 72,855 | $ | 61,326 | ||||||||||
Net
income
|
$ | 5,968 | $ | 32,381 | $ | 32,103 | $ | 29,631 | $ | 22,513 | ||||||||||
Per
Common Share
|
||||||||||||||||||||
Net
Income (Basic)
|
$ | 0.31 | $ | 1.93 | $ | 2.01 | $ | 1.89 | $ | 1.55 | ||||||||||
Net
Income (Diluted)
|
$ | 0.31 | $ | 1.91 | $ | 1.99 | $ | 1.87 | $ | 1.52 | ||||||||||
Book
Value
|
$ | 18.82 | $ | 19.03 | $ | 15.71 | $ | 14.29 | $ | 13.03 | ||||||||||
Averages
|
||||||||||||||||||||
Total
Assets
|
$ | 3,134,054 | $ | 2,837,162 | $ | 2,473,404 | $ | 2,290,746 | $ | 1,919,134 | ||||||||||
Interest-earning
assets
|
$ | 2,851,555 | $ | 2,599,379 | $ | 2,265,393 | $ | 2,102,513 | $ | 1,769,470 | ||||||||||
Loans
|
$ | 2,264,486 | $ | 1,990,622 | $ | 1,629,616 | $ | 1,494,567 | $ | 1,186,506 | ||||||||||
Securities
|
$ | 565,299 | $ | 581,122 | $ | 623,631 | $ | 605,395 | $ | 552,742 | ||||||||||
Deposits
|
$ | 2,382,484 | $ | 2,242,134 | $ | 1,976,448 | $ | 1,923,778 | $ | 1,690,513 | ||||||||||
Core
deposits
|
$ | 1,911,897 | $ | 1,887,391 | $ | 1,664,247 | $ | 1,689,270 | $ | 1,502,843 | ||||||||||
Shareholders'
equity
|
$ | 354,387 | $ | 289,297 | $ | 237,843 | $ | 214,612 | $ | 169,414 | ||||||||||
Financial
Ratios
|
||||||||||||||||||||
Net
interest margin
|
4.38 | % | 4.35 | % | 4.49 | % | 4.44 | % | 4.19 | % | ||||||||||
Return
on average assets
|
0.19 | % | 1.14 | % | 1.30 | % | 1.29 | % | 1.17 | % | ||||||||||
Return
on average common equity
|
1.59 | % | 11.19 | % | 13.50 | % | 13.81 | % | 13.29 | % | ||||||||||
Return
on average tangible common equity (2)
|
2.72 | % | 14.53 | % | 15.88 | % | 16.63 | % | 14.02 | % | ||||||||||
Efficiency
ratio (3)
|
59.88 | % | 61.33 | % | 58.95 | % | 61.20 | % | 63.20 | % | ||||||||||
Average
equity to average assets
|
11.31 | % | 10.20 | % | 9.62 | % | 9.37 | % | 8.83 | % | ||||||||||
At
Year End
|
||||||||||||||||||||
Total
assets
|
$ | 3,097,079 | $ | 3,178,713 | $ | 2,553,131 | $ | 2,377,322 | $ | 2,176,730 | ||||||||||
Loans
|
$ | 2,232,332 | $ | 2,282,728 | $ | 1,708,962 | $ | 1,564,704 | $ | 1,359,743 | ||||||||||
Allowance
for loan and lease losses
|
$ | 42,747 | $ | 26,599 | $ | 20,182 | $ | 20,829 | $ | 19,881 | ||||||||||
Securities
|
$ | 540,525 | $ | 572,973 | $ | 605,133 | $ | 585,332 | $ | 642,759 | ||||||||||
Deposits
|
$ | 2,382,151 | $ | 2,498,061 | $ | 2,023,351 | $ | 2,005,489 | $ | 1,862,866 | ||||||||||
Core
deposits
|
$ | 1,941,047 | $ | 1,996,393 | $ | 1,701,528 | $ | 1,703,030 | $ | 1,605,938 | ||||||||||
Shareholders'
equity
|
$ | 415,385 | $ | 341,731 | $ | 252,347 | $ | 226,242 | $ | 203,154 | ||||||||||
Full-time
equivalent employees
|
735 | 775 | 657 | 651 | 625 | |||||||||||||||
Banking
offices
|
53 | 55 | 40 | 40 | 39 | |||||||||||||||
Nonperforming
Assets
|
||||||||||||||||||||
Nonaccrual
loans
|
$ | 106,163 | $ | 14,005 | $ | 2,414 | $ | 4,733 | $ | 8,222 | ||||||||||
Restructured
loans
|
587 | 456 | 1,066 | 124 | 227 | |||||||||||||||
Other
real estate owned
|
2,874 | 181 | - | 18 | 680 | |||||||||||||||
Total
nonperforming assets
|
$ | 109,624 | $ | 14,642 | $ | 3,480 | $ | 4,875 | $ | 9,129 | ||||||||||
Nonperforming
loans to year end loans
|
4.78 | % | 0.63 | % | 0.20 | % | 0.31 | % | 0.62 | % | ||||||||||
Nonperforming
assets to year end assets
|
3.54 | % | 0.46 | % | 0.14 | % | 0.21 | % | 0.42 | % | ||||||||||
Allowance
for loan and lease losses to year end loans
|
1.91 | % | 1.17 | % | 1.18 | % | 1.33 | % | 1.46 | % | ||||||||||
Allowance
for loan and lease losses to nonperfomring loans
|
40.04 | % | 183.94 | % | 579.94 | % | 428.84 | % | 235.31 | % | ||||||||||
Allowance
for loan and lease losses to nonperfomring assets
|
38.99 | % | 181.66 | % | 579.94 | % | 427.26 | % | 217.78 | % | ||||||||||
Net
loan charge-offs
|
$ | 25,028 | $ | 380 | $ | 2,712 | $ | 572 | $ | 2,742 | ||||||||||
Risk-Based
Capital Ratios
|
||||||||||||||||||||
Total
capital
|
14.25 | % | 10.90 | % | 13.23 | % | 12.97 | % | 12.99 | % | ||||||||||
Tier
1 capital
|
12.99 | % | 9.87 | % | 12.21 | % | 11.82 | % | 11.75 | % | ||||||||||
Leverage
ratio
|
11.27 | % | 8.54 | % | 9.86 | % | 9.54 | % | 8.99 | % |
(1)
|
These
unaudited schedules provide selected financial information concerning the
Company that should be read in conjunction with “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
of this report.
|
(2)
|
Net
income, excluding core deposit intangible amortization, divided by average
daily shareholders’ equity, excluding average goodwill and average core
deposit intangible asset.
|
(3)
|
Noninterest
expense divided by the sum of net interest income and noninterest income
on a tax equivalent basis, excluding gains/losses on investment
securities, net cost (gain) of OREO, reserve for VISA litigation liability
and mark-to-market adjustments of interest rate floor
instruments.
|
Years
ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||
Net
interest income (1)
|
$ | 119,513 | $ | 108,820 | $ | 97,763 | $ | 90,912 | $ | 71,943 | ||||||||||
Tax
equivalent adjustment for non-taxable loan and investment securities
interest income (2)
|
5,302 | 4,337 | 3,882 | 2,508 | 2,161 | |||||||||||||||
Adjusted
net interest income
|
$ | 124,815 | $ | 113,157 | $ | 101,645 | $ | 93,420 | $ | 74,104 | ||||||||||
Noninterest
income
|
$ | 14,850 | $ | 27,748 | $ | 24,672 | $ | 24,786 | $ | 22,244 | ||||||||||
Other-than-temporary
security impairment
|
19,541 | |||||||||||||||||||
Gain
on sale of investment securities, net
|
(846 | ) | - - | (36 | ) | (6 | ) | 6 | ||||||||||||
Redemption
of Visa and MasterCard shares
|
(3,028 | ) | - - | - - | - - | - - | ||||||||||||||
Death
benefit proceeds on former officer covered by BOLI
|
(612 | ) | - - | - - | - - | - - | ||||||||||||||
Tax
equivalent adjustment for BOLI income (2)
|
1,145 | 1,016 | 908 | 849 | 710 | |||||||||||||||
Adjusted
noninterest income
|
$ | 31,050 | $ | 28,764 | $ | 25,544 | $ | 25,629 | $ | 22,960 | ||||||||||
Noninterest
expense
|
$ | 92,125 | $ | 88,829 | $ | 76,134 | $ | 72,855 | $ | 61,326 | ||||||||||
Net
gain(cost) on sale of OREO
|
49 | (5 | ) | 11 | 8 | 13 | ||||||||||||||
Interest
rate floor valuation adjustment
|
- - | - - | (1,164 | ) | - - | - - | ||||||||||||||
BOLI
policy swap net income
|
(133 | ) | - - | - - | - - | - - | ||||||||||||||
(Reserve
for)reversal of accrued Visa litigation expense
|
1,292 | (1,777 | ) | - - | - - | - - | ||||||||||||||
Adjusted
noninterest expense
|
$ | 93,333 | $ | 87,047 | $ | 74,981 | $ | 72,863 | $ | 61,339 | ||||||||||
Efficiency
ratio
|
62.46 | % | 65.04 | % | 62.18 | % | 62.97 | % | 65.11 | % | ||||||||||
Efficiency
ratio (fully taxable-equivalent)
|
59.88 | % | 61.33 | % | 58.95 | % | 61.20 | % | 63.19 | % |
(1)
|
Amount
represents net interest income before provision for loan and lease
losses.
|
(2)
|
Fully
Taxable-equivalent basis: Non-taxable revenue is increased by the
statutory tax rate of 35% to recognize the income tax benefit of the
income realized.
|
(3)
|
These
unaudited schedules provide selected financial information concerning the
Company that should be read in conjunction with “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operation”
of this report.
|
Years
ended December 31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(in
thousands, except per share amounts)
|
||||||||||||||||||||
Interest
Income:
|
||||||||||||||||||||
Loans
|
$ | 147,830 | $ | 156,253 | $ | 123,998 | $ | 99,535 | $ | 68,908 | ||||||||||
Taxable
securities
|
18,852 | 18,614 | 20,018 | 18,135 | 17,051 | |||||||||||||||
Tax-exempt
securities
|
7,976 | 7,923 | 7,042 | 4,452 | 3,770 | |||||||||||||||
Federal
funds sold and deposits with banks
|
402 | 1,427 | 617 | 85 | 337 | |||||||||||||||
Total
interest income
|
175,060 | 184,217 | 151,675 | 122,207 | 90,066 | |||||||||||||||
Interest
Expense:
|
||||||||||||||||||||
Deposits
|
45,307 | 59,930 | 40,838 | 25,983 | 16,537 | |||||||||||||||
Federal
Home Loan Bank advances
|
7,482 | 11,065 | 10,944 | 3,515 | 370 | |||||||||||||||
Long-term
obligations
|
1,800 | 2,177 | 1,992 | 1,583 | 1,162 | |||||||||||||||
Other
borrowings
|
958 | 2,225 | 138 | 214 | 54 | |||||||||||||||
Total
interest expense
|
55,547 | 75,397 | 53,912 | 31,295 | 18,123 | |||||||||||||||
Net
Interest Income
|
119,513 | 108,820 | 97,763 | 90,912 | 71,943 | |||||||||||||||
Provision
for loan and lease losses
|
41,176 | 3,605 | 2,065 | 1,520 | 995 | |||||||||||||||
Net
interest income after provision for loan and lease
losses
|
78,337 | 105,215 | 95,698 | 89,392 | 70,948 | |||||||||||||||
Noninterest
income
|
14,850 | 27,748 | 24,672 | 24,786 | 22,244 | |||||||||||||||
Noninterest
expense
|
92,125 | 88,829 | 76,134 | 72,855 | 61,326 | |||||||||||||||
Income
before income taxes
|
1,062 | 44,134 | 44,236 | 41,323 | 31,866 | |||||||||||||||
Provision
for income taxes
|
(4,906 | ) | 11,753 | 12,133 | 11,692 | 9,353 | ||||||||||||||
Net
Income
|
$ | 5,968 | $ | 32,381 | $ | 32,103 | $ | 29,631 | $ | 22,513 | ||||||||||
Net
Income Applicable to Common Shareholders
|
$ | 5,498 | $ | 32,381 | $ | 32,103 | $ | 29,631 | $ | 22,513 | ||||||||||
Earnings
per Common Share
|
||||||||||||||||||||
Basic
|
$ | 0.31 | $ | 1.93 | $ | 2.01 | $ | 1.89 | $ | 1.55 | ||||||||||
Diluted
|
$ | 0.31 | $ | 1.91 | $ | 1.99 | $ | 1.87 | $ | 1.52 | ||||||||||
Average
number of common shares outstanding (basic)
|
17,914 | 16,802 | 15,946 | 15,708 | 14,558 | |||||||||||||||
Average
number of common shares outstanding (diluted)
|
18,010 | 16,972 | 16,148 | 15,885 | 14,816 | |||||||||||||||
Total
assets at year end
|
$ | 3,097,079 | $ | 3,178,713 | $ | 2,553,131 | $ | 2,377,322 | $ | 2,176,730 | ||||||||||
Long-term
obligations
|
$ | 25,603 | $ | 25,519 | $ | 22,378 | $ | 22,312 | $ | 22,246 | ||||||||||
Cash
dividends declared on common stock
|
$ | 0.58 | $ | 0.66 | $ | 0.57 | $ | 0.39 | $ | 0.26 |
(1)
|
These
unaudited schedules provide selected financial information concerning the
Company that should be read in conjunction with “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operation”
of this report.
|
First
|
Second
|
Third
|
Fourth
|
Year
Ended
|
||||||||||||||||
Quarter
|
Quarter
|
Quarter
|
Quarter
|
December
31,
|
||||||||||||||||
(in
thousands, except per share amounts)
|
||||||||||||||||||||
2008
|
||||||||||||||||||||
Total
interest income
|
$ | 48,433 | $ | 44,323 | $ | 42,337 | $ | 39,967 | $ | 175,060 | ||||||||||
Total
interest expense
|
18,106 | 14,049 | 12,744 | 10,648 | 55,547 | |||||||||||||||
Net
interest income
|
30,327 | 30,274 | 29,593 | 29,319 | 119,513 | |||||||||||||||
Provision
for loan and lease losses
|
2,076 | 15,350 | 10,500 | 13,250 | 41,176 | |||||||||||||||
Noninterest
income
|
10,157 | 9,305 | (10,946 | ) | 6,334 | 14,850 | ||||||||||||||
Noninterest
expense
|
23,554 | 23,367 | 23,391 | 21,813 | 92,125 | |||||||||||||||
Income
(loss) before income taxes
|
14,854 | 862 | (15,244 | ) | 590 | 1,062 | ||||||||||||||
Provision(benefit)
for income taxes
|
3,877 | (1,074 | ) | (6,485 | ) | (1,224 | ) | (4,906 | ) | |||||||||||
Net
Income (Loss)
|
$ | 10,977 | $ | 1,936 | $ | (8,759 | ) | $ | 1,814 | $ | 5,968 | |||||||||
Net
Income (Loss) Per Common Share:
|
||||||||||||||||||||
Basic
|
$ | 0.61 | $ | 0.11 | $ | (0.49 | ) | $ | 0.07 | $ | 0.31 | |||||||||
Diluted
|
$ | 0.61 | $ | 0.11 | $ | (0.49 | ) | $ | 0.07 | $ | 0.31 | |||||||||
2007
|
||||||||||||||||||||
Total
interest income
|
$ | 41,146 | $ | 43,255 | $ | 49,378 | $ | 50,438 | $ | 184,217 | ||||||||||
Total
interest expense
|
16,443 | 17,560 | 20,518 | 20,876 | 75,397 | |||||||||||||||
Net
interest income
|
24,703 | 25,695 | 28,860 | 29,562 | 108,820 | |||||||||||||||
Provision
for loan and lease losses
|
638 | 329 | 1,231 | 1,407 | 3,605 | |||||||||||||||
Noninterest
income
|
6,177 | 6,741 | 7,631 | 7,199 | 27,748 | |||||||||||||||
Noninterest
expense
|
20,402 | 20,266 | 22,425 | 25,736 | 88,829 | |||||||||||||||
Income
before income taxes
|
9,840 | 11,841 | 12,835 | 9,618 | 44,134 | |||||||||||||||
Provision
for income taxes
|
2,557 | 3,297 | 3,579 | 2,320 | 11,753 | |||||||||||||||
Net
Income
|
$ | 7,283 | $ | 8,544 | $ | 9,256 | $ | 7,298 | $ | 32,381 | ||||||||||
Net
Income Per Common Share:
|
||||||||||||||||||||
Basic
|
$ | 0.45 | $ | 0.53 | $ | 0.53 | $ | 0.41 | $ | 1.93 | ||||||||||
Diluted
|
$ | 0.45 | $ | 0.53 | $ | 0.53 | $ | 0.41 | $ | 1.91 |
(1)
|
These
unaudited schedules provide selected financial information concerning the
Company that should be read in conjunction with “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operation”
of this report.
|
|
|
the
risks associated with lending and potential adverse changes in credit
quality;
|
|
|
increased
delinquency rates;
|
|
|
competition
from other financial services companies in our
markets;
|
|
|
the
risks presented by a continuing economic slowdown, which could adversely
affect credit quality, collateral values, including real estate
collateral, investment values, liquidity and loan
originations;
|
|
|
demand
for banking products and services may
decline;
|
|
|
legislative
or regulatory changes that adversely affect our business or our ability to
complete prospective future
acquisitions;
|
|
|
the
risks presented by a continued economic slowdown and the public stock
market volatility, which could adversely affect our stock value and our
ability to raise capital in the future;
and
|
|
|
our
success in managing risks involved in the
foregoing.
|
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||||||
Interest
|
Interest
|
Interest
|
||||||||||||||||||||||||||||||||||
Average
|
Earned/
|
Average
|
Average
|
Earned/
|
Average
|
Average
|
Earned/
|
Average
|
||||||||||||||||||||||||||||
Balances(1)
|
Paid
|
Rate
|
Balances
(1)
|
Paid
|
Rate
|
Balances
(1)
|
Paid
|
Rate
|
||||||||||||||||||||||||||||
ASSETS
|
(dollars
in thousands)
|
|||||||||||||||||||||||||||||||||||
Loans
(1)(2)
|
2,264,486 | $ | 148,240 | 6.55 | % | 1,990,622 | $ | 156,253 | 7.85 | % | $ | 1,629,616 | $ | 123,998 | 7.61 | % | ||||||||||||||||||||
Taxable
securities
|
379,052 | 18,852 | 4.97 | % | 395,512 | 18,685 | 4.72 | % | 459,638 | 20,108 | 4.96 | % | ||||||||||||||||||||||||
Tax
exempt securities (2)
|
186,246 | 12,868 | 6.91 | % | 185,610 | 12,189 | 6.57 | % | 163,993 | 10,834 | 6.61 | % | ||||||||||||||||||||||||
Interest-earning
deposits with banks and federal funds sold
|
21,771 | 402 | 1.85 | % | 27,635 | 1,427 | 5.16 | % | 12,146 | 617 | 5.08 | % | ||||||||||||||||||||||||
Total
interest-earning assets
|
$ | 2,851,555 | $ | 180,362 | 6.33 | % | $ | 2,599,379 | $ | 188,554 | 7.25 | % | $ | 2,265,393 | $ | 155,557 | 6.87 | % | ||||||||||||||||||
Other
earning assets
|
47,753 | 42,334 | 37,725 | |||||||||||||||||||||||||||||||||
Noninterest-earning
assets
|
234,746 | 195,449 | 170,286 | |||||||||||||||||||||||||||||||||
Total
assets
|
$ | 3,134,054 | $ | 2,837,162 | $ | 2,473,404 | ||||||||||||||||||||||||||||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||||||||||||||||||||||||||||||
Certificates
of deposit
|
$ | 780,092 | $ | 28,120 | 3.60 | % | $ | 698,078 | $ | 31,274 | 4.48 | % | $ | 543,053 | $ | 20,985 | 3.86 | % | ||||||||||||||||||
Savings
accounts
|
118,073 | 437 | 0.37 | % | 111,265 | 467 | 0.42 | % | 115,802 | 436 | 0.38 | % | ||||||||||||||||||||||||
Interest-bearing
demand
|
445,449 | 6,009 | 1.35 | % | 435,807 | 11,026 | 2.53 | % | 361,618 | 7,507 | 2.08 | % | ||||||||||||||||||||||||
Money
market accounts
|
578,123 | 10,741 | 1.86 | % | 558,510 | 17,163 | 3.07 | % | 518,156 | 11,910 | 2.30 | % | ||||||||||||||||||||||||
Total
interest-bearing deposits
|
1,921,737 | 45,307 | 2.36 | % | 1,803,660 | 59,930 | 3.32 | % | 1,538,629 | 40,838 | 2.65 | % | ||||||||||||||||||||||||
Federal
Home Loan Bank and Federal Reserve Bank borrowings
|
297,193 | 7,573 | 2.55 | % | 207,521 | 11,065 | 5.33 | % | 208,593 | 10,944 | 5.25 | % | ||||||||||||||||||||||||
Long-term
subordinated debt
|
25,558 | 1,800 | 7.04 | % | 23,777 | 2,177 | 9.16 | % | 22,343 | 1,992 | 8.92 | % | ||||||||||||||||||||||||
Other
borrowings and interest-bearing liabilities
|
32,934 | 867 | 2.63 | % | 40,606 | 2,225 | 5.48 | % | 2,413 | 138 | 5.72 | % | ||||||||||||||||||||||||
Total
interest-bearing liabilities
|
$ | 2,277,422 | $ | 55,547 | 2.44 | % | $ | 2,075,564 | $ | 75,397 | 3.63 | % | $ | 1,771,978 | $ | 53,912 | 3.04 | % | ||||||||||||||||||
Noninterest-bearing
deposits
|
460,747 | 438,474 | 437,819 | |||||||||||||||||||||||||||||||||
Other
noninterest-bearing liabilities
|
41,498 | 33,827 | 25,764 | |||||||||||||||||||||||||||||||||
Shareholders'
equity
|
354,387 | 289,297 | 237,843 | |||||||||||||||||||||||||||||||||
Total
liabilities & shareholders' equity
|
$ | 3,134,054 | $ | 2,837,162 | $ | 2,473,404 | ||||||||||||||||||||||||||||||
equity
|
||||||||||||||||||||||||||||||||||||
Net
interest income
|
$ | 124,815 | $ | 113,157 | $ | 101,645 | ||||||||||||||||||||||||||||||
Net
interest spread
|
3.89 | % | 3.62 | % | 3.83 | % | ||||||||||||||||||||||||||||||
Net
interest margin
|
4.38 | % | 4.35 | % | 4.49 | % |
(1)
|
Nonaccrual
loans were included in loans. Amortized net deferred loan fees were
included in the interest income calculations. The amortization of net
deferred loan fees was $3.5 million in 2008, $3.5 million in 2007, $2.1
million in 2006.
|
(2)
|
Yields
on fully taxable equivalent basis, based on a marginal tax rate of
35%.
|
2008
Compared to 2007
|
2007
Compared to 2006
|
|||||||||||||||||||||||
Increase
(Decrease) Due to
|
Increase
(Decrease) Due to
|
|||||||||||||||||||||||
Volume
|
Rate
|
Total
|
Volume
|
Rate
|
Total
|
|||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||
Interest
Income
|
||||||||||||||||||||||||
Loans
(TE)(1)
|
$ | 17,938 | $ | (25,951 | ) | $ | (8,013 | ) | $ | 28,337 | $ | 3,918 | $ | 32,255 | ||||||||||
Securities
(TE)
|
(888 | ) | 1,734 | 846 | (2,258 | ) | 2,190 | (68 | ) | |||||||||||||||
Interest
earning deposits with banks and federal funds sold
|
(108 | ) | (917 | ) | (1,025 | ) | 800 | 10 | 810 | |||||||||||||||
Interest
income (TE)
|
$ | 16,942 | $ | (25,134 | ) | $ | (8,192 | ) | $ | 26,879 | $ | 6,118 | $ | 32,997 | ||||||||||
Interest
Expense
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
Certificates
of deposit
|
$ | 2,956 | $ | (6,110 | ) | $ | (3,154 | ) | $ | 6,945 | $ | 3,344 | $ | 10,289 | ||||||||||
Savings
accounts
|
25 | (55 | ) | (30 | ) | (19 | ) | 50 | 31 | |||||||||||||||
Interest-bearing
demand
|
130 | (5,147 | ) | (5,017 | ) | 1,877 | 1,642 | 3,519 | ||||||||||||||||
Money
market accounts
|
364 | (6,786 | ) | (6,422 | ) | 1,240 | 4,013 | 5,253 | ||||||||||||||||
Total
interest on deposits
|
3,475 | (18,098 | ) | (14,623 | ) | 10,043 | 9,049 | 19,092 | ||||||||||||||||
Federal
Home Loan Bank and Federal Reserve Bank borrowings
|
2,284 | (5,776 | ) | (3,492 | ) | (57 | ) | 178 | 121 | |||||||||||||||
Long-term
subordinated debt
|
126 | (503 | ) | (377 | ) | 131 | 54 | 185 | ||||||||||||||||
Other
borrowings and interest-bearing liabilities
|
(202 | ) | (1,156 | ) | (1,358 | ) | 2,093 | (6 | ) | 2,087 | ||||||||||||||
Interest
expense
|
$ | 5,683 | $ | (25,533 | ) | $ | (19,850 | ) | $ | 12,210 | $ | 9,275 | $ | 21,485 |
|
TE = Taxable
equivalent, based on a marginal tax rate of
35%.
|
(1)
|
Nonaccrual
loans were included in their respective loan categories. Amortized net
deferred loan fees were included in the interest income calculations. The
amortization of net deferred loan fees was $3.5 million in 2008, $3.5
million in 2007, $2.1 million in
2006.
|
Years
ended December 31,
|
||||||||||||||||||||||||||||
2008
|
$
Change
|
%
Change
|
2007
|
$
Change
|
%
Change
|
2006
|
||||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||||||
Fees
and Other Income
|
||||||||||||||||||||||||||||
Service
charges, loan fees and other fees
|
$ | 14,813 | $ | 1,315 | 10 | % | $ | 13,498 | $ | 1,847 | 16 | % | $ | 11,651 | ||||||||||||||
Merchant
services fees
|
8,040 | (333 | ) | (4) | % | 8,373 | 59 | 1 | % | 8,314 | ||||||||||||||||||
Redemption
of Visa and Mastercard Shares
|
3,028 | 3,028 | 100 | % | - - | - - | 0 | % | - - | |||||||||||||||||||
Gain
(loss) on sale of securities, net
|
846 | 846 | 100 | % | - - | (36 | ) | (100) | % | 36 | ||||||||||||||||||
Impairment
charge on investment securities
|
(19,541 | ) | (19,541 | ) | 100 | % | - - | - - | 0 | % | - - | |||||||||||||||||
Bank
owned life insurance (BOLI)
|
2,075 | 189 | 10 | % | 1,886 | 199 | 12 | % | 1,687 | |||||||||||||||||||
Other
Income
|
5,589 | 1,598 | 40 | % | 3,991 | 1,007 | 34 | % | 2,984 | |||||||||||||||||||
Total
noninterest income
|
$ | 14,850 | $ | (12,898 | ) | (46) | % | $ | 27,748 | $ | 3,076 | 12 | % | $ | 24,672 |
Years
ended December 31,
|
||||||||||||||||||||||||||||
2008
|
$
Change
|
%
Change
|
2007
|
$
Change
|
%
Change
|
2006
|
||||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||||||
Gain
on disposal of assets
|
$ | 492 | $ | 227 | 86 | % | $ | 265 | $ | (60 | ) | (18) | % | $ | 325 | |||||||||||||
Mortgage
banking
|
628 | 91 | 17 | % | 537 | 249 | 86 | % | 288 | |||||||||||||||||||
Cash
management 12-b1 fees
|
466 | 67 | 17 | % | 399 | 71 | 22 | % | 328 | |||||||||||||||||||
Letter
of credit fees
|
399 | - - | 0 | % | 399 | 95 | 31 | % | 304 | |||||||||||||||||||
Late
charges
|
338 | 88 | 35 | % | 250 | 18 | 8 | % | 232 | |||||||||||||||||||
Currency
exchange income
|
356 | 40 | 13 | % | 316 | 50 | 19 | % | 266 | |||||||||||||||||||
New
Markets Tax Credit dividend
|
74 | (19 | ) | (20) | % | 93 | 1 | 1 | % | 92 | ||||||||||||||||||
Miscellaneous
fees on loans
|
915 | 45 | 5 | % | 870 | 633 | 267 | % | 237 | |||||||||||||||||||
Interest
rate swap income
|
647 | 422 | 188 | % | 225 | 225 | 100 | % | - - | |||||||||||||||||||
Credit
card fees
|
142 | 61 | 75 | % | 81 | (2 | ) | (2) | % | 83 | ||||||||||||||||||
Life
insurance death benefit
|
612 | 612 | 100 | % | 0 | - - | 0 | % | - - | |||||||||||||||||||
Miscellaneous
|
520 | (36 | ) | (6) | % | 556 | (273 | ) | (33) | % | 829 | |||||||||||||||||
Total
noninterest income
|
$ | 5,589 | $ | 1,598 | 40 | % | $ | 3,991 | $ | 1,007 | 34 | % | $ | 2,984 |
Years
ended December 31,
|
||||||||||||||||||||||||||||
2008
|
$
Change
|
%
Change
|
2007
|
$
Change
|
%
Change
|
2006
|
||||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||||||
Compensation
|
$ | 36,895 | $ | 2,387 | 7 | % | $ | 34,508 | $ | 6,322 | 22 | % | $ | 28,186 | ||||||||||||||
Employee
benefits
|
12,420 | 225 | 2 | % | 12,195 | 1,612 | 15 | % | 10,583 | |||||||||||||||||||
Occupancy
|
12,838 | 516 | 4 | % | 12,322 | 1,562 | 15 | % | 10,760 | |||||||||||||||||||
Merchant
processing
|
3,558 | 88 | 3 | % | 3,470 | 109 | 3 | % | 3,361 | |||||||||||||||||||
Advertising
and promotion
|
2,324 | (67 | ) | (3) | % | 2,391 | (191 | ) | (7) | % | 2,582 | |||||||||||||||||
Data
processing
|
3,486 | 922 | 36 | % | 2,564 | 250 | 11 | % | 2,314 | |||||||||||||||||||
Legal
and professional services
|
1,969 | (2,943 | ) | (60) | % | 4,912 | 2,813 | 134 | % | 2,099 | ||||||||||||||||||
Taxes,
license and fees
|
2,917 | 35 | 1 | % | 2,882 | 383 | 15 | % | 2,499 | |||||||||||||||||||
Net
(gain) loss on sale of other real estate owned
|
(49 | ) | (54 | ) | (1080) | % | 5 | 16 | (145) | % | (11 | ) | ||||||||||||||||
Regulatory
premiums
|
2,141 | 1,634 | 322 | % | 507 | 238 | 88 | % | 269 | |||||||||||||||||||
Other
|
13,626 | 553 | 4 | % | 13,073 | (419 | ) | (3) | % | 13,492 | ||||||||||||||||||
Total
noninterest expense
|
$ | 92,125 | $ | 3,296 | 4 | % | $ | 88,829 | $ | 12,695 | 17 | % | $ | 76,134 |
Years
ended December 31,
|
||||||||||||||||||||||||||||
2008
|
$
Change
|
%
Change
|
2007
|
$
Change
|
%
Change
|
2006
|
||||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||||||
CRA
partnership investment expense (1)
|
$ | 668 | $ | (64 | ) | (9) | % | $ | 732 | $ | (38 | ) | (5) | % | $ | 770 | ||||||||||||
Core
deposit intangible amortization ("CDI")
|
1,142 | 423 | 59 | % | 719 | 267 | 59 | % | 452 | |||||||||||||||||||
Software
support & maintenance
|
713 | (133 | ) | (16) | % | 846 | 126 | 18 | % | 720 | ||||||||||||||||||
Federal
Reserve Bank processing fees
|
422 | (18 | ) | (4) | % | 440 | (400 | ) | (48) | % | 840 | |||||||||||||||||
Telephone
& network communications
|
1,527 | 293 | 24 | % | 1,234 | 114 | 10 | % | 1,120 | |||||||||||||||||||
Supplies
|
1,064 | (300 | ) | (22) | % | 1,364 | 166 | 14 | % | 1,198 | ||||||||||||||||||
Postage
|
1,420 | 53 | 4 | % | 1,367 | 128 | 10 | % | 1,239 | |||||||||||||||||||
Sponsorships
& charitable contributions
|
642 | 19 | 3 | % | 623 | (38 | ) | (6) | % | 661 | ||||||||||||||||||
Travel
|
471 | 18 | 4 | % | 453 | 115 | 34 | % | 338 | |||||||||||||||||||
Investor
relations
|
182 | (46 | ) | (20) | % | 228 | 59 | 35 | % | 169 | ||||||||||||||||||
Insurance
|
505 | 57 | 13 | % | 448 | (25 | ) | (5) | % | 473 | ||||||||||||||||||
Director
expenses
|
453 | 30 | 7 | % | 423 | (19 | ) | (4) | % | 442 | ||||||||||||||||||
Employee
expenses
|
599 | (64 | ) | (10) | % | 663 | 83 | 14 | % | 580 | ||||||||||||||||||
ATM
Network
|
659 | 3 | 0 | % | 656 | 63 | 11 | % | 593 | |||||||||||||||||||
Miscellaneous
|
3,159 | 282 | 10 | % | 2,877 | (1,020 | ) | (26) | % | 3,897 | ||||||||||||||||||
Total
other noninterest expense
|
$ | 13,626 | $ | 553 | 4 | % | $ | 13,073 | $ | (419 | ) | (3) | % | $ | 13,492 |
(1)
|
The
amounts shown represent pass-through losses from our interests in certain
low-income housing related limited partnerships. As a result of these
interests we receive federal low-income housing tax credits available
under the Internal Revenue Code. For the twelve months ended December 31,
2008, $511,201 of such credits was taken as a reduction in our current
period income tax expense. In addition, our taxable income was
decreased by $237,000 during the twelve months ended December 31, 2008 as
a result of the tax benefit associated with this investment
expense.
|
December
31, 2008
|
||||||||||||
Amortized
Cost
|
Fair Value
|
Yield
|
||||||||||
(dollars
in thousands)
|
||||||||||||
U.S.
Government agency and government-sponsored enterprise mortgage-backed
securities & collateralized mortgage obligations (1)
|
||||||||||||
Due
through 1 year
|
$ | 58 | $ | 59 | 4.01 | % | ||||||
Over
1 through 5 years
|
2,057 | 2,078 | 4.50 | % | ||||||||
Over
5 through 10 years
|
139,046 | 140,318 | 4.66 | % | ||||||||
Over
10 years
|
194,046 | 199,383 | 5.26 | % | ||||||||
Total
|
$ | 335,207 | $ | 341,838 | 5.01 | % | ||||||
State
and municipal securities (2)
|
||||||||||||
Due
through 1 year
|
$ | 1,801 | $ | 1,804 | 3.89 | % | ||||||
Over
1 through 5 years
|
16,091 | 16,839 | 6.47 | % | ||||||||
Over
5 through 10 years
|
36,028 | 36,444 | 5.60 | % | ||||||||
Over
10 years
|
134,495 | 130,566 | 6.25 | % | ||||||||
Total
|
$ | 188,415 | $ | 185,653 | 6.12 | % |
(1)
|
The
maturities reported for mortgage-backed securities collateralized mortgage
obligations are based on contractual maturities and principal
amortization.
|
(2)
|
Yields
on fully taxable equivalent basis, based on a marginal tax rate of
35%.
|
December
31,
|
||||||||||||||||||||||||||||||||||||||||
2008
|
%
of Total
|
2007
|
%
of Total
|
2006
|
%
of Total
|
2005
|
%
of Total
|
2004
|
%
of Total
|
|||||||||||||||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Commercial
business
|
$ | 810,922 | 36.3 | % | $ | 762,365 | 33.4 | % | $ | 617,899 | 36.1 | % | $ | 570,974 | 36.5 | % | $ | 488,157 | 35.9 | % | ||||||||||||||||||||
Real
estate:
|
||||||||||||||||||||||||||||||||||||||||
One-to-four
family residential
|
57,237 | 2.6 | % | 60,991 | 2.7 | % | 51,277 | 3.0 | % | 74,930 | 4.8 | % | 49,580 | 3.7 | % | |||||||||||||||||||||||||
Commercial
and five or more family residential properties
|
862,595 | 38.6 | % | 852,139 | 37.3 | % | 687,635 | 40.3 | % | 651,393 | 41.6 | % | 595,775 | 43.8 | % | |||||||||||||||||||||||||
Total
real estate
|
919,832 | 41.2 | % | 913,130 | 40.0 | % | 738,912 | 43.3 | % | 726,323 | 46.4 | % | 645,355 | 47.5 | % | |||||||||||||||||||||||||
Real
estate construction:
|
||||||||||||||||||||||||||||||||||||||||
One-to-four
family residential
|
209,682 | 9.4 | % | 269,115 | 11.8 | % | 92,124 | 5.4 | % | 41,033 | 2.6 | % | 26,832 | 2.0 | % | |||||||||||||||||||||||||
Commercial
and five or more family residential properties
|
81,176 | 3.6 | % | 165,490 | 7.2 | % | 115,185 | 6.8 | % | 89,134 | 5.7 | % | 70,108 | 5.1 | % | |||||||||||||||||||||||||
Total
real estate construction
|
290,858 | 13.0 | % | 434,605 | 19.0 | % | 207,309 | 12.2 | % | 130,167 | 8.3 | % | 96,940 | 7.1 | % | |||||||||||||||||||||||||
Consumer
|
214,753 | 9.7 | % | 176,559 | 7.8 | % | 147,782 | 8.6 | % | 140,110 | 9.0 | % | 132,130 | 9.7 | % | |||||||||||||||||||||||||
Subtotal
|
2,236,365 | 100.2 | % | 2,286,659 | 100.2 | % | 1,711,902 | 100.2 | % | 1,567,574 | 100.2 | % | 1,362,582 | 100.2 | % | |||||||||||||||||||||||||
Less
deferred loan fees and other
|
(4,033 | ) | (0.2) | % | (3,931 | ) | (0.2) | % | (2,940 | ) | (0.2) | % | (2,870 | ) | (0.2) | % | (2,839 | ) | (0.2) | % | ||||||||||||||||||||
Total
loans
|
$ | 2,232,332 | 100.0 | % | $ | 2,282,728 | 100.0 | % | $ | 1,708,962 | 100.0 | % | $ | 1,564,704 | 100.0 | % | $ | 1,359,743 | 100.0 | % | ||||||||||||||||||||
Loans
held for sale
|
$ | 1,964 | $ | 4,482 | $ | 933 | $ | 1,850 | $ | 6,019 |
Maturing
|
||||||||||||||||
Due
Through
1
Year
|
Over
1
Through
5
Years
|
Over
5
Years
|
Total
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Commercial
business
|
$ | 559,938 | $ | 180,509 | $ | 70,475 | $ | 810,922 | ||||||||
Real
estate construction
|
244,991 | 41,473 | 4,394 | 290,858 | ||||||||||||
Total
|
$ | 804,929 | $ | 221,982 | $ | 74,869 | $ | 1,101,780 | ||||||||
Fixed
rate loans due after 1 year
|
$ | 150,006 | $ | 70,232 | $ | 220,238 | ||||||||||
Variable
rate loans due after 1 year
|
71,976 | 4,637 | 76,613 | |||||||||||||
Total
|
$ | 221,982 | $ | 74,869 | $ | 296,851 |
December
31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||
Nonaccrual:
|
||||||||||||||||||||
Commercial
business
|
$ | 2,976 | $ | 2,170 | $ | 1,777 | $ | 4,316 | $ | 6,587 | ||||||||||
Real
Estate:
|
||||||||||||||||||||
One-to-four
family residential
|
905 | 204 | 366 | 376 | 375 | |||||||||||||||
Commercial
and five or more family residential real estate
|
5,710 | 3,476 | 217 | - - | 440 | |||||||||||||||
Real
Estate Construction:
|
||||||||||||||||||||
One-to-four
family residential
|
69,668 | 7,317 | - - | - - | - - | |||||||||||||||
Commercial
and five or more family residential real estate
|
25,752 | - - | - - | - - | - - | |||||||||||||||
Consumer
|
1,152 | 838 | 54 | 41 | 820 | |||||||||||||||
Total
nonaccrual loans:
|
106,163 | 14,005 | 2,414 | 4,733 | 8,222 | |||||||||||||||
Restructured
loans:
|
||||||||||||||||||||
Commercial
business
|
587 | 456 | 1,066 | 124 | 227 | |||||||||||||||
Total
nonperforming loans
|
106,750 | 14,461 | 3,480 | 4,857 | 8,449 | |||||||||||||||
Other
real estate owned
|
2,874 | 181 | - - | 18 | 680 | |||||||||||||||
Total
nonperforming assets
|
$ | 109,624 | $ | 14,642 | $ | 3,480 | $ | 4,875 | $ | 9,129 | ||||||||||
Accruing
loans past-due 90 days or more
|
$ | - - | $ | - - | $ | - - | $ | - - | $ | 4 | ||||||||||
Foregone
interest on nonperforming loans
|
$ | 4,072 | $ | 814 | $ | 497 | $ | 106 | $ | 920 | ||||||||||
Interest
recognized on nonperforming loans
|
$ | 4,550 | $ | 244 | $ | 202 | $ | 45 | $ | 101 | ||||||||||
Potential
problem loans
|
$ | 17,736 | $ | 2,343 | $ | 2,288 | $ | 2,269 | $ | 2,321 | ||||||||||
Allowance
for loan and lease losses
|
$ | 42,747 | $ | 26,599 | $ | 20,182 | $ | 20,829 | $ | 19,881 | ||||||||||
Allowance
for loan and lease losses to nonperforming loans
|
40.04 | % | 183.94 | % | 579.94 | % | 428.84 | % | 235.31 | % | ||||||||||
Allowance
for loan and lease losses to nonperforming assets
|
38.99 | % | 181.66 | % | 579.94 | % | 427.26 | % | 217.78 | % | ||||||||||
Nonperforming
loans to year end loans
|
4.78 | % | 0.63 | % | 0.20 | % | 0.31 | % | 0.62 | % | ||||||||||
Nonperforming
assets to year end assets
|
3.54 | % | 0.46 | % | 0.14 | % | 0.21 | % | 0.42 | % |
|
1.
|
General
valuation allowance consistent with SFAS No. 5, “Accounting for
Contingencies.”
|
|
2.
|
Criticized/classified
loss reserves on specific relationships. Specific allowances for
identified problem loans are determined in accordance with SFAS
No. 114, “Accounting by Creditors for Impairment of a
Loan.”
|
|
3.
|
The
unallocated allowance provides for other credit losses inherent in our
loan portfolio that may not have been contemplated in the general and
specific components of the allowance. This unallocated amount generally
comprises less than 5% of the allowance. The unallocated amount is
reviewed periodically based on trends in credit losses, the results of
credit reviews and overall economic
trends.
|
|
1.
|
Existing
general economic and business conditions affecting our market
place
|
|
2.
|
Credit
quality trends, including trends in nonperforming
loans
|
|
3.
|
Collateral
values
|
|
4.
|
Seasoning
of the loan portfolio
|
|
5.
|
Bank
regulatory examination results
|
|
6.
|
Findings
of internal credit examiners
|
|
7.
|
Duration
of current business cycle
|
December
31,
|
||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||
Total
loans, net at year end (1)
|
$ | 2,232,332 | $ | 2,282,728 | $ | 1,708,962 | $ | 1,564,704 | $ | 1,359,743 | ||||||||||
Daily
average loans
|
$ | 2,264,486 | $ | 1,990,622 | $ | 1,629,616 | $ | 1,494,567 | $ | 1,186,506 | ||||||||||
Balance
of ALLL at beginning of period
|
$ | 26,599 | $ | 20,182 | $ | 20,829 | $ | 19,881 | $ | 20,261 | ||||||||||
Balance
established through acquisition
|
- - | 3,192 | - - | - - | 1,367 | |||||||||||||||
Charge-offs:
|
||||||||||||||||||||
Commercial
business
|
(2,023 | ) | (781 | ) | (2,077 | ) | (386 | ) | (2,490 | ) | ||||||||||
Real
Estate:
|
||||||||||||||||||||
One-to-four
family residential
|
(46 | ) | - - | - - | - - | - - | ||||||||||||||
Commercial
and five or more family residential properties
|
(3,136 | ) | - - | (9 | ) | - - | - - | |||||||||||||
Real
Estate Construction:
|
||||||||||||||||||||
One-to-four
family residential
|
(18,919 | ) | - - | - - | - - | - - | ||||||||||||||
Commercial
and five or more family residential properties
|
- - | - - | - - | (665 | ) | (260 | ) | |||||||||||||
Consumer
|
(1,863 | ) | (432 | ) | (1,109 | ) | (221 | ) | (292 | ) | ||||||||||
Total
charge-offs
|
(25,987 | ) | (1,213 | ) | (3,195 | ) | (1,272 | ) | (3,042 | ) | ||||||||||
Recoveries
|
||||||||||||||||||||
Commercial
business
|
417 | 530 | 233 | 218 | 124 | |||||||||||||||
Real
Estate:
|
||||||||||||||||||||
One-to-four
family residential
|
- - | - - | 20 | - - | 1 | |||||||||||||||
Commercial
and five or more family residential properties
|
304 | 12 | 83 | - - | - - | |||||||||||||||
Real
Estate Construction:
|
||||||||||||||||||||
One-to-four
family residential
|
16 | - - | 7 | - - | 25 | |||||||||||||||
Commercial
and five or more family residential properties
|
- - | - - | - - | 326 | - - | |||||||||||||||
Consumer
|
222 | 291 | 140 | 156 | 150 | |||||||||||||||
Total
recoveries
|
959 | 833 | 483 | 700 | 300 | |||||||||||||||
Net
charge-offs
|
(25,028 | ) | (380 | ) | (2,712 | ) | (572 | ) | (2,742 | ) | ||||||||||
Provision
charged to expense
|
41,176 | 3,605 | 2,065 | 1,520 | 995 | |||||||||||||||
Balance
of ALLL at year-end
|
$ | 42,747 | $ | 26,599 | $ | 20,182 | $ | 20,829 | $ | 19,881 | ||||||||||
Net
charge-offs to average loans outstanding
|
1.11 | % | 0.02 | % | 0.17 | % | 0.04 | % | 0.23 | % | ||||||||||
Allowance
for loan and lease losses to year end loans (1)
|
1.91 | % | 1.17 | % | 1.18 | % | 1.33 | % | 1.46 | % |
(1)
|
Excludes
loans held for sale
|
December
31,
|
||||||||||||||||||||||||||||||||||||||||
2008
|
2007
|
2006
|
2005
|
2004
|
||||||||||||||||||||||||||||||||||||
Balance
at End of Period
Applicable
to:
|
Amount
|
%
of Total Loans*
|
Amount
|
%
of Total Loans*
|
Amount
|
%
of Total Loans*
|
Amount
|
%
of Total Loans*
|
Amount
|
%
of Total Loans*
|
||||||||||||||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
Commercial
business
|
$ | 12,846 | 36.3 | % | $ | 7,068 | 33.4 | % | $ | 9,628 | 36.1 | % | $ | 12,060 | 36.5 | % | $ | 10,222 | 35.9 | % | ||||||||||||||||||||
Real
estate and construction:
|
||||||||||||||||||||||||||||||||||||||||
One-to-four
family residential
|
16,895 | 12.0 | % | 7,648 | 14.5 | % | 1,134 | 8.4 | % | 809 | 7.4 | % | 678 | 5.7 | % | |||||||||||||||||||||||||
Commercial
and five or more family residential properties
|
12,064 | 42.1 | % | 11,170 | 44.3 | % | 8,841 | 46.9 | % | 6,663 | 47.1 | % | 7,995 | 48.7 | % | |||||||||||||||||||||||||
Consumer
|
942 | 9.6 | % | 713 | 7.8 | % | 281 | 8.6 | % | 677 | 9.0 | % | 985 | 9.7 | % | |||||||||||||||||||||||||
Unallocated
|
- - | 0.0 | % | - - | 0.0 | % | 298 | 0.0 | % | 620 | 0.0 | % | 1 | 0.0 | % | |||||||||||||||||||||||||
Total
|
$ | 42,747 | 100.0 | % | $ | 26,599 | 100.0 | % | $ | 20,182 | 100.0 | % | $ | 20,829 | 100.0 | % | $ | 19,881 | 100.0 | % |
*
|
Represents
the total of all outstanding loans in each category as a percent of total
loans outstanding.
|
Years
ended December 31,
|
||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||
Average
Deposits
|
Rate
|
Average
Deposits
|
Rate
|
Average
Deposits
|
Rate
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Interest
bearing demand
|
$ | 445,449 | 1.35 | % | $ | 435,807 | 2.53 | % | $ | 361,618 | 2.08 | % | ||||||||||||
Money
market
|
578,123 | 1.86 | % | 558,510 | 3.07 | % | 518,156 | 2.30 | % | |||||||||||||||
Savings
|
118,073 | 0.37 | % | 111,265 | 0.42 | % | 115,802 | 0.38 | % | |||||||||||||||
Certificates
of deposit
|
780,092 | 3.60 | % | 698,078 | 4.48 | % | 543,053 | 3.86 | % | |||||||||||||||
Total
interest-bearing deposits
|
1,921,737 | 2.36 | % | 1,803,660 | 3.32 | % | 1,538,629 | 2.65 | % | |||||||||||||||
Demand
and other non-interest bearing
|
460,747 | 438,474 | 437,819 | |||||||||||||||||||||
Total
average deposits
|
$ | 2,382,484 | $ | 2,242,134 | $ | 1,976,448 |
(1)
|
Interest-bearing
demand deposits include interest-bearing checking accounts and money
market accounts.
|
December
31, 2008
|
||||||||||||||||
Time
Certificates of Deposit of $100,000 or More
|
Other
Time Deposits of $100,000 or More
|
|||||||||||||||
Amounts
maturing in:
|
Amount
|
Percent
of Total Deposits
|
Amount
|
Percent
of Total Deposits
|
||||||||||||
(dollars
in thousands)
|
||||||||||||||||
Three
months or less
|
$ | 192,544 | 8 | % | $ | 17,252 | 1 | % | ||||||||
Over
3 through 6 months
|
74,032 | 3 | % | 243 | 0 | % | ||||||||||
Over
6 through 12 months
|
49,030 | 2 | % | - - | 0 | % | ||||||||||
Over
12 months
|
23,365 | 1 | % | - - | 0 | % | ||||||||||
Total
|
$ | 338,971 | 14 | % | $ | 17,495 | 1 | % |
Years
ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(dollars
in thousands)
|
||||||||||||
FHLB
Advances
|
||||||||||||
Balance
at end of year
|
$ | 150,000 | $ | 257,670 | $ | 205,800 | ||||||
Average
balance during the year
|
$ | 282,624 | $ | 207,521 | $ | 208,594 | ||||||
Maximum
month-end balance during the year
|
$ | 384,000 | $ | 264,250 | $ | 303,000 | ||||||
Weighted
average rate during the year
|
2.53 | % | 5.27 | % | 5.25 | % | ||||||
Weighted
average rate at December 31
|
1.89 | % | 4.59 | % | 5.56 | % |
Years
ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(dollars
in thousands)
|
||||||||||||
Federal
Reserve Bank Borrowings
|
||||||||||||
Balance
at end of year
|
$ | 50,000 | $ | - - | $ | - - | ||||||
Average
balance during the year
|
$ | 14,569 | $ | 54 | $ | 27 | ||||||
Maximum
month-end balance during the year
|
$ | 120,000 | $ | - - | $ | - - | ||||||
Weighted
average rate during the year
|
0.62 | % | 5.36 | % | 5.50 | % | ||||||
Weighted
average rate at December 31
|
0.60 | % | 0.00 | % | 0.00 | % |
Payments
due within time period at December 31, 2008
|
||||||||||||||||||||
0-12
Months
|
1-3
Years
|
4-5
Years
|
Due
after Five Years
|
Total
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||||||
Operating
& equipment leases
|
$ | 3,371 | $ | 6,233 | $ | 5,614 | $ | 8,839 | $ | 24,057 | ||||||||||
Total deposits |
2,264,287
|
100,376 | 17,488 | - - | 2,382,151 | |||||||||||||||
Federal
Home Loan Bank and Federal Reserve Bank borrowings
|
100,000 | - - | - - | 100,000 | 200,000 | |||||||||||||||
Other
borrowings
|
201 | - - | - - | 25,000 | 25,201 | |||||||||||||||
Long-term
subordinated debt
|
- - | - - | - - | 25,603 | 25,603 | |||||||||||||||
Total
|
$ | 2,367,859 | $ | 106,609 | $ | 23,102 | $ | 159,442 | $ | 2,657,012 |
Company
|
Columbia
Bank
|
Requirements
|
||||||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
Adequately
capitalized
|
Well-Capitalized
|
|||||||||||||||||||
Total
risk-based capital ratio
|
14.25 | % | 10.90 | % | 11.21 | % | 10.49 | % | 8 | % | 10 | % | ||||||||||||
Tier
1 risk-based capital ratio
|
12.99 | % | 9.87 | % | 9.96 | % | 9.47 | % | 4 | % | 6 | % | ||||||||||||
Leverage
ratio
|
11.27 | % | 8.54 | % | 8.64 | % | 8.23 | % | 4 | % | 5 | % |
Years
ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Dividends
paid per common share
|
$ | 0.58 | $ | 0.66 | $ | 0.57 | ||||||
Dividend
payout ratio
|
187 | % | 34 | % | 28 | % |
Estimated
Maturity or Repricing
|
||||||||||||||||||||
December
31. 2008
|
0-3
months
|
4-12
months
|
Over
1 year through
5
years
|
Due
after
5
years
|
Total
|
|||||||||||||||
Interest-Earning
Assets
|
||||||||||||||||||||
Interest-earning
deposits
|
$ | 3,943 | $ | - - | $ | - - | $ | - - | $ | 3,943 | ||||||||||
Loans,
net of deferred fees
|
1,095,819 | 207,055 | 727,531 | 201,927 | 2,232,332 | |||||||||||||||
Loans
held for sale
|
1,964 | - - | - - | - - | 1,964 | |||||||||||||||
Investments
|
34,876 | 101,531 | 223,638 | 180,480 | 540,525 | |||||||||||||||
Total
interest-earning assets
|
$ | 1,136,602 | $ | 308,586 | $ | 951,169 | $ | 382,407 | $ | 2,778,764 | ||||||||||
Allowance
for loan and lease losses
|
(42,747 | ) | ||||||||||||||||||
Cash
and due from banks
|
84,787 | |||||||||||||||||||
Premises
|
61,139 | |||||||||||||||||||
Other
assets
|
215,136 | |||||||||||||||||||
Noninterest-earning
assets
|
318,315 | |||||||||||||||||||
Total
Assets
|
$ | 3,097,079 | ||||||||||||||||||
Interest-Bearing
Liabilities
|
||||||||||||||||||||
Interest
bearing non-maturity deposits
|
$ | 530,065 | $ | - - | $ | - - | $ | 641,200 | $ | 1,171,265 | ||||||||||
Time
deposits
|
361,345 | 265,935 | 117,528 | - - | 744,808 | |||||||||||||||
Borrowings
|
124,000 | 1,000 | 100,000 | - - | 225,000 | |||||||||||||||
Long-term
subordinated debt
|
25,804 | - - | - - | - - | 25,804 | |||||||||||||||
Total
interest-bearing liabilities
|
$ | 1,041,214 | $ | 266,935 | $ | 217,528 | $ | 641,200 | 2,166,877 | |||||||||||
Other
liabilities
|
514,817 | |||||||||||||||||||
Total
liabilities
|
2,681,694 | |||||||||||||||||||
Shareholders'
equity
|
415,385 | |||||||||||||||||||
Total
liabilities and shareholders' equity
|
$ | 3,097,079 | ||||||||||||||||||
Interest-bearing
liabilities as a percent of total interest-earning assets
|
37.47 | % | 9.61 | % | 7.83 | % | 23.08 | % | ||||||||||||
Rate
sensitivity gap
|
$ | 95,388 | $ | 41,651 | $ | 733,641 | $ | (258,793 | ) | |||||||||||
Cumulative
rate sensitivity gap
|
$ | 95,388 | $ | 137,039 | $ | 870,680 | $ | 611,887 | ||||||||||||
Rate
sensitivity gap as a percentage of interest-earning assets
|
3.43 | % | 1.50 | % | 26.40 | % | (9.31) | % | ||||||||||||
Cumulative
rate sensitivity gap as a percentage of interest-earning
assets
|
3.43 | % | 4.93 | % | 31.33 | % | 22.02 | % |
Years
ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in thousands except per
share)
|
||||||||||||
Interest
Income
|
||||||||||||
Loans
|
$ | 147,830 | $ | 156,253 | $ | 123,998 | ||||||
Taxable
securities
|
18,852 | 18,614 | 20,018 | |||||||||
Tax-exempt
securities
|
7,976 | 7,923 | 7,042 | |||||||||
Federal
funds sold and deposits in banks
|
402 | 1,427 | 617 | |||||||||
Total
interest income
|
175,060 | 184,217 | 151,675 | |||||||||
Interest
Expense
|
||||||||||||
Deposits
|
45,307 | 59,930 | 40,838 | |||||||||
Federal
Home Loan Bank and Federal Reserve Bank borrowings
|
7,573 | 11,065 | 10,944 | |||||||||
Long-term
obligations
|
1,800 | 2,177 | 1,992 | |||||||||
Other
borrowings
|
867 | 2,225 | 138 | |||||||||
Total
interest expense
|
55,547 | 75,397 | 53,912 | |||||||||
Net
Interest Income
|
119,513 | 108,820 | 97,763 | |||||||||
Provision
for loan and lease losses
|
41,176 | 3,605 | 2,065 | |||||||||
Net
interest income after provision for loan and lease losses
|
78,337 | 105,215 | 95,698 | |||||||||
Noninterest
Income
|
||||||||||||
Service
charges and other fees
|
14,813 | 13,498 | 11,651 | |||||||||
Merchant
services fees
|
8,040 | 8,373 | 8,314 | |||||||||
Redemption
of Visa and Mastercard shares
|
3,028 | - - | - - | |||||||||
Gain
on sale of investment securities, net
|
846 | - - | 36 | |||||||||
Impairment
charge on investment securities
|
(19,541 | ) | - - | - - | ||||||||
Bank
owned life insurance ("BOLI")
|
2,075 | 1,886 | 1,687 | |||||||||
Other
|
5,589 | 3,991 | 2,984 | |||||||||
Total
noninterest income
|
14,850 | 27,748 | 24,672 | |||||||||
Noninterest
Expense
|
||||||||||||
Compensation
and employee benefits
|
49,315 | 46,703 | 38,769 | |||||||||
Occupancy
|
12,838 | 12,322 | 10,760 | |||||||||
Merchant
processing
|
3,558 | 3,470 | 3,361 | |||||||||
Advertising
and promotion
|
2,324 | 2,391 | 2,582 | |||||||||
Data
processing
|
3,486 | 2,564 | 2,314 | |||||||||
Legal
and professional fees
|
1,969 | 4,912 | 2,099 | |||||||||
Taxes,
licenses and fees
|
2,917 | 2,882 | 2,499 | |||||||||
Regulatory
premiums
|
2,141 | 507 | 269 | |||||||||
Net
(gain) loss on sale of other real estate owned
|
(49 | ) | 5 | (11 | ) | |||||||
Other
|
13,626 | 13,073 | 13,492 | |||||||||
Total
noninterest expense
|
92,125 | 88,829 | 76,134 | |||||||||
Income
before income taxes
|
1,062 | 44,134 | 44,236 | |||||||||
Provision
(benefit) for income taxes
|
(4,906 | ) | 11,753 | 12,133 | ||||||||
Net
Income
|
$ | 5,968 | $ | 32,381 | $ | 32,103 | ||||||
Net
Income Applicable to Common Shareholders
|
$ | 5,498 | $ | 32,381 | $ | 32,103 | ||||||
Earnings
per Common Share
|
||||||||||||
Basic
|
$ | 0.31 | $ | 1.93 | $ | 2.01 | ||||||
Diluted
|
$ | 0.31 | $ | 1.91 | $ | 1.99 | ||||||
Dividends
paid per common share
|
$ | 0.58 | $ | 0.66 | $ | 0.57 | ||||||
Weighted
average number of common shares outstanding
|
17,914 | 16,802 | 15,946 | |||||||||
Weighted
average number of diluted common shares outstanding
|
18,010 | 16,972 | 16,148 |
December
31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
(in thousands)
|
||||||||||||||||
ASSETS
|
||||||||||||||||
Cash
and due from banks
|
$ | 84,787 | $ | 82,735 | ||||||||||||
Interest-earning
deposits with banks
|
3,943 | 11,240 | ||||||||||||||
Total
cash and cash equivalents
|
88,730 | 93,975 | ||||||||||||||
Securities
available for sale at fair value (amortized cost of $525,110 and $558,685,
respectively)
|
528,918 | 561,366 | ||||||||||||||
Federal
Home Loan Bank stock at cost
|
11,607 | 11,607 | ||||||||||||||
Loans
held for sale
|
1,964 | 4,482 | ||||||||||||||
Loans,
net of deferred loan fees of ($4,033) and ($3,931),
respectively
|
2,232,332 | 2,282,728 | ||||||||||||||
Less:
allowance for loan and lease losses
|
42,747 | 26,599 | ||||||||||||||
Loans,
net
|
2,189,585 | 2,256,129 | ||||||||||||||
Interest
receivable
|
11,646 | 14,622 | ||||||||||||||
Premises
and equipment, net
|
61,139 | 56,122 | ||||||||||||||
Other
real estate owned
|
2,874 | 181 | ||||||||||||||
Goodwill
|
95,519 | 96,011 | ||||||||||||||
Core
deposit intangible, net
|
5,908 | 7,050 | ||||||||||||||
Other
assets
|
99,189 | 77,168 | ||||||||||||||
Total
Assets
|
$ | 3,097,079 | $ | 3,178,713 | ||||||||||||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||||||||||||||
Deposits:
|
||||||||||||||||
Non-interest
bearing
|
$ | 466,078 | $ | 468,237 | ||||||||||||
Interest-bearing
|
1,916,073 | 2,029,824 | ||||||||||||||
Total
deposits
|
2,382,151 | 2,498,061 | ||||||||||||||
Federal
Home Loan Bank and Federal Reserve Bank borrowings
|
200,000 | 257,670 | ||||||||||||||
Securities
sold under agreements to repurchase
|
25,000 | - - | ||||||||||||||
Other
borrowings
|
201 | 5,061 | ||||||||||||||
Long-term
subordinated debt
|
25,603 | 25,519 | ||||||||||||||
Other
liabilities
|
48,739 | 50,671 | ||||||||||||||
Total
liabilities
|
2,681,694 | 2,836,982 | ||||||||||||||
Commitments
and contingent liabilities (note 18)
|
||||||||||||||||
Shareholders'
equity:
|
||||||||||||||||
December
31,
|
||||||||||||||||
2008
|
2007
|
|||||||||||||||
Preferred
stock (76,898 aggregate liquidation preference)
|
||||||||||||||||
Authorized
shares
|
2,000 | 2,000 | ||||||||||||||
Issued
and outstanding
|
77 | - - | 73,743 | - - | ||||||||||||
Common
Stock (no par value)
|
||||||||||||||||
Authorized
shares
|
63,033 | 63,033 | ||||||||||||||
Issued
and outstanding
|
18,151 | 17,953 | 233,192 | 226,550 | ||||||||||||
Retained
earnings
|
103,061 | 110,169 | ||||||||||||||
Accumulated
other comprehensive income
|
5,389 | 5,012 | ||||||||||||||
Total
shareholders' equity
|
415,385 | 341,731 | ||||||||||||||
Total
Liabilities and Shareholders' Equity
|
$ | 3,097,079 | $ | 3,178,713 |
Accumulated
|
||||||||||||||||||||||||||||||||
Preferred
Stock
|
Common
Stock
|
Other
|
Total
|
|||||||||||||||||||||||||||||
Number
of
|
Number
of
|
Retained
|
Deferred
|
Comprehensive
|
Shareholders'
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Earnings
|
Compensation
|
Income
(Loss)
|
Equity
|
|||||||||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||||||||||
Balance
at January 1, 2006
|
- - | $ | - - | 15,831 | $ | 163,065 | $ | 66,051 | $ | (92 | ) | $ | (2,782 | ) | $ | 226,242 | ||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||||||
Net
income
|
- - | - - | - - | - - | 32,103 | - - | - - | 32,103 | ||||||||||||||||||||||||
Other
comprehensive income (loss), net of tax:
|
||||||||||||||||||||||||||||||||
Net unrealized loss from securities, net of
reclassification adjustments
|
- - | - - | - - | - - | - - | - - | (1,032 | ) | (1,032 | ) | ||||||||||||||||||||||
Net
unrealized gain from cash flow hedging
instruments
|
- - | - - | - - | - - | - - | - - | 361 | 361 | ||||||||||||||||||||||||
Total
comprehensive income
|
31,432 | |||||||||||||||||||||||||||||||
Transition
adjustment related to adoption of SFAS 123(R)
|
- - | - - | - - | (92 | ) | - - | 92 | - - | - - | |||||||||||||||||||||||
Common
stock issued - stock option and other plans
|
- - | - - | 148 | 2,090 | - - | - - | - - | 2,090 | ||||||||||||||||||||||||
Common
stock issued - restricted stock awards, net of cancelled
awards
|
- - | - - | 81 | - - | - - | - - | - - | - - | ||||||||||||||||||||||||
Share-based
payment
|
- - | - - | 793 | - - | - - | - - | 793 | |||||||||||||||||||||||||
Tax
benefit associated with share-based payment
|
- - | - - | - - | 907 | - - | - - | -- | 907 | ||||||||||||||||||||||||
Cash
dividends paid on common stock
|
- - | - - | - - | - - | (9,117 | ) | - - | - - | (9,117 | ) | ||||||||||||||||||||||
Balance
at December 31, 2006
|
- - | - - | 16,060 | 166,763 | 89,037 | - - | (3,453 | ) | 252,347 | |||||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||||||
Net
income
|
- - | - - | - - | - - | 32,381 | - - | - - | 32,381 | ||||||||||||||||||||||||
Other
comprehensive income, net of tax:
|
||||||||||||||||||||||||||||||||
Net
unrealized gain from securities, net of
reclassification
adjustments
|
- - | - - | - - | - - | - - | - - | 5,540 | 5,540 | ||||||||||||||||||||||||
Net
unrealized gain from cash flow hedging
instruments
|
- - | - - | - - | - - | - - | - - | 2,925 | 2,925 | ||||||||||||||||||||||||
Total
comprehensive income
|
40,846 | |||||||||||||||||||||||||||||||
Acquisitions:
|
||||||||||||||||||||||||||||||||
Shares
issued to the shareholders of Mountain Bank
Holding
Company
|
- - | - - | 993 | 31,652 | - - | - - | - - | 31,652 | ||||||||||||||||||||||||
Shares
issued to the shareholders of Town Center
Bancorp
|
- - | - - | 705 | 25,467 | - - | - - | - - | 25,467 | ||||||||||||||||||||||||
Common
stock issued - stock option and other plans
|
- - | - - | 193 | 2,836 | - - | - - | - - | 2,836 | ||||||||||||||||||||||||
Common
stock issued - restricted stock awards, net of cancelled
awards
|
- - | - - | 67 | - - | - - | - - | - - | - - | ||||||||||||||||||||||||
Purchase
and retirement of common stock
|
- - | - - | (65 | ) | (2,121 | ) | - - | - - | - - | (2,121 | ) | |||||||||||||||||||||
Share-based
payment
|
- - | - - | - - | 974 | - - | - - | - - | 974 | ||||||||||||||||||||||||
Tax
benefit associated with share-based payment
|
- - | - - | - - | 979 | - - | - - | - - | 979 | ||||||||||||||||||||||||
Cash
dividends paid on common stock
|
- - | - - | - - | - - | (11,249 | ) | - - | - - | (11,249 | ) | ||||||||||||||||||||||
Balance
at December 31, 2007
|
- - | - - | 17,953 | 226,550 | 110,169 | - - | 5,012 | 341,731 | ||||||||||||||||||||||||
Cumulative
effect of applying EITF 06-4 consensus
|
- - | - - | - - | -- | (2,137 | ) | - - | - - | (2,137 | ) | ||||||||||||||||||||||
Adjusted
balance
|
- - | - - | 17,953 | 226,550 | 108,032 | - - | 5,012 | 339,594 | ||||||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||||||
Net
income
|
- - | - - | - - | - - | 5,968 | - - | - - | 5,968 | ||||||||||||||||||||||||
Other
comprehensive income (loss), net of tax:
|
||||||||||||||||||||||||||||||||
Net
unrealized gain from securities, net of
reclassification
adjustments
|
- - | - - | - - | - - | - - | - - | 729 | 729 | ||||||||||||||||||||||||
Net
unrealized loss from cash flow hedging
instruments
|
- - | - - | - - | - - | - - | - - | (352 | ) | (352 | ) | ||||||||||||||||||||||
Total
comprehensive income
|
6,345 | |||||||||||||||||||||||||||||||
Issuance
of preferred stock and common stock warrant, net
|
77 | 73,743 | - - | 3,168 | (43 | ) | - - | - - | 76,868 | |||||||||||||||||||||||
Common
stock issued - stock option and other plans
|
- - | - - | 137 | 1,906 | - - | - - | - - | 1,906 | ||||||||||||||||||||||||
Common
stock issued - restricted stock awards, net of cancelled
awards
|
- - | - - | 61 | - - | - - | - - | - - | - - | ||||||||||||||||||||||||
Share-based
payment
|
- - | - - | - - | 1,327 | 22 | - - | - - | 1,349 | ||||||||||||||||||||||||
Tax
benefit associated with share-based payment
|
- - | - - | - - | 241 | - - | - - | - - | 241 | ||||||||||||||||||||||||
Accumulated
preferred dividends
|
- - | - - | - - | - - | (427 | ) | - - | - - | (427 | ) | ||||||||||||||||||||||
Cash
dividends paid on common stock
|
- - | - - | - - | - - | (10,491 | ) | - - | - - | (10,491 | ) | ||||||||||||||||||||||
Balance
at December 31, 2008
|
77 | $ | 73,743 | 18,151 | $ | 233,192 | $ | 103,061 | $ | - - | $ | 5,389 | $ | 415,385 |
Years
ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in
thousands)
|
||||||||||||
Cash
Flows From Operating Activities
|
||||||||||||
Net
Income
|
$ | 5,968 | $ | 32,381 | $ | 32,103 | ||||||
Adjustments
to reconcile net income to net cash provided by operating
activities
|
||||||||||||
Provision
for loan and lease losses
|
41,176 | 3,605 | 2,065 | |||||||||
Deferred
income tax benefit
|
(14,409 | ) | (2,607 | ) | (1,988 | ) | ||||||
Stock-based
compensation expense
|
1,349 | 974 | 793 | |||||||||
Depreciation,
amortization and accretion
|
7,046 | 6,685 | 7,713 | |||||||||
Net
realized gain on sale of securities
|
(846 | ) | - - | (36 | ) | |||||||
Net
realized gain on sale of other real estate and fixed
assets
|
(589 | ) | (216 | ) | (317 | ) | ||||||
Gain
on terminated cash flow hedging instruments
|
(1,693 | ) | - - | - - | ||||||||
Impairment
charge on investment securities
|
19,541 | - - | - - | |||||||||
Net
change in:
|
||||||||||||
Loans
held for sale
|
2,518 | (3,084 | ) | 917 | ||||||||
Interest
receivable
|
2,969 | (404 | ) | (878 | ) | |||||||
Interest
payable
|
(4,536 | ) | 6,014 | 744 | ||||||||
Other
assets
|
(12,698 | ) | 2,945 | (4,766 | ) | |||||||
Other
liabilities
|
(1,431 | ) | 4,306 | 2,011 | ||||||||
Net
cash provided by operating activities
|
44,365 | 50,599 | 38,361 | |||||||||
Cash
Flows From Investing Activities
|
||||||||||||
Purchases
of securities available for sale
|
(89,055 | ) | (3,742 | ) | (177,797 | ) | ||||||
Proceeds
from sales of securities available for sale
|
53,512 | 29,867 | 43,099 | |||||||||
Proceeds
from principal repayments and maturities of securities available for
sale
|
49,652 | 48,646 | 110,144 | |||||||||
Proceeds
from maturities of securities held to maturity
|
- - | 578 | 703 | |||||||||
Loans
originated and acquired, net of principal collected
|
21,702 | (288,099 | ) | (147,040 | ) | |||||||
Purchases
of premises and equipment
|
(10,479 | ) | (5,591 | ) | (4,455 | ) | ||||||
Proceeds
from disposal of premises and equipment
|
925 | 216 | 126 | |||||||||
Acquisition
of Mt. Rainier and Town Center, net of cash acquired
|
- - | (32,356 | ) | - - | ||||||||
Proceeds
from sales of Federal Reserve Bank stock
|
- - | 310 | - - | |||||||||
Proceeds
from termination of cash flow hedging instruments
|
8,100 | - - | - - | |||||||||
Proceeds
from sales of other real estate and other personal property
owned
|
949 | - - | 29 | |||||||||
Net
cash provided by(used in) investing activities
|
35,306 | (250,171 | ) | (175,191 | ) | |||||||
Cash
Flows From Financing Activities
|
||||||||||||
Net
increase(decrease) in deposits
|
(115,910 | ) | 170,025 | 17,862 | ||||||||
Proceeds
from Federal Home Loan Bank and Federal Reserve Bank
borrowings
|
3,287,268 | 2,992,548 | 2,873,249 | |||||||||
Repayments
of Federal Home Loan Bank and Federal Reserve Bank
borrowings
|
(3,344,938 | ) | (2,948,678 | ) | (2,761,849 | ) | ||||||
Proceeds
from repurchase agreement borrowings
|
25,000 | - - | - - | |||||||||
Repayment
of repurchase agreement borrowings
|
- - | (20,000 | ) | - - | ||||||||
Net
increase(decrease) in other borrowings
|
(4,860 | ) | 4,863 | 17,626 | ||||||||
Proceeds
from issuance of preferred stock, net
|
76,868 | - - | - - | |||||||||
Cash
dividends paid on common stock
|
(10,491 | ) | (11,249 | ) | (9,117 | ) | ||||||
Proceeds
from issuance of common stock
|
1,906 | 2,836 | 2,090 | |||||||||
Repurchase
of common stock
|
- - | (2,121 | ) | - - | ||||||||
Excess
tax benefit from stock-based compensation
|
241 | 979 | 907 | |||||||||
Net
cash provided by(used in) financing activities
|
(84,916 | ) | 189,203 | 140,768 | ||||||||
Increase(decrease)
in cash and cash equivalents
|
(5,245 | ) | (10,369 | ) | 3,938 | |||||||
Cash
and cash equivalents at beginning of year
|
93,975 | 104,344 | 100,406 | |||||||||
Cash
and cash equivalents at end of year
|
$ | 88,730 | $ | 93,975 | $ | 104,344 | ||||||
Supplemental
Information:
|
||||||||||||
Cash
paid for interest
|
$ | 60,083 | $ | 69,383 | $ | 53,168 | ||||||
Cash
paid for income tax
|
$ | 9,937 | $ | 13,930 | $ | 14,575 | ||||||
Loans
foreclosed and transferred to other real estate owned or other personal
property owned
|
$ | 3,564 | $ | - - | $ | - - | ||||||
Transfer
of securities from held to maturity to available for sale
|
$ | - - | $ | 1,258 | $ | - - | ||||||
Share-based
consideration issued for acquisitions
|
- - | $ | 57,119 | $ | - - |
1.
|
Summary
of Significant Accounting Policies
|
2.
|
Earnings
per Common Share
|
|
Information
used to calculate earnings per common share was as
follows:
|
Year
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in
thousands except per share)
|
||||||||||||
Net
income
|
$ | 5,968 | $ | 32,381 | $ | 32,103 | ||||||
Accumulated
preferred dividends
|
(427 | ) | - - | - - | ||||||||
Amortization
of preferred stock discount
|
(43 | ) | - - | - - | ||||||||
Net
income applicable to common shareholders
|
$ | 5,498 | $ | 32,381 | $ | 32,103 | ||||||
Basic
weighted average common shares outstanding
|
17,914 | 16,802 | 15,946 | |||||||||
Dilutive
effect of potential common shares from:
|
||||||||||||
Awards
granted under equity incentive program
|
75 | 170 | 202 | |||||||||
Common
stock warrants
|
21 | - - | - - | |||||||||
Diluted
weighted average common shares outstanding
|
18,010 | 16,972 | 16,148 | |||||||||
Earnings
per common share
|
||||||||||||
Basic
|
$ | 0.31 | $ | 1.93 | $ | 2.01 | ||||||
Diluted
|
$ | 0.31 | $ | 1.91 | $ | 1.99 |
3.
|
Cash
and Cash Equivalents
|
4.
|
Securities
|
Amortized
Cost
|
Gross
Unrealized Gains
|
Gross
Unrealized Losses
|
Fair
Value
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
December
31, 2008:
|
||||||||||||||||
U.S.
Government sponsored enterprise
|
$ | 488 | $ | - - | $ | - - | $ | 488 | ||||||||
U.S.
Government agency and government-sponsored enterprise mortgage-backed
securities & collateralized mortgage obligations
|
335,207 | 6,889 | (258 | ) | 341,838 | |||||||||||
State
and municipal securities
|
188,415 | 2,547 | (5,309 | ) | 185,653 | |||||||||||
Other
securities
|
1,000 | - - | (61 | ) | 939 | |||||||||||
Total
|
$ | 525,110 | $ | 9,436 | $ | (5,628 | ) | $ | 528,918 | |||||||
Amortized
Cost
|
Gross
Unrealized Gains
|
Gross
Unrealized Losses
|
Fair
Value
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
December
31, 2007:
|
||||||||||||||||
U.S.
Government sponsored enterprise
|
$ | 61,137 | $ | 216 | $ | (53 | ) | $ | 61,300 | |||||||
U.S.
Government agency and government-sponsored enterprise mortgage-backed
securities & collateralized mortgage obligations
|
304,475 | 1,132 | (1,865 | ) | 303,742 | |||||||||||
State
and municipal securities
|
190,673 | 3,782 | (490 | ) | 193,965 | |||||||||||
Other
securities
|
2,400 | - - | (41 | ) | 2,359 | |||||||||||
Total
|
$ | 558,685 | $ | 5,130 | $ | (2,449 | ) | $ | 561,366 |
December
31, 2008
|
||||||||
Amortized
Cost
|
Fair
Value
|
|||||||
(in
thousands)
|
||||||||
U.S.
Government agency and government-sponsored enterprise mortgage-backed
securities & collateralized mortgage obligations (1)
|
||||||||
Due
through 1 year
|
$ | 58 | $ | 59 | ||||
Over
1 through 5 years
|
2,057 | 2,078 | ||||||
Over
5 through 10 years
|
139,046 | 140,318 | ||||||
Over
10 years
|
194,046 | 199,383 | ||||||
Total
|
$ | 335,207 | $ | 341,838 | ||||
State
and municipal securities
|
||||||||
Due
through 1 year
|
$ | 1,801 | $ | 1,804 | ||||
Over
1 through 5 years
|
16,091 | 16,839 | ||||||
Over
5 through 10 years
|
36,028 | 36,444 | ||||||
Over
10 years
|
134,495 | 130,566 | ||||||
Total
|
$ | 188,415 | $ | 185,653 |
(1)
|
The
maturities reported for mortgage-backed securities and collateralized
mortgage obligations are based on contractual maturities and principal
amortization.
|
Less
than 12 months
|
12
Months or More
|
Total
|
||||||||||||||||||||||
December
31, 2008
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||
U.S.
Government sponsored enterprise
|
$ | - - | $ | - - | $ | - - | $ | - - | $ | - - | $ | - - | ||||||||||||
U.S.
Government agency and government-sponsored enterprise mortgage-backed
securities & collateralized mortgage obligations
|
562 | (3 | ) | 17,414 | (255 | ) | 17,976 | (258 | ) | |||||||||||||||
State
and municipal securities
|
95,560 | (4,744 | ) | 6,863 | (565 | ) | 102,423 | (5,309 | ) | |||||||||||||||
Other
securities
|
- - | - - | 939 | (61 | ) | 939 | (61 | ) | ||||||||||||||||
Total
|
$ | 96,122 | $ | (4,747 | ) | $ | 25,216 | $ | (881 | ) | $ | 121,338 | $ | (5,628 | ) |
Less
than 12 months
|
12
Months or More
|
Total
|
||||||||||||||||||||||
December
31, 2007
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||
U.S.
Government sponsored enterprise
|
$ | - - | $ | - - | $ | 17,678 | $ | (53 | ) | $ | 17,678 | $ | (53 | ) | ||||||||||
U.S.
Government agency and government-sponsored enterprise mortgage-backed
securities & collateralized mortgage obligations
|
16,897 | (28 | ) | 170,932 | (1,837 | ) | 187,829 | (1,865 | ) | |||||||||||||||
State
and municipal securities
|
19,725 | (112 | ) | 24,549 | (378 | ) | 44,274 | (490 | ) | |||||||||||||||
Other
securities
|
- - | - - | 959 | (41 | ) | 959 | (41 | ) | ||||||||||||||||
Total
|
$ | 36,622 | $ | (140 | ) | $ | 214,118 | $ | (2,309 | ) | $ | 250,740 | $ | (2,449 | ) |
5.
|
Comprehensive
Income
|
|
The
components of comprehensive income are as
follows:
|
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in
thousands)
|
||||||||||||
Net
income as reported
|
$ | 5,968 | $ | 32,381 | $ | 32,103 | ||||||
Unrealized
gain(loss) from securities:
|
||||||||||||
Net
unrealized holding gain(loss) from available for sale securities arising
during the year, net of tax of $(699), $(2,985) and $572
|
1,275 | 5,540 | (1,009 | ) | ||||||||
Reclassification
adjustment of net gain from sale of available for sale securities included
in income, net of tax of $300, $0 and $13
|
(546 | ) | - - | (23 | ) | |||||||
Net
unrealized gain(loss) from securities, net of reclassification
adjustment
|
729 | 5,540 | (1,032 | ) | ||||||||
Unrealized
gain(loss) from cash flow hedging instruments:
|
||||||||||||
Net
unrealized gain from cash flow hedging instruments arising during the
year, net of tax of $410, $1,552 and $197
|
754 | 2,847 | 361 | |||||||||
Reclassification
adjustment of net (gain)loss included in income, net of tax of $587, $43
and $0
|
(1,106 | ) | 78 | - - | ||||||||
Net
unrealized gain(loss) from cash flow hedging instruments
|
(352 | ) | 2,925 | 361 | ||||||||
Total
comprehensive income
|
$ | 6,345 | $ | 40,846 | $ | 31,432 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
(in
thousands)
|
||||||||
Commercial
business
|
$ | 810,922 | $ | 762,365 | ||||
Real
estate:
|
||||||||
One-to-four
family residential
|
57,237 | 60,991 | ||||||
Commercial
and five or more family residential properties
|
862,595 | 852,139 | ||||||
Total
real estate
|
919,832 | 913,130 | ||||||
Real
estate construction:
|
||||||||
One-to-four
family residential
|
209,682 | 269,115 | ||||||
Commercial
and five or more family residential properties
|
81,176 | 165,490 | ||||||
Total
real estate construction
|
290,858 | 434,605 | ||||||
Consumer
|
214,753 | 176,559 | ||||||
Subtotal
|
2,236,365 | 2,286,659 | ||||||
Less
deferred loan fees and other
|
(4,033 | ) | (3,931 | ) | ||||
Total
loans, net of deferred loan fees
|
$ | 2,232,332 | $ | 2,282,728 | ||||
Loans
held for sale
|
$ | 1,964 | $ | 4,482 |
7.
|
Allowances
for Loan and Lease Losses and Unfunded Loan Commitments and Letters of
Credit
|
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in
thousands)
|
||||||||||||
Balance
at beginning of year
|
$ | 26,599 | $ | 20,182 | $ | 20,829 | ||||||
Loans
charged off
|
(25,987 | ) | (1,213 | ) | (3,195 | ) | ||||||
Recoveries
|
959 | 833 | 483 | |||||||||
Net
chargeoffs
|
(25,028 | ) | (380 | ) | (2,712 | ) | ||||||
Balance
established in acquisition
|
- - | 3,192 | - - | |||||||||
Provision
charged to expense
|
41,176 | 3,605 | 2,065 | |||||||||
Balance
at end of year
|
$ | 42,747 | $ | 26,599 | $ | 20,182 |
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in
thousands)
|
||||||||||||
Balance
at beginning of year
|
$ | 349 | $ | 339 | $ | 339 | ||||||
Net
changes in the allowance for unfunded loan commitments and letters of
credit
|
151 | 10 | - | |||||||||
Balance
at end of year
|
$ | 500 | $ | 349 | $ | 339 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
(in
thousands)
|
||||||||
Land
|
$ | 17,507 | $ | 15,026 | ||||
Buildings
|
44,374 | 40,321 | ||||||
Leasehold
improvements
|
2,833 | 2,208 | ||||||
Equipment
under capital lease
|
510 | 537 | ||||||
Furniture
and equipment
|
22,671 | 22,685 | ||||||
Vehicles
|
339 | 358 | ||||||
Computer
software
|
8,716 | 7,655 | ||||||
Total
cost
|
96,950 | 88,790 | ||||||
Less
accumulated depreciation and amortization
|
(35,811 | ) | (32,668 | ) | ||||
Total
|
$ | 61,139 | $ | 56,122 |
9.
|
Goodwill
and Other Intangibles
|
Goodwill
|
CDI
|
|||||||
(in
thousands)
|
||||||||
Balance
at December 31, 2006
|
$ | 29,723 | $ | 2,944 | ||||
Additions
|
66,288 | 4,825 | ||||||
Amortization
|
- - | (719 | ) | |||||
Balance
at December 31, 2007
|
96,011 | 7,050 | ||||||
Additions
|
- - | - - | ||||||
Amortization
|
- - | (1,142 | ) | |||||
Other
|
(492 | ) | - - | |||||
Balance
at December 31, 2008
|
$ | 95,519 | $ | 5,908 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
Deposit
Composition
|
(in thousands)
|
|||||||
Core
deposits:
|
||||||||
Demand
and other non-interest bearing
|
$ | 466,078 | $ | 468,237 | ||||
Interest
bearing demand
|
519,124 | 478,596 | ||||||
Money
market
|
530,065 | 609,502 | ||||||
Savings
|
122,076 | 115,324 | ||||||
Certificates
of deposit less than $100,000
|
303,704 | 324,734 | ||||||
Total
core deposits
|
1,941,047 | 1,996,393 | ||||||
Certificates
of deposit greater than $100,000
|
338,971 | 428,885 | ||||||
Wholesale
certificates of deposit (CDARS®)
|
39,903 | 762 | ||||||
Wholesale
certificates of deposit
|
62,230 | 72,021 | ||||||
Total
deposits
|
$ | 2,382,151 | $ | 2,498,061 |
Years
Ending December 31,
|
(in
thousands)
|
|||
2009
|
$ | 333,100 | ||
2010
|
11,499 | |||
2011
|
6,961 | |||
2012
|
2,796 | |||
2013
|
2,109 | |||
Thereafter
|
- - | |||
Total
|
$ | 356,465 |
11.
|
Federal
Home Loan Bank and Federal Reserve Bank
Borrowings
|
Federal
Home Loan Bank Advances
|
||||||||||||||||||||||||
Adjustable
rate
|
Fixed
rate
|
Total
|
||||||||||||||||||||||
advances
|
advances
|
advances
|
||||||||||||||||||||||
Wtd
Avg Rate
|
Amount
|
Wtd
Avg Rate
|
Amount
|
Wtd
Avg Rate
|
Amount
|
|||||||||||||||||||
(dollars in thousands)
|
||||||||||||||||||||||||
Due
through 1 year
|
0.63 | % | $ | 49,000 | 3.89 | % | $ | 1,000 | 0.64 | % | $ | 50,000 | ||||||||||||
Over
1 through 5 years
|
- - | - - | 2.49 | % | 100,000 | 2.49 | % | 100,000 | ||||||||||||||||
Total
FHLB advances
|
0.63 | % | $ | 49,000 | 2.50 | % | $ | 101,000 | 1.89 | % | $ | 150,000 |
Years
ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(dollars
in thousands)
|
||||||||||||
Balance
at end of year
|
$ | 150,000 | $ | 257,670 | $ | 205,800 | ||||||
Average
balance during the year
|
$ | 282,624 | $ | 207,521 | $ | 208,594 | ||||||
Maximum
month-end balance during the year
|
$ | 349,000 | $ | 264,250 | $ | 303,000 | ||||||
Weighted
average rate during the year
|
2.53 | % | 5.27 | % | 5.25 | % | ||||||
Weighted
average rate at December 31
|
1.89 | % | 4.59 | % | 5.56 | % |
December
31,
|
||||||||
2008
|
2007
|
|||||||
(in
thousands)
|
||||||||
Fair
value of investment securities
|
$ | 168,537 | $ | 274,354 | ||||
Recorded
value of blanket pledge on loans receivable
|
467,682 | 106,344 | ||||||
Total
|
$ | 636,219 | $ | 380,698 | ||||
FHLB
Borrowing Capacity
|
$ | 486,219 | $ | 50,998 |
Federal Reserve
Bank Borrowings
|
||||||||||||||||||||||||
Adjustable
rate
|
Fixed
rate
|
Total
|
||||||||||||||||||||||
advances
|
advances
|
advances
|
||||||||||||||||||||||
Wtd
Avg Rate
|
Amount
|
Wtd
Avg Rate
|
Amount
|
Wtd
Avg Rate
|
Amount
|
|||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||
Due
through 1 year
|
0.00 | % | $ | - - | 0.60 | % | $ | 50,000 | 0.60 | % | $ | 50,000 |
Years
ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(dollars
in thousands)
|
||||||||||||
Balance
at end of year
|
$ | 50,000 | $ | - - | $ | - - | ||||||
Average
balance during the year
|
$ | 14,569 | $ | 54 | $ | 27 | ||||||
Maximum
month-end balance during the year
|
$ | 120,000 | $ | - - | $ | - - | ||||||
Weighted
average rate during the year
|
0.62 | % | 5.36 | % | 5.50 | % | ||||||
Weighted
average rate at December 31
|
0.60 | % | 0.00 | % | 0.00 | % |
December
31,
|
||||||||
2008
|
2007
|
|||||||
(in
thousands)
|
||||||||
Fair
value of investment securities
|
$ | 144,754 | $ | 22,672 | ||||
Federal
Reserve Bank borrowing capacity
|
$ | 94,754 | $ | 22,672 |
13.
|
Long-term
Subordinated Debt
|
14.
|
Income
Tax
|
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in
thousands)
|
||||||||||||
Current
tax expense
|
$ | 9,503 | $ | 14,360 | $ | 14,121 | ||||||
Deferred
benefit
|
(14,409 | ) | (2,607 | ) | (1,988 | ) | ||||||
Total
|
$ | (4,906 | ) | $ | 11,753 | $ | 12,133 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
(in
thousands)
|
||||||||
Deferred
tax assets:
|
||||||||
Allowance
for loan and lease losses
|
$ | 15,139 | $ | 9,284 | ||||
Supplemental
executive retirement plan
|
4,684 | 4,379 | ||||||
Stock
option and restricted stock
|
873 | 536 | ||||||
Litigation
reserve
|
199 | 627 | ||||||
Preferred
stock
|
6,920 | - - | ||||||
Other
|
1,847 | 483 | ||||||
Total
deferred tax assets
|
29,662 | 15,309 | ||||||
Deferred
tax liabilities:
|
||||||||
FHLB
stock dividends
|
(1,985 | ) | (2,028 | ) | ||||
Purchase
accounting
|
(2,093 | ) | (2,534 | ) | ||||
Section
481 adjustment-deferred fees
|
(105 | ) | (150 | ) | ||||
Deferred
loan fees
|
(885 | ) | - - | |||||
Unrealized
gain on investment securities
|
(1,353 | ) | (954 | ) | ||||
Unrealized
gain on cash flow hedging instruments
|
- - | (1,750 | ) | |||||
Depreciation
|
(753 | ) | (1,165 | ) | ||||
Total
deferred tax liabilities
|
(7,174 | ) | (8,581 | ) | ||||
Net
deferred tax assets
|
$ | 22,488 | $ | 6,728 |
Years
Ended December 31,
|
||||||||||||||||||||||||
2008
|
2007
|
2006
|
||||||||||||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||
(in
thousands)
|
||||||||||||||||||||||||
Income
tax based on statutory rate
|
$ | 372 | 35 | % | $ | 15,447 | 35 | % | $ | 15,483 | 35 | % | ||||||||||||
Reduction
resulting from:
|
||||||||||||||||||||||||
Tax
credits
|
(725 | ) | (68) | % | (711 | ) | (1) | % | (566 | ) | (1) | % | ||||||||||||
Tax
exempt instruments
|
(2,810 | ) | (265) | % | (2,631 | ) | (6) | % | (2,484 | ) | (6) | % | ||||||||||||
Life
insurance proceeds
|
(940 | ) | (89) | % | - - | 0 | % | - - | 0 | % | ||||||||||||||
Other
nondeductible items
|
(803 | ) | (76) | % | (352 | ) | (1) | % | (300 | ) | (1) | % | ||||||||||||
Income
tax provision (benefit)
|
$ | (4,906 | ) | (463) | % | $ | 11,753 | 27 | % | $ | 12,133 | 27 | % |
15.
|
Share-Based
Payments
|
Nonvested
Shares
|
Shares
|
Weighted
Average Grant-Date Fair Value
|
||||||
Nonvested
at January 1, 2006
|
8,000 | $ | 24.34 | |||||
Granted
|
87,025 | 33.04 | ||||||
Vested
|
(6,000 | ) | 27.74 | |||||
Forfeited
|
(5,850 | ) | 33.10 | |||||
Nonvested
at December 31, 2006
|
83,175 | 32.58 | ||||||
Granted
|
76,250 | 31.63 | ||||||
Vested
|
(6,500 | ) | 28.27 | |||||
Forfeited
|
(9,600 | ) | 31.32 | |||||
Nonvested
at December 31, 2007
|
143,325 | 32.36 | ||||||
Granted
|
69,360 | 23.65 | ||||||
Vested
|
(13,065 | ) | 30.89 | |||||
Forfeited
|
(8,300 | ) | 29.72 | |||||
Nonvested
at December 31, 2008
|
191,320 | $ | 29.41 |
For
The Twelve Months Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Expected
Life (in years)
|
- - | 4.14 | - - | |||||||||
Expected
Volatility
|
- - | 29.47 | % | - - | ||||||||
Weighted
Average Risk-free Interest Rate
|
- - | 4.53 | % | - - | ||||||||
Expected
Annual Dividend Yield
|
- - | 2.01 | % | - - | ||||||||
Weighted
Average Fair Value
|
- - | $ | 15.61 | - - |
Options
|
Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Term
|
Aggregate
Intrinsic Value ($000)
|
||||||||||||
Balance
at December 31, 2007
|
331,868 | $ | 14.77 | |||||||||||||
Granted
|
- | - | ||||||||||||||
Forfeited
|
(7,861 | ) | 20.87 | |||||||||||||
Expired
|
(13,341 | ) | 10.82 | |||||||||||||
Exercised
|
(108,685 | ) | 11.60 | |||||||||||||
Balance
at December 31, 2008
|
201,981 | $ | 16.49 | 3.3 | $ | 110 | ||||||||||
Total
Exercisable at December 31, 2008
|
201,981 | $ | 16.49 | 3.3 | $ | 110 |
Ranges
of
Exercise
Prices
|
Number
of
Option
Shares
|
Weighted
Average Remaining
Contractual
Life
|
Weighted
Average Exercise Price of
Option
Shares
|
Number
of
Exercisable
Option
Shares
|
Weighted
Average Exercise Price of Exercisable Option
Shares
|
|||||||||||||||||
$ | 3.09 - 6.17 | 10,177 | 2.8 | $ | 4.91 | 10,177 | $ | 4.91 | ||||||||||||||
6.18 - 9.25 | 2,326 | 3.9 | 6.31 | 2,326 | 6.31 | |||||||||||||||||
9.26 - 12.34 | 59,364 | 1.1 | 11.62 | 59,364 | 11.62 | |||||||||||||||||
12.35 - 15.43 | 42,236 | 4.0 | 13.98 | 42,236 | 13.98 | |||||||||||||||||
15.44 - 18.51 | 13,749 | 3.6 | 17.29 | 13,749 | 17.29 | |||||||||||||||||
18.52 - 21.60 | 21,648 | 5.5 | 18.95 | 21,648 | 18.95 | |||||||||||||||||
21.61 - 24.68 | 15,500 | 3.9 | 22.95 | 15,500 | 22.95 | |||||||||||||||||
24.69 - 27.77 | 31,310 | 3.9 | 25.77 | 31,310 | 25.77 | |||||||||||||||||
27.78 - 30.86 | 5,671 | 8.1 | 30.86 | 5,671 | 30.86 | |||||||||||||||||
201,981 | 3.3 | $ | 16.49 | 201,981 | $ | 16.49 |
16.
|
Regulatory
Capital Requirements
|
Actual
|
For
Capital
Adequacy
Purposes
|
To
Be Well
Capitalized
Under
Prompt
Corrective
Action
Provision
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(dollars
in thousands)
|
||||||||||||||||||||||||
As
of December 31, 2008
|
||||||||||||||||||||||||
Total
Capital (to risk-weighted assets):
|
||||||||||||||||||||||||
The
Company
|
$ | 365,797 | 14.25 | % | $ | 205,388 | 8.0 | % | N/A | N/A | ||||||||||||||
Columbia
Bank
|
$ | 287,665 | 11.21 | % | $ | 205,202 | 8.0 | % | $ | 256,503 | 10.0 | % | ||||||||||||
Tier
1 Capital (to risk-weighted assets):
|
||||||||||||||||||||||||
The
Company
|
$ | 333,568 | 12.99 | % | $ | 102,694 | 4.0 | % | N/A | N/A | ||||||||||||||
Columbia
Bank
|
$ | 255,464 | 9.96 | % | $ | 102,601 | 4.0 | % | $ | 153,902 | 6.0 | % | ||||||||||||
Tier
1 Capital (to average assets):
|
||||||||||||||||||||||||
The
Company
|
$ | 333,568 | 11.27 | % | $ | 118,418 | 4.0 | % | N/A | N/A | ||||||||||||||
Columbia
Bank
|
$ | 255,464 | 8.64 | % | $ | 118,288 | 4.0 | % | $ | 147,860 | 5.0 | % | ||||||||||||
As
of December 31, 2007
|
||||||||||||||||||||||||
Total
Capital (to risk-weighted assets):
|
||||||||||||||||||||||||
The
Company
|
$ | 285,606 | 10.90 | % | $ | 209,618 | 8.0 | % | N/A | N/A | ||||||||||||||
Columbia
Bank
|
$ | 257,753 | 10.49 | % | $ | 196,532 | 8.0 | % | $ | 245,665 | 10.0 | % | ||||||||||||
Tier
1 Capital (to risk-weighted assets):
|
||||||||||||||||||||||||
The
Company
|
$ | 258,658 | 9.87 | % | $ | 104,809 | 4.0 | % | N/A | N/A | ||||||||||||||
Columbia
Bank
|
$ | 232,707 | 9.47 | % | $ | 98,266 | 4.0 | % | $ | 147,399 | 6.0 | % | ||||||||||||
Tier
1 Capital (to average assets):
|
||||||||||||||||||||||||
The
Company
|
$ | 258,658 | 8.54 | % | $ | 121,122 | 4.0 | % | N/A | N/A | ||||||||||||||
Columbia
Bank
|
$ | 232,707 | 8.23 | % | $ | 113,056 | 4.0 | % | $ | 141,320 | 5.0 | % |
17.
|
Employee
Benefit Plans
|
December
31,
|
||||||||
2008
|
2007
|
|||||||
(in
thousands)
|
||||||||
Balance
at beginning of year
|
$ | 7,912 | $ | 4,182 | ||||
Benefit
expense
|
917 | 828 | ||||||
Established
through acquisitions
|
- - | 3,203 | ||||||
Benefit
payments
|
(288 | ) | (301 | ) | ||||
Balance
at end of year
|
$ | 8,541 | $ | 7,912 |
Years
Ending December 31,
|
(in
thousands)
|
|||
2009
|
$ | 294 | ||
2010
|
380 | |||
2011
|
386 | |||
2012
|
392 | |||
2013
|
398 | |||
2014
through 2018
|
2,911 | |||
Total
|
$ | 4,761 |
18.
|
Commitments
and Contingent Liabilities
|
Years
Ending December 31,
|
(in
thousands)
|
|||
2009
|
$ | 3,371 | ||
2010
|
3,192 | |||
2011
|
3,041 | |||
2012
|
2,851 | |||
2013
|
2,764 | |||
Thereafter
|
8,839 | |||
Total
minimum payments
|
$ | 24,058 |
19.
|
Fair
Value Accounting and Measurement
|
Fair
value at
|
Fair
Value Measurements at Reporting Date Using
|
|||||||||||||||
December
31, 2008
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Assets
|
||||||||||||||||
Securities
available for sale
|
$ | 528,918 | $ | 488 | $ | 528,430 | $ | - - | ||||||||
Interest
rate swap agreements
|
$ | 14,933 | $ | - - | $ | 14,933 | $ | - - | ||||||||
Liabilities
|
||||||||||||||||
Interest
rate swap agreements
|
$ | 14,933 | $ | - - | $ | 14,933 | $ | - - |
Fair
value at
|
Fair
Value Measurements at Reporting Date Using
|
|||||||||||||||
December
31, 2008
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Impaired
loans
|
$ | 7,121 | $ | - - | - | $ | - - | $ | 7,121 | |||||||
Other
real estate owned
|
2,426 | - - | - - | 2,426 | ||||||||||||
$ | 9,547 | $ | - - | $ | - - | $ | 9,547 |
20.
|
Fair
Value of Financial Instruments
|
December
31,
|
|||||||||||||||||
2008
|
2007
|
||||||||||||||||
Assumptions
Used in Estimating Fair Value
|
Carrying
Amount
|
Fair Value
|
Carrying
Amount
|
Fair Value
|
|||||||||||||
(in
thousands)
|
|||||||||||||||||
Assets
|
|||||||||||||||||
Cash
and due from banks
|
Approximately
equal to carrying value
|
$ | 84,787 | $ | 84,787 | $ | 82,735 | $ | 82,735 | ||||||||
Interest-earning
deposits with banks
|
Approximately
equal to carrying value
|
3,943 | 3,943 | 11,240 | 11,240 | ||||||||||||
Securities
available for sale
|
Quoted
market prices, discounted expected future cash flows
|
528,918 | 528,918 | 561,366 | 561,366 | ||||||||||||
Loans
held for sale
|
Approximately
equal to carrying value
|
1,964 | 1,964 | 4,482 | 4,482 | ||||||||||||
Loans
|
2008:
Comparable market statistics
2007:Discounted
expected future cash flows, net of ALLL
|
2,189,585 | 2,023,405 | 2,256,129 | 2,275,949 | ||||||||||||
Liabilities
|
|||||||||||||||||
Deposits
|
Fixed-rate
certificates of deposit: Discounted expected future cash
flows
All
other deposits: Approximately equal to carrying value
|
$ | 2,382,151 | $ | 2,390,024 | $ | 2,498,061 | $ | 2,499,331 | ||||||||
Federal
Home Loan Bank and Federal Reserve Bank borrowings
|
Discounted
expected future cash flows
|
200,000 | 203,898 | 257,670 | 257,535 | ||||||||||||
Repurchase
agreements
|
Discounted
expected future cash flows
|
25,000 | 25,055 | - - | - - | ||||||||||||
Other
borrowings
|
Approximately
equal to carrying value
|
201 | 201 | 5,061 | 5,061 | ||||||||||||
Long-term
obligations
|
2008:
Discounted expected future cash flows
2007:
Approximately equal to carrying value
|
25,603 | 14,813 | 25,519 | 25,519 |
21.
|
Derivatives
and Hedging Activities
|
22.
|
Business
Segment Information
|
Year
Ended December 31, 2008
|
||||||||||||||||
Commercial
Banking
|
Retail
Banking
|
Other
|
Total
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Net
interest income
|
$ | 47,461 | $ | 55,411 | $ | 16,641 | $ | 119,513 | ||||||||
Provision
for loan and lease losses
|
- - | - - | (41,176 | ) | (41,176 | ) | ||||||||||
Net
interest income after provision for loan and lease losses
|
47,461 | 55,411 | (24,535 | ) | 78,337 | |||||||||||
Noninterest
income
|
3,624 | 9,089 | 2,137 | 14,850 | ||||||||||||
Noninterest
expense
|
(22,587 | ) | (41,679 | ) | (27,859 | ) | (92,125 | ) | ||||||||
Income
(loss) before income taxes
|
28,498 | 22,821 | (50,257 | ) | 1,062 | |||||||||||
Income
tax benefit
|
4,906 | |||||||||||||||
Net
income
|
$ | 5,968 | ||||||||||||||
Total
assets
|
$ | 1,443,029 | $ | 1,000,209 | $ | 653,841 | $ | 3,097,079 |
Year
Ended December 31, 2007
|
||||||||||||||||
Commercial
Banking
|
Retail
Banking
|
Other
|
Total
|
|||||||||||||
(in
thousands)
|
||||||||||||||||
Net
interest income
|
$ | 30,062 | $ | 82,306 | $ | (3,548 | ) | $ | 108,820 | |||||||
Provision
for loan and lease losses
|
(3,605 | ) | (3,605 | ) | ||||||||||||
Net
interest income after provision for loan and lease losses
|
30,062 | 82,306 | (7,153 | ) | 105,215 | |||||||||||
Noninterest
income
|
3,192 | 8,571 | 15,985 | 27,748 | ||||||||||||
Noninterest
expense
|
(11,582 | ) | (28,181 | ) | (49,066 | ) | (88,829 | ) | ||||||||
Income
(loss) before income taxes
|
21,672 | 62,696 | (40,234 | ) | 44,134 | |||||||||||
Income
tax provision
|
(11,753 | ) | ||||||||||||||
Net
income
|
$ | 32,381 | ||||||||||||||
Total
assets
|
$ | 1,474,678 | $ | 1,068,282 | $ | 635,753 | $ | 3,178,713 |
Year
Ended December 31, 2006
|
||||||||||||||||
Commercial
Banking
|
Retail
Banking
|
Other
|
Total
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Net
interest income
|
$ | 22,870 | $ | 79,366 | $ | (4,473 | ) | $ | 97,763 | |||||||
Provision
for loan and lease losses
|
(2,065 | ) | (2,065 | ) | ||||||||||||
Net
interest income after provision for loan and lease losses
|
22,870 | 79,366 | (6,538 | ) | 95,698 | |||||||||||
Noninterest
income
|
2,076 | 7,700 | 14,896 | 24,672 | ||||||||||||
Noninterest
expense
|
(10,197 | ) | (25,642 | ) | (40,295 | ) | (76,134 | ) | ||||||||
Income
(loss) before income taxes
|
14,749 | 61,424 | (31,937 | ) | 44,236 | |||||||||||
Income
tax provision
|
(12,133 | ) | ||||||||||||||
Net
income
|
$ | 32,103 | ||||||||||||||
Total
assets
|
$ | 1,204,269 | $ | 682,029 | $ | 666,833 | $ | 2,553,131 |
23.
|
Preferred Stock and
Warrant
|
24.
|
Parent
Company Financial Information
|
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in
thousands)
|
||||||||||||
Income
|
||||||||||||
Dividend
from banking subsidiaries
|
$ | 3,380 | $ | 4,475 | $ | 17,200 | ||||||
Interest
on securities available for sale
|
- - | - - | 53 | |||||||||
Interest-earning
deposits
|
369 | 590 | 435 | |||||||||
Other
income
|
54 | 64 | 79 | |||||||||
Total
Income
|
3,803 | 5,129 | 17,767 | |||||||||
Expense
|
||||||||||||
Compensation
and employee benefits
|
754 | 451 | 436 | |||||||||
Long-term
obligations
|
1,800 | 2,177 | 1,992 | |||||||||
Other
expense
|
1,435 | 948 | 889 | |||||||||
Total
Expenses
|
3,989 | 3,576 | 3,317 | |||||||||
Income
(loss) before income tax benefit and equity in undistributed net income of
subsidiaries
|
(186 | ) | 1,553 | 14,450 | ||||||||
Income
tax benefit
|
(1,205 | ) | (1,031 | ) | (1,070 | ) | ||||||
Income
before equity in undistributed net income of subsidiaries
|
1,019 | 2,584 | 15,520 | |||||||||
Equity
in undistributed net income of subsidiaries
|
4,949 | 29,797 | 16,583 | |||||||||
Net
Income
|
$ | 5,968 | $ | 32,381 | $ | 32,103 |
December
31,
|
||||||||
2008
|
2007
|
|||||||
(in
thousands)
|
||||||||
Assets
|
||||||||
Cash
and due from banking subsidiaries
|
$ | 797 | $ | 1,663 | ||||
Interest-earning
deposits
|
76,068 | 9,286 | ||||||
Total
cash and cash equivalents
|
76,865 | 10,949 | ||||||
Investment
in banking subsidiaries
|
362,274 | 359,084 | ||||||
Investment
in other subsidiaries
|
774 | 774 | ||||||
Other
assets
|
2,273 | 2,337 | ||||||
Total
Assets
|
$ | 442,186 | $ | 373,144 | ||||
Liabilities
and Shareholders' Equity
|
||||||||
Long-term
subordinated debt
|
$ | 25,603 | $ | 25,519 | ||||
Other
borrowings
|
100 | 5,000 | ||||||
Other
liabilities
|
1,098 | 894 | ||||||
Total
liabilities
|
26,801 | 31,413 | ||||||
Shareholders'
equity
|
415,385 | 341,731 | ||||||
Total
Liabilities and Shareholders' Equity
|
$ | 442,186 | $ | 373,144 |
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
(in
thousands)
|
||||||||||||
Operating
Activities
|
||||||||||||
Net
Income
|
$ | 5,968 | $ | 32,381 | $ | 32,103 | ||||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||||
Equity
in undistributed earnings of subsidiaries
|
(4,949 | ) | (29,797 | ) | (16,583 | ) | ||||||
Stock-based
compensation expense
|
399 | 94 | 185 | |||||||||
Net
changes in other assets and liabilities
|
874 | (27 | ) | 523 | ||||||||
Net
cash provided by operating activities
|
2,292 | 2,651 | 16,228 | |||||||||
Investing
Activities
|
||||||||||||
Proceeds
from maturities of securities available for sale
|
- - | - - | 5,000 | |||||||||
Acquisition
of subsidiaries
|
- - | (2,497 | ) | - - | ||||||||
Net
cash provided by (used in) investing activities
|
- - | (2,497 | ) | 5,000 | ||||||||
Financing
Activities
|
||||||||||||
Net
increase (decrease) in short-term borrowings
|
(4,900 | ) | 5,000 | (2,500 | ) | |||||||
Cash
dividends paid
|
(10,491 | ) | (11,249 | ) | (9,117 | ) | ||||||
Proceeds
from issuance of preferred stock, net
|
76,868 | |||||||||||
Proceeds
from issuance of common stock, net
|
1,906 | 2,836 | 2,090 | |||||||||
Excess
tax benefit from stock-based compensation
|
241 | 979 | 907 | |||||||||
Purchase
and retirement of common stock
|
- - | (2,121 | ) | - | ||||||||
Net
cash provided by (used in) financing activities
|
63,624 | (4,555 | ) | (8,620 | ) | |||||||
Increase
(decrease) in cash and cash equivalents
|
65,916 | (4,401 | ) | 12,608 | ||||||||
Cash
and cash equivalents at beginning of year
|
10,949 | 15,350 | 2,742 | |||||||||
Cash
and cash equivalents at end of year
|
$ | 76,865 | $ | 10,949 | $ | 15,350 | ||||||
Supplemental
Non-Cash Investing and Financing Activities
|
||||||||||||
Issuance
of stock in acquisitions
|
$ | - - | $ | 57,119 | $ | - - |
First
|
Second
|
Third
|
Fourth
|
Year
Ended
|
||||||||||||||||
Quarter
|
Quarter
|
Quarter
|
Quarter
|
December
31,
|
||||||||||||||||
(in
thousands, except per share amounts)
|
||||||||||||||||||||
2008
|
||||||||||||||||||||
Total
interest income
|
$ | 48,433 | $ | 44,323 | $ | 42,337 | $ | 39,967 | $ | 175,060 | ||||||||||
Total
interest expense
|
18,106 | 14,049 | 12,744 | 10,648 | 55,547 | |||||||||||||||
Net
interest income
|
30,327 | 30,274 | 29,593 | 29,319 | 119,513 | |||||||||||||||
Provision
for loan and lease losses
|
2,076 | 15,350 | 10,500 | 13,250 | 41,176 | |||||||||||||||
Noninterest
income
|
10,157 | 9,305 | (10,946 | ) | 6,334 | 14,850 | ||||||||||||||
Noninterest
expense
|
23,554 | 23,367 | 23,391 | 21,813 | 92,125 | |||||||||||||||
Income
(loss) before income taxes
|
14,854 | 862 | (15,244 | ) | 590 | 1,062 | ||||||||||||||
Provision(benefit)
for income taxes
|
3,877 | (1,074 | ) | (6,485 | ) | (1,224 | ) | (4,906 | ) | |||||||||||
Net
Income (Loss)
|
$ | 10,977 | $ | 1,936 | $ | (8,759 | ) | $ | 1,814 | $ | 5,968 | |||||||||
Net
Income (Loss) Per Common Share:
|
||||||||||||||||||||
Basic
|
$ | 0.61 | $ | 0.11 | $ | (0.49 | ) | $ | 0.07 | $ | 0.31 | |||||||||
Diluted
|
$ | 0.61 | $ | 0.11 | $ | (0.49 | ) | $ | 0.07 | $ | 0.31 | |||||||||
2007
|
||||||||||||||||||||
Total
interest income
|
$ | 41,146 | $ | 43,255 | $ | 49,378 | $ | 50,438 | $ | 184,217 | ||||||||||
Total
interest expense
|
16,443 | 17,560 | 20,518 | 20,876 | 75,397 | |||||||||||||||
Net
interest income
|
24,703 | 25,695 | 28,860 | 29,562 | 108,820 | |||||||||||||||
Provision
for loan and lease losses
|
638 | 329 | 1,231 | 1,407 | 3,605 | |||||||||||||||
Noninterest
income
|
6,177 | 6,741 | 7,631 | 7,199 | 27,748 | |||||||||||||||
Noninterest
expense
|
20,402 | 20,266 | 22,425 | 25,736 | 88,829 | |||||||||||||||
Income
before income taxes
|
9,840 | 11,841 | 12,835 | 9,618 | 44,134 | |||||||||||||||
Provision
for income taxes
|
2,557 | 3,297 | 3,579 | 2,320 | 11,753 | |||||||||||||||
Net
Income
|
$ | 7,283 | $ | 8,544 | $ | 9,256 | $ | 7,298 | $ | 32,381 | ||||||||||
Net
Income Per Common Share:
|
||||||||||||||||||||
Basic
|
$ | 0.45 | $ | 0.53 | $ | 0.53 | $ | 0.41 | $ | 1.93 | ||||||||||
Diluted
|
$ | 0.45 | $ | 0.53 | $ | 0.53 | $ | 0.41 | $ | 1.91 |
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
|
CONTROLS
AND PROCEDURES
|
DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE
|
EXECUTIVE
COMPENSATION
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
|
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
|
PRINCIPAL
ACCOUNTING FEES AND SERVICES
|
EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
|
(a)(1)
|
Financial
Statements:
|
(2)
|
Financial Statements
Schedules:
|
(3)
|
Exhibits:
|
COLUMBIA
BANKING SYSTEM, INC.
|
|
(Registrant)
|
|
By:
|
/s/ MELANIE J. DRESSEL
|
Melanie
J. Dressel
|
|
President
and Chief Executive Officer
|
Principal
Executive Officer:
|
|
By:
|
/s/ MELANIE J. DRESSEL
|
Melanie
J. Dressel
|
|
President
and Chief Executive Officer
|
|
Principal
Financial Officer:
|
|
By:
|
/s/ GARY R. SCHMINKEY
|
Gary
R. Schminkey
|
|
Executive
Vice President and Chief Financial Officer
|
|
Principal
Accounting Officer:
|
|
By:
|
/s/ CLINT E. STEIN
|
Clint
E. Stein
|
|
Senior
Vice President and Chief Accounting
Officer
|
[John
P. Folsom]
|
[Donald
Rodman]
|
[Frederick
M. Goldberg]
|
[William
T. Weyerhaeuser]
|
[Thomas
M. Hulbert]
|
[James
M. Will]
|
[Thomas
L. Matson]
|
|
[Daniel
C. Regis]
|
/s/ MELANIE J. DRESSEL
|
Melanie
J. Dressel
|
Attorney-in-fact
|
Exhibit No.
|
|
3.1
|
Amended
and Restated Articles of Incorporation
|
3.2
|
Amended
and Restated Bylaws
|
4.1
|
Specimen
of common stock certificate (1)
|
4.2
|
Form
of Series A Preferred Stock Certificate, together with Certificate of
Designations (1)
|
4.3
|
Pursuant
to Item 601(b) (4) (iii) (A) of Regulation S-K, copies of instruments
defining the rights of holders of long-term debt and preferred securities
are not filed. The Company agrees to furnish a copy thereof to the
Securities and Exchange Commission upon request
|
4.4
|
Warrant
to Purchase Common Stock of Columbia (2)
|
10.1
|
Amended
and Restated Stock Option and Equity Compensation Plan (3)
|
10.2
|
Form
of Stock Option Agreement (4)
|
10.3
|
Form
of Restricted Stock Agreement (4)
|
10.4
|
Form
of Stock Appreciation Right Agreement (4)
|
10.5
|
Form
of Restricted Stock Unit Agreement (4)
|
10.6
|
Amended
and Restated Employee Stock Purchase Plan
(5)
|
10.7
|
Office
Lease, dated as of December 15, 1999, between the Company and Haub
Brothers Enterprises Trust
(6)
|
10.8
|
Employment
Agreement between the Bank, the Company and Melanie J. Dressel effective
August 1, 2004
(7)
|
10.9
|
Severance
Agreement between the Company and Mr. Gary R. Schminkey effective November
15, 2005 (8)
|
10.10
|
Form
of Change in Control Agreement between the Bank , and Mr. Mark W. Nelson
and Mr. Andrew McDonald (4)
|
10.11
|
Form
of Long-Term Care Agreement between the Bank, the Company, and each of the
following directors: Mr. Folsom, Mr. Hulbert, Mr. Matson, Mr. Rodman, Mr.
Weyerhaeuser and Mr. Will (9)
|
10.12
|
Form
of Supplemental Executive Retirement Plan between Columbia Banking System,
Inc., Columbia State Bank, its wholly owned banking subsidiary, and each
of the following executive officers effective August 1, 2001: Melanie J.
Dressel and Gary R. Schminkey, and for Mark W. Nelson, whose agreement is
effective July 1, 2003 (9)
|
10.13
|
Deferred
Compensation Plan (401 Plus Plan) dated December 17, 2003 for directors
and key employees (10)
|
10.14
|
Change
in Control Agreement between the Bank and Mr. Kent L. Roberts dated
December 4, 2006 (11)
|
10.15
|
Form
of Supplemental Compensation Agreement between the Bank and Mr. Andrew
McDonald (4)
|
10.16
|
Town
Center Bancorp 2004 Stock Incentive Plan (12)
|
10.17
|
Town
Center Bancorp Form of Restricted Stock Award Agreement (12)
|
10.18
|
Mountain
Bank Holding Company Director Stock Option Plan (13)
|
10.19
|
Mountain
Bank Holding Company Form of Non-employee Director Stock Option Agreement
(13)
|
Exhibit No.
|
|
10.20
|
Mountain
Bank Holding Company 1999 Employee Stock Option Plan (13)
|
10.21
|
Mountain
Bank Holding Company Form of Employee Stock Option Agreement (13)
|
10.22
|
Mt.
Rainier National Bank 1990 Stock Option Plan (13)
|
10.23
|
Letter
Agreement with Treasury, including Securities Purchase Agreement (2)
|
10.24
|
Form
of Supplemental Compensation Agreement (4)
|
10.25
|
Amendment
to Employment Agreement between the Bank, the Company and Melanie J.
Dressel effective February 1, 2009 (14)
|
14
|
Code
of Ethics (12)
|
21
|
Subsidiaries
of the Company
|
23
|
Consent
of Deloitte & Touche LLP
|
24
|
Power
of Attorney
|
31.1
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
32
|
Certification
Filed Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
|
(1)
|
Incorporated
by reference to Exhibit 4.3 and 4.4 of the Company’s S-3 Registration
Statement (File No. 333-156350) filed December 19,
2008
|
(2)
|
Incorporated
by reference to Exhibits 4.1 and 10.2 of the Company’s Current Report on
Form 8-K filed November 21, 2008
|
(3)
|
Incorporated
by reference to Exhibit 99.1 of the Company’s S-8 Registration Statement
(File No. 333-125298) filed May 27,
2005
|
(4)
|
Incorporated
by reference to Exhibits 10.2 - 10.5 of the Company’s Annual Report on
Form 10-K for the year ended December 31,
2007
|
(5)
|
Incorporated
by reference to Exhibit 99.1 of the Company’s S-8 Registration Statement
(File No. 333-135439) filed June 29,
2006
|
(6)
|
Incorporated
by reference to Exhibit 10.5 of the Company’s Annual Report on Form 10-K
for the year ended December 31,
2000
|
(7)
|
Incorporated
by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form
10-Q for the quarter ended June 30,
2004
|
(8)
|
Incorporate
by reference to Exhibit 10.11 of the Company’s Annual Report on Form 10-K
for the year ended December 31,
2005
|
(9)
|
Incorporated
by reference to Exhibits 10.1—10.3 of the Company’s Quarterly Report on
Form 10-Q for the quarter ended September 30,
2001
|
(10)
|
Incorporated
by reference to Exhibits 10.18 and 14 of the Company’s Annual Report on
Form 10-K for the year ended December 31,
2003
|
(11)
|
Incorporated
by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form
10-Q for the quarter ended March 31,
2007
|
(12)
|
Incorporated
by reference to Exhibits 10.1 and 10.2 of the Company’s S-8 Registration
Statement (File No. 333-145207) filed August 7,
2007
|
(13)
|
Incorporated
by reference to Exhibits 99.1—99.5 of the Company’s S-8 Registration
Statement (File No. 333-144811) filed July 24,
2007
|
(14)
|
Incorporated
by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K
filed February 16, 2009
|