COLUMBIA BANKING SYSTEM, INC. REPORTS FOURTH QUARTER 2024 RESULTS

Organizational Update
Columbia Banking System, Inc. ("Columbia," the "Company," "we," or "our") completed an enterprise-wide evaluation of our operations in early 2024, which resulted in $82 million in annualized cost savings realized during the year. The reinvestment of $12 million of the achieved savings is ongoing and in support of new locations in targeted growth markets, the addition of experienced bankers throughout our footprint, and products and technologies that create operational efficiencies and revenue growth opportunities. During 2024, we opened our first two branches in Arizona and strategically relocated offices in other markets, with our net branch count declining by four given other consolidations. Looking to 2025, we have five branches slated to open in the coming months in support of our customers and bankers.  Key technology enhancements during 2024 include the introduction of a new business online banking platform designed specifically to meet the needs of our small business customers, and we adopted a new customer relationship management ("CRM") tool. Planned reinvestments in 2025 include continued investment in our customer-focused technology stack to not only create operational efficiencies, but also support an elevated customer experience to enhance customer satisfaction and drive additional revenue opportunities through needs-based solutions.

On February 28, 2023, Columbia completed its merger with Umpqua Holdings Corporation ("UHC"), combining the two premier banks in the Northwest to create one of the largest banks headquartered in the West (the "merger"). Columbia's financial results for any periods ended prior to February 28, 2023 reflect UHC results only on a standalone basis. In addition, Columbia's reported financial results for the year ended December 31, 2023 reflect UHC financial results only until the closing of the merger after the close of business on February 28, 2023. As a result of these two factors, Columbia's financial results for the year ended December 31, 2024 may not be directly comparable to prior reported periods. Under the reverse acquisition method of accounting, the assets and liabilities of Columbia as of February 28, 2023 ("historical Columbia") were recorded at their respective fair values.

Net Interest Income
Net interest income was $437 million for the fourth quarter of 2024, up $7 million from the prior quarter. The increase reflects lower funding costs that were only partially offset by lower interest income due to the reductions in the federal funds rate that occurred in September, November, and December.

Columbia's net interest margin was 3.64% for the fourth quarter of 2024, up 8 basis points from the third quarter of 2024. A reduction in deposit costs more than offset lower loan yields as the net interest margin further benefited from the favorable balance sheet funding mix shift into lower-cost sources that occurred throughout the quarter. The cost of interest-bearing deposits decreased 29 basis points from the prior quarter to 2.66% for the fourth quarter of 2024, which compares to 2.59% for the month of December and 2.51% as of December 31, 2024. "Our teams continue to lead with needs-based solutions and service, not price," commented Chris Merrywell, President of Umpqua Bank. "Proactive conversations with our customers ahead of and following recent federal funds rate reductions contributed to favorable changes in the cost of deposits and net interest margin during the quarter."

Columbia's cost of interest-bearing liabilities decreased 31 basis points from the prior quarter to 2.98% for the fourth quarter of 2024, which compares to 2.91% for the month of December and 2.85% as of December 31, 2024. Please refer to the Q4 2024 Earnings Presentation for additional net interest margin change details and interest rate sensitivity information as well as to our non-GAAP disclosures in this press release for the impact of purchase accounting accretion and amortization on individual line items.

Non-interest Income
Non-interest income was $50 million for the fourth quarter of 2024, down $16 million from the prior quarter. The decrease was driven by quarterly changes in fair value adjustments and mortgage servicing rights ("MSR") hedging activity, due to interest rate flucations during the quarter, collectively resulting in a net fair value loss of $6 million in the fourth quarter compared to a net fair value gain of $7 million in the third quarter, as detailed in our non-GAAP disclosures. Excluding these items, non-interest income was down $4 million[2] between periods due primarily to a $2 million loss on the sale of 29 loans with a balance of $26 million at sale. The loss on sale was offset by a corresponding $2 million release of the allowance for credit losses given previously established reserves associated with these specific loans. Non-interest income was also impacted by lower mortgage gain-on-sale income and other quarterly flucations. Treasury management fees, commercial card income, and financial services and trust revenue increased at a low single-digit growth rate from the prior quarter's level. We continue to focus on generating sustainable core fee income with new and existing customers.

Non-interest Expense
Non-interest expense was $267 million for the fourth quarter of 2024, down $5 million from the prior quarter. Excluding merger and restructuring expense and exit and disposal costs, non-interest expense was $263 million[3], also down $5 million from the prior quarter due to a $5 million decline in benefits expense, which was partially affected by elevated group insurance costs in the third quarter. Higher repairs and maintenance expense was partially offset by lower FDIC assessments due to run rate adjustments in the quarter. Please refer to the Q4 2024 Earnings Presentation for additional expense details.

Balance Sheet
Total consolidated assets were $51.6 billion as of December 31, 2024, down slightly from $51.9 billion as of September 30, 2024. Cash and cash equivalents were $1.9 billion as of December 31, 2024, down from $2.1 billion as of September 30, 2024. Including secured off-balance sheet lines of credit, total available liquidity was $18.0 billion as of December 31, 2024, representing 35% of total assets, 43% of total deposits, and 128% of uninsured deposits. Available-for-sale securities, which are held on balance sheet at fair value, were $8.3 billion as of December 31, 2024, a decrease of $402 million relative to September 30, 2024, due to a decline in the fair value of the portfolio as well as paydowns. Please refer to the Q4 2024 Earnings Presentation for additional details related to our securities portfolio and liquidity position.

Gross loans and leases were $37.7 billion as of December 31, 2024, an increase of $178 million relative to September 30, 2024. "Commercial loan generation more than offset anticipated contraction in other loan categories during the quarter, driving a 2% increase in total loans on an annualized basis," commented Mr. Merrywell. "Commercial loans grew 2% during the quarter and 3% in 2024, in support of our strategic decision to organically remix the portfolio into relationship-driven balances as transactional loans decline." Please refer to the Q4 2024 Earnings Presentation for additional details related to our loan portfolio, which include underwriting characteristics, the composition of our commercial portfolios, and disclosure related to our office portfolio.

Total deposits were $41.7 billion as of December 31, 2024, an increase of $206 million relative to September 30, 2024. Customer deposits decreased $282 million during the quarter, due in part to anticipated customer balance declines during December. Columbia utilized excess cash, FHLB Advances, and brokered CDs to offset the decline in customer deposits and fully repay $1.3 billion in borrowings from the Federal Reserve Bank Term Funding Program, which resulted in a net decrease of $550 million in term debt during the fourth quarter. Please refer to the Q4 2024 Earnings Presentation for additional details related to deposit characteristics and flows.

Credit Quality
The allowance for credit losses was $441 million, or 1.17% of loans and leases, compared to $438 million, or 1.17% of loans and leases, as of September 30, 2024. The provision for credit losses was $28 million for the fourth quarter of 2024, and it reflects credit migration trends, charge-off activity, and changes in the economic forecasts used in credit models.

Net charge-offs were 0.27% of average loans and leases (annualized) for the fourth quarter of 2024, compared to 0.31% for the third quarter of 2024. Net charge-offs in the FinPac portfolio were $19 million in the fourth quarter, down slightly from the third quarter as improvement continues within the transportation sector of the portfolio. Net charge-offs excluding the FinPac portfolio were $6 million in the fourth quarter, compared to $9 million in the third quarter. Non-performing assets were $170 million, or 0.33% of total assets, as of December 31, 2024, compared to $168 million, or 0.32%  of total assets, as of September 30, 2024. Please refer to the Q4 2024 Earnings Presentation for additional details related to the allowance for credit losses and other credit trends.

Capital
Columbia's book value per common share was $24.43 as of December 31, 2024, compared to $25.17 as of September 30, 2024. Organic net capital generation was more than offset by a change in accumulated other comprehensive (loss) income ("AOCI") to $(462) million at December 31, 2024, compared to $(234) million at the prior quarter-end. The change in AOCI is due primarily to an increase in the tax-effected net unrealized loss on available-for-sale securities to $434 million as of December 31, 2024, compared to $219 million as of September 30, 2024. Tangible book value per common share³ was $17.20 as of December 31, 2024, compared to $17.81 as of September 30, 2024.

Columbia's estimated total risk-based capital ratio was 12.6% and its estimated common equity tier 1 risk-based capital ratio was 10.5% as of December 31, 2024, compared to 12.5% and 10.3%, respectively, as of September 30, 2024. Columbia remains above current "well-capitalized" regulatory minimums. The regulatory capital ratios as of December 31, 2024 are estimates, pending completion and filing of Columbia's regulatory reports. 

Earnings Presentation and Conference Call Information
Columbia's Q4 2024 Earnings Presentation provides additional disclosure. A copy will be available on our investor relations page: www.columbiabankingsystem.com.

Columbia will host its fourth quarter 2024 earnings conference call on January 23, 2025, at 2:00 p.m. PT (5:00 p.m. ET). During the call, Columbia's management will provide an update on recent activities and discuss its fourth quarter 2024 financial results. Participants may register for the call using the link below to receive dial-in details and their own unique PINs or join the audiocast. It is recommended you join 10 minutes prior to the start time.

Register for the call: https://register.vevent.com/register/BI7bdd9cdcf3dd40b195814a011d060fbe

Join the audiocast: https://edge.media-server.com/mmc/p/322v8qj5/

Access the replay through Columbia's investor relations page: www.columbiabankingsystem.com

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

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