x |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
¨ |
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)
|
1301
“A” Street
Tacoma,
Washington
|
98402-2156
|
(Address
of principal executive offices)
|
(Zip
Code)
|
|
Page
|
|||
PART
I — FINANCIAL INFORMATION
|
|
|||
Item 1.
|
Financial
Statements (unaudited)
|
|
||
|
Consolidated
Condensed Statements of Income - three months and nine months ended
September 30, 2007 and 2006
|
1
|
||
|
Consolidated
Condensed Balance Sheets - September 30, 2007 and December 31,
2006
|
2
|
||
|
Consolidated
Condensed Statements of Changes in Shareholders’ Equity - nine months
ended September 30, 2007 and 2006
|
3
|
||
|
Consolidated
Condensed Statements of Cash Flows - nine months ended September
30, 2007
and 2006
|
5
|
||
|
Notes
to Unaudited Consolidated Condensed Financial Statements
|
6
|
||
Item 2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
13
|
||
|
||||
Item 3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
26
|
||
Item 4.
|
Controls
and Procedures
|
26
|
||
PART
II — OTHER INFORMATION
|
|
|||
Item 1.
|
Legal
Proceedings
|
27
|
||
Item 1A.
|
Risk
Factors
|
27
|
||
Item 2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
27
|
||
Item 3.
|
Defaults
Upon Senior Securities
|
27
|
||
Item 4.
|
Submission
of Matters to a Vote of Security Holders
|
27
|
||
Item 5.
|
Other
Information
|
27
|
||
Item 6.
|
Exhibits
|
27
|
||
|
Signatures
|
28
|
|
Three
Months Ended
September 30,
|
Nine
Months Ended
September 30,
|
|||||||||||
(in
thousands except per share)
|
2007
|
2006
|
2007
|
2006
|
|||||||||
Interest
Income
|
|
|
|
|
|||||||||
Loans
|
$
|
42,353
|
$
|
32,010
|
$
|
112,607
|
$
|
90,982
|
|||||
Taxable
securities
|
4,625
|
5,019
|
14,067
|
15,185
|
|||||||||
Tax-exempt
securities
|
2,005
|
1,944
|
5,925
|
5,124
|
|||||||||
Federal
funds sold and deposits with banks
|
395
|
193
|
1,180
|
354
|
|||||||||
Total
interest income
|
49,378
|
39,166
|
133,779
|
111,645
|
|||||||||
Interest
Expense
|
|||||||||||||
Deposits
|
16,841
|
10,868
|
42,617
|
28,767
|
|||||||||
Federal
Home Loan Bank advances
|
2,454
|
3,370
|
8,117
|
8,344
|
|||||||||
Long-term
obligations
|
584
|
519
|
1,604
|
1,470
|
|||||||||
Other
borrowings
|
639
|
4
|
2,183
|
51
|
|||||||||
Total
interest expense
|
20,518
|
14,761
|
54,521
|
38,632
|
|||||||||
Net
Interest Income
|
28,860
|
24,405
|
79,258
|
73,013
|
|||||||||
Provision
for loan and lease losses
|
1,231
|
650
|
2,198
|
1,115
|
|||||||||
Net
interest income after provision for loan and lease losses
|
27,629
|
23,755
|
77,060
|
71,898
|
|||||||||
Noninterest
Income
|
|||||||||||||
Service
charges and other fees
|
3,561
|
2,891
|
9,813
|
8,632
|
|||||||||
Merchant
services fees
|
2,251
|
2,154
|
6,344
|
6,366
|
|||||||||
Gain
on sale of securities available for sale, net
|
—
|
—
|
—
|
10
|
|||||||||
Bank
owned life insurance (“BOLI”)
|
502
|
427
|
1,379
|
1,260
|
|||||||||
Other
|
1,317
|
636
|
3,013
|
2,080
|
|||||||||
Total
noninterest income
|
7,631
|
6,108
|
20,549
|
18,348
|
|||||||||
Noninterest
Expense
|
|||||||||||||
Compensation
and employee benefits
|
12,159
|
9,878
|
34,365
|
28,973
|
|||||||||
Occupancy
|
3,241
|
2,735
|
9,023
|
8,068
|
|||||||||
Merchant
processing
|
880
|
881
|
2,587
|
2,552
|
|||||||||
Advertising
and promotion
|
575
|
608
|
1,779
|
2,114
|
|||||||||
Data
processing
|
743
|
475
|
1,863
|
1,795
|
|||||||||
Legal
and professional services
|
695
|
580
|
2,205
|
1,547
|
|||||||||
Taxes,
licenses and fees
|
773
|
637
|
2,089
|
1,873
|
|||||||||
Gain
on sale of other real estate owned, net
|
—
|
—
|
—
|
(11
|
)
|
||||||||
Other
|
3,359
|
2,304
|
9,182
|
10,663
|
|||||||||
Total
noninterest expense
|
22,425
|
18,098
|
63,093
|
57,574
|
|||||||||
Income
before income taxes
|
12,835
|
11,765
|
34,516
|
32,672
|
|||||||||
Provision
for income taxes
|
3,579
|
3,430
|
9,433
|
8,910
|
|||||||||
Net
Income
|
$
|
9,256
|
$
|
8,335
|
$
|
25,083
|
$
|
23,762
|
|||||
Net
income per common share:
|
|||||||||||||
Basic
|
$
|
.53
|
$
|
.52
|
$
|
1.52
|
$
|
1.49
|
|||||
Diluted
|
.53
|
.52
|
1.51
|
1.47
|
|||||||||
Dividends
paid per common share
|
$
|
.17
|
$
|
.15
|
$
|
.49
|
$
|
.42
|
|||||
Average
number of common shares outstanding
|
17,339
|
15,981
|
16,472
|
15,931
|
|||||||||
Average
number of diluted common shares outstanding
|
17,533
|
16,143
|
16,636
|
16,135
|
(in
thousands)
|
|
|
September 30,
2007
|
December 31,
2006
|
|||||||||
ASSETS
|
|
|
|
|
|||||||||
Cash
and due from banks
|
$
|
82,760
|
$
|
76,365
|
|||||||||
Interest-earning
deposits with banks
|
6,695
|
13,979
|
|||||||||||
Federal
funds sold
|
15,000
|
14,000
|
|||||||||||
|
|||||||||||||
Total
cash and cash equivalents
|
104,455
|
104,344
|
|||||||||||
Securities
available for sale at fair value (amortized cost of $567,804 and
$598,703,
respectively)
|
564,861
|
592,858
|
|||||||||||
Securities
held to maturity at cost (fair value of $1,290 and $1,871,
respectively)
|
1,245
|
1,822
|
|||||||||||
Federal
Home Loan Bank stock at cost
|
11,606
|
10,453
|
|||||||||||
Loans
held for sale
|
2,273
|
933
|
|||||||||||
Loans,
net of deferred loan fees of ($4,277) and ($2,940),
respectively
|
2,212,751
|
1,708,962
|
|||||||||||
Less:
allowance for loan and lease losses
|
25,380
|
20,182
|
|||||||||||
|
|||||||||||||
Loans,
net
|
2,187,371
|
1,688,780
|
|||||||||||
Interest
receivable
|
16,292
|
12,549
|
|||||||||||
Premises
and equipment, net
|
55,745
|
44,635
|
|||||||||||
Other
real estate owned
|
181
|
—
|
|||||||||||
Goodwill
|
93,737
|
29,723
|
|||||||||||
Other
assets
|
84,978
|
67,034
|
|||||||||||
Total
Assets
|
$
|
3,122,744
|
$
|
2,553,131
|
|||||||||
|
|||||||||||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||||||||
Deposits:
|
|||||||||||||
Noninterest-bearing
|
$
|
474,600
|
$
|
432,293
|
|||||||||
Interest-bearing
|
2,003,194
|
1,591,058
|
|||||||||||
|
|||||||||||||
Total
deposits
|
2,477,794
|
2,023,351
|
|||||||||||
Short-term
borrowings:
|
|||||||||||||
Federal
Home Loan Bank advances
|
252,275
|
205,800
|
|||||||||||
Securities
sold under agreements to repurchase
|
—
|
20,000
|
|||||||||||
Other
borrowings
|
208
|
198
|
|||||||||||
|
|||||||||||||
Total
short-term borrowings
|
252,483
|
225,998
|
|||||||||||
Long-term
subordinated debt
|
25,498
|
22,378
|
|||||||||||
Other
liabilities
|
37,000
|
29,057
|
|||||||||||
|
|||||||||||||
Total
liabilities
|
2,792,775
|
2,300,784
|
|||||||||||
Commitments
and contingent liabilities
|
—
|
—
|
|||||||||||
Shareholders’
equity:
|
|||||||||||||
Preferred
stock (no par value) Authorized, 2 million shares; none
outstanding
|
—
|
—
|
|||||||||||
September 30,
|
December
31,
|
||||||||||||
|
2007
|
|
|
2006
|
|||||||||
Common
stock (no par value)
|
|||||||||||||
Authorized
shares
|
63,034
|
63,034
|
|||||||||||
Issued
and outstanding
|
17,882
|
16,060
|
224,804
|
166,763
|
|||||||||
Retained
earnings
|
105,913
|
89,037
|
|||||||||||
Accumulated
other comprehensive loss
|
(748
|
)
|
(3,453
|
)
|
|||||||||
Total
shareholders’ equity
|
329,969
|
252,347
|
|||||||||||
Total
Liabilities and Shareholders’ Equity
|
$
|
3,122,744
|
$
|
2,553,131
|
Common
stock
|
Accumulated
Other
|
Total
|
|||||||||||||||||
Number of
Shares
|
Amount
|
Retained
Earnings
|
Deferred
Compensation
|
Comprehensive
Loss
|
Shareholders’
Equity
|
||||||||||||||
(in
thousands)
|
|||||||||||||||||||
Balance
at December 31, 2005
|
15,831
|
$
|
163,065
|
$
|
66,051
|
$
|
(92
|
)
|
$
|
(2,782
|
)
|
$
|
226,242
|
||||||
Comprehensive
income:
|
|||||||||||||||||||
Net
income
|
—
|
—
|
23,762
|
—
|
—
|
23,762
|
|||||||||||||
Net
unrealized loss from securities, net of reclassification adjustments
and
tax
|
—
|
—
|
—
|
—
|
(2,074
|
)
|
(2,074
|
)
|
|||||||||||
Net
unrealized gain from cash flow hedging instruments
|
—
|
—
|
—
|
—
|
1,133
|
1,133
|
|||||||||||||
Total
comprehensive income
|
22,821
|
||||||||||||||||||
Transition
adjustment related to adoption of SFAS 123(R)
|
—
|
(92
|
)
|
—
|
92
|
—
|
—
|
||||||||||||
Issuance
of stock under equity compensation plan
|
140
|
2,158
|
—
|
—
|
—
|
2,158
|
|||||||||||||
Issuance
of restricted stock under equity compensation plan
|
76
|
407
|
—
|
—
|
—
|
407
|
|||||||||||||
Tax
benefit associated with exercise of stock options
|
—
|
882
|
—
|
—
|
—
|
882
|
|||||||||||||
Cash
dividends paid on common stock
|
—
|
—
|
(6,709
|
)
|
—
|
—
|
(6,709
|
)
|
|||||||||||
Balance
at September 30, 2006
|
16,047
|
$
|
166,420
|
$
|
83,104
|
$
|
—
|
$
|
(3,723
|
)
|
$
|
245,801
|
Common
stock
|
Accumulated
Other
|
Total
|
|||||||||||||||||
Number of
Shares
|
Amount
|
Retained
Earnings
|
Deferred
Compensation
|
Comprehensive
Loss
|
Shareholders’
Equity
|
||||||||||||||
(in
thousands)
|
|||||||||||||||||||
Balance
at December 31, 2006
|
16,060
|
$
|
166,763
|
$
|
89,037
|
$
|
—
|
$
|
(3,453
|
)
|
$
|
252,347
|
|||||||
Comprehensive
income:
|
|||||||||||||||||||
Net
income
|
—
|
—
|
25,083
|
—
|
—
|
25,083
|
|||||||||||||
Other
comprehensive income, net of tax:
|
|||||||||||||||||||
Net
unrealized gain from securities, net of reclassification
adjustments
|
—
|
—
|
—
|
—
|
1,911
|
1,911
|
|||||||||||||
Net
unrealized gain from cash flow hedging instruments
|
—
|
—
|
—
|
—
|
794
|
794
|
|||||||||||||
|
|||||||||||||||||||
Total
comprehensive income
|
27,788
|
||||||||||||||||||
Purchase
and retirement of common stock
|
(65
|
)
|
(2,121
|
)
|
—
|
—
|
—
|
(2,121
|
)
|
||||||||||
Acquisitions:
|
|||||||||||||||||||
Shares
issued to the shareholders of Mountain Bank Holding
Company
|
993
|
30,327
|
30,327
|
||||||||||||||||
Converted
Mountain Bank Holding Company stock options
|
1,325
|
1,325
|
|||||||||||||||||
Shares
issued to the shareholders of Town Center Bancorp
|
705
|
23,869
|
23,869
|
||||||||||||||||
Converted
Town Center Bancorp stock options
|
1,598
|
1,598
|
|||||||||||||||||
Stock
award compensation expense
|
50
|
573
|
—
|
—
|
—
|
573
|
|||||||||||||
Issuance
of stock under stock option and other plans
|
139
|
2,098
|
—
|
—
|
—
|
2,098
|
|||||||||||||
Stock
option compensation expense
|
—
|
137
|
—
|
—
|
—
|
137
|
|||||||||||||
Tax
benefit associated with exercise of stock options
|
—
|
235
|
—
|
—
|
—
|
235
|
|||||||||||||
Cash
dividends paid on common stock
|
—
|
—
|
(8,207
|
)
|
—
|
—
|
(8,207
|
)
|
|||||||||||
Balance
at September 30, 2007
|
17,882
|
$
|
224,804
|
$
|
105,913
|
$
|
—
|
$
|
(748
|
)
|
$
|
329,969
|
|
Nine
Months Ended
September 30,
|
||||||
(in
thousands)
|
2007
|
2006
|
|||||
Operating
Activities
|
|
|
|||||
Net
income
|
$
|
25,083
|
$
|
23,762
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Provision
for loan and lease losses
|
2,198
|
1,115
|
|||||
Deferred
income tax benefit
|
(1,194
|
)
|
(796
|
)
|
|||
Excess
tax benefit from stock-based compensation
|
(80
|
)
|
(102
|
)
|
|||
Stock-based
compensation expense
|
710
|
576
|
|||||
Gain
on sale of investment securities
|
—
|
(10
|
)
|
||||
Gain
on sale of other real estate owned and other personal property
owned
|
—
|
(11
|
)
|
||||
Depreciation,
amortization and accretion
|
4,607
|
5,787
|
|||||
Net
realized gains on sale of assets
|
(8
|
)
|
(42
|
)
|
|||
Net
change in:
|
|||||||
Loans
held for sale
|
(875
|
)
|
690
|
||||
Interest
receivable
|
(2,074
|
)
|
(2,013
|
)
|
|||
Interest
payable
|
4,606
|
481
|
|||||
Other
assets
|
3,109
|
(3,784
|
)
|
||||
Other
liabilities
|
(6,994
|
)
|
724
|
||||
|
|||||||
Net
cash provided by operating activities
|
29,088
|
26,377
|
|||||
Investing
Activities
|
|||||||
Purchases
of securities available for sale
|
(2,888
|
)
|
(137,549
|
)
|
|||
Proceeds
from sales of securities available for sale
|
28,467
|
3,865
|
|||||
Proceeds
from principal repayments and maturities of securities available
for
sale
|
39,033
|
101,932
|
|||||
Proceeds
from maturities of securities held to maturity
|
578
|
328
|
|||||
Loans
originated and acquired, net of principal collected
|
(218,350
|
)
|
(91,902
|
)
|
|||
Purchases
of premises and equipment
|
(4,003
|
)
|
(3,797
|
)
|
|||
Proceeds
from disposal of premises and equipment
|
212
|
206
|
|||||
Acquisition
of Mt. Rainier and Town Center, net of cash acquired
|
(32,429
|
)
|
—
|
||||
Proceeds
from sales of Federal Reserve Bank stock
|
310
|
—
|
|||||
Proceeds
from sales of other real estate and other personal property
owned
|
—
|
29
|
|||||
|
|||||||
Net
cash used in investing activities
|
(189,070
|
)
|
(126,888
|
)
|
|||
Financing
Activities
|
|||||||
Net
increase in deposits
|
149,758
|
14,576
|
|||||
Proceeds
from Federal Home Loan Bank advances
|
2,353,626
|
2,024,720
|
|||||
Repayment
of Federal Home Loan Bank advances
|
(2,315,151
|
)
|
(1,927,220
|
)
|
|||
Net
decrease in repurchase agreement borrowings
|
(20,000
|
)
|
—
|
||||
Net
increase (decrease) in other borrowings
|
10
|
(1,873
|
)
|
||||
Cash
dividends paid on common stock
|
(8,207
|
)
|
(6,709
|
)
|
|||
Proceeds
from issuance of common stock, net
|
2,098
|
1,989
|
|||||
Repurchase
of common stock
|
(2,121
|
)
|
—
|
||||
Excess
tax benefit from stock-based compensation
|
80
|
102
|
|||||
Net
cash provided by financing activities
|
160,093
|
105,585
|
|||||
Net
increase in cash and cash equivalents
|
111
|
5,074
|
|||||
Cash
and cash equivalents at beginning of period
|
104,344
|
100,406
|
|||||
Cash
and cash equivalents at end of period
|
$
|
104,455
|
$
|
105,480
|
|||
|
|||||||
Supplemental
disclosures of cash flow information:
|
|||||||
Cash
paid for interest
|
$
|
49,915
|
$
|
38,470
|
|||
Cash
paid for income taxes
|
10,490
|
10,505
|
|||||
Share-based
consideration issued for acquisitions
|
57,119
|
—
|
(in
thousands)
|
July
23,
2007
|
|||
Cash
|
$
|
12,451
|
||
Securities
available for sale
|
21,412
|
|||
Federal
funds sold
|
3,716
|
|||
Loans,
net of allowance for loan losses of $1,978
|
175,533
|
|||
Premises
and equipment, net
|
9,065
|
|||
Other
assets
|
7,510
|
|||
Core
deposit intangible
|
4,244
|
|||
Goodwill
|
31,490
|
|||
Total
assets acquired
|
265,421
|
|||
Deposits
|
(202,644
|
)
|
||
Other
liabilities
|
(4,311
|
)
|
||
Total
liabilities assumed
|
(206,955
|
)
|
||
Net
assets acquired
|
$
|
58,466
|
(in
thousands)
|
July
23,
2007
|
|||
Cash
|
$
|
2,104
|
||
Securities
available for sale
|
13,184
|
|||
Federal
funds sold
|
2,000
|
|||
Loans,
net of allowance for loan losses of $1,213
|
107,976
|
|||
Premises
and equipment, net
|
1,596
|
|||
Bank-owned
life insurance
|
2,312
|
|||
Other
assets
|
2,750
|
|||
Core
deposit intangible
|
581
|
|||
Goodwill
|
32,524
|
|||
Total
assets acquired
|
165,027
|
|||
Deposits
|
(102,041
|
)
|
||
Advances
from Federal Home Loan Bank
|
(8,000
|
)
|
||
Other
borrowings
|
(4,087
|
)
|
||
Other
liabilities
|
(5,261
|
)
|
||
Total
liabilities assumed
|
(119,389
|
)
|
||
Net
assets acquired
|
$
|
45,638
|
(in
thousands, except per common share
information)
|
For
The Three
Months Ended
9/30/2007
|
For
The Three
Months Ended
9/30/2006
|
For
The Nine
Months Ended
9/30/2007
|
For
The Nine
Months Ended
9/30/2006
|
|||||||||
Net
interest income
|
$
|
29,875
|
$
|
28,630
|
$
|
88,723
|
$
|
85,039
|
|||||
Provision
for loan and lease losses
|
$
|
1,231
|
$
|
784
|
$
|
2,376
|
$
|
1,587
|
|||||
Noninterest
income
|
$
|
7,726
|
$
|
6,865
|
$
|
21,876
|
$
|
20,205
|
|||||
Noninterest
expense
|
$
|
23,488
|
(A)
|
$
|
21,148
|
(B)
|
$
|
70,590
|
(C)
|
$
|
66,587
|
(D)
|
|
Net
income
|
$
|
9,303
|
$
|
9,510
|
$
|
27,225
|
$
|
26,655
|
|||||
Earnings
per common share - basic
|
$
|
0.52
|
$
|
0.54
|
$
|
1.54
|
$
|
1.51
|
|||||
Earnings
per common share - diluted
|
$
|
0.52
|
$
|
0.53
|
$
|
1.52
|
$
|
1.49
|
(A) |
Includes
reversal of merger related expenses of $2.6 million, offset by
additional
core deposit amortization of $175,000 assuming acquired January
1,
2006.
|
(B)
|
Includes
additional core deposit amortization of $201,000 assuming acquired
January
1, 2006.
|
(C)
|
Includes
reversal of merger related expenses of $3.1 million, offset by
additional
core deposit amortization of $527,000 assuming acquired January
1,
2006.
|
(D)
|
Includes
additional core deposit amortization of $604,000 assuming acquired
January
1, 2006.
|
|
For
The Three
Months Ended
9/30/2007
|
For
The Three
Months Ended
9/30/2006
|
For
The Nine
Months Ended
9/30/2007
|
For
The Nine
Months Ended
9/30/2006
|
|||||||||
Net
income
|
$
|
9,256
|
$
|
8,335
|
$
|
25,083
|
$
|
23,762
|
|||||
Weighted
average common shares outstanding (for basic calculation)
|
17,339
|
15,981
|
16,472
|
15,931
|
|||||||||
Dilutive
effect of outstanding common stock options and nonvested stock
awards
|
194
|
162
|
164
|
204
|
|||||||||
Weighted
average common stock and common equivalent shares outstanding (for
diluted
calculation)
|
17,533
|
16,143
|
16,636
|
16,135
|
|||||||||
Earnings
per common share - basic
|
$
|
0.53
|
$
|
0.52
|
$
|
1.52
|
$
|
1.49
|
|||||
Earnings
per common share - diluted
|
$
|
0.53
|
$
|
0.52
|
$
|
1.51
|
$
|
1.47
|
|
Three
Months Ended September 30, 2007
|
|||||||||||||||
|
|
Columbia
Bank
|
|
|||||||||||||
(in
thousands)
|
Bank
of
Astoria
|
Commercial
Banking
|
Retail
Banking
|
Other
|
Total
|
|||||||||||
Net
interest income after provision for loan and lease loss
|
$
|
2,280
|
$
|
11,893
|
$
|
15,184
|
$
|
(1,728
|
)
|
$
|
27,629
|
|||||
Other
income
|
391
|
1,067
|
1,962
|
4,211
|
7,631
|
|||||||||||
Other
expense
|
(1,607
|
)
|
(3,341
|
)
|
(5,755
|
)
|
(11,722
|
)
|
(22,425
|
)
|
||||||
Net
income before taxes
|
1,064
|
9,619
|
11,391
|
(9,239
|
)
|
12,835
|
||||||||||
Income
taxes
|
|
|
|
|
(3,579
|
)
|
||||||||||
Net
income
|
|
|
|
|
$
|
9,256
|
||||||||||
Total
assets
|
$
|
227,784
|
$
|
1,399,262
|
$
|
776,163
|
$
|
719,535
|
$
|
3,122,744
|
|
Three
Months Ended September 30, 2006
|
|||||||||||||||
|
|
Columbia
Bank
|
|
|||||||||||||
(in
thousands)
|
Bank
of
Astoria
|
Commercial
Banking
|
Retail
Banking
|
Other
|
Total
|
|||||||||||
Net
interest income after provision for loan and lease loss
|
$
|
2,213
|
$
|
5,567
|
$
|
18,093
|
$
|
(2,118
|
)
|
$
|
23,755
|
|||||
Other
income
|
351
|
438
|
1,553
|
3,766
|
6,108
|
|||||||||||
Other
expense
|
(1,505
|
)
|
(2,865
|
)
|
(4,471
|
)
|
(9,257
|
)
|
(18,098
|
)
|
||||||
Net
income before taxes
|
1,059
|
3,140
|
15,175
|
(7,609
|
)
|
11,765
|
||||||||||
Income
taxes
|
(3,430
|
)
|
||||||||||||||
Net
income
|
$
|
8,335
|
||||||||||||||
Total
assets
|
$
|
222,168
|
$
|
1,151,340
|
$
|
449,355
|
$
|
684,587
|
$
|
2,507,450
|
|
Nine
Months Ended September 30, 2007
|
|||||||||||||||
|
|
Columbia
Bank
|
|
|||||||||||||
(in
thousands)
|
Bank
of
Astoria
|
Commercial
Banking
|
Retail
Banking
|
Other
|
Total
|
|||||||||||
Net
interest income after provision for loan and lease loss
|
$
|
6,550
|
$
|
21,055
|
$
|
52,987
|
$
|
(3,532
|
)
|
$
|
77,060
|
|||||
Other
income
|
1,161
|
2,427
|
5,088
|
11,873
|
20,549
|
|||||||||||
Other
expense
|
(4,629
|
)
|
(8,719
|
)
|
(15,429
|
)
|
(34,316
|
)
|
(63,093
|
)
|
||||||
Net
income before taxes
|
3,082
|
14,763
|
42,646
|
(25,975
|
)
|
34,516
|
||||||||||
Income
taxes
|
|
|
|
|
(9,433
|
)
|
||||||||||
Net
income
|
|
|
|
|
$
|
25,083
|
||||||||||
Total
assets
|
$
|
227,784
|
$
|
1,399,262
|
$
|
776,163
|
$
|
719,535
|
$
|
3,122,744
|
|
Nine
Months Ended September 30, 2006
|
|||||||||||||||
|
|
Columbia
Bank
|
|
|||||||||||||
(in
thousands)
|
Bank
of
Astoria
|
Commercial
Banking
|
Retail
Banking
|
Other
|
Total
|
|||||||||||
Net
interest income after provision for loan and lease loss
|
$
|
6,355
|
$
|
16,971
|
$
|
53,084
|
$
|
(4,512
|
)
|
$
|
71,898
|
|||||
Other
income
|
1,127
|
1,371
|
4,645
|
11,205
|
18,348
|
|||||||||||
Other
expense
|
(4,394
|
)
|
(7,721
|
)
|
(13,426
|
)
|
(32,033
|
)
|
(57,574
|
)
|
||||||
Net
income before taxes
|
3,088
|
10,621
|
44,303
|
(25,340
|
)
|
32,672
|
||||||||||
Income
taxes
|
|
|
|
|
(8,910
|
)
|
||||||||||
Net
income
|
|
|
|
|
$
|
23,762
|
||||||||||
Total
assets
|
$
|
222,168
|
$
|
1,151,340
|
$
|
449,355
|
$
|
684,587
|
$
|
2,507,450
|
|
Three
Months Ended
September 30,
|
||||||
(in
thousands)
|
2007
|
2006
|
|||||
Net
income as reported
|
$
|
9,256
|
$
|
8,335
|
|||
Unrealized
gain from securities:
|
|||||||
Net
unrealized gain from available for sale securities arising during
the
period, net of tax of $3,259 and $3,063
|
5,974
|
5,542
|
|||||
Unrealized
gain from cash flow hedging instruments:
|
|||||||
Net
unrealized gain arising during the period, net of tax of $863 and
$0
|
1,583
|
1,133
|
|||||
Reclassification
adjustment of losses included in income, net of tax of $13 and
$0
|
24
|
—
|
|||||
Net
unrealized gain from cash flow hedging instruments
|
1,607
|
1,133
|
|||||
Total
comprehensive income
|
$
|
16,837
|
$
|
15,010
|
|
Nine
Months Ended
September 30,
|
||||||
(in
thousands)
|
2007
|
2006
|
|||||
Net
income as reported
|
$
|
25,083
|
$
|
23,762
|
|||
Unrealized
gain (loss) from securities:
|
|||||||
Net
unrealized gain (loss) from available for sale securities arising
during
the period, net of tax of $992 and $(1,128)
|
1,911
|
(2,068
|
)
|
||||
Reclassification
of net gain from sale of available for sale securities included in
net
income, net of tax of $0 and $(4)
|
—
|
(6
|
)
|
||||
Net
unrealized gain (loss) from securities, net of reclassification
adjustments
|
1,911
|
(2,074
|
)
|
||||
Unrealized
gain from cash flow hedging instruments:
|
|||||||
Net
unrealized gain arising during the period, net of tax of $413 and
$0
|
756
|
1,133
|
|||||
Reclassification
adjustment of losses included in income, net of tax of $20 and
$0
|
38
|
—
|
|||||
Net
unrealized gain from cash flow hedging instruments
|
794
|
1,133
|
|||||
Total
comprehensive income
|
$
|
27,788
|
$
|
22,821
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||
(in
thousands)
|
2007
|
2006
|
2007
|
2006
|
|||||||||
Beginning
balance
|
$
|
21,339
|
$
|
20,990
|
$
|
20,182
|
$
|
20,829
|
|||||
Allowance
added through business combinations
|
3,192
|
—
|
3,192
|
—
|
|||||||||
Provision
charged to expense
|
1,231
|
650
|
2,198
|
1,115
|
|||||||||
Loans
charged-off
|
(528
|
)
|
(843
|
)
|
(854
|
)
|
(1,423
|
)
|
|||||
Recoveries
|
146
|
129
|
662
|
405
|
|||||||||
Ending
balance
|
$
|
25,380
|
$
|
20,926
|
$
|
25,380
|
$
|
20,926
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||
(in
thousands)
|
2007
|
2006
|
2007
|
2006
|
|||||||||
Beginning
balance
|
$
|
339
|
$
|
339
|
$
|
339
|
$
|
339
|
|||||
Net
changes in the allowance for unfunded loan commitments and letters
of
credit
|
10
|
—
|
10
|
—
|
|||||||||
Ending
balance
|
$
|
349
|
$
|
339
|
$
|
349
|
$
|
339
|
Item 2. |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
|
|
Three
months ending
September
30,
|
Three
months ending
September 30,
|
|||||||||||||||||
|
2007
|
2006
|
|||||||||||||||||
(in
thousands)
|
Average
Balances
(1)
|
Interest
Earned
/
Paid
|
Average
Rate
|
Average
Balances
(1)
|
Interest
Earned
/
Paid
|
Average
Rate
|
|||||||||||||
ASSETS
|
|
|
|
|
|
|
|||||||||||||
Loans,
net
|
$
|
2,102,281
|
$
|
42,353
|
7.99
|
%
|
$
|
1,647,471
|
$
|
32,010
|
7.71
|
%
|
|||||||
Securities
(2)
|
572,124
|
7,727
|
5.36
|
%
|
627,821
|
8,031
|
5.08
|
%
|
|||||||||||
Interest-earning
deposits with banks and federal funds sold
|
28,082
|
395
|
5.58
|
%
|
15,059
|
193
|
5.10
|
%
|
|||||||||||
Total
interest-earning assets
|
2,702,487
|
$
|
50,475
|
7.41
|
%
|
2,290,351
|
$
|
40,234
|
6.97
|
%
|
|||||||||
Other
earning assets
|
44,595
|
37,927
|
|||||||||||||||||
Noninterest-earning
assets
|
222,115
|
176,093
|
|||||||||||||||||
Total
assets
|
$
|
2,969,197
|
$
|
2,504,371
|
|||||||||||||||
|
|||||||||||||||||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||||||||||||||
Certificates
of deposit
|
$
|
772,358
|
$
|
8,976
|
4.61
|
%
|
$
|
541,462
|
$
|
5,475
|
4.01
|
%
|
|||||||
Savings
accounts
|
116,640
|
131
|
0.45
|
%
|
114,769
|
105
|
0.36
|
%
|
|||||||||||
Interest-bearing
demand and money market accounts
|
1,038,571
|
7,734
|
2.95
|
%
|
878,638
|
5,288
|
2.39
|
%
|
|||||||||||
Total
interest-bearing deposits
|
1,927,569
|
16,841
|
3.47
|
%
|
1,534,869
|
10,868
|
2.81
|
%
|
|||||||||||
Federal
Home Loan Bank advances
|
178,303
|
2,454
|
5.46
|
%
|
243,513
|
3,370
|
5.49
|
%
|
|||||||||||
Securities
sold under agreements to repurchase
|
44,457
|
637
|
5.68
|
%
|
—
|
—
|
—
|
||||||||||||
Other
borrowings and interest-bearing liabilities
|
370
|
2
|
2.14
|
%
|
206
|
4
|
7.69
|
%
|
|||||||||||
Long-term
subordinated debt
|
24,771
|
584
|
9.35
|
%
|
22,351
|
519
|
9.21
|
%
|
|||||||||||
Total
interest-bearing liabilities
|
2,175,470
|
20,518
|
3.74
|
%
|
1,800,939
|
14,761
|
3.25
|
%
|
|||||||||||
Noninterest-bearing
deposits
|
455,312
|
440,234
|
|||||||||||||||||
Other
noninterest-bearing liabilities
|
36,916
|
24,926
|
|||||||||||||||||
Shareholders’
equity
|
301,499
|
238,272
|
|||||||||||||||||
Total
liabilities & shareholders’ equity
|
$
|
2,969,197
|
$
|
2,504,371
|
|||||||||||||||
Net
interest income (2)
|
$
|
29,957
|
$
|
25,473
|
|||||||||||||||
Net
interest margin
|
4.40
|
%
|
4.41
|
%
|
(1) |
Nonaccrual
loans have been included in the tables as loans carrying a zero yield.
Amortized net deferred loan fees were included in the interest income
calculations. The amortization of net deferred loan fees was $1.2
million
and $463,000 for the three months ended September 30, 2007 and 2006,
respectively.
|
(2) |
Tax-exempt
income is calculated on a tax equivalent basis, based on a marginal
tax
rate of 35%.
|
|
Nine
months ending September 30,
|
Nine
months ending September 30,
|
|||||||||||||||||
|
2007
|
2006
|
|||||||||||||||||
(in
thousands)
|
Average
Balances
(1)
|
Interest
Earned/
Paid
|
Average
Rate
|
Average
Balances
(1)
|
Interest
Earned/
Paid
|
Average
Rate
|
|||||||||||||
ASSETS
|
|
|
|
|
|
|
|||||||||||||
Loans,
net
|
$
|
1,905,945
|
$
|
112,607
|
7.90
|
%
|
$
|
1,609,739
|
$
|
90,982
|
7.56
|
%
|
|||||||
Securities
(2)
|
584,057
|
23,239
|
5.32
|
%
|
630,895
|
23,138
|
4.90
|
%
|
|||||||||||
Interest-earning
deposits with banks and federal funds sold
|
29,621
|
1,180
|
4.96
|
%
|
9,558
|
354
|
4.96
|
%
|
|||||||||||
Total
interest-earning assets
|
2,519,623
|
$
|
137,026
|
7.27
|
%
|
2,250,192
|
$
|
114,474
|
6.80
|
%
|
|||||||||
Other
earning assets
|
40,877
|
37,516
|
|||||||||||||||||
|