Columbia Banking System(COLB) - 2025 Q2 - Quarterly Report

Glossary The glossary defines key terms and acronyms used throughout the financial report, including ACL, CECL, CRE, and merger-related details - The glossary provides definitions for key terms and acronyms used throughout the financial report, such as ACL (Allowance for Credit Losses), CECL (Current Expected Credit Losses), CRE (Commercial Real Estate), and details related to the Columbia and Umpqua mergers, as well as the pending Pacific Premier merger[8] Part I. Financial Information This section presents the Company's unaudited condensed consolidated financial statements and management's discussion and analysis Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of income, comprehensive income, changes in shareholders' equity, and cash flows, along with detailed notes explaining significant accounting policies and specific financial line items Condensed Consolidated Balance Sheets This section provides a snapshot of the Company's financial position, detailing assets, liabilities, and equity at specific dates Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Total assets | $51,901,442 | $51,576,397 | | Total cash and cash equivalents | $1,942,170 | $1,878,255 | | Investment securities (fair value) | $8,748,143 | $8,354,849 | | Net loans and leases | $37,216,106 | $37,256,272 | | Total deposits | $41,742,657 | $41,720,732 | | Total liabilities | $46,559,560 | $46,458,173 | | Total shareholders' equity | $5,341,882 | $5,118,224 | - Total assets increased by $325.0 million, driven by higher cash and cash equivalents and investment securities, partially offset by a slight decrease in net loans and leases. Total shareholders' equity increased by $223.7 million, while total deposits saw a modest increase of $21.9 million[9] Condensed Consolidated Statements of Income This section presents the Company's financial performance over periods, detailing revenues, expenses, and net income Condensed Consolidated Statements of Income (in thousands, except per share) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total interest income | $670,689 | $695,536 | $1,317,932 | $1,379,761 | | Total interest expense | $224,243 | $268,087 | $446,491 | $528,950 | | Net interest income | $446,446 | $427,449 | $871,441 | $850,811 | | Provision for credit losses | $29,449 | $31,820 | $56,852 | $48,956 | | Total non-interest income | $64,462 | $44,703 | $130,839 | $95,060 | | Total non-interest expense | $277,995 | $279,244 | $618,117 | $566,760 | | Net income | $152,423 | $120,144 | $239,032 | $244,224 | | Basic EPS | $0.73 | $0.58 | $1.14 | $1.17 | | Diluted EPS | $0.73 | $0.57 | $1.14 | $1.17 | - Net income for the three months ended June 30, 2025, increased by $32.3 million year-over-year, primarily due to higher net interest income and non-interest income, while total non-interest expense remained relatively stable. For the six months ended June 30, 2025, net income slightly decreased by $5.2 million compared to the prior year, mainly due to a significant increase in non-interest expense, partially offset by growth in net interest income and non-interest income[10] Condensed Consolidated Statements of Comprehensive Income This section details changes in equity from non-owner sources, including net income and other comprehensive income components Condensed Consolidated Statements of Comprehensive Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $152,423 | $120,144 | $239,032 | $244,224 | | Net change in unrealized gains (losses) for available for sale securities | $26,064 | $(29,282) | $122,489 | $(120,060) | | Net change in unrealized gains (losses) for junior subordinated debentures, at fair value | $(1,390) | $(284) | $5,678 | $4,491 | | Other comprehensive income (loss), net of tax | $24,688 | $(29,551) | $128,196 | $(115,540) | | Comprehensive income | $177,111 | $90,593 | $367,228 | $128,684 | - Comprehensive income significantly increased for both the three and six months ended June 30, 2025, compared to the prior year periods. This was primarily driven by a positive net change in unrealized gains for available-for-sale securities, which shifted from a substantial loss in 2024 to a significant gain in 2025[11] Condensed Consolidated Statements of Changes in Shareholders' Equity This section outlines the movements in shareholders' equity, including net income, dividends, and other comprehensive income Changes in Shareholders' Equity (in thousands) | Metric | Balance at Dec 31, 2024 | Net Income (6M 2025) | Other Comprehensive Income (6M 2025) | Stock-based Compensation (6M 2025) | Stock Repurchased (6M 2025) | Cash Dividends (6M 2025) | Balance at Jun 30, 2025 | | :--------------------------------- | :---------------------- | :------------------- | :----------------------------------- | :--------------------------------- | :--------------------------- | :------------------------- | :---------------------- | | Common Stock Amount | $5,817,458 | - | - | $16,247 | $(8,601) | - | $5,826,488 | | Accumulated Deficit | $(237,254) | $239,032 | - | - | - | $(152,599) | $(150,822) | | Accumulated Other Comprehensive Loss | $(461,980) | - | $128,196 | - | - | - | $(333,784) | | Total Shareholders' Equity | $5,118,224 | $239,032 | $128,196 | $16,247 | $(8,601) | $(152,599) | $5,341,882 | - Total shareholders' equity increased by $223.7 million from December 31, 2024, to June 30, 2025. This increase was primarily driven by net income of $239.0 million and other comprehensive income of $128.2 million, partially offset by cash dividends paid of $152.6 million and stock repurchases of $8.6 million[13] Condensed Consolidated Statements of Cash Flows This section reports cash inflows and outflows from operating, investing, and financing activities over specific periods Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $228,807 | $335,798 | | Net cash used in investing activities | $(233,940) | $(85,812) | | Net cash provided by (used in) financing activities | $69,048 | $(343,689) | | Net increase (decrease) in cash and cash equivalents | $63,915 | $(93,703) | | Cash and cash equivalents, end of period | $1,942,170 | $2,068,831 | - Net cash provided by operating activities decreased by $107.0 million for the six months ended June 30, 2025, compared to the prior year. Net cash used in investing activities significantly increased by $148.1 million, primarily due to higher purchases of available-for-sale investment securities. Net cash from financing activities shifted from a net outflow of $343.7 million in 2024 to a net inflow of $69.0 million in 2025, driven by increased borrowings and a net increase in deposit liabilities[14] Notes to Condensed Consolidated Financial Statements This section provides detailed disclosures and explanations for the condensed consolidated financial statements, covering significant accounting policies, specific asset and liability categories, credit loss methodologies, fair value measurements, and other material financial and operational information Note 1 – Summary of Significant Accounting Policies This note outlines the Company's key accounting principles, recent accounting pronouncements, and their impact on financial reporting - Columbia Banking System, Inc. (the Company) renamed its wholly-owned banking subsidiary to "Columbia Bank" (dba: Umpqua Bank) effective July 1, 2025, with branding to begin September 1, 2025, to align with the holding company's name and existing brands[15] - The Company adopted ASU No. 2023-09, 'Income Taxes (Topic 740): Improvements to Income Tax Disclosures,' on January 1, 2025, for annual reporting, aiming for greater transparency in income tax disclosures, particularly regarding rate reconciliation and taxes paid[17] - The Company is currently evaluating the impact of ASU No. 2024-03, 'Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures,' effective for fiscal years beginning after December 15, 2026, which requires enhanced disaggregation of income statement expenses in financial statement notes[18] Note 2 – Debt Securities This note details the composition, fair value, and unrealized gains/losses of the Company's debt securities portfolio Debt Securities (in thousands) | Category | June 30, 2025 Amortized Cost | June 30, 2025 Fair Value | Dec 31, 2024 Amortized Cost | Dec 31, 2024 Fair Value | | :------------------------------------------------- | :--------------------------- | :----------------------- | :--------------------------- | :----------------------- | | Available for sale: | | | | | | U.S. Treasury and agencies | $1,391,854 | $1,347,060 | $1,495,542 | $1,422,787 | | Obligations of states and political subdivisions | $1,041,810 | $1,014,883 | $1,055,535 | $1,026,053 | | Mortgage-backed securities and collateralized mortgage obligations | $6,637,696 | $6,291,229 | $6,307,252 | $5,825,775 | | Total available for sale securities | $9,071,360 | $8,653,172 | $8,858,329 | $8,274,615 | | Held to maturity: | | | | | | Mortgage-backed securities and collateralized mortgage obligations | $2,013 | $2,585 | $2,101 | $2,703 | | Total held to maturity securities | $2,013 | $2,585 | $2,101 | $2,703 | - As of June 30, 2025, the available-for-sale investment portfolio had gross unrealized losses of $459.8 million, primarily from mortgage-backed securities ($379.3 million). These losses are attributed to changes in market interest rates or widening market spreads, not credit quality, and no Allowance for Credit Losses (ACL) was deemed necessary[19][20][183] - Debt securities with a fair value of $6.2 billion were pledged as of June 30, 2025, an increase from $5.2 billion at December 31, 2024, to secure borrowing capacity, public deposits, and repurchase agreements[23] Note 3 – Loans and Leases This note provides a breakdown of the Company's loan and lease portfolio by type, including pledged loans and purchased credit deterioration Major Types of Loans and Leases (in thousands) | Loan Type | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Commercial real estate | $19,600,479 | $19,547,672 | | Commercial | $9,944,830 | $9,968,096 | | Residential | $7,912,599 | $7,965,005 | | Consumer & other | $179,104 | $180,128 | | Total loans and leases | $37,637,013 | $37,680,901 | - Total loans and leases decreased slightly by $43.9 million from December 31, 2024, to June 30, 2025, primarily due to decreases in residential and commercial loan balances, partially offset by an increase in Commercial Real Estate (CRE) balances[24][185] - As of June 30, 2025, loans totaling $22.4 billion were pledged to secure borrowings and available lines of credit, an increase from $22.0 billion at December 31, 2024[24] - The carrying balance of Purchased with Credit Deterioration (PCD) loans decreased to $136.2 million as of June 30, 2025, from $178.5 million at December 31, 2024[25] Note 4 – Allowance for Credit Losses This note details the Allowance for Credit Losses (ACL) methodology, balances, and activity by portfolio segment, along with an analysis of asset quality, non-performing loans, collateral-dependent loans, and modifications made to borrowers experiencing financial difficulty, reflecting management's estimate of lifetime credit losses Allowance for Credit Losses Overview This section provides an overview of the ACL balance, methodology, and economic assumptions used for estimation - The total ACL was $439.0 million as of June 30, 2025, a decrease of $1.8 million from $440.8 million at December 31, 2024, reflecting credit migration trends, changes in economic assumptions, and recalibration of CECL models[28][140][204] - The Bank used Moody's Analytics' May 2025 consensus economic forecast for ACL estimation, which projects lower U.S. real GDP growth (1.5% in 2026) and higher unemployment rates (4.5% in 2026) compared to the December 2024 forecast[29] - Management applied offsetting qualitative adjustments, primarily to commercial real estate and commercial loan portfolios, to address heightened economic uncertainty and sector-specific risks, maintaining overall ACL stability despite a less favorable economic outlook[30] ACL Activity by Portfolio Segment This section details the provision for credit losses and net charge-offs across different loan portfolio segments ACL Activity for Six Months Ended June 30, 2025 (in thousands) | Portfolio Segment | Balance, Beginning of Period | Provision for Credit Losses | Net Charge-offs | Balance, End of Period | | :-------------------- | :--------------------------- | :-------------------------- | :---------------- | :--------------------- | | Commercial Real Estate | $154,413 | $5,516 | $(106) | $159,823 | | Commercial | $218,668 | $57,866 | $(56,672) | $219,862 | | Residential | $44,700 | $(9,807) | $(303) | $34,590 | | Consumer & Other | $6,848 | $1,369 | $(1,585) | $6,632 | | Total ACLLL | $424,629 | $54,944 | $(58,666) | $420,907 | | Reserve for Unfunded Commitments | $16,168 | $1,908 | - | $18,076 | | Total ACL | $440,797 | $56,852 | $(58,666) | $438,983 | - For the six months ended June 30, 2025, the provision for credit losses was $56.9 million, with net charge-offs totaling $58.7 million. Commercial loans experienced the highest provision ($57.9 million) and net charge-offs ($56.7 million), while Residential loans saw a recapture of $9.8 million[32][165][166] Asset Quality and Non-Performing Loans and Leases This section analyzes trends in past due, non-accrual, and collateral-dependent loans, reflecting overall asset quality Loans and Leases Past Due and Non-Accrual (in thousands) | Category | June 30, 2025 Total Past Due | June 30, 2025 Non-Accrual | Dec 31, 2024 Total Past Due | Dec 31, 2024 Non-Accrual | | :-------------------------- | :--------------------------- | :------------------------ | :--------------------------- | :------------------------ | | Commercial real estate | $70,298 | $30,739 | $65,536 | $39,332 | | Commercial | $45,332 | $66,809 | $50,591 | $57,146 | | Residential | $106,553 | $0 | $96,480 | $0 | | Consumer & other | $1,520 | $0 | $1,376 | $0 | | Total, net of deferred fees and costs | $223,705 | $97,548 | $177,981 | $96,478 | - Non-performing loans and leases increased to $177.4 million (0.47% of total loans) as of June 30, 2025, from $166.9 million (0.44%) at December 31, 2024, reflecting a move toward a normalized credit environment. Non-accrual loans and leases were $97.5 million, with $67.8 million covered by government guarantees[35][140][191][203] Collateral-Dependent Loans and Leases (in thousands) | Collateral Type | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Residential Real Estate | $70,570 | $84,104 | | Commercial Real Estate | $27,904 | $37,671 | | General Business Assets | $53,297 | $40,442 | | Total | $151,771 | $162,217 | Loan and Lease Modifications Made to Borrowers Experiencing Financial Difficulty This section details modifications made to loans for financially distressed borrowers, including types and subsequent defaults Total Modified Loans and Leases Experiencing Financial Difficulty (in thousands) | Period | Total Modified Loans | % of Total Class of Financing Receivable | | :----------------------------- | :------------------- | :--------------------------------------- | | Three Months Ended June 30, 2025 | $67,865 | 0.18 % | | Six Months Ended June 30, 2025 | $113,125 | 0.30 % | | Three Months Ended June 30, 2024 | $26,508 | 0.07 % | | Six Months Ended June 30, 2024 | $60,817 | 0.16 % | - For the three months ended June 30, 2025, all modified loans and leases were current, with no subsequent defaults. However, for the six months ended June 30, 2025, $4.1 million in modified loans subsequently defaulted, compared to $4.4 million in the prior year period[46] - The most common modification types for the six months ended June 30, 2025, were Term Extension ($34.3 million) and Combo - Interest Rate Reduction and Term Extension ($38.9 million)[42] Credit Quality Indicators This section describes the Bank's approach to assessing credit risk for loans using dual risk ratings and past due status - The Bank uses a dual risk rating approach for non-homogeneous loans, measuring Probability of Default (PD) and Loss Given Default (LGD) to assess credit risk. Homogeneous loans are rated based on past due status and may enter a higher risk rating scale if modified[48] Loans and Leases by Credit Classification and Vintage Year This section categorizes the loan portfolio by credit quality, highlighting concentrations in higher-risk classifications Total Loans and Leases by Credit Quality Indicator (June 30, 2025, in thousands) | Credit Quality Indicator | Commercial Real Estate | Commercial | Residential | Consumer & Other | Total | | :----------------------- | :--------------------- | :----------- | :---------- | :--------------- | :------------ | | Pass/Watch | $19,600,480 | $9,944,830 | $7,912,599 | $179,104 | $37,637,013 | | Special mention | $353,712 | $77,352 | $22,541 | $839 | $454,444 | | Substandard | $71,636 | $56,867 | $2,082,766 | $337 | $2,211,606 | | Doubtful | $3,746 | $11,385 | $3,462 | - | $18,593 | | Loss | $640 | $3,919 | $3,462 | - | $8,021 | - As of June 30, 2025, the majority of the loan portfolio was classified as Pass/Watch. Commercial Real Estate and Commercial portfolios showed the highest amounts in Special Mention and Substandard categories, indicating areas of elevated credit risk[49][50][51] Note 5 – Goodwill and Other Intangible Assets This note details the carrying amounts and amortization of goodwill and other intangible assets, primarily from mergers - Goodwill remained stable at $1.0 billion as of June 30, 2025, and December 31, 2024, representing the excess of acquisition price over fair value of net assets from the Umpqua Merger[55] Other Intangible Assets, Net (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Gross Carrying Amount | $710,230 | $710,230 | | Accumulated Amortization | $(279,787) | $(225,982) | | Net Carrying Amount | $430,443 | $484,248 | - Other intangible assets, net, decreased by $53.8 million to $430.4 million as of June 30, 2025, from $484.2 million at December 31, 2024, due to amortization. Amortization expense was $25.8 million for the three months and $53.8 million for the six months ended June 30, 2025[57] Note 6 – Borrowings This note outlines the Company's borrowing activities, including FHLB advances and their terms - FHLB advances increased to $3.4 billion as of June 30, 2025, from $3.1 billion at December 31, 2024. These advances have fixed interest rates ranging from 4.45% to 4.52% and all mature in 2025[59] Note 7 – Commitments and Contingencies This note outlines the Company's off-balance-sheet risks, including commitments to extend credit and standby letters of credit, details significant legal proceedings such as the iCap Entities, Professional Financial Investors, and MOVEit data breach lawsuits, and discusses merger-related termination fees and concentrations of credit risk Financial Instruments with Off-Balance-Sheet Risk This section summarizes the Company's off-balance-sheet commitments, including credit extensions and standby letters of credit Summary of Commitments and Contingent Liabilities (in thousands) | Commitment Type | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Commitments to extend credit | $10,042,369 | $10,077,780 | | Forward sales commitments | $71,500 | $76,535 | | Commitments to originate residential mortgage loans held for sale | $58,919 | $46,208 | | Standby letters of credit | $321,187 | $216,422 | - Standby letters of credit increased significantly to $321.2 million as of June 30, 2025, from $216.4 million at December 31, 2024, with approximately $295.2 million expiring within one year[61][63] Legal Proceedings and Regulatory Matters This section details significant legal actions and regulatory issues, including Ponzi schemes and data breach lawsuits - The Bank is involved in litigation related to the iCap Entities' alleged Ponzi schemes, with potential claims for approximately $290.0 million, which the Bank intends to vigorously defend against[66] - A class action lawsuit against the Bank concerning the Professional Financial Investors, Inc. Ponzi scheme resulted in a court-ordered settlement conference and a Notice of Settlement filed on March 27, 2025, contemplating a $55.0 million payment by the Bank, subject to final court approval[67] - Multiple lawsuits have been filed against the Bank following a MOVEit data security incident, which compromised names and social security numbers of 429,252 consumer and small business customers. All seven cases have been transferred to a multidistrict litigation (MDL)[68][69][70] - The Company has accrued $55.0 million for the Professional Financial Investors legal settlement and an additional $1.2 million for other legal matters as of June 30, 2025, recorded in other liabilities[71] Contingencies This section discusses potential future obligations, including merger-related termination fees - The Merger Agreement with Pacific Premier includes a termination fee of $75.0 million payable by either Columbia or Pacific Premier under certain circumstances[75] Concentrations of Credit Risk This section highlights significant concentrations of credit risk, particularly in real estate-related loans - A significant concentration of credit risk exists in real estate-related loans, representing approximately 75% of the Bank's loan and lease portfolio as of June 30, 2025, with multifamily properties accounting for 19% and office properties for 8%[76] Note 8 – Derivatives This note describes the Company's use of derivative instruments for hedging interest rate and other market risks - The Bank uses derivatives, including forward interest rate contracts, interest rate futures, and interest rate swaps, primarily to hedge risks associated with interest rate lock commitments, residential mortgage loans held for sale, and Mortgage Servicing Rights (MSRs)[78][79][80][81] Derivative Assets and Liabilities (in thousands) | Derivative Type | June 30, 2025 Asset Fair Value | June 30, 2025 Liability Fair Value | Dec 31, 2024 Asset Fair Value | Dec 31, 2024 Liability Fair Value | | :------------------------------ | :----------------------------- | :------------------------------- | :----------------------------- | :------------------------------- | | Interest rate lock commitments | $478 | $43 | $16 | $32 | | Interest rate futures | $2,791 | $0 | $0 | $3,033 | | Interest rate forward sales commitments | $26 | $597 | $695 | $74 | | Interest rate swaps | $88,000 | $200,714 | $107,385 | $277,042 | | Foreign currency derivatives | $494 | $403 | $542 | $438 | | Total | $91,789 | $201,757 | $108,638 | $280,619 | Total Derivative Gains (Losses) (in thousands) | Derivative Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest rate lock commitments | $156 | $(467) | $450 | $(314) | | Interest rate futures | $1,831 | $(1,611) | $5,043 | $(5,882) | | Interest rate forward sales commitments | $(337) | $467 | $(1,165) | $513 | | Interest rate swaps | $(1,330) | $424 | $(2,824) | $1,621 | | Foreign currency derivatives | $159 | $196 | $413 | $238 | | Total derivative gains (losses) | $479 | $(991) | $1,917 | $(3,824) | Note 9 – Earnings Per Common Share This note presents basic and diluted earnings per share calculations and the factors influencing them Earnings Per Common Share (in thousands, except per share) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $152,423 | $120,144 | $239,032 | $244,224 | | Basic EPS | $0.73 | $0.58 | $1.14 | $1.17 | | Diluted EPS | $0.73 | $0.57 | $1.14 | $1.17 | | Weighted average common shares outstanding - basic | 209,125 | 208,498 | 208,964 | 208,379 | | Weighted average common shares outstanding - diluted | 209,975 | 209,011 | 209,965 | 208,999 | - Diluted EPS for the three months ended June 30, 2025, increased to $0.73 from $0.57 in the prior year period. For the six months ended June 30, 2025, diluted EPS slightly decreased to $1.14 from $1.17 in the prior year period[89] - Restricted stock awards and units totaling 796 thousand for the three months and 584 thousand for the six months ended June 30, 2025, were not included in diluted EPS computation as their effect would be anti-dilutive[90] Note 10 – Fair Value Measurement This note details the fair value measurements of financial instruments, categorizing them into Level 1, 2, or 3 based on observability of inputs. It describes valuation techniques for recurring and nonrecurring fair value measurements, including unobservable inputs for Level 3 assets and liabilities, and discusses the fair value option for certain loans and debentures Estimated Fair Values of Financial Instruments This section provides a comparison of carrying values and estimated fair values for various financial instruments Estimated Fair Values of Financial Instruments (in thousands) | Financial Instrument | June 30, 2025 Carrying Value | June 30, 2025 Fair Value | Dec 31, 2024 Carrying Value | Dec 31, 2024 Fair Value | | :------------------------------------------ | :----------------------------- | :----------------------- | :----------------------------- | :----------------------- | | Cash and cash equivalents | $1,942,170 | $1,942,170 | $1,878,255 | $1,878,255 | | Investment securities available for sale | $8,653,172 | $8,653,172 | $8,274,615 | $8,274,615 | | Loans and leases, net | $37,216,106 | $36,059,937 | $37,256,272 | $35,689,803 | | Residential mortgage servicing rights | $102,863 | $102,863 | $108,358 | $108,358 | | Total deposits | $41,742,657 | $41,727,292 | $41,720,732 | $41,807,123 | | Borrowings | $3,350,000 | $3,350,086 | $3,100,000 | $3,101,866 | | Junior subordinated debentures, at fair value | $323,015 | $323,015 | $330,895 | $330,895 | Fair Value of Assets and Liabilities Measured on a Recurring Basis This section categorizes assets and liabilities measured at fair value into Level 1, 2, and 3 based on input observability Assets Measured at Fair Value on a Recurring Basis (June 30, 2025, in thousands) | Description | Total | Level 1 | Level 2 | Level 3 | | :------------------------------------------------- | :---------- | :-------- | :---------- | :-------- | | Equity and other investment securities | $92,958 | $74,499 | $18,459 | $0 | | Investment securities available for sale | $8,653,172 | $231,715 | $8,421,457 | $0 | | Loans held for sale, at fair value | $65,590 | $0 | $65,590 | $0 | | Loans and leases, at fair value | $177,949 | $0 | $177,949 | $0 | | Residential mortgage servicing rights, at fair value | $102,863 | $0 | $0 | $102,863 | | Derivatives | $91,789 | $0 | $91,317 | $478 | | Total assets measured at fair value | $9,184,321 | $306,214 | $8,774,766 | $103,341 | Liabilities Measured at Fair Value on a Recurring Basis (June 30, 2025, in thousands) | Description | Total | Level 1 | Level 2 | Level 3 | | :------------------------------------------ | :---------- | :-------- | :---------- | :-------- | | Junior subordinated debentures, at fair value | $323,015 | $0 | $0 | $323,015 | | Derivatives | $201,757 | $0 | $201,714 | $43 | | Total liabilities measured at fair value | $524,772 | $0 | $201,714 | $323,058 | - Residential mortgage servicing rights (MSR) and junior subordinated debentures are classified as Level 3, utilizing unobservable inputs like constant prepayment rates and credit spreads, respectively. Interest rate lock commitments are also Level 3 due to pull-through rate assumptions[97][98][99][101][102][103] Fair Value of Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis This section details nonrecurring fair value adjustments, primarily for impaired collateral-dependent loans and leases Losses from Nonrecurring Fair Value Adjustments (in thousands) | Asset Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Loans and leases | $25,857 | $30,704 | $54,539 | $58,878 | - Losses from nonrecurring fair value adjustments on collateral-dependent loans and leases totaled $54.5 million for the six months ended June 30, 2025, a decrease from $58.9 million in the prior year period. These adjustments reflect impairment where collateral value is less than the recorded investment[110][111] Fair Value Option This section explains the Company's election of the fair value option for certain loans and subordinated debentures - The Bank elected the fair value option for certain residential mortgage loans held for sale and some junior subordinated debentures. Changes in fair value for loans held for sale are recognized in residential mortgage banking revenue, while for junior subordinated debentures, they are recognized in other comprehensive income[112][113][114] - For the six months ended June 30, 2025, loans held for investment under the fair value option recorded a net increase in fair value of $7.2 million, a significant improvement from a $12.5 million net decrease in the prior year period[113] Note 11 – Income Taxes and Investment Tax Credits This note details deferred tax assets, effective tax rates, and tax credits from affordable housing investments - The Company had a net deferred tax asset of $299.0 million as of June 30, 2025, including $1.5 million in federal and state Net Operating Loss (NOL) carry-forwards expiring between 2030-2031[116] - The effective tax rate for the six months ended June 30, 2025, was 27.0%, up from 26.0% in the prior year period, primarily due to an increase in non-deductible compensation[117][179] - The Company's investments in affordable housing partnerships, totaling $226.0 million as of June 30, 2025, generate federal income tax credits and other tax benefits, recognized as a reduction to income tax expense[120][121][122] Note 12 – Segment Reporting This note clarifies that the Company operates as a single banking segment, with performance assessed on a consolidated basis - The Company operates as a single operating and reportable segment, primarily focused on banking operations, including consumer and residential real estate loans, commercial lending, deposit products, and treasury and wealth management services across its market areas[123] - The Chief Executive Officer (CODM) assesses performance and allocates resources based on consolidated net income and total consolidated assets, using these metrics for budget monitoring and competitive analysis[124][125] Note 13 – Subsequent Event This note discloses the all-stock acquisition of Pacific Premier, including key terms and regulatory approvals - On April 23, 2025, Columbia announced an all-stock acquisition of Pacific Premier, with Pacific Premier stockholders receiving 0.9150 shares of Columbia common stock for each share owned, expected to result in Pacific Premier stockholders owning approximately 30% of the combined company[127] - The acquisition received all required regulatory approvals by August 6, 2025, and is expected to close around August 31, 2025, following shareholder approvals on July 21, 2025[128] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition and results of operations, highlighting key performance drivers, credit quality trends, liquidity, capital adequacy, and critical accounting estimates, along with an executive overview of recent strategic developments Forward-Looking Statements This section identifies forward-looking statements and outlines significant risks and uncertainties that could impact future results - The report contains forward-looking statements regarding derivatives, ACL models, liquidity, securities portfolio, loan sales, non-performing loans, CRE portfolio, economic environment, interest rates, litigation, dividends, fair values, and the Pacific Premier merger, subject to substantial risks and uncertainties[129][130][131] - Key risks include changes in economic conditions, interest rate volatility, competitive pressures, bank failures, regulatory changes, cybersecurity breaches, and risks specifically related to the Pacific Premier merger, such as integration difficulties and failure to realize anticipated benefits[131][134] General Company Information This section provides an overview of Columbia Banking System, its banking subsidiary, and primary service areas - Columbia Banking System, Inc. is a financial holding company that wholly owns Columbia Bank (formerly Umpqua Bank), providing a broad range of banking and financial services. The Bank's name change to Columbia Bank became effective July 1, 2025, with branding to follow on September 1, 2025[133] - The Bank's primary service areas are in Oregon, Washington, California, Idaho, Nevada, Arizona, Colorado, and Utah, with deposits insured by the FDIC[135] Executive Overview The executive overview highlights the pending acquisition of Pacific Premier, key financial performance metrics for the quarter and year-to-date, credit quality trends including non-performing assets and ACL, and summaries of the Company's liquidity and capital positions Pending Acquisition This section summarizes the strategic acquisition of Pacific Premier, including its terms and expected closing date - Columbia announced the acquisition of Pacific Premier in an all-stock transaction on April 23, 2025, with a target closing date of August 31, 2025, pending customary closing conditions. The acquisition is a strategic fit, strengthening Columbia's position in Southern California and enhancing product offerings[136] Financial Performance Summary This section provides a high-level summary of key financial metrics, including EPS, net interest margin, and income/expense Key Financial Performance Metrics | Metric | Q2 2025 | Q1 2025 | 6M 2025 | 6M 2024 | | :----------------------- | :------ | :------ | :------ | :------ | | Diluted EPS | $0.73 | $0.41 | $1.14 | $1.17 | | Net Interest Margin (tax-equivalent) | 3.75% | 3.60% | 3.67% | 3.54% | | Net Interest Income (in millions) | $446.4 | $424.9 | $871.4 | $850.8 | | Non-Interest Income (in millions) | $64.5 | $66.4 | $130.8 | $95.1 | | Non-Interest Expense (in millions) | $278.0 | $340.1 | $618.1 | $566.8 | - Q2 2025 diluted EPS increased to $0.73 from $0.41 in Q1 2025, driven by a $62.1 million decrease in non-interest expense (due to a one-time legal settlement accrual and severance in Q1) and a $21.5 million increase in net interest income[137] - Year-to-date diluted EPS for 6M 2025 decreased slightly to $1.14 from $1.17 in 6M 2024, primarily due to higher non-interest expense (legal settlement and severance), partially offset by increased non-interest income and net interest income[140] Credit Quality Summary This section summarizes trends in non-performing assets, loan quality, and the Allowance for Credit Losses Key Credit Quality Metrics | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Total loans and leases | $37.6 billion | $37.7 billion | | Non-performing assets | $180.3 million | $169.6 million | | Non-performing assets to total assets | 0.35% | 0.33% | | Non-performing loans and leases | $177.4 million | $166.9 million | | Non-performing loans and leases to total loans and leases | 0.47% | 0.44% | | Allowance for Credit Losses (ACL) | $439.0 million | $440.8 million | - Non-performing assets increased to $180.3 million (0.35% of total assets) as of June 30, 2025, from $169.6 million (0.33%) at December 31, 2024, with non-performing loans and leases rising to $177.4 million (0.47% of total loans)[140] - The ACL decreased by $1.8 million to $439.0 million as of June 30, 2025, reflecting credit migration trends, changes in economic assumptions, and decreases in loan portfolio balances[140] - Provision for credit losses for 6M 2025 increased to $56.9 million from $49.0 million in 6M 2024, driven by credit migration trends, charge-off activity, and changes in economic forecasts[141] Liquidity Summary This section provides an overview of the Company's cash position and total available liquidity resources - Total cash and cash equivalents increased by $63.9 million to $1.9 billion as of June 30, 2025, from December 31, 2024[146] - Total available liquidity was $18.6 billion as of June 30, 2025, representing 36% of total assets, 44% of total deposits, and 132% of estimated uninsured deposits[146] Capital Summary This section summarizes the Company's capital adequacy ratios and dividend payments Capital Ratios | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Total risk-based capital ratio | 13.0% | 12.8% | | Common equity tier 1 (CET1) capital ratio | 10.8% | 10.5% | - Columbia paid a quarterly cash dividend of $0.36 per common share on June 16, 2025[146] Critical Accounting Estimates This section discusses key accounting estimates requiring significant judgment, such as ACL and goodwill - The Company's critical accounting estimates, detailed in its Annual Report on Form 10-K, include the Allowance for Credit Losses (ACL) and goodwill, which require significant judgment and are sensitive to changing information[143] - No material changes in the methodology of these critical accounting estimates occurred during the six months ended June 30, 2025[143] Results of Operations This section analyzes the Company's financial performance, detailing changes in net income, profitability ratios, net interest income, provision for credit losses, non-interest income, non-interest expense, and income taxes, comparing current periods to prior quarters and year-to-date periods Net Income Performance This section analyzes the drivers of net income changes for the current quarter and year-to-date periods - Net income for Q2 2025 was $152.4 million, up from $86.6 million in Q1 2025, primarily due to a $62.1 million decrease in non-interest expense (related to a legal settlement accrual and severance in Q1) and a $21.5 million increase in net interest income[145] - For 6M 2025, net income was $239.0 million, a slight decrease from $244.2 million in 6M 2024, mainly attributable to a $51.4 million increase in non-interest expense, partially offset by increases in non-interest income and net interest income[147] Return on Average Assets, Common Shareholders' Equity and Tangible Common Shareholders' Equity This section presents key profitability ratios, including returns on average assets, equity, and tangible equity Return on Average Assets, Equity, and Tangible Equity | Metric | Q2 2025 | Q1 2025 | 6M 2025 | 6M 2024 | | :----------------------------------------- | :------ | :------ | :------ | :------ | | Return on average assets | 1.19% | 0.68% | 0.94% | 0.94% | | Return on average common shareholders' equity | 11.56% | 6.73% | 9.18% | 9.93% | | Return on average tangible common shareholders' equity | 16.03% | 9.45% | 12.80% | 14.69% | - Return on average tangible common shareholders' equity increased to 16.03% in Q2 2025 from 9.45% in Q1 2025, reflecting improved net income and the exclusion of intangible assets[149] Tangible Common Equity and Tangible Assets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Tangible common shareholders' equity | $3,882,205 | $3,604,742 | | Tangible assets | $50,441,765 | $50,062,915 | | Tangible common equity to tangible assets ratio | 7.70% | 7.20% | Net Interest Income This section analyzes changes in net interest income and net interest margin, driven by earning asset yields and funding costs - Net interest income for Q2 2025 was $446.4 million, an increase of $21.5 million from Q1 2025, driven by a $23.4 million increase in interest income from loans and investment securities, with stable funding costs[153] - The net interest margin (tax-equivalent) increased to 3.75% in Q2 2025 from 3.60% in Q1 2025, benefiting from higher earning asset yields, particularly on taxable investment securities (4.22% from 3.72%) and the loan portfolio (6.00% from 5.92%)[154] - For 6M 2025, net interest income increased by $20.6 million to $871.4 million compared to 6M 2024, primarily due to lower funding costs (interest-bearing liabilities cost decreased by 49 bps to 2.79%), partially offset by lower earning asset yields[155][156] Provision for Credit Losses This section discusses the provision for credit losses and net charge-offs, reflecting credit quality trends and economic forecasts - The provision for credit losses was $29.4 million in Q2 2025, up from $27.4 million in Q1 2025, reflecting credit migration trends, charge-off activity, and changes in economic forecasts[163] - Net charge-offs for Q2 2025 were $29.3 million, consistent with Q1 2025. FinPac portfolio net charge-offs decreased by $2.6 million to $14.2 million, while other commercial portfolio net charge-offs increased to $15.2 million[164] - For 6M 2025, the provision for credit losses increased to $56.9 million from $49.0 million in 6M 2024. Net charge-offs decreased to $58.7 million from $74.4 million in 6M 2024, with FinPac charge-offs improving by $17.6 million[165][166] Non-Interest Income This section analyzes the components and changes in non-interest income, including mortgage banking and fair value adjustments Non-Interest Income (in thousands) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | 6M 2025 | 6M 2024 | Change (YoY) | | :------------------------------------------ | :------ | :------ | :----------- | :------ | :------ | :----------- | | Total non-interest income | $64,462 | $66,377 | $(1,915) | $130,839 | $95,060 | $35,779 | | Residential mortgage banking revenue, net | $7,343 | $9,334 | $(1,991) | $16,677 | $10,482 | $6,195 | | Gain (loss) on certain loans held for investment, at fair value | $212 | $7,016 | $(6,804) | $7,228 | $(12,486) | $19,714 | | Other income | $11,070 | $6,282 | $4,788 | $17,352 | $17,953 | $(601) | - Total non-interest income decreased by $1.9 million QoQ to $64.5 million in Q2 2025, primarily due to a $6.8 million decrease in fair value gains on certain loans held for investment, partially offset by a $4.8 million increase in other income (higher trading income and swap customer fee revenue)[168][169][170] - Total non-interest income increased by $35.8 million YoY to $130.8 million in 6M 2025, mainly driven by a favorable $19.7 million change in fair value adjustments for certain loans held for investment and a $6.2 million increase in residential mortgage banking revenue (due to MSR hedge gains)[168][171][172] Non-Interest Expense This section details the components and changes in non-interest expense, including legal settlements and FDIC assessments Non-Interest Expense (in thousands) | Metric | Q2 2025 | Q1 2025 | Change (QoQ) | 6M 2025 | 6M 2024 | Change (YoY) | | :-------------------------- | :------ | :------ | :----------- | :------ | :------ | :----------- | | Total non-interest expense | $277,995 | $340,122 | $(62,127) | $618,117 | $566,760 | $51,357 | | Salaries and employee benefits | $154,883 | $145,239 | $9,644 | $300,122 | $299,604 | $518 | | Merger and restructuring expense | $8,186 | $14,379 | $(6,193) | $22,565 | $19,119 | $3,446 | | Legal settlement | $0 | $55,000 | $(55,000) | $55,000 | $0 | $55,000 | | FDIC assessments | $8,144 | $8,022 | $122 | $16,166 | $24,124 | $(7,958) | - Total non-interest expense decreased by $62.1 million QoQ to $278.0 million in Q2 2025, primarily due to the absence of a $55.0 million legal settlement accrual and $14.6 million in severance expense recorded in Q1 2025[173][175][176] - Total non-interest expense increased by $51.4 million YoY to $618.1 million in 6M 2025, mainly due to the $55.0 million legal settlement accrual in Q1 2025, partially offset by a $7.9 million decrease in FDIC assessments (due to a special assessment in 6M 2024)[173][177][178] Income Taxes This section discusses the effective tax rate and factors influencing income tax expense for the reporting periods - The effective tax rate for Q2 2025 was 25.1%, compared to 30.1% in Q1 2025. For 6M 2025, the effective tax rate was 27.0%, up from 26.0% in 6M 2024, primarily due to changes in non-deductible compensation[179] Financial Condition This section provides an in-depth analysis of the Company's balance sheet, including trends in debt securities, loan and lease portfolios (with detailed breakdowns by type and credit quality), asset quality, allowance for credit losses, residential mortgage servicing rights, goodwill and other intangible assets, deposits, borrowings, and capital resources Debt Securities This section analyzes the investment debt securities portfolio, including changes in fair value and unrealized losses - Investment debt securities available for sale increased to $8.7 billion as of June 30, 2025, from $8.3 billion at December 31, 2024. This increase was driven by $547.6 million in securities purchases and a $165.5 million increase in fair value due to lower rates, partially offset by $371.5 million in paydowns, calls, and maturities[181] - The available-for-sale portfolio had gross unrealized losses of $459.8 million as of June 30, 2025, primarily from mortgage-backed securities, attributed to market interest rate changes rather than credit quality[183] Loans and Leases This section details the composition and changes in the loan and lease portfolio, including concentrations and charge-offs - Total loans and leases outstanding decreased by $43.9 million to $37.6 billion as of June 30, 2025, compared to $37.7 billion at December 31, 2024. This contraction was mainly in residential and commercial loan balances, partially offset by growth in CRE construction and owner-occupied term CRE balances[185] Loan and Lease Portfolio Concentration Distribution | Loan Type | June 30, 2025 Amount | June 30, 2025 % | Dec 31, 2024 Amount | Dec 31, 2024 % | | :-------------------------- | :------------------- | :-------------- | :------------------- | :-------------- | | Commercial real estate | $19,600,480 | 52% | $19,567,672 | 52% | | Commercial | $9,944,830 | 26% | $9,968,096 | 26% | | Residential | $7,912,599 | 21% | $7,965,005 | 21% | | Consumer & other | $179,104 | 1% | $180,128 | 1% | | Total | $37,637,013 | 100% | $37,680,901 | 100% | - The loan to deposit ratio remained at 90% for both June 30, 2025, and December 31, 2024[185] - CRE loans increased by $32.8 million to $19.6 billion, driven by construction and development loan utilization. Multifamily properties represented 19% and office properties 8% of the total loan portfolio[193][194] - Commercial loans decreased by $23.3 million to $9.9 billion, mainly due to paydowns. Net charge-offs in the FinPac lease portfolio improved to $14.2 million in Q2 2025 from $16.8 million in Q1 2025, reflecting improvements in the transportation sector[197][198] Asset Quality and Non-Performing Assets This section analyzes trends in non-performing assets and key asset quality ratios, reflecting the credit environment Non-Performing Assets and Asset Quality Ratios (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Total non-performing assets | $180,252 | $169,559 | | Non-performing assets to total assets | 0.35% | 0.33% | | Total non-performing loans and leases | $177,434 | $166,893 | | Non-performing loans and leases to total loans and leases | 0.47% | 0.44% | | Non-accrual loans and leases to total loans and leases | 0.26% | 0.26% | | ACLLL to total loans and leases | 1.12% | 1.13% | | ACL to total non-performing loans and leases | 247% | 264% | - Non-performing assets increased to $180.3 million (0.35% of total assets) as of June 30, 2025, from $169.6 million (0.33%) at December 31, 2024, indicating a more normalized credit environment[203] - Non-accrual and 90+ days past due loans included $37.1 million and $30.7 million, respectively, in government guarantees as of June 30, 2025[203] Allowance for Credit Losses This section details the ACL balance, economic forecasts, and allocation across portfolio segments - The ACL totaled $439.0 million as of June 30, 2025, a decrease of $1.8 million from December 31, 2024, driven by credit migration trends, changes in economic assumptions, and recalibration of CECL models[204] - The Bank used Moody's Analytics' May 2025 consensus economic forecast for ACL estimation, which reflects a deterioration in macroeconomic conditions compared to the prior period, leading to upward qualitative overlays in commercial and CRE portfolios[207] Allocation of ACLLL by Portfolio Segment (in thousands) | Portfolio Segment | June 30, 2025 Amount | June 30, 2025 % | Dec 31, 2024 Amount | Dec 31, 2024 % | | :-------------------- | :------------------- | :-------------- | :------------------- | :-------------- | | Commercial real estate | $159,823 | 52% | $154,413 | 52% | | Commercial | $219,862 | 26% | $218,668 | 26% | | Residential | $34,590 | 21% | $44,700 | 21% | | Consumer & other | $6,632 | 1% | $6,848 | 1% | | Total ACLLL | $420,907 | 100% | $424,629 | 100% | Residential Mortgage Servicing Rights This section discusses the balance and fair value changes of residential mortgage servicing rights and their sensitivity to rates - The balance of Residential Mortgage Servicing Rights (MSR) decreased to $102.9 million as of June 30, 2025, from $108.4 million at December 31, 2024. This decline was primarily due to changes in fair value from valuation inputs and assumptions, partially offset by new MSR capitalized[210] - The MSR as a percentage of serviced loans was 1.31% as of June 30, 2025, down from 1.36% at December 31, 2024[211] - MSR fair value generally increases as market rates for mortgage loans rise and decreases when rates fall, due to their impact on prepayment speeds[211] Goodwill and Other Intangible Assets This section details the stable goodwill balance and the amortization of other intangible assets - Goodwill remained unchanged at $1.0 billion as of June 30, 2025, and December 31, 2024[212] - Other intangible assets, net, decreased to $430.4 million as of June 30, 2025, from $484.2 million at December 31, 2024, due to amortization. These assets, primarily core deposits, are amortized on an accelerated basis over 10 years[213] Deposits This section analyzes deposit trends by category, including non-interest-bearing and uninsured deposits - Total deposits increased slightly by $21.9 million to $41.7 billion as of June 30, 2025, driven by a small business and retail deposits campaign and an increase in brokered deposits, partially offset by a decrease in customer deposits[214] Deposit Balances by Category (in thousands) | Deposit Type | June 30, 2025 Amount | June 30, 2025 % | Dec 31, 2024 Amount | Dec 31, 2024 % | | :-------------------------- | :------------------- | :-------------- | :------------------- | :-------------- | | Non-interest-bearing demand | $13,219,631 | 32% | $13,307,905 | 32% | | Interest-bearing demand | $8,334,553 | 20% | $8,475,693 | 20% | | Money market | $11,694,412 | 28% | $11,475,055 | 27% | | Savings | $2,275,500 | 5% | $2,360,040 | 6% | | Time, greater than $250,000 | $1,099,101 | 3% | $1,201,887 | 3% | | Time, $250,000 or less | $5,119,460 | 12% | $4,900,152 | 12% | | Total deposits | $41,742,657 | 100% | $41,720,732 | 100% | - Estimated uninsured deposits were $14.1 billion (34% of total deposits) as of June 30, 2025, with total available liquidity at 132% of estimated uninsured deposits[215][216] Borrowings This section details changes in the Company's borrowings, including repurchase agreements and FHLB advances - Securities sold under agreements to repurchase decreased by $45.2 million to $191.4 million as of June 30, 2025[217] - FHLB advances increased to $3.4 billion as of June 30, 2025, from $3.1 billion at December 31, 2024, with all advances maturing in 2025 at fixed rates between 4.45% and 4.52%[217] Junior and Other Subordinated Debentures This section discusses the balance and fair value changes of junior and other subordinated debentures - Junior and other subordinated debentures decreased to $430.6 million as of June 30, 2025, from $438.6 million at December 31, 2024, primarily due to a $7.7 million decline in fair value for debentures carried at fair value[218] - Substantially all junior subordinated debentures have adjustable interest rates based on a spread over three-month term SOFR, with a $10.0 million subordinated debenture maturing in December 2025[218] Liquidity and Cash Flow This section assesses the Company's liquidity position, including core deposits, available lines, and cash flows - The Company maintains a robust liquidity position, with total core deposits of $37.3 billion and $2.6 billion in excess bond collateral as of June 30, 2025[221] Total Available Liquidity (in thousands) | Liquidity Source | June 30, 2025 | | :----------------------------------- | :------------ | | Total off-balance sheet liquidity | $14,238,265 | | Cash and cash equivalents, less reserve requirements | $1,745,806 | | Excess bond collateral | $2,568,184 | | Total available liquidity | $18,552,255 | - Off-balance sheet liquidity sources include $7.5 billion in FHLB lines, $6.1 billion from the Federal Reserve Discount Window, and $600.0 million in uncommitted lines of credit[224] - The Bank paid $180.0 million in dividends to the Company during the six months ended June 30, 2025, subject to statutory and regulatory limits[224] Capital Resources This section details changes in shareholders' equity and regulatory capital ratios, confirming well-capitalized status - Shareholders' equity increased by $223.7 million to $5.3 billion as of June 30,