Columbia Banking System Announces Second Quarter 2022 Results and Quarterly Cash Dividend

Columbia Banking System Announces Second Quarter 2022 Results and Quarterly Cash Dividend
PR Newswire
TACOMA, Wash., July 21, 2022

Notable Items for Second Quarter 2022
Quarterly net income of $58.8 million and diluted earnings per share of $0.75, …

Published

2 years ago

July 21, 2022

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Columbia Banking System Announces Second Quarter 2022 Results and Quarterly Cash Dividend

PR Newswire

TACOMA, Wash., July 21, 2022

Notable Items for Second Quarter 2022

Quarterly net income of $58.8 million and diluted earnings per share of $0.75, which included $0.04 per share reduction stemming from merger-related expenses
Record non-PPP loan production of $734.4 million
Totals loans increased 21% annualized to $11.32 billion
Net interest margin of 3.16%, an increase of 4 basis points from the linked quarter
Nonperforming assets to period-end assets ratio decreased to historic low of 0.08%
Regular cash dividend declared of $0.30 per share

TACOMA, Wash., July 21, 2022 /PRNewswire/ -- Clint Stein, President and Chief Executive Officer of Columbia Banking System, Inc. ("Columbia", "we" or "us") and Columbia Bank (the "Bank") (NASDAQ: COLB), said today upon the release of Columbia's second quarter 2022 earnings, "Our bankers' continued hard work is reflected in our results for the quarter with exceptional production driving annualized loan growth of over 20 percent, strong fee income and outstanding credit metrics." He continued, "Our investments in new and existing markets continue to pay dividends with respect to expanding our production capabilities."

Balance Sheet

Total assets at June 30, 2022 were $20.56 billion, a decrease of $399.6 million from the linked quarter. Loans were $11.32 billion, up $562.7 million from March 31, 2022, mainly attributable to loan originations of $734.4 million partially offset by loan payments. Total Paycheck Protection Program ("PPP") loans decreased from $83.2 million at March 31, 2022 to $32.4 million at June 30, 2022. Debt securities in total were $7.27 billion, a decrease of $458.0 million from $7.73 billion at March 31, 2022 substantially driven by fair value movement related to the available-for-sale portfolio. Total deposits at June 30, 2022 were $17.96 billion, a decrease of $342.3 million from March 31, 2022. The deposit mix remained fairly consistent from March 31, 2022 with 49% noninterest-bearing and 51% interest-bearing.

Chris Merrywell, Columbia's Executive Vice President and Chief Operating Officer, stated, "Our teams have been outwardly focused on building and expanding relationships with existing and new clients, generating new loan balances and related income." He continued, "We are excited about the future with our recent expansion into the Salt Lake City market, which complements investments in other teams across our overall footprint in the past year."

Income Statement

Net Interest Income

Net interest income for the second quarter of 2022 was $147.5 million, an increase of $1.3 million from the linked quarter and an increase of $22.0 million from the prior-year period. The increase from the linked quarter was primarily due to higher loan interest income as a result of higher average balances partially offset by lower interest income from securities substantially driven by lower averages balances. The increase in net interest income from the prior-year period was mainly due to an increase in interest income from loans and securities, which was a result of higher average balances, partially related to the Bank of Commerce Holdings acquisition. For additional information regarding net interest income, see the "Net Interest Margin" section and the "Average Balances and Rates" tables.

Provision for Credit Losses

Columbia recorded a $2.1 million provision for credit losses for the second quarter of 2022 compared to a $7.8 million recapture for the linked quarter and a provision recapture of $5.5 million for the comparable quarter in 2021. The provision for credit losses was mainly a result of loan growth partially offset by improved credit quality during the quarter.

Andy McDonald, Columbia's Executive Vice President and Chief Credit Officer, stated, "Growth in the loan portfolio was partly offset by improving credit metrics, resulting in a modest provision during the quarter. Our loan portfolio is well-diversified and we remain vigilant for any signs of economic turmoil from inflation, the Federal Reserve's efforts to combat inflation or a resurgence of COVID-19."

Noninterest Income

Noninterest income was $25.0 million for the second quarter of 2022, an increase of $826 thousand from the linked quarter and an increase of $2.3 million from the second quarter of 2021. The increase compared to the linked quarter was primarily due to higher deposit account and treasury management fees and loan revenue partially offset by lower financial services and trust revenue and other noninterest income. The increase in noninterest income during the second quarter of 2022 compared to the same quarter in 2021 was mainly due to increases associated with deposit account and treasury management fees and other noninterest income offset by lower mortgage banking revenue due to lower overall mortgage production and decreased premium on loan sales attributed to the higher rate environment.

Noninterest Expense

Total noninterest expense for the second quarter of 2022 was $95.4 million, a decrease of $9.7 million compared to the first quarter of 2022. Total merger-related expenses for the quarter were $3.9 million, which compares to the linked quarter of $7.1 million. Taking this into account, the largest contributor to the decrease in noninterest expense was related to compensation and employee benefits. This can be mainly attributed to lower 401(k) and payroll tax expenses, which are typically elevated in the first quarter. In addition, there were increased capitalized loan labor costs related to the high amounts of loan production during the quarter. The decrease was also attributable to lower occupancy, data processing and software expense and other noninterest expense. Compared to the second quarter of 2021, noninterest expense increased $11.3 million, mostly from an increase in compensation and employee benefits. This increase was primarily due to our acquisition of Bank of Commerce Holdings in the fourth quarter of 2021 and the prior-year period having substantial labor costs capitalized related to PPP loan originations. Increased merger-related expenses from legal and professional fees along with data processing and software also contributed to the increase from the prior-year period.

The provision for credit losses on unfunded loan commitments, a component of other noninterest expense, for the periods indicated are as follows:

	Three Months Ended			Six Months Ended
	June 30,	March 31,	June 30,	June 30,	June 30,
	2022	2022	2021	2022	2021

	*(in thousands)*
Provision for credit losses on unfunded loan commitments	$ —	$ 500	$ 200	$ 500	$ 1,700

Net Interest Margin

Columbia's net interest margin (tax equivalent) for the second quarter of 2022 was 3.16%, an increase of 4 basis points from the linked quarter and flat from the prior-year period. The increase in the net interest margin (tax equivalent) compared to the linked quarter was primarily due to a stronger earning assets mix with a smaller ratio of assets in low-yield interest earning deposits with banks and a larger ratio of assets in higher-yield loans. The average cost of total deposits for the quarter was 5 basis points compared to 4 basis points for the linked quarter. For additional information regarding net interest margin, see the "Average Balances and Rates" tables.

Columbia's operating net interest margin (tax equivalent)¹ was 3.23% for the second quarter of 2022, an increase of 8 basis points from the linked quarter and from the prior-year period. The increase in the operating net interest margin for the second quarter of 2022 compared to the linked quarter and the prior-year period were both due to a stronger earning assets mix.

Aaron James Deer, Columbia's Executive Vice President and Chief Financial Officer, said, "The higher interest rate environment is beginning to have a favorable yield impact on new loan production and repricing loans, which should support further margin expansion."

Asset Quality

At June 30, 2022, nonperforming assets to total assets decreased to 0.08% compared to 0.09% at March 31, 2022. Total nonperforming assets decreased $791 thousand from the linked quarter, primarily due to decreases in agriculture and commercial business nonaccrual loans, partially offset by an increase in commercial real estate nonaccrual loans.

The following table sets forth information regarding nonaccrual loans and total nonperforming assets:

	June 30, 2022	March 31, 2022	December 31, 2021

	*(in thousands)*
Nonaccrual loans:
Commercial loans:
Commercial real estate	$ 2,675	$ 939	$ 1,872
Commercial business	9,947	10,201	13,321
Agriculture	3,216	5,053	5,396
Consumer loans:
One-to-four family residential real estate	1,140	1,236	2,433
Other consumer	20	12	19
Total nonaccrual loans	16,998	17,441	23,041
OREO and other personal property owned	33	381	381
Total nonperforming assets	$ 17,031	$ 17,822	$ 23,422

Nonperforming assets to total loans were 0.15% and 0.16% at June 30, 2022 and March 31, 2022, respectively.

The following table provides an analysis of the Company's allowance for credit losses:

	Three Months Ended			Six Months Ended
	June 30,	March 31,	June 30,	June 30,	June 30,
	2022	2022	2021	2022	2021

	*(in thousands)*
Beginning balance	$ 146,949	$ 155,578	$ 148,294	$ 155,578	$ 149,140
Charge-offs:
Commercial loans:
Commercial real estate	(299)	—	(316)	(299)	(316)
Commercial business	(91)	(1,632)	(971)	(1,723)	(4,310)
Agriculture	(1)	(23)	(122)	(24)	(122)
Consumer loans:
One-to-four family residential real estate	(3)	—	(146)	(3)	(146)
Other consumer	(242)	(246)	(385)	(488)	(512)
Total charge-offs	(636)	(1,901)	(1,940)	(2,537)	(5,406)
Recoveries:
Commercial loans:
Commercial real estate	147	14	16	161	52
Commercial business	797	291	874	1,088	4,088
Agriculture	24	125	5	149	17
Construction	136	8	521	144	567
Consumer loans:
One-to-four family residential real estate	291	294	503	585	554
Other consumer	127	340	215	467	276
Total recoveries	1,522	1,072	2,134	2,594	5,554
Net (charge-offs) recoveries	886	(829)	194	57	148
Provision (recapture) for credit losses	2,100	(7,800)	(5,500)	(5,700)	(6,300)
Ending balance	$ 149,935	$ 146,949	$ 142,988	$ 149,935	$ 142,988

The allowance for credit losses to period-end loans was 1.32% at June 30, 2022 compared to 1.37% at March 31, 2022. Excluding PPP loans, the allowance for credit losses to period-end loans²was 1.33% at June 30, 2022 compared to 1.38% at March 31, 2022.

Organizational Update

Umpqua Merger

Integration planning related to the combination with Umpqua Holdings Corporation, which shareholders of both companies overwhelmingly approved in January, continues to move forward despite the protracted regulatory approval process currently overshadowing merger and acquisition activity in the banking industry. "I'm proud of the way that teams from both companies have coordinated to modify integration plans in anticipation of a shorter timeframe between close and core systems conversion," said Clint Stein. "Associates from both companies have joined forces to ensure a seamless transition for all clients, once regulatory approval is complete."

Cash Dividend Announcement

Columbia will pay a regular cash dividend of $0.30 per common share on August 17, 2022 to shareholders of record as of the close of business on August 3, 2022.

Conference Call Information

Columbia's management will discuss the second quarter 2022 financial results on a conference call scheduled for Thursday, July 21, 2022 at 11:00 a.m. Pacific Time (2:00 p.m. ET). Interested parties may register for the call to receive dial-in details and their own unique PIN using the following link:
https://register.vevent.com/register/BId4755d428d1f41f8a6b7c343d6b2b4d0

Alternatively, the webcast can be joined by using the following link:
https://edge.media-server.com/mmc/p/huj2z2zu

A replay of the webcast will be accessible beginning Friday, July 22, 2022 using the link below:
https://edge.media-server.com/mmc/p/huj2z2zu

About Columbia

Headquartered in Tacoma, Washington, Columbia Banking System, Inc. (NASDAQ: COLB) is the holding company of Columbia Bank, a Washington state-chartered full-service commercial bank with locations throughout Washington, Oregon, Idaho and California. The bank has been named one of Puget Sound Business Journal's "Washington's Best Workplaces," more than 10 times. Columbia was named on the Forbes 2022 list of "America's Best Banks" marking 11 consecutive years on the publication's list of top financial institutions.

More information about Columbia can be found on its website at www.columbiabank.com.

Note Regarding Forward-Looking Statements

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, descriptions of Columbia's management's expectations regarding future events and developments such as future operating results, growth in loans and deposits, continued success of Columbia's style of banking and the strength of the local economy as well as the potential effects of the COVID-19 pandemic on Columbia's business, operations, financial performance and prospects. The words "will," "believe," "expect," "intend," "should," and "anticipate" or the negative of these words or words of similar construction are intended in part to help identify forward-looking statements. Future events are difficult to predict, and the expectations described above are necessarily subject to risks and uncertainties, many of which are outside our control, that may cause actual results to differ materially and adversely. In addition to discussions about risks and uncertainties set forth from time to time in Columbia's filings with the Securities and Exchange Commission (the "SEC"), available at the SEC's website at www.sec.gov and the Company's website at www.columbiabank.com, including the "Risk Factors," "Business" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of our annual reports on Form 10-K and quarterly reports on Form 10-Q (as applicable), factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following:

national and global economic conditions could be less favorable than expected or could have a more direct and pronounced effect on us than expected and adversely affect our ability to continue internal growth and maintain the quality of our earning assets;
the markets where we operate and make loans could face challenges;
the risks presented by the economy, which could adversely affect credit quality, collateral values, including real estate collateral, investment values, liquidity and loan originations and loan portfolio delinquency rates;
continued increases in inflation, and the risk that information may differ, possibly materially, from expectations, and actions taken by the Board of Governors of the Federal Reserve System in response to inflation and their potential impact on economic conditions including the possibility of a recession;
risks related to the proposed merger with Umpqua including, among others, (i) failure to complete the merger with Umpqua or unexpected delays related to the merger or either party's inability to obtain regulatory or shareholder approvals or satisfy other closing conditions required to complete the merger, (ii) regulatory approvals resulting in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction, (iii) certain restrictions during the pendency of the proposed transaction with Umpqua that may impact the parties' ability to pursue certain business opportunities or strategic transactions, (iv) diversion of management's attention from ongoing business operations and opportunities, (v) cost savings and any revenue synergies from the merger may not be fully realized or may take longer than anticipated to be realized, (vi) the integration of each party's management, personnel and operations will not be successfully achieved or may be materially delayed or will be more costly or difficult than expected, (vii) deposit attrition, customer or employee loss and/or revenue loss as a result of the announcement of the proposed merger, (viii) expenses related to the proposed merger being greater than expected, and (ix) shareholder litigation that may prevent or delay the closing of the proposed merger or otherwise negatively impact the Company's business and operations;
the efficiencies and enhanced financial and operating performance we expect to realize from investments in personnel, acquisitions and infrastructure may not be realized;
the ability to successfully integrate future acquired entities;
interest rate changes could significantly reduce net interest income and negatively affect asset yields and funding sources;
the effect of the discontinuation or replacement of LIBOR;
results of operations following strategic expansion, including the impact of acquired loans on our earnings, could differ from expectations;
changes in the scope and cost of FDIC insurance and other coverages;
changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies could materially affect our financial statements and how we report those results, and expectations and preliminary analysis relating to how such changes will affect our financial results could prove incorrect;
changes in laws and regulations affecting our businesses, including changes in the enforcement and interpretation of such laws and regulations by applicable governmental and regulatory agencies;
increased competition among financial institutions and nontraditional providers of financial services;
continued consolidation in the financial services industry resulting in the creation of larger financial institutions that have greater resources could change the competitive landscape;
the goodwill we have recorded in connection with acquisitions could become impaired, which may have an adverse impact on our earnings and capital;
our ability to identify and address cyber-security risks, including security breaches, "denial of service attacks," "hacking" and identity theft;
any material failure or interruption of our information and communications systems;
inability to keep pace with technological changes;
our ability to effectively manage credit risk, interest rate risk, market risk, operational risk, legal risk, liquidity risk and regulatory and compliance risk;
failure to maintain effective internal control over financial reporting or disclosure controls and procedures;
the effect of geopolitical instability, including wars, conflicts and terrorist attacks, including the impacts of Russia's invasion of Ukraine;
our profitability measures could be adversely affected if we are unable to effectively manage our capital;
the risks from climate change and its potential to disrupt our business and adversely impact the operations and creditworthiness of our customers;
natural disasters, including earthquakes, tsunamis, flooding, fires and other unexpected events;
the effect of COVID-19 and other infectious illness outbreaks that may arise in the future, which has created significant impacts and uncertainties in U.S. and global markets;
changes in governmental policy and regulation, including measures taken in response to economic, business, political and social conditions, including with regard to COVID-19; and
the effects of any damage to our reputation resulting from developments related to any of the items identified above.

Additional factors that could cause results to differ materially from those described above can be found in Columbia's Annual Report on Form 10-K for the year ended December 31, 2021, which is on file with the SEC and available on Columbia's website, www.columbiabank.com, under the heading "Financial Information" and in other documents Columbia files with the SEC, and in Umpqua's Annual Report on Form 10-K for the year ended December 31, 2021, which is on file with the SEC and available on Umpqua's investor relations website, www.umpquabank.com, under the heading "Financials," and in other documents Umpqua files with the SEC.

We believe the expectations reflected in our forward-looking statements are reasonable, based on information available to us on the date hereof. However, given the described uncertainties and risks, we cannot guarantee our future performance or results of operations and you should not place undue reliance on these forward-looking statements which speak only as of the date hereof. Neither Columbia nor Umpqua assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws.

¹	Operating net interest margin (tax equivalent) is a non-GAAP financial measure. See the section titled "Non-GAAP Financial Measures" in this earnings release for the reconciliation of operating net interest margin (tax equivalent) to net interest margin.
²	Allowance for credit losses to period-end loans, excluding PPP loans is a non-GAAP financial measure. See the section titled "Non-GAAP Financial Measures" in this earnings release for the reconciliation of allowance for credit losses to period-end loans to allowance for credit losses to period-end loans, excluding PPP loans.

Contacts:	Clint Stein,	Aaron James Deer,
	President and	Executive Vice President and
	Chief Executive Officer	Chief Financial Officer

	Investor Relations
	InvestorRelations@columbiabank.com
	253-471-4065
	(COLB-ER)

*CONSOLIDATED BALANCE SHEETS*
*Columbia Banking System, Inc.*
Unaudited				June 30,	March 31,	December 31,
				2022	2022	2021

				*(in thousands)*
ASSETS
Cash and due from banks				$ 239,868	$ 225,141	$ 153,414
Interest-earning deposits with banks				174,328	747,335	671,300
Total cash and cash equivalents				414,196	972,476	824,714
Debt securities available for sale at fair value (amortized cost of $5,647,523, $5,853,160 and $5,898,041, respectively)				5,122,568	5,527,371	5,910,999
Debt securities held to maturity at amortized cost (fair value of $1,912,526, $2,038,037 and $2,122,606, respectively)				2,149,255	2,202,437	2,148,327
Equity securities				13,425	13,425	13,425
Federal Home Loan Bank ("FHLB") stock at cost				10,280	10,280	10,280
Loans held for sale				3,718	4,271	9,774
Loans, net of unearned income				11,322,387	10,759,684	10,641,937
Less: Allowance for credit losses				149,935	146,949	155,578
Loans, net				11,172,452	10,612,735	10,486,359
Interest receivable				57,155	55,940	56,019
Premises and equipment, net				168,586	170,055	172,144
Other real estate owned				33	381	381
Goodwill				823,172	823,172	823,172
Other intangible assets, net				30,140	32,359	34,647
Other assets				599,410	539,056	455,092
Total assets				$ 20,564,390	$ 20,963,958	$ 20,945,333
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing				$ 8,741,488	$ 8,790,138	$ 8,856,714
Interest-bearing				9,215,438	9,509,075	9,153,401
Total deposits				17,956,926	18,299,213	18,010,115
FHLB advances				7,331	7,345	7,359
Securities sold under agreements to repurchase				70,349	44,212	86,013
Subordinated debentures				10,000	10,000	10,000
Junior subordinated debentures				10,310	10,310	10,310
Other liabilities				266,256	232,099	232,794
Total liabilities				18,321,172	18,603,179	18,356,591
Commitments and contingent liabilities
Shareholders' equity:
	June 30,	March 31,	December 31,
	2022	2022	2021

	*(in thousands)*
Preferred stock (no par value)
Authorized shares	2,000	2,000	2,000
Common stock (no par value)
Authorized shares	115,000	115,000	115,000
Issued	80,805	80,828	80,695	1,935,180	1,931,076	1,930,187
Outstanding	78,621	78,644	78,511
Retained earnings				763,487	728,314	694,227
Accumulated other comprehensive income (loss)				(384,615)	(227,777)	35,162
Treasury stock at cost	2,184	2,184	2,184	(70,834)	(70,834)	(70,834)
Total shareholders' equity				2,243,218	2,360,779	2,588,742
Total liabilities and shareholders' equity				$ 20,564,390	$ 20,963,958	$ 20,945,333

*CONSOLIDATED STATEMENTS OF INCOME*
*Columbia Banking System, Inc.*	Three Months Ended			Six Months Ended
Unaudited	June 30,	March 31,	June 30,	June 30,	June 30,
	2022	2022	2021	2022	2021

*Interest Income*	*(in thousands except per share amounts)*
Loans	$ 111,049	$ 107,103	$ 99,712	$ 218,152	$ 200,027
Taxable securities	34,622	37,162	24,750	71,784	47,566
Tax-exempt securities	3,755	3,725	2,826	7,480	5,585
Deposits in banks	887	295	159	1,182	311
Total interest income	150,313	148,285	127,447	298,598	253,489
*Interest Expense*
Deposits	2,464	1,796	1,426	4,260	2,911
FHLB advances and Federal Reserve Bank ("FRB") borrowings	73	71	72	144	144
Subordinated debentures	172	144	468	316	936
Other borrowings	153	74	19	227	42
Total interest expense	2,862	2,085	1,985	4,947	4,033
*Net Interest Income*	147,451	146,200	125,462	293,651	249,456
Provision (recapture) for credit losses	2,100	(7,800)	(5,500)	(5,700)	(6,300)
Net interest income after provision (recapture) for credit losses	145,351	154,000	130,962	299,351	255,756
*Noninterest Income*
Deposit account and treasury management fees	8,212	7,113	6,701	15,325	13,059
Card revenue	5,031	4,967	4,773	9,998	8,506
Financial services and trust revenue	4,192	4,632	4,245	8,824	7,626
Loan revenue	3,881	3,193	4,514	7,074	11,883
Bank owned life insurance	2,024	1,788	1,635	3,812	3,195
Investment securities gains, net	—	—	314	—	314
Other	1,666	2,487	548	4,153	1,313
Total noninterest income	25,006	24,180	22,730	49,186	45,896
*Noninterest Expense*
Compensation and employee benefits	57,386	63,079	53,450	120,465	105,186
Occupancy	9,632	11,009	9,038	20,641	18,044
Data processing and software	9,185	10,324	7,402	19,509	15,853
Legal and professional fees	5,182	6,535	3,264	11,717	6,079
Amortization of intangibles	2,219	2,288	1,852	4,507	3,776
Business and Occupation ("B&O") taxes	1,584	1,589	1,490	3,173	2,749
Advertising and promotion	1,208	726	588	1,934	1,348
Regulatory premiums	1,461	1,536	1,112	2,997	2,217
Net cost of operation of other real estate owned	116	10	111	126	48
Other	7,406	7,957	5,809	15,363	12,375
Total noninterest expense	95,379	105,053	84,116	200,432	167,675
Income before income taxes	74,978	73,127	69,576	148,105	133,977
Provision for income taxes	16,170	15,605	14,537	31,775	27,085
*Net Income*	$ 58,808	$ 57,522	$ 55,039	$ 116,330	$ 106,892
*Earnings per common share*
Basic	$ 0.75	$ 0.74	$ 0.77	$ 1.49	$ 1.50
Diluted	$ 0.75	$ 0.74	$ 0.77	$ 1.49	$ 1.50
Dividends declared per common share	$ 0.30	$ 0.30	$ 0.28	$ 0.60	$ 0.56

Weighted average number of common shares outstanding	78,049	77,925	70,987	77,989	70,924
Weighted average number of diluted common shares outstanding	78,114	78,083	71,164	78,099	71,079

*FINANCIAL STATISTICS*
*Columbia Banking System, Inc.*	Three Months Ended			Six Months Ended
Unaudited	June 30,	March 31,	June 30,	June 30,	June 30,
	2022	2022	2021	2022	2021

Earnings	*(dollars in thousands except per share amounts)*
Net interest income	$ 147,451	$ 146,200	$ 125,462	$ 293,651	$ 249,456
Provision (recapture) for credit losses	$ 2,100	$ (7,800)	$ (5,500)	$ (5,700)	$ (6,300)
Noninterest income	$ 25,006	$ 24,180	$ 22,730	$ 49,186	$ 45,896
Noninterest expense	$ 95,379	$ 105,053	$ 84,116	$ 200,432	$ 167,675
Merger-related expense (included in noninterest expense)	$ 3,901	$ 7,057	$ 510	$ 10,958	$ 510
Net income	$ 58,808	$ 57,522	$ 55,039	$ 116,330	$ 106,892
Per Common Share
Earnings (basic)	$ 0.75	$ 0.74	$ 0.77	$ 1.49	$ 1.50
Earnings (diluted)	$ 0.75	$ 0.74	$ 0.77	$ 1.49	$ 1.50
Book value	$ 28.53	$ 30.02	$ 32.52	$ 28.53	$ 32.52
Tangible book value per common share (1)	$ 17.68	$ 19.14	$ 21.53	$ 17.68	$ 21.53
Averages
Total assets	$ 20,770,202	$ 20,955,666	$ 17,670,480	$ 20,862,421	$ 17,283,232
Interest-earning assets	$ 18,975,517	$ 19,266,644	$ 16,176,328	$ 19,120,276	$ 15,799,940
Loans	$ 10,989,493	$ 10,665,242	$ 9,664,169	$ 10,828,263	$ 9,625,790
Securities, including debt securities, equity securities and FHLB stock	$ 7,491,299	$ 8,010,607	$ 5,914,838	$ 7,749,519	$ 5,574,461
Deposits	$ 18,157,075	$ 18,097,872	$ 15,059,406	$ 18,127,637	$ 14,638,350
Interest-bearing deposits	$ 9,335,004	$ 9,402,040	$ 7,530,372	$ 9,368,336	$ 7,326,965
Interest-bearing liabilities	$ 9,414,361	$ 9,495,579	$ 7,618,629	$ 9,454,745	$ 7,419,157
Noninterest-bearing deposits	$ 8,822,071	$ 8,695,832	$ 7,529,034	$ 8,759,301	$ 7,311,385
Shareholders' equity	$ 2,298,611	$ 2,535,376	$ 2,312,779	$ 2,416,339	$ 2,329,593
Financial Ratios
Return on average assets	1.13 %	1.10 %	1.25 %	1.12 %	1.24 %
Return on average common equity	10.23 %	9.08 %	9.52 %	9.63 %	9.18 %
Return on average tangible common equity (1)	16.78 %	14.14 %	14.84 %	15.37 %	14.28 %
Average equity to average assets	11.07 %	12.10 %	13.09 %	11.58 %	13.48 %
Shareholders' equity to total assets	10.91 %	11.26 %	12.95 %	10.91 %	12.95 %
Tangible common shareholders' equity to tangible assets (1)	7.05 %	7.49 %	8.97 %	7.05 %	8.97 %
Net interest margin (tax equivalent)	3.16 %	3.12 %	3.16 %	3.14 %	3.23 %
Efficiency ratio (tax equivalent) (2)	54.48 %	60.75 %	55.86 %	57.59 %	55.88 %
Operating efficiency ratio (tax equivalent) (1)	50.38 %	55.42 %	54.80 %	52.87 %	55.05 %
Noninterest expense ratio	1.84 %	2.01 %	1.90 %	1.92 %	1.94 %
Core noninterest expense ratio (1)	1.76 %	1.87 %	1.89 %	1.82 %	1.93 %

	June 30,	March 31,	December 31,
Period-end	2022	2022	2021
Total assets	$ 20,564,390	$ 20,963,958	$ 20,945,333
Loans, net of unearned income	$ 11,322,387	$ 10,759,684	$ 10,641,937
Allowance for credit losses	$ 149,935	$ 146,949	$ 155,578
Securities, including debt securities, equity securities and FHLB stock	$ 7,295,528	$ 7,753,513	$ 8,083,031
Deposits	$ 17,956,926	$ 18,299,213	$ 18,010,115
Shareholders' equity	$ 2,243,218	$ 2,360,779	$ 2,588,742
Nonperforming assets
Nonaccrual loans	$ 16,998	$ 17,441	$ 23,041
Other real estate owned ("OREO") and other personal property owned ("OPPO")	33	381	381
Total nonperforming assets	$ 17,031	$ 17,822	$ 23,422

Nonperforming loans to period-end loans	0.15 %	0.16 %	0.22 %
Nonperforming assets to period-end assets	0.08 %	0.09 %	0.11 %
Allowance for credit losses to period-end loans	1.32 %	1.37 %	1.46 %
Net loan charge-offs (recoveries) (for the three months ended)	$ (886)	$ 829	$ 923

__________

(1)	This is a non-GAAP measure. See section titled "Non-GAAP Financial Measures" on the last three pages of this earnings release for a reconciliation to the most comparable GAAP measure.
(2)	Noninterest expense divided by the sum of net interest income on a tax equivalent basis and noninterest income on a tax equivalent basis.

*QUARTERLY FINANCIAL STATISTICS*
*Columbia Banking System, Inc.*	Three Months Ended
Unaudited	June 30,	March 31,	December 31,	September 30,	June 30,
	2022	2022	2021	2021	2021

Earnings	*(dollars in thousands except per share amounts)*
Net interest income	$ 147,451	$ 146,200	$ 145,523	$ 132,540	$ 125,462
Provision (recapture) for credit losses	$ 2,100	$ (7,800)	$ 11,100	$ —	$ (5,500)
Noninterest income	$ 25,006	$ 24,180	$ 24,240	$ 23,958	$ 22,730
Noninterest expense	$ 95,379	$ 105,053	$ 102,622	$ 90,007	$ 84,116
Merger-related expense (included in noninterest expense)	$ 3,901	$ 7,057	$ 11,812	$ 2,192	$ 510
Net income	$ 58,808	$ 57,522	$ 42,911	$ 53,017	$ 55,039
Per Common Share
Earnings (basic)	$ 0.75	$ 0.74	$ 0.55	$ 0.75	$ 0.77
Earnings (diluted)	$ 0.75	$ 0.74	$ 0.55	$ 0.74	$ 0.77
Book value	$ 28.53	$ 30.02	$ 32.97	$ 32.38	$ 32.52
Averages
Total assets	$ 20,770,202	$ 20,955,666	$ 20,857,983	$ 18,330,109	$ 17,670,480
Interest-earning assets	$ 18,975,517	$ 19,266,644	$ 19,186,398	$ 16,820,771	$ 16,176,328
Loans	$ 10,989,493	$ 10,665,242	$ 10,545,172	$ 9,526,052	$ 9,664,169
Securities, including debt securities, equity securities and FHLB stock	$ 7,491,299	$ 8,010,607	$ 7,693,659	$ 6,545,134	$ 5,914,838
Deposits	$ 18,157,075	$ 18,097,872	$ 17,935,311	$ 15,642,250	$ 15,059,406
Interest-bearing deposits	$ 9,335,004	$ 9,402,040	$ 9,147,184	$ 7,821,949	$ 7,530,372
Interest-bearing liabilities	$ 9,414,361	$ 9,495,579	$ 9,255,214	$ 7,920,146	$ 7,618,629
Noninterest-bearing deposits	$ 8,822,071	$ 8,695,832	$ 8,788,127	$ 7,820,301	$ 7,529,034
Shareholders' equity	$ 2,298,611	$ 2,535,376	$ 2,584,110	$ 2,364,149	$ 2,312,779
Financial Ratios
Return on average assets	1.13 %	1.10 %	0.82 %	1.16 %	1.25 %
Return on average common equity	10.23 %	9.08 %	6.64 %	8.97 %	9.52 %
Average equity to average assets	11.07 %	12.10 %	12.39 %	12.90 %	13.09 %
Shareholders' equity to total assets	10.91 %	11.26 %	12.36 %	12.49 %	12.95 %
Net interest margin (tax equivalent)	3.16 %	3.12 %	3.05 %	3.17 %	3.16 %
Period-end
Total assets	$ 20,564,390	$ 20,963,958	$ 20,945,333	$ 18,602,462	$ 18,013,477
Loans, net of unearned income	$ 11,322,387	$ 10,759,684	$ 10,641,937	$ 9,521,385	$ 9,693,116
Allowance for credit losses	$ 149,935	$ 146,949	$ 155,578	$ 142,785	$ 142,988
Securities, including debt securities, equity securities and FHLB stock	$ 7,295,528	$ 7,753,513	$ 8,083,031	$ 6,930,782	$ 6,238,486
Deposits	$ 17,956,926	$ 18,299,213	$ 18,010,115	$ 15,953,399	$ 15,345,432
Shareholders' equity	$ 2,243,218	$ 2,360,779	$ 2,588,742	$ 2,323,267	$ 2,333,246
Goodwill	$ 823,172	$ 823,172	$ 823,172	$ 765,842	$ 765,842
Other intangible assets, net	$ 30,140	$ 32,359	$ 34,647	$ 21,123	$ 22,958
Nonperforming assets
Nonaccrual loans	$ 16,998	$ 17,441	$ 23,041	$ 24,176	$ 24,021
OREO and OPPO	33	381	381	381	381
Total nonperforming assets	$ 17,031	$ 17,822	$ 23,422	$ 24,557	$ 24,402

Nonperforming loans to period-end loans	0.15 %	0.16 %	0.22 %	0.25 %	0.25 %
Nonperforming assets to period-end assets	0.08 %	0.09 %	0.11 %	0.13 %	0.14 %
Allowance for credit losses to period-end loans	1.32 %	1.37 %	1.46 %	1.50 %	1.48 %
Net loan charge-offs (recoveries)	$ (886)	$ 829	$ 923	$ 203	$ (194)

*LOAN PORTFOLIO COMPOSITION*
*Columbia Banking System, Inc.*
Unaudited	June 30,	March 31,	December 31,	September 30,	June 30,
	2022	2022	2021	2021	2021

Loan Portfolio Composition - Dollars	*(dollars in thousands)*
Commercial loans:
Commercial real estate	$ 5,251,100	$ 5,047,472	$ 4,981,263	$ 4,088,484	$ 4,101,071
Commercial business	3,646,956	3,492,307	3,423,268	3,436,351	3,738,288
Agriculture	853,099	765,319	795,715	815,985	797,580
Construction	482,211	409,242	384,755	326,569	300,303
Consumer loans:
One-to-four family residential real estate	1,042,190	1,003,157	1,013,908	823,877	724,151
Other consumer	46,831	42,187	43,028	30,119	31,723
Total loans	11,322,387	10,759,684	10,641,937	9,521,385	9,693,116
Less: Allowance for credit losses	(149,935)	(146,949)	(155,578)	(142,785)	(142,988)
Total loans, net	$ 11,172,452	$ 10,612,735	$ 10,486,359	$ 9,378,600	$ 9,550,128
Loans held for sale	$ 3,718	$ 4,271	$ 9,774	$ 11,355	$ 13,179

	June 30,	March 31,	December 31,	September 30,	June 30,
Loan Portfolio Composition - Percentages	2022	2022	2021	2021	2021
Commercial loans:
Commercial real estate	46.4 %	46.9 %	46.8 %	42.9 %	42.3 %
Commercial business	32.2 %	32.5 %	32.2 %	36.1 %	38.6 %
Agriculture	7.5 %	7.1 %	7.5 %	8.6 %	8.2 %
Construction	4.3 %	3.8 %	3.6 %	3.4 %	3.1 %
Consumer loans:
One-to-four family residential real estate	9.2 %	9.3 %	9.5 %	8.7 %	7.5 %
Other consumer	0.4 %	0.4 %	0.4 %	0.3 %	0.3 %
Total loans	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %

*DEPOSIT COMPOSITION*
*Columbia Banking System, Inc.*
Unaudited
	June 30,	March 31,	December 31,	September 30,	June 30,
	2022	2022	2021	2021	2021

Deposit Composition - Dollars	*(dollars in thousands)*
Demand and other noninterest-bearing	$ 8,741,488	$ 8,790,138	$ 8,856,714	$ 7,971,680	$ 7,703,325
Money market	3,402,555	3,501,723	3,525,299	3,076,833	2,950,063
Interest-bearing demand	2,104,118	2,103,053	1,999,407	1,646,816	1,525,360
Savings	1,646,363	1,637,451	1,617,546	1,416,376	1,388,241
Interest-bearing public funds, other than certificates of deposit	737,297	775,048	779,146	740,281	720,553
Certificates of deposit, less than $250,000	232,063	239,863	249,120	190,402	193,080
Certificates of deposit, $250,000 or more	138,945	145,372	160,490	108,483	105,393
Certificates of deposit insured by the CD Option of IntraFi Network Deposits	29,178	32,608	35,611	26,835	24,409
Brokered certificates of deposit	—	—	—	5,000	5,000
Reciprocal money market accounts	924,552	1,073,405	786,046	770,693	730,008
Subtotal	17,956,559	18,298,661	18,009,379	15,953,399	15,345,432
Valuation adjustment resulting from acquisition accounting	367	552	736	—	—
Total deposits	$ 17,956,926	$ 18,299,213	$ 18,010,115	$ 15,953,399	$ 15,345,432

	June 30,	March 31,	December 31,	September 30,	June 30,
Deposit Composition - Percentages	2022	2022	2021	2021	2021
Demand and other noninterest-bearing	48.7 %	48.1 %	49.1 %	50.0 %	50.2 %
Money market	18.9 %	19.1 %	19.6 %	19.3 %	19.2 %
Interest-bearing demand	11.7 %	11.5 %	11.1 %	10.3 %	9.9 %
Savings	9.2 %	8.9 %	9.0 %	8.9 %	9.0 %
Interest-bearing public funds, other than certificates of deposit	4.1 %	4.2 %	4.3 %	4.6 %	4.7 %
Certificates of deposit, less than $250,000	1.3 %	1.3 %	1.4 %	1.2 %	1.3 %
Certificates of deposit, $250,000 or more	0.8 %	0.8 %	0.9 %	0.7 %	0.7 %
Certificates of deposit insured by the CD Option of IntraFi Network Deposits	0.2 %	0.2 %	0.2 %	0.2 %	0.2 %
Reciprocal money market accounts	5.1 %	5.9 %	4.4 %	4.8 %	4.8 %
Total	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %

*AVERAGE BALANCES AND RATES*
*Columbia Banking System, Inc.*
Unaudited
	Three Months Ended			Three Months Ended
	June 30, 2022			June 30, 2021
	Average Balances	Interest Earned / Paid	Average Rate	Average Balances	Interest Earned / Paid	Average Rate

	*(dollars in thousands)*
ASSETS
Loans, net (1)(2)	$ 10,989,493	$ 112,142	4.09 %	$ 9,664,169	$ 100,908	4.19 %
Taxable securities	6,761,383	34,622	2.05 %	5,291,380	24,750	1.88 %
Tax exempt securities (2)	729,916	4,753	2.61 %	623,458	3,577	2.30 %
Interest-earning deposits with banks	494,725	887	0.72 %	597,321	159	0.11 %
Total interest-earning assets	18,975,517	152,404	3.22 %	16,176,328	129,394	3.21 %
Other earning assets	305,775			244,181
Noninterest-earning assets	1,488,910			1,249,971
Total assets	$ 20,770,202			$ 17,670,480
LIABILITIES AND SHAREHOLDERS' EQUITY
Money market accounts	$ 4,406,022	$ 1,000	0.09 %	$ 3,632,383	$ 692	0.08 %
Interest-bearing demand	2,123,005	411	0.08 %	1,546,247	286	0.07 %
Savings accounts	1,638,334	78	0.02 %	1,318,837	45	0.01 %
Interest-bearing public funds, other than certificates of deposit	756,528	923	0.49 %	702,967	245	0.14 %
Certificates of deposit	411,115	52	0.05 %	329,938	158	0.19 %
Total interest-bearing deposits	9,335,004	2,464	0.11 %	7,530,372	1,426	0.08 %
FHLB advances and FRB borrowings	7,340	73	3.99 %	7,395	72	3.91 %
Subordinated debentures	10,000	172	6.90 %	35,030	468	5.36 %
Other borrowings and interest-bearing liabilities	62,017	153	0.99 %	45,832	19	0.17 %
Total interest-bearing liabilities	9,414,361	2,862	0.12 %	7,618,629	1,985	0.10 %
Noninterest-bearing deposits	8,822,071			7,529,034
Other noninterest-bearing liabilities	235,159			210,038
Shareholders' equity	2,298,611			2,312,779
Total liabilities & shareholders' equity	$ 20,770,202			$ 17,670,480
Net interest income (tax equivalent)		$ 149,542			$ 127,409
Net interest margin (tax equivalent)			3.16 %			3.16 %

__________

(1)

Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $2.8 million and $6.4 million for the three months ended June 30, 2022 and 2021, respectively. The net incremental amortization on acquired loans was $2.1 million for the three months ended June 30, 2022 compared to net incremental accretion of $856 thousand for the three months ended June 30, 2021.

(2)

Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $1.1 million and $1.2 million for the three months ended June 30, 2022 and 2021, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $998 thousand and $751 thousand for the three months ended June 30, 2022 and 2021, respectively.

*AVERAGE BALANCES AND RATES*
*Columbia Banking System, Inc.*
Unaudited
	Three Months Ended			Three Months Ended
	June 30, 2022			March 31, 2022
	Average Balances	Interest Earned / Paid	Average Rate	Average Balances	Interest Earned / Paid	Average Rate

	*(dollars in thousands)*
ASSETS
Loans, net (1)(2)	$ 10,989,493	$ 112,142	4.09 %	$ 10,665,242	$ 108,181	4.11 %
Taxable securities	6,761,383	34,622	2.05 %	7,217,844	37,162	2.09 %
Tax exempt securities (2)	729,916	4,753	2.61 %	792,763	4,715	2.41 %
Interest-earning deposits with banks	494,725	887	0.72 %	590,795	295	0.20 %
Total interest-earning assets	18,975,517	152,404	3.22 %	19,266,644	150,353	3.16 %
Other earning assets	305,775			302,865
Noninterest-earning assets	1,488,910			1,386,157
Total assets	$ 20,770,202			$ 20,955,666
LIABILITIES AND SHAREHOLDERS' EQUITY
Money market accounts	$ 4,406,022	$ 1,000	0.09 %	$ 4,530,698	$ 960	0.09 %
Interest-bearing demand	2,123,005	411	0.08 %	2,024,757	374	0.07 %
Savings accounts	1,638,334	78	0.02 %	1,632,369	77	0.02 %
Interest-bearing public funds, other than certificates of deposit	756,528	923	0.49 %	776,965	288	0.15 %
Certificates of deposit	411,115	52	0.05 %	437,251	97	0.09 %
Total interest-bearing deposits	9,335,004	2,464	0.11 %	9,402,040	1,796	0.08 %
FHLB advances and FRB borrowings	7,340	73	3.99 %	7,354	71	3.92 %
Subordinated debentures	10,000	172	6.90 %	10,000	144	5.84 %
Other borrowings and interest-bearing liabilities	62,017	153	0.99 %	76,185	74	0.39 %
Total interest-bearing liabilities	9,414,361	2,862	0.12 %	9,495,579	2,085	0.09 %
Noninterest-bearing deposits	8,822,071			8,695,832
Other noninterest-bearing liabilities	235,159			228,879
Shareholders' equity	2,298,611			2,535,376
Total liabilities & shareholders' equity	$ 20,770,202			$ 20,955,666
Net interest income (tax equivalent)		$ 149,542			$ 148,268
Net interest margin (tax equivalent)			3.16 %			3.12 %

__________

(1)

Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $2.8 million and $4.2 million for the three months ended June 30, 2022 and March 31, 2022, respectively. The net incremental amortization on acquired loans was $2.1 million for the three months ended June 30, 2022 compared to net incremental amortization of $350 thousand for the three months ended March 31, 2022.

(2)

Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $1.1 million for both the three months ended June 30, 2022 and March 31, 2022. The tax equivalent yield adjustment to interest earned on tax exempt securities was $998 thousand and $990 thousand for the three months ended June 30, 2022 and March 31, 2022, respectively.

*AVERAGE BALANCES AND RATES*
*Columbia Banking System, Inc.*
Unaudited
	Six Months Ended			Six Months Ended
	June 30, 2022			June 30, 2021
	Average Balances	Interest Earned / Paid	Average Rate	Average Balances	Interest Earned / Paid	Average Rate

	*(dollars in thousands)*
ASSETS
Loans, net (1)(2)	$ 10,828,263	$ 220,323	4.10 %	$ 9,625,790	$ 202,385	4.24 %
Taxable securities	6,988,353	71,784	2.07 %	4,959,620	47,566	1.93 %
Tax exempt securities (2)	761,166	9,468	2.51 %	614,841	7,069	2.32 %
Interest-earning deposits with banks	542,494	1,182	0.44 %	599,689	311	0.10 %
Total interest-earning assets	19,120,276	$ 302,757	3.19 %	15,799,940	$ 257,331	3.28 %
Other earning assets	304,328			243,437
Noninterest-earning assets	1,437,817			1,239,855
Total assets	$ 20,862,421			$ 17,283,232
LIABILITIES AND SHAREHOLDERS' EQUITY
Money market accounts	$ 4,468,015	$ 1,960	0.09 %	$ 3,542,068	$ 1,391	0.08 %
Interest-bearing demand	2,074,152	785	0.08 %	1,498,211	551	0.07 %
Savings accounts	1,635,368	155	0.02 %	1,270,403	85	0.01 %
Interest-bearing public funds, other than certificates of deposit	766,690	1,211	0.32 %	683,172	521	0.15 %
Certificates of deposit	424,111	149	0.07 %	333,111	363	0.22 %
Total interest-bearing deposits	9,368,336	4,260	0.09 %	7,326,965	2,911	0.08 %
FHLB advances and FRB borrowings	7,347	144	3.95 %	7,401	144	3.92 %
Subordinated debentures	10,000	316	6.37 %	35,051	936	5.39 %
Other borrowings and interest-bearing liabilities	69,062	227	0.66 %	49,740	42	0.17 %
Total interest-bearing liabilities	9,454,745	$ 4,947	0.11 %	7,419,157	$ 4,033	0.11 %
Noninterest-bearing deposits	8,759,301			7,311,385
Other noninterest-bearing liabilities	232,036			223,097
Shareholders' equity	2,416,339			2,329,593
Total liabilities & shareholders' equity	$ 20,862,421			$ 17,283,232
Net interest income (tax equivalent)		$ 297,810			$ 253,298
Net interest margin (tax equivalent)			3.14 %			3.23 %

__________

(1)

Nonaccrual loans have been included in the table as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $7.0 million and $14.7 million for the six months ended June 30, 2022 and 2021, respectively. The net incremental amortization on acquired loans was $2.4 million for the six months ended June 30, 2022 compared to net incremental accretion of $1.9 million for the six months ended June 30, 2021.

(2)

Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $2.2 million and $2.4 million for the six months ended June 30, 2022 and 2021, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $2.0 million and $1.5 million for the six months ended June 30, 2022 and 2021, respectively.

Non-GAAP Financial Measures

The Company considers its operating net interest margin (tax equivalent) and operating efficiency ratios to be useful measurements as they more closely reflect the ongoing operating performance of the Company. Despite the usefulness of the operating net interest margin (tax equivalent) and operating efficiency ratio to the Company, there are no standardized definitions for these metrics. As a result, the Company's calculations may not be comparable with those of other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following tables reconcile the Company's calculation of the operating net interest margin (tax equivalent) and operating efficiency ratio:

	Three Months Ended			Six Months Ended
	June 30,	March 31,	June 30,	June 30,	June 30,
	2022	2022	2021	2022	2021

Operating net interest margin non-GAAP reconciliation:	*(dollars in thousands)*
Net interest income (tax equivalent) (1)	$ 149,542	$ 148,268	$ 127,409	$ 297,810	$ 253,298
Adjustments to arrive at operating net interest income (tax equivalent):
Premium amortization (discount accretion) on acquired loans	2,053	350	(856)	2,403	(1,911)
Premium amortization on acquired securities	1,132	1,031	532	2,163	1,052
Operating net interest income (tax equivalent) (1)	$ 152,727	$ 149,649	$ 127,085	$ 302,376	$ 252,439

Average interest earning assets	$ 18,975,517	$ 19,266,644	$ 16,176,328	$ 19,120,276	$ 15,799,940
Net interest margin (tax equivalent) (1)	3.16 %	3.12 %	3.16 %	3.14 %	3.23 %
Operating net interest margin (tax equivalent) (1)	3.23 %	3.15 %	3.15 %	3.19 %	3.22 %

	Three Months Ended			Six Months Ended
	June 30,	March 31,	June 30,	June 30,	June 30,
	2022	2022	2021	2022	2021

Operating efficiency ratio non-GAAP reconciliation:	*(dollars in thousands)*
Noninterest expense (numerator A)	$ 95,379	$ 105,053	$ 84,116	$ 200,432	$ 167,675
Adjustments to arrive at operating noninterest expense:
Merger-related expenses	(3,901)	(7,057)	(510)	(10,958)	(510)
Net benefit (cost) of operation of OREO and OPPO	(116)	(10)	(111)	(126)	(38)
Loss on asset disposals	(11)	(29)	(2)	(40)	(8)
B&O taxes	(1,584)	(1,589)	(1,490)	(3,173)	(2,749)
Operating noninterest expense (numerator B)	$ 89,767	$ 96,368	$ 82,003	$ 186,135	$ 164,370

Net interest income (tax equivalent) (1)	$ 149,542	$ 148,268	$ 127,409	$ 297,810	$ 253,298
Noninterest income	25,006	24,180	22,730	49,186	45,896
Bank owned life insurance tax equivalent adjustment	538	475	434	1,013	849
Total revenue (tax equivalent) (denominator A)	$ 175,086	$ 172,923	$ 150,573	$ 348,009	$ 300,043

Operating net interest income (tax equivalent) (1)	$ 152,727	$ 149,649	$ 127,085	$ 302,376	$ 252,439
Adjustments to arrive at operating noninterest income (tax equivalent):
Investment securities gain, net	—	—	(314)	—	(314)
Gain on asset disposals	(97)	(414)	(287)	(511)	(287)
Operating noninterest income (tax equivalent)	25,447	24,241	22,563	49,688	46,144
Total operating revenue (tax equivalent) (denominator B)	$ 178,174	$ 173,890	$ 149,648	$ 352,064	$ 298,583
Efficiency ratio (tax equivalent) (numerator A/denominator A)	54.48 %	60.75 %	55.86 %	57.59 %	55.88 %
Operating efficiency ratio (tax equivalent) (numerator B/denominator B)	50.38 %	55.42 %	54.80 %	52.87 %	55.05 %

__________

(1)	Tax-exempt interest income has been adjusted to a tax equivalent basis. The amount of such adjustment was an addition to net interest income of $2.1 million for both the three months ended June 30, 2022 and March 31, 2022, respectively, and $1.9 million for the three months ended June 30, 2021.

Non-GAAP Financial Measures - Continued

The Company also considers its core noninterest expense ratio to be a useful measurement as it more closely reflects the ongoing operating performance of the Company. Despite the usefulness of the core noninterest expense ratio to the Company, there is not a standardized definition for it, as a result, the Company's calculations may not be comparable with those of other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following table reconciles the Company's calculation of the core noninterest expense ratio:

	Three Months Ended			Six Months Ended
	June 30,	March 31,	June 30,	June 30,	June 30,
	2022	2022	2021	2022	2021

Core noninterest expense ratio non-GAAP reconciliation:	*(dollars in thousands)*
Noninterest expense (numerator A)	$ 95,379	$ 105,053	$ 84,116	$ 200,432	$ 167,675
Adjustments to arrive at core noninterest expense:
Merger-related expenses	(3,901)	(7,057)	(510)	(10,958)	(510)
Core noninterest expense (numerator B)	$ 91,478	$ 97,996	$ 83,606	$ 189,474	$ 167,165

Average assets (denominator)	$ 20,770,202	$ 20,955,666	$ 17,670,480	$ 20,862,421	$ 17,283,232
Noninterest expense ratio (numerator A/denominator) (1)	1.84 %	2.01 %	1.90 %	1.92 %	1.94 %
Core noninterest expense ratio (numerator B/denominator)	1.76 %	1.87 %	1.89 %	1.82 %	1.93 %

__________

(1)	For the purpose of this ratio, interim noninterest expense has been annualized.
(2)	For the purpose of this ratio, interim core noninterest expense has been annualized.

The Company considers its pre-tax, pre-provision income to be a useful measurement in evaluating the earnings of the Company as it provides a method to assess income. Despite the usefulness of this measure to the Company, there is not a standardized definition for it. As a result, the Company's calculation may not always be comparable with those of other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following table reconciles the Company's calculation of the pre-tax, pre-provision income:

	Three Months Ended			Six Months Ended
	June 30,	March 31,	June 30,	June 30,	June 30,
	2022	2022	2021	2022	2021

Pre-tax, pre-provision income:	*(in thousands)*
Income before income taxes	$ 74,978	$ 73,127	$ 69,576	$ 148,105	$ 133,977
Provision (recapture) for credit losses	2,100	(7,800)	(5,500)	(5,700)	(6,300)
Provision (recapture) for unfunded commitments	—	500	200	500	1,700
B&O taxes	1,584	1,589	1,490	3,173	2,749
Pre-tax, pre-provision income	$ 78,662	$ 67,416	$ 65,766	$ 146,078	$ 132,126

Non-GAAP Financial Measures - Continued

The Company considers its tangible common equity ratio and tangible book value per share ratio to be useful measurements in evaluating the capital adequacy of the Company as they provide a method to assess management's success in utilizing our tangible capital. Despite the usefulness of these ratios to the Company, there is not a standardized definition for these metrics. As a result, the Company's calculation may not always be comparable with those of other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following table reconciles the Company's calculation of the tangible common equity ratio and tangible book value per share ratio:

	June 30,	March 31,	June 30,
	2022	2022	2021

Tangible common equity ratio and tangible book value per common share non-GAAP reconciliation:	*(dollars in thousands except per share amounts)*
Shareholders' equity (numerator A)	$ 2,243,218	$ 2,360,779	$ 2,333,246
Adjustments to arrive at tangible common equity:
Goodwill	(823,172)	(823,172)	(765,842)
Other intangible assets, net	(30,140)	(32,359)	(22,958)
Tangible common equity (numerator B)	$ 1,389,906	$ 1,505,248	$ 1,544,446

Total assets (denominator A)	$ 20,564,390	$ 20,963,958	$ 18,013,477
Adjustments to arrive at tangible assets:
Goodwill	(823,172)	(823,172)	(765,842)
Other intangible assets, net	(30,140)	(32,359)	(22,958)
Tangible assets (denominator B)	$ 19,711,078	$ 20,108,427	$ 17,224,677

Shareholders' equity to total assets (numerator A/denominator A)	10.91 %	11.26 %	12.95 %
Tangible common shareholders' equity to tangible assets (numerator B/denominator B)	7.05 %	7.49 %	8.97 %
Common shares outstanding (denominator C)	78,621	78,644	71,742
Book value per common share (numerator A/denominator C)	$ 28.53	$ 30.02	$ 32.52
Tangible book value per common share (numerator B/denominator C)	$ 17.68	$ 19.14	$ 21.53

The Company considers its ratio of allowance for credit losses to period-end loans, excluding PPP loans, to be a useful measurement in evaluating the adequacy of the amount of allowance for credit losses to loans of the Company, as PPP loans are guaranteed by the U.S. Small Business Administration and thus do not require the same amount of reserve for credit losses as do other loans. Despite the usefulness of this ratio to the Company, there is not a standardized definition for it. As a result, the Company's calculation may not always be comparable with those of other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following table reconciles the Company's calculation of the allowance for credit losses to period-end loans, excluding PPP loans:

	June 30,	March 31,	June 30,
	2022	2022	2021

Allowance coverage ratio non-GAAP reconciliation:	*(dollars in thousands)*
Allowance for credit losses ("ACL") (numerator)	$ 149,935	$ 146,949	$ 142,988

Total loans (denominator A)	11,322,387	10,759,684	9,693,116
Less: PPP loans (0% Allowance)	32,395	83,196	691,949
Total loans, net of PPP loans (denominator B)	$ 11,289,992	$ 10,676,488	$ 9,001,167

ACL to period end loans (numerator / denominator A)	1.32 %	1.37 %	1.48 %
ACL to period end loans, excluding PPP loans (numerator / denominator B)	1.33 %	1.38 %	1.59 %

Non-GAAP Financial Measures - Continued

The Company also considers its return on average tangible common equity ratio to be a useful measurement as it evaluates the Company's ongoing ability to generate returns for its common shareholders. By removing the impact of intangible assets and their related amortization and tax effects, the performance of the business can be evaluated, whether acquired or developed internally. Despite the usefulness of this ratio to the Company, there is not a standardized definition for it. As a result, the Company's calculation may not always be comparable with those of other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following table reconciles the Company's calculation of the return on average tangible common shareholders' equity ratio:

	Three Months Ended			Six Months Ended
	June 30,	March 31,	June 30,	June 30,	June 30,
	2022	2022	2021	2022	2021

Return on average tangible common equity non-GAAP reconciliation:	*(dollars in thousands)*
Net income (numerator A)	$ 58,808	$ 57,522	$ 55,039	$ 116,330	$ 106,892
Adjustments to arrive at tangible income applicable to common shareholders:
Amortization of intangibles	2,219	2,288	1,852	4,507	3,776
Tax effect on intangible amortization	(466)	(481)	(389)	(947)	(793)
Tangible income applicable to common shareholders (numerator B)	$ 60,561	$ 59,329	$ 56,502	119,890	$ 109,875

Average shareholders' equity (denominator A)	$ 2,298,611	$ 2,535,376	$ 2,312,779	2,416,339	$ 2,329,593
Adjustments to arrive at average tangible common equity:
Average intangibles	(854,743)	(857,031)	(790,015)	(855,881)	(790,859)
Average tangible common equity (denominator B)	$ 1,443,868	$ 1,678,345	$ 1,522,764	$ 1,560,458	$ 1,538,734

Return on average common equity (numerator A/denominator A) (1)	10.23 %	9.08 %	9.52 %	9.63 %	9.18 %
Return on average tangible common equity (numerator B/denominator B) (2)	16.78 %	14.14 %	14.84 %	15.37 %	14.28 %

__________

(1)	For the purpose of this ratio, interim net income has been annualized.
(2)	For the purpose of this ratio, interim tangible income applicable to common shareholders has been annualized.

View original content to download multimedia:https://www.prnewswire.com/news-releases/columbia-banking-system-announces-second-quarter-2022-results-and-quarterly-cash-dividend-301590763.html

SOURCE Columbia Banking System, Inc.

Related Topics:federal reserve pandemic Recession COVID-19 aggregated Economics

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Government

Walmart has really good news for shoppers (and Joe Biden)

The giant retailer joins Costco in making a statement that has political overtones, even if that’s not the intent.

Published

27 mins ago

March 9, 2024

Daniel Kline

As we head toward a presidential election, the presumed candidates for both parties will look for issues that rally undecided voters.

The economy will be a key issue, with Democrats pointing to job creation and lowering prices while Republicans will cite the layoffs at Big Tech companies, high housing prices, and of course, sticky inflation.

The covid pandemic created a perfect storm for inflation and higher prices. It became harder to get many items because people getting sick slowed down, or even stopped, production at some factories.

It was also a period where demand increased while shipping, trucking and delivery systems were all strained or thrown out of whack. The combination led to product shortages and higher prices.

You might have gone to the grocery store and not been able to buy your favorite paper towel brand or find toilet paper at all. That happened partly because of the supply chain and partly due to increased demand, but at the end of the day, it led to higher prices, which some consumers blamed on President Joe Biden's administration.

Biden, of course, was blamed for the price increases, but as inflation has dropped and grocery prices have fallen, few companies have been up front about it. That's probably not a political choice in most cases. Instead, some companies have chosen to lower prices more slowly than they raised them.

However, two major retailers, Walmart (WMT) and Costco, have been very honest about inflation. Walmart Chief Executive Doug McMillon's most recent comments validate what Biden's administration has been saying about the state of the economy. And they contrast with the economic picture being painted by Republicans who support their presumptive nominee, Donald Trump.

Walmart has seen inflation drop in many key areas.
Image source&colon; Joe Raedle/Getty Images

Walmart sees lower prices

McMillon does not talk about lower prices to make a political statement. He's communicating with customers and potential customers through the analysts who cover the company's quarterly-earnings calls.

During Walmart's fiscal-fourth-quarter-earnings call, McMillon was clear that prices are going down.

"I'm excited about the omnichannel net promoter score trends the team is driving. Across countries, we continue to see a customer that's resilient but looking for value. As always, we're working hard to deliver that for them, including through our rollbacks on food pricing in Walmart U.S. Those were up significantly in Q4 versus last year, following a big increase in Q3," he said.

He was specific about where the chain has seen prices go down.

"Our general merchandise prices are lower than a year ago and even two years ago in some categories, which means our customers are finding value in areas like apparel and hard lines," he said. "In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries."

McMillon said that in other areas prices were still up but have been falling.

"Dry grocery and consumables categories like paper goods and cleaning supplies are up mid-single digits versus last year and high teens versus two years ago. Private-brand penetration is up in many of the countries where we operate, including the United States," he said.

Costco sees almost no inflation impact

McMillon avoided the word inflation in his comments. Costco (COST) Chief Financial Officer Richard Galanti, who steps down on March 15, has been very transparent on the topic.

The CFO commented on inflation during his company's fiscal-first-quarter-earnings call.

"Most recently, in the last fourth-quarter discussion, we had estimated that year-over-year inflation was in the 1% to 2% range. Our estimate for the quarter just ended, that inflation was in the 0% to 1% range," he said.

Galanti made clear that inflation (and even deflation) varied by category.

"A bigger deflation in some big and bulky items like furniture sets due to lower freight costs year over year, as well as on things like domestics, bulky lower-priced items, again, where the freight cost is significant. Some deflationary items were as much as 20% to 30% and, again, mostly freight-related," he added.

bankruptcy pandemic trump

International

When Military Rule Supplants Democracy

Authored by Robert Malone via The Brownstone Institute,

If you wish to understand how democracy ended…

Published

10 hours ago

March 9, 2024

Tyler Durden

When Military Rule Supplants Democracy

Authored by Robert Malone via The Brownstone Institute,

If you wish to understand how democracy ended in the United States and the European Union, please watch this interview with Tucker Carlson and Mike Benz. It is full of the most stunning revelations that I have heard in a very long time.

The national security state is the main driver of censorship and election interference in the United States.

“What I’m describing is military rule,” says Mike Benz.

“It’s the inversion of democracy.”

Please watch below...

Ep. 75 The national security state is the main driver of censorship and election interference in the United States. "What I’m describing is military rule," says Mike Benz. "It’s the inversion of democracy." pic.twitter.com/hDTEjAf89T
— Tucker Carlson (@TuckerCarlson) February 16, 2024

I have also included a transcript of the above interview. In the interests of time – this is AI generated. So, there still could be little glitches – I will continue to clean up the text over the next day or two.

Note: Tucker (who I consider a friend) has given me permission to directly upload the video above and transcript below – he wrote this morning in response to my request:

Oh gosh, I hope you will. It’s important.

Honestly, it is critical that this video be seen by as many people as possible. So, please share this video interview and transcript.

Five points to consider that you might overlook;

First– the Aspen Institute planning which is described herein reminds me of the Event 201 planning for COVID.

Second– reading the comments to Tucker’s original post on “X” with this interview, I am struck by the parallels between the efforts to delegitimize me and the new efforts to delegitimize Mike Benz. People should be aware that this type of delegitimization tactic is a common response by those behind the propaganda to anyone who reveals their tactics and strategies. The core of this tactic is to cast doubt about whether the person in question is unreliable or a sort of double agent (controlled opposition).

Third– Mike Benz mostly focuses on the censorship aspect of all of this, and does not really dive deeply into the active propaganda promotion (PsyWar) aspect.

Fourth– Mike speaks of the influence mapping and natural language processing tools being deployed, but does not describe the “Behavior Matrix” tool kit involving extraction and mapping of emotion. If you want to dive in a bit further into this, I covered this latter part October 2022 in a substack essay titled “Twitter is a weapon, not a business”.

Fifth– what Mike Benz is describing is functionally a silent coup by the US Military and the Deep State. And yes, Barack Obama’s fingerprints are all over this.

Yet another “conspiracy theory” is now being validated.

Transcript of the video:

Tucker Carlson:

The defining fact of the United States is freedom of speech. To the extent this country is actually exceptional, it’s because we have the first amendment in the Bill of Rights. We have freedom of conscience. We can say what we really think.

There’s no hate speech exception to that just because you hate what somebody else thinks. You cannot force that person to be quiet because we’re citizens, not slaves. But that right, that foundational right that makes this country what it is, that right from which all of the rights flow is going away at high speed in the face of censorship. Now, modern censorship, there’s no resemblance to previous censorship regimes in previous countries and previous eras. Our censorship is affected on the basis of fights against disinformation and malformation. And the key thing to know about this is that they’re everywhere. And of course, this censorship has no reference at all to whether what you’re saying is true or not.

In other words, you can say something that is factually accurate and consistent with your own conscience. And in previous versions of America, you had an absolute right to say those things. but now – because someone doesn’t like them or because they’re inconvenient to whatever plan the people in power have, they can be denounced as disinformation and you could be stripped of your right to express them either in person or online. In fact, expressing these things can become a criminal act and is it’s important to know, by the way, that this is not just the private sector doing this.

These efforts are being directed by the US government, which you pay for and at least theoretically owned. It’s your government, but they’re stripping your rights at very high speed. Most people understand this intuitively, but they don’t know how it happens. How does censorship happen? What are the mechanics of it?

Mike Benz is, we can say with some confidence, the expert in the world on how this happens. Mike Benz had the cyber portfolio at the State Department. He’s now executive director of Foundation for Freedom Online, and we’re going to have a conversation with him about a very specific kind of censorship. By the way, we can’t recommend strongly enough, if you want to know how this happens, Mike Benz is the man to read.

But today we just want to talk about a specific kind of censorship and that censorship that emanates from the fabled military industrial complex, from our defense industry and the foreign policy establishment in Washington. That’s significant now because we’re on the cusp of a global war, and so you can expect censorship to increase dramatically. And so with that, here is Mike Benz, executive director of Foundation for Freedom online. Mike, thanks so much for joining us and I just can’t overstate to our audience how exhaustive and comprehensive your knowledge is on this topic. It’s almost unbelievable. And so if you could just walk us through how the foreign policy establishment and defense contractors and DOD and just the whole cluster, the constellation of defense related publicly funded institutions, stripped from us,

Mike Benz:

Our freedom of speech. Sure. One of the easiest ways to actually start the story is really with the story of internet freedom and it switched from internet freedom to internet censorship because free speech on the internet was an instrument of statecraft almost from the outset of the privatization of the internet in 1991. We quickly discovered through the efforts of the Defense Department, the State Department and our intelligence services, that people were using the internet to congregate on blogs and forums. And at this point, free speech was championed more than anybody by the Pentagon, the State Department, and our sort of CIA cutout NGO blob architecture as a way to support dissident groups around the world in order to help them overthrow authoritarian governments as they were sort of build essentially the internet free speech allowed kind of insta regime change operations to be able to facilitate the foreign policy establishments State Department agenda.

Google is a great example of this. Google began as a DARPA grant by Larry Page and Sergey Brin when they were Stanford PhDs, and they got their funding as part of a joint CIA NSA program to chart how “birds of a feather flock together online” through search engine aggregation. And then one year later they launched Google and then became a military contractor. Quickly thereafter, they got Google Maps by purchasing a CIA satellite software essentially, and the ability to use free speech on the internet as a way to circumvent state control over media over in places like Central Asia and all around the world, was seen as a way to be able to do what used to be done out of CIA station houses or out of embassies or consulates in a way that was totally turbocharged. And all of the internet free speech technology was initially created by our national security state – VPNs, virtual private networks to hide your IP address, tour the dark web, to be able to buy and sell goods anonymously, end-to-end encrypted chats.

All of these things were created initially as DARPA projects or as joint CIA NSA projects to be able to help intelligence backed groups, to overthrow governments that were causing a problem to the Clinton administration or the Bush administration or the Obama administration. And this plan worked magically from about 1991 until about 2014 when there began to be an about face on internet freedom and its utility.

Now, the high watermark of the sort of internet free speech moment was the Arab Spring in 2011, 2012 when you had this one by one – all of the adversary governments of the Obama Administration: Egypt, Tunisia, all began to be toppled in Facebook revolutions and Twitter revolutions. And you had the State Department working very closely with the social media companies to be able to keep social media online during those periods. There was a famous phone call from Google’s Jared Cohen to Twitter to not do their scheduled maintenance so that the preferred opposition group in Iran would be able to use Twitter to win that election.

So free speech was an instrument of statecraft from the national security state to begin with. All of that architecture, all the NGOs, the relationships between the tech companies and the national security state had been long established for freedom. In 2014, after the coup in Ukraine, there was an unexpected counter coup where Crimea and the Donbas broke away and they broke away with essentially a military backstop that NATO was highly unprepared for at the time. They had one last Hail Mary chance, which was the Crimea annexation vote in 2014. And when the hearts and minds of the people of Crimea voted to join the Russian Federation, that was the last straw for the concept of free speech on the internet in the eyes of NATO – as they saw it. The fundamental nature of war changed at that moment. And NATO at that point declared something that they first called the Gerasimov doctrine, which was named after this Russian military, a general who they claimed made a speech that the fundamental nature of war has changed.

(Gerasimov doctrine is the idea that) you don’t need to win military skirmishes to take over central and eastern Europe. All you need to do is control the media and the social media ecosystem because that’s what controls elections. And if you simply get the right administration into power, they control the military. So it’s infinitely cheaper than conducting a military war to simply conduct an organized political influence operation over social media and legacy media. An industry had been created that spanned the Pentagon, the British Ministry of Defense and Brussels into a organized political warfare outfit, essentially infrastructure that was created initially stationed in Germany and in Central and eastern Europe to create psychological buffer zones, basically to create the ability to have the military work with the social media companies to censor Russian propaganda and then to censor domestic, right-wing populist groups in Europe who were rising in political power at the time because of the migrant crisis.

So you had the systematic targeting by our state department, by our intelligence community, by the Pentagon of groups like Germany’s AFD, the alternative for Deutsche Land there and for groups in Estonia, Latvia, Lithuania. Now, when Brexit happened in 2016, that was this crisis moment where suddenly they didn’t have to worry just about central and eastern Europe anymore. It was coming westward, this idea of Russian control over hearts and minds. And so Brexit was June, 2016. The very next month at the Warsaw Conference, NATO formally amended its charter to expressly commit to hybrid warfare as this new NATO capacity. So they went from basically 70 years of tanks to this explicit capacity building for censoring tweets if they were deemed to be Russian proxies. And again, it’s not just Russian propaganda this, these were now Brexit groups or groups like Mateo Salvini in Italy or in Greece or in Germany or in Spain with the Vox Party.

And now at the time NATO was publishing white papers saying that the biggest threat NATO faces is not actually a military invasion from Russia. It’s losing domestic elections across Europe to all these right-wing populace groups who, because they were mostly working class movements, were campaigning on cheap Russian energy at a time when the US was pressuring this energy diversification policy. And so they made the argument after Brexit, now the entire rules-based international order would collapse unless the military took control over media because Brexit would give rise to Frexit in France with marine Lapin just Brexit in Spain with a Vox party to Italy exit in Italy, to Grexit in Germany, to Grexit in Greece, the EU would come apart, so NATO would be killed without a single bullet being fired. And then not only that, now that NATO’s gone, now there’s no enforcement arm for the International Monetary fund, the IMF or the World Bank. So now the financial stakeholders who depend on the battering ram of the national security state would basically be helpless against governments around the world. So from their perspective, if the military did not begin to censor the internet, all of the democratic institutions and infrastructure that gave rise to the modern world after World War II would collapse. So you can imagine the reaction,

Tucker Carlson:

Wait, ask

Mike Benz:

Later. Donald Trump won the 2016 election. So

Tucker Carlson:

Well, you just told a remarkable story that I’ve never heard anybody explain as lucidly and crisply as you just did. But did anyone at NATO or anyone at the State Department pause for a moment and say, wait a second, we’ve just identified our new enemy as democracy within our own countries. I think that’s what you’re saying. They feared that the people, the citizens of their own countries would get their way, and they went to war against that.

Mike Benz:

Yes. Now there’s a rich history of this dating back to the Cold War. The Cold War in Europe was essentially a similar struggle for hearts and minds of people, especially in central and Eastern Europe in these sort of Soviet buffer zones. And starting in 1948, the national security state was really established. Then you had the 1947 Act, which established the Central Intelligence Agency. You had this world order that had been created with all these international institutions, and you had the 1948 UN Declaration on human rights, which forbid the territorial acquisition by military force. So you can no longer run a traditional military occupation government in the way that we could in 1898, for example, when we took the Philippines, everything had to be done through a sort of political legitimization process whereby there’s some ratification from the hearts and minds of people within the country.

Now, often that involves simply puppet politicians who are groomed as emerging leaders by our State Department. But the battle for hearts and minds had been something that we had been giving ourselves a long moral license leash, if you will, since 1948. One of the godfathers of the CIA was George Kennan. So, 12 days after we rigged the Italian election in 1948 by stuffing ballot boxes and working with the mob, we published a memo called the Inauguration of organized political warfare where Kennan said, “listen, it’s a mean old world out there. We at the CIA just rigged the Italian election. We had to do it because if the Communist won, maybe there’d never be another election in Italy again, but it’s really effective, guys. We need a department of dirty tricks to be able to do this around the world. And this is essentially a new social contract we’re constructing with the American people because this is not the way we’ve conducted diplomacy before, but we are now forbidden from using the war department in 1948.”

They also renamed the war department to the Defense Department. So again, as part of this diplomatic onslaught for political control, rather than it looking like it’s overt military control, but essentially what ended up happening there is we created this foreign domestic firewall. We said that we have a department of dirty tricks to be able to rig elections, to be able to control media, to be able to meddle in the internal affairs of every other plot of dirt in the country.

But this sort of sacred dirt in which the American homeland sits, they are not allowed to operate there. The State Department, the Defense Department, and the CIA are all expressly forbidden from operating on US soil. Of course, this is so far from the case, it’s not even funny, but that’s because of a number of laundering tricks that they’ve developed over 70 years of doing this.

But essentially there was no moral quandary at first with respect to the creation of the censorship industry. When it started out in Germany and in Lithuania and Latvia and Estonia and in Sweden and Finland, there began to be a more diplomatic debate about it after Brexit, and then it became full throttle when Trump was elected. And what little resistance there was was washed over by the rise in saturation of Russiagate, which basically allowed them to not have to deal with the moral ambiguities of censoring your own people.

Because if Trump was a Russian asset, you no longer really had a traditional free speech issue. It was a national security issue. It was only after Russiagate died in July, 2019 when Robert Mueller basically choked on the stand for three hours and revealed he had absolutely nothing. After two and a half years of investigation that the foreign to domestic switcheroo took place where they took all of this censorship architecture, spanning DHS, the FBI, the CIA, the DOD, the DOJ, and then the thousands of government funded NGO and private sector mercenary firms were all basically transited from a foreign predicate, a Russian disinformation predicate to a democracy predicate by saying that disinformation is not just a threat when it comes from the Russians, it’s actually an intrinsic threat to democracy itself.

And so by that, they were able to launder the entire democracy promotion regime change toolkit just in time for the 2020 election.

Tucker Carlson:

I mean, it’s almost beyond belief that this has happened. I mean, my own father worked for the US government in this business in the information war against the Soviet Union and was a big part of that. And the idea that any of those tools would be turned against American citizens by the US government, I think I want to think was absolutely unthinkable in say 1988. And you’re saying that there really hasn’t been anyone who’s raised objections and it’s absolutely turned inward to manipulate and rig our own elections as we would in say Latvia.

Mike Benz:

Yeah. Well, as soon as the democracy predicate was established, you had this professional class of professional regime change artists and operatives that is the same people who argued that we need to bring democracy to Yugoslavia, and that’s the predicate for getting rid of Milošević or any other country around the world where we basically overthrow governments in order to preserve democracy. Well, if the democracy threat is homegrown now, then that becomes, then suddenly these people all have new jobs moving on the US side, and I can go through a million examples of that. But one thing on what you just mentioned, which is that from their perspective, they just weren’t ready for the internet. 2016 was really the first time that social media had reached such maturity that it began to eclipse legacy media. I mean, this was a long time coming. I think folks saw this building from 2006 through 2016.

Internet 1.0 didn’t even have social media from 1991 to 2004, there was no social media at all. 2004, Facebook came out 2005, Twitter, 2006, YouTube 2007, the smartphone. And in that initial period of social media, nobody was getting subscriber ships at the level where they actually competed with legacy news media. But over the course of being so initially even these dissonant voices within the us, even though they may have been loud in moments, they never reached 30 million followers. They never reached a billion impressions a year type thing. As a uncensored mature ecosystem allowed citizen journalists and independent voices to be able to outcompete legacy news media. This induced a massive crisis both in our military and in our state department in intelligence services. I’ll give you a great example of this in 2019 at meeting of the German Marshall Fund, which is an institution that goes back to the US basically, I don’t want to say bribe, but essentially the soft power economic soft power projection in Europe as part of the reconstruction of European governments after World War ii, to be able to essentially pay them with Marshall Fund dollars and then in return, they basically were under our thumb in terms of how they reconstructed.

But the German Marshall Fund held a meeting in 2019. They held a million of these, frankly, but this was when a four star general got up on the panel and posed the question, what happens to the US military? What happens to the national security state when the New York Times is reduced to a medium sized Facebook page? And he posed this thought experiment as an example of we’ve had these gatekeepers, we’ve had these bumper cars on democracy in the form a century old relationship with legacy media institutions. I mean, our mainstream media is not in any shape or form even from its outset, independent from the national security state, from the state Department, from the war department, you had the initial, all of the initial broadcast news companies, NBC, ABC and CBS were all created by Office of War Information Veterans from the War department’s effort in World War ii.

You had these Operation Mockingbird relationships from the 1950s through the 1970s. Those continued through the use of the National Endowment for Democracy and the privatization of intelligence capacities in the 1980s under Reagan. There’s all sorts of CIA reading room memos you can read even on cia.gov about those continued media relations throughout the 1990s. And so you always had this backdoor relationship between the Washington Post, the New York Times, and all of the major broadcast media corporations. By the way, Rupert Murdoch and Fox are part of this as well. Rupert Murdoch was actually part of the National Endowment for Democracy Coalition in 1983 when it was as a way to do CIA operations in an aboveboard way after the Democrats were so ticked off at the CIA for manipulating student movements in the 1970s. But essentially there was no CIA intermediary to random citizen journalist accounts. There was no Pentagon backstop.

You couldn’t get a story killed. You couldn’t have this favors for favors relationship. You couldn’t promise access to some random person with 700,000 followers who’s got an opinion on Syrian gas. And so this induced, and this was not a problem for the initial period of social media from 2006 to 2014 because there were never dissident groups that were big enough to be able to have a mature enough ecosystem on their own. And all of the victories on social media had gone in the way of where the money was, which was from the State Department and the Defense Department and the intelligence services. But then as that maturity happened, you now had this situation after the 2016 election where they said, okay, now the entire international order might come undone. 70 years of unified foreign policy from Truman until Trump are now about to be broken.

And we need the same analog control systems. We had to be able to put bumper cars on bad stories or bad political movements through legacy media relationships and contacts we now need to establish and consolidate within the social media companies. And the initial predicate for that was Russiagate. But then after Russiagate died and they used a simple democracy promotion predicate, then it gave rise to this multi-billion dollar censorship industry that joins together the military industrial complex, the government, the private sector, the civil society organizations, and then this vast cobweb of media allies and professional fact checker groups that serve as this sort of sentinel class that surveys every word on the internet.

Tucker Carlson:

Thank you again for this almost unbelievable explanation of why this is happening. Can you give us an example of how it happens and just pick one among, I know countless examples of how the national security state lies to the population, censors the truth in real life.

Mike Benz:

Yeah, so we have this state department outfit called the Global Engagement Center, which was created by a guy named Rick Stengel who described himself as Obama’s propaganda in chief. He was the undersecretary for public affairs essentially, which is the liaison office role between the state department and the mainstream media. So this is basically the exact nexus where government talking points about war or about diplomacy or statecraft get synchronized with mainstream media.

Tucker Carlson:

May I add something to that as someone I know – Rick Stengel. He was at one point a journalist and Rick Stengel has made public arguments against the First Amendment and against Free Speech.

Mike Benz:

Yeah, he wrote a whole book on it and he published an op-Ed in 2019. He wrote a whole book on it and he made the argument that we just went over here that essentially the Constitution was not prepared for the internet and we need to get rid of the First Amendment accordingly. And he described himself as a free speech absolutist when he was the managing editor of Time Magazine. And even when he was in the State Department under Obama, he started something called the Global Engagement Center, which was the first government censorship operation within the federal government, but it was foreign facing, so it was okay. Now, at the time, they used the homegrown ISIS predicate threat for this. And so it was very hard to argue against the idea of the State Department having this formal coordination partnership with every major tech platform in the US because at the time there were these ISIS attacks that were, and we were told that ISIS was recruiting on Twitter and Facebook.

And so the Global Engagement Center was established essentially to be a state department entanglement with the social media companies to basically put bumper cars on their ability to platform accounts. And one of the things they did is they created a new technology, which it’s called Natural Language processing. It is a artificial intelligence machine learning ability to create meaning out of words in order to map everything that everyone says on the internet and create this vast topography of how communities are organized online, who the major influences are, what they’re talking about, what narratives are emerging or trending, and to be able to create this sort of network graph in order to know who to target and how information moves through an ecosystem. And so they began plotting the language, the prefixes, the suffixes, the popular terms, the slogans that ISIS folks were talking about on Twitter.

When Trump won the election in 2016, everyone who worked at the State Department was expecting these promotions to the White House National Security Council under Hillary Clinton, who I should remind viewers was also Secretary of State under Obama, actually ran the State Department. But these folks were all expecting promotions on November 8th, 2016 and were unceremoniously put out of jobs by a guy who was a 20 to one underdog according to the New York Times the day of the election. And when that happened, these State Department folks took their special set of skills, coercing governments for sanctions. The State Department led the effort to sanction Russia over the Crimea annexation. In 2014, these State Department diplomats did an international roadshow to pressure European governments to pass censorship laws to censor the right-wing populous groups in Europe and as a boomerang impact to censor populace groups who were affiliated in the us.

So you had folks who went from the state department directly, for example, to the Atlanta Council, which was this major facilitator between government to government censorship. The Atlanta Council is a group that is one of Biden’s biggest political backers. They bill themselves as NATO’s Think Tank. So they represent the political census of NATO. And in many respects, when NATO has civil society actions that they want to be coordinated to synchronize with military action or region, the Atlantic Council essentially is deployed to consensus build and make that political action happen within a region of interest to nato.

Now, the Atlantic Council has seven CIA directors on its board. A lot of people don’t even know that seven CIA directors are still alive, let alone all concentrated on the board of a single organization that’s kind of the heavyweight in the censorship industry. They get annual funding from the Department of Defense, the State Department, and CIA cutouts like the National Endowment for Democracy.

The Atlantic Council in January, 2017 moved immediately to pressure European governments to pass censorship laws to create a transatlantic flank tank on free speech in exactly the way that Rick Stengel essentially called for to have us mimic European censorship laws. One of the ways they did this was by getting Germany to pass something called Nets DG in August, 2017, which was essentially kicked off the era of automated censorship in the us. What Nets DG required was, unless social media platforms wanted to pay a $54 million fine for each instance of speech, each post left up on their platform for more than 48 hours that had been identified as hate speech, they would be fined basically into bankruptcy when you aggregate 54 million over tens of thousands of posts per day. And the safe haven around that was if they deployed artificial intelligence based censorship technologies, which had been again created by DARPA to take on ISIS to be able to scan and ban speech automatically.

And this gave rise to what I call these weapons of mass deletion. These are essentially the ability to sensor tens of millions of posts with just a few lines of code. And the way this is done is by aggregating basically the field of censorship science fuses together two disparate groups of study, if you will. There’s the sort of political and social scientists who are the sort of thought leaders of what should be censored, and then there are the sort of quants, if you will. These are the programmers, the computational data scientists, computational Linguistics University.

There’s over 60 universities now who get federal government grants to do the censorship work and the censorship preparation work where what they do is they create these code books of the language that people use the same way they did for isis. They did this, for example, with COVID. They created these COVID lexicons of what dissident groups were saying about mandates, about masks, about vaccines, about high profile individuals like Tony Fauci or Peter Daszak or any of these protected VIPs and individuals whose reputations had to be protected online.

And they created these code books, they broke things down into narratives. The Atlanta Council, for example, was a part of this government funded consortium, something called the Virality Project, which mapped 66 different narratives that dissidents we’re talking about around covid, everything from COVID origins to vaccine efficacy. And then they broke down these 66 claims into all the different factual sub claims. And then they plugged these into these essentially machine learning models to be able to have a constant world heat map of what everybody was saying about covid. And whenever something started trend that was bad for what the Pentagon wanted or was bad for what Tony Fauci wanted, they were able to take down tens of millions of posts. They did this in the 2020 election with mail-in ballots. It was the same. Wait,

Tucker Carlson:

There’s so much here and it’s so shocking. So you’re saying the Pentagon, our Pentagon, the US Department of Defense censored Americans during the 2020 election cycle?

Mike Benz:

Yes, they did this through the, so the two most censored events in human history, I would argue to date are the 2020 election and the COVID-19 pandemic, and I’ll explain how I arrived there.

So the 2020 election was determined by mail-in ballots, and I’m not weighing into the substance of whether mail-in ballots were or were not a legitimate or safe and reliable form of voting. That’s a completely independent topic from my perspective.

Then the censorship issue one, but the censorship of mail-in ballots is really one of the most extraordinary stories in our American history. I would argue what happened was is you had this plot within the Department of Homeland Security. Now this gets back to what we were talking about with the State Department’s Global Engagement Center. You had this group within the Atlanta Council and the Foreign Policy Establishment, which began arguing in 2017 for the need for a permanent domestic censorship government office to serve as a quarterback for what they called a whole of society counter misinformation, counter disinformation alliance.

That just means censorship. To counter “miss-dis-info”. But their whole society model explicitly proposed that we need every single asset within society to be mobilized in a whole of society effort to stop misinformation online. It was that much of an existential threat to democracy, but they fixated in 2017 that it had to be centered within the government because only the government would have the clout and the coercive threat powers and the perceived authority to be able to tell the social media companies what to do to be able to summon a government funded NGO Swarm to create that media surround sound to be able to arm an AstroTurf army of fact checkers and to be able to liaise and connect all these different censorship industry actors into a cohesive unified hole. And the Atlantic Council initially proposed with this blueprint called Forward defense. “It’s not offense, it’s Forward Defense” guys.

They initially proposed that running this out of the State Department’s Global Engagement Center because they had so many assets there who were so effective at censorship under Rick Stengel, under the Obama administration. But they said, oh, we are not going to be able to get away with that. We don’t really have a national security predicate and it’s supposed to be foreign facing. We can’t really use that hook unless we have a sort of national security one. Then they contemplated parking it, the CIA, and they said, well, actually there’s two reasons we can’t do that. The is a foreign facing organization and we can’t really establish a counterintelligence threat to bring it home domestically. Also, we’re going to need essentially tens of thousands of people involved in this operation spanning this whole society model, and you can’t really run a clandestine operation that way. So they said, okay, well what about the FBI?

They said, well, the FBI would be great, it’s domestic, but the problem is is the FBI is supposed to be the intelligence arm of the Justice Department. And what we’re dealing with here are not acts of law breaking, it’s basically support for Trump. Or if a left winging popularist had risen to power like Bernie Sanders or Jeremy Corbin, I have no doubt they would’ve done in the UK. They would’ve done the same thing to him there. They targeted Jeremy Corbin and other left-wing populist NATO skeptical groups in Europe, but in the US it was all Trump.

And so essentially what they said is, well, the only other domestic intelligence equity we have in the US besides the FBI is the DHS. So we are going to essentially take the CIA’s power to rig and bribe foreign media organizations, which is the power they’ve had since the day they were born in 1947. And we’re going to combine that with the power with the domestic jurisdiction of the FBI by putting it at DHS. So DHS was basically deputized. It was empowered through this obscure little cybersecurity agency to have the combined powers that the CIA has abroad with the jurisdiction of the FBI at home. And the way they did this, how did a cyber, an obscure little cybersecurity agency get this power was they did a funny little series of switcheroos. So this little thing called CISA, they didn’t call it the Disinformation Governance Board. They didn’t call it the Censorship Agency. They gave it an obscure little name that no one would notice called the Cybersecurity and Infrastructure Security Agency (CISA) who his founder said, we care about security so much, it’s in our name twice. Everybody sort of closed their eyes and pretended that’s what it was. CISA was created by Active Congress in 2018 because of the perceived threat that Russia had hacked the 2016 election.

And so we needed the cybersecurity power to be able to deal with that. And essentially on the heels of a CIA memo on January 6th, 2017 and a same day DHS executive order on January 6th, 2017, arguing that Russia had interfered in the 2016 election and a DHS mandate saying that elections are now critical infrastructure, you had this new power within DHS to say that cybersecurity attacks on elections are now our purview. And then they did two cute things. One they said said, miss dis and Malformation online are a form of cybersecurity attack. They are a cyber attack because they are happening online. And they said, well, actually Russian disinformation is we’re actually protecting democracy and elections. We don’t need a Russian predicate after Russiagate died. So just like that, you had this cybersecurity agency be able to legally make the argument that your tweets about mail-in ballots if you undermine public faith and confidence in them as a legitimate form of voting was now you were now conducting a cyber attack on US critical infrastructure articulating misinformation on Twitter and just like that.

Tucker Carlson:

Wait- in other words, complaining about election fraud is the same as taking down our power grid.

Mike Benz:

Yes, you could literally be on your toilet seat at nine 30 on a Thursday night and tweet, I think that mail-in ballots are illegitimate. And you were essentially then caught up in the crosshairs of the Department of Homeland Security classifying you as conducting a cyber attack on US critical infrastructure because you were doing misinformation online in the cyber realm. And misinformation is a cyber attack on democracy when it undermines public faith and confidence in our democratic elections and our democratic institutions, they would end up going far beyond that. They would actually define democratic institutions as being another thing that was a cybersecurity attack to undermine and lo and behold, the mainstream media is considered a democratic institution that would come later. What ended up happening was in the advance of the 2020 election, starting in April of 2020, although this goes back before you had this essentially never Trump NeoCon Republican DHS working with essentially NATO on the national security side and essentially the DNC, if you will, to use DHS as the launching point for a government coordinated mass censorship campaign spanning every single social media platform on earth in order to preens the ability to dispute the legitimacy of mail-in ballots.

And here’s how they did this. They aggregated four different institutions. Stanford University, the University of Washington, a company called Graphica and the Atlantic Council. Now all four of these institutions, the centers within them were essentially Pentagon cutouts you had at the Stanford Air Observatory. It was actually run by Michael McFaul, if you know Michael McFaul. He was the US ambassador to Russia under the Obama administration, and he personally authored a seven step playbook for how to successfully orchestrate a color revolution. And part of that involved maintaining total control over media and social media juicing up the civil society outfits, calling elections illegitimate in order to. Now, mind you, all of these people were professional Russia, Gators and professional election delegitimizes in 2016, and then I’ll get that in a sec. So Stanford, the Stanford Observatory under Michael McFaul was run by Alex Stamos, who was formerly a Facebook executive who coordinated with ODNI and with respect to Russiagate taking down Russian propaganda at Facebook.

So this is another liaison essentially to the national security state. And under Alex Stamos at Sanford Observatory was Renee Diresta, who started her career in the CIA and wrote the Senate Intelligence Committee report on Russian disinformation, and there’s a lot more there that I’ll get to another time. But the next institution was the University of Washington, which is essentially the Bill Gates University in Seattle who is headed by Kate Starboard, who is basically three generations of military brass who got our PhD in crisis informatics, essentially doing social media surveillance for the Pentagon and getting DARPA funding and working essentially with the national security state, then repurposed to take on mail-in ballots. The third firm Graphica got $7 million in Pentagon grants and got their start as part of the Pentagon’s Minerva initiative. The Minerva Initiative is the Psychological Warfare Research Center of the Pentagon. This group was doing social media spying and narrative mapping for the Pentagon until the 2016 election happened, and then were repurposed into a partnership with the Department of Homeland Security to censor 22 million Trump tweets, pro-Trump tweets about mail-in ballots.

And then the fourth institution, as I mentioned, was the Atlantic Council who’s got seven CIA directors on the board, so one after another. It is exactly what Ben Rhodes described during the Obama era as the blob, the Foreign Policy Establishment, it’s the Defense Department, the State Department or the CIA every single time. And of course this was because they were threatened by Trump’s foreign policy, and so while much of the censorship looks like it’s coming domestically, it’s actually by our foreign facing department of Dirty tricks, color revolution blob, who were professional government toppers who were then basically descended on the 2020 election.

Now they did this, they explicitly said the head of this election integrity partnership on tape and my foundation clipped them, and it’s been played before Congress and it’s a part of the Missouri Biden lawsuit now, but they explicitly said on tape that they were set up to do what the government was banned from doing itself, and then they articulated a multi-step framework in order to coerce all the tech companies to take censorship actions.

They said on tape that the tech companies would not have done it but for the pressure, which involved using threats of government force because they were the deputized arm of the government. They had a formal partnership with the DHS. They were able to use DHS’ proprietary domestic disinformation switchboard to immediately talk to top brass at all the tech companies for takedowns, and they bragged on tape about how they got the tech companies to all systematically adopt a new terms of service speech violation ban called delegitimization, which meant any tweet, any YouTube video, any Facebook post, any TikTok video, any discord posts, any Twitch video, anything on the internet that undermine public faith and confidence in the use of mail-in ballots or early voting drop boxes or ballot tabulation issues on election day was a prima fascia terms of service violation policy under this new delegitimization policy that they only adopted because of pass through government pressure from the election integrity partnership, which they bragged about on tape, including the grid that they used to do this, and simultaneously invoking threats of government breaking them up or government stopping doing favors for the tech companies unless they did this as well as inducing crisis PR by working with their media allies.

And they said DHS could not do that themselves. And so they set up this basically constellation of State Department, Pentagon and IC networks to run this censorship campaign, which by their own math had 22 million tweets on Twitter alone, and mind you, they just on 15 platforms, this is hundreds of millions of posts which were all scanned and banned or throttled so that they could not be amplified or they exist in a sort of limited state purgatory or had these frictions affixed to them in the form of fact-checking labels where you couldn’t actually click through the thing or you had to, it was an inconvenience to be able to share it. Now, they did this seven months before the election because at the time they were worried about the perceived legitimacy of a Biden victory in the case of a so-called Red Mirage Blue Shift event.

They knew the only way that Biden would win mathematically was through the disproportionate Democrat use of mail-in ballots. They knew there would be a crisis because it was going to look extremely weird if Trump looked like he won by seven states and then three days later it comes out actually the election switch, I mean that would put the election crisis of the Bush Gore election on a level of steroids that the National Security state said, well, the public will not be prepared for. So what we need to do is we need to in advance, we need to preens the ability to even question legitimacy.

Tucker Carlson:

Out, wait, wait, may I ask you to pause right there? Key influences by, so what you’re saying is what you’re suggesting is they knew the outcome of the election seven months before it was held.

Mike Benz:

It looks very bad.

Tucker Carlson:

Yes, Mike. It does look very bad

Mike Benz:

And especially when you combine this with the fact that this is right on the heels of the impeachment. The Pentagon led and the CIA led impeachment. It was Eric ? from the CIA, and it was Vindman from the Pentagon who led the impeachment of Trump in late 2019 over an alleged phone call around withholding Ukraine aid. This same network, which came straight out of the Pentagon hybrid warfare military censorship network, created after the first Ukraine crisis in 2014 were the lead architects of the Ukraine impeachment in 2019, and then essentially came back on steroids as part of the 2020 election censorship operation. But from their perspective, I mean it certainly looks like the perfect crime. These were the people. DHS at the time had actually federalized much of the National Election Administration through this January 6th, 2017 executive order from outgoing Obama. DHS had Jed Johnson, which essentially wrapped all 50 states up into a formal DHS partnership. So DHS was simultaneously in charge of the administration of the election in many respects, and the censorship of anyone who challenged the administration of the election. This is like putting essentially the defendant of a trial as the judge and jury of the trial. It was

Tucker Carlson:

Very, but you’re not describing democracy. I mean, you’re describing a country in which democracy is impossible.

Mike Benz:

What I’m essentially describing is military rule. I mean, what’s happened with the rise of the censorship industry is a total inversion of the idea of democracy itself. Democracy sort draws its legitimacy from the idea that it is ruled by consent of the people being ruled. That is, it’s not really being ruled by an overlord because the government is actually just our will expressed by our consent with who we vote for. The whole push after the 2016 election and after Brexit and after a couple of other social media run elections that went the wrong way from what the State Department wanted, like the 2016 Philippines election, was to completely invert everything that we described as being the underpinnings of a democratic society in order to deal with the threat of free speech on the internet. And what they essentially said is, we need to redefine democracy from being about the will of the voters to being about the sanctity of democratic institutions and who are the democratic institutions?

Oh, it’s the military, it’s NATO, it’s the IMF and the World Bank. It’s the mainstream media, it is the NGOs, and of course these NGOs are largely state department funded or IC funded. It’s essentially all of the elite establishments that were under threat from the rise of domestic populism that declared their own consensus to be the new definition of democracy. Because if you define democracy as being the strength of democratic institutions rather than a focus on the will of the voters, then what you’re left with is essentially democracy is just the consensus building architecture within the Democrat institutions themselves. And from their perspective, that takes a lot of work. I mean, the amount of work these people do. I mean, for example, we mentioned the Atlantic Council, which is one of these big coordinating mechanisms for the oil and gas industry in a region for the finance and the JP Morgans and the BlackRocks in a region for the NGOs in the region, for the media, in the region, all of these need to reach a consensus, and that process takes a lot of time, it takes a lot of work and a lot of negotiation from their perspective.

That’s democracy. Democracy is getting the NGOs to agree with BlackRock, to agree with the Wall Street Journal, to agree with the community and activist groups who are onboarded with respect to a particular initiative that is the difficult vote building process from their perspective.

At the end of the day, a bunch of populous groups decide that they like a truck driver who’s popular on TikTok more than the carefully constructed consensus of the NATO military brass. Well then from their perspective, that is now an attack on democracy, and this is what this whole branding effort was. And of course, democracy again has that magic regime change predicate where democracy is our magic watchword to be able to overthrow governments from the ground up in a sort of color revolution style whole of society effort to topple a democratically elected government from the inside, for example, as we did in Ukraine, Victor Jankovich was democratically elected by the Ukrainian people like him or hate him.

I’m not even issuing an opinion, but the fact is we color revolution him out of office. We January 6th out of office, actually, to be frank, I mean with respect to the, you had a state department funded right sector thugs and 5 billion worth of civil society money pumped into this to overthrow democratically elected government in the name of democracy, and they took that special set of skills home and now it’s here, perhaps potentially to stay. And this has fundamentally changed the nature of American governance because of the threat of one small voice becoming popular on social media.

Tucker Carlson:

May I ask you a question? So into that group of institutions that you say now define democracy, the NGOs foreign policy establishment, et cetera, you included the mainstream media. Now in 2021, the NSA broke into my private text apps and read them and then leaked them to the New York Times against me. That just happened again to me last week, and I’m wondering how common that is for the Intel agencies to work with so-called mainstream media like the New York Times to hurt their opponents.

Mike Benz:

Well, that is the function of these interstitial government funded non-governmental organizations and think tanks like for example, we mentioned the Atlantic Council, which is NATO’s think tank, but other groups like the Aspen Institute, which draws the lion’s share of its funding from the State department and other government agencies. The Aspen Institute was busted doing the same thing with the Hunter Biden laptop censorship. You had this strange situation where the FBI had advanced knowledge of the pending publication of the Hunter Biden laptop story, and then magically the Aspen Institute, which is run by essentially former CIA, former NSA, former FBI, and then a bunch of civil society organizations all hold a mass stakeholder censorship simulation, a three day conference, this came out and yo Roth was there. This is a big part of the Twitter file leaks, and it’s been mentioned in multiple congressional investigations.

But somehow the Aspen Institute, which is basically an addendum of the National Security state, got the exact same information that the National Security State spied on journalists and political figures to obtain, and not only leaked it, but then basically did a joint coordinated censorship simulator in September, two months before the election in order just like with the censorship of mail-in ballots to be in ready position to screens anyone online amplifying, wait a second, a news story that had not even broken yet.

Tucker Carlson:

The Aspen Institute, which is by the way, I’ve spent my life in Washington. It’s kind a, I mean Walter Isaacson formerly of Time Magazine ran it, former president of CNNI had no idea it was part of the national security state. I had no idea its funding came from the US government. This is the first time I’ve ever heard that. But given, assuming what you’re saying is true, it’s a little weird or starnge that Walter Isaacson left Aspens to write a biography of Elon Musk?

Mike Benz:

No? Yeah, I don’t know. I haven’t read that book. From what I’ve heard from people, it’s a relatively fair treatment. I just total speculation. But I suspect that Walter Isaacson has struggled with this issue and may not even firmly fall in one particular place in the sense that Walter Isaacson did a series of interviews of Rick Gel actually with the Atlantic Council and in other settings where he interviewed Rick Gel specifically on the issue of the need to get rid of the First Amendment and the threat that free speech on social media poses to democracy. Now, at the time, I was very concerned, this was between 2017 and 2019 when he did these Rick Stangle interviews. I was very concerned because Isaacson expressed what seemed to me to be a highly sympathetic view about the Rick Stengel perspective on killing the First Amendment. Now, he didn’t formally endorse that position, but it left me very skittish about Isaacson.

But what I should say is at the time, I don’t think very many people, in fact, I know virtually nobody in the country had any idea how deep the rabbit hole went when it came to the construction of the censorship industry and how deep the tentacles had grown within the military and the national security state in order to buoy and consolidate it. Much of that frankly did not even come to public light until even last year. Frankly, some of that was galvanized by Elon Musk’s acquisition and the Twitter files and the Republican turnover in the house that allowed these multiple investigations, the lawsuits like Missouri v Biden and the discovery process there and multiple other things like the Disinformation governance board, who, by the way, the interim head of that, the head of that Nina Janowitz got her start in the censorship industry from this exact same clandestine intelligence community censorship network created after the 2014 Crimea situation.

Nina Janowitz, when her name came up in 2022 as part of the disinformation governance board, I almost fell out of my chair because I had been tracking Nina’s network for almost five years at that point when her name came up as part of the UK inner cluster cell of a busted clandestine operation to censor of the internet called the Integrity Initiative, which was created by the UK Foreign Office and was backed by NATO’s Political Affairs Unit in order to carry out this thing that we talked about at the beginning of this dialogue, the NATO sort of psychological inoculation and the ability to kill, so-called Russian propaganda or rising political groups who wanted to maintain energy relations with Russia at a time when the US was trying to kill the Nord Stream and other pipeline relations. Well,

Well, Nina Janowitz was a part of this outfit, and then who was the head of it after Nina Janowitz went down, it was Michael Chertoff and Michael Chertoff was running the Aspen Institute Cyber Group. And then the Aspen Institute then goes on to be the censorship simulator for the Hunter Biden laptop story. And then two years later, Chertoff is then the head of the disinformation governance board after Nina is forced to step down.

Tucker Carlson:

Tucker Carlson: Of course, Michael Chertoff was the chairman of the largest military contractor in Europe, BAE military. So it’s all connected. You’ve blown my mind so many times in this conversation that I’m going to need a nap directly after it’s done. So I’ve just got two more questions for you, one short one, a little longer short. One is for people who’ve made it this far an hour in and want to know more about this topic. And by the way, I hope you’ll come back whenever you have the time to explore different threads of this story. But for people who want to do research on their own, how can your research on this be found on the internet?

Mike Benz:

Sure. So our foundation is foundation for freedom online.com. We publish all manner of reports on every aspect of the censorship industry from what we talked about with the role of the military industrial complex and the national security state to what the universities are doing to, I sometimes refer to as digital MK Ultra. There’s just the field of basically the science of censorship and the funding of these psychological manipulation methods in order to nudge people into different belief systems as they did with covid, as they did with energy. And every sensitive policy issue is what they essentially had an ambition for. But so my foundationforfreedomonline.com website is one way. The other way is just on X. My handle is at @MikeBenzCyber. I’m very active there and publish a lot of long form video and written content on all this. I think it’s one of the most important issues in the world today.

Tucker Carlson:

So it certainly is. And so that leads directly and seamlessly to my final question, which is about X. And I’m not just saying this because I post content there, but I think objectively it’s the last big platform that’s free or sort of free or more free. You post there too, but we’re at the very beginning of an election year with a couple of different wars unfolding simultaneously in 2024. So do you expect that that platform can stay free for the duration of this year?

Mike Benz:

It’s under an extraordinary amount of pressure, and that pressure is going to continue to mount as the election approaches. Elon Musk is a very unique individual, and he has a unique buffer, perhaps when it comes to the national security state because the national security state is actually quite reliant on Elon Musk properties, whether that’s for the electrical, the Green Revolution when it comes to Tesla and the battery technology there. When it comes to SpaceX, the State Department is hugely dependent on SpaceX because of its unbelievable sort of pioneering and saturating presence in the field of low earth orbit satellites that are basically how our telecom system runs to things like starlink. There are dependencies that the National Security state has on Elon Musk. I’m not sure he’d have as much room to negotiate if he had become the world’s richest man selling at a lemonade stand, and if the national security state goes too hard on him by invoking something like CFIUS to sort of nationalize some of these properties.

I think the shock wave that it would send to the international investor community would be irrecoverable at a time when we’re engaged in great power competition. So they’re trying to sort of induce, I think a sort of corporate regime change through a series of things involving a sort of death by a thousand paper cuts. I think there’s seven or eight different Justice Department or SEC or FTC investigations into Elon Musk properties that all started after his acquisition of X. But then what they’re trying to do right now is what I call the Transatlantic Flank Attack 2.0. We talked in this dialogue about how the censorship industry really got its start when a bunch of State Department exiles who were expecting promotions took their special set of skills in coercing European countries to pass sanctions on themselves, to cut off their own leg off to spite themselves in order to pass sanctions on Russia.

They ran back that same playbook with doing a roadshow for censorship instead for sanctions. We are now witnessing Transatlantic Flank attack 2.0, if you will, which is because they have lost a lot of their federal government powers to do this same censorship operation they had been doing from 2018 to 2022. In part because the house has totally turned on them, in part because of the media, in part because Missouri v Biden, which won a slam dunk case, actually banning government censorship at the trial court and appellate court levels. It is now before the Supreme Court, they’ve now moved into two strategies.

One of them is state level censorship laws. California just passed a new law, which the censorship industry totally drove from start to finish around, they call it platform accountability and transparency, which is basically forcing Elon Musk to give over the kind of narrative mapping data that these CIA conduits and Pentagon cutouts were using to create these weapons of mass deletion, these abilities to just censor everything at scale because they had all the internal platform data. Elon Musk took that away.

They’re using state laws like this new California law to crack that open. But the major threat right now is the threat from Europe with something called the EU Digital Services Act, which was cooked up in tandem with folks like NewsGuard, which has a board of Michael Hayden, head of the CIA NSA and a Fourstar General. Rick Stengel is on that board from the state department’s propaganda office. Tom Ridge is on that board from the Department of Homeland Security. Oh, and Anders Fogh Rasmussen – he was the general secretary of NATO under the Obama administration. So you have NATO, the CIA, the NSA four star General DHS, and the State Department working with the EU to craft the censorship laws that now are the largest existential threat to X other than potentially advertiser boycotts. Because there is now disinformation is now banned as a matter of law in the EU.

The EU is a bigger market for X than the us. There’s only 300 million in the USA. But there is 450 million people in Europe. X is now forced to comply with this brand new law that just got ratified this year where they either need to forfeit 6% of their global annual revenue to the EU to maintain operations there, or put in place essentially the kind of CIA bumper cars, if you will, that I’ve been describing over the course of this in order to have a internal mechanism to sensor anything that the eu, which is just a proxy for NATO deems to be disinformation. And you can bet with 65 elections around the globe this year, you can predict every single time what they’re going to define disinformation as. So that’s the main fight right now is dealing with the transatlantic flank attack from Europe.

Tucker Carlson:

This is just one of the most remarkable stories I’ve ever heard, and I’m grateful to you for bringing it to us. Mike Benz, executive director of the Foundation for Freedom Online, and I hope we see you again in

Mike Benz:

Thanks, Tucker.

Tucker Carlson:

Free speech is bigger than any one person or any one organization. Societies are defined by what they will not permit. What we’re watching is the total inversion of virtue.

* * *

Republished from the author’s Substack

Tyler Durden Fri, 03/08/2024 - 23:00 bankruptcy pandemic covid-19 grants white house congress senate army fauci us government trump vaccine treatment oil iran european europe uk france spain italy germany sweden russia ukraine eu

Uncategorized

Mortgage rates fall as labor market normalizes

Jobless claims show an expanding economy. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

Published

13 hours ago

March 8, 2024

Logan Mohtashami

Everyone was waiting to see if this week’s jobs report would send mortgage rates higher, which is what happened last month. Instead, the 10-year yield had a muted response after the headline number beat estimates, but we have negative job revisions from previous months. The Federal Reserve’s fear of wage growth spiraling out of control hasn’t materialized for over two years now and the unemployment rate ticked up to 3.9%. For now, we can say the labor market isn’t tight anymore, but it’s also not breaking.

The key labor data line in this expansion is the weekly jobless claims report. Jobless claims show an expanding economy that has not lost jobs yet. We will only be in a recession once jobless claims exceed 323,000 on a four-week moving average.

From the Fed: In the week ended March 2, initial claims for unemployment insurance benefits were flat, at 217,000. The four-week moving average declined slightly by 750, to 212,250

Below is an explanation of how we got here with the labor market, which all started during COVID-19.

1. I wrote the COVID-19 recovery model on April 7, 2020, and retired it on Dec. 9, 2020. By that time, the upfront recovery phase was done, and I needed to model out when we would get the jobs lost back.

2. Early in the labor market recovery, when we saw weaker job reports, I doubled and tripled down on my assertion that job openings would get to 10 million in this recovery. Job openings rose as high as to 12 million and are currently over 9 million. Even with the massive miss on a job report in May 2021, I didn’t waver.

Currently, the jobs openings, quit percentage and hires data are below pre-COVID-19 levels, which means the labor market isn’t as tight as it once was, and this is why the employment cost index has been slowing data to move along the quits percentage.

3. I wrote that we should get back all the jobs lost to COVID-19 by September of 2022. At the time this would be a speedy labor market recovery, and it happened on schedule, too

Total employment data

4. This is the key one for right now: If COVID-19 hadn’t happened, we would have between 157 million and 159 million jobs today, which would have been in line with the job growth rate in February 2020. Today, we are at 157,808,000. This is important because job growth should be cooling down now. We are more in line with where the labor market should be when averaging 140K-165K monthly. So for now, the fact that we aren’t trending between 140K-165K means we still have a bit more recovery kick left before we get down to those levels.

From BLS: Total nonfarm payroll employment rose by 275,000 in February, and the unemployment rate increased to 3.9 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, in government, in food services and drinking places, in social assistance, and in transportation and warehousing.

Here are the jobs that were created and lost in the previous month:

In this jobs report, the unemployment rate for education levels looks like this:

Less than a high school diploma: 6.1%
High school graduate and no college: 4.2%
Some college or associate degree: 3.1%
Bachelor’s degree or higher: 2.2%

Today’s report has continued the trend of the labor data beating my expectations, only because I am looking for the jobs data to slow down to a level of 140K-165K, which hasn’t happened yet. I wouldn’t categorize the labor market as being tight anymore because of the quits ratio and the hires data in the job openings report. This also shows itself in the employment cost index as well. These are key data lines for the Fed and the reason we are going to see three rate cuts this year.

recession unemployment covid-19 fed federal reserve mortgage rates recession recovery unemployment

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