UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 26, 2012
COLUMBIA BANKING SYSTEM, INC.
(Exact name of registrant as specified in its charter)
Washington
 
0-20288
 
91-1422237
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
 
 
 
 
1301 A Street
Tacoma, WA
 
 
 
98402
(Address of principal executive offices)
 
 
 
(Zip Code)
Registrant’s telephone number, including area code: (253) 305-1900
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Items to be Included in this Report
Item 2.02 Results of Operations and Financial Condition
On July 26, 2012, Columbia Banking System, Inc. issued a press release reporting its financial results for the quarter ended June 30, 2012. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. This information is being furnished under Item 2.02 (Results of Operations and Financial Condition) of Form 8-K.
Item 8.01 Other Events
On July 26, 2012, Columbia Banking System, Inc. is sued a press release announcing a regular quarterly cash dividend of $0.09 per common share and a special, one-time cash dividend of $0.21 per common share. The dividends will be paid on August 22, 2012 to shareholders of record at the close of business on August 8, 2012. A copy of the press release is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) The following exhibits are being furnished herewith:
 
99.1
Press Release dated July 26, 2012 reporting the financial results of Columbia Banking System, Inc. for the quarter ended June 30, 2012.
 
99.2
Press Release dated July 26, 2012 announcing a regular quarterly cash dividend and a special, one-time cash dividend.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
COLUMBIA BANKING SYSTEM, INC.
 
 
 
 
 
Date: July 26, 2012
 
 
 
/s/ MELANIE J. DRESSEL
 
 
 
 
Melanie J. Dressel
 
 
 
 
President and Chief Executive Officer





EXHIBIT INDEX
99.1
Press Release dated July 26, 2012 reporting the financial results of Columbia Banking System, Inc. for the quarter ended June 30, 2012.
99.2
Press Release dated July 26, 2012 announcing a regular quarterly cash dividend and a special, one-time cash dividend.






Exhibit 99.1




FOR IMMEDIATE RELEASE
July 26, 2012

Contacts:      Melanie J. Dressel, President and Chief Executive Officer
(253) 305-1911

Clint Stein, Senior Vice President
and Acting Chief Financial Officer
(253) 593-8304




Columbia Banking System Announces Solid Second Quarter 2012 Earnings

Highlights

•

•
Net income increased 38%, to $11.9 million compared to net income of $8.6 million for the 2 nd quarter 2011
•
Net income per diluted common share increased to $0.30, as compared to $0.22 per common share for the 2 nd quarter 2011
•
Noncovered loans increased 3% during the current quarter
•
Business loans increased 8% from year-end 2011
•
Credit metrics continue to improve; noncovered nonperforming assets decreased for the sixth consecutive quarter, falling 21% from year-end 2011
•
Strong core deposits at 93% of total deposits
•
Named one of Puget Sound Business Journal's “Washington's Best Workplaces” for the sixth consecutive year


TACOMA, Washington, July 26, 2012 -- Columbia Banking System, Inc. (NASDAQ: COLB) (“Columbia”) today announced net income of $11.9 million for the quarter ended June 30, 2012, an increase of 38% compared to net income of $8.6 million for the same quarter of 2011. Earnings per diluted common share rose 36% to $0.30 for the second quarter, compared with earnings of $0.22 per diluted common share a year earlier.
    

1


Melanie Dressel, President and Chief Executive Officer commented, “Our solid second quarter performance was achieved through our continued external focus on attracting and enhancing new and current customer relationships throughout our Pacific Northwest footprint. We are pleased with our loan growth despite the unsettled economic environment and intensified competitive challenges. Our commercial business loans have grown 8% and our total noncovered loan portfolio has grown 4% since year-end 2011.”

Significant Influences on the Quarter Ended June 30, 2012
    
Impact of Acquired Loan Accounting
The following table illustrates the significant impact to earnings associated with Columbia's acquired loan portfolios:
Acquired Loan Portfolio Activity
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30, 2012
 
June 30, 2011
 
June 30, 2012
 
June 30, 2011
 
 
(in thousands)
Incremental accretion income on acquired impaired loans
 
$
13,875

 
$
8,883

 
$
33,196

 
$
21,254

Incremental accretion income on other acquired loans
 
1,137

 
—

 
4,238

 
—

(Provision) recapture for losses on covered loans
 
(11,688
)
 
(2,301
)
 
(27,373
)
 
(1,879
)
Change in FDIC loss-sharing asset
 
(168
)
 
(6,419
)
 
(1,836
)
 
(21,193
)
Claw back liability (expense) recapture
 
208

 
(448
)
 
234

 
(2,148
)
Pre-tax earnings impact
 
$
3,364

 
$
(285
)
 
$
8,459

 
$
(3,966
)
The incremental accretion income in the table above represents the amount of income recorded on acquired loans above the contractual rate stated in the individual loan notes and stems from the discount established at the time these loan portfolios were acquired. As of June 30, 2012, the remaining accretable yield on acquired impaired loans was $214.1 million and the remaining loan discount on other acquired loans was $7.0 million, down from $239.7 million and $8.2 million, respectively at March 31, 2012.

The $11.7 million in provision for losses on covered loans in the current period is offset by an 80%, or $9.4 million, favorable adjustment to the change in the FDIC loss-sharing asset resulting in a net pre-tax earnings impact of $2.3 million. The provision for losses on covered loans was due to incremental loan losses incurred in the current period which were in excess of those expected from the re-measurement of cash flows during the first quarter of 2012.  These incremental loan losses reduced expected future cash flows and, when discounted at current yields, resulted in impairment.


2


The $168 thousand change in the FDIC loss sharing asset in the current quarter affected noninterest income and consists of $9.9 million of scheduled amortization expense, the $9.4 million favorable adjustment described above and approximately $300 thousand of expense related to covered other real estate owned.

Net Interest Margin

Columbia's net interest margin increased to 5.88% in the second quarter of 2012, up from 5.49% for the same period last year and down from 6.67% for the first quarter of 2012. The Company's net interest margin is impacted significantly by the accounting for acquired loans. The net interest margin for the current quarter reflects a moderating trend in the additional accretion income related to the acquired loans, which peaked during the last six months of 2011.

The Company's net interest margin, excluding incremental accretion income, decreased to 4.44% in the second quarter of 2012, down from 4.53% for the same period last year and down from 4.49% for the first quarter of 2012. The net interest margin, excluding incremental accretion income, was negatively impacted during the second quarter of 2012 by the overall decreasing trend in rates, impacting both the Company's loan and investment portfolios. Average noncovered loan yields have decreased due to a combination of repricing of existing loans and new originations at lower rates. The average yield on investments declined as portfolio cash flows were reinvested at lower prevailing rates.

The following table shows the impact to interest income and the related impact to the net interest margin resulting from accretion of income on acquired loan portfolios for the periods presented.
 
 
Three Months Ended
 
Six Months Ended
 
 
June 30, 2012
 
June 30, 2011
 
June 30, 2012
 
June 30, 2011
 
 
(dollars in thousands)
Interest income as recorded
 
$
24,486

 
$
16,782

 
$
57,389

 
$
38,084

Less: Interest income at stated note rate
 
9,474

 
7,899

 
19,955

 
16,830

Incremental accretion income
 
$
15,012

 
$
8,883

 
$
37,434

 
$
21,254

Incremental accretion income due to:
 
 
 
 
 
 
 
 
Acquired impaired loans
 
$
13,875

 
$
8,883

 
$
33,196

 
$
21,254

Other acquired loans
 
1,137

 
—

 
4,238

 
—

Incremental accretion income
 
$
15,012

 
$
8,883

 
$
37,434

 
$
21,254

Reported net interest margin
 
5.88
%
 
5.49
%
 
6.27
%
 
5.64
%
Net interest margin excluding additional accretion income
 
4.44
%
 
4.53
%
 
4.46
%
 
4.48
%

3



Balance Sheet
At June 30, 2012, Columbia's total assets were $4.79 billion, a slight decrease from $4.82 billion at March 31, 2012, and virtually unchanged from December 31, 2011. Noncovered loans were $2.44 billion at June 30, 2012, up 3% from $2.37 billion at March 31, 2012 and up 4% from $2.35 billion at December 31, 2011. Net noncovered loan growth for the second quarter 2012 was approximately $65 million from March 31, 2012 and $89 million from year-end 2011. Securities were $1.02 billion at June 30, 2012, relatively unchanged from March 31, 2012 and down 3% from $1.05 billion at December 31, 2011.

Total deposits at June 30, 2012 remained stable at $3.83 billion compared to $3.87 billion at March 31, 2012, and increased less than 1% from $3.82 billion at December 31, 2011. Core deposits (defined as demand, savings, money market accounts and certificates of deposit under $100,000) comprised 93% of total deposits, and were $3 . 57 billion at June 30, 2012, relatively unchanged from $3.59 billion at March 31, 2012, and an increase of 2% from $3.51 billion at December 31, 2011.
  
Total shareholder equity was $758.7 million at June 30, 2012, compared to $752.7 and $759.3 at March 30, 2012 and December 31, 2011, respectively. In accordance with the Company's recent capital and dividend strategies, total shareholders' equity has remained relatively unchanged over the past three quarters. Melanie Dressel commented, “Our high capital ratios put us in a good position to take advantage of strategic opportunities that may arise."
    
Asset Quality

At June 30, 2012, nonperforming noncovered assets were $67.1 million, decreases of 15% from $79.1 million at March 31, 2012, and 21% from $85.4 million at December 31, 2011. The decrease in nonperforming loans for the quarter was driven by payments of $7.2 million, charge-offs of $4.6 million and the return of $1.4 million of nonperforming loans to accrual status. In addition, noncovered other real estate owned (OREO) and other personal property owned (OPPO) were reduced by $5.5 million, as a result of $3.3 million in sales and $2.2 million in write-downs. These reductions were partially offset by new additions to nonperforming assets of $6.7 million, resulting in a net decrease in nonperforming, noncovered assets of $12.0 million.
 

4


The following table sets forth, at the dates indicated, information with respect to noncovered nonaccrual loans and total noncovered nonperforming assets.
 
 
June 30, 2012
 
March 31, 2012
 
December 31, 2011
 
 
(dollars in thousands)
Nonaccrual noncovered loans:
 
 
 
 
 
 
Commercial business
 
$
13,052

 
$
14,791

 
$
10,243

Real estate:
 
 
 
 
 
 
One-to-four family residential
 
2,244

 
2,624

 
2,696

Commercial and multifamily residential
 
23,302

 
24,872

 
19,485

Total real estate
 
25,546

 
27,496

 
22,181

Real estate construction:
 
 
 
 
 
 
One-to-four family residential
 
5,223

 
8,793

 
10,785

Commercial and multifamily residential
 
3,754

 
5,023

 
7,067

Total real estate construction
 
8,977

 
13,816

 
17,852

Consumer
 
1,890

 
1,449

 
3,207

Total nonaccrual loans
 
49,465

 
57,552

 
53,483

Noncovered other real estate owned and other personal property owned
 
17,608

 
21,571

 
31,905

Total nonperforming noncovered assets
 
$
67,073

 
$
79,123

 
$
85,388

For the quarter ended June 30, 2012, net loan charge-offs were $3.8 million, compared to $3.4 million for the same period a year ago, and $5.3 million last quarter. Net charge-offs were primarily centered in commercial business and commercial real estate loans.


5


The following table provides an analysis of the Company's allowance loan and lease losses at the dates and the periods indicated.

 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2012
 
2011
 
2012
 
2011
 
 
(in thousands)
Beginning balance
 
$
52,283

 
$
55,315

 
$
53,041

 
$
60,993

Charge-offs:
 
 
 
 
 
 
 
 
Commercial business
 
(2,044
)
 
(834
)
 
(4,403
)
 
(4,205
)
One-to-four family residential real estate
 
(334
)
 
(216
)
 
(449
)
 
(664
)
Commercial and multifamily residential real estate
 
(1,839
)
 
(1,554
)
 
(4,516
)
 
(1,919
)
One-to-four family residential real estate construction
 
(897
)
 
(805
)
 
(1,102
)
 
(2,232
)
Commercial and multifamily residential real estate construction
 
(93
)
 
(1,078
)
 
(93
)
 
(1,565
)
Consumer
 
(374
)
 
(271
)
 
(1,467
)
 
(1,196
)
Total charge-offs
 
(5,581
)
 
(4,758
)
 
(12,030
)
 
(11,781
)
Recoveries:
 
 
 
 
 
 
 
 
Commercial business
 
378

 
592

 
1,036

 
697

One-to-four family residential real estate
 
2

 
—

 
45

 
—

Commercial and multifamily residential real estate
 
822

 
13

 
892

 
86

One-to-four family residential real estate construction
 
455

 
700

 
502

 
1,804

Commercial and multifamily residential real estate construction
 
1

 
—

 
1

 
—

Consumer
 
86

 
45

 
459

 
108

Total recoveries
 
1,744

 
1,350

 
2,935

 
2,695

Net charge-offs
 
(3,837
)
 
(3,408
)
 
(9,095
)
 
(9,086
)
Provision charged to expense
 
3,750

 
2,150

 
8,250

 
2,150

Ending balance
 
$
52,196

 
$
54,057

 
$
52,196

 
$
54,057


For the second quarter of 2012, the company made a provision of $3.8 million for noncovered loan losses. For the comparable quarter last year the company made a provision of $2.2 million. The provision for noncovered loan losses were primarily driven by net charge offs experienced in the quarter and to a lesser extent by the $65 million in noncovered loan growth experienced during the quarter. The growth in noncovered loans was centered in commercial business loans and term commercial real estate loans.

The allowance for noncovered loan losses to period end loans was 2.14% at June 30, 2012 compared to 2.20% at March 31, 2012 and 2.26% at December 31, 2011.

    

6


Andy McDonald, Executive Vice President and Chief Credit Officer commented, “We are encouraged with our improving credit metrics, resulting in a decrease in our nonperforming assets for the past six consecutive quarters. However, with the ongoing lackluster national and international economies, we will continue to maintain a prudent level in our allowance for loan and lease losses.”


Second Quarter 2012 Operating Results

Quarter ended June 30, 2012

Net Interest Income
Net interest income for the second quarter of 2012 was $59.7 million, an increase of 21% from $49.4 million for the same quarter in 2011, primarily due to organic loan growth and the impact of our 2011 FDIC-assisted transactions.

Compared to the first quarter of 2012, net interest income decreased 11% from $67.1 million primarily due to the moderation of accretion income on acquired loans. During the second quarter of 2012, the Company recorded $15.0 million in accretion income on acquired loans compared to $22.4 million for the first quarter of 2012.
 
Noninterest Income (Loss)
Total noninterest income was $11.8 million for the second quarter of 2012, compared to $3.5 million a year earlier. The increase from the prior year was primarily due to the change in the FDIC loss-sharing asset, which accounted for $6.3 million of the increase. For the prior year period, the change in the FDIC loss-sharing asset was a $6.4 million reduction of noninterest income. For the second quarter of 2012, the change in the FDIC loss-sharing asset was a reduction of noninterest income of only $168 thousand due to the increase in income related to the impairment on the covered loans. Also contributing to the increase in noninterest income for the second quarter compared to the prior year was an increase in service charges and other fee income of $969 thousand. Service charges and other fee income increased due to the implementation of new fee schedules.
    

7


Compared to the first quarter of 2012, noninterest income increased 24%, from $9.6 million primarily due to the change in the FDIC loss-sharing asset, which accounted for $1.5 million of the increase. For the first quarter of 2012, the change in the FDIC loss-sharing asset was a reduction of noninterest income of $1.7 million, compared to $168 thousand for the second quarter of 2012.
    The following table reflects the components of the change in the FDIC loss-sharing asset for the three month periods indicated.
 
 
Three Months Ended
 
 
June 30,
 
March 31,
 
 
2012
 
2011
 
2012
 
 
(in thousands)
Adjustments reflected in income
 
 
 
 
Amortization, net
 
(9,851
)
 
(8,059
)
 
(13,873
)
Impairment
 
9,350

 
1,841

 
12,548

Sale of other real estate
 
(1,498
)
 
(1,149
)
 
(2,067
)
Write-downs of other real estate
 
1,732

 
443

 
1,629

Other
 
99

 
505

 
95

Change in FDIC loss-sharing asset
 
$
(168
)
 
$
(6,419
)
 
$
(1,668
)
Noninterest Expense
Total noninterest expense for the second quarter of 2012 was $39.8 million, an increase of 7% from $37.2 million for the same quarter in 2011. The increase was attributable to the additional operating expenses of the three FDIC-assisted bank acquisitions completed since May 2011. The most significant increases were in compensation and employee benefits, occupancy, and data processing. Compensation and employee benefits increased $1.5 million compared to the same period in 2011, primarily due to an increase in the number of employees related to our acquisitions. Occupancy expense increased $703 thousand mainly as a result of the addition of 17 acquired branch locations. Data processing increased $638 thousand due to the additional data processing costs associated with the recent FDIC-assisted bank acquisitions. These increases were partially offset by a $656 thousand reduction in FDIC clawback liability expense and a $591 thousand decrease in the cost of operation of other real estate owned.

Compared to the first quarter of 2012, noninterest expense declined $4.5 million, or 10%. The decline was attributable to the decrease of $2.5 million in other noninterest expense, which was primarily due to lower OPPO expenses during the second quarter of 2012. Also contributing to the decrease was a reduction in the net cost of operation of other real estate owned of $1.3 million and a decrease of $1.0 million in compensation and benefits.
     

8


    
Conference Call

Columbia's management will discuss the second quarter 2012 results on a conference call scheduled for Thursday, July 26, 2012 at 1:00 p.m. PDT. Interested parties may listen to this discussion by calling 1-866-378-3802; Conference ID code #92629197.

A conference call replay will be available from approximately 4:00 p.m. PDT on July 26, 2012 through midnight PDT on August 3, 2012. The conference call replay can be accessed by dialing 1-855-859-2056 and entering Conference ID code #92629197.

About Columbia     
Headquartered in Tacoma, Washington, Columbia Banking System, Inc. is the holding Company of Columbia State Bank, a Washington state-chartered full-service commercial bank. For the sixth consecutive year, the bank was named in 2012 as one of Puget Sound Business Journal's “Washington's Best Workplaces.”

 
Columbia Banking System has 102 banking offices, including 77 branches in Washington State and 25 branches in Oregon. Columbia Bank does business under the Bank of Astoria name in Astoria, Warrenton, Seaside, Cannon Beach, Manzanita and Tillamook in Oregon. More information about Columbia can be found on its website at www.columbiabank.com .

9


# # #


Note Regarding Forward-Looking Statements
This news release includes forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which management believes are a benefit to shareholders. These forward looking statements describe 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. The words “will,” “believe,” “expect,” “intend,” “should,” and “anticipate” and 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 risk and uncertainty 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, 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, factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following: (1) local, national and international economic conditions may be less favorable than expected or have a more direct and pronounced effect on Columbia than expected and adversely affect Columbia's ability to continue its internal growth at historical rates and maintain the quality of its earning assets; (2) changes in interest rates may reduce interest margins more than expected and negatively affect funding sources; (3) projected business increases following strategic expansion or opening or acquiring new branches may be lower than expected; (4) costs or difficulties related to the integration of acquisitions may be greater than expected; (5) competitive pressure among financial institutions may increase significantly; and (6) legislation or regulatory requirements or changes may adversely affect the businesses in which Columbia is engaged. 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. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The factors noted above and the risks and uncertainties described in our SEC filings should be considered when reading any forward-looking statements in this release.


10



FINANCIAL STATISTICS
 
 
 
 
 
 
 
 
 
 
 
 
 
Columbia Banking System, Inc.
 
Three Months Ended
 
Six Months Ended
 
 
 
 
 
Unaudited
 
June 30,
 
June 30,
 
 
 
 
 
 
 
2012
 
2011
 
2012
 
2011
 
 
 
 
 
Earnings
 
(in thousands except per share amounts)
 
 
 
 
 
Net interest income
 
$
59,701

 
$
49,375

 
$
126,764

 
$
99,824

 
 
 
 
 
Provision for loan and lease losses
 
$
3,750

 
$
2,150

 
$
8,250

 
$
2,150

 
 
 
 
 
Provision for losses on covered loans, net (5)
 
$
11,688

 
$
2,301

 
$
27,373

 
$
1,879

 
 
 
 
 
Noninterest income (loss)
 
$
11,828

 
$
3,542

 
$
21,402

 
$
(1,877
)
 
 
 
 
 
Noninterest expense
 
$
39,825

 
$
37,164

 
$
84,177

 
$
74,510

 
 
 
 
 
Net income
 
$
11,899

 
$
8,632

 
$
20,801

 
$
14,411

 
 
 
 
 
Per Common Share
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings (basic)
 
$
0.30

 
$
0.22

 
$
0.52

 
$
0.37

 
 
 
 
 
Earnings (diluted)
 
$
0.30

 
$
0.22

 
$
0.52

 
$
0.36

 
 
 
 
 
Book value
 
$
19.13

 
$
18.43

 
$
19.13

 
$
17.97

 
 
 
 
 
Averages
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
4,788,723

 
$
4,324,390

 
$
4,782,454

 
$
4,296,494

 
 
 
 
 
Interest-earning assets
 
$
4,194,281

 
$
3,719,558

 
$
4,167,048

 
$
3,676,351

 
 
 
 
 
Loans, including covered loans
 
$
2,895,436

 
$
2,439,439

 
$
2,877,980

 
$
2,413,899

 
 
 
 
 
Securities
 
$
1,029,337

 
$
988,839

 
$
1,027,385

 
$
878,712

 
 
 
 
 
Deposits
 
$
3,823,985

 
$
3,382,486

 
$
3,814,655

 
$
3,344,538

 
 
 
 
 
Core deposits
 
$
3,555,279

 
$
3,073,068

 
$
3,533,885

 
$
3,031,677

 
 
 
 
 
Interest-bearing deposits
 
$
2,682,092

 
$
2,479,485

 
$
2,677,502

 
$
2,454,790

 
 
 
 
 
Interest-bearing liabilities
 
$
2,820,857

 
$
2,647,990

 
$
2,818,359

 
$
2,621,987

 
 
 
 
 
Noninterest-bearing deposits
 
$
1,141,893

 
$
903,001

 
$
1,137,153

 
$
889,748

 
 
 
 
 
Shareholders' equity
 
$
758,391

 
$
719,165

 
$
760,038

 
$
714,748

 
 
 
 
 
Financial Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.00
%
 
0.80
%
 
0.87
%
 
0.68
%
 
 
 
 
 
Return on average common equity
 
6.31
%
 
4.81
%
 
5.50
%
 
4.07
%
 
 
 
 
 
Average equity to average assets
 
15.84
%
 
16.63
%
 
15.89
%
 
16.64
%
 
 
 
 
 
Net interest margin
 
5.88
%
 
5.49
%
 
6.27
%
 
5.64
%
 
 
 
 
 
Efficiency ratio (tax equivalent) (1)
 
68.54
%
 
69.49
%
 
70.00
%
 
71.35
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30,
 
December 31,
 
 
 
 
 
 
 
Period end
 
2012
 
2011
 
2011
 
 
 
 
 
 
 
Total assets
 
$
4,789,413

 
$
4,429,143

 
$
4,785,945

 
 
 
 
 
 
 
Covered assets, net
 
$
482,073

 
$
631,549

 
$
560,055

 
 
 
 
 
 
 
Loans, excluding covered loans, net
 
$
2,436,961

 
$
1,987,474

 
$
2,348,371

 
 
 
 
 
 
 
Allowance for noncovered loan and lease losses
 
$
52,196

 
$
54,057

 
$
53,041

 
 
 
 
 
 
 
Securities
 
$
1,019,978

 
$
1,008,559

 
$
1,050,325

 
 
 
 
 
 
 
Deposits
 
$
3,830,817

 
$
3,475,167

 
$
3,815,529

 
 
 
 
 
 
 
Core deposits
 
$
3,568,307

 
$
3,142,975

 
$
3,510,435

 
 
 
 
 
 
 
Shareholders' equity
 
$
758,712

 
$
727,680

 
$
759,338

 
 
 
 
 
 
 
Nonperforming, noncovered assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans
 
$
49,465

 
$
59,404

 
$
53,483

 
 
 
 
 
 
 
Other real estate owned ("OREO") and other personal property owned ("OPPO")
 
17,608

 
37,116

 
31,905

 
 
 
 
 
 
 
Total nonperforming, noncovered assets
 
$
67,073

 
$
96,520

 
$
85,388

 
 
 
 
 
 
 
Nonperforming assets to period-end noncovered loans + OREO and OPPO
 
2.73
%
 
4.77
%
 
3.59
%
 
 
 
 
 
 
 
Nonperforming loans to period-end noncovered loans
 
2.03
%
 
2.99
%
 
2.28
%
 
 
 
 
 
 
 
Nonperforming assets to period-end noncovered assets
 
1.56
%
 
2.54
%
 
2.02
%
 
 
 
 
 
 
 
Allowance for loan and lease losses to period-end noncovered loans
 
2.14
%
 
2.72
%
 
2.26
%
 
 
 
 
 
 
 
Allowance for loan and lease losses to nonperforming noncovered loans
 
105.52
%
 
91.00
%
 
99.17
%
 
 
 
 
 
 
 
Net noncovered loan charge-offs
 
$
9,094

(2)  
$
9,086

(3)  
$
15,352

(4)  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Noninterest expense, excluding net cost of operation of other real estate and FDIC clawback liability expense, divided by the sum of net interest income and noninterest income on a tax equivalent basis, excluding gain/loss on sale of investment securities, impairment charge on investment securities, gain on bank acquisition, incremental accretion income on the acquired loan portfolio and the change in FDIC indemnification asset.
 
 
 
 
 
(2) For the six months ended June 30, 2012.
 
 
 
 
 
(3) For the six months ended June 30, 2011.
 
 
 
 
 
 
 
 
 
 
 
 
 
(4) For the twelve months ended December 31, 2011.
 
 
 
 
 
 
 
 
 
 
 
 
 
(5) Provision for losses on covered loans was partially offset by $9.4 million and $1.8 million in income recorded to Change in FDIC loss-sharing asset in the Consolidated Statements of Income for the three months ended June 30, 2012 and 2011, respectively.
 
 
 
 
 

11


FINANCIAL STATISTICS
 
 
 
 
 
 
 
 
Columbia Banking System, Inc.
 
 
 
 
 
 
 
 
Unaudited
 
June 30,
 
December 31,
 
 
2012
 
2011
Loan Portfolio Composition
 
(dollars in thousands)
Noncovered loans:
 
 
 
 
 
 
 
 
Commercial business
 
$
1,111,440

 
45.6
 %
 
$
1,031,721

 
43.9
 %
Real estate:
 
 
 
 
 
 
 
 
One-to-four family residential
 
55,883

 
2.3
 %
 
64,491

 
2.8
 %
Commercial and multifamily residential
 
1,017,736

 
41.8
 %
 
998,165

 
42.5
 %
Total real estate
 
1,073,619

 
44.1
 %
 
1,062,656

 
45.3
 %
Real estate construction:
 
 
 
 
 
 
 
 
One-to-four family residential
 
47,417

 
1.9
 %
 
50,208

 
2.1
 %
Commercial and multifamily residential
 
48,765

 
2.0
 %
 
36,768

 
1.6
 %
Total real estate construction
 
96,182

 
3.9
 %
 
86,976

 
3.7
 %
Consumer
 
167,387

 
6.9
 %
 
183,235

 
7.8
 %
Subtotal loans
 
2,448,628

 
100.5
 %
 
2,364,588

 
100.7
 %
Less: Net unearned income
 
(11,667
)
 
(0.5
)%
 
(16,217
)
 
(0.7
)%
Total noncovered loans, net of unearned income
 
2,436,961

 
100.0
 %
 
2,348,371

 
100.0
 %
Less: Allowance for loan and lease losses
 
(52,196
)
 
 
 
(53,041
)
 
 
Noncovered loans, net
 
2,384,765

 
 
 
2,295,330

 
 
Covered loans, net of allowance for loan losses of ($31,784) and ($4,944), respectively
 
462,994

 
 
 
531,929

 
 
Total loans, net
 
$
2,847,759

 
 
 
$
2,827,259

 
 
Loans held for sale
 
$
2,088

 
 
 
$
2,148

 
 
 
 
 
 
 
 
 
 
 
 
 
June 30,
 
December 31,
 
 
2012
 
2011
Deposit Composition
 
(dollars in thousands)
Core deposits:
 
 
 
 
 
 
 
 
Demand and other non-interest bearing
 
$
1,159,462

 
30.3
 %
 
$
1,156,610

 
30.3
 %
Interest bearing demand
 
794,430

 
20.7
 %
 
735,340

 
19.3
 %
Money market
 
1,040,787

 
27.2
 %
 
1,031,664

 
27.0
 %
Savings
 
296,679

 
7.7
 %
 
283,416

 
7.4
 %
Certificates of deposit less than $100,000
 
276,949

 
7.2
 %
 
303,405

 
8.0
 %
Total core deposits
 
3,568,307

 
93.1
 %
 
3,510,435

 
92.0
 %
 
 
 
 
 
 
 
 
 
Certificates of deposit greater than $100,000
 
239,279

 
6.3
 %
 
262,731

 
6.9
 %
Certificates of deposit insured by CDARS®
 
23,062

 
0.6
 %
 
42,080

 
1.1
 %
Subtotal
 
3,830,648

 
100.0
 %
 
3,815,246

 
100.0
 %
Premium resulting from acquisition date fair value adjustment
 
169

 
 
 
283

 
 
Total deposits
 
$
3,830,817

 
 
 
$
3,815,529

 
 



12


FINANCIAL STATISTICS
 
 
 
 
 
 
 
 
Columbia Banking System, Inc.
 
 
 
 
 
 
 
 
Unaudited
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 30,
 
December 31,
 
 
2012
 
2011
 
 
OREO
 
OPPO
 
OREO
 
OPPO
OREO and OPPO Composition
 
(in thousands)
Covered
 
$
19,079

 
$
45

 
$
28,126

 
$
45

Noncovered
 
13,925

 
3,683

 
22,893

 
8,966

Total
 
$
33,004

 
$
3,728

 
$
51,019

 
$
9,011

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
 
 
June 30,
 
March 31,
 
 
OREO and OPPO Earnings Impact
 
2012
 
2011
 
2012
 
 
Net cost of operation of noncovered OREO
 
$
1,472

 
$
2,440

 
$
2,693

 
 
Net benefit of operation of covered OREO
 
(1,849
)
 
(2,226
)
 
(1,783
)
 
 
Net cost (benefit) of operation of OREO
 
$
(377
)
 
$
214

 
$
910

 
 
 
 
 
 
 
 
 
 
 
Noncovered OPPO expense, net
 
$
187

 
$
—

 
$
2,154

 
 
Covered OPPO expense (benefit), net
 
(10
)
 
—

 
2

 
 
OPPO expense, net (1)
 
$
177

 
$
—

 
$
2,156

 
 
 
 
 
 
 
 
 
 
 
(1) OPPO expense, net is included in Other noninterest expense in the Consolidated Statements of Income.



13


QUARTERLY FINANCIAL STATISTICS
 
 
 
 
 
 
 
 
 
 
Columbia Banking System, Inc.
 
Three Months Ended
Unaudited
 
June 30,
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
 
2012
 
2012
 
2011
 
2011
 
2011
 
 
(dollars in thousands except per share)
Earnings
 
 
Net interest income
 
$
59,701

 
$
67,063

 
$
72,124

 
$
64,788

 
$
49,375

Provision for loan and lease losses
 
$
3,750

 
$
4,500

 
$
4,750

 
$
500

 
$
2,150

Provision (recapture) for losses on covered loans
 
$
11,688

 
$
15,685

 
$
(3,960
)
 
$
433

 
$
2,301

Noninterest income (loss)
 
$
11,828

 
$
9,574

 
$
(9,602
)
 
$
2,196

 
$
3,542

Noninterest expense
 
$
39,825

 
$
44,352

 
$
41,314

 
$
39,935

 
$
37,164

Net income
 
$
11,899

 
$
8,902

 
$
14,754

 
$
18,872

 
$
8,632

Per Common Share
 
 
 
 
 
 
 
 
 
 
Earnings (basic)
 
$
0.30

 
$
0.22

 
$
0.37

 
$
0.48

 
$
0.22

Earnings (diluted)
 
$
0.30

 
$
0.22

 
$
0.37

 
$
0.48

 
$
0.22

Book value
 
$
19.13

 
$
18.97

 
$
19.23

 
$
18.99

 
$
18.43

Averages
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
4,788,723

 
$
4,776,186

 
$
4,755,222

 
$
4,680,901

 
$
4,324,390

Interest-earning assets
 
$
4,194,281

 
$
4,137,449

 
$
4,098,603

 
$
4,028,029

 
$
3,719,558

Loans, including covered loans
 
$
2,895,436

 
$
2,860,524

 
$
2,817,279

 
$
2,777,681

 
$
2,439,439

Securities
 
$
1,029,337

 
$
1,023,067

 
$
957,727

 
$
998,775

 
$
988,839

Deposits
 
$
3,823,985

 
$
3,805,324

 
$
3,791,169

 
$
3,678,931

 
$
3,382,486

Core deposits
 
$
3,555,279

 
$
3,512,490

 
$
3,472,023

 
$
3,332,234

 
$
3,073,068

Interest-bearing deposits
 
$
2,682,092

 
$
2,672,911

 
$
2,664,133

 
$
2,651,664

 
$
2,479,485

Interest-bearing liabilities
 
$
2,820,857

 
$
2,815,753

 
$
2,808,497

 
$
2,813,396

 
$
2,647,990

Noninterest-bearing deposits
 
$
1,141,893

 
$
1,132,413

 
$
1,127,036

 
$
1,027,268

 
$
903,001

Shareholders' equity
 
$
758,391

 
$
761,686

 
$
757,696

 
$
735,192

 
$
719,165

Financial Ratios
 
 
 
 
 
 
 
 
 
 
Return on average assets
 
1.00
%
 
0.75
%
 
1.23
%
 
1.60
%
 
0.80
%
Return on average common equity
 
6.31
%
 
4.70
%
 
7.73
%
 
10.18
%
 
4.81
%
Average equity to average assets
 
15.84
%
 
15.95
%
 
15.93
%
 
15.71
%
 
16.63
%
Net interest margin
 
5.88
%
 
6.67
%
 
7.14
%
 
6.53
%
 
5.49
%
Efficiency ratio (tax equivalent)
 
68.54
%
 
71.48
%
 
69.56
%
 
69.17
%
 
69.49
%
Period end
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
4,789,413

 
$
4,815,432

 
$
4,785,945

 
$
4,755,832

 
$
4,429,143

Covered assets, net
 
$
482,073

 
$
526,043

 
$
560,055

 
$
595,640

 
$
631,549

Loans, excluding covered loans, net
 
$
2,436,961

 
$
2,371,818

 
$
2,348,371

 
$
2,257,899

 
$
1,987,474

Allowance for noncovered loan and lease losses
 
$
52,196

 
$
52,283

 
$
53,041

 
$
50,422

 
$
54,057

Securities
 
$
1,019,978

 
$
1,021,428

 
$
1,050,325

 
$
1,018,069

 
$
1,008,559

Deposits
 
$
3,830,817

 
$
3,865,445

 
$
3,815,529

 
$
3,795,499

 
$
3,475,167

Core deposits
 
$
3,568,307

 
$
3,591,663

 
$
3,510,435

 
$
3,464,705

 
$
3,142,975

Shareholders' equity
 
$
758,712

 
$
752,703

 
$
759,338

 
$
749,966

 
$
727,680

Nonperforming, noncovered assets
 
 
 
 
 
 
 
 
 
 
Nonaccrual loans
 
$
49,465

 
$
57,552

 
$
53,483

 
$
55,183

 
$
59,404

OREO and OPPO
 
17,608

 
21,571

 
31,905

 
34,069

 
37,116

Total nonperforming, noncovered assets
 
$
67,073

 
$
79,123

 
$
85,388

 
$
89,252

 
$
96,520

Nonperforming assets to period-end noncovered loans + OREO and OPPO
 
2.73
%
 
3.31
%
 
3.59
%
 
3.89
%
 
4.77
%
Nonperforming loans to period-end noncovered loans
 
2.03
%
 
2.43
%
 
2.28
%
 
2.44
%
 
2.99
%
Nonperforming assets to period-end noncovered assets
 
1.56
%
 
1.84
%
 
2.02
%
 
2.15
%
 
2.54
%
Allowance for loan and lease losses to period-end noncovered loans
 
2.14
%
 
2.20
%
 
2.26
%
 
2.23
%
 
2.72
%
Allowance for loan and lease losses to nonperforming noncovered loans
 
105.52
%
 
90.84
%
 
99.17
%
 
91.37
%
 
91.00
%
Net noncovered loan charge-offs
 
$
3,836

 
$
5,258

 
$
2,131

 
$
4,135

 
$
3,408


14


CONSOLIDATED STATEMENTS OF INCOME
 
 
 
 
 
 
Columbia Banking System, Inc.
 
Three Months Ended
 
Six Months Ended
Unaudited
 
June 30,
 
June 30,
 
 
2012
 
2011
 
2012
 
2011
 
 
(in thousands except per share)
Interest Income
 
 
 
 
 
 
 
 
Loans
 
$
54,498

 
$
44,362

 
$
116,275

 
$
91,791

Taxable securities
 
4,951

 
6,247

 
10,196

 
10,664

Tax-exempt securities
 
2,495

 
2,516

 
5,020

 
4,983

Federal funds sold and deposits in banks
 
170

 
184

 
335

 
482

Total interest income
 
62,114

 
53,309

 
131,826

 
107,920

Interest Expense
 
 
 
 
 
 
 
 
Deposits
 
1,561

 
2,848

 
3,340

 
5,927

Federal Home Loan Bank advances
 
734

 
714

 
1,484

 
1,408

Long-term obligations
 
—

 
253

 
—

 
504

Other borrowings
 
118

 
119

 
238

 
257

Total interest expense
 
2,413

 
3,934

 
5,062

 
8,096

Net Interest Income
 
59,701

 
49,375

 
126,764

 
99,824

Provision for loan and lease losses
 
3,750

 
2,150

 
8,250

 
2,150

Provision for losses on covered loans, net
 
11,688

 
2,301

 
27,373

 
1,879

Net interest income after provision
 
44,263

 
44,924

 
91,141

 
95,795

Noninterest Income (Loss)
 
 
 
 
 
 
 
 
Service charges and other fees
 
7,436

 
6,467

 
14,613

 
12,755

Merchant services fees
 
2,095

 
1,808

 
4,113

 
3,441

Gain on sale of investment securities, net
 
—

 
—

 
62

 
—

Bank owned life insurance
 
719

 
528

 
1,430

 
1,033

Change in FDIC loss-sharing asset
 
(168
)
 
(6,419
)
 
(1,836
)
 
(21,193
)
Other
 
1,746

 
1,158

 
3,020

 
2,087

Total noninterest income (loss)
 
11,828

 
3,542

 
21,402

 
(1,877
)
Noninterest Expense
 
 
 
 
 
 
 
 
Compensation and employee benefits
 
20,966

 
19,459

 
42,961

 
38,380

Occupancy
 
5,091

 
4,388

 
10,424

 
8,785

Merchant processing
 
930

 
905

 
1,803

 
1,788

Advertising and promotion
 
1,119

 
1,012

 
2,001

 
1,913

Data processing and communications
 
2,551

 
1,913

 
4,764

 
3,837

Legal and professional fees
 
1,829

 
1,498

 
3,438

 
2,911

Taxes, licenses and fees
 
1,115

 
907

 
2,470

 
1,772

Regulatory premiums
 
925

 
1,279

 
1,785

 
2,979

Net cost (benefit) of operation of other real estate
 
(377
)
 
214

 
533

 
(228
)
Amortization of intangibles
 
1,119

 
955

 
2,269

 
1,939

FDIC clawback liability (recovery)
 
(208
)
 
448

 
(234
)
 
2,148

Other
 
4,765

 
4,186

 
11,963

 
8,286

Total noninterest expense
 
39,825

 
37,164

 
84,177

 
74,510

Income before income taxes
 
16,266

 
11,302

 
28,366

 
19,408

Provision for income taxes
 
4,367

 
2,670

 
7,565

 
4,997

Net Income
 
$
11,899

 
$
8,632

 
$
20,801

 
$
14,411

Earnings per common share
 
 
 
 
 
 
 
 
Basic
 
$
0.30

 
$
0.22

 
$
0.52

 
$
0.37

Diluted
 
$
0.30

 
$
0.22

 
$
0.52

 
$
0.36

Dividends paid per common share
 
$
0.22

 
$
0.05

 
$
0.59

 
$
0.08

Weighted average number of common shares outstanding
 
39,260

 
39,107

 
39,228

 
39,073

Weighted average number of diluted common shares outstanding
 
39,308

 
39,166

 
39,306

 
39,159



15


CONSOLIDATED BALANCE SHEETS
 
 
 
 
 
 
 
Columbia Banking System, Inc.
 
 
 
 
 
 
 
Unaudited
 
 
 
 
June 30,
 
December 31,
 
 
 
 
 
2012
 
2011
 
 
 
 
 
(in thousands)
ASSETS
 
 
Cash and due from banks
 
$
98,940

 
$
91,364

Interest-earning deposits with banks and federal funds sold
 
270,873

 
202,925

Total cash and cash equivalents
 
369,813

 
294,289

Securities available for sale at fair value (amortized cost of $956,636 and $987,560, respectively)
 
997,763

 
1,028,110

Federal Home Loan Bank stock at cost
 
22,215

 
22,215

Loans held for sale
 
2,088

 
2,148

Loans, excluding covered loans, net of unearned income of ($11,666) and ($16,217), respectively
 
2,436,961

 
2,348,371

Less: allowance for loan and lease losses
 
52,196

 
53,041

Loans, excluding covered loans, net
 
2,384,765

 
2,295,330

Covered loans, net of allowance for loan losses of ($31,784) and ($4,944), respectively
 
462,994

 
531,929

Total loans, net
 
2,847,759

 
2,827,259

FDIC loss-sharing asset
 
140,003

 
175,071

Interest receivable
 
15,560

 
15,287

Premises and equipment, net
 
116,400

 
107,899

Other real estate owned ($19,079 and $28,126 covered by Federal Deposit Insurance Corporation loss-share, respectively)
 
33,004

 
51,019

Goodwill
 
115,554

 
115,554

Core deposit intangible, net
 
17,896

 
20,166

Other assets
 
111,358

 
126,928

Total assets
 
$
4,789,413

 
$
4,785,945

LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
Deposits:
 
 
 
 
Noninterest-bearing
 
$
1,159,462

 
$
1,156,610

Interest-bearing
 
2,671,355

 
2,658,919

Total deposits
 
3,830,817

 
3,815,529

Federal Home Loan Bank advances
 
113,145

 
119,009

Securities sold under agreements to repurchase
 
25,000

 
25,000

Other liabilities
 
61,739

 
67,069

Total liabilities
 
4,030,701

 
4,026,607

Commitments and contingent liabilities
 
 
 
 
 
 
 
 
June 30,
 
December 31,
 
 
 
 
 
2012
 
2011
 
 
 
 
Common stock (no par value)
 
 
 
 
 
 
 
Authorized shares
63,033

 
63,033

 
 
 
 
Issued and outstanding
39,655

 
39,506

 
580,358

 
579,136

Retained earnings
 
152,519

 
155,069

Accumulated other comprehensive income
 
25,835

 
25,133

Total shareholders' equity
 
758,712

 
759,338

Total liabilities and shareholders' equity
 
$
4,789,413

 
$
4,785,945



16


Exhibit 99.2



FOR IMMEDIATE RELEASE
July 26, 2012

Contacts:      Melanie J. Dressel, President and
Chief Executive Officer
(253) 305-1911

Clint E. Stein, Senior Vice President
and Acting Chief Financial Officer
(253) 593-8304

Columbia Banking System Increases Regular Cash Dividend;
Declares Special Cash Dividend


TACOMA, Washington--- Columbia Banking System, Inc. (NASDAQ: COLB) announced that a quarterly cash dividend of $0.09 per common share will be paid on August 22, 2012 to shareholders of record as of the close of business on August 8, 2012. This is a 13% increase from $0.08 per share paid in the prior three quarters.

In addition, the Board of Directors declared a special cash dividend of $0.21 per common share, which will also be paid on August 22, 2012 to shareholders of record as of the close of business on August 8, 2012.

Melanie Dressel, President and Chief Executive Officer noted, “Our ongoing commitment is to actively manage our capital position. In light of our strong capital levels and second quarter earnings, we are pleased to pay a special cash dividend. Along with our regular dividend, this constitutes a full payout of earnings for the quarter.”







About Columbia     
Headquartered in Tacoma, Washington, Columbia Banking System, Inc. is the holding Company of Columbia State Bank, a Washington state-chartered full-service commercial bank. For the sixth consecutive year, the bank was named in 2012 as on of Puget Sound Business Journal's "Washington's Best Workplaces."
Columbia Banking System has 102 banking offices, including 77 branches in Washington State and 25 branches in Oregon. Columbia Bank does business under the Bank of Astoria name in Astoria, Warrenton, Seaside, Cannon Beach, Manzanita and Tillamook in Oregon. 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, which management believes are a benefit to shareholders. These forward looking statements describe 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. The words “will,” “believe,” “expect,” “intend,” “should,” and “anticipate” and 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 risk and uncertainty 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, 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, factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following: (1) local, national and international economic conditions may be less favorable than expected or have a more direct and pronounced effect on Columbia than expected and adversely affect Columbia's ability to continue its internal growth at historical rates and maintain the quality of its earning assets; (2) changes in interest rates may reduce interest margins more than expected and negatively affect funding sources; (3) projected business increases following strategic expansion or opening or acquiring new branches may be lower than expected; (4) costs or difficulties related to the integration of acquisitions may be greater than expected; (5) competitive pressure among financial institutions may increase significantly; and (6) legislation or regulatory requirements or changes may adversely affect the businesses in which Columbia is engaged. 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. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The factors noted above and the risks and uncertainties described in our SEC filings should be considered when reading any forward-looking statements in this release.

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