Exhibit 99.1
 
FOR IMMEDIATE RELEASE
October 25, 2007

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

Gary R. Schminkey, Executive Vice President
and Chief Financial Officer (253) 305-1966
 
COLUMBIA BANKING SYSTEM ANNOUNCES INCREASED THIRD QUARTER 2007 EARNINGS;
EXCEEDS $3 BILLION IN ASSETS AND $2 BILLION IN LOANS
 
THIRD QUARTER HIGHLIGHTS
 
·
Net income of $9.3 million, up 11% from third quarter 2006; earnings per diluted share of $0.53
·
Results include acquisitions of Mountain Bank Holding Company and Town Center Bancorp, completed July 23, 2007.
·
Reached milestone of over $3 billion in assets, which were $3.12 billion, a 22% increase from $2.55 billion December 31, 2006.
·
Total loans were $2.21 billion, an increase of $504 million, or 29%, from December 31, 2006.
·
Asset quality remains good
·
Total deposits were $2.5 billion, up 22% from December 31, 2006.
·
Linked-quarter efficiency ratio improves to 59.23%
·
Columbia Bank attains #1 deposit market share in Pierce County; Bank of Astoria maintains #1 deposit market share in Clatsop County.
 
TACOMA, Washington----Columbia Banking System, Inc. (NASDAQ: COLB) today announced earnings for the third quarter 2007 of $9.3 million, an increase of 11% from $8.3 million for the third quarter of 2006. Earnings were $0.53 per diluted share, up from $0.52 per diluted share one year ago. Pro-forma earnings for the third quarter, which exclude nonrecurring expenses associated with the acquisitions of Mountain Bank Holding Company and Town Center Bancorp, were $9.5 million, resulting in pro-forma earnings per diluted share of $0.54. Revenue (net interest income plus noninterest income) was $36.5 million for the third quarter of 2007, up 20% from $30.5 million one year ago. Return on average equity and return on average tangible equity for the third quarter 2007 were 12.18% and 15.81%, respectively, compared to 13.88% and 16.32%, respectively, for the third quarter of the prior year. The decreases in return on equity and return on tangible equity for the quarter were primarily due to the increase in shareholder equity related to the two acquisitions in the third quarter of 2007. Return on average tangible equity, a non-GAAP performance measure, is used by Columbia’s management in recognition of the goodwill created by acquisitions, providing a more consistent comparison with pre-acquisition performance.


Third quarter 2007 results reflect the financial consolidation of Mountain Bank Holding Company and Town Center Bancorp, which were acquired on July 23, 2007; consequently, third quarter and year-to-date 2006 financial information does not include the results of the two organizations. For comparative purposes to prior periods, Mountain Bank Holding Company and Town Center Bancorp combined contributed $287 million in loans, $360 million in assets, and $305 million in deposits, all as of July 23, 2007.

Net income for the nine months ended September 30, 2007 increased $1.3 million to $25.1 million, up 6% from $23.8 million for the first nine months of 2006. On a diluted per share basis, net income for the nine months ended September 30, 2007 was $1.51, compared with $1.47 for the same period last year, an increase of 3%. Return on average equity and return on average tangible equity for the nine months ended September 30, 2007 were 12.92% and 16.03%, respectively, compared to 13.58% and 16.02%, respectively. for the same period of 2006. Revenue for the nine months ended September 30, 2007 was $99.8 million, up 9% from $91.4 million for the first nine months of 2006.

Melanie Dressel, President & Chief Executive Officer said, “We continue to experience good earnings growth due to increased interest income resulting from higher loan volumes, reflecting our strong internal growth as well as the impact of our recent acquisitions. This was a landmark quarter for Columbia, as we reached $3 billion in assets, $2 billion in loans, and closed two strategic acquisitions extending our geographic footprint into two important markets. We are beginning to benefit from the planned cost savings associated with these transactions, although it will take several months to complete the integration process. We are eager to build on these investments by offering a broader array of products and services to our new customers, enabling us to enhance and deepen these relationships.”

Ms. Dressel continued, “Maintaining the stability of our net interest margin at 4.4% was also a noteworthy achievement in light of the margin compression that many of our competitors and peers are experiencing. Columbia’s dedicated staff continued their commitment to enhancing and deepening customer relationships, resulting in organic growth in loans and deposits of approximately $217 million and $131 million, respectively, for the first nine months of 2007. As of June 30, 2007, Columbia Bank has the number one share of the deposit market in Pierce County, Washington, according to the FDIC Deposit Market Share Report. Bank of Astoria continues to maintain their number one status in their primary market while recently celebrating their 40th anniversary of service to communities along the northern coast of Oregon.”
 
 
At September 30, 2007, Columbia’s total assets were $3.12 billion, an increase of 22% from $2.55 billion at December 31, 2006. Total loans were $2.21 billion at September 30, 2007, up 29% from $1.71 billion at year-end 2006, and 34% from $1.66 billion at September 30, 2006. Total deposits increased to $2.48 billion at September 30, 2007, an increase of 22% from December 31, 2006. Core deposits totaled $1.64 billion at September 30, 2007, comprising 66% of total deposits.
 
Operating Results

Net Interest Income
 
Net interest income increased $4.4 million, or 18%, in the third quarter 2007 compared to the third quarter 2006. The increase is due to increased loans outstanding from new loan originations as well as loans derived from acquisitions. For the three months and nine months ended September 30, 2007, funding costs have increased as our core deposits have shifted within our existing portfolio toward higher cost core and non-core funding products. In addition, the deposits derived from our acquisitions were comprised of a greater percentage of non-core deposits. Columbia has maintained a stable net interest margin because we were able to offset the increased funding costs with higher yielding assets. The net interest margin was 4.40% for the third quarter of 2007, compared to 4.41% for the third quarter of 2006. On a linked quarterly basis, the net interest margin was 4.37% and 4.36%, respectively, for the first and second quarters of 2007. The 50 basis point reduction in the prime rate on September 18, 2007 had a fractional impact on our net interest income, because the rate change occurred so late in the third quarter. Due to our asset sensitive position, the full impact will not be realized until the fourth quarter, as we have over $650 million in loans tied to prime related indices which adjust on a daily basis.

Average interest-earning assets increased to $2.70 billion, or 18%, during the third quarter of 2007, compared with $2.29 billion during the third quarter of 2006. The yield on average interest-earning assets increased 44 basis points to 7.41% during the third quarter of 2007, from 6.97% for the same period in 2006.  Average interest-bearing liabilities increased to $2.18 billion from $1.80 billion last year. The cost of average interest-bearing liabilities increased 49 basis points to 3.74% in the third quarter of 2007, compared to 3.25% in the third quarter of 2006.


For the nine months ended September 30, 2007, net interest income increased 9% to $79.3 million from $73.0 million for the same period last year. During the first nine months of 2007, Columbia’s net interest margin decreased to 4.38% from 4.51% for the same period of 2006. Average interest-earning assets grew to $2.52 billion during the first nine months of 2007, compared with $2.25 billion for the same period of 2006. The yield on average interest-earning assets increased 47 basis points to 7.27% during the first nine months of 2007, from 6.80% in 2006.  In comparison, average interest-bearing liabilities grew to $2.00 billion compared with $1.76 billion for the first nine months of 2006.  The cost of average interest-bearing liabilities increased 71 basis points to 3.64% during the first nine months of 2007, compared to 2.93% for the same period in 2006.

Noninterest income
 
Total noninterest income for the third quarter 2007 was $7.6 million, an increase of 25% from $6.1 million a year ago. The increase in noninterest income is primarily due to increased service charges and other miscellaneous fees earned over a larger customer base. The increase in service charges is a result of a change in our deposit account fee structure combined with an increase in the number of deposit accounts. The increase in deposit accounts results from a combination of organic growth and accounts obtained from our two acquisitions which closed early in the third quarter. The increase in other miscellaneous fees is attributed to the two acquisitions and fees collected from increased activity within our wealth management advisory services and our customer interest rate swap program which we started during the second quarter of 2007. Fees earned during the first nine months of 2007 for wealth management advisory services within our CB Financial Services unit have increased $509,000, or 86%, over the same period in 2006. Total noninterest income for the first nine months of 2007 was $20.5 million, up from $18.3 million for the same period of 2006. These increases are primarily attributable to the same factors discussed above for the three month period.

Noninterest expense
 
Noninterest expense for the third quarter of 2007 was $22.4 million up from $18.1 million for the same period in 2006. The two acquisitions during the quarter represent approximately $2.1 million of the increase in noninterest expense inclusive of an estimated $300,000 of nonrecurring items. Ms. Dressel noted, “We are pleased that even with merger expenses, our efficiency ratio improved to 59.23% for the third quarter, from 63.39% in the first quarter 2007, and 60.04% in the second quarter of 2007.”


In addition, Other Noninterest Expense in the third quarter 2006 was decreased $611,000 by the favorable mark to market adjustments associated with our interest rate floor instruments. After considering the prior year adjustment for the interest rate floors and the effect of the acquisitions, the increase in noninterest expense on a comparative basis for the quarter approximates $1.6 million.

Noninterest expense for the first nine months of 2007 was $63.1 million, an increase of 9.5% from $57.6 million for the same period of 2006. During the second quarter 2006, Other Noninterest Expense was impacted $1.8 million by the unfavorable mark to market adjustments associated with our interest rate floor instruments. After considering the prior year-to-date net adjustments of $1.2 million for the interest rate floors, included in Other Noninterest Expense, and the effect of the acquisitions, the increase in noninterest expense on a comparative basis for the first nine months of 2007 approximates $4.6 million. This increase is largely attributed to costs associated with our expansion efforts within the King, Thurston and Whatcom County markets.

Nonperforming Assets and Loan Loss Provision 
 
During the third quarter of 2007, Columbia allocated $1.2 million to its provision for loan and lease losses, compared to $650,000 for the same period in 2006.  The increased allocation for the three months ending September 30, 2007 is due to moderate loan growth during the period.  In the third quarter of 2007, Columbia had total charge-offs of $528,000 and recoveries of $146,000, resulting in a net charge-off position of $382,000. The current quarter compares favorably to the same period last year when total charge-offs were $843,000 coupled with recoveries of $129,000, resulting in a net charge-off position of $714,000.

For the first nine months of 2007, the Company allocated $2.2 million to its provision for loan and lease losses, compared to $1.1 million for the same period in 2006. This increased allocation is consistent with the rate of loan growth for the first nine months of 2007 compared to the same period in 2006.   Year-to-date, the company’s organic increase in net loans has been approximately $217 million compared to $91 million during the prior year-to-date period.  For the first nine months of 2007, charge-offs were $854,000 and recoveries were $662,000, resulting in a year-to-date net charge-off position of $192,000, or 0.01% of total loans. The current year-to-date compares favorably to the same period last year when total charge-offs were $1.42 million coupled with recoveries of $405,000, resulting in a net charge-off position of $1.02 million. Ms. Dressel commented, “As the economy of the Pacific Northwest changes, we will maintain a prudent approach to credit quality, and expect to add to our provision for loan loss as appropriate to ensure we maintain adequate reserves.”


At September 30, 2007, Columbia’s ratio of nonperforming assets to total assets was 0.33%, compared to 0.20% of period-end assets one year ago. The increase in nonperforming assets during the quarter was centered in a single $4.9 million credit originated in October of 2006 in which Columbia Bank participates with another lender who acts as agent in the transaction.  The borrower is engaged in the business of selling residential lots to builders for the purpose of constructing single family residences.  The borrower’s inability to obtain final plat approval prior to the expiration of agreements for the sale of lots at a predetermined price combined with softening market conditions resulted in new agreements for the sale of lots at prices reduced from the original agreements. Given these developments, management believes the conservative course of action is to place the loan on non-accrual until a restructure of the debt is completed.  As a result, our ratio of the allowance for loan and lease losses to nonperforming loans declined to 248% at September 30, 2007 compared with 580% at December 31, 2006 and 427% at September 30, 2006.

Expansion Activities
 
The acquisitions of Mountain Bank Holding Company, and Town Center Bancorp closed on July 23, 2007, bringing Columbia’s number of branches to 53, located in nine counties in Washington and Oregon. These strategic acquisitions expand Columbia’s footprint into important markets. The Company will continue to look for opportunities to grow strategically through de novo expansion and accretive partnerships.

Columbia Bank’s previously announced Lacey Branch, which had been delayed by permitting issues, is currently under construction and is scheduled to open in the next few months. A new Bellingham office is slated to open during the fourth quarter of this year 

About Columbia 
 
Headquartered in Tacoma, Washington, Columbia Banking System, Inc. is a Tacoma-based bank holding company whose wholly owned banking subsidiaries are Columbia Bank and Bank of Astoria, which operate a combined total of 53 branches. Columbia Bank is a Washington state-chartered full-service commercial bank. With the July 23, 2007 completion of the acquisitions of Mountain Bank Holding Company and Town Center Bancorp, Columbia Bank has 48 banking offices in Pierce, King, Cowlitz, Kitsap and Thurston counties in Washington State, and Clackamas and Multnomah counties in Oregon. Included in Columbia Bank are former branches of Mt. Rainier National Bank, doing business as Mt. Rainier Bank, with 7 branches in King and Pierce counties. Bank of Astoria, a federally insured commercial bank headquartered in Astoria, Oregon, operates four branches in Clatsop County: Astoria, Warrenton, Seaside and Cannon Beach; and one branch in Manzanita in Tillamook County. 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, 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,” “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 SEC, factors that may cause actual results to differ materially from those contemplated by such forward looking statements include, among others, the following possibilities: (1) local, national and international economic conditions are 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 reduce interest margins more than expected and negatively affect funding sources; (3) projected business increases following strategic expansion or opening or acquiring new branches are lower than expected; (4) costs or difficulties related to the integration of acquisitions are greater than expected; (5) competitive pressure among financial institutions increases significantly; (6) legislation or regulatory requirements or changes adversely affect the businesses in which Columbia is engaged.

 
FINANCIAL STATISTICS
Columbia Banking System, Inc.
Unaudited
 
 
  
Three Months Ended
  
Nine Months Ended
  
 
  
September 30,
  
September 30,
  
(in thousands, except per share)
  
2007
  
2006
  
2007
  
2006
  
Earnings
                  
Net interest income
  
$
28,860
  
$
24,405
  
$
79,258
  
$
73,013
  
Provision for loan and lease losses
  
$
1,231
  
$
650
  
$
2,198
  
$
1,115
  
Noninterest income
 
$
7,631
  
$
6,108
  
$
20,549
  
$
18,348
  
Noninterest expense
  
$
22,425
  
$
18,098
  
$
63,093
  
$
57,574
  
Net income
 
$
9,256
  
$
8,335
  
$
25,083
  
$
23,762
  
Per Share
                          
Net income (basic)
  
$
0.53
  
$
0.52
  
$
1.52
  
$
1.49
  
Net income (diluted)
  
$
0.53
  
$
0.52
  
$
1.51
  
$
1.47
  
                           
Averages
                          
Total assets
  
$
2,969,197
  
$
2,504,371
  
$
2,738,099
  
$
2,458,431
  
Interest-earning assets
  
$
2,702,487
  
$
2,290,351
  
$
2,519,623
  
$
2,250,192
  
Loans
  
$
2,102,281
  
$
1,647,471
  
$
1,905,945
  
$
1,609,739
  
Securities
  
$
572,124
  
$
627,821
  
$
584,057
  
$
630,895
  
Deposits
  
$
2,382,881
  
$
1,975,103
  
$
2,159,495
  
$
1,960,387
  
Core deposits
  
$
1,610,523
  
$
1,433,641
  
$
1,514,175
  
$
1,424,671
  
Shareholders' Equity
  
$
301,499
  
$
238,272
  
$
273,731
  
$
234,015
  
                           
Financial Ratios
                          
Return on average assets
    
1.24
%
  
1.32
%
  
1.22
%
  
1.29
%
Return on average equity
    
12.18
%
  
13.88
%
  
12.92
%
  
13.58
%
Return on average tangible equity(1)
    
15.81
%
  
16.32
%
  
16.03
%
  
16.02
%
Average equity to average assets
   
10.15
%
  
9.51
%
  
9.48
%
  
9.52
%
Net interest margin
   
4.40
%
  
4.41
%
  
4.38
%
  
4.51
%
Efficiency ratio (tax equivalent) (2)
    
59.23
%
  
58.81
%
  
60.79
%
  
59.48
%
 
 
  
September 30,
  
December 31,
  
 
    
2007
    
2006
    
2006
  
Period end 
                    
Total assets
  
$
3,122,744
  
$
2,507,450
  
$
2,553,131
  
Loans
  
$
2,212,751
  
$
1,655,809
  
$
1,708,962
  
Allowance for loan and lease losses
  
$
25,380
  
$
20,926
  
$
20,182
  
Securities
  
$
577,712
  
$
611,497
  
$
605,133
  
Deposits
  
$
2,477,794
  
$
2,020,065
  
$
2,023,351
  
Core deposits
  
$
1,637,530
  
$
1,460,634
  
$
1,473,701
  
Shareholders' equity
  
$
329,969
  
$
245,801
  
$
252,347
  
                     
Book value per share
  
$
18.45
  
$
15.32
  
$
15.71
  
Tangible book value per share
  
$
12.79
  
$
13.27
  
$
13.68
  
                     
Nonperforming assets
                    
Nonaccrual loans
  
$
9,983
  
$
4,101
  
$
2,414
  
Restructured loans
    
257
    
804
    
1,066
  
Other personal property owned
    
—
    
—
    
—
  
Other real estate owned
    
181
    
—
    
—
  
Total nonperforming assets
  
$
10,421
 
$
4,905
 
$
3,480
 
                     
Nonperforming loans to period-end loans
    
0.46
%
  
0.30
%
  
0.20
%
Nonperforming assets to period-end assets
    
0.33
%
  
0.20
%
  
0.14
%
Allowance for loan and lease losses to period-end loans
    
1.15
%
  
1.26
%
  
1.18
%
Allowance for loan and lease losses to nonperforming loans
    
247.85
%
  
426.63
%
  
579.94
%
Allowance for loan and lease losses to nonperforming assets
    
243.55
%
  
426.63
%
  
579.94
%
Net loan charge-offs (recoveries)
  
$
192
(3)
$
1,018
(4)
$
2,712
(5)
 

(1)
Annualized net income, excluding core deposit intangible asset amortization, divided by average daily shareholders’ equity, excluding average goodwill and average core deposit intangible asset.
(2)
Noninterest 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, net cost (gain) of OREO and mark-to-market adjustments of interest rate floor instruments.
(3)
For the nine months ended September 30, 2007.
(4)
For the nine months ended September 30, 2006.
(5)
For the twelve months ended December 31, 2006.
 
 
FINANCIAL STATISTICS
Columbia Banking System, Inc.
Unaudited
 
 
  
Period End
  
(in thousands)
  
September 30,
  
December 31,
  
 
  
2007
  
2006
  
2006
  
Loan Portfolio Composition
              
Commercial business
  
$
732,195
  
$
600,615
  
$
617,899
  
                     
Real Estate:
                    
One-to-four family residential
    
55,233
    
49,507
    
51,277
  
Five or more family residential and commercial
    
872,342
    
704,452
    
687,635
  
Total Real Estate
    
927,575
    
753,959
    
738,912
  
                     
Real Estate Construction:
                    
One-to-four family residential
    
231,017
    
77,093
    
92,124
  
Five or more family residential and commercial
    
154,455
    
80,918
    
115,185
  
Total Real Estate Construction
    
385,472
    
158,011
    
207,309
  
                     
Consumer
    
171,786
    
145,873
    
147,782
  
Subtotal loans
    
2,217,028
    
1,658,458
    
1,711,902
  
Less: Deferred loan fees
    
(4,277
)
  
(2,649
)
  
(2,940
)
Total loans
  
$
2,212,751
  
$
1,655,809
  
$
1,708,962
  
                     
Loans held for sale
  
$
2,273
  
$
1,160
  
$
933
  
                     
Deposit Composition
                    
Demand and other noninterest bearing
  
$
474,600
  
$
455,773
  
$
432,293
  
                     
Interest bearing demand
    
451,282
    
395,281
    
414,198
  
                     
Money market
    
593,301
    
495,933
    
516,415
  
                     
Savings
    
118,347
    
113,647
    
110,795
  
                     
Certificates of deposit
    
840,264
    
559,431
    
549,650
  
Total deposits
  
$
2,477,794
  
$
2,020,065
  
$
2,023,351
  
 
 

QUARTERLY FINANCIAL STATISTICS
Columbia Banking System, Inc.
Unaudited
 
   
Three Months Ended
  
   
Sep 30
  
Jun 30
  
Mar 31
  
Dec 31
  
Sep 30
  
(in thousands, except per share)  
2007
  
2007
  
2007
  
2006
  
2006
  
Earnings
                      
Net interest income
  
$
28,860
  
$
25,695
  
$
24,703
  
$
24,750
  
$
24,405
  
Provision for loan and lease losses
  
$
1,231
  
$
329
  
$
638
  
$
950
  
$
650
  
Noninterest income
 
$
7,631
  
$
6,741
  
$
6,177
  
$
6,324
  
$
6,108
  
Noninterest expense
  
$
22,425
  
$
20,266
  
$
20,402
  
$
18,560
  
$
18,098
  
Net income
 
$
9,256
  
$
8,544
  
$
7,283
  
$
8,341
  
$
8,335
  
                                 
Per Share
                                
Net income (basic)
  
$
0.53
  
$
0.53
  
$
0.45
  
$
0.52
  
$
0.52
  
Net income (diluted)
  
$
0.53
  
$
0.53
  
$
0.45
  
$
0.52
  
$
0.52
  
Averages
                                
Total assets
  
$
2,969,197
  
$
2,654,863
  
$
2,586,025
  
$
2,517,836
  
$
2,504,371
  
Interest-earning assets
  
$
2,702,487
  
$
2,460,603
  
$
2,392,372
  
$
2,310,502
  
$
2,290,351
  
Loans
  
$
2,102,281
  
$
1,846,163
  
$
1,765,692
  
$
1,688,600
  
$
1,647,471
  
Securities
  
$
572,124
  
$
582,378
  
$
597,952
  
$
602,075
  
$
627,821
  
Deposits
  
$
2,382,881
  
$
2,090,273
  
$
2,001,136
  
$
2,024,108
  
$
1,975,103
  
Core deposits
  
$
1,610,523
  
$
1,485,966
  
$
1,444,210
  
$
1,459,281
  
$
1,433,641
  
Shareholders' Equity
  
$
301,499
  
$
262,905
  
$
256,292
  
$
249,202
  
$
238,272
  
Financial Ratios
                                
Return on average assets
    
1.24
%
  
1.29
%
  
1.14
%
  
1.31
%
  
1.32
%
Return on average equity
    
12.18
%
  
13.04
%
  
11.52
%
  
13.28
%
  
13.88
%
Return on average tangible equity
    
15.81
%
  
15.04
%
  
13.38
%
  
15.49
%
  
16.32
%
Average equity to average assets
    
10.15
%
  
9.90
%
  
9.91
%
  
9.90
%
  
9.51
%
Net interest margin
   
4.40
%
  
4.36
%
  
4.37
%
  
4.43
%
  
4.41
%
Efficiency ratio (tax equivalent)
    
59.23
%
  
60.04
%
  
63.39
%
  
57.41
%
  
58.81
%
Period end
                                
Total assets
  
$
3,122,744
  
$
2,660,946
  
$
2,676,204
  
$
2,553,131
  
$
2,507,450
  
Loans
  
$
2,212,751
  
$
1,859,592
  
$
1,833,852
  
$
1,708,962
  
$
1,655,809
  
Allowance for loan and lease losses
  
$
25,380
  
$
21,339
  
$
20,819
  
$
20,182
  
$
20,926
  
Securities
  
$
577,712
  
$
570,742
  
$
599,306
  
$
605,133
  
$
611,497
  
Deposits
  
$
2,477,794
  
$
2,117,325
  
$
2,081,026
  
$
2,023,351
  
$
2,020,065
  
Core deposits
  
$
1,637,530
  
$
1,472,206
  
$
1,518,797
  
$
1,473,701
  
$
1,460,634
  
Shareholders' equity
  
$
329,969
  
$
259,773
  
$
261,329
  
$
252,347
  
$
245,801
  
Book value per share
  
$
18.45
  
$
16.07
  
$
16.17
  
$
15.71
  
$
15.32
  
Tangible book value per share
  
$
12.79
  
$
14.06
  
$
14.16
  
$
13.68
  
$
13.27
  
Nonperforming assets
                                
Nonaccrual loans
  
$
9,983
  
$
4,972
  
$
2,580
  
$
2,414
  
$
4,101
  
Restructured loans
    
257
    
985
    
806
    
1,066
    
804
  
Other personal property owned
    
—
    
32
    
—
    
—
    
—
  
Other real estate owned
    
181
    
—
    
—
    
—
    
—
  
Total nonperforming assets
  
$
10,421
 
$
5,989
 
$
3,386
  
$
3,480
 
$
4,905
 
                                 
Nonperforming loans to period-end loans
    
0.46
%
  
0.32
%
  
0.18
%
  
0.20
%
  
0.30
%
Nonperforming assets to period-end assets
    
0.33
%
  
0.23
%
  
0.13
%
  
0.14
%
  
0.20
%
Allowance for loan and lease losses to period-end loans
    
1.15
%
  
1.15
%
  
1.14
%
  
1.18
%
  
1.26
%
Allowance for loan and lease losses to nonperforming loans
    
247.85
%
  
358.22
%
  
614.86
%
  
579.94
%
  
426.63
%
Allowance for loan and lease losses to nonperforming assets
    
243.55
%
  
356.30
%
  
614.86
%
  
579.94
%
  
426.63
%
Net loan charge-offs (recoveries)
 
$
382
  
$
(191
)
$
1
  
$
1,694
  
$
714
  
 
 
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
Columbia Banking System, Inc.
(Unaudited)
 
   
Three Months Ended
September 30,
  
Nine Months Ended
September 30,
  
(in thousands, except per share)   
2007
  
2006
  
2007
  
2006
  
                   
Interest Income
                  
Loans
  
$
42,353
  
$
32,010
  
$
112,607
  
$
90,982
  
Taxable securities
    
4,625
    
5,019
    
14,067
    
15,185
  
Tax-exempt securities
    
2,005
    
1,944
    
5,925
    
5,124
  
Federal funds sold and deposits with banks
    
395
    
193
    
1,180
    
354
  
Total interest income
    
49,378
    
39,166
    
133,779
    
111,645
  
                           
Interest Expense
                          
Deposits
    
16,841
    
10,868
    
42,617
    
28,767
  
Federal Home Loan Bank advances
    
2,454
    
3,370
    
8,117
    
8,344
  
Long-term obligations
   
584
    
519
    
1,604
    
1,470
  
Other borrowings
   
639
    
4
    
2,183
    
51
  
Total interest expense
    
20,518
    
14,761
    
54,521
    
38,632
  
                           
Net Interest Income
    
28,860
    
24,405
    
79,258
    
73,013
  
Provision for loan and lease losses
    
1,231
    
650
    
2,198
    
1,115
  
Net interest income after provision for loan and lease losses
    
27,629
    
23,755
    
77,060
    
71,898
  
                           
Noninterest Income
                          
Service charges and other fees
    
3,561
    
2,891
    
9,813
    
8,632
  
Merchant services fees
    
2,251
    
2,154
    
6,344
    
6,366
  
Gain on sale of securities available for sale, net
    
—
    
—
    
—
    
10
 
Bank owned life insurance (“BOLI”)
    
502
    
427
    
1,379
    
1,260
  
Other
    
1,317
    
636
    
3,013
    
2,080
  
Total noninterest income
    
7,631
    
6,108
    
20,549
    
18,348
  
                           
Noninterest Expense
                          
Compensation and employee benefits
    
12,159
    
9,878
    
34,365
    
28,973
  
Occupancy
    
3,241
    
2,735
    
9,023
    
8,068
  
Merchant processing
    
880
    
881
    
2,587
    
2,552
  
Advertising and promotion
    
575
    
608
    
1,779
    
2,114
  
Data processing
    
743
    
475
    
1,863
    
1,795
  
Legal & professional services
    
695
    
580
    
2,205
    
1,547
  
Taxes, licenses & fees
    
773
    
637
    
2,089
    
1,873
  
Gain on sale of other real estate owned, net
    
—
    
—
    
—
    
(11)-
  
Other
    
3,359
    
2,304
    
9,182
    
10,663
  
Total noninterest expense
    
22,425
    
18,098
    
63,093
    
57,574
  
Income before income taxes
    
12,835
    
11,765
    
34,516
    
32,672
  
Provision for income taxes
    
3,579
    
3,430
    
9,433
    
8,910
  
Net Income
   
9,256
  
$
8,335
  
$
25,083
  
$
23,762
  
                           
Net income per common share:
                          
Basic
  
$
.53
  
$
.52
  
$
1.52
  
$
1.49
  
Diluted
  
$
.53
  
$
.52
  
$
1.51
  
$
1.47
  
Dividend paid per common share
  
$
0.17
  
$
0.15
  
$
0.49
  
$
0.42
  
Average number of common shares outstanding
    
17,339
    
15,981
    
16,472
    
15,931
  
Average number of diluted common shares outstanding
    
17,533
    
16,143
    
16,636
    
16,135
  
 
 
CONSOLIDATED CONDENSED BALANCE SHEETS
Columbia Banking System, Inc.
(Unaudited)
 
(in thousands)  
September 30,
2007
  
December 31,
2006
  
Assets
          
Cash and due from banks
  
$
82,760
  
$
76,365
  
Interest-earning deposits with banks
    
6,695
    
13,979
  
Federal funds sold
    
15,000
    
14,000
  
Total cash and cash equivalents
    
104,455
    
104,344
  
               
Securities available for sale at fair value (amortized cost of $567,804 and $598,703 respectively)
    
564,861
    
592,858
  
Securities held to maturity at cost (fair value of $1,290 and $1,871 respectively)
    
1,245
    
1,822
  
Federal Home Loan Bank stock at cost
    
11,606
    
10,453
  
Loans held for sale
    
2,273
    
933
  
Loans, net of deferred loan fees of ($4,277) and ($2,940), respectively
    
2,212,751
    
1,708,962
  
Less: allowance for loan and lease losses
    
25,380
    
20,182
  
Loans, net
    
2,187,371
    
1,688,780
  
               
Interest receivable
    
16,292
    
12,549
  
Premises and equipment, net
    
55,745
    
44,635
  
Other real estate owned
    
181
    
—
  
Goodwill
    
93,737
    
29,723
  
Other assets
    
84,978
    
67,034
  
Total Assets
  
$
3,122,744
  
$
2,553,131
  
               
Liabilities and Shareholders’ Equity
              
Deposits:
              
Noninterest-bearing
  
$
474,600
  
$
432,293
  
Interest-bearing
    
2,003,194
    
1,591,058
  
Total deposits
    
2,477,794
    
2,023,351
  
               
Short-term borrowings:
              
Federal Home Loan Bank advances
    
252,275
    
205,800
  
Securities sold under agreements to repurchase
    
—
    
20,000
  
Other borrowings
    
208
    
198
  
Total short-term borrowings
    
252,483
    
225,998
  
Long-term subordinated debt
    
25,498
    
22,378
  
Other liabilities
    
37,000
    
29,057
  
Total liabilities
    
2,792,775
    
2,300,784
  
               
Commitments and contingent liabilities
    
—
    
—
  
Shareholders’ equity:
              
Preferred stock (no par value)
              
Authorized, 2 million shares; none outstanding
    
—
    
—
  
 
   
September 30,
  
December 31,
          
 
  
2007
  
2006
          
Common stock (no par value)
                          
Authorized shares
    
63,034
    
63,034
              
Issued and outstanding
    
17,882
    
16,060
    
224,804
    
166,763
  
Retained earnings
                
105,913
    
89,037
  
Accumulated other comprehensive loss
                
(748
)
  
(3,453
)
               
329,969
    
252,347
  
Total Liabilities and Shareholders’ Equity
              
$
3,122,744
  
$
2,553,131