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Business Combinations | 12 Months Ended
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Dec. 31, 2012
Business Combinations [Abstract] |
Business Combination Disclosure [Text Block] | Business Combinations West Coast Bancorp On April 1, 2013, the Company completed its acquisition of West Coast Bancorp ("West Coast"). The Company acquired 100% of the voting equity interests of West Coast. The primary reason for the acquisition was to expand the Company's geographic footprint consistent with its ongoing growth strategy. The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting (formerly the purchase method). The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the April 1, 2013 acquisition date. Subsequent to the acquisition date, the amounts for other assets, other liabilities and goodwill have been retrospectively adjusted to reflect the removal of a liability that was recorded by West Coast, as well as the associated impacts to the deferred tax asset (other assets) and goodwill. The subsequent adjustment recorded was a decrease to other liabilities of $3.3 million, a decrease to other assets of $890 thousand and a decrease to goodwill of $2.4 million and no impact to previously reported net income. The application of the acquisition method of accounting resulted in the recognition of goodwill of $228.4 million and a core deposit intangible of $15.3 million, or 0.89% of core deposits. The goodwill represents the excess purchase price over the estimated fair value of the net assets acquired. The goodwill is generally not deductible for income tax purposes. The table below summarizes the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed:
|  | April 1, 2013
|  | (in thousands)
Purchase price as of April 1, 2013 |  | $ | 540,791 |
Recognized amounts of identifiable assets acquired and (liabilities assumed), at fair value: |  |
Cash and cash equivalents |  | $ | 110,440 |
Investment securities |  | 730,842 |
Federal Home Loan Bank stock |  | 11,824 |
Acquired loans |  | 1,407,798 |
Premises and equipment |  | 35,884 |
Other real estate owned |  | 14,708 |
Core deposit intangible |  | 15,257 |
Other assets |  | 75,820 |
Deposits |  | (1,883,407 | )
Federal Home Loan Bank advances |  | (128,885 | )
Junior subordinated debentures |  | (51,000 | )
Other liabilities |  | (26,888 | )
Total fair value of identifiable net assets |  | 312,393 |
Goodwill |  | $ | 228,398 |
See Note 10, Goodwill and Other Intangible Assets, for further discussion of the accounting for goodwill and other intangible assets. The operating results of the Company include the operating results produced by the acquired assets and assumed liabilities for the period April 1, 2013 to December 31, 2013. Disclosure of the amount of West Coast's revenue and net income (excluding integration costs) included in Columbia's consolidated income statement is impracticable due to the integration of the operations and accounting for this acquisition. The following table presents certain unaudited pro forma information for illustrative purposes only, for the years ended December 31, 2013 and 2012 as if West Coast had been acquired on January 1, 2012. The unaudited estimated pro forma information combines the historical results of West Coast with the Company's consolidated historical results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. The pro forma information is not indicative of what would have occurred had the acquisition occurred on January 1, 2012. In particular, no adjustments have been made to eliminate the impact of other-than-temporary impairment losses and losses recognized on the sale of securities that may not have been necessary had the investments securities been recorded at fair value as of January 1, 2012. The unaudited pro forma information does not consider any changes to the provision for credit losses resulting from recording loan assets at fair value. Additionally, Columbia expects to achieve further operating cost savings and other business synergies, including revenue growth, as a result of the acquisition which are not reflected in the pro forma amounts that follow. As a result, actual amounts will differ from the unaudited pro forma information presented.
|  | Unaudited Pro Forma
|  | Years Ended December 31,
|  | 2013 |  | 2012
|  | (in thousands)
Total revenues (net interest income plus noninterest income) |  | $ | 337,712 |  |  | $ | 420,167 |
Net income |  | $ | 76,496 |  |  | $ | 91,261 |
Earnings per share - basic |  | $ | 1.50 |  |  | $ | 1.79 |
Earnings per share - diluted |  | $ | 1.46 |  |  | $ | 1.74 |
In connection with the West Coast acquisition, Columbia recognized $25.5 million of acquisition-related expenses for the year ended December 31, 2013 and $1.8 million for the year ended December 31, 2012. The acquisition-related expenses were excluded from the table above. Bank of Whitman On August 5, 2011 the Bank acquired certain assets and assumed certain liabilities of the Bank of Whitman from the FDIC in an FDIC-assisted transaction. The Bank and the FDIC entered into a modified whole bank purchase and assumption agreement without loss share. The Bank of Whitman was a full service community bank headquartered in Colfax, Washington. We entered into this transaction to acquire 9 branches total in Adams, Asotin, Grant, Spokane, Walla Walla, and Whitman counties to assist us with filling in our geographic footprint in eastern Washington. We believe participating with the FDIC in this assisted transaction was, from an economical standpoint, advantageous to expansion through de novo branching. The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting (formerly the purchase method). The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the August 5, 2011 acquisition date. The application of the acquisition method of accounting resulted in the recognition of a bargain purchase gain, net of tax, of $1.8 million, which is included in the Gain on bank acquisition line item in the Consolidated Statements of Income, and a core deposit intangible of $3.9 million. The bargain purchase gain represents the excess of the estimated fair value of the assets acquired over the estimated fair value of the liabilities assumed and is influenced significantly by the FDIC-assisted transaction process. The core deposit intangible asset recognized is deductible for income tax purposes. The operating results of the Company include the operating results produced by the acquired assets and assumed liabilities for the period August 6, 2011 to December 31, 2013. Due to the exclusion of the majority of the non-performing loans and 11 branch locations, as well as the significant amount of fair value adjustments, historical results of the Bank of Whitman are not meaningful to the Company's results and thus no proforma information is presented. The table below displays the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed:
|  | August 5, 2011
|  | (in thousands)
Assets |  |
Cash and due from banks |  | $ | 52,072 |
Investment securities |  | 16,298 |
Federal Reserve Bank and Federal Home Loan Bank stock |  | 3,977 |
Acquired loans |  | 200,041 |
Accrued interest receivable |  | 1,975 |
Premises and equipment |  | 86 |
FDIC receivable |  | 156,710 |
Core deposit intangible |  | 3,943 |
Other assets |  | 2,447 |
Total assets acquired |  | $ | 437,549 |
Liabilities |  |
Deposits |  | $ | 401,127 |
Federal Home Loan Bank advances |  | 32,949 |
Accrued interest payable |  | 213 |
Deferred tax liability |  | 1,034 |
Other liabilities |  | 396 |
Total liabilities assumed |  | 435,719 |
Net assets acquired (after tax gain) |  | $ | 1,830 |
First Heritage Bank On May 27, 2011 the Bank acquired certain assets and assumed certain liabilities of First Heritage Bank from the FDIC in an FDIC-assisted transaction. As part of the Purchase and Assumption Agreement, the Bank and the FDIC entered into loss-sharing agreements (each, a “loss-sharing agreement” and collectively, the “loss-sharing agreements”), whereby the FDIC will cover a substantial portion of any future losses on loans (and related unfunded commitments), OREO and certain accrued interest on loans for up to 90 days. We refer to the acquired loans and OREO subject to the loss-sharing agreements collectively as “covered assets.” Under the terms of the loss-sharing agreements, the FDIC will absorb 80% of losses and share in 80% of loss recoveries. The loss-sharing provisions of the agreements for commercial and single family residential mortgage loans are in effect for five years and ten years, respectively, from the May 27, 2011 acquisition date and the loss recovery provisions for such loans are in effect for eight years and ten years, respectively, from the acquisition date. First Heritage Bank was a full service community bank headquartered in Snohomish, Washington that operated five branch locations in King and Snohomish Counties. We entered into this transaction to assist us with filling in our geographic footprint between Seattle and Bellingham, Washington and to support our recently expanded Bellingham banking team. We believe participating with the FDIC in this assisted transaction was, from an economical standpoint, advantageous to expansion through de novo branching. The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting (formerly the purchase method). The assets and liabilities, both tangible and intangible, were initially provisionally recorded at their estimated fair values as of the May 27, 2011 acquisition date pending completion of valuation adjustments related to acquired loans, OREO, the indemnification asset, and other assets. The initial amounts recorded for acquired loans, OREO, the indemnification asset, and other assets were $81.9 million, $8.3 million, $38.1 million, and $1.7 million, respectively. At December 31, 2011 these amounts were retrospectively adjusted resulting in a $369 thousand decrease to acquired loans, a $61 thousand decrease to OREO, a $427 thousand increase to the indemnification asset, and a $1.9 million increase to other assets. The application of the acquisition method of accounting resulted in the recognition of $4.0 million of goodwill and a core deposit intangible of $1.3 million. The goodwill represents the excess of the estimated fair value of the liabilities assumed over the estimated fair value of the assets acquired and is influenced significantly by the FDIC-assisted transaction process. The operating results of the Company include the operating results produced by the acquired assets and assumed liabilities for the period May 28, 2011 to December 31, 2013. Due primarily to the significant amount of fair value adjustments and the FDIC loss-sharing agreements put in place, historical results of First Heritage Bank are not meaningful to the Company’s results and thus no proforma information is presented. The table below displays the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed:
|  | May 27, 2011
|  | (in thousands)
Assets |  |
Cash and due from banks |  | $ | 4,688 |
Interest-earning deposits with banks |  | 6,689 |
Investment securities |  | 5,303 |
Federal Home Loan Bank stock |  | 477 |
Acquired loans |  | 81,488 |
Accrued interest receivable |  | 476 |
Premises and equipment |  | 5,339 |
FDIC receivable |  | 4,751 |
Other real estate owned covered by loss sharing |  | 8,225 |
Goodwill |  | 4,023 |
Core deposit intangible |  | 1,337 |
FDIC indemnification asset |  | 38,531 |
Other assets |  | 3,657 |
Total assets acquired |  | $ | 164,984 |
Liabilities |  |
Deposits |  | $ | 159,525 |
Federal Home Loan Bank advances |  | 5,003 |
Accrued interest payable |  | 421 |
Other liabilities |  | 35 |
Total liabilities assumed |  | $ | 164,984 |
Summit Bank On May 20, 2011 the Bank acquired certain assets and assumed certain liabilities of Summit Bank from the Federal Deposit Insurance Corporation (“FDIC”) in an FDIC-assisted transaction. As part of the Purchase and Assumption Agreement, the Bank and the FDIC entered into loss-sharing agreements (each, a “loss-sharing agreement” and collectively, the “loss-sharing agreements”), whereby the FDIC will cover a substantial portion of any future losses on loans (and related unfunded commitments), OREO and certain accrued interest on loans for up to 90 days. We refer to the acquired loans and OREO subject to the loss-sharing agreements collectively as “covered assets.” Under the terms of the loss-sharing agreements, the FDIC will absorb 80% of losses and share in 80% of loss recoveries. The loss-sharing provisions of the agreements for commercial and single family residential mortgage loans are in effect for five years and ten years, respectively, from the May 20, 2011 acquisition date and the loss recovery provisions for such loans are in effect for eight years and ten years, respectively, from the acquisition date. Summit Bank was a full service community bank headquartered in Burlington, Washington that operated three branch locations in Skagit County. We entered into this transaction to assist us with filling in our geographic footprint between Seattle and Bellingham, Washington and to support our recently expanded Bellingham banking team. We believe participating with the FDIC in this assisted transaction was, from an economical standpoint, advantageous to expansion through de novo branching. The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting (formerly the purchase method). The assets and liabilities, both tangible and intangible, were initially provisionally recorded at their estimated fair values as of the May 20, 2011 acquisition date pending completion of valuation adjustments related to acquired loans, OREO, the indemnification asset, and other assets. The initial amounts recorded for acquired loans, OREO, the indemnification asset, and other assets were $71.4 million, $2.7 million, $27.2 million, and $786 thousand, respectively. At December 31, 2011 these amounts were retrospectively adjusted resulting in a $1.7 million decrease to acquired loans, a $509 thousand decrease to OREO, a $3.0 million increase to the indemnification asset, and a $1.0 million increase to other assets. The application of the acquisition method of accounting resulted in the recognition of $1.9 million of goodwill and a core deposit intangible of $509 thousand. The goodwill represents the excess of the estimated fair value of the liabilities assumed over the estimated fair value of the assets acquired and is influenced significantly by the FDIC-assisted transaction process. The operating results of the Company include the operating results produced by the acquired assets and assumed liabilities for the period May 21, 2011 to December 31, 2013. Due primarily to the significant amount of fair value adjustments and the FDIC loss-sharing agreements put in place, historical results of Summit Bank are not meaningful to the Company’s results and thus no pro forma information is presented. The table below displays the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed:
|  | May 20, 2011
|  | (in thousands)
Assets |  |
Cash and due from banks |  | $ | 1,837 |
Interest-earning deposits with banks and federal funds sold |  | 14,198 |
Investment securities |  | 871 |
Federal Home Loan Bank stock |  | 406 |
Acquired loans |  | 69,783 |
Accrued interest receivable |  | 429 |
Premises and equipment |  | 42 |
FDIC receivable |  | 6,984 |
Other real estate owned covered by loss sharing |  | 2,162 |
Goodwill |  | 1,892 |
Core deposit intangible |  | 509 |
FDIC indemnification asset |  | 30,203 |
Other assets |  | 1,813 |
Total assets acquired |  | $ | 131,129 |
Liabilities |  |
Deposits |  | $ | 123,279 |
Federal Home Loan Bank advances |  | 7,772 |
Accrued interest payable |  | 71 |
Other liabilities |  | 7 |
Total liabilities assumed |  | $ | 131,129 |

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