b8k.htm

For the quarter ended June 30, 2010, net loan charge-offs were approximately $10.7 million, compared to $16.4 million for the same period a year ago, and $11.5 million during the first quarter of 2010. Charge-offs for the quarter were primarily commercial business and residential construction, land and acquisition loans.

The following table provides an analysis of the Company’s allowance for loan and lease losses at the dates and the periods indicated:

	Three Months Ended June 30,
(in thousands)	2010			2009
Beginning balance	$	56,981		$	44,249
Charge-offs:
Commercial business		(5,428	)		(755	)
One-to-four family residential		(104	)		(220	)
Commercial and five-or-more family residential		(499	)		(682	)
One-to-four family residential construction		(3,002	)		(9,759	)
Commercial and five-or-more family residential construction		(726	)		(4,697	)
Consumer		(1,314	)		(684	)
Total charge-offs		(11,073	)		(16,797	)
Recoveries
Commercial business		132			363
One-to-four family residential		15			-
Commercial and five-or-more family residential		3			-
One-to-four family residential construction		141			52
Consumer		49			13
Total recoveries		340			428
Net charge-offs		(10,733	)		(16,369	)
Provision charged to expense		13,500			21,000
Ending balance	$	59,748		$	48,880
Total noncovered loans, net at end of period	$	1,945,972		$	2,119,443
Allowance for loan losses to period-end noncovered loans		3.07	%		2.31	%

For the second quarter 2010, the provision for loan losses was $13.5 million compared to $21.0 million for the same quarter last year, and $15.0 million for the prior two quarters. The allowance for loan losses to non-covered period-end loans was 3.07% at June 30, 2010 compared to 2.66% and 2.31% at December 31, 2009 and June 30, 2009, respectively.

Columbia’s provision for loan losses reflects management’s continuing evaluation of the loan portfolio’s credit quality, which is affected by a broad range of economic metrics. Additional factors affecting the provision include, but are not limited to, net-loan charge-offs, non-accrual loans, specific reserves, risk-rating migration and general economic factors.

Non-covered past due loans were $12.0 million at June 30, 2010, or 0.62% of total non-covered loans compared to $16.4 million, or 0.85% of total loans, as of March 31, 2010 and $9.1 million, or 0.45% of total loans, as of December 31, 2009.

Ms. Dressel commented. “As we have stated over the past few months, we believe the economic recovery will be slow, resulting in problem credits shifting away from construction assets and into commercial real estate and commercial business loans. Although the reduction in net charge-offs is a hopeful sign, we look forward to seeing more stabilization in the economy, which should result in a downward trend in our nonperforming loans. In the interim, we will be proactive, as always, in managing our loan portfolio.”

Operating Results

Quarter ended June 30, 2010

Net Interest Income

Net interest income for the second quarter of 2010 was $40.7 million, an increase of 43% from $28.5 million for the same quarter in 2009, primarily due to the impact of the addition of Columbia River Bank and American Marine Bank loan portfolios. The Company’s net interest margin increased to 4.66% in the second quarter of 2010, from 4.38% for the same quarter last year. The net interest margin was negatively impacted by interest reversals for the quarter ended June 30, 2010 related to noncovered nonaccrual loans, and by the short-term investment of the proceeds of the May, 2010 capital raise. However, the net interest margin was also positively impacted by accretion of the discount on the loan portfolios acquired in the two FDIC-assisted transactions.

Average interest-earning assets were $3.62 billion during the quarter, an increase of 33% compared with $2.73 billion during the same quarter of 2009. The yield on average interest-earning assets decreased 15 basis points (a basis point equals 1/100 of 1%) to 5.26% during the second quarter compared with 5.41% during the same quarter of 2009. During the same period, average interest-bearing liabilities increased to $2.66 billion, or 28%, from $2.07 billion in the second quarter of 2009. The cost of average interest-bearing liabilities decreased 53 basis points to 0.82% during the quarter, from 1.35% in the same quarter of 2009.

Noninterest Income

Noninterest income was $13.2 million, compared to $7.0 million in the second quarter of last year. The increase was primarily due to $3.4 million of accretion income to increase the FDIC indemnification asset. In addition, noninterest income was affected by an increase of $2.9 million in service charges and other fees primarily attributable to the addition of Columbia River Bank and American Marine Bank.

Noninterest Expense

Total noninterest expense for the second quarter of 2010 was $34.7 million, an increase of 37% from $25.3 million for the same quarter in 2009. The increase was primarily due to the addition of operating expenses of Columbia River Bank and American Marine Bank, both acquired in January 2010. In addition to the normalized operating expenses for these two acquisitions, we expect expenses to continue to be elevated as we finalize the integration of the two banks, open new offices and invest in teams of bankers as we take advantage of opportunities in our markets.

Organizational Update

Ms. Dressel commented, “We continue to be pleased with the positive response from customers in the new communities we serve in both Oregon and Washington. I would like to express my thanks to all our employees involved in the successful conversion of the former Columbia River Bank to our system during the second quarter; the transition went smoothly. We anticipate the same for the conversion of the former American Marine Bank, which is scheduled for later this quarter.”

Ms. Dressel continued “Our new downtown Portland office, which houses business bankers and a full-service branch in Fox Tower, opened during the second quarter. To support our efforts to reach new customers in relatively untapped markets for us, we have also added two teams of business bankers, who are based in the Salem, Oregon area and the Snohomish, Skagit and Whatcom counties in northwest Washington. Our investment in bringing these talented bankers on board will provide local experience and a customer-centric approach. To help fill in our geographic footprint between Seattle and Bellingham, we

anticipate opening two additional branches in northwest Washington, and will apply for regulatory approval when appropriate locations are determined.”

“In addition to our core value of excellent customer service, it is important for us to provide a great place to work for the people who provide that service,” Ms. Dressel noted. “We are very gratified that we were recently awarded third place in the large company category for Seattle Business Magazine’s 2010 Washington’s 100 Best Companies to Work For.”

Cash Dividend Announcement

The Board of Directors has announced a quarterly cash dividend of $0.01 per common share, which will be paid on August 25, 2010 to shareholders of record as of the close of business on August 11, 2010.

Conference Call

Columbia’s management will discuss the second quarter results on a conference call scheduled for Thursday, July 29, 2010 at 1:00 p.m. PDT (4:00 p.m. EDT). Interested parties may listen to this discussion by calling 1-888-318-7969; Conference ID code #88090193.

A conference call replay will be available from approximately 4:00 p.m. PDT on

July 29, 2010, through midnight PDT on August 5, 2010. The conference call replay can be accessed by dialing 1-800-642-1687 and entering Conference ID code #88090193.

About Columbia

Headquartered in Tacoma, Washington, Columbia Banking System, Inc. is the holding company of Columbia Bank, a Washington state-chartered full-service commercial bank which was awarded third place in the large employer category by Seattle Business Magazine’s 100 Best Companies to Work For 2010 and was designated one of Puget Sound Business Journal’s “Washington’s Best Workplaces 2009”.

With the January, 2010 FDIC-assisted acquisitions of Columbia River Bank and American Marine Bank, Columbia Banking System has 83 banking offices, including 59 branches in Washington State and 24 branches in Oregon. Columbia Bank does business under the Bank of Astoria name at the Bank of Astoria’s

former branches located in Astoria, Warrenton, Seaside, Cannon Beach, Manzanita and Tillamook. 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 neces sarily 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 tha n 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.

FINANCIAL STATISTICS
Columbia Banking System, Inc.	Three Months Ended								Six Months Ended
Unaudited	June 30,								June 30,
(in thousands except per share)	2010				2009				2010				2009
Earnings
Net interest income	$	40,732			$	28,531			$	79,006			$	56,434
Provision for loan and lease losses	$	13,500			$	21,000			$	28,500			$	32,000
Noninterest income	$	13,237			$	7,000			$	31,710			$	13,974
Noninterest expense	$	34,745			$	25,314			$	68,642			$	48,495
Net income (loss)	$	5,056			$	(5,530	)		$	12,972			$	(4,018	)
Net income (loss) applicable to common shareholders	$	3,946			$	(6,631	)		$	10,755			$	(6,212	)
Per Common Share
Earnings (loss) (basic)	$	0.11			$	(0.37	)		$	0.34			$	(0.35	)
Earnings (loss) (diluted)	$	0.11			$	(0.37	)		$	0.34			$	(0.35	)
Averages
Total assets	$	4,327,894			$	3,024,491			$	4,137,525			$	3,041,084
Interest-earning assets	$	3,624,548			$	2,728,086			$	3,497,103			$	2,751,045
Loans	$	2,550,813			$	2,159,415			$	2,495,919			$	2,188,500
Securities	$	728,169			$	554,270			$	719,457			$	546,867
Deposits	$	3,303,661			$	2,337,385			$	3,220,268			$	2,331,153
Core deposits	$	2,820,378			$	1,893,419			$	2,714,914			$	1,880,268
Interest-bearing deposits	$	2,487,757			$	1,850,193			$	2,441,914			$	1,859,622
Interest-bearing liabilities	$	2,663,584			$	2,073,750			$	2,617,840			$	2,104,228
Noninterest-bearing deposits	$	815,904			$	487,192			$	778,354			$	471,532
Shareholders' equity	$	684,929			$	417,961			$	612,793			$	418,852
Financial Ratios
Return on average assets		0.47	%			-0.73	%			0.63	%			-0.27	%
Return on average common equity		2.59	%			-7.73	%			4.03	%			-3.63	%
Average equity to average assets		15.83	%			13.82	%			14.81	%			13.77	%
Net interest margin		4.66	%			4.38	%			4.72	%			4.32	%
Efficiency ratio (tax equivalent)(1)		68.15	%			63.79	%			67.61	%			63.69	%
	June 30,								December 31,
Period End	2010				2009				2009
Total assets, including covered assets	$	4,289,115			$	3,021,857			$	3,200,930
Covered assets	$	599,306			$	- -			$	- -
Loans, excluding covered loans	$	1,945,972			$	2,119,443			$	2,008,884
Allowance for loan and lease losses	$	59,748			$	48,880			$	53,478
Securities	$	727,825			$	558,011			$	631,645
Deposits	$	3,284,947			$	2,353,326			$	2,482,705
Core deposits	$	2,831,319			$	1,932,771			$	2,072,821
Shareholders' equity	$	775,295			$	411,871			$	528,139
Book value per common share	$	17.83			$	18.50			$	16.13
Nonperforming assets
Nonaccrual loans, excluding covered assets	$	108,409			$	127,767			$	110,431
Restructured loans accruing interest, excluding covered assets		687				- -				60
Noncovered real estate owned and other personal property owned		22,814				8,369				19,037
Total nonperforming assets, excluding covered assets	$	131,910			$	136,136			$	129,528
Nonperforming loans to period-end loans, excluding covered loans		5.61	%			6.03	%			5.50	%
Nonperforming assets to period-end assets, excluding covered assets		3.57	%			4.51	%			4.05	%
Allowance for loan and lease losses to period-end loans, excluding covered loans		3.07	%			2.31	%			2.66	%
Allowance for loan and lease losses to nonperforming loans, excluding covered loans		54.77	%			38.26	%			48.40	%
Allowance for loan and lease losses to nonperforming assets, excluding covered assets		45.29	%			35.91	%			41.29	%
Net loan charge-offs	$	22,230		(2)	$	25,867		(3)	$	52,769		(4)

(1) Noninterest expense, excluding net cost of operation of other real estate divided by the sum of net interest income and
noninterest income on a tax equivalent basis, excluding gain/loss on sale of investment securities, proceeds from redemption
of Visa and Mastercard shares, gain on bank acquisition and the decrease in FDIC indemnification asset and FDIC receivable.
(2) For the six months ended June 30, 2010.
(3) For the six months ended June 30, 2009.
(4) For the twelve months ended December 31, 2009.

FINANCIAL STATISTICS
Columbia Banking System, Inc.
Unaudited	June 30,
(in thousands)	2010					2009
Loan Portfolio Composition
Loans not covered under FDIC loss share agreements:
Commercial business	$	756,796		38.9	%	$	789,166		37.2	%
Real Estate:
One-to-four family residential		56,554		2.9	%		56,494		2.7	%
Five or more family residential and commercial		821,504		42.2	%		857,181		40.4	%
Total Real Estate		878,058		45.1	%		913,675		43.1	%
Real Estate Construction:
One-to-four family residential		85,151		4.4	%		154,299		7.3	%
Five or more family residential and commercial		33,438		1.7	%		56,124		2.6	%
Total Real Estate Construction		118,589		6.1	%		210,423		9.9	%
Consumer		196,576		10.1	%		210,457		9.9	%
Subtotal loans		1,950,019		100.2	%		2,123,721		100.2	%
Less: Deferred loan fees		(4,047	)	-0.2	%		(4,278	)	-0.2	%
Total loans not covered under FDIC loss share agreements, net of deferred fees		1,945,972		100.0	%		2,119,443		100.0	%
Loans covered under FDIC loss share agreements:
Covered loans		584,954					- -
Total loans, net	$	2,530,926				$	2,119,443
Loans held for sale	$	- -				$	2,272


	June 30,
	2010					2009
Deposit Composition
Core deposits:
Demand and other non-interest bearing	$	835,356		25.4	%	$	491,617		20.2	%
Interest bearing demand		648,263		19.7	%		456,388		19.4	%
Money market		831,059		25.3	%		576,594		22.6	%
Savings		200,806		6.1	%		134,631		5.7	%
Certificates of deposit less than $100,000		315,835		9.6	%		273,541		12.0	%
Total core deposits		2,831,319		86.2	%		1,932,771		79.9	%
Certificates of deposit greater than $100,000		354,780		10.8	%		268,308		13.4	%
Wholesale certificates of deposit (CDARS®)		74,242		2.3	%		92,035		4.1	%
Wholesale certificates of deposit		23,155		0.7	%		60,212		2.6	%
Subtotal		3,283,496		100.0	%		2,353,326		100.0	%
Premium resulting from acquisition date fair value adjustment		1,451					- -
Total Deposits	$	3,284,947				$	2,353,326

Columbia Banking System, Inc.	Three Months Ended
Unaudited	Jun 30			Mar 31			Dec 31			Sep 30			Jun 30
(in thousands except per share)	2010			2010			2009			2009			2009
Earnings
Net interest income	$	40,732		$	38,274		$	29,800		$	29,118		$	28,531
Provision for loan and lease losses	$	13,500		$	15,000		$	15,000		$	16,500		$	21,000
Noninterest income	$	13,237		$	18,473		$	8,526		$	7,190		$	7,000
Noninterest expense	$	34,745		$	33,897		$	22,847		$	23,146		$	25,314
Net income (loss)	$	5,056		$	7,916		$	1,552		$	(1,502	)	$	(5,530	)
Net income (loss) applicable to common shareholders	$	3,946		$	6,809		$	447		$	(2,605	)	$	(6,631	)
Per Common Share
Earnings (loss) (basic)	$	0.11		$	0.24		$	0.02		$	(0.11	)	$	(0.37	)
Earnings (loss) (diluted)	$	0.11		$	0.24		$	0.02		$	(0.11	)	$	(0.37	)
Book value	$	17.83		$	16.44		$	16.13		$	16.15		$	18.50
Averages
Total assets, including covered assets	$	4,327,894		$	3,945,042		$	3,177,098		$	3,077,005		$	3,024,491
Interest-earning assets	$	3,624,548		$	3,368,241		$	2,872,842		$	2,783,121		$	2,728,086
Loans, including covered loans	$	2,550,813		$	2,440,415		$	2,034,903		$	2,088,478		$	2,159,415
Securities	$	728,169		$	710,648		$	643,716		$	593,516		$	554,270
Deposits	$	3,303,661		$	3,135,949		$	2,453,553		$	2,395,311		$	2,337,385
Core deposits	$	2,820,378		$	2,608,279		$	2,039,533		$	1,977,977		$	1,893,419
Interest-bearing deposits	$	2,487,757		$	2,395,562		$	1,890,479		$	1,857,708		$	1,850,193
Interest-bearing liabilities	$	2,663,584		$	2,571,588		$	2,041,761		$	2,019,051		$	2,073,750
Noninterest-bearing deposits	$	815,904		$	740,387		$	563,074		$	537,603		$	487,192
Shareholders' equity	$	684,929		$	539,856		$	530,804		$	478,589		$	417,961
Financial Ratios
Return on average assets		0.47	%		0.81	%		0.19	%		(0.19	)%		(0.73	%)
Return on average common equity		2.59	%		5.93	%		0.39	%		(2.56	)%		(7.73	%)
Average equity to average assets		15.83	%		13.68	%		16.71	%		15.55	%		13.82	%
Net interest margin		4.66	%		4.78	%		4.30	%		4.34	%		4.38	%
Efficiency ratio (tax equivalent)		68.15	%		67.03	%		58.12	%		60.85	%		63.79	%
Period end
Total assets, including covered assets	$	4,289,115		$	4,133,812		$	3,200,930		$	3,167,028		$	3,021,857
Covered assets	$	599,306		$	634,443		$	- -		$	- -		$	- -
Loans, excluding covered loans	$	1,945,972		$	1,949,609		$	2,008,884		$	2,063,398		$	2,119,443
Allowance for loan and lease losses	$	59,748		$	56,981		$	53,478		$	51,688		$	48,880
Securities	$	727,825		$	736,939		$	631,645		$	658,227		$	558,011
Deposits	$	3,284,947		$	3,371,165		$	2,482,705		$	2,443,567		$	2,353,326
Core deposits	$	2,831,319		$	2,856,186		$	2,072,821		$	2,027,482		$	1,932,771
Shareholders' equity	$	775,295		$	538,721		$	528,139		$	527,920		$	411,871
Nonperforming assets
Nonaccrual loans and leases not covered under FDIC loss share agreements	$	108,409		$	105,565		$	110,431		$	130,718		$	127,767
Restructured loans accruing interest, excluding covered assets		687			287			60			- -			- -
Noncovered real estate owned and other personal property owned		22,814			20,726			19,037			18,137			8,369
Total nonperforming assets, excluding covered assets	$	131,910		$	126,578		$	129,528		$	148,855		$	136,136
Nonperforming loans to period-end loans, excluding covered loans		5.61	%		5.43	%		5.50	%		6.34	%		6.03	%
Nonperforming assets to period-end assets, excluding covered assets		3.57	%		3.62	%		4.05	%		4.70	%		4.51	%
Allowance for loan and lease losses to period-end loans, excluding covered loans		3.07	%		2.92	%		2.66	%		2.50	%		2.31	%
Allowance for loan and lease losses to nonperforming loans, excluding covered loans		54.77	%		53.83	%		48.40	%		39.54	%		38.26	%
Allowance for loan and lease losses to nonperforming assets, excluding covered assets		45.29	%		45.02	%		41.29	%		34.72	%		35.91	%
Net loan charge-offs	$	10,733		$	11,497		$	13,210		$	13,692		$	16,369

CONSOLIDATED CONDENSED STATEMENTS OF INCOME
Columbia Banking System, Inc.	Three Months Ended						Six Months Ended
(Unaudited)	June 30,						June 30,
(in thousands except per share)	2010			2009			2010		2009
Interest Income
Loans	$	38,940		$	29,250		$	75,887	$	59,051
Taxable securities		4,708			4,195			9,453		8,403
Tax-exempt securities		2,290			2,076			4,736		4,089
Federal funds sold and deposits in banks		210			9			359		16
Total interest income		46,148			35,530			90,435		71,559
Interest Expense
Deposits		4,334			5,874			9,275		12,766
Federal Home Loan Bank and Federal Reserve Bank borrowings		710			700			1,415		1,465
Long-term obligations		254			306			503		657
Other borrowings		118			119			236		237
Total interest expense		5,416			6,999			11,429		15,125
Net Interest Income		40,732			28,531			79,006		56,434
Provision for loan and lease losses		13,500			21,000			28,500		32,000
Net interest income after provision for loan and lease losses		27,232			7,531			50,506		24,434
Noninterest Income
Gain on bank acquisition		- -			- -			9,818		- -
Service charges and other fees		6,442			3,562			11,866		7,176
Merchant services fees		1,913			1,880			3,652		3,650
Redemption of Visa and Mastercard shares		- -			49			- -		49
Gain on sale of investment securities, net		- -			- -			58		- -
Bank owned life insurance ("BOLI")		516			516			1,020		1,017
Change in indemnification asset		3,399			- -			3,399		- -
Other		967			993			1,897		2,082
Total noninterest income		13,237			7,000			31,710		13,974
Noninterest Expense
Compensation and employee benefits		17,497			12,296			34,483		24,148
Occupancy		4,307			2,937			8,276		5,982
Merchant processing		1,227			879			2,327		1,693
Advertising and promotion		785			687			1,623		1,379
Data processing and communications		2,567			1,354			4,446		2,674
Legal and professional fees		1,477			1,019			2,975		1,986
Taxes, licenses and fees		688			597			1,252		1,393
Regulatory premiums		1,462			2,492			2,958		3,499
Net cost of operation of other real estate		(672	)		225			640		272
Amortization of intangibles		1,055			271			1,842		541
Other		4,352			2,557			7,820		4,928
Total noninterest expense		34,745			25,314			68,642		48,495
Income before income taxes		5,724			(10,783	)		13,574		(10,087	)
Income tax provision (benefit)		668			(5,253	)		602		(6,069	)
Net Income (Loss)	$	5,056		$	(5,530	)	$	12,972	$	(4,018	)
Net Income (Loss) Applicable to Common Shareholders	$	3,946		$	(6,631	)	$	10,755	$	(6,212	)
Earnings (loss) per common share
Basic	$	0.11		$	(0.37	)	$	0.34	$	(0.35	)
Diluted	$	0.11		$	(0.37	)	$	0.34	$	(0.35	)
Dividends paid per common share	$	0.01		$	0.01		$	0.02	$	0.05
Weighted average number of common shares outstanding		34,829			18,002			31,376		17,991
Weighted average number of diluted common shares outstanding		35,077			18,002			31,607		17,991

CONSOLIDATED CONDENSED BALANCE SHEETS
Columbia Banking System, Inc.
(Unaudited)			June 30,		December 31,
(in thousands)			2010		2009
ASSETS
Cash and due from banks			$	89,026	$	55,802
Interest-earning deposits with banks				407,922		249,272
Total cash and cash equivalents				496,948		305,074
Securities available for sale at fair value (amortized cost of $681,499 and $602,675, respectively)				709,917		620,038
Federal Home Loan Bank stock at cost				17,908		11,607
Loans, net of deferred loan fees of ($4,047) and ($4,033), respectively				1,945,972		2,008,884
Less: allowance for loan and lease losses				59,748		53,478
Noncovered loans, net				1,886,224		1,955,406
Loans covered under FDIC loss share agreements				584,954		- -
Total loans, net				2,471,178		1,955,406
FDIC indemnification asset				194,865		- -
Interest receivable				15,167		10,335
Premises and equipment, net				61,360		62,670
Other real estate owned, covered under FDIC loss share agreement				14,351		- -
Other real estate owned				22,814		19,037
Total other real estate owned				37,165		19,037
Goodwill				110,013		95,519
Core deposit intangible, net				20,776		4,863
Other assets				153,818		116,381
Total Assets			$	4,289,115	$	3,200,930
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing			$	835,356	$	574,687
Interest-bearing				2,449,591		1,908,018
Total deposits				3,284,947		2,482,705
Federal Home Loan Bank advances				125,766		100,000
Securities sold under agreements to repurchase				25,000		25,000
Other borrowings				173		86
Long-term subordinated debt				25,703		25,669
Other liabilities				52,231		39,331
Total liabilities				3,513,820		2,672,791
Commitments and contingent liabilities
	June 30,	December 31,
	2010	2009
Preferred stock (no par value, 76,898 aggregate liquidation preference)
Authorized shares	2,000	2,000
Issued and outstanding	77	77		74,595		74,301
Common Stock (no par value)
Authorized shares	63,033	63,033
Issued and outstanding	39,304	28,129		579,049		348,706
Retained earnings				103,397		93,316
Accumulated other comprehensive income				18,254		11,816
Total shareholders' equity				775,295		528,139
Total Liabilities and Shareholders' Equity			$	4,289,115	$	3,200,930

FINANCIAL STATISTICS
Columbia Banking System, Inc.
Unaudited	June 30,
(in thousands)	2010
Loan Portfolio Composition
Loans not covered under FDIC loss share agreements:
Commercial business			$	756,796		38.9	%
Real Estate:
One-to-four family residential				56,554		2.9	%
Five or more family residential and commercial
Retail	$	104,166				5.4	%
Office		155,360				8.0	%
Multi-family		53,608				2.8	%
Condos		6,910				0.4	%
Warehouse		177,135				9.1	%
Manufacturing & Industrial		39,863				2.0	%
Acquisition and development		509				0.0	%
Land		26,605				1.4	%
Hotel / Motel		59,699				3.1	%
Healthcare		11,862				0.6	%
Residential		24,080				1.2	%
Recreational		16,954				0.9	%
Other		144,753				7.4	%
Total Five Or More Family Residential And Commercial Real Estate				821,504		42.2	%
Real Estate Construction:
One-to-four family residential
Single family residential (vertical)		35,515				1.8	%
Lots		24,014				1.2	%
Acquisition and development		15,908				0.8	%
Land		9,714				0.5	%
Total One-To-Four Family Residential Construction				85,151		4.4	%
Five or more family residential and commercial
Condos		6,927				0.4	%
Warehouse		2,693				0.1	%
Other		15,758				0.8	%
Retail		7,355				0.4	%
Office		705				0.0	%
Total Five Or More Family Residential And Commercial Construction				33,438		1.7	%
Consumer				196,576		10.1	%
Subtotal loans				1,950,019		100.2	%
Less: Deferred loan fees				(4,047	)	-0.2	%
Total loans not covered under FDIC loss share agreements, net of deferred fees				1,945,972		100.0	%
Net covered loans under loss share agreements				584,954

Total loans			$	2,530,926


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)


		COLUMBIA BANKING SYSTEM, INC.

Date: July 29, 2010		/s/ Melanie J. Dressel
		Melanie J. Dressel
		President and Chief Executive Officer

	June 30,		December 31,
(in thousands)	2010		2009
Nonaccrual noncovered loans:
Commercial business	$	17,309	$	18,979
Real estate:
One-to-four family residential		3,113		1,860
Commercial and five or more family residential real estate		36,097		24,354
Total real estate		39,210		26,214
Real estate construction:
One-to-four family residential		32,653		47,653
Commercial and five or more family residential real estate		14,282		16,230
Total real estate construction		46,935		63,883
Consumer		4,955		1,355
Total nonaccrual noncovered loans		108,409		110,431
Restructured noncovered loans:
One-to-four family residential construction		687		60
Total nonperforming noncovered loans		109,096		110,491
Noncovered real estate owned and other personal property owned		22,814		19,037
Total nonperforming noncovered assets	$	131,910	$	129,528