10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________________________________ 

FORM 10-Q

________________________________________________________ 

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013.

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             .

Commission File Number 0-20288

 ________________________________________________________ 

COLUMBIA BANKING SYSTEM, INC.

(Exact name of issuer as specified in its charter)

 ________________________________________________________ 

Washington	91-1422237
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
1301 “A” Street Tacoma, Washington	98402-2156
(Address of principal executive offices)	(Zip Code)

(253) 305-1900

(Issuer’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

________________________________________________________ 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

The number of shares of common stock outstanding at April 30, 2013 was 51,027,081.

TABLE OF CONTENTS

		Page
	PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheets – March 31, 2013 and December 31, 2012	1
	Consolidated Statements of Income - three months ended March 31, 2013 and 2012	2
	Consolidated Statements of Comprehensive Income - three months ended March 31, 2013 and 2012	3
	Consolidated Statements of Changes in Shareholders’ Equity - three months ended March 31, 2013 and 2012	4
	Consolidated Statements of Cash Flows - three months ended March 31, 2013 and 2012	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	50
Item 4.	Controls and Procedures	50
	PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	51
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3.	Defaults Upon Senior Securities	52
Item 4.	Mine Safety Disclosures	52
Item 5.	Other Information	52
Item 6.	Exhibits	53
	Signatures	54

i

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

Columbia Banking System, Inc.

(Unaudited)

			March 31, 2013		December 31, 2012
ASSETS			(in thousands)
Cash and due from banks			$	91,889	$	124,573
Interest-earning deposits with banks			356,056		389,353
Total cash and cash equivalents			447,945		513,926
Securities available for sale at fair value (amortized cost of $984,075 and $969,359, respectively)			1,012,162		1,001,665
Federal Home Loan Bank stock at cost			21,621		21,819
Loans held for sale			888		2,563
Loans, excluding covered loans, net of unearned income of ($6,985) and ($7,767), respectively			2,621,212		2,525,710
Less: allowance for loan and lease losses			51,119		52,244
Loans, excluding covered loans, net			2,570,093		2,473,466
Covered loans, net of allowance for loan losses of ($29,489) and ($30,056), respectively			363,213		391,337
Total loans, net			2,933,306		2,864,803
FDIC loss-sharing asset			83,115		96,354
Interest receivable			16,321		14,268
Premises and equipment, net			120,665		118,708
Other real estate owned ($13,811 and $16,311 covered by FDIC loss-share, respectively)			25,727		26,987
Goodwill			115,554		115,554
Core deposit intangible, net			14,693		15,721
Other assets			113,014		113,967
Total assets			$	4,905,011	$	4,906,335
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing			$	1,274,330	$	1,321,171
Interest-bearing			2,772,209		2,720,914
Total deposits			4,046,539		4,042,085
Federal Home Loan Bank advances			6,634		6,644
Securities sold under agreements to repurchase			25,000		25,000
Other liabilities			57,178		68,598
Total liabilities			4,135,351		4,142,327
Commitments and contingent liabilities
Shareholders’ equity:
	March 31, 2013	December 31, 2012
Common stock (no par value)
Authorized shares	63,033	63,033
Issued and outstanding	39,844	39,686	582,348		581,471
Retained earnings			170,593		162,388
Accumulated other comprehensive income			16,719		20,149
Total shareholders’ equity			769,660		764,008
Total liabilities and shareholders’ equity			$	4,905,011	$	4,906,335

See accompanying Notes to unaudited Consolidated Financial Statements.

1

CONSOLIDATED STATEMENTS OF INCOME

Columbia Banking System, Inc.

(Unaudited)

	Three Months Ended
	March 31,
	2013			2012
	(in thousands except per share amounts)
Interest Income
Loans	$	48,028		$	61,777
Taxable securities	4,234			5,245
Tax-exempt securities	2,298			2,525
Federal funds sold and deposits in banks	201			165
Total interest income	54,761			69,712
Interest Expense
Deposits	1,089			1,779
Federal Home Loan Bank advances	71			750
Other borrowings	119			120
Total interest expense	1,279			2,649
Net Interest Income	53,482			67,063
Provision (recapture) for loan and lease losses	(1,000		)	4,500
Provision for losses on covered loans	980			15,685
Net interest income after provision for loan and lease losses	53,502			46,878
Noninterest Income
Service charges and other fees	7,594			7,177
Merchant services fees	1,851			2,018
Investment securities gains, net	370			62
Bank owned life insurance	698			711
Change in FDIC loss-sharing asset	(10,483		)	(1,668		)
Other	1,628			1,274
Total noninterest income	1,658			9,574
Noninterest Expense
Compensation and employee benefits	21,653			21,995
Occupancy	4,753			5,333
Merchant processing	857			873
Advertising and promotion	870			882
Data processing and communications	2,580			2,213
Legal and professional fees	2,050			1,609
Taxes, licenses and fees	1,387			1,355
Regulatory premiums	857			860
Net cost (benefit) of operation of other real estate owned	(2,501		)	910
Amortization of intangibles	1,029			1,150
Other	4,514			7,172
Total noninterest expense	38,049			44,352
Income before income taxes	17,111			12,100
Income tax provision	4,935			3,198
Net Income	$	12,176		$	8,902
Earnings per common share
Basic	$	0.31		$	0.22
Diluted	$	0.31		$	0.22
Dividends paid per common share	$	0.10		$	0.37
Weighted average number of common shares outstanding	39,348			39,195
Weighted average number of diluted common shares outstanding	39,351			39,298

See accompanying Notes to unaudited Consolidated Financial Statements.

2

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Columbia Banking System, Inc.

(Unaudited)

	Three Months Ended
	March 31,
	2013			2012
	(in thousands)
Net income as reported	$	12,176		$	8,902
Unrealized loss from securities:
Net unrealized holding loss from available for sale securities arising during the period, net of tax of $1,357 and $926	(2,493		)	(1,645		)
Reclassification adjustment of net gain from sale of available for sale securities included in income, net of tax of $130 and $22	(240		)	(40		)
Net unrealized loss from securities, net of reclassification adjustment	(2,733		)	(1,685		)
Pension plan liability adjustment:
Net unrealized loss from unfunded defined benefit plan liability arising during the period, net of tax of $412 and $0	(757		)	—
Amortization of unrecognized net actuarial loss included in net periodic pension cost, net of tax of ($32) and ($7)	60			13
Pension plan liability adjustment, net	(697		)	13
Total comprehensive income	$	8,746		$	7,230

See accompanying Notes to unaudited Consolidated Financial Statements.

3

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Columbia Banking System, Inc.

(Unaudited)

	Common Stock			Retained Earnings			Accumulated Other Comprehensive Income			Total Shareholders’ Equity
	Number of Shares	Amount
	(in thousands)
Balance at January 1, 2012	39,506	$	579,136	$	155,069		$	25,133		$	759,338
Net income	—	—		8,902			—			8,902
Other comprehensive loss	—	—		—			(1,672		)	(1,672		)
Issuance of common stock - stock option and other plans	18	308		—			—			308
Issuance of common stock - restricted stock awards, net of canceled awards	146	450		—			—			450
Cash dividends paid on common stock	—	—		(14,623		)	—			(14,623		)
Balance at March 31, 2012	39,670	$	579,894	$	149,348		$	23,461		$	752,703
Balance at January 1, 2013	39,686	$	581,471	$	162,388		$	20,149		$	764,008
Net income	—	—		12,176			—			12,176
Other comprehensive income	—	—		—			(3,430		)	(3,430		)
Issuance of common stock - stock option and other plans	18	326		—			—			326
Issuance of common stock - restricted stock awards, net of canceled awards	140	551		—			—			551
Cash dividends paid on common stock	—	—		(3,971		)	—			(3,971		)
Balance at March 31, 2013	39,844	$	582,348	$	170,593		$	16,719		$	769,660

See accompanying Notes to unaudited Consolidated Financial Statements.

4

CONSOLIDATED STATEMENTS OF CASH FLOWS

Columbia Banking System, Inc.

(Unaudited)

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Cash Flows From Operating Activities
Net Income	$	12,176		$	8,902
Adjustments to reconcile net income to net cash provided by operating activities
Provision (recapture) for loan and lease losses and losses on covered loans	(20		)	20,185
Stock-based compensation expense	551			450
Depreciation, amortization and accretion	13,015			16,141
Investment securities gain, net	(370		)	(62		)
Net realized gain on sale of other assets	(80		)	(21		)
Net realized gain on sale of other real estate owned	(2,787		)	(2,954		)
Write-down on other real estate owned	158			3,127
Net change in:
Loans held for sale	1,675			82
Interest receivable	(2,053		)	(750		)
Interest payable	(40		)	(148		)
Other assets	3,192			(1,166		)
Other liabilities	(11,739		)	(8,403		)
Net cash provided by operating activities	13,678			35,383
Cash Flows From Investing Activities
Loans originated and acquired, net of principal collected	(71,815		)	(16,814		)
Purchases of:
Securities available for sale	(84,673		)	(30,177		)
Premises and equipment	(3,624		)	(6,682		)
Proceeds from:
FDIC reimbursement on loss-sharing asset	3,119			14,804
Sales of securities available for sale	3,023			3,845
Principal repayments and maturities of securities available for sale	64,758			49,654
Sales of other assets	287			—
Sales of covered other real estate owned	6,438			8,025
Sales of other real estate and other personal property owned	2,019			7,829
Capital improvements on other real estate properties	—			(90		)
Net cash (used in) provided by investing activities	(80,468		)	30,394
Cash Flows From Financing Activities
Net increase in deposits	4,454			49,916
Proceeds from:
Federal Home Loan Bank advances	100			—
Federal Reserve Bank borrowings	50			—
Exercise of stock options	326			308
Payments for:
Repayment of Federal Home Loan Bank advances	(100		)	(4,210		)
Repayment of Federal Reserve Bank borrowings	(50		)	—
Common stock dividends	(3,971		)	(14,623		)
Net cash provided by financing activities	809			31,391
Increase (Decrease) in cash and cash equivalents	(65,981		)	97,168
Cash and cash equivalents at beginning of period	513,926			294,289
Cash and cash equivalents at end of period	$	447,945		$	391,457
Supplemental Information:
Cash paid during the year for:
Cash paid for interest	$	1,319		$	2,797
Cash paid for income tax	$	5,500		$	—
Non-cash investing activities
Loans transferred to other real estate owned	$	4,114		$	6,092

See accompanying Notes to unaudited Consolidated Financial Statements.

5

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Columbia Banking System, Inc.

1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. The consolidated financial statements include the accounts of the Company, and its wholly owned banking subsidiary Columbia Bank (the “Bank”). All intercompany transactions and accounts have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included. The results of operations for the three months ended March 31, 2013 are not necessarily indicative of results to be anticipated for the year ending December 31, 2013. The accompanying interim unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes contained in the Company’s 2012 Annual Report on Form 10-K.

Significant Accounting Policies

The significant accounting policies used in preparation of our consolidated financial statements are disclosed in our 2012 Annual Report on Form 10-K. There have not been any changes in our significant accounting policies compared to those contained in our 2012 Form 10-K disclosure for the year ended December 31, 2012, except for the adoption of ASU 2012-06 as noted below.

2. Accounting Pronouncements Recently Issued

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The Update requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component and to present either on the face of the statement where net income is presented, or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2012. The Company adopted the ASU 2013-02 reporting requirements during the current period with no impact to the Company's financial condition or results of operations. See Note 11 to the Consolidated Financial Statements of this report for new disclosures related to accumulated other comprehensive income.

In October 2012, the FASB issued ASU 2012-06, Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution. ASU 2012-06 clarifies that when a reporting entity recognizes an indemnification asset as a result of a government-assisted acquisition of a financial institution and there is a subsequent change in the amount of cash flows expected to be collected on the indemnified asset, the reporting entity should subsequently measure the indemnification asset on the same basis as the underlying loans by taking into account the contractual limitations of the Loss-Sharing Agreement ("LSA"). For amortization of changes in value, the reporting entity should use the term of the indemnification agreement if it is shorter than the term of the acquired loans. ASU 2012-06 is effective for interim and annual periods beginning after December 15, 2012. The Company adopted the ASU as of January 1, 2013. As a result of the adoption of the ASU, an additional $2.5 million of indemnification asset amortization was recorded during the period, resulting in a reduction of $1.6 million in net income and $0.04 in earnings per share.

6

3. Securities

The following table summarizes the amortized cost, gross unrealized gains and losses and the resulting fair value of securities available for sale:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
March 31, 2013
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	502,652	$	15,484	$	(6,181	)	$	511,955
State and municipal securities	256,608		19,586		(589		)	275,605
U.S. government agency and government-sponsored enterprise securities	201,680		828		(981		)	201,527
U.S. government securities	19,811		—		(105		)	19,706
Other securities	3,324		87		(42		)	3,369
Total	$	984,075	$	35,985	$	(7,898	)	$	1,012,162
December 31, 2012
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	561,076	$	16,719	$	(5,426	)	$	572,369
State and municipal securities	265,070		20,893		(388		)	285,575
U.S. government agency and government-sponsored enterprise securities	120,085		851		(435		)	120,501
U.S. government securities	19,804		39		(15		)	19,828
Other securities	3,324		104		(36		)	3,392
Total	$	969,359	$	38,606	$	(6,300	)	$	1,001,665

The scheduled contractual maturities of investment securities available for sale at March 31, 2013 are presented as follows:

	March 31, 2013
	Amortized Cost		Fair Value
	(in thousands)
Due within one year	$	17,771	$	18,025
Due after one year through five years	158,054		161,996
Due after five years through ten years	244,429		249,097
Due after ten years	560,497		579,677
Other securities with no stated maturity	3,324		3,367
Total investment securities available-for-sale	$	984,075	$	1,012,162

The following table summarizes, as of March 31, 2013, the carrying value of securities pledged as collateral to secure public deposits, borrowings and other purposes as permitted or required by law:

	Carrying Amount
	(in thousands)
To Washington and Oregon State to secure public deposits	$	282,025
To Federal Reserve Bank to secure borrowings	45,405
Other securities pledged	44,948
Total securities pledged as collateral	$	372,378

7

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2013 and December 31, 2012:

	Less than 12 Months			12 Months or More			Total
	Fair Value	Unrealized Losses		Fair Value	Unrealized Losses		Fair Value	Unrealized Losses
	(in thousands)
March 31, 2013
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	160,587	(5,914	)	11,250	(267	)	171,837	(6,181	)
State and municipal securities	21,513	(584	)	210	(5	)	21,723	(589	)
U.S. government agency and government-sponsored enterprise securities	137,814	(981	)	—	—		137,814	(981	)
U.S. government securities	19,706	(105	)	—	—		19,706	(105	)
Other securities	—	—		958	(42	)	958	(42	)
Total	339,620	(7,584	)	12,418	(314	)	352,038	(7,898	)
December 31, 2012
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	167,739	(5,090	)	12,204	(336	)	179,943	(5,426	)
State and municipal securities	20,413	(383	)	210	(5	)	20,623	(388	)
U.S. government agency and government-sponsored enterprise securities	56,600	(435	)	—	—		56,600	(435	)
U.S. government securities	9,914	(15	)	—	—		9,914	(15	)
Other securities	—	—		964	(36	)	964	(36	)
Total	254,666	(5,923	)	13,378	(377	)	268,044	(6,300	)

At March 31, 2013, there were 18 U.S. government agency and government-sponsored enterprise mortgage-backed securities & collateralized mortgage obligations securities in an unrealized loss position, of which one was in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2013.

At March 31, 2013, there were 15 state and municipal government securities in an unrealized loss position, of which one was in a continuous loss position for 12 months or more. The unrealized losses on state and municipal securities were caused by interest rate changes or widening of market spreads subsequent to the purchase of the individual securities. Management monitors published credit ratings of these securities for adverse changes. As of March 31, 2013, none of the rated obligations of state and local government entities held by the Company had a below investment grade credit rating. Because the credit quality of these securities are investment grade and the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2013.

At March 31, 2013, there were 11 U.S. government agency and government-sponsored enterprise securities in an unrealized loss position, of which none were in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not currently intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2013.

At March 31, 2013, there were two U.S. government securities in an unrealized loss position, neither of which was in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not

8

currently intend to sell this security nor does the Company consider it more likely than not that it will be required to sell this security before the recovery of amortized cost basis, which may be maturity, the Company does not consider this investment to be other-than-temporarily impaired at March 31, 2013.

At March 31, 2013, there was one other security, a mortgage-backed securities fund in a continuous unrealized loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates and the additional risk premium investors are demanding for investment securities with these characteristics. The Company does not consider this investment to be other-than-temporarily impaired at March 31, 2013 as it has the intent and ability to hold the investment for sufficient time to allow for recovery in the market value.

4. Noncovered Loans

Noncovered loans include loans originated through our branch network and loan departments as well as acquired loans that are not subject to FDIC loss-sharing agreements.

The following is an analysis of the noncovered loan portfolio by major types of loans (net of unearned income):

	March 31, 2013			December 31, 2012
Noncovered loans:	(in thousands)
Commercial business	$	1,204,760		$	1,155,158
Real estate:
One-to-four family residential	43,604			43,922
Commercial and multifamily residential	1,106,987			1,061,201
Total real estate	1,150,591			1,105,123
Real estate construction:
One-to-four family residential	52,946			50,602
Commercial and multifamily residential	67,213			65,101
Total real estate construction	120,159			115,703
Consumer	152,687			157,493
Less: Net unearned income	(6,985		)	(7,767		)
Total noncovered loans, net of unearned income	2,621,212			2,525,710
Less: Allowance for loan and lease losses	(51,119		)	(52,244		)
Total noncovered loans, net	$	2,570,093		$	2,473,466
Loans held for sale	$	888		$	2,563

At March 31, 2013 and December 31, 2012, the Company had no material foreign activities. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington and Oregon.

The Company has granted loans to officers and directors of the Company and related interests. These loans are made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than the normal risk of collectability. The aggregate dollar amount of these loans was $13.7 million and $14.2 million at March 31, 2013 and December 31, 2012, respectively. During the first three months of 2013, advances on related party loans were $475 thousand and repayments totaled $948 thousand.

At March 31, 2013 and December 31, 2012, $463.7 million and $443.4 million of commercial and residential real estate loans were pledged as collateral on Federal Home Loan Bank borrowings and additional borrowing capacity. The Company has also pledged $17.4 million and $13.8 million of commercial loans to the Federal Reserve Bank for additional borrowing capacity at March 31, 2013 and December 31, 2012, respectively.

9

The following is an analysis of noncovered, nonaccrual loans as of March 31, 2013 and December 31, 2012:

	March 31, 2013				December 31, 2012
	Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans		Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans
Noncovered loans:	(in thousands)
Commercial business
Secured	$	9,383	$	16,192	$	9,037	$	17,821
Unsecured	121		121		262		262
Real estate:
One-to-four family residential	1,684		2,023		2,349		2,672
Commercial & multifamily residential
Commercial land	3,347		6,701		4,076		7,491
Income property	8,230		11,439		8,520		10,815
Owner occupied	5,825		6,997		6,608		7,741
Real estate construction:
One-to-four family residential
Land and acquisition	2,646		5,841		3,084		6,704
Residential construction	388		388		1,816		2,431
Consumer	1,262		1,559		1,643		1,940
Total	$	32,886	$	51,261	$	37,395	$	57,877

10

The following is an aging of the recorded investment of the noncovered loan portfolio as of March 31, 2013 and December 31, 2012:

	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
March 31, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,142,942	$	3,739	$	1,154	$	4,893	$	9,383	$	1,157,218
Unsecured	43,918		112		164		276		121		44,315
Real estate:
One-to-four family residential	41,330		849		61		910		1,684		43,924
Commercial & multifamily residential
Commercial land	43,785		1,006		—		1,006		3,347		48,138
Income property	645,058		2,434		—		2,434		8,230		655,722
Owner occupied	389,803		2,525		1,621		4,146		5,825		399,774
Real estate construction:
One-to-four family residential
Land and acquisition	18,330		204		314		518		2,646		21,494
Residential construction	30,768		—		—		—		388		31,156
Commercial & multifamily residential
Income property	24,479		—		—		—		—		24,479
Owner occupied	42,192		—		—		—		—		42,192
Consumer	150,423		885		230		1,115		1,262		152,800
Total	$	2,573,028	$	11,754	$	3,544	$	15,298	$	32,886	$	2,621,212
	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,091,770	$	4,259	$	1,485	$	5,744	$	9,037	$	1,106,551
Unsecured	44,817		252		12		264		262		45,343
Real estate:
One-to-four family residential	41,508		193		142		335		2,349		44,192
Commercial & multifamily residential
Commercial land	42,818		311		122		433		4,076		47,327
Income property	603,339		2,726		227		2,953		8,520		614,812
Owner occupied	387,525		1,040		—		1,040		6,608		395,173
Real estate construction:
One-to-four family residential
Land and acquisition	15,412		—		—		—		3,084		18,496
Residential construction	29,848		—		—		—		1,816		31,664
Commercial & multifamily residential
Income property	28,342		—		—		—		—		28,342
Owner occupied	36,211		—		—		—		—		36,211
Consumer	155,207		387		362		749		1,643		157,599
Total	$	2,476,797	$	9,168	$	2,350	$	11,518	$	37,395	$	2,525,710

11

The following is an analysis of impaired loans as of March 31, 2013 and December 31, 2012:

	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
March 31, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,152,246	$	4,972	$	293	$	414	$	67	$	4,680	$	7,488
Unsecured	44,231		84		84		84		84		—		—
Real estate:
One-to-four family residential	42,380		1,544		340		362		108		1,204		1,341
Commercial & multifamily residential
Commercial land	45,366		2,772		—		—		—		2,772		5,845
Income property	646,457		9,265		18		66		18		9,246		12,442
Owner occupied	388,437		11,337		605		606		34		10,732		14,135
Real estate construction:
One-to-four family residential
Land and acquisition	18,914		2,580		117		116		74		2,463		4,033
Residential construction	31,011		145		—		—		—		145		144
Commercial & multifamily residential
Income property	24,479		—		—		—		—		—		—
Owner occupied	42,192		—		—		—		—		—		—
Consumer	152,674		126		—		—		—		126		126
Total	$	2,588,387	$	32,825	$	1,457	$	1,648	$	385	$	31,368	$	45,554
	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,101,689	$	4,862	$	690	$	1,994	$	113	$	4,172	$	6,769
Unsecured	45,251		92		92		92		92		—		—
Real estate:
One-to-four family residential	42,103		2,089		345		364		112		1,744		1,902
Commercial & multifamily residential
Commercial land	44,672		2,655		—		—		—		2,655		5,727
Income property	606,656		8,156		2,670		2,727		1,040		5,486		7,860
Owner occupied	383,269		11,904		608		610		38		11,296		14,642
Real estate construction:
One-to-four family residential
Land and acquisition	15,677		2,819		—		—		—		2,819		4,813
Residential construction	29,707		1,957		—		—		—		1,957		2,570
Commercial & multifamily residential
Income property	28,342		—		—		—		—		—		—
Owner occupied	36,211		—		—		—		—		—		—
Consumer	157,472		127		—		—		—		127		127
Total	$	2,491,049	$	34,661	$	4,405	$	5,787	$	1,395	$	30,256	$	44,410

12

The following table provides additional information on impaired loans for the three month periods indicated.

	Three Months Ended March 31,
	2013				2012
	Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans		Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans
Noncovered loans:	(in thousands)
Commercial business
Secured	$	4,917	$	4	$	9,709	$	309
Unsecured	88		1		119		1
Real estate:
One-to-four family residential	1,816		4		2,266		1
Commercial & multifamily residential
Commercial land	2,714		—		3,405		—
Income property	8,710		29		8,083		115
Owner occupied	11,620		279		14,152		107
Real estate construction:
One-to-four family residential
Land and acquisition	2,700		1		6,539		—
Residential construction	1,051		2		4,286		358
Commercial & multifamily residential
Income property	—		—		6,045		—
Consumer	127		2		1,672		—
Total	$	33,743	$	322	$	56,276	$	891

There were no Troubled Debt Restructurings ("TDR") during the three months ended March 31, 2012. The following is an analysis of loans classified as TDR during the three months ended March 31, 2013:

	Three months ended March 31, 2013
	Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Noncovered loans:	(dollars in thousands)
Real estate construction:
One-to-four family residential:
Land and acquisition	1	$	117	$	117
Total	1	$	117	$	117

The Company's loans classified as TDR are loans that have been modified or the borrower has been granted special concessions due to financial difficulties that, if not for the challenges of the borrower, the Company would not otherwise consider. The Company had commitments to lend $1.8 million and $236 thousand of additional funds on loans classified as TDR as of March 31, 2013 and December 31, 2012, respectively. The TDR modifications or concessions are made to increase the likelihood that these borrowers with financial difficulties will be able to satisfy their debt obligations as amended. Credit losses for loans classified as TDR are measured on the same basis as impaired loans. For impaired loans, an allowance is established when the collateral value less selling costs (or discounted cash flows or observable market price) of the impaired loan is lower than the recorded investment of that loan.The Company did not have any loans modified as TDR within the past twelve months that have defaulted during the three months ended March 31, 2013.

13

5. Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit

We maintain an allowance for loan and lease losses (“ALLL”) to absorb losses inherent in the loan portfolio. The size of the ALLL is determined through quarterly assessments of the probable estimated losses in the loan portfolio. Our methodology for making such assessments and determining the adequacy of the ALLL includes the following key elements:

1. General valuation allowance consistent with the Contingencies topic of the FASB Accounting Standards Codification ("ASC").

2. Classified loss reserves on specific relationships. Specific allowances for identified problem loans are determined in accordance with the Receivables topic of the FASB ASC.

3. The unallocated allowance provides for other factors inherent in our loan portfolio that may not have been contemplated in the general and specific components of the allowance. This unallocated amount generally comprises less than 5% of the allowance. The unallocated amount is reviewed quarterly based on trends in credit losses, the results of credit reviews and overall economic trends.

The general valuation allowance is systematically calculated quarterly using quantitative and qualitative information about specific loan classes. The minimum required level an entity develops a methodology to determine its allowance for loan and lease losses is by general categories of loans, such as commercial business, real estate, and consumer. However, the Company’s methodology in determining its allowance for loan and lease losses is prepared in a more detailed manner at the loan class level, utilizing specific categories such as commercial business secured, commercial business unsecured, real estate commercial land, and real estate income property multifamily. The quantitative information uses historical losses from a specific loan class and incorporates the loan’s risk rating migration from origination to the point of loss based upon the consideration of an appropriate look back period.

A loan’s risk rating is primarily determined based upon the borrower’s ability to fulfill its debt obligation from a cash flow perspective. In the event there is financial deterioration of the borrower, the borrower’s other sources of income or repayment are also considered, including recent appraisal values for collateral dependent loans. The qualitative information takes into account general economic and business conditions affecting our marketplace, seasoning of the loan portfolio, duration of the business cycle, etc. to ensure our methodologies reflect the current economic environment and other factors as using historical loss information exclusively may not give an accurate estimate of inherent losses within the Company’s loan portfolio.

When a loan is deemed to be impaired, the Company has to determine if a specific valuation allowance is required for that loan. The specific valuation allowance is a reserve, calculated at the individual loan level, for each loan determined to be both impaired and containing a value less than its recorded investment. The Company measures the impairment based on the discounted expected future cash flows, observable market price, or the fair value of the collateral less selling costs if the loan is collateral dependent or if foreclosure is probable. The specific reserve for each loan is equal to the difference between the recorded investment in the loan and its determined impairment value.

The ALLL is increased by provisions for loan and lease losses (“provision”) charged to expense, and is reduced by loans charged off, net of recoveries or a recovery of previous provisions. While the Company’s management believes the best information available is used to determine the ALLL, changes in market conditions could result in adjustments to the ALLL, affecting net income, if circumstances differ from the assumptions used in determining the ALLL.

We have used the same methodology for ALLL calculations during the three months ended March 31, 2013 and 2012. Adjustments to the percentages of the ALLL allocated to loan categories are made based on trends with respect to delinquencies and problem loans within each class of loans. The Company reviews the ALLL quantitative and qualitative methodology on a quarterly basis and makes adjustments when appropriate. The Company continues to strive towards maintaining a conservative approach to credit quality and will continue to prudently adjust our ALLL as necessary in order to maintain adequate reserves. The Company carefully monitors the loan portfolio and continues to emphasize the importance of credit quality.

Once it is determined that all or a portion of a loan balance is uncollectable, and the amount can be reasonably estimated, the uncollectable portion of the loan is charged-off.

14

The following tables show a detailed analysis of the allowance for loan and lease losses for noncovered loans for the three months ended March 31, 2013 and 2012:

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended March 31, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	27,270	$	(988	)	$	79	$	510		$	26,871	$	67	$	26,804
Unsecured	753		(326		)	34		289			750		84		666
Real estate:
One-to-four family residential	694		(116		)	—		79			657		108		549
Commercial & multifamily residential
Commercial land	460		—			10		(37		)	433		—		433
Income property	11,033		(783		)	79		(918		)	9,411		18		9,393
Owner occupied	6,362		—			4		(908		)	5,458		34		5,424
Real estate construction:
One-to-four family residential
Land and acquisition	1,171		(32		)	2,139		(2,288		)	990		74		916
Residential construction	635		(101		)	—		4			538		—		538
Commercial & multifamily residential
Income property	316		—			—		66			382		—		382
Owner occupied	102		—			—		6			108		—		108
Consumer	2,437		(171		)	47		51			2,364		—		2,364
Unallocated	1,011		—			—		2,146			3,157		—		3,157
Total	$	52,244	$	(2,517	)	$	2,392	$	(1,000	)	$	51,119	$	385	$	50,734

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended March 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	24,745	$	(2,354	)	$	614	$	2,537		$	25,542	$	451	$	25,091
Unsecured	689		(5		)	44		58			786		141		645
Real estate:
One-to-four family residential	654		(116		)	43		108			689		72		617
Commercial & multifamily residential
Commercial land	488		(305		)	—		510			693		—		693
Income property	9,551		(2,008		)	18		2,688			10,249		1,087		9,162
Owner occupied	9,606		(365		)	53		(739		)	8,555		16		8,539
Real estate construction:
One-to-four family residential
Land and acquisition	2,331		(204		)	47		(503		)	1,671		—		1,671
Residential construction	864		—			—		138			1,002		18		984
Commercial & multifamily residential
Income property	665		—			—		(442		)	223		—		223
Owner occupied	35		—			—		9			44		—		44
Consumer	2,719		(1,093		)	373		130			2,129		—		2,129
Unallocated	694		—			—		6			700		—		700
Total	$	53,041	$	(6,450	)	$	1,192	$	4,500		$	52,283	$	1,785	$	50,498

15

Changes in the allowance for unfunded commitments and letters of credit are summarized as follows:

	Three Months Ended
	March 31,
	2013		2012
	(in thousands)
Balance at beginning of period	$	1,915	$	1,535
Net changes in the allowance for unfunded commitments and letters of credit	—		130
Balance at end of period	$	1,915	$	1,665

Risk Elements

The extension of credit in the form of loans to individuals and businesses is one of our principal commerce activities. Our policies and applicable laws and regulations require risk analysis as well as ongoing portfolio and credit management. We manage our credit risk through lending limit constraints, credit review, approval policies and extensive, ongoing internal monitoring. We also manage credit risk through diversification of the loan portfolio by type of loan, type of industry, type of borrower and by limiting the aggregation of debt to a single borrower.

The monitoring process for the loan portfolio includes periodic reviews of individual loans with risk ratings assigned to each loan. Based on the analysis, loans are given a risk rating of 1-10 based on the following criteria:

• ratings of 1-3 indicate minimal to low credit risk,

• ratings of 4-5 indicate an average credit risk with adequate repayment capacity when prolonged periods of adversity do not exist,

• rating of 6 indicate higher than average risk requiring greater than routine attention by bank personnel due to conditions affecting the borrower, the borrower's industry or economic environment,

• rating of 7 indicate potential weaknesses that, if left uncorrected, may result in deterioration of the repayment prospects for the asset or in the Company's credit position at some future date,

• rating of 8 indicates a loss is possible if loan weaknesses are not corrected,

• rating of 9 indicates loss is highly probable; however, the amount of loss has not yet been determined,

• and a rating of 10 indicates the loan is uncollectable, and when identified is charged-off.

Loans with a risk rating of 1-6 are considered Pass loans and loans with risk ratings of 7, 8, 9 and 10 are considered Special Mention, Substandard, Doubtful and Loss, respectively. Loans with a risk rating of Substandard or worse are reported as classified loans in our allowance for loan and lease losses analysis. We review these loans to assess the ability of our borrowers to service all interest and principal obligations and, as a result, the risk rating may be adjusted accordingly. Risk ratings are reviewed and updated whenever appropriate, with more periodic reviews as the risk and dollar value of loss on the loan increases. In the event full collection of principal and interest is not reasonably assured, the loan is appropriately downgraded and, if warranted, placed on nonaccrual status even though the loan may be current as to principal and interest payments. Additionally, we assess whether an impairment of a loan warrants specific reserves or a write-down of the loan.

16

The following is an analysis of the credit quality of our noncovered loan portfolio as of March 31, 2013 and December 31, 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
March 31, 2013	(in thousands)
Noncovered loans:
Commercial business:
Secured	$	1,062,881	$	31,333	$	63,004	$	—	$	—	$	1,157,218
Unsecured	44,087		70		158		—		—		44,315
Real estate:
One-to-four family residential	40,866		252		2,806		—		—		43,924
Commercial and multifamily residential:
Commercial land	44,229		115		3,794		—		—		48,138
Income property	625,209		1,918		28,595		—		—		655,722
Owner occupied	376,995		2,758		20,021		—		—		399,774
Real estate construction:
One-to-four family residential:
Land and acquisition	16,372		1,219		3,903		—		—		21,494
Residential construction	29,858		788		510		—		—		31,156
Commercial and multifamily residential:
Income property	24,479		—		—		—		—		24,479
Owner occupied	42,192		—		—		—		—		42,192
Consumer	147,957		29		4,813		—		1		152,800
Total	$	2,455,125	$	38,482	$	127,604	$	—	$	1	2,621,212
Less:
Allowance for loan and lease losses											51,119
Noncovered loans, net											$	2,570,093

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business:
Secured	$	1,011,722	$	29,222	$	65,607	$	—	$	—	$	1,106,551
Unsecured	44,788		26		529		—		—		45,343
Real estate:
One-to-four family residential	40,346		406		3,440		—		—		44,192
Commercial and multifamily residential:
Commercial land	43,401		—		3,926		—		—		47,327
Income property	581,671		3,688		29,453		—		—		614,812
Owner occupied	357,063		1,848		36,262		—		—		395,173
Real estate construction:
One-to-four family residential:
Land and acquisition	12,741		1,351		4,404		—		—		18,496
Residential construction	28,705		1,142		1,817		—		—		31,664
Commercial and multifamily residential:
Income property	28,342		—		—		—		—		28,342
Owner occupied	36,211		—		—		—		—		36,211
Consumer	151,049		75		6,475		—		—		157,599
Total	$	2,336,039	$	37,758	$	151,913	$	—	$	—	2,525,710
Less:
Allowance for loan and lease losses											52,244
Noncovered loans, net											$	2,473,466

17

6. Changes in Noncovered Other Real Estate Owned

The following tables set forth activity in noncovered OREO for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Noncovered OREO:
Balance at beginning of period	$	10,676		$	22,893
Transfers in, net of write-downs ($32 and $118, respectively)	2,709			3,803
OREO improvements	—			11
Additional OREO write-downs	(93		)	(1,722		)
Proceeds from sale of OREO property	(1,565		)	(7,829		)
Gain (loss) on sale of OREO, net	189			(412		)
Total noncovered OREO at end of period	$	11,916		$	16,744

7. Covered Assets and FDIC Loss-sharing Asset

Covered Assets

Covered assets consist of loans and OREO acquired in certain FDIC-assisted acquisitions during 2010 and 2011, for which the Bank entered into loss-sharing agreements, whereby the FDIC will cover a substantial portion of future losses on loans (and related unfunded loan commitments), OREO and certain accrued interest on loans during the terms of the agreements. Under the terms of the loss-sharing agreements, the FDIC will absorb 80% of losses and share in 80% of loss recoveries up to specified amounts. With respect to loss-sharing agreements for two acquisitions completed in 2010, after those specified amounts, the FDIC will absorb 95% of losses and share in 95% of loss recoveries. The loss-sharing provisions of the agreements for commercial and single-family mortgage loans are in effect for five and ten years, respectively, from the acquisition dates and the loss recovery provisions are in effect for eight and ten years, respectively, from the acquisition dates.

Ten years and forty-five days after the acquisition dates, the Bank shall pay to the FDIC a clawback in the event the losses from the acquisitions fail to reach stated levels. The amount of the clawback is determined by a formula specified in each individual loss-sharing agreement. As of March 31, 2013, the net present value of the Bank’s estimated clawback liability is $3.8 million, which is included in other liabilities on the consolidated balance sheets.

18

The following is an analysis of our covered loans, net of related allowance for losses as of March 31, 2013 and December 31, 2012:

	March 31, 2013		December 31, 2012
Covered loans:	(dollars in thousands)
Commercial business	$	113,876	$	125,373
Real estate:
One-to-four family residential	49,639		57,150
Commercial and multifamily residential	220,037		233,106
Total real estate	269,676		290,256
Real estate construction:
One-to-four family residential	22,165		25,398
Commercial and multifamily residential	14,032		15,251
Total real estate construction	36,197		40,649
Consumer	42,103		44,516
Subtotal of covered loans	461,852		500,794
Less:
Valuation discount resulting from acquisition accounting	69,150		79,401
Allowance for loan losses	29,489		30,056
Covered loans, net of allowance for loan losses	$	363,213	$	391,337

Acquired impaired loans are accounted for under ASC 310-30 and initially measured at fair value based on expected future cash flows over the life of the loans. Acquired loans that have common risk characteristics are aggregated into pools. The Company remeasures contractual and expected cash flows, at the pool-level, on a quarterly basis.

Contractual cash flows are calculated based upon the loan pool terms after applying a prepayment factor. Calculation of the applied prepayment factor for contractual cash flows is the same as described below for expected cash flows.

Inputs to the determination of expected cash flows include cumulative default and prepayment data as well as loss severity and recovery lag information. Cumulative default and prepayment data are calculated via a transition matrix. The transition matrix is a matrix of probability values that specifies the probability of a loan pool transitioning into a particular delinquency state (e.g. 0-30 days past due, 31 to 60 days, etc.) given its delinquency state at the remeasurement date. Loss severity factors are based upon either actual charge-off data within the loan pools or industry averages and recovery lags are based upon the collateral within the loan pools.

Acquired impaired loans are also subject to the Company’s internal and external credit review and are risk rated using the same criteria as loans originated by the Company. However, risk ratings are not a clear indicator of losses on acquired loans as the loans were acquired with a significant discount and a majority of the losses are recoverable from the FDIC under the loss-sharing agreements.

Losses attributable to draws on acquired loans, advanced subsequent to the loan acquisition date, are accounted for under ASC 450-20 and those amounts are also subject to the Company’s internal and external credit review. An allowance for loan losses is estimated in a similar manner as the originated loan portfolio, and a provision for loan losses is charged to earnings as necessary.

The excess of cash flows expected to be collected over the initial fair value of acquired loans is referred to as the accretable yield and is accreted into interest income over the estimated life of the acquired loans using the effective yield method. Other adjustments to the accretable yield include changes in the estimated remaining life of the acquired loans, changes in expected cash flows and changes of indices for acquired loans with variable interest rates.

19

The following table shows the changes in accretable yield for acquired loans for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Balance at beginning of period	$	166,888		$	259,669
Accretion	(14,477		)	(27,658		)
Disposals	(774		)	(1,799		)
Reclassifications from nonaccretable difference	7,149			9,465
Balance at end of period	$	158,786		$	239,677

During the three months ended March 31, 2013, the Company recorded a provision expense for losses on covered loans of $980 thousand. Of this amount, $1.3 million was impairment expense calculated in accordance with ASC 310-30 and $300 thousand was a provision recapture to adjust the allowance for loss calculated under ASC 450-20 for draws on acquired loans. The impact to earnings of the $980 thousand of provision expense for covered loans was partially offset through noninterest income by a $784 thousand increase in the FDIC loss-sharing asset.

The changes in the ALLL for covered loans for the three months ended March 31, 2013 and 2012 are summarized as follows:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Balance at beginning of period	$	30,056		$	4,944
Loans charged off	(2,382		)	(562		)
Recoveries	835			437
Provision charged to expense	980			15,685
Balance at end of period	$	29,489		$	20,504

20

The following is an analysis of the credit quality of our covered loan portfolio as of March 31, 2013 and 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
March 31, 2013	(in thousands)
Covered loans:
Commercial business:
Secured	$	71,555	$	1,672	$	34,476	$	—	$	—	$	107,703
Unsecured	4,502		—		1,671		—		—		6,173
Real estate:
One-to-four family residential	40,030		331		9,278		—		—		49,639
Commercial and multifamily residential:
Commercial land	16,047		—		9,456		—		—		25,503
Income property	82,120		3,232		16,189		—		—		101,541
Owner occupied	76,454		398		16,141		—		—		92,993
Real estate construction:
One-to-four family residential:
Land and acquisition	6,449		2,796		4,892		—		—		14,137
Residential construction	2,812		—		5,216		—		—		8,028
Commercial and multifamily residential:
Income property	4,374		—		7,079		—		—		11,453
Owner occupied	1,099		—		1,480		—		—		2,579
Consumer	37,255		419		4,402		27		—		42,103
Total	$	342,697	$	8,848	$	110,280	$	27	$	—	461,852
Less:
Valuation discount resulting from acquisition accounting											69,150
Allowance for loan losses											29,489
Covered loans, net											$	363,213

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2012	(in thousands)
Covered loans:
Commercial business:
Secured	$	71,621	$	1,823	$	45,150	$	—	$	—	$	118,594
Unsecured	4,988		—		1,791		—		—		6,779
Real estate:
One-to-four family residential	44,782		1,344		11,024		—		—		57,150
Commercial and multifamily residential:
Commercial land	16,336		—		10,292		—		—		26,628
Income property	81,205		864		23,315		—		—		105,384
Owner occupied	82,222		3,318		15,554		—		—		101,094
Real estate construction:
One-to-four family residential:
Land and acquisition	4,817		3,273		5,743		—		—		13,833
Residential construction	6,050		—		5,515		—		—		11,565
Commercial and multifamily residential:
Income property	4,419		—		7,901		—		—		12,320
Owner occupied	1,107		—		1,824		—		—		2,931
Consumer	38,973		381		5,162		—		—		44,516
Total	$	356,520	$	11,003	$	133,271	$	—	$	—	500,794
Less:
Valuation discount resulting from acquisition accounting											79,401
Allowance for loan losses											30,056
Covered loans, net											$	391,337

21

The following table sets forth activity in covered OREO at carrying value for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Covered OREO:
Balance at beginning of period	$	16,311		$	28,126
Transfers in	1,405			2,468
Additional OREO write-downs	(65		)	(1,505		)
Proceeds from sale of OREO property	(6,438		)	(8,025		)
Net gain on sale of OREO	2,598			3,366
Total covered OREO at end of period	$	13,811		$	24,430

The covered OREO is covered by loss-sharing agreements with the FDIC in which the FDIC will share in 80% of additional write-downs, as well as gains and losses on covered OREO sales, or 95%, if applicable, of additional write-downs, as wells as gains and losses on covered OREO sales if the minimum loss share thresholds are met.

FDIC Loss-sharing Asset

At March 31, 2013, the FDIC loss-sharing asset is comprised of a $75.5 million FDIC indemnification asset and a $7.6 million FDIC receivable. The indemnification represents the cash flows the Company expects to collect from the FDIC under the loss-sharing agreements and the FDIC receivable represents the reimbursable amounts from the FDIC that have not yet been received.

For covered loans, the Company remeasures contractual and expected cash flows on a quarterly basis. When the quarterly remeasurement process results in a decrease in expected cash flows due to an increase in expected credit losses, impairment is recorded. As a result of this impairment, the indemnification asset is increased to reflect anticipated future cash to be received from the FDIC. Consistent with the loss-sharing agreements between the Company and the FDIC, the amount of the increase to the indemnification asset is measured as 80% of the resulting impairment.

Alternatively, when the quarterly remeasurement results in an increase in expected future cash flows due to a decrease in expected credit losses, the nonaccretable difference decreases and the effective yield of the related loan portfolio is increased. As a result of the improved expected cash flows, the indemnification asset would be reduced first by the amount of any impairment previously recorded and, second, by increased amortization over the remaining life of the related loss-sharing agreement.

22

The following table shows a detailed analysis of the FDIC loss-sharing asset for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012 (1)
	(in thousands)
Balance at beginning of period	$	96,354		$	175,071
Adjustments not reflected in income
Cash received from the FDIC	(3,119		)	(14,804		)
FDIC reimbursable losses, net	363			462
Adjustments reflected in income
Amortization, net	(9,779		)	(13,873		)
Loan impairment	784			12,548
Sale of other real estate	(1,346		)	(2,067		)
Write-downs of other real estate	52			1,629
Other	(194		)	95
Balance at end of period	$	83,115		$	159,061

__________

(1) Reclassified to conform to the current period’s presentation.

8. Goodwill and Intangible Assets

In accordance with the Intangibles – Goodwill and Other topic of the FASB ASC, goodwill is not amortized but is reviewed for potential impairment at the reporting unit level. Management analyzes its goodwill for impairment on an annual basis on July 31 and between annual tests in certain circumstances such as material adverse changes in legal, business, regulatory and economic factors. An impairment loss is recorded to the extent that the carrying amount of goodwill exceeds its implied fair value.

The core deposit intangible (“CDI”) is evaluated for impairment if events and circumstances indicate a possible impairment. The CDI is amortized on an accelerated basis over an estimated life of approximately 10 years.

The following table sets forth activity for goodwill and intangible assets for the period:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Total goodwill	$	115,554		$	115,554
Core deposit intangible:
Gross core deposit intangible balance at beginning of period	32,441			32,441
Accumulated amortization at beginning of period	(16,720		)	(12,275		)
Core deposit intangible, net at beginning of period	15,721			20,166
CDI current period amortization	(1,028		)	(1,150		)
Total core deposit intangible, net at end of period	14,693			19,016
Total goodwill and intangible assets at end of period	$	130,247		$	134,570

23

The following table provides the estimated future amortization expense of core deposit intangibles for the remaining nine months ending December 31, 2013 and the succeeding four years:

	Amount
	(in thousands)
Year ending December 31,
2013	$	2,936
2014	3,397
2015	2,645
2016	2,183
2017	1,627

9. Derivatives and Hedging Activities

The Company periodically enters into certain commercial loan interest rate swap agreements in order to provide commercial loan customers the ability to convert from variable to fixed interest rates. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to a swap agreement. This swap agreement effectively converts the customer’s variable rate loan into a fixed rate. The Company then enters into a corresponding swap agreement with a third party in order to offset its exposure on the variable and fixed components of the customer agreement. As the interest rate swap agreements with the customers and third parties are not designated as hedges under the Derivatives and Hedging topic of the FASB ASC, the instruments are marked to market in earnings. The notional amount of open interest rate swap agreements at March 31, 2013 and December 31, 2012 was $158.9 million and $177.0 million, respectively. There was no impact to the statement of operations for the three month periods ending March 31, 2013 and 2012.

The following table presents the fair value of derivatives not designated as hedging instruments at March 31, 2013 and December 31, 2012:

Asset Derivatives

Liability Derivatives

March 31, 2013

December 31, 2012

March 31, 2013

December 31, 2012

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

(in thousands)

Interest rate contracts

Other assets

$

13,456

Other assets

$

14,921

Other liabilities

$

13,456

Other liabilities

$

14,921

10. Shareholders’ Equity

On January 24, 2013 the Company declared a quarterly cash dividend of $0.10 per share payable on February 20, 2013 to shareholders of record at the close of business February 6, 2013. The payment of cash dividends is subject to Federal regulatory requirements for capital levels and other restrictions. In addition, the cash dividends paid by Columbia Bank to the Company are subject to both Federal and State regulatory requirements. Subsequent to quarter end, on April 24, 2013, the Company declared a quarterly cash dividend of $0.10 per common share, and common share equivalent for holders of preferred stock, payable on May 22, 2013 to shareholders of record at the close of business May 8, 2013.

24

11. Accumulated Other Comprehensive Income

The following table shows changes in accumulated other comprehensive income by component for the three month period ended March 31, 2013:

	Unrealized Gains and Losses on Available-for-Sale Securities (1)			Unrealized Gains and Losses on Pension Plan Liability (1)			Total (1)
	(in thousands)
Beginning balance	$	20,918		$	(769	)	$	20,149
Other comprehensive income before reclassifications	(2,493		)	(757		)	(3,250		)
Amounts reclassified from accumulated other comprehensive income (2)	(240		)	60			(180		)
Net current-period other comprehensive income	(2,733		)	(697		)	(3,430		)
Ending balance	18,185			(1,466		)	16,719

__________

(1) All amounts are net of tax. Amounts in parenthesis indicate debits.

(2) See following table for details about these reclassifications.

The following table shows details regarding the reclassifications from accumulated other comprehensive income for the three month period ended March 31, 2013:

	Amount Reclassified from Accumulated Other Comprehensive Income			Affected line Item in the Consolidated Statement of Income
	(in thousands)
Unrealized gains and losses on available-for-sale securities
	$	370		Investment securities gains, net
	370			Total before tax
	(130		)	Tax expense
	$	240		Net of tax
Amortization of pension plan liability
Actuarial losses	$	(92	)	Compensation and employee benefits
	(92		)	Total before tax
	32			Tax benefit
	$	(60	)	Net of tax

25

12. Fair Value Accounting and Measurement

The Fair Value Measurements and Disclosures topic of the FASB ASC defines fair value, establishes a consistent framework for measuring fair value and expands disclosure requirements about fair value. We hold fixed and variable rate interest-bearing securities, investments in marketable equity securities and certain other financial instruments, which are carried at fair value. Fair value is determined based upon quoted prices when available or through the use of alternative approaches, such as matrix or model pricing, when market quotes are not readily accessible or available.

The valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our own market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1 – Quoted prices for identical instruments in active markets that are accessible at the measurement date.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.

Fair values are determined as follows:

Securities at fair value are priced using a combination of market activity, industry recognized information sources, yield curves, discounted cash flow models and other factors. These fair value calculations are considered a Level 2 input method under the provisions of the Fair Value Measurements and Disclosures topic of the FASB ASC for all securities other than U.S. Treasury notes, which are considered a Level 1 input method.

Interest rate contract positions are valued in models, which use as their basis, readily observable market parameters and are classified within Level 2 of the valuation hierarchy.

26

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at March 31, 2013 and December 31, 2012 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

	Fair value		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2		Level 3
March 31, 2013	(in thousands)
Assets
Securities available for sale
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations	$	511,955	$	—	$	511,955	$	—
State and municipal debt securities	275,605		—		275,605		—
U.S. government agency and government-sponsored enterprise securities	201,527		—		201,527		—
U.S. government securities	19,706		19,706		—		—
Other securities	3,369		—		3,369		—
Total securities available for sale	$	1,012,162	$	19,706	$	992,456	$	—
Other assets (Interest rate contracts)	$	13,456	$	—	$	13,456	$	—
Liabilities
Other liabilities (Interest rate contracts)	$	13,456	$	—	$	13,456	$	—

	Fair value		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2		Level 3
December 31, 2012	(in thousands)
Assets
Securities available for sale
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations	$	572,369	$	—	$	572,369	$	—
State and municipal debt securities	285,575		—		285,575		—
U.S. government agency and government-sponsored enterprise securities	120,501		—		120,501		—
U.S. government securities	19,828		19,828		—		—
Other securities	3,392		—		3,392		—
Total securities available for sale	$	1,001,665	$	19,828	$	981,837	$	—
Other assets (Interest rate contracts)	$	14,921	$	—	$	14,921	$	—
Liabilities
Other liabilities (Interest rate contracts)	$	14,921	$	—	$	14,921	$	—

There were no transfers between Level 1 and Level 2 of the valuation hierarchy during the three month periods ended March 31, 2013 and 2012. The Company recognizes transfers between levels of the valuation hierarchy based on the valuation level at the end of the reporting period.

27

Nonrecurring Measurements

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans measured for impairment and OREO. The following methods were used to estimate the fair value of each such class of financial instrument:

Impaired loans—A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due (both interest and principal) according to the contractual terms of the loan agreement. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, a loan’s observable market price, or the fair market value of the collateral if the loan is a collateral-dependent loan. Generally, the Company utilizes the fair market value of the collateral to measure impairment. The impairment evaluations are performed in conjunction with the ALLL process on a quarterly basis by officers in the Special Credits group, which reports to the Chief Credit Officer. The Real Estate Appraisal Services Department ("REASD"), which also reports to the Chief Credit Officer, is responsible for obtaining appraisals from third-parties or performing internal evaluations. If an appraisal is obtained from a third-party, the REASD reviews the appraisal to evaluate the adequacy of the appraisal report, including its scope, methods, accuracy, and reasonableness.

Other real estate owned and other personal property owned ("OPPO")—OREO and OPPO are real and personal property that the Bank has taken ownership of in partial or full satisfaction of a loan or loans. OREO and OPPO are generally measured based on the item's fair market value as indicated by an appraisal or a letter of intent to purchase. OREO and OPPO are recorded at the lower of carrying amount or fair value less estimated costs to sell. This amount becomes the property’s new basis. Any write-downs based on the property fair value less estimated cost to sell at the date of acquisition are charged to the allowance for loan and lease losses. Management periodically reviews OREO and OPPO in an effort to ensure the property is carried at the lower of its new basis or fair value, net of estimated costs to sell. Any write-downs subsequent to acquisition are charged to earnings. The initial and subsequent write-down evaluations are performed by officers in the Special Credits group, which reports to the Chief Credit Officer. The REASD obtains appraisals from third-parties for OREO and OPPO and performs internal evaluations. If an appraisal is obtained from a third-party, the REASD reviews the appraisal to evaluate the adequacy of the appraisal report, including its scope, methods, accuracy, and reasonableness.

The following tables set forth the Company's assets that were measured using fair value estimates on a nonrecurring basis at March 31, 2013 and 2012.

	Fair value at March 31, 2013		Fair Value Measurements at Reporting Date Using						Losses During the Three Months Ended March 31, 2013
			Level 1		Level 2		Level 3
	(in thousands)
Impaired loans	$	477	$	—	$	—	$	477	$	102
Noncovered OREO	1,350		—		—		1,350		101
Covered OREO	65		—		—		65		65
	$	1,892	$	—	$	—	$	1,892	$	268

	Fair value  at March 31, 2012		Fair Value Measurements at Reporting Date Using						Losses During the Three Months Ended March 31, 2012
			Level 1		Level 2		Level 3
	(in thousands)
Impaired loans	$	12,416	$	—	$	—	$	12,416	$	2,881
Noncovered OREO	3,510		—		—		3,510		1,730
Covered OREO	1,917		—		—		1,917		767
Noncovered OPPO	2,334		—		—		2,334		1,950
	$	20,177	$	—	$	—	$	20,177	$	7,328

The losses on impaired loans disclosed above represent the amount of the specific reserve and/or charge-offs during the period applicable to loans held at period end. The amount of the specific reserve is included in the allowance for loan and lease losses. The losses on OREO and OPPO disclosed above represent the write-downs taken at foreclosure that were charged to the allowance for loan and lease losses, as well as subsequent write-downs from updated appraisals that were charged to earnings.

28

Quantitative information about Level 3 fair value measurements

The range and weighted-average of the significant unobservable inputs used to fair value our Level 3 nonrecurring assets, along with the valuation techniques used, are shown in the following table:

	Fair value at March 31, 2013		Valuation Technique	Unobservable Input	Range (Weighted Average) (1)
	(dollars in thousands)
Impaired loans	$	477	Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Noncovered OREO	1,350		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Covered OREO	65		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
(1) Discount applied to appraisal value, letter of intent to purchase, or stated value (in the case of accounts receivable and inventory).
(2) Quantitative disclosures are not provided for impaired loans, noncovered OREO, and covered OREO because there were no adjustments made to the appraisal value during the current period.

	Fair value  at March 31, 2012		Valuation Technique	Unobservable Input	Range (Weighted Average) (1)
	(dollars in thousands)
Impaired loans	$	12,416	Fair Market Value of Collateral	Adjustment to Appraisal Value	0% - 37% (12%)
Noncovered OREO	3,510		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Covered OREO	1,917		Fair Market Value of Collateral	Adjustment to Appraisal Value	0% - 23% (3%)
Noncovered OPPO	2,334		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
(1) Discount applied to appraisal value, letter of intent to purchase, or stated value (in the case of accounts receivable and inventory).
(2) Quantitative disclosures are not provided for noncovered OREO and noncovered OPPO because there were no adjustments made to the appraisal value during the current period.

29

Fair value of financial instruments

Because broadly traded markets do not exist for most of the Company’s financial instruments, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do not include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and may not be realized in an actual sale or immediate settlement of the instruments. There may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein do not represent, and should not be construed to represent, the underlying value of the Company.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and due from banks and interest-earning deposits with banks—The fair value of financial instruments that are short-term or reprice frequently and that have little or no risk are considered to have a fair value that approximates carrying value (Level 1).

Securities available for sale—Securities at fair value, other than U.S. Treasury Notes, are priced using a combination of market activity, industry recognized information sources, yield curves, discounted cash flow models and other factors (Level 2). U.S. Treasury Notes are priced using quotes in active markets (Level 1).

Federal Home Loan Bank stock—The fair value is based upon the par value of the stock which equates to its carrying value (Level 2).

Loans—Loans are not recorded at fair value on a recurring basis. Nonrecurring fair value adjustments are periodically recorded on impaired loans that are measured for impairment based on the fair value of collateral. For most performing loans, fair value is estimated using expected duration and lending rates that would have been offered on March 31, 2013 or December 31, 2012, for loans which mirror the attributes of the loans with similar rate structures and average maturities. The fair values resulting from these calculations are reduced by an amount representing the change in estimated fair value attributable to changes in borrowers’ credit quality since the loans were originated. For nonperforming loans, fair value is estimated by applying a valuation discount based upon loan sales data from the FDIC. For covered loans, fair value is estimated by discounting the expected future cash flows using a lending rate that would have been offered on March 31, 2013 (Level 3).

FDIC loss-sharing asset —The fair value of the FDIC loss-sharing asset is estimated based on discounting the expected future cash flows using an estimated market rate (Level 3).

Interest rate contracts—Interest rate swap positions are valued in models, which use as their basis, readily observable market parameters (Level 2).

Deposits—For deposits with no contractual maturity, the fair value is equal to the carrying value (Level 1). The fair value of fixed maturity deposits is based on discounted cash flows using the difference between the deposit rate and current market rates for deposits of similar remaining maturities (Level 2).

FHLB advances—The fair value of Federal Home Loan Bank of Seattle (the “FHLB”) advances is estimated based on discounting the future cash flows using the market rate currently offered (Level 2).

Repurchase Agreements—The fair value of securities sold under agreement to repurchase is estimated based on discounting the future cash flows using the market rate currently offered (Level 2).

Other Financial Instruments—The majority of our commitments to extend credit and standby letters of credit carry current market interest rates if converted to loans, as such, carrying value is assumed to equal fair value.

30

The following tables summarize carrying amounts and estimated fair values of selected financial instruments as well as assumptions used by the Company in estimating fair value at March 31, 2013 and December 31, 2012:

	March 31, 2013
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
	(in thousands)
Assets
Cash and due from banks	$	91,889	$	91,889	$	91,889	$	—	$	—
Interest-earning deposits with banks	356,056		356,056		356,056		—		—
Securities available for sale	1,012,162		1,012,162		19,706		992,456		—
FHLB stock	21,621		21,621		—		21,621		—
Loans held for sale	888		888		—		888		—
Loans	2,933,306		2,978,867		—		—		2,978,867
FDIC loss-sharing asset	83,115		25,062		—		—		25,062
Interest rate contracts	13,456		13,456		—		13,456		—
Liabilities
Deposits	$	4,046,539	$	4,047,346	$	3,573,755	$	473,591	$	—
FHLB Advances	6,634		6,237		—		6,237		—
Repurchase agreements	25,000		26,396		—		26,396		—
Interest rate contracts	13,456		13,456		—		13,456		—

	December 31, 2012
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
	(in thousands)
Assets
Cash and due from banks	$	124,573	$	124,573	$	124,573	$	—	$	—
Interest-earning deposits with banks	389,353		389,353		389,353		—		—
Securities available for sale	1,001,665		1,001,665		19,828		981,837		—
FHLB stock	21,819		21,819		—		21,819		—
Loans held for sale	2,563		2,563		—		2,563		—
Loans	2,864,803		2,944,317		—		—		2,944,317
FDIC loss-sharing asset	96,354		26,543		—		—		26,543
Interest rate contracts	14,921		14,921		—		14,921		—
Liabilities
Deposits	$	4,042,085	$	4,043,221	$	3,549,821	$	493,400	$	—
FHLB Advances	6,644		5,894		—		5,894		—
Repurchase agreements	25,000		26,464		—		26,464		—
Interest rate contracts	14,921		14,921		—		14,921		—

31

13. Earnings per Common Share

The Company applies the two-class method of computing basic and diluted EPS. Under the two-class method, EPS is determined for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company grants restricted shares under share-based compensation plans that qualify as participating securities.

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2013 and 2012:

	Three Months Ended
	March 31,
	2013			2012
	(in thousands except per share)
Basic EPS:
Net income	$	12,176		$	8,902
Less: Earnings allocated to participating securities	(123		)	(132		)
Earnings allocated to common shareholders	$	12,053		$	8,770
Weighted average common shares outstanding	39,348			39,195
Basic earnings per common share	$	0.31		$	0.22
Diluted EPS:
Earnings allocated to common shareholders	$	12,053		$	8,770
Weighted average common shares outstanding	39,348			39,195
Dilutive effect of equity awards	3			103
Weighted average diluted common shares outstanding	39,351			39,298
Diluted earnings per common share	$	0.31		$	0.22
Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive	9			46

14. Subsequent Events

Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Nonrecognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date.

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 operating results of the Company for the three months ended March 31, 2013 do not include the operating results produced by West Coast as the acquisition did not close until April 1, 2013. It is not practical to present financial information related to the acquisition at this time because the fair value measurement of assets acquired and liabilities assumed has not been finalized.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion should be read in conjunction with the unaudited consolidated financial statements of Columbia Banking System, Inc. (referred to in this report as “we”, “our”, and “the Company”) and notes thereto presented elsewhere in this report and with the December 31, 2012 audited consolidated financial statements and its accompanying notes included in our Annual Report on Form 10-K. In the following discussion, unless otherwise noted, references to increases or decreases in average balances in items of income and expense for a particular period and balances at a particular date refer to the comparison with corresponding amounts for the period or date one year earlier.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about our plans, objectives, expectations and intentions that are not historical facts, and other statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “should,” “projects,” “seeks,” “estimates” or words of similar meaning. These forward-looking statements are based on current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. In addition to the factors set forth in the sections “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report, the following factors, among others, could cause actual results to differ materially from the anticipated results:

• local and national economic conditions could be less favorable than expected or could have a more direct and pronounced effect on us than expected and adversely affect our ability to continue internal growth at historical rates and maintain the quality of our earning assets;

• the local housing/real estate markets where we operate and make loans could continue to face challenges;

• the risks presented by a continued challenging economy, including the current uncertainty regarding sequestration, which could adversely affect credit quality, collateral values, including real estate collateral, investment values, liquidity and loan originations and loan portfolio delinquency rates;

• the inability to smoothly integrate West Coast Bancorp with Columbia and retain customers and employees;

• the efficiencies and enhanced financial and operating performance we expect to realize from investments in personnel, acquisitions and infrastructure may not be realized;

• interest rate changes could significantly reduce net interest income and negatively affect funding sources;

• projected business increases following strategic expansion or opening of new branches could be lower than expected;

• our reliance on FHLB advances and FRB borrowings as additional sources of short and long-term funding;

• changes in the scope and cost of FDIC insurance and other coverages;

• the impact of FDIC-assisted loans on our earnings;

• changes in accounting principles, policies, and guidelines applicable to bank holding companies and banking;

• competition among financial institutions could increase significantly;

• the goodwill we have recorded in connection with acquisitions could become impaired, which may have an adverse impact on our earnings and capital;

• the reputation of the financial services industry could deteriorate, which could adversely affect our ability to access markets for funding and to acquire and retain customers;

• our ability to effectively manage credit risk, interest rate risk, market risk, operational risk, legal risk, liquidity risk and regulatory and compliance risk; and

• our profitability measures could be adversely affected if we are unable to effectively manage our capital.

You should take into account that forward-looking statements speak only as of the date of this report. 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, except as required under federal securities laws.

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CRITICAL ACCOUNTING POLICIES

Management has identified the accounting policies related to the allowance for loan and lease losses, business combinations, acquired impaired loans, FDIC loss sharing asset and the valuation and recoverability of goodwill as critical to an understanding of our financial statements. These policies and related estimates are discussed in “Item 7. Management Discussion and Analysis of Financial Condition and Results of Operation” under the headings “Allowance for Loan and Lease Losses”, “Business Combinations”, “Acquired Impaired Loans”, "FDIC Loss Sharing Asset” and “Valuation and Recoverability of Goodwill” in our 2012 Annual Report on Form 10-K. There have not been any material changes in our critical accounting policies as compared to those disclosed in our 2012 Annual Report on Form 10-K.

RESULTS OF OPERATIONS

Our results of operations are dependent to a large degree on our net interest income. We also generate noninterest income through service charges and fees, merchant services fees, and bank owned life insurance. Our operating expenses consist primarily of compensation and employee benefits, occupancy, merchant card processing, data processing and legal and professional fees. Like most financial institutions, our interest income and cost of funds are affected significantly by general economic conditions, particularly changes in market interest rates, and by government policies and actions of regulatory authorities.

Earnings Summary

The Company reported net income for the first quarter of $12.2 million or $0.31 per diluted common share, compared to $8.9 million or $0.22 per diluted common share for the first quarter of 2012.

The increase in net income from the first quarter of 2012 was attributable to lower noninterest expense and provision for loan losses on noncovered loans, partially offset by a reduction in the pretax earnings impact of the acquired loan portfolio.

Revenue (net interest income plus noninterest income) for the three months ended March 31, 2013 was $55.1 million, 28% less than the same period in 2012. The decrease in revenue was a result of lower incremental accretion income on acquired loans. For a more complete discussion of this topic, please refer to the net interest income section contained in the ensuing pages.

The provision for loan and lease losses for the first quarter of 2013 was a recapture of $1.0 million for the noncovered loan portfolio and a provision of $980 thousand for the covered loan portfolio compared to provisions of $4.5 million for the noncovered loan portfolio and $15.7 million for the covered loan portfolio during the first quarter of 2012. The $1.0 million provision recapture for the noncovered loan portfolio for the three months ended March 31, 2013 was due to improving credit metrics within the noncovered loan portfolio as well as a $2.0 million recovery experienced during the current quarter related to a single borrowing relationship. The Company believes that, at 1.95% of net noncovered loans, the allowance for loan and lease losses remains adequate at March 31, 2013. The allowance to net noncovered loans was 2.07% at year-end 2012. The $980 thousand in provision for losses on covered loans for the three months ended March 31, 2013 was primarily due to decreased expected future cash flows as remeasured during the current quarter when compared to the prior quarter's remeasurement. The $980 thousand in provision is partially off-set by a $784 thousand favorable adjustment to the change in FDIC loss-sharing asset.

Total noninterest expense for the quarter ended March 31, 2013 was $38.0 million, a 14% decrease from the first quarter of 2012. The decrease from the prior-year period was primarily due to substantial write-downs of OREO and OPPO during the first quarter of the prior year.

34

The increase in net income was partially offset by a reduction to the pretax earnings impact of the acquired loan portfolio. The following table illustrates the impact to earnings associated with the Company's acquired loan portfolios for the periods indicated:

	Three Months Ended March 31,
	2013			2012
	( in thousands)
Incremental accretion income on acquired loans	$	9,445		$	22,421
Provision for losses on covered loans	(980		)	(15,685		)
Change in FDIC-loss sharing asset	(10,483		)	(1,668		)
FDIC clawback liability expense	(231		)	26
Pre-tax earnings impact of acquisition accounting	$	(2,249	)	$	5,094

Net Interest Income

Net interest income for the first quarter of 2013 was $53.5 million, a decrease of 20% from $67.1 million for the same quarter in 2012. The Company's net interest margin decreased to 5.06% in the first quarter of 2013, from 6.67% for the same quarter last year. The decreases in net interest income and margin were primarily due to accretion income on the acquired loan portfolios, which were significantly lower in the current period. In addition to the impact of accretion income, net interest income also decreased due to the combination of lower rates on loans as well as securities due to the overall decreasing trend in rates.

The incremental accretion income represents the amount of income recorded on the acquired loans above the contractual rate stated in the individual loan notes. The incremental accretion income had a positive impact of approximately 87 bps on the first quarter's net interest margin. For the same period last year, the incremental accretion income had a positive impact of approximately 218 bps on the net interest margin.

Incremental accretion income from acquired impaired loans decreased $10.9 million from the prior year period. In addition, the discount accretion on other acquired loans decreased $2.0 million from the prior year period. These decreases were primarily due to the moderating trend for incremental accretion income due to decreases in the acquired loan balances resulting from repayments. For additional information on the Company's accounting policies related to recording interest income on loans, please refer to “Item 8. Financial Statements and Supplementary Data” in our 2012 Annual Report on Form 10-K.

The following table shows the impact to interest income and the related impact to the net interest margin resulting from accretion of income on certain acquired loan portfolios for the periods presented:

	Three Months Ended March 31,
	2013			2012
	(dollars in thousands)
Interest income as recorded	$	16,489		$	32,902
Less: Interest income at stated note rate	7,044			10,481
Incremental accretion income	$	9,445		$	22,421
Incremental accretion income due to:
Acquired impaired loans	8,375			19,320
Other acquired loans	1,070			3,101
Incremental accretion income	$	9,445		$	22,421
Net interest margin	5.06		%	6.67		%
Operating net interest margin, excluding incremental accretion income, interest reversals on nonaccrual loans and prepayment charges on FHLB advances	4.21		%	4.49		%

35

The following table sets forth the average balances of all major categories of interest-earning assets and interest-bearing liabilities, the total dollar amounts of interest income on interest-earning assets and interest expense on interest-bearing liabilities, the average yield earned on interest-earning assets and average rate paid on interest-bearing liabilities by category and in total net interest income and net interest margin:

	Three Months Ended March 31,						Three Months Ended March 31,
	2013						2012
	Average Balances (1)		Interest Earned / Paid		Average Rate		Average Balances (1) (3)		Interest Earned / Paid (3)		Average Rate
	(dollars in thousands)
ASSETS
Loans, excluding covered loans, net (1) (2)	$	2,559,177	$	33,163	5.18	%	$	2,337,292	$	33,749	5.78	%
Covered loans, net (1)	403,382		14,992		14.87	%	523,232		28,221		21.57	%
Taxable securities	782,158		4,234		2.17	%	747,503		5,245		2.82	%
Tax exempt securities (2)	269,499		3,566		5.29	%	275,563		3,918		5.72	%
Interest-earning deposits with banks and federal funds sold	322,761		201		0.25	%	253,859		165		0.26	%
Total interest-earning assets	4,336,977		$	56,156	5.18	%	4,137,449		$	71,298	6.93	%
Other earning assets	80,604						74,924
Noninterest-earning assets	433,484						563,813
Total assets	$	4,851,065					$	4,776,186
LIABILITIES AND SHAREHOLDERS’ EQUITY
Certificates of deposit	$	482,644	$	580	0.48	%	$	589,573	$	1,000	0.68	%
Savings accounts	326,760		16		0.02	%	291,554		23		0.03	%
Interest-bearing demand	839,716		179		0.09	%	747,242		231		0.12	%
Money market accounts	1,090,980		314		0.12	%	1,044,542		525		0.20	%
Total interest-bearing deposits	2,740,100		1,089		0.16	%	2,672,911		1,779		0.27	%
Federal Home Loan Bank and Federal Reserve Bank borrowings	6,643		71		4.26	%	117,095		750		2.58	%
Other borrowings	25,000		119		1.90	%	25,855		120		1.87	%
Total interest-bearing liabilities	2,771,743		$	1,279	0.18	%	2,815,861		$	2,649	0.38	%
Noninterest-bearing deposits	1,250,028						1,132,413
Other noninterest-bearing liabilities	60,887						66,226
Shareholders’ equity	768,407						761,686
Total liabilities & shareholders’ equity	$	4,851,065					$	4,776,186
Net interest income (2)			$	54,877					$	68,649
Net interest margin					5.06	%					6.67	%

(1) Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees were included in the interest income calculations. The amortization of net deferred loan fees was $661 thousand and $312 thousand for the three months ended March 31, 2013 and 2012, respectively. The amortization of net unearned discounts on other acquired loans was $1.1 million and $3.1 million for the three months ended March 31, 2013 and 2012, respectively.

(2) Tax-exempt income is calculated on a tax equivalent basis, based on a marginal tax rate of 35%. The tax equivalent yield adjustment to interest earned on noncovered loans was $127 thousand and $193 thousand for the three months ended March 31, 2013 and 2012, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.3 million and $1.4 million for the three months ended March 31, 2013 and 2012, respectively.

(3) Reclassified to conform to the current period's presentation.

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The following tables set forth the total dollar amount of change in interest income and interest expense. The changes have been segregated for each major category of interest-earning assets and interest-bearing liabilities into amounts attributable to changes in volume, changes in rates and changes in rates multiplied by volume. Changes attributable to the combined effect of volume and interest rates have been allocated proportionately to the changes due to volume and the changes due to interest rates:

	Three Months Ended March 31, 2013 Compared to 2012 Increase (Decrease) Due to
	Volume			Rate			Total
	(in thousands)
Interest Income
Loans, excluding covered loans, net	$	3,046		$	(3,632	)	$	(586	)
Covered loans, net	(5,612		)	(7,617		)	(13,229		)
Taxable securities	234			(1,245		)	(1,011		)
Tax exempt securities	(85		)	(267		)	(352		)
Interest earning deposits with banks and federal funds sold	43			(7		)	36
Interest income	$	(2,374	)	$	(12,768	)	$	(15,142	)
Interest Expense
Deposits:
Certificates of deposit	$	(161	)	$	(259	)	$	(420	)
Savings accounts	3			(10		)	(7		)
Interest-bearing demand	26			(78		)	(52		)
Money market accounts	22			(233		)	(211		)
Total interest on deposits	(110		)	(580		)	(690		)
FHLB and Federal Reserve Bank borrowings	(983		)	304			(679		)
Other borrowings	(4		)	3			(1		)
Interest expense	$	(1,097	)	$	(273	)	$	(1,370	)

Provision for Loan and Lease Losses

The provision for loan and lease losses for the first quarter of 2013 was a recapture of $1.0 million for the noncovered loan portfolio and a provision of $980 thousand for the covered loan portfolio compared with provisions of $4.5 million and $15.7 million, respectively, during the first quarter of 2012. The $980 thousand in provision for losses on covered loans in the current period was primarily due to the decrease in expected future cash flows from covered loans as remeasured during current quarter, compared to the expected future cash flows as remeasured during the fourth quarter of 2012, net of the actual cash flows received during the quarter. The $980 thousand in provision expense is substantially offset by a $784 thousand favorable adjustment to the change in FDIC loss-sharing asset.

The $1.0 million provision recapture for noncovered loan losses was due to improving credit metrics within the noncovered loan portfolio as well as a $2.0 million recovery experienced during the current quarter related to a single borrowing relationship. Net noncovered loan charge-offs for the current quarter were $125 thousand compared to $5.3 million for the first quarter of 2012. The amount of provision was calculated in accordance with the Company’s methodology for determining the ALLL, discussed in Note 5 to the Consolidated Financial Statements in "Item 1. Financial Statements (unaudited)" of this report and was based upon improving credit metrics in the noncovered loan portfolio.

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Noninterest Income

The following table presents the significant components of noninterest income and the related dollar and percentage change from period to period:

	Three Months Ended March 31,
	2013			2012			$ Change			% Change
	(dollars in thousands)
Service charges and other fees	$	7,594		$	7,177		$	417		6	%
Merchant services fees	1,851			2,018			(167		)	(8	)%
Investment securities gains, net	370			62			308			497	%
Bank owned life insurance	698			711			(13		)	(2	)%
Other	1,628			1,274			354			28	%
Subtotal	12,141			11,242			899			8	%
Change in FDIC-loss sharing asset	(10,483		)	(1,668		)	(8,815		)	528	%
Total noninterest income	$	1,658		$	9,574		$	(7,916	)	(83	)%

Noninterest income was $1.7 million for the first quarter of 2013, compared to $9.6 million for the same period in 2012. The decrease was primarily due to the $10.5 million change in the FDIC loss-sharing asset recorded as a reduction in income during the current quarter, compared to a $1.7 million reduction in income during the same period in 2012. This decrease was partially offset by an increase of $417 thousand in service charges and other fees as well as an increase in other noninterest income of $354 thousand, which was due to an increase in Small Business Administration premiums in the current quarter.

Changes in the FDIC loss-sharing asset are primarily driven by amortization of the FDIC loss-sharing asset and the provision recorded for reimbursable losses on FDIC covered loans. For the first quarter of 2013, the $9.8 million of amortization of the FDIC loss-sharing asset was partially offset by a $784 thousand increase in the FDIC loss-sharing asset related to the provision recorded for reimbursable losses on FDIC covered loans. For the same period in 2012, the $13.9 million of amortization of the FDIC loss-sharing asset was partially offset by a $12.5 million increase in the FDIC loss-sharing asset related to the provision expense recorded for reimbursable losses on FDIC covered loans. For additional information on the FDIC loss-sharing asset, please see the "FDIC Loss-sharing Asset" section of Management's Discussion and Analysis and Note 7 to the Consolidated Financial Statements in "Item 1. Financial Statements (unaudited)" of this report.

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Noninterest Expense

The following table presents the significant components of noninterest expense and the related dollar and percentage change from period to period:

	Three Months Ended March 31,
	2013			2012			$ Change			% Change
	(dollars in thousands)
Compensation	$	17,888		$	18,041		$	(153	)	(1	)%
Employee benefits	3,740			3,588			152			4	%
Contract labor	25			366			(341		)	(93	)%
	21,653			21,995			(342		)	(2	)%
All other noninterest expense:
Occupancy	4,753			5,333			(580		)	(11	)%
Merchant processing	857			873			(16		)	(2	)%
Advertising and promotion	870			882			(12		)	(1	)%
Data processing and communications	2,580			2,213			367			17	%
Legal and professional services	2,050			1,609			441			27	%
Taxes, license and fees	1,387			1,355			32			2	%
Regulatory premiums	857			860			(3		)	—	%
Net cost (benefit) of operation of noncovered other real estate owned	(54		)	2,693			(2,747		)	(102	)%
Net benefit of operation of covered other real estate owned	(2,447		)	(1,783		)	(664		)	37	%
Amortization of intangibles	1,029			1,150			(121		)	(11	)%
Other	4,514			7,172			(2,658		)	(37	)%
Total all other noninterest expense	16,396			22,357			(5,961		)	(27	)%
Total noninterest expense	$	38,049		$	44,352		$	(6,303	)	(14	)%

Total noninterest expense for the first quarter of 2013 was $38.0 million, a decrease of $6.3 million, or 14% from $44.4 million a year earlier. The decrease from the prior-year period was due to a decrease of $2.7 million in other noninterest expense as well as a decrease of $3.4 million in net cost (benefit) of operation of other real estate. The decrease in other noninterest expense was primarily due to the Company recording $2.2 million in OPPO write-downs during the prior year period. The decrease in net cost (benefit) of operation of OREO was due to substantial write-downs recorded in the prior year period. These decreases were partially offset by a $441 thousand increase in legal and professional expenses, which includes $508 thousand during the current quarter related to the acquisition of West Coast Bancorp. Total merger related expense for the current quarter was $723 thousand.

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The following table presents selected items included in other noninterest expense and the associated change from period to period:

	Three Months Ended March 31,					Increase (Decrease) Amount
	2013			2012
	(in thousands)
Postage	$	473		$	442	$	31
Software support & maintenance	362			376		(14		)
Supplies	210			302		(92		)
Insurance	261			271		(10		)
ATM Network	271			308		(37		)
Travel	270			294		(24		)
Employee expenses	199			219		(20		)
Sponsorships and charitable contributions	245			163		82
Directors fees	153			117		36
Federal Reserve Bank processing fees	45			75		(30		)
CRA partnership investment expense	—			71		(71		)
Investor relations	138			28		110
Other personal property owned	(104		)	2,156		(2,260		)
Miscellaneous	1,991			2,350		(359		)
Total other noninterest expense	$	4,514		$	7,172	$	(2,658	)

In managing our business, we review the efficiency ratio, on a fully taxable-equivalent basis. Our efficiency ratio (noninterest expense, excluding net cost of operation of other real estate, FDIC clawback liability expense and merger related expenses, divided by the sum of net interest income and noninterest income on a tax equivalent basis, excluding any gain/loss on sale of investment securities, gain on bank acquisition, incremental accretion income on the acquired loan portfolio and the change in the FDIC indemnification asset) was 68.68% for the first quarter of 2013 compared to 71.48% for the first quarter 2012.

Income Taxes

We recorded an income tax provision of $4.9 million for the first quarter of 2013, compared to a provision of $3.2 million for the same period in 2012. The effective tax rate was 29% for the first quarter of 2013 compared to 26% for the first quarter of 2012. Our effective tax rate remains lower than the statutory tax rate due to our nontaxable income generated from tax-exempt loans and municipal bonds, investments in bank owned life insurance, and low income housing credits. For additional information, please refer to the Company's annual report on Form 10-K for the year ended December 31, 2012.

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FINANCIAL CONDITION

Total assets were $4.91 billion as of March 31, 2013, relatively unchanged from December 31, 2012.

Investment Securities

At March 31, 2013, the Company held investment securities totaling $1.01 billion compared to $1.00 billion at December 31, 2012. All of our securities are classified as available for sale and carried at fair value. The increase in the investment securities portfolio from year-end is due to $84.7 million in purchases, partially offset by $67.4 million in maturities and sales of securities in the portfolio. These securities are used by the Company as a component of its balance sheet management strategies. From time-to-time securities may be sold to reposition the portfolio in response to strategies developed by the Company’s asset liability committee. In accordance with our investment strategy, management monitors market conditions with a view to realize gains on its available for sale securities portfolio when prudent.

At March 31, 2013, the market value of securities available for sale had an unrealized gain of $28.1 million compared to an unrealized gain of $32.3 million at December 31, 2012. The decrease in the unrealized gain was the result of the fluctuations in interest rates. The Company does carry $352.0 million of investment securities with unrealized losses of $7.9 million; however, we do not consider these investment securities to be other-than-temporarily impaired. In the future, if the impairment is judged to be other-than-temporary, to the extent that the loss is determined to be credit-related, the cost basis of the individual impaired securities will be written down to fair value; the amount of the write-down could be included in earnings as a realized loss. The remaining non-credit-related impairment would be recorded to other comprehensive income.

The following table sets forth our securities portfolio by type for the dates indicated:

	March 31, 2013		December 31, 2012
	(in thousands)
Securities Available for Sale
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	511,955	$	572,369
State and municipal securities	275,605		285,575
U.S. government and government-sponsored enterprise securities	201,527		120,501
U.S. government securities	19,706		19,828
Other securities	3,369		3,392
Total	$	1,012,162	$	1,001,665

For further information on our investment portfolio see Note 3 of the Consolidated Financial Statements in "Item 1. Financial Statements (unaudited)" of this report.

Credit Risk Management

The extension of credit in the form of loans or other credit products to individuals and businesses is one of our principal business activities. Our policies and applicable laws and regulations require risk analysis as well as ongoing portfolio and credit management. We manage our credit risk through lending limit constraints, credit review, approval policies, and extensive, ongoing internal monitoring. We also manage credit risk through diversification of the loan portfolio by type of loan, type of industry, type of borrower and by limiting the aggregation of debt limits to a single borrower. The monitoring process for our loan portfolio includes periodic reviews of individual loans with risk ratings assigned to each loan. We review these loans to assess the ability of the borrower to service all of its interest and principal obligations and, as a result, the risk rating may be adjusted accordingly. In the event that full collection of principal and interest is not reasonably assured, the loan is appropriately downgraded and, if warranted, placed on nonaccrual status even though the loan may be current as to principal and interest payments. Additionally, we review these types of loans for impairment in accordance with the Receivables topic of the FASB ASC. Impaired loans are considered for nonaccrual status and will typically remain as such until all principal and interest payments are brought current and the prospects for future payments in accordance with the loan agreement appear relatively certain.

Loan policies, credit quality criteria, loan portfolio guidelines and other credit approval processes are established under the guidance of our Chief Credit Officer and approved, as appropriate, by the Board of Directors. The Company’s Credit Administration department and loan committee have the responsibility for administering the credit approval process. As another part of its control process, we use an independent internal credit review and examination function to provide assurance that

41

loans and commitments are made and maintained as prescribed by our credit policies. This includes a review of documentation when the loan is initially extended and subsequent monitoring to assess continued performance and proper risk assessment.

Loan Portfolio Analysis

We are a full service commercial bank, which originates a wide variety of loans, and focuses its lending efforts on originating commercial business and commercial real estate loans.

The following table sets forth the Company’s loan portfolio by type of loan for the dates indicated:

	March 31, 2013			% of Total		December 31, 2012			% of Total
	(dollars in thousands)
Commercial business	$	1,204,760		46.0	%	$	1,155,158		45.7	%
Real estate:
One-to-four family residential	43,604			1.7	%	43,922			1.7	%
Commercial and multifamily residential	1,106,987			42.2	%	1,061,201			42.0	%
Total real estate	1,150,591			43.9	%	1,105,123			43.7	%
Real estate construction:
One-to-four family residential	52,946			2.0	%	50,602			2.0	%
Commercial and multifamily residential	67,213			2.6	%	65,101			2.7	%
Total real estate construction	120,159			4.6	%	115,703			4.7	%
Consumer	152,687			5.8	%	157,493			6.2	%
Subtotal	2,628,197			100.3	%	2,533,477			100.3	%
Less: Net unearned income	(6,985		)	(0.3	)%	(7,767		)	(0.3	)%
Total noncovered loans, net of unearned income	2,621,212			100.0	%	2,525,710			100.0	%
Less: Allowance for loan and lease losses	(51,119		)			(52,244		)
Noncovered loans, net	2,570,093					2,473,466
Covered loans, net of allowance of ($29,489) and ($30,056), respectively	363,213					391,337
Total loans, net	$	2,933,306				$	2,864,803
Loans held for sale	$	888				$	2,563

Total noncovered loans increased $95.5 million, or 4%, from year-end 2012. Growth was centered in the commercial business loan segment which increased $49.6 million. Growth in this segment was led by the healthcare industry. There was also strong broad based growth in the commercial and multifamily residential real estate loans. The growth in business and commercial real estate loans was partially offset by small reduction in consumer loans. The noncovered loan portfolio continues to be diversified, with the intent to mitigate risk by minimizing concentration in any one segment.

Commercial Loans: We are committed to providing competitive commercial lending in our primary market areas. Management expects a continued focus within its commercial lending products and to emphasize, in particular, relationship banking with businesses, and business owners.

Real Estate Loans: One-to-four family residential loans are secured by properties located within our primary market areas and, typically, have loan-to-value ratios of 80% or lower at origination. Our underwriting standards for commercial and multifamily residential loans generally require that the loan-to-value ratio for these loans not exceed 75% of appraised value, cost, or discounted cash flow value, as appropriate, and that commercial properties maintain debt coverage ratios (net operating income divided by annual debt servicing) of 1.2 or better. However, underwriting standards can be influenced by competition and other factors. We endeavor to maintain the highest practical underwriting standards while balancing the need to remain competitive in our lending practices.

42

Real Estate Construction Loans: We originate a variety of real estate construction loans. Underwriting guidelines for these loans vary by loan type but include loan-to-value limits, term limits and loan advance limits, as applicable. Our underwriting guidelines for commercial and multifamily residential real estate construction loans generally require that the loan-to-value ratio not exceed 75% and stabilized debt coverage ratios (net operating income divided by annual debt servicing) of 1.2 or better. As noted above, underwriting standards can be influenced by competition and other factors. However, we endeavor to maintain the highest practical underwriting standards while balancing the need to remain competitive in our lending practices.

Consumer Loans: Consumer loans include automobile loans, boat and recreational vehicle financing, home equity and home improvement loans and miscellaneous personal loans.

Foreign Loans: The Company has no material foreign activities. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington and Oregon.

Covered Loans: Covered loans are comprised of loans and loan commitments acquired in connection with the 2011 FDIC-assisted acquisitions of First Heritage Bank and Summit Bank, as well as the 2010 FDIC-assisted acquisitions of Columbia River Bank and American Marine Bank. These loans are generically referred to as covered because they are generally subject to one of the loss-sharing agreements between the Company and the FDIC. The loss-sharing agreements relating to the 2010 FDIC-assisted transactions limit the Company’s losses to 20% of the contractual balance outstanding up to a stated threshold amount of $206.0 million for Columbia River Bank and $66.0 million for American Marine Bank. If losses exceed the stated threshold, the Company’s share of the remaining losses decreases to 5%. The loss-sharing agreements relating to the 2011 FDIC-assisted transactions limit the Company's losses to 20% of the contractual balance outstanding. The loss-sharing provisions of the 2011 agreements for commercial and single family residential mortgage loans are in effect for five years and ten years, respectively, from the acquisition dates and the loss recovery provisions for such loans are in effect for eight years and ten years, respectively, from the acquisition dates.

The following table is a rollforward of acquired, impaired loans accounted for under ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality for the three months ended March 31, 2013 and 2012:

	Contractual			Nonaccretable			Accretable			Carrying
	Cash Flows			Difference			Yield			Amount
	(in thousands)
Balance at January 1, 2013	$	556,108		$	(37,371	)	$	(166,888	)	$	351,849
Principal reductions	(38,124		)	—			—			(38,124		)
Accretion of loan discount	—			—			14,477			14,477
Changes in contractual and expected cash flows due to remeasurement	(1,118		)	7,235			(7,149		)	(1,032		)
Reduction due to removals	(2,590		)	144			774			(1,672		)
Balance at March 31, 2013	$	514,276		$	(29,992	)	$	(158,786	)	$	325,498

	Contractual			Nonaccretable			Accretable			Carrying
	Cash Flows			Difference			Yield			Amount
	(in thousands)
Balance at January 1, 2012	$	835,556		$	(91,317	)	$	(259,669	)	$	484,570
Principal reductions	(37,273		)	—			—			(37,273		)
Accretion of loan discount	—			—			27,658			27,658
Changes in contractual and expected cash flows due to remeasurement	(23,891		)	17,363			(9,465		)	(15,993		)
Reduction due to removals	(5,217		)	860			1,799			(2,558		)
Balance at March 31, 2012	$	769,175		$	(73,094	)	$	(239,677	)	$	456,404

For additional information on our loan portfolio, including amounts pledged as collateral on borrowings, see Note 4 and Note 7 to the Consolidated Financial Statements in "Item 1. Financial Statements (unaudited)" of this report.

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Nonperforming Assets

Nonperforming assets consist of: (i) nonaccrual loans; (ii) other real estate owned; and (iii) other personal property owned.

Nonaccrual noncovered loans: The consolidated financial statements are prepared according to the accrual basis of accounting. This includes the recognition of interest income on the loan portfolio, unless a loan is placed on a nonaccrual basis, which occurs when there are serious doubts about the collectability of principal or interest. Generally our policy is to discontinue the accrual of interest on all loans past due 90 days or more and place them on nonaccrual status. When a noncovered loan is placed on nonaccrual status, any accrued but unpaid interest on that date is removed from interest income.

Covered loans: We consider covered loans to be performing due to the application of the yield accretion method under ASC Topic 310-30. Topic 310-30 allows us to aggregate credit-impaired loans acquired in the same fiscal quarter into one or more pools, provided the loans have common risk characteristics. A pool is then accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows. The covered loans acquired are and will continue to be subject to the Company’s internal and external credit review and monitoring. Any credit deterioration experienced subsequent to the initial acquisition will result in a provision for loan losses being charged to earnings. These provisions will be mostly offset by an increase to the FDIC loss-sharing asset and will be recognized in noninterest income.

The following table set forth, at the dates indicated, information with respect to our noncovered nonaccrual loans and total noncovered nonperforming assets:

	March 31, 2013		December 31, 2012
	(in thousands)
Nonperforming assets, excluding covered assets
Nonaccrual loans:
Commercial business	$	9,504	$	9,299
Real estate:
One-to-four family residential	1,684		2,349
Commercial and multifamily residential	17,402		19,204
Total real estate	19,086		21,553
Real estate construction:
One-to-four family residential	3,034		4,900
Total real estate construction	3,034		4,900
Consumer	1,262		1,643
Total nonaccrual loans	32,886		37,395
Noncovered other real estate owned and other personal property owned	12,000		11,108
Total nonperforming noncovered assets	$	44,886	$	48,503
Total assets	$	4,905,011	$	4,906,335
Covered assets, net	377,024		407,648
Noncovered assets	4,527,987		4,498,687

At March 31, 2013, nonperforming noncovered assets were $44.9 million, compared to $48.5 million at December 31, 2012. The percent of nonperforming, noncovered assets to period-end noncovered assets at March 31, 2013 was 0.99% compared to 1.08% for December 31, 2012. Nonperforming noncovered assets decreased $3.6 million during the three months ended March 31, 2013 as a result of $3.6 million in loan payments, $2.1 million in loans returning to accrual status, $1.8 million in OREO and OPPO sales, $1.1 million in loan chargeoffs, partially offset by $5.0 million in new nonaccrual loans.

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Other Real Estate Owned: During the three months ended March 31, 2013, noncovered OREO increased $1.2 million. The following table sets forth activity in noncovered OREO for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Noncovered OREO:
Balance, beginning of period	$	10,676		$	22,893
Transfers in, net of write-downs ($32 and $118, respectively)	2,709			3,803
OREO improvements	—			11
Additional OREO write-downs	(93		)	(1,722		)
Proceeds from sale of OREO property	(1,565		)	(7,829		)
Gain (loss) on sale of OREO, net	189			(412		)
Total noncovered OREO, end of period	$	11,916		$	16,744

Other Personal Property Owned: During the three months ended March 31, 2013, noncovered OPPO declined $348 thousand as a result of sales.

Allowance for Loan and Lease Losses

We maintain an allowance for loan and lease losses (“ALLL”) to absorb losses inherent in the loan portfolio. The size of the ALLL is determined through quarterly assessments of the probable estimated losses in the loan portfolio. Our methodology for making such assessments and determining the adequacy of the ALLL includes the following key elements:

1. General valuation allowance consistent with the Contingencies topic of the FASB ASC.

2. Classified loss reserves on specific relationships. Specific allowances for identified problem loans are determined in accordance with the Receivables topic of the FASB ASC.

3. The unallocated allowance provides for other credit losses inherent in our loan portfolio that may not have been contemplated in the general and specific components of the allowance. This unallocated amount generally comprises less than 5% of the allowance. The unallocated amount is reviewed periodically based on trends in credit losses, the results of credit reviews and overall economic trends.

On a quarterly basis our Chief Credit Officer reviews with Executive Management and the Board of Directors the various additional factors that management considers when determining the adequacy of the ALLL, including economic and business condition reviews. Factors which influenced management’s judgment in determining the amount of the additions to the ALLL charged to operating expense include the following as of the applicable balance sheet dates:

• Existing general economic and business conditions affecting our market place

• Credit quality trends

• Historical loss experience

• Seasoning of the loan portfolio

• Bank regulatory examination results

• Findings of internal credit examiners

• Duration of current business cycle

• Specific loss estimates for problem loans

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The ALLL is increased by provisions for loan and lease losses (“provision”) charged to expense, and is reduced by loans charged off, net of recoveries and recapture of previous provision. While we believe the best information available is used by us to determine the ALLL, changes in market conditions could result in adjustments to the ALLL, affecting net income, if circumstances differ from the assumptions used in determining the ALLL.

In addition to the ALLL, we maintain an allowance for unfunded commitments and letters of credit. We report this allowance as a liability on our Consolidated Balance Sheet. We determine this amount using estimates of the probability of the ultimate funding and losses related to those credit exposures. This methodology is similar to the methodology we use for determining the adequacy of our ALLL. For additional information on our allowance for unfunded commitments and letters of credit, see Note 5 to the Consolidated Financial Statements presented elsewhere in this report.

At March 31, 2013, our allowance for loan and lease losses for noncovered loans was $51.1 million, or 1.95% of total noncovered loans (excluding loans held for sale) and 155% of nonperforming, noncovered loans. This compares with an allowance of $52.2 million, or 2.07% of total noncovered loans (excluding loans held for sale), and 140% of nonperforming, noncovered loans at December 31, 2012.

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

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Beginning balance	$	52,244		$	53,041
Charge-offs:
Commercial business	(1,314		)	(2,359		)
One-to-four family residential	(116		)	(116		)
Commercial and multifamily residential	(783		)	(2,678		)
One-to-four family residential construction	(133		)	(204		)
Consumer	(171		)	(1,093		)
Total charge-offs	(2,517		)	(6,450		)
Recoveries
Commercial business	113			658
One-to-four family residential	—			43
Commercial and multifamily residential	93			71
One-to-four family residential construction	2,139			47
Consumer	47			373
Total recoveries	2,392			1,192
Net charge-offs	(125		)	(5,258		)
Provision (recapture) for loan and lease losses	(1,000		)	4,500
Ending balance	$	51,119		$	52,283
Total noncovered loans, net at end of period, excluding loans held of sale	$	2,621,212		$	2,371,818
Allowance for loan and lease losses to period-end noncovered loans	1.95		%	2.20		%
Allowance for unfunded commitments and letters of credit
Beginning balance	$	1,915		$	1,535
Net changes in the allowance for unfunded commitments and letters of credit	—			130
Ending balance	$	1,915		$	1,665

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FDIC Loss-sharing Asset

The Company has elected to account for amounts receivable under loss-sharing agreements with the FDIC as an indemnification asset in accordance with the Business Combinations topic of the FASB ASC. The FDIC indemnification asset is initially recorded at fair value, based on the discounted expected future cash flows under the loss-sharing agreements.

Subsequent to initial recognition, the FDIC indemnification asset is reviewed quarterly and adjusted for any changes in expected cash flows. These adjustments are measured on the same basis as the related covered loans. Any decrease in expected cash flows from the covered assets due to an increase in expected credit losses will increase the FDIC indemnification asset and any increase in expected future cash flows from the covered assets due to a decrease in expected credit losses will decrease the FDIC indemnification asset. Increases and decreases to the FDIC loss-sharing asset are recorded as adjustments to noninterest income.

At March 31, 2013, the FDIC loss-sharing asset was $83.1 million which was comprised of a $75.5 million FDIC indemnification asset and a $7.6 million FDIC receivable. The FDIC receivable represents the amounts due from the FDIC for claims related to covered losses the Company has incurred net of amounts due to the FDIC relating to shared recoveries.

The following table summarizes the activity related to the FDIC loss-sharing asset for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Balance at beginning of period	$	96,354		$	175,071
Adjustments not reflected in income
Cash received from the FDIC	(3,119		)	(14,804		)
FDIC reimbursable losses, net	363			462
Adjustments reflected in income
Amortization, net	(9,779		)	(13,873		)
Loan impairment	784			12,548
Sale of other real estate	(1,346		)	(2,067		)
Write-downs of other real estate	52			1,629
Other	(194		)	95
Balance at end of period	$	83,115		$	159,061

For additional information on the FDIC loss-sharing asset, please see Note 7 to the Consolidated Financial Statements presented elsewhere in this report.

Liquidity and Sources of Funds

Our primary sources of funds are customer deposits. Additionally, we utilize advances from the FHLB of Seattle, the FRB of San Francisco, and wholesale repurchase agreements to supplement our funding needs. These funds, together with loan repayments, loan sales, retained earnings, equity and other borrowed funds are used to make loans, to acquire securities and other assets, and to fund continuing operations.

Deposit Activities

Our deposit products include a wide variety of transaction accounts, savings accounts and time deposit accounts. Core deposits (demand deposit, savings, money market accounts and certificates of deposit less than $100,000) were relatively unchanged since year-end 2012 while certificates of deposit greater than $100,000 decreased$8.4 million, or approximately 4%, to $204.5 million from year-end 2012.

47

We have established a branch system to serve our consumer and business depositors. In addition, management’s strategy for funding asset growth is to make use of brokered and other wholesale deposits on an as-needed basis. The Company also participates in the Certificate of Deposit Account Registry Service (CDARS^®) program. CDARS^® is a network that allows participating banks to offer extended FDIC deposit insurance coverage on certificates of deposit. Unlike traditional brokered deposits, the Company generally makes CDARS^® available only to existing customers who desire additional deposit insurance coverage rather than as a means of generating additional liquidity. At March 31, 2013 CDARS^® deposits and other brokered deposits were $45.4 million, or 1% of total deposits, compared to $26.7 million at year-end 2012. The brokered deposits have varied maturities.

The following table sets forth the Company’s deposit base by type of product for the dates indicated:

	March 31, 2013				December 31, 2012
	Balance		% of Total		Balance		% of Total
	(dollars in thousands)
Core deposits:
Demand and other non-interest bearing	$	1,274,330	31.5	%	$	1,321,171	32.7	%
Interest bearing demand	846,515		20.9	%	870,821		21.5	%
Money market	1,096,274		27.1	%	1,043,459		25.8	%
Savings	337,251		8.3	%	314,371		7.8	%
Certificates of deposit less than $100,000	242,204		6.0	%	252,544		6.2	%
Total core deposits	3,796,574		93.8	%	3,802,366		94.0	%
Certificates of deposit greater than $100,000	204,487		5.1	%	212,924		5.3	%
Certificates of deposit insured by CDARS®	26,093		0.6	%	26,720		0.7	%
Brokered money market accounts	19,330		0.5	%	—		—	%
Subtotal	4,046,484		100.0	%	4,042,010		100.0	%
Premium resulting from acquisition date fair value adjustment	55				75
Total deposits	$	4,046,539			$	4,042,085

Borrowings

We rely on FHLB advances and FRB borrowings as another source of both short and long-term funding. FHLB advances and FRB borrowings are secured by bonds within our investment portfolio, residential, commercial and commercial real estate loans. At March 31, 2013 and December 31, 2012, we had FHLB advances of $6.0 million, before acquisition date fair value adjustments.

We also utilize wholesale repurchase agreements as a supplement to our funding sources. Our wholesale repurchase agreements are secured by mortgage-backed securities. At March 31, 2013 and December 31, 2012 we had repurchase agreements of $25.0 million, which mature in 2018. Management anticipates we will continue to rely on FHLB advances, FRB borrowings, and wholesale repurchase agreements in the future and we will use those funds primarily to make loans and purchase securities.

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Contractual Obligations & Commitments

We are party to many contractual financial obligations, including repayment of borrowings, operating and equipment lease payments, commitments to extend credit and investments in affordable housing partnerships. At March 31, 2013, we had commitments to extend credit of $924.4 million compared to $908.5 million at December 31, 2012.

Capital Resources

Shareholders’ equity at March 31, 2013 was $769.7 million, a slight increase from $764.0 million at December 31, 2012. Shareholders’ equity was 16% of total period-end assets at both March 31, 2013 and December 31, 2012.

Capital Ratios: Banking regulations require bank holding companies to maintain a minimum “leverage” ratio of core capital to adjusted quarterly average total assets of at least 3%. In addition, banking regulators have adopted risk-based capital guidelines, under which risk percentages are assigned to various categories of assets and off-balance sheet items to calculate a risk-adjusted capital ratio. Tier I capital generally consists of preferred stock, common shareholders’ equity, and trust preferred obligations, less goodwill and certain identifiable intangible assets, while Tier II capital includes the allowance for loan losses and subordinated debt, both subject to certain limitations. Regulatory minimum risk-based capital guidelines require Tier I capital of 4% of risk-adjusted assets and total capital (combined Tier I and Tier II) of 8% to be considered “adequately capitalized”.

Federal Deposit Insurance Corporation regulations set forth the qualifications necessary for a bank to be classified as “well capitalized”, primarily for assignment of FDIC insurance premium rates. To qualify as “well capitalized,” banks must have a Tier I risk-adjusted capital ratio of at least 6%, a total risk-adjusted capital ratio of at least 10%, and a leverage ratio of at least 5%. Failure to qualify as “well capitalized” can negatively impact a bank’s ability to expand and to engage in certain activities.

The Company and its subsidiary qualify as “well-capitalized” at March 31, 2013 and December 31, 2012.

	Company				Columbia Bank				Requirements
	March 31, 2013		December 31, 2012		March 31, 2013		December 31, 2012		Adequately capitalized		Well- Capitalized
Total risk-based capital ratio	20.29	%	20.62	%	17.64	%	17.87	%	8.00	%	10.00	%
Tier 1 risk-based capital ratio	19.02	%	19.35	%	16.38	%	16.60	%	4.00	%	6.00	%
Leverage ratio	13.19	%	12.78	%	11.44	%	11.07	%	4.00	%	5.00	%

Stock Repurchase Program

In 2011, the Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to 2 million shares of its outstanding shares of common stock. The Company intends to purchase the shares from time to time in the open market or in private transactions, under conditions which allow such repurchases to be accretive to earnings per share while maintaining capital ratios that exceed the guidelines for a well-capitalized financial institution. No shares were repurchased under the stock repurchase program during the first three months of 2013.

49

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A number of measures are used to monitor and manage interest rate risk, including income simulations and interest sensitivity (gap) analysis. An income simulation model is the primary tool used to assess the direction and magnitude of changes in net interest income resulting from changes in interest rates. Basic assumptions in the model include prepayment speeds on mortgage-related assets, cash flows and maturities of other investment securities, loan and deposit volumes and pricing. These assumptions are inherently subjective and, as a result, the model cannot precisely estimate net interest income or precisely predict the impact of higher or lower interest rates on net interest income. Actual results will differ from simulated results due to timing, magnitude and frequency of interest rate changes and changes in market conditions and management strategies, among other factors. At March 31, 2013, based on the measures used to monitor and manage interest rate risk, there has not been a material change in the Company’s interest rate risk since December 31, 2012. For additional information, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s 2012 Annual Report on Form 10-K.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934). Based on that evaluation, the CEO and CFO have concluded that as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that the information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 is (i) accumulated and communicated to our management (including the CEO and CFO) to allow timely decisions regarding required disclosure, and (ii) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Changes in Internal Controls Over Financial Reporting

There was no change in our internal controls over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

On June 24, 2009, West Coast Trust, which as a result of our recent acquisition of West Coast Bancorp (“West Coast”) is now a subsidiary of the Company, was served with an Objection to Personal Representative's Petition and Petition for Surcharge of Personal Representative in Linn County Circuit Court. The petition was filed by the beneficiaries of the estate of Archie Q. Adams, for which West Coast Trust acts as the personal representative. The petitioners allege a breach of fiduciary duty with respect to West Coast Trust's prior sale of real property owned by the Adams estate and sought relief in the form of a surcharge to West Coast Trust of $215.6 million, the amount of the alleged loss to the estate. West Coast Trust filed a motion to dismiss on July 2, 2009, which was granted in a letter ruling dated September 15, 2009. Petitioners appealed and briefs have been filed. Appeals Court oral arguments were heard in November, 2012, and the Company has not yet received the Appeals Court decision. The Company believes the appeal and underlying petition are without merit.

On October 3, 2012, a class action complaint was filed in the Circuit Court of the State of Oregon for the County of Multnomah against West Coast, its directors, and the Company challenging the merger: Gary M. Klein v. West Coast Bancorp, et al., Case No. 1210-12431. The complaint names as defendants West Coast, all of the current members of West Coast's board of directors, and the Company. The complaint alleges that the West Coast directors breached their fiduciary duties to West Coast and West Coast shareholders by agreeing to the proposed merger at an unfair price. The complaint also alleges that the proposed merger is being driven by an unfair process, that the directors approved provisions in the merger agreement that constitute preclusive deal protection devices, that certain large shareholders of West Coast are using the merger as an opportunity to sell their illiquid holdings in West Coast, and that West Coast directors and officers will obtain personal benefits from the merger not shared equally by other West Coast shareholders. The complaint further alleges that West Coast and the Company aided and abetted the directors' alleged breaches of their fiduciary duties. Thereafter, a second lawsuit challenging the merger was filed in the Circuit Court of the State of Oregon for Clackamas County: Leoni v. West Coast Bancorp et al., Case No. CV12100728. The parties have previously stipulated to the consolidation of the two lawsuits for all purposes in the Circuit Court of the State of Oregon for Multnomah County, and the Company and West Coast have consented to the filing of an unopposed motion to consolidate both lawsuits and extending the time for defendants to file a responsive pleading until July 5, 2013.

While West Coast believes that the claims in both complaints are without merit, West Coast agreed, in order to avoid the expense and burden of continued litigation and pursuant to the terms of the proposed settlement, to make certain supplemental disclosures in the joint proxy statement/prospectus related to the merger. Accordingly, prior to the closing of the merger on April 1, 2013, West Coast and the other defendants in the two actions entered into a memorandum of understanding to settle both actions. Subject to completion of certain confirmatory discovery by plaintiffs' counsel, the memorandum of understanding contemplates that the parties will enter into a stipulation of settlement. The stipulation of settlement will be subject to customary conditions, including court approval following notice to West Coast's stockholders. In the event that the parties enter into a stipulation of settlement, a hearing will be scheduled at which the Circuit Court of the State of Oregon for Multnomah County will consider the fairness, reasonableness, and adequacy of the settlement. If the settlement is finally approved by the court, it will resolve and release all claims in all actions that were or could have been brought challenging any aspect of the merger, the merger agreement, and any disclosure made in connection therewith, pursuant to terms that will be disclosed to stockholders before final approval of the settlement. There can be no assurance that the parties will ultimately enter into a stipulation of settlement or that the Circuit Court of the State of Oregon for Multnomah County will approve the settlement even if the parties were to enter into such stipulation. In such event, the proposed settlement as contemplated by the memorandum of understanding may be terminated.

51

Item 1A. RISK FACTORS

Refer to Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 for a discussion of risk factors relating to the Company’s business. The Company believes that there has been no material change in its risk factors as previously disclosed in the Company’s Form 10-K, except for the following additional risk factor.

Significant legal actions could subject us to substantial uninsured liabilities and reputational harm and have a material adverse effect on our business and results of operations.

We are from time to time subject to claims and proceedings related to our operations, which now include certain legal proceedings we assumed in connection with our recent acquisition of West Coast. Such claims and legal actions could involve large monetary claims, including civil money penalties or fines imposed by government authorities, and significant defense costs.  In that regard, we are currently involved in active assumed legal proceedings. If one or more of those legal proceedings is decided in a manner that is adverse to us it could have a material adverse effect on our business and/or results of operation.

To protect against financial exposure from such claims, we maintain insurance coverage in amounts and with deductibles that we believe are appropriate for our operations. However, our insurance coverage does not cover any civil money penalties or fines imposed by government authorities and may not cover all other claims that might be brought against us or continue to be available to us at a reasonable cost. As a result, we may be exposed to substantial uninsured liabilities, which could adversely affect our business, prospects, results of operations and financial condition. Substantial uninsured legal action against us could have material adverse financial effects or cause significant reputational harm to us, which in turn could harm our business prospects.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Not applicable

(b) Not applicable

(c) Not applicable

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

None.

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Item 6. EXHIBITS

3.1+	Amended and Restated Articles of Incorporation
31.1+	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2+	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32+	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*	The following financial information from Columbia Banking System, Inc’s. Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 is formatted in XBRL: (i) the Unaudited Consolidated Balance Sheets, (ii) the Unaudited Consolidated Statements of Income, (iii) the Unaudited Consolidated Statements of Comprehensive Income, (iv) the Unaudited Consolidated Statements of Changes in Shareholders' Equity, (v) the Unaudited Consolidated Statements of Cash Flows, and (vi) the Notes to Unaudited Consolidated Financial Statements.

+    Filed herewith

*    Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		COLUMBIA BANKING SYSTEM, INC.
Date:	May 6, 2013	By	/s/ MELANIE J. DRESSEL
			Melanie J. Dressel
			President and Chief Executive Officer (Principal Executive Officer)
Date:	May 6, 2013	By	/s/ CLINT E. STEIN
			Clint E. Stein
			Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

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INDEX TO EXHIBITS

3.1+	Amended and Restated Articles of Incorporation
31.1+	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2+	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32+	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*	The following financial information from Columbia Banking System, Inc.'s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 is formatted in XBRL: (i) the Unaudited Consolidated Balance Sheets, (ii) the Unaudited Consolidated Statements of Income, (iii) the Unaudited Consolidated Statements of Comprehensive Income, (iv) the Unaudited Consolidated Statements of Changes in Shareholders' Equity, (v) the Unaudited Consolidated Statements of Cash Flows, and (vi) the Notes to Unaudited Consolidated Financial Statements.

+    Filed herewith

*    Furnished herewith

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EX-3.1

AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
COLUMBIA BANKING SYSTEM, INC.

ARTICLE 1

Section 1.1 The name of the corporation shall be COLUMBIA BANKING SYSTEM, INC.

ARTICLE 2

Section 2.1 The corporation’s period of duration shall be perpetual.

ARTICLE 3

Section 3.1 The purpose for which the corporation is organized is the transaction of any and all lawful business for which corporations may be incorporated under the Washington Business Corporation Act.

ARTICLE 4

Section 4.1 The aggregate number of shares which the corporation shall have authority to issue is 63,032,681 common shares with no par value (hereinafter referred to as “the common stock”) and 2,000,000 preferred shares with no par value (hereinafter referred to as “the preferred stock”). The preferred stock is senior to the common stock, and the common stock is subject to the rights and preferences of the preferred stock as provided in the following section.

Section 4.2 The board of directors is hereby vested with authority to divide any or all of the preferred stock into one or more series and, within the limitations set forth in the Washington Business Corporation Act (as amended from time to time), to fix and determine or to amend the relative rights and preferences of the shares of any series so established.

Section 4.3 Fixed Rate Cumulative Perpetual Preferred Stock, Series A. There is hereby created out of the authorized and unissued shares of preferred stock of the corporation a series of preferred stock designated as the “Fixed Rate Cumulative Perpetual Preferred Stock, Series A” (the “Designated Preferred Stock”), which series shall have no par value per share and shall have such rights, voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations and restrictions thereof, of the shares of such series as set forth on the Certificate of Designations attached to these Articles of Incorporation and incorporated herein. The authorized number of shares of Designated Preferred Stock shall be 76,898.

Section 4.4Mandatorily Convertible Cumulative Participating Preferred Stock, Series B. There is hereby created out of the authorized and unissued shares of preferred stock of the corporation a series of preferred stock designated as the “Mandatorily Convertible Cumulative Participating Preferred Stock, Series B” (the “Series B Preferred Stock”), which series shall have no par value per share and shall have such rights, voting and other powers, preferences and relative, participating, optional or other rights, and the qualifications, limitations and restrictions thereof, of the shares of such series as set forth on the Certificate of Designations attached to these Articles of Incorporation and incorporated herein. The authorized number of shares of Series B Preferred Stock shall be 8,782.

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ARTICLE 5

Section 5.1 No shareholder shall have the preemptive right to acquire unissued shares of the corporation.

ARTICLE 6

Section 6.1 Each shareholder entitled to vote at any election for directors shall have the right to vote, in person or by proxy, the number of shares owned by him for as many persons as there are directors to be elected and for whose election he has a right to vote, and no shareholder shall be entitled to cumulate his votes.

ARTICLE 7

Section 7.1 The corporation reserves the right to amend, alter, change or repeal any provision of its Articles of Incorporation to the extent permitted by the laws of the State of Washington. All rights of shareholders are granted subject to this reservation.

ARTICLE 8

Section 8.1 The corporation may enter into a contract and otherwise transact business as vendor, purchaser, or otherwise, with its directors, officers and shareholders, and with corporations, associations, firms and entities in which they are or may become interested as directors, officers, shareholders, members or otherwise, as freely as though such adverse interest did not exist, even though the vote, action or presence of such director, officer or shareholder may be necessary to obligate the corporation upon such contract or transaction; and in the absence of fraud, no such contract or transaction shall be avoided and no such director, officer or shareholder shall be held liable to account to the corporation, by reason of such adverse interest or any fiduciary relationship to the corporation arising out of such office or stock ownership, for any profit or benefit realized by him through any such contract or transaction; provided that the nature of the interest of such director, officer or shareholder, though not necessarily the details or extent thereof, be disclosed or known to the board of directors or shareholders of the corporation, at the meeting thereof at which such contract or transaction is authorized or confirmed. A general notice that a director, officer or shareholder of the corporation is interested in any corporation, association, firm or entity shall be sufficient disclosure as to such director, officer or shareholder with respect to all contracts and transactions with that corporation, association, firm or entity.

ARTICLE 9

Section 9.1 In addition to the requirements of any applicable statute, and notwithstanding any other provisions of any other articles of these Articles of Incorporation, the affirmative vote of not less than 66 2/3% of the total shares attributable to persons other than a Control Person (as defined below), considered for the purposes of this Article 9 as one class, which are entitled to be voted in an election of directors shall be required for the approval of any Business Combination (as defined below) between the corporation and any Control Person.

Section 9.2 The approval requirements of Section 9.1 shall not apply if either:

(a)    The Business Combination is approved by at least a majority of Continuing Directors (as defined below) of the corporation; or

(b)    All the following conditions are satisfied:

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(i)    The cash or fair market value of the property, securities or other consideration to be received per share in the Business Combination by holders of the common stock of the corporation is not less than the higher of: (A) the highest price per share (including brokerage commissions, soliciting dealers, fees and dealer-management compensation) paid by such Control Person in acquiring any of its holdings of the corporation’s common stock; (B) the highest per share market price of the common stock during the three-month period immediately preceding the date of the proxy statement described in (iii) below; or (C) the per share value of the common stock at the end of the fiscal quarter immediately prior to the Business Combination, as determined by an appraisal prepared by persons, selected by the Continuing Directors, who are independent of the corporation and the Control Person, and who are experienced and expert in the area of corporate appraisal.

(ii)    After becoming a Control Person and prior to the consummation of such Business Combination (A) such Control Person shall not have acquired any newly issued shares of capital stock, directly or indirectly, from the corporation (except upon conversion of convertible securities acquired by it prior to becoming a Control Person or upon compliance with the provisions of this Article 9 or as a result of a pro rata stock dividend or stock split), and (B) such Control Person shall not have received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or tax credits provided by the corporation, or made any major changes in the corporation’s business or equity capital structure; and

(iii)    A proxy statement responsive to the requirements of the Securities Exchange Act of 1934, whether or not the corporation is then subject to such requirements, shall be mailed to the public stockholders of the corporation for the purpose of soliciting stockholder approval of such Business Combination.

Section 9.3 For the purpose of this Article 9

(a)    The term “Business Combination” shall mean (i) any merger or consolidation of the corporation with or into a Control Person, (ii) any sale, lease, exchange, transfer or other disposition, including without limitation a mortgage or any other security device, of all or any Substantial Part (as defined below) of the assets of the corporation (including without limitation any voting securities of a subsidiary) or of a subsidiary, to a Control Person, (iii) any merger or consolidation of a Control Person with or into the corporation or a subsidiary of the corporation, (iv) any sale, lease, exchange, transfer or other disposition of all or any Substantial Part of the assets of a Control Person to the corporation or a subsidiary of the corporation, (v) the issuance of any securities of the corporation or a subsidiary of the corporation to a Control Person, (vi) the acquisition by the corporation or a subsidiary of the corporation of any securities of a Control Person, (vii) any reclassification of common stock of the corporation, or any recapitalization involving common stock of the corporation, consummated within five years after a Control Person becomes a Control Person, or (viii) any agreement, contract or other arrangement providing for any of the transactions described in this definition of Business Combination;

(b)    The term “Continuing Director” shall mean (i) a director who was a member of the board of directors of the corporation immediately prior to the time that a Control Person became the beneficial owner (as this term is defined in Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934 on the date on which this amendment becomes effective) of 10% or more of the outstanding shares of common stock of the corporation or (ii) a person so designated before initially becoming a director by a majority of the then Continuing Directors.

(c)    The term “Control Person” shall mean and include any individual, corporation, partnership or other person or entity which, together with their Affiliates and Associates (as those terms are defined on the date on which this amendment becomes effective in Rule 12b-2 of the General Rules and Regulations

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under the Securities Exchange Act of 1934) is the beneficial owner in the aggregate of 20% or more of the outstanding shares of common stock of the corporation, and any Affiliate or Associate of any such individual, corporation, partnership or other person or entity;

(d)    The term “Substantial Part” shall mean more than 10% of the total assets of the corporation in question, as of the end of its most recent fiscal year prior to the time the determination is being made;

(e)    Without limitation, any shares of common stock of the corporation which any Control Person has the right to acquire at any time pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise, shall be deemed outstanding and beneficially owned by such Control Person for purposes of this Article 9; and

(f)    For the purposes of Section 9.2(b)(i) of this Article 9, the phrase “other consideration to be received” shall include, without limitation, common stock of the corporation retained by its existing public stockholders in the event of a Business Combination with such Control Person in which the corporation is the surviving corporation.

Section 9.4 For the purposes of this Article 9, a majority of the Continuing Directors shall have the power and duty to determine on the basis of information known to them (a) whether a proposed transaction is subject to the provisions of this Article 9, (b) the amount of shares of the corporation Beneficially Owned by any person, (c) whether a person is an Affiliate or Associate of another, and (d) such other matters as to which a determination may be required by the provisions of this Article 9.

Section 9.5 The provisions set forth in this Article 9 may not be repealed or amended in any respect or in any manner including any merger or consolidation of the corporation with any other corporation unless the surviving corporation’s Articles of Incorporation contain an article to the same effect as this Article 9, except by the affirmative vote of the holders of not less than 66 2/3% of the outstanding shares of common stock of the corporation, subject to the provisions of any series of preferred stock which may at the time be outstanding; provided, however, that if there is a Control Person such action must be approved by not less than 66 2/3% of the total shares entitled to be voted in an election of directors attributable to shares owned by person other than the Control Persons.

ARTICLE 10

Section 10.1 The board of directors of the corporation, when evaluating any offer of another party to (a) make a tender or exchange offer for any equity security of the corporation, (b) merge or consolidate the corporation with another corporation, or (c) purchase or otherwise acquire all or substantially all of the properties and assets of the corporation, shall, in connection with the exercise of its judgment in determining what is in the best interests of the corporation and its stockholders, give due consideration to all relevant factors, including without limitation the social and economic effects on the employees, customers, suppliers and other constituents of the corporation and its subsidiaries and on the communities in which the corporation and its subsidiaries operate or are located.

ARTICLE 11

Section 11.1 Defined Terms. As used in this Article 11:

(a)    “Egregious conduct” by a person shall mean acts or omissions that involve intentional misconduct or a knowing violation of law, conduct violating section 23B. of the Revised Code of Washington,

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or participation in any transaction from which the person will personally receive a benefit in money, property, or services to which the person is not legally entitled.

(b)    “Finally adjudged” shall mean stated in a judgment based upon clear and convincing evidence by a court having jurisdiction, from which there is no further right to appeal.

(c)    “Director” shall mean any person who is a director of the corporation and any person who, while a director of the corporation, is serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, or is a fiduciary or party in interest in relation to any employee benefit plan covering any employee of the corporation or of any employer in which it has an ownership interest; and “conduct as a director” shall include conduct while a director is acting in any of such capacities.

(d)    “Officer-director” shall mean any person who is simultaneously both an officer and director of the corporation and any person who, while simultaneously both an officer and director of the corporation, is serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise, or is a fiduciary or party in interest in relation to any employee benefit plan covering any employee of the corporation or of any employer in which it has an ownership interest; and “conduct as an officer-director” shall include conduct while an officer-director is acting as an officer of the corporation or in any of such other capacities.

(e)    “Subsidiary corporation” shall mean any corporation at least eighty percent of the voting stock of which is held beneficially by this corporation.

Section 11.2 - Liability of Directors. No director, officer-director, former director or former officer-director of the corporation shall be personally liable to the corporation or its shareholders for monetary damages for conduct as a director or officer-director occurring after the effective date of this Article 11 unless the conduct is finally adjudged to have been egregious conduct, as defined herein.

Section 11.3 - Liability of Subsidiary Directors. No director, officer-director, former director, or former officer-director of a subsidiary corporation shall be personally liable in any action brought directly by this corporation as a shareholder of the subsidiary corporation or derivatively on behalf of the subsidiary corporation (or by any shareholder of this corporation double-derivatively on behalf of this corporation and the subsidiary corporation) for monetary damages for conduct as a director or officer-director of such subsidiary corporation occurring after the effective date of this Article 11 unless the conduct is finally adjudged to have been egregious conduct, as defined herein.

Section 11.4 - Indemnification of Directors. The corporation shall indemnify any person who is, or is threatened to be made, a party to any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and whether by or in the right of the corporation or its shareholders or by any other party, by reason of the fact that the person is or was a director or officer-director of the corporation or of a subsidiary corporation against judgments, penalties or penalty taxes, fines, settlements (even if paid or payable to the corporation or its shareholders or to a subsidiary corporation) and reasonable expenses, including attorneys’ fees, actually incurred in connection with such proceeding unless the liability and expenses were on account of conduct finally adjudged to be egregious conduct, as defined herein. The reasonable expenses, including attorneys’ fees, of such person incurred in connection with such proceeding shall be paid or reimbursed by the corporation, upon request of such person, in advance of the final disposition of such proceeding upon receipt by the corporation of a written, unsecured promise by the person to repay such amount if it shall be finally adjudged that the person is not eligible for indemnification. All expenses incurred by such person in connection with such proceeding shall be considered reasonable unless finally adjudged to be unreasonable.

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Section 11.5 - Procedure. No action by the board of directors, the shareholders, independent counsel, or any other person or persons shall be necessary or appropriate to the determination of the corporation’s indemnification obligation in any specific case, to the determination of the reasonableness of any expenses incurred by a person entitled to indemnification under this Article 11, nor to the authorization of indemnification in any specific case.

Section 11.6 Internal Claims Expected. Notwithstanding section 11.4, the corporation shall not be obligated to indemnify any person for any expenses, including attorneys’ fees, incurred to assert any claim against the corporation (except a claim based on section 11.7) or any person related to or associated with it, including any person who would be entitled hereby to indemnification in connection with the claim.

Section 11.7 - Enforcement of Rights. The corporation shall indemnify any person granted indemnification rights under this Article 11 against any reasonable expenses incurred by the person to enforce such rights.

Section 11.8 - Set-off of Claims. Any person granted indemnification rights herein may directly assert such rights in set-off of any claim raised against the person by or in the right of the corporation and shall be entitled to have the same tribunal which adjudicates the corporation’s claim adjudicate the person’s entitlement to indemnification by the corporation.

Section 11.9 - Continuation of Rights. The indemnification rights provided in this Article 11 shall continue as to a person who has ceased to be a director or officer-director and shall inure to the benefit of the heirs, executors, and administrators of such person.

Section 11.10 - Effect of Amendment or Repeal. Any amendment or repeal of this Article 11 shall not adversely affect any right or protection of a director, officer-director, former director or former officer-director existing at the time of such amendment or repeal with respect to acts or omissions occurring prior to such amendment or repeal.

Section 11.11 - Severability of Provisions. Each of the substantive provisions of this Article 11 is separate and independent of the others, so that if any provision hereof shall be held to be invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect the validity or enforceability of the other provisions.

Composite copy, including all amendments through April 1, 2013.

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CERTIFICATE OF DESIGNATIONS
OF
FIXED RATE CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES A

* * *

Part 1.    Definitions. The following terms are used in this Certificate of Designations as defined below:

(a)    “Common Stock” means the common stock, no par value, of the Corporation.

(b)    “Dividend Payment Date” means February 15, May 15, August 15 and November 15 of each year.

(c)    “Junior Stock” means the Common Stock and any other class or series of stock of the Corporation the terms of which expressly provide that it ranks junior to Designated Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Corporation.

(d)    “Liquidation Amount” means $1,000 per share of Designated Preferred Stock.

(e)    “Minimum Amount” means $19,224,500.

(f)    “Parity Stock” means any class or series of stock of the Corporation (other than Designated Preferred Stock) the terms of which do not expressly provide that such class or series will rank senior or junior to Designated Preferred Stock as to dividend rights and/or as to rights on liquidation, dissolution or winding up of the Corporation (in each case without regard to whether dividends accrue cumulatively or non-cumulatively).

(g)    “Signing Date” means November 21, 2008.

Part. 2.    Certain Voting Matters. Holders of shares of Designated Preferred Stock will be entitled to one vote for each such share on any matter on which holders of Designated Preferred Stock are entitled to vote, including any action by written consent.

Part 3. Conflict. In the event of any conflict or inconsistency between the terms set forth in this Certificate of Designations and those set forth in the remainder of the Articles of Incorporation, the terms set forth in this Certificate of Designation shall govern.

* * *

Section 1.General Matters. Each share of Designated Preferred Stock shall be identical in all respects to every other share of Designated Preferred Stock. The Designated Preferred Stock shall be perpetual, subject to the provisions of Section 5 of these Standard Provisions that form a part of the Certificate of Designations. The Designated Preferred Stock shall rank equally with Parity Stock and shall rank senior to Junior Stock with respect to the payment of dividends and the distribution of assets in the event of any dissolution, liquidation or winding up of the Corporation.

Section 2.Standard Definitions. As used herein with respect to Designated Preferred Stock:

(a)“Applicable Dividend Rate” means (i) during the period from the Original Issue Date to, but excluding, the first day of the first Dividend Period commencing on or after the fifth anniversary of the Original Issue Date, 5% per annum and (ii) from and after the first day of the first Dividend Period commencing on or after the fifth anniversary of the Original Issue Date, 9% per annum.

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(b)“Appropriate Federal Banking Agency” means the “appropriate Federal banking agency” with respect to the Corporation as defined in Section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. Section 1813(q)), or any successor provision.

(c)“Business Combination” means a merger, consolidation, statutory share exchange or similar transaction that requires the approval of the Corporation’s stockholders.

(d)“Business Day” means any day except Saturday, Sunday and any day on which banking institutions in the State of New York generally are authorized or required by law or other governmental actions to close.

(e)“Bylaws” means the bylaws of the Corporation, as they may be amended from time to time.

(f)“Certificate of Designations” means the Certificate of Designations or comparable instrument relating to the Designated Preferred Stock, of which these Standard Provisions form a part, as it may be amended from time to time.

(g)“Charter” means the Corporation’s certificate or articles of incorporation, articles of association, or similar organizational document.

(h)“Dividend Period” has the meaning set forth in Section 3(a).

(i)“Dividend Record Date” has the meaning set forth in Section 3(a).

(j)“Liquidation Preference” has the meaning set forth in Section 4(a).

(k)“Original Issue Date” means the date on which shares of Designated Preferred Stock are first issued.

(l)“Preferred Director” has the meaning set forth in Section 7(b).

(m)“Preferred Stock” means any and all series of preferred stock of the Corporation, including the Designated Preferred Stock.

(n)“Qualified Equity Offering” means the sale and issuance for cash by the Corporation to persons other than the Corporation or any of its subsidiaries after the Original Issue Date of shares of perpetual Preferred Stock, Common Stock or any combination of such stock, that, in each case, qualify as and may be included in Tier 1 capital of the Corporation at the time of issuance under the applicable risk-based capital guidelines of the Corporation’s Appropriate Federal Banking Agency (other than any such sales and issuances made pursuant to agreements or arrangements entered into, or pursuant to financing plans which were publicly announced, on or prior to October 13, 2008).

(o)“Share Dilution Amount” has the meaning set forth in Section 3(b).

(p)“Standard Provisions” mean these Standard Provisions that form a part of the Certificate of Designations relating to the Designated Preferred Stock.

(q)“Successor Preferred Stock” has the meaning set forth in Section 5(a).

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(r)“Voting Parity Stock” means, with regard to any matter as to which the holders of Designated Preferred Stock are entitled to vote as specified in Sections 7(a) and 7(b) of these Standard Provisions that form a part of the Certificate of Designations, any and all series of Parity Stock upon which like voting rights have been conferred and are exercisable with respect to such matter.

Section 3.Dividends.

(a)Rate. Holders of Designated Preferred Stock shall be entitled to receive, on each share of Designated Preferred Stock if, as and when declared by the Board of Directors or any duly authorized committee of the Board of Directors, but only out of assets legally available therefor, cumulative cash dividends with respect to each Dividend Period (as defined below) at a rate per annum equal to the Applicable Dividend Rate on (i) the Liquidation Amount per share of Designated Preferred Stock and (ii) the amount of accrued and unpaid dividends for any prior Dividend Period on such share of Designated Preferred Stock, if any. Such dividends shall begin to accrue and be cumulative from the Original Issue Date, shall compound on each subsequent Dividend Payment Date (i.e., no dividends shall accrue on other dividends unless and until the first Dividend Payment Date for such other dividends has passed without such other dividends having been paid on such date) and shall be payable quarterly in arrears on each Dividend Payment Date, commencing with the first such Dividend Payment Date to occur at least 20 calendar days after the Original Issue Date. In the event that any Dividend Payment Date would otherwise fall on a day that is not a Business Day, the dividend payment due on that date will be postponed to the next day that is a Business Day and no additional dividends will accrue as a result of that postponement. The period from and including any Dividend Payment Date to, but excluding, the next Dividend Payment Date is a “Dividend Period”, provided that the initial Dividend Period shall be the period from and including the Original Issue Date to, but excluding, the next Dividend Payment Date.

Dividends that are payable on Designated Preferred Stock in respect of any Dividend Period shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of dividends payable on Designated Preferred Stock on any date prior to the end of a Dividend Period, and for the initial Dividend Period, shall be computed on the basis of a 360-day year consisting of twelve 30-day months, and actual days elapsed over a 30-day month.

Dividends that are payable on Designated Preferred Stock on any Dividend Payment Date will be payable to holders of record of Designated Preferred Stock as they appear on the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day immediately preceding such Dividend Payment Date or such other record date fixed by the Board of Directors or any duly authorized committee of the Board of Directors that is not more than 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Date shall be a Dividend Record Date whether or not such day is a Business Day.

Holders of Designated Preferred Stock shall not be entitled to any dividends, whether payable in cash, securities or other property, other than dividends (if any) declared and payable on Designated Preferred Stock as specified in this Section 3 (subject to the other provisions of the Certificate of Designations).

(b)Priority of Dividends. So long as any share of Designated Preferred Stock remains outstanding, no dividend or distribution shall be declared or paid on the Common Stock or any other shares of Junior Stock (other than dividends payable solely in shares of Common Stock) or Parity Stock, subject to the immediately following paragraph in the case of Parity Stock, and no Common Stock, Junior Stock or Parity Stock shall be, directly or indirectly, purchased, redeemed or otherwise acquired for consideration by the Corporation or any of its subsidiaries unless all accrued and unpaid dividends for all past Dividend

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Periods, including the latest completed Dividend Period (including, if applicable as provided in Section 3(a) above, dividends on such amount), on all outstanding shares of Designated Preferred Stock have been or are contemporaneously declared and paid in full (or have been declared and a sum sufficient for the payment thereof has been set aside for the benefit of the holders of shares of Designated Preferred Stock on the applicable record date). The foregoing limitation shall not apply to (i) redemptions, purchases or other acquisitions of shares of Common Stock or other Junior Stock in connection with the administration of any employee benefit plan in the ordinary course of business (including purchases to offset the Share Dilution Amount (as defined below) pursuant to a publicly announced repurchase plan) and consistent with past practice, provided that any purchases to offset the Share Dilution Amount shall in no event exceed the Share Dilution Amount; (ii) purchases or other acquisitions by a broker-dealer subsidiary of the Corporation solely for the purpose of market-making, stabilization or customer facilitation transactions in Junior Stock or Parity Stock in the ordinary course of its business; (iii) purchases by a broker-dealer subsidiary of the Corporation of capital stock of the Corporation for resale pursuant to an offering by the Corporation of such capital stock underwritten by such broker-dealer subsidiary; (iv) any dividends or distributions of rights or Junior Stock in connection with a stockholders’ rights plan or any redemption or repurchase of rights pursuant to any stockholders’ rights plan; (v) the acquisition by the Corporation or any of its subsidiaries of record ownership in Junior Stock or Parity Stock for the beneficial ownership of any other persons (other than the Corporation or any of its subsidiaries), including as trustees or custodians; and (vi) the exchange or conversion of Junior Stock for or into other Junior Stock or of Parity Stock for or into other Parity Stock (with the same or lesser aggregate liquidation amount) or Junior Stock, in each case, solely to the extent required pursuant to binding contractual agreements entered into prior to the Signing Date or any subsequent agreement for the accelerated exercise, settlement or exchange thereof for Common Stock. “Share Dilution Amount” means the increase in the number of diluted shares outstanding (determined in accordance with generally accepted accounting principles in the United States, and as measured from the date of the Corporation’s consolidated financial statements most recently filed with the Securities and Exchange Commission prior to the Original Issue Date) resulting from the grant, vesting or exercise of equity-based compensation to employees and equitably adjusted for any stock split, stock dividend, reverse stock split, reclassification or similar transaction.

When dividends are not paid (or declared and a sum sufficient for payment thereof set aside for the benefit of the holders thereof on the applicable record date) on any Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within a Dividend Period related to such Dividend Payment Date) in full upon Designated Preferred Stock and any shares of Parity Stock, all dividends declared on Designated Preferred Stock and all such Parity Stock and payable on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared pro rata so that the respective amounts of such dividends declared shall bear the same ratio to each other as all accrued and unpaid dividends per share on the shares of Designated Preferred Stock (including, if applicable as provided in Section 3(a) above, dividends on such amount) and all Parity Stock payable on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within the Dividend Period related to such Dividend Payment Date) (subject to their having been declared by the Board of Directors or a duly authorized committee of the Board of Directors out of legally available funds and including, in the case of Parity Stock that bears cumulative dividends, all accrued but unpaid dividends) bear to each other. If the Board of Directors or a duly authorized committee of the Board of Directors determines not to pay any dividend or a full dividend on a Dividend Payment Date, the Corporation will provide written notice to the holders of Designated Preferred Stock prior to such Dividend Payment Date.

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Subject to the foregoing, and not otherwise, such dividends (payable in cash, securities or other property) as may be determined by the Board of Directors or any duly authorized committee of the Board of Directors may be declared and paid on any securities, including Common Stock and other Junior Stock, from time to time out of any funds legally available for such payment, and holders of Designated Preferred Stock shall not be entitled to participate in any such dividends.

Section 4.Liquidation Rights.

(a)Voluntary or Involuntary Liquidation. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, holders of Designated Preferred Stock shall be entitled to receive for each share of Designated Preferred Stock, out of the assets of the Corporation or proceeds thereof (whether capital or surplus) available for distribution to stockholders of the Corporation, subject to the rights of any creditors of the Corporation, before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other stock of the Corporation ranking junior to Designated Preferred Stock as to such distribution, payment in full in an amount equal to the sum of (i) the Liquidation Amount per share and (ii) the amount of any accrued and unpaid dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount), whether or not declared, to the date of payment (such amounts collectively, the “Liquidation Preference”).

(b)Partial Payment. If in any distribution described in Section 4(a) above the assets of the Corporation or proceeds thereof are not sufficient to pay in full the amounts payable with respect to all outstanding shares of Designated Preferred Stock and the corresponding amounts payable with respect of any other stock of the Corporation ranking equally with Designated Preferred Stock as to such distribution, holders of Designated Preferred Stock and the holders of such other stock shall share ratably in any such distribution in proportion to the full respective distributions to which they are entitled.

(c)Residual Distributions. If the Liquidation Preference has been paid in full to all holders of Designated Preferred Stock and the corresponding amounts payable with respect of any other stock of the Corporation ranking equally with Designated Preferred Stock as to such distribution has been paid in full, the holders of other stock of the Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.

(d)Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 4, the merger or consolidation of the Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Designated Preferred Stock receive cash, securities or other property for their shares, or the sale, lease or exchange (for cash, securities or other property) of all or substantially all of the assets of the Corporation, shall not constitute a liquidation, dissolution or winding up of the Corporation.

Section 5.Redemption.

(a)Optional Redemption. Except as provided below, the Designated Preferred Stock may not be redeemed prior to the first Dividend Payment Date falling on or after the third anniversary of the Original Issue Date. On or after the first Dividend Payment Date falling on or after the third anniversary of the Original Issue Date, the Corporation, at its option, subject to the approval of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time and from time to time, out of funds legally available therefor, the shares of Designated Preferred Stock at the time outstanding, upon notice given as provided in Section 5(c) below, at a redemption price equal to the sum of (i) the Liquidation Amount per share and (ii) except as otherwise provided below, any accrued and unpaid dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount) (regardless of whether any dividends are actually declared) to, but excluding, the date fixed for redemption.

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Notwithstanding the foregoing, prior to the first Dividend Payment Date falling on or after the third anniversary of the Original Issue Date, the Corporation, at its option, subject to the approval of the Appropriate Federal Banking Agency, may redeem, in whole or in part, at any time and from time to time, the shares of Designated Preferred Stock at the time outstanding, upon notice given as provided in Section 5(c) below, at a redemption price equal to the sum of (i) the Liquidation Amount per share and (ii) except as otherwise provided below, any accrued and unpaid dividends (including, if applicable as provided in Section 3(a) above, dividends on such amount) (regardless of whether any dividends are actually declared) to, but excluding, the date fixed for redemption; provided that (x) the Corporation (or any successor by Business Combination) has received aggregate gross proceeds of not less than the Minimum Amount (plus the “Minimum Amount” as defined in the relevant certificate of designations for each other outstanding series of preferred stock of such successor that was originally issued to the United States Department of the Treasury (the “Successor Preferred Stock”) in connection with the Troubled Asset Relief Program Capital Purchase Program) from one or more Qualified Equity Offerings (including Qualified Equity Offerings of such successor), and (y) the aggregate redemption price of the Designated Preferred Stock (and any Successor Preferred Stock) redeemed pursuant to this paragraph may not exceed the aggregate net cash proceeds received by the Corporation (or any successor by Business Combination) from such Qualified Equity Offerings (including Qualified Equity Offerings of such successor).

The redemption price for any shares of Designated Preferred Stock shall be payable on the redemption date to the holder of such shares against surrender of the certificate(s) evidencing such shares to the Corporation or its agent. Any declared but unpaid dividends payable on a redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares on such Dividend Record Date relating to the Dividend Payment Date as provided in Section 3 above.

(b)No Sinking Fund. The Designated Preferred Stock will not be subject to any mandatory redemption, sinking fund or other similar provisions. Holders of Designated Preferred Stock will have no right to require redemption or repurchase of any shares of Designated Preferred Stock.

(c)Notice of Redemption. Notice of every redemption of shares of Designated Preferred Stock shall be given by first class mail, postage prepaid, addressed to the holders of record of the shares to be redeemed at their respective last addresses appearing on the books of the Corporation. Such mailing shall be at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of Designated Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other shares of Designated Preferred Stock. Notwithstanding the foregoing, if shares of Designated Preferred Stock are issued in book-entry form through The Depository Trust Corporation or any other similar facility, notice of redemption may be given to the holders of Designated Preferred Stock at such time and in any manner permitted by such facility. Each notice of redemption given to a holder shall state: (1) the redemption date; (2) the number of shares of Designated Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the number of such shares to be redeemed from such holder; (3) the redemption price; and (4) the place or places where certificates for such shares are to be surrendered for payment of the redemption price.

(d)Partial Redemption. In case of any redemption of part of the shares of Designated Preferred Stock at the time outstanding, the shares to be redeemed shall be selected either pro rata or in such other manner as the Board of Directors or a duly authorized committee thereof may determine to be fair and equitable. Subject to the provisions hereof, the Board of Directors or a duly authorized committee thereof

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shall have full power and authority to prescribe the terms and conditions upon which shares of Designated Preferred Stock shall be redeemed from time to time. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.

(e)Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in the notice all funds necessary for the redemption have been deposited by the Corporation, in trust for the pro rata benefit of the holders of the shares called for redemption, with a bank or trust company doing business in the Borough of Manhattan, The City of New York, and having a capital and surplus of at least $500 million and selected by the Board of Directors, so as to be and continue to be available solely therefor, then, notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation, on and after the redemption date dividends shall cease to accrue on all shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption from such bank or trust company, without interest. Any funds unclaimed at the end of three years from the redemption date shall, to the extent permitted by law, be released to the Corporation, after which time the holders of the shares so called for redemption shall look only to the Corporation for payment of the redemption price of such shares.

(f)Status of Redeemed Shares. Shares of Designated Preferred Stock that are redeemed, repurchased or otherwise acquired by the Corporation shall revert to authorized but unissued shares of Preferred Stock (provided that any such cancelled shares of Designated Preferred Stock may be reissued only as shares of any series of Preferred Stock other than Designated Preferred Stock).

Section 6.Conversion. Holders of Designated Preferred Stock shares shall have no right to exchange or convert such shares into any other securities.

Section 7.Voting Rights.

(a)General. The holders of Designated Preferred Stock shall not have any voting rights except as set forth below or as otherwise from time to time required by law.

(b)Preferred Stock Directors. Whenever, at any time or times, dividends payable on the shares of Designated Preferred Stock have not been paid for an aggregate of six quarterly Dividend Periods or more, whether or not consecutive, the authorized number of directors of the Corporation shall automatically be increased by two and the holders of the Designated Preferred Stock shall have the right, with holders of shares of any one or more other classes or series of Voting Parity Stock outstanding at the time, voting together as a class, to elect two directors (hereinafter the “Preferred Directors” and each a “Preferred Director”) to fill such newly created directorships at the Corporation’s next annual meeting of stockholders (or at a special meeting called for that purpose prior to such next annual meeting) and at each subsequent annual meeting of stockholders until all accrued and unpaid dividends for all past Dividend Periods, including the latest completed Dividend Period (including, if applicable as provided in Section 3(a) above, dividends on such amount), on all outstanding shares of Designated Preferred Stock have been declared and paid in full at which time such right shall terminate with respect to the Designated Preferred Stock, except as herein or by law expressly provided, subject to revesting in the event of each and every subsequent default of the character above mentioned; provided that it shall be a qualification for election for any Preferred Director that the election of such Preferred Director shall not cause the Corporation to violate any corporate governance requirements of any securities exchange or other trading facility on which securities of the Corporation may then be listed or traded that listed or traded companies must have a majority of independent directors. Upon

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any termination of the right of the holders of shares of Designated Preferred Stock and Voting Parity Stock as a class to vote for directors as provided above, the Preferred Directors shall cease to be qualified as directors, the term of office of all Preferred Directors then in office shall terminate immediately and the authorized number of directors shall be reduced by the number of Preferred Directors elected pursuant hereto. Any Preferred Director may be removed at any time, with or without cause, and any vacancy created thereby may be filled, only by the affirmative vote of the holders a majority of the shares of Designated Preferred Stock at the time outstanding voting separately as a class together with the holders of shares of Voting Parity Stock, to the extent the voting rights of such holders described above are then exercisable. If the office of any Preferred Director becomes vacant for any reason other than removal from office as aforesaid, the remaining Preferred Director may choose a successor who shall hold office for the unexpired term in respect of which such vacancy occurred.

(c)Class Voting Rights as to Particular Matters. So long as any shares of Designated Preferred Stock are outstanding, in addition to any other vote or consent of stockholders required by law or by the Charter, the vote or consent of the holders of at least 66 2/3% of the shares of Designated Preferred Stock at the time outstanding, voting as a separate class, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:

(i)Authorization of Senior Stock. Any amendment or alteration of the Certificate of Designations for the Designated Preferred Stock or the Charter to authorize or create or increase the authorized amount of, or any issuance of, any shares of, or any securities convertible into or exchangeable or exercisable for shares of, any class or series of capital stock of the Corporation ranking senior to Designated Preferred Stock with respect to either or both the payment of dividends and/or the distribution of assets on any liquidation, dissolution or winding up of the Corporation;

(ii)Amendment of Designated Preferred Stock. Any amendment, alteration or repeal of any provision of the Certificate of Designations for the Designated Preferred Stock or the Charter (including, unless no vote on such merger or consolidation is required by Section 7(c)(iii) below, any amendment, alteration or repeal by means of a merger, consolidation or otherwise) so as to adversely affect the rights, preferences, privileges or voting powers of the Designated Preferred Stock; or

(iii)Share Exchanges, Reclassifications, Mergers and Consolidations. Any consummation of a binding share exchange or reclassification involving the Designated Preferred Stock, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in each case (x) the shares of Designated Preferred Stock remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, and (y) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers, and limitations and restrictions thereof, of Designated Preferred Stock immediately prior to such consummation, taken as a whole;

provided, however, that for all purposes of this Section 7(c), any increase in the amount of the authorized Preferred Stock, including any increase in the authorized amount of Designated Preferred Stock necessary to satisfy preemptive or similar rights granted by the Corporation to other persons prior to the Signing Date, or the creation and issuance, or an increase in the authorized or issued amount, whether pursuant to preemptive or similar rights or otherwise, of any other series of Preferred Stock, or any securities convertible into or

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exchangeable or exercisable for any other series of Preferred Stock, ranking equally with and/or junior to Designated Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and the distribution of assets upon liquidation, dissolution or winding up of the Corporation will not be deemed to adversely affect the rights, preferences, privileges or voting powers, and shall not require the affirmative vote or consent of, the holders of outstanding shares of the Designated Preferred Stock.

(d)Changes after Provision for Redemption. No vote or consent of the holders of Designated Preferred Stock shall be required pursuant to Section 7(c) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares of the Designated Preferred Stock shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been deposited in trust for such redemption, in each case pursuant to Section 5 above.

(e)Procedures for Voting and Consents. The rules and procedures for calling and conducting any meeting of the holders of Designated Preferred Stock (including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of written consents and any other aspect or matter with regard to such a meeting or such consents shall be governed by any rules of the Board of Directors or any duly authorized committee of the Board of Directors, in its discretion, may adopt from time to time, which rules and procedures shall conform to the requirements of the Charter, the Bylaws, and applicable law and the rules of any national securities exchange or other trading facility on which Designated Preferred Stock is listed or traded at the time.

Section 8.Record Holders. To the fullest extent permitted by applicable law, the Corporation and the transfer agent for Designated Preferred Stock may deem and treat the record holder of any share of Designated Preferred Stock as the true and lawful owner thereof for all purposes, and neither the Corporation nor such transfer agent shall be affected by any notice to the contrary.

Section 9.Notices. All notices or communications in respect of Designated Preferred Stock shall be sufficiently given if given in writing and delivered in person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Charter or Bylaws or by applicable law. Notwithstanding the foregoing, if shares of Designated Preferred Stock are issued in book-entry form through The Depository Trust Corporation or any similar facility, such notices may be given to the holders of Designated Preferred Stock in any manner permitted by such facility.

Section 10.No Preemptive Rights. No share of Designated Preferred Stock shall have any rights of preemption whatsoever as to any securities of the Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or options, may be designated, issued or granted.

Section 11.Replacement Certificates. The Corporation shall replace any mutilated certificate at the holder’s expense upon surrender of that certificate to the Corporation. The Corporation shall replace certificates that become destroyed, stolen or lost at the holder’s expense upon delivery to the Corporation of reasonably satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be reasonably required by the Corporation.

Section 12.Other Rights. The shares of Designated Preferred Stock shall not have any rights, preferences, privileges or voting powers or relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Charter or as provided by applicable law.

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CERTIFICATE OF DESIGNATIONS

OF

MANDATORILY CONVERTIBLE CUMULATIVE PARTICIPATING PREFERRED STOCK, SERIES B

Section 1. Definitions. Unless the context or use indicates another meaning or intent, the following terms shall have the following meanings, whether used in the singular or the plural:

(a) “382 Rights Plan” means a shareholder rights plan designed to preserve the utilization of tax benefits and assets and the associated declaration, issuance and exercise of related securities (including rights and shares of a new series of junior participating preferred stock).

(b) “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) when used with respect to any Person, means the possession, directly or indirectly, of the power to cause the direction of management or policies of such person, whether through the ownership of voting securities, by contract or otherwise.

(c) “Applicable Conversion Price” means the Conversion Price in effect at any given time.

(d) “Articles of Amendment” means this Articles of Amendment to designate the terms of Mandatorily Convertible Cumulative Participating Preferred Stock, Series B, of Columbia Banking System, Inc., dated March 29, 2013.

(e) “Articles of Incorporation” means the Amended and Restated Articles of Incorporation of the Corporation, as may be amended from time to time.

(f) “Base Price” means $10.00 divided by 1.1656.

(g) “Base Value” means 100.

(h) “Board of Directors” means the board of directors of the Corporation.

(i) “Business Day” means any day other than a Saturday, Sunday or any other day on which banks in the State of Washington are generally required or authorized by law to be closed.

(j) “Bylaws” means the Bylaws of the Corporation as may be amended from time to time.

(k) “Closing Price” of the Common Stock (or other relevant capital stock or equity interest) on any date of determination means the closing sale price or, if no closing sale price is reported, the last reported sale price of the shares of the Common Stock (or other relevant capital stock or equity interest) on the NASDAQ Stock Market on such date. If the Common Stock (or other relevant capital stock or equity interest) is not traded on the NASDAQ Stock Market on any date of determination, the Closing Price of the Common Stock (or other relevant capital stock or equity interest) on such date of determination means the closing sale price as reported in the composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock (or other relevant capital stock or equity interest) is so listed or quoted, or, if no closing sale price is reported, the last reported sale price on the principal U.S. national or regional securities exchange on which the Common Stock (or other relevant capital stock or equity interest) is so listed or quoted, or if the Common Stock (or other relevant capital stock or equity interest) is not so listed or quoted on a U.S. national or regional securities exchange, the last quoted bid price for the Common Stock (or other relevant capital stock or equity interest) in the over-the-counter market as reported by Pink Sheets LLC or similar organization, or, if that bid price is not available, the market price of the Common Stock (or other relevant capital stock or equity interest) on that date as determined by a nationally recognized independent investment banking firm retained by the Corporation for this purpose.

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For purposes of this Articles of Amendment, all references herein to the “Closing Price” and “last reported sale price” of the Common Stock (or other relevant capital stock or equity interest) on the NASDAQ Stock Market shall be such closing sale price and last reported sale price as reflected on the website of the NASDAQ Stock Market (http://www.nasdaq.com) and as reported by Bloomberg Professional Service; provided that in the event that there is a discrepancy between the closing sale price or last reported sale price as reflected on the website of the NASDAQ Stock Market and as reported by Bloomberg Professional Service, the closing sale price and last reported sale price on the website of the NASDAQ Stock Market shall govern. If a Reorganization Event has occurred and (1) the Exchange Property consists only of shares of common stock, the “Closing Price” shall be based on the closing sale price per share of such common stock; (2) the Exchange Property consists only of cash, the “Closing Price” shall be the cash amount paid per share; and (3) the Exchange Property consists of securities, cash and/or other property, the “Closing Price” shall be based on the sum, as applicable, of (x) the closing sale price of such common stock, (y) the cash amount paid per share and (z) the value (as determined by the Board of Directors, acting in good faith, from time to time) of any other securities or property paid to the holders of the Common Stock in connection with the Reorganization Event.

(l) “Common Stock” has the meaning set forth in Section 3.

(m) “Corporation” means Columbia Banking System, a Washington corporation.

(n) “Conversion Date” means a Mandatory Conversion Date or a Reorganization Conversion Date.

(o) “Conversion Price” means for each share of Series B Preferred Stock, the Base Price, subject to adjustment as set forth herein.

(p) “Current Market Price” means, on any date, the average of the daily Closing Price per share of the Common Stock or other securities on each of the ten (10) consecutive Trading Days preceding the earlier of the day before the date in question and the day before the Ex-Date with respect to the issuance or distribution giving rise to an adjustment to the Conversion Price pursuant to Section 10.

(q) “Dividend Payment Date” means March 15, June 15, September 15 and December 15 of each year.

(r) “Dividend Period” has the meaning set forth in Section 4(a).

(s) “Dividend Record Date” has the meaning set forth in Section 4(a).

(t) “Effective Date” means the date on which shares of the Series B Preferred Stock are first issued.

(u) “Exchange Property” has the meaning set forth in Section 11(a).

(v) “Exchange Ratio” has the meaning set forth in Section 1(f).

(w) “Ex-Date” when used with respect to any issuance or distribution, means the first date on which the Common Stock or other securities trade without the right to receive the issuance or distribution giving rise to an adjustment to the Conversion Price pursuant to Section 10.

(x) “Holder” means the Person in whose name the shares of the Series B Preferred Stock are registered, which may be treated by the Corporation as the absolute owner of the shares of Series B Preferred Stock for the purpose of making payment and settling conversions and for all other purposes.

(y) “Junior Securities” has the meaning set forth in Section 3.

(z) “Liquidation Preference” means, as to the Series B Preferred Stock, $100 per share (as adjusted for any split, subdivision, combination, consolidation, recapitalization or similar event with respect to the Series B Preferred Stock).

(aa) “Mandatory Conversion Date” means, with respect to shares of Series B Preferred Stock of any Holder, the date of the consummation of the transfer by such Holder of Series B Preferred Stock to third parties in a Widely Dispersed Offering; provided, however, that if a Mandatory Conversion Date would otherwise occur on or after an Ex-Date for an issuance or distribution that results in an adjustment of the Conversion Price

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pursuant to Section 10 and on or before the record date for such issuance or distribution, such Mandatory Conversion Date shall instead occur on the first calendar day after the record date for such issuance or distribution.

(bb) “Notice of Mandatory Conversion” has the meaning set forth in Section 9(a).

(cc) “Parity Securities” has the meaning set forth in Section 3.

(dd) “Person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.

(ee) “Preferred Stock” means any and all series of preferred stock of the Corporation, including the Series B Preferred Stock.

(ff) “Regulatory Approvals” means, as to any Holder, to the extent applicable and required to permit such Holder to convert such Holder’s shares of Series B Preferred Stock into Common Stock and to own such Common Stock without such Holder being in violation of applicable law, rule or regulation, receipt or making of approvals and authorizations of, filings and registrations with, notifications to, or determinations by any U.S. federal, state or foreign governmental authority or self-regulatory organization, including the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

(gg) “Reorganization Conversion Date” means, with respect to the shares of Series B Preferred Stock of any Holder, the date of the consummation of the Reorganization Event or, if later, and applicable to such Holder, the first date on which all Regulatory Approvals with respect to the conversion of such shares shall have been obtained or made by such Holder; provided, however, that if a Reorganization Conversion Date would otherwise occur on or after an Ex-Date for an issuance or distribution that results in an adjustment of the Conversion Price pursuant to Section 10 and on or before the record date for such issuance or distribution, such Reorganization Conversion Date shall instead occur on the first calendar day after the record date for such issuance or distribution.

(hh) “Reorganization Event” has the meaning set forth in Section 11(a).

(ii) “Series A Preferred Stock” means the Fixed Rate Cumulative Perpetual Preferred Stock, Series A, of the Corporation.

(jj) “Series B Preferred Stock” has the meaning set forth in Section 2.

(kk) “Trading Day” means a day on which the shares of Common Stock:

(i) are not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business; and

(ii) have traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Stock.

(kk) “Voting Securities” means, at any time, shares of any class of capital stock of the Corporation that are then entitled to vote generally in the election of directors.

(ll) “Widely Dispersed Offering” means (a) a widespread public distribution, including pursuant to Rule 144 under the Securities Act of 1933, as amended, (b) a transfer in which no transferee (or group of associated transferees) would receive more than 2% of any class of Voting Securities of the Corporation or (c) a transfer to a transferee that would control more than 50% of the Voting Securities of the Corporation without any transfer from the transferor.

Section 2. Designation and Number of Shares. There is hereby created out of the authorized and unissued shares of preferred stock of the Corporation a series of preferred stock designated as the “Mandatorily Convertible

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Cumulative Participating Preferred Stock, Series B” (the “Series B Preferred Stock”). The number of shares constituting such series shall be 8,782. The Series B Preferred Stock shall have no par value.

Section 3. Ranking. The Series B Preferred Stock will, with respect to dividend rights and rights on liquidation, winding-up and dissolution, rank (i) on a parity with Series A Preferred Stock and each other class or series of equity securities of the Corporation, if any, the terms of which do not expressly provide that such class or series will rank senior or junior to the Series B Preferred Stock as to dividend rights and rights on liquidation, winding-up and dissolution of the Corporation (collectively referred to as “Parity Securities”), and (ii) senior to the Corporation’s common stock, no par value (the “Common Stock”) and each other class or series of capital stock outstanding or established after the Effective Date by the Corporation the terms of which expressly provide that it ranks junior to the Series B Preferred Stock as to dividend rights and/or as to rights on liquidation, winding-up and dissolution of the Corporation (collectively referred to as “Junior Securities”). The Corporation has the right to authorize and/or issue additional shares or classes or series of Junior Securities or Parity Securities without the consent of the Holders.

Section 4. Dividends.

(a) From and after the Effective Date, Holders shall be entitled to receive, when, as and if declared by the Board of Directors, out of the funds legally available therefor, dividends in the amount determined as set forth in Section 4(b)(i), and no more. Except as otherwise provided herein, such dividends shall be payable quarterly in arrears (as provided below in this Section 4(a)), but only when, as and if declared by the Board of Directors, on a “Dividend Payment Date”, commencing on June 15, 2013; provided that if any such Dividend Payment Date would otherwise occur on a day that is not a Business Day, such Dividend Payment Date shall instead be (and any dividend payable on Series B Preferred Stock on such Dividend Payment Date shall instead be payable on) the immediately succeeding Business Day, unless such immediately succeeding Business Day falls in the next calendar month, in which case such Dividend Payment Date shall instead be (and any such dividend shall instead be payable on) the immediately preceding Business Day.

Dividends on Series B Preferred Stock shall accrue at any time that dividends on the Series B Preferred Stock are cumulative (whether or not in any dividend period or periods (each, a “Dividend Period”) there shall be funds of the Corporation legally available for the payment of such dividends and whether or not such dividends are authorized or declared) and accrued dividends shall accumulate to the extent not paid on the Dividend Payment Date first following the Dividend Period for which they accrue. As used herein, the term “accrued” with respect to dividends includes both accrued and accumulated dividends. Dividends that are payable on Series B Preferred Stock on any Dividend Payment Date will be payable to holders of record of Series B Preferred Stock as they appear on the stock register of the Corporation on the applicable record date, which shall be the 15th calendar day immediately preceding such Dividend Payment Date or such other record date fixed by the Board of Directors or any duly authorized committee of the Board of Directors that is not more than 60 nor less than 10 days prior to such Dividend Payment Date (each, a “Dividend Record Date”). Any such day that is a Dividend Record Date shall be a Dividend Record Date whether or not such day is a Business Day.

Each Dividend Period shall commence on and include a Dividend Payment Date (other than the initial Dividend Period, which shall commence on and include the date of original issue of the Series B Preferred Stock, provided that, for any share of Series B Preferred Stock issued after such original issue date, the initial Dividend Period for such shares may commence on and include such other date as the Board of Directors or a duly authorized committee of the Board of Directors shall determine and publicly disclose) and shall end on and include the calendar day preceding the next Dividend Payment Date. Dividends that are payable on Series B Preferred Stock in respect of any Dividend Period shall be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of dividends payable on Series B Preferred Stock on any date prior to the end of a Dividend Period, and for the initial Dividend Period, shall be computed on the basis of a 360-day year consisting of twelve 30-day months, and actual days elapsed over a 30-day month.

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(b) (i) Subject to Section 4(a), if the Board of Directors declares and pays a dividend or other distribution in respect of Common Stock (other than with respect to a 382 Rights Plan; provided that Holders of Series B Preferred Stock participate in such distribution under such 382 Rights Plan as if their shares of Series B Preferred Stock were converted into shares of Common Stock pursuant to Section 8 hereof), then the Board of Directors shall declare and pay to the Holders of the Series B Preferred Stock, on the same dates on which such dividend or other distribution is declared and paid on the Common Stock, a dividend or other distribution in an amount per share of Series B Preferred Stock equal to the product of (x) the per share dividend or other distribution declared and paid in respect of each share of Common Stock and (y) the number of shares of Common Stock into which such shares of Series B Preferred Stock is convertible as of the record date for such dividend or distribution.

(ii) Subject to Section 4(a), the dividend rate, and the rate at which dividends shall accrue, on each share of Series B Preferred Stock, for each Dividend Period, shall be at an annual rate equal to 15%, calculated with respect to the Base Value of a share of Series B Preferred Stock.

(c) Dividends in arrears on the Series B Preferred Stock in respect of a Dividend Period not declared for payment or to the extent not paid on the first Dividend Payment Date following the Dividend Period for which they accrue may be declared by the Board of Directors and paid on any date fixed by the Board of Directors, whether or not a Dividend Payment Date, to the holders of record of Series B Preferred Stock as they appear on the stock register of the Corporation on a record date selected by the Board of Directors, which shall (a) not precede the date the Board of Directors declares the dividend payable and (b) not be more than 60 days prior to the date the dividend is paid.

(d) So long as any share of Series B Preferred Stock remains outstanding, (1) no dividend or interest shall be declared and paid or set aside for payment and no distribution shall be declared and made or set aside for payment on any Junior Securities (other than a dividend payable solely in shares of Junior Securities) or trust preferred securities and (2) no shares of Junior Securities or trust preferred securities shall be purchased, redeemed or otherwise acquired by the Corporation, directly or indirectly. So long as any share of Series B Preferred Stock remains outstanding, the foregoing limitations shall not apply if full dividends on all outstanding shares of Series B Preferred Stock for the then-current dividend period have been paid in full or declared and a sum sufficient for the payment thereof set aside for all outstanding shares of Series B Preferred Stock. The foregoing limitations shall not apply (i) to redemptions, purchases or other acquisitions of shares of Junior Securities in connection with any benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors or consultants or in connection with a dividend reinvestment or shareholder stock purchase plan; (ii) to any declaration of a dividend in connection with any shareholders’ rights plan, or the issuance of rights, stock or other property under any shareholders’ rights plan, or the redemption or repurchase of rights pursuant thereto; and (iii) to conversions into or exchanges for other Junior Securities and cash solely in lieu of fractional shares of the Junior Securities.

(e) So long as any shares of Series B Preferred Stock remain outstanding, no dividends shall be declared or paid or set aside for payment on any Parity Securities for any period (other than with respect to a 382 Rights Plan) unless full dividends on all outstanding shares of Series B Preferred Stock for the then-current dividend period have been paid in full or declared and a sum sufficient for the payment thereof set aside for all outstanding shares of Series B Preferred Stock. To the extent the Corporation declares dividends on the Series B Preferred Stock and on any Parity Securities but does not make full payment of such declared dividends, the Corporation shall allocate the dividend payments on a pro rata basis among the holders of the shares of Series B Preferred Stock and the holders of any Parity Securities then outstanding. For purposes of calculating the pro rata allocation of partial dividend payments, the Corporation shall allocate those payments so that the respective amounts of those payments bear the same ratio to each other as all accrued and unpaid dividends per share on the Series B Preferred Stock and all Parity Securities bear to each other.

(f) At any time that dividends on the Series B Preferred Stock are not cumulative, and if a Conversion Date with respect to any share of Series B Preferred Stock is prior to the record date for the payment of any dividend

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on the Common Stock, the Holder of such share of Series B Preferred Stock will not have the right to receive any corresponding dividends on the Series B Preferred Stock. At any time that dividends on the Series B Preferred Stock are not cumulative, and if the Conversion Date with respect to any share of Series B Preferred Stock is after the Dividend Record Date for any declared dividend and prior to the payment date for that dividend, the Holder thereof shall receive that dividend on the relevant payment date if such Holder was the Holder of record on the Dividend Record Date for that dividend. Any accrued and unpaid cumulative dividends on the Series B Preferred Stock shall be payable in cash on the Conversion Date.

Section 5. Liquidation.

(a)In the event the Corporation voluntarily or involuntarily liquidates, dissolves or winds up, the Holders at the time shall be entitled to receive, for each share of the Series B Preferred Stock, the sum of (i) liquidating distributions in an amount equal to the Liquidation Preference, plus any accrued but unpaid dividends thereon to and including the date of such liquidation, out of assets legally available for distribution to the Corporation’s shareholders, before any distribution of assets is made to the holders of the Common Stock or any other Junior Securities and (ii) after all distributions have been made to Holders pursuant to clause (i) of this sentence, liquidating distributions, as determined by the Corporation (or the trustee or other Person or Persons administering its liquidation, dissolution or winding-up in accordance with applicable law) as of a date that is at least ten (10) Business Days before the first liquidating distribution is made on Series B Preferred Stock, that would be made on the number of shares of Common Stock equal to the Base Value divided by the Applicable Conversion Price as if all of the outstanding shares of Series B Preferred Stock had been converted into Common Stock on such date of determination, out of assets legally available for distribution to the Corporation’s shareholders, simultaneous with any distribution of assets made to the holders of the Common Stock. The Corporation shall notify each Holder of the amount it has calculated pursuant to this Section 5 by first-class mail, postage prepaid, addressed to the Holders at their respective last addresses appearing on the books of the Corporation. Such mailing shall be made not later than five Business Days before the first liquidating distribution is made on shares of Series B Preferred Stock.

(b) In the event the assets of the Corporation available for distribution to shareholders upon any liquidation, dissolution or winding-up of the affairs of the Corporation, whether voluntary or involuntary, shall be insufficient to pay in full the amounts payable with respect to all outstanding shares of the Series B Preferred Stock and the corresponding amounts payable on any Parity Securities, Holders and the holders of such Parity Securities shall share ratably in any distribution of assets of the Corporation in proportion to the full respective liquidating distributions to which they would otherwise be respectively entitled.

(c) For purposes of this Section 5, the Corporation’s consolidation or merger with or into any other entity, the consolidation or merger of any other entity with or into the Corporation, or the sale of all or substantially all of the Corporation’s property or business will not constitute a liquidation, dissolution or winding-up of the Corporation.

Section 6. Maturity. The Series B Preferred Stock shall be perpetual unless converted in accordance with this Articles of Amendment.

Section 7. Redemptions.

(a) Redemption. The shares of Series B Preferred Stock are not redeemable by the Corporation.

(b) No Sinking Fund. The Series B Preferred Stock will not be subject to any mandatory redemption, sinking fund or other similar provisions.

Section 8. Conversion.

(a) Effective as of the close of business on the Mandatory Conversion Date with respect to the shares of Series B Preferred Stock of a Holder, such Holder’s shares of Series B Preferred Stock shall automatically convert into shares of Common Stock as set forth below. The number of shares of Common Stock into which

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a share of Series B Preferred Stock shall be convertible shall be determined by dividing the Base Value by the Applicable Conversion Price (subject to the conversion procedures of Section 9 hereof), provided that cash will be paid in lieu of fractional shares in accordance with Section 13 hereof.

(b) Notwithstanding anything herein to the contrary, in no event shall a transferee of a Widely Disbursed Offering be entitled to receive shares of Common Stock upon any conversion of Series B Preferred Stock pursuant to this Section 8 or Section 11 to the extent (but only to the extent) that at such time the transferee Holder does not have any required Regulatory Approvals. If any delivery of shares of Common Stock owed to a transferee upon conversion of Series B Preferred Stock is not made, in whole or in part, as a result of the foregoing limitations, the Corporation’s obligation to make such delivery shall not be extinguished and the Corporation shall, at the option of the transferee Holder, deliver such shares as promptly as practicable after such converting Holder gives notice to the Corporation that the requirements of this Section 8(b) are met.

Section 9. Conversion Procedures.

(a) Each Holder shall promptly provide written notice to the Corporation of its intent to transfer its Series B Preferred Stock in a Widely Dispersed Offering and, promptly upon receipt of each required Regulatory Approval applicable to the transferee, such transferee shall provide written notice to the Corporation of such receipt. Upon occurrence of the Mandatory Conversion Date with respect to shares of any Holder, the Corporation shall provide notice of such conversion to such Holder (such notice a “Notice of Mandatory Conversion”). In addition to any information required by applicable law or regulation, the Notice of Mandatory Conversion with respect to such Holder shall state, as appropriate:

(i) the Mandatory Conversion Date applicable to such Holder;

(ii) the number of shares of Common Stock to be issued upon conversion of each share of Series B Preferred Stock held of record by such Holder and subject to such mandatory conversion; and

(iii) the place or places where certificates for shares of Series B Preferred Stock held of record by such Holder are to be surrendered for issuance of certificates representing shares of Common Stock.

(b) In the event that such Holder fails to surrender the required certificates for shares of Series B Preferred Stock held of record by such Holder within 30 days after delivery of the Mandatory Conversion Date, the Corporation shall, by written notice to such Holder, indicate which shares have been converted pursuant to Section 8.

(c) Effective immediately prior to the close of business on any Conversion Date with respect to any share of Series B Preferred Stock, dividends shall no longer be declared on any such converted share of Series B Preferred Stock and such share of Series B Preferred Stock shall cease to be outstanding, in each case, subject to the right of the Holder to receive any accrued and unpaid or declared and unpaid dividends on such share to the extent provided in Section 4(f) and any other payments to which such Holder is otherwise entitled pursuant to Section 8, Section 11 or Section 13 hereof, as applicable.

(d) No allowance or adjustment, except pursuant to Section 10, shall be made in respect of dividends payable to holders of the Common Stock of record as of any date prior to the close of business on any Conversion Date with respect to any share of Series B Preferred Stock. Prior to the close of business on the Conversion Date with respect to any share of Series B Preferred Stock, shares of Common Stock issuable upon conversion thereof, or other securities issuable upon conversion of, such share of Series B Preferred Stock shall not be deemed outstanding for any purpose, and the Holder thereof shall have no rights with respect to the Common Stock or other securities issuable upon conversion (including voting rights, rights to respond to tender offers for the Common Stock or other securities issuable upon conversion and rights to receive any dividends or other distributions on the Common Stock or other securities issuable upon conversion) by virtue of holding such share of Series B Preferred Stock.

(e) Shares of Series B Preferred Stock duly converted in accordance with Section 8 or Section 11 of this Articles of Amendment will resume the status of authorized and unissued preferred stock, undesignated as to series and available for future issuance. The Corporation may, from time to time, take such appropriate action as may be necessary to reduce the authorized number of shares of Series B Preferred Stock; provided, however,

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that the Corporation shall not take any such action if such action would reduce the authorized number of shares of Series B Preferred Stock below the sum of (i) the number of shares of Series B Preferred Stock then outstanding and (ii) the number of shares of Series B Preferred Stock issuable upon the exercise of any warrants then outstanding.

(f) The Person or Persons entitled to receive the Common Stock and/or cash, securities or other property issuable upon conversion of Series B Preferred Stock shall be treated for all purposes as the record holder(s) of such shares of Common Stock and/or securities as of the close of business on the applicable Conversion Date with respect thereto. In the event that a Holder shall not by written notice designate the name in which shares of Common Stock and/or cash, securities or other property (including payments of cash in lieu of fractional shares) to be issued or paid upon conversion of shares of Series B Preferred Stock should be registered or paid or the manner in which such shares should be delivered, the Corporation shall be entitled to register and deliver such shares, and make such payment, in the name of the Holder and in the manner shown on the records of the Corporation.

(g) On the Mandatory Conversion Date with respect to any share of Series B Preferred Stock, certificates representing shares of Common Stock shall be issued and delivered to the Holder thereof or such Holder’s designee upon presentation and surrender of the certificate evidencing the Series B Preferred Stock to the Corporation and, if required, the furnishing of appropriate endorsements and transfer documents and the payment of all transfer and similar taxes.

Section 10. Anti-Dilution Adjustments.

(a) The Conversion Price shall be subject to the following adjustments.

(i) Stock Dividends and Distributions. If the Corporation pays dividends or other distributions on the Common Stock in shares of Common Stock, then the Conversion Price in effect immediately prior to the Ex-Date for such dividend or distribution will be multiplied by the following fraction:

OS₀

OS1

Where,

OS0 =	the number of shares of Common Stock outstanding immediately prior to the Ex-Date for such dividend or distribution.
OS1 =	the sum of the number of shares of Common Stock outstanding immediately prior to the Ex-Date for such dividend or distribution plus the total number of shares of Common Stock constituting such dividend or distribution.

For the purposes of this clause (i), the number of shares of Common Stock at the time outstanding shall not include shares acquired by the Corporation. If any dividend or distribution described in this clause (i) is declared but not so paid or made, the Conversion Price shall be readjusted, effective as of the date the Board of Directors publicly announces its decision not to make such dividend or distribution, to such Conversion Price that would be in effect if such dividend or distribution had not been declared.

(ii) Subdivisions, Splits and Combination of the Common Stock. If the Corporation subdivides, splits or combines the shares of Common Stock, then the Conversion Price in effect immediately prior to the effective date of such share subdivision, split or combination will be multiplied by the following fraction:

OS₀

OS1

Where,

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OS0 =	the number of shares of Common Stock outstanding immediately prior to the effective date of such share subdivision, split or combination.
OS1 =	the number of shares of Common Stock outstanding immediately after the opening of business on the effective date of such share subdivision, split or combination.

For the purposes of this clause (ii), the number of shares of Common Stock at the time outstanding shall not include shares acquired by the Corporation. If any subdivision, split or combination described in this clause (ii) is announced but the outstanding shares of Common Stock are not subdivided, split or combined, the Conversion Price shall be readjusted, effective as of the date the Board of Directors publicly announces its decision not to subdivide, split or combine the outstanding shares of Common Stock, to such Conversion Price that would be in effect if such subdivision, split or combination had not been announced.

(iii) Issuance of Stock Purchase Rights. If the Corporation issues to all or substantially all holders of the shares of Common Stock rights or warrants (other than rights or warrants issued pursuant to a dividend reinvestment plan or share purchase plan or other similar plans) entitling them, for a period of up to 45 days from the date of issuance of such rights or warrants, to subscribe for or purchase the shares of Common Stock at less than the Current Market Price on the date fixed for the determination of shareholders entitled to receive such rights or warrants, then the Conversion Price in effect immediately prior to the Ex-Date for such distribution will be multiplied by the following fraction:

OS₀ + Y

OS₀ + X

Where,

OS0 =	the number of shares of Common Stock outstanding immediately prior to the Ex-Date for such distribution.
X =	the total number of shares of Common Stock issuable pursuant to such rights or warrants.
Y =	the number of shares of Common Stock equal to the aggregate price payable to exercise such rights or warrants divided by the Current Market Price on the date fixed for the determination of shareholders entitled to receive such rights or warrants.

For the purposes of this clause (iii), the number of shares of Common Stock at the time outstanding shall not include shares acquired by the Corporation. In the event that such rights or warrants described in this clause (iii) are not so issued, the Conversion Price shall be readjusted, effective as of the date the Board of Directors publicly announces its decision not to issue such rights or warrants, to the Conversion Price that would then be in effect if such issuance had not been declared. To the extent that such rights or warrants are not exercised prior to their expiration or shares of Common Stock are otherwise not delivered pursuant to such rights or warrants upon the exercise of such rights or warrants, the Conversion Price shall be readjusted to such Conversion Price that would then be in effect had the adjustment made upon the issuance of such rights or warrants been made on the basis of the delivery of only the number of shares of Common Stock actually delivered. In determining the aggregate offering price payable for such shares of Common Stock, there shall be taken into account any consideration received for such rights or warrants and the value of such consideration (if other than cash, to be determined by the Board of Directors).

(iv) Debt or Asset Distributions. If the Corporation distributes to all or substantially all holders of shares of Common Stock evidences of indebtedness, shares of capital stock, securities, cash or other assets (excluding any dividend or distribution referred to in clause (i) above, any rights or warrants referred to in clause (iii) above, any dividend or distribution paid exclusively in cash, any consideration payable in connection with a tender or

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exchange offer made by the Corporation or any of its subsidiaries, and any dividend of shares of capital stock of any class or series, or similar equity interests, of or relating to a subsidiary or other business unit in the case of certain spin-off transactions as described below), then the Conversion Price in effect immediately prior to the Ex-Date for such distribution will be multiplied by the following fraction:

SP₀ – FMV

SP₀

Where,

SP0 =

the Current Market Price per share of Common Stock on the Trading Day immediately preceding the Ex-Date.

FMV =

the fair market value of the portion of the distribution applicable to one share of Common Stock on such date as determined by the Board of Directors, provided that, if “FMV” as set forth above is equal to or greater than “SP0” as set forth above, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder shall receive on the date on which such distribution is made to holders of Common Stock, for each share of Preferred Stock, the amount of such distribution such Holder would have received had such holder owned a number of shares of Common Stock equal to the Base Value divided by the Applicable Conversion Price on the Ex-Date for such distribution.

In a “spin-off”, where the Corporation makes a distribution to all holders of shares of Common Stock consisting of capital stock of any class or series, or similar equity interests of, or relating to, a subsidiary or other business unit, the Conversion Price will be adjusted on the 15th Trading Day after the effective date of the distribution by multiplying such Conversion Price in effect immediately prior to such 15th Trading Day by the following fraction:

MP₀

MP₀ + MP_S

Where,

MP0 =

the average of the Closing Prices of the Common Stock over the first ten Trading Days commencing on and including the fifth Trading Day following the effective date of such distribution.

MPS =

the average of the Closing Prices of the capital stock or equity interests representing the portion of the distribution applicable to one share of Common Stock over the first ten Trading Days commencing on and including the fifth Trading Day following the effective date of such distribution, or, if not traded on a national or regional securities exchange or over-the-counter market, the fair market value of the capital stock or equity interests representing the portion of the distribution applicable to one share of Common Stock on such date as determined by the Board of Directors.

In the event that such distribution described in this clause (iv) is not so paid or made, the Conversion Price shall be readjusted, effective as of the date the Board of Directors publicly announces its decision not to pay or make such dividend or distribution, to the Conversion Price that would then be in effect if such dividend or distribution had not been declared.

(v) Cash Distributions. If the Corporation makes a distribution consisting exclusively of cash to all holders of the Common Stock, excluding (a) any cash dividend on the Common Stock to the extent a corresponding cash dividend is paid on the Series B Preferred Stock pursuant to Section 4(b), (b) any cash that is distributed in a Reorganization Event or as part of a “spin-off” referred to in clause (iv) above, (c) any dividend

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or distribution in connection with the Corporation’s liquidation, dissolution or winding-up, and (d) any consideration payable in connection with a tender or exchange offer made by the Corporation or any of its subsidiaries, then in each event, the Conversion Price in effect immediately prior to the Ex-Date for such distribution will be multiplied by the following fraction:

SP₀ – DIV

SP₀

Where,

SP0 =	the Closing Price per share of Common Stock on the Trading Day immediately preceding the Ex-Date.
DIV =	the amount per share of Common Stock of the cash distribution, as determined pursuant to the introduction to this paragraph (v).

In the event that any distribution described in this clause (v) is not so made, the Conversion Price shall be readjusted, effective as of the date the Board of Directors publicly announces its decision not to pay such distribution, to the Conversion Price which would then be in effect if such distribution had not been declared.

Notwithstanding the foregoing, if “DIV” as set forth above is equal to or greater than “SP₀” as set forth above, in lieu of the foregoing adjustment, adequate provision shall be made so that each Holder shall have the right to receive on the date on which the relevant cash dividend or distribution is distributed to holders of Common Stock, for each share of Preferred Stock, the amount of cash such Holder would have received had such Holder owned a number of shares of Common Stock equal to the Base Value divided by the Applicable Conversion Price on the Ex-Date for such distribution.

(vi) Self Tender Offers and Exchange Offers. If the Corporation or any of its subsidiaries successfully completes a tender or exchange offer for the Common Stock where the cash and the value of any other consideration included in the payment per share of the Common Stock exceeds the Closing Price per share of the Common Stock on the Trading Day immediately succeeding the expiration of the tender or exchange offer, then the Conversion Price in effect at the close of business on such immediately succeeding Trading Day will be multiplied by the following fraction:

OS₀ x SP₀

AC + (SP₀ x OS1)

Where,

SP0 =	the Closing Price per share of Common Stock on the Trading Day immediately succeeding the expiration of the tender or exchange offer.
OS0 =	the number of shares of Common Stock outstanding immediately prior to the expiration of the tender or exchange offer, including any shares validly tendered and not withdrawn.
OS1 =	the number of shares of Common Stock outstanding immediately after the expiration of the tender or exchange offer.
AC =	the aggregate cash and fair market value of the other consideration payable in the tender or exchange offer, as determined by the Board of Directors.

In the event that the Corporation, or one of its subsidiaries, is obligated to purchase shares of Common Stock pursuant to any such tender offer or exchange offer, but the Corporation, or such subsidiary, is permanently

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prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Conversion Price shall be readjusted to be such Conversion Price that would then be in effect if such tender offer or exchange offer had not been made.

(vii) Rights Plans. To the extent that the Corporation has a rights plan in effect with respect to the Common Stock on the Mandatory Conversion Date, upon conversion of any shares of the Series B Preferred Stock, Holders will receive, in addition to the shares of Common Stock, the rights under the rights plan, unless, prior to the Mandatory Conversion Date, the rights have separated from the shares of Common Stock, in which case the Conversion Price will be adjusted at the time of separation as if the Corporation had made a distribution to all holders of the Common Stock as described in clause (iv) above, subject to readjustment in the event of the expiration, termination or redemption of such rights.

(b) The Corporation may make such decreases in the Conversion Price, in addition to any other decreases required by this Section 10, if the Board of Directors deems it advisable to avoid or diminish any income tax to holders of the Common Stock resulting from any dividend or distribution of shares of Common Stock (or issuance of rights or warrants to acquire shares of Common Stock) or from any event treated as such for income tax purposes or for any other reason.

(c) (i) All adjustments to the Conversion Price shall be calculated to the nearest 1/10 of a cent. No adjustment in the Conversion Price shall be required if such adjustment would be less than $0.01; provided that any adjustments which by reason of this subparagraph are not required to be made shall be carried forward and taken into account in any subsequent adjustment; provided further that on the Mandatory Conversion Date adjustments to the Conversion Price will be made with respect to any such adjustment carried forward and which has not been taken into account before such date.

(ii) No adjustment to the Conversion Price shall be made if Holders may participate in the transaction that would otherwise give rise to an adjustment, as a result of holding the Series B Preferred Stock (including without limitation pursuant to Section 4(b) hereof), without having to convert the Series B Preferred Stock, as if they held the full number of shares of Common Stock into which a share of the Series B Preferred Stock may then be converted. No single event shall be subject to adjustment under more than one subsection of this Section 10 so as to result in duplication.

(iii) The Applicable Conversion Price shall not be adjusted:

(A) with respect to a 382 Rights Plan; provided that Holders of Series B Preferred Stock participate in such distribution under such 382 Rights Plan as if their shares of Series B Preferred Stock were converted into shares of Common Stock pursuant to Section 8 hereof;

(B) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Corporation’s securities and the investment of additional optional amounts in shares of Common Stock under any such plan;

(C) upon the issuance of any shares of Common Stock or rights or warrants to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Corporation or any of its subsidiaries;

(D) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security outstanding as of the date shares of the Series B Preferred Stock were first issued and not substantially amended thereafter;

(E) for a change in the par value or no par value of Common Stock; or

(F) for accrued and unpaid dividends on the Series B Preferred Stock.

(d) Whenever the Conversion Price is to be adjusted in accordance with Section 10(a) or Section 10(b), the Corporation shall: (i) compute the Conversion Price in accordance with Section 10(a) or Section 10(b), taking into account the one cent threshold set forth in Section 10(c) hereof; (ii) as soon as practicable following the occurrence of an event that requires an adjustment to the Conversion Price pursuant to Section 10(a) or Section 10(b), taking into account the one percent threshold set forth in Section 10(c) hereof (or if the Corporation is

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not aware of such occurrence, as soon as practicable after becoming so aware), provide, or cause to be provided, a written notice to the Holders of the occurrence of such event; and (iii) as soon as practicable following the determination of the revised Conversion Price in accordance with Section 10(a) or Section 10(b) hereof, provide, or cause to be provided, a written notice to the Holders setting forth in reasonable detail the method by which the adjustment to the Conversion Price was determined and setting forth the revised Conversion Price.

Section 11. Reorganization Events.

(a) In the event that, prior to the Mandatory Conversion Date with respect to the shares of Series B Preferred Stock of any Holder, there occurs:

(i) any consolidation, merger or other similar business combination of the Corporation with or into another Person, in each case pursuant to which the Common Stock will be converted into cash, securities or other property of the Corporation or another Person;

(ii) any sale, transfer, lease or conveyance to another Person of all or substantially all of the property and assets of the Corporation, in each case pursuant to which the Common Stock will be converted into cash, securities or other property of the Corporation or another Person;

(iii) any reclassification of the Common Stock into securities including securities other than the Common Stock; or

(iv) any statutory exchange of the outstanding shares of Common Stock for securities of another Person (other than in connection with a merger or acquisition);

(any such event specified in this Section 11(a), a “Reorganization Event”) then, subject to Section 8(b), each share of such Holder’s Series B Preferred Stock outstanding immediately prior to such Reorganization Event shall remain outstanding but each Holder shall have the right, at its option, subject to the terms and provisions of this Section 11, to convert any or all of such Holder’s shares of Series B Preferred Stock, effective as of the close of business on the Reorganization Conversion Date (with the term “Regulatory Approval” applied for such purpose, as applicable, to the surviving entity in such Reorganization Event and its securities included in the Exchange Property (as defined below)), into the type and amount of securities, cash and other property receivable in such Reorganization Event by the Holder (other than a counterparty to the Reorganization Event or an Affiliate of such counterparty) in respect of each such share of Series B Preferred Stock equal to the number of shares of Common Stock into which one share of Series B Preferred Stock would then be convertible assuming that a Mandatory Conversion Date in respect of such shares of Series B Preferred Stock had occurred (such securities, cash and other property, the “Exchange Property”).

(b) The conversion right of a Holder of Series B Preferred Stock pursuant to this Section 11 shall be exercised by the Holder by the surrender of the certificates representing the shares to be converted to the Corporation or to the transfer agent for the Corporation, accompanied by a notice of reorganization conversion, no later than the tenth day following the date of delivery to each Holder of a notice from the Corporation of the expected consummation or the consummation of a Reorganization Event.

(i) Immediately prior to the close of business on the Reorganization Conversion Date, each converting Holder of Series B Preferred Stock shall be deemed to be the Holder of record of the number of shares of Common Stock deemed to be issuable upon conversion of such Holder’s Series B Preferred Stock in accordance with clause (i) or (ii) of Section 11(a), notwithstanding that the share register of the Corporation shall then be closed or that certificates representing such Common Stock shall not then be actually delivered to such Person.

13

(ii) Upon notice from the Corporation, each Holder of Series B Preferred Stock so converted shall promptly surrender to the Corporation or its transfer agent certificates representing the shares so converted (if not previously delivered), duly endorsed in blank or accompanied by proper instruments of transfer.

(c) In the event that holders of the shares of Common Stock have the opportunity to elect the form of consideration to be received in connection with any Reorganization Event, the Holders shall be entitled to the same right of election as holders of the shares of Common Stock with respect to the form of consideration to be received pursuant to this Section 11.

(d) The above provisions of this Section 11 shall similarly apply to successive Reorganization Events and the provisions of Section 10 shall apply to any shares of capital stock of the Corporation (or any successor) received by the holders of the Common Stock in any such Reorganization Event.

(e) The Corporation (or any successor) shall, within seven days of the consummation of any Reorganization Event, provide written notice to the Holders of such consummation of such event and of the kind and amount of the cash, securities or other property that constitutes the Exchange Property. Failure to deliver such notice shall not affect the operation of this Section 11.

(f) The Corporation shall not enter into any agreement for a transaction constituting a Reorganization Event unless such agreement provides for or does not interfere with or prevent (as applicable) conversion of the Series B Preferred Stock into the Exchange Property in a manner that is consistent with and gives effect to this Section 11.

Section 12. Voting Rights.

(a) Holders will not have any voting rights, including the right to elect any directors, except (i) voting rights, if any, required by law, and (ii) voting rights, if any, described in this Section 12.

(b) So long as any shares of Series B Preferred Stock are outstanding, the vote or consent of the Holders of three-quarters of the shares of Series B Preferred Stock at the time outstanding voting as a single class with all other classes and series of Parity Securities having similar voting rights then outstanding, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, will be necessary for effecting or validating, whether or not such approval is required by Washington law:

(i) any amendment or alteration (including by means of a merger, consolidation or otherwise) of the Articles of Incorporation to authorize or create, or increase the authorized amount of, any shares of, or any securities convertible into shares of, any class or series of the Corporation’s capital stock ranking prior to the Series B Preferred Stock in the payment of dividends or in the distribution of assets on any liquidation, dissolution or winding-up of the Corporation;

(ii) any amendment, alteration or repeal (including by means of a merger, consolidation or otherwise) of any provision of the Articles of Incorporation (including this Articles of Amendment) or the Bylaws that would significantly and adversely alter or change the terms, rights, preferences or privileges of the Series B Preferred Stock; or

(iii) the consummation of a binding share exchange or reclassification involving the Series B Preferred Stock or a merger or consolidation of the Corporation with another entity;

provided, however, that a Holder will have no right to vote under this provision or under Washington law if such voting rights arise due to a Reorganization Event if (1) the Corporation shall have complied with Section 11(f) or (2) in each case (a) the Series B Preferred Stock remains outstanding or, in the case of any merger or consolidation with respect to which the Corporation is not the surviving or resulting entity, is converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, that is an entity organized and existing under the laws of the United States of America, any state thereof or the District of Columbia, and (b) such Series B Preferred Stock remaining outstanding or such preference securities, as the

14

case may be, have such rights (including, but not limited to, the right of conversion), preferences, privileges and voting powers that, taken as a whole, as are not materially less favorable to the Holders thereof than the rights, preferences, privileges and voting powers of the Series B Preferred Stock, taken as a whole, immediately prior to the Reorganization Event; provided further,that any increase in the amount of the authorized Preferred Stock or any securities convertible into Preferred Stock or the creation and issuance, or an increase in the authorized or issued amount, of any series of Preferred Stock or any securities convertible into preferred stock ranking equally with and/or junior to the Series B Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution of assets upon the Corporation’s liquidation, dissolution or winding-up will not, in and of itself, be deemed to affect the voting powers, preferences or special rights of the Series B Preferred Stock and, notwithstanding any provision of Washington law, Holders will have no right to vote solely by reason of such an increase, creation or issuance.

Each holder of Series B Preferred Stock will have one vote per share on any matter on which holders of Series B Preferred Stock are entitled to vote, including any action by written consent.

If an amendment, alteration, repeal, share exchange, reclassification, merger or consolidation described above would adversely affect one or more but not all series of Preferred Stock with like voting rights (including the Series B Preferred Stock for this purpose), then only the series affected and entitled to vote shall vote as a class in lieu of all such series of Preferred Stock.

(c) Notwithstanding the foregoing, Holders shall not have any voting rights if, at or prior to the effective time of the act with respect to which such vote would otherwise be required, all outstanding shares of Series B Preferred Stock shall have been converted into shares of Common Stock.

Section 13. Fractional Shares.

(a) No fractional shares of Common Stock will be issued as a result of any conversion of shares of Series B Preferred Stock.

(b) In lieu of any fractional share of Common Stock otherwise issuable in respect of any mandatory conversion pursuant to Section 8 hereof, the Corporation shall pay an amount in cash (computed to the nearest cent) equal to the same fraction of the Closing Price of the Common Stock determined as of the second Trading Day immediately preceding the Mandatory Conversion Date.

(c) If more than one share of the Series B Preferred Stock is surrendered for conversion at one time by or for the same Holder, the number of full shares of Common Stock issuable upon conversion thereof shall be computed on the basis of the aggregate number of shares of the Series B Preferred Stock so surrendered.

Section 14. Reservation of Common Stock.

(a) The Corporation shall at all times thereafter reserve and keep available out of its authorized and unissued Common Stock or shares acquired by the Corporation, solely for issuance upon the conversion of shares of Series B Preferred Stock as provided in this Articles of Amendment, free from any preemptive or other similar rights, such number of shares of Common Stock as shall from time to time be issuable upon the conversion of all the shares of Series B Preferred Stock then outstanding, assuming that the Applicable Conversion Price equaled the Base Price.

(b) Notwithstanding the foregoing, the Corporation shall be entitled to deliver upon conversion of shares of Series B Preferred Stock, as herein provided, shares of Common Stock acquired by the Corporation (in lieu of the issuance of authorized and unissued shares of Common Stock), so long as any such acquired shares are free and clear of all liens, charges, security interests or encumbrances (other than liens, charges, security interests and other encumbrances created by the Holders).

(c) All shares of Common Stock delivered upon conversion of the Series B Preferred Stock shall be duly authorized, validly issued, fully paid and non-assessable, free and clear of all liens, claims, security interests

15

and other encumbrances (other than liens, charges, security interests and other encumbrances created by the Holders).

(d) Prior to the delivery of any securities that the Corporation shall be obligated to deliver upon conversion of the Series B Preferred Stock, the Corporation shall use its reasonable best efforts to comply with all federal and state laws and regulations thereunder requiring the registration of such securities with, or any approval of or consent to the delivery thereof by, any governmental authority.

(e) The Corporation hereby covenants and agrees that, if at any time the Common Stock shall be listed on the NASDAQ Stock Market or any other national securities exchange or automated quotation system, the Corporation will, if permitted by the rules of such exchange or automated quotation system, list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, all the Common Stock issuable upon conversion of the Series B Preferred Stock.

Section 15. Replacement Certificates. The Corporation shall replace any mutilated certificate at the Holder’s expense upon surrender of that certificate to the Corporation. The Corporation shall replace certificates that become destroyed, stolen or lost at the Holder’s expense upon delivery to the Corporation of satisfactory evidence that the certificate has been destroyed, stolen or lost, together with any indemnity that may be required by the Corporation.

Section 16. Miscellaneous.

(a) All notices or communications in respect of Series B Preferred Stock shall be sufficiently given if given in writing and delivered in person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Certificate of Designations, in the Articles of Incorporation or Bylaws or by applicable law. Notwithstanding the foregoing, if shares of Series B Preferred Stock are issued in book-entry form through The Depository Trust Corporation or any similar facility, such notices may be given to the holders of Series B Preferred Stock in any manner permitted by such facility.

(b) The Corporation shall pay any and all stock transfer and documentary stamp taxes that may be payable in respect of any issuance or delivery of shares of Series B Preferred Stock or shares of Common Stock or other securities issued on account of Series B Preferred Stock pursuant hereto or certificates representing such shares or securities. The Corporation shall not, however, be required to pay any such tax that may be payable in respect of any transfer involved in the issuance or delivery of shares of Series B Preferred Stock or Common Stock or other securities in a name other than that in which the shares of Series B Preferred Stock with respect to which such shares or other securities are issued or delivered were registered, or in respect of any payment to any Person other than a payment to the registered holder thereof, and shall not be required to make any such issuance, delivery or payment unless and until the Person otherwise entitled to such issuance, delivery or payment has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid or is not payable.

(c) No share of Series B Preferred Stock shall have any rights of preemption whatsoever as to any securities of the Corporation, or any warrants, rights or options issued or granted with respect thereto, regardless of how such securities, or such warrants, rights or options, may be designated, issued or granted.

(d) The shares of Series B Preferred Stock shall not have any voting powers, preferences or relative, participating, optional or other special rights, or qualifications, limitations or restrictions thereof, other than as set forth herein or in the Articles of Incorporation or as provided by applicable law.

16

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Melanie J. Dressel, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Columbia Banking System, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ MELANIE J. DRESSEL

Melanie J. Dressel
President and Chief Executive Officer

Date: May 6, 2013

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Clint E. Stein, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Columbia Banking System, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ CLINT E. STEIN

Clint E. Stein
Executive Vice President and
Chief Financial Officer

Date: May 6, 2013

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Columbia Banking System, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Melanie J. Dressel, President and Chief Executive Officer, and Clint E. Stein, Executive Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ MELANIE J. DRESSEL

Melanie J. Dressel

President and Chief Executive Officer

Columbia Banking System, Inc.

/s/ CLINT E. STEIN

Clint E. Stein

Executive Vice President and

Chief Financial Officer

Columbia Banking System, Inc.

Dated: May 6, 2013

XML

Noncovered Loans (Analysis of Loan Portfolio by Major Types of Loans) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Deferred Income	$ 6,985	$ 7,767
Loans, net	2,933,306	2,864,803
Loans held for sale	888	2,563
Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Deferred Income	6,985	7,767
Recorded Investment	2,621,212	2,525,710
Allowance for loan losses	51,119	52,244	52,283	53,041
Loans, net	2,570,093	2,473,466
Loans held for sale	888	2,563
Commercial Portfolio Segment [Member] | Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Gross, Commercial and Industrial	1,204,760	1,155,158
Real Estate Portfolio Segment [Member] | Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable Real Estate Mortgage	1,150,591	1,105,123
Real Estate Construction Portfolio Segment [Member] | Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable Real Estate Construction	120,159	115,703
Consumer Portfolio Segment [Member] | Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Consumer	152,687	157,493
Allowance for loan losses	2,364	2,437	2,129	2,719
One-to-Four Family Residential [Member] | Real Estate Portfolio Segment [Member] | Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Consumer, Mortgage	43,604	43,922
Allowance for loan losses	657	694	689	654
One-to-Four Family Residential [Member] | Real Estate Construction Portfolio Segment [Member] | Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Consumer, Construction	52,946	50,602
Commercial and Multifamily Residential [Member] | Real Estate Portfolio Segment [Member] | Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Gross, Commercial, Mortgage	1,106,987	1,061,201
Commercial and Multifamily Residential [Member] | Real Estate Construction Portfolio Segment [Member] | Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Gross, Commercial, Construction	$ 67,213	$ 65,101

XML

Covered Assets and FDIC Loss-sharing Asset (FDIC Loss-sharing Asset) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Covered Assets And FDIC Loss Sharing Asset
Balance at beginning of period	$ 96,354	$ 175,071
Cash received from the FDIC	(3,119)	(14,804)
FDIC reimbursable losses, net	363	462
Amortization, net	(9,779)	(13,873)
Impairment	784	12,548
Sale of other real estate	(1,346)	(2,067)
Write-downs of other real estate	52	1,629
Other	(194)	95
Balance at end of period	$ 83,115	$ 159,061

XML

Changes in Noncovered Other Real Estate Owned (Summary of Noncovered Other Real Estate Owned) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Other Real Estate Owned [Line Items]
Balance, beginning of period	$ 26,987
Proceeds from sale of OREO property	(2,019)	(7,829)
Gain (loss) on sale of OREO	2,787	2,954
Total OREO, end of period	25,727
Noncovered Loans [Member]
Other Real Estate Owned [Line Items]
Balance, beginning of period	10,676	22,893
Transfers in, net of write-downs ($32 and $118)	2,709	3,803
Transfers in, write-downs	32	118
OREO improvements	0	11
Additional OREO write-down	(93)	(1,722)
Proceeds from sale of OREO property	(1,565)	(7,829)
Gain (loss) on sale of OREO	189	(412)
Total OREO, end of period	$ 11,916	$ 16,744

XML

Covered Assets and FDIC Loss-sharing Asset Covered Loans - Credit Quality Indicator (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Net Reported Amount	$ 2,933,306	$ 2,864,803
Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	461,852	500,794
Valuation discount on covered loans	69,150	79,401
Loans and Leases Receivable, Allowance	29,489	30,056	20,504	4,944
Loans and Leases Receivable, Net Reported Amount	363,213	391,337
Covered Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	342,697	356,520
Covered Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	8,848	11,003
Covered Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	110,280	133,271
Covered Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	27	0
Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	269,676
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	49,639	57,150
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Commercial Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	25,503	26,628
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	101,541	105,384
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	92,993	101,094
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Pass [Member] | One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	40,030	44,782
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Pass [Member] | Commercial Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	16,047	16,336
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Pass [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	82,120	81,205
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Pass [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	76,454	82,222
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Special Mention [Member] | One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	331	1,344
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Special Mention [Member] | Commercial Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Special Mention [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,232	864
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Special Mention [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	398	3,318
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Substandard [Member] | One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	9,278	11,024
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Substandard [Member] | Commercial Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	9,456	10,292
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Substandard [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	16,189	23,315
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Substandard [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	16,141	15,554
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Doubtful [Member] | One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Doubtful [Member] | Commercial Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Doubtful [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Doubtful [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member] | One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member] | Commercial Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	36,197
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	22,165
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	11,453	12,320
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,579	2,931
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Land And Acquisition [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	14,137	13,833
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	8,028	11,565
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Pass [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	4,374	4,419
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Pass [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,099	1,107
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Pass [Member] | Land And Acquisition [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	6,449	4,817
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Pass [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,812	6,050
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Special Mention [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Special Mention [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Special Mention [Member] | Land And Acquisition [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,796	3,273
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Special Mention [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Substandard [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	7,079	7,901
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Substandard [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,480	1,824
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Substandard [Member] | Land And Acquisition [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	4,892	5,743
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Substandard [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	5,216	5,515
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Doubtful [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Doubtful [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Doubtful [Member] | Land And Acquisition [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Doubtful [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member] | Land And Acquisition [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Consumer Portfolio Segment [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	42,103	44,516
Consumer Portfolio Segment [Member] | Covered Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	37,255	38,973
Consumer Portfolio Segment [Member] | Covered Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	419	381
Consumer Portfolio Segment [Member] | Covered Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	4,402	5,162
Consumer Portfolio Segment [Member] | Covered Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	27	0
Consumer Portfolio Segment [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Commercial Portfolio Segment [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	113,876
Commercial Portfolio Segment [Member] | Covered Loans [Member] | Secured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	107,703	118,594
Commercial Portfolio Segment [Member] | Covered Loans [Member] | Unsecured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	6,173	6,779
Commercial Portfolio Segment [Member] | Covered Loans [Member] | Pass [Member] | Secured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	71,555	71,621
Commercial Portfolio Segment [Member] | Covered Loans [Member] | Pass [Member] | Unsecured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	4,502	4,988
Commercial Portfolio Segment [Member] | Covered Loans [Member] | Special Mention [Member] | Secured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,672	1,823
Commercial Portfolio Segment [Member] | Covered Loans [Member] | Special Mention [Member] | Unsecured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Commercial Portfolio Segment [Member] | Covered Loans [Member] | Substandard [Member] | Secured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	34,476	45,150
Commercial Portfolio Segment [Member] | Covered Loans [Member] | Substandard [Member] | Unsecured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,671	1,791
Commercial Portfolio Segment [Member] | Covered Loans [Member] | Doubtful [Member] | Secured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Commercial Portfolio Segment [Member] | Covered Loans [Member] | Doubtful [Member] | Unsecured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Commercial Portfolio Segment [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member] | Secured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Commercial Portfolio Segment [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member] | Unsecured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 0	$ 0

XML

Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Changes in the Allowance for Unfunded Commitments and Letters of Credit) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Allowance For Loan And Lease Losses And Unfunded Loan Commitments And Letters Of Credit
Beginning balance	$ 1,915	$ 1,535
Allowance for Loan and Lease Losses, Net Changes In Unfunded Commitments and Letters Of Credit Allowance	0	130
Ending balance	$ 1,915	$ 1,665

XML

Securities (Securities Available for Sale) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 984,075	$ 969,359
Gross Unrealized Gains	35,985	38,606
Gross Unrealized Losses	(7,898)	(6,300)
Fair Value	1,012,162	1,001,665
U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	502,652	561,076
Gross Unrealized Gains	15,484	16,719
Gross Unrealized Losses	(6,181)	(5,426)
Fair Value	511,955	572,369
State and Municipal Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	256,608	265,070
Gross Unrealized Gains	19,586	20,893
Gross Unrealized Losses	(589)	(388)
Fair Value	275,605	285,575
U.S. Government and Government-Sponsored Enterprise Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	201,680	120,085
Gross Unrealized Gains	828	851
Gross Unrealized Losses	(981)	(435)
Fair Value	201,527	120,501
US Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	19,811	19,804
Gross Unrealized Gains	0	39
Gross Unrealized Losses	(105)	(15)
Fair Value	19,706	19,828
Other Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	3,324	3,324
Gross Unrealized Gains	87	104
Gross Unrealized Losses	(42)	(36)
Fair Value	$ 3,369	$ 3,392

XML

Goodwill and Intangible Assets (Estimated Future Amortization Expense of Core Deposit Intangibles) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013
Future Amortization Expense For Core Deposit Intangibles
2013	$ 2,936
2014	3,397
2015	2,645
2016	2,183
2017	$ 1,627

XML

Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Tables)

3 Months Ended

Mar. 31, 2013

Mar. 31, 2012

Financing Receivable, Allowance for Credit Losses [Line Items]

Changes in the Allowance for Unfunded Commitments and Letters of Credit

Changes in the allowance for unfunded commitments and letters of credit are summarized as follows:

	Three Months Ended
	March 31,
	2013		2012
	(in thousands)
Balance at beginning of period	$	1,915	$	1,535
Net changes in the allowance for unfunded commitments and letters of credit	—		130
Balance at end of period	$	1,915	$	1,665

Financing Receivable Credit Quality Indicators

The following is an analysis of the credit quality of our covered loan portfolio as of March 31, 2013 and 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
March 31, 2013	(in thousands)
Covered loans:
Commercial business:
Secured	$	71,555	$	1,672	$	34,476	$	—	$	—	$	107,703
Unsecured	4,502		—		1,671		—		—		6,173
Real estate:
One-to-four family residential	40,030		331		9,278		—		—		49,639
Commercial and multifamily residential:
Commercial land	16,047		—		9,456		—		—		25,503
Income property	82,120		3,232		16,189		—		—		101,541
Owner occupied	76,454		398		16,141		—		—		92,993
Real estate construction:
One-to-four family residential:
Land and acquisition	6,449		2,796		4,892		—		—		14,137
Residential construction	2,812		—		5,216		—		—		8,028
Commercial and multifamily residential:
Income property	4,374		—		7,079		—		—		11,453
Owner occupied	1,099		—		1,480		—		—		2,579
Consumer	37,255		419		4,402		27		—		42,103
Total	$	342,697	$	8,848	$	110,280	$	27	$	—	461,852
Less:
Valuation discount resulting from acquisition accounting											69,150
Allowance for loan losses											29,489
Covered loans, net											$	363,213

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2012	(in thousands)
Covered loans:
Commercial business:
Secured	$	71,621	$	1,823	$	45,150	$	—	$	—	$	118,594
Unsecured	4,988		—		1,791		—		—		6,779
Real estate:
One-to-four family residential	44,782		1,344		11,024		—		—		57,150
Commercial and multifamily residential:
Commercial land	16,336		—		10,292		—		—		26,628
Income property	81,205		864		23,315		—		—		105,384
Owner occupied	82,222		3,318		15,554		—		—		101,094
Real estate construction:
One-to-four family residential:
Land and acquisition	4,817		3,273		5,743		—		—		13,833
Residential construction	6,050		—		5,515		—		—		11,565
Commercial and multifamily residential:
Income property	4,419		—		7,901		—		—		12,320
Owner occupied	1,107		—		1,824		—		—		2,931
Consumer	38,973		381		5,162		—		—		44,516
Total	$	356,520	$	11,003	$	133,271	$	—	$	—	500,794
Less:
Valuation discount resulting from acquisition accounting											79,401
Allowance for loan losses											30,056
Covered loans, net											$	391,337

Noncovered Loans [Member]

Financing Receivable, Allowance for Credit Losses [Line Items]

Allowance for Credit Losses on Financing Receivables

The following tables show a detailed analysis of the allowance for loan and lease losses for noncovered loans for the three months ended March 31, 2013 and 2012:

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended March 31, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	27,270	$	(988	)	$	79	$	510		$	26,871	$	67	$	26,804
Unsecured	753		(326		)	34		289			750		84		666
Real estate:
One-to-four family residential	694		(116		)	—		79			657		108		549
Commercial & multifamily residential
Commercial land	460		—			10		(37		)	433		—		433
Income property	11,033		(783		)	79		(918		)	9,411		18		9,393
Owner occupied	6,362		—			4		(908		)	5,458		34		5,424
Real estate construction:
One-to-four family residential
Land and acquisition	1,171		(32		)	2,139		(2,288		)	990		74		916
Residential construction	635		(101		)	—		4			538		—		538
Commercial & multifamily residential
Income property	316		—			—		66			382		—		382
Owner occupied	102		—			—		6			108		—		108
Consumer	2,437		(171		)	47		51			2,364		—		2,364
Unallocated	1,011		—			—		2,146			3,157		—		3,157
Total	$	52,244	$	(2,517	)	$	2,392	$	(1,000	)	$	51,119	$	385	$	50,734

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended March 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	24,745	$	(2,354	)	$	614	$	2,537		$	25,542	$	451	$	25,091
Unsecured	689		(5		)	44		58			786		141		645
Real estate:
One-to-four family residential	654		(116		)	43		108			689		72		617
Commercial & multifamily residential
Commercial land	488		(305		)	—		510			693		—		693
Income property	9,551		(2,008		)	18		2,688			10,249		1,087		9,162
Owner occupied	9,606		(365		)	53		(739		)	8,555		16		8,539
Real estate construction:
One-to-four family residential
Land and acquisition	2,331		(204		)	47		(503		)	1,671		—		1,671
Residential construction	864		—			—		138			1,002		18		984
Commercial & multifamily residential
Income property	665		—			—		(442		)	223		—		223
Owner occupied	35		—			—		9			44		—		44
Consumer	2,719		(1,093		)	373		130			2,129		—		2,129
Unallocated	694		—			—		6			700		—		700
Total	$	53,041	$	(6,450	)	$	1,192	$	4,500		$	52,283	$	1,785	$	50,498

Financing Receivable Credit Quality Indicators

The following is an analysis of the credit quality of our noncovered loan portfolio as of March 31, 2013 and December 31, 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
March 31, 2013	(in thousands)
Noncovered loans:
Commercial business:
Secured	$	1,062,881	$	31,333	$	63,004	$	—	$	—	$	1,157,218
Unsecured	44,087		70		158		—		—		44,315
Real estate:
One-to-four family residential	40,866		252		2,806		—		—		43,924
Commercial and multifamily residential:
Commercial land	44,229		115		3,794		—		—		48,138
Income property	625,209		1,918		28,595		—		—		655,722
Owner occupied	376,995		2,758		20,021		—		—		399,774
Real estate construction:
One-to-four family residential:
Land and acquisition	16,372		1,219		3,903		—		—		21,494
Residential construction	29,858		788		510		—		—		31,156
Commercial and multifamily residential:
Income property	24,479		—		—		—		—		24,479
Owner occupied	42,192		—		—		—		—		42,192
Consumer	147,957		29		4,813		—		1		152,800
Total	$	2,455,125	$	38,482	$	127,604	$	—	$	1	2,621,212
Less:
Allowance for loan and lease losses											51,119
Noncovered loans, net											$	2,570,093

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business:
Secured	$	1,011,722	$	29,222	$	65,607	$	—	$	—	$	1,106,551
Unsecured	44,788		26		529		—		—		45,343
Real estate:
One-to-four family residential	40,346		406		3,440		—		—		44,192
Commercial and multifamily residential:
Commercial land	43,401		—		3,926		—		—		47,327
Income property	581,671		3,688		29,453		—		—		614,812
Owner occupied	357,063		1,848		36,262		—		—		395,173
Real estate construction:
One-to-four family residential:
Land and acquisition	12,741		1,351		4,404		—		—		18,496
Residential construction	28,705		1,142		1,817		—		—		31,664
Commercial and multifamily residential:
Income property	28,342		—		—		—		—		28,342
Owner occupied	36,211		—		—		—		—		36,211
Consumer	151,049		75		6,475		—		—		157,599
Total	$	2,336,039	$	37,758	$	151,913	$	—	$	—	2,525,710
Less:
Allowance for loan and lease losses											52,244
Noncovered loans, net											$	2,473,466

XML

Covered Assets and FDIC Loss-sharing Asset (Analysis and Allowance for Losses on Covered Loans) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans, net	$ 2,933,306	$ 2,864,803
Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	461,852	500,794
Valuation discount on covered loans	69,150	79,401
Allowance for loan losses	29,489	30,056	20,504	4,944
Loans, net	363,213	391,337
Commercial Portfolio Segment [Member] | Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	113,876
Real Estate Portfolio Segment [Member] | Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	269,676
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | One-to-Four Family Residential [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	49,639	57,150
Real Estate Portfolio Segment [Member] | Covered Loans [Member] | Commercial and Multifamily Residential [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	220,037
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	36,197
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | One-to-Four Family Residential [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	22,165
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member] | Commercial and Multifamily Residential [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	14,032
Consumer Portfolio Segment [Member] | Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 42,103	$ 44,516

XML

Noncovered Loans (Analysis of Impaired Loans) (Details) (Noncovered Loans [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	$ 2,588,387		$ 2,491,049
Recorded Investment of Loans Individually Measured for Specific Impairment	32,825		34,661
Average Recorded Investment Impaired Loans	33,743	56,276
Interest Recognized on Impaired Loans	322	891
Impaired Loans With Recorded Allowance [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	1,457		4,405
Unpaid Principal Balance	1,648		5,787
Related Allowance	385		1,395
Impaired Loans Without Recorded Allowance [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	31,368		30,256
Unpaid Principal Balance	45,554		44,410
Commercial Portfolio Segment [Member] | Unsecured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	44,231		45,251
Recorded Investment of Loans Individually Measured for Specific Impairment	84		92
Recorded Investment	84		92
Unpaid Principal Balance	84		92
Related Allowance	84		92
Average Recorded Investment Impaired Loans	88	119
Interest Recognized on Impaired Loans	1	1
Commercial Portfolio Segment [Member] | Secured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	1,152,246		1,101,689
Recorded Investment of Loans Individually Measured for Specific Impairment	4,972		4,862
Recorded Investment	293		690
Unpaid Principal Balance	414		1,994
Related Allowance	67		113
Average Recorded Investment Impaired Loans	4,917	9,709
Interest Recognized on Impaired Loans	4	309
Real Estate Portfolio Segment [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	388,437		383,269
Recorded Investment of Loans Individually Measured for Specific Impairment	11,337		11,904
Recorded Investment	605		608
Unpaid Principal Balance	606		610
Related Allowance	34		38
Average Recorded Investment Impaired Loans	11,620	14,152
Interest Recognized on Impaired Loans	279	107
Real Estate Portfolio Segment [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	646,457		606,656
Recorded Investment of Loans Individually Measured for Specific Impairment	9,265		8,156
Recorded Investment	18		2,670
Unpaid Principal Balance	66		2,727
Related Allowance	18		1,040
Average Recorded Investment Impaired Loans	8,710	8,083
Interest Recognized on Impaired Loans	29	115
Real Estate Portfolio Segment [Member] | Commercial Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	45,366		44,672
Recorded Investment of Loans Individually Measured for Specific Impairment	2,772		2,655
Recorded Investment	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Investment Impaired Loans	2,714	3,405
Interest Recognized on Impaired Loans	0	0
Real Estate Portfolio Segment [Member] | One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	42,380		42,103
Recorded Investment of Loans Individually Measured for Specific Impairment	1,544		2,089
Recorded Investment	340		345
Unpaid Principal Balance	362		364
Related Allowance	108		112
Average Recorded Investment Impaired Loans	1,816	2,266
Interest Recognized on Impaired Loans	4	1
Real Estate Construction Portfolio Segment [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	31,011		29,707
Recorded Investment of Loans Individually Measured for Specific Impairment	145		1,957
Recorded Investment	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Investment Impaired Loans	1,051	4,286
Interest Recognized on Impaired Loans	2	358
Real Estate Construction Portfolio Segment [Member] | Land And Acquisition [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	18,914		15,677
Recorded Investment of Loans Individually Measured for Specific Impairment	2,580		2,819
Recorded Investment	117		0
Unpaid Principal Balance	116		0
Related Allowance	74		0
Average Recorded Investment Impaired Loans	2,700	6,539
Interest Recognized on Impaired Loans	1	0
Real Estate Construction Portfolio Segment [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	42,192		36,211
Recorded Investment of Loans Individually Measured for Specific Impairment	0		0
Real Estate Construction Portfolio Segment [Member] | Owner Occupied Construction [Member] [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Real Estate Construction Portfolio Segment [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	24,479		28,342
Recorded Investment of Loans Individually Measured for Specific Impairment	0		0
Recorded Investment	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Investment Impaired Loans	0	6,045
Interest Recognized on Impaired Loans	0	0
Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	152,674		157,472
Recorded Investment of Loans Individually Measured for Specific Impairment	126		127
Recorded Investment	0		0
Unpaid Principal Balance	0		0
Related Allowance	0		0
Average Recorded Investment Impaired Loans	127	1,672
Interest Recognized on Impaired Loans	2	0
Impaired Loans Without Recorded Allowance [Member] | Commercial Portfolio Segment [Member] | Unsecured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	0		0
Unpaid Principal Balance	0		0
Impaired Loans Without Recorded Allowance [Member] | Commercial Portfolio Segment [Member] | Secured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	4,680		4,172
Unpaid Principal Balance	7,488		6,769
Impaired Loans Without Recorded Allowance [Member] | Real Estate Portfolio Segment [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	10,732		11,296
Unpaid Principal Balance	14,135		14,642
Impaired Loans Without Recorded Allowance [Member] | Real Estate Portfolio Segment [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	9,246		5,486
Unpaid Principal Balance	12,442		7,860
Impaired Loans Without Recorded Allowance [Member] | Real Estate Portfolio Segment [Member] | Commercial Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	2,772		2,655
Unpaid Principal Balance	5,845		5,727
Impaired Loans Without Recorded Allowance [Member] | Real Estate Portfolio Segment [Member] | One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	1,204		1,744
Unpaid Principal Balance	1,341		1,902
Impaired Loans Without Recorded Allowance [Member] | Real Estate Construction Portfolio Segment [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	145		1,957
Unpaid Principal Balance	144		2,570
Impaired Loans Without Recorded Allowance [Member] | Real Estate Construction Portfolio Segment [Member] | Land And Acquisition [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	2,463		2,819
Unpaid Principal Balance	4,033		4,813
Impaired Loans Without Recorded Allowance [Member] | Real Estate Construction Portfolio Segment [Member] | Owner Occupied Construction [Member] [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	0		0
Unpaid Principal Balance	0		0
Impaired Loans Without Recorded Allowance [Member] | Real Estate Construction Portfolio Segment [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	0		0
Unpaid Principal Balance	0		0
Impaired Loans Without Recorded Allowance [Member] | Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	126		127
Unpaid Principal Balance	$ 126		$ 127

XML

Securities (Narrative) (Details)	Mar. 31, 2013 security
U.S. Government and Government-Sponsored Enterprise Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In Unrealized Loss Position	11
Number Of Securities In Continuous Loss Position For Twelve Months or More	0
Other Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In Unrealized Loss Position	2
Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In Unrealized Loss Position	15
Number Of Securities In Continuous Loss Position For Twelve Months or More	1
U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In Unrealized Loss Position	18
Number Of Securities In Continuous Loss Position For Twelve Months or More	1
Other Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In Continuous Loss Position For Twelve Months or More	1

XML

Covered Assets and FDIC Loss-sharing Asset (Changes in Allowance for Covered Loans) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Provision for loan and lease losses	$ (20)	$ 20,185
Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Beginning balance	30,056	4,944
Loans charged off	(2,382)	(562)
Recoveries	835	437
Provision for loan and lease losses	980	15,685
Ending balance	$ 29,489	$ 20,504

XML

Subsequent Events (Details)	0 Months Ended
	Apr. 02, 2013
Subsequent Event [Line Items]
Business Acquisition, Effective Date of Acquisition	Apr. 01, 2013
Business Acquisition, Percentage of Voting Interests Acquired	100.00%

XML

Derivatives and Hedging Activities (Details) (Not Designated as Hedging Instrument [Member], Interest Rate Contracts [Member], USD $)	Mar. 31, 2013	Dec. 31, 2012
Derivative [Line Items]
Notional Amount of Interest Rate Derivative Instruments Not Designated as Hedging Instruments	$ 158,900,000	$ 177,000,000
Other Assets [Member]
Derivative [Line Items]
Fair value of asset derivative instruments	13,456,000	14,921,000
Other Liabilities [Member]
Derivative [Line Items]
Fair value of liability derivative instruments	$ 13,456,000	$ 14,921,000

XML

Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Analysis of Credit Quality of Noncovered Loan Portfolio) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net	$ 2,933,306	$ 2,864,803
Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,621,212	2,525,710
Recorded Investment	2,621,212	2,525,710
Loans and Leases Receivable, Allowance	51,119	52,244	52,283	53,041
Loans, net	2,570,093	2,473,466
Pass [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,455,125	2,336,039
Special Mention [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	38,482	37,758
Substandard [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	127,604	151,913
Doubtful [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1	0
Commercial Portfolio Segment [Member] | Noncovered Loans [Member] | Secured Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,157,218	1,106,551
Loans and Leases Receivable, Allowance	26,871	27,270	25,542	24,745
Commercial Portfolio Segment [Member] | Noncovered Loans [Member] | Unsecured Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	44,315	45,343
Loans and Leases Receivable, Allowance	750	753	786	689
Commercial Portfolio Segment [Member] | Pass [Member] | Noncovered Loans [Member] | Secured Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,062,881	1,011,722
Commercial Portfolio Segment [Member] | Pass [Member] | Noncovered Loans [Member] | Unsecured Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	44,087	44,788
Commercial Portfolio Segment [Member] | Special Mention [Member] | Noncovered Loans [Member] | Secured Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	31,333	29,222
Commercial Portfolio Segment [Member] | Special Mention [Member] | Noncovered Loans [Member] | Unsecured Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	70	26
Commercial Portfolio Segment [Member] | Substandard [Member] | Noncovered Loans [Member] | Secured Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	63,004	65,607
Commercial Portfolio Segment [Member] | Substandard [Member] | Noncovered Loans [Member] | Unsecured Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	158	529
Commercial Portfolio Segment [Member] | Doubtful [Member] | Noncovered Loans [Member] | Secured Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Commercial Portfolio Segment [Member] | Doubtful [Member] | Noncovered Loans [Member] | Unsecured Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Commercial Portfolio Segment [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member] | Secured Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Commercial Portfolio Segment [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member] | Unsecured Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Noncovered Loans [Member] | One-to-Four Family Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	43,924	44,192
Loans and Leases Receivable, Allowance	657	694	689	654
Real Estate Portfolio Segment [Member] | Noncovered Loans [Member] | Commercial Land [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	48,138	47,327
Loans and Leases Receivable, Allowance	433	460	693	488
Real Estate Portfolio Segment [Member] | Noncovered Loans [Member] | Income Property Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	655,722	614,812
Loans and Leases Receivable, Allowance	9,411	11,033	10,249	9,551
Real Estate Portfolio Segment [Member] | Noncovered Loans [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	399,774	395,173
Loans and Leases Receivable, Allowance	5,458	6,362	8,555	9,606
Real Estate Portfolio Segment [Member] | Pass [Member] | Noncovered Loans [Member] | One-to-Four Family Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	40,866	40,346
Real Estate Portfolio Segment [Member] | Pass [Member] | Noncovered Loans [Member] | Commercial Land [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	44,229	43,401
Real Estate Portfolio Segment [Member] | Pass [Member] | Noncovered Loans [Member] | Income Property Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	625,209	581,671
Real Estate Portfolio Segment [Member] | Pass [Member] | Noncovered Loans [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	376,995	357,063
Real Estate Portfolio Segment [Member] | Special Mention [Member] | Noncovered Loans [Member] | One-to-Four Family Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	252	406
Real Estate Portfolio Segment [Member] | Special Mention [Member] | Noncovered Loans [Member] | Commercial Land [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	115	0
Real Estate Portfolio Segment [Member] | Special Mention [Member] | Noncovered Loans [Member] | Income Property Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,918	3,688
Real Estate Portfolio Segment [Member] | Special Mention [Member] | Noncovered Loans [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,758	1,848
Real Estate Portfolio Segment [Member] | Substandard [Member] | Noncovered Loans [Member] | One-to-Four Family Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,806	3,440
Real Estate Portfolio Segment [Member] | Substandard [Member] | Noncovered Loans [Member] | Commercial Land [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,794	3,926
Real Estate Portfolio Segment [Member] | Substandard [Member] | Noncovered Loans [Member] | Income Property Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	28,595	29,453
Real Estate Portfolio Segment [Member] | Substandard [Member] | Noncovered Loans [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	20,021	36,262
Real Estate Portfolio Segment [Member] | Doubtful [Member] | Noncovered Loans [Member] | One-to-Four Family Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Doubtful [Member] | Noncovered Loans [Member] | Commercial Land [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Doubtful [Member] | Noncovered Loans [Member] | Income Property Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Doubtful [Member] | Noncovered Loans [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member] | One-to-Four Family Residential [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member] | Commercial Land [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member] | Income Property Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Portfolio Segment [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Noncovered Loans [Member] | Income Property Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	24,479	28,342
Loans and Leases Receivable, Allowance	382	316	223	665
Real Estate Construction Portfolio Segment [Member] | Noncovered Loans [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	42,192	36,211
Loans and Leases Receivable, Allowance	108	102	44	35
Real Estate Construction Portfolio Segment [Member] | Noncovered Loans [Member] | Land and Acquisition [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	21,494	18,496
Loans and Leases Receivable, Allowance	990	1,171	1,671	2,331
Real Estate Construction Portfolio Segment [Member] | Noncovered Loans [Member] | Residential Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	31,156	31,664
Loans and Leases Receivable, Allowance	538	635	1,002	864
Real Estate Construction Portfolio Segment [Member] | Pass [Member] | Noncovered Loans [Member] | Income Property Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	24,479	28,342
Real Estate Construction Portfolio Segment [Member] | Pass [Member] | Noncovered Loans [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	42,192	36,211
Real Estate Construction Portfolio Segment [Member] | Pass [Member] | Noncovered Loans [Member] | Land and Acquisition [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	16,372	12,741
Real Estate Construction Portfolio Segment [Member] | Pass [Member] | Noncovered Loans [Member] | Residential Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	29,858	28,705
Real Estate Construction Portfolio Segment [Member] | Special Mention [Member] | Noncovered Loans [Member] | Income Property Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Special Mention [Member] | Noncovered Loans [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Special Mention [Member] | Noncovered Loans [Member] | Land and Acquisition [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,219	1,351
Real Estate Construction Portfolio Segment [Member] | Special Mention [Member] | Noncovered Loans [Member] | Residential Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	788	1,142
Real Estate Construction Portfolio Segment [Member] | Substandard [Member] | Noncovered Loans [Member] | Income Property Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Substandard [Member] | Noncovered Loans [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Substandard [Member] | Noncovered Loans [Member] | Land and Acquisition [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,903	4,404
Real Estate Construction Portfolio Segment [Member] | Substandard [Member] | Noncovered Loans [Member] | Residential Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	510	1,817
Real Estate Construction Portfolio Segment [Member] | Doubtful [Member] | Noncovered Loans [Member] | Income Property Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Doubtful [Member] | Noncovered Loans [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Doubtful [Member] | Noncovered Loans [Member] | Land and Acquisition [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Doubtful [Member] | Noncovered Loans [Member] | Residential Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member] | Income Property Multifamily [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member] | Owner Occupied [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member] | Land and Acquisition [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Real Estate Construction Portfolio Segment [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member] | Residential Construction [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Consumer Portfolio Segment [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	152,800	157,599
Loans and Leases Receivable, Allowance	2,364	2,437	2,129	2,719
Consumer Portfolio Segment [Member] | Pass [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	147,957	151,049
Consumer Portfolio Segment [Member] | Special Mention [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	29	75
Consumer Portfolio Segment [Member] | Substandard [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	4,813	6,475
Consumer Portfolio Segment [Member] | Doubtful [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0	0
Consumer Portfolio Segment [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 1	$ 0

XML

Basis of Presentation and Significant Accounting Policies

3 Months Ended

Mar. 31, 2013

Basis of Presentation And Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. The consolidated financial statements include the accounts of the Company, and its wholly owned banking subsidiary Columbia Bank (the “Bank”). All intercompany transactions and accounts have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included. The results of operations for the three months ended March 31, 2013 are not necessarily indicative of results to be anticipated for the year ending December 31, 2013. The accompanying interim unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes contained in the Company’s 2012 Annual Report on Form 10-K.

Significant Accounting Policies

The significant accounting policies used in preparation of our consolidated financial statements are disclosed in our 2012 Annual Report on Form 10-K. There have not been any changes in our significant accounting policies compared to those contained in our 2012 Form 10-K disclosure for the year ended December 31, 2012, except for the adoption of ASU 2012-06 as noted below.

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Fair Value Accounting and Measurement (Financial Assets And Liabilities Accounted for Fair Value On Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 1,012,162	$ 1,001,665
Fair Value, Level 2 to level 1 Transfers, Amount	0
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	1,012,162	1,001,665
Other assets (Interest rate contracts)	13,456	14,921
Other liabilities (Interest rate contracts)	13,456	14,921
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	19,706	19,828
Other assets (Interest rate contracts)	0	0
Other liabilities (Interest rate contracts)	0	0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	992,456	981,837
Other assets (Interest rate contracts)	13,456	14,921
Other liabilities (Interest rate contracts)	13,456	14,921
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Other assets (Interest rate contracts)	0	0
Other liabilities (Interest rate contracts)	0	0
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	511,955	572,369
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	511,955	572,369
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
State and Municipal Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	275,605	285,575
State and Municipal Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
State and Municipal Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	275,605	285,575
State and Municipal Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
U.S. Government Agency [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	201,527	120,501
U.S. Government Agency [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
U.S. Government Agency [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	201,527	120,501
U.S. Government Agency [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
US Treasury Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	19,706	19,828
US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	19,706	19,828
US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
US Treasury Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Other Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	3,369	3,392
Other Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Other Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	3,369	3,392
Other Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 0	$ 0

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Noncovered Loans Noncovered Loans (Analysis of Troubled Debt Restructurings) (Details) (Noncovered Loans [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 Modifications
Financing Receivable, Modifications [Line Items]
Number of TDR Modifications	1
Pre-Modification Outstanding Recorded Investment	$ 117
Post-Modification Outstanding Recorded Investment	117
Land And Acquisition [Member]
Financing Receivable, Modifications [Line Items]
Number of TDR Modifications	1
Pre-Modification Outstanding Recorded Investment	117
Post-Modification Outstanding Recorded Investment	$ 117

XML

Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2013

Accumulated Other Comprehensive Income (Loss) [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table shows changes in accumulated other comprehensive income by component for the three month period ended March 31, 2013:

	Unrealized Gains and Losses on Available-for-Sale Securities (1)			Unrealized Gains and Losses on Pension Plan Liability (1)			Total (1)
	(in thousands)
Beginning balance	$	20,918		$	(769	)	$	20,149
Other comprehensive income before reclassifications	(2,493		)	(757		)	(3,250		)
Amounts reclassified from accumulated other comprehensive income (2)	(240		)	60			(180		)
Net current-period other comprehensive income	(2,733		)	(697		)	(3,430		)
Ending balance	18,185			(1,466		)	16,719

__________

(1) All amounts are net of tax. Amounts in parenthesis indicate debits.

(2) See following table for details about these reclassifications.

Schedule of reclassifications from accumulated other comprehensive income [Table Text Block]

The following table shows details regarding the reclassifications from accumulated other comprehensive income for the three month period ended March 31, 2013:

	Amount Reclassified from Accumulated Other Comprehensive Income			Affected line Item in the Consolidated Statement of Income
	(in thousands)
Unrealized gains and losses on available-for-sale securities
	$	370		Investment securities gains, net
	370			Total before tax
	(130		)	Tax expense
	$	240		Net of tax
Amortization of pension plan liability
Actuarial losses	$	(92	)	Compensation and employee benefits
	(92		)	Total before tax
	32			Tax benefit
	$	(60	)	Net of tax

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill and Intangible Assets

The following table sets forth activity for goodwill and intangible assets for the period:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Total goodwill	$	115,554		$	115,554
Core deposit intangible:
Gross core deposit intangible balance at beginning of period	32,441			32,441
Accumulated amortization at beginning of period	(16,720		)	(12,275		)
Core deposit intangible, net at beginning of period	15,721			20,166
CDI current period amortization	(1,028		)	(1,150		)
Total core deposit intangible, net at end of period	14,693			19,016
Total goodwill and intangible assets at end of period	$	130,247		$	134,570

Estimated Future Amortization Expense of Core Deposit Intangibles

The following table provides the estimated future amortization expense of core deposit intangibles for the remaining nine months ending December 31, 2013 and the succeeding four years:

	Amount
	(in thousands)
Year ending December 31,
2013	$	2,936
2014	3,397
2015	2,645
2016	2,183
2017	1,627

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Goodwill and Intangible Assets (Schedule of Goodwill and Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012	Dec. 31, 2011
Goodwill and Intangible Assets [Roll Forward]
Total goodwill, beginning of period	$ 115,554	$ 115,554
Total goodwill, end of period	115,554
Core deposit intangible, net, beginning of period	15,721
CDI current period amortization	(1,029)	(1,150)
Total goodwill and intangible assets, end of period	130,247	134,570
Total core deposit intangible, end of period	14,693
Core Deposits [Member]
Goodwill and Intangible Assets [Line Items]
Estimated life of CDI, in years	10 years
Goodwill and Intangible Assets [Roll Forward]
Gross core deposit intangible balance, beginning of period			32,441	32,441
Accumulated amortization at beginning of period			(16,720)	(12,275)
Core deposit intangible, net, beginning of period	15,721	20,166
CDI current period amortization	(1,028)	(1,150)
Total core deposit intangible, end of period	$ 14,693	$ 19,016

XML

Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Narrative) (Details) (Maximum [Member])	3 Months Ended
	Mar. 31, 2013
Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of unallocated loan amount	5.00%

XML

Derivatives and Hedging Activities (Tables) (Not Designated as Hedging Instrument [Member])

3 Months Ended

Mar. 31, 2013

Not Designated as Hedging Instrument [Member]

Derivative [Line Items]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table presents the fair value of derivatives not designated as hedging instruments at March 31, 2013 and December 31, 2012:

Asset Derivatives

Liability Derivatives

March 31, 2013

December 31, 2012

March 31, 2013

December 31, 2012

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

(in thousands)

Interest rate contracts

Other assets

$

13,456

Other assets

$

14,921

Other liabilities

$

13,456

Other liabilities

$

14,921

XML

Fair Value Accounting and Measurement (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Financial Assets And Liabilities Accounted For Fair Value On Recurring Basis

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at March 31, 2013 and December 31, 2012 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

	Fair value		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2		Level 3
March 31, 2013	(in thousands)
Assets
Securities available for sale
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations	$	511,955	$	—	$	511,955	$	—
State and municipal debt securities	275,605		—		275,605		—
U.S. government agency and government-sponsored enterprise securities	201,527		—		201,527		—
U.S. government securities	19,706		19,706		—		—
Other securities	3,369		—		3,369		—
Total securities available for sale	$	1,012,162	$	19,706	$	992,456	$	—
Other assets (Interest rate contracts)	$	13,456	$	—	$	13,456	$	—
Liabilities
Other liabilities (Interest rate contracts)	$	13,456	$	—	$	13,456	$	—

	Fair value		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2		Level 3
December 31, 2012	(in thousands)
Assets
Securities available for sale
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations	$	572,369	$	—	$	572,369	$	—
State and municipal debt securities	285,575		—		285,575		—
U.S. government agency and government-sponsored enterprise securities	120,501		—		120,501		—
U.S. government securities	19,828		19,828		—		—
Other securities	3,392		—		3,392		—
Total securities available for sale	$	1,001,665	$	19,828	$	981,837	$	—
Other assets (Interest rate contracts)	$	14,921	$	—	$	14,921	$	—
Liabilities
Other liabilities (Interest rate contracts)	$	14,921	$	—	$	14,921	$	—

Financial Assets Accounted For Fair Value On Nonrecurring Basis

The following tables set forth the Company's assets that were measured using fair value estimates on a nonrecurring basis at March 31, 2013 and 2012.

	Fair value at March 31, 2013		Fair Value Measurements at Reporting Date Using						Losses During the Three Months Ended March 31, 2013
			Level 1		Level 2		Level 3
	(in thousands)
Impaired loans	$	477	$	—	$	—	$	477	$	102
Noncovered OREO	1,350		—		—		1,350		101
Covered OREO	65		—		—		65		65
	$	1,892	$	—	$	—	$	1,892	$	268

	Fair value  at March 31, 2012		Fair Value Measurements at Reporting Date Using						Losses During the Three Months Ended March 31, 2012
			Level 1		Level 2		Level 3
	(in thousands)
Impaired loans	$	12,416	$	—	$	—	$	12,416	$	2,881
Noncovered OREO	3,510		—		—		3,510		1,730
Covered OREO	1,917		—		—		1,917		767
Noncovered OPPO	2,334		—		—		2,334		1,950
	$	20,177	$	—	$	—	$	20,177	$	7,328

Fair Value, by Balance Sheet Grouping

The following tables summarize carrying amounts and estimated fair values of selected financial instruments as well as assumptions used by the Company in estimating fair value at March 31, 2013 and December 31, 2012:

	March 31, 2013
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
	(in thousands)
Assets
Cash and due from banks	$	91,889	$	91,889	$	91,889	$	—	$	—
Interest-earning deposits with banks	356,056		356,056		356,056		—		—
Securities available for sale	1,012,162		1,012,162		19,706		992,456		—
FHLB stock	21,621		21,621		—		21,621		—
Loans held for sale	888		888		—		888		—
Loans	2,933,306		2,978,867		—		—		2,978,867
FDIC loss-sharing asset	83,115		25,062		—		—		25,062
Interest rate contracts	13,456		13,456		—		13,456		—
Liabilities
Deposits	$	4,046,539	$	4,047,346	$	3,573,755	$	473,591	$	—
FHLB Advances	6,634		6,237		—		6,237		—
Repurchase agreements	25,000		26,396		—		26,396		—
Interest rate contracts	13,456		13,456		—		13,456		—

	December 31, 2012
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
	(in thousands)
Assets
Cash and due from banks	$	124,573	$	124,573	$	124,573	$	—	$	—
Interest-earning deposits with banks	389,353		389,353		389,353		—		—
Securities available for sale	1,001,665		1,001,665		19,828		981,837		—
FHLB stock	21,819		21,819		—		21,819		—
Loans held for sale	2,563		2,563		—		2,563		—
Loans	2,864,803		2,944,317		—		—		2,944,317
FDIC loss-sharing asset	96,354		26,543		—		—		26,543
Interest rate contracts	14,921		14,921		—		14,921		—
Liabilities
Deposits	$	4,042,085	$	4,043,221	$	3,549,821	$	493,400	$	—
FHLB Advances	6,644		5,894		—		5,894		—
Repurchase agreements	25,000		26,464		—		26,464		—
Interest rate contracts	14,921		14,921		—		14,921		—

Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value Inputs, Assets, Quantitative Information

The range and weighted-average of the significant unobservable inputs used to fair value our Level 3 nonrecurring assets, along with the valuation techniques used, are shown in the following table:

	Fair value at March 31, 2013		Valuation Technique	Unobservable Input	Range (Weighted Average) (1)
	(dollars in thousands)
Impaired loans	$	477	Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Noncovered OREO	1,350		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Covered OREO	65		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
(1) Discount applied to appraisal value, letter of intent to purchase, or stated value (in the case of accounts receivable and inventory).
(2) Quantitative disclosures are not provided for impaired loans, noncovered OREO, and covered OREO because there were no adjustments made to the appraisal value during the current period.

	Fair value  at March 31, 2012		Valuation Technique	Unobservable Input	Range (Weighted Average) (1)
	(dollars in thousands)
Impaired loans	$	12,416	Fair Market Value of Collateral	Adjustment to Appraisal Value	0% - 37% (12%)
Noncovered OREO	3,510		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Covered OREO	1,917		Fair Market Value of Collateral	Adjustment to Appraisal Value	0% - 23% (3%)
Noncovered OPPO	2,334		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
(1) Discount applied to appraisal value, letter of intent to purchase, or stated value (in the case of accounts receivable and inventory).
(2) Quantitative disclosures are not provided for noncovered OREO and noncovered OPPO because there were no adjustments made to the appraisal value during the current period.

XML

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash Flows From Operating Activities
Net Income	$ 12,176	$ 8,902
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan and lease losses and losses on covered loans	(20)	20,185
Stock-based compensation expense	551	450
Depreciation, amortization and accretion	13,015	16,141
Net realized gain on sale of securities	370	62
Net realized gain on sale of other assets	(80)	(21)
Net realized (gain) loss on sale of other real estate owned	(2,787)	(2,954)
Write-down on other real estate owned	158	3,127
Net change in:
Loans held for sale	1,675	82
Interest receivable	(2,053)	(750)
Interest payable	(40)	(148)
Other assets	3,192	(1,166)
Other liabilities	(11,739)	(8,403)
Net cash provided by operating activities	13,678	35,383
Cash Flows From Investing Activities
Loans originated and acquired, net of principal collected	71,815	16,814
Purchases of securities available for sale	(84,673)	(30,177)
Purchases of premises and equipment	(3,624)	(6,682)
Proceeds from FDIC reimbursement on loss-sharing asset	3,119	14,804
Proceeds from sales of securities available for sale	3,023	3,845
Proceeds from principal repayments and maturities of securities available for sale	64,758	49,654
Proceeds from Sale of Other Assets	287	0
Proceeds from sales of covered other real estate owned	6,438	8,025
Proceeds from sales of other real estate and other personal property owned	2,019	7,829
Capital improvements on other real estate properties	0	(90)
Net cash provided by (used in) investing activities	(80,468)	30,394
Cash Flows From Financing Activities
Net increase (decrease) in deposits	4,454	49,916
Proceeds from Federal Home Loan Bank advances	100	0
Proceeds from Federal Reserve Bank borrowings	50	0
Proceeds from exercise of stock options	326	308
Repayment of Federal Home Loan Bank advances	(100)	(4,210)
Repayment of Federal Reserve Bank borrowings	(50)	0
Payment of common stock dividends	(3,971)	(14,623)
Net cash used by financing activities	809	31,391
Increase (Decrease) in cash and cash equivalents	(65,981)	97,168
Cash and cash equivalents at beginning of period	513,926	294,289
Cash and cash equivalents at end of period	447,945	391,457
Supplemental Information:
Cash paid for interest	1,319	2,797
Cash paid for income tax	5,500	0
Non-cash investing activities
Loans transferred to other real estate owned	$ 4,114	$ 6,092

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Earnings per Common Share (Tables)

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2013 and 2012:

	Three Months Ended
	March 31,
	2013			2012
	(in thousands except per share)
Basic EPS:
Net income	$	12,176		$	8,902
Less: Earnings allocated to participating securities	(123		)	(132		)
Earnings allocated to common shareholders	$	12,053		$	8,770
Weighted average common shares outstanding	39,348			39,195
Basic earnings per common share	$	0.31		$	0.22
Diluted EPS:
Earnings allocated to common shareholders	$	12,053		$	8,770
Weighted average common shares outstanding	39,348			39,195
Dilutive effect of equity awards	3			103
Weighted average diluted common shares outstanding	39,351			39,298
Diluted earnings per common share	$	0.31		$	0.22
Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive	9			46

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Noncovered Loans (Analysis of Nonaccrual Loans) (Details) (Noncovered Loans [Member], USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	$ 32,886	$ 37,395
Unpaid Principal Balance Nonaccrual Loans	51,261	57,877
Commercial Portfolio Segment [Member] | Secured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	9,383	9,037
Unpaid Principal Balance Nonaccrual Loans	16,192	17,821
Commercial Portfolio Segment [Member] | Unsecured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	121	262
Unpaid Principal Balance Nonaccrual Loans	121	262
Real Estate Portfolio Segment [Member] | One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	1,684	2,349
Unpaid Principal Balance Nonaccrual Loans	2,023	2,672
Real Estate Portfolio Segment [Member] | Commercial Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	3,347	4,076
Unpaid Principal Balance Nonaccrual Loans	6,701	7,491
Real Estate Portfolio Segment [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	8,230	8,520
Unpaid Principal Balance Nonaccrual Loans	11,439	10,815
Real Estate Portfolio Segment [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	5,825	6,608
Unpaid Principal Balance Nonaccrual Loans	6,997	7,741
Real Estate Construction Portfolio Segment [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	0	0
Real Estate Construction Portfolio Segment [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	0	0
Real Estate Construction Portfolio Segment [Member] | Land and Acquisition [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	2,646	3,084
Unpaid Principal Balance Nonaccrual Loans	5,841	6,704
Real Estate Construction Portfolio Segment [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	388	1,816
Unpaid Principal Balance Nonaccrual Loans	388	2,431
Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	1,262	1,643
Unpaid Principal Balance Nonaccrual Loans	$ 1,559	$ 1,940

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Covered Assets and FDIC Loss-sharing Asset (Covered OREO at Carrying Value) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Balance, beginning of period	$ 26,987
Proceeds from sale of OREO property	(2,019)	(7,829)
Gain on sale of OREO	2,787	2,954
Total OREO, end of period	25,727
Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Balance, beginning of period	16,311	28,126
Transfers in	1,405	2,468
Additional OREO write-down	(65)	(1,505)
Proceeds from sale of OREO property	(6,438)	(8,025)
Gain on sale of OREO	2,598	3,366
Total OREO, end of period	$ 13,811	$ 24,430

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012
ASSETS
Cash and due from banks	$ 91,889		$ 124,573
Interest-earning deposits with banks	356,056		389,353
Total cash and cash equivalents	447,945		513,926
Securities available for sale at fair value (amortized cost of $984,075 and $969,359, respectively)	1,012,162		1,001,665
Federal Home Loan Bank stock at cost	21,621		21,819
Loans held for sale	888		2,563
Loans, net	2,933,306		2,864,803
FDIC loss sharing asset	83,115		96,354
Interest receivable	16,321		14,268
Premises and equipment, net	120,665		118,708
Other real estate owned ($13,811 and $16,311 covered by FDIC loss share, respectively)	25,727		26,987
Goodwill	115,554		115,554
Core deposit intangible, net	14,693		15,721
Other assets	113,014		113,967
Total Assets	4,905,011		4,906,335
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing	1,274,330		1,321,171
Interest-bearing	2,772,209		2,720,914
Total deposits	4,046,539		4,042,085
Federal Home Loan Bank advances	6,634		6,644
Securities sold under agreements to repurchase	25,000		25,000
Other liabilities	57,178		68,598
Total liabilities	4,135,351		4,142,327
Commitments and contingent liabilities
Shareholders' equity:
Authorized shares	63,033		63,033
Common Stock Shares Issued And Outstanding	39,844		39,686
Common Stock (no par value)	582,348		581,471
Retained earnings	170,593		162,388
Accumulated other comprehensive income	16,719	[1]	20,149	[1]
Total shareholders' equity	769,660		764,008
Total Liabilities and Shareholders' Equity	4,905,011		4,906,335
Noncovered Loans [Member]
ASSETS
Loans held for sale	888		2,563
Loans, excluding covered loans, net of unearned income of ($6,985) and ($7,767), respectively	2,621,212		2,525,710
Loans and Leases Receivable, Allowance	51,119		52,244
Loans, net	2,570,093		2,473,466
Other real estate owned ($13,811 and $16,311 covered by FDIC loss share, respectively)	11,916		10,676
Covered Loans [Member]
ASSETS
Loans and Leases Receivable, Allowance	29,489		30,056
Loans, net	363,213		391,337
Other real estate owned ($13,811 and $16,311 covered by FDIC loss share, respectively)	$ 13,811		$ 16,311

[1] All amounts are net of tax. Amounts in parenthesis indicate debits.

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Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Allowance for Noncovered Loan and Lease Losses) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Allowance for Loan and Lease Losses [Roll Forward]
Provision for loan and lease losses	$ (20)	$ 20,185
Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	52,244	53,041
Charged-offs	(2,517)	(6,450)
Recoveries	2,392	1,192
Provision for loan and lease losses	(1,000)	4,500
Ending balance	51,119	52,283
Specific Reserve	385	1,785
General Allocation	50,734	50,498
Commercial Portfolio Segment [Member] | Secured Loans [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	27,270	24,745
Charged-offs	(988)	(2,354)
Recoveries	79	614
Provision for loan and lease losses	510	2,537
Ending balance	26,871	25,542
Specific Reserve	67	451
General Allocation	26,804	25,091
Commercial Portfolio Segment [Member] | Unsecured Loans [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	753	689
Charged-offs	(326)	(5)
Recoveries	34	44
Provision for loan and lease losses	289	58
Ending balance	750	786
Specific Reserve	84	141
General Allocation	666	645
Real Estate Portfolio Segment [Member] | One-to-Four Family Residential [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	694	654
Charged-offs	(116)	(116)
Recoveries	0	43
Provision for loan and lease losses	79	108
Ending balance	657	689
Specific Reserve	108	72
General Allocation	549	617
Real Estate Portfolio Segment [Member] | Commercial Land [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	460	488
Charged-offs	0	(305)
Recoveries	10	0
Provision for loan and lease losses	(37)	510
Ending balance	433	693
Specific Reserve	0	0
General Allocation	433	693
Real Estate Portfolio Segment [Member] | Income Property Multifamily [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	11,033	9,551
Charged-offs	(783)	(2,008)
Recoveries	79	18
Provision for loan and lease losses	(918)	2,688
Ending balance	9,411	10,249
Specific Reserve	18	1,087
General Allocation	9,393	9,162
Real Estate Portfolio Segment [Member] | Owner Occupied [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	6,362	9,606
Charged-offs	0	(365)
Recoveries	4	53
Provision for loan and lease losses	(908)	(739)
Ending balance	5,458	8,555
Specific Reserve	34	16
General Allocation	5,424	8,539
Real Estate Construction Portfolio Segment [Member] | Income Property Multifamily [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	316	665
Charged-offs	0	0
Recoveries	0	0
Provision for loan and lease losses	66	(442)
Ending balance	382	223
Specific Reserve	0	0
General Allocation	382	223
Real Estate Construction Portfolio Segment [Member] | Owner Occupied [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	102	35
Charged-offs	0	0
Recoveries	0	0
Provision for loan and lease losses	6	9
Ending balance	108	44
Specific Reserve	0	0
General Allocation	108	44
Real Estate Construction Portfolio Segment [Member] | Land and Acquisition [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,171	2,331
Charged-offs	(32)	(204)
Recoveries	2,139	47
Provision for loan and lease losses	(2,288)	(503)
Ending balance	990	1,671
Specific Reserve	74	0
General Allocation	916	1,671
Real Estate Construction Portfolio Segment [Member] | Residential Construction [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	635	864
Charged-offs	(101)	0
Recoveries	0	0
Provision for loan and lease losses	4	138
Ending balance	538	1,002
Specific Reserve	0	18
General Allocation	538	984
Consumer Portfolio Segment [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	2,437	2,719
Charged-offs	(171)	(1,093)
Recoveries	47	373
Provision for loan and lease losses	51	130
Ending balance	2,364	2,129
Specific Reserve	0	0
General Allocation	2,364	2,129
Unallocated Financing Receivables [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	1,011	694
Charged-offs	0	0
Recoveries	0	0
Provision for loan and lease losses	2,146	6
Ending balance	3,157	700
Specific Reserve	0	0
General Allocation	$ 3,157	$ 700

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Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Net unrealized holding gain (loss) from available for sale securities arising during the period, tax	$ 1,432	$ 2,808
Reclassification adjustment of net gain from sale of available for sale securities included in income, tax	0	0
Reclassification adjustment of net gain included in income, tax	0	0
Net unrealized gain from unfunded defined benefit plan liability arising during the period, tax	0	0
Less: amortization of unrecognized net actuarial loss included in net periodic pension cost, tax	$ (7)	$ (8)

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Accumulated Other Comprehensive Income (Changes in AOCI by Component) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	$ 20,149	[1]
Other comprehensive income before reclassifications	(3,250)	[1]
Amounts reclassified from accumulated other comprehensive income (2)	(180)	[1],[2]
Net current-period other comprehensive income	(3,430)	[1]
Ending balance	16,719	[1]
Unrealized Gains and Losses on Available-for-Sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	20,918	[1]
Other comprehensive income before reclassifications	(2,493)	[1]
Amounts reclassified from accumulated other comprehensive income (2)	(240)	[1],[2]
Net current-period other comprehensive income	(2,733)	[1]
Ending balance	18,185	[1]
Unrealized Gains and Losses on Pension Plan Liability [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(769)	[1]
Other comprehensive income before reclassifications	(757)	[1]
Amounts reclassified from accumulated other comprehensive income (2)	60	[1],[2]
Net current-period other comprehensive income	(697)	[1]
Ending balance	$ (1,466)	[1]

[1] All amounts are net of tax. Amounts in parenthesis indicate debits.

[2] See following table for details about these reclassifications.

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Securities (Carrying Value of Securities Pledged as Collateral) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Carrying amount of securities pledged as collateral	$ 372,378
Washington and Oregon State Public Deposits [Member]
Schedule of Available-for-sale Securities [Line Items]
Carrying amount of securities pledged as collateral	282,025
Federal Reserve Bank Advances [Member]
Schedule of Available-for-sale Securities [Line Items]
Carrying amount of securities pledged as collateral	45,405
Other Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Carrying amount of securities pledged as collateral	$ 44,948

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Fair Value Accounting and Measurement (Carrying Amounts and Estimated Fair Values of Selected Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Assets
Interest-earning deposits with banks	$ 356,056	$ 389,353
Securities available for sale	1,012,162	1,001,665
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Assets
Cash and due from banks	91,889	124,573
Interest-earning deposits with banks	356,056	389,353
Securities available for sale	1,012,162	1,001,665
FHLB stock	21,621	21,819
Loans held for sale	888	2,563
Loans	2,933,306	2,864,803
FDIC loss-sharing asset	83,115	96,354
Interest rate contracts	13,456	14,921
Liabilities
Deposits	4,046,539	4,042,085
FHLB Advances	6,634	6,644
Repurchase agreements	25,000	25,000
Interest rate contracts	13,456	14,921
Estimate of Fair Value, Fair Value Disclosure [Member]
Assets
Cash and due from banks	91,889	124,573
Interest-earning deposits with banks	356,056	389,353
Securities available for sale	1,012,162	1,001,665
FHLB stock	21,621	21,819
Loans held for sale	888	2,563
Loans	2,978,867	2,944,317
FDIC loss-sharing asset	25,062	26,543
Interest rate contracts	13,456	14,921
Liabilities
Deposits	4,047,346	4,043,221
FHLB Advances	6,237	5,894
Repurchase agreements	26,396	26,464
Interest rate contracts	13,456	14,921
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Assets
Cash and due from banks	91,889	124,573
Interest-earning deposits with banks	356,056	389,353
Securities available for sale	19,706	19,828
FHLB stock	0	0
Loans held for sale	0	0
Loans	0	0
FDIC loss-sharing asset	0	0
Interest rate contracts	0	0
Liabilities
Deposits	3,573,755	3,549,821
FHLB Advances	0	0
Repurchase agreements	0	0
Interest rate contracts	0	0
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Assets
Cash and due from banks	0	0
Interest-earning deposits with banks	0	0
Securities available for sale	992,456	981,837
FHLB stock	21,621	21,819
Loans held for sale	888	2,563
Loans	0	0
FDIC loss-sharing asset	0	0
Interest rate contracts	13,456	14,921
Liabilities
Deposits	473,591	493,400
FHLB Advances	6,237	5,894
Repurchase agreements	26,396	26,464
Interest rate contracts	13,456	14,921
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Assets
Cash and due from banks	0	0
Interest-earning deposits with banks	0	0
Securities available for sale	0	0
FHLB stock	0	0
Loans held for sale	0	0
Loans	2,978,867	2,944,317
FDIC loss-sharing asset	25,062	26,543
Interest rate contracts	0	0
Liabilities
Deposits	0	0
FHLB Advances	0	0
Repurchase agreements	0	0
Interest rate contracts	$ 0	$ 0

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Subsequent Events (Notes)

3 Months Ended

Mar. 31, 2013

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Events

Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Nonrecognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date.

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 operating results of the Company for the three months ended March 31, 2013 do not include the operating results produced by West Coast as the acquisition did not close until April 1, 2013. It is not practical to present financial information related to the acquisition at this time because the fair value measurement of assets acquired and liabilities assumed has not been finalized.

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Securities (Summary of Gross Unrealized Losses and Fair Value of the Investments with Unrealized Losses) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months Fair Value	$ 339,620	$ 254,666
Less than 12 Months Unrealized Losses	(7,584)	(5,923)
12 Months or More Fair Value	12,418	13,378
12 Months or More Unrealized Losses	(314)	(377)
Total Fair Value	352,038	268,044
Total Unrealized Losses	(7,898)	(6,300)
U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months Fair Value	160,587	167,739
Less than 12 Months Unrealized Losses	(5,914)	(5,090)
12 Months or More Fair Value	11,250	12,204
12 Months or More Unrealized Losses	(267)	(336)
Total Fair Value	171,837	179,943
Total Unrealized Losses	(6,181)	(5,426)
State and Municipal Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months Fair Value	21,513	20,413
Less than 12 Months Unrealized Losses	(584)	(383)
12 Months or More Fair Value	210	210
12 Months or More Unrealized Losses	(5)	(5)
Total Fair Value	21,723	20,623
Total Unrealized Losses	(589)	(388)
US Government Corporations and Agencies Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months Fair Value	137,814	56,600
Less than 12 Months Unrealized Losses	(981)	(435)
12 Months or More Fair Value	0	0
12 Months or More Unrealized Losses	0	0
Total Fair Value	137,814	56,600
Total Unrealized Losses	(981)	(435)
US Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months Fair Value	19,706	9,914
Less than 12 Months Unrealized Losses	(105)	(15)
12 Months or More Fair Value	0	0
12 Months or More Unrealized Losses	0	0
Total Fair Value	19,706	9,914
Total Unrealized Losses	(105)	(15)
Other Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 Months Fair Value	0	0
Less than 12 Months Unrealized Losses	0	0
12 Months or More Fair Value	958	964
12 Months or More Unrealized Losses	(42)	(36)
Total Fair Value	958	964
Total Unrealized Losses	$ (42)	$ (36)

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Noncovered Loans (Tables) (Noncovered Loans [Member])

3 Months Ended

Mar. 31, 2013

Noncovered Loans [Member]

Financing Receivable, Recorded Investment [Line Items]

Analysis of Loan Portfolio by Major Types of Loans

The following is an analysis of the noncovered loan portfolio by major types of loans (net of unearned income):

	March 31, 2013			December 31, 2012
Noncovered loans:	(in thousands)
Commercial business	$	1,204,760		$	1,155,158
Real estate:
One-to-four family residential	43,604			43,922
Commercial and multifamily residential	1,106,987			1,061,201
Total real estate	1,150,591			1,105,123
Real estate construction:
One-to-four family residential	52,946			50,602
Commercial and multifamily residential	67,213			65,101
Total real estate construction	120,159			115,703
Consumer	152,687			157,493
Less: Net unearned income	(6,985		)	(7,767		)
Total noncovered loans, net of unearned income	2,621,212			2,525,710
Less: Allowance for loan and lease losses	(51,119		)	(52,244		)
Total noncovered loans, net	$	2,570,093		$	2,473,466
Loans held for sale	$	888		$	2,563

Analysis of nonaccrual loans

The following is an analysis of noncovered, nonaccrual loans as of March 31, 2013 and December 31, 2012:

	March 31, 2013				December 31, 2012
	Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans		Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans
Noncovered loans:	(in thousands)
Commercial business
Secured	$	9,383	$	16,192	$	9,037	$	17,821
Unsecured	121		121		262		262
Real estate:
One-to-four family residential	1,684		2,023		2,349		2,672
Commercial & multifamily residential
Commercial land	3,347		6,701		4,076		7,491
Income property	8,230		11,439		8,520		10,815
Owner occupied	5,825		6,997		6,608		7,741
Real estate construction:
One-to-four family residential
Land and acquisition	2,646		5,841		3,084		6,704
Residential construction	388		388		1,816		2,431
Consumer	1,262		1,559		1,643		1,940
Total	$	32,886	$	51,261	$	37,395	$	57,877

Past Due Financing Receivables

The following is an aging of the recorded investment of the noncovered loan portfolio as of March 31, 2013 and December 31, 2012:

	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
March 31, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,142,942	$	3,739	$	1,154	$	4,893	$	9,383	$	1,157,218
Unsecured	43,918		112		164		276		121		44,315
Real estate:
One-to-four family residential	41,330		849		61		910		1,684		43,924
Commercial & multifamily residential
Commercial land	43,785		1,006		—		1,006		3,347		48,138
Income property	645,058		2,434		—		2,434		8,230		655,722
Owner occupied	389,803		2,525		1,621		4,146		5,825		399,774
Real estate construction:
One-to-four family residential
Land and acquisition	18,330		204		314		518		2,646		21,494
Residential construction	30,768		—		—		—		388		31,156
Commercial & multifamily residential
Income property	24,479		—		—		—		—		24,479
Owner occupied	42,192		—		—		—		—		42,192
Consumer	150,423		885		230		1,115		1,262		152,800
Total	$	2,573,028	$	11,754	$	3,544	$	15,298	$	32,886	$	2,621,212
	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,091,770	$	4,259	$	1,485	$	5,744	$	9,037	$	1,106,551
Unsecured	44,817		252		12		264		262		45,343
Real estate:
One-to-four family residential	41,508		193		142		335		2,349		44,192
Commercial & multifamily residential
Commercial land	42,818		311		122		433		4,076		47,327
Income property	603,339		2,726		227		2,953		8,520		614,812
Owner occupied	387,525		1,040		—		1,040		6,608		395,173
Real estate construction:
One-to-four family residential
Land and acquisition	15,412		—		—		—		3,084		18,496
Residential construction	29,848		—		—		—		1,816		31,664
Commercial & multifamily residential
Income property	28,342		—		—		—		—		28,342
Owner occupied	36,211		—		—		—		—		36,211
Consumer	155,207		387		362		749		1,643		157,599
Total	$	2,476,797	$	9,168	$	2,350	$	11,518	$	37,395	$	2,525,710

Impaired Financing Receivables

The following is an analysis of impaired loans as of March 31, 2013 and December 31, 2012:

	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
March 31, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,152,246	$	4,972	$	293	$	414	$	67	$	4,680	$	7,488
Unsecured	44,231		84		84		84		84		—		—
Real estate:
One-to-four family residential	42,380		1,544		340		362		108		1,204		1,341
Commercial & multifamily residential
Commercial land	45,366		2,772		—		—		—		2,772		5,845
Income property	646,457		9,265		18		66		18		9,246		12,442
Owner occupied	388,437		11,337		605		606		34		10,732		14,135
Real estate construction:
One-to-four family residential
Land and acquisition	18,914		2,580		117		116		74		2,463		4,033
Residential construction	31,011		145		—		—		—		145		144
Commercial & multifamily residential
Income property	24,479		—		—		—		—		—		—
Owner occupied	42,192		—		—		—		—		—		—
Consumer	152,674		126		—		—		—		126		126
Total	$	2,588,387	$	32,825	$	1,457	$	1,648	$	385	$	31,368	$	45,554
	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,101,689	$	4,862	$	690	$	1,994	$	113	$	4,172	$	6,769
Unsecured	45,251		92		92		92		92		—		—
Real estate:
One-to-four family residential	42,103		2,089		345		364		112		1,744		1,902
Commercial & multifamily residential
Commercial land	44,672		2,655		—		—		—		2,655		5,727
Income property	606,656		8,156		2,670		2,727		1,040		5,486		7,860
Owner occupied	383,269		11,904		608		610		38		11,296		14,642
Real estate construction:
One-to-four family residential
Land and acquisition	15,677		2,819		—		—		—		2,819		4,813
Residential construction	29,707		1,957		—		—		—		1,957		2,570
Commercial & multifamily residential
Income property	28,342		—		—		—		—		—		—
Owner occupied	36,211		—		—		—		—		—		—
Consumer	157,472		127		—		—		—		127		127
Total	$	2,491,049	$	34,661	$	4,405	$	5,787	$	1,395	$	30,256	$	44,410

The following table provides additional information on impaired loans for the three month periods indicated.

	Three Months Ended March 31,
	2013				2012
	Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans		Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans
Noncovered loans:	(in thousands)
Commercial business
Secured	$	4,917	$	4	$	9,709	$	309
Unsecured	88		1		119		1
Real estate:
One-to-four family residential	1,816		4		2,266		1
Commercial & multifamily residential
Commercial land	2,714		—		3,405		—
Income property	8,710		29		8,083		115
Owner occupied	11,620		279		14,152		107
Real estate construction:
One-to-four family residential
Land and acquisition	2,700		1		6,539		—
Residential construction	1,051		2		4,286		358
Commercial & multifamily residential
Income property	—		—		6,045		—
Consumer	127		2		1,672		—
Total	$	33,743	$	322	$	56,276	$	891

Analysis of loans classified as Troubled Debt Restructurings (“TDR”)

There were no Troubled Debt Restructurings ("TDR") during the three months ended March 31, 2012. The following is an analysis of loans classified as TDR during the three months ended March 31, 2013:

	Three months ended March 31, 2013
	Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Noncovered loans:	(dollars in thousands)
Real estate construction:
One-to-four family residential:
Land and acquisition	1	$	117	$	117
Total	1	$	117	$	117

XML

Consolidated Statements of Changes in Shareholders' Equity (USD $) In Thousands	Total	Common Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]
Balance, value at Dec. 31, 2011	$ 759,338	$ 579,136	$ 155,069	$ 25,133
Balance, shares at Dec. 31, 2011		39,506
Net Income	8,902		8,902
Other comprehensive income	(1,672)			(1,672)
Issuance of common stock - stock option and other plans, value	308	308
Issuance of common stock - stock option and other plans, shares		18
Issuance of common stock - restricted stock awards, net of cancelled awards, value	450	450
Issuance of common stock - restricted stock awards, net of cancelled awards, shares		146
Cash dividends paid on common stock	(14,623)		(14,623)
Balance, value at Mar. 31, 2012	752,703	579,894	149,348	23,461
Balance, shares at Mar. 31, 2012		39,670
Balance, value at Dec. 31, 2012	764,008	581,471	162,388	20,149
Balance, shares at Dec. 31, 2012		39,686
Net Income	12,176		12,176
Other comprehensive income	(3,430)			(3,430)
Issuance of common stock - stock option and other plans, value	326	326
Issuance of common stock - stock option and other plans, shares		18
Issuance of common stock - restricted stock awards, net of cancelled awards, value	551	551
Issuance of common stock - restricted stock awards, net of cancelled awards, shares		140
Cash dividends paid on common stock	(3,971)		(3,971)
Balance, value at Mar. 31, 2013	$ 769,660	$ 582,348	$ 170,593	$ 16,719
Balance, shares at Mar. 31, 2013		39,844

XML

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Securities available-for-sale, amortized cost	$ 984,075	$ 969,359
Less: Unearned income on loans	(6,985)	(7,767)
Other real estate owned covered by FDIC loss share	25,727	26,987
Common stock, par value
Common stock, shares authorized	63,033	63,033
Common stock, shares outstanding	39,844	39,686
Covered Loans [Member]
Allowance for losses on covered loans	(29,489)	(30,056)
Other real estate owned covered by FDIC loss share	$ 13,811	$ 16,311

XML

Shareholders' Equity

3 Months Ended

Mar. 31, 2013

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

On January 24, 2013 the Company declared a quarterly cash dividend of $0.10 per share payable on February 20, 2013 to shareholders of record at the close of business February 6, 2013. The payment of cash dividends is subject to Federal regulatory requirements for capital levels and other restrictions. In addition, the cash dividends paid by Columbia Bank to the Company are subject to both Federal and State regulatory requirements. Subsequent to quarter end, on April 24, 2013, the Company declared a quarterly cash dividend of $0.10 per common share, and common share equivalent for holders of preferred stock, payable on May 22, 2013 to shareholders of record at the close of business May 8, 2013.

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2013	Apr. 30, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Entity Registrant Name	COLUMBIA BANKING SYSTEM INC
Entity Central Index Key	0000887343
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		51,027,081

XML

Accumulated Other Comprehensive Income (Notes)

3 Months Ended

Mar. 31, 2013

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income

The following table shows changes in accumulated other comprehensive income by component for the three month period ended March 31, 2013:

	Unrealized Gains and Losses on Available-for-Sale Securities (1)			Unrealized Gains and Losses on Pension Plan Liability (1)			Total (1)
	(in thousands)
Beginning balance	$	20,918		$	(769	)	$	20,149
Other comprehensive income before reclassifications	(2,493		)	(757		)	(3,250		)
Amounts reclassified from accumulated other comprehensive income (2)	(240		)	60			(180		)
Net current-period other comprehensive income	(2,733		)	(697		)	(3,430		)
Ending balance	18,185			(1,466		)	16,719

__________

(1) All amounts are net of tax. Amounts in parenthesis indicate debits.

(2) See following table for details about these reclassifications.

The following table shows details regarding the reclassifications from accumulated other comprehensive income for the three month period ended March 31, 2013:

	Amount Reclassified from Accumulated Other Comprehensive Income			Affected line Item in the Consolidated Statement of Income
	(in thousands)
Unrealized gains and losses on available-for-sale securities
	$	370		Investment securities gains, net
	370			Total before tax
	(130		)	Tax expense
	$	240		Net of tax
Amortization of pension plan liability
Actuarial losses	$	(92	)	Compensation and employee benefits
	(92		)	Total before tax
	32			Tax benefit
	$	(60	)	Net of tax

XML

Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Net of tax	$ 12,176	$ 8,902
Unrealized gain from securities:
Net unrealized holding loss from available for sale securities arising during the period, net of tax of $1,357 and $926	(2,493)	(1,645)
Reclassification adjustment of net gain from sale of available for sale securities included in income, net of tax of $130 and $22	(240)	(40)
Net unrealized gain from securities, net of reclassification adjustment	(2,733)	(1,685)
Pension plan liability adjustment:
Unrecognized net actuarial gain (loss) during the period, net of tax of $412 and $0	(757)	0
Less: amortization of unrecognized net actuarial loss included in net periodic pension cost, net of tax of ($32) and ($7)	60	13
Pension plan liability adjustment, net	(697)	13
Total comprehensive income	$ 8,746	$ 7,230

XML

Noncovered Loans

3 Months Ended

Mar. 31, 2013

Noncovered Loans [Abstract]

Noncovered Loans

Noncovered Loans

Noncovered loans include loans originated through our branch network and loan departments as well as acquired loans that are not subject to FDIC loss-sharing agreements.

The following is an analysis of the noncovered loan portfolio by major types of loans (net of unearned income):

	March 31, 2013			December 31, 2012
Noncovered loans:	(in thousands)
Commercial business	$	1,204,760		$	1,155,158
Real estate:
One-to-four family residential	43,604			43,922
Commercial and multifamily residential	1,106,987			1,061,201
Total real estate	1,150,591			1,105,123
Real estate construction:
One-to-four family residential	52,946			50,602
Commercial and multifamily residential	67,213			65,101
Total real estate construction	120,159			115,703
Consumer	152,687			157,493
Less: Net unearned income	(6,985		)	(7,767		)
Total noncovered loans, net of unearned income	2,621,212			2,525,710
Less: Allowance for loan and lease losses	(51,119		)	(52,244		)
Total noncovered loans, net	$	2,570,093		$	2,473,466
Loans held for sale	$	888		$	2,563

At March 31, 2013 and December 31, 2012, the Company had no material foreign activities. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington and Oregon.

The Company has granted loans to officers and directors of the Company and related interests. These loans are made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than the normal risk of collectability. The aggregate dollar amount of these loans was $13.7 million and $14.2 million at March 31, 2013 and December 31, 2012, respectively. During the first three months of 2013, advances on related party loans were $475 thousand and repayments totaled $948 thousand.

At March 31, 2013 and December 31, 2012, $463.7 million and $443.4 million of commercial and residential real estate loans were pledged as collateral on Federal Home Loan Bank borrowings and additional borrowing capacity. The Company has also pledged $17.4 million and $13.8 million of commercial loans to the Federal Reserve Bank for additional borrowing capacity at March 31, 2013 and December 31, 2012, respectively.

The following is an analysis of noncovered, nonaccrual loans as of March 31, 2013 and December 31, 2012:

	March 31, 2013				December 31, 2012
	Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans		Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans
Noncovered loans:	(in thousands)
Commercial business
Secured	$	9,383	$	16,192	$	9,037	$	17,821
Unsecured	121		121		262		262
Real estate:
One-to-four family residential	1,684		2,023		2,349		2,672
Commercial & multifamily residential
Commercial land	3,347		6,701		4,076		7,491
Income property	8,230		11,439		8,520		10,815
Owner occupied	5,825		6,997		6,608		7,741
Real estate construction:
One-to-four family residential
Land and acquisition	2,646		5,841		3,084		6,704
Residential construction	388		388		1,816		2,431
Consumer	1,262		1,559		1,643		1,940
Total	$	32,886	$	51,261	$	37,395	$	57,877

The following is an aging of the recorded investment of the noncovered loan portfolio as of March 31, 2013 and December 31, 2012:

	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
March 31, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,142,942	$	3,739	$	1,154	$	4,893	$	9,383	$	1,157,218
Unsecured	43,918		112		164		276		121		44,315
Real estate:
One-to-four family residential	41,330		849		61		910		1,684		43,924
Commercial & multifamily residential
Commercial land	43,785		1,006		—		1,006		3,347		48,138
Income property	645,058		2,434		—		2,434		8,230		655,722
Owner occupied	389,803		2,525		1,621		4,146		5,825		399,774
Real estate construction:
One-to-four family residential
Land and acquisition	18,330		204		314		518		2,646		21,494
Residential construction	30,768		—		—		—		388		31,156
Commercial & multifamily residential
Income property	24,479		—		—		—		—		24,479
Owner occupied	42,192		—		—		—		—		42,192
Consumer	150,423		885		230		1,115		1,262		152,800
Total	$	2,573,028	$	11,754	$	3,544	$	15,298	$	32,886	$	2,621,212
	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,091,770	$	4,259	$	1,485	$	5,744	$	9,037	$	1,106,551
Unsecured	44,817		252		12		264		262		45,343
Real estate:
One-to-four family residential	41,508		193		142		335		2,349		44,192
Commercial & multifamily residential
Commercial land	42,818		311		122		433		4,076		47,327
Income property	603,339		2,726		227		2,953		8,520		614,812
Owner occupied	387,525		1,040		—		1,040		6,608		395,173
Real estate construction:
One-to-four family residential
Land and acquisition	15,412		—		—		—		3,084		18,496
Residential construction	29,848		—		—		—		1,816		31,664
Commercial & multifamily residential
Income property	28,342		—		—		—		—		28,342
Owner occupied	36,211		—		—		—		—		36,211
Consumer	155,207		387		362		749		1,643		157,599
Total	$	2,476,797	$	9,168	$	2,350	$	11,518	$	37,395	$	2,525,710

The following is an analysis of impaired loans as of March 31, 2013 and December 31, 2012:

	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
March 31, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,152,246	$	4,972	$	293	$	414	$	67	$	4,680	$	7,488
Unsecured	44,231		84		84		84		84		—		—
Real estate:
One-to-four family residential	42,380		1,544		340		362		108		1,204		1,341
Commercial & multifamily residential
Commercial land	45,366		2,772		—		—		—		2,772		5,845
Income property	646,457		9,265		18		66		18		9,246		12,442
Owner occupied	388,437		11,337		605		606		34		10,732		14,135
Real estate construction:
One-to-four family residential
Land and acquisition	18,914		2,580		117		116		74		2,463		4,033
Residential construction	31,011		145		—		—		—		145		144
Commercial & multifamily residential
Income property	24,479		—		—		—		—		—		—
Owner occupied	42,192		—		—		—		—		—		—
Consumer	152,674		126		—		—		—		126		126
Total	$	2,588,387	$	32,825	$	1,457	$	1,648	$	385	$	31,368	$	45,554
	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,101,689	$	4,862	$	690	$	1,994	$	113	$	4,172	$	6,769
Unsecured	45,251		92		92		92		92		—		—
Real estate:
One-to-four family residential	42,103		2,089		345		364		112		1,744		1,902
Commercial & multifamily residential
Commercial land	44,672		2,655		—		—		—		2,655		5,727
Income property	606,656		8,156		2,670		2,727		1,040		5,486		7,860
Owner occupied	383,269		11,904		608		610		38		11,296		14,642
Real estate construction:
One-to-four family residential
Land and acquisition	15,677		2,819		—		—		—		2,819		4,813
Residential construction	29,707		1,957		—		—		—		1,957		2,570
Commercial & multifamily residential
Income property	28,342		—		—		—		—		—		—
Owner occupied	36,211		—		—		—		—		—		—
Consumer	157,472		127		—		—		—		127		127
Total	$	2,491,049	$	34,661	$	4,405	$	5,787	$	1,395	$	30,256	$	44,410

The following table provides additional information on impaired loans for the three month periods indicated.

	Three Months Ended March 31,
	2013				2012
	Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans		Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans
Noncovered loans:	(in thousands)
Commercial business
Secured	$	4,917	$	4	$	9,709	$	309
Unsecured	88		1		119		1
Real estate:
One-to-four family residential	1,816		4		2,266		1
Commercial & multifamily residential
Commercial land	2,714		—		3,405		—
Income property	8,710		29		8,083		115
Owner occupied	11,620		279		14,152		107
Real estate construction:
One-to-four family residential
Land and acquisition	2,700		1		6,539		—
Residential construction	1,051		2		4,286		358
Commercial & multifamily residential
Income property	—		—		6,045		—
Consumer	127		2		1,672		—
Total	$	33,743	$	322	$	56,276	$	891

There were no Troubled Debt Restructurings ("TDR") during the three months ended March 31, 2012. The following is an analysis of loans classified as TDR during the three months ended March 31, 2013:

	Three months ended March 31, 2013
	Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Noncovered loans:	(dollars in thousands)
Real estate construction:
One-to-four family residential:
Land and acquisition	1	$	117	$	117
Total	1	$	117	$	117

The Company's loans classified as TDR are loans that have been modified or the borrower has been granted special concessions due to financial difficulties that, if not for the challenges of the borrower, the Company would not otherwise consider. The Company had commitments to lend $1.8 million and $236 thousand of additional funds on loans classified as TDR as of March 31, 2013 and December 31, 2012, respectively. The TDR modifications or concessions are made to increase the likelihood that these borrowers with financial difficulties will be able to satisfy their debt obligations as amended. Credit losses for loans classified as TDR are measured on the same basis as impaired loans. For impaired loans, an allowance is established when the collateral value less selling costs (or discounted cash flows or observable market price) of the impaired loan is lower than the recorded investment of that loan.The Company did not have any loans modified as TDR within the past twelve months that have defaulted during the three months ended March 31, 2013.

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Securities

3 Months Ended

Mar. 31, 2013

Available-for-sale Securities [Abstract]

Securities

Securities

The following table summarizes the amortized cost, gross unrealized gains and losses and the resulting fair value of securities available for sale:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
March 31, 2013
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	502,652	$	15,484	$	(6,181	)	$	511,955
State and municipal securities	256,608		19,586		(589		)	275,605
U.S. government agency and government-sponsored enterprise securities	201,680		828		(981		)	201,527
U.S. government securities	19,811		—		(105		)	19,706
Other securities	3,324		87		(42		)	3,369
Total	$	984,075	$	35,985	$	(7,898	)	$	1,012,162
December 31, 2012
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	561,076	$	16,719	$	(5,426	)	$	572,369
State and municipal securities	265,070		20,893		(388		)	285,575
U.S. government agency and government-sponsored enterprise securities	120,085		851		(435		)	120,501
U.S. government securities	19,804		39		(15		)	19,828
Other securities	3,324		104		(36		)	3,392
Total	$	969,359	$	38,606	$	(6,300	)	$	1,001,665

The scheduled contractual maturities of investment securities available for sale at March 31, 2013 are presented as follows:

	March 31, 2013
	Amortized Cost		Fair Value
	(in thousands)
Due within one year	$	17,771	$	18,025
Due after one year through five years	158,054		161,996
Due after five years through ten years	244,429		249,097
Due after ten years	560,497		579,677
Other securities with no stated maturity	3,324		3,367
Total investment securities available-for-sale	$	984,075	$	1,012,162

The following table summarizes, as of March 31, 2013, the carrying value of securities pledged as collateral to secure public deposits, borrowings and other purposes as permitted or required by law:

	Carrying Amount
	(in thousands)
To Washington and Oregon State to secure public deposits	$	282,025
To Federal Reserve Bank to secure borrowings	45,405
Other securities pledged	44,948
Total securities pledged as collateral	$	372,378

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2013 and December 31, 2012:

	Less than 12 Months			12 Months or More			Total
	Fair Value	Unrealized Losses		Fair Value	Unrealized Losses		Fair Value	Unrealized Losses
	(in thousands)
March 31, 2013
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	160,587	(5,914	)	11,250	(267	)	171,837	(6,181	)
State and municipal securities	21,513	(584	)	210	(5	)	21,723	(589	)
U.S. government agency and government-sponsored enterprise securities	137,814	(981	)	—	—		137,814	(981	)
U.S. government securities	19,706	(105	)	—	—		19,706	(105	)
Other securities	—	—		958	(42	)	958	(42	)
Total	339,620	(7,584	)	12,418	(314	)	352,038	(7,898	)
December 31, 2012
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	167,739	(5,090	)	12,204	(336	)	179,943	(5,426	)
State and municipal securities	20,413	(383	)	210	(5	)	20,623	(388	)
U.S. government agency and government-sponsored enterprise securities	56,600	(435	)	—	—		56,600	(435	)
U.S. government securities	9,914	(15	)	—	—		9,914	(15	)
Other securities	—	—		964	(36	)	964	(36	)
Total	254,666	(5,923	)	13,378	(377	)	268,044	(6,300	)

At March 31, 2013, there were 18 U.S. government agency and government-sponsored enterprise mortgage-backed securities & collateralized mortgage obligations securities in an unrealized loss position, of which one was in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2013.

At March 31, 2013, there were 15 state and municipal government securities in an unrealized loss position, of which one was in a continuous loss position for 12 months or more. The unrealized losses on state and municipal securities were caused by interest rate changes or widening of market spreads subsequent to the purchase of the individual securities. Management monitors published credit ratings of these securities for adverse changes. As of March 31, 2013, none of the rated obligations of state and local government entities held by the Company had a below investment grade credit rating. Because the credit quality of these securities are investment grade and the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2013.

At March 31, 2013, there were 11 U.S. government agency and government-sponsored enterprise securities in an unrealized loss position, of which none were in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not currently intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2013.

At March 31, 2013, there were two U.S. government securities in an unrealized loss position, neither of which was in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not currently intend to sell this security nor does the Company consider it more likely than not that it will be required to sell this security before the recovery of amortized cost basis, which may be maturity, the Company does not consider this investment to be other-than-temporarily impaired at March 31, 2013.

At March 31, 2013, there was one other security, a mortgage-backed securities fund in a continuous unrealized loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates and the additional risk premium investors are demanding for investment securities with these characteristics. The Company does not consider this investment to be other-than-temporarily impaired at March 31, 2013 as it has the intent and ability to hold the investment for sufficient time to allow for recovery in the market value.

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Securities (Tables)

3 Months Ended

Mar. 31, 2013

Available-for-sale Securities [Abstract]

Securities Available for Sale

The following table summarizes the amortized cost, gross unrealized gains and losses and the resulting fair value of securities available for sale:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
March 31, 2013
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	502,652	$	15,484	$	(6,181	)	$	511,955
State and municipal securities	256,608		19,586		(589		)	275,605
U.S. government agency and government-sponsored enterprise securities	201,680		828		(981		)	201,527
U.S. government securities	19,811		—		(105		)	19,706
Other securities	3,324		87		(42		)	3,369
Total	$	984,075	$	35,985	$	(7,898	)	$	1,012,162
December 31, 2012
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	561,076	$	16,719	$	(5,426	)	$	572,369
State and municipal securities	265,070		20,893		(388		)	285,575
U.S. government agency and government-sponsored enterprise securities	120,085		851		(435		)	120,501
U.S. government securities	19,804		39		(15		)	19,828
Other securities	3,324		104		(36		)	3,392
Total	$	969,359	$	38,606	$	(6,300	)	$	1,001,665

Schedule of Contractual Maturities of Investment Securities Available for Sale

The scheduled contractual maturities of investment securities available for sale at March 31, 2013 are presented as follows:

	March 31, 2013
	Amortized Cost		Fair Value
	(in thousands)
Due within one year	$	17,771	$	18,025
Due after one year through five years	158,054		161,996
Due after five years through ten years	244,429		249,097
Due after ten years	560,497		579,677
Other securities with no stated maturity	3,324		3,367
Total investment securities available-for-sale	$	984,075	$	1,012,162

Carrying Value of Securities Pledged As Collateral

The following table summarizes, as of March 31, 2013, the carrying value of securities pledged as collateral to secure public deposits, borrowings and other purposes as permitted or required by law:

	Carrying Amount
	(in thousands)
To Washington and Oregon State to secure public deposits	$	282,025
To Federal Reserve Bank to secure borrowings	45,405
Other securities pledged	44,948
Total securities pledged as collateral	$	372,378

Summary of Gross Unrealized Losses and Fair Value of the Investments with Unrealized Losses

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2013 and December 31, 2012:

	Less than 12 Months			12 Months or More			Total
	Fair Value	Unrealized Losses		Fair Value	Unrealized Losses		Fair Value	Unrealized Losses
	(in thousands)
March 31, 2013
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	160,587	(5,914	)	11,250	(267	)	171,837	(6,181	)
State and municipal securities	21,513	(584	)	210	(5	)	21,723	(589	)
U.S. government agency and government-sponsored enterprise securities	137,814	(981	)	—	—		137,814	(981	)
U.S. government securities	19,706	(105	)	—	—		19,706	(105	)
Other securities	—	—		958	(42	)	958	(42	)
Total	339,620	(7,584	)	12,418	(314	)	352,038	(7,898	)
December 31, 2012
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	167,739	(5,090	)	12,204	(336	)	179,943	(5,426	)
State and municipal securities	20,413	(383	)	210	(5	)	20,623	(388	)
U.S. government agency and government-sponsored enterprise securities	56,600	(435	)	—	—		56,600	(435	)
U.S. government securities	9,914	(15	)	—	—		9,914	(15	)
Other securities	—	—		964	(36	)	964	(36	)
Total	254,666	(5,923	)	13,378	(377	)	268,044	(6,300	)

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Derivatives and Hedging Activities

3 Months Ended

Mar. 31, 2013

General Discussion of Derivative Instruments and Hedging Activities [Abstract]

Derivatives and Hedging Activities

Derivatives and Hedging Activities

The Company periodically enters into certain commercial loan interest rate swap agreements in order to provide commercial loan customers the ability to convert from variable to fixed interest rates. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to a swap agreement. This swap agreement effectively converts the customer’s variable rate loan into a fixed rate. The Company then enters into a corresponding swap agreement with a third party in order to offset its exposure on the variable and fixed components of the customer agreement. As the interest rate swap agreements with the customers and third parties are not designated as hedges under the Derivatives and Hedging topic of the FASB ASC, the instruments are marked to market in earnings. The notional amount of open interest rate swap agreements at March 31, 2013 and December 31, 2012 was $158.9 million and $177.0 million, respectively. There was no impact to the statement of operations for the three month periods ending March 31, 2013 and 2012.

The following table presents the fair value of derivatives not designated as hedging instruments at March 31, 2013 and December 31, 2012:

Asset Derivatives

Liability Derivatives

March 31, 2013

December 31, 2012

March 31, 2013

December 31, 2012

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

(in thousands)

Interest rate contracts

Other assets

$

13,456

Other assets

$

14,921

Other liabilities

$

13,456

Other liabilities

$

14,921

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Covered Assets and FDIC Loss-sharing Asset (Notes)

3 Months Ended

Mar. 31, 2013

Covered Assets And FDIC Loss Sharing Asset

Covered Assets and FDIC Loss sharing Asset

Covered Assets and FDIC Loss-sharing Asset

Covered Assets

Covered assets consist of loans and OREO acquired in certain FDIC-assisted acquisitions during 2010 and 2011, for which the Bank entered into loss-sharing agreements, whereby the FDIC will cover a substantial portion of future losses on loans (and related unfunded loan commitments), OREO and certain accrued interest on loans during the terms of the agreements. Under the terms of the loss-sharing agreements, the FDIC will absorb 80% of losses and share in 80% of loss recoveries up to specified amounts. With respect to loss-sharing agreements for two acquisitions completed in 2010, after those specified amounts, the FDIC will absorb 95% of losses and share in 95% of loss recoveries. The loss-sharing provisions of the agreements for commercial and single-family mortgage loans are in effect for five and ten years, respectively, from the acquisition dates and the loss recovery provisions are in effect for eight and ten years, respectively, from the acquisition dates.

Ten years and forty-five days after the acquisition dates, the Bank shall pay to the FDIC a clawback in the event the losses from the acquisitions fail to reach stated levels. The amount of the clawback is determined by a formula specified in each individual loss-sharing agreement. As of March 31, 2013, the net present value of the Bank’s estimated clawback liability is $3.8 million, which is included in other liabilities on the consolidated balance sheets.

The following is an analysis of our covered loans, net of related allowance for losses as of March 31, 2013 and December 31, 2012:

	March 31, 2013		December 31, 2012
Covered loans:	(dollars in thousands)
Commercial business	$	113,876	$	125,373
Real estate:
One-to-four family residential	49,639		57,150
Commercial and multifamily residential	220,037		233,106
Total real estate	269,676		290,256
Real estate construction:
One-to-four family residential	22,165		25,398
Commercial and multifamily residential	14,032		15,251
Total real estate construction	36,197		40,649
Consumer	42,103		44,516
Subtotal of covered loans	461,852		500,794
Less:
Valuation discount resulting from acquisition accounting	69,150		79,401
Allowance for loan losses	29,489		30,056
Covered loans, net of allowance for loan losses	$	363,213	$	391,337

Acquired impaired loans are accounted for under ASC 310-30 and initially measured at fair value based on expected future cash flows over the life of the loans. Acquired loans that have common risk characteristics are aggregated into pools. The Company remeasures contractual and expected cash flows, at the pool-level, on a quarterly basis.

Contractual cash flows are calculated based upon the loan pool terms after applying a prepayment factor. Calculation of the applied prepayment factor for contractual cash flows is the same as described below for expected cash flows.

Inputs to the determination of expected cash flows include cumulative default and prepayment data as well as loss severity and recovery lag information. Cumulative default and prepayment data are calculated via a transition matrix. The transition matrix is a matrix of probability values that specifies the probability of a loan pool transitioning into a particular delinquency state (e.g. 0-30 days past due, 31 to 60 days, etc.) given its delinquency state at the remeasurement date. Loss severity factors are based upon either actual charge-off data within the loan pools or industry averages and recovery lags are based upon the collateral within the loan pools.

Acquired impaired loans are also subject to the Company’s internal and external credit review and are risk rated using the same criteria as loans originated by the Company. However, risk ratings are not a clear indicator of losses on acquired loans as the loans were acquired with a significant discount and a majority of the losses are recoverable from the FDIC under the loss-sharing agreements.

Losses attributable to draws on acquired loans, advanced subsequent to the loan acquisition date, are accounted for under ASC 450-20 and those amounts are also subject to the Company’s internal and external credit review. An allowance for loan losses is estimated in a similar manner as the originated loan portfolio, and a provision for loan losses is charged to earnings as necessary.

The excess of cash flows expected to be collected over the initial fair value of acquired loans is referred to as the accretable yield and is accreted into interest income over the estimated life of the acquired loans using the effective yield method. Other adjustments to the accretable yield include changes in the estimated remaining life of the acquired loans, changes in expected cash flows and changes of indices for acquired loans with variable interest rates.

The following table shows the changes in accretable yield for acquired loans for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Balance at beginning of period	$	166,888		$	259,669
Accretion	(14,477		)	(27,658		)
Disposals	(774		)	(1,799		)
Reclassifications from nonaccretable difference	7,149			9,465
Balance at end of period	$	158,786		$	239,677

During the three months ended March 31, 2013, the Company recorded a provision expense for losses on covered loans of $980 thousand. Of this amount, $1.3 million was impairment expense calculated in accordance with ASC 310-30 and $300 thousand was a provision recapture to adjust the allowance for loss calculated under ASC 450-20 for draws on acquired loans. The impact to earnings of the $980 thousand of provision expense for covered loans was partially offset through noninterest income by a $784 thousand increase in the FDIC loss-sharing asset.

The changes in the ALLL for covered loans for the three months ended March 31, 2013 and 2012 are summarized as follows:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Balance at beginning of period	$	30,056		$	4,944
Loans charged off	(2,382		)	(562		)
Recoveries	835			437
Provision charged to expense	980			15,685
Balance at end of period	$	29,489		$	20,504

The following is an analysis of the credit quality of our covered loan portfolio as of March 31, 2013 and 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
March 31, 2013	(in thousands)
Covered loans:
Commercial business:
Secured	$	71,555	$	1,672	$	34,476	$	—	$	—	$	107,703
Unsecured	4,502		—		1,671		—		—		6,173
Real estate:
One-to-four family residential	40,030		331		9,278		—		—		49,639
Commercial and multifamily residential:
Commercial land	16,047		—		9,456		—		—		25,503
Income property	82,120		3,232		16,189		—		—		101,541
Owner occupied	76,454		398		16,141		—		—		92,993
Real estate construction:
One-to-four family residential:
Land and acquisition	6,449		2,796		4,892		—		—		14,137
Residential construction	2,812		—		5,216		—		—		8,028
Commercial and multifamily residential:
Income property	4,374		—		7,079		—		—		11,453
Owner occupied	1,099		—		1,480		—		—		2,579
Consumer	37,255		419		4,402		27		—		42,103
Total	$	342,697	$	8,848	$	110,280	$	27	$	—	461,852
Less:
Valuation discount resulting from acquisition accounting											69,150
Allowance for loan losses											29,489
Covered loans, net											$	363,213

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2012	(in thousands)
Covered loans:
Commercial business:
Secured	$	71,621	$	1,823	$	45,150	$	—	$	—	$	118,594
Unsecured	4,988		—		1,791		—		—		6,779
Real estate:
One-to-four family residential	44,782		1,344		11,024		—		—		57,150
Commercial and multifamily residential:
Commercial land	16,336		—		10,292		—		—		26,628
Income property	81,205		864		23,315		—		—		105,384
Owner occupied	82,222		3,318		15,554		—		—		101,094
Real estate construction:
One-to-four family residential:
Land and acquisition	4,817		3,273		5,743		—		—		13,833
Residential construction	6,050		—		5,515		—		—		11,565
Commercial and multifamily residential:
Income property	4,419		—		7,901		—		—		12,320
Owner occupied	1,107		—		1,824		—		—		2,931
Consumer	38,973		381		5,162		—		—		44,516
Total	$	356,520	$	11,003	$	133,271	$	—	$	—	500,794
Less:
Valuation discount resulting from acquisition accounting											79,401
Allowance for loan losses											30,056
Covered loans, net											$	391,337

The following table sets forth activity in covered OREO at carrying value for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Covered OREO:
Balance at beginning of period	$	16,311		$	28,126
Transfers in	1,405			2,468
Additional OREO write-downs	(65		)	(1,505		)
Proceeds from sale of OREO property	(6,438		)	(8,025		)
Net gain on sale of OREO	2,598			3,366
Total covered OREO at end of period	$	13,811		$	24,430

The covered OREO is covered by loss-sharing agreements with the FDIC in which the FDIC will share in 80% of additional write-downs, as well as gains and losses on covered OREO sales, or 95%, if applicable, of additional write-downs, as wells as gains and losses on covered OREO sales if the minimum loss share thresholds are met.

FDIC Loss-sharing Asset

At March 31, 2013, the FDIC loss-sharing asset is comprised of a $75.5 million FDIC indemnification asset and a $7.6 million FDIC receivable. The indemnification represents the cash flows the Company expects to collect from the FDIC under the loss-sharing agreements and the FDIC receivable represents the reimbursable amounts from the FDIC that have not yet been received.

For covered loans, the Company remeasures contractual and expected cash flows on a quarterly basis. When the quarterly remeasurement process results in a decrease in expected cash flows due to an increase in expected credit losses, impairment is recorded. As a result of this impairment, the indemnification asset is increased to reflect anticipated future cash to be received from the FDIC. Consistent with the loss-sharing agreements between the Company and the FDIC, the amount of the increase to the indemnification asset is measured as 80% of the resulting impairment.

Alternatively, when the quarterly remeasurement results in an increase in expected future cash flows due to a decrease in expected credit losses, the nonaccretable difference decreases and the effective yield of the related loan portfolio is increased. As a result of the improved expected cash flows, the indemnification asset would be reduced first by the amount of any impairment previously recorded and, second, by increased amortization over the remaining life of the related loss-sharing agreement.

The following table shows a detailed analysis of the FDIC loss-sharing asset for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012 (1)
	(in thousands)
Balance at beginning of period	$	96,354		$	175,071
Adjustments not reflected in income
Cash received from the FDIC	(3,119		)	(14,804		)
FDIC reimbursable losses, net	363			462
Adjustments reflected in income
Amortization, net	(9,779		)	(13,873		)
Loan impairment	784			12,548
Sale of other real estate	(1,346		)	(2,067		)
Write-downs of other real estate	52			1,629
Other	(194		)	95
Balance at end of period	$	83,115		$	159,061

__________

(1) Reclassified to conform to the current period’s presentation.

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Accumulated Other Comprehensive Income (Reclassification out of AOCI) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Investment securities gains, net	$ 370	$ 62
Compensation and employee benefits	21,653	21,995
Total before tax	17,111	12,100
Income tax provision	(4,935)	(3,198)
Net Income	12,176	8,902
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains and Losses on Available-for-Sale Securities [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Investment securities gains, net	370
Total before tax	370
Income tax provision	(130)
Net Income	240
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains and Losses on Pension Plan Liability [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Compensation and employee benefits	(92)
Total before tax	(92)
Income tax provision	32
Net Income	$ (60)

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Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit

3 Months Ended

Mar. 31, 2013

Allowance For Loan And Lease Losses And Unfunded Loan Commitments And Letters Of Credit

Allowance For Loan And Lease Losses And Unfunded Loan Commitments And Letters Of Credit Text Block

5. Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit

We maintain an allowance for loan and lease losses (“ALLL”) to absorb losses inherent in the loan portfolio. The size of the ALLL is determined through quarterly assessments of the probable estimated losses in the loan portfolio. Our methodology for making such assessments and determining the adequacy of the ALLL includes the following key elements:

1. General valuation allowance consistent with the Contingencies topic of the FASB Accounting Standards Codification ("ASC").

2. Classified loss reserves on specific relationships. Specific allowances for identified problem loans are determined in accordance with the Receivables topic of the FASB ASC.

3. The unallocated allowance provides for other factors inherent in our loan portfolio that may not have been contemplated in the general and specific components of the allowance. This unallocated amount generally comprises less than 5% of the allowance. The unallocated amount is reviewed quarterly based on trends in credit losses, the results of credit reviews and overall economic trends.

The general valuation allowance is systematically calculated quarterly using quantitative and qualitative information about specific loan classes. The minimum required level an entity develops a methodology to determine its allowance for loan and lease losses is by general categories of loans, such as commercial business, real estate, and consumer. However, the Company’s methodology in determining its allowance for loan and lease losses is prepared in a more detailed manner at the loan class level, utilizing specific categories such as commercial business secured, commercial business unsecured, real estate commercial land, and real estate income property multifamily. The quantitative information uses historical losses from a specific loan class and incorporates the loan’s risk rating migration from origination to the point of loss based upon the consideration of an appropriate look back period.

A loan’s risk rating is primarily determined based upon the borrower’s ability to fulfill its debt obligation from a cash flow perspective. In the event there is financial deterioration of the borrower, the borrower’s other sources of income or repayment are also considered, including recent appraisal values for collateral dependent loans. The qualitative information takes into account general economic and business conditions affecting our marketplace, seasoning of the loan portfolio, duration of the business cycle, etc. to ensure our methodologies reflect the current economic environment and other factors as using historical loss information exclusively may not give an accurate estimate of inherent losses within the Company’s loan portfolio.

When a loan is deemed to be impaired, the Company has to determine if a specific valuation allowance is required for that loan. The specific valuation allowance is a reserve, calculated at the individual loan level, for each loan determined to be both impaired and containing a value less than its recorded investment. The Company measures the impairment based on the discounted expected future cash flows, observable market price, or the fair value of the collateral less selling costs if the loan is collateral dependent or if foreclosure is probable. The specific reserve for each loan is equal to the difference between the recorded investment in the loan and its determined impairment value.

The ALLL is increased by provisions for loan and lease losses (“provision”) charged to expense, and is reduced by loans charged off, net of recoveries or a recovery of previous provisions. While the Company’s management believes the best information available is used to determine the ALLL, changes in market conditions could result in adjustments to the ALLL, affecting net income, if circumstances differ from the assumptions used in determining the ALLL.

We have used the same methodology for ALLL calculations during the three months ended March 31, 2013 and 2012. Adjustments to the percentages of the ALLL allocated to loan categories are made based on trends with respect to delinquencies and problem loans within each class of loans. The Company reviews the ALLL quantitative and qualitative methodology on a quarterly basis and makes adjustments when appropriate. The Company continues to strive towards maintaining a conservative approach to credit quality and will continue to prudently adjust our ALLL as necessary in order to maintain adequate reserves. The Company carefully monitors the loan portfolio and continues to emphasize the importance of credit quality.

Once it is determined that all or a portion of a loan balance is uncollectable, and the amount can be reasonably estimated, the uncollectable portion of the loan is charged-off.

The following tables show a detailed analysis of the allowance for loan and lease losses for noncovered loans for the three months ended March 31, 2013 and 2012:

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended March 31, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	27,270	$	(988	)	$	79	$	510		$	26,871	$	67	$	26,804
Unsecured	753		(326		)	34		289			750		84		666
Real estate:
One-to-four family residential	694		(116		)	—		79			657		108		549
Commercial & multifamily residential
Commercial land	460		—			10		(37		)	433		—		433
Income property	11,033		(783		)	79		(918		)	9,411		18		9,393
Owner occupied	6,362		—			4		(908		)	5,458		34		5,424
Real estate construction:
One-to-four family residential
Land and acquisition	1,171		(32		)	2,139		(2,288		)	990		74		916
Residential construction	635		(101		)	—		4			538		—		538
Commercial & multifamily residential
Income property	316		—			—		66			382		—		382
Owner occupied	102		—			—		6			108		—		108
Consumer	2,437		(171		)	47		51			2,364		—		2,364
Unallocated	1,011		—			—		2,146			3,157		—		3,157
Total	$	52,244	$	(2,517	)	$	2,392	$	(1,000	)	$	51,119	$	385	$	50,734

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended March 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	24,745	$	(2,354	)	$	614	$	2,537		$	25,542	$	451	$	25,091
Unsecured	689		(5		)	44		58			786		141		645
Real estate:
One-to-four family residential	654		(116		)	43		108			689		72		617
Commercial & multifamily residential
Commercial land	488		(305		)	—		510			693		—		693
Income property	9,551		(2,008		)	18		2,688			10,249		1,087		9,162
Owner occupied	9,606		(365		)	53		(739		)	8,555		16		8,539
Real estate construction:
One-to-four family residential
Land and acquisition	2,331		(204		)	47		(503		)	1,671		—		1,671
Residential construction	864		—			—		138			1,002		18		984
Commercial & multifamily residential
Income property	665		—			—		(442		)	223		—		223
Owner occupied	35		—			—		9			44		—		44
Consumer	2,719		(1,093		)	373		130			2,129		—		2,129
Unallocated	694		—			—		6			700		—		700
Total	$	53,041	$	(6,450	)	$	1,192	$	4,500		$	52,283	$	1,785	$	50,498

Changes in the allowance for unfunded commitments and letters of credit are summarized as follows:

	Three Months Ended
	March 31,
	2013		2012
	(in thousands)
Balance at beginning of period	$	1,915	$	1,535
Net changes in the allowance for unfunded commitments and letters of credit	—		130
Balance at end of period	$	1,915	$	1,665

Risk Elements

The extension of credit in the form of loans to individuals and businesses is one of our principal commerce activities. Our policies and applicable laws and regulations require risk analysis as well as ongoing portfolio and credit management. We manage our credit risk through lending limit constraints, credit review, approval policies and extensive, ongoing internal monitoring. We also manage credit risk through diversification of the loan portfolio by type of loan, type of industry, type of borrower and by limiting the aggregation of debt to a single borrower.

The monitoring process for the loan portfolio includes periodic reviews of individual loans with risk ratings assigned to each loan. Based on the analysis, loans are given a risk rating of 1-10 based on the following criteria:

• ratings of 1-3 indicate minimal to low credit risk,

• ratings of 4-5 indicate an average credit risk with adequate repayment capacity when prolonged periods of adversity do not exist,

• rating of 6 indicate higher than average risk requiring greater than routine attention by bank personnel due to conditions affecting the borrower, the borrower's industry or economic environment,

• rating of 7 indicate potential weaknesses that, if left uncorrected, may result in deterioration of the repayment prospects for the asset or in the Company's credit position at some future date,

• rating of 8 indicates a loss is possible if loan weaknesses are not corrected,

• rating of 9 indicates loss is highly probable; however, the amount of loss has not yet been determined,

• and a rating of 10 indicates the loan is uncollectable, and when identified is charged-off.

Loans with a risk rating of 1-6 are considered Pass loans and loans with risk ratings of 7, 8, 9 and 10 are considered Special Mention, Substandard, Doubtful and Loss, respectively. Loans with a risk rating of Substandard or worse are reported as classified loans in our allowance for loan and lease losses analysis. We review these loans to assess the ability of our borrowers to service all interest and principal obligations and, as a result, the risk rating may be adjusted accordingly. Risk ratings are reviewed and updated whenever appropriate, with more periodic reviews as the risk and dollar value of loss on the loan increases. In the event full collection of principal and interest is not reasonably assured, the loan is appropriately downgraded and, if warranted, placed on nonaccrual status even though the loan may be current as to principal and interest payments. Additionally, we assess whether an impairment of a loan warrants specific reserves or a write-down of the loan.

The following is an analysis of the credit quality of our noncovered loan portfolio as of March 31, 2013 and December 31, 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
March 31, 2013	(in thousands)
Noncovered loans:
Commercial business:
Secured	$	1,062,881	$	31,333	$	63,004	$	—	$	—	$	1,157,218
Unsecured	44,087		70		158		—		—		44,315
Real estate:
One-to-four family residential	40,866		252		2,806		—		—		43,924
Commercial and multifamily residential:
Commercial land	44,229		115		3,794		—		—		48,138
Income property	625,209		1,918		28,595		—		—		655,722
Owner occupied	376,995		2,758		20,021		—		—		399,774
Real estate construction:
One-to-four family residential:
Land and acquisition	16,372		1,219		3,903		—		—		21,494
Residential construction	29,858		788		510		—		—		31,156
Commercial and multifamily residential:
Income property	24,479		—		—		—		—		24,479
Owner occupied	42,192		—		—		—		—		42,192
Consumer	147,957		29		4,813		—		1		152,800
Total	$	2,455,125	$	38,482	$	127,604	$	—	$	1	2,621,212
Less:
Allowance for loan and lease losses											51,119
Noncovered loans, net											$	2,570,093

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business:
Secured	$	1,011,722	$	29,222	$	65,607	$	—	$	—	$	1,106,551
Unsecured	44,788		26		529		—		—		45,343
Real estate:
One-to-four family residential	40,346		406		3,440		—		—		44,192
Commercial and multifamily residential:
Commercial land	43,401		—		3,926		—		—		47,327
Income property	581,671		3,688		29,453		—		—		614,812
Owner occupied	357,063		1,848		36,262		—		—		395,173
Real estate construction:
One-to-four family residential:
Land and acquisition	12,741		1,351		4,404		—		—		18,496
Residential construction	28,705		1,142		1,817		—		—		31,664
Commercial and multifamily residential:
Income property	28,342		—		—		—		—		28,342
Owner occupied	36,211		—		—		—		—		36,211
Consumer	151,049		75		6,475		—		—		157,599
Total	$	2,336,039	$	37,758	$	151,913	$	—	$	—	2,525,710
Less:
Allowance for loan and lease losses											52,244
Noncovered loans, net											$	2,473,466

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Changes in Noncovered Other Real Estate Owned

3 Months Ended

Mar. 31, 2013

Other Real Estate, Foreclosed Assets, and Repossessed Assets [Abstract]

Changes in Noncovered Other Real Estate Owned

Changes in Noncovered Other Real Estate Owned

The following tables set forth activity in noncovered OREO for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Noncovered OREO:
Balance at beginning of period	$	10,676		$	22,893
Transfers in, net of write-downs ($32 and $118, respectively)	2,709			3,803
OREO improvements	—			11
Additional OREO write-downs	(93		)	(1,722		)
Proceeds from sale of OREO property	(1,565		)	(7,829		)
Gain (loss) on sale of OREO, net	189			(412		)
Total noncovered OREO at end of period	$	11,916		$	16,744

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Goodwill and Intangible Assets (Notes)

3 Months Ended

Mar. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets

In accordance with the Intangibles – Goodwill and Other topic of the FASB ASC, goodwill is not amortized but is reviewed for potential impairment at the reporting unit level. Management analyzes its goodwill for impairment on an annual basis on July 31 and between annual tests in certain circumstances such as material adverse changes in legal, business, regulatory and economic factors. An impairment loss is recorded to the extent that the carrying amount of goodwill exceeds its implied fair value.

The core deposit intangible (“CDI”) is evaluated for impairment if events and circumstances indicate a possible impairment. The CDI is amortized on an accelerated basis over an estimated life of approximately 10 years.

The following table sets forth activity for goodwill and intangible assets for the period:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Total goodwill	$	115,554		$	115,554
Core deposit intangible:
Gross core deposit intangible balance at beginning of period	32,441			32,441
Accumulated amortization at beginning of period	(16,720		)	(12,275		)
Core deposit intangible, net at beginning of period	15,721			20,166
CDI current period amortization	(1,028		)	(1,150		)
Total core deposit intangible, net at end of period	14,693			19,016
Total goodwill and intangible assets at end of period	$	130,247		$	134,570

The following table provides the estimated future amortization expense of core deposit intangibles for the remaining nine months ending December 31, 2013 and the succeeding four years:

	Amount
	(in thousands)
Year ending December 31,
2013	$	2,936
2014	3,397
2015	2,645
2016	2,183
2017	1,627

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Fair Value Accounting and Measurement (Quantitative Information About Level 3 Fair Value Measurements) (Details) (Fair Value, Measurements, Nonrecurring [Member], USD $) In Thousands, unless otherwise specified					3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013 Fair Value, Inputs, Level 3 [Member]	Mar. 31, 2012 Fair Value, Inputs, Level 3 [Member]	Mar. 31, 2012 Market Approach Valuation Technique [Member] Impaired Loans [Member] Minimum [Member] Fair Value, Inputs, Level 3 [Member]		Mar. 31, 2012 Market Approach Valuation Technique [Member] Impaired Loans [Member] Maximum [Member] Fair Value, Inputs, Level 3 [Member]		Mar. 31, 2012 Market Approach Valuation Technique [Member] Impaired Loans [Member] Weighted Average [Member] Fair Value, Inputs, Level 3 [Member]		Mar. 31, 2012 Market Approach Valuation Technique [Member] Covered Other Real Estate Owned [Member] Minimum [Member] Fair Value, Inputs, Level 3 [Member]		Mar. 31, 2012 Market Approach Valuation Technique [Member] Covered Other Real Estate Owned [Member] Maximum [Member] Fair Value, Inputs, Level 3 [Member]		Mar. 31, 2012 Market Approach Valuation Technique [Member] Covered Other Real Estate Owned [Member] Weighted Average [Member] Fair Value, Inputs, Level 3 [Member]		Mar. 31, 2013 Noncovered Loans [Member]	Mar. 31, 2012 Noncovered Loans [Member]	Mar. 31, 2013 Noncovered Loans [Member] Fair Value, Inputs, Level 3 [Member]	Mar. 31, 2012 Noncovered Loans [Member] Fair Value, Inputs, Level 3 [Member]	Mar. 31, 2013 Covered Loans [Member]	Mar. 31, 2012 Covered Loans [Member]	Mar. 31, 2013 Covered Loans [Member] Fair Value, Inputs, Level 3 [Member]	Mar. 31, 2012 Covered Loans [Member] Fair Value, Inputs, Level 3 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans	$ 477	$ 12,416	$ 477	$ 12,416
OREO																	1,350	3,510	1,350	3,510	65	1,917	65	1,917
OPPO																		$ 2,334		$ 2,334
Fair Value Inputs, Comparability Adjustments					0.00%	[1]	37.00%	[1]	12.00%	[1]	0.00%	[1]	23.00%	[1]	3.00%	[1]

[1] (1) Discount applied to appraisal value, letter of intent to purchase, or stated value (in the case of accounts receivable and inventory).

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Earnings per Common Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Earnings Per Share [Abstract]
Net Income	$ 12,176	$ 8,902
Less: Earnings allocated to participating securities	(123)	(132)
Earnings allocated to common shareholders, Basic	12,053	8,770
Weighted average common shares outstanding	39,348	39,195
Basic earnings per common share	$ 0.31	$ 0.22
Dilutive effect of equity awards and warrants	3	103
Earnings allocated to common shareholders, Diluted	$ 12,053	$ 8,770
Weighted average diluted common shares outstanding	39,351	39,298
Diluted earnings per common share	$ 0.31	$ 0.22
Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive.	9	46

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Fair Value Accounting and Measurement (Financial Assets Accounted For Fair Value On Nonrecurring Basis) (Details) (Fair Value, Measurements, Nonrecurring [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	$ 477	$ 12,416
Fair Value, Option, Changes in Fair Value, Gain (Loss)	(268)	(7,328)
Assets, Fair Value Disclosure	1,892	20,177
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Assets, Fair Value Disclosure	0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Assets, Fair Value Disclosure	0	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	477	12,416
Assets, Fair Value Disclosure	1,892	20,177
Impaired Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Option, Changes in Fair Value, Gain (Loss)	(102)	(2,881)
Covered Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	65	1,917
Covered Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	0	0
Covered Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	0	0
Covered Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	65	1,917
Covered Loans [Member] | Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Option, Changes in Fair Value, Gain (Loss)	(65)	(767)
Noncovered Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	1,350	3,510
OPPO		2,334
Noncovered Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	0	0
OPPO		0
Noncovered Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	0	0
OPPO		0
Noncovered Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	1,350	3,510
OPPO		2,334
Noncovered Loans [Member] | Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Option, Changes in Fair Value, Gain (Loss)	(101)	(1,730)
Noncovered Loans [Member] | Other Personal Property Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Option, Changes in Fair Value, Gain (Loss)		$ (1,950)

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Securities (Schedule of Contractual Maturities of Investment Securities Available for Sale) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013
Available-for-sale Securities [Abstract]
Due within one year, Amortized Cost	$ 17,771
Due after one year through five years, Amortized Cost	158,054
Due after five years through ten years, Amortized Cost	244,429
Due after ten years, Amortized Cost	560,497
No stated maturity date, Amortized Cost Basis	3,324
Total investment securities available-for-sale, Amortized Cost	984,075
Due within one year, Fair Value	18,025
Due after one year through five years, Fair Value	161,996
Due after five years through ten years, Fair Value	249,097
Due after ten years, Fair Value	579,677
No stated maturity date, Fair Value	3,367
Total investment securities available-for-sale, Fair Value	$ 1,012,162

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Covered Assets and FDIC Loss-sharing Asset (Changes in Accretable Yield for Acquired Loans) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Covered Assets And FDIC Loss Sharing Asset
Balance at beginning of period	$ 166,888	$ 259,669
Accretion	(14,477)	(27,658)
Disposals	(774)	(1,799)
Reclassifications (to) from nonaccretable difference	7,149	9,465
Balance at end of period	$ 158,786	$ 239,677

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Earnings per Common Share

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings per Common Share

The Company applies the two-class method of computing basic and diluted EPS. Under the two-class method, EPS is determined for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. The Company grants restricted shares under share-based compensation plans that qualify as participating securities.

The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2013 and 2012:

	Three Months Ended
	March 31,
	2013			2012
	(in thousands except per share)
Basic EPS:
Net income	$	12,176		$	8,902
Less: Earnings allocated to participating securities	(123		)	(132		)
Earnings allocated to common shareholders	$	12,053		$	8,770
Weighted average common shares outstanding	39,348			39,195
Basic earnings per common share	$	0.31		$	0.22
Diluted EPS:
Earnings allocated to common shareholders	$	12,053		$	8,770
Weighted average common shares outstanding	39,348			39,195
Dilutive effect of equity awards	3			103
Weighted average diluted common shares outstanding	39,351			39,298
Diluted earnings per common share	$	0.31		$	0.22
Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive	9			46

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Changes in Noncovered Other Real Estate Owned (Tables)

3 Months Ended

Mar. 31, 2013

Other Real Estate, Foreclosed Assets, and Repossessed Assets [Abstract]

Summary of Noncovered Other Real Estate Owned

The following tables set forth activity in noncovered OREO for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Noncovered OREO:
Balance at beginning of period	$	10,676		$	22,893
Transfers in, net of write-downs ($32 and $118, respectively)	2,709			3,803
OREO improvements	—			11
Additional OREO write-downs	(93		)	(1,722		)
Proceeds from sale of OREO property	(1,565		)	(7,829		)
Gain (loss) on sale of OREO, net	189			(412		)
Total noncovered OREO at end of period	$	11,916		$	16,744

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Covered Assets and FDIC Loss-sharing Asset (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Amount of Estimated Clawback Liability	$ 3,800,000
Payment Of Clawback If Losses Less Than Stated Levels, Period After Acquisition	10 years 45 days
Provision for loan and lease losses	(20,000)	20,185,000
Federal deposit insurance corporation loss-sharing indemnified assets	75,500,000
Federal deposit insurance corporation loss-sharing indemnified assets receivable	7,600,000
FDIC Loss-sharing Asset, Period Increase (Decrease)	784,000
Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Percentage of loss shared by FDIC	80.00%
FDIC Percentage Of Loss Recoveries	80.00%
Percentage of loss shared by FDIC When Loss Share Thresholds Met	95.00%
Percentage Of Loss Recoveries Shared By FDIC When Loss Share Thresholds Met	95.00%
Provision for loan and lease losses	980,000	15,685,000
Impairment expenses	1,300,000
Negative provision to adjust allowance for loss	$ 300,000
Covered Loans [Member] | Maximum [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loss Sharing Agreement Effective Years	10 years
Loss Recovery Provision Effective Years	10 years
Covered Loans [Member] | Minimum [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loss Sharing Agreement Effective Years	5 years
Loss Recovery Provision Effective Years	8 years

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Noncovered Loans (Analysis of the Aged Loan Portfolio) (Details) (Noncovered Loans [Member], USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	$ 2,573,028	$ 2,476,797
30 - 59 Days Past Due	11,754	9,168
60 - 89 Days Past Due	3,544	2,350
Total Past Due	15,298	11,518
Nonaccrual Loans	32,886	37,395
Loans Receivable, Net	2,621,212	2,525,710
Commercial Portfolio Segment [Member] | Secured Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	1,142,942	1,091,770
30 - 59 Days Past Due	3,739	4,259
60 - 89 Days Past Due	1,154	1,485
Total Past Due	4,893	5,744
Nonaccrual Loans	9,383	9,037
Loans Receivable, Net	1,157,218	1,106,551
Commercial Portfolio Segment [Member] | Unsecured Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	43,918	44,817
30 - 59 Days Past Due	112	252
60 - 89 Days Past Due	164	12
Total Past Due	276	264
Nonaccrual Loans	121	262
Loans Receivable, Net	44,315	45,343
Real Estate Portfolio Segment [Member] | One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	41,330	41,508
30 - 59 Days Past Due	849	193
60 - 89 Days Past Due	61	142
Total Past Due	910	335
Nonaccrual Loans	1,684	2,349
Loans Receivable, Net	43,924	44,192
Real Estate Portfolio Segment [Member] | Commercial Land [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	43,785	42,818
30 - 59 Days Past Due	1,006	311
60 - 89 Days Past Due	0	122
Total Past Due	1,006	433
Nonaccrual Loans	3,347	4,076
Loans Receivable, Net	48,138	47,327
Real Estate Portfolio Segment [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	645,058	603,339
30 - 59 Days Past Due	2,434	2,726
60 - 89 Days Past Due	0	227
Total Past Due	2,434	2,953
Nonaccrual Loans	8,230	8,520
Loans Receivable, Net	655,722	614,812
Real Estate Portfolio Segment [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	389,803	387,525
30 - 59 Days Past Due	2,525	1,040
60 - 89 Days Past Due	1,621	0
Total Past Due	4,146	1,040
Nonaccrual Loans	5,825	6,608
Loans Receivable, Net	399,774	395,173
Real Estate Construction Portfolio Segment [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	24,479	28,342
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
Total Past Due	0	0
Nonaccrual Loans	0	0
Loans Receivable, Net	24,479	28,342
Real Estate Construction Portfolio Segment [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	42,192	36,211
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
Total Past Due	0	0
Nonaccrual Loans	0	0
Loans Receivable, Net	42,192	36,211
Real Estate Construction Portfolio Segment [Member] | Land and Acquisition [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	18,330	15,412
30 - 59 Days Past Due	204	0
60 - 89 Days Past Due	314	0
Total Past Due	518	0
Nonaccrual Loans	2,646	3,084
Loans Receivable, Net	21,494	18,496
Real Estate Construction Portfolio Segment [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	30,768	29,848
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
Total Past Due	0	0
Nonaccrual Loans	388	1,816
Loans Receivable, Net	31,156	31,664
Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	150,423	155,207
30 - 59 Days Past Due	885	387
60 - 89 Days Past Due	230	362
Total Past Due	1,115	749
Nonaccrual Loans	1,262	1,643
Loans Receivable, Net	$ 152,800	$ 157,599

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Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Interest Income
Loans	$ 48,028	$ 61,777
Taxable securities	4,234	5,245
Tax-exempt securities	2,298	2,525
Federal funds sold and deposits in banks	201	165
Total interest income	54,761	69,712
Interest Expense
Deposits	1,089	1,779
Federal Home Loan Bank advances	71	750
Other borrowings	119	120
Total interest expense	1,279	2,649
Net Interest Income	53,482	67,063
Provision for loan and lease losses	(20)	20,185
Net interest income after provision for loan and lease losses	53,502	46,878
Noninterest Income (Loss)
Service charges and other fees	7,594	7,177
Merchant services fees	1,851	2,018
Investment securities gains, net	370	62
Bank owned life insurance	698	711
Change in FDIC loss sharing asset	(10,483)	(1,668)
Other	1,628	1,274
Total noninterest income (loss)	1,658	9,574
Noninterest Expense
Compensation and employee benefits	21,653	21,995
Occupancy	4,753	5,333
Merchant processing	857	873
Advertising and promotion	870	882
Data processing and communications	2,580	2,213
Legal and professional fees	2,050	1,609
Taxes, licenses and fees	1,387	1,355
Regulatory premiums	857	860
Net cost (benefit) of operation of other real estate owned	(2,501)	910
Amortization of intangibles	1,029	1,150
Other	4,514	7,172
Total noninterest expense	38,049	44,352
Income before income taxes	17,111	12,100
Income tax provision	4,935	3,198
Net Income	12,176	8,902
Earnings per common share
Basic ($ per share)	$ 0.31	$ 0.22
Diluted ($ per share)	$ 0.31	$ 0.22
Dividends paid per common share	$ 0.10	$ 0.37
Weighted average number of common shares outstanding	39,348	39,195
Weighted average number of diluted common shares outstanding	39,351	39,298
Noncovered Loans [Member]
Interest Expense
Provision for loan and lease losses	(1,000)	4,500
Covered Loans [Member]
Interest Expense
Provision for loan and lease losses	$ 980	$ 15,685

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Accounting Pronouncements Recently Issued

3 Months Ended

Mar. 31, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Accounting Pronouncements Recently Issued

Accounting Pronouncements Recently Issued

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The Update requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component and to present either on the face of the statement where net income is presented, or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2012. The Company adopted the ASU 2013-02 reporting requirements during the current period with no impact to the Company's financial condition or results of operations. See Note 11 to the Consolidated Financial Statements of this report for new disclosures related to accumulated other comprehensive income.

In October 2012, the FASB issued ASU 2012-06, Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution. ASU 2012-06 clarifies that when a reporting entity recognizes an indemnification asset as a result of a government-assisted acquisition of a financial institution and there is a subsequent change in the amount of cash flows expected to be collected on the indemnified asset, the reporting entity should subsequently measure the indemnification asset on the same basis as the underlying loans by taking into account the contractual limitations of the Loss-Sharing Agreement ("LSA"). For amortization of changes in value, the reporting entity should use the term of the indemnification agreement if it is shorter than the term of the acquired loans. ASU 2012-06 is effective for interim and annual periods beginning after December 15, 2012. The Company adopted the ASU as of January 1, 2013. As a result of the adoption of the ASU, an additional $2.5 million of indemnification asset amortization was recorded during the period, resulting in a reduction of $1.6 million in net income and $0.04 in earnings per share.

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Shareholders' Equity (Details) (USD $)	0 Months Ended
	Jan. 24, 2013	Apr. 24, 2013 Dividend Declared [Member]
Subsequent Event [Line Items]
Declared quarterly cash dividend	$ 0.10	$ 0.1

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Covered Assets and FDIC Loss-sharing Asset (Tables)

3 Months Ended

Mar. 31, 2013

Covered Assets And FDIC Loss Sharing Asset [Line Items]

Analysis and Allowance for Losses on Covered Loans

The following is an analysis of our covered loans, net of related allowance for losses as of March 31, 2013 and December 31, 2012:

	March 31, 2013		December 31, 2012
Covered loans:	(dollars in thousands)
Commercial business	$	113,876	$	125,373
Real estate:
One-to-four family residential	49,639		57,150
Commercial and multifamily residential	220,037		233,106
Total real estate	269,676		290,256
Real estate construction:
One-to-four family residential	22,165		25,398
Commercial and multifamily residential	14,032		15,251
Total real estate construction	36,197		40,649
Consumer	42,103		44,516
Subtotal of covered loans	461,852		500,794
Less:
Valuation discount resulting from acquisition accounting	69,150		79,401
Allowance for loan losses	29,489		30,056
Covered loans, net of allowance for loan losses	$	363,213	$	391,337

Changes in Accretable Yield for Acquired Loans

The following table shows the changes in accretable yield for acquired loans for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Balance at beginning of period	$	166,888		$	259,669
Accretion	(14,477		)	(27,658		)
Disposals	(774		)	(1,799		)
Reclassifications from nonaccretable difference	7,149			9,465
Balance at end of period	$	158,786		$	239,677

Financing Receivable Credit Quality Indicators

The following is an analysis of the credit quality of our covered loan portfolio as of March 31, 2013 and 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
March 31, 2013	(in thousands)
Covered loans:
Commercial business:
Secured	$	71,555	$	1,672	$	34,476	$	—	$	—	$	107,703
Unsecured	4,502		—		1,671		—		—		6,173
Real estate:
One-to-four family residential	40,030		331		9,278		—		—		49,639
Commercial and multifamily residential:
Commercial land	16,047		—		9,456		—		—		25,503
Income property	82,120		3,232		16,189		—		—		101,541
Owner occupied	76,454		398		16,141		—		—		92,993
Real estate construction:
One-to-four family residential:
Land and acquisition	6,449		2,796		4,892		—		—		14,137
Residential construction	2,812		—		5,216		—		—		8,028
Commercial and multifamily residential:
Income property	4,374		—		7,079		—		—		11,453
Owner occupied	1,099		—		1,480		—		—		2,579
Consumer	37,255		419		4,402		27		—		42,103
Total	$	342,697	$	8,848	$	110,280	$	27	$	—	461,852
Less:
Valuation discount resulting from acquisition accounting											69,150
Allowance for loan losses											29,489
Covered loans, net											$	363,213

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2012	(in thousands)
Covered loans:
Commercial business:
Secured	$	71,621	$	1,823	$	45,150	$	—	$	—	$	118,594
Unsecured	4,988		—		1,791		—		—		6,779
Real estate:
One-to-four family residential	44,782		1,344		11,024		—		—		57,150
Commercial and multifamily residential:
Commercial land	16,336		—		10,292		—		—		26,628
Income property	81,205		864		23,315		—		—		105,384
Owner occupied	82,222		3,318		15,554		—		—		101,094
Real estate construction:
One-to-four family residential:
Land and acquisition	4,817		3,273		5,743		—		—		13,833
Residential construction	6,050		—		5,515		—		—		11,565
Commercial and multifamily residential:
Income property	4,419		—		7,901		—		—		12,320
Owner occupied	1,107		—		1,824		—		—		2,931
Consumer	38,973		381		5,162		—		—		44,516
Total	$	356,520	$	11,003	$	133,271	$	—	$	—	500,794
Less:
Valuation discount resulting from acquisition accounting											79,401
Allowance for loan losses											30,056
Covered loans, net											$	391,337

Covered OREO at Carrying Value

The following table sets forth activity in covered OREO at carrying value for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Covered OREO:
Balance at beginning of period	$	16,311		$	28,126
Transfers in	1,405			2,468
Additional OREO write-downs	(65		)	(1,505		)
Proceeds from sale of OREO property	(6,438		)	(8,025		)
Net gain on sale of OREO	2,598			3,366
Total covered OREO at end of period	$	13,811		$	24,430

FDIC Loss-sharing Asset

The following table shows a detailed analysis of the FDIC loss-sharing asset for the three months ended March 31, 2013 and 2012:

	Three Months Ended March 31,
	2013			2012 (1)
	(in thousands)
Balance at beginning of period	$	96,354		$	175,071
Adjustments not reflected in income
Cash received from the FDIC	(3,119		)	(14,804		)
FDIC reimbursable losses, net	363			462
Adjustments reflected in income
Amortization, net	(9,779		)	(13,873		)
Loan impairment	784			12,548
Sale of other real estate	(1,346		)	(2,067		)
Write-downs of other real estate	52			1,629
Other	(194		)	95
Balance at end of period	$	83,115		$	159,061

__________

(1) Reclassified to conform to the current period’s presentation.

Covered Loans [Member]

Covered Assets And FDIC Loss Sharing Asset [Line Items]

Allowance for Credit Losses on Financing Receivables

The changes in the ALLL for covered loans for the three months ended March 31, 2013 and 2012 are summarized as follows:

	Three Months Ended March 31,
	2013			2012
	(in thousands)
Balance at beginning of period	$	30,056		$	4,944
Loans charged off	(2,382		)	(562		)
Recoveries	835			437
Provision charged to expense	980			15,685
Balance at end of period	$	29,489		$	20,504

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Noncovered Loans (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2013 contract	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Loans to related parties	$ 13,700,000	$ 14,200,000
Advances on related party loans	475,000
Repayments on related party loans	948,000
Additional funds committed to lend on loans classified as TDR	1,800,000	236,000
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0
Loans Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	463,700,000	443,400,000
Federal Reserve Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	$ 17,400,000	$ 13,800,000

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Fair Value Accounting and Measurement

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Accounting and Measurement

Fair Value Accounting and Measurement

The Fair Value Measurements and Disclosures topic of the FASB ASC defines fair value, establishes a consistent framework for measuring fair value and expands disclosure requirements about fair value. We hold fixed and variable rate interest-bearing securities, investments in marketable equity securities and certain other financial instruments, which are carried at fair value. Fair value is determined based upon quoted prices when available or through the use of alternative approaches, such as matrix or model pricing, when market quotes are not readily accessible or available.

The valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our own market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1 – Quoted prices for identical instruments in active markets that are accessible at the measurement date.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.

Fair values are determined as follows:

Securities at fair value are priced using a combination of market activity, industry recognized information sources, yield curves, discounted cash flow models and other factors. These fair value calculations are considered a Level 2 input method under the provisions of the Fair Value Measurements and Disclosures topic of the FASB ASC for all securities other than U.S. Treasury notes, which are considered a Level 1 input method.

Interest rate contract positions are valued in models, which use as their basis, readily observable market parameters and are classified within Level 2 of the valuation hierarchy.

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at March 31, 2013 and December 31, 2012 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

	Fair value		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2		Level 3
March 31, 2013	(in thousands)
Assets
Securities available for sale
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations	$	511,955	$	—	$	511,955	$	—
State and municipal debt securities	275,605		—		275,605		—
U.S. government agency and government-sponsored enterprise securities	201,527		—		201,527		—
U.S. government securities	19,706		19,706		—		—
Other securities	3,369		—		3,369		—
Total securities available for sale	$	1,012,162	$	19,706	$	992,456	$	—
Other assets (Interest rate contracts)	$	13,456	$	—	$	13,456	$	—
Liabilities
Other liabilities (Interest rate contracts)	$	13,456	$	—	$	13,456	$	—

	Fair value		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2		Level 3
December 31, 2012	(in thousands)
Assets
Securities available for sale
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations	$	572,369	$	—	$	572,369	$	—
State and municipal debt securities	285,575		—		285,575		—
U.S. government agency and government-sponsored enterprise securities	120,501		—		120,501		—
U.S. government securities	19,828		19,828		—		—
Other securities	3,392		—		3,392		—
Total securities available for sale	$	1,001,665	$	19,828	$	981,837	$	—
Other assets (Interest rate contracts)	$	14,921	$	—	$	14,921	$	—
Liabilities
Other liabilities (Interest rate contracts)	$	14,921	$	—	$	14,921	$	—

There were no transfers between Level 1 and Level 2 of the valuation hierarchy during the three month periods ended March 31, 2013 and 2012. The Company recognizes transfers between levels of the valuation hierarchy based on the valuation level at the end of the reporting period.

Nonrecurring Measurements

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as loans measured for impairment and OREO. The following methods were used to estimate the fair value of each such class of financial instrument:

Impaired loans—A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due (both interest and principal) according to the contractual terms of the loan agreement. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, a loan’s observable market price, or the fair market value of the collateral if the loan is a collateral-dependent loan. Generally, the Company utilizes the fair market value of the collateral to measure impairment. The impairment evaluations are performed in conjunction with the ALLL process on a quarterly basis by officers in the Special Credits group, which reports to the Chief Credit Officer. The Real Estate Appraisal Services Department ("REASD"), which also reports to the Chief Credit Officer, is responsible for obtaining appraisals from third-parties or performing internal evaluations. If an appraisal is obtained from a third-party, the REASD reviews the appraisal to evaluate the adequacy of the appraisal report, including its scope, methods, accuracy, and reasonableness.

Other real estate owned and other personal property owned ("OPPO")—OREO and OPPO are real and personal property that the Bank has taken ownership of in partial or full satisfaction of a loan or loans. OREO and OPPO are generally measured based on the item's fair market value as indicated by an appraisal or a letter of intent to purchase. OREO and OPPO are recorded at the lower of carrying amount or fair value less estimated costs to sell. This amount becomes the property’s new basis. Any write-downs based on the property fair value less estimated cost to sell at the date of acquisition are charged to the allowance for loan and lease losses. Management periodically reviews OREO and OPPO in an effort to ensure the property is carried at the lower of its new basis or fair value, net of estimated costs to sell. Any write-downs subsequent to acquisition are charged to earnings. The initial and subsequent write-down evaluations are performed by officers in the Special Credits group, which reports to the Chief Credit Officer. The REASD obtains appraisals from third-parties for OREO and OPPO and performs internal evaluations. If an appraisal is obtained from a third-party, the REASD reviews the appraisal to evaluate the adequacy of the appraisal report, including its scope, methods, accuracy, and reasonableness.

The following tables set forth the Company's assets that were measured using fair value estimates on a nonrecurring basis at March 31, 2013 and 2012.

	Fair value at March 31, 2013		Fair Value Measurements at Reporting Date Using						Losses During the Three Months Ended March 31, 2013
			Level 1		Level 2		Level 3
	(in thousands)
Impaired loans	$	477	$	—	$	—	$	477	$	102
Noncovered OREO	1,350		—		—		1,350		101
Covered OREO	65		—		—		65		65
	$	1,892	$	—	$	—	$	1,892	$	268

	Fair value  at March 31, 2012		Fair Value Measurements at Reporting Date Using						Losses During the Three Months Ended March 31, 2012
			Level 1		Level 2		Level 3
	(in thousands)
Impaired loans	$	12,416	$	—	$	—	$	12,416	$	2,881
Noncovered OREO	3,510		—		—		3,510		1,730
Covered OREO	1,917		—		—		1,917		767
Noncovered OPPO	2,334		—		—		2,334		1,950
	$	20,177	$	—	$	—	$	20,177	$	7,328

The losses on impaired loans disclosed above represent the amount of the specific reserve and/or charge-offs during the period applicable to loans held at period end. The amount of the specific reserve is included in the allowance for loan and lease losses. The losses on OREO and OPPO disclosed above represent the write-downs taken at foreclosure that were charged to the allowance for loan and lease losses, as well as subsequent write-downs from updated appraisals that were charged to earnings.

Quantitative information about Level 3 fair value measurements

The range and weighted-average of the significant unobservable inputs used to fair value our Level 3 nonrecurring assets, along with the valuation techniques used, are shown in the following table:

	Fair value at March 31, 2013		Valuation Technique	Unobservable Input	Range (Weighted Average) (1)
	(dollars in thousands)
Impaired loans	$	477	Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Noncovered OREO	1,350		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Covered OREO	65		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
(1) Discount applied to appraisal value, letter of intent to purchase, or stated value (in the case of accounts receivable and inventory).
(2) Quantitative disclosures are not provided for impaired loans, noncovered OREO, and covered OREO because there were no adjustments made to the appraisal value during the current period.

	Fair value  at March 31, 2012		Valuation Technique	Unobservable Input	Range (Weighted Average) (1)
	(dollars in thousands)
Impaired loans	$	12,416	Fair Market Value of Collateral	Adjustment to Appraisal Value	0% - 37% (12%)
Noncovered OREO	3,510		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Covered OREO	1,917		Fair Market Value of Collateral	Adjustment to Appraisal Value	0% - 23% (3%)
Noncovered OPPO	2,334		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
(1) Discount applied to appraisal value, letter of intent to purchase, or stated value (in the case of accounts receivable and inventory).
(2) Quantitative disclosures are not provided for noncovered OREO and noncovered OPPO because there were no adjustments made to the appraisal value during the current period.

Fair value of financial instruments

Because broadly traded markets do not exist for most of the Company’s financial instruments, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do not include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and may not be realized in an actual sale or immediate settlement of the instruments. There may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein do not represent, and should not be construed to represent, the underlying value of the Company.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value:

Cash and due from banks and interest-earning deposits with banks—The fair value of financial instruments that are short-term or reprice frequently and that have little or no risk are considered to have a fair value that approximates carrying value (Level 1).

Securities available for sale—Securities at fair value, other than U.S. Treasury Notes, are priced using a combination of market activity, industry recognized information sources, yield curves, discounted cash flow models and other factors (Level 2). U.S. Treasury Notes are priced using quotes in active markets (Level 1).

Federal Home Loan Bank stock—The fair value is based upon the par value of the stock which equates to its carrying value (Level 2).

Loans—Loans are not recorded at fair value on a recurring basis. Nonrecurring fair value adjustments are periodically recorded on impaired loans that are measured for impairment based on the fair value of collateral. For most performing loans, fair value is estimated using expected duration and lending rates that would have been offered on March 31, 2013 or December 31, 2012, for loans which mirror the attributes of the loans with similar rate structures and average maturities. The fair values resulting from these calculations are reduced by an amount representing the change in estimated fair value attributable to changes in borrowers’ credit quality since the loans were originated. For nonperforming loans, fair value is estimated by applying a valuation discount based upon loan sales data from the FDIC. For covered loans, fair value is estimated by discounting the expected future cash flows using a lending rate that would have been offered on March 31, 2013 (Level 3).

FDIC loss-sharing asset —The fair value of the FDIC loss-sharing asset is estimated based on discounting the expected future cash flows using an estimated market rate (Level 3).

Interest rate contracts—Interest rate swap positions are valued in models, which use as their basis, readily observable market parameters (Level 2).

Deposits—For deposits with no contractual maturity, the fair value is equal to the carrying value (Level 1). The fair value of fixed maturity deposits is based on discounted cash flows using the difference between the deposit rate and current market rates for deposits of similar remaining maturities (Level 2).

FHLB advances—The fair value of Federal Home Loan Bank of Seattle (the “FHLB”) advances is estimated based on discounting the future cash flows using the market rate currently offered (Level 2).

Repurchase Agreements—The fair value of securities sold under agreement to repurchase is estimated based on discounting the future cash flows using the market rate currently offered (Level 2).

Other Financial Instruments—The majority of our commitments to extend credit and standby letters of credit carry current market interest rates if converted to loans, as such, carrying value is assumed to equal fair value.

The following tables summarize carrying amounts and estimated fair values of selected financial instruments as well as assumptions used by the Company in estimating fair value at March 31, 2013 and December 31, 2012:

	March 31, 2013
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
	(in thousands)
Assets
Cash and due from banks	$	91,889	$	91,889	$	91,889	$	—	$	—
Interest-earning deposits with banks	356,056		356,056		356,056		—		—
Securities available for sale	1,012,162		1,012,162		19,706		992,456		—
FHLB stock	21,621		21,621		—		21,621		—
Loans held for sale	888		888		—		888		—
Loans	2,933,306		2,978,867		—		—		2,978,867
FDIC loss-sharing asset	83,115		25,062		—		—		25,062
Interest rate contracts	13,456		13,456		—		13,456		—
Liabilities
Deposits	$	4,046,539	$	4,047,346	$	3,573,755	$	473,591	$	—
FHLB Advances	6,634		6,237		—		6,237		—
Repurchase agreements	25,000		26,396		—		26,396		—
Interest rate contracts	13,456		13,456		—		13,456		—

	December 31, 2012
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
	(in thousands)
Assets
Cash and due from banks	$	124,573	$	124,573	$	124,573	$	—	$	—
Interest-earning deposits with banks	389,353		389,353		389,353		—		—
Securities available for sale	1,001,665		1,001,665		19,828		981,837		—
FHLB stock	21,819		21,819		—		21,819		—
Loans held for sale	2,563		2,563		—		2,563		—
Loans	2,864,803		2,944,317		—		—		2,944,317
FDIC loss-sharing asset	96,354		26,543		—		—		26,543
Interest rate contracts	14,921		14,921		—		14,921		—
Liabilities
Deposits	$	4,042,085	$	4,043,221	$	3,549,821	$	493,400	$	—
FHLB Advances	6,644		5,894		—		5,894		—
Repurchase agreements	25,000		26,464		—		26,464		—
Interest rate contracts	14,921		14,921		—		14,921		—