Business Combinations

12 Months Ended

Dec. 31, 2014

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Business Combinations

Intermountain Community Bancorp

On November 1, 2014, the Company completed its acquisition of Intermountain Community Bancorp and its wholly-owned banking subsidiary Panhandle State Bank ("Intermountain"). The Company acquired 100% of the voting equity interests of Intermountain. The primary reason for the acquisition was to expand the Company's geographic footprint into the state of Idaho, consistent with its ongoing growth strategy.

 The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting (formerly the purchase method). The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the November 1, 2014 acquisition date. Initial accounting for deferred taxes was incomplete as of December 31, 2014. The amount currently recognized in the financial statements has been determined provisionally as the final Intermountain Community Bancorp tax return has not yet been completed. The application of the acquisition method of accounting resulted in the recognition of goodwill of $38.6 million and a core deposit intangible of $10.9 million, or 1.75% of core deposits. The goodwill represents the excess purchase price over the estimated fair value of the net assets acquired. The goodwill is not deductible for income tax purposes.

The table below summarizes the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed:

	November 1, 2014
	(in thousands)
Purchase price as of November 1, 2014	$	131,935
Recognized amounts of identifiable assets acquired and (liabilities assumed), at fair value:
Cash and cash equivalents	$	47,283
Investment securities	299,458
Federal Home Loan Bank stock	2,124
Acquired loans	502,595
Interest receivable	4,656
Premises and equipment	20,696
Other real estate owned	2,752
Core deposit intangible	10,900
Other assets	35,353
Deposits	(736,795		)
Other borrowings	(22,904		)
Securities sold under agreements to repurchase	(59,043		)
Other liabilities	(13,725		)
Total fair value of identifiable net assets	93,350
Goodwill	$	38,585

See Note 10, Goodwill and Other Intangible Assets, for further discussion of the accounting for goodwill and other intangible assets.

The operating results of the Company include the operating results produced by the acquired assets and assumed liabilities for the period November 1, 2014 to December 31, 2014. Disclosure of the amount of Intermountain’s revenue and net income (excluding integration costs) included in Columbia’s consolidated income statement is impracticable due to the integration of the operations and accounting for this acquisition.

The following table presents certain unaudited pro forma information for illustrative purposes only, for the years ended December 31, 2014 and 2013 as if Intermountain had been acquired on January 1, 2013. This unaudited estimated pro forma financial information combines the historical results of Intermountain with the Company’s consolidated historical results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. The pro forma information is not indicative of what would have occurred had the acquisition occurred on January 1, 2013. In particular, no adjustments have been made to eliminate the impact of other-than-temporary impairment losses and losses recognized on the sale of securities that may not have been necessary had the investment securities been recorded at fair value as of January 1, 2013. The unaudited pro forma information does not consider any changes to the provision for credit losses resulting from recording loan assets at fair value. Additionally, Columbia expects to achieve further operating cost savings and other business synergies, including revenue growth, as a result of the acquisition which are not reflected in the pro forma amounts that follow. As a result, actual amounts would have differed from the unaudited pro forma information presented.

	Unaudited Pro Forma
	Years Ended December 31,
	2014		2013
	(in thousands except per share)
Total revenues (net interest income plus noninterest income)	$	397,152	$	360,655
Net income	$	85,939	$	72,587
Earnings per share - basic	$	1.56	$	1.32
Earnings per share - diluted	$	1.55	$	1.31

The following table shows the impact of the acquisition-related expenses related to the acquisition of Intermountain for the periods indicated to the various components of noninterest expense:

	Year ended December 31,
	2014
	(in thousands)
Noninterest Expense
Compensation and employee benefits	$	2,077
Occupancy	44
Advertising and promotion	464
Data processing and communications	—
Legal and professional fees	2,114
Other	197
Total impact of acquisition-related costs to noninterest expense	$	4,896

West Coast Bancorp

On April 1, 2013, the Company completed its acquisition of West Coast Bancorp (“West Coast”). The Company paid $540.8 million in total consideration to acquire 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 fair value of the net assets acquired totaled $312.4 million, including $1.88 billion of deposits, $1.41 billion of loans and $15.3 million of other intangible assets. Goodwill of $228.4 million was recorded as part of the acquisition. The goodwill is not deductible for income tax purposes.

The operating results of the Company include the operating results produced by the acquired assets and assumed liabilities for the period April 1, 2013 to December 31, 2014. Disclosure of the amount of West Coast’s revenue and net income (excluding integration costs) included in Columbia’s consolidated income statement is impracticable due to the integration of the operations and accounting for this acquisition.

The following table presents certain unaudited pro forma information for illustrative purposes only, for the years ended December 31, 2013 and 2012 as if West Coast had been acquired on January 1, 2012. The unaudited estimated pro forma information combines the historical results of West Coast with the Company’s consolidated historical results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. The pro forma information is not indicative of what would have occurred had the acquisition occurred on January 1, 2012. In particular, no adjustments have been made to eliminate the impact of other-than-temporary impairment losses and losses recognized on the sale of securities that may not have been necessary had the investment securities been recorded at fair value on January 1, 2012. The unaudited pro forma information does not consider any changes to the provision for credit losses resulting from recording loan assets at fair value. Additionally, Columbia expects to achieve further operating cost savings and other business synergies, including revenue growth, as a result of the acquisition which are not reflected in the pro forma amounts that follow. As a result, actual amounts would have differed from the unaudited pro forma information presented.

	Unaudited Pro Forma
	Years Ended December 31,
	2013		2012
	(in thousands except per share)
Total revenues (net interest income plus noninterest income)	$	337,712	$	420,167
Net income	$	76,496	$	91,261
Earnings per share - basic	$	1.50	$	1.79
Earnings per share - diluted	$	1.46	$	1.74

The following table shows the impact of the acquisition-related expenses related to the acquisition of West Coast for the periods indicated to the various components of noninterest expense:

	Years ended December 31,
	2014		2013		2012
	(in thousands)
Noninterest Expense
Compensation and employee benefits	$	798	$	8,440	$	—
Occupancy	696		4,684		—
Advertising and promotion	—		877		2
Data processing and communications	684		767		—
Legal and professional fees	383		4,766		1,760
Other	1,975		5,954		18
Total impact of acquisition-related costs to noninterest expense	$	4,536	$	25,488	$	1,780