Document

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

COLUMBIA BANKING SYSTEM, INC.

(Exact name of registrant as specified in its charter)



Washington	0-20288	91-1422237
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Tacoma, WA 98402-2156

(Address of principal executive offices and zip code)

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, No Par Value	COLB	NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Items to be Included in this Report

Item 2.02 Results of Operations and Financial Condition

Item 8.01 Other Events

The following information is furnished pursuant to Item 2.02, "Results of Operations and Financial Condition" and Item 8.01 "Other Events."

On October 24, 2019, Columbia Banking System, Inc. issued a press release reporting its financial results for the quarter ended September 30, 2019 and a quarterly cash dividend of $0.28 per share. The dividend will be paid on November 20, 2019 to shareholders of record at the close of business on November 6, 2019. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference in its entirety.

Item 9.01 Financial Statements and Exhibits

(d) The following exhibit is being furnished herewith:

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



		COLUMBIA BANKING SYSTEM, INC.

Date:	October 24, 2019	/s/ HADLEY S. ROBBINS
		Hadley S. Robbins
		President and Chief Executive Officer

FOR IMMEDIATE RELEASE

Columbia Banking System Announces Third Quarter 2019 Results,

and Quarterly Cash Dividend

Quarterly net income of $50.7 million and diluted earnings per share of $0.70, inclusive of a $4.7 million gain, net of tax, from the sale-leaseback of owned real estate

Net loans increased $109.4 million, or 5.1% on an annualized basis from loan production of $383.0 million

Nonperforming assets to period end assets ratio improved for the seventh consecutive quarter to 0.27%

Repurchased 676 thousand shares of common stock during the quarter

Regular cash dividend declared of $0.28 per share

TACOMA, Washington, October 24, 2019 -- Hadley Robbins, President and Chief Executive Officer of Columbia Banking System and Columbia Bank (NASDAQ: COLB) (“Columbia”), said today upon the release of Columbia’s third quarter 2019 earnings, “Third quarter results reflected our focus on executing on our fundamentals. We responsibly built loan totals, increased deposits, and improved our credit quality metrics. Operating expenses were well controlled and meaningful progress was made in moving a number of digital initiatives to completion. Net income for the quarter was one of our strongest at $50.7 million and is a tribute to the dedication and hard work of the Columbia Bank team.”

Total assets at September 30, 2019 were $13.76 billion, an increase of $667.0 million from the linked quarter. Loans were $8.76 billion, up $109.4 million, or 5.1% annualized, from June 30, 2019 as a result of loan originations of $383.0 million and increased seasonal line utilization partially offset by payments. Securities available for sale were $3.37 billion at September 30, 2019, an increase of $503.2 million from $2.86 billion at June 30, 2019. Total deposits at September 30, 2019 were $10.86 billion, an increase of $644.1 million from June 30, 2019. Deposit mix remained fairly consistent from June 30, 2019 with 49% noninterest-bearing and 51% interest-bearing. The average cost of total deposits for the quarter was 26 basis points, an increase of 6 basis points from the second quarter of 2019, which was impacted by the increase in public funds. For additional information regarding this calculation, see the “Net Interest Margin” section.

Greg Sigrist, Columbia’s Executive Vice President and Chief Financial Officer, stated, “We selectively increased public funds by approximately $300 million in the third quarter as an alternative funding source, with a corresponding increase in our investment securities, as we expanded our interest rate risk strategy to partially mitigate the impact of further interest rate cuts. Although this did increase our cost of deposits by 6 basis points, our relationship deposit franchise is well intact and continues to benefit from having nearly half of our deposits in noninterest-bearing accounts.”

Net interest income for the third quarter of 2019 was $122.5 million, a decrease of $2.7 million and $346 thousand from the linked quarter and the prior year period, respectively. After taking into consideration the $4.9 million of interest recoveries on nonaccrual loans received in the second quarter of 2019, net interest income was $2.2 million higher than the second quarter of 2019. This increase was due to lower Federal Home Loan Bank (“FHLB”) interest expense and higher interest income on interest earning assets due to higher average volumes, partially offset by higher deposit interest expense due to higher average balances and rates on interest-bearing public funds, excluding certificates of deposit. Net interest income compared to the prior year period was relatively unchanged. The increase in interest income from higher average balances of interest-earning assets in the third quarter of 2019 was offset by higher interest expense from higher average balances of FHLB advances and interest-bearing public funds, excluding certificates of deposit. For additional information regarding net interest income, see the “Net Interest Margin” section and the “Average Balances and Rates” tables.

Noninterest income was $28.0 million for the third quarter of 2019, an increase of $2.4 million and $7.0 million from the second quarter of 2019 and the prior year period, respectively. The linked quarter increase was principally due to a $5.9 million gain from the sale-leaseback of owned real estate during the third quarter of 2019. This gain was partially offset by $3.0 million in bank-owned life insurance (“BOLI”) benefits and a $667 thousand gain on disposal of loans realized during the second quarter of 2019. The increase from the prior year period was primarily due to the previously noted sale-leaseback gain in the third quarter of 2019.

Total noninterest expense for the third quarter of 2019 was $87.1 million, an increase of $348 thousand and $4.2 million from the linked quarter and the prior year period, respectively. The increase in noninterest expense was a result of higher salaries, other compensation and incentive plan expenses, which were partially offset by lower provision for off-balance sheet reserves during the quarter. After removing acquisition-related expenses of $1.1 million from the third quarter of 2018, year over year noninterest expense increased $5.3 million, or 7%. This increase was primarily driven by higher compensation and employee benefits expense, which was partially offset by a decrease in regulatory premium expenses. The Bank’s Federal Deposit Insurance Corporation (“FDIC”) deposit insurance expense was reduced due to the utilization of a portion of our FDIC Small Bank Assessment Credit.

Beginning January 2019, our net interest margin was calculated using the actual number of days on an actual/actual basis. This change was done to provide more meaningful trend information for our net interest margin regardless of the number of days in the period. Prior periods, which were previously reported on a 30/360 basis, have been restated to conform to the current basis.

Columbia’s net interest margin (tax equivalent) for the third quarter of 2019 was 4.14%, a decrease of 26 basis points and 23 basis points from the linked quarter and prior year period, respectively. The decrease in the net interest margin (tax equivalent) compared to the linked quarter was driven by the previously noted $4.9 million, or 17 basis points, of loan interest recoveries received in the second quarter of 2019. The remainder of the decline was largely driven by the net impact of the approximately $300 million increase in securities and public funds as part of the expanded interest rate risk strategy. Additionally, a benefit from deposit inflows was largely offset by lower yields on loans and investments. Further, the decline related to the interest rate environment was offset by changes in the mix and volume of interest-earning assets as well as lower levels of FHLB advances. Compared to the prior year period, the decreased net interest margin (tax equivalent) was driven by higher rates on our deposits and borrowings as well as lower accretion income on acquired loans as reflected in the table below.

Columbia’s operating net interest margin (tax equivalent)⁽²⁾was 4.12% for the third quarter of 2019, which decreased 26 and 22 basis points compared to the linked quarter and the prior year period, respectively. The decreases in the operating net interest margin for the third quarter of 2019 compared to the linked quarter and the prior year quarter were due to the items previously noted in the preceding paragraph, except for the lower accretion income, which is not included in the operating net interest margin.

The following table shows the impact to interest income resulting from income accretion on acquired loan portfolios as well as the net interest margin and operating net interest margin:



	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
	2019			2019			2019			2018			2018			2019			2018
	(dollars in thousands)
Incremental accretion income due to:
Purchased credit impaired loans	$	113		$	579		$	288		$	395		$	585		$	980		$	1,240
Other acquired loans	1,959			2,084			1,747			2,218			2,643			5,790			8,703
Incremental accretion income	$	2,072		$	2,663		$	2,035		$	2,613		$	3,228		$	6,770		$	9,943

Net interest margin (tax equivalent) (1)	4.14		%	4.40		%	4.32		%	4.36		%	4.37		%	4.28		%	4.32		%
Operating net interest margin (tax equivalent) (1)(2)	4.12		%	4.38		%	4.33		%	4.34		%	4.34		%	4.28		%	4.29		%

(1) Beginning January 2019, net interest margin (tax equivalent) and operating net interest margin (tax equivalent) were calculated using the actual number of days on an actual/actual basis. This change was done to provide more meaningful trend information for our net interest margin regardless of the number of days in the period. Prior periods, which were previously reported on a 30/360 basis, have been restated to conform to the current basis.

(2) Operating net interest margin (tax equivalent) is a non-GAAP financial measure. See the section titled “Non-GAAP Financial Measures” in this earnings release for the reconciliation of operating net interest margin (tax equivalent) to net interest margin.

At September 30, 2019, nonperforming assets to total assets were 0.27% compared to 0.31% at June 30, 2019. Total nonperforming assets decreased $2.5 million from the linked quarter due to a decrease in both nonaccrual loans and OREO.

Andy McDonald, Columbia’s Executive Vice President and Chief Credit Officer, commented, “Our credit metrics continue to perform better than our peer group average. This is reflective of the commitment our bankers have to our risk disciplines as well as the diligent efforts of our special assets team. The quarter benefited from $1.8 million in net recoveries which allowed us to keep our credit cost to a minimum.”

The following table sets forth information regarding nonaccrual loans and total nonperforming assets:



	September 30, 2019		June 30, 2019		December 31, 2018
	(in thousands)
Nonaccrual loans:
Commercial business	$	24,408	$	23,997	$	35,513
Real estate:
One-to-four family residential	574		860		1,158
Commercial and multifamily residential	10,083		11,843		14,904
Total real estate	10,657		12,703		16,062
Real estate construction:
One-to-four family residential	—		—		318
Consumer	1,956		2,338		2,949
Total nonaccrual loans	37,021		39,038		54,842
OREO and other personal property owned	625		1,118		6,049
Total nonperforming assets	$	37,646	$	40,156	$	60,891

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



	Three Months Ended									Nine Months Ended
	September 30, 2019			June 30, 2019			September 30, 2018			September 30, 2019			September 30, 2018
	(in thousands)
Beginning balance, loans excluding PCI loans	$	77,248		$	80,029		$	75,368		$	79,758		$	68,739
Beginning balance, PCI loans	3,269			3,245			4,782			3,611			6,907
Beginning balance	80,517			83,274			80,150			83,369			75,646
Charge-offs:
Commercial business	(2,365		)	(4,118		)	(606		)	(7,732		)	(8,858		)
One-to-four family residential real estate	—			—			—			(2		)	—
Commercial and multifamily residential real estate	—			—			—			—			(223		)
One-to-four family residential real estate construction	—			—			—			(170		)	—
Consumer	(285		)	(354		)	(277		)	(1,117		)	(773		)
Purchased credit impaired	(722		)	(815		)	(1,208		)	(2,626		)	(3,786		)
Total charge-offs	(3,372		)	(5,287		)	(2,091		)	(11,647		)	(13,640		)
Recoveries:
Commercial business	358			547			547			1,385			2,892
One-to-four family residential real estate	65			20			21			102			389
Commercial and multifamily residential real estate	184			33			213			248			1,012
One-to-four family residential real estate construction	2,471			661			583			3,192			616
Commercial and multifamily residential real estate construction	—			1			—			1			—
Consumer	326			178			266			742			796
Purchased credit impaired	1,812			872			945			3,389			3,096
Total recoveries	5,216			2,312			2,575			9,059			8,801
Net (charge-offs) recoveries	1,844			(2,975		)	484			(2,588		)	(4,839		)
Provision for loan and lease losses, excluding PCI loans	1,600			251			3,655			3,195			15,180
Recapture of loan and lease losses, PCI loans	(1,301		)	(33		)	(502		)	(1,316		)	(2,200		)
Provision for loan and lease losses	299			218			3,153			1,879			12,980
Ending balance, loans excluding PCI loans	79,602			77,248			79,770			79,602			79,770
Ending balance, PCI loans	3,058			3,269			4,017			3,058			4,017
Ending balance	$	82,660		$	80,517		$	83,787		$	82,660		$	83,787

The allowance for loan and lease losses to period end loans was 0.94% at September 30, 2019 compared to 0.93% at June 30, 2019. For the third quarter of 2019, Columbia recorded a net provision for loan and lease losses of $299 thousand compared to a net provision of $218 thousand for the linked quarter and a net provision of $3.2 million for the comparable quarter last year. The net provision for loan and lease losses recorded during the third quarter of 2019 consisted of $1.6 million of provision expense for loans, excluding PCI loans, and a provision recapture of $1.3 million for PCI loans.

Organizational Update

During the quarter, the Company announced the upcoming retirement of Mr. Robbins and its related succession planning activities. Mr. Robbins stated, “I am proud to pass the torch to Clint who has a 14 year proven track record of success in helping grow Columbia Bank to where we are today. The various roles that Clint has held while at Columbia Bank have prepared him well for this next phase of his career. He is very well respected among our investors, community leaders and employees.”

During the first nine months of 2019, the Bank received the following accolades:

Hadley Robbins was named to the inaugural Power 100 list of the most influential leaders in the region by the Puget Sound Business Journal;

Selected as one of the Top Corporate Philanthropists for 2019 by the Portland Business Journal;

Received an Extraordinary Banking Award for 2019 by the Institute of Extraordinary Banking;

Named to the list of Top Workplaces in 2018 by Portland’s Oregonian;

Honored as one of Oregon’s Most Admired Companies in 2018 by the Portland Business Journal;

For the 13th consecutive year, named as one of Washington’s Best Workplaces by Puget Sound Business Journal;

Winner of the 2018 Corporate Citizenship Award for midsize companies in Washington state from the Puget Sound Business Journal;

Selected as Best Bank and Best Large Business in The Best of South Sound reader’s choice poll for 2019 by South Sound Magazine;

Received the Corporate Award of the Year for work with Small Business Association Loans to minority owned businesses from the Oregon Association of Minority Entrepreneurs;

Selected as one of the Best Banks in the Best of The Mid-Valley, in the annual reader’s poll by the Salem Statesman Journal;

Columbia Bank’s Board of Directors was awarded the Governance Award for their service to the Bank and the community by Seattle Business Magazine;

Recognized as one of the Best Places to Work in Idaho by Populus Marketing Research;

Awarded the 2018 National Association of Secretaries of State Medallion for outstanding work to improve lives in Washington communities from The State of Washington Secretary of State’s Office; and

Selected as one of America’s Best Banks of 2019 among the nation’s 100 largest publicly traded banks and thrifts by Forbes.

Cash Dividend Announcement

Columbia will pay a regular cash dividend of $0.28 per common share on November 20, 2019 to shareholders of record as of the close of business on November 6, 2019.

Conference Call Information

Columbia’s management will discuss the third quarter 2019 financial results on a conference call scheduled for Thursday, October 24, 2019 at 10:00 a.m. Pacific Daylight Time (1:00 p.m. EDT). Interested parties may join the live-streamed event by using the site:

https://engage.vevent.com/rt/columbiabankingsysteminc~102419

The conference call can also be accessed on Thursday, October 24, 2019 at 10:00 a.m. Pacific Daylight Time (1:00 p.m. EDT) by calling 888-286-8956; Conference ID: 7935679.

A replay of the call can be accessed beginning Friday, October 25, 2019 using the site:

https://engage.vevent.com/rt/columbiabankingsysteminc~102419

Headquartered in Tacoma, Washington, Columbia Banking System, Inc. is the holding company of Columbia Bank, a Washington state-chartered full-service commercial bank with locations throughout Washington, Oregon and Idaho. For the 13th consecutive year, the bank was named in 2019 as one of Puget Sound Business Journal's “Washington’s Best Workplaces.” For the 8th consecutive year, Columbia was included in the 2019 Forbes America’s Best Banks list.

More information about Columbia can be found on its website at www.columbiabank.com.

Note Regarding Forward-Looking Statements

This news release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, descriptions of Columbia’s management’s expectations regarding future events and developments such as future operating results, growth in loans and deposits, continued success of Columbia’s style of banking and the strength of the local economy. The words “will,” “believe,” “expect,” “intend,” “should,” and “anticipate” or the negative of these words or words of similar construction are intended in part to help identify forward-looking statements. Future events are difficult to predict, and the expectations described above are necessarily subject to risks and uncertainties, many of which are outside our control, that may cause actual results to differ materially and adversely. In addition to discussions about risks and uncertainties set forth from time to time in Columbia’s filings with the Securities and Exchange Commission, available at the SEC’s website at www.sec.gov and the Company’s website at www.columbiabank.com, include the “Risk Factors,” “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our annual reports on Form 10-K and quarterly reports on Form 10-Q, (as applicable), factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following: (1) local, national and international economic conditions may be less favorable than expected or have a more direct and pronounced effect on Columbia than expected and adversely affect Columbia’s ability to continue its internal growth at historical rates and maintain the quality of its earning assets; (2) changes in interest rates could significantly reduce net interest income and negatively affect funding sources; (3) projected business increases following strategic expansion or opening or acquiring new branches may be lower than expected; (4) costs or difficulties related to the integration of acquisitions may be greater than expected; (5) competitive pressure among financial institutions may increase significantly; (6) failure to maintain effective internal controls over financial reporting or disclosure controls and procedures may adversely affect our business; (7) reliance on and cost of technology may increase; and (8) legislation or regulatory requirements or changes may adversely affect the businesses in which Columbia is engaged. We believe the expectations reflected in our forward-looking statements are reasonable, based on information available to us on the date hereof. However, given the described uncertainties and risks, we cannot guarantee our future performance or results of operations and you should not place undue reliance on these forward-looking statements which speak only as of the date hereof. 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 by the federal securities laws. The factors noted above and the risks and uncertainties described in our SEC filings should be considered when reading any forward-looking statements in this release.



Contacts:	Hadley S. Robbins,
	President and
	Chief Executive Officer

	Gregory A. Sigrist,
	Executive Vice President and
	Chief Financial Officer

	Investor Relations
	InvestorRelations@columbiabank.com
	253-305-1921



CONSOLIDATED BALANCE SHEETS
Columbia Banking System, Inc.
Unaudited				September 30,			June 30,			December 31,
				2019			2019			2018
				(in thousands)
ASSETS
Cash and due from banks				$	278,461		$	224,327		$	260,180
Interest-earning deposits with banks				20,144			34,332			17,407
Total cash and cash equivalents				298,605			258,659			277,587
Debt securities available for sale at fair value				3,367,572			2,864,418			3,167,448
Federal Home Loan Bank (“FHLB”) stock at cost				29,680			29,800			25,960
Loans held for sale				15,036			12,189			3,849
Loans, net of unearned income				8,756,355			8,646,990			8,391,511
Less: allowance for loan and lease losses				82,660			80,517			83,369
Loans, net				8,673,695			8,566,473			8,308,142
Interest receivable				48,503			46,878			45,323
Premises and equipment, net				165,431			167,295			168,788
Other real estate owned				625			1,118			6,019
Goodwill				765,842			765,842			765,842
Other intangible assets, net				37,908			40,540			45,937
Other assets				354,863			337,596			280,250
Total assets				$	13,757,760		$	13,090,808		$	13,095,145
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing				$	5,320,435		$	5,082,219		$	5,227,216
Interest-bearing				5,535,281			5,129,380			5,230,910
Total deposits				10,855,716			10,211,599			10,458,126
FHLB advances				492,482			495,496			399,523
Securities sold under agreements to repurchase				24,489			50,226			61,094
Subordinated debentures				35,323			35,370			35,462
Other liabilities				188,173			164,479			107,291
Total liabilities				11,596,183			10,957,170			11,061,496
Commitments and contingent liabilities
	September 30,	June 30,	December 31,
	2019	2019	2018
	(in thousands)
Preferred stock (no par value)
Authorized shares	2,000	2,000	2,000
Common stock (no par value)
Authorized shares	115,000	115,000	115,000
Issued	73,588	73,548	73,249	1,648,335			1,648,335			1,642,246
Outstanding	72,288	72,924	73,249
Retained earnings				493,738			463,429			426,708
Accumulated other comprehensive income (loss)				64,884			47,150			(35,305		)
Treasury stock at cost	1,300	624	—	(45,380		)	(21,863		)	—
Total shareholders’ equity				2,161,577			2,133,638			2,033,649
Total liabilities and shareholders’ equity				$	13,757,760		$	13,090,808		$	13,095,145



CONSOLIDATED STATEMENTS OF INCOME
Columbia Banking System, Inc.	Three Months Ended									Nine Months Ended
Unaudited	September 30,			June 30,			September 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
Interest Income	(in thousands except per share amounts)
Loans	$	112,656		$	116,585		$	109,748		$	337,657		$	318,187
Taxable securities	16,457			15,918			14,654			49,790			39,285
Tax-exempt securities	2,556			2,712			3,069			8,237			9,196
Deposits in banks	864			207			104			1,159			600
Total interest income	132,533			135,422			127,575			396,843			367,268
Interest Expense
Deposits	6,863			4,976			3,193			16,337			8,274
FHLB advances	2,569			4,708			966			9,962			2,351
Subordinated debentures	468			468			468			1,404			1,404
Other borrowings	183			154			152			552			288
Total interest expense	10,083			10,306			4,779			28,255			12,317
Net Interest Income	122,450			125,116			122,796			368,588			354,951
Provision for loan and lease losses	299			218			3,153			1,879			12,980
Net interest income after provision for loan and lease losses	122,151			124,898			119,643			366,709			341,971
Noninterest Income
Deposit account and treasury management fees	9,015			9,035			9,266			27,030			26,689
Card revenue	4,006			3,763			3,714			11,431			16,143
Financial services and trust revenue	3,226			3,425			2,975			9,608			8,924
Loan revenue	3,855			3,596			3,282			9,840			9,522
Bank owned life insurance	1,528			1,597			1,402			4,644			4,540
Investment securities gains (losses), net	—			285			(62		)	2,132			(73		)
Other	6,400			3,947			442			10,689			2,109
Total noninterest income	28,030			25,648			21,019			75,374			67,854
Noninterest Expense
Compensation and employee benefits	54,459			52,015			49,419			158,559			148,938
Occupancy	8,645			8,712			8,321			26,166			27,718
Data processing	5,102			4,601			4,466			14,372			14,957
Legal and professional fees	5,683			6,554			4,695			16,810			12,103
Amortization of intangibles	2,632			2,649			3,070			8,029			9,346
Business and Occupation ("B&O") taxes (1)	1,325			1,411			1,478			4,612			4,254
Advertising and promotion	1,752			870			1,472			3,596			4,523
Regulatory premiums	(38		)	956			904			1,902			2,778
Net cost (benefit) of operation of other real estate owned	(90		)	(705		)	485			(682		)	1,244
Other (1)	7,606			9,665			8,531			25,140			27,610
Total noninterest expense	87,076			86,728			82,841			258,504			253,471
Income before income taxes	63,105			63,818			57,821			183,579			156,354
Provision for income taxes	12,378			12,094			11,406			35,257			28,220
Net Income	$	50,727		$	51,724		$	46,415		$	148,322		$	128,134
Earnings per common share
Basic	$	0.70		$	0.71		$	0.63		$	2.04		$	1.75
Diluted	$	0.70		$	0.71		$	0.63		$	2.04		$	1.75
Dividends declared per common share - regular	$	0.28		$	0.28		$	0.26		$	0.84		$	0.74
Dividends declared per common share - special	—			0.14			—			0.28			—
Dividends declared per common share - total	$	0.28		$	0.42		$	0.26		$	1.12		$	0.74
Weighted average number of common shares outstanding	71,803			72,451			72,427			72,256			72,370
Weighted average number of diluted common shares outstanding	71,803			72,451			72,432			72,257			72,374

(1) Beginning the first quarter of 2019, B&O taxes were reported separately from other taxes, licenses and fees, which are now reported under “other noninterest expense.” Prior periods have been reclassified to conform to current period presentation.



FINANCIAL STATISTICS
Columbia Banking System, Inc.	Three Months Ended									Nine Months Ended
Unaudited	September 30,			June 30,			September 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
Earnings	(dollars in thousands except per share amounts)
Net interest income	$	122,450		$	125,116		$	122,796		$	368,588		$	354,951
Provision for loan and lease losses	$	299		$	218		$	3,153		$	1,879		$	12,980
Noninterest income	$	28,030		$	25,648		$	21,019		$	75,374		$	67,854
Noninterest expense	$	87,076		$	86,728		$	82,841		$	258,504		$	253,471
Acquisition-related expense (included in noninterest expense)	$	—		$	—		$	1,081		$	—		$	8,168
Net income	$	50,727		$	51,724		$	46,415		$	148,322		$	128,134
Per Common Share
Earnings (basic)	$	0.70		$	0.71		$	0.63		$	2.04		$	1.75
Earnings (diluted)	$	0.70		$	0.71		$	0.63		$	2.04		$	1.75
Book value	$	29.90		$	29.26		$	27.05		$	29.90		$	27.05
Tangible book value per common share (1)	$	18.78		$	18.20		$	15.93		$	18.78		$	15.93
Averages
Total assets	$	13,459,774		$	13,096,413		$	12,805,131		$	13,202,917		$	12,646,678
Interest-earning assets	$	11,941,578		$	11,606,727		$	11,326,629		$	11,704,702		$	11,168,143
Loans	$	8,694,592		$	8,601,819		$	8,456,632		$	8,568,746		$	8,398,596
Securities, including equity securities and FHLB stock	$	3,102,213		$	2,969,749		$	2,849,495		$	3,070,582		$	2,720,625
Deposits	$	10,668,767		$	10,186,370		$	10,478,800		$	10,376,841		$	10,359,896
Interest-bearing deposits	$	5,517,171		$	5,174,875		$	5,376,300		$	5,307,212		$	5,390,859
Interest-bearing liabilities	$	5,989,042		$	5,841,425		$	5,620,997		$	5,878,492		$	5,619,943
Noninterest-bearing deposits	$	5,151,596		$	5,011,496		$	5,102,500		$	5,069,629		$	4,969,037
Shareholders’ equity	$	2,152,916		$	2,096,157		$	1,983,317		$	2,098,364		$	1,962,506
Financial Ratios
Return on average assets	1.51		%	1.58		%	1.45		%	1.50		%	1.35		%
Return on average common equity	9.42		%	9.87		%	9.36		%	9.42		%	8.71		%
Return on average tangible common equity (1)	15.67		%	16.71		%	16.74		%	15.98		%	15.80		%
Average equity to average assets	16.00		%	16.01		%	15.49		%	15.89		%	15.52		%
Shareholders equity to total assets	15.71		%	16.30		%	15.29		%	15.71		%	15.29		%
Tangible common shareholders’ equity to tangible assets (1)	10.48		%	10.80		%	9.61		%	10.48		%	9.61		%
Net interest margin (tax equivalent) (2)	4.14		%	4.40		%	4.37		%	4.28		%	4.32		%
Efficiency ratio (tax equivalent) (3)	56.91		%	56.57		%	56.67		%	57.25		%	58.97		%
Operating efficiency ratio (tax equivalent) (1)	58.65		%	56.34		%	54.83		%	57.50		%	56.13		%
Noninterest expense ratio	2.59		%	2.65		%	2.59		%	2.61		%	2.67		%
Core noninterest expense ratio (1)	2.59		%	2.65		%	2.55		%	2.61		%	2.59		%
	September 30,			June 30,			December 31,
Period end	2019			2019			2018
Total assets	$	13,757,760		$	13,090,808		$	13,095,145
Loans, net of unearned income	$	8,756,355		$	8,646,990		$	8,391,511
Allowance for loan and lease losses	$	82,660		$	80,517		$	83,369
Securities, including equity securities and FHLB stock	$	3,397,252		$	2,894,218		$	3,193,408
Deposits	$	10,855,716		$	10,211,599		$	10,458,126
Shareholders’ equity	$	2,161,577		$	2,133,638		$	2,033,649
Nonperforming assets
Nonaccrual loans	$	37,021		$	39,038		$	54,842
Other real estate owned (“OREO”) and other personal property owned (“OPPO”)	625			1,118			6,049
Total nonperforming assets	$	37,646		$	40,156		$	60,891
Nonperforming loans to period-end loans	0.42		%	0.45		%	0.65		%
Nonperforming assets to period-end assets	0.27		%	0.31		%	0.46		%
Allowance for loan and lease losses to period-end loans	0.94		%	0.93		%	0.99		%
Net loan charge-offs (recoveries) (for the three months ended)	$	(1,844	)	$	2,975		$	2,207

(1) This is a non-GAAP measure. See section titled "Non-GAAP Financial Measures" on the last three pages of this earnings release for a reconciliation to the most comparable GAAP measure.

(2) Beginning January 2019, net interest margin was calculated using the actual number of days and on an actual/actual basis. This change was done to provide more meaningful trend information for our net interest margin regardless of the number of days in the period. Prior periods, which were previously reported on a 30/360 basis, have been restated to conform to the current basis.

(3) Noninterest expense divided by the sum of net interest income on a tax equivalent basis and noninterest income on a tax equivalent basis.



QUARTERLY FINANCIAL STATISTICS
Columbia Banking System, Inc.	Three Months Ended
Unaudited	September 30,			June 30,			March 31,			December 31,			September 30,
	2019			2019			2019			2018			2018
Earnings	(dollars in thousands except per share amounts)
Net interest income	$	122,450		$	125,116		$	121,022		$	123,888		$	122,796
Provision for loan and lease losses	$	299		$	218		$	1,362		$	1,789		$	3,153
Noninterest income	$	28,030		$	25,648		$	21,696		$	20,402		$	21,019
Noninterest expense	$	87,076		$	86,728		$	84,700		$	87,019		$	82,841
Acquisition-related expense (included in noninterest expense)	$	—		$	—		$	—		$	493		$	1,081
Net income	$	50,727		$	51,724		$	45,871		$	44,748		$	46,415
Per Common Share
Earnings (basic)	$	0.70		$	0.71		$	0.63		$	0.61		$	0.63
Earnings (diluted)	$	0.70		$	0.71		$	0.63		$	0.61		$	0.63
Book value	$	29.90		$	29.26		$	28.39		$	27.76		$	27.05
Averages
Total assets	$	13,459,774		$	13,096,413		$	13,048,041		$	12,957,754		$	12,805,131
Interest-earning assets	$	11,941,578		$	11,606,727		$	11,561,627		$	11,458,470		$	11,326,629
Loans	$	8,694,592		$	8,601,819		$	8,406,664		$	8,441,354		$	8,456,632
Securities, including equity securities and FHLB stock	$	3,102,213		$	2,969,749		$	3,140,201		$	2,998,638		$	2,849,495
Deposits	$	10,668,767		$	10,186,371		$	10,271,016		$	10,560,280		$	10,478,800
Interest-bearing deposits	$	5,517,171		$	5,174,875		$	5,226,396		$	5,298,590		$	5,376,300
Interest-bearing liabilities	$	5,989,042		$	5,841,425		$	5,802,965		$	5,599,646		$	5,620,997
Noninterest-bearing deposits	$	5,151,596		$	5,011,496		$	5,044,620		$	5,261,690		$	5,102,500
Shareholders’ equity	$	2,152,916		$	2,096,157		$	2,044,832		$	1,988,981		$	1,983,317
Financial Ratios
Return on average assets	1.51		%	1.58		%	1.41		%	1.38		%	1.45		%
Return on average common equity	9.42		%	9.87		%	8.97		%	9.00		%	9.36		%
Average equity to average assets	16.00		%	16.01		%	15.67		%	15.35		%	15.49		%
Shareholders’ equity to total assets	15.71		%	16.30		%	15.99		%	15.53		%	15.29		%
Net interest margin (tax equivalent) (1)	4.14		%	4.40		%	4.32		%	4.36		%	4.37		%
Period end
Total assets	$	13,757,760		$	13,090,808		$	13,064,436		$	13,095,145		$	12,956,596
Loans, net of unearned income	$	8,756,355		$	8,646,990		$	8,520,798		$	8,391,511		$	8,514,317
Allowance for loan and lease losses	$	82,660		$	80,517		$	83,274		$	83,369		$	83,787
Securities, including equity securities and FHLB stock	$	3,397,252		$	2,894,218		$	3,052,870		$	3,193,408		$	2,942,655
Deposits	$	10,855,716		$	10,211,599		$	10,369,009		$	10,458,126		$	10,603,957
Shareholders’ equity	$	2,161,577		$	2,133,638		$	2,088,620		$	2,033,649		$	1,981,395
Goodwill	$	765,842		$	765,842		$	765,842		$	765,842		$	765,842
Other intangible assets, net	$	37,908		$	40,540		$	43,189		$	45,937		$	48,827
Nonperforming assets
Nonaccrual loans	$	37,021		$	39,038		$	52,615		$	54,842		$	60,332
OREO and OPPO	625			1,118			6,075			6,049			7,415
Total nonperforming assets	$	37,646		$	40,156		$	58,690		$	60,891		$	67,747
Nonperforming loans to period-end loans	0.42		%	0.45		%	0.62		%	0.65		%	0.71		%
Nonperforming assets to period-end assets	0.27		%	0.31		%	0.45		%	0.46		%	0.52		%
Allowance for loan and lease losses to period-end loans	0.94		%	0.93		%	0.98		%	0.99		%	0.98		%
Net loan charge-offs (recoveries)	$	(1,844	)	$	2,975		$	1,457		$	2,207		$	(484	)

(1) Beginning January 2019, net interest margin was calculated using the actual number of days and on an actual/actual basis. This change was done to provide more meaningful trend information for our net interest margin regardless of the number of days in the period. Prior periods, which were previously reported on a 30/360 basis, have been restated to conform to the current basis.



LOAN PORTFOLIO COMPOSITION
Columbia Banking System, Inc.
Unaudited	September 30,			June 30,			March 31,			December 31,			September 30,
	2019			2019			2019			2018			2018
Loan Portfolio Composition - Dollars	(dollars in thousands)
Commercial business	$	3,707,314		$	3,644,051		$	3,509,472		$	3,438,422		$	3,554,147
Real estate:
One-to-four family residential	273,079			279,091			282,673			238,367			232,924
Commercial and multifamily residential	3,975,647			3,913,546			3,917,833			3,846,027			3,786,615
Total real estate	4,248,726			4,192,637			4,200,506			4,084,394			4,019,539
Real estate construction:
One-to-four family residential	195,198			201,783			207,900			217,790			211,629
Commercial and multifamily residential	261,786			255,452			240,458			284,394			349,328
Total real estate construction	456,984			457,235			448,358			502,184			560,957
Consumer	297,009			305,752			312,886			318,945			327,863
Purchased credit impaired	81,777			84,730			88,257			89,760			95,936
Subtotal loans	8,791,810			8,684,405			8,559,479			8,433,705			8,558,442
Less: Net unearned income	(35,455		)	(37,415		)	(38,681		)	(42,194		)	(44,125		)
Loans, net of unearned income	8,756,355			8,646,990			8,520,798			8,391,511			8,514,317
Less: Allowance for loan and lease losses	(82,660		)	(80,517		)	(83,274		)	(83,369		)	(83,787		)
Total loans, net	8,673,695			8,566,473			8,437,524			8,308,142			8,430,530
Loans held for sale	$	15,036		$	12,189		$	4,017		$	3,849		$	5,275



	September 30,		June 30,		March 31,		December 31,		September 30,
Loan Portfolio Composition - Percentages	2019		2019		2019		2018		2018
Commercial business	42.3	%	42.1	%	41.2	%	41.0	%	41.7	%
Real estate:
One-to-four family residential	3.1	%	3.2	%	3.3	%	2.8	%	2.7	%
Commercial and multifamily residential	45.5	%	45.3	%	46.1	%	45.8	%	44.5	%
Total real estate	48.6	%	48.5	%	49.4	%	48.6	%	47.2	%
Real estate construction:
One-to-four family residential	2.2	%	2.3	%	2.4	%	2.6	%	2.5	%
Commercial and multifamily residential	3.0	%	3.0	%	2.8	%	3.4	%	4.1	%
Total real estate construction	5.2	%	5.3	%	5.2	%	6.0	%	6.6	%
Consumer	3.4	%	3.5	%	3.7	%	3.8	%	3.9	%
Purchased credit impaired	0.9	%	1.0	%	1.0	%	1.1	%	1.1	%
Subtotal loans	100.4	%	100.4	%	100.5	%	100.5	%	100.5	%
Less: Net unearned income	(0.4	)%	(0.4	)%	(0.5	)%	(0.5	)%	(0.5	)%
Loans, net of unearned income	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%



DEPOSIT COMPOSITION
Columbia Banking System, Inc.
Unaudited
	September 30,			June 30,			March 31,			December 31,			September 30,
	2019			2019			2019			2018			2018
Deposit Composition - Dollars	(dollars in thousands)
Demand and other noninterest-bearing	$	5,320,435		$	5,082,219		$	5,106,568		$	5,227,216		$	5,250,222
Money market (1)	2,295,229			2,240,522			2,311,937			2,294,125			2,341,830
Interest-bearing demand (1)	1,059,502			1,058,545			1,078,849			1,084,863			1,111,809
Savings (1)	892,438			887,172			896,458			889,849			908,194
Interest-bearing public funds, other than certificates of deposit (1)	629,797			270,398			269,156			233,938			220,840
Certificates of deposit, less than $250,000	223,249			228,920			236,014			243,849			251,792
Certificates of deposit, $250,000 or more	107,506			105,782			101,965			89,473			90,387
Certificates of deposit insured by CDARS®	17,252			16,559			22,890			23,580			23,841
Brokered certificates of deposit	18,852			40,502			51,375			57,930			65,476
Reciprocal money market accounts	291,542			281,247			294,096			313,692			340,044
Subtotal	10,855,802			10,211,866			10,369,308			10,458,515			10,604,435
Valuation adjustment resulting from acquisition accounting	(86		)	(267		)	(299		)	(389		)	(478		)
Total deposits	$	10,855,716		$	10,211,599		$	10,369,009		$	10,458,126		$	10,603,957



	September 30,		June 30,		March 31,		December 31,		September 30,
Deposit Composition - Percentages	2019		2019		2019		2018		2018
Demand and other noninterest-bearing	49.0	%	49.8	%	49.2	%	50.0	%	49.5	%
Money market (1)	21.1	%	21.9	%	22.3	%	21.9	%	22.1	%
Interest-bearing demand (1)	9.8	%	10.4	%	10.4	%	10.4	%	10.5	%
Savings (1)	8.2	%	8.7	%	8.6	%	8.5	%	8.6	%
Interest-bearing public funds, other than certificates of deposit (1)	5.8	%	2.7	%	2.6	%	2.2	%	2.1	%
Certificates of deposit, less than $250,000	2.1	%	2.2	%	2.3	%	2.3	%	2.4	%
Certificates of deposit, $250,000 or more	1.0	%	1.0	%	1.0	%	0.9	%	0.9	%
Certificates of deposit insured by CDARS®	0.2	%	0.2	%	0.2	%	0.2	%	0.2	%
Brokered certificates of deposit	0.2	%	0.4	%	0.5	%	0.6	%	0.6	%
Reciprocal money market accounts	2.6	%	2.7	%	2.9	%	3.0	%	3.1	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

(1) Beginning July 2019, interest-bearing public funds, other than certificates of deposit, are presented separately in this table. Prior period amounts have been reclassified to conform to current period presentation.



AVERAGE BALANCES AND RATES
Columbia Banking System, Inc.
Unaudited
	Three Months Ended						Three Months Ended
	September 30, 2019						September 30, 2018
	Average Balances		Interest Earned / Paid		Average Rate (3)		Average Balances		Interest Earned / Paid		Average Rate (3)
	(dollars in thousands)
ASSETS
Loans, net (1)(2)	$	8,694,592	$	114,099	5.21	%	$	8,456,632	$	110,925	5.20	%
Taxable securities	2,654,490		16,457		2.46	%	2,336,405		14,654		2.49	%
Tax exempt securities (2)	447,723		3,235		2.87	%	513,090		3,885		3.00	%
Interest-earning deposits with banks	144,773		864		2.37	%	20,502		104		2.01	%
Total interest-earning assets	11,941,578		134,655		4.47	%	11,326,629		129,568		4.54	%
Other earning assets	230,140						228,332
Noninterest-earning assets	1,288,056						1,250,170
Total assets	$	13,459,774					$	12,805,131
LIABILITIES AND SHAREHOLDERS’ EQUITY
Money market accounts (4)	2,589,390		2,840		0.44	%	2,727,928		1,671		0.24	%
Interest-bearing demand (4)	1,049,833		438		0.17	%	1,089,324		437		0.16	%
Savings accounts (4)	893,395		49		0.02	%	888,997		31		0.01	%
Interest-bearing public funds, other than certificates of deposit (4)	602,674		2,879		1.90	%	229,855		510		0.88	%
Certificates of deposit	381,879		657		0.68	%	440,196		544		0.49	%
Total interest-bearing deposits	5,517,171		6,863		0.49	%	5,376,300		3,193		0.24	%
FHLB advances	400,956		2,569		2.54	%	167,531		966		2.29	%
Subordinated debentures	35,346		468		5.25	%	35,530		468		5.23	%
Other borrowings and interest-bearing liabilities	35,569		183		2.04	%	41,636		152		1.45	%
Total interest-bearing liabilities	5,989,042		10,083		0.67	%	5,620,997		4,779		0.34	%
Noninterest-bearing deposits	5,151,596						5,102,500
Other noninterest-bearing liabilities	166,220						98,317
Shareholders’ equity	2,152,916						1,983,317
Total liabilities & shareholders’ equity	$	13,459,774					$	12,805,131
Net interest income (tax equivalent)			$	124,572					$	124,789
Net interest margin (tax equivalent)					4.14	%					4.37	%

Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $2.0 million and $2.5 million for the three months ended September 30, 2019 and 2018, respectively. The incremental accretion income on acquired loans was $2.1 million and $3.2 million for the three months ended September 30, 2019 and 2018, respectively.

Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $1.4 million and $1.2 million for the three months ended September 30, 2019 and 2018, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $679 thousand and $816 thousand for the three months ended September 30, 2019 and 2018, respectively.

Beginning January 2019, average rates were calculated using the actual number of days and on an actual/actual basis. This change was done to provide more meaningful trend information for our net interest margin regardless of the number of days in the period. Prior periods, which were previously reported on a 30/360 basis, have been restated to conform to the current basis.

Beginning July 2019, interest-bearing public funds, other than certificates of deposit, are presented separately in this table. Prior period amounts have been reclassified to conform to current period presentation.



AVERAGE BALANCES AND RATES
Columbia Banking System, Inc.
Unaudited
	Three Months Ended						Three Months Ended
	September 30, 2019						June 30, 2019
	Average Balances		Interest Earned / Paid		Average Rate (3)		Average Balances		Interest Earned / Paid		Average Rate (3)
	(dollars in thousands)
ASSETS
Loans, net (1)(2)	$	8,694,592	$	114,099	5.21	%	$	8,601,819	$	117,984	5.50	%
Taxable securities	2,654,490		16,457		2.46	%	2,506,672		15,918		2.55	%
Tax exempt securities (2)	447,723		3,235		2.87	%	463,077		3,433		2.97	%
Interest-earning deposits with banks	144,773		864		2.37	%	35,159		207		2.36	%
Total interest-earning assets	11,941,578		134,655		4.47	%	11,606,727		137,542		4.75	%
Other earning assets	230,140						233,273
Noninterest-earning assets	1,288,056						1,256,413
Total assets	$	13,459,774					$	13,096,413
LIABILITIES AND SHAREHOLDERS’ EQUITY
Money market accounts (4)	$	2,589,390	$	2,840	0.44	%	$	2,539,757	$	2,896	0.46	%
Interest-bearing demand (4)	1,049,833		438		0.17	%	1,066,876		428		0.16	%
Savings accounts (4)	893,395		49		0.02	%	891,341		43		0.02	%
Interest-bearing public funds, other than certificates of deposit (4)	602,674		2,879		1.90	%	273,387		1,023		1.50	%
Certificates of deposit	381,879		657		0.68	%	403,514		586		0.58	%
Total interest-bearing deposits	5,517,171		6,863		0.49	%	5,174,875		4,976		0.39	%
FHLB advances	400,956		2,569		2.54	%	602,041		4,708		3.14	%
Subordinated debentures	35,346		468		5.25	%	35,392		468		5.30	%
Other borrowings and interest-bearing liabilities	35,569		183		2.04	%	29,117		154		2.12	%
Total interest-bearing liabilities	5,989,042		10,083		0.67	%	5,841,425		10,306		0.71	%
Noninterest-bearing deposits	5,151,596						5,011,496
Other noninterest-bearing liabilities	166,220						147,335
Shareholders’ equity	2,152,916						2,096,157
Total liabilities & shareholders’ equity	$	13,459,774					$	13,096,413
Net interest income (tax equivalent)			$	124,572					$	127,236
Net interest margin (tax equivalent)					4.14	%					4.40	%

Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $2.0 million and $2.1 million for the three months ended September 30, 2019 and June 30, 2019, respectively. The incremental accretion on acquired loans was $2.1 million and $2.7 million for the three months ended September 30, 2019 and June 30, 2019, respectively.

Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $1.4 million and $1.4 million for the three months ended September 30, 2019 and June 30, 2019, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $679 thousand and $721 thousand for the three months ended September 30, 2019 and June 30, 2019, respectively.



AVERAGE BALANCES AND RATES
Columbia Banking System, Inc.
Unaudited
	Nine Months Ended						Nine Months Ended
	September 30, 2019						September 30, 2018
	Average Balances		Interest Earned / Paid		Average Rate (3)		Average Balances		Interest Earned / Paid		Average Rate (3)
	(dollars in thousands)
ASSETS
Loans, net (1)(2)	$	8,568,746	$	341,798	5.33	%	$	8,398,596	$	321,542	5.12	%
Taxable securities	2,599,595		49,790		2.56	%	2,202,497		39,285		2.38	%
Tax exempt securities (2)	470,987		10,426		2.96	%	518,128		11,640		3.00	%
Interest-earning deposits with banks	65,374		1,159		2.37	%	48,922		600		1.64	%
Total interest-earning assets	11,704,702		$	403,173	4.61	%	11,168,143		$	373,067	4.47	%
Other earning assets	231,823						222,570
Noninterest-earning assets	1,266,392						1,255,965
Total assets	$	13,202,917					$	12,646,678
LIABILITIES AND SHAREHOLDERS’ EQUITY
Money market accounts (4)	$	2,571,722	$	8,321	0.43	%	$	2,704,471	$	4,025	0.20	%
Interest-bearing demand (4)	1,063,678		1,230		0.15	%	1,097,523		1,161		0.14	%
Savings accounts (4)	893,738		136		0.02	%	880,561		102		0.02	%
Interest-bearing public funds, other than certificates of deposit (4)	380,853		4,831		1.70	%	247,068		1,367		0.74	%
Certificates of deposit	397,221		1,819		0.61	%	461,236		1,619		0.47	%
Total interest-bearing deposits	5,307,212		16,337		0.41	%	5,390,859		8,274		0.21	%
FHLB advances	500,448		9,962		2.66	%	150,054		2,351		2.09	%
Subordinated debentures	35,392		1,404		5.30	%	35,577		1,404		5.28	%
Other borrowings and interest-bearing liabilities	35,440		552		2.08	%	43,453		288		0.89	%
Total interest-bearing liabilities	5,878,492		$	28,255	0.64	%	5,619,943		$	12,317	0.29	%
Noninterest-bearing deposits	5,069,629						4,969,037
Other noninterest-bearing liabilities	156,432						95,192
Shareholders’ equity	2,098,364						1,962,506
Total liabilities & shareholders’ equity	$	13,202,917					$	12,646,678
Net interest income (tax equivalent)			$	374,918					$	360,750
Net interest margin (tax equivalent)					4.28	%					4.32	%

Nonaccrual loans have been included in the table as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $6.3 million and $6.8 million for the nine months ended September 30, 2019 and 2018, respectively. The incremental accretion on acquired loans was $6.8 million and $9.9 million for the nine months ended September 30, 2019 and 2018, respectively.

Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $4.1 million and $3.4 million for the nine months ended September 30, 2019 and 2018, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $2.2 million and $2.4 million for the nine months ended September 30, 2019 and 2018, respectively.

Beginning January 2019, average rate was calculated using the actual number of days to be on an actual/actual basis. This change was done to provide more meaningful trend information for our net interest margin regardless of the number of days in the period. Prior periods, which were previously reported on a 30/360 basis, have been restated to conform to the current basis.

Non-GAAP Financial Measures

The Company considers its operating net interest margin and operating efficiency ratios to be useful measurements as they more closely reflect the ongoing operating performance of the Company. Despite the usefulness of the operating net interest margin and operating efficiency ratio to the Company, there are no standardized definitions for them and, as a result, the Company’s calculations may not be comparable with other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following tables reconcile the Company’s calculation of the operating net interest margin and operating efficiency ratio:



	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
Operating net interest margin non-GAAP reconciliation:	(dollars in thousands)
Net interest income (tax equivalent) (1)	$	124,572		$	127,236		$	124,789		$	374,918		$	360,750
Adjustments to arrive at operating net interest income (tax equivalent):
Incremental accretion income on purchased credit impaired loans	(113		)	(579		)	(585		)	(980		)	(1,240		)
Incremental accretion income on other acquired loans	(1,959		)	(2,084		)	(2,643		)	(5,790		)	(8,703		)
Premium amortization on acquired securities	1,386			1,651			1,859			4,816			6,065
Interest reversals on nonaccrual loans	174			662			477			1,462			1,147
Operating net interest income (tax equivalent) (1)	$	124,060		$	126,886		$	123,897		$	374,426		$	358,019
Average interest earning assets	$	11,941,578		$	11,606,727		$	11,326,629		$	11,704,702		$	11,168,143
Net interest margin (tax equivalent) (1)(2)	4.14		%	4.40		%	4.37		%	4.28		%	4.32		%
Operating net interest margin (tax equivalent) (1)(2)	4.12		%	4.38		%	4.34		%	4.28		%	4.29		%



	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
Operating efficiency ratio non-GAAP reconciliation:	(dollars in thousands)
Noninterest expense (numerator A)	$	87,076		$	86,728		$	82,841		$	258,504		$	253,471
Adjustments to arrive at operating noninterest expense:
Acquisition-related expenses	—			—			(1,081		)	—			(8,168		)
Net benefit (cost) of operation of OREO and OPPO	113			705			(485		)	704			(1,239		)
Loss on asset disposals	(5		)	—			(110		)	(5		)	(111		)
Business and Occupation (“B&O”) taxes	(1,325		)	(1,411		)	(1,478		)	(4,612		)	(4,254		)
Operating noninterest expense (numerator B)	$	85,859		$	86,022		$	79,687		$	254,591		$	239,699

Net interest income (tax equivalent) (1)	$	124,572		$	127,236		$	124,789		$	374,918		$	360,750
Noninterest income	28,030			25,648			21,019			75,374			67,854
Bank owned life insurance tax equivalent adjustment	406			424			373			1,234			1,207
Total revenue (tax equivalent) (denominator A)	$	153,008		$	153,308		$	146,181		$	451,526		$	429,811

Operating net interest income (tax equivalent) (1)	$	124,060		$	126,886		$	123,897		$	374,426		$	358,019
Adjustments to arrive at operating noninterest income (tax equivalent):
Investment securities loss (gain), net	—			(285		)	62			(2,132		)	73
Gain on asset disposals	(6,104		)	—			(29		)	(6,104		)	(111		)
Operating noninterest income (tax equivalent)	22,332			25,787			21,425			68,372			69,023
Total operating revenue (tax equivalent) (denominator B)	$	146,392		$	152,673		$	145,322		$	442,798		$	427,042
Efficiency ratio (tax equivalent) (numerator A/denominator A)	56.91		%	56.57		%	56.67		%	57.25		%	58.97		%
Operating efficiency ratio (tax equivalent) (numerator B/denominator B)	58.65		%	56.34		%	54.83		%	57.50		%	56.13		%

(1) Tax-exempt interest income has been adjusted to a tax equivalent basis. The amount of such adjustment was an addition to net interest income of $2.1 million, $2.1 million, and $2.0 million for the three months ended September 30, 2019, June 30, 2019, and September 30, 2018, respectively; and $6.3 million and $5.8 million for the nine month periods ended September 30, 2019 and 2018, respectively.

(2) Beginning January 2019, net interest margin (tax equivalent) and operating net interest margin (tax equivalent) were calculated using the actual number of days and on an actual/actual basis. This change was done to provide more meaningful trend information for our net interest margin regardless of the number of days in the period. Prior periods, which were previously reported on a 30/360 basis, have been restated to conform to the current basis.

Non-GAAP Financial Measures - Continued

The Company also considers its core noninterest expense ratio to be a useful measurement as it more closely reflects the ongoing operating performance of the Company. Despite the usefulness of the core noninterest expense ratio to the Company, there is not a standardized definition for it, as a result, the Company’s calculations may not be comparable with other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following table reconciles the Company’s calculation of the core noninterest expense ratio:



	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
Core noninterest expense ratio non-GAAP reconciliation:	(dollars in thousands)
Noninterest expense (numerator A)	$	87,076		$	86,728		$	82,841		$	258,504		$	253,471
Adjustments to arrive at core noninterest expense:
Acquisition-related expenses	—			—			(1,081		)	—			(8,168		)
Core noninterest expense (numerator B)	$	87,076		$	86,728		$	81,760		$	258,504		$	245,303
Average assets (denominator)	$	13,459,774		$	13,096,413		$	12,805,131		$	13,202,917		$	12,646,678
Noninterest expense ratio (numerator A/denominator) (1)	2.59		%	2.65		%	2.59		%	2.61		%	2.67		%
Core noninterest expense ratio (numerator B/denominator) (2)	2.59		%	2.65		%	2.55		%	2.61		%	2.59		%

(1) For the purpose of this ratio, interim noninterest expense has been annualized.

(2) For the purpose of this ratio, interim core noninterest expense has been annualized.

The Company considers its tangible common equity ratio and tangible book value per share ratio to be useful measurements in evaluating the capital adequacy of the Company as they provide a method to assess management’s success in utilizing our tangible capital. Despite the usefulness of these ratios to the Company, there is not a standardized definition for them, as a result, the Company’s calculation may not always be comparable with other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following tables reconcile the Company’s calculation of the tangible common equity ratio:



	September 30,			June 30,			September 30,
	2019			2019			2018
Tangible common equity ratio and tangible book value per common share non-GAAP reconciliation:	(dollars in thousands except per share amounts)
Shareholders’ equity (numerator A)	$	2,161,577		$	2,133,638		$	1,981,395
Adjustments to arrive at tangible common equity:
Goodwill	(765,842		)	(765,842		)	(765,842		)
Other intangible assets, net	(37,908		)	(40,540		)	(48,827		)
Tangible common equity (numerator B)	$	1,357,827		$	1,327,256		$	1,166,726
Total assets (denominator A)	$	13,757,760		$	13,090,808		$	12,956,596
Adjustments to arrive at tangible assets:
Goodwill	(765,842		)	(765,842		)	(765,842		)
Other intangible assets, net	(37,908		)	(40,540		)	(48,827		)
Tangible assets (denominator B)	$	12,954,010		$	12,284,426		$	12,141,927
Shareholders’ equity to total assets (numerator A/denominator A)	15.71		%	16.30		%	15.29		%
Tangible common shareholders’ equity to tangible assets (numerator B/denominator B)	10.48		%	10.80		%	9.61		%
Common shares outstanding (denominator C)	72,288			72,924			73,260
Book value per common share (numerator A/denominator C)	$	29.90		$	29.26		$	27.05
Tangible book value per common share (numerator B/denominator C)	$	18.78		$	18.20		$	15.93

Non-GAAP Financial Measures - Continued

The Company also considers its return on average tangible common equity ratio to be a useful measurement as it evaluates the Company’s ongoing ability to generate returns for its common shareholders. By removing the impact of intangible assets and their related amortization and tax effects, the performance of the business can be evaluated, whether acquired or developed internally. Despite the usefulness of this ratio to the Company, there is not a standardized definition for it, and, as a result, the Company’s calculation may not always be comparable with other organizations. The Company encourages readers to consider its consolidated financial statements in their entirety and not to rely on any single financial measure.

The following tables reconcile the Company’s calculation of the return on average tangible common shareholders' equity ratio:



	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2019			2019			2018			2019			2018
Return on average tangible common equity non-GAAP reconciliation:	(dollars in thousands)
Net income (numerator A)	$	50,727		$	51,724		$	46,415		$	148,322		$	128,134
Adjustments to arrive at tangible income applicable to common shareholders:
Amortization of intangibles	2,632			2,649			3,070			8,029			9,346
Tax effect on intangible amortization	(553		)	(556		)	(645		)	(1,686		)	(1,963		)
Tangible income applicable to common shareholders (numerator B)	$	52,806		$	53,817		$	48,840		154,665			$	135,517
Average shareholders’ equity (denominator A)	$	2,152,916		$	2,096,157		$	1,983,317		2,098,364			$	1,962,506
Adjustments to arrive at average tangible common equity:
Average intangibles	(805,033		)	(807,678		)	(816,128		)	(807,676		)	(819,215		)
Average tangible common equity (denominator B)	$	1,347,883		$	1,288,479		$	1,167,189		$	1,290,688		$	1,143,291
Return on average common equity (numerator A/denominator A) (1)	9.42		%	9.87		%	9.36		%	9.42		%	8.71		%
Return on average tangible common equity (numerator B/denominator B) (2)	15.67		%	16.71		%	16.74		%	15.98		%	15.80		%

(1) For the purpose of this ratio, interim net income has been annualized.

(2) For the purpose of this ratio, interim tangible income applicable to common shareholders has been annualized.

Document and Entity Information Document

Document and Entity Information Document	Oct. 24, 2019
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Oct. 24, 2019
Entity Registrant Name	COLUMBIA BANKING SYSTEM, INC.
Entity Central Index Key	0000887343
Amendment Flag	false
Entity Incorporation, State or Country Code	WA
Entity File Number	0-20288
Entity Tax Identification Number	91-1422237
Entity Address, Address Line One	1301 A Street
Entity Address, City or Town	Tacoma
Entity Address, State or Province	WA
Entity Address, Postal Zip Code	98402-2156
City Area Code	253
Local Phone Number	305-1900
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, No Par Value
Trading Symbol	COLB
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false