CORRECTION

                                                           FOR IMMEDIATE RELEASE

                                                                  AUGUST 9, 2001

                                         CONTACTS:       J. James Gallagher, CEO
                                                                    253-305-0604
                                                   Melanie J. Dressel, President
                                                                    253-305-1911
                                                  Gary R. Schminkey, EVP and CFO
                                                                    253-305-1966


FOLLOWING IS THE COMPLETE, CORRECTED VERSION OF THE PRESS RELEASE AS ORIGINALLY
ISSUED WEDNESDAY, AUGUST 1, 2001:


                     COLUMBIA BANKING SYSTEM, INC. RECEIVES
               $22 MILLION FROM POOLED TRUST PREFERRED TRANSACTION
                       AND APPROVES STOCK REPURCHASE PLAN

         TACOMA, WA - Columbia Banking System, Inc., the holding company of
Columbia State Bank, announced today that it has received $22 million from its
participation in a pooled trust preferred offering, in which it issued long-term
floating rate capital securities with an initial rate of 7.29 %. The offering
was managed by Keefe, Bruyette & Woods and First Tennessee Capital Markets.
"Issuance of the capital securities, which are a stable and lower cost capital,
will support Columbia's growth and expansion plans while avoiding the dilution
to existing shareholders that would result from the issuance of additional
shares of common stock," stated J. James Gallagher, Columbia's Chief Executive
Officer.

         Columbia also announced today that its Board of Directors has approved
a stock repurchase program, which will be funded by up to $9 million of the
proceeds from the pooled trust preferred transaction. Under the stock repurchase
program, Columbia may systematically purchase up to 660,000 of its outstanding
shares of Common Stock. Those shares represent approximately 5% of the 13.1
million common shares currently outstanding. Columbia intends to purchase the
shares from time to time in the open market, under conditions which allow such
repurchases to be accretive to earnings while maintaining capital ratios that
exceed the guidelines for a well-capitalized financial institution.

         "We are pleased that the trust preferred transaction has provided
additional capital that will support our continued growth while also allowing us
to implement our new stock repurchase program," said Mr. Gallagher. "Together
these two events should enable Columbia to restructure its balance sheet and to
more effectively leverage its assets, and should have a favorable effect on
earnings per share and return on shareholders equity."

         Columbia will use the remaining proceeds from the pooled trust
preferred transaction to retire outstanding short-term debt and for working
capital.






         Columbia is a Tacoma-based bank holding company whose wholly owned
subsidiary is Columbia State Bank, a Washington state-chartered, full-service
commercial bank, with 31 banking offices in Pierce, King, Cowlitz, Kitsap and
Thurston counties. Columbia's common stock trades on the Nasdaq Stock Market
(NMS) under the symbol COLB.

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Note Regarding Forward-Looking Statements

This news release includes forward-looking statements, which management believes
are a benefit to shareholders. These forward-looking statements describe
Columbia's management's expectations regarding future events and developments
such as future operating results, growth in loans and deposits, continued
success of Columbia's style of banking and the strength of the local economy.
The words "will," "believe," "expect," "should," "anticipate" and words of
similar construction are intended in part to help identify forward-looking
statements. Future events are difficult to predict, and the expectations
described above are necessarily subject to risk and uncertainty that may cause
actual results to differ materially and adversely. In addition to discussions
about risks and uncertainties set forth from time to time in Columbia's filings
with the SEC, factors that may cause actual results to differ materially from
those contemplated by such forward-looking statements include, among others, the
following possibilities: (1) local and national general and economic conditions
are 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 reduce interest margins more than expected
and negatively affect funding sources; (3) projected business increases
following strategic expansion or opening or acquiring new branches are lower
than expected; (4) costs or difficulties related to the integration of
acquisitions are greater than expected; (5) competitive pressure.



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