Exhibit 99.1

FOR IMMEDIATE RELEASE

October 27, 2005

Contacts:                        Melanie J. Dressel, President and

Chief Executive Officer

(253) 305-1911

Gary R. Schminkey, Executive Vice President

and Chief Financial Officer

(253) 305-1966

COLUMBIA BANKING SYSTEM ANNOUNCES

INCREASED THIRD QUARTER 2005 EARNINGS

THIRD QUARTER HIGHLIGHTS

• Net income of $8.0 million, up 45% from third quarter 2004.

• Earnings per diluted share of $0.50, up 32% from the same period in 2004.

• Return on average tangible equity improved to 17.35% from 13.46% for the third quarter of 2004.

• Total loans were $1.51 billion, an increase of 11% from December 31, 2004.

• Average core deposit growth of 17% compared with the same period in 2004.

• Total nonperforming assets decreased 31% from December 31, 2004; allowance for loan losses to nonperforming assets at 329%.

• Downtown Puyallup branch opened in August 2005.

TACOMA, Washington—Columbia Banking System, Inc. (Nasdaq: COLB) today announced earnings for the third quarter 2005 of $8.0 million, up 45% from $5.5 million for the third quarter of 2004. Earnings per share were $0.50 per diluted share, an increase of 32% from $0.38 per diluted share one year ago. Return on average assets and return on average equity for the third quarter 2005 were 1.36% and 14.45%, respectively, compared to 1.16% and 13.45%, respectively, for the third quarter of the prior year.

Net income for the nine months ended September 30, 2005 increased $5.0 million to $21.0 million, up 31% from $16.0 million for the first nine months of 2004. On a diluted per share basis, net income for the nine months ended September 30, 2005 was $1.33, compared with $1.11 for the same period last year, an increase of 20%. Return on average assets and return on average equity for the nine months ended September 30, 2005 were 1.23% and 13.30%, respectively, compared to 1.16% and 13.53%, respectively for the same period of 2004.

Return on average tangible equity for the third quarter of 2005 improved to 17.35%, compared to 13.46% for the same period last year. For the first nine months of 2005, return on average tangible equity was 16.08%, up from 13.54% for the first nine months of 2004. Return on average tangible equity, a non-GAAP performance measure, is used by Columbia’s management in recognition of the goodwill created by the fourth quarter 2004 acquisition of Bank of Astoria, providing a more consistent comparison with pre-acquisition performance.

Melanie Dressel, President and Chief Executive Officer stated, “Our earnings continue to improve as a result of increased loan volume and interest income. Our total loans have increased over $152 million since the end of 2004, and over $346 million from a year ago. Well over 45% of the growth from the third quarter of 2004 was in commercial business loans, excluding commercial real estate loans. While the rate of loan growth this year has begun to moderate as expected, we have been able to increase our net interest margin through our continued growth in core deposits, which make up 75% of our total deposits. Our net interest margin was 4.45% for third quarter 2005, up from 4.36% for second quarter 2005 and 4.13% for third quarter 2004.”

“It has been just one year since we acquired Bank of Astoria; we are pleased that it is accretive to earnings as planned.” Ms. Dressel continued. “The management of Bank of Astoria has stayed very focused on successfully growing the business in their market.”

Ms. Dressel noted, “Our total revenue for the third quarter 2005 has reached $30 million, up 30% from $23 million for the same period in 2004. For the first nine months of 2005, total revenue was $85 million, up 26% from $68 million for the first nine months of 2004.” (Total revenue is defined as net interest income plus noninterest income.)

At September 30, 2005, Columbia’s total assets were $2.32 billion, an increase of 7% from $2.18 billion at December 31, 2004. Total loans were $1.51 billion at September 30, 2005, up 11% from $1.36 billion at year-end 2004. Total deposits increased $129.8 million to $1.99 billion during the first nine months of 2005, an increase of 7% from December 31, 2004. Most of the growth occurred in core deposits, which totaled $1.50 billion at September 30, 2005 from $1.38 billion at December 31, 2004, an increase of 8%.

Third Quarter 2005 Operating Results

Net Interest Income

Net interest income increased $5.8 million, or 33%, in the third quarter 2005 compared to the third quarter 2004. The increase is primarily due to significantly increased loan volumes, rising short-term interest rates, and increased core deposits. Columbia’s net interest margin increased to 4.45% in the third quarter of 2005, from 4.13 for the same period in 2004.

Average interest-earning assets increased to $2.14 billion, or 23%, during the third quarter of 2005, compared with $1.74 billion during the third quarter of 2004. The yield on average interest-earning assets increased 89 basis points to 6.02% during the third quarter of 2005, compared with 5.13% during the same period of 2004. Average interest-bearing liabilities increased to $1.65 billion, or 21%, during the third quarter of 2005 compared with $1.36 billion in the same period of 2004. The average cost of interest-bearing liabilities increased 74 basis points to 2.02% in the third quarter of 2005, compared to 1.28% for the same period of 2004.

For the nine months ended September 30, 2005, net interest income increased 30% to $67.0 million from $51.4 million for the same period last year. During the first nine months of 2005, Columbia’s net interest margin increased to 4.39% from 4.16% for the same period of 2004. Average interest-earning assets grew to $2.10 billion during the first nine months of 2005, compared with $1.70 billion for the same period of 2004. The yield on average interest-earning assets increased 64 basis points to 5.81% during the first nine months of 2005, from 5.17% in 2004. In comparison, average interest-bearing liabilities grew to $1.64 billion, or 22%, compared with $1.34 billion for the first nine months of 2004. The cost of average interest-bearing liabilities increased 53 basis points to 1.82% during the first nine months of 2005 from 1.29% in the same period of 2004.

Noninterest income

Total noninterest income for the third quarter 2005 was $6.5 million, an increase of 22% from $5.3 million a year ago. Total noninterest income for the first nine months of 2005 was $18.3 million, an increase of 12% from $16.3 million for the same period of 2004. The increase in noninterest income for both periods is primarily due to increased service charges and fees, as well as continued growth in the merchant services department. Service charges and other fees increased 16% and 7% for the third quarter and first nine months of 2005, respectively, as compared to the same periods in 2004.

Merchant services revenue increased 18% for both the third quarter and first nine months of 2005 as compared to the same periods in 2004.

Noninterest expense

Noninterest expense for the third quarter of 2005 was $18.8 million, an increase of 25% from $15.1 million for the same period in 2004. Noninterest expense for the first nine months of 2005 was $54.6 million, an increase of 22% from $44.6 million for the same period of 2004. These increases were primarily due to the addition of Bank of Astoria during the fourth quarter of 2004. The results of operations for Bank of Astoria are not included in the third quarter 2004 results. Also impacting noninterest expense was the expansion of Columbia’s lending groups, increased compensation and benefits, occupancy, and volume related merchant services processing expenses, as well as data processing expenses.

Nonperforming Assets and Loan Loss Provision

Provision for loan losses for the third quarter of 2005 was $245,000 compared to $250,000 for the third quarter of 2004. The provision for the third quarter of 2005 was $125,000 and $645,000 less than the provision taken during the second and first quarters of 2005, respectively. This decreasing trend in the provision reflects a declining rate of loan growth along with decreased net charge offs. Average loan growth in the first and second quarters exceeded 6% while moderating in the third quarter to 2%. Net charge offs in the first quarter of 2005 were $592,000, compared with second quarter net recoveries of $38,000 and third quarter net charge offs of $42,000. The decline in losses was primarily the result of declining levels of nonperforming loans, continuing collection efforts and stable economic conditions. The ratio of the allowance for credit losses to nonperforming loans was 329% at September 30, 2005, compared with 235% at December 31, 2004 and 333% at September 30, 2004.

Expansion Activities

“As planned, we are continuing to fill in our geographic footprint,” Ms. Dressel noted. “During the third quarter, we opened a long-awaited branch in the downtown area of Puyallup, just a couple of blocks north of the Western Washington fairgrounds, bringing the total number of Puyallup branches to six. With the opening of this additional full-service branch in Puyallup, we are closing our small office in the South Hill Mall in late November 2005. The new branch, which was open Saturdays and Sundays during the Puyallup Fair, has been well received by the community.”

Columbia Banking System, Inc. is a Tacoma-based bank holding company whose wholly owned bank subsidiaries are Columbia Bank and Bank of Astoria, which was acquired October 1, 2004. Columbia Bank is a Washington state-chartered full-service commercial bank with 36 banking offices in Pierce, King, Cowlitz, Kitsap and Thurston counties. Bank of Astoria, a federally insured commercial bank headquartered in Astoria, Oregon, operates four branches in Clatsop County: Astoria, Warrenton, Seaside and Cannon Beach; and one branch in Tillamook County: Manzanita. 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, 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,” and “anticipate” and words of similar construction are intended in part to help identify forward looking statements. Future events are difficult to predict, and the expectations described above are 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, national and international 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 among financial institutions increases significantly; (6) legislation or regulatory requirements or changes adversely affect the businesses in which Columbia is engaged.

FINANCIAL STATISTICS

Columbia Banking System, Inc.

Unaudited

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except per share amounts)	2005			2004			2005			2004
Earnings
Net interest income	$	23,331		$	17,567		$	66,978		$	51,415
Provision for loan losses		245			250			1,505			550
Noninterest income		6,516			5,336			18,318			16,321
Noninterest expense		18,793			15,061			54,584			44,589
Net income		7,952			5,483			21,048			16,048
Per Share
Net income (basic)	$	0.50		$	0.38		$	1.34		$	1.13
Net income (diluted)		0.50			0.38			1.33			1.11
Averages
Total assets	$	2,325,262		$	1,885,892		$	2,282,015		$	1,840,178
Interest-earning assets		2,136,229			1,742,778			2,097,852			1,700,899
Loans		1,534,281			1,147,746			1,481,255			1,141,595
Securities		598,204			550,203			614,231			519,948
Deposits		1,948,022			1,681,896			1,895,919			1,635,349
Core deposits		1,451,054			1,243,860			1,409,299			1,190,589
Shareholders’ Equity		218,308			162,133			211,605			158,495
Financial Ratios
Return on average assets		1.36	%		1.16	%		1.23	%		1.16	%
Return on average equity		14.45			13.45			13.30			13.53
Average equity to average assets		9.39			8.60			9.27			8.61
Return on average tangible equity(1)		17.35			13.46			16.08			13.54
Net interest margin		4.45			4.13			4.39			4.16
Efficiency ratio (tax equivalent) (2)		61.26			64.14			62.21			63.90
	September 30,						December 31,
	2005			2004			2004
Period end
Total assets	$	2,323,216		$	1,936,048		$	2,177,550
Loans		1,511,386			1,165,340			1,359,743
Allowance for loan losses		20,790			19,927			19,881
Securities		592,467			608,939			642,759
Deposits		1,993,800			1,688,437			1,864,028
Core deposits		1,495,487			1,246,958			1,382,235
Shareholders’ equity		221,873			169,939			203,154
Book value per share		14.04			11.90			13.03
Tangible book value per share		11.93			11.90			10.87
Nonperforming assets
Nonaccrual loans	$	6,165		$	5,743		$	8,222
Restructured loans		151			239			227
Personal property owned		—			615			—
Real estate owned		—			680			680
Total nonperforming assets	$	6,316		$	7,277		$	9,129
Nonperforming loans to period-end loans		0.42	%		0.51	%		0.62	%
Nonperforming assets to period-end assets		0.27			0.38			0.42
Allowance for loan losses to period-end loans		1.38			1.71			1.46
Allowance for loan losses to nonperforming loans		329.16			333.12			235.31
Allowance for loan losses to nonperforming assets		329.16			273.84			217.78
Net loan charge-offs	$	596	(3)	$	884	(4)	$	2,742	(5)

⁽¹⁾ Annualized net income, excluding core deposit intangible asset amortization, divided by average daily shareholders’ equity, excluding average goodwill and average core deposit intangible asset.

⁽²⁾ Noninterest expense divided by the sum of net interest income and noninterest income on a tax equivalent basis, excluding nonrecurring income and expense, such as gains/losses on investment securities and net cost (gain) of OREO.

⁽³⁾ For the nine months ended September 30, 2005.

⁽⁴⁾ For the nine months ended September 30, 2004.

⁽⁵⁾ For the twelve months ended December 31, 2004.

QUARTERLY FINANCIAL STATISTICS

Columbia Banking System, Inc.

Unaudited

	Three Months Ended
(in thousands, except per share amounts)	Sept 30 2005			Jun 30 2005			Mar 31 2005			Dec 31 2004			Sept 30 2004
Earnings
Net interest income	$	23,331		$	22,346		$	21,301		$	20,528		$	17,567
Provision for loan losses		245			370			890			445			250
Noninterest income		6,516			6,128			5,674			5,923			5,336
Noninterest expense		18,793			18,514			17,277			16,737			15,061
Net income		7,952			6,798			6,298			6,465			5,483
Per Share
Net income [basic]		0.50			0.44			0.40			0.42			0.38
Net income [diluted]		0.50			0.43			0.40			0.41			0.38
Averages
Total assets	$	2,325,262		$	2,297,297		$	2,222,355		$	2,154,285		$	1,885,892
Interest-earning assets		2,136,229			2,113,384			2,042,917			1,973,690			1,742,778
Loans		1,534,281			1,498,990			1,409,119			1,320,260			1,147,746
Securities		598,204			612,455			632,410			650,411			550,203
Deposits		1,948,022			1,874,208			1,864,610			1,854,809			1,681,896
Core deposits		1,451,054			1,397,353			1,378,695			1,381,334			1,243,860
Shareholders’ Equity		218,308			209,864			206,511			201,934			162,133
Financial Ratios
Return on average assets		1.36	%		1.19	%		1.15	%		1.19	%		1.16	%
Return on average equity		14.45			12.99			12.37			12.74			13.45
Average equity to average assets		9.39			9.14			9.29			9.37			8.60
Return on average tangible equity		17.35			15.80			15.13			15.63			13.46
Net interest margin		4.45			4.36			4.35			4.26			4.13
Efficiency ratio (tax equivalent)		61.26			63.22			62.18			61.40			64.14
Period end
Total assets	$	2,323,216		$	2,326,564		$	2,243,739		$	2,177,550		$	1,936,048
Loans		1,511,386			1,510,043			1,436,820			1,359,743			1,165,340
Allowance for loan losses		20,790			20,587			20,179			19,881			19,927
Securities		592,467			609,574			619,140			642,759			608,939
Deposits,		1,993,800			1,899,033			1,870,096			1,864,028			1,688,437
Core deposits		1,495,487			1,417,600			1,393,695			1,382,235			1,246,958
Shareholders’ equity		221,873			214,788			204,754			203,154			169,939
Book value per share		14.04			13.68			13.11			13.03			11.90
Tangible book value per share		11.93			11.56			10.96			10.87			11.90
Nonperforming assets
Nonaccrual loans	$	6,165		$	6,304		$	7,183		$	8,222		$	5,743
Restructured loans		151			178			205			227			239
Personal property owned		—			—			—			—			615
Real estate owned		—			—			—			680			680
Total nonperforming assets	$	6,316		$	6,482		$	7,388		$	9,129		$	7,277
Nonperforming loans to period-end loans		0.42	%		0.43	%		0.51	%		0.62	%		0.51	%
Nonperforming assets to period-end assets		0.27			0.28			0.33			0.42			0.38
Allowance for loan losses to period-end loans		1.38			1.36			1.40			1.46			1.71
Allowance for loan losses to nonperforming loans		329.16			317.60			273.13			235.31			333.12
Allowance for loan losses to nonperforming assets		329.16			317.60			273.13			217.78			273.84
Net loan charge-offs (recoveries)	$	42		$	(38	)	$	592		$	1,858		$	92

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

Columbia Banking System, Inc.

(Unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands except per share)	2005		2004			2005			2004
Interest Income
Loans	$	26,080	$	16,604		$	72,215		$	49,068
Securities available for sale		5,628		5,162			16,936			14,813
Securities held to maturity		16		27			48			81
Deposits with banks		31		144			55			322
Total interest income		31,755		21,937			89,254			64,284
Interest Expense
Deposits		6,871		4,051			17,873			11,928
Federal Home Loan Bank advances		1,100		23			3,151			103
Long-term obligations		412		296			1,140			838
Other borrowings		41		—			112			—
Total interest expense		8,424		4,370			22,276			12,869
Net Interest Income		23,331		17,567			66,978			51,415
Provision for loan losses		245		250			1,505			550
Net interest income after provision for loan losses		23,086		17,317			65,473			50,865
Noninterest Income
Service charges and other fees		2,955		2,554			8,388			7,826
Mortgage banking		189		169			947			1,333
Merchant services fees		2,355		2,002			6,392			5,405
Loss on sale of investment securities, net		—		—			—			(6	)
Bank owned life insurance (BOLI)		400		338			1,184			934
Other		617		273			1,407			829
Total noninterest income		6,516		5,336			18,318			16,321
Noninterest Expense
Compensation and employee benefits		9,434		7,824			28,140			23,485
Occupancy		2,588		1,900			7,497			5,986
Merchant processing		906		819			2,454			2,221
Advertising and promotion		535		478			1,574			1,643
Data processing		733		616			2,169			1,694
Legal & professional services		891		1,018			2,589			2,314
Taxes, licenses & fees		529		421			1,480			1,210
Net cost (gain) of other real estate owned		1		(89	)		(8	)		(15	)
Other		3,176		2,074			8,689			6,051
Total noninterest expense		18,793		15,061			54,584			44,589
Income before income taxes		10,809		7,592			29,207			22,597
Provision for income taxes		2,857		2,109			8,159			6,549
Net Income	$	7,952	$	5,483		$	21,048		$	16,048
Net income per common share:
Basic	$	0.50	$	0.38		$	1.34		$	1.13
Diluted		0.50		0.38			1.33			1.11
Dividends paid per common share		0.11		0.07			0.27			0.19
Average number of common shares outstanding		15,746		14,266			15,672			14,218
Average number of diluted common shares outstanding		15,940		14,481			15,852			14,439

CONSOLIDATED CONDENSED BALANCE SHEETS

Columbia Banking System, Inc.

(Unaudited)

(in thousands)			September 30, 2005			December 31, 2004
Assets
Cash and due from banks			$	88,772		$	54,287
Interest-earning deposits with banks				1,818			369
Total cash and cash equivalents				90,590			54,656
Securities available for sale at fair value (amortized cost of $579,429 and $627,519 respectively)				579,240			628,897
Securities held to maturity (fair value of $2,847 and $3,199 respectively)				2,774			3,101
Federal Home Loan Bank stock				10,453			10,761
Loans held for sale				6,704			6,019
Loans, net of unearned income of ($3,037) and ($2,839) respectively				1,511,386			1,359,743
Less: allowance for loan losses				20,790			19,881
Loans, net				1,490,596			1,339,862
Interest receivable				10,460			9,582
Premises and equipment, net				44,815			44,774
Real estate owned				—			680
Goodwill				29,723			29,723
Other assets				57,861			49,495
Total Assets			$	2,323,216		$	2,177,550
Liabilities and Shareholders’ Equity
Deposits:
Noninterest-bearing			$	465,122		$	392,173
Interest-bearing				1,528,678			1,471,855
Total deposits				1,993,800			1,864,028
Federal Home Loan Bank advances				59,325			68,700
Other borrowings				2,659			2,500
Long-term subordinated debt				22,295			22,246
Other liabilities				23,264			16,922
Total liabilities				2,101,343			1,974,396
Shareholders’ equity:
Preferred stock (no par value)
Authorized, 2 million shares; none outstanding
	September 30, 2005	December 31, 2004
Common stock (no par value)
Authorized shares	63,034	63,034
Issued and outstanding	15,808	15,594		162,636			159,693
Retained earnings				59,368			42,552
Accumulated other comprehensive income - Unrealized (losses) gains on securities available for sale, net of tax				(131	)		909
Total shareholders’ equity				221,873			203,154
Total Liabilities and Shareholders’ Equity			$	2,323,216		$	2,177,550