10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________________________________ 

FORM 10-Q

________________________________________________________ 

(Mark One)

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

For the quarterly period ended September 30, 2013.

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

For the transition period from              to             .

Commission File Number 0-20288

 ________________________________________________________ 

COLUMBIA BANKING SYSTEM, INC.

(Exact name of issuer as specified in its charter)

 ________________________________________________________ 

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

(253) 305-1900

(Issuer’s telephone number, including area code)

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

________________________________________________________ 

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

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

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

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

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

The number of shares of common stock outstanding at October 31, 2013 was 51,269,655.

TABLE OF CONTENTS

		Page
	PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheets – September 30, 2013 and December 31, 2012	1
	Consolidated Statements of Income - three and nine months ended September 30, 2013 and 2012	2
	Consolidated Statements of Comprehensive Income - three and nine months ended September 30, 2013 and 2012	3
	Consolidated Statements of Changes in Shareholders’ Equity - nine months ended September 30, 2013 and 2012	4
	Consolidated Statements of Cash Flows - nine months ended September 30, 2013 and 2012	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	58
Item 4.	Controls and Procedures	58
	PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	59
Item 1A.	Risk Factors	60
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	60
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Mine Safety Disclosures	60
Item 5.	Other Information	60
Item 6.	Exhibits	61
	Signatures	62

i

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

Columbia Banking System, Inc.

(Unaudited)

			September 30, 2013			December 31, 2012
ASSETS			(in thousands)
Cash and due from banks			$	200,282		$	124,573
Interest-earning deposits with banks			54,470			389,353
Total cash and cash equivalents			254,752			513,926
Securities available for sale at fair value (amortized cost of $1,572,523 and $969,359, respectively)			1,569,651			1,001,665
Federal Home Loan Bank stock at cost			32,833			21,819
Loans held for sale			840			2,563
Loans, excluding covered loans, net of unearned income of ($75,293) and ($7,767), respectively			4,193,732			2,525,710
Less: allowance for loan and lease losses			55,844			52,244
Loans, excluding covered loans, net			4,137,888			2,473,466
Covered loans, net of allowance for loan losses of ($22,737) and ($30,056), respectively			302,160			391,337
Total loans, net			4,440,048			2,864,803
FDIC loss-sharing asset			53,559			96,354
Interest receivable			24,114			14,268
Premises and equipment, net			158,375			118,708
Other real estate owned ($12,730 and $16,311 covered by FDIC loss-share, respectively)			36,273			26,987
Goodwill			345,231			115,554
Other intangible assets, net			27,509			15,721
Other assets			207,112			113,967
Total assets			$	7,150,297		$	4,906,335
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing			$	2,110,887		$	1,321,171
Interest-bearing			3,838,080			2,720,914
Total deposits			5,948,967			4,042,085
Federal Home Loan Bank advances			34,632			6,644
Securities sold under agreements to repurchase			25,000			25,000
Other liabilities			95,901			68,598
Total liabilities			6,104,500			4,142,327
Commitments and contingent liabilities
Shareholders’ equity:
	September 30, 2013	December 31, 2012
Preferred stock (no par value)
Authorized shares	2,000	—
Issued and outstanding	9	—	2,217			—
Common stock (no par value)
Authorized shares	63,033	63,033
Issued and outstanding	51,271	39,686	858,596			581,471
Retained earnings			188,192			162,388
Accumulated other comprehensive income (loss)			(3,208		)	20,149
Total shareholders’ equity			1,045,797			764,008
Total liabilities and shareholders’ equity			$	7,150,297		$	4,906,335

See accompanying Notes to unaudited Consolidated Financial Statements.

1

CONSOLIDATED STATEMENTS OF INCOME

Columbia Banking System, Inc.

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2013			2012			2013			2012
	(in thousands except per share amounts)
Interest Income
Loans	$	74,125		$	52,600		$	196,990		$	168,875
Taxable securities	4,935			4,218			14,059			14,414
Tax-exempt securities	2,483			2,422			7,289			7,442
Federal funds sold and deposits in banks	56			229			290			564
Total interest income	81,599			59,469			218,628			191,295
Interest Expense
Deposits	929			1,339			3,072			4,679
Federal Home Loan Bank advances	135			745			(493		)	2,229
Prepayment charge on Federal Home Loan Bank advances	—			—			1,548			—
Other borrowings	120			120			615			358
Total interest expense	1,184			2,204			4,742			7,266
Net Interest Income	80,415			57,265			213,886			184,029
Provision for loan and lease losses	4,260			2,875			5,260			11,125
Provision (recapture) for losses on covered loans	(947		)	(3,992		)	(1,679		)	23,381
Net interest income after provision (recapture) for loan and lease losses	77,102			58,382			210,305			149,523
Noninterest Income
Service charges and other fees	13,357			7,609			34,511			22,222
Merchant services fees	2,070			2,054			5,934			6,167
Investment securities gains, net	—			—			462			62
Bank owned life insurance	904			747			2,610			2,177
Change in FDIC loss-sharing asset	(11,826		)	(12,951		)	(35,446		)	(14,787		)
Other	3,117			1,630			8,017			4,650
Total noninterest income	7,622			(911		)	16,088			20,491
Noninterest Expense
Compensation and employee benefits	33,287			21,523			90,597			64,484
Occupancy	9,264			4,886			21,560			15,310
Merchant processing	951			921			2,660			2,724
Advertising and promotion	1,165			1,341			3,195			3,342
Data processing and communications	4,285			2,499			10,503			7,263
Legal and professional fees	2,421			2,783			9,975			6,221
Taxes, licenses and fees	1,446			1,124			4,037			3,594
Regulatory premiums	1,372			775			3,406			2,560
Net benefit of operation of other real estate owned	(777		)	(1,069		)	(6,106		)	(536		)
Amortization of intangibles	1,666			1,093			4,388			3,362
FDIC clawback liability expense (recovery)	(188		)	334			242			100
Other	9,822			4,726			22,810			16,689
Total noninterest expense	64,714			40,936			167,267			125,113
Income before income taxes	20,010			16,535			59,126			44,901
Income tax provision	6,734			4,655			19,083			12,220
Net Income	$	13,276		$	11,880		$	40,043		$	32,681
Earnings per common share
Basic	$	0.26		$	0.30		$	0.84		$	0.82
Diluted	$	0.25		$	0.30		$	0.83		$	0.82
Dividends paid per common share	$	0.10		$	0.30		$	0.30		$	0.89
Weighted average number of common shares outstanding	50,834			39,289			47,032			39,248
Weighted average number of diluted common shares outstanding	52,297			39,291			47,947			39,251

See accompanying Notes to unaudited Consolidated Financial Statements.

2

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Columbia Banking System, Inc.

(Unaudited)

	Three Months Ended
	September 30,
	2013		2012
	(in thousands)
Net income as reported	$	13,276	$	11,880
Other comprehensive income, net of tax:
Net unrealized holding gain from available for sale securities arising during the period, net of tax of ($3,235) and ($1,432)	5,943		2,631
Amortization of unrecognized net actuarial loss included in net periodic pension cost, net of tax of ($33) and ($7)	59		13
Other comprehensive income	6,002		2,644
Total comprehensive income	$	19,278	$	14,524

	Nine Months Ended
	September 30,
	2013			2012
	(in thousands)
Net income as reported	$	40,043		$	32,681
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) from securities:
Net unrealized holding gain (loss) from available for sale securities arising during the period, net of tax of $12,238 and ($1,345)	(22,480		)	3,355
Reclassification adjustment of net gain from sale of available for sale securities included in income, net of tax of $163 and $23	(299		)	(39		)
Net unrealized gain (loss) from securities, net of reclassification adjustment	(22,779		)	3,316
Pension plan liability adjustment:
Net unrealized loss from unfunded defined benefit plan liability arising during the period, net of tax of $412 and $0	(756		)	—
Amortization of unrecognized net actuarial loss included in net periodic pension cost, net of tax of ($98) and ($31)	178			29
Pension plan liability adjustment, net	(578		)	29
Other comprehensive income (loss)	(23,357		)	3,345
Total comprehensive income	$	16,686		$	36,026

See accompanying Notes to unaudited Consolidated Financial Statements.

3

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Columbia Banking System, Inc.

(Unaudited)

	Preferred Stock			Common Stock					Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareholders’ Equity
	Number of Shares	Amount		Number of Shares		Amount
	(in thousands)
Balance at January 1, 2012	—	$	—	39,506		$	579,136		$	155,069		$	25,133		$	759,338
Net income	—	—		—		—			32,681			—			32,681
Other comprehensive income	—	—		—		—			—			3,345			3,345
Issuance of common stock - stock option and other plans	—	—		40		713			—			—			713
Issuance of common stock - restricted stock awards, net of canceled awards	—	—		143		1,152			—			—			1,152
Cash dividends paid on common stock	—	—		—		—			(35,252		)	—			(35,252		)
Balance at September 30, 2012	—	$	—	39,689		$	581,001		$	152,498		$	28,478		$	761,977
Balance at January 1, 2013	—	$	—	39,686		$	581,471		$	162,388		$	20,149		$	764,008
Net income	—	—		—		—			40,043			—			40,043
Other comprehensive loss	—	—		—		—			—			(23,357		)	(23,357		)
Issuance of preferred stock, common stock and warrants	9	2,217		11,380		273,964			—			—			276,181
Activity in deferred compensation plan	—	—		—		517			—			—			517
Issuance of common stock - stock option and other plans	—	—		68		1,154			—			—			1,154
Issuance of common stock - restricted stock awards, net of canceled awards	—	—		153		1,881			—			—			1,881
Purchase and retirement of common stock	—	—		(16	)	(391		)	—			—			(391		)
Preferred dividends	—	—		—		—			(20		)	—			(20		)
Cash dividends paid on common stock	—	—		—		—			(14,219		)	—			(14,219		)
Balance at September 30, 2013	9	$	2,217	51,271		$	858,596		$	188,192		$	(3,208	)	$	1,045,797

See accompanying Notes to unaudited Consolidated Financial Statements.

4

CONSOLIDATED STATEMENTS OF CASH FLOWS

Columbia Banking System, Inc.

(Unaudited)

	Nine Months Ended September 30,
	2013			2012
	(in thousands)
Cash Flows From Operating Activities
Net Income	$	40,043		$	32,681
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan and lease losses on noncovered and covered loans	3,581			34,506
Stock-based compensation expense	1,881			1,152
Depreciation, amortization and accretion	30,216			45,873
Investment securities gain, net	(462		)	(62		)
Net realized gain on sale of other assets	(107		)	(35		)
Net realized gain on sale of other real estate owned	(8,745		)	(8,604		)
Write-down on other real estate owned	1,929			7,001
Net change in:
Loans held for sale	1,723			(1,452		)
Interest receivable	(9,846		)	(1,300		)
Interest payable	(88		)	(374		)
Other assets	1,805			(5,223		)
Other liabilities	(2,114		)	(3,881		)
Net cash provided by operating activities	59,816			100,282
Cash Flows From Investing Activities
Loans originated and acquired, net of principal collected	(166,905		)	(72,180		)
Purchases of:
Securities available for sale	(292,744		)	(87,346		)
Premises and equipment	(10,087		)	(12,404		)
Proceeds from:
FDIC reimbursement on loss-sharing asset	7,871			49,194
Sales of securities available for sale	166,881			3,845
Principal repayments and maturities of securities available for sale	241,388			163,584
Sales of other assets	1,117			25
Sales of covered other real estate owned	19,222			25,202
Sales of other real estate and other personal property owned	10,779			15,069
Capital improvements on other real estate properties	—			(11		)
Acquisition of intangible assets	(919		)	—
Net cash paid in acquisition	(154,170		)	—
Other investing activities	(522		)	—
Net cash (used in) provided by investing activities	(178,089		)	84,978
Cash Flows From Financing Activities
Net increase (decrease) in deposits	23,475			123,326
Proceeds from:
Federal Home Loan Bank advances	1,144,100			—
Federal Reserve Bank borrowings	50			—
Exercise of stock options	1,154			713
Payments for:
Repayment of Federal Home Loan Bank advances	(1,244,000		)	(5,744		)
Repayment of Federal Reserve Bank borrowings	(50		)	—
Common stock dividends	(14,219		)	(35,252		)
Preferred stock dividends	(20		)	—
Repayment of long-term subordinated debt	(51,000		)	—
Purchase and retirement of common stock	(391		)	—
Net cash used in financing activities	(140,901		)	83,043
Increase (Decrease) in cash and cash equivalents	(259,174		)	268,303
Cash and cash equivalents at beginning of period	513,926			294,289
Cash and cash equivalents at end of period	$	254,752		$	562,592
Supplemental Information:
Cash paid during the year for:
Cash paid for interest	$	4,830		$	7,640
Cash paid for income tax	$	20,221		$	9,605
Non-cash investing and financing activities
Assets acquired in business combinations	$	2,522,078		$	—
Liabilities assumed in business combinations	$	2,091,727		$	—
Loans transferred to other real estate owned	$	17,279		$	15,024
Share-based consideration issued for acquisitions	$	276,181		$	—

See accompanying Notes to unaudited Consolidated Financial Statements.

5

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Columbia Banking System, Inc.

1. Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. The consolidated financial statements include the accounts of the Company, and its wholly owned banking subsidiary Columbia Bank (the “Bank”), and West Coast Trust. All intercompany transactions and accounts have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included. The results of operations for the nine months ended September 30, 2013 are not necessarily indicative of results to be anticipated for the year ending December 31, 2013. The accompanying interim unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes contained in the Company’s 2012 Annual Report on Form 10-K.

Significant Accounting Policies

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

2. Accounting Pronouncements Recently Issued

In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The Update clarifies when it is appropriate for an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. ASU 2013-11 is effective for interim and annual periods beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date, however, retrospective application is also permitted. Adoption of the new guidance is not expected to have a significant impact on the Company's consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The Update requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component and to present either on the face of the statement where net income is presented, or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2012. The Company adopted the ASU 2013-02 reporting requirements during the interim reporting period beginning on January 1, 2013 with no impact to the Company's financial condition or results of operations. See Note 12 to the Consolidated Financial Statements of this report for new disclosures related to accumulated other comprehensive income.

In October 2012, the FASB issued ASU 2012-06, Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution. ASU 2012-06 clarifies that when a reporting entity recognizes an indemnification asset as a result of a government-assisted acquisition of a financial institution and there is a subsequent change in the amount of cash flows expected to be collected on the indemnified asset, the reporting entity should subsequently measure the indemnification asset on the same basis as the underlying loans by taking into account the contractual limitations of the Loss-Sharing Agreement ("LSA"). For amortization of changes in value, the reporting entity should use the term of the indemnification agreement if it is shorter than the term of the acquired loans. ASU 2012-06 is effective for interim and annual periods beginning after December 15, 2012. The Company adopted the ASU as of January 1, 2013. As a result of the adoption of the ASU, an additional $9.9 million of indemnification asset amortization was recorded during the nine months ending September 30, 2013, resulting in a reduction of $6.4 million in net income and $0.13 in diluted earnings per share.

6

3. Business Combinations

West Coast Bancorp

On April 1, 2013, the Company completed its acquisition of West Coast Bancorp ("West Coast"). The Company acquired 100% of the voting equity interests of West Coast. The primary reason for the acquisition was to expand the Company's geographic footprint consistent with its ongoing 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 April 1, 2013 acquisition date. The amounts for other assets, other liabilities and goodwill have been retrospectively adjusted during the current period to reflect the removal of a liability that was recorded by West Coast, as well as the associated impacts to the deferred tax asset (other assets) and goodwill. The adjustment recorded in the current period was a decrease to other liabilities of $1.8 million, a decrease to other assets of $622 thousand and a decrease to goodwill of $1.1 million and no impact to previously reported net income. Initial accounting for deferred taxes, the mortgage repurchase liability and payment system intangible remain incomplete as of September 30, 2013. The amounts currently recognized in the financial statements have been determined provisionally as the completion of a fair value analysis for these items is still in progress.

The application of the acquisition method of accounting resulted in the recognition of goodwill of $229.7 million and a core deposit intangible of $15.3 million, or 0.89% 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:

	April 1, 2013
	(in thousands)
Purchase price as of April 1, 2013	$	540,791
Recognized amounts of identifiable assets acquired and (liabilities assumed), at fair value:
Cash and cash equivalents	$	110,440
Investment securities	730,842
Federal Home Loan Bank stock	11,824
Acquired loans	1,407,798
Premises and equipment	35,884
Other real estate owned	14,708
Core deposit intangible	15,257
Other assets	76,088
Deposits	(1,883,407		)
Federal Home Loan Bank advances	(128,885		)
Junior subordinated debentures	(51,000		)
Other liabilities	(28,435		)
Total fair value of identifiable net assets	311,114
Goodwill	$	229,677

See Note 9, 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 April 1, 2013 to September 30, 2013. 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.

7

The following table presents certain unaudited pro forma information for illustrative purposes only, for the nine month periods ended September 30, 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 investments securities been recorded at fair value as of 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 will differ from the unaudited pro forma information presented.

	Unaudited Pro Forma
	Nine Months Ended September 30,
	2013		2012
	(in thousands)
Total revenues (net interest income plus noninterest income)	$	252,392	$	322,941
Net income	$	53,053	$	67,162
Earnings per share - basic	$	1.04	$	1.29
Earnings per share - diluted	$	1.01	$	1.29

In connection with the West Coast acquisition, Columbia recognized $17.6 million of acquisition-related expenses for the nine month period ended September 30, 2013. The acquisition-related expenses were excluded from the table above.

4. Securities

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

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
September 30, 2013
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	866,128	$	12,538	$	(16,997	)	$	861,669
State and municipal securities	344,053		13,824		(2,982		)	354,895
U.S. government agency and government-sponsored enterprise securities	335,989		483		(8,942		)	327,530
U.S. government securities	21,074		—		(657		)	20,417
Other securities	5,279		27		(166		)	5,140
Total	$	1,572,523	$	26,872	$	(29,744	)	$	1,569,651
December 31, 2012
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	561,076	$	16,719	$	(5,426	)	$	572,369
State and municipal securities	265,070		20,893		(388		)	285,575
U.S. government agency and government-sponsored enterprise securities	120,085		851		(435		)	120,501
U.S. government securities	19,804		39		(15		)	19,828
Other securities	3,324		104		(36		)	3,392
Total	$	969,359	$	38,606	$	(6,300	)	$	1,001,665

8

The scheduled contractual maturities of investment securities available for sale at September 30, 2013 are presented as follows:

	September 30, 2013
	Amortized Cost		Fair Value
	(in thousands)
Due within one year	$	23,249	$	23,493
Due after one year through five years	278,538		278,715
Due after five years through ten years	463,423		459,080
Due after ten years	802,034		803,223
Other securities with no stated maturity	5,279		5,140
Total investment securities available-for-sale	$	1,572,523	$	1,569,651

The following table summarizes, as of September 30, 2013, the carrying value of securities pledged as collateral to secure public deposits, borrowings and other purposes as permitted or required by law:

	Carrying Amount
	(in thousands)
To Washington and Oregon State to secure public deposits	$	267,646
To Federal Reserve Bank to secure borrowings	44,526
Other securities pledged	43,325
Total securities pledged as collateral	$	355,497

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2013 and December 31, 2012:

	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
September 30, 2013
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	385,222	$	(12,567	)	$	64,044	$	(4,430	)	$	449,266	$	(16,997	)
State and municipal securities	101,176		(2,935		)	807		(47		)	101,983		(2,982		)
U.S. government agency and government-sponsored enterprise securities	290,257		(8,942		)	—		—			290,257		(8,942		)
U.S. government securities	20,217		(657		)	—		—			20,217		(657		)
Other securities	2,286		(24		)	2,813		(142		)	5,099		(166		)
Total	$	799,158	$	(25,125	)	$	67,664	$	(4,619	)	$	866,822	$	(29,744	)
December 31, 2012
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	167,739	$	(5,090	)	$	12,204	$	(336	)	$	179,943	$	(5,426	)
State and municipal securities	20,413		(383		)	210		(5		)	20,623		(388		)
U.S. government agency and government-sponsored enterprise securities	56,600		(435		)	—		—			56,600		(435		)
U.S. government securities	9,914		(15		)	—		—			9,914		(15		)
Other securities	—		—			964		(36		)	964		(36		)
Total	$	254,666	$	(5,923	)	$	13,378	$	(377	)	$	268,044	$	(6,300	)

9

At September 30, 2013, there were 67 U.S. government agency and government-sponsored enterprise mortgage-backed securities & collateralized mortgage obligations securities in an unrealized loss position, of which six were in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2013.

At September 30, 2013, there were 109 state and municipal government securities in an unrealized loss position, of which two were in a continuous loss position for 12 months or more. The unrealized losses on state and municipal securities were caused by interest rate changes or widening of market spreads subsequent to the purchase of the individual securities. Management monitors published credit ratings of these securities for adverse changes. As of September 30, 2013, none of the rated obligations of state and local government entities held by the Company had a below investment grade credit rating. Because the credit quality of these securities are investment grade and the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2013.

At September 30, 2013, there were 29 U.S. government agency and government-sponsored enterprise securities in an unrealized loss position, none of which were in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not currently intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2013.

At September 30, 2013, there were four U.S. government securities in an unrealized loss position, none of which were in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not currently intend to sell this security nor does the Company consider it more likely than not that it will be required to sell this security before the recovery of amortized cost basis, which may be maturity, the Company does not consider this investment to be other-than-temporarily impaired at September 30, 2013.

At September 30, 2013, there were two other securities in an unrealized loss position, of which one security, a mortgage-backed securities fund, was in a continuous unrealized loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates and the additional risk premium investors are demanding for investment securities with these characteristics. The Company does not consider this investment to be other-than-temporarily impaired at September 30, 2013 as it has the intent and ability to hold the investment for sufficient time to allow for recovery in the market value.

5. Noncovered Loans

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

10

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

	September 30, 2013			December 31, 2012
Noncovered loans:	(in thousands)
Commercial business	$	1,569,343		$	1,155,158
Real estate:
One-to-four family residential	106,686			43,922
Commercial and multifamily residential	2,048,910			1,061,201
Total real estate	2,155,596			1,105,123
Real estate construction:
One-to-four family residential	53,158			50,602
Commercial and multifamily residential	128,120			65,101
Total real estate construction	181,278			115,703
Consumer	362,808			157,493
Less: Net unearned income	(75,293		)	(7,767		)
Total noncovered loans, net of unearned income	4,193,732			2,525,710
Less: Allowance for loan and lease losses	(55,844		)	(52,244		)
Total noncovered loans, net	$	4,137,888		$	2,473,466
Loans held for sale	$	840		$	2,563

At September 30, 2013 and December 31, 2012, the Company had no material foreign activities. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington and Oregon.

The Company has granted loans to officers and directors of the Company and related interests. These loans are made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than the normal risk of collectability. The aggregate dollar amount of these loans was $14.1 million at September 30, 2013 and $14.2 million at December 31, 2012. During the first nine months of 2013, advances on related party loans totaled $1.9 million and repayments totaled $2.0 million.

At September 30, 2013 and December 31, 2012, $649.8 million and $443.4 million of commercial and residential real estate loans were pledged as collateral on Federal Home Loan Bank borrowings and additional borrowing capacity. The Company has also pledged $49.4 million and $13.8 million of commercial loans to the Federal Reserve Bank for additional borrowing capacity at September 30, 2013 and December 31, 2012, respectively.

The following is an analysis of noncovered, nonaccrual loans as of September 30, 2013 and December 31, 2012:

	September 30, 2013				December 31, 2012
	Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans		Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans
Noncovered loans:	(in thousands)
Commercial business
Secured	$	11,839	$	18,194	$	9,037	$	17,821
Unsecured	156		181		262		262
Real estate:
One-to-four family residential	2,220		4,058		2,349		2,672
Commercial & multifamily residential
Commercial land	890		1,299		4,076		7,491
Income property	7,756		11,560		8,520		10,815
Owner occupied	5,379		7,271		6,608		7,741
Real estate construction:
One-to-four family residential
Land and acquisition	3,226		8,134		3,084		6,704
Residential construction	459		1,941		1,816		2,431
Consumer	4,036		6,012		1,643		1,940
Total	$	35,961	$	58,650	$	37,395	$	57,877

11

The following is an aging of the recorded investment of the noncovered loan portfolio as of September 30, 2013 and December 31, 2012:

	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
September 30, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,465,682	$	6,520	$	3,306	$	1	$	9,827	$	11,839	$	1,487,348
Unsecured	74,756		72		4		—		76		156		74,988
Real estate:
One-to-four family residential	99,413		2,232		224		—		2,456		2,220		104,089
Commercial & multifamily residential
Commercial land	133,942		—		—		—		—		890		134,832
Income property	1,125,012		7,687		—		—		7,687		7,756		1,140,455
Owner occupied	728,002		5,465		2,048		—		7,513		5,379		740,894
Real estate construction:
One-to-four family residential
Land and acquisition	9,014		—		—		—		—		3,226		12,240
Residential construction	39,928		—		—		—		—		459		40,387
Commercial & multifamily residential
Income property	88,040		—		—		—		—		—		88,040
Owner occupied	39,064		—		—		—		—		—		39,064
Consumer	325,614		1,375		369		1		1,745		4,036		331,395
Total	$	4,128,467	$	23,351	$	5,951	$	2	$	29,304	$	35,961	$	4,193,732
	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,091,770	$	4,259	$	1,485	$	—	$	5,744	$	9,037	$	1,106,551
Unsecured	44,817		252		12		—		264		262		45,343
Real estate:
One-to-four family residential	41,508		193		142		—		335		2,349		44,192
Commercial & multifamily residential
Commercial land	42,818		311		122		—		433		4,076		47,327
Income property	603,339		2,726		227		—		2,953		8,520		614,812
Owner occupied	387,525		1,040		—		—		1,040		6,608		395,173
Real estate construction:
One-to-four family residential
Land and acquisition	15,412		—		—		—		—		3,084		18,496
Residential construction	29,848		—		—		—		—		1,816		31,664
Commercial & multifamily residential
Income property	28,342		—		—		—		—		—		28,342
Owner occupied	36,211		—		—		—		—		—		36,211
Consumer	155,207		387		362		—		749		1,643		157,599
Total	$	2,476,797	$	9,168	$	2,350	$	—	$	11,518	$	37,395	$	2,525,710

12

The following is an analysis of impaired loans as of September 30, 2013 and December 31, 2012:

	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
September 30, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,482,076	$	5,272	$	573	$	637	$	241	$	4,698	$	5,900
Unsecured	74,945		43		43		43		43		—		—
Real estate:
One-to-four family residential	102,547		1,542		335		358		103		1,207		2,127
Commercial & multifamily residential
Commercial land	134,266		566		—		—		—		566		899
Income property	1,131,432		9,023		—		—		—		9,023		13,319
Owner occupied	730,787		10,107		601		599		26		9,507		13,207
Real estate construction:
One-to-four family residential
Land and acquisition	9,744		2,496		115		114		73		2,381		3,149
Residential construction	40,387		—		—		—		—		—		—
Commercial & multifamily residential
Income property	88,040		—		—		—		—		—		—
Owner occupied	39,064		—		—		—		—		—		—
Consumer	331,273		122		—		—		—		122		121
Total	$	4,164,561	$	29,171	$	1,667	$	1,751	$	486	$	27,504	$	38,722
	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,101,689	$	4,862	$	690	$	1,994	$	113	$	4,172	$	6,769
Unsecured	45,251		92		92		92		92		—		—
Real estate:
One-to-four family residential	42,103		2,089		345		364		112		1,744		1,902
Commercial & multifamily residential
Commercial land	44,672		2,655		—		—		—		2,655		5,727
Income property	606,656		8,156		2,670		2,727		1,040		5,486		7,860
Owner occupied	383,269		11,904		608		610		38		11,296		14,642
Real estate construction:
One-to-four family residential
Land and acquisition	15,677		2,819		—		—		—		2,819		4,813
Residential construction	29,707		1,957		—		—		—		1,957		2,570
Commercial & multifamily residential
Income property	28,342		—		—		—		—		—		—
Owner occupied	36,211		—		—		—		—		—		—
Consumer	157,472		127		—		—		—		127		127
Total	$	2,491,049	$	34,661	$	4,405	$	5,787	$	1,395	$	30,256	$	44,410

13

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

	Three Months Ended September 30,										Nine Months Ended September 30,
	2013					2012					2013				2012
	Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans			Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans			Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans		Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans
Noncovered loans:	(in thousands)
Commercial business
Secured	$	6,631	$	(25	)	$	10,306	$	6		$	5,774	$	12	$	10,008	$	14
Unsecured	47		1			118		1			68		2		118		5
Real estate:
One-to-four family residential	1,537		16			2,014		(9		)	1,677		47		2,140		—
Commercial & multifamily residential
Commercial land	1,456		48			3,079		—			2,085		48		3,242		—
Income property	10,358		22			7,577		55			9,534		168		7,830		60
Owner occupied	9,822		231			13,185		244			10,721		740		13,668		762
Real estate construction:
One-to-four family residential
Land and acquisition	2,889		1			3,213		—			2,794		4		4,876		—
Residential construction	—		—			2,792		12			526		—		3,539		17
Commercial & multifamily residential
Income property	—		—			1,877		—			—		—		3,961		—
Consumer	423		2			1,045		11			275		5		1,359		33
Total	$	33,163	$	296		$	45,206	$	320		$	33,454	$	1,026	$	50,741	$	891

There were no Troubled Debt Restructurings ("TDR") during the three months ended September 30, 2013 or nine months ended September 30, 2012. The following is an analysis of loans classified as TDR during the nine months ended September 30, 2013:

	Nine months ended September 30, 2013
	Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Noncovered loans:	(dollars in thousands)
Commercial business:
Secured	1	$	343	$	343
Real estate:
Commercial and multifamily residential:
Commercial land	1	137		137
Income property	3	943		943
Owner occupied	1	172		172
Real estate construction:
One-to-four family residential:
Land and acquisition	1	117		117
Total	7	$	1,712	$	1,712

The Company's loans classified as TDR are loans that have been modified or the borrower has been granted special concessions due to financial difficulties that, if not for the challenges of the borrower, the Company would not otherwise consider. The Company had commitments to lend $1.7 million and $236 thousand of additional funds on loans classified as TDR as of September 30, 2013 and December 31, 2012, respectively. The TDR modifications or concessions are made to increase the likelihood that these borrowers with financial difficulties will be able to satisfy their debt obligations as amended. Credit losses for loans classified as TDR are measured on the same basis as impaired loans. For impaired loans, an allowance is

14

established when the collateral value less selling costs (or discounted cash flows or observable market price) of the impaired loan is lower than the recorded investment of that loan.The Company did not have any loans modified as TDR within the past twelve months that have defaulted during the nine months ended September 30, 2013.

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

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

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

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

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

The general valuation allowance is systematically calculated quarterly using quantitative and qualitative information about specific loan classes. The minimum required level an entity develops a methodology to determine its allowance for loan and lease losses is by general categories of loans, such as commercial business, real estate, and consumer. However, the Company’s methodology in determining its allowance for loan and lease losses is prepared in a more detailed manner at the loan class level, utilizing specific categories such as commercial business secured, commercial business unsecured, real estate commercial land, and real estate income property multifamily.

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

The $4.3 million provision expense reflects a change in estimate for the allowance for loan losses for loans acquired in the West Coast Bank transaction. The change was the result of moving from the initial fair value accounting for those loans, which included a net loan discount of $88.8 million, to our standard allowance methodology. Our standard allowance methodology takes into account the $19.7 million in net loan discount accretion recorded in earnings subsequent to the acquisition. The provision resulted in a $2.8 million reduction to net income and reduced earnings per diluted common share by $0.05 and $0.06 for the current quarter and year-to-date period, respectively.

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

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

We have used the same methodology for ALLL calculations during the nine months ended September 30, 2013 and 2012. Adjustments to the percentages of the ALLL allocated to loan categories are made based on trends with respect to delinquencies and problem loans within each class of loans. The Company reviews the ALLL quantitative and qualitative methodology on a quarterly basis and makes adjustments when appropriate. The Company continues to strive towards maintaining a conservative approach to credit quality and will continue to prudently adjust our ALLL as necessary in order to maintain adequate reserves. The Company carefully monitors the loan portfolio and continues to emphasize the importance of credit quality.

15

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

The following tables show a detailed analysis of the allowance for loan and lease losses for noncovered loans for the three and nine months ended September 30, 2013 and 2012:

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended September 30, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	30,572	$	(392	)	$	743	$	3,187		$	34,110	$	241	$	33,869
Unsecured	821		(363		)	111		491			1,060		43		1,017
Real estate:
One-to-four family residential	672		(47		)	39		677			1,341		103		1,238
Commercial & multifamily residential
Commercial land	691		(9		)	126		(260		)	548		—		548
Income property	9,695		(132		)	154		85			9,802		—		9,802
Owner occupied	4,515		(516		)	52		637			4,688		26		4,662
Real estate construction:
One-to-four family residential
Land and acquisition	769		—			366		(410		)	725		73		652
Residential construction	204		—			95		426			725		—		725
Commercial & multifamily residential
Income property	241		—			—		17			258		—		258
Owner occupied	80		—			—		(12		)	68		—		68
Consumer	2,455		(453		)	112		405			2,519		—		2,519
Unallocated	983		—			—		(983		)	—		—		—
Total	$	51,698	$	(1,912	)	$	1,798	$	4,260		$	55,844	$	486	$	55,358
	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Nine months ended September 30, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	27,270	$	(2,236	)	$	1,135	$	7,941		$	34,110	$	241	$	33,869
Unsecured	753		(794		)	184		917			1,060		43		1,017
Real estate:
One-to-four family residential	694		(191		)	180		658			1,341		103		1,238
Commercial & multifamily residential
Commercial land	460		(20		)	153		(45		)	548		—		548
Income property	11,033		(950		)	260		(541		)	9,802		—		9,802
Owner occupied	6,362		(1,084		)	96		(686		)	4,688		26		4,662
Real estate construction:
One-to-four family residential
Land and acquisition	1,171		(32		)	2,541		(2,955		)	725		73		652
Residential construction	635		(101		)	108		83			725		—		725
Commercial & multifamily residential
Income property	316		—			—		(58		)	258		—		258
Owner occupied	102		—			—		(34		)	68		—		68
Consumer	2,437		(1,262		)	353		991			2,519		—		2,519
Unallocated	1,011		—			—		(1,011		)	—		—		—
Total	$	52,244	$	(6,670	)	$	5,010	$	5,260		$	55,844	$	486	$	55,358

16

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended September 30, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	26,505	$	(3,744	)	$	194	$	3,007		$	25,962	$	315	$	25,647
Unsecured	772		(31		)	83		(56		)	768		100		668
Real estate:
One-to-four family residential	673		(49		)	157		(216		)	565		69		496
Commercial & multifamily residential
Commercial land	270		(55		)	—		207			422		1		421
Income property	8,726		(436		)	357		387			9,034		—		9,034
Owner occupied	9,037		(101		)	89		(694		)	8,331		245		8,086
Real estate construction:
One-to-four family residential
Land and acquisition	1,651		(307		)	404		(279		)	1,469		—		1,469
Residential construction	1,197		(18		)	—		3			1,182		—		1,182
Commercial & multifamily residential
Income property	755		—			63		(456		)	362		—		362
Owner occupied	68		—			—		23			91		—		91
Consumer	2,049		(500		)	350		267			2,166		—		2,166
Unallocated	493		—			—		682			1,175		—		1,175
Total	$	52,196	$	(5,241	)	$	1,697	$	2,875		$	51,527	$	730	$	50,797
	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Nine months ended September 30, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	24,745	$	(8,126	)	$	1,184	$	8,159		$	25,962	$	315	$	25,647
Unsecured	689		(52		)	130		1			768		100		668
Real estate:
One-to-four family residential	654		(499		)	202		208			565		69		496
Commercial & multifamily residential
Commercial land	488		(437		)	—		371			422		1		421
Income property	9,551		(3,959		)	710		2,732			9,034		—		9,034
Owner occupied	9,606		(712		)	628		(1,191		)	8,331		245		8,086
Real estate construction:
One-to-four family residential
Land and acquisition	2,331		(809		)	827		(880		)	1,469		—		1,469
Residential construction	864		(617		)	79		856			1,182		—		1,182
Commercial & multifamily residential
Income property	665		(93		)	64		(274		)	362		—		362
Owner occupied	35		—			—		56			91		—		91
Consumer	2,719		(1,968		)	809		606			2,166		—		2,166
Unallocated	694		—			—		481			1,175		—		1,175
Total	$	53,041	$	(17,272	)	$	4,633	$	11,125		$	51,527	$	730	$	50,797

17

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(in thousands)
Balance at beginning of period	$	2,465	$	1,665	$	1,915	$	1,535
Net changes in the allowance for unfunded commitments and letters of credit	200		250		750		380
Balance at end of period	$	2,665	$	1,915	$	2,665	$	1,915

Risk Elements

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

Risk ratings are reviewed and updated whenever appropriate, with more periodic reviews as the risk and dollar value of loss on the loan increases. In the event full collection of principal and interest is not reasonably assured, the loan is appropriately downgraded and, if warranted, placed on nonaccrual status even though the loan may be current as to principal and interest payments. Additionally, we assess whether an impairment of a loan warrants specific reserves or a write-down of the loan.

Pass loans are generally considered to have sufficient sources of repayment in order to repay the loan in full in accordance with all terms and conditions. Special mention loans have potential weaknesses that, if left uncorrected, may result in deterioration of the repayment prospects for the asset or in the Company's credit position at some future date. Loans with a risk rating of Substandard or worse are reported as classified loans in our allowance for loan and lease losses analysis. We review these loans to assess the ability of our borrowers to service all interest and principal obligations and, as a result, the risk rating may be adjusted accordingly. Substandard loans reflect loans where a loss is possible if loan weaknesses are not corrected. Doubtful loans have a high probability of loss, however, the amount of loss has not yet been determined. Loss loans are considered uncollectable and when identified, are charged off.

18

The following is an analysis of the credit quality of our noncovered loan portfolio as of September 30, 2013 and December 31, 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
September 30, 2013	(in thousands)
Noncovered loans:
Commercial business:
Secured	$	1,362,097	$	38,018	$	87,232	$	—	$	1	$	1,487,348
Unsecured	74,705		23		260		—		—		74,988
Real estate:
One-to-four family residential	94,947		1,687		7,455		—		—		104,089
Commercial and multifamily residential:
Commercial land	128,624		2,140		4,068		—		—		134,832
Income property	1,097,644		7,304		35,357		—		150		1,140,455
Owner occupied	721,373		1,521		18,000		—		—		740,894
Real estate construction:
One-to-four family residential:
Land and acquisition	8,003		172		4,065		—		—		12,240
Residential construction	34,950		3,980		1,457		—		—		40,387
Commercial and multifamily residential:
Income property	87,791		—		249		—		—		88,040
Owner occupied	39,064		—		—		—		—		39,064
Consumer	324,274		331		6,789		—		1		331,395
Total	$	3,973,472	$	55,176	$	164,932	$	—	$	152	4,193,732
Less:
Allowance for loan and lease losses											55,844
Noncovered loans, net											$	4,137,888

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

19

7. Changes in Noncovered Other Real Estate Owned ("OREO")

The following tables set forth activity in noncovered OREO for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Noncovered OREO:
Balance at beginning of period	$	24,339		$	13,925		$	10,676		$	22,893
Established through acquisitions	—			—			14,708			—
Transfers in, net of write-downs ($48, $24, $90 and $24, respectively)	4,413			139			9,190			6,527
OREO improvements	—			—			—			11
Additional OREO write-downs	(1,066		)	(458		)	(1,636		)	(4,232		)
Proceeds from sale of OREO property	(4,673		)	(3,170		)	(10,295		)	(15,069		)
Gain on sale of OREO, net	530			439			900			745
Total noncovered OREO at end of period	$	23,543		$	10,875		$	23,543		$	10,875

8. Covered Assets and FDIC Loss-sharing Asset

Covered Assets

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

Ten years and forty-five days after the acquisition dates, the Bank shall pay to the FDIC a clawback in the event the losses from the acquisitions fail to reach stated levels. The amount of the clawback is determined by a formula specified in each individual loss-sharing agreement. As of September 30, 2013, the net present value of the Bank’s estimated clawback liability is $3.8 million, which is included in other liabilities on the consolidated balance sheets.

20

The following is an analysis of our covered loans, net of related allowance for losses as of September 30, 2013 and December 31, 2012:

	September 30, 2013		December 31, 2012
Covered loans:	(dollars in thousands)
Commercial business	$	87,366	$	125,373
Real estate:
One-to-four family residential	44,966		57,150
Commercial and multifamily residential	181,634		233,106
Total real estate	226,600		290,256
Real estate construction:
One-to-four family residential	16,018		25,398
Commercial and multifamily residential	7,146		15,251
Total real estate construction	23,164		40,649
Consumer	37,212		44,516
Subtotal of covered loans	374,342		500,794
Less:
Valuation discount resulting from acquisition accounting	49,445		79,401
Allowance for loan losses	22,737		30,056
Covered loans, net of allowance for loan losses	$	302,160	$	391,337

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

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

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

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

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

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

21

The following table shows the changes in accretable yield for acquired loans for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Balance at beginning of period	$	140,511		$	214,061		$	166,888		$	259,669
Accretion	(12,243		)	(19,571		)	(40,240		)	(69,045		)
Disposals	(5,772		)	(3,146		)	(621		)	(8,218		)
Reclassifications from nonaccretable difference	(3,013		)	(2,861		)	(6,544		)	6,077
Balance at end of period	$	119,483		$	188,483		$	119,483		$	188,483

During the nine months ended September 30, 2013, the Company recorded a provision recapture for losses on covered loans of $1.7 million. Of this amount, $929 thousand was impairment recapture calculated in accordance with ASC 310-30 and $750 thousand was a provision recapture to adjust the allowance for loss calculated under ASC 450-20 for draws on acquired loans. The impact to earnings of the $1.7 million of provision recapture for covered loans was partially offset through noninterest income by a $1.3 million unfavorable adjustment to the change FDIC loss-sharing asset line item.

The changes in the ALLL for covered loans for the three and nine months ended September 30, 2013 and 2012 are summarized as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Balance at beginning of period	$	26,135		$	31,784		$	30,056		$	4,944
Loans charged off	(5,006		)	(977		)	(10,031		)	(2,574		)
Recoveries	2,555			2,342			4,391			3,406
Provision (recovery) for loan losses	(947		)	(3,992		)	(1,679		)	23,381
Balance at end of period	$	22,737		$	29,157		$	22,737		$	29,157

22

The following is an analysis of the credit quality of our covered loan portfolio as of September 30, 2013 and 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
September 30, 2013	(in thousands)
Covered loans:
Commercial business:
Secured	$	56,973	$	2,859	$	24,025	$	—	$	—	$	83,857
Unsecured	3,018		396		95		—		—		3,509
Real estate:
One-to-four family residential	36,419		1,854		6,693		—		—		44,966
Commercial and multifamily residential:
Commercial land	11,978		205		7,796		—		—		19,979
Income property	59,736		3,966		11,907		—		—		75,609
Owner occupied	73,045		114		12,887		—		—		86,046
Real estate construction:
One-to-four family residential:
Land and acquisition	4,688		2,759		2,398		—		—		9,845
Residential construction	2,587		—		3,586		—		—		6,173
Commercial and multifamily residential:
Income property	3,847		—		1,936		—		—		5,783
Owner occupied	1,083		—		280		—		—		1,363
Consumer	33,421		35		3,729		27		—		37,212
Total	$	286,795	$	12,188	$	75,332	$	27	$	—	374,342
Less:
Valuation discount resulting from acquisition accounting											49,445
Allowance for loan losses											22,737
Covered loans, net											$	302,160

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

23

The following table sets forth activity in covered OREO at carrying value for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Covered OREO:
Balance at beginning of period	$	12,854		$	19,079		$	16,311		$	28,126
Transfers in	3,559			3,096			8,089			8,497
Additional OREO write-downs	(199		)	(730		)	(293		)	(2,769		)
Proceeds from sale of OREO property	(5,408		)	(6,822		)	(19,222		)	(25,202		)
Net gain on sale of OREO	1,924			1,888			7,845			7,859
Total covered OREO at end of period	$	12,730		$	16,511		$	12,730		$	16,511

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

FDIC Loss-sharing Asset

At September 30, 2013, the FDIC loss-sharing asset is comprised of a $48.4 million FDIC indemnification asset and a $5.2 million FDIC receivable. The indemnification represents the cash flows the Company expects to collect from the FDIC under the loss-sharing agreements and the FDIC receivable represents the reimbursable amounts from the FDIC that have not yet been received.

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

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

The following table shows a detailed analysis of the FDIC loss-sharing asset for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Balance at beginning of period	$	67,374		$	140,003		$	96,354		$	175,071
Adjustments not reflected in income
Cash received from the FDIC	(1,484		)	(14,881		)	(7,871		)	(49,194		)
FDIC reimbursable losses, net	(505		)	(494		)	522			587
Adjustments reflected in income
Amortization, net	(9,890		)	(9,694		)	(29,470		)	(33,418		)
Loan impairment (recapture)	(758		)	(3,193		)	(1,343		)	18,705
Sale of other real estate	(1,479		)	(1,315		)	(5,076		)	(4,881		)
Write-downs of other real estate	220			1,141			373			4,503
Other	81			110			70			304
Balance at end of period	$	53,559		$	111,677		$	53,559		$	111,677

24

9. Goodwill and Other Intangible Assets

In accordance with the Intangibles – Goodwill and Other topic of the FASB ASC, goodwill is not amortized but is reviewed for potential impairment at the reporting unit level. Management analyzes its goodwill for impairment on an annual basis on July 31 and between annual tests in certain circumstances such as material adverse changes in legal, business, regulatory and economic factors. An impairment loss is recorded to the extent that the carrying amount of goodwill exceeds its implied fair value. During the current quarter, the Company performed an impairment assessment as of July 31, 2013, and concluded that there was no impairment.

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

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Goodwill
Goodwill at beginning of period (1)	$	345,231		$	115,554		$	115,554		$	115,554
Established through acquisitions	—			—			229,677			—
Goodwill at end of period	345,231			115,554			345,231			115,554
Other intangible assets, net
Core deposit intangible:
Gross core deposit intangible balance at beginning of period	47,698			32,441			32,441			32,441
Accumulated amortization at beginning of period	(19,441		)	(14,545		)	(16,720		)	(12,275		)
Core deposit intangible, net at beginning of period	28,257			17,896			15,721			20,166
Established through acquisitions	—			—			15,257			—
CDI current period amortization	(1,667		)	(1,093		)	(4,388		)	(3,363		)
Total core deposit intangible, net at end of period	26,590			16,803			26,590			16,803
Intangible assets not subject to amortization	919			—			919			—
Other intangible assets, net at end of period	27,509			16,803			27,509			16,803
Total goodwill and other intangible assets at end of period	$	372,740		$	132,357		$	372,740		$	132,357

______________

(1) Goodwill at beginning of period has been retrospectively adjusted for the three months ended September 30, 2013 due to adjustments to provisional amounts made related to the West Coast acquisition. See Note 3 to the Consolidated Financial Statements of this report for more information regarding this acquisition.

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

	Amount
	(in thousands)
Year ending December 31,
2013	$	1,657
2014	5,963
2015	4,934
2016	4,195
2017	3,361

25

10. Derivatives and Hedging Activities

The Company periodically enters into certain commercial loan interest rate swap agreements in order to provide commercial loan customers the ability to convert from variable to fixed interest rates. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to a swap agreement. This swap agreement effectively converts the customer’s variable rate loan into a fixed rate. The Company then enters into a corresponding swap agreement with a third party in order to offset its exposure on the variable and fixed components of the customer agreement. As the interest rate swap agreements with the customers and third parties are not designated as hedges under the Derivatives and Hedging topic of the FASB ASC, the instruments are marked to market in earnings. The notional amount of open interest rate swap agreements at September 30, 2013 and December 31, 2012 was $164.5 million and $177.0 million, respectively. There was no impact to the statement of income for the three or nine month periods ending September 30, 2013 and 2012.

The following table presents the fair value of derivatives not designated as hedging instruments at September 30, 2013 and December 31, 2012:

Asset Derivatives

Liability Derivatives

September 30, 2013

December 31, 2012

September 30, 2013

December 31, 2012

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

(in thousands)

Interest rate contracts

Other assets

$

10,187

Other assets

$

14,921

Other liabilities

$

10,187

Other liabilities

$

14,921

11. Shareholders’ Equity

Preferred Stock. In conjunction with the acquisition of West Coast, the Company issued 8,782 shares of mandatorily convertible cumulative participating preferred stock, Series B. The Series B Preferred Stock is not subject to the operation of a sinking fund. The Series B Preferred Stock is not redeemable by the Company and is perpetual with no maturity. The holders of Series B Preferred Stock have no general voting rights. If the Company declares and pays a dividend to its common shareholders, it must declare and pay to its holders of Series B Preferred Stock, on the same date, a dividend in an amount per share of the Series B Preferred Stock that is intended to provide such holders dividends in the amount they would have received if shares of Series B Preferred Stock had been converted into Common Stock as of that date. The outstanding shares of Series B Preferred Stock are convertible into 102,363 shares of Company Common Stock.

Dividends. On January 24, 2013 the Company declared a quarterly cash dividend of $0.10 per share payable on February 20, 2013 to shareholders of record at the close of business February 6, 2013. On April 24, 2013, the Company declared a quarterly cash dividend of $0.10 per common share, and common share equivalent for holders of preferred stock, payable on May 22, 2013 to shareholders of record at the close of business May 8, 2013. On July 25, 2013 the Company declared a quarterly cash dividend of $0.10 per share, and common share equivalent for holders of preferred stock, payable on August 21, 2013 to shareholders of record at the close of business August 7, 2013. Subsequent to quarter end, on October 24, 2013, the Company declared a quarterly cash dividend of $0.11 per share, and common share equivalent for holders of preferred stock, payable on November 20, 2013 to shareholders of record at the close of business November 6, 2013. The payment of cash dividends is subject to Federal regulatory requirements for capital levels and other restrictions. In addition, the cash dividends paid by Columbia Bank to the Company are subject to both Federal and State regulatory requirements.

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12. Accumulated Other Comprehensive Income (Loss)

The following table shows changes in accumulated other comprehensive income (loss) by component for the three and nine month periods ended September 30, 2013:

	Unrealized Gains and Losses on Available-for-Sale Securities (1)			Unrealized Gains and Losses on Pension Plan Liability (1)			Total (1)
Three months ended September 30, 2013	(in thousands)
Beginning balance	$	(7,804	)	$	(1,406	)	$	(9,210	)
Other comprehensive loss before reclassifications	5,943			—			5,943
Amounts reclassified from accumulated other comprehensive income (2)	—			59			59
Net current-period other comprehensive loss	5,943			59			6,002
Ending balance	$	(1,861	)	$	(1,347	)	$	(3,208	)
Nine months ended September 30, 2013
Beginning balance	$	20,918		$	(769	)	$	20,149
Other comprehensive loss before reclassifications	(22,480		)	(756		)	(23,236		)
Amounts reclassified from accumulated other comprehensive income (2)	(299		)	178			(121		)
Net current-period other comprehensive loss	(22,779		)	(578		)	(23,357		)
Ending balance	$	(1,861	)	$	(1,347	)	$	(3,208	)

__________

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

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

The following table shows details regarding the reclassifications from accumulated other comprehensive income for the three and nine month periods ended September 30, 2013:

	Amount Reclassified from Accumulated Other Comprehensive Income						Affected line Item in the Consolidated Statement of Income
	Three Months Ended			Nine Months Ended
	September 30, 2013			September 30, 2013
	(in thousands)
Unrealized gains and losses on available-for-sale securities
	$	—		$	462		Investment securities gains, net
	—			462			Total before tax
	—			(163		)	Income tax provision
	$	—		$	299		Net of tax
Amortization of pension plan liability
Actuarial losses	$	(92	)	$	(276	)	Compensation and employee benefits
	(92		)	(276		)	Total before tax
	33			98			Income tax benefit
	$	(59	)	$	(178	)	Net of tax

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13. Fair Value Accounting and Measurement

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

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

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

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

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

Fair values are determined as follows:

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

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

28

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at September 30, 2013 and December 31, 2012 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

	Fair value		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2		Level 3
September 30, 2013	(in thousands)
Assets
Securities available for sale
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations	$	861,669	$	—	$	861,669	$	—
State and municipal debt securities	354,895		—		354,895		—
U.S. government agency and government-sponsored enterprise securities	327,530		—		327,530		—
U.S. government securities	20,417		20,417		—		—
Other securities	5,140		—		5,140		—
Total securities available for sale	$	1,569,651	$	20,417	$	1,549,234	$	—
Other assets (Interest rate contracts)	$	10,187	$	—	$	10,187	$	—
Liabilities
Other liabilities (Interest rate contracts)	$	10,187	$	—	$	10,187	$	—

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

There were no transfers between Level 1 and Level 2 of the valuation hierarchy during the nine month periods ended September 30, 2013 and 2012. The Company recognizes transfers between levels of the valuation hierarchy based on the valuation level at the end of the reporting period.

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Nonrecurring Measurements

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

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

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

The following tables set forth the Company's assets that were measured using fair value estimates on a nonrecurring basis at September 30, 2013 and 2012.

	Fair value at September 30, 2013		Fair Value Measurements at Reporting Date Using						Losses During the Three Months Ended September 30, 2013			Losses During the Nine Months Ended September 30, 2013
			Level 1		Level 2		Level 3
	(in thousands)
Noncovered OREO	$	3,714	$	—	$	—	$	3,714	$	(1,040	)	$	(1,084	)
Covered OREO	544		—		—		544		(183		)	(248		)
	$	4,258	$	—	$	—	$	4,258	$	(1,223	)	$	(1,332	)

	Fair value at September 30, 2012		Fair Value Measurements at Reporting Date Using						Gains (Losses) During the Three Months Ended September 30, 2012			Losses During the Nine Months Ended September 30, 2012
			Level 1		Level 2		Level 3
	(in thousands)
Impaired loans	$	6,094	$	—	$	—	$	6,094	$	509		$	(3,377	)
Noncovered OREO	1,807		—		—		1,807		(458		)	(3,117		)
Covered OREO	1,021		—		—		1,021		(481		)	(1,025		)
Noncovered OPPO	—		—		—		—		—			(1,990		)
	$	8,922	$	—	$	—	$	8,922	$	(430	)	$	(9,509	)

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

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Quantitative information about Level 3 fair value measurements

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

	Fair value at September 30, 2013		Valuation Technique	Unobservable Input	Range (Weighted Average) (1)
	(dollars in thousands)
Noncovered OREO	$	3,714	Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Covered OREO	544		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
(1) Discount applied to appraisal value, letter of intent to purchase, or stated value (in the case of accounts receivable and inventory).
(2) Quantitative disclosures are not provided for noncovered OREO and covered OREO because there were no adjustments made to the appraisal value during the current period.

	Fair value at September 30, 2012		Valuation Technique	Unobservable Input	Range (Weighted Average) (1)
	(dollars in thousands)
Impaired loans - real estate collateral	$	4,148	Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Impaired loans - other collateral (3)	1,946		Fair Market Value of Collateral	Adjustment to Stated value	0% - 70% (27%)
Noncovered OREO	1,807		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Covered OREO	1,021		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Noncovered OPPO	—		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
(1) Discount applied to appraisal value, letter of intent to purchase, or stated value (in the case of accounts receivable and inventory).
(2) Quantitative disclosures are not provided for impaired loans collateralized by real estate, noncovered OREO, covered OREO and noncovered OPPO because there were no adjustments made to the appraisal value during the current period.
(3) Other collateral consists of accounts receivable and inventory

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Fair value of financial instruments

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

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

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

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

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

Loans—Loans are not recorded at fair value on a recurring basis. Nonrecurring fair value adjustments are periodically recorded on impaired loans that are measured for impairment based on the fair value of collateral. For most performing loans, fair value is estimated using expected duration and lending rates that would have been offered on September 30, 2013 or December 31, 2012, for loans which mirror the attributes of the loans with similar rate structures and average maturities. The fair values resulting from these calculations are reduced by an amount representing the change in estimated fair value attributable to changes in borrowers’ credit quality since the loans were originated. For nonperforming loans, fair value is estimated by applying a valuation discount based upon loan sales data from the FDIC. For covered loans, fair value is estimated by discounting the expected future cash flows using a lending rate that would have been offered on September 30, 2013 (Level 3).

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

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

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

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

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

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

32

The following tables summarize carrying amounts and estimated fair values of selected financial instruments as well as assumptions used by the Company in estimating fair value at September 30, 2013 and December 31, 2012:

	September 30, 2013
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
	(in thousands)
Assets
Cash and due from banks	$	200,282	$	200,282	$	200,282	$	—	$	—
Interest-earning deposits with banks	54,470		54,470		54,470		—		—
Securities available for sale	1,569,651		1,569,651		20,417		1,549,234		—
FHLB stock	32,833		32,833		—		32,833		—
Loans held for sale	840		840		—		840		—
Loans	4,440,048		4,397,456		—		—		4,397,456
FDIC loss-sharing asset	53,559		17,353		—		—		17,353
Interest rate contracts	10,187		10,187		—		10,187		—
Liabilities
Deposits	$	5,948,967	$	5,948,473	$	5,413,557	$	534,916	$	—
FHLB Advances	34,632		33,301		—		33,301		—
Repurchase agreements	25,000		26,207		—		26,207		—
Interest rate contracts	10,187		10,187		—		10,187		—

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

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14. Earnings per Common Share

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

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(in thousands except per share)
Basic EPS:
Net income	$	13,276	$	11,880	$	40,043	$	32,681
Less: Earnings allocated to participating securities
Preferred shares	27		—		58		—
Nonvested restricted shares	109		113		355		336
Earnings allocated to common shareholders	$	13,140	$	11,767	$	39,630	$	32,345
Weighted average common shares outstanding	50,834		39,289		47,032		39,248
Basic earnings per common share	$	0.26	$	0.30	$	0.84	$	0.82
Diluted EPS:
Earnings allocated to common shareholders	$	13,142	$	11,767	$	39,635	$	32,345
Weighted average common shares outstanding	50,834		39,289		47,032		39,248
Dilutive effect of equity awards	1,463		2		915		3
Weighted average diluted common shares outstanding	52,297		39,291		47,947		39,251
Diluted earnings per common share	$	0.25	$	0.30	$	0.83	$	0.82
Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive	138		53		99		46

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

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

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

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

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

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

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

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

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

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

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

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

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

• competition among financial institutions could increase significantly;

• consolidation in the Pacific Northwest financial services industry resulting in the creation of larger financial institutions who may have greater resources could change the competitive landscape;

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

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

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

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

You should take into account that forward-looking statements speak only as of the date of this report. Given the described uncertainties and risks, we cannot guarantee our future performance or results of operations and you should not place undue reliance on these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required under federal securities laws.

35

CRITICAL ACCOUNTING POLICIES

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

RESULTS OF OPERATIONS

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

On April 1, 2013, the Company completed its acquisition of West Coast. The Company acquired approximately $2.63 billion in assets, including $1.41 billion in loans measured at fair value, and approximately $1.88 billion in deposits. See Note 3 to the Consolidated Financial Statements in "Item 1. Financial Statements (unaudited)" of this report for further information regarding this acquisition.

Earnings Summary

The Company reported net income for the third quarter of $13.3 million or $0.25 per diluted common share, compared to $11.9 million or $0.30 per diluted common share for the third quarter of 2012. For the first nine months of 2013, the Company reported net income of $40.0 million, or $0.83 per diluted common share, compared to $32.7 million, or $0.82 per diluted common share for the first nine months of 2012.

The increase in net income for the current quarter was attributable to higher net interest income and noninterest income as a result of the West Coast acquisition, partially offset by higher provision for loan losses and higher noninterest expense due to the West Coast acquisition. The increase in net income for the current year-to-date period from the prior year periods was attributable to higher net interest income as a result of the West Coast acquisition, coupled with lower provision for loan losses, partially offset by an increase in noninterest expense due to the West Coast acquisition.

Comparison of current quarter to prior year period

Revenue (net interest income plus noninterest income) for the three months ended September 30, 2013 was $88.0 million, 56% more than the same period in 2012. The increase in revenue was a result of higher loan interest income and noninterest income due to the West Coast acquisition. For a more complete discussion of this topic, please refer to the net interest income section contained in the ensuing pages.

The provision for loan and lease losses for the third quarter of 2013 was $4.3 million for the noncovered loan portfolio and a provision recapture of $947 thousand for the covered loan portfolio compared to a provision of $2.9 million for the noncovered loan portfolio and a provision recapture of $4.0 million for the covered loan portfolio during the third quarter of 2012. The provision for the noncovered portfolio was the result of moving from the initial fair value accounting for the acquired West Coast loans to our standard allowance methodology and the recapture of provision for the covered loan portfolio was due to an increase in expected future cash flows as remeasured during the current quarter when compared to the prior quarter's remeasurement.

Total noninterest expense for the quarter ended September 30, 2013 was $64.7 million, up from $40.9 million for the third quarter of 2012. The increase from the prior-year period was primarily due to acquisition-related expenses as well as ongoing noninterest expense resulting from the West Coast transaction.

36

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2012			2012
	( in thousands)
Incremental accretion income on FDIC acquired loans	$	7,329		$	11,873		$	25,249		$	49,306
Recapture (provision) for losses on covered loans	947			3,992			1,679			(23,381		)
Change in FDIC loss-sharing asset	(11,826		)	(12,951		)	(35,446		)	(14,787		)
FDIC clawback liability recovery (expense)	188			(334		)	(242		)	(100		)
Pre-tax earnings impact of FDIC acquired loan portfolios	$	(3,362	)	$	2,580		$	(8,760	)	$	11,038

Comparison of current year-to-date to prior year period

Revenue (net interest income plus noninterest income) for the nine months ended September 30, 2013 was $230.0 million, compared to $204.5 million for the same period in 2012. The increase in revenue was a result of higher loan interest income and noninterest income due to the West Coast acquisition. For a more complete discussion of this topic, please refer to the net interest income section contained in the ensuing pages.

The provision for loan and lease losses for the nine months ended September 30, 2013 was $5.3 million for the noncovered loan portfolio and a provision recapture of $1.7 million for the covered loan portfolio compared to provisions of $11.1 million for the noncovered loan portfolio and $23.4 million for the covered loan portfolio during the first nine months of 2012. The $5.3 million provision for the noncovered loan portfolio was the result of moving from the initial fair value accounting for the acquired West Coast loans to our standard allowance methodology as well as net charge offs experienced during the period. The $1.7 million in provision recapture for losses on covered loans was primarily due to increased expected future cash flows as remeasured during the current period when compared to the prior period's remeasurement.

Total noninterest expense for the nine months ended September 30, 2013 was $167.3 million, a 34% increase from the first nine months of 2012. The increase from the prior-year period was primarily due to acquisition-related expenses as well as ongoing noninterest expense resulting from the West Coast transaction.

Net Interest Income

Comparison of current quarter to prior year period

Net interest income for the third quarter of 2013 was $80.4 million, an increase of 40% from $57.3 million for the same quarter in 2012. The increase in net interest income was primarily due to the loan interest income and loan discount accretion income related to the acquisition of West Coast.

Incremental accretion income from acquired impaired loans decreased $4.2 million from the prior year period. In addition, the discount accretion on other FDIC acquired loans decreased $347 thousand from the prior year period. These decreases were primarily due to the decreases in the FDIC acquired loan balances resulting from repayments. However, these decreases were more than offset during the current quarter by an increase in discount accretion related to the recently acquired West Coast loan portfolio, which had $10.0 million in discount accretion for the current quarter. For additional information on the Company's accounting policies related to recording interest income on loans, please refer to “Item 8. Financial Statements and Supplementary Data” in our 2012 Annual Report on Form 10-K.

The Company's net interest margin decreased to 5.37% in the third quarter of 2013, from 5.52% for the same quarter last year, primarily due to the smaller impact of the acquired loan accretion income for the current period. Although the dollar amount of the accretion income was actually higher in the current period, the impact to the net interest margin was greater for the prior year period due to the lower average interest-earning assets balance for the prior year period. The Company's operating net interest margin was 4.41% for the current quarter, an increase of 1 basis point compared to the same period in the prior year.

37

Comparison of current year-to-date to prior year period

Net interest income for the nine months ended September 30, 2013 was $213.9 million, an increase of 16% from $184.0 million for the same period in 2012. The Company's net interest margin and operating net interest margin decreased to 5.21% and 4.33%, respectively, for the first nine months of 2013, from 5.99% and 4.43%, respectively, for the same prior year period. The increase in net interest income was primarily due to increased loan and securities portfolios resulting from the acquisition of West Coast, which closed on April 1, 2013. The decrease in margin was primarily due to accretion income on the acquired loan portfolios, which were lower in the current period. As shown in the table below, although the Company recorded $19.7 million in discount accretion related to the recently acquired West Coast loan portfolio, the overall incremental accretion income for the nine months ended September 30, 2013 was $4.4 million lower than what was recorded in the prior year period. The modest decrease of 10 basis points in the operating net interest margin was due to the combination of lower rates on loans as well as securities due to the overall decreasing trend in rates.

The following table shows the impact to interest income of incremental accretion income as well as the net interest margin and operating net interest margin for the periods presented:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2012			2012
	(dollars in thousands)
Incremental accretion income due to:
FDIC acquired impaired loans	$	7,063		$	11,260		$	23,275		$	44,455
Other FDIC acquired loans	266			613			1,974			4,851
Other acquired loans	10,025			—			19,660			—
Incremental accretion income	$	17,354		$	11,873		$	44,909		$	49,306
Net interest margin	5.37		%	5.52		%	5.21		%	5.99		%
Operating net interest margin (1)	4.41		%	4.40		%	4.33		%	4.43		%

__________

(1) Operating net interest margin is a non-GAAP measurement. See Non-GAAP measures section of Item 2, Management's Discussion and Analysis.

38

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

	Three Months Ended September 30,						Three Months Ended September 30,
	2013						2012
	Average Balances		Interest Earned / Paid		Average Rate		Average Balances		Interest Earned / Paid		Average Rate
	(dollars in thousands)
ASSETS
Loans, excluding covered loans, net (1) (2)	$	4,166,904	$	61,567	5.91	%	$	2,444,065	$	32,747	5.36	%
Covered loans, net (1)	337,136		12,685		15.05	%	475,455		20,042		16.86	%
Taxable securities	1,183,635		4,935		1.67	%	716,522		4,218		2.35	%
Tax exempt securities (2)	328,657		3,852		4.69	%	267,293		3,758		5.62	%
Interest-earning deposits with banks and federal funds sold	85,628		56		0.26	%	360,079		229		0.25	%
Total interest-earning assets	6,101,960		$	83,095	5.45	%	4,263,414		$	60,994	5.72	%
Other earning assets	124,477						76,371
Noninterest-earning assets	822,427						488,317
Total assets	$	7,048,864					$	4,828,102
LIABILITIES AND SHAREHOLDERS’ EQUITY
Certificates of deposit	$	548,396	$	457	0.33	%	$	531,491	$	751	0.57	%
Savings accounts	484,336		27		0.02	%	298,918		15		0.02	%
Interest-bearing demand	1,132,009		126		0.04	%	792,825		205		0.10	%
Money market accounts	1,640,519		319		0.08	%	1,041,860		368		0.14	%
Total interest-bearing deposits	3,805,260		929		0.10	%	2,665,094		1,339		0.20	%
Federal Home Loan Bank advances	68,737		135		0.79	%	113,107		745		2.63	%
Other borrowings	25,000		120		1.92	%	25,000		120		1.92	%
Total interest-bearing liabilities	3,898,997		$	1,184	0.12	%	2,803,201		$	2,204	0.31	%
Noninterest-bearing deposits	2,031,758						1,194,190
Other noninterest-bearing liabilities	81,975						69,430
Shareholders’ equity	1,036,134						761,281
Total liabilities & shareholders’ equity	$	7,048,864					$	4,828,102
Net interest income			$	81,911					$	58,790
Net interest margin					5.37	%					5.52	%

(1) Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees were included in the interest income calculations. The amortization of net deferred loan fees was $783 thousand and $726 thousand for the three months ended September 30, 2013 and 2012, respectively. The accretion of net unearned discounts on other FDIC acquired loans and other acquired loans was $10.3 million and $613 thousand for the three months ended September 30, 2013 and 2012, respectively.

(2) Tax-exempt income is calculated on a tax equivalent basis, based on a marginal tax rate of 35%. The tax equivalent yield adjustment to interest earned on noncovered loans was $127 thousand and $189 thousand for the three months ended September 30, 2013 and 2012, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.4 million and $1.3 million for the three months ended September 30, 2013 and 2012, respectively.

39

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

	Nine Months Ended September 30,						Nine Months Ended September 30,
	2013						2012
	Average Balances		Interest Earned / Paid		Average Rate		Average Balances		Interest Earned / Paid		Average Rate
	(dollars in thousands)
ASSETS
Loans, excluding covered loans, net (1) (2)	$	3,645,423	$	155,611	5.69	%	$	2,390,585	$	98,794	5.51	%
Covered loans, net (1)	372,817		41,750		14.93	%	501,103		70,653		18.80	%
Taxable securities	1,099,670		14,059		1.70	%	741,274		14,414		2.59	%
Tax exempt securities (2)	311,727		11,310		4.84	%	271,442		11,546		5.67	%
Interest-earning deposits with banks and federal funds sold	151,234		290		0.26	%	294,721		564		0.26	%
Total interest-earning assets	5,580,871		$	223,020	5.33	%	4,199,125		$	195,971	6.22	%
Other earning assets	106,322						75,645
Noninterest-earning assets	657,813						522,773
Total assets	$	6,345,006					$	4,797,543
LIABILITIES AND SHAREHOLDERS’ EQUITY
Certificates of deposit	$	540,674	$	1,572	0.39	%	$	557,362	$	2,601	0.62	%
Savings accounts	430,134		71		0.02	%	295,359		61		0.03	%
Interest-bearing demand	1,011,570		458		0.06	%	777,352		673		0.12	%
Money market accounts	1,532,171		971		0.08	%	1,043,262		1,344		0.17	%
Total interest-bearing deposits	3,514,549		3,072		0.12	%	2,673,335		4,679		0.23	%
Federal Home Loan Bank advances (3)	60,791		1,055		2.31	%	114,934		2,229		2.59	%
Other borrowings	39,402		615		2.08	%	25,000		358		1.91	%
Total interest-bearing liabilities	3,614,742		$	4,742	0.17	%	2,813,269		$	7,266	0.34	%
Noninterest-bearing deposits	1,709,532						1,156,304
Other noninterest-bearing liabilities	67,783						67,753
Shareholders’ equity	952,949						760,217
Total liabilities & shareholders’ equity	$	6,345,006					$	4,797,543
Net interest income			$	218,278					$	188,705
Net interest margin					5.21	%					5.99	%

(1) Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees were included in the interest income calculations. The amortization of net deferred loan fees was $2.3 million and $1.5 million for the nine months ended September 30, 2013 and 2012, respectively. The accretion of net unearned discounts on other FDIC acquired loans and other acquired loans was $21.6 million and $4.9 million for the nine months ended September 30, 2013 and 2012, respectively.

(2) Tax-exempt income is calculated on a tax equivalent basis, based on a marginal tax rate of 35%. The tax equivalent yield adjustment to interest earned on noncovered loans was $371 thousand and $572 thousand for the nine months ended September 30, 2013 and 2012, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $4.0 million and $4.1 million for the nine months ended September 30, 2013 and 2012, respectively.

(3) Federal Home Loan Bank advances includes a prepayment charge of $1.5 million during the nine months ended September 30, 2013.

40

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

	Three Months Ended September 30, 2013 Compared to 2012 Increase (Decrease) Due to
	Volume			Rate			Total
	(in thousands)
Interest Income
Loans, excluding covered loans, net	$	25,154		$	3,666		$	28,820
Covered loans, net	(5,373		)	(1,984		)	(7,357		)
Taxable securities	2,196			(1,479		)	717
Tax exempt securities	779			(685		)	94
Interest earning deposits with banks and federal funds sold	(178		)	5			(173		)
Interest income	$	22,578		$	(477	)	$	22,101
Interest Expense
Deposits:
Certificates of deposit	$	23		$	(317	)	$	(294	)
Savings accounts	11			1			12
Interest-bearing demand	66			(145		)	(79		)
Money market accounts	158			(207		)	(49		)
Total interest on deposits	258			(668		)	(410		)
Federal Home Loan Bank advances	(219		)	(391		)	(610		)
Interest expense	$	39		$	(1,059	)	$	(1,020	)

41

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

	Nine Months Ended September 30, 2013 Compared to 2012 Increase (Decrease) Due to
	Volume			Rate			Total
	(in thousands)
Interest Income
Loans, excluding covered loans, net	$	53,464		$	3,353		$	56,817
Covered loans, net	(16,024		)	(12,879		)	(28,903		)
Taxable securities	5,572			(5,927		)	(355		)
Tax exempt securities	1,587			(1,823		)	(236		)
Interest earning deposits with banks and federal funds sold	(274		)	—			(274		)
Interest income	$	44,325		$	(17,276	)	$	27,049
Interest Expense
Deposits:
Certificates of deposit	$	(76	)	$	(953	)	$	(1,029	)
Savings accounts	24			(14		)	10
Interest-bearing demand	166			(381		)	(215		)
Money market accounts	476			(849		)	(373		)
Total interest on deposits	590			(2,197		)	(1,607		)
Federal Home Loan Bank advances	(958		)	(216		)	(1,174		)
Other borrowings	221			36			257
Interest expense	$	(147	)	$	(2,377	)	$	(2,524	)

Provision for Loan and Lease Losses

Comparison of current quarter to prior year period

The provision for loan and lease losses for the third quarter of 2013 was $4.3 million for the noncovered loan portfolio and a provision recapture of $947 thousand for the covered loan portfolio compared with a provision of $2.9 million and provision recapture of $4.0 million, respectively, during the third quarter of 2012. The $947 thousand in provision recapture for losses on covered loans in the current period was primarily due to the increase in expected future cash flows as remeasured during current quarter, compared to the expected future cash flows during the first quarter of 2013, net of the actual cash flows received during the quarter. The $947 thousand in provision recapture is substantially offset by a $758 thousand unfavorable adjustment to the change in FDIC loss-sharing asset.

The $4.3 million provision expense for noncovered loan losses recorded during the current quarter was primarily the result of moving from the initial fair value accounting for the loans acquired in the West Coast Bank acquisition to our standard allowance methodology. The initial fair value accounting resulted in a net loan discount of $88.8 million, $19.7 million of which was recognized as interest income on loans subsequent to the acquisition.

Comparison of current year-to-date to prior year period

The provision for loan and lease losses for the nine months ended September 30, 2013 was $5.3 million for the noncovered loan portfolio and a provision recapture of $1.7 million for the covered loan portfolio compared with provisions of $11.1 million and $23.4 million, respectively, during the same period of 2012. The $1.7 million in provision recapture for losses on covered loans in the current period was primarily due to the increase in expected future cash flows during the current period, compared to the expected future cash flows at the end of 2012, net of the actual cash flows received during the current year. The $1.7 million in provision recapture is substantially offset by a $1.3 million unfavorable adjustment to the change in FDIC loss-sharing asset.

42

The $5.3 million provision expense for noncovered loan losses was primarily the result of moving from the initial fair value accounting for the loans acquired in the West Coast Bank acquisition to our standard allowance methodology. Net noncovered loan charge-offs for the nine months ended September 30, 2013 were $1.7 million compared to $12.6 million for the same period of 2012. The amount of provision was calculated in accordance with the Company’s methodology for determining the ALLL, discussed in Note 6 to the Consolidated Financial Statements in "Item 1. Financial Statements (unaudited)" of this report and was based upon improving credit metrics in the noncovered loan portfolio.

Noninterest Income

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

	Three Months Ended September 30,										Nine Months Ended September 30,
	2013			2012			$ Change		% Change		2013			2012			$ Change			% Change
	(dollars in thousands)
Service charges and other fees	$	13,357		$	7,609		$	5,748	76	%	$	34,511		$	22,222		$	12,289		55	%
Merchant services fees	2,070			2,054			16		1	%	5,934			6,167			(233		)	(4	)%
Investment securities gains, net	—			—			—		—	%	462			62			400			645	%
Bank owned life insurance	904			747			157		21	%	2,610			2,177			433			20	%
Other	3,117			1,630			1,487		91	%	8,017			4,650			3,367			72	%
Subtotal	19,448			12,040			7,408		62	%	51,534			35,278			16,256			46	%
Change in FDIC loss-sharing asset	(11,826		)	(12,951		)	1,125		(9	)%	(35,446		)	(14,787		)	(20,659		)	140	%
Total noninterest income (loss)	$	7,622		$	(911	)	$	8,533	(937	)%	$	16,088		$	20,491		$	(4,403	)	(21	)%

Comparison of current quarter to prior year period

Noninterest income was $7.6 million for the third quarter of 2013, compared to a loss of $911 thousand for the same period in 2012. The increase was primarily due to increases of $5.7 million in service charges and other fees and $1.5 million in other noninterest income due to the increased customer base from the West Coast acquisition.

The change in FDIC loss-sharing asset is a significant component of noninterest income. Changes in the asset are primarily driven by amortization of the asset and the provision recorded for reimbursable losses on covered loans. For the third quarter of 2013, there was $9.9 million of amortization of the asset and a $758 thousand decrease in the asset related to the provision recapture recorded for reimbursable losses on covered loans. For the same period in 2012, there was $9.7 million of amortization of the asset and a $3.2 million decrease in the asset related to the provision recapture recorded for reimbursable losses on covered loans. For additional information on the FDIC loss-sharing asset, please see the "FDIC Loss-sharing Asset" section of Management's Discussion and Analysis and Note 8 to the Consolidated Financial Statements in "Item 1. Financial Statements (unaudited)" of this report.

Comparison of current year-to-date to prior year period

For the nine months ended September 30, 2013, noninterest income was $16.1 million compared to $20.5 million for the same period in 2012. The decrease was primarily due to the $35.4 million change in the FDIC loss-sharing asset recorded as a reduction in income during the current year, compared to a $14.8 million reduction in income during the same period of 2012. The decrease was partially offset by increases of $12.3 million in service charges and other fees and $3.4 million in other noninterest income due to the increased customer base from the West Coast acquisition.

43

Noninterest Expense

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

	Three Months Ended September 30,											Nine Months Ended September 30,
	2013			2012			$ Change			% Change		2013			2012			$ Change			% Change
	(dollars in thousands)
Compensation	$	27,424		$	17,873		$	9,551		53	%	$	74,700		$	53,180		$	21,520		40	%
Employee benefits	5,445			3,606			1,839			51	%	15,250			10,812			4,438			41	%
Contract labor	418			44			374			850	%	647			492			155			32	%
	33,287			21,523			11,764			55	%	90,597			64,484			26,113			40	%
All other noninterest expense:
Occupancy	9,264			4,886			4,378			90	%	21,560			15,310			6,250			41	%
Merchant processing	951			921			30			3	%	2,660			2,724			(64		)	(2	)%
Advertising and promotion	1,165			1,341			(176		)	(13	)%	3,195			3,342			(147		)	(4	)%
Data processing and communications	4,285			2,499			1,786			71	%	10,503			7,263			3,240			45	%
Legal and professional services	2,421			2,783			(362		)	(13	)%	9,975			6,221			3,754			60	%
Taxes, license and fees	1,446			1,124			322			29	%	4,037			3,594			443			12	%
Regulatory premiums	1,372			775			597			77	%	3,406			2,560			846			33	%
Net cost of operation of noncovered other real estate owned	851			(63		)	914			(1,451	)%	1,190			4,102			(2,912		)	(71	)%
Net benefit of operation of covered other real estate owned	(1,628		)	(1,006		)	(622		)	62	%	(7,296		)	(4,638		)	(2,658		)	57	%
Amortization of intangibles	1,666			1,093			573			52	%	4,388			3,362			1,026			31	%
FDIC clawback expense (recovery)	(188		)	334			(522		)	(156	)%	242			100			142			142	%
Other	9,822			4,726			5,096			108	%	22,810			16,689			6,121			37	%
Total all other noninterest expense	31,427			19,413			12,014			62	%	76,670			60,629			16,041			26	%
Total noninterest expense	$	64,714		$	40,936		$	23,778		58	%	$	167,267		$	125,113		$	42,154		34	%

Comparison of current quarter to prior year period

Total noninterest expense for the third quarter of 2013 was $64.7 million, an increase of $23.8 million from a year earlier. The increase from the prior-year period was primarily due to acquisition-related expenses of $7.6 million during the current period as well as additional ongoing noninterest expense resulting from the West Coast acquisition.

44

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(in thousands except per share amounts)
Noninterest Expense
Compensation and employee benefits	$	1,572	$	1,128	$	4,988	$	1,128
Occupancy	1,221		—		1,454		—
Advertising and promotion	315		—		820		—
Data processing and communications	329		—		805		—
Legal and professional fees	493		—		4,523		—
Other	3,691		3		4,988		3
Total impact of acquisition-related costs to noninterest expense	$	7,621	$	1,131	$	17,578	$	1,131

Comparison of current year-to-date to prior year period

For the nine months ended September 30, 2013, noninterest expense was $167.3 million, an increase of $42.2 million, or 34% from $125.1 million a year earlier. The increase from the prior-year period was due to acquisition-related expenses of $17.6 million recorded during the current year as well as additional ongoing noninterest expense resulting from the West Coast acquisition.

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

	Three Months Ended September 30,						Increase (Decrease) Amount			Nine Months Ended September 30,					Increase (Decrease) Amount
	2013			2012						2013			2012
	(in thousands)
Postage	$	1,082		$	575		$	507		$	2,608		$	1,495	$	1,113
Software support & maintenance	865			304			561			2,193			1,120		1,073
Supplies	514			246			268			1,205			839		366
Insurance	599			244			355			1,453			780		673
ATM Network	597			271			326			1,596			824		772
Travel	629			339			290			1,401			1,040		361
Employee expenses	222			156			66			691			565		126
Sponsorships and charitable contributions	320			212			108			929			584		345
Directors fees	152			140			12			480			407		73
Federal Reserve Bank processing fees	56			48			8			149			172		(23		)
CRA partnership investment expense	237			111			126			577			497		80
Investor relations	91			21			70			425			163		262
Other personal property owned	(221		)	(107		)	(114		)	(125		)	2,226		(2,351		)
Miscellaneous	4,679			2,166			2,513			9,228			5,977		3,251
Total other noninterest expense	$	9,822		$	4,726		$	5,096		$	22,810		$	16,689	$	6,121

In managing our business, we review the efficiency ratio, on a fully taxable-equivalent basis. Our efficiency ratio (noninterest expense, excluding net cost of operation of other real estate, FDIC clawback liability expense and acquisition-related expenses, divided by the sum of net interest income on a tax equivalent basis, excluding incremental accretion income on acquired loan portfolios, premium amortization on acquired securities portfolios, and prepayment charges on FHLB advances, and noninterest income, excluding any gain/loss on sale of investment securities, gain on bank acquisition, and the change in the FDIC indemnification asset) was 66.59% for the third quarter of 2013 compared to 70.36% for the third quarter 2012. For the nine months ended September 30, 2013 and 2012, our efficiency ratios were 66.65% and 70.11%, respectively.

45

Income Taxes

We recorded an income tax provision of $6.7 million for the third quarter of 2013, compared to a provision of $4.7 million for the same period in 2012. For the nine months ended September 30, 2013 and 2012, we recorded an income tax provision of $19.1 million and $12.2 million, respectively, with an effective tax rate of 32% and 27%, respectively. Our effective tax rate increased during the current year primarily due to the acquisition of West Coast. The majority of West Coast’s operations were located in the State of Oregon which has a state income tax. As a result, a larger portion of our income was subject to state income taxes. In addition, certain acquisition-related costs were not tax deductible which also increased our effective tax rate. Our effective tax rate remained lower than the statutory tax rate due to our nontaxable income generated from tax-exempt loans and municipal bonds, investments in bank owned life insurance, and low income housing credits. For additional information, please refer to the Company's annual report on Form 10-K for the year ended December 31, 2012.

FINANCIAL CONDITION

Total assets were $7.15 billion as of September 30, 2013, an increase of $2.24 billion, or 46% from $4.91 billion at December 31, 2012 primarily due to the acquisition of West Coast, which closed on April 1, 2013.

Investment Securities

At September 30, 2013, the Company held investment securities totaling $1.57 billion compared to $1.00 billion at December 31, 2012. All of our securities are classified as available for sale and carried at fair value. The increase in the investment securities portfolio from year-end is due to $730.8 million in acquired securities related to the West Coast acquisition, as well as $292.7 million in purchases, partially offset by $407.8 million in maturities and sales, $12.6 million in premium amortization and $35.2 million reduction in fair value of securities in the portfolio. These securities are used by the Company as a component of its balance sheet management strategies. From time-to-time securities may be sold to reposition the portfolio in response to strategies developed by the Company’s asset liability committee. In accordance with our investment strategy, management monitors market conditions with a view to realize gains on its available for sale securities portfolio when prudent.

The Company performs a quarterly assessment of the debt and equity securities in its investment portfolio that have an unrealized loss to determine whether the decline in the fair value of these securities below their amortized cost basis is other-than-temporary. Impairment is considered other-than-temporary when it becomes probable that the Company will be unable to recover the entire amortized cost basis of its investment. The Company’s impairment assessment takes into consideration factors such as the length of time and the extent to which the market value has been less than cost, defaults or deferrals of scheduled interest or principal, external credit ratings and recent downgrades, and whether the Company intends to sell the security and whether it is more likely than not it will be required to sell the security prior to recovery of its amortized cost basis. If a decline in fair value is judged to be other-than-temporary, the cost basis of the individual security is written down to fair value which then becomes the new cost basis. The new cost basis is not adjusted for subsequent recoveries in fair value.

When there are credit losses associated with an impaired debt security and the Company does not have the intent to sell the security and it is more likely than not that it will not have to sell the security before recovery of its cost basis, the Company will separate the amount of the impairment into the amount that is credit-related and the amount related to non-credit factors. The credit-related impairment is recognized in earnings and the non-credit-related impairment is recognized in accumulated other comprehensive income.

At September 30, 2013, the market value of securities available for sale had a net unrealized loss of $2.9 million compared to a net unrealized gain of $32.3 million at December 31, 2012. The change in valuation was the result of fluctuations in market interest rates subsequent to purchase. At September 30, 2013, the Company had $866.8 million of investment securities with gross unrealized losses of $29.7 million; however, we did not consider these investment securities to be other-than-temporarily impaired.

46

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

	September 30, 2013		December 31, 2012
	(in thousands)
Securities Available for Sale
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	861,669	$	572,369
State and municipal securities	354,895		285,575
U.S. government and government-sponsored enterprise securities	327,530		120,501
U.S. government securities	20,417		19,828
Other securities	5,140		3,392
Total	$	1,569,651	$	1,001,665

For further information on our investment portfolio see Note 4 of the Consolidated Financial Statements in "Item 1. Financial Statements (unaudited)" of this report.

Credit Risk Management

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

Loan policies, credit quality criteria, loan portfolio guidelines and other credit approval processes are established under the guidance of our Chief Credit Officer and approved, as appropriate, by the Board of Directors. The Company’s Credit Administration department and loan committee have the responsibility for administering the credit approval process. As another part of its control process, we use an independent internal credit review and examination function to provide assurance that loans and commitments are made and maintained as prescribed by our credit policies. This includes a review of documentation when the loan is initially extended and subsequent monitoring to assess continued performance and proper risk assessment.

47

Loan Portfolio Analysis

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

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

	September 30, 2013			% of Total		December 31, 2012			% of Total
	(dollars in thousands)
Commercial business	$	1,569,343		37.4	%	$	1,155,158		45.7	%
Real estate:
One-to-four family residential	106,686			2.5	%	43,922			1.7	%
Commercial and multifamily residential	2,048,910			48.8	%	1,061,201			42.0	%
Total real estate	2,155,596			51.3	%	1,105,123			43.7	%
Real estate construction:
One-to-four family residential	53,158			1.3	%	50,602			2.0	%
Commercial and multifamily residential	128,120			3.1	%	65,101			2.7	%
Total real estate construction	181,278			4.4	%	115,703			4.7	%
Consumer	362,808			8.7	%	157,493			6.2	%
Subtotal	4,269,025			101.8	%	2,533,477			100.3	%
Less: Net unearned income	(75,293		)	(1.8	)%	(7,767		)	(0.3	)%
Total noncovered loans, net of unearned income	4,193,732			100.0	%	2,525,710			100.0	%
Less: Allowance for loan and lease losses	(55,844		)			(52,244		)
Noncovered loans, net	4,137,888					2,473,466
Covered loans, net of allowance for loan losses of ($22,737) and ($30,056), respectively	302,160					391,337
Total loans, net	$	4,440,048				$	2,864,803
Loans held for sale	$	840				$	2,563

Total noncovered loans increased $1.67 billion, or 66%, from year-end 2012. The increase in loans was primarily due to the acquisition of West Coast Bank, which added $1.41 billion at the beginning of the second quarter. In addition to the increase from the acquisition, noncovered loans had organic growth of $241.1 million during the period. The organic growth was centered in commercial business and commercial and multifamily residential real estate loans. The noncovered loan portfolio continues to be diversified, with the intent to mitigate risk by minimizing concentration in any one segment. The $75.3 million in unearned income recorded at September 30, 2013 was comprised of $68.8 million in discount on acquired loans and $6.5 million in deferred loan fees. The $7.8 million in unearned income recorded at December 31, 2012 consisted of $2.2 million in discount on acquired loans and $5.6 million in deferred loan fees.

48

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

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

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

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

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

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

49

The following tables are a rollforward of acquired, impaired loans accounted for under ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality for the nine months ended September 30, 2013 and 2012:

	Contractual			Nonaccretable			Accretable			Carrying
	Cash Flows			Difference			Yield			Amount
	(in thousands)
Balance at January 1, 2013	$	556,108		$	(37,371	)	$	(166,888	)	$	351,849
Principal reductions	(115,032		)	—			—			(115,032		)
Accretion of loan discount	—			—			40,240			40,240
Changes in contractual and expected cash flows due to remeasurement	(17,079		)	17,656			621			1,198
Reduction due to removals	(16,235		)	498			6,544			(9,193		)
Balance at September 30, 2013	$	407,762		$	(19,217	)	$	(119,483	)	$	269,062

	Contractual			Nonaccretable			Accretable			Carrying
	Cash Flows			Difference			Yield			Amount
	(in thousands)
Balance at January 1, 2012	$	835,556		$	(91,317	)	$	(259,669	)	$	484,570
Principal reductions	(131,812		)	—			—			(131,812		)
Accretion of loan discount	—			—			69,045			69,045
Changes in contractual and expected cash flows due to remeasurement	(71,478		)	51,802			(6,077		)	(25,753		)
Reduction due to removals	(20,130		)	3,138			8,219			(8,773		)
Balance at September 30, 2012	$	612,136		$	(36,377	)	$	(188,482	)	$	387,277

For additional information on our loan portfolio, including amounts pledged as collateral on borrowings, see Note 5 and Note 8 to the Consolidated Financial Statements in "Item 1. Financial Statements (unaudited)" of this report.

Nonperforming Assets

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

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

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

50

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

	September 30, 2013		December 31, 2012
	(in thousands)
Nonperforming assets, excluding covered assets
Nonaccrual loans:
Commercial business	$	11,995	$	9,299
Real estate:
One-to-four family residential	2,220		2,349
Commercial and multifamily residential	14,025		19,204
Total real estate	16,245		21,553
Real estate construction:
One-to-four family residential	3,685		4,900
Total real estate construction	3,685		4,900
Consumer	4,036		1,643
Total nonaccrual loans	35,961		37,395
Noncovered other real estate owned and other personal property owned	23,641		11,108
Total nonperforming noncovered assets	$	59,602	$	48,503
Total assets	$	7,150,297	$	4,906,335
Covered assets, net	314,898		407,693
Noncovered assets	$	6,835,399	$	4,498,642

At September 30, 2013, nonperforming noncovered assets were $59.6 million, compared to $48.5 million at December 31, 2012. The increase was due to the acquisition of West Coast Bank, which added $33.6 million of nonperforming assets. Exclusive of the West Coast acquisition, nonperforming noncovered assets decreased $22.5 million during the nine months ended September 30, 2013 as a result of $15.0 million in loan payments, $13.4 million in loans returning to accrual status, $9.8 million in OREO and OPPO sales, $5.6 million in loan and OREO write-downs, partially offset by $21.3 million in new nonaccrual loans. The percent of nonperforming, noncovered assets to period-end noncovered assets at September 30, 2013 was 0.87% compared to 1.08% for December 31, 2012.

Other Real Estate Owned: During the nine months ended September 30, 2013, noncovered OREO increased $12.7 million. The following table sets forth activity in noncovered OREO for the nine months ended September 30, 2013 and 2012:

	Nine Months Ended September 30,
	2013			2012
	(in thousands)
Noncovered OREO:
Balance, beginning of period	$	10,676		$	22,893
Established through acquisitions	14,708			—
Transfers in, net of write-downs ($90 and $24, respectively)	9,190			6,527
OREO improvements	—			11
Additional OREO write-downs	(1,636		)	(4,232		)
Proceeds from sale of OREO property	(10,295		)	(15,069		)
Gain on sale of OREO, net	900			745
Total noncovered OREO, end of period	$	23,543		$	10,875

Other Personal Property Owned: During the nine months ended September 30, 2013, noncovered OPPO declined $334 thousand as a result of sales.

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Allowance for Loan and Lease Losses

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

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

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

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

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

• Existing general economic and business conditions affecting our market place

• Credit quality trends

• Historical loss experience

• Seasoning of the loan portfolio

• Bank regulatory examination results

• Findings of internal credit examiners

• Duration of current business cycle

• Specific loss estimates for problem loans

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

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

At September 30, 2013, our allowance for loan and lease losses for noncovered loans was $55.8 million, or 1.33% of total noncovered loans (excluding loans held for sale) and 155% of nonperforming, noncovered loans. This compares with an allowance of $52.2 million, or 2.07% of total noncovered loans (excluding loans held for sale), and 140% of nonperforming, noncovered loans at December 31, 2012. The decrease in the allowance percentage compared to December 31, 2012 resulted from including acquired loans in the ratio, for which only a small allowance was estimated at quarter-end given management's judgment that current net acquisition accounting adjustments still significantly address the estimated credit losses in acquired loans. Excluding acquired loans, the allowance at September 30, 2013 represented 1.73% of noncovered loans. This decrease compared to December 31, 2012 reflects improvements in core asset quality during current year.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Beginning balance	$	51,698		$	52,196		$	52,244		$	53,041
Charge-offs:
Commercial business	(755		)	(3,775		)	(3,030		)	(8,178		)
One-to-four family residential	(47		)	(49		)	(191		)	(499		)
Commercial and multifamily residential	(657		)	(592		)	(2,054		)	(5,108		)
One-to-four family residential construction	—			(325		)	(133		)	(1,426		)
Commercial and multifamily residential construction	—			—			—			(93		)
Consumer	(453		)	(500		)	(1,262		)	(1,968		)
Total charge-offs	(1,912		)	(5,241		)	(6,670		)	(17,272		)
Recoveries
Commercial business	854			277			1,319			1,314
One-to-four family residential	39			157			180			202
Commercial and multifamily residential	332			446			509			1,338
One-to-four family residential construction	461			404			2,649			906
Commercial and multifamily residential construction	—			63			—			64
Consumer	112			350			353			809
Total recoveries	1,798			1,697			5,010			4,633
Net charge-offs	(114		)	(3,544		)	(1,660		)	(12,639		)
Provision (recapture) for loan and lease losses	4,260			2,875			5,260			11,125
Ending balance	$	55,844		$	51,527		$	55,844		$	51,527
Total noncovered loans, net at end of period, excluding loans held of sale	$	4,193,732		$	2,476,844		$	4,193,732		$	2,476,844
Allowance for loan and lease losses to period-end noncovered loans	1.33		%	2.08		%	1.33		%	2.08		%
Allowance for unfunded commitments and letters of credit
Beginning balance	$	2,465		$	1,665		$	1,915		$	1,535
Net changes in the allowance for unfunded commitments and letters of credit	200			250			750			380
Ending balance	$	2,665		$	1,915		$	2,665		$	1,915

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FDIC Loss-sharing Asset

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

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

At September 30, 2013, the FDIC loss-sharing asset was $53.6 million which was comprised of a $48.4 million FDIC indemnification asset and a $5.2 million FDIC receivable. The FDIC receivable represents the amounts due from the FDIC for claims related to covered losses the Company has incurred net of amounts due to the FDIC relating to shared recoveries.

The following table summarizes the activity related to the FDIC loss-sharing asset for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Balance at beginning of period	$	67,374		$	140,003		$	96,354		$	175,071
Adjustments not reflected in income
Cash received from the FDIC	(1,484		)	(14,881		)	(7,871		)	(49,194		)
FDIC reimbursable losses, net	(505		)	(494		)	522			587
Adjustments reflected in income
Amortization, net	(9,890		)	(9,694		)	(29,470		)	(33,418		)
Loan impairment (recapture)	(758		)	(3,193		)	(1,343		)	18,705
Sale of other real estate	(1,479		)	(1,315		)	(5,076		)	(4,881		)
Write-downs of other real estate	220			1,141			373			4,503
Other	81			110			70			304
Balance at end of period	$	53,559		$	111,677		$	53,559		$	111,677

For additional information on the FDIC loss-sharing asset, please see Note 8 to the Consolidated Financial Statements presented elsewhere in this report.

Liquidity and Sources of Funds

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

Deposit Activities

Our deposit products include a wide variety of transaction accounts, savings accounts and time deposit accounts. Core deposits (demand deposit, savings, money market accounts and certificates of deposit less than $100,000) increased $1.86 billion since year-end 2012 due to the acquisition of West Coast.

54

We have established a branch system to serve our consumer and business depositors. In addition, management’s strategy for funding asset growth is to make use of brokered and other wholesale deposits on an as-needed basis. The Company participates in the Certificate of Deposit Account Registry Service (CDARS^®) program. CDARS^® is a network that allows participating banks to offer extended FDIC deposit insurance coverage on time deposits. The Company also participates in a similar program to offer extended FDIC deposit insurance coverage on money market accounts. These extended deposit insurance programs are generally available only to existing customers and are not used as a means of generating additional liquidity. At September 30, 2013 CDARS^® deposits and brokered money market deposits were $76.5 million, or 1% of total deposits, compared to $26.7 million at year-end 2012. The brokered deposits have varied maturities.

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

	September 30, 2013				December 31, 2012
	Balance		% of Total		Balance		% of Total
	(dollars in thousands)
Core deposits:
Demand and other non-interest bearing	$	2,110,887	35.5	%	$	1,321,171	32.7	%
Interest bearing demand	1,156,045		19.4	%	870,821		21.5	%
Money market	1,604,256		27.0	%	1,043,459		25.8	%
Savings	488,985		8.2	%	314,371		7.8	%
Certificates of deposit less than $100,000	302,785		5.1	%	252,544		6.2	%
Total core deposits	5,662,958		95.2	%	3,802,366		94.0	%
Certificates of deposit greater than $100,000	209,059		3.5	%	212,924		5.3	%
Certificates of deposit insured by CDARS®	23,566		0.4	%	26,720		0.7	%
Brokered money market accounts	52,937		0.9	%	—		—	%
Subtotal	5,948,520		100.0	%	4,042,010		100.0	%
Premium resulting from acquisition date fair value adjustment	447				75
Total deposits	$	5,948,967			$	4,042,085

Borrowings

We rely on FHLB advances and FRB borrowings as another source of both short and long-term funding. FHLB advances and FRB borrowings are secured by bonds within our investment portfolio, residential, commercial and commercial real estate loans. At September 30, 2013 we had FHLB advances of $34.0 million, before acquisition date fair value adjustments compared to $6.0 million at December 31, 2012. The increase in FHLB borrowings related to the acquisition of West Coast.

We also utilize wholesale repurchase agreements as a supplement to our funding sources. Our wholesale repurchase agreements are secured by mortgage-backed securities. At September 30, 2013 and December 31, 2012 we had repurchase agreements of $25.0 million, which mature in 2018. Management anticipates we will continue to rely on FHLB advances, FRB borrowings, and wholesale repurchase agreements in the future and we will use those funds primarily to make loans and purchase securities.

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Contractual Obligations & Commitments

We are party to many contractual financial obligations, including repayment of borrowings, operating and equipment lease payments, commitments to extend credit and investments in affordable housing partnerships. At September 30, 2013, we had commitments to extend credit of $1.42 billion compared to $908.5 million at December 31, 2012.

Capital Resources

Shareholders’ equity at September 30, 2013 was $1.05 billion, an increase from $764.0 million at December 31, 2012, primarily due to shares issued in conjunction with the acquisition of West Coast. Shareholders’ equity was 15% of total period-end assets at September 30, 2013 compared to 16% at December 31, 2012.

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

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

The decrease in the Company's capital ratios from December 31, 2012 was primarily due to our deployment of capital for the acquisition of West Coast. The Company and its banking subsidiary qualify as “well-capitalized” at September 30, 2013 and December 31, 2012.

	Company				Columbia Bank				Requirements
	September 30, 2013		December 31, 2012		September 30, 2013		December 31, 2012		Adequately capitalized		Well- Capitalized
Total risk-based capital ratio	14.44	%	20.62	%	13.18	%	17.87	%	8.00	%	10.00	%
Tier 1 risk-based capital ratio	13.18	%	19.35	%	11.92	%	16.60	%	4.00	%	6.00	%
Leverage ratio	10.13	%	12.78	%	8.87	%	11.07	%	4.00	%	5.00	%

Stock Repurchase Program

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

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Non-GAAP Financial Measures

The Company considers operating net interest margin to be an important measurement as it more closely reflects the ongoing operating performance of the Company. Despite the importance of the operating net interest margin to the Company, there is no standardized definition for it and, as a result, the Company's calculations may not be comparable with other organizations. Also, there may be limits in the usefulness of this measure to investors. As a result, 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 operating net interest margin to the net interest margin.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Net interest margin	5.37	%	5.52	%	5.21	%	5.99	%
Adjustments to net interest margin to arrive at operating net interest margin:
Incremental accretion income on FDIC acquired impaired loans	(0.46	)%	(1.06	)%	(0.55	)%	(1.41	)%
Incremental accretion income on other FDIC acquired loans	(0.02	)%	(0.06	)%	(0.05	)%	(0.15	)%
Incremental accretion income on other acquired loans	(0.66	)%	—	%	(0.47	)%	—	%
Premium amortization on acquired securities	0.16	%	—	%	0.13	%	—	%
Interest reversals on nonaccrual loans	0.02	%	—	%	0.02	%	—	%
Prepayment charges on FHLB advances	—	%	—	%	0.04	%	—	%
Operating net interest margin	4.41	%	4.40	%	4.33	%	4.43	%

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A number of measures are used to monitor and manage interest rate risk, including income simulations and interest sensitivity (gap) analysis. An income simulation model is the primary tool used to assess the direction and magnitude of changes in net interest income resulting from changes in interest rates. Basic assumptions in the model include prepayment speeds on mortgage-related assets, cash flows and maturities of other investment securities, loan and deposit volumes and pricing. These assumptions are inherently subjective and, as a result, the model cannot precisely estimate net interest income or precisely predict the impact of higher or lower interest rates on net interest income. Actual results will differ from simulated results due to timing, magnitude and frequency of interest rate changes and changes in market conditions and management strategies, among other factors. At September 30, 2013, based on the measures used to monitor and manage interest rate risk, there has not been a material change in the Company’s interest rate risk since December 31, 2012. For additional information, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s 2012 Annual Report on Form 10-K.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

Changes in Internal Controls Over Financial Reporting

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

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PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

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

On October 3, 2012, a class action complaint was filed in the Circuit Court of the State of Oregon for the County of Multnomah against West Coast, its directors, and the Company challenging the merger: Gary M. Klein v. West Coast Bancorp, et al., Case No. 1210-12431. The complaint names as defendants West Coast, all of the former members of West Coast's board of directors, and the Company. The complaint alleges that the West Coast directors breached their fiduciary duties to West Coast and West Coast shareholders by agreeing to the merger at an unfair price. The complaint also alleges that the merger was being driven by an unfair process, that the directors approved provisions in the merger agreement that constitute preclusive deal protection devices, that certain large shareholders of West Coast were using the merger as an opportunity to sell their illiquid holdings in West Coast, and that West Coast directors and officers would obtain personal benefits from the merger not shared equally by other West Coast shareholders. The complaint further alleges that West Coast and the Company aided and abetted the directors' alleged breaches of their fiduciary duties. Thereafter, a second lawsuit challenging the merger was filed in the Circuit Court of the State of Oregon for Clackamas County: Leoni v. West Coast Bancorp et al., Case No. CV12100728. The two lawsuits have been consolidated for all purposes in the Circuit Court of the State of Oregon for Multnomah County.

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

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Item 1A. RISK FACTORS

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

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

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

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

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

(a) Not applicable

(b) Not applicable

(c) Not applicable

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

None.

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Item 6. EXHIBITS

10.1+*	Supplemental Executive Retirement Plan Agreement between the Company and Clint Stein, effective June 1, 2013
10.2+*	Supplemental Executive Retirement Plan Agreement between the Company and Andrew McDonald, effective June 1, 2013
31.1+	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2+	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32+	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101+	The following financial information from Columbia Banking System, Inc’s. Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 is formatted in XBRL: (i) the Unaudited Consolidated Balance Sheets, (ii) the Unaudited Consolidated Statements of Income, (iii) the Unaudited Consolidated Statements of Comprehensive Income, (iv) the Unaudited Consolidated Statements of Changes in Shareholders' Equity, (v) the Unaudited Consolidated Statements of Cash Flows, and (vi) the Notes to Unaudited Consolidated Financial Statements.

+    Filed herewith

*    Management contract or compensatory plan or arrangement

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SIGNATURES

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

		COLUMBIA BANKING SYSTEM, INC.
Date:	November 4, 2013	By	/s/ MELANIE J. DRESSEL
			Melanie J. Dressel
			President and Chief Executive Officer (Principal Executive Officer)
Date:	November 4, 2013	By	/s/ CLINT E. STEIN
			Clint E. Stein
			Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

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INDEX TO EXHIBITS

10.1+*	Supplemental Executive Retirement Plan Agreement between the Company and Clint Stein, effective June 1, 2013
10.2+*	Supplemental Executive Retirement Plan Agreement between the Company and Andrew McDonald, effective June 1, 2013
31.1+	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2+	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32+	Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101+	The following financial information from Columbia Banking System, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 is formatted in XBRL: (i) the Unaudited Consolidated Balance Sheets, (ii) the Unaudited Consolidated Statements of Income, (iii) the Unaudited Consolidated Statements of Comprehensive Income, (iv) the Unaudited Consolidated Statements of Changes in Shareholders' Equity, (v) the Unaudited Consolidated Statements of Cash Flows, and (vi) the Notes to Unaudited Consolidated Financial Statements.

+    Filed herewith

*    Management contract or compensatory plan or arrangement

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EX-10.1

EXHIBIT 10.1

COLUMBIA STATE BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

ARTICLE I

PURPOSE AND EFFECTIVE DATE

The purpose of this Supplemental Executive Retirement Plan (hereinafter the “Plan”) is to provide supplemental retirement benefits for certain key employees of COLUMBIA STATE BANK (hereinafter “Bank” or “Employer”), a bank organized and existing under the laws of the state of Washington. It is intended that the Plan will aid in retaining and attracting individuals of exceptional ability by providing them with these benefits. This Columbia State Bank Supplemental Executive Retirement Plan Agreement (hereinafter “Agreement”) is made and entered into effective as of June 1, 2013, by and between Columbia State Bank (hereinafter “Bank” or “Employer”) and Clinton E. Stein (hereinafter “Executive” or “Participant”).

WHEREFORE, the Bank and Executive hereby agree to the following;

ARTICLE II

DEFINITIONS

For the purposes of this Plan, the following terms shall have the meanings indicated, unless the context clearly indicates otherwise:

2.1    Actuarial Equivalent. The term “Actuarial Equivalent” means equivalence in value between two or more forms and/or times of payment based on a determination by an actuary chosen by the Committee, using sound actuarial assumptions at the time of such determination.

2.2    Administrator.The Bank shall be the "Administrator" and, solely for the purposes of ERISA (as defined below), the "fiduciary" of this Agreement where a fiduciary is required by ERISA.

2.3    Applicable Percentage. The term “Applicable Percentage” is the percentage of the Executive Benefit to which Executive shall be entitled based on (a) the date on which the Executive Separates From Service or Terminates Employment with the Bank or (b) one hundred percent (100%), as stipulated herein for certain described events (such as Involuntary Termination or Termination for Good Reason within two years following a Change in Control, or the Executive's Disability). Subject to the forgoing, the Applicable Percentage shall be as follows:

DATE OF SEPARATION FROM SERVICE	APPLICABLE PERCENTAGE
December 5, 2005 thru December 5, 2008	0%
December 6, 2008 thru December 5, 2009	15%
December 6, 2009 thru December 5, 2010	20%
December 6, 2010 thru December 5, 2011	25%
December 6, 2011 thru December 5, 2012	30%

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December 6, 2012 thru December 5, 2013	35%
December 6, 2013 thru December 5, 2014	40%
December 6, 2014 thru December 5, 2015	45%
December 6, 2015 thru December 5, 2016	50%
December 6, 2016 thru December 5, 2017	55%
December 6, 2017 thru December 5, 2018	60%
December 6, 2018 thru December 5, 2019	65%
December 6, 2019 thru December 5, 2020	70%
December 6, 2020 thru December 5, 2021	75%
December 6, 2021 thru December 5, 2022	80%
December 6, 2022 thru December 5, 2023	85%
December 6, 2023 thru December 5, 2024	90%
December 6, 2024 thru December 5, 2025	95%
December 6, 2025 and Thereafter	100%

2.4    Base Salary."Base Salary" shall mean the regular cash compensation actually paid to Executive for services rendered or labor performed by Executive during a given calendar year, excluding bonuses, commissions, overtime, incentive payments, non-monetary awards. This amount shall include amounts Executive could have received in cash in lieu of (i) contributions made on Executive's behalf to a qualified Plan maintained by the Bank or to any cafeteria plan under Section 125 of the Code maintained by the Employer and (ii) deferrals of compensation made at the Executive's election pursuant to a plan or arrangement of the Employer.

2.5    Board. “Board” means the Board of Directors of Columbia State Bank.

2.6    Change in Control.For the purpose of this Agreement, a Change in Control shall include any of the following (and for the purposes of this provision, the term “corporation” shall mean “the Bank” as defined above):

A. Change in the Ownership of a Corporation. A change in the ownership of a corporation occurs on the date that any one person or persons acting as a group (as defined in IRC 409A), acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of such corporation. The acquisition of additional stock by the same person or group is not considered to cause a change in the ownership of the corporation.

B. Change in the Effective Control of a Corporation. A change in the effective control of the corporation shall be deemed to occur on either of the following dates:

(i) The date any one person, or persons acting as a group acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or group) ownership of stock of the corporation possessing thirty percent (30%) or more of the total voting power of the stock of such corporation; or

2

(ii) The date a majority of members of the corporation’s board of directors is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the corporation’s board of directors before the date of the appointment or election.

C. Change in the Ownership of a Substantial Portion of a Corporation’s Assets. A change in the ownership of a substantial portion of a corporation’s assets shall be deemed to occur on the date that any one person or group acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the corporation immediately before such acquisition or acquisitions. No Change in Control shall result if the assets are transferred to certain entities controlled directly or indirectly by the shareholders of the transferring corporation.

In addition, to constitute a change in control event with respect to the Executive, the change in control event must relate to (i) the corporation for whom Executive is performing services at the time of the Change in Control; (ii) The corporation that is liable for the payment of the amounts described herein (or all corporations liable for the payment if more than one corporation is liable) but only if either the deferred compensation is attributable to the performance of service by the Executive for such corporation(s) or there is a bona fide business purpose for such corporation(s) to be liable for such payment and, in either case, no significant purpose of making such corporation(s) liable for such payment is the avoidance of Federal income tax; or (iii) a corporation that is a majority shareholder of a corporation identified in (i) or (ii) above, or any corporation in a chain of corporations in which each corporation is a majority shareholder of another corporation in the chain, ending in a corporation identified in (i) or (ii) above.

2.7    The Code.The "Code" shall mean the Internal Revenue Code of 1986, as amended (the “Code").

2.8    Committee. “Committee” means the Compensation Committee of the Board of Directors of Columbia State Bank.

2.9    Disability/Disabled.For the purposes of this Agreement, Executive will be considered Disabled if:

A. The Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or

B. The Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Employee’s employer.

3

2.10    Early Commencement Reduction Factor. The term “Early Commencement Reduction Factor” is the amount by which Executive’s benefit shall be reduced based on the benefit being paid prior to Executive’s attaining the Normal Retirement Age. The amount of the Early Commencement Reduction Factor shall be determined as follows: for each year (or partial year) that an Executive’s benefit hereunder is paid prior to his attainment of the Normal Retirement Age, then the benefit amount shall be reduced by a factor of Five Percent (5%). Thus, if an executive with a Normal Retirement Age of Sixty-Two (62) begins receiving payments at age Fifty-Nine (59), the amount of the annual benefit shall be reduced by 15% (62- 59 = 3; 3 x 5%= 15%).

2.11    Early Retirement Age.The “Early Retirement Age” shall be age fifty-five (55).

2.12    ERISA.The term "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended.

2.13    Effective Date. The term “Effective Date” shall mean the date first written above.

2.14    Employer. The term “Employer” shall mean Columbia State Bank, any subsidiaries or affiliates thereof, or any successors thereto.

2.15    Executive Benefit. For the purposes of this Agreement, then term “Executive Benefit” shall refer to the annual amount to which Executive is entitled to receive pursuant to this Agreement. In addition, as the Executive Benefit is defined in terms of a lifetime annuity, Executive shall have the rights under 409A to elect an alternate annuity payment method, as specified herein. Amounts actually received by the Executive, however, shall be determined pursuant to Paragraphs 1 through 5 (including sub-paragraphs, as applicable), forfeited, reduced or adjusted to the extent: (a) required under the other provisions of this Agreement; (b) required by reason of the lawful order of any regulatory agency or body having jurisdiction over the Employer; or (c) required in order for the Employer to comply with any and all applicable state and federal laws, including, but not limited to, income, employment and disability income tax laws (e.g., FICA, FUTA, SDI).

2.16    Involuntary Termination/ Involuntary Separation From Service. In accordance with IRC 409A, the terms “Involuntary Termination” or “Involuntary Separation from Service” shall mean a Separation from Service due to the independent exercise of the unilateral authority of the Bank to terminate the Executive’s services, other than due to the Executive’s implicit or explicit request, where the Executive was willing and able to continue performing services (and not as the result of a Disability of a Termination For Cause).

2.17IRC 409A. The term “IRC 409A” shall refer to the final regulations issued by the IRS and the Treasury Department under Section 409A of the Code.

2.18    Normal Retirement / Normal Retirement Age.The term "Normal Retirement" shall mean the Executive’s Separation From Service on or after attaining the Normal Retirement Age of Sixty-Five (65) and for reasons other than a Termination for Cause, because of a Disability, or pursuant to the provisions of paragraph 5.4.

2.19    Participant. For the purpose of this Agreement, the terms “Executive” and “Participant” shall be interchangeable.

4

2.20    Remain Employed. For the purpose of this Agreement, the term “Remain(s) Employed” shall mean that Executive has not experienced a Separation From Service.

2.21    Separation From Service/ Termination of Employment. The terms Separation From Service (Separates From Service) and Termination of Employment shall be used interchangeably for the purposes of this Agreement and shall be interpreted in accordance with the provisions of IRC 409A. Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the Bank and the Executive reasonably anticipate that no further services will be performed after a certain date or that the level of bona fide services the employee will perform after such date (whether as an employee or as an independent contractor) will permanently decrease to no more than twenty (20%) percent of the average level of bona fide services performed (as an employee or an independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the employer if the employee has been providing services to the employer less than 36 months). There shall be no Separation From Service while the Executive is on military leave, sick leave or other bona fide leave of absence, as long as such leave does not exceed six (6) months, or if longer, so long as the individual retains a right to re-employment with the service recipient under an applicable statute or by contract.

2.22    Specified Employee. The term “Specified Employee” means an employee who, as of the date of the employee’s Separation from Service, is a key employee of an employer of which any stock is publicly traded on an established securities market or otherwise. An employee is a key employee if the employee meets the requirements of section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding section 416(i)(5)) at any time during the twelve (12) month period ending on a specified employee identification date. If Executive is a key employee as of a specified employee identification date, then Executive shall be treated as a key employee for the entire twelve (12) month period beginning on the specified employee effective date.

2.23    Target Benefit Amount.For the purposes of this Agreement, the “Target Benefit Amount” shall be an amount equal to the lesser of the following: sixty percent (60%) of the average of Executive’s three highest years of Base Salary or One Hundred Ninety-Eight Thousand, Eight Hundred and Seven Dollars ($198,807).

2.24    Termination For Cause. For the purpose of this Plan, a Termination For Cause shall be defined as a Termination because of any of the following:

A. Willful misfeasance or gross negligence;

B. Conduct demonstrably and significantly harmful to Employer or a financial institution subsidiary; or

C. Conviction of a felony.

2.25    Termination For Good Reason.Atermination shall be deemed to be for Good Reason if after a Change of Control, Executive Separates From Service on or after the occurrence of any of the below events, and such events occur without the Executive’s consent:

5

A. A material diminution in the Executive’s base compensation;

B. A material diminution in the Executive’s authority, duties, or responsibilities;

C. A material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report, including a requirement that an Executive report to a corporate officer or employee instead of reporting directly to the board of directors of a corporation (or similar governing body with respect to an entity other than a corporation);

D. A material diminution in the budget over which the Executive retains authority;

E. A material change in the geographic location at which the Executive must perform the services;

F. Any other action or inaction that constitutes a material breach by the Employer of the agreement under which the Executive provides services.

2.26    Voluntary Termination. The term “Voluntary Termination” shall mean a Separation From Service elected by the Executive and not as a result of a Disability or For Good Reason.

2.27Years of Service. The term “Years of Service” shall mean the twelve (12) consecutive month period beginning on December 5, 2005 and any twelve (12) month anniversary thereof, during the entirety of which time the Participant is an employee of the Company and has not experienced a Separation From Service. Service with a subsidiary or other entity controlled by the Company before the time such entity became a subsidiary or under such control shall not be considered credited “Service” unless the Plan Administrator specifically agrees to credit such service.

ARTICLE III

SCOPE, PURPOSE AND EFFECT

3.1    Not a Contract of Employment. Although this Agreement is intended to provide the Executive with an additional incentive to remain in the employ of the Employer, this Agreement shall not be deemed to constitute a contract of employment between the Executive and the Employer nor shall any provision of this Agreement restrict or expand the right of the Employer to terminate the Executive's employment. This Agreement shall have no impact or effect upon any separate written Employment Agreement which the Executive may have with the Employer, it being the parties' intention and agreement that unless this Agreement is specifically referenced in said Employment Agreement (or any modification thereto), this Agreement (and the Employer's obligations hereunder) shall stand separate and apart and shall have no effect on or be affected by, the terms and provisions of said Employment Agreement.

6

3.2    Fringe Benefit.The benefits provided by this Agreement are granted by the Bank as a fringe benefit to the Executive and are not a part of any salary reduction plan or any arrangement deferring a bonus or a salary increase. The Executive has no option to take any current payments or bonus in lieu of the benefits provided by this Agreement.

3.3    Prohibited Payments.Notwithstanding anything in this Agreement to the contrary, if any payment made under this Agreement is a “golden parachute payment” as defined in Section 28(k) of the Federal Deposit Insurance Act (12 U.S.C. section 1828(k) and Part 359 of the Rules and Regulations of the Federal Deposit Insurance Corporation (collectively, the “FDIC Rules”) or is otherwise prohibited, restricted or subject to the prior approval of a Bank Regulator, no payment shall be made hereunder without complying with said FDIC Rules.

ARTICLE IV

PAYMENT RESTRICTIONS AND LIMITATIONS

4.1Delay in Payments for Specified Employee in the Event of a Separation From Service and Compliance With IRC 409A. In the case of any Employee who is a Specified Employee as of the date of a Separation from Service, then a payment conditioned upon a Separation from Service may not be made before the date that is six (6) months after the date of Separation from Service (or, if earlier than the end of the six-month period, the date of death of the Specified Employee).

In the event payments to which the Executive would otherwise be entitled during the first six (6) months are subject to this six (6) month delay in payment, then such payments shall be accumulated and paid on the first day of the seventh month following the date of Separation from Service. Payments will then continue thereafter as called for pursuant to the terms of this Agreement.

Notwithstanding any provision existing in this Agreement or any amendment thereto, it is the intent of the Bank and the Executive that any payment or benefit provided pursuant to this Agreement shall be made and paid in a manner, at a time and in a form which complies with the applicable requirements of IRC Section 409A, in order to avoid any unfavorable tax consequences resulting from any such failure to comply.

4.2     Modifying Form of Benefit Payment. Pursuant to the terms of the Agreement, and consistent Code Section 409A, when permitted herein, instead of having the Executive Benefit paid as a single life annuity, Executive may elect to have the benefit paid as follows: (i) A joint and survivor annuity with an actuarial equivalent of the benefit owing pursuant to the Agreement, with payment continued to the surviving spouse in the same amount as the amount paid to Executive, or (ii) A joint and survivor annuity in equal value to the actuarial equivalent of the benefit owing pursuant to the Agreement, with payment continued to the surviving spouse in one-half of the amount paid to Executive. (For the purpose of this Agreement, the term “spouse” shall include a registered domestic partner).

4.3    Withholding of Payroll Taxes. The Employer shall withhold from payments made hereunder any taxes required to be withheld from a Participant’s wage under federal, state or local law.

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ARTICLE V

PAYMENT OF EXECUTIVE BENEFITS

Executive Benefit payments due hereunder shall be payable under this Agreement pursuant to only (1) provision herein below. The date and circumstances of Executive’s Separation From Service shall determine which paragraph shall be used to calculate the Executive Benefit payment due.

In addition, as all benefit amounts due under both this Agreement and the Supplemental Compensation Agreement dated January 22, 2008 (hereafter “SCA”) will be determinable as of Executive’s Separation From Service date, the following benefit determination/reduction formula shall be used to determine amounts due hereunder:

In the event any benefit payments due under this Agreement are scheduled to be made simultaneously with payment amounts due Executive pursuant to the SCA, then any amount due hereunder shall be reduced by amounts to be paid out pursuant to such SCA. (For the purposes of this provision, “simultaneous(ly)” shall mean payments due in the same month). Additionally, in the event that payments hereunder are to be made in one (1) lump sum, then any amount paid out hereunder shall be reduced by any amounts already paid out under the terms of the SCA, as well as by an amount equal to all amounts still outstanding and due under the terms of the SCA. Subject to the forgoing, the Executive Benefits due hereunder shall be as follows:

5.1       Executive Benefit Payments in the Event of Normal Retirement. Subject to the non-compete provisions of Paragraph 5.8 below, the Executive Benefit under this provision shall be determined as follows:

A. Amount of Benefit. In the event Executive Separates From Service on a date which constitutes Normal Retirement as defined herein, then the Executive shall receive an amount calculated as follows: the Applicable Percentage (as of the Separation From Service date) of the Target Benefit Amount. In addition to the forgoing, the annual Executive Benefit amount shall be increased at the rate of two percent (2%) each year, beginning on the first anniversary of the first Executive Benefit payment and annually thereafter for so long as Executive is entitled to receive an Executive Benefit.

B. Payment Method. This Annual Executive Benefit shall be paid in twelve (12) substantially equal monthly installments, with payments commencing on the first day of the first month following Executive’s Separation From Service and continuing until the death of the Executive.  

As this Executive Benefit is a lifetime annuity, then in the alternative, and in compliance with Code Section 409A, Executive may elect one (1) of two (2) alternative annuity payout methods as presented in Exhibit A, the Distribution Election Form. These optional methods consist of joint and survivor annuities with an Actuarial Equivalent value equal to the single life Executive Benefit, with payments continued to the survivor in varying amounts. Exhibit B, attached hereto, provides a hypothetical example of how the benefit

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payments might differ between a single life annuity and a joint life annuity. The benefit payment commencement date and schedule shall otherwise remain unchanged. Any election to use an alternate annuity payment method must be made prior to the payment start date and, other than as addressed herein below, Executive shall not have the ability to modify the form of annuity elected once payments have begun. In the event , however, that a joint and survivor annuity option is elected and the Executive’s spouse pre-deceases Executive, then for all payments made to Executive after the Executive’s spouse’s death, the amounts payable under this Agreement shall increase and be equal to the payment amounts Executive would have received under a single life annuity option. Executive shall not be able then to designate a new spouse and reinstate joint life annuity payments.

5.2      Executive Benefit Payments on or After Attaining the Early Retirement Age but Before Attaining the Normal Retirement Age.

Subject to the non-compete provisions of Paragraph 5.8 below, in the event Executive Separates From Service on or after attaining the Early Retirement Age, but before attaining the Normal Retirement Age, then the Executive Benefit to which Executive is entitled shall be determined as follows:

A. Amount of Benefit.

(1) In the event Executive has completed Ten (10) Years of Service, then upon a Voluntary Separation From Service on or after attaining the Early Retirement Age (but before attaining the Normal Retirement Age), Executive shall be entitled to receive an amount calculated as follows: the Applicable Percentage (as of the Separation From Service date) of the Target Benefit Amount; however this amount shall be reduced by the Early Commencement Reduction Factor. In addition to the forgoing, the annual Executive Benefit amount shall be increased at the rate of two percent (2%) each year, beginning on the first anniversary of the first Executive Benefit payment and annually thereafter for so long as Executive is entitled to receive an Executive Benefit

(2) In the event Executive has not completed Ten (10) Years of Service, then upon a Voluntary Separation From Service on or after attaining the Early Retirement Age (but before attaining the Normal Retirement Age), Executive shall forfeit all rights and benefits he may have had under the terms of this Agreement

(3) In the event Executive is Involuntarily Terminated on or after attaining the Early Retirement Age (but before attaining the Normal Retirement Age), then Executive shall be entitled to receive an amount calculated as follows: the Applicable Percentage (as of the Separation From Service date) of the Target Benefit Amount; however this amount shall be reduced by the Early Commencement Reduction Factor. In addition to the forgoing, the annual Executive Benefit amount shall be increased at the rate of two percent (2%) each year, beginning on the first anniversary of the first Executive

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Benefit payment and annually thereafter for so long as Executive is entitled to receive an Executive Benefit.

B.    Payment Method. Any Executive Benefit due hereunder shall be paid in twelve (12) substantially equal monthly installments, with payments commencing on the first day of the first month following Executive’s Separation From Service and continuing until the death of the Executive.  

As this Executive Benefit is a lifetime annuity, then in the alternative, and in compliance with Code Section 409A, Executive may elect one (1) of two (2) alternative annuity payout methods as presented in Exhibit A, the Distribution Election Form. These optional methods consist of joint and survivor annuities with an Actuarial Equivalent value equal to the single life Executive Benefit, with payments continued to the survivor in varying amounts. Exhibit B, attached hereto, provides a hypothetical example of how the benefit payments might differ between a single life annuity and a joint life annuity. The benefit payment commencement date and schedule shall otherwise remain unchanged. Any election to use an alternate annuity payment method must be made prior to the payment start date and, other than as addressed herein below, Executive shall not have the ability to modify the form of annuity elected once payments have begun. In the event , however, that a joint and survivor annuity option is elected and the Executive’s spouse pre-deceases Executive, then for all payments made to Executive after the Executive’s spouse’s death, the amounts payable under this Agreement shall increase and be equal to the payment amounts Executive would have received under a single life annuity option. Executive shall not be able then to designate a new spouse and reinstate joint life annuity payments.

     5.3       Executive Benefit Payments in the Event of Involuntary or Voluntary Termination Prior to Attaining the Early Retirement Age.

Subject to the non-compete provisions of Paragraph 5.8 below, in the event Executive Separates From Service prior to attaining the Early Retirement Age, then the Executive Benefit to which Executive is entitled shall be determined as follows:

A. Benefit Amount.

(1) In the event the Executive is Involuntarily Terminated prior to attaining the Early Retirement Age, then Executive shall be entitled to receive an Executive Benefit in an amount equal to the following: the Actuarial Equivalent of the Applicable Percentage (as of the Separation From Service date) of the Target Benefit Amount.

(2) In the event the Executive Voluntarily Terminates employment with the Bank prior to attaining the Early Retirement Age, then the Executive Benefit shall be determined as follows: (i) In the event Executive has attained an AP of 100%, then he shall be entitled to receive an Executive Benefit in an amount equal to the Actuarial Equivalent of the Applicable Percentage of the of the Target Benefit Amount; (ii) In the event Executive has not attained an Applicable Percentage of 100%, he shall forfeit any

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and all rights and benefits he may have under the terms of this Agreement and shall have no right to be paid any of the amounts which would otherwise be due or paid to the Executive by the Bank pursuant to the terms of this Agreement.

B.   Payment Method. This Executive Benefit shall be paid in one (1) lump sum one (1) year following Separation From Service.

5.4Termination Following a Change in Control. Benefits hereunder shall be determined as follows:

A. Benefit Amount.

(1) Involuntary Termination or Termination for Good Reason. In the event Executive is Involuntarily Terminated or Terminates for Good Reason following a Change in Control, then the Applicable Percentage shall be deemed to be that percentage Executive would have received had he Remained Employed until attaining the Normal Retirement Age of Sixty-Five (65). Executive shall then be entitled to receive an annual amount calculated as follows: the Applicable Percentage of the Target Benefit Amount. Executive shall NOT be subject to the non-compete provisions of Paragraph 5.8 below.

(2) Voluntary Termination. In the event Executive Voluntarily Separates From Service following a Change in Control, then Executive shall be entitled to receive one of the following amounts, depending on the circumstances specified below:

a.If Executive has attained the Early Retirement Age and has completed ten (10) Years of Service, if he has attained an Applicable Percentage of One Hundred Percent (100%), or if he has attained the Normal Retirement Age at the time of such Separation From Service, then he shall receive an amount calculated as follows: the Applicable Percentage of the Target Benefit Amount. Executive shall be subject to the non-compete provisions of Paragraph 5.8 below.

b.     In the event Executive does not qualify for Normal Retirement and does not satisfy the requirements of Paragraph 5.4A(2)a above, then in the event Executive Voluntarily Separates From Service following a Change in Control, he shall forfeit all rights and benefits he may have had under the terms of this Agreement.

B.Benefit Payments. If Executive is entitled to receive a benefit pursuant to the terms of this Paragraph 5.4, then the benefit shall be payable as follows:

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(1) In the event Executive has qualified for Early or Normal Retirement, then Executive Benefit payments shall commence on the first day of the first month following the Executive’s Separation From Service and shall be paid in twelve (12) substantially equal monthly installments, with payments commencing on the first day of the first month following Executive’s Separation From Service and continuing until the death of Executive. In addition to the forgoing, the annual Executive Benefit amount shall be increased at the rate of two percent (2%) each year, beginning on the first anniversary of the first Executive Benefit payment and annually thereafter for so long as Executive is entitled to receive an Executive Benefit.

As this Executive Benefit is a lifetime annuity, then in the alternative, and in compliance with Code Section 409A, Executive may elect one (1) of two (2) alternative annuity payout methods as presented in Exhibit A, the Distribution Election Form. These optional methods consist of joint and survivor annuities with an Actuarial Equivalent value equal to the single life Executive Benefit, with payments continued to the survivor in varying amounts. Exhibit B, attached hereto, provides a hypothetical example of how the benefit payments might differ between a single life annuity and a joint life annuity. The benefit payment commencement date and schedule shall otherwise remain unchanged. Any election to use an alternate annuity payment method must be made prior to the payment start date and, other than as addressed herein below, Executive shall not have the ability to modify the form of annuity elected once payments have begun. In the event , however, that a joint and survivor annuity option is elected and the Executive’s spouse pre-deceases Executive, then for all payments made to Executive after the Executive’s spouse’s death, the amounts payable under this Agreement shall increase and be equal to the payment amounts Executive would have received under a single life annuity option. Executive shall not be able then to designate a new spouse and reinstate joint life annuity payments.

(2) In the event Executive has not yet qualified for Early or Normal Retirement, then the Actuarial Equivalent of the Executive Benefit shall be paid in one (1) lump sum one (1) year following Separation From Service.

5.5       Disability.  In the event that Executive becomes Disabled prior to Separating From Service, then upon such Disability, the Applicable Percentage shall be deemed to be One Hundred Percent (100%) and the Participant shall be entitled to be paid a lump sum amount equal to the Actuarial Equivalent value of the following: the Applicable Percentage of the Target Benefit Amount. This lump sum payment shall be made in the first (1^st) day of the first (1^st) month following Disability.

5.6        Termination For Cause.  In the event Executive is Terminated For Cause at any time after the effective date of this Agreement, then he shall forfeit any and all rights and benefits he may have under the terms of this Agreement and shall have no right to be paid any of the amounts which would otherwise be due or paid to the Executive by the Bank pursuant to the terms of this Agreement.

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5.7       Death.

A. Benefit Amount.

(1) Death Prior to Separation From Service.In the event Executive dies prior to Separating From Service, then there is no death benefits payable under this Agreement. Any such benefits would be payable pursuant to a Split Dollar Life Insurance Agreement, if any exists.

(2) Death After Separation From Service and After Becoming Entitled to Receive Payment, but Prior to Receiving Any or All Such Payments. In the event Executive dies after Separating From Service and after becoming entitled to the benefits specified under this Agreement, then payments shall only be made following Executive’s death if Executive has elected a joint and survivor payment option.

5.8Forfeiture in the Event of Breach of Non-Competition Agreement.Notwithstanding any other provision of this Agreement, the Executive Benefit due pursuant to the provisions of Paragraphs, 5.1, 5.2, 5.3 5.4A(2) and 5.5 shall be forfeited and no Executive Benefit shall be due the Executive hereunder if the Executive enters into competitive activity in the Employer's market area within the three (3) year period beginning on the date of the Executive's termination of Employment. To the extent Executive is paid an Executive Benefit under this Agreement and breaches this provision, Employer shall not only be excused from paying any future benefit, but Employer shall have the right to seek reimbursement for all amounts previously paid out under this Agreement. For the purposes of this Agreement, “competitive activity” means acting directly or indirectly as an employee, agent, stockholder (other than passive holdings of less than one percent (1%) of the outstanding shares of a publicly-traded company), member, director, co-partner or in any other individual or representative capacity on behalf of any bank or financial institution (including without limitation trust company, finance company, leasing company or any entity that provides credit). The Employer's market area is defined as the following counties in the State of Washington and all counties bordering on any such county and any county in which the Employer maintains a branch or other office, now or at the time of the Executive's termination of Employment: Cowlitz, King, Kitsap, Pierce and Thurston.

ARTICLE VI

ADMINISTRATION

6.1    Committee and Duties. This Plan shall be administered by an Administrative Committee which shall consist of not less than three persons appointed by the Board of Directors. Any member of the Committee may be removed at any time by the Board. Any member may resign by delivering his written resignation to the Board. Upon the existence of any vacancy, the Board may appoint a successor. The Committee shall have the authority to make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan and decide or resolve any and all questions including interpretations of this Plan, as may arise in connection with the Plan. A majority of the members of the Committee shall constitute a quorum for the

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transaction of business. A majority vote of the Committee members constituting a quorum shall control any decision.

6.2    Agents. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with counsel who may be counsel to the Employer.

6.3    Binding Effect of Decisions. The decision or action of the Committee in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

6.4    Indemnity of Committee. The Employer shall indemnify and hold harmless the members of the Committee against any and all claims, loss, damage, expense, or liability arising from any action or failure to act with respect to this Plan, except in the case of gross negligence or willful misconduct.

ARTICLE VII

CLAIMS PROCEDURE

7.1    Claim.    In the event a dispute arises over the benefits under this executive plan and benefits are not paid to the Executive (or to the Executive’s beneficiary[ies], if applicable) and such claimants feel they are entitled to receive such benefits, then a written claim must be made to the Named Fiduciary and Plan Administrator named above in accordance with the following procedures:

A. Written Claim. The claimant may file a written request for such benefit to the Plan Administrator.

B. Claim Decision. Upon receipt of such claim, the Plan Administrator shall respond to such claimant within ninety (90) days after receiving the claim. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional ninety (90) days for reasonable cause by notifying the claimant in writing, prior to the end of the initial ninety (90) day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

If the claim is denied in whole or in part, the Plan Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

(i) The specific reasons for the denial;

(ii) The specific reference to pertinent provisions of the Agreement on which the denial is based;

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(iii) A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary;

(iv) Appropriate information as to the steps to be taken if the claimant wishes to submit the claim for review and the time limits applicable to such procedures; and

(v) A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

C. Request for Review. Within sixty (60) days after receiving notice from the Plan Administrator that a claim has been denied (in part or all of the claim), then claimant (or their duly authorized representative) may file with the Plan Administrator, a written request for a review of the denial of the claim.

The claimant (or his duly authorized representative) shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.

D. Decision on Review. The Plan Administrator shall respond in writing to such claimant within sixty (60) days after receiving the request for review. If the Plan Administrator determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the claimant prior to the termination of the initial sixty (60) day period. In no event shall such extension exceed a period of sixty (60) days from the end of the initial period. The notice of extension must set forth the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render its decision.

In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

(i)    The specific reasons for the denial;

(ii) A reference to the specific provisions of the Agreement on which the denial is based;

(iii) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits; and

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(iv) A statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

E. Special Timing Rules for Disability Claims. In the event a claim above is a claim for disability benefits, then the applicable time periods for notifying claimants regarding benefits determinations shall be reduced as required by 29 CFR 2560.503-1 (I.e., (a) the ninety (90) day response time with the possibility of a ninety (90) day extension in Section 8.2B shall be shortened to a forty-five (45) day response time with the possibility of a thirty (30) day extension, and (b) the sixty (60) day response time with the possibility of a sixty (60) day extension in shall be shortened to a forty-five (45) day response time with the possibility of a forty-five (45) day extension). In addition, in the event of a disability claim, the Bank shall identify any medical or vocational expert whose advice was obtained by the Plan in connection with the initial benefit determination, without regard to whether the advice was relied upon.  If the review is from an adverse benefit determination that was based in whole or in part on a medical judgment, the Bank shall consult with a health care professional that has appropriate training and experience in the field of medicine involved in the medical judgment and who is neither the individual who was consulted in connection with the adverse benefit determination that is under review nor the subordinate of such individual.  Any review of the denial of a claim made on account of disability shall be conducted by a person or persons who neither had any part in the initial benefit determination nor are subordinates of the persons who did.

7.2    Arbitration of Disputes. All unresolved claims, disputes and other matters in question arising out of or relating to this Plan or the breach or interpretation thereof, other than those matters which are to be determined by the Employer in its sole and absolute discretion, shall be resolved by binding arbitration before a representative member, selected by the mutual agreement of the parties, of JAMS in Tacoma, Washington. In the event JAMS is unable or unwilling to conduct the arbitration provided for under the terms of this Paragraph, or has discontinued its business, the parties agree that a representative member, selected by the mutual agreement of the parties, of the American Arbitration Association (“AAA”), located in Tacoma, Washington, shall conduct the binding arbitration referred to in this Paragraph. Notice of the demand for arbitration shall be filed in writing with the other party to this Plan and with ASP (or AAA, if necessary). In no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations. The arbitration shall be subject to such rules of procedure used or established by JAMS, or if there are none, the rules of procedure used or established by AAA. Any award rendered by JAMS or AAA shall be final and binding upon the successors and assigns, and may be entered in any court having jurisdiction thereof. The obligation of the parties to arbitrate pursuant to this clause shall be specifically enforceable in accordance with, and shall be conducted consistently with the provisions of the Washington Rules of Civil Procedure. Any arbitration hereunder shall be conducted in Tacoma, Washington, unless otherwise agreed to by the parties.

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7.3    Attorneys' Fees. In the event of any arbitration or litigation concerning any controversy, claim or dispute between the parties hereto, arising out of or relating to this Agreement or the breach hereof, or the interpretation hereof, (a) each party shall pay his own attorneys’ arbitration fees incurred (pursuant to the terms of this Agreement); (b) the prevailing party shall be entitled to recover from the other party reasonable expenses, attorneys' fees and costs incurred in the enforcement or collection of any judgment or award rendered. The "prevailing party" means any party (one party or both parties, as the case may be) determined by the arbitrator(s) or court to be entitled to money payments from the other, not necessarily the party in whose favor a judgment is rendered.

ARTICLE VIII

MISCELLANEOUS

8.1    Unfunded Plan. This Plan is intended to be an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of “management or highly compensated employees” within the meaning of Sections 201, 301, and 401 of the Employee Retirement Income Security act of 1974, as amended (“ERISA”), and therefore to be exempt from the provisions of Parts 2, 3, and 4 of Title I ERISA. Accordingly, the Plan shall terminate and no further benefits shall be paid hereunder in the event it is determined by a court of competent jurisdiction or by an opinion of counsel that the Plan constitutes an employee pension benefit plan within the meaning of Section 3(2) of ERISA which is not so exempt.

8.2Status as an Unsecured General Creditor and Rabbi Trust.Notwithstanding anything contained herein to the contrary: (i) the Executive shall have no legal or equitable rights, interests or claims in or to any specific property or assets of the Employer as a result of this Agreement; (ii) none of the Bank’s assets shall be held in or under any trust for the benefit of the Executive or held in any way as security for the fulfillment of the obligations of the Bank under this Agreement; (iii) all of the Bank’s assets shall be and remain the general unpledged and unrestricted assets of the Bank; (iv) the Bank’s obligation under this Agreement shall be that of an unfunded and unsecured promise by the Bank to pay money in the future; and (v) the Executive shall be an unsecured general creditor with respect to any benefits which may be payable under the terms of this Agreement.

Notwithstanding subparagraphs (i) through (v) above, the Bank and the Executive acknowledge and agree that, in the event of a Change in Control, upon request of the Executive, or in the Bank’s discretion if the Executive does not so request and the Bank nonetheless deems it appropriate, the Bank shall establish, not later than the effective date of the Change in Control, a Rabbi Trust or multiple Rabbi Trusts (the "Trust" or "Trusts") upon such terms and conditions as the Bank, in its sole discretion, deems appropriate and in compliance with applicable provisions of the Code, in order to permit the Bank to make contributions and/or transfer assets to the Trust or Trusts to discharge its obligations pursuant to this Agreement. The principal of the Trust or Trusts and any earnings thereon shall be held separate and apart from other funds of the Bank to be used exclusively for discharge of the Bank’s obligations pursuant to this Agreement and shall continue to be subject to the claims of the Bank’s general creditors until paid to the Executive in such manner and at such times as specified in this Agreement.

8.3    Non-assignability. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be unassignable and nontransferable. No part of the amount payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.

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8.4    Not a Contract of Employment. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between the Employer and the Participant, and the Participant (or his beneficiary, if applicable) shall have no rights against the Employer except as may otherwise be specifically provided herein. Moreover, nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of the Employer or to interfere with the right of the Employer to discipline or discharge him at any time.

8.5    Protective Provisions. A Participant will cooperate with the Employer by furnishing any and all information requested by the Employer, in order to facilitate the payment of benefit hereunder, and by taking such physical examinations as the Employer may deem necessary and taking such other action as may be requested by the Employer.

8.6    Terms. Whenever any words are used herein in the masculine, they shall be construed as though they were used in the feminine in all cases where they would so apply; and wherever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or singular, as the case may be, in all cases where they would so apply.

8.7    Captions. The captions of the articles, sections, and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

8.8    Governing Law. The provisions of this Plan shall be construed, interpreted, and governed in all respects in accordance with applicable federal law and, to the extent not preempted by such federal law, in accordance with the laws of the State of Washington.

8.9    Validity. If any provision of this Plan shall be held illegal or invalid for any reason, the remaining provisions shall nevertheless continue in full force and effect without being impaired or invalidated in any way.

8.10    Binding Effect/Merger or Reorganization. This Agreement shall be binding upon and inure to the benefit of the Executive and the Bank. Accordingly, the Bank shall not merge or consolidate into or with another corporation, or reorganize or sell substantially all of its assets to another corporation, firm or person, unless and until such succeeding or continuing corporation, firm or person agrees to assume and discharge the obligations of the Bank under this Agreement. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Employer, and successors of any such corporation or other business entity.

8.11    Nonwaiver. The failure of either party to enforce at any time or for any period of time any one or more of the terms or conditions of this Agreement shall not be a waiver of such term(s) or condition(s) or of that party's right thereafter to enforce each and every term and condition of this Agreement.

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8.12    Partial Invalidity. If any terms, provision, covenant, or condition of this Agreement is determined by an arbitrator or a court, as the case may be, to be invalid, void, or unenforceable, such determination shall not render any other term, provision, covenant or condition invalid, void or unenforceable, and the Agreement shall remain in full force and effect notwithstanding such partial invalidity.

8.13    Entire Agreement. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties with respect to the subject matter of this Agreement and contains all of the covenants and agreements between the parties with respect thereto. Each party to this Agreement acknowledges that no other representations, inducements, promises, or agreements, oral or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not set forth herein, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding on either party.

8.14    Modifications. Any modification of this Agreement shall be effective only if it is in writing and signed by each party or such party's authorized representative, and only to the extent that it is compliant with all applicable codes and statutes, including but not limited to IRS Code Section 409A.

8.15    Notice. Any notice required or permitted of either the Executive or the Bank under this Agreement shall be deemed to have been duly given, if by personal delivery, upon the date received by the party or its authorized representative; if by facsimile, upon transmission to a telephone number previously provided by the party to whom the facsimile is transmitted as reflected in the records of the party transmitting the facsimile and upon reasonable confirmation of such transmission; and if by mail, on the third day after mailing via U.S. first class mail, registered or certified, postage prepaid and return receipt requested, and addressed to the party at the address given below for the receipt of notices, or such changed address as may be requested in writing by a party.

If to the Bank:                        If to the Executive:

8.16    IRS Section 280G Issues. If all or any portion of the amounts payable to the Participant under this Plan, either alone or together with other payments which the Participant has the right to receive from the Employer, constitute "excess parachute payments" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), that are subject to the excise tax imposed by Section 4999 of the Code (or similar tax and/or assessment), Participant shall be responsible for the payment of such excise tax and Employer (and its successor) shall be responsible for any loss of deductibility related thereto; provided, however, that Employer and Participant shall cooperate with each other and use all reasonable efforts to minimize to the fullest extent possible the amount of excise tax imposed by Section 4999 of the Code, but only to the extent that any agreement to minimize the impact of the Section 4999 excise tax shall comply in all respects with all applicable laws, including IRC Section 409A and regulations thereunder. If, at a later date, it is determined (pursuant to final regulations or published rulings of the Internal Revenue Service, final judgment of a court of competent jurisdiction, or otherwise) that the amount of excise taxes payable by the Participant is greater than the amount initially so determined, then the Participant shall pay an amount equal to the sum of such additional excise taxes and any interest, fines and penalties resulting from such underpayment. The determination of the amount of any such excise taxes shall be made by the independent accounting firm employed by the Employer immediately prior to the change in control or such other independent accounting firm or advisor as may be mutually agreeable to Employer and Participant in the exercise of their reasonable good faith judgment.

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8.17    Opportunity To Consult With Independent Advisors. The Executive acknowledges that he has been afforded the opportunity to consult with independent advisors of his choosing including, without limitation, accountants or tax advisors and counsel regarding both the benefits granted to him under the terms of this Agreement and the (i) terms and conditions which may affect the Executive's right to these benefits and (ii) personal tax effects of such benefits including, without limitation, the effects of any federal or state taxes, Section 280G of the Code, and any other taxes, costs, expenses or liabilities whatsoever related to such benefits, which in any of the foregoing instances the Executive acknowledges and agrees shall be the sole responsibility of the Executive notwithstanding any other term or provision of this Agreement. The Executive further acknowledges and agrees that the Bank shall have no liability whatsoever related to any such personal tax effects or other personal costs, expenses, or liabilities applicable to the Executive and further specifically waives any right for himself or herself, and his or her heirs, beneficiaries, legal representatives, agents, successor and assign to claim or assert liability on the part of the Bank related to the matters described above in this paragraph. The Executive further acknowledges that he has read, understands and consents to all of the terms and conditions of this Agreement, and that he enters into this Agreement with a full understanding of its terms and conditions.

/s/ CLINT E. STEIN August 16, 2013	Clinton E. Stein
Executive- Signature and Date	Print Name
COLUMBIA STATE BANK
By:  /s/ MELANIE J. DRESSEL	Date: August 22, 2013
Authorized Executive
Title: CEO

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EXHIBIT A TO THE

DISTRIBUTION ELECTION FORM FOR THE

COLUMBIA STATE BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

Pursuant to the terms of the Supplemental Executive Compensation Agreement, by and between me,______________, and Columbia State Bank (hereinafter “Bank”), effective as of ______, 2013 (“Agreement”), I have been granted a supplemental compensation benefit.

Pursuant to Internal Revenue Code Section 409A, there are multiple restrictions and limitations regarding modifying the time and/or form of such payments; however an exception to these restrictions permits elections to change from a life annuity to another actuarially equivalent life annuity (prior to payments beginning).

In the event no alternate method is selected above, then amounts due under this Agreement shall be paid out as a single life annuity based on the life of the Participant. Subject to the forgoing, and provided that payments have not yet begun, Executive may elect to have the Executive Benefit paid as follows:

Election of Actuarial Equivalent of Form of Benefit For Married Participant or Participant with Domestic Partner. Pursuant to the terms of the Agreement, and consistent Code Section 409A, instead of having my benefit paid as a single life annuity, with payments continuing until my death, I elect to have my benefit paid to me as designated below:

_________ A joint and survivor annuity with an actuarial equivalent of the benefit owing pursuant to the Agreement, with payment continued to the surviving spouse in the same amount as the amount paid to me.

_________ A joint and survivor annuity in equal value to the actuarial equivalent of the benefit owing pursuant to the Agreement, with payment continued to my surviving spouse (registered domestic partner) in one-half of the amount paid to me.

Acknowledgment of Limitations on Changes in Time and Form of Payment of Benefits. All Actuarially Equivalent valuations must be in compliance with Code Section 409A and 1.409A-2(b)(2)(ii). In addition, when determining whether two life annuities are Actuarially Equivalent, the same actuarial assumptions and methods must be used in valuing each life annuity. This requirement applies over the entire term of Participant’s participation in the plan, such that the annuities must be actuarially equivalent at all times for the annuity options to be treated as one time and form of payment. However, provided the actuarial methods and assumptions are reasonable, there is no requirement that consistent actuarial assumptions and methods be used over the term of the Participant’s participation in the plan. Accordingly, the plan may change the actuarial assumptions and methods used to determine the life annuity payments, provided that all of the actuarial assumptions and methods are reasonable.

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In the event, however, that a joint and survivor annuity option is selected, and that Participant’s spouse predeceases Participant, then for all payments made to Participant after the Participant’s spouse’s death, the amounts payable under this Agreement shall increase andbe equal to the payment amounts Participant would have received under a single life annuity option. In addition, Participant shall no longer have the ability to make a new joint and survivor annuity election.

In the event no alternate method is selected above, then amounts due under this Agreement shall be paid out as a single life annuity.

To the extent that any paragraph, term, or provision of the Agreement is not specifically amended herein, or in any other amendment thereto, said paragraph, term, or provision shall remain in full force and effect as set forth in said Agreement.

WHEREFORE, the Insured and a duly authorized Bank officer have signed this Amendment as of the written date

Signed:    Print Name:
Dated:

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EX-10.2

EXHIBIT 10.2

COLUMBIA STATE BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

ARTICLE I

PURPOSE AND EFFECTIVE DATE

The purpose of this Supplemental Executive Retirement Plan (hereinafter the “Plan”) is to provide supplemental retirement benefits for certain key employees of COLUMBIA STATE BANK (hereinafter “Bank” or “Employer”), a bank organized and existing under the laws of the state of Washington. It is intended that the Plan will aid in retaining and attracting individuals of exceptional ability by providing them with these benefits. This Columbia State Bank Supplemental Executive Retirement Plan Agreement (hereinafter “Agreement”) is made and entered into effective as of June 1, 2013, by and between Columbia State Bank (hereinafter “Bank” or “Employer”) and Andrew L. McDonald (hereinafter “Executive” or “Participant”).

WHEREFORE, the Bank and Executive hereby agree to the following;

ARTICLE II

DEFINITIONS

For the purposes of this Plan, the following terms shall have the meanings indicated, unless the context clearly indicates otherwise:

2.1    Actuarial Equivalent. The term “Actuarial Equivalent” means equivalence in value between two or more forms and/or times of payment based on a determination by an actuary chosen by the Committee, using sound actuarial assumptions at the time of such determination.

2.2    Administrator.The Bank shall be the "Administrator" and, solely for the purposes of ERISA (as defined below), the "fiduciary" of this Agreement where a fiduciary is required by ERISA.

2.3    Applicable Percentage. The term “Applicable Percentage” is the percentage of the Executive Benefit to which Executive shall be entitled based on (a) the date on which the Executive Separates From Service or Terminates Employment with the Bank or (b) one hundred percent (100%), as stipulated herein for certain described events (such as Involuntary Termination or Termination for Good Reason within two years following a Change in Control, or the Executive's Disability). Subject to the forgoing, the Applicable Percentage shall be as follows:

DATE OF SEPARATION FROM SERVICE	APPLICABLE PERCENTAGE
June 1, 2004 thru June 1, 2007	0%
June 2, 2007 thru June 1, 2008	15%
June 2, 2008 thru June 1, 2009	20%
June 2, 2009 thru June 1, 2010	25%
June 2, 2010 thru June 1, 2011	30%

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June 2, 2011 thru June 1, 2012	35%
June 2, 2012 thru June 1, 2013	40%
June 2, 2013 thru June 1, 2014	45%
June 2, 2014 thru June 1, 2015	50%
June 2, 2015 thru June 1, 2016	55%
June 2, 2016 thru June 1, 2017	60%
June 2, 2017 thru June 1, 2018	65%
June 2, 2018 thru June 1, 2019	70%
June 2, 2019 thru June 1, 2020	75%
June 2, 2020 thru June 1, 2021	80%
June 2, 2021 thru June 1, 2022	85%
June 2, 2022 thru June 1, 2023	90%
June 2, 2023 thru June 1, 2024	95%
June 2, 2024 and Thereafter	100%

2.4    Base Salary."Base Salary" shall mean the regular cash compensation actually paid to Executive for services rendered or labor performed by Executive during a given calendar year, excluding bonuses, commissions, overtime, incentive payments, non-monetary awards. This amount shall include amounts Executive could have received in cash in lieu of (i) contributions made on Executive's behalf to a qualified Plan maintained by the Bank or to any cafeteria plan under Section 125 of the Code maintained by the Employer and (ii) deferrals of compensation made at the Executive's election pursuant to a plan or arrangement of the Employer.

2.5    Board. “Board” means the Board of Directors of Columbia State Bank.

2.6    Change in Control.For the purpose of this Agreement, a Change in Control shall include any of the following (and for the purposes of this provision, the term “corporation” shall mean “the Bank” as defined above):

A. Change in the Ownership of a Corporation. A change in the ownership of a corporation occurs on the date that any one person or persons acting as a group (as defined in IRC 409A), acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of such corporation. The acquisition of additional stock by the same person or group is not considered to cause a change in the ownership of the corporation.

B. Change in the Effective Control of a Corporation. A change in the effective control of the corporation shall be deemed to occur on either of the following dates:

(i) The date any one person, or persons acting as a group acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or group) ownership of stock of the corporation possessing thirty percent (30%) or more of the total voting power of the stock of such corporation; or

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(ii) The date a majority of members of the corporation’s board of directors is replaced during any twelve (12) month period by directors whose appointment or election is not endorsed by a majority of the members of the corporation’s board of directors before the date of the appointment or election.

C. Change in the Ownership of a Substantial Portion of a Corporation’s Assets. A change in the ownership of a substantial portion of a corporation’s assets shall be deemed to occur on the date that any one person or group acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of the corporation immediately before such acquisition or acquisitions. No Change in Control shall result if the assets are transferred to certain entities controlled directly or indirectly by the shareholders of the transferring corporation.

In addition, to constitute a change in control event with respect to the Executive, the change in control event must relate to (i) the corporation for whom Executive is performing services at the time of the Change in Control; (ii) The corporation that is liable for the payment of the amounts described herein (or all corporations liable for the payment if more than one corporation is liable) but only if either the deferred compensation is attributable to the performance of service by the Executive for such corporation(s) or there is a bona fide business purpose for such corporation(s) to be liable for such payment and, in either case, no significant purpose of making such corporation(s) liable for such payment is the avoidance of Federal income tax; or (iii) a corporation that is a majority shareholder of a corporation identified in (i) or (ii) above, or any corporation in a chain of corporations in which each corporation is a majority shareholder of another corporation in the chain, ending in a corporation identified in (i) or (ii) above.

2.7    The Code.The "Code" shall mean the Internal Revenue Code of 1986, as amended (the “Code").

2.8    Committee. “Committee” means the Compensation Committee of the Board of Directors of Columbia State Bank.

2.9    Disability/Disabled.For the purposes of this Agreement, Executive will be considered Disabled if:

A. The Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or

B. The Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Employee’s employer.

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2.10    Early Commencement Reduction Factor. The term “Early Commencement Reduction Factor” is the amount by which Executive’s benefit shall be reduced based on the benefit being paid prior to Executive’s attaining the Normal Retirement Age. The amount of the Early Commencement Reduction Factor shall be determined as follows: for each year (or partial year) that an Executive’s benefit hereunder is paid prior to his attainment of the Normal Retirement Age, then the benefit amount shall be reduced by a factor of Five Percent (5%). Thus, if an executive with a Normal Retirement Age of Sixty-Two (62) begins receiving payments at age Fifty-Nine (59), the amount of the annual benefit shall be reduced by 15% (62- 59 = 3; 3 x 5%= 15%).

2.11    Early Retirement Age.The “Early Retirement Age” shall be age fifty-five (55).

2.12    ERISA.The term "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended.

2.13    Effective Date. The term “Effective Date” shall mean the date first written above.

2.14    Employer. The term “Employer” shall mean Columbia State Bank, any subsidiaries or affiliates thereof, or any successors thereto.

2.15    Executive Benefit. For the purposes of this Agreement, then term “Executive Benefit” shall refer to the annual amount to which Executive is entitled to receive pursuant to this Agreement. In addition, as the Executive Benefit is defined in terms of a lifetime annuity, Executive shall have the rights under 409A to elect an alternate annuity payment method, as specified herein. Amounts actually received by the Executive, however, shall be determined pursuant to Paragraphs 1 through 5 (including sub-paragraphs, as applicable), forfeited, reduced or adjusted to the extent: (a) required under the other provisions of this Agreement; (b) required by reason of the lawful order of any regulatory agency or body having jurisdiction over the Employer; or (c) required in order for the Employer to comply with any and all applicable state and federal laws, including, but not limited to, income, employment and disability income tax laws (e.g., FICA, FUTA, SDI).

2.16    Involuntary Termination/ Involuntary Separation From Service. In accordance with IRC 409A, the terms “Involuntary Termination” or “Involuntary Separation from Service” shall mean a Separation from Service due to the independent exercise of the unilateral authority of the Bank to terminate the Executive’s services, other than due to the Executive’s implicit or explicit request, where the Executive was willing and able to continue performing services (and not as the result of a Disability of a Termination For Cause).

2.17IRC 409A. The term “IRC 409A” shall refer to the final regulations issued by the IRS and the Treasury Department under Section 409A of the Code.

2.18    Normal Retirement / Normal Retirement Age.The term "Normal Retirement" shall mean the Executive’s Separation From Service on or after attaining the Normal Retirement Age of Sixty-Five (65) and for reasons other than a Termination for Cause, because of a Disability, or pursuant to the provisions of paragraph 5.4.

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2.19    Participant. For the purpose of this Agreement, the terms “Executive” and “Participant” shall be interchangeable.

2.20    Remain Employed. For the purpose of this Agreement, the term “Remain(s) Employed” shall mean that Executive has not experienced a Separation From Service.

2.21    Separation From Service/ Termination of Employment. The terms Separation From Service (Separates From Service) and Termination of Employment shall be used interchangeably for the purposes of this Agreement and shall be interpreted in accordance with the provisions of IRC 409A. Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the Bank and the Executive reasonably anticipate that no further services will be performed after a certain date or that the level of bona fide services the employee will perform after such date (whether as an employee or as an independent contractor) will permanently decrease to no more than twenty (20%) percent of the average level of bona fide services performed (as an employee or an independent contractor) over the immediately preceding thirty-six (36) month period (or the full period of services to the employer if the employee has been providing services to the employer less than 36 months). There shall be no Separation From Service while the Executive is on military leave, sick leave or other bona fide leave of absence, as long as such leave does not exceed six (6) months, or if longer, so long as the individual retains a right to re-employment with the service recipient under an applicable statute or by contract.

2.22    Specified Employee. The term “Specified Employee” means an employee who, as of the date of the employee’s Separation from Service, is a key employee of an employer of which any stock is publicly traded on an established securities market or otherwise. An employee is a key employee if the employee meets the requirements of section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations thereunder and disregarding section 416(i)(5)) at any time during the twelve (12) month period ending on a specified employee identification date. If Executive is a key employee as of a specified employee identification date, then Executive shall be treated as a key employee for the entire twelve (12) month period beginning on the specified employee effective date.

2.23    Target Benefit Amount.For the purposes of this Agreement, the “Target Benefit Amount” shall be an amount equal to the lesser of the following: sixty percent (60%) of the average of Executive’s three highest years of Base Salary or One Hundred Seventy-Five Thousand, Two Hundred Forty-Four Dollars ($175,244).

2.24    Termination For Cause. For the purpose of this Plan, a Termination For Cause shall be defined as a Termination because of any of the following:

A. Willful misfeasance or gross negligence;

B. Conduct demonstrably and significantly harmful to Employer or a financial institution subsidiary; or

C. Conviction of a felony.

2.25    Termination For Good Reason.Atermination shall be deemed to be for Good Reason if after a Change of Control, Executive Separates From Service on or after the occurrence of any of the below events, and such events occur without the Executive’s consent:

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A. A material diminution in the Executive’s base compensation;

B. A material diminution in the Executive’s authority, duties, or responsibilities;

C. A material diminution in the authority, duties, or responsibilities of the supervisor to whom the Executive is required to report, including a requirement that an Executive report to a corporate officer or employee instead of reporting directly to the board of directors of a corporation (or similar governing body with respect to an entity other than a corporation);

D. A material diminution in the budget over which the Executive retains authority;

E. A material change in the geographic location at which the Executive must perform the services;

F. Any other action or inaction that constitutes a material breach by the Employer of the agreement under which the Executive provides services.

2.26    Voluntary Termination. The term “Voluntary Termination” shall mean a Separation From Service elected by the Executive and not as a result of a Disability or For Good Reason.

2.27Years of Service. The term “Years of Service” shall mean the twelve (12) consecutive month period beginning on December 5, 2005 and any twelve (12) month anniversary thereof, during the entirety of which time the Participant is an employee of the Company and has not experienced a Separation From Service. Service with a subsidiary or other entity controlled by the Company before the time such entity became a subsidiary or under such control shall not be considered credited “Service” unless the Plan Administrator specifically agrees to credit such service.

ARTICLE III

SCOPE, PURPOSE AND EFFECT

3.1    Not a Contract of Employment. Although this Agreement is intended to provide the Executive with an additional incentive to remain in the employ of the Employer, this Agreement shall not be deemed to constitute a contract of employment between the Executive and the Employer nor shall any provision of this Agreement restrict or expand the right of the Employer to terminate the Executive's employment. This Agreement shall have no impact or effect upon any separate written Employment Agreement which the Executive may have with the Employer, it being the parties' intention and agreement that unless this Agreement is specifically referenced in said Employment Agreement (or any modification thereto), this Agreement (and the Employer's obligations hereunder) shall stand separate and apart and shall have no effect on or be affected by, the terms and provisions of said Employment Agreement.

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3.2    Fringe Benefit.The benefits provided by this Agreement are granted by the Bank as a fringe benefit to the Executive and are not a part of any salary reduction plan or any arrangement deferring a bonus or a salary increase. The Executive has no option to take any current payments or bonus in lieu of the benefits provided by this Agreement.

3.3    Prohibited Payments.Notwithstanding anything in this Agreement to the contrary, if any payment made under this Agreement is a “golden parachute payment” as defined in Section 28(k) of the Federal Deposit Insurance Act (12 U.S.C. section 1828(k) and Part 359 of the Rules and Regulations of the Federal Deposit Insurance Corporation (collectively, the “FDIC Rules”) or is otherwise prohibited, restricted or subject to the prior approval of a Bank Regulator, no payment shall be made hereunder without complying with said FDIC Rules.

ARTICLE IV

PAYMENT RESTRICTIONS AND LIMITATIONS

4.1Delay in Payments for Specified Employee in the Event of a Separation From Service and Compliance With IRC 409A. In the case of any Employee who is a Specified Employee as of the date of a Separation from Service, then a payment conditioned upon a Separation from Service may not be made before the date that is six (6) months after the date of Separation from Service (or, if earlier than the end of the six-month period, the date of death of the Specified Employee).

In the event payments to which the Executive would otherwise be entitled during the first six (6) months are subject to this six (6) month delay in payment, then such payments shall be accumulated and paid on the first day of the seventh month following the date of Separation from Service. Payments will then continue thereafter as called for pursuant to the terms of this Agreement.

Notwithstanding any provision existing in this Agreement or any amendment thereto, it is the intent of the Bank and the Executive that any payment or benefit provided pursuant to this Agreement shall be made and paid in a manner, at a time and in a form which complies with the applicable requirements of IRC Section 409A, in order to avoid any unfavorable tax consequences resulting from any such failure to comply.

4.2     Modifying Form of Benefit Payment. Pursuant to the terms of the Agreement, and consistent Code Section 409A, when permitted herein, instead of having the Executive Benefit paid as a single life annuity, Executive may elect to have the benefit paid as follows: (i) A joint and survivor annuity with an actuarial equivalent of the benefit owing pursuant to the Agreement, with payment continued to the surviving spouse in the same amount as the amount paid to Executive, or (ii) A joint and survivor annuity in equal value to the actuarial equivalent of the benefit owing pursuant to the Agreement, with payment continued to the surviving spouse in one-half of the amount paid to Executive. (For the purpose of this Agreement, the term “spouse” shall include a registered domestic partner).

4.3    Withholding of Payroll Taxes. The Employer shall withhold from payments made hereunder any taxes required to be withheld from a Participant’s wage under federal, state or local law.

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ARTICLE V

PAYMENT OF EXECUTIVE BENEFITS

Executive Benefit payments due hereunder shall be payable under this Agreement pursuant to only (1) provision herein below. The date and circumstances of Executive’s Separation From Service shall determine which paragraph shall be used to calculate the Executive Benefit payment due.

In addition, as all benefit amounts due under both this Agreement and the Supplemental Compensation Agreements dated June 1, 2004, May 24, 2006 and February 28, 2007 (hereafter referred to as “SCA” or “SCAs”) will be determinable as of Executive’s Separation From Service date, the following benefit determination/reduction formula shall be used to determine amounts due hereunder:

In the event any benefit payments due under this Agreement are scheduled to be made simultaneously with payment amounts due Executive pursuant to the SCA(s), then any amount due hereunder shall be reduced by amounts to be paid out pursuant to such SCA(s). (For the purposes of this provision, “simultaneous(ly)” shall mean payments due in the same month). Additionally, in the event that payments hereunder are to be made in one (1) lump sum, then any amount paid out hereunder shall be reduced by any amounts already paid out under the terms of the SCA(s), as well as by an amount equal to all amounts still outstanding and due under the terms of the SCA(s). Subject to the forgoing, the Executive Benefits due hereunder shall be as follows:

5.1       Executive Benefit Payments in the Event of Normal Retirement. Subject to the non-compete provisions of Paragraph 5.8 below, the Executive Benefit under this provision shall be determined as follows:

A. Amount of Benefit. In the event Executive Separates From Service on a date which constitutes Normal Retirement as defined herein, then the Executive shall receive an amount calculated as follows: the Applicable Percentage (as of the Separation From Service date) of the Target Benefit Amount. In addition to the forgoing, the annual Executive Benefit amount shall be increased at the rate of two percent (2%) each year, beginning on the first anniversary of the first Executive Benefit payment and annually thereafter for so long as Executive is entitled to receive an Executive Benefit.

B. Payment Method. This Annual Executive Benefit shall be paid in twelve (12) substantially equal monthly installments, with payments commencing on the first day of the first month following Executive’s Separation From Service and continuing until the death of the Executive.  

As this Executive Benefit is a lifetime annuity, then in the alternative, and in compliance with Code Section 409A, Executive may elect one (1) of two (2) alternative annuity payout methods as presented in Exhibit A, the Distribution Election Form. These optional methods consist of joint and survivor annuities with an Actuarial Equivalent value equal to the single life Executive Benefit, with payments continued to the survivor in varying

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amounts. Exhibit B, attached hereto, provides a hypothetical example of how the benefit payments might differ between a single life annuity and a joint life annuity. The benefit payment commencement date and schedule shall otherwise remain unchanged. Any election to use an alternate annuity payment method must be made prior to the payment start date and, other than as addressed herein below, Executive shall not have the ability to modify the form of annuity elected once payments have begun. In the event , however, that a joint and survivor annuity option is elected and the Executive’s spouse pre-deceases Executive, then for all payments made to Executive after the Executive’s spouse’s death, the amounts payable under this Agreement shall increase and be equal to the payment amounts Executive would have received under a single life annuity option. Executive shall not be able then to designate a new spouse and reinstate joint life annuity payments.

5.2      Executive Benefit Payments on or After Attaining the Early Retirement Age but Before Attaining the Normal Retirement Age.

Subject to the non-compete provisions of Paragraph 5.8 below, in the event Executive Separates From Service on or after attaining the Early Retirement Age, but before attaining the Normal Retirement Age, then the Executive Benefit to which Executive is entitled shall be determined as follows:

A. Amount of Benefit.

(1) In the event Executive has completed Ten (10) Years of Service, then upon a Voluntary Separation From Service on or after attaining the Early Retirement Age (but before attaining the Normal Retirement Age), Executive shall be entitled to receive an amount calculated as follows: the Applicable Percentage (as of the Separation From Service date) of the Target Benefit Amount; however this amount shall be reduced by the Early Commencement Reduction Factor. In addition to the forgoing, the annual Executive Benefit amount shall be increased at the rate of two percent (2%) each year, beginning on the first anniversary of the first Executive Benefit payment and annually thereafter for so long as Executive is entitled to receive an Executive Benefit

(2) In the event Executive has not completed Ten (10) Years of Service, then upon a Voluntary Separation From Service on or after attaining the Early Retirement Age (but before attaining the Normal Retirement Age), Executive shall forfeit all rights and benefits he may have had under the terms of this Agreement

(3) In the event Executive is Involuntarily Terminated on or after attaining the Early Retirement Age (but before attaining the Normal Retirement Age), then Executive shall be entitled to receive an amount calculated as follows: the Applicable Percentage (as of the Separation From Service date) of the Target Benefit Amount; however this amount shall be reduced by the Early Commencement Reduction Factor. In addition to the forgoing, the annual Executive Benefit amount shall be

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increased at the rate of two percent (2%) each year, beginning on the first anniversary of the first Executive Benefit payment and annually thereafter for so long as Executive is entitled to receive an Executive Benefit.

B.    Payment Method. Any Executive Benefit due hereunder shall be paid in twelve (12) substantially equal monthly installments, with payments commencing on the first day of the first month following Executive’s Separation From Service and continuing until the death of the Executive.  

As this Executive Benefit is a lifetime annuity, then in the alternative, and in compliance with Code Section 409A, Executive may elect one (1) of two (2) alternative annuity payout methods as presented in Exhibit A, the Distribution Election Form. These optional methods consist of joint and survivor annuities with an Actuarial Equivalent value equal to the single life Executive Benefit, with payments continued to the survivor in varying amounts. Exhibit B, attached hereto, provides a hypothetical example of how the benefit payments might differ between a single life annuity and a joint life annuity. The benefit payment commencement date and schedule shall otherwise remain unchanged. Any election to use an alternate annuity payment method must be made prior to the payment start date and, other than as addressed herein below, Executive shall not have the ability to modify the form of annuity elected once payments have begun. In the event , however, that a joint and survivor annuity option is elected and the Executive’s spouse pre-deceases Executive, then for all payments made to Executive after the Executive’s spouse’s death, the amounts payable under this Agreement shall increase and be equal to the payment amounts Executive would have received under a single life annuity option. Executive shall not be able then to designate a new spouse and reinstate joint life annuity payments.

     5.3       Executive Benefit Payments in the Event of Involuntary or Voluntary Termination Prior to Attaining the Early Retirement Age.

Subject to the non-compete provisions of Paragraph 5.8 below, in the event Executive Separates From Service prior to attaining the Early Retirement Age, then the Executive Benefit to which Executive is entitled shall be determined as follows:

A. Benefit Amount.

(1) In the event the Executive is Involuntarily Terminated prior to attaining the Early Retirement Age, then Executive shall be entitled to receive an Executive Benefit in an amount equal to the following: the Actuarial Equivalent of the Applicable Percentage (as of the Separation From Service date) of the Target Benefit Amount.

(2) In the event the Executive Voluntarily Terminates employment with the Bank prior to attaining the Early Retirement Age, then the Executive Benefit shall be determined as follows: (i) In the event Executive has attained an AP of 100%, then he shall be entitled to receive an Executive Benefit in an amount equal to the Actuarial Equivalent of the Applicable Percentage of the of the Target Benefit Amount; (ii) In

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the event Executive has not attained an Applicable Percentage of 100%, he shall forfeit any and all rights and benefits he may have under the terms of this Agreement and shall have no right to be paid any of the amounts which would otherwise be due or paid to the Executive by the Bank pursuant to the terms of this Agreement.

B.   Payment Method. This Executive Benefit shall be paid in one (1) lump sum one (1) year following Separation From Service.

5.4Termination Following a Change in Control. Benefits hereunder shall be determined as follows:

A. Benefit Amount.

(1) Involuntary Termination or Termination for Good Reason. In the event Executive is Involuntarily Terminated or Terminates for Good Reason following a Change in Control, then the Applicable Percentage shall be deemed to be that percentage Executive would have received had he Remained Employed until attaining the Normal Retirement Age of Sixty-Five (65). Executive shall then be entitled to receive an annual amount calculated as follows: the Applicable Percentage of the Target Benefit Amount. Executive shall NOT be subject to the non-compete provisions of Paragraph 5.8 below.

(2) Voluntary Termination. In the event Executive Voluntarily Separates From Service following a Change in Control, then Executive shall be entitled to receive one of the following amounts, depending on the circumstances specified below:

a.If Executive has attained the Early Retirement Age and has completed ten (10) Years of Service, if he has attained an Applicable Percentage of One Hundred Percent (100%), or if he has attained the Normal Retirement Age at the time of such Separation From Service, then he shall receive an amount calculated as follows: the Applicable Percentage of the Target Benefit Amount. Executive shall be subject to the non-compete provisions of Paragraph 5.8 below.

b.     In the event Executive does not qualify for Normal Retirement and does not satisfy the requirements of Paragraph 5.4A(2)a above, then in the event Executive Voluntarily Separates From Service following a Change in Control, he shall forfeit all rights and benefits he may have had under the terms of this Agreement.

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B.Benefit Payments. If Executive is entitled to receive a benefit pursuant to the terms of this Paragraph 5.4, then the benefit shall be payable as follows:

(1) In the event Executive has qualified for Early or Normal Retirement, then Executive Benefit payments shall commence on the first day of the first month following the Executive’s Separation From Service and shall be paid in twelve (12) substantially equal monthly installments, with payments commencing on the first day of the first month following Executive’s Separation From Service and continuing until the death of Executive. In addition to the forgoing, the annual Executive Benefit amount shall be increased at the rate of two percent (2%) each year, beginning on the first anniversary of the first Executive Benefit payment and annually thereafter for so long as Executive is entitled to receive an Executive Benefit.

As this Executive Benefit is a lifetime annuity, then in the alternative, and in compliance with Code Section 409A, Executive may elect one (1) of two (2) alternative annuity payout methods as presented in Exhibit A, the Distribution Election Form. These optional methods consist of joint and survivor annuities with an Actuarial Equivalent value equal to the single life Executive Benefit, with payments continued to the survivor in varying amounts. Exhibit B, attached hereto, provides a hypothetical example of how the benefit payments might differ between a single life annuity and a joint life annuity. The benefit payment commencement date and schedule shall otherwise remain unchanged. Any election to use an alternate annuity payment method must be made prior to the payment start date and, other than as addressed herein below, Executive shall not have the ability to modify the form of annuity elected once payments have begun. In the event , however, that a joint and survivor annuity option is elected and the Executive’s spouse pre-deceases Executive, then for all payments made to Executive after the Executive’s spouse’s death, the amounts payable under this Agreement shall increase and be equal to the payment amounts Executive would have received under a single life annuity option. Executive shall not be able then to designate a new spouse and reinstate joint life annuity payments.

(2) In the event Executive has not yet qualified for Early or Normal Retirement, then the Actuarial Equivalent of the Executive Benefit shall be paid in one (1) lump sum one (1) year following Separation From Service.

5.5       Disability.  In the event that Executive becomes Disabled prior to Separating From Service, then upon such Disability, the Applicable Percentage shall be deemed to be One Hundred Percent (100%) and the Participant shall be entitled to be paid a lump sum amount equal to the Actuarial Equivalent value of the following: the Applicable Percentage of the Target Benefit Amount. This lump sum payment shall be made in the first (1^st) day of the first (1^st) month following Disability.

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5.6        Termination For Cause.  In the event Executive is Terminated For Cause at any time after the effective date of this Agreement, then he shall forfeit any and all rights and benefits he may have under the terms of this Agreement and shall have no right to be paid any of the amounts which would otherwise be due or paid to the Executive by the Bank pursuant to the terms of this Agreement.

5.7       Death.

A. Benefit Amount.

(1) Death Prior to Separation From Service.In the event Executive dies prior to Separating From Service, then there is no death benefits payable under this Agreement. Any such benefits would be payable pursuant to a Split Dollar Life Insurance Agreement, if any exists.

(2) Death After Separation From Service and After Becoming Entitled to Receive Payment, but Prior to Receiving Any or All Such Payments. In the event Executive dies after Separating From Service and after becoming entitled to the benefits specified under this Agreement, then payments shall only be made following Executive’s death if Executive has elected a joint and survivor payment option.

5.8Forfeiture in the Event of Breach of Non-Competition Agreement.Notwithstanding any other provision of this Agreement, the Executive Benefit due pursuant to the provisions of Paragraphs, 5.1, 5.2, 5.3 5.4A(2) and 5.5 shall be forfeited and no Executive Benefit shall be due the Executive hereunder if the Executive enters into competitive activity in the Employer's market area within the three (3) year period beginning on the date of the Executive's termination of Employment. To the extent Executive is paid an Executive Benefit under this Agreement and breaches this provision, Employer shall not only be excused from paying any future benefit, but Employer shall have the right to seek reimbursement for all amounts previously paid out under this Agreement. For the purposes of this Agreement, “competitive activity” means acting directly or indirectly as an employee, agent, stockholder (other than passive holdings of less than one percent (1%) of the outstanding shares of a publicly-traded company), member, director, co-partner or in any other individual or representative capacity on behalf of any bank or financial institution (including without limitation trust company, finance company, leasing company or any entity that provides credit). The Employer's market area is defined as the following counties in the State of Washington and all counties bordering on any such county and any county in which the Employer maintains a branch or other office, now or at the time of the Executive's termination of Employment: Cowlitz, King, Kitsap, Pierce and Thurston.

ARTICLE VI

ADMINISTRATION

6.1    Committee and Duties. This Plan shall be administered by an Administrative Committee which shall consist of not less than three persons appointed by the Board of Directors. Any member of the Committee may be removed at any time by the Board. Any member may resign by delivering his written

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resignation to the Board. Upon the existence of any vacancy, the Board may appoint a successor. The Committee shall have the authority to make, amend, interpret, and enforce all appropriate rules and regulations for the administration of this Plan and decide or resolve any and all questions including interpretations of this Plan, as may arise in connection with the Plan. A majority of the members of the Committee shall constitute a quorum for the transaction of business. A majority vote of the Committee members constituting a quorum shall control any decision.

6.2    Agents. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with counsel who may be counsel to the Employer.

6.3    Binding Effect of Decisions. The decision or action of the Committee in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

6.4    Indemnity of Committee. The Employer shall indemnify and hold harmless the members of the Committee against any and all claims, loss, damage, expense, or liability arising from any action or failure to act with respect to this Plan, except in the case of gross negligence or willful misconduct.

ARTICLE VII

CLAIMS PROCEDURE

7.1    Claim.    In the event a dispute arises over the benefits under this executive plan and benefits are not paid to the Executive (or to the Executive’s beneficiary[ies], if applicable) and such claimants feel they are entitled to receive such benefits, then a written claim must be made to the Named Fiduciary and Plan Administrator named above in accordance with the following procedures:

A. Written Claim. The claimant may file a written request for such benefit to the Plan Administrator.

B. Claim Decision. Upon receipt of such claim, the Plan Administrator shall respond to such claimant within ninety (90) days after receiving the claim. If the Plan Administrator determines that special circumstances require additional time for processing the claim, the Plan Administrator can extend the response period by an additional ninety (90) days for reasonable cause by notifying the claimant in writing, prior to the end of the initial ninety (90) day period, that an additional period is required. The notice of extension must set forth the special circumstances and the date by which the Plan Administrator expects to render its decision.

If the claim is denied in whole or in part, the Plan Administrator shall notify the claimant in writing of such denial. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

(i) The specific reasons for the denial;

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(ii) The specific reference to pertinent provisions of the Agreement on which the denial is based;

(iii) A description of any additional information or material necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary;

(iv) Appropriate information as to the steps to be taken if the claimant wishes to submit the claim for review and the time limits applicable to such procedures; and

(v) A statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review.

C. Request for Review. Within sixty (60) days after receiving notice from the Plan Administrator that a claim has been denied (in part or all of the claim), then claimant (or their duly authorized representative) may file with the Plan Administrator, a written request for a review of the denial of the claim.

The claimant (or his duly authorized representative) shall then have the opportunity to submit written comments, documents, records and other information relating to the claim. The Plan Administrator shall also provide the claimant, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits.

D. Decision on Review. The Plan Administrator shall respond in writing to such claimant within sixty (60) days after receiving the request for review. If the Plan Administrator determines that special circumstances require an extension of time for processing the claim, written notice of the extension shall be furnished to the claimant prior to the termination of the initial sixty (60) day period. In no event shall such extension exceed a period of sixty (60) days from the end of the initial period. The notice of extension must set forth the special circumstances requiring an extension of time and the date by which the Plan Administrator expects to render its decision.

In considering the review, the Plan Administrator shall take into account all materials and information the claimant submits relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

The Plan Administrator shall notify the claimant in writing of its decision on review. The Plan Administrator shall write the notification in a manner calculated to be understood by the claimant. The notification shall set forth:

(i)    The specific reasons for the denial;

(ii) A reference to the specific provisions of the Agreement on which the denial is based;

(iii) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claimant’s claim for benefits; and

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(iv) A statement of the claimant’s right to bring a civil action under ERISA Section 502(a).

E. Special Timing Rules for Disability Claims. In the event a claim above is a claim for disability benefits, then the applicable time periods for notifying claimants regarding benefits determinations shall be reduced as required by 29 CFR 2560.503-1 (I.e., (a) the ninety (90) day response time with the possibility of a ninety (90) day extension in Section 8.2B shall be shortened to a forty-five (45) day response time with the possibility of a thirty (30) day extension, and (b) the sixty (60) day response time with the possibility of a sixty (60) day extension in shall be shortened to a forty-five (45) day response time with the possibility of a forty-five (45) day extension). In addition, in the event of a disability claim, the Bank shall identify any medical or vocational expert whose advice was obtained by the Plan in connection with the initial benefit determination, without regard to whether the advice was relied upon.  If the review is from an adverse benefit determination that was based in whole or in part on a medical judgment, the Bank shall consult with a health care professional that has appropriate training and experience in the field of medicine involved in the medical judgment and who is neither the individual who was consulted in connection with the adverse benefit determination that is under review nor the subordinate of such individual.  Any review of the denial of a claim made on account of disability shall be conducted by a person or persons who neither had any part in the initial benefit determination nor are subordinates of the persons who did.

7.2    Arbitration of Disputes. All unresolved claims, disputes and other matters in question arising out of or relating to this Plan or the breach or interpretation thereof, other than those matters which are to be determined by the Employer in its sole and absolute discretion, shall be resolved by binding arbitration before a representative member, selected by the mutual agreement of the parties, of JAMS in Tacoma, Washington. In the event JAMS is unable or unwilling to conduct the arbitration provided for under the terms of this Paragraph, or has discontinued its business, the parties agree that a representative member, selected by the mutual agreement of the parties, of the American Arbitration Association (“AAA”), located in Tacoma, Washington, shall conduct the binding arbitration referred to in this Paragraph. Notice of the demand for arbitration shall be filed in writing with the other party to this Plan and with ASP (or AAA, if necessary). In no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statute of limitations. The arbitration shall be subject to such rules of procedure used or established by JAMS, or if there are none, the rules of procedure used or established by AAA. Any award rendered by JAMS or AAA shall be final and binding upon the successors and assigns, and may be entered in any court having jurisdiction thereof. The obligation of the parties to arbitrate pursuant to this clause shall be specifically enforceable in accordance with, and shall be conducted consistently with the provisions of the Washington Rules of Civil Procedure. Any arbitration hereunder shall be conducted in Tacoma, Washington, unless otherwise agreed to by the parties.

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7.3    Attorneys' Fees. In the event of any arbitration or litigation concerning any controversy, claim or dispute between the parties hereto, arising out of or relating to this Agreement or the breach hereof, or the interpretation hereof, (a) each party shall pay his own attorneys’ arbitration fees incurred (pursuant to the terms of this Agreement); (b) the prevailing party shall be entitled to recover from the other party reasonable expenses, attorneys' fees and costs incurred in the enforcement or collection of any judgment or award rendered. The "prevailing party" means any party (one party or both parties, as the case may be) determined by the arbitrator(s) or court to be entitled to money payments from the other, not necessarily the party in whose favor a judgment is rendered.

ARTICLE VIII

MISCELLANEOUS

8.1    Unfunded Plan. This Plan is intended to be an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of “management or highly compensated employees” within the meaning of Sections 201, 301, and 401 of the Employee Retirement Income Security act of 1974, as amended (“ERISA”), and therefore to be exempt from the provisions of Parts 2, 3, and 4 of Title I ERISA. Accordingly, the Plan shall terminate and no further benefits shall be paid hereunder in the event it is determined by a court of competent jurisdiction or by an opinion of counsel that the Plan constitutes an employee pension benefit plan within the meaning of Section 3(2) of ERISA which is not so exempt.

8.2Status as an Unsecured General Creditor and Rabbi Trust.Notwithstanding anything contained herein to the contrary: (i) the Executive shall have no legal or equitable rights, interests or claims in or to any specific property or assets of the Employer as a result of this Agreement; (ii) none of the Bank’s assets shall be held in or under any trust for the benefit of the Executive or held in any way as security for the fulfillment of the obligations of the Bank under this Agreement; (iii) all of the Bank’s assets shall be and remain the general unpledged and unrestricted assets of the Bank; (iv) the Bank’s obligation under this Agreement shall be that of an unfunded and unsecured promise by the Bank to pay money in the future; and (v) the Executive shall be an unsecured general creditor with respect to any benefits which may be payable under the terms of this Agreement.

Notwithstanding subparagraphs (i) through (v) above, the Bank and the Executive acknowledge and agree that, in the event of a Change in Control, upon request of the Executive, or in the Bank’s discretion if the Executive does not so request and the Bank nonetheless deems it appropriate, the Bank shall establish, not later than the effective date of the Change in Control, a Rabbi Trust or multiple Rabbi Trusts (the "Trust" or "Trusts") upon such terms and conditions as the Bank, in its sole discretion, deems appropriate and in compliance with applicable provisions of the Code, in order to permit the Bank to make contributions and/or transfer assets to the Trust or Trusts to discharge its obligations pursuant to this Agreement. The principal of the Trust or Trusts and any earnings thereon shall be held separate and apart from other funds of the Bank to be used exclusively for discharge of the Bank’s obligations pursuant to this Agreement and shall continue to be subject to the claims of the Bank’s general creditors until paid to the Executive in such manner and at such times as specified in this Agreement.

8.3    Non-assignability. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be unassignable and nontransferable. No part of the amount payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony

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or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.

8.4    Not a Contract of Employment. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between the Employer and the Participant, and the Participant (or his beneficiary, if applicable) shall have no rights against the Employer except as may otherwise be specifically provided herein. Moreover, nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of the Employer or to interfere with the right of the Employer to discipline or discharge him at any time.

8.5    Protective Provisions. A Participant will cooperate with the Employer by furnishing any and all information requested by the Employer, in order to facilitate the payment of benefit hereunder, and by taking such physical examinations as the Employer may deem necessary and taking such other action as may be requested by the Employer.

8.6    Terms. Whenever any words are used herein in the masculine, they shall be construed as though they were used in the feminine in all cases where they would so apply; and wherever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or singular, as the case may be, in all cases where they would so apply.

8.7    Captions. The captions of the articles, sections, and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

8.8    Governing Law. The provisions of this Plan shall be construed, interpreted, and governed in all respects in accordance with applicable federal law and, to the extent not preempted by such federal law, in accordance with the laws of the State of Washington.

8.9    Validity. If any provision of this Plan shall be held illegal or invalid for any reason, the remaining provisions shall nevertheless continue in full force and effect without being impaired or invalidated in any way.

8.10    Binding Effect/Merger or Reorganization. This Agreement shall be binding upon and inure to the benefit of the Executive and the Bank. Accordingly, the Bank shall not merge or consolidate into or with another corporation, or reorganize or sell substantially all of its assets to another corporation, firm or person, unless and until such succeeding or continuing corporation, firm or person agrees to assume and discharge the obligations of the Bank under this Agreement. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Employer, and successors of any such corporation or other business entity.

8.11    Nonwaiver. The failure of either party to enforce at any time or for any period of time any one or more of the terms or conditions of this Agreement shall not be a waiver of such term(s) or condition(s) or of that party's right thereafter to enforce each and every term and condition of this Agreement.

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8.12    Partial Invalidity. If any terms, provision, covenant, or condition of this Agreement is determined by an arbitrator or a court, as the case may be, to be invalid, void, or unenforceable, such determination shall not render any other term, provision, covenant or condition invalid, void or unenforceable, and the Agreement shall remain in full force and effect notwithstanding such partial invalidity.

8.13    Entire Agreement. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties with respect to the subject matter of this Agreement and contains all of the covenants and agreements between the parties with respect thereto. Each party to this Agreement acknowledges that no other representations, inducements, promises, or agreements, oral or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not set forth herein, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding on either party.

8.14    Modifications. Any modification of this Agreement shall be effective only if it is in writing and signed by each party or such party's authorized representative, and only to the extent that it is compliant with all applicable codes and statutes, including but not limited to IRS Code Section 409A.

8.15    Notice. Any notice required or permitted of either the Executive or the Bank under this Agreement shall be deemed to have been duly given, if by personal delivery, upon the date received by the party or its authorized representative; if by facsimile, upon transmission to a telephone number previously provided by the party to whom the facsimile is transmitted as reflected in the records of the party transmitting the facsimile and upon reasonable confirmation of such transmission; and if by mail, on the third day after mailing via U.S. first class mail, registered or certified, postage prepaid and return receipt requested, and addressed to the party at the address given below for the receipt of notices, or such changed address as may be requested in writing by a party.

If to the Bank:                        If to the Executive:

8.16    IRS Section 280G Issues. If all or any portion of the amounts payable to the Participant under this Plan, either alone or together with other payments which the Participant has the right to receive from the Employer, constitute "excess parachute payments" within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), that are subject to the excise tax imposed by Section 4999 of the Code (or similar tax and/or assessment), Participant shall be responsible for the payment of such excise tax and Employer (and its successor) shall be responsible for any loss of deductibility related thereto; provided, however, that Employer and Participant shall cooperate with each other and use all reasonable efforts to minimize to the fullest extent possible the amount of excise tax imposed by Section 4999 of the Code, but only to the extent that any agreement to minimize the impact of the Section 4999 excise tax shall comply in all respects with all applicable laws, including IRC Section 409A and regulations thereunder. If, at a later date, it is determined (pursuant to final regulations or published rulings of the Internal Revenue Service, final judgment of a court of competent jurisdiction, or otherwise) that the amount of excise taxes payable by the Participant is greater than the amount initially so determined, then the Participant shall pay an amount equal to the sum of such additional excise taxes and any interest, fines and penalties resulting from such underpayment. The determination of the amount of any such excise taxes shall be made by the independent accounting firm employed by the Employer immediately prior to the change in control or such other independent accounting firm or advisor as may be mutually agreeable to Employer and Participant in the exercise of their reasonable good faith judgment.

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8.17    Opportunity To Consult With Independent Advisors. The Executive acknowledges that he has been afforded the opportunity to consult with independent advisors of his choosing including, without limitation, accountants or tax advisors and counsel regarding both the benefits granted to him under the terms of this Agreement and the (i) terms and conditions which may affect the Executive's right to these benefits and (ii) personal tax effects of such benefits including, without limitation, the effects of any federal or state taxes, Section 280G of the Code, and any other taxes, costs, expenses or liabilities whatsoever related to such benefits, which in any of the foregoing instances the Executive acknowledges and agrees shall be the sole responsibility of the Executive notwithstanding any other term or provision of this Agreement. The Executive further acknowledges and agrees that the Bank shall have no liability whatsoever related to any such personal tax effects or other personal costs, expenses, or liabilities applicable to the Executive and further specifically waives any right for himself or herself, and his or her heirs, beneficiaries, legal representatives, agents, successor and assign to claim or assert liability on the part of the Bank related to the matters described above in this paragraph. The Executive further acknowledges that he has read, understands and consents to all of the terms and conditions of this Agreement, and that he enters into this Agreement with a full understanding of its terms and conditions.

/s/ ANDREW MCDONALD August 20, 2013	Andrew McDonald
Executive- Signature and Date	Print Name
COLUMBIA STATE BANK
By:  /s/ MELANIE J. DRESSEL	Date: August 22, 2013
Authorized Executive
Title: CEO

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EXHIBIT A

DISTRIBUTION ELECTION FORM FOR THE

COLUMBIA STATE BANK

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

Pursuant to the terms of the Supplemental Executive Compensation Agreement, by and between me,______________, and Columbia State Bank (hereinafter “Bank”), effective as of ______, 2013 (“Agreement”), I have been granted a supplemental compensation benefit.

Pursuant to Internal Revenue Code Section 409A, there are multiple restrictions and limitations regarding modifying the time and/or form of such payments; however an exception to these restrictions permits elections to change from a life annuity to another actuarially equivalent life annuity (prior to payments beginning).

In the event no alternate method is selected above, then amounts due under this Agreement shall be paid out as a single life annuity based on the life of the Participant. Subject to the forgoing, and provided that payments have not yet begun, Executive may elect to have the Executive Benefit paid as follows:

Election of Actuarial Equivalent of Form of Benefit For Married Participant or Participant with Domestic Partner. Pursuant to the terms of the Agreement, and consistent Code Section 409A, instead of having my benefit paid as a single life annuity, with payments continuing until my death, I elect to have my benefit paid to me as designated below:

_________ A joint and survivor annuity with an actuarial equivalent of the benefit owing pursuant to the Agreement, with payment continued to the surviving spouse in the same amount as the amount paid to me.

_________ A joint and survivor annuity in equal value to the actuarial equivalent of the benefit owing pursuant to the Agreement, with payment continued to my surviving spouse (registered domestic partner) in one-half of the amount paid to me.

Acknowledgment of Limitations on Changes in Time and Form of Payment of Benefits. All Actuarially Equivalent valuations must be in compliance with Code Section 409A and 1.409A-2(b)(2)(ii). In addition, when determining whether two life annuities are Actuarially Equivalent, the same actuarial assumptions and methods must be used in valuing each life annuity. This requirement applies over the entire term of Participant’s participation in the plan, such that the annuities must be actuarially equivalent at all times for the annuity options to be treated as one time and form of payment. However, provided the actuarial methods and assumptions are reasonable, there is no requirement that consistent actuarial assumptions and methods be used over the term of the Participant’s participation in the plan. Accordingly, the plan may change the actuarial assumptions and methods used to determine the life annuity payments, provided that all of the actuarial assumptions and methods are reasonable.

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In the event, however, that a joint and survivor annuity option is selected, and that Participant’s spouse predeceases Participant, then for all payments made to Participant after the Participant’s spouse’s death, the amounts payable under this Agreement shall increase andbe equal to the payment amounts Participant would have received under a single life annuity option. In addition, Participant shall no longer have the ability to make a new joint and survivor annuity election.

In the event no alternate method is selected above, then amounts due under this Agreement shall be paid out as a single life annuity.

To the extent that any paragraph, term, or provision of the Agreement is not specifically amended herein, or in any other amendment thereto, said paragraph, term, or provision shall remain in full force and effect as set forth in said Agreement.

WHEREFORE, the Insured and a duly authorized Bank officer have signed this Amendment as of the written date

Signed:    Print Name:
Dated:

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EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Melanie J. Dressel, certify that:

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

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

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

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

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

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

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

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

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

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

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

/s/ MELANIE J. DRESSEL

Melanie J. Dressel
President and Chief Executive Officer

Date: November 4, 2013

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Clint E. Stein, certify that:

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

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

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

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

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

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

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

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

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

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

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

/s/ CLINT E. STEIN

Clint E. Stein
Executive Vice President and
Chief Financial Officer

Date: November 4, 2013

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Columbia Banking System, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Melanie J. Dressel, President and Chief Executive Officer, and Clint E. Stein, Executive Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

/s/ MELANIE J. DRESSEL

Melanie J. Dressel

President and Chief Executive Officer

Columbia Banking System, Inc.

/s/ CLINT E. STEIN

Clint E. Stein

Executive Vice President and

Chief Financial Officer

Columbia Banking System, Inc.

Dated: November 4, 2013

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Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Other Intangible Assets

In accordance with the Intangibles – Goodwill and Other topic of the FASB ASC, goodwill is not amortized but is reviewed for potential impairment at the reporting unit level. Management analyzes its goodwill for impairment on an annual basis on July 31 and between annual tests in certain circumstances such as material adverse changes in legal, business, regulatory and economic factors. An impairment loss is recorded to the extent that the carrying amount of goodwill exceeds its implied fair value. During the current quarter, the Company performed an impairment assessment as of July 31, 2013, and concluded that there was no impairment.

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

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Goodwill
Goodwill at beginning of period (1)	$	345,231		$	115,554		$	115,554		$	115,554
Established through acquisitions	—			—			229,677			—
Goodwill at end of period	345,231			115,554			345,231			115,554
Other intangible assets, net
Core deposit intangible:
Gross core deposit intangible balance at beginning of period	47,698			32,441			32,441			32,441
Accumulated amortization at beginning of period	(19,441		)	(14,545		)	(16,720		)	(12,275		)
Core deposit intangible, net at beginning of period	28,257			17,896			15,721			20,166
Established through acquisitions	—			—			15,257			—
CDI current period amortization	(1,667		)	(1,093		)	(4,388		)	(3,363		)
Total core deposit intangible, net at end of period	26,590			16,803			26,590			16,803
Intangible assets not subject to amortization	919			—			919			—
Other intangible assets, net at end of period	27,509			16,803			27,509			16,803
Total goodwill and other intangible assets at end of period	$	372,740		$	132,357		$	372,740		$	132,357

______________

(1) Goodwill at beginning of period has been retrospectively adjusted for the three months ended September 30, 2013 due to adjustments to provisional amounts made related to the West Coast acquisition. See Note 3 to the Consolidated Financial Statements of this report for more information regarding this acquisition.

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

	Amount
	(in thousands)
Year ending December 31,
2013	$	1,657
2014	5,963
2015	4,934
2016	4,195
2017	3,361

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Covered Assets and FDIC Loss-sharing Asset (Analysis of Covered Loans) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans, net	$ 4,440,048		$ 2,864,803
Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	374,342		500,794
Valuation discount on covered loans	49,445		79,401
Allowance for loan losses	22,737	26,135	30,056	29,157	31,784	4,944
Loans, net	302,160		391,337
Commercial Portfolio Segment [Member] | Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	87,366		125,373
Real Estate Portfolio Segment [Member] | Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	226,600		290,256
One-to-Four Family Residential Construction [Domain] | Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	16,018		25,398
Commercial and Multifamily Residential Construction [Domain] | Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	7,146		15,251
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	23,164		40,649
Consumer Portfolio Segment [Member] | Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	37,212		44,516
One-to-Four Family Residential [Member] | Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	44,966		57,150
Commercial and Multifamily Residential [Member] | Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 181,634		$ 233,106

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Net of tax	$ 13,276		$ 11,880	$ 40,043		$ 32,681
Unrealized gain from securities:
Net unrealized holding loss from available for sale securities arising during the period	5,943		2,631	(22,480)		3,355
Reclassification adjustment of net gain from sale of available for sale securities included in income				(299)		(39)
Net unrealized gain from securities, net of reclassification adjustment				(22,779)		3,316
Pension plan liability adjustment:
Unrecognized net actuarial gain (loss) during the period				(756)		0
Less: amortization of unrecognized net actuarial loss included in net periodic pension cost	(59)		(13)	178		29
Pension plan liability adjustment, net				(578)		29
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	6,002	[1]	2,644	(23,357)	[1]	3,345
Total comprehensive income	$ 19,278		$ 14,524	$ 16,686		$ 36,026

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

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Accounting Pronouncements Recently Issued

9 Months Ended

Sep. 30, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Accounting Pronouncements Recently Issued

Accounting Pronouncements Recently Issued

In July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The Update clarifies when it is appropriate for an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. ASU 2013-11 is effective for interim and annual periods beginning after December 15, 2013. Early adoption is permitted. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date, however, retrospective application is also permitted. Adoption of the new guidance is not expected to have a significant impact on the Company's consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. The Update requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component and to present either on the face of the statement where net income is presented, or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income, but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. The amendments are effective for annual and interim reporting periods beginning on or after December 15, 2012. The Company adopted the ASU 2013-02 reporting requirements during the interim reporting period beginning on January 1, 2013 with no impact to the Company's financial condition or results of operations. See Note 12 to the Consolidated Financial Statements of this report for new disclosures related to accumulated other comprehensive income.

In October 2012, the FASB issued ASU 2012-06, Subsequent Accounting for an Indemnification Asset Recognized at the Acquisition Date as a Result of a Government-Assisted Acquisition of a Financial Institution. ASU 2012-06 clarifies that when a reporting entity recognizes an indemnification asset as a result of a government-assisted acquisition of a financial institution and there is a subsequent change in the amount of cash flows expected to be collected on the indemnified asset, the reporting entity should subsequently measure the indemnification asset on the same basis as the underlying loans by taking into account the contractual limitations of the Loss-Sharing Agreement ("LSA"). For amortization of changes in value, the reporting entity should use the term of the indemnification agreement if it is shorter than the term of the acquired loans. ASU 2012-06 is effective for interim and annual periods beginning after December 15, 2012. The Company adopted the ASU as of January 1, 2013. As a result of the adoption of the ASU, an additional $9.9 million of indemnification asset amortization was recorded during the nine months ending September 30, 2013, resulting in a reduction of $6.4 million in net income and $0.13 in diluted earnings per share.

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Securities (Tables)

9 Months Ended

Sep. 30, 2013

Available-for-sale Securities [Abstract]

Securities Available for Sale

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

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
September 30, 2013
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	866,128	$	12,538	$	(16,997	)	$	861,669
State and municipal securities	344,053		13,824		(2,982		)	354,895
U.S. government agency and government-sponsored enterprise securities	335,989		483		(8,942		)	327,530
U.S. government securities	21,074		—		(657		)	20,417
Other securities	5,279		27		(166		)	5,140
Total	$	1,572,523	$	26,872	$	(29,744	)	$	1,569,651
December 31, 2012
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	561,076	$	16,719	$	(5,426	)	$	572,369
State and municipal securities	265,070		20,893		(388		)	285,575
U.S. government agency and government-sponsored enterprise securities	120,085		851		(435		)	120,501
U.S. government securities	19,804		39		(15		)	19,828
Other securities	3,324		104		(36		)	3,392
Total	$	969,359	$	38,606	$	(6,300	)	$	1,001,665

Schedule of Contractual Maturities of Investment Securities Available for Sale

The scheduled contractual maturities of investment securities available for sale at September 30, 2013 are presented as follows:

	September 30, 2013
	Amortized Cost		Fair Value
	(in thousands)
Due within one year	$	23,249	$	23,493
Due after one year through five years	278,538		278,715
Due after five years through ten years	463,423		459,080
Due after ten years	802,034		803,223
Other securities with no stated maturity	5,279		5,140
Total investment securities available-for-sale	$	1,572,523	$	1,569,651

Carrying Value of Securities Pledged As Collateral

The following table summarizes, as of September 30, 2013, the carrying value of securities pledged as collateral to secure public deposits, borrowings and other purposes as permitted or required by law:

	Carrying Amount
	(in thousands)
To Washington and Oregon State to secure public deposits	$	267,646
To Federal Reserve Bank to secure borrowings	44,526
Other securities pledged	43,325
Total securities pledged as collateral	$	355,497

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

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2013 and December 31, 2012:

	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
September 30, 2013
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	385,222	$	(12,567	)	$	64,044	$	(4,430	)	$	449,266	$	(16,997	)
State and municipal securities	101,176		(2,935		)	807		(47		)	101,983		(2,982		)
U.S. government agency and government-sponsored enterprise securities	290,257		(8,942		)	—		—			290,257		(8,942		)
U.S. government securities	20,217		(657		)	—		—			20,217		(657		)
Other securities	2,286		(24		)	2,813		(142		)	5,099		(166		)
Total	$	799,158	$	(25,125	)	$	67,664	$	(4,619	)	$	866,822	$	(29,744	)
December 31, 2012
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	167,739	$	(5,090	)	$	12,204	$	(336	)	$	179,943	$	(5,426	)
State and municipal securities	20,413		(383		)	210		(5		)	20,623		(388		)
U.S. government agency and government-sponsored enterprise securities	56,600		(435		)	—		—			56,600		(435		)
U.S. government securities	9,914		(15		)	—		—			9,914		(15		)
Other securities	—		—			964		(36		)	964		(36		)
Total	$	254,666	$	(5,923	)	$	13,378	$	(377	)	$	268,044	$	(6,300	)

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Fair Value Accounting and Measurement (Quantitative Information About Level 3 Fair Value Measurements) (Details) (Fair Value, Measurements, Nonrecurring [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2013		Sep. 30, 2012
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans			$ 6,094
Fair Value, Inputs, Level 3 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans			6,094
Noncovered Loans [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
OREO	3,714		1,807
OPPO			0
Noncovered Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
OREO	3,714		1,807
OPPO			0
Covered Loans [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
OREO	544		1,021
Covered Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
OREO	544		1,021
Real Estate Collateral [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans			4,148
Other Collateral [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans			$ 1,946
Other Collateral [Member] | Market Approach Valuation Technique [Member] | Impaired Loans [Member] | Minimum [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value Inputs, Comparability Adjustments			0.00%	[1]
Other Collateral [Member] | Market Approach Valuation Technique [Member] | Impaired Loans [Member] | Maximum [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value Inputs, Comparability Adjustments			70.00%	[1]
Other Collateral [Member] | Market Approach Valuation Technique [Member] | Impaired Loans [Member] | Weighted Average [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value Inputs, Comparability Adjustments	50.00%	[1],[2]	27.00%	[1],[2]

[1] (1) Discount applied to appraisal value, letter of intent to purchase, or stated value (in the case of accounts receivable and inventory).

[2] (3) Other collateral consists of accounts receivable and inventory.

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Covered Assets and FDIC Loss-sharing Asset (Covered OREO at Carrying Value) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Balance, beginning of period			$ 26,987
Proceeds from sale of OREO property			(10,779)	(15,069)
Gain on sale of OREO			8,745	8,604
Total OREO, end of period	36,273		36,273
Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Balance, beginning of period	12,854	19,079	16,311	28,126
Transfers in	3,559	3,096	8,089	8,497
Additional OREO write-down	(199)	(730)	(293)	(2,769)
Proceeds from sale of OREO property	(5,408)	(6,822)	(19,222)	(25,202)
Gain on sale of OREO	1,924	1,888	7,845	7,859
Total OREO, end of period	$ 12,730	$ 16,511	$ 12,730	$ 16,511

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Shareholders' Equity

9 Months Ended

Sep. 30, 2013

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

Preferred Stock. In conjunction with the acquisition of West Coast, the Company issued 8,782 shares of mandatorily convertible cumulative participating preferred stock, Series B. The Series B Preferred Stock is not subject to the operation of a sinking fund. The Series B Preferred Stock is not redeemable by the Company and is perpetual with no maturity. The holders of Series B Preferred Stock have no general voting rights. If the Company declares and pays a dividend to its common shareholders, it must declare and pay to its holders of Series B Preferred Stock, on the same date, a dividend in an amount per share of the Series B Preferred Stock that is intended to provide such holders dividends in the amount they would have received if shares of Series B Preferred Stock had been converted into Common Stock as of that date. The outstanding shares of Series B Preferred Stock are convertible into 102,363 shares of Company Common Stock.

Dividends. On January 24, 2013 the Company declared a quarterly cash dividend of $0.10 per share payable on February 20, 2013 to shareholders of record at the close of business February 6, 2013. On April 24, 2013, the Company declared a quarterly cash dividend of $0.10 per common share, and common share equivalent for holders of preferred stock, payable on May 22, 2013 to shareholders of record at the close of business May 8, 2013. On July 25, 2013 the Company declared a quarterly cash dividend of $0.10 per share, and common share equivalent for holders of preferred stock, payable on August 21, 2013 to shareholders of record at the close of business August 7, 2013. Subsequent to quarter end, on October 24, 2013, the Company declared a quarterly cash dividend of $0.11 per share, and common share equivalent for holders of preferred stock, payable on November 20, 2013 to shareholders of record at the close of business November 6, 2013. The payment of cash dividends is subject to Federal regulatory requirements for capital levels and other restrictions. In addition, the cash dividends paid by Columbia Bank to the Company are subject to both Federal and State regulatory requirements.

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Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Allowance for Noncovered Loan and Lease Losses) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Allowance for Loan and Lease Losses [Roll Forward]
Provision for loan and lease losses			$ 3,581	$ 34,506
Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	51,698	52,196	52,244	53,041
Charged-offs	(1,912)	(5,241)	(6,670)	(17,272)
Recoveries	1,798	1,697	5,010	4,633
Provision for loan and lease losses	4,260	2,875	5,260	11,125
Ending balance	55,844	51,527	55,844	51,527
Specific Reserve	486	730	486	730
General Allocation	55,358	50,797	55,358	50,797
Consumer Portfolio Segment [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	2,455	2,049	2,437	2,719
Charged-offs	(453)	(500)	(1,262)	(1,968)
Recoveries	112	350	353	809
Provision for loan and lease losses	405	267	991	606
Ending balance	2,519	2,166	2,519	2,166
Specific Reserve	0	0	0	0
General Allocation	2,519	2,166	2,519	2,166
Unallocated Financing Receivables [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	983	493	1,011	694
Charged-offs	0	0	0	0
Recoveries	0	0	0	0
Provision for loan and lease losses	(983)	682	(1,011)	481
Ending balance	0	1,175	0	1,175
Specific Reserve	0	0	0	0
General Allocation	0	1,175	0	1,175
Secured Loans [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	30,572	26,505	27,270	24,745
Charged-offs	(392)	(3,744)	(2,236)	(8,126)
Recoveries	743	194	1,135	1,184
Provision for loan and lease losses	3,187	3,007	7,941	8,159
Ending balance	34,110	25,962	34,110	25,962
Specific Reserve	241	315	241	315
General Allocation	33,869	25,647	33,869	25,647
Unsecured Loans [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	821	772	753	689
Charged-offs	(363)	(31)	(794)	(52)
Recoveries	111	83	184	130
Provision for loan and lease losses	491	(56)	917	1
Ending balance	1,060	768	1,060	768
Specific Reserve	43	100	43	100
General Allocation	1,017	668	1,017	668
One-to-Four Family Residential [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	672	673	694	654
Charged-offs	(47)	(49)	(191)	(499)
Recoveries	39	157	180	202
Provision for loan and lease losses	677	(216)	658	208
Ending balance	1,341	565	1,341	565
Specific Reserve	103	69	103	69
General Allocation	1,238	496	1,238	496
Commercial Land [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	691	270	460	488
Charged-offs	(9)	(55)	(20)	(437)
Recoveries	126	0	153	0
Provision for loan and lease losses	(260)	207	(45)	371
Ending balance	548	422	548	422
Specific Reserve	0	1	0	1
General Allocation	548	421	548	421
Income Property Multifamily [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	9,695	8,726	11,033	9,551
Charged-offs	(132)	(436)	(950)	(3,959)
Recoveries	154	357	260	710
Provision for loan and lease losses	85	387	(541)	2,732
Ending balance	9,802	9,034	9,802	9,034
Specific Reserve	0	0	0	0
General Allocation	9,802	9,034	9,802	9,034
Owner Occupied [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	4,515	9,037	6,362	9,606
Charged-offs	(516)	(101)	(1,084)	(712)
Recoveries	52	89	96	628
Provision for loan and lease losses	637	(694)	(686)	(1,191)
Ending balance	4,688	8,331	4,688	8,331
Specific Reserve	26	245	26	245
General Allocation	4,662	8,086	4,662	8,086
Land And Acquisition [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	769	1,651	1,171	2,331
Charged-offs	0	(307)	(32)	(809)
Recoveries	366	404	2,541	827
Provision for loan and lease losses	(410)	(279)	(2,955)	(880)
Ending balance	725	1,469	725	1,469
Specific Reserve	73	0	73	0
General Allocation	652	1,469	652	1,469
Residential Construction [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	204	1,197	635	864
Charged-offs	0	(18)	(101)	(617)
Recoveries	95	0	108	79
Provision for loan and lease losses	426	3	83	856
Ending balance	725	1,182	725	1,182
Specific Reserve	0	0	0	0
General Allocation	725	1,182	725	1,182
Income Property Multifamily Construction [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	241	755	316	665
Charged-offs	0	0	0	(93)
Recoveries	0	63	0	64
Provision for loan and lease losses	17	(456)	(58)	(274)
Ending balance	258	362	258	362
Specific Reserve	0	0	0	0
General Allocation	258	362	258	362
Owner Occupied Construction [Member] | Noncovered Loans [Member]
Allowance for Loan and Lease Losses [Roll Forward]
Beginning balance	80	68	102	35
Charged-offs	0	0	0	0
Recoveries	0	0	0	0
Provision for loan and lease losses	(12)	23	(34)	56
Ending balance	68	91	68	91
Specific Reserve	0	0	0	0
General Allocation	$ 68	$ 91	$ 68	$ 91

XML

Covered Assets and FDIC Loss-sharing Asset (FDIC Loss-sharing Asset) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Covered Assets And FDIC Loss Sharing Asset
Balance at beginning of period	$ 67,374	$ 140,003	$ 96,354	$ 175,071
Cash received from the FDIC	(1,484)	(14,881)	(7,871)	(49,194)
FDIC reimbursable losses, net	(505)	(494)	522	587
Amortization, net	(9,890)	(9,694)	(29,470)	(33,418)
Impairment	(758)	(3,193)	(1,343)	18,705
Sale of other real estate	(1,479)	(1,315)	(5,076)	(4,881)
Write-downs of other real estate	220	1,141	373	4,503
Other	81	110	70	304
Balance at end of period	$ 53,559	$ 111,677	$ 53,559	$ 111,677

XML

Securities (Carrying Value of Securities Pledged as Collateral) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Schedule of Available-for-sale Securities [Line Items]
Carrying amount of securities pledged as collateral	$ 355,497
Washington and Oregon State Public Deposits [Member]
Schedule of Available-for-sale Securities [Line Items]
Carrying amount of securities pledged as collateral	267,646
Federal Reserve Bank Advances [Member]
Schedule of Available-for-sale Securities [Line Items]
Carrying amount of securities pledged as collateral	44,526
Other Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Carrying amount of securities pledged as collateral	$ 43,325

XML

Changes in Noncovered Other Real Estate Owned (Tables)

9 Months Ended

Sep. 30, 2013

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

Summary of Noncovered Other Real Estate Owned

The following tables set forth activity in noncovered OREO for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Noncovered OREO:
Balance at beginning of period	$	24,339		$	13,925		$	10,676		$	22,893
Established through acquisitions	—			—			14,708			—
Transfers in, net of write-downs ($48, $24, $90 and $24, respectively)	4,413			139			9,190			6,527
OREO improvements	—			—			—			11
Additional OREO write-downs	(1,066		)	(458		)	(1,636		)	(4,232		)
Proceeds from sale of OREO property	(4,673		)	(3,170		)	(10,295		)	(15,069		)
Gain on sale of OREO, net	530			439			900			745
Total noncovered OREO at end of period	$	23,543		$	10,875		$	23,543		$	10,875

XML

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

3 Months Ended

9 Months Ended

Sep. 30, 2012

Sep. 30, 2013

Financing Receivable, Allowance for Credit Losses [Line Items]

Changes in the Allowance for Unfunded Commitments and Letters of Credit

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(in thousands)
Balance at beginning of period	$	2,465	$	1,665	$	1,915	$	1,535
Net changes in the allowance for unfunded commitments and letters of credit	200		250		750		380
Balance at end of period	$	2,665	$	1,915	$	2,665	$	1,915

Financing Receivable Credit Quality Indicators

The following is an analysis of the credit quality of our covered loan portfolio as of September 30, 2013 and 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
September 30, 2013	(in thousands)
Covered loans:
Commercial business:
Secured	$	56,973	$	2,859	$	24,025	$	—	$	—	$	83,857
Unsecured	3,018		396		95		—		—		3,509
Real estate:
One-to-four family residential	36,419		1,854		6,693		—		—		44,966
Commercial and multifamily residential:
Commercial land	11,978		205		7,796		—		—		19,979
Income property	59,736		3,966		11,907		—		—		75,609
Owner occupied	73,045		114		12,887		—		—		86,046
Real estate construction:
One-to-four family residential:
Land and acquisition	4,688		2,759		2,398		—		—		9,845
Residential construction	2,587		—		3,586		—		—		6,173
Commercial and multifamily residential:
Income property	3,847		—		1,936		—		—		5,783
Owner occupied	1,083		—		280		—		—		1,363
Consumer	33,421		35		3,729		27		—		37,212
Total	$	286,795	$	12,188	$	75,332	$	27	$	—	374,342
Less:
Valuation discount resulting from acquisition accounting											49,445
Allowance for loan losses											22,737
Covered loans, net											$	302,160

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

Noncovered Loans [Member]

Financing Receivable, Allowance for Credit Losses [Line Items]

Allowance for Credit Losses on Financing Receivables

The following tables show a detailed analysis of the allowance for loan and lease losses for noncovered loans for the three and nine months ended September 30, 2013 and 2012:

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended September 30, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	30,572	$	(392	)	$	743	$	3,187		$	34,110	$	241	$	33,869
Unsecured	821		(363		)	111		491			1,060		43		1,017
Real estate:
One-to-four family residential	672		(47		)	39		677			1,341		103		1,238
Commercial & multifamily residential
Commercial land	691		(9		)	126		(260		)	548		—		548
Income property	9,695		(132		)	154		85			9,802		—		9,802
Owner occupied	4,515		(516		)	52		637			4,688		26		4,662
Real estate construction:
One-to-four family residential
Land and acquisition	769		—			366		(410		)	725		73		652
Residential construction	204		—			95		426			725		—		725
Commercial & multifamily residential
Income property	241		—			—		17			258		—		258
Owner occupied	80		—			—		(12		)	68		—		68
Consumer	2,455		(453		)	112		405			2,519		—		2,519
Unallocated	983		—			—		(983		)	—		—		—
Total	$	51,698	$	(1,912	)	$	1,798	$	4,260		$	55,844	$	486	$	55,358
	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Nine months ended September 30, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	27,270	$	(2,236	)	$	1,135	$	7,941		$	34,110	$	241	$	33,869
Unsecured	753		(794		)	184		917			1,060		43		1,017
Real estate:
One-to-four family residential	694		(191		)	180		658			1,341		103		1,238
Commercial & multifamily residential
Commercial land	460		(20		)	153		(45		)	548		—		548
Income property	11,033		(950		)	260		(541		)	9,802		—		9,802
Owner occupied	6,362		(1,084		)	96		(686		)	4,688		26		4,662
Real estate construction:
One-to-four family residential
Land and acquisition	1,171		(32		)	2,541		(2,955		)	725		73		652
Residential construction	635		(101		)	108		83			725		—		725
Commercial & multifamily residential
Income property	316		—			—		(58		)	258		—		258
Owner occupied	102		—			—		(34		)	68		—		68
Consumer	2,437		(1,262		)	353		991			2,519		—		2,519
Unallocated	1,011		—			—		(1,011		)	—		—		—
Total	$	52,244	$	(6,670	)	$	5,010	$	5,260		$	55,844	$	486	$	55,358

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended September 30, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	26,505	$	(3,744	)	$	194	$	3,007		$	25,962	$	315	$	25,647
Unsecured	772		(31		)	83		(56		)	768		100		668
Real estate:
One-to-four family residential	673		(49		)	157		(216		)	565		69		496
Commercial & multifamily residential
Commercial land	270		(55		)	—		207			422		1		421
Income property	8,726		(436		)	357		387			9,034		—		9,034
Owner occupied	9,037		(101		)	89		(694		)	8,331		245		8,086
Real estate construction:
One-to-four family residential
Land and acquisition	1,651		(307		)	404		(279		)	1,469		—		1,469
Residential construction	1,197		(18		)	—		3			1,182		—		1,182
Commercial & multifamily residential
Income property	755		—			63		(456		)	362		—		362
Owner occupied	68		—			—		23			91		—		91
Consumer	2,049		(500		)	350		267			2,166		—		2,166
Unallocated	493		—			—		682			1,175		—		1,175
Total	$	52,196	$	(5,241	)	$	1,697	$	2,875		$	51,527	$	730	$	50,797
	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Nine months ended September 30, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	24,745	$	(8,126	)	$	1,184	$	8,159		$	25,962	$	315	$	25,647
Unsecured	689		(52		)	130		1			768		100		668
Real estate:
One-to-four family residential	654		(499		)	202		208			565		69		496
Commercial & multifamily residential
Commercial land	488		(437		)	—		371			422		1		421
Income property	9,551		(3,959		)	710		2,732			9,034		—		9,034
Owner occupied	9,606		(712		)	628		(1,191		)	8,331		245		8,086
Real estate construction:
One-to-four family residential
Land and acquisition	2,331		(809		)	827		(880		)	1,469		—		1,469
Residential construction	864		(617		)	79		856			1,182		—		1,182
Commercial & multifamily residential
Income property	665		(93		)	64		(274		)	362		—		362
Owner occupied	35		—			—		56			91		—		91
Consumer	2,719		(1,968		)	809		606			2,166		—		2,166
Unallocated	694		—			—		481			1,175		—		1,175
Total	$	53,041	$	(17,272	)	$	4,633	$	11,125		$	51,527	$	730	$	50,797

Financing Receivable Credit Quality Indicators

The following is an analysis of the credit quality of our noncovered loan portfolio as of September 30, 2013 and December 31, 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
September 30, 2013	(in thousands)
Noncovered loans:
Commercial business:
Secured	$	1,362,097	$	38,018	$	87,232	$	—	$	1	$	1,487,348
Unsecured	74,705		23		260		—		—		74,988
Real estate:
One-to-four family residential	94,947		1,687		7,455		—		—		104,089
Commercial and multifamily residential:
Commercial land	128,624		2,140		4,068		—		—		134,832
Income property	1,097,644		7,304		35,357		—		150		1,140,455
Owner occupied	721,373		1,521		18,000		—		—		740,894
Real estate construction:
One-to-four family residential:
Land and acquisition	8,003		172		4,065		—		—		12,240
Residential construction	34,950		3,980		1,457		—		—		40,387
Commercial and multifamily residential:
Income property	87,791		—		249		—		—		88,040
Owner occupied	39,064		—		—		—		—		39,064
Consumer	324,274		331		6,789		—		1		331,395
Total	$	3,973,472	$	55,176	$	164,932	$	—	$	152	4,193,732
Less:
Allowance for loan and lease losses											55,844
Noncovered loans, net											$	4,137,888

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

XML

Noncovered Loans Noncovered Loans (Analysis of Troubled Debt Restructurings) (Details) (Noncovered Loans [Member], USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013 Modifications
Financing Receivable, Modifications [Line Items]
Number of TDR Modifications	7
Pre-Modification Outstanding Recorded Investment	$ 1,712
Post-Modification Outstanding Recorded Investment	1,712
Secured Loans [Member]
Financing Receivable, Modifications [Line Items]
Number of TDR Modifications	1
Pre-Modification Outstanding Recorded Investment	343
Post-Modification Outstanding Recorded Investment	343
Commercial Land [Member]
Financing Receivable, Modifications [Line Items]
Number of TDR Modifications	1
Pre-Modification Outstanding Recorded Investment	137
Post-Modification Outstanding Recorded Investment	137
Income Property Multifamily [Member]
Financing Receivable, Modifications [Line Items]
Number of TDR Modifications	3
Pre-Modification Outstanding Recorded Investment	943
Post-Modification Outstanding Recorded Investment	943
Owner Occupied [Member]
Financing Receivable, Modifications [Line Items]
Number of TDR Modifications	1
Pre-Modification Outstanding Recorded Investment	172
Post-Modification Outstanding Recorded Investment	172
Land And Acquisition [Member]
Financing Receivable, Modifications [Line Items]
Number of TDR Modifications	1
Pre-Modification Outstanding Recorded Investment	117
Post-Modification Outstanding Recorded Investment	$ 117

XML

Accounting Pronouncements Recently Issued Adoption of new accounting guidance, impacts (Details) (USD $) In Millions, except Per Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Revenue	$ (9.9)
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income	$ (6.4)
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Diluted Earnings Per Share	$ (0.13)

XML

Securities (Narrative) (Details)	Sep. 30, 2013 security
U.S. Government and Government-Sponsored Enterprise Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In Unrealized Loss Position	29
Number Of Securities In Continuous Loss Position For Twelve Months or More	0
Other Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In Unrealized Loss Position	4
Number Of Securities In Continuous Loss Position For Twelve Months or More	0
Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In Unrealized Loss Position	109
Number Of Securities In Continuous Loss Position For Twelve Months or More	2
U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In Unrealized Loss Position	67
Number Of Securities In Continuous Loss Position For Twelve Months or More	6
Other Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Number Of Securities In Unrealized Loss Position	2
Number Of Securities In Continuous Loss Position For Twelve Months or More	1

XML

Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Changes in the Allowance for Unfunded Commitments and Letters of Credit) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Allowance For Loan And Lease Losses And Unfunded Loan Commitments And Letters Of Credit
Beginning balance	$ 2,465	$ 1,665	$ 1,915	$ 1,535
Allowance for Loan and Lease Losses, Net Changes In Unfunded Commitments and Letters Of Credit Allowance	200	250	750	380
Ending balance	$ 2,665	$ 1,915	$ 2,665	$ 1,915

XML

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

9 Months Ended

Sep. 30, 2013

Not Designated as Hedging Instrument [Member]

Derivative [Line Items]

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

The following table presents the fair value of derivatives not designated as hedging instruments at September 30, 2013 and December 31, 2012:

Asset Derivatives

Liability Derivatives

September 30, 2013

December 31, 2012

September 30, 2013

December 31, 2012

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

(in thousands)

Interest rate contracts

Other assets

$

10,187

Other assets

$

14,921

Other liabilities

$

10,187

Other liabilities

$

14,921

XML

Derivatives and Hedging Activities (Details) (Not Designated as Hedging Instrument [Member], Interest Rate Contracts [Member], USD $)	Sep. 30, 2013	Dec. 31, 2012
Derivative [Line Items]
Derivative, Notional Amount	$ 164,500,000	$ 177,000,000
Other Assets [Member]
Derivative [Line Items]
Fair value of asset derivative instruments	10,187,000	14,921,000
Other Liabilities [Member]
Derivative [Line Items]
Fair value of liability derivative instruments	$ 10,187,000	$ 14,921,000

XML

Accumulated Other Comprehensive Income (Reclassification out of AOCI) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Investment securities gains, net	$ 0	$ 0	$ 462	$ 62
Compensation and employee benefits	33,287	21,523	90,597	64,484
Total before tax	20,010	16,535	59,126	44,901
Income tax provision	(6,734)	(4,655)	(19,083)	(12,220)
Net Income	13,276	11,880	40,043	32,681
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains and Losses on Available-for-Sale Securities [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Investment securities gains, net	0		462
Total before tax	0		462
Income tax provision	0		(163)
Net Income	0		299
Reclassification out of Accumulated Other Comprehensive Income [Member] | Unrealized Gains and Losses on Pension Plan Liability [Member]
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
Compensation and employee benefits	(92)		(276)
Total before tax	(92)		(276)
Income tax provision	33		98
Net Income	$ (59)		$ (178)

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Noncovered Loans (Analysis of Nonaccrual Loans) (Details) (Noncovered Loans [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	$ 35,961	$ 37,395
Unpaid Principal Balance Nonaccrual Loans	58,650	57,877
Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	4,036	1,643
Unpaid Principal Balance Nonaccrual Loans	6,012	1,940
Secured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	11,839	9,037
Unpaid Principal Balance Nonaccrual Loans	18,194	17,821
Unsecured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	156	262
Unpaid Principal Balance Nonaccrual Loans	181	262
One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	2,220	2,349
Unpaid Principal Balance Nonaccrual Loans	4,058	2,672
Commercial Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	890	4,076
Unpaid Principal Balance Nonaccrual Loans	1,299	7,491
Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	7,756	8,520
Unpaid Principal Balance Nonaccrual Loans	11,560	10,815
Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	5,379	6,608
Unpaid Principal Balance Nonaccrual Loans	7,271	7,741
Land And Acquisition [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	3,226	3,084
Unpaid Principal Balance Nonaccrual Loans	8,134	6,704
Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment Nonaccrual Loans	459	1,816
Unpaid Principal Balance Nonaccrual Loans	$ 1,941	$ 2,431

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Earnings per Common Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Share [Abstract]
Net Income	$ 13,276	$ 11,880	$ 40,043	$ 32,681
Earnings allocated to participating securities - nonvested restricted shares	109	113	355	336
Earnings allocated to participating securities - preferred shares	27	0	58	0
Earnings allocated to common shareholders, Basic	13,140	11,767	39,630	32,345
Weighted average common shares outstanding	50,834	39,289	47,032	39,248
Basic earnings per common share	$ 0.26	$ 0.30	$ 0.84	$ 0.82
Dilutive effect of equity awards and warrants	1,463	2	915	3
Earnings allocated to common shareholders, Diluted	$ 13,142	$ 11,767	$ 39,635	$ 32,345
Weighted average diluted common shares outstanding	52,297	39,291	47,947	39,251
Diluted earnings per common share	$ 0.25	$ 0.30	$ 0.83	$ 0.82
Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive.	138	53	99	46

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

9 Months Ended

Sep. 30, 2013

Noncovered Loans [Member]

Financing Receivable, Recorded Investment [Line Items]

Analysis of Loan Portfolio by Major Types of Loans

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

	September 30, 2013			December 31, 2012
Noncovered loans:	(in thousands)
Commercial business	$	1,569,343		$	1,155,158
Real estate:
One-to-four family residential	106,686			43,922
Commercial and multifamily residential	2,048,910			1,061,201
Total real estate	2,155,596			1,105,123
Real estate construction:
One-to-four family residential	53,158			50,602
Commercial and multifamily residential	128,120			65,101
Total real estate construction	181,278			115,703
Consumer	362,808			157,493
Less: Net unearned income	(75,293		)	(7,767		)
Total noncovered loans, net of unearned income	4,193,732			2,525,710
Less: Allowance for loan and lease losses	(55,844		)	(52,244		)
Total noncovered loans, net	$	4,137,888		$	2,473,466
Loans held for sale	$	840		$	2,563

Analysis of nonaccrual loans

The following is an analysis of noncovered, nonaccrual loans as of September 30, 2013 and December 31, 2012:

	September 30, 2013				December 31, 2012
	Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans		Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans
Noncovered loans:	(in thousands)
Commercial business
Secured	$	11,839	$	18,194	$	9,037	$	17,821
Unsecured	156		181		262		262
Real estate:
One-to-four family residential	2,220		4,058		2,349		2,672
Commercial & multifamily residential
Commercial land	890		1,299		4,076		7,491
Income property	7,756		11,560		8,520		10,815
Owner occupied	5,379		7,271		6,608		7,741
Real estate construction:
One-to-four family residential
Land and acquisition	3,226		8,134		3,084		6,704
Residential construction	459		1,941		1,816		2,431
Consumer	4,036		6,012		1,643		1,940
Total	$	35,961	$	58,650	$	37,395	$	57,877

Past Due Financing Receivables

The following is an aging of the recorded investment of the noncovered loan portfolio as of September 30, 2013 and December 31, 2012:

	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
September 30, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,465,682	$	6,520	$	3,306	$	1	$	9,827	$	11,839	$	1,487,348
Unsecured	74,756		72		4		—		76		156		74,988
Real estate:
One-to-four family residential	99,413		2,232		224		—		2,456		2,220		104,089
Commercial & multifamily residential
Commercial land	133,942		—		—		—		—		890		134,832
Income property	1,125,012		7,687		—		—		7,687		7,756		1,140,455
Owner occupied	728,002		5,465		2,048		—		7,513		5,379		740,894
Real estate construction:
One-to-four family residential
Land and acquisition	9,014		—		—		—		—		3,226		12,240
Residential construction	39,928		—		—		—		—		459		40,387
Commercial & multifamily residential
Income property	88,040		—		—		—		—		—		88,040
Owner occupied	39,064		—		—		—		—		—		39,064
Consumer	325,614		1,375		369		1		1,745		4,036		331,395
Total	$	4,128,467	$	23,351	$	5,951	$	2	$	29,304	$	35,961	$	4,193,732
	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,091,770	$	4,259	$	1,485	$	—	$	5,744	$	9,037	$	1,106,551
Unsecured	44,817		252		12		—		264		262		45,343
Real estate:
One-to-four family residential	41,508		193		142		—		335		2,349		44,192
Commercial & multifamily residential
Commercial land	42,818		311		122		—		433		4,076		47,327
Income property	603,339		2,726		227		—		2,953		8,520		614,812
Owner occupied	387,525		1,040		—		—		1,040		6,608		395,173
Real estate construction:
One-to-four family residential
Land and acquisition	15,412		—		—		—		—		3,084		18,496
Residential construction	29,848		—		—		—		—		1,816		31,664
Commercial & multifamily residential
Income property	28,342		—		—		—		—		—		28,342
Owner occupied	36,211		—		—		—		—		—		36,211
Consumer	155,207		387		362		—		749		1,643		157,599
Total	$	2,476,797	$	9,168	$	2,350	$	—	$	11,518	$	37,395	$	2,525,710

Impaired Financing Receivables

The following is an analysis of impaired loans as of September 30, 2013 and December 31, 2012:

	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
September 30, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,482,076	$	5,272	$	573	$	637	$	241	$	4,698	$	5,900
Unsecured	74,945		43		43		43		43		—		—
Real estate:
One-to-four family residential	102,547		1,542		335		358		103		1,207		2,127
Commercial & multifamily residential
Commercial land	134,266		566		—		—		—		566		899
Income property	1,131,432		9,023		—		—		—		9,023		13,319
Owner occupied	730,787		10,107		601		599		26		9,507		13,207
Real estate construction:
One-to-four family residential
Land and acquisition	9,744		2,496		115		114		73		2,381		3,149
Residential construction	40,387		—		—		—		—		—		—
Commercial & multifamily residential
Income property	88,040		—		—		—		—		—		—
Owner occupied	39,064		—		—		—		—		—		—
Consumer	331,273		122		—		—		—		122		121
Total	$	4,164,561	$	29,171	$	1,667	$	1,751	$	486	$	27,504	$	38,722
	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,101,689	$	4,862	$	690	$	1,994	$	113	$	4,172	$	6,769
Unsecured	45,251		92		92		92		92		—		—
Real estate:
One-to-four family residential	42,103		2,089		345		364		112		1,744		1,902
Commercial & multifamily residential
Commercial land	44,672		2,655		—		—		—		2,655		5,727
Income property	606,656		8,156		2,670		2,727		1,040		5,486		7,860
Owner occupied	383,269		11,904		608		610		38		11,296		14,642
Real estate construction:
One-to-four family residential
Land and acquisition	15,677		2,819		—		—		—		2,819		4,813
Residential construction	29,707		1,957		—		—		—		1,957		2,570
Commercial & multifamily residential
Income property	28,342		—		—		—		—		—		—
Owner occupied	36,211		—		—		—		—		—		—
Consumer	157,472		127		—		—		—		127		127
Total	$	2,491,049	$	34,661	$	4,405	$	5,787	$	1,395	$	30,256	$	44,410

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

	Three Months Ended September 30,										Nine Months Ended September 30,
	2013					2012					2013				2012
	Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans			Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans			Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans		Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans
Noncovered loans:	(in thousands)
Commercial business
Secured	$	6,631	$	(25	)	$	10,306	$	6		$	5,774	$	12	$	10,008	$	14
Unsecured	47		1			118		1			68		2		118		5
Real estate:
One-to-four family residential	1,537		16			2,014		(9		)	1,677		47		2,140		—
Commercial & multifamily residential
Commercial land	1,456		48			3,079		—			2,085		48		3,242		—
Income property	10,358		22			7,577		55			9,534		168		7,830		60
Owner occupied	9,822		231			13,185		244			10,721		740		13,668		762
Real estate construction:
One-to-four family residential
Land and acquisition	2,889		1			3,213		—			2,794		4		4,876		—
Residential construction	—		—			2,792		12			526		—		3,539		17
Commercial & multifamily residential
Income property	—		—			1,877		—			—		—		3,961		—
Consumer	423		2			1,045		11			275		5		1,359		33
Total	$	33,163	$	296		$	45,206	$	320		$	33,454	$	1,026	$	50,741	$	891

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

There were no Troubled Debt Restructurings ("TDR") during the three months ended September 30, 2013 or nine months ended September 30, 2012. The following is an analysis of loans classified as TDR during the nine months ended September 30, 2013:

	Nine months ended September 30, 2013
	Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Noncovered loans:	(dollars in thousands)
Commercial business:
Secured	1	$	343	$	343
Real estate:
Commercial and multifamily residential:
Commercial land	1	137		137
Income property	3	943		943
Owner occupied	1	172		172
Real estate construction:
One-to-four family residential:
Land and acquisition	1	117		117
Total	7	$	1,712	$	1,712

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Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net unrealized holding gain (loss) from available for sale securities arising during the period, tax	$ 3,235	$ 1,432	$ (12,238)	$ 1,345
Reclassification adjustment of net gain from sale of available for sale securities included in income, tax	0	0	163	23
Reclassification adjustment of net gain included in income, tax	0	0	0	0
Net unrealized gain from unfunded defined benefit plan liability arising during the period, tax	0	0	412	0
Less: amortization of unrecognized net actuarial loss included in net periodic pension cost, tax	$ (33)	$ (7)	$ (98)	$ (31)

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash Flows From Operating Activities
Net Income	$ 40,043	$ 32,681
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan and lease losses and losses on covered loans	3,581	34,506
Stock-based compensation expense	1,881	1,152
Depreciation, amortization and accretion	30,216	45,873
Net realized gain on sale of securities	462	62
Net realized gain on sale of other assets	(107)	(35)
Net realized (gain) loss on sale of other real estate owned	(8,745)	(8,604)
Write-down on other real estate owned	1,929	7,001
Net change in:
Loans held for sale	1,723	(1,452)
Interest receivable	(9,846)	(1,300)
Interest payable	(88)	(374)
Other assets	1,805	(5,223)
Other liabilities	(2,114)	(3,881)
Net cash provided by operating activities	59,816	100,282
Cash Flows From Investing Activities
Loans originated and acquired, net of principal collected	166,905	72,180
Purchases of securities available for sale	(292,744)	(87,346)
Purchases of premises and equipment	(10,087)	(12,404)
Proceeds from FDIC reimbursement on loss-sharing asset	7,871	49,194
Proceeds from sales of securities available for sale	166,881	3,845
Proceeds from principal repayments and maturities of securities available for sale	241,388	163,584
Proceeds from Sales of Assets, Investing Activities	1,117	25
Proceeds from sales of covered other real estate owned	19,222	25,202
Proceeds from sales of other real estate and other personal property owned	10,779	15,069
Capital improvements on other real estate properties	0	(11)
Payments to Acquire Intangible Assets	(919)	0
Net cash acquired in business combinations	(154,170)	0
Payments for (Proceeds from) Other Investing Activities	(522)	0
Net cash provided by (used in) investing activities	(178,089)	84,978
Cash Flows From Financing Activities
Net increase (decrease) in deposits	23,475	123,326
Proceeds from Federal Home Loan Bank advances	1,144,100	0
Purchase and retirement of common stock	391	0
Payments of Ordinary Dividends, Preferred Stock and Preference Stock	(20)	0
Repayments of Subordinated Debt	(51,000)	0
Proceeds from Federal Reserve Bank borrowings	50	0
Proceeds from exercise of stock options	1,154	713
Repayment of Federal Home Loan Bank advances	(1,244,000)	(5,744)
Repayment of Federal Reserve Bank borrowings	(50)	0
Payment of common stock dividends	(14,219)	(35,252)
Net cash used by financing activities	(140,901)	83,043
Increase (Decrease) in cash and cash equivalents	(259,174)	268,303
Cash and cash equivalents at beginning of period	513,926	294,289
Cash and cash equivalents at end of period	254,752	562,592
Non-cash investing activities
Loans transferred to other real estate owned	17,279	15,024
Assets acquired in FDIC-assisted acquisitions (excluding cash and cash equivalents)	2,522,078	0
Stock Issued	276,181	0
Liabilities assumed in FDIC-assisted acquisitions	2,091,727	0
Cash paid for interest	4,830	7,640
Cash paid for income tax	$ 20,221	$ 9,605

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Business combinations

9 Months Ended

Sep. 30, 2013

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Business Combinations

West Coast Bancorp

On April 1, 2013, the Company completed its acquisition of West Coast Bancorp ("West Coast"). The Company acquired 100% of the voting equity interests of West Coast. The primary reason for the acquisition was to expand the Company's geographic footprint consistent with its ongoing 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 April 1, 2013 acquisition date. The amounts for other assets, other liabilities and goodwill have been retrospectively adjusted during the current period to reflect the removal of a liability that was recorded by West Coast, as well as the associated impacts to the deferred tax asset (other assets) and goodwill. The adjustment recorded in the current period was a decrease to other liabilities of $1.8 million, a decrease to other assets of $622 thousand and a decrease to goodwill of $1.1 million and no impact to previously reported net income. Initial accounting for deferred taxes, the mortgage repurchase liability and payment system intangible remain incomplete as of September 30, 2013. The amounts currently recognized in the financial statements have been determined provisionally as the completion of a fair value analysis for these items is still in progress.

The application of the acquisition method of accounting resulted in the recognition of goodwill of $229.7 million and a core deposit intangible of $15.3 million, or 0.89% 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:

	April 1, 2013
	(in thousands)
Purchase price as of April 1, 2013	$	540,791
Recognized amounts of identifiable assets acquired and (liabilities assumed), at fair value:
Cash and cash equivalents	$	110,440
Investment securities	730,842
Federal Home Loan Bank stock	11,824
Acquired loans	1,407,798
Premises and equipment	35,884
Other real estate owned	14,708
Core deposit intangible	15,257
Other assets	76,088
Deposits	(1,883,407		)
Federal Home Loan Bank advances	(128,885		)
Junior subordinated debentures	(51,000		)
Other liabilities	(28,435		)
Total fair value of identifiable net assets	311,114
Goodwill	$	229,677

See Note 9, 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 April 1, 2013 to September 30, 2013. 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 nine month periods ended September 30, 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 investments securities been recorded at fair value as of 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 will differ from the unaudited pro forma information presented.

	Unaudited Pro Forma
	Nine Months Ended September 30,
	2013		2012
	(in thousands)
Total revenues (net interest income plus noninterest income)	$	252,392	$	322,941
Net income	$	53,053	$	67,162
Earnings per share - basic	$	1.04	$	1.29
Earnings per share - diluted	$	1.01	$	1.29

In connection with the West Coast acquisition, Columbia recognized $17.6 million of acquisition-related expenses for the nine month period ended September 30, 2013. The acquisition-related expenses were excluded from the table above.

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Basis of Presentation and Significant Accounting Policies

9 Months Ended

Sep. 30, 2013

Basis of Presentation And Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. The consolidated financial statements include the accounts of the Company, and its wholly owned banking subsidiary Columbia Bank (the “Bank”), and West Coast Trust. All intercompany transactions and accounts have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included. The results of operations for the nine months ended September 30, 2013 are not necessarily indicative of results to be anticipated for the year ending December 31, 2013. The accompanying interim unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes contained in the Company’s 2012 Annual Report on Form 10-K.

Significant Accounting Policies

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

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Noncovered Loans (Narrative) (Details) (USD $)	9 Months Ended
	Sep. 30, 2013 contract	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Loans to related parties	$ 14,100,000	$ 14,200,000
Loans and Leases Receivable, Related Parties, Additions	1,900,000
Repayments on related party loans	2,000,000
Additional funds committed to lend on loans classified as TDR	1,700,000	236,000
Financing Receivable, Modifications, Subsequent Default, Number of Contracts	0
Loans Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	649,800,000	443,400,000
Federal Reserve Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	$ 49,400,000	$ 13,800,000

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Covered Assets and FDIC Loss-sharing Asset (Tables)

9 Months Ended

Sep. 30, 2013

Covered Assets And FDIC Loss Sharing Asset [Line Items]

Analysis and Allowance for Losses on Covered Loans

The following is an analysis of our covered loans, net of related allowance for losses as of September 30, 2013 and December 31, 2012:

	September 30, 2013		December 31, 2012
Covered loans:	(dollars in thousands)
Commercial business	$	87,366	$	125,373
Real estate:
One-to-four family residential	44,966		57,150
Commercial and multifamily residential	181,634		233,106
Total real estate	226,600		290,256
Real estate construction:
One-to-four family residential	16,018		25,398
Commercial and multifamily residential	7,146		15,251
Total real estate construction	23,164		40,649
Consumer	37,212		44,516
Subtotal of covered loans	374,342		500,794
Less:
Valuation discount resulting from acquisition accounting	49,445		79,401
Allowance for loan losses	22,737		30,056
Covered loans, net of allowance for loan losses	$	302,160	$	391,337

Changes in Accretable Yield for Acquired Loans

The following table shows the changes in accretable yield for acquired loans for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Balance at beginning of period	$	140,511		$	214,061		$	166,888		$	259,669
Accretion	(12,243		)	(19,571		)	(40,240		)	(69,045		)
Disposals	(5,772		)	(3,146		)	(621		)	(8,218		)
Reclassifications from nonaccretable difference	(3,013		)	(2,861		)	(6,544		)	6,077
Balance at end of period	$	119,483		$	188,483		$	119,483		$	188,483

Financing Receivable Credit Quality Indicators

The following is an analysis of the credit quality of our covered loan portfolio as of September 30, 2013 and 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
September 30, 2013	(in thousands)
Covered loans:
Commercial business:
Secured	$	56,973	$	2,859	$	24,025	$	—	$	—	$	83,857
Unsecured	3,018		396		95		—		—		3,509
Real estate:
One-to-four family residential	36,419		1,854		6,693		—		—		44,966
Commercial and multifamily residential:
Commercial land	11,978		205		7,796		—		—		19,979
Income property	59,736		3,966		11,907		—		—		75,609
Owner occupied	73,045		114		12,887		—		—		86,046
Real estate construction:
One-to-four family residential:
Land and acquisition	4,688		2,759		2,398		—		—		9,845
Residential construction	2,587		—		3,586		—		—		6,173
Commercial and multifamily residential:
Income property	3,847		—		1,936		—		—		5,783
Owner occupied	1,083		—		280		—		—		1,363
Consumer	33,421		35		3,729		27		—		37,212
Total	$	286,795	$	12,188	$	75,332	$	27	$	—	374,342
Less:
Valuation discount resulting from acquisition accounting											49,445
Allowance for loan losses											22,737
Covered loans, net											$	302,160

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

Covered OREO at Carrying Value

The following table sets forth activity in covered OREO at carrying value for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Covered OREO:
Balance at beginning of period	$	12,854		$	19,079		$	16,311		$	28,126
Transfers in	3,559			3,096			8,089			8,497
Additional OREO write-downs	(199		)	(730		)	(293		)	(2,769		)
Proceeds from sale of OREO property	(5,408		)	(6,822		)	(19,222		)	(25,202		)
Net gain on sale of OREO	1,924			1,888			7,845			7,859
Total covered OREO at end of period	$	12,730		$	16,511		$	12,730		$	16,511

FDIC Loss-sharing Asset

The following table shows a detailed analysis of the FDIC loss-sharing asset for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Balance at beginning of period	$	67,374		$	140,003		$	96,354		$	175,071
Adjustments not reflected in income
Cash received from the FDIC	(1,484		)	(14,881		)	(7,871		)	(49,194		)
FDIC reimbursable losses, net	(505		)	(494		)	522			587
Adjustments reflected in income
Amortization, net	(9,890		)	(9,694		)	(29,470		)	(33,418		)
Loan impairment (recapture)	(758		)	(3,193		)	(1,343		)	18,705
Sale of other real estate	(1,479		)	(1,315		)	(5,076		)	(4,881		)
Write-downs of other real estate	220			1,141			373			4,503
Other	81			110			70			304
Balance at end of period	$	53,559		$	111,677		$	53,559		$	111,677

Covered Loans [Member]

Covered Assets And FDIC Loss Sharing Asset [Line Items]

Allowance for Credit Losses on Financing Receivables

The changes in the ALLL for covered loans for the three and nine months ended September 30, 2013 and 2012 are summarized as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Balance at beginning of period	$	26,135		$	31,784		$	30,056		$	4,944
Loans charged off	(5,006		)	(977		)	(10,031		)	(2,574		)
Recoveries	2,555			2,342			4,391			3,406
Provision (recovery) for loan losses	(947		)	(3,992		)	(1,679		)	23,381
Balance at end of period	$	22,737		$	29,157		$	22,737		$	29,157

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Fair Value Accounting and Measurement (Tables)

9 Months Ended

Sep. 30, 2013

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

Financial Assets And Liabilities Accounted For Fair Value On Recurring Basis

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at September 30, 2013 and December 31, 2012 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

	Fair value		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2		Level 3
September 30, 2013	(in thousands)
Assets
Securities available for sale
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations	$	861,669	$	—	$	861,669	$	—
State and municipal debt securities	354,895		—		354,895		—
U.S. government agency and government-sponsored enterprise securities	327,530		—		327,530		—
U.S. government securities	20,417		20,417		—		—
Other securities	5,140		—		5,140		—
Total securities available for sale	$	1,569,651	$	20,417	$	1,549,234	$	—
Other assets (Interest rate contracts)	$	10,187	$	—	$	10,187	$	—
Liabilities
Other liabilities (Interest rate contracts)	$	10,187	$	—	$	10,187	$	—

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

Financial Assets Accounted For Fair Value On Nonrecurring Basis

The following tables set forth the Company's assets that were measured using fair value estimates on a nonrecurring basis at September 30, 2013 and 2012.

	Fair value at September 30, 2013		Fair Value Measurements at Reporting Date Using						Losses During the Three Months Ended September 30, 2013			Losses During the Nine Months Ended September 30, 2013
			Level 1		Level 2		Level 3
	(in thousands)
Noncovered OREO	$	3,714	$	—	$	—	$	3,714	$	(1,040	)	$	(1,084	)
Covered OREO	544		—		—		544		(183		)	(248		)
	$	4,258	$	—	$	—	$	4,258	$	(1,223	)	$	(1,332	)

	Fair value at September 30, 2012		Fair Value Measurements at Reporting Date Using						Gains (Losses) During the Three Months Ended September 30, 2012			Losses During the Nine Months Ended September 30, 2012
			Level 1		Level 2		Level 3
	(in thousands)
Impaired loans	$	6,094	$	—	$	—	$	6,094	$	509		$	(3,377	)
Noncovered OREO	1,807		—		—		1,807		(458		)	(3,117		)
Covered OREO	1,021		—		—		1,021		(481		)	(1,025		)
Noncovered OPPO	—		—		—		—		—			(1,990		)
	$	8,922	$	—	$	—	$	8,922	$	(430	)	$	(9,509	)

Fair Value, by Balance Sheet Grouping

The following tables summarize carrying amounts and estimated fair values of selected financial instruments as well as assumptions used by the Company in estimating fair value at September 30, 2013 and December 31, 2012:

	September 30, 2013
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
	(in thousands)
Assets
Cash and due from banks	$	200,282	$	200,282	$	200,282	$	—	$	—
Interest-earning deposits with banks	54,470		54,470		54,470		—		—
Securities available for sale	1,569,651		1,569,651		20,417		1,549,234		—
FHLB stock	32,833		32,833		—		32,833		—
Loans held for sale	840		840		—		840		—
Loans	4,440,048		4,397,456		—		—		4,397,456
FDIC loss-sharing asset	53,559		17,353		—		—		17,353
Interest rate contracts	10,187		10,187		—		10,187		—
Liabilities
Deposits	$	5,948,967	$	5,948,473	$	5,413,557	$	534,916	$	—
FHLB Advances	34,632		33,301		—		33,301		—
Repurchase agreements	25,000		26,207		—		26,207		—
Interest rate contracts	10,187		10,187		—		10,187		—

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

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

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

Fair Value Inputs, Assets, Quantitative Information

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

	Fair value at September 30, 2013		Valuation Technique	Unobservable Input	Range (Weighted Average) (1)
	(dollars in thousands)
Noncovered OREO	$	3,714	Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Covered OREO	544		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
(1) Discount applied to appraisal value, letter of intent to purchase, or stated value (in the case of accounts receivable and inventory).
(2) Quantitative disclosures are not provided for noncovered OREO and covered OREO because there were no adjustments made to the appraisal value during the current period.

	Fair value at September 30, 2012		Valuation Technique	Unobservable Input	Range (Weighted Average) (1)
	(dollars in thousands)
Impaired loans - real estate collateral	$	4,148	Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Impaired loans - other collateral (3)	1,946		Fair Market Value of Collateral	Adjustment to Stated value	0% - 70% (27%)
Noncovered OREO	1,807		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Covered OREO	1,021		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Noncovered OPPO	—		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
(1) Discount applied to appraisal value, letter of intent to purchase, or stated value (in the case of accounts receivable and inventory).
(2) Quantitative disclosures are not provided for impaired loans collateralized by real estate, noncovered OREO, covered OREO and noncovered OPPO because there were no adjustments made to the appraisal value during the current period.
(3) Other collateral consists of accounts receivable and inventory

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Securities (Schedule of Contractual Maturities of Investment Securities Available for Sale) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Available-for-sale Securities [Abstract]
Due within one year, Amortized Cost	$ 23,249
Due after one year through five years, Amortized Cost	278,538
Due after five years through ten years, Amortized Cost	463,423
Due after ten years, Amortized Cost	802,034
No stated maturity date, Amortized Cost Basis	5,279
Total investment securities available-for-sale, Amortized Cost	1,572,523
Due within one year, Fair Value	23,493
Due after one year through five years, Fair Value	278,715
Due after five years through ten years, Fair Value	459,080
Due after ten years, Fair Value	803,223
No stated maturity date, Fair Value	5,140
Total investment securities available-for-sale, Fair Value	$ 1,569,651

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Covered Assets and FDIC Loss-sharing Asset (Changes in Allowance for Covered Loans) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Provision for loan and lease losses			$ 3,581	$ 34,506
Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Beginning balance	26,135	31,784	30,056	4,944
Loans charged off	(5,006)	(977)	(10,031)	(2,574)
Recoveries	2,555	2,342	4,391	3,406
Provision for loan and lease losses	(947)	(3,992)	(1,679)	23,381
Ending balance	$ 22,737	$ 29,157	$ 22,737	$ 29,157

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Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Analysis of Credit Quality of Noncovered Loan Portfolio) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans, net	$ 4,440,048		$ 2,864,803
Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	4,193,732		2,525,710
Recorded Investment	4,193,732		2,525,710
Loans and Leases Receivable, Allowance	55,844	51,698	52,244	51,527	52,196	53,041
Loans, net	4,137,888		2,473,466
Pass [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,973,472		2,336,039
Special Mention [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	55,176		37,758
Substandard [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	164,932		151,913
Doubtful [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	152		0
Consumer Portfolio Segment [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	331,395		157,599
Loans and Leases Receivable, Allowance	2,519	2,455	2,437	2,166	2,049	2,719
Consumer Portfolio Segment [Member] | Pass [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	324,274		151,049
Consumer Portfolio Segment [Member] | Special Mention [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	331		75
Consumer Portfolio Segment [Member] | Substandard [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	6,789		6,475
Consumer Portfolio Segment [Member] | Doubtful [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Consumer Portfolio Segment [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1		0
Secured Loans [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,487,348		1,106,551
Loans and Leases Receivable, Allowance	34,110	30,572	27,270	25,962	26,505	24,745
Secured Loans [Member] | Pass [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,362,097		1,011,722
Secured Loans [Member] | Special Mention [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	38,018		29,222
Secured Loans [Member] | Substandard [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	87,232		65,607
Secured Loans [Member] | Doubtful [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Secured Loans [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1		0
Unsecured Loans [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	74,988		45,343
Loans and Leases Receivable, Allowance	1,060	821	753	768	772	689
Unsecured Loans [Member] | Pass [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	74,705		44,788
Unsecured Loans [Member] | Special Mention [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	23		26
Unsecured Loans [Member] | Substandard [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	260		529
Unsecured Loans [Member] | Doubtful [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Unsecured Loans [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
One-to-Four Family Residential [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	104,089		44,192
Loans and Leases Receivable, Allowance	1,341	672	694	565	673	654
One-to-Four Family Residential [Member] | Pass [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	94,947		40,346
One-to-Four Family Residential [Member] | Special Mention [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,687		406
One-to-Four Family Residential [Member] | Substandard [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	7,455		3,440
One-to-Four Family Residential [Member] | Doubtful [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
One-to-Four Family Residential [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Commercial Land [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	134,832		47,327
Loans and Leases Receivable, Allowance	548	691	460	422	270	488
Commercial Land [Member] | Pass [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	128,624		43,401
Commercial Land [Member] | Special Mention [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,140		0
Commercial Land [Member] | Substandard [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	4,068		3,926
Commercial Land [Member] | Doubtful [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Commercial Land [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Income Property Multifamily [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,140,455		614,812
Loans and Leases Receivable, Allowance	9,802	9,695	11,033	9,034	8,726	9,551
Income Property Multifamily [Member] | Pass [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,097,644		581,671
Income Property Multifamily [Member] | Special Mention [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	7,304		3,688
Income Property Multifamily [Member] | Substandard [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	35,357		29,453
Income Property Multifamily [Member] | Doubtful [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Income Property Multifamily [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	150		0
Owner Occupied [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	740,894		395,173
Loans and Leases Receivable, Allowance	4,688	4,515	6,362	8,331	9,037	9,606
Owner Occupied [Member] | Pass [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	721,373		357,063
Owner Occupied [Member] | Special Mention [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,521		1,848
Owner Occupied [Member] | Substandard [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	18,000		36,262
Owner Occupied [Member] | Doubtful [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Owner Occupied [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Land And Acquisition [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	12,240		18,496
Loans and Leases Receivable, Allowance	725	769	1,171	1,469	1,651	2,331
Land And Acquisition [Member] | Pass [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	8,003		12,741
Land And Acquisition [Member] | Special Mention [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	172		1,351
Land And Acquisition [Member] | Substandard [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	4,065		4,404
Land And Acquisition [Member] | Doubtful [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Land And Acquisition [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Residential Construction [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	40,387		31,664
Loans and Leases Receivable, Allowance	725	204	635	1,182	1,197	864
Residential Construction [Member] | Pass [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	34,950		28,705
Residential Construction [Member] | Special Mention [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,980		1,142
Residential Construction [Member] | Substandard [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,457		1,817
Residential Construction [Member] | Doubtful [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Residential Construction [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Income Property Multifamily Construction [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	88,040		28,342
Loans and Leases Receivable, Allowance	258	241	316	362	755	665
Income Property Multifamily Construction [Member] | Pass [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	87,791		28,342
Income Property Multifamily Construction [Member] | Special Mention [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Income Property Multifamily Construction [Member] | Substandard [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	249		0
Income Property Multifamily Construction [Member] | Doubtful [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Income Property Multifamily Construction [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Owner Occupied Construction [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	39,064		36,211
Loans and Leases Receivable, Allowance	68	80	102	91	68	35
Owner Occupied Construction [Member] | Pass [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	39,064		36,211
Owner Occupied Construction [Member] | Special Mention [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Owner Occupied Construction [Member] | Substandard [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Owner Occupied Construction [Member] | Doubtful [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Owner Occupied Construction [Member] | Unlikely to be Collected Financing Receivable [Member] | Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 0		$ 0

XML

Noncovered Loans (Analysis of Impaired Loans) (Details) (Noncovered Loans [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	$ 4,164,561		$ 4,164,561		$ 2,491,049
Recorded Investment of Loans Individually Measured for Specific Impairment	29,171		29,171		34,661
Recorded Investment	0		0		0
Unpaid Principal Balance	0		0		0
Related Allowance	0		0		0
Average Recorded Investment Impaired Loans	33,163	45,206	33,454	50,741
Interest Recognized on Impaired Loans	296	320	1,026	891
Income Property Multifamily Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	88,040		88,040		28,342
Recorded Investment of Loans Individually Measured for Specific Impairment	0		0		0
Recorded Investment	0		0		0
Unpaid Principal Balance	0		0		0
Related Allowance	0		0		0
Average Recorded Investment Impaired Loans	0	1,877	0	3,961
Interest Recognized on Impaired Loans	0	0	0	0
Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	331,273		331,273		157,472
Recorded Investment of Loans Individually Measured for Specific Impairment	122		122		127
Average Recorded Investment Impaired Loans	423	1,045	275	1,359
Interest Recognized on Impaired Loans	2	11	5	33
Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	40,387		40,387		29,707
Recorded Investment of Loans Individually Measured for Specific Impairment	0		0		1,957
Recorded Investment	0		0		0
Unpaid Principal Balance	0		0		0
Related Allowance	0		0		0
Average Recorded Investment Impaired Loans	0	2,792	526	3,539
Interest Recognized on Impaired Loans	0	12	0	17
Land And Acquisition [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	9,744		9,744		15,677
Recorded Investment of Loans Individually Measured for Specific Impairment	2,496		2,496		2,819
Recorded Investment	115		115		0
Unpaid Principal Balance	114		114		0
Related Allowance	73		73		0
Average Recorded Investment Impaired Loans	2,889	3,213	2,794	4,876
Interest Recognized on Impaired Loans	1	0	4	0
Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	730,787		730,787		383,269
Recorded Investment of Loans Individually Measured for Specific Impairment	10,107		10,107		11,904
Recorded Investment	601		601		608
Unpaid Principal Balance	599		599		610
Related Allowance	26		26		38
Average Recorded Investment Impaired Loans	9,822	13,185	10,721	13,668
Interest Recognized on Impaired Loans	231	244	740	762
Owner Occupied Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	39,064		39,064		36,211
Recorded Investment of Loans Individually Measured for Specific Impairment	0		0		0
Recorded Investment	0		0		0
Unpaid Principal Balance	0		0		0
Related Allowance	0		0		0
Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	1,131,432		1,131,432		606,656
Recorded Investment of Loans Individually Measured for Specific Impairment	9,023		9,023		8,156
Recorded Investment	0		0		2,670
Unpaid Principal Balance	0		0		2,727
Related Allowance	0		0		1,040
Average Recorded Investment Impaired Loans	10,358	7,577	9,534	7,830
Interest Recognized on Impaired Loans	22	55	168	60
Commercial Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	134,266		134,266		44,672
Recorded Investment of Loans Individually Measured for Specific Impairment	566		566		2,655
Recorded Investment	0		0		0
Unpaid Principal Balance	0		0		0
Related Allowance	0		0		0
Average Recorded Investment Impaired Loans	1,456	3,079	2,085	3,242
Interest Recognized on Impaired Loans	48	0	48	0
One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	102,547		102,547		42,103
Recorded Investment of Loans Individually Measured for Specific Impairment	1,542		1,542		2,089
Recorded Investment	335		335		345
Unpaid Principal Balance	358		358		364
Related Allowance	103		103		112
Average Recorded Investment Impaired Loans	1,537	2,014	1,677	2,140
Interest Recognized on Impaired Loans	16	(9)	47	0
Unsecured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	74,945		74,945		45,251
Recorded Investment of Loans Individually Measured for Specific Impairment	43		43		92
Recorded Investment	43		43		92
Unpaid Principal Balance	43		43		92
Related Allowance	43		43		92
Average Recorded Investment Impaired Loans	47	118	68	118
Interest Recognized on Impaired Loans	1	1	2	5
Secured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment of Loans Collectively Measured for Contingency Provision	1,482,076		1,482,076		1,101,689
Recorded Investment of Loans Individually Measured for Specific Impairment	5,272		5,272		4,862
Recorded Investment	573		573		690
Unpaid Principal Balance	637		637		1,994
Related Allowance	241		241		113
Average Recorded Investment Impaired Loans	6,631	10,306	5,774	10,008
Interest Recognized on Impaired Loans	(25)	6	12	14
ERROR in label resolution.
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	1,667		1,667		4,405
Unpaid Principal Balance	1,751		1,751		5,787
Related Allowance	486		486		1,395
Impaired Loans Without Recorded Allowance [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	27,504		27,504		30,256
Unpaid Principal Balance	38,722		38,722		44,410
Impaired Loans Without Recorded Allowance [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	122		122		127
Unpaid Principal Balance	121		121		127
Impaired Loans Without Recorded Allowance [Member] | Income Property Multifamily Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	0		0		0
Unpaid Principal Balance	0		0		0
Impaired Loans Without Recorded Allowance [Member] | Residential Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	0		0		1,957
Unpaid Principal Balance	0		0		2,570
Impaired Loans Without Recorded Allowance [Member] | Land And Acquisition [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	2,381		2,381		2,819
Unpaid Principal Balance	3,149		3,149		4,813
Impaired Loans Without Recorded Allowance [Member] | Owner Occupied [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	9,507		9,507		11,296
Unpaid Principal Balance	13,207		13,207		14,642
Impaired Loans Without Recorded Allowance [Member] | Owner Occupied Construction [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	0		0		0
Unpaid Principal Balance	0		0		0
Impaired Loans Without Recorded Allowance [Member] | Income Property Multifamily [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	9,023		9,023		5,486
Unpaid Principal Balance	13,319		13,319		7,860
Impaired Loans Without Recorded Allowance [Member] | Commercial Land [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	566		566		2,655
Unpaid Principal Balance	899		899		5,727
Impaired Loans Without Recorded Allowance [Member] | One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	1,207		1,207		1,744
Unpaid Principal Balance	2,127		2,127		1,902
Impaired Loans Without Recorded Allowance [Member] | Unsecured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	0		0		0
Unpaid Principal Balance	0		0		0
Impaired Loans Without Recorded Allowance [Member] | Secured Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Recorded Investment	4,698		4,698		4,172
Unpaid Principal Balance	$ 5,900		$ 5,900		$ 6,769

XML

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Securities available-for-sale, amortized cost	$ 1,572,523	$ 969,359
Less: Unearned income on loans	(75,293)	(7,767)
Other real estate owned covered by FDIC loss share	36,273	26,987
Common stock, par value
Common stock, shares authorized	63,033	63,033
Common stock, shares outstanding	51,271	39,686
Covered Loans [Member]
Allowance for losses on covered loans	(22,737)	(30,056)
Other real estate owned covered by FDIC loss share	$ 12,730	$ 16,311

XML

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

9 Months Ended

Sep. 30, 2013

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

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

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

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

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

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

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

The general valuation allowance is systematically calculated quarterly using quantitative and qualitative information about specific loan classes. The minimum required level an entity develops a methodology to determine its allowance for loan and lease losses is by general categories of loans, such as commercial business, real estate, and consumer. However, the Company’s methodology in determining its allowance for loan and lease losses is prepared in a more detailed manner at the loan class level, utilizing specific categories such as commercial business secured, commercial business unsecured, real estate commercial land, and real estate income property multifamily.

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

The $4.3 million provision expense reflects a change in estimate for the allowance for loan losses for loans acquired in the West Coast Bank transaction. The change was the result of moving from the initial fair value accounting for those loans, which included a net loan discount of $88.8 million, to our standard allowance methodology. Our standard allowance methodology takes into account the $19.7 million in net loan discount accretion recorded in earnings subsequent to the acquisition. The provision resulted in a $2.8 million reduction to net income and reduced earnings per diluted common share by $0.05 and $0.06 for the current quarter and year-to-date period, respectively.

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

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

We have used the same methodology for ALLL calculations during the nine months ended September 30, 2013 and 2012. Adjustments to the percentages of the ALLL allocated to loan categories are made based on trends with respect to delinquencies and problem loans within each class of loans. The Company reviews the ALLL quantitative and qualitative methodology on a quarterly basis and makes adjustments when appropriate. The Company continues to strive towards maintaining a conservative approach to credit quality and will continue to prudently adjust our ALLL as necessary in order to maintain adequate reserves. The Company carefully monitors the loan portfolio and continues to emphasize the importance of credit quality.

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

The following tables show a detailed analysis of the allowance for loan and lease losses for noncovered loans for the three and nine months ended September 30, 2013 and 2012:

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended September 30, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	30,572	$	(392	)	$	743	$	3,187		$	34,110	$	241	$	33,869
Unsecured	821		(363		)	111		491			1,060		43		1,017
Real estate:
One-to-four family residential	672		(47		)	39		677			1,341		103		1,238
Commercial & multifamily residential
Commercial land	691		(9		)	126		(260		)	548		—		548
Income property	9,695		(132		)	154		85			9,802		—		9,802
Owner occupied	4,515		(516		)	52		637			4,688		26		4,662
Real estate construction:
One-to-four family residential
Land and acquisition	769		—			366		(410		)	725		73		652
Residential construction	204		—			95		426			725		—		725
Commercial & multifamily residential
Income property	241		—			—		17			258		—		258
Owner occupied	80		—			—		(12		)	68		—		68
Consumer	2,455		(453		)	112		405			2,519		—		2,519
Unallocated	983		—			—		(983		)	—		—		—
Total	$	51,698	$	(1,912	)	$	1,798	$	4,260		$	55,844	$	486	$	55,358
	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Nine months ended September 30, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	27,270	$	(2,236	)	$	1,135	$	7,941		$	34,110	$	241	$	33,869
Unsecured	753		(794		)	184		917			1,060		43		1,017
Real estate:
One-to-four family residential	694		(191		)	180		658			1,341		103		1,238
Commercial & multifamily residential
Commercial land	460		(20		)	153		(45		)	548		—		548
Income property	11,033		(950		)	260		(541		)	9,802		—		9,802
Owner occupied	6,362		(1,084		)	96		(686		)	4,688		26		4,662
Real estate construction:
One-to-four family residential
Land and acquisition	1,171		(32		)	2,541		(2,955		)	725		73		652
Residential construction	635		(101		)	108		83			725		—		725
Commercial & multifamily residential
Income property	316		—			—		(58		)	258		—		258
Owner occupied	102		—			—		(34		)	68		—		68
Consumer	2,437		(1,262		)	353		991			2,519		—		2,519
Unallocated	1,011		—			—		(1,011		)	—		—		—
Total	$	52,244	$	(6,670	)	$	5,010	$	5,260		$	55,844	$	486	$	55,358

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended September 30, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	26,505	$	(3,744	)	$	194	$	3,007		$	25,962	$	315	$	25,647
Unsecured	772		(31		)	83		(56		)	768		100		668
Real estate:
One-to-four family residential	673		(49		)	157		(216		)	565		69		496
Commercial & multifamily residential
Commercial land	270		(55		)	—		207			422		1		421
Income property	8,726		(436		)	357		387			9,034		—		9,034
Owner occupied	9,037		(101		)	89		(694		)	8,331		245		8,086
Real estate construction:
One-to-four family residential
Land and acquisition	1,651		(307		)	404		(279		)	1,469		—		1,469
Residential construction	1,197		(18		)	—		3			1,182		—		1,182
Commercial & multifamily residential
Income property	755		—			63		(456		)	362		—		362
Owner occupied	68		—			—		23			91		—		91
Consumer	2,049		(500		)	350		267			2,166		—		2,166
Unallocated	493		—			—		682			1,175		—		1,175
Total	$	52,196	$	(5,241	)	$	1,697	$	2,875		$	51,527	$	730	$	50,797
	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Nine months ended September 30, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	24,745	$	(8,126	)	$	1,184	$	8,159		$	25,962	$	315	$	25,647
Unsecured	689		(52		)	130		1			768		100		668
Real estate:
One-to-four family residential	654		(499		)	202		208			565		69		496
Commercial & multifamily residential
Commercial land	488		(437		)	—		371			422		1		421
Income property	9,551		(3,959		)	710		2,732			9,034		—		9,034
Owner occupied	9,606		(712		)	628		(1,191		)	8,331		245		8,086
Real estate construction:
One-to-four family residential
Land and acquisition	2,331		(809		)	827		(880		)	1,469		—		1,469
Residential construction	864		(617		)	79		856			1,182		—		1,182
Commercial & multifamily residential
Income property	665		(93		)	64		(274		)	362		—		362
Owner occupied	35		—			—		56			91		—		91
Consumer	2,719		(1,968		)	809		606			2,166		—		2,166
Unallocated	694		—			—		481			1,175		—		1,175
Total	$	53,041	$	(17,272	)	$	4,633	$	11,125		$	51,527	$	730	$	50,797

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(in thousands)
Balance at beginning of period	$	2,465	$	1,665	$	1,915	$	1,535
Net changes in the allowance for unfunded commitments and letters of credit	200		250		750		380
Balance at end of period	$	2,665	$	1,915	$	2,665	$	1,915

Risk Elements

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

Risk ratings are reviewed and updated whenever appropriate, with more periodic reviews as the risk and dollar value of loss on the loan increases. In the event full collection of principal and interest is not reasonably assured, the loan is appropriately downgraded and, if warranted, placed on nonaccrual status even though the loan may be current as to principal and interest payments. Additionally, we assess whether an impairment of a loan warrants specific reserves or a write-down of the loan.

Pass loans are generally considered to have sufficient sources of repayment in order to repay the loan in full in accordance with all terms and conditions. Special mention loans have potential weaknesses that, if left uncorrected, may result in deterioration of the repayment prospects for the asset or in the Company's credit position at some future date. Loans with a risk rating of Substandard or worse are reported as classified loans in our allowance for loan and lease losses analysis. We review these loans to assess the ability of our borrowers to service all interest and principal obligations and, as a result, the risk rating may be adjusted accordingly. Substandard loans reflect loans where a loss is possible if loan weaknesses are not corrected. Doubtful loans have a high probability of loss, however, the amount of loss has not yet been determined. Loss loans are considered uncollectable and when identified, are charged off.

The following is an analysis of the credit quality of our noncovered loan portfolio as of September 30, 2013 and December 31, 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
September 30, 2013	(in thousands)
Noncovered loans:
Commercial business:
Secured	$	1,362,097	$	38,018	$	87,232	$	—	$	1	$	1,487,348
Unsecured	74,705		23		260		—		—		74,988
Real estate:
One-to-four family residential	94,947		1,687		7,455		—		—		104,089
Commercial and multifamily residential:
Commercial land	128,624		2,140		4,068		—		—		134,832
Income property	1,097,644		7,304		35,357		—		150		1,140,455
Owner occupied	721,373		1,521		18,000		—		—		740,894
Real estate construction:
One-to-four family residential:
Land and acquisition	8,003		172		4,065		—		—		12,240
Residential construction	34,950		3,980		1,457		—		—		40,387
Commercial and multifamily residential:
Income property	87,791		—		249		—		—		88,040
Owner occupied	39,064		—		—		—		—		39,064
Consumer	324,274		331		6,789		—		1		331,395
Total	$	3,973,472	$	55,176	$	164,932	$	—	$	152	4,193,732
Less:
Allowance for loan and lease losses											55,844
Noncovered loans, net											$	4,137,888

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

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Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Interest Income
Loans	$ 74,125	$ 52,600	$ 196,990	$ 168,875
Taxable securities	4,935	4,218	14,059	14,414
Tax-exempt securities	2,483	2,422	7,289	7,442
Federal funds sold and deposits in banks	56	229	290	564
Total interest income	81,599	59,469	218,628	191,295
Interest Expense
Deposits	929	1,339	3,072	4,679
Federal Home Loan Bank advances	135	745	(493)	2,229
Prepayment charge on Federal Home Loan Bank advances	0	0	1,548	0
Other borrowings	120	120	615	358
Total interest expense	1,184	2,204	4,742	7,266
Net Interest Income	80,415	57,265	213,886	184,029
Provision for loan and lease losses			3,581	34,506
Net interest income after provision for loan and lease losses	77,102	58,382	210,305	149,523
Noninterest Income (Loss)
Service charges and other fees	13,357	7,609	34,511	22,222
Merchant services fees	2,070	2,054	5,934	6,167
Investment securities gains, net	0	0	462	62
Bank owned life insurance	904	747	2,610	2,177
Change in FDIC loss sharing asset	(11,826)	(12,951)	(35,446)	(14,787)
Other	3,117	1,630	8,017	4,650
Total noninterest income (loss)	7,622	(911)	16,088	20,491
Noninterest Expense
Compensation and employee benefits	33,287	21,523	90,597	64,484
Occupancy	9,264	4,886	21,560	15,310
Merchant processing	951	921	2,660	2,724
Advertising and promotion	1,165	1,341	3,195	3,342
Data processing and communications	4,285	2,499	10,503	7,263
Legal and professional fees	2,421	2,783	9,975	6,221
Taxes, licenses and fees	1,446	1,124	4,037	3,594
Regulatory premiums	1,372	775	3,406	2,560
Net cost (benefit) of operation of other real estate owned	(777)	(1,069)	(6,106)	(536)
Amortization of intangibles	1,666	1,093	4,388	3,362
FDIC clawback liability expense (recovery)	(188)	334	242	100
Other	9,822	4,726	22,810	16,689
Total noninterest expense	64,714	40,936	167,267	125,113
Income before income taxes	20,010	16,535	59,126	44,901
Income tax provision	6,734	4,655	19,083	12,220
Net Income	13,276	11,880	40,043	32,681
Earnings per common share
Basic ($ per share)	$ 0.26	$ 0.30	$ 0.84	$ 0.82
Diluted ($ per share)	$ 0.25	$ 0.30	$ 0.83	$ 0.82
Dividends paid per common share	$ 0.10	$ 0.30	$ 0.30	$ 0.89
Weighted average number of common shares outstanding	50,834	39,289	47,032	39,248
Weighted average number of diluted common shares outstanding	52,297	39,291	47,947	39,251
Noncovered Loans [Member]
Interest Expense
Provision for loan and lease losses	4,260	2,875	5,260	11,125
Covered Loans [Member]
Interest Expense
Provision for loan and lease losses	$ (947)	$ (3,992)	$ (1,679)	$ 23,381

XML

Covered Assets and FDIC Loss-sharing Asset Covered Loans - Credit Quality Indicator (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Net Reported Amount	$ 4,440,048		$ 2,864,803
Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	374,342		500,794
Valuation discount on covered loans	49,445		79,401
Loans and Leases Receivable, Allowance	22,737	26,135	30,056	29,157	31,784	4,944
Loans and Leases Receivable, Net Reported Amount	302,160		391,337
Covered Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	286,795		356,520
Covered Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	12,188		11,003
Covered Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	75,332		133,271
Covered Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	27		0
Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Real Estate Portfolio Segment [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	226,600		290,256
Real Estate Construction Portfolio Segment [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	23,164		40,649
Consumer Portfolio Segment [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	37,212		44,516
Consumer Portfolio Segment [Member] | Covered Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	33,421		38,973
Consumer Portfolio Segment [Member] | Covered Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	35		381
Consumer Portfolio Segment [Member] | Covered Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,729		5,162
Consumer Portfolio Segment [Member] | Covered Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	27		0
Consumer Portfolio Segment [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Secured Loans [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	83,857		118,594
Secured Loans [Member] | Covered Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	56,973		71,621
Secured Loans [Member] | Covered Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,859		1,823
Secured Loans [Member] | Covered Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	24,025		45,150
Secured Loans [Member] | Covered Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Secured Loans [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Unsecured Loans [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,509		6,779
Unsecured Loans [Member] | Covered Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,018		4,988
Unsecured Loans [Member] | Covered Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	396		0
Unsecured Loans [Member] | Covered Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	95		1,791
Unsecured Loans [Member] | Covered Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Unsecured Loans [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
One-to-Four Family Residential [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	44,966		57,150
One-to-Four Family Residential [Member] | Covered Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	36,419		44,782
One-to-Four Family Residential [Member] | Covered Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,854		1,344
One-to-Four Family Residential [Member] | Covered Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	6,693		11,024
One-to-Four Family Residential [Member] | Covered Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
One-to-Four Family Residential [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Commercial Land [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	19,979		26,628
Commercial Land [Member] | Covered Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	11,978		16,336
Commercial Land [Member] | Covered Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	205		0
Commercial Land [Member] | Covered Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	7,796		10,292
Commercial Land [Member] | Covered Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Commercial Land [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Income Property Multifamily [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	75,609		105,384
Income Property Multifamily [Member] | Covered Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	59,736		81,205
Income Property Multifamily [Member] | Covered Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,966		864
Income Property Multifamily [Member] | Covered Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	11,907		23,315
Income Property Multifamily [Member] | Covered Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Income Property Multifamily [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Owner Occupied [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	86,046		101,094
Owner Occupied [Member] | Covered Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	73,045		82,222
Owner Occupied [Member] | Covered Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	114		3,318
Owner Occupied [Member] | Covered Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	12,887		15,554
Owner Occupied [Member] | Covered Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Owner Occupied [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Land And Acquisition [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	9,845		13,833
Land And Acquisition [Member] | Covered Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	4,688		4,817
Land And Acquisition [Member] | Covered Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,759		3,273
Land And Acquisition [Member] | Covered Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,398		5,743
Land And Acquisition [Member] | Covered Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Land And Acquisition [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Residential Construction [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	6,173		11,565
Residential Construction [Member] | Covered Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	2,587		6,050
Residential Construction [Member] | Covered Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Residential Construction [Member] | Covered Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,586		5,515
Residential Construction [Member] | Covered Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Residential Construction [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Income Property Multifamily Construction [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	5,783		12,320
Income Property Multifamily Construction [Member] | Covered Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	3,847		4,419
Income Property Multifamily Construction [Member] | Covered Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Income Property Multifamily Construction [Member] | Covered Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,936		7,901
Income Property Multifamily Construction [Member] | Covered Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Income Property Multifamily Construction [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Owner Occupied Construction [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,363		2,931
Owner Occupied Construction [Member] | Covered Loans [Member] | Pass [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	1,083		1,107
Owner Occupied Construction [Member] | Covered Loans [Member] | Special Mention [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Owner Occupied Construction [Member] | Covered Loans [Member] | Substandard [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	280		1,824
Owner Occupied Construction [Member] | Covered Loans [Member] | Doubtful [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Owner Occupied Construction [Member] | Covered Loans [Member] | Unlikely to be Collected Financing Receivable [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	0		0
Commercial Portfolio Segment [Member] | Covered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Carrying Amount	$ 87,366		$ 125,373

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013		Dec. 31, 2012
ASSETS
Cash and due from banks	$ 200,282		$ 124,573
Interest-earning deposits with banks	54,470		389,353
Total cash and cash equivalents	254,752		513,926
Securities available for sale at fair value (amortized cost of $1,572,523 and $969,359, respectively)	1,569,651		1,001,665
Federal Home Loan Bank stock at cost	32,833		21,819
Loans held for sale	840		2,563
Loans, net	4,440,048		2,864,803
FDIC loss sharing asset	53,559		96,354
Interest receivable	24,114		14,268
Premises and equipment, net	158,375		118,708
Other real estate owned ($12,730 and $16,311 covered by FDIC loss share, respectively)	36,273		26,987
Goodwill	345,231		115,554
Intangible Assets, Net (Excluding Goodwill)	27,509		15,721
Other assets	207,112		113,967
Total Assets	7,150,297		4,906,335
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing	2,110,887		1,321,171
Interest-bearing	3,838,080		2,720,914
Total deposits	5,948,967		4,042,085
Federal Home Loan Bank advances	34,632		6,644
Securities sold under agreements to repurchase	25,000		25,000
Other liabilities	95,901		68,598
Total liabilities	6,104,500		4,142,327
Commitments and contingent liabilities
Preferred Stock, Shares Authorized	2,000		0
Preferred Stock, Shares Issued	9		0
Preferred Stock, Value, Issued	2,217		0
Shareholders' equity:
Authorized shares	63,033		63,033
Common Stock Shares Issued And Outstanding	51,271		39,686
Common Stock (no par value)	858,596		581,471
Retained earnings	188,192		162,388
Accumulated other comprehensive income	(3,208)	[1]	20,149	[1]
Total shareholders' equity	1,045,797		764,008
Total Liabilities and Shareholders' Equity	7,150,297		4,906,335
Noncovered Loans [Member]
ASSETS
Loans held for sale	840		2,563
Loans, excluding covered loans, net of unearned income of ($75,293) and ($7,767), respectively	4,193,732		2,525,710
Loans and Leases Receivable, Allowance	55,844		52,244
Loans, net	4,137,888		2,473,466
Other real estate owned ($12,730 and $16,311 covered by FDIC loss share, respectively)	23,543		10,676
Covered Loans [Member]
ASSETS
Loans and Leases Receivable, Allowance	22,737		30,056
Loans, net	302,160		391,337
Other real estate owned ($12,730 and $16,311 covered by FDIC loss share, respectively)	$ 12,730		$ 16,311

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

XML

Changes in Noncovered Other Real Estate Owned (Summary of Noncovered Other Real Estate Owned) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Other Real Estate Owned [Line Items]
Balance, beginning of period			$ 26,987
Proceeds from sale of OREO property			(10,779)	(15,069)
Gain (loss) on sale of OREO			8,745	8,604
Total OREO, end of period	36,273		36,273
Noncovered Loans [Member]
Other Real Estate Owned [Line Items]
Balance, beginning of period	24,339	13,925	10,676	22,893
Transfers in, net of write-downs ($48, $24, $90 and $24)	4,413	139	9,190	6,527
Transfers in, write-downs	48	24
OREO improvements	0	0	0	11
Additional OREO write-down	(1,066)	(458)	(1,636)	(4,232)
Proceeds from sale of OREO property	(4,673)	(3,170)	(10,295)	(15,069)
Gain (loss) on sale of OREO	530	439	900	745
Total OREO, end of period	$ 23,543	$ 10,875	$ 23,543	$ 10,875

XML

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill and Intangible Assets

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Goodwill
Goodwill at beginning of period (1)	$	345,231		$	115,554		$	115,554		$	115,554
Established through acquisitions	—			—			229,677			—
Goodwill at end of period	345,231			115,554			345,231			115,554
Other intangible assets, net
Core deposit intangible:
Gross core deposit intangible balance at beginning of period	47,698			32,441			32,441			32,441
Accumulated amortization at beginning of period	(19,441		)	(14,545		)	(16,720		)	(12,275		)
Core deposit intangible, net at beginning of period	28,257			17,896			15,721			20,166
Established through acquisitions	—			—			15,257			—
CDI current period amortization	(1,667		)	(1,093		)	(4,388		)	(3,363		)
Total core deposit intangible, net at end of period	26,590			16,803			26,590			16,803
Intangible assets not subject to amortization	919			—			919			—
Other intangible assets, net at end of period	27,509			16,803			27,509			16,803
Total goodwill and other intangible assets at end of period	$	372,740		$	132,357		$	372,740		$	132,357

Estimated Future Amortization Expense of Core Deposit Intangibles

______________

(1) Goodwill at beginning of period has been retrospectively adjusted for the three months ended September 30, 2013 due to adjustments to provisional amounts made related to the West Coast acquisition. See Note 3 to the Consolidated Financial Statements of this report for more information regarding this acquisition.

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

	Amount
	(in thousands)
Year ending December 31,
2013	$	1,657
2014	5,963
2015	4,934
2016	4,195
2017	3,361

XML

Accounting Pronouncements Recently Issued Adoption of new accounting guidance, impacts (Tables)

9 Months Ended

Sep. 30, 2013

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

As a result of the adoption of the ASU, an additional $9.9 million of indemnification asset amortization was recorded during the nine months ending September 30, 2013, resulting in a reduction of $6.4 million in net income and $0.13 in diluted earnings per share.

XML

Noncovered Loans (Analysis of the Aged Loan Portfolio) (Details) (Noncovered Loans [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	$ 4,128,467	$ 2,476,797
30 - 59 Days Past Due	23,351	9,168
60 - 89 Days Past Due	5,951	2,350
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	2	0
Total Past Due	29,304	11,518
Nonaccrual Loans	35,961	37,395
Loans Receivable, Net	4,193,732	2,525,710
Consumer Portfolio Segment [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	325,614	155,207
30 - 59 Days Past Due	1,375	387
60 - 89 Days Past Due	369	362
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	1	0
Total Past Due	1,745	749
Nonaccrual Loans	4,036	1,643
Loans Receivable, Net	331,395	157,599
Secured Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	1,465,682	1,091,770
30 - 59 Days Past Due	6,520	4,259
60 - 89 Days Past Due	3,306	1,485
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	1	0
Total Past Due	9,827	5,744
Nonaccrual Loans	11,839	9,037
Loans Receivable, Net	1,487,348	1,106,551
Unsecured Loans [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	74,756	44,817
30 - 59 Days Past Due	72	252
60 - 89 Days Past Due	4	12
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	0	0
Total Past Due	76	264
Nonaccrual Loans	156	262
Loans Receivable, Net	74,988	45,343
One-to-Four Family Residential [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	99,413	41,508
30 - 59 Days Past Due	2,232	193
60 - 89 Days Past Due	224	142
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	0	0
Total Past Due	2,456	335
Nonaccrual Loans	2,220	2,349
Loans Receivable, Net	104,089	44,192
Commercial Land [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	133,942	42,818
30 - 59 Days Past Due	0	311
60 - 89 Days Past Due	0	122
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	0	0
Total Past Due	0	433
Nonaccrual Loans	890	4,076
Loans Receivable, Net	134,832	47,327
Income Property Multifamily [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	1,125,012	603,339
30 - 59 Days Past Due	7,687	2,726
60 - 89 Days Past Due	0	227
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	0	0
Total Past Due	7,687	2,953
Nonaccrual Loans	7,756	8,520
Loans Receivable, Net	1,140,455	614,812
Owner Occupied Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	39,064	36,211
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	0	0
Total Past Due	0	0
Nonaccrual Loans	0	0
Loans Receivable, Net	39,064	36,211
Owner Occupied [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	728,002	387,525
30 - 59 Days Past Due	5,465	1,040
60 - 89 Days Past Due	2,048	0
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	0	0
Total Past Due	7,513	1,040
Nonaccrual Loans	5,379	6,608
Loans Receivable, Net	740,894	395,173
Land And Acquisition [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	9,014	15,412
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	0	0
Total Past Due	0	0
Nonaccrual Loans	3,226	3,084
Loans Receivable, Net	12,240	18,496
Residential Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	39,928	29,848
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	0	0
Total Past Due	0	0
Nonaccrual Loans	459	1,816
Loans Receivable, Net	40,387	31,664
Income Property Multifamily Construction [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current Loans	88,040	28,342
30 - 59 Days Past Due	0	0
60 - 89 Days Past Due	0	0
Financing Receivable, Recorded Investment, Equal to Greater than 90 Days Past Due	0	0
Total Past Due	0	0
Nonaccrual Loans	0	0
Loans Receivable, Net	$ 88,040	$ 28,342

XML

Covered Assets and FDIC Loss-sharing Asset (Changes in Accretable Yield for Acquired Loans) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Covered Assets And FDIC Loss Sharing Asset
Balance at beginning of period	$ 140,511	$ 214,061	$ 166,888	$ 259,669
Accretion	(12,243)	(19,571)	(40,240)	(69,045)
Disposals	(5,772)	(3,146)	(621)	(8,218)
Reclassifications (to) from nonaccretable difference	(3,013)	(2,861)	(6,544)	6,077
Balance at end of period	$ 119,483	$ 188,483	$ 119,483	$ 188,483

XML

Fair Value Accounting and Measurement (Financial Assets And Liabilities Accounted for Fair Value On Recurring Basis) (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 1,569,651	$ 1,001,665
Fair Value, Level 2 to level 1 Transfers, Amount	0
Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	1,569,651	1,001,665
Other assets (Interest rate contracts)	10,187	14,921
Other liabilities (Interest rate contracts)	10,187	14,921
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	20,417	19,828
Other assets (Interest rate contracts)	0	0
Other liabilities (Interest rate contracts)	0	0
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	1,549,234	981,837
Other assets (Interest rate contracts)	10,187	14,921
Other liabilities (Interest rate contracts)	10,187	14,921
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Other assets (Interest rate contracts)	0	0
Other liabilities (Interest rate contracts)	0	0
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	861,669	572,369
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	861,669	572,369
U.S. Government Agency and Sponsored Enterprise Mortgage-Back Securities and Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
State and Municipal Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	354,895	285,575
State and Municipal Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
State and Municipal Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	354,895	285,575
State and Municipal Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
U.S. Government Agency [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	327,530	120,501
U.S. Government Agency [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
U.S. Government Agency [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	327,530	120,501
U.S. Government Agency [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
US Treasury Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	20,417	19,828
US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	20,417	19,828
US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
US Treasury Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Other Securities [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	5,140	3,392
Other Securities [Member] | Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	0	0
Other Securities [Member] | Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	5,140	3,392
Other Securities [Member] | Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available for sale	$ 0	$ 0

XML

Securities (Summary of Gross Unrealized Losses and Fair Value of the Investments with Unrealized Losses) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Debt Securities Gross Unrealized Gain, instant	$ (26,872)	$ (38,606)
Less than 12 Months Fair Value	799,158	254,666
Less than 12 Months Unrealized Losses	(25,125)	(5,923)
12 Months or More Fair Value	67,664	13,378
12 Months or More Unrealized Losses	(4,619)	(377)
Total Fair Value	866,822	268,044
Total Unrealized Losses	(29,744)	(6,300)
Available-for-sale Debt Securities, Gross Unrealized Loss, instant	(29,744)	(6,300)
U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Debt Securities Gross Unrealized Gain, instant	(12,538)	(16,719)
Less than 12 Months Fair Value	385,222	167,739
Less than 12 Months Unrealized Losses	(12,567)	(5,090)
12 Months or More Fair Value	64,044	12,204
12 Months or More Unrealized Losses	(4,430)	(336)
Total Fair Value	449,266	179,943
Total Unrealized Losses	(16,997)	(5,426)
Available-for-sale Debt Securities, Gross Unrealized Loss, instant	(16,997)	(5,426)
State and Municipal Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Debt Securities Gross Unrealized Gain, instant	(13,824)	(20,893)
Less than 12 Months Fair Value	101,176	20,413
Less than 12 Months Unrealized Losses	(2,935)	(383)
12 Months or More Fair Value	807	210
12 Months or More Unrealized Losses	(47)	(5)
Total Fair Value	101,983	20,623
Total Unrealized Losses	(2,982)	(388)
Available-for-sale Debt Securities, Gross Unrealized Loss, instant	(2,982)	(388)
US Government Corporations and Agencies Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Debt Securities Gross Unrealized Gain, instant	(483)	(851)
Less than 12 Months Fair Value	290,257	56,600
Less than 12 Months Unrealized Losses	(8,942)	(435)
12 Months or More Fair Value	0	0
12 Months or More Unrealized Losses	0	0
Total Fair Value	290,257	56,600
Total Unrealized Losses	(8,942)	(435)
Available-for-sale Debt Securities, Gross Unrealized Loss, instant	(8,942)	(435)
US Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Debt Securities Gross Unrealized Gain, instant	0	(39)
Less than 12 Months Fair Value	20,217	9,914
Less than 12 Months Unrealized Losses	(657)	(15)
12 Months or More Fair Value	0	0
12 Months or More Unrealized Losses	0	0
Total Fair Value	20,217	9,914
Total Unrealized Losses	(657)	(15)
Available-for-sale Debt Securities, Gross Unrealized Loss, instant	(657)	(15)
Other Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Debt Securities Gross Unrealized Gain, instant	(27)	(104)
Less than 12 Months Fair Value	2,286	0
Less than 12 Months Unrealized Losses	(24)	0
12 Months or More Fair Value	2,813	964
12 Months or More Unrealized Losses	(142)	(36)
Total Fair Value	5,099	964
Total Unrealized Losses	(166)	(36)
Available-for-sale Debt Securities, Gross Unrealized Loss, instant	$ (166)	$ (36)

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Business combinations (Details) (USD $)	3 Months Ended	9 Months Ended			0 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2012	Apr. 02, 2013	Apr. 02, 2013 West Coast Bancorp [Member]	Sep. 30, 2013 West Coast Bancorp [Member]	Sep. 30, 2012 West Coast Bancorp [Member]
Business Acquisition [Line Items]
Business Acquisition, Pro Forma Revenue						$ 252,392,000	$ 322,941,000
Business Acquisition, Effective Date of Acquisition					Apr. 01, 2013
business combination, provisional information, initial accounting incomplete, adjustment, other liabilities	1,800,000
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Intangibles	622,000
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Intangibles	1,100,000
Business Acquisition, Cost of Acquired Entity, Purchase Price					540,791,000
Business Acquisition, Purchase Price Allocation, Current Assets, Cash and Cash Equivalents					110,440,000
Business Acquisition, Purchase Price Allocation, Current Assets, Marketable Securities					730,842,000
Business Acquisition, Purchase Price Allocation, FHLB Stock					11,824,000
Business Combination, Acquired Receivables, Fair Value					1,407,798,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment					35,884,000
Business Acquisition, Purchase Price Allocation, Loans Covered By Loss Sharing					14,708,000
Business Acquisition, Percentage of Voting Interests Acquired				100.00%
Business Acquisition, Purchase Price Allocation, Goodwill Amount					229,677,000
Business Acquisition, Purchase Price Allocation, Amortizable Intangible Assets					15,257,000
Core deposit intangible acquired - percentage of core deposits acquired				0.89%
Business Acquisition, Purchase Price Allocation, Other Assets					76,088,000
Business Acquisition, Purchase Price Allocation, Liabilities, Deposits					(1,883,407,000)
Business Acquisition, Purchase Price Allocation, Federal Home Loan Bank Advances					(128,885,000)
Business Acquisition, Purchase Price Allocation, Junior Subordinated Debentures					(51,000,000)
Business Acquisition, Purchase Price Allocation, Other Noncurrent Liabilities					(28,435,000)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net					311,114,000
Business Acquisition, Pro Forma Net Income (Loss)		53,053,000	67,162,000
Business Acquisition, Pro Forma Earnings Per Share, Basic						$ 1.04	$ 1.29
Business Acquisition, Pro Forma Earnings Per Share, Diluted						$ 1.01	$ 1.29
Business Combination, Acquisition Related Costs						$ 17,600,000

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Securities (Securities Available for Sale) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 1,572,523	$ 969,359
Available-for-sale Securities, Gross Unrealized Gain, instant	26,872	38,606
Gross Unrealized Losses	29,744	6,300
Fair Value	1,569,651	1,001,665
U.S. Government Agency and Government-Sponsored Enterprise Mortgage-Backed Securities and Collateralized Mortgage Obligations [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	866,128	561,076
Available-for-sale Securities, Gross Unrealized Gain, instant	12,538	16,719
Gross Unrealized Losses	16,997	5,426
Fair Value	861,669	572,369
State and Municipal Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	344,053	265,070
Available-for-sale Securities, Gross Unrealized Gain, instant	13,824	20,893
Gross Unrealized Losses	2,982	388
Fair Value	354,895	285,575
U.S. Government and Government-Sponsored Enterprise Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	335,989	120,085
Available-for-sale Securities, Gross Unrealized Gain, instant	483	851
Gross Unrealized Losses	8,942	435
Fair Value	327,530	120,501
US Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	21,074	19,804
Available-for-sale Securities, Gross Unrealized Gain, instant	0	39
Gross Unrealized Losses	657	15
Fair Value	20,417	19,828
Other Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	5,279	3,324
Available-for-sale Securities, Gross Unrealized Gain, instant	27	104
Gross Unrealized Losses	166	36
Fair Value	$ 5,140	$ 3,392

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Noncovered Loans

9 Months Ended

Sep. 30, 2013

Noncovered Loans [Abstract]

Noncovered Loans

Noncovered Loans

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

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

	September 30, 2013			December 31, 2012
Noncovered loans:	(in thousands)
Commercial business	$	1,569,343		$	1,155,158
Real estate:
One-to-four family residential	106,686			43,922
Commercial and multifamily residential	2,048,910			1,061,201
Total real estate	2,155,596			1,105,123
Real estate construction:
One-to-four family residential	53,158			50,602
Commercial and multifamily residential	128,120			65,101
Total real estate construction	181,278			115,703
Consumer	362,808			157,493
Less: Net unearned income	(75,293		)	(7,767		)
Total noncovered loans, net of unearned income	4,193,732			2,525,710
Less: Allowance for loan and lease losses	(55,844		)	(52,244		)
Total noncovered loans, net	$	4,137,888		$	2,473,466
Loans held for sale	$	840		$	2,563

At September 30, 2013 and December 31, 2012, the Company had no material foreign activities. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington and Oregon.

The Company has granted loans to officers and directors of the Company and related interests. These loans are made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than the normal risk of collectability. The aggregate dollar amount of these loans was $14.1 million at September 30, 2013 and $14.2 million at December 31, 2012. During the first nine months of 2013, advances on related party loans totaled $1.9 million and repayments totaled $2.0 million.

At September 30, 2013 and December 31, 2012, $649.8 million and $443.4 million of commercial and residential real estate loans were pledged as collateral on Federal Home Loan Bank borrowings and additional borrowing capacity. The Company has also pledged $49.4 million and $13.8 million of commercial loans to the Federal Reserve Bank for additional borrowing capacity at September 30, 2013 and December 31, 2012, respectively.

The following is an analysis of noncovered, nonaccrual loans as of September 30, 2013 and December 31, 2012:

	September 30, 2013				December 31, 2012
	Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans		Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans
Noncovered loans:	(in thousands)
Commercial business
Secured	$	11,839	$	18,194	$	9,037	$	17,821
Unsecured	156		181		262		262
Real estate:
One-to-four family residential	2,220		4,058		2,349		2,672
Commercial & multifamily residential
Commercial land	890		1,299		4,076		7,491
Income property	7,756		11,560		8,520		10,815
Owner occupied	5,379		7,271		6,608		7,741
Real estate construction:
One-to-four family residential
Land and acquisition	3,226		8,134		3,084		6,704
Residential construction	459		1,941		1,816		2,431
Consumer	4,036		6,012		1,643		1,940
Total	$	35,961	$	58,650	$	37,395	$	57,877

The following is an aging of the recorded investment of the noncovered loan portfolio as of September 30, 2013 and December 31, 2012:

	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
September 30, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,465,682	$	6,520	$	3,306	$	1	$	9,827	$	11,839	$	1,487,348
Unsecured	74,756		72		4		—		76		156		74,988
Real estate:
One-to-four family residential	99,413		2,232		224		—		2,456		2,220		104,089
Commercial & multifamily residential
Commercial land	133,942		—		—		—		—		890		134,832
Income property	1,125,012		7,687		—		—		7,687		7,756		1,140,455
Owner occupied	728,002		5,465		2,048		—		7,513		5,379		740,894
Real estate construction:
One-to-four family residential
Land and acquisition	9,014		—		—		—		—		3,226		12,240
Residential construction	39,928		—		—		—		—		459		40,387
Commercial & multifamily residential
Income property	88,040		—		—		—		—		—		88,040
Owner occupied	39,064		—		—		—		—		—		39,064
Consumer	325,614		1,375		369		1		1,745		4,036		331,395
Total	$	4,128,467	$	23,351	$	5,951	$	2	$	29,304	$	35,961	$	4,193,732
	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,091,770	$	4,259	$	1,485	$	—	$	5,744	$	9,037	$	1,106,551
Unsecured	44,817		252		12		—		264		262		45,343
Real estate:
One-to-four family residential	41,508		193		142		—		335		2,349		44,192
Commercial & multifamily residential
Commercial land	42,818		311		122		—		433		4,076		47,327
Income property	603,339		2,726		227		—		2,953		8,520		614,812
Owner occupied	387,525		1,040		—		—		1,040		6,608		395,173
Real estate construction:
One-to-four family residential
Land and acquisition	15,412		—		—		—		—		3,084		18,496
Residential construction	29,848		—		—		—		—		1,816		31,664
Commercial & multifamily residential
Income property	28,342		—		—		—		—		—		28,342
Owner occupied	36,211		—		—		—		—		—		36,211
Consumer	155,207		387		362		—		749		1,643		157,599
Total	$	2,476,797	$	9,168	$	2,350	$	—	$	11,518	$	37,395	$	2,525,710

The following is an analysis of impaired loans as of September 30, 2013 and December 31, 2012:

	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
September 30, 2013	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,482,076	$	5,272	$	573	$	637	$	241	$	4,698	$	5,900
Unsecured	74,945		43		43		43		43		—		—
Real estate:
One-to-four family residential	102,547		1,542		335		358		103		1,207		2,127
Commercial & multifamily residential
Commercial land	134,266		566		—		—		—		566		899
Income property	1,131,432		9,023		—		—		—		9,023		13,319
Owner occupied	730,787		10,107		601		599		26		9,507		13,207
Real estate construction:
One-to-four family residential
Land and acquisition	9,744		2,496		115		114		73		2,381		3,149
Residential construction	40,387		—		—		—		—		—		—
Commercial & multifamily residential
Income property	88,040		—		—		—		—		—		—
Owner occupied	39,064		—		—		—		—		—		—
Consumer	331,273		122		—		—		—		122		121
Total	$	4,164,561	$	29,171	$	1,667	$	1,751	$	486	$	27,504	$	38,722
	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
December 31, 2012	(in thousands)
Noncovered loans:
Commercial business
Secured	$	1,101,689	$	4,862	$	690	$	1,994	$	113	$	4,172	$	6,769
Unsecured	45,251		92		92		92		92		—		—
Real estate:
One-to-four family residential	42,103		2,089		345		364		112		1,744		1,902
Commercial & multifamily residential
Commercial land	44,672		2,655		—		—		—		2,655		5,727
Income property	606,656		8,156		2,670		2,727		1,040		5,486		7,860
Owner occupied	383,269		11,904		608		610		38		11,296		14,642
Real estate construction:
One-to-four family residential
Land and acquisition	15,677		2,819		—		—		—		2,819		4,813
Residential construction	29,707		1,957		—		—		—		1,957		2,570
Commercial & multifamily residential
Income property	28,342		—		—		—		—		—		—
Owner occupied	36,211		—		—		—		—		—		—
Consumer	157,472		127		—		—		—		127		127
Total	$	2,491,049	$	34,661	$	4,405	$	5,787	$	1,395	$	30,256	$	44,410

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

	Three Months Ended September 30,										Nine Months Ended September 30,
	2013					2012					2013				2012
	Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans			Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans			Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans		Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans
Noncovered loans:	(in thousands)
Commercial business
Secured	$	6,631	$	(25	)	$	10,306	$	6		$	5,774	$	12	$	10,008	$	14
Unsecured	47		1			118		1			68		2		118		5
Real estate:
One-to-four family residential	1,537		16			2,014		(9		)	1,677		47		2,140		—
Commercial & multifamily residential
Commercial land	1,456		48			3,079		—			2,085		48		3,242		—
Income property	10,358		22			7,577		55			9,534		168		7,830		60
Owner occupied	9,822		231			13,185		244			10,721		740		13,668		762
Real estate construction:
One-to-four family residential
Land and acquisition	2,889		1			3,213		—			2,794		4		4,876		—
Residential construction	—		—			2,792		12			526		—		3,539		17
Commercial & multifamily residential
Income property	—		—			1,877		—			—		—		3,961		—
Consumer	423		2			1,045		11			275		5		1,359		33
Total	$	33,163	$	296		$	45,206	$	320		$	33,454	$	1,026	$	50,741	$	891

There were no Troubled Debt Restructurings ("TDR") during the three months ended September 30, 2013 or nine months ended September 30, 2012. The following is an analysis of loans classified as TDR during the nine months ended September 30, 2013:

	Nine months ended September 30, 2013
	Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Noncovered loans:	(dollars in thousands)
Commercial business:
Secured	1	$	343	$	343
Real estate:
Commercial and multifamily residential:
Commercial land	1	137		137
Income property	3	943		943
Owner occupied	1	172		172
Real estate construction:
One-to-four family residential:
Land and acquisition	1	117		117
Total	7	$	1,712	$	1,712

The Company's loans classified as TDR are loans that have been modified or the borrower has been granted special concessions due to financial difficulties that, if not for the challenges of the borrower, the Company would not otherwise consider. The Company had commitments to lend $1.7 million and $236 thousand of additional funds on loans classified as TDR as of September 30, 2013 and December 31, 2012, respectively. The TDR modifications or concessions are made to increase the likelihood that these borrowers with financial difficulties will be able to satisfy their debt obligations as amended. Credit losses for loans classified as TDR are measured on the same basis as impaired loans. For impaired loans, an allowance is established when the collateral value less selling costs (or discounted cash flows or observable market price) of the impaired loan is lower than the recorded investment of that loan.The Company did not have any loans modified as TDR within the past twelve months that have defaulted during the nine months ended September 30, 2013.

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Accumulated Other Comprehensive Income (Changes in AOCI by Component) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012	Sep. 30, 2013		Sep. 30, 2012
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	$ (9,210)	[1]		$ 20,149	[1]
Other comprehensive loss before reclassifications	5,943	[1]		(23,236)	[1]
Amounts reclassified from accumulated other comprehensive income (2)	59	[1],[2]		(121)	[1],[2]
Net current-period other comprehensive loss	6,002	[1]	2,644	(23,357)	[1]	3,345
Ending balance	(3,208)	[1]		(3,208)	[1]
Unrealized Gains and Losses on Available-for-Sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(7,804)	[1]		20,918	[1]
Other comprehensive loss before reclassifications	5,943	[1]		(22,480)	[1]
Amounts reclassified from accumulated other comprehensive income (2)	0	[1],[2]		(299)	[1],[2]
Net current-period other comprehensive loss	5,943	[1]		(22,779)	[1]
Ending balance	(1,861)	[1]		(1,861)	[1]
Unrealized Gains and Losses on Pension Plan Liability [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Beginning balance	(1,406)	[1]		(769)	[1]
Other comprehensive loss before reclassifications	0	[1]		(756)	[1]
Amounts reclassified from accumulated other comprehensive income (2)	59	[1],[2]		178	[1],[2]
Net current-period other comprehensive loss	59	[1]		(578)	[1]
Ending balance	$ (1,347)	[1]		$ (1,347)	[1]

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

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

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2013

Accumulated Other Comprehensive Income (Loss) [Abstract]

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

The following table shows changes in accumulated other comprehensive income (loss) by component for the three and nine month periods ended September 30, 2013:

	Unrealized Gains and Losses on Available-for-Sale Securities (1)			Unrealized Gains and Losses on Pension Plan Liability (1)			Total (1)
Three months ended September 30, 2013	(in thousands)
Beginning balance	$	(7,804	)	$	(1,406	)	$	(9,210	)
Other comprehensive loss before reclassifications	5,943			—			5,943
Amounts reclassified from accumulated other comprehensive income (2)	—			59			59
Net current-period other comprehensive loss	5,943			59			6,002
Ending balance	$	(1,861	)	$	(1,347	)	$	(3,208	)
Nine months ended September 30, 2013
Beginning balance	$	20,918		$	(769	)	$	20,149
Other comprehensive loss before reclassifications	(22,480		)	(756		)	(23,236		)
Amounts reclassified from accumulated other comprehensive income (2)	(299		)	178			(121		)
Net current-period other comprehensive loss	(22,779		)	(578		)	(23,357		)
Ending balance	$	(1,861	)	$	(1,347	)	$	(3,208	)

__________

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

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

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

The following table shows details regarding the reclassifications from accumulated other comprehensive income for the three and nine month periods ended September 30, 2013:

	Amount Reclassified from Accumulated Other Comprehensive Income						Affected line Item in the Consolidated Statement of Income
	Three Months Ended			Nine Months Ended
	September 30, 2013			September 30, 2013
	(in thousands)
Unrealized gains and losses on available-for-sale securities
	$	—		$	462		Investment securities gains, net
	—			462			Total before tax
	—			(163		)	Income tax provision
	$	—		$	299		Net of tax
Amortization of pension plan liability
Actuarial losses	$	(92	)	$	(276	)	Compensation and employee benefits
	(92		)	(276		)	Total before tax
	33			98			Income tax benefit
	$	(59	)	$	(178	)	Net of tax

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Noncovered Loans (Analysis of Loan Portfolio by Major Types of Loans) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Jun. 30, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Dec. 31, 2011
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Deferred Income	$ 75,293		$ 7,767
Loans, net	4,440,048		2,864,803
Loans held for sale	840		2,563
Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Deferred Income	75,293		7,767
Recorded Investment	4,193,732		2,525,710
Allowance for loan losses	55,844	51,698	52,244	51,527	52,196	53,041
Loans, net	4,137,888		2,473,466
Loans held for sale	840		2,563
One-to-Four Family Residential [Member] | Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Consumer, Mortgage	106,686		43,922
Loans and Leases Receivable, Gross, Consumer, Construction	53,158		50,602
Allowance for loan losses	1,341	672	694	565	673	654
Commercial and Multifamily Residential [Member] | Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Gross, Commercial, Mortgage	2,048,910		1,061,201
Loans Receivable, Gross, Commercial, Construction	128,120		65,101
Commercial Portfolio Segment [Member] | Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable, Gross, Commercial and Industrial	1,569,343		1,155,158
Real Estate Portfolio Segment [Member] | Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable Real Estate Mortgage	2,155,596		1,105,123
Real Estate Construction Portfolio Segment [Member] | Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans Receivable Real Estate Construction	181,278		115,703
Consumer Portfolio Segment [Member] | Noncovered Loans [Member]
Financing Receivable, Recorded Investment [Line Items]
Loans and Leases Receivable, Gross, Consumer	362,808		157,493
Allowance for loan losses	$ 2,519	$ 2,455	$ 2,437	$ 2,166	$ 2,049	$ 2,719

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Covered Assets and FDIC Loss-sharing Asset

9 Months Ended

Sep. 30, 2013

Covered Assets And FDIC Loss Sharing Asset

Covered Assets and FDIC Loss sharing Asset

Covered Assets and FDIC Loss-sharing Asset

Covered Assets

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

Ten years and forty-five days after the acquisition dates, the Bank shall pay to the FDIC a clawback in the event the losses from the acquisitions fail to reach stated levels. The amount of the clawback is determined by a formula specified in each individual loss-sharing agreement. As of September 30, 2013, the net present value of the Bank’s estimated clawback liability is $3.8 million, which is included in other liabilities on the consolidated balance sheets.

The following is an analysis of our covered loans, net of related allowance for losses as of September 30, 2013 and December 31, 2012:

	September 30, 2013		December 31, 2012
Covered loans:	(dollars in thousands)
Commercial business	$	87,366	$	125,373
Real estate:
One-to-four family residential	44,966		57,150
Commercial and multifamily residential	181,634		233,106
Total real estate	226,600		290,256
Real estate construction:
One-to-four family residential	16,018		25,398
Commercial and multifamily residential	7,146		15,251
Total real estate construction	23,164		40,649
Consumer	37,212		44,516
Subtotal of covered loans	374,342		500,794
Less:
Valuation discount resulting from acquisition accounting	49,445		79,401
Allowance for loan losses	22,737		30,056
Covered loans, net of allowance for loan losses	$	302,160	$	391,337

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

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

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

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

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

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

The following table shows the changes in accretable yield for acquired loans for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Balance at beginning of period	$	140,511		$	214,061		$	166,888		$	259,669
Accretion	(12,243		)	(19,571		)	(40,240		)	(69,045		)
Disposals	(5,772		)	(3,146		)	(621		)	(8,218		)
Reclassifications from nonaccretable difference	(3,013		)	(2,861		)	(6,544		)	6,077
Balance at end of period	$	119,483		$	188,483		$	119,483		$	188,483

During the nine months ended September 30, 2013, the Company recorded a provision recapture for losses on covered loans of $1.7 million. Of this amount, $929 thousand was impairment recapture calculated in accordance with ASC 310-30 and $750 thousand was a provision recapture to adjust the allowance for loss calculated under ASC 450-20 for draws on acquired loans. The impact to earnings of the $1.7 million of provision recapture for covered loans was partially offset through noninterest income by a $1.3 million unfavorable adjustment to the change FDIC loss-sharing asset line item.

The changes in the ALLL for covered loans for the three and nine months ended September 30, 2013 and 2012 are summarized as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Balance at beginning of period	$	26,135		$	31,784		$	30,056		$	4,944
Loans charged off	(5,006		)	(977		)	(10,031		)	(2,574		)
Recoveries	2,555			2,342			4,391			3,406
Provision (recovery) for loan losses	(947		)	(3,992		)	(1,679		)	23,381
Balance at end of period	$	22,737		$	29,157		$	22,737		$	29,157

The following is an analysis of the credit quality of our covered loan portfolio as of September 30, 2013 and 2012:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
September 30, 2013	(in thousands)
Covered loans:
Commercial business:
Secured	$	56,973	$	2,859	$	24,025	$	—	$	—	$	83,857
Unsecured	3,018		396		95		—		—		3,509
Real estate:
One-to-four family residential	36,419		1,854		6,693		—		—		44,966
Commercial and multifamily residential:
Commercial land	11,978		205		7,796		—		—		19,979
Income property	59,736		3,966		11,907		—		—		75,609
Owner occupied	73,045		114		12,887		—		—		86,046
Real estate construction:
One-to-four family residential:
Land and acquisition	4,688		2,759		2,398		—		—		9,845
Residential construction	2,587		—		3,586		—		—		6,173
Commercial and multifamily residential:
Income property	3,847		—		1,936		—		—		5,783
Owner occupied	1,083		—		280		—		—		1,363
Consumer	33,421		35		3,729		27		—		37,212
Total	$	286,795	$	12,188	$	75,332	$	27	$	—	374,342
Less:
Valuation discount resulting from acquisition accounting											49,445
Allowance for loan losses											22,737
Covered loans, net											$	302,160

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

The following table sets forth activity in covered OREO at carrying value for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Covered OREO:
Balance at beginning of period	$	12,854		$	19,079		$	16,311		$	28,126
Transfers in	3,559			3,096			8,089			8,497
Additional OREO write-downs	(199		)	(730		)	(293		)	(2,769		)
Proceeds from sale of OREO property	(5,408		)	(6,822		)	(19,222		)	(25,202		)
Net gain on sale of OREO	1,924			1,888			7,845			7,859
Total covered OREO at end of period	$	12,730		$	16,511		$	12,730		$	16,511

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

FDIC Loss-sharing Asset

At September 30, 2013, the FDIC loss-sharing asset is comprised of a $48.4 million FDIC indemnification asset and a $5.2 million FDIC receivable. The indemnification represents the cash flows the Company expects to collect from the FDIC under the loss-sharing agreements and the FDIC receivable represents the reimbursable amounts from the FDIC that have not yet been received.

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

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

The following table shows a detailed analysis of the FDIC loss-sharing asset for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Balance at beginning of period	$	67,374		$	140,003		$	96,354		$	175,071
Adjustments not reflected in income
Cash received from the FDIC	(1,484		)	(14,881		)	(7,871		)	(49,194		)
FDIC reimbursable losses, net	(505		)	(494		)	522			587
Adjustments reflected in income
Amortization, net	(9,890		)	(9,694		)	(29,470		)	(33,418		)
Loan impairment (recapture)	(758		)	(3,193		)	(1,343		)	18,705
Sale of other real estate	(1,479		)	(1,315		)	(5,076		)	(4,881		)
Write-downs of other real estate	220			1,141			373			4,503
Other	81			110			70			304
Balance at end of period	$	53,559		$	111,677		$	53,559		$	111,677

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Securities

9 Months Ended

Sep. 30, 2013

Available-for-sale Securities [Abstract]

Securities

Securities

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

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
September 30, 2013
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	866,128	$	12,538	$	(16,997	)	$	861,669
State and municipal securities	344,053		13,824		(2,982		)	354,895
U.S. government agency and government-sponsored enterprise securities	335,989		483		(8,942		)	327,530
U.S. government securities	21,074		—		(657		)	20,417
Other securities	5,279		27		(166		)	5,140
Total	$	1,572,523	$	26,872	$	(29,744	)	$	1,569,651
December 31, 2012
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	561,076	$	16,719	$	(5,426	)	$	572,369
State and municipal securities	265,070		20,893		(388		)	285,575
U.S. government agency and government-sponsored enterprise securities	120,085		851		(435		)	120,501
U.S. government securities	19,804		39		(15		)	19,828
Other securities	3,324		104		(36		)	3,392
Total	$	969,359	$	38,606	$	(6,300	)	$	1,001,665

The scheduled contractual maturities of investment securities available for sale at September 30, 2013 are presented as follows:

	September 30, 2013
	Amortized Cost		Fair Value
	(in thousands)
Due within one year	$	23,249	$	23,493
Due after one year through five years	278,538		278,715
Due after five years through ten years	463,423		459,080
Due after ten years	802,034		803,223
Other securities with no stated maturity	5,279		5,140
Total investment securities available-for-sale	$	1,572,523	$	1,569,651

The following table summarizes, as of September 30, 2013, the carrying value of securities pledged as collateral to secure public deposits, borrowings and other purposes as permitted or required by law:

	Carrying Amount
	(in thousands)
To Washington and Oregon State to secure public deposits	$	267,646
To Federal Reserve Bank to secure borrowings	44,526
Other securities pledged	43,325
Total securities pledged as collateral	$	355,497

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2013 and December 31, 2012:

	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
September 30, 2013
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	385,222	$	(12,567	)	$	64,044	$	(4,430	)	$	449,266	$	(16,997	)
State and municipal securities	101,176		(2,935		)	807		(47		)	101,983		(2,982		)
U.S. government agency and government-sponsored enterprise securities	290,257		(8,942		)	—		—			290,257		(8,942		)
U.S. government securities	20,217		(657		)	—		—			20,217		(657		)
Other securities	2,286		(24		)	2,813		(142		)	5,099		(166		)
Total	$	799,158	$	(25,125	)	$	67,664	$	(4,619	)	$	866,822	$	(29,744	)
December 31, 2012
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	167,739	$	(5,090	)	$	12,204	$	(336	)	$	179,943	$	(5,426	)
State and municipal securities	20,413		(383		)	210		(5		)	20,623		(388		)
U.S. government agency and government-sponsored enterprise securities	56,600		(435		)	—		—			56,600		(435		)
U.S. government securities	9,914		(15		)	—		—			9,914		(15		)
Other securities	—		—			964		(36		)	964		(36		)
Total	$	254,666	$	(5,923	)	$	13,378	$	(377	)	$	268,044	$	(6,300	)

At September 30, 2013, there were 67 U.S. government agency and government-sponsored enterprise mortgage-backed securities & collateralized mortgage obligations securities in an unrealized loss position, of which six were in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2013.

At September 30, 2013, there were 109 state and municipal government securities in an unrealized loss position, of which two were in a continuous loss position for 12 months or more. The unrealized losses on state and municipal securities were caused by interest rate changes or widening of market spreads subsequent to the purchase of the individual securities. Management monitors published credit ratings of these securities for adverse changes. As of September 30, 2013, none of the rated obligations of state and local government entities held by the Company had a below investment grade credit rating. Because the credit quality of these securities are investment grade and the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2013.

At September 30, 2013, there were 29 U.S. government agency and government-sponsored enterprise securities in an unrealized loss position, none of which were in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not currently intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2013.

At September 30, 2013, there were four U.S. government securities in an unrealized loss position, none of which were in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not currently intend to sell this security nor does the Company consider it more likely than not that it will be required to sell this security before the recovery of amortized cost basis, which may be maturity, the Company does not consider this investment to be other-than-temporarily impaired at September 30, 2013.

At September 30, 2013, there were two other securities in an unrealized loss position, of which one security, a mortgage-backed securities fund, was in a continuous unrealized loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates and the additional risk premium investors are demanding for investment securities with these characteristics. The Company does not consider this investment to be other-than-temporarily impaired at September 30, 2013 as it has the intent and ability to hold the investment for sufficient time to allow for recovery in the market value.

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Consolidated Statements of Changes in Shareholders' Equity (USD $) In Thousands, except Share data	Total	Common Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Series B Preferred Stock [Member]
Balance, value at Dec. 31, 2011	$ 759,338	$ 579,136	$ 155,069	$ 25,133	$ 0
Balance, shares at Dec. 31, 2011		39,506,000			0
Net Income	32,681		32,681
Other comprehensive income	3,345			3,345
Issuance of common stock - stock option and other plans, value	713	713
Issuance of common stock - stock option and other plans, shares		40,000
Issuance of common stock - restricted stock awards, net of cancelled awards, value	1,152	1,152
Issuance of common stock - restricted stock awards, net of cancelled awards, shares		143,000
Cash dividends paid on common stock	(35,252)		(35,252)
Balance, value at Sep. 30, 2012	761,977	581,001	152,498	28,478	0
Balance, shares at Sep. 30, 2012		39,689,000			0
Balance, value at Dec. 31, 2012	764,008	581,471	162,388	20,149	0
Balance, shares at Dec. 31, 2012		39,686,000			0
Net Income	40,043		40,043
Other comprehensive income	(23,357)			(23,357)
Stock Issued During Period, Shares, New Issues		11,380,000			9,000
Stock Issued During Period, Value, New Issues	276,181	273,964			2,217
Stock Adjustment Deferred Compensation - Shares	0
Stock Adjustment Value Deferred Compensation	517
Issuance of common stock - stock option and other plans, value	1,154	1,154
Issuance of common stock - stock option and other plans, shares		68,000
Issuance of common stock - restricted stock awards, net of cancelled awards, value	1,881	1,881
Issuance of common stock - restricted stock awards, net of cancelled awards, shares		153,000
Cash dividends paid on common stock	(14,219)		(14,219)
Stock Repurchased During Period, Shares		(16,000)
Stock Repurchased During Period, Value	(391)	(391)
Dividends, Preferred Stock, Cash	(20)
Balance, value at Sep. 30, 2013	$ 1,045,797	$ 858,596	$ 188,192	$ (3,208)	$ 2,217
Balance, shares at Sep. 30, 2013		51,271,000			9,000

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Covered Assets and FDIC Loss-sharing Asset (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Amount of Estimated Clawback Liability	$ 3,800,000		$ 3,800,000
Payment Of Clawback If Losses Less Than Stated Levels, Period After Acquisition			10 years 45 days
Provision for loan and lease losses			3,581,000	34,506,000
Federal deposit insurance corporation loss-sharing indemnified assets	48,400,000		48,400,000
Federal deposit insurance corporation loss-sharing indemnified assets receivable	5,200,000		5,200,000
FDIC Loss-sharing Asset, Period Increase (Decrease)	1,300,000
Covered Loans [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Percentage of loss shared by FDIC	80.00%		80.00%
FDIC Percentage Of Loss Recoveries	80.00%		80.00%
Percentage of loss shared by FDIC When Loss Share Thresholds Met	95.00%		95.00%
Percentage Of Loss Recoveries Shared By FDIC When Loss Share Thresholds Met	95.00%		95.00%
Provision for loan and lease losses	(947,000)	(3,992,000)	(1,679,000)	23,381,000
Impairment expenses			929,000
Negative provision to adjust allowance for loss			$ 750,000
Covered Loans [Member] | Maximum [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loss Sharing Agreement Effective Years			10 years
Loss Recovery Provision Effective Years			10 years
Covered Loans [Member] | Minimum [Member]
Covered Assets And FDIC Loss Sharing Asset [Line Items]
Loss Sharing Agreement Effective Years			5 years
Loss Recovery Provision Effective Years			8 years

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Allowance for Noncovered Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Narrative) (Details) (USD $)	3 Months Ended	9 Months Ended			9 Months Ended		3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2012	Apr. 02, 2013	Sep. 30, 2013 Maximum [Member]	Sep. 30, 2013 West Coast Bancorp [Member]	Sep. 30, 2013 Noncovered Loans [Member]	Sep. 30, 2012 Noncovered Loans [Member]	Sep. 30, 2013 Noncovered Loans [Member]	Sep. 30, 2012 Noncovered Loans [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of unallocated loan amount					5.00%
Provision for loan and lease losses		$ 3,581,000	$ 34,506,000				$ 4,260,000	$ 2,875,000	$ 5,260,000	$ 11,125,000
discount on acquired loans				88,800,000
Discount Accretion on Other Acquired Loans						19,700,000
Change in Accounting Estimate, Financial Effect	2,800,000
Change in estimate, impact to earnings per share	$ (0.05)	$ (0.06)

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Earnings per Common Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(in thousands except per share)
Basic EPS:
Net income	$	13,276	$	11,880	$	40,043	$	32,681
Less: Earnings allocated to participating securities
Preferred shares	27		—		58		—
Nonvested restricted shares	109		113		355		336
Earnings allocated to common shareholders	$	13,140	$	11,767	$	39,630	$	32,345
Weighted average common shares outstanding	50,834		39,289		47,032		39,248
Basic earnings per common share	$	0.26	$	0.30	$	0.84	$	0.82
Diluted EPS:
Earnings allocated to common shareholders	$	13,142	$	11,767	$	39,635	$	32,345
Weighted average common shares outstanding	50,834		39,289		47,032		39,248
Dilutive effect of equity awards	1,463		2		915		3
Weighted average diluted common shares outstanding	52,297		39,291		47,947		39,251
Diluted earnings per common share	$	0.25	$	0.30	$	0.83	$	0.82
Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive	138		53		99		46

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Fair Value Accounting and Measurement (Financial Assets Accounted For Fair Value On Nonrecurring Basis) (Details) (Fair Value, Measurements, Nonrecurring [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans		$ 6,094		$ 6,094
Fair Value, Option, Changes in Fair Value, Gain (Loss)	1,223	430	1,332	9,509
Assets, Fair Value Disclosure	4,258	8,922	4,258	8,922
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans		0		0
Assets, Fair Value Disclosure	0	0	0	0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans		0		0
Assets, Fair Value Disclosure	0	0	0	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans		6,094		6,094
Assets, Fair Value Disclosure	4,258	8,922	4,258	8,922
Impaired Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Option, Changes in Fair Value, Gain (Loss)		(509)		3,377
Covered Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	544	1,021	544	1,021
Covered Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	0	0	0	0
Covered Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	0	0	0	0
Covered Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	544	1,021	544	1,021
Covered Loans [Member] | Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Option, Changes in Fair Value, Gain (Loss)	183	481	248	1,025
Noncovered Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	3,714	1,807	3,714	1,807
OPPO		0		0
Noncovered Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	0	0	0	0
OPPO		0		0
Noncovered Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	0	0	0	0
OPPO		0		0
Noncovered Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
OREO	3,714	1,807	3,714	1,807
OPPO		0		0
Noncovered Loans [Member] | Other Real Estate Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Option, Changes in Fair Value, Gain (Loss)	1,040	458	1,084	3,117
Noncovered Loans [Member] | Other Personal Property Owned [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Option, Changes in Fair Value, Gain (Loss)		$ 0		$ (1,990)

XML

Goodwill and Intangible Assets (Schedule of Goodwill and Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012	Dec. 31, 2011
Goodwill and Intangible Assets [Line Items]
Goodwill, Acquired During Period	$ 0	$ 0	$ 229,677	$ 0
Indefinite-Lived Intangible Assets (Excluding Goodwill)	919	0	919	0
Intangible Assets, Net (Excluding Goodwill)	27,509	16,803	27,509	16,803		15,721
Goodwill and Intangible Assets [Roll Forward]
Total goodwill, beginning of period	345,231	115,554	115,554	115,554
Total goodwill, end of period	345,231	115,554	345,231	115,554
CDI current period amortization	(1,666)	(1,093)	(4,388)	(3,362)
Total goodwill and intangible assets, end of period	372,740	132,357	372,740	132,357
Core Deposits [Member]
Goodwill and Intangible Assets [Line Items]
Finite Lived Intangible Assets Acquired During the Period	0	0	15,257	0
Estimated life of CDI, in years			10 years
Goodwill and Intangible Assets [Roll Forward]
Gross core deposit intangible balance, beginning of period					47,698	32,441	32,441	32,441
Accumulated amortization at beginning of period					(19,441)	(16,720)	(14,545)	(12,275)
Core deposit intangible, net, beginning of period	28,257	17,896	15,721	20,166
CDI current period amortization	(1,667)	(1,093)	(4,388)	(3,363)
Total core deposit intangible, end of period	$ 26,590	$ 16,803	$ 26,590	$ 16,803

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2013

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income (Loss)

The following table shows changes in accumulated other comprehensive income (loss) by component for the three and nine month periods ended September 30, 2013:

	Unrealized Gains and Losses on Available-for-Sale Securities (1)			Unrealized Gains and Losses on Pension Plan Liability (1)			Total (1)
Three months ended September 30, 2013	(in thousands)
Beginning balance	$	(7,804	)	$	(1,406	)	$	(9,210	)
Other comprehensive loss before reclassifications	5,943			—			5,943
Amounts reclassified from accumulated other comprehensive income (2)	—			59			59
Net current-period other comprehensive loss	5,943			59			6,002
Ending balance	$	(1,861	)	$	(1,347	)	$	(3,208	)
Nine months ended September 30, 2013
Beginning balance	$	20,918		$	(769	)	$	20,149
Other comprehensive loss before reclassifications	(22,480		)	(756		)	(23,236		)
Amounts reclassified from accumulated other comprehensive income (2)	(299		)	178			(121		)
Net current-period other comprehensive loss	(22,779		)	(578		)	(23,357		)
Ending balance	$	(1,861	)	$	(1,347	)	$	(3,208	)

__________

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

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

The following table shows details regarding the reclassifications from accumulated other comprehensive income for the three and nine month periods ended September 30, 2013:

	Amount Reclassified from Accumulated Other Comprehensive Income						Affected line Item in the Consolidated Statement of Income
	Three Months Ended			Nine Months Ended
	September 30, 2013			September 30, 2013
	(in thousands)
Unrealized gains and losses on available-for-sale securities
	$	—		$	462		Investment securities gains, net
	—			462			Total before tax
	—			(163		)	Income tax provision
	$	—		$	299		Net of tax
Amortization of pension plan liability
Actuarial losses	$	(92	)	$	(276	)	Compensation and employee benefits
	(92		)	(276		)	Total before tax
	33			98			Income tax benefit
	$	(59	)	$	(178	)	Net of tax

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Changes in Noncovered Other Real Estate Owned

9 Months Ended

Sep. 30, 2013

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

Changes in Noncovered Other Real Estate Owned

Changes in Noncovered Other Real Estate Owned ("OREO")

The following tables set forth activity in noncovered OREO for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Noncovered OREO:
Balance at beginning of period	$	24,339		$	13,925		$	10,676		$	22,893
Established through acquisitions	—			—			14,708			—
Transfers in, net of write-downs ($48, $24, $90 and $24, respectively)	4,413			139			9,190			6,527
OREO improvements	—			—			—			11
Additional OREO write-downs	(1,066		)	(458		)	(1,636		)	(4,232		)
Proceeds from sale of OREO property	(4,673		)	(3,170		)	(10,295		)	(15,069		)
Gain on sale of OREO, net	530			439			900			745
Total noncovered OREO at end of period	$	23,543		$	10,875		$	23,543		$	10,875

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Fair Value Accounting and Measurement (Carrying Amounts and Estimated Fair Values of Selected Financial Instruments) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Assets
Interest-earning deposits with banks	$ 54,470	$ 389,353
Securities available for sale	1,569,651	1,001,665
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Assets
Cash and due from banks	200,282	124,573
Interest-earning deposits with banks	54,470	389,353
Securities available for sale	1,569,651	1,001,665
FHLB stock	32,833	21,819
Loans held for sale	840	2,563
Loans	4,440,048	2,864,803
FDIC loss-sharing asset	53,559	96,354
Interest rate contracts	10,187	14,921
Liabilities
Deposits	5,948,967	4,042,085
FHLB Advances	34,632	6,644
Repurchase agreements	25,000	25,000
Interest rate contracts	10,187	14,921
Estimate of Fair Value, Fair Value Disclosure [Member]
Assets
Cash and due from banks	200,282	124,573
Interest-earning deposits with banks	54,470	389,353
Securities available for sale	1,569,651	1,001,665
FHLB stock	32,833	21,819
Loans held for sale	840	2,563
Loans	4,397,456	2,944,317
FDIC loss-sharing asset	17,353	26,543
Interest rate contracts	10,187	14,921
Liabilities
Deposits	5,948,473	4,043,221
FHLB Advances	33,301	5,894
Repurchase agreements	26,207	26,464
Interest rate contracts	10,187	14,921
Fair Value, Inputs, Level 1 [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Assets
Cash and due from banks	200,282	124,573
Interest-earning deposits with banks	54,470	389,353
Securities available for sale	20,417	19,828
FHLB stock	0	0
Loans held for sale	0	0
Loans	0	0
FDIC loss-sharing asset	0	0
Interest rate contracts	0	0
Liabilities
Deposits	5,413,557	3,549,821
FHLB Advances	0	0
Repurchase agreements	0	0
Interest rate contracts	0	0
Fair Value, Inputs, Level 2 [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Assets
Cash and due from banks	0	0
Interest-earning deposits with banks	0	0
Securities available for sale	1,549,234	981,837
FHLB stock	32,833	21,819
Loans held for sale	840	2,563
Loans	0	0
FDIC loss-sharing asset	0	0
Interest rate contracts	10,187	14,921
Liabilities
Deposits	534,916	493,400
FHLB Advances	33,301	5,894
Repurchase agreements	26,207	26,464
Interest rate contracts	10,187	14,921
Fair Value, Inputs, Level 3 [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Assets
Cash and due from banks	0	0
Interest-earning deposits with banks	0	0
Securities available for sale	0	0
FHLB stock	0	0
Loans held for sale	0	0
Loans	4,397,456	2,944,317
FDIC loss-sharing asset	17,353	26,543
Interest rate contracts	0	0
Liabilities
Deposits	0	0
FHLB Advances	0	0
Repurchase agreements	0	0
Interest rate contracts	$ 0	$ 0

XML

Earnings per Common Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings per Common Share

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

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
	(in thousands except per share)
Basic EPS:
Net income	$	13,276	$	11,880	$	40,043	$	32,681
Less: Earnings allocated to participating securities
Preferred shares	27		—		58		—
Nonvested restricted shares	109		113		355		336
Earnings allocated to common shareholders	$	13,140	$	11,767	$	39,630	$	32,345
Weighted average common shares outstanding	50,834		39,289		47,032		39,248
Basic earnings per common share	$	0.26	$	0.30	$	0.84	$	0.82
Diluted EPS:
Earnings allocated to common shareholders	$	13,142	$	11,767	$	39,635	$	32,345
Weighted average common shares outstanding	50,834		39,289		47,032		39,248
Dilutive effect of equity awards	1,463		2		915		3
Weighted average diluted common shares outstanding	52,297		39,291		47,947		39,251
Diluted earnings per common share	$	0.25	$	0.30	$	0.83	$	0.82
Potentially dilutive share options that were not included in the computation of diluted EPS because to do so would be anti-dilutive	138		53		99		46

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Derivatives and Hedging Activities

9 Months Ended

Sep. 30, 2013

General Discussion of Derivative Instruments and Hedging Activities [Abstract]

Derivatives and Hedging Activities

Derivatives and Hedging Activities

The Company periodically enters into certain commercial loan interest rate swap agreements in order to provide commercial loan customers the ability to convert from variable to fixed interest rates. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to a swap agreement. This swap agreement effectively converts the customer’s variable rate loan into a fixed rate. The Company then enters into a corresponding swap agreement with a third party in order to offset its exposure on the variable and fixed components of the customer agreement. As the interest rate swap agreements with the customers and third parties are not designated as hedges under the Derivatives and Hedging topic of the FASB ASC, the instruments are marked to market in earnings. The notional amount of open interest rate swap agreements at September 30, 2013 and December 31, 2012 was $164.5 million and $177.0 million, respectively. There was no impact to the statement of income for the three or nine month periods ending September 30, 2013 and 2012.

The following table presents the fair value of derivatives not designated as hedging instruments at September 30, 2013 and December 31, 2012:

Asset Derivatives

Liability Derivatives

September 30, 2013

December 31, 2012

September 30, 2013

December 31, 2012

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

(in thousands)

Interest rate contracts

Other assets

$

10,187

Other assets

$

14,921

Other liabilities

$

10,187

Other liabilities

$

14,921

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Oct. 31, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Entity Registrant Name	COLUMBIA BANKING SYSTEM INC
Entity Central Index Key	0000887343
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		51,269,655

XML

Fair Value Accounting and Measurement

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Accounting and Measurement

Fair Value Accounting and Measurement

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

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

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

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

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

Fair values are determined as follows:

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

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

The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at September 30, 2013 and December 31, 2012 by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

	Fair value		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2		Level 3
September 30, 2013	(in thousands)
Assets
Securities available for sale
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations	$	861,669	$	—	$	861,669	$	—
State and municipal debt securities	354,895		—		354,895		—
U.S. government agency and government-sponsored enterprise securities	327,530		—		327,530		—
U.S. government securities	20,417		20,417		—		—
Other securities	5,140		—		5,140		—
Total securities available for sale	$	1,569,651	$	20,417	$	1,549,234	$	—
Other assets (Interest rate contracts)	$	10,187	$	—	$	10,187	$	—
Liabilities
Other liabilities (Interest rate contracts)	$	10,187	$	—	$	10,187	$	—

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

There were no transfers between Level 1 and Level 2 of the valuation hierarchy during the nine month periods ended September 30, 2013 and 2012. The Company recognizes transfers between levels of the valuation hierarchy based on the valuation level at the end of the reporting period.

Nonrecurring Measurements

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

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

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

The following tables set forth the Company's assets that were measured using fair value estimates on a nonrecurring basis at September 30, 2013 and 2012.

	Fair value at September 30, 2013		Fair Value Measurements at Reporting Date Using						Losses During the Three Months Ended September 30, 2013			Losses During the Nine Months Ended September 30, 2013
			Level 1		Level 2		Level 3
	(in thousands)
Noncovered OREO	$	3,714	$	—	$	—	$	3,714	$	(1,040	)	$	(1,084	)
Covered OREO	544		—		—		544		(183		)	(248		)
	$	4,258	$	—	$	—	$	4,258	$	(1,223	)	$	(1,332	)

	Fair value at September 30, 2012		Fair Value Measurements at Reporting Date Using						Gains (Losses) During the Three Months Ended September 30, 2012			Losses During the Nine Months Ended September 30, 2012
			Level 1		Level 2		Level 3
	(in thousands)
Impaired loans	$	6,094	$	—	$	—	$	6,094	$	509		$	(3,377	)
Noncovered OREO	1,807		—		—		1,807		(458		)	(3,117		)
Covered OREO	1,021		—		—		1,021		(481		)	(1,025		)
Noncovered OPPO	—		—		—		—		—			(1,990		)
	$	8,922	$	—	$	—	$	8,922	$	(430	)	$	(9,509	)

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

Quantitative information about Level 3 fair value measurements

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

	Fair value at September 30, 2013		Valuation Technique	Unobservable Input	Range (Weighted Average) (1)
	(dollars in thousands)
Noncovered OREO	$	3,714	Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Covered OREO	544		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
(1) Discount applied to appraisal value, letter of intent to purchase, or stated value (in the case of accounts receivable and inventory).
(2) Quantitative disclosures are not provided for noncovered OREO and covered OREO because there were no adjustments made to the appraisal value during the current period.

	Fair value at September 30, 2012		Valuation Technique	Unobservable Input	Range (Weighted Average) (1)
	(dollars in thousands)
Impaired loans - real estate collateral	$	4,148	Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Impaired loans - other collateral (3)	1,946		Fair Market Value of Collateral	Adjustment to Stated value	0% - 70% (27%)
Noncovered OREO	1,807		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Covered OREO	1,021		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
Noncovered OPPO	—		Fair Market Value of Collateral	Adjustment to Appraisal Value	N/A (2)
(1) Discount applied to appraisal value, letter of intent to purchase, or stated value (in the case of accounts receivable and inventory).
(2) Quantitative disclosures are not provided for impaired loans collateralized by real estate, noncovered OREO, covered OREO and noncovered OPPO because there were no adjustments made to the appraisal value during the current period.
(3) Other collateral consists of accounts receivable and inventory

Fair value of financial instruments

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

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

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

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

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

Loans—Loans are not recorded at fair value on a recurring basis. Nonrecurring fair value adjustments are periodically recorded on impaired loans that are measured for impairment based on the fair value of collateral. For most performing loans, fair value is estimated using expected duration and lending rates that would have been offered on September 30, 2013 or December 31, 2012, for loans which mirror the attributes of the loans with similar rate structures and average maturities. The fair values resulting from these calculations are reduced by an amount representing the change in estimated fair value attributable to changes in borrowers’ credit quality since the loans were originated. For nonperforming loans, fair value is estimated by applying a valuation discount based upon loan sales data from the FDIC. For covered loans, fair value is estimated by discounting the expected future cash flows using a lending rate that would have been offered on September 30, 2013 (Level 3).

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

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

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

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

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

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

The following tables summarize carrying amounts and estimated fair values of selected financial instruments as well as assumptions used by the Company in estimating fair value at September 30, 2013 and December 31, 2012:

	September 30, 2013
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
	(in thousands)
Assets
Cash and due from banks	$	200,282	$	200,282	$	200,282	$	—	$	—
Interest-earning deposits with banks	54,470		54,470		54,470		—		—
Securities available for sale	1,569,651		1,569,651		20,417		1,549,234		—
FHLB stock	32,833		32,833		—		32,833		—
Loans held for sale	840		840		—		840		—
Loans	4,440,048		4,397,456		—		—		4,397,456
FDIC loss-sharing asset	53,559		17,353		—		—		17,353
Interest rate contracts	10,187		10,187		—		10,187		—
Liabilities
Deposits	$	5,948,967	$	5,948,473	$	5,413,557	$	534,916	$	—
FHLB Advances	34,632		33,301		—		33,301		—
Repurchase agreements	25,000		26,207		—		26,207		—
Interest rate contracts	10,187		10,187		—		10,187		—

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

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Shareholders' Equity (Details) (USD $)	0 Months Ended		0 Months Ended				9 Months Ended
	Jan. 24, 2013	Sep. 30, 2013	Oct. 24, 2013 Dividend Declared [Member]	Jul. 25, 2013 Dividend Declared [Member]	Apr. 24, 2013 Dividend Declared [Member]	Apr. 02, 2013 Series B Preferred Stock [Member]	Sep. 30, 2013 Series B Preferred Stock [Member]
Subsequent Event [Line Items]
Stock Issued During Period, Shares, New Issues						8,782	9,000
Preferred Stock Converted Into Common Stock, Shares		102,363
Declared quarterly cash dividend	$ 0.10		$ 0.11	$ 0.1	$ 0.1

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Goodwill and Intangible Assets (Estimated Future Amortization Expense of Core Deposit Intangibles) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013
Future Amortization Expense For Core Deposit Intangibles
2013	$ 1,657
2014	5,963
2015	4,934
2016	4,195
2017	$ 3,361