Document

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

COLUMBIA BANKING SYSTEM, INC.

(Exact name of registrant as specified in its charter)



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

1301 A Street Tacoma, WA		98402
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (253) 305-1900

(Former name or former address, if changed since last report.)

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



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



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



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



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

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

Emerging growth company ☐

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

Items to be Included in this Report

Item 2.02 Results of Operations and Financial Condition

Item 8.01 Other Events

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

On April 27, 2017, Columbia Banking System, Inc. issued a press release reporting its financial results for the quarter ended March 31, 2017 and a quarterly cash dividend of $0.22 per share. The dividend will be paid on May 24, 2017 to shareholders of record at the close of business on May 10, 2017. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference in its entirety.

Item 9.01 Financial Statements and Exhibits

(d) The following exhibits are being furnished herewith:

Press Release dated April 27, 2017 reporting the financial results of Columbia Banking System, Inc. for the quarter ended March 31, 2017 and quarterly cash dividend.

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



		COLUMBIA BANKING SYSTEM, INC.

Date:	April 27, 2017	/s/ HADLEY S. ROBBINS
		Hadley S. Robbins
		Executive Vice President and Interim Chief Executive Officer

Press Release dated April 27, 2017 reporting the financial results of Columbia Banking System, Inc. for the quarter ended March 31, 2017 and quarterly cash dividend.

FOR IMMEDIATE RELEASE

Columbia Banking System Announces First Quarter 2017 Results

and Quarterly Cash Dividend

Record first quarter net income of $29.2 million; diluted earnings per share of $0.50

New loan production for the quarter of $251.7 million

Net interest margin expanded to 4.20%

Nonperforming assets to period end assets ratio remains near record lows at 0.32%

Outstanding preferred shares converted to common shares during the quarter

TACOMA, Washington, April 27, 2017 -- Hadley Robbins, Interim Chief Executive Officer of Columbia Banking System and Columbia Bank (NASDAQ: COLB) (“Columbia”), said today upon the release of Columbia’s first quarter 2017 earnings, “From a performance standpoint, we had a very good quarter. Our record first quarter performance was driven, in part, by increased net interest income, modest provision for loan losses, and increased noninterest income.” Mr. Robbins continued, “I am very proud of our team. The sudden passing of Melanie Dressel was a tragic loss for all of us; however, the strength of the culture Melanie built and epitomized so well shined in each of our team members when it mattered most. Our focus on caring for our customers, each other, and the communities we serve never wavered.”

Total assets at March 31, 2017 were $9.53 billion, an increase of $17.7 million from December 31, 2016. Loans grew $14.7 million during the quarter as strong loan originations of $251.7 million were offset by payments. Loan production was diversified across the portfolio sectors, with growth primarily centered in commercial business and commercial real estate loans. Securities available for sale were $2.33 billion at March 31, 2017, an increase of $52.8 million, or 2% from $2.28 billion at December 31, 2016. Total deposits at March 31, 2017 were $8.09 billion, an increase of $29.4 million from December 31, 2016. Core deposits comprised 96% of total deposits and were $7.79 billion at March 31, 2017, an increase of $45.0 million from December 31, 2016. The average cost of total deposits for the quarter was 0.04%, unchanged from the fourth quarter of 2016.

Net interest income for the first quarter of 2017 was $86.7 million, an increase of $938 thousand and $6.5 million from the linked and prior year periods, respectively. The linked quarter increase was principally from taxable securities income, whose yields benefited from a market-driven reduction in premium amortization. The increase from the prior year period was due to higher loan and securities volumes as well as the previously noted reduction in securities premium amortization. Incremental accretion income from purchased loans in the current period was $665 thousand lower than the prior year period. For additional information regarding net interest income, see the “Average Balances and Rates” table.

Noninterest income was $24.9 million for the first quarter of 2017, an increase of $2.5 million compared to $22.3 million for the fourth quarter of 2017. The linked quarter increase was principally due to a $1.5 million bank owned life insurance (“BOLI”) benefit as well as a $573 thousand benefit from re-measuring to zero our estimated mortgage repurchase liability, which were both recorded to other noninterest income. The repurchase liability was initially established with a prior acquisition. Compared to the first quarter of 2016, noninterest income increased by $4.2 million due to the previously noted BOLI and mortgage repurchase benefits, as well as a $1.3 million increase in loan revenue due to higher fee income.

Total noninterest expense for the first quarter of 2017 was $69.0 million, an increase of $4.0 million from $65.0 million for the fourth quarter of 2016. After removing the effect of acquisition-related expenses, noninterest expense for the current quarter increased $2.9 million from the linked-quarter on the same basis. This increase was due to higher compensation and benefits as well as higher other noninterest expense. The increase in compensation and benefits was due to additional stock compensation expense related to the immediate vesting of certain restricted share awards and additional payroll taxes. The increase in other noninterest expense was due to the recording of an additional $850 thousand in expense related to the allowance for unfunded commitments and letters of credit during the current quarter, compared to a reversal of $200 thousand in the fourth quarter of 2016.

Compared to the first quarter of 2016, noninterest expense increased $3.9 million, or 6%, from $65.1 million. After removing the effect of $1.4 million in acquisition-related expenses from the current quarter and $2.4 million from the prior year period, noninterest expense increased $5.0 million from the prior year period. The increase was due to higher compensation and benefits, which were driven by higher salaries as well as the previously mentioned stock compensation expenses. In addition, incentive expenses in the current quarter were higher based upon the Company's improved financial performance relative to the prior year period.

Columbia’s net interest margin (tax equivalent) for the first quarter of 2017 was 4.20%, an increase of 9 basis points from the linked quarter and an increase of 7 basis points from the prior year period. The increases from the linked and prior year quarters were due to higher interest income from taxable securities, which was driven by reduced amortization of premiums. Incremental accretion income was $4.1 million in the current period compared to $4.7 million in the prior year quarter.

Columbia’s operating net interest margin (tax equivalent)⁽¹⁾was 4.09% for the first quarter of 2017, an increase of 10 and 6 basis points from the linked and prior year periods, respectively. As the previously mentioned lower premium amortization related to our purchased securities and not our acquired securities, this decrease in market-driven premium amortization also positively influenced our operating net interest margin (tax equivalent)⁽¹⁾.

Clint Stein, Columbia’s Executive Vice President and Chief Financial Officer, commented, “The rebound in our net interest margin during the quarter was primarily due to the reduction of overnight funds coupled with increased securities income resulting from lower amortization of premiums.” Mr. Stein continued, “The margin pressure associated with rates on new loan originations continues and any significant increase in competition for deposit relationships would further restrain margin expansion.”

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



	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2017			2016			2016			2016			2016
	(dollars in thousands)
Incremental accretion income due to:
FDIC purchased credit impaired loans	$	2,117		$	1,199		$	1,816		$	1,300		$	1,657
Other acquired loans	1,948			3,087			2,749			3,074			3,073
Incremental accretion income	$	4,065		$	4,286		$	4,565		$	4,374		$	4,730

Net interest margin (tax equivalent)	4.20		%	4.11		%	4.13		%	4.10		%	4.13		%
Operating net interest margin (tax equivalent) (1)	4.09		%	3.99		%	4.03		%	4.00		%	4.03		%

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

At March 31, 2017, nonperforming assets to total assets were 0.32% compared to 0.35% at December 31, 2016. Total nonperforming assets decreased $3.7 million from the linked quarter due to a $2.2 million decrease in nonaccrual loans as well as a $1.5 million decrease in other real estate owned.

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



	March 31, 2017		December 31, 2016
	(in thousands)
Nonaccrual loans:
Commercial business	$	10,848	$	11,555
Real estate:
One-to-four family residential	450		568
Commercial and multifamily residential	10,237		11,187
Total real estate	10,687		11,755
Real estate construction:
One-to-four family residential	213		563
Total real estate construction	213		563
Consumer	3,799		3,883
Total nonaccrual loans	25,547		27,756
Other real estate owned and other personal property owned	4,519		5,998
Total nonperforming assets	$	30,066	$	33,754

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



	Three Months Ended
	March 31, 2017			December 31, 2016			March 31, 2016
	(in thousands)
Beginning balance	$	70,043		$	70,264		$	68,172
Charge-offs:
Commercial business	(1,127		)	(1,195		)	(3,773		)
One-to-four family residential real estate	(307		)	—			—
Commercial and multifamily residential real estate	—			(63		)	—
One-to-four family residential real estate construction	(14		)	(88		)	—
Consumer	(428		)	(255		)	(266		)
Purchased credit impaired	(1,939		)	(2,118		)	(2,866		)
Total charge-offs	(3,815		)	(3,719		)	(6,905		)
Recoveries:
Commercial business	365			377			662
One-to-four family residential real estate	117			29			41
Commercial and multifamily residential real estate	78			1,182			69
One-to-four family residential real estate construction	29			11			254
Commercial and multifamily residential real estate construction	—			—			1
Consumer	285			168			165
Purchased credit impaired	1,144			1,713			1,551
Total recoveries	2,018			3,480			2,743
Net charge-offs	(1,797		)	(239		)	(4,162		)
Provision for loan and lease losses	2,775			18			5,254
Ending balance	$	71,021		$	70,043		$	69,264

The allowance for loan losses to period end loans was 1.14% at March 31, 2017 compared to 1.13% at December 31, 2016. For the first quarter of 2017, Columbia recorded a net provision for loan and lease losses of $2.8 million compared to a net provision of $18 thousand for the linked quarter and $5.3 million for the comparable quarter last year. The net provision for loan and lease losses recorded during the current quarter consisted of $3.1 million of provision for loan losses for loans, excluding PCI loans, partially offset by a provision recovery of $325 thousand for PCI loans.

Andy McDonald, Columbia’s Executive Vice President and Chief Credit Officer, commented, “We continue to see weakness in the agricultural sector; however, I am very pleased with overall portfolio performance. Annualized net charge offs for the quarter of 11 bps combined with a modest reduction in nonperforming assets is a testament to the hard work our bankers have put forth in keeping our credit cost low.”

Organizational Update

William Weyerhaeuser, Chairman of the Board of Columbia, commented, “The Board of Directors’ search for a permanent Chief Executive Officer is progressing as planned. We are actively evaluating both internal and external candidates to ensure the best possible individual to lead Columbia is placed in the role. At this stage of our search, it is too early to commit to a specific timeline for completing the process.”

Mr. Robbins commented, “Our pending acquisition of Pacific Continental Corporation is moving forward and progressing as we expected. Upon obtaining the necessary regulatory and shareholder approvals, we look forward to joining these two great companies together to the benefit of our customers, shareholders, and most importantly, the communities we serve.”

Cash Dividend Announcement

Columbia will pay a regular cash dividend of $0.22 per common share on May 24, 2017 to shareholders of record as of the close of business on May 10, 2017.

Conference Call Information

Columbia’s management will discuss the first quarter 2017 results on a conference call scheduled for Thursday, April 27, 2017 at 1:00 p.m. Pacific Daylight Time (4:00 p.m. EDT). Interested parties may listen to this discussion by calling 1-888-286-8956; Conference ID code #7691866.

A conference call replay will be available from approximately 4:00 p.m. PDT on April 27, 2017 through 9:00 p.m. PDT on May 4, 2017. The conference call replay can be accessed by dialing 1-888-286-8956 and entering Conference ID code #7691866.

Headquartered in Tacoma, Washington, Columbia Banking System, Inc. is the holding company of Columbia Bank, a Washington state-chartered full-service commercial bank with locations throughout Washington, Oregon and Idaho. For the tenth consecutive year, the bank was named in 2016 as one of Puget Sound Business Journal's "Washington's Best Workplaces." Columbia ranked in the top 30 on the 2017 Forbes list of best banks.

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

Note Regarding Forward-Looking Statements

This news release includes forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward looking statements include, but are not limited to, descriptions of Columbia’s management’s expectations regarding future events and developments such as future operating results, growth in loans and deposits, continued success of Columbia’s style of banking and the strength of the local economy. The words “will,” “believe,” “expect,” “intend,” “should,” and “anticipate” or the negative of these words or words of similar construction are intended in part to help identify forward looking statements. Future events are difficult to predict, and the expectations described above are necessarily subject to risks and uncertainties, many of which are outside our control, that may cause actual results to differ materially and adversely. In addition to discussions about risks and uncertainties set forth from time to time in Columbia’s filings with the Securities and Exchange Commission, available at the SEC’s website at www.sec.gov and the Company’s website at www.columbiabank.com, including the “Risk Factors,” “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our annual reports on Form 10-K and quarterly reports on Form 10-Q, (as applicable), factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following: (1) local, national and international economic conditions may be less favorable than expected or have a more direct and pronounced effect on Columbia than expected and adversely affect Columbia’s ability to continue its internal growth at historical rates and maintain the quality of its earning assets; (2) changes in interest rates could significantly reduce net interest income and negatively affect funding sources; (3) projected business increases following strategic expansion or opening or acquiring new branches may be lower than expected; (4) costs or difficulties related to the integration of acquisitions may be greater than expected; (5) competitive pressure among financial institutions may increase significantly; (6) legislation or regulatory requirements or changes may adversely affect the businesses in which Columbia is engaged; and (7) the proposed merger with Pacific Continental Corporation (“Pacific Continental”) may not close when expected or at all because required regulatory, shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all, which may have an effect on the trading prices of Columbia’s stock. We believe the expectations reflected in our forward-looking statements are reasonable, based on information available to us on the date hereof. However, given the described uncertainties and risks, we cannot guarantee our future performance or results of operations and you should not place undue reliance on these forward-looking statements which speak only as of the date hereof. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws. The factors noted above and the risks and uncertainties described in our SEC filings should be considered when reading any forward-looking statements in this release.

Additional Information

In connection with the Agreement and Plan of Merger, dated as of January 9, 2017, by and between Columbia Banking System, Inc. and Pacific Continental, Columbia has filed with the SEC a Registration Statement on Form S-4 that includes a Joint Proxy Statement of Columbia and Pacific Continental and a Prospectus of Columbia, as well as other relevant documents concerning the proposed transaction. Shareholders of Columbia and Pacific Continental are urged to carefully read the Registration Statement and the Joint Proxy Statement/Prospectus regarding the transaction in their entirety and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they contain important information. Shareholders of Columbia and Pacific Continental are also urged to carefully review and consider each of Columbia’s and Pacific Continental’s public filings with the SEC, including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. A definitive Joint Proxy Statement/Prospectus will be sent to the shareholders of each institution seeking any required shareholder approvals.

The Joint Proxy Statement/Prospectus and other relevant materials filed with the SEC may be obtained free of charge at the SEC’s Website at http://www.sec.gov. PACIFIC CONTINENTAL AND COLUMBIA SHAREHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND THE OTHER RELEVANT MATERIALS BEFORE VOTING ON THE TRANSACTION.

Investors will also be able to obtain these documents, free of charge, from Pacific Continental by accessing Pacific Continental’s website at www.therightbank.com under the link “Investor Relations” or from Columbia at www.columbiabank.com under the tab “About” and then under the heading “Investor Relations.” Copies can also be obtained, free of charge, by directing a written request to Columbia, Attention: Corporate Secretary, 1301 A Street, Suite 800, Tacoma, Washington 98401-2156 or to Pacific Continental, Attention: Corporate Secretary, 111 West Seventh Avenue, P.O. Box 10727, Eugene Oregon 97440-2727.

Participants in Solicitation

Columbia and Pacific Continental and their directors and executive officers and certain other persons may be deemed to be participants in the solicitation of proxies from the shareholders of Pacific Continental or Columbia in connection with the transaction. Information about the directors and executive officers of Columbia and their ownership of Columbia common stock is set forth in the proxy statement for Columbia’s 2017 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on April 13, 2017. Information about the directors and executive officers of Pacific Continental and their ownership of Pacific Continental common stock is set forth in Amendment No. 1 on Form 10-K/A to Pacific Continental’s Annual Report on Form 10-K for the year ended December 31, 2016, as filed with the SEC on April 19, 2017. Additional information regarding the interests of those participants and other persons who may be deemed participants in the solicitation may be obtained by reading the Joint Proxy Statement/Prospectus regarding the transaction. Free copies of this document may be obtained as described in the preceding paragraph.



Contacts:	Hadley S. Robbins,
	Interim Chief Executive Officer

	Clint E. Stein,
	Executive Vice President and
	Chief Financial Officer

	Investor Relations
	(253) 305-1921



FINANCIAL STATISTICS
Columbia Banking System, Inc.	Three Months Ended
Unaudited	March 31,				December 31,				March 31,
	2017				2016				2016
Earnings	(dollars in thousands except per share amounts)
Net interest income	$	86,675			$	85,737			$	80,170
Provision for loan and lease losses	$	2,775			$	18			$	5,254
Noninterest income	$	24,859			$	22,330			$	20,646
Noninterest expense	$	68,986			$	65,014			$	65,074
Acquisition-related expense (included in noninterest expense)	$	1,364			$	291			$	2,436
Net income	$	29,199			$	30,718			$	21,259
Per Common Share
Earnings (basic)	$	0.50			$	0.53			$	0.37
Earnings (diluted)	$	0.50			$	0.53			$	0.37
Book value	$	21.86			$	21.52			$	21.70
Averages
Total assets	$	9,473,698			$	9,568,214			$	8,949,212
Interest-earning assets	$	8,520,291			$	8,612,498			$	8,005,945
Loans	$	6,198,215			$	6,200,506			$	5,827,440
Securities, including Federal Home Loan Bank stock	$	2,310,490			$	2,314,521			$	2,147,457
Deposits	$	7,954,653			$	8,105,522			$	7,445,693
Interest-bearing deposits	$	4,118,604			$	4,151,695			$	3,983,314
Interest-bearing liabilities	$	4,263,660			$	4,222,820			$	4,124,582
Noninterest-bearing deposits	$	3,836,049			$	3,953,827			$	3,462,379
Shareholders' equity	$	1,261,652			$	1,274,388			$	1,258,411
Financial Ratios
Return on average assets	1.23		%		1.28		%		0.95		%
Return on average common equity	9.26		%		9.65		%		6.76		%
Average equity to average assets	13.32		%		13.32		%		14.06		%
Net interest margin (tax equivalent)	4.20		%		4.11		%		4.13		%
Efficiency ratio (tax equivalent) (1)	59.95		%		58.35		%		62.63		%
Operating efficiency ratio (tax equivalent) (2)	59.07		%		58.10		%		59.43		%

	March 31,				December 31,
Period end	2017				2016
Total assets	$	9,527,272			$	9,509,607
Loans, net of unearned income	$	6,228,136			$	6,213,423
Allowance for loan and lease losses	$	71,021			$	70,043
Securities, including Federal Home Loan Bank stock	$	2,341,959			$	2,288,817
Deposits	$	8,088,827			$	8,059,415
Core deposits	$	7,794,590			$	7,749,568
Shareholders' equity	$	1,275,343			$	1,251,012
Nonperforming assets
Nonaccrual loans	$	25,547			$	27,756
Other real estate owned ("OREO") and other personal property owned ("OPPO")	4,519				5,998
Total nonperforming assets	$	30,066			$	33,754
Nonperforming loans to period-end loans	0.41		%		0.45		%
Nonperforming assets to period-end assets	0.32		%		0.35		%
Allowance for loan and lease losses to period-end loans	1.14		%		1.13		%
Net loan charge-offs	$	1,797		(3)	$	239		(4)

(1) Noninterest expense divided by the sum of net interest income on a tax equivalent basis and noninterest income on a tax equivalent basis.
(2) The operating efficiency ratio (tax equivalent) is a non-GAAP financial measure. See section titled "Non-GAAP Financial Measures" on the last page of this earnings release for the reconciliation of the operating efficiency ratio (tax equivalent) to the efficiency ratio (tax equivalent).
(3) For the three months ended March 31, 2017.
(4) For the three months ended December 31, 2016.



QUARTERLY FINANCIAL STATISTICS
Columbia Banking System, Inc.	Three Months Ended
Unaudited	March 31,			December 31,			September 30,			June 30,			March 31,
	2017			2016			2016			2016			2016
	(dollars in thousands except per share)
Earnings
Net interest income	$	86,675		$	85,737		$	85,572		$	82,140		$	80,170
Provision for loan and lease losses	$	2,775		$	18		$	1,866		$	3,640		$	5,254
Noninterest income	$	24,859		$	22,330		$	23,166		$	21,940		$	20,646
Noninterest expense	$	68,986		$	65,014		$	67,264		$	63,790		$	65,074
Acquisition-related expense (included in noninterest expense)	$	1,364		$	291		$	—		$	—		$	2,436
Net income	$	29,199		$	30,718		$	27,484		$	25,405		$	21,259
Per Common Share
Earnings (basic)	$	0.50		$	0.53		$	0.47		$	0.44		$	0.37
Earnings (diluted)	$	0.50		$	0.53		$	0.47		$	0.44		$	0.37
Book value	$	21.86		$	21.52		$	21.96		$	21.93		$	21.70
Averages
Total assets	$	9,473,698		$	9,568,214		$	9,493,451		$	9,230,791		$	8,949,212
Interest-earning assets	$	8,520,291		$	8,612,498		$	8,544,876		$	8,285,183		$	8,005,945
Loans	$	6,198,215		$	6,200,506		$	6,179,163		$	5,999,428		$	5,827,440
Securities, including Federal Home Loan Bank stock	$	2,310,490		$	2,314,521		$	2,351,093		$	2,262,012		$	2,147,457
Deposits	$	7,954,653		$	8,105,522		$	7,918,532		$	7,622,266		$	7,445,693
Interest-bearing deposits	$	4,118,604		$	4,151,695		$	4,118,787		$	4,026,384		$	3,983,314
Interest-bearing liabilities	$	4,263,660		$	4,222,820		$	4,295,485		$	4,264,792		$	4,124,582
Noninterest-bearing deposits	$	3,836,049		$	3,953,827		$	3,799,745		$	3,595,882		$	3,462,379
Shareholders' equity	$	1,261,652		$	1,274,388		$	1,278,588		$	1,267,670		$	1,258,411
Financial Ratios
Return on average assets	1.23		%	1.28		%	1.16		%	1.10		%	0.95		%
Return on average common equity	9.26		%	9.65		%	8.60		%	8.02		%	6.76		%
Average equity to average assets	13.32		%	13.32		%	13.47		%	13.73		%	14.06		%
Net interest margin (tax equivalent)	4.20		%	4.11		%	4.13		%	4.10		%	4.13		%
Period end
Total assets	$	9,527,272		$	9,509,607		$	9,586,754		$	9,353,651		$	9,035,932
Loans, net of unearned income	$	6,228,136		$	6,213,423		$	6,259,757		$	6,107,143		$	5,877,283
Allowance for loan and lease losses	$	71,021		$	70,043		$	70,264		$	69,304		$	69,264
Securities, including Federal Home Loan Bank stock	$	2,341,959		$	2,288,817		$	2,372,724		$	2,297,713		$	2,196,407
Deposits	$	8,088,827		$	8,059,415		$	8,057,816		$	7,673,213		$	7,596,949
Core deposits	$	7,794,590		$	7,749,568		$	7,809,064		$	7,447,963		$	7,384,622
Shareholders' equity	$	1,275,343		$	1,251,012		$	1,276,735		$	1,274,479		$	1,260,788
Nonperforming assets
Nonaccrual loans	$	25,547		$	27,756		$	21,366		$	22,915		$	36,891
OREO and OPPO	4,519			5,998			8,994			10,613			12,427
Total nonperforming assets	$	30,066		$	33,754		$	30,360		$	33,528		$	49,318
Nonperforming loans to period-end loans	0.41		%	0.45		%	0.34		%	0.38		%	0.63		%
Nonperforming assets to period-end assets	0.32		%	0.35		%	0.32		%	0.36		%	0.55		%
Allowance for loan and lease losses to period-end loans	1.14		%	1.13		%	1.12		%	1.13		%	1.18		%
Net loan charge-offs	$	1,797		$	239		$	906		$	3,600		$	4,162



LOAN PORTFOLIO COMPOSITION
Columbia Banking System, Inc.
Unaudited	March 31,			December 31,			September 30,			June 30,			March 31,
	2017			2016			2016			2016			2016
Loan Portfolio Composition - Dollars	(dollars in thousands)
Commercial business	$	2,559,247		$	2,551,054		$	2,630,017		$	2,518,682		$	2,401,193
Real estate:
One-to-four family residential	172,581			170,331			168,511			172,957			175,050
Commercial and multifamily residential	2,783,433			2,719,830			2,686,783			2,651,476			2,520,352
Total real estate	2,956,014			2,890,161			2,855,294			2,824,433			2,695,402
Real estate construction:
One-to-four family residential	115,219			121,887			130,163			129,195			133,447
Commercial and multifamily residential	172,896			209,118			202,014			185,315			183,548
Total real estate construction	288,115			331,005			332,177			314,510			316,995
Consumer	318,069			329,261			325,741			325,632			329,902
Purchased credit impaired	138,903			145,660			152,764			161,107			173,201
Subtotal loans	6,260,348			6,247,141			6,295,993			6,144,364			5,916,693
Less: Net unearned income	(32,212		)	(33,718		)	(36,236		)	(37,221		)	(39,410		)
Loans, net of unearned income	6,228,136			6,213,423			6,259,757			6,107,143			5,877,283
Less: Allowance for loan and lease losses	(71,021		)	(70,043		)	(70,264		)	(69,304		)	(69,264		)
Total loans, net	6,157,115			6,143,380			6,189,493			6,037,839			5,808,019
Loans held for sale	$	3,245		$	5,846		$	3,361		$	7,649		$	3,681



	March 31,		December 31,		September 30,		June 30,		March 31,
Loan Portfolio Composition - Percentages	2017		2016		2016		2016		2016
Commercial business	41.1	%	41.1	%	42.0	%	41.2	%	40.9	%
Real estate:
One-to-four family residential	2.8	%	2.7	%	2.7	%	2.8	%	3.0	%
Commercial and multifamily residential	44.7	%	43.7	%	43.0	%	43.6	%	42.9	%
Total real estate	47.5	%	46.4	%	45.7	%	46.4	%	45.9	%
Real estate construction:
One-to-four family residential	1.8	%	2.0	%	2.1	%	2.1	%	2.3	%
Commercial and multifamily residential	2.8	%	3.4	%	3.2	%	3.0	%	3.1	%
Total real estate construction	4.6	%	5.4	%	5.3	%	5.1	%	5.4	%
Consumer	5.1	%	5.3	%	5.2	%	5.3	%	5.6	%
Purchased credit impaired	2.2	%	2.3	%	2.4	%	2.6	%	2.9	%
Subtotal loans	100.5	%	100.5	%	100.6	%	100.6	%	100.7	%
Less: Net unearned income	(0.5	)%	(0.5	)%	(0.6	)%	(0.6	)%	(0.7	)%
Loans, net of unearned income	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%



DEPOSIT COMPOSITION
Columbia Banking System, Inc.
Unaudited
	March 31,		December 31,		September 30,		June 30,		March 31,
	2017		2016		2016		2016		2016
Deposit Composition - Dollars	(dollars in thousands)
Core deposits:
Demand and other non-interest bearing	$	3,958,106	$	3,944,495	$	3,942,434	$	3,652,951	$	3,553,468
Interest bearing demand	985,954		985,293		963,242		957,548		958,469
Money market	1,798,034		1,791,283		1,873,376		1,818,337		1,838,364
Savings	759,002		723,667		714,047		692,694		695,588
Certificates of deposit, less than $250,000	293,494		304,830		315,965		326,433		338,733
Total core deposits	7,794,590		7,749,568		7,809,064		7,447,963		7,384,622

Certificates of deposit, $250,000 or more	74,460		79,424		79,590		72,812		70,571
Certificates of deposit insured by CDARS®	20,994		22,039		16,951		22,755		24,752
Brokered money market accounts	198,768		208,348		152,151		129,590		116,878
Subtotal	8,088,812		8,059,379		8,057,756		7,673,120		7,596,823
Premium resulting from acquisition date fair value adjustment	15		36		60		93		126
Total deposits	$	8,088,827	$	8,059,415	$	8,057,816	$	7,673,213	$	7,596,949



	March 31,		December 31,		September 30,		June 30,		March 31,
Deposit Composition - Percentages	2017		2016		2016		2016		2016
Core deposits:
Demand and other non-interest bearing	48.9	%	48.9	%	48.9	%	47.6	%	46.8	%
Interest bearing demand	12.2	%	12.2	%	12.0	%	12.5	%	12.6	%
Money market	22.2	%	22.2	%	23.2	%	23.7	%	24.2	%
Savings	9.4	%	9.0	%	8.9	%	9.0	%	9.2	%
Certificates of deposit, less than $250,000	3.6	%	3.8	%	3.9	%	4.3	%	4.5	%
Total core deposits	96.3	%	96.1	%	96.9	%	97.1	%	97.3	%

Certificates of deposit, $250,000 or more	0.9	%	1.0	%	1.0	%	0.9	%	0.9	%
Certificates of deposit insured by CDARS®	0.3	%	0.3	%	0.2	%	0.3	%	0.3	%
Brokered money market accounts	2.5	%	2.6	%	1.9	%	1.7	%	1.5	%
Total	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%



CONSOLIDATED STATEMENTS OF INCOME
Columbia Banking System, Inc.	Three Months Ended
Unaudited	March 31,			December 31,			March 31,
	2017			2016			2016
	(in thousands except per share)
Interest Income
Loans	$	74,120		$	74,542		$	70,316
Taxable securities	10,986			9,333			8,017
Tax-exempt securities	2,691			2,724			2,803
Deposits in banks	19			135			38
Total interest income	87,816			86,734			81,174
Interest Expense
Deposits	787			782			742
Federal Home Loan Bank advances	225			77			124
Other borrowings	129			138			138
Total interest expense	1,141			997			1,004
Net Interest Income	86,675			85,737			80,170
Provision for loan and lease losses	2,775			18			5,254
Net interest income after provision for loan and lease losses	83,900			85,719			74,916
Noninterest Income
Deposit account and treasury management fees	7,287			7,196			6,989
Card revenue	5,723			5,803			5,652
Financial services and trust revenue	2,839			2,919			2,821
Loan revenue	3,593			2,954			2,262
Merchant processing revenue	2,019			2,006			2,102
Bank owned life insurance	1,280			1,087			1,116
Investment securities gains, net	—			7			373
Change in FDIC loss-sharing asset	(274		)	(388		)	(1,103		)
Other	2,392			746			434
Total noninterest income	24,859			22,330			20,646
Noninterest Expense
Compensation and employee benefits	40,825			38,196			36,319
Occupancy	7,191			7,690			10,173
Merchant processing expense	1,049			1,018			1,033
Advertising and promotion	817			720			842
Data processing	4,208			4,138			4,146
Legal and professional fees	3,369			2,523			1,325
Taxes, licenses and fees	1,241			1,106			1,290
Regulatory premiums	776			792			1,141
Net cost of operation of other real estate owned	152			612			104
Amortization of intangibles	1,349			1,420			1,583
Other	8,009			6,799			7,118
Total noninterest expense	68,986			65,014			65,074
Income before income taxes	39,773			43,035			30,488
Provision for income taxes	10,574			12,317			9,229
Net Income	$	29,199		$	30,718		$	21,259
Earnings per common share
Basic	$	0.50		$	0.53		$	0.37
Diluted	$	0.50		$	0.53		$	0.37
Dividends paid per common share - regular	$	0.22		$	0.20		$	0.18
Dividends paid per common share - special	$	—		$	0.19		$	0.20
Dividends paid per common share - total	$	0.22		$	0.39		$	0.38
Weighted average number of common shares outstanding	57,388			57,220			57,114
Weighted average number of diluted common shares outstanding	57,394			57,229			57,125



CONSOLIDATED BALANCE SHEETS
Columbia Banking System, Inc.
Unaudited			March 31,			December 31,
			2017			2016
			(in thousands)
ASSETS
Cash and due from banks			$	169,697		$	193,038
Interest-earning deposits with banks			13,124			31,200
Total cash and cash equivalents			182,821			224,238
Securities available for sale at fair value (amortized cost of $2,349,149 and $2,299,037, respectively)			2,331,359			2,278,577
Federal Home Loan Bank stock at cost			10,600			10,240
Loans held for sale			3,245			5,846
Loans, net of unearned income of ($32,212) and ($33,718), respectively			6,228,136			6,213,423
Less: allowance for loan and lease losses			71,021			70,043
Loans, net			6,157,115			6,143,380
FDIC loss-sharing asset			3,239			3,535
Interest receivable			31,345			30,074
Premises and equipment, net			148,541			150,342
Other real estate owned			4,519			5,998
Goodwill			382,762			382,762
Other intangible assets, net			16,282			17,631
Other assets			255,444			256,984
Total assets			$	9,527,272		$	9,509,607
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing			$	3,958,106		$	3,944,495
Interest-bearing			4,130,721			4,114,920
Total deposits			8,088,827			8,059,415
Federal Home Loan Bank advances			15,483			6,493
Securities sold under agreements to repurchase			46,914			80,822
Other liabilities			100,705			111,865
Total liabilities			8,251,929			8,258,595
Commitments and contingent liabilities
	March 31,	December 31,
	2017	2016
Preferred stock (no par value)	(in thousands)
Authorized shares	2,000	2,000
Issued and outstanding	—	9	—			2,217
Common stock (no par value)
Authorized shares	115,000	115,000
Issued and outstanding	58,329	58,042	999,702			995,837
Retained earnings			288,247			271,957
Accumulated other comprehensive loss			(12,606		)	(18,999		)
Total shareholders' equity			1,275,343			1,251,012
Total liabilities and shareholders' equity			$	9,527,272		$	9,509,607



AVERAGE BALANCES AND RATES
Columbia Banking System, Inc.
Unaudited
	Three Months Ended						Three Months Ended
	March 31, 2017						March 31, 2016
	Average Balances		Interest Earned / Paid		Average Rate		Average Balances		Interest Earned / Paid		Average Rate
	(dollars in thousands)
ASSETS
Loans, net(1)(2)	$	6,198,215	$	75,514	4.87	%	$	5,827,440	$	71,298	4.89	%
Taxable securities	1,861,627		10,986		2.36	%	1,689,289		8,017		1.90	%
Tax exempt securities (2)	448,863		4,140		3.69	%	458,168		4,312		3.76	%
Interest-earning deposits with banks	11,586		19		0.66	%	31,048		38		0.49	%
Total interest-earning assets	8,520,291		$	90,659	4.26	%	8,005,945		$	83,665	4.18	%
Other earning assets	178,091						154,336
Noninterest-earning assets	775,316						788,931
Total assets	$	9,473,698					$	8,949,212
LIABILITIES AND SHAREHOLDERS’ EQUITY
Certificates of deposit	$	399,306	$	95	0.10	%	$	448,915	$	144	0.13	%
Savings accounts	738,631		19		0.01	%	675,876		17		0.01	%
Interest-bearing demand	972,560		159		0.07	%	927,948		169		0.07	%
Money market accounts	2,008,107		514		0.10	%	1,930,575		412		0.09	%
Total interest-bearing deposits	4,118,604		787		0.08	%	3,983,314		742		0.07	%
Federal Home Loan Bank advances	81,577		225		1.10	%	50,569		124		0.98	%
Other borrowings	63,479		129		0.81	%	90,699		138		0.61	%
Total interest-bearing liabilities	4,263,660		$	1,141	0.11	%	4,124,582		$	1,004	0.10	%
Noninterest-bearing deposits	3,836,049						3,462,379
Other noninterest-bearing liabilities	112,337						103,840
Shareholders’ equity	1,261,652						1,258,411
Total liabilities & shareholders’ equity	$	9,473,698					$	8,949,212
Net interest income (tax equivalent)			$	89,518					$	82,661
Net interest margin (tax equivalent)					4.20	%					4.13	%

Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $1.6 million and $1.1 million for the three month periods ended March 31, 2017 and March 31, 2016, respectively. The incremental accretion on acquired loans was $4.1 million and $4.7 million for the three months ended March 31, 2017 and 2016, respectively.

Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $1.4 million and $982 thousand for the three months ended March 31, 2017 and 2016, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.4 million and $1.5 million for the three months ended March 31, 2017 and 2016, respectively.



AVERAGE BALANCES AND RATES
Columbia Banking System, Inc.
Unaudited
	Three Months Ended						Three Months Ended
	March 31, 2017						December 31, 2016
	Average Balances		Interest Earned / Paid		Average Rate		Average Balances		Interest Earned / Paid		Average Rate
	(dollars in thousands)
ASSETS
Loans, net(1)(2)	$	6,198,215	$	75,514	4.87	%	$	6,200,506	$	75,838	4.89	%
Taxable securities	1,861,627		10,986		2.36	%	1,853,788		9,333		2.01	%
Tax exempt securities (2)	448,863		4,140		3.69	%	460,733		4,191		3.64	%
Interest-earning deposits with banks	11,586		19		0.66	%	97,471		135		0.55	%
Total interest-earning assets	8,520,291		$	90,659	4.26	%	8,612,498		$	89,497	4.16	%
Other earning assets	178,091						162,591
Noninterest-earning assets	775,316						793,125
Total assets	$	9,473,698					$	9,568,214
LIABILITIES AND SHAREHOLDERS’ EQUITY
Certificates of deposit	$	399,306	$	95	0.10	%	$	410,372	$	114	0.11	%
Savings accounts	738,631		19		0.01	%	720,453		18		0.01	%
Interest-bearing demand	972,560		159		0.07	%	969,104		154		0.06	%
Money market accounts	2,008,107		514		0.10	%	2,051,766		496		0.10	%
Total interest-bearing deposits	4,118,604		787		0.08	%	4,151,695		782		0.08	%
Federal Home Loan Bank advances	81,577		225		1.10	%	10,128		77		3.04	%
Other borrowings	63,479		129		0.81	%	60,997		138		0.90	%
Total interest-bearing liabilities	4,263,660		$	1,141	0.11	%	4,222,820		$	997	0.09	%
Noninterest-bearing deposits	3,836,049						3,953,827
Other noninterest-bearing liabilities	112,337						117,179
Shareholders’ equity	1,261,652						1,274,388
Total liabilities & shareholders’ equity	$	9,473,698					$	9,568,214
Net interest income (tax equivalent)			$	89,518					$	88,500
Net interest margin (tax equivalent)					4.20	%					4.11	%

Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $1.6 million and $1.7 million for the three month periods ended March 31, 2017 and December 31, 2016. The incremental accretion on acquired loans was $4.1 million and $4.3 million for the three months ended March 31, 2017 and December 31, 2016, respectively.

Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $1.4 million and $1.3 million for the three months ended March 31, 2017 and December 31, 2016, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $1.4 million and $1.5 million for the three month periods ended March 31, 2017 and December 31, 2016, respectively.

Non-GAAP Financial Measures

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

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



	Three Months Ended
	March 31,			December 31,			March 31,
	2017			2016			2016
Operating net interest margin non-GAAP reconciliation:	(dollars in thousands)
Net interest income (tax equivalent) (1)	$	89,518		$	88,500		$	82,661
Adjustments to arrive at operating net interest income (tax equivalent):
Incremental accretion income on FDIC purchased credit impaired loans	(2,117		)	(1,199		)	(1,657		)
Incremental accretion income on other acquired loans	(1,948		)	(3,087		)	(3,073		)
Premium amortization on acquired securities	1,462			1,348			2,324
Interest reversals on nonaccrual loans	265			246			453
Operating net interest income (tax equivalent) (1)	$	87,180		$	85,808		$	80,708
Average interest earning assets	$	8,520,291		$	8,612,498		$	8,005,945
Net interest margin (tax equivalent) (1)	4.20		%	4.11		%	4.13		%
Operating net interest margin (tax equivalent) (1)	4.09		%	3.99		%	4.03		%



	Three Months Ended
	March 31,			December 31,			March 31,
	2017			2016			2016
Operating efficiency ratio non-GAAP reconciliation:	(dollars in thousands)
Noninterest expense (numerator A)	$	68,986		$	65,014		$	65,074
Adjustments to arrive at operating noninterest expense:
Acquisition-related expenses	(1,364		)	(291		)	(2,436		)
Net benefit (cost) of operation of OREO and OPPO	(150		)	(612		)	(102		)
FDIC clawback liability expense	54			28			(209		)
Loss on asset disposals	(6		)	(7		)	(160		)
State of Washington Business and Occupation ("B&O") taxes	(1,123		)	(995		)	(1,171		)
Operating noninterest expense (numerator B)	$	66,397		$	63,137		$	60,996

Net interest income (tax equivalent) (1)	$	89,518		$	88,500		$	82,661
Noninterest income	24,859			22,330			20,646
Bank owned life insurance tax equivalent adjustment	689			586			600
Total revenue (tax equivalent) (denominator A)	$	115,066		$	111,416		$	103,907

Operating net interest income (tax equivalent) (1)	$	87,180		$	85,808		$	80,708
Adjustments to arrive at operating noninterest income (tax equivalent):
Investment securities gains, net	—			(7		)	(373		)
Gain on asset disposals	(29		)	(52		)	(54		)
Mortgage loan repurchase liability adjustment	(573		)	(391		)	—
Change in FDIC loss-sharing asset	274			388			1,103
Operating noninterest income (tax equivalent)	25,220			22,854			21,922
Total operating revenue (tax equivalent) (denominator B)	$	112,400		$	108,662		$	102,630
Efficiency ratio (tax equivalent) (numerator A/denominator A)	59.95		%	58.35		%	62.63		%
Operating efficiency ratio (tax equivalent) (numerator B/denominator B)	59.07		%	58.10		%	59.43		%

(1) Tax-exempt interest income has been adjusted to a tax equivalent basis. The amount of such adjustment was an addition to net interest income of $2.8 million for each of the three month periods ended March 31, 2017 and December 31, 2016 and $2.5 million for the three months ended March 31, 2016.


99.1	Press Release dated April 27, 2017 reporting the financial results of Columbia Banking System, Inc. for the quarter ended March 31, 2017 and quarterly cash dividend.