UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________________________________ 

FORM 10-Q

________________________________________________________  

(Mark One)

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

For the quarterly period ended June 30, 2022.

☐ 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 000-20288

 _________________________________________________________________________

COLUMBIA BANKING SYSTEM, INC.

(Exact name of registrant 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 and zip code)

(253) 305-1900

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:
Common Stock, No Par Value	COLB	The Nasdaq Stock Market LLC
(Title of each class)	(Trading symbol)	(Name of each exchange on which registered)

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 x No ¨ 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 x No ¨

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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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.¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes ☐  No x

The number of shares of common stock outstanding at July 31, 2022 was 78,649,458

TABLE OF CONTENTS

		Page
	PART I — FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheets - June 30, 2022 and December 31, 2021	1
	Consolidated Statements of Income - three and six months ended June 30, 2022 and 2021	2
	Consolidated Statements of Comprehensive Income - three and six months ended June 30, 2022 and 2021	3
	Consolidated Statements of Changes in Shareholders’ Equity - three and six months ended June 30, 2022 and 2021	4
	Consolidated Statements of Cash Flows - six months ended June 30, 2022 and 2021	6
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	52
Item 4.	Controls and Procedures	53
	PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	54
Item 1A.	Risk Factors	54
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
Item 3.	Defaults Upon Senior Securities	55
Item 4.	Mine Safety Disclosures	55
Item 5.	Other Information	55
Item 6.	Exhibits	56
	Signatures	57

i

Glossary of Acronyms, Abbreviations and Terms

The acronyms, abbreviations and terms listed below are used in various sections of the Form 10-Q, including “Item 1. Financial Statements” and “Item 2. Management Discussion and Analysis of Financial Condition and Results of Operations.”

ACL	Allowance for Credit Losses	FRB	Federal Reserve Bank
ASC	Accounting Standards Codification	GAAP	Generally Accepted Accounting Principles
ASU	Accounting Standards Update	GDP	Gross Domestic Product
Bank of Commerce	Bank of Commerce Holdings	LIBOR	London Interbank Offering Rate
B&O	Business and Occupation	Nasdaq	National Association of Securities Dealer Automated Quotations
Basel III	A comprehensive capital framework and rules for U.S. banking organizations approved by the FRB and the FDIC in 2013	N/M	Not meaningful
Capital Rules	Risk-based capital standards currently applicable to the Company and the Bank.	OPPO	Other Personal Property Owned
CDI	Core Deposit Intangible	OREO	Other Real Estate Owned
CECL	Current Expected Credit Losses	Pacific Continental	Pacific Continental Corporation
CEO	Chief Executive Officer	PCD	Purchased Credit Deteriorated
CET1	Common Equity Tier 1	PPP	Paycheck Protection Program
CFO	Chief Financial Officer	RSA	Restricted Stock Awards
COVID-19	Novel Coronavirus	RSU	Restricted Stock Units
DCF	Discounted Cash Flow	SBA	Small Business Administration
Dodd-Frank Act	Dodd-Frank Wall Street Reform and Consumer Protection Act	SEC	Securities and Exchange Commission
EPS	Earnings Per Share	SOFR	Secured Overnight Financing Rate
FASB	Financial Accounting Standards Board	TDR	Troubled Debt Restructuring
FDIC	Federal Deposit Insurance Corporation	Umpqua	Umpqua Holdings Corporation
FHLB	Federal Home Loan Bank of Des Moines

ii

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS
Columbia Banking System, Inc.
(Unaudited)
			June 30, 2022		December 31, 2021
ASSETS			(in thousands)
Cash and due from banks			$	239,868	$	153,414
Interest-earning deposits with banks			174,328		671,300
Total cash and cash equivalents			414,196		824,714
Debt securities available for sale at fair value (amortized cost of $5,647,523 and $5,898,041, respectively)			5,122,568		5,910,999
Debt securities held to maturity at amortized cost (fair value of $1,912,526 and $2,122,606, respectively)			2,149,255		2,148,327
Equity securities			13,425		13,425
FHLB stock at cost			10,280		10,280
Loans held for sale			3,718		9,774
Loans, net of unearned income			11,322,387		10,641,937
Less: ACL			149,935		155,578
Loans, net			11,172,452		10,486,359
Interest receivable			57,155		56,019
Premises and equipment, net			168,586		172,144
OREO			33		381
Goodwill			823,172		823,172
Other intangible assets, net			30,140		34,647
Other assets			599,410		455,092
Total assets			$	20,564,390	$	20,945,333
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing			$	8,741,488	$	8,856,714
Interest-bearing			9,215,438		9,153,401
Total deposits			17,956,926		18,010,115
FHLB advances			7,331		7,359
Securities sold under agreements to repurchase			70,349		86,013
Subordinated debentures			10,000		10,000
Junior subordinated debentures			10,310		10,310
Other liabilities			266,256		232,794
Total liabilities			18,321,172		18,356,591
Commitments and contingent liabilities (Note 11)
Shareholders’ equity:
	June 30, 2022	December 31, 2021
	(in thousands)
Preferred stock (no par value)
Authorized shares	2,000	2,000
Common stock (no par value)
Authorized shares	115,000	115,000
Issued	80,805	80,695	1,935,180		1,930,187
Outstanding	78,621	78,511
Retained earnings			763,487		694,227
Accumulated other comprehensive income (loss)			(384,615)		35,162
Treasury stock at cost	2,184	2,184	(70,834)		(70,834)
Total shareholders’ equity			2,243,218		2,588,742
Total liabilities and shareholders’ equity			$	20,564,390	$	20,945,333

See accompanying Notes to unaudited Consolidated Financial Statements.

1

CONSOLIDATED STATEMENTS OF INCOME
Columbia Banking System, Inc.
(Unaudited)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(in thousands except per share amounts)
Interest Income
Loans	$	111,049	$	99,712	$	218,152	$	200,027
Taxable securities	34,622		24,750		71,784		47,566
Tax-exempt securities	3,755		2,826		7,480		5,585
Deposits in banks	887		159		1,182		311
Total interest income	150,313		127,447		298,598		253,489
Interest Expense
Deposits	2,464		1,426		4,260		2,911
FHLB advances and FRB borrowings	73		72		144		144
Subordinated debentures	172		468		316		936
Other borrowings	153		19		227		42
Total interest expense	2,862		1,985		4,947		4,033
Net Interest Income	147,451		125,462		293,651		249,456
Provision (recapture) for credit losses	2,100		(5,500)		(5,700)		(6,300)
Net interest income after provision (recapture) for credit losses	145,351		130,962		299,351		255,756
Noninterest Income
Deposit account and treasury management fees	8,212		6,701		15,325		13,059
Card revenue	5,031		4,773		9,998		8,506
Financial services and trust revenue	4,192		4,245		8,824		7,626
Loan revenue	3,881		4,514		7,074		11,883
Bank owned life insurance	2,024		1,635		3,812		3,195
Investment securities gains, net	—		314		—		314
Other	1,666		548		4,153		1,313
Total noninterest income	25,006		22,730		49,186		45,896
Noninterest Expense
Compensation and employee benefits	57,386		53,450		120,465		105,186
Occupancy	9,632		9,038		20,641		18,044
Data processing and software	9,185		7,402		19,509		15,853
Legal and professional fees	5,182		3,264		11,717		6,079
Amortization of intangibles	2,219		1,852		4,507		3,776
B&O taxes	1,584		1,490		3,173		2,749
Advertising and promotion	1,208		588		1,934		1,348
Regulatory premiums	1,461		1,112		2,997		2,217
Net cost of operation of OREO	116		111		126		48
Other	7,406		5,809		15,363		12,375
Total noninterest expense	95,379		84,116		200,432		167,675
Income before income taxes	74,978		69,576		148,105		133,977
Income tax provision	16,170		14,537		31,775		27,085
Net Income	$	58,808	$	55,039	$	116,330	$	106,892
Earnings per common share
Basic	$	0.75	$	0.77	$	1.49	$	1.50
Diluted	$	0.75	$	0.77	$	1.49	$	1.50
Weighted average number of common shares outstanding	78,049		70,987		77,989		70,924
Weighted average number of diluted common shares outstanding	78,114		71,164		78,099		71,079

See accompanying Notes to unaudited Consolidated Financial Statements.

2

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Columbia Banking System, Inc.
(Unaudited)
	Three Months Ended
	June 30,
	2022		2021
	(in thousands)
Net income	$	58,808	$	55,039
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) from securities:
Net unrealized holding gain (loss) from available for sale debt securities arising during the period, net of tax of $46,306 and $(6,619)	(152,860)		21,850
Reclassification adjustment of net gain from available for sale debt securities arising during the period, net of tax of $0 and $73	—		(241)
Amortization of net unrealized gain for the reclassification of available for sale securities to held to maturity, net of tax of $630 and $105	(2,080)		(345)
Net unrealized gain (loss) from securities, net of reclassification adjustment	(154,940)		21,264
Pension plan liability adjustment:
Amortization of unrecognized net actuarial loss included in net periodic pension cost, net of tax of $(31) and $(34)	100		115
Pension plan liability adjustment, net	100		115
Unrealized gain from cash flow hedging instruments:
Reclassification adjustment for net gain in cash flow hedging instruments included in income, net of tax of $605 and $604	(1,998)		(1,998)
Net unrealized loss from cash flow hedging instruments, net of reclassification adjustment	(1,998)		(1,998)
Other comprehensive income (loss)	(156,838)		19,381
Total comprehensive income (loss)	$	(98,030)	$	74,420

	Six Months Ended
	June 30,
	2022		2021
	(in thousands)
Net income	$	116,330	$	106,892
Other comprehensive loss, net of tax:
Unrealized loss from securities:
Net unrealized holding loss from available for sale debt securities arising during the period, net of tax of $125,065 and $24,463	(412,848)		(80,755)
Reclassification adjustment of net gain from available for sale debt securities arising during the period, net of tax of $0 and $73	—		(241)
Amortization of net unrealized gain for the reclassification of available for sale securities to held to maturity, net of tax of $956 and $105	(3,156)		(345)
Net unrealized loss from securities, net of reclassification adjustment	(416,004)		(81,341)
Pension plan liability adjustment:
Amortization of unrecognized net actuarial loss included in net periodic pension cost, net of tax of $(61) and $(69)	201		230
Pension plan liability adjustment, net	201		230
Unrealized gain from cash flow hedging instruments:
Reclassification adjustment for net gain in cash flow hedging instruments included in income, net of tax of $1,204 and $1,203	(3,974)		(3,975)
Net unrealized loss from cash flow hedging instruments, net of reclassification adjustment	(3,974)		(3,975)
Other comprehensive loss	(419,777)		(85,086)
Total comprehensive income (loss)	$	(303,447)	$	21,806

See accompanying Notes to unaudited Consolidated Financial Statements.

3

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Columbia Banking System, Inc.
(Unaudited)
	Common Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Shareholders’ Equity
	Shares Outstanding	Amount
For the Three Months Ended June 30, 2022	(in thousands except per share amounts)
Balance at April 1, 2022	78,644	$	1,931,076	$	728,314	$	(227,777)	$	(70,834)	$	2,360,779
Net income	—	—		58,808		—		—		58,808
Other comprehensive loss	—	—		—		(156,838)		—		(156,838)
Activity in deferred compensation plan	—	2		—		—		—		2
Issuance of common stock - RSAs and RSUs, net of canceled awards	(23)	4,115		—		—		—		4,115
Purchase and retirement of common stock	—	(13)		—		—		—		(13)
Cash dividends declared on common stock ($0.30 per share)	—	—		(23,635)		—		—		(23,635)
Balance at June 30, 2022	78,621	$	1,935,180	$	763,487	$	(384,615)	$	(70,834)	$	2,243,218
For the Six Months Ended June 30, 2022
Balance at January 1, 2022	78,511	$	1,930,187	$	694,227	$	35,162	$	(70,834)	$	2,588,742
Net income	—	—		116,330		—		—		116,330
Other comprehensive loss	—	—		—		(419,777)		—		(419,777)
Issuance of common stock - employee stock purchase plan	31	1,017		—		—		—		1,017
Activity in deferred compensation plan	—	3		—		—		—		3
Issuance of common stock - RSAs and RSUs, net of canceled awards	187	7,910		—		—		—		7,910
Purchase and retirement of common stock	(108)	(3,937)		—		—		—		(3,937)
Cash dividends declared on common stock ($0.60 per share)	—	—		(47,070)		—		—		(47,070)
Balance at June 30, 2022	78,621	$	1,935,180	$	763,487	$	(384,615)	$	(70,834)	$	2,243,218

See accompanying Notes to unaudited Consolidated Financial Statements.

4

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Columbia Banking System, Inc.
(Unaudited)
	Common Stock			Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Shareholders’ Equity
	Shares Outstanding	Amount
For the Three Months Ended June 30, 2021	(in thousands except per share amounts)
Balance at April 1, 2021	71,739	$	1,661,129	$	607,040	$	77,728	$	(70,834)	$	2,275,063
Net income	—	—		55,039		—		—		55,039
Other comprehensive income	—	—		—		19,381		—		19,381
Activity in deferred compensation plan	—	(8)		—		—		—		(8)
Issuance of common stock - RSAs and RSUs, net of canceled awards	4	3,908		—		—		—		3,908
Purchase and retirement of common stock	(1)	(76)		—		—		—		(76)
Cash dividends declared on common stock ($0.28 per share)	—	—		(20,061)		—		—		(20,061)
Balance at June 30, 2021	71,742	$	1,664,953	$	642,018	$	97,109	$	(70,834)	$	2,333,246
For the Six Months Ended June 30, 2021
Balance at January 1, 2021	71,598	$	1,660,998	$	575,248	$	182,195	$	(70,834)	$	2,347,607
Net income	—	—		106,892		—		—		106,892
Other comprehensive loss	—	—		—		(85,086)		—		(85,086)
Issuance of common stock - employee stock purchase plan	41	1,098		—		—		—		1,098
Activity in deferred compensation plan	—	(8)		—		—		—		(8)
Issuance of common stock - RSAs and RSUs, net of canceled awards	192	6,936		—		—		—		6,936
Purchase and retirement of common stock	(89)	(4,071)		—		—		—		(4,071)
Cash dividends declared on common stock ($0.56 per share)	—	—		(40,122)		—		—		(40,122)
Balance at June 30, 2021	71,742	$	1,664,953	$	642,018	$	97,109	$	(70,834)	$	2,333,246

See accompanying Notes to unaudited Consolidated Financial Statements.

5

CONSOLIDATED STATEMENTS OF CASH FLOWS
Columbia Banking System, Inc.
(Unaudited)
	Six Months Ended June 30,
	2022		2021
	(in thousands)
Cash Flows From Operating Activities
Net income	$	116,330	$	106,892
Adjustments to reconcile net income to net cash provided by operating activities
Recapture for credit losses	(5,700)		(6,300)
Stock-based compensation expense	7,910		6,936
Depreciation, amortization and accretion	22,599		7,056
Investment securities gain, net	—		(314)
Net realized gain on sale of premises and equipment and loans held for investment	(1,339)		(279)
Net realized loss on sale and valuation adjustments of OREO	148		40
Gain on bank owned life insurance death benefit	(610)		(209)
Originations of loans held for sale	(90,137)		(195,632)
Proceeds from sales of loans held for sale	96,022		208,789
Change in fair value of loans held for sale	171		145
Net change in:
Interest receivable	(1,136)		2,484
Interest payable	18		(49)
Other assets	(7,201)		12,583
Other liabilities	24,488		(14,700)
Net cash provided by operating activities	161,563		127,442
Cash Flows From Investing Activities
Loans originated, net of principal collected	(700,946)		(177,399)
Investment in low income housing tax credit partnerships	(271)		—
Purchases of:
Debt securities available for sale	(183,803)		(1,527,512)
Debt securities held to maturity	(97,658)		(22,915)
Loans held for investment	—		(74,383)
Premises and equipment	(3,639)		(3,087)
Proceeds from:
Sales of debt securities available for sale	—		26,914
Principal repayments and maturities of debt securities available for sale	418,967		385,408
Principal repayments and maturities of debt securities held to maturity	86,328		8,711
Sales of premises and equipment and loans held for investment	27,574		4,296
Sales of OREO and OPPO	200		132
Bank owned life insurance death benefit	—		671
Net cash used in investing activities	(453,248)		(1,379,164)

6

CONSOLIDATED STATEMENTS OF CASH FLOWS
Columbia Banking System, Inc.
(Unaudited)
	Six Months Ended June 30,
	2022		2021
Cash Flows From Financing Activities
Net increase (decrease) in deposits	(52,821)		1,475,570
Net decrease in sweep repurchase agreements	(15,664)		(2,865)
Proceeds from:
FHLB advances	20		10
FRB borrowings	20		—
Employee stock purchase plan	1,017		1,098
Payments for:
Repayment of FHLB advances	(20)		(10)
Repayment of FRB borrowings	(20)		—
Common stock dividends	(47,428)		(40,244)
Purchase and retirement of common stock	(3,937)		(4,071)
Net cash provided by (used in) financing activities	(118,833)		1,429,488
Increase (decrease) in cash and cash equivalents	(410,518)		177,766
Cash and cash equivalents at beginning of period	824,714		653,766
Cash and cash equivalents at end of period	$	414,196	$	831,532
Supplemental Information:
Interest paid	$	4,930	$	4,082
Income taxes paid, net of refunds	$	15,393	$	28,474
Non-cash investing and financing activities
Transfer of debt securities available for sale to debt securities held to maturity	$	—	$	2,012,123
Change in dividends payable included in other liabilities	$	(358)	$	(122)

See accompanying Notes to unaudited Consolidated Financial Statements.

7

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 Columbia Banking System, Inc. (“we”, “our”, “Columbia” or the “Company”) and its subsidiaries, including its wholly owned banking subsidiary Columbia State Bank (“Columbia Bank” or the “Bank”) and Columbia Trust Company (“Columbia 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 six months ended June 30, 2022 are not necessarily indicative of results to be anticipated for the year ending December 31, 2022. The accompanying interim unaudited Consolidated Financial Statements should be read in conjunction with the financial statements and related notes contained in the Company’s 2021 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 2021 Annual Report on Form 10-K. There have not been any changes in our significant accounting policies compared to those contained in our 2021 Annual Report on Form 10-K disclosure for the year ended December 31, 2021.

2.Accounting Pronouncements Recently Adopted or Issued

Accounting Standards Adopted in 2022

There are no recently issued accounting standards that are applicable to the Company that were adopted in 2022.

Recently Issued Accounting Standards, Not Yet Adopted

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820) - Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The amendments in this ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and is not considered in measuring fair value. Further, an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. Additionally, the amendments require the disclosures for equity securities subject to contractual sale restrictions to include the fair value of equity securities subject to contractual sale restrictions reflected on the balance sheet, the nature and remaining duration of the restrictions and the circumstances that could cause a lapse in the restrictions. The ASU is effective for interim and annual reporting periods beginning after December 15, 2023; early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s Consolidated Financial Statements.

In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326) - Troubled Debt Restructurings and Vintage Disclosures. The amendments in this ASU enhance disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, the amendments require the disclosure of current-period gross charge-offs by year of origination for financing receivables and net investments in leases within scope. The ASU is effective for interim and annual reporting periods beginning after December 15, 2022; early adoption is permitted. The adoption of this ASU is not expected to have a material impact on the Company’s Consolidated Financial Statements.

3.Business Combinations

Bank of Commerce

On October 1, 2021, the Company completed its acquisition of Bank of Commerce and its wholly-owned banking subsidiary Merchants Bank of Commerce. The Company acquired 100% of the equity interests of Bank of Commerce.

8

The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. The assets and liabilities, both tangible and intangible, were recorded at their fair values as of the October 1, 2021 acquisition date. The application of the acquisition method of accounting resulted in the recognition of goodwill of $57.3 million and a CDI of $15.9 million. The goodwill represents the excess of the purchase price over the fair value of the net assets acquired. The Company paid this premium for a number of reasons, including to expand the Company’s current footprint and to enter the California market and the synergies and economies of scale expected from the acquisition. 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:

	October 1, 2021
	(in thousands)
Merger consideration			$	256,257
Identifiable net assets acquired, at fair value
Assets acquired
Cash and cash equivalents	$	155,180
Investment securities	654,480
FHLB stock	7,463
Loans, net allowance for credit loss	1,084,984
Interest receivable	5,237
Premises and equipment	17,658
Core deposit intangible	15,932
Other assets	41,963
Total assets acquired			1,982,897
Liabilities assumed
Deposits	(1,737,584)
Subordinated debentures	(10,000)
Junior subordinated debentures	(10,310)
Other liabilities	(26,076)
Total liabilities assumed			(1,783,970)
Total fair value of identifiable net assets			198,927
Goodwill			$	57,330

See Note 8, “Goodwill and Other Intangible Assets,” for further discussion of the accounting for goodwill and other intangible assets.

Of the $1.08 billion net loans acquired, $40.3 million exhibited credit deterioration on the date of purchase. The following table provides a summary of these PCD loans at acquisition:

	October 1, 2021
	(in thousands)
Par value of PCD loans acquired	$	43,419
PCD ACL at acquisition	(2,616)
Non-credit discount on PCD loans	(525)
Purchase price of PCD loans	$	40,278

The operating results of the Company reported herein include the operating results produced by the acquired assets and assumed liabilities for the period of January 1, 2022 to June 30, 2022. Disclosure of the amount of Bank of Commerce’s revenue and net income (excluding integration costs) included in Columbia’s Consolidated Statements of Income is impracticable due to the integration of the operations and accounting for this acquisition.

9

For illustrative purposes only, the following table presents certain unaudited pro forma information for the six months ended June 30, 2021. This unaudited, estimated pro forma financial information was calculated as if Bank of Commerce had been acquired as of the beginning of the year prior to the date of acquisition. This unaudited pro forma information combines the historical results of Bank of Commerce 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 as of the beginning of the year prior to the acquisition. 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, the pro forma amounts below do not reflect Columbia’s expectations as of the date of the pro forma information of further operating cost savings and other business synergies expected to be achieved, including revenue growth as a result of the acquisition. As a result, actual amounts would have differed from the unaudited pro forma information presented.

	Unaudited Pro Forma for the
	Six Months Ended June 30,
	2021
	(in thousands, except per share amounts)
Total revenues (net interest income plus noninterest income)	$	324,547
Net income	$	115,073
Earnings per share - basic	$	1.48
Earnings per share - diluted	$	1.48

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Noninterest Expense
Compensation and employee benefits	$	569	$	—	$	939	$	—
Occupancy	101		—		920		—
Data processing and software	381		—		1,421		—
Legal and professional fees	153		510		245		510
Advertising and promotion	—		—		18		—
Other	545		—		794		—
Total impact of merger-related expenses to noninterest expense	$	1,749	$	510	$	4,337	$	510

In addition, related to the pending transaction with Umpqua, the Company recognized $2.2 million and $6.6 million of merger-related expenses for the three and six months ended June 30, 2022. While regulatory approval is still pending, integration planning efforts continue to move forward.

10

4.Securities

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

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
June 30, 2022	(in thousands)
Available for sale
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	3,447,262	$	1,016	$	(309,514)	$	3,138,764
Other asset-backed securities	419,448		—		(39,480)		379,968
State and municipal securities	989,070		629		(111,371)		878,328
U.S. government agency and government-sponsored enterprise securities	240,375		58		(11,005)		229,428
U.S. government securities	182,681		—		(11,362)		171,319
Non-agency collateralized mortgage obligations	368,687		—		(43,926)		324,761
Total available for sale	$	5,647,523	$	1,703	$	(526,658)	$	5,122,568
Held to maturity
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	2,149,255	$	—	$	(236,729)	$	1,912,526
Total held to maturity	$	2,149,255	$	—	$	(236,729)	$	1,912,526
December 31, 2021
Available for sale
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	3,738,616	$	45,077	$	(38,092)	$	3,745,601
Other asset-backed securities	469,052		3,802		(9,791)		463,063
State and municipal securities	983,704		18,525		(4,938)		997,291
U.S. government agency and government-sponsored enterprise securities	252,755		3,095		(3,274)		252,576
U.S. government securities	158,367		—		(831)		157,536
Non-agency collateralized mortgage obligations	295,547		340		(955)		294,932
Total available for sale	$	5,898,041	$	70,839	$	(57,881)	$	5,910,999
Held to maturity
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	2,148,327	$	50	$	(25,771)	$	2,122,606
Total held to maturity	$	2,148,327	$	50	$	(25,771)	$	2,122,606

There was no allowance for credit losses on both available for sale securities and held to maturity securities as of June 30, 2022 and December 31, 2021. All of the Company’s debt securities held to maturity were issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss.

A debt security is placed on nonaccrual status at the time any principal or interest payments become 90 days delinquent. Interest accrued but not received for a security placed on nonaccrual is reversed against interest income. There were no amounts of accrued interest reversed against interest income for the three or six months ended June 30, 2022 and 2021.

Accrued interest receivable for debt securities is included in “Interest receivable” on the Company’s Consolidated Balance Sheet and is not reflected in the balances in the table above. At June 30, 2022 and December 31, 2021, accrued interest receivable for securities available for sale was $18.5 million and $19.2 million, respectively. At June 30, 2022 and December 31, 2021, accrued interest receivable for securities held to maturity was $4.4 million. The Company does not measure an allowance for credit losses for accrued interest receivable.

11

The following table provides the proceeds and both gross realized gains and losses on sales and calls of debt securities available for sale as well as other securities gains and losses for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Proceeds from sales of debt securities available for sale	$	—	$	26,914	$	—	$	26,914
Gross realized gains from sales of debt securities available for sale	$	—	$	751	$	—	$	751
Gross realized losses from sales of debt securities available for sale	—		(437)		—		(437)
Investment securities gains, net	$	—	$	314	$	—	$	314

There were no gains or losses recognized on equity securities during the three and six month periods ended June 30, 2022 and 2021.

The scheduled contractual maturities of debt securities at the period presented below are as follows:

	June 30, 2022
	Available for sale				Held to maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in thousands)
Due within one year	$	82,217	$	82,117	$	—	$	—
Due after one year through five years	1,072,574		1,032,016		218,714		199,431
Due after five years through ten years	1,342,718		1,235,074		1,079,230		963,623
Due after ten years	3,150,014		2,773,361		851,311		749,472
Total debt securities	$	5,647,523	$	5,122,568	$	2,149,255	$	1,912,526

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

	June 30, 2022
	(in thousands)
To secure public funds	$	558,331
To secure borrowings	91,525
Other securities pledged	235,258
Total securities pledged as collateral	$	885,114

12

The following table shows the gross unrealized losses and fair value of the Company’s debt securities available for sale for which an allowance for credit losses has not been recorded, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of the dates presented:

	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
June 30, 2022	(in thousands)
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	2,595,623	$	(249,339)	$	390,944	$	(60,175)	$	2,986,567	$	(309,514)
Other asset-backed securities	265,060		(23,946)		114,909		(15,534)		379,969		(39,480)
State and municipal securities	708,006		(98,857)		73,417		(12,514)		781,423		(111,371)
U.S. government agency and government-sponsored enterprise securities	87,960		(1,781)		117,326		(9,224)		205,286		(11,005)
U.S. government securities	171,319		(11,362)		—		—		171,319		(11,362)
Non-agency collateralized mortgage obligations	324,761		(43,926)		—		—		324,761		(43,926)
Total	$	4,152,729	$	(429,211)	$	696,596	$	(97,447)	$	4,849,325	$	(526,658)
December 31, 2021
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	2,292,062	$	(30,777)	$	176,946	$	(7,315)	$	2,469,008	$	(38,092)
Other asset-backed securities	195,708		(4,823)		117,751		(4,968)		313,459		(9,791)
State and municipal securities	237,354		(3,862)		40,343		(1,076)		277,697		(4,938)
U.S. government agency and government-sponsored enterprise securities	100,813		(1,988)		48,714		(1,286)		149,527		(3,274)
U.S. government securities	157,536		(831)		—		—		157,536		(831)
Non-agency collateralized mortgage obligations	212,259		(955)		—		—		212,259		(955)
Total	$	3,195,732	$	(43,236)	$	383,754	$	(14,645)	$	3,579,486	$	(57,881)

13

Debt securities available for sale

At June 30, 2022, there were 643 U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligation securities in an unrealized loss position. 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 concluded an allowance for credit losses is unnecessary at June 30, 2022.

At June 30, 2022, there were 83 other asset-backed securities in an unrealized loss position. 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 concluded an allowance for credit losses is unnecessary at June 30, 2022.

At June 30, 2022, there were 520 state and municipal government securities in an unrealized loss position. 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 June 30, 2022, 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 concluded an allowance for credit losses is unnecessary at June 30, 2022.

At June 30, 2022, there were 20 U.S. government agency and government-sponsored enterprise securities in an unrealized loss position. 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 concluded an allowance for credit losses is unnecessary at June 30, 2022.

At June 30, 2022, there were 10 U.S. government securities in an unrealized loss position. 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 concluded an allowance for credit losses is unnecessary at June 30, 2022.

At June 30, 2022, there were 56 non-agency collateralized mortgage obligations in an unrealized loss position. 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 concluded an allowance for credit losses is unnecessary at June 30, 2022.

14

5.Loans

The Company’s loan portfolio includes originated and purchased loans. The following is an analysis of the loan portfolio by segment and class (net of unearned income):

	June 30, 2022		December 31, 2021
	(dollars in thousands)
Commercial loans:
Commercial real estate	$	5,251,100	$	4,981,263
Commercial business	3,646,956		3,423,268
Agriculture	853,099		795,715
Construction	482,211		384,755
Consumer loans:
One-to-four family residential real estate	1,042,190		1,013,908
Other consumer	46,831		43,028
Total loans	11,322,387		10,641,937
Less: Allowance for credit losses	(149,935)		(155,578)
Total loans, net	$	11,172,452	$	10,486,359

At June 30, 2022 and December 31, 2021, 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, Oregon, Idaho and California.

At June 30, 2022 and December 31, 2021, $4.24 billion and $3.49 billion of commercial and residential real estate loans were pledged as collateral on FHLB advances and additional borrowing capacity. The Company also pledged $200.3 million and $200.5 million of commercial loans to the FRB for additional borrowing capacity at June 30, 2022 and December 31, 2021, respectively.

Accrued interest receivable for loans is included in “Interest receivable” on the Company’s Consolidated Balance Sheet and is not reflected in the balances in the table above. At June 30, 2022 and December 31, 2021, accrued interest receivable for loans was $34.3 million and $32.4 million, respectively. The Company does not measure an allowance for credit losses for accrued interest receivable.

15

The following is an aging of the recorded investment of the loan portfolio at the dates presented:

	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
June 30, 2022	(in thousands)
Commercial loans:
Commercial real estate	$	5,244,961	$	1,281	$	2,183	$	—	$	3,464	$	2,675	$	5,251,100
Commercial business	3,621,858		14,910		241		—		15,151		9,947		3,646,956
Agriculture	849,483		400		—		—		400		3,216		853,099
Construction	481,238		973		—		—		973		—		482,211
Consumer loans:
One-to-four family residential real estate	1,038,770		1,537		743		—		2,280		1,140		1,042,190
Other consumer	46,693		108		10		—		118		20		46,831
Total	$	11,283,003	$	19,209	$	3,177	$	—	$	22,386	$	16,998	$	11,322,387
	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, 2021	(in thousands)
Commercial loans:
Commercial real estate	$	4,977,781	$	—	$	1,610	$	—	$	1,610	$	1,872	$	4,981,263
Commercial business	3,406,539		2,721		687		—		3,408		13,321		3,423,268
Agriculture	789,112		1,207		—		—		1,207		5,396		795,715
Construction	384,755		—		—		—		—		—		384,755
Consumer loans:
One-to-four family residential real estate	1,010,343		921		211		—		1,132		2,433		1,013,908
Other consumer	42,998		11		—		—		11		19		43,028
Total	$	10,611,528	$	4,860	$	2,508	$	—	$	7,368	$	23,041	$	10,641,937

Loan payments are considered timely when the contractual principal or interest due in accordance with the terms of the loan agreement or any portion thereof is received on the due date of the scheduled payment.

Nonaccrual loans are generally loans placed on a nonaccrual basis when they become 90 days past due or when there are otherwise serious doubts about the collectability of principal or interest within the existing terms of the loan. The Company’s policy is to write-off all accrued interest on loans when they are placed on nonaccrual status.

The following table summarizes written-off interest on nonaccrual loans for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Commercial loans	$	71	$	212	$	139	$	424
Consumer loans	1		2		8		9
Total	$	72	$	214	$	147	$	433

16

The following summarizes the amortized cost of nonaccrual loans for which there was no related ACL for the periods indicated:

	June 30, 2022		December 31, 2021
	(in thousands)
Commercial loans:
Commercial real estate	$	1,760	$	932
Commercial business	4,036		5,131
Agriculture	2,079		3,756
Consumer loans:
One-to-four family residential real estate	751		—
Total	$	8,626	$	9,819

The following is an analysis of loans classified as TDR for the periods indicated:

	Three Months Ended June 30, 2022					Three Months Ended June 30, 2021
	Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(dollars in thousands)
Commercial loans:
Commercial business	—	—		—		4	$	1,757	$	1,757
Total	—	$	—	$	—	4	$	1,757	$	1,757

	Six Months Ended June 30, 2022					Six Months Ended June 30, 2021
	Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(dollars in thousands)
Commercial loans:
Commercial real estate	—	$	—	$	—	1	$	628	$	628
Commercial business	—	—		—		11	2,600		2,600
Agriculture	1	633		633		—	—		—
Consumer loans:
One-to-four family residential real estate	—	—		—		2	140		140
Total	1	$	633	$	633	14	$	3,368	$	3,368

The Company’s loans classified as TDR are loans that have been modified or with respect to which 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 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. The concessions granted in the restructurings, summarized in the table above, largely consisted of maturity extensions, interest rate modifications or a combination of both. In limited circumstances, a reduction in the principal balance of the loan could also be made as a concession. Loans classified as TDR are included with the loans collectively measured for credit losses.

The Company had commitments to lend $299 thousand of additional funds on loans classified as TDR as of June 30, 2022. The Company had $1.5 million of such commitments at December 31, 2021. The Company had no loans classified as TDR that defaulted within 12 months of being classified as TDR during the three and six months ended June 30, 2022 and December 31, 2021.

17

6.Allowance for Credit Losses and Allowance for Unfunded Commitments and Letters of Credit

The ACL is determined through quarterly assessments of the present value of expected future cash flows within the loan portfolio, which, are deducted from the loan’s amortized cost basis to determine the expected credit losses of the loan portfolio. We estimate the ACL using relevant and reliable available information, which is derived from both internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Additions to and recaptures from the ACL are charged to current period earnings through the provision for credit losses. Loan amounts that are determined to be uncollectible are charged directly against the ACL and netted against amounts recovered on previously charged-off loans.

For the purpose of calculating portfolio level reserves, we have segmented our loan portfolio into two portfolio segments (Commercial and Consumer). The Commercial and Consumer portfolio segments are then further broken down into loan classes by risk characteristics. The risk characteristics include regulatory call codes, type of industry, risk ratings and collateral type.

The ACL is comprised of reserves measured on a collective (pool) basis using a quantitative DCF model for all loan classes with similar risk characteristics and then qualitatively adjusted for large loan concentrations, policy exemptions granted and other factors. The quantitative DCF model utilizes anticipated period cash flows determined on a loan-level basis. The anticipated cash flows take into account contractual principal and interest payments, anticipated segment level prepayments, probability of defaults and historical loss given defaults. The majority of our loan classes utilize regression models to calculate probability of defaults, in which macroeconomic factors are correlated to historical quarterly defaults. The Commercial segment multi-factor models utilize a mix of 15 macroeconomic factors, including the four most commonly used factors: Real GDP, National Unemployment Rate, Disposable Personal Income and Private Inventories. The Consumer segment multi-factor models utilize a mix of three macroeconomic factors: National Unemployment Rate, Home Price Index and Disposable Income. The Company utilizes an 18 month reasonable and supportable forecast for the macroeconomic factors, after which the probability of default reverts to its historical mean using a straight-line basis constructed on each macroeconomic factor’s absolute historical quarterly change.

Loans are individually measured for credit losses if they do not share similar risk characteristics of other loans within their respective pools. Individually measured loans are primarily nonaccrual and collateral dependent with balances equal to or greater than $500,000 and for which the borrower is experiencing financial difficulty such that full satisfaction of the contractual terms of the loan is in question. Commercial real estate loans are secured by commercial real estate, including owner occupied and non-owner occupied commercial real estate, as well as multifamily residential real estate. Commercial business loans are primarily secured by non-real estate collateral, including equipment and other non-real estate fixed assets, inventory, receivables and cash. Agricultural loans are secured by farmland and other agricultural real estate, as well as equipment, inventory, such as crops and livestock, non-real estate fixed assets and cash. Construction loans are secured by one-to-four family residential real estate and commercial real estate in varying stages of development. One-to-four family residential real estate loans are secured by one-to-four family residential properties. Other consumer loans are secured by personal property. For collateral dependent loans, the Company calculates the allowance as the difference between the amortized cost of the loan and the fair market value of the collateral. The fair market value of the collateral is determined by either the discounted expected future cash flows from the operation of the collateral or the appraised value of the collateral, less costs to sell. If the fair value of the collateral is greater than the amortized cost of the loan, no reserve is recorded.

The Company also records an allowance for credit losses on unfunded loan commitments and letters of credit. We estimate expected credit losses on unfunded commitments in which we are exposed to credit risk, unless we have the option to unconditionally cancel the obligation. Expected credit losses are calculated based on the likelihood that funding will occur and an estimate of what will be funded by analyzing the most recent four-quarter utilization rates, current utilization and our quantitative ACL rate. The allowance for unfunded commitments and letters of credit is included in “Other Liabilities” on the Consolidated Balance Sheets, with changes to the balance being charged to noninterest expense.

18

We do not measure an allowance for credit losses on accrued interest receivable balances because these balances are written-off in a timely manner as a reduction to interest income when loans are placed on nonaccrual status.

The following tables show a detailed analysis of the ACL for the periods indicated:

	Beginning Balance		Charge-offs		Recoveries		Provision (Recapture)		Ending Balance
Three Months Ended June 30, 2022	(in thousands)
Commercial loans:
Commercial real estate	$	57,307	$	(299)	$	147	$	(36)	$	57,119
Commercial business	50,474		(92)		797		806		51,985
Agriculture	8,010		(1)		24		862		8,895
Construction	5,399		—		136		379		5,914
Consumer loans:
One-to-four family residential real estate	24,356		(3)		291		(18)		24,626
Other consumer	1,403		(241)		127		107		1,396
Total	$	146,949	$	(636)	$	1,522	$	2,100	$	149,935

	Beginning Balance		Charge-offs		Recoveries		Provision (Recapture)		Ending Balance
Six Months Ended June 30, 2022
Commercial loans:
Commercial real estate	$	61,254	$	(299)	$	161	$	(3,997)	$	57,119
Commercial business	54,712		(1,724)		1,088		(2,091)		51,985
Agriculture	8,148		(24)		149		622		8,895
Construction	5,397		—		144		373		5,914
Consumer loans:
One-to-four family residential real estate	24,123		(3)		585		(79)		24,626
Other consumer	1,944		(487)		467		(528)		1,396
Total	$	155,578	$	(2,537)	$	2,594	$	(5,700)	$	149,935

	Beginning Balance		Charge-offs		Recoveries		Provision (Recapture)		Ending Balance
Three Months Ended June 30, 2021	(in thousands)
Commercial loans:
Commercial real estate	$	57,050	$	(316)	$	16	$	(3,500)	$	53,250
Commercial business	58,405		(971)		874		(754)		57,554
Agriculture	9,487		(122)		5		(1,450)		7,920
Construction	6,551		—		521		(513)		6,559
Consumer loans:
One-to-four family residential real estate	15,638		(146)		503		524		16,519
Other consumer	1,163		(385)		215		193		1,186
Total	$	148,294	$	(1,940)	$	2,134	$	(5,500)	$	142,988

	Beginning Balance		Charge-offs		Recoveries		Provision (Recapture)		Ending Balance
Six Months Ended June 30, 2021
Commercial loans:
Commercial real estate	$	68,934	$	(316)	$	52	$	(15,420)	$	53,250
Commercial business	45,250		(4,310)		4,088		12,526		57,554
Agriculture	9,052		(122)		17		(1,027)		7,920
Construction	7,636		—		567		(1,644)		6,559
Consumer loans:
One-to-four family residential real estate	16,875		(146)		554		(764)		16,519
Other consumer	1,393		(512)		276		29		1,186
Total	$	149,140	$	(5,406)	$	5,554	$	(6,300)	$	142,988

19

The $5.6 million decrease in the ACL at June 30, 2022 compared to the ACL at December 31, 2021 was primarily due to significant improvements in portfolio risk ratings. Additionally, problem loans decreased during the period and their percentage within the portfolio is now near pre-pandemic levels. Specifically regarding the forecast used in the June 30, 2022 estimate, management expects the forecasted national unemployment rate to be near pre-pandemic levels early in the forecast period, increasing a little later in the forecast period. Additionally, the commercial real estate index is expected to grow more slowly throughout the year. The home price index is projected to moderate over the forecast period and real GDP growth is projected to slow in 2022. The models used for calculating the ACL are sensitive to changes in these and other economic factors, which could result in volatility as these assumptions change over time. The ACL at June 30, 2022 does not include a reserve for the PPP loans as these loans are fully guaranteed by the SBA.

Changes in the allowance for unfunded commitments and letters of credit, a component of “Other liabilities” in the Consolidated Balance Sheets, are summarized as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Beginning balance	$	9,000	$	9,800	$	8,500	$	8,300
Net changes in the allowance for unfunded commitments and letters of credit	—		200		500		1,700
Ending balance	$	9,000	$	10,000	$	9,000	$	10,000

Credit Quality Indicators

The extension of credit in the form of loans or other credit products to consumer and commercial clients 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 and type of borrower and by limiting the aggregation of debt to a single borrower.

We evaluate the credit quality of our loan portfolio using regulatory risk ratings, which are based on relevant information about the borrower’s financial condition, including current financial condition, historical payment experience, credit documentation and current economic trends. Risk ratings are reviewed and updated whenever appropriate, with more periodic reviews as the risk and dollar value of the loss on the loan increases. All loans risk rated special mention or worse with amortized costs exceeding $250 thousand are reviewed at least quarterly with more frequent review for specific loans.

Pass rated 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 rated 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 reviewed to assess the ability of our borrowers to service all interest and principal obligations and, as a result, the risk rating or accrual status may be adjusted accordingly. Loans risk rated as Substandard reflect loans where a loss is possible if loan weaknesses are not corrected. Doubtful rated loans have a high probability of loss; however, the amount of loss has not yet been determined. Loss rated loans are considered uncollectible and when identified, are charged-off.

20

The following is an analysis of the credit quality of our loan portfolio as of the periods indicated:

													Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
	Term Loans
	Amortized Cost Basis by Origination Year
	2022		2021		2020		2019		2018		Prior						Total
June 30, 2022	(in thousands)
Commercial loans:
Commercial real estate
Pass	$	705,896	$	1,033,579	$	709,061	$	629,353	$	450,830	$	1,490,341	$	54,099	$	6,325	$	5,079,484
Special mention	—		1,882		1,373		30,655		1,424		26,442		—		—		61,776
Substandard	—		2,187		9,460		22,464		4,274		70,421		999		35		109,840
Total commercial real estate	$	705,896	$	1,037,648	$	719,894	$	682,472	$	456,528	$	1,587,204	$	55,098	$	6,360	$	5,251,100
Commercial business
Pass	$	305,290	$	742,045	$	386,970	$	239,935	$	191,713	$	306,756	$	1,313,072	$	5,325	$	3,491,106
Special mention	—		5,434		1,924		6,877		311		205		22,562		206		37,519
Substandard	—		4,253		3,697		18,494		23,571		30,124		37,477		715		118,331
Total commercial business	$	305,290	$	751,732	$	392,591	$	265,306	$	215,595	$	337,085	$	1,373,111	$	6,246	$	3,646,956
Agriculture
Pass	$	63,852	$	134,066	$	77,772	$	75,835	$	24,957	$	108,954	$	325,438	$	666	$	811,540
Special mention	—		152		—		196		—		—		618		—		966
Substandard	—		1,524		6,621		548		1,134		2,753		28,013		—		40,593
Total agriculture	$	63,852	$	135,742	$	84,393	$	76,579	$	26,091	$	111,707	$	354,069	$	666	$	853,099
Construction
Pass	$	106,490	$	246,371	$	40,102	$	14,137	$	2,702	$	4,849	$	64,558	$	—	$	479,209
Special mention	—		761		—		—		453		—		—		—		1,214
Substandard	—		—		—		1,737		—		51		—		—		1,788
Total construction	$	106,490	$	247,132	$	40,102	$	15,874	$	3,155	$	4,900	$	64,558	$	—	$	482,211
Consumer loans:
One-to-four family residential real estate
Pass	$	88,455	$	368,446	$	128,930	$	44,689	$	41,821	$	102,116	$	264,454	$	429	$	1,039,340
Substandard	—		751		77		—		515		1,247		3		257		2,850
Total one-to-four family real estate	$	88,455	$	369,197	$	129,007	$	44,689	$	42,336	$	103,363	$	264,457	$	686	$	1,042,190
Other consumer
Pass	$	3,931	$	3,671	$	1,934	$	1,415	$	1,899	$	10,082	$	23,855	$	5	$	46,792
Substandard	—		25		—		3		—		11		—		—		39
Total consumer	$	3,931	$	3,696	$	1,934	$	1,418	$	1,899	$	10,093	$	23,855	$	5	$	46,831
Total	$	1,273,914	$	2,545,147	$	1,367,921	$	1,086,338	$	745,604	$	2,154,352	$	2,135,148	$	13,963	$	11,322,387
Less:
Allowance for credit losses																	149,935
Loans, net																	$	11,172,452

21

													Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
	Term Loans
	Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior						Total
December 31, 2021	(in thousands)
Commercial loans:
Commercial real estate
Pass	$	1,068,493	$	760,545	$	650,593	$	492,348	$	515,233	$	1,180,115	$	74,754	$	3,644	$	4,745,725
Special mention	2,252		—		19,016		6,196		163		27,270		—		2,199		57,096
Substandard	4,119		5,897		45,769		9,112		29,917		82,599		1,029		—		178,442
Total commercial real estate	$	1,074,864	$	766,442	$	715,378	$	507,656	$	545,313	$	1,289,984	$	75,783	$	5,843	$	4,981,263
Commercial business
Pass	$	891,957	$	426,004	$	280,823	$	217,605	$	144,363	$	232,356	$	1,028,616	$	35,411	$	3,257,135
Special mention	621		135		6,097		747		105		51		34,256		236		42,248
Substandard	4,329		4,610		18,393		28,066		20,568		27,462		18,796		1,661		123,885
Total commercial business	$	896,907	$	430,749	$	305,313	$	246,418	$	165,036	$	259,869	$	1,081,668	$	37,308	$	3,423,268
Agriculture
Pass	$	147,561	$	87,964	$	74,658	$	29,739	$	46,058	$	79,693	$	266,573	$	5,448	$	737,694
Special mention	162		—		445		—		—		—		565		—		1,172
Substandard	—		7,717		9,148		1,616		5,532		1,833		29,125		1,878		56,849
Total agriculture	$	147,723	$	95,681	$	84,251	$	31,355	$	51,590	$	81,526	$	296,263	$	7,326	$	795,715
Construction
Pass	$	228,661	$	53,880	$	35,795	$	3,183	$	3,285	$	2,189	$	55,765	$	—	$	382,758
Substandard	—		—		1,748		—		—		249		—		—		1,997
Total construction	$	228,661	$	53,880	$	37,543	$	3,183	$	3,285	$	2,438	$	55,765	$	—	$	384,755
Consumer loans:
One-to-four family real estate
Pass	$	390,153	$	140,799	$	56,520	$	51,549	$	32,447	$	111,307	$	222,747	$	1,347	$	1,006,869
Substandard	85		470		183		562		234		4,736		485		284		7,039
Total one-to-four family real estate	$	390,238	$	141,269	$	56,703	$	52,111	$	32,681	$	116,043	$	223,232	$	1,631	$	1,013,908
Other consumer
Pass	$	7,045	$	2,711	$	1,950	$	13,489	$	560	$	1,277	$	15,853	$	97	$	42,982
Substandard	—		—		—		—		1		13		23		9		46
Total consumer	$	7,045	$	2,711	$	1,950	$	13,489	$	561	$	1,290	$	15,876	$	106	$	43,028
Total	$	2,745,438	$	1,490,732	$	1,201,138	$	854,212	$	798,466	$	1,751,150	$	1,748,587	$	52,214	$	10,641,937
Less:
Allowance for credit losses																	155,578
Loans, net																	$	10,486,359

22

7.Other Real Estate Owned

The following tables set forth activity in OREO for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Balance, beginning of period	$	381	$	521	$	381	$	553
Valuation adjustments	(149)		(140)		(149)		(140)
Proceeds from sale of OREO property	(200)		—		(200)		(132)
Gain on sale of OREO, net	1		—		1		100
Balance, end of period	$	33	$	381	$	33	$	381

At June 30, 2022, there were no foreclosed residential real estate properties held as OREO. Additionally, there were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process.

8.Goodwill and Other Intangible Assets

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.

Our CDIs are evaluated for impairment if events and circumstances indicate a possible impairment. Each CDI is amortized on an accelerated basis over an estimated life of 10 years.

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Goodwill
Total goodwill	$	823,172	$	765,842	$	823,172	$	765,842
Other intangible assets, net
CDI:
Gross CDI balance at beginning of period (1)	88,931		105,473		88,931		105,473
Accumulated amortization at beginning of period	(57,491)		(81,582)		(55,203)		(79,658)
CDI, net at beginning of period	31,440		23,891		33,728		25,815
CDI current period amortization	(2,219)		(1,852)		(4,507)		(3,776)
Total CDI, net at end of period	29,221		22,039		29,221		22,039
Intangible assets not subject to amortization	919		919		919		919
Other intangible assets, net at end of period	30,140		22,958		30,140		22,958
Total goodwill and other intangible assets at end of period	$	853,312	$	788,800	$	853,312	$	788,800

__________

(1) For the three and six months ended June 30, 2022, the gross CDI balance, beginning of period excludes fully amortized amounts. Prior period columns has not been adjusted.

23

The following table provides the estimated future amortization expense of our CDI for the remaining six months ending December 31, 2022 and the succeeding four years:

	Total
	(in thousands)
Remainder of 2022	$	4,191
2023	7,082
2024	5,673
2025	4,366
2026	3,225

9. Revolving Line of Credit

The Company has a $15.0 million short-term credit facility with an unaffiliated bank. This facility, which expires May 25, 2023, has a variable interest rate and provides the Company additional liquidity, if needed, for various corporate activities. There was no outstanding balance at both June 30, 2022 and December 31, 2021. The credit agreement requires the Company to comply with certain covenants including those related to asset quality and capital levels. The Company was in compliance with all covenants associated with this facility at June 30, 2022.

10.Derivatives, Hedging Activities and Balance Sheet Offsetting

The Company is exposed to certain risks arising from both its business and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity and credit risk, primarily by managing the amount, sources and duration of its assets and liabilities as well as the use of derivative financial instruments. Specifically, the Company enters into interest rate-based derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts. The Company’s derivative financial instruments are used to manage differences in the amount, timing and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s loan portfolio.

The Company’s objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company used an interest rate collar as part of its interest rate risk management strategy. Interest rate collars designated as cash flow hedges involve the payments of variable-rate amounts if interest rates rise above the cap strike rate on the contract and receipts of variable-rate amounts if interest rates fall below the floor strike rate on the contract. These derivative contracts were used to hedge the variable cash flows associated with existing variable-rate assets.

With respect to derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income (loss) and subsequently reclassified into interest income in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income (loss) related to derivatives are reclassified to interest income as interest payments are received on the Company’s variable-rate assets. During the next 12 months, the Company estimates that there will be $10.4 million reclassified as an increase to interest income.

The Company may use derivatives to hedge the risk or changes in the fair values of interest rate lock commitments and residential mortgage loans held for sale. These derivatives are not designated as hedging instruments. Rather, they are accounted for as free-standing derivatives, or economic hedges, with changes in the fair value of the derivatives reported in income. The Company primarily utilizes interest rate forward loan sales contracts in its derivative risk management strategy.

24

The Company enters into forward delivery contracts to sell residential mortgage loans to broker-dealers at specific prices and dates in order to hedge the interest rate risk in its portfolio of mortgage loans held for sale and its residential mortgage interest rate lock commitments. Credit risk associated with forward contracts is limited to the replacement cost of those forward contracts in a gain position. There were no counterparty default losses on forward contracts during the three and six months ended June 30, 2022 and 2021. Market risk with respect to forward contracts arises principally from changes in the value of contractual positions due to changes in interest rates. The Bank limits its exposure to market risk by monitoring differences between commitments to customers and forward contracts with broker-dealers. In the event the Company has forward delivery contract commitments in excess of available mortgage loans, the Company completes the transaction by either paying or receiving a fee to or from the broker-dealer equal to the increase or decrease in the market value of the forward contract. At June 30, 2022 and December 31, 2021, the Bank had commitments to originate mortgage loans held for sale totaling $8.8 million and $21.8 million, respectively, and forward sales commitments of $7.5 million and $18.5 million, respectively, which are used to hedge both on-balance sheet and off-balance sheet exposures.

In addition, 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 June 30, 2022 and December 31, 2021 was $522.5 million and $570.2 million, respectively.

The following table presents the fair value of derivatives, as well as their classification on the Consolidated Balance Sheet as of the dates presented:

	Asset Derivatives						Liability Derivatives
	June 30, 2022			December 31, 2021			June 30, 2022			December 31, 2021
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
	(in thousands)
Derivatives not designated as hedging instruments:
Interest rate lock commitments	Other assets	$	90	Other assets	$	356	Other liabilities	$	—	Other liabilities	$	—
Interest rate forward loan sales contracts	Other assets	$	—	Other assets	$	—	Other liabilities	$	20	Other liabilities	$	27
Interest rate swap contracts	Other assets	$	24,063	Other assets	$	24,257	Other liabilities	$	24,063	Other liabilities	$	24,257

The table below presents the effect of cash flow hedge accounting on accumulated other comprehensive income (loss) for the periods indicated:

	Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
		Three Months Ended June 30,
		2022		2021
		(in thousands)
Interest rate collar	Interest income	$	2,603	$	2,602
		Six Months Ended June 30,
		2022		2021
		(in thousands)
Interest rate collar	Interest income	$	5,178	$	5,178

25

In January 2019, the Company entered into a $500.0 million notional interest rate collar with a five-year term. In October 2020, the collar was terminated and resulted in a $34.4 million realized gain that was recorded in accumulated other comprehensive income, net of deferred income taxes. The gain will amortize through February 2024 into interest income. The gain will be amortized in this manner as long as the cash flows pertaining to the hedged item are expected to occur.

The following table summarizes the types of derivatives not designated as hedging instruments and the gains (losses) recorded during the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Interest rate lock commitments	$	53	$	(340)	$	(266)	$	(511)
Interest rate forward loan sales contracts	(333)		(527)		7		143
Interest rate swap contracts	—		(40)		—		72
Total derivative gains (losses)	$	(280)	$	(907)	$	(259)	$	(296)

The gains and losses on the Company’s mortgage banking derivatives are included in loan revenue. Mark-to-market gains and losses on the Company’s interest rate swap contracts are recorded to “Other” noninterest expense.

The Company is party to interest rate swap contracts and repurchase agreements that are subject to enforceable master netting arrangements or similar agreements. Under these agreements, the Company may have the right to net settle multiple contracts with the same counterparty.

The following tables show the gross interest rate swap contracts, collar agreements and repurchase agreements in the Consolidated Balance Sheets and the respective collateral received or pledged in the form of cash or other financial instruments. The collateral amounts in these tables are limited to the outstanding balances of the related asset or liability. Therefore, instances of over-collateralization are not shown.

	Gross Amounts of Recognized Assets/Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets/Liabilities Presented in the Consolidated Balance Sheets		Gross Amounts Not Offset in the Consolidated Balance Sheets
							Collateral Pledged/Received		Net Amount
June 30, 2022	(in thousands)
Assets
Interest rate swap contracts	$	24,063	$	—	$	24,063	$	(24,063)	$	—
Liabilities
Interest rate swap contracts	$	24,063	$	—	$	24,063	$	(180)	$	23,883
Repurchase agreements	$	70,349	$	—	$	70,349	$	(70,349)	$	—
December 31, 2021
Assets
Interest rate swap contracts	$	24,257	$	—	$	24,257	$	(450)	$	23,807
Liabilities
Interest rate swap contracts	$	24,257	$	—	$	24,257	$	(20,747)	$	3,510
Repurchase agreements	$	86,013	$	—	$	86,013	$	(86,013)	$	—

The Company’s agreements with each of its derivative counterparties provide that if the Company defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

26

The following table presents the class of collateral pledged for repurchase agreements as well as the remaining contractual maturity of the repurchase agreements:

	Remaining contractual maturity of the agreements
	Overnight and continuous		Up to 30 days		30 - 90 days		Greater than 90 days		Total
June 30, 2022	(in thousands)
Class of collateral pledged for repurchase agreements
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	70,349	$	—	$	—	$	—	$	70,349
Gross amount of recognized liabilities for repurchase agreements									70,349
Amounts related to agreements not included in offsetting disclosure									$	—

The collateral utilized for the Company’s repurchase agreements is subject to market fluctuations as well as prepayments of principal. The Company monitors the risk of the fair value of its pledged collateral falling below acceptable amounts based on the type of the underlying repurchase agreement. The pledged collateral related to the Company’s $70.3 million sweep repurchase agreements, which mature on an overnight basis, is monitored on a daily basis as the underlying sweep accounts can have frequent transaction activity and the amount of pledged collateral is adjusted as necessary.

11.Commitments and Contingent Liabilities

Lease Commitments: The Company’s lease commitments consist primarily of leased locations under various non-cancellable operating leases that expire between 2022 and 2043. The majority of the leases contain renewal options and provisions for increases in rental rates based on an agreed upon index or predetermined escalation schedule.

Financial Instruments with Off-Balance Sheet Risk: In the normal course of business, the Company makes loan commitments (typically unfunded loans and unused lines of credit) and issues standby letters of credit to accommodate the financial needs of its customers. At June 30, 2022 and December 31, 2021, the Company’s loan commitments amounted to $3.71 billion and $3.50 billion, respectively.

Standby letters of credit commit the Company to make payments on behalf of customers under specified conditions. Historically, no significant losses have been incurred by the Company under standby letters of credit. Both arrangements have credit risk essentially the same as that involved in extending loans to customers and are subject to the Company’s normal credit policies, including collateral requirements, where appropriate. Standby letters of credit were $34.2 million and $36.0 million at June 30, 2022 and December 31, 2021, respectively. Commercial and similar letters of credit and other off-balance sheet liabilities were $66 thousand as of June 30, 2022, while there were none at December 31, 2021.

Legal Proceedings: The Company and its subsidiaries are from time to time defendants in and are threatened with various legal proceedings arising from their regular business activities. Management, after consulting with legal counsel, is of the opinion that the ultimate liability, if any, resulting from these pending or threatened actions and proceedings will not have a material effect on the financial statements of the Company.

12.Shareholders’ Equity

Dividends:

The following table summarizes year-to-date dividend activity:

Declared	Regular Cash Dividends Per Common Share		Record Date	Paid Date
January 19, 2022	$	0.30	February 2, 2022	February 16, 2022
April 21, 2022	$	0.30	May 4, 2022	May 18, 2022

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.

27

Subsequent to quarter end, on July 21, 2022, the Company declared a regular quarterly cash dividend of $0.30 per common share payable on August 17, 2022 to shareholders of record at the close of business on August 3, 2022.

13.Accumulated Other Comprehensive Income (Loss)

The following table shows changes in accumulated other comprehensive income (loss) by component for the periods indicated:

	Unrealized Gains and Losses on Available for Sale Securities (1)		Unrealized Gains and Losses on Pension Plan Liability (1)		Unrealized Gains and Losses on Hedging Instruments (1)		Total (1)
Three Months Ended June 30, 2022	(in thousands)
Beginning balance	$	(237,930)	$	(4,711)	$	14,864	$	(227,777)
Other comprehensive loss before reclassifications	(152,860)		—		—		(152,860)
Amounts reclassified from accumulated other comprehensive loss (2)	(2,080)		100		(1,998)		(3,978)
Net current-period other comprehensive income (loss)	(154,940)		100		(1,998)		(156,838)
Ending balance	$	(392,870)	$	(4,611)	$	12,866	$	(384,615)
Three Months Ended June 30, 2021
Beginning balance	$	60,569	$	(5,718)	$	22,877	$	77,728
Other comprehensive income before reclassifications	21,850		—		—		21,850
Amounts reclassified from accumulated other comprehensive income (2)	(586)		115		(1,998)		(2,469)
Net current-period other comprehensive income (loss)	21,264		115		(1,998)		19,381
Ending balance	$	81,833	$	(5,603)	$	20,879	$	97,109
Six Months Ended June 30, 2022
Beginning balance	$	23,134	$	(4,812)	$	16,840	$	35,162
Other comprehensive loss before reclassifications	(412,848)		—		—		(412,848)
Amounts reclassified from accumulated other comprehensive income (2)	(3,156)		201		(3,974)		(6,929)
Net current-period other comprehensive income (loss)	(416,004)		201		(3,974)		(419,777)
Ending balance	$	(392,870)	$	(4,611)	$	12,866	$	(384,615)
Six Months Ended June 30, 2021
Beginning balance	$	163,174	$	(5,833)	$	24,854	$	182,195
Other comprehensive loss before reclassifications	(80,755)		—		—		(80,755)
Amounts reclassified from accumulated other comprehensive income (2)	(586)		230		(3,975)		(4,331)
Net current-period other comprehensive income (loss)	(81,341)		230		(3,975)		(85,086)
Ending balance	$	81,833	$	(5,603)	$	20,879	$	97,109

__________

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

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

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The following table shows details regarding the reclassifications from accumulated other comprehensive income (loss) for the periods indicated:

	Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
	Three Months Ended June 30,				Six Months Ended June 30,				Affected line Item in the Consolidated
	2022		2021		2022		2021		Statement of Income
	(in thousands)
Unrealized gains on available for sale debt securities	$	—	$	314	$	—	$	314	Investment securities gains, net
Amortization of unrealized gains related to securities transfer	2,710		450		4,112		450		Taxable securities
	2,710		764		4,112		764		Total before tax
	(630)		(178)		(956)		(178)		Income tax provision
	$	2,080	$	586	$	3,156	$	586	Net of tax
Amortization of pension plan liability actuarial losses	$	(131)	$	(149)	$	(262)	$	(299)	Compensation and employee benefits
	(131)		(149)		(262)		(299)		Total before tax
	31		34		61		69		Income tax provision
	$	(100)	$	(115)	$	(201)	$	(230)	Net of tax
Unrealized gains from hedging instruments	$	2,603	$	2,602	$	5,178	$	5,178	Loans
	2,603		2,602		5,178		5,178		Total before tax
	(605)		(604)		(1,204)		(1,203)		Income tax provision
	$	1,998	$	1,998	$	3,974	$	3,975	Net of tax

14.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:

Debt 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 debt securities.

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Loans held for sale include the fair value of residential mortgage loans originated as held for sale determined based on quoted secondary market prices for similar loans, including the implicit fair value of embedded servicing rights. The change in fair value of loans held for sale is primarily driven by changes in interest rates subsequent to loan funding and changes in the fair value of the related servicing asset, resulting in revaluation adjustments to the recorded fair value.

The fair values of the interest rate lock commitments and interest rate forward loan sales contracts are estimated using quoted or published market prices for similar instruments, adjusted for factors such as pull-through rate assumptions based on historical information, where appropriate. The pull-through rate assumptions are considered Level 3 valuation inputs and are significant to the interest rate lock commitment valuation; as such, the interest rate lock commitment derivatives are classified as Level 3.

Interest rate contracts and the interest rate collar 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 tables set forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis at the dates presented 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
June 30, 2022	(in thousands)
Assets
Debt securities available for sale:
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations	$	3,138,764	$	—	$	3,138,764	$	—
Other asset-backed securities	379,968		—		379,968		—
State and municipal securities	878,328		—		878,328		—
U.S. government agency and government-sponsored enterprise securities	229,428		—		229,428		—
U.S. government securities	171,319		171,319				—
Non-agency collateralized mortgage obligations	324,761		—		324,761		—
Total debt securities available for sale	$	5,122,568	$	171,319	$	4,951,249	$	—
Loans held for sale	$	3,505	$	—	$	3,505	$	—
Other assets:
Interest rate lock commitments	$	90	$	—	$	—	$	90
Interest rate contracts	$	24,063	$	—	$	24,063	$	—
Liabilities
Other liabilities:
Interest rate forward loan sales contracts	$	20	$	—	$	20	$	—
Interest rate contracts	$	24,063	$	—	$	24,063	$	—

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	Fair Value		Fair Value Measurements at Reporting Date Using
			Level 1		Level 2		Level 3
December 31, 2021	(in thousands)
Assets
Debt securities available for sale:
U.S. government agency and government-sponsored enterprise mortgage-back securities and collateralized mortgage obligations	$	3,745,601	$	—	$	3,745,601	$	—
Other asset-backed securities	463,063		—		463,063		—
State and municipal securities	997,291		—		997,291		—
U.S. government agency and government-sponsored enterprise securities	252,576		—		252,576		—
U.S. government securities	157,536		157,536		—		—
Non-agency collateralized mortgage	294,932		—		294,932		—
Total debt securities available for sale	$	5,910,999	$	157,536	$	5,753,463	$	—
Loans held for sale	$	9,570	$	—	$	9,570	$	—
Other assets:
Interest rate lock commitments	$	356	$	—	$	—	$	356
Interest rate contracts	$	24,257	$	—	$	24,257	$	—
Liabilities
Other liabilities:
Interest rate forward loan sales contracts	$	27	$	—	$	27	$	—
Interest rate contracts	$	24,257	$	—	$	24,257	$	—

Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)

The following table provides a description of the valuation technique, significant unobservable inputs and qualitative information about the unobservable inputs for the Company’s assets and liabilities classified as Level 3 and measured at fair value on a recurring basis at the dates presented:

	Fair Value at June 30, 2022		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(dollars in thousands)
Interest rate lock commitments	$	90	Internal pricing model	Pull-through rate	75.10% - 100.00% (90.64%)
	Fair Value at June 30, 2021		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(dollars in thousands)
Interest rate lock commitments	$	585	Internal pricing model	Pull-through rate	78.50% - 98.53% (88.89%)

An increase in the pull-through rate utilized in the fair value measurement of the interest rate lock commitment derivative will result in positive fair value adjustments (and an increase in the fair value measurement). Conversely, a decrease in the pull-through rate will result in a negative fair value adjustment (and a decrease in the fair value measurement).

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The following table includes a rollforward of interest rate lock commitments which utilize Level 3 inputs to determine the fair value on a recurring basis.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Balance at the beginning of the period	$	36	$	925	$	356	$	1,096
Change included in earnings	165		2,134		146		3,844
Settlements	(111)		(2,474)		(412)		(4,355)
Balance at the end of the period	$	90	$	585	$	90	$	585

Nonrecurring Measurements

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition such as collateral dependent loans. The following valuation techniques and inputs were used to estimate the fair value of collateral dependent loans.

Collateral dependent loans - A collateral dependent loan is a loan in which repayment is expected to be provided solely by the underlying collateral. The fair market value of the collateral is determined by either the discounted expected future cash flows from the operation of the collateral or the appraised value of the collateral, less costs to sell. The collateral dependent loan valuations are performed in conjunction with the allowance for credit losses process on a quarterly basis.

OREO - OREO is the real property of which the Bank has taken ownership in partial or full satisfaction of a loan or loans. OREO is generally measured based on the property’s fair market value as indicated by an appraisal or a letter of intent to purchase. OREO is initially recorded at the fair value less estimated costs to sell. This amount becomes the property’s new basis. Any fair value adjustments based on the property’s fair value less estimated costs to sell at the date of acquisition are charged to the allowance for credit losses, or in the event of a write-up without previous losses charged to the allowance for credit losses, a credit to earnings is recorded. Management periodically reviews OREO in an effort to ensure the property is recorded at its fair value, net of estimated costs to sell. Any fair value adjustments subsequent to acquisition are charged or credited to earnings.

The Company had no assets measured using fair value estimates on a nonrecurring basis during the current quarterly period. For the six months ended June 30, 2022, the Company recorded a loss of $1.5 million on the nonrecurring measurement of collateral dependent loans.

The following table sets forth information related to the Company’s assets that were measured using fair value estimates on a nonrecurring basis during the prior year quarterly period:

	Fair Value at		Fair Value Measurements  at Reporting Date Using						Gains (Losses) During the Three Months Ended June 30, 2021		Gains (Losses) During the Six Months Ended June 30, 2021
	June 30, 2021		Level 1		Level 2		Level 3
	(in thousands)
Collateral dependent loans	$	4,331	$	—	$	—	$	4,331	$	(383)	$	(383)
OREO	$	375	$	—	$	—	$	375	$	(140)	$	(140)

The gains (losses) on collateral dependent loans disclosed above represent the amount of the allowance or provision recapture for credit losses and/or charge-offs during the period applicable to loans held at period-end. The amount of the allowance is included in the ACL. The losses on OREO disclosed above represent the write-downs taken at foreclosure that were charged to the ACL as well as subsequent changes in valuation allowances from updated appraisals that were recorded 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 June 30, 2021		Valuation Technique	Unobservable Input	Range (Weighted Average) (1)
	(dollars in thousands)
Collateral dependent loans (2)	$	4,331	Fair Market Value of Collateral	Adjustment to Stated Value	0.00% - 31.00% (3.67%)

__________

(1) Discount applied to appraised value or stated value (in the case of accounts receivable and fixed assets).

(2) Collateral consists of accounts receivable and fixed assets.

The following tables summarize carrying amounts and estimated fair values of selected financial instruments by level within the fair value hierarchy at the dates presented:

	June 30, 2022
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
	(in thousands)
Assets
Cash and due from banks	$	239,868	$	239,868	$	239,868	$	—	$	—
Interest-earning deposits with banks	174,328		174,328		174,328		—		—
Debt securities available for sale	5,122,568		5,122,568		171,319		4,951,249		—
Debt securities held to maturity	2,149,255		1,912,526		—		1,912,526		—
FHLB stock	10,280		10,280		—		10,280		—
Loans held for sale	3,718		3,718		—		3,718		—
Loans	11,172,452		11,060,539		—		—		11,060,539
Interest rate contracts	24,063		24,063		—		24,063		—
Interest rate lock commitments	90		90		—		—		90
Liabilities
Time deposits	$	400,553	$	392,047	$	—	$	392,047	$	—
FHLB advances	7,331		7,685		—		7,685		—
Repurchase agreements	70,349		70,349		—		70,349		—
Subordinated debentures	10,000		10,013		—		10,013		—
Junior subordinated debentures	10,310		12,813		—		12,813		—
Interest rate contracts	24,063		24,063		—		24,063		—
Interest rate forward loan sales contracts	20		20		—		20		—

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	December 31, 2021
	Carrying Amount		Fair Value		Level 1		Level 2		Level 3
	(in thousands)
Assets
Cash and due from banks	$	153,414	$	153,414	$	153,414	$	—	$	—
Interest-earning deposits with banks	671,300		671,300		671,300		—		—
Debt securities available for sale	5,910,999		5,910,999		157,536		5,753,463		—
Debt securities held to maturity	2,148,327		2,122,606		—		2,122,606		—
FHLB stock	10,280		10,280		—		10,280		—
Loans held for sale	9,774		9,774		—		9,774		—
Loans	10,486,359		10,679,349		—		—		10,679,349
Interest rate contracts	24,257		24,257		—		24,257		—
Interest rate lock commitments	356		356		—		—		356
Liabilities
Time deposits	$	445,957	$	430,682	$	—	$	430,682	$	—
FHLB advances	7,359		8,752		—		8,752		—
Repurchase agreements	86,013		86,013		—		86,013		—
Subordinated debentures	10,000		10,125		—		10,125		—
Junior subordinated debentures	10,310		9,927		—		9,927		—
Interest rate contracts	24,257		24,257		—		24,257		—
Interest rate forward loan sales contracts	27		27		—		27		—

The following table presents the difference between the aggregate fair value and the aggregate unpaid principal balance of loans held for sale sold under the mandatory delivery method and accounted for under the fair value option as of the dates presented:

June 30, 2022						December 31, 2021
Fair Value		Aggregate Unpaid Principal Balance		Fair Value Less Aggregate Unpaid Principal Balance		Fair Value		Aggregate Unpaid Principal Balance		Fair Value Less Aggregate Unpaid Principal Balance
(in thousands)
$	3,505	$	3,506	$	(1)	$	9,570	$	9,401	$	169

Residential mortgage loans held for sale that are sold under the mandatory delivery method and accounted for under the fair value option are measured initially at fair value with subsequent changes in fair value recognized in earnings. Gains and losses from such changes in fair value are reported in loan revenue. For the three months ended June 30, 2022, the Company recorded a net increase in fair value of $27 thousand representing the change in fair value reflected in earnings. For the six months ended June 30, 2022, the Company recorded a net decrease in fair value of $170 thousand, while the Company recorded net decreases in fair value of $57 thousand and $145 thousand, respectively, for the three and six months ended June 30, 2021. At June 30, 2022 and December 31, 2021, there were no residential mortgage loans held for sale for which the fair value option was elected that were 90 days or more past due, in nonaccrual status or both.

15.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 has issued restricted shares under share-based compensation plans which qualify as participating securities.

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The following table sets forth the computation of basic and diluted EPS for the periods presented:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
	(in thousands except per share amounts)
Basic EPS:
Net income	$	58,808	$	55,039	$	116,330	$	106,892
Less: Earnings allocated to participating securities:
Nonvested restricted shares	—		70		47		227
Earnings allocated to common shareholders	$	58,808	$	54,969	$	116,283	$	106,665
Weighted average common shares outstanding	78,049		70,987		77,989		70,924
Basic earnings per common share	$	0.75	$	0.77	$	1.49	$	1.50
Diluted EPS:
Earnings allocated to common shareholders	$	58,808	$	54,969	$	116,283	$	106,665
Weighted average common shares outstanding	78,049		70,987		77,989		70,924
Dilutive effect of equity awards	65		177		110		155
Weighted average diluted common shares outstanding	78,114		71,164		78,099		71,079
Diluted earnings per common share	$	0.75	$	0.77	$	1.49	$	1.50
Potentially dilutive RSAs and RSUs that were not included in the computation of diluted EPS because to do so would be anti-dilutive	600		248		389		158

16.Revenue from Contracts with Customers

The following table shows the disaggregation of revenue from contracts with customers for the periods presented:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in thousands)
Noninterest income:
Revenue from contracts with customers:
Deposit account and treasury management fees	$	8,212	$	6,701	$	15,325	$	13,059
Card revenue	5,031		4,773		9,998		8,506
Financial services and trust revenue	4,192		4,245		8,824		7,626
Total revenue from contracts with customers	17,435		15,719		34,147		29,191
Other sources of noninterest income	7,571		7,011		15,039		16,705
Total noninterest income	$	25,006	$	22,730	$	49,186	$	45,896

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”, “Columbia” and “the Company”) and notes thereto presented elsewhere in this report and with the December 31, 2021 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.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements about our plans, objectives, expectations and intentions that are not historical facts, and statements identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “should,” “projects,” “seeks,” “estimates” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature, as well as the continuing effects of the COVID-19 pandemic on the Company’s business, operations, financial performance and prospects. 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, 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 section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report and the factors set forth in the section titled “Risk Factors” in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, the following factors, among others, could cause actual results to differ materially from the anticipated results expressed or implied by forward-looking statements:

•national and global 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 markets where we operate and make loans could face challenges;

•the risks presented by the economy, which could adversely affect credit quality, collateral values, including real estate collateral, investment values, liquidity and loan originations and loan portfolio delinquency rates;

•continued increases in inflation and the risk that inflation may differ, possibly materially, from expectations, and actions taken by the Federal Reserve in response to inflation and their potential impact on economic conditions including the possibility of a recession;

•risks related to the proposed merger with Umpqua including, among others, (i) failure to complete the merger with Umpqua or unexpected delays related to the merger or either party’s inability to obtain regulatory approvals or satisfy other closing conditions required to complete the merger, (ii) regulatory approvals resulting in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction, (iii) certain restrictions during the pendency of the proposed transaction with Umpqua that may impact the parties’ ability to pursue certain business opportunities or strategic transactions, (iv) diversion of management’s attention from ongoing business operations and opportunities, (v) cost savings and any revenue synergies from the merger may not be fully realized or may take longer than anticipated to be realized, (vi) the integration of each party’s management, personnel and operations will not be successfully achieved or may be materially delayed or will be more costly or difficult than expected, (vii) deposit attrition, customer or employee loss and/or revenue loss as a result of the announcement of the proposed merger, (viii) expenses related to the proposed merger being greater than expected, and (ix) shareholder litigation that may prevent or delay the closing of the proposed merger or otherwise negatively impact the Company’s business and operations;

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

•the ability to successfully integrate future acquired entities;

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

•the effect of the discontinuation or replacement of LIBOR;

•results of operations following strategic expansion, including the impact of acquired loans on our earnings, could differ from expectations;

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

•changes in accounting policies or procedures as may be required by the FASB or other regulatory agencies could materially affect our financial statements and how we report those results, and expectations and preliminary analysis relating to how such changes will affect our financial results could prove incorrect;

•changes in laws and regulations affecting our businesses, including changes in the enforcement and interpretation of such laws and regulations by applicable governmental and regulatory agencies;

•increased competition among financial institutions and nontraditional providers of financial services;

•continued consolidation in the financial services industry resulting in the creation of larger financial institutions that 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;

•our ability to identify and address cyber-security risks, including security breaches, “denial of service attacks,” “hacking” and identity theft;

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•any material failure or interruption of our information and communications systems;

•inability to keep pace with technological changes;

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

•failure to maintain effective internal control over financial reporting or disclosure controls and procedures;

•the effect of geopolitical instability, including wars, conflicts and terrorist attacks, including the impacts of Russia’s invasion of Ukraine;

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

•the risks from climate change and its potential to disrupt our business and adversely impact the operations and creditworthiness of our customers;

•natural disasters, including earthquakes, tsunamis, flooding, fires and other unexpected events;

•the effect of COVID-19 and other infectious illness outbreaks that may arise in the future, which has created significant impacts and uncertainties in U.S. and global markets;

•changes in governmental policy and regulation, including measures taken in response to economic, business, political and social conditions, including with regard to COVID-19; and

•the effects of any damage to our reputation resulting from developments related to any of the items identified above.

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 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.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management has identified the accounting policies related to the ACL, business combinations 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’s Discussion and Analysis of Financial Condition and Results of Operations” under the headings “Allowance for Credit Losses,” “Business Combinations” and “Valuation and Recoverability of Goodwill” in our 2021 Annual Report on Form 10-K. There have not been any material changes in our critical accounting policies and estimates as compared to those disclosed in our 2021 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 from our broad range of products and services including treasury management, wealth management and debit and credit cards. Our operating expenses consist primarily of compensation and employee benefits, occupancy, data processing and software 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.

In November 2020, the SEC amended the rules governing Management’s Discussion and Analysis, Selected Financial Data and Supplementary Financial Information, to modernize and simplify certain disclosure requirements. One update allows registrants to compare the results of the most recently completed quarter to the results of either the immediately preceding quarter or the corresponding quarter of the preceding year. We have adopted this change, as management believes that comparing current quarter results to those of the immediately preceding quarter is more useful in identifying current business trends and provides a more meaningful comparison. Accordingly, we have compared the results for the three months ended June 30, 2022 and March 31, 2022, where applicable throughout this Management’s Discussion and Analysis.

Earnings Summary

Comparison of current quarter to prior quarter

The Company reported net income for the second quarter of $58.8 million or $0.75 per diluted common share, compared to $57.5 million or $0.74 per diluted common share for the first quarter of 2022. Net interest income for the three months ended June 30, 2022 was $147.5 million, an increase of $1.3 million from the prior quarter. The increase was primarily a result of higher loan interest income due to higher average balances partially offset by lower interest income from securities substantially driven by lower average balances.

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The Company recorded a $2.1 million provision for credit losses for the second quarter of 2022 compared to a recapture of $7.8 million for the first quarter of 2022. The increase in provision expense for the second quarter of 2022 as compared to the first quarter of 2022 was primarily related to loan growth partially offset by improved credit quality over the quarter. The prior quarter’s recapture was primarily related to improved credit quality.

Noninterest income for the quarter was $25.0 million, an increase of $826 thousand from the prior quarter. The increase was largely due to higher deposit account and treasury management fees and loan revenue partially offset by lower financial services and trust revenue and other noninterest income.

Total noninterest expense for the quarter ended June 30, 2022 was $95.4 million, a decrease of $9.7 million from the prior quarter. Merger-related expenses in the quarter were $3.9 million compared to $7.1 million for the prior quarter. Taking this into consideration, the largest contributor to the decrease in noninterest expense for the quarter is related to compensation and employee benefits attributed to lower 401(k) and payroll tax expenses, which are typically elevated in the first quarter. In addition, there were increased capitalized loan labor costs related to the high amounts of loan production during the quarter. The decrease was also attributable to lower occupancy, data processing and software expenses along with other noninterest expense.

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

The Company reported net income for the six months ended June 30, 2022 of $116.3 million or $1.49 per diluted common share, compared to $106.9 million or $1.50 per diluted common share for the same period in 2021. Net interest income for the six months ended June 30, 2022 was $293.7 million, an increase of $44.2 million from the prior year period. The increase was primarily due to increases in interest income from loans and securities, which were a result of higher average balances partially related to the Bank of Commerce acquisition.

The provision for credit losses on loans for the six months ended June 30, 2022 was a recapture of $5.7 million compared to a recapture of $6.3 million for the first six months of 2021. The lower recapture for the first six months of 2022 compared to the same period in 2021 was primarily due to loan growth.

Noninterest income for the six months ended June 30, 2022 was $49.2 million, an increase of $3.3 million from the prior year period. The increase was primarily due to higher other noninterest income, deposit account and treasury management fees, card revenue and financial services and trust revenue offset by lower mortgage banking revenue due to lower overall mortgage production as a result of the higher rate environment.

For the six months ended June 30, 2022, noninterest expense was $200.4 million, an increase of $32.8 million from $167.7 million for the same period in 2021. The increase from the prior year period was primarily driven by higher compensation and employee benefits due to our acquisition of Bank of Commerce and the prior year period having substantial capitalized labor costs for PPP loan originations. Increased merger-related expenses related to legal and professional fees, data processing and software and other noninterest expense also contributed to the increase from the prior year period.

38

Net Interest Income

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 cost of interest-bearing liabilities by category and, in total, net interest income and net interest margin:

	Three Months Ended
	June 30, 2022						March 31, 2022
	Average Balances		Interest Earned / Paid		Average Rate		Average Balances		Interest Earned / Paid		Average Rate
	(dollars in thousands)
ASSETS
Loans, net (1)(2)	$	10,989,493	$	112,142	4.09	%	$	10,665,242	$	108,181	4.11	%
Taxable securities	6,761,383		34,622		2.05	%	$	7,217,844	$	37,162	2.09	%
Tax exempt securities (2)	729,916		4,753		2.61	%	$	792,763	$	4,715	2.41	%
Interest-earning deposits with banks	494,725		887		0.72	%	$	590,795	$	295	0.20	%
Total interest-earning assets	18,975,517		152,404		3.22	%	$	19,266,644	$	150,353	3.16	%
Other earning assets	305,775						$	302,865
Noninterest-earning assets	1,488,910						$	1,386,157
Total assets	$	20,770,202					$	20,955,666
LIABILITIES AND SHAREHOLDERS’ EQUITY
Money market accounts	4,406,022		1,000		0.09	%	4,530,698		960		0.09	%
Interest-bearing demand	2,123,005		411		0.08	%	2,024,757		374		0.07	%
Savings accounts	1,638,334		78		0.02	%	1,632,369		77		0.02	%
Interest-bearing public funds, other than certificates of deposit	756,528		923		0.49	%	776,965		288		0.15	%
Certificates of deposit	411,115		52		0.05	%	437,251		97		0.09	%
Total interest-bearing deposits	9,335,004		2,464		0.11	%	9,402,040		1,796		0.08	%
FHLB advances and FRB borrowings	7,340		73		3.99	%	7,354		71		3.92	%
Subordinated debentures	10,000		172		6.90	%	10,000		144		5.84	%
Other borrowings and interest-bearing liabilities	62,017		153		0.99	%	76,185		74		0.39	%
Total interest-bearing liabilities	9,414,361		2,862		0.12	%	9,495,579		2,085		0.09	%
Noninterest-bearing deposits	8,822,071						8,695,832
Other noninterest-bearing liabilities	235,159						228,879
Shareholders’ equity	2,298,611						2,535,376
Total liabilities & shareholders’ equity	$	20,770,202					$	20,955,666
Net interest income (tax equivalent)			$	149,542					$	148,268
Net interest margin (tax equivalent)					3.16	%					3.12	%

__________

(1)Nonaccrual loans have been included in the tables as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $2.8 million and $4.2 million for the three months ended June 30, 2022 and March 31, 2022, respectively. The net incremental amortization on acquired loans was $2.1 million for the three months ended June 30, 2022 compared to net incremental amortization of $350 thousand for the three months ended March 31, 2022.

(2)Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $1.1 million for both the three months ended June 30, 2022 and March 31, 2022. The tax equivalent yield adjustment to interest earned on tax exempt securities was $998 thousand and $990 thousand for the three months ended June 30, 2022, and March 31, 2022, 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 cost of interest-bearing liabilities by category and, in total, net interest income and net interest margin:

	Six Months Ended June 30,						Six Months Ended June 30,
	2022						2021
	Average Balances		Interest Earned / Paid		Average Rate		Average Balances		Interest Earned / Paid		Average Rate
	(dollars in thousands)
ASSETS
Loans, net (1)(2)	$	10,828,263	$	220,323	4.10	%	$	9,625,790	$	202,385	4.24	%
Taxable securities	6,988,353		71,784		2.07	%	4,959,620		47,566		1.93	%
Tax exempt securities (2)	761,166		9,468		2.51	%	614,841		7,069		2.32	%
Interest-earning deposits with banks	542,494		1,182		0.44	%	599,689		311		0.10	%
Total interest-earning assets	19,120,276		$	302,757	3.19	%	15,799,940		$	257,331	3.28	%
Other earning assets	304,328						243,437
Noninterest-earning assets	1,437,817						1,239,855
Total assets	$	20,862,421					$	17,283,232
LIABILITIES AND SHAREHOLDERS’ EQUITY
Money market accounts	4,468,015		1,960		0.09	%	3,542,068		1,391		0.08	%
Interest-bearing demand	2,074,152		785		0.08	%	1,498,211		551		0.07	%
Savings accounts	1,635,368		155		0.02	%	1,270,403		85		0.01	%
Interest-bearing public funds, other than certificates of deposit	766,690		1,211		0.32	%	683,172		521		0.15	%
Certificates of deposit	424,111		149		0.07	%	333,111		363		0.22	%
Total interest-bearing deposits	9,368,336		4,260		0.09	%	7,326,965		2,911		0.08	%
FHLB advances and FRB borrowings	7,347		144		3.95	%	7,401		144		3.92	%
Subordinated debentures	10,000		316		6.37	%	35,051		936		5.39	%
Other borrowings and interest-bearing liabilities	69,062		227		0.66	%	49,740		42		0.17	%
Total interest-bearing liabilities	9,454,745		$	4,947	0.11	%	7,419,157		$	4,033	0.11	%
Noninterest-bearing deposits	8,759,301						7,311,385
Other noninterest-bearing liabilities	232,036						223,097
Shareholders’ equity	2,416,339						2,329,593
Total liabilities & shareholders’ equity	$	20,862,421					$	17,283,232
Net interest income (tax equivalent)			$	297,810					$	253,298
Net interest margin (tax equivalent)					3.14	%					3.23	%

__________

(1)Nonaccrual loans have been included in the table as loans carrying a zero yield. Amortized net deferred loan fees and net unearned discounts on acquired loans were included in the interest income calculations. The amortization of net deferred loan fees was $7.0 million and $14.7 million for the six months ended June 30, 2022 and 2021, respectively. The incremental amortization on acquired loans was $2.4 million for the six months ended June 30, 2022 compared to net incremental accretion of $1.9 million for the six months ended June 30, 2021.

(2)Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent yield adjustment to interest earned on loans was $2.2 million and $2.4 million for the six months ended June 30, 2022 and 2021, respectively. The tax equivalent yield adjustment to interest earned on tax exempt securities was $2.0 million and $1.5 million for the six months ended June 30, 2022 and 2021, respectively.

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 and changes in rates. 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 June 30, 2022 Compared to March 31, 2022
	Increase (Decrease) Due to
	Volume		Rate		Total (1)
	(in thousands)
Interest Income
Loans, net	$	3,306	$	655	$	3,961
Taxable securities	(2,339)		(201)		(2,540)
Tax exempt securities	(390)		428		38
Interest-earning deposits with banks	(55)		647		592
Interest income	$	522	$	1,529	$	2,051
Interest Expense
Deposits:
Money market accounts	$	(26)	$	66	$	40
Interest-bearing demand	19		18		37
Savings accounts	—		1		1
Interest-bearing public funds, other than certificates of deposit	(8)		643		635
Certificates of deposit	(6)		(39)		(45)
Total interest on deposits	(21)		689		668
FHLB advances and FRB borrowings	—		2		2
Subordinated debentures	—		28		28
Other borrowings and interest-bearing liabilities	(11)		90		79
Interest expense	$	(32)	$	809	$	777

__________

(1)The change in interest not due solely to volume or rate has been allocated in proportion to the absolute dollar amount of the change in each.

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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 and changes in rates. 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:

	Six Months Ended June 30, 2022 Compared to 2021 Increase (Decrease) Due to
	Volume		Rate		Total (1)
	(in thousands)
Interest Income
Loans, net	$	24,634	$	(6,696)	$	17,938
Taxable securities	20,635		3,583		24,218
Tax exempt securities	1,785		614		2,399
Interest earning deposits with banks	(33)		904		871
Interest income	$	47,021	$	(1,595)	$	45,426
Interest Expense
Deposits:
Money market accounts	393		176		569
Interest-bearing demand	218		16		234
Savings accounts	29		41		70
Interest-bearing public funds, other than certificates of deposit	71		619		690
Certificates of deposit	80		(294)		(214)
Total interest on deposits	791		558		1,349
FHLB advances and FRB borrowings	(1)		1		—
Subordinated debentures	(833)		213		(620)
Other borrowings	22		163		185
Interest expense	$	(21)	$	935	$	914

__________

(1) The change in interest not due solely to volume or rate has been allocated in proportion to the absolute dollar amount of the change in each.

Comparison of current quarter to prior quarter

Net interest income for the second quarter of 2022 was $147.5 million, up from $146.2 million for the first quarter in 2022. The increase was primarily due to higher loan interest income as a result of higher average balances partially offset by lower interest income from securities substantially driven by lower average balances.

The Company’s net interest margin (tax equivalent) increased to 3.16% in the second quarter of 2022, from 3.12% for the prior quarter. This increase was driven by a stronger earning assets mix with a smaller ratio of assets in lower-yield interest earning deposits with banks and a larger ratio of assets in higher-yield loans. The Company’s operating net interest margin (tax equivalent)1 increased to 3.23% from 3.15% compared to the first quarter of 2022. The increase was also due to a stronger earnings mix as noted above.

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

Net interest income for the six months ended June 30, 2022 was $293.7 million, compared to $249.5 million for the prior year period. The increase was mainly due to an increase in interest income from loans and securities due to higher average balances partially related to the Bank of Commerce acquisition.

The Company’s net interest margin (tax equivalent) decreased to 3.14% for the first six months of 2022, from 3.23% for the prior year period. The decrease in the Company’s net interest margin (tax equivalent) was driven by lower average rates on loans. The Company’s operating net interest margin (tax equivalent) for the six months ended June 30, 2022 was 3.19% compared to 3.22% for the six months ended June 30, 2021. This decrease was also due to lower average rates on loans.

1 Operating net interest margin (tax equivalent) is a non-GAAP financial measure. See the “Non-GAAP financial measures” section in this Management’s Discussion and Analysis.

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The favorable effect of recent interest rate increases was tempered in our loan portfolio due to many floating rate loans not yet moving off their floor rates and due to the timing of recent market rate increases being later in the six month period ended June 30, 2022.

Provision for Credit Losses

Comparison of current quarter to prior quarter

During the second quarter of 2022, the Company recorded a $2.1 million provision for credit losses compared to a recapture of $7.8 million for the first quarter of 2022. The increase in provision expense for the second quarter of 2022 as compared to the first quarter of 2022 was primarily related to loan growth partially offset by improved credit quality over the quarter.

The provision recapture for credit losses recorded during the current quarter also reflected management’s ongoing assessment of the credit quality of the Company’s loan portfolio. Other factors affecting the provision include net charge-offs, credit quality migration and the size and composition of the loan portfolio and changes in the economic environment during the second quarter of 2022. The amount of provision was calculated in accordance with the Company’s methodology for determining the ACL, discussed in Note 6 to the Consolidated Financial Statements in “Item 1. Financial Statements (unaudited)” of this report.

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

The recapture for credit losses for the six months ended June 30, 2022 was $5.7 million compared to a recapture of $6.3 million during the same period in 2021. The lower recapture for the first six months of 2022 was due to the same factors discussed above for the quarterly provision for credit losses. The amount of provision was calculated in accordance with the Company’s methodology for determining the ACL, discussed in Note 6 to the Consolidated Financial Statements in “Item 1. Financial Statements (unaudited)” of this report.

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								Six Months Ended
	June 30, 2022		March 31, 2022		$ Change		% Change		June 30, 2022		June 30, 2021		$ Change		% Change
	(dollars in thousands)
Deposit account and treasury management fees	$	8,212	$	7,113	$	1,099	15	%	$	15,325	$	13,059	$	2,266	17	%
Card revenue	5,031		4,967		64		1	%	9,998		8,506		1,492		18	%
Financial services and trust revenue	4,192		4,632		(440)		(9)	%	8,824		7,626		1,198		16	%
Loan revenue	3,881		3,193		688		22	%	7,074		11,883		(4,809)		(40)	%
Bank owned life insurance	2,024		1,788		236		13	%	3,812		3,195		617		19	%
Investment securities gains, net	—		—		—		—	%	—		314		(314)		(100)	%
Other	1,666		2,487		(821)		(33)	%	4,153		1,313		2,840		216	%
Total noninterest income	$	25,006	$	24,180	$	826	3	%	$	49,186	$	45,896	$	3,290	7	%

Comparison of current quarter to prior quarter

Noninterest income was $25.0 million for the second quarter of 2022, an increase of $826 thousand from the prior quarter. This increase was primarily due to higher deposit account and treasury management fees and loan revenue partially offset by lower financial services and trust revenue and other noninterest income.

43

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

For the six months ended June 30, 2022, noninterest income was $49.2 million compared to $45.9 million for the same period in 2021, an increase of $3.3 million. The increase was principally due to increases associated with other noninterest income, deposit account and treasury management fees, card revenue along with financial services and trust revenue offset by lower mortgage banking revenue due to lower overall mortgage production and decreased premium on loan sales as a result of the higher rate environment.

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								Six Months Ended
	June 30, 2022		March 31, 2022		$ Change		% Change (1)		June 30, 2022		June 30, 2021		$ Change		% Change
	(dollars in thousands)
Compensation and employee benefits	$	57,386	$	63,079	$	(5,693)	(9)	%	$	120,465	$	105,186	$	15,279	15	%
Occupancy	9,632		11,009		(1,377)		(13)	%	20,641		18,044		2,597		14	%
Data processing and software	9,185		10,324		(1,139)		(11)	%	19,509		15,853		3,656		23	%
Legal and professional fees	5,182		6,535		(1,353)		(21)	%	11,717		6,079		5,638		93	%
Amortization of intangibles	2,219		2,288		(69)		(3)	%	4,507		3,776		731		19	%
B&O taxes	1,584		1,589		(5)		—	%	3,173		2,749		424		15	%
Advertising and promotion	1,208		726		482		66	%	1,934		1,348		586		43	%
Regulatory premiums	1,461		1,536		(75)		(5)	%	2,997		2,217		780		35	%
Net cost of operation of OREO	116		10		106		N/M		126		48		78		163	%
Other	7,406		7,957		(551)		(7)	%	15,363		12,375		2,988		24	%
Total noninterest expense	$	95,379	$	105,053	$	(9,674)	(9)	%	$	200,432	$	167,675	$	32,757	20	%

____________

(1) Percentage changes greater than +/- 1000% are considered not meaningful and are presented as “N/M.”

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

	Three Months Ended				Six Months Ended
	June 30, 2022		March 31, 2022		June 30, 2022		June 30, 2021
	(in thousands)
Merger-related expenses:
Compensation and employee benefits	$	612	$	586	$	1,198	$	—
Occupancy	112		819		931		—
Data processing and software	501		1,039		$	1,540	—
Legal and professional fees	1,906		4,209		6,115		510
Advertising and promotion	10		134		144		—
Other	760		270		1,030		—
Total impact of merger-related expense to noninterest expense	$	3,901	$	7,057	$	10,958	$	510
Merger-related expenses by transaction:
Bank of Commerce (1)	1,749		2,587		4,337		510
Umpqua (2)	2,152		4,470		6,621		—
Total impact of merger-related expense to noninterest expense	$	3,901	$	7,057	$	10,958	$	510

__________

(1) The Company completed the acquisition of Bank of Commerce on October 1, 2021. See Note 3 of the Consolidated Financial Statements in “Item 1. Financial Statements (unaudited)” of this report for further information regarding this transaction.

(2) Definitive merger agreement was executed; however, completion of this transaction is pending as of the date of this filing.

44

Comparison of current quarter to prior quarter

Noninterest expense was $95.4 million for the second quarter of 2022, a decrease of $9.7 million from $105.1 million for the prior quarter. Merger-related expenses during the quarter were $3.9 million compared to $7.1 million for the prior quarter. Taking this into consideration, the largest contributor to the decrease in noninterest expense was related to compensation and employee benefits attributed to lower 401(k) and payroll tax expenses, which are typically elevated in the first quarter. In addition, there were increased capitalized loan labor costs related to the high amounts of loan production for the quarter. The decrease was also attributable to lower occupancy, data processing and software expense and other noninterest expense.

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

For the six months ended June 30, 2022, noninterest expense was $200.4 million, compared to $167.7 million for the same period in 2021, an increase of $32.8 million. The increase from the prior year period was mostly attributable to increases in compensation and employee benefits expense due to our acquisition of Bank of Commerce and the prior year period having substantial capitalized labor costs for PPP loan originations. Increased merger-related expenses also contributed to the increase.

The provision for unfunded loan commitments for the periods indicated are as follows:

	Three Months Ended				Six Months Ended
	June 30, 2022		March 31, 2022		June 30, 2022		June 30, 2021
	(in thousands)
Provision for unfunded loan commitments	$	—	$	500	$	500	$	1,700

Income Taxes

We recorded an income tax provision of $16.2 million for the second quarter of 2022, compared to a provision of $15.6 million for the three months ended March 31, 2022, with effective tax rates of 22% and 21%, respectively. For the six months ended June 30, 2022 and 2021, we recorded income tax provisions of $31.8 million and $27.1 million, respectively, with effective tax rates of 21% for the current year and 20% for the prior year period. For additional information, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

FINANCIAL CONDITION

Total assets were $20.56 billion at June 30, 2022, a decrease of $380.9 million from December 31, 2021. Cash and cash equivalents decreased $410.5 million. Loans increased $680.5 million during the first six months of 2022, which was primarily the result of new loan production partially offset by loan payments. Debt securities available for sale were $5.12 billion at June 30, 2022, a decrease of $788.4 million from December 31, 2021 which was primarily due to fair value movement. Total liabilities were $18.32 billion as of June 30, 2022, a decrease of $35.4 million from December 31, 2021 primarily due to a decrease in noninterest-bearing deposits.

Investment Securities

At June 30, 2022, the Company’s investment portfolio primarily consisted of debt securities available for sale totaling $5.12 billion compared to $5.91 billion at December 31, 2021 and debt securities held to maturity of $2.15 billion at both June 30, 2022 and December 31, 2021. The decrease in the debt securities available for sale from year-end is due to a $537.9 million decline in unrealized gains, $419.0 million in maturities and repayments, and $15.4 million in premium amortization, partially offset by $183.8 million in purchases. The increase in debt securities held to maturity from year-end is due to purchases of $97.7 million, partially offset by $86.3 million in maturities and repayments and $10.4 million in premium amortization. The average duration of our debt securities available for sale was approximately 5 years and 3 months at June 30, 2022. The average duration of our debt securities held to maturity was approximately 5 years and 10 months at June 30, 2022. These durations take into account calls, where appropriate, and consensus prepayment speeds.

The investment 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 management 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 to determine whether a decline in fair value below amortized cost exists. Amortized cost includes adjustments made to the cost of an investment for accretion, amortization, collection of cash and previous credit losses recognized in earnings.

45

When the fair value of an available for sale debt security falls below the amortized cost basis, it is evaluated to determine if any of the decline in value is attributable to credit loss. Decreases in fair value attributable to credit loss would be recorded directly to earnings with a corresponding allowance for credit losses, limited by the amount that the fair value is less than the amortized cost basis. If the credit quality subsequently improves, the allowance would be reversed up to a maximum of the previously recorded credit losses. If the Company intends to sell an impaired available for sale debt security, or if it is more likely than not that the Company will be required to sell the security prior to recovering the amortized cost basis, the entire fair value adjustment would be immediately recognized in earnings with no corresponding allowance for credit losses.

At June 30, 2022, the market value of debt securities available for sale had a net unrealized loss of $525.0 million compared to a net unrealized gain of $13.0 million at December 31, 2021. The change in valuation was the result of fluctuations in market interest rates during the six months ended June 30, 2022. At June 30, 2022, the Company had $4.85 billion of debt securities available for sale with gross unrealized losses of $526.7 million; however, we did not consider these investment securities to have an indicated credit loss.

All of the Company’s debt securities held to maturity were issued by U.S. government agencies or U.S. government-sponsored enterprises. These securities carry the explicit or implicit guarantee of the U.S. government, are widely recognized as “risk free,” and have a long history of zero credit loss. Therefore, the Company did not record an allowance for credit losses for these securities as of June 30, 2022.

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

	June 30, 2022		December 31, 2021
	(in thousands)
Debt securities available for sale:
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	3,138,764	$	3,745,601
Other asset-backed securities	379,968		463,063
State and municipal securities	878,328		997,291
U.S. government agency and government-sponsored enterprise securities	229,428		252,576
U.S. government securities	171,319		157,536
Non-agency collateralized mortgage securities	324,761		294,932
Total debt securities available for sale, at fair value	$	5,122,568	$	5,910,999
Debt securities held to maturity:
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	2,149,255	$	2,148,327
Total debt securities held to maturity, at amortized cost	$	2,149,255	$	2,148,327
Equity securities	13,425		13,425
Total investment securities	$	7,285,248	$	8,072,751

For further information on our investment portfolio and equity securities transactions, see Note 4 to 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 substitutes 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 and type of borrower and by limiting the aggregation of debt to a single borrower.

In analyzing our existing portfolio, we review our consumer and residential loan portfolios by their performance as a pool of loans, since no single loan is individually significant or judged by its risk rating, size or potential risk of loss. In contrast, the monitoring process for the commercial business, real estate construction and commercial real estate portfolios includes periodic reviews of individual loans with risk ratings assigned to each loan and performance judged on a loan-by-loan basis.

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. In the event that full collection of principal and interest is not reasonably

46

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 individually measured allowance is required for collateral dependent nonaccrual loans with balances equal to or greater than $500,000 and with respect to which foreclosure is probable. For the individually measured collateral dependent nonaccrual loan, the allowance for credit losses is equal to the difference between amortized cost of the loan and the determined value of the collateral. However, if the determined value of the collateral is greater than the amortized cost of the loan, no allowance for credit losses will be added for these loans.

For additional discussion on our methodology in managing credit risk within our loan portfolio, see the “Allowance for Credit Losses” section in this Management’s Discussion and Analysis and Note 1 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” of the Company’s 2021 Annual Report on Form 10-K.

Loan policies, credit quality criteria, portfolio guidelines and other controls are established under the guidance of our Chief Credit Officer and approved, as appropriate, by the Board of Directors. Credit Administration, together with the management loan committee, has the responsibility for administering the credit approval process. As another part of its control process, we use an internal credit review and examination function to provide reasonable assurance that loans and commitments are made and maintained as prescribed by our credit policies. Examinations are performed to ensure continued performance and proper risk assessment.

Loan Portfolio Analysis

Our wholly owned banking subsidiary Columbia State Bank is a full service commercial bank which, originates a wide variety of loans and focuses its lending efforts on originating commercial real estate and commercial business loans.

The following table provides additional detail related to the net premium (discount) of acquired and purchased loans by acquisition:

	June 30, 2022		December 31, 2021
	(in thousands)
Acquisition:
Bank of Commerce	$	8,850	$	12,923
Pacific Continental	(4,369)		(5,306)
All other purchased and acquired net premium	4,585		5,031
Total net premium at period end	$	9,066	$	12,648

Commercial Real Estate Loans: Commercial real estate 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.

Commercial Business Loans: Our commercial business lending is directed toward meeting the credit and related deposit and treasury management needs of small to medium sized businesses. Commercial and industrial loans are primarily underwritten based on the identified cash flows of the borrower’s operations and secondarily on the underlying collateral provided by the borrower and/or the strength of the guarantor. The majority of these loan provide financing for working capital and capital expenditures. Loan terms, including, loan maturity, fixed or adjustable interest rate and collateral considerations, are based on factors such as the loan purpose, collateral type and industry and are underwritten on an individual loan basis.

Agriculture Loans: Agricultural lending includes agricultural real estate and production loans and lines of credit within our primary market areas. We are committed to offering seasonal and longer-term loans and operating lines of credit by lending officers with expertise in the agricultural communities we serve. Typical loan-to-value ratios on term loans can range from 55% to 80% depending upon the type of loan. Operating lines of credit require the borrower to provide a 20% to 25% equity investment. The debt coverage ratio is generally 1.25 or better on all term loans.

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

47

75% and stabilized debt coverage ratios (net operating income divided by annual debt service) 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.

One-to-four Family Residential Real Estate Loans: One-to-four family residential loans, including home equity loans and lines of credit, are secured by properties located within our primary market areas and, typically, have loan-to-value ratios of 80% or lower at origination.

Other Consumer Loans: Consumer loans include automobile loans, boat and recreational vehicle financing and other 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, Oregon, Idaho and California.

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

Allowance for Credit Losses

The ACL is an accounting estimate of expected credit losses in our loan portfolio at the balance sheet date. The provision for credit losses is the expense recognized in the Consolidated Statements of Income to adjust the ACL to the levels deemed appropriate by management, as measured by the Company’s credit loss estimation methodologies. The allowance for unfunded commitments and letters of credit is maintained at a level believed by management to be sufficient to absorb estimated expected losses related to these unfunded credit facilities at the balance sheet date.

At June 30, 2022, our ACL was $149.9 million, or 1.32% of total loans (excluding loans held for sale). This compares with an ACL of $155.6 million, or 1.46% of total loans (excluding loans held for sale) at December 31, 2021. The decrease from year end was primarily due to significant improvement in portfolio risk ratings as well as the percentage of problem loans to total loans reaching pre-pandemic levels. The ACL at June 30, 2022 does not include a reserve for the PPP loans as they are fully guaranteed by the SBA.

For additional information on our allowances for credit losses and allowance for unfunded commitments and letters of credit, as well as the credit quality of the loan portfolio, see Note 6 to the Consolidated Financial Statements in “Item 1. Consolidated Financial Statements (unaudited)” of this report.

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Liquidity and Sources of Funds

Our primary sources of funds are customer deposits. Additionally, we utilize advances from the FHLB, borrowings from the FRB, sweep repurchase agreements, subordinated debentures and junior subordinated debentures assumed in acquisitions and a revolving line of credit 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, meet deposit withdrawals and maturing liabilities, to acquire other assets and to fund continuing operations.

In addition, we have a shelf registration statement on file with the SEC registering an unspecified amount of any combination of debt or equity securities, depository shares, purchase contracts, units and warrants in one or more offerings. Specific information regarding the terms of and the securities being offered will be provided at the time of any offering. Proceeds from any future offerings are expected to be used for general corporate purposes, including, but not limited to, the repayment of debt, repurchasing or redeeming outstanding securities, working capital, funding future acquisitions or other purposes identified at the time of any offering.

Deposit Activities

Our deposit products include a wide variety of transaction accounts, savings accounts and time deposit accounts. We have established a branch system to serve our consumer and business depositors. Deposits decreased $53.2 million from December 31, 2021. Management’s strategy for funding asset growth is to make use of public funds and brokered and other wholesale deposits on an as-needed basis. The Company participates in the CD Option of IntraFi Network Deposits program, which 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 June 30, 2022, brokered deposits, reciprocal money market accounts and other wholesale deposits (excluding public funds) totaled $953.7 million, or 5.3% of total deposits, compared to $821.7 million or 4.6% at year-end 2021. These deposits have varied maturities.

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

	June 30, 2022				December 31, 2021
	Balance		% of Total		Balance		% of Total
	(dollars in thousands)
Demand and other noninterest-bearing	$	8,741,488	48.7	%	$	8,856,714	49.1	%
Money market	3,402,555		18.9	%	3,525,299		19.6	%
Interest-bearing demand	2,104,118		11.7	%	1,999,407		11.1	%
Savings	1,646,363		9.2	%	1,617,546		9.0	%
Interest-bearing public funds, other than certificates of deposit	737,297		4.1	%	779,146		4.3	%
Certificates of deposit, less than $250,000	232,063		1.3	%	249,120		1.4	%
Certificates of deposit, $250,000 or more	138,945		0.8	%	160,490		0.9	%
Certificates of deposit insured by the CD Option of IntraFi Network Deposits	29,178		0.2	%	35,611		0.2	%
Reciprocal money market accounts	924,552		5.1	%	786,046		4.4	%
Subtotal	$	17,956,559	100.0	%	$	18,009,379	100.0	%
Valuation adjustment resulting from acquisition accounting	$	367			$	736
Total deposits	$	17,956,926			$	18,010,115

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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 investment securities and residential, commercial and commercial real estate loans. At June 30, 2022 and December 31, 2021, we had FHLB advances of $7.3 million and $7.4 million, respectively.

We also utilize wholesale and retail repurchase agreements to supplement our funding sources. Our wholesale repurchase agreements are secured by mortgage-backed securities. At June 30, 2022 and December 31, 2021, we had deposit customer sweep-related repurchase agreements of $70.3 million and $86.0 million, respectively, which mature on a daily basis.

Subordinated debentures and junior subordinated debentures are another source of funding. On October 1, 2021, with its acquisition of Bank of Commerce, the Company assumed $10.0 million in aggregate principal amount of subordinated debentures, which are unsecured, and mature on December 10, 2025. Also assumed through the Bank of Commerce acquisition were $10.3 million of trust preferred obligations which mature on September 15, 2035 and are redeemable at the Company’s option on any March 15, June 15, September 15, or December 15.

The Company has a $15.0 million short-term credit facility with an unaffiliated bank. This facility provides the Company additional liquidity, if needed, for various corporate activities. At both June 30, 2022 and December 31, 2021, there was no balance associated with this credit facility. The credit agreement requires the Company to comply with certain covenants including those related to asset quality and capital levels. The Company was in compliance with all covenants associated with this facility at June 30, 2022.

Management anticipates we will continue to rely on FHLB advances, FRB borrowings, the short-term credit facility and wholesale and retail repurchase agreements in the future. We will use those funds primarily to make loans and purchase securities.

Contractual Obligations, Commitments & Off-Balance Sheet Arrangements

We are party to many contractual financial obligations, including repayments of borrowings, operating and equipment lease payments, off-balance sheet commitments to extend credit and investments in affordable housing partnerships. At June 30, 2022, we had commitments to extend credit of $3.74 billion compared to $3.54 billion at December 31, 2021.

Capital Resources

Shareholders’ equity at June 30, 2022 was $2.24 billion, compared to $2.59 billion at December 31, 2021. Shareholders’ equity was 11% and 12% of total period-end assets at June 30, 2022 and December 31, 2021, respectively.

Regulatory Capital

In July 2013, the federal bank regulators approved the Capital Rules (as discussed in our 2021 Annual Report on Form 10-K, “Item 1. Business—Supervision and Regulation and —Regulatory Capital Requirements”), which implement the Basel III capital framework and various provisions of the Dodd-Frank Act, which were fully phased in as of January 1, 2019. As of June 30, 2022, we and the Bank met all capital adequacy requirements under the Capital Rules.

FDIC regulations set forth the qualifications necessary for a bank to be classified as “well-capitalized,” primarily for assignment of FDIC insurance premium rates. Failure to qualify as “well-capitalized” can negatively impact a bank’s ability to expand and to engage in certain activities. The Company and the Bank qualified as “well-capitalized” at June 30, 2022 and December 31, 2021.

As part of its response to the impact of COVID-19, the U.S. federal regulatory agencies issued an interim final rule that provided the option to temporarily delay certain effects of CECL on regulatory capital for two years, followed by a three year transition period. The interim final rule allows bank holding companies and banks to delay for two years 100% of the day one impact of adopting CECL and 25% of the cumulative change in the reported allowance for credit losses since adopting CECL. The Company elected to adopt the interim final rule. As a result, certain capital ratios and amounts as of June 30, 2022 and December 31, 2021 have a reduced impact of the increased allowance for credit losses related to the adoption of CECL.

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The following table presents the capital ratios and the capital conservation buffer, as applicable, for the Company and its banking subsidiary as of the dates presented below:

	Company				Columbia Bank
	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
CET1 risk-based capital ratio	12.59	%	13.01	%	12.64	%	13.06	%
Tier 1 risk-based capital ratio	12.59	%	13.01	%	12.64	%	13.06	%
Total risk-based capital ratio	13.69	%	14.21	%	13.67	%	14.18	%
Leverage ratio	8.77	%	8.55	%	8.86	%	8.60	%
Capital conservation buffer	5.69	%	6.21	%	5.67	%	6.18	%

Non-GAAP Financial Measures

The Company considers operating net interest margin (tax equivalent) to be a useful measurement as it more closely reflects the ongoing operating performance of the Company. Additionally, presentation of the operating net interest margin allows readers to compare certain aspects of the Company’s net interest margin to other organizations that may not have had significant acquisitions. Despite the usefulness of the operating net interest margin (tax equivalent) 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. 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 (tax equivalent) to the net interest margin (tax equivalent) for the periods indicated:

	Three Months Ended						Six Months Ended
	June 30, 2022			March 31, 2022			June 30, 2022			June 30, 2021
	(dollars in thousands)
Operating net interest margin non-GAAP reconciliation:
Net interest income (tax equivalent) (1)	$	149,542		$	148,268		$	297,810		$	253,298
Adjustments to arrive at operating net interest income (tax equivalent):
Incremental accretion income on acquired loans	2,053			350			2,403			(1,911)
Premium amortization on acquired securities	1,132			1,031			2,163			1,052
Operating net interest income (tax equivalent) (1)	$	152,727		$	149,649		$	302,376		$	252,439
Average interest earning assets	$	18,975,517		$	19,266,644		$	19,120,276		$	15,799,940
Net interest margin (tax equivalent) (1)	3.16		%	3.12		%	3.14		%	3.23		%
Operating net interest margin (tax equivalent) (1)	3.23		%	3.15		%	3.19		%	3.22		%

__________

(1) Tax-exempt interest income has been adjusted to a tax equivalent basis. The amount of such adjustment was an addition to net interest income of $2.1 million for both the three months ended June 30, 2022 and March 31, 2022, respectively, and $1.9 million for the three months ended June 30, 2021.

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Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Sensitivity

We are exposed to interest rate risk, which is the risk that changes in prevailing interest rates will adversely affect assets, liabilities, capital, income and expenses at different times or in different amounts. Generally, there are four sources of interest rate risk as described below:

Repricing risk—Repricing risk is the risk of adverse consequences from a change in interest rates that arises because of differences in the timing of when those interest rate changes affect an institution’s assets and liabilities.

Basis risk—Basis risk is the risk of adverse consequences resulting from unequal changes in the spread between two or more rates for different instruments with the same maturity.

Yield curve risk—Yield curve risk is the risk of adverse consequences resulting from unequal changes in the spread between two or more rates for different maturities for the same instrument.

Option risk—In banking, option risks are known as borrower options to prepay loans and depositor options to make deposits, withdrawals and early redemptions. Option risk arises whenever a bank’s products give customers the right, but not the obligation, to alter the quantity or the timing of cash flows. We are also exposed to option risk in callable bonds as the counterparty may call the bonds during a low rate environment resulting in reinvestment of the proceeds at lower yields. Option risk is also present in the investment portfolio as mortgage-backed securities could prepay or callable bonds could be called.

Since our earnings are primarily dependent on our ability to generate net interest income, we actively monitor and manage the effects of adverse changes in interest rates on our results of operations. Management of our interest rate risk is overseen by our board of directors, which is responsible for establishing policies and interest rate limits and approving these policies and interest rate limits annually. These policies include our asset/liability management policy, which provides guidelines for controlling our exposure to interest rate risk. These guidelines direct management to assess the impact of changes in interest rates upon both earnings and capital. These guidelines also establish limits for interest rate risk sensitivity.

We maintain an Asset/Liability Management Committee which is responsible for developing, monitoring and reviewing asset/liability processes, interest rate risk exposures, strategies and tactics. The Asset/Liability Management Committee reports on a periodic basis to our board of directors. It is the responsibility of management to execute the approved policies, develop and implement risk management strategies and to report to the board of directors on a regular basis.

Interest Rate Risk Sensitivity

We use a number of measures 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 may not be realized and, as a result, actual results will differ from our projections. In addition, variances in the timing, magnitude and frequency of interest rate changes, overall market conditions including volumes and pricing, and changes in management strategies, among other factors, will also result in variances between the projected and actual results.

The following table summarizes the expected impact on net interest income over a one or two year period if interest rates gradually increased or decreased during the first year, based on the results of the simulation model as of June 30, 2022:

	Year one				Year two
Change in basis points (bps)	Change in net interest income		% Change in net interest income		Change in net interest income		% Change in net interest income
	(dollars in thousands)
+200	$	16,756	2.71	%	$	67,414	10.66	%
-100	$	(17,073)	(2.76)	%	$	(55,041)	(8.70)	%

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The following table summarizes the expected impact on net interest income over a one or two year period if interest rates instantaneously increased or decreased, based on the results of the simulation model as of June 30, 2022:

	Year one				Year two
Change in basis points (bps)	Change in net interest income		% Change in net interest income		Change in net interest income		% Change in net interest income
	(dollars in thousands)
+200	$	44,374	7.17	%	$	88,329	13.96	%
-100	$	(42,921)	(6.93)	%	$	(65,968)	(10.43)	%

The projections are based on the current interest rate environment and we assume our balance sheet remains constant during the next two years. Market interest rates increased substantially during the quarter and since year end. Loan interest rate indexes such as Prime, LIBOR and SOFR also increased significantly. Our ability to reprice deposits downward is limited given our low cost of funds.

Exposure to falling interest increased since the prior quarter mainly due to the rise in market interest rates. Loan coupon rates increased by more than the rates paid on deposits as we were able to maintain a disciplined pricing approach on deposits. Our ability to reprice our deposit costs downward in the falling interest rate scenarios is constrained given our low cost of funds.

Net interest income sensitivity excludes the amortization of premiums, discounts and deferred fees on the existing loan portfolio although the amortization of the collar is included in loan interest income.

On January 23, 2019, the Company entered into an interest rate collar derivative transaction with a $500.0 million notional value based on one month LIBOR. In October 2020, the collar was terminated and resulted in a $34.4 million realized gain that was recorded in accumulated other comprehensive income, net of deferred income taxes. The gain will amortize into interest income through February 2024 which is in line with the initial term of the interest rate collar. The gain will be amortized in this manner as long as the cash flows pertaining to the hedged item are expected to occur.

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 CEO and 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 Control 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 control over financial reporting.

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PART II - OTHER INFORMATION

Item 1.LEGAL PROCEEDINGS

The Company and its subsidiaries are party to routine litigation arising in the ordinary course of business. Management believes that, based on information currently known to it, any liabilities arising from such litigation will not have a material adverse impact on the Company’s financial conditions, results of operations or cash flows.

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, 2021 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 Annual Report on Form 10-K for the year ended December 31, 2021.

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

(a)Not applicable

(b)Not applicable

(c)The following table provides information about repurchases of common stock by the Company during the quarter ended June 30, 2022:

Period	Total Number of Common Shares Purchased (1)	Average Price Paid per Common Share		Total Number of Shares Purchased as Part of Publicly Announced Plan (2)	Maximum Number of Remaining Shares That May Yet Be Purchased Under the Plan (2)
4/1/2022 - 4/30/2022	382	$	16.21	—	—
5/1/2022 - 5/31/2022	213	28.61		—	—
6/1/2022 - 6/30/2022	—	—		—	—
	595	20.65		—

__________

(1) Common shares repurchased by the Company during the quarter consisted of cancellation of shares of common stock to pay the shareholders’ withholding taxes.

(2) The Company does not have a current share repurchase plan.

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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

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.INS+	XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH+	XBRL Taxonomy Extension Schema
101.CAL+	XBRL Taxonomy Extension Calculation Linkbase
101.LAB+	XBRL Taxonomy Extension Label Linkbase
101.PRE+	XBRL Taxonomy Extension Presentation Linkbase
101.DEF+	XBRL Taxonomy Extension Definition Linkbase
104+	Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document).

_______

+ Filed herewith

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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:	August 4, 2022	By	/s/ CLINT E. STEIN
			Clint E. Stein
			President and Chief Executive Officer (Principal Executive Officer)
Date:	August 4, 2022	By	/s/ AARON JAMES DEER
			Aaron James Deer
			Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date:	August 4, 2022	By	/s/ BROCK M. LAKELY
			Brock M. Lakely
			Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)

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