COLUMBIA BANKING SYSTEM, INC. MANAGEMENT REPORT ON FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

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 the current quarter with the previous 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 the current year’s total with the period of the previous year

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.
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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               Interest                Average               Average               Interest                Average
                                             Balances             Earned / Paid              Rate                Balances             Earned / Paid              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.
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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                 Interest               Average               Average                 Interest               Average
                                                           Balances              Earned / Paid             Rate                 Balances              Earned / Paid             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.

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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:

                                                                     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) Interest variation that is not due solely to volume or rate has been allocated in proportion to the absolute dollar amount of each variation.

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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) Interest variation that is not due solely to volume or rate has been allocated in proportion to the absolute dollar amount of each variation.

Comparison of the current quarter with the previous 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 the current year’s total with the period of the previous year

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 Net operating interest margin (tax equivalent) is a non-GAAP financial measure. See the “Non-GAAP Financial Measures” section of this MD&A.

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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 the current quarter with the previous 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 the current year’s total with the period of the previous year

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.

Non-interest income

The following table shows the significant components of non-interest revenue and the related dollar and percentage change from period to period:

                                                             Three Months Ended                                                                    Six Months Ended
                                                         March 31,
                                  June 30, 2022             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 the current quarter with the previous 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.
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Comparison of the current year’s total with the period of the previous year

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.

Non-interest expenses

The following table shows the significant components of non-interest expenses and the related dollar and percentage change from period to period:

                                                                Three Months Ended                                                                

Semester completed

                                 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 +/- 1,000% are considered insignificant and are presented as “N/M”.

The following table presents the impact of merger-related expenses for the periods indicated on the various components of non-interest expenses:

                                                                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 fees per transaction:
commercial bank (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 finalized the acquisition of commercial bank on October 1, 2021. See note 3 to the consolidated financial statements in “Item 1. Financial statements (unaudited)” of this report for further information regarding this transaction. (2) The definitive merger agreement has been signed; however, completion of this transaction is pending as of the date of this filing.

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Comparison of the current quarter with the previous 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 the current year’s total with the period of the previous year

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 security

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.
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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:

                                                                                                  December 31,
                                                                           June 30, 2022              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

WE titles of government agencies and government-sponsored companies

                                                                      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 more information on our investment portfolio and equity transactions, see note 4 to the consolidated financial statements under “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 our borrowers’ ability to meet all interest and principal obligations and therefore the risk rating may be adjusted accordingly. In the event that full collection of principal and interest is not reasonably

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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 State Bank of Colombia is a full-service commercial bank that provides a wide variety of loans and focuses its lending efforts on providing commercial and commercial real estate loans.

The following table provides additional details related to the net premium (discount) of acquired and acquired loans:

                                                    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
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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 Loans: One to four family residential loans, including home equity loans and lines of credit, are secured by properties located in our primary market areas and generally have ratios loan-to-value of 80% or less 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.

Provision 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
                                                                                       % of                                            % of
                                                                Balance               Total                  Balance                  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 deposits from the IntraFi network

                                          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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Loans

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 and 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

Equity in June 30, 2022 has been $2.24 billioncompared to $2.59 billion at December 31, 2021. Equity amounted to 11% and 12% of total assets at the end of the period June 30, 2022 and December 31, 2021respectively.

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.
                                       51

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