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
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;
•any material failure or interruption of our information and communications
systems;
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•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 September 30, 2022 and June 30, 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 third quarter of $64.9 million or $0.83
per diluted common share, compared to $58.8 million or $0.75 per diluted common
share for the second quarter of 2022. Net interest income for the three months
ended September 30, 2022 was $162.5 million, an increase of $15.0 million from
the prior quarter. The increase was primarily due to higher loan interest income
as a result of increased average rates and higher average balances. This was
partially offset by lower interest income from securities due to decreased
average balances and increased deposit interest expense driven by higher average
rates on public fund deposits.
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The Company recorded a $5.3 million provision for credit losses for the third
quarter of 2022 compared to a provision of $2.1 million for the second quarter
of 2022. The increase in provision expense for the third quarter of 2022 as
compared to the second quarter of 2022 was primarily related to loan growth, but
also was impacted by a less favorable economic forecast. The prior quarter's
provision was primarily related to loan growth partially offset by improved
credit quality.

Noninterest income for the quarter was $26.6 million, an increase of $1.6
million from the prior quarter. The increase was primarily due to a $3.7 million
gain from the sale-leaseback of owned real estate. The gain was partially offset
by decreased loan revenue principally as a result of lower mortgage banking
revenue and loan-related fees. Overall mortgage production declined as a result
of the higher rate environment.

Total noninterest expense for the quarter ended September 30, 2022 was $101.4
million, an increase of $6.1 million from the prior quarter. Merger-related
expenses in the quarter were $3.2 million compared to $3.9 million for the prior
quarter. The largest contributor to the decrease in noninterest expense was
related to compensation and employee benefits driven by higher incentive
expense. In addition, there was increased net loan expense and data processing
and software expense.

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

The Company reported net income for the nine months ended September 30, 2022 of
$181.3 million or $2.32 per diluted common share, compared to $159.9 million or
$2.24 per diluted common share for the same period in 2021. Net interest income
for the nine months ended September 30, 2022 was $456.1 million, an increase of
$74.1 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 nine months ended September 30,
2022 was a recapture of $450 thousand compared to a recapture of $6.3 million
for the first nine months of 2021. The lower recapture for the first nine months
of 2022 compared to the same period in 2021 was primarily due to loan growth.

Noninterest income for the nine months ended September 30, 2022 was $75.8
million, an increase of $6.0 million from the prior year period. The increase
was primarily due to the previously noted $3.7 million gain from a
sale-leaseback transaction and higher deposit account and treasury management
fees. This was partially offset by lower mortgage banking revenue due to lower
overall mortgage production as a result of the higher rate environment.

For the nine months ended September 30, 2022, noninterest expense was $301.9
million, an increase of $44.2 million from $257.7 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 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
                                                               September 30, 2022                                                     June 30, 2022
                                              Average               Interest                Average               Average               Interest                Average
                                             Balances             Earned / Paid              Rate                Balances             Earned / Paid              Rate

                                                                                               (dollars in thousands)
ASSETS
Loans, net (1)(2)                         $ 11,513,653          $      132,302                  4.56  %       $ 10,989,493          $      112,142                  4.09  %
Taxable securities                           6,419,977                  31,987                  1.98  %       $  6,761,383          $       34,622                  2.05  %
Tax exempt securities (2)                      710,137                   4,635                  2.59  %       $    729,916          $        4,753                  2.61  %
Interest-earning deposits with
banks                                          220,678                   1,191                  2.14  %       $    494,725          $          887                  0.72  %
Total interest-earning assets               18,864,445                 170,115                  3.58  %       $ 18,975,517          $      152,404                  3.22  %
Other earning assets                           306,200                                                        $    305,775
Noninterest-earning assets                   1,527,607                                                        $  1,488,910
Total assets                              $ 20,698,252                                                        $ 20,770,202
LIABILITIES AND SHAREHOLDERS' EQUITY
Money market accounts                        4,342,054                   1,378                  0.13  %          4,406,022                   1,000                  0.09  %
Interest-bearing demand                      2,085,124                     419                  0.08  %          2,123,005                     411                  0.08  %
Savings accounts                             1,658,078                      82                  0.02  %          1,638,334                      78                  0.02  %
Interest-bearing public funds,
other than certificates of deposit             724,502                   2,410                  1.32  %            756,528                     923                  0.49  %
Certificates of deposit                        386,623                     157                  0.16  %            411,115                      52                  0.05  %
Total interest-bearing deposits              9,196,381                   4,446                  0.19  %          9,335,004                   2,464                  0.11  %
FHLB advances and FRB borrowings                11,512                     109                  3.76  %              7,340                      73                  3.99  %
Subordinated debentures                         10,000                     220                  8.73  %             10,000                     172                  6.90  %
Other borrowings and
interest-bearing liabilities                    74,722                     481                  2.55  %             62,017                     153                  0.99  %
Total interest-bearing liabilities           9,292,615                   5,256                  0.22  %          9,414,361                   2,862                  0.12  %
Noninterest-bearing deposits                 8,878,977                                                           8,822,071
Other noninterest-bearing
liabilities                                    255,648                                                             235,159
Shareholders' equity                         2,271,012                                                           2,298,611
Total liabilities & shareholders'
equity                                    $ 20,698,252                                                        $ 20,770,202
Net interest income (tax equivalent)                            $      164,859                                                      $      149,542
Net interest margin (tax equivalent)                                                            3.47  %                                                             3.16  %


__________
(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 $2.1 million and $2.8 million for the three months ended
September 30, 2022 and June 30, 2022, respectively. The net incremental
amortization on acquired loans was $871 thousand for the three months ended
September 30, 2022 compared to net incremental amortization of $2.1 million for
the three months ended June 30, 2022.
(2)Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent
yield adjustment to interest earned on loans was $1.4 million and $1.1 million
for the three months ended September 30, 2022 and June 30, 2022, respectively.
The tax equivalent yield adjustment to interest earned on tax exempt securities
was $973 thousand and $998 thousand for the three months ended September 30,
2022, and June 30, 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:

                                                                       Nine Months Ended September 30,                                         Nine Months Ended September 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)                                     $       11,059,237          $      352,625                4.26  %       $        9,592,178          $      308,730                4.30  %
Taxable securities                                             6,796,812                 103,771                2.04  %                5,286,406                  73,940                1.87  %
Tax exempt securities (2)                                        743,970                  14,103                2.53  %                  615,169                  10,505                2.28  %
Interest-earning deposits with banks                             434,043                   2,373                0.73  %                  650,203                     595                0.12  %
Total interest-earning assets                                 19,034,062          $      472,872                3.32  %               16,143,956          $      393,770                3.26  %
Other earning assets                                             304,959                                                                 244,269
Noninterest-earning assets                                     1,468,076                                                               1,247,801
Total assets                                          $       20,807,097                                                      $       17,636,026
LIABILITIES AND SHAREHOLDERS' EQUITY
Money market accounts                                          4,425,567                   3,338                0.10  %                3,625,688                   2,132                0.08  %
Interest-bearing demand                                        2,077,850                   1,204                0.08  %                1,526,312                     849                0.07  %
Savings accounts                                               1,643,021                     237                0.02  %                1,311,118                     139                0.01  %
Interest-bearing public funds, other than
certificates of deposit                                          752,473                   3,621                0.64  %                  698,745                     753                0.14  %
Certificates of deposit                                          411,477                     306                0.10  %                  331,910                     506                0.20  %
Total interest-bearing deposits                                9,310,388                   8,706                0.13  %                7,493,773                   4,379                0.08  %
FHLB advances and FRB borrowings                                   8,751                     253                3.87  %                    7,395                     217                3.92  %
Subordinated debentures                                           10,000                     536                7.17  %                   35,034                   1,371                5.23  %
Other borrowings and interest-bearing
liabilities                                                       70,969                     708                1.33  %                   51,787                      66                0.17  %
Total interest-bearing liabilities                             9,400,108          $       10,203                0.15  %                7,587,989          $        6,033                0.11  %
Noninterest-bearing deposits                                   8,799,631                                                               7,482,888
Other noninterest-bearing liabilities                            239,993                                                                 223,911
Shareholders' equity                                           2,367,365                                                               2,341,238
Total liabilities & shareholders' equity              $       20,807,097                                                      $       17,636,026
Net interest income (tax equivalent)                                              $      462,669                                                          $      387,737
Net interest margin (tax equivalent)                                                                            3.25  %                                                                 3.21  %


__________
(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 $9.1 million and $26.0 million for the nine months ended
September 30, 2022 and 2021, respectively. The incremental amortization on
acquired loans was $3.3 million for the nine months ended September 30, 2022
compared to net incremental accretion of $2.8 million for the nine months ended
September 30, 2021.
(2)Tax-exempt income is calculated on a tax equivalent basis. The tax equivalent
yield adjustment to interest earned on loans was $3.6 million and $3.5 million
for the nine months ended September 30, 2022 and 2021, respectively. The tax
equivalent yield adjustment to interest earned on tax exempt securities was $3.0
million and $2.2 million for the nine months ended September 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 September 30, 2022 Compared to

                                                                                     June 30, 2022
                                                                              Increase (Decrease) Due to
                                                                      Volume             Rate            Total (1)

                                                                                    (in thousands)
Interest Income
Loans, net                                                         $   5,534          $ 14,626          $  20,160
Taxable securities                                                    (1,718)             (917)            (2,635)
Tax exempt securities                                                   (129)               11               (118)
Interest-earning deposits with banks                                    (705)            1,009                304
Interest income                                                    $   2,982          $ 14,729          $  17,711
Interest Expense
Deposits:
Money market accounts                                              $     (15)         $    393          $     378
Interest-bearing demand                                                   (7)               15                  8
Savings accounts                                                           1                 3                  4
Interest-bearing public funds, other than certificates of
deposit                                                                  (40)            1,527              1,487
Certificates of deposit                                                   (4)              109                105
Total interest on deposits                                               (65)            2,047              1,982
FHLB advances and FRB borrowings                                          40                (4)                36
Subordinated debentures                                                    -                48                 48
Other borrowings and interest-bearing liabilities                         38               290                328
Interest expense                                                   $      13          $  2,381          $   2,394


__________

(1) Interest variation 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:

                                                                       Nine 

Months ended September 30, 2022 Compared to

2021 Increase (decrease) due to

                                                                          Volume              Rate            Total (1)

                                                                                        (in thousands)
Interest Income
Loans, net                                                            $    46,802          $ (2,907)         $  43,895
Taxable securities                                                         22,591             7,240             29,831
Tax exempt securities                                                       2,358             1,240              3,598
Interest earning deposits with banks                                         (260)            2,038              1,778
Interest income                                                       $    71,491          $  7,611          $  79,102
Interest Expense
Deposits:
Money market accounts                                                         528               678              1,206
Interest-bearing demand                                                       319                36                355
Savings accounts                                                               40                58                 98
Interest-bearing public funds, other than certificates of
deposit                                                                        62             2,806              2,868
Certificates of deposit                                                       102              (302)              (200)
Total interest on deposits                                                  1,051             3,276              4,327
FHLB advances and FRB borrowings                                               40                (4)                36
Subordinated debentures                                                    (1,737)              902               (835)
Other borrowings                                                               33               609                642
Interest expense                                                      $      (613)         $  4,783          $   4,170


__________

(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 third quarter of 2022 was $162.5 million, up from
$147.5 million for the second quarter in 2022. The increase was primarily due to
higher loan interest income as a result of increased average rates and higher
average balances. This was partially offset by lower interest income from
securities due to decreased average balances and increased deposit interest
expense driven by average rates on public fund deposits.

The Company's net interest margin (tax equivalent) increased to 3.47% in the
third quarter of 2022, from 3.16% for the prior quarter. This increase was
predominantly driven by higher average loan rates and a stronger earning assets
mix. The Company's operating net interest margin (tax equivalent)1 increased to
3.50% from 3.23% compared to the second quarter of 2022. The increase was also
due to higher average loan rates and a stronger earning assets mix as noted
above.

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

Net interest income for the nine months ended September 30, 2022 was $456.1
million, compared to $382.0 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.

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 Company's net interest margin (tax equivalent) increased to 3.25% for the
first nine months of 2022, from 3.21% for the prior year period. The increase in
the Company's net interest margin (tax equivalent) was driven by higher average
balances on loans and securities, a stronger earning assets mix and a higher
interest rate environment. The Company's operating net interest margin (tax
equivalent) for the nine months ended September 30, 2022 was 3.29% compared to
3.20% for the nine months ended September 30, 2021. This increase was due to the
same factors noted for the increase in net interest margin.

Provision for credit losses

Comparison of the current quarter with the previous quarter

During the third quarter of 2022, the Company recorded a $5.3 million provision
for credit losses compared to a provision of $2.1 million for the second quarter
of 2022. The increase in provision expense for the third quarter of 2022 as
compared to the second quarter of 2022 was primarily related to loan growth, but
also was impacted by a less favorable economic forecast.

The provision 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 third 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 nine months ended September 30, 2022 was
$450 thousand compared to a recapture of $6.3 million during the same period in
2021. The lower recapture for the first nine 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                                                               Nine Months Ended
                                September 30,                                                                      September 30,       September 30,
                                    2022              June 30, 2022          $ Change            % Change              2022                2021             $ Change            % Change

                                                                                                  (dollars in thousands)
Deposit account and
treasury management fees        $    8,181          $        8,212          $    (31)                   -  %       $   23,506          $   19,952          $  3,554                   18  %
Card revenue                         4,988                   5,031               (43)                  (1) %           14,986              13,395             1,591                   12  %
Financial services and
trust revenue                        4,292                   4,192               100                    2  %           13,116              11,876             1,240                   10  %
Loan revenue                         2,853                   3,881            (1,028)                 (26) %            9,927              17,067            (7,140)                 (42) %
Bank owned life insurance            1,939                   2,024               (85)                  (4) %            5,751               4,780               971                   20  %
Investment securities
gains, net                               -                       -                 -                    -  %                -                 314              (314)                (100) %
Other                                4,374                   1,666             2,708                  163  %            8,527               2,470             6,057                  245  %
Total noninterest income        $   26,627          $       25,006          $  1,621                    6  %       $   75,813          $   69,854          $  5,959                    9  %


Comparison of the current quarter with the previous quarter

Noninterest income was $26.6 million for the third quarter of 2022, an increase
of $1.6 million from the prior quarter. This increase was primarily due to a
$3.7 million gain from the sale-leaseback of owned real estate. The gain was
partially offset by decreased loan revenue, principally a result of lower
mortgage banking revenue and loan-related fees. Overall mortgage production
declined as a result of the higher rate environment.
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Comparison of the current year’s total with the period of the previous year

For the nine months ended September 30, 2022, noninterest income was $75.8
million compared to $69.9 million for the same period in 2021, an increase of
$6.0 million. The increase was primarily due to the previous noted $3.7 million
gain from a sale-leaseback transaction and higher deposit account and treasury
management fees. This was partially 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                                                               Nine Months Ended
                              September 30,                                                                      September 30,       September 30,
                                  2022              June 30, 2022          $ Change            % Change              2022                2021             $ Change            % Change

                                                                                                (dollars in thousands)
Compensation and
employee benefits             $   60,744          $       57,386          $  3,358                    6  %       $  181,209          $  159,865          $ 21,344                   13  %
Occupancy                         10,469                   9,632               837                    9  %           31,110              27,739             3,371                   12  %
Data processing and
software                          10,548                   9,185             1,363                   15  %           30,057              24,368             5,689                   23  %
Legal and professional
fees                               4,022                   5,182            (1,160)                 (22) %           15,739              10,973             4,766                   43  %
Amortization of
intangibles                        2,219                   2,219                 -                    -  %            6,726               5,611             1,115                   20  %
B&O taxes                          1,771                   1,584               187                   12  %            4,944               4,332               612                   14  %
Advertising and
promotion                            830                   1,208              (378)                 (31) %            2,764               2,026               738                   36  %
Regulatory premiums                1,782                   1,461               321                   22  %            4,779               3,431             1,348                   39  %
Net cost (benefit) of
operation of OREO                     (4)                    116              (120)                (103) %              122                  52                70                  135  %
Other                              9,065                   7,406             1,659                   22  %           24,428              19,285             5,143                   27  %
Total noninterest
expense                       $  101,446          $       95,379          $  6,067                    6  %       $  301,878          $  257,682          $ 44,196                   17  %

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                              Nine Months Ended
                                                                                                  September 30,          September 30,
                                               September 30, 2022          June 30, 2022               2022                  2021

                                                                                   (in thousands)
Merger-related expenses:
Compensation and employee benefits            $          250             $  

612 $1,448 $ – Occupancy

                                                435                        112                  1,366                     -
Data processing and software                             510                        501          $       2,050                     1
Legal and professional fees                            1,418                      1,906                  7,533                 2,663

Advertising and promotion                                 24                         10                    168                     -
Other                                                    609                        760                  1,639                    38
Total impact of merger-related expense
to noninterest expense                        $        3,246             $  

3,901 $14,204 $2,702
Merger-related costs per transaction:
commercial bank (1)

                                     568                      1,749                  4,904                 2,702
Umpqua (2)                                             2,678                      2,152                  9,300                     -
Total impact of merger-related expense
to noninterest expense                        $        3,246             $        3,901          $      14,204          $      2,702


__________

(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) As of the date of this filing, the completion of this transaction is still pending full regulatory approval. See Note 17, “Subsequent Events”, for more information.

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Comparison of the current quarter with the previous quarter

Noninterest expense was $101.4 million for the third quarter of 2022, an
increase of $6.1 million from $95.4 million for the prior quarter.
Merger-related expenses during the quarter were $3.2 million compared to $3.9
million for the prior quarter. The largest contributor to the increase in
noninterest expense was related to compensation and employee benefits driven by
increased incentive expense. In addition, there was increased net loan expense
and data processing and software expense during the quarter.

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

For the nine months ended September 30, 2022, noninterest expense was $301.9
million, compared to $257.7 million for the same period in 2021, an increase of
$44.2 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                            Nine Months Ended
                                              September 30,                                 September 30,         September 30,
                                                  2022               June 30, 2022              2022                  2021

                                                                               (in thousands)
Provision (recapture) for unfunded
loan commitments                             $       (500)         $            -          $          -          $      2,200


Income Taxes

We recorded an income tax provision of $17.5 million for the third quarter of
2022, compared to a provision of $16.2 million for the three months ended
June 30, 2022, with effective tax rates of 21% and 22%, respectively. For the
nine months ended September 30, 2022 and 2021, we recorded income tax provisions
of $49.3 million and $40.6 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 $20.41 billion at September 30, 2022, a decrease of $540.0
million from December 31, 2021. Cash and cash equivalents decreased $507.0
million. Loans increased $1.05 billion during the first nine months of 2022,
which was primarily the result of new loan production partially offset by loan
payments. Debt securities available for sale were $4.70 billion at September 30,
2022, a decrease of $1.21 billion from December 31, 2021 which was due to a
combination of maturities, repayments and fair value movement. Total liabilities
were $18.29 billion as of September 30, 2022, a decrease of $66.7 million from
December 31, 2021 primarily due to a decrease in noninterest-bearing deposits.

Investment security

At September 30, 2022, the Company's investment portfolio primarily consisted of
debt securities available for sale totaling $4.70 billion compared to $5.91
billion at December 31, 2021 and debt securities held to maturity of $2.08
billion and $2.15 billion at September 30, 2022 and December 31, 2021,
respectively. The decrease in the debt securities available for sale from
year-end is due to a $759.7 million decline in unrealized gains, $613.0 million
in maturities and repayments, and $23.2 million in premium amortization,
partially offset by $185.8 million in purchases. The decrease in debt securities
held to maturity from year-end is due to $149.6 million in maturities and
repayments and $17.1 million in premium amortization, partially offset by
purchases of $97.7 million. The average duration of our debt securities
available for sale was approximately 5 years and 3 months at September 30, 2022.
The average duration of our debt securities held to maturity was approximately 5
years and 8 months at September 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.
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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.

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 September 30, 2022, the market value of debt securities available for sale
had a net unrealized loss of $746.7 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 nine months ended September 30,
2022. At September 30, 2022, the Company had $4.66 billion of debt securities
available for sale with gross unrealized losses of $747.3 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 September 30, 2022.

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

                                                                          September 30,         December 31,
                                                                              2022                  2021

                                                                                    (in thousands)
Debt securities available for sale:
U.S. government agency and government-sponsored enterprise
mortgage-backed securities and collateralized mortgage obligations       $  2,852,867          $  3,745,601
Other asset-backed securities                                                 334,009               463,063
State and municipal securities                                                826,833               997,291

WE titles of government agencies and government-sponsored companies

                                                                    222,951               252,576
U.S. government securities                                                    166,306               157,536
Non-agency collateralized mortgage securities                                 297,855               294,932
Total debt securities available for sale, at fair value                  $  4,700,821          $  5,910,999
Debt securities held to maturity:
U.S. government agency and government-sponsored enterprise
mortgage-backed securities and collateralized mortgage obligations       $  2,079,285          $  2,148,327

Total debt securities held to maturity, at amortized cost                $  2,079,285          $  2,148,327
Equity securities                                                              13,425                13,425
Total investment securities                                              $  

6,793,531 $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.
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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 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:

                                                                         September 30,         December 31,
                                                                             2022                  2021

                                                                                   (in thousands)
Acquisition:
Bank of Commerce                                                        $      7,511          $     12,923
Pacific Continental                                                           (4,008)               (5,306)
All other purchased and acquired net premium                                   3,784                 5,031
Total net premium at period end                                         $   

7,287 $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.
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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 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 September 30, 2022, our ACL was $154.9 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 September 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 $68.8 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 September 30, 2022, brokered deposits, reciprocal money
market accounts and other wholesale deposits (excluding public funds) totaled
$919.1 million, or 5.1% 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:

                                                                        September 30, 2022                               December 31, 2021
                                                                                             % of                                            % of
                                                                   Balance                  Total                  Balance                  Total

                                                                                              (dollars in thousands)
Demand and other noninterest-bearing                        $        8,911,267                 49.8  %       $       8,856,714                 49.1  %
Money market                                                         3,355,705                 18.7  %               3,525,299                 19.6  %
Interest-bearing demand                                              2,047,169                 11.4  %               1,999,407                 11.1  %
Savings                                                              1,657,799                  9.2  %               1,617,546                  9.0  %
Interest-bearing public funds, other than
certificates of deposit                                                701,741                  3.9  %                 779,146                  4.3  %
Certificates of deposit, less than $250,000                            221,087                  1.2  %                 249,120                  1.4  %
Certificates of deposit, $250,000 or more                              127,229                  0.7  %                 160,490                  

0.9% Certificates of deposit insured by the CD Option of IntraFi Network Deposits

                                                22,730                  0.1  %                  35,611                  0.2 

%

Reciprocal money market accounts                                       896,414                  5.0  %                 786,046                  4.4  %
Subtotal                                                    $       17,941,141                100.0  %       $      18,009,379                100.0  %
Valuation adjustment resulting from acquisition
accounting                                                  $              184                               $             736
Total deposits                                              $       17,941,325                               $      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
September 30, 2022 and December 31, 2021, we had FHLB advances of $14.3 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 September 30, 2022 and December 31, 2021, we had
deposit customer sweep-related repurchase agreements of $48.7 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 September 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 September 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 September 30, 2022, we had commitments to extend credit of $3.87 billion
compared to $3.54 billion at December 31, 2021.

Capital resources

Equity in September 30, 2022 has been $2.12 billioncompared to $2.59 billion at December 31, 2021. Equity amounted to 10% and 12% of total assets at the end of the period September 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 September 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 September 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 September 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
                                              September 30, 2022          

December 31, 2021 September 30, 2022 December 31, 2021
CET1 risk-based capital ratio

                              12.50  %                  13.01  %                   12.55  %                  13.06  %
Tier 1 risk-based capital ratio                            12.50  %                  13.01  %                   12.55  %                  13.06  %
Total risk-based capital ratio                             13.59  %                  14.21  %                   13.57  %                  14.18  %
Leverage ratio                                              9.00  %                   8.55  %                    9.10  %                   8.60  %
Capital conservation buffer                                 5.59  %                   6.21  %                    5.57  %                   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                                       Nine Months Ended
                                               September 30, 2022          June 30, 2022               September 30, 2022          September 30, 2021

                                                                                       (dollars in thousands)
Operating net interest margin non-GAAP
reconciliation:
Net interest income (tax equivalent)
(1)                                           $          164,859          $    149,542                $          462,669          $          387,737
Adjustments to arrive at operating net
interest income (tax equivalent):
Premium amortization (discount
accretion) on acquired loans                                 871                 2,053                             3,274                      (2,795)
Premium amortization on acquired
securities                                                   877                 1,132                             3,040                       1,474
Operating net interest income (tax
equivalent) (1)                               $          166,607          $    152,727                $          468,983          $          386,416

Average interest earning assets               $       18,864,445          $ 18,975,517                $       19,034,062          $       16,143,956
Net interest margin (tax equivalent)
(1)                                                         3.47  %               3.16  %                           3.25  %                     3.21  %
Operating net interest margin (tax
equivalent) (1)                                             3.50  %               3.23  %                           3.29  %                     3.20  %


__________
(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 $2.4 million
and $2.1 million for the three months ended September 30, 2022 and June 30,
2022, respectively, and $6.5 million and $5.7 million for the nine months
ended September 30, 2022 and September 30, 2021, respectively.
                                       51

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