Feature News

TACOMA, Wash., Nov. 21 /PRNewswire-FirstCall/ -- Columbia Banking System, Inc. (Nasdaq: COLB) ("Columbia") announced today that it has completed raising approximately $76.9 million in capital by issuing 76,898 shares of Series A preferred stock for $1,000 per share to the U.S. Department of Treasury as a voluntary participant in the Treasury's Capital Purchase Program.

Melanie Dressel, President and Chief Executive Officer, said, "We are pleased to have been selected as one of the first regional banks to participate in the Treasury's program, further affirming our financial strength. The additional equity bolsters our already strong capital levels, enhances our ability to lend and increases our flexibility to pursue strategic opportunities which may arise. We believe this additional measure of strength will be well received by our employees, customers and shareholders."

The preferred stock carries a 5% coupon for five years and 9% thereafter. In addition, the Treasury will receive a warrant to purchase 796,046 shares of Columbia common stock at an initial exercise price of $14.49 per share; the warrant will expire in 10 years.

Columbia's total risk-based capital ratio of 11.24% at September 30, 2008 is well above regulatory requirements for a well-capitalized financial institution. The addition of the new capital will raise Columbia's capital ratio to over 14%.

About Columbia

Headquartered in Tacoma, Washington, Columbia Banking System, Inc. is the holding company of Columbia Bank, a Washington state-chartered full-service commercial bank. With the 2007 acquisitions of Mountain Bank Holding Company and Town Center Bancorp and the 2008 internal merger of its subsidiary, Bank of Astoria, into Columbia Bank, Columbia Banking System has 52 banking offices in Pierce, King, Cowlitz, Kitsap, Thurston and Whatcom counties in Washington State, and Clackamas, Clatsop, Tillamook and Multnomah counties in Oregon. Included in Columbia Bank are former branches of Mt. Rainier National Bank, doing business as Mt. Rainier Bank, with 5 branches in King and Pierce counties. Columbia Bank does business under the Bank of Astoria name at the Bank of Astoria's former branches located in Astoria, Warrenton, Seaside and Cannon Beach in Clatsop County and in Manzanita in Tillamook County. More information about Columbia can be found on its website at http://www.columbiabank.com.

Note Regarding Forward Looking Statements

This news release includes forward looking statements, which management believes are a benefit to shareholders. These forward looking statements describe management's expectations regarding future events and developments such as future operating results, growth in loans and deposits, continued success of our style of banking and the strength of the local economy. The words "will," "believe," "expect," "should," and "anticipate" and words of similar construction are intended in part to help identify forward looking statements. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely. In addition to discussions about risks and uncertainties set forth from time to time in our filings with the SEC, factors that may cause actual results to differ materially from those contemplated by such forward looking statements include, among others, the following possibilities: (1) local and national economic conditions are less favorable than expected or have a more direct and pronounced effect on us than expected and adversely affect our ability to continue internal growth at historical rates and maintain the quality of our earning assets; (2) a continued decline in the housing/real estate market; (3) changes in interest rates significantly reduce interest margins and negatively affect funding sources; (4) deterioration of credit quality that could, among other things, increase defaults and delinquency risks in the Banks' loan portfolios (5) projected business increases following strategic expansion activities are lower than expected; (6) competitive pressure among financial institutions increases significantly; (7) legislation or regulatory requirements or changes adversely affect the businesses in which we are engaged; and (8) our ability to realize the efficiencies we expect to receive from our investments in personnel, acquisitions and infrastructure

     Contacts:     Melanie J. Dressel, President and
                   Chief Executive Officer
                   (253) 305-1911
                   Gary R. Schminkey, Executive Vice President
                   and Chief Financial Officer
                   (253) 305-1966