Improved asset quality and lower expenses lifted Columbia Banking System (COLB) in the first quarter.

Earnings at the $4.9 billion-asset company rose 37% from a year earlier, to $12.2 million, or 31 cents per share.

Columbia's loan portfolio grew 9.7% year over year, to $2.6 billion, but net interest income fell 20.1% from a year earlier, to $53.5 million, due to lower accretion on loans acquired in failed-bank deals. The net interest margin compressed 1.61 percentage points year over year, to 5.06%.

Noninterest expense fell 14% from a year earlier, to $38 million, primarily as a result of fewer real estate-related write-downs. The company's efficiency ratio improved 2.8 percentage points, to 68.68%.

The provision for loan losses fell 77.8% from a year earlier, to $1 million, as credit quality improved. The company recorded chargeoffs of $125,000, compared with chargeoffs of $5.3 million in the first quarter of 2012.

"The results for the quarter reflect our emphasis on strategic initiatives to further improve our core performance measures," Melanie Dressel, Columbia's chief executive, said in a press release.

Noninterest income fell 82% from a year earlier, to $1.7 million, primarily because of a lower reimbursement from the Federal Deposit Insurance Corp. for losses on loans Columbia has acquired from failed banks.

Columbia has acquired eight banks in the past six years, many of them failed institutions. On April 1, Columbia bought West Coast Bancorp, healthy institution in Lake Oswego, Ore., for $506 million in cash and stock.

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