Columbia Banking Systems Inc., Tacoma, Wash., said first-quarter earnings would fall about 25% short of analysts' estimates.

The $1 billion-asset company announced last week that it would make 19 cents to 20 cents a share for the quarter ending today, well shy of the 26 cents that analysts had projected.

Management attributed the drop to slower-than-expected loan growth and the overhead costs associated with operating a new back-office facility. Chief financial officer Gary Schminkey said more and more of the bank's business customers are paying off their lines of credit and using cash to fund operations.

Mr. Schminkey acknowledged that the company "can be more efficient" and said it is taking steps to reduce costs. He added that it is too early to tell whether net income for the year will meet Wall Street's estimates of $1.13 a share.

Shares of the $1 billion-asset bank fell 8% on the news Thursday, to $15.0625. At midday Tuesday, it was up 43.75 cents, to $15.50.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.