With one of the largest war chests of capital in the Pacific Northwest, Columbia Banking System Inc. in Tacoma, Wash., has long been viewed as one of that market's likely consolidators.

While the $4.26 billion-asset Columbia embraces that title, the company says it won't reach beyond its comfort zone to make a deal happen.

"We would love to acquire other banks," Melanie Dressel, Columbia's president and chief executive, said during the company's fourth quarter conference call on Friday. "We're not going to do anything crazy. We're going to maintain our discipline."

At the end of the fourth quarter, Columbia's tangible common equity ratio was 14%, making it one of the better capitalized companies in the Northwest, said Aaron James Deer, an analyst at Sandler O'Neill & Partners, in an interview prior to the conference call.

"They have a ton of capital," Deer said. "We want to know what their organic growth prospects look like and if they are looking at additional deals, be it for failed banks or traditional M&A."

The company warned that while its commercial loans are growing, it views expects demand for such loans this year to remain weak.

Dressel said that although the company is still interested on FDIC-assisted transactions, the appeal is waning as the loss-sharing agreements have evolved and the inventory of likely failures in concentrated in smaller banks. Dressel said the company is interested in open-bank deals and has even made a wish list as it looks to deploy its capital, but is cautious.

"There are boards who are just very, very tired and that more than anything, I think, is an indicator that there will be some deals done this year," Dressel said, adding that the company would have to be comfortable with an open bank's target's portfolio.

Last January, the company grew dramatically with the back-to-back acquisitions of the $373 million-asset American Marine Bank in Bainbridge Island, Wa., and the $1.1 billion-asset Columbia River Bank in The Dalles, Ore., from the Federal Deposit Insurance Corp. By Dec. 31, the company's assets had grown by a third from a year earlier.

The company made $12.6 million in the fourth quarter, up from $447,000 a year earlier. At 32 cents per share, the earnings beat the average analyst estimate by 146%.

The earnings improvement was driven by a 75% drop in the loan loss provision, to $3.8 million.

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