Columbia Bank, of Tacoma, plans to move its Spokane regional office and downtown branch into the historic Fernwell Building in mid-June.

The bank, which acquired eight Bank of Whitman branches last year when the Federal Deposit Insurance Corp. shut down that Colfax-based company, has leased the entire first floor and half of the fourth floor of the historic building and has started remodeling that space, which includes a total of 10,000 square feet of floor space.

Hugo VanderWaal, Columbia's Tacoma-based facilities director, says total cost of the improvements is budgeted at about $1 million.

Located at 505 W. Riverside, the new branch location is one block east of and across Riverside Avenue from Columbia's current offices, at 618 W. Riverside. Mark Nelson, Columbia's chief operating officer, says the bank decided to move after being unable to come to terms on a new lease with its landlord, BKW Spokane LLC. BKW Spokane has sued Columbia for breach of contract, but Nelson says the bank has referred the lawsuit to the FDIC.

"The FDIC will need to work that out with the landlord," Nelson says, adding, "We would have preferred to stay there. It would be a lot easier."

The new branch location is about two-thirds the size of the current space. Nelson says Bank of Whitman had executive offices there and other operations that Columbia houses at its Tacoma headquarters. Consequently, he says, the company doesn't need as much space as Bank of Whitman had leased.

Also, VanderWaal says, the layout of the branch was different from Columbia's typical branch design. He says the new space will have fewer teller windows and more places where customers can sit down with bank staff to conduct transactions.

"We like to make it a friendly-type atmosphere," he says.

Columbia currently employs 27 people in its downtown Spokane operations, and VanderWaal says the new space will have room to accommodate a total of 32 people.

Retail banking operations, security, information technology, and marketing are expected to be housed in the first-floor space. A wealth management department and administrative offices will be located on the fourth floor.

Currently, Columbia plans to close at the end of day on Friday, June 15, at its current location and open Monday, June 18, in its new space.

Baker Construction & Development Inc., of Spokane, is the general contractor on the remodel at the Fernwell Building, and Tacoma-based Zenczak & Partners Architects designed the improvements.

Built in 1890, the six-story Fernwell Building is on the Spokane Register of Historic Places, and VanderWaal says the bank is working with the city's historic preservation office so that its remodel complies with preservation guidelines.

Columbia Bank has 102 branches in Washington and Oregon. Its FDIC-assisted acquisition of Bank of Whitman was one of three in which it participated.

For 2011, the bank reported net income of $48 million, or $1.21 a diluted share, up from earnings of $25.8 million, or 72 cents a share, in 2010.

Its total assets as of Dec. 31 were $4.79 billion, up from $4.26 billion a year earlier.