A method of forming a full-color output image from a color filter array image having a plurality of color pixels having at least two different color responses and panchromatic pixels, comprising capturing a color filter array image using an image sensor including panchromatic pixels and color pixels having at least two different color responses, the pixels being arranged in a repeating pattern having a square minimal repeating unit having at least three rows and three columns, the color pixels being arranged along one of the diagonals of the minimal repeating unit, and all other pixels being panchromatic pixels; computing an interpolated panchromatic image from the color filter array image; computing an interpolated color image from the color filter array image; and forming the full color output image from the interpolated panchromatic image and the interpolated color image.