CBMD Columbia Bancorp (MM)

Columbia Bancorp Reports a 28% Increase in First Quarter 2005 Earnings COLUMBIA, Md., April 25 /PRNewswire-FirstCall/ -- Columbia Bancorp (NASDAQ:CBMD), parent company of The Columbia Bank (the "Bank"), today announced that net income for the first quarter 2005 increased 28.4% to $3.83 million ($.53 per diluted share), from $2.98 million ($.40 per diluted share) for the first quarter 2004. For the first quarter 2005, return on average equity was 17.14% and return on average assets was 1.29%, compared to 13.75% and 1.16%, respectively, for the first quarter 2004. FIRST QUARTER FINANCIAL HIGHLIGHTS -- Total assets ($1.24 billion), loans, net of unearned income ($978.94 million) and customer funding sources ($1.10 billion) reached record levels at March 31, 2005 and represented growth since March 31, 2004 of 14.5%, 13.2% and 14.7%, respectively. During the first quarter 2005, loans, net of unearned income, and customer funding sources grew at annualized rates of 12.1% and 30.9%, respectively. -- Return on average equity increased to 17.14% for the first quarter of 2004 compared to 13.75% reported for the first quarter of 2004. -- Net interest income (FTE) increased $2.07 million or 18.9% over the first quarter of 2004. -- Fully diluted earnings per share increased 32.5% from $.40 for the first quarter of 2004 to $.53 for the first quarter of 2005. -- Consistent with its long-term capital management strategy, the Company repurchased 218,000 shares of common stock during the quarter. -- The net interest margin (FTE) improved to 4.56% during the first quarter of 2005 as compared to 4.46% during first quarter 2004. -- The efficiency ratio (FTE) improved to 54.85% from 59.41% for the first quarter of 2004. -- Non-performing assets decreased to .06% of total assets at March 31, 2005 compared to .14% at quarter-end 2004. DETAILED REVIEW OF 2005 FINANCIAL PERFORMANCE Total assets were $1.24 billion at March 31, 2005, representing growth of $156.70 million, or 14.5%, since March 31, 2004. Loans, net of unearned income, totaled $978.94 million compared to $864.75 million at March 31, 2004, representing growth of $114.19 million or 13.2%. Growth during the twelve months since March 31, 2004 can be attributed, in large part, to the Company's continued success in the real estate development and construction and commercial lending markets, which netted increases in the respective portfolios of $84.39 million (28.8%) and $17.2 million (7.8%). The consumer loan portfolio, consisting primarily of home equity lines of credit, has also exhibited strong growth, increasing $16.35 million, or 9.3%. The Company's funding strategy emphasizes the development of customer- based funding sources in the form of retail and commercial deposits and also short-term borrowings from customers in the form of commercial paper and repurchase agreements. This focus is evidenced by a 14.7% increase in customer funding sources to $1.10 billion at March 31, 2005, from $963.05 million at March 31, 2004. The $141.65 million increase in total customer funding sources was primarily due to increases in non-interest-bearing deposits of $27.42 million and also to a $95.19 million increase in interest- bearing deposits. The Company's 2005 earnings improvement was fueled by a $2.07 million, or 18.9%, increase in net interest income (FTE) for the three months ended March 31, 2005 as compared to the first quarter of 2004. This increase was primarily the result of a 17.1% increase in average earning assets and improvement in the net interest margin (FTE) to 4.56% from 4.46%, during the first quarter of 2005 as compared to the first quarter 2004. This increase more than offset a decline in noninterest income of $125,000, or 7.1%, primarily resulting from a $232,000 decline in deposit service charges, including lower fees charged on overdraft deposit accounts and commercial account analysis charges. The $52,000, or 37.1%, increase in commission revenue on financial services sales served to partially offset the impact of the decline in deposit service charges. The Company continued to leverage its overhead structure during the first quarter of 2005 as compared to 2004, by limiting the increase in total noninterest expenses to $487,000, or 6.5%, while operating income (net interest income plus noninterest income) increased $1.85 million or 14.8%. The increase in noninterest expense during the quarter included: (i) an increase of $281,000, or 6.9%, in salaries and employee benefits; (ii) an increase in professional fees of $110,000, or 67.1%, primarily reflecting increased costs associated with Sarbanes-Oxley and other regulatory compliance matters; (iii) an increase in other noninterest expenses of $175,000, or 25.5%, due, in part, to increases in recruiting expenses and added costs incurred to support increases in loan and deposit processing volumes; and (iv) decreases in equipment and data processing expenses of $89,000, or 17.3%, and $66,000, or 12.7%, reflecting a reduction from 2004 expenses incurred as part of a core processing system conversion and the added cost efficiencies realized from that conversion. For the first quarter, the Company's efficiency ratio (FTE) was 54.85% as compared to 59.41% for the same period in 2004. While the Company continued to experience growth in its loan portfolio, asset quality remained strong as evidenced by a reduction in non-performing assets and past due loans to $716,000 at March 31, 2005. As a percent of total assets, non-performing assets and past due loans at March 31, 2005 were .06% compared to .14% at March 31, 2004. At March 31, 2005, the allowance for credit losses totaled $11.91 million, or 1.22% of total loans, compared to $11.04 million, or 1.28% of loans, at March 31, 2004. The Company recorded net recoveries of $73,000 during the first quarter of 2005 and also recorded net recoveries for the years ended December 31, 2004 and 2003 of $27,000 and $819,000, respectively. ABOUT COLUMBIA BANCORP Columbia Bancorp, headquartered in Columbia, Maryland, is a bank holding company and parent company of The Columbia Bank, a commercial bank. The Columbia Bank currently operates twenty-four banking offices in the Baltimore/Washington Corridor and provides a full range of financial services to consumers and businesses. Columbia Bancorp's Common Stock is traded on the National Market tier of The Nasdaq Stock Market(SM) under the symbol "CBMD". NON-GAAP PRESENTATION This press release includes disclosure and discussion of the net interest margin and efficiency ratio which are reported on a fully tax-equivalent basis ("FTE"). These amounts and ratios are non-GAAP financial measures as defined in Securities and Exchange Commission ("SEC") Regulation G and Item 10 of SEC Regulation S-K. Management believes that these measures are better indicators of operating performance than the GAAP-based ratios and better tools for managing net interest income, noninterest income, and noninterest expenses. A complete reconciliation of the GAAP-based and non-GAAP information included in this press release is provided in the following schedules. Non-GAAP information presented by other companies may not be comparable to that presented herein, since each company may define non-GAAP measures differently. FORWARD-LOOKING STATEMENTS Certain statements contained in this Press Release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements are based on Columbia Bancorp's current intent, belief and expectations. These statements are not guarantees of future performance and are subject to certain risks and uncertainties that are difficult to predict. Actual results may differ materially from these forward-looking statements because of interest rate fluctuations, a deterioration of economic conditions in the Baltimore/Washington metropolitan area, a downturn in the real estate market, losses from impaired loans, an increase in non-performing assets, potential exposure to environmental laws, federal and state bank laws and regulations, the highly competitive nature of the banking industry, a loss of key personnel, changes in accounting standards and other risks described in this filing and the Company's other filings with the Securities and Exchange Commission. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of today's date. Columbia Bancorp undertakes no obligation to update or revise the information contained in this filing whether as a result of new information, future events or circumstances or otherwise. Past results of operations may not be indicative of future results. COLUMBIA BANCORP Financial Highlights (dollars in thousands, except per share data) (unaudited) As of and Three Months Ended March 31, ------------------------------- 2005 2004 % Change ------------------------------- SUMMARY OF OPERATING RESULTS: Tax equivalent interest income $17,317 $13,529 28.0% Interest expense 4,299 2,580 66.6% Tax equivalent net interest income 13,018 10,949 18.9% Tax equivalent adjustment 373 274 36.1% Net interest income 12,645 10,675 18.5% Provision for credit losses 250 310 (19.4%) Noninterest income 1,631 1,756 (7.1%) Noninterest expense 8,035 7,548 6.5% Income before taxes 5,991 4,573 31.0% Income tax provision 2,162 1,592 35.8% Net income 3,829 2,981 28.4% PER SHARE DATA: Net income: Basic $0.55 $0.42 31.0% Diluted 0.53 0.40 32.5% Average number of shares outstanding: Basic 6,984,185 7,178,797 (2.7%) Diluted 7,242,967 7,434,701 (2.6%) Book value, at period end $12.74 $12.23 4.2% Tangible book value, at period end 12.74 12.23 4.2% Cash dividends declared 0.17 0.15 13.3% PERIOD END DATA: Loans, net of unearned income $978,941 $864,753 13.2% Investment securities held-to- maturity and securities available-for-sale 170,595 104,211 63.7% Assets 1,240,496 1,083,798 14.5% Noninterest-bearing deposits 248,122 220,700 12.4% Interest-bearing deposits 720,503 625,311 15.2% Total deposits 968,625 846,011 14.5% Customer funding sources (a) 1,104,701 963,051 14.7% Stockholders' equity 87,971 87,934 0.0% PERFORMANCE RATIOS: Return on average assets 1.29% 1.16% Return on average stockholders' equity 17.14% 13.75% Net interest margin 4.43% 4.34% Net interest margin (FTE) 4.56% 4.46% Efficiency ratio (FTE)(b) 54.85% 59.41% CAPITAL RATIOS: Period-end capital to risk- weighted assets: Tier 1 9.62% 9.04% Total 10.73% 10.20% Period-end tier 1 leverage ratio 8.62% 8.34% ASSET QUALITY: Allowance for credit losses to loans, net of unearned income, at period-end 1.22% 1.28% Net recoveries (charge-offs) $73 $(97) (175.3%) Annualized net recoveries (charge-offs) to average loans, net of unearned income 0.03% (0.05%) Nonperforming assets: Nonaccrual loans $588 $1,168 (49.7%) Loans 90+ days past due and accruing 128 69 85.5% Other real estate owned - 250 na ---- ------ Total nonperforming assets $716 $1,487 (51.8%) ---- ------ Nonperforming and past due loans to total loans, net of unearned income, at period-end 0.07% 0.14% Nonperforming assets and past due loans to total assets, at period- end 0.06% 0.14% COLUMBIA BANCORP Financial Highlights (dollars in thousands, except per share data) (unaudited) As of and Three Months Ended March 31, ------------------------------- 2005 2004 % Change ------------------------------- NONINTEREST INCOME AND EXPENSE BREAKDOWN: Noninterest income: Fees charged for services $773 $1,005 (23.1%) Gains and fees on sales of mortgage loans, net of costs 352 351 0.3% Net loss on other real estate owned - (9) (100.0%) Commissions earned on financial services sales 192 140 37.1% Other noninterest income 314 269 16.7% ------------------- $1,631 $1,756 (7.1%) ------------------- Noninterest expenses: Salaries and employee benefits $4,327 $4,046 6.9% Occupancy 998 976 2.3% Equipment 424 513 (17.3%) Data processing 452 518 (12.7%) Marketing 357 300 19.0% Professional fees 274 164 67.1% Postage 123 108 13.9% Stationery and supplies 111 115 (3.5%) Cash management services 108 122 (11.5%) Other noninterest expenses 861 686 25.5% ------------------- $8,035 $7,548 6.5% ------------------- AVERAGE BALANCES: Federal funds sold and interest- bearing deposits (c) $14,109 $9,513 48.3% Investment securities held-to- maturity and securities available-for-sale 163,757 122,192 34.0% Loans, net of unearned income 973,208 851,436 14.3% Loans originated for sale (c) 5,883 5,196 13.2% Total earning assets 1,156,957 988,337 17.1% Total assets 1,206,651 1,033,102 16.8% Interest-bearing deposits: NOW accounts 86,113 85,917 0.2% Savings and money market accounts 192,899 194,141 (0.6%) Time deposits 405,018 314,116 28.9% Noninterest-bearing deposits 242,659 191,551 26.7% Total deposits 926,689 785,725 17.9% Short-term borrowings (c) 152,754 128,547 18.8% Long-term borrowings 30,860 20,000 54.3% Total interest-bearing liabilities 867,644 742,721 16.8% Stockholders' equity 90,592 87,180 3.9% YIELD ANALYSIS: Federal funds sold and interest- bearing deposits 2.15% 0.89% Investment securities held-to- maturity and securities available-for-sale (FTE) 3.91% 4.30% Loans, net of unearned income (FTE) 6.49% 5.71% Total yield on earning assets (FTE) 6.07% 5.49% Interest-bearing deposits NOW accounts 0.16% 0.13% Savings and money market accounts 0.52% 0.36% Time deposits 2.77% 2.39% Short-term borrowings 2.26% 0.77% Long-term borrowings 5.23% 5.36% Total cost of interest-bearing liabilities 2.01% 1.40% -------------------------------------------------------------------- (a) Deposits plus customer-related short-term borrowings in the form of commercial paper and repurchase agreements. (b) The efficiency ratio (FTE) is defined as total noninterest expense as a percentage of net interest income, on a tax-equivalent basis, plus noninterest income. (c) Variances reflect significant fluctuations in account balances due to the nature of the accounts. --------------------------------------------------------------------- Certain reclassifications of information previously reported have been made to conform with current presentation. COLUMBIA BANCORP Consolidated Statements of Condition (dollars in thousands, except per share data) March 31, March 31, December 31, 2005 2004 2004 ---------------------------------- (unaudited) (audited) Assets Cash and due from banks $36,943 $38,631 $30,012 Interest-bearing deposits with banks 203 206 208 Federal funds sold 26,799 55,948 9,904 Investment securities held-to-maturity 110,166 50,636 116,170 Securities available-for-sale 60,429 53,575 47,980 Residential mortgage loans originated for sale 8,465 5,702 8,698 Loan receivables: Real estate - development and construction 377,841 293,454 345,375 Commercial 237,010 219,837 226,763 Real estate - mortgage: Residential 16,697 17,904 17,272 Commercial 154,367 157,922 163,985 Consumer, principally second mortgage loans and residential equity lines of credit 191,729 175,379 196,198 Other 1,354 421 668 ------------------------------- Total loans 978,998 864,917 950,261 Less: Unearned income, net of origination costs (57) (164) (91) Allowance for credit losses (11,906) (11,041) (11,583) ------------------------------- Loans, net 967,035 853,712 938,587 Other real estate owned - 250 - Property and equipment, net 6,721 7,154 6,647 Prepaid expenses and other assets 23,735 17,984 20,800 ------------------------------- Total assets $1,240,496 $1,083,798 $1,179,006 ================================== Liabilities Deposits: Noninterest-bearing $248,122 $220,700 $256,132 Interest-bearing 720,503 625,311 656,446 -------------------------------- Total deposits 968,625 846,011 912,578 Short-term borrowings 139,092 123,834 135,825 Subordinated debentures 16,496 - 10,310 Long-term borrowings 20,000 20,000 20,000 Accrued expenses and other liabilities 8,312 6,019 7,945 --------------------------------- Total liabilities 1,152,525 995,864 1,086,658 --------------------------------- Stockholders' equity Common stock, $.01 par value per share; authorized 10,000,000 shares; outstanding 6,906,822, 7,188,628 and 7,114,267 shares, respectively 69 72 71 Additional paid-in capital 38,875 48,156 45,739 Retained earnings 49,074 39,463 46,419 Accumulated other comprehensive income (loss) (47) 243 119 ------------------------------ Total stockholders' equity 87,971 87,934 92,348 ------------------------------ Total liabilities and stockholders' equity $1,240,496 $1,083,798 $1,179,006 ================================== Certain reclassifications of information previously reported have been made to conform with current presentation. COLUMBIA BANCORP Consolidated Statements of Income (dollars in thousands, except per share data) Three Months Ended March 31, ------------------------ 2005 2004 ------------------------ (unaudited) Interest income: Loans $15,379 $12,022 Investment securities 1,492 1,212 Federal funds sold and interest- bearing deposits with banks 73 21 ------------------------ Total interest income 16,944 13,255 ------------------------ Interest expense: Deposits 3,049 2,068 Borrowings 1,250 512 ------------------------ Total interest expense 4,299 2,580 ------------------------ Net interest income 12,645 10,675 Provision for credit losses 250 310 ------------------------ Net interest income after provision for credit losses 12,395 10,365 ------------------------ Noninterest income: Fees charged for services 773 1,005 Gains and fees on sales of mortgage loans, net of costs 352 351 Net loss on other real estate owned - (9) Commissions earned on financial services sales 192 140 Other 314 269 ------------------------- Total noninterest income 1,631 1,756 ------------------------- Noninterest expense: Salaries and employee benefits 4,327 4,046 Occupancy 998 976 Equipment 424 513 Data processing 452 518 Marketing 357 300 Professional fees 274 164 Postage 123 108 Stationery and supplies 111 115 Cash management services 108 122 Other 861 686 ------------------------ Total noninterest expense 8,035 7,548 ------------------------ Income before income taxes 5,991 4,573 Income tax provision 2,162 1,592 ----------------------- Net income $3,829 $2,981 ======================== Per common share data: Net income: Basic $0.55 $0.42 Diluted 0.53 0.40 Cash dividends declared $0.17 $0.15 Certain reclassifications of information previously reported have been made to conform with current presentation. COLUMBIA BANCORP Reconciliation of GAAP-based Operating Performance Measures and Core Operating Performance Measures (dollars in thousands, except per share data) Three Months Ended March 31, ---------------------- 2005 2004 ---------------------- (unaudited) GAAP-based Operating Performance Measures: Net interest income $12,645 $10,675 Provision for credit losses 250 310 Noninterest income 1,631 1,756 Noninterest expense 8,035 7,548 Income before taxes 5,991 4,573 Income tax provision 2,162 1,592 Net income 3,829 2,981 Return on average assets 1.29% 1.16% Return on average equity 17.14% 13.75% Net interest margin 4.43% 4.34% Efficiency ratio 56.28% 60.72% Net income per share - diluted $0.53 $0.40 ------------------------------------------------------------------------ Non-GAAP adjustments Tax equivalent adjustment - net interest income $373 $274 ====================== ------------------------------------------------------------------------ Core Operating Performance Measures: (a) Net interest income - tax equivalent $13,018 $10,949 Tax equivalent adjustment (373) (274) ------------------------ Net interest income 12,645 10,675 Provision for credit losses 250 310 Noninterest income 1,631 1,756 Noninterest expense 8,035 7,548 Income before taxes 5,991 4,573 Income tax provision 2,162 1,592 Net income 3,829 2,981 Return on average assets 1.29% 1.16% Return on average equity 17.14% 13.75% Net interest margin (FTE) 4.56% 4.46% Efficiency ratio (FTE) 54.85% 59.41% Net income per share - diluted $0.53 $0.40 ----------------------------------------------------------------------- (a) Core operating performance reflects GAAP-based performance presented on a fully tax-equivalent basis, exclusive of non-recurring items, where applicable. There were no non-recurring items in the periods presented. ----------------------------------------------------------------------- Certain reclassifications of information previously reported have been made to conform with current presentation. COLUMBIA BANCORP Quarterly Highlights (dollars in thousands, except per share data) 1Q05 4Q04 3Q04 ------------------------------- (unaudited) SUMMARY OF OPERATING RESULTS: GAAP-based: Interest income $16,944 $16,050 $14,833 Interest expense 4,299 3,497 3,131 Net interest income 12,645 12,553 11,702 Provision for credit losses 250 36 192 Noninterest income 1,631 1,499 1,738 Noninterest expense 8,035 8,367 7,693 Income before taxes 5,991 5,649 5,555 Income tax provision 2,162 1,976 2,037 Net income 3,829 3,673 3,518 Based on core operating performance (a): Tax-equivalent interest income $17,317 $16,376 $15,097 Interest expense 4,299 3,497 3,131 Tax-equivalent net interest income 13,018 12,879 11,966 Tax-equivalent adjustment 373 326 264 Net interest income 12,645 12,553 11,702 Provision for credit losses 250 36 192 Noninterest income 1,631 1,499 1,738 Noninterest expense 8,035 8,367 7,693 Income before taxes 5,991 5,649 5,555 Income tax provision 2,162 1,976 2,037 Net income 3,829 3,673 3,518 ------------------------------------------------------------------------ PER SHARE DATA: Net income : GAAP-based: Basic $0.55 $0.52 $0.49 Diluted 0.53 0.50 0.48 Based on core operating performance (a): Basic $0.55 $0.52 $0.49 Diluted 0.53 0.50 0.48 Average number of shares outstanding: Basic 6,984,185 7,113,768 7,128,359 Diluted 7,242,967 7,371,541 7,350,901 Book value, at period end $12.74 $12.98 $12.66 Tangible book value, at period end 12.74 12.98 12.66 Cash dividends declared 0.17 0.17 0.15 ------------------------------------------------------------------------ PERIOD END DATA: Loans, net of unearned income $978,941 $950,170 $936,000 Investment securities held-to- maturity and securities available-for-sale 170,595 164,150 150,604 Assets 1,240,496 1,179,006 1,179,107 Noninterest-bearing deposits 248,122 256,132 246,092 Interest-bearing deposits 720,503 656,446 669,250 Total deposits 968,625 912,578 915,342 Customer funding sources (b) 1,104,701 1,025,403 1,053,771 Stockholders' equity 87,971 92,348 90,100 ------------------------------------------------------------------------ COLUMBIA BANCORP Quarterly Highlights (dollars in thousands, except per share data) 2Q04 1Q04 ------------------------- (unaudited) SUMMARY OF OPERATING RESULTS: GAAP-based: Interest income $13,408 $13,255 Interest expense 2,755 2,580 Net interest income 10,653 10,675 Provision for credit losses 190 310 Noninterest income 1,897 1,756 Noninterest expense 7,529 7,548 Income before taxes 4,831 4,573 Income tax provision 1,718 1,592 Net income 3,113 2,981 Based on core operating performance (a): Tax-equivalent interest income $13,681 $13,529 Interest expense 2,755 2,580 Tax-equivalent net interest income 10,926 10,949 Tax-equivalent adjustment 273 274 Net interest income 10,653 10,675 Provision for credit losses 190 310 Noninterest income 1,897 1,756 Noninterest expense 7,529 7,548 Income before taxes 4,831 4,573 Income tax provision 1,718 1,592 Net income 3,113 2,981 ------------------------------------------------------------------------ PER SHARE DATA: Net income : GAAP-based: Basic $0.43 $0.42 Diluted 0.42 0.40 Based on core operating performance (a): Basic 0.43 0.42 Diluted 0.42 0.40 Average number of shares outstanding: Basic 7,170,585 7,178,797 Diluted 7,404,762 7,434,701 Book value, at period end $12.33 $12.23 Tangible book value, at period end 12.33 12.23 Cash dividends declared 0.15 0.15 ------------------------------------------------------------------------ PERIOD END DATA: Loans, net of unearned income $900,320 $864,753 Investment securities held-to- maturity and securities available-for-sale 122,430 104,211 Assets 1,126,916 1,083,798 Noninterest-bearing deposits 240,117 220,700 Interest-bearing deposits 650,884 625,311 Total deposits 891,001 846,011 Customer funding sources (b) 1,001,524 963,051 Stockholders' equity 88,039 87,934 ------------------------------------------------------------------------ COLUMBIA BANCORP Quarterly Highlights (dollars in thousands, except per share data) 1Q05 4Q04 3Q04 ------------------------------- (unaudited) PERFORMANCE RATIOS: GAAP-based: Return on average assets 1.29% 1.25% 1.24% Return on average stockholders' equity 17.14% 15.99% 15.60% Net interest margin 4.43% 4.46% 4.31% Efficiency ratio 56.28% 59.54% 57.24% Based on core operating performance (a): Return on average assets 1.29% 1.25% 1.24% Return on average stockholders' equity 17.14% 15.99% 15.60% Net interest margin (FTE) 4.56% 4.57% 4.41% Efficiency ratio (FTE) 54.85% 58.19% 56.14% ------------------------------------------------------------------------ CAPITAL RATIOS: Period-end capital to risk- weighted assets: Tier 1 9.62% 9.74% 9.23% Total 10.73% 10.85% 10.35% Period-end tier 1 leverage ratio 8.62% 8.75% 8.51% ------------------------------------------------------------------------ ASSET QUALITY: Allowance for credit losses to loans, net of unearned income, at period-end 1.22% 1.22% 1.23% Net recoveries (charge-offs) $73 $33 $81 Annualized net recoveries (charge-offs) to average loans, net of unearned income 0.03% 0.01% 0.04% Nonperforming assets: Nonaccrual loans $588 $614 $635 Loans 90+ days past due and accruing 128 31 22 Other real estate owned - - - Total nonperforming ---- ---- ---- assets $716 $645 $657 Nonperforming and past due loans ---- ---- ---- to total loans, net of unearned income, at period- end 0.07% 0.07% 0.07% Nonperforming assets and past due loans to total assets, at period-end 0.06% 0.05% 0.06% ------------------------------------------------------------------------ NONINTEREST INCOME AND EXPENSE BREAKDOWN: Noninterest income: Fees charged for deposit services $773 $774 $910 Gains on sales of mortgage loans, net of costs 352 287 291 Net income (loss) on other real estate owned - - 73 Commissions earned on financial services sales 192 166 146 Other noninterest income 314 272 318 Total noninterest ------ ------ ------ income $1,631 $1,499 $1,738 ------ ------ ------ Noninterest expenses: Salaries and payroll taxes $3,940 $4,014 $3,718 Employee benefits - health and welfare 365 365 248 Employee benefits - retirement 22 486 148 Occupancy 998 1,021 1,009 Equipment 424 426 468 Data processing 452 394 525 Marketing 357 193 140 Professional fees 274 343 264 Postage 123 99 79 Stationery and supplies 111 157 121 Cash management services 108 137 131 Other noninterest expenses 861 732 842 Total noninterest ------ ------ ------ expenses $8,035 $8,367 $7,693 ------ ------ ------ COLUMBIA BANCORP Quarterly Highlights (dollars in thousands, except per share data) 2Q04 1Q04 ------------------------- (unaudited) PERFORMANCE RATIOS: GAAP-based: Return on average assets 1.16% 1.16% Return on average stockholders' equity 14.07% 13.75% Net interest margin 4.18% 4.34% Efficiency ratio 59.99% 60.72% Based on core operating performance (a): Return on average assets 1.16% 1.16% Return on average stockholders' equity 14.07% 13.75% Net interest margin (FTE) 4.29% 4.46% Efficiency ratio (FTE) 58.71% 59.41% ------------------------------------------------------------------------ CAPITAL RATIOS: Period-end capital to risk- weighted assets: Tier 1 9.45% 9.04% Total 10.58% 10.20% Period-end tier 1 leverage ratio 8.79% 8.34% ------------------------------------------------------------------------ ASSET QUALITY: Allowance for credit losses to loans, net of unearned income, at period-end 1.25% 1.28% Net recoveries (charge-offs) $10 $(97) Annualized net recoveries (charge-offs) to average loans, net of unearned income - % (0.05%) Nonperforming assets: Nonaccrual loans $1,095 $1,168 Loans 90+ days past due and accruing 91 69 Other real estate owned 250 250 Total nonperforming ------ ------ assets $1,436 $1,487 Nonperforming and past due loans ------ ------ to total loans, net of unearned income, at period- end 0.13% 0.14% Nonperforming assets and past due loans to total assets, at period-end 0.13% 0.14% ------------------------------------------------------------------------ NONINTEREST INCOME AND EXPENSE BREAKDOWN: Noninterest income: Fees charged for deposit services $1,029 $1,005 Gains on sales of mortgage loans, net of costs 508 351 Net income (loss) on other real estate owned (5) (9) Commissions earned on financial services sales 137 140 Other noninterest income 228 269 Total noninterest ----- ----- income $1,897 $1,756 ------ ------ Noninterest expenses: Salaries and payroll taxes $3,628 $3,684 Employee benefits - health and welfare 245 237 Employee benefits - retirement 33 125 Occupancy 944 976 Equipment 505 513 Data processing 532 518 Marketing 296 300 Professional fees 174 164 Postage 93 108 Stationery and supplies 98 115 Cash management services 158 122 Other noninterest expenses 823 686 ------ ------ Total noninterest expenses $7,529 $7,548 ------ ------ COLUMBIA BANCORP Quarterly Highlights (dollars in thousands, except per share data) 1Q05 4Q04 3Q04 ------------------------------- (unaudited) AVERAGE BALANCES: Federal funds sold and interest bearing deposits $14,109 $15,512 $20,056 Investment securities and securities available-for-sale 163,757 157,348 140,143 Loans, net of unearned income 973,208 940,368 914,052 Loans originated for sale 5,883 7,068 4,738 Total earning assets 1,156,957 1,120,296 1,078,989 Total assets 1,206,651 1,167,536 1,126,923 Interest-bearing deposits: NOW accounts 86,113 87,742 89,532 Savings and money market accounts 192,899 201,479 208,538 Time deposits 405,018 364,888 361,653 Noninterest-bearing deposits 242,659 245,886 228,429 Total deposits 926,689 899,995 888,152 Short-term borrowings 152,754 139,635 118,077 Long-term borrowings 30,860 26,231 26,186 Total interest-bearing liabilities 867,644 819,975 803,986 Stockholders' equity 90,592 91,367 89,730 ------------------------------------------------------------------------ YIELD ANALYSIS: Federal funds sold and interest bearing deposits 2.15% 1.59% 1.29% Investment securities and securities available-for-sale (FTE) 3.91% 3.92% 4.07% Loans, net of unearned income (FTE) 6.49% 6.20% 5.89% Total yield on earning assets (FTE) 6.07% 5.81% 5.57% Interest-bearing deposits NOW accounts 0.16% 0.16% 0.15% Savings and money market accounts 0.52% 0.47% 0.41% Time deposits 2.77% 2.48% 2.42% Short-term borrowings 2.26% 1.74% 1.17% Long-term borrowings 5.23% 5.22% 5.09% Total cost of interest-bearing liabilities 2.01% 1.70% 1.55% COLUMBIA BANCORP Quarterly Highlights (dollars in thousands, except per share data) 2Q04 1Q04 ------------------------- (unaudited) AVERAGE BALANCES: Federal funds sold and interest bearing deposits $37,521 $9,513 Investment securities and securities available-for-sale 103,384 122,192 Loans, net of unearned income 873,278 851,436 Loans originated for sale 8,320 5,196 Total earning assets 1,022,503 988,337 Total assets 1,071,793 1,033,102 Interest-bearing deposits: NOW accounts 89,308 85,917 Savings and money market accounts 194,197 194,141 Time deposits 348,394 314,116 Noninterest-bearing deposits 221,033 191,551 Total deposits 852,932 785,725 Short-term borrowings 105,985 128,547 Long-term borrowings 20,462 20,000 Total interest-bearing liabilities 758,346 742,721 Stockholders' equity 88,743 87,180 ------------------------------------------------------------------------ YIELD ANALYSIS: Federal funds sold and interest bearing deposits 0.96% 0.89% Investment securities and securities available-for-sale (FTE) 4.45% 4.30% Loans, net of unearned income (FTE) 5.68% 5.71% Total yield on earning assets (FTE) 5.38% 5.49% Interest-bearing deposits NOW accounts 0.15% 0.13% Savings and money market accounts 0.37% 0.36% Time deposits 2.39% 2.39% Short-term borrowings 0.77% 0.77% Long-term borrowings 5.35% 5.36% Total cost of interest-bearing liabilities 1.46% 1.40% ------------------------------------------------------------------------ (a) Core operating performance reflects GAAP-based performance presented on a fully tax-equivalent basis, exclusive of non-recurring items, where applicable. There were no non-recurring items in the periods presented. (b) Deposits plus customer-related short-term borrowings in the form of commercial paper and repurchase agreements. ------------------------------------------------------------------------ Certain reclassifications of information previously reported have been made to conform with current presentation. DATASOURCE: Columbia Bancorp CONTACT: John A. Scaldara, Jr., President and COO, +1-410-423-8012 or James P. Radick, CFO, +1-410-423-8020, both of Columbia Bancorp Web site: http://www.columbank.com/ Company News On-Call: http://www.prnewswire.com/comp/127921.html

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