CBMD Columbia Bancorp (MM)

Columbia Bancorp Reports an Increase in Year-to-Date Net Income of 25.9% COLUMBIA, Md., July 19 /PRNewswire-FirstCall/ -- Columbia Bancorp (NASDAQ:CBMD), parent company of The Columbia Bank (the "Bank"), today announced net income for the six months ended June 30, 2005 of $7.67 million compared to $6.09 million for the same period during 2004, an increase of 25.9%. Fully diluted earnings per share increased 29.3%, from $.82 for the first half of 2004 to $1.06 in 2005. Returns on average equity were 17.11% and 13.93% for the six months ended June 30, 2005 and 2004, respectively. Return on average assets was 1.26% for the six months ended June 30, 2005 compared to 1.16% for the same period in 2004. Net income for the second quarter 2005 totaled $3.84 million compared to $3.11 million for the second quarter 2004, a 23.4% increase. Fully diluted earnings per share for the quarter increased 28.6% to $.54 for 2005 compared to $.42 for 2004. Returns on average equity for the second quarter 2005 and 2004 were 17.08% and 14.07%, respectively. Returns on average assets for the second quarter 2005 and 2004 were 1.23% and 1.16%, respectively. SECOND QUARTER FINANCIAL HIGHLIGHTS -- Total assets ($1.28 billion), loans, net of unearned income ($1.03 billion) and customer funding sources ($1.14 billion) reached record levels at June 30, 2005 and represented growth since June 30, 2004 of 13.9%, 14.4% and 13.6%, respectively. During the first half of 2005, loans, net of unearned income, and customer funding sources grew at annualized rates of 16.9% and 22.0%, respectively. -- Net interest income (FTE) increased $2.92 million, or 26.7%, over the second quarter of 2004 and increased $4.98 million, or 22.8%, over the first six months of 2004. -- The net interest margin (FTE) improved to 4.64% during the second quarter of 2005 as compared to 4.29% during second quarter 2004 and 4.56% during the first quarter of 2005. -- The efficiency ratio (FTE) improved to 56.13% for the second quarter of 2005 compared to 58.71% for the same period of 2004. -- Non-performing assets decreased to .09% of total assets at June 30, 2005 compared to .13% at June 30, 2004. DETAILED REVIEW OF FINANCIAL PERFORMANCE Total assets at June 30, 2005 were $1.28 billion, representing growth of $157.20 million, or 13.9%, since June 30, 2004. Loans, net of unearned income, totaled $1,029.57 million compared to $900.32 million at June 30, 2004, representing growth of $129.25 million, or 14.4%. Growth in the loan portfolio since June 30, 2004 was primarily bolstered by continued strength in the Company's real estate development and construction activities and, to a lesser extent, in commercial lending and consumer lending activities. Specifically, the real estate development and construction portfolio increased $98.00 million (31.2%), the commercial portfolio, inclusive of commercial mortgage loans, increased $14.51 million (3.8%) and the consumer portfolio increased $13.96 million (7.6%). Customer funding sources, representing deposits plus other short-term borrowings from core customers, increased 13.6% to $1.14 billion at June 30, 2005. Shareholders' equity also rose to $91.33 million or 3.7% at June 30, 2005. Operating performance through June 30, 2005 was primarily driven by a net interest income (FTE) increase of 26.7% during the second quarter 2005 and 22.8% during the six months ended June 30, 2005 as compared to the corresponding periods of 2004, as a result of continued growth in earning assets, most specifically, the loan portfolio. The Company remained asset sensitive at June 30, 2005 and has benefited from the Federal Reserve's actions to increase short-term rates. As a result, the net interest margin (FTE) increased .35% during the second quarter 2005 as compared to the second quarter 2004 and .22% during the six months ended June 30, 2005 as compared to the same period in 2004. The potential ongoing benefit to the Company, from a rising interest rate environment, may be diminished depending upon the extent to which market forces influence increases in the cost of funding sources. This increase in net interest income more than offset a decline in non- interest income of $120,000, or 6.3% for the second quarter and $245,000 or 6.7% for the first half of 2005 as compared to the same period in 2004, primarily resulting from a decline in deposit service charges, including lower fees charged on overdraft deposit accounts and commercial account analysis charges. Mortgage-banking activities slowed somewhat resulting in a decline in corresponding revenues of $111,000 and $109,000 during the second quarter 2005 and six months ended June 30, 2005, respectively. Commission revenue on financial services sales served to partially offset the impact of the decline in deposit service charges and mortgage activity with increases of 33.6% for the second quarter and 35.4% for the first six months of 2005 compared to the same periods in 2004. Non-interest expense rose 16.4% and 11.4% for the second quarter and six months ended June 30, 2005, respectively, as compared to the corresponding periods in 2004. The increase for the quarter and, on a year-to-date basis, was primarily due to an increase in salary and benefit expense reflecting additional staffing costs and increased costs associated with the Company's Deferred Compensation Plan which are largely determined by appreciation in the Company's stock. Despite the overall increase in operating expenses, the efficiency ratio (FTE) improved to 55.51% for the six months ended June 30, 2005 compared to 59.06% for the same period in 2004. Asset quality remained very strong at June 30, 2005, with non-performing assets and past-due loans totaling $1.17 million. As of June 30, 2005, non- performing assets and past-due loans represented only .09% of total assets. The ratio of non-performing loans and past-due loans to total loans improved from .13% at June 30, 2004 to .11% at June 30, 2005. Net charge-offs totaled $20,000 during the second quarter of 2005. Net recoveries for the six months ended June 30, 2005 totaled $53,000 compared to net charge-offs of $87,000 for the six months ended June 30, 2004. At June 30, 2005, the allowance for credit losses totaled $12.45 million, or 1.21% of loans, compared to $11.24 million, or 1.25% of loans at June 30, 2004. 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 that 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, non-interest income, and non-interest 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 Six Months Ended June 30, ----------------------------- 2005 2004 % Change ----------------------------- SUMMARY OF OPERATING RESULTS: Tax equivalent interest income $36,270 $27,211 33.3% Interest expense 9,410 5,335 76.4% Tax equivalent net interest income 26,860 21,876 22.8% Tax equivalent adjustment 669 548 22.1% Net interest income 26,191 21,328 22.8% Provision for credit losses 810 500 62.0% Noninterest income 3,408 3,653 (6.7%) Noninterest expense 16,802 15,077 11.4% Income before taxes 11,987 9,404 27.5% Income tax provision 4,316 3,310 30.4% Net income 7,671 6,094 25.9% PER SHARE DATA: Net income: Basic $1.10 $0.85 29.4% Diluted 1.06 0.82 29.3% Average number of shares outstanding: Basic 6,952,835 7,175,939 (3.1%) Diluted 7,207,830 7,421,715 (2.9%) Book value, at period end $13.17 $12.33 6.8% Tangible book value, at period end 13.17 12.33 6.8% Cash dividends declared $0.34 $0.30 13.3% PERIOD END DATA: Loans, net of unearned income $1,029,568 $900,320 14.4% Investment securities held-to- maturity and securities available-for-sale 173,212 122,430 41.5% Assets 1,284,115 1,126,916 13.9% Noninterest-bearing deposits 263,834 240,117 9.9% Interest-bearing deposits 712,657 650,884 9.5% Total deposits 976,491 891,001 9.6% Customer funding sources (a) 1,137,342 1,001,524 13.6% Stockholders' equity 91,331 88,039 3.7% PERFORMANCE RATIOS: Return on average assets 1.26% 1.16% Return on average stockholders' equity 17.11% 13.93% Net interest margin 4.49% 4.27% Net interest margin (FTE) 4.60% 4.38% Efficiency ratio (FTE)(b) 55.51% 59.06% CAPITAL RATIOS: Period-end capital to risk-weighted assets: Tier 1 9.67% 9.45% Total 10.81% 10.58% Period-end tier 1 leverage ratio 8.57% 8.79% ASSET QUALITY: Allowance for credit losses to loans, net of unearned income, at period-end 1.21% 1.25% Net recoveries (charge-offs) $53 $(87) (160.9%) Annualized net recoveries (charge-offs) to average loans, net of unearned income 0.01% (0.02%) Nonperforming assets: Nonaccrual loans $1,043 $1,095 (4.7%) Loans 90+ days past due and accruing 128 91 40.7% Other real estate owned - 250 na ------ ------ Total nonperforming assets $1,171 $1,436 (18.5%) ------ ------ Nonperforming and past due loans to total loans, net of unearned income, at period-end 0.11% 0.13% Nonperforming assets and past due loans to total assets, at period-end 0.09% 0.13% NONINTEREST INCOME AND EXPENSE BREAKDOWN: Noninterest income: Fees charged for services $1,618 $2,055 (21.3%) Gains on sales of mortgage loans, net of costs 749 858 (12.7%) Net loss on other real estate owned - (14) (100.0%) Commissions earned on financial services sales 375 277 35.4% Other noninterest income 666 477 39.6% ------------------ $3,408 $3,653 (6.7%) ------------------ Noninterest expenses: Salaries and employee benefits $9,351 $7,921 18.1% Occupancy 1,936 1,860 4.1% Equipment 891 1,018 (12.5%) Data processing 889 1,050 (15.3%) Marketing 738 596 23.8% Professional fees 448 338 32.5% Postage 219 201 9.0% Stationery and supplies 221 213 3.8% Cash management services 231 280 (17.5%) Other noninterest expenses 1,878 1,600 17.4% ------------------- $16,802 $15,077 11.4% ------------------- AVERAGE BALANCES: Federal funds sold and interest-bearing deposits (c) $14,203 $23,517 (39.6%) Investment securities held-to- maturity and securities available-for-sale 168,320 112,788 49.2% Loans, net of unearned income 987,645 862,357 14.5% Loans originated for sale (c) 6,982 6,758 3.3% Total earning assets 1,177,150 1,005,420 17.1% Total assets 1,227,902 1,052,448 16.7% Interest-bearing deposits: NOW accounts 86,691 87,612 (1.1%) Savings and money market accounts 188,726 194,169 (2.8%) Time deposits 423,242 331,255 27.8% Noninterest-bearing deposits 244,367 206,292 18.5% Total deposits 943,026 819,328 15.1% Short-term borrowings (c) 154,131 117,267 31.4% Long-term borrowings 33,694 20,231 66.5% Total interest-bearing liabilities 886,484 750,534 18.1% Stockholders' equity 90,402 87,960 2.8% YIELD ANALYSIS: Federal funds sold and interest-bearing deposits 2.43% 0.95% Investment securities held-to-maturity and securities available-for-sale (FTE) 3.87% 4.38% Loans, net of unearned income (FTE) 6.66% 5.70% Total yield on earning assets (FTE) 6.21% 5.44% Interest-bearing deposits NOW accounts 0.16% 0.14% Savings and money market accounts 0.59% 0.37% Time deposits 2.87% 2.38% Short-term borrowings 2.46% 0.77% Long-term borrowings 5.28% 5.34% Total cost of interest-bearing liabilities 2.14% 1.43% As of and Three Months Ended June 30, ------------------------------- 2005 2004 % Change ------------------------------- SUMMARY OF OPERATING RESULTS: Tax equivalent interest income $18,953 $13,681 38.5% Interest expense 5,111 2,755 85.5% Tax equivalent net interest income 13,842 10,926 26.7% Tax equivalent adjustment 296 273 8.4% Net interest income 13,546 10,653 27.2% Provision for credit losses 560 190 194.7% Noninterest income 1,777 1,897 (6.3%) Noninterest expense 8,767 7,529 16.4% Income before taxes 5,996 4,831 24.1% Income tax provision 2,154 1,718 25.4% Net income 3,842 3,113 23.4% PER SHARE DATA: Net income: Basic $0.56 $0.43 30.2% Diluted 0.54 0.42 28.6% Average number of shares outstanding: Basic 6,921,811 7,170,585 (3.5%) Diluted 7,173,060 7,404,762 (3.1%) Book value, at period end Tangible book value, at period end Cash dividends declared $0.17 $0.15 13.3% PERIOD END DATA: Loans, net of unearned income Investment securities held-to- maturity and securities available-for-sale Assets Noninterest-bearing deposits Interest-bearing deposits Total deposits Customer funding sources (a) Stockholders' equity PERFORMANCE RATIOS: Return on average assets 1.23% 1.16% Return on average stockholders' equity 17.08% 14.07% Net interest margin 4.54% 4.18% Net interest margin (FTE) 4.64% 4.29% Efficiency ratio (FTE)(b) 56.13% 58.71% CAPITAL RATIOS: Period-end capital to risk-weighted assets: Tier 1 Total Period-end tier 1 leverage ratio ASSET QUALITY: Allowance for credit losses to loans, net of unearned income, at period-end Net recoveries (charge-offs) $(20) $10 (300.0%) Annualized net recoveries (charge-offs) to average loans, net of unearned income (0.01%) 0.00% Nonperforming assets: Nonaccrual loans Loans 90+ days past due and accruing Other real estate owned Total nonperforming assets Nonperforming and past due loans to total loans, net of unearned income, at period-end Nonperforming assets and past due loans to total assets, at period-end NONINTEREST INCOME AND EXPENSE BREAKDOWN: Noninterest income: Fees charged for services $824 $1,041 (20.8%) Gains on sales of mortgage loans, net of costs 397 508 (21.9%) Net loss on other real estate owned - (5) (100.0%) Commissions earned on financial services sales 183 137 33.6% Other noninterest income 373 216 72.7% ------------------- $1,777 $1,897 (6.3%) ------------------- Noninterest expenses: Salaries and employee benefits $5,024 $3,888 29.2% Occupancy 938 913 2.7% Equipment 467 505 (7.5%) Data processing 437 532 (17.9%) Marketing 381 296 28.7% Professional fees 174 174 0.0% Postage 96 93 3.2% Stationery and supplies 110 98 12.2% Cash management services 123 158 (22.2%) Other noninterest expenses 1,017 872 16.6% ------------------- $8,767 $7,529 16.4% ------------------- AVERAGE BALANCES: Federal funds sold and interest-bearing deposits (c) $14,296 $37,521 (61.9%) Investment securities held-to- maturity and securities available-for-sale 172,833 103,384 67.2% Loans, net of unearned income 1,001,922 873,278 14.7% Loans originated for sale (c) 8,070 8,320 (3.0%) Total earning assets 1,197,121 1,022,503 17.1% Total assets 1,248,918 1,071,793 16.5% Interest-bearing deposits: NOW accounts 87,262 89,308 (2.3%) Savings and money market accounts 184,600 194,197 (4.9%) Time deposits 441,267 348,394 26.7% Noninterest-bearing deposits 246,056 221,033 11.3% Total deposits 959,185 852,932 12.5% Short-term borrowings (c) 155,492 105,985 46.7% Long-term borrowings 36,496 20,462 78.4% Total interest-bearing liabilities 905,117 758,346 19.4% Stockholders' equity 90,215 88,743 1.7% YIELD ANALYSIS: Federal funds sold and interest-bearing deposits 2.69% 0.96% Investment securities held-to- maturity and securities available-for-sale (FTE) 3.84% 4.45% Loans, net of unearned income (FTE) 6.83% 5.68% Total yield on earning assets (FTE) 6.35% 5.38% Interest-bearing deposits NOW accounts 0.16% 0.15% Savings and money market accounts 0.65% 0.37% Time deposits 2.96% 2.39% Short-term borrowings 2.66% 0.77% Long-term borrowings 5.32% 5.35% Total cost of interest-bearing liabilities 2.26% 1.46% (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) June 30, June 30, December 31, 2005 2004 2004 ------------------------------------ (unaudited) (audited) Assets Cash and due from banks $39,474 $38,014 $30,012 Interest-bearing deposits with banks 203 207 208 Federal funds sold 15,096 43,547 9,904 Investment securities held-to-maturity 110,156 69,803 116,170 Securities available-for-sale 63,056 52,627 47,980 Residential mortgage loans originated for sale 10,219 7,307 8,698 Loan receivables: Real estate - development and construction 412,478 314,480 345,375 Commercial 252,881 213,353 226,763 Real estate - mortgage: Residential 19,003 17,197 17,272 Commercial 147,212 172,233 163,985 Consumer, principally second mortgage loans and residential equity lines of credit 196,521 182,560 196,198 Other 1,660 707 668 ------------------------------------ Total loans 1,029,755 900,530 950,261 Less: Unearned income, net of origination costs (187) (210) (91) Allowance for credit losses (12,446) (11,241) (11,583) ------------------------------------ Loans, net 1,017,122 889,079 938,587 Other real estate owned - 250 - Property and equipment, net 6,594 6,948 6,647 Prepaid expenses and other assets 22,195 19,134 20,800 ------------------------------------ Total assets $1,284,115 $1,126,916 $1,179,006 ==================================== Liabilities Deposits: Noninterest-bearing demand deposits $263,834 $240,117 $256,132 Interest-bearing deposits 712,657 650,884 656,446 ------------------------------------ Total deposits 976,491 891,001 912,578 Short-term borrowings 171,798 115,523 135,825 Subordinated debentures 16,496 6,186 10,310 Long-term borrowings 20,000 20,000 20,000 Accrued expenses and other liabilities 7,999 6,167 7,945 ------------------------------------ Total liabilities 1,192,784 1,038,877 1,086,658 ------------------------------------ Stockholders' equity Common stock, $.01 par value per share; authorized 10,000,000 shares; outstanding 6,932,502, 7,137,692 and 7,114,267 shares, respectively 69 71 71 Additional paid-in capital 39,275 46,626 45,739 Retained earnings 51,738 41,506 46,419 Accumulated other comprehensive income (loss) 249 (164) 119 ------------------------------------ Total stockholders' equity 91,331 88,039 92,348 ------------------------------------ Total liabilities and stockholders' equity $1,284,115 $1,126,916 $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) Six Months Ended Three Months Ended June 30, June 30, ------------------------------------ 2005 2004 2005 2004 ------------------------------------ (unaudited) (unaudited) Interest income: Loans $32,377 $24,289 $16,998 $12,267 Investment securities 3,053 2,263 1,563 1,051 Federal funds sold and interest- bearing deposits with banks 171 111 96 90 ------------------------------------ Total interest income 35,601 26,663 18,657 13,408 ------------------------------------ Interest expense: Deposits 6,646 4,346 3,597 2,278 Borrowings 2,764 989 1,514 477 ------------------------------------ Total interest expense 9,410 5,335 5,111 2,755 ------------------------------------ Net interest income 26,191 21,328 13,546 10,653 Provision for credit losses 810 500 560 190 ------------------------------------ Net interest income after provision for credit losses 25,381 20,828 12,986 10,463 ------------------------------------ Noninterest income: Fees charged for services 1,618 2,055 824 1,041 Gains on sales of mortgage loans, net of costs 749 858 397 508 Net loss on other real estate owned - (14) - (5) Commissions earned on financial services sales 375 277 183 137 Other 666 477 373 216 ------------------------------------ Total noninterest income 3,408 3,653 1,777 1,897 ------------------------------------ Noninterest expense: Salaries and employee benefits 9,351 7,921 5,024 3,888 Occupancy 1,936 1,860 938 913 Equipment 891 1,018 467 505 Data processing 889 1,050 437 532 Marketing 738 596 381 296 Professional fees 448 338 174 174 Postage 219 201 96 93 Stationery and supplies 221 213 110 98 Cash management services 231 280 123 158 Other 1,878 1,600 1,017 872 ------------------------------------ Total noninterest expense 16,802 15,077 8,767 7,529 ------------------------------------ Income before income taxes 11,987 9,404 5,996 4,831 Income tax provision 4,316 3,310 2,154 1,718 ------------------------------------ Net income $7,671 $6,094 $3,842 $3,113 ==================================== Per common share data: Net income: Basic $1.10 $0.85 $0.56 $0.43 Diluted 1.06 0.82 0.54 0.42 Cash dividends declared $0.34 $0.30 $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) Six Months Ended Three Months Ended June 30, June 30, ------------------------------------ 2005 2004 2005 2004 ------------------------------------ (unaudited) (unaudited) GAAP-based Operating Performance Measures: Net interest income $26,191 $21,328 $13,546 $10,653 Provision for credit losses 810 500 560 190 Noninterest income 3,408 3,653 1,777 1,897 Noninterest expense 16,802 15,077 8,767 7,529 Income before taxes 11,987 9,404 5,996 4,831 Income tax provision 4,316 3,310 2,154 1,718 Net income 7,671 6,094 3,842 3,113 Return on average assets 1.26% 1.16% 1.23% 1.16% Return on average equity 17.11% 13.93% 17.08% 14.07% Net interest margin 4.49% 4.27% 4.54% 4.18% Efficiency ratio 56.77% 60.35% 57.21% 59.99% Net income per share - diluted $1.06 $0.82 $0.54 $0.42 -------------------------------------------------------------------------- Non-GAAP adjustments Interest income on tax-exempt loans $490 $356 $207 $178 Interest income on tax-exempt securities 179 192 89 95 ------------------------------------ Total tax equivalent adjustment - net interest income $669 $548 $296 $273 ==================================== -------------------------------------------------------------------------- Core Operating Performance Measures: (a)(b) Net interest income - tax equivalent $26,860 $21,876 $13,842 $10,926 Tax equivalent adjustment (669) (548) (296) (273) ------------------------------------ Net interest income 26,191 21,328 13,546 10,653 Provision for credit losses 810 500 560 190 Noninterest income 3,408 3,653 1,777 1,897 Noninterest expense 16,802 15,077 8,767 7,529 Income before taxes 11,987 9,404 5,996 4,831 Income tax provision 4,316 3,310 2,154 1,718 Net income 7,671 6,094 3,842 3,113 Return on average assets 1.26% 1.16% 1.23% 1.16% Return on average equity 17.11% 13.93% 17.08% 14.07% Net interest margin (FTE) 4.60% 4.38% 4.64% 4.29% Efficiency ratio (FTE) 55.51% 59.06% 56.13% 58.71% Net income per share - diluted $1.06 $0.82 $0.54 $0.42 -------------------------------------------------------------------------- (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) 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. -------------------------------------------------------------------------- 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) 2Q05 1Q05 -------------------------- (unaudited) SUMMARY OF OPERATING RESULTS: GAAP-based: Interest income 18,657 $16,944 Interest expense 5,111 4,299 Net interest income 13,546 12,645 Provision for credit losses 560 250 Noninterest income 1,777 1,631 Noninterest expense 8,767 8,035 Income before taxes 5,996 5,991 Income tax provision 2,154 2,162 Net income 3,842 3,829 Based on core operating performance (a): Tax-equivalent interest income 18,953 $17,317 Interest expense 5,111 4,299 Tax-equivalent net interest income 13,842 13,018 Tax-equivalent adjustment 296 373 Net interest income 13,546 12,645 Provision for credit losses 560 250 Noninterest income 1,777 1,631 Noninterest expense 8,767 8,035 Income before taxes 5,996 5,991 Income tax provision 2,154 2,162 Net income 3,842 3,829 -------------------------------------------------------------------------- PER SHARE DATA: Net income : GAAP-based: Basic $0.56 $0.55 Diluted 0.54 0.53 Based on core operating performance (a): Basic $0.56 $0.55 Diluted 0.54 0.53 Average number of shares outstanding: Basic 6,921,811 6,984,185 Diluted 7,173,060 7,242,967 Book value, at period end $13.17 $12.74 Tangible book value, at period end 13.17 12.74 Cash dividends declared 0.17 0.17 -------------------------------------------------------------------------- PERIOD END DATA: Loans, net of unearned income $1,029,568 $978,941 Investment securities held-to- maturity and securities available-for-sale 173,212 170,595 Assets 1,284,115 1,240,496 Noninterest-bearing deposits 263,834 248,122 Interest-bearing deposits 712,657 720,503 Total deposits 976,491 968,625 Customer funding sources (b) 1,137,342 1,104,701 Stockholders' equity 91,331 87,971 -------------------------------------------------------------------------- PERFORMANCE RATIOS: GAAP-based: Return on average assets 1.23% 1.29% Return on average stockholders' equity 17.08% 17.14% Net interest margin 4.54% 4.43% Efficiency ratio 57.21% 56.28% Based on core operating performance (a): Return on average assets 1.23% 1.29% Return on average stockholders' equity 17.08% 17.14% Net interest margin (FTE) 4.64% 4.56% Efficiency ratio (FTE) 56.13% 54.85% -------------------------------------------------------------------------- CAPITAL RATIOS: Period-end capital to risk-weighted assets: Tier 1 9.67% 9.62% Total 10.81% 10.73% Period-end tier 1 leverage ratio 8.57% 8.62% -------------------------------------------------------------------------- ASSET QUALITY: Allowance for credit losses to loans, net of unearned income, at period-end 1.21% 1.22% Net recoveries (charge-offs) $(20) $73 Annualized net recoveries (charge-offs) to average loans, net of unearned income (0.01%) 0.03% Nonperforming assets: Nonaccrual loans $1,043 $588 Loans 90+ days past due and accruing 128 128 Other real estate owned - - ------ ------ Total nonperforming assets $1,171 $716 ------ ------ Nonperforming and past due loans to total loans, net of unearned income, at period-end 0.11% 0.07% Nonperforming assets and past due loans to total assets, at period-end 0.09% 0.06% -------------------------------------------------------------------------- NONINTEREST INCOME AND EXPENSE BREAKDOWN: Noninterest income: Fees charged for deposit services $824 $794 Gains on sales of mortgage loans, net of costs 397 352 Commissions earned on financial services sales 183 192 Other noninterest income 373 293 ------ ------ Total noninterest income $1,777 $1,631 ------ ------ Noninterest expenses: Salaries and payroll taxes $4,146 $3,940 Employee benefits - health and welfare 371 365 Employee benefits - retirement 507 22 Occupancy 938 998 Equipment 467 424 Data processing 437 452 Marketing 381 357 Professional fees 174 274 Postage 96 123 Stationery and supplies 110 111 Cash management services 123 108 Other noninterest expenses 1,017 861 ------ ------ Total noninterest expenses $8,767 $8,035 ------ ------ -------------------------------------------------------------------------- AVERAGE BALANCES: Federal funds sold and interest bearing deposits $14,296 $14,109 Investment securities and securities available-for-sale 172,833 163,757 Loans, net of unearned income 1,001,922 973,208 Loans originated for sale 8,070 5,883 Total earning assets 1,197,121 1,156,957 Total assets 1,248,918 1,206,651 Interest-bearing deposits: NOW accounts 87,262 86,113 Savings and money market accounts 184,600 192,899 Time deposits 441,267 405,018 Noninterest-bearing deposits 246,056 242,659 Total deposits 959,185 926,689 Short-term borrowings 155,492 152,754 Long-term borrowings 36,496 30,860 Total interest-bearing liabilities 905,117 867,644 Stockholders' equity 90,215 90,592 -------------------------------------------------------------------------- YIELD ANALYSIS: Federal funds sold and interest bearing deposits 2.69% 2.15% Investment securities and securities available-for-sale (FTE) 3.84% 3.91% Loans, net of unearned income (FTE) 6.83% 6.49% Total yield on earning assets (FTE) 6.35% 6.07% Interest-bearing deposits NOW accounts 0.16% 0.16% Savings and money market accounts 0.65% 0.52% Time deposits 2.96% 2.77% Short-term borrowings 2.66% 2.26% Long-term borrowings 5.32% 5.23% Total cost of interest-bearing liabilities 2.26% 2.01% -------------------------------------------------------------------------- (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. COLUMBIA BANCORP Quarterly Highlights (dollars in thousands, except per share data) 4Q04 3Q04 2Q04 1Q04 ------------------------------------------- (unaudited) SUMMARY OF OPERATING RESULTS: GAAP-based: Interest income $16,050 $14,833 $13,408 $13,255 Interest expense 3,497 3,131 2,755 2,580 Net interest income 12,553 11,702 10,653 10,675 Provision for credit losses 36 192 190 310 Noninterest income 1,499 1,738 1,897 1,756 Noninterest expense 8,367 7,693 7,529 7,548 Income before taxes 5,649 5,555 4,831 4,573 Income tax provision 1,976 2,037 1,718 1,592 Net income 3,673 3,518 3,113 2,981 Based on core operating performance (a): Tax-equivalent interest income $16,376 $15,097 $13,681 $13,529 Interest expense 3,497 3,131 2,755 2,580 Tax-equivalent net interest income 12,879 11,966 10,926 10,949 Tax-equivalent adjustment 326 264 273 274 Net interest income 12,553 11,702 10,653 10,675 Provision for credit losses 36 192 190 310 Noninterest income 1,499 1,738 1,897 1,756 Noninterest expense 8,367 7,693 7,529 7,548 Income before taxes 5,649 5,555 4,831 4,573 Income tax provision 1,976 2,037 1,718 1,592 Net income 3,673 3,518 3,113 2,981 -------------------------------------------------------------------------- PER SHARE DATA: Net income: GAAP-based: Basic $0.52 $0.49 $0.43 $0.42 Diluted 0.50 0.48 0.42 0.40 Based on core operating performance (a): Basic $0.52 $0.49 0.43 0.42 Diluted 0.50 0.48 0.42 0.40 Average number of shares outstanding: Basic 7,113,768 7,128,359 7,170,585 7,178,797 Diluted 7,371,541 7,350,901 7,404,762 7,434,701 Book value, at period end $12.98 $12.66 $12.33 $12.23 Tangible book value, at period end 12.98 12.66 12.33 12.23 Cash dividends declared 0.17 0.15 0.15 0.15 -------------------------------------------------------------------------- PERIOD END DATA: Loans, net of unearned income $950,170 $936,000 $900,320 $864,753 Investment securities held-to-maturity and securities available- for-sale 164,150 150,604 122,430 104,211 Assets 1,179,006 1,179,107 1,126,916 1,083,798 Noninterest-bearing deposits 256,132 246,092 240,117 220,700 Interest-bearing deposits 656,446 669,250 650,884 625,311 Total deposits 912,578 915,342 891,001 846,011 Customer funding sources (b) 1,025,403 1,053,771 1,001,524 963,051 Stockholders' equity 92,348 90,100 88,039 87,934 -------------------------------------------------------------------------- PERFORMANCE RATIOS: GAAP-based: Return on average assets 1.25% 1.24% 1.16% 1.16% Return on average stockholders' equity 15.99% 15.60% 14.07% 13.75% Net interest margin 4.46% 4.31% 4.18% 4.34% Efficiency ratio 59.54% 57.24% 59.99% 60.72% Based on core operating performance (a): Return on average assets 1.25% 1.24% 1.16% 1.16% Return on average stockholders' equity 15.99% 15.60% 14.07% 13.75% Net interest margin (FTE) 4.57% 4.41% 4.29% 4.46% Efficiency ratio (FTE) 58.19% 56.14% 58.71% 59.41% -------------------------------------------------------------------------- CAPITAL RATIOS: Period-end capital to risk-weighted assets: Tier 1 9.74% 9.23% 9.45% 9.04% Total 10.85% 10.35% 10.58% 10.20% Period-end tier 1 leverage ratio 8.75% 8.51% 8.79% 8.34% -------------------------------------------------------------------------- ASSET QUALITY: Allowance for credit losses to loans, net of unearned income, at period-end 1.22% 1.23% 1.25% 1.28% Net recoveries (charge-offs) $33 $81 $10 $(97) Annualized net recoveries (charge-offs) to average loans, net of unearned income 0.01% 0.04% 0.00% (0.05%) Nonperforming assets: Nonaccrual loans $614 $635 $1,095 $1,168 Loans 90+ days past due and accruing 31 22 91 69 Other real estate owned - - 250 250 ------ ------ ------ ------ Total nonperforming assets $645 $657 $1,436 $1,487 ------ ------ ------ ------ Nonperforming and past due loans to total loans, net of unearned income, at period-end 0.07% 0.07% 0.13% 0.14% Nonperforming assets and past due loans to total assets, at period-end 0.05% 0.06% 0.13% 0.14% -------------------------------------------------------------------------- NONINTEREST INCOME AND EXPENSE BREAKDOWN: Noninterest income: Fees charged for deposit services $786 $920 $1,041 $1,014 Gains on sales of mortgage loans, net of costs 287 291 508 351 Net income (loss) on other real estate owned - 73 (5) (9) Commissions earned on financial services sales 166 146 137 140 Other noninterest income 260 308 216 260 ------ ------ ------ ------ Total noninterest income $1,499 $1,738 $1,897 $1,756 ------ ------ ------ ------ Noninterest expenses: Salaries and payroll taxes $4,014 $3,738 $3,610 $3,671 Employee benefits - health and welfare 365 258 245 237 Employee benefits - retirement 486 148 33 125 Occupancy 991 978 913 947 Equipment 426 468 505 513 Data processing 394 525 532 518 Marketing 193 140 296 300 Professional fees 343 264 174 164 Postage 99 79 93 108 Stationery and supplies 157 121 98 115 Cash management services 137 131 158 122 Other noninterest expenses 762 843 872 728 ------ ------ ------ ------ Total noninterest expenses $8,367 $7,693 $7,529 $7,548 ------ ------ ------ ------ -------------------------------------------------------------------------- AVERAGE BALANCES: Federal funds sold and interest-bearing deposits $15,512 $20,056 $37,521 $9,513 Investment securities and securities available-for-sale 157,348 140,143 103,384 122,192 Loans, net of unearned income 940,368 914,052 873,278 851,436 Loans originated for sale 7,068 4,738 8,320 5,196 Total earning assets 1,120,296 1,078,989 1,022,503 988,337 Total assets 1,167,536 1,126,923 1,071,793 1,033,102 Interest-bearing deposits: NOW accounts 87,742 89,532 89,308 85,917 Savings and money market accounts 201,479 208,538 194,197 194,141 Time deposits 364,888 361,653 348,394 314,116 Noninterest-bearing deposits 245,886 228,429 221,033 191,551 Total deposits 899,995 888,152 852,932 785,725 Short-term borrowings 139,635 118,077 105,985 128,547 Long-term borrowings 26,231 26,186 20,462 20,000 Total interest-bearing liabilities 819,975 803,986 758,346 742,721 Stockholders' equity 91,367 89,730 88,743 87,180 -------------------------------------------------------------------------- YIELD ANALYSIS: Federal funds sold and interest-bearing deposits 1.59% 1.29% 0.96% 0.89% Investment securities and securities available-for-sale (FTE) 3.92% 4.07% 4.45% 4.30% Loans, net of unearned income (FTE) 6.20% 5.89% 5.68% 5.71% Total yield on earning assets (FTE) 5.81% 5.57% 5.38% 5.49% Interest-bearing deposits NOW accounts 0.16% 0.15% 0.15% 0.13% Savings and money market accounts 0.47% 0.41% 0.37% 0.36% Time deposits 2.48% 2.42% 2.39% 2.39% Short-term borrowings 1.74% 1.17% 0.77% 0.77% Long-term borrowings 5.22% 5.09% 5.35% 5.36% Total cost of interest- bearing liabilities 1.70% 1.55% 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

Copyright