CBMD Columbia Bancorp (MM)

Columbia Bancorp Reports an Increase in First Quarter Earnings of 20% COLUMBIA, Md., April 15 /PRNewswire-FirstCall/ -- Columbia Bancorp , parent company of The Columbia Bank (collectively, the "Company"), today announced net income for the first quarter 2004 of $2.98 million ($.40 per diluted share) compared to $2.49 million ($.34 per diluted share) for the first quarter 2003, a 19.7% increase. Return on average equity increased from 12.92% during the first quarter 2003 to 13.75% during the first quarter 2004. FIRST QUARTER FINANCIAL HIGHLIGHTS * Loans increased $168.43 million, or 24.2%, since March 31, 2003. Since December 31, 2003, loans grew $29.27 million, representing an annualized rate of growth of 14.0%. * Customer funding sources (deposits and other short-term borrowings from core customers) increased $85.10 million, or 9.7%, since the end of the first quarter 2003. Since December 31, 2003, customer funding sources increased $75.12 million, representing an annualized rate of growth of 33.8%. * Net interest income increased 12.8% during the first quarter 2004 compared to the same period in 2003. * Asset quality remained strong at March 31, 2004, with non-performing assets totaling only .14% of total assets. DETAILED REVIEW OF FINANCIAL PERFORMANCE Total assets were $1.08 billion at March 31, 2004, representing growth of $90.23 million, or 9.1%, since March 31, 2003. Loans, net of unearned income, totaled $864.75 million compared to $696.32 million at March 31, 2003, representing growth of $168.43 million or 24.2%. Growth during the twelve months since March 31, 2003 was reflective of the Company's well-balanced and diversified loan portfolio. Specifically, the Company's real estate development and construction, commercial, and retail loan portfolios, grew 34.2%, 27.4% and 22.3%, respectively. Customer funding sources increased 9.7% to $963.05 million at March 31, 2004. Noninterest bearing deposits increased 21.0% to $220.70 million. Shareholders' equity climbed 12.1% to $87.93 million at March 31, 2004. Operating performance during the first quarter 2004 was driven primarily by the Company's continued focus on core banking initiatives. Specifically, net interest income increased $1.21 million, or 12.8%, during the first quarter 2004 compared to 2003. An increase in average earning assets of $105.45 million, or 11.9%, during the first quarter 2004 compared to the first quarter 2003, offset by a modest decline in the net interest margin from 4.35% to 4.34% for the same periods, contributed to the growth in net interest income. In addition, fees charged for banking services increased $67,000, or 7.1%, during 2004 as compared to 2003. As anticipated, increased mortgage interest rates resulted in a decline in mortgage origination activity and, consequently, a decline in revenue on mortgage loan sales of $280,000, or 44.4%, compared to the first quarter 2003. As a result, total noninterest income declined from $1.93 million during the first quarter 2003 to $1.74 million in 2004. Despite the pressure on noninterest income from lower mortgage production, the Company successfully continued to leverage overhead during the first quarter 2004 compared to 2003, as net operating income (net interest income plus noninterest income) grew 8.9%, while overhead grew only 4.6%. For the first quarter, the Company's efficiency ratio (FTE) was 59.35% as compared to 62.52% for the same period in 2003. Asset quality remained very strong at March 31, 2004, with non-performing assets totaling only $1.49 million, representing .14% of total assets. Net charge-offs for the first quarter 2004 totaled $97,000, or .05% of average loans. At March 31, 2004, the allowance for credit losses totaled $11.04 million, or 1.28% of loans, compared to $9.10 million, or 1.31% of loans, at March 31, 2003. 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, 2004 2003 % Change SUMMARY OF OPERATING RESULTS: Tax equivalent interest income $13,529 $12,493 8.3% Interest expense 2,580 2,912 (11.4%) Tax equivalent net interest income 10,949 9,581 14.3% Tax equivalent adjustment 274 120 128.3% Net interest income 10,675 9,461 12.8% Provision for credit losses 310 305 1.6% Noninterest income 1,737 1,934 (10.2%) Noninterest expense 7,529 7,199 4.6% Income before taxes 4,573 3,891 17.5% Income tax provision 1,592 1,400 13.7% Net income 2,981 2,491 19.7% PER SHARE DATA: Net income : Basic $0.42 $0.35 20.0% Diluted 0.40 0.34 17.6% Average number of shares outstanding: Basic 7,178,797 7,115,612 0.9% Diluted 7,434,701 7,290,541 2.0% Book value, at period end $12.23 $11.02 11.0% Tangible book value, at period end 12.23 11.02 11.0% Cash dividends declared 0.150 0.125 20.0% PERIOD END DATA: Loans, net of unearned income $864,753 $696,322 24.2% Investment securities and securities available-for-sale 104,211 145,714 (28.5%) Assets 1,083,798 993,570 9.1% Noninterest-bearing deposits 220,700 182,421 21.0% Interest-bearing deposits 625,311 565,106 10.7% Total deposits 846,011 747,527 13.2% Customer funding sources (a) 963,051 877,955 9.7% Stockholders' equity 87,934 78,422 12.1% PERFORMANCE RATIOS: Return on average assets 1.16% 1.09% Return on average stockholders' equity 13.75% 12.92% Net interest margin 4.34% 4.35% Net interest margin (FTE) 4.46% 4.40% Efficiency ratio (FTE)(c) 59.35% 62.52% CAPITAL RATIOS: Period-end capital to risk- weighted assets: Tier 1 9.04% 9.62% Total 10.20% 10.73% Period-end tier 1 leverage ratio 8.34% 8.49% ASSET QUALITY: Allowance for credit losses to loans, net of unearned income, at period-end 1.28% 1.31% Net recoveries (charge-offs) $(97) $(45) 115.6% Annualized net recoveries (charge-offs) to average loans, net of unearned income (0.05%) (0.03%) Nonperforming assets: Nonaccrual loans $1,168 $806 44.9% Loans 90+ days past due and accruing 69 164 (57.9%) Other real estate owned 250 - na Total nonperforming assets $1,487 $970 53.3% Nonperforming and past due loans to total loans, net of unearned income, at period-end 0.14% 0.14% Nonperforming assets and past due loans to total assets, at period- end 0.14% 0.10% COLUMBIA BANCORP Financial Highlights (Dollars in Thousands, Except Per-Share Data) (Unaudited) As of and Three Months Ended March 31, 2004 2003 % Change NONINTEREST INCOME AND EXPENSE BREAKDOWN: Noninterest income: Fees charged for services $1,005 $938 7.1% Gains and fees on sales of mortgage loans, net of costs 351 631 (44.4%) Net income (loss) on other real estate owned (9) 11 (181.8%) Commissions earned on financial services sales 140 123 13.8% Other noninterest income 250 231 8.2% 1,737 1,934 (10.2%) Noninterest expenses: Salaries and employee benefits 4,046 3,970 1.9% Occupancy, net 976 924 5.6% Equipment 513 449 14.3% Data processing 518 410 26.3% Marketing 300 232 29.3% Other noninterest expenses 1,176 1,214 (3.1%) 7,529 7,199 4.6% AVERAGE BALANCES: Federal funds sold and interest- bearing deposits(b) $9,513 $43,101 (77.9%) Investment securities and securities available-for-sale 122,192 151,552 (19.4%) Loans, net of unearned income 851,436 676,358 25.9% Loans originated for sale (b) 5,196 11,872 (56.2%) Total earning assets 988,337 882,883 11.9% Total assets 1,033,102 926,466 11.5% Interest-bearing deposits: NOW accounts 85,917 84,388 1.8% Savings and money market accounts 194,141 186,126 4.3% Time deposits 314,116 282,201 11.3% Noninterest-bearing deposits 191,551 160,133 19.6% Total deposits 785,725 712,848 10.2% Short-term borrowings (b) 128,547 106,739 20.4% Long-term borrowings 20,000 20,000 0.0% Total interest-bearing liabilities 742,721 679,454 9.3% Stockholders' equity 87,180 78,182 11.5% YIELD ANALYSIS: Federal funds sold and interest- bearing deposits 0.89% 1.20% Investment securities and securities available-for-sale (FTE) 4.30% 4.69% Loans, net of unearned income (FTE) 5.71% 6.25% Total yield on earning assets (FTE) 5.49% 5.74% Interest-bearing deposits NOW accounts 0.13% 0.19% Savings and money market accounts 0.36% 0.82% Time deposits 2.39% 2.90% Short-term borrowings 0.77% 0.81% Long-term borrowings 5.36% 5.34% Total cost of interest-bearing liabilities 1.40% 1.74% (a) Deposits plus customer-related short-term borrowings in the form of commercial paper and repurchase agreements. (b) Variances reflect significant fluctuations in account balances due to the nature of the accounts. (c) 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 Consolidated Statements of Condition (Dollars in Thousands) March 31, March 31, December 31, 2004 2003 2003 (unaudited) (audited) Assets Cash and due from banks $38,631 $44,107 $35,846 Interest-bearing deposits with banks 206 216 205 Federal funds sold 55,948 78,100 3,292 Investment securities 50,636 105,300 77,344 Securities available-for-sale 53,575 40,414 56,583 Residential mortgage loans originated for sale 5,702 14,693 6,046 Loan receivables: Real estate - development and construction 293,454 218,598 283,599 Commercial 227,988 178,956 221,374 Real estate - mortgage: Residential 17,904 15,888 16,349 Commercial 149,771 137,945 143,723 Retail, principally second mortgage loans and residential equity lines of credit 175,379 143,418 169,298 Other 421 2,071 1,504 Total loans 864,917 696,876 835,847 Less: unearned income, net of origination costs (164) (554) (363) allowance for credit losses (11,041) (9,098) (10,828) Loans, net 853,712 687,224 824,656 Other real estate owned 250 - - Property and equipment, net 7,154 6,992 7,332 Prepaid expenses and other assets 17,984 16,524 17,951 Total assets $1,083,798 $993,570 $1,029,255 Liabilities Deposits: Noninterest-bearing $220,700 $182,421 $206,323 Interest-bearing 625,311 565,106 581,285 Total deposits 846,011 747,527 787,608 Short-term borrowings 123,834 142,670 128,844 Long-term borrowings 20,000 20,000 20,000 Accrued expenses and other liabilities 6,019 4,951 7,354 Total liabilities 995,864 915,148 943,806 Stockholders' equity Common stock, $.01 par value per share; authorized 10,000,000 shares; outstanding 7,188,628, 7,166,369 and 7,170,882 shares, respectively 72 71 72 Additional paid-in capital 48,156 47,538 47,886 Retained earnings 39,463 31,009 37,561 Accumulated other comprehensive income (loss) 243 (196) (70) Total stockholders' equity 87,934 78,422 85,449 Total liabilities and stockholders' equity $1,083,798 $993,570 $1,029,255 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, 2004 2003 (unaudited) Interest income: Loans $12,022 $10,512 Investment securities 1,212 1,733 Federal funds sold and interest- bearing deposits with banks 21 128 Total interest income 13,255 12,373 Interest expense: Deposits 2,068 2,436 Borrowings 512 476 Total interest expense 2,580 2,912 Net interest income 10,675 9,461 Provision for credit losses 310 305 Net interest income after provision for credit losses 10,365 9,156 Noninterest income: Fees charged for services 1,005 938 Gains and fees on sales of mortgage loans, net of costs 351 631 Net income (loss) on other real estate owned (9) 11 Commissions earned on financial services sales 140 123 Other 250 231 Total noninterest income 1,737 1,934 Noninterest expense: Salaries and employee benefits 4,046 3,970 Occupancy, net 976 924 Equipment 513 449 Data processing 518 410 Marketing 300 232 Professional fees 164 258 Cash management services 122 141 Deposit insurance 49 49 Other 841 766 Total noninterest expense 7,529 7,199 Income before income taxes 4,573 3,891 Income tax provision 1,592 1,400 Net income $2,981 $2,491 Per common share data: Net income: Basic $0.42 $0.35 Diluted 0.40 0.34 Cash dividends declared $0.15 $0.125 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, 2004 2003 (unaudited) GAAP-based Operating Performance Measures: Net interest income $10,675 $9,461 Provision for credit losses 310 305 Noninterest income 1,737 1,934 Noninterest expense 7,529 7,199 Income before taxes 4,573 3,891 Income tax provision 1,592 1,400 Net income 2,981 2,491 Return on average assets 1.16% 1.09% Return on average equity 13.75% 12.92% Net interest margin 4.34% 4.35% Efficiency ratio 60.66% 63.18% Net income per share - diluted $0.40 $0.34 Non-GAAP adjustments Tax equivalent adjustment - net interest income $274 $120 Core Operating Performance Measures Net interest income - tax equivalent $10,949 $9,581 Tax equivalent adjustment (274) (120) Net interest income 10,675 9,461 Provision for credit losses 310 305 Noninterest income 1,737 1,934 Noninterest expense 7,529 7,199 Income before taxes 4,573 3,891 Income tax provision 1,592 1,400 Net income 2,981 2,491 Return on average assets 1.16% 1.09% Return on average equity 13.75% 12.92% Net interest margin (FTE) 4.46% 4.40% Efficiency ratio (FTE) 59.35% 62.52% Net income per share - diluted $0.40 $0.34 COLUMBIA BANCORP Quarterly Highlights (Dollars in Thousands, Except Per-Share Data) 1Q04 4Q03 3Q03 2Q03 1Q03 (unaudited) SUMMARY OF OPERATING RESULTS: GAAP-based: Interest income $13,255 $13,151 $13,051 $12,828 $12,373 Interest expense 2,580 2,507 2,559 2,758 2,912 Net interest income 10,675 10,644 10,492 10,070 9,461 Provision for credit losses 310 120 - 745 305 Noninterest income 1,737 1,848 2,737 2,444 1,934 Noninterest expense 7,529 7,587 7,849 7,335 7,199 Income before taxes 4,573 4,785 5,380 4,434 3,891 Income tax provision 1,592 1,652 1,937 1,597 1,400 Net income 2,981 3,133 3,443 2,837 2,491 Based on core operating performance (a): Tax-equivalent interest income $13,529 $13,339 $13,169 $12,941 $12,493 Interest expense 2,580 2,507 2,559 2,758 2,912 Tax-equivalent net interest income 10,949 10,832 10,610 10,183 9,581 Tax-equivalent adjustment 274 188 118 113 120 Net interest income 10,675 10,644 10,492 10,070 9,461 Provision for credit losses 310 120 - 745 305 Noninterest income 1,737 1,848 2,737 2,444 1,934 Noninterest expense 7,529 7,587 7,849 7,335 7,199 Income before taxes 4,573 4,785 5,380 4,434 3,891 Income tax provision 1,592 1,652 1,937 1,597 1,400 Net income 2,981 3,133 3,443 2,837 2,491 PER SHARE DATA: Net income : GAAP-based: Basic $0.42 $0.44 $0.48 $0.40 $0.35 Diluted 0.40 0.42 0.47 0.39 0.34 Based on core operating performance (a): Basic 0.42 0.44 0.48 0.40 0.35 Diluted 0.40 0.42 0.47 0.39 0.34 Average number of shares outstanding: Basic 7,178,797 7,164,091 7,137,668 7,117,805 7,115,612 Diluted 7,434,701 7,413,256 7,387,088 7,346,462 7,290,541 Book value, at period end $12.23 $11.92 $11.65 $11.31 $11.02 Tangible book value, at period end 12.23 11.92 11.65 11.31 11.02 Cash dividends declared 0.150 0.150 0.125 0.125 0.125 PERIOD END DATA: Loans, net of unearned income $864,753 $835,484 $797,108 $750,509 $696,322 Investment securities and securities available-for- sale 104,211 133,927 142,048 140,552 145,714 Assets 1,083,798 1,029,255 1,013,492 1,060,141 993,570 Noninterest- bearing deposits 220,700 206,323 190,576 197,490 182,421 Interest-bearing deposits 625,311 581,285 584,401 586,507 565,106 Total deposits 846,011 787,608 774,977 783,997 747,527 Customer funding sources (a) 963,051 887,930 897,860 937,758 877,955 Stockholders' equity 87,934 85,449 83,132 80,538 78,422 PERFORMANCE RATIOS: GAAP-based: Return on average assets 1.16% 1.23% 1.36% 1.18% 1.09% Return on average stockholders' equity 13.75% 14.55% 16.56% 14.26% 12.92% Net interest margin 4.34% 4.36% 4.34% 4.40% 4.35% Efficiency ratio 60.66% 60.73% 59.33% 58.61% 63.18% Based on core operating performance (a): Return on average assets 1.16% 1.23% 1.36% 1.18% 1.09% Return on average stockholders' equity 13.75% 14.55% 16.56% 14.26% 12.92% Net interest margin (FTE) 4.46% 4.43% 4.39% 4.45% 4.40% Efficiency ratio (FTE) 59.35% 59.83% 58.81% 58.10% 62.52% CAPITAL RATIOS: Period-end capital to risk-weighted assets: Tier 1 9.04% 9.28% 9.31% 9.20% 9.62% Total 10.20% 10.45% 10.49% 10.33% 10.73% Period-end tier 1 leverage ratio 8.34% 8.43% 8.30% 8.34% 8.49% ASSET QUALITY: Allowance for credit losses to loans, net of unearned income, at period-end 1.28% 1.30% 1.32% 1.31% 1.31% Net recoveries (charge-offs) $(97) $148 $695 $21 $(45) Annualized net recoveries (charge-offs) to average loans, net of unearned income (0.05%) 0.07% 0.36% 0.01% (0.03%) Nonperforming assets: Nonaccrual loans $1,168 $892 $974 $720 $806 Restructured loans - - - 643 - Loans 90+ days past due and accruing 69 72 127 112 164 Other real estate owned 250 - - - - Total nonperforming assets $1,487 $964 $1,101 $1,475 $970 Nonperforming and past due loans to total loans, net of unearned income, at period-end 0.14% 0.12% 0.14% 0.20% 0.14% Nonperforming assets and past due loans to total assets, at period-end 0.14% 0.09% 0.11% 0.14% 0.10% NONINTEREST INCOME AND EXPENSE BREAKDOWN: Noninterest income: Fees charged for deposit services $1,005 $1,006 $1,056 $994 $938 Gains on sales of mortgage loans, net of costs 351 322 1,168 834 630 Net income (loss) on other real estate owned (9) 2 (21) 30 11 Gain on sale of investment securities - - 28 - - Gain (loss) on sale of other assets, net - (3) (6) - (1) Commissions earned on financial services sales 140 150 208 125 123 Other noninterest income 250 371 304 461 233 Total noninterest income 1,737 1,848 2,737 2,444 1,934 Noninterest expenses: Salaries and payroll taxes 3,684 3,583 3,717 3,610 3,440 Employee benefits 362 718 598 255 530 Occupancy, net 976 1,000 974 920 924 Equipment 513 514 500 495 449 Data processing 518 498 563 484 410 Marketing 300 199 272 335 232 Other noninterest expenses 1,176 1,075 1,225 1,236 1,214 Total noninterest expenses 7,529 7,587 7,849 7,335 7,199 AVERAGE BALANCES: Federal funds sold and interest bearing deposits $9,513 $8,584 $23,355 $25,995 $43,101 Investment securities and securities available-for- sale 122,192 135,749 139,201 151,508 151,552 Loans, net of unearned income 851,436 818,038 772,604 721,274 676,358 Loans originated for sale (b) 5,196 6,891 24,081 19,945 11,872 Total earning assets 988,337 969,262 959,241 918,722 882,883 Total assets 1,033,102 1,012,865 1,003,752 965,980 926,466 Interest-bearing deposits: NOW accounts 85,917 86,806 92,491 93,717 84,388 Savings and money market accounts 194,141 207,351 205,166 198,470 186,126 Time deposits 314,116 292,383 280,345 280,242 282,201 Noninterest-bearing deposits 191,551 192,030 182,221 168,554 160,133 Total deposits 785,725 778,570 760,223 740,983 712,848 Short-term borrowings (b) 128,547 124,563 137,021 115,939 106,739 Long-term borrowings 20,000 20,000 20,000 20,000 20,000 Total interest- bearing liabilities 742,721 731,103 735,023 708,368 679,454 Stockholders' equity 87,180 85,420 82,502 79,775 78,182 YIELD ANALYSIS: Federal funds sold and interest bearing deposits 0.89% 0.88% 0.95% 1.18% 1.20% Investment securities and securities available-for-sale (FTE) 4.30% 3.96% 4.34% 4.59% 4.69% Loans, net of unearned income (FTE) 5.71% 5.75% 5.77% 6.02% 6.25% Total yield on earning assets (FTE) 5.49% 5.46% 5.45% 5.65% 5.74% Interest-bearing deposits: NOW accounts 0.13% 0.10% 0.10% 0.10% 0.19% Savings and money market accounts 0.36% 0.37% 0.37% 0.64% 0.82% Time deposits 2.39% 2.46% 2.62% 2.78% 2.90% Short-term borrowings 0.77% 0.68% 0.57% 0.69% 0.81% Long-term borrowings 5.36% 5.34% 5.71% 5.50% 5.34% Total cost of interest- bearing liabilities 1.40% 1.36% 1.38% 1.56% 1.74% (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. (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. DATASOURCE: Columbia Bancorp CONTACT: John A. Scaldara, Jr., President and COO of Columbia Bancorp, +1-410-423-8012 Web site: http://www.columbank.com/ Company News On-Call: http://www.prnewswire.com/comp/127921.html

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