CBMD Columbia Bancorp (MM)

Columbia Bancorp Reports Third Quarter 2004 Results COLUMBIA, Md., Oct. 26 /PRNewswire-FirstCall/ -- Columbia Bancorp (NASDAQ:CBMD), parent company of The Columbia Bank (the "Bank"), today announced net income for the third quarter 2004 of $3.52 million ($.48 per diluted share), representing a return on average equity of 15.60% and a return on average assets of 1.24%. Net income for the corresponding period of 2003 was $3.44 million ($.47 per diluted share), representing a return on average equity of 16.56% and a return on average assets of 1.36%. For the nine months ended September 30, 2004, net income totaled $9.61 million ($1.30 per diluted share), representing an increase of 10% from the $8.77 million ($1.19 per diluted share) for the same period during 2003. Returns on average equity were 14.50% and 14.63% for the nine months ended September 30, 2004 and 2003, respectively. Total assets reached a record level of $1.18 billion at September 30, 2004. THIRD QUARTER FINANCIAL HIGHLIGHTS -- Loans grew to a record level of $936.0 million, increasing $138.9 million, or 17.4%, since September 30, 2003. Since December 31, 2003, loans grew $100.5 million, representing an annualized rate of growth of 16.0%. -- Customer funding sources (deposits and other short-term borrowings from core customers) grew $151.6 million, or 16.8%, since September 30, 2003. -- Credit quality remained strong with nonperforming assets and past due loans totaling only $657,000, or .06% of total assets. Net loan loss recoveries during the quarter totaled $81,000. -- As expected, the Federal Reserve's actions to increase short-term interest rates (a total of .75% since June 30, 2004) led to improvement in the net interest margin. As compared to the second quarter 2004, the net interest margin (FTE) increased from 4.29% to 4.41%. DETAILED REVIEW OF FINANCIAL PERFORMANCE Total assets at September 30, 2004 were $1.18 billion, representing growth of $165.6 million, or 16.3% since September 30, 2003. Loans, net of unearned income, totaled $936.0 million compared to $797.1 million at September 30, 2003, representing growth of $138.9 million, or 17.4%. Growth in the portfolio since September 30, 2003 was supported by strength in all lending activities. Specifically, the real estate development and construction portfolio increased $70.9 million (27.1%), the consumer portfolio increased $35.0 million (22.0%), and the commercial portfolio, inclusive of commercial mortgages, increased $27.0 million (7.5%). Customer funding sources, representing deposits plus other short-term borrowings from core customers, increased 16.8% to $1.05 billion at September 30, 2004. Shareholders' equity climbed 8.4% to $90.1 million at September 30, 2004. Operating performance through September 30, 2004 was primarily driven by growth in net interest income and containment of noninterest expense, mitigated by a decline in revenue from mortgage banking activities. Net interest income increased 11.5% during the third quarter 2004 and 10.0% during the nine months ended September 30, 2004 as compared to the corresponding periods of 2003, as a result of continued growth in earning assets. The net interest margin (FTE) remained relatively stable during the quarter and nine month periods of 2004 as compared to 2003, increasing .02% during the quarter and decreasing .02% during the nine month period. The Company remained asset sensitive at September 30, 2004 and will continue to benefit from the Federal Reserve's action to increase short-term rates. Since the Federal Reserve's action to increase rates beginning June 30, 2004, the Company's net interest margin has improved. Compared to the second quarter 2004, the net interest margin (FTE) improved from 4.29% to 4.41%. The ongoing benefit the Company might achieve as a result of a rising interest rate environment may be reduced depending upon the rate at which its cost of funds increases. The Company has successfully managed the growth of noninterest expenses. Noninterest expense decreased 2.3% during the third quarter 2004 compared to 2003 and increased only 1.4% during the nine months ended September 30, 2004 as compared to 2003. The efficiency ratio (FTE) improved to 56.1% during the third quarter 2004 and to 58.0% during the nine months ended September 30, 2004 as the Company continued to effectively leverage its overhead infrastructure. As expected, noninterest income fell $1.0 million, or 37.4%, during the third quarter 2004 and $1.8 million, or 25.2%, during the nine months ended September 30, 2004, compared to the corresponding periods of 2003, primarily as a result of a decline in mortgage banking activity. Specifically, mortgage- banking revenue declined $877,000 and $1.5 million during the third quarter and nine months ended September 30, 2004, respectively. Asset quality remained very strong at September 30, 2004, with nonperforming assets and past-due loans totaling $657,000. As of September 30, 2004, nonperforming assets and past-due loans represented only .06% of total assets. The ratio of nonperforming loans and past-due loans to total loans improved from .14% at September 30, 2003 to .07% at September 30, 2004. Net recoveries totaled $81,000 during the third quarter. Net charge-offs for the nine months ended September 30, 2004 totaled $6,000. Reflecting strong asset quality, the provision for loan losses during the nine-month period decreased from $1.05 million in 2003 to $692,000 in 2004. At September 30, 2004, the allowance for credit losses totaled $11.51 million, or 1.23% of loans, compared to $10.56 million, or 1.32% of loans at September 30, 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 a net interest margin and an efficiency ratio reported on a fully tax-equivalent basis ("FTE"). These 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 nonperforming 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 Nine Months Ended September 30, 2004 2003 % Change SUMMARY OF OPERATING RESULTS: Tax equivalent interest income $42,307 $38,604 9.6% Interest expense 8,466 8,229 2.9% Tax equivalent net interest income 33,841 30,375 11.4% Tax equivalent adjustment 811 352 130.4% Net interest income 33,030 30,023 10.0% Provision for credit losses 692 1,050 (34.1%) Noninterest income 5,323 7,115 (25.2%) Noninterest expense 22,702 22,383 1.4% Income before taxes 14,959 13,705 9.1% Income tax provision 5,347 4,934 8.4% Net income 9,612 8,771 9.6% PER SHARE DATA: Net income: Basic $1.34 $1.23 9.1% Diluted $1.30 $1.19 9.1% Average number of shares outstanding: Basic 7,160,055 7,123,776 0.5% Diluted 7,398,029 7,351,233 0.7% Book value, at period end $12.66 $11.65 8.7% Tangible book value, at period end 12.66 11.65 8.7% Cash dividends declared $0.45 $0.375 20.0% PERIOD END DATA: Loans, net of unearned income $936,000 $797,108 17.4% Investment securities and securities available-for-sale 150,604 142,048 6.0% Assets 1,179,107 1,013,492 16.3% Noninterest-bearing deposits 246,092 190,576 29.1% Interest-bearing deposits 669,250 584,401 14.5% Total deposits 915,342 774,977 18.1% Customer funding sources (a) 1,053,771 902,188 16.8% Stockholders' equity 90,100 83,132 8.4% PERFORMANCE RATIOS: Return on average assets 1.19% 1.21% Return on average stockholders' equity 14.50% 14.63% Net interest margin 4.28% 4.36% Net interest margin (FTE) 4.39% 4.41% Efficiency ratio (FTE)(c) 57.97% 59.70% CAPITAL RATIOS: Period-end capital to risk- weighted assets: Tier 1 9.23% 9.31% Total 10.35% 10.49% Period-end tier 1 leverage ratio 8.51% 8.30% ASSET QUALITY: Allowance for credit losses to loans, net of unearned income, at period-end 1.23% 1.32% Net recoveries (charge-offs) $(6) $671 (100.9%) Annualized net recoveries (charge-offs) to average loans, net of unearned income - % 0.12% Nonperforming assets: Nonaccrual loans $635 $974 (34.8%) Restructured loans - - na Loans 90+ days past due and accruing 22 127 (82.7%) Other real estate owned - - na Total nonperforming assets $657 $1,101 (40.3%) 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% 0.11% NONINTEREST INCOME AND EXPENSE BREAKDOWN: Noninterest income: Fees charged for services $2,944 $2,988 (1.5%) Gains and fees on sales of mortgage loans, net of costs 1,150 2,633 (56.3%) Net income (loss) on other real estate owned 59 20 195.0% Gain on sale of available for sale securities - 28 (100.0%) Commissions earned on financial services sales 423 456 (7.2%) Other noninterest income 747 990 (24.5%) 5,323 7,115 (25.2%) Noninterest expenses: Salaries and employee benefits 12,066 12,150 (0.7%) Occupancy, net 2,838 2,818 0.7% Equipment 1,486 1,444 2.9% Data processing 1,575 1,457 8.1% Marketing 736 839 (12.3%) Other noninterest expenses 4,001 3,675 8.9% 22,702 22,383 1.4% AVERAGE BALANCES: Federal funds sold and interest-bearing deposits (b) $22,354 $30,745 (27.3%) Investment securities and securities available-for-sale 121,973 147,375 (17.2%) Loans, net of unearned income 879,715 723,764 21.5% Loans originated for sale (b) 6,080 18,678 (67.4%) Total earning assets 1,030,122 920,562 11.9% Total assets 1,077,454 965,682 11.6% Interest-bearing deposits: NOW accounts 88,257 90,228 (2.2%) Savings/money market accounts 198,994 196,657 1.2% Time deposits 341,462 276,680 23.4% Noninterest-bearing deposits 213,725 170,472 25.4% Total deposits 842,438 734,037 14.8% Short-term borrowings (b) 117,538 120,011 (2.1%) Long-term borrowings 22,230 20,000 11.2% Total interest-bearing liabilities 768,481 703,576 9.2% Stockholders' equity 88,555 80,168 10.5% YIELD ANALYSIS: Federal funds sold and interest-bearing deposits 1.05% 1.14% Investment securities and securities available-for-sale (FTE) 4.19% 4.55% Loans, net of unearned income (FTE) 5.77% 6.00% Total yield on earning assets (FTE) 5.49% 5.61% Interest-bearing deposits NOW accounts 0.14% 0.13% Savings and money market accounts 0.38% 0.60% Time deposits 2.40% 2.81% Short-term borrowings 0.90% 0.70% Long-term borrowings 5.25% 5.27% Total cost of interest-bearing liabilities 1.47% 1.56% As of and Three Months Ended September 30, 2004 2003 % Change SUMMARY OF OPERATING RESULTS: Tax equivalent interest income $15,097 $13,169 14.6% Interest expense 3,131 2,559 22.4% Tax equivalent net interest income 11,966 10,610 12.8% Tax equivalent adjustment 264 118 123.7% Net interest income 11,702 10,492 11.5% Provision for credit losses 192 - 0.0% Noninterest income 1,714 2,737 (37.4%) Noninterest expense 7,669 7,849 (2.3%) Income before taxes 5,555 5,380 3.3% Income tax provision 2,037 1,937 5.2% Net income 3,518 3,443 2.2% PER SHARE DATA: Net income: Basic $0.49 $0.48 2.8% Diluted 0.48 0.47 1.7% Average number of shares outstanding: Basic 7,128,359 7,137,668 (0.1%) Diluted 7,350,901 7,387,088 (0.4%) Book value, at period end Tangible book value, at period end Cash dividends declared $0.15 $0.125 20.0% PERIOD END DATA: Loans, net of unearned income Investment securities 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 1.24% 1.36% Return on average stockholders' equity 15.60% 16.56% Net interest margin 4.31% 4.34% Net interest margin (FTE) 4.41% 4.39% Efficiency ratio (FTE)(c) 56.06% 58.81% 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) $81 $695 (88.3%) Annualized net recoveries (charge-offs) to average loans, net of unearned income 0.04% 0.36% Nonperforming assets: Nonaccrual loans Restructured 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 $910 $1,056 (13.8%) Gains and fees on sales of mortgage loans, net of costs 291 1,168 (75.1%) Net income (loss) on other real estate owned 73 (21) (447.6%) Gain on sale of available for sale securities - 28 (100.0%) Commissions earned on financial services sales 146 208 (29.8%) Other noninterest income 294 298 (1.3%) 1,714 2,737 (37.4%) Noninterest expenses: Salaries and employee benefits 4,114 4,315 (4.7%) Occupancy, net 918 973 (5.7%) Equipment 468 500 (6.4%) Data processing 525 563 (6.7%) Marketing 140 272 (48.5%) Other noninterest expenses 1,504 1,226 22.7% 7,669 7,849 (2.3%) AVERAGE BALANCES: Federal funds sold and interest-bearing deposits (b) $20,056 $23,355 (14.1%) Investment securities and securities available-for-sale 140,143 139,201 0.7% Loans, net of unearned income 914,052 772,604 18.3% Loans originated for sale (b) 4,738 24,081 (80.3%) Total earning assets 1,078,989 959,241 12.5% Total assets 1,126,923 1,003,752 12.3% Interest-bearing deposits: NOW accounts 89,532 92,491 (3.2%) Savings/money market accounts 208,538 205,166 1.6% Time deposits 361,653 280,345 29.0% Noninterest-bearing deposits 228,429 182,221 25.4% Total deposits 888,152 760,223 16.8% Short-term borrowings (b) 118,077 137,021 (13.8%) Long-term borrowings 26,186 20,000 30.9% Total interest-bearing liabilities 803,986 735,023 9.4% Stockholders' equity 89,730 82,502 8.8% YIELD ANALYSIS: Federal funds sold and interest-bearing deposits 1.29% 0.95% Investment securities and securities available-for-sale (FTE) 4.07% 4.34% Loans, net of unearned income (FTE) 5.89% 5.77% Total yield on earning assets (FTE) 5.57% 5.45% Interest-bearing deposits NOW accounts 0.15% 0.10% Savings and money market accounts 0.41% 0.37% Time deposits 2.42% 2.62% Short-term borrowings 1.17% 0.57% Long-term borrowings 5.09% 5.71% Total cost of interest-bearing liabilities 1.55% 1.38% (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) September 30, December 31, 2004 2003 2003 (unaudited) (audited) Assets Cash and due from banks $37,959 $39,131 $35,846 Interest-bearing deposits with banks 206 204 205 Federal funds sold 36,409 5,527 3,292 Investment securities held-to-maturity 99,295 85,233 77,344 Securities available-for-sale 51,309 56,815 56,583 Residential mortgage loans originated for sale 2,587 14,138 6,046 Loan receivables: Real estate - development and construction 332,258 261,397 283,599 Commercial 229,589 210,825 221,374 Real estate - mortgage: Residential 17,564 15,776 16,349 Commercial 158,585 150,300 143,723 Retail, principally second mortgage loans and residential equity lines of credit 194,031 158,993 169,298 Other 4,056 258 1,504 Total loans 936,083 797,549 835,847 Less: unearned income, net of origination costs (83) (441) (363) allowance for credit losses (11,514) (10,559) (10,828) Loans, net 924,486 786,549 824,656 Property and equipment, net 6,910 7,689 7,332 Prepaid expenses and other assets 19,946 18,206 17,951 Total assets $1,179,107 $1,013,492 $1,029,255 Liabilities Deposits: Noninterest-bearing $246,092 $190,576 $206,323 Interest-bearing 669,250 584,401 581,285 Total deposits 915,342 774,977 787,608 Short-term borrowings 141,031 129,211 128,844 Subordinated debentures 6,186 - - Long-term borrowings 20,000 20,000 20,000 Accrued expenses and other liabilities 6,448 6,172 7,354 Total liabilities 1,089,007 930,360 943,806 Stockholders' equity Common stock, $.01 par value per share; authorized 10,000,000 shares; outstanding 7,117,317, 7,142,349 and 7,170,882 shares, respectively 71 71 72 Additional paid-in capital 45,925 47,732 47,886 Retained earnings 43,956 35,506 37,561 Accumulated other comprehensive income (loss) 148 (177) (70) Total stockholders' equity 90,100 83,132 85,449 Total liabilities and stockholders' equity $1,179,107 $1,013,492 $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) Nine Months Ended Three Months Ended September 30, September 30, 2004 2003 2004 2003 (unaudited) (unaudited) Interest income: Loans $37,717 $33,121 $13,428 $11,534 Investment securities 3,603 4,869 1,340 1,461 Federal funds sold and interest- bearing deposits with banks 176 262 65 56 Total interest income 41,496 38,252 14,833 13,051 Interest expense: Deposits 6,796 6,790 2,450 2,069 Borrowings 1,670 1,439 681 490 Total interest expense 8,466 8,229 3,131 2,559 Net interest income 33,030 30,023 11,702 10,492 Provision for credit losses 692 1,050 192 - Net interest income after provision for credit losses 32,338 28,973 11,510 10,492 Noninterest income: Fees charged for services 2,944 2,988 910 1,056 Gains and fees on sales of mortgage loans, net of costs 1,150 2,633 291 1,168 Net income (loss) on other real estate owned 59 20 73 (21) Gain on sale of investment securities - 28 - 28 Commissions earned on financial services sales 423 456 146 208 Other 747 990 294 298 Total noninterest income 5,323 7,115 1,714 2,737 Noninterest expense: Salaries and employee benefits 12,066 12,150 4,114 4,315 Occupancy, net 2,838 2,818 918 973 Equipment 1,486 1,444 468 500 Data processing 1,575 1,457 525 563 Marketing 736 839 140 272 Professional fees 601 568 263 174 Cash management services 411 439 131 149 Deposit insurance 150 147 51 49 Other 2,839 2,521 1,059 854 Total noninterest expense 22,702 22,383 7,669 7,849 Income before income taxes 14,959 13,705 5,555 5,380 Income tax provision 5,347 4,934 2,037 1,937 Net income $9,612 $8,771 $3,518 $3,443 Per common share data: Net income: Basic $1.34 $1.23 $0.49 $0.48 Diluted 1.30 1.19 0.48 0.47 Cash dividends declared $0.45 $0.375 $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) Nine Months Ended Three Months Ended September 30, September 30, 2004 2003 2004 2003 (unaudited) (unaudited) GAAP-based Operating Performance Measures: Net interest income $33,030 $30,023 $11,702 $10,492 Provision for credit losses 692 1,050 192 - Noninterest income 5,323 7,115 1,714 2,737 Noninterest expense 22,702 22,383 7,669 7,849 Income before taxes 14,959 13,705 5,555 5,380 Income tax provision 5,347 4,934 2,037 1,937 Net income 9,612 8,771 3,518 3,443 Return on average assets 1.19% 1.21% 1.24% 1.36% Return on average equity 14.50% 14.63% 15.60% 16.56% Net interest margin 4.28% 4.36% 4.31% 4.34% Efficiency ratio 59.19% 60.27% 57.16% 59.33% Net income per share - diluted $1.30 $1.19 $0.48 $0.47 Non-GAAP adjustments Tax equivalent adjustment - net interest income $811 $352 $264 $118 Core Operating Performance Measures Net interest income - tax equivalent $33,841 $30,375 $11,966 $10,610 Tax equivalent adjustment (811) (352) (264) (118) Net interest income 33,030 30,023 11,702 10,492 Provision for credit losses 692 1,050 192 - Noninterest income 5,323 7,115 1,714 2,737 Noninterest expense 22,702 22,383 7,669 7,849 Income before taxes 14,959 13,705 5,555 5,380 Income tax provision 5,347 4,934 2,037 1,937 Net income 9,612 8,771 3,518 3,443 Return on average assets 1.19% 1.21% 1.24% 1.36% Return on average equity 14.50% 14.63% 15.60% 16.56% Net interest margin (FTE) 4.39% 4.41% 4.41% 4.39% Efficiency ratio (FTE) 57.97% 59.70% 56.06% 58.81% Net income per share - diluted $1.30 $1.19 $0.48 $0.47 COLUMBIA BANCORP Quarterly Highlights (Dollars in Thousands, Except Per-Share Data) 3Q04 2Q04 1Q04 (unaudited) SUMMARY OF OPERATING RESULTS: GAAP-based: Interest income $14,833 $13,408 $13,255 Interest expense 3,131 2,755 2,580 Net interest income 11,702 10,653 10,675 Provision for credit losses 192 190 310 Noninterest income 1,714 1,872 1,737 Noninterest expense 7,669 7,504 7,529 Income before taxes 5,555 4,831 4,573 Income tax provision 2,037 1,718 1,592 Net income 3,518 3,113 2,981 Based on core operating performance (a): Tax-equivalent interest income $15,097 $13,681 $13,529 Interest expense 3,131 2,755 2,580 Tax-equivalent net interest income 11,966 10,926 10,949 Tax-equivalent adjustment 264 273 274 Net interest income 11,702 10,653 10,675 Provision for credit losses 192 190 310 Noninterest income 1,714 1,872 1,737 Noninterest expense 7,669 7,504 7,529 Income before taxes 5,555 4,831 4,573 Income tax provision 2,037 1,718 1,592 Net income 3,518 3,113 2,981 PER SHARE DATA: Net income: GAAP-based: Basic $0.49 $0.43 $0.42 Diluted 0.48 0.42 0.40 Based on core operating performance (a): Basic $0.49 0.43 0.42 Diluted 0.48 0.42 0.40 Average number of shares outstanding: Basic 7,128,359 7,170,585 7,178,797 Diluted 7,358,993 7,404,762 7,434,701 Book value, at period end $12.66 $12.33 $12.23 Tangible book value, at period end 12.66 12.33 12.23 Cash dividends declared $0.15 0.15 0.15 PERIOD END DATA: Loans, net of unearned income $936,000 $900,320 $864,753 Investment securities and securities available-for-sale 150,604 122,430 104,211 Assets 1,179,107 1,126,916 1,083,798 Noninterest-bearing deposits 246,092 240,117 220,700 Interest-bearing deposits 669,250 650,884 625,311 Total deposits 915,342 891,001 846,011 Customer funding sources (a) 1,053,771 1,001,524 963,051 Stockholders' equity 90,100 88,039 87,934 PERFORMANCE RATIOS: GAAP-based: Return on average assets 1.24% 1.16% 1.16% Return on average stockholders' equity 15.60% 14.07% 13.75% Net interest margin 4.31% 4.18% 4.34% Efficiency ratio 57.16% 59.91% 60.66% Based on core operating performance (a): Return on average assets 1.24% 1.16% 1.16% Return on average stockholders' equity 15.60% 14.07% 13.75% Net interest margin (FTE) 4.41% 4.29% 4.46% Efficiency ratio (FTE) 56.06% 58.63% 59.35% CAPITAL RATIOS: Period-end capital to risk- weighted assets: Tier 1 9.23% 9.45% 9.04% Total 10.35% 10.58% 10.20% Period-end tier 1 leverage ratio 8.51% 8.79% 8.34% ASSET QUALITY: Allowance for credit losses to loans, net of unearned income, at period-end 1.23% 1.25% 1.28% Net recoveries (charge-offs) $81 $10 $(97) Annualized net recoveries (charge-offs) to average loans, net of unearned income 0.04% - % (0.05%) Nonperforming assets: Nonaccrual loans $635 $1,095 $1,168 Restructured loans - - - Loans 90+ days past due and accruing 22 91 69 Other real estate owned - 250 250 Total nonperforming assets $657 $1,436 $1,487 Nonperforming and past due loans to total loans, net of unearned income, at period-end 0.07% 0.13% 0.14% Nonperforming assets and past due loans to total assets, at period-end 0.06% 0.13% 0.14% NONINTEREST INCOME AND EXPENSE BREAKDOWN: Noninterest income: Fees charged for deposit services $910 $1,029 $1,005 Gains on sales of mortgage loans, net of costs 291 508 351 Net income (loss) on other real estate owned 73 (5) (9) Commissions earned on financial services sales 146 137 140 Other noninterest income 294 203 250 Total noninterest income $1,714 $1,872 $1,737 Noninterest expenses: Salaries and payroll taxes $3,718 $3,618 $3,684 Employee benefits 396 288 362 Occupancy, net 918 944 976 Equipment 468 505 513 Data processing 525 532 518 Marketing 140 296 300 Other noninterest expenses 1,504 1,321 1,176 Total noninterest expenses $7,669 $7,504 $7,529 AVERAGE BALANCES: Federal funds sold and interest bearing deposits $20,056 $37,521 $9,513 Investment securities and securities available-for-sale 140,143 103,384 122,192 Loans, net of unearned income 914,052 873,278 851,436 Loans originated for sale (b) 4,738 8,320 5,196 Total earning assets 1,078,989 1,022,503 988,337 Total assets 1,126,923 1,071,793 1,033,102 Interest-bearing deposits: NOW accounts 89,532 89,308 85,917 Savings and money market accounts 208,538 194,197 194,141 Time deposits 361,653 348,394 314,116 Noninterest-bearing deposits 228,429 221,033 191,551 Total deposits 888,152 852,932 785,725 Short-term borrowings (b) 118,077 105,985 128,547 Long-term borrowings 26,186 20,462 20,000 Total interest-bearing liabilities 803,986 758,346 742,721 Stockholders' equity 89,730 88,743 87,180 YIELD ANALYSIS: Federal funds sold and interest bearing deposits 1.29% 0.96% 0.89% Investment securities and securities available-for-sale (FTE) 4.07% 4.45% 4.30% Loans, net of unearned income (FTE) 5.89% 5.68% 5.71% Total yield on earning assets (FTE) 5.57% 5.38% 5.49% Interest-bearing deposits NOW accounts 0.15% 0.15% 0.13% Savings and money market accounts 0.41% 0.37% 0.36% Time deposits 2.42% 2.39% 2.39% Short-term borrowings 1.17% 0.77% 0.77% Long-term borrowings 5.09% 5.35% 5.36% Total cost of interest-bearing liabilities 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. COLUMBIA BANCORP Quarterly Highlights (Dollars in Thousands, Except Per-Share Data) 4Q03 3Q03 2Q03 1Q03 (unaudited) SUMMARY OF OPERATING RESULTS: GAAP-based: Interest income $13,151 $13,051 $12,828 $12,373 Interest expense 2,507 2,559 2,758 2,912 Net interest income 10,644 10,492 10,070 9,461 Provision for credit losses 120 - 745 305 Noninterest income 1,848 2,737 2,444 1,934 Noninterest expense 7,587 7,849 7,335 7,199 Income before taxes 4,785 5,380 4,434 3,891 Income tax provision 1,652 1,937 1,597 1,400 Net income 3,133 3,443 2,837 2,491 Based on core operating performance (a): Tax-equivalent interest income $13,339 $13,169 $12,941 $12,493 Interest expense 2,507 2,559 2,758 2,912 Tax-equivalent net interest income 10,832 10,610 10,183 9,581 Tax-equivalent adjustment 188 118 113 120 Net interest income 10,644 10,492 10,070 9,461 Provision for credit losses 120 - 745 305 Noninterest income 1,848 2,737 2,444 1,934 Noninterest expense 7,587 7,849 7,335 7,199 Income before taxes 4,785 5,380 4,434 3,891 Income tax provision 1,652 1,937 1,597 1,400 Net income 3,133 3,443 2,837 2,491 PER SHARE DATA: Net income: GAAP-based: Basic $0.44 $0.48 $0.40 $0.35 Diluted 0.42 0.47 0.39 0.34 Based on core operating performance (a): Basic 0.44 0.48 0.40 0.35 Diluted 0.42 0.47 0.39 0.34 Average number of shares outstanding: Basic 7,164,091 7,137,668 7,117,805 7,115,612 Diluted 7,413,256 7,387,088 7,346,462 7,290,541 Book value, at period end $11.92 $11.65 $11.31 $11.02 Tangible book value, at period end 11.92 11.65 11.31 11.02 Cash dividends declared 0.150 0.125 0.125 0.125 PERIOD END DATA: Loans, net of unearned income $835,484 $797,108 $750,509 $696,322 Investment securities and securities available-for-sale 133,927 142,048 140,552 145,714 Assets 1,029,255 1,013,492 1,060,141 993,570 Noninterest-bearing deposits 206,323 190,576 197,490 182,421 Interest-bearing deposits 581,285 584,401 586,507 565,106 Total deposits 787,608 774,977 783,997 747,527 Customer funding sources (a) 887,930 897,860 937,758 877,955 Stockholders' equity 85,449 83,132 80,538 78,422 PERFORMANCE RATIOS: GAAP-based: Return on average assets 1.23% 1.36% 1.18% 1.09% Return on average stockholders' equity 14.55% 16.56% 14.26% 12.92% Net interest margin 4.36% 4.34% 4.40% 4.35% Efficiency ratio 60.73% 59.33% 58.61% 63.18% Based on core operating performance (a): Return on average assets 1.23% 1.36% 1.18% 1.09% Return on average stockholders' equity 14.55% 16.56% 14.26% 12.92% Net interest margin (FTE) 4.43% 4.39% 4.45% 4.40% Efficiency ratio (FTE) 59.83% 58.81% 58.09% 62.52% CAPITAL RATIOS: Period-end capital to risk-weighted assets: Tier 1 9.28% 9.31% 9.20% 9.62% Total 10.45% 10.49% 10.33% 10.73% Period-end tier 1 leverage ratio 8.43% 8.30% 8.34% 8.49% ASSET QUALITY: Allowance for credit losses to loans, net of unearned income, at period-end 1.30% 1.32% 1.31% 1.31% Net recoveries (charge-offs) $148 $695 $21 $(45) Annualized net recoveries (charge-offs) to average loans, net of unearned income 0.07% 0.36% 0.01% (0.03%) Nonperforming assets: Nonaccrual loans $892 $974 $720 $806 Restructured loans - - 643 - Loans 90+ days past due and accruing 72 127 112 164 Other real estate owned - - - - Total nonperforming assets $964 $1,101 $1,475 $970 Nonperforming and past due loans to total loans, net of unearned income, at period-end 0.12% 0.14% 0.20% 0.14% Nonperforming assets and past due loans to total assets, at period-end 0.09% 0.11% 0.14% 0.10% NONINTEREST INCOME AND EXPENSE BREAKDOWN: Noninterest income: Fees charged for deposit services $1,006 $1,056 $994 $938 Gains on sales of mortgage loans, net of costs 322 1,168 834 630 Net income (loss) on other real estate owned 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 150 208 125 123 Other noninterest income 371 304 461 233 Total noninterest income $1,848 $2,737 $2,444 $1,934 Noninterest expenses: Salaries and payroll taxes $3,583 $3,717 $3,610 $3,440 Employee benefits 718 598 255 530 Occupancy, net 1,000 974 920 924 Equipment 514 500 495 449 Data processing 498 563 484 410 Marketing 199 272 335 232 Other noninterest expenses 1,075 1,225 1,236 1,214 Total noninterest expenses $7,587 $7,849 $7,335 $7,199 AVERAGE BALANCES: Federal funds sold and interest bearing deposits $8,584 $23,355 $25,995 $43,101 Investment securities and securities available-for-sale 135,749 139,201 151,508 151,552 Loans, net of unearned income 818,038 772,604 721,274 676,358 Loans originated for sale (b) 6,891 24,081 19,945 11,872 Total earning assets 969,262 959,241 918,722 882,883 Total assets 1,012,865 1,003,752 965,980 926,466 Interest-bearing deposits: NOW accounts 86,806 92,491 93,717 84,388 Savings and money market accounts 207,351 205,166 198,470 186,126 Time deposits 292,383 280,345 280,242 282,201 Noninterest-bearing deposits 192,030 182,221 168,554 160,133 Total deposits 778,570 760,223 740,983 712,848 Short-term borrowings (b) 124,563 137,021 115,939 106,739 Long-term borrowings 20,000 20,000 20,000 20,000 Total interest-bearing liabilities 731,103 735,023 708,368 679,454 Stockholders' equity 85,420 82,502 79,775 78,182 YIELD ANALYSIS: Federal funds sold and interest bearing deposits 0.88% 0.95% 1.18% 1.20% Investment securities and securities available-for-sale (FTE) 3.96% 4.34% 4.59% 4.69% Loans, net of unearned income (FTE) 5.75% 5.77% 6.02% 6.25% Total yield on earning assets (FTE) 5.46% 5.45% 5.65% 5.74% Interest-bearing deposits NOW accounts 0.10% 0.10% 0.10% 0.19% Savings and money market accounts 0.37% 0.37% 0.64% 0.82% Time deposits 2.46% 2.62% 2.78% 2.90% Short-term borrowings 0.68% 0.57% 0.69% 0.81% Long-term borrowings 5.34% 5.71% 5.50% 5.34% Total cost of interest- bearing liabilities 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. 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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