CBMD Columbia Bancorp (MM)

Columbia Bancorp Reports a 17% Increase in Fourth Quarter 2004 Earnings And Record Earnings for the Year 2004 COLUMBIA, Md., Jan. 27 /PRNewswire-FirstCall/ -- Columbia Bancorp (NASDAQ:CBMD), parent company of The Columbia Bank (the "Bank"), today announced that net income for the fourth quarter 2004 increased 17.2% to $3.67 million ($.50 per diluted share), from $3.13 million ($.42 per diluted share) for the fourth quarter 2003. For the fourth quarter 2004, return on average equity was 15.99% and return on average assets was 1.25%, compared to 14.55% and 1.23%, respectively, for the fourth quarter 2003. Net income for the year ended December 31, 2004 was a record $13.29 million ($1.80 per diluted share), representing an increase of 11.6% over the $11.90 million ($1.62 per diluted share) reported for the comparable period in 2003. The Company's return on average equity improved to 14.88% for 2004 from 14.63% for 2003. Return on average assets was 1.21% for 2004, compared to 1.22% for 2003. FOURTH QUARTER FINANCIAL HIGHLIGHTS -- Net interest income (FTE) increased $2.05 million or 18.9% over the fourth quarter of 2003. -- The net interest margin (FTE) improved to 4.57% during the fourth quarter of 2004 compared to 4.43% during the fourth quarter 2003. -- Non-performing assets decreased to .05% of total assets at December 31, 2004 compared to .09% at year-end 2003. -- Quarterly cash dividends declared increased 13.3% from $.15 per share for the third quarter of 2004 to $.17 per share for the fourth quarter of 2004. DETAILED REVIEW OF 2004 FINANCIAL PERFORMANCE Total assets at December 31, 2004 were $1.18 billion compared to $1.03 billion at December 31, 2003, representing growth of 14.6%. Loan production continued to be strong during 2004, resulting in an overall increase in total loans, net of unearned income, during the year of 13.7%, or $114.69 million, to $950.17 million. Loan growth during 2004 can be attributed, in large part, to the Company's continued success in the real estate development and construction and commercial real estate lending markets, which netted increases in the respective portfolios of $61.78 million (21.8%) and $20.26 million (14.1%). The consumer loan portfolio, consisting primarily of home equity lines of credit, also exhibited strong growth during the year, increasing $26.90 million, or 15.9%. The Company continued to focus on funding loan growth with customer-based funding sources during 2004 in the form of retail and commercial deposits and also short-term borrowings from customers in the form of commercial paper and repurchase agreements. As a result, customer funding sources increased 16.2% to $1.03 billion at December 31, 2004, from $882.71 million at December 31, 2003. The $142.69 million increase in total customer funding sources during 2004 was primarily due to the increase in noninterest-bearing deposits of $49.81 million and also to the $75.16 million increase in interest-bearing deposits. Stockholders' equity increased 8.1% to $92.35 million at December 31, 2004 from $85.45 million at December 31, 2003, representing a tangible book value per share of $12.98. Cash dividends declared of $.62 per share for the year ended December 31, 2004 represented an increase of 18.1% over 2003 dividends declared of $.525 per share. The principal driver of the Company's 2004 earnings improvement was an increase of $5.51 million, or 13.4%, in net interest income (FTE) as compared to 2003. This increase was primarily the result of a 12.9% increase in average earning assets during 2004 as compared to 2003 and improvement in the net interest margin (FTE) to 4.44% for 2004, from 4.42% in 2003. This increase more than offset a decline in noninterest income of $2.17 million, or 24.2%, which was attributable, in part, to a decline in residential mortgage loan production associated with a slowdown in refinancing activity. Specifically, decreased mortgage origination volume resulted in a decline of $1.52 million, or 51.4%, in gains and fees realized on sales of mortgage loans, net of costs. The Company continued to leverage its overhead structure by limiting the increase in total noninterest expenses to $1.08 million, or 3.6%, for 2004 as compared to 2003, while operating income (net interest income plus noninterest income) increased $2.75 million or 5.5%. The increase in noninterest expense during the year included: (i) an increase of $480,000, or 2.9%, in salaries and employee benefits; (ii) an increase in occupancy costs of $132,000, or 3.5%, reflecting normal escalations in lease payments and costs to maintain business properties; and (iii) an increase in other noninterest expenses of $604,000, or 12.7%, primarily reflecting added consulting, legal and audit expenses related to Sarbanes-Oxley compliance and added costs incurred to support increases in loan and deposit processing volumes. While the Company continued to experience growth in its loan portfolio, asset quality remained strong as evidenced by a reduction in non-performing assets and past due loans to $645,000 at December 31, 2004. As a percent of total assets, non-performing assets and past due loans at December 31, 2004 were .05% compared to .09% at December 31, 2003. At December 31, 2004, the allowance for credit losses totaled $11.58 million, or 1.22% of total loans, compared to $10.83 million, or 1.30% of loans, at December 31, 2003. The Company recorded net recoveries during 2004 and 2003 of $27,000 and $819,000, respectively. ABOUT COLUMBIA BANCORP Columbia Bancorp, headquartered in Columbia, Maryland, is a bank holding company and parent company of The Columbia Bank, a commercial bank. The Columbia Bank currently operates twenty-four banking offices in the Baltimore/Washington Corridor and provides a full range of financial services to consumers and businesses. Columbia Bancorp's Common Stock is traded on the National Market tier of The Nasdaq Stock Market(SM) under the symbol "CBMD". NON-GAAP PRESENTATION This press release includes disclosure and discussion of the net interest margin and efficiency ratio which are reported on a fully tax-equivalent basis ("FTE"). This press release also includes disclosure and discussion of net income, noninterest income, the efficiency ratio, earnings per share, and return on average equity, exclusive of non-recurring income. 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 Twelve Months Ended December 31, 2004 2003 % Change SUMMARY OF OPERATING RESULTS: Tax equivalent interest income $58,683 $51,942 13.0% Interest expense 11,963 10,736 11.4% Tax equivalent net interest income 46,720 41,206 13.4% Tax equivalent adjustment 1,137 539 110.9% Net interest income 45,583 40,667 12.1% Provision for credit losses 728 1,170 (37.8%) Noninterest income 6,798 8,963 (24.2%) Noninterest expense 31,045 29,970 3.6% Income before taxes 20,608 18,490 11.5% Income tax provision 7,323 6,586 11.2% Net income 13,285 11,904 11.6% PER SHARE DATA: Net income: Basic $1.86 $1.67 11.4% Diluted 1.80 1.62 11.1% Average number of shares outstanding: Basic 7,148,420 7,133,937 0.2% Diluted 7,391,371 7,369,736 0.3% Book value, at period end $12.98 $11.92 8.9% Tangible book value, at period end 12.98 11.92 8.9% Cash dividends declared $0.62 $0.525 18.1% PERIOD END DATA: Loans, net of unearned income $950,170 $835,484 13.7% Investment securities and securities available-for-sale 164,150 133,927 22.6% Assets 1,179,006 1,029,255 14.5% Noninterest-bearing deposits 256,132 206,323 24.1% Interest-bearing deposits 656,446 581,285 12.9% Total deposits 912,578 787,608 15.9% Customer funding sources (a) 1,025,403 882,710 16.2% Stockholders' equity 92,348 85,449 8.1% PERFORMANCE RATIOS: Return on average assets 1.21% 1.22% Return on average stockholders' equity 14.88% 14.63% Net interest margin 4.33% 4.36% Net interest margin (FTE) 4.44% 4.42% Efficiency ratio (FTE)(c) 58.01% 59.74% CAPITAL RATIOS: Period-end capital to risk- weighted assets: Tier 1 9.74% 9.28% Total 10.85% 10.45% Period-end tier 1 leverage ratio 8.75% 8.43% ASSET QUALITY: Allowance for credit losses to loans, net of unearned income, at period-end 1.22% 1.30% Net recoveries $27 $819 (96.7%) Annualized net recoveries to average loans, net of unearned income 0.00% 0.11% Nonperforming assets: Nonaccrual loans $614 $892 (31.2%) Restructured loans - - na Loans 90+ days past due and accruing 31 72 (56.9%) Other real estate owned - - na Total nonperforming assets $645 $964 (33.1%) Nonperforming and past due loans to total loans, net of unearned income, at period-end 0.07% 0.12% Nonperforming assets and past due loans to total assets, at period-end 0.05% 0.09% As of and Twelve Months Ended December 31, 2004 2003 % Change NONINTEREST INCOME AND EXPENSE BREAKDOWN: Noninterest income: Fees charged for services $3,718 $3,994 (6.9%) Gains and fees on sales of mortgage loans, net of costs 1,437 2,955 (51.4%) Net income on other real estate owned 59 22 168.2% Gain on sale of available for sale securities - 28 (100.0%) Commissions earned on financial services sales 589 606 (2.8%) Other noninterest income 995 1,358 (26.7%) 6,798 8,963 (24.2%) Noninterest expenses: Salaries and employee benefits 16,931 16,451 2.9% Occupancy, net 3,950 3,818 3.5% Equipment 1,912 1,958 (2.3%) Data processing 1,969 1,955 0.7% Marketing 929 1,038 (10.5%) Other noninterest expenses 5,354 4,750 12.7% 31,045 29,970 3.6% AVERAGE BALANCES: Federal funds sold and interest-bearing deposits (b) $20,635 $25,158 (18.0%) Investment securities and securities available-for-sale 130,865 144,445 (9.4%) Loans, net of unearned income 894,961 747,153 19.8% Loans originated for sale (b) 6,328 15,707 (59.7%) Total earning assets 1,052,789 932,463 12.9% Total assets 1,100,098 977,201 12.6% Interest-bearing deposits: NOW accounts 88,127 89,366 (1.4%) Savings/money market accounts 199,618 199,352 0.1% Time deposits 347,351 280,638 23.8% Noninterest-bearing deposits 221,810 175,906 26.1% Total deposits 856,906 745,262 15.0% Short-term borrowings (b) 123,092 121,158 1.6% Long-term borrowings 23,236 20,000 16.2% Total interest-bearing liabilities 781,424 710,514 10.0% Stockholders' equity 89,262 81,377 9.7% YIELD ANALYSIS: Federal funds sold and interest-bearing deposits 1.16% 1.11% Investment securities and securities available-for-sale (FTE) 4.16% 4.41% Loans, net of unearned income (FTE) 5.88% 5.94% Total yield on earning assets (FTE) 5.57% 5.57% Interest-bearing deposits NOW accounts 0.15% 0.12% Savings/money market accounts 0.40% 0.54% Time deposits 2.42% 2.72% Short-term borrowings 1.14% 0.71% Long-term borrowings 5.24% 5.34% Total cost of interest-bearing liabilities 1.53% 1.51% As of and Three Months Ended December 31, 2004 2003 % Change SUMMARY OF OPERATING RESULTS: Tax equivalent interest income $16,376 $13,339 22.8% Interest expense 3,497 2,507 39.5% Tax equivalent net interest income 12,879 10,832 18.9% Tax equivalent adjustment 326 188 73.4% Net interest income 12,553 10,644 17.9% Provision for credit losses 36 120 (70.0%) Noninterest income 1,475 1,848 (20.2%) Noninterest expense 8,343 7,587 10.0% Income before taxes 5,649 4,785 18.1% Income tax provision 1,976 1,652 19.6% Net income 3,673 3,133 17.2% PER SHARE DATA: Net income: Basic $0.52 $0.44 18.2% Diluted 0.50 0.42 19.0% Average number of shares outstanding: Basic 7,113,768 7,164,091 (0.7%) Diluted 7,371,541 7,413,256 (0.6%) 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 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 1.25% 1.23% Return on average stockholders' equity 15.99% 14.55% Net interest margin 4.46% 4.36% Net interest margin (FTE) 4.57% 4.43% Efficiency ratio (FTE)(c) 58.12% 59.83% 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 $33 $148 (77.7%) Annualized net recoveries to average loans, net of unearned income 0.01% 0.07% 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 As of and Three Months Ended December 31, 2004 2003 % Change NONINTEREST INCOME AND EXPENSE BREAKDOWN: Noninterest income: Fees charged for services $774 $1,006 (23.1%) Gains and fees on sales of mortgage loans, net of costs 287 322 (10.9%) Net income on other real estate owned - 2 (100.0%) Gain on sale of available for sale securities - - na Commissions earned on financial services sales 166 150 10.7% Other noninterest income 248 368 (32.6%) 1,475 1,848 (20.2%) Noninterest expenses: Salaries and employee benefits 4,865 4,301 13.1% Occupancy, net 1,112 1,000 11.2% Equipment 426 514 (17.1%) Data processing 394 498 (20.9%) Marketing 193 199 (3.0%) Other noninterest expenses 1,353 1,075 25.9% 8,343 7,587 10.0% AVERAGE BALANCES: Federal funds sold and interest-bearing deposits (b) $15,512 $8,584 80.7% Investment securities and securities available-for-sale 157,348 135,749 15.9% Loans, net of unearned income 940,368 818,038 15.0% Loans originated for sale (b) 7,068 6,891 2.6% Total earning assets 1,120,296 969,262 15.6% Total assets 1,167,536 1,012,865 15.3% Interest-bearing deposits: NOW accounts 87,742 86,806 1.1% Savings/money market accounts 201,479 207,351 (2.8%) Time deposits 364,888 292,383 24.8% Noninterest-bearing deposits 245,886 192,030 28.0% Total deposits 899,995 778,570 15.6% Short-term borrowings (b) 139,635 124,563 12.1% Long-term borrowings 26,231 20,000 31.2% Total interest-bearing liabilities 819,975 731,103 12.2% Stockholders' equity 91,367 85,420 7.0% YIELD ANALYSIS: Federal funds sold and interest-bearing deposits 1.59% 0.88% Investment securities and securities available-for-sale (FTE) 3.92% 3.96% Loans, net of unearned income (FTE) 6.20% 5.75% Total yield on earning assets (FTE) 5.81% 5.46% Interest-bearing deposits NOW accounts 0.16% 0.10% Savings/money market accounts 0.47% 0.37% Time deposits 2.48% 2.46% Short-term borrowings 1.74% 0.68% Long-term borrowings 5.22% 5.34% Total cost of interest-bearing liabilities 1.70% 1.36% (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 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) December 31, 2004 2003 (unaudited) (audited) Assets Cash and due from banks $30,012 $35,846 Interest-bearing deposits with banks 208 205 Federal funds sold 9,904 3,292 Investment securities held-to-maturity 116,170 77,344 Securities available-for-sale 47,980 56,583 Residential mortgage loans originated for sale 8,698 6,046 Loan receivables: Real estate - development and construction 345,375 283,599 Commercial 226,763 221,374 Real estate - mortgage: Residential 17,272 16,349 Commercial 163,985 143,723 Retail, principally second mortgage loans and residential equity lines of credit 196,198 169,298 Other 668 1,504 Total loans 950,261 835,847 Less: unearned income, net of origination costs (91) (363) allowance for credit losses (11,583) (10,828) Loans, net 938,587 824,656 Property and equipment, net 6,647 7,332 Prepaid expenses and other assets 20,800 17,951 Total assets $1,179,006 $1,029,255 Liabilities Deposits: Noninterest-bearing $256,132 $206,323 Interest-bearing 656,446 581,285 Total deposits 912,578 787,608 Short-term borrowings 135,825 128,844 Subordinated debentures 10,310 --- Long-term borrowings 20,000 20,000 Accrued expenses and other liabilities 7,945 7,354 Total liabilities 1,086,658 943,806 Stockholders' equity Common stock, $.01 par value per share; authorized 10,000,000 shares; outstanding 7,114,267 and 7,170,882 shares, respectively 71 72 Additional paid-in capital 45,739 47,886 Retained earnings 46,419 37,561 Accumulated other comprehensive income (loss) 119 (70) Total stockholders' equity 92,348 85,449 Total liabilities and stockholders' equity $1,179,006 $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) Twelve Months Ended Three Months Ended December 31, December 31, 2004 2003 2004 2003 (unaudited) (unaudited)(unaudited) (unaudited) Interest income: Loans $52,245 $44,962 $14,528 $11,841 Investment securities 5,062 6,161 1,459 1,292 Federal funds sold and interest- bearing deposits with banks 239 280 63 18 Total interest income 57,546 51,403 16,050 13,151 Interest expense: Deposits 9,340 8,814 2,544 2,024 Borrowings 2,623 1,922 953 483 Total interest expense 11,963 10,736 3,497 2,507 Net interest income 45,583 40,667 12,553 10,644 Provision for credit losses 728 1,170 36 120 Net interest income after provision for credit losses 44,855 39,497 12,517 10,524 Noninterest income: Fees charged for services 3,718 3,994 774 1,006 Gains and fees on sales of mortgage loans, net of costs 1,437 2,955 287 322 Net income on other real estate owned 59 22 --- 2 Gain on sale of investment securities --- 28 --- --- Commissions earned on financial services sales 589 606 166 150 Other 995 1,358 248 368 Total noninterest income 6,798 8,963 1,475 1,848 Noninterest expense: Salaries and employee benefits 16,931 16,451 4,865 4,301 Occupancy, net 3,950 3,818 1,112 1,000 Equipment 1,912 1,958 426 514 Data processing 1,969 1,955 394 498 Marketing 929 1,038 193 199 Professional fees 945 663 344 95 Cash management services 548 579 137 140 Deposit insurance 202 196 52 49 Other 3,659 3,312 820 791 Total noninterest expense 31,045 29,970 8,343 7,587 Income before income taxes 20,608 18,490 5,649 4,785 Income tax provision 7,323 6,586 1,976 1,652 Net income $13,285 $11,904 $3,673 $3,133 Per common share data: Net income: Basic $1.86 $1.67 $0.52 $0.44 Diluted 1.80 1.62 0.50 0.42 Cash dividends declared $0.62 $0.525 $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) (unaudited) Twelve Months Ended Three Months Ended December 31, December 31, 2004 2003 2004 2003 GAAP-based Operating Performance Measures: Net interest income $45,583 $40,667 $12,553 $10,644 Provision for credit losses 728 1,170 36 120 Noninterest income 6,798 8,963 1,475 1,848 Noninterest expense 31,045 29,970 8,343 7,587 Income before taxes 20,608 18,490 5,649 4,785 Income tax provision 7,323 6,586 1,976 1,652 Net income 13,285 11,904 3,673 3,133 Return on average assets 1.21% 1.22% 1.25% 1.23% Return on average equity 14.88% 14.63% 15.99% 14.55% Net interest margin 4.33% 4.36% 4.46% 4.36% Efficiency ratio 59.27% 60.39% 59.47% 60.73% Net income per share - diluted $1.80 $1.62 $0.50 $0.42 Non-GAAP adjustments Tax equivalent adjustment - net interest income $1,137 $539 $326 $188 Core Operating Performance Measures Net interest income - tax equivalent $46,720 $41,206 $12,879 $10,832 Tax equivalent adjustment (1,137) (539) (326) (188) Net interest income 45,583 40,667 12,553 10,644 Provision for credit losses 728 1,170 36 120 Noninterest income 6,798 8,963 1,475 1,848 Noninterest expense 31,045 29,970 8,343 7,587 Income before taxes 20,608 18,490 5,649 4,785 Income tax provision 7,323 6,586 1,976 1,652 Net income 13,285 11,904 3,673 3,133 Return on average assets 1.21% 1.22% 1.25% 1.23% Return on average equity 14.88% 14.63% 15.99% 14.55% Net interest margin (FTE) 4.44% 4.42% 4.57% 4.43% Efficiency ratio (FTE) 58.01% 59.74% 58.12% 59.83% Net income per share - diluted $1.80 $1.62 $0.50 $0.42 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 1,475 1,714 1,872 1,737 Noninterest expense 8,343 7,669 7,504 7,529 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 1,475 1,714 1,872 1,737 Noninterest expense 8,343 7,669 7,504 7,529 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 $12.65 $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 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 (a) 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 59.47% 57.16% 59.91% 60.66% 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) 58.12% 56.06% 58.63% 59.35% 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% ---% (0.05%) Nonperforming assets: Nonaccrual loans $614 $635 $1,095 $1,168 Restructured loans --- --- --- --- 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 $774 $910 $1,029 $1,005 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 248 294 203 250 Total noninterest income $1,475 $1,714 $1,872 $1,737 Noninterest expenses: Salaries and payroll taxes $4,014 $3,718 $3,618 $3,684 Employee benefits 851 396 288 362 Occupancy, net 1,112 918 944 976 Equipment 426 468 505 513 Data processing 394 525 532 518 Marketing 193 140 296 300 Other noninterest expenses 1,353 1,504 1,321 1,176 Total noninterest expenses $8,343 $7,669 $7,504 $7,529 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 (b) 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/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 (b) 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/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. 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, +1-410-423-8012, or James P. Radick, CFO, +1-410-423-8020, both of Columbia Bancorp Web site: http://www.columbank.com/ Company News On-Call: http://www.prnewswire.com/comp/127921.html

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