Exhibit 99.1 Press Release of the Registrant
Columbia Bancorp Continues with Loan and Deposit Growth
THE DALLES, Ore.--(BUSINESS WIRE)--July 23, 2003--Columbia Bancorp
(Nasdaq:CBBO), the financial holding company for Columbia River Bank,
today announced second quarter 2003 earnings.
EARNINGS
Columbia had previously given guidance in a press release on June
11, 2003, that management expected earnings to be in the range of
$0.15 to $0.17 per share. In keeping with that projection, Columbia
announced today that its net income for the second quarter was $1.47
million, or $0.16 per diluted share, reflecting a decrease of 39.27%
compared to $2.42 million, or $0.26 per diluted share in the second
quarter of 2002. "We have dealt swiftly and aggressively to mitigate
the risks associated with two assets on our balance sheet," stated
Roger Christensen, Columbia's President and Chief Executive Officer.
"We did this by reducing the value of our mortgage-servicing asset and
writing down a single loan in Central Oregon. We think these actions
will enable Columbia to move forward and concentrate on opportunities
that will enrich our customers and shareholders. The components that
have built our strong earnings stream remain in place and we expect to
continue to improve our operations and our asset volume and quality.
We experienced an earnings aberration in the second quarter and now we
expect to return to normal profitability next quarter." Christensen
indicated that the mortgage-servicing asset was reduced based on the
continuing low interest rate environment and the resulting impact from
refinancing, and that the addition of reserves relating to a single
loan reflect management's desire to take a conservative approach to
the valuation of Columbia's loan portfolio.
NET INTEREST INCOME
The net interest income for the quarter ending June 30, 2003 was
$7.81 million as compared to the same quarter ending June 30, 2002 at
$7.43 million, representing a 5.13% increase. The year-to-date 2003
net interest income was $15.43 million as compared to the same period
2002 at $14.23 million, representing an increase of 8.45%.
The net interest margin for the quarter ending June 30, 2003 was
6.15% as compared to the same quarter period ending June 30, 2002 at
6.44%. The year-to-date 2003 net interest margin was 6.22% as compared
to year-to-date 2002 at 6.39%. The compression in the net interest
margin is largely attributable to the reduction in the earning asset
yields as a result of loans repricing at lower rates and investments
with higher yields being called from the investment portfolio.
"Despite the compressing net interest margin trend, Columbia remained
in the top 3% in a peer group of 335 bank holding companies according
to the March 2003 Bank Holding Company Performance Report for
companies between $500 million and $1 billion in asset size," said
Greg Spear, Chief Financial Officer.
NON-INTEREST INCOME AND EXPENSE
Non-interest income for the quarter ending June 30, 2003 was $1.97
million as compared to the same quarter ending June 30, 2002 at $2.76
million, a decline of 28.59%. Year-to-date non-interest income was
$3.97 million as compared to year-to-date 2002 at $4.85 million, a
decline of 18.19%. Higher mortgage-servicing asset amortization, lower
mortgage servicing retained premiums, and lower revenues from
Columbia's financial services division resulted in reduced
non-interest income.
Non-interest expense for the quarter ending June 30, 2003 was
$5.76 million as compared to the same quarter ending June 30, 2002 at
$5.71 million, an increase of 0.84%. Year-to-date non-interest expense
was $11.35 million as compared to year-to-date 2002 at $10.81 million,
an increase of 4.97%.
FINANCIAL HIGHLIGHTS
-- Year-to-Date Return on Equity (ROE) is 14.95%
-- Year-to-Date Net Interest Margin is 6.22%
-- Year-to-Date Efficiency Ratio is 58.47%
LOANS AND DEPOSITS
Gross loans were $460.36 million as of June 30, 2003 as compared
to $429.96 million at June 30, 2002, representing an increase of
7.07%. Total loans, excluding loans held for sale, were $456.86
million as of June 30, 2003 as compared to $419.33 million as of June
30, 2002, an increase of 8.95%. Loans held for sale were $3.49 million
as of June 30, 2003 as compared to $10.63 million as of June 30, 2002,
a decrease of 67.13%. "The reduction in loans held for sale resulted
from increased delivery efficiencies in secondary marketing activity
in our mortgage group," stated Jim McCall, Chief Operating Officer.
Deposits were $494.79 million as of June 30, 2003 as compared to
$445.03 million at June 30, 2002, representing an increase of 11.18%.
"This continuing growth in interest earning assets will allow us an
opportunity to increase profitability. We are all about reinvesting
deposits for growth and opportunity in our communities," states
Christensen.
MORTGAGE-SERVICING ASSET
The mortgage-servicing asset (MSA) ended the second quarter 2003
with a net carrying value of $3.73 million. During the second quarter
2003, an MSA valuation adjustment was recognized in the amount of
$575,000, thereby resulting in a MSA multiple of 78 basis points of
total loans serviced. The MSA valuation was necessary as a result of
high constant prepayment rates stemming from an increase of mortgage
refinance activity.
THIRD QUARTER FORECAST
"Columbia looks forward to continued loan and deposit growth. This
growth should come from our new Kennewick, Washington branch and our
focus on Central Oregon," stated Christensen. "Earnings should reflect
a steady increase in line with our positive historic trend."
COLUMBIA'S SUBSIDIARY COLUMBIA RIVER BANK RECEIVES HONORS
Columbia Bancorp's primary subsidiary, Columbia River Bank, has
received recognition as a top performing community bank by the
Independent Banker Magazine, June 2003 issue, based on ROA (Return on
Assets) and ROE (Return on Equity). The Seattle Times ranked Columbia
Bancorp as number 8 in the "Welcome to the 12th Annual Northwest 100"
article in their June 6, 2003 publication recognizing publicly held
companies headquartered in the Pacific Northwest. Another article in
the July/August 2003 issue of FSB -- Fortune Small Business Magazine
- -- listed Columbia Bancorp as 70th in the list of America's Fastest
Growing Small Companies. The USBANKER, July 2003 issue of "Annual
Performance Ranking" listed Columbia Bancorp as 18th for banks and
thrifts with assets less than $1 billion, ranked by three-year average
ROE.
"The placement in these rankings reflects the depth of commitment
and dedication by our employees to be a high performing bank," says
Christensen. "The recognition given by the financial industry will
provide the investors the confidence needed to continue investing in
CBBO."
EARNINGS TELECONFERENCE AND WEBCAST
Columbia will conduct a teleconference and Web Cast on Wednesday,
July 23, 2003 at 12:00 noon Pacific Time (3:00 p.m. Eastern Time) when
management, led by Roger Christensen, will discuss the second quarter
2003 results. To participate in the call, the conference number is
888-482-0024. The conference ID number to access the call is 934497.
The live Web Cast can be heard on Columbia Bancorp's Web Site at
www.columbiabancorp.com under the Investor Relations section of
Events/Presentations. This event will be archived on Columbia
Bancorp's Web Site.
There will be a playback of the call available until July 31,
2003. The replay dial-in number is 888-286-8010; the code is 57849141
and will be available two (2) hours after the completion of the
conference call on July 23, 2003.
ABOUT COLUMBIA BANCORP
Columbia Bancorp (www.columbiabancorp.com) is the financial
holding company for Columbia River Bank, which operates 18 branches
located in The Dalles (2), Hood River, Bend (3), Madras, Redmond,
Pendleton, Hermiston, McMinnville (3), Canby and Newberg, Oregon, and
in Goldendale, White Salmon and Kennewick, Washington. To supplement
its community banking services, Columbia River Bank also provides
mortgage-lending services through its Columbia River Bank Mortgage
Group and brokerage services through its affiliation with CRB
Financial Services.
FORWARD LOOKING STATEMENT
Forward-looking statements with respect to the financial
condition, results of operations and the business of Columbia are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those set forth in such statements.
These include, without limitation, the impact of competition and
interest rates on revenues and margins, and other risks and
uncertainties, including statements relating to the year 2003, as may
be detailed from time to time in Columbia's public announcements and
filings with the Securities and Exchange Commission ("SEC").
Forward-looking statements can be identified by the use of
forward-looking terminology, such as "may", "will", "should",
"expect", "anticipate", "estimate", "continue", "plans", "intends", or
other similar terminology. Columbia does not intend to publicly
release any revisions to these forward-looking statements to reflect
events or circumstances after the date of this press release, other
than in its periodic filings with the SEC, or to reflect the
occurrence of unanticipated events.
FINANCIAL HIGHLIGHTS (Unaudited)(In thousands, except per
share data and ratios)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- -----------------
INCOME STATEMENT 2003 2002 2003 2002
- ------------------------------- ---------- -------- ------- -------
Interest income $ 9,583 $ 9,439 $18,979 $18,026
Interest expense 1,776 2,013 3,546 3,796
---------- -------- ------- -------
Net interest income 7,807 7,426 15,433 14,230
Provision for loan losses 1,700 700 2,000 1,100
---------- -------- ------- -------
Net interest income
After provision for loan
losses 6,107 6,726 13,433 13,130
Non-interest income 1,971 2,760 3,971 4,854
Non-interest expense 5,758 5,711 11,346 10,809
Provision for income taxes 849 1,353 2,197 2,572
---------- -------- ------- -------
Net income $ 1,471 $ 2,422 $ 3,861 $ 4,603
========== ======== ======= =======
Earnings per share (1)
Basic $ 0.17 $ 0.27 $ 0.44 $ 0.52
Diluted 0.16 0.26 0.43 0.50
Cumulative dividend per share 0.08 0.08 0.16 0.16
Weighted average shares
outstanding (1)
Basic 8,717 8,917 8,696 8,894
Diluted 9,012 9,184 8,982 9,173
Actual shares outstanding (1) 8,725 8,937 8,725 8,937
BALANCE SHEET June 30, June 30,
2003 2002
- ------------------------------------------ ---------
Total assets $ 579,310 $537,155
Securities 35,176 38,312
Loans held for sale 3,493 10,628
Loans, excluding loans held for
sale (2) 456,863 419,331
Total gross loans (2) 460,356 429,959
Goodwill (3) 7,389 7,389
Deposits 494,793 445,031
Borrowings (4) 28,424 37,445
Equity 53,101 50,164
Book value per share (1) $ 6.09 $ 5.61
(1) Prior figures to the May 1, 2003 10% stock dividend have been
adjusted.
(2) Excludes deferred loan fees and reserve for loan loss.
(3) From the purchase of Valley Community Bancorp.
(4) Includes $4 million trust preferred securities.
ADDITIONAL FINANCIAL (Unaudited)(In thousands, except per
INFORMATION share data and ratios)
NON-PERFORMING ASSETS June 30, June 30,
2003 2002
- ----------------------------- --------- ---------
Delinquent loans on non-
accrual status $ 2,864 $ 1,403
Delinquent loans on accrual
status - 8
Restructured loans 11 110
-------- --------
Total non-performing loans 2,875 1,521
Other real estate owned 36 -
Repossessed other assets - -
-------- --------
Total non-performing assets $ 2,911 $ 1,521
======== ========
Total non-performing assets /
total assets 0.50% 0.28%
Quarter Ended Year to Date
------------------- -------------------
CHANGE IN THE ALLOWANCE FOR June 30, June 30, June 30, June 30,
LOAN LOSSES 2003 2002 2003 2002
- ------------------------------ --------- --------- --------- ---------
Balance at beginning of
period $ 6,398 $ 5,569 $ 6,417 $ 5,312
Provision for loan losses 1,700 700 2,000 1,100
Recoveries 22 102 46 146
Charge offs (1,672) (241) (2,015) (428)
-------- -------- -------- --------
Balance at end of period $ 6,448 $ 6,130 $ 6,448 $ 6,130
======== ======== ======== ========
Loan loss allowance / gross
loans and loans held for sale 1.40% 1.43%
Non-performing loans / loan
loss allowance 44.58% 24.81%
Quarter Ended Year to Date
------------------- -------------------
OPERATING PERFORMANCE June 30, June 30, June 30, June 30,
2003 2002 2003 2002
- ----------------------------- --------- --------- --------- ---------
Average interest-earning
assets $516,294 $467,602 $506,929 $452,080
Average gross loans & loans
held for sale 456,207 415,175 448,924 402,373
Average assets 564,533 515,409 555,018 499,211
Average interest-bearing
liabilities 374,269 353,967 370,986 343,280
Average interest-bearing
deposits 345,565 318,444 341,563 305,219
Average deposits 480,467 425,980 470,029 408,247
Total average liabilities 511,583 465,607 502,941 450,673
Average equity 52,950 49,803 52,076 48,539
Quarter Ended Year to Date
------------------- -------------------
RATIOS June 30, June 30, June 30, June 30,
2003 2002 2003 2002
- ----------------------------- --------- --------- --------- ---------
Interest rate yield on
interest-earning assets (TE) 7.53% 8.16% 7.64% 8.07%
Interest rate expense on
interest-bearing liabilities 1.91% 2.27% 1.93% 2.21%
Interest rate spread 5.62% 5.89% 5.71% 5.86%
Net interest margin (TE) 6.15% 6.44% 6.22% 6.39%
Efficiency ratio (1) 58.89% 56.07% 58.47% 56.64%
Return on average assets 1.05% 1.88% 1.40% 1.86%
Return on average equity 11.14% 19.45% 14.95% 18.96%
Average equity / average
assets 9.38% 9.66% 9.38% 9.72%
(1) Non-interest expense / revenue
FINANCIAL (Unaudited)
INFORMATION
UPDATE
Quarter Ended
------------------------------------
INCOME June 30, June 30,
STATEMENT 2003 2002
ITEMS
- --------------------------- ------------
Service charges
on deposits 1,094,500 1,170,184
Credit card
discounts &
fees 100,452 99,683
Financial
services 159,022 167,525
Mortgage
servicing, net (213,238) 341,411
Gain on sale of
mortgage loans 3,354 (100,278)
Mortgage loan
origination
income 687,781 729,980
Other income 138,519 351,012
Gain/loss
from
"called"
bond 11,552 1,850
Gain/loss
from sale of
securities - 2,300
------------ -----------------------
Total non-
interest
income 1,970,390 2,759,517
------------ ------------
Compensation &
benefits 3,252,159 3,391,604
Occupancy 566,247 497,824
Data processing 71,145 108,122
Other expenses 1,868,224 1,713,093
------------ ------------
Total non-
interest
expense 5,757,775 5,710,643
------------ ------------
BALANCE SHEET June 30, June 30,
ITEMS 2003 2002
- --------------------------- ------------
Commercial
loans 78,913,209 75,747,279
Agricultural
loans 67,762,227 63,285,412
Real estate
loans 190,329,113 163,429,859
Real estate
loans -
construction 93,998,606 90,017,310
Loans held for
sale 3,492,679 10,628,035
Consumer loans 19,820,113 21,042,215
Other loans 6,039,831 5,809,218
------------ ------------
Total loans,
gross (1) 460,355,778 429,959,328
------------ ------------
Quarter Ended
------------------------------------
MORTGAGE June 30, June 30,
SERVICING 2003 2002
- --------------------------- ------------
Mortgage
service asset,
net 3,732,008 5,716,039
Mortgage loans
serviced ($) 481,276,361 481,482,213
Mortgage loans
serviced
number 4,213 4,012
Mortgage loans
produced 492 396
Mortgage
service asset
multiple 0.78% 1.19%
MORTGAGE
SERVICING
ASSET
RECONCILIATION 1998 1999 2000
- --------------------------------------------------
Mortgage
servicing
asset,
beginning - 646,546 1,482,374
Add service
retain
premiums 664,665 932,724 1,437,145
Deduct MSA
amortization (18,119) (96,896) (159,832)
Deduct MSA
valuation
write-downs - - -
------------ ---------- ------------
Mortgage
servicing
asset, ending 646,546 1,482,374 2,759,687
------------ ---------- ------------
FINANCIAL
INFORMATION
UPDATE
Year to Date
----------------------------------------------
INCOME June 30, June 30,
STATEMENT 2003 2002
ITEMS
- --------------- ----------- -----------
Service charges
on deposits 2,066,492 2,010,478
Credit card
discounts &
fees 190,714 185,903
Financial
services 251,841 319,092
Mortgage
servicing, net (276,870) 68,820
Gain on sale of
mortgage loans (17,157) (74,264)
Mortgage loan
origination
income 1,274,615 1,356,654
Other income 481,010 986,823
Gain/loss
from
"called"
bond 4,884 3,500
Gain/loss
from sale of
securities - 196,895
----------------------------------------------
Total non-
interest
income 3,970,645 4,853,506
----------- -----------
Compensation &
benefits 6,682,329 6,397,516
Occupancy 1,121,171 966,550
Data processing 151,328 190,371
Other expenses 3,391,402 3,255,069
----------- -----------
Total non-
interest
expense 11,346,230 10,809,506
----------- -----------
MORTGAGE
SERVICING
ASSET
RECONCILIATION 2001 2002 Q1 2003 Q2 2003
- ----------------------------------------------------------------------
Mortgage
servicing
asset,
beginning 2,759,687 6,196,802 4,614,392 4,249,567
Add service
retain
premiums 4,700,197 2,227,511 561,091 625,354
Deduct MSA
amortization (345,353) (1,028,810) (425,916) (567,913)
Deduct MSA
valuation
write-downs (917,729) (2,781,111) (500,000) (575,000)
-------------------------------------------------------
Mortgage
servicing
asset, ending 6,196,802 4,614,392 4,249,567 3,732,008
-------------------------------------------------------
(1) Excludes deferred loan fees and reserve for loan loss
CONTACT: Columbia Bancorp
Roger L. Christensen, 541-298-6633
Greg B. Spear, 541-298-6612