Exhibit 99.1
Columbia Bancorp Reports Second Quarter 2005 ROE in Excess of 19%,
Profits Increase 49% with Strong Deposit and Loan Growth
THE DALLES, Ore.--(BUSINESS WIRE)--July 27, 2005--Columbia Bancorp
(Nasdaq:CBBO), the financial holding company for Columbia River Bank,
today reported excellent second quarter profitability, with continued
solid loan quality and significant deposit growth. Second quarter net
income grew 49% to $3.4 million, or $0.38 per diluted share, compared
to $2.3 million, or $0.26 per diluted share, in the same quarter a
year ago. In the first half of 2005, net income increased 56% to $6.8
million, or $0.74 per diluted share, compared to $4.3 million, or
$0.48 per diluted share in the first half of 2004.
The earnings for the second quarter 2005 include a gain of
$561,000 from the sale of the mortgage servicing asset (MSA) and the
first quarter of 2005 includes the collection of $336,000 of interest
income from the previous year. To illustrate the impact on earnings
from these two non-recurring items, the first six months of 2005
excluding the one-time effects from the sale of the MSA and collection
of interest from 2004, as described above, the net income would have
been $6.2 million, or $0.68 per diluted share an increase of 43%,
compared to the first six months of 2004. Net income for the second
quarter of 2005, would have been $3.1 million, or $0.34 per diluted
common share, representing an increase of 34% over the second quarter
last year.
"We were delighted to again earn a place on US Banker Magazine's
200 Best Performing Banks, coming in 12th based on our three-year
average ROE of 18.18%. Our history of consistent loan and deposit
growth combined with solid profitability have been recognized in this
publication and are also reflected in our second quarter results,"
said Roger Christensen, President and Chief Executive Officer. "From
deposit growth to earnings per share to franchise development, we
continue to build on the solid results established in prior periods.
The sale of the MSA will further add to our ability to generate
consistent results, and we remain optimistic about our long-term
outlook."
"The expansion of our branch network is part of our strategic plan
to build market share and grow the franchise, which contributes to our
ability to grow and deliver value to our shareholders. Additionally,
we have been able to hire a number of the leading banking
professionals in the communities we serve who wholeheartedly embrace
our values and vision. We recently hired Julie Killian, a highly
experienced loan officer with deep roots in the Tri-Cities market,
(Pasco, Richland and Kennewick, Washington). Killian has gotten off to
a fast start as the new Senior Vice President and Business Banking
Team Leader for our Tri-Cities Business Banking Team, and we are
enthusiastic about having her on our team. Acquiring experienced
people like Killian is the cornerstone of our ability to attract new
customers and build synergy in the markets we serve in order to meet
our growth strategies. We are continuing to successfully recruit
experienced bankers for all of our markets and are impressed with the
caliber and number of candidates interested in exploring a future with
Columbia River Bank," stated Shane Correa, Chief Banking Officer.
FINANCIAL HIGHLIGHTS
-- 2Q05 Return on Equity (ROE) of 19.51%, Year-to-date ROE is
19.69%
-- 2Q05 Return on Assets (ROA) of 1.86%, Year-to-date ROA is
1.85%
-- 2Q05 Net Interest Margin (tax equivalent) (NIM) of 5.90%,
Year-to-date NIM is 5.86%
-- 2Q05 Efficiency Ratio of 54.92%, Year-to-date Efficiency Ratio
is 54.15%
INCOME STATEMENT PERFORMANCE
Revenue (net interest income plus non-interest income) for the
second quarter increased 22% to $13.1 million, compared to $10.7
million in the second quarter a year ago. Year-to-date revenues
increased 22% to $25.0 million which included the $897,000 of
non-recurring income from $20.4 million in the first half of 2004. The
first half of 2005 includes the effects of non-recurring items as
described above. Net interest income before provision for loan losses
grew 14% to $10.1 million for the second quarter and 17% to $19.7
million in the first six months of 2005, compared to $8.8 million and
$16.9 million in the respective periods of 2004.
"We are pleased with the improvements in our credit quality and
are benefiting from the investment and energies put forth to optimize
the credit process throughout the organization," said Britt Thomas,
Chief Credit Officer. The provision for loan losses totaled $650,000
in the second quarter and $850,000 year to date, compared to $1.4
million and $2.1 million in the respective periods of 2004.
The tax equivalent net interest margin was 5.90% for the second
quarter and 5.86% for the first half of 2005 as compared to 6.19% and
6.20% in the like periods of 2004. "The net interest margin has
stabilized as a result of loans and deposits repricing near the
short-end of the yield curve," stated Greg Spear, Chief Financial
Officer. "Our deposit pricing strategy is structured to ensure the
attraction and retention of customers and to strengthen key
relationships in the communities we serve. To remain competitive, we
employ a blend of attractive rates and exceptional service balanced by
our customer and shareholder needs."
Non-interest income for the second quarter totaled $3.0 million
compared to $1.9 million in the second quarter of 2004 and totaled
$5.3 million for the first six months of 2005 compared to $3.5 million
in the first half of 2004. Sale of the mortgage servicing asset was
completed in the second quarter, contributing $561,000 to non-interest
income and $0.04 to diluted earnings per share. "While we are no
longer operating a mortgage servicing center, our mortgage
originations continue to generate fee income from both mortgage
originations and loan sales into the secondary market," said Craig
Ortega, Chief Operating Officer. "We believe we gain the best of all
worlds in originating and selling mortgage loans, because our
customers receive superior service during the lending process and the
bank earns fee income without exposing the shareholders to volatility
from the valuation of the mortgage servicing asset."
Overhead expenses increased in the current quarter reflecting
continued growth in the branch network. "Additional staff for new
branches opened during the year, and strong profitability in the first
half of 2005 prompted increased accruals for incentive compensation
company-wide," said Jim McCall, Chief Administrative Officer. "Our
incentive compensation program is specifically designed to reward
employees for generating exceptional returns, which should translate
to improved shareholder value." For the second quarter of 2005,
non-interest expense was $7.0 million compared to $5.7 million in the
second quarter of 2004. For the first six months of 2005, non-interest
expense was $13.5 million compared to $11.5 million in the first half
of 2004.
The efficiency ratio for the second quarter of 2005 was 54.92% as
compared to 52.96% for the same period a year ago. For the first six
months of 2005, the efficiency ratio improved to 54.15% compared to
56.49% for the same period last year. The efficiency ratio is an
important measure of productivity in the banking industry, because it
indicates the percentage of total revenue spent on overhead expenses,
which include personnel, technology, costs associated with compliance,
new branches, training, investor relations, and operational costs.
BALANCE SHEET PERFORMANCE
The loan portfolio grew 7% to $616.2 million at June 30, 2005,
compared to $559.2 million at June 30, 2004. "Loan demand continues to
be strong, particularly for commercial real estate and agriculture
loans," said Correa. "We see a number of factors driving loan demand
including continued improving economic growth in our markets and
stronger demand for financing in the agricultural sectors we serve."
Total assets grew 17% to $778.9 million at June 30, 2005, compared
to $666.8 million a year earlier. Shareholders' equity increased 18%
to $71.8 million, or $8.05 per outstanding share at June 30, 2005,
compared to $60.7 million or $6.90 per share at June 30, 2004.
Tangible book value per common share at June 30, 2005, was $7.22
compared to $5.75 at June 30, 2004.
Total deposits increased 22% to $668.9 million at June 30, 2005,
compared $548.3 million at June 30, 2004. "We have worked hard to grow
deposits and have successfully increased them in every category," said
Christensen. "We are particularly pleased to see core deposits rise to
73% of total deposits, which increased 24% over the past year."
ASSET QUALITY
Asset quality remained excellent at the end of the second quarter
with non-performing assets of $394,000, or 0.05% of total assets
compared to $3.1 million or 0.46% of total assets a year ago. Net
charge-offs in the second quarter totaled $218,000, or 0.03% of gross
loans, compared to $326,000, or 0.06% of gross loans in the same
quarter of 2004. For the first six months of the year, net charge-offs
were $353,000, or 0.06% of gross loans, compared to $762,000, or 0.13%
of gross loans a year ago.
"Asset quality on virtually every measure is strong. While these
results are backward-looking by nature, we believe our loan portfolio
will continue to perform well in the coming year because of the
investments made in training, credit oversight and the addition of a
staff appraiser," said Thomas. Allowance for loan loss was $8.7
million, or 1.39% of gross loans, at June 30, 2005, compared to $7.9
million, or 1.40% of gross loans, at June 30, 2004.
LOOKING FORWARD
"The combined total of the previous four quarters' diluted
earnings per share is $1.45. However, when the non-recurring revenues
are excluded on a pro-forma basis for the past four quarters, then
diluted earnings per share is at $1.34" stated Spear. "We do not
expect further non-recurring revenues in the second half of 2005. As a
result, the efficiency ratio is likely to trend slightly higher, but
remain below the Federal Financial Institutions Examination Council's
(FFIEC) peer group. The FFIEC's national peer group is comprised of
financial institutions between $500 million and $1 billion located in
non-metropolitan areas."
EARNINGS TELECONFERENCE AND WEBCAST
Columbia will conduct a Teleconference and Webcast on Wednesday,
July 27, 2005, at 12:00 noon Pacific Time (3:00 p.m. Eastern Time)
when management, led by Roger Christensen, will discuss 2005's second
quarter and year-to-date results. To participate in the call dial
1-888-339-2688 and the conference ID access is 91534232. The live
Webcast can be heard by going to Columbia Bancorp's Web Site,
www.columbiabancorp.com, and clicking on Presentations/Webcast under
the Investor Relations section.
The call replay will be available starting two hours after the
completion of the live call, until August 2, 2005. To listen to the
replay dial 888-286-8010 and use access code 60532216. In addition,
the Webcast will be archived on Columbia Bancorp's Website.
ABOUT COLUMBIA BANCORP
Columbia Bancorp (www.columbiabancorp.com) is the financial
holding company for Columbia River Bank, which operates 20 branches
located in The Dalles (2), Hood River, Bend (4), Madras, Redmond (2),
Pendleton, Hermiston, McMinnville (3), Canby and Newberg, Oregon, and
in Goldendale, White Salmon and Kennewick, Washington. Columbia River
Bank also provides mortgage-lending services through Columbia River
Bank Mortgage Team and brokerage services through CRB Financial
Services Team.
FORWARD LOOKING STATEMENTS
This press release contains various forward-looking statements
about plans and anticipated results of operations and financial
condition relating to Columbia Bancorp. These statements include
statements about Management's present plans and intentions about our
strategy, growth, and deployment of resources, and about Management's
expectations for future financial performance. Readers can sometimes
identify forward-looking statements by the use of prospective language
and context, including words like "may", "will", "should", "expect",
"anticipate", "estimate", "continue", "plans", "intends", or other
similar terminology. Because forward-looking statements are, in part,
an attempt to project future events and explain Management's current
plans, they are subject to various risks and uncertainties that could
cause our actions and our financial and operational results to differ
materially from those set forth in such statements. These risks and
uncertainties include, without limitation, our ability to estimate
accurately the value of certain of our intangible assets, economic and
other factors that affect the collectibility of our loans, the impact
of competition and fluctuations in market interest rates on Columbia's
revenues and margins, Management's ability to open and generate growth
from new branches, and other risks and uncertainties that we have in
the past, or that we may from time to time in the future, detail in
our filings with the Securities and Exchange Commission ("SEC").
Information presented in this report is accurate as of the date the
report was filed with the SEC, and we cannot undertake to update our
forward-looking statements or the factors that may cause us to deviate
from them, except as required by law.
INCOME STATEMENT
(Unaudited)
(In thousands, except Three Months
per share data and Ended % Six Months Ended %
ratios) June 30, Change June 30, Change
----------------- ------ ----------------- ------
2005 2004 2005 2004
------- ------- ------- -------
Interest income $12,715 $10,351 23% $24,888 $19,958 25%
Interest expense 2,643 1,554 70% 5,154 3,021 71%
------- ------- ------- -------
Net interest income
before provision for
loan losses 10,072 8,797 14% 19,734 16,937 17%
Provision for loan
losses 650 1,390 -53% 850 2,090 -59%
------- ------- ------- -------
Net interest income
after provision
for loan losses 9,422 7,407 27% 18,884 14,847 27%
Non-interest income:
Service charges and
fees 1,190 1,192 0% 2,363 2,247 5%
Credit card
discounts and fees 117 114 3% 230 219 5%
CRB Financial
Services Team
revenues 156 166 -6% 300 302 -1%
Mortgage servicing,
net 83 (195) -143% 172 (434) -140%
Gain on sale of
mortgage loans 30 8 275% 75 80 -6%
Mortgage loan
origination income 391 293 33% 717 511 40%
Gain/loss from sale
of assets (39) - - (38) - -
Gain/loss from sale
or "call" of
securities (1) - - (1) - -
Gain from sale of
MSA 561 - - 561 - -
Other non-interest
income 496 339 46% 908 573 58%
------- ------- ------- -------
Total non-
interest income 2,984 1,917 56% 5,287 3,498 51%
Non-interest expense:
Salaries and
employee benefits 4,044 3,108 30% 7,731 6,308 23%
Occupancy expense 763 602 27% 1,560 1,198 30%
Data processing 123 141 -13% 223 255 -13%
Other non-interest
expense 2,047 1,823 12% 4,034 3,784 7%
------- ------- ------- -------
Total non-
interest expense 6,977 5,674 23% 13,548 11,545 17%
------- ------- ------- -------
Income before
provision for income
taxes 5,429 3,650 49% 10,623 6,800 56%
Provision for income
taxes 1,987 1,336 49% 3,868 2,469 57%
------- ------- ------- -------
Net income $ 3,442 $ 2,314 49% $ 6,755 $ 4,331 56%
======= ======= ======= =======
Earnings per common
share
Basic $ 0.39 $ 0.26 49% $ 0.76 $ 0.49 55%
Diluted 0.38 0.26 45% 0.74 0.48 54%
Cumulative dividend
per common share 0.09 0.09 0% 0.18 0.18 0%
Weighted average
shares outstanding
Basic 8,905 8,787 8,887 8,778
Diluted 9,134 9,005 9,111 9,029
Actual shares
outstanding 8,922 8,791 8,922 8,791
Quarter Ended Year to Date
----------------- -----------------
RATIOS June 30, June 30, June 30, June 30,
2005 2004 2005 2004
-------- -------- -------- --------
Interest rate yield
on interest-earning
assets, tax
equivalent 7.44% 7.28% 7.38% 7.30%
Interest rate expense
on interest-bearing
liabilities 2.21% 1.54% 2.15% 1.55%
Interest rate spread,
tax equivalent 5.23% 5.74% 5.22% 5.74%
Net interest margin,
tax equivalent 5.90% 6.19% 5.86% 6.20%
Efficiency ratio (1) 54.92% 52.96% 54.15% 56.49%
Return on average
assets 1.86% 1.48% 1.85% 1.43%
Return on average
equity 19.51% 15.50% 19.69% 14.66%
Average equity /
average assets 9.54% 9.52% 9.39% 9.78%
(1) Non-interest expense divided by net interest income and non-
interest income.
BALANCE SHEET
(Unaudited)
(In thousands, except per share
data) Year over Year to
ASSETS June 30, June 30, Year Dec. 31, Date
2005 2004 % Change 2004 % Change
--------- --------- --------- -------- ---------
Cash and cash
equivalents $87,655 $38,667 127% $57,979 51%
Investment securities 39,406 30,590 29% 45,398 -13%
Loans:
Commercial loans 97,956 95,287 3% 93,618 5%
Agricultural loans 88,506 82,362 7% 79,224 12%
Real estate loans 280,880 244,569 15% 247,045 14%
Real estate loans -
construction 130,007 121,836 7% 139,415 -7%
Consumer loans 13,576 16,256 -16% 14,386 -6%
Loans held for sale 7,479 1,873 299% 2,517 197%
Other loans 8,045 6,797 18% 7,660 5%
--------- --------- ---------
Total gross loans 626,449 568,980 10% 583,865 7%
Unearned loan fees (1,542) (1,856) -17% (1,556) -1%
Allowance for loan
losses (8,681) (7,940) 9% (8,184) 6%
--------- --------- ---------
Net loans 616,226 559,184 10% 574,125 7%
Property and
equipment, net 15,146 14,149 7% 15,223 -1%
Goodwill 7,389 7,389 0% 7,389 0%
Mortgage servicing
asset, net - 2,724 -100% 2,163 -100%
Other assets 13,116 14,086 -7% 13,096 0%
--------- --------- ---------
Total assets $778,938 $666,789 17% $715,373 9%
========= ========= =========
LIABILITIES
Deposits:
Non-interest bearing
demand deposits $205,378 $174,516 18% $172,422 19%
Interest bearing
demand deposits 245,371 186,178 32% 211,240 16%
Savings accounts 39,448 36,027 9% 35,926 10%
Time certificates 178,693 151,582 18% 187,356 -5%
--------- --------- ---------
Total deposits 668,890 548,303 22% 606,944 10%
Borrowings 32,040 54,446 -41% 39,014 -18%
Other liabilities 6,171 3,360 84% 3,538 74%
--------- --------- ---------
Total
liabilities 707,101 606,109 17% 649,496 9%
Shareholders' equity 71,837 60,680 18% 65,877 9%
--------- --------- ---------
Total
liabilities
and
shareholders'
equity $778,938 $666,789 17% $715,373 9%
========= ========= =========
Book value per common
share $8.05 $6.90 17% $7.45 8%
Tangible book value
per common share (1) $7.22 $5.75 26% $6.37 13%
(1) Total common equity, less goodwill and other intangible assets,
divided by actual shares outstanding.
ADDITIONAL FINANCIAL INFORMATION
(Unaudited)
(In thousands, except quantities and ratios)
NON-PERFORMING ASSETS June 30, June 30,
2005 2004
--------- ---------
Delinquent loans on non-accrual
status $ 347 $ 1,615
Delinquent loans on accrual
status - -
Restructured loans 47 9
-------- --------
Total non-performing loans 394 1,624
Other real estate owned - 1,436
-------- --------
Total non-performing assets $ 394 $ 3,060
======== ========
Total non-performing assets /
total assets 0.05% 0.46%
Quarter Ended Year to Date
------------------- -------------------
ALLOWANCE FOR LOAN LOSSES June 30, June 30, June 30, June 30,
2005 2004 2005 2004
--------- --------- --------- ---------
Balance at beginning of period $ 8,249 $ 6,876 $ 8,184 $ 6,612
Provision for loan losses 650 1,390 850 2,090
Recoveries 91 27 108 36
Charge offs (309) (353) (461) (798)
-------- -------- -------- --------
Balance at end of period $ 8,681 $ 7,940 $ 8,681 $ 7,940
======== ======== ======== ========
Allowance for loan losses / gross loans and loans
held for sale 1.39% 1.40%
Non-performing loans / allowance for loan losses 4.54% 20.45%
Quarter Ended Year to Date
------------------- -------------------
OPERATING PERFORMANCE June 30, June 30, June 30, June 30,
2005 2004 2005 2004
--------- --------- --------- ---------
Average interest-earning
assets $689,687 $576,982 $684,698 $554,942
Average gross loans and loans
held for sale 607,280 536,813 592,925 509,325
Average assets 742,166 631,079 736,625 607,354
Average interest-bearing
liabilities 479,310 405,816 482,824 391,087
Average interest-bearing
deposits 444,277 359,660 446,237 354,030
Average deposits 634,212 521,883 628,368 507,569
Average liabilities 671,386 571,022 667,460 547,932
Average equity 70,781 60,057 69,164 59,422
Quarter Ended
-------------------
MORTGAGE SERVICING(1) June 30, June 30,
2005 2004
--------- ---------
Mortgage servicing asset, net $ - $ 2,724
Mortgage loans serviced $ - $375,685
Mortgage loans serviced number
(quantity) - 3,245
Mortgage loans produced
(quantity) 230 157
Mortgage servicing asset
multiple - 0.73%
(1) MSA effective sale date - April 29, 2005.
MORTGAGE SERVICING ASSET Q1 2005 Year End Year End Year End
RECONCILIATION 2004 2003 2002
--------- -----------------------------
Mortgage servicing asset (MSA),
beginning $ 2,163 $ 3,691 $ 4,614 $ 6,197
Add servicing retained premiums - 93 1,935 2,227
Deduct MSA amortization (117) (1,621) (2,000) (1,029)
Deduct MSA valuation
adjustments - - (858) (2,781)
-------- -------- -------- --------
Mortgage servicing asset,
ending $ 2,046 $ 2,163 $ 3,691 $ 4,614
======== ======== ======== ========
CONTACT: Columbia Bancorp
Roger L. Christensen, 541/298-6633
rchristensen@columbiabancorp.com
or
Greg B. Spear, 541/298-6612
gspear@columbiabancorp.com