Columbia Bancorp Generates Strong Loan Growth and Revenue.THE DALLES dalles pl.n. The rapids of a river that runs between the steep precipices of a gorge or narrow valley. [French, pl. of dalle, gutter, from Old French, from Old Norse dæla.] , Ore. -- Columbia Columbia, cities, United States Columbia (kəlŭm`bēə). 1 City (1990 pop. 75,883), Howard co., central Md., between Washington, D.C., and Baltimore. Bancorp (Nasdaq:CBBO), the financial holding company for Columbia River Columbia River River, southwestern Canada and northwestern U.S. Rising in the Canadian Rockies, it flows through Washington state, entering the Pacific Ocean at Astoria, Ore.; it has a total length of 1,240 mi (2,000 km). Bank, today reported strong second quarter profitability, solid loan quality and significant loan growth. Second quarter net income was $2.3 million, or $0.26 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $1.5 million, or $0.16 per diluted share, in the second quarter of 2003. In the first half of 2004, net income increased 12% to $4.3 million, or $0.48 per diluted share, compared to $3.9 million, or $0.43 per diluted share in the first half of 2003. "One of the factors driving our business this year is the changing interest rate environment. The quarter point hike in Fed Funds fed funds See federal funds. rates implemented by the Federal Reserve Open Market Committee in June June: see month. was a neutral event and long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. is a move in the right direction," said Roger Christensen Christensen may refer to:
adj. Of, for, or involving a short period of time in the near future. demand for commercial loans while reducing demand for mortgages and slowing mortgage refinancing Refinancing An extension and/or increase in amount of existing debt. ." FINANCIAL HIGHLIGHTS --2Q04 Return on Equity (ROE A fictitious surname used for an unknown or anonymous person or for a hypothetical person in an illustration. A lawsuit is generally named for the persons who are parties to it. ) of 15.50%, Year-to-Date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. ROE is 14.66% --2Q04 Return on Assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). (ROA ROA See: Return on assets ROA See: Right of accumulation ROA See return on assets (ROA). ) of 1.48%, Year-to-Date ROA is 1.43% --2Q04 Net Interest Margin (tax equivalent) (NIM nim 1 tr. & intr.v. nimmed, nim·ming, nims Archaic To steal; pilfer. [Middle English nimen, to take, from Old English niman; see ) of 6.19%, Year-to-Date NIM is 6.20% --2Q04 Efficiency Ratio of 52.96%, Year-to-Date Efficiency Ratio is 56.49% INCOME STATEMENT PERFORMANCE Revenue (net interest income plus non-interest income) for the second quarter increased 10% to $10.7 million, compared to $9.8 million in the second quarter a year ago. Year-to-date revenues increased 5% to $20.4 million from $19.4 million in the first half of 2003. Net interest income before provision for loan losses grew 13% to $8.8 million for the second quarter and 10% to $16.9 million in the first six months of 2004, compared to $7.8 million in the second quarter and $15.4 million in the first half of 2003. The provision for loan losses totaled $1.4 million in the second quarter and $2.1 million year-to-date, reflecting strong growth in the loan portfolio and maintaining the ratio of reserves to total loans at an appropriate level. Net interest income after provision for loan losses increased 21% to $7.4 million for the second quarter compared to $6.1 million for the second quarter a year ago. Year-to-date net interest income after provision for loan losses increased 11% to $14.8 million from $13.4 million for the first six months of 2003. Net interest margin was 6.19% for the second quarter and 6.20% for the first half of 2004, compared to 6.15% and 6.22% in the like periods of 2003. "Growth in fee income from checking accounts, financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. and credit cards in the second quarter continued to rise over the same period last year," said Greg GREG Great Egg Harbor National Scenic and Recreational River (US National Park Service) Spear, Chief Financial Officer. Income from mortgage originations was down by $395,000 in the second quarter and $765,000 in the first half compared to year ago periods, resulting in a drop in non-interest income of 3% in the second quarter and 12% in the first half of 2004. Non-interest income totaled $1.9 million compared to $2.0 million in the second quarter of 2003 and was $3.5 million in the first six months of 2004 compared to $4.0 million in the first half of 2003. In the second quarter a year ago, earnings were lowered by a $575,000 write down of the mortgage servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. asset due to the impact of declining interest rates on the value of the asset. Overhead expenses were relatively stable during the second quarter with lower compensation expenses offsetting higher occupancy and data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a fees. For the second quarter of 2004, non-interest expense was $5.7 million compared to $5.8 million in the second quarter of 2003. For the first six months of 2004, non-interest expense was $11.5 million compared to $11.3 million in the first half of 2003. "Operating efficiencies improved during the second quarter with an increased contribution to profitability from our retail branch activities," said Jim McCall, Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. . For the second quarter, the efficiency ratio improved to 52.96% compared to 58.89% for the second quarter last year. For the first six months of 2004, the efficiency ratio was 56.49% compared to 58.47% for the first half of 2003. The efficiency ratio indicates how much of total revenues is spent on overhead expenses including technology, new branches, training, investor relations Investor relations The process by which the corporation communicates with its investors. , and operational costs, and is an important measure of productivity in the banking industry. BALANCE SHEET PERFORMANCE The loan portfolio, net of loans held for sale, grew 24% to $567.1 million at June 30, 2004, compared to $456.9 million at June 30, 2003. "Loan demand continues to be extraordinary, with strong demand in all of our markets, particularly for commercial real estate secured and commercial loans," said Craig Craig , Edward Gordon 1872-1966. British theatrical producer, director, and designer whose innovative productions and simplified stage designs influenced modern theater. Ortega, Head of Community Banking. "We see a number of factors driving loan demand including a desire by borrowers to secure loans ahead of further interest rate increases, and the high level of services our employees offer. This high level of demand in the market allows us to be selective in our lending choices." Total assets grew 15% to $666.8 million at June 30, 2004, compared to $579.3 million a year earlier. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. increased 14% to $60.7 million, or $6.90 per share at June 30, 2004, compared to $53.1 million, or $6.09 per share at June 30, 2003. Tangible book value per share at June 30, 2004, was $5.75 compared to $4.81 at June 30, 2003. Total deposits increased 11% to $548.3 million at June 30, 2004, compared $494.8 million at June 30, 2003. "Deposit growth will be a priority for the remainder of this year and will be the primary factor in supporting further loan growth. We are pursuing two strategies at this time -- attracting and growing retail deposits and ensuring sufficient capital for future growth," said Christensen. ASSET QUALITY Asset quality remained satisfactory at the end of the second quarter with non-performing assets of $3.1 million, or 0.46% of total assets, compared to $2.9 million, or 0.50% of total assets at June 30, 2003. Net charge-offs in the second quarter totaled $326,000, or 0.06% of gross loans, compared to $1.7 million, or 0.36% of gross loans at June 30, 2003. For the first six months of the year, net charge-offs were $762,000, or 0.13% of gross loans, compared to $2.0 million, or 0.43% of gross loans a year ago. "We diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d work to balance asset quality with the borrowing needs of our customers. The current performance of our portfolio remains well-above the FDIC's national peer group for banks with assets between $500 million to $1 billion as of March 31, 2004," said Britt britt n. Variant of brit. Noun 1. britt - the young of a herring or sprat or similar fish brit young fish - a fish that is young 2. Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs , Chief Credit Officer. Allowance for loan loss was $7.9 million or 1.40% of gross loans, including loans held for sale, at June 30, 2004, as compared to $6.6 million or 1.40% at December December: see month. 31, 2003 and $6.4 million, or 1.40% of gross loans at June 30, 2003. LOOKING FORWARD "The sale of a parcel of land located near our headquarters in The Dalles, Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. , remains on track for closing this year. If the sale is consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. , the expected gain The expected gain (or expected return) is the weighted-average most likely outcome in gambling, probability theory, economics or finance. Discrete scenarios In gambling and probability theory, there is usually a discrete set of possible outcomes. from the sale of this property is approximately $.03 to $.05 per diluted share," Ortega noted. "We are still in the process of completing the purchase of a piece of land from the City of Pasco, Washington Pasco (IPA: [ˈpæs ko]) is a city located in Franklin County, in the state of Washington, USA. Pasco is the county seat of Franklin CountyGR6. , and plan to apply for a branch application. Our new Redmond, Oregon Redmond is a city in Deschutes County, Oregon, United States. It is named for Frank T. Redmond, who settled near the present site of the town in 1905. It is part of the Bend, Oregon Metropolitan Statistical Area. Redmond's 2006 population is 23,500. , branch opened in May, and our fourth branch in Bend, Oregon Bend is a city in Deschutes County, Oregon, United States. The name Bend was derived from "Farewell Bend," the designation used by early pioneers to refer to the location along the Deschutes River where the town eventually was platted, one of the few fordable points along the remains on track to open during the third quarter of 2004." EARNINGS TELECONFERENCE AND WEBCAST Columbia will conduct a Teleconference and Webcast on Wednesday Wednesday: see week. , July July: see month. 28, 2004, at 12:00 noon Pacific Time (3:00 p.m. Eastern Time) when management, led by Roger Christensen, will discuss 2004's second quarter and year-to-date results. To participate in the call dial 888-339-2688, and use conference ID 85424140. 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, 2004. To listen to the replay dial 888-286-8010 and use access code 67243393. 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 19 branches located in The Dalles (2), Hood River The Hood River is a tributary of the Columbia River in northwestern Oregon in the United States. Approximately 25 mi (40 km) long from its mouth to its farthest headwaters on the East Fork, the river descends from wilderness areas in the Cascade Range on Mount Hood and flows , Bend (3), Madras Madras. 1 State and former province, India: see Tamil Nadu. 2 City, India: see Chennai. , Redmond Redmond, city (1990 pop. 35,800), King co., W Wash., a suburb of Seattle, on Lake Sammamish; inc. 1912. Its economy centers around computer software (Microsoft Corp. (2), Pendleton Pendleton, city (1990 pop. 15,126), seat of Umatilla co., NE Oreg., on the Umatilla River, in the foothills of the Blue Mts.; founded 1869 on the old Oregon Trail, inc. 1889. , Hermiston, McMinnville (3), Canby and Newberg, Oregon Newberg is a city in Yamhill County, Oregon, United States. A tradition holds that this town was named by its first postmaster, Sebastian Brutscher, for his former hometown of Neuberg in Germany. One of the current streets, Brutscher Street, is named after him. , and in Goldendale, White Salmon and Kennewick, Washington Kennewick is a city in Benton County in southeastern Washington. It is the most populous of the three cities collectively referred to as the Tri-Cities (the others being Pasco and Richland). . Columbia River Bank also provides mortgage-lending services through Columbia River Bank Mortgage Team and brokerage services through CRB CRB See: Commodity Research Bureau. Financial Services Team. The company was ranked as the nation's 12th best performing bank, based on its three-year return on equity ending December 2003, by U.S. Banker magazine in the July 2004 edition. FORWARD LOOKING STATEMENTS Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. about the financial condition, results of operations, plans and business of Columbia are subject to various risks and uncertainties that could cause actual results to differ materially from those set forth in this release. These include, without limitation, changes in the overall economic condition and interest rate markets that would impact our interest rate margins and our operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. ; our ability accurately to assess the value of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. and to monitor loan quality and loan loss reserve adequacy; the impact of competition on revenues and margins and on our expansion strategy, Columbia's ability to open and generate growth from new branches, achieve resolution on non-performing assets, and other risks and uncertainties, including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the year 2004, some of which are described from time to time in our public announcements and filings with the Securities and Exchange Commission ("SEC"). Some 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. Forward-looking statements offered in this release are accurate only as of the date released, and we do not intend to update these forward-looking statements to reflect subsequent events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or .
FINANCIAL HIGHLIGHTS
(Unaudited)
(In thousands, except per share data and ratios)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ------------------
INCOME STATEMENT 2004 2003 2004 2003
---------------------------- -------- -------- -------- -------
Interest income $ 10,351 $ 9,583 $ 19,958 $18,979
Interest expense 1,554 1,776 3,021 3,546
-------- -------- -------- -------
Net interest income 8,797 7,807 16,937 15,433
Provision for loan losses 1,390 1,700 2,090 2,000
-------- -------- -------- -------
Net interest income
after provision for loan
losses 7,407 6,107 14,847 13,433
Non-interest income 1,917 1,971 3,498 3,971
Non-interest expense 5,674 5,758 11,545 11,346
-------- -------- -------- -------
Income before provision for
income taxes 3,650 2,320 6,800 6,058
Provision for income taxes 1,336 849 2,469 2,197
-------- -------- -------- -------
Net income $ 2,314 $ 1,471 $ 4,331 $ 3,861
======== ======== ======== =======
Earnings per common share
Basic $ 0.26 $ 0.17 $ 0.49 $ 0.44
Diluted 0.26 0.16 0.48 0.43
Cumulative dividend per
common share 0.09 0.08 0.18 0.16
Weighted average shares
outstanding
Basic 8,787 8,717 8,778 8,696
Diluted 9,005 9,012 9,029 8,982
Actual shares outstanding 8,791 8,725 8,791 8,725
BALANCE SHEET June 30, December 31, June 30,
2004 2003 2003
---------------------------- --------- ------------ ---------
Total assets $666,789 $584,136 $579,310
Securities 30,590 31,682 35,176
Loans held for sale 1,873 2,792 3,493
Gross loans, excluding loans
held for sale (1) 567,107 469,620 456,863
Total gross loans (1) 568,980 472,412 460,356
Goodwill (2) 7,389 7,389 7,389
Deposits 548,303 496,358 494,793
Borrowings 54,446 25,983 28,424
Equity 60,680 57,804 53,101
Book value per common share $ 6.90 $ 6.61 $ 6.09
Tangible book value per
common share (3) $ 5.75 $ 5.34 $ 4.81
(1) Excludes allowance for loan losses and unearned loan fees.
(2) From the purchase of Valley Community Bancorp in 1998.
(3) Total common equity, less goodwill and other intangible assets;
divided by actual shares outstanding.
ADDITIONAL FINANCIAL INFORMATION
(Unaudited)
(In thousands, except per share data and ratios)
NON-PERFORMING ASSETS June 30, June 30,
2004 2003
------------------------------ --------- ---------
Delinquent loans on non-
accrual status $ 1,615 $ 2,864
Delinquent loans on accrual
status - -
Restructured loans 9 11
-------- --------
Total non-performing loans 1,624 2,875
Other real estate owned 1,436 36
-------- --------
Total non-performing assets $ 3,060 $ 2,911
======== ========
Total non-performing assets /
total assets 0.46% 0.50%
Quarter Ended Year to Date
------------------- -------------------
CHANGE IN THE ALLOWANCE FOR June 30, June 30, June 30, June 30,
LOAN LOSSES 2004 2003 2004 2003
------------------------------ --------- --------- --------- ---------
Balance at beginning of period $ 6,876 $ 6,398 $ 6,612 $ 6,417
Provision for loan losses 1,390 1,700 2,090 2,000
Recoveries 27 22 36 46
Charge offs (353) (1,672) (798) (2,015)
-------- -------- -------- --------
Balance at end of period $ 7,940 $ 6,448 $ 7,940 $ 6,448
======== ======== ======== ========
Allowance for loan losses /
gross loans and loans held
for sale 1.40% 1.40%
Non-performing loans /
allowance for loan losses 20.45% 44.58%
Quarter Ended Year to Date
------------------- -------------------
OPERATING PERFORMANCE June 30, June 30, June 30, June 30,
2004 2003 2004 2003
------------------------------ --------- --------- --------- ---------
Average interest-earning
assets $576,982 $516,294 $554,942 $506,929
Average gross loans and loans
held for sale 536,813 456,207 509,325 448,924
Average assets 631,079 564,533 607,354 555,018
Average interest-bearing
liabilities 405,816 374,269 391,087 370,986
Average interest-bearing
deposits 359,660 345,565 354,030 341,563
Average deposits 521,883 480,467 507,569 470,029
Average liabilities 571,022 511,583 547,932 502,941
Average equity 60,057 52,950 59,422 52,076
Quarter Ended Year to Date
------------------- -------------------
RATIOS June 30, June 30, June 30, June 30,
2004 2003 2004 2003
------------------------------ --------- --------- --------- ---------
Interest rate yield on
interest-earning assets, tax
equivalent 7.28% 7.53% 7.30% 7.64%
Interest rate expense on
interest-bearing liabilities 1.54% 1.91% 1.55% 1.93%
Interest rate spread 5.74% 5.62% 5.74% 5.71%
Net interest margin, tax
equivalent 6.19% 6.15% 6.20% 6.22%
Efficiency ratio (1) 52.96% 58.89% 56.49% 58.47%
Return on average assets 1.48% 1.05% 1.43% 1.40%
Return on average equity 15.50% 11.14% 14.66% 14.95%
Average equity / average
assets 9.52% 9.38% 9.78% 9.38%
(1) Non-interest expense divided by net interest income and
non-interest income.
FINANCIAL INFORMATION UPDATE
(Unaudited)
Quarter Ended Year to Date
------------------------- ------------------------
INCOME STATEMENT June 30, June 30, June 30, June 30,
ITEMS 2004 2003 2004 2003
------------------- ------------ ------------ ----------- ------------
Service charges on
deposits 1,191,731 1,094,500 2,247,305 2,066,492
Credit card
discounts and fees 113,499 100,452 218,512 190,714
Financial services 166,037 159,022 301,862 251,841
Mortgage servicing,
net (194,726) (213,238) (434,232) (276,870)
Gain on sale of
mortgage loans 8,039 3,354 79,761 (17,157)
Mortgage loan
origination income 292,648 687,781 510,933 1,274,615
Gain/loss from
"called" bond (92) 11,552 (92) 4,884
Other income 339,562 126,967 573,775 476,126
------------ ------------ ----------- ------------
Total non-interest
income 1,916,698 1,970,390 3,497,824 3,970,645
------------ ------------ ----------- ------------
Compensation and
benefits 3,107,764 3,252,159 6,308,439 6,682,329
Occupancy 601,984 566,247 1,198,293 1,121,171
Data processing 140,561 71,145 254,719 151,328
Other expenses 1,823,290 1,868,224 3,783,434 3,391,401
------------ ------------ ----------- ------------
Total non-interest
expense 5,673,599 5,757,775 11,544,885 11,346,229
------------ ------------ ----------- ------------
BALANCE SHEET ITEMS June 30, June 30,
2004 2003
------------------- ----------- ------------
Commercial loans 95,287,219 78,913,209
Agricultural loans 82,362,004 67,762,227
Real estate loans 244,568,502 190,329,113
Real estate loans -
construction 121,835,741 93,998,606
Loans held for sale 1,872,682 3,492,679
Consumer loans 16,256,291 19,820,113
Other loans 6,797,135 6,039,831
------------ ------------
Total loans, gross
(1) 568,979,574 460,355,778
------------ ------------
Quarter Ended
-------------------------
MORTGAGE SERVICING June 30, June 30,
2004 2003
------------------ ------------ ------------
Mortgage servicing
asset (MSA), net 2,723,771 3,732,008
Mortgage loans
serviced ($) 375,684,958 481,276,361
Mortgage loans
serviced number
(quantity) 3,245 4,213
Mortgage loans
produced (quantity) 157 492
Mortgage servicing
asset multiple 0.73% 0.78%
MSA RECONCILIATION Q2 2004 Q1 2004 2003 2002
------------------ ----------- ------------ ----------- ------------
Mortgage servicing
asset (MSA),
beginning 3,174,839 3,691,449 4,614,391 6,196,801
Add servicing
retained premiums 39,601 52,695 1,935,108 2,227,511
Deduct MSA
amortization (490,669) (569,305) (2,000,050) (1,028,810)
Deduct MSA valuation
adjustments - - (858,000) (2,781,111)
------------ ------------ ----------- ------------
Mortgage servicing
asset, ending 2,723,771 3,174,839 3,691,449 4,614,391
------------ ------------ ----------- ------------
(1) Excludes allowance for loan losses and unearned loan fees.
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