Columbia Bancorp: Earnings News Release PRESS RELEASE For Immediate Release - January 22, 1998 FOR MORE INFORMATION, CONTACT: John A. Scaldara, Jr., CFO (410)465-4800 COLUMBIA BANCORP REPORTS RECORD EARNINGS FOR 1997 Columbia, MD (January 22, 1998) --- Columbia Bancorp (Nasdaq:CBMD), parent company of The Columbia Bank, today announced record earnings of $4,167,531, or $1.82 per share, for the year ended December 31, 1997 and $1,111,414, or $.48 per share for the quarter then ended. Earnings were $3,751,882, or $1.66 per share, and $967,870, or $.43 per share for the comparable periods of 1996, respectively. Results for 1996, as previously reported, were affected by a special one-time after-tax charge of $299,000 recorded during the third quarter as a result of the recapitalization of the Savings Association Insurance Fund of the Federal Deposit Insurance Corporation. The Company continued its aggressive expansion of core business during 1997. As compared to 1996, deposits were up 23.1%, total assets grew 17.7% and loans, inclusive of loans held for sale, increased 13.5%. Substantial investments were made to support this growth and future expansion. Specifically, the Company opened three full-service branch facilities and two mortgage banking offices. The Company also completed integration of its new data processing system, which provides enhanced customer service capabilities and operational efficiencies. Other comparable operating trends remained essentially unchanged from those reported quarterly during 1997. Columbia Bancorp, headquartered in Columbia, Maryland, is a bank holding company and parent company of The Columbia Bank, a commercial bank. The Columbia Bank operates thirteen banking offices and provides a full range of financial services to consumers and businesses. Columbia Bancorp: Earnings News Release COLUMBIA BANCORP Consolidated Statements of Condition (Dollars in thousands) December 31, --------------------- 1997 1996 --------------------- ASSETS Cash and due from banks $13,497 17,753 Federal funds sold 2,014 3,477 Investment securities 64,971 39,795 Investment securities available-for-sale 1,674 4,354 Residential mortgages originated for sale 6,557 1,551 Loans, net of unearned income 265,194 237,875 Less: allowance for credit losses 3,632 3,293 ---------- ---------- Loans, net 261,562 234,582 Other real estate owned 4,622 448 Property and equipment, net 9,125 7,684 Prepaid expenses and other assets 9,429 7,590 ---------- ---------- TOTAL ASSETS $373,451 317,234 ========== ========== LIABILITIES Deposits: Noninterest-bearing $56,584 43,981 Interest-bearing 256,773 210,659 ---------- ---------- Total deposits 313,357 254,640 Short-term borrowings 23,725 30,127 Accrued expenses and other liabilities 1,984 1,492 ---------- ---------- TOTAL LIABILITIES 339,066 286,259 ---------- ---------- STOCKHOLDERS' EQUITY Common stock, $.01 par value per share; authorized 9,550,000 shares; outstanding 2,200,165 and 2,148,004 shares, respectively 22 21 Additional paid-in capital 22,919 22,599 Retained earnings 11,445 8,363 Net unrealized loss on investment securities available-for-sale (1) (8) ---------- ---------- TOTAL STOCKHOLDERS' EQUITY 34,385 30,975 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $373,451 317,234 ========== ========== COLUMBIA BANCORP Consolidated Statements of Operation (Dollars in thousands, except per share data) Year Ended Three Months Ended December 31, December 31, --------------------- ---------------------- 1997 1996 1997 1996 ---------- ---------- ---------- ----------- Interest income: Interest and fees on loans $26,742 23,447 6,946 6,241 Interest and dividends on investments 3,259 2,000 949 592 Interest on federal funds sold 193 375 33 69 ---------- ---------- ---------- ----------- TOTAL INTEREST INCOME 30,194 25,822 7,928 6,902 ---------- ---------- ---------- ----------- Interest expense: Interest on deposits 10,094 8,049 2,788 2,155 Interest on short-term borrowings 1,379 720 352 284 ---------- ---------- ---------- ----------- TOTAL INTEREST EXPENSE 11,473 8,769 3,140 2,439 ---------- ---------- ---------- ----------- NET INTEREST INCOME 18,721 17,053 4,788 4,463 Provision for credit losses 663 621 34 71 ---------- ---------- ---------- ----------- NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 18,058 16,432 4,754 4,392 ---------- ---------- ---------- ----------- Noninterest income: Gains on sales of mortgage loans 822 753 313 189 Fees charged for services 1,227 964 299 257 Other 599 341 157 103 ---------- ---------- ---------- ----------- TOTAL NONINTEREST INCOME 2,648 2,058 769 549 ---------- ---------- ---------- ----------- Noninterest expense: Salaries and employee benefits 7,336 6,041 2,115 1,741 Occupancy, net 1,420 1,104 399 295 Equipment 1,038 808 295 224 Marketing 544 479 83 101 Data processing 597 573 160 168 Cash management services 413 473 84 130 Professional fees 392 274 90 114 Deposit insurance and assessments 112 687 31 5 Net expense (income) on other real estate owned 134 11 (33) 0 Other 2,202 1,901 606 578 ---------- ---------- ---------- ----------- TOTAL NONINTEREST EXPENSE 14,188 12,351 3,830 3,356 ---------- ---------- ---------- ----------- Income before income taxes 6,518 6,139 1,693 1,585 Income tax expense 2,350 2,387 581 617 ---------- ---------- ---------- ----------- NET INCOME $4,168 3,752 1,112 968 ========== ========== ========== =========== PER COMMON SHARE DATA: Net income: Basic $1.93 1.75 .51 .45 Diluted 1.82 1.66 .48 .43 Cash dividends declared .50 .42 .14 .12 COLUMBIA BANCORP Financial Highlights (Dollars in thousands, except per share data) As of and Years As of and Three Months Ended December 31, Ended December 31, --------------------- ---------------------- 1997 1996 1997 1996 ---------- ---------- ---------- ----------- SUMMARY OF OPERATING RESULTS: Net interest income $18,721 17,053 4,788 4,463 Provision for credit losses 663 621 34 71 Noninterest income 2,648 2,058 769 549 Noninterest expense 14,188 12,351 3,830 3,356 Income tax expense 2,350 2,387 581 617 Net income 4,168 3,752 1,112 968 PER COMMON SHARE DATA: Net income: Basic $1.93 1.75 .51 .45 Diluted 1.82 1.66 .48 .43 Average number of shares outstanding: Basic 2,162,756 2,147,066 2,186,507 2,147,740 Diluted 2,292,598 2,259,902 2,308,932 2,268,492 Tangible book value, at period-end $15.54 14.29 Cash dividends declared $.50 .42 .14 .12 PERIOD END DATA: Assets $373,451 317,234 Deposits 313,357 254,640 Loans, net of unearned income 265,194 237,875 Investment securities and securities available-for-sale 66,645 44,149 Stockholders' equity 34,385 30,975 PERFORMANCE RATIOS: Return on average assets 1.21% 1.34% 1.16% 1.27% Return on average stockholders' equity 12.78% 12.71% 12.67% 12.62% Net interest margin 5.92% 6.60% 5.65% 6.41% CAPITAL AND CREDIT QUALITY: Period-end capital to period-end risk-weighted assets: Tier 1 11.31% 11.91% Total 12.51% 13.16% Period-end Tier 1 capital leverage ratio 9.25% 10.11% Allowance for credit losses to loans, net of unearned income, at period-end 1.37% 1.38% Annualized net charge-offs to average loans, net of unearned income 0.13% 0.12% 0.04% 0.31% AVERAGE BALANCES: Federal funds sold $3,113 7,194 1,990 4,149 Investment securities and securities available-for-sale 55,974 35,714 64,124 41,010 Loans, net of unearned income (a) 256,949 215,348 269,909 233,253 Total earning assets 316,036 258,256 336,023 278,411 Total assets 345,626 280,352 369,724 303,828 Interest-bearing deposits 236,775 196,486 254,033 206,943 Short-term borrowings 27,653 15,974 29,825 23,053 Stockholders' equity 32,620 29,512 33,859 30,666 (a) Includes residential mortgages originated for sale Ends.