<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 2000
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________ to
Commission file number 0-27938
COLUMBIA BANCORP
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
93-1193156
Oregon (I.R.S. Employer
(State of Incorporation) Identification Number)
</TABLE>
420 East Third Street, Suite 200
The Dalles, Oregon 97058
(Address of principal executive offices)
(541) 298-6649
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
8,023,422 shares of common stock as of October 18, 2000
1
<PAGE> 2
COLUMBIA BANCORP
FORM 10-Q
SEPTEMBER 30, 2000
INDEX
<TABLE>
<CAPTION>
PAGE
REFERENCE
---------
<S> <C>
PART I - FINANCIAL INFORMATION
Consolidated Balance Sheets as of September 30, 2000 and
December 31, 1999. 3
Consolidated Statements of Income and Comprehensive Income
for the nine months and quarter ended September 30, 2000 and
1999. 4
Consolidated Statements of Cash Flows for the nine 5 months ended September
30, 2000 and 1999. 5
Consolidated Statements of Changes in Shareholders' Equity 6 for the
periods of December 31, 1998 to September 30, 2000. 6
Notes to Consolidated Financial Statements 7-8
Management's Discussion and Analysis of Financial
Condition and Results of Operations:
Forward Looking Information 9
Overview 9
Material Changes in Financial Condition 9-10
Material Changes in Results of Operations 10
Loan Loss Provision 10
Liquidity and Capital Resources 11
Quantitative and Qualitative Disclosures about Market Risk 11
PART II - OTHER INFORMATION
Item 5 - Other Information 12
Item 6 - Exhibits and Reports on Form 8-K 12
Signatures 12
</TABLE>
2
<PAGE> 3
COLUMBIA BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- -------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Cash and due from banks $ 19,677,940 $ 23,796,174
Interest-bearing deposits with other banks 3,547,145 912,838
Federal funds sold 5,977,962 680,024
------------- -------------
Total cash and cash equivalents 29,203,047 25,389,036
Investment securities available-for-sale 40,703,669 41,111,041
Investment securities held-to-maturity 18,623,162 20,125,225
Restricted equity securities 1,611,500 1,096,800
------------- -------------
Total investment securities 60,938,331 62,333,066
Loans held-for-sale 6,628,281 3,282,849
Loans, net of allowance for loan losses and unearned loan fees 293,698,345 243,692,191
Property and equipment, net of depreciation 14,025,902 12,008,224
Goodwill, net of amortization 8,174,873 8,646,341
Accrued interest receivable 4,509,775 2,902,601
Other assets 3,212,093 2,986,359
------------- -------------
Total assets $ 420,390,647 $ 361,240,667
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand deposits $ 92,028,795 $ 74,889,247
Interest-bearing demand accounts 136,720,454 130,148,498
Savings accounts 27,220,295 27,326,830
Time certificates 99,866,332 78,545,214
------------- -------------
Total deposits 355,835,876 310,909,789
Notes payable 23,062,244 10,870,318
Accrued interest payable and other liabilities 1,561,954 2,138,998
------------- -------------
Total liabilities 380,460,074 323,919,105
------------- -------------
Shareholders' equity:
Common stock, no par value; 20,000,000 shares
authorized, 8,018,672 issued and outstanding
(8,010,522 at December 31, 1999) 14,426,789 14,392,229
Additional paid-in capital 6,371,490 6,371,490
Retained earnings 19,633,836 17,272,137
Accumulated other comprehensive income, net of tax (501,542) (714,294)
------------- -------------
Total shareholders' equity 39,930,573 37,321,562
------------- -------------
Total liabilities and shareholders' equity $ 420,390,647 $ 361,240,667
============= =============
</TABLE>
See accompanying notes.
3
<PAGE> 4
COLUMBIA BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
------------------------------- -------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 7,789,073 $ 5,915,408 $ 21,478,243 $ 16,431,161
Interest on investments
Taxable investment securities 597,637 601,601 1,803,622 1,577,650
Nontaxable investment securities 225,281 259,826 688,218 746,661
Other interest income 108,376 234,832 440,790 1,012,354
------------ ------------ ------------ ------------
Total interest income 8,720,367 7,011,667 24,410,873 19,767,826
INTEREST EXPENSE
Interest-bearing demand and savings 1,303,202 1,042,659 3,769,987 3,029,617
Interest on time deposit accounts 1,556,662 976,857 4,140,731 2,886,603
Other borrowed funds 432,626 128,708 1,079,131 363,510
------------ ------------ ------------ ------------
Total interest expense 3,292,490 2,148,224 8,989,849 6,279,730
------------ ------------ ------------ ------------
NET INTEREST INCOME 5,427,877 4,863,443 15,421,024 13,488,096
PROVISION FOR LOAN LOSSES 464,000 170,000 1,317,000 855,000
------------ ------------ ------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,963,877 4,693,443 14,104,024 12,633,096
NONINTEREST INCOME
Service charges and fees 711,261 575,884 1,912,519 1,598,808
Credit card discounts and fees 220,558 171,084 522,999 398,751
Financial services department income 91,986 101,414 334,248 285,656
Mortgage servicing revenue 454,461 288,803 1,178,684 834,133
Gain on sale of loans, net of discount (126,441) (25,941) (121,947) 92,073
Mortgage loan origination income 191,437 108,698 440,429 442,722
Other noninterest income 330,720 183,465 735,482 563,390
------------ ------------ ------------ ------------
Total noninterest income 1,873,982 1,403,407 5,002,414 4,215,533
NONINTEREST EXPENSE
Salaries and employee benefits 2,515,363 2,125,867 6,948,301 5,989,316
Occupancy expense 395,423 295,585 1,101,087 872,881
Credit card processing fees 157,334 119,437 383,404 296,582
Office supplies 50,407 59,644 149,795 195,389
Data processing expense 122,823 135,917 385,848 417,137
Other noninterest expenses 1,330,494 1,016,788 3,676,677 3,157,028
------------ ------------ ------------ ------------
Total noninterest expense 4,571,844 3,753,238 12,645,112 10,928,333
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES 2,266,015 2,343,612 6,461,326 5,920,296
PROVISION FOR INCOME TAXES 846,551 936,636 2,416,060 2,256,061
------------ ------------ ------------ ------------
NET INCOME $ 1,419,464 $ 1,406,976 $ 4,045,266 $ 3,664,235
============ ============ ============ ============
OTHER COMPREHENSIVE INCOME, NET
Unrealized gain or loss on AFS securities, net 285,497 (141,768) 210,601 (582,536)
Reclassification for gain included in net income -- (148) 2,151 (8,566)
------------ ------------ ------------ ------------
285,497 (141,916) 212,752 (591,102)
------------ ------------ ------------ ------------
COMPREHENSIVE INCOME $ 1,704,961 $ 1,265,060 $ 4,258,018 $ 3,073,133
============ ============ ============ ============
Earnings per share of common stock
Net Income Basic $ 0.18 $ 0.18 $ 0.50 $ 0.46
Net Income Diluted $ 0.18 $ 0.17 $ 0.50 $ 0.45
Weighted average common shares outstanding
Basic 8,016,889 7,995,588 8,014,244 7,976,950
Diluted 8,100,209 8,116,988 8,099,651 8,106,679
</TABLE>
See accompanying notes.
4
<PAGE> 5
COLUMBIA BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine months ended
September 30,
-------------------------------
2000 1999
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 4,045,266 $ 3,664,235
Adjustments to reconcile net income to net cash from operating activities:
Loss (Gain) on sale or call of investments 2,151 (8,566)
Depreciation and amortization 1,230,851 980,952
Federal Home Loan Bank stock dividend (64,800) (60,200)
Provision for loan losses 1,317,000 855,000
Increase (decrease) in cash due to changes in assets/liabilities
Accrued interest receivable (1,607,174) (1,036,740)
Other assets (643,202) (3,668,174)
Accrued interest payable and other liabilities (577,044) 562,124
------------ ------------
NET CASH FROM OPERATING ACTIVITIES 3,703,048 1,288,631
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale of available-for-sale securities 506,188 2,045,455
Proceeds from maturity of available-for-sale securities 600,000 8,728,987
Proceeds from the maturity of held-to-maturity securities 1,590,985 1,273,802
Purchases of held-to-maturity securities -- (5,906,630)
Purchases of available-for-sale securities (507,245) (24,649,789)
Net purchase of restricted equity securities (449,900) 102,082
Net change in loans made to customers (54,668,586) (24,329,769)
Payments made for purchase of property and equipment (2,429,485) (4,297,320)
------------ ------------
NET CASH FROM INVESTING ACTIVITIES (55,358,043) (47,033,182)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in demand deposit and savings accounts 23,604,970 5,627,023
Net proceeds from time deposits 21,321,117 6,264,137
Net borrowings of debt 12,191,926 (1,122,898)
Dividends paid (1,683,567) (1,438,144)
Proceeds from stock options exercised and sales of common stock 34,560 253,399
------------ ------------
NET CASH FROM FINANCING ACTIVITIES 55,469,006 9,583,517
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,814,011 (36,161,034)
CASH AND CASH EQUIVALENTS, beginning of period 25,389,036 65,773,682
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ 29,203,047 $ 29,612,648
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid in cash $ 8,940,703 $ 6,264,919
Taxes paid in cash $ 2,097,000 $ 2,258,046
SCHEDULE OF NONCASH ACTIVITIES
Change in unrealized loss on available-for-sale securities, net of tax $ 212,752 $ (591,102)
Cash dividend declared and payable after quarter-end $ 561,307 $ 480,414
</TABLE>
See accompanying notes.
5
<PAGE> 6
COLUMBIA BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Accumulated
Additional Other Total
Common Paid-in Retained Comprehensive Shareholders'
Shares Stock Capital Earnings Income Equity
--------- ------------ ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1998
(Audited) 7,949,032 $ 14,125,315 $ 6,317,732 $ 14,257,975 $ 55,198 $ 34,756,220
Stock options exercised 61,490 266,914 -- -- -- 266,914
Income tax benefit from
stock options exercised -- -- 53,758 -- -- 53,758
Cash dividend paid or declared -- -- -- (1,999,061) -- (1,999,061)
Net Income and Comprehensive
Income -- -- -- 5,013,223 (769,492) 4,243,731
--------------------------------------------------------------------------------------------
BALANCE, December 31, 1999
(Audited) 8,010,522 14,392,229 6,371,490 17,272,137 (714,294) 37,321,562
Stock options exercised 8,150 34,560 -- -- -- 34,560
Cash dividend paid or declared -- -- -- (1,683,567) -- (1,683,567)
Net Income and Comprehensive
Income -- -- -- 4,045,266 212,752 4,258,018
--------------------------------------------------------------------------------------------
BALANCE, September 30, 2000
(Unaudited) 8,018,672 $ 14,426,789 $ 6,371,490 $ 19,633,836 $ (501,542) $ 39,930,573
============================================================================================
</TABLE>
See accompanying notes.
6
<PAGE> 7
COLUMBIA BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Principles of Consolidation
The interim consolidated financial statements include the accounts of
Columbia Bancorp, a bank holding company ("Columbia"), and its
wholly-owned subsidiaries, Columbia River Bank ("CRB"), and Valley
Community Mortgage Services, Inc., after elimination of intercompany
transactions and balances. CRB is an Oregon state-chartered bank,
headquartered in The Dalles, Oregon. Substantially all activity of
Columbia is conducted through its subsidiary bank, CRB.
The interim financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. The financial information included in this
interim report has been prepared by management and reviewed by
independent public accountants. Columbia's annual report contains audited
financial statements. All adjustments including normal recurring accruals
necessary for fair presentation of results of operations for the interim
periods included herein have been made. The results of operations for the
nine months ended September 30, 2000 are not necessarily indicative of
results to be anticipated for the year ending December 31, 2000.
2. Recent Corporate Activity
Effective September 30, 2000, CRB acquired Datatech of Oregon, Inc.
("Datatech"), headquartered in Portland, Oregon. Prior to the
acquisition, CRB owned 28.6% of Datatech, a data processing company that
provided services to CRB and five other Oregon community banks. As
consideration for the acquisition, CRB paid approximately $150,000. The
acquisition allows CRB greater control over, and flexibility with respect
to, data processing functions. The acquisition was accounted for as a
purchase transaction. The assets acquired and liabilities assumed in the
purchase transaction were not material to the consolidated financial
statements of Columbia.
3. Loans and Reserve for Loan Losses
The composition of the loan portfolio was as follows:
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
------------- -------------
(Unaudited) (Audited)
<S> <C> <C>
Commercial $ 72,550,138 $ 60,868,875
Agriculture 47,961,599 37,775,087
Real estate 158,193,403 130,313,434
Consumer 18,970,204 18,096,432
Other 1,449,236 827,362
------------- -------------
299,124,580 247,881,190
Allowance for loan losses (4,396,972) (3,298,460)
Deferred loan fees (1,029,263) (890,539)
------------- -------------
$ 293,698,345 $ 243,692,191
============= =============
</TABLE>
Transactions in the reserve for loan losses were as follows for the
nine months ended September 30:
<TABLE>
<CAPTION>
2000 1999
----------- -----------
(Unaudited) (Audited)
<S> <C> <C>
Balance at beginning of period $ 3,298,460 $ 2,380,220
Provision charged to operations 1,317,000 855,000
Recoveries 39,715 88,055
Loans charged off (258,203) (116,782)
----------- -----------
Balance at end of period $ 4,396,972 $ 3,206,493
=========== ===========
</TABLE>
7
<PAGE> 8
Columbia has adopted a policy for placement of loans on nonaccrual
status after they become 90 days past due unless otherwise formally
waived. Further, Columbia may place loans that are not contractually past
due or that are deemed fully collateralized on nonaccrual status to
promote better oversight and review of loan arrangements. Loans on
nonaccrual status at September 30, 2000 and December 31, 1999 were
approximately $1,435,000 and $394,000, respectively.
As of September 30, 2000, Columbia identified loans totaling $117,000
on which the interest rate or payment schedule was modified from original
terms to accommodate a borrower's weakened financial position. There were
$202,000 of loans in this category at December 31, 1999.
At September 30, 2000, and December 31, 1999, Columbia had no other
real estate owned ("OREO"), which represents assets held through loan
foreclosure or recovery activities.
4. Earnings Per Share
Basic earning per share excludes dilution and is computed by dividing
net income by the weighted average common shares outstanding for the
period. Diluted earnings per share reflect the potential dilution that
could occur if common shares were issued pursuant to the exercise of
options under stock option plans. Weighted average shares outstanding
consist of common shares outstanding and common stock equivalents
attributable to outstanding stock options.
The weighted average number of shares and common share equivalents have
been adjusted for all prior stock dividends or splits.
5. Recently Issued Accounting Standards
SFAS No. 137 "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133" is
effective for all fiscal quarters of all fiscal years beginning after
June 15, 2000. Columbia does not expect SFAS 137 to materially impact the
financial condition or results of operations of Columbia.
SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain
Hedging Transactions, an amendment to FASB Statement No. 133" addresses a
limited number of issues causing implementation difficulties in adoption
of SFAS 133. Implementation of the accounting standard is expected to
have no effect on the financial condition and results of operations of
Columbia.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD LOOKING INFORMATION
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:
Columbia's dependence on the timely development, introduction and customer
acceptance of new products; the impact of competition on revenues and margins;
and other risks and uncertainties, including statements relating to the year
2000, as may be detailed from time to time in Columbia's public announcements
and filings with the 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
the Report, other than in its periodic filings with the SEC, or to reflect the
occurrence of unanticipated events.
OVERVIEW
Highlights for the third quarter of the new millennium for Columbia
Bancorp ("Columbia"):
- Reported record growth in loans, deposits and earnings.
- Columbia's subsidiary Columbia River Bank ("CRB") acquired
Datatech of Oregon, Inc. a data processing company.
- Within six months of roll-out, realized 3% customer penetration of
Columbia River BankNet, CRB's internet banking solution.
Columbia reported net income of $4,045,266, or $.50 per diluted share for
the nine months ended September 30, 2000. This represented a 10% increase in net
income, as compared to $3,664,235, or $.45 per diluted share, for the nine
months ended September 30, 1999. Net income of $1,419,464, or $.18 per diluted
share for the quarter ended September 30, 2000 represented an increase of 1% in
net income as compared to $1,406,976, or $.17 per diluted share for the quarter
ended September 30, 1999.
The net income added to shareholders' equity during the first nine months
of 2000 was offset, in part, by dividends declared and paid of $1,683,567. A
second quarter dividend of $.07 per share was paid August 1 to shareholders of
record July 15. On September 28 the Bancorp board of directors declared a
third-quarter dividend of $.07 per share payable November 1, 2000 to
shareholders of record October 15. With the payment of the declared dividend,
approximately 42% of earnings will have been returned to shareholders, the
remainder being retained to fund the continued growth of Columbia.
MATERIAL CHANGES IN FINANCIAL CONDITION
Changes in the balance sheet for the nine months ended September 30, 2000
include an increase in total assets, primarily in loans, and an increase in
total liabilities, primarily in total deposits and notes payable.
At September 30, 2000, total assets increased 16%, or approximately $59.1
million, over total assets at December 31, 1999. Major components of the change
in total assets were:
- $50.0 million increase in loans
- $5.3 million increase in federal funds sold
- $3.3 million increase in loans held-for-sale
The increase in loans is reflected in increases in all loan categories.
Management attributes the change to seasonal increase in real estate
construction and agricultural operating loans as well as continued penetration
within Columbia's market. The market areas Columbia serve continue to experience
robust local economies.
9
<PAGE> 10
Columbia experienced an increase in deposits of approximately $44.9
million during the first nine months of 2000, specifically as follows:
- Noninterest-bearing deposits increased $17.1 million
- Interest-bearing demand deposits increased $6.6 million
- Savings deposits decreased $0.1 million
- Time certificate deposits increased $21.3 million
Driven by marketing promotions $15.8 million of the $21.3 million
year-to-date growth in time deposits was generated in the first quarter of the
year. Management believes deposit increases are due to continuing expansion in
current market areas served.
Notes payable increased $12.2 million in the nine months ended September
30, 2000. Along with deposit growth, notes payable have been used to fund the
loan growth experienced this year.
All other changes experienced in asset and liability categories during
the first nine months of 2000 were comparatively modest.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Total interest income increased $4,643,047 for nine months ended
September 30, 2000, and $1,708,700 the quarter ended September 30, 2000, as
compared to the same periods in 1999. This increase is primarily due to the
increase in loans held in 2000 as compared to 1999.
Total interest expense also increased $2,710,119 for the nine months
ended September 30, 2000, and $1,144,266 for the quarter ended September 30,
2000, as compared to the same periods in 1999. This increase is primarily due to
the increase in time deposits held during 2000 as compared to 1999.
Columbia's net interest income increased by $1,932,298 for the nine
months ended September 30, 2000, and $564,434 for the quarter ended September
30, 2000 as compared to the same periods in 1999. Diluted net income per common
share increased to $.50 for the first nine months of 2000 from $.45 for the
first nine months of 1999. Cash earnings, excluding the effect of goodwill
amortization, in the first nine months of 2000 were $.56 per diluted share
compared to $.51 per diluted share in the like period a year ago.
Noninterest income increased $786,881 for the nine months ended September
30, 2000, and $470,575 for the quarter ended September 30, 2000 as compared to
the same periods in 1999. The increase, for both the quarter and year-to-date,
is primarily attributable to increased income generated by service charges and
fees on deposit accounts, growth in the company's bankcard department and fees
generated from mortgage operations.
Noninterest expense increased $1,716,779 for the nine months ended
September 30, 2000, and $818,606 for the quarter ended September 30, 2000 as
compared to the comparable 1999 period. The increase for the both periods was
primarily attributable to increases in salaries and employee benefits and other
expenses. The staffing of the Shevlin and Newberg branches (opened in the third
and fourth quarters of 1999, respectively), and the normal expense increases
associated with maintaining an expanded employee base were the primary forces
contributing to the increased expense in these categories.
LOAN LOSS PROVISION
During the nine months ended September 30, 2000, Columbia charged a
$1,317,000 loan loss provision to operations, as compared to $855,000 charged
during the same period in 1999. Loans charged off, net of loan recoveries, was
$218,488 during the nine months ended September 30, 2000, as compared to net
charged off loans of $28,727 for the like period in 1999.
Management believes that the reserve for loan losses is adequate for
potential loan losses, based on management's assessment of various factors,
including present delinquent and nonperforming loans, past history of industry
loan loss experience, and present economic trends impacting the areas and
customers served by Columbia.
10
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
Columbia has adopted policies to maintain a relatively liquid position to
enable it to respond to changes in the financial environment and ensure
sufficient funds are available to meet customers' needs for borrowing and
deposit withdrawals. Generally, Columbia's major sources of liquidity are
customer deposits, sales and maturities of investment securities, the use of
federal funds markets and net cash provided by operating activities. Scheduled
loan repayments are a relatively stable source of funds, while deposit inflows
and unscheduled loan prepayments, which are influenced by general interest rate
levels, interest rates available on other investments, competition, economic
conditions and other factors, are not.
The analysis of liquidity also includes a review of the changes that
appear in the consolidated statement of cash flows for the first nine months of
2000. The statement of cash flows includes operating, investing and financing
categories. Operating activities include net income of $4,045,266, which is
adjusted for non-cash items and increases or decreases in cash due to changes in
certain assets and liabilities. Investing activities consist primarily of both
proceeds from and purchases of securities, and the impact of the net growth in
loans. Financing activities present the cash flows associated with deposit and
loan accounts, and reflect the dividend paid to shareholders.
The Federal Reserve Board ("FRB") and Federal Deposit Insurance
Corporation ("FDIC") have established minimum requirements for capital adequacy
for bank holding companies and member banks. The requirements address both
risk-based capital and leveraged capital. The regulatory agencies may establish
higher minimum requirements if, for example, a corporation has previously
received special attention or has a high susceptibility to interest rate risk.
The following reflects Columbia's various capital ratios at September 30, 2000,
as compared to regulatory minimums.
<TABLE>
<CAPTION>
At September 30, 2000 Regulatory Minimum
--------------------- ------------------
<S> <C> <C>
Tier-one capital 9.45% 4%
Total risk-based capital 10.70% 8%
Leverage ratio 7.91% 4%
</TABLE>
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has not been a material change in the quantitative and qualitative
market risks faced by Columbia from the risk disclosures reported in Columbia's
form 10-K covering the fiscal year ended December 31, 1999.
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
Purchase of Datatech of Oregon, Inc.
Effective September 30, 2000, CRB acquired Datatech of Oregon, Inc.
("Datatech"), headquartered in Portland, Oregon. Prior to the acquisition, CRB
owned 28.6% of Datatech, a data processing company that provided services to CRB
and five other Oregon community banks. As consideration for the acquisition, CRB
paid approximately $150,000. The acquisition allows CRB greater control over,
and flexibility with respect to, data processing functions. The acquisition was
accounted for as a purchase transaction. The assets acquired and liabilities
assumed in the purchase transaction were not material to the consolidated
financial statements of Columbia.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit 27 - Article 9 Financial Data Schedule for Form 10-Q
(b) Exhibit 99 - Accountant's Review Report
(c) No current reports on Form 8-K were filed during the quarter ended
September 30, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COLUMBIA BANCORP
Dated: November 9, 2000 /s/ Terry L. Cochran
---------------------------------------------
Terry L. Cochran
President & Chief
Executive Officer
Dated: November 9, 2000 /s/ Neal T. McLaughlin
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Neal T. McLaughlin, EVP, Chief Financial
Officer - Columbia River Bank; and
Chief Financial Officer - Columbia Bancorp
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