<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 June 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)
93-1193156
Oregon (I.R.S. Employer
(State of Incorporation) Identification Number)
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.
8,017,172 shares of common stock as of July 27, 2000
<PAGE> 2
COLUMBIA BANCORP
FORM 10-Q
JUNE 30, 2000
INDEX
<TABLE>
<CAPTION>
PAGE
PART I - FINANCIAL INFORMATION REFERENCE
------------------------------ ---------
<S> <C>
Consolidated Balance Sheets as of June 30, 2000 and 3
December 31, 1999.
Consolidated Statements of Income and Comprehensive Income for the six
months and quarter ended June 30, 2000 and 1999. 4
Consolidated Statements of Cash Flows for the six months ended June
30, 2000 and 1999. 5
Consolidated Statements of Changes in Shareholders' Equity for the
periods of December 31, 1998 to June 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 4 - Submission of Matters to a Vote of Security Holders 12
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>
June 30, December 31,
2000 1999
------------- -------------
ASSETS (Unaudited) (Audited)
<S> <C> <C>
Cash and due from banks $ 24,042,820 $ 23,796,174
Interest-bearing deposits with other banks 605,021 912,838
Federal funds sold 1,266,611 680,024
------------- -------------
Total cash and cash equivalents 25,914,452 25,389,036
Investment securities available-for-sale 40,680,448 41,111,041
Investment securities held-to-maturity 19,115,625 20,125,225
Restricted equity securities 1,359,400 1,096,800
------------- -------------
Total investment securities 61,155,473 62,333,066
Loans held-for-sale 5,579,878 3,282,849
Loans, net of allowance for loan losses and unearned loan fees 285,970,988 243,692,191
Property and equipment, net of depreciation 13,751,937 12,008,224
Goodwill, net of amortization 8,332,029 8,646,341
Accrued interest receivable 4,031,279 2,902,601
Other assets 3,122,931 2,986,359
------------- -------------
Total assets $ 407,858,967 $ 361,240,667
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing demand deposits $ 86,718,784 $ 74,889,247
Interest-bearing demand accounts 132,245,119 130,148,498
Savings accounts 25,670,885 27,326,830
Time certificates 96,480,265 78,545,214
------------- -------------
Total deposits 341,115,053 310,909,789
Notes payable 26,102,126 10,870,318
Accrued interest payable and other liabilities 1,872,507 2,138,998
------------- -------------
Total liabilities 369,089,686 323,919,105
------------- -------------
Shareholders' equity:
Common stock, no par value; 20,000,000 shares
authorized, 8,013,422 issued and outstanding
(8,010,522 at December 31, 1999) 14,408,889 14,392,229
Additional paid-in capital 6,371,490 6,371,490
Retained earnings 18,775,941 17,272,137
Accumulated other comprehensive income, net of tax (787,039) (714,294)
------------- -------------
Total shareholders' equity 38,769,281 37,321,562
------------- -------------
$ 407,858,967 $ 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 Six months ended
June 30, June 30,
------------------------------- ---------------------------------
2000 1999 2000 1999
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $ 7,173,107 $ 5,446,851 $ 13,689,170 $ 10,515,754
Interest on investments
Taxable investment securities 598,557 549,909 1,205,985 976,049
Nontaxable investment securities 230,322 256,825 462,937 486,835
Other interest income 163,513 333,203 332,414 777,521
----------- ----------- ------------ ------------
Total interest income 8,165,499 6,586,788 15,690,506 12,756,159
INTEREST EXPENSE
Interest-bearing demand and savings 1,244,231 1,002,180 2,466,785 1,986,958
Interest on time deposit accounts 1,418,227 971,372 2,584,069 1,909,746
Other borrowed funds 403,895 118,382 646,505 234,802
----------- ----------- ------------ ------------
Total interest expense 3,066,353 2,091,934 5,697,359 4,131,506
----------- ----------- ------------ ------------
NET INTEREST INCOME 5,099,146 4,494,854 9,993,147 8,624,653
PROVISION FOR LOAN LOSSES 454,000 335,000 853,000 685,000
----------- ----------- ------------ ------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,645,146 4,159,854 9,140,147 7,939,653
NONINTEREST INCOME
Service charges and fees 636,029 523,211 1,201,258 1,022,924
Credit card discounts and fees 168,253 128,286 302,441 227,667
Financial services department income 127,228 98,953 242,262 184,242
Mortgage servicing revenue 426,579 298,909 724,223 545,330
Gain on sale of loans, net of discount (9,742) 53,125 4,494 118,015
Mortgage loan origination income 161,097 129,538 248,992 334,024
Other noninterest income 241,456 221,474 404,762 379,924
----------- ----------- ------------ ------------
Total noninterest income 1,750,900 1,453,496 3,128,432 2,812,126
NONINTEREST EXPENSE
Salaries and employee benefits 2,292,719 1,980,065 4,432,938 3,863,448
Occupancy expense 364,296 281,597 705,664 577,297
Credit card processing fees 124,032 107,574 226,069 177,145
Office Supplies 50,027 74,683 99,389 135,745
Data processing expense 145,703 142,285 263,025 281,219
Other noninterest expenses 1,290,946 1,144,700 2,346,184 2,140,243
----------- ----------- ------------ ------------
Total noninterest expense 4,267,723 3,730,904 8,073,269 7,175,097
----------- ----------- ------------ ------------
INCOME BEFORE INCOME TAXES 2,128,323 1,882,446 4,195,310 3,576,682
PROVISION FOR INCOME TAXES 778,428 724,497 1,569,509 1,319,423
----------- ----------- ------------ ------------
NET INCOME $ 1,349,895 $ 1,157,949 $ 2,625,801 $ 2,257,259
=========== =========== ============ ============
OTHER COMPREHENSIVE INCOME, NET
Unrealized gain or loss on AFS securities, net $ 89,542 $ (313,495) $ (74,896) $ (440,769)
Reclassification for gain included in net income -- (1,666) 2,151 (8,417)
----------- ----------- ------------ ------------
89,542 (315,161) (72,745) (449,186)
----------- ----------- ------------ ------------
COMPREHENSIVE INCOME $ 1,439,437 $ 842,788 $ 2,553,056 $ 1,808,073
=========== =========== ============ ============
Earnings per share of common stock
Net Income Basic $ 0.17 $ 0.15 $ 0.33 $ 0.28
Net Income Diluted $ 0.17 $ 0.14 $ 0.32 $ 0.28
Weighted average common shares outstanding
Basic 8,013,152 7,975,010 8,012,907 7,967,476
Diluted 8,087,934 8,102,877 8,087,843 8,098,791
</TABLE>
See accompanying notes.
4
<PAGE> 5
COLUMBIA BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six months ended
June 30,
---------------------------------
2000 1999
------------ ------------
<S> <C> <C>
CASH FLOWS RELATED TO OPERATING ACTIVITIES
Net income $ 2,625,801 $ 2,257,259
Adjustments to reconcile net income to net cash from operating activities:
Loss (Gain) on sale or call of investments 2,151 (8,417)
Depreciation and amortization 721,381 648,307
Federal Home Loan Bank stock dividend (40,100) (41,100)
Provision for loan losses 853,000 685,000
Increase (decrease) in cash due to changes in assets/liabilities
Accrued interest receivable (1,128,678) (573,717)
Other assets (136,573) (2,596,470)
Accrued interest payable and other liabilities (266,491) 344,625
------------ ------------
NET CASH FROM OPERATING ACTIVITIES 2,630,491 715,487
------------ ------------
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 300,000 8,478,290
Proceeds from the maturity of held-to-maturity securities 1,002,564 1,022,541
Purchases of held-to-maturity securities -- (5,645,434)
Purchases of available-for-sale securities (507,245) (21,859,828)
Net purchase of restricted equity securities (222,500) 102,082
Net change in loans made to customers (45,428,826) (10,373,640)
Payments made for purchase of property and equipment (2,086,991) (2,246,374)
------------ ------------
NET CASH FROM INVESTING ACTIVITIES (46,436,810) (28,476,908)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in demand deposit and savings accounts 12,270,213 (8,121,814)
Net proceeds from time deposits 17,935,051 6,336,723
Net borrowings of debt 15,231,808 (1,103,845)
Dividends paid (1,121,997) (957,009)
Proceeds from stock options exercised and sales of common stock 16,660 114,397
------------ ------------
NET CASH FROM FINANCING ACTIVITIES 44,331,735 (3,731,548)
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 525,416 (31,492,969)
CASH AND CASH EQUIVALENTS, beginning of period 25,389,036 65,773,682
------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ 25,914,452 $ 34,280,713
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid in cash $ 5,669,205 $ 4,131,234
Taxes paid in cash $ 1,332,000 $ 1,301,736
SCHEDULE OF NONCASH ACTIVITIES
Change in unrealized loss on available-for-sale securities, net of tax $ (72,745) $ (449,186)
Cash dividend declared and payable after quarter-end $ 560,940 $ 478,596
</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 7,949,032 $14,125,315 $6,317,732 $ 14,257,975 $ 55,198 $ 34,756,220
(Audited)
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 8,010,522 14,392,229 6,371,490 17,272,137 (714,294) 37,321,562
(Audited)
Stock options exercised 2,900 16,660 -- -- -- 16,660
Cash dividend paid or declared -- -- -- (1,121,997) -- (1,121,997)
Net Income and Comprehensive
Income -- -- -- 2,625,801 (72,745) 2,553,056
--------- ----------- ---------- ------------ --------- ------------
BALANCE, June 30, 2000 8,013,422 $14,408,889 $6,371,490 $ 18,775,941 $(787,039) $ 38,769,281
========= =========== ========== ============ ========= ============
(Unaudited)
</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 six months ended June 30, 2000 are not necessarily
indicative of results to be anticipated for the year ending December 31,
2000.
2. Recent Corporate Activity
On November 30, 1999 Columbia merged its two subsidiary banks, CRB
and Valley Community Bank into a single operating entity. The
combination was designed to improve operating efficiency, strengthen the
company's commitment to community banking by more effectively sharing
the resources of the existing subsidiaries and develop a broader
regional brand identity. CRB is the remaining entity and remains a
wholly owned subsidiary of Columbia. The merger was accounted for as a
pooling of interests transaction.
3. Loans and Reserve for Loan Losses
The composition of the loan portfolio was as follows:
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------ -----------
(Unaudited) (Audited)
<S> <C> <C>
Commercial $ 70,982,469 $ 60,868,875
Agriculture 49,640,235 37,775,087
Real estate 151,148,563 130,313,434
Consumer 17,902,641 18,096,432
Other 1,480,265 827,362
------------ -----------
291,154,173 247,881,190
Allowance for loan losses (4,104,189) (3,298,460)
Deferred loan fees (1,078,996) (890,539)
------------ ------------
$285,970,988 $243,692,191
============ ============
</TABLE>
Transactions in the reserve for loan losses were as follows for the
six months ended June 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 853,000 685,000
Recoveries 22,221 65,222
Loans charged off (69,492) (101,528)
---------- ----------
Balance at end of period $4,104,189 $3,028,914
========== ==========
</TABLE>
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
7
<PAGE> 8
that are deemed fully collateralized on nonaccrual status to promote
better oversight and review of loan arrangements. Loans on nonaccrual
status at June 30, 2000 and December 31, 1999 were approximately
$491,000 and $394,000, respectively.
As of June 30, 2000, Columbia identified loans totaling $119,000 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 June 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, or other issued but
not yet required FASB Statements to materially impact the financial
condition or 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 second quarter of the new millennium for Columbia
Bancorp ("Columbia"):
- Reported record growth in loans, deposits and earnings
- Affiliated with LaSalle St. Securities, LLC, to provide brokerage
services and financial planning to customers in the Pendleton and
Hermiston, Oregon markets
- Unveiled Columbia River BankNet, an internet banking solution
Columbia reported net income of $2,625,801, or $.32 per diluted share
for the six months ended June 30, 2000. This represented a 16% increase in net
income, as compared to $2,257,259, or $.28 per diluted share, for the six months
ended June 30, 2000. Net income of $1,349,895, or $.17 per diluted share for the
quarter ended June 30, 2000 represented an increase of 17% in net income as
compared to $1,157,949, or $.14 per diluted share for the quarter ended June 30,
1999.
The net income added to shareholders' equity during the first six months
of 2000 was offset, in part, by dividends declared and paid of $1,121,997. A
first quarter dividend of $.07 per share was paid May 1 to shareholders of
record April 15. On June 29 the Bancorp board of directors declared a
second-quarter dividend of $.07 per share payable August 1 to shareholders of
record July 15. With the payment of the declared dividend, approximately 43% 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 six months ended June 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 June 30, 2000, total assets increased 13%, or approximately $46.6
million, over total assets at December 31, 1999. Major components of the change
in total assets were:
- $42.3 million increase in loans
- $2.3 million increase in loans held-for-sale
- $1.7 million increase in property and equipment
The increase in loans is reflected in increases in all loan categories,
except for consumer loans. 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 $30.2 million
during the first six months of 2000, specifically as follows:
- Noninterest-bearing deposits increased $11.8 million
- Interest-bearing demand deposits increased $2.1 million
- Savings deposits decreased $1.7 million
- Time certificate deposits increased $17.9 million
Driven by marketing promotions $15.8 million of the $17.9 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 $15.2 million in the six months ended June 30,
2000. Along with deposit growth, notes payable were used to fund the loan growth
experience in the quarter.
All other changes experienced in asset and liability categories during
the first six months of 2000 were comparatively modest.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Total interest income increased $2,934,347 for six months ended June 30,
2000, and $1,578,711 the quarter ended June 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 $1,565,853 for the six months
ended June 30, 2000, and $974,419 for the quarter ended June 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 $1,368,494 for the six
months ended June 30, 2000, and $604,292 for the quarter ended June 30, 2000 as
compared to the same periods in 1999. Diluted net income per common share
increased to $.32 for the first six months of 2000 from $.28 for the first six
months of 1999. Cash earnings, excluding the effect of depreciation and
amortization, in the first half of 2000 were $.36 per diluted share compared to
$.32 per diluted share in the like period a year ago.
Noninterest income increased $316,306 for the six months ended June 30,
2000 as compared to the same period in 1999. This increase is primarily
attributable to increased income generated by service charges and fees on
deposit accounts, and growth in the company's bankcard and financial services
departments. Mortgage servicing revenue increased, but due to rising interest
rates and the resultant slow down in new home loan originations and refinance
transactions, total noninterest income related to mortgage department activities
decreased $19,660 or 2%.
Noninterest expense increased $898,172 for the six months ended June 30,
2000, and $536,819 for the quarter ended June 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 formation and staffing of the newly opened Shevlin and Newberg branches 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 six months ended June 30, 2000, Columbia charged a $853,000
loan loss provision to operations, as compared to $685,000 charged during the
same period in 1999. Loans charged off, net of loan recoveries, was $47,271
during the six months ended June 30, 2000, as compared to net charged off loans
of $36,306 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 six months of
2000. The statement of cash flows includes operating, investing and financing
categories. Operating activities include net income of $2,625,801, 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 June 30, 2000, as
compared to regulatory minimums.
<TABLE>
<CAPTION>
At June 30, 2000 Regulatory Minimum
---------------- ------------------
<S> <C> <C>
Tier-one capital 9.37% 4%
Total risk-based capital 10.61% 8%
Leverage ratio 8.08% 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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of shareholders of Columbia Bancorp was held April
25, 2000. At the meeting, one item, the Election of Directors of Bancorp, was
put to a vote of the shareholders.
The directors nominated were elected to serve various terms. The
following shows results of the voting including term to be served for each
director.
<TABLE>
<CAPTION>
For Term Ended Votes For Votes Against Abstain
-------------- --------- ------------- -------
<S> <C> <C> <C> <C>
Richard E. Betz 2003 5,002,590 100 7,198
James J. Doran 2002 5,002,590 2,100 9,198
Ward Eason 2001 5,002,590 2,100 9,198
Jane F. Lee 2003 4,992,696 9,994 17,092
Jean S. McKinney 2003 4,999,512 3,178 10,276
</TABLE>
Directors continuing in office include Robert L.R. Bailey, Charles F.
Beardsley, William A. Booth, Dennis L. Carver, Terry L. Cochran, Donald T.
Mitchell, and James B. Roberson.
ITEM 5. OTHER INFORMATION
Affiliation with LaSalle St. Securities
Columbia's subsidiary, Columbia River Bank ("CRB") announced an affiliation with
La Salle St. Securities, LLC, through Trustime, Inc., in Pendleton, to provide
brokerage services and financial planning to customers in the Pendleton and
Hermiston markets. LaSalle St. Securities has provided a broad array of
investment products and services to its client base of banks, investment
advisors, independent registered representatives, and other since 1974.
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 June 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: August 10, 2000 /s/ Terry L. Cochran
------------------------------------
Terry L. Cochran
President & Chief Executive Officer
Dated: August 10, 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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