Columbia Bancorp Reports First Quarter 2009 Financial Results

THE DALLES, Ore., April 29 /PRNewswire-FirstCall/ -- Columbia Bancorp (Nasdaq:
CBBO), the bank holding company for Columbia River Bank, reported its
financial results for the first quarter of 2009. Columbia reported continued
progress on its strategic goal of rebalancing its balance sheet. During the
first quarter, gross loans decreased $27.7 million through a combination of
normal attrition and pay-downs, transfers to other real estate owned and loan
charge-offs. Primarily due to a loan loss provision of $9.7 million, Columbia
incurred a net loss of $6.9 million for the first quarter of 2009. "This
quarter we focused on continued management of problem loans, shrinking total
assets, reducing or eliminating discretionary expenses and reorganizing and
strengthening our special assets team," explained Terry Cochran, President and
CEO of Columbia. "Over time, we believe these efforts will contribute to
improved capital levels and a return to profitability."

In March, Columbia announced its plans to relocate its operations center to
The Dalles, Oregon where its corporate headquarters are located. Combined
with other restructuring and staff reductions late in 2008, the relocation is
expected to yield annual salary savings of approximately $3.0 million. "We
are excited that the relocation will add more than 30 new staff positions in
the Columbia River Gorge," said Cochran. "During the next couple of months,
our teams will be busy interviewing and hiring new employees, as well as
ensuring a smooth transition of operational functions." Columbia's retail
operations team will complete its relocation by the end of May, and the loan
operations team will relocate by the end of June.

At Columbia's Annual Meeting of Shareholders on April 23, 2009, Dr. Frank K.
Toda was elected to serve, in the future, on the Board of Directors. Dr. Toda
currently serves as President of Columbia Gorge Community College and achieved
the rank of Colonel during his 30 year career in the U.S. Air Force. Dr.
Toda's father, Frank Toda, was one of the original founders of Columbia River
Bank, serving on its organization committee in 1976. "We are looking forward
to welcoming Dr. Toda to the Board. His background, experience and
perspective will be of great benefit to Columbia," said Richard E. Betz,
Chairman of the Board.

BALANCE SHEET PERFORMANCE

During the first quarter of 2009, Columbia reduced gross loan totals to $836.3
million as of March 31, 2009, a 3% reduction from December 31, 2008. Deposits
totaled $937.2 million as of March 31, 2009, a decrease from December 31,
2008, which was primarily due to repayment of $47.9 million of wholesale
deposits. For the quarter ended March 31, 2009, the ratio of average gross
loans to average deposits measured 88.3%, compared to 89.1% for the quarter
ended December 31, 2008 and 98.5% for the quarter ended March 31, 2008. "Our
goal is to continue meeting the lending and credit needs of small businesses
and individuals using local deposits gathered in the communities we serve,"
said Cochran.

Investment securities totaled $42.2 million as of March 31, 2009, an increase
of $10.1 million from December 31, 2008. New purchases of U.S.
Government-backed securities in the first quarter allowed Columbia to earn
higher rates compared to overnight Federal Funds investments. In addition,
the securities are available to support liquidity requirements as needed.

CREDIT QUALITY

Non-performing assets ("NPAs") increased $4.3 million to $106.4 million as of
March 31, 2009, compared to $102.0 million as of December 31, 2008. New
property added to other real estate owned ("OREO") comprised $1.7 million of
the increase in NPAs. The remaining $2.6 million increase in NPAs was due to
an increase in non-accrual loans. This increase was a result of $18.4 million
of residential construction loans added to non-accrual status, offset by $11.0
million of charged-off loans and other reductions due to loan payoffs, the
movement of credits into OREO and a return of loans to performing status.

The following table presents a five quarter history of non-accrual loans:

Non-Accrual Loans by Type:
(dollars in thousands)
March 31, 2009 December 31, 2008
-------------- -----------------
Number Dollar Number Dollar
of Loans Amount of Loans Amount
-------- ------ -------- ------
Real estate secured loans:
Residential lots, sub-
divisions, home construction 71 $64,642 54 $63,119
Residential 10 3,850 9 3,454
Commercial real estate 8 6,054 6 5,290
Agricultural farmland (1) 9 12,061 6 15,094
Commercial and industrial 15 3,531 12 3,072
Agricultural production 5 4,627 7 2,173
Consumer 5 221 7 148
--- --- --- ---
123 $94,986 101 $92,350
=== ======= === =======

September 30, 2008 June 30, 2008
------------------ -------------
Number Dollar Number Dollar
of Loans Amount of Loans Amount
-------- ------ -------- ------
Real estate secured loans:
Residential lots, sub-
divisions, home construction 49 $49,959 12 $26,542
Residential 6 2,353 11 5,122
Commercial real estate 3 2,434 3 2,436
Agricultural farmland (1) 4 3,116 - -
Commercial and industrial 11 3,335 5 717
Agricultural production 2 1,994 2 59
Consumer 3 39 1 9
--- --- --- ---
78 $63,230 34 $34,885
=== ======= === =======

March 31, 2008
--------------
Number Dollar
of Loans Amount
-------- ------
Real estate secured loans:
Residential lots, sub-
divisions, home construction 2 $576
Residential 7 2,605
Commercial real estate 2 1,165
Agricultural farmland (1) - -
Commercial and industrial 2 45
Agricultural production 2 59
Consumer 2 9
--- ---
17 $4,459
=== ======

(1) Real estate-secured agricultural loans may be used for agricultural
production purposes.

Net charge-offs during the first quarter of 2009 totaled $11.0 million,
compared to $5.4 million for the fourth quarter of 2008 and $960,000 for the
first quarter of 2008. Approximately $6.0 million of charge-offs were related
to residential lot development credits where either new appraisals dictated
further impairment charges of collateral-dependent loans or where other loans
became totally collateral-dependent and were written down to the collateral
value. Approximately $5.0 million of charge-offs were related to two impaired
agricultural loans secured by real estate where the real estate collateral
values had fallen.

Provision for loan losses totaled $9.7 million for the first quarter of 2009,
compared to $9.0 million for the fourth quarter of 2008 and $3.1 million for
the first quarter of 2008. The provision for loan losses represents a
non-cash expense to set aside amounts for potential future loan losses
inherent in the portfolio, based on risks identified as of the balance sheet
date. Increases to the provision in the current period primarily resulted
from specific allocations assigned to credits that are being stressed by the
national economy.

Allowance for credit losses (including liability for unfunded loan
commitments), as reflected in Columbia's balance sheet, totaled $23.9 million,
or 2.9% of gross loans, as of March 31, 2009, $25.2 million, or 2.9% of gross
loans, as of December 31, 2008 and $14.2 million, or 1.6% of gross loans, as
of March 31, 2008.

Detailed review of classified loans, including non-accrual loans, continues to
be a primary credit initiative at Columbia. Loss allocations are recognized
immediately when collateral value declines are evident and loans are not
performing according to original terms. In addition, loans internally risk
rated at moderate levels are receiving heightened scrutiny at all levels of
management to identify credit weaknesses at their earliest point. This allows
for timely resolution of these identified weaknesses to prevent migration to a
troubled loan status. Also, staffing increases and organizational structure
changes in Columbia's special assets team are allowing for more effective and
immediate collection efforts.

In March, the Federal Deposit Insurance Corporation ("FDIC") and the U.S.
Department of the Treasury ("Treasury") announced details of a new joint
Legacy Loans Program ("LLP"). The LLP is designed to boost private demand for
distressed assets that are currently held by banks and facilitate
market-priced sales of troubled assets. Under the program, the FDIC and
Treasury will partner with private investors to purchase troubled assets from
banks in exchange for FDIC-backed notes payable to the banks. "As we await
further details of the Legacy Loans Program, we are proactively reviewing our
loan portfolio to identify loans we would consider selling," explained Craig
Hummel, Chief Credit Officer. "Depending on how the program develops,
Columbia could benefit substantially from the sales of certain loans, which
would help raise our capital ratios."

NET INTEREST INCOME AND MARGIN

Net interest income before provision for loan losses totaled $6.8 million for
the first quarter of 2009, compared to $6.9 million for the fourth quarter of
2008 and $12.4 million for the first quarter of 2008. During the first
quarter of 2009, $730,000 of interest income was reversed as loans were placed
on non-accrual status. Including this amount of reversed interest, Columbia
was unable to recognize additional interest income of $2.1 million relating to
loans currently on non-accrual status.

Net interest margin was 2.79% for the first quarter of 2009, compared to 2.60%
for the fourth quarter of 2008 and 5.15% for the first quarter of 2008.
Compared to the fourth quarter of 2008, net interest margin increased 19 basis
points due to higher loan yields as average loan balances declined and due to
lower interest rates paid on demand deposits. Net interest margin declined
since the first quarter of 2008 following a series of cuts in the Fed Funds
rate (225 basis points since March 31, 2008). Because approximately 73% of
Columbia's loans are variable rate, loan yields declined significantly as
interest rates were cut. If non-accrual loans had performed according to
original terms, the net interest margin would have improved by 85 basis points
for the first quarter of 2009.

"We expect continued improvement in our net interest margin over the next few
quarters, as our efforts to replace expensive wholesale funds with retail
deposits have a positive effect on the bank's overall cost of funds,"
explained Staci Coburn, Executive Vice President and Chief Financial Officer.
"During the first quarter 2009, $42.3 million in brokered certificates of
deposits matured without replacement, with an average rate of 4.08%. We
expect to mature an additional $92.9 million in brokered certificates of
deposits without replacement, with an average rate of 4.31%, by the end of
2009."

OPERATING EXPENSES

Non-interest expense totaled $10.9 million for the first quarter of 2009,
compared to $17.3 million for the fourth quarter of 2008 and $10.5 million for
the first quarter of 2008. Salaries and benefits for the first three months
of 2009 were lower than the prior year periods due to staffing reductions and
suspension of company contributions to employee retirement plans. In
addition, no bonuses or incentive compensation were awarded during the first
quarter of 2009. As of March 31, 2009, Columbia's total employee count was
330, compared to 428 as of March 31, 2008. Occupancy expense for the first
quarter of 2009 trended slightly higher than prior year periods following
completion of permanent branch facilities in Yakima and Sunnyside, Washington
in 2008, and lease expense related to administration facilities in Vancouver,
Washington. FDIC premiums and state assessments increased significantly,
totaling $1.9 million for the first quarter of 2009, compared to $280,000 for
the fourth quarter of 2008 and $165,000 for the first quarter of 2008.

CAPITAL

As of March 31, 2009, Columbia River Bank is considered adequately-capitalized
for regulatory purposes. Columbia believes it will be prudent to maintain
higher capital levels given the significant amount of troubled assets. The
following table presents the regulatory capital ratios for Columbia River
Bank:

Adequately- Well-Capitalized
Capitalized Thresholds for
Thresholds Columbia River Bank March 31, 2009
Total risk-based capital 8.00% 10.00% 8.35%
Tier 1 risk-based capital 4.00% 6.00% 7.08%
Leverage ratio 4.00% 10.00% 5.97%

For the near term, Columbia River Bank intends to remain
adequately-capitalized by regulatory definition, and plans to prudently manage
its capital in order to return to well-capitalized status as soon as possible.
Over the next several quarters, Columbia anticipates capital levels will
improve based on continued rebalancing of loans and deposits, combined with
cost cutting initiatives and resolution of non-performing assets. Efforts to
improve capital levels are partially dependent on an economic recovery taking
hold. In particular, Columbia would benefit from stabilization and
improvement in real estate values, which would provide greater opportunity to
resolve non-performing loans.

Columbia believes its regional markets may benefit from various infrastructure
projects and stimulus programs funded by the recently passed American Recovery
and Reinvestment Act. Projects throughout Columbia's markets may contribute
to stabilization and recovery of local economies, including:

-- $2 billion cleanup project at the Department of Energy Hanford Site in
Kennewick, Washington. News of the stimulus project allowed the
Energy
Department to continue employment of 250 contractors and 4,000 jobs
are
expected to be created or saved as a result of the stimulus.

-- $19 million new building construction for the Oregon National Guard
Armory located in The Dalles, Oregon on the campus of Columbia Gorge
Community College.

Columbia continues to consider and assess the benefits of the following
strategies to raise capital levels, including the following:

-- Continued reductions in other overhead expenses
-- Sale and leaseback of branch facilities
-- Sale and/or lease of excess branch property
-- Sale and/or participation of loans
-- Raise capital from third party investors

-- Participation in Legacy Loans Program or other government relief
programs

SUMMARY

"Although we continue to be challenged by the current economy, since problems
began developing in 2008 we have aggressively responded with changes in our
leadership structure and operations, including significant staffing cuts at
all levels of the organization and overhead expense reductions. Our cost
cutting measures were designed to ensure minimal effects on customer service
levels. We will continue to make tough decisions to ensure the long-term
viability of Columbia River Bank and we are committed to moving back to our
roots with the values and principles of community banking," concluded Cochran.

ABOUT COLUMBIA BANCORP
Columbia Bancorp (www.columbiabancorp.com) is the bank holding company for
Columbia River Bank, which operates 21 branches located in The Dalles (2),
Hood River, Bend (3), Madras, Redmond (2), Pendleton, Hermiston, McMinnville,
Canby, and Newberg, Oregon, and in Goldendale, White Salmon, Sunnyside,
Yakima, Pasco, Richland, and Vancouver, Washington. To supplement its
community banking services, Columbia River Bank also provides 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 which 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 maintain and grow our deposit base in the face of continuing
uncertainty surrounding the financial institutions industry and our markets in
particular; our ability to raise additional capital to address the risk of
exacerbated or protracted economic declines; our ability to estimate
accurately the collectability of our loans and mitigate the potential risks
associated with acquisition and sale of any underlying collateral; economic
and other factors which affect the collectability of our loans generally; our
ability to address the risks associated with the geographic and
industry-specific concentrations of our loan portfolio; the impact of banking
laws and regulations, competition, and fluctuations in market interest rates
on Columbia's revenues and margins, management's ability to generate growth
from core operations in the face of the announced staffing reductions, 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 release is accurate
as of the date on which the release was issued, 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 per share data and ratios)

Three Months Ended
------------------
March 31, December 31, % March 31, %
2009 2008 Change 2008 Change
---- ---- ------ ---- ------
Interest income $12,886 $13,626 -5% $18,465 -30%
Interest expense 6,122 6,776 -10% 6,103 -
----- ----- -----
Net interest income before
provision for loan losses 6,764 6,850 -1% 12,362 -45%
Provision for loan losses 9,700 9,010 8% 3,050 218%
----- ----- -----
Net interest income (loss)
after provision for loan
losses (2,936) (2,160) -36% 9,312 -132%

Non-interest income:
Service charges and fees 1,207 1,326 -9% 1,158 4%
Mortgage loan origination
income - 74 -100% 925 -100%
Payment system revenue,
net 214 178 20% 122 75%
Financial services
revenue 172 232 -26% 270 -36%
Credit card discounts
and fees 91 149 -39% 143 -36%
Other non-interest income 543 289 88% 463 17%
--- --- ---
Total non-interest
income 2,227 2,248 -1% 3,081 -28%

Non-interest expense:
Salaries and employee
benefits 4,267 4,444 -4% 5,874 -27%
Occupancy expense 1,540 1,454 6% 1,311 17%
Goodwill impairment - 7,389 -100% - -
Loss on real estate owned 50 369 -86% - -
FDIC premiums and
state assessments 1,928 280 589% 165 1068%
Other non-interest
expense 3,125 3,339 -6% 3,116 -
----- ----- -----
Total non-interest
expense 10,910 17,275 -37% 10,466 4%
------ ------ ------

Income (loss) before
provision for income
taxes (11,619) (17,187) 32% 1,927 -703%
Provision for (benefit
from) income taxes (4,717) (3,906) -21% 708 -766%
------ ------ ---
Net income (loss) $(6,902) $(13,281) 48% $1,219 -666%
======= ======== ======

Earnings (loss) per
common share:
Basic $(0.69) $(1.32) 48% $0.12 -675%
Diluted (0.69) (1.32) 48% 0.12 -675%
Cumulative dividend per
common share - - - 0.10 -100%

Book value per common share $6.78 $7.45 -9% $10.21 -34%
Tangible book value per
common share (1) 6.78 7.45 -9% 9.48 -29%

Weighted average shares
outstanding:
Basic 10,030 10,028 10,014
Diluted 10,030 10,028 10,109
Actual shares outstanding 10,065 10,067 10,048

Quarter Ended
-------------
March 31, December 31, March 31,
RATIOS 2009 2008 2008
---- ---- ----
Interest rate yield on interest-
earning assets, tax equivalent 5.30% 5.16% 7.69%
Interest rate expense on interest-
bearing liabilities 3.07% 3.22% 3.43%
Interest rate spread, tax equivalent 2.22% 1.94% 4.26%
Net interest margin, tax equivalent 2.79% 2.60% 5.15%
Efficiency ratio (2) 121.34% 108.66% 67.77%
Return on average assets -2.59% -4.64% 0.48%
Return on average equity -38.64% -61.74% 4.75%
Average equity / average assets 6.71% 7.52% 10.01%

(1) Total common equity, less goodwill and other intangible assets,
divided by actual shares outstanding.
(2) Non-interest expense divided by net interest income and non-interest
income, excluding goodwill impairment.

BALANCE SHEET
(Unaudited)
(In thousands)
Quarter Year
over over
Quarter Year
March 31, December 31, % March 31, %
2009 2008 Change 2008 Change
ASSETS ---- ---- ------ ---- ------
Cash and cash
equivalents $103,655 $182,479 -43% $64,149 62%
Investment securities 42,155 32,076 31% 34,242 23%
Loans:
Commercial loans 133,173 127,598 4% 128,082 4%
Agricultural loans 68,413 74,630 -8% 66,619 3%
Real estate loans 380,353 389,801 -2% 379,019 -
Real estate loans -
construction 236,851 253,683 -7% 290,996 -19%
Consumer loans 13,417 14,414 -7% 12,275 9%
Loans held for sale - - - 14,091 -100%
Other loans 4,110 3,878 6% 11,328 -64%
----- ----- ------
Total gross loans 836,317 864,004 -3% 902,410 -7%

Unearned loan fees (562) (562) - (994) 43%
Allowance for loan
losses (23,222) (24,492) 5% (13,264) -75%
------- ------- -------
Net loans 812,533 838,950 -3% 888,152 -9%

Property and equipment,
net 22,777 23,628 -4% 22,877 -
Other real estate owned 11,329 9,622 18% 7,315 55%
Goodwill - - - 7,389 -100%
Other assets 42,623 35,539 20% 22,038 93%
------ ------ ------
Total assets $1,035,072 $1,122,294 -8% $1,046,162 -1%
========== ========== ==========

LIABILITIES
Deposits:
Non-interest
bearing demand
deposits $183,285 $215,922 -15% $205,348 -11%
Interest bearing
demand
deposits 277,520 271,244 2% 319,465 -13%
Savings accounts 30,793 30,873 - 35,146 -12%
Time certificates 445,610 486,157 -8% 341,005 31%
------- ------- -------
Total deposits 937,208 1,004,196 -7% 900,964 4%

Borrowings 23,441 36,613 -36% 33,802 -31%
Other liabilities 6,210 6,436 -4% 8,782 -29%
----- ----- -----
Total liabilities 966,859 1,047,245 -8% 943,548 2%

Shareholders' equity 68,213 75,049 -9% 102,614 -34%
------ ------ -------
Total liabilities
and shareholders'
equity $1,035,072 $1,122,294 -8% $1,046,162 -1%
========== ========== ==========

ADDITIONAL FINANCIAL INFORMATION
(Unaudited)
(In thousands, except ratios)

March 31, December 31, March 31,
NON-PERFORMING ASSETS 2009 2008 2008
---- ---- ----
Delinquent loans on non-accrual status $94,986 $92,350 $4,459
Restructured loans 46 57 73
-- -- --
Total non-performing loans 95,032 92,407 4,532
Other real estate owned 11,329 9,622 7,315
Repossessed other assets - - 5
--- --- ---
Total non-performing assets $106,361 $102,029 $11,852
======== ======== =======

Total non-performing assets /
total assets 10.28% 9.09% 1.13%

Quarter Ended
-------------
March 31, December 31, March 31,
ALLOWANCE FOR CREDIT LOSSES 2009 2008 2008
---- ---- ----
Allowance for loan losses, beginning
of period $24,492 $20,927 $11,174
Provision for loan losses 9,700 9,010 3,050
Recoveries 75 93 84
Charge offs (11,045) (5,538) (1,044)
------- ------ ------
Allowance for loan losses, end
of period 23,222 24,492 13,264
Liability for unfunded loan
commitments 706 681 889
--- --- ---
Allowance for credit losses $23,928 $25,173 $14,153
======= ======= =======

Allowance for loan losses /
gross loans 2.78% 2.83% 1.47%
Allowance for credit losses /
gross loans 2.86% 2.91% 1.57%
Non-performing loans / allowance for
loan losses 409.23% 377.29% 34.17%

Quarter Ended
-------------
March 31, December 31, March 31,
FINANCIAL PERFORMANCE 2009 2008 2008
---- ---- ----
Average interest earning assets $990,145 $1,054,643 $968,805
Average loans, net of unearned
loan fees 855,819 897,690 891,725
Average assets 1,079,152 1,138,310 1,031,205
Average interest bearing liabilities 807,708 836,842 715,962
Average interest bearing deposits 776,806 799,761 700,660
Average deposits 969,778 1,008,503 906,340
Average liabilities 1,006,711 1,052,742 927,931
Average equity 72,441 85,568 103,274

March 31, 2009
--------------
CONSTRUCTION LOANS BY REGION Residential Commercial Total
----------- ---------- -----
Columbia River Gorge $15,225 $2,604 $17,829
Columbia Basin - Eastern Washington 6,884 16,357 23,241
Columbia Basin - Northeastern Oregon 6,763 4,649 11,412
Central Oregon 67,867 36,550 104,417
Willamette Valley (1) 68,807 11,145 79,952
------ ------ ------
$165,546 $71,305 $236,851
======== ======= ========

December 31, 2008
-----------------
CONSTRUCTION LOANS BY REGION Residential Commercial Total
----------- ---------- -----
Columbia River Gorge $16,416 $2,372 $18,788
Columbia Basin - Eastern Washington 11,404 20,152 31,556
Columbia Basin - Northeastern Oregon 6,872 4,742 11,614
Central Oregon 70,076 37,479 107,555
Willamette Valley (1) 71,885 12,285 84,170
------ ------ ------
$176,653 $77,030 $253,683
======== ======= ========

March 31, 2008
--------------
CONSTRUCTION LOANS BY REGION Residential Commercial Total
----------- ---------- -----
Columbia River Gorge $13,115 $3,959 $17,074
Columbia Basin - Eastern Washington 11,025 14,019 25,044
Columbia Basin - Northeastern Oregon 5,866 4,506 10,372
Central Oregon 92,648 34,291 126,939
Willamette Valley (1) 105,524 6,043 111,567
------- ----- -------
$228,178 $62,818 $290,996
======== ======= ========

(1) Includes Portland, Oregon and Vancouver, Washington metropolitan area

SOURCE Columbia Bancorp

Terry L. Cochran, President and CEO, +1-541-298-6633,
tcochran@columbiabancorp.com, or Staci L. Coburn, Executive Vice President and
CFO, +1-541-298-3169, scoburn@columbiariverbank.com, both of Columbia Bancorp