Columbia Bancorp posts 8% increase in earnings

2nd-quarter surprise attributed to rise in commercial lending


July 14, 1999|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Columbia Bancorp's net income rose 8 percent in the second quarter as commercial lending increased, the Columbia banking company said yesterday.

The company, the parent of Columbia Bank with 14 bank offices, reported income of $1.27 million for the three months that ended June 30, up from $1.18 million for the corresponding period a year earlier.

The company made 28 cents per diluted share in the quarter, beating analysts' consensus estimate by 2 cents per share. The earnings marked a 12 percent jump from 25 cents per diluted share in last year's quarter.

"They pleasantly surprised us for the quarter," said Collyn Bement, a banking analyst at Ferris, Baker Watts Inc. in Baltimore, who had estimated earnings of 27 cents per share.

Loan growth drove earnings, with the most notable increase, 37 percent, in commercial loans, Bement said.

"They've been making an effort to increase that line of their business," she said. "They've seen a lot of opportunity there and have been able to take small business customers away from bigger banks in the area. They're diversifying their loan portfolio, with a shift away from construction loans, and focusing more on commercial loans."

Net income for the first six months, $2.53 million, was 12.4 percent higher than in the first half of last year, the company said.

"The competitive environment has been pretty intense for about the last year," said John M. Bond Jr., Columbia's chief executive officer. The company's performance during the first two quarters "reflects favorably on the ability to produce earnings in a competitive environment," he said.

Assets rose 11.9 percent to $457.3 million in the quarter. Deposits were up 8.4 percent to $356.6 million. Net loans increased 9.8 percent to $294 million, which the 11-year-old company said reflected strong growth in its commercial and consumer loan portfolios.

The company's noninterest expense grew 3.8 percent to $3.955 million in the quarter, up from $3.611 in the second quarter of 1998.

Columbia Bancorp shares rose 37.5 cents to $13.625 yesterday.

Pub Date: 7/14/99

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