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                      1998 DEFERRED COMPENSATION AGREEMENT

        This 1998 Deferred Compensation Agreement (the "Agreement") is made and
entered into this 1st day of May, 1998 by and between Columbia Bancorp, an
Oregon corporation ("Bancorp") and Terry L. Cochran ("Employee").

                                    RECITALS

        (1)     Bancorp is an Oregon corporation and is the holding company of
Columbia River Banking Company (the "Bank"), a state-chartered Oregon financial
institution with its principal office in The Dalles, Oregon.

        (2)     Employee is now employed full-time by Bancorp as President and
Chief Executive Officer of Bancorp and of the Bank. Employee has served as
President and Chief Executive Officer of Bancorp since its formation in 1995,
and has served in many positions at the Bank, including President and Chief
Executive Officer, since 1981.

        (3)     Bancorp recognizes the contributions that Employee has made to
the success and profitability of the Bank and of Bancorp, and desires to provide
deferred compensation and other consideration to Employee as compensation for
his services and for the confidentiality covenants set forth in the Agreement.

                Now, therefore, it is agreed:

        1.      Deferred Compensation.

        1.1     Employee shall become eligible for deferred compensation under
the Agreement upon his retirement as a full-time employee of Bancorp; provided,
that in no event shall Employee be entitled to deferred compensation payments
under the Agreement prior to May 15, 2000 regardless of the date of Employee's
termination of employment by retirement or otherwise.

        1.2     Beginning on the first 15th day of May immediately following the
date of Employee's retirement, and on the 15th day of May of each year
thereafter through and including May 15, 2006, Bancorp shall pay Employee
deferred compensation consisting of (i) $26,000 per year, plus (ii) Accrued
Interest as provided in Section 1.3 herein.

        1.3     Payment of the Accrued Interest described in Section 1.2(ii) has
been provided for by the purchase of a $120,000 market rate certificate of
deposit (the "CD") on December 26, 1995. The CD, which has been or shall be
replaced upon maturity as required from time to time to fulfill the terms of the
Agreement, was purchased to fund such payments. Upon the maturity of the CD a
new market rate certificate of deposit shall be purchased with a comparable
maturity for the same purpose as long as Employee is entitled to deferred
compensation payments under the Agreement. Any interest earned (the "Accrued
Interest") on the CD and any subsequent certificates of deposit purchased under
the Agreement shall be paid to Employee as follows: (i) on the first May 15 on
which Employee is paid his first yearly deferred compensation payment under the
Agreement, Employee shall also be paid all Accrued Interest earned from the
first date the CD and any subsequent certificates of deposit began earning
interest 


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through the May 15 of the year in which Employee is paid such first yearly
payment; (ii) on the 15th day of May of each year thereafter through and
including May 15, 2006, Employee shall be paid all Accrued Interest earned from
the CD and any subsequent certificates of deposit from May 15 of the previous
calendar year through May 15 of the current payment year.

        1.4     For the purposes of this Agreement, Employee shall be deemed
"retired" on and as of the date of occurrence of one or more of the following:
(i) the date of expiration of Employee's term of employment under the Employment
Agreement between the parties of May 1, 1998 where such term has not been
extended; (ii) the effective date of termination of Employee's employment by
Bancorp or by Employee, with or without cause; or (iii) such other date on which
the parties may mutually agree in writing.

        1.5     If prior to retirement Employee is terminated by Bancorp with
cause, Employee shall not be entitled to any deferred compensation payments or
any benefits under Section 1.6 or elsewhere in the Agreement, and the Agreement
shall as of such termination date be null and void.

        1.6     As additional consideration under the Agreement, from and after
the date of Employee's retirement through May 15, 2006, Bancorp shall provide
Employee with all medical, dental, disability, vision and life insurance which
Bancorp or the Bank provides to full-time employees.

        2.      Change of Control.

        2.1     If there is a change of control of Bancorp on or at any time
prior to May 15, 2006, Employee shall continue to be entitled to receive the
deferred compensation provided in Section 1 of the Agreement.

        2.2     If Employee is a participant in a restricted stock plan or share
option plan, and such plan is terminated involuntarily as a result of the change
of control, all stock and options shall be declared fully vested and shall be
distributed. With respect to any unexercised options under any stock option
plan, such options may be exercised within the period provided in such plan.
Effective as of the date of the change of control, any holding period
established for stock paid as bonus or other compensation shall be deemed
terminated, except as otherwise provided by law.

        2.3     As used in this Section, "control" shall mean the acquisition of
twenty-five percent (25%) or more of the voting securities of Bancorp by any
person, or persons acting as a group within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, or to such acquisition of a percentage between
ten percent (10%) and twenty-five percent (25%) if the Board or the Comptroller
of the Currency, the FDIC, or the Federal Reserve Bank have made a determination
that such acquisition constitutes or will constitute control of Bancorp. The
term "person" refers to an individual, corporation, Bank, bank holding company,
or other entity, but excludes any Employee Stock Ownership Plan established for
the benefit of employees of Bancorp or any of its subsidiaries.


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        3.      Covenants.

        3.1     Employee shall at all times fully cooperate with Bancorp and its
affiliates in the defense or prosecution of any litigation arising from or
relating to matters about which Employee has knowledge based on his employment
or other work, paid or unpaid, for Bancorp and its affiliates.

        3.2     Employee shall at all times keep all confidential and
proprietary information gained from his employment by Bancorp, or other previous
and present paid or unpaid work for Bancorp and its affiliates, in strictest
confidence, and will not disclose or otherwise disseminate such information to
anyone, other than to Board members or employees of Bancorp or its affiliates,
except as may be required by law, regulation or subpoena.

        4.      Miscellaneous.

        4.1     Employee's retirement shall not be deemed a retirement or
general termination under any provision of Bancorp's 1996 Stock Incentive Plan
or under any provision of any successor Plan, and shall therefore not limit the
time within which Employee may exercise his stock option rights thereunder,
except as otherwise provided under the Plan or any successor plan or under
applicable law.

        4.2     Each and every portion of the Agreement is contractual and not a
mere recital, and all recitals shall be deemed incorporated into the Agreement.
The Agreement shall be governed by and interpreted according to Oregon law and
any applicable federal law. The Agreement may not be amended except by a
subsequent written agreement signed by all parties hereto.

        4.3     The Agreement contains the entire understanding and agreement of
the parties with respect to the parties' relationship, and all prior
negotiations, discussions or understandings, oral or written, are hereby
integrated herein. No prior negotiations, discussions or agreements not
contained herein or in such documents shall be binding or enforceable against
the parties.

        4.4     The Agreement shall be effective and binding upon the parties as
of and from and after May 1, 1998 until its expiration or termination as
provided herein. Employee's rights under the Agreement are in addition to
Employee's rights under the Employment Agreement of May 1, 1998 between the
parties.

        4.5     The Agreement may be signed in several counterparts. The
signature of one party on any counterpart shall bind such party just as if all
parties had signed that counterpart. Each counterpart shall be considered an
original. All counterparts of the Agreement shall together constitute one
original document.

        4.6     All rights and duties of Bancorp under the Agreement shall be
binding on and inure to the benefit of Bancorp's successors and assigns,
including any person or entity which acquires a controlling interest Bancorp and
any person or entity which acquires all or substantially all of Bancorp's
assets. Bancorp and any such successor or assign shall be and remain jointly and
severally liable to Employee under the 


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Agreement. Employee may not assign or transfer Employee's rights or interests in
or under the Agreement other than by a will or by the laws of descent and
distribution.

        4.7     The Agreement, including the payment rights provided in the
Agreement, shall inure to the benefit of and be enforceable by Employee's estate
or legal representative. Without limitation of the foregoing, it is understood
and agreed that if Employee's employment is terminated prior to the first date
on which Employee becomes eligible for the deferred compensation payments
provided under the Agreement, and if such termination is due to death,
disability or any other reason, other than termination with cause as described
in Section 1.5 herein, the Employee or his estate shall be entitled to all
deferred compensation payments hereunder from and after the first such date of
eligibility.

        4.8     Any waiver by any party hereto of any provision of the
Agreement, or of any breach thereof, shall not constitute a waiver of any other
provision or of any other breach. If any provision, paragraph or subparagraph
herein shall be deemed invalid, illegal or unenforceable in any respect, the
validity and enforceability of the remaining provisions, paragraphs and
subparagraphs shall not be affected.

        4.9     Any dispute, controversy, claim or difference concerning or
arising from the Agreement or the rights or performance of either party under
the Agreement, including disputes about the interpretation or construction of
the Agreement, shall be settled through binding arbitration in the State of
Oregon and in accordance with the rules of the American Arbitration Association.
A judgment upon the award rendered in such arbitration may be entered in any
court of competent jurisdiction.

        4.10    The Agreement supersedes and replaces the Deferred Compensation
Agreement between Employee and Bancorp of May 1, 1997, and the latter agreement
shall be deemed null and void as of May 1, 1998.


_______________________________________
Terry L. Cochran


COLUMBIA BANCORP

By:____________________________________
      Chairman