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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended:December 31, 2006
 or
 o
    
    TRANSITION REPORT UNDER 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
  Oregon
(State of incorporation)
    
    93-1193156
(I.R.S. Employer
Identification No.)
 
   Title of each class Common stock, no par value
    
    Name of each exchange on which registeredNASDAQ Global Select Market
  o þ
 o þ
 þ o
 o
  o þ o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE
    1- Columbia Bancorp




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##### 



TABLE OF CONTENTS
 PAGEDISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
    
    
    3PART I
    
    
    
    
    3ITEM 1
    
    BUSINESS
    
    
    3ITEM 1A
    
    RISK FACTORS
    
    
    14ITEM 1B
    
    UNRESOLVED STAFF COMMENTS
    
    
    15ITEM 2
    
    PROPERTIES
    
    
    16ITEM 3
    
    LEGAL PROCEEDINGS
    
    
    17ITEM 4
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    17PART II
    
    
    
    
    18ITEM 5
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    18ITEM 6
    
    SELECTED FINANCIAL DATA
    
    
    20ITEM 7
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    21ITEM 7A.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    46ITEM 8
    
    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    47ITEM 9
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
    
    
    80ITEM 9A.
    
    CONTROLS AND PROCEDURES
    
    
    80ITEM 9B
    
    OTHER INFORMATION
    
    
    81PART III
    
    
    
    
    81ITEM 10
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    81ITEM 11
    
    EXECUTIVE COMPENSATION
    
    
    82ITEM 12
    
    SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
    
    
    82ITEM 13
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
    
    
    82ITEM 14
    
    PRINCIPAL ACCOUNTING FEES AND SERVICES
    
    
    82PART IV
    
    
    
    
    82ITEM 15
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES
    
    
    82SIGNATURES
    
    
    
    
    85EXHIBIT 13.1EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2
  Columbia Bancorp -2




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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
 This Annual Report on Form 10-K contains various forward-looking statements that are intended to be
covered by the safe harbor provided by Section 21D of the Securities Exchange Act of 1933, as
amended. These statements include statements about our present plans and intentions, about our
strategy, growth, and deployment of resources, and about our expectations for future financial
performance. Forward-looking statements use prospective language, 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
current plans, they are subject to various risks and uncertainties that could cause our actions and
our financial and operational results to differ materially from those projected in forward-looking
statements. These risks and uncertainties include, without limitation, the risks described in Part
I  Item 1A Risk Factors.
 Information presented in this report is accurate as of the date the report is filed with the SEC.
We do not undertake any duty to update our forward-looking statements or the factors that may cause
us to deviate from them, except as required by law.
 
 PART I
 
 ITEM 1
    
    BUSINESS
 General
    3- Columbia Bancorp




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Oregon
    
    WashingtonCentral Oregon
    
    Bend
Madras
    
    RedmondColumbia Basin
    
    Hermiston
Pendleton
    
    
    
    Richland
Pasco
    
    Sunnyside
YakimaColumbia River Gorge
    
    Hood River
The Dalles
    
    
    
    GoldendaleWhite SalmonWillamette Valley
    
    CandyLake Oswego
    
    McMinnville
 Newberg
   2006 Business Developments
 th
    Columbia Bancorp - 4




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Business Strategy
 th
 Operate Successfully in Small to Medium Sized Communities 
 Maintain High Asset Quality 
 Products and Services
 Consumer Distribution Channels
 Retail Bank Products and Services
 5- Columbia Bancorp




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CRB Mortgage Team Products and Services
 CRB Financial Services Team Products and Services
 Technology-Based Products and Services
 Commercial Distribution Channels
   Commercial Loans
 Agricultural Loans
 Columbia Bancorp - 6




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Real Estate Loans
  Government-Assisted Loan Programs
 Services to Non-Profits and Public Entities
 Deposit and Related Products
 Cash Management Services
 Investment Products
 7- Columbia Bancorp




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Principal Markets of Operation
    Competition
     Columbia Bancorp - 8




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SUPERVISION AND REGULATION
 General
  Gramm-Leach-Bliley Financial Services Modernization Act
   Holding Company Bank Ownership
 Holding Company Control of Nonbanks
 Transactions with Affiliates
 9- Columbia Bancorp




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Tying Arrangements
 Federal and State Bank Regulation
 General
 Community Reinvestment Act (CRA)
 Insider Credit Transactions
 FDICIA
 Interstate Banking and Branching
   Columbia Bancorp- 10




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Deposit Insurance
   Dividends
  Capital Adequacy
   11- Columbia Bancorp




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Effects of Government Monetary Policy
  Columbia Bancorp - 12




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Sarbanes-Oxley Act of 2002
  Changes in Banking Laws and Regulations
  Employees
  Directors and Executive Officers
  Website Access to Reports
  13- Columbia Bancorp




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ITEM 1A
    
    RISK FACTORS
  Adequacy of Loan Loss Allowance 
 Growth Management
 Changes in Market Interest Rates 
 Liquidity
 Columbia
Bancorp - 14




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Geographic Concentration 
 Regulation 
  Competition 
 Credit Risk 
  
 ITEM 1B UNRESOLVED STAFF COMMENTS
  Columbia Bancorp




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ITEM 2 PROPERTIES
   YearSquare
    
    Opened or
    
    OccupancyCity and County
    
    Address
    
    Feet
    
    Acquired
    
    StatusOregon BranchesThe Dalles (Main)
Wasco County
    
    316 East Third Street
    
    
    11,441
    
    
    1977
    
    OwnedThe Dalles (Cherry Heights)
Wasco County
    
    500 Cherry Heights Rd
    
    
    1,800
    
    
    2006
    
    OwnedHood River Branch
Hood River County
    
    2650 Cascade Avenue
    
    
    6,875
    
    
    1993
    
    OwnedMadras Branch
Jefferson County
    
    624 SW Fourth Street
    
    
    7,660
    
    
    1995
    
    OwnedRedmond Branch
Deschutes County
    
    434 North Fifth Street
    
    
    5,900
    
    
    1995
    
    OwnedSouth Redmond Branch
Deschutes County
    
    1502 SW Odem Medo Rd
    
    
    5,078
    
    
    2004
    
    LeasedBend Branch
Deschutes County
    
    1701 NE Third Street
    
    
    8,306
    
    
    1996
    
    OwnedShevlin Center Branch(1)
Deschutes County
    
    925 SW Emkay Drive
    
    
    15,000
    
    
    1999
    
    OwnedBend Limited Facility(2)
Deschutes County
    
    1010 NE Purcell Blvd
    
    
    80
    
    
    2002
    
    OtherWall Street Branch
Deschutes County
    
    1133 Wall Street
    
    
    12,421
    
    
    2004
    
    LeasedHermiston Branch
Umatilla County
    
    1033 South Highway 395
    
    
    4,700
    
    
    1998
    
    OwnedPendleton Branch
Umatilla County
    
    2101 SW Court Place
    
    
    4,700
    
    
    1999
    
    OwnedMcMinnville Branch(1)
Yamhill County
    
    723 N Baker
    
    
    9,893
    
    
    1998
    
    OwnedMcMinnville Limited Facility(2)
Yamhill County
    
    900 NW Hill Road
    
    
    60
    
    
    1998
    
    OtherMcMinnville Limited Facility(2)
Yamhill County
    
    300 NW Hillside Pkwy
    
    
    60
    
    
    2001
    
    OtherCanby Branch
Clackamas County
    
    223 NE 2nd Street
    
    
    3,615
    
    
    2001
    
    Leased
 Columbia Bancorp




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YearSquare
    
    Opened or
    
    OccupancyCity and County
    
    Address
    
    Feet
    
    Acquired
    
    StatusNewberg Branch
Yamhill County
    
    901 N Brutscher St, Ste A
    
    
    3,900
    
    
    1999
    
    LeasedLake Oswego Loan Office
Clackamas County
    
    5665 SW Meadows Rd.
    
    
    3,466
    
    
    2006
    
    LeasedWashington BranchesWhite Salmon Branch
Klickitat County
    
    390 NE Tohomish Street
    
    
    5,500
    
    
    1996
    
    OwnedGoldendale Branch
Klickitat County
    
    202 West Main Street
    
    
    6,105
    
    
    1996
    
    OwnedMeadow Springs Branch
Benton County
    
    139 Gage
    
    
    10,000
    
    
    2006
    
    LeasedPasco Branch
Franklin County
    
    4725 Road 68
    
    
    3,700
    
    
    2006
    
    OwnedYakima Branch
    
    501 W. Lincoln Ave,Yakima County
    
    Ste B
    
    
    2,341
    
    
    2006
    
    LeasedSunnyside Branch
    
    2640 Yakima Valley Hwy,Yakima County
    
    Ste 3
    
    
    1,653
    
    
    2006
    
    LeasedOther FacilitiesThe Dalles Administration
Wasco County, OR
    
    401 E Third St, Suite 200
    
    
    22,199
    
    
    2002
    
    Leased
 
 (1)
    
    Branch operations are located on the first floor. The second floor is available for lease to
other parties.(2)
    
    CRB has an agreement in place that does not require financial payment for these
limited-branch facilities. 
 ITEM 3 LEGAL PROCEEDINGS
  Smith-Rattray Farms, et al., v. Columbia River Bank, et al.
  
 ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  Columbia Bancorp




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PART II
 
 ITEM 5
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
    Table 1
 2006
    
    2005 (1)Stock Trading Range
    
    Cash Dividend
    
    Stock Trading Range
    
    Cash DividendHigh
    
    Low
    
    Declared
    
    High
    
    Low
    
    DeclaredFirst Quarter
    
    $
    23.88
    
    
    $
    20.06
    
    
    $
    0.09
    
    
    $
    17.06
    
    
    $
    15.91
    
    
    $
    0.08Second Quarter
    
    
    27.45
    
    
    
    21.80
    
    
    
    0.10
    
    
    
    18.02
    
    
    
    15.91
    
    
    
    0.08Third Quarter
    
    
    26.00
    
    
    
    22.34
    
    
    
    0.10
    
    
    
    19.68
    
    
    
    17.03
    
    
    
    0.08Fourth Quarter
    
    
    28.05
    
    
    
    23.43
    
    
    
    0.10
    
    
    
    22.08
    
    
    
    18.51
    
    
    
    0.09
 
 (1)
    
    Adjusted to reflect the 10% stock dividend, effective December 29, 2005. Securities authorized for issuance under equity compensation plans
  Table 2
 Number of securitiesremaining available forNumber of securities to be
    
    Weighted-average
    
    future issuance underissued upon exercise of
    
    exercise price of
    
    equity compensation plansoutstanding options,
    
    outstanding options,
    
    (excluding securitieswarrants and rights
    
    warrants and rights
    
    reflected in column (a))(a)
    
    (b)
    
    (c)Equity compensation
plans approved by
security holders
    
    
    513,768
    
    
    $
    11.62
    
    
    
    463,491Equity compensation
plans not approved
by security holders
    
    
    
    
    
    $
    
    
    
    
    
 Columbia Bancorp




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Performance Graph
  COLUMBIA
BANCORP
 
 
 Sales of Unregistered Securities
  Purchases of Equity Securities
  Columbia Bancorp




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ITEM 6 SELECTED FINANCIAL DATA
  Table 3
 As of and for the Years Ended December 31,(dollars in thousands except dollars per share data)
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Income Statement DataInterest income
    
    $
    70,674
    
    
    $
    53,589
    
    
    $
    42,708
    
    
    $
    38,230
    
    
    $
    37,616Interest expense
    
    
    18,002
    
    
    
    11,302
    
    
    
    7,328
    
    
    
    6,831
    
    
    
    7,782Net interest income
    
    
    52,672
    
    
    
    42,287
    
    
    
    35,380
    
    
    
    31,399
    
    
    
    29,834Loan loss provision
    
    
    2,900
    
    
    
    3,115
    
    
    
    2,760
    
    
    
    2,575
    
    
    
    1,800Net income
    
    
    15,775
    
    
    
    13,670
    
    
    
    10,735
    
    
    
    9,834
    
    
    
    9,381Balance Sheet DataInvestment securities
    
    $
    37,704
    
    
    $
    36,780
    
    
    $
    45,398
    
    
    $
    31,682
    
    
    $
    36,048Total loans, net
    
    
    801,871
    
    
    
    677,686
    
    
    
    574,125
    
    
    
    464,350
    
    
    
    432,687Total assets
    
    
    1,033,188
    
    
    
    841,239
    
    
    
    715,373
    
    
    
    584,136
    
    
    
    544,326Total deposits
    
    
    859,065
    
    
    
    707,822
    
    
    
    606,944
    
    
    
    496,358
    
    
    
    458,624Shareholders equity
    
    
    91,018
    
    
    
    77,492
    
    
    
    65,877
    
    
    
    57,804
    
    
    
    50,190Per Share DataEarnings per common shareBasic earnings per common share (1)
    
    $
    1.60
    
    
    $
    1.39
    
    
    $
    1.11
    
    
    $
    1.03
    
    
    $
    0.96Diluted earnings per common share(1)
    
    
    1.55
    
    
    
    1.36
    
    
    
    1.08
    
    
    
    0.99
    
    
    
    0.93Cash dividends declared per common share (1)
    
    
    0.39
    
    
    
    0.33
    
    
    
    0.32
    
    
    
    0.28
    
    
    
    0.24Book value per common share(1)
    
    
    9.12
    
    
    
    7.86
    
    
    
    6.78
    
    
    
    6.01
    
    
    
    5.27Capital RatiosTier I capital ratio (2)
    
    
    10.11
    %
    
    
    9.70
    %
    
    
    9.80
    %
    
    
    10.46
    %
    
    
    9.71
    %Total risk-based capital ratio (3)
    
    
    11.36
    
    
    
    10.95
    
    
    
    11.05
    
    
    
    11.71
    
    
    
    10.96Leverage ratio(4)
    
    
    8.54
    
    
    
    9.77
    
    
    
    8.74
    
    
    
    9.19
    
    
    
    8.57Financial RatiosReturn on average assets
    
    
    1.79
    %
    
    
    1.77
    %
    
    
    1.64
    %
    
    
    1.71
    %
    
    
    1.80
    %Return on average equity
    
    
    18.72
    
    
    
    19.01
    
    
    
    17.50
    
    
    
    18.25
    
    
    
    18.80
 
 1)
    
    Prior periods have been adjusted to reflect 10% stock dividend effective May 1, 2003
and 10% stock dividend effective December 29, 2005(2)
    
    Tier I capital divided by risk-weighted assets(3)
    
    Total regulatory capital divided by risk-weighted assets(4)
    
    Tier I capital divided by average total assets Columbia Bancorp




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ITEM 7 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 This section contains forward-looking statements and should be read after considering Disclosure
Regarding Forward-Looking Statements at the beginning of this document, as well as the Risk
Factors in Item 1A of this document. The following discussion should also be read in conjunction
with our audited consolidated financial statements and accompanying notes as of December 31, 2006
and 2005 and for each of the three years ended December 31, 2006, 2005 and 2004, included elsewhere
in this report.
 Critical Accounting Policies
    Overview
   Columbia Bancorp




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Table 4
 (dollars in thousands except percentages and per share data)
    
    2006
    
    2005
    
    2004Total assets
    
    $
    1,033,188
    
    
    $
    841,239
    
    
    $
    715,373Total loans, gross (1)
    
    
    813,443
    
    
    
    688,724
    
    
    
    583,865Total deposits
    
    
    859,065
    
    
    
    707,822
    
    
    
    606,944Net income
    
    
    15,775
    
    
    
    13,670
    
    
    
    10,735Earnings per diluted common share (2)
    
    
    1.55
    
    
    
    1.36
    
    
    
    1.08Return on average assets
    
    
    1.79
    %
    
    
    1.77
    %
    
    
    1.64
    %Return on average equity
    
    
    18.72
    
    
    
    19.01
    
    
    
    17.50Net interest margin, tax equivalent basis
    
    
    6.44
    
    
    
    5.95
    
    
    
    5.95Efficiency ratio
    
    
    55.00
    
    
    
    53.67
    
    
    
    54.86Cash dividend payout ratio
    
    
    24.56
    
    
    
    24.12
    
    
    
    29.54
 
 (1)
    
    Loans include portfolio and loans held for sale and exclude allowance for loan losses
and unearned loan fees.(2)
    
    Prior periods adjusted to retroactively reflect the 10% stock dividend issued in 2006 Columbia Bancorp




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Financial Highlights
 2006 compared to 2005
 
    
    New branches in Richland, Pasco, Yakima and Sunnyside, Washington contributed
$45.95 million in loan growth and $43.17 million in deposit growth, as well as increases in
net interest income and non-interest expenses.
    
    Loan growth of 18% from our new and existing branches, combined with Federal
Reserve interest rate increases, increased loan interest income $16.46 million, or 33%.
    
    Net interest margin increased from 5.95% to 6.44% due to the effect of rising
interest rates. The positive effect of rising interest rates on our variable rate loan
portfolio outpaced the negative effect from our borrowings and deposit accounts.
    
    Salaries and benefits increased $3.97 million, or 24%, primarily due to
employees hired to staff new branch and administrative positions, annual merit increases and
market salary adjustments.
 2005 compared to 2004
 
    
    Loan portfolio growth of 18% and continued rate increases on variable rate
loans, resulted in $9.33 million, or 23%, increase in loan interest income, which was
partially offset by a $3.97 million, or 54.22%, increase in interest expense.
    
    As deposit growth outpaced loan growth, excess liquidity earned $1.18 million in
federal funds interest an increase of $975,873, or 485.00%.
    
    Provision for loan losses increased $355,000 due to overall loan portfolio
growth and an increase in net charged-off loans of $586,144.
    
    Based upon the achievement of financial and operational goals, incentive
compensation expense increased $1.61 million, or 117.77%.
    
    Salaries and benefits, excluding incentive compensation, increased $1.52
million, or 13%, due to the hiring of personnel to staff our new branches, as well as the
addition of several new administrative positions in response to our growth.
  
    
    State of Oregon corporate kicker tax benefit of $328,250 contributed earnings of
$0.03 per diluted share.
    
    Gain from sale of the mortgage servicing asset of $560,588 contributed earnings
of $0.04 per diluted share, net of income tax.
    
    Collection of $336,000 in non-accrual interest associated with 2004 contributed
earnings of $0.02 per diluted share, net of income tax.
 Columbia Bancorp




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Operational Highlights
        Results of Operations
 Net Interest Income
  Columbia Bancorp




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Average Balances and Average Rates Earned and Paid
 Table 5
 Year Ended December 31, 2006
    
    
    Year Ended December 31, 2005
    
    
    Year Ended December 31, 2004Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income or
    
    
    Yields or
    
    
    Average
    
    
    Income or
    
    
    Yields or
    
    
    Average
    
    
    Income or
    
    
    Yields or(dollars in thousands)
    
    Balance
    
    
    Expense
    
    
    Rates
    
    
    Balance
    
    
    Expense
    
    
    Rates
    
    
    Balance
    
    
    Expense
    
    
    RatesInterest-earning assets:Loans (1)
    
    $
    744,067
    
    
    $
    67,027
    
    
    
    9.01
    %
    
    $
    623,656
    
    
    $
    50,572
    
    
    
    8.11
    %
    
    $
    544,945
    
    
    $
    41,240
    
    
    
    7.57
    %Investment securitiesTaxable securities
    
    
    23,463
    
    
    
    993
    
    
    
    4.23
    
    
    
    23,921
    
    
    
    746
    
    
    
    3.12
    
    
    
    16,846
    
    
    
    435
    
    
    
    2.58Nontaxable securities (2)
    
    
    11,849
    
    
    
    844
    
    
    
    7.12
    
    
    
    12,941
    
    
    
    905
    
    
    
    6.99
    
    
    
    13,296
    
    
    
    973
    
    
    
    7.32Total investment securities
    
    
    35,312
    
    
    
    1,837
    
    
    
    
    
    
    
    36,862
    
    
    
    1,651
    
    
    
    4.48
    
    
    
    30,142
    
    
    
    1,408
    
    
    
    4.67Interest earning balances due from banks
    
    
    14,563
    
    
    
    689
    
    
    
    4.73
    
    
    
    17,699
    
    
    
    496
    
    
    
    2.80
    
    
    
    12,031
    
    
    
    215
    
    
    
    1.79Federal funds sold
    
    
    28,394
    
    
    
    1,416
    
    
    
    4.99
    
    
    
    37,615
    
    
    
    1,177
    
    
    
    3.13
    
    
    
    13,940
    
    
    
    201
    
    
    
    1.44Total interest earning assets
    
    
    822,336
    
    
    
    70,969
    
    
    
    8.63
    
    
    
    715,832
    
    
    
    53,896
    
    
    
    7.53
    
    
    
    601,058
    
    
    
    43,064
    
    
    
    7.16Nonearning assets
    
    
    58,745
    
    
    
    
    
    
    
    
    
    
    
    55,820
    
    
    
    
    
    
    
    
    
    
    
    54,616Total assets
    
    $
    881,081
    
    
    
    
    
    
    
    
    
    
    $
    771,652
    
    
    
    
    
    
    
    
    
    
    $
    655,674Interest bearing liabilities:Interest bearing demand and
savings accounts
    
    $
    320,481
    
    
    $
    6,931
    
    
    
    2.16
    %
    
    $
    287,504
    
    
    $
    4,051
    
    
    
    1.41
    %
    
    $
    230,826
    
    
    $
    1,476
    
    
    
    0.64
    %Time deposits and IRAs
    
    
    219,084
    
    
    
    9,407
    
    
    
    4.29
    
    
    
    174,495
    
    
    
    5,893
    
    
    
    3.38
    
    
    
    157,854
    
    
    
    4,554
    
    
    
    2.89Borrowed funds
    
    
    33,746
    
    
    
    1,664
    
    
    
    4.93
    
    
    
    33,652
    
    
    
    1,358
    
    
    
    4.04
    
    
    
    38,093
    
    
    
    1,298
    
    
    
    3.41Total interest bearing liabilities
    
    
    573,311
    
    
    
    18,002
    
    
    
    3.14
    
    
    
    495,651
    
    
    
    11,302
    
    
    
    2.28
    
    
    
    426,773
    
    
    
    7,328
    
    
    
    1.72Non-interest bearing deposits
    
    
    219,526
    
    
    
    
    
    
    
    
    
    
    
    198,316
    
    
    
    
    
    
    
    
    
    
    
    163,953Total deposits and borrowed funds
    
    
    792,837
    
    
    
    
    
    
    
    
    
    
    
    693,967
    
    
    
    
    
    
    
    
    
    
    
    590,726Other liabilities
    
    
    3,986
    
    
    
    
    
    
    
    
    
    
    
    5,766
    
    
    
    
    
    
    
    
    
    
    
    3,615Total liabilities
    
    
    796,823
    
    
    
    
    
    
    
    
    
    
    
    699,733
    
    
    
    
    
    
    
    
    
    
    
    594,341Shareholders equity
    
    
    84,258
    
    
    
    
    
    
    
    
    
    
    
    71,919
    
    
    
    
    
    
    
    
    
    
    
    61,333Total liabilities and
shareholders equity
    
    $
    881,081
    
    
    
    
    
    
    
    
    
    
    $
    771,652
    
    
    
    
    
    
    
    
    
    
    $
    655,674Net interest income (tax equivalent)
    
    
    
    
    
    $
    52,967
    
    
    
    
    
    
    
    
    
    
    $
    42,594
    
    
    
    
    
    
    
    
    
    
    $
    35,736Net interest income (as reported)
    
    
    
    
    
    $
    52,671
    
    
    
    
    
    
    
    
    
    
    $
    42,287
    
    
    
    
    
    
    
    
    
    
    $
    35,380Average yield on average earning assets
    
    
    
    
    
    
    
    
    
    
    8.63
    %
    
    
    
    
    
    
    
    
    
    
    7.53
    %
    
    
    
    
    
    
    
    
    
    
    7.16
    %Interest expense to average earning assets
    
    
    
    
    
    
    
    
    
    
    2.19
    %
    
    
    
    
    
    
    
    
    
    
    1.58
    %
    
    
    
    
    
    
    
    
    
    
    1.22
    %Net interest margin (3)
    
    
    
    
    
    
    
    
    
    
    6.44
    %
    
    
    
    
    
    
    
    
    
    
    5.95
    %
    
    
    
    
    
    
    
    
    
    
    5.95
    %Net interest spread
    
    
    
    
    
    
    
    
    
    
    5.49
    %
    
    
    
    
    
    
    
    
    
    
    5.25
    %
    
    
    
    
    
    
    
    
    
    
    5.44
    %
 
 (1)
    
    Average balance is net of unearned loans fees and includes
non-accrual loans and loans held-for-sale.(2)
    
    Tax-exempt income has been adjusted to a tax-equivalent basis at a rate of 35%(3)
    
    Net interest margin is computed by dividing net interest income (taxable equivalent
basis) by total average interest earning assets.  Columbia Bancorp




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##### Table of Contents



Analysis of Changes in Interest Differential
 Table 6
 2006 over 2005
    
    
    2005 over 2004
    
    
    2004 over 2003Increase (Decrease) due to
    
    
    Increase (Decrease) due to
    
    
    Increase (Decrease) due toNet
    
    
    
    
    
    
    
    
    
    
    Net
    
    
    
    
    
    
    
    
    
    
    Net(dollars in thousands)
    
    Volume
    
    
    Rate
    
    
    Change
    
    
    Volume
    
    
    Rate
    
    
    Change
    
    
    Volume
    
    
    Rate
    
    
    ChangeInterest earning assets:Loans
    
    $
    9,772
    
    
    $
    6,683
    
    
    $
    16,455
    
    
    $
    5,971
    
    
    $
    3,361
    
    
    $
    9,332
    
    
    $
    7,100
    
    
    $
    (2,356
    )
    
    $
    4,744Investment securitiesTaxable securities
    
    
    (14
    )
    
    
    261
    
    
    
    247
    
    
    
    182
    
    
    
    129
    
    
    
    311
    
    
    
    1
    
    
    
    (80
    )
    
    
    (79
    )Nontaxable securities
    
    
    (59
    )
    
    
    10
    
    
    
    (49
    )
    
    
    (20
    )
    
    
    1
    
    
    
    (19
    )
    
    
    (111
    )
    
    
    (1
    )
    
    
    (112
    )Balances due from banks
    
    
    (88
    )
    
    
    281
    
    
    
    193
    
    
    
    102
    
    
    
    179
    
    
    
    281
    
    
    
    (37
    )
    
    
    (34
    )
    
    
    (71
    )Federal funds sold
    
    
    (288
    )
    
    
    527
    
    
    
    239
    
    
    
    341
    
    
    
    635
    
    
    
    976
    
    
    
    (73
    )
    
    
    69
    
    
    
    (4
    )Total
    
    
    9,323
    
    
    
    7,762
    
    
    
    17,085
    
    
    
    6,576
    
    
    
    4,305
    
    
    
    10,881
    
    
    
    6,880
    
    
    
    (2,402
    )
    
    
    4,478Interest bearing liabilities:Interest bearing checking
and savings accounts
    
    
    468
    
    
    
    2,412
    
    
    
    2,880
    
    
    
    364
    
    
    
    2,211
    
    
    
    2,575
    
    
    
    88
    
    
    
    (209
    )
    
    
    (121
    )Time deposits
    
    
    1,512
    
    
    
    2,002
    
    
    
    3,514
    
    
    
    489
    
    
    
    850
    
    
    
    1,339
    
    
    
    918
    
    
    
    (387
    )
    
    
    531Borrowed funds
    
    
    5
    
    
    
    301
    
    
    
    306
    
    
    
    (150
    )
    
    
    210
    
    
    
    60
    
    
    
    374
    
    
    
    (287
    )
    
    
    87Total
    
    
    1,985
    
    
    
    4,715
    
    
    
    6,700
    
    
    
    703
    
    
    
    3,271
    
    
    
    3,974
    
    
    
    1,380
    
    
    
    (883
    )
    
    
    497Net increase (decrease) in
net interest income
    
    $
    7,338
    
    
    $
    3,047
    
    
    $
    10,385
    
    
    $
    5,873
    
    
    $
    1,034
    
    
    $
    6,907
    
    
    $
    5,500
    
    
    $
    (1,519
    )
    
    $
    3,981
     Columbia Bancorp




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##### Table of Contents



Provision for Loan Losses
    Non-interest Income
  Columbia Bancorp




---



##### Table of Contents




    
    Service charges and fees decreased primarily as a result of overdraft protection
changes we made to comply with new regulations.
    
    Mortgage banking revenue increased due to an increase in the volume of loan
originations.
    
    In order to balance our loans and deposits and add liquidity during 2006, we
sold $6.62 million of commercial real estate loans at a gain of $133,640.
    
    In 2005, we recognized $560,588 from gain on the sale of our mortgage servicing
asset.
  Non-interest Expense
      Columbia Bancorp




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##### Table of Contents



Income Taxes
    Financial Condition
 Table 7
 Summary Balance SheetsDecember 31,
    
    
    Increase (Decrease)(dollars in thousands)
    
    2006
    
    
    2005
    
    
    2004
    
    
    12/31/05  12/31/06
    
    
    12/31/04  12/31/05ASSETSFederal funds sold
    
    $
    58,930
    
    
    $
    29,282
    
    
    $
    20,286
    
    
    $
    29,648
    
    
    
    101
    %
    
    $
    8,996
    
    
    
    44
    %Investments
    
    
    37,704
    
    
    
    36,780
    
    
    
    45,398
    
    
    
    924
    
    
    
    3
    
    
    
    (8,618
    )
    
    
    (19
    )Total loans, net
    
    
    801,871
    
    
    
    677,686
    
    
    
    574,125
    
    
    
    124,185
    
    
    
    18
    
    
    
    103,561
    
    
    
    18Other assets (1)
    
    
    134,683
    
    
    
    97,491
    
    
    
    75,564
    
    
    
    37,192
    
    
    
    38
    
    
    
    21,927
    
    
    
    29Total assets
    
    $
    1,033,188
    
    
    $
    841,239
    
    
    $
    715,373
    
    
    $
    191,949
    
    
    
    23
    %
    
    $
    125,866
    
    
    
    18
    %LIABILITIESNon-interest bearing
deposits
    
    $
    235,037
    
    
    $
    220,450
    
    
    $
    172,422
    
    
    $
    14,587
    
    
    
    7
    %
    
    $
    48,028
    
    
    
    28
    %Interest bearing deposits
    
    
    624,028
    
    
    
    487,372
    
    
    
    434,522
    
    
    
    136,656
    
    
    
    28
    
    
    
    52,850
    
    
    
    12Total deposits
    
    
    859,065
    
    
    
    707,822
    
    
    
    606,944
    
    
    
    151,243
    
    
    
    21
    
    
    
    100,878
    
    
    
    17Other liabilities (2)
    
    
    83,105
    
    
    
    55,925
    
    
    
    42,552
    
    
    
    27,180
    
    
    
    49
    
    
    
    13,373
    
    
    
    31Total liabilities
    
    
    942,170
    
    
    
    763,747
    
    
    
    649,496
    
    
    
    178,423
    
    
    
    23
    
    
    
    114,251
    
    
    
    18SHAREHOLDERS EQUITY
    
    
    91,018
    
    
    
    77,492
    
    
    
    65,877
    
    
    
    13,526
    
    
    
    17
    
    
    
    11,615
    
    
    
    18Total liabilities and
shareholders equity
    
    $
    1,033,188
    
    
    $
    841,239
    
    
    $
    715,373
    
    
    $
    191,949
    
    
    
    23
    %
    
    $
    125,866
    
    
    
    18
    %
 
 (1)
    
    Includes cash and due from banks, property and equipment, accrued interest receivable and intangible goodwill.(2)
    
    Includes notes payable, accrued interest payable and other liabilities. Cash and Cash Equivalents
  29-
Columbia Bancorp




---



##### Table of Contents



Investments
  Table 8
 2006
    
    
    2005
    
    
    2004(dollars in thousands)
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentInvestments available-for-sale:U.S. Government obligations
    
    $
    19,827
    
    
    
    53
    %
    
    $
    16,680
    
    
    
    45
    %
    
    $
    23,899
    
    
    
    53
    %Municipal securities
    
    
    361
    
    
    
    1
    
    
    
    553
    
    
    
    1
    
    
    
    674
    
    
    
    2Equity securities
    
    
    638
    
    
    
    2
    
    
    
    611
    
    
    
    2
    
    
    
    606
    
    
    
    120,826
    
    
    
    56
    
    
    
    17,844
    
    
    
    48
    
    
    
    25,179
    
    
    
    56Investments held-to-maturity:Obligations of states and political
subdivisions
    
    
    11,230
    
    
    
    30
    
    
    
    12,053
    
    
    
    33
    
    
    
    12,535
    
    
    
    28Mortgage-backed securities
    
    
    3,129
    
    
    
    8
    
    
    
    4,363
    
    
    
    12
    
    
    
    5,174
    
    
    
    11U.S. Government obligations
    
    
    80
    
    
    
    
    
    
    
    81
    
    
    
    
    
    
    
    81
    
    
    
    14,439
    
    
    
    38
    
    
    
    16,497
    
    
    
    45
    
    
    
    17,790
    
    
    
    39Restricted equity securities
    
    
    2,439
    
    
    
    6
    
    
    
    2,439
    
    
    
    7
    
    
    
    2,429
    
    
    
    5Total investment securities
    
    $
    37,704
    
    
    
    100
    %
    
    $
    36,780
    
    
    
    100
    %
    
    $
    45,398
    
    
    
    100
    %
       Columbia Bancorp




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##### Table of Contents



Table 9
 December 31, 2006
    
    
    December 31, 2005
    
    
    December 31, 2004Amortized
    
    
    Estimated
    
    
    %
    
    
    Amortized
    
    
    Estimated
    
    
    %
    
    
    Amortized
    
    
    Estimated
    
    
    %(dollars in thousands)
    
    Cost
    
    
    Fair Value
    
    
    Yield(1)
    
    
    Cost
    
    
    Fair Value
    
    
    Yield(1)
    
    
    Cost
    
    
    Fair Value
    
    
    Yield(1)U.S. Government
agencies:One year or less
    
    $
    6,687
    
    
    $
    6,617
    
    
    
    5.29
    %
    
    $
    8,347
    
    
    $
    8,258
    
    
    
    4.92
    %
    
    $
    9,287
    
    
    $
    9,287
    
    
    
    3.94
    %One to five years
    
    
    14,225
    
    
    
    14,111
    
    
    
    5.20
    
    
    
    12,664
    
    
    
    12,393
    
    
    
    4.80
    
    
    
    19,496
    
    
    
    19,355
    
    
    
    3.88Five to ten years
    
    
    36
    
    
    
    37
    
    
    
    6.42
    
    
    
    441
    
    
    
    435
    
    
    
    4.15
    
    
    
    215
    
    
    
    217
    
    
    
    4.73Over ten years
    
    
    2,267
    
    
    
    2,223
    
    
    
    4.63
    
    
    
    7
    
    
    
    7
    
    
    
    6.18
    
    
    
    303
    
    
    
    305
    
    
    
    4.67Obligations of states
and political
subdivisions:One year or less
    
    
    281
    
    
    
    282
    
    
    
    5.78
    
    
    
    1,171
    
    
    
    1,173
    
    
    
    5.17
    
    
    
    155
    
    
    
    156
    
    
    
    2.93One to five years
    
    
    3,830
    
    
    
    3,857
    
    
    
    6.06
    
    
    
    3,031
    
    
    
    3,081
    
    
    
    6.27
    
    
    
    3,267
    
    
    
    3,375
    
    
    
    4.93Five to ten years
    
    
    7,474
    
    
    
    7,597
    
    
    
    6.06
    
    
    
    7,943
    
    
    
    8,198
    
    
    
    6.16
    
    
    
    9,124
    
    
    
    9,590
    
    
    
    6.16Over ten years
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    449
    
    
    
    437
    
    
    
    6.89
    
    
    
    627
    
    
    
    683
    
    
    
    6.15Total debt securities
    
    
    34,800
    
    
    
    34,724
    
    
    
    5.47
    %
    
    
    34,053
    
    
    
    33,982
    
    
    
    5.32
    %
    
    
    42,474
    
    
    
    42,968
    
    
    
    4.46
    %Equity securities
    
    
    619
    
    
    
    638
    
    
    
    
    
    
    
    596
    
    
    
    611
    
    
    
    
    
    
    
    577
    
    
    
    606Restricted equity securities
    
    
    2,439
    
    
    
    2,439
    
    
    
    
    
    
    
    2,439
    
    
    
    2,439
    
    
    
    
    
    
    
    2,429
    
    
    
    2,429Total securities
    
    $
    37,858
    
    
    $
    37,801
    
    
    
    
    
    
    $
    37,088
    
    
    $
    37,032
    
    
    
    
    
    
    $
    45,480
    
    
    $
    46,003
 
 (1)
    
    Weighted average yields are stated on a federal tax equivalent basis at a rate of 35% and have
been annualized, where appropriate. 31-
Columbia Bancorp




---



##### Table of Contents



Loans
   Table 10
 2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002(dollars in thousands)
    
    Amount
    
    
    Percentage
    
    
    Amount
    
    
    Percentage
    
    
    Amount
    
    
    Percentage
    
    
    Amount
    
    
    Percentage
    
    
    Amount
    
    
    PercentageCommercial
    
    $
    136,582
    
    
    
    17
    %
    
    $
    101,261
    
    
    
    15
    %
    
    $
    93,618
    
    
    
    16
    %
    
    $
    86,163
    
    
    
    19
    %
    
    $
    69,882
    
    
    
    16
    %Agricultural
    
    
    86,218
    
    
    
    11
    
    
    
    84,271
    
    
    
    12
    
    
    
    79,224
    
    
    
    14
    
    
    
    64,059
    
    
    
    14
    
    
    
    61,770
    
    
    
    15Real estate secured loans:Commercial property
    
    
    243,391
    
    
    
    31
    
    
    
    199,065
    
    
    
    30
    
    
    
    156,175
    
    
    
    27
    
    
    
    125,359
    
    
    
    27
    
    
    
    100,918
    
    
    
    24Farmland
    
    
    44,178
    
    
    
    5
    
    
    
    46,518
    
    
    
    7
    
    
    
    50,585
    
    
    
    9
    
    
    
    42,301
    
    
    
    9
    
    
    
    35,748
    
    
    
    8Construction
    
    
    212,826
    
    
    
    27
    
    
    
    184,331
    
    
    
    27
    
    
    
    139,415
    
    
    
    25
    
    
    
    87,427
    
    
    
    19
    
    
    
    91,036
    
    
    
    21Residential
    
    
    46,547
    
    
    
    6
    
    
    
    30,955
    
    
    
    5
    
    
    
    29,584
    
    
    
    5
    
    
    
    34,295
    
    
    
    7
    
    
    
    42,688
    
    
    
    10Home equity lines
    
    
    13,410
    
    
    
    2
    
    
    
    14,747
    
    
    
    2
    
    
    
    10,701
    
    
    
    2
    
    
    
    4,799
    
    
    
    1
    
    
    
    2,102
    
    
    
    1Total real estate
    
    
    560,352
    
    
    
    71
    
    
    
    475,616
    
    
    
    71
    
    
    
    386,460
    
    
    
    68
    
    
    
    294,181
    
    
    
    63
    
    
    
    272,492
    
    
    
    64Consumer
    
    
    12,541
    
    
    
    1
    
    
    
    13,775
    
    
    
    2
    
    
    
    14,386
    
    
    
    2
    
    
    
    18,242
    
    
    
    4
    
    
    
    20,937
    
    
    
    5Other
    
    
    10,212
    
    
    
    1
    
    
    
    7,923
    
    
    
    1
    
    
    
    7,660
    
    
    
    1
    
    
    
    6,975
    
    
    
    1
    
    
    
    6,499
    
    
    
    2Total loans
    
    
    805,905
    
    
    
    101
    
    
    
    682,846
    
    
    
    101
    
    
    
    581,348
    
    
    
    101
    
    
    
    469,620
    
    
    
    101
    
    
    
    431,580
    
    
    
    102Less unearned loan fees
    
    
    (1,428
    )
    
    
    
    
    
    
    (1,513
    )
    
    
    
    
    
    
    (1,556
    )
    
    
    
    
    
    
    (1,450
    )
    
    
    
    
    
    
    (1,245
    )
    
    
    Less allowance for loan losses
    
    
    (10,144
    )
    
    
    (1
    )
    
    
    (9,526
    )
    
    
    (1
    )
    
    
    (8,184
    )
    
    
    (1
    )
    
    
    (6,612
    )
    
    
    (1
    )
    
    
    (6,417
    )
    
    
    (2
    )Loans receivable, net
    
    $
    794,333
    
    
    
    100
    %
    
    $
    671,807
    
    
    
    100
    %
    
    $
    571,608
    
    
    
    100
    %
    
    $
    461,558
    
    
    
    100
    %
    
    $
    423,918
    
    
    
    100
    %Volume change from prior year
    
    
    
    
    
    
    18
    %
    
    
    
    
    
    
    18
    %
    
    
    
    
    
    
    24
    %
    
    
    
    
    
    
    9
    %
    
    
    
    
    
    
    17
    %
  
    
    New branches in Yakima, Sunnyside and Pasco, Washington along with our expanded Meadow
Springs branch in Richland, Washington contributed $45.95 million in loan growth.
    
    Continued strong demand for construction and commercial real estate loans throughout our
market areas added $55.57 million to loan growth during 2006, excluding new branch
activity.
    
    Commercial loans increased $35.32 million due to a focus on commercial and industrial
lending and two large commercial loans added in the fourth quarter of 2006.
    Columbia Bancorp




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##### Table of Contents



Table 11
 December 31, 2006Less than
    
    
    3 months-
    
    
    
    
    
    
    
    
    
    
    Over
    
    
    Total(dollars in thousands)
    
    3 months
    
    
    1 year
    
    
    1-5 years
    
    
    5-10 years
    
    
    10 years
    
    
    loansCommercial loans
    
    $
    79,140
    
    
    $
    5,445
    
    
    $
    41,892
    
    
    $
    9,744
    
    
    $
    361
    
    
    $
    136,582Agricultural loans
    
    
    74,924
    
    
    
    3,053
    
    
    
    7,668
    
    
    
    573
    
    
    
    
    
    
    
    86,218Real estate secured loans:Commercial property
    
    
    44,935
    
    
    
    37,126
    
    
    
    125,367
    
    
    
    31,949
    
    
    
    4,014
    
    
    
    243,391Farmland
    
    
    5,918
    
    
    
    9,811
    
    
    
    24,018
    
    
    
    2,292
    
    
    
    2,139
    
    
    
    44,178Construction
    
    
    198,580
    
    
    
    4,588
    
    
    
    8,798
    
    
    
    477
    
    
    
    383
    
    
    
    212,826Residential
    
    
    16,857
    
    
    
    4,533
    
    
    
    12,520
    
    
    
    7,889
    
    
    
    4,748
    
    
    
    46,547Home equity lines
    
    
    13,285
    
    
    
    
    
    
    
    107
    
    
    
    18
    
    
    
    
    
    
    
    13,410Total real estate loans
    
    
    279,575
    
    
    
    56,058
    
    
    
    170,810
    
    
    
    42,625
    
    
    
    11,284
    
    
    
    560,352Consumer
    
    
    7,646
    
    
    
    484
    
    
    
    3,584
    
    
    
    664
    
    
    
    163
    
    
    
    12,541Other
    
    
    7,463
    
    
    
    
    
    
    
    985
    
    
    
    400
    
    
    
    1,364
    
    
    
    10,212Total loans
    
    $
    448,748
    
    
    $
    65,040
    
    
    $
    224,939
    
    
    $
    54,006
    
    
    $
    13,172
    
    
    $
    805,905Loans with fixed interest rates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    121,700Loans with variable interest rates  daily reprice
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    432,003Loans with variable interest rates  other than daily
reprice
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    252,202Total loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    805,905Loans with rate floors
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    375,105Loans with variable interest rates  daily reprice 
on or under rate floors
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,830Loans with variable interest rates  other than daily
reprice  on or under rate floors
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    67,398
  33-
Columbia Bancorp




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##### Table of Contents



Allowance for Loan and Lease Losses
  
    
    Loss allocation to groups of loans by internal risk grade
    
    Loss allocation by loan type
    
    Loss allocation by historical loss percentage
    Columbia Bancorp




---



##### Table of Contents



Table 12
 2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Percent ofPercent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    Percent of
    
    
    
    
    
    
    loans inloans in
    
    
    
    
    
    
    loans in
    
    
    
    
    
    
    loans in
    
    
    
    
    
    
    loans in
    
    
    
    
    
    
    eacheach
    
    
    
    
    
    
    each
    
    
    
    
    
    
    each
    
    
    
    
    
    
    each
    
    
    
    
    
    
    categorycategory to
    
    
    
    
    
    
    category to
    
    
    
    
    
    
    category to
    
    
    
    
    
    
    category to
    
    
    
    
    
    
    to total(dollars in thousands)
    
    Amount
    
    
    total loans
    
    
    Amount
    
    
    total loans
    
    
    Amount
    
    
    total loans
    
    
    Amount
    
    
    total loans
    
    
    Amount
    
    
    loansCommercial
    
    $
    1,784
    
    
    
    17
    %
    
    $
    1,084
    
    
    
    15
    %
    
    $
    1,438
    
    
    
    16
    %
    
    $
    1,355
    
    
    
    18
    %
    
    $
    906
    
    
    
    16
    %Agricultural
    
    
    3,161
    
    
    
    11
    
    
    
    3,281
    
    
    
    12
    
    
    
    2,396
    
    
    
    14
    
    
    
    1,430
    
    
    
    14
    
    
    
    1,415
    
    
    
    14Real estate
    
    
    2,979
    
    
    
    70
    
    
    
    2,344
    
    
    
    70
    
    
    
    3,083
    
    
    
    67
    
    
    
    2,621
    
    
    
    63
    
    
    
    2,362
    
    
    
    63Consumer
    
    
    464
    
    
    
    1
    
    
    
    478
    
    
    
    2
    
    
    
    454
    
    
    
    2
    
    
    
    450
    
    
    
    4
    
    
    
    493
    
    
    
    5Other
    
    
    104
    
    
    
    1
    
    
    
    129
    
    
    
    1
    
    
    
    25
    
    
    
    1
    
    
    
    24
    
    
    
    1
    
    
    
    132
    
    
    
    2Off-balance-sheet
financial instruments
    
    
    
    
    
    
    
    
    
    
    587
    
    
    
    
    
    
    
    443
    
    
    
    
    
    
    
    380
    
    
    
    
    
    
    
    324
    
    
    
    Unallocated
    
    
    1,851
    
    
    
    
    
    
    
    1,643
    
    
    
    
    
    
    
    345
    
    
    
    
    
    
    
    352
    
    
    
    
    
    
    
    785
    
    
    
    Total allowance for
loan losses
    
    $
    10,143
    
    
    
    100
    %
    
    $
    9,526
    
    
    
    100
    %
    
    $
    8,184
    
    
    
    100
    %
    
    $
    6,612
    
    
    
    100
    %
    
    $
    6,417
    
    
    
    100
    %
 35-
Columbia Bancorp




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##### Table of Contents



Table 13
 (dollars in thousands)
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Gross loans oustanding at end of year (1)
    
    $
    813,443
    
    
    $
    688,725
    
    
    $
    583,865
    
    
    $
    472,412
    
    
    $
    440,350Average loans outstanding for the year (1)
    
    $
    745,578
    
    
    $
    625,038
    
    
    $
    546,600
    
    
    $
    457,465
    
    
    $
    420,226Allowance for loan losses balance, beginning of year
    
    $
    9,526
    
    
    $
    8,184
    
    
    $
    6,612
    
    
    $
    6,417
    
    
    $
    5,312Loans charged off:Commercial
    
    
    (655
    )
    
    
    (1,261
    )
    
    
    (762
    )
    
    
    (417
    )
    
    
    (319
    )Real estate
    
    
    (24
    )
    
    
    (168
    )
    
    
    (116
    )
    
    
    (1,569
    )
    
    
    (197
    )Real estate construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (58
    )Agriculture
    
    
    (893
    )
    
    
    (156
    )
    
    
    (80
    )
    
    
    (40
    )
    
    
    (15
    )Consumer loans
    
    
    (6
    )
    
    
    (111
    )
    
    
    (198
    )
    
    
    (412
    )
    
    
    (206
    )Consumer overdrafts
    
    
    (274
    )
    
    
    (165
    )
    
    
    
    
    
    
    
    
    
    
    Credit card and related accounts
    
    
    (79
    )
    
    
    (101
    )
    
    
    (135
    )
    
    
    (96
    )
    
    
    (91
    )Total loans charged off
    
    
    (1,931
    )
    
    
    (1,962
    )
    
    
    (1,291
    )
    
    
    (2,534
    )
    
    
    (886
    )Recoveries:Commercial
    
    
    112
    
    
    
    79
    
    
    
    67
    
    
    
    50
    
    
    
    97Real estate
    
    
    35
    
    
    
    9
    
    
    
    8
    
    
    
    35
    
    
    
    Real estate construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Agriculture
    
    
    162
    
    
    
    5
    
    
    
    4
    
    
    
    28
    
    
    
    11Consumer loans
    
    
    19
    
    
    
    32
    
    
    
    13
    
    
    
    31
    
    
    
    72Consumer overdrafts
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    Credit card and related accounts
    
    
    10
    
    
    
    4
    
    
    
    11
    
    
    
    10
    
    
    
    5Total recoveries
    
    
    338
    
    
    
    189
    
    
    
    103
    
    
    
    154
    
    
    
    191Net charge-offs
    
    
    (1,593
    )
    
    
    (1,773
    )
    
    
    (1,188
    )
    
    
    (2,380
    )
    
    
    (695
    )Provision for loan losses
    
    
    2,900
    
    
    
    3,115
    
    
    
    2,760
    
    
    
    2,575
    
    
    
    1,800Reclassify liability for off-balance-sheet
financial insturment credit losses
    
    
    (690
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Allowance for loan losses balance, end of year
    
    $
    10,143
    
    
    $
    9,526
    
    
    $
    8,184
    
    
    $
    6,612
    
    
    $
    6,417Liability for off-balance-sheet financial instruments,
beginning of year
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Reclassify from allowance for loan losses
    
    
    690
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Increase charged to other non-interest expense
    
    
    73
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Liability for off-balance-sheet financial instruments,
end of year
    
    $
    763
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Total allowance for credit losses (2)
    
    $
    10,906
    
    
    $
    9,526
    
    
    $
    8,184
    
    
    $
    6,612
    
    
    $
    6,417Ratio of net loans charged off to
average loans outstanding
    
    
    0.21
    %
    
    
    0.28
    %
    
    
    0.22
    %
    
    
    0.52
    %
    
    
    0.17
    %Ratio of allowance for credit losses to loans at
end of period
    
    
    1.34
    %
    
    
    1.38
    %
    
    
    1.40
    %
    
    
    1.40
    %
    
    
    1.46
    %
 
 (1)
    
    Includes loans held-for-sale and excludes allowance for loan losses and deferred fees.(2)
    
    Allowance for loan losses and liability for off-balance-sheet financial instruments. Columbia Bancorp




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##### Table of Contents



Non-performing Assets
   Table 14
 (dollars in thousands)
    
    2006
    
    
    2005
    
    
    2004
    
    
    2003
    
    
    2002Loans on non-accrual status
    
    $
    4,939
    
    
    $
    5,688
    
    
    $
    4,217
    
    
    $
    3,292
    
    
    $
    742Loans past due  greater than 90 days
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Restructured loans
    
    
    52
    
    
    
    40
    
    
    
    
    
    
    
    10
    
    
    
    25Total non-performing loans
    
    
    4,991
    
    
    
    5,728
    
    
    
    4,217
    
    
    
    3,302
    
    
    
    772Other real estate owned
    
    
    203
    
    
    
    
    
    
    
    100
    
    
    
    42
    
    
    
    Total non-performing assets
    
    $
    5,194
    
    
    $
    5,728
    
    
    $
    4,317
    
    
    $
    3,344
    
    
    $
    772Allowance for loan losses
    
    $
    10,143
    
    
    $
    9,526
    
    
    $
    8,184
    
    
    $
    6,612
    
    
    $
    6,417Ratio of total non-performing assets to
total assets
    
    
    0.50
    %
    
    
    0.68
    %
    
    
    0.60
    %
    
    
    0.57
    %
    
    
    0.14
    %Ratio of total non-performing loans to
total gross loans
    
    
    0.61
    %
    
    
    0.83
    %
    
    
    0.72
    %
    
    
    0.70
    %
    
    
    0.18
    %Ratio of reserve for loan losses to
total non-performing assets
    
    
    195.28
    %
    
    
    166.30
    %
    
    
    189.57
    %
    
    
    197.74
    %
    
    
    830.73
    %
  37-
Columbia Bancorp




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##### Table of Contents



Deposits
    Table 15
 2006
    
    
    2005
    
    
    2004(dollars in thousands)
    
    Amount
    
    
    Percentage
    
    
    Amount
    
    
    Percentage
    
    
    Amount
    
    
    PercentageInterest bearing demand deposits
    
    $
    313,433
    
    
    
    37
    %
    
    $
    278,070
    
    
    
    39
    %
    
    $
    211,240
    
    
    
    35
    %Savings deposits
    
    
    35,456
    
    
    
    4
    
    
    
    41,128
    
    
    
    6
    
    
    
    35,926
    
    
    
    6Time certificates less than $100,000
    
    
    196,648
    
    
    
    23
    
    
    
    73,508
    
    
    
    11
    
    
    
    83,242
    
    
    
    14Time certificates greater than $100,000
    
    
    78,491
    
    
    
    9
    
    
    
    94,666
    
    
    
    13
    
    
    
    104,114
    
    
    
    17Total interest bearing deposits
    
    
    624,028
    
    
    
    73
    
    
    
    487,372
    
    
    
    69
    
    
    
    434,522
    
    
    
    72Non-interest bearing deposits
    
    
    235,037
    
    
    
    27
    
    
    
    220,450
    
    
    
    31
    
    
    
    172,422
    
    
    
    28Total deposits
    
    $
    859,065
    
    
    
    100
    %
    
    $
    707,822
    
    
    
    100
    %
    
    $
    606,944
    
    
    
    100
    %
  
    
    New branches in Yakima, Sunnyside and Pasco, Washington, along with our
expanded Meadow Springs branch in Richland, Washington, contributed $43.17 million to
deposit growth.
    
    In order to support loan growth, we added wholesale liabilities totaling $75.09
million, net of maturities.
    
    We raised $47.97 million of retail time deposits by offering special pricing
terms. Time deposit growth supplemented the modest growth of core retail deposits.
  Columbia Bancorp




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##### Table of Contents



Table 16
 2006 Averages
    
    
    2005 Averages
    
    
    2004 Averages(dollars in thousands)
    
    Amount
    
    
    Rate Paid
    
    
    Amount
    
    
    Rate Paid
    
    
    Amount
    
    
    Rate PaidNon-interest bearing deposits
    
    $
    219,526
    
    
    
    N/A
    
    
    $
    198,316
    
    
    
    N/A
    
    
    $
    163,953
    
    
    
    N/AInterest bearing demand deposits
    
    
    280,691
    
    
    
    2.31
    %
    
    
    248,544
    
    
    
    1.50
    %
    
    
    194,534
    
    
    
    0.69
    %Savings deposits
    
    
    39,790
    
    
    
    1.10
    
    
    
    38,960
    
    
    
    0.84
    
    
    
    36,292
    
    
    
    0.39Time certificates
    
    
    219,084
    
    
    
    4.29
    
    
    
    174,495
    
    
    
    3.38
    
    
    
    157,854
    
    
    
    2.89Total deposits
    
    $
    759,091
    
    
    
    
    
    
    $
    660,315
    
    
    
    
    
    
    $
    552,633
     Table 17
 (dollars in thousands)
    
    2006
    
    
    2005
    
    
    2004Brokered certificates of deposit
    
    $
    89,325
    
    
    $
    31,644
    
    
    $
    46,645Direct certificates of deposit
    
    
    5,508
    
    
    
    9,715
    
    
    
    25,788Mutual fund money market deposits
    
    
    18,423
    
    
    
    
    
    
    
    Out-of-market public funds
    
    
    3,191
    
    
    
    
    
    
    
    $
    116,447
    
    
    $
    41,359
    
    
    $
    72,433
 39-
Columbia Bancorp




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##### Table of Contents



Table 18
 Time Certificates
    
    
    Time Certificates(dollars in thousands)
    
    less than $100,000
    
    
    greater than $100,000
    
    
    TotalThree months or less
    
    $
    25,528
    
    
    $
    14,288
    
    
    $
    39,816Over three through six months
    
    
    59,802
    
    
    
    41,865
    
    
    
    101,667Over six months through twelve months
    
    
    45,812
    
    
    
    12,439
    
    
    
    58,251Over twelve months through five years
    
    
    65,204
    
    
    
    9,899
    
    
    
    75,103Over five years
    
    
    302
    
    
    
    
    
    
    
    302$
    196,648
    
    
    $
    78,491
    
    
    $
    275,139
 Long-Term and Short-Term Borrowings
    Table 19
 (dollars in thousands)
    
    2006
    
    2005
    
    2004Amount outstanding at end of period
    
    $
    69,387
    
    
    $
    44,841
    
    
    $
    34,040Weighted-average interest rate at end of
period
    
    
    5.21
    %
    
    
    4.09
    %
    
    
    3.41
    %Maximum amount outstanding at any
month-end during the year
    
    $
    70,001
    
    
    $
    44,841
    
    
    $
    46,941Average amount outstanding during the
period
    
    $
    27,603
    
    
    $
    34,380
    
    
    $
    30,023Weighted-average interest rate during
the period
    
    
    4.33
    %
    
    
    3.64
    %
    
    
    3.36
    %
 Columbia Bancorp




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Trust Preferred Securities
   Shareholders Equity and Regulatory Capital
    41-
Columbia Bancorp




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Table 20
 Maximum DollarTotal Number of
    
    
    Value of SharesTotal Number of
    
    
    
    
    
    
    Shares Purchased
    
    
    Remaining to beShares
    
    
    Average Price
    
    
    as Part of Publicly
    
    
    Purchased UnderPurchased
    
    
    Paid per Share
    
    
    Announced Plans(1)
    
    
    the Plans(1)October 2005
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    1,000,000November 2005
    
    
    3,570
    
    
    
    21.96
    
    
    
    3,570
    
    
    
    921,601December 2005
    
    
    2,800
    
    
    
    21.96
    
    
    
    2,800
    
    
    
    860,122Three months ended December 31, 2005
    
    
    6,370
    
    
    $
    21.96
    
    
    
    6,370
    
    
    $
    860,122October 2006
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    1,500,000November 2006
    
    
    1,136
    
    
    
    27.35
    
    
    
    
    
    
    
    1,500,000December 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,500,000Three months ended December 31, 2006
    
    
    1,136
    
    
    $
    27.35
    
    
    
    
    
    
    $
    1,500,000
 
 (1)
    
    Plan announced in June 2005 to repurchase up to $1 million of
common stock through June 30, 2006. In June 2006, the plan was renewed to
allow purchases of up to $1.50 million of common stock through June 30, 2007.   Table 21
 2006
    
    2005
    
    Regulatory MinimumTier I capital
    
    
    10.11
    %
    
    
    9.70
    %
    
    
    4.00
    %Total risk-based capital
    
    
    11.36
    %
    
    
    10.95
    %
    
    
    8.00
    %Leverage ratio
    
    
    8.54
    %
    
    
    9.77
    %
    
    
    4.00
    %
 Liquidity and Capital Resources
   Columbia Bancorp




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Inflation
  Off-Balance Sheet Arrangements
   43- Columbia Bancorp




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Table 22
 (dollars in thousands)
    
    2006
    
    
    2005
    
    
    2004Commitments to extend credit
    
    $
    245,305
    
    
    $
    200,916
    
    
    $
    168,812Undisbursed credit card lines of credit
    
    
    21,265
    
    
    
    19,582
    
    
    
    18,437Commercial and standby letters of credit
    
    
    3,504
    
    
    
    2,309
    
    
    
    2,227Total
    
    $
    270,074
    
    

$

222,807
    
    
    $
    189,476
 Contractual Obligations
  Table 23
 Payment due by PeriodLess than
    
    
    
    
    
    
    
    
    
    
    More than 5
    
    
    Unspecified(dollars in thousands)
    
    Total
    
    
    1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    years
    
    
    maturityLong-term debt obligationsFederal Home Loan Bank notes
    
    $
    69,388
    
    
    $
    61,500
    
    
    $
    7,282
    
    
    $
    
    
    
    $
    606
    
    
    $
    Trust preferred securities (1)
    
    
    4,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,000
    
    
    
    Treasury tax and loan note
    
    
    627
    
    
    
    627
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    9,626
    
    
    
    1,039
    
    
    
    1,955
    
    
    
    1,764
    
    
    
    4,868
    
    
    
    Other long term liabilities(2)
    
    
    1,629
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,629Total
    
    $
    85,270
    
    
    $
    63,166
    
    
    $
    9,237
    
    
    $
    1,764
    
    
    $
    9,474
    
    
    $
    1,629
 
 (1)
    
    Columbia has the right to redeem trust preferred securities on
or after January 7, 2008. This commitment excludes $124 of initial trust
capitalization.(2)
    
    Amount includes deferred compensation and salary continuation plan benefit obligations. Recently Issued Accounting Standards
   Columbia Bancorp




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45- Columbia Bancorp




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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk Management
    Table 24
 Percent Change
    
    Percent Changein Net Interest
    
    in Present ValueChange in Interest Rates
    
    Income
    
    of Equity-200 Basis points
    
    
    -7.41
    %
    
    
    -3.52
    %-100 Basis points
    
    
    -3.94
    %
    
    
    -2.64
    %+100 Basis points
    
    
    5.24
    %
    
    
    3.55
    %+200 Basis points
    
    
    10.54
    %
    
    
    7.30
    %
   Columbia Bancorp




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##### Table of Contents



ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 Selected Quarterly Financial Data (unaudited)
 Table 25
 2006 Quarterly Financial DataFirst
    
    
    Second
    
    
    Third
    
    
    Fourth(In thousands except per share data)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    TotalIncome Statement DataInterest income
    
    $
    15,558
    
    
    $
    16,634
    
    
    $
    18,919
    
    
    $
    19,563
    
    
    $
    70,674Interest expense
    
    
    3,600
    
    
    
    3,861
    
    
    
    5,007
    
    
    
    5,534
    
    
    
    18,002Net interest income
    
    
    11,958
    
    
    
    12,773
    
    
    
    13,912
    
    
    
    14,029
    
    
    
    52,672Loan loss provision
    
    
    550
    
    
    
    1,270
    
    
    
    330
    
    
    
    750
    
    
    
    2,900Net interest income after
loan loss provision
    
    
    11,408
    
    
    
    11,503
    
    
    
    13,582
    
    
    
    13,279
    
    
    
    49,772Non-interest income
    
    
    2,319
    
    
    
    2,390
    
    
    
    2,636
    
    
    
    2,476
    
    
    
    9,821Non-interest expense
    
    
    7,776
    
    
    
    8,127
    
    
    
    9,341
    
    
    
    9,129
    
    
    
    34,373Income before provision for
income taxes
    
    
    5,951
    
    
    
    5,766
    
    
    
    6,877
    
    
    
    6,626
    
    
    
    25,220Provision for income taxes
    
    
    2,229
    
    
    
    2,159
    
    
    
    2,634
    
    
    
    2,423
    
    
    
    9,445Net income
    
    $
    3,722
    
    
    $
    3,607
    
    
    $
    4,243
    
    
    $
    4,203
    
    
    $
    15,775Earnings Per ShareBasic earnings per common share
    
    $
    0.38
    
    
    $
    0.36
    
    
    $
    0.43
    
    
    $
    0.42
    
    
    $
    1.60Diluted earnings per common share
    
    $
    0.37
    
    
    $
    0.36
    
    
    $
    0.42
    
    
    $
    0.41
    
    
    $
    1.55
 2005 Quarterly Financial DataFirst
    
    
    Second
    
    
    Third
    
    
    Fourth(In thousands except per share data)
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    TotalIncome Statement DataInterest income
    
    $
    12,172
    
    
    $
    12,715
    
    
    $
    13,998
    
    
    $
    14,704
    
    
    $
    53,589Interest expense
    
    
    2,511
    
    
    
    2,643
    
    
    
    2,937
    
    
    
    3,211
    
    
    
    11,302Net interest income
    
    
    9,661
    
    
    
    10,072
    
    
    
    11,061
    
    
    
    11,493
    
    
    
    42,287Loan loss provision
    
    
    200
    
    
    
    650
    
    
    
    1,230
    
    
    
    1,035
    
    
    
    3,115Net interest income after
loan loss provision
    
    
    9,461
    
    
    
    9,422
    
    
    
    9,831
    
    
    
    10,458
    
    
    
    39,172Non-interest income
    
    
    2,303
    
    
    
    2,984
    
    
    
    2,540
    
    
    
    2,361
    
    
    
    10,188Non-interest expense
    
    
    6,571
    
    
    
    6,977
    
    
    
    7,141
    
    
    
    7,472
    
    
    
    28,161Income before provision for
income taxes
    
    
    5,193
    
    
    
    5,429
    
    
    
    5,230
    
    
    
    5,347
    
    
    
    21,199Provision for income taxes
    
    
    1,880
    
    
    
    1,987
    
    
    
    1,704
    
    
    
    1,958
    
    
    
    7,529Net income
    
    $
    3,313
    
    
    $
    3,442
    
    
    $
    3,526
    
    
    $
    3,389
    
    
    $
    13,670Earnings Per ShareBasic earnings per common share
    
    $
    0.34
    
    
    $
    0.35
    
    
    $
    0.36
    
    
    $
    0.34
    
    
    $
    1.39Diluted earnings per common share
    
    $
    0.33
    
    
    $
    0.34
    
    
    $
    0.35
    
    
    $
    0.34
    
    
    $
    1.36
 47- Columbia Bancorp




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Columbia Bancorp




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49- Columbia Bancorp




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COLUMBIA BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
 December 31,2006
    
    
    2005ASSETSCASH AND CASH EQUIVALENTSCash and due from banks
    
    $
    38,141,448
    
    
    $
    34,631,688Interest-bearing deposits with banks
    
    
    51,443,094
    
    
    
    23,175,188Federal funds sold
    
    
    58,930,213
    
    
    
    29,281,599Total cash and cash equivalents
    
    
    148,514,755
    
    
    
    87,088,475INVESTMENT SECURITIESDebt securities available-for-sale, at fair value
    
    
    20,187,330
    
    
    
    17,233,060Equity securities available-for-sale, at fair value
    
    
    637,829
    
    
    
    611,148Debt securities held-to-maturity, at amortized cost,
estimated fair value $14,536,822 and $16,749,021 at
December 31, 2006 and 2005, respectively
    
    
    14,439,764
    
    
    
    16,497,131Restricted equity securities
    
    
    2,439,100
    
    
    
    2,439,100Total investment securities
    
    
    37,704,023
    
    
    
    36,780,439LOANSLoans held-for-sale
    
    
    7,537,832
    
    
    
    5,879,320Loans, net of allowance for loan losses and unearned loan fees
    
    
    794,333,285
    
    
    
    671,806,637Total loans
    
    
    801,871,117
    
    
    
    677,685,957OTHER ASSETSProperty and equipment, net of accumulated depreciation
    
    
    18,088,776
    
    
    
    15,783,509Accrued interest receivable
    
    
    6,517,903
    
    
    
    5,615,098Goodwill
    
    
    7,389,094
    
    
    
    7,389,094Other assets
    
    
    13,102,162
    
    
    
    10,896,746Total other assets
    
    
    45,097,935
    
    
    
    39,684,447TOTAL ASSETS
    
    $
    1,033,187,830
    
    
    $
    841,239,318LIABILITIES AND SHAREHOLDERS EQUITYDEPOSITSNon-interest bearing demand deposits
    
    $
    235,036,954
    
    
    $
    220,450,133Interest bearing demand deposits
    
    
    313,432,917
    
    
    
    278,070,340Savings accounts
    
    
    35,455,947
    
    
    
    41,127,626Time certificates
    
    
    275,139,670
    
    
    
    168,174,061Total deposits
    
    
    859,065,488
    
    
    
    707,822,160OTHER LIABILITIESNotes payable
    
    
    70,014,313
    
    
    
    45,690,951Accrued interest payable and other liabilities
    
    
    8,966,368
    
    
    
    6,109,717Junior subordinated debentures
    
    
    4,124,000
    
    
    
    4,124,000Total other liabilities
    
    
    83,104,681
    
    
    
    55,924,668Total liabilities
    
    
    942,170,169
    
    
    
    763,746,828COMMITMENTS AND CONTINGENCIES (Note 16)SHAREHOLDERS EQUITYCommon stock, no par value, 20,000,000 shares authorized;
9,979,537 and 8,965,408 shares issued and outstanding
at December 31, 2006 and 2005, respectively
    
    
    54,767,348
    
    
    
    33,425,084Retained earnings
    
    
    36,295,441
    
    
    
    44,189,700Accumulated other comprehensive loss, net of taxes
    
    
    (45,128
    )
    
    
    (122,294
    )Total shareholders equity
    
    
    91,017,661
    
    
    
    77,492,490TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    1,033,187,830
    
    
    $
    841,239,318
  Columbia Bancorp




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##### Table of Contents



COLUMBIA BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
 Years Ended December 31,2006
    
    
    2005
    
    
    2004INTEREST INCOMEInterest and fees on loans
    
    $
    67,027,115
    
    
    $
    50,571,586
    
    
    $
    41,239,595Interest on investments:Taxable investment securities
    
    
    993,258
    
    
    
    746,378
    
    
    
    434,568Nontaxable investment securities
    
    
    548,389
    
    
    
    597,220
    
    
    
    617,105Interest on federal funds sold
    
    
    1,416,362
    
    
    
    1,177,151
    
    
    
    201,278Other interest and dividend income
    
    
    688,660
    
    
    
    496,144
    
    
    
    215,417Total interest income
    
    
    70,673,784
    
    
    
    53,588,479
    
    
    
    42,707,963INTEREST EXPENSEInterest on interest bearing demand deposit
and savings accounts
    
    
    6,931,301
    
    
    
    4,050,872
    
    
    
    1,475,891Interest on time certificates
    
    
    9,406,782
    
    
    
    5,892,640
    
    
    
    4,554,432Other borrowed funds
    
    
    1,664,267
    
    
    
    1,358,034
    
    
    
    1,297,755Total interest expense
    
    
    18,002,350
    
    
    
    11,301,546
    
    
    
    7,328,078NET INTEREST INCOME BEFORE PROVISION
FOR LOAN LOSSES
    
    
    52,671,434
    
    
    
    42,286,933
    
    
    
    35,379,885PROVISION FOR LOAN LOSSES
    
    
    2,900,000
    
    
    
    3,115,000
    
    
    
    2,760,000NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES
    
    
    49,771,434
    
    
    
    39,171,933
    
    
    
    32,619,885NON-INTEREST INCOMEService charges and fees
    
    
    4,316,134
    
    
    
    4,733,439
    
    
    
    4,657,884Mortgage banking revenue
    
    
    3,175,893
    
    
    
    2,746,571
    
    
    
    1,121,546Financial services revenues
    
    
    870,787
    
    
    
    612,702
    
    
    
    520,427Credit card discounts and fees
    
    
    493,122
    
    
    
    484,310
    
    
    
    465,481Net loss on sale or call of investment securities
    
    
    (46
    )
    
    
    (1,422
    )
    
    
    (6,823
    )Gain on sale of mortgage servicing asset
    
    
    
    
    
    
    560,588
    
    
    
    Other non-interest income
    
    
    965,345
    
    
    
    1,052,233
    
    
    
    1,553,040Total non-interest income
    
    
    9,821,235
    
    
    
    10,188,421
    
    
    
    8,311,555NON-INTEREST EXPENSESalaries and employee benefits
    
    
    20,503,987
    
    
    
    16,529,743
    
    
    
    13,402,913Occupancy expense
    
    
    3,897,303
    
    
    
    3,124,787
    
    
    
    2,654,462Item and statement processing
    
    
    904,713
    
    
    
    771,003
    
    
    
    774,591Advertising
    
    
    805,381
    
    
    
    677,881
    
    
    
    811,067Data processing expense
    
    
    577,067
    
    
    
    461,526
    
    
    
    512,770Other non-interest expense
    
    
    7,684,201
    
    
    
    6,596,421
    
    
    
    5,815,286Total non-interest expense
    
    
    34,372,652
    
    
    
    28,161,361
    
    
    
    23,971,089INCOME BEFORE PROVISION FOR
INCOME TAXES
    
    
    25,220,017
    
    
    
    21,198,993
    
    
    
    16,960,351PROVISION FOR INCOME TAXES
    
    
    9,444,897
    
    
    
    7,528,831
    
    
    
    6,225,661NET INCOME
    
    
    15,775,120
    
    
    
    13,670,162
    
    
    
    10,734,690OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAXESUnrealized gains (losses) on securities:Unrealized holding gains (losses) arising during the period
    
    
    100,383
    
    
    
    (143,729
    )
    
    
    (92,800
    )Reclassification adjustment for losses included in
net income
    
    
    
    
    
    
    901
    
    
    
    4,326(Decrease) increase in fair value of interest rate swap
    
    
    (23,217
    )
    
    
    100,821
    
    
    
    (23,812
    )Other comprehensive income (loss), net of taxes
    
    
    77,166
    
    
    
    (42,007
    )
    
    
    (112,286
    )COMPREHENSIVE INCOME
    
    $
    15,852,286
    
    
    $
    13,628,155
    
    
    $
    10,622,404BASIC EARNINGS PER SHARE OF COMMON
STOCK
    
    $
    1.60
    
    
    $
    1.39
    
    
    $
    1.11DILUTED EARNINGS PER SHARE OF
COMMON STOCK
    
    $
    1.55
    
    
    $
    1.36
    
    
    $
    1.08
  51- Columbia Bancorp




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COLUMBIA BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
 AccumulatedOther
    
    
    TotalCommon Stock
    
    
    Retained
    
    
    Comprehensive
    
    
    ShareholdersShares
    
    
    Amount
    
    
    Earnings
    
    
    Income/(Loss)
    
    
    EquityBALANCE, December 31, 2003
    
    
    8,750,582
    
    
    $
    31,520,099
    
    
    $
    26,252,366
    
    
    $
    31,999
    
    
    $
    57,804,464Stock options exercised
    
    
    101,069
    
    
    
    725,193
    
    
    
    
    
    
    
    
    
    
    
    725,193Income tax benefit from stock options
exercised
    
    
    
    
    
    
    121,713
    
    
    
    
    
    
    
    
    
    
    
    121,713Repurchase of common stock
    
    
    (12,500
    )
    
    
    (226,229
    )
    
    
    
    
    
    
    
    
    
    
    (226,229
    )Cash dividends, $0.36 per common share
    
    
    
    
    
    
    
    
    
    
    (3,170,567
    )
    
    
    
    
    
    
    (3,170,567
    )Net income and comprehensive income
    
    
    
    
    
    
    
    
    
    
    10,734,690
    
    
    
    (112,286
    )
    
    
    10,622,404BALANCE, December 31, 2004
    
    
    8,839,151
    
    
    
    32,140,776
    
    
    
    33,816,489
    
    
    
    (80,287
    )
    
    
    65,876,978Stock options exercised
    
    
    115,969
    
    
    
    936,853
    
    
    
    
    
    
    
    
    
    
    
    936,853Income tax benefit from stock options
exercised
    
    
    
    
    
    
    410,137
    
    
    
    
    
    
    
    
    
    
    
    410,137Stock awards granted
    
    
    16,658
    
    
    
    77,196
    
    
    
    
    
    
    
    
    
    
    
    77,196Repurchase of common stock
    
    
    (6,370
    )
    
    
    (139,878
    )
    
    
    
    
    
    
    
    
    
    
    (139,878
    )Cash dividends, $0.36 per common share
    
    
    
    
    
    
    
    
    
    
    (3,296,951
    )
    
    
    
    
    
    
    (3,296,951
    )Net income and comprehensive income
    
    
    
    
    
    
    
    
    
    
    13,670,162
    
    
    
    (42,007
    )
    
    
    13,628,155BALANCE, December 31, 2005
    
    
    8,965,408
    
    
    
    33,425,084
    
    
    
    44,189,700
    
    
    
    (122,294
    )
    
    
    77,492,490Stock-based compensation expense
    
    
    
    
    
    
    294,216
    
    
    
    
    
    
    
    
    
    
    
    294,216Stock options exercised and
stock awards granted
    
    
    119,119
    
    
    
    807,878
    
    
    
    
    
    
    
    
    
    
    
    807,878Income tax
benefit from stock options exercised
    
    
    
    
    
    
    484,336
    
    
    
    
    
    
    
    
    
    
    
    484,336Repurchase of common stock
    
    
    (1,136
    )
    
    
    (31,070
    )
    
    
    
    
    
    
    
    
    
    
    (31,070
    )10% stock dividend and cash paid
for fractional shares
    
    
    896,146
    
    
    
    19,786,904
    
    
    
    (19,795,632
    )
    
    
    
    
    
    
    (8,728
    )Cash dividends, $0.39 per common share
    
    
    
    
    
    
    
    
    
    
    (3,873,747
    )
    
    
    
    
    
    
    (3,873,747
    )Net income and comprehensive income
    
    
    
    
    
    
    
    
    
    
    15,775,120
    
    
    
    77,166
    
    
    
    15,852,286BALANCE, December 31, 2006
    
    
    9,979,537
    
    
    $
    54,767,348
    
    
    $
    36,295,441
    
    
    $
    (45,128
    )
    
    $
    91,017,661
  Columbia Bancorp




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##### Table of Contents



COLUMBIA BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended December 31,2006
    
    
    2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    15,775,120
    
    
    $
    13,670,162
    
    
    $
    10,734,690Adjustments to reconcile net income to net cash from
operating activities:(Accretion) amortization of premiums and discounts on
investment securities
    
    
    (44,477
    )
    
    
    45,676
    
    
    
    52,682Net loss on sale or call of investment securities
    
    
    46
    
    
    
    1,422
    
    
    
    6,823Gain on sale of mortgage servicing asset
    
    
    
    
    
    
    (560,588
    )
    
    
    Gain on sale of loans
    
    
    (133,640
    )
    
    
    
    
    
    
    (104,364
    )Federal Home Loan Bank stock dividend
    
    
    
    
    
    
    (9,900
    )
    
    
    (69,800
    )Loss (gain) on sale or write-down of property, equipment
and other real estate owned
    
    
    189,797
    
    
    
    34,308
    
    
    
    (560,650
    )Depreciation and amortization:Property, equipment and other
    
    
    2,028,782
    
    
    
    1,728,331
    
    
    
    1,551,223Mortgage servicing asset
    
    
    
    
    
    
    116,972
    
    
    
    1,621,091Loss from limited partnerships
    
    
    29,550
    
    
    
    88,702
    
    
    
    66,750Stock-based compensation expense
    
    
    344,849
    
    
    
    169,785
    
    
    
    36,730Deferred income tax benefit
    
    
    (429,130
    )
    
    
    (1,861,826
    )
    
    
    (1,322,155
    )Provision for loan losses
    
    
    2,900,000
    
    
    
    3,115,000
    
    
    
    2,760,000Provision for losses from off-balance sheet financial instruments
    
    
    73,000
    
    
    
    
    
    
    
    Increase (decrease) in cash due to changes in certain assets
and liabilities:Proceeds from the sale of mortgage loans held-for-sale
    
    
    100,016,040
    
    
    
    81,388,318
    
    
    
    42,608,162Production of mortgage loans held-for-sale
    
    
    (101,674,552
    )
    
    
    (84,750,456
    )
    
    
    (42,332,960
    )Accrued interest receivable
    
    
    (902,805
    )
    
    
    (1,507,292
    )
    
    
    (338,279
    )Mortgage servicing asset
    
    
    
    
    
    
    
    
    
    
    (92,296
    )Other assets
    
    
    1,642,377
    
    
    
    611,374
    
    
    
    (1,244,776
    )Accrued interest payable and other liabilities
    
    
    62,575
    
    
    
    2,326,300
    
    
    
    998,882Net cash from operating activities
    
    
    19,877,532
    
    
    
    14,606,288
    
    
    
    14,371,753CASH FLOWS FROM INVESTING ACTIVITIESProceeds from the sale of available-for-sale securities
    
    
    
    
    
    
    100,000
    
    
    
    4,500,000Proceeds from the maturity and call of available-for-sale securities
    
    
    6,185,000
    
    
    
    9,000,000
    
    
    
    8,100,000Purchases of available-for-sale securities
    
    
    (8,953,633
    )
    
    
    (1,936,264
    )
    
    
    (24,109,769
    )Proceeds from the maturity or call of held-to-maturity securities
    
    
    2,248,847
    
    
    
    3,624,719
    
    
    
    1,340,143Purchases of held-to-maturity securities
    
    
    (205,907
    )
    
    
    (2,414,220
    )
    
    
    (4,180,255
    )Net change from the sale of restricted equity securities
    
    
    
    
    
    
    
    
    
    
    483,700Net change in loans made to customers
    
    
    (131,210,966
    )
    
    
    (103,398,240
    )
    
    
    (125,246,018
    )Proceeds from sale of loans
    
    
    6,405,108
    
    
    
    
    
    
    
    11,004,027Investment in low-income housing tax credits
    
    
    (143,000
    )
    
    
    (109,750
    )
    
    
    (76,750
    )Investment in state tax credits
    
    
    (261,197
    )
    
    
    (190,815
    )
    
    
    Investment in bank-owned life insurance
    
    
    
    
    
    
    
    
    
    
    (2,000,000
    )Proceeds from the sale of mortgage servicing asset
    
    
    
    
    
    
    2,606,270
    
    
    
    Proceeds from the sale of property and equipment
    
    
    
    
    
    
    770,222
    
    
    
    1,519,486Proceeds from the sale of other real estate owned
    
    
    
    
    
    
    188,896
    
    
    
    1,531,330Purchase of employee residence under relocation benefit
    
    
    (613,211
    )
    
    
    
    
    
    
    Payments made for purchase of property and equipment
    
    
    (4,473,695
    )
    
    
    (3,009,489
    )
    
    
    (3,952,582
    )Net cash from investing activities
    
    
    (131,022,654
    )
    
    
    (94,768,671
    )
    
    
    (131,086,688
    )CASH FLOWS FROM FINANCING ACTIVITIESNet change in demand deposit and savings accounts
    
    
    44,277,719
    
    
    
    120,060,627
    
    
    
    45,977,256Net change in time certificates
    
    
    106,965,609
    
    
    
    (19,182,030
    )
    
    
    64,608,267Net borrowings from (repayments of) short-term notes payable
    
    
    29,777,093
    
    
    
    20,000,030
    
    
    
    (20,030
    )Proceeds from long-term borrowings
    
    
    
    
    
    
    
    
    
    
    20,000,000Repayments of long-term borrowings
    
    
    (5,453,731
    )
    
    
    (9,198,643
    )
    
    
    (7,073,871
    )Dividends paid and cash paid for fractional shares
    
    
    (3,772,096
    )
    
    
    (3,204,900
    )
    
    
    (3,163,045
    )Proceeds from stock options exercised
    
    
    807,878
    
    
    
    936,853
    
    
    
    725,193Repurchase of common stock
    
    
    (31,070
    )
    
    
    (139,878
    )
    
    
    (226,229
    )Net cash from financing activities
    
    
    172,571,402
    
    
    
    109,272,059
    
    
    
    120,827,541NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    61,426,280
    
    
    
    29,109,676
    
    
    
    4,112,606CASH AND CASH EQUIVALENTS, beginning of year
    
    
    87,088,475
    
    
    
    57,978,799
    
    
    
    53,866,193CASH AND CASH EQUIVALENTS, end of year
    
    $
    148,514,755
    
    
    $
    87,088,475
    
    
    $
    57,978,799SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONInterest paid in cash
    
    $
    17,933,603
    
    
    $
    11,490,935
    
    
    $
    8,277,852Taxes paid in cash
    
    $
    9,125,000
    
    
    $
    9,326,000
    
    
    $
    6,744,000SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIESChange in unrealized gain or loss on available-for-sale
securities, net of tax
    
    $
    100,383
    
    
    $
    (142,828
    )
    
    $
    (88,474
    )Change in fair value of interest-rate swap, net of tax
    
    $
    (23,217
    )
    
    $
    100,821
    
    
    $
    (23,812
    )Cash
dividend declared and payable after year-end
    
    $
    997,954
    
    
    $
    887,575
    
    
    $
    795,524Transfers of
loans to other real estate owned
    
    $
    202,850
    
    
    $
    84,453
    
    
    $
    1,536,270Reclassify
liability for off-balance-sheet financial instrument credit losses
    
    $
    690,000
    
    
    $
    
    
    
    $
    
  53- Columbia Bancorp




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##### Table of Contents



NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Organization and nature of operations
    Managements estimates and assumptions
 Cash and cash equivalents
 Investment securities
 Securities held-to-maturity
 Securities available-for-sale
 Columbia Bancorp




---



##### Table of Contents



Restricted equity securities
 Loans held-for-sale
 Loans, net of allowance for loan losses and unearned loan fees
     Property and equipment 1 2
 55- Columbia Bancorp




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##### Table of Contents



Goodwill
 Investment in limited partnerships
 Other real estate owned
 Income taxes
 Advertising
 Earnings per share
 Columbia Bancorp




---



##### Table of Contents



Share-based payment
  Off-balance-sheet financial instruments
 Derivative financial instruments
    Fair value of financial instruments
 Held-to-maturity, available-for-sale, equity securities and restricted equity securities
 57- Columbia Bancorp




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##### Table of Contents



Loans receivable
 Deposit liabilities
 Short-term borrowings
 Long-term debt
 Off-balance-sheet instruments
 Recently issued accounting standards
    Columbia Bancorp




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##### Table of Contents



Reclassifications
 NOTE 2 SHARE-BASED COMPENSATION
  Stock Options
   59- Columbia Bancorp




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##### Table of Contents



2005
    
    2004Dividend yield
    
    1.82%
    
    1.80%Expected life
    
    6 years
    
    6 - 8 yearsExpected volatilty
    
    40.84%
    
    43.28%Risk-free rate
    
    2.05% - 3.91%
    
    2.90% - 3.02%Weighted-average grant date fair value per option
    
    $6.67
    
    $6.05
  Weighted Average
    
    
    AggregateNumber
    
    
    Weighted Average
    
    
    Remaining
    
    
    Intrinsic Valueof Shares
    
    
    Exercise Price
    
    
    Contractual Term
    
    
    (in thousands)Stock options outstanding, December 31, 2005
    
    
    615,282
    
    
    $
    11.05Granted
    
    
    
    
    
    
    Exercised
    
    
    (101,005
    )
    
    
    8.15Forfeited or expired
    
    
    (509
    )
    
    
    16.44Stock options outstanding, December 31, 2006
    
    
    513,768
    
    
    $
    11.62
    
    
    
    5.87
    
    
    $
    7,617Stock options exercisable, December 31, 2006
    
    
    499,688
    
    
    $
    11.50
    
    
    
    5.84
    
    
    $
    7,468
  Columbia Bancorp




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##### Table of Contents



Stock Awards
   Weighted AverageNumber
    
    
    Grant Dateof Shares
    
    
    Fair ValueUnvested stock awards, December 31, 2005
    
    
    14,432
    
    
    $
    19.86Granted
    
    
    18,750
    
    
    
    23.70Vested
    
    
    (10,357
    )
    
    
    22.15Forfeited
    
    
    
    
    
    
    Unvested stock awards, December 31, 2006
    
    
    22,825
    
    
    $
    21.98
  Phantom Stock
  61- Columbia Bancorp




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##### Table of Contents



2006
    
    
    2005
    
    
    2004Stock-Based
    
    
    Recognized
    
    
    Stock-Based
    
    
    Recognized
    
    
    Stock-Based
    
    
    RecognizedCompensation
    
    
    Tax Benefits
    
    
    Compensation
    
    
    Tax Benefits
    
    
    Compensation
    
    
    Tax BenefitsStock awards
    
    $
    273,089
    
    
    $
    102,272
    
    
    $
    95,594
    
    
    $
    34,987
    
    
    $
    
    
    
    $
    Stock options
    
    
    21,126
    
    
    
    7,912
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Phantom stock
    
    
    50,634
    
    
    
    18,962
    
    
    
    74,191
    
    
    
    27,154
    
    
    
    36,730
    
    
    
    13,443$
    344,849
    
    
    $
    129,146
    
    
    $
    169,785
    
    
    $
    62,141
    
    
    $
    36,730
    
    
    $
    13,443
  (dollars in thousands except per share data)
    
    2005
    
    
    2004Net income, as reported
    
    $
    13,670
    
    
    $
    10,735Deduct: Total stock-based employee compensation expense
determined under fair value methods for all awards,
net of related tax effects
    
    
    (508
    )
    
    
    (82
    )Pro forma net income
    
    $
    13,162
    
    
    $
    10,653Earnings per share (1):Basic  as reported
    
    $
    1.39
    
    
    $
    1.11Basic  pro forma
    
    
    1.34
    
    
    
    1.10Diluted  as reported
    
    
    1.36
    
    
    
    1.08Diluted  pro forma
    
    
    1.31
    
    
    
    1.07
 
 (1)
    
    Prior periods have been adjusted to reflect the 10% stock dividend, effective December 29, 2005 Columbia Bancorp




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##### Table of Contents



NOTE 3 INVESTMENT SECURITIES
  Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDecember 31, 2006:Debt securities available-for-sale:Obligations of U.S.
government agencies
    
    $
    20,005,620
    
    
    $
    15,474
    
    
    $
    (194,364
    )
    
    $
    19,826,730Municipal securities
    
    
    355,243
    
    
    
    5,357
    
    
    
    
    
    
    
    360,600$
    20,360,863
    
    
    $
    20,831
    
    
    $
    (194,364
    )
    
    $
    20,187,330Equity securities available-for-sale
    
    $
    618,718
    
    
    $
    29,250
    
    
    $
    (10,139
    )
    
    $
    637,829Debt securities held-to-maturity:Mortgage-backed
securities
    
    $
    3,129,384
    
    
    $
    10,381
    
    
    $
    (57,249
    )
    
    $
    3,082,516Municipal securities
    
    
    11,230,085
    
    
    
    179,829
    
    
    
    (34,440
    )
    
    
    11,375,474Obligations of U.S.
government agencies
    
    
    80,295
    
    
    
    
    
    
    
    (1,463
    )
    
    
    78,832$
    14,439,764
    
    
    $
    190,210
    
    
    $
    (93,152
    )
    
    $
    14,536,822
 Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueDecember 31, 2005:Debt securities available-for-sale:Obligations of U.S.
government agencies
    
    $
    17,015,660
    
    
    $
    
    
    
    $
    (335,571
    )
    
    $
    16,680,089Municipal securities
    
    
    540,424
    
    
    
    12,547
    
    
    
    
    
    
    
    552,971$
    17,556,084
    
    
    $
    12,547
    
    
    $
    (335,571
    )
    
    $
    17,233,060Equity securities available-for-sale
    
    $
    596,007
    
    
    $
    15,141
    
    
    $
    
    
    
    $
    611,148Debt securities held-to-maturity:Mortgage-backed
securities
    
    $
    4,362,876
    
    
    $
    19,221
    
    
    $
    (50,289
    )
    
    $
    4,331,808Municipal securities
    
    
    12,053,639
    
    
    
    303,450
    
    
    
    (20,492
    )
    
    
    12,336,597Obligations of U.S.
government agencies
    
    
    80,616
    
    
    
    
    
    
    
    
    
    
    
    80,616$
    16,497,131
    
    
    $
    322,671
    
    
    $
    (70,781
    )
    
    $
    16,749,021
 63- Columbia Bancorp




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##### Table of Contents



2006
    
    
    2005Federal Home Loan Bank of Seattle stock
    
    $
    2,429,700
    
    
    $
    2,429,700Federal Agriculture Mortgage Corporation stock
    
    
    9,400
    
    
    
    9,400$
    2,439,100
    
    
    $
    2,439,100
  Less than 12 months
    
    
    12 months or more
    
    
    TotalUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedFair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    LossesObligations of U.S.
government agencies
    
    $
    4,953,714
    
    
    $
    (13,238
    )
    
    $
    10,945,088
    
    
    $
    (182,589
    )
    
    $
    15,898,802
    
    
    $
    (195,827
    )Mortgage-backed securities
    
    
    2,265,054
    
    
    
    (41,631
    )
    
    
    462,726
    
    
    
    (15,618
    )
    
    
    2,727,780
    
    
    
    (57,249
    )Municipal securities
    
    
    932,946
    
    
    
    (9,471
    )
    
    
    1,087,002
    
    
    
    (24,969
    )
    
    
    2,019,948
    
    
    
    (34,440
    )Equity securities
    
    
    
    
    
    
    
    
    
    
    533,579
    
    
    
    (10,139
    )
    
    
    533,579
    
    
    
    (10,139
    )$
    8,151,714
    
    
    $
    (64,340
    )
    
    $
    13,028,395
    
    
    $
    (233,315
    )
    
    $
    21,180,109
    
    
    $
    (297,655
    )
      Columbia Bancorp




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##### Table of Contents



Available-for-Sale
    
    
    Held-to-MaturityEstimated
    
    
    
    
    
    
    EstimatedAmortized
    
    
    Fair
    
    
    Amortized
    
    
    FairCost
    
    
    Value
    
    
    Cost
    
    
    ValueDue in one year or less
    
    $
    5,930,754
    
    
    $
    5,866,768
    
    
    $
    1,037,390
    
    
    $
    1,031,911Due in one year through
five years
    
    
    14,430,109
    
    
    
    14,320,562
    
    
    
    3,624,910
    
    
    
    3,646,950Due in five years through
ten years
    
    
    
    
    
    
    
    
    
    
    7,510,509
    
    
    
    7,634,753Due after ten years
    
    
    
    
    
    
    
    
    
    
    2,266,955
    
    
    
    2,223,208Debt securities
    
    
    20,360,863
    
    
    
    20,187,330
    
    
    
    14,439,764
    
    
    
    14,536,822Equity securities
    
    
    618,718
    
    
    
    637,829
    
    
    
    
    
    
    
    $
    20,979,581
    
    
    $
    20,825,159
    
    
    $
    14,439,764
    
    
    $
    14,536,822
   65- Columbia Bancorp




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##### Table of Contents



NOTE 4 LOANS AND ALLOWANCE FOR LOAN LOSSES
  2006
    
    
    2005Commercial
    
    $
    136,582,138
    
    
    $
    101,261,156Agriculture
    
    
    86,217,945
    
    
    
    84,270,798Real estate
    
    
    347,525,929
    
    
    
    291,283,166Real estate  construction
    
    
    212,825,973
    
    
    
    184,331,410Consumer
    
    
    12,540,381
    
    
    
    13,775,366Credit card and other loans
    
    
    10,212,287
    
    
    
    7,922,886805,904,653
    
    
    
    682,844,782Less allowance for loan losses
    
    
    (10,143,338
    )
    
    
    (9,525,524
    )Less unearned loan fees
    
    
    (1,428,030
    )
    
    
    (1,512,621
    )Loans, net of allowance for loan losses
and unearned loan fees
    
    $
    794,333,285
    
    
    $
    671,806,637
    2006
    
    
    2005
    
    
    2004BALANCE, beginning of year
    
    $
    9,525,524
    
    
    $
    8,184,488
    
    
    $
    6,612,308Provision for loan losses
    
    
    2,900,000
    
    
    
    3,115,000
    
    
    
    2,760,000Loans charged off
    
    
    (1,930,859
    )
    
    
    (1,963,225
    )
    
    
    (1,291,479
    )Loan recoveries
    
    
    338,673
    
    
    
    189,261
    
    
    
    103,659Reclassify liability for off-balance-sheet
financial instrument credit losses
    
    
    (690,000
    )
    
    
    
    
    
    
    BALANCE, end of year
    
    $
    10,143,338
    
    
    $
    9,525,524
    
    
    $
    8,184,488
 Columbia Bancorp




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##### Table of Contents



NOTE 5 PROPERTY AND EQUIPMENT
  2006
    
    
    2005Land
    
    $
    3,876,794
    
    
    $
    3,640,628Construction in progress
    
    
    554,918
    
    
    
    1,654,607Buildings and improvements
    
    
    13,053,216
    
    
    
    11,021,381Furniture and equipment
    
    
    10,885,212
    
    
    
    8,982,632Total property and equipment
    
    
    28,370,140
    
    
    
    25,299,248Less accumulated depreciation
    
    
    (10,281,364
    )
    
    
    (9,515,739
    )Property and equipment, net of
accumulated depreciation
    
    $
    18,088,776
    
    
    $
    15,783,509
  2007
    
    $
    149,5402008
    
    
    135,7512009
    
    
    97,5012010
    
    
    7,138Total
    
    $
    389,930
 NOTE 6 TIME CERTIFICATES
   Years ending December 31,
    
    2007
    
    $
    199,734,3052008
    
    
    35,186,3832009
    
    
    32,267,9312010
    
    
    6,318,1752011
    
    
    1,331,177Thereafter
    
    
    301,699$
    275,139,670
 67- Columbia Bancorp




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##### Table of Contents



NOTE 7 LINES OF CREDIT AND BORROWED FUNDS
    December 31, 2006
    
    December 31, 2005Weighted-
    
    
    
    
    
    
    
    
    
    Weighted-Maturity
    
    Average
    
    
    
    
    
    Maturity
    
    AverageAmount
    
    Year
    
    Interest Rate
    
    Amount
    
    Year
    
    Interest Rate$61,500,000
    
    
    2007
    
    
    
    5.45
    %
    
    $
    23,000,000
    
    
    
    2006
    
    
    
    4.25
    %5,929,957
    
    
    2008
    
    
    
    3.25
    %
    
    
    11,500,000
    
    
    
    2007
    
    
    
    4.43
    %1,351,613
    
    
    2009
    
    
    
    2.81
    %
    
    
    7,719,957
    
    
    
    2008
    
    
    
    3.28
    %605,650
    
    
    2013
    
    
    
    5.47
    %
    
    
    1,951,613
    
    
    
    2009
    
    
    
    2.81
    %
    
    
    
    
    
    
    
    
    
    
    669,381
    
    
    
    2013
    
    
    
    5.47
    %$69,387,220
    
    
    
    
    
    
    5.21
    %
    
    $
    44,840,951
    
    
    
    
    
    
    
    4.09
    %
  NOTE 8 JUNIOR SUBORDINATED DEBENTURES
   Columbia Bancorp




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##### Table of Contents



NOTE 9 INTEREST-RATE SWAP
    69- Columbia Bancorp




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##### Table of Contents



NOTE 10 INCOME TAXES
  2006
    
    
    2005
    
    
    2004Current tax expense:Federal
    
    $
    8,682,850
    
    
    $
    8,489,103
    
    
    $
    6,467,478State
    
    
    1,191,177
    
    
    
    901,554
    
    
    
    1,080,3389,874,027
    
    
    
    9,390,657
    
    
    
    7,547,816Deferred tax (benefit) expense:Federal
    
    
    (361,373
    )
    
    
    (1,567,853
    )
    
    
    (1,182,981
    )State
    
    
    (67,757
    )
    
    
    (293,973
    )
    
    
    (139,174
    )(429,130
    )
    
    
    (1,861,826
    )
    
    
    (1,322,155
    )Provision for income taxes
    
    $
    9,444,897
    
    
    $
    7,528,831
    
    
    $
    6,225,661
  2006
    
    
    2005Deferred tax assets:Allowance for credit losses
    
    $
    4,209,846
    
    
    $
    3,619,699Deferred compensation
    
    
    599,811
    
    
    
    423,846Purchased state tax credits
    
    
    466,217
    
    
    
    385,320Unrealized losses on investment securities
    
    
    59,607
    
    
    
    112,685Stock-based compensation
    
    
    8,034
    
    
    
    5,343,515
    
    
    
    4,541,550Deferred tax liabilities:Accumulated depreciation
    
    
    (912,663
    )
    
    
    (745,863
    )Federal Home Loan Bank stock dividends
    
    
    (354,099
    )
    
    
    (349,600
    )Prepaid expenses
    
    
    (219,472
    )
    
    
    (69,172
    )Unrealized gains on interest rate swap
    
    
    (31,237
    )
    
    
    (42,086
    )Other
    
    
    (26,278
    )
    
    
    (2,861
    )(1,543,749
    )
    
    
    (1,209,582
    )Net deferred tax asset
    
    $
    3,799,766
    
    
    $
    3,331,968
  Columbia Bancorp




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##### Table of Contents



2006
    
    
    2005
    
    
    2004Federal income taxes at statutory rate
    
    $
    8,827,006
    
    
    $
    7,419,648
    
    
    $
    5,766,519State income tax expense, net of
federal income tax benefit
    
    
    857,884
    
    
    
    529,228
    
    
    
    713,023Effect of nontaxable interest income
    
    
    (175,077
    )
    
    
    (195,991
    )
    
    
    (200,083
    )Increase in cash surrender value of
life insurance policies
    
    
    (87,855
    )
    
    
    (85,008
    )
    
    
    (23,796
    )Other
    
    
    22,939
    
    
    
    (139,046
    )
    
    
    (30,002
    )Provision for income taxes
    
    $
    9,444,897
    
    
    $
    7,528,831
    
    
    $
    6,225,661Effective tax rate
    
    
    37.45
    %
    
    
    35.52
    %
    
    
    36.70
    %
 NOTE 11 EARNINGS PER SHARE
  2006
    
    
    2005
    
    
    2004Income available to common shareholders
    
    $
    15,775,120
    
    
    $
    13,670,162
    
    
    $
    10,734,690Basic earnings per share:Weighted-average common shares
outstanding
    
    
    9,889,978
    
    
    
    9,802,876
    
    
    
    9,674,662Basic earnings per share
    
    $
    1.60
    
    
    $
    1.39
    
    
    $
    1.11Diluted earnings per share:Weighted-average common shares
outstanding
    
    
    9,889,978
    
    
    
    9,802,876
    
    
    
    9,674,662Net effect of dilutive stock options and
awards  based on the treasury stock
method using average market price
    
    
    261,229
    
    
    
    243,888
    
    
    
    272,072Weighted-average common shares
outstanding and common stock
equivalents
    
    
    10,151,207
    
    
    
    10,046,764
    
    
    
    9,946,734Diluted earnings per share
    
    $
    1.55
    
    
    $
    1.36
    
    
    $
    1.08
  71- Columbia Bancorp




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##### Table of Contents



NOTE 12 EMPLOYEE BENEFIT PLANS AND AGREEMENTS
 Employee stock ownership plan (ESOP)
  2006
    
    
    2005Allocated shares, retroactively adjusted
for stock dividends and splits
    
    
    272,324
    
    
    
    291,605Cash on hand
    
    $
    20,561
    
    
    $
    35,275
 4 01(k) Savings Investment Plan
 Incentive Compensation Program
 Executive Officer Salary Continuation, Deferred Compensation and Split Dollar Life Insurance Plans
  Columbia Bancorp




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##### Table of Contents



NOTE 13 TRANSACTIONS WITH RELATED PARTIES
   2006
    
    
    2005BALANCE, beginning of year
    
    $
    7,685,690
    
    
    $
    13,375,735Adjustment for loans of retired Director
who is no longer a related party
    
    
    
    
    
    
    (5,573,571
    )Loans made
    
    
    5,334,894
    
    
    
    3,814,039Loans repaid
    
    
    (6,245,878
    )
    
    
    (3,930,513
    )BALANCE, end of year
    
    $
    6,774,706
    
    
    $
    7,685,690
  NOTE 14 CONCENTRATIONS OF CREDIT RISK
   NOTE 15 FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
    73- Columbia Bancorp




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##### Table of Contents



Contract AmountsDecember 31,2006
    
    
    2005Financial instruments whose contract amounts
contain credit risk:Commitments to extend credit
    
    $
    245,304,814
    
    
    $
    200,916,446Undisbursed credit card lines of credit
    
    
    21,265,491
    
    
    
    19,581,692Commercial and standby letters of credit
    
    
    3,503,903
    
    
    
    2,308,877$
    270,074,208
    
    
    $
    222,807,015
    Columbia Bancorp




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##### Table of Contents



NOTE 16 COMMITMENTS AND CONTINGENCIES
 Operating lease commitments
 Years ending December 31,
    
    2007
    
    $
    1,039,2162008
    
    
    1,011,0162009
    
    
    944,0242010
    
    
    880,2942011
    
    
    883,463Thereafter
    
    
    4,868,086$
    9,626,099
  Legal contingencies
 75- Columbia Bancorp




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##### Table of Contents



NOTE 17 PARENT COMPANY FINANCIAL INFORMATION
  December 31,2006
    
    
    2005ASSETSCash
    
    $
    4,980,880
    
    
    $
    1,433,977Investment security available-for-sale
    
    
    104,250
    
    
    
    96,000Investment security held-to-maturity
    
    
    80,294
    
    
    
    80,616Investment in subsidiary Bank
    
    
    90,946,963
    
    
    
    78,666,976Deferred tax asset
    
    
    
    
    
    
    865,705Interest rate swap
    
    
    80,924
    
    
    
    114,990Other assets
    
    
    569,306
    
    
    
    2,036,908TOTAL ASSETS
    
    $
    96,762,617
    
    
    $
    83,295,172LIABILITIESJunior subordinated debentures
    
    $
    4,124,000
    
    
    $
    4,124,000Dividend payable
    
    
    997,954
    
    
    
    887,575Deferred compensation plan liability
    
    
    13,851
    
    
    
    268,395Employee benefits
    
    
    449,300
    
    
    
    309,721Deferred tax liability
    
    
    25,910
    
    
    
    Interest and other payables
    
    
    133,941
    
    
    
    212,991Total liabilities
    
    
    5,744,956
    
    
    
    5,802,682SHAREHOLDERS EQUITYCommon stock
    
    
    54,767,348
    
    
    
    33,425,084Retained earnings
    
    
    36,295,441
    
    
    
    44,189,700Accumulated other comprehensive loss, net of tax
    
    
    (45,128
    )
    
    
    (122,294
    )Total shareholders equity
    
    
    91,017,661
    
    
    
    77,492,490TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    96,762,617
    
    
    $
    83,295,172
 Columbia Bancorp




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##### Table of Contents



Years Ended December 31,2006
    
    
    2005
    
    
    2004REVENUESEquity in undistributed earnings of subsidiary
    
    $
    11,513,148
    
    
    $
    10,263,758
    
    
    $
    8,319,064Dividends
    
    
    5,732,000
    
    
    
    4,611,000
    
    
    
    3,300,000Other
    
    
    97,045
    
    
    
    27,324
    
    
    
    6,580EXPENSESAdministrative and other expenses
    
    
    (1,567,073
    )
    
    
    (1,231,920
    )
    
    
    (890,954
    )Net income
    
    $
    15,775,120
    
    
    $
    13,670,162
    
    
    $
    10,734,690
 Years Ended December 31,2006
    
    
    2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    15,775,120
    
    
    $
    13,670,162
    
    
    $
    10,734,690Adjustments to reconcile net income to net cash from
operating activities:Equity in undistributed earnings of subsidiary
    
    
    (11,513,148
    )
    
    
    (10,263,758
    )
    
    
    (8,319,064
    )Depreciation of property and equipment
    
    
    23,265
    
    
    
    7,789
    
    
    
    9,925Stock-based compensation
    
    
    113,196
    
    
    
    
    
    
    
    Income tax benefit from stock options exercised
    
    
    (33,078
    )Loss on sale or write-down of land
    
    
    
    
    
    
    
    
    
    
    5,429Changes in other assets and liabilities
    
    
    2,294,364
    
    
    
    (192,889
    )
    
    
    (231,454
    )Net cash from operating activities
    
    
    6,659,719
    
    
    
    3,221,304
    
    
    
    2,199,526CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale of property and equipment
    
    
    
    
    
    
    
    
    
    
    102,381Payments made for purchase of property and equipment
    
    
    (150,606
    )
    
    
    
    
    
    
    (35,540
    )Net cash from investing activities
    
    
    (150,606
    )
    
    
    
    
    
    
    66,841CASH FLOWS FROM FINANCING ACTIVITIESDividends paid and cash paid for fractional shares
    
    
    (3,772,096
    )
    
    
    (3,204,900
    )
    
    
    (3,163,045
    )Repurchase of common stock
    
    
    (31,070
    )
    
    
    (139,878
    )
    
    
    (226,229
    )Income tax benefit from stock options exercised
    
    
    33,078
    
    
    
    
    
    
    
    Proceeds from the exercise of stock options
    
    
    807,878
    
    
    
    936,853
    
    
    
    725,193Net cash from financing activities
    
    
    (2,962,210
    )
    
    
    (2,407,925
    )
    
    
    (2,664,081
    )NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
    
    
    3,546,903
    
    
    
    813,379
    
    
    
    (397,714
    )CASH AND CASH EQUIVALENTS, beginning of year
    
    
    1,433,977
    
    
    
    620,598
    
    
    
    1,018,312CASH AND CASH EQUIVALENTS, end of year
    
    $
    4,980,880
    
    
    $
    1,433,977
    
    
    $
    620,598SUPPLEMENTAL DISCLOSURE OF NONCASH
INVESTING AND FINANCING ACTIVITIESChange in unrealized loss or gain on available-for-sale
securities, net of tax
    
    $
    100,383
    
    
    $
    (142,828
    )
    
    $
    (88,474
    )Change in fair value of interest-rate swap, net of tax
    
    $
    (23,217
    )
    
    $
    100,821
    
    
    $
    (23,812
    )Cash dividend declared and payable after year-end
    
    $
    997,954
    
    
    $
    887,575
    
    
    $
    795,524
 77- Columbia Bancorp




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##### Table of Contents



NOTE 18 REGULATORY MATTERS
    To Be Well-Capitalized UnderFor Capital
    
    Prompt CorrectiveAs of December 31, 2006
    
    Actual
    
    Adequacy Purposes
    
    Action Provisions(dollars in thousands)
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    RatioTotal capital to risk-weighted assets:Columbia Bancorp
    
    $
    98,647
    
    
    
    11.36
    %
    
    $
    69,460
    
    
    
    38
    %
    
    
    N/A
    
    
    
    N/AColumbia River Bank
    
    $
    94,516
    
    
    
    10.89
    %
    
    $
    69,410
    
    
    
    38
    %
    
    $
    86,763
    
    
    
    >10
    %Tier 1 capital to risk-weighted assets:Columbia Bancorp
    
    $
    87,776
    
    
    
    10.11
    %
    
    $
    34,730
    
    
    
    34
    %
    
    
    N/A
    
    
    
    N/AColumbia River Bank
    
    $
    83,671
    
    
    
    9.64
    %
    
    $
    34,705
    
    
    
    34
    %
    
    $
    52,058
    
    
    
    >6
    %Tier 1 capital to average assets:Columbia Bancorp
    
    $
    87,776
    
    
    
    8.54
    %
    
    $
    41,106
    
    
    
    34
    %
    
    
    N/A
    
    
    
    N/AColumbia River Bank
    
    $
    83,671
    
    
    
    8.95
    %
    
    $
    37,375
    
    
    
    34
    %
    
    $
    46,719
    
    
    
    >5
    %
 To Be Well-Capitalized UnderFor Capital
    
    Prompt CorrectiveAs of December 31, 2005
    
    Actual
    
    Adequacy Purposes
    
    Action Provisions(dollars in thousands)
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    RatioTotal capital to risk-weighted assets:Columbia Bancorp
    
    $
    83,837
    
    
    
    10.95
    %
    
    $
    61,264
    
    
    
    >8
    %
    
    
    N/A
    
    
    
    N/AColumbia River Bank
    
    $
    81,011
    
    
    
    10.63
    %
    
    $
    60,990
    
    
    
    >8
    %
    
    $
    76,237
    
    
    
    >10
    %Tier 1 capital to risk-weighted assets:Columbia Bancorp
    
    $
    74,312
    
    
    
    9.70
    %
    
    $
    30,632
    
    
    
    >4
    %
    
    
    N/A
    
    
    
    N/AColumbia River Bank
    
    $
    71,486
    
    
    
    9.38
    %
    
    $
    30,495
    
    
    
    >4
    %
    
    $
    45,742
    
    
    
    >6
    %Tier 1 capital to average assets:Columbia Bancorp
    
    $
    74,312
    
    
    
    9.77
    %
    
    $
    30,432
    
    
    
    >4
    %
    
    
    N/A
    
    
    
    N/AColumbia River Bank
    
    $
    71,486
    
    
    
    8.91
    %
    
    $
    32,076
    
    
    
    >4
    %
    
    $
    40,095
    
    
    
    >5
    %
 Columbia Bancorp




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##### Table of Contents



NOTE 19 FAIR VALUES OF FINANCIAL INSTRUMENTS
  2006
    
    2005Estimated
    
    
    
    
    
    EstimatedCarrying
    
    Fair
    
    Carrying
    
    Fair(dollars in thousands)
    
    Amount
    
    Value
    
    Amount
    
    ValueFinancial assets:Cash and due from banks
    
    $
    38,141
    
    
    $
    38,141
    
    
    $
    34,632
    
    
    $
    34,632Interest-bearing deposits with banks
    
    
    51,443
    
    
    
    51,443
    
    
    
    23,175
    
    
    
    23,175Federal funds sold
    
    
    58,930
    
    
    
    58,930
    
    
    
    29,282
    
    
    
    29,282Investment securities available-for-sale
    
    
    20,825
    
    
    
    20,825
    
    
    
    17,844
    
    
    
    17,844Investment securities held-to-maturity
    
    
    14,440
    
    
    
    14,537
    
    
    
    16,497
    
    
    
    16,749Restricted equity securities
    
    
    2,439
    
    
    
    2,439
    
    
    
    2,439
    
    
    
    2,439Loans held-for-sale
    
    
    7,538
    
    
    
    7,538
    
    
    
    5,879
    
    
    
    5,879Loans, net of allowance for loan losses
and unearned loan fees
    
    
    794,333
    
    
    
    745,652
    
    
    
    671,807
    
    
    
    655,210Interest rate swap
    
    
    80
    
    
    
    80
    
    
    
    115
    
    
    
    115Financial liabilities:Demand and savings deposits
    
    $
    583,926
    
    
    $
    583,926
    
    
    $
    539,648
    
    
    $
    539,648Time certificates
    
    
    275,140
    
    
    
    275,134
    
    
    
    168,174
    
    
    
    167,025Notes payable
    
    
    70,014
    
    
    
    69,844
    
    
    
    45,691
    
    
    
    45,353Junior subordinated debentures
    
    
    4,124
    
    
    
    4,124
    
    
    
    4,124
    
    
    
    4,124
   79- Columbia Bancorp




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ITEM 9
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A.
    
    CONTROLS AND PROCEDURES
 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
  Managements Report on the Internal Control Over Financial Reporting
   
    
    Address the maintenance of reasonably detailed records and data that accurately and
fairly reflect the transactions and dispositions of Columbias assets;
    
    Provide reasonable assurance that transactions are recorded as necessary to allow the
preparation of financial statements in accordance with GAAP and that our receipts and
expenditures are being made with proper authorizations of Columbias management and
directors; and
    
    Provide reasonable assurance regarding the timely prevention or detection of
unauthorized transactions, acquisitions, expenditures or the use or disposition of
Columbias assets that could have a material effect on the consolidated financial
statements.
    Columbia Bancorp




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ITEM 9B
    
    OTHER INFORMATION
  
 PART III
 
 ITEM 10
    
    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
   Directors:
 
 Executive Officers:
  
 Code of Ethics
  
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##### Table of Contents



Audit Committee
  
 ITEM 11
    
    EXECUTIVE COMPENSATION
  
 ITEM 12
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
  
 ITEM 13
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14
    
    PRINCIPAL ACCOUNTING FEES AND SERVICES
  
 PART IV
 
 ITEM 15
    
    EXHIBITS, FINANCIAL STATEMENT SCHEDULES
    3.1.1
    
    Articles of Incorporation of Columbia Bancorp (Incorporated herein by reference to Exhibit
3(i) of Columbias Quarterly Report on Form 10-Q for the period ended June 30, 1999.)3.1.2
    
    Bylaws of Columbia Bancorp (Incorporated herein by reference to Exhibit 15.5 of Columbias
Annual Report on Form 10-KSB for the period ended December 31, 1998.)4.1
    
    Indenture dated as of December 19, 2002 between Columbia Bancorp, as Issuer, and Wells Fargo
Bank, N.A., as Trustee, relating to Floating Rate Junior Subordinated Debt Securities due 2033
(Incorporated herein by reference to Exhibit 4.1 of Columbias Annual Report on Form 10-K for the
period ended December 31, 2004.)4.2
    
    Form of Floating Rate Junior subordinated Debt Security due 2033 (Incorporated herein by
reference to Exhibit A as contained in Exhibit 4.1 of Columbias Annual Report on Form 10-K for the
period ended December 31, 2004.)
 Columbia Bancorp




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##### Table of Contents



10.1+
    
    Columbia Bancorp 1999 Stock Incentive Plan (Amended 2002) (Incorporated herein by reference
to Exhibit 4.2 of Columbias Form S-8 Registration Statement filed January 28, 2005.)10.2+
    
    Columbia Bancorp Restated Employee Stock Ownership Plan and Trust Agreement (1999
Restatement) (Incorporated herein by reference to Exhibit 10.2 of Columbias Annual Report on Form
10-K for the period ended December 31, 1999.)10.3+
    
    Employment Agreement between Roger L. Christensen and Columbia Bancorp dated April 15, 2006
(Incorporated herein by reference to Exhibit 10.1 of Columbias Quarterly Report on Form 10-Q for
the period ended June 30, 2006.)10.4+
    
    Executive Bonus Deferral Agreement between Columbia River Bank and Roger L. Christensen
(Incorporated herein by reference to Exhibit 10.01 of Columbias Current Report on Form 8-K filed
February 21, 2007.)10.5+
    
    Executive Salary Continuation Agreement between Columbia River Bank and Roger L. Christensen
(Incorporated herein by reference to Exhibit 10.02 of Columbias Current Report on Form 8-K filed
February 21, 2007.)10.6+
    
    Split Dollar Agreement between Columbia River Bank and Roger L. Christensen (Incorporated
herein by reference to Exhibit 10.3 of Columbias Quarterly Report on Form 10-Q for the period
ended September 20, 2002.)10.7+
    
    Employment Agreement between Greg B. Spear and Columbia Bancorp dated April 15, 2006
(Incorporated herein by reference to Exhibit 10.2 of Columbias Quarterly Report on Form 10-Q for
the period ended June 30, 2006.)10.8+
    
    Executive Bonus Deferral Agreement between Columbia River Bank and Greg B. Spear
(Incorporated herein by reference to Exhibit 10.01 of Columbias Current Report on Form 8-K filed
February 21, 2007.)10.9+
    
    Executive Salary Continuation Agreement between Columbia River Bank and Greg B. Spear
(Incorporated herein by reference to Exhibit 10.02 of Columbias Current Report on Form 8-K filed
February 21, 2007.)10.10+
    
    Split Dollar Agreement between Columbia River Bank and Greg B. Spear (Incorporated herein by
reference to Exhibit 10.22 of Columbias Annual Report on Form 10-K for the period ended December
31, 2002.)10.11+
    
    Employment Agreement between R. Shane Correa and Columbia River Bank dated April 15, 2006
(Incorporated herein by reference to Exhibit 10.5 of Columbias quarterly report on Form 10-Q for
the period ended June 30, 2006.)10.12+
    
    Executive Bonus Deferral Agreement between Columbia River Bank and R. Shane Correa
(Incorporated herein by reference to Exhibit 10.01 of Columbias Current Report on Form 8-K filed
February 21, 2007.)10.13+
    
    Executive Salary Continuation Agreement between Columbia River Bank and R. Shane Correa
(Incorporated herein by reference to Exhibit 10.02 of Columbias Current Report on Form 8-K filed
February 21, 2007.)10.14+
    
    Split Dollar Agreement between Columbia River Bank and R. Shane Correa (Incorporated herein
by reference to Exhibit 10.1 of Columbias Quarterly Report on Form 10-Q for the period ended March
31, 2006.)10.15+
    
    Employment Agreement between Craig J. Ortega and Columbia River Bank dated April 15, 2006
(Incorporated herein by reference to Exhibit 10.3 of Columbias Quarterly Report on Form 10-Q for
the period ended June 30, 2006.)10.16+
    
    Executive Bonus Deferral Agreement between Columbia River Bank and Craig J. Ortega
(Incorporated herein by reference to Exhibit 10.01 of Columbias Current Report on Form 8-K filed
February 21, 2007.)10.17+
    
    Executive Salary Continuation Agreement between Columbia River Bank and Craig J. Ortega
(Incorporated herein by reference to Exhibit 10.02 of Columbias Current Report on Form 8-K filed
February 21, 2007.)10.18+
    
    Split Dollar Agreement between Columbia River Bank and Craig J. Ortega (Incorporated herein
by reference to Exhibit 10.16 of Columbias Annual Report on Form 10-K for the period ended
December 31, 2002.)
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10.19+
    
    Employment Agreement between Britt W. Thomas and Columbia River Bank dated April 15, 2006
(Incorporated herein by reference to Exhibit 10.4 of Columbias Quarterly Report on Form 10-Q for
the period ended June 30, 2006.)10.20+
    
    Executive Bonus Deferral Agreement between Columbia River Bank and Britt W. Thomas
(Incorporated herein by reference to Exhibit 10.01 of Columbias Current Report on Form 8-K filed
February 21, 2007.)10.21+
    
    Executive Salary Continuation Agreement between Columbia River Bank and Britt W. Thomas
(Incorporated herein by reference to Exhibit 10.02 of Columbias Current Report on Form 8-K filed
February 21, 2007.)10.22+
    
    Split Dollar Agreement between Columbia River Bank and Britt W. Thomas (Incorporated herein
by reference to Exhibit 10.19 of Columbias Annual Report on Form 10-K for the period ended
December 31, 2002.)10.23+
    
    Employment Agreement between Christine M. Herb and Columbia River Bank dated December 29,
2006 (Incorporated herein by reference to Exhibit 99.2 of Columbias Current Report on Form 8-K
filed January 3, 2007.)10.24+
    
    Employment Agreement between Robert V. Card and Columbia River Bank dated January 1, 2007
(Incorporated herein by reference to Exhibit 99.2 of Columbias Current Report on Form 8-K filed
January 3, 2007.)10.25+
    
    Executive Salary Continuation Agreement between Columbia River Bank and Robert V. Card
(Incorporated herein by reference to Exhibit 99.1 of Columbias Current Report on Form 8-K filed
January 12, 2007.)10.26+
    
    Deferred Compensation Agreement of April 1, 1999 between Terry L. Cochran and Columbia
Bancorp (Incorporated herein by reference to Exhibit 10.2 of Columbias Annual Report on Form 10-K
for the period ended December 31, 1999.)10.27+
    
    Release of All Claims and Hold Harmless Agreement between Columbia Bancorp and Terry L.
Cochran dated January 2, 2007 (Incorporated herein by reference to Exhibit 10.1 of Columbias
Current Report on Form 8-K filed January 3, 2007.)13.1
    
    Annual Report to Shareholders for the Year Ended December 31, 2006.21.1
    
    List of Subsidiary.23.1
    
    Consent of Moss Adams, LLP.31.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-4(a).31.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a).32.1
    
    Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) and
Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350.32.2
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b) and
Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350.
 
 +
    
    Management contract, compensation plan or arrangement. Columbia Bancorp




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##### Table of Contents



SIGNATURES
  COLUMBIA BANCORPBy:
    
    /s/ Roger L. ChristensenRoger L. ChristensenPresident and Chief Executive Officer
  Signatures
    
    Titles/s/ Roger L. Christensen

Roger L. Christensen
    
    President and Chief Executive Officer and
Director (Principal Executive Officer)/s/ Greg B. Spear

Greg B. Spear
    
    Executive Vice President, Chief Financial Officer
and Chief Administrative Officer (Principal
Financial and Accounting Officer)/s/ Richard E. Betz
    
    Director and ChairmanRichard E. Betz/s/ Charles F. Beardsley
    
    DirectorCharles F. Beardsley/s/ William A. Booth
    
    DirectorWilliam A. Booth/s/ Lori R. Boyd
    
    DirectorLori R. Boyd/s/ Dennis L. Carver
    
    DirectorDennis L. Carver/s/ Terry L Cochran
    
    DirectorTerry L Cochran/s/ James J. Doran
    
    DirectorJames J. Doran/s/ Jean S. McKinney
    
    DirectorJean S. McKinney/s/ Donald T. Mitchell
    
    DirectorDonald T. Mitchell
 85- Columbia Bancorp