Strong demand for business and consumer loans drove Columbia Bancorp's profit up 3.6 percent to a record $1.33 million in the third quarter ended Sept. 30, the banking company said yesterday.
The earnings translate into 29 cents per diluted share and are up from the $1.29 million, or 28 cents per diluted share, posted for the third quarter of 1998. The performance beat by a penny the estimates of two analysts who follow the company, according to Zacks Research Inc.
"We are feeling pretty good about it," said John M. Bond Jr., Columbia's chief executive.
For the first nine months of the year, the Columbia-based banking company's profit jumped 9.2 percent to $3.9 million, or 84 cents a diluted share, compared with a profit of $3.54 million, or 77 cents a diluted share, in the corresponding period a year earlier.
Columbia's shares were unchanged and closed at $12.
The strong results have come while the Federal Reserve Board raised interest rates twice this year. The increases have actually helped Columbia, which is a business lender. As the prime rate -- the base rate that banks use in pricing commercial loans to their best customers -- has increased, Columbia has been able to charge higher interest rates on loans and make more money.
As a result, interest income, or income largely from lending, jumped 8.3 percent in the quarter to $5.6 million. In addition, Columbia's net interest margin -- a ratio that shows how much a bank earns on loans and investments after interest payments to depositors and creditors -- rose to 5.25 percent in the quarter, from 5.05 percent in the second quarter of 1999.
"They are starting to rebound from the margin pressure they felt earlier in the year," said Christopher Mutascio, a bank analyst at Legg Mason Wood Walker Inc.
Columbia's deposits rose 7.1 percent to $354 million; assets grew 10.8 percent to $460.1 million; and loans jumped 13.8 percent to $305.3 million.