Mr. Bond: Columbia Bancorp is an $825 million community bank holding company for The Columbia Bank. We are headquartered in Columbia, Maryland, which is located halfway between Baltimore and Washington. It is a very successful new town that was established by the Rouse Company back in the mid-1960s. Columbia Bancorp was founded in 1987. At that time, a friend and I decided that Columbia would be an excellent location to start a community bank. Since then we have grown rapidly into surrounding areas. Our compound annual rate of growth in total assets has been in excess of 30% over the period since 1987. Arnold Danielson is a consultant who tracks de novo banking institutions on the East Coast. Based upon his data, and over the period that we have been in existence, since roughly the beginning of 1988, there have been 322 new banks formed on the East Coast of which only about 225 survive today. Of the 225, we are the second largest and the second most profitable. We have been very focused since inception on building a premiere community banking franchise in the Baltimore-Washington Corridor. At the present time we are the sixth largest independent banking company in Maryland. To put banking in Maryland in perspective, if you were an outsider looking at Maryland to determine what independent banks are left, you would find no large independent banks and only two medium-sized banks, Mercantile and Provident, both in Baltimore. Beyond these two, there are three other well-performing independent banks in Central Maryland which are located in attractive markets. We are one of those three, the other two being Sandy Spring and F&M. The Maryland banking market is divided into several distinct geographic markets. The central Maryland banking market of the Baltimore/Washington Corridor in which we are located is the most attractive in terms of demographics. The other markets are quite different, ranging from a slower growing urban market in Baltimore to rural markets in Western Maryland and on the Eastern Shore. What really makes the Baltimore/Washington Corridor market special are its superior demographics which relate in part to its proximity to Washington and to the way the local service industry-based economy has developed over recent decades. Baltimore was traditionally a manufacturing/port center, but in recent years has become more similar to the Washington area which has always been more service industry-oriented, particularly as related to the federal government. For example, we have seen strong growth in biotech companies which has no doubt been fostered by our proximity to the National Institutes of Health in the Washington suburbs and to the Johns Hopkins Hospital in Baltimore. The area has also been very successful in attracting new telecommunications companies. The central Maryland market as a whole has really grown very nicely over the last several decades and is a very attractive place to do business, not just for banks but for businesses in general. Columbia is located in Howard County, roughly halfway between Baltimore and Washington. To give you some idea of how attractive our market is, recent census and other data have confirmed Howard County's leadership position nationally. For example, Howard County ranks as the seventh wealthiest county in the entire US based upon median household income. A bank can do well in spite of its market but it's much easier to do well if you're in a strong market and we have an exceptionally strong market in which to work. You asked about my background. I live in this area because of family ties. However, I began my career in New York. After graduating from Columbia Law and Business schools, I worked for McKinsey & Co. for several years as a consultant and became interested in banking. My real training as a banker was at Citibank before moving back home to the Baltimore area in the late 1970s to join a regional bank. In 1987 I began thinking that at mid-career I would like to have my own organization and be a bit more of an entrepreneur. As a result, a friend and I began putting together plans for The Columbia Bank. In building our organization, I have had several objectives. I wanted a strong commercial banking orientation, and I looked to local bankers to find people who would be exceptionally well qualified with deep roots in our community. I was successful in finding just the right commercial banker named Bob Locke. Similarly, I was looking for a very strong consumer banker and for that position turned to a similar but different industry. I have always felt that consumer finance companies really are better at consumer lending in many respects than banks. I found an executive at Household Finance who I hired to run our consumer banking area. I was also very fortunate during the startup period in hiring a Chief Financial Officer, John Scaldara, who is one of the most capable CFOs I have met. The group has stuck together over the years and has worked very well together. Obviously we have added additional people through the years as the organization has grown. We have approximately 340 employees at this time.
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