Columbia Bancorp (CBBO), the financial holding company for community banking outfit Columbia River Bank, warned Tuesday that it will likely miss analyst expectations for first quarter earnings, as credit quality in the bank’s residential construction portfolio continues to worsen. Analaysts had been expects earnings per share of $.35 for the first quarter; the banks said it would likely post earnings in $.11 to $.13 range. The warning at Columbia comes after Comptroller of the Currency John C. Dugan recently suggested that regulators were growing concerned with community banks’ exposure to commercial real estate during an extended downturn in U.S. real estate. “The combination of these conditions is putting considerable stress on one particular category of commercial real estate lending: residential construction and development,” Dugan said in a speech before a meeting of the Florida Bankers Association in early February. “Credit quality indicators in our residential construction portfolio continue to experience an increased risk profile since year-end,” the bank said in a press statement. Columbia said it expected to record a loan loss provision of between $3.0 and $3.2 million for the quarter, and that it expected non-performing assets to total approximately $12 million. “While we may face further challenges due to the weakening real estate market, we are closely monitoring and evaluating all significant loans in our portfolio,” explained Columbia Bancorp President and CEO, Roger Christensen. “We will continue to actively manage our credit risk and exposure while we wait for the stabilization of the real estate market.” For more information, visit http://www.columbiabancorp.com.

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