Columbia Bank, the largest locally owned bank in Howard County, has agreed to sell itself to a Pennsylvania financial conglomerate for $313 million in cash and stock in a deal that analysts said would benefit both companies.

Under that deal, Fulton Financial Corp. will operate Columbia Bank as a separate subsidiary that would keep its name, employees, management team and logo.

"They really want us to do our own thing in Maryland and that's what's so attractive about this deal," said John M. Bond Jr. , Columbia Bank's co-founder, chairman and chief executive. "I can't think of a single financial institution out there that would allow us to do that. I can't think of a better match for us."

To gain a foothold in the lucrative and fast-growing Howard County market, where Columbia Bank dominates, Fulton is paying more than 3.2 times Columbia Bank's book value. The book value is calculated by subtracting a bank's liabilities from its assets and is a measure of its net worth.

The market reacted by boosting shares of Columbia Bancorp, Columbia Bank's holding company. The bank's stock closed yesterday at $41.70 a share, up $4.45.

Fulton's stock fell 47 cents to close at $18.02, possibly because it is offering a premium for Columbia Bank, some analysts said.

The average bank purchase price in the mid-Atlantic region this summer has been 2.4 times book value, according to SNL Financial, a research firm in Charlottesville.

"It was definitely a rich premium they paid but definitely justifiable given the strength of the [Howard County] market and the strength of Columbia Bank," said Collyn B. Gilbert, a bank analyst at Ryan Beck & Co., an investment banking firm, which has received a fee from Fulton on a debt deal.

Howard County's demographics, particularly its median household income of $87,000, makes it the 13th-most-attractive banking market in the country, according to research firm SNL Financial. The county has 65 bank branches with deposits of slightly more than $3 billion. Of those, Columbia Bank is the county's market-share leader, with $514 million in deposits as of June 2004, the most recent figures from the Federal Deposit Insurance Corp. show. Bank of America, with $464 million in deposits in the county, was the closest competitor.

Bond said that for a long time his bank has been in an awkward stage.

"We've been the largest of the small and the smallest of the large," he said. "We weren't big enough to justify having products that big banks offer, such as trust services. But we were getting big enough that customers expected more of us."

Since its founding in 1987, Columbia Bank has grown to include 24 branches, most of them in Howard County. The rest are in Montgomery and Prince George's counties, and the Baltimore area.

If the deal closes as expected in early 2006, Columbia Bank would gain more than additional services. It would tremendously expand its lending ability because the amount of money a bank can lend to a borrower is tied to the amount of capital it has. Fulton commands $12.1 billion in assets through its 14 affiliated banks in Pennsylvania, New Jersey, Delaware, Maryland and Virginia. Columbia Bank has $1.3 billion in assets.

"We'll add arrows to their quiver," said Rufus A. Fulton Jr., chairman and chief executive of Fulton Financial, based in Lancaster, Pa. "There are customers they can't call on now that they will be able to call on soon."

Fulton, who yesterday was on his way to Columbia Bank's headquarters, said the two companies had been talking to each other for about two years regarding a merger and began serious talks a few weeks ago.

During that time, community banks that have surpassed $1 billion in assets, as Columbia did in 2003, have been prime acquisition targets for larger banks seeking to gain market share in the Washington region's fast-growing suburbs.

Bond declined to comment on whether his company had been approached by other firms in the past except to say that "it's kind of like dating. If you're an attractive candidate in an attractive market, you'd be disappointed if people weren't interested in you."

John M. Bond Jr. is co-founder, chairman and chief executive of Columbia Bank, the largest locally owned bank in affluent Howard County.