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CST: 15/10/2019 06:41:05   

Old Line Bancshares, Inc. Reports Net Income of $8.9 Million for the Quarter Ended June 30, 2019

83 Days ago

BOWIE, Md., July 23, 2019 (GLOBE NEWSWIRE) -- Old Line Bancshares, Inc. (“Old Line Bancshares” or the “Company”) (Nasdaq: OLBK), the parent company of Old Line Bank (the “Bank”), reports net income increased $6.2 million, or 226.95%, to $8.9 million for the three months ended June 30, 2019, compared to $2.7 million for the three-month period ended June 30, 2018.  Earnings were $0.52 per basic and diluted common share for the three months ended June 30, 2019, compared to $0.17 per basic and diluted common share for the three months ended June 30, 2018.  The increase in net income for the second quarter of 2019 as compared to the same 2018 period is primarily the result of a $6.3 million decrease in non-interest expenses.  Net income for the 2018 period included $7.1 million ($6.2 million net of taxes) of merger-related expenses (or $0.38 per basic and $0.37 per diluted common share) in connection with the Company’s acquisition of Bay Bancorp, Inc. (“BYBK”), the former parent company of Bay Bank, FSB (“Bay”), in April 2018.  In addition, net interest income increased $160,000 during the three months ended June 30, 2019, compared to the same period last year.

Net income was $17.4 million for the six months ended June 30, 2019, compared to $8.8 million for the same period last year, an increase of $8.6 million, or 98.11%.  Earnings were $1.02 per basic and diluted common share for the six months ended June 30, 2019, compared to $0.61 per basic and $0.60 per diluted common share for the same period last year.  The increase in net income is primarily the result of increases of $5.8 million in net interest income and $1.0 million in non-interest income and a decrease of $3.1 million in non-interest expenses.  Included in net income for the 2018 period was $7.1 million ($6.2 million net of taxes, or $0.43 per basic and $0.42 per diluted common share) for merger-related expenses associated with the acquisition of BYBK.

Net interest income increased during each of the three and six months ended June 30, 2019 compared to the same periods last year primarily as a result of an increase in interest income on loans, partially offset by an increase in interest expense.  Non-interest income for the six months ended June 30, 2019 increased $1.0 million, or 20.82%, primarily as a result of increases of $563 thousand in income from the point of sale (“POS”) sponsorship program, $408 thousand in income on marketable loans, and $265 thousand in earnings on bank owned life insurance (“BOLI”).  Non-interest expense decreased $6.3 million, or 30.11%, for the three months ended June 30, 2019 and $3.1 million, or 9.63%, for the six-month period ended June 30, 2019 compared to the same periods last year.  Non-interest expense decreased primarily as a result of our having no merger-related expenses during the 2019 periods, whereas we incurred $7.1 million of such expenses in connection with the BYBK merger during the three- and six-month periods ended June 30, 2018.  The impact of the lack of merger-related expenses during 2019 was partially offset by increases in other non-interest expense categories, primarily related to the BYBK acquisition. 

Net loans held for investment at June 30, 2019 increased $11.2 million compared to December 31, 2018 and $72.6 million compared to June 30, 2018.  The increase in loans was a result of net organic growth of $89.7 million and $214.7 million, respectively, partially offset by $78.5 million and $142.1 million, respectively, in paydowns on previously-acquired loans since December 31, 2018 and June 30, 2018. 

Total deposits at June 30, 2019 increased by $88.4 million, or 3.85%, since December 31, 2018 and $176.8 million, or 8.01%, compared to June 30, 2018, as a result of organic growth derived from our greater market presence, including the locations we have added as a result of our recent acquisitions.   

Total assets were $3.1 billion at June 30, 2019, increasing $125.6 million from $2.95 billion at December 31, 2018 and $142.2 million from $2.93 billion at June 30, 2018.  In addition, the Company had net loans and net deposits of approximately $2.4 billion each at June 30, 2019. 

James W. Cornelsen, President and Chief Executive Officer of Old Line Bancshares, stated: “I am pleased to report another quarter of favorable earnings of $8.9 million during the challenging interest rate environment.  Deposits grew by $49.0 million during the second quarter and by $88.4 million this year.  Our mortgage group provided solid results increasing income on marketable loans by approximately $408 thousand in 2019 compared to the same period last year.” 

HIGHLIGHTS :

  • Average gross loans increased $166.6 million, or 7.37%, and $430.6 million, or 21.61%, respectively, to $2.4 billion for each of the three- and six-month periods ended June 30, 2019, from $2.3 billion and $2.0 billion, respectively, during the three and six months ended June 30, 2018. 

  • Loans originated and sold in the secondary market were $69.0 million for the six months ended June 30, 2019 compared to $48.0 million for the same six-month period last year.  Increases in both the volume of and the premiums associated with the sale of these loans increased income on marketable loans by $408 thousand compared to the same period last year. 

  • Total yield on interest-earning assets increased to 4.69% for the three months ended June 30, 2019, compared to 4.58% for the same period last year.  Total yield on interest-earning assets increased to 4.72% for the six months ended June 30, 2019, compared to 4.55% for the same period last year. 
  • Return on average assets (“ROAA”) and return on average equity (“ROAE”) were 1.17% and 9.20%, respectively, for the three months ended June 30, 2019, compared to ROAA and ROAE of 0.39% and 3.14%, respectively, for the second quarter of 2018. 
  • ROAA and ROAE were 1.16% and 9.09%, respectively, for the six months ended June 30, 2019, compared to ROAA and ROAE of 0.72% and 6.27%, respectively, for the six months ended June 30, 2018. 
  • Total assets increased $125.6 million, or 4.26%, during the six months ended June 30, 2019, primarily due to an increase of $76.3 million in our investment securities available for sale and the addition of $26.5 million for an operating lease right of use asset.
  • Total deposits grew by $88.4 million, or 3.85%, since December 31, 2018.  

  • We ended the second quarter of 2019 with a book value of $22.90 per common share and a tangible book value of $16.51 per common share compared to $21.77 and $15.39, respectively, at December 31, 2018.

  • We maintained appropriate levels of liquidity and by all regulatory measures remained “well capitalized.”

Results of Operations for the Three Months Ended June 30, 2019 Compared to June 30, 2018

Average interest-earning assets increased $244.1 million for the three-month period ended June 30, 2019 compared to the same period of 2018.  The average yield on such assets was 4.69% for the three months ended June 30, 2019 compared to 4.58% for the comparable 2018 period.  The increase in the average balance of our interest-earning assets was primarily due to organic loan growth and, to a lesser extent, an increase in the average balance of our investment securities available for sale.  The increase in the average yield was primarily the result of higher yields on our investment securities available for sale and on our loans held for investment.  Average interest-bearing liabilities increased $229.5 million for the three-month period ended June 30, 2019 compared to the same period of 2018 primarily due to organic deposit growth since June 30, 2018.  The average rate paid on such liabilities increased to 1.62% for the three-month period ended June 30, 2019 compared to 1.08% for the same period in 2018 due primarily to higher rates paid on our money market accounts, certificates of deposit, and borrowings.

The net interest margin for the three months ended June 30, 2019 decreased to 3.49% from 3.80% for the three months ended June 30, 2018.  The net interest margin decreased due to increased interest rates on both deposits and on our borrowed funds, partially offset by an increase in the yield on our interest-earning assets.  The net interest margin during the second quarter of 2019 was positively affected by the amount of accretion on acquired loans.  Accretion decreased due to a lower amount of early payoffs on acquired loans with fair value marks during the three months ended June 30, 2019 compared to the same period of 2018.  The fair value accretion/amortization is recorded on paydowns recognized during the quarter, which contributed 14 basis points for the three months ended June 30, 2019 compared to 18 basis points for the three months ended June 30, 2018.  

Net interest income increased $160 thousand, or 0.69%, for the three months ended June 30, 2019 compared to the same period of 2018, as a result of a $3.5 million increase in interest income, primarily due to a $2.7 million increase in loan interest income resulting from increases in both the average balance of and yields on loans, offset almost entirely by a $3.4 million increase in interest expense.  Interest expense increased due to increases in both the average balance of and average interest rates on our deposits and borrowings.

Non-interest expense decreased $6.3 million, or 30.11%, for the three-month period ended June 30, 2019 compared to the same period of 2018, primarily due to our having no merger and integration expenses during the 2019 period compared to $7.1 million in merger and integration expenses during the three months ended June 30, 2018, partially offset by increases in salaries and employee benefits, occupancy and equipment, and core deposit amortization.  Salaries and employee benefits increased $399 thousand and occupancy and equipment expenses increased $153 thousand primarily as a result of the inclusion of expenses related to the staff and the branches, respectively, that we acquired in the BYBK acquisition for the full quarter ended June 30, 2019 compared to approximately two and half months of such expenses during the quarter ended June 30, 2018.  Core deposit amortization increased $109 thousand as a result of the higher amortization of premiums resulting from the deposits we acquired in the BYBK acquisition.  

Results of Operations for the Six Months Ended June 30, 2019 Compared to June 30, 2018

Average interest-earning assets increased $485.8 million for the six months ended June 30, 2019 compared to the same period of 2018.  The average yield on such assets was 4.72% for the six months ended June 30, 2019 compared to 4.55% for the comparable 2018 period.  The increase in the average balance of our interest-earning assets was primarily due to an increase in the average balance of our loans, resulting from both organic growth and the loans that we acquired in the BYBK acquisition, as well as, to a lesser extent, an increase in the average balance of our investment securities available for sale.  The increase in the average yield was primarily the result of higher yields on our investment securities available for sale and on our loans held for investment.  Average interest-bearing liabilities increased $400.1 million for the six-month period ended June 30, 2019 compared to the same period of 2018, primarily as a result of the deposits we acquired in the BYBK acquisition.  The average rate paid on such liabilities increased to 1.58% for the six-month period ended June 30, 2019 compared to 1.06% for the same period in 2018 due primarily to higher rates paid on our money market accounts, certificates of deposit, and borrowings.

The net interest margin for the six months ended June 30, 2019 decreased to 3.54% from 3.78% for the six months ended June 30, 2018.  The net interest margin decreased due to increased interest rates on both deposits and on our borrowed funds, partially offset by an increase in the yield on our interest-earning assets.  The net interest margin during the six-month ended June 30, 2019 was positively affected by the amount of accretion on acquired loans.  Accretion increased due to a higher amount of early payoffs on acquired loans with fair value marks during the six months ended June 30, 2019 compared to the same period of 2018.  The fair value accretion/amortization is recorded on paydowns recognized, which contributed 14 basis points for the six months ended June 30, 2019 compared to 13 basis points for the six months ended June 30, 2018.  

Net interest income increased $5.8 million, or 14.12%, for the six months ended June 30, 2019 compared to the same period of 2018, primarily due to an increase in loan interest income resulting from increases in both the average balance of and yields on loans, partially offset by an increase in interest expense.  Interest expense increased due to increases in both the average balance of and average interest rates on our deposits and borrowings.       

Non-interest income increased $1.0 million, or 20.82%, for the six-month period ended June 30, 2019 compared to the same period of 2018, primarily as a result of increases of $563 thousand in income from the POS sponsorship program, which was not in place during the first quarter of 2018, $408 thousand in income on marketable loans as a result of a $21 million increase  in the volume of loans originated for sale compared to the six months ended June 30, 2018, which resulted in an increase in the aggregate amount of premiums we received on such sales, and $265 thousand in earnings on BOLI resulting from the $16.3 million of BOLI acquired in the BYBK acquisition.  

Non-interest expense decreased $3.1 million, or 9.63%, for the six-month period ended June 30, 2019 compared to the same period of 2018, primarily as a result of our having no merger and integration expenses during the six months ended June 30, 2019 compared to $7.1 million in merger and integration expenses during the same period last year in connection with the BYBK acquisition.  Partially offsetting the lack of merger and integration expenses were increases in salaries and employee benefits, occupancy and equipment, core deposit amortization, data processing, and other operating expenses.  Salaries and employee benefits increased $2.0 million and occupancy and equipment expenses increased $626 thousand primarily as a result of the inclusion of expenses related to the staff and the branches, respectively, that we acquired in the BYBK acquisition for the entire six-month period of 2019 compared to just approximately two and half months of such expenses for the comparable 2018 period.  Core deposit amortization increased $455 thousand as a result of the higher amortization of premiums from deposits that we acquired in the BYBK acquisition.  Data processing expenses increased as a result of additional customer transactions primarily due to the additional branches, and therefore additional customers, resulting from our acquisition of BYBK, which were included for the full 2019 period but only for less than half of the 2018 period.  Other operating expenses increased $929 thousand due to increases in general operating costs, such as FDIC insurance, marketing and advertising, sponsorships and donations, loan expenses, software expense, and telephone expense.

Old Line Bancshares is the parent company of Old Line Bank, a Maryland chartered commercial bank headquartered in Bowie, Maryland, approximately 10 miles east of Andrews Air Force Base and 20 miles east of Washington, D.C.  The Bank has 37 branches located in its primary market area of the suburban Maryland (Washington, D.C. suburbs, Southern Maryland and Baltimore suburbs) counties of Anne Arundel, Baltimore, Calvert, Carroll, Charles, Harford, Howard, Frederick, Montgomery, Prince George's and St. Mary's, and Baltimore City.  It also targets customers throughout the greater Washington, D.C. and Baltimore metropolitan areas. 

Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures.  The Company’s management uses these non-GAAP financial measures, and believes that non-GAAP financial measures provide additional useful information that allows readers, to evaluate the ongoing performance of the Company and provide meaningful comparison to its peers.  Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company.  Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP.

Information about Proposed Merger and Where to Find It

On July 23, 2019, the Company and Old Line Bank entered into an Agreement and Plan of Merger with Wesbanco, Inc. (“WesBanco”) and Wesbanco Bank, Inc. (“WesBanco Bank”), pursuant to which the Company will be merged with and into WesBanco, with WesBanco being the surviving company (the “Merger”), and Old Line Bank will be merged with and into WesBanco Bank, with WesBanco Bank the surviving bank.  In connection with the proposed Merger, WesBanco will file with the Securities and Exchange Commission (“SEC”) a Registration Statement on Form S-4 that will include a proxy statement of the Company and WesBanco and a prospectus of WesBanco, as well as other relevant documents concerning the proposed Merger.  This earnings release is not a substitute for the prospectus/proxy statement or any other document that the Company or WesBanco may file with the SEC.  COMPANY STOCKHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED MERGER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.  Materials filed by the Company or WesBanco with the SEC may be obtained for free at the SEC’s website at http://www.sec.gov, on the NASDAQ website at http://www.nasdaq.com, and from either WesBanco’s or Old Line Bancshares’ website at http://www.wesbanco.com or http://www.oldlinebank.com, respectively.

Participants in the Solicitation

This earnings release does not constitute a solicitation of a proxy from any stockholder with respect to the proposed Merger.  The Company and WesBanco and their respective executive officers and directors may, however, be deemed to be participants in the solicitation of proxies from Company stockholders in connection with the proposed Merger.  Information about the directors and executive officers of WesBanco is set forth in the proxy statement for WesBanco’s 2019 annual meeting of shareholders, as filed with the SEC on March 13, 2019 and as supplemented on April 5, 2019.  Information about the Company’s directors and executive officers is set forth in the proxy statement for the Company’s 2019 annual meeting of stockholders, as filed with the SEC on April 26, 2019.  Information about any other persons who may, under the rules of the SEC, be considered participants in the solicitation of Company stockholders in connection with the proposed Merger will be included in the proxy statement/prospectus.  You can obtain free copies of these documents from the SEC, the Company, or WesBanco using the website information above.

  Old Line Bancshares, Inc. & Subsidiaries  
  Consolidated Balance Sheets  
           
  June 30,
2019
  March 31,
2019
  December 31,
2018 (1)
  September 30,
2018
  June 30,
2018
  (Unaudited)   (Unaudited)           (Unaudited)   (Unaudited)
Cash and due from banks $ 56,392,900   $ 49,619,806     $ 41,495,763     $ 45,774,719   $ 61,684,888  
Interest bearing accounts   1,832,209     2,107,845       2,051,273       3,522,685     3,845,419  
Federal funds sold   781,033     961,329       953,582       1,008,801     928,337  
Total cash and cash equivalents   59,006,142     52,688,980       44,500,618       50,306,205     66,458,644  
Investment securities available for sale   295,969,550     307,034,351       219,705,762       216,358,059     209,941,534  
Loans held for sale   15,443,340     9,632,523       11,564,993       8,829,777     34,037,532  
Loans held for investment, less allowance for loan losses of $7,889,735              
and $7,471,023 for June 30, 2019 and December 31, 2018   2,420,437,144     2,417,186,160       2,409,227,698       2,384,579,814     2,347,821,496  
Equity securities at cost   11,524,301     13,863,550       11,150,750       13,063,250     14,854,746  
Premises and equipment   42,326,703     42,561,705       42,624,787       43,060,727     43,719,013  
Accrued interest receivable   9,131,984     8,607,100       7,958,511       8,072,826     7,715,123  
Bank owned life insurance   68,750,106     68,333,419       67,920,021       67,490,846     67,062,920  
Annuity plan   6,293,571     6,269,638       6,268,426       6,298,627     6,276,320  
Other real estate owned   882,510     882,510       882,510       1,469,166     2,357,947  
Goodwill   94,668,455     94,668,455       94,668,455       94,403,635     94,403,635  
Core deposit intangible   14,054,647     14,704,408       15,362,232       16,024,950     16,688,635  
Other assets   37,124,392     40,813,248       18,172,332       21,060,315     22,038,116  
Total assets $ 3,075,612,845   $ 3,077,246,047     $ 2,950,007,095     $ 2,931,018,197   $ 2,933,375,661  
                                   
Deposits                                  
Non-interest bearing $ 620,754,339   $ 579,962,005     $ 559,059,672     $ 581,339,177   $ 603,257,708  
Interest bearing   1,763,727,019     1,755,472,767       1,736,989,227       1,660,902,293     1,604,420,214  
Total deposits   2,384,481,358     2,335,434,772       2,296,048,899       2,242,241,470     2,207,677,922  
Short term borrowings   221,654,780     282,141,546       228,184,856       272,534,890     314,676,164  
Long term borrowings   38,503,032     38,437,015       38,371,291       38,304,981     38,238,670  
Accrued interest payable   3,040,219     2,460,829       2,844,715       1,643,666     1,827,605  
Supplemental executive retirement plan   6,180,673     6,089,246       5,997,819       6,123,518     6,057,063  
Other liabilities   32,441,274     32,559,241       7,788,981       9,989,481     10,553,800  
Total liabilities   2,686,301,336     2,697,122,649       2,579,236,561       2,570,838,006     2,579,031,224  
                                   
Stockholders' equity                                  
Common stock   169,991     170,516       170,311       169,889     169,889  
Additional paid-in capital   292,653,644     293,590,357       293,501,107       293,139,653     292,836,679  
Retained earnings   95,956,286     89,084,561       82,628,356       74,167,389     67,601,752  
Accumulated other comprehensive income (loss)   531,588     (2,722,036 )     (5,529,240 )     (7,296,740 )   (6,263,883 )
Total stockholders' equity   389,311,509     380,123,398       370,770,534       360,180,191     354,344,437  
Total liabilities and stockholders' equity $ 3,075,612,845   $ 3,077,246,047     $ 2,950,007,095     $ 2,931,018,197   $ 2,933,375,661  
Shares of basic common stock outstanding   16,999,146     17,051,569       17,031,052       16,988,883     16,988,883  
                                   
(1) Financial information at December 31, 2018 has been derived from audited financial statements.        
           


Old Line Bancshares, Inc. & Subsidiaries
Consolidated Statements of Income
                                                       
  Three Months
Ended
June 30,
  Three Months
Ended
March 31,
  Three Months
Ended
December 31,
  Three Months
Ended
September 30,
  Three Months
Ended
June 30,
  Six Months
Ended
June 30,
  Six Months
Ended
June 30,
  2019   2019   2018 (1)   2018   2018   2019   2018
  (Unaudited)   (Unaudited)           (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
Interest income                                                      
Loans, including fees $ 29,125,229     $ 28,850,931     $ 29,284,012     $ 29,056,814     $ 26,448,727     $ 57,976,160     $ 46,149,490  
Investment securities and other   2,577,723       2,059,312       1,743,737       1,696,510       1,719,991       4,637,035       3,343,566  
Total interest income   31,702,952       30,910,243       31,027,749       30,753,324       28,168,718       62,613,195       49,493,056  
Interest expense                                                      
Deposits   6,103,812       5,616,515       5,067,752       4,098,787       3,146,235       11,720,327       5,452,968  
Borrowed funds   2,130,630       1,982,713       1,891,413       1,768,532       1,714,250       4,113,343       3,049,081  
Total interest expense   8,234,442       7,599,228       6,959,165       5,867,319       4,860,485       15,833,670       8,502,049  
Net interest income   23,468,510       23,311,015       24,068,584       24,886,005       23,308,233       46,779,525       40,991,007  
Provision for loan losses   72,583       414,175       613,672       307,870       532,257       486,758       927,153  
Net interest income after provision for loan losses   23,395,927       22,896,840       23,454,912       24,578,135       22,775,976       46,292,767       40,063,854  
Non-interest income                                                      
Service charges on deposit accounts   712,623       627,260       745,646       728,550       722,879       1,339,883       1,299,463  
POS sponsorship program   636,756       600,061       641,063       711,577       673,502       1,236,817       673,502  
Gain on sales or calls of investment securities   15,927       -       -       -       -       15,927       -  
Earnings on bank owned life insurance   524,753       494,180       531,604       520,785       461,056       1,018,933       753,992  
Gains (losses) on disposal of assets   32,599       -       -       (1,100 )     -       32,599       14,366  
Loss on write down of stock   -       -       -       (91,498 )     (60,998 )     -       (60,998 )
Gain on sale of loans   -       -       556,358       -       -       -       -  
Income on marketable loans   841,843       496,843       479,824       411,850       511,879       1,338,686       930,351  
Other fees and commissions   493,271       544,435       1,238,049       525,171       879,733       1,037,706       1,372,396  
Total non-interest income   3,257,772       2,762,779       4,192,544       2,805,335       3,188,051       6,020,551       4,983,072  
Non-interest expense                                                      
Salaries & employee benefits   7,600,771       7,133,583       6,743,042       7,491,736       7,201,335       14,734,354       12,686,785  
Occupancy & equipment   2,396,021       2,452,773       2,339,115       2,349,691       2,242,640       4,848,794       4,223,041  
Data processing   760,727       727,183       699,769       659,926       702,182       1,487,910       1,311,821  
Merger and integration   -       -       -       2,282,705       7,121,802       -       7,121,802  
Core deposit amortization   649,761       657,824       662,718       663,685       540,737       1,307,585       853,050  
(Gains) losses on sales of other real estate owned   -       -       (27,801 )     26,266       41,956       -       54,472  
OREO expense   41,833       25,666       77,142       (99,957 )     27,995       67,499       212,989  
Other operating   3,282,605       3,251,684       3,465,550       3,288,286       3,198,759       6,534,289       5,605,405  
Total non-interest expense   14,731,718       14,248,713       13,959,535       16,662,338       21,077,406       28,980,431       32,069,365  
                                                       
Income before income taxes   11,921,981       11,410,906       13,687,921       10,721,132       4,886,621       23,332,887       12,977,561  
Income tax expense   3,009,901       2,906,732       3,526,073       2,456,303       2,160,788       5,916,633       4,186,546  
Net income   $ 8,912,080     $ 8,504,174     $ 10,161,848     $ 8,264,829     $ 2,725,833     $ 17,416,254     $ 8,791,015  
Earnings per basic share $ 0.52     $ 0.50     $ 0.60     $ 0.49     $ 0.17     $ 1.02     $ 0.61  
Earnings per diluted share $ 0.52     $ 0.50     $ 0.59     $ 0.48     $ 0.17     $ 1.02     $ 0.60  
Adjusted earnings per basic share (non-GAAP) $ -     $ -     $ -     $ 0.58     $ 0.55     $ -     $ 1.04  
Adjusted earnings per diluted share (non-GAAP) $ -     $ -     $ -     $ 0.57     $ 0.54     $ -     $ 1.02  
Dividend per common share $ 0.12     $ 0.12     $ 0.10     $ 0.10     $ 0.10     $ 0.24     $ 0.18  
Average number of basic shares   17,025,728       17,039,961       17,008,504       16,988,883       16,249,625       17,032,649       14,407,182  
Average number of dilutive shares   17,148,958       17,170,507       17,181,820       17,187,837       16,464,580       17,149,715       14,620,030  
Return on Average Assets   1.17 %     1.16 %     1.37 %     1.12 %     0.39 %     1.16 %     0.72 %
Return on Average Equity   9.20 %     8.99 %     10.70 %     8.89 %     3.14 %     9.09 %     6.27 %
Operating Efficiency (2)   55.12 %     54.65 %     49.39 %     60.17 %     79.55 %     54.89 %     69.76 %
                                                       
(1) Financial information as of December 31, 2018 has been derived from audited financial statements.      
(2) Operating efficiency is derived by dividing non-interest expense by the total of net interest income and non-interest income.    
     


Old Line Bancshares, Inc. & Subsidiaries
Quarterly Average Balances, Interest and Yields
(Unaudited)
                                                                       
    6/30/2019
          3/31/2019
          12/31/2018
          9/30/2018
          6/30/2018
       
    Average
Balance
    Yield/
Rate

  Average
Balance
    Yield/
Rate

  Average
Balance
    Yield/
Rate

  Average
Balance
    Yield/
Rate

  Average
Balance
    Yield/
Rate

Assets:                                                                      
Int. Bearing Deposits     $ 2,884,435     1.48 %   $ 2,791,150     2.37 %   $ 4,130,258     2.96 %   $ 4,765,138     1.52 %   $ 8,795,004     1.53 %
Investment Securities (2)     320,939,698     3.46 %     262,912,937     3.43 %     236,018,603     3.18 %     233,633,128     3.09 %     235,854,989     3.19 %
Loans     2,428,047,580     4.85 %     2,418,266,901     4.87 %     2,414,758,155     4.84 %     2,397,054,094     4.84 %     2,261,479,332     4.72 %
Allowance for Loan Losses     (7,956,074 )           (7,593,472 )           (7,122,881 )           (6,885,911 )           (6,363,239 )      
Total Loans                                                                      
Net of allowance     2,420,091,506     4.86 %     2,410,673,429     4.89 %     2,407,635,274     4.86 %     2,390,168,183     4.85 %     2,255,116,093     4.74 %
Total interest-earning assets     2,743,915,639     4.69 %     2,676,377,516     4.74 %     2,647,784,135     4.70 %     2,628,566,449     4.69 %     2,499,766,086     4.58 %
Noninterest bearing cash     49,567,273             46,270,628             43,728,188             48,035,416             47,014,071        
Goodwill and Intangibles     109,119,799             109,791,837             110,188,394             110,861,142             100,901,255        
Premises and Equipment     68,532,182             44,403,507             42,902,372             43,626,501             43,592,991        
Other Assets     95,371,009             99,169,559             101,812,816             103,995,121             98,152,802        
Total Assets     $ 3,066,505,902           $ 2,976,013,047           $ 2,946,415,905           $ 2,935,084,629           $ 2,789,427,205        
                                                                       
Liabilities and Stockholders' Equity                                                                    
                                                                       
Interest-bearing Deposits   $ 1,750,122,135     1.40 %   $ 1,741,184,120     1.31 %   $ 1,726,574,227     1.16 %   $ 1,658,060,302     0.98 %   $ 1,522,249,880     0.83 %
Borrowed Funds     290,305,725     2.94 %     268,178,852     3.00 %     255,083,457     2.94 %     283,169,572     2.48 %     288,666,185     2.38 %
Total interest-bearing                                                                       
liabilities     2,040,427,860     1.62 %     2,009,362,972     1.53 %     1,981,657,684     1.39 %     1,941,229,874     1.20 %     1,810,916,065     1.08 %
Noninterest bearing deposits     597,706,343             565,081,492             572,704,465             601,558,786             615,780,315        
      2,638,134,203             2,574,444,464             2,554,362,149             2,542,788,660             2,426,696,380        
                                                                       
Other Liabilities     39,663,626             17,825,648             15,264,196             23,355,099             13,536,574        
Stockholder's Equity     388,708,073             383,742,935             376,789,560             368,940,870             349,194,251        
Total Liabilities and                                                                       
Stockholder's Equity   $ 3,066,505,902           $ 2,976,013,047           $ 2,946,415,905           $ 2,935,084,629           $ 2,789,427,205        
                                                                       
Net interest spread           3.08 %           3.21 %           3.31 %           3.49 %           3.50 %
Net interest income and                                                                       
Net interest margin (1)   $ 23,876,743     3.49 %   $ 23,679,819     3.59 %   $ 24,412,499     3.66 %   $ 25,227,247     3.81 %   $ 23,659,245     3.80 %
                                                                       

(1) Interest revenue is presented on a fully taxable equivalent (FTE) basis.  The FTE basis adjusts for the tax favored status of these types of assets.  Management believes providing this information on a FTE basis provides investors with a more accurate picture of our net interest spread and net interest income and we believe it to be the preferred industry measurement of these calculations.  

(2) Available for sale investment securities are presented at amortized cost.

The accretion of the fair value adjustments resulted in a positive impact in the yield on loans for the three months ended June 30, 2019 and 2018.    Fair value accretion for the current quarter and prior four quarters are as follows: 

  6/30/2019   3/31/2019   12/31/2018   9/30/2018   6/30/2018  
  Fair Value
Accretion
Dollars
  % Impact on
Net Interest
Margin
  Fair Value
Accretion
Dollars
  % Impact on
Net Interest
Margin
  Fair Value
Accretion
Dollars
  % Impact on
Net Interest
Margin
  Fair Value
Accretion
Dollars
  % Impact on
Net Interest
Margin
  Fair Value
Accretion
Dollars
  % Impact on
Net Interest
Margin
 
Commercial loans $ 166,941   0.02 % $ 44,430   0.01 % $ 140,822   0.02 % $ 113,378   0.02 % $ 209,819   0.03 %
Mortgage loans   609,568   0.09     678,636   0.10     504,905   0.08     620,664   0.09     752,461   0.12  
Consumer loans   111,600   0.02     197,086   0.03     104,350   0.02     110,220   0.02     126,575   0.02  
Interest bearing deposits   56,762   0.01     54,947   0.01     61,038   0.01     70,157   0.01     70,178   0.01  
Total Fair Value Accretion $ 944,871   0.14 % $ 975,099   0.15 % $ 811,115   0.13 % $ 914,419   0.14 % $ 1,159,033   0.18 %
                                         

Below is a reconciliation of the fully tax equivalent adjustments and the GAAP basis information presented in this release:

  6/30/2019   3/31/2019   12/31/2018       9/30/2018       6/30/2018      
  Net Interest
Income
  Yield   Net Interest
Income
  Yield   Net Interest
Income
  Yield   Net Interest
Income
  Yield   Net Interest
Income
  Yield  
GAAP net interest income $ 23,468,510   3.43 % $ 23,311,015   3.53 % $ 24,068,584   3.61 % $ 24,886,005   3.76 % $ 23,308,233   3.74 %
Tax equivalent adjustment                                        
Federal funds sold   124   0.00     103   0.00     124   0.00     92   0.00     80   0.00  
Investment securities   195,024   0.03     169,305   0.03     157,634   0.02     159,520   0.02     161,340   0.03  
Loans   213,085   0.03     199,396   0.03     186,157   0.03     181,630   0.03     189,592   0.03  
Total tax equivalent adjustment   408,233   0.06     368,804   0.06     343,915   0.05     341,242   0.05     351,012   0.06  
Tax equivalent interest yield $ 23,876,743   3.49 % $ 23,679,819   3.59 % $ 24,412,499   3.66 % $ 25,227,247   3.81 % $ 23,659,245   3.80 %
                                         


Old Line Bancshares, Inc. & Subsidiaries
Selected Loan Information  
(Unaudited)
(Dollars in thousands)
  June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
June 30,
2018
           
Legacy Loans (1)          
Period End Loan Balance $ 1,757,773   $ 1,704,913   $ 1,668,118   $ 1,609,695   $ 1,543,113  
Deferred Costs   3,554     3,457     3,087     2,805     2,364  
Accruing   1,749,705     1,703,328     1,667,179     1,608,808     1,542,371  
Non-accrual   1,581     1,585     939     887     742  
Accruing 30-89 days past due   3,703     6,454     7,988     6,352     4,565  
Accruing 90 or more days past due   2,782     1,125     -     1,785     178  
Allowance for loan losses   7,417     7,342     7,005     6,699     6,444  
Other real estate owned   -     -     -     -     -  
Net charge offs (recoveries)   (4 )   (5 )   27     (1 )   (3 )
           
Acquired Loans (2)          
Period End Loan Balance $ 667,000   $ 716,624   $ 745,494   $ 779,060   $ 809,049  
Accruing   656,854     712,932     741,777     775,438     807,241  
Non-accrual(3)   3,421     3,692     3,718     3,622     1,808  
Accruing 30-89 days past due   6,716     5,917     11,796     8,120     13,770  
Accruing 90 or more days past due   9     151     243     733     361  
Allowance for loan losses   473     466     466     281     260  
Other real estate owned   883     883     883     1,469     2,358  
Net charge offs (recoveries)   (5 )   82     96     33     88  
           
Allowance for loan losses as % of held for investment loans   0.32 %   0.32 %   0.31 %   0.29 %   0.29 %
Allowance for loan losses as % of legacy held for investment loans   0.45 %   0.46 %   0.45 %   0.42 %   0.43 %
Allowance for loan losses as % of acquired held for investment loans   0.07 %   0.06 %   0.06 %   0.04 %   0.03 %
Total non-performing loans as a % of held for investment loans   0.32 %   0.27 %   0.20 %   0.30 %   0.13 %
Total non-performing assets as a % of total assets   0.28 %   0.24 %   0.20 %   0.29 %   0.19 %
                               

(1) Legacy loans represent total loans excluding loans acquired on April 1, 2011, May 10, 2013, December 4, 2015, July 28, 2017 and April 13, 2018.

(2) Acquired loans represent all loans acquired on April 1, 2011 from Maryland Bank & Trust Company, N.A., on May 10, 2013 from The Washington Savings Bank, on December 4, 2015 from Regal Bank & Trust, on July 28, 2017 from Damascus Community Bank, and on April 13, 2018 from Bay.  We originally recorded these loans at fair value upon acquisition.

(3) These loans are loans that are considered non-accrual because they are not paying in conformance with the original contractual agreement.

OLD LINE BANCSHARES, INC.
CONTACT: ELISE ADAMS
CHIEF FINANCIAL OFFICER
(301) 430-2560

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