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CST: 21/11/2019 14:03:45   

Old Line Bancshares, Inc. Reports Net Income of $9.2 Million for the Quarter Ended September 30, 2019

28 Days ago

BOWIE, Md., Oct. 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 $919 thousand, or 11.12%, to $9.2 million for the three months ended September 30, 2019, compared to $8.3 million for the three-month period ended September 30, 2018.  Earnings were $0.54 per basic and diluted common share for the three months ended September 30, 2019, compared to $0.49 per basic and $0.48 per diluted common share for the three months ended September 30, 2018.  The increase in net income for the third quarter of 2019 as compared to the same 2018 period is primarily the result of a $1.8 million decrease in non-interest expenses and a $1.3 million increase in non-interest income, partially offset by a $1.3 million decrease in net interest income.  Net income for the 2018 period included $2.3 million ($1.5 million net of taxes) of merger-related expenses (or $0.09 per basic and 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. 

Net income was $26.6 million for the nine months ended September 30, 2019, compared to $17.1 million for the same period last year, an increase of $9.5 million, or 55.96%.  Earnings were $1.56 per basic and $1.55 per diluted common share for the nine months ended September 30, 2019, compared to $1.12 per basic and $1.10 per diluted common share for the same period last year.  The increase in net income is primarily the result of increases of $4.5 million in net interest income and $2.3 million in non-interest income and a decrease of $4.9 million in non-interest expenses.  Included in net income for the 2018 period was $9.4 million ($7.6 million net of taxes, or $0.50 per basic and diluted common share) for merger-related expenses associated with the acquisition of BYBK.  

Net loans held for investment at September 30, 2019 increased $64.7 million compared to December 31, 2018 and $89.3 million compared to September 30, 2018.  The increase in loans was a result of organic loan growth of $184.5 million and $243.0 million, respectively, partially offset by $120.0 million and $153.5 million, respectively, in paydowns on previously-acquired loans since December 31, 2018 and September 30, 2018.         

Total deposits at September 30, 2019 increased by $117.3 million, or 5.11%, since December 31, 2018 and $171.1 million, or 7.63%, compared to September 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 September 30, 2019, increasing $146.8 million from $2.95 billion at December 31, 2018 and $165.8 million from $2.93 billion at September 30, 2018.  In addition, the Company had net loans of approximately $2.5 billion and deposits of approximately $2.4 billion at September 30, 2019.

James W. Cornelsen, President and Chief Executive Officer of Old Line Bancshares, stated: “We had a strong quarter with organic loan growth of 5.40% and favorable earnings of $9.2 million.   The mortgage group increased originations by approximately $25 million providing solid results once again increasing income by approximately $579 thousand when compared to the same period last year.”  The upcoming merger with WesBanco (“WSBC)” continues to progress pending regulatory and stockholder approvals. We are excited about the opportunities this transaction will bring to our customers, community and employees.  We look forward to joining the company and are eager to work together to continue the tradition of community banking to our clients.”  

HIGHLIGHTS :

  • Average gross loans increased $49.9 million, or 2.08%, and $302.3 million, or 14.20%, respectively, to $2.4 billion for each of the three- and nine-month periods ended September 30, 2019, compared to $2.1 billion and $2.4 billion, respectively, during the three and nine months ended September 30, 2018.
     
  • Loans originated and sold in the secondary market were $120.5 million for the nine months ended September 30, 2019 compared to $77.1 million for the same nine-month period last year, resulting in an increase in income on marketable loans of $987 thousand compared to the same period last year. 

  • Total yield on interest-earning assets increased to 4.68% for the nine months ended September 30, 2019, compared to 4.60% for the same period last year.  Conversely, total yield on interest-earning assets decreased to 4.61% for the three-month period ended September 30, 2019, compared to 4.69% for the corresponding 2018 period.
  • Return on average assets (“ROAA”) and return on average equity (“ROAE”) were 1.19% and 9.24%, respectively, for the three months ended September 30, 2019, compared to ROAA and ROAE of 1.12% and 8.89%, respectively, for the third quarter of 2018. 
  • ROAA and ROAE were 1.17% and 9.14%, respectively, for the nine months ended September 30, 2019, compared to ROAA and ROAE of 0.87% and 7.31%, respectively, for the nine months ended September 30, 2018.

  • Total assets increased $146.8 million, or 4.98%, during the nine months ended September 30, 2019, primarily due to an increase of $64.7 million in loans held for investment, $48.8 million in our investment securities available for sale and the addition of $27.7 million for an operating lease right of use asset.           
  • Total deposits grew by $117.3 million, or 5.11%, since December 31, 2018 with $61.1 million of the growth occurring in non-interest bearing deposits.

  • We ended the third quarter of 2019 with a book value of $23.38 per common share and a tangible book value of $17.02 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 September 30, 2019 Compared to September 30, 2018

Average interest-earning assets increased $102.3 million for the three-month period ended September 30, 2019 compared to the same period of 2018.  The average yield on such assets was 4.61% for the three months ended September 30, 2019 compared to 4.69% for the comparable 2018 period.  The increase in the average balance of our interest-earning assets was almost entirely due to increases in the average balance of our investment securities available for sale and our loans.  The decrease in the average yield was primarily the result of lower yields on our loans held for investment, partially offset by an increase in the yield on our investment securities available for sale.  Average interest-bearing liabilities increased $46.0 million for the three-month period ended September 30, 2019 compared to the same period of 2018 due to a $95 million increase in the average balance of our deposits, primarily as a result of deposit growth since September 30, 2018, partially offset by a $49 million decrease in the average balance of our borrowings.  The average rate paid on such liabilities increased to 1.56% for the three-month period ended September 30, 2019 compared to 1.20% for the same period in 2018 due to higher rates paid on our deposits and borrowings.

The net interest margin for the three months ended September 30, 2019 decreased to 3.48% from 3.81% for the three months ended September 30, 2018.  The net interest margin decreased due to higher interest rates on both our deposits and our borrowed funds and a decrease in the yield on our interest-earning assets.  The net interest margin during the third 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 September 30, 2019 compared to the same period of 2018.  The fair value accretion/amortization is recorded on paydowns recognized during the quarter, which contributed 11 basis points for the three months ended September 30, 2019 compared to 14 basis points for the three months ended September 30, 2018.  

Net interest income decreased $1.3 million, or 5.37%, for the three months ended September 30, 2019 compared to the same period of 2018, as a result of a $1.9 million increase in interest expense, partially offset by a $593 thousand increase in interest income. Interest expense increased due to increases in both the average balance of and average interest rates on our deposits and borrowings, while interest income increased due to an increase in the average balance of our interest-earning assets, partially offset by a decrease in the average yield on such assets. 

Non-interest income increased $1.3 million, or 44.64%, for the three-month period ended September 30, 2019 compared to the same period of 2018, primarily as a result of increases of $544 thousand in income from gain on sales or calls of investment securities, which resulted from the calls of approximately $29.8 million of our callable agencies, and $579 thousand in income on marketable loans as a result of a $25 million increase in the volume of originations in loans held for sale compared to the three months ended September 30, 2018, which resulted in an increase in the aggregate amount of premiums we received on such sales.
                 
Non-interest expense decreased $1.8 million, or 10.97%, for the three-month period ended September 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 $2.3 million in merger and integration expenses during the three months ended September 30, 2018, partially offset by increases in salaries and employee benefits and data processing. 

Results of Operations for the Nine Months Ended September 30, 2019 Compared to September 30, 2018

Average interest-earning assets increased $356.6 million for the nine months ended September 30, 2019 compared to the same period of 2018.  The average yield on such assets was 4.68% for the nine months ended September 30, 2019 compared to 4.60% for the comparable 2018 period.  The increase in the average balance of our interest-earning assets was 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 an increase in the average balance of our investment securities available for sale.  The increase in the average yield was the result of higher yields on our investment securities available for sale and on our loans held for investment.  Average interest-bearing liabilities increased $280.8 million for the nine-month period ended September 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 1.57% for the nine-month period ended September 30, 2019 compared to 1.11% for the same period in 2018 due to higher rates paid on our deposits and borrowings.

The net interest margin for the nine months ended September 30, 2019 decreased to 3.52% from 3.79% for the nine months ended September 30, 2018.  The net interest margin decreased due to higher interest rates on both our deposits and our borrowed funds, partially offset by an increase in the yield on our interest-earning assets.  The net interest margin during the nine-months ended September 30, 2019 was positively affected by the amount of accretion on acquired loans.  Accretion increased slightly due to a higher amount of early payoffs on acquired loans with fair value marks during the nine months ended September 30, 2019 compared to the same period of 2018.  The fair value accretion/amortization is recorded on paydowns recognized, which contributed 13 basis points for each of the nine months ended September 30, 2019 and 2018.  

Net interest income increased $4.5 million, or 6.76%, for the nine months ended September 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 average yield 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 $2.3 million, or 29.40%, for the nine-month period ended September 30, 2019 compared to the same period of 2018, primarily as a result of increases of $540 thousand in income from the POS sponsorship program, which was not in place during the first quarter of 2018, $987 thousand in income on marketable loans as a result of a $43.0 million increase in the volume of originations in loans held for sale compared to the nine months ended September 30, 2018, which resulted in an increase in the aggregate amount of premiums we received on such sales, and $560 thousand in gain on sales or calls of investment securities as a result of the call of approximately $49.2 million of our callable agencies during the period, $32.8 million of which had discounts remaining.  

Non-interest expense decreased $4.9 million, or 10.09%, for the nine-month period ended September 30, 2019 compared to the same period of 2018, primarily as a result of our having no merger and integration expenses during the nine months ended September 30, 2019 compared to $9.4 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 $2.3 million and occupancy and equipment expenses increased $613 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 nine-month period of 2019 compared to just approximately five and a half months of such expenses for the comparable 2018 period.  Core deposit amortization increased $445 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 for only five and a half months for the 2018 period.  Other operating expenses increased $925 thousand due to increases in general operating costs, such as 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.


           
 Old Line Bancshares, Inc. & Subsidiaries 
 Consolidated Balance Sheets 
           
  September 30,
2019
June 30,
2019
March 31,
2019
December 31,
2018 (1)
September 30,
2018
  (Unaudited) (Unaudited) (Unaudited)   (Unaudited)
Cash and due from banks $ 44,987,316 $ 56,392,900 $ 49,619,806   $ 41,495,763   $ 45,774,719  
Interest bearing accounts 1,625,029 1,832,209 2,107,845     2,051,273   3,522,685  
Federal funds sold 388,971 781,033 961,329     953,582   1,008,801  
Total cash and cash equivalents 47,001,316 59,006,142 52,688,980   44,500,618   50,306,205  
Investment securities available for sale 268,534,675 295,969,550 307,034,351   219,705,762   216,358,059  
Loans held for sale 22,534,097 15,443,340 9,632,523   11,564,993   8,829,777  
Loans held for investment, less allowance for loan losses of $8,001,352 and $7,471,023 for September 30, 2019 and December 31, 2018 2,473,922,052 2,420,437,144 2,417,186,160   2,409,227,698   2,384,579,814  
Equity securities at cost 10,886,803 11,524,301 13,863,550   11,150,750   13,063,250  
Premises and equipment 42,073,240 42,326,703 42,561,705   42,624,787   43,060,727  
Accrued interest receivable 7,960,574 9,131,984 8,607,100   7,958,511   8,072,826  
Bank owned life insurance 69,167,140 68,750,106 68,333,419   67,920,021   67,490,846  
Annuity plan 6,226,727 6,293,571 6,269,638   6,268,426   6,298,627  
Other real estate owned 1,091,634 882,510 882,510   882,510   1,469,166  
Goodwill 94,668,455 94,668,455 94,668,455   94,668,455   94,403,635  
Core deposit intangible 13,400,601 14,054,647 14,704,408   15,362,232   16,024,950  
Other assets 39,370,630 37,124,392 40,813,248   18,172,332   21,060,315  
Total assets $ 3,096,837,944 $ 3,075,612,845 $ 3,077,246,047   $ 2,950,007,095   $ 2,931,018,197  
               
Deposits              
Non-interest bearing $ 620,136,296 $ 620,754,339 $ 579,962,005   $ 559,059,672   $ 581,339,177  
Interest bearing 1,793,209,494 1,763,727,019 1,755,472,767     1,736,989,227   1,660,902,293  
Total deposits 2,413,345,790 2,384,481,358 2,335,434,772     2,296,048,899   2,242,241,470  
Short term borrowings 204,378,672 221,654,780 282,141,546     228,184,856   272,534,890  
Long term borrowings 38,569,343 38,503,032 38,437,015     38,371,291   38,304,981  
Accrued interest payable 2,452,857 3,040,219 2,460,829     2,844,715   1,643,666  
Supplemental executive retirement plan 6,115,372 6,180,673 6,089,246     5,997,819   6,123,518  
Other liabilities 34,615,063 32,441,274 32,559,241     7,788,981   9,989,481  
Total liabilities 2,699,477,097 2,686,301,336 2,697,122,649     2,579,236,561   2,570,838,006  
                     
Stockholders' equity                    
Common stock 169,991 169,991 170,516     170,311   169,889  
Additional paid-in capital 292,993,861 292,653,644 293,590,357     293,501,107   293,139,653  
Retained earnings 103,100,167 95,956,286 89,084,561     82,628,356   74,167,389  
Accumulated other comprehensive income (loss) 1,096,828 531,588 (2,722,036
)   (5,529,240 ) (7,296,740
)
Total stockholders' equity 397,360,847 389,311,509 380,123,398     370,770,534   360,180,191  
Total liabilities and stockholders' equity $ 3,096,837,944 $ 3,075,612,845 $ 3,077,246,047   $ 2,950,007,095   $ 2,931,018,197  
Shares of basic common stock outstanding 16,999,146 16,999,146 17,051,569     17,031,052   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
September 30,
Three Months
Ended
June 30,
Three Months
Ended
March 31,
Three Months
Ended
December 31,
  Three Months
Ended
September 30,
  Nine Months
Ended
September 30,
Nine Months
Ended
September 30,
 
  2019 2019 2019 2018 (1)   2018   2019 2018  
  (Unaudited) (Unaudited) (Unaudited)     (Unaudited)   (Unaudited) (Unaudited)  
Interest income                    
Loans, including fees $ 29,125,029 $ 29,125,229 $ 28,850,931 $ 29,284,012   $ 29,056,814   $ 87,101,189 $ 75,206,303  
Investment securities and other 2,221,905 2,577,723 2,059,312 1,743,737   1,696,510   6,858,940 5,040,078  
Total interest income 31,346,934 31,702,952 30,910,243 31,027,749   30,753,324   93,960,129 80,246,381  
Interest expense                    
Deposits 6,119,906 6,103,812 5,616,515 5,067,752   4,098,787   17,840,233 9,551,755  
Borrowed funds 1,678,093 2,130,630 1,982,713 1,891,413   1,768,532   5,791,436 4,817,613  
Total interest expense 7,797,999 8,234,442 7,599,228 6,959,165   5,867,319   23,631,669 14,369,368  
Net interest income 23,548,935 23,468,510 23,311,015 24,068,584   24,886,005   70,328,460 65,877,013  
Provision for loan losses 456,000 72,583 414,175 613,672   307,870   942,758 1,235,023  
Net interest income after provision for loan losses 23,092,935 23,395,927 22,896,840 23,454,912   24,578,135   69,385,702 64,641,990  
Non-interest income                    
Service charges on deposit accounts 709,302 712,623 627,260 745,646   728,550   2,049,185 2,028,013  
POS sponsorship program 688,188 636,756 600,061 641,063   711,577   1,925,005 1,385,079  
Gain on sales or calls of investment securities 544,259 15,927 - -   -   560,186 -  
Earnings on bank owned life insurance 528,512 524,753 494,180 531,604   520,785   1,547,445 1,274,777  
Gains (losses) on disposal of assets - 32,599 - -   (1,100 ) 32,599 13,266  
Loss on write down of stock - - - -   (91,498 ) - (152,496 )
Gain on sale of loans - - - 556,358   -   - -  
Income on marketable loans 990,474 841,843 496,843 479,824   411,850   2,329,160 1,342,201  
Other fees and commissions 596,762 493,271 544,435 1,238,049   525,171   1,634,468 1,897,567  
Total non-interest income 4,057,497 3,257,772 2,762,779 4,192,544   2,805,335   10,078,048 7,788,407  
Non-interest expense                    
Salaries & employee benefits 7,717,352 7,600,771 7,133,583 6,743,042   7,491,736   22,451,706 20,178,521  
Occupancy & equipment 2,337,124 2,396,021 2,452,773 2,339,115   2,349,691   7,185,918 6,572,733  
Data processing 782,593 760,727 727,183 699,769   659,926   2,270,503 1,971,747  
Merger and integration - - - -   2,282,705   - 9,404,507  
Core deposit amortization 654,046 649,761 657,824 662,718   663,685   1,961,631 1,516,734  
(Gains) losses on sales of other real estate owned - - - (27,801 ) 26,266   - 80,738  
OREO expense 59,272 41,833 25,666 77,142   (99,957 ) 126,771 113,032  
Other operating 3,284,031 3,282,605 3,251,684 3,465,550   3,288,286   9,818,320 8,893,691  
Total non-interest expense 14,834,418 14,731,718 14,248,713 13,959,535   16,662,338   43,814,849 48,731,703  
                     
Income before income taxes 12,316,014 11,921,981 11,410,906 13,687,921   10,721,132   35,648,901 23,698,694  
Income tax expense 3,131,785 3,009,901 2,906,732 3,526,073   2,456,303   9,048,418 6,642,850  
Net income  $ 9,184,229 $ 8,912,080 $ 8,504,174 $ 10,161,848   $ 8,264,829   $ 26,600,483 $ 17,055,844  
Earnings per basic share $ 0.54 $ 0.52 $ 0.50 $ 0.60   $ 0.49   $ 1.56 $ 1.12  
Earnings per diluted share $ 0.54 $ 0.52 $ 0.50 $ 0.59   $ 0.48   $ 1.55 $ 1.10  
Adjusted per basic share (non-GAAP) $ - $ - $ - $ -   $ 0.58   $ - $ 1.62  
Adjusted per diluted share (non-GAAP) $ - $ - $ - $ -   $ 0.57   $ - $ 1.60  
Dividend per common share $ 0.12 $ 0.12 $ 0.12 $ 0.10   $ 0.10   $ 0.36 $ 0.28  
Average number of basic shares 16,999,146 17,025,728 17,039,961 17,008,504   16,988,883   17,021,359 15,277,219  
Average number of dilutive shares 17,129,181 17,148,958 17,170,507 17,181,820   17,187,837   17,146,723 15,485,452  
Return on Average Assets 1.19% 1.17% 1.16% 1.37%   1.12%   1.17% 0.87%  
Return on Average Equity 9.24% 9.20% 8.99% 10.70%   8.89%   9.14% 7.31%  
Operating Efficiency (2) 53.74% 55.12% 54.65% 49.39%   60.17%   54.49% 66.15%  
                     
(1) Financial information at 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
 
  9/30/2019     6/30/2019     3/31/2019     12/31/2018     9/30/2018    
  Average
Balance
  Yield/
Rate
Average
Balance
  Yield/
Rate
Average
Balance
  Yield/
Rate
Average
Balance
  Yield/
Rate
Average
Balance
  Yield/
Rate
Assets:                              
Int. Bearing Deposits  $   2,322,594   1.08% $   2,884,435   1.48% $   2,791,150   2.37% $   4,130,258   2.96% $   4,765,138   1.52%
Investment Securities (2) 289,610,460   3.28% 320,939,698   3.46% 262,912,937   3.43% 236,018,603   3.18% 233,633,128   3.09%
Loans 2,446,911,180   4.76% 2,428,047,580   4.85% 2,418,266,901   4.87% 2,414,758,155   4.84% 2,397,054,094   4.84%
Allowance for Loan Losses   (8,018,971 )     (7,956,074 )     (7,593,472 )     (7,122,881 )     (6,885,911 )  
Total Loans  Net of allowance 2,438,892,209   4.77% 2,420,091,506   4.86% 2,410,673,429   4.89% 2,407,635,274   4.86% 2,390,168,183   4.85%
Total interest-earning assets 2,730,825,263   4.61% 2,743,915,639   4.69% 2,676,377,516   4.74% 2,647,784,135   4.70% 2,628,566,449   4.69%
Noninterest bearing cash 50,954,051     49,567,273     46,270,628     43,728,188     48,035,416    
Goodwill and Intangibles 108,464,503     109,119,799     109,791,837     110,188,394     110,861,142    
Premises and Equipment 68,481,420     68,532,182     44,403,507     42,902,372     43,626,501    
Other Assets 94,581,576     95,371,009     99,169,559     101,812,816     103,995,121    
Total Assets  $   3,053,306,813     $   3,066,505,902     $   2,976,013,047     $   2,946,415,905     $   2,935,084,629    
                               
Liabilities and Stockholders' Equity                              
                               
Interest-bearing Deposits $   1,753,113,810   1.38% $   1,750,122,135   1.40% $   1,741,184,120   1.31% $   1,726,574,227   1.16% $   1,658,060,302   0.98%
Borrowed Funds 234,165,450   2.84% 290,305,725   2.94% 268,178,852   3.00% 255,083,457   2.94% 283,169,572   2.48%
Total interest-bearing  liabilities 1,987,279,260   1.56% 2,040,427,860   1.62% 2,009,362,972   1.53% 1,981,657,684   1.39% 1,941,229,874   1.20%
Noninterest bearing deposits 631,577,580     597,706,343     565,081,492     572,704,465     601,558,786    
  2,618,856,840     2,638,134,203     2,574,444,464     2,554,362,149     2,542,788,660    
                               
Other Liabilities 40,290,606     39,663,626     17,825,648     15,264,196     23,355,099    
Stockholder's Equity 394,159,367     388,708,073     383,742,935     376,789,560     368,940,870    
Total Liabilities   and  Stockholder's Equity $   3,053,306,813     $   3,066,505,902     $   2,976,013,047     $   2,946,415,905     $   2,935,084,629    
                               
Net interest spread     3.05%     3.08%     3.21%     3.31%     3.49%

Net interest income and
 
Net interest margin (1)
$   23,944,631   3.48% $   23,876,743   3.49% $   23,679,819   3.59% $   24,412,499   3.66% $   25,227,247   3.81%
   
(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 September 30, 2019 and 2018.    Fair value accretion for the current quarter and prior four quarters are as follows: 

  9/30/2019   6/30/2019   3/31/2019   12/31/2018   9/30/2018  
  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  $   116,166     0.02 % $   166,941     0.02 % $   44,430     0.01 % $   140,822     0.02 % $   113,378     0.02 %
Mortgage loans   430,796     0.06     609,568     0.09     678,636     0.10     504,905     0.08     620,664     0.09  
Consumer loans   106,316     0.02     111,600     0.02     197,086     0.03     104,350     0.02     110,220     0.02  
Interest bearing deposits   64,630     0.01     56,762     0.01     54,947     0.01     61,038     0.01     70,157     0.01  
Total Fair Value Accretion  $   717,908     0.11 % $   944,871     0.14 % $   975,099     0.15 % $   811,115     0.13 % $   914,419     0.14 %
                                         


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

  9/30/2019   6/30/2019   3/31/2019   12/31/2018       9/30/2018      
  Net Interest
Income
  Yield   Net Interest
Income
  Yield   Net Interest
Income
  Yield   Net Interest
Income
  Yield   Net Interest
Income
  Yield  
GAAP net interest income $   23,548,935   3.42 % $   23,468,510   3.43 % $   23,311,015   3.53 % $   24,068,584   3.61 % $   24,886,005   3.76 %
Tax equivalent adjustment                                        
Federal funds sold 111   0.00   124   0.00   103   0.00   124   0.00   92   0.00  
Investment securities 177,627   0.03   195,024   0.03   169,305   0.03   157,634   0.02   159,520   0.02  
Loans 217,958   0.03   213,085   0.03   199,396   0.03   186,157   0.03   181,630   0.03  
Total tax equivalent adjustment 395,696   0.06   408,233   0.06   368,804   0.06   343,915   0.05   341,242   0.05  
Tax equivalent interest yield $   23,944,631   3.48 % $   23,876,743   3.49 % $   23,679,819   3.59 % $   24,412,499   3.66 % $   25,227,247   3.81 %
                                         


Old Line Bancshares, Inc. & Subsidiaries
Selected Loan Information
(Dollars in thousands)
 
  September 30,
2019
June 30,
2019
  March 31,
2019
  December 31,
2018
September 30,
2018
 
                 
Legacy Loans (1)                
Period End Loan Balance $   1,852,652 $   1,757,773   $   1,704,913   $   1,668,118 $   1,609,695  
Deferred Costs 3,742 3,554   3,457   3,087 2,805  
Accruing 1,841,049 1,749,705   1,703,328   1,667,179 1,608,808  
Non-accrual 4,554 1,581   1,585   939 887  
Accruing 30-89 days past due 6,975 3,703   6,454   7,988 6,352  
Accruing 90 or more days past due 74 2,782   1,125   - 1,785  
Allowance for loan losses 7,780 7,417   7,342   7,005 6,699  
Other real estate owned - -   -   - -  
Net charge offs (recoveries) 11   (4 )   (5 ) 27   (1 )
                 
Acquired Loans (2)                
Period End Loan Balance $   625,529 $   667,000   $   716,624   $   745,494 $   779,060  
Accruing 614,066 656,854   712,932   741,777 775,438  
Non-accrual(3) 2,975 3,421   3,692   3,718 3,622  
Accruing 30-89 days past due 7,632 6,716   5,917   11,796 8,120  
Accruing 90 or more days past due 855 9   151   243 733  
Allowance for loan losses 221 473   466   466 281  
Other real estate owned 1,092 883   883   883 1,469  
Net charge offs (recoveries) 334   (5 ) 82   96 33  
                 
Allowance for loan losses as % of held for investment loans 0.32% 0.32%   0.32%   0.31% 0.29%  
Allowance for loan losses as % of legacy held for investment loans 0.43% 0.45%   0.46%   0.45% 0.42%  
Allowance for loan losses as % of acquired held for investment loans 0.04% 0.07%   0.06%   0.06% 0.04%  
Total non-performing loans as a % of held for investment loans 0.34% 0.32%   0.27%   0.20% 0.30%  
Total non-performing assets as a % of total assets 0.31% 0.28%   0.24%   0.20% 0.29%  
                 
(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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