BOWIE, Md., Feb. 8, 2008 (PRIME NEWSWIRE) -- James W. Cornelsen, President and Chief Executive Officer of Old Line Bancshares, Inc. (Nasdaq:OLBK), the parent company of Old Line Bank, reported that net income increased $152,336 or 41.50% to $519,368 or $0.13 per basic and diluted common share for the three month period ending December 31, 2007 compared to $367,032 or $0.09 per basic and diluted common share for the same period in 2006. Net income for the twelve month period ended December 31, 2007 was $1,583,109 or $0.38 per basic and diluted common share. This was comparable to net income for the twelve month period ended December 31, 2006 of $1,573,851 or $0.37 per basic and diluted common share.
Total assets increased $27.1 million or 12.43% to $245.2 million on December 31, 2007 compared to the December 31, 2006 level of $218.1 million. Additionally, for the twelve month period ended December 31, 2007, total loans grew 34.24% or $51.5 million to $201.9 million and total deposits at year end were $177.8 million which represented an $8.1 million or 4.77% increase. Customer deposits in overnight Master Notes which are included in short term borrowings also increased 126.39% or $9.1 million to $16.3 million at December 31, 2007 from $7.2 million at December 31, 2006.
Mr. Cornelsen stated: "Despite the challenging interest rate, credit and economic environment, I am pleased to report sound financial performance for the fourth quarter and full year ended 2007. I am particularly pleased that even with the considerable loan growth we have experienced over the prior three years we have continued to maintain the quality in our loan portfolio. We ended the quarter with two non-performing loans totaling $1.1 million and one loan in the amount of approximately $6,000 past due 30 days at year end. We have no other loans past due more than 60 or 90 days. We also do not have any substantive investments or loans comprised of sub-prime mortgages.
"In the third quarter, we reported that we had one non-performing loan in the amount of $127,000. The foreclosure process on the property that secured this loan was completed in January and we anticipate we will receive payment in full (including costs) in February. The borrower on the second non-performing loan filed for bankruptcy protection in November 2007. During the bankruptcy proceedings, we discovered that the borrower provided the bank with fraudulent financial statements. A commercial real estate property secures this loan. The loan to value at inception of this loan was 80%. We anticipate that we will receive repayment for the balance due on this loan.
"As a result of the growth in the loan portfolio and the reserves required for the non-performing loan mentioned above, we increased the loan loss provision $69,000 during the three month period to $112,000 compared to $43,000 for the three month period ended December 31, 2006. Non-interest expense for the fourth quarter of 2007 was comparable to the fourth quarter of 2006. Although occupancy expense increased $49,796 because of the expenses associated with the operations of our new Greenbelt branch that we opened in June 2007 and other operating expenses increased because of increased FDIC insurance costs, we offset these increases with the decline in salary expenses that occurred with the closing of the marine division at the end of the third quarter and lower bonus payments.
"As previously reported, high gasoline prices and an anemic economy negatively impacted the performance of the marine division and this division posted a $122,000 pre-tax loss during the year as compared to a $6,000 pre-tax profit during the same period in 2006. Because of the losses in this division and because we did not foresee an imminent improvement in the marine industry, in September 2007, we closed this division and released the employees associated with it.
"As expected, the opening of the Greenbelt and Bowie branches in June 2007 and July 2006, respectively and the establishment of our new headquarters in July 2006 caused a $451,795 or 61.83% increase in occupancy and equipment costs during the year. At year end, the Bowie branch had approximately $40 million in deposits and the Greenbelt branch had approximately $12 million in deposits. As a result of the staffing requirements for the new Greenbelt and Bowie branches, the new loan officers we have hired, and additions to corporate staff in 2007, salaries and benefit expenses increased $547,017 or 15.84% during the year. We began to realize the benefits from these investments in infrastructure during the fourth quarter of 2007. We plan to continue to identify and establish new branch locations that will support our long term growth plans. As we previously announced, in 2008, we plan to open our 7th and 8th branches in College Park, Maryland and in Fairwood Office Park in Bowie, Maryland. We have recently identified a location in Annapolis, Maryland for our 9th branch location and expect that we will also open this branch in 2008. These branches provide the foundation on which we expect to achieve our strategic objective of becoming the premiere community bank on the eastern side of Washington, D.C."
At December 31, 2007, the allowance for loan losses was $1.6 million or 0.78% of gross loans compared to $1.3 million or 0.85% of gross loans at December 31, 2006. Historically, we have had minimal past dues and charge-offs. Based on our history, internal analysis and the satisfactory historical performance of the loan portfolio, we believe this allowance appropriately reflects the inherent risk of loss in our portfolio.
As we have previously discussed, rising interest rates, competitive pressures and the decline in the real estate market, have made it a challenge for our industry to attract and retain deposits and maintain historical net interest margins. Although the net interest margin improved from the 3.95% reported for the nine months ended September 30, 2007 to 3.98% for the year ended December 31, 2007, we experienced compression in the net interest margin from the 4.37% reported for the year ended December 31, 2006. This was primarily a result of the change in the mix of deposits as average interest earning deposits represented a higher percentage of total deposits than they had in prior periods. In spite of this compression in the margin, primarily because of a $47.1 million or 37.41% growth in average gross loans outstanding to $173.0 million for the year ended December 31, 2007 from $125.9 million for the year ended December 31, 2006, we were able to increase net interest income $1.0 million or 13.70% during the year and $261,330 or 13.32% for the fourth quarter.
Old Line Bancshares, Inc. 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. Old Line Bank also operates from a branch in Bowie, Maryland, two branches in Waldorf, Maryland and three additional branches in Prince George's County, Maryland. Its primary market area is the suburban Maryland (Washington, D.C. suburbs) counties of Prince George's, Charles and northern St. Mary's. It also targets customers throughout the greater Washington, D.C. metropolitan area.
The statements in this press release that are not historical facts, in particular with respect to payment of non-performing loans, our long term goals and plans and the opening of future branches, constitute "forward-looking statements" as defined by Federal Securities laws. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. These statements can generally be identified by the use of forward-looking terminology such as "believes," "expects," "intends," "may," "will," "should," "anticipates", "plans" or similar terminology. Actual results could differ materially from those currently anticipated due to a number of factors, including, but not limited to: receipt of required regulatory approvals and changes in interest rates and changes in economic, competitive, governmental, regulatory, technological or other factors that could affect Old Line Bancshares, Inc.'s business plans or competitive position or that otherwise require us to re-direct our focus and resources to other areas of our business than currently planned, whether they affect Old Line Bancshares, Inc. specifically or the banking industry generally. Forward-looking statements speak only as of the date they are made. Old Line Bancshares, Inc. will not update forward-looking statements to reflect factual assumptions, circumstances or events that have changed after a forward-looking statement was made. For further information regarding risks and uncertainties that could affect forward-looking statements Old Line Bancshares, Inc. may make, please refer to the filings made by Old Line Bancshares, Inc. with the U.S. Securities and Exchange Commission available at www.sec.gov.
Old Line Bancshares, Inc. & Subsidiary
Consolidated Balance Sheets
December 31, December 31,
2007 2006
---------------------------------------------------------------------
(Unaudited)
Assets
Cash and due from banks $ 3,172,089 $ 5,120,068
Federal funds sold 9,822,079 34,508,127
------------- -------------
Total cash and cash equivalents 12,994,168 39,628,195
Time deposits in other banks 2,000,000 --
Investment securities
available for sale 9,393,356 14,118,649
Investment securities held to maturity 2,301,591 2,802,389
Loans, less allowance for loan losses 201,941,667 150,417,217
Restricted equity securities at cost 2,080,250 1,575,550
Investment in real estate LLC 805,971 793,714
Bank premises and equipment 4,207,395 4,049,393
Accrued interest receivable 918,078 820,628
Deferred income taxes 161,940 226,873
Bank owned life insurance 7,769,290 3,458,065
Other assets 637,570 239,989
------------- -------------
$ 245,211,276 $ 218,130,662
============= =============
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 35,141,289 $ 37,963,066
Interest-bearing 142,670,944 131,708,780
------------- -------------
Total deposits 177,812,233 169,671,846
Short-term borrowings 16,347,096 9,193,391
Long-term borrowings 15,000,000 3,000,000
Accrued interest payable 693,868 629,557
Income tax payable 238,226 334,496
Other liabilities 488,599 485,418
------------- -------------
210,580,022 183,314,708
------------- -------------
Stockholders' equity
Common stock,
par value $.01 per share;
authorized 15,000,000 shares;
issued and outstanding
4,075,848.5 in 2007,
and 4,253,698.5 in 2006 40,758 42,537
Additional paid-in capital 30,465,013 31,868,025
Retained earnings 4,155,232 3,077,313
------------- -------------
34,661,003 34,987,875
Accumulated other
comprehensive income (29,749) (171,921)
------------- -------------
34,631,254 34,815,954
------------- -------------
$ 245,211,276 $ 218,130,662
============= =============
Old Line Bancshares, Inc. & Subsidiary
Consolidated Statements of Income
Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
---------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited)
Interest revenue
Loans,
including fees $ 3,557,578 $ 2,661,541 $ 12,768,154 $ 9,080,202
U.S. Treasury
securities 26,260 32,060 115,597 127,299
U.S. government
agency securities 57,331 88,586 288,161 271,621
Mortgage backed
securities 10,499 15,181 48,946 65,186
Municipal securities 26,954 26,954 107,852 110,555
Federal funds sold 91,693 335,648 1,116,822 1,288,536
Other 46,630 20,342 108,826 79,645
----------- ----------- ------------ -----------
Total interest
revenue 3,816,945 3,180,312 14,554,358 11,023,044
----------- ----------- ------------ -----------
Interest expense
Deposits 1,440,515 1,083,407 5,689,554 3,219,826
Borrowed funds 153,283 135,088 573,405 509,851
----------- ----------- ------------ -----------
Total interest
expense 1,593,798 1,218,495 6,262,959 3,729,677
----------- ----------- ------------ -----------
Net interest
income 2,223,147 1,961,817 8,291,399 7,293,367
Provision for
loan losses 112,000 43,000 318,000 339,000
----------- ----------- ------------ -----------
Net interest income
after provision
for loan losses 2,111,147 1,918,817 7,973,399 6,954,367
----------- ----------- ------------ -----------
Non-interest revenue
Service charges
on deposit
accounts 72,113 70,542 292,610 266,235
Marine division
broker
origination fees 10,131 128,127 272,349 391,738
Earnings on
bank owned
life insurance 92,723 37,788 340,853 145,880
Income (loss) on
investment in
real estate LLC 23,844 (21,497) 24,100 56,278
Gain (loss) on
disposal
of assets -- -- (7,372) --
Other fees
and commissions 59,669 28,076 250,774 168,913
----------- ----------- ------------ -----------
Total
non-interest
revenue 258,480 243,036 1,173,314 1,029,044
----------- ----------- ------------ -----------
Non-interest expense
Salaries 639,839 731,854 3,045,932 2,720,022
Employee benefits 204,036 183,786 953,554 732,447
Occupancy 258,008 208,212 934,277 533,020
Equipment 63,583 71,802 248,182 197,644
Data processing 55,722 54,396 221,107 176,928
Other operating 343,621 314,818 1,371,499 1,201,303
----------- ----------- ------------ -----------
Total
non-interest
expense 1,564,809 1,564,868 6,774,551 5,561,364
----------- ----------- ------------ -----------
Income before
income taxes 804,818 596,985 2,372,162 2,422,047
Income taxes 285,450 229,953 789,053 848,196
----------- ----------- ------------ -----------
Net income $ 519,368 $ 367,032 $ 1,583,109 $ 1,573,851
=========== =========== ============ ===========
Basic earnings
per common share $ 0.13 $ 0.09 $ 0.38 $ 0.37
Diluted earnings
per common share $ 0.13 $ 0.09 $ 0.38 $ 0.37