BOWIE, Md., Oct. 29, 2008 (GLOBE 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 $104,854 or 31.92% to $433,393 or $0.11 per basic and diluted common share for the three month period ended September 30, 2008 from $328,539 or $0.08 per basic and diluted common share for the same period in 2007. Net income for the nine month period ended September 30, 2008 was $1.4 million or $0.35 per basic and diluted common share. This represented an increase of $311,309 or 29.27% compared to net income of $1.1 million or $0.25 per basic and diluted common share for the nine months ended September 30, 2007. The $0.10 or 40.0% increase in earnings per basic common share for the nine month period was a result of improved earnings and the Company's repurchase of 216,732 shares of its common stock during the nine month period ended September 30, 2008.
Total assets increased $40.8 million or 16.64% to $286.0 million on September 30, 2008 compared to the December 31, 2007 level of $245.2 million. For the nine month period ended September 30, 2008, total loans increased $21.6 million (10.70%) to $223.5 million compared to the $201.9 million reported at December 31, 2007. For the twelve month period, loans increased $35.4 million (18.82%) compared to the $188.1 million reported at September 30, 2007.
Mr. Cornelsen stated: "Despite the uncertainties faced by our industry, the turbulence in the financial markets and the weak economic environment, I am pleased to report improved net income, continued loan and asset growth for the quarter and nine months ended September 30, 2008 and the opening of our 8th branch in Annapolis, Maryland. Because of the experience of our management and staff and our focus on relationship banking, we were able to grow loans 18.82% over the prior year, maintain the quality in our loan portfolio and fund this loan growth with customer deposits. We ended the quarter with the same non-performing loan totaling approximately $935,000 that we have reported in prior periods. Since the first quarter, the borrower has remitted payments as agreed and we anticipate that the Borrower will have all past due interest and principal paid by March 2009. We also continue to hold the one repossessed boat that secured an approximately $65,000 loan balance that we reported in the second quarter. We do not expect to recognize any substantive additional losses on this boat. With the exception of an approximately $2,000 credit card debt that was paid subsequent to quarter end, we had no other loans past due more than 30 days. We do not have any substantive loans comprised of sub-prime mortgages. Although we have seen a slight decline in our backlog of credits approved or in the underwriting process, we continue to make loans and anticipate that we will report continued loan growth during the remainder of the year. We expect that our relationship approach to banking, our 8th branch location at 167 Jennifer Road, Suite U, Annapolis, Maryland and our existing branch network will allow us to continue to fund our loan growth primarily through customer deposits."
Mr. Cornelsen also said that "during this period of economic stress, we have closely monitored our investment portfolio. This portfolio consists primarily of investment grade instruments issued by the U.S. government, government sponsored entities and municipalities. We have prudently managed our investment portfolio to maintain liquidity and safety and we have never owned stock in Fannie Mae or Freddie Mac or any of the more complex securities available in the market. We do not have any investments that consist of sub-prime mortgages. We also do not have any investments in trust preferred securities in our portfolio.
"As a result of the growth in our loan portfolio and continued deterioration in the economy, we increased the provision for loan losses 50.0% or $60,000 during the three month period and 67.48% or $139,000 during the nine month period ended September 30, 2008. Non-interest expense increased $44,186 (2.48%) for the three month period and $96,742 (1.86%) for the nine month period. These increases were the result of the opening of our new College Park branch in February 2008, the expenses associated with the operations of our Greenbelt branch that we opened in June 2007 and the opening of our Annapolis branch in September 2008. The decline in salary and other operating expenses was a result of the closing of the marine division at the end of the third quarter of 2007 which was partially offset by the staffing requirements in our new branches and the new loan officers hired in 2007."
At December 31, 2007, the allowance for loan losses was $1.6 million or 0.78% of gross loans compared to $1.9 million or 0.85% of gross loans at September 30, 2008. 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 on deposits, 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. The rapid Federal Reserve interest rate reductions we have experienced this year directly impacted our net interest margin which decreased to 3.87% for the nine month period ended September 30, 2008 compared to 3.95% for the nine month period ended September 30, 2007.
By all regulatory measures, Old Line Bank remains well capitalized today and as of September 30, 2008. Management and the Board of Directors are currently evaluating participation in the Treasury Capital Purchase Program to determine if it will benefit the organization, its customers, employees and shareholders.
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, one branch in Annapolis, Maryland and four 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, Anne Arundel, 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 anticipated loan growth, funding of this loan growth through customer deposits, our expectations as relates to relationship banking, payment of non-performing loans, and loss on collateral 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: 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
September 30, December 31,
2008 2007
---------------------------------------------------------------------
(Unaudited)
Assets
Cash and due from banks $ 3,949,847 $ 3,172,089
Federal funds sold 21,904,173 9,822,079
------------ -------------
Total cash and cash equivalents 25,854,020 12,994,168
Time deposits in other banks -- 2,000,000
Investment securities available
for sale 8,751,056 9,393,356
Investment securities held to maturity 9,847,243 2,301,591
Loans, less allowance for loan losses 223,531,239 201,941,667
Restricted equity securities at cost 2,126,550 2,080,250
Investment in real estate LLC 811,925 805,971
Bank premises and equipment 4,801,831 4,207,395
Accrued interest receivable 992,284 918,078
Deferred income taxes 186,948 161,940
Bank owned life insurance 8,013,389 7,769,290
Other assets 1,042,618 637,570
------------ -------------
$285,959,103 $245,211,276
============ ============
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 35,483,127 $ 35,141,289
Interest-bearing 176,913,764 142,670,944
------------ -------------
Total deposits 212,396,891 177,812,233
Short-term borrowings 23,310,048 16,347,096
Long-term borrowings 15,000,000 15,000,000
Accrued interest payable 653,738 693,868
Income tax payable 48,609 238,226
Other liabilities 559,142 488,599
------------ -------------
251,968,428 210,580,022
Stockholders' equity
Common stock, par value $.01 per
share; authorized 15,000,000 shares;
issued and outstanding 3,859,117 in
2008, and 4,075,849 in 2007 38,591 40,758
Additional paid-in capital 28,802,634 30,465,013
Retained earnings 5,175,823 4,155,232
------------ -------------
34,017,048 34,661,003
Accumulated other comprehensive
income (26,373) (29,749)
33,990,675 34,631,254
------------ -------------
$285,959,103 $245,211,276
============ ============
Old Line Bancshares, Inc. & Subsidiary
Consolidated Statements of Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
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Interest revenue
Loans,
including fees $ 3,642,695 $ 3,359,297 $10,620,360 $ 9,210,576
U.S. Treasury
securities 17,052 27,993 58,237 89,337
U.S. government
agency
securities 40,319 70,848 90,026 230,830
Mortgage backed
securities 96,203 11,731 209,053 38,447
Municipal
securities 23,883 26,954 72,694 80,898
Federal funds
sold 85,110 270,175 257,079 1,025,129
Other 31,262 19,268 125,213 62,196
---------- ----------- ----------- -----------
Total interest
revenue 3,936,524 3,786,266 11,432,662 10,737,413
---------- ----------- ----------- -----------
Interest expense
Deposits 1,256,945 1,485,826 3,773,591 4,249,039
Borrowed funds 202,894 180,826 593,015 420,122
---------- ----------- ----------- -----------
Total interest
expense 1,459,839 1,666,652 4,366,606 4,669,161
---------- ----------- ----------- -----------
Net interest
income 2,476,685 2,119,614 7,066,056 6,068,252
Provision for
loan losses 180,000 120,000 345,000 206,000
---------- ----------- ----------- -----------
Net interest
income after
provision
for loan
losses 2,296,685 1,999,614 6,721,056 5,862,252
---------- ----------- ----------- -----------
Non-interest
revenue
Service charges
on deposit
accounts 78,533 76,579 230,737 220,497
Marine division
broker
origination
fees -- 49,260 -- 262,218
Earnings on
bank owned
life insurance 90,895 91,492 273,609 248,130
Income (loss)
on investment
in real estate
LLC (7,737) (3,512) 5,904 256
Gain (loss) on
disposal of
assets -- (7,372) -- (7,372)
Other fees and
commissions 47,419 71,436 191,958 191,105
---------- ----------- ----------- -----------
Total
non-interest
revenue 209,110 277,883 702,208 914,834
---------- ----------- ----------- -----------
Non-interest
expense
Salaries 822,131 851,056 2,308,762 2,406,093
Employee
benefits 222,607 236,253 723,965 749,518
Occupancy 286,729 241,648 837,438 676,269
Equipment 81,771 66,197 228,437 184,599
Data processing 67,163 51,293 193,042 165,385
Other operating 348,886 338,654 1,014,822 1,027,878
---------- ----------- ----------- -----------
Total
non-interest
expense 1,829,287 1,785,101 5,306,466 5,209,742
---------- ----------- ----------- -----------
Income before
income taxes 676,508 492,396 2,116,798 1,567,344
Income taxes 243,115 163,857 741,748 503,603
---------- ----------- ----------- -----------
Net income $ 433,393 $ 328,539 $ 1,375,050 $ 1,063,741
=========== =========== =========== ===========
Basic earnings
per common share $ 0.11 $ 0.08 $ 0.35 $ 0.25
Diluted earnings
per common share $ 0.11 $ 0.08 $ 0.35 $ 0.25