BOWIE, Md., July 27, 2009 (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 attributable to Old Line Bancshares, Inc. increased $120,728 or 12.82% for the six months ended June 30, 2009 to $1,062,385 from $941,657 for the six months ended June 30, 2008. After inclusion of the dividends and accretion on the preferred stock issued under the U.S. Treasury Department's Capital Purchase Program in December 2008, net income available to common stockholders for the six month period was $857,241. Earnings per basic and diluted common share were $0.22 for the six months ended June 30, 2009 and $0.24 for the same period in 2008. The 12.82% increase in net income for the six month period was primarily the result of an $873,882 increase in net interest income. This increase derived from a $37.2 million or 17.94% increase in average net loans outstanding during the period as Old Line Bank's net interest margin declined 20 basis points to 3.70% from 3.90% for the six months ended June 30, 2008. We also had an approximately $167,000 increase in pre-tax earnings from our majority owned subsidiary Pointer Ridge Office Investments, LLC and an approximately $158,000 gain from sale on investments. These increases were partially offset by a $385,000 increase in the loan loss provision from $165,000 to $550,000 and increased operating expenses associated with the operations of our College Park and Annapolis branches that opened in February and September 2008, respectively. During the six month period, we incurred a $255,130 increase in FDIC insurance premiums inclusive of a $149,748 special assessment. The increase in earnings from Pointer Ridge derived from a non-recurring lease termination fee recorded in the 1st quarter of 2009. In an effort to minimize call and pre-payment risk and manage future interest rate risk, we elected to sell available-for-sale securities during the period, resulting in the $158,000 gain on the sale of investments. We did not sell any available-for-sale securities during the six months ended June 30, 2008.
For the three month period ended June 30, 2009, net income attributable to Old Line Bancshares, Inc. increased $53,234 or 10.71% to $550,058 compared to $496,824 reported for the three month period ended June 30, 2008. After inclusion of the dividend on the preferred stock, net income available to common stockholders declined $49,338 to $447,486 from $496,824 for the three month period. Earnings per basic and diluted common share were $0.12 for the three month period ended June 30, 2009 compared to $0.13 for the three month period ended June 30, 2008. During the three month period, net interest income increased $451,162 primarily as a result of a $39.6 million increase in average loans outstanding. Non-interest revenue increased $274,340 primarily as a result of the $158,000 gain on the sale of investment securities. The $149,748 FDIC special assessment, a $123,360 increase in the loan loss provision, the costs associated with the operations of the Annapolis branch that opened in September 2008 and the consolidation of Pointer Ridge, LLC, as outlined below, partially offset these increases in interest revenue and non-interest income.
Mr. Cornelsen stated: "I am pleased to report we have continued to grow loans and deposits, manage operating expenses and sustain respectable earnings in spite of an economic climate that presents a multitude of challenges to us and our customers. We accomplished these goals while incurring increased FDIC insurance cost, increased operating costs associated with the new branches and a $123,000 and $385,000 increase in the loan loss provision for the three month and six month periods, respectively. Although our asset quality remains strong with only one loan in the amount of $195,000 past due 30 days and three non-accrual loans totaling $1.9 million or 0.54% of total assets, the longer the weaknesses in the economy exist the more difficult it becomes for even our strong borrowers to maintain profitability consistent with prior periods. Therefore, we believe it is prudent to continue to increase our loan loss provision."
Mr. Cornelsen also said that he is delighted to report the opening of our 9th branch in Crofton, Maryland on July 1, 2009. This branch located at 1641 State Route 3 North, Crofton, Maryland in Anne Arundel County is managed by Cathy Woods. Cathy has over 20 years of banking experience in the local community and we believe that her and her team's experience and skills will contribute to the further expansion of our customer base. In September, we anticipate we will open our 10th branch in the Fairwood Office Park in Bowie, Maryland. This will substantially complete our current branch expansion plans. We believe that with these 10 branches, our lending staff, our corporate infrastructure and our solid balance sheet and strong capital position, we are positioned to focus our future efforts on improving earnings per share and enhancing stockholder value by capitalizing on the many opportunities available in the market.
In addition, in July, we repurchased from the U.S. Treasury the 7,000 shares of preferred stock that we issued to them in December 2008 under its Capital Purchase Program under the Troubled Asset Relief Program (TARP). We paid Treasury $7,058,333 to repurchase the preferred stock which reflects the liquidation value of the preferred stock and $58,333 of accrued but unpaid dividends. After careful consideration, we determined that we would repay the U.S. Treasury and believe this repayment will be in the best long term interest of our stockholders. We are currently determining if we will also repurchase at fair market value the warrant to purchase 141,892 shares of our common stock that was issued to the U.S. Treasury in conjunction with the issuance of the preferred stock.
As we previously reported, in November 2008, we acquired an additional 12.5% membership interest in Pointer Ridge Office Investments, LLC. This purchase increased our ownership percentage in the entity from 50.0% to 62.5%. As a result, we now consolidate their financial results with ours and make the appropriate minority interest adjustments in stockholders' equity. As stated above, the net impact of this investment during the six months ended June 30, 2009 as compared to the same period in 2008 was a $167,000 increase in pre-tax earnings. Pointer Ridge's contribution to earnings was a nominal $1,500 during the three month period ended June 30, 2009.
At June 30, 2009, the allowance for loan losses was $2.3 million or 0.92% of gross loans compared to $1.9 million or 0.85% of gross loans at December 31, 2008. During the period we placed one loan in the amount of approximately $250,000 in non-accrual and we charged off one loan in the amount of approximately $159,000 to the allowance for loan losses. This is the first time in over ten years that our charge offs exceeded $100,000 in any period. This charge-off was the result of one land developer who was unable to meet all of his financial obligations and advised us that he could no longer make any of his payments and there was no remaining value in the underlying collateral. Based on our history, internal analysis and the satisfactory historical performance of the loan portfolio, we believe the allowance continues to appropriately reflect the inherent risk of loss in our portfolio and the current economic climate.
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, one branch in Crofton, 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 the statements with respect to the adequacy of our loan loss allowance, expansion of our customer base, the anticipated opening of our 10th branch, future plans with respect to branch expansion, the manner in which our 10 branches, lending staff, corporate structure, solid balance sheet and capital position us for the future, improved earnings per share and stockholder value, and stockholder benefits from the repurchase of the preferred stock issued under TARP 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, further deterioration in economic conditions in our target markets or nationally and changes in laws impacting our ability to collect on outstanding loans or otherwise negatively impact our business. 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. & Subsidiaries
Consolidated Balance Sheets
June 30, December 31,
2009 2008
---------------------------------------------------------------------
(Unaudited)
Assets
Cash and due from banks $ 8,413,890 $ 8,823,170
Federal funds sold 881,352 2,140,525
------------ ------------
Total cash and cash equivalents 9,295,242 10,963,695
Time deposits in other banks 20,950,404 13,267,000
Investment securities available for sale 30,649,157 29,565,976
Investment securities held to maturity 6,646,723 8,003,391
Loans, less allowance for loan losses 253,644,988 231,053,618
Restricted equity securities at cost 2,957,650 2,126,550
Premises and equipment 14,520,286 12,388,046
Accrued interest receivable 1,129,584 1,091,560
Prepaid income taxes -- 35,649
Deferred income taxes 44,874 --
Bank owned life insurance 8,259,090 8,096,039
Other assets 522,791 1,139,101
------------ ------------
Total assets $348,620,789 $317,730,625
============ ============
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 40,226,093 $ 39,880,119
Interest-bearing 226,873,066 191,550,521
------------ ------------
Total deposits 267,099,159 231,430,640
Short-term borrowings 15,276,272 17,773,934
Long-term borrowings 21,492,645 21,531,133
Accrued interest payable 639,265 625,446
Income tax payable 77,247 --
Deferred income taxes -- 65,651
Other liabilities 1,020,148 4,012,968
------------ ------------
Total liabilities 305,604,736 275,439,772
------------ ------------
Stockholders' equity
Preferred stock, par value $0.01 per share
and additional paid in capital; 7,000
shares issued and outstanding 6,733,733 6,703,591
Common stock, par value $0.01 per share;
authorized 15,000,000 shares; issued and
outstanding 3,862,364 in 2009 and 2008 38,624 38,624
Additional paid-in capital 28,929,394 28,838,810
Warrants to purchase 141,892 shares of
common stock 301,434 301,434
Retained earnings 6,037,271 5,411,772
Accumulated other comprehensive income 271,398 392,611
------------ ------------
Total Old Line Bancshares, Inc.
stockholders' equity 42,311,854 41,686,842
Noncontrolling interest 704,199 604,011
------------ ------------
Total stockholders' equity 43,016,053 42,290,853
------------ ------------
Total liabilities and stockholders'
equity $348,620,789 $317,730,625
============ ============
Old Line Bancshares, Inc. & Subsidiaries
Consolidated Statements of Income
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2009 2008 2009 2008
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Interest revenue
Loans, including fees $3,788,846 $3,473,981 $7,390,729 $6,977,665
U.S. Treasury
securities 2,374 18,698 7,230 41,185
U.S. government agency
securities 84,269 24,175 187,190 49,707
Mortgage backed
securities 256,443 94,791 524,364 112,850
Municipal securities 21,000 23,894 43,999 48,811
Federal funds sold 305 45,591 740 171,969
Other 74,097 44,566 175,030 93,951
---------- ---------- ---------- ----------
Total interest
revenue 4,227,334 3,725,696 8,329,282 7,496,138
---------- ---------- ---------- ----------
Interest expense
Deposits 1,156,871 1,181,809 2,346,255 2,516,646
Borrowed funds 259,463 184,049 519,774 390,121
---------- ---------- ---------- ----------
Total interest
expense 1,416,334 1,365,858 2,866,029 2,906,767
---------- ---------- ---------- ----------
Net interest income 2,811,000 2,359,838 5,463,253 4,589,371
Provision for loan
losses 250,000 126,600 550,000 165,000
---------- ---------- ---------- ----------
Net interest income
after provision for
loan losses 2,561,000 2,233,238 4,913,253 4,424,371
---------- ---------- ---------- ----------
Non-interest revenue
Service charges on
deposit accounts 60,535 79,252 139,624 152,204
Gain on sale of
investment securities 157,917 -- 157,917 --
Earnings on bank owned
life insurance 94,154 91,111 187,615 182,714
Income (loss) on
investment in real
estate LLC -- 745 -- 13,641
Other fees and
commissions 222,394 89,552 653,444 144,539
---------- ---------- ---------- ----------
Total non-interest
revenue 535,000 260,660 1,138,600 493,098
---------- ---------- ---------- ----------
Non-interest expense
Salaries 938,930 751,700 1,775,987 1,486,631
Employee benefits 215,422 231,905 517,846 501,358
Occupancy 234,125 270,787 466,306 550,709
Equipment 82,516 76,191 162,394 146,666
Data processing 81,654 64,627 156,991 125,879
Other operating 719,601 336,659 1,254,854 665,936
---------- ---------- ---------- ----------
Total non-interest
expense 2,272,248 1,731,869 4,334,378 3,477,179
---------- ---------- ---------- ----------
Income before income
taxes 823,752 762,029 1,717,475 1,440,290
Income taxes 272,787 265,205 554,902 498,633
---------- ---------- ---------- ----------
Net Income 550,965 496,824 1,162,573 941,657
Less: Net Income
attributable to the
noncontrolling
interest 907 -- 100,188 --
---------- ---------- ---------- ----------
Net Income attributable
to Old Line
Bancshares, Inc. 550,058 496,824 1,062,385 941,657
Preferred stock
dividends and
discount accretion 102,572 -- 205,144 --
---------- ---------- ---------- ----------
Net income available to
common stockholders $ 447,486 $ 496,824 $ 857,241 $ 941,657
========== ========== ========== ==========
Basic earnings per
common share $ 0.12 $ 0.13 $ 0.22 $ 0.24
Diluted earnings per
common share $ 0.12 $ 0.13 $ 0.22 $ 0.24