Old Line Bancshares, Inc. Reports a 16.03 Percent Increase in Six Month Net Income Available to Common Stockholders

BOWIE, Md., July 27, 2010 (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 available to common stockholders increased $137,390 or 16.03% to $994,631 for the six months ended June 30, 2010 from $857,241 for the six month period ended June 30, 2009. Earnings per basic and diluted common share were $0.26 for the six months ended June 30, 2010 and $0.22 for the same period in 2009. The 16.03% increase in net income available to common stockholders was primarily the result of a $971,581 increase in net interest income. This increase derived from the $27.1 million or 11.08% growth in average net loans and a 9 basis point increase in the net interest margin from 3.71% for the period ending June 30, 2009 compared to 3.80% for the period ending June 30, 2010. A $310,000 decrease in the provision for loan losses also contributed to the increase in net income available to common stockholders. These improvements were offset by a $574,658 decrease in non-interest revenue and a $970,318 increase in non-interest expense. Non-interest revenue declined during the six month period primarily because of an approximately $393,000 decline in rent and other revenue from our investment in Pointer Ridge Office Investment, LLC and a $157,917 decline in gain on sales of investment securities. During the first six months of 2009, Pointer Ridge produced $521,605 in rental income that is included in other fees and commissions. As we previously reported, approximately $300,000 of that amount derived from a non-recurring lease termination fee. The absence of the lease termination fee in 2010 and the subsequent loss of additional tenants in spaces that Old Line Bank and Pointer Ridge lease to tenants were the major causes of the decline in non-interest revenue. We also did not sell any investments during the six months ended June 30, 2010, which contributed to the decline in non-interest revenue. The two new branches that we opened in 2009 and the addition of the Greenbelt lending team, which joined us in December 2009, were the primary causes of the increase in non-interest expense. These increases were offset by a $112,000 decline in FDIC insurance.

For the three month period ended June 30, 2010, net income available to common stockholders increased 18.46% or $82,611 to $530,097 from $447,486 for the three month period ended June 30, 2009. Earnings per basic and diluted common share were $0.14 for the three month period ended June 30, 2010 compared to $0.12 for the three month period ended June 30, 2009. During the three month period ended June 30, 2010, net interest income increased $482,178 or 17.15% primarily as a result of a $26.2 million increase in average net loans outstanding. Non-interest revenue decreased $263,947 because in the three months ended June 30, 2009, we sold investments and recorded a gain of $157,917. For the same period in 2010, we did not sell any investments. Other fees and commissions declined $101,607 primarily because of the loss of tenants in spaces that we rent. Salaries, employee benefits, equipment, data processing and other operating expenses increased primarily because of increased operating expenses from the branches and the new Greenbelt lending team.

Mr. Cornelsen stated: "I am pleased to report continued profitability for the first six months of 2010. In an economic environment that remains challenging, we have kept our focus on our goal of becoming the premier community bank east of Washington, D.C. While it remains uncertain whether the economy will continue on its path towards recovery, it appears the economy may reach a sustainable recovery during late 2010 or early 2011, and we remain cautiously optimistic that our remaining borrowers will continue to stay current on their loans. The Greenbelt lending team that we hired in December 2009 was a major contributor to our success during the second quarter of 2010. They along with the rest of our team have worked diligently towards our goal. Relative to our peers, our asset quality remains strong. We have five non–accrual loans totaling $4.7 million and one property in other real estate owned in the amount of $223,169. We have accepted a contract from a buyer for purchase of this property. We anticipate that we will receive full repayment of all amounts due during the third or fourth quarter of 2010. On June 30, 2010, total non-performing assets were $4.9 million or 1.20% of total assets and we had no other loans past due 30 days or more."

Mr. Cornelsen continued "we are also very pleased to welcome Andre' Gingles to our board of directors. Andre' brings a wealth of knowledge to the Board, and we expect that his familiarity with Old Line Bank's target market areas will allow us to continue to enhance our franchise value and achieve our strategic objectives."

During the three and six month periods, we decreased our provision for loan losses because although the economy remains uncertain, it appears to have stabilized. We also believe that we have appropriately identified and allocated specific reserves to previously identified borrowers that represent increased risk or potential loss. At June 30, 2010, the allowance for loan losses was $2.7 million or 0.94% of gross loans as compared to $2.5 million or 0.93% of gross loans at December 31, 2009. Based on our history, internal analysis, ratio of non-performing assets, 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 five 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, that our borrowers will continue to perform, that we will receive full repayment of all amounts due on other real estate owned, that we will continue to enhance our franchise value and achieve our strategic objectives, and that we have appropriately identified and allocated specific reserves to previously identified borrowers 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, deterioration in economic conditions or a slower than anticipated recovery in our target markets or nationally, continued increases in the unemployment rate in our target markets, 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.