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Section 1: 8-K (FORM 8-K)

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________

Form 8-K
_____________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): July 23, 2019  

Old Line Bancshares, Inc.
(Exact Name of Registrant as Specified in Charter)

Maryland000-5034520-0154352
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification Number)

 

1525 Pointer Ridge Place, Bowie, Maryland 20716
(Address of Principal Executive Offices) (Zip Code)

301-430-2500
(Registrant's telephone number, including area code)

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 [   ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 [   ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 [   ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 [   ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Title of each classTrading symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareOLBKThe Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [   ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 
 

Section 2 Financial Information

Item 2.02. Results of Operations and Financial Condition.

On July 23, 2019, the registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Section 9 Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

Exhibit 99.1. Press release dated July 23, 2019


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 Old Line Bancshares, Inc.
   
  
Date: July 23, 2019By: /s/ Elise M. Adams        
  Elise M. Adams
  Executive Vice President and Chief Financial Officer
  

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Section 2: EX-99.1 (PRESS RELEASE)

EdgarFiling

EXHIBIT 99.1

Old Line Bancshares, Inc. Reports Net Income of $8.9 Million for the Quarter Ended June 30, 2019

BOWIE, Md., July 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 $6.2 million, or 226.95%, to $8.9 million for the three months ended June 30, 2019, compared to $2.7 million for the three-month period ended June 30, 2018.  Earnings were $0.52 per basic and diluted common share for the three months ended June 30, 2019, compared to $0.17 per basic and diluted common share for the three months ended June 30, 2018.  The increase in net income for the second quarter of 2019 as compared to the same 2018 period is primarily the result of a $6.3 million decrease in non-interest expenses.  Net income for the 2018 period included $7.1 million ($6.2 million net of taxes) of merger-related expenses (or $0.38 per basic and $0.37 per 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.  In addition, net interest income increased $160,000 during the three months ended June 30, 2019, compared to the same period last year.

Net income was $17.4 million for the six months ended June 30, 2019, compared to $8.8 million for the same period last year, an increase of $8.6 million, or 98.11%.  Earnings were $1.02 per basic and diluted common share for the six months ended June 30, 2019, compared to $0.61 per basic and $0.60 per diluted common share for the same period last year.  The increase in net income is primarily the result of increases of $5.8 million in net interest income and $1.0 million in non-interest income and a decrease of $3.1 million in non-interest expenses.  Included in net income for the 2018 period was $7.1 million ($6.2 million net of taxes, or $0.43 per basic and $0.42 per diluted common share) for merger-related expenses associated with the acquisition of BYBK.

Net interest income increased during each of the three and six months ended June 30, 2019 compared to the same periods last year primarily as a result of an increase in interest income on loans, partially offset by an increase in interest expense.  Non-interest income for the six months ended June 30, 2019 increased $1.0 million, or 20.82%, primarily as a result of increases of $563 thousand in income from the point of sale (“POS”) sponsorship program, $408 thousand in income on marketable loans, and $265 thousand in earnings on bank owned life insurance (“BOLI”).  Non-interest expense decreased $6.3 million, or 30.11%, for the three months ended June 30, 2019 and $3.1 million, or 9.63%, for the six-month period ended June 30, 2019 compared to the same periods last year.  Non-interest expense decreased primarily as a result of our having no merger-related expenses during the 2019 periods, whereas we incurred $7.1 million of such expenses in connection with the BYBK merger during the three- and six-month periods ended June 30, 2018.  The impact of the lack of merger-related expenses during 2019 was partially offset by increases in other non-interest expense categories, primarily related to the BYBK acquisition. 

Net loans held for investment at June 30, 2019 increased $11.2 million compared to December 31, 2018 and $72.6 million compared to June 30, 2018.  The increase in loans was a result of net organic growth of $89.7 million and $214.7 million, respectively, partially offset by $78.5 million and $142.1 million, respectively, in paydowns on previously-acquired loans since December 31, 2018 and June 30, 2018. 

Total deposits at June 30, 2019 increased by $88.4 million, or 3.85%, since December 31, 2018 and $176.8 million, or 8.01%, compared to June 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 June 30, 2019, increasing $125.6 million from $2.95 billion at December 31, 2018 and $142.2 million from $2.93 billion at June 30, 2018.  In addition, the Company had net loans and net deposits of approximately $2.4 billion each at June 30, 2019. 

James W. Cornelsen, President and Chief Executive Officer of Old Line Bancshares, stated: “I am pleased to report another quarter of favorable earnings of $8.9 million during the challenging interest rate environment.  Deposits grew by $49.0 million during the second quarter and by $88.4 million this year.  Our mortgage group provided solid results increasing income on marketable loans by approximately $408 thousand in 2019 compared to the same period last year.” 

HIGHLIGHTS:

Results of Operations for the Three Months Ended June 30, 2019 Compared to June 30, 2018

Average interest-earning assets increased $244.1 million for the three-month period ended June 30, 2019 compared to the same period of 2018.  The average yield on such assets was 4.69% for the three months ended June 30, 2019 compared to 4.58% for the comparable 2018 period.  The increase in the average balance of our interest-earning assets was primarily due to organic loan growth and, to a lesser extent, an increase in the average balance of our investment securities available for sale.  The increase in the average yield was primarily the result of higher yields on our investment securities available for sale and on our loans held for investment.  Average interest-bearing liabilities increased $229.5 million for the three-month period ended June 30, 2019 compared to the same period of 2018 primarily due to organic deposit growth since June 30, 2018.  The average rate paid on such liabilities increased to 1.62% for the three-month period ended June 30, 2019 compared to 1.08% for the same period in 2018 due primarily to higher rates paid on our money market accounts, certificates of deposit, and borrowings.

The net interest margin for the three months ended June 30, 2019 decreased to 3.49% from 3.80% for the three months ended June 30, 2018.  The net interest margin decreased due to increased interest rates on both deposits and on our borrowed funds, partially offset by an increase in the yield on our interest-earning assets.  The net interest margin during the second 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 June 30, 2019 compared to the same period of 2018.  The fair value accretion/amortization is recorded on paydowns recognized during the quarter, which contributed 14 basis points for the three months ended June 30, 2019 compared to 18 basis points for the three months ended June 30, 2018.  

Net interest income increased $160 thousand, or 0.69%, for the three months ended June 30, 2019 compared to the same period of 2018, as a result of a $3.5 million increase in interest income, primarily due to a $2.7 million increase in loan interest income resulting from increases in both the average balance of and yields on loans, offset almost entirely by a $3.4 million 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 expense decreased $6.3 million, or 30.11%, for the three-month period ended June 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 $7.1 million in merger and integration expenses during the three months ended June 30, 2018, partially offset by increases in salaries and employee benefits, occupancy and equipment, and core deposit amortization.  Salaries and employee benefits increased $399 thousand and occupancy and equipment expenses increased $153 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 full quarter ended June 30, 2019 compared to approximately two and half months of such expenses during the quarter ended June 30, 2018.  Core deposit amortization increased $109 thousand as a result of the higher amortization of premiums resulting from the deposits we acquired in the BYBK acquisition.  

Results of Operations for the Six Months Ended June 30, 2019 Compared to June 30, 2018

Average interest-earning assets increased $485.8 million for the six months ended June 30, 2019 compared to the same period of 2018.  The average yield on such assets was 4.72% for the six months ended June 30, 2019 compared to 4.55% for the comparable 2018 period.  The increase in the average balance of our interest-earning assets was primarily 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, to a lesser extent, an increase in the average balance of our investment securities available for sale.  The increase in the average yield was primarily the result of higher yields on our investment securities available for sale and on our loans held for investment.  Average interest-bearing liabilities increased $400.1 million for the six-month period ended June 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 1.58% for the six-month period ended June 30, 2019 compared to 1.06% for the same period in 2018 due primarily to higher rates paid on our money market accounts, certificates of deposit, and borrowings.

The net interest margin for the six months ended June 30, 2019 decreased to 3.54% from 3.78% for the six months ended June 30, 2018.  The net interest margin decreased due to increased interest rates on both deposits and on our borrowed funds, partially offset by an increase in the yield on our interest-earning assets.  The net interest margin during the six-month ended June 30, 2019 was positively affected by the amount of accretion on acquired loans.  Accretion increased due to a higher amount of early payoffs on acquired loans with fair value marks during the six months ended June 30, 2019 compared to the same period of 2018.  The fair value accretion/amortization is recorded on paydowns recognized, which contributed 14 basis points for the six months ended June 30, 2019 compared to 13 basis points for the six months ended June 30, 2018.  

Net interest income increased $5.8 million, or 14.12%, for the six months ended June 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 yields 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 $1.0 million, or 20.82%, for the six-month period ended June 30, 2019 compared to the same period of 2018, primarily as a result of increases of $563 thousand in income from the POS sponsorship program, which was not in place during the first quarter of 2018, $408 thousand in income on marketable loans as a result of a $21 million increase  in the volume of loans originated for sale compared to the six months ended June 30, 2018, which resulted in an increase in the aggregate amount of premiums we received on such sales, and $265 thousand in earnings on BOLI resulting from the $16.3 million of BOLI acquired in the BYBK acquisition.  

Non-interest expense decreased $3.1 million, or 9.63%, for the six-month period ended June 30, 2019 compared to the same period of 2018, primarily as a result of our having no merger and integration expenses during the six months ended June 30, 2019 compared to $7.1 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 $2.0 million and occupancy and equipment expenses increased $626 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 six-month period of 2019 compared to just approximately two and half months of such expenses for the comparable 2018 period.  Core deposit amortization increased $455 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 only for less than half of the 2018 period.  Other operating expenses increased $929 thousand due to increases in general operating costs, such as FDIC insurance, 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.

Information about Proposed Merger and Where to Find It

On July 23, 2019, the Company and Old Line Bank entered into an Agreement and Plan of Merger with Wesbanco, Inc. (“WesBanco”) and Wesbanco Bank, Inc. (“WesBanco Bank”), pursuant to which the Company will be merged with and into WesBanco, with WesBanco being the surviving company (the “Merger”), and Old Line Bank will be merged with and into WesBanco Bank, with WesBanco Bank the surviving bank.  In connection with the proposed Merger, WesBanco will file with the Securities and Exchange Commission (“SEC”) a Registration Statement on Form S-4 that will include a proxy statement of the Company and WesBanco and a prospectus of WesBanco, as well as other relevant documents concerning the proposed Merger.  This earnings release is not a substitute for the prospectus/proxy statement or any other document that the Company or WesBanco may file with the SEC.  COMPANY STOCKHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED MERGER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.  Materials filed by the Company or WesBanco with the SEC may be obtained for free at the SEC’s website at http://www.sec.gov, on the NASDAQ website at http://www.nasdaq.com, and from either WesBanco’s or Old Line Bancshares’ website at http://www.wesbanco.com or http://www.oldlinebank.com, respectively.

Participants in the Solicitation

This earnings release does not constitute a solicitation of a proxy from any stockholder with respect to the proposed Merger.  The Company and WesBanco and their respective executive officers and directors may, however, be deemed to be participants in the solicitation of proxies from Company stockholders in connection with the proposed Merger.  Information about the directors and executive officers of WesBanco is set forth in the proxy statement for WesBanco’s 2019 annual meeting of shareholders, as filed with the SEC on March 13, 2019 and as supplemented on April 5, 2019.  Information about the Company’s directors and executive officers is set forth in the proxy statement for the Company’s 2019 annual meeting of stockholders, as filed with the SEC on April 26, 2019.  Information about any other persons who may, under the rules of the SEC, be considered participants in the solicitation of Company stockholders in connection with the proposed Merger will be included in the proxy statement/prospectus.  You can obtain free copies of these documents from the SEC, the Company, or WesBanco using the website information above.

 Old Line Bancshares, Inc. & Subsidiaries 
 Consolidated Balance Sheets 
      
 June 30,
2019
 March 31,
2019
 December 31,
2018 (1)
 September 30,
2018
 June 30,
2018
 (Unaudited) (Unaudited)     (Unaudited) (Unaudited)
Cash and due from banks$56,392,900 $49,619,806  $41,495,763  $45,774,719 $61,684,888 
Interest bearing accounts 1,832,209  2,107,845   2,051,273   3,522,685  3,845,419 
Federal funds sold 781,033  961,329   953,582   1,008,801  928,337 
Total cash and cash equivalents 59,006,142  52,688,980   44,500,618   50,306,205  66,458,644 
Investment securities available for sale 295,969,550  307,034,351   219,705,762   216,358,059  209,941,534 
Loans held for sale 15,443,340  9,632,523   11,564,993   8,829,777  34,037,532 
Loans held for investment, less allowance for loan losses of $7,889,735       
and $7,471,023 for June 30, 2019 and December 31, 2018 2,420,437,144  2,417,186,160   2,409,227,698   2,384,579,814  2,347,821,496 
Equity securities at cost 11,524,301  13,863,550   11,150,750   13,063,250  14,854,746 
Premises and equipment 42,326,703  42,561,705   42,624,787   43,060,727  43,719,013 
Accrued interest receivable 9,131,984  8,607,100   7,958,511   8,072,826  7,715,123 
Bank owned life insurance 68,750,106  68,333,419   67,920,021   67,490,846  67,062,920 
Annuity plan 6,293,571  6,269,638   6,268,426   6,298,627  6,276,320 
Other real estate owned 882,510  882,510   882,510   1,469,166  2,357,947 
Goodwill 94,668,455  94,668,455   94,668,455   94,403,635  94,403,635 
Core deposit intangible 14,054,647  14,704,408   15,362,232   16,024,950  16,688,635 
Other assets 37,124,392  40,813,248   18,172,332   21,060,315  22,038,116 
Total assets$3,075,612,845 $3,077,246,047  $2,950,007,095  $2,931,018,197 $2,933,375,661 
                  
Deposits                 
Non-interest bearing$620,754,339 $579,962,005  $559,059,672  $581,339,177 $603,257,708 
Interest bearing 1,763,727,019  1,755,472,767   1,736,989,227   1,660,902,293  1,604,420,214 
Total deposits 2,384,481,358  2,335,434,772   2,296,048,899   2,242,241,470  2,207,677,922 
Short term borrowings 221,654,780  282,141,546   228,184,856   272,534,890  314,676,164 
Long term borrowings 38,503,032  38,437,015   38,371,291   38,304,981  38,238,670 
Accrued interest payable 3,040,219  2,460,829   2,844,715   1,643,666  1,827,605 
Supplemental executive retirement plan 6,180,673  6,089,246   5,997,819   6,123,518  6,057,063 
Other liabilities 32,441,274  32,559,241   7,788,981   9,989,481  10,553,800 
Total liabilities 2,686,301,336  2,697,122,649   2,579,236,561   2,570,838,006  2,579,031,224 
                  
Stockholders' equity                 
Common stock 169,991  170,516   170,311   169,889  169,889 
Additional paid-in capital 292,653,644  293,590,357   293,501,107   293,139,653  292,836,679 
Retained earnings 95,956,286  89,084,561   82,628,356   74,167,389  67,601,752 
Accumulated other comprehensive income (loss) 531,588  (2,722,036)  (5,529,240)  (7,296,740) (6,263,883)
Total stockholders' equity 389,311,509  380,123,398   370,770,534   360,180,191  354,344,437 
Total liabilities and stockholders' equity$3,075,612,845 $3,077,246,047  $2,950,007,095  $2,931,018,197 $2,933,375,661 
Shares of basic common stock outstanding 16,999,146  17,051,569   17,031,052   16,988,883  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
June 30,
 Three Months
Ended
March 31,
 Three Months
Ended
December 31,
 Three Months
Ended
September 30,
 Three Months
Ended
June 30,
 Six Months
Ended
June 30,
 Six Months
Ended
June 30,
 2019 2019 2018 (1) 2018 2018 2019 2018
 (Unaudited) (Unaudited)     (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest income                           
Loans, including fees$29,125,229  $28,850,931  $29,284,012  $29,056,814  $26,448,727  $57,976,160  $46,149,490 
Investment securities and other 2,577,723   2,059,312   1,743,737   1,696,510   1,719,991   4,637,035   3,343,566 
Total interest income 31,702,952   30,910,243   31,027,749   30,753,324   28,168,718   62,613,195   49,493,056 
Interest expense                           
Deposits 6,103,812   5,616,515   5,067,752   4,098,787   3,146,235   11,720,327   5,452,968 
Borrowed funds 2,130,630   1,982,713   1,891,413   1,768,532   1,714,250   4,113,343   3,049,081 
Total interest expense 8,234,442   7,599,228   6,959,165   5,867,319   4,860,485   15,833,670   8,502,049 
Net interest income 23,468,510   23,311,015   24,068,584   24,886,005   23,308,233   46,779,525   40,991,007 
Provision for loan losses 72,583   414,175   613,672   307,870   532,257   486,758   927,153 
Net interest income after provision for loan losses 23,395,927   22,896,840   23,454,912   24,578,135   22,775,976   46,292,767   40,063,854 
Non-interest income                           
Service charges on deposit accounts 712,623   627,260   745,646   728,550   722,879   1,339,883   1,299,463 
POS sponsorship program 636,756   600,061   641,063   711,577   673,502   1,236,817   673,502 
Gain on sales or calls of investment securities 15,927   -   -   -   -   15,927   - 
Earnings on bank owned life insurance 524,753   494,180   531,604   520,785   461,056   1,018,933   753,992 
Gains (losses) on disposal of assets 32,599   -   -   (1,100)  -   32,599   14,366 
Loss on write down of stock -   -   -   (91,498)  (60,998)  -   (60,998)
Gain on sale of loans -   -   556,358   -   -   -   - 
Income on marketable loans 841,843   496,843   479,824   411,850   511,879   1,338,686   930,351 
Other fees and commissions 493,271   544,435   1,238,049   525,171   879,733   1,037,706   1,372,396 
Total non-interest income 3,257,772   2,762,779   4,192,544   2,805,335   3,188,051   6,020,551   4,983,072 
Non-interest expense                           
Salaries & employee benefits 7,600,771   7,133,583   6,743,042   7,491,736   7,201,335   14,734,354   12,686,785 
Occupancy & equipment 2,396,021   2,452,773   2,339,115   2,349,691   2,242,640   4,848,794   4,223,041 
Data processing 760,727   727,183   699,769   659,926   702,182   1,487,910   1,311,821 
Merger and integration -   -   -   2,282,705   7,121,802   -   7,121,802 
Core deposit amortization 649,761   657,824   662,718   663,685   540,737   1,307,585   853,050 
(Gains) losses on sales of other real estate owned -   -   (27,801)  26,266   41,956   -   54,472 
OREO expense 41,833   25,666   77,142   (99,957)  27,995   67,499   212,989 
Other operating 3,282,605   3,251,684   3,465,550   3,288,286   3,198,759   6,534,289   5,605,405 
Total non-interest expense 14,731,718   14,248,713   13,959,535   16,662,338   21,077,406   28,980,431   32,069,365 
                            
Income before income taxes 11,921,981   11,410,906   13,687,921   10,721,132   4,886,621   23,332,887   12,977,561 
Income tax expense 3,009,901   2,906,732   3,526,073   2,456,303   2,160,788   5,916,633   4,186,546 
Net income $8,912,080  $8,504,174  $10,161,848  $8,264,829  $2,725,833  $17,416,254  $8,791,015 
Earnings per basic share$0.52  $0.50  $0.60  $0.49  $0.17  $1.02  $0.61 
Earnings per diluted share$0.52  $0.50  $0.59  $0.48  $0.17  $1.02  $0.60 
Adjusted earnings per basic share (non-GAAP)$-  $-  $-  $0.58  $0.55  $-  $1.04 
Adjusted earnings per diluted share (non-GAAP)$-  $-  $-  $0.57  $0.54  $-  $1.02 
Dividend per common share$0.12  $0.12  $0.10  $0.10  $0.10  $0.24  $0.18 
Average number of basic shares 17,025,728   17,039,961   17,008,504   16,988,883   16,249,625   17,032,649   14,407,182 
Average number of dilutive shares 17,148,958   17,170,507   17,181,820   17,187,837   16,464,580   17,149,715   14,620,030 
Return on Average Assets 1.17%  1.16%  1.37%  1.12%  0.39%  1.16%  0.72%
Return on Average Equity 9.20%  8.99%  10.70%  8.89%  3.14%  9.09%  6.27%
Operating Efficiency (2) 55.12%  54.65%  49.39%  60.17%  79.55%  54.89%  69.76%
                            
(1) Financial information as of 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
(Unaudited)
                                    
  6/30/2019
     3/31/2019
     12/31/2018
     9/30/2018
     6/30/2018
    
  Average
Balance
  Yield/
Rate

 Average
Balance
  Yield/
Rate

 Average
Balance
  Yield/
Rate

 Average
Balance
  Yield/
Rate

 Average
Balance
  Yield/
Rate

Assets:                                   
Int. Bearing Deposits  $2,884,435  1.48% $2,791,150  2.37% $4,130,258  2.96% $4,765,138  1.52% $8,795,004  1.53%
Investment Securities (2)  320,939,698  3.46%  262,912,937  3.43%  236,018,603  3.18%  233,633,128  3.09%  235,854,989  3.19%
Loans  2,428,047,580  4.85%  2,418,266,901  4.87%  2,414,758,155  4.84%  2,397,054,094  4.84%  2,261,479,332  4.72%
Allowance for Loan Losses  (7,956,074)     (7,593,472)     (7,122,881)     (6,885,911)     (6,363,239)   
Total Loans                                   
Net of allowance  2,420,091,506  4.86%  2,410,673,429  4.89%  2,407,635,274  4.86%  2,390,168,183  4.85%  2,255,116,093  4.74%
Total interest-earning assets  2,743,915,639  4.69%  2,676,377,516  4.74%  2,647,784,135  4.70%  2,628,566,449  4.69%  2,499,766,086  4.58%
Noninterest bearing cash  49,567,273      46,270,628      43,728,188      48,035,416      47,014,071    
Goodwill and Intangibles  109,119,799      109,791,837      110,188,394      110,861,142      100,901,255    
Premises and Equipment  68,532,182      44,403,507      42,902,372      43,626,501      43,592,991    
Other Assets  95,371,009      99,169,559      101,812,816      103,995,121      98,152,802    
Total Assets  $3,066,505,902     $2,976,013,047     $2,946,415,905     $2,935,084,629     $2,789,427,205    
                                    
Liabilities and Stockholders' Equity                                  
                                    
Interest-bearing Deposits $1,750,122,135  1.40% $1,741,184,120  1.31% $1,726,574,227  1.16% $1,658,060,302  0.98% $1,522,249,880  0.83%
Borrowed Funds  290,305,725  2.94%  268,178,852  3.00%  255,083,457  2.94%  283,169,572  2.48%  288,666,185  2.38%
Total interest-bearing                                    
liabilities  2,040,427,860  1.62%  2,009,362,972  1.53%  1,981,657,684  1.39%  1,941,229,874  1.20%  1,810,916,065  1.08%
Noninterest bearing deposits  597,706,343      565,081,492      572,704,465      601,558,786      615,780,315    
   2,638,134,203      2,574,444,464      2,554,362,149      2,542,788,660      2,426,696,380    
                                    
Other Liabilities  39,663,626      17,825,648      15,264,196      23,355,099      13,536,574    
Stockholder's Equity  388,708,073      383,742,935      376,789,560      368,940,870      349,194,251    
Total Liabilities and                                    
Stockholder's Equity $3,066,505,902     $2,976,013,047     $2,946,415,905     $2,935,084,629     $2,789,427,205    
                                    
Net interest spread     3.08%     3.21%     3.31%     3.49%     3.50%
Net interest income and                                    
Net interest margin(1) $23,876,743  3.49% $23,679,819  3.59% $24,412,499  3.66% $25,227,247  3.81% $23,659,245  3.80%
                                    

(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 June 30, 2019 and 2018.    Fair value accretion for the current quarter and prior four quarters are as follows: 

 6/30/2019 3/31/2019 12/31/2018 9/30/2018 6/30/2018 
 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$166,941 0.02%$44,430 0.01%$140,822 0.02%$113,378 0.02%$209,819 0.03%
Mortgage loans 609,568 0.09  678,636 0.10  504,905 0.08  620,664 0.09  752,461 0.12 
Consumer loans 111,600 0.02  197,086 0.03  104,350 0.02  110,220 0.02  126,575 0.02 
Interest bearing deposits 56,762 0.01  54,947 0.01  61,038 0.01  70,157 0.01  70,178 0.01 
Total Fair Value Accretion$944,871 0.14%$975,099 0.15%$811,115 0.13%$914,419 0.14%$1,159,033 0.18%
                     

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

 6/30/2019 3/31/2019 12/31/2018   9/30/2018   6/30/2018   
 Net Interest
Income
 Yield Net Interest
Income
 Yield Net Interest
Income
 Yield Net Interest
Income
 Yield Net Interest
Income
 Yield 
GAAP net interest income$23,468,510 3.43%$23,311,015 3.53%$24,068,584 3.61%$24,886,005 3.76%$23,308,233 3.74%
Tax equivalent adjustment                    
Federal funds sold 124 0.00  103 0.00  124 0.00  92 0.00  80 0.00 
Investment securities 195,024 0.03  169,305 0.03  157,634 0.02  159,520 0.02  161,340 0.03 
Loans 213,085 0.03  199,396 0.03  186,157 0.03  181,630 0.03  189,592 0.03 
Total tax equivalent adjustment 408,233 0.06  368,804 0.06  343,915 0.05  341,242 0.05  351,012 0.06 
Tax equivalent interest yield$23,876,743 3.49%$23,679,819 3.59%$24,412,499 3.66%$25,227,247 3.81%$23,659,245 3.80%
                     


Old Line Bancshares, Inc. & Subsidiaries
Selected Loan Information 
(Unaudited)
(Dollars in thousands)
 June 30,
2019
March 31,
2019
December 31,
2018
September 30,
2018
June 30,
2018
      
Legacy Loans(1)     
Period End Loan Balance$1,757,773 $1,704,913 $1,668,118 $1,609,695 $1,543,113 
Deferred Costs 3,554  3,457  3,087  2,805  2,364 
Accruing 1,749,705  1,703,328  1,667,179  1,608,808  1,542,371 
Non-accrual 1,581  1,585  939  887  742 
Accruing 30-89 days past due 3,703  6,454  7,988  6,352  4,565 
Accruing 90 or more days past due 2,782  1,125  -  1,785  178 
Allowance for loan losses 7,417  7,342  7,005  6,699  6,444 
Other real estate owned -  -  -  -  - 
Net charge offs (recoveries) (4) (5) 27  (1) (3)
      
Acquired Loans(2)     
Period End Loan Balance$667,000 $716,624 $745,494 $779,060 $809,049 
Accruing 656,854  712,932  741,777  775,438  807,241 
Non-accrual(3) 3,421  3,692  3,718  3,622  1,808 
Accruing 30-89 days past due 6,716  5,917  11,796  8,120  13,770 
Accruing 90 or more days past due 9  151  243  733  361 
Allowance for loan losses 473  466  466  281  260 
Other real estate owned 883  883  883  1,469  2,358 
Net charge offs (recoveries) (5) 82  96  33  88 
      
Allowance for loan losses as % of held for investment loans 0.32% 0.32% 0.31% 0.29% 0.29%
Allowance for loan losses as % of legacy held for investment loans 0.45% 0.46% 0.45% 0.42% 0.43%
Allowance for loan losses as % of acquired held for investment loans 0.07% 0.06% 0.06% 0.04% 0.03%
Total non-performing loans as a % of held for investment loans 0.32% 0.27% 0.20% 0.30% 0.13%
Total non-performing assets as a % of total assets 0.28% 0.24% 0.20% 0.29% 0.19%
                

(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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