BOWIE, Md., Oct. 19, 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 $194,867 or 14.17% for the nine months ended September 30, 2009 to $1.6 million from $1.4 million for the nine months ended September 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 nine month period was $1.1 million. Earnings per basic and diluted common share were $0.28 for the nine months ended September 30, 2009 and $0.35 for the same period in 2008. The 14.17% increase in net income for the nine month period was primarily the result of a $1.4 million increase in net interest income. The increase in net interest income derived from a $37.1 million or 17.49% increase in average net loans outstanding during the period as Old Line Bank's net interest margin decreased 10 basis points to 3.77% from 3.87% for the nine months ended September 30, 2008. We also had an approximately $160,000 increase in pre-tax earnings from our majority owned subsidiary Pointer Ridge Office Investments, LLC and an approximately $159,000 gain from sale on investments. These increases were partially offset by a $415,000 increase in the loan loss provision from $345,000 to $760,000 and increased operating expenses associated with the operations of our College Park, Annapolis, and Crofton branches that opened in February and September 2008 and July 2009, respectively. During the nine month period, we incurred a $326,000 increase in FDIC insurance premiums inclusive of a $149,000 special assessment. As we previously reported, 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 $159,000 gain on the sale of investments. We did not sell any available-for-sale securities during the nine months ended September 30, 2008.
For the three month period ended September 30, 2009, net income attributable to Old Line Bancshares, Inc. increased $74,139 or 17.11% to $507,532 compared to $433,393 reported for the three month period ended September 30, 2008. After inclusion of the dividend on the preferred stock, net income available to common stockholders declined $206,710 to $226,683 from $433,393 for the three month period. Earnings per basic and diluted common share were $0.06 for the three month period ended September 30, 2009 compared to $0.11 for the three month period ended September 30, 2008. During the three month period, net interest income increased $509,804 as a result of a $36.9 million increase in average loans outstanding and an 8 basis point increase in the net interest margin to 3.89%. Non-interest revenue increased $159,298 primarily because of the increase in our ownership interest in Pointer Ridge Office Investment, LLC in December 2008. The $30,000 increase in the loan loss provision, the costs associated with the operations of the Annapolis branch that opened in September 2008 and the Crofton branch that opened in July 2009, the salary cost associated with the staff hired in anticipation of the opening of our new Glen Dale branch and the consolidation of Pointer Ridge, LLC, as outlined below, partially offset these increases in interest revenue and non-interest revenue.
Mr. Cornelsen stated: "The current economic climate continues to present a multitude of challenges to us and our customers. With the national and regional unemployment rates at record high levels, diminishing real estate values and devastating financial losses experienced by many of our peer banks, I am very satisfied with our performance. We have continued to maintain profitability and asset quality in an extremely challenging environment while incurring increased FDIC insurance cost, increased operating costs associated with the new branches and a $415,000 increase in the loan loss provision for the nine month period. Our asset quality remains strong with only 4 loans totaling $153,000 past due between 30 and 89 days. We also have three non-accrual loans totaling $1.9 million or 0.54% of total assets, and although we remain cautiously optimistic that we will continue to successfully navigate through this difficult period, we also recognize that we are not immune to losses in our loan portfolio as even our strong borrowers continue to cope with declining revenues, diminishing cash flows and depreciating collateral values in their businesses. Therefore, we believe it is prudent to continue to increase our loan loss provision."
Mr. Cornelsen continued, "We have always believed that the experience of our personnel is our best asset. This experience coupled with our relationships with our customers and our conservative management and credit culture have allowed us to continue to grow loans and improve our earnings performance. We have maintained our disciplines in underwriting standards for new and existing loans and we have worked closely with our customers to ensure their future success."
Mr. Cornelsen also said that he is delighted to report the opening of our 10th branch in Glen Dale, Maryland on October 15, 2009. Lisa Walsh will manage this branch located at 12100 Annapolis Road, Suite 1, Glen Dale, Maryland. We are pleased to have Lisa's many 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. We believe that with these 10 branches, our lending staff, our corporate infrastructure, our solid balance sheet and our 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.
As we reported in the 2nd quarter, 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. In August, we also repurchased at a fair market value of $225,000 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 nine months ended September 30, 2009 as compared to the same period in 2008 was a $160,000 increase in pre-tax earnings. Pointer Ridge contributed a nominal $7,000 loss to us during the three month period ended September 30, 2009.
At September 30, 2009, the allowance for loan losses was $2.3 million or 0.89% of gross loans compared to $1.9 million or 0.85% of gross loans at December 31, 2008. During the period we repossessed one boat that collateralized a loan in the amount of approximately $96,000. We charged $50,000 to the allowance for loan losses for anticipated losses on this repossession. We charged an additional $150,000 to the allowance for loan losses for losses recognized on a non-accrual loan that we have restructured that is currently remitting payments. We anticipate the Borrower on this loan will remit future payments in a timely manner and we expect that we will return this loan to accrual status prior to year end 2009. 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 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, expansion of our customer base, the manner in which our 10 branches, lending staff, corporate structure, solid balance sheet and capital position us for the future, future timely payments on the non-accrual loan and returning this loan to accrual status by year end, improved earnings per share and stockholder value, and stockholder benefits from the repurchase of the preferred stock and warrant 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
September 30, December 31,
2009 2008
----------------------------------------------------------------------
(Unaudited)
Assets
Cash and due from banks $ 10,705,211 $ 8,823,170
Federal funds sold 52,976 2,140,525
------------ ------------
Total cash and cash equivalents 10,758,187 10,963,695
Time deposits in other banks 16,403,920 13,267,000
Investment securities available for sale 29,871,265 29,565,976
Investment securities held to maturity 6,198,980 8,003,391
Loans, less allowance for loan losses 262,350,195 231,053,618
Restricted equity securities at cost 2,957,650 2,126,550
Premises and equipment 15,149,716 12,388,046
Accrued interest receivable 1,114,818 1,091,560
Prepaid income taxes -- 35,649
Bank owned life insurance 8,341,566 8,096,039
Other assets 929,314 1,139,101
------------ ------------
Total assets $354,075,611 $317,730,625
============ ============
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 40,886,676 $ 39,880,119
Interest-bearing 237,521,579 191,550,521
------------ ------------
Total deposits 278,408,255 231,430,640
Short-term borrowings 15,653,411 17,773,934
Long-term borrowings 21,474,069 21,531,133
Accrued interest payable 675,643 625,446
Income tax payable 413 --
Deferred income taxes 100,105 65,651
Other liabilities 1,347,704 4,012,968
------------ ------------
Total liabilities 317,659,600 275,439,772
------------ ------------
Stockholders' equity
Preferred stock, par value $0.01 per
share and additional paid in capital;
7,000 shares issued and outstanding -- 6,703,591
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 29,021,473 28,838,810
Warrants to purchase 141,892 shares
of common stock -- 301,434
Retained earnings 6,148,084 5,411,772
Accumulated other comprehensive income 507,889 392,611
------------ ------------
Total Old Line Bancshares, Inc.
stockholders' equity 35,716,070 41,686,842
Noncontrolling interest 699,941 604,011
------------ ------------
Total stockholders' equity 36,416,011 42,290,853
------------ ------------
Total liabilities and stockholders'
equity $354,075,611 $317,730,625
============ ============
Old Line Bancshares, Inc. & Subsidiaries
Consolidated Statements of Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
----------------------------------------------------------------------
Interest revenue
Loans, including
fees $ 3,952,742 $ 3,642,695 $11,343,471 $10,620,360
U.S. Treasury
securities -- 17,052 7,230 58,237
U.S. government
agency
securities 75,672 40,319 262,862 90,026
Mortgage backed
securities 276,302 96,203 800,666 209,053
Municipal
securities 20,809 23,883 64,808 72,694
Federal funds
sold 233 85,110 973 257,079
Other 66,360 31,262 241,390 125,213
----------- ------------ ----------- ------------
Total interest
revenue 4,392,118 3,936,524 12,721,400 11,432,662
----------- ------------ ----------- ------------
Interest expense
Deposits 1,153,366 1,256,945 3,499,621 3,773,591
Borrowed funds 252,263 202,894 772,037 593,015
----------- ------------ ----------- ------------
Total interest
expense 1,405,629 1,459,839 4,271,658 4,366,606
Net interest
income 2,986,489 2,476,685 8,449,742 7,066,056
Provision for loan
losses 210,000 180,000 760,000 345,000
----------- ------------ ----------- ------------
Net interest
income after
provision for
loan losses 2,776,489 2,296,685 7,689,742 6,721,056
----------- ------------ ----------- ------------
Non-interest
revenue
Service charges
on deposit
accounts 66,615 78,533 225,495 230,737
Gains on sales of
investment
securities 634 -- 158,551 --
Earnings on bank
owned life
insurance 95,322 90,895 282,937 273,609
Income (loss) on
investment in
real estate LLC -- (7,737) -- 5,904
Gain(loss) on
disposal of
assets (4,803) -- (4,803) --
Other fees and
commissions 210,640 47,419 844,828 191,958
----------- ----------- ----------- ------------
Total non-
interest
revenue 368,408 209,110 1,507,008 702,208
----------- ----------- ----------- ------------
Non-interest
expense
Salaries 1,075,572 822,131 2,851,559 2,308,762
Employee benefits 242,778 222,607 760,624 723,965
Occupancy 306,871 286,729 773,177 837,438
Equipment 96,004 81,771 258,398 228,437
Data processing 90,821 67,163 247,812 193,042
Other operating 572,065 348,886 1,826,919 1,014,822
----------- ----------- ----------- ------------
Total non-
interest
expense 2,384,111 1,829,287 6,718,489 5,306,466
----------- ----------- ----------- ------------
Income before
income taxes 760,786 676,508 2,478,261 2,116,798
Income taxes 257,512 243,115 812,414 741,748
----------- ----------- ----------- ------------
Net Income 503,274 433,393 1,665,847 1,375,050
Less: Net
Income
attributable
to the non-
controlling
interest (4,258) -- 95,930 --
----------- ----------- ----------- ------------
Net Income
attributable to
Old Line
Bancshares, Inc. 507,532 433,393 1,569,917 1,375,050
Preferred stock
dividends and
discount accretion 280,849 -- 485,993 --
----------- ----------- ----------- ------------
Net income
available to
common
stockholders $ 226,683 $ 433,393 $ 1,083,924 $ 1,375,050
=========== =========== =========== ============
Basic earnings per
common share $ 0.06 $ 0.11 $ 0.28 $ 0.35
Diluted earnings
per common share $ 0.06 $ 0.11 $ 0.28 $ 0.35
Dividend per
common share $ 0.03 $ 0.03 $ 0.03 $ 0.03