BOWIE, Md., Oct. 30, 2007 (PRIME 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 was $328,539 or $0.08 per basic and diluted common share for the three month period ending September 30, 2007, compared to $416,624 or $0.10 per basic and diluted common share for the same period in 2006. Net income for the nine month period ended September 30, 2007 was $1,063,741 or $0.25 per basic and diluted common share. This represented a decrease of $143,078 or 11.86% compared to net income of $1,206,819 or $0.28 per basic and diluted common share for the nine months ended September 30, 2006.
Total assets increased $21.1 million or 9.67% to $239.2 million on September 30, 2007 compared to the December 31, 2006 level of $218.1 million. Additionally, for the nine month period ended September 30, 2007, total loans grew 25.07% or $37.7 million to $188.1 million and total deposits at the third quarter end were $179.7 million which represented a $10.0 million or 5.89% increase. Customer deposits in overnight Master Notes, which are included in short term borrowings, also increased 158% or $11.4 million to $18.6 million at September 30, 2007 from $7.2 million at December 31, 2006.
Mr. Cornelsen stated: "Despite the challenging interest rate and economic environment, I am pleased to report sound financial performance for the first nine months and the third quarter of 2007. During 2007, we experienced considerable loan growth and continued to maintain the quality in our loan portfolio. We ended the quarter with one non-performing loan in the amount of $126,000 and no other loans past due more than 90 days. We anticipate we will receive full payment of this loan in the 4th quarter of 2007 or early in 2008. As a result of the growth in the loan portfolio, we increased the loan loss provision $94,000 during the three month period to $120,000 compared to $26,000 for the three month period ended September 30, 2006. We also incurred a full quarter of the expenses associated with the operations of our new Greenbelt branch that we opened in June 2007. At period end, deposits in this branch totaled $10.7 million.
"High gasoline prices and an anemic economy negatively impacted the performance of the marine division and this division posted a $56,000 pre-tax loss during the quarter as compared to a $16,337 pre-tax loss during the same period in 2006. For the nine month period ended September 30, 2007, the marine division posted a $122,000 pre-tax loss compared to a $30,000 pre-tax loss for the nine month period ended September 30, 2006. Because of the losses in this division and because we do not foresee an imminent improvement in the marine industry, in September 2007, we closed this division and released the employees associated with it. There will be minimal severance costs associated with closing this division because most of the employees were paid on commission."
As expected, the opening of the Greenbelt and Bowie branches in June 2007 and July 2006, respectively and the establishment of our new headquarters in July 2006 caused a $410,218 or 91.03% increase in occupancy and equipment costs during the nine month period and a $52,532 or 20.58% increase during the three month period. As a result of the staffing requirements for the new Greenbelt and Bowie branches, the new loan officers hired in the 3rd quarter of 2006 and the 2nd quarter of 2007, and additions to corporate staff in 2007, salaries and benefit expenses increased $618,782 or 24.39% during the nine month period and $171,064 or 18.67% during the three month period. We anticipate that we will begin to realize the benefits from these investments in infrastructure during the fourth quarter of 2007. We plan to continue to identify and establish new branch locations that will support our long term growth plans. In 2008, we plan to open our 7th and 8th branches in College Park, Maryland and in Fairwood Office Park in Bowie, Maryland.
At September 30, 2007, the allowance for loan losses was $1.5 million or 0.78% of gross loans compared to $1.3 million or 0.85% of gross loans at December 31, 2006. For the prior seven years, we had no non-performing loans and 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, 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. Although the net interest margin stabilized and remained at the 3.95% reported June 30, 2007, we experienced compression in the net interest margin from 4.39% for the nine months ended September 30, 2006 to 3.95% for the nine months ended September 30, 2007. This was primarily a result of the change in the mix of deposits as average interest earning deposits represented a higher percentage of total deposits than they had in prior periods. In spite of this compression in the margin, primarily because of a $45.5 million or 37.89% growth in average gross loans outstanding to $165.6 million for the nine months ended September 30, 2007 from $120.1 million for the nine months ended September 30, 2006, we were able to increase net interest income $736,702 or 13.82% during the first nine months of 2007 compared to the first nine months of 2006 and $231,315 or 12.25% for the third quarter of 2007 compared to the same quarter of 2006.
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 and three 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, 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 payment of non-performing loans, costs associated with the closure of our marine division, future branches, and expenses and expected benefits from our investments in new personnel and facilities, 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: receipt of required regulatory approvals and 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,
2007 2006
---------------------------------------------------------------------
(Unaudited)
Assets
Cash and due from banks $ 3,293,249 $ 5,120,068
Federal funds sold 17,236,791 34,508,127
------------- -------------
Total cash and cash
equivalents 20,530,040 39,628,195
Investment securities
available for sale 12,416,484 14,118,649
Investment securities held
to maturity 2,301,792 2,802,389
Loans, less allowance
for loan losses 188,060,945 150,417,217
Restricted equity securities
at cost 1,585,250 1,575,550
Investment in real estate LLC 783,648 793,714
Bank premises and equipment 4,242,934 4,049,393
Accrued interest receivable 950,180 820,628
Deferred income taxes 211,673 226,873
Bank owned life insurance 7,685,110 3,458,065
Other assets 473,180 239,989
------------- -------------
$ 239,241,236 $ 218,130,662
============= =============
Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 31,017,479 $ 37,963,066
Interest-bearing 148,691,269 131,708,780
------------- -------------
Total deposits 179,708,748 169,671,846
Short-term borrowings 22,576,637 9,193,391
Long-term borrowings -- 3,000,000
Accrued interest payable 770,814 629,557
Income tax payable 49,085 334,496
Other liabilities 393,826 485,418
------------- -------------
203,499,110 183,314,708
------------- -------------
Stockholders' equity
Common stock, par value
$.01 per share; authorized
15,000,000 shares;
issued and outstanding
4,254,598.5 in 2007, and
4,253,698.5 in 2006 42,546 42,537
Additional paid-in capital 32,023,889 31,868,025
Retained earnings 3,758,139 3,077,313
------------- -------------
35,824,574 34,987,875
Accumulated other
comprehensive income (82,448) (171,921)
------------- -------------
35,742,126 34,815,954
------------- -------------
$ 239,241,236 $ 218,130,662
============= =============
Old Line Bancshares, Inc. & Subsidiary
Consolidated Statements of Income
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
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Interest revenue
Loans,
including fees $ 3,359,297 $ 2,467,945 $ 9,210,576 $ 6,418,661
U.S. Treasury
securities 27,993 31,899 89,337 95,239
U.S. government
agency
securities 70,848 65,658 230,830 183,035
Mortgage backed
securities 11,731 15,936 38,447 50,005
Municipal
securities 26,954 27,509 80,898 83,601
Federal funds
sold 270,175 190,922 1,025,129 952,888
Other 19,268 20,556 62,196 59,303
----------- ----------- ----------- -----------
Total interest
revenue 3,786,266 2,820,425 10,737,413 7,842,732
----------- ----------- ----------- -----------
Interest expense
Deposits 1,485,826 786,304 4,249,039 2,136,419
Borrowed funds 180,826 145,822 420,122 374,763
----------- ----------- ----------- -----------
Total interest
expense 1,666,652 932,126 4,669,161 2,511,182
----------- ----------- ----------- -----------
Net interest
income 2,119,614 1,888,299 6,068,252 5,331,550
Provision for
loan losses 120,000 26,000 206,000 296,000
----------- ----------- ----------- -----------
Net interest
income after
provision
for loan
losses 1,999,614 1,862,299 5,862,252 5,035,550
----------- ----------- ----------- -----------
Non-interest
revenue
Service charges
on deposit
accounts 76,579 67,339 220,497 195,693
Marine division
broker
origination
fees 49,260 71,828 262,218 263,611
Earnings on bank
owned life
insurance 91,492 37,261 248,130 108,092
Income (loss)
on investment
in real estate
LLC (3,512) 77,528 256 77,774
Gain (loss) on
disposal of
assets (7,372) -- (7,372) --
Other fees and
commissions 71,436 68,100 191,105 140,838
----------- ----------- ----------- -----------
Total non-
interest
revenue 277,883 322,056 914,834 786,008
----------- ----------- ----------- -----------
Non-interest
expense
Salaries 851,056 713,357 2,406,093 1,988,168
Employee
benefits 236,253 202,888 749,518 548,661
Occupancy 241,648 194,081 676,269 324,808
Equipment 66,197 61,232 184,599 125,842
Data processing 51,293 47,824 165,385 122,532
Other operating 338,654 315,172 1,027,878 886,485
----------- ----------- ----------- -----------
Total non-
interest
expense 1,785,101 1,534,554 5,209,742 3,996,496
----------- ----------- ----------- -----------
Income before
income taxes 492,396 649,801 1,567,344 1,825,062
Income taxes 163,857 233,177 503,603 618,243
----------- ----------- ----------- -----------
Net income $ 328,539 $ 416,624 $ 1,063,741 $ 1,206,819
=========== =========== =========== ===========
Basic earnings
per common share $ 0.08 $ 0.10 $ 0.25 $ 0.28
Diluted earnings
per common share $ 0.08 $ 0.10 $ 0.25 $ 0.28