BOWIE, Md., April 25, 2016 (GLOBE NEWSWIRE) -- Old Line Bancshares, Inc. (“Company”) (NASDAQ:OLBK), the parent company of Old Line Bank, reports that net income available to common stockholders decreased $603 thousand, or 21.90%, to $2.2 million for the three months ended March 31, 2016, compared to net income of $2.8 million for the three months ended March 31, 2015.  Earnings were $0.20 per basic and diluted common share for the three months ended March 31, 2016 and $0.25 per basic and diluted common share for the same period in 2015.  The decrease in net income is primarily the result of a $1.9 million increase in non-interest expenses and a $217 thousand increase in the provision for loan losses, offsetting increases of $1.2 million in net interest income and $152 thousand in non-interest income.  Net income included $359 thousand in merger-related expenses (or $0.03 per basic and $0.02 per diluted common share) in connection with the Company’s acquisition of Regal Bancorp, Inc. (“Regal”), the parent company of Regal Bank & Trust (“Regal Bank”), in December 2015.  Excluding the merger-related expenses, which is a non-GAAP financial measure; earnings were $0.23 per basic and $0.22 per diluted share for the three months ending March 31, 2016.

Total assets at March 31, 2016 increased by $12.9 million compared to December 31, 2015.  Total net loans held-for-investment increased $28.8 million, or 2.51% (10.04% annualized), during the three month period ended March 31, 2016. 

James W. Cornelsen, President and Chief Executive Officer of Old Line Bancshares, Inc. stated: “We look forward to a great 2016 and are confident that our exceptionally strong organic loan growth should allow us to continue to build our franchise and enhance our profitability.  We are pleased that we are expanding our presence in the Montgomery County, Maryland market with the scheduled opening of a second branch located in the Rockville Town Center in the second quarter of 2016.  With the dedication and teamwork of our staff, the core processing system for Regal Bank was successfully merged into Old Line Bank’s core processing system in February 2016.  We believe that the superior level of customer service we offer is widely recognized in our marketplace and our talented staff continues to strive to expand our footprint and increase our customer base.  We are pleased to report that our total net loans held for investment increased $28.8 million in the first quarter.  We will continue to build on our solid foundation to better serve our customers, while steadily investing in new growth opportunities to enhance our profitability.”

1st QUARTER HIGHLIGHTS:

• Net loans held-for-investment increased $28.8 million, or 2.51%, during the three months ended March 31, 2016, to $1.2 billion at March 31, 2016, compared to $1.1 billion at December 31, 2015, primarily as a result of organic growth within our market area.  Average gross loans increased $85.1 million, or 7.83%, to $1.2 billion for the three month period ending March 31, 2016 compared to $1.1 billion for the three month period ended December 31, 2015. Average gross loans increased $217.9 million, or 22.82%, compared to $955 million for the three month period ended March 31, 2015.  The growth for the first quarter this year as compared to the same quarter last year includes approximately $91.0 million in loans acquired in the Regal merger.
• Total assets increased $12.9 million, 0.86%, since December 31, 2015.
• Net income decreased 21.90% to $2.2 million, or $0.20 per basic and diluted share, for the three month period ending March 31, 2016, from net income of $2.8 million, or $0.25 per basic and diluted share, for the first quarter of 2015. 
• The net interest margin was 3.85% compared to 4.32% for the same period in 2015.  Total yield on interest earning assets decreased to 4.30% for the three months ending March 31, 2016, compared to 4.70% for the same three month period last year.  
• The first quarter Return on Average Assets (ROAA) and Return on Average Equity (ROAE) were 0.57% and 6.01%, respectively, compared to ROAA and ROAE of 0.89% and 8.27%, respectively, for the first quarter of 2015.
• The first quarter of 2016 ended with a book value of $13.52 per common share and a tangible book value of $12.23 per common share compared to $13.16 and $12.02, respectively, at December 31 2015.
• We maintained liquidity and by all regulatory measures remained “well capitalized.”

Total assets at March 31, 2016 increased $12.9 million from December 31, 2015 primarily due to an increase of $28.8 million in loans held-for-investment, offsetting decreases of $8.1 million in cash and cash equivalents, $3.9 million in our investment portfolio and $4.0 million in our loans held for sale.

Deposits decreased $2.3 million for the three months ended March 31, 2016 compared to December 31, 2015.  Non-interest bearing deposits increased $248 thousand, partially offsetting a decrease in our interest bearing deposits of $2.6 million. 

Average interest earning assets for the three month period ending March 31, 2016 increased $251.8 million compared to the same period of 2015.  The average yield on such assets was 4.30% for the three months ending March 31, 2016 compared to 4.70% for the comparable 2015 period.  The decrease on the yield on interest earning assets is the result of lower levels of accretion on acquired loans due to a lower amount of early payoffs on acquired loans with credit marks for the three months ending March 31, 2016 as compared to the same three month period in 2015.  Re-pricing in the loan portfolio and lower yields on new loans also caused the average loan yield to decline.

Average interest bearing liabilities for the three month period ending March 31, 2016 increased $192.4 million compared to the same three month period of 2015.  The average rate paid on such liabilities increased to 0.60% for the three months ending March 31, 2016 compared to 0.50% for the comparable 2015 period, primarily due to higher rates paid on our borrowings, which includes the interest paid on our trust preferred securities and, to a lesser extent, higher rates on the deposits acquired in the Regal merger. 

The net interest margin for the three months ended March 31, 2016 decreased to 3.85% from 4.32% for the three months ending March 31, 2015.  Among other things, the net effect of fair value accretion/amortization on acquired loans affects the net interest margin and net interest income.  The net interest margin in 2016 also was affected by a lower amount of accretion on acquired loans due to a lower amount of early payoffs on acquired loans with credit marks for the three months ending March 31, 2016 as compared to the same three month period in 2015.  The fair value accretion/amortization is recorded on pay downs recognized during the period, which contributed to a six basis point increase for the three months ended March 31, 2016, as compared to a 21 basis point increase for the three months ending March 31, 2015.  Also, our average interest bearing liabilities and the rate paid on such liabilities increased for the three month period ending March 31, 2016, compared to the same three months last year.  The amount of the accretion on such deposits during the three months ended December 31, 2015 increased by two basis points as compared to the same three month period of 2015.

Net interest income increased $1.2 million, or 10.04%, for the three month period ending March 31, 2016 compared to the same period in 2015 primarily due to increases in the interest recognized on loans offsetting the increase in interest expense.  Loan interest income increased for the three month period ending March 31, 2016 due to organic growth as well as the loans we acquired in the Regal acquisition.  Interest expense increased primarily due to increases in our deposits both from organic growth and the deposits we acquired in the Regal acquisition as well as an increase in borrowings.

Non-interest income increased $152 thousand, or 8.28%, for the three month period ending March 31, 2016 compared to the same period of 2015 primarily as a result of increases of $103 thousand in other fees and commissions, and $34 thousand in earnings on bank owned life insurance, offsetting the lack of any gain on disposal of assets compared to a $20 thousand gain during the comparable 2015 period.  The increase in other fees and commissions is primarily related to a one-time incentive fee received for our debit card program.  The increase in earnings on bank owned life insurance is due to the bank owned life insurance we acquired with the Regal acquisition.

Non-interest expenses increased $1.9 million, or 22.24%, for the three month period ending March 31, 2016 compared to the same period of 2015 primarily as a result of increases in salaries and benefits, occupancy and equipment, and merger and integration expenses, partially offset by a decrease in the loss on other real estate owned properties.  Salaries and benefits increased $1.2 million primarily as a result of additional staff due to our acquisition of Regal Bank and the additional staff for our new Rockville location that opened in November 2015.  Occupancy and equipment increased $325 thousand as a result of the addition of the former Regal bank branches and the addition of our new Rockville branch.  Gain on the sale of other real estate owned was $4 thousand for a property that sold compared to net losses of $135 thousand on the sale of three other real estate properties during the three months ended March 31, 2015. Merger and integration expenses include approximately $140 thousand in severance payments associated with merger-related staff reductions. 

The provision for loan losses increased $217 thousand for the three month period ending March 31, 2016 compared to the same period last year due to the increase in our loan held-for-investment portfolio and an increase in our reserves on specific loans.

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 has 23 branches located in its primary market area of suburban Maryland (Washington, D.C. suburbs, Southern Maryland and Baltimore suburbs) counties of Anne Arundel, Baltimore, Calvert, Carroll, Charles, Montgomery, Prince George's and St. Mary's. 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 non-GAAP financial measures, including: (i) net operating income; (ii) net operating income available to common stockholders; (iii) earnings per basic share; (iv) earnings per diluted share; (v) operating non-interest expense; (vi) operating efficiency ratio; (vii) operating non-interest expense as a percentage of average assets; (viii) return on average assets; (ix) return on average common equity.  Net income excludes merger-related expenses, net of tax.  Operating non-interest expense excludes merger related expense, net of tax.  The operating efficiency ratio excludes merger related expenses.  Management 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.

The statements in this press release that are not historical facts, in particular the statements with respect to the opening of Old Line Bank’s Rockville Town Center branch and enhanced profitability, 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 in our target markets or nationally or a return to recessionary conditions,  the actions of our competitors and our ability to successfully compete, in particular in new market areas, and changes in regulatory requirements and/or restrictive banking legislation that may adversely affect 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. undertakes no obligation to 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
	March 31,			December 31,			September 30,			June 30,			March 31,
	2016			2015 (1)			2015			2015			2015
	(Unaudited)						(Unaudited)			(Unaudited)			(Unaudited)
Cash and due from banks	$	34,108,645		$	40,239,384		$	29,107,355		$	40,494,305		$	37,061,793
Interest bearing accounts		1,150,474			1,135,263			1,147,181			1,034,085			1,080,570
Federal funds sold		325,606			2,326,045			362,726			331,178			624,888
Total cash and cash equivalents		35,584,725			43,700,692			30,617,262			41,859,568			38,767,251
Investment securities available for sale		190,749,087			194,705,675			151,522,391			151,179,573			158,380,719
Loans held for sale		4,148,506			8,112,488			5,264,444			6,361,652			8,692,297
Loans held for invesment, less allowance for loan losses of $5,705,857
and $4,909,818 for March 31, 2016 and December 31, 2015.		1,175,828,165			1,147,034,715			1,040,227,945			1,008,618,046			963,706,538
Equity securities at cost		5,710,845			4,942,346			3,671,895			3,565,596			3,353,096
Premises and equipment		35,995,176			36,174,978			33,948,846			33,786,623			33,874,131
Accrued interest receivable		3,655,444			3,814,546			3,223,748			3,341,570			3,172,615
Deferred income taxes		12,828,069			13,820,679			12,734,261			13,108,799			12,506,347
Current income taxes receivable		-			-			-			1,198,299			1,312,872
Bank owned life insurance		36,843,873			36,606,105			32,071,875			31,856,947			31,643,001
Other real estate owned		2,698,344			2,472,044			1,948,625			1,215,690			1,600,015
Goodwill		9,786,357			9,786,357			7,793,665			7,793,665			7,793,665
Core deposit intangible		4,124,985			4,351,226			3,822,953			4,016,913			4,210,679
Other assets		5,062,691			4,567,038			4,530,443			4,127,881			6,087,688
Total assets	$	1,523,016,267		$	1,510,088,889		$	1,331,378,353		$	1,312,030,822		$	1,275,100,914
Deposits
Non-interest bearing	$	328,797,753		$	328,549,405		$	279,339,255		$	275,953,182		$	269,733,047
Interest bearing		904,751,898			907,330,561			811,186,492			808,460,674			781,718,574
Total deposits		1,233,549,651			1,235,879,966			1,090,525,747			1,084,413,856			1,051,451,621
Short term borrowings		118,571,030			107,557,246			85,695,507			76,722,442			71,236,281
Long term borrowings		9,561,842			9,593,318			5,903,665			5,931,298			5,958,485
Accrued interest payable		448,677			416,686			357,691			322,926			284,444
Supplemental executive retirement plan		5,405,763			5,336,509			5,276,167			5,222,669			5,162,732
Income taxes payable		4,721,336			3,615,677			379,247			-			-
Other liabilities		4,473,968			3,700,598			4,967,326			3,457,441			3,420,900
Total liabilities		1,376,732,267			1,366,100,000			1,193,105,350			1,176,070,632			1,137,514,463
Stockholders' equity
Common stock		108,026			108,026			105,131			105,745			107,551
Additional paid-in capital		105,408,038			105,293,606			100,614,804			101,500,434			104,313,092
Retained earnings		39,793,541			38,290,876			36,935,945			34,353,501			32,281,404
Accumulated other comprehensive income (loss)		717,881			38,200			359,840			(253,879	)		630,791
Total Old Line Bancshares, Inc. stockholders' equity		146,027,486			143,730,708			138,015,720			135,705,801			137,332,838
Non-controlling interest		256,514			258,181			257,283			254,389			253,613
Total stockholders' equity		146,284,000			143,988,889			138,273,003			135,960,190			137,586,451
Total liabilities and stockholders' equity	$	1,523,016,267		$	1,510,088,889		$	1,331,378,353		$	1,312,030,822		$	1,275,100,914
Shares of basic common stock outstanding		10,802,560			10,802,560			10,513,025			10,574,439			10,755,017
(1) Financial information at December 31, 2015 has been derived from audited financial statements.

 

Old Line Bancshares, Inc. & Subsidiaries
Consolidated Statements of Income
	Three Months			Three Months			Three Months			Three Months			Three Months
	Ended			Ended			Ended			Ended			Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
		2016		2015 (1)				2015			2015			2015
	(Unaudited)						(Unaudited)			(Unaudited)			(Unaudited)
Interest income
Loans, including fees	$	13,057,180		$	12,646,217		$	12,202,174		$	11,516,860		$	11,621,493
Investment securities and other		1,101,146			977,533			805,172			835,594			886,084
Total interest income		14,158,326			13,623,750			13,007,346			12,352,454			12,507,577
Interest expense
Deposits		1,270,421			1,196,381			1,118,092			1,021,560			910,957
Borrowed funds		275,659			181,876			141,009			159,707			134,716
Total interest expense		1,546,080			1,378,257			1,259,101			1,181,267			1,045,673
Net interest income		12,612,246			12,245,493			11,748,245			11,171,187			11,461,904
Provision for loan losses		778,611			400,000			263,595			85,658			561,731
Net interest income after provision for loan losses		11,833,635			11,845,493			11,484,650			11,085,529			10,900,173
Non-interest income
Service charges on deposit accounts		411,337			430,964			442,225			441,382			415,202
Gain on sales or calls of investment securities		76,998			-			604			3,924			60,694
Earnings on bank owned life insurance		282,186			260,898			250,950			249,421			248,384
Gains (losses) on disposal of assets		-			(5,847	)		-			-			19,975
Gain on sale of loans		377,138			474,941			457,613			484,635			354,650
Other fees and commissions		835,994			432,810			692,106			325,028			733,004
Total non-interest income		1,983,653			1,593,766			1,843,498			1,504,390			1,831,909
Non-interest expense
Salaries & employee benefits		5,376,552			4,319,029			4,407,726			4,331,572			4,217,370
Occupancy & Equipment		1,724,553			1,487,028			1,478,740			1,338,660			1,399,877
Data processing		397,792			361,991			350,941			367,190			352,060
Merger and integration		359,481			1,420,570			-			-			-
Core deposit amortization		226,241			194,507			193,960			193,766			210,117
(Gains)losses on sales of other real estate owned		(4,208	)		20,502			(114,709	)		9,169			134,754
OREO expense		154,966			75,824			158,983			75,552			120,201
Other operating		2,389,142			2,270,861			2,132,067			2,477,041			2,257,235
Total non-interest expense		10,624,519			10,150,312			8,607,708			8,792,950			8,691,614
Income before income taxes		3,192,769			3,288,947			4,720,440			3,796,969			4,040,468
Income tax expense		1,043,366			1,286,496			1,605,586			1,195,273			1,295,035
Net income		2,149,403			2,002,451			3,114,854			2,601,696			2,745,433
Less: Net income (loss) attributable to the noncontrolling interest		(1,667	)		898			2,894			776			(8,720	)
Net income available to common stockholders	$	2,151,070		$	2,001,553		$	3,111,960		$	2,600,920		$	2,754,153
Earnings per basic share	$	0.20		$	0.19		$	0.30		$	0.25		$	0.25
Earnings per diluted share	$	0.20		$	0.19		$	0.29		$	0.24		$	0.25
Adjusted per basic share	$	0.23		$	0.30		$	-		$	-		$	-
Adjusted per diluted share	$	0.22		$	0.30		$	-		$	-		$	-
Dividend per common share	$	0.06		$	0.06		$	0.05		$	0.05		$	0.05
Average number of basic shares		10,802,560			10,604,667			10,544,357			10,617,225			10,807,366
Average number of dilutive shares		11,022,469			10,760,832			10,685,306			10,759,628			10,899,030
(1) Financial information as of December 31, 2015 has been derived from audited financial statements.

RECONCILIATION OF AND PRESENTATION OF NON-GAAP FINANCIAL MEASURES

(1) As the magnitude of the merger expenses distorts the operational results of the Company, we present in the GAAP reconciliation below and in the accompanying text certain performance ratios excluding the effect of the merger expenses during the three month period ended March 31, 2016.  We believe this information is important to enable shareholders and other interested parties to assess the core operational performance of the Company.

		Three Months				Twelve Months
		ending March 31,				ending December
Reconciliation of Non-GAAP measures (Unaudited)		2016				31, 2015
		Net Interest				Net Interest
		Income				Income
Net Income (GAAP)		$	2,149,403			$	10,464,434
Merger-related expenses, net of tax			306,003				1,200,825
Operating Net Income (non-GAAP)		$	2,455,406			$	11,665,259
Net income available to common shareholders		$	2,151,070			$	10,468,586
Merger-related expenses, net of tax			306,003				1,200,825
Operating earnings		$	2,457,073			$	11,669,411
Earnings per weighted average common shares, basic (GAAP)		$	0.20			$	0.98
Merger-related expenses, net of tax			0.03				0.11
Operating earnings per weighted average common share basic (non GAAP)		$	0.23			$	1.09
Earnings per weighted average common shares, diluted (GAAP)		$	0.20			$	0.97
Merger-related expenses, net of tax			0.02				0.11
Operating earnings per weighted average common share basic (non-GAAP)		$	0.22			$	1.08
Summary Operating Results (non-GAAP)
Noninterest expense (GAAP)		$	10,624,519			$	36,275,682
Merger-related expenses, net of tax			306,003				1,200,825
Operating noninterest expense (non-GAAP)			10,318,516			$	35,074,857
Operating efficiency ratio (non-GAAP)			70.33	%			65.64	%
Operating noninterest expense as a % of average assets			2.71	%			2.65	%
Return on average assets
Net income		$	2,149,403			$	10,464,434
Merger-related expenses, net of tax			306,003				1,200,825
Operating net income		$	2,455,406			$	11,665,259
Adjusted return on average assets			0.66	%			0.88	%
Return on average common equity
Net income available to common shareholders		$	2,151,070			$	10,468,586
Merger-related expenses, net of tax			306,003				1,200,825
Operating earnings (non-GAAP)		$	2,457,073			$	11,669,411
Adjusted return on average common equity (non-GAAP)			7.01	%			8.40	%

 

Old Line Bancshares, Inc. & Subsidiaries
Average Balances, Interest and Yields
		3/31/2016						12/31/2015							9/30/2015							6/30/2015							3/31/2015
		Average			Yield/			Average				Yield/			Average				Yield/			Average				Yield/			Average				Yield/
		Balance			Rate			Balance				Rate			Balance				Rate			Balance				Rate			Balance				Rate
Assets:
Int. Bearing Deposits		$	2,538,719			0.47	%	$	2,163,496				0.26	%	$	1,754,437				0.05	%	$	914,076				0.08	%	$	593,602				0.12	%
Investment Securities (2)			197,036,394			2.71	%		182,660,126				2.65	%		154,931,599				2.56	%		161,858,721				2.56	%		164,560,281				2.70	%
Loans			1,172,758,851			4.56	%		1,087,653,696				4.70	%		1,036,066,492				4.76	%		1,002,896,056				4.70	%		954,873,037				5.02	%
Allowance for Loan Losses			(5,050,728	)					(3,505,864	)						(4,567,326	)						(4,576,511	)						(4,498,086	)
Total Loans Net of allowance			1,167,708,123			4.58	%		1,084,147,832				4.71	%		1,031,499,166				4.78	%		998,319,545				4.72	%		950,374,951				5.04	%
Total interest-earning assets			1,367,283,236			4.30	%		1,268,971,454				4.41	%		1,188,185,202				4.49	%		1,161,092,342				4.42	%		1,115,528,834				4.70	%
Noninterest bearing cash			43,812,578						42,032,492							39,141,171							37,463,216							34,422,919
Other Assets			110,530,441						103,829,394							99,737,905							99,548,767							102,782,917
Total Assets		$	1,521,626,255					$	1,414,833,340						$	1,327,064,278						$	1,298,104,325						$	1,252,734,670
Liabilities and Stockholders' Equity
Interest-bearing Deposits		$	908,510,119			0.56	%	$	841,394,142				0.56	%	$	813,731,631				0.55	%	$	765,327,795				0.54	%	$	772,838,785				0.48	%
Borrowed Funds			129,440,961			0.86	%		128,656,699				0.56	%		87,448,890				0.64	%		117,595,112				0.54	%		72,721,100				0.75	%
Total interest-bearing liabilities			1,037,951,080			0.60	%		970,050,841				0.56	%		901,180,521				0.55	%		882,922,907				0.54	%		845,559,885				0.50	%
Noninterest bearing deposits			326,249,639						293,242,708							278,650,167							269,427,296							262,926,103
			1,364,200,719						1,263,293,549							1,179,830,688							1,152,350,203							1,108,485,988
Other Liabilities			13,130,368						9,526,486							8,422,924							7,866,395							9,009,800
Noncontrolling Interest			256,330						256,218							256,636							252,293							258,240
Stockholder's Equity			144,038,838						141,757,087							138,554,030							137,635,434							134,980,642
Total Liabilities and Stockholder's Equity		$	1,521,626,255					$	1,414,833,340						$	1,327,064,278						$	1,298,104,325						$	1,252,734,670
Net interest spread						3.70	%						3.85	%						3.93	%						3.88	%						4.20	%
Net interest income and Net interest margin(1)		$	13,077,828			3.85	%	$	12,731,170				3.98	%	$	12,184,339				4.07	%	$	11,602,656				4.01	%	$	11,891,497				4.32	%

(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.  See “Reconciliation of Non-GAAP Measures.”

(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 ending March 31, 2016 and 2015.    Fair value accretion for the current quarter and prior four quarter are as follows: 

	3/31/2016					12/31/2015								9/30/2015						6/30/2015								3/31/2015
	Fair Value				% Impact on		Fair Value			% Impact on				Fair Value				% Impact on		Fair Value				% Impact on				Fair Value				% Impact on
	Accretion				Net Interest		Accretion			Net Interest				Accretion				Net Interest		Accretion				Net Interest				Accretion				Net Interest
	Dollars				Margin		Dollars			Margin				Dollars				Margin		Dollars				Margin				Dollars				Margin
Commercial loans (1)	$	27,404			0.01	%	$	(2,772	)		(0.00	)	%	$	18,940			0.01	%	$	(3,114	)			(0.00	)	%	$	8,690			0.00	%
Mortgage loans (1)		179,550			0.05			399,729			0.13				514,073			0.17			35,386				0.01				589,266			0.21
Consumer loans		11,553			0.00			3,486			0.00				3,771			0.00			4,298				0.00				11,390			0.00
Interest bearing deposits		92,833			0.03			38,091			0.01				38,091			0.01			37,677				0.01				37,263			0.01
Total Fair Value Accretion (Amortization)	$	311,340			0.09	%	$	438,534			0.14		%	$	574,875			0.19	%	$	74,247				0.02		%	$	646,609			0.22	%

(1) Negative accretion on commercial and mortgage loans is due to the early payoff of loans which caused a reduction in fair value income on acquired loan portfolio.

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

	3/31/2016						12/31/2015						9/30/2015						6/30/2015						3/31/2015
	Net Interest						Net Interest						Net Interest						Net Interest						Net Interest
	Income				Yield		Income				Yield		Income				Yield		Income				Yield		Income				Yield
GAAP net interest income	$	12,612,246			3.71	%	$	12,245,493			3.83	%	$	11,748,245			3.93	%	$	11,171,187			3.86	%	$	11,461,904			4.17	%
Tax equivalent adjustment
Federal funds sold		5			0.00			-			-			-			-			1			0.00			1			0.00
Investment securities		226,861			0.07			243,378			0.08			193,491			0.06			195,785			0.07			200,498			0.07
Loans		238,716			0.07			242,299			0.07			242,602			0.08			235,683			0.08			229,094			0.08
Total tax equivalent adjustment		465,582			0.14			485,677			0.15			436,093			0.14			431,469			0.15			429,593			0.15
Tax equivalent interest yield	$	13,077,828			3.85	%	$	12,731,170			3.98	%	$	12,184,338			4.07	%	$	11,602,656			4.01	%	$	11,891,497			4.32	%

 

Old Line Bancshares, Inc. & Subsidiaries
Selected Loan Information
(Dollars in thousands)
	March 31,			December 31,			September 30,			June 30,			March 31,
	2016			2015			2015			2015			2015
Acquired Loans(1)
Period End Loan Balance	$	229,026		$	237,061		$	152,004		$	164,300		$	171,527
Accruing		225,957			235,816			150,702			161,495			165,956
Non-accrual(2)		3,069			1,245			1,302			2,546			2,518
Accruing 30-89 days past due		2,127			6,132			603			2,102			3,053
Accruing 90 or more days past due		902			1			214			-			-
Otther real estate owned		2,273			2,047			1,524			741			1,125
Net charge offs (recoveries)		2			(39	)		225			320			(16	)
Legacy Loans(3)
Period End Loan Balance	$	946,803		$	913,609		$	891,407		$	847,499		$	795,532
Deferred Costs		1,168			1,274			1,270			1,255			1,283
Accruing		951,197			907,915			889,364			845,391			793,576
Non-accrual		4,292			4,420			773			853			1,105
Accruing 30-89 days past due		4,529			994			2,630			1,199			851
Accruing 90 or more days past due		-			-			203			-			-
Other real estate owned		425			425			425			475			475
Net charge offs (recoveries)		15			(18	)		20			(34	)		224
Allowance for loan losses as % of held for investment loans		0.48	%		0.43	%		0.43	%		0.44	%		0.48	%
Allowance for loan losses as % of legacy held for investment loans		0.60	%		0.54	%		0.50	%		0.52	%		0.59	%
Allowance for loan losses as % of acquired held for investment loans		2.49	%		2.07	%		2.93	%		2.70	%		2.60	%
Total non-performing loans as a % of held for investment loans		0.85	%		0.71	%		0.46	%		0.49	%		0.37	%
Total non-performing assets as a % of total assets		0.78	%		0.60	%		0.36	%		0.38	%		0.44	%

⁽¹⁾ Acquired loans represent all loans acquired on April 1, 2011 from MB&T on May 10, 2013 from WSB and on December 4, 2015 for Regal.  We originally recorded these loans at fair value upon acquisition. 
⁽²⁾ These loans are loans that are considered non-accrual because they are not paying in conformance with the original contractual agreement.  At acquisition, we recorded these loans at fair value.  Until the December 31, 2013 quarter, we recognized interest income on these loans through the accretion of the difference between the carrying value of these loans and their expected cash flows.  In the fourth quarter of 2013, we are no longer recording interest on these loans that were not purchased as credit impaired. 
⁽³⁾ Legacy loans represent total loans excluding loans acquired on April 1, 2011, May 10, 2013 and December 4, 2015.

 

OLD LINE BANCSHARES, INC.
CONTACT: ELISE HUBBARD
CHIEF FINANCIAL OFFICER
(301) 430-2560