Exhibit 99.6
Old Line Bank Pro-Forma Capital Ratios | ||||||||||||
September 30, 2008 | Actual | Adjustment | Pro Forma | |||||||||
Tier 1 Capital | ||||||||||||
Total Equity Capital | $ | 31,938 | $ | 7,000 | $ | 38,938 | ||||||
Minus Unrealized Loss on AFS | (26 | ) | - | (26 | ) | |||||||
Total Tier 1 Capital | 31,964 | 7,000 | 38,964 | |||||||||
Tier 2 Capital | ||||||||||||
Allowance for Loan Losses | 1,916 | - | 1,916 | |||||||||
Total Tier 2 Capital | 33,880 | 7,000 | 40,880 | |||||||||
QUARTERLY Average Total Assets | 280,916 | 7,000 | 287,916 | |||||||||
Risk Weighted Assets | 236,315 | - | 236,315 | |||||||||
Ratios | ||||||||||||
Total Capital to Risk Weighted Assets | ||||||||||||
Consolidated Total Risk Based | 14.34 | % | 17.30 | % | ||||||||
Tier 1 Capital to Risk Weighted Assets | ||||||||||||
Consolidated Risk Based Capital | 13.53 | % | 16.49 | % | ||||||||
Tier 1 Capital to Average Assets | ||||||||||||
Consolidated Leverage Ratio | 11.38 | % | 13.53 | % |
ENDNOTES:
We used the following assumptions in the pro forma financial statements:
1) | $7 million proceeds invested in available for sale mortgage backed securities until deployed into new loan fundings. |
2) | Estimated fair value of preferred stock determined using present value with a 9% discount rate and a 5 year expected life. |
3) | Estimated fair value of warrants determined using the Black-Scholes method with a 24.66% volatility derived from historical stock price, 3.35% interest rate and 1.60% continuous yield. |
4) | Earnings from $7 million investment in mortgage backed securities with a 4.2% interest rate. |
5) | 39.445% tax rate. |
6) | 5.0% dividend payment and expected 5 year life of warrants. |
7) | Net income available for shareholders divided by weighted average number of shares. |
8) | Net income available for shareholders divided by weighted average number of dilutive shares. |
9) | Warrant strike price $7.40. Stock price at period end $7.75. |
10) | 15% of Tier II Capital. |