EXHBIT 99.1
PRESS RELEASE INC.FOR IMMEDIATE RELEASE July 30, 2007 | OLD LINE BANCSHARES, CONTACT: CHRISTINE M. RUSH CHIEF FINANCIAL OFFICER (301) 430-2544 |
OLD LINE BANCSHARES, INC. REPORTS SECOND QUARTER RESULTS
BOWIE, MD-James W. Cornelsen, President and Chief Executive Officer of Old Line Bancshares, Inc. (NASDAQ CAPITAL MARKET: OLBK), the parent company of Old Line Bank, reported that net income was $407,660 or $0.10 per basic and diluted common share for the three month period ending June 30, 2007. This was comparable to net income of $406,742 or $0.10 per basic and diluted common share for the same period in 2006. Net income for the six month period ended June 30, 2007 was $735,202 or $0.17 per basic and diluted common share. This represented a decrease of $54,993 or 6.96% compared to net income of $790,195 or $0.19 basic and diluted per common share for the six months ended June 30, 2006. Total assets increased $22.2 million or 10.18% to $240.3 million on June 30, 2007 compared to the December 31, 2006 level of $218.1 million. Additionally, for the six month period ended June 30, 2007, total loans grew 13.96% or $21.0 million to $171.4 million and total deposits at the second quarter end totaled $181.3 million which represented an $11.6 million or 6.84% increase.
Mr. Cornelsen stated: “I am pleased to report sound financial performance for the first six months and the second quarter of 2007. During the period, we experienced considerable loan growth and continued to maintain the quality in our loan portfolio. We ended the quarter with no loans 90 days past due and no non-performing loans. In June 2007, we opened our 6th branch location at 6301 Ivy Lane, Greenbelt, Maryland.” Mr. Cornelsen noted that it was “quite an accomplishment to maintain earnings while incurring the expenses associated with the opening of this branch during the quarter, the costs incurred from our investments in infrastructure made in the 2nd and 3rd quarters of 2006, and continued softness in the marine industry.”
As expected, the opening of the Greenbelt and Bowie branches and the establishment of our new headquarters in July 2006 caused a $357,686 or 183% increase in occupancy and equipments costs during the six month period and a $182,877 or 186% increase during the three month period. As a result of the staffing requirements for the new Greenbelt and Bowie branches, the new business development and 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 $447,718 or 27.63% during the six month period and $195,535 or 23.45% during the three month period. We believe these investments in personnel and facilities provide the infrastructure and support required to continue to grow the bank and will provide long term benefits. While we bore the burden of these increased costs during the first half of the year, we expect the benefits will begin to follow during the second half of the year. We plan to continue to identify and establish new branch locations that will support our long term growth plans”
Mr. Cornelsen also said that “the marine division’s performance continued to negatively impact earnings. Although we experienced improvements in the division’s performance during the second quarter of 2007 relative to the second quarter of 2006 and the first quarter of 2007, the high gasoline prices, adverse weather conditions, and general concerns about the economy continued to cause weakness in the marine industry. This weakness caused volume and earnings per originator to decline. As a result, the marine division experienced an approximately $23,000 pre-tax loss during the quarter compared to a pre-tax loss of $37,000 during the second quarter of 2006. For the six month period, the division posted a pre-tax loss of approximately $66,000 versus a pre-tax profit of $15,000 for the six months ended June 30, 2006.
At June 30, 2007, the allowance for loan losses was $1.4 million or 0.79% 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. During the 2nd quarter, we collected payment in full on the one non-performing loan that we had at the end of the previous quarter. 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. We experienced compression in the net interest margin from 4.30% for the six months ended June 30, 2006 to 3.97% for the six months ended June 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 $45.3 million or 39.95% growth in average gross loans outstanding to $158.7 million for the six months ended June 30, 2007 from $113.4 million for the six months ended June 30, 2006, we were able to increase net interest income $505,387 or 14.68% during the first six months of 2007 compared to the first six months of 2006 and $197,139 or 11.01% for the second quarter of 2007 compared to the second 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 two 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 future branches, 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 | ||
June 30, 2007 (Unaudited) | December 31, 2006 | |
Assets | ||
| Cash and due from banks | $ 5,015,620 | $ 5,120,068 |
| Federal funds sold | 32,892,808 | 34,508,127 |
| Total cash and cash equivalents | 37,908,428 | 39,628,195 |
| Investment securities available for sale | 12,882,962 | 14,118,649 |
| Investment securities held to maturity | 2,301,993 | 2,802,389 |
| Loans, less allowance for loan losses | 171,355,281 | 150,417,217 |
| Restricted equity securities at cost | 1,630,250 | 1,575,550 |
| Investment in real estate, LLC | 788,630 | 793,714 |
| Bank premises and equipment | 4,263,697 | 4,049,393 |
| Accrued interest receivable | 837,962 | 820,628 |
| Income tax receivable | 9,868 | - |
| Deferred income taxes | 255,299 | 226,873 |
| Bank owned life insurance | 7,602,020 | 3,458,065 |
| Other assets | 418,173 | 239,989 |
| $ 240,254,563 | $ 218,130,662 | |
Liabilities and Stockholders' Equity | ||
| Deposits | ||
| Noninterest-bearing | $ 35,430,789 | $ 37,963,066 |
| Interest-bearing | 145,883,630 | 131,708,780 |
| Total deposits | 181,314,419 | 169,671,846 |
| Short-term borrowings | 19,385,204 | 9,193,391 |
| Long-term borrowings | 3,000,000 | 3,000,000 |
| Accrued interest payable | 713,389 | 629,557 |
| Income tax payable | - | 334,496 |
| Other liabilities | 414,408 | 485,418 |
| 204,827,420 | 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 | 31,993,556 | 31,868,025 |
| Retained earnings | 3,557,239 | 3,077,313 |
| 35,593,341 | 34,987,875 | |
| Accumulated other comprehensive income | (166,198) | (171,921) |
| 35,427,143 | 34,815,954 | |
| $ 240,254,563 | $ 218,130,662 | |
Old Line Bancshares, Inc. & Subsidiary | ||||
Consolidated Statements of Income | ||||
(Unaudited) | ||||
Three Months Ended June 30, | Six Months Ended June 30, | |||
2007 | 2006 | 2007 | 2006 | |
Interest revenue | ||||
| Loans, including fees | $ 2,970,722 | $ 2,106,543 | $ 5,851,279 | $ 3,950,716 |
| U.S. Treasury securities | 29,769 | 31,764 | 61,344 | 63,339 |
| U.S. government agency securities | 79,622 | 58,813 | 159,982 | 117,377 |
| Mortgage backed securities | 12,801 | 16,674 | 26,716 | 34,069 |
| Tax exempt securities | 26,966 | 28,315 | 53,944 | 56,092 |
| Federal funds sold | 381,489 | 380,634 | 754,954 | 761,967 |
| Other | 21,640 | 19,817 | 42,928 | 38,747 |
| Total interest revenue | 3,523,009 | 2,642,560 | 6,951,147 | 5,022,307 |
Interest expense | ||||
| Deposits | 1,402,699 | 722,063 | 2,763,213 | 1,350,115 |
| Borrowed funds | 133,052 | 130,378 | 239,296 | 228,941 |
| Total interest expense | 1,535,751 | 852,441 | 3,002,509 | 1,579,056 |
| Net interest income | 1,987,258 | 1,790,119 | 3,948,638 | 3,443,251 |
Provision for loan losses | 30,000 | 140,000 | 86,000 | 270,000 |
| Net interest income after provision for loan losses | 1,957,258 | 1,650,119 | 3,862,638 | 3,173,251 |
Non-interest revenue | ||||
| Service charges on deposit accounts | 72,998 | 71,047 | 143,918 | 128,354 |
| Marine division broker origination fees | 135,284 | 67,432 | 212,958 | 191,783 |
| Earnings on bank owned life insurance | 89,288 | 37,500 | 156,638 | 71,642 |
| Income (loss) on investment in real estate, LLC | (6,000) | - | 3,768 | 246 |
| Other fees and commissions | 79,474 | 35,852 | 119,669 | 71,435 |
| Total non-interest revenue | 371,044 | 211,831 | 636,951 | 463,460 |
Non-interest expense | ||||
| Salaries | 800,866 | 668,205 | 1,555,037 | 1,274,811 |
| Employee benefits | 228,451 | 165,577 | 513,265 | 345,773 |
| Occupancy | 224,183 | 64,510 | 434,621 | 130,727 |
| Equipment | 56,956 | 33,752 | 118,402 | 64,610 |
| Data processing | 54,652 | 37,347 | 114,092 | 74,708 |
| Other operating | 356,566 | 286,012 | 689,224 | 570,821 |
| Total non-interest expense | 1,721,674 | 1,255,403 | 3,424,641 | 2,461,450 |
| Income before income taxes | 606,628 | 606,547 | 1,074,948 | 1,175,261 |
| Income taxes | 198,968 | 199,805 | 339,746 | 385,066 |
Net income | $ 407,660 | $ 406,742 | $ 735,202 | $ 790,195 |
| Basic earnings per common share | $ 0.10 | $ 0.10 | $ 0.17 | $ 0.19 |
| Diluted earnings per common share | $ 0.10 | $ 0.10 | $ 0.17 | $ 0.19 |