EXHIBIT 99.1
Old Line Bancshares, Inc. Reports a 21.87 Percent Increase in Three Month Net Income
BOWIE, Md., July 23, 2008 (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 increased $89,164 or 21.87% to $496,824 or $0.13 per basic and diluted common share for the three month period ended June 30, 2008 from $407,660 or $0.10 per basic and diluted common share for the same period in 2007. Net income for the six month period ended June 30, 2008 was $941,657 or $0.25 per basic and $0.24 per diluted common share. This represented an increase of $206,455 or 28.08% compared to net income of $735,202 or $0.17 per basic and diluted common share for the six months ended June 30, 2007. The $0.08 or 47.06% increase in earnings per basic common share for the six month period was a result of improved earnings and the company's repurchase of 177,799 shares of its common stock during the six month period ended June 30, 2008.
Total assets increased $25.2 million or 10.28% to $270.4 million on June 30, 2008 compared to the December 31, 2007 level of $245.2 million. For the six month period ended June 30, 2008, total loans increased $15.4 million (7.63%) to $217.3 million compared to the $201.9 million reported at December 31, 2007. For the twelve month period, loans increased $45.9 million (26.78%) compared to the $171.4 million reported at June 30, 2007.
Mr. Cornelsen stated: "Despite the weak economic environment and the uncertainties faced by our industry, I am pleased to report continued sound financial performance for the first six months of 2008. Although the challenges faced by the real estate industry in our market in the prior twelve months negatively impacted our industry, we were able to grow loans 26.78% over the prior year while maintaining the quality in our loan portfolio. We ended the quarter with only the one non-performing loan totaling approximately $935,000 that we had previously reported and a boat that we repossessed during the quarter that secured an approximately $65,000 loan balance. We had no other loans past due more than 30 days. We also do not have any investments or substantive loans comprised of sub-prime mortgages. We continue to believe that most of our commercial clients, even those that directly or indirectly serve the building industry, remain financially strong. Considering our current backlog of credits approved or in the underwriting process, we anticipate that loan growth will continue during the year.
"As of September 30, 2007, we reported that we had one non-performing loan in the amount of $127,000. The foreclosure process on the property that secured this loan was completed in January and we received full repayment of principal, interest, late charges and costs in June 2008. As of December 31, 2007, we reported that we had a second non-performing loan. The Borrower on this loan filed for bankruptcy protection in November 2007. During the bankruptcy proceedings, we discovered that the borrower provided the bank with fraudulent financial statements. A commercial real estate property secures this loan. The loan to value at inception of this loan was 80%. During the first quarter, the borrower began remitting payments and advised us that the borrower will make all past due interest and principal current prior to March 31, 2009. We do not expect to incur any losses on this loan. We also do not expect to recognize any substantive additional losses on the boat.
"During this period of economic stress, we have also closely monitored our investment portfolio. This portfolio consists primarily of investment grade instruments issued by the U.S. government, government sponsored entities and municipalities. We do not have any investments in trust preferred securities in our portfolio.
"As a result of the growth in our loan portfolio and continued deterioration in the economy, we increased the provision for loan losses 322.00% or $96,600 during the three month period and 91.86% or $79,000 during the six month period ended June 30, 2008. Non-interest expense increased $10,195 (0.59%) for the three month period and $52,538 (1.53%) for the six month period. These increases were the result of the opening of our new College Park branch in February 2008 and the expenses associated with the operations of our Greenbelt branch that we opened in June 2007. The decline in salary and other operating expenses was a result of the closing of the marine division at the end of the third quarter of 2007 which was offset by the staffing requirements in our new branches and the new loan officers hired in the second and fourth quarter of 2007."
At December 31, 2007, the allowance for loan losses was $1.6 million or 0.78% of gross loans compared to $1.7 million or 0.79% of gross loans at June 30, 2008. Historically, we have had 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. The rapid Federal Reserve interest rate reductions we have experienced this year directly impacted our net interest margin which decreased to 3.90% for the six month period ended June 30, 2008 compared to 3.95% for the six month period ended June 30, 2007. The 3.90% margin was a modest improvement over the 3.84% reported on March 31, 2008.
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 four 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 with respect to anticipated loan growth, payment of non-performing loans, 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: 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, December 31,
2008 2007
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(Unaudited)
Assets
Cash and due from banks $ 6,098,646 $ 3,172,089
Federal funds sold 11,048,810 9,822,079
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Total cash and cash
equivalents 17,147,456 12,994,168
Time deposits in other banks 2,052,009 2,000,000
Investment securities available
for sale 6,258,432 9,393,356
Investment securities held to
maturity 10,175,547 2,301,591
Loans, less allowance for loan
losses 217,258,833 201,941,667
Restricted equity securities at
cost 2,126,550 2,080,250
Investment in real estate LLC 819,663 805,971
Bank premises and equipment 4,686,670 4,207,395
Accrued interest receivable 840,807 918,078
Deferred income taxes 201,223 161,940
Bank owned life insurance 7,932,654 7,769,290
Other assets 920,264 637,570
------------ ------------
$270,420,108 $245,211,276
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Liabilities and Stockholders' Equity
Deposits
Noninterest-bearing $ 40,055,451 $ 35,141,289
Interest-bearing 157,834,605 142,670,944
------------ ------------
Total deposits 197,890,056 177,812,233
Short-term borrowings 22,343,877 16,347,096
Long-term borrowings 15,000,000 15,000,000
Accrued interest payable 559,064 693,868
Income tax payable 100,259 238,226
Other liabilities 618,209 488,599
------------ ------------
236,511,465 210,580,022
Stockholders' equity
Common stock, par value $.01
per share; authorized
15,000,000 shares; issued and
outstanding 3,898,050 in
2008, and 4,075,849 in 2007 38,980 40,758
Additional paid-in capital 29,073,627 30,465,013
Retained earnings 4,858,245 4,155,232
------------ ------------
33,970,852 34,661,003
Accumulated other
comprehensive income (62,209) (29,749)
------------ ------------
33,908,643 34,631,254
------------ ------------
$270,420,108 $245,211,276
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Old Line Bancshares, Inc. & Subsidiary
Consolidated Statements of Income
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
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Interest revenue
Loans, including
fees $3,473,981 $2,970,722 $6,977,665 $5,851,279
U.S. Treasury
securities 18,698 29,769 41,185 61,344
U.S. government
agency securities 24,175 79,622 49,707 159,982
Mortgage backed
securities 94,791 12,801 112,850 26,716
Municipal
securities 23,894 26,966 48,811 53,944
Federal funds sold 45,591 381,489 171,969 754,954
Other 44,566 21,640 93,951 42,928
---------- ---------- ---------- ----------
Total interest
revenue 3,725,696 3,523,009 7,496,138 6,951,147
---------- ---------- ---------- ----------
Interest expense
Deposits 1,181,809 1,402,699 2,516,646 2,763,213
Borrowed funds 184,049 133,052 390,121 239,296
---------- ---------- ---------- ----------
Total interest
expense 1,365,858 1,535,751 2,906,767 3,002,509
---------- ---------- ---------- ----------
Net interest
income 2,359,838 1,987,258 4,589,371 3,948,638
Provision for loan
losses 126,600 30,000 165,000 86,000
---------- ---------- ---------- ----------
Net interest
income after
provision for
loan losses 2,233,238 1,957,258 4,424,371 3,862,638
---------- ---------- ---------- ----------
Non-interest revenue
Service charges
on deposit
accounts 79,252 72,998 152,204 143,918
Marine division
broker
origination fees -- 135,284 -- 212,958
Earnings on bank
owned life
insurance 91,111 89,288 182,714 156,638
Income (loss) on
investment in
real estate LLC 745 (6,000) 13,641 3,768
Other fees and
commissions 89,552 79,474 144,539 119,669
---------- ---------- ---------- ----------
Total
non-interest
revenue 260,660 371,044 493,098 636,951
---------- ---------- ---------- ----------
Non-interest expense
Salaries 751,700 800,866 1,486,631 1,555,037
Employee benefits 231,905 228,451 501,358 513,265
Occupancy 270,787 224,183 550,709 434,621
Equipment 76,191 56,956 146,666 118,402
Data processing 64,627 54,652 125,879 114,092
Other operating 336,659 356,566 665,936 689,224
---------- ---------- ---------- ----------
Total
non-interest
expense 1,731,869 1,721,674 3,477,179 3,424,641
---------- ---------- ---------- ----------
Income before
income taxes 762,029 606,628 1,440,290 1,074,948
Income taxes 265,205 198,968 498,633 339,746
---------- ---------- ---------- ----------
Net income $ 496,824 $ 407,660 $ 941,657 $ 735,202
========== ========== ========== ==========
Basic earnings per
common share $ 0.13 $ 0.10 $ 0.25 $ 0.17
Diluted earnings
per common share $ 0.13 $ 0.10 $ 0.24 $ 0.17
CONTACT: Old Line Bancshares, Inc.
Christine M. Rush, Chief Financial Officer
(301) 430-2544
