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Old Line Bancshares, Inc. Reports $2.6 Million in Net Income Available to Common Stockholders, a 47% Increase, for the Quarter Ended June 30, 2015

BOWIE, Md., July 16, 2015 (GLOBE NEWSWIRE) -- Old Line Bancshares, Inc. (NASDAQ:OLBK), the parent company of Old Line Bank, reported net income available to common stockholders increased $832 thousand, or 47.00% to $2.6 million for the three months ended June 30, 2015, compared to net income of $1.8 million for the three months ended June 30, 2014. Earnings were $0.25 per basic and $0.24 per diluted common share for the three months ended June 30, 2015, compared to $0.16 per basic and diluted common share for the same period in 2014. The increase in net income is primarily the result of a $560 thousand increase in net interest income and a $1.5 million decrease in the provision for loan losses, partially offset by a decrease of $323 thousand in non-interest income and a $342 thousand increase in non-interest expenses. Net income was $5.4 million for the six months ended June 30, 2015, compared with $3.6 million for the same six month period last year, an increase of $1.8 million, or 48.54%. Earnings were $0.50 per basic and $0.49 per diluted common share for the six months ended June 30, 2015 compared to $0.33 per basic and diluted common share for the same period last year. The increase in net income is primarily the result of increases of $1.7 million in net interest income and $57 thousand in non-interest income and decreases of $1.2 million in the provision for loan losses and $3 thousand in non-interest expenses.

Total assets at June 30, 2015 increased by $84.5 million compared to December 31, 2014. Total net loans held-for-investment increased $44.9 million, or 4.66%, during the three month period ended June 30, 2015 and $82.0 million, or 8.86%, during the six month period ended June 30, 2015. Non-performing assets decreased to 0.38% of total assets at June 30, 2015 compared to 0.65% at December 31, 2014.

James W. Cornelsen, President and Chief Executive Officer of Old Line Bancshares, Inc. stated: "We are pleased to report strong earnings for the second quarter and six months ending June 30, 2015. We had strong loan growth of 4.66% for the quarter and 8.86% for the six months ending June 30, 2015. Our deposits grew 3.13% and 6.75% for the three and six month periods ending June 30, 2015 to $1.1 billion at June 30, 2015 from $1.0 billion at December 31, 2014. Our goal is to continue to build our loan and deposit portfolios while maintaining asset quality and improving operating efficiency."

HIGHLIGHTS:

  • Net loans held-for-investment increased $44.9 million, or 4.66%, and $82.0 million, or 8.86%, for the three and six months ended June 30, 2015, to $1.0 billion at June 30, 2015 compared to $926.6 million at December 31, 2014, as a result of organic growth within our surrounding market area. Average gross loans increased $48.0 million, or 5.03%, to $1.0 billion for the three month period ending June 30, 2015 compared to $954.9 million during the three months ended March 31, 2015. Average gross loans for the six month period increased $97.7 million, or 10.79%, to $1.0 billion compared to $905.2 million at December 31, 2014.
  • Total assets increased $84.5 million, or 6.89%, since December 31, 2014.
  • Non-performing assets decreased 65.36% to 0.38% of total assets at June 30, 2015 compared to 0.65% at December 31, 2014 and 1.20% at June 30, 2014.
  • The net interest margin during the three months ended June 30, 2015 was 4.01% compared to 4.28% for the same period in 2014. Total yield on interest earning assets decreased to 4.42% for the three months ending June 30, 2015, compared to 4.67% for the same three month period last year. Interest expense as a percentage of total interest-bearing liabilities was 0.54% for the three months ended June 30, 2015 compared to 0.50% for the same three month period of 2014.
  • The net interest margin for the six months ended June 30, 2015 was 4.16% compared to 4.28% for the same six month period in 2014. Total yield on interest earning assets decreased to 4.55% for the six months ending June 30, 2015, compared to 4.68% for the same six month period last year. Interest expense as a percentage of total interest-bearing liabilities increased to 0.52% for the six months ended June 30, 2015 compared to 0.50% for the same six month period of 2014.
  • The second quarter Return on Average Assets (ROAA) and Return on Average Equity (ROAE) were 0.80% and 7.58%, respectively, compared to ROAA and ROAE of 0.60% and 5.46%, respectively, for the second quarter of 2014.
  • The ROAA and ROAE were 0.85% and 7.82%, respectively, for the six months ended June 30, 2015 compared to ROAA and ROAE of 0.62% and 5.70%, respectively, for the six months ending June 30, 2014.
  • Total deposits grew by $68.7 million, or 6.76%, since December 31, 2014.
  • We ended the second quarter of 2015 with a book value of $12.83 per common share and a tangible book value of $11.71 per common share compared to $12.51 and $11.38, respectively, at December 31, 2014.
  • We maintained liquidity and by all regulatory measures remained "well capitalized."

On February 25, 2015, Old Line Bancshares, Inc.'s board of directors approved the repurchase of up to 500,000 shares of our outstanding common stock. As of June 30, 2015, 266,923 shares have been repurchased at an average price of $15.74 per share. Any repurchased shares remain authorized but unissued shares.

Total assets at June 30, 2015 increased $84.5 million from December 31, 2014 primarily due to an increase of $82.0 million in loans held-for-investment and $16.5 million in cash and cash equivalents, offsetting a decrease of $10.5 million in our investment portfolio.

Nonperforming assets, which include non-accrual loans, foreclosed real estate and troubled debt restructured loans, decreased 27 basis points from 0.65% of total assets at December 31, 2014 to 0.38% of total assets at June 30, 2015.

Deposit growth for the six months ended June 30, 2015 consisted of increases in interest bearing deposits of $53.6 million and non-interest bearing deposits of $15.0 million.

The increase in net income for the three months ending June 30, 2015 compared to the three months ending June 30, 2014, as noted above, was primarily the result of a $560 thousand, or 5.27%, increase in net interest income and $1.5 million, or 94.45%, decrease in the provision for loan losses, partially offset by a $323 thousand decrease in non-interest income and an increase of $342 thousand in non-interest expenses. The increase in net income for the six months ending June 30, 2015 compared to the six months ending June 30, 2014, as noted above, was primarily the result of a $1.7 million, or 7.93%, increase in net interest income, a $1.2 million decrease in the provision for loan losses, a $57 thousand, or 1.76%, increase in non-interest income and a decrease of $3 thousand in non-interest expenses.

Average interest bearing liabilities for the three month period ending June 30, 2015 increased $72.9 million compared to the same period of 2014. Average interest bearing liabilities for the six month period ending June 30, 2015 increased $57.8 million compared to the same period of 2014. The average rate paid on such liabilities increased to 0.54% and 0.52%, respectively, for the three and six months ending June 30, 2015 compared to 0.50% for the comparable 2014 periods.

Net interest margin for the three months ended June 30, 2015 decreased to 4.01% from 4.28% during the three months ending June 30, 2014. The net interest margin for the six months ended June 30, 2015 decreased to 4.16% from 4.28% during the six months ending June 30, 2014. The net effect of fair value accretion/amortization on acquired loans also affects the net interest margin and net interest income. The fair value accretion/amortization is recorded on pay downs during the period recognized. Payoffs decreased during the three months ending June 30, 2015 contributing a two basis point increase, as compared to a 19 basis points increase for the three months ending June 30, 2014. The fair value accretion recorded on acquired deposits affects interest expense. The amount of the accretion on such deposits during the three months ended June 30, 2015 decreased by five basis points as compared to the same three month period last year.

Net interest income increased for the three and six month periods ending June 30, 2015 compared to the same periods in 2014 primarily due to increases in the interest recognized on loans offsetting the increases in interest expense. Loan interest increased for three and six month periods ending June 30, 2015 due to organic growth in our loan portfolio. Interest expense increased due to an increase in our borrowings, partially offset by a decrease in the rate on such borrowings. Our average interest bearing deposits decreased for the three month period ending June 30, 2015, offsetting an increase on the rate paid on these deposits. The average balance and average rate increased on our interest bearing deposits for the six month period ending June 30, 2015.

The provision for loan losses decreased for the three and six month periods ending June 30, 2015 compared to the same periods last year due. The decreases are the result of a provision for $1.4 million that was recognized during the second quarter last year for one commercial loan that was sold at foreclosure during the third quarter of last year, in addition to continued improvements in asset quality, as noted above.

Non-interest income decreased for the three month period ending June 30, 2015 compared to the same period of 2014 primarily as a result of decreases of $279 thousand in other fees and commissions, $126 thousand on gain on sale of investment securities and $52 thousand in service charges on deposit accounts, offsetting the increase of $149 thousand in earnings on marketable loans. Other fees and commissions decreased primarily due to recoveries of $125 thousand on loans that were previously charged-off prior to the merger with WSB Holdings, Inc. that were recognized in 2014. Other fees and commissions also included letter of credit fees of approximately $80 thousand received during the 2014 quarter. The decrease on the gain on the sale of investment securities is the result of re-positioning the investment portfolio during the second quarter of 2014. Service charges on deposit accounts decreased as a result of lower overdraft and ATM fees compared to the same three month period last year. The residential mortgage division increased the gain on sale of loans due to the gains recorded on the sale of $30.6 million in residential mortgage loans sold in the secondary market compared to $12.9 million for the same three month period last year. Non-interest income increased for the six month period ending June 30, 2015 compared to the same six months last year. The increase is primarily the result of a $656 thousand increase in earnings on marketable loans, offsetting decreases of $261 thousand in other fees and commissions and $88 thousand in service charges on deposit accounts.

Non-interest expenses increased $342 thousand for the three month period ending June 30, 2015 compared to the same period of 2014 primarily as a result of increases in salaries and benefits and losses on the sale of other real estate owned, partially offset by a decrease in occupancy and equipment and other real estate owned expenses. Salaries and benefits increased approximately $158 thousand due to additional information technology and risk management personnel added to enhance our operations due to the increasingly complex compliance and regulatory environment. Occupancy and equipment expenses decreased as a result of the previously-announced branch closings during 2014. Losses on the sale of one other real estate owned property during the three months ended June 30, 2015 resulted in a net loss of $9 thousand compared to a net gain of $79 thousand on the sale of three properties for the comparable period last year. Other non-interest expenses include outsourced services which will be transitioned and administered by our information technology and risk management personnel which will be more cost effective and allow for enhanced internal monitoring.

Non-interest expenses decreased $3 thousand for the six month period ending June 30, 2015 compared to the same six month period last year. Salaries and benefits decreased due to severance payments in the 2014 period that were associated with merger related staffing reductions. Occupancy and equipment expenses decreased for the six month period as a result of the closure of four of our branches at December 31, 2014. Losses on the sale of four other real estate owned properties during the six months ended June 30, 2015 resulted in a net loss of $144 thousand compared to a net gain of $282 thousand on the sale of six properties for the comparable six month period last year. Data processing costs increased due to enhancements in our data processing environment. FDIC insurance increased as a result of an increase in our assets and our deposit base.

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 19 branches located in its primary market area of suburban Maryland (Washington, D.C. suburbs and Southern Maryland) counties of Anne Arundel, Calvert, Charles, Prince George's and St. Mary's. It also targets customers throughout the greater Washington, D.C. metropolitan area.

The statement in this press release that "Our goal is to continue to build our loan and deposit portfolios while maintaining asset quality and improving operating efficiency," constitutes a "forward-looking statement" 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. Actual results could differ materially from those currently anticipated due to a number of factors, including, but not limited to, deterioration in economic conditions or a slowdown in the recovery in our target markets or nationally, sustained high levels of or increases in the unemployment rate in our target markets, the actions of our competitors and our ability to successfully compete, in particular in new market areas, and changes in laws impacting our ability to collect on outstanding loans or otherwise negatively impact our business, including regulations implemented pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in July 2010. 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. & Subsidiaries
Consolidated Balance Sheets
June 30,
2015
March 31,
2015
December 31,
2014 (1)
September 30,
2014
June 30,
2014
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash and due from banks $ 40,494,305 $ 37,061,793 $ 23,572,613 $ 42,266,194 $ 29,887,334
Interest bearing accounts 1,034,085 1,080,570 1,230,864 30,396 30,389
Federal funds sold 331,178 624,888 601,259 533,612 304,246
Total cash and cash equivalents 41,859,568 38,767,251 25,404,736 42,830,202 30,221,969
Investment securities available for sale 151,179,573 158,380,719 161,680,198 163,535,833 155,706,684
Loans held for sale 6,361,652 8,692,297 4,548,106 5,735,282 4,074,911
Loans held for invesment, less allowance for loan losses of $4,435,913 and $4,281,835 for June 30, 2015 and December 31, 2014. 1,008,618,046 963,706,538 926,573,488 883,905,233 889,524,786
Equity securities at cost 3,565,596 3,353,096 5,811,697 4,304,197 4,304,196
Premises and equipment 33,786,623 33,874,131 34,300,375 34,366,258 34,604,271
Accrued interest receivable 3,341,570 3,172,615 3,218,428 3,002,457 2,978,470
Deferred income taxes 13,108,799 12,506,347 16,106,498 19,843,857 19,850,224
Current income taxes receivable 1,198,299 1,312,872 -- -- --
Bank owned life insurance 31,856,947 31,643,001 31,429,747 31,214,396 31,000,380
Other real estate owned 1,215,690 1,600,015 2,451,920 2,699,846 4,627,465
Goodwill 7,793,665 7,793,665 7,793,665 7,793,665 7,793,665
Core deposit intangible 4,016,913 4,210,679 4,420,796 4,633,766 4,846,737
Other assets 4,127,881 6,087,688 3,779,350 4,128,206 3,732,934
Total assets $ 1,312,030,822 $ 1,275,100,914 $ 1,227,519,004 $ 1,207,993,198 $ 1,193,266,692
Deposits
Non-interest bearing $ 275,953,182 $ 269,733,047 $ 260,913,521 $ 247,291,192 $ 237,614,952
Interest bearing 808,460,674 781,718,574 754,825,885 772,344,384 771,801,936
Total deposits 1,084,413,856 1,051,451,621 1,015,739,406 1,019,635,576 1,009,416,888
Short term borrowings 76,722,442 71,236,281 61,002,889 35,558,734 35,769,108
Long term borrowings 5,931,298 5,958,485 5,987,283 6,017,844 6,043,715
Accrued interest payable 322,926 284,444 266,023 241,740 229,939
Supplemental executive retirement plan 5,222,669 5,162,732 5,095,141 5,069,745 5,003,784
Income taxes payable -- -- 485,435 3,406,234 2,376,461
Other liabilities 3,457,441 3,420,900 3,416,190 4,557,087 2,252,083
Total liabilities 1,176,070,632 1,137,514,463 1,091,992,367 1,074,486,960 1,061,091,978
Stockholders' equity
Common stock 105,745 107,551 108,110 107,864 107,854
Additional paid-in capital 101,500,434 104,313,092 105,235,646 104,900,904 104,820,171
Retained earnings 34,353,501 32,281,404 30,067,798 28,826,765 27,621,537
Accumulated other comprehensive income (loss) (253,879) 630,791 (147,250) (589,650) (639,502)
Total Old Line Bancshares, Inc. stockholders' equity 135,705,801 137,332,838 135,264,304 133,245,883 131,910,060
Non-controlling interest 254,389 253,613 262,333 260,355 264,654
Total stockholders' equity 135,960,190 137,586,451 135,526,637 133,506,238 132,174,714
Total liabilities and stockholders' equity $ 1,312,030,822 $ 1,275,100,914 $ 1,227,519,004 $ 1,207,993,198 $ 1,193,266,692
Shares of basic common stock outstanding 10,574,439 10,755,017 10,810,930 10,786,370 10,785,370
(1) Financial information at December 31, 2014 has been derived from audited financial statements.
Old Line Bancshares, Inc. & Subsidiaries
Consolidated Statements of Income
Three Months
Ended
June 30,
Three Months
Ended
March 31,
Three Months
Ended
December 31,
Three Months
Ended
September 30,
Three Months
Ended
June 30,
Six Months
Ended
June 30,
Six Months
Ended
June 30,
2015 2015 2014 (1) 2014 2014 2015 2014
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest income
Loans, including fees $ 11,516,860 $ 11,621,493 $ 10,556,729 $ 10,232,684 $ 10,599,999 $ 23,138,353 $ 20,933,971
Investment securities and other 835,594 886,084 939,602 885,324 1,017,039 1,721,678 2,054,937
Total interest income 12,352,454 12,507,577 11,496,331 11,118,008 11,617,038 24,860,031 22,988,908
Interest expense
Deposits 1,021,560 910,957 799,716 850,964 856,639 1,932,517 1,750,942
Borrowed funds 159,707 134,716 119,214 111,693 148,918 294,423 267,194
Total interest expense 1,181,267 1,045,673 918,930 962,657 1,005,557 2,226,940 2,018,136
Net interest income 11,171,187 11,461,904 10,577,401 10,155,351 10,611,481 22,633,091 20,970,772
Provision for loan losses 85,658 561,731 458,114 555,134 1,544,280 647,389 1,814,049
Net interest income after provision for loan losses 11,085,529 10,900,173 10,119,287 9,600,217 9,067,201 21,985,702 19,156,723
Non-interest income
Service charges on deposit accounts 441,382 415,202 475,120 483,865 493,482 856,584 945,078
Gain on sales or calls of investment securities 3,924 60,694 -- -- 129,911 64,618 129,911
Gain on sale of stock -- -- -- -- -- -- 96,993
Earnings on bank owned life insurance 249,421 248,384 249,967 248,259 246,371 497,805 489,978
Gains (losses) on disposal of assets -- 19,975 (48,051) -- 17,919 19,975 114,912
Earnings on marketable loans 484,635 563,881 290,269 129,498 335,444 1,048,516 392,338
Other fees and commissions 325,028 485,299 395,953 400,713 603,787 810,327 1,071,685
Total non-interest income 1,504,390 1,793,435 1,363,258 1,262,335 1,826,914 3,297,825 3,240,895
Non-interest expense
Salaries & employee benefits 4,331,572 4,178,896 4,274,962 4,559,711 4,010,187 8,510,468 8,906,286
Occupancy & Equipment 1,338,660 1,399,877 1,878,052 1,367,808 1,436,564 2,738,537 3,022,735
Data processing 367,190 352,060 352,956 368,717 312,042 719,250 619,202
Merger and integration -- -- -- -- -- -- 29,167
Core deposit amortization 193,766 210,117 212,970 212,970 212,214 403,883 440,764
(Gains)losses on sales of other real estate owned 9,169 134,754 (155,148) (260,533) (79,127) 143,923 (282,195)
OREO expense 75,552 120,201 199,094 159,238 112,659 195,753 195,725
Other operating 2,477,041 2,257,235 2,257,866 2,078,155 2,446,147 4,734,276 4,517,401
Total non-interest expense 8,792,950 8,653,140 9,020,752 8,486,066 8,450,686 17,446,090 17,449,085
Income before income taxes 3,796,969 4,040,468 2,461,793 2,376,486 2,443,429 7,837,437 4,948,533
Income tax expense 1,195,273 1,295,035 679,154 636,239 687,973 2,490,308 1,378,711
Net income 2,601,696 2,745,433 1,782,639 1,740,247 1,755,456 5,347,129 3,569,822
Less: Net income (loss) attributable to the noncontrolling interest 776 (8,720) 1,978 (4,299) (13,880) (7,944) (35,269)
Net income available to common stockholders $ 2,600,920 $ 2,754,153 $ 1,780,661 $ 1,744,546 $ 1,769,336 $ 5,355,073 $ 3,605,091
Earnings per basic share $ 0.25 $ 0.25 $ 0.17 $ 0.16 $ 0.16 $ 0.50 $ 0.33
Earnings per diluted share $ 0.24 $ 0.25 $ 0.16 $ 0.16 $ 0.16 $ 0.49 $ 0.33
Dividend per common share $ 0.05 $ 0.05 $ 0.05 $ 0.05 $ 0.04 $ 0.10 $ 0.08
Average number of basic shares 10,617,225 10,807,366 10,792,544 10,785,881 10,785,370 10,711,771 10,782,770
Average number of dilutive shares 10,759,628 10,899,030 10,941,002 10,921,555 10,948,368 10,847,352 10,944,981
(1) Financial information at December 31, 2014 has been derived from audited financial statements.
Old Line Bancshares, Inc. & Subsidiaries
Average Balances, Interest and Yields
6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014
Average
Balance
Yield Average
Balance
Yield Average
Balance
Yield Average
Balance
Yield Average
Balance
Yield
Assets:
Int. Bearing Deposits $ 914,076 0.08% $ 593,602 0.12% $ 2,902,672 0.20% $ 3,896,273 0.17% $ 4,024,265 0.17%
Investment Securities (2) 161,858,721 2.56% 164,560,281 2.70% 168,069,134 2.40% 159,259,044 2.94% 170,389,632 3.00%
Loans 1,002,896,056 4.70% 954,873,037 5.02% 905,241,954 4.78% 897,381,372 4.57% 865,944,038 4.99%
Allowance for Loan Losses (4,576,511) (4,498,086) (2,570,097) (6,422,492) (5,290,130)
Total Loans Net of allowance 998,319,545 4.72% 950,374,951 5.04% 902,671,857 4.79% 890,958,880 4.60% 860,653,908 5.02%
Total interest-earning assets 1,161,092,342 4.42% 1,115,528,834 4.70% 1,073,643,663 4.42% 1,054,114,197 4.33% 1,035,067,805 4.67%
Noninterest bearing cash 37,463,216 34,422,919 38,925,730 42,071,667 39,297,001
Other Assets 99,548,767 102,782,917 107,033,944 109,199,887 109,464,228
Total Assets $ 1,298,104,325 $ 1,252,734,670 $ 1,219,603,337 $ 1,205,385,751 $ 1,183,829,034
Liabilities and Stockholders' Equity
Interest-bearing Deposits $ 765,327,795 0.54% $ 772,838,785 0.48% $ 767,241,928 0.41% $ 776,032,831 0.44% $ 768,879,677 0.45%
Borrowed Funds 117,595,112 0.54% 72,721,100 0.75% 50,442,530 0.94% 39,031,131 1.14% 41,102,469 1.45%
Total interest-bearing liabilities 882,922,907 0.54% 845,559,885 0.50% 817,684,458 0.45% 815,063,962 0.47% 809,982,146 0.50%
Noninterest bearing deposits 269,427,296 262,926,103 255,002,560 247,346,466 234,063,213
1,152,350,203 1,108,485,988 1,072,687,018 1,062,410,428 1,044,045,359
Other Liabilities 7,866,395 9,009,800 11,057,397 10,072,582 9,603,037
Noncontrolling Interest 252,293 258,240 261,545 262,435 270,521
Stockholder's Equity 137,635,434 134,980,642 135,597,377 132,640,306 129,910,117
Total Liabilities and Stockholder's Equity $ 1,298,104,325 $ 1,252,734,670 $ 1,219,603,337 $ 1,205,385,751 $ 1,183,829,034
Net interest spread 3.88% 4.20% 3.97% 3.86% 4.17%
Net interest income and Net interest margin(1) $ 11,602,656 4.01% $ 11,891,497 4.32% $ 11,034,119 4.08% $ 10,545,444 3.97% $ 11,047,069 4.28%
(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 June 30, 2015 and 2014. Fair value accretion for the current quarter and prior four quarter are as follows:

6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014
Fair Value
Accretion
Dollars
% Impact on
Net Interest
Margin
Fair Value
Accretion
Dollars
% Impact on
Net Interest
Margin
Fair Value
Accretion
Dollars
% Impact on
Net Interest
Margin
Fair Value
Accretion
Dollars
% Impact on
Net Interest
Margin
Fair Value
Accretion
Dollars
% Impact on
Net Interest
Margin
Commercial loans (1) $ (3,114) (0.00)% $ 8,690 0.00% $ (969) (0.00)% $ (16,219) (0.01)% $ (3,509) (0.00)%
Mortgage loans (1) 35,386 0.01 589,266 0.21 24,779 0.01 (278,619) (0.10) 344,403 0.13
Consumer loans 4,298 0.00 11,390 0.00 6,686 0.00 4,209 0.00 6,338 0.00
Interest bearing deposits 37,677 0.01 37,263 0.01 110,503 0.04 131,837 0.05 162,452 0.06
Total Fair Value Accretion (Amortization) $ 74,247 0.02% $ 646,609 0.22% $ 140,999 0.05% $ (158,792) (0.06)% $ 509,684 0.19%
(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:

6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014
Net Interest
Income
Yield Net Interest
Income
Yield Net Interest
Income
Yield Net Interest
Income
Yield Net Interest
Income
Yield
GAAP net interest income $ 11,171,187 3.86% $ 11,461,904 4.17% $ 10,577,401 3.91% $ 10,155,351 3.82% $ 10,611,481 4.11%
Tax equivalent adjustment
Federal funds sold 1 0.00 1 0.00 1 0.00 -- -- -- --
Investment securities 195,785 0.07 200,498 0.07 343,280 0.13 294,770 0.11 258,980 0.10
Loans 235,683 0.08 229,094 0.08 113,437 0.04 95,323 0.04 176,608 0.07
Total tax equivalent adjustment 431,469 0.15 429,593 0.15 456,718 0.17 390,093 0.15 435,588 0.17
Tax equivalent interest yield $ 11,602,656 4.01% $ 11,891,497 4.32% $ 11,034,119 4.08% $ 10,545,444 3.97% $ 11,047,069 4.28%
Old Line Bancshares, Inc. & Subsidiaries
Selected Loan Information
(Dollars in thousands)
June 30,
2015
March 31,
2015
December 31,
2014
September 30,
2014
June 30,
2014
Acquired Loans(1)
Period End Loan Balance $ 164,300 $ 171,527 $ 173,659 $ 186,896 $ 203,201
Deferred Costs -- -- 10 9 11
Accruing 161,495 165,956 167,704 183,094 199,859
Non-accrual(2) 2,546 2,518 1,958 1,291 593
Accruing 30-89 days past due 2,102 3,053 3,687 1,569 1,478
Accruing 90 or more days past due -- -- 310 942 1,271
Otther real estate owned 741 1,125 1,977 2,225 3,826
Net charge offs (recoveries) 320 (16) 52 316 106
Legacy Loans(3)
Period End Loan Balance $ 847,499 $ 795,532 $ 749,968 $ 699,833 $ 691,619
Deferred Costs 1,255 1,283 1,283 1,048 1,039
Accruing 845,391 793,576 746,376 692,854 681,592
Non-accrual 853 1,105 3,249 3,263 7,176
Accruing 30-89 days past due 1,199 851 343 3,411 2,177
Accruing 90 or more days past due -- -- -- 305 674
Other real estate owned 475 475 475 475 802
Net charge offs (recoveries) (34) 224 (4) 2,691 (4)
Allowance for loan losses as % of held for investment loans 0.44% 0.48% 0.46% 0.44% 0.71%
Allowance for loan losses as % of legacy held for investment loans 0.52% 0.59% 0.57% 0.55% 0.80%
Allowance for loan losses as % of acquired held for investment loans 2.70% 2.60% 2.38% 2.07% 3.11%
Total non-performing loans as a % of held for investment loans 0.49% 0.37% 0.56% 0.96% 1.08%
Total non-performing assets as a % of total assets 0.38% 0.44% 0.65% 0.70% 1.20%
(1) Acquired loans represent all loans acquired on April 1, 2011 from MB&T and on May 10, 2013 from WSB. 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 and May 10, 2013.

CONTACT: OLD LINE BANCSHARES, INC. ELISE HUBBARD CHIEF FINANCIAL OFFICER (301) 430-2560Source:Old Line Bancshares, Inc.