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Press Release

Old Line Bancshares, Inc. Reports Net Income of $9.2 Million for the Quarter Ended September 30, 2019

Company Release - 10/23/2019 4:15 PM ET

BOWIE, Md., Oct. 23, 2019 (GLOBE NEWSWIRE) -- Old Line Bancshares, Inc. (“Old Line Bancshares” or the “Company”) (Nasdaq: OLBK), the parent company of Old Line Bank (the “Bank”), reports net income increased $919 thousand, or 11.12%, to $9.2 million for the three months ended September 30, 2019, compared to $8.3 million for the three-month period ended September 30, 2018.  Earnings were $0.54 per basic and diluted common share for the three months ended September 30, 2019, compared to $0.49 per basic and $0.48 per diluted common share for the three months ended September 30, 2018.  The increase in net income for the third quarter of 2019 as compared to the same 2018 period is primarily the result of a $1.8 million decrease in non-interest expenses and a $1.3 million increase in non-interest income, partially offset by a $1.3 million decrease in net interest income.  Net income for the 2018 period included $2.3 million ($1.5 million net of taxes) of merger-related expenses (or $0.09 per basic and diluted common share) in connection with the Company’s acquisition of Bay Bancorp, Inc. (“BYBK”), the former parent company of Bay Bank, FSB (“Bay”), in April 2018. 

Net income was $26.6 million for the nine months ended September 30, 2019, compared to $17.1 million for the same period last year, an increase of $9.5 million, or 55.96%.  Earnings were $1.56 per basic and $1.55 per diluted common share for the nine months ended September 30, 2019, compared to $1.12 per basic and $1.10 per diluted common share for the same period last year.  The increase in net income is primarily the result of increases of $4.5 million in net interest income and $2.3 million in non-interest income and a decrease of $4.9 million in non-interest expenses.  Included in net income for the 2018 period was $9.4 million ($7.6 million net of taxes, or $0.50 per basic and diluted common share) for merger-related expenses associated with the acquisition of BYBK.  

Net loans held for investment at September 30, 2019 increased $64.7 million compared to December 31, 2018 and $89.3 million compared to September 30, 2018.  The increase in loans was a result of organic loan growth of $184.5 million and $243.0 million, respectively, partially offset by $120.0 million and $153.5 million, respectively, in paydowns on previously-acquired loans since December 31, 2018 and September 30, 2018.         

Total deposits at September 30, 2019 increased by $117.3 million, or 5.11%, since December 31, 2018 and $171.1 million, or 7.63%, compared to September 30, 2018, as a result of organic growth derived from our greater market presence, including the locations we have added as a result of our recent acquisitions.   

Total assets were $3.1 billion at September 30, 2019, increasing $146.8 million from $2.95 billion at December 31, 2018 and $165.8 million from $2.93 billion at September 30, 2018.  In addition, the Company had net loans of approximately $2.5 billion and deposits of approximately $2.4 billion at September 30, 2019.

James W. Cornelsen, President and Chief Executive Officer of Old Line Bancshares, stated: “We had a strong quarter with organic loan growth of 5.40% and favorable earnings of $9.2 million.   The mortgage group increased originations by approximately $25 million providing solid results once again increasing income by approximately $579 thousand when compared to the same period last year.”  The upcoming merger with WesBanco (“WSBC)” continues to progress pending regulatory and stockholder approvals. We are excited about the opportunities this transaction will bring to our customers, community and employees.  We look forward to joining the company and are eager to work together to continue the tradition of community banking to our clients.”  

HIGHLIGHTS:

  • Average gross loans increased $49.9 million, or 2.08%, and $302.3 million, or 14.20%, respectively, to $2.4 billion for each of the three- and nine-month periods ended September 30, 2019, compared to $2.1 billion and $2.4 billion, respectively, during the three and nine months ended September 30, 2018.
     
  • Loans originated and sold in the secondary market were $120.5 million for the nine months ended September 30, 2019 compared to $77.1 million for the same nine-month period last year, resulting in an increase in income on marketable loans of $987 thousand compared to the same period last year. 

  • Total yield on interest-earning assets increased to 4.68% for the nine months ended September 30, 2019, compared to 4.60% for the same period last year.  Conversely, total yield on interest-earning assets decreased to 4.61% for the three-month period ended September 30, 2019, compared to 4.69% for the corresponding 2018 period.
  • Return on average assets (“ROAA”) and return on average equity (“ROAE”) were 1.19% and 9.24%, respectively, for the three months ended September 30, 2019, compared to ROAA and ROAE of 1.12% and 8.89%, respectively, for the third quarter of 2018. 
  • ROAA and ROAE were 1.17% and 9.14%, respectively, for the nine months ended September 30, 2019, compared to ROAA and ROAE of 0.87% and 7.31%, respectively, for the nine months ended September 30, 2018.

  • Total assets increased $146.8 million, or 4.98%, during the nine months ended September 30, 2019, primarily due to an increase of $64.7 million in loans held for investment, $48.8 million in our investment securities available for sale and the addition of $27.7 million for an operating lease right of use asset.           
  • Total deposits grew by $117.3 million, or 5.11%, since December 31, 2018 with $61.1 million of the growth occurring in non-interest bearing deposits.

  • We ended the third quarter of 2019 with a book value of $23.38 per common share and a tangible book value of $17.02 per common share compared to $21.77 and $15.39, respectively, at December 31, 2018.

  • We maintained appropriate levels of liquidity and by all regulatory measures remained “well capitalized.”

Results of Operations for the Three Months Ended September 30, 2019 Compared to September 30, 2018

Average interest-earning assets increased $102.3 million for the three-month period ended September 30, 2019 compared to the same period of 2018.  The average yield on such assets was 4.61% for the three months ended September 30, 2019 compared to 4.69% for the comparable 2018 period.  The increase in the average balance of our interest-earning assets was almost entirely due to increases in the average balance of our investment securities available for sale and our loans.  The decrease in the average yield was primarily the result of lower yields on our loans held for investment, partially offset by an increase in the yield on our investment securities available for sale.  Average interest-bearing liabilities increased $46.0 million for the three-month period ended September 30, 2019 compared to the same period of 2018 due to a $95 million increase in the average balance of our deposits, primarily as a result of deposit growth since September 30, 2018, partially offset by a $49 million decrease in the average balance of our borrowings.  The average rate paid on such liabilities increased to 1.56% for the three-month period ended September 30, 2019 compared to 1.20% for the same period in 2018 due to higher rates paid on our deposits and borrowings.

The net interest margin for the three months ended September 30, 2019 decreased to 3.48% from 3.81% for the three months ended September 30, 2018.  The net interest margin decreased due to higher interest rates on both our deposits and our borrowed funds and a decrease in the yield on our interest-earning assets.  The net interest margin during the third quarter of 2019 was positively affected by the amount of accretion on acquired loans.  Accretion decreased due to a lower amount of early payoffs on acquired loans with fair value marks during the three months ended September 30, 2019 compared to the same period of 2018.  The fair value accretion/amortization is recorded on paydowns recognized during the quarter, which contributed 11 basis points for the three months ended September 30, 2019 compared to 14 basis points for the three months ended September 30, 2018.  

Net interest income decreased $1.3 million, or 5.37%, for the three months ended September 30, 2019 compared to the same period of 2018, as a result of a $1.9 million increase in interest expense, partially offset by a $593 thousand increase in interest income. Interest expense increased due to increases in both the average balance of and average interest rates on our deposits and borrowings, while interest income increased due to an increase in the average balance of our interest-earning assets, partially offset by a decrease in the average yield on such assets. 

Non-interest income increased $1.3 million, or 44.64%, for the three-month period ended September 30, 2019 compared to the same period of 2018, primarily as a result of increases of $544 thousand in income from gain on sales or calls of investment securities, which resulted from the calls of approximately $29.8 million of our callable agencies, and $579 thousand in income on marketable loans as a result of a $25 million increase in the volume of originations in loans held for sale compared to the three months ended September 30, 2018, which resulted in an increase in the aggregate amount of premiums we received on such sales.
                 
Non-interest expense decreased $1.8 million, or 10.97%, for the three-month period ended September 30, 2019 compared to the same period of 2018, primarily due to our having no merger and integration expenses during the 2019 period compared to $2.3 million in merger and integration expenses during the three months ended September 30, 2018, partially offset by increases in salaries and employee benefits and data processing. 

Results of Operations for the Nine Months Ended September 30, 2019 Compared to September 30, 2018

Average interest-earning assets increased $356.6 million for the nine months ended September 30, 2019 compared to the same period of 2018.  The average yield on such assets was 4.68% for the nine months ended September 30, 2019 compared to 4.60% for the comparable 2018 period.  The increase in the average balance of our interest-earning assets was due to an increase in the average balance of our loans, resulting from both organic growth and the loans that we acquired in the BYBK acquisition, as well as an increase in the average balance of our investment securities available for sale.  The increase in the average yield was the result of higher yields on our investment securities available for sale and on our loans held for investment.  Average interest-bearing liabilities increased $280.8 million for the nine-month period ended September 30, 2019 compared to the same period of 2018, primarily as a result of the deposits we acquired in the BYBK acquisition.  The average rate paid on such liabilities increased to 1.57% for the nine-month period ended September 30, 2019 compared to 1.11% for the same period in 2018 due to higher rates paid on our deposits and borrowings.

The net interest margin for the nine months ended September 30, 2019 decreased to 3.52% from 3.79% for the nine months ended September 30, 2018.  The net interest margin decreased due to higher interest rates on both our deposits and our borrowed funds, partially offset by an increase in the yield on our interest-earning assets.  The net interest margin during the nine-months ended September 30, 2019 was positively affected by the amount of accretion on acquired loans.  Accretion increased slightly due to a higher amount of early payoffs on acquired loans with fair value marks during the nine months ended September 30, 2019 compared to the same period of 2018.  The fair value accretion/amortization is recorded on paydowns recognized, which contributed 13 basis points for each of the nine months ended September 30, 2019 and 2018.  

Net interest income increased $4.5 million, or 6.76%, for the nine months ended September 30, 2019 compared to the same period of 2018, primarily due to an increase in loan interest income resulting from increases in both the average balance of and average yield on loans, partially offset by an increase in interest expense.  Interest expense increased due to increases in both the average balance of and average interest rates on our deposits and borrowings.   

Non-interest income increased $2.3 million, or 29.40%, for the nine-month period ended September 30, 2019 compared to the same period of 2018, primarily as a result of increases of $540 thousand in income from the POS sponsorship program, which was not in place during the first quarter of 2018, $987 thousand in income on marketable loans as a result of a $43.0 million increase in the volume of originations in loans held for sale compared to the nine months ended September 30, 2018, which resulted in an increase in the aggregate amount of premiums we received on such sales, and $560 thousand in gain on sales or calls of investment securities as a result of the call of approximately $49.2 million of our callable agencies during the period, $32.8 million of which had discounts remaining.  

Non-interest expense decreased $4.9 million, or 10.09%, for the nine-month period ended September 30, 2019 compared to the same period of 2018, primarily as a result of our having no merger and integration expenses during the nine months ended September 30, 2019 compared to $9.4 million in merger and integration expenses during the same period last year in connection with the BYBK acquisition.  Partially offsetting the lack of merger and integration expenses were increases in salaries and employee benefits, occupancy and equipment, core deposit amortization, data processing, and other operating expenses.  Salaries and employee benefits increased $2.3 million and occupancy and equipment expenses increased $613 thousand primarily as a result of the inclusion of expenses related to the staff and the branches, respectively, that we acquired in the BYBK acquisition for the entire nine-month period of 2019 compared to just approximately five and a half months of such expenses for the comparable 2018 period.  Core deposit amortization increased $445 thousand as a result of the higher amortization of premiums from deposits that we acquired in the BYBK acquisition.  Data processing expenses increased as a result of additional customer transactions primarily due to the additional branches, and therefore additional customers, resulting from our acquisition of BYBK, which were included for the full 2019 period but for only five and a half months for the 2018 period.  Other operating expenses increased $925 thousand due to increases in general operating costs, such as marketing and advertising, sponsorships and donations, loan expenses, software expense, and telephone expense.

Old Line Bancshares 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.  The Bank has 37 branches located in its primary market area of the suburban Maryland (Washington, D.C. suburbs, Southern Maryland and Baltimore suburbs) counties of Anne Arundel, Baltimore, Calvert, Carroll, Charles, Harford, Howard, Frederick, Montgomery, Prince George's and St. Mary's, and Baltimore City.  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 these non-GAAP financial measures, and 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.


      
 Old Line Bancshares, Inc. & Subsidiaries 
 Consolidated Balance Sheets 
      
 September 30,
2019
June 30,
2019
March 31,
2019
December 31,
2018 (1)
September 30,
2018
 (Unaudited)(Unaudited)(Unaudited) (Unaudited)
Cash and due from banks$44,987,316$56,392,900$49,619,806 $41,495,763 $45,774,719 
Interest bearing accounts1,625,0291,832,2092,107,845  2,051,273 3,522,685 
Federal funds sold388,971781,033961,329  953,582 1,008,801 
Total cash and cash equivalents47,001,31659,006,14252,688,980 44,500,618 50,306,205 
Investment securities available for sale268,534,675295,969,550307,034,351 219,705,762 216,358,059 
Loans held for sale22,534,09715,443,3409,632,523 11,564,993 8,829,777 
Loans held for investment, less allowance for loan losses of $8,001,352 and $7,471,023 for September 30, 2019 and December 31, 20182,473,922,0522,420,437,1442,417,186,160 2,409,227,698 2,384,579,814 
Equity securities at cost10,886,80311,524,30113,863,550 11,150,750 13,063,250 
Premises and equipment42,073,24042,326,70342,561,705 42,624,787 43,060,727 
Accrued interest receivable7,960,5749,131,9848,607,100 7,958,511 8,072,826 
Bank owned life insurance69,167,14068,750,10668,333,419 67,920,021 67,490,846 
Annuity plan6,226,7276,293,5716,269,638 6,268,426 6,298,627 
Other real estate owned1,091,634882,510882,510 882,510 1,469,166 
Goodwill94,668,45594,668,45594,668,455 94,668,455 94,403,635 
Core deposit intangible13,400,60114,054,64714,704,408 15,362,232 16,024,950 
Other assets39,370,63037,124,39240,813,248 18,172,332 21,060,315 
Total assets$3,096,837,944$3,075,612,845$3,077,246,047 $2,950,007,095 $2,931,018,197 
        
Deposits       
Non-interest bearing$620,136,296$620,754,339$579,962,005 $559,059,672 $581,339,177 
Interest bearing1,793,209,4941,763,727,0191,755,472,767  1,736,989,227 1,660,902,293 
Total deposits2,413,345,7902,384,481,3582,335,434,772  2,296,048,899 2,242,241,470 
Short term borrowings204,378,672221,654,780282,141,546  228,184,856 272,534,890 
Long term borrowings38,569,34338,503,03238,437,015  38,371,291 38,304,981 
Accrued interest payable2,452,8573,040,2192,460,829  2,844,715 1,643,666 
Supplemental executive retirement plan6,115,3726,180,6736,089,246  5,997,819 6,123,518 
Other liabilities34,615,06332,441,27432,559,241  7,788,981 9,989,481 
Total liabilities2,699,477,0972,686,301,3362,697,122,649  2,579,236,561 2,570,838,006 
           
Stockholders' equity          
Common stock169,991169,991170,516  170,311 169,889 
Additional paid-in capital292,993,861292,653,644293,590,357  293,501,107 293,139,653 
Retained earnings103,100,16795,956,28689,084,561  82,628,356 74,167,389 
Accumulated other comprehensive income (loss)1,096,828531,588(2,722,036
) (5,529,240)(7,296,740
)
Total stockholders' equity397,360,847389,311,509380,123,398  370,770,534 360,180,191 
Total liabilities and stockholders' equity$3,096,837,944$3,075,612,845$3,077,246,047 $2,950,007,095 $2,931,018,197 
Shares of basic common stock outstanding16,999,14616,999,14617,051,569  17,031,052 16,988,883 
        
(1) Financial information at December 31, 2018 has been derived from audited financial statements.
 

 

Old Line Bancshares, Inc. & Subsidiaries 
Consolidated Statements of Income
 
 Three Months
Ended
September 30,
Three Months
Ended
June 30,
Three Months
Ended
March 31,
Three Months
Ended
December 31,
 Three Months
Ended
September 30,
 Nine Months
Ended
September 30,
Nine Months
Ended
September 30,
 
 2019201920192018 (1) 2018 20192018 
 (Unaudited)(Unaudited)(Unaudited)  (Unaudited) (Unaudited)(Unaudited) 
Interest income          
Loans, including fees$29,125,029$29,125,229$28,850,931$29,284,012 $29,056,814 $87,101,189$75,206,303 
Investment securities and other2,221,9052,577,7232,059,3121,743,737 1,696,510 6,858,9405,040,078 
Total interest income31,346,93431,702,95230,910,24331,027,749 30,753,324 93,960,12980,246,381 
Interest expense          
Deposits6,119,9066,103,8125,616,5155,067,752 4,098,787 17,840,2339,551,755 
Borrowed funds1,678,0932,130,6301,982,7131,891,413 1,768,532 5,791,4364,817,613 
Total interest expense7,797,9998,234,4427,599,2286,959,165 5,867,319 23,631,66914,369,368 
Net interest income23,548,93523,468,51023,311,01524,068,584 24,886,005 70,328,46065,877,013 
Provision for loan losses456,00072,583414,175613,672 307,870 942,7581,235,023 
Net interest income after provision for loan losses23,092,93523,395,92722,896,84023,454,912 24,578,135 69,385,70264,641,990 
Non-interest income          
Service charges on deposit accounts709,302712,623627,260745,646 728,550 2,049,1852,028,013 
POS sponsorship program688,188636,756600,061641,063 711,577 1,925,0051,385,079 
Gain on sales or calls of investment securities544,25915,927-- - 560,186- 
Earnings on bank owned life insurance528,512524,753494,180531,604 520,785 1,547,4451,274,777 
Gains (losses) on disposal of assets-32,599-- (1,100)32,59913,266 
Loss on write down of stock---- (91,498)-(152,496)
Gain on sale of loans---556,358 - -- 
Income on marketable loans990,474841,843496,843479,824 411,850 2,329,1601,342,201 
Other fees and commissions596,762493,271544,4351,238,049 525,171 1,634,4681,897,567 
Total non-interest income4,057,4973,257,7722,762,7794,192,544 2,805,335 10,078,0487,788,407 
Non-interest expense          
Salaries & employee benefits7,717,3527,600,7717,133,5836,743,042 7,491,736 22,451,70620,178,521 
Occupancy & equipment2,337,1242,396,0212,452,7732,339,115 2,349,691 7,185,9186,572,733 
Data processing782,593760,727727,183699,769 659,926 2,270,5031,971,747 
Merger and integration---- 2,282,705 -9,404,507 
Core deposit amortization654,046649,761657,824662,718 663,685 1,961,6311,516,734 
(Gains) losses on sales of other real estate owned---(27,801)26,266 -80,738 
OREO expense59,27241,83325,66677,142 (99,957)126,771113,032 
Other operating3,284,0313,282,6053,251,6843,465,550 3,288,286 9,818,3208,893,691 
Total non-interest expense14,834,41814,731,71814,248,71313,959,535 16,662,338 43,814,84948,731,703 
           
Income before income taxes12,316,01411,921,98111,410,90613,687,921 10,721,132 35,648,90123,698,694 
Income tax expense3,131,7853,009,9012,906,7323,526,073 2,456,303 9,048,4186,642,850 
Net income $9,184,229$8,912,080$8,504,174$10,161,848 $8,264,829 $26,600,483$17,055,844 
Earnings per basic share$0.54$0.52$0.50$0.60 $0.49 $1.56$1.12 
Earnings per diluted share$0.54$0.52$0.50$0.59 $0.48 $1.55$1.10 
Adjusted per basic share (non-GAAP)$-$-$-$- $0.58 $-$1.62 
Adjusted per diluted share (non-GAAP)$-$-$-$- $0.57 $-$1.60 
Dividend per common share$0.12$0.12$0.12$0.10 $0.10 $0.36$0.28 
Average number of basic shares16,999,14617,025,72817,039,96117,008,504 16,988,883 17,021,35915,277,219 
Average number of dilutive shares17,129,18117,148,95817,170,50717,181,820 17,187,837 17,146,72315,485,452 
Return on Average Assets1.19%1.17%1.16%1.37% 1.12% 1.17%0.87% 
Return on Average Equity9.24%9.20%8.99%10.70% 8.89% 9.14%7.31% 
Operating Efficiency (2)53.74%55.12%54.65%49.39% 60.17% 54.49%66.15% 
           
(1) Financial information at December 31, 2018 has been derived from audited financial statements.
(2) Operating efficiency is derived by dividing non-interest expense by the total of net interest income and non-interest income.


Old Line Bancshares, Inc. & Subsidiaries
Quarterly Average Balances, Interest and Yields
 
 9/30/2019  6/30/2019  3/31/2019  12/31/2018  9/30/2018  
 Average
Balance
 Yield/
Rate
Average
Balance
 Yield/
Rate
Average
Balance
 Yield/
Rate
Average
Balance
 Yield/
Rate
Average
Balance
 Yield/
Rate
Assets:               
Int. Bearing Deposits $  2,322,594 1.08%$  2,884,435 1.48%$  2,791,150 2.37%$  4,130,258 2.96%$  4,765,138 1.52%
Investment Securities (2)289,610,460 3.28%320,939,698 3.46%262,912,937 3.43%236,018,603 3.18%233,633,128 3.09%
Loans2,446,911,180 4.76%2,428,047,580 4.85%2,418,266,901 4.87%2,414,758,155 4.84%2,397,054,094 4.84%
Allowance for Loan Losses (8,018,971)  (7,956,074)  (7,593,472)  (7,122,881)  (6,885,911) 
Total Loans Net of allowance2,438,892,209 4.77%2,420,091,506 4.86%2,410,673,429 4.89%2,407,635,274 4.86%2,390,168,183 4.85%
Total interest-earning assets2,730,825,263 4.61%2,743,915,639 4.69%2,676,377,516 4.74%2,647,784,135 4.70%2,628,566,449 4.69%
Noninterest bearing cash50,954,051  49,567,273  46,270,628  43,728,188  48,035,416  
Goodwill and Intangibles108,464,503  109,119,799  109,791,837  110,188,394  110,861,142  
Premises and Equipment68,481,420  68,532,182  44,403,507  42,902,372  43,626,501  
Other Assets94,581,576  95,371,009  99,169,559  101,812,816  103,995,121  
Total Assets $  3,053,306,813  $  3,066,505,902  $  2,976,013,047  $  2,946,415,905  $  2,935,084,629  
                
Liabilities and Stockholders' Equity               
                
Interest-bearing Deposits$  1,753,113,810 1.38%$  1,750,122,135 1.40%$  1,741,184,120 1.31%$  1,726,574,227 1.16%$  1,658,060,302 0.98%
Borrowed Funds234,165,450 2.84%290,305,725 2.94%268,178,852 3.00%255,083,457 2.94%283,169,572 2.48%
Total interest-bearing liabilities1,987,279,260 1.56%2,040,427,860 1.62%2,009,362,972 1.53%1,981,657,684 1.39%1,941,229,874 1.20%
Noninterest bearing deposits631,577,580  597,706,343  565,081,492  572,704,465  601,558,786  
 2,618,856,840  2,638,134,203  2,574,444,464  2,554,362,149  2,542,788,660  
                
Other Liabilities40,290,606  39,663,626  17,825,648  15,264,196  23,355,099  
Stockholder's Equity394,159,367  388,708,073  383,742,935  376,789,560  368,940,870  
Total Liabilities   and Stockholder's Equity$  3,053,306,813  $  3,066,505,902  $  2,976,013,047  $  2,946,415,905  $  2,935,084,629  
                
Net interest spread  3.05%  3.08%  3.21%  3.31%  3.49%

Net interest income and
 
Net interest margin(1)
$  23,944,631 3.48%$  23,876,743 3.49%$  23,679,819 3.59%$  24,412,499 3.66%$  25,227,247 3.81%
  
(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. 
(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 ended September 30, 2019 and 2018.    Fair value accretion for the current quarter and prior four quarters are as follows: 

 9/30/2019 6/30/2019 3/31/2019 12/31/2018 9/30/2018 
 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 $  116,166   0.02%$  166,941   0.02%$  44,430   0.01%$  140,822   0.02%$  113,378   0.02%
Mortgage loans  430,796   0.06   609,568   0.09   678,636   0.10   504,905   0.08   620,664   0.09 
Consumer loans  106,316   0.02   111,600   0.02   197,086   0.03   104,350   0.02   110,220   0.02 
Interest bearing deposits  64,630   0.01   56,762   0.01   54,947   0.01   61,038   0.01   70,157   0.01 
Total Fair Value Accretion $  717,908   0.11%$  944,871   0.14%$  975,099   0.15%$  811,115   0.13%$  914,419   0.14%
                     


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

 9/30/2019 6/30/2019 3/31/2019 12/31/2018   9/30/2018   
 Net Interest
Income
 Yield Net Interest
Income
 Yield Net Interest
Income
 Yield Net Interest
Income
 Yield Net Interest
Income
 Yield 
GAAP net interest income$  23,548,935 3.42%$  23,468,510 3.43%$  23,311,015 3.53%$  24,068,584 3.61%$  24,886,005 3.76%
Tax equivalent adjustment                    
Federal funds sold111 0.00 124 0.00 103 0.00 124 0.00 92 0.00 
Investment securities177,627 0.03 195,024 0.03 169,305 0.03 157,634 0.02 159,520 0.02 
Loans217,958 0.03 213,085 0.03 199,396 0.03 186,157 0.03 181,630 0.03 
Total tax equivalent adjustment395,696 0.06 408,233 0.06 368,804 0.06 343,915 0.05 341,242 0.05 
Tax equivalent interest yield$  23,944,631 3.48%$  23,876,743 3.49%$  23,679,819 3.59%$  24,412,499 3.66%$  25,227,247 3.81%
                     


Old Line Bancshares, Inc. & Subsidiaries
Selected Loan Information
(Dollars in thousands)
 
 September 30,
2019
June 30,
2019
 March 31,
2019
 December 31,
2018
September 30,
2018
 
         
Legacy Loans(1)        
Period End Loan Balance$  1,852,652$  1,757,773 $  1,704,913 $  1,668,118$  1,609,695 
Deferred Costs3,7423,554 3,457 3,0872,805 
Accruing1,841,0491,749,705 1,703,328 1,667,1791,608,808 
Non-accrual4,5541,581 1,585 939887 
Accruing 30-89 days past due6,9753,703 6,454 7,9886,352 
Accruing 90 or more days past due742,782 1,125 -1,785 
Allowance for loan losses7,7807,417 7,342 7,0056,699 
Other real estate owned-- - -- 
Net charge offs (recoveries)11 (4) (5)27 (1)
         
Acquired Loans(2)        
Period End Loan Balance$  625,529$  667,000 $  716,624 $  745,494$  779,060 
Accruing614,066656,854 712,932 741,777775,438 
Non-accrual(3)2,9753,421 3,692 3,7183,622 
Accruing 30-89 days past due7,6326,716 5,917 11,7968,120 
Accruing 90 or more days past due8559 151 243733 
Allowance for loan losses221473 466 466281 
Other real estate owned1,092883 883 8831,469 
Net charge offs (recoveries)334 (5)82 9633 
         
Allowance for loan losses as % of held for investment loans0.32%0.32% 0.32% 0.31%0.29% 
Allowance for loan losses as % of legacy held for investment loans0.43%0.45% 0.46% 0.45%0.42% 
Allowance for loan losses as % of acquired held for investment loans0.04%0.07% 0.06% 0.06%0.04% 
Total non-performing loans as a % of held for investment loans0.34%0.32% 0.27% 0.20%0.30% 
Total non-performing assets as a % of total assets0.31%0.28% 0.24% 0.20%0.29% 
         
(1) Legacy loans represent total loans excluding loans acquired on April 1, 2011, May 10, 2013, December 4, 2015, July 28, 2017 and April 13, 2018.
(2) Acquired loans represent all loans acquired on April 1, 2011 from Maryland Bank & Trust Company, N.A., on May 10, 2013 from The Washington Savings Bank, on December 4, 2015 from Regal Bank & Trust, on July 28, 2017 from Damascus Community Bank, and on April 13, 2018 from Bay.  We originally recorded these loans at fair value upon acquisition.
(3) These loans are loans that are considered non-accrual because they are not paying in conformance with the original contractual agreement.


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

Source: Old Line Bancshares, Inc.
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