BOWIE, Md., Jan. 27, 2016 (GLOBE NEWSWIRE) -- Old Line Bancshares, Inc. (“Company”) (NASDAQ:OLBK), the parent company of Old Line Bank, reports net income available to common stockholders of $2.0 million for the three months ended December 31, 2015, compared to $1.8 million for the three months ended December 31, 2014. Earnings were $0.19 per basic and diluted common share for the three months ended December 31, 2015, compared to $0.17 per basic and $0.16 per diluted common share for the same period in 2014. Net income included $1.4 million in merger-related expenses ($1.2 million net of taxes, or $0.11 per basic and diluted common share) in connection with the Company’s previously-announced acquisition of Regal Bancorp, Inc. (“Regal”), the parent company of Regal Bank & Trust (“Regal Bank”), through the merger of Regal with and into the Company effective December 4, 2015. Excluding the merger related expenses, which is a non-GAAP measure, earnings were $0.30 per basic and diluted share for the three months ending December 31, 2015.
Net income available to common stockholders was $10.5 million, or 46.82% increase, for the year ended December 31, 2015, compared to $7.1 million for the year ended December 31, 2014. Earnings were $0.98 per basic and $0.97 per diluted common share, respectively, for the year ended December 31, 2015 and $0.66 and $0.65, respectively, per basic and diluted common share in 2014. Net income included merger-related expenses of $1.4 million, ($1.2 million net of taxes, or $0.11 per basic and diluted common share). These merger-related expenses were primarily related to legal fees, investment banking fees, severance and charges associated with the termination of Regal Bank’s core data processing contract. Approximately $863 thousand of these fees was not tax deductible. Excluding the merger related expenses, which is a non-GAAP measure, earnings were $1.09 per basic and $1.08 per diluted share for the twelve months ending December 31, 2015.
Operating earnings, a non-GAAP measure, which exclude merger related-expenses related to the Regal acquisition amounting to $1.4 million, or $1.2 million net of tax, were $3.2 million and $11.6 million, respectively, for the three and twelve months ended December 31, 2015. Reconciliations of GAAP income to operating income, a non-GAAP measure, are contained as footnote (1) in a separate chart in the financial highlights section of this press release.
As of December 31, 2015, including as a result of the Regal merger, the Company has aggregate assets of approximately $1.5 billion, net loans of approximately $1.2 billion and deposits of approximately $1.2 billion.
Assets increased $178.1 million during the three months ended December 31, 2015 and $282.0 million during the year ended December 31, 2015, with the Regal acquisition accounting for $136.3 million of such increase during both the three and twelve month periods. Net loans increased $109.7 million, or 10.49%, during the three months ending December 31, 2015 and $224.0 million, or 24.06%, during the twelve months ending December 31, 2015. Net loans exclusive of the Regal acquisition increased $18.7 million, or 1.78%, during the three months ending December 31, 2015 and $133.0 million, or 14.24%, during the twelve months ending December 31, 2015. The growth in net loans during the three months ended December 31, 2015 was impacted by $27 million in payoffs during the quarter.
James W. Cornelsen, President and Chief Executive Officer of the Company, stated: “We are pleased that we have expanded our presence in the Montgomery County, Maryland market with the opening of our first branch in Rockville, Maryland on November 10, 2015. A second location, located in the Rockville Town Center, is slated to open in 2016. We are also extremely excited about the opportunities created by the combination of Old Line Bank and Regal Bank. The combination facilitates Old Line Bank’s entry into the attractive markets of Baltimore County and Carroll County where the former Regal Bank banking team will have access to an enhanced lending capacity and product set to serve larger commercial customers in the market. Regal Bank customers now have access to a $1.5 billion bank with a $20.6 million lending limit. Old Line Bank is also bringing its residential lending capabilities to the markets formerly served by Regal Bank. We are also very pleased to report that we continue to generate strong organic loan and deposit growth. Total loans increased $132.6 million for the year, exclusive of the Regal merger.”
“Anticipated merger and acquisition expenses were incurred during the quarter due to the Regal acquisition, which negatively impacted our fourth quarter and full-year earnings. With the dedication and teamwork of personnel of Old Line Bank and the former Regal Bank, the two core processing systems are expected to be merged during the first quarter of 2016. We believe that the Company is well positioned to continue its profitable growth to maximize stockholder value,” stated Mr. Cornelsen.
4th QUARTER HIGHLIGHTS:
- The merger with Regal became effective on December 4, 2015, resulting in total assets of $1.5 billion at December 31, 2015.
- Net loans held for investment during the three month period grew $106.8 million. Excluding the Regal acquisition, net loans held for investment during the three month period grew $18.7 million.
- Total deposits grew $145.4 million during the three month period ending December 31, 2015, primarily as a result of the Regal acquisition but also due to organic growth in our surrounding areas. The Regal acquisition provided approximately $104.3 million in deposits while new organic deposits were approximately $41.1 million during the quarter.
- The net interest margin was 3.98% during the three month period ending December 31, 2015 compared to 4.08% for the same period in 2014. Interest expense on total interest bearing liabilities increased to 0.56% for the three months ended December 31, 2015 compared to 0.45% for the same period of 2014.
- Return on Average Assets (ROAA) and Return on Average Equity (ROAE) for the three months ended December 31, 2015 were 0.56% and 5.57%, respectively, compared to ROAA and ROAE of 0.58% and 5.21%, respectively, for the three months ending December 31, 2014.
2015 FULL YEAR HIGHLIGHTS
- Total assets at December 31, 2015 increased $282.0 million from December 31, 2014.
- Net loans held for investment increased $220.5 million during the twelve months ended December 31, 2015, to $1.1 billion at December 31, 2015, compared to $926.6 million at December 31, 2014. Approximately $129.5 million, or 58.7%, of this increase was due to organic growth while the acquisition of the Regal Bank loan portfolio accounted for approximately $91.0 million, or 41.3% of the growth in net loans held for investment.
- Non-performing assets decreased to 0.60% of total assets at December 31, 2015 compared to 0.65% of total assets at December 31, 2014.
- Total deposits grew $220.2 million during the twelve months ending December 31, 2015. Non-interest bearing deposits increased $67.6 million, or 25.93%, and interest bearing deposits grew $152.5, or 20.21%, during the twelve months ending December 31, 2015. The increase in deposits is due to approximately $115.9 million in organic growth and $104.3 million resulting from the acquisition of Regal Bank’s deposit base.
- The provision for loan losses for the year ending December 31, 2015 was $1.3 million compared to $2.8 million for the year ending December 31, 2014.
- The net interest margin was 4.08% for 2015 compared to 4.15% for 2014. The net interest margin in 2015 benefited from a higher level of accretion on acquired loans due to early payoffs on acquired loans with credit marks for the twelve months ending December 31, 2015 as compared to the same period in 2014. Re-pricing in the loan portfolio and lower yields on new loans also caused the average loan yield to decline.
- For the twelve months ended December 31, 2015, ROAA and ROAE were 0.79% and 7.54%, respectively, compared to ROAA and ROAE of 0.60% and 5.45%, respectively, for the twelve months ended December 31, 2014.
- We ended 2015 with a book value of $13.16 per common share and a tangible book value of $11.85 per common share compared to $12.51 and $11.38, respectively, at December 31, 2014 and $13.13 per common share and a tangible book value of $12.02 compared at September 30, 2015.
- We maintained strong liquidity and by all regulatory measures remained “well capitalized”.
- On February 25, 2015, the Company’s board of directors approved the repurchase of up to 500,000 shares of our outstanding common stock. As of December 31, 2015, 339,237 shares have been repurchased at an average price of $15.73 per share. This buyback activity more than offset the shares issued in the Regal transaction, essentially allowing for shares to be repurchased at an average price of $15.73 and then re-issued at the equivalent of $17.97.
Total assets at December 31, 2015 increased $282.0 million from December 31, 2014 primarily due to increases of $220.5 million in loans held for investment, $33.0 million in our investment securities available for sale and $18.3 million in cash and cash equivalents. This increase includes our acquisition of Regal assets of approximately $132 million.
Nonperforming assets, which include non-accrual loans, foreclosed real estate and troubled debt restructured loans, decreased five basis points from 0.65% of total assets at December 31, 2014 to 0.60% of total assets at December 31, 2015.
Deposit growth for the twelve months ended December 31, 2015 consisted of increases in interest bearing deposits of $152.5 million and non-interest bearing deposits of $67.6 million. The increase is the result of our continued efforts to enhance our deposit customer base in our surrounding areas as well as our acquisition of approximately $104.3 million of deposits in the Regal merger.
The $221 thousand increase in net income for the three months ending December 31, 2015 compared to the three months ending December 31, 2014, was primarily the result of a $1.7 million, or 15.77%, increase in net interest income, a $58 thousand, or 12.69%, decrease in the provision for loan losses and an increase of $201 thousand, or 14.48%, in non-interest income, partially offset by a $1.1 million, or 12.16%, increase in non-interest expenses. The $3.4 million increase in net income for the twelve months ending December 31, 2015 compared to the twelve months ending December 31, 2014, was primarily the result of a $4.9 million, or 11.71%, increase in net interest income, a $1.5 million decrease in the provision for loan losses and an $888 thousand, or 14.91%, increase in non-interest income, offsetting an increase of $1.3 million, or 3.51%, in non-interest expenses.
Average interest earning assets for the three month period ending December 31, 2015 increased $196.4 million compared to the same period of 2014. Average interest earning assets for the twelve month period ending December 31, 2015 increased $138.4 million compared to the same period of 2014. The average yield on such assets was 4.41% and 4.49%, respectively, for the three and twelve months ending December 31, 2015 compared to 4.42% and 4.52% for the comparable 2014 periods.
Average interest bearing liabilities for the three month period ending December 31, 2015 increased $152.4 million compared to the same period of 2014. Average interest bearing liabilities for the twelve month period ending December 31, 2015 increased $90.2 million compared to the same period of 2014. The average rate paid on such liabilities increased to 0.56% and 0.54%, respectively, for the three and twelve months ending December 31, 2015 compared to 0.45% and 0.48% for the comparable 2014 periods.
The net interest margin for the three months ended December 31, 2015 decreased to 3.98% from 4.08% during the three months ending December 31, 2014. The net interest margin for the twelve months ended December 31, 2015 decreased to 4.08% from 4.15% during the twelve months ending December 31, 2014. Among other things, the net effect of fair value accretion/amortization on acquired loans affects the net interest margin and net interest income. The fair value accretion/amortization is recorded on pay downs during the period recognized. Payoffs increased during the three months ending December 31, 2015, contributing a 12 basis point increase in net interest income, as compared to a one basis point increase in net interest income for the three months ending December 31, 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 December 31, 2015 decreased by three basis points as compared to the same three month period of 2014.
Net interest income increased for the three and twelve month periods ending December 31, 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 income increased for the three and twelve month periods ending December 31, 2015 due to organic growth in our loan portfolio and, to a lesser extent, the acquisition of loans in the Regal merger. Interest expense increased due to increases in our deposits and borrowings. Our average interest bearing deposits and average rates paid on these deposits increased for both the three and twelve month periods ending December 31, 2015, offsetting a decrease in the average rate paid on our borrowings.
The provision for loan losses decreased for the three and twelve month periods ending December 31, 2015 compared to the same periods of 2014. The decrease for the three month period is the result of our continued improvements in asset quality. The decrease for the twelve month period is the result of a provision for $1.4 million that was recognized during the second quarter of 2014 for one commercial loan that was sold at foreclosure during the third quarter of 2014, in addition to continued improvements in asset quality, as noted above.
Non-interest income increased for the three month period ending December 31, 2015 compared to the same period of 2014 primarily as a result of an increase of $198 thousand on gains on the sale of marketable loans and a $42 thousand decrease in the loss on disposal of assets, offsetting the decrease of $44 thousand in service charges on deposit accounts. The increase in gain on sale of marketable loans is due to the gains recorded on the sale of $25.2 million in residential mortgage loans sold in the secondary market during the three months ending December 31, 2015 as compared to $17.8 million in the 2014 period. Service charges on deposit accounts decreased as a result of lower overdraft and ATM fees compared to the same three month period of 2014. Non-interest income also increased for the twelve month period ending December 31, 2015 compared to the same twelve months of 2014. The increase is primarily the result of a $1.2 million increase in gain on the sale of marketable loans, offsetting a decrease of $174 thousand in service charges on deposit accounts. The increase in gain on sale of marketable loans for the twelve months ending December 31, 2015 is due to the gains recorded on the sale of $103.2 million in residential mortgage loans sold in the secondary market compared to sales of $54.3 million for the period of 2014.
Non-interest expenses increased $1.1 million, or 12.16%, for the three month period ending December 31, 2015 compared to the same period of 2014 primarily as a result of the $1.4 million of merger-related expenses incurred during the 2015 period, for which there was no corresponding expense in 2014, and a loss on the sale of bank owned real estate, partially offset by a decrease in occupancy and equipment expenses. The loss on the sale of bank owned real estate for the three month period ending December 31, 2015 is the result of the sale of one property for a loss of $21 thousand compared to the sale of five properties for a gain of $155 thousand during the same three month period of 2014. Occupancy and equipment expenses decreased during the 2015 period as a result of the closing of four of our branches on December 31, 2014.
Non-interest expenses increased $1.2 million, or 3.51%, for the twelve month period ending December 31, 2015 compared to the same period of 2014 as a result of the previously discussed $1.4 million of merger-related expenses, a loss on the sale of bank owned real estate and an increase in other operating expenses, offsetting decreases in salaries and benefits and occupancy and equipment expenses. Salaries and benefits decreased during 2015 due to severance payments in the 2014 period that were associated with merger-related staffing reductions from our previous acquisition of WSB Holdings, Inc. Occupancy and equipment expenses decreased for the 2015 period as a result of the closure of four of our branches on December 31, 2014. The closure of these branches included $462 thousand in occupancy and equipment expenses and a loss on disposal of assets of $48 thousand for the corresponding period last year. Other operating expenses increased $229 thousand primarily as a result of increases in our marketing and advertising due to an enhanced ongoing marketing campaign during 2015. The loss on sale of bank owned real estate for the twelve month period ending December 31, 2015 is the result of the sale of five properties for a loss of $50 thousand compared to the sale of thirteen properties for a gain of $698 thousand during the same period of 2014.
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 23 branches located in its primary market area of suburban Maryland (Washington, D.C. suburbs and Southern Maryland) counties of Anne Arundel, Baltimore, Calvert, Carroll, Charles, Montgomery, Prince George's and St. Mary's. It also targets customers throughout the greater Washington, D.C. metropolitan area.
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. Old Line Bancshares, Inc.’s management uses non-GAAP financial measures, including (i) net operating income; (ii) net operating income available to common stockholders; (iii) earnings per basic share; (iv) earnings per diluted share; (v) operating non-interest expense; (vi) operating efficiency ratio; (vii) operating non-interest expense as a percentage of average assets; (viii) return on average assets; (ix) return on average common equity. Net income excludes merger-related expenses, net of tax. Operating non-interest expense excludes merger related expense, net of tax. The operating efficiency ratio excludes merger related expenses. Management believes that non-GAAP financial measures provide additional useful information that allow readers to evaluate the ongoing performance of the Company and provide meaningful comparison to its peers. Non-GAP financial measures should not be consider as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider Old Line’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.
The statements in this press release that are not historical facts, in particular the statements with respect to the opening of Old Line Bank’s Rockville Town Center branch and continued profitable growth, constitute 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. 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, deterioration in economic conditions or a slowdown in the recovery in our target markets or nationally, 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. 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 | |||||||||||||||
| December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 (1) | |||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
| Cash and due from banks | $ | 40,239,384 | $ | 29,107,355 | $ | 40,494,305 | $ | 37,061,793 | $ | 23,572,613 | |||||
| Interest bearing accounts | 1,135,263 | 1,147,181 | 1,034,085 | 1,080,570 | 1,230,864 | ||||||||||
| Federal funds sold | 2,326,045 | 362,726 | 331,178 | 624,888 | 601,259 | ||||||||||
| Total cash and cash equivalents | 43,700,692 | 30,617,262 | 41,859,568 | 38,767,251 | 25,404,736 | ||||||||||
| Investment securities available for sale | 194,705,675 | 151,522,391 | 151,179,573 | 158,380,719 | 161,680,198 | ||||||||||
| Loans held for sale | 8,112,488 | 5,264,444 | 6,361,652 | 8,692,297 | 4,548,106 | ||||||||||
| Loans held for invesment, less allowance for loan losses of $4,909,818 | |||||||||||||||
| and $4,281,835 for December 31, 2015 and December 31, 2014. | 1,147,034,715 | 1,040,227,945 | 1,008,618,046 | 963,706,538 | 926,573,488 | ||||||||||
| Equity securities at cost | 4,942,346 | 3,671,895 | 3,565,596 | 3,353,096 | 5,811,697 | ||||||||||
| Premises and equipment | 36,174,978 | 33,948,846 | 33,786,623 | 33,874,131 | 34,300,375 | ||||||||||
| Accrued interest receivable | 3,814,546 | 3,223,748 | 3,341,570 | 3,172,615 | 3,218,428 | ||||||||||
| Deferred income taxes | 13,243,789 | 12,734,261 | 13,108,799 | 12,506,347 | 16,106,498 | ||||||||||
| Current income taxes receivable | - | - | 1,198,299 | 1,312,872 | - | ||||||||||
| Bank owned life insurance | 36,606,105 | 32,071,875 | 31,856,947 | 31,643,001 | 31,429,747 | ||||||||||
| Other real estate owned | 2,472,044 | 1,948,625 | 1,215,690 | 1,600,015 | 2,451,920 | ||||||||||
| Goodwill | 9,786,357 | 7,793,665 | 7,793,665 | 7,793,665 | 7,793,665 | ||||||||||
| Core deposit intangible | 4,351,226 | 3,822,953 | 4,016,913 | 4,210,679 | 4,420,796 | ||||||||||
| Other assets | 4,567,038 | 4,530,443 | 4,127,881 | 6,087,688 | 3,779,350 | ||||||||||
| Total assets | $ | 1,509,511,999 | $ | 1,331,378,353 | $ | 1,312,030,822 | $ | 1,275,100,914 | $ | 1,227,519,004 | |||||
| Deposits | |||||||||||||||
| Non-interest bearing | $ | 328,549,405 | $ | 279,339,255 | $ | 275,953,182 | $ | 269,733,047 | $ | 260,913,521 | |||||
| Interest bearing | 907,330,561 | 811,186,492 | 808,460,674 | 781,718,574 | 754,825,885 | ||||||||||
| Total deposits | 1,235,879,966 | 1,090,525,747 | 1,084,413,856 | 1,051,451,621 | 1,015,739,406 | ||||||||||
| Short term borrowings | 107,557,246 | 85,695,507 | 76,722,442 | 71,236,281 | 61,002,889 | ||||||||||
| Long term borrowings | 10,553,246 | 5,903,665 | 5,931,298 | 5,958,485 | 5,987,283 | ||||||||||
| Accrued interest payable | 416,686 | 357,691 | 322,926 | 284,444 | 266,023 | ||||||||||
| Supplemental executive retirement plan | 5,336,509 | 5,276,167 | 5,222,669 | 5,162,732 | 5,095,141 | ||||||||||
| Income taxes payable | 3,615,677 | 379,247 | - | - | 485,435 | ||||||||||
| Other liabilities | 3,700,598 | 4,967,326 | 3,457,441 | 3,420,900 | 3,416,190 | ||||||||||
| Total liabilities | 1,367,059,928 | 1,193,105,350 | 1,176,070,632 | 1,137,514,463 | 1,091,992,367 | ||||||||||
| Stockholders' equity | |||||||||||||||
| Common stock | 108,026 | 105,131 | 105,745 | 107,551 | 108,110 | ||||||||||
| Additional paid-in capital | 108,598,015 | 100,614,804 | 101,500,434 | 104,313,092 | 105,235,646 | ||||||||||
| Retained earnings | 33,449,649 | 36,935,945 | 34,353,501 | 32,281,404 | 30,067,798 | ||||||||||
| Accumulated other comprehensive income (loss) | 38,200 | 359,840 | (253,879 | ) | 630,791 | (147,250 | ) | ||||||||
| Total Old Line Bancshares, Inc. stockholders' equity | 142,193,890 | 138,015,720 | 135,705,801 | 137,332,838 | 135,264,304 | ||||||||||
| Non-controlling interest | 258,181 | 257,283 | 254,389 | 253,613 | 262,333 | ||||||||||
| Total stockholders' equity | 142,452,071 | 138,273,003 | 135,960,190 | 137,586,451 | 135,526,637 | ||||||||||
| Total liabilities and stockholders' equity | $ | 1,509,511,999 | $ | 1,331,378,353 | $ | 1,312,030,822 | $ | 1,275,100,914 | $ | 1,227,519,004 | |||||
| Shares of basic common stock outstanding | 10,802,560 | 10,513,025 | 10,574,439 | 10,755,017 | 10,810,930 | ||||||||||
| (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 December 31, | Three Months Ended September 30, | Three Months Ended June 30, | Three Months Ended March 31, | Three Months Ended December 31, | Twelve Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2015 | 2015 | 2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||||
| Interest income | |||||||||||||||||||||
| Loans, including fees | $ | 12,646,217 | $ | 12,202,174 | $ | 11,500,630 | $ | 11,599,390 | $ | 10,556,729 | $ | 47,948,411 | $ | 41,723,378 | |||||||
| Investment securities and other | 977,533 | 805,172 | 835,594 | 886,084 | 939,602 | 3,504,383 | 3,879,868 | ||||||||||||||
| Total interest income | 13,623,750 | 13,007,346 | 12,336,224 | 12,485,474 | 11,496,331 | 51,452,794 | 45,603,246 | ||||||||||||||
| Interest expense | |||||||||||||||||||||
| Deposits | 1,196,381 | 1,118,092 | 1,021,560 | 910,957 | 799,716 | 4,246,990 | 3,401,622 | ||||||||||||||
| Borrowed funds | 181,876 | 141,009 | 159,707 | 134,716 | 119,214 | 617,308 | 498,101 | ||||||||||||||
| Total interest expense | 1,378,257 | 1,259,101 | 1,181,267 | 1,045,673 | 918,930 | 4,864,298 | 3,899,723 | ||||||||||||||
| Net interest income | 12,245,493 | 11,748,245 | 11,154,957 | 11,439,801 | 10,577,401 | 46,588,496 | 41,703,523 | ||||||||||||||
| Provision for loan losses | 400,000 | 263,595 | 85,658 | 561,731 | 458,114 | 1,310,984 | 2,827,297 | ||||||||||||||
| Net interest income after provision for loan losses | 11,845,493 | 11,484,650 | 11,069,299 | 10,878,070 | 10,119,287 | 45,277,512 | 38,876,226 | ||||||||||||||
| Non-interest income | |||||||||||||||||||||
| Service charges on deposit accounts | 430,964 | 442,225 | 441,382 | 415,202 | 475,120 | 1,729,773 | 1,904,063 | ||||||||||||||
| Gain on sales or calls of investment securities | - | 604 | 3,924 | 60,694 | - | 65,222 | 129,911 | ||||||||||||||
| Gain on sale of stock | - | - | - | - | - | - | 96,993 | ||||||||||||||
| Earnings on bank owned life insurance | 260,898 | 250,950 | 249,421 | 248,384 | 249,967 | 1,009,653 | 988,204 | ||||||||||||||
| Gains (losses) on disposal of assets | (5,847 | ) | - | - | 19,975 | (48,051 | ) | 14,128 | (30,131 | ) | |||||||||||
| Gain on sale of loans | 474,941 | 457,613 | 500,865 | 585,984 | 276,531 | 2,019,403 | 771,815 | ||||||||||||||
| Other fees and commissions | 432,810 | 692,106 | 325,028 | 556,872 | 438,561 | 2,006,816 | 2,096,069 | ||||||||||||||
| Total non-interest income | 1,593,766 | 1,843,498 | 1,520,620 | 1,887,111 | 1,392,128 | 6,844,995 | 5,956,924 | ||||||||||||||
| Non-interest expense | |||||||||||||||||||||
| Salaries & employee benefits | 4,319,029 | 4,407,726 | 4,331,572 | 4,178,896 | 4,303,832 | 17,237,223 | 17,831,394 | ||||||||||||||
| Occupancy & Equipment | 1,487,028 | 1,478,740 | 1,338,660 | 1,471,450 | 1,878,052 | 5,775,878 | 6,268,593 | ||||||||||||||
| Pension plan termination | - | - | - | - | - | - | - | ||||||||||||||
| Data processing | 361,991 | 350,941 | 367,190 | 352,060 | 352,956 | 1,432,182 | 1,340,875 | ||||||||||||||
| Merger and integration | 1,420,570 | - | - | - | - | 1,420,570 | 29,167 | ||||||||||||||
| Core deposit amortization | 194,507 | 193,960 | 193,766 | 210,117 | 212,970 | 792,350 | 866,704 | ||||||||||||||
| (Gains)losses on sales of other real estate owned | 20,502 | (114,709 | ) | 9,169 | 134,754 | (155,148 | ) | 49,716 | (697,875 | ) | |||||||||||
| OREO expense | 75,824 | 158,983 | 75,552 | 120,201 | 199,094 | 430,560 | 554,057 | ||||||||||||||
| Other operating | 2,270,861 | 2,132,067 | 2,477,041 | 2,257,235 | 2,257,866 | 9,137,204 | 8,853,420 | ||||||||||||||
| Total non-interest expense | 10,150,312 | 8,607,708 | 8,792,950 | 8,724,713 | 9,049,622 | 36,275,683 | 35,046,335 | ||||||||||||||
| Income before income taxes | 3,288,947 | 4,720,440 | 3,796,969 | 4,040,468 | 2,461,793 | 15,846,824 | 9,786,815 | ||||||||||||||
| Income tax expense | 1,286,496 | 1,605,586 | 1,195,273 | 1,295,035 | 679,154 | 5,382,390 | 2,694,104 | ||||||||||||||
| Net income | 2,002,451 | 3,114,854 | 2,601,696 | 2,745,433 | 1,782,639 | 10,464,434 | 7,092,711 | ||||||||||||||
| Less: Net income (loss) attributable to the noncontrolling interest | 898 | 2,894 | 776 | (8,720 | ) | 1,978 | (4,152 | ) | (37,589 | ) | |||||||||||
| Net income available to common stockholders | $ | 2,001,553 | $ | 3,111,960 | $ | 2,600,920 | $ | 2,754,153 | $ | 1,780,661 | $ | 10,468,586 | $ | 7,130,300 | |||||||
| Earnings per basic share | $ | 0.19 | $ | 0.30 | $ | 0.25 | $ | 0.25 | $ | 0.17 | $ | 0.98 | $ | 0.66 | |||||||
| Earnings per diluted share | $ | 0.19 | $ | 0.29 | $ | 0.24 | $ | 0.25 | $ | 0.16 | $ | 0.97 | $ | 0.65 | |||||||
| Adjusted per basic share | $ | 0.30 | $ | - | $ | - | $ | - | $ | - | $ | 1.09 | $ | - | |||||||
| Adjusted per diluted share | $ | 0.30 | $ | - | $ | - | $ | - | $ | - | $ | 1.08 | $ | - | |||||||
| Dividend per common share | $ | 0.06 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.21 | $ | 0.18 | |||||||
| Average number of basic shares | 10,604,667 | 10,544,357 | 10,617,225 | 10,807,366 | 10,792,544 | 10,647,986 | 10,786,017 | ||||||||||||||
| Average number of dilutive shares | 10,760,832 | 10,685,306 | 10,759,628 | 10,899,030 | 10,941,002 | 10,784,323 | 10,935,182 | ||||||||||||||
| (1) Financial information as of December 31, 2013 has been derived from audited financial statements. | |||||||||||||||||||||
RECONCILIATION OF NON-GAAP MEASURES
(1) As the magnitude of the merger expenses distorts the operational results of the Company, we present in the GAAP reconciliation below and in the accompanying text certain performance ratios excluding the effect of the merger expenses during the three and twelve month periods ended December 31, 2015. We believe this information is important to enable shareholders and other interested parties to assess the core operational performance of the Company.
| Three Months | Twelve Months | |||||||
| ending December | ending December | |||||||
| Reconciliation of Non-GAAP measures (Unaudited) | 31, 2015 | 31, 2015 | ||||||
| Net Interest | Net Interest | |||||||
| Income | Income | |||||||
| Net Income (GAAP) | $ | 2,002,451 | $ | 10,464,434 | ||||
| Merger-related expenses, net of tax | 1,200,825 | 1,200,825 | ||||||
| Operating Net Income (non-GAAP) | $ | 3,203,276 | $ | 11,665,259 | ||||
| Net income available to common shareholders | $ | 2,001,553 | $ | 10,468,586 | ||||
| Merger-related expenses, net of tax | 1,200,825 | 1,200,825 | ||||||
| Operating earnings | $ | 3,202,378 | $ | 11,669,411 | ||||
| Earnings per weighted average common shares, basic (GAAP) | $ | 0.19 | $ | 0.98 | ||||
| Merger-related expenses, net of tax | 0.11 | 0.11 | ||||||
| Operating earnings per weighted average common share basic (non GAAP) | $ | 0.30 | $ | 1.09 | ||||
| Earnings per weighted average common shares, diluted (GAAP) | $ | 0.19 | $ | 0.97 | ||||
| Merger-related expenses, net of tax | 0.11 | 0.11 | ||||||
| Operating earnings per weighted average common share basic (non-GAAP) | $ | 0.30 | $ | 1.08 | ||||
| Summary Operating Results (non-GAAP) | ||||||||
| Noninterest expense (GAAP) | $ | 10,150,312 | $ | 36,275,682 | ||||
| Merger-related expenses | 1,200,825 | 1,200,825 | ||||||
| Operating noninterest expense (non-GAAP) | 8,949,487 | $ | 35,074,857 | |||||
| Operating efficiency ratio (non-GAAP) | 64.67 | % | 65.64 | % | ||||
| Operating noninterest expense as a % of average assets | 0.63 | % | 2.65 | % | ||||
| Return on average assets | ||||||||
| Net income | $ | 2,002,451 | $ | 10,464,434 | ||||
| Merger-related expenses, net of tax | 1,200,825 | 1,200,825 | ||||||
| Operating net income | $ | 3,203,276 | $ | 11,665,259 | ||||
| Adjusted return on average assets | 0.90 | % | 0.88 | % | ||||
| Return on average common equity | ||||||||
| Net income available to common shareholders | $ | 2,001,553 | $ | 10,468,586 | ||||
| Merger-related expenses, net of tax | 1,200,825 | 1,200,825 | ||||||
| Operating earnings (non-GAAP) | $ | 3,202,378 | $ | 11,669,411 | ||||
| Adjusted return on average common equity (non-GAAP) | 8.92 | % | 8.40 | % | ||||
| Old Line Bancshares, Inc. & Subsidiaries | |||||||||||||||||||||||||||||||||||
| Average Balances, Interest and Yields | |||||||||||||||||||||||||||||||||||
| 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | 12/31/2014 | |||||||||||||||||||||||||||||||
| Average Balance | Yield | Average Balance | Yield | Average Balance | Yield | Average Balance | Yield | Average Balance | Yield | ||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
| Int. Bearing Deposits | $ | 2,163,496 | 0.26 | % | $ | 1,754,437 | 0.05 | % | $ | 914,076 | 0.08 | % | $ | 593,602 | 0.12 | % | $ | 2,902,672 | 0.20 | % | |||||||||||||||
| Investment Securities (2) | 182,660,126 | 2.65 | % | 154,931,599 | 2.56 | % | 161,858,721 | 2.56 | % | 164,560,281 | 2.70 | % | 168,069,134 | 2.40 | % | ||||||||||||||||||||
| Loans | 1,087,653,696 | 4.70 | % | 1,036,066,492 | 4.76 | % | 1,002,896,056 | 4.70 | % | 954,873,037 | 5.02 | % | 905,241,954 | 4.78 | % | ||||||||||||||||||||
| Allowance for Loan Losses | (3,505,864 | ) | (4,567,326 | ) | (4,576,511 | ) | (4,498,086 | ) | (2,570,097 | ) | |||||||||||||||||||||||||
| Total Loans Net of allowance | 1,084,147,832 | 4.71 | % | 1,031,499,166 | 4.78 | % | 998,319,545 | 4.72 | % | 950,374,951 | 5.04 | % | 902,671,857 | 4.79 | % | ||||||||||||||||||||
| Total interest-earning assets | 1,268,971,454 | 4.41 | % | 1,188,185,202 | 4.49 | % | 1,161,092,342 | 4.42 | % | 1,115,528,834 | 4.70 | % | 1,073,643,663 | 4.42 | % | ||||||||||||||||||||
| Noninterest bearing cash | 42,032,492 | 39,141,171 | 37,463,216 | 34,422,919 | 38,925,730 | ||||||||||||||||||||||||||||||
| Other Assets | 103,829,394 | 99,737,905 | 99,548,767 | 102,782,917 | 107,033,944 | ||||||||||||||||||||||||||||||
| Total Assets | $ | 1,414,833,340 | $ | 1,327,064,278 | $ | 1,298,104,325 | $ | 1,252,734,670 | $ | 1,219,603,337 | |||||||||||||||||||||||||
| Liabilities and Stockholders' Equity | |||||||||||||||||||||||||||||||||||
| Interest-bearing Deposits | $ | 841,394,142 | 0.56 | % | $ | 813,731,631 | 0.55 | % | $ | 765,327,795 | 0.54 | % | $ | 772,838,785 | 0.48 | % | $ | 767,241,928 | 0.41 | % | |||||||||||||||
| Borrowed Funds | 128,656,699 | 0.56 | % | 87,448,890 | 0.64 | % | 117,595,112 | 0.54 | % | 72,721,100 | 0.75 | % | 50,442,530 | 0.94 | % | ||||||||||||||||||||
| Total interest-bearing liabilities | 970,050,841 | 0.56 | % | 901,180,521 | 0.55 | % | 882,922,907 | 0.54 | % | 845,559,885 | 0.50 | % | 817,684,458 | 0.45 | % | ||||||||||||||||||||
| Noninterest bearing deposits | 293,242,708 | 278,650,167 | 269,427,296 | 262,926,103 | 255,002,560 | ||||||||||||||||||||||||||||||
| 1,263,293,549 | 1,179,830,688 | 1,152,350,203 | 1,108,485,988 | 1,072,687,018 | |||||||||||||||||||||||||||||||
| Other Liabilities | 9,526,486 | 8,422,924 | 7,866,395 | 9,009,800 | 11,057,397 | ||||||||||||||||||||||||||||||
| Noncontrolling Interest | 256,218 | 256,636 | 252,293 | 258,240 | 261,545 | ||||||||||||||||||||||||||||||
| Stockholder's Equity | 141,757,087 | 138,554,030 | 137,635,434 | 134,980,642 | 135,597,377 | ||||||||||||||||||||||||||||||
| Total Liabilities and Stockholder's Equity | $ | 1,414,833,340 | $ | 1,327,064,278 | $ | 1,298,104,325 | $ | 1,252,734,670 | $ | 1,219,603,337 | |||||||||||||||||||||||||
| Net interest spread | 3.85 | % | 3.93 | % | 3.88 | % | 4.20 | % | 3.97 | % | |||||||||||||||||||||||||
| Net interest income and Net interest margin(1) | $ | 12,731,170 | 3.98 | % | $ | 12,184,339 | 4.07 | % | $ | 11,602,656 | 4.01 | % | $ | 11,891,497 | 4.32 | % | $ | 11,034,119 | 4.08 | % | |||||||||||||||
(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 December 31, 2015 and 2014. Fair value accretion for the current quarter and prior four quarter are as follows:
| 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | 12/31/2014 | ||||||||||||||||||||||||||||||||
| 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) | $ | (2,772 | ) | (0.00 | ) | % | $ | 18,940 | 0.01 | % | $ | (3,114 | ) | (0.00 | ) | % | $ | 8,690 | 0.00 | % | $ | (969 | ) | (0.00 | ) | % | ||||||||||
| Mortgage loans (1) | 399,729 | 0.12 | 514,073 | 0.17 | 35,386 | 0.01 | 589,266 | 0.21 | 24,779 | 0.01 | ||||||||||||||||||||||||||
| Consumer loans | 3,486 | 0.00 | 3,771 | 0.00 | 4,298 | 0.00 | 11,390 | 0.00 | 6,686 | 0.00 | ||||||||||||||||||||||||||
| Interest bearing deposits | 38,091 | 0.01 | 38,091 | 0.01 | 37,677 | 0.01 | 37,263 | 0.01 | 110,503 | 0.04 | ||||||||||||||||||||||||||
| Total Fair Value Accretion (Amortization) | $ | 438,534 | 0.13 | % | $ | 574,875 | 0.19 | % | $ | 74,247 | 0.02 | % | $ | 646,609 | 0.22 | % | $ | 140,999 | 0.05 | % | ||||||||||||||||
(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:
| 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | 12/31/2014 | |||||||||||||||||||||||||||
| Net Interest Income | Yield | Net Interest Income | Yield | Net Interest Income | Yield | Net Interest Income | Yield | Net Interest Income | Yield | ||||||||||||||||||||||
| GAAP net interest income | $ | 12,245,493 | 3.83 | % | $ | 11,748,245 | 3.93 | % | $ | 11,171,187 | 3.86 | % | $ | 11,461,904 | 4.17 | % | $ | 10,577,401 | 3.91 | % | |||||||||||
| Tax equivalent adjustment | |||||||||||||||||||||||||||||||
| Federal funds sold | - | - | - | - | 1 | 0.00 | 1 | 0.00 | 1 | 0.00 | |||||||||||||||||||||
| Investment securities | 243,378 | 0.08 | 193,491 | 0.06 | 195,785 | 0.07 | 200,498 | 0.07 | 343,280 | 0.13 | |||||||||||||||||||||
| Loans | 242,299 | 0.07 | 242,602 | 0.08 | 235,683 | 0.08 | 229,094 | 0.08 | 113,437 | 0.04 | |||||||||||||||||||||
| Total tax equivalent adjustment | 485,677 | 0.15 | 436,093 | 0.14 | 431,469 | 0.15 | 429,593 | 0.15 | 456,718 | 0.17 | |||||||||||||||||||||
| Tax equivalent interest yield | $ | 12,731,170 | 3.98 | % | $ | 12,184,338 | 4.07 | % | $ | 11,602,656 | 4.01 | % | $ | 11,891,497 | 4.32 | % | $ | 11,034,119 | 4.08 | % | |||||||||||
| Old Line Bancshares, Inc. & Subsidiaries | |||||||||||||||
| Selected Loan Information | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||
| December 31, 2015 | September 30, 2015 | June 30, 2015 | March 31, 2015 | December 31, 2014 | |||||||||||
| Acquired Loans(1) | |||||||||||||||
| Period End Loan Balance | $ | 237,061 | $ | 152,004 | $ | 164,300 | $ | 171,527 | $ | 173,659 | |||||
| Deferred Costs | - | - | - | - | 10 | ||||||||||
| Accruing | 235,816 | 150,702 | 161,495 | 165,956 | 167,704 | ||||||||||
| Non-accrual(2) | 1,245 | 1,302 | 2,546 | 2,518 | 1,958 | ||||||||||
| Accruing 30-89 days past due | 6,132 | 603 | 2,102 | 3,053 | 3,687 | ||||||||||
| Accruing 90 or more days past due | 1 | 214 | - | - | 310 | ||||||||||
| Other real estate owned | 2,047 | 1,524 | 741 | 1,125 | 1,977 | ||||||||||
| Net charge offs (recoveries) | (39 | ) | 225 | 320 | (16 | ) | 52 | ||||||||
| Legacy Loans(3) | |||||||||||||||
| Period End Loan Balance | $ | 913,609 | $ | 891,407 | $ | 847,499 | $ | 795,532 | $ | 749,968 | |||||
| Deferred Costs | 1,274 | 1,270 | 1,255 | 1,283 | 1,283 | ||||||||||
| Accruing | 907,915 | 889,364 | 845,391 | 793,576 | 746,376 | ||||||||||
| Non-accrual | 4,420 | 773 | 853 | 1,105 | 3,249 | ||||||||||
| Accruing 30-89 days past due | 994 | 2,630 | 1,199 | 851 | 343 | ||||||||||
| Accruing 90 or more days past due | - | 203 | - | - | - | ||||||||||
| Other real estate owned | 425 | 425 | 475 | 475 | 475 | ||||||||||
| Net charge offs (recoveries) | (18 | ) | 20 | (34 | ) | 224 | (4 | ) | |||||||
| Allowance for loan losses as % of held for investment loans | 0.43 | % | 0.43 | % | 0.44 | % | 0.48 | % | 0.46 | % | |||||
| Allowance for loan losses as % of legacy held for investment loans | 0.54 | % | 0.50 | % | 0.52 | % | 0.59 | % | 0.57 | % | |||||
| Allowance for loan losses as % of acquired held for investment loans | 2.07 | % | 2.93 | % | 2.70 | % | 2.60 | % | 2.38 | % | |||||
| Total non-performing loans as a % of held for investment loans | 0.71 | % | 0.46 | % | 0.49 | % | 0.37 | % | 0.56 | % | |||||
| Total non-performing assets as a % of total assets | 0.60 | % | 0.36 | % | 0.38 | % | 0.44 | % | 0.65 | % | |||||
(1) Acquired loans represent all loans acquired on April 1, 2011 from MB&T, May 10, 2013 from WSB and on December 4, 2015 from Regal Bank and Trust. 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, May 10, 2013 and December 4, 2015.