BOWIE, Md., Oct. 24, 2014 (GLOBE NEWSWIRE) -- Old Line Bancshares, Inc. (Nasdaq:OLBK), the parent company of Old Line Bank reported 42.51% decrease in non-performing assets at September 30, 2014 compared to December 31, 2013. Non-performing assets decreased by $5.8 million and $6.4 million, respectively, as of September 30, 2014 to 0.70% of total assets from 1.20% at June 30, 2014 and 1.27% at December 31, 2013. Net income available to common stockholders was $1.7 million for the three months ended September 30, 2014, compared to net earnings of $2.2 million for the three months ended September 30, 2013. Earnings were $0.16 per basic and diluted common share for the three months ended September 30, 2014, compared to $0.22 per basic and diluted common share for the same period in 2013.
Earnings were $5.3 million for the nine months ended September 30, 2014, compared to $3.4 million for the same nine month period last year. Earnings were $0.50 per basic and $0.49 per diluted common share for the nine months ended September 30, 2014 compared to $0.40 per basic and diluted share for the same period last year.
James W. Cornelsen, President and Chief Executive Officer of Old Line Bancshares, Inc. stated: "We are pleased to report great improvement in our asset quality measures. As planned, we believe our balance sheet is vastly improved. It takes time to dispose of non-performing assets and we have successfully been doing this on-plan, and consistently as the improving market permits. Non-performing assets, as a percentage of total assets, decreased 50 basis points during the quarter and 57 basis points to date. We continue to concentrate on improving asset quality while concurrently growing our loan and deposit relationships. Core deposits increased a healthy $10.2 million in the quarter as a result of our increased efforts in providing quality products and service to our customers. This deposit growth has allowed us to continue to focus on reducing cost of funds, providing the opportunity to enhance net income."
HIGHLIGHTS:
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Non-performing assets decreased to 0.70% of total assets at September 30, 2014 compared to 1.27% at December 31, 2013.
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Total deposits grew $10.2 million and $45.3 million, respectively, during the three and nine month periods ending September 30, 2014.
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Net loans increased $40.4 million, or 4.76%, during the nine months ended September 30, 2014, to $889.6 million, compared to $849.3 million at December 31, 2013.
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The provision for loans losses for the quarter ending September 30, 2014 was $555 thousand compared to $590 thousand for the third quarter last year. The provision for loan losses for the nine month period ending September 30, 2014 was $2.4 million compared to $990 thousand for the same nine month period last year. The increase in our provision for loan losses during the nine month period ended September 30, 2014 is primarily due to one commercial/hotel loan that required an additional provision of $1.4 million to reserve loss on the property. The property was sold at foreclosure and settled in September.
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The net interest margin was 3.97% for the quarter ending September 30, 2014 compared to 4.69% for the quarter ended September 30, 2013. The net interest margin was 4.18% for the nine months ending September 30, 2014 compared to 4.46% for the comparable nine month period last year. Re-pricing in the loan portfolio and lower yields on new loans caused the average loan yield to decline. Additionally, early payoff of acquired loans negatively affecting the accretion yield on acquired loans and decreased the net interest margin for the three month period ending September 30, 2014.
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Total assets at September 30, 2014 increased by $14.7 million from June 30, 2014 and $40.8 million from December 31, 2013.
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The third quarter Return on Average Assets (ROAA) and Return on Average Equity (ROAE) were 0.57% and 5.22%, respectively, compared to ROAA and ROAE of 0.75% and 7.47%, respectively, for the third quarter of 2013.
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ROAA and ROAE for the nine months ended September 30, 2014 were 0.60% and 5.53%, respectively, compared to ROAA and ROAE of 0.45% and 4.80%, respectively, for the nine months ending September 30, 2013.
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We ended the third quarter of 2014 with a book value of $12.35 per common share and a tangible book value of $11.20 per common share compared to $11.71 and $10.50, respectively, at December 31, 2013.
- We maintained strong liquidity and by all regulatory measures remained "well capitalized."
Total assets at September 30, 2014 increased $40.8 million from December 31, 2013 primarily due to an increase of $36.7 million in loans held for investment, offsetting a decrease of $8.6 million in our investment securities available for sale.
Total net loans decreased $4.0 million for the three month period ending September 30, 2014. This decrease is the result of pay-downs and approximately $16.5 million of pay-offs on our existing loan portfolio and a decline in loan originations for the third quarter. Two real estate properties were sold by the borrowers in the open market resulting in payoffs of approximately $15.0 million and one commercial/hotel loan with a net balance of approximately $1.5 million was paid off through a foreclosure auction. Total net loans increased $40.4 million during the nine month period ended September 30, 2014 as a result of continued efforts to originate new loans, primarily in our commercial real estate and construction permanent loan portfolios. During the quarter ending September 30, 2014, we used excess funds received from loan payoffs and invested $13.3 million in interest earning assets classified as mortgage-backed securities (MBS).
Nonperforming assets, which include non-accrual loans, foreclosed real estate and troubled debt restructured loans, have decreased 57 basis points from 1.27% of total assets at December 31, 2013 to 0.70% of total assets at September 30, 2014. We remain focused on reducing nonperforming assets and classified loans. Non-accrual loans were $4.6 million at September 30, 2014 compared to $8.8 million at December 31, 2013, reflecting a reduction of $4.2 million, primarily due to one commercial/hotel loan that was resolved during the third quarter. Other real estate owned declined $1.6 million since December 31, 2013 primarily due to the sale of a foreclosed property that resulted from an acquired hospitality loan.
Deposit growth during the nine month period was comprised of increases of $18.6 million, or 8.12%, in non-interest bearing deposits and $26.7 million, or 3.59%, in interest bearing deposits. The increase in our deposit base is due to our enhanced presence in our primary market and surrounding areas as a result of our marketing efforts as well as the continued efforts of our cash management and financial services teams.
The above-noted decrease in net income for the three months ending September 30, 2014 compared to the three months ending September 30, 2013, was primarily the result of a $1.3 million, or 11.51%, decrease in net interest income, a $113 thousand, or 7.98%, decrease in non-interest income, offsetting a $601 thousand decrease in non-interest expenses. The decline in net interest income is primarily due to a decrease of $1.7 million in accretion on acquired loans resulting from payoffs that accelerated accretion in the three months ended September 30, 2013 and accelerated amortization in the the three months ended September 30, 2014. The above-noted increase in net income for the nine months ending September 30, 2014 compared to the nine months ending September 30, 2013, was primarily the result of a $2.6 million, or 9.12%, increase in net interest income and a $758 thousand, or 19.91%, increase in non-interest income, and a decrease of $757 thousand in non-interest expenses, offsetting an increase of $1.4 million in our provision for loan losses.
The provision recorded in the three months ended September 30, 2014, in the absence of loan growth, was primarily related to the impact of the previously discussed commercial/hotel loss on our historical loss factors used to determine our Allowance for Loan Losses. The increase in our provision for loan losses during the nine month period ended September 30, 2014 was primarily due to the same commercial/hotel loan that was placed on nonaccrual status during the first quarter of 2014 in connection with which we recognized an additional provision of $1.4 million in the second quarter. This commercial loan was subsequently resolved in the third quarter as expected with no additional loss. Due to the sale of this property, an anticipated $2.7 million charge off was incurred during the third quarter.
Net interest income decreased for the three month periods ending September 30, 2014 as a result of a decrease in the yield earned on our average interest earning assets. During the quarter ended September 30, 2014, yield on our average interest earning assets was 4.33% compared to 5.11% for same three month period last year. Furthermore, accretion on acquired loans decreased $1.7 million for the three month period ending September 30, 2014 compared to the same three month period last year. Net interest income increased during the nine month period ending September 30, 2014 as a result of an increase on our average interest earnings assets. The decrease in non-interest income for the three month period ending September 30, 2014 was primarily the result of decreases in other fees and commissions, primarily letter of credit fees and other marketable loan fees. The increase in non-interest income for the nine month period ending September 30, 2014, is primarily due to increases on service charges on deposit accounts, other loans and fees, primarily letter of credit fees, earnings on bank owned life insurance and gain on the sale of stock, offsetting the decrease on the gain on sale of investment securities. The decrease in non-interest expenses for the three month period was primarily the result of a reduction in occupancy expense, data processing, merger and integration and gain on the sale of other real estate owned. The decrease in non-interest expenses for the nine month period was primarily due to merger expenses that were recognized in the period ending September 30, 2013 as a result of the WSB Holdings, Inc. acquisition, partially offset by an increase in salaries and benefits for the 2014 period as a result of severance payments associated with the merger that were recognized in the first quarter of 2014.
Net interest margin for the three months ended September 30, 2014 decreased to 3.97% from 4.69% during the three months ending September 30, 2013. The net interest margin for the nine months ended September 30, 2014 decreased to 4.18% from 4.46% during the nine months ending September 30, 2013. Large payoffs attributed to the acceleration of amortization of fair value marks on acquired loans, which negatively impacted the yield on loans by a decrease of 24 basis points for the three month period ending September 30, 2014 compared to the three months ended June 30, 2014, and 60 basis points compared to the three month period ending September 30, 2013. These negative swings related to acceleration of amortization of fair value marks by approximately $300 thousand on one real estate loan which negatively impacted income in the quarter ending September 30, 2014, as compared to approximately $360 thousand accreted to income due to a payment on one loan in the quarter ending June 30, 2014 and approximately $1.2 million accreted to income due to payments on two loans during the three month period ending September 30, 2013. The average interest rate on total interest-bearing liabilities decreased to 0.47% for the three months ended September 30, 2014 compared to 0.53% for the three months ended September 30, 2013. The average interest rate on total interest-bearing liabilities decreased to 0.45% for the nine months ended September 30, 2014 compared to 0.56% for the nine months ended September 30, 2013.
Old Line Bancshares, Inc. announced plans to realign branch offices within our footprint, which includes the closing and consolidation of four branches. The branches to be closed are Crofton Centre, Lexington Park, Solomons and Waldorf Charles County Plaza. All of these branches have existing Old Line Bank branches within close proximity. The closing of the branches, which is scheduled for December 2014, will result in an estimated pre-tax cost savings of approximately $1.6 million in 2015. One-time charges related to the branch consolidation are estimated to be up to $1.2 million and will be recognized upon closing of the branches.
"Making the decision to consolidate branches is never an easy one," said James W. Cornelsen, President and Chief Executive Officer of Old Line Bancshares, Inc. "We carefully considered our clients' needs while maximizing efficiencies and ensuring the future growth of the Bank. The planned closings and consolidations are a result of an evaluation that measured near-term growth potential in the current locations as well as the Bank's ability to continue to service clients' needs at nearby locations."
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, Calvert, Charles, Prince George's and St. Mary's. It also targets customers throughout the greater Washington, D.C. metropolitan area.
The statements in this press release that are not historical facts, in particular the statements with respect to planned branch closings and the anticipated associated costs and savings, improving asset quality, loan and deposit growth and enhanced revenue, 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, 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 | ||||||
|
September 30, 2014 |
June 30, 2014 |
March 31, 2014 |
December 31, 2013 (1) |
September 30, 2013 |
||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||
| Cash and due from banks | $ 42,266,194 | $ 29,887,334 | $ 54,197,169 | $ 28,316,351 | $ 49,957,119 | |
| Interest bearing accounts | 30,396 | 30,389 | 30,383 | 30,375 | 30,364 | |
| Federal funds sold | 533,612 | 304,246 | 178,806 | 711,574 | 1,005,491 | |
| Total cash and cash equivalents | 42,830,202 | 30,221,969 | 54,406,358 | 29,058,300 | 50,992,974 | |
| Investment securities available for sale | 163,535,833 | 155,706,684 | 172,094,347 | 172,169,776 | 181,527,632 | |
| Loans held for sale | 5,735,282 | 4,074,911 | 1,646,330 | 2,014,711 | 22,584,750 | |
| Loans held for investment, less allowance for loan losses of $3,872,197 and $4,929,213 for September 30, 2014 and December 31, 2013. | 883,905,233 | 889,524,786 | 849,429,721 | 847,248,590 | 805,890,567 | |
| Equity securities at cost | 4,304,197 | 4,304,196 | 4,304,197 | 5,669,807 | 5,850,652 | |
| Premises and equipment | 34,366,258 | 34,604,271 | 34,661,659 | 35,215,868 | 35,520,366 | |
| Accrued interest receivable | 3,002,457 | 2,978,470 | 3,131,042 | 3,432,924 | 3,256,311 | |
| Deferred income taxes | 19,843,857 | 19,850,224 | 20,639,961 | 21,868,076 | 21,451,728 | |
| Bank owned life insurance | 31,214,396 | 31,000,380 | 30,787,554 | 30,577,187 | 30,357,357 | |
| Other real estate owned | 2,699,846 | 4,627,465 | 4,593,154 | 4,311,342 | 5,909,260 | |
| Goodwill | 7,793,665 | 7,793,665 | 7,793,665 | 7,793,665 | 7,793,665 | |
| Core deposit intangible | 4,633,766 | 4,846,737 | 5,058,951 | 5,287,501 | 5,518,619 | |
| Other assets | 4,128,206 | 3,732,934 | 4,390,527 | 2,575,377 | 3,059,574 | |
| Total assets | $ 1,207,993,198 | $ 1,193,266,692 | $ 1,192,937,466 | $ 1,167,223,124 | $ 1,179,713,455 | |
| Deposits | ||||||
| Non-interest bearing | $ 247,291,192 | $ 237,614,952 | $ 234,512,077 | $ 228,733,624 | $ 223,503,418 | |
| Interest bearing | 772,344,384 | 771,801,936 | 773,640,266 | 745,625,862 | 761,869,410 | |
| Total deposits | 1,019,635,576 | 1,009,416,888 | 1,008,152,343 | 974,359,486 | 985,372,828 | |
| Short term borrowings | 35,558,734 | 35,769,108 | 38,193,867 | 49,530,125 | 56,204,082 | |
| Long term borrowings | 6,017,844 | 6,043,715 | 6,071,856 | 6,093,074 | 6,118,744 | |
| Accrued interest payable | 241,740 | 229,939 | 241,981 | 264,807 | 250,164 | |
| Accrued pension | 5,069,745 | 5,003,784 | 4,996,120 | 4,921,241 | 4,844,855 | |
| Income taxes payable | 3,406,234 | 2,376,461 | 2,988,981 | 2,556,609 | 371,026 | |
| Other liabilities | 4,557,087 | 2,252,083 | 2,744,510 | 2,948,464 | 3,419,993 | |
| Total liabilities | 1,074,486,960 | 1,061,091,978 | 1,063,389,658 | 1,040,673,806 | 1,056,581,692 | |
| Stockholders' equity | ||||||
| Common stock | 107,864 | 107,854 | 107,854 | 107,772 | 107,612 | |
| Additional paid-in capital | 104,900,904 | 104,820,171 | 104,748,891 | 104,622,171 | 104,408,960 | |
| Retained earnings | 28,826,765 | 27,621,537 | 26,283,617 | 24,879,275 | 20,882,086 | |
| Accumulated other comprehensive (loss) | (589,650) | (639,502) | (1,871,087) | (3,359,823) | (2,628,710) | |
| Total Old Line Bancshares, Inc. stockholders' equity | 133,245,883 | 131,910,060 | 129,269,275 | 126,249,395 | 122,769,948 | |
| Non-controlling interest | 260,355 | 264,654 | 278,533 | 299,923 | 361,815 | |
| Total stockholders' equity | 133,506,238 | 132,174,714 | 129,547,808 | 126,549,318 | 123,131,763 | |
| Total liabilities and stockholders' equity | $ 1,207,993,198 | $ 1,193,266,692 | $ 1,192,937,466 | $ 1,167,223,124 | $ 1,179,713,455 | |
| Shares of basic common stock outstanding | 10,786,370 | 10,785,370 | 10,785,370 | 10,777,112 | 10,761,112 | |
| (1) Financial information as of December 31, 2013 has been derived from audited financial statements. | ||||||
| Old Line Bancshares, Inc. & Subsidiaries | |||||||
| Consolidated Statements of Income | |||||||
|
Three Months Ended September 30, 2014 |
Three Months Ended June 30, 2014 |
Three Months Ended March 31, 2014 |
Three Months Ended December 31, 2013 (1) |
Three Months Ended September 30, 2013 |
Nine Months Ended September 30, 2014 |
Nine Months Ended September 30, 2013 |
|
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||
| Interest income | |||||||
| Loans, including fees | $ 10,232,684 | $ 10,599,999 | $ 10,333,973 | $ 11,519,191 | $ 11,527,459 | $ 31,166,655 | $ 28,687,187 |
| Investment securities and other | 885,324 | 1,017,039 | 1,037,897 | 1,060,493 | 1,031,015 | 2,940,261 | 2,995,967 |
| Total interest income | 11,118,008 | 11,617,038 | 11,371,870 | 12,579,684 | 12,558,474 | 34,106,916 | 31,683,154 |
| Interest expense | |||||||
| Deposits | 850,964 | 856,639 | 894,303 | 923,039 | 970,911 | 2,601,906 | 2,793,005 |
| Borrowed funds | 111,693 | 148,918 | 118,276 | 122,522 | 111,728 | 378,887 | 363,687 |
| Total interest expense | 962,657 | 1,005,557 | 1,012,579 | 1,045,561 | 1,082,639 | 2,980,793 | 3,156,692 |
| Net interest income | 10,155,351 | 10,611,481 | 10,359,291 | 11,534,123 | 11,475,835 | 31,126,123 | 28,526,462 |
| Provision for loan losses | 555,134 | 1,544,280 | 269,769 | 514,190 | 590,000 | 2,369,183 | 990,000 |
| Net interest income after provision for loan losses | 9,600,217 | 9,067,201 | 10,089,522 | 11,019,933 | 10,885,835 | 28,756,940 | 27,536,462 |
| Non-interest income | |||||||
| Service charges on deposit accounts | 483,865 | 493,482 | 451,596 | 472,945 | 466,571 | 1,428,943 | 1,134,986 |
| Gain on sales or calls of investment securities | -- | 129,911 | -- | -- | -- | 129,911 | 641,088 |
| Gain on sale of stock | -- | -- | 96,993 | -- | -- | 96,993 | -- |
| Earnings on bank owned life insurance | 248,259 | 246,371 | 243,607 | 252,265 | 253,894 | 738,237 | 587,763 |
| Gains (losses) on disposal of assets | -- | 17,919 | -- | -- | -- | 17,919 | (104,639) |
| Gain on sale of loans | 224,930 | 195,829 | 106,720 | 3,601,972 | 236,167 | 527,478 | 477,587 |
| Other fees and commissions | 348,090 | 784,622 | 493,209 | 852,470 | 461,724 | 1,625,314 | 1,070,167 |
| Total non-interest income | 1,305,144 | 1,868,134 | 1,392,125 | 5,179,652 | 1,418,356 | 4,564,795 | 3,806,952 |
| Non-interest expense | |||||||
| Salaries & employee benefits | 4,602,520 | 4,051,407 | 4,873,634 | 4,668,944 | 4,684,407 | 13,527,562 | 12,139,833 |
| Occupancy & Equipment | 1,367,808 | 1,436,564 | 1,586,777 | 1,513,265 | 1,377,927 | 4,390,541 | 3,573,342 |
| Data processing | 368,717 | 312,042 | 307,160 | 393,863 | 459,973 | 987,919 | 1,028,907 |
| Merger and integration | -- | -- | 29,167 | 349,028 | 143,082 | 29,167 | 3,169,917 |
| Core deposit amortization | 212,970 | 212,214 | 228,550 | 231,119 | 231,118 | 653,734 | 607,575 |
| (Gains) losses on sales of other real estate owned | (260,533) | (79,127) | (203,068) | (210,665) | 11,072 | (542,728) | 212,296 |
| OREO expense | 159,238 | 112,659 | 83,066 | 210,122 | 159,234 | 354,963 | 628,307 |
| Other operating | 2,078,155 | 2,446,147 | 2,071,256 | 2,284,281 | 2,063,596 | 6,595,558 | 5,393,577 |
| Total non-interest expense | 8,528,875 | 8,491,906 | 8,976,542 | 9,439,957 | 9,130,409 | 25,996,716 | 26,753,754 |
| Income before income taxes | 2,376,486 | 2,443,429 | 2,505,105 | 6,759,628 | 3,173,782 | 7,325,019 | 4,589,660 |
| Income tax expense | 636,239 | 687,973 | 690,737 | 2,393,268 | 970,510 | 2,014,950 | 1,208,816 |
| Net income | 1,740,247 | 1,755,456 | 1,814,368 | 4,366,360 | 2,203,272 | 5,310,069 | 3,380,844 |
| Less: Net (loss) attributable to the noncontrolling interest | (4,299) | (13,880) | (21,389) | (61,892) | (5,142) | (39,568) | (29,732) |
| Net income available to common stockholders | $ 1,744,546 | $ 1,769,336 | $ 1,835,757 | $ 4,428,252 | $ 2,208,414 | $ 5,349,637 | $ 3,410,576 |
| Earnings per basic share | $ 0.16 | $ 0.16 | $ 0.17 | $ 0.41 | $ 0.22 | $ 0.50 | $ 0.40 |
| Earnings per diluted share | $ 0.16 | $ 0.16 | $ 0.17 | $ 0.41 | $ 0.22 | $ 0.49 | $ 0.40 |
| Dividend per common share | $ 0.05 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.04 | $ 0.13 | $ 0.12 |
| Average number of basic shares | 10,785,881 | 10,785,370 | 10,780,141 | 10,768,104 | 10,004,138 | 10,783,818 | 8,464,113 |
| Average number of dilutive shares | 10,921,555 | 10,948,368 | 10,942,110 | 10,891,654 | 10,117,380 | 10,937,720 | 8,565,602 |
| (1) Financial information as of December 31, 2013 has been derived from audited financial statements. | |||||||
| Old Line Bancshares, Inc. & Subsidiaries | ||||||||||||
| Average Balances, Interest and Yields | ||||||||||||
| 9/30/2014 | 12/31/2013 | 12/31/2013 | 12/31/2013 | 9/30/2013 | ||||||||
|
Average Balance |
Yield |
Average Balance |
Yield |
Average Balance |
Yield |
Average Balance |
Yield |
Average Balance |
Yield | |||
| Assets: | ||||||||||||
| Int. Bearing Deposits | $ 3,896,273 | 0.17% | $ 4,024,265 | 0.17% | $ 1,352,504 | 0.12% | $ 2,903,193 | 0.11% | $ 2,997,163 | 0.09% | ||
| Investment Securities (2) | 159,259,044 | 2.94% | 170,389,632 | 3.00% | 174,564,325 | 3.06% | 188,455,728 | 2.82% | 193,421,563 | 2.70% | ||
| Loans | 897,381,372 | 4.57% | 865,944,038 | 4.99% | 851,079,999 | 5.00% | 837,359,182 | 5.54% | 817,877,455 | 5.67% | ||
| Allowance for Loan Losses | (6,422,492) | (5,290,130) | (5,001,250) | (4,609,398) | (4,353,910) | |||||||
| Total Loans Net of allowance | 890,958,880 | 4.60% | 860,653,908 | 5.02% | 846,078,749 | 5.03% | 832,749,784 | 5.57% | 813,523,545 | 5.71% | ||
| Total interest-earning assets | 1,054,114,197 | 4.33% | 1,035,067,805 | 4.67% | 1,021,995,578 | 4.69% | 1,024,108,705 | 5.05% | 1,009,942,271 | 5.11% | ||
| Noninterest bearing cash | 42,071,667 | 39,297,001 | 36,258,104 | 38,364,347 | 40,562,522 | |||||||
| Other Assets | 109,199,887 | 109,464,228 | 110,237,569 | 111,316,325 | 113,104,275 | |||||||
| Total Assets | $ 1,205,385,751 | $ 1,183,829,034 | $ 1,168,491,251 | $ 1,173,789,377 | $ 1,163,609,068 | |||||||
| Liabilities and Stockholders' Equity | ||||||||||||
| Interest-bearing Deposits | $ 776,032,831 | 0.44% | $ 768,879,677 | 0.45% | $ 751,439,481 | 0.48% | $ 754,128,604 | 0.49% | $ 770,907,260 | 0.50% | ||
| Borrowed Funds | 39,031,131 | 1.14% | 41,102,469 | 1.45% | 51,661,794 | 0.93% | 53,222,290 | 0.91% | 41,022,029 | 1.08% | ||
| Total interest bearing liabilities | 815,063,962 | 0.47% | 809,982,146 | 0.50% | 803,101,275 | 0.51% | 807,350,894 | 0.51% | 811,929,289 | 0.53% | ||
| Noninterest bearing deposits | 247,346,466 | 234,063,213 | 229,229,562 | 228,810,018 | 226,431,720 | |||||||
| 1,062,410,428 | 1,044,045,359 | 1,032,330,837 | 1,036,160,912 | 1,038,361,009 | ||||||||
| Other Liabilities | 10,072,582 | 9,603,037 | 10,813,815 | 8,360,917 | 7,569,553 | |||||||
| Noncontrolling Interest | 262,435 | 270,521 | 285,355 | 300,800 | 363,349 | |||||||
| Stockholder's Equity | 132,640,306 | 129,910,117 | 125,061,244 | 128,966,748 | 117,315,157 | |||||||
| Total Liabilities and Stockholder's Equity | $ 1,205,385,751 | $ 1,183,829,034 | $ 1,168,491,251 | $ 1,173,789,377 | $ 1,163,609,068 | |||||||
| Net interest spread | 3.86% | 4.17% | 4.18% | 4.54% | 4.58% | |||||||
|
Net interest income and Net interest margin(1) |
$ 10,545,444 | 3.97% | $ 11,047,069 | 4.28% | $ 10,809,169 | 4.29% | $ 11,986,354 | 4.64% | $ 11,933,938 | 4.69% | ||
| (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 negatively impacted the yield on loans and decreased the net interest margin for the three month period ending September 30, 2014 compared to a positive impact in yield on loans in each of the prior four periods as follows:
| 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | ||||||
|
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) | $ (16,219) | (0.01) | $ (3,509) | (0.00)% | $ 7,468 | 0.00% | $ 102 | 0.00% | $ 14,763 | 0.01 |
| Mortgage loans (1) | (278,619) | (0.10) | 344,403 | 0.13 | 287,526 | 0.11 | 1,322,480 | 0.51 | 1,221,653 | 0.48 |
| Consumer loans | 4,209 | 0.00 | 6,338 | 0.00 | 4,635 | 0.00 | 7,821 | 0.00 | 6,032 | 0.00 |
| Interest bearing deposits | 131,837 | 0.05 | 162,452 | 0.06 | 129,327 | 0.05 | 164,527 | 0.06 | 178,556 | 0.07 |
| Total Fair Value Accretion (Amortization) | $ (158,792) | (0.06) | $ 509,684 | 0.19% | $ 428,956 | 0.16% | $ 1,494,930 | 0.57% | $1,421,004 | 0.56 |
| (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:
| 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | ||||||
|
Net Interest Income |
Yield |
Net Interest Income |
Yield |
Net Interest Income |
Yield |
Net Interest Income |
Yield |
Net Interest Income |
Yield | |
| GAAP net interest income | 10,155,351 | 3.82% | $ 10,611,481 | 4.11% | $ 10,359,291 | 4.11% | $ 11,534,123 | 4.46% | $ 11,475,835 | 4.51% |
| Tax equivalent adjustment | ||||||||||
| Federal funds sold | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- |
| Investment securities | 294,770 | 0.11 | 258,980 | 0.10 | 281,377 | 0.11 | 282,137 | 0.11 | 286,755 | 0.11 |
| Loans | 95,323 | 0.04 | 176,608 | 0.07 | 168,501 | 0.07 | 170,094 | 0.07 | 171,348 | 0.07 |
| Total tax equivalent adjustment | 390,093 | 0.15 | 435,588 | 0.17 | 449,878 | 0.18 | 452,231 | 0.18 | 458,103 | 0.18 |
| Tax equivalent interest yield | $ 10,545,444 | 3.97% | $ 11,047,069 | 4.28% | $ 10,809,169 | 4.29% | $ 11,986,354 | 4.64% | $ 11,933,938 | 4.69% |
| Old Line Bancshares, Inc. & Subsidiaries | |||||
| Selected Loan Information | |||||
| (Dollars in thousands) | |||||
|
September 30, 2014 |
June 30, 2014 |
March 31, 2014 |
December 31, 2013 |
September 30, 2013 |
|
| Acquired Loans(1) | |||||
| Accruing | $ 183,102 | $ 199,859 | $ 206,517 | $ 214,087 | $ 227,455 |
| Non-accrual(2) | 1,291 | 593 | 861 | 663 | -- |
| Accruing 30-89 days past due | 1,569 | 1,478 | 2,977 | 4,465 | 2,985 |
| Accruing 90 or more days past due | 942 | 1,271 | 477 | 1,655 | 2,434 |
| Net charge offs | 316 | 106 | 148 | (43) | 405 |
| Legacy Loans(3) | |||||
| Accruing | $ 698,589 | $ 691,591 | $ 633,426 | $ 620,560 | $ 565,917 |
| Non-accrual | 3,263 | 7,176 | 7,202 | 8,156 | 1,870 |
| Accruing 30-89 days past due | 3,411 | 2,177 | 1,601 | 1,574 | 2,292 |
| Accruing 90 or more days past due | 305 | 674 | 218 | -- | 1,951 |
| Net charge offs | 2,691 | (4) | 169 | 56 | (3) |
| Allowance for loan losses as % of held for investment loans | 0.44% | 0.71% | 0.57% | 0.58% | 0.55% |
| Allowance for loan losses as % of legacy loans | 0.55% | 0.80% | 0.76% | 0.78% | 0.77% |
| Total non-performing loans as a % of held for investment loans | 0.96% | 1.08% | 1.56% | 1.73% | 0.77% |
| Total non-performing assets as a % of total assets | 0.70% | 1.20% | 1.12% | 1.27% | 1.03% |
| (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. | |||||