Market Overview

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

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

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

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

HIGHLIGHTS:

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

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

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

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

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

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

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

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

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

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

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

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

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

Old Line Bancshares, Inc. is the parent company of Old Line Bank, a Maryland chartered commercial bank headquartered in Bowie, Maryland, approximately 10 miles east of Andrews Air Force Base and 20 miles east of Washington, D.C. Old Line Bank has 19 branches located in its primary market area of suburban Maryland (Washington, D.C. suburbs and Southern Maryland) counties of Anne Arundel, Calvert, Charles, Prince George's and St. Mary's. It also targets customers throughout the greater Washington, D.C. metropolitan area. 

The statement in this press release that "Our goal is to continue to build our loan and deposit portfolios while maintaining asset quality and improving operating efficiency," constitutes a "forward-looking statement" as defined by Federal securities laws. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Actual results could differ materially from those currently anticipated due to a number of factors, including, but not limited to, deterioration in economic conditions or a slowdown in the recovery in our target markets or nationally, sustained high levels of or increases in the unemployment rate in our target markets, the actions of our competitors and our ability to successfully compete, in particular in new market areas, and changes in laws impacting our ability to collect on outstanding loans or otherwise negatively impact our business, including regulations implemented pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act enacted in July 2010. Forward-looking statements speak only as of the date they are made. Old Line Bancshares, Inc. will not update forward-looking statements to reflect factual assumptions, circumstances or events that have changed after a forward-looking statement was made. For further information regarding risks and uncertainties that could affect forward-looking statements Old Line Bancshares, Inc. may make, please refer to the filings made by Old Line Bancshares, Inc. with the U.S. Securities and Exchange Commission available at www.sec.gov.

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

The accretion of the fair value adjustments resulted in a positive impact in the yield on loans for the three months ending June 30, 2015 and 2014.    Fair value accretion for the current quarter and prior four quarter are as follows: 

  6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014
  Fair Value
Accretion
Dollars
% Impact on
Net Interest
Margin
Fair Value
Accretion
Dollars
% Impact on
Net Interest
Margin
Fair Value
Accretion
Dollars
% Impact on
Net Interest
Margin
Fair Value
Accretion
Dollars
% Impact on
Net Interest
Margin
Fair Value
Accretion
Dollars
% Impact on
Net Interest
Margin
Commercial loans (1)  $ (3,114)  (0.00)%  $ 8,690  0.00%  $ (969)  (0.00)%  $ (16,219)  (0.01)%  $ (3,509)  (0.00)%
Mortgage loans (1)  35,386  0.01  589,266  0.21  24,779  0.01  (278,619)  (0.10)  344,403  0.13
Consumer loans  4,298  0.00  11,390  0.00  6,686  0.00  4,209  0.00  6,338  0.00
Interest bearing deposits  37,677  0.01  37,263  0.01  110,503  0.04  131,837  0.05  162,452  0.06
Total Fair Value Accretion (Amortization)  $ 74,247  0.02%  $ 646,609  0.22%  $ 140,999  0.05%  $ (158,792)  (0.06)%  $ 509,684  0.19%
 (1) Negative accretion on commercial and mortgage loans is due to the early payoff of loans which caused a reduction in fair value income on acquired loan portfolio.

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

  6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014
  Net Interest
Income
Yield Net Interest
Income
Yield Net Interest
Income
Yield Net Interest
Income
Yield Net Interest
Income
Yield
GAAP net interest income  $ 11,171,187  3.86%  $ 11,461,904  4.17%  $ 10,577,401  3.91%  $ 10,155,351  3.82%  $ 10,611,481  4.11%
Tax equivalent adjustment                    
Federal funds sold  1  0.00  1  0.00  1  0.00  --   --   --   -- 
Investment securities  195,785  0.07  200,498  0.07  343,280  0.13  294,770  0.11  258,980  0.10
Loans  235,683  0.08  229,094  0.08  113,437  0.04  95,323  0.04  176,608  0.07
Total tax equivalent adjustment  431,469  0.15  429,593  0.15  456,718  0.17  390,093  0.15  435,588  0.17
Tax equivalent interest yield  $ 11,602,656  4.01%  $ 11,891,497  4.32%  $ 11,034,119  4.08%  $ 10,545,444  3.97%  $ 11,047,069  4.28%
 
Old Line Bancshares, Inc. & Subsidiaries
Selected Loan Information
(Dollars in thousands)
  June 30,
2015
March 31,
2015
December 31,
2014
September 30,
2014
June 30,
2014
Acquired Loans(1)          
Period End Loan Balance  $ 164,300  $ 171,527  $ 173,659  $ 186,896  $ 203,201
Deferred Costs  --   --   10  9  11
Accruing 161,495 165,956  167,704  183,094  199,859
Non-accrual(2)  2,546  2,518  1,958  1,291  593
Accruing 30-89 days past due  2,102  3,053  3,687  1,569  1,478
Accruing 90 or more days past due  --   --   310  942  1,271
Otther real estate owned  741  1,125  1,977  2,225  3,826
Net charge offs (recoveries)  320  (16)  52  316  106
           
Legacy Loans(3)          
Period End Loan Balance  $ 847,499  $ 795,532  $ 749,968  $ 699,833  $ 691,619
Deferred Costs  1,255  1,283  1,283  1,048  1,039
Accruing 845,391 793,576  746,376  692,854  681,592
Non-accrual  853  1,105  3,249  3,263  7,176
Accruing 30-89 days past due  1,199  851  343  3,411  2,177
Accruing 90 or more days past due  --   --   --   305  674
Other real estate owned  475  475  475  475  802
Net charge offs (recoveries)  (34)  224  (4)  2,691  (4)
           
Allowance for loan losses as % of held for investment loans 0.44% 0.48% 0.46% 0.44% 0.71%
Allowance for loan losses as % of legacy held for investment loans 0.52% 0.59% 0.57% 0.55% 0.80%
Allowance for loan losses as % of acquired held for investment loans 2.70% 2.60% 2.38% 2.07% 3.11%
Total non-performing loans as a % of held for investment loans 0.49% 0.37% 0.56% 0.96% 1.08%
Total non-performing assets as a % of total assets 0.38% 0.44% 0.65% 0.70% 1.20%
           
(1) Acquired loans represent all loans acquired on April 1, 2011 from MB&T and on May 10, 2013 from WSB. We originally recorded these loans at fair value upon acquisition.
(2) These loans are loans that are considered non-accrual because they are not paying in conformance with the original contractual agreement. At acquisition, we recorded these loans at fair value. Until the December 31, 2013 quarter, we recognized interest income on these loans through the accretion of the difference between the carrying value of these loans and their expected cash flows. In the fourth quarter of 2013, we are no longer recording interest on these loans that were not purchased as credit impaired.
(3) Legacy loans represent total loans excluding loans acquired on April 1, 2011 and May 10, 2013.
CONTACT: OLD LINE BANCSHARES, INC. ELISE HUBBARD CHIEF FINANCIAL OFFICER (301) 430-2560
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