Old Line Bancshares, Inc. Reports Strong Organic Growth In Addition To The Acquisition Of WSB Holdings, Inc. During The Six Months Ended June 30, 2013

BOWIE, Md., July 30, 2013 (GLOBE NEWSWIRE) -- Old Line Bancshares, Inc. (Nasdaq:OLBK), the parent company of Old Line Bank, reported that total assets and net loans both increased by 33.1% while deposits increased by 35.4% for the six months ended June 30, 2013. The increases were attributable to strong organic growth as well as the completion of the previously announced merger with WSB Holdings, Inc. ("WSB"). Net income decreased $2.1 million to a net loss of $84,285 for the three months ended June 30, 2013, compared to net income of $2.0 million for the three months ended June 30, 2012. Earnings were ($0.01) per basic and diluted common share for the three months ended June 30, 2013 and $0.30 and $0.29, respectively, per basic and diluted common share, for the same period in 2012. This decrease is primarily the result of $2.9 million of merger related expenses incurred during the second quarter of 2013. These merger related expenses were primarily related to legal fees, investment banking fees, severance and charges associated with the termination of WSB's core data processing contract. Earnings were $1.2 million for the six months ended June 30, 2013, compared with $3.8 million for the same six month period last year. Earnings were $0.16 and $0.15, respectively, per basic and diluted common share compared to $0.55 per basic and diluted share for the same period last year. As with the three month period, the decrease is primarily the result of an increase in non-interest expenses including merger related costs that totaled $3.0 million for the six month period as a result of merger with WSB.

HIGHLIGHTS:
  • The merger with WSB became effective May 10, 2013 causing total assets to grow to $1.1 billion at June 30, 2013 compared to $861.9 million at December 31, 2012.  
  • Net loss of $84,285, or $0.01 per basic share was recorded for the three month period ending June 30, 2013, compared to net income of $2.0 million or $.30 per basic share for the second quarter of 2012, representing a decrease of $2.1 million compared to the second quarter of 2012.  
  • Net income was $1.2 million or $0.16 per basic share for the six months ended June 30, 2013 compared to $3.8 million, or $0.55 per basic share for the same period in 2012.  
  • Net loans increased by $196.8 million, or 33.1%, since December 31, 2012.  
  • Total deposits grew by $260.1 million, or 35.4%, since December 31, 2012.  
  • The second quarter Return on Average Assets (ROAA) and Return on Average Equity (ROAE) were (0.03%) and (0.35%), respectively, compared to ROAA and ROAE of 0.99% and 12.27%, respectively, for the second quarter of 2012.  
  • For the six months ended June 30, 2013, ROAA and ROAE were 0.26% and 2.89%, respectively, as compared to ROAA and ROAE of 0.93% and 11.59%, respectively, for the six months ended June 30, 2012.  
  • The net interest margin for the second quarter of 2013 was 4.28% compared to 4.84% for the same period in 2012.  
  • Non-performing assets increased to 1.92% of total assets at June 30, 2013 compared to 1.31% at June 30, 2012 and 1.12% at December 31, 2012.

The significant increase in total loans for the six month period included $43.2 million, or 6.77% of organic growth and $153.5 million of loans acquired in the WSB transaction. Loan growth is comprised of an organic increase of $16.7 million, or 2.61% in the first quarter and $26.5 million, or 4.16% in the second quarter. Similarly, deposit growth was comprised of $37.2 million, or 4.81% of organic growth and $222.9 of deposits acquired in the WSB transaction. Deposits increased organically by $13.0 million, or 1.69% in the first quarter and $24.1 million or 3.12% in the second quarter.

 "We continue to generate strong organic loan growth while maintaining above average margins. As a result of the merger with WSB, we incurred anticipated merger and acquisition expenses during the quarter which negatively impacted second quarter and year to date earnings," stated James W. Cornelsen, President and Chief Executive Officer "With the dedication and teamwork of both organizations, the two core processing systems will be merged. We expect that project to be completed during the fourth quarter of 2013. We believe that Old Line Bank is well positioned to continue its profitable growth while also executing on our strategic initiatives to maximize shareholder value. We will maintain the WSB mortgage department which should enhance non-interest income. We also expect that the new Montgomery County, Maryland loan production office and the Old Line Financial Services team will increase interest and fee income in the future."

The decrease in net income during the second quarter of 2013 compared to the second quarter of 2012 was primarily the result of a $4.3 million, or 68.58%, increase in total non-interest expense, which was partially offset by a $740,000 increase in net interest income and a $175,000 decrease in the provision for loan losses. The increase in non-interest expenses was mainly attributable to increases in merger and integration expenses as well as salaries and benefits, occupancy and equipment expenses and data processing expenses. As noted above, merger and integration expenses increased $2.9 million compared to the same period in 2012 as a result of the WSB transaction. Salaries and benefits increased by $1.1 million or 36.43%, when compared to the second quarter of 2012 primarily as a result of the acquisition of WSB. Occupancy and equipment expenses increased $300,000 or 32.85% compared to the same period in 2012 primarily due to the additional branches acquired in the acquisition of WSB. In addition, a decrease of $800,000 in the fair value accretion in the three month period ended June 30, 2013, to $300,000 compared to $1.1 million for the three month period ended June 30, 2012 contributed to the decrease in net income.

Non-performing assets to total assets increased to 1.92% at June 30, 2013 compared to 1.12% at December 31, 2012 and 1.31% at June 30, 2012. The increase in non-performing assets from the prior periods is primarily the result of acquiring $22 million of non-performing assets from WSB in the merger. The percentage of non-performing assets after the completion of the Maryland Bankcorp acquisition in 2011 was similarly high, at 1.89%, but decreased in the periods following such acquisition, and we expect a similar decrease following the recent acquisition of WSB as well. The allowance for loan losses as a percent of gross loans decreased to 0.53% as compared to 0.71% at June 30, 2012. The decrease in the allowance for loan losses as a percent of gross loans is primarily a result of the addition of the acquired loans which are recorded at estimated fair value on their purchase date with no carryover of the related allowance for loan and lease losses. The legacy loan portfolio's asset quality remained strong during the quarter ended June 30, 2013. As a result, the provision expense was decreased for the second quarter of 2013 as compared to the same quarter in 2012. Based on internal analysis, the ratio of non-performing assets to total assets, and the satisfactory historical performance of the loan portfolio, management believes that the allowance continues to appropriately reflect the inherent risk of loss in the portfolio and the current economic climate regarding the loans acquired in an acquisition. However, should there be  any evidence that there is deterioration in the loan portfolio the allowance will be adjusted accordingly through a charge to provision expense to increase the allowance.

As previously reported, the Company announced the merger with WSB became effective May 10, 2013. Until final conversion, it is anticipated that the Company will continue to incur merger related expenses that may cause earnings to be lower than would otherwise be expected. However, future merger related costs should be substantially lower than those incurred to date and it is anticipated the WSB merger will be accretive to earnings by the first quarter of 2014. This combination created a $1.1 billion banking institution and has allowed Old Line to expand its financial services with the addition of a successful and growing mortgage origination team. Old Line also anticipates that the acquisition and integration of WSB will enhance the liquidity of its  stock as well as overall financial condition and operating performance.

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 the anticipated effects on us and our stock of our recent merger with WSB, including that the merger will be accretive to earnings by the first quarter of 2014 and anticipated merger costs going forward, anticipated decreases in our percentages of non-performing assets following the recent WSB acquisition, continued profitable growth, , increased interest and fee income and the adequacy of our loan loss allowance constitute "forward-looking statements" 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, that integrating WSB's business into our own could take longer or be more difficult than anticipated, deterioration in economic conditions or a slower than anticipated recovery in our target markets or nationally, sustained high levels of or further 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, 2013 March 31, 2013 December 31, 2012 (1) September 30, 2012 June 30, 2012
  (Unaudited) (Unaudited)   (Unaudited) (Unaudited)
 Cash and due from banks   $ 50,689,336  $ 37,651,112  $ 28,332,456  $ 43,813,588  $ 37,533,354
 Interest bearing accounts   30,352  30,291  130,192  26,137  122,824
 Federal funds sold   3,017,257  331,153  228,113  908,495  508,150
 Total cash and cash equivalents   53,736,945  38,012,556  28,690,761  44,748,220  38,164,328
 Investment securities available for sale   184,190,791  154,081,188  171,541,222  180,363,532  168,502,783
 Loans, less allowance for loan losses  791,936,893  611,850,594  595,144,928  573,147,401  573,146,131
 Equity securities at cost   3,709,490  3,174,220  3,615,444  3,828,237  3,765,079
 Premises and equipment   35,313,769  24,912,937  25,133,013  23,883,734  23,763,775
 Accrued interest receivable   3,623,274  2,511,753  2,639,483  2,606,790  2,592,123
 Prepaid income taxes   621,176  --   --   --   -- 
 Deferred income taxes   23,111,238  8,015,351  7,139,545  6,791,483  7,346,728
 Bank owned life insurance   30,135,483  16,977,347  16,869,307  16,757,707  16,644,925
 Prepaid pension   --   --   --   1,030,551  1,030,551
 Other real estate owned   5,396,654  2,726,910  3,719,449  3,231,449  3,490,730
 Goodwill   6,847,424  633,790  633,790  633,790  633,790
 Core deposit intangible   5,749,737  3,513,889  3,691,471  3,869,054  4,046,636
 Other assets   2,711,768  2,575,612  3,038,064  2,990,530  3,036,820
 Total assets   $ 1,147,084,642  $ 868,986,147  $ 861,856,477  $ 863,882,478  $ 846,164,399
           
 Deposits           
 Non-interest bearing   $ 213,570,493  $ 188,172,189  $ 188,895,263  $ 185,347,907  $ 186,639,878
 Interest bearing   781,968,601  560,330,114  546,562,555  545,730,571  532,956,475
 Total deposits   995,539,094  748,502,303  735,457,818  731,078,478  719,596,353
 Short term borrowings   28,818,101  31,510,107  37,905,467  44,544,608  41,955,385
 Long term borrowings   6,142,962  6,166,788  6,192,350  6,216,463  6,239,129
 Accrued interest payable   259,847  279,907  311,735  341,494  359,367
 Accrued pension   4,768,470  4,690,584  4,615,699  4,570,725  4,480,261
 Other liabilities   3,825,204  2,749,707  2,120,247  2,757,115  1,853,766
 Total liabilities   1,039,353,678  793,899,396  786,603,316  789,508,883  774,484,261
           
 Stockholders' equity           
 Common stock   98,202  68,538  68,454  68,308  68,285
 Additional paid-in capital   92,145,572  53,875,593  53,792,015  53,647,456  53,574,827
 Retained earnings   19,066,586  19,543,682  18,531,387  17,087,831  15,332,768
 Accumulated other comprehensive loss   (3,946,354)  1,220,486  2,469,758  3,171,006  2,284,600
 Total Old Line Bancshares, Inc.  stockholders' equity   107,364,006  74,708,299  74,861,614  73,974,601  71,260,480
 Non-controlling interest   366,958  378,452  391,547  398,994  419,658
 Total stockholders' equity   107,730,964  75,086,751  75,253,161  74,373,595  71,680,138
 Total liabilities and  stockholders' equity   $ 1,147,084,642  $ 868,986,147  $ 861,856,477  $ 863,882,478  $ 846,164,399
 Shares of basic common stock outstanding   9,820,217  6,853,814  6,845,432  6,830,832  6,828,452
           
(1)   Financial information as of December 31, 2012 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,
  2013 2013 2012 (1) 2012 2012 2013 2012
  (Unaudited) (Unaudited)   (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest revenue              
 Loans, including fees  $ 9,327,905  $ 7,831,823  $ 8,521,466  $ 8,702,142  $ 8,632,296  $ 17,159,728  $ 16,585,131
 Investment securities and other  979,699  985,253  1,034,100  1,098,431  1,131,401  1,964,952  2,280,852
 Total interest revenue  10,307,604  8,817,076  9,555,566  9,800,573  9,763,697  19,124,680  18,865,983
Interest expense              
 Deposits  964,955  857,139  963,334  1,057,075  1,087,200  1,822,094  2,214,698
 Borrowed funds  139,472  112,487  190,310  206,721  213,111  251,959  425,487
 Total interest expense  1,104,427  969,626  1,153,644  1,263,796  1,300,311  2,074,053  2,640,185
 Net interest income  9,203,177  7,847,450  8,401,922  8,536,777  8,463,386  17,050,627  16,225,798
Provision for loan losses  200,000  200,000  400,000  375,000  375,000  400,000  750,000
 Net interest income after  provision for loan losses  9,003,177  7,647,450  8,001,922  8,161,777  8,088,386  16,650,627  15,475,798
Non-interest revenue              
 Service charges on  deposit accounts  367,674  300,741  318,250  315,468  328,142  668,415  647,469
 Gain on sales or calls  of investment securities  9,659  631,429  307,242  289,511  282,858  641,088  560,028
 Earnings on bank owned  life insurance  200,641  133,228  136,171  137,082  138,496  333,869  275,201
 Gains (losses) on sales  other real estate owned  145,795  (200,454)  --   (48,509)  191,201  (201,224)  159,213
 Losses on disposal of assets  (19,078)  (85,561)  --   --   --   (104,639)  -- 
 Gain on sale of loans  146,565  --   --   --   --   146,565  -- 
 Other fees and commissions  301,268  247,683  182,450  146,550  215,089  695,516  392,688
 Total non-interest revenue  1,152,524  1,027,066  944,113  840,102  1,155,786  2,179,590  2,034,599
Non-interest expense              
 Salaries & employee benefits  4,126,567  3,232,677  3,188,366  3,016,334  3,024,815  7,359,245  5,833,809
 Occupancy & Equipment  1,214,947  1,068,867  931,197  933,775  914,576  2,283,815  1,822,447
 Pension plan termination  --   --   700,884  --   --     -- 
 Data processing  329,878  239,057  238,830  214,187  192,232  568,934  416,967
 Merger and integration  2,786,350  240,485  363,375  49,290  29,166  3,026,835  58,333
 Core deposit premium  198,875  177,582  177,582  177,582  177,582  376,457  372,257
 OREO expense  154,908  314,165  124,167  39,092  320,795  469,073  813,183
 Other operating  1,723,373  1,606,608  1,531,026  1,651,498  1,590,002  3,329,981  2,618,345
 Total non-interest expense  10,534,898  6,879,441  7,255,427  6,081,758  6,249,168  17,414,340  11,935,341
               
Income (loss) before income taxes  (379,197)  1,795,075  1,690,608  2,920,121  2,995,004  1,415,877  5,575,056
 Income tax (benefit) expense  (283,417)  521,722  (18,808)  912,490  982,759  238,305  1,826,764
Net income (loss)  (95,780)  1,273,353  1,709,416  2,007,631  2,012,245  1,177,572  3,748,292
 Less: Net income (loss)  attributable to the  noncontrolling interest  (11,495)  (13,095)  (7,447)  (20,664)  (17,067)  (24,590)  (37,014)
Net income (loss) available to  common stockholders  $ (84,285)  $ 1,286,448  $ 1,716,863  $ 2,028,295  $ 2,029,312  $ 1,202,162  $ 3,785,306
Earnings (loss) per basic share  $ (0.01)  $ 0.19  $ 0.25  $ 0.30  $ 0.30  $ 0.16  $ 0.55
Earnings (loss) per diluted share  $ (0.01)  $ 0.19  $ 0.25  $ 0.29  $ 0.29  $ 0.16  $ 0.55
Dividend per common share  $ 0.04  $ 0.04  $ 0.04  $ 0.04  $ 0.04  $ 0.08  $ 0.08
Average number of basic shares  8,505,016  6,848,505  6,834,665  6,829,785  6,828,452  7,681,337  6,824,673
Average number of dilutive shares  8,609,164  6,950,749  6,929,296  6,909,147  6,905,041  7,585,449  6,871,727
               
(1)   Financial information as of December 31, 2012 has been derived from audited financial statements.
                     
Old Line Bancshares, Inc. & Subsidiaries
Average Balances, Interest and Yields
                     
  6/30/2013 3/31/2013 12/31/2012 9/30/2012 6/30/2012
  Average Balance Yield Average Balance Yield Average Balance Yield Average Balance Yield Average Balance Yield
Assets:                    
Int. Bearing Deposits   $ 6,978,382 0.11%  $ 1,870,920 0.15%  $ 10,506,932 0.20%  $ 9,609,610 0.21%  $ 8,718,890 0.21%
Investment Securities  180,559,860 2.81%  168,672,425 3.06%  177,162,367 2.88%  171,086,288 3.11%  165,770,050 3.28%
Loans  721,222,893 5.28%  605,701,991 5.35%  587,421,759 5.86%  576,428,450 6.11%  558,859,415 6.27%
Allowance for Loan Losses  (4,164,025)    (4,058,816)    (4,186,009)    (4,266,214)    (3,966,131)  
 Total Loans  Net of allowance  717,058,868 5.31%  601,643,175 5.39%  583,235,750 5.90%  572,162,236 6.16%  554,893,284 6.32%
Total interest-earning assets  904,597,110 4.77%  772,186,520 4.87%  770,905,049 5.15%  752,858,134 5.39%  729,382,224 5.56%
Noninterest bearing cash  45,762,911    25,465,996    30,544,104    50,174,932    34,172,441  
Other Assets  85,200,150    62,206,398    61,756,948    61,911,524    62,310,069  
 Total Assets   $ 1,035,560,171    $ 859,858,914    $ 863,206,101    $ 864,944,590    $ 825,864,734  
                     
Liabilities and Stockholders' Equity                  
                     
Interest-bearing Deposits  $ 686,544,106 0.56%  $ 552,649,682 0.63%  $ 551,598,937 0.69%  $ 553,524,257 0.76%  $ 524,538,999 0.83%
Borrowed Funds  41,494,215 1.35%  40,335,859 1.13%  35,952,280 2.10%  49,608,300 1.66%  46,432,730 1.85%
Total interest-bearing  liabilities  728,038,321 0.61%  592,985,541 0.66%  587,551,217 0.78%  603,132,557 0.83%  570,971,729 0.92%
Noninterest bearing deposits  205,050,472    187,697,564    197,676,047    186,319,471    181,789,188  
   933,088,793    780,683,105    785,227,264    789,452,028    752,760,917  
                     
Other Liabilities  6,624,502    6,909,547    7,600,642    6,898,432    6,172,023  
Noncontrolling Interest  369,671    387,467    392,942    406,102    423,568  
Stockholder's Equity  95,477,205    71,878,795    69,985,253    68,188,028    66,508,226  
 Total Liabilities and  Stockholder's Equity  $ 1,035,560,171    $ 859,858,914    $ 863,206,101    $ 864,944,590    $ 825,864,734  
                     
Net interest spread   4.16%   4.21%   4.37%   4.56%   4.64%
Net interest income and  Net interest margin(1)  $ 9,657,000 4.28%  $ 8,299,213 4.36%  $ 8,818,546 4.55%  $ 8,932,729 4.72%  $ 8,775,024 4.84%

(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 positively impacted the yield on loans and increased the net interest margin as follows:
                     
  6/30/2013 3/31/2013 12/31/2012 9/30/2012 6/30/2012
  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)  $ 38,933 0.02%  $ 209,144 0.11%  $ 38,783 0.02%  $ 64,142 0.03%  $ 42,718 0.02%
Mortgage loans (1)  173,261  0.08  (4,500)  (0.00)  819,028  0.42  776,089  0.41  1,007,812  0.56
Consumer loans  2,876  0.00  2,371  0.00  2,188  0.00  1,968  0.01  1,899  0.00
Interest bearing deposits  85,046  0.04  33,461  0.02  33,379  0.02  33,847  0.01  57,081  0.03
Total Fair Value Accretion  $ 300,116 0.13%  $ 240,476 0.13%  $ 893,378 0.46%  $ 876,046 0.46%  $ 1,109,510 0.61%

(1)   Reclassification of a single loan from mortgage loans to commercial loans during the period caused the negative amortization in mortgage loans during the first quarter of 2013,  The impact of this reclassification was immaterial in prior periods.

Below is a reconciliation of the fully tax equivalent adjustments and the GAAP basis information presented in this report:
                     
  6/30/2013 3/31/2013 12/31/2012 9/30/2012 6/30/2012
  Net Interest Income Yield Net Interest Income Yield Net Interest Income Yield Net Interest Income Yield Net Interest Income Yield
GAAP net interest income  $ 9,203,177 4.08%  $ 7,847,450 4.12%  $ 8,401,922 4.34%  $ 8,536,777 4.51%  $ 8,463,386 4.67%
Tax equivalent adjustment                    
 Federal funds sold  1  0.00  2  0.00  1  0.00  --   --   1  0.00
 Investment securities  285,049  0.13  287,612  0.15  258,483  0.13  241,934  0.13  224,794  0.12
 Loans  168,773  0.07  164,149  0.09  158,140  0.08  154,018  0.08  86,843  0.05
Total tax equivalent adjustment  453,823  0.20  451,763  0.24  416,624  0.21  395,952  0.21  311,638  0.17
Tax equivalent interest yield  $ 9,657,000 4.28%  $ 8,299,213 4.36%  $ 8,818,546 4.55%  $ 8,932,729 4.72%  $ 8,775,024 4.84%
           
Old Line Bancshares, Inc. & Subsidiaries
Selected Loan Information
(Dollars in thousands)
  June 30, 2013 March 31, 2013 December 31, 2012 September 30, 2012 June 30, 2012
Acquired Loans(1)          
Non-accrual(2)  $ 23,684  $ 4,064  $ 4,092  $ 5,079  $ 4,842
Accruing 30-89 days past due  4,434  802  602  24  726
Accruing 90 or more days past due  8  --   6  82  940
           
Legacy Loans(3)          
Non-accrual  $ 1,889  $ 1,388  $ 1,818  $ 3,151  $ 1,787
Accruing 30-89 days past due  2,607  2,077  1,799  2,348  2,799
Accruing 90 or more days past due  --   --   --   2  -- 
           
Allowance for loan losses as % of gross loans 0.53% 0.66% 0.66% 0.78% 0.71%
Allowance for loan losses as % of legacy loans 0.81% 0.84% 0.85% 1.03% 0.96%
Total non-performing loans as a % of gross loans 2.77% 0.89% 0.99% 2.00% 1.92%
Total non-performing assets as a % of total assets 1.92% 0.94% 1.12% 1.34% 1.31%

(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. As provided for under ASC 310-30, we recognize interest income on these loans through the accretion of the difference between the carrying value of these loans and their expected cash flows.

(3)   Legacy loans represent total loans excluding loans acquired on April 1, 2011 and May 10, 2013.
CONTACT: OLD LINE BANCSHARES, INC.         MARK SEMANIE         ACTING CHIEF FINANCIAL OFFICER         (301) 430-2500

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