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FINANCIAL | Retail Banking

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Stage

Acquired | Acquired

Valuation

$0000 

About Bay Bancorp

Bay Bancorp operates as a holding company for Bay Bank, FSB that provides banking products and services to small and medium-sized commercial and retail businesses, business professionals, and individual consumers in the central Maryland region. Its deposit products include demand, money market, and savings accounts, as well as time deposits, and certificate of deposit registry service and insured cash sweep deposits.

Bay Bancorp Headquarter Location

7151 Columbia Gateway Drive Suite A

Columbia, Maryland, 21046,

United States

410-312-5400

Latest Bay Bancorp News

Old Line Bancshares, Inc. Reports Organic Loan Growth of 7.58% for the Quarter Ended June 30, 2018 in Addition to the Completion of the Acquisition of Bay Bancorp, Inc.

Jul 24, 2018

July 24, 2018 16:40 ET | Source: Old Line Bancshares, Inc. BOWIE, Md., July 24, 2018 (GLOBE NEWSWIRE) -- Old Line Bancshares, Inc. (“Old Line Bancshares” or the “Company”) (Nasdaq: OLBK ), the parent company of Old Line Bank (the “Bank”), reports net income available to common stockholders decreased $1.2 million, or 31.33%, to $2.7 million for the three months ended June 30, 2018, compared to $4.0 million for the three month period ended June 30, 2017. Earnings were $0.17 per basic and diluted common share for the three months ended June 30, 2018, compared to $0.36 per basic and diluted common share for the three months ended June 30, 2017. The decrease in net income for the second quarter of 2018 as compared to the same 2017 period is primarily the result of an increase of $11.1 million in non-interest expense, offsetting the increases of $9.1 million in net interest income and $1.2 million in non-interest income. Net income included $7.1 million ($6.2 million net of taxes) in merger-related expenses (or $0.38 per basic and $0.37 per diluted common share) in connection with the Company’s acquisition of Bay Bancorp, Inc. (“BYBK”), the former parent company of Bay Bank, FSB (“Bay”), in April 2018. Excluding the merger-related expenses, adjusted operating earnings, which is a non-GAAP financial measure, for the three months ended June 30, 2018 would have been $8.9 million, or $0.55 per basic and $0.54 per diluted common share, a 124.09% increase over the three month period ended June 30, 2017. Our efficiency ratio stood at 79.55% for the three months ended June 30, 2018. Exclusive of the merger-related expenses, the adjusted efficiency ratio (a non-GAAP financial measure) improved to 52.67% for the three months ended June 30, 2018 compared to 61.11% for the same three month period last year. Net income available to common stockholders was $8.8 million for the six months ended June 30, 2018, compared to $7.9 million for the same period last year, an increase of $848 thousand, or 10.67%. Earnings were $0.61 per basic and $0.60 per diluted common share for the six months ended June 30, 2018, compared to $0.73 per basic and $0.71 per diluted common share for the same period last year. The increase in net income is primarily the result of increases of $12.6 million, or 44.26%, in net interest income and $1.1 million in non-interest income, partially offset by a $12.6 million increase in non-interest expenses. Included in net income for the 2018 period was $7.1 million ($6.2 million net of taxes, or $0.43 per basic and $0.42 per diluted common share) for merger-related expenses associated with the acquisition of BYBK as discussed above. Excluding the merger-related expenses, adjusted operating earnings (which is a non-GAAP financial measure) for the six months ended June 30, 2018 would have been $15.0 million or $1.04 per basic and $1.02 per diluted common share, a 88.34% increase over the six month period ended June 30, 2017. Our efficiency ratio stood at 69.76% for the six months ended June 30, 2018. Exclusive of the merger-related expenses, the adjusted efficiency ratio (a non-GAAP financial measure) improved to 54.26% for the six months ended June 30, 2018 compared to 60.32% for the same six month period last year. Net interest income increased during each of the three and six month periods ended June 30, 2018 compared to the same periods last year primarily as a result of increases in interest income and fees on loans driven by an increase in net loans held for investment, partially offset by increases in interest expense. Non-interest expense increased in both periods compared to 2017 primarily due to $7.1 million in merger-related expenses, as noted above, but additionally, salaries and benefits and occupancy expense increased as a result of the additional staff and the new branches that we acquired upon our acquisitions of DCB Bancshares, Inc. (“DCBB”), the former parent company of Damascus Community Bank (“DCB”), in July 2017 and BYBK in April 2018. As of June 30, 2018, the Company had total assets of approximately $2.9 billion, net loans of approximately $2.3 billion and deposits of approximately $2.2 billion. Net loans held for investment at June 30, 2018 increased $651.5 million, or 38.40%, compared to December 31, 2017 and $591.2 million, or 33.66%, compared to March 31, 2018. Net loans held for investment includes loans that were acquired in the BYBK acquisition of approximately $507 million at June 30, 2018. Organic loan growth during the three and six months ended June 30, 2018 was approximately $108.7 million, or 7.58%, and $188.5 million, or 13.92%, respectively. James W. Cornelsen, President and Chief Executive Officer of Old Line Bancshares, stated: “We are pleased to report the BYBK merger was successful and with the dedication and teamwork of personnel of Old Line Bank and the former BYBK, the two core processing systems were merged on June 1, 2018. As anticipated, merger and acquisition expenses we incurred during the second quarter due to the BYBK acquisition negatively impacted our second quarter and six month earnings. We had an outstanding second quarter with an organic increase in gross loans of $108.7 million or 7.58%. We believe the Company is positioned well for future growth.” HIGHLIGHTS: The merger with BYBK became effective on April 13, 2018, resulting in total assets of $2.9 billion at June 30, 2018. Net loans held for investment increased $591.2 million and $651.5 million, respectively, during the three and six month periods ended June 30, 2018, to $2.3 billion at June 30, 2018 from $1.7 billion at December 31, 2017 and $1.8 billion at March 31, 2018. Average gross loans increased $821.6 million, or 57.06%, and $581.3 million, or 41.19%, respectively, during the three and six month periods ended June 30, 2018, to $2.3 billion and $2.0 billion, respectively, during the three and six months ended June 30, 2018, from $1.4 billion during each of the three and six months ended June 30, 2017. Nonperforming assets increased slightly to 0.19% of total assets compared to 0.18% at December 31, 2017. The net interest margin during the three months ended June 30, 2018 was 3.80% compared to 3.60% for the same period in 2017. Total yield on interest earning assets increased to 4.58% for the three months ended June 30, 2018, compared to 4.28% for the same period last year. Interest expense as a percentage of total interest-bearing liabilities was 1.08% for the three months ended June 30, 2018 compared to 0.90% for the same period of 2017. The net interest margin during the six months ended June 30, 2018 was 3.78% compared to 3.66% for the same period in 2017. Total yield on interest earning assets increased to 4.55% for the six months ended June 30, 2018, compared to 4.32% for the same period last year. Interest expense as a percentage of total interest-bearing liabilities was 1.06% for the six months ended June 30, 2018 compared to 0.86% for the same period of 2017. Return on average assets (“ROAA”) and return on average equity (“ROAE”) were 0.39% and 3.13%, respectively, for the three months ended June 30, 2018, compared to ROAA and ROAE of 0.89% and 9.37%, respectively, for the three months ended June 30, 2017. Excluding the merger-related expenses (non-GAAP), ROAA and ROAE would have been 1.28% and 10.22%, respectively, for the second quarter of 2018. ROAA and ROAE were 0.72% and 6.27%, respectively, for the six months ended June 30, 2018, compared to ROAA and ROAE of 0.91% and 9.50%, respectively, for the six months ended June 30, 2017. Excluding the merger-related expenses (non-GAAP), ROAA and ROAE would have been 1.23% and 10.65%, respectively, for the six months ended June 30, 2018. The non-GAAP efficiency ratio was 52.67% and 54.26%, respectively, for the three and six months ended June 30, 2018 compared to 61.11% and 60.32% for the same periods of 2017. Total assets increased $827.8 million, or 39.31%, since December 31, 2017. Total deposits grew by $554.8 million, or 33.56%, since December 31, 2017. The BYBK acquisition provided approximately $541.4 million in deposits while new organic deposits were approximately $13.4 million for the six months ended June 30, 2018. We ended the second quarter of 2018 with a book value of $20.93 per common share and a tangible book value of $14.39 per common share compared to $16.61 and $14.10, respectively, at December 31, 2017. We maintained appropriate levels of liquidity and by all regulatory measures remained “well capitalized.” Total assets at June 30, 2018 increased $827.8 million from December 31, 2017 primarily due to increases of $651.5 million in loans held for investment, $69.3 million in goodwill, $31.3 million in cash and cash equivalents, and $29.6 million in loans held for sale. This increase includes assets of approximately $662.5 million at June 30, 2018 that we acquired in the BYBK merger. Average interest earning assets increased $850.9 million for the three month period ended June 30, 2018 compared to the same period of 2017. The average yield on such assets was 4.58% for the three months ended June 30, 2018 compared to 4.28% for the comparable 2017 period. The increase in the average yield is primarily the result of higher yields on our investment securities available for sale and on our loans held for investment. Average interest bearing liabilities increased $558.8 million for the three month period ended June 30, 2018 compared to the same period of 2017, primarily as a result of the liabilities we acquired in the BYBK acquisition. The average rate paid on such liabilities increased to 1.08% for the three month period ended June 30, 2018 compared to 0.90% for the same period in 2017 due to higher rates paid on both interest bearing deposits and borrowings. Average interest earning assets increased $602.3 million for the six month period ended June 30, 2018 compared to the same period of 2017. The average yield on such assets was 4.55% for the six months ended June 30, 2018 compared to 4.32% for the comparable 2017 period. The increase in the yield on interest earning assets is the result of a higher yield on our investment portfolio and our loans held for investment. Average interest-bearing liabilities increased $388.3 million for the six month period ended June 30, 2018 compared to the same period of 2017. The average rate paid on such liabilities increased to 1.06% for the six month period ended June 30, 2018 compared to 0.86% for the same period in 2017, due to higher rates paid on both interest earning deposits and borrowings. The net interest margin for the three months ended June 30, 2018 increased to 3.80% from 3.60% during the second quarter of 2017. The net interest margin for the six months ended June 30, 2018 increased to 3.78% from 3.66% during the same period last year. The net interest margin increased during both periods due to an improvement in asset yields in addition to an increase in non-interest bearing deposits as a source of funding, partially offset by the increase in interest expense, primarily due to the interest paid on our borrowed funds. The net interest margin during 2018 was also affected by the amount of accretion on acquired loans. Accretion increased due to a higher amount of early payoffs on acquired loans with credit marks during the three and six months ended June 30, 2018 compared to the same periods of 2017. The fair value accretion/amortization is recorded on pay-downs recognized during the periods, which contributed 18 and 13 basis points, respectively, for the three and six months ended June 30, 2018 compared to eight basis points for each of the three and six months ended June 30, 2017. Net interest income increased $9.1 million, or 63.54%, and $12.6 million, or 44.26%, respectively, for the three and six month periods ended June 30, 2018 compared to the same periods of 2017, primarily due to increases in loan interest income resulting from increases in both the average balance of and yields on loans, partially offset by an increase in interest expense. Interest expense increased due to increases in the both the average balance of and average interest rates on our deposits and borrowings. The provision for loan losses increased $253 thousand and $208 thousand, respectively, for the three and six month periods ended June 30, 2018 compared to the same periods of 2017 due to the organic growth in the loan portfolio. Non-interest income increased $1.2 million, or 59.75%, for the three month period ended June 30, 2018 compared to the same period of 2017, primarily as a result of income of $674 thousand from our new point of sale (“POS”) sponsorship program and increases of $441 thousand in other fees and commissions and $289 thousand in service charges on deposit accounts, partially offset by a decrease of $215 thousand in income on marketable loans. Non-interest income increased $1.1 million, or 29.42%, for the six month period ended June 30, 2018 compared to the same period of 2017, primarily as a result of income of $674 thousand from our new POS sponsorship program and increases of $532 thousand in other fees and commissions and $453 thousand in service charges on deposit accounts, partially offset by a decrease of $427 thousand in income on marketable loans. As a result of the BYBK acquisition, the Bank became a member of the POS network sponsorship program, which allows our customers to access several processing and settlement networks; when our customers use one of such network, the Bank receives a transaction fee from the network. The increases in other fees and commissions are primarily the result of a one-time bonus on our annuity plan during the second quarter and increases in other loan fees. The increases in service charges on deposits accounts are the result of increased income on bank debit cards due to the higher deposit base primarily as a result of the DCBB and BYBK acquisitions. The decreases in income on marketable loans are the result of decreases in the volume of residential mortgage loans that we sold in the secondary market compared to the same periods of 2017. Non-interest expense increased $11.1 million, or 112.27%, and $12.6 million, or 64.78%, respectively, for the three and six month periods ended June 30, 2018 compared to the same periods of 2017, primarily as a result of increases in merger and integration expense, salaries and benefits, occupancy and equipment, data processing, core deposit amortization and other operating expenses. We incurred $7.1 million in merger and integration expenses during the 2018 periods due to the recent BYBK acquisition compared to no merger and integration expenses during the same periods last year. Salaries and benefits increased $2.2 million and $2.8 million, respectively, primarily as a result of the additional staff, and occupancy and equipment expenses increased $587 thousand and $914 thousand, respectively, primarily as a result of the new branches, that we acquired in the DCBB and BYBK acquisitions. The increases in data processing expenses of $341 thousand during the three month period and $594 thousand during the six month period resulted from additional customer transactions due to growth, a larger customer base on which a fee is assessed, and new and enhanced products that increased the payments to our core processor. Other operating expenses increased during both periods due to operating costs, such as telephone, office supplies, software expense, marketing and advertising, associated with the additional branches and staff. Core deposit amortization increased as a result of the higher premiums resulting from the deposits we acquired in the DCBB and BYBK acquisitions. Old Line Bancshares is the parent company of Old Line Bank, a Maryland chartered commercial bank headquartered in Bowie, Maryland, approximately 10 miles east of Andrews Air Force Base and 20 miles east of Washington, D.C. The Bank has 37 branches located in its primary market area of the suburban Maryland (Washington, D.C. suburbs, Southern Maryland and Baltimore suburbs) counties of Anne Arundel, Baltimore, Calvert, Carroll, Charles, Harford, Howard, Frederick, Montgomery, Prince George's and St. Mary's, and Baltimore City. It also targets customers throughout the greater Washington, D.C. and Baltimore metropolitan areas. Statements included in this press release include non-GAAP financial measures and should be read along with the accompanying tables, which provide a reconciliation of non-GAAP financial measures to GAAP financial measures. The Company’s management uses these non-GAAP financial measures, and believes that non-GAAP financial measures provide additional useful information that allows readers to evaluate the ongoing performance of the Company and provide meaningful comparison to its peers. Non-GAAP financial measures should not be considered as an alternative to any measure of performance or financial condition as promulgated under GAAP, and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Non-GAAP financial measures have limitations as analytical tools, and investors should not consider them in isolation or as a substitute for analysis of the results or financial condition as reported under GAAP. Old Line Bancshares, Inc. & Subsidiaries   Consolidated Balance Sheets     (1) Operating efficiency is derived by dividing non-interest expense by the total of net interest income and non-interest income. RECONCILIATION OF NON-GAAP MEASURES As the magnitude of merger-related expenses during the periods set forth below distorts the operational results of the Company, we present in the GAAP reconciliation below and in the accompanying text certain performance measures excluding the effect of the merger-related expenses during the three and six month periods ended June 30, 2018. We believe this information is important to enable stockholders and other interested parties to assess the adjusted operational performance of the Company. Reconciliation of Non-GAAP measures (Unaudited) Three Months ending

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