James W. Cornelsen. Mark A. Semanie. Elise M. Hubbard NASDAQ: OLBK

Transcription

1 James W. Cornelsen President & CEO Mark A. Semanie Executive Vice President & COO Elise M. Hubbard Executive Vice President & CFO NASDAQ: OLBK December 31, 2018

2 Table of Contents Forward-Looking Statement 3 Senior Management Team 4 OLBK Corporate Overview 5 Financial Highlights 6 Old Line Footprint 7 Market Highlights 8 Market Highlights (cont d) 9 Key Growth Strategies 10 Strategic Acquisitions 11 Opportunity to Gain Deposit Market Share 12 Consistent Asset Growth 13 Loan Composition 14 Loans Acquired through Acquisitions 15 Credit Quality 16 Reserves 17 CRE Concentration 18 Deposit Composition 19 Historical Net Income 20 Quarterly Profitability Trends 21 Historical Profitability Metrics 22 Historical Profitability Metrics (cont d) 23 Noninterest Income 24 Noninterest Expense 25 Capital Adequacy 26 What Makes OLBK Unique? 27 Compelling Story 28 Appendix 29 Loan Portfolio Composition 30 Credit Quality 31 OLD LINE BANCSHARES, INC. 2

3 Forward-Looking Statement This presentation includes forward-looking statements, including statements about future results. These statements are subject to uncertainties and risks, including but not limited to our ability to integrate acquisitions; the strength of the U.S. economy and the local economies where we conduct operations; harsh weather conditions; fluctuations in inflation, interest rates, or monetary policies; changes in the stock market and other capital and real estate markets; legislative or regulatory changes; customer acceptance of third-party products and services; increased competition and its effect on pricing; technological changes; security breaches and computer viruses that may affect our computer systems; changes in consumer spending and savings habits; our growth and profitability; changes in accounting; and our ability to manage the risks involved in the foregoing. These factors, as well as additional factors, can be found in our most recent press release and call report information which are available at Our Annual Report on Form 10-K for the year ended December 31, 2017 is available at the SEC s internet site ( Actual results may differ materially from projections and could be affected by a variety of factors, including factors beyond our control. Forward-looking statements in this presentation speak only as of the date of these materials, and we assume no obligation to update forward-looking statements or the reasons why actual results could differ. OLD LINE BANCSHARES, INC. 3

4 Senior Management Team Talent, depth, unique skills James W. Cornelsen, 64, is the President and Chief Executive Officer of OLBK and Old Line Bank. He joined Old Line Bank and its Board of Directors in 1994 and has been a member of the Board of Directors of OLBK, Inc. since its incorporation in April He has over 30 years of commercial banking experience. Prior to joining OLBK, Mr. Cornelsen was a Senior Vice President at Sequoia National Bank and Vice President of Commercial Lending at Citizens Bank of Maryland. Mark A. Semanie, 55, joined Old Line Bank in January He is an Executive Vice President and Chief Operating Officer and assists in the planning and strategic growth of Old Line Bank. Mr. Semanie is a CPA and prior to joining Old Line Bank he was the Senior Vice President and Chief Financial Officer of Carrollton Bancorp and prior to that tenure he served as Executive Vice President and Chief Financial Officer at Bay National Bank. He has over 30 years of accounting and financial services experience. Elise Hubbard, 46, Executive Vice President and Chief Financial Officer of Old Line Bank. She has been in charge of managing the daily functions of the accounting department since joining the Bank in Ms. Hubbard has held various positions at the Bank, including Senior Vice President, Vice President, Assistant Vice President, Senior Accountant and Accounting Administrator. She holds a B.S. in Accounting with minors in Business Management and Human Resources from University of Maryland. M. John Miller, 68, Executive Vice President and Chief Credit Officer of Old Line Bank, joined Old Line Bank in 2011 as Senior Vice President responsible for managing special assets. Prior to joining Old Line Bank, he was a Senior Vice President for Commercial Real Estate Lending and Special Assets at Bank Annapolis from From , he was a Senior Vice President of Commercial Real Estate Lending at Annapolis Bank & Trust. Mr. Miller has also developed residential property to include custom waterfront homes. He has over 36 years of banking and real estate development experience. Jack G. Welborn, 64, Executive Vice President and Chief Lending Officer, joined Old Line Bank in August 2005 as a Commercial Lender responsible for our College Park Loan Production Office. Beginning in 2012 he served as a Senior Vice President and Group Leader for the bank and was promoted to Executive Vice President and Chief Lending Officer in January He has over 40 years of banking experience in the Washington, D.C. area specializing in commercial transactions. Prior to joining Old Line Bank, Mr. Welborn was a Commercial Lender for Branch Banking & Trust. OLD LINE BANCSHARES, INC. 4

5 OLBK Corporate Overview Vision: Grow Old Line s position as the community bank of choice and the employer of choice across its footprint. Headquartered in Maryland: $2.9 billion total assets 37 branch locations Ten loan production offices, five of which are co-located in depository branches Acquired five banks since 2010 and will continue to seek logical acquisitions; The most recent was on April 13, 2018, we acquired Bay Bancorp, Inc, (BYBK), the parent company of Bay Bank. Now with 37 full service branches servicing 11 counties and Baltimore City. Traded on Nasdaq with a $496.1 million market capitalization at January 22, 2019 Primary market areas include: Washington, D.C. metropolitan area Baltimore metropolitan area Southern Maryland Operates in one of the best strategic, natural submarkets with population growth rates & per capita income above national averages bedroom communities for both Washington and Baltimore Common stock ownership: 13.44% Insider / Stakeholder and Board ownership 57.30% institutional and 29.26% mutual fund, public and other ownership OLD LINE BANCSHARES, INC. 5

6 Financial Highlights (Dollars in thousands) At or for the 3 Months Ended December , Annualized Total Assets $2,950,007 Total Loans, net $2,420,793 Total Deposits $2,296,049 Return on Average Assets 1.37% Return on Average Equity 10.70% Tangible Common Equity / Tangible Assets 9.23% Total Risk-Based Capital Ratio 11.80% Net Interest Margin 3.66% Efficiency Ratio 49.39% Nonperforming Assets / Assets % Acquisitions: Assets Bay Bancorp, Inc. (04/13/2018) 2 $662,453 DCB Bancshares, Inc. (07/28/2017) 2 $310,974 Regal Bancorp, Inc. (12/4/2015) 2 $130,624 WSB Holdings, Inc. (5/10/2013) 2 $310,277 Maryland Bankcorp, Inc. (04/01/2011) 2 $334,775 1) Nonperforming assets (NPAs) include non-accrual loans, 90 days past due and still accruing loans and net other real estate and other assets owned. 2) Fair Value of Assets as disclosed. OLD LINE BANCSHARES, INC. 6

7 Old Line Footprint Includes Bay Bancorp OLD LINE BANCSHARES, INC. 7

8 Market Highlights Washington/Baltimore combined metropolitan statistical area ( MSA ) ranks 4th in the U.S. with approximately 9.2 million residents ¹ The Washington D.C. MSA s 2019 median household income estimate is $102,260, one of the highest in the nation according the Census Bureau data ² The economic strength and diversity across the market continues to expand: 2017 gross domestic product (GDP) of $530 billion GRP has increased nearly 17% during the past 5 years Anchoring this growth is Federal government spending, which accounts for 23% of GDP The D.C. metro area added about 77,000 jobs since July % of the region s workforce has a graduate degree and 48% has a bachelor s degree, ranking 1st in the nation Home to 6 of the top 10 most educated counties in the U.S. #1 in the U.S. for occupational concentration for computer and math sciences and business and financial services #1 in the U.S. for federal procurement more than Texas or California Future growth expected cyber security, homeland security, clean energy and health care Baltimore was established by the Constitution of Maryland and is an independent city that is not part of any county. With a population of 611,648 in 2017, Baltimore is the largest independent city in the United States. As of 2016, the population of the Baltimore metropolitan area was estimated to be just under 2.8 million, making it the 21st largest metropolitan area in the country. Baltimore is located about 40 miles northeast of Washington, DC. The top two employers of Baltimore is Johns Hopkins Hospital and John Hopkins University.³ The Maryland unemployment rate is 3.9%⁴ compared to 3.9%⁴ for the entire U.S. 1) Source: United States Census Bureau. Data as of July 1, ) Source: United States Census Bureau, Nielsen; Represents a projection. 3) Source: Wikipedia as of July 24, ) As of Deccemerr Source: Bureau of Labor Statistics, United States Census Bureau, Nielsen, Greater Washington Initiative Regional Economic Development. OLD LINE BANCSHARES, INC. 8

9 Market Highlights (cont d) Household income across OLBK s entire Maryland franchise is $85,459 vs. $63,174 for the U.S. Projected household income growth rate ( ) is 9.01% across the Maryland franchise. Projected 5-year population growth rate ( ) in the overall market is 3.56%. OLBK deposit market rank/share by county at (June 2018): County Rank (#) Total Deposits ($mm) Branches Prince George s Baltimore Baltimore City Charles Saint Mary s Anne Arundel Calvert Carroll Harford Frederick Howard Montgomery Total 2,208* 37 Note: Deposit market share ranking as of June 30, 2018 * SNL Source: United States Census Bureau, Nielsen, FDIC. OLD LINE BANCSHARES, INC. 9

10 Key Growth Strategies Concentrate on all sub-markets within current footprint Concentrate on organic growth opportunities Consider strategic acquisitions: On April 13, 2018, we completed the Bay Bancorp, Inc. acquisition, the parent company of Bay Bank. This expanded our market further into Baltimore City, Baltimore, Anne Arundel, Howard and Harford Counties. Expand reach into new contiguous natural markets Grow sources of non-interest income Execute branch consolidations where appropriate Further profitable expansion of residential loan division OLD LINE BANCSHARES, INC. 10

11 Strategic Acquisitions A Common Sense Approach Doing Deals When They Make Sense (Dollars in thousands) Maryland Bankcorp, Inc. WSB Holdings, Inc. Regal Bancorp, Inc. DCB Bancshares, Inc. Bay Bancorp, Inc. Annc. Date Closing Date Price / TBV Assets Net Loans Total Deposits Branches 9/1/2010 4/1/ % $334,775 $190,826 $297, /10/2012 5/10/ % 310, , , /5/ /4/ % 130,624 91, , /1/ /28/ % 310, , , /27/17 04/13/ % 662, , ,369 9 OLD LINE BANCSHARES, INC. 11

12 Opportunity to Gain Deposit Market Share In a market dominated by larger regional and national banks, Old Line is positioned to achieve growth Market Share Data 2018 Number Total of Deposits In Branches Market ($000) Total Market Share (%) Institution (ST) Rank Washington-Arlington-Alexandria, DC-VA-MD-WV Bank of America Corp. (NC) ,020, Capital One Financial Corp. (VA) ,472, Wells Fargo & Co. (CA) ,004, SunTrust Banks Inc. (GA) ,971, BB&T Corp. (NC) ,122, PNC Financial Services Group (PA) ,829, Citigroup Inc. (NY) ,831, United Bankshares Inc. (WV) ,491, Eagle Bancorp Inc (MD) ,344, Sandy Spring Bancorp Inc. (MD) ,864, M&T Bank Corp. (NY) ,362, Toronto-Dominion Bank ,950, HSBC Holdings ,459, Burke & Herbert Bank & Trust (VA) ,329, Access National Corp. (VA) ,087, Union Bkshs Corp (VA) ,836, Revere Bank (MD) ,523, Old Line Bancshares Inc (MD) ,321, FVCBankcorp Inc. (VA) ,132, Amalgamated Bank (NY) , Total For Institutions In Market 1, ,557, Market Share Data 2018 Rank Number of Branches 2018 Total Deposits In Market ($000) Total Market Share (%) Institution (ST) Baltimore-Columbia-Towson, MD Bank of America Corp. (NC) ,315, M&T Bank Corp. (NY) ,914, PNC Financial Services Group (PA) ,676, Wells Fargo & Co. (CA) ,017, BB&T Corp. (NC) ,468, SunTrust Banks Inc. (GA) ,870, Howard Bancorp Inc. (MD) ,468, F.N.B. Corp. (PA) ,418, Capital One Financial Corp. (VA) ,149, Fulton Financial Corp. (PA) ,019, Sandy Spring Bancorp Inc. (MD) , Old Line Bancshares Inc (MD) , Rosedale FS&LA (MD) , Severn Bancorp Inc. (MD) , Capital Funding Bancorp Inc. (MD) , Shore Bancshares Inc. (MD) , Hamilton Bancorp Inc (MD) , Revere Bank (MD) , Arundel FSB (MD) , Queenstown Bancorp of MD Inc. (MD) , Total For Institutions In Market ,493,644 Market Share Data 2018 Rank Number of Branches 2018 Total Deposits In Market ($000) Total Market Share (%) Institution (ST) California-Lexington Park, MD PNC Financial Services Group (PA) , Community Finl Corp. (MD) , Bank of America Corp. (NC) , Old Line Bancshares Inc (MD) , BB&T Corp. (NC) , SunTrust Banks Inc. (GA) , M&T Bank Corp. (NY) , Woodforest Financial Grp Inc. (TX) Total For Institutions In Market 17 1,419,069 Note: Deposit market share (includes Bay Bank) as of June 30, Source: SNL. OLD LINE BANCSHARES, INC. 12

13 Consistent Asset Growth $2,950 M $2,106 M $1,709 M $1,510 M $1,228 M 2014Y 2015Y 2016Y 2017Y 2018Y OLD LINE BANCSHARES, INC. 13

14 Loan Composition Loan Composition at December 31, 2018 Historical Loan Composition CRE Residential C&I Consumer Consumer, 2.1% 1.8% 1.3% 1.0% 0.6% 0.4% 13.1% 11.8% 11.6% 10.0% 10.4% 3.5% 2.1% 11.0% 13.7% C&I, 13.7% 21.6% 24.1% 22.8% 22.7% 19.4% 18.3% 21.7% CRE, 62.5% Residential, 21.7% 63.4% 62.8% 64.6% 66.7% 69.8% 67.2% 62.5% 2012Y 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y OLD LINE BANCSHARES, INC. 14

15 Loans Acquired through Mergers Old Line Bancshares, Inc. Maryland Bancorp, Inc. WSB Holdings, Inc. Regal Bancorp, Inc. DCB Bancshares, Inc. Bay Bancorp, Inc. $548,629 $216,172 $91,441 $1,872,164 $162,941 $1,369,594 $1,484,593 $190,826 $599,110 $689,237 $930,855 $1,060,504 $352,213 '11Y '12Y '13Y '14Y '15Y '16Y '17Y '18Y Note: Dollars in thousands. Fair Value at acquisition dates OLD LINE BANCSHARES, INC. 15

16 0.00% 0.01% 0.12% 0.07% 0.07% 0.08% 0.20% 0.52% 0.46% 0.59% 0.39% 1.23% Credit Quality NPLs / Loans Held for Investment NCOs / Average Loans '13Y '14Y '15Y '16Y '17Y '18Y '13Y '14Y '15Y '16Y '17Y '18Y OLD LINE BANCSHARES, INC. 16

17 55.9% 82.2% 83.3% 97.1% 160.4% 0.31% 0.35% 0.46% 0.43% 0.45% 335.5% 0.58% Reserves Loan Loss Reserve / Gross Loans Held for Investment Loan Loss Reserve / Non accrual loans '13Y '14Y '15Y '16Y '17Y '18Y 13Y 14Y 15Y 16Y 17Y 18Y OLD LINE BANCSHARES, INC. 17

18 CRE Concentration $ in thousands Family Construction $15,615 $23,253 $29,707 $34,887 $59,596 Other Construction 60,357 97,665 90, , ,160 Total Construction & Land Development 75, , , , ,756 Total Non Owner-Occupied Commercial Real Estate 335, , , , ,606 Multifamily 21,985 21,055 36,028 40,625 72,512 Total CRE Loans for Concentration Measure $433,554 $580,327 $720,427 $867,693 $1,180,874 Total Holding Company Risk Based Capital $121,900 $130,266 $183,168 $212,452 $310,518 CRE Concentration % % % % % ADC Concentration Ratio ¹ 62.3% 92.8% 65.6% 78.0% 66.8% Note: CRE calculation excludes owner-occupied CRE. 1) Represents ADC concentration as a percentage of OLBK consolidated risk-based capital. OLD LINE BANCSHARES, INC. 18

19 Deposit Composition Deposit Composition at December 31, 2018 Historical Deposit Composition Time Deposits 37.7% DDA 24.5% MM & Now 28.5% DDA MM & Now Savings Time Deposits 34.3% 37.6% 35.9% 34.7% 32.1% 37.7% Savings 9.3% 8.7% 8.9% 7.8% 7.6% 8.0% 9.3% Cost of Interest Bearing Deposits 2013Y 0.54% 2014Y 0.44% 2015Y 0.53% 2016Y 0.59% 2017Y 0.67% 2018Y 0.96% 32.6% 31.1% 29.7% 32.7% 30.2% 28.5% 23.5% 25.7% 26.6% 25.0% 27.3% 24.5% 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y OLD LINE BANCSHARES, INC. 19

20 Historical Net Income $27,218 $7,130 $10,469 $13,155 $15,963 '14Y '15Y '16Y '17Y LTM Note: Dollars in thousands. Includes merger related expenses. OLD LINE BANCSHARES, INC. 20

21 Quarterly Profitability Trends 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 EPS - Net Income Available to Common Stockholders ($) * * 0.17 * Net Interest Margin (%) Efficiency Ratio (%) * * * Non-interest Income / Operating Revenue (%) Return on Average Assets (%) * * 0.39 * Return on Average Equity (%) * *3.13 * * Note: Quarter ended September 30, 2017 includes merger expenses of $4.0 million ($2.9 million, net of tax). Excluding merger expenses, EPS is $0.42; efficiency ratio is 57.21%; ROAA is 1.01%; ROAE is 9.98%. Quarter ended June 30, 2018 includes merger expenses of $7.1 million ($6.2 million, net of tax). Excluding merger expenses, EPS is $0.55; efficiency ratio is 52.67%; ROAA is 1.28%; ROAE is 10.22%. Quarter ending September 30, 2018 includes merger expenses of $2.3 million (1.5 million, net of tax). Excluding merger expenses, EPS is $0.58. efficiency ratio is 51.93%, ROAA is 1.32%, ROAE is 10.47%. OLD LINE BANCSHARES, INC. 21

22 5.45% 0.60% 0.74% 0.79% 7.80% 7.54% 0.83% 0.84% 8.83% 8.53% 8.29% 1.01% Historical Profitability Metrics Return on Average Assets Return on Average Equity '13Y '14Y '15Y '16Y 17Y 18Y '13Y '14Y '15Y '16Y 17Y 18Y * Return on Average Assets (ROAA) and Return on Average Equity (ROAE) at December 31, 2018 includes after tax merger expenses of $7.6 million. Excluding the merger expenses (non-gaap), ROAA and ROAE would have been 1.29% and 10.62% for the twelve months ending December 31, OLD LINE BANCSHARES, INC. 22

23 61.51% 3.69% 3.79% 3.75% 64.78% 64.14% 4.15% 4.08% 67.89% 4.53% 73.73% 73.53% Historical Profitability Metrics (cont d) Net Interest Margin Efficiency Ratio '13Y '14Y '15Y '16Y '17Y 18Y '13Y '14Y '15Y '16Y 17Y 18Y* * Excluding the merger related expenses of $9.4, the efficiency ratio would be 52.28% for the twelve months ending at December 31, OLD LINE BANCSHARES, INC. 23

24 0.42% 0.44% 0.50% 0.52% 0.52% 0.84% Noninterest Income Historical Noninterest Income Noninterest Income / Avg. Assets Other Gains on sale of loans Earnings on BOLI POS sponsorship program Service charges on deposit accounts 29.4% 38.5% 30.5% 37.3% 29.9% 29.7% 15.2% 13.0% 29.5% 29.7% 43.3% 28.1% 15.1% 16.6% 9.4% 14.8% 13.7% 15.0% 16.9% 17.9% 32.0% 25.3% 20.9% 25.4% 23.2% 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y '13Y '14Y '15Y '16Y '17Y '18Y Note: Other income includes $2.0 million in POS sponsorship program OLD LINE BANCSHARES, INC. 24

25 2.49% 2.36% 2.32% 2.74% 2.93% 3.41% Noninterest Expense Historical Noninterest Expense Noninterest Expense / Avg. Assets Salaries and benefits Data processing Other (includes merger exp) Occupancy and equipment CDI 32.8% 24.9% 30.4% 26.3% 32.5% 35.1% 2.3% 3.9% 14.8% 2.5% 3.8% 17.9% 2.2% 3.9% 15.9% 2.1% 3.9% 17.1% 2.2% 3.7% 15.8% 3.5% 4.3% 14.2% 46.1% 50.9% 47.5% 50.5% 45.8% 42.9% 2013Y 2014Y 2015Y 2016Y 2017Y 2018Y '13Y '14Y '15Y '16Y '17Y '18Y* * At December 31, 2018, noninterest expenses include merger-related expenses of $9.4 million. Excluding these merger expenses, non-interest expense as a % of average assets annualized would have been 1.97%. OLD LINE BANCSHARES, INC. 25

26 Capital Adequacy Tangible Equity/Tangible Assets Total Risk-Based Capital Tier 1 Risk-Based Capital CET Tier 1 Minimum Total Risk-Based Capital ratio to be well-capitalized 10% Source: SNL Financial, Inc. and Internal Sources OLD LINE BANCSHARES, INC. 26

27 What Makes OLBK Unique? Track record of consistent financial performance Depth of senior management talent and across entire employee base Strong underlying capital position with good access to capital markets Strong track record of consistent asset quality Solid net interest margin compares favorably to peers Experienced bank acquirers Leading independent and locally headquartered financial services company within our footprint Acquirer and employer of choice within footprint; now moving towards dominant suburban Maryland position surrounding D.C. and Baltimore OLD LINE BANCSHARES, INC. 27

28 Compelling Story We deliver a proven track record of results Our deep management talent could lead a much larger company We are the leader for in-market consolidations We are focused on creating sustainable competitive advantages Our customer base is stable with good population growth trends and above average demographics in the affluent retail and small middle-market segments OLD LINE BANCSHARES, INC. 28

29 Appendix OLD LINE BANCSHARES, INC. 29

30 Loan Portfolio Composition (Dollars in thousands) Balance Percent Commercial Real Estate Owner Occupied $440, % Investment 788, % Hospitality 185, % Land A&D 93, % Total CRE Loans 1,507, % Residential Loans First lien investment 152, % First lien owner occupied 248, % Residential land A&D 59, % HELOC and Jr. 62, % Total Residential Loans Loans 523, % C&I Loans 331, % Consumer Loans 51, % Total Gross Loans Held-for-Investment $2,413, % Note: Data as of December 31, OLD LINE BANCSHARES, INC. 30

31 Credit Quality 4Q2016 1Q2017 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018 3Q2018 4Q2018 Commercial Real Estate Owner Occupied 3, , Investment Hospitality 1, Land A&D Total CRE 4, , Residential First lien investment First lien owner occupied ,045 1,325 1,190 1,369 1,827 2,146 2,394 Residential Land A&D HELOC and Jr Total Residential Loans ,279 1,559 1,383 1,562 2,020 4,282 4,048 C&I 1, Consumer Other Real Estate Owned 2,746 2,896 2,896 2,004 2,004 1,800 2,358 1, Total Nonperforming Assets ¹ 10,033 4,196 4,814 4,011 3,885 3,897 5,446 8,497 5,782 NPAs / Total Assets ¹ 0.59% 0.24% 0.27% 0.19% 0.18% 0.18% 0.19% 0.29% 0.20% Note: Dollars in thousands. 1) Non-performing assets include loans 90+ days past due, non-accruals and OREO. OLD LINE BANCSHARES, INC. 31