UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-50345

Old Line Bancshares, Inc.

(Exact name of registrant as specified in its charter)

Maryland		20-0154352
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)

1525 Pointer Ridge Place		20716
Bowie, Maryland		(Zip Code)
(Address of principal executive offices)

Registrant’s telephone number, including area code: (301) 430-2500

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

     Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

     Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer o		Accelerated filer o		Non-accelerated filer o		Smaller reporting company þ
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

     Yes o No þ

As of July 20, 2010, the registrant had 3,880,005 shares of common stock outstanding.

 

 

Part I. Financial Information

Item 1. Financial Statements

Old Line Bancshares, Inc. & Subsidiaries
Consolidated Balance Sheets

		June 30,				December 31,
		2010				2009
		(Unaudited)
Assets
Cash and due from banks		$	6,164,751			$	7,402,137
Interest bearing accounts			19,329,598				3,953,312
Federal funds sold			3,177,084				81,138
Total cash and cash equivalents			28,671,433				11,436,587
Time deposits in other banks			10,379,857				15,031,102
Investment securities available for sale			27,001,553				28,012,948
Investment securities held to maturity			24,572,928				5,806,507
Loans, less allowance for loan losses			285,819,888				265,008,669
Restricted equity securities at cost			2,747,650				2,957,650
Premises and equipment			17,187,953				17,326,099
Accrued interest receivable			1,162,564				1,055,249
Prepaid income taxes			28,458				—
Deferred income taxes			66,505				178,574
Bank owned life insurance			8,566,098				8,422,879
Other real estate owned			223,169				—
Other assets			1,781,510				1,982,262
Total assets		$	408,209,566			$	357,218,526
Liabilities and Stockholders’ Equity
Deposits
Non-interest bearing		$	53,408,446			$	40,883,419
Interest bearing			265,370,631				245,464,373
Total deposits			318,779,077				286,347,792
Short term borrowings			33,790,253				16,149,939
Long term borrowings			16,413,098				16,454,067
Accrued interest payable			461,053				517,889
Income tax payable			—				175,543
Other liabilities			1,127,487				941,165
Total liabilities			370,570,968				320,586,395
Stockholders’ equity
Common stock, par value $0.01 per share; authorized 15,000,000 shares; issued and outstanding 3,880,005 in 2010 and 3,862,364 in 2009			38,800				38,624
Additional paid-in capital			29,101,030				29,034,954
Retained earnings			7,260,278				6,498,446
Accumulated other comprehensive income			597,282				368,880
Total Old Line Bancshares, Inc. stockholders’ equity			36,997,390				35,940,904
Non-controlling interest			641,208				691,227
Total stockholders’ equity			37,638,598				36,632,131
Total liabilities and stockholders’ equity		$	408,209,566			$	357,218,526

The accompanying notes are an integral part of these consolidated financial statements

Old Line Bancshares, Inc. & Subsidiaries
Consolidated Statements of Income
(Unaudited)

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
Interest revenue
Loans, including fees		$	4,045,643			$	3,788,846			$	7,998,999			$	7,390,729
U.S. Treasury securities			—				2,374				—				7,230
U.S. government agency securities			36,142				84,269				90,697				187,190
Mortgage backed securities			398,261				256,443				673,477				524,364
Municipal securities			20,727				21,000				40,360				43,999
Federal funds sold			1,543				305				2,186				740
Other			71,487				74,097				158,213				175,030
Total interest revenue			4,573,803				4,227,334				8,963,932				8,329,282
Interest expense
Deposits			999,436				1,156,871				1,974,365				2,346,255
Borrowed funds			281,189				259,463				554,733				519,774
Total interest expense			1,280,625				1,416,334				2,529,098				2,866,029
Net interest income			3,293,178				2,811,000				6,434,834				5,463,253
Provision for loan losses			170,000				250,000				240,000				550,000
Net interest income after provision for loan losses			3,123,178				2,561,000				6,194,834				4,913,253
Non-interest revenue
Service charges on deposit accounts			78,411				72,665				153,231				144,854
Gains on sales of investment securities			—				157,917				—				157,917
Earnings on bank owned life insurance			83,985				94,154				170,108				187,615
Other fees and commissions			108,657				210,264				240,603				648,214
Total non-interest revenue			271,053				535,000				563,942				1,138,600
Non-interest expense
Salaries			1,130,944				938,930				2,296,359				1,775,987
Employee benefits			317,803				215,422				667,938				517,846
Occupancy			319,051				234,125				652,457				466,306
Equipment			99,152				82,516				206,028				162,394
Data processing			105,074				81,654				199,500				156,991
FDIC insurance and State of Maryland assessments			115,553				259,531				230,668				342,302
Other operating			522,337				460,070				1,051,746				912,552
Total non-interest expense			2,609,914				2,272,248				5,304,696				4,334,378
Income before income taxes			784,317				823,752				1,454,080				1,717,475
Income taxes			270,063				272,787				500,132				554,902
Net Income			514,254				550,965				953,948				1,162,573
Less: Net Income (loss) attributable to the noncontrolling interest			(15,843	)			907				(40,683	)			100,188
Net Income attributable to Old Line Bancshares, Inc.			530,097				550,058				994,631				1,062,385
Preferred stock dividends and discount accretion			—				102,572				—				205,144
Net income available to common stockholders		$	530,097			$	447,486			$	994,631			$	857,241
Basic earnings per common share		$	0.14			$	0.12			$	0.26			$	0.22
Diluted earnings per common share		$	0.14			$	0.12			$	0.26			$	0.22
Dividend per common share		$	0.03			$	0.03			$	0.06			$	0.06

The accompanying notes are an integral part of these consolidated financial statements

Old Line Bancshares, Inc. & Subsidiaries
Consolidated Statement of Changes in Stockholders’ Equity
Six Months Ended June 30, 2010
(Unaudited)

																		Accumulated
										Additional								other
		Common stock								paid-in								comprehensive				Comprehensive				Non-controlling
		Shares				Par value				capital				Retained earnings				income				income				Interest
Balance, December 31, 2009			3,862,364			$	38,624			$	29,034,954			$	6,498,446			$	368,880			$	—			$	691,227
Net income attributable to Old Line Bancshares, Inc.			—				—				—				994,631				—				994,631				—
Distributions to minority member(s)			—				—				—				—				—				—				(9,336	)
Unrealized gain on securities available for sale, net of income tax benefit of $148,779			—				—				—				—				228,402				228,402				—
Comprehensive income			—				—				—				—				—			$	1,223,033
Net income attributable to noncontrolling interest			—				—				—				—				—								(40,683	)
Stock based compensation awards			17,641				176				66,076				—				—								—
Common stock cash dividend $0.06 per share			—				—				—				(232,799	)			—								—
Balance, June 30, 2010			3,880,005			$	38,800			$	29,101,030			$	7,260,278			$	597,282							$	641,208

The accompanying notes are an integral part of these consolidated financial statements

Old Line Bancshares, Inc. & Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)

Six Months Ended June 30,		2010				2009
Cash flows from operating activities
Interest received		$	8,941,021			$	8,278,210
Fees and commissions received			420,723				816,712
Interest paid			(2,585,934	)			(2,852,210	)
Cash paid to suppliers and employees			(4,447,524	)			(6,305,052	)
Income taxes paid			(740,843	)			(473,574	)
			1,587,443				(535,914	)
Cash flows from investing activities
Net change in time deposits in other banks			4,651,245				(7,683,404	)
Purchase of investment securities
Held to maturity			(20,316,548	)			—
Available for sale			(3,140,625	)			(9,624,892	)
Proceeds from disposal of investment securities
Held to maturity at maturity or call			1,513,869				1,360,050
Available for sale at maturity or call			4,454,506				4,207,792
Available for sale securities sold			—				4,243,654
Loans made, net of principal collected			(21,247,839	)			(23,082,772	)
Redemption (Purchase) of equity securities			210,000				(831,100	)
Purchase of premises, equipment and software			(265,700	)			(2,466,938	)
			(34,141,092	)			(33,877,610	)
Cash flows from financing activities
Net increase (decrease) in
Time deposits			5,177,927				24,963,989
Other deposits			27,253,358				10,704,530
Increase in short-term borrowings			17,640,314				(2,497,662	)
Decrease in long-term borrowings			(40,969	)			(38,488	)
Cash dividends paid-preferred stock			—				(155,556	)
Cash dividends paid-common stock			(232,799	)			(231,742	)
Distributions to minority members			(9,336	)			—
			49,788,495				32,745,071
Net increase (decrease) in cash and cash equivalents			17,234,846				(1,668,453	)
Cash and cash equivalents at beginning of year			11,436,587				10,963,695
Cash and cash equivalents at end of year		$	28,671,433			$	9,295,242

The accompanying notes are an integral part of these consolidated financial statements

Old Line Bancshares, Inc. & Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)

Six Months Ended June 30,		2010				2009
Reconciliation of net income to net cash provided by operating activities
Net income		$	953,948			$	1,162,573
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization			403,846				334,698
Provision for loan losses			240,000				550,000
Change in deferred loan fees net of costs			(26,549	)			(58,598	)
Gain on sale of securities			—				(158,837	)
Amortization of premiums and discounts			110,953				45,550
Deferred income taxes			(36,710	)			(31,568	)
Stock based compensation awards			66,252				90,584
Increase (decrease) in
Accrued interest payable			(56,836	)			13,819
Income tax payable			(175,543	)			77,247
Other liabilities			186,322				(3,012,266	)
Decrease (increase) in
Accrued interest receivable			(107,315	)			(38,024	)
Bank owned life insurance			(143,219	)			(163,051	)
Prepaid income taxes			(28,458	)			35,649
Other assets			200,752				616,310
		$	1,587,443			$	(535,914	)
Supplemental Disclosure:
Loans transferred to other real estate owned		$	223,169			$	—

The accompanying notes are an integral part of these consolidated financial statements

Old Line Bancshares, Inc. & Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

		Organization and Description of Business-Old Line Bancshares, Inc. (Old Line Bancshares) was incorporated under the laws of the State of Maryland on April 11, 2003 to serve as the holding company of Old Line Bank. The primary business of Old Line Bancshares is to own all of the capital stock of Old Line Bank. We provide a full range of banking services to customers located in Prince George’s, Charles, Anne Arundel, and St. Mary’s counties in Maryland and surrounding areas.
		On November 17, 2008, we purchased Chesapeake Custom Homes, L.L.C.’s 12.5% membership interest in Pointer Ridge Office Investment, LLC (Pointer Ridge), a real estate investment company. The effective date of the purchase was November 1, 2008. As a result of this purchase, our membership interest increased from 50.0% to 62.5%. Consequently, we consolidated Pointer Ridge’s results of operations from the date of acquisition. Prior to the date of acquisition, we accounted for our investment in Pointer Ridge using the equity method.
		Basis of Presentation and Consolidation-The accompanying consolidated financial statements include the activity of Old Line Bancshares and its wholly owned subsidiary, Old Line Bank, and its majority owned subsidiary Pointer Ridge. We have eliminated all significant intercompany transactions and balances.
		We report the non-controlling interest in Pointer Ridge separately in the consolidated balance sheet. We reported the income of Pointer Ridge attributable to Old Line Bancshares from the date of our acquisition of majority interest on the consolidated statement of income.
		The foregoing consolidated financial statements are unaudited; however, in the opinion of management we have included all adjustments (comprising only normal recurring accruals) necessary for a fair presentation of the results of the interim period. We derived the balances as of December 31, 2009 from audited financial statements. These statements should be read in conjunction with Old Line Bancshares’ financial statements and accompanying notes included in Old Line Bancshares’ Form 10-K for the year ended December 31, 2009. We have made no significant changes to Old Line Bancshares’ accounting policies as disclosed in the Form 10-K.
		The accounting and reporting policies of Old Line Bancshares conform to accounting principles generally accepted in the United States of America.
		Accounting Standards Codification-The Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) became effective on July 1, 2009. At that date, ASC became FASB’s officially recognized source of authoritative United States (U.S.) generally accepted accounting principles (GAAP) applicable to all public and non-public, non-governmental entities, superseding existing FASB, American Institute of Certified Public Accountants (AICPA), Emerging Issues Task Force (EITF) and related literature. Rules and interpretive releases of the United States Securities and Exchange Commission (SEC) under the authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. All other accounting literature is considered non-authoritative. The switch to ASC affects the way companies refer to U.S. GAAP in financial statements and accounting policies. Citing particular content in the ASC involves specifying the unique numeric path to the content through the Topic, Subtopic, Section and Paragraph structure.
		Reclassifications-We have made certain reclassifications to the 2009 financial presentation to conform to the 2010 presentation.
		Subsequent Events-We evaluated subsequent events after June 30, 2010 through July 28, 2010, the date this report was available to be issued. No significant subsequent events were identified which would affect the presentation of the financial statements.

2. INVESTMENT SECURITIES

		As Old Line Bank purchases securities, management determines if we should classify the securities as held to maturity, available for sale or trading. We record the securities which management has the intent and ability to hold to maturity at amortized cost which is cost adjusted for amortization of premiums and accretion of discounts to maturity. We classify securities which we may sell before maturity as available for sale and carry these securities at fair value with unrealized gains and losses included in stockholders’ equity on an after tax basis. Management has not identified any investment securities as trading.
		We record gains and losses on the sale of securities on the trade date and determine these gains or losses using the specific identification method. We amortize premiums and accrete discounts using the interest method. Presented below is a summary of the amortized cost and estimated fair value of securities.

						Gross				Gross
		Amortized				unrealized				unrealized				Estimated
		cost				gains				losses				fair value
June 30, 2010
Available for sale
U.S. government agency		$	5,365,191			$	120,953			$	(9,532	)		$	5,476,612
Municipal securities			2,000,965				33,618				(235	)			2,034,348
Mortgage-backed			18,649,052				841,541				—				19,490,593
		$	26,015,208			$	996,112			$	(9,767	)		$	27,001,553
Held to maturity
Municipal securities		$	682,817			$	7,592			$	(15,632	)		$	674,777
Mortgage-backed			23,890,111				614,870				—				24,504,981
		$	24,572,928			$	622,462			$	(15,632	)		$	25,179,758
December 31, 2009
Available for sale
U.S. government agency		$	7,133,657			$	171,946			$	(14,928	)		$	7,290,675
Municipal securities			2,253,107				36,759				(14,294	)			2,275,572
Mortgage-backed			18,017,019				429,682				—				18,446,701
		$	27,403,783			$	638,387			$	(29,222	)		$	28,012,948
Held to maturity
Municipal securities		$	300,779			$	2,714			$	—			$	303,493
Mortgage-backed			5,505,728				267,544				—				5,773,272
		$	5,806,507			$	270,258			$	—			$	6,076,765

2. INVESTMENT SECURITIES (Continued)

As of June 30, 2010, securities with unrealized losses segregated by length of impairment were as follows:

		Fair				Unrealized
June 30, 2010		value				losses
Unrealized losses less than 12 months
U.S. government agency		$	1,826,836			$	9,532
Municipal securities			466,399				15,632
Mortgage-backed			—				—
Total unrealized losses less than 12 months			2,293,235				25,164
Unrealized losses greater than 12 months
Municipal securities			200,318				235
Mortgage-backed			—				—
Total unrealized losses greater than 12 months			200,318				235
Total unrealized losses
U.S. government agency			1,826,836				9,532
Municipal securities			666,717				15,867
Mortgage-backed			—				—
Total unrealized losses		$	2,493,553			$	25,399

		We consider all unrealized losses on securities as of June 30, 2010 to be temporary losses because we will redeem each security at face value at or prior to maturity. We have the ability and intent to hold these securities until recovery or maturity. As of June 30, 2010, we do not have the intent to sell any of the securities classified as available for sale and believe that it is more likely than not that we will not have to sell any such securities before a recovery of cost. In most cases, market interest rate fluctuations cause a temporary impairment in value. We expect the fair value to recover as the investments approach their maturity date or repricing date or if market yields for these investments decline. We do not believe that credit quality caused the impairment in any of these securities. Because we believe these impairments are temporary, we have not realized any loss in our consolidated statement of income.
		In the three month period ended June 30, 2010, we did not record any gains or losses from the sale of available for sale securities. In the three month period ended June 30, 2009, we recorded gross realized gains of $157,917 from the sale of available-for-sale securities.

2.

INVESTMENT SECURITIES (Continued)

Contractual maturities and pledged securities at June 30, 2010 are shown below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without prepayment penalties. We classify mortgage backed securities based on maturity date. However, we receive payments on a monthly basis.

		Available for Sale								Held to Maturity
		Amortized				Fair				Amortized				Fair
June 30, 2010		cost				value				cost				value
Maturing
Within one year		$	395,000			$	395,036			$	—			$	—
Over one to five years			4,588,674				4,747,404				—				—
Over five to ten years			10,822,269				11,168,645				4,994,073				5,148,237
Over ten years			10,209,265				10,690,468				19,578,855				20,031,521
		$	26,015,208			$	27,001,553			$	24,572,928			$	25,179,758
Pledged securities		$	—			$	—			$	—			$	—

3. POINTER RIDGE OFFICE INVESTMENT, LLC

		In 2008, we purchased Chesapeake Custom Homes, L.L.C.’s 12.5% membership interest in Pointer Ridge. As a result of this purchase, we own 62.5% of Pointer Ridge and consolidated their results of operations from the date of acquisition.
		The following table summarizes the condensed Balance Sheets and Statements of Income information for Pointer Ridge.
		Pointer Ridge Office Investment, LLC

		June 30,				December 31,
Balance Sheets		2010				2009
Current assets		$	811,954			$	891,233
Non-current assets			7,334,703				7,432,268
Liabilities			6,436,770				6,480,230
Equity			1,709,887				1,843,271

		Three Months Ended								Six Months Ended
		June 30,								June 30,
Statements of Income		2010				2009				2010				2009
Revenue		$	199,657			$	245,806			$	397,196			$	780,961
Expenses			241,904				243,388				505,684				513,793
Net income (loss)		$	(42,247	)		$	2,418			$	(108,488	)		$	267,168

4. INCOME TAXES

The provision for income taxes includes taxes payable for the current year and deferred income taxes. We determine deferred tax assets and liabilities based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which we expect the differences to reverse. We have not recorded a valuation allowance against deferred tax assets as management believes that it is more likely than not that we will realize all of the deferred tax assets because they were supported by recoverable taxes paid in prior years. We allocate tax expense and tax benefits to Old Line Bank and Old Line Bancshares based on their proportional share of taxable income.

5. EARNINGS PER COMMON SHARE

		Effective January 1, 2009, we adopted the new authoritative accounting guidance under FASB ASC Topic 260, Earnings Per Share, which provides that non-vested share based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of basic earnings per common share pursuant to the two class method. We have determined that our outstanding stock option awards are not participating securities and do not include them in the computation of basic earnings per common share. We have determined that our restricted stock awards are participating securities and include them in the computation of basic earnings per common share. We calculate basic earnings per common share by dividing net income by the weighted average number of shares of common stock outstanding giving retroactive effect to stock dividends.
		We calculate diluted earnings per common share by including the average dilutive common stock equivalents outstanding during the period. Dilutive common equivalent shares consist of stock options, calculated using the treasury stock method.

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2010				2009				2010				2009
Weighted average number of shares			3,880,005				3,862,364				3,876,789				3,862,364
Dilutive average number of shares			20,595				6,713				17,300				6,358

6. STOCK-BASED COMPENSATION

		We account for stock options and restricted stock awards under the fair value method of accounting using a Black-Scholes valuation model to measure stock-based compensation expense at the date of grant. We recognize compensation expense related to stock-based compensation awards in our income statements over the period during which we require an individual to provide service in exchange for such award. For the six months ended June 30, 2010 and 2009, we recorded stock-based compensation expense of $66,252 and $90,584, respectively. For the three months ended June 30, 2010 and 2009, we recorded stock-based compensation expense of $25,982 and $19,975, respectively.
		We only recognize tax benefits for options that ordinarily will result in a tax deduction when the grant is exercised (non-qualified options). There were no non-qualified options included in the expense calculation during the three months and six months ended June 30, 2010 or the three months ended June 30, 2009. We recognized an $8,298 tax benefit associated with the portion of the expense that was related to the issuance of non-qualified options for the six months ended June 30, 2009.

6.

STOCK-BASED COMPENSATION (Continued)

		We have two stock option plans under which we may issue stock options and restricted stock, the 2001 Incentive Stock Option Plan, as amended, and the 2004 Equity Incentive Plan. Our Compensation Committee administers the equity incentive plans. As the plans outline, the Compensation Committee approves stock option and restricted stock grants to directors and employees, determines the number of shares, the type of option, the option or share price, the term (not to exceed 10 years from the date of issuance), the restrictions, and the vesting period of options and restricted stock issued. The Compensation Committee has approved and we have granted options vesting immediately as well as over periods of two, three and five years and restricted stock awards that vest over periods of twelve months to three years. We recognize the compensation expense associated with these grants over their respective vesting periods. At June 30, 2010, there was $140,335 of total unrecognized compensation cost related to non-vested stock options and restricted stock awards that we expect to realize over the next 3 years. As of June 30, 2010, there were 31,308 shares remaining available for future issuance under the equity incentive plans. Directors and officers did not exercise any options during the three month or six month periods ended June 30, 2010 or 2009. At the 2010 Annual Meeting of Stockholders, the stockholders approved the 2010 Equity Incentive Plan, which makes an additional 250,000 common shares available for issuance of various stock awards
		A summary of the stock option activity during the six month period follows:

		June 30,
		2010								2009
						Weighted								Weighted
		Number				average				Number				average
		of shares				exercise price				of shares				exercise price
Outstanding, beginning of period			299,270			$	8.50				236,620			$	9.09
Options granted			22,581				7.13				62,650				6.30
Options forfeited			—				—				—				—
Outstanding, end of period			321,851			$	8.41				299,270			$	8.50

Information related to options as of June 30, 2010 follows:

		Outstanding options												Exercisable options
						Weighted				Weighted								Weighted
		Number				average				average				Number				average
Exercise		of shares at				remaining				exercise				of shares at				exercise
price		June 30, 2010				term				price				June 30, 2010				price
$3.33- $4.17			11,700				0.50			$	3.44				11,700			$	3.44
$4.18- $5.00			18,000				2.06				4.69				18,000				4.69
$5.01- $7.64			85,231				8.84				6.52				53,294				6.42
$7.65- $8.65			37,300				7.59				7.75				37,300				7.75
$8.66- $10.00			46,620				4.14				9.74				46,620				9.74
$10.01- $11.31			123,000				5.81				10.43				119,000				10.42
			321,851				6.18			$	8.41				285,914			$	8.57

Intrinsic value of outstanding options where the market value exceeds the exercise price		$	182,735
Intrinsic value of exercisable options where the market value exceeds the exercise price		$	156,585

6. STOCK-BASED COMPENSATION (Continued)

During the six months ended June 30, 2010, we granted 17,641 restricted common stock awards. Of these, 8,280 will vest on December 31, 2010, 4,681 will vest on December 31, 2011 and 4,680 will vest on December 31, 2012. We did not grant any restricted common stock awards during the six months ended June 30, 2009. A summary of the restricted stock awards during the six month period follows:

		June 30,
		2010
						Weighted
						average
		Number				grant date
		of shares				fair value
Outstanding, beginning of period			—			$	—
Restricted stock granted			17,641				7.13
Restricted stock forfeited			—				—
Outstanding, end of period			17,641			$	7.13
Vested, end of period			—				—
Intrinsic value of outstanding restricted stock awards						$	132,484
Intrinsic value of vested restricted stock awards						$	—

7. RETIREMENT PLAN

		Eligible employees participate in a profit sharing plan that qualifies under Section 401(k) of the Internal Revenue Code. The plan allows for elective employee deferrals and Old Line Bank makes matching contributions of up to 4% of eligible employee compensation. Our contributions to the plan, included in employee benefit expenses, for the six months ended June 30, 2010 and 2009 were $78,950 and $63,621, respectively. Old Line Bank’s contribution to the plan for the three months ended June 30, 2010 and 2009 were $41,280 and $32,245, respectively.
		Old Line Bank also offers Supplemental Executive Retirement Plans (SERPs) to its executive officers providing for retirement income benefits. We accrue the present value of the SERPs over the remaining number of years to the executives’ retirement dates. Old Line Bank’s expenses for the SERPs for the six month periods ended June 30, 2010 and 2009 were $102,676 and $61,169, respectively. The SERP expense for the three month periods ended June 30, 2010 and 2009 were $58,728 and $29,811, respectively. The SERPs are non-qualified defined benefit pension plans that we have not funded.

8. FAIR VALUE MEASUREMENTS

On January 1, 2008, we adopted FASB ASC Topic 820 Fair Value Measurements and Disclosures which defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability, or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability shall not be adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities; it is not a forced transaction. Market participants are

8. FAIR VALUE MEASUREMENTS (Continued)

		buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact and (iv) willing to transact. We value investment securities classified as available for sale at fair value. The fair value hierarchy established in FASB ASC Topic 820 defines three input levels for fair value measurement. Level 1 is based on quoted market prices in active markets for identical assets. Level 2 is based on significant observable inputs other than those in Level 1. Level 3 is based on significant unobservable inputs.
		We value investment securities classified as available for sale at fair value on a recurring basis. We value treasury securities, government sponsored entity securities, and some agency securities under Level 1, and collateralized mortgage obligations and some agency securities under Level 2. At June 30, 2010, we established values for available for sale investment securities as follows (000’s);

		Total Fair Value				Level 1				Level 2				Level 3
		June 30, 2010				Inputs				Inputs				Inputs
Investment securities available for sale		$	27,002			$	3,650			$	23,352			$	—

		Our valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. While management believes our methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value. Furthermore, we have not comprehensively revalued the fair value amounts since the presentation dates, and therefore, estimates of fair value after the balance sheet date may differ significantly from the above presented amounts.
		We use the following methodologies for estimating fair values of financial instruments that we do not measure on a recurring basis. The estimated fair values of financial instruments equal the carrying value of the instruments except as noted.
		Time Deposits-The fair value of time deposits in other banks is an estimate determined by discounting future cash flows using current rates offered for deposits of similar remaining maturities.
		Investment Securities-We base the fair values of investment securities upon quoted market prices or dealer quotes.
		Loans-We estimate the fair value of loans by discounting future cash flows using current rates for which we would make similar loans to borrowers with similar credit histories.
		Interest bearing deposits-The fair value of demand deposits and savings accounts is the amount payable on demand. We estimate the fair value of fixed maturity certificates of deposit using the rates currently offered for deposits of similar remaining maturities.
		Long and short term borrowings-The fair value of long and short term fixed rate borrowings is estimated by discounting the value of contractual cash flows using rates currently offered for advances with similar terms and remaining maturities.
		Loan Commitments, Standby and Commercial Letters of Credit-Lending commitments have variable interest rates and “escape” clauses if the customer’s credit quality deteriorates. Therefore, the fair value of these items is insignificant and we have not included it in the following table.

8. FAIR VALUE MEASUREMENTS (Continued)

		June 30, 2010								December 31, 2009
		Carrying				Fair				Carrying				Fair
		amount				value				amount				value
Financial assets
Time deposits		$	10,379,857			$	10,394,570			$	15,031,102			$	15,491,899
Investment securities			51,574,481				52,181,311				33,819,455				34,089,713
Loans			285,819,888				288,825,168				265,008,669				269,907,318
Financial liabilities
Interest bearing deposits			265,370,631				266,902,785			$	245,464,373			$	247,456,675
Short term borrowings			33,790,253				33,850,717				16,149,939				16,297,360
Long term borrowings			16,413,098				17,079,907				16,454,067				17,261,757

		We measure certain financial assets and financial liabilities at fair value on a non-recurring basis. These assets and liabilities are subject to fair value adjustments in certain circumstances such as when there is evidence of impairment. We did not have any financial assets or liabilities measured at fair value on a non-recurring basis during the six months ended June 30, 2010 or year ended December 31, 2009.
		We also measure certain non-financial assets such as other real estate owned and repossessed or foreclosed property at fair value on a non-recurring basis. Generally, we estimate the fair value of these items using Level 2 inputs based on observable market data or Level 3 inputs based on discounting criteria. At June 30, 2010, other real estate owned measured at fair value using Level 2 valuation inputs was $223,169 and we did not have any repossessed property.

9. ACCOUNTING STANDARDS UPDATES

		Accounting Standards Updates (ASU) No. 2009-16, “Transfers and Servicing (Topic- 860)-Accounting for Transfers of Financial Assets” amends prior accounting guidance to enhance reporting about transfers of financial assets, including securitizations, and where companies have continuing exposure to the risks related to transferred financial assets. ASU 2009-16 also requires additional disclosures about all continuing involvement with transferred financial assets including information about gains and losses resulting from transfers during the period. The provisions of ASU 2009-16 became effective on January 1, 2010 and did not have a significant impact on our consolidated results of operations or financial position.
		ASU No. 2009-17, “Consolidations (Topic 810)-Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities” amends prior guidance to change how a company determines when an entity that is sufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance. ASU 2009-17 requires additional disclosures about the reporting entity’s involvement with variable interest entities and any significant changes in risk exposure due to that involvement as well as its affect on the entity’s financial statements. As further discussed below, ASU No. 2010-10, “Consolidations (Topic 810),” deferred the effective date of ASU 2009-17 for a reporting entity’s interests in investment companies. The provisions of ASU 2009-17 became effective on January 1, 2010 and they did not have a material impact on our consolidated results of operations or financial position.

9. ACCOUNTING STANDARDS UPDATES (Continued)

		ASU No. 2010-06, “Fair Value Measurements and Disclosures (Topic 820)-Improving Disclosures About Fair Value Measurements” requires expanded disclosures related to fair value measurements including (i) the amounts of significant transfers of assets or liabilities between Levels 1 and 2 of the fair value hierarchy and the reasons for the transfers, (ii) the reasons for transfers of assets or liabilities in or out of Level 3 of the fair value hierarchy, with significant transfers disclosed separately, (iii) the policy for determining when transfers between the levels of the fair value hierarchy are recognized and (iv) for recurring fair value measurements of assets and liabilities in Level 3 of the fair value hierarchy, a gross presentation of information about purchases, sales, issuances and settlements. ASU 2010-06 further clarifies that (i) companies should provide fair value measurement disclosures for each class of assets and liabilities (rather than major category), which would generally be a subset of assets or liabilities within a line item in the statement of financial position and (ii) companies should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and non-recurring fair value measurements for each class of assets and liabilities included in Levels 2 and 3 of the fair value hierarchy. ASU No. 2010-06 requires the disclosures related to the gross presentation of purchases, sales, issuances and settlements of assets and liabilities included in Level 3 of the fair value hierarchy beginning January 1, 2011. The remaining disclosure requirements and clarifications made by ASU 2010-06 became effective on January 1, 2010. See Note 8-Fair Value Measurements.
		ASU No. 2010-10, “Consolidations (Topic 810)-Amendments for Certain Investment Funds” defers the effective date of the amendments to the consolidation requirements made by ASU 2009-17 to a company’s interest in an entity (i) that has all of the attributes of an investment company, as specified under ASC Topic 946, “Financial Services-Investment Companies,” or (ii) for which it is industry practice to apply measurement principles of financial reporting that are consistent with those in ASC Topic 946. As a result of the deferral, companies are not required to apply the ASU 2009-17 amendments to the Subtopic 810-10 consolidation requirements to its interest in an entity that meets the criteria to qualify for the deferral. ASU 2010-10 also clarifies that any interest held by a related party should be treated as though it is an entity’s own interest when evaluating the criteria for determining whether such interest represents a variable interest. ASU 2010-10 also clarifies that companies should not use a quantitative calculation as the sole basis for evaluating whether a decision maker’s or service provider’s fee is variable interest. The provisions of ASU 2010-10 became effective as of January 1, 2010 and did not have a material impact on our consolidated results of operations or financial position.
		ASU No. 2010-11, “Derivatives and Hedging (Topic 815)-Scope Exception Related to Embedded Credit Derivatives” clarifies that the only form of an embedded credit derivative that is exempt from embedded derivative bifurcation requirement are those that relate to the subordination of one financial instrument to another. Entities that have contracts containing an embedded credit derivative feature in a form other than subordination may need to separately account for the embedded credit derivative feature. The provisions of ASU 2010-11 will be effective on July 1, 2010. We do not anticipate that it will have a material impact on our consolidated results of operations or financial position.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

          Some of the matters discussed below include forward-looking statements. Forward-looking statements often use words such as “believe,” “expect,” “plan,” “may,” “will,” “should,” “project,” “contemplate,” “anticipate,” “forecast,” “intend” or other words of similar meaning. You can also identify them by the fact that they do not relate strictly to historical or current facts. Our actual results and the actual outcome of our expectations and strategies could be different from those anticipated or estimated for the reasons discussed below and under the heading “Information Regarding Forward Looking Statements.”

Overview

          Old Line Bancshares was incorporated under the laws of the State of Maryland on April 11, 2003 to serve as the holding company of Old Line Bank.

          Our primary business is to own all of the capital stock of Old Line Bank. We also have an approximately $1.1 million investment in a real estate investment limited liability company named Pointer Ridge Office Investment, LLC (Pointer Ridge). We own 62.5% of Pointer Ridge. Frank Lucente, one of our directors and a director of Old Line Bank, controls 12.5% of Pointer Ridge and controls the manager of Pointer Ridge. The purpose of Pointer Ridge is to acquire, own, hold for profit, sell, assign, transfer, operate, lease, develop, mortgage, refinance, pledge and otherwise deal with real property located at the intersection of Pointer Ridge Road and Route 301 in Bowie, Maryland. Pointer Ridge owns a commercial office building containing approximately 40,000 square feet and leases this space to tenants. We lease approximately 50% of this building for our main office and operate a branch of Old Line Bank from this address.

Summary of Recent Performance and Other Activities

          In a continually challenging economic environment, we are pleased to report continued profitability for the second quarter of 2010. Net income available to common stockholders was $530,097 or $0.14 per basic and diluted common share for the three month period ending June 30, 2010. This was $82,611 or 18.46% higher than net income available to common stockholders of $447,486 or $0.12 per basic and diluted common share for the same period in 2009. Net income available to common stockholders was $994,631 or $0.26 per basic and diluted common share for the six month period ending June 30, 2010. This was $137,390 or 16.03% higher than net income available to common stockholders of $857,241 or $0.22 per basic and diluted common share for the same period in 2009.

          During the first six months of 2010, the following events occurred.

	•		We placed two additional loans on non-accrual status which increased total non-accrual loans to $4.7 million (1.14% of total assets) from $1.6 million (0.44%) at December 31, 2009. We do not have any other loans past due between 30 and 89 days at quarter end.
	•		We decreased the provision for loan losses by $310,000 from $550,000 to $240,000.
	•		The loan portfolio grew $20.8 million or 7.85%.
	•		Total deposits grew $32.5 million or 11.35%.
	•		We maintained liquidity and by all regulatory measures remained “well capitalized”.
	•		We recognized a loss on our investment in Pointer Ridge of approximately $68,000.
	•		Andre’ J. Gingles was appointed to our Board of Directors.
	•		Our Greenbelt lending team that we hired in December 2009 was a significant contributor to our loan and deposit growth during the three and six month periods.

          The following summarizes the highlights of our financial performance for the three month period ended June 30, 2010 compared to the three month period ended June 30, 2009 (figures in the table may not match those discussed in the balance of this section due to rounding).

		Three months ended June 30,
		(Dollars in thousands)
		2010				2009				$ Change				% Change
Net income available to common stockholders		$	530			$	448			$	82				18.30	%
Interest revenue			4,574				4,227				347				8.21
Interest expense			1,281				1,416				(135	)			(9.53	)
Net interest income after provision for loan losses			3,123				2,561				562				21.94
Non-interest revenue			271				535				(264	)			(49.35	)
Non-interest expense			2,610				2,272				338				14.88
Average total loans			279,843				253,411				26,432				10.43
Average interest earning assets			356,899				306,264				50,635				16.53
Average total interest bearing deposits			256,971				215,226				41,745				19.40
Average non-interest bearing deposits			52,343				39,169				13,174				33.63
Net interest margin (1)			3.75	%			3.71	%
Return on average equity			5.88	%			5.27	%
Basic earnings per common share		$	0.14			$	0.12			$	0.02				16.67
Diluted earnings per common share			0.14				0.12				0.02				16.67

          The following summarizes the highlights of our financial performance for the six month period ended June 30, 2010 compared to the six month period ended June 30, 2009 (figures in the table may not match those discussed in the balance of this section due to rounding).

		Six months ended June 30,
		(Dollars in thousands)
		2010				2009				$ Change				% Change
Net income available to common stockholders		$	995			$	857			$	138				16.10	%
Interest revenue			8,964				8,329				635				7.62
Interest expense			2,529				2,866				(337	)			(11.76	)
Net interest income after provision for loan losses			6,195				4,913				1,282				26.09
Non-interest revenue			564				1,139				(575	)			(50.48	)
Non-interest expense			5,305				4,334				971				22.40
Average total loans			274,267				246,784				27,483				11.14
Average interest earning assets			345,319				299,232				46,087				15.40
Average total interest bearing deposits			249,966				207,971				41,995				20.19
Average non-interest bearing deposits			49,571				37,786				11,785				31.19
Net interest margin (1)			3.80	%			3.71	%
Return on average equity			5.58	%			5.15	%
Basic earnings per common share		$	0.26			$	0.22			$	0.04				18.18
Diluted earnings per common share			0.26				0.22				0.04				18.18

Growth Strategy

          We have based our strategic plan on the premise of enhancing stockholder value and growth through branching and operating profits. Our short-term goals include maintaining credit quality, maintaining an attractive branch network, expanding fee income, generating extensions of core banking services, and using technology to maximize stockholder value. During the past two years, we have expanded in Prince George’s County and Anne Arundel County, Maryland.

          In December 2009, we added a team of four experienced, highly skilled loan officers to our staff. These officers have a combined 50 years of commercial banking experience and were employed by a large regional bank with offices in the suburban Maryland market prior to joining us. These individuals have worked in our market area for many years, have worked together as a team for several years and have a history of successfully generating a high volume of commercial, construction and commercial real estate loans.

          On July 1, 2009, we opened a branch at 1641 State Route 3 North, Crofton, Maryland in Anne Arundel County. During July and August of 2009, we hired the staff for this location. In October 2009, we opened our branch in the Fairwood Office Park located at 12100 Annapolis Road, Suite 1, Glen Dale, Maryland. We hired the staff for this location during the third quarter of 2009.

          Other Opportunities

          We use the Internet and technology to augment our growth plans. Currently, we offer our customers image technology, Internet banking with on-line account access and bill payer service. We provide selected commercial customers the ability to remotely capture their deposits and electronically transmit them to us.

          In order to support our growth, provide improved management information capabilities and enhance the products and services we deliver to our customers, during the 1^st quarter of 2009, we began enhancing our core data processing systems. We completed this process in April 2009. As a result, we anticipate that data processing costs will be moderately higher in 2010 than in 2009. We will continue to evaluate cost effective ways that technology can enhance our management capabilities, products and services.

          We may take advantage of strategic opportunities presented to us via mergers occurring in our marketplace. For example, we may purchase branches that other banks close or lease branch space from other banks or hire additional loan officers. We also continually evaluate and consider opportunities with financial services companies or institutions with which we may become a strategic partner, merge or acquire.

          Repayment of Troubled Asset Relief Program (TARP) Investment

          On July 15, 2009, we repurchased from the U.S. Treasury the 7,000 shares of preferred stock that we issued to them in December 2008 under the U.S. Treasury’s Capital Purchase Program through the Troubled Asset Relief Program. We paid the U.S. Treasury $7,058,333 to repurchase the preferred stock which reflects the liquidation value of the preferred stock and $58,333 of accrued but unpaid dividends. In August 2009, we also repurchased at a fair market value of $225,000 the warrant to purchase 141,892 shares of our common stock.

          Although the current economic climate continued to present significant challenges for our industry, we worked diligently towards our goal of becoming the premier community bank east of Washington D.C. While it remains uncertain whether the economy will continue on its path towards recovery, it appears the economy may reach sustainable recovery during late 2010 or early 2011. We remain cautiously optimistic that we have identified any problem assets and the remaining borrowers will continue to stay current on their loans. Now that we have substantially completed our branch expansion, enhanced our data processing capabilities and expanded our commercial lending team, we believe that we are well positioned to capitalize on the opportunities that may become available in a healthy economy.

          Because of the new branches and the loan production team hired in 2009, we anticipate salaries and benefits expenses and other operating expenses will continue to increase during 2010. We anticipate that, over time, income generated from the branches and our new loan officers will offset any increase in expenses. We also expect that for the remainder of 2010 Pointer Ridge will operate at a loss. We believe with our 10 branches, our lending staff, our corporate infrastructure and our solid balance sheet and strong capital position, our team can continue to focus our efforts on improving earnings per share and enhancing stockholder value.

          Results of Operations

     Net Interest Income

          Net interest income is the difference between income on interest earning assets and the cost of funds supporting those assets. Earning assets are comprised primarily of loans, investments, interest bearing deposits and federal funds sold. Cost of funds consists of interest bearing deposits and other borrowings. Non-interest bearing deposits and capital are also funding sources. Changes in the volume and mix of earning assets and funding sources along with changes in associated interest rates determine changes in net interest income.

Three months ended June 30, 2010 compared to three months ended June 30, 2009

          Net interest income after provision for loan losses for the three months ended June 30, 2010 increased $562,178 or 21.95% to $3.1 million from $2.6 million for the same period in 2009.

          Interest revenue increased from $4.2 million for the three months ended June 30, 2009 to $4.6 million for the same period in 2010. As discussed below and outlined in detail in the Rate/Volume Analysis, these changes were the result of average interest earning assets growing at a faster rate than average interest bearing liabilities. A decline in interest rates on these interest earning assets partially offset this growth. The interest rate on interest bearing liabilities also declined at a faster rate than the rate on interest earning assets. This resulted in an improvement in the net interest margin which also increased net interest income.

          Changes in the federal funds rate and the prime rate impact the interest rates on interest earning assets, net interest income and net interest margin. The prime interest rate, which is the rate banks offer to borrowers with strong credit, began 2008 at 7.25% and decreased 400 basis points during the year. The federal funds rate also declined 400 basis points during 2008. During the first quarter and six months of 2009 and 2010, the prime interest rate was 3.25% and the intended federal funds rate remained relatively constant at zero to 0.25%. These declines have caused the short and long term interest yield to decline dramatically during the past two years from prior periods. As a result, when investments and loans matured during 2009 and 2010, they were reinvested in lower yielding securities and loans.

          We offset the effect on net income caused by these declines primarily by growing total average interest earning assets $50.6 million or 16.52% to $356.9 million for the three months ended June 30, 2010 from $306.3 million for the three months ended June 30, 2009. The growth in average interest earning assets derived from a $26.4 million increase in average total loans, a $6.7 million increase in average interest bearing deposits and a $16.6 million increase in average investment securities. The growth in net interest income that derived from the increase in total average interest earning assets was partially offset by growth in average interest bearing liabilities. The growth in average interest bearing liabilities derived primarily from the $41.8 million increase in average interest bearing deposits which increased to $257.0 million for the three months ended June 30, 2010 from $215.2 million for the three months ended June 30, 2009. A $7.6 million increase in average borrowed funds also contributed to the growth in interest bearing liabilities.

          Our net interest margin was 3.75% for the three months ended June 30, 2010 as compared to 3.71% for the three months ended June 30, 2009. The yield on average interest earning assets declined during the period 38 basis points from 5.57% for the quarter ended June 30, 2009 to 5.19% for the quarter ended June 30, 2010. This decrease was primarily because we received a lower rate on federal funds, a lower rate on interest bearing deposits and the average rate on the loan portfolio declined 17 basis points. As outlined above, we partially offset these rate reductions through growth in the loan portfolio. The decline in interest rates also lowered our cost of interest bearing deposits in the three month period to 1.56% from 2.16% and our cost of borrowed funds to 2.41% from 2.65% in 2009.

          The following table illustrates average balances of total interest earning assets and total interest-bearing liabilities for the three months ended June 30, 2010 and 2009, showing the average distribution of assets, liabilities, stockholders’ equity and related income, expense and corresponding weighted average yields and rates. The average balances used in this table and other statistical data were calculated using average daily balances.

		Average Balances, Interest and Yields
		2010												2009
		Average												Average
Three Months Ended June 30,		balance				Interest				Yield				balance				Interest				Yield
Assets:
Federal funds sold(1)		$	1,918,232			$	1,543				0.32	%		$	744,817			$	305				0.16	%
Interest bearing deposits			23,062,192				54,777				0.95				16,352,452				60,123				1.47
Investment securities(1)(2)
U.S. Treasury			—				—				—				258,234				2,511				3.90
U.S. government agency			6,574,597				38,225				2.33				8,429,476				89,126				4.24
Mortgage backed securities			42,901,651				398,261				3.72				24,142,055				256,443				4.26
Municipal securities			2,456,788				30,512				4.98				2,526,641				31,382				4.98
Other			2,724,246				16,869				2.48				2,760,447				13,974				2.03
Total investment securities			54,657,282				483,867				3.55				38,116,853				393,436				4.14
Loans: (1) (3)
Commercial			76,703,160				1,049,082				5.49				61,412,247				980,585				6.40
Mortgage			188,752,588				2,826,331				6.01				176,590,989				2,588,507				5.88
Consumer			14,387,378				198,188				5.53				15,407,332				227,478				5.92
Total loans			279,843,126				4,073,601				5.84				253,410,568				3,796,570				6.01
Allowance for loan losses			2,581,336				—								2,360,513				—
Total loans, net of allowance			277,261,790				4,073,601				5.89				251,050,055				3,796,570				6.07
Total interest earning assets(1)			356,899,496				4,613,788				5.19				306,264,177				4,250,434				5.57
Non-interest bearing cash			7,758,921												7,880,288
Premises and equipment			17,231,394												13,703,787
Other assets			12,408,417												9,962,122
Total assets		$	394,298,228											$	337,810,374
Liabilities and Stockholders’ Equity:
Interest bearing deposits
Savings		$	7,985,806				7,154				0.36			$	7,232,711				6,697				0.37
Money market and NOW			49,497,248				106,738				0.86				33,607,802				37,925				0.45
Other time deposits			199,487,652				885,544				1.78				174,385,351				1,112,249				2.56
Total interest bearing deposits			256,970,706				999,436				1.56				215,225,864				1,156,871				2.16
Borrowed funds			46,772,435				281,189				2.41				39,214,888				259,463				2.65
Total interest bearing liabilities			303,743,141				1,280,625				1.69				254,440,752				1,416,334				2.23
Non-interest bearing deposits			52,343,095												39,168,711
			356,086,236												293,609,463
Other liabilities			1,405,463												1,651,365
Non-controlling interest			651,675												703,633
Stockholders’ equity			36,154,854												41,845,913
Total liabilities and stockholders’ equity		$	394,298,228											$	337,810,374
Net interest spread(1)											3.50												3.34
Net interest income and Net interest margin(1)						$	3,333,163				3.75	%						$	2,834,100				3.71	%