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FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from . . . . . . . .to . . . . . . .
Commission file number . . . . . . . . . . . . . . . .33-62278
GLEN BURNIE BANCORP
(Exact name of registrant as specified in its charter)
Maryland 52-1782444
- ------------------------------------ ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
101 Crain Highway, S.E., Glen Burnie, MD 21061
-----------------------------------------------
(Address of principal executive offices)
(Zip Code)
410-766-3300
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(Registrant's telephone number, including area code)
--------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 [ ] No [X]
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
The number of outstanding shares of the registrant's common
stock as of March 31, 1997 was 883,859.
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GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
(Unaudited)
March 31, December 31,
1997 1996
------------ -----------
Assets
<S> <C> <C>
Cash and due from banks $10,651 $12,503
Federal funds sold 3,150 10,175
Investment securities available for sale, at fair value 53,566 54,907
Investment securities held to maturity, at cost
(fair value March 31 $48,190; December 31 $41,993) 48,494 41,667
Loans receivable, net of allowance for credit losses
March 31, $4,285; December 31 $5,061 119,626 124,672
Premises and equipment at cost, net of accumulated
depreciation 4,221 4,154
Other real estate owned 608 602
Goodwill 463 477
Other assets 6,040 5,168
-------- --------
Total assets $246,819 $254,325
======== ========
Liabilities and Stockholders' Equity
Liabilities:
Deposits $224,579 $232,746
Short-term borrowings 2,916 548
Other liabilities 937 2,444
-------- --------
Total liabilities $228,432 $235,738
======== ========
Stockholders' equity:
Common stock, par value $100, authorized 5,000,000
shares; issued and outstanding March 31 883,859
shares; December 31 883,859 shares 8,839 8,839
Surplus 6,193 6,193
Retained earnings 3,524 3,290
Net unrealized appreciation (depreciation)
on securities available for sale,
net of income taxes (169) 265
-------- --------
Total stockholders' equity 18,387 18,587
-------- --------
Total liabilities and stockholders' equity $246,819 $254,325
======== ========
</TABLE>
2<PAGE>
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GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------
1997 1996
------ -------
<S> <C> <C>
Interest income on
Loans, including fees $ 2,860 $ 3,710
U.S. Treasury and U.S. government agency securities 1,278 685
State and municipal securities 346 377
Other 104 50
-------- --------
Total interest income 4,588 4,822
-------- --------
Interest expenses on
Deposits 1,826 1,948
Short-term borrowings 10 25
-------- --------
Total interest expense 1,836 1,973
-------- --------
Net interest income 2,752 2,849
Provision for credit losses 270 375
-------- --------
Net interest income after provision for
credit losses 2,482 2,474
-------- --------
Other income
Service charges on deposit accounts 266 286
Other fees and commissions 55 71
Other non-interest income 29 11
Gains on investment securities 3 87
-------- --------
Total other income 353 455
Other expenses
Salaries and employee benefits 1,235 1,133
Occupancy 323 346
Other Expenses 912 596
-------- --------
Total other expenses 2,470 2,075
-------- --------
Income (loss) before income taxes 365 854
Income tax expense (benefit) (10) 219
-------- --------
Net income (loss) $ 375 $ 635
======== ========
Net income (loss) per share of common stock $ 0.42 $ 0.72
======== ========
Weighted-average shares of common stock outstanding 883,859 876,492
======== ========
</TABLE>
3<PAGE>
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GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------
1997 1996
------ -------
<S> <C> <C>
Net cash used by operating activities $(1,339) $ (35)
------- -------
Cash flows from investing activities:
Proceeds from disposals of investment securities 3,582 9,102
Purchases of investment securities (9,830) (3,789)
Decrease in loans, net 4,776 517
Purchases of premises and equipment (208) (62)
Purchases of other real estate (20) 0
Proceeds from sales of premises and equipment 5 0
------- -------
Net cash provided (used) by investing activities (1,695) 5,768
------- -------
Cash flows from financing activities:
Increase (decrease) in deposits, net (8,167) 2,937
Increase (decrease) in short-term borrowings 2,368 (804)
Dividends paid (44) (218)
Issuance of common stock 0 138
------- -------
Net cash provided (used) by financing activities (5,843) 2,053
------- -------
Increase (decrease) in cash and cash equivalents (8,877) 7,786
Cash and cash equivalents, beginning of year 22,678 9,468
------- -------
Cash and cash equivalents, end of period $13,801 $17,254
======= =======
</TABLE>
4<PAGE>
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NOTE-1 - BASIS OF PRESENTATION
---------------------
The accompanying unaudited consolidated financial statements
were prepared in accordance with instructions for Form 10-Q and,
therefore, do not include all information and notes necessary for
a complete presentation of financial position, results of
operations, changes in stockholders' equity, and cash flows in
conformity with generally accepted accounting principles.
However, all adjustments (consisting only of normal recurring
accruals) which, in the opinion of management, are necessary for
a fair presentation of the unaudited consolidated financial
statements have been included in the results of operations for
the three months ended March 31, 1997 and 1996.
Operating results for the three-month period ended March 31,
1997 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997.
5<PAGE>
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Management's Discussion and analysis of Financial Condition And
Results Of Operations.
Results Of Operations
Glen Burnie Bancorp, a Maryland corporation (the "Company"),
and its subsidiaries, The Bank of Glen Burnie (the "Bank") and
GBB Properties, Inc., both Maryland corporations, had a
consolidated net income of $375,000 ($.42 per share) for the
first quarter of 1997 compared to consolidated net income of
$637,000 ($.73 per share) for the first quarter of 1996. The
change is primarily due to a decline in net interest income and
increases in non-interest operating expenses. These increases
were primarily in personnel, legal and professional expenses.
The consolidated net interest income prior to making
provision for credit losses was $2,752,000 for the first quarter
of 1997 and $2,851,000 for the same period in 1996, a decrease of
$95,000 (3.4%). The net interest margin for the first quarter of
1997 was 4.95% compared to 5.10% for the first quarter of 1996.
Increased expenses of the Company and its subsidiaries
during the first quarters of 1996 and 1997 also resulted from the
continuing costs of litigation.
Financial Condition
Total deposits as of March 31, 1997 totalled $224,579,000,
an increase of $429,000 (0.2%) for the preceding twelve months
and a decrease of $8,167,000 (3.5%) for the year to date. The
Bank believes that a general downward trend in interest rates
paid on deposit accounts has resulted in a trend away from lower
yielding deposit products toward higher yielding long-term
deposits. NOW accounts as of March 31, 1997 totalled
$22,726,000, a decrease of $376,000 (1.6%) from the end of the
first quarter of 1996 and $66,000 (0.3%) for the first quarter of
1997. Money market accounts declined $3,376,000 (12.4%) from the
end of the first quarter of 1996 and by $2,343,000 (8.9%) during
the first quarter to total $23,868,000 on March 31, 1997.
Savings deposits decreased $944,000 (1.9%) from March 31, 1996 to
$47,741,000 at March 31, 1997; the first quarter decrease was
$452,000 (0.9%). Meanwhile, certificates of deposit over
$100,000 totalled $9,065,000 on March 31, 1997, an increase of
$445,000 (5.2%) for the first quarter and $1,723,000 (23.5%) from
March 31, 1996. Other time deposits (made up of certificates of
deposit less than $100,000 and individual retirement accounts)
totalled $75,689,000 on March 31, 1997, a $1,761,000 (2.4%)
increase from March 31, 1996 and a $1,828,000 (2.4%) decrease
from December 31, 1996.
The Bank's cash and cash equivalents (cash due from banks,
interest-bearing deposits in other financial institutions, and
federal funds sold) as of March 31, 1997 was $13,801,000, a
6<PAGE>
<PAGE>
decrease of $3,453,000 (20.0%) from the March 31, 1996 total of
$17,254,000 and a decrease of $8,877,000 (39.1%) from the
December 31, 1996 total of $22,678,000. The aggregate market
value of investment securities held by the Bank as of March 31,
1997 was $101,756,000 compared to $96,900,000 as of December 31,
1996, a $4,856,000 (5.0%) increase, and compared to the March 31,
1996 total of $68,634,000, a $33,122,000 (48.2%) increase. The
reasons for the large increases in investment securities were
declines in outstanding loan balances.
The Bank's net loans totalled $149,568,000 on March 31, 1996
and $124,672,000 on December 31, 1996, compared to $119,626,000
on March 31, 1997. Over the one year period loans declined
$29,942,000 (20.0%), and for the quarter decreased $5,046,000
(4.0%). The decreases are largely due to a decrease in
commercial and residential mortgage loans during the period. The
Bank has decided to decrease its equipment and automobile lease
based lending because of the difficulties in monitoring the
financial condition of the clients of lease company borrowers.
LIQUIDITY AND CAPITAL RESOURCES
The Company currently has no business other than that of the
Bank and does not currently have any material funding
commitments. The Company's principal sources of liquidity are
cash on hand and dividends received from the Bank. The Bank is
subject to various regulatory restrictions on the payment of
dividends.
The Bank's principal sources of funds for investments and
operations are net income, deposits from its primary market area,
principal and interest payments on loans, interest received on
investment securities and proceeds from maturing investment
securities. Its principal funding commitments are for the
origination or purchase of loans and the payment of maturing
deposits. Deposits are considered a primary source of funds
supporting the Bank's lending and investment activities.
The Bank's most liquid assets are cash and cash equivalents,
which are cash on hand, amounts due from financial institutions,
federal funds sold, certificates of deposit with other financial
institutions that have an original maturity of three months or
less and money market mutual funds. The levels of such assets
are dependent on the Bank's operating financing and investment
activities at any given time. The variations in levels of cash
and cash equivalents are influenced by deposit flows and
anticipated future deposit flows.
The Bank may draw on a $26,000,000 line of credit from The
Federal Home Loan Bank of Atlanta. Borrowings under the line are
secured by a lien on the Bank's residential mortgage loans. As
of March 31, 1997 $2,000,000 was outstanding under this line.
7<PAGE>
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Item 3. Quantative and Qualitive Disclosure About Market Risk
Not applicable.
8<PAGE>
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PART II - OTHER INFORMATION
Item 4. Submission Of Matters To A Vote Of Security Holders
The Company's 1997 annual meeting was held on March 13,
1997. At the meeting directors were elected to serve a one year
term. The votes were as follows:
Nominees Elected As Directors
Name Votes In Favor
---- --------------
John E. Demyan 485,032
F. William Kuethe, Jr. 486,806
Frederick w. Kuethe, III 486,352
William N. Scherer, Sr. 485,966
Shirley E. Boyer 486,806
Thomas Clocker 486,026
Karen Thorwarth 485,512
Alan E. Hahn 485,313
Theodore L. Bertier, Jr. 487,411
Eugene P. Nepa 485,030
Mary Lou Wilcox 486,818
Name Votes In Favor
---- --------------
Susan Demyan 274,421
Matthew Shimoda 272,959
Richard Fine 273,907
Randall Williams, Jr. 274,528
There were no abstentions or broker non-votes.
By unopposed voice vote the Company's stockholders fixed the
number of directors for the ensuing year at eleven plus two
vacancies which may be filled at the discretion of the Board of
Directors. By unopposed voice vote they also authorized the
Board of Directors to select an outside auditing firm for the
1997 fiscal year.
9<PAGE>
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - The following exhibits are filed with this
report.
27 Financial Data Schedule (EDGAR Only)
(b) Reports on Form 8-K. A report on Form 8-K was filed on
February 20, 1997. The Items reported were Item 4 Changes in
Registrant's Certifying Accountants, Item 5 Other Events and Item
7 Financial Statements and Exhibits. Consolidated Reports of
Condition and Income as filed by the Company with the Federal
Reserve Bank of Richmond, Virginia for each quarter during 1994,
1995 and 1996 were filed as exhibits to the report on Form 8-K.
An amendment to the report was filed on February 25, 1997 to file
in electronic format certain exhibits which had been filed in
paper format.
10<PAGE>
<PAGE>
Signatures
----------
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Glen Burnie Bancorp
-------------------
(Registrant):
Date: July 17, 1997 By:/s/ John E. Porter
-----------------------------
John E. Porter
Chief Financial Officer
(Duly authorized officer and
principal financial officer)
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
The schedule contains summary financial information extracted
from the Condensed Consolidated Financial Statements of Glen
Burnie Bancorp and its subsidiaries for the quarter ending March
31, 1997 and is qualified in its entirety by reference to such
financial statements.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> Mar-31-1997
<CASH> 10,651
<INT-BEARING-DEPOSITS> 179,386
<FED-FUNDS-SOLD> 3,150
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 53,566
<INVESTMENTS-CARRYING> 48,494
<INVESTMENTS-MARKET> 48,190
<LOANS> 119,626
<ALLOWANCE> 4,285
<TOTAL-ASSETS> 246,819
<DEPOSITS> 224,579
<SHORT-TERM> 2,916
<LIABILITIES-OTHER> 937
<LONG-TERM> 0
<COMMON> 0
0
8,839
<OTHER-SE> 9,548
<TOTAL-LIABILITIES-AND-EQUITY> 246,819
<INTEREST-LOAN> 2,860
<INTEREST-INVEST> 1,728
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 4,588
<INTEREST-DEPOSIT> 1,826
<INTEREST-EXPENSE> 1,836
<INTEREST-INCOME-NET> 2,752
<LOAN-LOSSES> 270
<SECURITIES-GAINS> 3
<EXPENSE-OTHER> 2,470
<INCOME-PRETAX> 365
<INCOME-PRE-EXTRAORDINARY> 375
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 375
<EPS-PRIMARY> .42
<EPS-DILUTED> .42
<YIELD-ACTUAL> 8.32
<LOANS-NON> 4,422
<LOANS-PAST> 17
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 5,061
<CHARGE-OFFS> 1,093
<RECOVERIES> 47
<ALLOWANCE-CLOSE> 4,285
<ALLOWANCE-DOMESTIC> 4,285
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
