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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 September 30, 1996
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 September 30, 1996 was 883,700.
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GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
(Unaudited)
September 30, December 31,
1996 1995
------------ -----------
Assets
<S> <C> <C>
Cash and due from banks $ 10,700 $ 9,468
Investment securities available for sale,
at fair value 61,376 68,593
Investment securities held to maturity,
at cost (fair value September 30 $30,856,
December 31 $6,091) 30,888 6,008
Loans receivable, net of allowance for credit losses
September 30 $3,841- December 31 $3,635 136,654 150,460
Premises and equipment at cost, net of accumulated
depreciation 4,165 4,249
Other real estate owned 589 433
Goodwill 490 531
Other assets 4,352 6,518
-------- --------
Total assets $249,214 $246,260
======== ========
Liabilities and Stockholders' Equity
Liabilities:
Deposits $226,669 $221,213
Short-term borrowings 2,071 1,758
Other liabilities 949 2,751
-------- --------
Total liabilities 229,689 225,722
-------- --------
Stockholders' equity:
Common stock, par value $10, authorized
5,000,000 shares; issued and outstanding
September 30 883,700 shares; December 31 727,400
shares 8,837 7,274
Stock dividend to be distributed 0 1,455
Surplus 6,190 5,917
Retained earnings 4,770 5,147
Net unrealized appreciation (depreciation)
on securities available for sale, net of
income taxes (272) 745
-------- --------
Total stockholders' equity 19,525 20,538
-------- --------
Total liabilities and stockholders' equity $249,214 $246,260
======== ========
</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 Nine Months Ended
September 30, September 30,
------------------ -----------------
1996 1995 1996 1995
------ ----- ------ -----
<S> <C> <C> <C> <C>
Interest income on
Loans, including fees $ 3,265 $ 3,727 $ 10,132 $ 10,975
U.S. Treasury and U.S. Government
agency securities 1,052 621 2,535 1,845
State and municipal securities 395 316 1,155 939
Other 76 74 256 169
-------- -------- -------- --------
Total interest income 4,788 4,738 14,078 13,928
-------- -------- -------- --------
Interest expense on
Deposits 1,938 1,860 5,796 5,208
Short-term borrowings 9 14 41 81
-------- -------- -------- --------
Total interest expense 1,947 1,874 5,837 5,289
-------- -------- -------- --------
Net interest income 2,841 2,864 8,241 8,639
Provision for credit losses 375 150 2,825 650
-------- -------- -------- --------
Net interest income after provision
for credit losses 2,466 2,714 5,416 7,989
-------- -------- -------- --------
Other income
Service charges on deposit accounts 290 262 884 784
Other fees and commissions 15 62 158 205
Other non-interest income 80 0 101 82
Gains on investment securities 6 16 95 130
-------- -------- -------- --------
Total other income 391 400 1,238 1,201
-------- -------- -------- --------
Other expenses
Salaries and employee benefits 1,264 1,003 3,592 2,918
Occupancy 324 329 1,003 930
Other expenses 685 471 1,961 1,835
-------- -------- -------- --------
Total other expenses 2,273 1,803 6,556 5,683
-------- -------- -------- --------
Income (loss) before income taxes 584 1,311 98 3,507
Income tax expense (benefit) 135 407 (317) 1,108
-------- -------- -------- --------
Net income (loss) $ 449 $ 904 $ 415 $ 2,399
======== ======== ======== ========
Net income (loss) per share of common stock $ 0.51 $ 1.25 $ 0.47 $ 3.36
======== ======== ======== ========
Weighted-average shares of common stock
outstanding 883,678 723,150 880,326 715,010
======== ======== ======== ========
</TABLE>
3<PAGE>
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GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------
1996 1995
------ -------
<S> <C> <C>
Net cash provided by operating activities $ 3,699 $ 2,914
------- -------
Cash flows from investing activities:
Proceeds from disposals of investment securities 13,135 14,254
Purchases of investment securities (31,595) (21,945)
(Increase) decrease in loans, net 10,981 (1,454)
Purchases of premises and equipment (237) (459)
Proceeds from sales of premises and equipment 0 394
Purchases of other real estate (156) 0
Proceeds from sales of other real estate 0 195
------- -------
Net cash used in investing activities (7,872) (9,015)
------- -------
Cash flows from financing activities:
Increase in deposits, net 5,456 9,339
Increase (decrease) in short-term borrowings 313 (632)
Dividends paid (745) (562)
Issuance of common stock 381 414
-------- -------
Net cash provided by financing activities 5,405 8,559
-------- -------
Increase in cash and cash equivalents 1,232 2,458
Cash and cash equivalents, beginning of year 9,468 9,807
-------- -------
Cash and cash equivalents, end of year $ 10,700 $12,265
======== =======
</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 and nine months ended September 30, 1996 and 1995.
Operating results for the three and nine-month periods ended
September 30, 1996 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1996.
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 $449,000 ($.51 per share) for the
third quarter of 1996 compared to third quarter 1995 consolidated
net income of $904,000 ($1.25 per share). Year to date
consolidated net income for the nine months ending September 30,
1996 was $415,000 ($.47 per share) compared to $2,399,000 ($3.36
per share) for the same period in 1995. The change is primarily
due to a significant increase in the third quarter provision for
credit losses from $150,000 for 1995 to $375,000 for 1996 as well
as increased personnel and legal expenses. The year to date
provision for credit losses for 1996 was $2,825,000, compared to
$650,000 for the period in 1995. The increase resulted from
provisions being made to charge-off delinquent and non-performing
loans.
The consolidated net interest income prior to making
provision for credit losses was $2,841,000 for the third quarter
of 1996 and $2,864,000 for the same period in 1995, a decrease of
$23,000 (0.8%). The net interest margin for the third quarter of
1996 was 4.96% compared to 5.19% for the third quarter of 1995.
Increased expenses of the Company and its subsidiaries in the
third quarter of 1996 also resulted from the continuing costs of
litigation.
Financial Condition
Total deposits as of September 30, 1996 totalled
$226,669,000, an increase of $8,764,000 (4.0%) for the preceding
twelve months and $5,546,000 (2.5%) for the year to date. While
deposits have increased over the past year, 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 September 30, 1996 totalled $21,797,000, an increase of
$753,000 (3.6%) from the end of the third quarter of 1995 and a
decrease of $493,000 (2.2%) for the year to date. Money market
accounts declined $2,458,000 (8.7%) from the end of the third
quarter of 1995 and by $1,827,000 (6.6%) for the year to date to
total $25,775,000 on September 30, 1996. Savings deposits
increased by $1,902,000 (4.1%) from September 30, 1995, to
$48,388,000 at September 30, 1996, the year to date increase was
$1,635,000 (3.5%). Meanwhile, certificates of deposit over
$100,000 totalled $12,586,000 on September 30, 1996, an increase
6<PAGE>
<PAGE>
of $2,343,000 (22.9%) from September 30, 1995 and an increase of
$2,741,000 (27.8%) from year end. Other time deposits (made up
of certificates of deposit less than $100,000 and individual
retirement accounts) totalled $73,299,000 on September 30, 1996,
a $5,502,000 (8.1%) increase from September 30, 1995 and a
$3,815,000 (5.5%) increase from December 31, 1995.
The Bank's cash and cash equivalents (cash due from banks,
interest-bearing deposits in other financial institutions, and
federal funds sold) which, as of September 30, 1996, totalled
$10,700,000, was an increase of $536,000 (5.2%) from the
September 30, 1995 total of $10,164,000 and an increase of
$1,232,000 (13.0%) over the December 31, 1995 total of
$9,468,000. The aggregate market value of investment securities
held by the Bank as of September 30, 1996 was $92,232,000,
compared to $74,684,000 as of December 31, 1995, a $17,548,000
(23.5%) increase, and compared to $71,550,000 as of September 30,
1995, a $20,682,000 (28.9%) increase. The fluctuations in the
investment securities were a result of changes in deposits
combined with declines in loan demand.
The Bank's net loans totalled $154,804,000 at September 30,
1995 and $150,460,000 on December 31, 1995, compared to
$136,654,000 on September 30, 1996. over the one year period
loans declined $18,150,000 (11.7%) and year to date decreased
$13,806,000 (9.2%). The variations are largely due to a decrease
in commercial and industrial loans during the period. Commercial
mortgage loans increased during the period while residential
mortgages decreased slightly and lease financing and installment
loans also decreased. 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.
7<PAGE>
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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 September 30, 1996 no amounts were outstanding under this
line.
Item 3. Quantative and Qualitive Disclosure About Market Risk
Not applicable.
8<PAGE>
<PAGE>
PART II - OTHER INFORMATION
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. No reports on Form 8-K have been
filed during the quarter for which this report is
filed.
9<PAGE>
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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
September 30, 1996 and is qualified in its entirety by reference
to such financial statements.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 10,700
<INT-BEARING-DEPOSITS> 181,845
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 61,376
<INVESTMENTS-CARRYING> 30,888
<INVESTMENTS-MARKET> 30,856
<LOANS> 136,654
<ALLOWANCE> 3,186
<TOTAL-ASSETS> 249,214
<DEPOSITS> 226,669
<SHORT-TERM> 2,071
<LIABILITIES-OTHER> 949
<LONG-TERM> 0
<COMMON> 0
0
8,837
<OTHER-SE> 10,688
<TOTAL-LIABILITIES-AND-EQUITY> 249,214
<INTEREST-LOAN> 10,132
<INTEREST-INVEST> 3,946
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 14,078
<INTEREST-DEPOSIT> 5,796
<INTEREST-EXPENSE> 5,837
<INTEREST-INCOME-NET> 8,241
<LOAN-LOSSES> 2,825
<SECURITIES-GAINS> 95
<EXPENSE-OTHER> 6,556
<INCOME-PRETAX> (317)
<INCOME-PRE-EXTRAORDINARY> 415
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 415
<EPS-PRIMARY> .47
<EPS-DILUTED> .47
<YIELD-ACTUAL> 8.56
<LOANS-NON> 4,199
<LOANS-PAST> 1,898
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,698
<CHARGE-OFFS> 3,503
<RECOVERIES> 166
<ALLOWANCE-CLOSE> 3,186
<ALLOWANCE-DOMESTIC> 3,186
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
