<PAGE>
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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 June 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 June 30, 1996 was 880,800.
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GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
(Unaudited)
June 30, December 31,
1996 1995
------------ -----------
Assets
<S> <C> <C>
Cash and due from banks $ 9,967 $ 9,468
Federal funds sold 3,675 0
Investment securities available for sale,
at fair value 61,979 68,593
Investment securities held to maturity,
at cost (fair value June 30 $23,347,
December 31 $6,091) 23,628 6,008
Loans receivable, net of allowance for credit losses
June 30 $2,882- December 31 $3,635 140,199 150,460
Premises and equipment at cost, net of accumulated
depreciation 4,182 4,249
Other real estate owned 589 433
Goodwill 504 531
Other assets 4,207 6,518
-------- --------
Total assets $248,930 $246,260
======== ========
Liabilities and Stockholders' Equity
Liabilities:
Deposits $228,588 $221,213
Short-term borrowings 1,111 1,758
Other liabilities 462 2,751
-------- --------
Total liabilities 230,161 225,722
-------- --------
Stockholders' equity:
Common stock, par value $10, authorized
5,000,000 shares; issued and outstanding
June 30 880,800 shares; December 31 727,400
shares 8,808 7,274
Stock dividend to be distributed 0 1,455
Surplus 6,123 5,917
Retained earnings 4,586 5,147
Net unrealized appreciation (depreciation)
on securities available for sale, net of
income taxes (748) 745
-------- --------
Total stockholders' equity 18,769 20,538
-------- --------
Total liabilities and stockholders' equity $248,930 $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 Six Months Ended
June 30, June 30,
------------------ -----------------
1996 1995 1996 1995
------ ----- ------ -----
<S> <C> <C> <C> <C>
Interest income on
Loans, including fees $ 3,155 $ 3,685 $ 6,867 $ 7,248
U.S. Treasury and U.S. Government
agency securities 798 600 1,483 1,224
State and municipal securities 383 319 760 623
Other 130 54 180 95
-------- -------- -------- --------
Total interest income 4,466 4,658 9,290 9,190
-------- -------- -------- --------
Interest expense on
Deposits 1,910 1,731 3,858 3,348
Short-term borrowings 7 37 32 67
-------- -------- -------- --------
Total interest expense 1,917 1,768 3,890 3,415
-------- -------- -------- --------
Net interest income 2,549 2,890 5,400 5,775
Provision for credit losses 2,075 225 2,450 500
-------- -------- -------- --------
Net interest income after provision
for credit losses 474 2,665 2,950 5,275
-------- -------- -------- --------
Other income
Service charges on deposit accounts 308 263 594 522
Other fees and commissions 72 64 143 143
Other non-interest income 10 10 21 22
Gains on investment securities 2 106 89 114
-------- -------- -------- --------
Total other income 392 443 847 801
-------- -------- -------- --------
Other expenses
Salaries and employee benefits 1,195 974 2,328 1,915
Occupancy 333 309 679 601
Other expenses 680 671 1,276 1,364
-------- -------- -------- --------
Total other expenses 2,208 1,954 4,283 3,880
-------- -------- -------- --------
Income (loss) before income taxes (1,342) 1,154 (486) 2,196
Income tax expense (benefit) (671) 367 (452) 701
-------- -------- -------- --------
Net income (loss) $ (671) $ 787 $ (34) $ 1,495
======== ======== ======== ========
Net income (loss) per share of common stock ($0.76) $1.10 ($0.04) $2.10
======== ======== ======== ========
Weighted-average shares of common stock
outstanding 880,816 714,643 878,621 713,110
======== ======== ======== ========
</TABLE>
3<PAGE>
<PAGE>
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------
1996 1995
------ -------
<S> <C> <C>
Net cash provided by operating activities $ 3,084 $ 2,204
-------- --------
Cash flows from investing activities:
Proceeds from disposals of investment securities 12,715 9,566
Purchases of investment securities (25,642) (6,137)
Decrease in loans, net 7,811 1,130
Purchases of premises and equipment (170) (215)
Proceeds from sales of premises and equipment 0 385
Purchases of other real estate (156) 0
Proceeds from sales of other real estate 0 195
-------- --------
Net cash provided (used) by investing activities (5,442) 4,924
-------- --------
Cash flows from financing activities:
Increase (decrease) in deposits, net 7,375 (523)
Decrease in short-term borrowings (647) (1,149)
Dividends paid (481) (348)
Issuance of common stock 285 242
-------- --------
Net cash provided (used) by financing activities 6,532 (1,778)
-------- --------
Increase in cash and cash equivalents 4,174 5,350
Cash and cash equivalents, beginning of year 9,468 9,807
-------- --------
Cash and cash equivalents, end of year $ 13,642 $ 15,157
======== ========
</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 six months ended June 30, 1996 and 1995.
Operating results for the three and six-month periods ended
June 30, 1996 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1996.
5<PAGE>
<PAGE>
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 loss of $(671,000) ($(.76) per share) for the
second quarter of 1996 compared to second quarter 1995
consolidated net income of $787,000 ($1.10 per share). Year to
date consolidated net loss for the six months ending June 30,
1996 was $(34,000) ($(.04) per share) compared to net income of
$1,495,000 ($2.10 per share) for the same period in 1995. The
change is primarily due to a significant increase in the second
quarter provision for credit losses from $225,000 for 1995 to
$2,075,000 for 1996. The year to date provision for credit
losses for 1996 was $2,450,000 compared to $500,000 for the same
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
provisions for credit losses was $2,549,000 for the second
quarter of 1996 and $2,890,000 for the same period in 1995, a
decrease of $341,000 (11.7%). The net interest margin for the
second quarter of 1996 was 4.49% compared to 5.37% for the second
quarter of 1995. The decrease in the net interest margin for the
second quarter of 1996 was primarily due to the loss of income
that had accrued on loans charged off during the quarter.
Increased expenses of the Company and its subsidiaries in the
second quarter of 1996 also resulted from the continuing costs of
litigation.
Financial Condition
Total deposits as of June 30, 1996 totalled $228,588,000, an
increase of $20,545,000 (9.9%) for the preceding twelve months
and $7,375,000 (3.3%) 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
June 30, 1996 totalled $22,186,000, an increase of $1,205,000
(5.7%) from the end of the second quarter of 1995 and a decrease
of $104,000 (0.5%) for the year to date. Money market accounts
declined $1,270,000 (4.5%) from the end of the second quarter of
1995 and by $522,000 (1.9%) for the year to date to total
$27,080,000 on June 30, 1996. Savings deposits increased by
$3,129,000 (6.7% from June 30, 1995 to $49,706,000 at June 30,
1996; the year to date increase was $2,953,000 (6.3%).
Meanwhile, certificates of deposit over $100,000 totalled
6<PAGE>
<PAGE>
$12,465,000 on June 30, 1996, an increase of $3,448,000 (38.2%)
from June 30, 1995 and an increase of $2,620,000 (26.6%) from
year end. Other time deposits (made up of certificates of
deposit less than $100,000 and individual retirement accounts)
totalled $71,189,000 on June 30, 1996, a $9,878,000 (16.1%)
increase from June 30, 1995 and a $1,705,000 (2.55) 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 June 30, 1996, totalled
$13,642,000, was an increase of $334,000 (2.5%) from the June 30,
1995 total of $13,308,000 and an increase of $4,174,000 (44.1%)
over the December 31, 1995 total of $9,468,000. The aggregate
market value of investment securities held by the Bank as of
June 30, 1996 was $85,326,000 compared to $74,684,000 as of
December 31, 1995, a $10,642,000 (14.3%) increase, and to
$60,122,000 as of June 30, 1995, a $25,204,000 (41.9%) 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 $152,370,000 at June 30, 1995
and $150,460,000 on December 31, 1995, compared to $140,199,000
on June 30, 1996. Over the one year period loans declined
$12,171,000 (8.0%) and year to date decreased $10,261,000 (6.8%).
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>
<PAGE>
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 June 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>
<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 six months ending
June 30, 1996 and is qualified in its entirety by reference to
such financial statements.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 9,967
<INT-BEARING-DEPOSITS> 182,626
<FED-FUNDS-SOLD> 3,675
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 61,979
<INVESTMENTS-CARRYING> 23,628
<INVESTMENTS-MARKET> 23,347
<LOANS> 140,199
<ALLOWANCE> 2,882
<TOTAL-ASSETS> 248,930
<DEPOSITS> 228,588
<SHORT-TERM> 1,111
<LIABILITIES-OTHER> 462
<LONG-TERM> 0
<COMMON> 0
0
8,808
<OTHER-SE> 9,961
<TOTAL-LIABILITIES-AND-EQUITY> 248,930
<INTEREST-LOAN> 6,867
<INTEREST-INVEST> 2,423
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 9,290
<INTEREST-DEPOSIT> 3,858
<INTEREST-EXPENSE> 3,890
<INTEREST-INCOME-NET> 5,400
<LOAN-LOSSES> 2,450
<SECURITIES-GAINS> 89
<EXPENSE-OTHER> 4,283
<INCOME-PRETAX> (486)
<INCOME-PRE-EXTRAORDINARY> (34)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (34)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
<YIELD-ACTUAL> 8.47
<LOANS-NON> 1,244
<LOANS-PAST> 5,788
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,698
<CHARGE-OFFS> 3,405
<RECOVERIES> 139
<ALLOWANCE-CLOSE> 2,882
<ALLOWANCE-DOMESTIC> 2,882
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
