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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, 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)
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(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, 1996 was 876,400.
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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,
1996 1995
------------ -----------
Assets
<S> <C> <C>
Cash and due from banks $ 10,154 $ 9,468
Federal funds sold 7,100 0
Investment securities available for sale,
at fair value 62,636 68,593
Investment securities held to maturity,
at cost (fair value March 31 $5,998,
December 31 $6,091) 6,001 6,008
Loans receivable, net of allowance for credit losses
March 31 $3,841- December 31 $3,635 149,568 150,460
Premises and equipment at cost, net of accumulated
depreciation 4,177 4,249
Other real estate owned 433 433
Goodwill 517 531
Other assets 4,938 6,518
-------- --------
Total assets $246,524 $246,260
======== ========
Liabilities and Stockholders' Equity
Liabilities:
Deposits $224,150 $221,213
Short-term borrowings 954 1,758
Other liabilities 1,109 2,751
-------- --------
Total liabilities 226,213 225,722
-------- --------
Stockholders' equity:
Common stock, par value $10, authorized
5,000,000 shares; issued and outstanding
March 31 876,400 shares; December 31 727,400
shares 8,764 7,274
Stock dividend to be distributed 0 1,455
Surplus 6,020 5,917
Retained earnings 5,519 5,147
Net unrealized appreciation (depreciation)
on securities available for sale, net of
income taxes 8 745
-------- --------
Total stockholders' equity 20,311 20,538
-------- --------
Total liabilities and stockholders' equity $246,524 $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
March 31,
-----------------
1996 1995
------ -------
<S> <C> <C>
Interest income on
Loans, including fees $ 3,712 $ 3,563
U.S. Treasury and U.S. Government agency
securities 685 624
State and municipal securities 377 304
Other 50 41
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Total interest income 4,824 4,532
-------- --------
Interest expense on
Deposits 1,948 1,617
Short-term borrowings 25 30
-------- --------
Total interest expense 1,973 1,647
-------- --------
Net interest income 2,851 2,885
Provision for credit losses 375 275
-------- --------
Net interest income after provision for
credit losses 2,476 2,610
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Other income
Service charges on deposit accounts 286 259
Other fees and commissions 71 79
Other non-interest income 11 12
Gains on investment securities 87 8
-------- --------
Total other income 455 358
-------- --------
Other expenses
Salaries and employee benefits 1,133 941
Occupancy 346 292
Other expenses 596 693
-------- --------
Total other expenses 2,075 1,926
-------- --------
Income (loss) before income taxes 856 1,042
Income tax expense 219 334
-------- --------
Net income (loss) $ 637 $ 708
======== ========
Net income (loss) per share of common stock $ 0.73 $ 0.99
======== ========
Weighted-average shares of common stock outstanding 876,492 711,558
======== ========
</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,
-----------------
1996 1995
------ -------
<S> <C> <C>
Net cash provided (used) by operating activities $ (35) $ 703
------- -------
Cash flows from investing activities:
Proceeds from disposals of investment securities 9,102 3,688
Purchases of investment securities (3,789) (2,621)
Decrease in loans, net 517 1,223
Purchases of premises and equipment (62) (54)
Proceeds from sales of premises and equipment 0 385
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Net cash provided by investing activities 5,768 2,621
------- -------
Cash flows from financing activities:
Increase (decrease) in deposits, net 2,937 (2,040)
Decrease in short-term borrowings (804) (1,489)
Dividends paid (218) (170)
Issuance of common stock 138 143
------- -------
Net cash provided (used) by financing activities 2,053 (3,556)
------- -------
Increase (decrease) in cash and cash equivalents 7,786 (232)
Cash and cash equivalents, beginning of year 9,468 9,807
------- -------
Cash and cash equivalents, end of year $17,254 $ 9,575
======= =======
</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, 1996 and 1995.
Operating results for the three-month period ended March 31,
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 $635,000 ($.72 per share) for the
first quarter of 1996 compared to first quarter 1995 consolidated
net income of $708,000 ($.99 per share). The change is primarily
due to a significant increase in the first quarter provision for
credit losses from $275,000 for 1995 to $375,000 for 1996. 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 $2,851,000 for the first quarter
of 1996 and $2,885,000 for the same period in 1995, a decrease of
$34,000 (1.2%). The net interest margin for the first quarter of
1996 was 5.10% compared to 5.37% for the first quarter of 1995.
Increased expenses of the Company and its subsidiaries in
the first quarter of 1996 also resulted from the continuing costs
of litigation.
Financial Condition
Total deposits as of March 31, 1996 totalled $224,150,000,
an increase of $17,624,000 (8.5%) for the preceding twelve months
and $2,937,000 (1.3%) for the quarter. 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
March 31, 1996 totalled $23,102,000, an increase of $2,147,000
(10.3%) from the end of the first quarter of 1995 and $812,000
(3.6%) from December 31, 1995. Money market accounts declined
$1,985,000 (6.8%) from the end of the first quarter of 1995 and
by $358,000 (1.3%) from December 31, 1995 to total $27,244,000 on
March 31, 1996. Savings deposits increased 2.7% from $47,416,000
at March 31, 1995 to $48,685,000 at March 31, 1996; the first
quarter increase was $1,932,000 (4.1%). Meanwhile, certificates
of deposit over $100,000 totalled $7,342,000 on March 31, 1996, a
decrease of $1,278,000 (14.8%) for the first quarter but an
increase of $868,000 (13.4%) from March 31, 1995. Other time
deposits (made up of certificates of deposit less than $100,000
and individual retirement accounts) totalled $73,928,000 on
March 31, 1996, a $15,944,000 (27.5%) increase from March 31,
1995 and a $4,444,000 (6.4%) increase from December 31, 1995.
6<PAGE>
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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 March 31, 1996, totalled
$17,254,000, was an increase of $9,411,000 (120.0%) from the
March 31, 1995 total of $7,843,000 and an increase of $7,786,000
(82.2%) over the December 31, 1995 total of $9,468,000. The
aggregate market value of investment securities held by the Bank
as of March 31, 1996 was $68,634,000, compared to $61,425,000 as
of March 31, 1995, a $7,209,000 (11.7%) increase and to
$74,684,000 as of December 31, 1995, a $6,050,000 (8.1%)
decrease. The fluctuations in investment securities were a
result of changes in deposits combined with declines in loan
demand.
The Bank's net loans totalled $152,636,000 at March 31, 1995
and $150,460,000 on December 31, 1995, compared to $149,568,000
on March 31, 1996. Over the one year period loans declined
$3,068,000 (2.0%) and for the quarter decreased $892,000 (0.6%).
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 financings and installment loans increased
slightly. 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
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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, 1996 no amounts were outstanding under this line.
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 1996 annual meeting was held on March 14,
1996. At the meeting directors were elected to serve a one year
term. The following persons ran without opposition and were
elected by voice vote:
Shirley E. Boyer
Thomas Clocker
John E. Demyan
Susan Demyan
Richard Fine
F. William Kuethe Jr.
Frederick W. Kuethe, III
William N. Scherer, Sr.
Matthew Shimoda
Karen Thorwarth
Randall Williams, Jr.
By unopposed voice vote the Company's stockholders
authorized the Board of Directors to select an outside auditing
firm for the 1996 fiscal year.
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 March
31, 1996 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-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 10,154
<INT-BEARING-DEPOSITS> 180,540
<FED-FUNDS-SOLD> 7,100
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 62,636
<INVESTMENTS-CARRYING> 6,001
<INVESTMENTS-MARKET> 5,998
<LOANS> 149,568
<ALLOWANCE> 3,841
<TOTAL-ASSETS> 246,524
<DEPOSITS> 224,150
<SHORT-TERM> 954
<LIABILITIES-OTHER> 1,109
<LONG-TERM> 0
<COMMON> 0
0
8,764
<OTHER-SE> 11,547
<TOTAL-LIABILITIES-AND-EQUITY> 246,524
<INTEREST-LOAN> 3,710
<INTEREST-INVEST> 1,112
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 4,822
<INTEREST-DEPOSIT> 1,948
<INTEREST-EXPENSE> 1,973
<INTEREST-INCOME-NET> 2,849
<LOAN-LOSSES> 375
<SECURITIES-GAINS> 87
<EXPENSE-OTHER> 4,075
<INCOME-PRETAX> 854
<INCOME-PRE-EXTRAORDINARY> 635
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 635
<EPS-PRIMARY> .72
<EPS-DILUTED> .72
<YIELD-ACTUAL> 8.87
<LOANS-NON> 2,488
<LOANS-PAST> 4,983
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,698
<CHARGE-OFFS> 329
<RECOVERIES> 97
<ALLOWANCE-CLOSE> 3,841
<ALLOWANCE-DOMESTIC> 3,841
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
