<PAGE>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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, 1998
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 0-24047
--------
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
---------------------------------------------------------
(Registrant's telephone number, including area code)
Not applicable
--------------------------------------------------------
(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 [X] No [ ]
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, 1998 was 1,094,319.
<PAGE>
<PAGE>
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
------------ -----------
<S> <C> <C>
ASSETS
Cash and due from banks. . . . . . . . . . . . . . $ 10,144 $ 9,687
Federal funds sold . . . . . . . . . . . . . . . . 7,273 18,850
Investment securities available for sale,
at fair value. . . . . . . . . . . . . . . . . . 41,441 40,679
Investment securities held to maturity,
at cost (fair value March 31: $41,717;
December 31: $41,566) . . . . . . . . . . . . . 41,286 41,179
Loans receivable, net of allowance for
credit losses March 31: $3,888;
December 31: $4,139. . . . . . . . . . . . . . . 109,563 111,545
Premises and equipment at cost, net of
accumulated depreciation . . . . . . . . . . . . 4,477 4,319
Other real estate owned. . . . . . . . . . . . . . 748 749
Goodwill . . . . . . . . . . . . . . . . . . . . . 408 422
Other assets . . . . . . . . . . . . . . . . . . . 5,001 4,493
-------- --------
Total assets . . . . . . . . . . . . . $220,341 $231,900
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits . . . . . . . . . . . . . . . . . . . . . $198,363 $207,110
Short-term borrowings. . . . . . . . . . . . . . . 557 890
Other liabilities. . . . . . . . . . . . . . . . . 2,456 4,935
-------- --------
Total liabilities. . . . . . . . . . . . $201,376 $212,935
-------- --------
STOCKHOLDERS' EQUITY:
Common stock, par value $10, authorized 5,000,000
shares; issued and outstanding: March 31:
1,094,319 shares; December 31: 1,092,768
shares. . . . . . . . . . . . . . . . . . . . . 10,943 10,928
Surplus. . . . . . . . . . . . . . . . . . . . . . 6,575 6,575
Retained earnings. . . . . . . . . . . . . . . . . 1,151 1,237
Accumulated other comprehensive income . . . . . . 296 225
-------- --------
Total stockholders' equity. . . . . . . 18,965 18,965
-------- --------
Total liabilities and stockholders'
equity. . . . . . . . . . . . . . . . $220,341 $231,900
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
2<PAGE>
<PAGE>
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,
-------------------------
1998 1997
-------- --------
<S> <C> <C>
Interest income on
Loans, including fees . . . . . . . . . . . . . $ 2,575 $ 2,860
U.S. Treasury and U.S. Government
agency securities . . . . . . . . . . . . . . 1,155 1,278
State and municipal securities. . . . . . . . . 112 346
Other . . . . . . . . . . . . . . . . . . . . . 154 104
---------- ----------
Total interest income. . . . . . . . . . . . . 3,996 4,588
---------- ----------
Interest expense on
Deposits. . . . . . . . . . . . . . . . . . . . 1,532 1,826
Short-term borrowings . . . . . . . . . . . . . 8 10
---------- ----------
Total interest expense. . . . . . . . . . . 1,540 1,836
---------- ----------
Net interest income. . . . . . . . . . . 2,456 2,752
Provision for credit losses. . . . . . . . . . . . 0 270
---------- ----------
Net interest income after provision
for credit losses. . . . . . . . . . . 2,456 2,482
---------- ----------
Other income
Service charges on deposit accounts . . . . . . 288 266
Other fees and commissions. . . . . . . . . . . 51 55
Other non-interest income . . . . . . . . . . . 1,144 29
Gains on investment securities. . . . . . . . . 32 3
---------- ----------
Total other income. . . . . . . . . . . . . 1,515 353
---------- ----------
Other expenses
Salaries and employee benefits. . . . . . . . . 1,283 1,235
Occupancy . . . . . . . . . . . . . . . . . . . 327 323
Other expenses. . . . . . . . . . . . . . . . . 2,447 912
---------- ----------
Total other expenses. . . . . . . . . . . . 4,057 2,470
---------- ----------
Income before income taxes . . . . . . . . . . . . (86) 365
Income tax expense (benefit) . . . . . . . . . . . (89) (10)
---------- ----------
Net income . . . . . . . . . . . . . . . . . . . . $ 3 $ 375
========== ==========
Basic earnings (loss) per share of common stock. . $ 0.0027 $ 0.34
========== ==========
Weighted-average shares of common stock
outstanding. . . . . . . . . . . . . . . . . . . 1,093,111 1,092,768
========== ==========
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
3<PAGE>
<PAGE>
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
1998 1997
-------- --------
<S> <C> <C>
Net income . . . . . . . . . . . . . . . . . . . . $ 3 $ 375
Other comprehensive income (expense),
net of tax
Unrealized gains (losses) on available-for-sale
investment securities . . . . . . . . . . . . 116 (275)
Less applicable income taxes (benefits) . . . 45 (106)
------ -------
71 (169)
------ -------
Comprehensive income . . . . . . . . . . . . . . . $ 74 $ 206
====== =======
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
4<PAGE>
<PAGE>
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . $ 3 $ 375
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization, and accretion . . . . 139 214
Provision for credit losses . . . . . . . . . . . 0 270
Changes in assets and liabilities:
(Increase) decrease in other assets. . . . . . (575) (594)
Decrease in other liabilities. . . . . . . . . (2,472) (1,604)
-------- --------
Net cash used by operating activities. . . . . . . . $ (2,905) $ (1,339)
-------- --------
Cash flows from investing activities:
Proceeds from disposals of investment
securities . . . . . . . . . . . . . . . . . . 9,807 3,582
Purchases of investment securities . . . . . . . (10,529) (9,830)
Decrease in loans, net . . . . . . . . . . . . . 1,982 4,776
Purchases of premises and equipment. . . . . . . (314) (208)
Purchases of other real estate . . . . . . . . . 0 (20)
Proceeds from sales of premises and
equipment. . . . . . . . . . . . . . . . . . . 0 5
-------- --------
Net cash provided (used) by investing activities . . 946 (1,695)
-------- --------
Cash flows from financing activities:
Increase (decrease) in deposits, net . . . . . . (8,747) (8,167)
Increase (decrease) in short-term borrowings . . (333) 2,368
Dividends paid . . . . . . . . . . . . . . . . . (81) (44)
-------- --------
Net cash provided (used) by financing activities . . (9,161) (5,843)
-------- --------
Increase (decrease) in cash and cash equivalents . . (11,120) (8,877)
Cash and cash equivalents, beginning of year . . . . 28,537 22,678
-------- --------
Cash and cash equivalents, end of period . . . . . . $ 17,417 $ 13,801
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
5<PAGE>
<PAGE>
GLEN BURNIE BANCORP AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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, 1998 and 1997.
Operating results for the three-month period ended March
31, 1998 are not necessarily indicative of the results that may
be expected for the year ending December 31, 1998.
NOTE 2 - EARNINGS PER SHARE
------------------
Information for net income per share and weighted average
shares outstanding for prior periods have been restated to
reflect 1% stock dividends declared in June, September and
December 1997 and a 20% stock dividend paid in January 1998.
NOTE 3 - ADOPTION OF NEW FINANCIAL ACCOUNTING STANDARDS
----------------------------------------------
On January 1, 1998 the Company adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" ("SFAS No. 130"). SFAS No. 130 establishes standards
for reporting and displaying comprehensive income and its
components (revenues, expense, gains and losses) in a full set
of general-purpose financial statements. This Statement
requires that an enterprise (a) classify items of other
comprehensive income by their nature in the financial statement
and (b) display the accumulated balance of other comprehensive
income separately from retained earnings and additional
paid-in-capital in the equity section of a statement of
financial position. In accordance with the provisions of SFAS
No. 130, comparative financial statements presented for earlier
periods have been reclassified to reflect the provisions of the
statement.
6<PAGE>
<PAGE>
ITEM 2. 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 consolidated net income of $3,000 ($0.0027 basic earnings
per share) for the first quarter of 1998 compared to first
quarter 1997 consolidated net income of $375,000 ($0.34 basic
earnings per share). The decrease in first quarter consolidated
net income was primarily attributable to additional reserves for
litigation and legal and other expenses related to a proxy
contest at the 1998 Annual Meeting of Stockholders which was
held in March 1998.
NET INTEREST INCOME. The Company's consolidated net
interest income prior to provisions for credit losses was
$2,456,000 for the first quarter of 1998 compared to $2,752,000
for the same period in 1997, a decrease of $296,000, or 10.8%.
The decrease in net interest income for the three month period
was primarily attributable to a decline in interest income
which offset a smaller decrease in interest expense. Interest
income declined $592,000 (12.9%) for the three months ended
March 31, 1998, compared to the same period in 1997. The
decline in interest income was attributable principally to a
decline in earning assets. Interest expense declined $296,000
(16.1%) for the three-month period ended March 31, 1998,
compared to the same period in 1997. The tax-equivalent net
interest margin for the three months ended March 31, 1998 was
4.98%, compared to 4.95% for the three months ended March 31,
1997. The increase in net interest margin for the three months
ended March 31, 1998 was primarily due to an increase in the
ratio of interest-earning assets to interest-bearing liabilities
as a result of the run-off of interest-bearing deposits during
the quarter. This has had the effect of increasing the
proportion of funding from non-interest bearing demand accounts.
PROVISION FOR CREDIT LOSSES. During the three months
ended March 31, 1998, the Company made no provision for credit
losses, compared to $270,000 in provisions during the three
months ended March 31, 1997. The decrease in provision
reflects lower charge-off activity and a reduction in classified
loans during the 1998 period. During the three months ended
March 31, 1998, the Company recorded net charge-offs of
$251,000, compared to $1,046,000 in net charge-offs during the
three months ended March 31, 1997.
OTHER INCOME. Other income increased $1,162,000 (329.2%)
during the three months ended March 31, 1998 compared to the
same period in 1997. The increase in other income reflects
income attributable to an insurance settlement with the
Company's fidelity bond insurer during the first quarter of
1998.
OTHER EXPENSE. Other expense increased by $1,587,000, or
64.3%, for the quarter compared to the same quarter in 1997,
primarily due to management's determination to establish
additional reserves for litigation. In addition, the Company
experienced a significant increase in legal and professional
fees in connection with a proxy contest at the 1998 Annual
Meeting of Stockholders.
INCOME TAXES. During the three months ended March 31,
1998, the Company recorded an income tax benefit of $89,000,
compared to a tax benefit of $10,000, during the three months
ended March 31, 1997. Due primarily to its holdings of tax-
exempt state, county and municipal securities, the Company
recorded tax losses during the three months ended March 31, 1998
and 1997. These net operating losses were applied to prior
years' earnings resulting in tax benefits in each of the
periods. The Company has recently reduced its holdings of tax-
exempt state, county and municipal securities and reinvested the
proceeds in U.S. Government agency securities, the income on
which is not exempt from federal taxation. Accordingly, the
Company anticipates an increase in taxable income which may
reduce the availability of future tax benefits.
FINANCIAL CONDITION
The Company's assets declined to $220,341,000 at March 31,
1998 from $231,900,000 at December 31, 1997 primarily due to a
decline in the balance of federal funds sold. The Company also
continued to experience loan portfolio run-off. The Bank's net
loans totaled $109,563,000 at March 31, 1998, compared to
$111,545,000 on December 31, 1997, a decrease of $1,982,000
(1.8%). The Bank experienced its most significant declines in
the commercial loan and
7<PAGE>
<PAGE>
commercial and residential mortgage portfolios which declined by
approximately $1.0 million, $1.0 million and $1.8 million,
respectively, during the quarter. The Bank attributes these
declines to refinancing of residential mortgages at other
lenders and increased competition for the small business
customer which is the Bank's primary market. These declines
were partially offset by the Bank's indirect lending program
which was begun in January and has grown to a portfolio of over
$3.0 million at March 31, 1998.
The Company's total investment securities portfolio
(including both investment securities available for sale and
investment securities held to maturity) totaled $82,727,000 at
March 31, 1998, a $869,000 or 1.1%, increase from $81,858,000 at
December 31, 1997. The aggregate market value of investment
securities held by the Bank as of March 31, 1998 was $83,158,000
compared to $82,245,000 as of December 31, 1997, a $913,000
(1.1%) decrease.
Deposits as of March 31, 1998 totaled $198,363,000, a
decrease of $8,747,000 (4.2%) for the year to date. Demand
deposits as of March 31, 1998 totaled $43,387,000 which is a
decrease of $4,264,000 (8.9%) from $47,651,000 at December 31,
1997. NOW accounts as of March 31, 1998 totaled $20,723,000
which is an increase of $141,000 (0.7%) from $20,582,000 at
December 31, 1997. Money market accounts rose by $787,000 (4%)
for the year to date to total $19,090,000 on March 31, 1998.
Savings deposits decreased by $1,086,000 or 2.5%, year to date.
Meanwhile, certificates of deposit over $100,000 totaled
$9,658,000 on March 31, 1998, an increase of $2,194,000 (29.4%)
from December 31, 1997. Other time deposits (made up of
certificates of deposit less than $100,000 and individual
retirement accounts) totaled $63,240,000 on March 31, 1998, a
$5,234,000 (7.6%) increase from December 31, 1997.
ASSET QUALITY. The following table sets forth the amount
of the Bank's restructured loans, non-accrual loans and
accruing loans 90 days or more past due at the dates indicated.
<TABLE>
<CAPTION>
AT AT
MARCH 31, DECEMBER 31,
1998 1997
------------ ------------
(Dollars in thousands)
<S> <C> <C>
Restructured Loans . . . . . . . . . . . $ -- $ 344
Non-accrual Loans:
Real estate -- mortgage:
Residential . . . . . . . . . . . . $1,019 $1,078
Commercial. . . . . . . . . . . . . 756 761
Real estate -- construction . . . . . 474 608
Installment . . . . . . . . . . . . . 465 665
Credit card & related . . . . . . . . -- --
Commercial. . . . . . . . . . . . . . 344 369
------ ------
Total nonaccrual loans. . . . . . 3,058 3,481
Accruing Loans Past Due 90 Days or More:
Real estate -- mortgage:
Residential . . . . . . . . . . . . 14 5
Commercial. . . . . . . . . . . . . -- --
Real estate -- construction . . . . . -- --
Installment . . . . . . . . . . . . . -- --
Credit card & related . . . . . . . . -- --
Commercial. . . . . . . . . . . . . . -- --
------ ------
Total accruing loans past
due 90 days or more. . . . . . . 14 5
------ ------
Total non-accrual and past
due loans. . . . . . . . . . . . $3,072 $3,486
====== ======
Non-accrual and past due loans to
gross loans. . . . . . . . . . . . . . 2.71% 3.01%
====== ======
Allowance for credit losses to non-
accrual and past due loans . . . . . . 126.57% 118.73%
====== ======
</TABLE>
8<PAGE>
<PAGE>
At March 31, 1998, there were $765,715 in loans
outstanding not reflected in the above table as to which known
information about possible credit problems of borrowers caused
management to have serious doubts as to the ability of such
borrowers to comply with present loan repayment terms. Such
loans consist of loans which were not 90 days or more past due
but where the borrower is in bankruptcy or has a history of
delinquency or the loan to value ratio is considered excessive
due to deterioration of the collateral or other factors.
ALLOWANCE FOR CREDIT LOSSES. The allowance for credit
losses is established through a provision for credit losses
charged to expense. Loans are charged against the allowance for
credit losses when management believes that the collectibility
of the principal is unlikely. The allowance, based on
evaluations of the collectibility of loans and prior loan loss
experience, is an amount that management believes will be
adequate to absorb possible losses on existing loans that may
become uncollectible. The evaluations take into consideration
such factors as changes in the nature and volume of the loan
portfolio, overall portfolio quality, review of specific problem
loans, and current economic conditions and trends that may
affect the borrowers' ability to pay.
Transactions in the allowance for credit losses for the
three months ended March 31, 1998 and 1997 were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------
1998 1997
-------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Beginning balance. . . . . . . . . . . . . . $ 4,139 $ 5,061
-------- --------
Charge-offs. . . . . . . . . . . . . . . . . (325) (1,093)
Recoveries . . . . . . . . . . . . . . . . . 74 47
-------- --------
Net charge-offs. . . . . . . . . . . . . . . (251) (1,046)
Provisions charged to operations . . . . . . 0 270
-------- --------
Ending balance . . . . . . . . . . . . . . . $ 3,888 $ 4,285
======== ========
Average loans. . . . . . . . . . . . . . . . $115,743 $127,951
Net charge-offs to average loans . . . . . . 0.22% 0.82%
</TABLE>
Net charge-offs during the three months ended March 31,
1998 declined to $251,000 from $1,046,000 during the comparable
period in 1997. The Company attributes the reduction in
charge-off activity to improvements in asset quality.
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's cash and
cash equivalents (cash due
9<PAGE>
<PAGE>
from banks, interest-bearing deposits in other financial
institutions, and federal funds sold), as of March 31, 1998,
totaled $17,417,000, a decrease of $11,120,000 (39.0%) from the
December 31, 1997 total of $28,537,000.
The Bank may draw on a $22,634,000 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, 1998, however, no amounts were outstanding under
this line. The Bank also has a secured $5.0 million of credit
from another commercial bank on which no amounts were
outstanding on March 31, 1998.
The Company's stockholders' equity remained constant at
$18,965,000 as dividends accrued offset increases in the equity
account attributable to earnings and an increase in net
unrealized appreciation on securities available for sale. Net
unrealized appreciation on securities available for sale
increased $71,000 to $296,000 at March 31, 1998 from $225,000 at
December 31, 1997 as a declining rate environment increased the
market value of the available for sale portfolio. Retained
earnings, however, declined by $86,000 as the result of the
accrual of $74,000 for cash dividends to be paid after the end
of the quarter. Included in the accrual was $15,000 transferred
to stockholders' equity in consideration for shares to be issued
under the Company's dividend reinvestment plan in lieu of cash
dividends.
The Federal Reserve Board and the FDIC have established
guidelines with respect to the maintenance of appropriate levels
of capital by bank holding companies and state non-member banks,
respectively. The regulations impose two sets of capital
adequacy requirements: minimum leverage rules, which require
bank holding companies and banks to maintain a specified minimum
ratio of capital to total assets, and risk-based capital rules,
which require the maintenance of specified minimum ratios of
capital to "risk-weighted" assets. At March 31, 1998, the Bank
was in full compliance with these guidelines with a Tier 1
leverage ratio of 8.09%, a Tier 1 risk-based capital ratio of
14.87% and a total risk-based capital ratio of 16.14%.
YEAR 2000 PLANNING
As the year 2000 approaches, an important business issue has
emerged regarding how existing application software programs and
operating systems can accommodate this date value. For many
years, software applications routinely conserved magnetic
storage space by using only two digits to record calendar years;
for example, the year 1999 is stored as "99". On January 1,
2000, the calendars in many software applications will change
from "99" to "00". Many of these software applications, in
their current form, will produce erroneous results or will fail
to run at all since their logic cannot deal with this
transaction.
The Company's mainframe computer hardware and systems
software are Year 2000 compliant. The Company primarily
utilizes third-party vendor application software for all
computer applications. The third-party vendors for the
Company's banking applications are in the process of modifying,
upgrading or replacing their computer applications to insure
Year 2000 compliance. In addition, the Company has instituted a
Year 2000 compliance program whereby the Company is reviewing
the Year 2000 compliance issues that may be faced by its
third-party vendors. Under such program, the Company will
examine the need for modifications or replacement of all
non-Year 2000 compliant pieces of software. The Company does
not currently expect that the cost of its Year 2000 compliance
program will be material to its financial conditions and
believes that it will satisfy such compliance program by the end
of 1998 without material disruption of its operations. In the
event that the Company's significant suppliers do not
successfully and timely achieve Year 2000 compliance, the
Company's business of operations could be adversely affected.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK
Not applicable.
10<PAGE>
<PAGE>
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On February 13, 1998 the Board of Directors declared a
dividend distribution of one Right for each outstanding share of
Common Stock to stockholders of record at the close of business
on February 13, 1998. Each Right entitles a registered
stockholder to purchase from the Company one share of Common
Stock on the date of exercise, at a Purchase Price of $100.00,
subject to adjustment. The Rights are not exercisable until the
"Distribution Date" and will expire at the close of business on
February 13, 2008, unless earlier redeemed. The "Distribution
Date" will occur upon the earlier of (i) 10 days following a
public announcement that a person other than an Exempt Person or
group of affiliated or associated persons (an "Acquiring
Person") has acquired, or obtained the right to acquire,
beneficial ownership of 10% of more of the outstanding shares of
Common Stock or (ii) 10 business days following the commencement
of a tender offer or exchange offer that would result in a
person or group beneficially owning 10% or more of such
outstanding shares of Common Stock. Additional information
about the Rights distributed to stockholders may be found in the
Rights Agreement that is attached as an exhibit to the Current
Report on Form 8-K filed by the Company with the Securities and
Exchange Commission.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
On March 12, 1998, the registrant held its annual meeting
of stockholders to elect twelve directors and authorize the
Board to appoint an auditing firm for 1998. Directors Theodore
L. Bertier, Jr., Shirley E. Boyer, Thomas Clocker, John E.
Demyan, Alan E. Hahn, Charles L. Hein, F. William Kuethe, Jr.,
Frederick W. Kuethe, III, Eugene P. Nepa, William N. Scherer,
Sr., Karen B. Thorwarth and Mary Lou Wilcox were each re-elected
to the Board of Directors of Glen Burnie Bancorp.
The following is a record of the votes cast in the
election of directors:
<TABLE>
<CAPTION>
NOMINEE FOR NOMINEE FOR
------- --- ------- ---
<C> <C> <C> <C>
Theodore L. Bertier, Jr. 563,075 Parker Chapman 457,966
Shirley E. Boyer 562,769 Larry Craine 457,966
Thomas Clocker 562,219 Susan Demyan 459,069
John E. Demyan 561,666 Richard Fine 459,069
Alan E. Hahn 562,952 Steven Goff 457,966
Charles L. Hein 562,952 James North 457,966
F. William Kuethe, Jr. 561,972 Charles Phelps 457,719
Frederick W. Kuethe, III 561,913 William D. Schaefer 457,966
Eugene P. Nepa 563,075 Matthew Shimoda 459,069
William N. Scherer, Sr. 563,075 Ronald Staines 457,966
Karen B. Thorwarth 563,075 Michael Watson 457,719
Mary Lou Wilcox 563,075 Neil Williams 459,069
</TABLE>
In addition, there were 33,269 broker non-votes.
The second matter submitted to stockholder to authorize
the Board of Directors to select an outside accounting firm for
the 1998 fiscal year was also approved by a vote cast of 551,427
For and 455,561 Against. In addition, there were 33,269 broker
non-votes.
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits - The following exhibits are filed with
this report.
27.1 Financial Data Schedule (EDGAR Only).
27.2 Restated Financial Data Schedule (EDGAR Only).
(b) Reports on Form 8-K. On March 2, 1998, Glen Burnie
Bancorp filed a Form 8-K which reported, under Item
5, the adoption of a Stockholder Rights Plan by the
Board of Directors on February 13, 1998. No
financial statements were filed with this report.
11<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: May 14, 1998 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 three months ending
March 31, 1998 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-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 9,017
<INT-BEARING-DEPOSITS> 1,127
<FED-FUNDS-SOLD> 7,273
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 41,441
<INVESTMENTS-CARRYING> 41,286
<INVESTMENTS-MARKET> 41,717
<LOANS> 113,451
<ALLOWANCE> 3,888
<TOTAL-ASSETS> 220,341
<DEPOSITS> 198,363
<SHORT-TERM> 557
<LIABILITIES-OTHER> 2,456
<LONG-TERM> 0
<COMMON> 10,943
0
0
<OTHER-SE> 8,022
<TOTAL-LIABILITIES-AND-EQUITY> 220,341
<INTEREST-LOAN> 2,575
<INTEREST-INVEST> 1,267
<INTEREST-OTHER> 154
<INTEREST-TOTAL> 3,996
<INTEREST-DEPOSIT> 1,532
<INTEREST-EXPENSE> 1,540
<INTEREST-INCOME-NET> 2,456
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 32
<EXPENSE-OTHER> 4,057
<INCOME-PRETAX> (86)
<INCOME-PRE-EXTRAORDINARY> 3
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
<YIELD-ACTUAL> 4.98
<LOANS-NON> 3,058
<LOANS-PAST> 14
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 765,715
<ALLOWANCE-OPEN> 4,139
<CHARGE-OFFS> 325
<RECOVERIES> 74
<ALLOWANCE-CLOSE> 3,888
<ALLOWANCE-DOMESTIC> 3,888
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<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 three months ending March 31, 1997 and is qualified in
its entirety by reference to such financial statements.
<RESTATED>
<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> 8,839
0
0
<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> 0.34 <F1>
<EPS-DILUTED> 0.34 <F1>
<YIELD-ACTUAL> 4.95
<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
<FN>
<F1> The above numbers have been restated for the adoption of
SFAS 128 and a two-for-one stock split effected through
the payment of a 100% stock dividend on January 10, 1998.
</FN>
</TABLE>
