<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 June 30, 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, Maryland 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 June 30, 1998 was 1,095,968.
<PAGE>
<PAGE>
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
ASSETS --------- ----------
<S> <C> <C>
Cash and due from banks . . . . . . . . . . . . . $ 14,962 $ 9,687
Federal funds sold. . . . . . . . . . . . . . . . 3,259 18,850
Investment securities available for sale,
at fair value . . . . . . . . . . . . . . . . . 30,208 40,679
Investment securities held to maturity,
at cost (fair value June 30: $43,714;
December 31: $41,566) . . . . . . . . . . . . . 43,375 41,179
Loans receivable, net of allowance for credit
losses June 30: $3,695; December 31: $4,139 . . 112,439 111,545
Premises and equipment at cost, net of
accumulated depreciation. . . . . . . . . . . . 4,381 4,319
Other real estate owned . . . . . . . . . . . . . 741 749
Goodwill. . . . . . . . . . . . . . . . . . . . . 395 422
Other assets. . . . . . . . . . . . . . . . . . . 4,583 4,470
--------- ---------
Total assets $ 214,343 $ 231,900
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits. . . . . . . . . . . . . . . . . . . . . $ 191,913 $ 207,110
Short-term borrowings . . . . . . . . . . . . . . 838 890
Other liabilities . . . . . . . . . . . . . . . . 2,596 4,935
--------- ---------
Total liabilities . . . . . . . . . . . . $ 195,347 $ 212,935
========= =========
STOCKHOLDERS' EQUITY:
Common stock, par value $10, authorized 5,000,000
shares; issued and outstanding: June 30: 1,195,968
shares; December 31: 1,092,768 shares. . . . . . 10,960 10,928
Surplus . . . . . . . . . . . . . . . . . . . . . 6,575 6,575
Retained earnings . . . . . . . . . . . . . . . . 1,294 1,237
Net unrealized appreciation on investments available
for sale, net of income taxes. . . . . . . . . . 167 225
--------- ---------
Total stockholders' equity . . . . . . . 18,996 18,965
--------- ---------
Total liabilities and stockholders'
equity. . . . . . . . . . . . . . . . . $ 214,343 $ 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 SIX MONTHS ENDED
JUNE 30 JUNE 30
1998 1997 1998 1997
---------------------- ----------------------
<S> <C> <C> <C> <C>
Interest income on:
Loans, including fees . . . . . . . . . . $ 2,595 $ 2,754 $ 5,170 $ 5,614
U.S. Treasury and U.S. Government
agency securities . . . . . . . . . . . 1,160 1,311 2,315 2,589
State and municipal securities. . . . . . 79 348 191 694
Other . . . . . . . . . . . . . . . . . . 96 56 250 160
---------- ---------- ---------- ----------
Total interest income. . . . . . . 3,930 4,469 7,926 9,057
---------- ---------- ---------- ----------
Interest expense on:
Deposits. . . . . . . . . . . . . . . . . 1,514 1,720 3,046 3,546
Short-term borrowings . . . . . . . . . . 6 35 14 45
Total interest expense. . . . . . . 1,520 1,755 3,060 3,591
---------- ---------- ---------- ----------
Net interest income. . . . . . . 2,410 2,714 4,866 5,466
Provision for credit losses. . . . . . . . 0 0 0 270
---------- ---------- ---------- ----------
Net interest income after
provision for credit losses. . 2,410 2,714 4,866 5,196
---------- ---------- ---------- ----------
Other income:
Service charges on deposit accounts . . . 292 268 580 534
Other fees and commissions. . . . . . . . 49 48 100 103
Other non-interest income . . . . . . . . 39 49 1,183 78
Gains on investment securities. . . . . . 219 1 251 4
---------- ---------- ---------- ----------
Total other income. . . . . . . . . 599 366 2,114 719
---------- ---------- ---------- ----------
Other expenses:
Salaries and employee benefits. . . . . . 1,211 1,300 2,494 2,535
Occupancy . . . . . . . . . . . . . . . . 344 312 671 635
Other expenses. . . . . . . . . . . . . . 1,083 1,723 3,530 2,635
---------- ---------- ---------- ----------
Total other expenses. . . . . . . . 2,638 3,335 6,695 5,805
---------- ---------- ---------- ----------
Income before income taxes . . . . . . . . 371 (255) 285 110
Income tax expense (benefit) . . . . . . . 141 (266) 52 (276)
---------- ---------- ---------- ----------
Net income . . . . . . . . . . . . . . . . $ 230 $ 11 $ 233 $ 386
========== ========== ========== ==========
Net income per share of common stock . . . $ 0.21 $ 0.01 $ 0.21 $ 0.35
========== ========== ========== ==========
Weighted-average shares of common stock
outstanding . . . . . . . . . . . . . . 1,094,680 1,092,768 1,093,900 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)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
1998 1997 1998 1997
---------------------- ----------------------
<S> <C> <C> <C> <C>
Net income . . . . . . . . . . . . . . . . $ 230 $ 11 $ 233 $ 386
Other comprehensive income (expense),
net of tax
Unrealized gains (losses) securities:
Unrealized holding gains (losses)
arising during period. . . . . . . . 2 414 71 (19)
Less: reclassification adjustment for
gain included in net income. . . . . (116) 0 (116) 0
------- ------- ------- -------
Comprehensive income . . . . . . . . . . . $ 116 $ 245 $ 188 $ 367
======= ======= ======= =======
</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)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------------
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . $ 233 $ 386
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization, and accretion . . . . 187 370
Provision for credit losses . . . . . . . . . . . 0 270
Changes in assets and liabilities:
(Increase) decrease in other assets. . . . . . (77) (442)
Decrease (increase) in other liabilities . . . (2,323) (1,527)
-------- --------
Net cash provided (used) by operating activities . . (1,980) (943)
-------- --------
Cash flows from investing activities:
Proceeds from disposals of investment securities . 28,426 5,549
Purchases of investment securities . . . . . . . . (20,097) (11,930)
(Increase) decrease in loans, net. . . . . . . . . (894) 11,053
Purchases of premises and equipment. . . . . . . . (366) (476)
Purchases of other real estate . . . . . . . . . . 0 (417)
Disposal of other real estate. . . . . . . . . . . 2 222
Proceeds from sales of premises and equipment. . . 2 5
-------- --------
Net cash provided (used) by investing activities . . 7,073 4,006
-------- --------
Cash flows from financing activities:
Increase (decrease) in deposits, net . . . . . . (15,197) (16,386)
Increase (decrease) in short-term borrowings . . (52) 3,495
Dividends paid . . . . . . . . . . . . . . . . . (176) (185)
Issuance of common stock . . . . . . . . . . . . 16 0
-------- --------
Net cash provided (used) by financing activities . . (15,409) (13,076)
-------- --------
Increase (decrease) in cash and cash equivalents . . (10,316) (10,013)
Cash and cash equivalents, beginning of year . . . . 28,537 22,678
-------- --------
Cash and cash equivalents, end of period . . . . . . $ 18,221 $ 12,665
======== ========
</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 and six months ended
June 30, 1998 and 1997.
Operating results for the three and six-month periods ended
June 30, 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 $230,000 ($0.21 basic earnings
per share) for the second quarter of 1998 compared to second
quarter 1997 consolidated net income of $11,000 ($0.01 basic
earnings per share). Year-to-date consolidated net income for
the six months ending June 30, 1998 was $233,000 ($0.21 basic
earnings per share) compared to $386,000 ($0.35 basic earnings
per share) for the six months ended June 30, 1997. The increase
in second quarter consolidated net income was primarily
attributable to a reduction in other expense which with an
increase in other income offset a decline in net interest
income. For the six-month period, the Company's earnings were
adversely affected by higher other expense, reduced net interest
income and the absence of an income tax benefit which offset an
improvement in other income and a reduced provision for credit
losses.
NET INTEREST INCOME. The Company's consolidated net
interest income prior to provisions for credit losses for the
three and six months ended June 30, 1998 was $2,410,000 and
$4,866,000, respectively, compared to $2,714,000 and $5,466,000,
respectively, for the same periods in 1997, a decrease of
$304,000, or 11% for the three-month period and a decrease of
$600,000 or 11% for the six-month period. The decreases in net
interest income for the three and six month periods were
primarily attributable to a decrease in the relative volume of
interest-earning assets. Interest income declined $539,000
(12%) for the three months ended June 30, 1998 and declined
$1,131,000 (12.5%) for the six months ended June 30, 1998,
compared to the same periods in 1997. The declines in interest
income were attributable to reduced volumes. Interest expense
declined $235,000 (13%) for the three months ended June 30,
1998 and declined $531,000 (15%) for the six months ended June
30, 1998, compared to the same periods in 1997. The
tax-equivalent net interest margins for the three and six months
ended June 30, 1998 were 5.23% and 5.04%, respectively, compared
to 5.17% and 5.03% for the three and six months ended June 30,
1997, respectively. The increases in net interest margins for
the three and six months ended June 30, 1998 were primarily due
to a shift in the composition of interest-earning assets from
investment securities to higher yielding loans.
PROVISION FOR CREDIT LOSSES. The Company made no provision
for credit losses during the three and six month periods ended
June 30, 1998 compared to no provision and $270,000 in
provisions for credit losses during the three and six months
ended June 30, 1997, respectively. The absence of provisions
reflects improved asset quality and lower charge-off activity
during the 1998 period. As of June 30, 1998, the allowance for
credit losses equaled 144.34% of non-accrual and past due loans
compared to 118.73% at December 31, 1997 and 109.55% at June 30,
1997. During the three months ended June 30, 1998, the Company
recorded net charge-offs of $193,000 and for the six month
period recorded net charge-offs of $444,000 compared to $76,000
in net recoveries during the three months ended June 30, 1997
and $970,000 in net charge-offs during the six months ended June
30, 1997.
OTHER INCOME. Other income increased $233,000 (64%) and
$1,395,000 (194%), respectively, during the three and six months
ended June 30, 1998 compared to the prior year periods. The
increase in other income during the three months ended June 30,
1998 was attributable to increased gains on disposals of
investment securities. Other income for the six-month period
increased due to an insurance settlement during the first
quarter as well as increased gains on investment securities.
OTHER EXPENSE. Other expense decreased by $697,000 or 21%,
for the quarter and increased by $890,000, or 15%, for the
six-month period compared to the same periods in 1997. The
increase in other expense during the six month period reflects
the establishment of a $1.1 million litigation reserve during
the first quarter of 1998. Other expense declined in the second
quarter as the result of reductions in a variety of expense
categories.
INCOME TAXES. During the three and six months ended June
30, 1998, the Company recorded income tax expense of $141,000
and $52,000, respectively, compared to tax benefits of $266,000
and $276,000, respectively, during the three and six months
ended June 30, 1997. During the 1997 periods, the Company
recorded tax losses due primarily to its holdings of tax-exempt
state, county and municipal securities. The Company has
recently reduced its holdings
7<PAGE>
<PAGE>
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 reported taxable income during the 1998
periods.
FINANCIAL CONDITION
The Company's assets decreased to $214,343,000 at June 30,
1998 from $231,900,000 at December 31, 1997 primarily due to a
reduction in federal funds sold. The Bank's net loans totaled
$112,439,000 at June 30, 1998, compared to $111,545,000 on
December 31, 1997, an increase of $894,000 (0.8%). The increase
in loans was primarily attributable to the Bank's recently
introduced indirect automobile lending program. At June 30,
1998, indirect loans totaled $8,339,000 compared to none at
December 31, 1997. The Bank's other loan portfolios have held
steady or declined during the year.
The Company's total investment securities portfolio
(including both investment securities available for sale and
investment securities held to maturity) totaled $73,583,000 at
June 30, 1998, a $8,275,000 or 10%, decrease from $81,858,000 at
December 31, 1997. The Bank's cash and cash equivalents (cash
due from banks, interest-bearing deposits in other financial
institutions, and federal funds sold), as of June 30, 1998,
totaled $18,221,000 a decrease of $10,316,000 (36%) from the
December 31, 1997 total of $28,536,611. The aggregate market
value of investment securities held by the Bank as of June 30,
1998 was $73,922,000 compared to $82,245,000 as of December 31,
1997, a $8,323,000 (10%) decrease.
Deposits as of June 30, 1998 totaled $191,913,000 a
decrease of $15,197,000 (7%) for the year to date. Demand
deposits as of June 30, 1998 totaled $39,916,000 which is a
decrease of $7,735,000 (16%) from $47,651,000 at December 31,
1997. NOW accounts as of June 30, 1998 totaled $20,242,000
which is a decrease of $340,000 (2%) from $20,582,000 at
December 31, 1997. Money market accounts decreased $790,000
(4%) for the year to date to total $19,087,000 on June 30, 1998.
Savings deposits decreased by $1,774,000, or 4%, for the year to
date. Meanwhile, certificates of deposit over $100,000 totaled
$9,519,000 on June 30, 1998, a decrease of $552,000 (5.5%) from
December 31, 1997. Other time deposits (made up of certificates
of deposit less than $100,000 and individual retirement
accounts) totaled $61,861,000 on June 30, 1998, a $4,007,000
(6%) decrease from December 31, 1997.
8<PAGE>
<PAGE>
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
JUNE 30, DECEMBER 31,
1998 1997
--------- -----------
(Dollars in thousands)
<S> <C> <C>
Restructured Loans . . . . . . . . . . . . . . . $ 107 $ 344
========= =========
Non-accrual Loans:
Real estate -- mortgage:
Residential . . . . . . . . . . . . . . . . $ 379 $ 1,078
Commercial. . . . . . . . . . . . . . . . . 997 761
Real estate -- construction . . . . . . . . . 316 608
Installment . . . . . . . . . . . . . . . . . 479 665
Credit card & related . . . . . . . . . . . . -- --
Commercial. . . . . . . . . . . . . . . . . . 343 369
--------- ---------
Total nonaccrual loans. . . . . . . . . . 2,514 3,481
Accruing Loans Past Due 90 Days or More:
Real estate -- mortgage:
Residential . . . . . . . . . . . . . . . . 21 5
Commercial. . . . . . . . . . . . . . . . . -- --
Real estate -- construction . . . . . . . . . -- --
Installment . . . . . . . . . . . . . . . . . -- --
Credit card & related . . . . . . . . . . . . 25 --
Commercial. . . . . . . . . . . . . . . . . . -- --
--------- ---------
Total accruing loans past due
90 days or more . . . . . . . . . . . . . 46 5
--------- ---------
Total non-accrual and past due loans. . . . $ 2,560 $ 3,486
========= =========
Non-accrual and past due loans to gross loans. . 2.28% 3.13%
========= =========
Allowance for credit losses to non-accrual
and past due loans . . . . . . . . . . . . . . 144.34% 118.73%
========= =========
</TABLE>
At June 30, 1998, there were $501,000 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.
9<PAGE>
<PAGE>
Transactions in the allowance for credit losses for the six
months ended June 30, 1998 and 1997 were as follows:
<TABLE>
<CAPTION
SIX MONTHS ENDED
JUNE 30,
----------------------
1998 1997
-------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Beginning balance. . . . . . . . . . . $ 4,139 $ 5,061
-------- --------
Charge-offs. . . . . . . . . . . . . . (664) (1,339)
Recoveries . . . . . . . . . . . . . . 220 369
-------- --------
Net charge-offs. . . . . . . . . . . . (444) (970)
Provisions charged to operations . . . 0 270
-------- --------
Ending balance . . . . . . . . . . . . $ 3,695 $ 4,361
======== ========
Average loans. . . . . . . . . . . . . $114,999 $119,549
Net charge-offs to average loans . . . 0.39% 0.81%
</TABLE>
Net charge-offs during the six months ended June 30, 1998
declined to $444,000 from $970,000 during the comparable period
in 1997. The Company attributes the reduction in charge-off
activity to an improvement in asset quality as the Company has
reduced nonperforming assets both in dollar volume and as a
percentage of the loan portfolio.
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 from banks, interest-bearing deposits
in other financial institutions, and federal funds sold), as of
June 30, 1998, totaled $18,221,000 a decrease of $10,316,000
(36%) 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 June 30, 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 June 30, 1998.
The Company's stockholders' equity increased $31,000 or
0.2%, during the six months ended June 30, 1998, as earnings
offset decreases in the equity account attributable to dividends
accrued and a decrease in net unrealized appreciation on
securities available for sale. Net unrealized appreciation on
securities available for sale decreased $58,000 to $167,000 at
June 30, 1998 from $225,000 at December 31, 1997 as a result of
calls and sales of available-
10<PAGE>
<PAGE>
for-sale securities. Retained earnings, however, increased by
only $57,000 as the result of the accrual of $70,000 for cash
dividends to be paid after the end of the quarter. In addition,
$16,000 was 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 June 30, 1998, the Bank
was in full compliance with these guidelines with a Tier 1
leverage ratio of 8.08%, a Tier 1 risk-based capital ratio of
14.44% and a total risk-based capital ratio of 15.71%.
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.
11<PAGE>
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
On July 27, 1998, the Company settled Commercial and
Farmers Bank v. The Bank of Glen Burnie, Case No. 03-C-96-002941
(Balt. Cty Cir. Ct. filed March 25, 1996) which was one of three
suits filed by creditors of a company controlled by Mr. Brian
Davis alleging in each case that the Bank had negotiated checks
for loan proceeds over forged endorsements. The settlement will
have no financial statement impact since the Company had
previously established reserves in an amount sufficient to cover
the settlement amount.
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 June 17, 1998, Glen Burnie
Bancorp filed a Form 8-K which reported, under Item 5,
that the Federal Deposit Insurance Corporation
("FDIC") and the Maryland Commissioner of Financial
Regulation had advised the main subsidiary, The Bank
of Glen Burnie, that the Memorandum of Understanding
was terminated. No financial statements were filed
with this report.
12<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: August 13, 1998 By: /s/ John E. Porter
------------------
John E. Porter
Chief Financial Officer
(Duly Authorized Representative
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, 1998 and is qualified in its entirety by reference to
such financial statements.
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 7,738
<INT-BEARING-DEPOSITS> 7,224
<FED-FUNDS-SOLD> 3,259
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 30,208
<INVESTMENTS-CARRYING> 43,375
<INVESTMENTS-MARKET> 43,714
<LOANS> 116,134
<ALLOWANCE> 3,695
<TOTAL-ASSETS> 214,343
<DEPOSITS> 191,913
<SHORT-TERM> 838
<LIABILITIES-OTHER> 2,596
<LONG-TERM> 0
<COMMON> 10,960
0
0
<OTHER-SE> 8,036
<TOTAL-LIABILITIES-AND-EQUITY> 214,343
<INTEREST-LOAN> 5,170
<INTEREST-INVEST> 2,506
<INTEREST-OTHER> 250
<INTEREST-TOTAL> 7,926
<INTEREST-DEPOSIT> 3,046
<INTEREST-EXPENSE> 3,060
<INTEREST-INCOME-NET> 4,866
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 251
<EXPENSE-OTHER> 6,695
<INCOME-PRETAX> 285
<INCOME-PRE-EXTRAORDINARY> 233
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 233
<EPS-PRIMARY> 0.21
<EPS-DILUTED> 0.21
<YIELD-ACTUAL> 5.04
<LOANS-NON> 2,514
<LOANS-PAST> 46
<LOANS-TROUBLED> 107
<LOANS-PROBLEM> 501
<ALLOWANCE-OPEN> 4,139
<CHARGE-OFFS> 664
<RECOVERIES> 220
<ALLOWANCE-CLOSE> 3,695
<ALLOWANCE-DOMESTIC> 3,695
<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
June 30, 1997 and is qualified in its entirety by reference to
such financial statements.
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 10,115
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,550
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 53,408
<INVESTMENTS-CARRYING> 49,504
<INVESTMENTS-MARKET> 49,674
<LOANS> 113,399
<ALLOWANCE> 4,285
<TOTAL-ASSETS> 240,089
<DEPOSITS> 216,360
<SHORT-TERM> 4,043
<LIABILITIES-OTHER> 927
<LONG-TERM> 0
<COMMON> 8,839
0
0
<OTHER-SE> 9,920
<TOTAL-LIABILITIES-AND-EQUITY> 240,089
<INTEREST-LOAN> 5,614
<INTEREST-INVEST> 3,283
<INTEREST-OTHER> 160
<INTEREST-TOTAL> 9,057
<INTEREST-DEPOSIT> 3,546
<INTEREST-EXPENSE> 3,591
<INTEREST-INCOME-NET> 5,466
<LOAN-LOSSES> 270
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 5,805
<INCOME-PRETAX> 110
<INCOME-PRE-EXTRAORDINARY> 110
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 386
<EPS-PRIMARY> 0.35 <F1>
<EPS-DILUTED> 0.35 <F1>
<YIELD-ACTUAL> 5.03
<LOANS-NON> 3,981
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 5,061
<CHARGE-OFFS> 1,339
<RECOVERIES> 369
<ALLOWANCE-CLOSE> 4,361
<ALLOWANCE-DOMESTIC> 4,361
<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>
