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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, 1999
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, 1999 was 901,147.
<PAGE>
<PAGE>
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
------- ------------
ASSETS
<S> <C> <C>
Cash and due from banks. . . . . . . . . . . . . . . . . . . $ 7,555 $ 13,156
Federal funds sold . . . . . . . . . . . . . . . . . . . . . 2,575 2,864
Investment securities available for sale, at fair value. . . 30,450 32,925
Investment securities held to maturity, at cost (fair value
June 30: $28,230; December 31: $32,540 . . . . . . . . . 28,626 32,561
Loans receivable, net of allowance for credit losses
June 30: $2,839, December 31: $2,841. . . . . . . . . . . 138,868 125,501
Premises and equipment at cost, net of accumulated
depreciation . . . . . . . . . . . . . . . . . . . . . . 4,184 4,420
Other real estate owned. . . . . . . . . . . . . . . . . . . 515 1,099
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . 340 368
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 4,751 4,677
-------- --------
Total assets $217,864 $217,571
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits . . . . . . . . . . . . . . . . . . . . . $199,663 $199,611
Short-term borrowings. . . . . . . . . . . . . . . 887 1,144
Other liabilities. . . . . . . . . . . . . . . . . 2,877 2,647
-------- --------
Total liabilities. . . . . . . . . . . . $203,427 $203,402
======== ========
STOCKHOLDERS' EQUITY:
Common stock, par value $10, authorized 5,000,000 shares;
issued and outstanding: June 30: 901,147 shares;
December 31: 894,938 shares . . . . . . . . . . $ 9,011 $ 8,949
Surplus. . . . . . . . . . . . . . . . . . . . . . 3,462 3,374
Retained earnings. . . . . . . . . . . . . . . . . 1,938 1,563
Accumulated other comprehensive income . . . . . . 26 283
-------- --------
Total stockholders' equity . . . . . . . . 14,437 14,169
-------- --------
Total liabilities and stockholders'
equity . . . .. . . . . . . . . . . . . $217,864 $217,571
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
2
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<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,
------------------- -----------------
1999 1998 1999 1998
------ ------- ------- ------
<S> <C> <C> <C> <C>
Interest income on:
Loans, including fees . . . . . . . . . $ 2,828 $ 2,595 $ 5,720 $ 5,170
U.S. Treasury and U.S. Government
agency securities . . . . . . . . . . 833 1,160 1,673 2,315
State and municipal securities. . . . . 0 79 0 191
Other . . . . . . . . . . . . . . . . . 141 96 304 250
-------- -------- ------ -------
Total interest income. . . . . . . . 3,802 3,930 7,697 7,926
-------- -------- ------ -------
Interest expense on:
Deposits. . . . . . . . . . . . . . . . 1,366 1,514 2,764 3,046
Short-term borrowings . . . . . . . . . 13 6 21 14
-------- -------- ------ -------
Total interest expense. . . . . . . 1,379 1,520 2,785 3,060
-------- -------- ------ -------
Net interest income. . . . . . . 2,423 2,410 4,912 4,866
Provision for credit losses. . . . . . . . 0 0 0 0
-------- -------- ------ -------
Net interest income after
provision for credit losses. . . 2,423 2,410 4,912 4,866
-------- -------- ------ -------
Other income:
Service charges on deposit accounts . . 280 292 541 580
Other fees and commissions. . . . . . . 72 49 133 100
Other non-interest income . . . . . . . 67 39 94 1,183
Gains on investment securities. . . . . 2 219 27 . 251
-------- -------- ------ -------
Total other income. . . . . . . . . 421 599 795 2,114
-------- -------- ------ -------
Other expenses:
Salaries and employee benefits. . . . . 1,303 1,211 2,595 2,494
Occupancy . . . . . . . . . . . . . . . 350 344 695 671
Other expenses. . . . . . . . . . . . . 638 1,083 1,568 3,530
-------- -------- ------ -------
Total other expenses. . . . . . . . 2,291 2,638 4,858 6,695
-------- -------- ------ -------
Income before income taxes . . . . . . . . 553 371 849 285
Income tax expense (benefit) . . . . . . . 192 141 294 52
-------- -------- ------ -------
Net income . . . . . . . . . . . . . . . . $ 361 $ 230 $ 555 $ 233
======= ======== ======== ========
Basic and diluted earnings per
share of common stock. . . . . . . . . . $ 0.40 $ 0.21 $ 0.62 $ 0.21
======= ======== ======== ========
Weighted average shares of common
stock outstanding . . . . . . . . . . . 900,004 1,094,680 898,693 1,093,900
======= ========= ======= =========
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
3
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<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,
------------------- -----------------
1999 1998 1999 1998
------ ------- ------- ------
<S> <C> <C> <C> <C>
Net income . . . . . . . . . . . . . . . $ 361 $ 230 $ 555 $ 233
Other comprehensive income (expense),
net of tax
Unrealized gains (losses) securities:
Unrealized holding gains (losses)
arising during period. . . . . . (122) 2 (238) 71
Reclassification adjustment for gain
included in net income . . . . . (1) (116) (19) (116)
------ ------ ------ ------
Comprehensive income . . . . . . . . . . $ 238 $ 116 $ 298 $ 188
====== ====== ====== ======
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
4
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GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------------
1999 1998
-------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 555 $ 233
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization, and accretion . . . . . . . 349 187
Provision for credit losses . . . . . . . . . . . . . . 0 0
Changes in assets and liabilities:
(Increase) decrease in other assets. . . . . . . . . 2 (77)
Decrease (increase) in other liabilities . . . . . . 293 (2,323)
-------- -------
Net cash provided (used) by operating activities . . . . . 1,199 (1,980)
-------- -------
Cash flows from investing activities:
Proceeds from disposals of investment securities . . . 15,955 28,426
Purchases of investment securities . . . . . . . . . . (9,901) (20,097)
Increase in loans, net . . . . . . . . . . . . . . . . (13,367) (894)
Purchases of premises and equipment. . . . . . . . . . (62) (366)
Purchases of other real estate . . . . . . . . . . . . 0 0
Disposal of other real estate. . . . . . . . . . . . . 584 2
Proceeds from sales of premises and equipment. . . . . 0 2
-------- -------
Net cash provided (used) by investing activities . . . . . (6,791) 7,073
-------- -------
Cash flows from financing activities:
Increase (decrease) in deposits, net . . . . . . . . . 52 (15,197)
Decrease in short-term borrowings. . . . . . . . . . . (257) (52)
Dividends paid . . . . . . . . . . . . . . . . . . . . (184) (176)
Issuance of common stock . . . . . . . . . . . . . . . 91 16
-------- -------
Net cash used by financing activities . . . . . . . . . . (298) (15,409)
-------- -------
Decrease in cash and cash equivalents. . . . . . . . . . . (5,890) (10,316)
Cash and cash equivalents, beginning of year . . . . . . . 16,030 28,537
-------- -------
Cash and cash equivalents, end of period . . . . . . . . . $10,130 $18,221
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial
statements.
5
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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, 1999 and 1998.
Operating results for the three and six-month periods ended
June 30, 1999 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1999.
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 1998 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
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<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 $361,000 ($0.40 basic and diluted
earnings per share) for the second quarter of 1999 compared to
second quarter 1998 consolidated net income of $230,000 ($0.21
basic and diluted earnings per share). Year-to-date
consolidated net income for the six months ended June 30, 1999
was $555,000 ($0.62 basic and diluted earnings per share)
compared to $233,000 ($0.21 basic and diluted earnings per
share) for the six months ended June 30, 1998. The increase in
consolidated net income for the three and six-month periods was
primarily attributable to reductions in total other expense.
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, 1999 was $2,423,000 and
$4,912,000, respectively, compared to $2,410,000 and $4,866,000,
respectively, for the same periods in 1998, an increase of
$13,000 or 0.5% for the three-month period and an increase of
$46,000 or 0.9% for the six-month period. The increase in net
interest income for the three and six month periods were
primarily attributable to a reduction in interest expenses.
Interest income decreased $128,000 (3.3%) for the three months
ended June 30, 1999 and decreased $229,000 (2.9%) for the six
months ended June 30, 1999, compared to the same periods in
1998. The decreases in interest income were attributable to
declining yields on the securities portfolio. Interest expense
declined $141,000 (9.3%) for the three months ended June 30,
1999 and declined $275,000 (9.0%) for the six months ended June
30, 1999, compared to the same periods in 1998. Net interest
margins for the three and six months ended June 30, 1999 were
4.97% and 5.08%, respectively, compared to tax equivalent net
interest margins of 5.23% and 5.04% for the three and six months
ended June 30, 1998, respectively. The decrease in net interest
margin for the three months ended June 30, 1999 were primarily
due to declines in interest rates on earning assets.
PROVISION FOR CREDIT LOSSES. The Company made no
provisions for credit losses during the three and six month
periods ended June 30, 1999 and 1998. As of June 30, 1999, the
allowance for credit losses equaled 197.17% of non-accrual and
past due loans compared to 179.58% at December 31, 1998 and
144.34% at June 30, 1998. During the three months ended June
30, 1999, the Company recorded net charge-offs of $93,000 and
for the six month period recorded net charge-offs of $2,000
compared to $193,000 in net charge-offs during the three months
ended June 30, 1998 and $444,000 in net charge-offs during the
six months ended June 30, 1998.
OTHER INCOME. Other income decreased $178,000 (29.7%) and
$1,319,000 (62.4%), respectively, during the three and six
months ended June 30, 1999 compared to the prior year periods.
The decrease in other income during the three months ended June
30, 1999 was attributable to lower gains on the investment
portfolio. Other income for the six-month period ended June
30, 1998 was higher primarily due to the receipt of $1,125,000
in settlement of a claim against a former insurance provider
during the first quarter of 1998. Excluding this non-recurring
gain, other income for the first six months of 1999 would have
decreased due to lower gains on the securities portfolio.
OTHER EXPENSE. Other expense decreased by $347,000 or
13.2%, for the quarter and decreased by $1,837,000, or 27.4%,
for the six-month period compared to the same periods in 1998.
Other expense for the 1998 period was increased by management's
decision to establish additional litigation reserves during the
first quarter. In addition, the Company experienced
significantly higher legal and professional fees during 1998 in
connection with an election contest at the 1998 Annual Meeting.
Included in other expense for the 1999 period was a $150,000
payment made to First Mariner Bancorp in January pursuant to a
standstill agreement. The Company will make four additional
payments of $131,378 each over the next four years, provided
First Mariner Bancorp complies with the terms of the standstill
agreement. Other expense declined in the second quarter as the
result of reductions in a variety of expense categories,
primarily legal expenses.
7
<PAGE>
<PAGE>
INCOME TAXES. During the three and six months ended June
30, 1999, the Company recorded income tax expense of $192,000
and $294,000, respectively, compared to tax expense of $141,000
and $52,000, respectively, during the three and six months ended
June 30, 1998. 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 reported higher taxable income during the 1999 periods.
FINANCIAL CONDITION
The Company's assets increased to $217,864,000 at June 30,
1999 from $217,571,000 at December 31, 1998 primarily due to
growth in the loan portfolio. The Bank's net loans totaled
$138,868,000 at June 30, 1999, compared to $125,501,000 on
December 31, 1998, an increase of $13,367,000 (9.6%). The
increase in loans was primarily attributable to the Bank's
indirect automobile lending program. At June 30, 1999, indirect
loans totaled $39,039,000 compared to $24,630,000 at December
31, 1998. 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 $59,076,000 at
June 30, 1999, a $6,410,000 or 9.8%, decrease from $65,486,000
at December 31, 1998. 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,
1999, totaled $10,130,000 a decrease of $5,890,000 (36.8%) from
the December 31, 1998 total of $16,020,000. The aggregate
market value of investment securities held by the Bank as of
June 30, 1999 was $58,680,000 compared to $65,465,000 as of
December 31, 1998, a $6,785,000 (10.4%) decrease.
Deposits as of June 30, 1999 totaled $199,663,000 an
increase of $52,000 (.02%) for the year to date. Demand
deposits as of June 30, 1999 totaled $42,804,000 which is a
decrease of $2,556,000 (5.6%) from $45,361,000 at December 31,
1998. NOW accounts as of June 30, 1999 totaled $20,311,000
which is a decrease of $290,000 (1.4%) from $20,601,000 at
December 31, 1998. Money market accounts increased $319,000
(1.6%) for the year to date to total $20,369,000 on June 30,
1999. Savings deposits increased by $1,345,000, or 3.2%, for
the year to date. Meanwhile, certificates of deposit over
$100,000 totaled $6,300,000 on June 30, 1999, an increase of
$542,000 (9.4%) from December 31, 1998. Other time deposits
(made up of certificates of deposit less than $100,000 and
individual retirement accounts) totaled $66,023,000 on June 30,
1999, a $853,000 (1.3%) decrease from December 31, 1998.
8
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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,
1999 1998
-------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Restructured Loans . . . . . . . . . . . . . . $ 253 $ 294
======= =======
Non-accrual Loans:
Real estate -- mortgage:
Residential . . . . . . . . . . . . . . . $ 250 $ 336
Commercial. . . . . . . . . . . . . . . . 292 .505
Real estate -- construction . . . . . . . . 292 316
Installment . . . . . . . . . . . . . . . . 472 463
Credit card & related . . . . . . . . . . . 0 0
Commercial. . . . . . . . . . . . . . . . . 114 105
------- ------
Total nonaccrual loans. . . . . . . . . 1,420 1,725
------- ------
Accruing loans past due 90 days or more:
Real estate -- mortgage:
Residential . . . . . . . . . . . . . . . 13 0
Commercial. . . . . . . . . . . . . . . . 0 0
Real estate -- construction . . . . . . . . 0 0
Installment . . . . . . . . . . . . . . . . 0 0
Credit card & related . . . . . . . . . . . 2 18
Commercial. . . . . . . . . . . . . . . . . 0 0
------- -------
Total accruing loans past due
90 days or more . . . . . . . . . . . 15 18
------- -------
Total non-accrual and past due loans. . $ 1,435 $ 1,743
======= ======
Non-accrual and past due loans to gross
loans . . . . . . . . . . . . . . . . . . . 1.01% 1.35%
======= ======
Allowance for credit losses to non-accrual
and past due loans . . . . . . . . . . . . . 197.84% 179.58%
======= ======
</TABLE>
At June 30, 1999, there were $245,000 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
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<PAGE>
Transactions in the allowance for credit losses for the six
months ended June 30, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------
1999 1998
-------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Beginning balance. . . . . . . . . . . . . . $ 2,841 $ 4,139
-------- --------
Charge-offs. . . . . . . . . . . . . . . . . (266) (664)
Recoveries . . . . . . . . . . . . . . . . . 264 220
-------- --------
Net charge-offs. . . . . . . . . . . . . . . (2) (444)
Provisions charged to operations . . . . . . 0 0
-------- --------
Ending balance . . . . . . . . . . . . . . . $ 2,839 $ 3,695
======== ========
Average loans. . . . . . . . . . . . . . . . $134,487 $114,999
Net charge-offs to average loans . . . . . . 0.00% 0.39%
</TABLE>
Net charge-offs during the six months ended June 30, 1999
declined to $2,000 from $444,000 during the comparable period in
1998. 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, 1999, totaled $10,130,000, a decrease of $5,890,000
(36.8%) from the December 31, 1998 total of $16,020,000.
The Bank may draw on a $26.0 million 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, 1999, however, no amounts were
outstanding under this line. The Bank also has a secured line
of credit in the amount of $5.0 million from another commercial
bank on which no amounts were outstanding on June 30, 1999.
The Company's stockholders' equity increased $268,000, or
1.9%, during the six months ended June 30, 1999 due to the
retention of earnings. Retained earnings increased by $375,000
as the result of earnings during the period. Stockholders'
equity was also increased by the issuance of 1,370 shares
pursuant to the Company's Dividend
10
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<PAGE>
Reinvestment and Stockholder Purchase Plans. Net unrealized
appreciation on securities available for sale decreased $257,000
to $26,000 at June 30, 1999 from $283,000 at December 31, 1998.
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, 1999, 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
8.52% and a total risk-based capital ratio of 9.78%.
YEAR 2000 READINESS DISCLOSURE
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 Year 2000 plan calls for the identification
of all systems that could be affected by Year 2000 problem, the
systematic assessment of their Year 2000 readiness and the
institution of appropriate remedial measures and contingency
planning. As part of its Year 2000 plan, the Company has ranked
its various computer systems according to their importance to
the continued functioning of the Bank. Assessment procedures
range from actual testing for the Company's most mission
critical systems to seeking written self assessments from
individual borrowers. Based on these assessments, the Company
has instituted appropriate remedial measures which include
software upgrades and the replacement of vendors and hardware
where necessary. The Company's Year 2000 plan includes
contingency and back-up plans for mission critical systems.
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 spent
approximately $400,000 in 1997 and 1998 to upgrade certain
hardware and software and believes the cost of its Year 2000
compliance program will not be material to its financial
condition. The Company believes it is in substantial compliance
with its Year 2000 plan. In the event of unforseen disruptions
in Year 2000 compliance, the Company's business operations could
be adversely affected.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK
Not applicable.
11
<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. None.
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 16, 1999 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, 1999 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-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 7,363
<INT-BEARING-DEPOSITS> 192
<FED-FUNDS-SOLD> 2,575
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 30,450
<INVESTMENTS-CARRYING> 28,626
<INVESTMENTS-MARKET> 28,230
<LOANS> 141,707
<ALLOWANCE> 2,839
<TOTAL-ASSETS> 217,864
<DEPOSITS> 199,663
<SHORT-TERM> 887
<LIABILITIES-OTHER> 2,877
<LONG-TERM> 0
0
0
<COMMON> 9,011
<OTHER-SE> 5,426
<TOTAL-LIABILITIES-AND-EQUITY> 217,864
<INTEREST-LOAN> 5,720
<INTEREST-INVEST> 1,673
<INTEREST-OTHER> 304
<INTEREST-TOTAL> 7,697
<INTEREST-DEPOSIT> 2,764
<INTEREST-EXPENSE> 2,785
<INTEREST-INCOME-NET> 4,912
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 27
<EXPENSE-OTHER> 4,858
<INCOME-PRETAX> 849
<INCOME-PRE-EXTRAORDINARY> 555
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 555
<EPS-BASIC> 0.62
<EPS-DILUTED> 0.62
<YIELD-ACTUAL> 5.08
<LOANS-NON> 1,420
<LOANS-PAST> 15
<LOANS-TROUBLED> 253
<LOANS-PROBLEM> 245
<ALLOWANCE-OPEN> 2,841
<CHARGE-OFFS> 266
<RECOVERIES> 264
<ALLOWANCE-CLOSE> 2,839
<ALLOWANCE-DOMESTIC> 2,382
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 457
</TABLE>
