<PAGE>
1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended June 30, 2000
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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 No.)
101 Crain Highway, S.E.
Glen Burnie, Maryland 21061
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 766-3300
Inapplicable
(Former name, former address and former fiscal year
if changed from 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 __
---
At July 19, 2000, the number of shares outstanding of the registrant's common
stock was 1,102,519.
<PAGE>
2
TABLE OF CONTENTS
Part I - Financial Information Page
Item 1. Financial Statements:
-------
Condensed Consolidated Balance Sheets,
June 30, 2000 (unaudited) and December 31, 1999 (audited) 3
Condensed Consolidated Statements of Income for the Three
And Six Months Ended June 30, 2000 and 1999 (unaudited) 4
Condensed Consolidated Statements of Comprehensive Income
for the Three and Six Months Ended June 30, 2000 and
1999 (unaudited) 5
Condensed Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 2000 and 1999 (unaudited) 6
Notes to Unaudited Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
------- and Results of Operations 8
Item 3. Quantitative And Qualitative Disclosure About Market Risk 12
-------
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders 13
-------
Item 6. Exhibits and Reports on Form 8-K 13
-------
<PAGE>
3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
(Unaudited)
<CAPTION>
June 30, 2000 December 31,
ASSETS (unaudited) 1999
----------- ----
<S> <C> <C>
Cash and due from banks $7,477 $ 8,317
Interest-bearing deposits in other financial institutions 35 10
Federal funds sold 2,792 556
----- ---
Cash and cash equivalents 10,304 8,883
Investment securities available for sale, at fair value 17,375 15,317
Investment securities held to maturity, at cost
(fair value June 30: $25,552 December 31: $27,042) 27,238 28,657
Loans, less allowance for credit losses
(June 30: $3,385; December 31: $2,922) 159,061 151,107
Premises and equipment at cost, less accumulated depreciation 4,137 4,253
Other real estate owned 487 559
Other assets 4,085 4,663
-------- ---------
Total assets $222,687 $ 213,439
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $ 203,625 $ 194,090
Short-term borrowings 848 2,465
Other liabilities 2,100 1,782
--------- ---------
Total liabilities $ 206,573 $ 198,337
--------- ---------
STOCKHOLDERS' EQUITY:
Common stock, par value $1,authorized 15,000,000 shares; issued and outstanding:
June 30: 1,102,516 shares; December 31: 1,093,496 shares $1,102 $ 1,093
Surplus 10,292 10,149
Retained earnings 4,909 4,013
Accumulated other comprehensive loss (189) (153)
--------- ---------
Total stockholders' equity 16,114 15,102
--------- ---------
Total liabilities and stockholders' equity $ 222,687 $ 213,439
========= =========
See accompanying notes to condensed consolidated
financial statements.
</TABLE>
<PAGE>
4
<TABLE>
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
-------------------------- ------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Interest income on:
Loans, including fees $3,573 $2,828 $6,691 $5,720
U.S. Treasury and U.S. Government agency securities 664 833 1,340 1,673
State and Municipal securities 13 0 13 0
Other 68 141 103 304
----- ----- ----- -----
Total interest income 4,318 3,802 8,147 7,697
----- ----- ----- -----
Interest expense on:
Deposits 1,383 1,366 2,702 2,764
Short-term borrowings 9 13 34 21
----- ----- ----- -----
Total interest expense 1,392 1,379 2,736 2,785
----- ----- ----- -----
Net interest income 2,926 2,423 5,411 4,912
Provision for credit losses 0 0 0 0
----- ----- ----- -----
Net interest income after provision for credit 2,926 2,423 5,411 4,912
----- ----- ----- -----
losses
Other income:
Service charges on deposit accounts 240 280 487 541
Other fees and commissions 182 72 316 133
Other non-interest income 0 67 59 94
Gains on investment securities 0 2 0 27
Gain on sale of real estate 447 0 447 0
--- --- --- ---
Total other income 869 421 1,309 795
--- --- ----- ---
Other expenses:
Salaries and employee benefits 1,400 1,303 2,773 2,595
Occupancy 143 132 313 273
Other expenses 922 856 1,765 1,990
----- ----- ----- -----
Total other expenses 2,465 2,291 4,851 4,858
----- ----- ----- -----
Income before income taxes 1,330 553 1,869 849
Income tax expense 500 192 672 294
----- ----- ----- -----
Net income $ 830 $ 361 $1,197 $ 555
===== ===== ====== =====
Basic and diluted earnings per share of common stock $0.66 $0.29 $ .95 $ 0.44
===== ===== ====== ======
Weighted average shares of common stock outstanding 1,265,551 1,259,003 1,265,551 1,259,003
========= ========= ========= =========
Dividends declared per share of common stock $0.150 $0.083 $0.275 $0.166
====== ====== ====== ======
See accompanying notes to condensed consolidated
financial statements.
</TABLE>
<PAGE>
5
<TABLE>
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
Three Months Ended June 30 Six Months Ended June 30
-------------------------- ------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $830 $361 $1,197 $555
Other comprehensive income (loss), net of tax
Unrealized gains (losses) securities:
Unrealized holding gains (losses) arising (4) (122) (36) (256)
during period
Reclassification adjustment for (gains) 0 (1) 0 (16)
losses included in net income ---- ---- ----- ----
Comprehensive income $826 $238 $1,161 $283
==== ==== ====== ====
See accompanying notes to condensed consolidated
financial statements.
</TABLE>
<PAGE>
6
<TABLE>
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<CAPTION>
Six Months Ended June 30,
2000 1999
---- ----
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income $1,197 $555
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and accretion 390 349
Provision for credit losses 0 0
Changes in assets and liabilities:
Decrease in other assets 587 2
Increase in other liabilities 292 293
----- ----
Net cash provided by operating activities 2,466 1,199
----- -----
Cash flows from investing activities:
Maturities of available for sale mortgage-backed securities 1,817 0
Proceeds from disposals of investment securities 500 15,955
Purchases of investment securities (3,030) (9,901)
Increase in loans, net (7,954) (13,367)
Purchases of premises and equipment (245) (62)
Purchases of other real estate
Disposal of other real estate 72 584
Proceeds from sales of premises and equipment 0 0
------ ------
Net cash used by investing activities (8,840) (6,791)
------ ------
Cash flows from financing activities:
Increase in deposits, net 9,535 52
Decrease in short-term borrowings (1,617) (257)
Dividends paid (275) (184)
Common stock dividends reinvested 102
Issuance of common stock 50 91
----- -----
Net cash provided (used) by financing activities 7,795 (298)
----- -----
Increase (decrease) in cash and cash equivalents 1,421 (5,890)
Cash and cash equivalents, beginning of year 8,883 16,020
------- --------
Cash and cash equivalents, end of period $10,304 $ 10,130
======= ========
See accompanying notes to condensed consolidated
financial statements.
</TABLE>
<PAGE>
7
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, 2000 and 1999.
Operating results for the three and six-month periods ended June 30,
2000 are not necessarily indicative of the results that may be expected for the
year ending December 31, 2000.
NOTE 2 - EARNINGS PER SHARE
Information for net income per share and weighted average shares
outstanding for prior periods have been restated to reflect a 20% stock dividend
paid in January 2000.
Basic earnings per share of common stock are computed by dividing net
earnings by the weighted average number of common shares outstanding during the
period. Diluted earnings per share are calculated by including the average
dilutive common stock equivalents outstanding during the periods. Dilutive
common equivalent shares consist of stock options, calculated using the treasury
stock method.
NOTE 3 - CONTINGENCIES
On February 15, 2000, the Bank sold its credit card portfolio to
another financial institution. The outstanding balance of the portfolio as of
the date of settlement was $1,064,857.
As a result of the sale, the Bank was required to maintain a loan loss
reserve for all non-business accounts with the financial institution of
approximately $48,000, that was funded with part of the settlement proceeds. The
loan loss reserve is for a one year period, with any remaining reserve returned
to the Bank. The Bank has no additional responsibilities for loan losses in
excess of the initial reserves. As of June 30, 2000, approximately $44,000
remained in the loan loss reserve. In addition to the loan loss reserve for
non-business accounts, the Bank is also required to guarantee all business
accounts for a one year period. Total Bank exposure for business accounts is
approximately $400,000, with a total outstanding balance of approximately
$78,483 as of June 30, 2000.
NOTE 4 - 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.
Effective October 1, 1998, the Bank adopted the provisions of SFAS No.
133, which provides for a special opportunity to reclassify held to maturity
securities to available for sale. In connection therewith, the Bank reclassified
held to maturity securities with amortized cost approximating $20,300,000 as
available for sale, resulting in an increase in accumulated other comprehensive
income of approximately $270,000, net of deferred taxes of approximately
$170,000.
<PAGE>
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS
General. 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 $830,000 ($0.66
basic and diluted earnings per share) for the second quarter of 2000, compared
to second quarter 1999 consolidated net income of $361,000 ($0.29 basic and
diluted earnings per share). Year-to-date consolidated net income for the six
months ended June 30, 2000 was $1,197,000 ($.95 basic and diluted earnings per
share), compared to $555,000 ($0.44 basic and diluted earnings per share) for
the six months ended June 30, 1999. The increase in consolidated net income was
primarily due to reductions in the Company's total other non-interest expenses
and an increase in both net interest income and other non-interest income.
Net Interest Income. The Company's consolidated net interest income
prior to provision for credit losses for the three and six months ended June 30,
2000 was $2,926,000 and $5,411,000, respectively, compared to $2,423,000 and
$4,912,000, respectively, for the same periods in 1999, an increase of $503,000
or 20.7% for the three-month period, and an increase of $499,000, or 10.2% for
the six-month period. The increase in net interest income for both the three and
six-month periods were primarily attributable to an increase in total interest
income.
Interest income increased $516,000 (13.6%) for the three months ended
June 30, 2000 and increased $450,000 (5.8%) for the six months ended June 30,
2000, compared to the same periods in 1999. The increases in interest income
were attributable to increasing yields on the loan portfolio. Interest income on
loans increased $745,000 (26.3%) for the three months ended June 30, 2000, and
increased $971,000 (17%) for the six months ended June 30, 2000, compared to the
same periods in 1999. These increases were due to growth in the Bank's loan
portfolio, as well as the recovery of non-accrual interest on a commercial loan.
Interest expense increased $13,000 (0.9%) for the three months ended
June 30, 2000 compared to the 1999 period, due to an increase in certificates of
deposit, and declined $49,000 (1.8%) for the six months ended June 30, 2000,
compared to the 1999 period, due to a reduction in federal fund borrowings and
money market demand account deposits.
Net interest margins for the three and six months ended June 30, 2000
were 5.75% and 5.39%, respectively, compared to tax equivalent net interest
margins of 4.97% and 5.08% for the three and six months ended June 30, 1999,
respectively. The increase in net interest margins for the three and six-months
ended June 30, 2000 were primarily due to increases in interest rates on earning
assets, and the recovery of non-accrual interest.
Provision For Credit Losses. The Company made no additional provision
for credit losses during the three and six month periods ended June 30, 2000 and
1999. As of June 30, 2000, the allowance for credit losses equaled 883.81% of
non-accrual and past due loans compared to 276.97% at December 31, 1999 and
197.84% at June 30, 1999. During the three and six month periods ended June 30,
2000, the Company recorded net recoveries of $502,000 and $463,000,
respectively, compared to $93,000 and $2,000, respectively, in net recoveries
during the corresponding periods of the prior year. On an annualized basis, net
recoveries for the 2000 period represent 0.6% of the average loan portfolio.
Other Income. Other income increased $448,000 (106.4%) and $514,000
(64.7%), respectively, during the three and six months ended June 30, 2000
compared to the prior year periods. The increases were primarily due to an
increase in interchange fees from the Bank's debit card and ATM charges to
non-customers included in other fees and commissions, a $59,000 gain recognized
on the sale of the Bank's credit card portfolio which is included in "Other
non-interest income", and a gain of $447,000 on the sale of other real estate
owned. The Company also recorded increases in service charges on deposit
accounts and other fees and commissions which the Company attributes to the
increases in deposits and in the loan portfolio between the periods.
Other Expense. Other expense increased by $174,000 (or 7.6%) and
decreased $7,000 (or 0.1%), respectively, during the three and six months ended
June 30, 2000 compared to the prior year periods. The increase in other expense
for the three-month period was primarily attributable to a $97,000, or 7.4%,
increase in salary and employee benefit expenses. Included in other expense for
the 1999 period was a $150,000 payment made to First Mariner Bancorp in January
1999 pursuant to a standstill agreement compared to a $131,378 payment in the
current year. The Company will make three additional payments of $131,378 each
over the next three years, provided First Mariner Bancorp complies with the
standstill agreement. The decrease in other expense for the six-month period was
primarily due to lower legal and professional fees.
<PAGE>
9
Income Taxes. During the three and six months ended June 30, 2000, the
Company recorded income tax expense of $500,000 and $672,000, respectively,
compared to an income tax expense of $192,000 and $294,000, respectively, for
the corresponding periods of the prior year. The increase in income tax expenses
reflect the Company's higher earnings during the current year's periods. The
Company's effective tax rate for the three and six month periods in 2000 were
37.59% and 35.96%, respectively, compared to 34.72% and 34.63%, respectively,
for the prior year periods.
FINANCIAL CONDITION
General. The Company's assets increased to $222,687,000 at June 30,
2000 from $213,439,456 at December 31, 1999 primarily due to an increase in the
size of the loan portfolio. The Bank's net loans totaled $159,061,000 at June
30, 2000, compared to $151,106,560 on December 31, 1999, an increase of
$7,954,000 (5.3%). The increase in loans was primarily attributable to an
increase in the indirect loan portfolio. At June 30, 2000, indirect loans
totaled $58,978,373 compared to $50,966,968 at December 31, 1999. 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 $44,613,000 at June 30, 2000, a $639,000 or 1.4% increase from
$43,974,495 at December 31, 1999. 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, 2000, totaled $10,304,000, an increase of
$1,421,000 (16%) from the December 31, 1999 total of $8,883,322. The aggregate
market value of investment securities held by the Bank as of June 30, 2000 was
$42,927,000 compared to $42,359,004 as of December 31, 1999, a $568,000 (1.3%)
increase.
Deposits as of June 30, 2000 totaled $203,625,000, an increase of
$9,535,000 (4.9%) for the year to date. Demand deposits as of June 30, 2000
totaled $48,914,908 which is an increase of $3,770,615 (8.3%) from $45,144,293
at December 31, 1999. NOW accounts as of June 30, 2000 totaled $19,256,865 which
is an increase of $694,087 (3.7%) from $18,562,778 at December 31, 1999. Money
market accounts decreased by $769,117 (or 4.4%), from $17,628,664 at December
31, 1999, to $16,859,547 at June 30, 2000. Savings deposits increased by
$3,221,254 (or 7.9%) from $40,925,287 at December 31, 1999, to $44,146,541 on
June 30, 2000. Certificates of deposit over $100,000 totaled $8,107,762 on June
30, 2000, an increase of $1,762,583 (27.8%) from the December 31, 1999 total of
$6,345,179. Other time deposits (made up of certificates of deposit less than
$100,000 and individual retirement accounts) totaled $65,900,672 on June 30,
2000, a $608,368 (.9%) increase from the $65,292,304 total on December 31, 1999.
The Company attributes the increase in deposits to the general increase in
market rates during the period which have made deposits more competitive. In
addition, the Bank promoted 13-month and 25-month certificate accounts during
the period.
As a result of the growth in deposits, the Company reduced its
short-term borrowings from $2,464,936 at December 31, 1999 to $847,666 at June
30, 2000 by repaying a $2,000,000 advance from the Federal Home Loan Bank of
Atlanta. The Company's remaining short-term borrowings consist of amounts
payable to the U.S. Treasury on treasury tax and loan accounts.
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.
<PAGE>
10
<TABLE>
<CAPTION>
At June 30 At December 31,
---------- ---------------
2000 1999
---- ----
(Dollars in Thousands)
<S> <C> <C>
Restructured loans $310 $243
==== ====
Non-accrual loans:
Real estate -- mortgage:
Residential $ 143 237
Commercial 75 135
Real estate - construction 0 280
Installment 61 315
Credit card & related 0 0
Commercial 100 45
--- -----
Total nonaccrual loans 379 1,012
--- -----
Accruing loans past due 90 days or more: Real estate - mortgage:
Residential 1 43
Commercial 0 0
Real estate - construction 0 0
Installment 0 0
Credit card & related 0 0
Commercial 0 0
Other 3 0
--- ---
Total accruing loans past due 90 days or more 4 43
--- ---
Total non-accrual and past due loans $383 $1,055
==== ======
Non-accrual and past due loans to gross loans 0.24% 0.68%
==== ====
Allowance for credit losses to non-accrual and past due loans 883.81% 276.97%
====== ======
</TABLE>
At June 30, 2000, there were $1,811,468 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.
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11
Transactions in the allowance for credit losses for the six months
ended June 30, 2000 and 1999 were as follows:
<TABLE>
<CAPTION>
Six Months Ended
June 30
2000 1999
---- ----
(Dollars in Thousands)
<S> <C> <C>
Beginning balance $2,922 $2,841
Charge-offs (409) (266)
Recoveries 872 264
------ ------
Net recoveries 463 (2)
Provisions charged to operations 0 0
------ ------
Ending balance $3,385 $2,839
====== ======
Average loans $155,069 $134,487
Net recoveries to average loans (annualized) 0.60% 0.0%
</TABLE>
During the six months ended June 30, 2000, the Company had net
recoveries of $463,000 compared to net charge-offs of $2,000 during the
comparable period in 1999. The Company attributes these results to (i) continued
recoveries of previously charged-off loans and (ii) a reduction in nonperforming
assets (both in dollar volume and as a percentage of the loan portfolio) as the
Bank continues to improve the quality of its assets.
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, 2000, totaled $10,304,000, an increase of $1,421,000
(16.0%) from the December 31, 1999 total of $8,883,000.
The Bank may draw on a $25.5 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, 2000, 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,
2000.
The Company's stockholders' equity increased $1,012,000 or 6.7%, during
the six months ended June 30, 2000, as earnings offset decreases in the equity
account attributable to accrued dividends and increases in accumulated other
comprehensive losses. The Company's accumulated other comprehensive losses
increased by $36,000 to $189,000 at June 30, 2000 from $153,000 at December 31,
1999 as a result of unrealized holding losses arising during the period due to
increases in interest rates. Retained earnings increased by $896,000 as the
result of the Company's earnings during the quarter which were partially offset
by accrued dividends. In addition, $152,000 was transferred to stockholders'
equity in consideration for shares to be issued under the Company's dividend
reinvestment plan in lieu of cash dividends.
<PAGE>
12
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, 2000, the Bank was in full compliance with these guidelines with a Tier
1 leverage ratio of 7.0%, a Tier 1 risk-based capital ratio of 7.33% and a total
risk-based capital ratio of 10.59%.
YEAR 2000
The Company did not experience any material disruptions due to the Year
2000 (Y2K) issue of computer systems and other equipment with embedded chips or
processors not being able to properly recognize and process date-sensitive
information after December 31, 1999, and the total cost of modifications to
become Y2K compliant did not materially exceed the Company's projections.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not applicable.
<PAGE>
13
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On May 11, 2000, the Company held its Annual Meeting of Stockholders.
The only matters submitted to the stockholders for a vote were the election of
four directors and the authorization of the Board of Directors to select an
outside auditing firm for the Company's fiscal year ending December 31, 2000.
The nominees submitted for election as directors were Charles L. Hein, Alan E.
Hahn, Shirley E. Boyer, and John I. Young.
At the Meeting, 736,291 shares were voted in favor of Messrs. Hein and
Hahn, 734,110 in favor of Ms. Boyer, and 734,740 in favor of Mr. Young, no more
than 2,181 shares were voted to withhold approval of any director. As a result,
all of the nominees were elected to serve as directors until the next annual
meeting of shareholders of the Company and until their successors are duly
elected and qualified. Directors not up for re-election and continuing in office
after the Meeting are: F. William Kuethe, Jr., Thomas Clocker, William N.
Scherer, Sr., Karen B. Thornwarth, John E. Demyan, Theodore L. Bertier, Jr., F.
W. Kuethe, III, and Mary Lou Wilcox.
At the Meeting, 738,578 shares were voted in favor of authorizing the
Board of Directors to select an outside auditing firm for the Company's fiscal
year ending December 31, 2000, 109 shares voted to withhold authorization, and
1,012 shares abstained.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit No.
3.1 Articles of Incorporation (incorporated by reference to Exhibit 3.1 to
Amendment No. 1 to the Registrant's Form 8-A filed December 27, 1999,
File No. 0-24047)
3.2 By-Laws (incorporated by reference to Exhibit 3.2 to the Registrant's
Annual Report on Form 10-K for the Fiscal Year Ended December 31,
1998, File No. 0-24047)
3.3 Articles Supplementary, dated November 16, 1999 (incorporated by
reference to Exhibit 3.3 to the Registrant's Current Report on Form
8-K filed December 8, 1999, File No. 0-24047)
4.1 Rights Agreement, dated as of February 13, 1998, between Glen Burnie
Bancorp and The Bank of Glen Burnie, as Rights Agent, as amended and
restated as of December 27, 1999 (incorporated by reference to Exhibit
4.1 to Amendment No. 1 to the Registrant's Form 8-A filed December 27,
1999, File No. 0-24047)
10.1 Glen Burnie Bancorp Director Stock Purchase Plan (incorporated by
reference to Exhibit 99.1 to Post-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form S-8, File No. 33-62280)
10.2 The Bank of Glen Burnie Employee Stock Purchase Plan (incorporated by
reference to Exhibit 99.1 to Post-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form S-8, File No. 333-46943)
10.3 Change-in-Control Severance Plan (incorporated by reference to Exhibit
10.7 to the Registrant's Annual Report on Form 10-K for the Fiscal
Year Ended December 31, 1997, File No. 0-24047)
10.4 The Bank of Glen Burnie Executive and Director Deferred Compensation
Plan (incorporated by reference to Exhibit 10.4 to the Registrant's
Annual Report on Form 10-K for the Fiscal Year Ended December 31,
1999, File No. 0-24047)
27 Financial Data Schedule
(b) Reports on Form 8-K:
None.
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14
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 14, 2000 By: /s/ F. William Kuethe, Jr.
---------------------------------------
F. William Kuethe, Jr.
President, Chief Executive Officer
By: /s/ John E. Porter
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John E. Porter
Chief Financial Officer
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