GLEN BURNIE, Md., Nov. 01, 2019 (GLOBE NEWSWIRE) -- Glen Burnie Bancorp (“Bancorp”) (NASDAQ: GLBZ), the bank holding company for The Bank of Glen Burnie (“Bank”), announced today net income of $606,000, or $0.21 per basic and diluted common share for the three-month period ended September 30, 2019, as compared to net income of $439,000, or $0.16 per basic and diluted common share for the three-month period ended September 30, 2018.

Bancorp reported net income of $1,060,000, or $0.38 per basic and diluted common share for the nine-month period ended September 30, 2019, compared to $1,172,000, or $0.42 per basic and diluted common share for the same period in 2018.  At September 30, 2019, Bancorp had total assets of $383.4 million.  Bancorp, the oldest independent commercial bank in Anne Arundel County, will pay its 109th consecutive quarterly dividend on November 1, 2019.

“We are pleased with our performance during the third quarter and believe we are well positioned to take advantage of opportunities in our market area while serving our customer base despite the challenging economic and competitive environment,” stated John D. Long, President and CEO.  “We continue to invest in technology and infrastructure improvements that enable us to remain competitive in the rapidly changing technological environment.  Our strong fundamental performance was somewhat offset by the cost of these investments.  However, we maintained our relentless focus on expense reduction in other areas as we work to drive efficiencies through the Bank and improve our profitability while delivering the outstanding customer service that differentiates our Bank in our local markets.”

“Looking forward, we continue to seek opportunities to further reduce our cost structure as we work to achieve an efficiency ratio more in-line with our peers.  In addition, a favorable credit environment combined with our outstanding credit quality, disciplined loan pricing and a beneficial balance sheet structure, allowed us to reduce the provision for loan losses by $385,000 or 156.6%, for the three-month period ended September 30, 2019 as compared to the same period last year.  Headquartered in the dynamic Northern Anne Arundel County market, we believe our Bank is well positioned with excellent asset quality and capital levels, a stable net interest margin, and an experienced and seasoned executive team.  We remain deeply committed to serving the financial needs of the community through the development of new loan and deposit products.”

Highlights for the First Nine Months of 2019

Bancorp focused on organic growth opportunities in the first nine months of 2019, as average loan balances increased $11.0 million or 3.9%, as compared to the same period in 2018, and the pace of loan originations slowed.  Bancorp has strong liquidity and capital positions that provide ample capacity for future growth, along with the Bank’s total regulatory capital to risk weighted assets of 13.18% at September 30, 2019, as compared to 12.86% for the same period of 2018.

Return on average assets for the three-month period ended September 30, 2019 was 0.63%, as compared to 0.43% for the three-month period ended September 30, 2018.  Return on average equity for the three-month period ended September 30, 2019 was 6.77%, as compared to 5.04% for the three-month period ended September 30, 2018.  Lower provision for loan losses offset by lower net interest income and higher income tax expense primarily drove higher returns for the three-month period ended September 30, 2019.

The book value per share of Bancorp’s common stock was $12.52 at September 30, 2019, as compared to $11.86 per share at September 30, 2018.

At September 30, 2019, the Bank remained above all “well-capitalized” regulatory requirement levels.  The Bank’s tier 1 risk-based capital ratio was approximately 12.36% at September 30, 2019, as compared to 11.98% at September 30, 2018.  Liquidity remained strong due to managed cash and cash equivalents, borrowing lines with the FHLB of Atlanta, the Federal Reserve and correspondent banks, and the size and composition of the bond portfolio.

Balance Sheet Review

Total assets were $383.4 million at September 30, 2019, a decrease of $28.0 million or 6.8%, from $411.4 million at September 30, 2018.  Investment securities were $64.8 million at September 30, 2019, a decrease of $19.2 million or 22.9%, from $84.0 million at September 30, 2018.  Proceeds from the Bank’s sale of investment securities in 2019 were used to offset the decrease in deposits and borrowings (see below), and fund the Bank’s increase in loan originations during 2018.  Loans, net of deferred fees and costs, were $283.9 million at September 30, 2019, a decrease of $11.1 million or 3.8%, from $295.0 million at September 30, 2018.

Net deferred tax assets decreased $1.9 million and accrued taxes receivable increased $1.0 million from September 30, 2018 to September 30, 2019 resulting from a reduction in tax accruals related to sequestration of the refundable portion of our alternative minimum tax (AMT) credit carryforward.  On January 14, 2019, the IRS clarified that refundable AMT credits under Section 53(e) of the Internal Revenue Code are not subject to sequestration for taxable years beginning after December 31, 2017.  Therefore, the full amount of the AMT credit carryover is expected to be refunded to the Company.

Other assets decreased $0.7 million due to the $0.7 million decrease in the fair value of swap derivative positions.

Total deposits were $325.3 million at September 30, 2019, a decrease of $11.5 million or 3.4%, from $336.8 million at September 30, 2018.  Interest-bearing deposits were $213.8 million at September 30, 2019, a decrease of $15.1 million or 6.6%, from $228.9 million at September 30, 2018.  Total borrowings were $20.0 million at September 30, 2019, a decrease of $20.0 million or 50.0%, from $40.0 million at September 30, 2018.

Stockholders’ equity was $35.37 million at September 30, 2019, an increase of $2.03 million or 6.1%, from $33.34 million at September 30, 2018.  The decrease in accumulated other comprehensive loss associated with net unrealized losses on the available for sale bond portfolio and increase in retained earnings and stock issuances under the dividend reinvestment program, offset by an increase in unrealized losses on interest rate swap contracts drove the overall increase in stockholders’ equity.

Nonperforming assets, which consist of nonaccrual loans, troubled debt restructurings, accruing loans past due 90 days or more, and other real estate owned (“OREO”), represented 1.34% of total assets at September 30, 2019, as compared to 0.75% for the same period of 2018.  The increase in nonaccrual loans drove the 0.59% increase in nonperforming assets as percentage of total assets from September 30, 2018 to September 30, 2019.

Review of Financial Results

For the three-month periods ended September 30, 2019 and 2018

Net income for the three-month period ended September 30, 2019 was $606,000, as compared to $439,000 for the three-month period ended September 30, 2018.

Net interest income for the three-month period ended September 30, 2019 totaled $3.1 million, as compared to $3.3 million for the three-month period ended September 30, 2018.  Average loan balances decreased $7.0 million or 2.38% to $286.9 million for the three-month period ended September 30, 2019, as compared to $293.9 million for the same period of 2018.  Average balances on interest-bearing deposits and investments decreased $21.2 million or 21.7%, to $76.6 million for the three-month period ended September 30, 2019, as compared to $97.8 million for the same period of 2018.

Net interest margin for the three-month period ended September 30, 2019 was 3.43%, as compared to 3.34% for the same period of 2018.  Lower average balances and interest rates on borrowed funds primarily drove year-over-year results.  The average balance on borrowed funds decreased $14.5 million while the yield decreased 0.09% from 2.28% to 2.19%, when comparing the three-month periods ending September 30, 2018 and 2019, respectively. 

The provision for loan losses for the three-month period ended September 30, 2019 was a negative provision of $139,000, as compared to a provision of $246,000 for the same period of 2018.  The decrease was driven primarily by $437,000 of lower net charge offs.  As a result, the allowance for loan losses was $2.31 million at September 30, 2019, representing 0.81% of total loans, as compared to $2.46 million, or 0.83% of total loans at September 30, 2018 and is consistent with the improved credit quality of our loan portfolio.

Noninterest income for the three-month period ended September 30, 2019 was $391,000, as compared to $331,000 for the three-month period ended September 30, 2018, an increase of $60,000 or 18.1%.  Higher ATM interchange fees associated with seasonal business drove the quarter-over-quarter increase.

For the three-month period ended September 30, 2019, noninterest expense was $2,856,000, as compared to $2,859,000 for the three-month period ended September 30, 2018, a decrease of $3,000 or 0.10%.  The primary contributors to the $3,000 decrease, when compared to the three-month period ended September 30, 2018 were decreases in salary and employee benefits cost, data processing and item processing services and FDIC insurance costs, offset by increases in occupancy and equipment expenses including investments in technology and infrastructure improvements and legal, accounting and other professional fees.

For the nine-month periods ended September 30, 2019 and 2018

Net income for the nine-month period ended September 30, 2019 was $1,060,000, as compared to net income of $1,172,000 for the nine-month period ended September 30, 2018.

Net interest income for the nine-month period ended September 30, 2019 totaled $9.41 million, as compared to $9.35 million for the nine-month period ended September 30, 2018.  Average loan balances increased $11.0 million or 3.9%, to $294.0 million for the nine-month period ended September 30, 2019, as compared to $283.0 million for the same period of 2018.  Average balances on interest-bearing deposits and investments decreased $22.1 million or 22.0%, to $78.1 million for the nine-month period ended September 30, 2019, as compared to $100.2 million for the same period of 2018.

Net interest margin for the nine-month period ended September 30, 2019 was 3.38%, as compared to 3.26% for the same period of 2018.  Higher yields on interest-earning assets offset by higher cost of funds were the primary drivers of year-over-year results, as the yield on interest-earning assets increased 0.12% from 3.79% to 3.91% and the cost of funds increased 0.01% from 0.55% to 0.56% for the nine-month periods ending September 30, 2018 and 2019, respectively.

The provision for loan losses for the nine-month period ended September 30, 2019 was $65,000, as compared to $601,000 for the same period of 2018.  The decrease for the nine-month period ended September 30, 2019 as compared to the same period in 2018 primarily reflects lower net charge offs. 

Noninterest income for the nine-month period ended September 30, 2019 was $955,000, as compared to $1,204,000 for the nine-month period ended September 30, 2018.  The results for the first nine-months of 2018 include gains on redemptions of BOLI policies of $308,000.

For the nine-month period ended September 30, 2019, noninterest expense was $8.9 million, as compared to $8.7 million for the nine-month period ended September 30, 2018.  The primary contributors to the $0.2 million increase, when compared to the nine-month period ended September 30, 2018 were increases in salary and employee benefits costs, occupancy and equipment expenses, legal, accounting and other professional fees, litigation settlement costs, and bank robbery and fraud losses, partially offset by decreases in data processing and item processing services, FDIC insurance costs and loan collection costs.

Glen Burnie Bancorp Information

Glen Burnie Bancorp is a bank holding company headquartered in Glen Burnie, Maryland.  Founded in 1949, The Bank of Glen Burnie® is a locally-owned community bank with 8 branch offices serving Anne Arundel County.  The Bank is engaged in the commercial and retail banking business including the acceptance of demand and time deposits, and the origination of loans to individuals, associations, partnerships and corporations.  The Bank’s real estate financing consists of residential first and second mortgage loans, home equity lines of credit and commercial mortgage loans.  The Bank also originates automobile loans through arrangements with local automobile dealers.  Additional information is available at www.thebankofglenburnie.com.

Forward-Looking Statements

The statements contained herein that are not historical financial information, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Such statements are subject to certain risks and uncertainties, which could cause the company’s actual results in the future to differ materially from its historical results and those presently anticipated or projected.  These statements are evidenced by terms such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions.  Although these statements reflect management’s good faith beliefs and projections, they are not guarantees of future performance and they may not prove true.  For a more complete discussion of these and other risk factors, please see the company’s reports filed with the Securities and Exchange Commission.

GLEN BURNIE BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
	September 30,				June 30,				December 31,				September 30,
	2019				2019				2018				2018
	(unaudited)				(unaudited)				(audited)				(unaudited)
ASSETS
Cash and due from banks	$	3,678			$	2,373			$	2,605			$	5,282
Interest bearing deposits with banks and federal funds sold		15,893				7,565				13,349				10,208
Cash and Cash Equivalents		19,571				9,938				15,954				15,490
Investment securities available for sale, at fair value		64,817				61,213				81,572				84,029
Restricted equity securities, at cost		1,225				1,227				2,481				2,073
Loans, net of deferred fees and costs		283,889				291,237				299,120				294,981
Less: Allowance for loan losses		(2,307	)			(2,459	)			(2,541	)			(2,455	)
Loans, net		281,582				288,778				296,579				292,526
Real estate acquired through foreclosure		705				705				705				705
Premises and equipment, net		3,820				3,840				3,106				3,154
Bank owned life insurance		7,982				7,940				7,860				7,818
Deferred tax assets, net		1,013				1,059				1,392				2,863
Accrued interest receivable		976				992				1,198				1,233
Accrued taxes receivable		982				1,194				1,177				-
Prepaid expenses		557				491				466				516
Other assets		208				236				556				958
Total Assets	$	383,438			$	377,613			$	413,046			$	411,365
LIABILITIES
Noninterest-bearing deposits	$	111,453			$	107,132			$	101,369			$	107,921
Interest-bearing deposits		213,813				213,046				221,084				228,926
Total Deposits		325,266				320,178				322,453				336,847
Short-term borrowings		20,000				20,000				55,000				40,000
Defined pension liability		311				304				285				323
Accrued Taxes Payable		-				-				-				102
Accrued expenses and other liabilities		2,493				2,241				1,257				749
Total Liabilities		348,070				342,723				378,995				378,021
STOCKHOLDERS' EQUITY
Common stock, par value $1, authorized 15,000,000 shares, issued and outstanding 2,824,412, 2,821,230, 2,814,157, and 2,810,961 shares as of September 30, 2019, June 30, 2019, December 31, 2018, and September 30, 2018, respectively.		2,824				2,821				2,814				2,811
Additional paid-in capital		10,495				10,464				10,401				10,368
Retained earnings		22,280				21,957				22,066				21,936
Accumulated other comprehensive loss		(231	)			(352	)			(1,230	)			(1,771	)
Total Stockholders' Equity		35,368				34,890				34,051				33,344
Total Liabilities and Stockholders' Equity	$	383,438			$	377,613			$	413,046			$	411,365

 

GLEN BURNIE BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share amounts)
(unaudited)
		Three Months Ended September 30,							Nine Months Ended September 30,
		2019				2018			2019			2018
Interest income
Interest and fees on loans		$	3,176			$	3,269		$	9,543		$	9,100
Interest and dividends on securities			326				526			1,061			1,585
Interest on deposits with banks and federal funds sold			88				67			270			165
Total Interest Income			3,590				3,862			10,874			10,850
Interest expense
Interest on deposits			336				362			1,001			997
Interest on short-term borrowings			110				198			465			506
Total Interest Expense			446				560			1,466			1,503
Net Interest Income			3,144				3,302			9,408			9,347
Provision for loan losses			(139	)			246			65			601
Net interest income after provision for loan losses			3,283				3,056			9,343			8,746
Noninterest income
Service charges on deposit accounts			62				59			187			187
Other fees and commissions			287				216			643			564
Gains on redemption of BOLI policies			-				-			-			308
Gain on securities sold			-				-			3			-
Income on life insurance			42				41			122			130
Gain on sale of OREO			-				15			-			15
Total Noninterest Income			391				331			955			1,204
Noninterest expenses
Salary and employee benefits			1,685				1,710			5,140			5,080
Occupancy and equipment expenses			340				272			1,040			850
Legal, accounting and other professional fees			259				212			794			721
Data processing and item processing services			109				168			328			454
FDIC insurance costs			-				64			116			187
Advertising and marketing related expenses			27				16			79			65
Loan collection costs			22				32			62			153
Telephone costs			62				56			183			181
Other expenses			352				329			1,181			1,014
Total Noninterest Expenses			2,856				2,859			8,923			8,705
Income before income taxes			818				528			1,375			1,245
Income tax expense			212				89			315			73
Net income		$	606			$	439		$	1,060		$	1,172
Basic and diluted net income per share of common stock		$	0.21			$	0.16		$	0.38		$	0.42

GLEN BURNIE BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the nine months ended September 30, 2019 and 2018 (unaudited)
(dollars in thousands)
												Accumulated
					Additional							Other				Total
		Common			Paid-in			Retained				Comprehensive				Stockholders'
		Stock			Capital			Earnings				(Loss)				Equity
Balance, December 31, 2017		$	2,801		$	10,267		$	21,605			$	(631	)		$	34,042
Net income			-			-			1,172				-				1,172
Cash dividends, $0.30 per share			-			-			(841	)			-				(841	)
Dividends reinvested under dividend reinvestment plan			10			101			-				-				111
Other comprehensive loss			-			-			-				(1,140	)			(1,140	)
Balance, September 30, 2018		$	2,811		$	10,368		$	21,936			$	(1,771	)		$	33,344
												Accumulated
					Additional							Other				Total
		Common			Paid-in			Retained				Comprehensive				Stockholders'
		Stock			Capital			Earnings				(Loss)/Income				Equity
Balance, December 31, 2018		$	2,814		$	10,401		$	22,066			$	(1,230	)		$	34,051
Net income			-			-			1,060				-				1,060
Cash dividends, $0.30 per share			-			-			(846	)			-				(846	)
Dividends reinvested under dividend reinvestment plan			10			94			-				-				104
Other comprehensive income			-			-			-				999				999
Balance, September 30, 2019		$	2,824		$	10,495		$	22,280			$	(231	)		$	35,368

 

THE BANK OF GLEN BURNIE
CAPITAL RATIOS
(dollars in thousands)
											To Be Well
											Capitalized Under
						To Be Considered					Prompt Corrective
						Adequately Capitalized					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of September 30, 2019:
(unaudited)
Common Equity Tier 1 Capital	$	35,216	12.36	%		$	12,822	4.50	%		$	18,520	6.50	%
Total Risk-Based Capital	$	37,561	13.18	%		$	22,794	8.00	%		$	28,493	10.00	%
Tier 1 Risk-Based Capital	$	35,216	12.36	%		$	17,096	6.00	%		$	22,794	8.00	%
Tier 1 Leverage	$	35,216	9.26	%		$	15,215	4.00	%		$	19,019	5.00	%
As of June 30, 2019:
(unaudited)
Common Equity Tier 1 Capital	$	34,864	12.05	%		$	13,015	4.50	%		$	18,799	6.50	%
Total Risk-Based Capital	$	37,335	12.91	%		$	23,137	8.00	%		$	28,922	10.00	%
Tier 1 Risk-Based Capital	$	34,864	12.05	%		$	17,353	6.00	%		$	23,137	8.00	%
Tier 1 Leverage	$	34,864	9.12	%		$	15,287	4.00	%		$	19,109	5.00	%
As of December 31, 2018:
(audited)
Common Equity Tier 1 Capital	$	34,778	12.27	%		$	12,757	4.50	%		$	18,427	6.50	%
Total Risk-Based Capital	$	37,354	13.18	%		$	22,679	8.00	%		$	28,349	10.00	%
Tier 1 Risk-Based Capital	$	34,778	12.27	%		$	17,009	6.00	%		$	22,679	8.00	%
Tier 1 Leverage	$	34,778	8.52	%		$	16,330	4.00	%		$	20,413	5.00	%
As of September 30, 2018:
(unaudited)
Common Equity Tier 1 Capital	$	33,499	11.98	%		$	12,583	4.50	%		$	18,175	6.50	%
Total Risk-Based Capital	$	35,960	12.86	%		$	22,370	8.00	%		$	27,962	10.00	%
Tier 1 Risk-Based Capital	$	33,499	11.98	%		$	16,777	6.00	%		$	22,370	8.00	%
Tier 1 Leverage	$	33,474	8.25	%		$	16,230	4.00	%		$	20,287	5.00	%

 

GLEN BURNIE BANCORP AND SUBSIDIARY
SELECTED FINANCIAL DATA
(dollars in thousands, except per share amounts)
	Three Months Ended												Nine Months Ended								Year Ended
	September 30,				June 30,				September 30,				September 30,				September 30,				December 31,
	2019				2019				2018				2019				2018				2018
	(unaudited)				(unaudited)				(unaudited)				(unaudited)				(unaudited)				(audited)
Financial Data
Assets	$	383,438			$	377,613			$	411,365			$	383,438			$	411,365			$	413,046
Investment securities		64,817				61,213				84,029				64,817				84,029				81,572
Loans, (net of deferred fees & costs)		283,889				291,237				294,981				283,889				294,981				299,120
Allowance for loan losses		2,307				2,459				2,455				2,307				2,455				2,541
Deposits		325,266				320,178				336,847				325,266				336,847				322,453
Borrowings		20,000				20,000				40,000				20,000				40,000				55,000
Stockholders' equity		35,368				34,890				33,344				35,368				33,344				34,051
Net income		606				319				439				1,060				1,172				1,583
Average Balances
Assets	$	380,852			$	382,659			$	408,382			$	387,886			$	398,984			$	401,494
Investment securities		61,456				61,621				88,611				64,338				90,783				89,351
Loans, (net of deferred fees & costs)		286,944				295,425				293,949				293,958				283,006				286,702
Deposits		322,893				325,036				338,412				323,737				336,128				335,167
Borrowings		20,000				20,789				34,487				27,323				27,878				31,595
Stockholders' equity		35,489				34,965				34,553				34,938				34,096				33,777
Performance Ratios
Annualized return on average assets		0.63	%			0.33	%			0.43	%			0.37	%			0.39	%			0.39	%
Annualized return on average equity		6.77	%			3.66	%			5.04	%			4.06	%			4.60	%			4.69	%
Net interest margin		3.43	%			3.41	%			3.34	%			3.38	%			3.26	%			3.26	%
Dividend payout ratio		47	%			88	%			64	%			80	%			72	%			71	%
Book value per share	$	12.52			$	12.37			$	11.86			$	12.52			$	11.86			$	12.10
Basic and diluted net income per share		0.21				0.11				0.16				0.38				0.42				0.56
Cash dividends declared per share		0.10				0.10				0.10				0.30				0.30				0.40
Basic and diluted weighted average shares outstanding		2,823,271				2,819,994				2,809,834				2,819,952				2,806,341				2,808,031
Asset Quality Ratios
Allowance for loan losses to loans		0.81	%			0.84	%			0.83	%			0.81	%			0.83	%			0.85	%
Nonperforming loans to avg. loans		1.55	%			1.60	%			0.82	%			1.51	%			0.85	%			0.76	%
Allowance for loan losses to nonaccrual & 90+ past due loans		54.3	%			54.0	%			112.1	%			54.3	%			112.1	%			128.7	%
Net charge-offs annualize to avg. loans		0.02	%			0.24	%			0.10	%			0.14	%			0.35	%			0.32	%
Capital Ratios
Common Equity Tier 1 Capital		12.36	%			12.05	%			11.98	%			12.36	%			11.98	%			12.27	%
Tier 1 Risk-based Capital Ratio		12.36	%			12.05	%			11.98	%			12.36	%			11.98	%			12.27	%
Leverage Ratio		9.26	%			9.12	%			8.25	%			9.26	%			8.25	%			8.52	%
Total Risk-Based Capital Ratio		13.18	%			12.91	%			12.86	%			13.18	%			12.86	%			13.18	%

 

For further information contact:

Jeffrey D. Harris, Chief Financial Officer
410-768-8883
jdharris@bogb.net
106 Padfield Blvd
Glen Burnie, MD 21061