Glen Burnie Bancorp (“Bancorp”) (NASDAQ: GLBZ), the bank holding company for The Bank of Glen Burnie (“Bank”), announced today net income of $0.54 million, or $0.19 per basic and diluted common share for the three-month period ended September 30, 2018, as compared to net income of $0.41 million, or $0.15 per basic and diluted common share for the three-month period ended September 30, 2017.

Bancorp reported net income of $1.28 million, or $0.45 per basic and diluted common share for the nine-month period ended September 30, 2018, compared to $1.06 million, or $0.38 per basic and diluted common share for the same period in 2017.  Net loans grew by $23.7 million, or 8.81% at September 30, 2018 when compared to the same period of 2017.  At September 30, 2018, Bancorp had total assets of $411.4 million.  Bancorp, the oldest independent commercial bank in Anne Arundel County, will pay its 105th consecutive quarterly dividend on November 2, 2018.

"We are pleased to report a strong quarter that was highlighted by expansion of our net interest margin and net interest income reflecting outstanding credit quality, disciplined loan pricing, and a beneficial balance sheet structure.  Our third quarter results are consistent with our expectations and reflect year-over-year improvement in our profitability, driven by strong revenue growth,” stated John D. Long, President and CEO.  “Our net interest margin increased to 3.34% in the third quarter of 2018 compared with 3.10% in the same period of 2017.  The improved net interest margin exhibits a higher yield on average earning assets, primarily reflecting an increased yield on loans, which more than offset a higher cost of funds.  Our cost of funds continued to trend upwards in the third quarter, reflecting the continuing rising interest rate environment.  We believe that our current balance sheet structure positions our net interest income to benefit from any further Federal Open Market Committee tightening,” Mr. Long continued, “Our net income in the third quarter of 2018 increased 31.87% to $0.54 million compared with $0.41 million in the year-ago quarter.  We also made several changes during the third quarter to streamline our operations and we remain focused on controlling overhead costs.  Our sustained strength in core profitability, sound capital position, and healthy loan pipeline positions us to take advantage of future growth opportunities and finish the year strong.”

Highlights for the First Nine Months of 2018

Bancorp continued to grow organically in the third quarter of 2018 driven primarily by favorable net loan growth.  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 12.64% at September 30, 2018, as compared to 14.68% for the same period of 2017.

Return on average assets for the three-month period ended September 30, 2018 was 0.54%, as compared to 0.42% for the three-month period ended September 30, 2017.  Return on average equity for the three-month period ended September 30, 2018 was 6.50%, as compared to 4.82% for the three-month period ended September 30, 2017. 

The book value per share of Bancorp’s common stock was $11.86 at September 30, 2018, as compared to $12.38 per share at September 30, 2017.

At September 30, 2018, the Bank remained above all “well-capitalized” regulatory requirement levels.  The Bank’s tier 1 risk-based capital ratio was approximately 11.75% at September 30, 2018, as compared to 13.63% at September 30, 2017.  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 $411.4 million at September 30, 2018, an increase of $21.5 million or 5.51%, from $389.9 million at September 30, 2017.  Investment securities were $84.0 million at September 30, 2018, a decrease of $5.9 million or 6.53%, from $89.9 million at September 30, 2017.  Loans, net of deferred fees and costs, were $295.0 million at September 30, 2018, an increase of $23.5 million or 8.66%, from $271.5 million at September 30, 2017.  Bank owned life insurance decreased $1.7 million or 17.52% from September 30, 2017 to September 30, 2018 primarily due to the redemption of BOLI policies.  Other assets increased $0.7 million from September 30, 2017 to September 30, 2018 primarily due to the increase in fair value of pay-fixed interest rate swaps used to convert variable rate FHLB borrowing into fixed rate debt.

Total deposits were $336.8 million at September 30, 2018, an increase of $2.7 million or 0.82%, from $334.1 million at September 30, 2017.  Noninterest-bearing deposits were $107.9 million at September 30, 2018, an increase of $3.3 million or 3.20%, from $104.6 million at September 30, 2017.  Interest-bearing deposits were $228.9 million at September 30, 2018, a decrease of $0.6 million or 0.26%, from $229.5 million at September 30, 2017.  Total borrowings were $40.0 million at September 30, 2018, an increase of $20.0 million or 100.00%, from $20.0 million at September 30, 2017.

Stockholders’ equity was $33.3 million at September 30, 2018, a decrease of $1.3 million from $34.0 million at September 30, 2017.  The $1.4 million increase in accumulated other comprehensive loss associated with net unrealized losses on the available for sale bond portfolio, offset by unrealized gains on interest rate swap contracts primarily drove the decrease 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, represented 0.75% of total assets at September 30, 2018, as compared to 1.08% for the same period of 2017.

Review of Financial Results

For the three-month periods ended September 30, 2018 and 2017

Net income for the three-month period ended September 30, 2018 was $0.54 million, as compared to net income of $0.41 million for the three-month period ended September 30, 2017.

Net interest income for the three-month period ended September 30, 2018 totaled $3.30 million, as compared to $2.94 million for the three-month period ended September 30, 2017.  Average earning loan balances increased to $294 million for the three-month period ended September 30, 2018, as compared to $271 million for the same period of 2017.

Net interest margin for the three-month period ended September 30, 2018 was 3.34%, as compared to 3.10% for the same period of 2017.  Higher yields on interest-earning assets were the primary driver of year-over-year results, as the yield on interest-earning assets increased 0.28% from 3.63% to 3.91% and the cost of funds increased 0.05% from 0.55% to 0.60% for the three-month periods ending September 30, 2018 and 2017, respectively.

The provision for loan losses for the three-month period ended September 30, 2018 was $246,000, as compared to $78,000 for the same period of 2017.  The increase for the three-month period ended September 30, 2018 primarily reflects loan growth.  As a result, the allowance for loan losses was $2.46 million at September 30, 2018, representing 0.83% of total loans, as compared to $2.62 million, or 0.97% of total loans at September 30, 2017.

Noninterest income for the three-month period ended September 30, 2018 was $331,000, as compared to $368,000 for the three-month period ended September 30, 2017.  

For the three-month period ended September 30, 2018, noninterest expense was $2.76 million, as compared to $2.71 million for the three-month period ended September 30, 2017.  The primary contributors to the $0.05 million increase, when compared to the three-month period ended September 30, 2017 were increases in salary and employee benefits, legal, accounting and other professional fees, data processing and items processing service, offset by decreases in occupancy and equipment expenses, advertising and marketing related expenses and telephone costs.

For the nine-month periods ended September 30, 2018 and 2017

Net income for the nine-month period ended September 30, 2018 was $1.28 million, as compared to net income of $1.06 million for the nine-month period ended September 30, 2017.

Net interest income for the nine-month period ended September 30, 2018 totaled $9.35 million, as compared to $8.66 million for the nine-month period ended September 30, 2017.  Average earning loan balances increased to $283 million for the nine-month period ended September 30, 2018, as compared to $269 million for the same period of 2017.

Net interest margin for the nine-month period ended September 30, 2018 was 3.26%, as compared to 3.09% for the same period of 2017.  Higher yields on interest-earning assets were the primary drivers of year-over-year results, as the yield on interest-earning assets increased 0.17% from 3.62% to 3.79% and the cost of funds remained unchanged at 0.55% for the nine-month periods ending September 30, 2018 and 2017, respectively.

The provision for loan losses for the nine-month period ended September 30, 2018 was $601,000, as compared to $243,000 for the same period of 2017.  The increase for the nine-month period ended September 30, 2018 primarily reflects loan growth.  As a result, the allowance for loan losses was $2.46 million at September 30, 2018, representing 0.83% of total loans, as compared to $2.62 million, or 0.97% of total loans for the same period of 2017.

Noninterest income for the nine-month period ended September 30, 2018 was $1.20 million, as compared to $0.94 million for the nine-month period ended September 30, 2017.  The results for the first nine-month of 2018 include gains on redemptions of BOLI policies of $306,877.

For the nine-month period ended September 30, 2018, noninterest expense was $8.60 million, as compared to $8.10 million for the nine-month period ended September 30, 2017.  The primary contributors to the $0.43 million increase, when compared to the nine-month period ended September 30, 2017 were increases in salary and employee benefits, legal, accounting and other professional fees and loan collection costs, partially offset by decreases in advertising and marketing related expenses and telephone 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.

For further information contact:

Jeffrey D. Harris, Chief Financial Officer410-768-8883jdharris@bogb.net106 Padfield BlvdGlen Burnie, MD 21061

             
GLEN BURNIE BANCORP AND SUBSIDIARIES            
CONSOLIDATED BALANCE SHEETS            
(dollars in thousands)              
               
               
  September 30,   June 30,   December 31,   September 30,
  2018   2018   2017   2017
  (unaudited)   (unaudited)   (audited)   (unaudited)
ASSETS              
Cash and due from banks $ 5,282     $ 2,584     $ 2,610     $ 4,371  
Interest bearing deposits with banks and federal funds sold   10,208       5,498       9,995       7,126  
Total Cash and Cash Equivalents   15,490       8,082       12,605       11,497  
               
Investment securities available for sale, at fair value   84,029       87,314       89,349       89,903  
Restricted equity securities, at cost   2,073       1,443       1,232       1,228  
               
Loans, net of deferred fees and costs   294,981       289,408       271,612       271,463  
Less:  Allowance for loan losses   (2,455 )     (2,284 )     (2,589 )     (2,623 )
Loans, net   292,526       287,124       269,023       268,840  
               
Real estate acquired through foreclosure   705       114       114       114  
Premises and equipment, net   3,154       3,195       3,371       3,451  
Bank owned life insurance   7,818       7,780       8,713       9,479  
Deferred tax assets, net   2,863       2,713       2,429       2,847  
Accrued interest receivable   1,233       1,142       1,133       1,140  
Accrued taxes receivable   -       -       465       638  
Prepaid expenses   516       471       433       512  
Other assets   958       2,093       583       235  
Total Assets  $ 411,365     $ 401,471     $ 389,450     $ 389,884  
               
LIABILITIES              
Noninterest-bearing deposits $ 107,921     $ 108,414     $ 104,017     $ 104,571  
Interest-bearing deposits   228,926       233,393       230,221       229,534  
Total Deposits   336,847       341,807       334,238       334,105  
               
Short-term borrowings   40,000       25,000       20,000       20,000  
Defined pension liability   323       317       335       328  
Accrued Taxes Payable   102       28       -       -  
Accrued expenses and other liabilities   749       775       835       815  
Total Liabilities   378,021       367,927       355,408       355,248  
               
STOCKHOLDERS' EQUITY              
Common stock, par value $1, authorized 15,000,000 shares,  issued and outstanding 2,810,961, 2,807,819, 2,801,149, and 2,797,477 shares as of September 30, 2018, June 30, 2018, December 31, 2017, and September 30, 2017, respectively.   2,811       2,808       2,801       2,797  
Additional paid-in capital   10,368       10,335       10,267       10,233  
Retained earnings   21,936       21,778       21,605       21,935  
Accumulated other comprehensive loss   (1,771 )     (1,377 )     (631 )     (329 )
Total Stockholders' Equity   33,344       33,544       34,042       34,636  
Total Liabilities and Stockholders' Equity $ 411,365     $ 401,471     $ 389,450     $ 389,884  
               
     
GLEN BURNIE BANCORP AND SUBSIDIARIES    
CONSOLIDATED STATEMENTS OF INCOME    
(dollars in thousands, except per share amounts)    
(unaudited)                
                 
                 
      Three Months Ended September 30,     Nine Months Ended September 30,
    2018   2017   2018   2017
Interest income                
Interest and fees on loans   $ 3,269   $ 2,883   $ 9,100   $ 8,503
Interest and dividends on securities     526     498     1,585     1,523
Interest on deposits with banks and federal funds sold     67     53     165     115
Total Interest Income     3,862     3,434     10,850     10,141
                 
Interest expense                
Interest on deposits     362     324     997     984
Interest on short-term borrowings     198     142     506     309
Interest on long-term borrowings     -     33     -     185
Total Interest Expense     560     499     1,503     1,478
                 
Net Interest Income     3,302     2,935     9,347     8,663
Provision for loan losses     246     78     601     243
Net interest income after provision for loan losses     3,056     2,857     8,746     8,420
                 
Noninterest income                
Service charges on deposit accounts     59     72     187     208
Other fees and commissions     216     245     564     573
Gains on redemption of BOLI policies     -     -     308     1
Income on life insurance     41     51     130     151
Gains on sale of OREO     15     -     15     -
Other income     -     -     -     2
Total Noninterest Income     331     368     1,204     935
                 
Noninterest expenses                
Salary and employee benefits     1,710     1,579     5,080     4,615
Occupancy and equipment expenses     272     382     850     865
Legal, accounting and other professional fees     212     180     721     648
Data processing and item processing services     168     130     454     442
FDIC insurance costs     64     64     187     188
Advertising and marketing related expenses     16     38     65     110
Loan collection costs     32     25     153     73
Telephone costs     56     98     181     212
Other expenses     226     217     911     944
Total Noninterest Expenses     2,756     2,713     8,602     8,097
                 
Income before income taxes     631     512     1,348     1,258
Income tax expense     89     101     73     194
                 
Net income    $    542   $    411   $    1,275   $    1,064
                 
Basic and diluted net income per share of common stock    $    0.19   $    0.15   $    0.45   $    0.38
                 
         
GLEN BURNIE BANCORP AND SUBSIDIARIES        
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the nine months ended September 30, 2018 and 2017 (unaudited)     
(dollars in thousands)                  
                     
                     
                Accumulated    
                Other    
        Additional       Comprehensive   Total
    Common    Paid-in   Retained   (Loss)   Stockholders'
    Stock   Capital   Earnings   Income   Equity
Balance, December 31, 2016 $ 2,787   $ 10,130   $ 21,708     $ (810 )   $ 33,815  
                     
Net income   -     -     1,064       -       1,064  
Cash dividends, $0.30 per share   -     -     (837 )     -       (837 )
Dividends reinvested under dividend reinvestment plan   10     103     -       -       113  
Other comprehensive income   -     -     -       481       481  
Balance, September 30, 2017 $ 2,797   $ 10,233   $ 21,935     $ (329 )   $ 34,636  
                                     
                     
                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   -     -     1,275       -       1,275  
Cash dividends, $0.30 per share   -     -     (944 )     -       (944 )
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  
                                     
         
                 
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, 2018:                      
(unaudited)                      
Common Equity Tier 1 Capital $ 32,781 11.75 %   $ 12,551 4.50 %   $ 18,130 6.50 %
Total Risk-Based Capital $ 35,260 12.64 %   $ 22,313 8.00 %   $ 27,892 10.00 %
Tier 1 Risk-Based Capital $ 32,781 11.75 %   $ 16,735 6.00 %   $ 22,313 8.00 %
Tier 1 Leverage $ 32,781 8.08 %   $ 16,230 4.00 %   $ 20,287 5.00 %
                       
As of June 30, 2018:                      
(unaudited)                      
Common Equity Tier 1 Capital $ 33,335 11.94 %   $ 12,559 4.50 %   $ 18,140 6.50 %
Total Risk-Based Capital $ 35,662 12.78 %   $ 22,326 8.00 %   $ 27,908 10.00 %
Tier 1 Risk-Based Capital $ 33,335 11.94 %   $ 16,745 6.00 %   $ 22,326 8.00 %
Tier 1 Leverage $ 33,335 8.39 %   $ 15,883 4.00 %   $ 19,854 5.00 %
                       
As of December 31, 2017:                      
(audited)                      
Common Equity Tier 1 Capital $ 32,946 12.83 %   $ 11,553 4.50 %   $ 16,687 6.50 %
Total Risk-Based Capital $ 35,543 13.84 %   $ 20,538 8.00 %   $ 25,673 10.00 %
Tier 1 Risk-Based Capital $ 32,946 12.83 %   $ 15,404 6.00 %   $ 20,538 8.00 %
Tier 1 Leverage $ 32,928 8.43 %   $ 15,617 4.00 %   $ 19,521 5.00 %
                       
As of September 30, 2017:                      
(unaudited)                      
Common Equity Tier 1 Capital $ 34,064 13.63 %   $ 11,250 4.50 %   $ 16,251 6.50 %
Total Risk-Based Capital $ 36,699 14.68 %   $ 20,001 8.00 %   $ 25,001 10.00 %
Tier 1 Risk-Based Capital $ 34,064 13.63 %   $ 15,001 6.00 %   $ 20,001 8.00 %
Tier 1 Leverage $ 34,064 8.56 %   $ 15,919 4.00 %   $ 19,898 5.00 %
                       
               
GLEN BURNIE BANCORP AND SUBSIDIARIES              
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,
    2018   2018   2017   2018   2017   2017
    (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (audited)
                         
Financial Data                        
Assets   $ 411,365     $ 401,471     $ 389,884     $ 411,365     $ 389,884     $ 389,450  
Investment securities     84,029       87,314       89,903       84,029       89,903       89,349  
Loans, (net of deferred fees & costs)     294,981       289,408       271,463       294,981       271,463       271,612  
Allowance for loan losses     2,455       2,284       2,623       2,455       2,623       2,589  
Deposits     336,847       341,807       334,105       336,847       334,105       334,238  
Borrowings     40,000       25,000       20,000       40,000       20,000       20,000  
Stockholders' equity     33,344       33,544       34,636       33,344       34,636       34,042  
Net income     542       478       411       1,275       1,064       911  
                         
Average Balances                        
Assets   $ 407,660     $ 396,033     $ 393,877     $ 399,088     $ 392,837     $ 392,363  
Investment securities     88,611       91,290       90,028       90,783       92,151       91,634  
Loans, (net of deferred fees & costs)     293,949       281,104       270,973       283,006       269,333       269,600  
Deposits     338,412       335,479       334,739       336,128       335,970       335,805  
Borrowings     34,487       26,394       23,667       27,878       21,777       21,458  
Stockholders' equity     33,831       33,338       34,643       34,201       34,063       34,322  
                         
Performance Ratios                        
Annualized return on average assets     0.54 %     0.49 %     0.42 %     0.65 %     0.55 %     0.23 %
Annualized return on average equity     6.50 %     5.81 %     4.82 %     7.56 %     6.33 %     2.65 %
Net interest margin     3.34 %     3.21 %     3.10 %     3.26 %     3.09 %     3.12 %
Dividend payout ratio     52 %     59 %     59 %     66 %     75 %     123 %
Book value per share   $ 11.86     $ 11.95     $ 12.38     $ 11.86     $ 12.38     $ 12.15  
Basic and diluted net income per share   0.19       0.17       0.15       0.45       0.38       0.33  
Cash dividends declared per share     0.10       0.10       0.10       0.30       0.30       0.40  
Basic and diluted weighted average shares outstanding     2,809,834       2,806,599       2,796,099       2,806,341       2,792,544       2,794,381  
                         
Asset Quality Ratios                        
Allowance for loan losses to loans     0.83 %     0.79 %     0.97 %     0.83 %     0.97 %     0.95 %
Nonperforming loans to avg. loans     0.82 %     1.46 %     1.57 %     0.85 %     1.53 %     1.32 %
Allowance for loan losses to nonaccrual & 90+ past due loans     112.1 %     58.6 %     66.1 %     112.1 %     66.1 %     77.7 %
Net charge-offs annualize to avg. loans   0.10 %     0.87 %     0.08 %     1.04 %     0.15 %     0.09 %
                         
Capital Ratios                        
Common Equity Tier 1 Capital     11.75 %     11.94 %     13.63 %     11.75 %     13.63 %     12.83 %
Tier 1 Risk-based Capital Ratio     11.75 %     11.94 %     13.63 %     11.75 %     13.63 %     12.83 %
Leverage Ratio     8.08 %     8.39 %     8.56 %     8.08 %     8.56 %     8.43 %
Total Risk-Based Capital Ratio     12.64 %     12.78 %     14.68 %     12.64 %     14.68 %     13.84 %
                         

 

Glen Burnie Bancorp (NASDAQ:GLBZ)
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