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Glen Burnie Bancorp Announces First Quarter 2019 Results

GLEN BURNIE, Md., April 24, 2019 (GLOBE NEWSWIRE) -- Glen Burnie Bancorp (“Bancorp”) (GLBZ), the bank holding company for The Bank of Glen Burnie (“Bank”), announced today net income of $135,000, or $0.05 per basic and diluted common share for the three-month period ended March 31, 2019, as compared to net income of $255,000, or $0.09 per basic and diluted common share for the three-month period ended March 31, 2018.

Net loan balances at March 31, 2019 grew by $24.0 million, or 8.8%, as compared to March 31, 2018.  Bancorp had total assets of $393.1 million at March 31, 2019.  Bancorp, the oldest independent commercial bank in Anne Arundel County, will pay its 107th consecutive quarterly dividend on May 3, 2019.

“Net interest income continued to rise during the first quarter, driving a consistent core earnings expansion.  Net interest income in the first quarter of 2019 grew by $147,000 or 4.9%, as compared to the first quarter of last year, as the yield on our loan portfolio grew from 4.25% to 4.32%, and our funding costs increased by $118,000 or 26.1%, from $452,000 to $570,000,” stated John D. Long, President and CEO.  “Our strong fundamental performance was somewhat offset by significant continued investment in technology and infrastructure improvements that enable us to remain competitive in the rapidly changing technological environment.  These improvements allowed the Company to remain vigilant in its risk mitigation efforts, and continue to provide a high level of service to our valued customers.  We are encouraged by the progress of the last two years and are confident that these investments have created a foundation for sustainable growth in 2019 and beyond.  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 $187,000 or 51.9%, this quarter as compared to the first quarter of last year.  Headquartered in the dynamic Northern Anne Arundel County market, we believe the Bank is well positioned with sound growth, asset quality and capital levels, a widening 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 Three Months of 2019

Bancorp continued to grow organically in the first quarter of 2019 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 13.46% at March 31, 2019, as compared to 13.85% for the same period of 2018.

Return on average assets for the three-month period ended March 31, 2019 was 0.14%, as compared to 0.26% for the three-month period ended March 31, 2018.  Return on average equity for the three-month period ended March 31, 2019 was 1.59%, as compared to 3.06% for the three-month period ended March 31, 2018.  Lower gains on redemption of bank-owned life insurance policies (“BOLI”) and higher noninterest expenses primarily drove the lower returns.

The book value per share of Bancorp’s common stock was $12.23 at March 31, 2019, as compared to $11.83 per share at March 31, 2018.

At March 31, 2019, the Bank remained above all “well-capitalized” regulatory requirement levels.  The Bank’s tier 1 risk-based capital ratio was approximately 12.51% at March 31, 2019, as compared to 12.73% at March 31, 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 $393.1 million at March 31, 2019, an increase of $2.7 million or 0.69%, from $390.4 million at March 31, 2018.  Investment securities were $61.4 million at March 31, 2019, a decrease of $28.9 million or 32.0%, from $90.3 million at March 31, 2018.  The higher volume of loan originations during 2018 were primarily funded using the proceeds from the sale of securities.  Loans, net of deferred fees and costs, were $299.4 million at March 31, 2019, an increase of $23.7 million or 8.60%, from $275.7 million at March 31, 2018.  Real estate acquired through foreclosure was $0.7 million at March 31, 2019, an increase of $0.6 million from March 31, 2018 primarily due to the acquisition of a single property.  BOLI decreased $0.4 million or 4.7% from March 31, 2018 to March 31, 2019 primarily due to the redemption of BOLI policies.  Net deferred tax assets decreased $1.6 million or 56.61% and accrued taxes receivable increased $1.2 million from March 31, 2018 to March 31, 2019 primarily due to the elimination of the alternative minimum tax under the Tax Act. 

Total deposits were $331.6 million at March 31, 2019, a decrease of $4.6 million or 1.36%, from $336.2 million at March 31, 2018.  Interest-bearing deposits were $224.4 million at March 31, 2019, a decrease of $4.7 million or 2.07%, from $229.1 million at March 31, 2018.  Total borrowings were $25.0 million at March 31, 2019, an increase of $5.0 million or 25.0%, from $20.0 million at March 31, 2018.

Stockholders’ equity was $34.5 million at March 31, 2019, an increase of $1.3 million or 3.82%, from $33.2 million at March 31, 2018.  The decrease in accumulated other comprehensive loss associated with net unrealized losses on the available for sale bond portfolio, retained earnings and stock issuances under the dividend reinvestment program, offset by decreases in unrealized gains on interest rate swap contracts drove the 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 0.86% of total assets at March 31, 2019, as compared to 1.49% for the same period of 2018.  The reduction in nonaccrual loans offset by the increase in OREO drove the 0.63% decrease in nonperforming assets as percentage of total assets from March 31, 2018 to 2019.

Review of Financial Results

For the three-month periods ended March 31, 2019 and 2018

Net income for the three-month period ended March 31, 2019 was $135,000, as compared to $255,000 for the three-month period ended March 31, 2018.

Net interest income for the three-month period ended March 31, 2019 totaled $3.14 million, as compared to $2.99 million for the three-month period ended March 31, 2018.  Average loan balances increased $25.5 million or 9.32% to $299.5 million for the three-month period ended March 31, 2019, as compared to $274.0 million for the same period of 2018.

Net interest margin for the three-month period ended March 31, 2019 was 3.3%, as compared to 3.22% for the same period of 2018.  Higher average balances and yields on interest-earning assets were the primary driver of year-over-year results, as the average balance increased $9.2 million and the yield on interest-earning assets increased 0.19% from 3.71% to 3.9%.  These increases were offset by the higher cost of funds, which increased 0.12% from 0.51% to 0.63% for the three-month periods ending March 31, 2018 and 2019, respectively.

The provision for loan losses for the three-month period ended March 31, 2019 was $173,000, as compared to $360,000 for the same period of 2018.  The decrease for the three-month period ended March 31, 2019, when compared to the three-month period ended March 31, 2018 primarily reflects $294,000 lower required reserves offset by $59,000 higher net charge offs.  As a result, the allowance for loan losses was $2.61 million at March 31, 2019, representing 0.87% of total loans, as compared to $2.90 million, or 1.05% of total loans at March 31, 2018 and is consistent with our improved credit quality.

Noninterest income for the three-month period ended March 31, 2019 was $282,000, as compared to $486,000 for the three-month period ended March 31, 2019, a decrease of $204,000 or 41.96%.  $207,000 lower gains on the redemption of BOLI policies primarily drove the decrease.

For the three-month period ended March 31, 2019, noninterest expense was $3.08 million, as compared to $2.84 million for the three-month period ended March 31, 2018, an increase of $242,000 or 8.54%.  The primary contributors to the $242,000 million increase, when compared to the three-month period ended March 31, 2018 were increases in salary and employee benefits costs, data processing and item processing services, litigation settlement costs, OREO expenses, bank robbery loss and other insurance expenses offset by lower legal, accounting and other professional fees, 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.

For further information contact:

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

           
           
GLEN BURNIE BANCORP AND SUBSIDIARY          
CONSOLIDATED BALANCE SHEETS          
(dollars in thousands)          
           
           
  March 31,   March 31,   December 31,
    2019       2018       2018  
  (unaudited)   (unaudited)   (audited)
ASSETS                      
Cash and due from banks $ 2,341     $ 2,449     $ 2,605  
Interest bearing deposits with banks and federal funds sold   14,194       6,079       13,349  
Total Cash and Cash Equivalents   16,535       8,528       15,954  
                       
Investment securities available for sale, at fair value   61,420       90,329       81,572  
Restricted equity securities, at cost   1,439       1,231       2,481  
                       
Loans, net of deferred fees and costs   299,417       275,716       299,120  
Allowance for loan losses   (2,605 )     (2,899 )     (2,541 )
Loans, net   296,812       272,817       296,579  
                       
Real estate acquired through foreclosure   705       114       705  
Premises and equipment, net   3,901       3,271       3,106  
Bank owned life insurance   7,900       8,290       7,860  
Deferred tax assets, net   1,197       2,759       1,392  
Accrued interest receivable   1,110       1,182       1,198  
Accrued taxes receivable   1,221       -       1,177  
Prepaid expenses   515       554       466  
Other assets   304       1,295       556  
Total Assets  $    393,059     $    390,370     $    413,046  
                       
LIABILITIES                      
Noninterest-bearing deposits $ 107,249     $ 107,073     $ 101,369  
Interest-bearing deposits   224,364       229,097       221,084  
Total Deposits   331,613       336,170       322,453  
                       
Short-term borrowings   25,000       20,000       55,000  
Defined pension liability   298       341       285  
Accrued expenses and other liabilities   1,693       672       1,257  
Total Liabilities   358,604       357,183       378,995  
                       
STOCKHOLDERS' EQUITY                      
Common stock, par value $1, authorized 15,000,000 shares,  issued and outstanding 2,817,821, 2,804,456, and  2,814,157 shares as of March 31, 2019, March 31, 2018, and December 31, 2018, respectively.   2,818       2,804       2,814  
Additional paid-in capital   10,433       10,301       10,401  
Retained earnings   21,919       21,581       22,066  
Accumulated other comprehensive loss   (715 )     (1,499 )     (1,230 )
Total Stockholders' Equity   34,455       33,187       34,051  
Total Liabilities and Stockholders' Equity $    393,059     $    390,370     $    413,046  
                       

 

GLEN BURNIE BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share amounts)
         
         
      Three Months Ended  March 31,
    2019   2018
     (unaudited) 
   (unaudited) 
Interest income              
Interest and fees on loans   $ 3,189     $ 2,872
Interest and dividends on securities     400       524
Interest on deposits with banks and federal funds sold     120       48
Total Interest Income     3,709       3,444
               
Interest expense              
Interest on deposits     332       309
Interest on short-term borrowings     238       143
Total Interest Expense     570       452
               
Net Interest Income     3,139       2,992
Provision for loan losses     173       360
Net interest income after provision for loan losses     2,966       2,632
               
Noninterest income              
Service charges on deposit accounts     61       67
Other fees and commissions     178       168
Gains on redemption of BOLI policies     -       207
Gain on securities sold     3       -
Income on life insurance     40       44
Total Noninterest Income     282       486
               
Noninterest expenses              
Salary and employee benefits     1,770       1,721
Occupancy and equipment expenses     314       305
Legal, accounting and other professional fees     231       245
Data processing and item processing services     176       139
FDIC insurance costs     56       58
Advertising and marketing related expenses     27       17
Loan collection costs     13       41
Telephone costs     66       57
Other expenses     424       252
Total Noninterest Expenses     3,077       2,835
               
Income before income taxes     171       283
Income tax expense     (36 )     28
               
Net income    $    135     $    255
               
Basic and diluted net income per common share    $    0.05     $    0.09
               
               

 

GLEN BURNIE BANCORP AND SUBSIDIARY        
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the three months ended March, 2019 and 2018 (unaudited)     
(dollars in thousands)                  
                     
                     
                Accumulated    
                Other    
        Additional       Comprehensive   Total
    Common    Paid-in   Retained   (Loss)   Stockholders'
    Stock   Capital   Earnings   Income   Equity
Balance, December 31, 2017 $ 2,801   $ 10,267   $ 21,605     $ (631 )   $ 34,042  
                                     
Net income   -     -     255       -       255  
Cash dividends, $0.10 per share   -     -     (279 )     -       (279 )
Dividends reinvested under                                  
dividend reinvestment plan   3     34     -       -       37  
Other comprehensive income   -     -     -       (868 )     (868 )
Balance, March 31, 2018 $ 2,804   $ 10,301   $ 21,581     $ (1,499 )   $ 33,187  
     
                Accumulated    
                Other    
        Additional       Comprehensive   Total
    Common    Paid-in   Retained   (Loss)   Stockholders'
    Stock   Capital   Earnings   Income   Equity
Balance, December 31, 2018 $ 2,814   $ 10,401   $ 22,066     $ (1,230 )   $ 34,051  
                                     
Net income   -     -     135       -       135  
Cash dividends, $0.10 per share   -     -     (282 )     -       (282 )
Dividends reinvested under                                  
dividend reinvestment plan   4     32     -       -       36  
Other comprehensive income   -     -     -       515       515  
Balance, March 31, 2019 $ 2,818   $ 10,433   $ 21,919     $ (715 )   $ 34,455  
 

 

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 March 31, 2019:                      
(unaudited)                      
Common Equity Tier 1 Capital $ 34,681 12.51 %   $ 12,472 4.50 %   $ 18,014 6.50 %
Total Risk-Based Capital $ 37,311 13.46 %   $ 22,172 8.00 %   $ 27,715 10.00 %
Tier 1 Risk-Based Capital $ 34,681 12.51 %   $ 16,629 6.00 %   $ 22,172 8.00 %
Tier 1 Leverage $ 34,681 8.68 %   $ 15,983 4.00 %   $ 19,978 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 March 31, 2018:                      
(unaudited)                      
Common Equity Tier 1 Capital $ 33,132 12.73 %   $ 11,712 4.50 %   $ 16,917 6.50 %
Total Risk-Based Capital $ 36,047 13.85 %   $ 20,822 8.00 %   $ 26,027 10.00 %
Tier 1 Risk-Based Capital $ 33,132 12.73 %   $ 15,616 6.00 %   $ 20,822 8.00 %
Tier 1 Leverage $ 33,126 8.40 %   $ 15,774 4.00 %   $ 19,718 5.00 %
                       
                       

 

GLEN BURNIE BANCORP AND SUBSIDIARY      
SELECTED FINANCIAL DATA      
(dollars in thousands, except per share amounts)  
             
                 
    Three Months Ended   Year Ended
    March 31,    December 31,    March 31,    December 31, 
      2019       2018       2018       2018  
    (unaudited)   (unaudited)   (unaudited)   (audited)
                 
Financial Data                                
Assets   $ 393,059     $ 413,046     $ 390,370     $ 413,046  
Investment securities     61,420       81,572       90,329       81,572  
Loans, (net of deferred fees & costs)     299,417       299,120       275,716       299,120  
Allowance for loan losses     2,605       2,541       2,899       2,541  
Deposits     331,613       322,453       336,170       322,453  
Borrowings     25,000       55,000       20,000       55,000  
Stockholders' equity     34,455       34,051       33,187       34,051  
Net income     135       307       255       1,583  
                                 
Average Balances                                
Assets   $ 400,064     $ 408,958     $ 391,832     $ 400,930  
Investment securities     69,939       85,055       92,449       89,351  
Loans, (net of deferred fees & costs)     299,506       297,791       273,964       286,702  
Deposits     323,283       332,284       334,492       335,167  
Borrowings     40,643       42,748       22,752       31,595  
Stockholders' equity     34,346       32,580       33,817       33,392  
                                 
Performance Ratios                                
Annualized return on average assets     0.14 %     0.30 %     0.26 %     0.39 %
Annualized return on average equity     1.59 %     3.74 %     3.06 %     4.74 %
Net interest margin     3.30 %     3.26 %     3.22 %     3.26 %
Dividend payout ratio     209 %     91 %     109 %     71 %
Book value per share   $ 12.23     $ 12.10     $ 11.83     $ 12.10  
Basic and diluted net income per share   0.05       0.11       0.09       0.56  
Cash dividends declared per share     0.10       0.10       0.10       0.40  
Basic and diluted weighted average shares outstanding     2,816,518       2,813,045       2,802,509       2,808,031  
                                 
Asset Quality Ratios                                
Allowance for loan losses to loans     0.87 %     0.85 %     1.05 %     0.85 %
Nonperforming loans to avg. loans     0.90 %     0.73 %     2.09 %     0.76 %
Allowance for loan losses to nonaccrual & 90+ past due loans     104.7 %     128.7 %     52.7 %     128.7 %
Net charge-offs annualize to avg. loans   0.27 %     0.23 %     0.07 %     0.32 %
                                 
Capital Ratios                                
Common Equity Tier 1 Capital     12.51 %     12.27 %     12.73 %     12.27 %
Tier 1 Risk-based Capital Ratio     12.51 %     12.27 %     12.73 %     12.27 %
Leverage Ratio     8.68 %     8.52 %     8.40 %     8.52 %
Total Risk-Based Capital Ratio     13.46 %     13.18 %     13.85 %     13.18 %