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Glen Burnie Bancorp Announces First Quarter 2018 Results

GLEN BURNIE, Md., April 26, 2018 -- Glen Burnie Bancorp (“Bancorp”) (NASDAQ:GLBZ), the bank holding company for The Bank of Glen Burnie (“Bank”), announced today net income of $0.26 million, or $0.09 per basic and diluted common share for the three-month period ended March 31, 2018, as compared to net income of $0.32 million, or $0.10 per basic and diluted common share for the three-month period ended March 31, 2017.

For the three-month period ended March 31, 2018, net loans grew by $5.7 million, or 2.1%, as compared to March 31, 2017.  At March 31, 2018, Bancorp had total assets of $390.4 million.  Bancorp, the oldest independent commercial bank in Anne Arundel County, will pay its 103rd consecutive quarterly dividend on May 4, 2018.

"By continuing our fiscal 2017 transformative accomplishments into the first quarter of 2018, we are confident that our momentum will drive our results for the remainder of 2018 and beyond,” said John D. Long, President and CEO.  “Technology advancements that support our loan origination team contributed to a strong organic loan growth rate of 2.1% when compared to the same period in 2017.  We continued to make investments in technology systems during the first quarter that allow us to remain competitive in the rapidly changing technological environment.  These improvements allow the Company to remain vigilant in its risk mitigation efforts, and to continue providing a high level of service to our valued customers.  Net interest income continued to rise during the first quarter, driving a consistent core earnings expansion.  Net interest income grew by $160,000 or 5.7%, this quarter compared to the first quarter of last year, as the yield on our loan portfolio grew from 4.21% to 4.25%, and our funding costs declined by $39,000 or 7.9%, from $491,000 to $452,000.  The overall credit environment remained favorable, although a single impaired loan led management to increase the allowance for loan losses to 1.05% of total loans from 0.96% at December 31, 2017.  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 2018

Bancorp continued to grow organically in the first quarter of 2018 driven primarily by favorable net loan growth and supported by an improving 0.51% cost of funds, as compared to 0.56% for the same period in 2017.  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 13.85% at March 31, 2018.

Return on average assets for the three-month period ended March 31, 2018 was 0.26%, as compared to 0.33% for the three-month period ended March 31, 2017.  Return on average equity for the three-month period ended March 31, 2018 was 3.06%, as compared to 3.79% for the three-month period ended March 31, 2017. 

The book value per share of Bancorp’s common stock was $11.83 at March 31, 2018, as compared to $12.16 per share at March 31, 2017.

At March 31, 2018, the Bank remained above all “well-capitalized” regulatory requirement levels.  The Bank’s tier 1 risk-based capital ratio was approximately 12.73% at March 31, 2018, as compared to 13.14% at March 31, 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 $390.4 million at March 31, 2018, a decrease of 1.31% from $395.5 million at March 31, 2017.  Investment securities were $90.3 million at March 31, 2018, a decrease of 0.84% from $91.1 million at March 31, 2017.  Total loans were $275.7 million at March 31, 2018, an increase of 2.22% from $269.7 million at March 31, 2017.

Total deposits were $336.2 million at March 31, 2018, a decrease of 1.29% from $340.6 million at March 31, 2017.  Non-interest bearing deposits were $107.1 million at March 31, 2018, an increase of 1.80% from $105.2 million at March 31, 2017.  Total borrowings were $20.0 million at March 31, 2018, unchanged from $20.0 million at March 31, 2017.

Stockholders’ equity was $33.2 million at March 31, 2018, a decrease of $0.7 million from $33.9 million at March 31, 2017.  The decrease in the first quarter 2018 was related to lower corporate earnings and a decrease in other comprehensive income associated with the available for sale bond portfolio.

Nonperforming assets, which consist of nonaccrual loans, troubled debt restructurings, accruing loans past due 90 days or more, and other real estate owned, represented 1.49% of total assets at March 31, 2018, as compared to 1.05% for the same period of 2017.

Review of Financial Results

For the three-month periods ended March 31, 2018 and 2017

Net income for the three-month period ended March 31, 2018 was $0.26 million, as compared to net income of $0.32 million for the three-month period ended March 31, 2017.

Net interest income for the three-month period ended March 31, 2018 totaled $3.0 million, as compared to $2.8 million for the three-month period ended March 31, 2017.  Average earning loans and investment securities increased to $366 million for the three month period ended March 31, 2018, as compared to $362 million for the same period of 2017.

Net interest margin for the three-month period ended March 31, 2018 was 3.22%, as compared to 3.07% for the same period of 2017.  Lower funding costs were the primary driver of year-over-year results, as the cost of funds decreased 0.05% from 0.56% to 0.51% for the three month periods ending March 31, 2017 and 2018, respectively.

The provision for loan losses for the three-month period ended March 31, 2018 was $0.36 million, as compared to $0.20 million for the same period of 2017.  The increase for the three-month period ended March 31, 2018 was primarily the result of deteriorated credit quality of a single participated loan and is not indicative of poor credit quality of the overall loan portfolio.  As a result, the allowance for loan losses was $2.9 million at March 31, 2018, representing 1.05% of total loans, as compared to $2.6 million, or 0.96% of total loans for the same period of 2017.

Noninterest income for the three-month period ended March 31, 2018 was $0.49 million, as compared to $0.30 million for the three-month period ended March 31, 2017.  The results for the first quarter of 2018 include a $0.21 million gain on redemption of BOLI policy.

For the three-month period ended March 31, 2018, noninterest expense was $2.83 million, as compared to $2.57 million for the three-month period ended March 31, 2017.  The primary contributors to the $0.26 million increase, when compared to the three-month period ended March 31, 2017 were increases in salary and employee benefits, occupancy and equipment expenses, legal, accounting and other professional fees and loan collection costs and telephone costs, partially offset by decreases in data processing and item processing services and advertising and marketing related expenses.  

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
[email protected]
106 Padfield Blvd
Glen Burnie, MD 21061

      
GLEN BURNIE BANCORP AND SUBSIDIARIES 
CONSOLIDATED BALANCE SHEETS 
(dollars in thousands) 
      
 March 31, March 31, December 31,
  2018   2017   2017 
 (unaudited) (unaudited) (audited)
ASSETS     
Cash and due from banks$  2,449  $  2,959  $  2,610 
Interest bearing deposits with banks and federal funds sold 6,079   14,371   9,995 
Total Cash and Cash Equivalents 8,528   17,330   12,605 
      
Investment securities available for sale, at fair value   90,329     91,097     89,349 
Restricted equity securities, at cost    1,231     1,228     1,232 
      
Loans, net of deferred fees and costs 275,716   269,707   271,612 
Allowance for loan losses (2,899)  (2,602)  (2,589)
Loans, net 272,817   267,105   269,023 
      
Real estate acquired through foreclosure 114   114   114 
Premises and equipment, net 3,271   3,611   3,371 
Bank owned life insurance 8,290   9,377   8,713 
Deferred tax assets, net 2,759   3,133   2,429 
Accrued interest receivable 1,182   1,115   1,133 
Accrued taxes receivable   -   645   465 
Prepaid expenses 554   537   433 
Other assets 1,295   238   583 
Total Assets $390,370   $395,530   $389,450  
      
LIABILITIES     
Noninterest-bearing deposits$107,073  $105,190  $104,017 
Interest-bearing deposits 229,097   235,396   230,221 
Total Deposits 336,170   340,586   334,238 
      
Short-term borrowings 20,000   10,000   20,000 
Long-term borrowings   -    10,000     -  
Defined pension liability 341   369   335 
Accrued Taxes Payable 134     -      -  
Accrued expenses and other liabilities 538   644   835 
Total Liabilities 357,183   361,599   355,408 
      
STOCKHOLDERS' EQUITY     
Common stock, par value $1, authorized 15,000,000 shares,  issued and outstanding 2,804,456, 2,790,260, and 2,801,149 shares as of March 31, 2018, March 31, 2017, and December 31, 2017, respectively.  2,804   2,790   2,801 
Additional paid-in capital 10,301   10,164   10,267 
Retained earnings 21,581   21,745   21,605 
Accumulated other comprehensive loss (1,499)  (768)  (631)
Total Stockholders' Equity 33,187   33,931   34,042 
Total Liabilities and Stockholders' Equity$390,370   $395,530   $389,450  
      


 
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share amounts)
     
    Three Months Ended 
March 31,
   2018  2017
   (unaudited)   (unaudited) 
Interest income    
Interest and fees on loans $  2,872 $  2,774
Interest and dividends on securities    524    518
Interest on deposits with banks and federal funds sold    48    31
Total Interest Income  3,444  3,323
     
Interest expense    
Interest on deposits    309    333
Interest on short-term borrowings    143    82
Interest on long-term borrowings    -    76
Total Interest Expense  452  491
     
Net Interest Income  2,992  2,832
Provision for loan losses    360    195
Net interest income after provision for loan losses  2,632  2,637
     
Noninterest income    
Service charges on deposit accounts    67    67
Other fees and commissions    168    161
Gains on redemption of BOLI policies    207    -
Income on life insurance    44    49
Other income    -    2
Total Noninterest Income  486  279
     
Noninterest expenses    
Salary and employee benefits    1,721    1,421
Occupancy and equipment expenses    305    298
Legal, accounting and other professional fees    232    206
Data processing and item processing services    132    168
FDIC insurance costs    58    60
Advertising and marketing related expenses    17    31
Loan collection costs    41    18
Telephone costs    57    55
Other expenses    272    314
Total Noninterest Expenses  2,835  2,571
     
Income before income taxes  283  345
Income tax expense    28    29
     
Net income  $   255  $   316
     
Basic and diluted net income per common share  $   0.09  $   0.11
     


     
GLEN BURNIE BANCORP AND SUBSIDIARIES 
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the three months ended March, 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 $  21,707  $  (810) $  33,814 
           
Net income   -    -    316     -     316 
Cash dividends, $0.10 per share   -    -    (278)    -     (278)
Dividends reinvested under dividend reinvestment plan   3    34    -     -     37 
Other comprehensive loss   -    -    -     42     42 
Balance, March 31, 2017$  2,790 $  10,164 $  21,745  $  (768) $  33,931 
                   
        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 
 


         
THE BANK OF GLEN BURNIE        
CAPITAL RATIOS           
(dollars in thousands)           
 
          To Be Well
          Capitalized Under
      To Be Considered  Prompt Corrective
      Adequately Capitalized  Action Provisions
 AmountRatio AmountRatio AmountRatio
As of March 31, 2018:           
(unaudited)           
Common Equity Tier 1 Capital$33,13212.73% $11,7124.50% $16,9176.50%
Total Risk-Based Capital $36,04713.85% $20,8228.00% $26,02710.00%
Tier 1 Risk-Based Capital $33,13212.73% $15,6166.00% $20,8228.00%
Tier 1 Leverage $33,1268.40% $15,7744.00% $19,7185.00%
            
As of December 31, 2017:           
(audited)           
Common Equity Tier 1 Capital$32,94612.83% $11,5534.50% $16,6876.50%
Total Risk-Based Capital $35,54313.84% $20,5388.00% $25,67310.00%
Tier 1 Risk-Based Capital $32,94612.83% $15,4046.00% $20,5388.00%
Tier 1 Leverage $32,9288.43% $15,6174.00% $19,5215.00%
            
As of March 31, 2017:           
(unaudited)           
Common Equity Tier 1 Capital$33,75113.14% $11,5544.50% $16,6906.50%
Total Risk-Based Capital $36,39414.17% $20,5418.00% $25,67710.00%
Tier 1 Risk-Based Capital $33,75113.14% $15,4066.00% $20,5418.00%
Tier 1 Leverage $33,7518.62% $15,6644.00% $19,5805.00%
            


   
GLEN BURNIE BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(dollars in thousands, except per share amounts) 
  
         
  Three Months Ended Year Ended
  March 31,  December 31,  March 31,  December 31, 
   2018   2017   2017   2017 
  (unaudited) (unaudited) (unaudited) (audited)
         
Financial Data        
Assets $  390,353  $  389,450  $  395,530  $  389,450 
Investment securities    90,329     89,349     91,097     89,349 
Loans, (net of deferred fees & costs)    275,699     271,612     269,707     271,612 
Allowance for loan losses    2,899     2,589     2,602     2,589 
Deposits    336,169     334,238     340,586     334,238 
Borrowings    20,000     20,000     20,000     20,000 
Stockholders' equity    33,188     34,042     33,931     34,042 
Net income  255   (153)  316   911 
         
Average Balances        
Assets $  391,832  $  391,254  $  391,532  $  392,363 
Investment securities  92,449   90,084   94,062   91,634 
Loans, (net of deferred fees & costs)  273,964   270,402   267,494   269,600 
Deposits  334,492   335,312   234,351   335,805 
Borrowings  22,752   20,501   20,419   21,458 
Stockholders' equity  33,817   34,638   33,811   34,322 
         
Performance Ratios        
Annualized return on average assets  0.26%  -0.16%  0.33%  0.23%
Annualized return on average equity  3.06%  -1.75%  3.79%  2.65%
Net interest margin  3.22%  3.20%  3.07%  3.12%
Dividend payout ratio  109%  -183%  88%  123%
Book value per share $  11.83  $  12.15  $  12.16  $  12.15 
Basic and diluted net income per share 0.09   (0.05)  0.11   0.33 
Cash dividends declared per share  0.10   0.10   0.10   0.40 
Basic and diluted weighted average shares outstanding  2,802,509   2,799,832   2,789,012   2,794,381 
         
Asset Quality Ratios        
Allowance for loan losses to loans  1.05%  0.95%  0.96%  0.95%
Nonperforming loans to avg. loans  2.09%  1.31%  1.51%  1.32%
Allowance for loan losses to nonaccrual & 90+ past due loans  52.7%  77.7%  68.3%  77.7%
Net charge-offs annualize to avg. loans 0.07%  0.19%  0.12%  0.09%
         
Capital Ratios        
Common Equity Tier 1 Capital  12.73%  12.83%  0.00%  12.83%
Tier 1 Risk-based Capital Ratio  12.73%  12.83%  14.17%  12.83%
Leverage Ratio  8.40%  8.43%  8.62%  8.43%
Total Risk-Based Capital Ratio  13.85%  13.84%  13.14%  13.84%
         

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