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Glen Burnie Bancorp Announces Third Quarter 2017 Results

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GLEN BURNIE, Md., Nov. 01, 2017 (GLOBE NEWSWIRE) -- Glen Burnie Bancorp ("Bancorp") (NASDAQ:GLBZ), the bank holding company for The Bank of Glen Burnie ("Bank"), announced today net income increased to $0.41 million, or $0.15 per basic and diluted common share for the third quarter of 2017, compared to $0.12 million or $0.04 per basic and diluted common share for the third quarter of 2016, a 257% increase.  Quarter-over-quarter, Bancorp's third quarter net income increased 21% over the $0.34 million net income, or $0.12 per basic and diluted common share recorded for the second quarter of 2017. 

Bancorp reported net income of $1.06 million, or $0.38 per basic and diluted common share for the nine months ending September 30, 2017, compared to $0.71 million, or $0.25 per basic and diluted common share for the same period in 2016, a 51% increase.  Net loans increased by $11.1 million, or 4% when compared to September 30, 2016.  At September 30, 2017, the Bank had total assets of $389.9 million and 8 branch locations in Anne Arundel County Maryland.  Bancorp, the oldest independent commercial bank in Anne Arundel County, will pay its 101st consecutive quarterly dividend on November 3, 2017.

"We have made significant progress and believe we remain on track to achieve growth and earnings expectations as our outlook continues to improve across our business," said John D. Long, President and Chief Executive Officer.  "The Bank's strong financial performance in the third quarter of 2017 was driven by organic growth, attractive low-cost core deposit funding, improved operating efficiencies and improved credit performance resulting in net income before taxes of $0.51 million, a $0.45 million increase over the $0.06 million recorded for the same period of 2016.  The 2016 results included a one-time restructuring charge of $0.18 million taken in the third quarter 2016.  Growing our lending business while increasing profitability continues to be a priority as we believe that our community bank delivery model offers an attractive option to borrowers.  We also continue to make progress in expanding our lending platforms.  Consumer indirect lending is a unique core competency for us that is based on the foundation of a consistent and disciplined underwriting process and an experienced management team.  We remain deeply committed to serving the needs of the community through the development of new loan and deposit products designed to meet the financial needs in our community."

Highlights from the First Nine Months of 2017

The Bank continued its organic growth strategy in the third quarter of 2017 with total assets of $390 million driven by favorable net loan growth and supported by an attractive 0.55% cost of funds.  Bancorp has strong liquidity and capital positions providing ample capacity for future growth, along with total regulatory capital to risk weighted assets of 14.68% at September 30, 2017.

Specific highlights include the following:

  • Return on average assets for the three- and nine-month periods ended September 30, 2017 was 0.41% and 0.36%, respectively, compared to 0.12% and 0.24% for the three-and nine-month periods ended September 30, 2016, respectively.  Return on average equity for the three- and nine-month periods ended September 30, 2017 was 4.74% and 4.19%, respectively, compared to 1.32% and 2.73% for the three- and nine-month periods ended September 30, 2016, respectively.
     
  • Total assets were $389.9 million at September 30, 2017, an increase of 0.4% from $388.4 million at December 31, 2016 and a decrease of 0.6% from $392.2 million at September 30, 2016.
     
  • Total loans were $271.5 million at September 30, 2017, an increase of 2.4% from $265.1 million at December 31, 2016 and an increase of 4.4% from $260.1 million at September 30, 2016.
     
  • Total deposits were $334.1 million at September 30, 2017, an increase of 0.2% from $333.2 million at December 31, 2016 and a decrease of 0.5% from $335.7 million at September 30, 2016.  Non-interest bearing deposits were $104.6 million at September 30, 2017, an increase of 4.5% from $100.1 million at December 31, 2016.
     
  • Total borrowings were $20.0 million at September 30, 2017, unchanged from December 31, 2016 and September 30, 2016.
     
  • Stockholders' equity was $34.6 million at September 30, 2017, an increase of 2.4% from $33.8 million at December 31, 2016.  The increase is related primarily to corporate earnings and the gain in other comprehensive income associated with the available for sale bond portfolio.  The combined activity improved the book value of Bancorp's common stock to $12.38 per share at September 30, 2017, compared to $12.10 per share at December 31, 2016.
     
  • At September 30, 2017, the Bank remained above all "well-capitalized" regulatory requirement levels.  The Bank's tier 1 risk-based capital ratio was 13.63% at September 30, 2017, unchanged from December 31, 2016.  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.
     
  • Net interest income for the three- and nine-month periods ended September 30, 2017 totaled $2.9 million and $8.7 million, respectively, compared to $2.8 million and $8.3 million, respectively, for the same periods of 2016.  Earning asset leverage was the primary driver in year-over-year results, as average earning assets increased to $375.1 million for the three-month period ended September 30, 2017, compared to $373.8 million for the same period of 2016.
     
  • Net interest margin for the three- and nine-month periods ended September 30, 2017 was 3.10% and 3.09%, compared to 2.97% and 2.97%, respectively, for the same periods of 2016.  The net interest margin is primarily driven by increasing yields on earning assets, as the increasing yields on investment securities is offsetting the declining yields on the loan portfolio, particularly indirect loans that have continued to increase within the portfolio.
     
  • Nonperforming loans, which consist of nonaccrual loans, troubled debt restructurings, and accruing loans past due 90 days or more, increased to $4.3 million at September 30, 2017 from $4.1 million at December 31, 2016.

  • The provision for loan losses for the three- and nine-month periods ended September 30, 2017 was $78,000 and $243,000, respectively, compared to $116,000 and $233,000, respectively, for the same periods of 2016.  The decrease for the third quarter 2017 was primarily driven by improvement in the overall credit quality of the loan portfolio.  As a result, the allowance for loan losses was $2.6 million at September 30, 2017, representing 0.97% of total loans, compared to $2.3 million, or 0.89% of total loans, at September 30, 2016.

Review of Financial Results

For the three-month periods ended September 30, 2017 and 2016

Net income for the three-month period ended September 30, 2017 was $0.41 million, compared to net income of $0.12 million for the three-month period ended September 30, 2016.

Net interest income for the three-month period ended September 30, 2017 totaled $2.9 million, compared to $2.8 million for the same period of 2016.  The increase in interest income resulted from interest-earning asset growth primarily from expansion of the loan portfolio and selective bond investment purchases. 

The provision for loan losses for the three-month period ended September 30, 2017 totaled $0.08 million, compared to $0.12 million for the same period of 2016 resulting from the improving credit quality of the overall loan portfolio combined with the resolution of nonperforming loans. 

Noninterest income for the three-month period ended September 30, 2017 was $0.37 million, compared to $0.34 million for the same period of 2016 driven primarily by higher ATM interchange fees associated with seasonal activity.

Noninterest expense reduction continues to be a key focus for 2017 net income improvement.  For the three-month period ended September 30, 2017, noninterest expense was $2.7 million, compared to $3.0 million for the same period of 2016.  The primary contributors to the change, when compared to the same period of 2016 were decreases in salary and employee benefits driven in part by one-time severance payments and data processing costs, offset by increases in occupancy and equipment expenses and telephone costs associated with the installation of a new telephone system. 

For the nine-month periods ended September 30, 2017 and 2016

Net income for the nine-month period ended September 30, 2017 was $1.06 million, compared to net income of $0.71 million for the nine-month period ended September 30, 2016.

Net interest income for the nine-month period ended September 30, 2017 totaled $8.7 million, compared to $8.3 million for the same period of 2016.  The increase in interest income resulted from interest-earning asset growth primarily from expansion of the loan portfolio and selective bond investment purchases.

Noninterest income for the nine-month period ended September 30, 2017 was $0.94 million, compared to the $0.94 million for the nine-month period ended September 30, 2016 as a result of higher ATM interchange fees associated with seasonal activity, offset by lower service charges on deposit accounts. 

Noninterest expense was $8.1 million, compared to $8.3 million for the same period of 2016.  The primary contributors to the change, when compared to the same period of 2016 were decreases in salary and employee benefits driven in part by one-time severance payments, data processing costs, FDIC insurance costs and loan collection costs, offset by increases in occupancy and equipment expenses, professional fees, advertising expenses and telephone costs associated with the installation of a new telephone system.

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 SUBSIDIARIES                  
CONSOLIDATED BALANCE SHEETS                
(dollars in thousands)                
                 
               
  September 30,   June 30,   December 31,   September  30,  
    2017       2017       2016       2016    
  (unaudited)   (unaudited)   (audited)   (unaudited)    
ASSETS                  
Cash and due from banks $   4,371     $   3,055     $   3,195     $   4,310      
Interest bearing deposits with banks and federal funds sold   7,126       14,282       7,427       12,366      
  Total Cash and Cash Equivalents   11,497       17,337       10,622       16,676      
                   
Investment securities available for sale, at fair value     89,903         90,629       94,607       98,532      
Restricted equity securities, at cost      1,228         1,440       1,230       1,230      
                   
Loans, net of deferred fees and costs   271,463       271,020       265,058       260,094      
  Less:  Allowance for loan losses   (2,623 )     (2,599 )     (2,484 )     (2,315 )    
  Loans, net   268,840       268,421       262,574       257,779      
                   
Real estate acquired through foreclosure   114       114       114       0      
Premises and equipment, net   3,451       3,547       3,638       3,582      
Bank owned life insurance   9,479       9,428       9,328       9,519      
Deferred tax assets, net   2,847       2,803       3,160       2,166      
Accrued interest receivable   1,140       1,092       1,134       1,100      
Accrued taxes receivable   638       631       674       715      
Prepaid expenses   512       493       546       668      
Other assets   235       210       815       197      
  Total Assets  $    389,884     $    396,145     $    388,442     $    392,164      
                   
LIABILITIES                  
Noninterest-bearing deposits $   104,571     $   105,597     $   100,099     $   100,646      
Interest-bearing deposits   229,534       229,899       233,147       235,035      
  Total Deposits   334,105       335,496       333,246       335,681      
                   
Short-term borrowings   20,000       15,000       10,000       0      
Long-term borrowings   0       10,000         10,000       20,000      
Defined pension liability   374       374         369       370      
Accrued expenses and other liabilities   769       741         1,011       1,152    
  Total Liabilities   355,248       361,611       354,626       357,203    
                 
STOCKHOLDERS' EQUITY                  
Common stock, par value $1, authorized 15,000,000
shares, issued and outstanding 2,797,477, 2,793,748,
2,786,855 and 2,783,111 shares as of September 30,
2017, June 30, 2017, December 31, 2016 and September
30, 2016, respectively.
                 
                 
                 
                 
  2,797       2,794       2,787       2,783      
Additional paid-in capital   10,233       10,199       10,130       10,097      
Retained earnings   21,935       21,803       21,708       21,591      
Accumulated other comprehensive (loss) income   (329 )     (262 )     (810 )     490      
  Total Stockholders' Equity   34,636       34,534       33,815       34,961      
  Total Liabilities and Stockholders' Equity $    389,884     $    396,145     $    388,441     $    392,164      
                   

 

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,    
      2017       2016       2017     2016    
Interest income:                    
Loans, including fees   $   2,883     $   2,795     $   8,503   $   8,380    
Interest and dividends on securities       498         492         1,523       1,467    
Deposits with banks and federal funds sold       53         31         115       91    
  Total Interest Income     3,434       3,318       10,141     9,938    
                     
Interest expense:                    
Deposits       324         364         984       1,133    
Short-term borrowings       (31 )       -         136       -    
Long term borrowings       206         162         358       481    
  Total Interest Expense     499       526       1,478     1,614    
                     
  Net Interest Income     2,935       2,792       8,663     8,324    
                     
Provision for loan losses       78         116         243       233    
                     
Net interest income after provision for loan losses     2,857       2,676       8,420     8,091    
                     
Noninterest income:                    
Service charges on deposit accounts       72         83         208       247    
Other fees and commissions       245         191         573       521    
Gain on securities sold       -         -         1       1    
Income on life insurance       51         54         151       161    
Other income       -         12         2       12    
  Total Noninterest Income     368       340       935     942    
                     
Noninterest expenses:                    
Salary and employee benefits       1,579         1,743         4,615       4,782    
Occupancy and equipment expenses       381         273         865       801    
Legal, accounting and other professional fees       180         173         648       595    
Data processing and item processing services       130         184         442       518    
FDIC insurance costs       64         78         188       232    
Advertising and marketing related expenses       38         12         110       49    
Loan collection costs       25         37         73       158    
Telephone costs       98         50         212       145    
Other expenses       219         407         944       1,024    
  Total Noninterest Expenses     2,714       2,957       8,097     8,304    
                     
Income before income taxes     511       60       1,258     729    
Income tax expense       101         (55 )       194       23    
                     
  Net income    $    410     $    115     $    1,064   $    706    
                     
Basic and diluted net income per common share    $   0.15     $   0.04     $   0.38   $   0.25    
                     

 

GLEN BURNIE BANCORP AND SUBSIDIARIES            
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Nine Months ended September 30, 2017 and 2016 (Unaudited)        
(dollars in thousands)                      
                         
                         
                Accumulated      
                Other      
        Additional       Comprehensive   Total  
    Common    Paid-in   Retained   (Loss)   Stockholders'  
    Stock   Capital   Earnings   Income   Equity  
Balance December 31, 2015 $   2,773   $   9,986   $   21,718     $   (301 )   $   34,176    
                       
Net income     -       -       706         -         706    
Cash dividends, $0.20 per share     -       -       (833 )       -         (833 )  
Dividends reinvested under                    
  dividend reinvestment plan     10       111       -         -         121    
Other comprehensive income     -       -       -         791         791    
Balance September 30, 2016 $   2,783   $   10,097   $   21,591     $   490     $   34,961    
                                         
                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, $0.20 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    
                                         

 

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, 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 %
                       
As of June 30, 2017:                      
(unaudited)                      
Common Equity Tier 1 Capital $ 33,837 13.60 %   $ 11,198 4.50 %   $ 16,175 6.50 %
Total Risk-Based Capital  $ 36,458 14.65 %   $ 19,907 8.00 %   $ 24,884 10.00 %
Tier 1 Risk-Based Capital  $ 33,837 13.60 %   $ 14,931 6.00 %   $ 19,907 8.00 %
Tier 1 Leverage  $ 33,837 8.61 %   $ 15,717 4.00 %   $ 19,647 5.00 %
                       
As of March 31, 2017:                      
(unaudited)                      
Common Equity Tier 1 Capital $ 33,751 13.14 %   $ 11,554 4.50 %   $ 16,690 6.50 %
Total Risk-Based Capital  $ 36,394 14.17 %   $ 20,541 8.00 %   $ 25,677 10.00 %
Tier 1 Risk-Based Capital  $ 33,751 13.14 %   $ 15,406 6.00 %   $ 20,541 8.00 %
Tier 1 Leverage  $ 33,751 8.62 %   $ 15,664 4.00 %   $ 19,580 5.00 %
                       
As of December 31, 2016:
(audited)
                     
Common Equity Tier 1 Capital $ 33,962 13.63 %   $ 11,213 4.50 %   $ 16,197 6.50 %
Total Risk-Based Capital  $ 36,471 14.64 %   $ 19,935 8.00 %   $ 24,918 10.00 %
Tier 1 Risk-Based Capital  $ 33,962 13.63 %   $ 14,951 6.00 %   $ 19,935 8.00 %
Tier 1 Leverage  $ 33,962 8.68 %   $ 15,659 4.00 %   $ 19,574 5.00 %
                       
As of September 30, 2016:                      
(unaudited)                      
Common Equity Tier 1 Capital $ 33,805 13.74 %   $ 11,070 4.50 %   $ 15,989 6.50 %
Total Risk-Based Capital  $ 36,145 14.69 %   $ 19,679 8.00 %   $ 24,599 10.00 %
Tier 1 Risk-Based Capital  $ 33,805 13.74 %   $ 14,760 6.00 %   $ 19,679 8.00 %
Tier 1 Leverage  $ 33,805 8.58 %   $ 15,754 4.00 %   $ 19,693 5.00 %
                       
 

 

GLEN BURNIE BANCORP AND SUBSIDIARIES                        
SELECTED FINANCIAL DATA  
   
                                 
    Three Months Ended   Nine Months Ended   Year Ended        
    September 30,    June 30,    September 30,   September 30,    September 30,    December 31,        
    (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (audited)        
      2017       2017       2016       2017       2016       2016          
                                                         
    (Dollars In Thousands Except Per Share Data)      
                                 
Financial Data:                                
Assets   $   389,884     $   396,141     $   392,164     $   389,884     $   392,164     $   388,442          
Investment securities       89,903         90,629         98,532         89,903         98,532         94,607          
Loans, (net of deferred fees and costs)       271,463         271,020       260,094         271,463         260,094       265,058          
Allowance for loan losses       2,623         2,599       2,315         2,623         2,315       2,484          
Deposits       334,105         335,496       335,681         334,105         335,681       333,246          
Borrowings       20,000         25,000       20,000         20,000         20,000       20,000          
Stockholders' equity       34,636         34,534       34,961         34,636         34,961       33,815          
                                                         
Net income     410       338       115       1,064       706       1,101          
                                 
Average Balances:                                
Assets   $   393,936     $   392,982     $   393,760     $   392,740     $   393,027     $   392,923          
Investment securities     90,028       92,364       100,565       92,151       99,710       99,628          
Loans, (net of deferred fees and costs)     270,973       269,533       256,583       269,333       257,784       258,481          
Deposits     334,740       336,724       337,731       335,970       337,998       337,320          
Borrowings     23,667       21,278       20,000       21,777       20,000       20,000          
Stockholders' equity     34,643       34,225       35,137       34,191       34,839       34,710          
                                 
Performance Ratios:                                
Annualized return on average assets     0.41 %     0.35 %     0.12 %     0.36 %     0.24 %     0.28 %        
Annualized return on average equity     4.74 %     3.99 %     1.32 %     4.19 %     2.73 %     3.17 %        
Net Interest Margin     3.10 %     3.10 %     2.97 %     3.09 %     2.97 %     2.98 %        
Dividend payout ratio     68 %     83 %     242 %     79 %     118 %     101 %        
Book value per share   $   12.38     $   12.37     $   12.56     $   12.39     $   12.57     $   12.16          
Basic and diluted net income per share     0.15       0.12       0.04       0.38       0.25       0.40          
Cash dividends declared per share     0.10       0.10       0.10       0.10       0.20       0.10          
Basic and diluted weighted average
                               
  shares outstanding     2,797,396       2,792,445       2,782,923       2,796,336       2,781,371       2,780,477          
                                 
Asset Quality Ratios:                                
Allowance for loan losses to loans     0.97 %     0.96 %     0.89 %     0.97 %     0.89 %     0.94 %        
Nonperforming loans to avg. loans     1.57 %     1.44 %     1.11 %     1.58 %     1.10 %     1.59 %        
Allowance for Credit Losses to Non-Accrual                            
  and 90+ Past Due Loans     66.1 %     72.5 %     91.5 %     66.1 %     91.5 %     65.6 %        
Net charge-offs annualize to Avg. loans     0.08 %     0.04 %     0.14 %     0.08 %     1.24 %     0.41 %        
                                 
Capital Ratios:                                
Common Equity Tier 1 Capital     13.63 %     13.60 %     13.74 %     13.63 %     13.74 %     13.63 %        
Tier 1 Risk-based Capital Ratio     13.63 %     13.60 %     13.74 %     13.63 %     13.74 %     13.63 %        
Leverage Ratio     8.56 %     8.61 %     8.58 %     8.56 %     8.58 %     8.68 %        
Total Risk-Based Capital Ratio     14.68 %     14.65 %     14.69 %     14.68 %     14.69 %     14.64 %        
                                 

 

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