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Glen Burnie Bancorp Announces Second Quarter 2018 Results

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GLEN BURNIE, Md., July 30, 2018 (GLOBE NEWSWIRE) -- Glen Burnie Bancorp ("Bancorp") (NASDAQ:GLBZ), the bank holding company for The Bank of Glen Burnie ("Bank"), announced today net income of $0.48 million, or $0.17 per basic and diluted common share for the three-month period ended June 30, 2018, as compared to net income of $0.34 million, or $0.12 per basic and diluted common share for the three-month period ended June 30, 2017.

Bancorp reported net income of $0.73 million, or $0.26 per basic and diluted common share for the six-month period ended June 30, 2018, compared to $0.65 million, or $0.23 per basic and diluted common share for the same period in 2017.  Net loans grew by $18.7 million, or 7.0% for the six-month period ended June 30, 2018, as compared to the same period of 2017.  At June 30, 2018, Bancorp had total assets of $401.5 million.  Bancorp, the oldest independent commercial bank in Anne Arundel County, will pay its 104th consecutive quarterly dividend on August 3, 2018.

"Our transformative journey which began in 2017, continued into the second quarter of 2018 as we executed our strategic plan and delivered increased shareholder value.  We achieved strong financial and operating performance across the Company, positioning us well for sustained growth and creating increased franchise value throughout this year and beyond," said John D. Long, President and CEO.  "Our experienced leadership team, upgraded leverageable infrastructure, diversified business model, positive interest rate risk management, strong indirect lending capabilities, strong asset quality, and attractive deposit mix bode well for the Company's future.  Net interest income continued to rise during the second quarter, driving a consistent core earnings expansion.  Net interest income grew by $160,000 or 5.5%, this quarter compared to the same quarter last year, as the balance of our net loan portfolio grew at an annualized rate of 7.0%, when compared to the same period last year.  The overall credit environment remained favorable, although the charge off of a single impaired loan led to an increase in our historical loss rate and loan loss provision for the residential real estate loan segment.  Headquartered in the dynamic Northern Anne Arundel County market, we believe the Bank is well-positioned and 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 Six Months of 2018

Bancorp continued to grow organically in the second quarter of 2018 driven primarily by favorable net loan growth and supported by an improving 0.53% cost of funds, as compared to 0.55% 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 12.78% at June 30, 2018, as compared to 14.65% for the same period of 2017.

Return on average assets for the three-month period ended June 30, 2018 was 0.49%, as compared to 0.35% for the three-month period ended June 30, 2017.  Return on average equity for the three-month period ended June 30, 2018 was 5.80%, as compared to 4.01% for the three-month period ended June 30, 2017. 

The book value per share of Bancorp's common stock was $11.95 at June 30, 2018, as compared to $12.45 per share at June 30, 2017.

At June 30, 2018, the Bank remained above all "well-capitalized" regulatory requirement levels.  The Bank's tier 1 risk-based capital ratio was approximately 11.94% at June 30, 2018, as compared to 13.60% at June 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 $401.5 million at June 30, 2018, an increase of $5.3 million or 1.34%, from $396.2 million at June 30, 2017.  Investment securities were $87.3 million at June 30, 2018, a decrease of $3.3 million or 3.66%, from $90.6 million at June 30, 2017.  Loans, net of deferred fees and costs, were $289.4 million at June 30, 2018, an increase of $18.4 million or 6.78%, from $271.0 million at June 30, 2017.  Other assets increased $1.9 million and bank owned life insurance decreased $1.6 million from June 30, 2017 to June 30, 2018 primarily due to the redemption of BOLI policies.

Total deposits were $341.8 million at June 30, 2018, an increase of $6.3 million or 1.88%, from $335.5 million at June 30, 2017.  Noninterest-bearing deposits were $108.4 million at June 30, 2018, an increase of $2.8 million or 2.67%, from $105.6 million at June 30, 2017.  Interest-bearing deposits were $233.4 million at June 30, 2018, an increase of $3.5 million or 1.52%, from $229.9 million at June 30, 2017.  Total borrowings were $25.0 million at June 30, 2018, unchanged from $25.0 million at June 30, 2017.

Stockholders' equity was $33.5 million at June 30, 2018, a decrease of $1.0 million from $34.5 million at June 30, 2017.  The decrease was driven primarily by $1.1 million increase in net unrealized losses associated with the available for sale bond portfolio and interest rate swap contracts.

Nonperforming assets, which consist of nonaccrual loans, troubled debt restructurings, accruing loans past due 90 days or more, and other real estate owned, represented 1.05% of total assets at June 30, 2018, as compared to 0.99% for the same period of 2017.

Review of Financial Results

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

Net income for the three-month period ended June 30, 2018 was $0.48 million, as compared to net income of $0.34 million for the three-month period ended June 30, 2017.

Net interest income for the three-month period ended June 30, 2018 totaled $3.1 million, as compared to $2.9 million for the three-month period ended June 30, 2017.  Average earning loan balances increased to $281.1 million for the three-month period ended June 30, 2018, as compared to $269.5 million for the same period of 2017.

Net interest margin for the three-month period ended June 30, 2018 was 3.21%, as compared to 3.09% for the same period of 2017.  Higher yields on interest-earning assets supported by lower funding costs were the primary drivers of year-over-year results, as the yield on interest-earning assets increased 0.11% from 3.62% to 3.73% and the cost of funds decreased 0.01% from 0.55% to 0.54% for the three-month periods ending June 30, 2018 and 2017, respectively.

The provision for loan losses for the three-month period ended June 30, 2018 was $5,000, as compared to $30,000 for the same period of 2017.  The decrease for the three-month period ended June 30, 2018 was primarily the result of the positive resolution of a single problem loan, offset by the negative effect on the loss history rate used to establish the required reserves for residential real estate loans of a single loan charge off.  As a result, the allowance for loan losses was $2.3 million at June 30, 2018, representing 0.79% of total loans, as compared to $2.6 million, or 0.96% of total loans at June 30, 2017.

Noninterest income for the three-month period ended June 30, 2018 was $0.39 million, as compared to $0.29 million for the three-month period ended June 30, 2017.  The results for the second quarter of 2018 include a $100,540 gain on redemption of BOLI policy.

For the three-month period ended June 30, 2018, noninterest expense was $3.01 million, as compared to $2.81 million for the three-month period ended June 30, 2017.  The primary contributors to the $0.20 million increase, when compared to the three-month period ended June 30, 2017 were increases in salary and employee benefits, legal, accounting and other professional fees and loan collection costs.

For the six-month periods ended June 30, 2018 and 2017

Net income for the six-month period ended June 30, 2018 was $0.73 million, as compared to net income of $0.65 million for the six-month period ended June 30, 2017.

Net interest income for the six-month period ended June 30, 2018 totaled $6.0 million, as compared to $5.7 million for the six-month period ended June 30, 2017.  Average earning loan balances increased to $278 million for the six-month period ended June 30, 2018, as compared to $269 million for the same period of 2017.

Net interest margin for the six-month period ended June 30, 2018 was 3.22%, as compared to 3.08% for the same period of 2017.  Higher yields on interest-earning assets supported by lower funding costs were the primary drivers of year-over-year results, as the yield on interest-earning assets increased 0.11% from 3.61% to 3.72% and the cost of funds decreased 0.02% from 0.55% to 0.53% for the six-month periods ending June 30, 2018 and 2017, respectively.

The provision for loan losses for the six-month period ended June 30, 2018 was $0.36 million, as compared to $0.17 million for the same period of 2017.  The increase for the six-month period ended June 30, 2018 was primarily the negative effect of a single charge off on the loss history rate used to establish the required reserves for residential real estate loans.  As a result, the allowance for loan losses was $2.3 million at June 30, 2018, representing 0.79% 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 six-month period ended June 30, 2018 was $0.87 million, as compared to $0.57 million for the six-month period ended June 30, 2017.  The results for the first half of 2018 include gains on redemptions of BOLI policies of $306,877.

For the six-month period ended June 30, 2018, noninterest expense was $5.85 million, as compared to $5.38 million for the six-month period ended June 30, 2017.  The primary contributors to the $0.47 million increase, when compared to the six-month period ended June 30, 2017 were increases in salary and employee benefits, accounting and other professional fees and loan collection 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
jdharris@bogb.net
106 Padfield Blvd
Glen Burnie, MD 21061

               
GLEN BURNIE BANCORP AND SUBSIDIARIES              
CONSOLIDATED BALANCE SHEETS              
(dollars in thousands)              
               
               
  June 30,   March 31,   December 31,   June 30,
  2018   2018   2017   2017
  (unaudited)   (unaudited)   (audited)   (unaudited)
ASSETS              
Cash and due from banks $ 2,584     $ 2,449     $ 2,610     $ 3,055  
Interest bearing deposits with banks and federal funds sold   5,498       6,079       9,995       14,283  
Total Cash and Cash Equivalents   8,082       8,528       12,605       17,338  
               
Investment securities available for sale, at fair value   87,314       90,329       89,349       90,629  
Restricted equity securities, at cost   1,443       1,231       1,232       1,440  
               
Loans, net of deferred fees and costs   289,408       275,716       271,612       271,035  
Less:  Allowance for loan losses   (2,284 )     (2,899 )     (2,589 )     (2,599 )
Loans, net   287,124       272,817       269,023       268,436  
               
Real estate acquired through foreclosure   114       114       114       114  
Premises and equipment, net   3,195       3,271       3,371       3,547  
Bank owned life insurance   7,780       8,290       8,713       9,428  
Deferred tax assets, net   2,713       2,759       2,429       2,803  
Accrued interest receivable   1,142       1,182       1,133       1,092  
Accrued taxes receivable   -       -       465       631  
Prepaid expenses   471       554       433       493  
Other assets   2,093       1,295       583       210  
Total Assets  $    401,471     $    390,370     $    389,450     $    396,161  
               
LIABILITIES              
Noninterest-bearing deposits $ 108,414     $ 107,073     $ 104,017     $ 105,597  
Interest-bearing deposits   233,393       229,097       230,221       229,899  
Total Deposits   341,807       336,170       334,238       335,496  
               
Short-term borrowings   25,000       20,000       20,000       20,000  
Long-term borrowings   -       -       -       5,000  
Defined pension liability   317       341       335       374  
Accrued Taxes Payable   28       134       -       -  
Accrued expenses and other liabilities   775       538       835       757  
Total Liabilities   367,927       357,183       355,408       361,627  
               
STOCKHOLDERS' EQUITY              
Common stock, par value $1, authorized 15,000,000 shares, issued and outstanding 2,807,819, 2,804,456, 2,801,149, and 2,793,748 shares as of June 30, 2018, March 31, 2018, December 31, 2017, and June 30, 2017, respectively.   2,808       2,804       2,801       2,794  
Additional paid-in capital   10,335       10,301       10,267       10,199  
Retained earnings   21,778       21,581       21,605       21,803  
Accumulated other comprehensive loss   (1,377 )     (1,499 )     (631 )     (262 )
Total Stockholders' Equity   33,544       33,187       34,042       34,534  
Total Liabilities and Stockholders' Equity $    401,471     $    390,370     $    389,450     $    396,161  
               


 
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share amounts)
(unaudited)
                 
                 
      Three Months Ended 
June 30,
    Six Months Ended 
June 30,
    2018   2017   2018   2017
Interest income                
Interest and fees on loans   $ 2,958     $ 2,842     $ 5,830     $ 5,616
Interest and dividends on securities     535       507       1,059       1,025
Interest on deposits with banks and federal funds sold     50       31       98       62
Total Interest Income     3,543       3,380       6,987       6,703
                 
Interest expense                
Interest on deposits     325       327       634       659
Interest on short-term borrowings     165       84       308       167
Interest on long-term borrowings     -       76       -       152
Total Interest Expense     490       487       942       978
                 
Net Interest Income     3,053       2,893       6,045       5,725
Provision for loan losses     (5 )     (30 )     355       165
Net interest income after provision for loan losses     3,058       2,923       5,690       5,560
                 
Noninterest income                
Service charges on deposit accounts     61       68       128       136
Other fees and commissions     179       168       347       328
Gains on redemption of BOLI policies     101       -       308       -
Income on life insurance     45       51       89       100
Other income     -       1       -       3
Total Noninterest Income     386       288       872       567
                 
Noninterest expenses                
Salary and employee benefits     1,649       1,615       3,371       3,036
Occupancy and equipment expenses     274       286       579       584
Legal, accounting and other professional fees     277       197       509       403
Data processing and item processing services     154       143       286       312
FDIC insurance costs     65       63       122       123
Advertising and marketing related expenses     32       42       49       73
Loan collection costs     80       29       121       47
Telephone costs     67       59       124       114
Other expenses     413       376       685       689
Total Noninterest Expenses     3,011       2,810       5,846       5,381
                 
Income before income taxes     433       401       716       746
Income tax expense     (45 )     63       (17 )     92
                 
Net income    $    478     $    338     $    733     $    654
                 
Basic and diluted net income per share of common stock    $    0.17     $    0.12     $    0.26     $    0.23
                 


         
GLEN BURNIE BANCORP AND SUBSIDIARIES        
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the six months ended June 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     -     -     654       -       654  
Cash dividends, $0.20 per share     -     -     (559 )     -       (559 )
Dividends reinvested under                    
dividend reinvestment plan     7     69     -       -       76  
Other comprehensive income     -     -     -       548       548  
Balance, June 30, 2017   $ 2,794   $ 10,199   $ 21,803     $ (262 )   $ 34,534  
                                     
                     
                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     -     -     733       -       733  
Cash dividends, $0.20 per share     -     -     (560 )     -       (560 )
Dividends reinvested under                    
dividend reinvestment plan     7     68     -       -       75  
Other comprehensive loss     -     -     -       (746 )     (746 )
Balance, June 30, 2018   $ 2,808   $ 10,335   $ 21,778     $ (1,377 )   $ 33,544  
                                     


 
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 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 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%
                   
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 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%
 


 
GLEN BURNIE BANCORP AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(dollars in thousands, except per share amounts)
   
                         
    Three Months Ended   Six Months Ended    Year Ended
    June 30,   March 31,    June 30,   June 30,   June 30,    December 31,
    2018   2018   2017   2018   2017   2017
    (unaudited)   (unaudited)   (unaudited)   (unaudited)   (unaudited)   (audited)
                         
Financial Data                        
Assets   $ 401,471     $ 390,353     $ 396,161     $ 401,471     $ 396,161     $ 389,450  
Investment securities     87,314       90,329       90,629       87,314       90,629       89,349  
Loans, (net of deferred fees & costs)     289,408       275,699       271,035       289,408       271,035       271,612  
Allowance for loan losses     2,284       2,899       2,599       2,284       2,599       2,589  
Deposits     341,807       336,169       335,496       341,807       335,496       334,238  
Borrowings     25,000       20,000       25,000       25,000       25,000       20,000  
Stockholders' equity     33,544       33,188       34,534       33,544       34,534       34,042  
                                                 
Net income     478       255       338       733       654       911  
                         
Average Balances                        
Assets   $ 396,033     $ 391,832     $ 392,959     $ 393,934     $ 392,263     $ 392,363  
Investment securities     91,290       92,449       92,364       91,870       93,213       91,634  
Loans, (net of deferred fees & costs)     281,104       273,964       269,533       277,534       268,514       269,600  
Deposits     335,479       334,492       336,724       334,985       336,585       335,805  
Borrowings     26,394       22,752       21,278       24,573       20,832       21,458  
Stockholders' equity     33,404       33,817       34,205       33,532       34,027       34,322  
                         
Performance Ratios                        
Annualized return on average assets     0.49 %     0.26 %     0.35 %     0.38 %     0.34 %     0.23 %
Annualized return on average equity     5.80 %     3.06 %     4.01 %     4.43 %     3.90 %     2.65 %
Net interest margin     3.21 %     3.22 %     3.09 %     3.22 %     3.08 %     3.12 %
Dividend payout ratio     59 %     109 %     83 %     76 %     85 %     123 %
Book value per share   $ 11.95     $ 11.83     $ 12.37     $ 11.96     $ 12.37     $ 12.15  
Basic and diluted net income per share   0.17       0.09       0.12       0.26       0.23       0.33  
Cash dividends declared per share     0.10       0.10       0.10       0.10       0.10       0.40  
Basic and diluted weighted average shares outstanding     2,806,599       2,802,509       2,792,656       2,804,565       2,791,824       2,794,381  
                         
Asset Quality Ratios                        
Allowance for loan losses to loans     0.79 %     1.05 %     0.96 %     0.79 %     0.96 %     0.95 %
Nonperforming loans to avg. loans     1.46 %     2.09 %     1.33 %     1.48 %     1.33 %     1.32 %
Allowance for loan losses to nonaccrual & 90+ past due loans     58.6 %     52.7 %     72.5 %     58.6 %     72.5 %     77.7 %
Net charge-offs annualize to avg. loans   0.94 %     0.07 %     0.04 %     0.48 %     0.04 %     0.09 %
                         
Capital Ratios                        
Common Equity Tier 1 Capital     11.94 %     12.73 %     13.60 %     11.94 %     13.60 %     12.83 %
Tier 1 Risk-based Capital Ratio     11.94 %     12.73 %     13.60 %     11.94 %     13.60 %     12.83 %
Leverage Ratio     8.39 %     8.40 %     8.61 %     8.39 %     8.61 %     8.43 %
Total Risk-Based Capital Ratio     12.78 %     13.85 %     14.65 %     12.78 %     14.65 %     13.84 %
                         

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