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Glen Burnie Bancorp Announces Third Quarter 2017 Results

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
AmountRatio AmountRatio AmountRatio
As of September 30, 2017:
(unaudited)
Common Equity Tier 1 Capital$34,06413.63% $11,2504.50% $16,2516.50%
Total Risk-Based Capital $36,69914.68% $20,0018.00% $25,00110.00%
Tier 1 Risk-Based Capital $34,06413.63% $15,0016.00% $20,0018.00%
Tier 1 Leverage $34,0648.56% $15,9194.00% $19,8985.00%
As of June 30, 2017:
(unaudited)
Common Equity Tier 1 Capital$33,83713.60% $11,1984.50% $16,1756.50%
Total Risk-Based Capital $36,45814.65% $19,9078.00% $24,88410.00%
Tier 1 Risk-Based Capital $33,83713.60% $14,9316.00% $19,9078.00%
Tier 1 Leverage $33,8378.61% $15,7174.00% $19,6475.00%
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%
As of December 31, 2016:
(audited)
Common Equity Tier 1 Capital$33,96213.63% $11,2134.50% $16,1976.50%
Total Risk-Based Capital $36,47114.64% $19,9358.00% $24,91810.00%
Tier 1 Risk-Based Capital $33,96213.63% $14,9516.00% $19,9358.00%
Tier 1 Leverage $33,9628.68% $15,6594.00% $19,5745.00%
As of September 30, 2016:
(unaudited)
Common Equity Tier 1 Capital$33,80513.74% $11,0704.50% $15,9896.50%
Total Risk-Based Capital $36,14514.69% $19,6798.00% $24,59910.00%
Tier 1 Risk-Based Capital $33,80513.74% $14,7606.00% $19,6798.00%
Tier 1 Leverage $33,8058.58% $15,7544.00% $19,6935.00%

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%

Source:Glen Burnie Bancorp