-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B44zQvaPWZXbH2V3ufUkaQns8BvWkpdE9Kx40VopeNHPy6EWJictpKDQE2pnpaMK JoyjbS84cW6CfkGRJoMHUQ== 0001116354-03-000016.txt : 20030501 0001116354-03-000016.hdr.sgml : 20030501 20030501095951 ACCESSION NUMBER: 0001116354-03-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLEN BURNIE BANCORP CENTRAL INDEX KEY: 0000890066 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 521782444 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-24047 FILM NUMBER: 03675062 BUSINESS ADDRESS: STREET 1: 101 CRAIN HWY SE CITY: GLEN BURNIE STATE: MD ZIP: 21227 BUSINESS PHONE: 4107663300 MAIL ADDRESS: STREET 1: 101 CRAIN HWY SE CITY: GLEN BURNIE STATE: MD ZIP: 21227 10-Q 1 gbb3310310q.txt GLEN BURNIE BANCORP. 3-31-03 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly period ended March 31, 2003 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-24047 GLEN BURNIE BANCORP (Exact name of registrant as specified in its charter) Maryland 52-1782444 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 101 Crain Highway, S.E. Glen Burnie, Maryland 21061 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (410) 766-3300 Inapplicable (Former name, former address and former fiscal year if changed from last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act. Yes No X --- --- At May 1, 2003, the number of shares outstanding of the registrant's common stock was 1,679,359. TABLE OF CONTENTS ----------------- Part I - Financial Information Page ---- Item 1. Consolidated Financial Statements: ------- Condensed Consolidated Balance Sheets, March 31, 2003 (unaudited) and December 31, 2002 (audited) 3 Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2003 and 2002 (unaudited) 4 Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2003 and 2002 (unaudited) 5 Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2003 and 2002 (unaudited) 6 Notes to Unaudited Condensed Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of ------- and Results of Operations Financial Condition 8 Item 3. Quantitative And Qualitative Disclosure ------- About Market Risk 12 Item 4. Controls and Procedures 12 ------- Part II - Other Information Item 6. Exhibits and Reports on Form 8-K 13 ------- Signatures 14 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS -------------------- GLEN BURNIE BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in Thousands)
March 31, 2003 December 31, ASSETS -------------- 2002 (unaudited) ---- (audited) Cash and due from banks $10,072 $11,297 Interest-bearing deposits in other financial institutions 4,757 41 Federal funds sold 6,412 4,404 ------- ------- Cash and cash equivalents 21,241 15,742 Certificates of deposit in other financial institutions 100 100 Investment securities available for sale, at fair value 90,680 84,658 Investment securities held to maturity, at cost (fair value March 31: $6,554; December 31: $7,616) 6,207 7,202 Federal Home Loan Bank stock, at cost 896 703 Common Stock in the Glen Burnie Statutory Trust I 155 155 Loans, less allowance for credit losses (March 31: $2,380; December 31: $2,515) 157,850 158,287 Premises and equipment, at cost, less accumulated depreciation 4,350 4,143 Other real estate owned 412 413 Cash value of life insurance 5,091 5,025 Other assets 2,675 2,978 -------- -------- Total assets $289,657 $279,406 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES: Deposits $252,800 $241,420 Short-term borrowings 104 837 Long-term borrowings 7,245 7,251 Other liabilities 2,246 2,953 -------- -------- Total liabilities 262,395 252,461 -------- -------- COMMITMENTS AND CONTINGENCIES Guaranteed preferred beneficial interests in Glen Burnie Bancorp junior subordinated debentures 5,155 5,155 -------- -------- STOCKHOLDERS' EQUITY: Common stock, par value $1, authorized 15,000,000 shares; Issued and outstanding: March 31: 1,679,359 shares; December 31: 1,677,173 shares 1,679 1,677 Surplus 10,679 10,638 Retained earnings 8,401 7,947 Accumulated other comprehensive income, net of tax 1,348 1,528 -------- -------- Total stockholders' equity 22,107 21,790 -------- -------- Total liabilities and stockholders' equity $289,657 $279,406 ======== ======== See accompanying notes to condensed consolidated financial statements.
3 GLEN BURNIE BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in Thousands, Except Per Share Amounts) (Unaudited)
Three Months Ended March 31, 2003 2002 ---- ---- Interest income on: Loans, including fees $2,819 $3,115 U.S. Treasury and U.S. Government agency securities 487 605 State and Municipal securities 375 258 Other 131 143 ------ ------ Total interest income 3,812 4,121 ------ ------ Interest expense on: Deposits 899 1,124 Short-term borrowings 1 2 Long-term borrowings 108 106 Junior subordinated debentures 136 136 ------ ------ Total interest expense 1,144 1,368 ------ ------ Net interest income 2,668 2,753 Provision for credit losses 0 0 ------ ------ Net interest income after provision for credit losses 2,668 2,753 ------ ------ Other income: Service charges on deposit accounts 258 249 Other fees and commissions 208 138 Other non-interest income 2 3 Gain on termination of post-retirement plan 0 764 Gains on investment securities 92 4 ------ ------ Total other income 560 1,158 ------ ------ Other expenses: Salaries and employee benefits 1,465 1,424 Occupancy 212 146 Other expenses 798 900 ------ ------ Total other expenses 2,475 2,470 ------ ------ Income before income taxes 753 1,441 Income tax expense 97 453 ------ ------ Net income $656 $ 988 ==== ===== Basic and diluted earnings per share of common stock $0.39 $0.59 ===== ===== Weighted average shares of common stock outstanding 1,677,339 1,663,770 ========= ========= Dividends declared per share of common stock $0.12 $0.10 ===== ===== See accompanying notes to condensed consolidated financial statements.
4 GLEN BURNIE BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in Thousands) (Unaudited)
Three Months Ended March 31, ---------------------------- 2003 2002 ---- ---- Net income $656 $988 Other comprehensive income (loss), net of tax Unrealized gains (losses) securities: Unrealized holding losses arising during period (124) (235) Reclassification adjustment for gains included in net income (56) (2) ---- ---- Comprehensive income $476 $751 ==== ==== See accompanying notes to condensed consolidated financial statements.
5 GLEN BURNIE BANCORP AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands) (Unaudited)
Three Months Ended March 31, ---------------------------- 2003 2002 ---- ---- Cash flows from operating activities: Net income $656 $988 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization, and accretion 10 114 Provision for credit losses 0 0 Gains on disposals of assets, net (92) (4) Income on investment in life insurance (66) 0 Changes in assets and liabilities: Decrease (increase) in other assets 372 (254) Decrease in other liabilities (630) (816) ---- ---- Net cash provided by operating activities 250 28 ---- ---- Cash flows from investing activities: Maturities of available for sale mortgage-backed securities 7,146 2,684 Proceeds from disposals of investment securities 4,232 3,134 Purchases of investment securities (16,458) (7,025) Purchases of Federal Home Loan Bank stock (193) (51) Decrease in loans, net 437 2,249 Purchases of premises and equipment (320) (12) ------- ------ Net cash (used) provided by investing activities (5,156) 979 ------- ------ Cash flows from financing activities: Increase (decrease) in deposits, net 11,380 (55) Decrease in short-term borrowings (733) (69) Repayment of long-term borrowings (6) (6) Dividends paid (279) (195) Common stock dividends reinvested 43 36 ------ ---- Net cash provided (used) by financing activities 10,405 (289) ------ ---- Increase in cash and cash equivalents 5,499 718 Cash and cash equivalents, beginning of year 15,742 18,220 ------ ------ Cash and cash equivalents, end of period $21,241 $18,938 ======= ======= See accompanying notes to condensed consolidated financial statements.
6 GLEN BURNIE BANCORP AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all information and notes necessary for a complete presentation of financial position, results of operations, changes in stockholders' equity, and cash flows in conformity with accounting principles generally accepted in the United States of America. However, all adjustments (consisting only of normal recurring accruals) which, in the opinion of management, are necessary for a fair presentation of the unaudited consolidated financial statements have been included in the results of operations for the three months ended March 31, 2003 and 2002. Operating results for the three-month period ended March 31, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. NOTE 2 - EARNINGS PER SHARE Basic earnings per share of common stock are computed by dividing net earnings by the weighted average number of common shares outstanding during the period. Diluted earnings per share are calculated by including the average dilutive common stock equivalents outstanding during the periods. Dilutive common equivalent shares consist of stock options, calculated using the treasury stock method. Three Months Ended March 31, 2003 -------------- Diluted: Net income $ 656,000 Weighted average common shares outstanding 1,677,339 Dilutive effect of stock options 4,555 ---------- Average common shares outstanding - diluted 1,681,894 Diluted net income per share $0.39 Diluted earnings per share calculations were not required for the three months ended March 31, 2002 since there were no options outstanding. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS General. Glen Burnie Bancorp, a Maryland corporation (the "Company"), and its subsidiaries, The Bank of Glen Burnie (the "Bank") and GBB Properties, Inc., both Maryland corporations, and Glen Burnie Statutory Trust I, a Connecticut business trust, had consolidated net income of $656,000 ($0.39 basic and diluted earnings per share) for the first quarter of 2003, compared to first quarter 2002 consolidated net income of $988,000 ($0.59 basic and diluted earnings per share). Included in the results for the 2002 period is an after-tax increase of $470,000 in consolidated net income ($764,000 pre-tax) arising from the negative amendment to the Bank's post-retirement health insurance benefit plan which was recognized in the first quarter of 2002. Consolidated net income for the first quarter of 2002 without this gain was $518,000. Net Interest Income. The Company's consolidated net interest income prior to provision for credit losses for the three months ended March 31, 2003 was $2,668,000 compared to $2,753,000 for the same period in 2002, a decrease of $85,000 (3.1%) for the three-month period. This decline was primarily attributable to a decrease in loan income, partially offset by a decrease in interest expense on deposits. Interest income decreased $309,000 (7.5%) for the three months ended March 31, 2003, compared to the same period in 2002, primarily due to a decrease in loan income as a result of a declining interest rate environment. Interest expense declined $224,000 (16.4%) for the three months ended March 31, 2003 compared to the 2002 period, principally due to a decrease in interest expense on deposits as a result of a declining interest rate environment. Net interest margins for the three months ended March 31, 2003 was 4.53%, compared to tax equivalent net interest margins of 4.80% for the three months ended March 31, 2002. The decline in net interest margins for the three months ended March 31, 2003 was primarily due to a decline in the interest rates on earning assets, partially offset by a decline in the interest rates on deposits. Provision For Credit Losses. The Company made no additional provision for credit losses during the three month periods ended March 31, 2003 and 2002. As of March 31, 2003, the allowance for credit losses equaled 309.90% of non-accrual and past due loans compared to 429.13% at December 31, 2002 and 596.21% at March 31, 2002. During the three month period ended March 31, 2003, the Company recorded net charge-offs of $135,000, compared to net charge-offs of $106,000 during the corresponding period of the prior year. On an annualized basis, net charge-offs for the 2003 period represent 0.34% of the average loan portfolio. Other Income. Other income declined from $1,158,000 for the three month period ended March 31, 2002, to $560,000 for the corresponding 2003 period, a $598,000 (51.6%) decline. Other income for 2002 included a gain of $764,000 arising from the negative amendment on the Bank's post-retirement health insurance benefit plan which was recognized in the quarter ended March 31, 2002. Other income for 2002 without the gain arising from the negative amendment on the Bank's post-retirement health insurance benefit plan was $394,000. The decrease in other income for the 2003 period was primarily due to the absence of this gain, partially offset by increases in other fees and commissions due to income on investments in life insurance and increases in securities gains. Other Expense. Other expense increased slightly from $2,470,000 for the three month period ended March 31, 2002, to $2,475,000 for the corresponding 2003 period, a $5,000 (0.2%) increase. The increase was due to a increase in salary and benefit expenses and occupancy expenses, partially offset by a decline in professional fees included in other expenses. Income Taxes. During the three months ended March 31, 2003, the Company recorded income tax expense of $97,000, compared to an income tax expense of $453,000 for the corresponding period of the prior year. The decrease in income tax expenses is primarily due to a decrease in other non-interest income combined with an increase in tax exempt income. The Company's effective tax rate for the three month period in 2003 was 13%, compared to 31% for the prior year period. 8 FINANCIAL CONDITION General. The Company's assets grew to $289,657,000 at March 31, 2003 from $279,406,000 at December 31, 2002, primarily due to an increase in investments, interest-bearing deposits in other financial institutions and federal funds sold. The Bank's net loans totaled $157,850,000 at March 31, 2003, compared to $158,287,000 at December 31, 2002, a decrease of $437,000 (0.3%), primarily attributable to a decline in the portfolio of indirect loans. The Company's total investment securities portfolio (including both investment securities available for sale and investment securities held to maturity) totaled $96,887,000 at March 31, 2003, a $5,027,000 (5.5%) increase from $91,860,000 at December 31, 2002. The Bank's cash and cash equivalents (cash due from banks, interest-bearing deposits in other financial institutions, and federal funds sold), as of March 31, 2003, totaled $21,241,000, an increase of $5,499,000 (34.9%) from the December 31, 2002 total of $15,742,000. The aggregate market value of investment securities held by the Bank as of March 31, 2003 was $97,234,000 compared to $92,274,000 as of December 31, 2002, a $4,960,000 (5.4%) increase. Deposits as of March 31, 2003 totaled $252,800,000, which is an increase of $11,380,000 (4.7%) from $241,420,000 at December 31, 2002. Demand deposits as of March 31, 2003 totaled $66,427,000 which is an increase of $7,365,000 (12.5%) from $59,062,000 at December 31, 2002. NOW accounts as of March 31, 2003 totaled $24,470,000 which is an increase of $399,000 (1.6%) from $24,071,000 at December 31, 2002. Money market accounts as of March 31, 2003 totaled $22,061,000 which is an increase of $2,172,000 (10.9%), from $19,889,000 at December 31, 2002. Savings deposits as of March 31, 2003 totaled $50,269,000 an increase of $2,653,000 (5.6%) from $47,616,000 at December 31, 2002. Certificates of deposit over $100,000 totaled $17,951,000 on March 31, 2003, an increase of $253,000 (1.4%) from $17,698,000 at December 31, 2002. Other time deposits (made up of certificates of deposit less than $100,000 and individual retirement accounts) totaled $71,513,000 on March 31, 2003, a $1,569,000 (2.1%) decrease from the $73,082,000 total at December 31, 2002. Asset Quality. The following table sets forth the amount of the Bank's restructured loans, non-accrual loans and accruing loans 90 days or more past due at the dates indicated. 9
At March 31, At December 31, ------------ --------------- 2003 2002 ---- ---- (Dollars in Thousands) Restructured loans $ 0 $ 41 ===== ===== Non-accrual loans: Real estate - mortgage: Residential $ 447 $ 264 Commercial 0 178 Real estate - construction 8 7 Installment 106 112 Credit card & related 0 0 Commercial 190 10 ----- ----- Total non-accrual loans 751 571 ----- ----- Accruing loans past due 90 days or more: Real estate - mortgage: Residential 15 1 Commercial 0 0 Real estate - construction 1 0 Installment 1 14 Credit card & related 0 0 Commercial 0 0 Other 0 0 ----- ----- Total accruing loans past due 90 days or more 17 15 ----- ----- Total non-accrual and past due loans $ 768 $ 586 ===== ===== Non-accrual and past due loans to gross loans 0.49% 0.36% ===== ===== Allowance for credit losses to non-accrual and past due loans 309.90% 429.1% ====== =====
At March 31, 2003, there were no loans outstanding, other than those reflected in the above table, as to which known information about possible credit problems of borrowers caused management to have serious doubts as to the ability of such borrowers to comply with present loan repayment terms. Such loans consist of loans which were not 90 days or more past due but where the borrower is in bankruptcy or has a history of delinquency, or the loan to value ratio is considered excessive due to deterioration of the collateral or other factors. Allowance For Credit Losses. The allowance for credit losses is established through a provision for credit losses charged to expense. Loans are charged against the allowance for credit losses when management believes that the collectibility of the principal is unlikely. The allowance, based on evaluations of the collectibility of loans and prior loan loss experience, is an amount that management believes will be adequate to absorb possible losses on existing loans that may become uncollectible. The evaluations take into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, and current economic conditions and trends that may affect the borrowers' ability to pay. 10 Transactions in the allowance for credit losses for the three months ended March 31, 2003 and 2002 were as follows: Three Months Ended March 31, --------- 2003 2002 ---- ---- (Dollars in Thousands) Beginning balance $ 2,515 $ 2,938 Charge-offs (223) (140) Recoveries 88 34 -------- -------- Net charge-offs (135) (106) Provisions charged to operations 0 0 -------- -------- Ending balance $ 2,380 $ 2,832 ======== ======== Average loans $157,764 $163,338 Net charge offs to average loans (annualized) 0.34% 0.26% Reserve for Unfunded Commitments. As of March 31, 2003, the Bank had outstanding commitments totaling $16,615,817. These outstanding commitments consisted of letters of credit, undrawn lines of credit, and other loan commitments. The following table shows the Bank's reserve for unfunded commitments arising from these transactions: Three Months Ended March 31, 2003 2002 ---- ---- (Dollars in Thousands) Beginning balance $ 150 $ 150 Provisions charged to operations 0 0 ----- ----- Ending balance $ 150 $ 150 ===== ===== LIQUIDITY AND CAPITAL RESOURCES The Company currently has no business other than that of the Bank and does not currently have any material funding commitments. The Company's principal sources of liquidity are cash on hand and dividends received from the Bank. The Bank is subject to various regulatory restrictions on the payment of dividends. The Bank's principal sources of funds for investments and operations are net income, deposits from its primary market area, principal and interest payments on loans, interest received on investment securities and proceeds from maturing investment securities. Its principal funding commitments are for the origination or purchase of loans and the payment of maturing deposits. Deposits are considered a primary source of funds supporting the Bank's lending and investment activities. The Bank's most liquid assets are cash and cash equivalents, which are cash on hand, amounts due from financial institutions, federal funds sold, certificates of deposit with other financial institutions that have an original maturity of three months or less and money market mutual funds. The levels of such assets are dependent on the Bank's operating financing and investment activities at any given time. The variations in levels of cash and cash equivalents are influenced by deposit flows and anticipated future deposit flows. The Bank's cash and cash equivalents (cash due from banks, interest-bearing deposits in other financial institutions, and federal funds sold), as of March 31, 2003, totaled $21,241,000, an increase of $5,499,000 (34.9%) from the December 31, 2002 total of $15,742,000. As of March 31, 2003, the Bank was permitted to draw on a $34,700,000 line of credit from the FHLB of Atlanta. Borrowings under the line are secured by a 11 floating lien on the Bank's residential mortgage loans. As of March 31, 2003, a $7.0 million long-term convertible advance was outstanding under this line. In addition the Bank has a secured line of credit in the amount of $5.0 million from another commercial bank on which it has not drawn. Furthermore, as of March 31, 2003, the Company had outstanding $5,155,000 of its 10.6% Junior Subordinated Deferrable Interest Debentures issued to Glen Burnie Statutory Trust I, a Connecticut statutory trust subsidiary of the Company. The Company's stockholders' equity increased $317,000 (1.45%) during the three months ended March 31, 2003, due to earnings, partially offset by decreases in equity accounts from dividend distributions. The Company's accumulated other comprehensive income, net of tax decreased by $180,000 (11.78%) from $1,528,000 at December 31, 2002 to $1,348,000 at March 31, 2003, as a result of a decrease in unrealized holding gains on investment securities arising during the period. Retained earnings increased by $454,000 (5.71%) as the result of the Company's earnings during the quarter which were partially offset by dividends declared. In addition, $43,000 was transferred to stockholders' equity in consideration for shares to be issued under the Company's dividend reinvestment plan in lieu of cash dividends. The Federal Reserve Board and the FDIC have established guidelines with respect to the maintenance of appropriate levels of capital by bank holding companies and state non-member banks, respectively. The regulations impose two sets of capital adequacy requirements: minimum leverage rules, which require bank holding companies and banks to maintain a specified minimum ratio of capital to total assets, and risk-based capital rules, which require the maintenance of specified minimum ratios of capital to "risk-weighted" assets. At March 31, 2003, the Bank was in full compliance with these guidelines with a Tier 1 leverage ratio of 8.94%, a Tier 1 risk-based capital ratio of 13.67% and a total risk-based capital ratio of 14.92%. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK Not applicable. ITEM 4. CONTROLS AND PROCEDURES Based on the evaluation of the Company's disclosure controls and procedures by F. William Kuethe, Jr., the Company's Chief Executive Officer, and John E. Porter, the Company's Chief Financial Officer, as of a date within 90 days of the filing date of this quarterly report, such officers have concluded that the Company's disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Securities and Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time period specified by the Securities and Exchange Commission's rules and forms. There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. 12 PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits: Exhibit No. 3.1 Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Amendment No. 1 to the Registrant's Form 8-A filed December 27, 1999, File No. 0-24047) 3.2 By-Laws (incorporated by reference to Exhibit 3.2 to the Registrant's Annual Report on Form 10-K for the Fiscal Year Ended December 31, 1998, File No. 0-24047) 3.3 Articles Supplementary, dated November 16, 1999 (incorporated by reference to Exhibit 3.3 to the Registrant's Current Report on Form 8-K filed December 8, 1999, File No. 0-24047) 4.1 Rights Agreement, dated as of February 13, 1998, between Glen Burnie Bancorp and The Bank of Glen Burnie, as Rights Agent, as amended and restated as of December 27, 1999 (incorporated by reference to Exhibit 4.1 to Amendment No. 1 to the Registrant's Form 8-A filed December 27, 1999, File No. 0-24047) 10.1 Glen Burnie Bancorp Director Stock Purchase Plan (incorporated by reference to Exhibit 99.1 to Post-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-8, File No. 33-62280) 10.2 The Bank of Glen Burnie Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the Period Ended March 31, 2002, File No. 0-24047) 10.3 Amended and Restated Change-in-Control Severance Plan (incorporated by reference to Exhibit 10.3 to the Registrant's Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2001, File No. 0-24047) 10.4 The Bank of Glen Burnie Executive and Director Deferred Compensation Plan (incorporated by reference to Exhibit 10.4 to the Registrant's Annual Report on Form 10-K for the Fiscal Year Ended December 31, 1999, File No. 0-24047) 31.1 Rule 15d-14(a) Certification of Chief Executive Officer 31.2 Rule 15d-14(a) Certification of Chief Financial Officer 32 Section 1350 Certifications 99 Press Release issued April 30, 2003 (b) Reports on Form 8-K: None. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GLEN BURNIE BANCORP (Registrant) Date: May 1, 2003 By: /s/ F. William Kuethe, Jr. ---------------------------------- F. William Kuethe, Jr. President, Chief Executive Officer By: /s/ John E. Porter ---------------------------------- John E. Porter Chief Financial Officer 14 Exhibit 31.1 RULE 15d-14(a) CERTIFICATION OF CHIEF EXECUTIVE OFFICER I, F. William Kuethe, Jr., certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Glen Burnie Bancorp; 2. Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report; 3. Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Quarterly Report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this Quarterly Report (the "Evaluation Date"); and c) presented in this Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and 6. The Registrant's other certifying officers and I have indicated in this Quarterly Report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 1, 2003 /s/ F. William Kuethe, Jr. ------------------------------------ F. William Kuethe, Jr. Chief Executive Officer Exhibit 31.2 RULE 15d-14(a) CERTIFICATION OF CHIEF FINANCIAL OFFICER I, John E. Porter, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Glen Burnie Bancorp; 2. Based on my knowledge, this Quarterly Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Quarterly Report; 3. Based on my knowledge, the financial statements, and other financial information included in this Quarterly Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Quarterly Report; 4. The Registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have: d) designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; e) evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this Quarterly Report (the "Evaluation Date"); and f) presented in this Quarterly Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent function): c) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and d) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and 6. The Registrant's other certifying officers and I have indicated in this Quarterly Report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: May 1, 2003 /s/ John E. Porter ------------------------------------ John E. Porter Chief Financial Officer Exhibit 32 SECTION 1350 CERTIFICATIONS In connection with the Quarterly Report of Glen Burnie Bancorp (the "Company") on Form 10-Q for the period ending March 31, 2003 as filed with the Securities and Exchange Commission and to which this Certification is an exhibit (the "Report"), the undersigned hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company for the periods reflected therein. Date: May 1, 2003 /s/ F. William Kuethe, Jr. ------------------------------------ F. William Kuethe, Jr. President, Chief Executive Officer /s/ John E. Porter ------------------------------------ John E. Porter Chief Financial Officer Exhibit 99 FOR IMMEDIATE RELEASE CONTACT: Alison Tavik - -------------------------------------------------------------------------------- 410-768-8857 adtavik@bogb.net GLEN BURNIE BANCORP REPORTS FIRST QUARTER INCOME GLEN BURNIE, MD (April 30, 2003) - Glen Burnie Bancorp (Nasdaq SmallCap: GLBZ), parent company of The Bank of Glen Burnie, today announced results for the first quarter. The company realized net income of $656,000 or $.39 basic earnings per share in the quarter ended March 31, 2003. The company reported net income of $988,000 or $.59 basic earnings per share for the same three-month period in 2002 which included a one-time, after-tax gain of $470,000 resulting from an amendment to the Bank's post-retirement benefit program. "The highlight to our first quarter was the relocation of our Severna Park branch office," said President & CEO F. William Kuethe, Jr. "The new location is larger, provides easier access for customers and offers greater visibility. Although the site had been a bank branch, we did an extensive renovation program, installing new teller stations, drive-in window, ATM, and security system. We also put in a new vault and added a privacy room for safe deposit customers," Kuethe stated. "We are very pleased that income from our core banking business has increased substantially compared to last year's first quarter results," said Kuethe. "Looking at our core banking business of net interest, fee and investment income [without the inclusion of the 2002 one-time after-tax gain of $470,000 resulting from an amendment to the bank's post-retirement benefit program], net income for 2002 was $518,000, and our 2003 first quarter net income of $656,000 represents a 27% growth in these core earnings." Kuethe added, "While our reported net income for the first quarter of 2003 is 34% lower than reported net income for the first quarter of 2002, we continue to grow assets, we remain well capitalized, our liquidity ratios are well positioned and our delinquency rate is below peer group." The Bank of Glen Burnie recently received a 5-Star Superior Rating from BAUER FINANCIAL Reports, Inc., the nation's leading independent bank research firm. This distinction, awarded in March 2003, denotes the highest level of strength, safety and performance measured by Bauer. The 5-Star Superior Rating is based on factors such as capitalization, liquidity, loan delinquency rate and historical performance. On April 8, 2003, the company paid a 12 cent ($0.12) dividend per share of common stock to shareholders of record at the close of business on March 25, 2003, marking the company's 42nd consecutive dividend. Glen Burnie Bancorp will host its 2003 Annual Meeting of Stockholders on Thursday, May 8th at La Fontaine Bleu in Glen Burnie, Maryland. Registration opens at 1:30 p.m. and the meeting will begin at 2 p.m. Glen Burnie Bancorp, parent company to The Bank of Glen Burnie, (www.thebankofglenburnie.com) maintains assets totaling more than $280 million. The Bank of Glen Burnie is a locally-owned community bank with seven branches serving Anne Arundel County. # # # # Certain information contained in this news release, which does not relate to 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. For a more complete discussion of these and other risk factors, please see the company's reports filed with the Securities and Exchange Commission. Glen Burnie Bancorp and Subsidiaries Condensed Consolidated Balance Sheet (dollars in thousands, except per share amounts)
(unaudited) March December 31, 2003 31, 2002 ---------------------- Assets Cash and due from banks $10,072 $11,297 Interest bearing deposits 4,757 41 Federal funds sold 6,412 4,404 Investment securities 96,887 91,860 Common Stock in the Glen Burnie Statutory Trust I 155 155 Loans, net of allowance 157,850 158,287 Premises and equipment at cost, net of accumulated depreciation 4,350 4,143 Other real estate owned 412 413 Other assets 8,762 8,806 -------- -------- Total assets $289,657 $279,406 ======== ======== Liabilities and Stockholders' Equity Liabilities: Deposits $252,800 $241,420 Short-term borrowings 104 837 Long-term borrowings 7,245 7,251 Other liabilities 2,246 2,953 -------- -------- Total liabilities $262,395 $252,461 ======== ======== Guaranteed preferred beneficial interests in Glen Burnie Bancorp junior subordinated debentures 5,155 5,155 -------- -------- Stockholders' equity: Common stock, par value $1, authorized 15,000,000 shares; issued and outstanding March 31, 2003 1,679,359 shares; December 31, 2002 1,677,173 shares $1,679 $1,677 Surplus 10,679 10,638 Retained earnings 8,401 7,947 Accumulated other comprehensive income 1,348 1,528 -------- -------- Total stockholders' equity $22,107 $21,790 -------- -------- Total liabilities and stockholders' equity $289,657 $279,406 ======== ========
Glen Burnie Bancorp and Subsidiaries Condensed Consolidated Balance Sheet (dollars in thousands, except per share amounts)
Three Months Ended March 31, 2003 2002 ------------------ Interest income on Loans, including fees $2,819 $3,115 U.S. Treasury and U.S. Government agency securities 487 605 State and municipal securities 375 258 Other 131 143 ------ ------ Total interest income 3,812 4,121 ====== ====== Interest expense on Deposits 899 1,124 Junior subordinated debentures 136 136 Long-term borrowings 108 106 Short-term borrowings 1 2 ------ ------ Total interest expense 1,144 1,368 Net interest income 2,668 2,753 Provision for credit losses 0 0 ------ ------ Net interest income after provision for credit losses 2,668 2,753 Other income Service charges on deposit accounts 258 249 Other fees and commissions 208 138 Other non-interest income 2 3 Gain on termination of post-retirement plan 0 764 Gains on investment securities 92 4 ------ ------ Total other income 560 1,158 Other expenses Salaries and employee benefits 1,465 1,424 Occupancy 212 146 Other expenses 798 900 ------ ------ Total other expenses 2,475 2,470 Income before income taxes 753 1,441 Income tax expense (benefit) 97 453 ------ ------ Net income $656 $988 ====== ====== Net income per share of common stock $0.39 $0.59 ====== ====== Weighted-average shares of common stock outstanding 1,677,339 1,663,770 ========= =========
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