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)
|
Page
|
|||
Part I - Financial Information | |||
Item 1.
|
Consolidated Financial Statements:
|
||
Condensed Consolidated Balance Sheets, September 30, 2011 (unaudited) and December 31, 2010 (audited)
|
3
|
||
Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2011 and 2010 (unaudited)
|
4
|
||
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2011 and 2010 (unaudited)
|
5
|
||
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2011 and 2010 (unaudited)
|
6
|
||
Notes to Unaudited Condensed Consolidated Financial Statements
|
7
|
||
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
12
|
|
Item 4.
|
Controls and Procedures
|
23
|
|
Part II - Other Information | |||
Item 6.
|
Exhibits
|
24
|
|
Signatures
|
25
|
ITEM 1.
|
CONSOLIDATED FINANCIAL STATEMENTS
|
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
|
(unaudited)
|
(audited)
|
||||||
ASSETS
|
||||||||
Cash and due from banks
|
$ | 7,908 | $ | 6,492 | ||||
Interest-bearing deposits in other financial institutions
|
8,921 | 1,568 | ||||||
Federal funds sold
|
759 | 940 | ||||||
Cash and cash equivalents
|
17,588 | 9,000 | ||||||
Investment securities available for sale, at fair value
|
98,038 | 87,268 | ||||||
Federal Home Loan Bank stock, at cost
|
1,579 | 1,745 | ||||||
Maryland Financial Bank stock, at cost
|
30 | 100 | ||||||
Loans, less allowance for credit losses (September 30: $3,665; December 31: $3,400)
|
226,702 | 229,851 | ||||||
Premises and equipment, at cost, less accumulated depreciation
|
4,169 | 4,124 | ||||||
Other real estate owned
|
1,197 | 215 | ||||||
Cash value of life insurance
|
8,374 | 7,954 | ||||||
Other assets
|
4,563 | 6,810 | ||||||
Total assets
|
$ | 362,240 | $ | 347,067 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Liabilities:
|
||||||||
Deposits
|
$ | 309,701 | $ | 294,444 | ||||
Short-term borrowings
|
219 | 4,274 | ||||||
Long-term borrowings
|
20,000 | 20,000 | ||||||
Other liabilities
|
1,916 | 2,017 | ||||||
Total liabilities
|
331,836 | 320,735 | ||||||
Commitments and contingencies
|
||||||||
Stockholders’ equity:
|
||||||||
Common stock, par value $1, authorized 15,000,000 shares; issued and outstanding: September 30: 2,717,907 shares; December 31: 2,702,091 shares
|
2,718 | 2,702 | ||||||
Surplus
|
9,438 | 9,335 | ||||||
Retained earnings
|
16,725 | 15,300 | ||||||
Accumulated other comprehensive gain (loss), net of taxes (benefits)
|
1,523 | (1,005 | ) | |||||
Total stockholders’ equity
|
30,404 | 26,332 | ||||||
Total liabilities and stockholders’ equity
|
$ | 362,240 | $ | 347,067 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Interest income on:
|
||||||||||||||||
Loans, including fees
|
$ | 3,492 | $ | 3,696 | $ | 10,488 | $ | 11,091 | ||||||||
U.S. Treasury and U.S. Government agency securities
|
407 | 482 | 1,160 | 1,495 | ||||||||||||
State and municipal securities
|
408 | 363 | 1,191 | 1,023 | ||||||||||||
Other
|
42 | 67 | 119 | 183 | ||||||||||||
Total interest income
|
4,349 | 4,608 | 12,958 | 13,792 | ||||||||||||
Interest expense on:
|
||||||||||||||||
Deposits
|
754 | 923 | 2,298 | 2,867 | ||||||||||||
Short-term borrowings
|
- | - | 4 | - | ||||||||||||
Long-term borrowings
|
161 | 266 | 479 | 791 | ||||||||||||
Junior subordinated debentures
|
- | 208 | - | 648 | ||||||||||||
Total interest expense
|
915 | 1,397 | 2,781 | 4,306 | ||||||||||||
Net interest income
|
3,434 | 3,211 | 10,177 | 9,486 | ||||||||||||
Provision for credit losses
|
150 | 300 | 375 | 1,050 | ||||||||||||
Net interest income after provision for credit losses
|
3,284 | 2,911 | 9,802 | 8,436 | ||||||||||||
Other income:
|
||||||||||||||||
Service charges on deposit accounts
|
151 | 162 | 469 | 480 | ||||||||||||
Other fees and commissions
|
235 | 226 | 631 | 618 | ||||||||||||
Other non-interest income
|
(30 | ) | 87 | (25 | ) | 90 | ||||||||||
Income on life insurance
|
60 | 67 | 180 | 201 | ||||||||||||
Gains on investment securities
|
85 | 176 | 346 | 176 | ||||||||||||
Total other income
|
501 | 718 | 1,601 | 1,565 | ||||||||||||
Other expenses:
|
||||||||||||||||
Salaries and employee benefits
|
1,658 | 1,660 | 4,936 | 5,009 | ||||||||||||
Occupancy
|
211 | 207 | 640 | 627 | ||||||||||||
Impairment of securities and stocks
|
- | - | 92 | 66 | ||||||||||||
Other expenses
|
907 | 862 | 2,806 | 2,630 | ||||||||||||
Total other expenses
|
2,776 | 2,729 | 8,474 | 8,332 | ||||||||||||
Income before income taxes
|
1,009 | 900 | 2,929 | 1,669 | ||||||||||||
Income tax expense
|
239 | 211 | 692 | 259 | ||||||||||||
Net income
|
$ | 770 | $ | 689 | $ | 2,237 | $ | 1,410 | ||||||||
Basic and diluted earnings per share of common stock
|
$ | 0.29 | $ | 0.25 | $ | 0.83 | $ | 0.52 | ||||||||
Weighted average shares of common stock outstanding
|
2,712,882 | 2,692,329 | 2,707,944 | 2,687,724 | ||||||||||||
Dividends declared per share of common stock
|
$ | 0.10 | $ | 0.10 | $ | 0.30 | $ | 0.30 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Net income
|
$ | 770 | $ | 689 | $ | 2,237 | $ | 1,410 | ||||||||
Other comprehensive income (loss) , net of tax
|
||||||||||||||||
Unrealized gains (losses) securities:
|
||||||||||||||||
Unrealized holding gains arising during the period
|
997 | 642 | 2,736 | 1,855 | ||||||||||||
Reclassification adjustment for (gains) included in net income
|
(208 | ) | (106 | ) | (208 | ) | (106 | ) | ||||||||
Comprehensive income
|
$ | 1,559 | $ | 1,225 | $ | 4,765 | $ | 3,159 |
Nine Months Ended September 30,
|
||||||||
2011
|
2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 2,237 | $ | 1,410 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation, amortization, and accretion
|
989 | 767 | ||||||
Provision for credit losses
|
375 | 1,050 | ||||||
Gains on disposals of assets, net
|
(352 | ) | (258 | ) | ||||
Impairment of securities and stocks
|
92 | 66 | ||||||
Income on investment in life insurance
|
(180 | ) | (201 | ) | ||||
Write-downs of other real estate owned
|
40 | - | ||||||
Changes in assets and liabilities:
|
||||||||
Decrease in other assets
|
550 | 568 | ||||||
(Decrease) increase in other liabilities
|
(100 | ) | 538 | |||||
Net cash provided by operating activities
|
3,651 | 3,940 | ||||||
Cash flows from investing activities:
|
||||||||
Maturities of available for sale mortgage-backed securities
|
15,079 | 14,065 | ||||||
Proceeds from maturities and sales of other investment securities
|
9,715 | 4,185 | ||||||
Purchases of investment securities
|
(31,715 | ) | (23,708 | ) | ||||
Sales of Federal Home Loan Bank stock
|
166 | 45 | ||||||
Purchase of life insurance contracts
|
(240 | ) | - | |||||
Redemption of common stock in the Glen Burnie Statutory Trust I
|
- | 155 | ||||||
Proceeds from sales of other real estate
|
285 | 451 | ||||||
Purchases of other real estate
|
- | (512 | ) | |||||
Decrease in loans, net
|
1,467 | 8,925 | ||||||
Proceeds from the disposition of premises and equipment
|
10 | - | ||||||
Purchases of premises and equipment
|
(338 | ) | (208 | ) | ||||
Net cash (used) provided by investing activities
|
(5,571 | ) | 3,398 | |||||
Cash flows from financing activities:
|
||||||||
Increase in deposits, net
|
15,257 | 4,126 | ||||||
(Decrease) increase in short-term borrowings, net
|
(4,055 | ) | 4 | |||||
Repayment of long-term borrowings
|
- | (7,031 | ) | |||||
Dividends paid
|
(813 | ) | (808 | ) | ||||
Redemption of guaranteed preferres beneficial interests in Glen Burnie Bancorp junior subordinated debentures
|
- | (5,155 | ) | |||||
Common stock dividends reinvested
|
119 | 124 | ||||||
Net cash provided (used) by financing activities
|
10,508 | (8,740 | ) | |||||
Increase (decrease) in cash and cash equivalents
|
8,588 | (1,402 | ) | |||||
Cash and cash equivalents, beginning of year
|
9,000 | 11,434 | ||||||
Cash and cash equivalents, end of period
|
$ | 17,588 | $ | 10,032 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Basic and diluted:
|
||||||||||||||||
Net income
|
$ | 770,000 | $ | 689,000 | $ | 2,237,000 | $ | 1,410,000 | ||||||||
Weighted average common shares outstanding
|
2,712,882 | 2,692,329 | 2,707,944 | 2,687,724 | ||||||||||||
Basic and dilutive net income per share
|
$ | 0.29 | $ | 0.25 | $ | 0.83 | $ | 0.52 |
|
¨
|
Level 1 – Quoted prices in active markets for identical securities
|
|
¨
|
Level 2 – Other significant observable inputs (including quoted prices in active markets for similar securities)
|
|
¨
|
Level 3 – Significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)
|
(Dollars in Thousands)
|
||||||||||||||||
Fair
|
||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Value
|
||||||||||||
December 31, 2010 | ||||||||||||||||
Recurring:
|
||||||||||||||||
Investment securities available for sale (AFS)
|
$ | - | $ | 87,268 | $ | - | $ | 87,268 | ||||||||
Non-recurring:
|
||||||||||||||||
Maryland Financial Bank stock
|
- | 100 | - | 100 | ||||||||||||
Impaired loans
|
- | - | 9,476 | 9,476 | ||||||||||||
OREO
|
- | 215 | - | 215 | ||||||||||||
- | 87,583 | 9,476 | 97,059 | |||||||||||||
Activity:
|
||||||||||||||||
Investment securities AFS
|
||||||||||||||||
Purchases of investment securities
|
- | 31,715 | - | 31,715 | ||||||||||||
Sales, calls and maturities of investment securities
|
- | (24,452 | ) | - | (24,452 | ) | ||||||||||
Amortization/accretion of premium/discount
|
- | (670 | ) | - | (670 | ) | ||||||||||
Increase in market value
|
- | 4,199 | - | 4,199 | ||||||||||||
OTTI on investments
|
- | (22 | ) | - | (22 | ) | ||||||||||
Maryland Financial Bank stock
|
||||||||||||||||
OTTI on stock
|
- | (70 | ) | - | (70 | ) | ||||||||||
Loans
|
||||||||||||||||
New impaired loans
|
- | - | 1,054 | 1,054 | ||||||||||||
Payments and other loan reductions
|
- | - | (1,090 | ) | (1,090 | ) | ||||||||||
Change in total provision
|
- | - | 15 | 15 | ||||||||||||
Loans converted to OREO
|
- | - | (1,307 | ) | (1,307 | ) | ||||||||||
OREO
|
||||||||||||||||
Write-down to Sale Price
|
- | (40 | ) | - | (40 | ) | ||||||||||
OREO converted from loans
|
- | 1,307 | - | 1,307 | ||||||||||||
Sales of OREO
|
- | (285 | ) | - | (285 | ) | ||||||||||
September 30, 2011
|
||||||||||||||||
Recurring:
|
||||||||||||||||
Investment securities AFS
|
- | 98,038 | - | 98,038 | ||||||||||||
Non-recurring:
|
||||||||||||||||
Maryland Financial Bank stock
|
- | 30 | - | 30 | ||||||||||||
Impaired loans
|
- | - | 8,148 | 8,148 | ||||||||||||
OREO
|
- | 1,197 | - | 1,197 | ||||||||||||
$ | - | $ | 99,265 | $ | 8,148 | $ | 107,413 |
September 30, 2011
|
December 31, 2010
|
|||||||||||||||
(In Thousands)
|
Carrying
|
Fair
|
Carrying
|
Fair
|
||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
Financial assets:
|
||||||||||||||||
Cash and due from banks
|
$ | 7,908 | $ | 7,908 | $ | 6,492 | $ | 6,492 | ||||||||
Interest-bearing deposits
|
8,921 | 8,921 | 1,568 | 1,568 | ||||||||||||
Federal funds sold
|
759 | 759 | 940 | 940 | ||||||||||||
Investment securities
|
98,038 | 98,038 | 87,268 | 87,268 | ||||||||||||
Investments in restricted stock
|
1,579 | 1,579 | 1,745 | 1,745 | ||||||||||||
Ground rents
|
178 | 178 | 178 | 178 | ||||||||||||
Loans, net
|
226,702 | 226,441 | 229,851 | 234,426 | ||||||||||||
Accrued interest receivable
|
1,398 | 1,398 | 1,539 | 1,539 | ||||||||||||
Financial liabilities:
|
||||||||||||||||
Deposits
|
309,701 | 291,985 | 294,444 | 269,480 | ||||||||||||
Short-term borrowings
|
219 | 219 | 4,274 | 4,274 | ||||||||||||
Long-term borrowings
|
20,000 | 21,207 | 20,000 | 19,611 | ||||||||||||
Dividends payable
|
232 | 232 | 232 | 232 | ||||||||||||
Accrued interest payable
|
77 | 77 | 55 | 55 | ||||||||||||
Off-balance sheet commitments
|
22,821 | 22,821 | 21,762 | 21,762 |
Less than 12 months
|
12 months or more
|
Total
|
||||||||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Loss
|
Value
|
Loss
|
Value
|
Loss
|
|||||||||||||||||||
Obligations of U.S. Govt Agencies
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||
State and Municipal
|
1,301 | 5 | 1,839 | 72 | 3,140 | 77 | ||||||||||||||||||
Corporate Trust Preferred
|
0 | 0 | 332 | 301 | 332 | 301 | ||||||||||||||||||
Mortgage Backed
|
13,193 | 73 | 1,931 | 28 | 15,124 | 101 | ||||||||||||||||||
$ | 14,494 | $ | 78 | $ | 4,102 | $ | 401 | $ | 18,596 | $ | 479 |
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
At September 30, 2011
|
90 Days or
|
|||||||||||||||||||
(Dollars in Thousands)
|
30-89 Days
|
More and
|
||||||||||||||||||
Current
|
Past Due
|
Still Accruing
|
Nonaccrual
|
Total
|
||||||||||||||||
Commercial and industrial
|
$ | 5,936 | $ | 137 | $ | - | $ | 1,320 | $ | 7,393 | ||||||||||
Commercial real estate
|
65,567 | 979 | - | 3,192 | 69,738 | |||||||||||||||
Consumer and indirect
|
45,556 | 937 | - | 42 | 46,535 | |||||||||||||||
Residential real estate
|
105,479 | 1,703 | 19 | 487 | 107,688 | |||||||||||||||
$ | 222,538 | $ | 3,756 | $ | 19 | $ | 5,041 | $ | 231,354 |
At December 31, 2010
|
90 Days or
|
|||||||||||||||||||
(Dollars in Thousands)
|
30-89 Days
|
More and
|
||||||||||||||||||
Current
|
Past Due
|
Still Accruing
|
Nonaccrual
|
Total
|
||||||||||||||||
Commercial and industrial
|
$ | 5,735 | $ | 98 | $ | - | $ | 1,360 | $ | 7,193 | ||||||||||
Commercial real estate
|
70,676 | 1,252 | - | 4,522 | 76,450 | |||||||||||||||
Consumer and indirect
|
45,155 | 1,580 | - | 125 | 46,860 | |||||||||||||||
Residential real estate
|
102,707 | 100 | - | 976 | 103,783 | |||||||||||||||
$ | 224,274 | $ | 3,029 | $ | - | $ | 6,983 | $ | 234,286 |
At
|
At
|
|||||||
September 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(Dollars in Thousands)
|
||||||||
Restructured loans
|
$ | 2,830 | $ | - | ||||
Non-accrual and 90 days or more and still accruing loans to gross loans
|
2.20 | % | 2.99 | % | ||||
Allowance for credit losses to non-accrual and 90 days or more and still accruing loans
|
72.43 | % | 48.69 | % |
At September 30, 2011
|
||||||||
(Dollars in Thousands)
|
||||||||
Related
|
||||||||
|
Recorded
|
Allowance for
|
||||||
|
Investment
|
Losses
|
||||||
LOANS WITH SPECIFIC RESERVES:
|
||||||||
Non-accrual loans:
|
||||||||
Real-estate - mortgage:
|
||||||||
Residential
|
$ | 239 | $ | 26 | ||||
Commercial
|
1,673 | 467 | ||||||
Comsumer
|
- | - | ||||||
Installment
|
- | - | ||||||
Home Equity
|
- | - | ||||||
Commercial
|
20 | 20 | ||||||
Total non-accrual loans
|
1,932 | 513 | ||||||
Other Impaired loans:
|
||||||||
Real-estate - mortgage:
|
||||||||
Residential
|
1,465 | 445 | ||||||
Commercial
|
2,033 | 550 | ||||||
Comsumer
|
76 | 20 | ||||||
Installment
|
- | - | ||||||
Home Equity
|
- | - | ||||||
Commercial
|
725 | 444 | ||||||
Total Other Impaired loans
|
4,299 | 1,459 | ||||||
TDR ** loans:
|
||||||||
Real Estate - Commercial (one loan)
|
2,818 | 675 | ||||||
LOANS WITHOUT SPECIFIC RESERVES:
|
||||||||
Non-accrual loans:
|
||||||||
Real-estate - mortgage:
|
||||||||
Residential
|
243 | 1 | ||||||
Commercial
|
- | - | ||||||
Comsumer
|
- | - | ||||||
Installment
|
42 | 4 | ||||||
Home Equity
|
- | - | ||||||
Commercial
|
- | - | ||||||
Total non-accrual loans
|
285 | 5 | ||||||
Other Impaired:
|
||||||||
Real-estate - mortgage:
|
||||||||
Residential
|
24 | - | ||||||
Commercial
|
1,047 | 6 | ||||||
Consumer
|
12 | - | ||||||
Installment
|
124 | - | ||||||
Home Equity
|
- | - | ||||||
Commercial
|
255 | 2 | ||||||
Total non-accrual loans
|
1,462 | 8 | ||||||
TDR ** loans:
|
||||||||
Commercial (one loan)
|
12 | - |
At September 30, 2011
|
||||||||
(Dollars in Thousands)
|
||||||||
Average
|
||||||||
|
Recorded
|
Income
|
||||||
|
Amount
|
Recorded
|
||||||
LOANS WITH SPECIFIC RESERVES:
|
||||||||
Non-accrual loans:
|
||||||||
Real-estate - mortgage:
|
||||||||
Residential
|
$ | 239 | $ | - | ||||
Commercial
|
1,699 | 72 | ||||||
Comsumer
|
- | - | ||||||
Installment
|
- | - | ||||||
Home Equity
|
- | - | ||||||
Commercial
|
20 | 1 | ||||||
Total non-accrual loans
|
1,958 | 73 | ||||||
Other Impaired loans:
|
||||||||
Real-estate - mortgage:
|
||||||||
Residential
|
1,470 | 46 | ||||||
Commercial
|
2,061 | 105 | ||||||
Comsumer
|
77 | 7 | ||||||
Installment
|
- | - | ||||||
Home Equity
|
- | - | ||||||
Commercial
|
741 | 30 | ||||||
Total Other Impaired loans
|
4,349 | 188 | ||||||
TDR ** loans:
|
||||||||
Real Estate - Commercial (one loan)
|
2,814 | - | ||||||
LOANS WITHOUT SPECIFIC RESERVES:
|
||||||||
Non-accrual loans:
|
||||||||
Real-estate - mortgage:
|
||||||||
Residential
|
247 | 5 | ||||||
Commercial
|
- | - | ||||||
Comsumer
|
- | - | ||||||
Installment
|
- | - | ||||||
Home Equity
|
- | - | ||||||
Commercial
|
- | - | ||||||
Total non-accrual loans
|
247 | 5 | ||||||
Other Impaired:
|
||||||||
Real-estate - mortgage:
|
||||||||
Residential
|
- | - | ||||||
Commercial
|
1,054 | 39 | ||||||
Consumer
|
- | - | ||||||
Installment
|
- | - | ||||||
Home Equity
|
- | - | ||||||
Commercial
|
293 | 16 | ||||||
Total non-accrual loans
|
1,347 | 55 | ||||||
TDR ** loans:
|
||||||||
Commercial (one loan)
|
24 | 1 |
At September 30, 2011
|
||||||||||||
(Dollars in Thousands)
|
Pre-Modification
|
Post-Modification
|
||||||||||
Outstanding
|
Outstanding
|
|||||||||||
Number of
|
Recorded
|
Recorded
|
||||||||||
Contracts
|
Investment
|
Investment
|
||||||||||
Troubled Debt Restructurings:
|
||||||||||||
Real Estate - Residential
|
- | $ | - | $ | - | |||||||
Real Estate - Commercial
|
1 | 2,759 | 2,818 | |||||||||
Commercial
|
1 | 99 | 12 | |||||||||
Finance leases
|
- | - | - |
Troubled Debt Restructurings
|
Number of
|
Recorded
|
||||||||||
That Subsequently Defaulted
|
Contracts
|
Investment
|
||||||||||
Troubled Debt Restructurings:
|
||||||||||||
Real Estate - Residential
|
- | $ | - | |||||||||
Real Estate - Commercial
|
1 | 2,818 | ||||||||||
Commercial
|
- | - | ||||||||||
Finance leases
|
- | - |
Commercial
|
Consumer
|
|||||||||||||||||||||||
September 30, 2011
|
and
|
Commercial
|
and
|
Residential
|
||||||||||||||||||||
(Dollars in Thousands)
|
Industrial
|
Real Estate
|
Indirect
|
Real Estate
|
Unallocated
|
Total
|
||||||||||||||||||
Balance, beginning of year
|
$ | 263 | $ | 2,108 | $ | 830 | $ | 196 | $ | 3 | $ | 3,400 | ||||||||||||
Provision for credit losses
|
305 | (95 | ) | 135 | 447 | (417 | ) | 375 | ||||||||||||||||
Recoveries
|
4 | 56 | 333 | 1 | - | 394 | ||||||||||||||||||
Loans charged off
|
(6 | ) | - | (494 | ) | (4 | ) | - | (504 | ) | ||||||||||||||
Balance, end of quarter
|
$ | 566 | $ | 2,069 | $ | 804 | $ | 640 | $ | (414 | ) | $ | 3,665 |
Nine Months Ended September 30,
|
||||||||
2011
|
2010
|
|||||||
(Dollars in Thousands)
|
||||||||
Beginning balance
|
$ | 3,573 | ||||||
Charge-offs
|
(1,087 | ) | ||||||
Recoveries
|
527 | |||||||
Net charge-offs
|
(560 | ) | ||||||
Provisions charged to operations
|
1,050 | |||||||
Ending balance
|
$ | 4,063 | ||||||
Average loans
|
$ | 229,665 | $ | 231,637 | ||||
Net charge-offs to average loans (annualized)
|
0.06 | % | 0.32 | % |
Commercial
|
Consumer
|
|||||||||||||||||||
September 30, 2011
|
and
|
Commercial
|
and
|
Residential
|
||||||||||||||||
Industrial
|
Real Estate
|
Indirect
|
Real Estate
|
Total
|
||||||||||||||||
Pass
|
$ | 5,915 | $ | 57,402 | $ | 45,124 | $ | 105,007 | $ | 213,448 | ||||||||||
Special mention
|
466 | 4,765 | 1,131 | 977 | 7,339 | |||||||||||||||
Substandard
|
1,012 | 7,571 | 174 | 1,704 | 10,461 | |||||||||||||||
Doubtful
|
- | - | 106 | - | 106 | |||||||||||||||
Loss
|
- | - | - | - | - | |||||||||||||||
$ | 7,393 | $ | 69,738 | $ | 46,535 | $ | 107,688 | $ | 231,354 |
September 30, 2011
|
||||||||||||||||||||
(Dollars in Thousands)
|
Commercial
|
Consumer
|
||||||||||||||||||
and
|
Commercial
|
and
|
Residential
|
|||||||||||||||||
Industrial
|
Real Estate
|
Indirect
|
Real Estate
|
Total
|
||||||||||||||||
Allowance for individually evaluated impaired:
|
||||||||||||||||||||
Balance, beginning of year
|
$ | 183 | $ | 1,701 | $ | 21 | $ | 34 | $ | 1,939 | ||||||||||
Provision for credit losses
|
281 | (16 | ) | - | 440 | 705 | ||||||||||||||
Recoveries
|
3 | 7 | - | 1 | 11 | |||||||||||||||
Loans charged off
|
(3 | ) | - | (1 | ) | (4 | ) | (8 | ) | |||||||||||
Balance, end of quarter
|
$ | 464 | $ | 1,692 | $ | 20 | $ | 471 | $ | 2,647 | ||||||||||
Allowance for collectively evaluated impaired:
|
||||||||||||||||||||
Balance, beginning of year
|
$ | - | $ | - | $ | 8 | $ | - | $ | 8 | ||||||||||
Provision for credit losses
|
2 | (16 | ) | 157 | 1 | 144 | ||||||||||||||
Recoveries
|
- | 22 | 333 | - | 355 | |||||||||||||||
Loans charged off
|
- | - | (494 | ) | - | (494 | ) | |||||||||||||
Balance, end of quarter
|
$ | 2 | $ | 6 | $ | 4 | $ | 1 | $ | 13 |
Nine Months Ended September 30,
|
||||||||
2011
|
2010
|
|||||||
(Dollars in Thousands)
|
||||||||
Beginning balance
|
$ | 200 | $ | 200 | ||||
Provisions charged to operations
|
- | - | ||||||
Ending balance
|
$ | 200 | $ | 200 |
Over 1
|
||||||||||||||||||||
Over 3 to
|
Through
|
Over
|
||||||||||||||||||
0-3 Months
|
12 Months
|
5 Years
|
5 Years
|
Total
|
||||||||||||||||
(Dollars in Thousands)
|
||||||||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and due from banks
|
$ | - | $ | - | $ | - | $ | - | $ | 16,829 | ||||||||||
Federal funds and overnight deposits
|
759 | - | - | - | 759 | |||||||||||||||
Securities
|
- | - | 1,051 | 96,987 | 98,038 | |||||||||||||||
Loans
|
15,890 | 8,549 | 70,584 | 131,679 | 226,702 | |||||||||||||||
Fixed assets
|
- | - | - | - | 4,169 | |||||||||||||||
Other assets
|
- | - | - | - | 15,743 | |||||||||||||||
Total assets
|
$ | 16,649 | $ | 8,549 | $ | 71,635 | $ | 228,666 | $ | 362,240 | ||||||||||
Liabilities:
|
||||||||||||||||||||
Demand deposit accounts
|
$ | - | $ | - | $ | - | $ | - | $ | 74,964 | ||||||||||
NOW accounts
|
23,460 | - | - | - | 23,460 | |||||||||||||||
Money market deposit accounts
|
17,969 | - | - | - | 17,969 | |||||||||||||||
Savings accounts
|
56,429 | - | - | - | 56,429 | |||||||||||||||
IRA accounts
|
2,989 | 10,550 | 26,192 | 1,646 | 41,377 | |||||||||||||||
Certificates of deposit
|
16,852 | 35,647 | 42,525 | 478 | 95,502 | |||||||||||||||
Short-term borrowings
|
219 | - | - | - | 219 | |||||||||||||||
Long-term borrowings
|
- | - | - | 20,000 | 20,000 | |||||||||||||||
Other liabilities
|
- | - | - | - | 1,916 | |||||||||||||||
Stockholders’ equity:
|
- | - | - | - | 30,404 | |||||||||||||||
Total liabilities and stockholders' equity
|
$ | 117,918 | $ | 46,197 | $ | 68,717 | $ | 22,124 | $ | 362,240 | ||||||||||
GAP
|
$ | (101,269 | ) | $ | (37,648 | ) | $ | 2,918 | $ | 206,542 | ||||||||||
Cumulative GAP
|
$ | (101,269 | ) | $ | (138,917 | ) | $ | (135,999 | ) | $ | 70,543 | |||||||||
Cumulative GAP as a % of total assets
|
-27.96 | % | -38.35 | % | -37.54 | % | 19.47 | % |
Immediate Change in Rates
|
||||||||||||||||
-200
|
-100
|
+100
|
+200
|
|||||||||||||
Basis Points
|
Basis Points
|
Basis Points
|
Basis Points
|
|||||||||||||
% Change in Net Interest Income
|
-4.3 | % | -2.4 | % | 2.1 | % | 1.8 | % | ||||||||
% Change in Economic Value of Equity
|
-22.5 | % | -13.9 | % | 0.8 | % | -7.4 | % |
ITEM 4.
|
CONTROLS AND PROCEDURES
|
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
|
Articles of Amendment, dated October 8, 2003 (incorporated by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 2003, 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)
|
3.4
|
By-Laws (incorporated by reference to Exhibit 3.4 to the Registrant’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 2003, 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 99.1 to Post-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form S-8, File No. 333-46943)
|
10.3
|
Amended and Restated Change-in-Control Severance Plan (incorporated by reference to Exhibit 3.2 to the Registrant’s Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2001, 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
|
32.1
|
Section 1350 Certifications
|
101
|
Interactive data files providing financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September30, 2011 in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets, September 30, 2011 and December 31, 2010, (ii) Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2011 and 2010, (iii) Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2011 and 2010, (iv) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2011 and 2010, and (v) Notes to Unaudited Condensed Consolidated Financial Statements
|
GLEN BURNIE BANCORP
|
||
(Registrant)
|
||
Date: November 8, 2011
|
By:
|
/s/ Michael G. Livingston.
|
Michael G. Livingston
|
||
President, Chief Executive Officer
|
||
By:
|
/s/ John E. Porter
|
|
John E. Porter
|
||
Chief Financial Officer
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;
|
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date: November 8, 2011
|
/s/ Michael G. Livingston
|
Michael G. Livingston
|
|
Chief Executive Officer
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principals;
|
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.
|
Date: November 8, 2011
|
/s/ John E. Porter
|
John E. Porter
|
|
Chief Financial Officer
|
|
(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: November 8, 2011
|
/s/ Michael G. Livingston
|
Michael G. Livingston
|
|
President, Chief Executive Officer
|
|
/s/ John E. Porter
|
|
John E. Porter
|
|
Chief Financial Officer
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Loans, allowance for credit losses | $ 3,665 | $ 3,400 |
Common stock, par value | $ 1 | $ 1 |
Common stock, authorized | 15,000,000 | 15,000,000 |
Common stock, issued | 2,717,907 | 2,702,091 |
Common stock, outstanding | 2,717,907 | 2,702,091 |
Document and Entity Information | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Nov. 03, 2011 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2011 | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | GLBZ | |
Entity Registrant Name | GLEN BURNIE BANCORP | |
Entity Central Index Key | 0000890066 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 2,717,907 |
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EARNINGS PER SHARE | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE |
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.
Diluted
earnings per share calculations were not required for the three and
nine months ended September 30, 2011 and 2010, since there were no
options outstanding.
|
RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
RECENT ACCOUNTING PRONOUNCEMENTS |
NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS
In
July 2010, the FASB issued ASU No. 2010-20, Receivables (Topic 310),
Disclosures about the Credit Quality of Financing Receivables and
the Allowance for Credit Losses. The main objective of this
ASU is to provide financial statement users with greater
transparency about an entity’s allowance for credit losses
and the credit quality of its financing receivables. The ASU
requires that entities provide additional information to assist
financial statement users in assessing their credit risk exposures
and evaluating the adequacy of its allowance for credit losses. For
the Company, the disclosures as of the end of a reporting period
were required for the annual reporting periods ended December 31,
2010. Required disclosures about activity that occurs
during a reporting period are effective for interim and annual
reporting periods beginning January 1, 2011. The adoption of this
ASU resulted in additional disclosures in the Company’s
financial statements regarding its loan portfolio and related
allowance for loan losses but does not change the accounting for
loans or the allowance. The Company has complied with the reporting
requirements as of September 30, 2011.
In
April 2011, the FASB issued ASU No. 2011-02, Receivable (Topic
310), A Creditors
Determination of Whether a Restructuring is a Troubled Debt
Restructuring. The main objective of the ASU is to clarify a
creditor’s evaluation of whether in modifying a loan, it has
granted a concession in circumstances that qualify the loan as a
Troubled Debt Restructured (TDR) loan. These loans are subject to
various accounting and disclosure requirements. The ASU is
effective for the first interim or annual period beginning on or
after June 15, 2011, and should be applied retrospectively to the
beginning of the annual period of adoption. Certain disclosures are
required for loans considered as TDR loans resulting from the
application of the ASU that were not considered TDR under prior
guidance. The Company has complied with ASU No. 2011-02 as of
September 30, 2011.
In
May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement
(Topic 820), Amendments to Achieve Common
Fair Value Measurement and Disclosure Requirements in U.S. GAAP and
IFRSs. The main objective of the ASU is to conform the
requirements for measuring fair value and the disclosure
information under U.S. generally accepted accounting principles
(GAAP) and International Financial Reporting Standards (IFRS). The
amendments change the wording used to describe many of the
requirements in U.S. GAAP for measuring fair value and for the
disclosure about fair value measurements. Other amendments clarify
existing requirements and change particular principles or
requirements for measuring fair value or disclosing information
about fair value measurements. The ASU is effective for the first
interim or annual period beginning on or after December 15, 2011,
early application for public entities is not permitted. The Company
will review the requirements of ASU No. 2011-04 and comply with its
requirements. The adoption of this ASU is not expected to have a
material impact on the Company’s consolidated financial
statements.
The
FASB has issued several exposure drafts which, if adopted, would
significantly alter the Company’s (and all other financial
institutions’) method of accounting for, and reporting, its
financial assets and some liabilities from a historical cost method
to a fair value method of accounting as well as the reported amount
of net interest income. Also, the FASB has issued an exposure draft
regarding a change in the accounting for leases. Under this
exposure draft, the total amount of “lease rights” and
total amount of future payments required under all leases would be
reflected on the balance sheets of all entities as assets and debt.
If the changes under discussion in either of these exposure drafts
are adopted, the financial statements of the Company could be
materially impacted as to the amounts of recorded assets,
liabilities, capital, net interest income, interest expense,
depreciation expense, rent expense and net income. The Company has
not determined the extent of the possible changes at this time. The
exposure drafts are in different stages of review, approval and
possible adoption. The FASB is scheduled to complete
their deliberations by year end December 31, 2011.
|
FAIR VALUE | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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FAIR VALUE |
NOTE 4 – FAIR VALUE
ASC
820-10, formerly SFAS No. 157, defines fair value, establishes
a framework for measuring fair value and expands disclosure of fair
value measurements.
Fair Value Hierarchy
ASC
820-10 specifies a hierarchy of valuation techniques based on
whether the inputs to those valuation techniques are observable or
unobservable. In accordance with ASC 820-10, these inputs are
summarized in the three broad levels listed below:
In
determining the appropriate levels, the Company performs a detailed
analysis of the assets and liabilities that are subject to ASC
820-10.
The
Company’s bond holdings in the investment securities
portfolio are the only asset or liability subject to fair value
measurements on a recurring basis. No assets are valued
under Level 1 inputs at September 30, 2011 or December 31,
2010. The Company has assets measured by fair value
measurements on a non-recurring basis during 2011. At
September 30, 2011, these assets include 22 loans
classified as impaired, which include nonaccrual, past due 90 days
or more and still accruing, or troubled debt restructuring, and a
homogeneous pool of indirect loans all considered to be impaired
loans, which are valued under Level 3 inputs and two properties
classified as OREO valued under Level 2 inputs.
The
changes in the assets subject to fair value measurements are
summarized below by Level:
The
estimated fair values of the Company’s financial instruments
at September 30, 2011 and December 31, 2010 are summarized below.
The fair values of a significant portion of these financial
instruments are estimates derived using present value techniques
and may not be indicative of the net realizable or liquidation
values. Also, the calculation of estimated fair values is based on
market conditions at a specific point in time and may not reflect
current or future fair values.
Fair
values are based on quoted market prices for similar instruments or
estimated using discounted cash flows. The discounts used are
estimated using comparable market rates for similar types of
instruments adjusted to be commensurate with the credit risk,
overhead costs and optionality of such instruments.
The
fair value of cash and due from banks, federal funds sold,
investments in restricted stocks and accrued interest receivable
are equal to the carrying amounts. The fair values of investment
securities are determined using market quotations. The fair value
of loans receivable is estimated using discounted cash flow
analysis.
The
fair value of non-interest bearing deposits, interest-bearing
checking, savings, and money market deposit accounts, securities
sold under agreements to repurchase, and accrued interest payable
are equal to the carrying amounts. The fair value of fixed-maturity
time deposits is estimated using discounted cash flow
analysis.
The
gross unrealized losses and fair value, aggregated by investment
category and length of time that individual securities have been in
a continuous unrealized loss position, at September 30, 2011 are as
follows:
At
September 30, 2011, the company owned one pooled trust preferred
security issued by Regional Diversified Funding, Senior Notes with
a Fitch rating of C. The market for these securities at
September 30, 2011 was not active and markets for similar
securities were also not active. As a result, the
Company had cash flow testing performed as of September 30, 2011 by
an unrelated third party in order to measure the possible extent of
other-than-temporary-impairment
(“OTTI”). This testing assumed future
defaults on the currently performing financial institutions of 75
basis points applied annually with a 15% recovery after a two year
lag on both current and future defaulting financial
institutions. As a result of this testing, a write-down
of $22,000 was taken on this security in the first quarter of
2011.
Maryland
Financial Bank stock was written down $70,000 in the second quarter
of 2011 due to a prospectus that offered stock at a discount from
par.
Declines
in the fair value of held to maturity and available for sale
securities below their cost that are deemed to be other than
temporary are reflected in earnings as realized
losses. In estimating other-than-temporary-impairment
losses, management considers, among other things, (i) the length of
time and the extent to which the fair value has been less than
cost, (ii) the financial condition and near-term prospects of the
issuer, and (iii) the intent and ability of the Company to retain
it’s investment in the issuer for a period of time sufficient
to allow for any anticipated recovery in fair value.
As
of September 30, 2011, management had the ability and intent to
hold the securities classified as available for sale for a period
of time sufficient for a recovery of cost. On September
30, 2011 the Bank held 10 investment
securities having continuous unrealized loss positions for more
than 12 months. Management has determined that all
unrealized losses are either due to increases in market interest
rates over the yields available at the time the underlying
securities were purchased, current call features that are nearing,
and the effect the sub-prime market has had on all mortgage-backed
securities. The Bank has no mortgage-backed securities
collateralized by sub-prime mortgages. The fair value is
expected to recover as the bonds approach their maturity date or
repricing date or if market yields for such investments
decline. Management does not believe any of the
securities are impaired due to reasons of credit
quality. Except as noted above, as of September 30,
2011, management believes the impairments detailed in the table
above are temporary and no impairment loss has been realized in the
Company’s consolidated income statement.
A
rollforward of the cumulative other-than-temporary credit losses
recognized in earnings for all debt securities for which a portion
of an other-than-temporary loss is recognized in accumulated other
comprehensive loss is as follows:
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Net income | $ 770 | $ 689 | $ 2,237 | $ 1,410 |
Unrealized gains (losses) securities: | ||||
Unrealized holding gains arising during the period | 997 | 642 | 2,736 | 1,855 |
Reclassification adjustment for (gains) included in net income | (208) | (106) | (208) | (106) |
Comprehensive income | $ 1,559 | $ 1,225 | $ 4,765 | $ 3,159 |
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BASIS OF PRESENTATION | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
BASIS OF PRESENTATION |
NOTE 1 - BASIS OF PRESENTATION
The
accompanying condensed balance sheet as of December 31, 2010, which
has been derived from audited financial statements, and the
unaudited interim consolidated financial statements were prepared
in accordance with instructions for Form 10-Q and Article 10 of
Regulation S-X 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 and
nine months ended September 30, 2011 and 2010.
Operating
results for the three and nine months ended September 30, 2011 is
not necessarily indicative of the results that may be expected for
the year ending December 31, 2011.
|