10-Q/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A
(Amendment No. 1)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly period ended June 30, 2012

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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No ¨

Indicate by check mark if the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨Accelerated filer ¨Non-Accelerated Filer ¨ Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨No x

At August 6, 2012, the number of shares outstanding of the registrant’s common stock was 2,730,212.

GLEN BURNIE BANCORP

The Registrant hereby amends Item 6 of its Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, which was filed with the Commission on August 10, 2012. The purpose of the amendment is to include interactive data files providing financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T.

PART II - OTHER INFORMATION

ITEM 6. 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 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 (previously filed)

31.2 Rule 15d-14(a) Certification of Chief Financial Officer (previously filed)

32.1 Section 1350 Certifications (previously filed)

99.1 Press release dated August 10, 2012 (previously filed)

101 Interactive data files providing financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets, June 30, 2012 and December 31, 2011, (ii) Condensed Consolidated Statements of Income for the three and six months ended June 30, 2012 and 2011, (iii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2012 and 2011, (iv) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011, and (v) Notes to Unaudited Condensed Consolidated Financial Statements (filed herewith)

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: September 7, 2012	By:	/s/ Michael G. Livingston.
		Michael G. Livingston
		President, Chief Executive Officer

By:	/s/ John E. Porter
	John E. Porter
	Chief Financial Officer

XML

Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2012

Recent Accounting Pronouncements

NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS

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.

In April 2011, the FASB issued ASU No. 2011-02, Receivable (Topic 310), A Creditor’s 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 was effective for the first interim or annual period beginning on or after June 15, 2011, and was 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’s compliance with ASU No. 2011-02 did not have a material impact on the Company’s consolidated financial statements.

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 was 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’s compliance with ASU No. 2011-04 did not have a material impact on the Company’s consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220):  Presentation of Comprehensive Income.  The amendments in this Update improve the comparability, clarity, consistency, and transparency of financial reporting and increase the prominence of items reported in other comprehensive income.  To increase the prominence of items reported in other comprehensive income and to facilitate convergence of U.S. GAAP and IFRS, the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity was eliminated.  The amendments require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive.

In December 2011, the FASB issued ASU 2011-10, Property, Plant, and Equipment (Topic 360):  Derecognition of in Substance Real Estate-a Scope Clarification.  The amendments in this Update affect entities that cease to have a  controlling financial interest in a subsidiary that is in substance real estate as a result of default on the subsidiary's nonrecourse debt. Under the amendments in this Update, when a parent (reporting entity) ceases to have a controlling financial interest in a subsidiary that is in substance real estate as a result of default on the subsidiary's nonrecourse debt, the reporting entity should apply the guidance in Subtopic 360-20 to determine whether it should derecognize the in substance real estate. Generally, a reporting entity would not satisfy the requirements to derecognize the in substance real estate before the legal transfer of the real estate to the lender and the extinguishment of the related nonrecourse indebtedness.  That is, even if the reporting entity ceases to have a controlling financial interest under Subtopic 810-10, the reporting entity would continue to include the real estate, debt, and the results of the subsidiary's operations in its consolidated financial statements until legal title to the real estate is transferred to legally satisfy the debt.  The amendments in this Update should be applied on a prospective basis to deconsolidation events occurring after the effective date.  Prior periods should not be adjusted even if the reporting entity has continuing involvement with previously derecognized in substance real estate entities.  For public entities, the amendments in this Update are effective for fiscal years, and interim periods within those years, beginning on or after June 15, 2012. Early adoption is permitted.  This ASU is not expected to have a significant impact on the Company’s financial statements.

In December 2011, the FASB issued ASU 2011-12, Comprehensive Income (Topic 220):  Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05.  In order to defer only those changes in Update 2011-05 that relate to the presentation of reclassification adjustments, the paragraphs in this Update supersede certain pending paragraphs in Update 2011-05.  Entities should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before Update 2011-05.  All other requirements in Update 2011-05 are not affected by this Update, including the requirement to report comprehensive income either in a single continuous financial statement or in two separate but consecutive financial statements. Public entities should apply these requirements for fiscal years, and interim periods within those years, beginning after December 15, 2011. The Company has provided the necessary disclosure in the Consolidated Statement of Comprehensive Income.

XML

Earnings Per Share

6 Months Ended

Jun. 30, 2012

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.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Basic and diluted:
Net income	$	656,000	$	758,000	$	1,386,000	$	1,467,000
Weighted average common shares outstanding		2,726,428		2,708,233		2,724,423		2,705,434
Basic and dilutive net income per share	$	0.24	$	0.28	$	0.51	$	0.54

Diluted earnings per share calculations were not required for the three and six months ended June 30, 2012 and 2011, since there were no options outstanding.

XML

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
ASSETS
Cash and due from banks	$ 7,059	$ 6,877
Interest-bearing deposits in other financial institutions	166	2,423
Federal funds sold	258	654
Cash and cash equivalents	7,483	9,954
Investment securities available for sale, at fair value	102,510	102,867
Federal Home Loan Bank stock, at cost	1,718	1,520
Maryland Financial Bank stock	30	30
Loans, less allowance for credit losses (June 30: $3,782; December 31: $3,931)	249,353	232,734
Premises and equipment, at cost, less accumulated depreciation	3,985	4,108
Other real estate owned	699	1,111
Cash value of life insurance	8,555	8,433
Other assets	4,606	4,503
Total assets	378,939	365,260
Liabilities:
Deposits	321,798	311,945
Short-term borrowings	3,000	255
Long-term borrowings	20,000	20,000
Other liabilities	1,824	1,849
Total liabilities	346,622	334,049
Commitments and contingencies
Stockholders' equity:
Common stock, par value $1, authorized 15,000,000 shares; issued and outstanding: June 30: 2,726,515 shares; December 31: 2,717,909 shares	2,726	2,718
Surplus	9,503	9,438
Retained earnings	18,051	17,209
Accumulated other comprehensive gain, net of taxes	2,037	1,846
Total stockholders' equity	32,317	31,211
Total liabilities and stockholders' equity	$ 378,939	$ 365,260

XML

Condensed Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities:
Net income	$ 1,386	$ 1,467
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and accretion	1,108	597
Provision for credit losses		225
Gains on disposals of assets, net	(56)	(261)
Impairment of securities and stocks		92
Income on investment in life insurance	(122)	(119)
Changes in assets and liabilities:
(Increase) decrease in other assets	(250)	266
Decrease in other liabilities	(27)	(172)
Net cash provided by operating activities	2,039	2,095
Cash flows from investing activities:
Maturities of available for sale mortgage-backed securities	16,747	11,843
Proceeds from maturities and sales of other investment securities	3,837	3,188
Purchases of investment securities	(20,736)	(21,412)
Purchase of Federal Home Loan Bank stock	(198)
Sales of Federal Home Loan Bank stock		111
Purchase of life insurance contracts		(240)
Proceeds from sales of other real estate	412	87
Increase in loans, net	(16,619)	(1,837)
Purchases of premises and equipment	(81)	(184)
Net cash used by investing activities	(16,638)	(8,444)
Cash flows from financing activities:
Increase in deposits, net	9,853	12,291
Increase (decrease) in short-term borrowings, net	2,745	(4,089)
Dividends paid	(543)	(542)
Common stock dividends reinvested	73	80
Net cash provided by financing activities	12,128	7,740
(Decrease) increase in cash and cash equivalents	(2,471)	1,391
Cash and cash equivalents, beginning of year	9,954	9,000
Cash and cash equivalents, end of period	$ 7,483	$ 10,391

XML

Basis Of Presentation

6 Months Ended

Jun. 30, 2012

Basis Of Presentation

NOTE 1 - BASIS OF PRESENTATION

The accompanying condensed balance sheet as of December 31, 2011, 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 six months ended June 30, 2012 and 2011.

Operating results for the three and six months ended June 30, 2012 is not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

XML

Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Loans, allowance for credit losses	$ 3,782	$ 3,931
Common stock, par value	$ 1	$ 1
Common stock, authorized	15,000,000	15,000,000
Common stock, issued	2,726,515	2,717,909
Common stock, outstanding	2,726,515	2,717,909

XML

Gross Unrealized Losses and Fair Value Aggregated by Investment Category and Length of Time in Continuous Unrealized Loss Position (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012
Available for Sale Securities Continuous Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	$ 12,769
Less than 12 months Unrealized Loss	146
12 months or more Fair Value	522
12 months or more Unrealized Loss	255
Total Fair Value	13,291
Total Unrealized Loss	401
Obligations of U.S. Govt Agencies
Available for Sale Securities Continuous Unrealized Loss Position [Line Items]
Less than 12 months Fair Value
Less than 12 months Unrealized Loss
12 months or more Fair Value
12 months or more Unrealized Loss
Total Fair Value
Total Unrealized Loss
State and Municipal
Available for Sale Securities Continuous Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	5,665
Less than 12 months Unrealized Loss	102
12 months or more Fair Value	281
12 months or more Unrealized Loss	18
Total Fair Value	5,946
Total Unrealized Loss	120
Corporate Trust Preferred
Available for Sale Securities Continuous Unrealized Loss Position [Line Items]
12 months or more Fair Value	241
12 months or more Unrealized Loss	237
Total Fair Value	241
Total Unrealized Loss	237
Mortgage Backed
Available for Sale Securities Continuous Unrealized Loss Position [Line Items]
Less than 12 months Fair Value	7,104
Less than 12 months Unrealized Loss	44
Total Fair Value	7,104
Total Unrealized Loss	$ 44

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Aug. 06, 2012
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
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		2,730,212

XML

Rollforward of Cumulative Other Than Temporary Credit Losses Recognized in Earnings for Debt Securities (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Jun. 30, 2012
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Estimated credit losses, beginning of year	$ 3,155	$ 3,247
Credit losses - no previous OTTI recognized	70
Credit losses - previous OTTI recognized	22
Estimated credit losses, end of period	$ 3,247	$ 3,247

XML

Condensed Consolidated Statements Of Income (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Interest income on:
Loans, including fees	$ 3,255	$ 3,486	$ 6,619	$ 6,996
U.S. Treasury and U.S. Government agency securities	211	412	465	753
State and municipal securities	438	399	855	783
Other	24	26	45	77
Total interest income	3,928	4,323	7,984	8,609
Interest expense on:
Deposits	670	766	1,358	1,544
Short-term borrowings	1	1	1	4
Long-term borrowings	159	160	319	318
Total interest expense	830	927	1,678	1,866
Net interest income	3,098	3,396	6,306	6,743
Provision for credit losses				225
Net interest income after provision for credit losses	3,098	3,396	6,306	6,518
Other income:
Service charges on deposit accounts	132	153	275	318
Other fees and commissions	191	202	378	396
Other non-interest income	4	2	9	5
Income on life insurance	62	59	122	120
Gains on investment securities	33	73	56	261
Total other income	422	489	840	1,100
Other expenses:
Salaries and employee benefits	1,726	1,636	3,458	3,278
Occupancy	200	200	397	429
Impairment of securities and stocks		70		92
Other expenses	789	981	1,546	1,899
Total other expenses	2,715	2,887	5,401	5,698
Income before income taxes	805	998	1,745	1,920
Income tax expense	149	240	359	453
Net income	$ 656	$ 758	$ 1,386	$ 1,467
Basic and diluted earnings per share of common stock	$ 0.24	$ 0.28	$ 0.51	$ 0.54
Weighted average shares of common stock outstanding	2,726,428	2,708,233	2,724,423	2,705,434
Dividends declared per share of common stock	$ 0.10	$ 0.10	$ 0.20	$ 0.20

XML

Fair Value (Tables)

6 Months Ended

Jun. 30, 2012

Summary of Changes in Asset Subject to Fair Value Measurement by Level

The changes in the assets subject to fair value measurements are summarized below by Level:

	(Dollars in Thousands)
									Fair
December 31, 2011	Level 1		Level 2			Level 3			Value
Recurring:
Investment securities available for sale (AFS)	$	-	$	102,867		$	-		$	102,867
Non-recurring:
Maryland Financial Bank stock		-		30			-			30
Impaired loans		-		-			8,309			8,309
OREO		-		1,111			-			1,111
		-		104,008			8,309			112,317
Activity:
Investment securities AFS
Purchases of investment securities		-		20,736			-			20,736
Sales, calls and maturities of investment securities		-		(20,584	)		-			(20,584	)
Amortization/accretion of premium/discount		-		(883	)		-			(883	)
Increase in market value		-		374			-			374
Loans
New impaired loans		-		-			375			375
Payments and other loan reductions		-		-			(1,437	)		(1,437	)
Change in total provision		-		-			236			236
OREO
Sales of OREO		-		(412	)		-			(412	)
June 30, 2012
Recurring:
Investment securities AFS		-		102,510			-			102,510
Non-recurring:
Maryland Financial Bank stock		-		30			-			30
Impaired loans		-		-			7,483			7,483
OREO		-		699			-			699
	$	-	$	103,239		$	7,483		$	110,722

Summary of Estimated Fair Values of Financial Instruments

The estimated fair values of the Company’s financial instruments at June 30, 2012 and December 31, 2011 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.

	June 30, 2012				December 31, 2011
(In Thousands)	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial assets:
Cash and due from banks	$	7,059	$	7,059	$	6,877	$	6,877
Interest-bearing deposits		166		166		2,423		2,423
Federal funds sold		258		258		654		654
Investment securities		102,510		102,510		102,867		102,867
Investments in restricted stock		1,718		1,718		1,520		1,520
Ground rents		175		175		175		175
Loans, net		249,353		251,387		232,734		231,912
Accrued interest receivable		1,558		1,558		1,542		1,542
Financial liabilities:
Deposits		321,798		305,402		311,945		293,713
Short-term borrowings		3,000		3,000		255		255
Long-term borrowings		20,000		21,737		20,000		21,425
Dividends payable		273		273		272		272
Accrued interest payable		54		54		48		48
Off-balance sheet commitments		26,176		26,176		22,736		22,736

Gross Unrealized Losses and Fair Value Aggregated by Investment Category and Length of Time in Continuous Unrealized Loss Position

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 June 30, 2012 are as follows:

Securities available for sale:	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	$	-	$	-	$	-	$	-	$	-	$	-
State and Municipal		5,665		102		281		18		5,946		120
Corporate Trust Preferred		-		-		241		237		241		237
Mortgage Backed		7,104		44		-		-		7,104		44
	$	12,769	$	146	$	522	$	255	$	13,291	$	401

Rollforward of Cumulative Other Than Temporary Credit Losses Recognized in Earnings for Debt Securities

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:

	At		At
	June 30,		December 31,
	2012		2011
	(Dollars in Thousands)
Estimated credit losses, beginning of year	$	3,247	$	3,155
Credit losses - no previous OTTI recognized		-		70
Credit losses - previous OTTI recognized		-		22
Estimated credit losses, end of period	$	3,247	$	3,247

XML

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2012

Basic and Diluted Earnings per Share

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2012		2011		2012		2011
Basic and diluted:
Net income	$	656,000	$	758,000	$	1,386,000	$	1,467,000
Weighted average common shares outstanding		2,726,428		2,708,233		2,724,423		2,705,434
Basic and dilutive net income per share	$	0.24	$	0.28	$	0.51	$	0.54

XML

Summary of Changes in Asset Subject to Fair Value Measurement by Level (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets at fair value	$ 110,722	$ 112,317
Investment securities AFS
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Recurring assets at fair value	102,510	102,867
Investment securities AFS | Purchases of investment securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Recurring assets at fair value		20,736
Investment securities AFS | Sales, calls and maturities of investment securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Recurring assets at fair value		20,584
Investment securities AFS | Amortization/accretion of premium/discount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Recurring assets at fair value		883
Investment securities AFS | Increase in market value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Recurring assets at fair value		374
Maryland Financial Bank stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-recurring assets at fair value	30	30
Impaired Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-recurring assets at fair value	7,483	8,309
Impaired Loans | New impaired loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-recurring assets at fair value		375
Impaired Loans | Payments and other loan reductions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-recurring assets at fair value		1,437
Impaired Loans | Change in total provision
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-recurring assets at fair value		236
OREO
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-recurring assets at fair value	699	1,111
OREO | Sales of OREO
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-recurring assets at fair value		412
Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets at fair value	103,239	104,008
Fair Value, Inputs, Level 2 | Investment securities AFS
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Recurring assets at fair value	102,510	102,867
Fair Value, Inputs, Level 2 | Investment securities AFS | Purchases of investment securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Recurring assets at fair value		20,736
Fair Value, Inputs, Level 2 | Investment securities AFS | Sales, calls and maturities of investment securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Recurring assets at fair value		20,584
Fair Value, Inputs, Level 2 | Investment securities AFS | Amortization/accretion of premium/discount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Recurring assets at fair value		883
Fair Value, Inputs, Level 2 | Investment securities AFS | Increase in market value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Recurring assets at fair value		374
Fair Value, Inputs, Level 2 | Maryland Financial Bank stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-recurring assets at fair value	30	30
Fair Value, Inputs, Level 2 | OREO
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-recurring assets at fair value	699	1,111
Fair Value, Inputs, Level 2 | OREO | Sales of OREO
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-recurring assets at fair value		412
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets at fair value	7,483	8,309
Fair Value, Inputs, Level 3 | Impaired Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-recurring assets at fair value	7,483	8,309
Fair Value, Inputs, Level 3 | Impaired Loans | New impaired loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-recurring assets at fair value		375
Fair Value, Inputs, Level 3 | Impaired Loans | Payments and other loan reductions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-recurring assets at fair value		1,437
Fair Value, Inputs, Level 3 | Impaired Loans | Change in total provision
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Non-recurring assets at fair value		$ 236

XML

Basic and Diluted Earnings per Share (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Basic and diluted:
Net income	$ 656	$ 758	$ 1,386	$ 1,467
Weighted average common shares outstanding	2,726,428	2,708,233	2,724,423	2,705,434
Basic and dilutive net income per share	$ 0.24	$ 0.28	$ 0.51	$ 0.54

XML

Fair Value - Additional Information (Detail) (USD $)	3 Months Ended	6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011	Jun. 30, 2012 Securities	Jun. 30, 2011 Maryland Financial Bank stock	Mar. 31, 2011 Corporate Trust Preferred	Jun. 30, 2012 Corporate Trust Preferred Securities	Jun. 30, 2012 Fair Value, Inputs, Level 3 Loan	Jun. 30, 2012 Fair Value, Inputs, Level 2 Property
Fair Value [Line Items]
Number of impaired assets							20
Number of other real estate owned assets								2
Number of pooled trust preferred securities						1
Financial institutions default basis points						1.50%
Financial institutions recovery rate						0.00%
Write-down of investment	$ 70,000	$ 92,000		$ 70,000	$ 22,000
Number of investment securities continuous unrealized loss positions for more than 12 months			3

XML

Summary of Estimated Fair Values of Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Carrying (Reported) Amount, Fair Value Disclosure
Financial assets:
Investment securities	$ 102,510	$ 102,867
Investments in restricted stock	1,718	1,520
Ground rents	175	175
Loans, net	249,353	232,734
Accrued interest receivable	1,558	1,542
Financial liabilities:
Deposits	321,798	311,945
Short-term borrowings	3,000	255
Long-term borrowings	20,000	20,000
Dividends payable	273	272
Accrued interest payable	54	48
Off-balance sheet commitments	26,176	22,736
Carrying (Reported) Amount, Fair Value Disclosure | Cash and due from banks
Financial assets:
Cash and cash equivalents	7,059	6,877
Carrying (Reported) Amount, Fair Value Disclosure | Interest-bearing deposits
Financial assets:
Cash and cash equivalents	166	2,423
Carrying (Reported) Amount, Fair Value Disclosure | Federal funds sold
Financial assets:
Cash and cash equivalents	258	654
Estimate of Fair Value, Fair Value Disclosure
Financial assets:
Investment securities	102,510	102,867
Investments in restricted stock	1,718	1,520
Ground rents	175	175
Loans, net	251,387	231,912
Accrued interest receivable	1,558	1,542
Financial liabilities:
Deposits	305,402	293,713
Short-term borrowings	3,000	255
Long-term borrowings	21,737	21,425
Dividends payable	273	272
Accrued interest payable	54	48
Off-balance sheet commitments	26,176	22,736
Estimate of Fair Value, Fair Value Disclosure | Cash and due from banks
Financial assets:
Cash and cash equivalents	7,059	6,877
Estimate of Fair Value, Fair Value Disclosure | Interest-bearing deposits
Financial assets:
Cash and cash equivalents	166	2,423
Estimate of Fair Value, Fair Value Disclosure | Federal funds sold
Financial assets:
Cash and cash equivalents	$ 258	$ 654

XML

Condensed Consolidated Statements Of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net income	$ 656	$ 758	$ 1,386	$ 1,467
Unrealized (losses) gains on securities:
Unrealized holding (losses) gains arising during the period	(65)	1,119	239	1,896
Reclassification adjustment for gains included in net income	(33)	(44)	(48)	(157)
Comprehensive income	$ 558	$ 1,833	$ 1,577	$ 3,206

XML

Fair Value

6 Months Ended

Jun. 30, 2012

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:

¨ 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)

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 June 30, 2012 or December 31, 2011. The Company has assets measured by fair value measurements on a non-recurring basis during 2012. At June 30, 2012, these assets include 20 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:

	(Dollars in Thousands)
									Fair
December 31, 2011	Level 1		Level 2			Level 3			Value
Recurring:
Investment securities available for sale (AFS)	$	-	$	102,867		$	-		$	102,867
Non-recurring:
Maryland Financial Bank stock		-		30			-			30
Impaired loans		-		-			8,309			8,309
OREO		-		1,111			-			1,111
		-		104,008			8,309			112,317
Activity:
Investment securities AFS
Purchases of investment securities		-		20,736			-			20,736
Sales, calls and maturities of investment securities		-		(20,584	)		-			(20,584	)
Amortization/accretion of premium/discount		-		(883	)		-			(883	)
Increase in market value		-		374			-			374
Loans
New impaired loans		-		-			375			375
Payments and other loan reductions		-		-			(1,437	)		(1,437	)
Change in total provision		-		-			236			236
OREO
Sales of OREO		-		(412	)		-			(412	)
June 30, 2012
Recurring:
Investment securities AFS		-		102,510			-			102,510
Non-recurring:
Maryland Financial Bank stock		-		30			-			30
Impaired loans		-		-			7,483			7,483
OREO		-		699			-			699
	$	-	$	103,239		$	7,483		$	110,722

The estimated fair values of the Company’s financial instruments at June 30, 2012 and December 31, 2011 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.

	June 30, 2012				December 31, 2011
(In Thousands)	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Financial assets:
Cash and due from banks	$	7,059	$	7,059	$	6,877	$	6,877
Interest-bearing deposits		166		166		2,423		2,423
Federal funds sold		258		258		654		654
Investment securities		102,510		102,510		102,867		102,867
Investments in restricted stock		1,718		1,718		1,520		1,520
Ground rents		175		175		175		175
Loans, net		249,353		251,387		232,734		231,912
Accrued interest receivable		1,558		1,558		1,542		1,542
Financial liabilities:
Deposits		321,798		305,402		311,945		293,713
Short-term borrowings		3,000		3,000		255		255
Long-term borrowings		20,000		21,737		20,000		21,425
Dividends payable		273		273		272		272
Accrued interest payable		54		54		48		48
Off-balance sheet commitments		26,176		26,176		22,736		22,736

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 June 30, 2012 are as follows:

Securities available for sale:	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	$	-	$	-	$	-	$	-	$	-	$	-
State and Municipal		5,665		102		281		18		5,946		120
Corporate Trust Preferred		-		-		241		237		241		237
Mortgage Backed		7,104		44		-		-		7,104		44
	$	12,769	$	146	$	522	$	255	$	13,291	$	401

At June 30, 2012, 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 June 30, 2012 was not active and markets for similar securities were also not active. As a result, the Company had cash flow testing performed as of June 30, 2012 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 150 basis points applied annually with a 0% recovery on both current and future defaulting financial institutions. As a result of this testing, no write-down was required in the second quarter of 2012. 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 June 30, 2012, 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 June 30, 2012 the Bank held 3 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 June 30, 2012, 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:

	At		At
	June 30,		December 31,
	2012		2011
	(Dollars in Thousands)
Estimated credit losses, beginning of year	$	3,247	$	3,155
Credit losses - no previous OTTI recognized		-		70
Credit losses - previous OTTI recognized		-		22
Estimated credit losses, end of period	$	3,247	$	3,247