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) |
Part I - Financial Information | Page | |||
Item 1.
|
Consolidated Financial Statements:
|
|||
Condensed Consolidated Balance Sheets, June 30, 2013 (unaudited) and December 31, 2012 (audited)
|
3
|
|||
Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2013 and 2012 (unaudited)
|
4
|
|||
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six
Months Ended June 30, 2013 and 2012 (unaudited)
|
5
|
|||
Condensed Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 2013 and 2012 (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
|
22
|
||
Part II - Other Information
|
||||
Item 6.
|
Exhibits
|
23
|
||
Signatures
|
24
|
PART I - FINANCIAL INFORMATION
|
|||||||
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
|
|||||||
GLEN BURNIE BANCORP AND SUBSIDIARIES
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||
(Dollars in Thousands)
|
June 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
(unaudited)
|
(audited)
|
|||||||
ASSETS
|
||||||||
Cash and due from banks
|
$ | 7,618 | $ | 9,332 | ||||
Interest-bearing deposits in other financial institutions
|
62 | 6,627 | ||||||
Federal funds sold
|
312 | 2,669 | ||||||
Cash and cash equivalents
|
7,992 | 18,628 | ||||||
Investment securities available for sale, at fair value
|
100,192 | 100,490 | ||||||
Federal Home Loan Bank stock, at cost
|
1,363 | 1,448 | ||||||
Maryland Financial Bank stock
|
30 | 30 | ||||||
Loans, less allowance for credit losses
|
||||||||
(June 30: $3,129; December 31: $3,308)
|
254,185 | 249,632 | ||||||
Premises and equipment, at cost, less accumulated depreciation
|
3,776 | 3,873 | ||||||
Other real estate owned
|
328 | 478 | ||||||
Cash value of life insurance
|
8,797 | 8,681 | ||||||
Other assets
|
5,522 | 4,178 | ||||||
Total assets
|
$ | 382,185 | $ | 387,438 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Liabilities:
|
||||||||
Deposits
|
$ | 329,080 | $ | 332,289 | ||||
Long-term borrowings
|
20,000 | 20,000 | ||||||
Other liabilities
|
1,467 | 1,561 | ||||||
Total liabilities
|
350,547 | 353,850 | ||||||
Commitments and contingencies
|
||||||||
Stockholders’ equity:
|
||||||||
Common stock, par value $1, authorized 15,000,000 shares; issued and outstanding: June 30: 2,740,319 shares; December 31: 2,736,978 shares
|
2,740 | 2,737 | ||||||
Surplus
|
9,640 | 9,605 | ||||||
Retained earnings
|
19,404 | 18,783 | ||||||
Accumulated other comprehensive (loss) gain, net of taxes
|
(146 | ) | 2,463 | |||||
Total stockholders’ equity
|
31,638 | 33,588 | ||||||
Total liabilities and stockholders’ equity
|
$ | 382,185 | $ | 387,438 |
- 3 - |
GLEN BURNIE BANCORP AND SUBSIDIARIES
|
|||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|||||||||||
(Dollars in Thousands, Except Per Share Amounts)
|
|||||||||||
(Unaudited)
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Interest income on:
|
||||||||||||||||
Loans, including fees
|
$ | 3,048 | $ | 3,255 | $ | 6,051 | $ | 6,619 | ||||||||
U.S. Treasury and U.S. Government agency securities
|
215 | 211 | 402 | 465 | ||||||||||||
State and municipal securities
|
426 | 438 | 844 | 855 | ||||||||||||
Other
|
19 | 24 | 41 | 45 | ||||||||||||
Total interest income
|
3,708 | 3,928 | 7,338 | 7,984 | ||||||||||||
Interest expense on:
|
||||||||||||||||
Deposits
|
539 | 670 | 1,098 | 1,358 | ||||||||||||
Short-term borrowings
|
- | 1 | - | 1 | ||||||||||||
Long-term borrowings
|
160 | 159 | 318 | 319 | ||||||||||||
Total interest expense
|
699 | 830 | 1,416 | 1,678 | ||||||||||||
Net interest income
|
3,009 | 3,098 | 5,922 | 6,306 | ||||||||||||
Provision for credit losses
|
- | - | - | - | ||||||||||||
Net interest income after provision for credit losses
|
3,009 | 3,098 | 5,922 | 6,306 | ||||||||||||
Other income:
|
||||||||||||||||
Service charges on deposit accounts
|
132 | 132 | 270 | 275 | ||||||||||||
Other fees and commissions
|
186 | 191 | 361 | 378 | ||||||||||||
Other non-interest income
|
4 | 4 | 10 | 9 | ||||||||||||
Income on life insurance
|
58 | 62 | 116 | 122 | ||||||||||||
Gains on investment securities
|
122 | 33 | 124 | 56 | ||||||||||||
Total other income
|
502 | 422 | 881 | 840 | ||||||||||||
Other expenses:
|
||||||||||||||||
Salaries and employee benefits
|
1,673 | 1,726 | 3,328 | 3,458 | ||||||||||||
Occupancy
|
195 | 200 | 397 | 397 | ||||||||||||
Other expenses
|
855 | 789 | 1,683 | 1,546 | ||||||||||||
Total other expenses
|
2,723 | 2,715 | 5,408 | 5,401 | ||||||||||||
Income before income taxes
|
788 | 805 | 1,395 | 1,745 | ||||||||||||
Income tax expense
|
148 | 149 | 226 | 359 | ||||||||||||
Net income
|
$ | 640 | $ | 656 | $ | 1,169 | $ | 1,386 | ||||||||
Basic and diluted earnings per share of common stock
|
$ | 0.24 | $ | 0.24 | $ | 0.43 | $ | 0.51 | ||||||||
Weighted average shares of common stock outstanding
|
2,740,132 | 2,726,428 | 2,740,132 | 2,724,423 | ||||||||||||
Dividends declared per share of common stock
|
$ | 0.10 | $ | 0.10 | $ | 0.20 | $ | 0.20 |
See accompanying notes to condensed consolidated financial statements.
|
- 4 - |
GLEN BURNIE BANCORP AND SUBSIDIARIES
|
|||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||
(Dollars in Thousands)
|
|||||||||||
(Unaudited)
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Net income
|
$ | 640 | $ | 656 | $ | 1,169 | $ | 1,386 | ||||||||
Other comprehensive (loss) income, net of tax
|
||||||||||||||||
Unrealized (losses) gains on securities:
|
||||||||||||||||
Unrealized holding (losses) gains arising during the period
|
(2,125 | ) | (65 | ) | (2,533 | ) | 239 | |||||||||
Reclassification adjustment for gains included in net income
|
(75 | ) | (33 | ) | (76 | ) | (48 | ) | ||||||||
Comprehensive (loss) income
|
$ | (1,560 | ) | $ | 558 | $ | (1,440 | ) | $ | 1,577 |
See accompanying notes to condensed consolidated financial statements.
|
- 5 - |
GLEN BURNIE BANCORP AND SUBSIDIARIES
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
(Dollars in Thousands)
|
|||||||
(Unaudited)
|
Six Months Ended June 30,
|
||||||||
2013
|
2012
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 1,169 | $ | 1,386 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation, amortization, and accretion
|
661 | 1,108 | ||||||
Gains on disposals of assets, net
|
(124 | ) | (56 | ) | ||||
Income on investment in life insurance
|
(116 | ) | (122 | ) | ||||
Changes in assets and liabilities:
|
||||||||
Decrease (increase) in other assets
|
365 | (250 | ) | |||||
Decrease in other liabilities
|
(368 | ) | (27 | ) | ||||
Net cash provided by operating activities
|
1,587 | 2,039 | ||||||
Cash flows from investing activities:
|
||||||||
Maturities of available for sale mortgage-backed securities
|
9,643 | 16,747 | ||||||
Proceeds from maturities and sales of other investment securities
|
1,854 | 3,837 | ||||||
Purchases of investment securities
|
(15,850 | ) | (20,736 | ) | ||||
Purchase of Federal Home Loan Bank stock
|
- | (198 | ) | |||||
Sales of Federal Home Loan Bank stock
|
85 | - | ||||||
Proceeds from sales of other real estate
|
150 | 412 | ||||||
Increase in loans, net
|
(4,553 | ) | (16,619 | ) | ||||
Purchases of premises and equipment
|
(107 | ) | (81 | ) | ||||
Net cash used by investing activities
|
(8,778 | ) | (16,638 | ) | ||||
Cash flows from financing activities:
|
||||||||
(Decrease) increase in deposits, net
|
(3,209 | ) | 9,853 | |||||
Increase in short-term borrowings, net
|
- | 2,745 | ||||||
Dividends paid
|
(274 | ) | (543 | ) | ||||
Common stock dividends reinvested
|
38 | 73 | ||||||
Net cash (used) provided by financing activities
|
(3,445 | ) | 12,128 | |||||
Decrease in cash and cash equivalents
|
(10,636 | ) | (2,471 | ) | ||||
Cash and cash equivalents, beginning of year
|
18,628 | 9,954 | ||||||
Cash and cash equivalents, end of period
|
$ | 7,992 | $ | 7,483 |
See accompanying notes to condensed consolidated financial statements.
|
- 6 - |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Basic and diluted:
|
||||||||||||||||
Net income
|
$ | 640,000 | $ | 656,000 | $ | 1,169,000 | $ | 1,386,000 | ||||||||
Weighted average common shares outstanding
|
2,740,132 | 2,726,428 | 2,740,132 | 2,724,423 | ||||||||||||
Basic and dilutive net income per share
|
$ | 0.24 | $ | 0.24 | $ | 0.43 | $ | 0.51 |
- 7 - |
|
r Level 1 – Quoted prices in active markets for identical securities
|
|
|
|
r Level 2 – Other significant observable inputs (including quoted prices in active markets for similar securities)
|
|
|
|
r Level 3 – Significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments)
|
- 8 - |
(Dollars in Thousands)
|
||||||||||||||||
Fair
|
||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Value
|
||||||||||||
December 31, 2012
|
||||||||||||||||
Recurring:
|
||||||||||||||||
Investment securities available for sale (AFS)
|
$ | - | $ | 100,490 | $ | - | $ | 100,490 | ||||||||
Non-recurring:
|
||||||||||||||||
Maryland Financial Bank stock
|
- | - | 30 | 30 | ||||||||||||
Impaired loans
|
- | - | 6,084 | 6,084 | ||||||||||||
OREO
|
- | 478 | - | 478 | ||||||||||||
- | 100,968 | 6,114 | 107,082 | |||||||||||||
Activity:
|
||||||||||||||||
Investment securities AFS
|
||||||||||||||||
Purchases of investment securities
|
- | 15,850 | - | 15,850 | ||||||||||||
Sales, calls and maturities of investment securities
|
- | (11,497 | ) | - | (11,497 | ) | ||||||||||
Amortization/accretion of premium/discount
|
- | (443 | ) | - | (443 | ) | ||||||||||
Increase in market value
|
- | (4,208 | ) | - | (4,208 | ) | ||||||||||
Loans
|
||||||||||||||||
New impaired loans
|
- | - | 342 | 342 | ||||||||||||
Payments and other loan reductions
|
- | - | (219 | ) | (219 | ) | ||||||||||
Change in total provision
|
- | - | 300 | 300 | ||||||||||||
OREO
|
||||||||||||||||
OREO converted from loans
|
- | - | - | - | ||||||||||||
Sales of OREO
|
- | (150 | ) | - | (150 | ) | ||||||||||
June 30, 2013
|
||||||||||||||||
Recurring:
|
||||||||||||||||
Investment securities AFS
|
- | 100,192 | - | 100,192 | ||||||||||||
Non-recurring:
|
||||||||||||||||
Maryland Financial Bank stock
|
- | - | 30 | 30 | ||||||||||||
Impaired loans
|
- | - | 6,507 | 6,507 | ||||||||||||
OREO
|
- | 328 | - | 328 | ||||||||||||
$ | - | $ | 100,520 | $ | 6,537 | $ | 107,057 |
- 9 - |
June 30, 2013
|
December 31, 2012
|
|||||||||||||||
(In Thousands)
|
Carrying
|
Fair
|
Carrying
|
Fair
|
||||||||||||
Amount
|
Value
|
Amount
|
Value
|
|||||||||||||
Financial assets:
|
||||||||||||||||
Cash and due from banks
|
$ | 7,618 | $ | 7,618 | $ | 9,332 | $ | 9,332 | ||||||||
Interest-bearing deposits
|
62 | 62 | 6,627 | 6,627 | ||||||||||||
Federal funds sold
|
312 | 312 | 2,669 | 2,669 | ||||||||||||
Investment securities
|
100,192 | 100,192 | 100,490 | 100,490 | ||||||||||||
Investments in restricted stock
|
1,363 | 1,363 | 1,448 | 1,448 | ||||||||||||
Ground rents
|
172 | 172 | 175 | 175 | ||||||||||||
Loans, net
|
254,185 | 256,288 | 249,632 | 251,419 | ||||||||||||
Accrued interest receivable
|
1,446 | 1,446 | 1,450 | 1,450 | ||||||||||||
Financial liabilities:
|
||||||||||||||||
Deposits
|
329,080 | 299,559 | 332,289 | 314,680 | ||||||||||||
Long-term borrowings
|
20,000 | 21,034 | 20,000 | 21,899 | ||||||||||||
Dividends payable
|
274 | 274 | - | - | ||||||||||||
Accrued interest payable
|
35 | 35 | 28 | 28 | ||||||||||||
Off-balance sheet commitments
|
26,191 | 26,191 | 26,236 | 26,236 |
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
|
14,478 | 1,315 | 260 | 40 | 14,738 | 1,355 | ||||||||||||||||||
Corporate Trust Preferred
|
- | - | 247 | 102 | 247 | 102 | ||||||||||||||||||
Mortgage Backed
|
31,591 | 1,073 | 850 | 24 | 32,441 | 1,097 | ||||||||||||||||||
$ | 46,069 | $ | 2,388 | $ | 1,357 | $ | 166 | $ | 47,426 | $ | 2,554 |
- 10 - |
At
|
At
|
|||||||
June 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
(Dollars in Thousands)
|
||||||||
Estimated credit losses, beginning of year
|
$ | 3,247 | $ | 3,247 | ||||
Credit losses - no previous OTTI recognized
|
- | - | ||||||
Credit losses - previous OTTI recognized
|
- | - | ||||||
Estimated credit losses, end of period
|
$ | 3,247 | $ | 3,247 |
- 11 - |
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
- 12 - |
- 13 - |
At June 30, 2013
|
90 Days or
|
|||||||||||||||||||
(Dollars in Thousands)
|
30-89 Days
|
More and
|
||||||||||||||||||
Current
|
Past Due
|
Still Accruing
|
Nonaccrual
|
Total
|
||||||||||||||||
Commercial and industrial
|
$ | 3,951 | $ | - | $ | - | $ | 84 | $ | 4,035 | ||||||||||
Commercial real estate
|
68,242 | - | - | 3,817 | 72,059 | |||||||||||||||
Consumer and indirect
|
58,787 | 1,049 | 3 | 391 | 60,230 | |||||||||||||||
Residential real estate
|
119,699 | 949 | 482 | 1,067 | 122,197 | |||||||||||||||
$ | 250,679 | $ | 1,998 | $ | 485 | $ | 5,359 | $ | 258,521 |
At December 31, 2012
|
90 Days or | |||||||||||||||||||
(Dollars in Thousands)
|
30-89 Days
|
More and | ||||||||||||||||||
Current
|
Past Due
|
Still Accruing
|
Nonaccrual
|
Total
|
||||||||||||||||
Commercial and industrial
|
$ | 4,678 | $ | 206 | $ | - | $ | 17 | $ | 4,901 | ||||||||||
Commercial real estate
|
68,880 | - | 1,354 | 2,645 | 72,879 | |||||||||||||||
Consumer and indirect
|
64,428 | 1,431 | - | 237 | 66,096 | |||||||||||||||
Residential real estate
|
108,546 | 233 | 259 | 1,109 | 110,147 | |||||||||||||||
$ | 246,532 | $ | 1,870 | $ | 1,613 | $ | 4,008 | $ | 254,023 |
At
|
At
|
|||||||
June 30,
|
December 31,
|
|||||||
2013
|
2012
|
|||||||
(Dollars in Thousands)
|
||||||||
Restructured loans
|
$ | 2,117 | $ | 2,202 | ||||
Non-accrual and 90 days or more and still
|
||||||||
accruing loans to gross loans
|
2.27 | % | 2.22 | % | ||||
Allowance for credit losses to non-accrual
|
||||||||
and 90 days or more and still accruing loans
|
53.54 | % | 58.84 | % |
- 14 - |
(Dollars in thousands)
|
||||||||||||||||||||
Unpaid
|
Interest
|
Average
|
||||||||||||||||||
Recorded
|
Principal
|
Income
|
Specific
|
Recorded
|
||||||||||||||||
June 30, 2013
|
Investment
|
Balance
|
Recognized
|
Reserve
|
Investment
|
|||||||||||||||
Impaired loans with specific reserves:
|
||||||||||||||||||||
Real-estate - mortgage:
|
||||||||||||||||||||
Residential
|
$ | 353 | 353 | 7 | 39 | 354 | ||||||||||||||
Commercial
|
3,513 | 3,513 | 32 | 644 | 3,570 | |||||||||||||||
Consumer
|
75 | 75 | 3 | 20 | 75 | |||||||||||||||
Installment
|
239 | 239 | - | 70 | 239 | |||||||||||||||
Home Equity
|
- | - | - | - | - | |||||||||||||||
Commercial
|
286 | 286 | 6 | 286 | 290 | |||||||||||||||
Total impaired loans with specific reserves
|
$ | 4,466 | 4,466 | 48 | 1,059 | 4,528 | ||||||||||||||
Impaired loans with no specific reserve:
|
||||||||||||||||||||
Real-estate - mortgage:
|
||||||||||||||||||||
Residential
|
$ | 1,322 | 1,770 | 2 | n/a | 1,558 | ||||||||||||||
Commercial
|
1,281 | 1,281 | - | n/a | 1,321 | |||||||||||||||
Consumer
|
189 | 189 | - | n/a | - | |||||||||||||||
Installment
|
187 | 187 | - | n/a | - | |||||||||||||||
Home Equity
|
52 | 52 | - | n/a | 50 | |||||||||||||||
Commercial
|
69 | 69 | - | n/a | 69 | |||||||||||||||
Total impaired loans with no specific reserve
|
$ | 3,100 | 3,548 | 2 | - | 2,998 |
- 15 - |
(Dollars in thousands)
|
||||||||||||||||||||
Unpaid
|
Interest
|
Average
|
||||||||||||||||||
Recorded
|
Principal
|
Income
|
Specific
|
Recorded
|
||||||||||||||||
December 31, 2012
|
Investment
|
Balance
|
Recognized
|
Reserve
|
Investment
|
|||||||||||||||
Impaired loans with specific reserves:
|
||||||||||||||||||||
Real-estate - mortgage:
|
||||||||||||||||||||
Residential
|
$ | 180 | 180 | 12 | 36 | 182 | ||||||||||||||
Commercial
|
3,611 | 4,211 | 99 | 808 | 3,642 | |||||||||||||||
Consumer
|
76 | 76 | 8 | 20 | 76 | |||||||||||||||
Installment
|
147 | 147 | 8 | 30 | 148 | |||||||||||||||
Home Equity
|
- | - | - | - | - | |||||||||||||||
Commercial
|
421 | 421 | 20 | 421 | 432 | |||||||||||||||
Total impaired loans with specific reserves
|
$ | 4,435 | 5,035 | 147 | 1,315 | 4,480 | ||||||||||||||
Impaired loans with no specific reserve:
|
||||||||||||||||||||
Real-estate - mortgage:
|
||||||||||||||||||||
Residential
|
$ | 1,365 | 1,812 | 75 | n/a | 1,795 | ||||||||||||||
Commercial
|
1,370 | 1,370 | - | n/a | 2,441 | |||||||||||||||
Consumer
|
1 | - | - | n/a | - | |||||||||||||||
Installment
|
228 | - | - | n/a | - | |||||||||||||||
Home Equity
|
- | - | - | n/a | - | |||||||||||||||
Commercial
|
- | - | - | n/a | - | |||||||||||||||
Total impaired loans with no specific reserve
|
$ | 2,964 | 3,182 | 75 | - | 4,236 |
1
|
Superior – minimal risk (normally supported by pledged deposits, United States government securities, etc.)
|
2
|
Above Average – low risk. (all of the risks associated with this credit based on each of the bank’s creditworthiness criteria are minimal)
|
3
|
Average – moderately low risk. (most of the risks associated with this credit based on each of the bank’s creditworthiness criteria are minimal)
|
4
|
Acceptable – moderate risk. (the weighted overall risk associated with this credit based on each of the bank’s creditworthiness criteria is acceptable)
|
5
|
Other Assets Especially Mentioned – moderately high risk. (possesses deficiencies which corrective action by the bank would remedy; potential watch list)
|
6
|
Substandard – (the bank is inadequately protected and there exists the distinct possibility of sustaining some loss if not corrected)
|
7
|
Doubtful – (weaknesses make collection or liquidation in full, based on currently existing facts, improbable)
|
8
|
Loss – (of little value; not warranted as a bankable asset)
|
- 16 - |
Commercial
|
Consumer
|
|||||||||||||||||||
June 30, 2013
|
and
|
Commercial
|
and
|
Residential
|
||||||||||||||||
(Dollars in Thousands)
|
Industrial
|
Real Estate
|
Indirect
|
Real Estate
|
Total
|
|||||||||||||||
Pass
|
$ | 3,571 | $ | 62,743 | $ | 58,630 | $ | 120,040 | $ | 244,984 | ||||||||||
Special mention
|
178 | 5,803 | 1,100 | 968 | 8,049 | |||||||||||||||
Substandard
|
286 | 3,513 | 441 | 1,189 | 5,429 | |||||||||||||||
Doubtful
|
- | - | 59 | - | 59 | |||||||||||||||
Loss
|
- | - | - | - | - | |||||||||||||||
$ | 4,035 | $ | 72,059 | $ | 60,230 | $ | 122,197 | $ | 258,521 | |||||||||||
Non-accrual
|
84 | 3,817 | 391 | 1,067 | 5,359 | |||||||||||||||
Troubled debt restructures
|
- | 1,281 | - | 836 | 2,117 | |||||||||||||||
Number of TDRs contracts
|
- | 1 | - | 1 | 2 | |||||||||||||||
Non-performing TDRs
|
- | 1,281 | - | 836 | 2,117 | |||||||||||||||
Number of TDR accounts
|
- | 1 | - | 1 | 2 |
Commercial
|
Consumer
|
|||||||||||||||||||
December 31, 2012
|
and
|
Commercial
|
and
|
Residential
|
||||||||||||||||
(Dollars in Thousands)
|
Industrial
|
Real Estate
|
Indirect
|
Real Estate
|
Total
|
|||||||||||||||
Pass
|
$ | 4,296 | $ | 63,297 | $ | 64,160 | $ | 107,944 | $ | 239,697 | ||||||||||
Special mention
|
184 | 5,971 | 1,485 | 1,190 | 8,830 | |||||||||||||||
Substandard
|
421 | 3,611 | 361 | 1,013 | 5,406 | |||||||||||||||
Doubtful
|
- | - | 90 | - | 90 | |||||||||||||||
Loss
|
- | - | - | - | - | |||||||||||||||
$ | 4,901 | $ | 72,879 | $ | 66,096 | $ | 110,147 | $ | 254,023 | |||||||||||
Non-accrual
|
17 | 2,645 | 237 | 1,109 | 4,008 | |||||||||||||||
Troubled debt restructures
|
- | 1,370 | - | 832 | 2,202 | |||||||||||||||
Number of TDRs contracts
|
- | 1 | - | 1 | 2 | |||||||||||||||
Non-performing TDRs
|
- | 1,370 | - | 832 | 2,202 | |||||||||||||||
Number of TDR accounts
|
- | 1 | - | 1 | 2 |
- 17 - |
Commercial
|
Consumer
|
|||||||||||||||||||||||
June 30, 2013
|
and |
Commercial
|
and
|
Residential
|
||||||||||||||||||||
(Dollars in Thousands)
|
Industrial
|
Real Estate
|
Indirect
|
Real Estate
|
Unallocated
|
Total
|
||||||||||||||||||
Balance, beginning of year
|
$ | 542 | $ | 1,183 | $ | 1,058 | $ | 393 | $ | 132 | $ | 3,308 | ||||||||||||
Provision for credit losses
|
58 | (234 | ) | (109 | ) | 13 | 272 | - | ||||||||||||||||
Recoveries
|
23 | 45 | 191 | 6 | - | 265 | ||||||||||||||||||
Loans charged off
|
(175 | ) | - | (269 | ) | - | - | (444 | ) | |||||||||||||||
Balance, end of quarter
|
$ | 448 | $ | 994 | $ | 871 | $ | 412 | $ | 404 | $ | 3,129 | ||||||||||||
Individually evaluated for impairment:
|
||||||||||||||||||||||||
Balance in allowance
|
$ | 286 | $ | 644 | $ | 90 | $ | 39 | $ | - | $ | 1,059 | ||||||||||||
Related loan balance
|
355 | 4,794 | 742 | 1,675 | - | 7,566 | ||||||||||||||||||
Collectively evaluated for impairment:
|
||||||||||||||||||||||||
Balance in allowance
|
$ | 162 | $ | 350 | $ | 781 | $ | 373 | $ | 404 | $ | 2,070 | ||||||||||||
Related loan balance
|
3,680 | 67,265 | 59,488 | 120,522 | - | 250,955 |
Commercial
|
Consumer
|
|||||||||||||||||||||||
December 31, 2012
|
and |
Commercial
|
and
|
Residential
|
||||||||||||||||||||
(Dollars in Thousands)
|
Industrial
|
Real Estate
|
Indirect
|
Real Estate
|
Unallocated
|
Total
|
||||||||||||||||||
Balance, beginning of year
|
$ | 557 | $ | 2,013 | $ | 889 | $ | 596 | $ | (124 | ) | $ | 3,931 | |||||||||||
Provision for credit losses
|
29 | (919 | ) | 358 | 526 | 256 | 250 | |||||||||||||||||
Recoveries
|
11 | 89 | 286 | 6 | - | 392 | ||||||||||||||||||
Loans charged off
|
(55 | ) | - | (475 | ) | (735 | ) | - | (1,265 | ) | ||||||||||||||
Balance, end of year
|
$ | 542 | $ | 1,183 | $ | 1,058 | $ | 393 | $ | 132 | $ | 3,308 | ||||||||||||
Individually evaluated for impairment:
|
||||||||||||||||||||||||
Balance in allowance
|
$ | 451 | $ | 808 | $ | 20 | $ | 36 | $ | - | $ | 1,315 | ||||||||||||
Related loan balance
|
796 | 4,981 | 77 | 1,545 | - | 7,399 | ||||||||||||||||||
Collectively evaluated for impairment:
|
||||||||||||||||||||||||
Balance in allowance
|
$ | 91 | $ | 375 | $ | 1,038 | $ | 357 | $ | 132 | $ | 1,993 | ||||||||||||
Related loan balance
|
4,105 | 67,898 | 66,019 | 108,601 | - | 246,623 |
- 18 - |
At
|
At
|
|||||||
June 30,
|
June 30,
|
|||||||
2013
|
2012
|
|||||||
(Dollars in Thousands)
|
||||||||
Average loans
|
$ | 252,132 | $ | 238,425 | ||||
Net charge-offs to average loans (annualized)
|
0.14 | % | 0.12 | % |
Six Months Ended June 30,
|
||||||||
2013
|
2012 | |||||||
(Dollars in Thousands)
|
||||||||
Beginning balance
|
$ | 200 | $ | 200 | ||||
Provisions charged to operations
|
- | - | ||||||
Ending balance
|
$ | 200 | $ | 200 |
- 19 - |
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
|
$ | - | $ | - | $ | - | $ | - | $ | 7,680 | ||||||||||
Federal funds and overnight deposits
|
312 | - | - | - | 312 | |||||||||||||||
Securities
|
- | - | 875 | 99,317 | 100,192 | |||||||||||||||
Loans
|
13,603 | 15,762 | 66,738 | 158,082 | 254,185 | |||||||||||||||
Fixed assets
|
- | - | - | - | 3,776 | |||||||||||||||
Other assets
|
- | - | - | - | 16,040 | |||||||||||||||
Total assets
|
$ | 13,915 | $ | 15,762 | $ | 67,613 | $ | 257,399 | $ | 382,185 | ||||||||||
Liabilities:
|
||||||||||||||||||||
Demand deposit accounts
|
$ | - | $ | - | $ | - | $ | - | $ | 87,479 | ||||||||||
NOW accounts
|
28,834 | - | - | - | 28,834 | |||||||||||||||
Money market deposit accounts
|
21,419 | - | - | - | 21,419 | |||||||||||||||
Savings accounts
|
69,905 | 553 | - | - | 70,458 | |||||||||||||||
IRA accounts
|
5,686 | 15,492 | 20,764 | 1,989 | 43,931 | |||||||||||||||
Certificates of deposit
|
16,465 | 27,906 | 31,965 | 623 | 76,959 | |||||||||||||||
Long-term borrowings
|
- | - | - | 20,000 | 20,000 | |||||||||||||||
Other liabilities
|
- | - | - | - | 1,467 | |||||||||||||||
Stockholders’ equity:
|
- | - | - | - | 31,638 | |||||||||||||||
Total liabilities and stockholders’ equity
|
$ | 142,309 | $ | 43,951 | $ | 52,729 | $ | 22,612 | $ | 382,185 | ||||||||||
GAP
|
$ | (128,394 | ) | $ | (28,189 | ) | $ | 14,884 | $ | 234,787 | ||||||||||
Cumulative GAP
|
$ | (128,394 | ) | $ | (156,583 | ) | $ | (141,699 | ) | $ | 93,088 | |||||||||
Cumulative GAP as a % of total assets
|
-33.59 | % | -40.97 | % | -37.08 | % | 24.36 | % |
Immediate Change in Rates | ||||||||||||||||
-200 | -100 | +100 | +200 | |||||||||||||
Basis Points
|
Basis Points
|
Basis Points
|
Basis Points
|
|||||||||||||
% Change in Net Interest Income
|
-8.6 | % | -4.1 | % | -0.3 | % | -2.0 | % | ||||||||
% Change in Economic Value of Equity
|
-15.9 | % | -6.3 | % | -3.2 | % | -11.5 | % |
- 20 - |
-21- |
-22- |
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)
|
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
|
99.1
|
Press release dated August 9, 2013
|
101
|
Interactive data files providing financial information from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 in XBRL (eXtensible Business Reporting Language) pursuant to Rule 405 of Regulation S-T: (i) Condensed Consolidated Balance Sheets, June 30, 2013 and December 31, 2012, (ii) Condensed Consolidated Statements of Income for the three and six months ended June 30, 2013and 2012, (iii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2013 and 2012, (iv) Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012, and (v) Notes to Unaudited Condensed Consolidated Financial Statements
|
-23- |
GLEN BURNIE BANCORP
(Registrant)
|
|||
Date: August 13, 2013
|
By:
|
/s/ Michael G. Livingston. | |
Michael G. Livingston
|
|||
President, Chief Executive Officer
|
By:
|
/s/ John E. Porter | ||
John E. Porter
|
|||
Chief Financial Officer
|
-24- |
|
(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: August 13, 2013
|
/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: August 13, 2013
|
/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: August 13, 2013
|
|
/s/ Michael G. Livingston | |
Michael G. Livingston
|
|||
President, Chief Executive Officer
|
|
|
/s/ John E. Porter | |
John E. Porter
|
|||
Chief Financial Officer
|
Exhibit 99.1
N E W S R E L E A S E
FOR IMMEDIATE RELEASE
Contact: Yvonne “Rie” Atkinson
410-768-8857 (office)
ratkinson@bogb.net
GLEN BURNIE BANCORP RELEASES 2Q EARNINGS
GLEN BURNIE, MD (August 9, 2013) – Glen Burnie Bancorp (NASDAQ: GLBZ), parent company of The Bank of Glen Burnie, today announced results for the second quarter.
For the three month period ended June 30, 2013, Glen Burnie Bancorp realized net income of $640,000 or $0.24 basic earnings per share. The company reported net income of $656,000 or $0.24 basic earnings per share for the same three month period in 2012. Net interest income after provisions for credit losses was $3,009,000 for the three month period ended June 30, 2013. The company reported net interest income after provisions for credit losses of $3,098,000 for the same period in 2012.
Net income for the six months ended June 30, 2013 was $1,169,000 or $0.43 basic earnings per share as compared to $1,386,000 or $0.51 basic earnings per share for the same period in 2012. Net interest income after provisions for credit losses for the six months ended June 30, 2013 was $5,922,000 as compared to $6,306,000 for the same period in 2012.
On July 8, 2013, Glen Burnie Bancorp paid its 84th consecutive dividend to shareholders of record at the close of business on June 27, 2013. The company had 2,740,319 common shares outstanding with approximately 410 shareholders of record on June 13, 2013.
“We continue to show a profit in this challenging low rate environment by continuing to make loans and controlling expenses.” said Michael G. Livingston, President and CEO.
Glen Burnie Bancorp, parent company to The Bank of Glen Burnie®, currently maintains consolidated assets totaling more than $383 million. Founded in 1949, The Bank of Glen Burnie® is a locally-owned community bank with eight branch offices serving Anne Arundel County. (www.thebankofglenburnie.com)
# # # #
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.
FAIR VALUE - Rollforward of Cumulative Other Than Temporary Credit Losses Recognized in Earnings for Debt Securities (Detail) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
|
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward] | ||
Estimated credit losses, beginning of year | $ 3,247 | $ 3,247 |
Credit losses - no previous OTTI recognized | ||
Credit losses - previous OTTI recognized | ||
Estimated credit losses, end of period | $ 3,247 | $ 3,247 |
FAIR VALUE
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 June 30, 2013 or December 31, 2012. The Company has assets measured by fair value measurements on a non-recurring basis during 2013. At June 30, 2013, these assets include 18 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 three 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 June 30, 2013 and December 31, 2012 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 June 30, 2013 are as follows:
At June 30, 2013, the company owned one pooled trust preferred security issued by Regional Diversified Funding, Senior Notes with a Moody’s rating of Ca. The market for these securities at June 30, 2013 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, 2013 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 first or second quarter of 2013.
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, 2013, 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, 2013, the Bank held 4 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, 2013, 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:
|
FAIR VALUE - Additional Information (Detail Textuals)
|
6 Months Ended |
---|---|
Jun. 30, 2013
Basis_Point
Security
|
|
Securities
|
|
Fair Value [Line Items] | |
Number of securities continuous unrealized loss position more than twelve months | 4 |
Securities | Corporate Trust Preferred
|
|
Fair Value [Line Items] | |
Future defualt basis point on the currently performing financial institutions | 150 |
Fair value inputs recovery rate | 0.00% |
Number of pooled trust preferred securities | 1 |
Loan | Fair Value, Inputs, Level 3
|
|
Fair Value [Line Items] | |
Number of impaired assets | 18 |
Property | Fair Value, Inputs, Level 2
|
|
Fair Value [Line Items] | |
Number of other real estate owned assets | 3 |
EARNINGS PER SHARE
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 six months ended June 30, 2013 and 2012, since there were no options outstanding.
|
EARNINGS PER SHARE (Tables)
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share, basic and diluted |
|
RECENT ACCOUNTING PRONOUNCEMENTS
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Accounting Changes and Error Corrections [Abstract] | |
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 several exposure drafts 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.
ASU 2011-11, “Balance Sheet (Topic 210) – “Disclosures about Offsetting Assets and Liabilities.” ASU 2011-11 amends Topic 210, “Balance Sheet,” to require an entity to disclose both gross and net information about financial instruments, such as sales and repurchase agreements and reverse sale and repurchase agreements and securities borrowing/lending arrangements, and derivative instruments that are eligible for offset in the statement of financial position and/or subject to a master netting arrangement or similar agreement. ASU 2011-11 is effective for annual and interim periods beginning on January 1, 2013, and did not have a material effect on the Company’s results of operations or financial condition.
ASU 2012-02 “Intangibles – Goodwill and Other (Topic 350) – Testing Indefinite-Lived Intangible Assets for Impairment.” ASU 2012-02 give entities the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that an indefinite-lived intangible asset is impaired. If, after assessing the totality of events or circumstances, an entity determines it is more likely than not that an indefinite-lived intangible asset is impaired, then the entity must perform the quantitative impairment test. If, under the quantitative impairment test, the carrying amount of the intangible asset exceeds its fair value, an entity should recognize an impairment loss in the amount of that excess. Permitting an entity to assess qualitative factors when testing indefinite-lived intangible assets for impairment results in guidance that is similar to the goodwill impairment testing guidance in ASU 2011-08. ASU 2012-02 is effective for the Corporation beginning January 1, 2013 and did not have a material effect on the Company’s results of operations or financial condition.
ASU 2013-02, Comprehensive Income (Topic 220), “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income.” ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in financial statements. However, the amendments require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. This standard is effective prospectively for public entities for annual and interim reporting periods beginning after December 15, 2012. Being disclosure-related only, the Company’s adoption of ASU 2013-02 on January 1, 2013 did not have a material effect on the Company’s results of operations or financial condition.
|