UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended March 31, 2003
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-24047
GLEN BURNIE BANCORP
(Exact name of registrant as specified in its charter)
Maryland 52-1782444
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
101 Crain Highway, S.E.
Glen Burnie, Maryland 21061
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 766-3300
Inapplicable
(Former name, former address and former fiscal year
if changed from last report.)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act. Yes No X
--- ---
At May 1, 2003, the number of shares outstanding of the registrant's common
stock was 1,679,359.
TABLE OF CONTENTS
-----------------
Part I - Financial Information Page
----
Item 1. Consolidated Financial Statements:
-------
Condensed Consolidated Balance Sheets,
March 31, 2003 (unaudited) and
December 31, 2002 (audited) 3
Condensed Consolidated Statements of Income
for the Three Months Ended March 31, 2003
and 2002 (unaudited) 4
Condensed Consolidated Statements of Comprehensive
Income for the Three Months Ended March 31, 2003
and 2002 (unaudited) 5
Condensed Consolidated Statements of Cash Flows
for the Three Months Ended March 31, 2003
and 2002 (unaudited) 6
Notes to Unaudited Condensed Consolidated
Financial Statements 7
Item 2. Management's Discussion and Analysis of
------- and Results of Operations Financial Condition 8
Item 3. Quantitative And Qualitative Disclosure
------- About Market Risk 12
Item 4. Controls and Procedures 12
-------
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 13
-------
Signatures 14
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
March 31, 2003 December 31,
ASSETS -------------- 2002
(unaudited) ----
(audited)
Cash and due from banks $10,072 $11,297
Interest-bearing deposits in other financial institutions 4,757 41
Federal funds sold 6,412 4,404
------- -------
Cash and cash equivalents 21,241 15,742
Certificates of deposit in other financial institutions 100 100
Investment securities available for sale, at fair value 90,680 84,658
Investment securities held to maturity, at cost
(fair value March 31: $6,554; December 31: $7,616) 6,207 7,202
Federal Home Loan Bank stock, at cost 896 703
Common Stock in the Glen Burnie Statutory Trust I 155 155
Loans, less allowance for credit losses
(March 31: $2,380; December 31: $2,515) 157,850 158,287
Premises and equipment, at cost, less accumulated depreciation 4,350 4,143
Other real estate owned 412 413
Cash value of life insurance 5,091 5,025
Other assets 2,675 2,978
-------- --------
Total assets $289,657 $279,406
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $252,800 $241,420
Short-term borrowings 104 837
Long-term borrowings 7,245 7,251
Other liabilities 2,246 2,953
-------- --------
Total liabilities 262,395 252,461
-------- --------
COMMITMENTS AND CONTINGENCIES
Guaranteed preferred beneficial interests in Glen Burnie Bancorp
junior subordinated debentures 5,155 5,155
-------- --------
STOCKHOLDERS' EQUITY:
Common stock, par value $1, authorized 15,000,000 shares;
Issued and outstanding: March 31: 1,679,359 shares;
December 31: 1,677,173 shares 1,679 1,677
Surplus 10,679 10,638
Retained earnings 8,401 7,947
Accumulated other comprehensive income, net of tax 1,348 1,528
-------- --------
Total stockholders' equity 22,107 21,790
-------- --------
Total liabilities and stockholders' equity $289,657 $279,406
======== ========
See accompanying notes to condensed consolidated financial statements.
3
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended March 31,
2003 2002
---- ----
Interest income on:
Loans, including fees $2,819 $3,115
U.S. Treasury and U.S. Government agency securities 487 605
State and Municipal securities 375 258
Other 131 143
------ ------
Total interest income 3,812 4,121
------ ------
Interest expense on:
Deposits 899 1,124
Short-term borrowings 1 2
Long-term borrowings 108 106
Junior subordinated debentures 136 136
------ ------
Total interest expense 1,144 1,368
------ ------
Net interest income 2,668 2,753
Provision for credit losses 0 0
------ ------
Net interest income after provision for credit losses 2,668 2,753
------ ------
Other income:
Service charges on deposit accounts 258 249
Other fees and commissions 208 138
Other non-interest income 2 3
Gain on termination of post-retirement plan 0 764
Gains on investment securities 92 4
------ ------
Total other income 560 1,158
------ ------
Other expenses:
Salaries and employee benefits 1,465 1,424
Occupancy 212 146
Other expenses 798 900
------ ------
Total other expenses 2,475 2,470
------ ------
Income before income taxes 753 1,441
Income tax expense 97 453
------ ------
Net income $656 $ 988
==== =====
Basic and diluted earnings per share of common stock $0.39 $0.59
===== =====
Weighted average shares of common stock outstanding 1,677,339 1,663,770
========= =========
Dividends declared per share of common stock $0.12 $0.10
===== =====
See accompanying notes to condensed consolidated financial statements.
4
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in Thousands)
(Unaudited)
Three Months Ended March 31,
----------------------------
2003 2002
---- ----
Net income $656 $988
Other comprehensive income (loss), net of tax
Unrealized gains (losses) securities:
Unrealized holding losses arising
during period (124) (235)
Reclassification adjustment for gains
included in net income (56) (2)
---- ----
Comprehensive income $476 $751
==== ====
See accompanying notes to condensed consolidated financial statements.
5
GLEN BURNIE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Three Months Ended March 31,
----------------------------
2003 2002
---- ----
Cash flows from operating activities:
Net income $656 $988
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization, and accretion 10 114
Provision for credit losses 0 0
Gains on disposals of assets, net (92) (4)
Income on investment in life insurance (66) 0
Changes in assets and liabilities:
Decrease (increase) in other assets 372 (254)
Decrease in other liabilities (630) (816)
---- ----
Net cash provided by operating activities 250 28
---- ----
Cash flows from investing activities:
Maturities of available for sale mortgage-backed securities 7,146 2,684
Proceeds from disposals of investment securities 4,232 3,134
Purchases of investment securities (16,458) (7,025)
Purchases of Federal Home Loan Bank stock (193) (51)
Decrease in loans, net 437 2,249
Purchases of premises and equipment (320) (12)
------- ------
Net cash (used) provided by investing activities (5,156) 979
------- ------
Cash flows from financing activities:
Increase (decrease) in deposits, net 11,380 (55)
Decrease in short-term borrowings (733) (69)
Repayment of long-term borrowings (6) (6)
Dividends paid (279) (195)
Common stock dividends reinvested 43 36
------ ----
Net cash provided (used) by financing activities 10,405 (289)
------ ----
Increase in cash and cash equivalents 5,499 718
Cash and cash equivalents, beginning of year 15,742 18,220
------ ------
Cash and cash equivalents, end of period $21,241 $18,938
======= =======
See accompanying notes to condensed consolidated financial statements.
6
GLEN BURNIE BANCORP AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements were prepared
in accordance with instructions for Form 10-Q and, therefore, do not include all
information and notes necessary for a complete presentation of financial
position, results of operations, changes in stockholders' equity, and cash flows
in conformity with accounting principles generally accepted in the United States
of America. However, all adjustments (consisting only of normal recurring
accruals) which, in the opinion of management, are necessary for a fair
presentation of the unaudited consolidated financial statements have been
included in the results of operations for the three months ended March 31, 2003
and 2002.
Operating results for the three-month period ended March 31, 2003 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2003.
NOTE 2 - EARNINGS PER SHARE
Basic earnings per share of common stock are computed by dividing net
earnings by the weighted average number of common shares outstanding during the
period. Diluted earnings per share are calculated by including the average
dilutive common stock equivalents outstanding during the periods. Dilutive
common equivalent shares consist of stock options, calculated using the treasury
stock method.
Three Months Ended
March 31, 2003
--------------
Diluted:
Net income $ 656,000
Weighted average common shares outstanding 1,677,339
Dilutive effect of stock options
4,555
----------
Average common shares outstanding - diluted 1,681,894
Diluted net income per share $0.39
Diluted earnings per share calculations were not required for the three months
ended March 31, 2002 since there were no options outstanding.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
General. Glen Burnie Bancorp, a Maryland corporation (the "Company"), and
its subsidiaries, The Bank of Glen Burnie (the "Bank") and GBB Properties, Inc.,
both Maryland corporations, and Glen Burnie Statutory Trust I, a Connecticut
business trust, had consolidated net income of $656,000 ($0.39 basic and diluted
earnings per share) for the first quarter of 2003, compared to first quarter
2002 consolidated net income of $988,000 ($0.59 basic and diluted earnings per
share). Included in the results for the 2002 period is an after-tax increase of
$470,000 in consolidated net income ($764,000 pre-tax) arising from the negative
amendment to the Bank's post-retirement health insurance benefit plan which was
recognized in the first quarter of 2002. Consolidated net income for the first
quarter of 2002 without this gain was $518,000.
Net Interest Income. The Company's consolidated net interest income prior
to provision for credit losses for the three months ended March 31, 2003 was
$2,668,000 compared to $2,753,000 for the same period in 2002, a decrease of
$85,000 (3.1%) for the three-month period. This decline was primarily
attributable to a decrease in loan income, partially offset by a decrease in
interest expense on deposits.
Interest income decreased $309,000 (7.5%) for the three months ended March
31, 2003, compared to the same period in 2002, primarily due to a decrease in
loan income as a result of a declining interest rate environment.
Interest expense declined $224,000 (16.4%) for the three months ended March
31, 2003 compared to the 2002 period, principally due to a decrease in interest
expense on deposits as a result of a declining interest rate environment.
Net interest margins for the three months ended March 31, 2003 was 4.53%,
compared to tax equivalent net interest margins of 4.80% for the three months
ended March 31, 2002. The decline in net interest margins for the three months
ended March 31, 2003 was primarily due to a decline in the interest rates on
earning assets, partially offset by a decline in the interest rates on deposits.
Provision For Credit Losses. The Company made no additional provision for
credit losses during the three month periods ended March 31, 2003 and 2002. As
of March 31, 2003, the allowance for credit losses equaled 309.90% of
non-accrual and past due loans compared to 429.13% at December 31, 2002 and
596.21% at March 31, 2002. During the three month period ended March 31, 2003,
the Company recorded net charge-offs of $135,000, compared to net charge-offs of
$106,000 during the corresponding period of the prior year. On an annualized
basis, net charge-offs for the 2003 period represent 0.34% of the average loan
portfolio.
Other Income. Other income declined from $1,158,000 for the three month
period ended March 31, 2002, to $560,000 for the corresponding 2003 period, a
$598,000 (51.6%) decline. Other income for 2002 included a gain of $764,000
arising from the negative amendment on the Bank's post-retirement health
insurance benefit plan which was recognized in the quarter ended March 31, 2002.
Other income for 2002 without the gain arising from the negative amendment on
the Bank's post-retirement health insurance benefit plan was $394,000. The
decrease in other income for the 2003 period was primarily due to the absence of
this gain, partially offset by increases in other fees and commissions due to
income on investments in life insurance and increases in securities gains.
Other Expense. Other expense increased slightly from $2,470,000 for the
three month period ended March 31, 2002, to $2,475,000 for the corresponding
2003 period, a $5,000 (0.2%) increase. The increase was due to a increase in
salary and benefit expenses and occupancy expenses, partially offset by a
decline in professional fees included in other expenses.
Income Taxes. During the three months ended March 31, 2003, the Company
recorded income tax expense of $97,000, compared to an income tax expense of
$453,000 for the corresponding period of the prior year. The decrease in income
tax expenses is primarily due to a decrease in other non-interest income
combined with an increase in tax exempt income. The Company's effective tax rate
for the three month period in 2003 was 13%, compared to 31% for the prior year
period.
8
FINANCIAL CONDITION
General. The Company's assets grew to $289,657,000 at March 31, 2003 from
$279,406,000 at December 31, 2002, primarily due to an increase in investments,
interest-bearing deposits in other financial institutions and federal funds
sold. The Bank's net loans totaled $157,850,000 at March 31, 2003, compared to
$158,287,000 at December 31, 2002, a decrease of $437,000 (0.3%), primarily
attributable to a decline in the portfolio of indirect loans.
The Company's total investment securities portfolio (including both
investment securities available for sale and investment securities held to
maturity) totaled $96,887,000 at March 31, 2003, a $5,027,000 (5.5%) increase
from $91,860,000 at December 31, 2002. The Bank's cash and cash equivalents
(cash due from banks, interest-bearing deposits in other financial institutions,
and federal funds sold), as of March 31, 2003, totaled $21,241,000, an increase
of $5,499,000 (34.9%) from the December 31, 2002 total of $15,742,000. The
aggregate market value of investment securities held by the Bank as of March 31,
2003 was $97,234,000 compared to $92,274,000 as of December 31, 2002, a
$4,960,000 (5.4%) increase.
Deposits as of March 31, 2003 totaled $252,800,000, which is an increase of
$11,380,000 (4.7%) from $241,420,000 at December 31, 2002. Demand deposits as of
March 31, 2003 totaled $66,427,000 which is an increase of $7,365,000 (12.5%)
from $59,062,000 at December 31, 2002. NOW accounts as of March 31, 2003 totaled
$24,470,000 which is an increase of $399,000 (1.6%) from $24,071,000 at December
31, 2002. Money market accounts as of March 31, 2003 totaled $22,061,000 which
is an increase of $2,172,000 (10.9%), from $19,889,000 at December 31, 2002.
Savings deposits as of March 31, 2003 totaled $50,269,000 an increase of
$2,653,000 (5.6%) from $47,616,000 at December 31, 2002. Certificates of deposit
over $100,000 totaled $17,951,000 on March 31, 2003, an increase of $253,000
(1.4%) from $17,698,000 at December 31, 2002. Other time deposits (made up of
certificates of deposit less than $100,000 and individual retirement accounts)
totaled $71,513,000 on March 31, 2003, a $1,569,000 (2.1%) decrease from the
$73,082,000 total at December 31, 2002.
Asset Quality. The following table sets forth the amount of the Bank's
restructured loans, non-accrual loans and accruing loans 90 days or more past
due at the dates indicated.
9
At March 31, At December 31,
------------ ---------------
2003 2002
---- ----
(Dollars in Thousands)
Restructured loans $ 0 $ 41
===== =====
Non-accrual loans:
Real estate - mortgage:
Residential $ 447 $ 264
Commercial 0 178
Real estate - construction 8 7
Installment 106 112
Credit card & related 0 0
Commercial 190 10
----- -----
Total non-accrual loans 751 571
----- -----
Accruing loans past due 90 days or more:
Real estate - mortgage:
Residential 15 1
Commercial 0 0
Real estate - construction 1 0
Installment 1 14
Credit card & related 0 0
Commercial 0 0
Other 0 0
----- -----
Total accruing loans past due 90 days or more 17 15
----- -----
Total non-accrual and past due loans $ 768 $ 586
===== =====
Non-accrual and past due loans to gross loans 0.49% 0.36%
===== =====
Allowance for credit losses to non-accrual and past due loans 309.90% 429.1%
====== =====
At March 31, 2003, there were no loans outstanding, other than those
reflected in the above table, as to which known information about possible
credit problems of borrowers caused management to have serious doubts as to the
ability of such borrowers to comply with present loan repayment terms. Such
loans consist of loans which were not 90 days or more past due but where the
borrower is in bankruptcy or has a history of delinquency, or the loan to value
ratio is considered excessive due to deterioration of the collateral or other
factors.
Allowance For Credit Losses. The allowance for credit losses is established
through a provision for credit losses charged to expense. Loans are charged
against the allowance for credit losses when management believes that the
collectibility of the principal is unlikely. The allowance, based on evaluations
of the collectibility of loans and prior loan loss experience, is an amount that
management believes will be adequate to absorb possible losses on existing loans
that may become uncollectible. The evaluations take into consideration such
factors as changes in the nature and volume of the loan portfolio, overall
portfolio quality, review of specific problem loans, and current economic
conditions and trends that may affect the borrowers' ability to pay.
10
Transactions in the allowance for credit losses for the three months ended
March 31, 2003 and 2002 were as follows:
Three Months Ended
March 31,
---------
2003 2002
---- ----
(Dollars in Thousands)
Beginning balance $ 2,515 $ 2,938
Charge-offs (223) (140)
Recoveries 88 34
-------- --------
Net charge-offs (135) (106)
Provisions charged to operations 0 0
-------- --------
Ending balance $ 2,380 $ 2,832
======== ========
Average loans $157,764 $163,338
Net charge offs to average loans (annualized) 0.34% 0.26%
Reserve for Unfunded Commitments. As of March 31, 2003, the Bank had
outstanding commitments totaling $16,615,817. These outstanding commitments
consisted of letters of credit, undrawn lines of credit, and other loan
commitments. The following table shows the Bank's reserve for unfunded
commitments arising from these transactions:
Three Months Ended
March 31,
2003 2002
---- ----
(Dollars in Thousands)
Beginning balance $ 150 $ 150
Provisions charged to operations 0 0
----- -----
Ending balance $ 150 $ 150
===== =====
LIQUIDITY AND CAPITAL RESOURCES
The Company currently has no business other than that of the Bank and does
not currently have any material funding commitments. The Company's principal
sources of liquidity are cash on hand and dividends received from the Bank. The
Bank is subject to various regulatory restrictions on the payment of dividends.
The Bank's principal sources of funds for investments and operations are
net income, deposits from its primary market area, principal and interest
payments on loans, interest received on investment securities and proceeds from
maturing investment securities. Its principal funding commitments are for the
origination or purchase of loans and the payment of maturing deposits. Deposits
are considered a primary source of funds supporting the Bank's lending and
investment activities.
The Bank's most liquid assets are cash and cash equivalents, which are cash
on hand, amounts due from financial institutions, federal funds sold,
certificates of deposit with other financial institutions that have an original
maturity of three months or less and money market mutual funds. The levels of
such assets are dependent on the Bank's operating financing and investment
activities at any given time. The variations in levels of cash and cash
equivalents are influenced by deposit flows and anticipated future deposit
flows. The Bank's cash and cash equivalents (cash due from banks,
interest-bearing deposits in other financial institutions, and federal funds
sold), as of March 31, 2003, totaled $21,241,000, an increase of $5,499,000
(34.9%) from the December 31, 2002 total of $15,742,000.
As of March 31, 2003, the Bank was permitted to draw on a $34,700,000 line
of credit from the FHLB of Atlanta. Borrowings under the line are secured by a
11
floating lien on the Bank's residential mortgage loans. As of March 31, 2003, a
$7.0 million long-term convertible advance was outstanding under this line. In
addition the Bank has a secured line of credit in the amount of $5.0 million
from another commercial bank on which it has not drawn. Furthermore, as of March
31, 2003, the Company had outstanding $5,155,000 of its 10.6% Junior
Subordinated Deferrable Interest Debentures issued to Glen Burnie Statutory
Trust I, a Connecticut statutory trust subsidiary of the Company.
The Company's stockholders' equity increased $317,000 (1.45%) during the
three months ended March 31, 2003, due to earnings, partially offset by
decreases in equity accounts from dividend distributions. The Company's
accumulated other comprehensive income, net of tax decreased by $180,000
(11.78%) from $1,528,000 at December 31, 2002 to $1,348,000 at March 31, 2003,
as a result of a decrease in unrealized holding gains on investment securities
arising during the period. Retained earnings increased by $454,000 (5.71%) as
the result of the Company's earnings during the quarter which were partially
offset by dividends declared. In addition, $43,000 was transferred to
stockholders' equity in consideration for shares to be issued under the
Company's dividend reinvestment plan in lieu of cash dividends.
The Federal Reserve Board and the FDIC have established guidelines with
respect to the maintenance of appropriate levels of capital by bank holding
companies and state non-member banks, respectively. The regulations impose two
sets of capital adequacy requirements: minimum leverage rules, which require
bank holding companies and banks to maintain a specified minimum ratio of
capital to total assets, and risk-based capital rules, which require the
maintenance of specified minimum ratios of capital to "risk-weighted" assets. At
March 31, 2003, the Bank was in full compliance with these guidelines with a
Tier 1 leverage ratio of 8.94%, a Tier 1 risk-based capital ratio of 13.67% and
a total risk-based capital ratio of 14.92%.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Based on the evaluation of the Company's disclosure controls and procedures
by F. William Kuethe, Jr., the Company's Chief Executive Officer, and John E.
Porter, the Company's Chief Financial Officer, as of a date within 90 days of
the filing date of this quarterly report, such officers have concluded that the
Company's disclosure controls and procedures are effective in ensuring that
information required to be disclosed by the Company in the reports that it files
or submits under the Securities and Exchange Act of 1934, as amended, is
recorded, processed, summarized and reported, within the time period specified
by the Securities and Exchange Commission's rules and forms.
There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
12
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit No.
3.1 Articles of Incorporation (incorporated by reference to Exhibit 3.1 to
Amendment No. 1 to the Registrant's Form 8-A filed December 27, 1999,
File No. 0-24047)
3.2 By-Laws (incorporated by reference to Exhibit 3.2 to the Registrant's
Annual Report on Form 10-K for the Fiscal Year Ended December 31,
1998, File No. 0-24047)
3.3 Articles Supplementary, dated November 16, 1999 (incorporated by
reference to Exhibit 3.3 to the Registrant's Current Report on Form
8-K filed December 8, 1999, File No. 0-24047)
4.1 Rights Agreement, dated as of February 13, 1998, between Glen Burnie
Bancorp and The Bank of Glen Burnie, as Rights Agent, as amended and
restated as of December 27, 1999 (incorporated by reference to Exhibit
4.1 to Amendment No. 1 to the Registrant's Form 8-A filed December 27,
1999, File No. 0-24047)
10.1 Glen Burnie Bancorp Director Stock Purchase Plan (incorporated by
reference to Exhibit 99.1 to Post-Effective Amendment No. 1 to the
Registrant's Registration Statement on Form S-8, File No. 33-62280)
10.2 The Bank of Glen Burnie Employee Stock Purchase Plan (incorporated by
reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form
10-Q for the Period Ended March 31, 2002, File No. 0-24047)
10.3 Amended and Restated Change-in-Control Severance Plan (incorporated by
reference to Exhibit 10.3 to the Registrant's Annual Report on Form
10-K for the Fiscal Year Ended December 31, 2001, File No. 0-24047)
10.4 The Bank of Glen Burnie Executive and Director Deferred Compensation
Plan (incorporated by reference to Exhibit 10.4 to the Registrant's
Annual Report on Form 10-K for the Fiscal Year Ended December 31,
1999, File No. 0-24047)
31.1 Rule 15d-14(a) Certification of Chief Executive Officer
31.2 Rule 15d-14(a) Certification of Chief Financial Officer
32 Section 1350 Certifications
99 Press Release issued April 30, 2003
(b) Reports on Form 8-K:
None.
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GLEN BURNIE BANCORP
(Registrant)
Date: May 1, 2003 By: /s/ F. William Kuethe, Jr.
----------------------------------
F. William Kuethe, Jr.
President, Chief Executive Officer
By: /s/ John E. Porter
----------------------------------
John E. Porter
Chief Financial Officer
14
Exhibit 31.1
RULE 15d-14(a) CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, F. William Kuethe, Jr., certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Glen Burnie
Bancorp;
2. Based on my knowledge, this Quarterly Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Quarterly
Report;
3. Based on my knowledge, the financial statements, and other financial
information included in this Quarterly Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this Quarterly Report;
4. The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the Registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this Quarterly Report (the "Evaluation Date"); and
c) presented in this Quarterly Report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The Registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the Registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrant's ability to
record, process, summarize and report financial data and have
identified for the Registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
controls; and
6. The Registrant's other certifying officers and I have indicated in this
Quarterly Report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 1, 2003 /s/ F. William Kuethe, Jr.
------------------------------------
F. William Kuethe, Jr.
Chief Executive Officer
Exhibit 31.2
RULE 15d-14(a) CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, John E. Porter, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Glen Burnie
Bancorp;
2. Based on my knowledge, this Quarterly Report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this Quarterly
Report;
3. Based on my knowledge, the financial statements, and other financial
information included in this Quarterly Report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
Registrant as of, and for, the periods presented in this Quarterly Report;
4. The Registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:
d) designed such disclosure controls and procedures to ensure that
material information relating to the Registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
e) evaluated the effectiveness of the Registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this Quarterly Report (the "Evaluation Date"); and
f) presented in this Quarterly Report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The Registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the Registrant's auditors and the audit
committee of Registrant's board of directors (or persons performing the
equivalent function):
c) all significant deficiencies in the design or operation of internal
controls which could adversely affect the Registrant's ability to
record, process, summarize and report financial data and have
identified for the Registrant's auditors any material weaknesses in
internal controls; and
d) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Registrant's internal
controls; and
6. The Registrant's other certifying officers and I have indicated in this
Quarterly Report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: May 1, 2003 /s/ John E. Porter
------------------------------------
John E. Porter
Chief Financial Officer
Exhibit 32
SECTION 1350 CERTIFICATIONS
In connection with the Quarterly Report of Glen Burnie Bancorp (the
"Company") on Form 10-Q for the period ending March 31, 2003 as filed with the
Securities and Exchange Commission and to which this Certification is an exhibit
(the "Report"), the undersigned hereby certify, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company for the periods reflected therein.
Date: May 1, 2003 /s/ F. William Kuethe, Jr.
------------------------------------
F. William Kuethe, Jr.
President, Chief Executive Officer
/s/ John E. Porter
------------------------------------
John E. Porter
Chief Financial Officer
Exhibit 99
FOR IMMEDIATE RELEASE CONTACT: Alison Tavik
- --------------------------------------------------------------------------------
410-768-8857
adtavik@bogb.net
GLEN BURNIE BANCORP REPORTS
FIRST QUARTER INCOME
GLEN BURNIE, MD (April 30, 2003) - Glen Burnie Bancorp (Nasdaq SmallCap: GLBZ),
parent company of The Bank of Glen Burnie, today announced results for the first
quarter.
The company realized net income of $656,000 or $.39 basic earnings per
share in the quarter ended March 31, 2003. The company reported net income of
$988,000 or $.59 basic earnings per share for the same three-month period in
2002 which included a one-time, after-tax gain of $470,000 resulting from an
amendment to the Bank's post-retirement benefit program.
"The highlight to our first quarter was the relocation of our Severna Park
branch office," said President & CEO F. William Kuethe, Jr. "The new location is
larger, provides easier access for customers and offers greater visibility.
Although the site had been a bank branch, we did an extensive renovation
program, installing new teller stations, drive-in window, ATM, and security
system. We also put in a new vault and added a privacy room for safe deposit
customers," Kuethe stated.
"We are very pleased that income from our core banking business has
increased substantially compared to last year's first quarter results," said
Kuethe. "Looking at our core banking business of net interest, fee and
investment income [without the inclusion of the 2002 one-time after-tax gain of
$470,000 resulting from an amendment to the bank's post-retirement benefit
program], net income for 2002 was $518,000, and our 2003 first quarter net
income of $656,000 represents a 27% growth in these core earnings." Kuethe
added, "While our reported net income for the first quarter of 2003 is 34% lower
than reported net income for the first quarter of 2002, we continue to grow
assets, we remain well capitalized, our liquidity ratios are well positioned and
our delinquency rate is below peer group."
The Bank of Glen Burnie recently received a 5-Star Superior Rating from
BAUER FINANCIAL Reports, Inc., the nation's leading independent bank research
firm. This distinction, awarded in March 2003, denotes the highest level of
strength, safety and performance measured by Bauer. The 5-Star Superior Rating
is based on factors such as capitalization, liquidity, loan delinquency rate and
historical performance.
On April 8, 2003, the company paid a 12 cent ($0.12) dividend per share of
common stock to shareholders of record at the close of business on March 25,
2003, marking the company's 42nd consecutive dividend. Glen Burnie Bancorp will
host its 2003 Annual Meeting of Stockholders on Thursday, May 8th at La Fontaine
Bleu in Glen Burnie, Maryland. Registration opens at 1:30 p.m. and the meeting
will begin at 2 p.m.
Glen Burnie Bancorp, parent company to The Bank of Glen Burnie,
(www.thebankofglenburnie.com) maintains assets totaling more than $280 million.
The Bank of Glen Burnie is a locally-owned community bank with seven branches
serving Anne Arundel County.
# # # #
Certain information contained in this news release, which does not relate to
historical financial information, may be deemed to constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Such statements are subject to certain risks and uncertainties, which
could cause the company's actual results in the future to differ materially from
its historical results and those presently anticipated or projected. For a more
complete discussion of these and other risk factors, please see the company's
reports filed with the Securities and Exchange Commission.
Glen Burnie Bancorp and Subsidiaries
Condensed Consolidated Balance Sheet
(dollars in thousands, except per share amounts)
(unaudited)
March December
31, 2003 31, 2002
----------------------
Assets
Cash and due from banks $10,072 $11,297
Interest bearing deposits 4,757 41
Federal funds sold 6,412 4,404
Investment securities 96,887 91,860
Common Stock in the Glen Burnie Statutory Trust I 155 155
Loans, net of allowance 157,850 158,287
Premises and equipment at cost, net of accumulated depreciation 4,350 4,143
Other real estate owned 412 413
Other assets 8,762 8,806
-------- --------
Total assets $289,657 $279,406
======== ========
Liabilities and Stockholders' Equity
Liabilities:
Deposits $252,800 $241,420
Short-term borrowings 104 837
Long-term borrowings 7,245 7,251
Other liabilities 2,246 2,953
-------- --------
Total liabilities $262,395 $252,461
======== ========
Guaranteed preferred beneficial interests in Glen Burnie
Bancorp junior subordinated debentures 5,155 5,155
-------- --------
Stockholders' equity:
Common stock, par value $1, authorized 15,000,000 shares;
issued and outstanding March 31, 2003 1,679,359 shares;
December 31, 2002 1,677,173 shares $1,679 $1,677
Surplus 10,679 10,638
Retained earnings 8,401 7,947
Accumulated other comprehensive income 1,348 1,528
-------- --------
Total stockholders' equity $22,107 $21,790
-------- --------
Total liabilities and stockholders' equity $289,657 $279,406
======== ========
Glen Burnie Bancorp and Subsidiaries
Condensed Consolidated Balance Sheet
(dollars in thousands, except per share amounts)
Three Months Ended
March 31,
2003 2002
------------------
Interest income on
Loans, including fees $2,819 $3,115
U.S. Treasury and U.S. Government agency securities 487 605
State and municipal securities 375 258
Other 131 143
------ ------
Total interest income 3,812 4,121
====== ======
Interest expense on
Deposits 899 1,124
Junior subordinated debentures 136 136
Long-term borrowings 108 106
Short-term borrowings 1 2
------ ------
Total interest expense 1,144 1,368
Net interest income 2,668 2,753
Provision for credit losses 0 0
------ ------
Net interest income after provision for credit losses 2,668 2,753
Other income
Service charges on deposit accounts 258 249
Other fees and commissions 208 138
Other non-interest income 2 3
Gain on termination of post-retirement plan 0 764
Gains on investment securities 92 4
------ ------
Total other income 560 1,158
Other expenses
Salaries and employee benefits 1,465 1,424
Occupancy 212 146
Other expenses 798 900
------ ------
Total other expenses 2,475 2,470
Income before income taxes 753 1,441
Income tax expense (benefit) 97 453
------ ------
Net income $656 $988
====== ======
Net income per share of common stock $0.39 $0.59
====== ======
Weighted-average shares of common stock outstanding 1,677,339 1,663,770
========= =========