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Glen Burnie Bancorp Reports Operating Results (10-Q)

November 03, 2009 | About:
10qk

10qk

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Glen Burnie Bancorp (GLBZ) filed Quarterly Report for the period ended 2009-09-30.

Glen Burnie Bancorp is a bank holding company that wholly owns The Bank of Glen Burnie a commercial bank serving northern Anne Arundel County and surrounding areas. The bank is engaged in the commercial and retail banking business including the acceptance of demand and time deposits and the origination of loans to individuals associations partnerships and corporations. The bank's real estate financing consists of residential first and second mortgage loans home equity lines of credit and commercial mortgage loans. Glen Burnie Bancorp has a market cap of $25.93 million; its shares were traded at around $9.7 with a P/E ratio of 9.6 and P/S ratio of 1.49. The dividend yield of Glen Burnie Bancorp stocks is 4.12%.

Highlight of Business Operations:

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 $527,000 ($0.20 basic and diluted earnings per share) for the third quarter of 2009, compared to the third quarter 2008 consolidated net loss of $2,118,000 ($0.71 basic and diluted loss per share), a 124.88% increase. Year-to-date consolidated net income was $1,472,000 ($0.53 basic and diluted earnings per share) for the nine months ended September 30, 2009, compared to consolidated net loss of $978,000 ($0.33 basic and diluted loss per share) for the corresponding 2008 period, a 250.51% increase. Included in the 2008 results were the affects of a write-down of $2,816,000 from three series of Fannie Mae and Freddie Mac preferred stock held by the Company taken during the third quarter of 2008. In addition to this 2008 write-down, which was not repeated in 2009, the increases from 2008 to 2009 were due to an increase in loan income and a decrease in income tax expense. The 2009 increases were partially offset by an increase in the provision for loan losses, additional interest expense on long-term borrowings from the Federal Home Loan Bank (FHLB) originated during the third quarter of 2008, an increase in interest expense on deposits, and a provision for a special FDIC assessment paid in September 2009. In addition, income for 2008 includes dividends for three quarters on the Company s holdings of FHLB stock, while 2009 income includes a dividend for the second quarter only (paid in August 2009), inasmuch as the first quarter dividend was suspended.

Net Interest Income. The Company s consolidated net interest income prior to provision for credit losses for the three and nine months ended September 30, 2009 was $3,100,000 and $8,999,000, respectively, compared to $3,121,000 and $8,979,000 for the same period in 2008, a decrease of $21,000 (0.67%) for the three months and an increase of $20,000 (0.22%) for the nine month period.

Provision for Credit Losses. The Company made a provision for credit losses of $337,000 and $696,000 during the three and nine month period ended September 30, 2009 and $239,000 and $446,000 for credit losses during the three and nine month period ended September 30, 2008. As of September 30, 2009, the allowance for credit losses equaled 55.33% of non-accrual and past due loans compared to 224.42% at December 31, 2008 and 919.11% at September 30, 2008. During the three and nine month period ended September 30, 2009, the Company recorded net charge-offs of $173,000 and $756,000, compared to net charge-offs of $224,000 and $607,000 during the corresponding period of the prior year. On an annualized basis, net charge-offs for the 2009 period represent 0.42% of the average loan portfolio.

Other Income. Other income increased from $557,000 for the three month period ended September 30, 2008, to $597,000 for the corresponding 2009 period, a $40,000 (7.18%) increase. The increase for the three month period was primarily due to an increase in gains on investment securities. For the nine month period, other income decreased from $1,539,000 at September 30, 2008, to $1,504,000 for the corresponding 2009 period, a $35,000 (2.27%) decrease. The decrease for the nine month period was primarily due to a decrease in service charges and other fees, partially offset by an increase in gains on investment securities.

Other Expenses. Other expenses decreased from $5,354,000 for the three month period ended September 30, 2008, to $2,712,000 for the corresponding 2009 period, a $2,642,000 (49.35%) decrease. The decrease for the three month period was primarily due to the $2,816,000 write-down on three series of Fannie Mae and Freddie Mac preferred stock held by the Company taken during the third quarter of 2008. For the nine month period, other expenses decreased from $10,619,000 at September 30, 2008, to $8,079,000 for the corresponding 2009 period, a $2,540,000 (23.92%) decrease. The decrease for the nine month period was primarily due to the $2,816,000 write-down taken in the third quarter of 2008 and a decrease in salaries and employee benefits in the 2009 period, partially offset by the $160,000 special FDIC assessment paid in September 2009 along with the $30,000 write-down, taken in the first quarter of 2009, on the value of a Trust Preferred security held by the Company.

Deposits as of September 30, 2009 totaled $293,436,000, which is an increase of $23,668,000 (8.77%) from $269,768,000 at December 31, 2008. Demand deposits as of September 30, 2009 totaled $67,412,000, which is an increase of $3,873,000 (6.10%) from $63,539,000 at December 31, 2008. NOW accounts as of September 30, 2009 totaled $22,389,000, which is an increase of $1,310,000 (6.21%) from $21,079,000 at December 31, 2008. Money market accounts as of September 30, 2009 totaled $14,880,000, which is an increase of $2,116,000 (16.58%), from $12,764,000 at December 31, 2008. Savings deposits as of September 30, 2009 totaled $46,806,000, which is an increase of $1,004,000 (2.19%) from $45,802,000 at December 31, 2008. Certificates of deposit over $100,000 totaled $32,459,000 on September 30, 2009, which is an increase of $4,576,000 (16.41%) from $27,883,000 at December 31, 2008. Other time deposits (made up of certificates of deposit less than $100,000 and individual retirement accounts) totaled $109,490,000 on September 30, 2009, which is a $10,789,000 (10.93%) increase from the $98,701,000 total at December 31, 2008. Management continues to believe that the growth in deposits was due in part to the ongoing instability in the stock market and the resulting reallocation of investment portfolios by the Bank s customers.

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