Home > Earnings

Earnings

Print

GLEN BURNIE BANCORP ANNOUNCES THIRD QUARTER 2018 RESULTS

 

GLEN BURNIE, MD (October 23, 2018) – Glen Burnie Bancorp (“Bancorp”) (NASDAQ: GLBZ), the bank holding company for The Bank of Glen Burnie (“Bank”), announced today net income of $0.54 million, or $0.19 per basic and diluted common share for the three-month period ended September 30, 2018, as compared to net income of $0.41 million, or $0.15 per basic and diluted common share for the three-month period ended September 30, 2017.

Bancorp reported net income of $1.28 million, or $0.45 per basic and diluted common share for the nine-month period ended September 30, 2018, compared to $1.06 million, or $0.38 per basic and diluted common share for the same period in 2017.  Net loans grew by $23.7 million, or 8.81% at September 30, 2018 when compared to the same period of 2017.  At September 30, 2018, Bancorp had total assets of $411.4 million.  Bancorp, the oldest independent commercial bank in Anne Arundel County, will pay its 105th consecutive quarterly dividend on November 2, 2018.

“We are pleased to report a strong quarter that was highlighted by expansion of our net interest margin and net interest income reflecting outstanding credit quality, disciplined loan pricing, and a beneficial balance sheet structure.  Our third quarter results are consistent with our expectations and reflect year-over-year improvement in our profitability, driven by strong revenue growth,” stated John D. Long, President and CEO.  “Our net interest margin increased to 3.34% in the third quarter of 2018 compared with 3.10% in the same period of 2017.  The improved net interest margin exhibits a higher yield on average earning assets, primarily reflecting an increased yield on loans, which more than offset a higher cost of funds.  Our cost of funds continued to trend upwards in the third quarter, reflecting the continuing rising interest rate environment.  We believe that our current balance sheet structure positions our net interest income to benefit from any further Federal Open Market Committee tightening,” Mr. Long continued, “Our net income in the third quarter of 2018 increased 31.87% to $0.54 million compared with $0.41 million in the year-ago quarter.  We also made several changes during the third quarter to streamline our operations and we remain focused on controlling overhead costs.  Our sustained strength in core profitability, sound capital position, and healthy loan pipeline positions us to take advantage of future growth opportunities and finish the year strong.”

Highlights for the First Nine Months of 2018

Bancorp continued to grow organically in the third quarter of 2018 driven primarily by favorable net loan growth.  Bancorp has strong liquidity and capital positions that provide ample capacity for future growth, along with the Bank’s total regulatory capital to risk weighted assets of 12.64% at September 30, 2018, as compared to 14.68% for the same period of 2017.

Return on average assets for the three-month period ended September 30, 2018 was 0.54%, as compared to 0.42% for the three-month period ended September 30, 2017.  Return on average equity for the three-month period ended September 30, 2018 was 6.50%, as compared to 4.82% for the three-month period ended September 30, 2017.

The book value per share of Bancorp’s common stock was $11.86 at September 30, 2018, as compared to $12.38 per share at September 30, 2017.

At September 30, 2018, the Bank remained above all “well-capitalized” regulatory requirement levels.  The Bank’s tier 1 risk-based capital ratio was approximately 11.75% at September 30, 2018, as compared to 13.63% at September 30, 2017.  Liquidity remained strong due to managed cash and cash equivalents, borrowing lines with the FHLB of Atlanta, the Federal Reserve and correspondent banks, and the size and composition of the bond portfolio.

Balance Sheet Review

Total assets were $411.4 million at September 30, 2018, an increase of $21.5 million or 5.51%, from $389.9 million at September 30, 2017.  Investment securities were $84.0 million at September 30, 2018, a decrease of $5.9 million or 6.53%, from $89.9 million at September 30, 2017.  Loans, net of deferred fees and costs, were $295.0 million at September 30, 2018, an increase of $23.5 million or 8.66%, from $271.5 million at September 30, 2017.  Bank owned life insurance decreased $1.7 million or 17.52% from September 30, 2017 to September 30, 2018 primarily due to the redemption of BOLI policies.  Other assets increased $0.7 million from September 30, 2017 to September 30, 2018 primarily due to the increase in fair value of pay-fixed interest rate swaps used to convert variable rate FHLB borrowing into fixed rate debt.

Total deposits were $336.8 million at September 30, 2018, an increase of $2.7 million or 0.82%, from $334.1 million at September 30, 2017.  Noninterest-bearing deposits were $107.9 million at September 30, 2018, an increase of $3.3 million or 3.20%, from $104.6 million at September 30, 2017.  Interest-bearing deposits were $228.9 million at September 30, 2018, a decrease of $0.6 million or 0.26%, from $229.5 million at September 30, 2017.  Total borrowings were $40.0 million at September 30, 2018, an increase of $20.0 million or 100.00%, from $20.0 million at September 30, 2017.

Stockholders’ equity was $33.3 million at September 30, 2018, a decrease of $1.3 million from $34.0 million at September 30, 2017.  The $1.4 million increase in accumulated other comprehensive loss associated with net unrealized losses on the available for sale bond portfolio, offset by unrealized gains on interest rate swap contracts primarily drove the decrease in stockholders’ equity.

Nonperforming assets, which consist of nonaccrual loans, troubled debt restructurings, accruing loans past due 90 days or more, and other real estate owned, represented 0.75% of total assets at September 30, 2018, as compared to 1.08% for the same period of 2017.

Review of Financial Results

For the three-month periods ended September 30, 2018 and 2017

Net income for the three-month period ended September 30, 2018 was $0.54 million, as compared to net income of $0.41 million for the three-month period ended September 30, 2017.

Net interest income for the three-month period ended September 30, 2018 totaled $3.30 million, as compared to $2.94 million for the three-month period ended September 30, 2017.  Average earning loan balances increased to $294 million for the three-month period ended September 30, 2018, as compared to $271 million for the same period of 2017.

Net interest margin for the three-month period ended September 30, 2018 was 3.34%, as compared to 3.10% for the same period of 2017.  Higher yields on interest-earning assets were the primary driver of year-over-year results, as the yield on interest-earning assets increased 0.28% from 3.63% to 3.91% and the cost of funds increased 0.05% from 0.55% to 0.60% for the three-month periods ending September 30, 2018 and 2017, respectively.

The provision for loan losses for the three-month period ended September 30, 2018 was $246,000, as compared to $78,000 for the same period of 2017.  The increase for the three-month period ended September 30, 2018 primarily reflects loan growth.  As a result, the allowance for loan losses was $2.46 million at September 30, 2018, representing 0.83% of total loans, as compared to $2.62 million, or 0.97% of total loans at September 30, 2017.

Noninterest income for the three-month period ended September 30, 2018 was $331,000, as compared to $368,000 for the three-month period ended September 30, 2017.

For the three-month period ended September 30, 2018, noninterest expense was $2.76 million, as compared to $2.71 million for the three-month period ended September 30, 2017.  The primary contributors to the $0.05 million increase, when compared to the three-month period ended September 30, 2017 were increases in salary and employee benefits, legal, accounting and other professional fees, data processing and items processing service, offset by decreases in occupancy and equipment expenses, advertising and marketing related expenses and telephone costs.

For the nine-month periods ended September 30, 2018 and 2017

Net income for the nine-month period ended September 30, 2018 was $1.28 million, as compared to net income of $1.06 million for the nine-month period ended September 30, 2017.

Net interest income for the nine-month period ended September 30, 2018 totaled $9.35 million, as compared to $8.66 million for the nine-month period ended September 30, 2017.  Average earning loan balances increased to $283 million for the nine-month period ended September 30, 2018, as compared to $269 million for the same period of 2017.

Net interest margin for the nine-month period ended September 30, 2018 was 3.26%, as compared to 3.09% for the same period of 2017.  Higher yields on interest-earning assets were the primary drivers of year-over-year results, as the yield on interest-earning assets increased 0.17% from 3.62% to 3.79% and the cost of funds remained unchanged at 0.55% for the nine-month periods ending September 30, 2018 and 2017, respectively.

The provision for loan losses for the nine-month period ended September 30, 2018 was $601,000, as compared to $243,000 for the same period of 2017.  The increase for the nine-month period ended September 30, 2018 primarily reflects loan growth.  As a result, the allowance for loan losses was $2.46 million at September 30, 2018, representing 0.83% of total loans, as compared to $2.62 million, or 0.97% of total loans for the same period of 2017.

Noninterest income for the nine-month period ended September 30, 2018 was $1.20 million, as compared to $0.94 million for the nine-month period ended September 30, 2017.  The results for the first nine-month of 2018 include gains on redemptions of BOLI policies of $306,877.

For the nine-month period ended September 30, 2018, noninterest expense was $8.60 million, as compared to $8.10 million for the nine-month period ended September 30, 2017.  The primary contributors to the $0.43 million increase, when compared to the nine-month period ended September 30, 2017 were increases in salary and employee benefits, legal, accounting and other professional fees and loan collection costs, partially offset by decreases in advertising and marketing related expenses and telephone costs.

# # #

Glen Burnie Bancorp Information

Glen Burnie Bancorp is a bank holding company headquartered in Glen Burnie, Maryland. Founded in 1949, The Bank of Glen Burnie® is a locally-owned community bank with 8 branch offices serving Anne Arundel County. 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. The Bank also originates automobile loans through arrangements with local automobile dealers. Additional information is available at www.thebankofglenburnie.com.

Forward-Looking Statements

The statements contained herein that are not 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. These statements are evidenced by terms such as “anticipate,” “estimate,” “should,” “expect,” “believe,” “intend,” and similar expressions. Although these statements reflect management’s good faith beliefs and projections, they are not guarantees of future performance and they may not prove true. For a more complete discussion of these and other risk factors, please see the company’s reports filed with the Securities and Exchange Commission.