• Glen Burnie Bancorp Announces First Quarter 2022 Results

    المصدر: Nasdaq GlobeNewswire / 26 أبريل 2022 10:03:10   America/New_York

    GLEN BURNIE, Md., April 26, 2022 (GLOBE NEWSWIRE) -- Glen Burnie Bancorp (“Bancorp”) (NASDAQ: GLBZ), the bank holding company for The Bank of Glen Burnie (“Bank”), today reported results for the first quarter ended March 31, 2022. Net income for the first quarter was $0.23 million, or $0.08 per basic and diluted common share, as compared to $0.59 million, or $0.21 per basic and diluted common share for the three-month period ended March 31, 2021.   On March 31, 2022, Bancorp had total assets of $437.4 million. Bancorp, the oldest independent commercial bank in Anne Arundel County, will pay its 119th consecutive quarterly dividend on May 9, 2022.

    “We reported solid earnings, strong credit quality metrics, and robust capital ratios for the first quarter of 2022 as we continue to invest in building out the foundation for prudent future growth,” said John D. Long, President and Chief Executive Officer.   “With the forward yield curve expectation of rising interest rates, we anticipate realizing more of the benefit of our deposit franchise. New business pipelines remain solid, and our balance sheet is positioned to benefit the Company in a rising rate environment. Asset quality remains strong as we continue to experience net recoveries of previously charged off loans. Our balance sheet remains strong, as well, which will allow us to grow loans and give our investments the flexibility to weather market volatility.

    “Our residential mortgage and commercial pipelines have begun to normalize back to pre-pandemic levels, and we are cautiously optimistic that the business environment will remain favorable despite the headwinds of high inflation, rising interest rates, and geo-political tensions. We remain focused on maintaining rigorous underwriting standards and driving profitable growth across our markets while continuing to provide outstanding customer service.   We are determined to deploy our excess liquidity responsibly to maximize our earning potential while recognizing the challenges of the shifting economic cycle. As interest rates increase and our balance sheet mix shifts from cash to higher yielding assets, we expect our core net interest margin to grow.”

    Commenting on the first quarter results, Mr. Long continued, “In a period of market volatility, we believe that we delivered another quarter of strong performance. A devaluation of the investment portfolio, resulting in a higher level of unrealized losses, had a negative impact on our stockholders’ equity. Furthermore, the changes in investment gains and losses impact capital on an ongoing basis and were adversely impacted by the dramatic increase in market interest rates during the first quarter of 2022.”

    In closing, Mr. Long added, “In these very unusual times, our strength and resolve enable us to take exceptional care of our customers, employees, and communities. Based on our capital levels, conservative underwriting policies, on- and off-balance sheet liquidity, strong loan diversification, and current economic conditions within the markets we serve, management expects to navigate the uncertainties and remain well-capitalized.”

    Highlights for the First Three Months of 2022

    Net interest income declined $196,000, or 6.81% to $2.7 million on March 31, 2022, as compared to $2.9 million during the prior-year first quarter. The decline was driven by the repricing impact on earning asset yields resulting from the change in asset mix from higher yielding loans to lower yielding investment securities, and the investment of excess liquidity derived from strong deposit growth. Partially offsetting the lower earning asset yields, the cost of funds improved 8 basis points to 0.23%, reflecting an improved funding mix. The decline in net interest income as a result of these factors was intensified by the Company’s decision to maintain significantly higher levels of excess balance sheet liquidity during the first quarter of 2022.

    Because of minimal charge-offs, recoveries on previously charged off loans, reduction in the Company’s loan portfolio, and strong credit discipline, the Company was able to continue to release portions of its allowance for credit losses on loans in the first quarter of 2022. The Company expects that its strong liquidity and capital positions, along with the Bank’s total regulatory capital to risk weighted assets of 16.15% on March 31, 2022, as compared to 14.54% for the same period of 2021, will provide ample capacity for future growth.

    Return on average assets for the three-month period ended March 31, 2022, was 0.21%, as compared to 0.58% for the three-month period ended March 31, 2021. Return on average equity for the three-month period ended March 31, 2022, was 2.74%, as compared to 6.68% for the three-month period ended March 31, 2021. Lower net income and higher average asset balances primarily drove the lower return on average assets, while lower net income, partially offset by a lower average equity balance, primarily drove the lower return on average equity.

    On March 31, 2022, the Bank remained above all "well-capitalized" regulatory requirement levels. The Bank’s tier 1 risk-based capital ratio was approximately 15.33% on March 31, 2022, as compared to 15.32% on December 31, 2021. 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 $437.4 million on March 31, 2022, a decrease of $4.7 million or 1.05%, from $442.1 million on December 31, 2021. Investment securities were $147.4 million on March 31, 2022, a decrease of $8.5 million or 5.49%, from $155.9 million on December 31, 2021.   Loans, net of deferred fees and costs, were $204.3 million on March 31, 2022, a decrease of $6.1 million or 2.92%, from $210.4 million on December 31, 2021. Cash and cash equivalents increased $6.7 million or 10.71%, from December 31, 2021, to March 31, 2022. Deferred tax assets increased $3.2 million or 333.93%, from December 31, 2021, to March 31, 2022.

    Total deposits were $387.8 million on March 31, 2022, an increase of $4.5 million or 1.18%, from $383.2 million on December 31, 2021. Noninterest-bearing deposits were $155.0 million on March 31, 2022, a decrease of $0.6 million or 0.38%, from $155.6 million on December 31, 2021. Interest-bearing deposits were $232.7 million on March 31, 2022, an increase of $5.1 million or 2.25%, from $227.6 million on December 31, 2021. Total borrowings were $20.0 million on March 31, 2022, unchanged from December 31, 2021.

    As of March 31, 2022, total stockholders’ equity was $27.3 million (6.24% of total assets), equivalent to a book value of $9.55 per common share. Total stockholders’ equity on December 31, 2021, was $35.7 million (8.08% of total assets), equivalent to a book value of $12.51 per common share. The reduction in the ratio of stockholders’ equity to total assets was due to lower asset balances, along with decreases to equity from the decline in market value of the Company’s available-for-sale securities portfolio. Included in stockholders’ equity on March 31, 2022, and December 31, 2021, were unrealized losses (net of taxes) on the Company’s available-for-sale investment securities and derivative contracts totaling $9.3 million and $0.9 million, respectively. This decrease in unrealized losses primarily resulted from increasing market interest rates during the first quarter of 2022, which decreased the fair value of the investment securities.

    Asset quality, which has trended within a narrow range over the past several years, has remained sound and reflected no pandemic-related impact on March 31, 2022. Nonperforming assets, which consist of nonaccrual loans, troubled debt restructurings, accruing loans past due 90 days or more, and other real estate owned, represented 0.05% of total assets on March 31, 2022, as compared to 0.02% on December 31, 2021, demonstrating positive asset quality trends across the portfolio. The allowance for credit losses on loans was $2.4 million, or 1.17% of total loans, as of March 31, 2022, as compared to $2.5 million, or 1.17% of total loans, as of December 31, 2021. The allowance for credit losses for unfunded commitments was $354,000 as of March 31, 2022, as compared to $371,000 as of December 31, 2021. Net recoveries of previously charged off loans were $11,000 for the quarter ended March 31, 2022, as compared to net recoveries of $62,000 for the quarter ended December 31, 2021.

    Review of Financial Results

    For the three-month periods ended March 31, 2022, and 2021

    Net income for the three-month period ended March 31, 2022, was $0.23 million, as compared to $0.59 million for the three-month period ended March 31, 2021. The decrease was predominantly driven by a decrease of $0.3 million in the release of allowance for credit losses on loans and a decrease of $0.2 million in net interest income.

    Net interest income for the three-month period ended March 31, 2022, totaled $2.7 million, as compared to $2.9 million for the three-month period ended March 31, 2021. Average earning-asset balances were $429 million on March 31, 2022, as compared to $399 million during the prior-year first quarter.   Although deposit driven excess liquidity fueled average interest-earning asset growth, competitive loan origination pressures as well as a low interest rate environment drove the decrease in average interest-earning asset yields.

    Net interest margin for the three-month period ended March 31, 2022, was 2.54%, as compared to 2.93% for the same period of 2021, a decrease of 0.39%. Higher average balances combined with lower yields on interest-earning assets, and lower cost of funds on interest-bearing liabilities and higher noninterest-bearing deposits were the primary drivers of the results. The average balance on interest-earning assets increased $30 million while the yield decreased 0.41%. The cost of funds decreased 0.08% from 0.31% to 0.23%. While the strong deposit inflows are creating excess liquidity in the short-term that impacts net interest margin, the Company believes it is well positioned to generate higher revenue in the future as these funds are redeployed into higher yielding earning assets.

    The release of allowance for loan losses on loans for the three-month period ended March 31, 2022, was $100,000, as compared to a release of $404,000 for the same period of 2021. The decrease for the three-month period ended March 31, 2022, when compared to the three-month period ended March 31, 2021, primarily reflects a $42.1 million decrease in the reservable balance of the loan portfolio (excluding PPP loans) and a $160,000 decrease in net charge offs.

    Noninterest income for the three-month period ended March 31, 2022, was $254,000, as compared to $247,000 for the three-month period ended March 31, 2021.

    For the three-month period ended March 31, 2022, noninterest expense was $2.78 million, as compared to $2.83 million for the three-month period ended March 31, 2021. The primary contributors to the $0.05 million decrease, when compared to the three-month period ended March 31, 2021, were decreases in salary and employee benefits, data processing and item processing services, FDIC insurance costs, loan collection costs, and telephone costs, offset by increases in occupancy and equipment expenses, and legal, accounting, and other professional fees.

    For the three-month period ended March 31, 2022, income tax expense was $21,000, as compared with $106,000 for the same period a year earlier. The effective tax rate was 9.76%, compared with 15.20% for the same period a year ago.  

    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.

         
    GLEN BURNIE BANCORP AND SUBSIDIARY    
    CONSOLIDATED BALANCE SHEETS     
    (dollars in thousands)     
          
          
     March 31, March 31, December 31,
      2022   2021   2021 
     (unaudited) (unaudited) (audited)
    ASSETS     
    Cash and due from banks$2,071  $2,130  $2,111 
    Interest-bearing deposits in other financial institutions 66,769   38,344   60,070 
    Total Cash and Cash Equivalents 68,840   40,474   62,181 
          
    Investment securities available for sale, at fair value 147,371   134,897   155,927 
    Restricted equity securities, at cost 1,074   1,062   1,062 
          
    Loans, net of deferred fees and costs 204,252   246,853   210,392 
    Less: Allowance for credit losses(1) (2,380)  (2,921)  (2,470)
    Loans, net 201,872   243,932   207,922 
          
    Real estate acquired through foreclosure -   575   - 
    Premises and equipment, net 3,492   3,793   3,564 
    Bank owned life insurance 8,375   8,219   8,338 
    Deferred tax assets, net 4,148   1,646   956 
    Accrued interest receivable 1,124   1,277   1,085 
    Accrued taxes receivable 280   75   301 
    Prepaid expenses 513   410   347 
    Other assets 356   364   383 
    Total Assets$437,445  $436,724  $442,066 
          
    LIABILITIES     
    Noninterest-bearing deposits$155,027  $147,822  $155,624 
    Interest-bearing deposits 232,747   221,101   227,623 
    Total Deposits 387,774   368,923   383,247 
          
    Short-term borrowings 10,000   31,244   10,000 
    Long-term borrowings 10,000   -   10,000 
    Defined pension liability 311   290   304 
    Accrued expenses and other liabilities 2,080   2,792   2,799 
    Total Liabilities 410,165   403,249   406,350 
          
    STOCKHOLDERS' EQUITY     
    Common stock, par value $1, authorized 15,000,000 shares,      
    issued and outstanding 2,856,257, 2,845,104, and 2,853,880      
    shares as of March 31, 2022, March 31, 2021, and December 31, 2021,      
    respectively. 2,856   2,845   2,854 
    Additional paid-in capital 10,784   10,670   10,759 
    Retained earnings 22,922   21,909   22,977 
    Accumulated other comprehensive loss (9,282)  (1,949)  (874)
    Total Stockholders' Equity 27,280   33,475   35,716 
    Total Liabilities and Stockholders' Equity$437,445  $436,724  $442,066 
          
    (1) Effective January 1, 2021, the Company applied ASU 2016-13, Financial Instruments – Credit Losses (“ASC 326”), such that the allowance calculation is based on current expected credit loss methodology (“CECL”). Prior to January 1, 2021, the calculation was based on incurred loss methodology.
                


    GLEN BURNIE BANCORP AND SUBSIDIARY
    CONSOLIDATED STATEMENTS OF INCOME
    (dollars in thousands, except per share amounts)
    (unaudited)
         
      Three Months Ended March 31,
       2022   2021 
    Interest income    
    Interest and fees on loans $2,168  $2,637 
    Interest and dividends on securities  698   505 
    Interest on deposits with banks and federal funds sold  50   19 
    Total Interest Income  2,916   3,161 
         
    Interest expense    
    Interest on deposits  124   168 
    Interest on short-term borrowings  102   116 
    Interest on long-term borrowings  8   - 
    Total Interest Expense  234   284 
         
    Net Interest Income  2,682   2,877 
    Release of credit loss provision  (100)  (404)
    Net interest income after release of credit loss provision  2,782   3,281 
         
    Noninterest income    
    Service charges on deposit accounts  42   40 
    Other fees and commissions  174   169 
    Income on life insurance  38   38 
    Total Noninterest Income  254   247 
         
    Noninterest expenses    
    Salary and employee benefits  1,620   1,630 
    Occupancy and equipment expenses  331   302 
    Legal, accounting and other professional fees  324   213 
    Data processing and item processing services  226   257 
    FDIC insurance costs  26   42 
    Advertising and marketing related expenses  22   22 
    Loan collection costs  (75)  6 
    Telephone costs  44   77 
    Other expenses  266   279 
    Total Noninterest Expenses  2,784   2,828 
         
    Income before income taxes  252   700 
    Income tax expense  21   106 
         
    Net income $231  $594 
         
    Basic and diluted net income per common share $0.08  $0.21 
         

     

    GLEN BURNIE BANCORP AND SUBSIDIARY
    CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
    For the three months ended March 31, 2022 and 2021     
    (dollars in thousands)         
    (unaudited)         
              
           Accumulated  
       Additional   Other Total
     Common Paid-in Retained Comprehensive Stockholders'
     Stock Capital Earnings (Loss) IncomeEquity
    Balance, December 31, 2020$2,842 $10,640 $23,071  $540  $37,093 
              
    Net income -  -  594   -   594 
    Cash dividends, $0.10 per share -  -  (284)  -   (284)
    Dividends reinvested under         
    dividend reinvestment plan 3  30    -   33 
    Transition adjustment pursuant to adoption of ASU 2016-3         
    to adoption of ASU 2016-3     (1,472)    (1,472)
    Other comprehensive loss -  -  -   (2,489)  (2,489)
    Balance, March 31, 2021$2,845 $10,670 $21,909  $(1,949) $33,475 
              
              
           Accumulated  
       Additional   Other Total
     Common Paid-in Retained Comprehensive Stockholders'
     Stock Capital Earnings Income/(Loss) Equity
    Balance, December 31, 2021$2,854 $10,759 $22,977  $(874) $35,716 
              
    Net income -  -  231   -   231 
    Cash dividends, $0.10 per share -  -  (286)  -   (286)
    Dividends reinvested under         
    dividend reinvestment plan 2  25  -   -   27 
    Other comprehensive loss -  -  -   (8,408)  (8,408)
    Balance, March 31, 2022$2,856 $10,784 $22,922  $(9,282) $27,280 
              

     

    THE BANK OF GLEN BURNIE        
    CAPITAL RATIOS           
    (dollars in thousands)           
    (unaudited)           
                
              To Be Well
              Capitalized Under
          To Be Considered  Prompt Corrective
          Adequately Capitalized  Action Provisions
     AmountRatio AmountRatio AmountRatio
    As of March 31, 2022:           
    Common Equity Tier 1 Capital$37,20115.33% $10,9234.50% $15,7786.50%
    Total Risk-Based Capital$39,19916.15% $19,4198.00% $24,27310.00%
    Tier 1 Risk-Based Capital$37,20115.33% $14,5646.00% $19,4198.00%
    Tier 1 Leverage$37,2018.42% $17,6634.00% $22,0795.00%
                
    As of December 31, 2021:           
    Common Equity Tier 1 Capital$37,59215.32% $11,0444.50% $15,9526.50%
    Total Risk-Based Capital$39,32916.03% $19,6348.00% $24,54210.00%
    Tier 1 Risk-Based Capital$37,59215.32% $14,7256.00% $19,6348.00%
    Tier 1 Leverage$37,5928.40% $17,9104.00% $22,3885.00%
                
    As of March 31, 2021:           
    Common Equity Tier 1 Capital$36,42513.68% $11,9824.50% $17,3076.50%
    Total Risk-Based Capital$38,72014.54% $21,3028.00% $26,62710.00%
    Tier 1 Risk-Based Capital$36,42513.68% $15,9766.00% $21,3028.00%
    Tier 1 Leverage$36,4258.99% $16,2064.00% $20,2575.00%
                

     

    GLEN BURNIE BANCORP AND SUBSIDIARY    
    SELECTED FINANCIAL DATA      
    (dollars in thousands, except per share amounts)  
             
             
      Three Months Ended Year Ended
      March 31, December 31,March 31, December 31,
       2022   2021   2021   2021 
      (unaudited) (unaudited) (unaudited) (unaudited)
             
    Financial Data        
    Assets $437,445  $442,066  $436,724  $442,066 
    Investment securities  147,371   155,927   134,897   155,927 
    Loans, (net of deferred fees & costs) 204,252   210,392   246,853   210,392 
    Allowance for loan losses  2,380   2,470   2,921   2,470 
    Deposits  387,774   383,247   368,923   383,247 
    Borrowings  20,000   20,000   31,244   20,000 
    Stockholders' equity  27,280   35,716   33,475   35,716 
    Net income  231   555   594   2,516 
             
    Average Balances        
    Assets $441,472  $447,261  $414,801  $431,169 
    Investment securities  155,599   151,919   118,606   145,496 
    Loans, (net of deferred fees & costs) 207,321   217,347   248,920   233,956 
    Deposits  384,776   388,168   355,538   371,958 
    Borrowings  20,002   20,000   20,564   20,309 
    Stockholders' equity  34,119   36,254   36,072   36,010 
             
    Performance Ratios        
    Annualized return on average assets 0.21%  0.49%  0.58%  0.58%
    Annualized return on average equity 2.74%  6.07%  6.68%  6.99%
    Net interest margin  2.54%  2.95%  2.93%  3.00%
    Dividend payout ratio  124%  51%  48%  45%
    Book value per share $9.55  $12.51  $11.77  $12.51 
    Basic and diluted net income per share  0.08   0.19   0.21   0.88 
    Cash dividends declared per share  0.10   0.10   0.10   0.40 
    Basic and diluted weighted average shares outstanding  2,855,253   2,852,689   2,843,775   2,848,465 
             
    Asset Quality Ratios        
    Allowance for loan losses to loans  1.17%  1.17%  1.18%  1.17%
    Nonperforming loans to avg. loans  0.10%  0.16%  1.79%  0.15%
    Allowance for loan losses to nonaccrual & 90+ past due loans  1103.7%  703.7%  65.5%  703.7%
    Net charge-offs annualize to avg. loans  -0.02%  -0.11%  -0.44%  -0.17%
             
    Capital Ratios        
    Common Equity Tier 1 Capital  15.33%  15.32%  13.68%  15.32%
    Tier 1 Risk-based Capital Ratio  15.33%  15.32%  13.68%  15.32%
    Leverage Ratio  8.42%  8.40%  8.99%  8.40%
    Total Risk-Based Capital Ratio  16.15%  16.03%  14.54%  16.03%
             

    For further information contact:
    
    Jeffrey D. Harris, Chief Financial Officer
    410-768-8883
    jdharris@bogb.net
    106 Padfield Blvd
    Glen Burnie, MD 21061

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