Glen Burnie Bancorp Announces First Quarter 2022 Results
Glen Burnie Bancorp Announces First Quarter 2022 Results

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) Income Equity
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
  Amount Ratio   Amount Ratio   Amount Ratio
As of March 31, 2022:                      
Common Equity Tier 1 Capital $ 37,201 15.33 %   $ 10,923 4.50 %   $ 15,778 6.50 %
Total Risk-Based Capital $ 39,199 16.15 %   $ 19,419 8.00 %   $ 24,273 10.00 %
Tier 1 Risk-Based Capital $ 37,201 15.33 %   $ 14,564 6.00 %   $ 19,419 8.00 %
Tier 1 Leverage $ 37,201 8.42 %   $ 17,663 4.00 %   $ 22,079 5.00 %
                       
As of December 31, 2021:                      
Common Equity Tier 1 Capital $ 37,592 15.32 %   $ 11,044 4.50 %   $ 15,952 6.50 %
Total Risk-Based Capital $ 39,329 16.03 %   $ 19,634 8.00 %   $ 24,542 10.00 %
Tier 1 Risk-Based Capital $ 37,592 15.32 %   $ 14,725 6.00 %   $ 19,634 8.00 %
Tier 1 Leverage $ 37,592 8.40 %   $ 17,910 4.00 %   $ 22,388 5.00 %
                       
As of March 31, 2021:                      
Common Equity Tier 1 Capital $ 36,425 13.68 %   $ 11,982 4.50 %   $ 17,307 6.50 %
Total Risk-Based Capital $ 38,720 14.54 %   $ 21,302 8.00 %   $ 26,627 10.00 %
Tier 1 Risk-Based Capital $ 36,425 13.68 %   $ 15,976 6.00 %   $ 21,302 8.00 %
Tier 1 Leverage $ 36,425 8.99 %   $ 16,206 4.00 %   $ 20,257 5.00 %
                       

 

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 %
                 

        

LEAVE A REPLY

Please enter your comment!
Please enter your name here