EX-99.1 2 tm2213496d1_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

 

Press Release      For Immediate Release

 

Date: April 26, 2022

 

 

GLEN BURNIE BANCORP ANNOUNCES

 

FIRST QUARTER 2022 RESULTS

 

GLEN BURNIE, MD (April 26, 2022) – 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.

 

For further information contact:

 

Jeffrey D. Harris, Chief Financial Officer

410-768-8883

jdharris@bogb.net

106 Padfield Blvd

Glen Burnie, MD 21061

 

 

 

 

 

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 March31, 2022,March31, 2021, and December31, 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             (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%