GLEN BURNIE, Md., Feb. 06, 2025 (GLOBE NEWSWIRE) -- Glen Burnie Bancorp ("Bancorp”) (NASDAQ: GLBZ), the bank holding company for The Bank of Glen Burnie ("Bank”), announced today net loss of $39,000, or -$0.01 per basic and diluted common share, for the three-month period ended December 31, 2024, compared to net income of $167,000, or $0.06 per basic and diluted common share, for the three-month period ended December 31, 2023. Bancorp reported a net loss of $112,000, or -$0.04 per basic and diluted common share, for the twelve-month period ended December 31, 2024, compared to net income of $1.4 million, or $0.50 per basic and diluted common share, for the same period in 2023. On December 31, 2024, Bancorp had total assets of $358.9 million. Bancorp is the oldest independent commercial bank in Anne Arundel County.
"Our financial performance in 2024 is disappointing and represents the challenges inherent in navigating the interest rate environment of the last several years. The Company's focus on generating additional interest-earning assets at higher current market interest rates and rebuilding our base of core, low-cost deposits was moderately successful,” said Mark C. Hanna, President, and Chief Executive Officer. "Despite the challenges of declining net interest income, the Company's financial strength is reflected in a strong capital position, available liquidity, and prudent expense management. Although interest expense increased significantly in year over year comparisons, loan growth of $28.9 million and higher yields on earning assets contributed to expanded interest income that partially offset higher interest expense and helped mitigate margin compression.”
In closing, Mr. Hanna added, "To invest in strategic opportunities that will benefit the long-term performance of the Bank, the difficult decision was made to change the longstanding practice of approving quarterly cash dividends for shareholders. As the Bank evaluates our next 75 years, we are committed to our business model and the economic strength of the communities we serve. To better serve the evolving needs of our clients, there is a need to reinvest in our people, technology, products, and facilities. 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. Our focus remains continued execution on our strategic priorities to generate organic loan and deposit growth.”
Highlights for the Quarter and Year ended December 31, 2024
Despite growth in loans and deposits for the twelve-month period ending December 31, 2024, net interest income decreased $1.2 million, or 9.84% to $10.9 million through December 31, 2024, as compared to $12.1 million during the same period of 2023. The decrease resulted primarily from a $3.1 million increase in interest expenses, offset by a $1.9 million increase in interest and fees on loans. The $2.0 million increase in interest on deposits was driven by the higher cost of money market deposit balances. The $1.0 million increase in interest on borrowings was driven by a $20.1 million increase in the average balance of borrowed funds due to the elevated level of deposit runoff that occurred in 2023.
Total interest income increased $1.9 million to $15.2 million for the twelve-month period ending December 31, 2024, compared to the same period in 2023 as the result of a $1.9 million increase in interest and fees on loans. The increase in interest income was driven by rate adjustments on loans offerings consistent with the higher interest rate environment. However, loan pricing pressure/competition will continue to place pressure on the Company's net interest margin.
The Company expects that its strong liquidity and capital positions, along with the Bank's total regulatory capital to risk weighted assets of 16.40% on December 31, 2024, compared to 18.40% for the same period of 2023, will provide ample capacity for future growth.
Return on average assets for the three-month period ended December 31, 2024, was -0.04%, compared to 0.19% for the three-month period ended December 31, 2023. Return on average equity for the three-month period ended December 31, 2024, was -0.75%, compared to 4.65% for the three-month period ended December 31, 2023. Lower net income and higher average balances drove the lower return on average assets and the lower return on average equity.
The cost of funds was 1.38% for the quarter ended December 31, 2024, compared to 0.64% for the quarter ended December 31, 2023. The 0.74% increase was primarily driven by the increase in the cost of money market deposits and borrowed funds.
The book value per share of Bancorp's common stock was $6.14 on December 31, 2024, compared to $6.70 per share on December 31, 2023. The decrease was primarily due to the increase in unrealized losses on available for sale securities caused by higher market interest rates.
On December 31, 2024, the Bank remained above all "well-capitalized” regulatory requirement levels. The Bank's tier 1 risk-based capital ratio was approximately 15.15% on December 31, 2024, compared to 17.37% on December 31, 2023. 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 $358.9 million on December 31, 2024, an increase of $7.1 million or 2.03%, from $351.8 million on December 31, 2023. Investment securities decreased by $31.5 million or 22.58%, to $107.9 million as of December 31, 2024, compared to $139.4 million for the same period of 2023. Loans, net of deferred fees and costs, were $205.2 million on December 31, 2024, an increase of $28.9 million or 16.40%, from $176.3 million on December 31, 2023. Cash and cash equivalents increased $9.2 million or 60.51%, from $15.2 million on December 31, 2023, to $24.4 million on December 31, 2024.
Total deposits were $309.2 million on December 31, 2024, an increase of $9.1 million or 3.04%, from $300.1 million on December 31, 2023. Noninterest-bearing deposits were $100.7 million on December 31, 2024, a decrease of $16.2 million or 13.83%, from $116.9 million on December 31, 2023. Interest-bearing deposits were $208.4 million on December 31, 2024, an increase of $25.3 million or 13.81%, from $183.1 million on December 31, 2023. Total borrowings were $30.0 million on December 31, 2024, unchanged from December 31, 2023.
As of December 31, 2024, total stockholders' equity was $17.8 million (4.96% of total assets), equivalent to a book value of $6.14 per common share. Total stockholders' equity on December 31, 2023, was $19.3 million (5.49% of total assets), equivalent to a book value of $6.70 per common share. The decrease in the ratio of stockholders' equity to total assets was primarily due to the $1.5 million decline in net earnings for the year ended December 31, 2024 compared to the prior year, the $0.6 million after-tax increase in market value loss on the Company's available-for-sale securities portfolio and a $7.1 million increase in total assets. The increase in unrealized losses primarily resulted from increasing market interest rates year-over-year, which decreased the fair value of the investment securities.
Asset quality, which has trended within a narrow range over the past several years, remained sound on December 31, 2024. Nonperforming assets, which consist of nonaccrual loans, loans to borrowers experiencing financial difficulty, accruing loans past due 90 days or more, and other real estate owned ("OREO”), represented 0.10% of total assets on December 31, 2024, compared to 0.15% on December 31, 2023. The $7.1 million increase in total assets from December 31, 2023, to December 31, 2024, and the $167,000 decrease in nonperforming assets drove the 0.05% decline. The allowance for credit losses on loans was $2.8 million, or 1.38% of total loans, as of December 31, 2024, compared to $2.2 million, or 1.22% of total loans, as of December 31, 2023. The allowance for credit losses for unfunded commitments was $584,000 as of December 31, 2024, compared to $473,000 as of December 31, 2023.
Review of Financial Results
For the three-month periods ended December 31, 2024, and 2023
Net loss for the three-month period ended December 31, 2024, was $39,000, compared to net income of $167,000 for the three-month period ended December 31, 2023.
Net interest income for the three-month period ended December 31, 2024, totaled $2.8 million, a decrease of $128,000 from the three-month period ended December 31, 2023. Despite a $520,000 increase in interest income, the decrease in net interest income was primarily due to a $648,000 increase in interest expenses predominantly related to the advantage money market deposit product.
Net interest margin for the three-month period ended December 31, 2024, was 2.98%, compared to 3.17% for the same period of 2023. Higher average yields and balances on interest-earning assets combined with higher average interest-bearing funds, lower average noninterest-bearing funds, and higher cost of funds were the primary drivers of year-over-year results.
The average balance of interest-earning assets increased $7.1 million while the yield increased 0.50% from 3.77% to 4.27%, when comparing the three-month periods ending December 31, 2023, and 2024, respectively. The average balance of interest-bearing funds increased $28.9 million, the average balance of noninterest-bearing funds decreased $21.3 million, and the cost of funds increased 0.74%, when comparing the three-month periods ending December 31, 2023, and 2024, respectively.
The average balance of interest-bearing deposits in banks and investment securities decreased $22.1 million from $185.9 million to $163.8 million for the fourth quarter of 2024, compared to the same period of 2023 while the yield increased 0.01% from 2.68% to 2.69% during that same period.
Average loan balances increased $29.2 million to $204.7 million for the three-month period ended December 31, 2024, compared to $175.5 million for the same period of 2023, while the yield increased from 4.96% to 5.54% during that same period. The increase in loan yields for the fourth quarter of 2024 reflected continued runoff of the low-yielding indirect automobile loan portfolio and new loan originations at higher yields.
The provision of allowance for credit loss on loans for the three-month period ended December 31, 2024, was $71,000, compared to $103,000 for the same period of 2023.
Noninterest income for the three-month period ended December 31, 2024, was $332,000, compared to $299,000 for the three-month period ended December 31, 2023, an increase of $33,000 or 11.04%. The increase was primarily driven by a $31,000 casualty gain due to insurance proceeds exceeding the book value of assets destroyed by water damage.
For the three-month period ended December 31, 2024, noninterest expense was $3.1 million, compared to $2.9 million for the three-month period ended December 31, 2023, an increase of $171,000 or 5.82%. The primary contributors to the $171,000 increase, when compared to the three-month period ended December 31, 2023, were increases in salary and employee benefits, legal, accounting, and other professional fees, data processing and item processing services and other expenses.
For the twelve-month periods ended December 31, 2024, and 2023
Net loss for the twelve-month period ended December 31, 2024, was $112,000, compared to net income of $1.4 million for the twelve-month period ended December 31, 2023.
Net interest income for the twelve-month period ended December 31, 2024, totaled $10.9 million, a decrease of $1.2 million from $12.1 million for the twelve-month period ended December 31, 2023. The decrease in net interest income was primarily due to a $3.1 million increase in interest expenses related to growth of the advantage money market deposit product balances and short-term borrowings necessitated by the deposit runoff during 2023, offset by $1.9 million higher interest and fees on loans.
Net interest margin for the twelve-month period ended December 31, 2024, was 2.98%, compared to 3.31% for the same period of 2023. Higher average yields and lower average balances of interest-earning assets combined with higher average interest-bearing funds, lower average noninterest-bearing funds, and higher cost of funds were the primary drivers of year-over-year results.
The average balance of interest-earning assets decreased $252,000, while the yield increased 0.52% from 3.63% to 4.15%, when comparing the twelve-month periods ending December 31, 2023, and 2024, respectively. The average balance of interest-bearing funds increased $20.2 million, the average balance of noninterest-bearing funds decreased $20.3 million, and the cost of funds increased 0.90%, when comparing the twelve-month periods ending December 31, 2023, and 2024, respectively.
The average balance of interest-bearing deposits in banks and investment securities decreased $13.1 million from $187.4 million to $174.3 million for the twelve-month period ending December 31, 2024, compared to the same period of 2023. The yield increased 0.16% from 2.55% to 2.71% during that same period. The increase in yields for the twelve-month period can be attributed to the change in the mix of cash balances held in interest-bearing deposits in banks and investment securities available for sale and increases in the overnight federal funds rate between the years.
Average loan balances increased $12.8 million to $192.6 million for the twelve-month period ended December 31, 2024, compared to $179.8 million for the same period of 2023. The yield increased 0.69% from 4.76% to 5.45% during that same period. The increase in loan yields for the twelve-month period ending December 31, 2024, reflected continued runoff of the low-yielding indirect automobile loan portfolio and new loan originations at higher yields.
The Company recorded a provision of allowance for credit loss on loans of $844,000 for the twelve-month period ending December 31, 2024, compared to $96,000 for the same period in 2023. The $748,000 increase in the provision in 2024 compared to 2023, primarily reflects a $61,000 increase in net charge offs, a $28.2 million increase in the reservable balance of the loan portfolio and a 0.16% increase in the current expected credit loss percentage. As a result, the allowance for credit loss on loans was $2.8 million on December 31, 2024, representing 1.38% of total loans, compared to $2.2 million, or 1.22% of total loans on December 31, 2023.
Noninterest income for the twelve-month period ended December 31, 2024, was $1.2 million, compared to $1.1 million for the twelve-month period ended December 31, 2023, an increase of $57,000 or 5.20%. The increase was driven primarily by a $52,000 increase in other fees and commissions which included a $31,000 casualty gain due to insurance proceeds exceeding the book value of assets destroyed by water damage.
For the twelve-month period ended December 31, 2024, noninterest expense was $11.9 million, compared to $11.6 million for the twelve-month period ended December 31, 2023. The primary contributors to the $253,000 increase when compared to the twelve-month period ended December 31, 2023, were increases in legal, accounting, and other professional fees, occupancy and equipment expenses, and other expenses which included the allowance for unfunded commitments, partially offset by decreases in salary and employee benefits 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 seven 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) | |||||||||||
| December 31, | September 30, | December 31, | |||||||||
| 2024 | 2024 | 2023 | |||||||||
| (unaudited) | (unaudited) | (audited) | |||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ | 2,012 | $ | 2,255 | $ | 1,940 | |||||
| Interest-bearing deposits in other financial institutions | 22,452 | 20,207 | 13,301 | ||||||||
| Total Cash and Cash Equivalents | 24,464 | 22,462 | 15,241 | ||||||||
| Investment securities available for sale, at fair value | 107,949 | 119,958 | 139,427 | ||||||||
| Restricted equity securities, at cost | 1,671 | 246 | 1,217 | ||||||||
| Loans, net of deferred fees and costs | 205,219 | 206,975 | 176,307 | ||||||||
| Less: Allowance for credit losses | (2,839 | ) | (2,748 | ) | (2,157 | ) | |||||
| Loans, net | 202,380 | 204,227 | 174,150 | ||||||||
| Premises and equipment, net | 2,630 | 2,723 | 3,046 | ||||||||
| Bank owned life insurance | 8,834 | 8,789 | 8,657 | ||||||||
| Deferred tax assets, net | 8,548 | 6,879 | 7,897 | ||||||||
| Accrued interest receivable | 1,345 | 1,478 | 1,192 | ||||||||
| Accrued taxes receivable | 148 | 497 | 121 | ||||||||
| Prepaid expenses | 471 | 486 | 475 | ||||||||
| Other assets | 516 | 614 | 390 | ||||||||
| Total Assets | $ | 358,956 | $ | 368,359 | $ | 351,813 | |||||
| LIABILITIES | |||||||||||
| Noninterest-bearing deposits | $ | 100,747 | $ | 115,938 | $ | 116,922 | |||||
| Interest-bearing deposits | 208,442 | 198,335 | 183,145 | ||||||||
| Total Deposits | 309,189 | 314,273 | 300,067 | ||||||||
| Short-term borrowings | 30,000 | 30,000 | 30,000 | ||||||||
| Defined pension liability | 330 | 329 | 324 | ||||||||
| Accrued expenses and other liabilities | 1,620 | 2,597 | 2,097 | ||||||||
| Total Liabilities | 341,139 | 347,199 | 332,488 | ||||||||
| STOCKHOLDERS' EQUITY | |||||||||||
| Common stock, par value $1, authorized 15,000,000 shares, issued and outstanding 2,900,681; 2,900,681; 2,882,627; shares as of December 31, 2024, September 30, 2024, and December 31, 2023 respectively. | 2,901 | 2,901 | 2,883 | ||||||||
| Additional paid-in capital | 11,037 | 11,037 | 10,964 | ||||||||
| Retained earnings | 22,882 | 22,921 | 23,859 | ||||||||
| Accumulated other comprehensive loss | (19,003 | ) | (15,699 | ) | (18,381 | ()[\]\\.,;:\s@\"]+)*)|(\".+\"))@((\[[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\])|(([a-zA-Z\-0-9]+\.)+[a-zA-Z]{2,}))$/;return b.test(a)}$(document).ready(function(){if(performance.navigation.type==2){location.reload(true)}$("iframe[data-lazy-src]").each(function(b){$(this).attr("src",$(this).attr("data-lazy-src"))});if($(".owl-article-body-images").length){$(".owl-article-body-images").owlCarousel({items:1,loop:true,center:false,dots:false,autoPlay:true,mouseDrag:false,touchDrag:false,pullDrag:false,nav:true})}var a=$("#display_full_text").val();if(a==0){$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:$("#cms_article_id").val()},dataType:"json",success:function(b){},error:function(b,d,c){}})}$(".read-full-article").on("click",function(d){d.preventDefault();var b=$(this).attr("data-cmsArticleId");var c=$(this).attr("data-productId");var f=$(this).attr("data-href");dataLayer.push({event:"paywall_click",paywall_name:"the_manila_times_premium",paywall_id:"paywall_article_"+b});$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:b,productId:c},dataType:"json",success:function(e){window.location.href=$("#BASE_URL").val()+f},error:function(e,h,g){}})});$(".article-embedded-newsletter-form .close-btn").on("click",function(){$(".article-embedded-newsletter-form").fadeOut(1000)})});$(document).on("click",".article-embedded-newsletter-form .newsletter-button",function(){var b=$(".article-embedded-newsletter-form .newsletter_email").val();var d=$("#ga_user_id").val();var c=$("#ga_user_yob").val();var a=$("#ga_user_gender").val();var e=$("#ga_user_country").val();if(validateEmail(b)){$.ajax({url:"/ajax/sendynewsletter",type:"POST",data:{email:b},success:function(f){$(".article-embedded-newsletter-form .nf-message").html(f);$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000);dataLayer.push({event:"newsletter_sub",user_id:d,product_name:"newsletter",gender:a,yob:c,country:e})},error:function(f,h,g){}})}else{$(".article-embedded-newsletter-form .nf-message").html("Please enter a valid email address.");$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000)}});$(document).on("click",".article-embedded-newsletter-form .nf-message",function(){$(this).removeClass("show");$(this).html("")});
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