10-Q 1 glbz-20240630x10q.htm 10-Q
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 10-Q

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☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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For the Quarterly period ended June 30, 2024

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OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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Commission file number 0-24047

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GLEN BURNIE BANCORP

(Exact name of registrant as specified in its charter)

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Maryland

    

52-1782444

(State or other jurisdiction of

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(I.R.S. Employer

incorporation or organization)

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Identification No.)

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101 Crain Highway, S.E.

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Glen Burnie, Maryland

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21061

(Address of principal executive offices)

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(Zip Code)

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Registrant’s telephone number, including area code: (410) 766-3300

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Inapplicable

(Former name, former address and former fiscal year if changed from last report.)

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.      Yes ⌧  No ☐

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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes ⌧  No ☐

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Indicate by check mark if the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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Large accelerated filer

☐

Accelerated filer

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Non-Accelerated Filer

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Smaller Reporting Company

☒

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Emerging growth company

☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐ No ⌧

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Securities registered pursuant to Section 12(b) of the Act:

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Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, par value $1.00 per share

GLBZ

The NASDAQ Stock Market LLC

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The number of shares of the registrant’s common stock outstanding as of August 5, 2024, was 2,900,681.

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GLEN BURNIE BANCORP AND SUBSIDIARY

TABLE OF CONTENTS

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Page

Part I.

FINANCIAL INFORMATION

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Item 1.

Financial Statements:

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Consolidated Balance Sheets: As of June 30, 2024 (unaudited) and December 31, 2023 (audited)

3

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Consolidated Statements of Income: Three- and six-months Ended June 30, 2024 and 2023 (unaudited)

4

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Consolidated Statements of Comprehensive Income (Loss): Three- and six-months Ended June 30, 2024 and 2023 (unaudited)

5

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​

​

​

Consolidated Statements of Changes in Stockholders’ Equity: Six months Ended June 30, 2024 and 2023 (unaudited)

6

​

​

​

​

Consolidated Statements of Cash Flows: Six months Ended June 30, 2024 and 2023 (unaudited)

7

​

​

​

​

Notes to Consolidated Financial Statements

8

​

​

​

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

28

​

​

​

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

42

​

​

​

Item 4.

Controls and Procedures

42

​

​

​

Part II.

OTHER INFORMATION

42

​

​

​

Item 1.

Legal Proceedings

42

​

​

​

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

42

​

​

​

Item 3.

Defaults Upon Senior Securities

42

​

​

​

Item 4.

Mine Safety Disclosures

42

​

​

​

Item 5.

Other Information

42

​

​

​

Item 6.

Exhibits

42

​

​

​

​

SIGNATURES

44

​

​

​

​

​

​

- 2 -

PART I – FINANCIAL INFORMATION

ITEM 1.     CONSOLIDATED FINANCIAL STATEMENTS

​

GLEN BURNIE BANCORP AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

​

​

​

​

​

​

​

​

​

June 30, 

​

December 31, 

​

​

2024

​

2023

​

​

​

(unaudited)

​

​

(audited)

ASSETS

​

​

​

​

​

​

Cash and due from banks

​

$

1,804

​

$

1,940

Interest-bearing deposits in other financial institutions

​

 

14,982

​

 

13,301

Cash and Cash Equivalents

​

 

16,786

​

 

15,241

​

​

​

​

​

​

​

Investment securities available for sale, at fair value

​

 

117,180

​

 

139,427

Restricted equity securities, at cost

​

​

246

​

​

1,217

​

​

​

​

​

​

​

Loans, net of deferred fees and costs

​

 

201,500

​

 

176,307

Less: Allowance for credit losses

​

​

(2,625)

​

​

(2,157)

Loans, net

​

​

198,875

​

​

174,150

​

​

​

​

​

​

​

Premises and equipment, net

​

 

2,833

​

 

3,046

Bank owned life insurance

​

 

8,744

​

 

8,657

Deferred tax assets, net

​

​

8,329

​

​

7,897

Accrued interest receivable

​

 

1,358

​

 

1,192

Accrued taxes receivable

​

 

552

​

 

121

Prepaid expenses

​

 

355

​

 

475

Other assets

​

 

458

​

 

390

Total Assets

​

$

355,716

​

$

351,813

​

​

​

​

​

​

​

LIABILITIES

​

​

​

​

​

​

Noninterest-bearing deposits

​

$

109,631

​

$

116,922

Interest-bearing deposits

​

 

196,235

​

 

183,145

Total Deposits

​

 

305,866

​

 

300,067

​

​

​

​

​

​

​

Short-term borrowings

​

 

30,000

​

 

30,000

Defined pension liability

​

​

328

​

​

324

Accrued expenses and other liabilities

​

 

2,051

​

 

2,097

Total Liabilities

​

​

338,245

​

​

332,488

​

​

​

​

​

​

​

STOCKHOLDERS' EQUITY

​

​

​

​

​

​

Common stock, par value $1, authorized 15,000,000 shares, issued and outstanding 2,893,648 and 2,882,627 shares as of June 30, 2024 and December 31, 2023, respectively.

​

 

2,894

​

 

2,883

Additional paid-in capital

​

 

11,014

​

 

10,964

Retained earnings

​

 

23,081

​

 

23,859

Accumulated other comprehensive loss

​

 

(19,518)

​

​

(18,381)

Total Stockholders' Equity

​

​

17,471

​

​

19,325

​

​

​

​

​

​

​

Total Liabilities and Stockholders' Equity

​

$

355,716

​

$

351,813

See accompanying notes to unaudited consolidated financial statements.

​

- 3 -

GLEN BURNIE BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands, except per share amounts)

(unaudited)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30, 

​

Six Months Ended June 30, 

​

    

2024

    

2023

    

2024

    

2023

INTEREST INCOME

 

​

  

 

​

  

 

​

  

 

​

  

Interest and fees on loans

​

$

2,525

​

$

2,135

​

$

4,740

​

$

4,223

Interest and dividends on securities

​

​

854

​

​

999

​

​

1,791

​

​

1,964

Interest on deposits with banks and
federal funds sold

​

 

514

​

 

133

​

 

767

​

 

365

Total Interest Income

​

 

3,893

​

 

3,267

​

 

7,298

​

 

6,552

​

​

​

​

​

​

​

​

​

​

​

​

​

INTEREST EXPENSE

​

 

  

​

 

  

​

 

  

​

 

  

Interest on deposits

​

 

584

​

 

115

​

 

986

​

 

222

Interest on short-term borrowings

​

 

523

​

 

38

​

 

955

​

 

38

Total Interest Expense

​

 

1,107

​

 

153

​

 

1,941

​

 

260

​

​

​

​

​

​

​

​

​

​

​

​

​

Net Interest Income

​

 

2,786

​

 

3,114

​

 

5,357

​

 

6,292

​

​

​

​

​

​

​

​

​

​

​

​

​

Provision of credit loss allowance

​

 

526

​

 

127

​

 

694

​

 

85

Net interest income after credit loss provision

​

 

2,260

​

 

2,987

​

 

4,663

​

 

6,207

​

​

​

​

​

​

​

​

​

​

​

​

​

NONINTEREST INCOME

​

 

  

​

 

  

​

 

  

​

 

  

Service charges on deposit accounts

​

 

35

​

 

38

​

 

73

​

 

80

Other fees and commissions

​

 

162

​

 

161

​

 

311

​

 

326

Income on life insurance

​

​

44

​

​

40

​

​

87

​

​

79

Total Noninterest Income

​

 

241

​

 

239

​

 

471

​

 

485

​

​

​

​

​

​

​

​

​

​

​

​

​

NONINTEREST EXPENSE

​

 

  

​

 

  

​

 

  

​

 

  

Salary and benefits

​

 

1,601

​

 

1,701

​

 

3,219

​

 

3,398

Occupancy and equipment expenses

​

​

338

​

​

299

​

​

669

​

​

627

Legal, accounting and other professional fees

​

​

248

​

​

235

​

​

502

​

​

498

Data processing and item processing services

​

​

243

​

​

281

​

​

492

​

​

549

FDIC insurance costs

​

​

40

​

​

37

​

​

78

​

​

82

Advertising and marketing related expenses

​

​

25

​

​

23

​

​

48

​

​

45

Loan collection costs

​

​

—

​

​

2

​

​

6

​

​

3

Telephone costs

​

 

29

​

 

34

​

 

69

​

 

75

Other expenses

​

 

370

​

 

313

​

 

672

​

 

593

Total Noninterest Expenses

​

 

2,894

​

 

2,925

​

 

5,755

​

 

5,870

​

​

​

​

​

​

​

​

​

​

​

​

​

(Loss) income before income taxes

​

 

(393)

​

 

301

​

 

(621)

​

 

822

​

​

​

​

​

​

​

​

​

​

​

​

​

Income tax (benefit) expense

​

 

(189)

​

 

25

​

 

(420)

​

 

112

​

​

​

​

​

​

​

​

​

​

​

​

​

NET (LOSS) INCOME

​

$

(204)

​

$

276

​

$

(201)

​

$

710

​

​

​

​

​

​

​

​

​

​

​

​

​

Basic and diluted net (loss) income per share of common stock

​

$

(0.07)

​

$

0.10

​

$

(0.07)

​

$

0.25

​

See accompanying notes to unaudited consolidated financial statements.

​

- 4 -

GLEN BURNIE BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(dollars in thousands)

(unaudited)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30, 

​

June 30, 

​

    

2024

    

2023

    

2024

    

2023

​

​

​

​

​

​

​

​

​

​

​

​

​

Net (loss) income

​

$

(204)

​

$

276

​

$

(201)

​

$

710

​

​

​

​

​

​

​

​

​

​

​

​

​

Other comprehensive (loss) income:

​

 

  

​

 

  

​

 

  

​

 

  

​

​

​

​

​

​

​

​

​

​

​

​

​

Net unrealized (loss) income on securities available for sale:

​

 

​

​

​

​

​

 

​

​

​

​

Net unrealized (loss) income on securities during the period

​

​

(269)

​

​

(1,372)

​

​

(1,568)

​

​

1,392

Income tax benefit (expense) relating to item above

​

 

73

​

 

378

​

 

431

​

 

(384)

Net effect on other comprehensive (loss) income

​

 

(196)

​

 

(994)

​

 

(1,137)

​

 

1,008

​

​

​

​

​

​

​

​

​

​

​

​

​

Other comprehensive (loss) income

​

​

(196)

​

​

(994)

​

​

(1,137)

​

​

1,008

​

​

​

​

​

​

​

​

​

​

​

​

​

Comprehensive (loss) income

​

$

(400)

​

$

(718)

​

$

(1,338)

​

$

1,718

​

See accompanying notes to unaudited consolidated financial statements.

​

- 5 -

GLEN BURNIE BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY

(dollars in thousands)

(unaudited)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Accumulated

​

​

​

​

​

​

Additional

​

​

​

Other

​

​

​

​

Common

​

Paid-in

​

Retained

​

Comprehensive

​

​

​

​

​

Stock

​

Capital

​

Earnings

​

(Loss) Income

​

Total

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, December 31, 2022

 

$

2,865

​

$

10,862

​

$

23,579

​

$

(21,252)

​

$

16,054

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net income

 

 

—

​

 

—

​

 

710

​

 

—

​

 

710

Cash dividends, $0.20 per share

 

 

—

​

 

—

​

 

(573)

​

 

—

​

 

(573)

Dividends reinvested under

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

dividend reinvestment plan

 

 

8

​

 

52

​

 

—

​

 

—

​

 

60

Other comprehensive income

 

 

—

​

 

—

​

 

—

​

 

1,008

​

 

1,008

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, June 30, 2023

 

$

2,873

​

$

10,914

​

$

23,716

​

$

(20,244)

​

$

17,259

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Accumulated

​

​

​

​

​

​

Additional

​

​

​

Other

​

​

​

​

Common

​

Paid-in

​

Retained

​

Comprehensive

​

​

​

​

​

Stock

​

Capital

​

Earnings

​

Loss

​

Total

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, December 31, 2023

 

$

2,883

​

$

10,964

​

$

23,859

​

$

(18,381)

​

$

19,325

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net loss

 

 

—

​

 

—

​

 

(201)

​

 

—

​

 

(201)

Cash dividends, $0.20 per share

 

 

—

​

 

—

​

 

(577)

​

 

—

​

 

(577)

Dividends reinvested under

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

dividend reinvestment plan

 

 

11

​

 

50

​

 

—

​

 

—

​

 

61

Other comprehensive loss

 

 

—

​

 

—

​

 

—

​

 

(1,137)

​

 

(1,137)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, June 30, 2024

 

$

2,894

​

$

11,014

​

$

23,081

​

$

(19,518)

​

$

17,471

​

​

See accompanying notes to unaudited consolidated financial statements.

​

- 6 -

GLEN BURNIE BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(unaudited)

​

​

​

​

​

​

​

​

​

Six Months Ended June 30, 

​

    

2024

    

2023

Cash flows from operating activities:

 

​

  

 

​

  

Net (loss) income

​

$

(201)

​

$

710

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

​

 

  

​

 

  

Depreciation, amortization, and accretion of premises and equipment

​

 

150

​

 

216

Amortization, and accretion of investment securities available for sale

​

​

81

​

​

71

Provision for credit losses

​

 

694

​

 

85

Increase in cash surrender value of bank owned life insurance

​

 

(87)

​

 

(79)

Decrease in ground rents

​

 

3

​

 

3

(Increase) decrease in accrued interest receivable

​

 

(167)

​

 

20

Net (increase) decrease in other assets

​

 

(238)

​

 

76

Net increase (decrease) in accrued expenses and other liabilities

​

 

24

​

 

(251)

Net cash provided by operating activities

​

 

259

​

 

851

​

​

​

​

​

​

​

Cash flows from investing activities:

​

 

  

​

 

  

Redemptions and maturities of investment securities available for sale

​

 

20,598

​

 

4,381

Net sale (purchase) of Federal Home Loan Bank stock

​

 

971

​

 

(182)

Net (increase) decrease in loans

​

 

(25,420)

​

 

5,864

Purchase of investment securities available for sale

​

 

—

​

 

(9,747)

Purchases of premises and equipment

​

​

(147)

​

​

(275)

​

​

​

​

​

​

​

Net cash (used in) / provided by investing activities

​

 

(3,998)

​

 

41

​

​

​

​

​

​

​

Cash flows from financing activities:

​

 

  

​

 

  

Net increase (decrease) in deposits

​

 

5,800

​

 

(33,723)

Increase in short term borrowings

​

​

—

​

​

15,000

Cash dividends paid

​

 

(577)

​

 

(573)

Common stock dividends reinvested

​

 

61

​

 

60

​

​

​

​

​

​

​

Net cash provided by / (used in) financing activities

​

 

5,284

​

 

(19,236)

​

​

​

​

​

​

​

Net increase (decrease) in cash and cash equivalents

​

 

1,545

​

 

(18,344)

​

​

​

​

​

​

​

Cash and cash equivalents at beginning of period

​

 

15,241

​

 

30,092

​

​

​

​

​

​

​

Cash and cash equivalents at end of period

​

$

16,786

​

$

11,748

​

​

​

​

​

​

​

Supplemental Disclosures of Cash Flow Information:

​

 

  

​

 

  

Interest paid on deposits and borrowings

​

$

1,983

​

$

224

Net income taxes paid

​

​

—

​

​

330

Net (increase) decrease in unrealized depreciation on available for sale securities

​

 

(1,568)

​

 

1,392

​

See accompanying notes to unaudited consolidated financial statements.

​

- 7 -

GLEN BURNIE BANCORP AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

​

NOTE 1 – ORGANIZATIONAL

Nature of Business

Glen Burnie Bancorp (the “Company”) is a bank holding company organized in 1990 under the laws of the State of Maryland. The Company owns all the outstanding shares of capital stock of The Bank of Glen Burnie (the “Bank”), a commercial bank organized in 1949 under the laws of the State of Maryland (the “State”). The Bank provides financial services to individuals and corporate customers located in Anne Arundel County and surrounding areas of Central Maryland and is subject to competition from other financial institutions. The Bank is also subject to the regulations of certain federal and state agencies and undergoes periodic examinations by those regulatory authorities.

​

NOTE 2 – BASIS OF PRESENTATION

In management’s opinion, the accompanying unaudited consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim period reporting, reflect all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the financial position at June 30, 2024 and December 31, 2023, the results of operations for the three- and six-month periods ended June 30, 2024 and 2023, and the statements of cash flows for the six-month periods ended June 30, 2024 and 2023. The operating results for the three- and six-month periods ended June 30, 2024, are not necessarily indicative of the results that may be expected for the full year ended December 31, 2024, or any future interim period. The consolidated balance sheet at December 31, 2023 has been derived from the audited financial statements included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (the “SEC”) on March 22, 2024. The unaudited consolidated financial statements for June 30, 2024 and 2023, the consolidated balance sheet at December 31, 2023, and accompanying notes should be read in conjunction with the Company’s audited consolidated financial statements and the accompanying notes thereto that are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

​

Summary of Significant Accounting Policies

​

The significant accounting policies used in preparation of the Company's consolidated financial statements are disclosed in its Annual Report on Form 10-K for the year ended December 31, 2023. There have not been any significant changes in the Company's significant accounting policies.

​

Allowance for Credit Losses – Loans Receivable

​

The Company applies ASU 2016-13, Financial Instruments - Credit Losses ("ASC 326"), such that the allowance calculation is based on the current expected credit loss (“CECL”) methodology. The Company maintains an allowance for credit losses (“ACL”) for the expected credit losses of the loan portfolio as well as unfunded loan commitments. The amount of ACL is based on ongoing, quarterly assessments by management. The CECL methodology requires an estimate of the credit losses expected over the life of an exposure (or pool of exposures) and replaces the incurred loss methodology’s threshold that delayed the recognition of a credit loss until it was probable that a loss event was incurred.

​

The ACL consists of the allowance for credit losses and the reserve for unfunded commitments. The estimate of expected credit losses under the CECL methodology is based on relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. Historical loss experience is generally the starting point for estimating expected credit losses. We then consider whether the historical loss experience should be adjusted for asset-specific risk characteristics or current conditions at the reporting date that did not exist over the period that historical experience was based on for each loan type. Finally, we consider forecasts about future economic conditions or changes in collateral values that are reasonable and supportable.

​

- 8 -

Portfolio segment is defined as the level at which the Company develops and documents a systematic methodology to determine its ACL. The Company has designated three loan portfolio segments: loans secured by real estate, commercial and industrial loans, and consumer loans. These loan portfolio segments are further disaggregated into classes, which represent loans of similar type, risk characteristics, and methods for monitoring and assessing credit risk. The loans secured by the real estate portfolio segment is disaggregated into five classes: construction and land, farmland, single-family residential, multi-family, and commercial. The commercial and industrial loan portfolio segment is disaggregated into two classes: commercial and industrial, and SBA guaranty. The risk of loss for the commercial and industrial loan portfolio segment is generally most indicated by the credit risk rating assigned to each borrower. Commercial and industrial loan risk ratings are determined by experienced senior credit officers based on specific facts and circumstances and are subject to periodic review by an independent internal team of credit specialists. The consumer loan portfolio segment is disaggregated into two classes: consumer and automobile. The risk of loss for the consumer loan portfolio segment is generally most indicated by delinquency status and general economic factors. Each of the three loan portfolio segments may also be further segmented based on risk characteristics.

​

For most of our loan portfolio classes, the historical loss experience is determined using the Average Charge-Off Method. This method pools loans into groups (“cohorts”) sharing similar risk characteristics and tracks each cohort’s net charge-offs over the lives of the loans. The Average Charge-Off Method uses historical values by period (20-year look-back) to calculate losses and then applies the historical average to future balances over the life of the account. The historical loss rates for each cohort are then averaged to calculate an overall historical loss rate which is applied to the current loan balance to arrive at the quantitative baseline portion of the allowance for credit losses for the respective loan portfolio class. For certain loan portfolio classes, the Company determined there was not sufficient historical loss information to calculate a meaningful historical loss rate using the average charge-off methodology. For any such loan portfolio class, peer group history contributes to the Company’s weighted average loss history. The peer group data is included in the weighted average loss history that is developed for each loan pool.

​

The Company also considers qualitative adjustments to the historical loss rate for each loan portfolio class. The qualitative adjustments for each loan class consider the conditions over the 20-year look-back period from which historical loss experience was based and are split into two components: 1) asset or class specific risk characteristics or current conditions at the reporting date related to portfolio credit quality, remaining payments, volume and nature, credit culture and management, business environment or other management factors; and 2) reasonable and supportable forecasts of future economic conditions and collateral values.

​

The Company performs a quarterly asset quality review which includes a review of forecasted gross charge-offs and recoveries, nonperforming assets, criticized loans, risk rating migration, delinquencies, etc. The asset quality review is performed by management and the results are used to consider a qualitative overlay to the quantitative baseline.

​

When management deems it to be appropriate, the Company establishes a specific reserve for individually evaluated loans that do not share similar risk characteristics with the loans included in each respective loan pool. These individually evaluated loans are removed from their respective pools and typically represent collateral dependent loans but may also include other non-performing loans or restructured loans to borrowers experiencing financial difficulty.

​

Allowance for Credit Losses – Held-to-Maturity Debt Securities

​

For held-to-maturity (“HTM”) debt securities, the Company is required to utilize a CECL methodology to estimate expected credit losses. The Company does not own any HTM debt securities. Therefore, the Company did not record an allowance for credit losses for these types of securities.

​

Allowance for Credit Losses – Available for Sale Debt Securities

​

The impairment model for available for sale (“AFS”) debt securities differs from the CECL methodology applied for HTM debt securities because AFS debt securities are measured at fair value rather than amortized cost. Although ASC 326 replaced the legacy other-than-temporary impairment (“OTTI”) model with a credit loss model, it retained the fundamental nature of the legacy OTTI model. For AFS debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell, the security

- 9 -

before recovery of its amortized cost basis. If either criterion is met, the security’s amortized cost basis is written down to fair value through income. For AFS debt securities where neither of the criteria are met, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the credit rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited to the amount that the fair value is less than the amortized cost basis. Any remaining discount that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Under the new guidance, an entity may no longer consider the length of time fair value has been less than amortized cost. Changes in the allowance for credit losses are recorded as a provision (or release) for credit losses. Losses are charged against the allowance when management believes the collectability of an AFS security is considered below the amortized cost basis of the security. As of December 31, 2023 and June 30, 2024, the Company determined that the unrealized loss positions in AFS securities were not the result of credit losses, and therefore, an allowance for credit losses was not recorded.

​

Off-Balance-Sheet Credit Exposures

​

The only material off-balance-sheet credit exposures are unfunded loan commitments, which had a combined balance of $39.6 million on June 30, 2024. The reserve for unfunded commitments is recognized as a liability (accrued expenses and other liabilities in the consolidated statements of financial condition), with adjustments to the reserve recognized through provision for credit losses in the consolidated statements of income. The reserve for unfunded commitments represents the expected lifetime credit losses on off-balance sheet obligations such as commitments to extend credit and standby letters of credit. However, a liability is not recognized for commitments that are unconditionally cancellable by the Company. The reserve for unfunded commitments is determined by estimating future draws, including the effects of risk mitigation actions, and applying the expected loss rates on those draws. Loss rates are estimated by utilizing the same loss rates calculated for the allowance for credit losses related to the respective loan portfolio class.

​

Principles of Consolidation

​

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, The Bank of Glen Burnie. Consolidation resulted in the elimination of all intercompany accounts and transactions.

​

Cash Flow Presentation

​

In the statements of cash flows, cash and cash equivalents include cash on hand, amounts due from banks, Federal Home Loan Bank of Atlanta (“FHLB Atlanta”) overnight deposits, and federal funds sold. Generally, federal funds are sold for one-day periods.

​

Reclassifications

Certain items in the fiscal year 2023 consolidated financial statements have been reclassified to conform to the fiscal year 2024 classifications. The reclassifications had no effect on previously reported results of operations or retained earnings.

​

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Material estimates that are particularly susceptible to significant change in the near term include the determination of the ACL; the fair value of financial instruments, such as loans and investment securities; benefit plan obligations and expenses; and the valuation of deferred tax assets and liabilities.

​

- 10 -

NOTE 3 – EARNINGS PER SHARE

Basic earnings per common share (“EPS”) is computed by dividing net income available to common shareholders by the weighted average common shares outstanding during the period. Diluted EPS is computed by dividing net income available to common shareholders by the weighted average common shares outstanding, plus the effect of common stock equivalents (for example, stock options computed using the treasury stock method).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30, 

​

June 30, 

​

    

2024

    

2023

    

2024

    

2023

Basic and diluted earnings per share:

​

​

​

​

​

​

​

​

​

​

​

​

Net (loss) income

​

$

(204,480)

​

$

275,360

​

$

(201,322)

​

$

710,381

Weighted average common shares outstanding

​

 

2,891,203

​

 

2,871,026

​

 

2,888,378

​

 

2,873,129

Basic and dilutive net income per share

​

$

(0.07)

​

$

0.10

​

$

(0.07)

​

$

0.25

​

Diluted earnings per share calculations were not required for the three- and six-month periods ended June 30, 2024 and 2023, as there were no stock options outstanding.

​

​

​

NOTE 4 – INVESTMENT SECURITIES

​

Investment securities are accounted for according to their purpose and holding period. Trading securities are those that are bought and held principally for the purpose of selling them in the near term. The Company held no trading securities at June 30, 2024 or December 31, 2023. Available for sale investment securities, comprised of debt and mortgage-backed securities, are those that may be sold before maturity due to changes in the Company's interest rate risk profile or funding needs, and are reported at fair value with unrealized gains and losses, net of taxes, reported as a component of other comprehensive income. Held-to-maturity investment securities are those that management has the positive intent and ability to hold to maturity and are reported at amortized cost. The Company had no held-to-maturity securities at June 30, 2024 or December 31, 2023.

​

Realized gains and losses are recorded in noninterest income and are determined on a trade date basis using the specific identification method. Interest and dividends on investment securities are recognized in interest income on an accrual basis. Premiums and discounts are amortized or accreted into interest income using the interest method over the expected lives of the individual securities.

​

The following table summarizes the amortized cost and estimated fair value of the Company’s investment securities portfolio at June 30, 2024 and December 31, 2023:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

At June 30, 2024

​

​

​

​

    

Gross

    

Gross

    

​

​

​

​

Amortized

​

Unrealized

​

Unrealized

​

Fair

(dollars in thousands)

​

Cost

​

Gains

​

Losses

​

Value

​

​

​

​

​

​

​

​

​

​

​

​

​

Collateralized mortgage obligations

​

$

15,163

​

$

23

​

$

(2,456)

​

$

12,730

Agency mortgage-backed securities

​

​

48,124

​

​

—

​

​

(6,244)

​

​

41,880

Municipal securities

​

​

42,939

​

​

1

​

​

(10,089)

​

​

32,851

U.S. Government agency securities

​

​

36,383

​

​

—

​

​

(7,964)

​

​

28,419

Corporate Securities

​

​

1,500

​

​

—

​

​

(200)

​

​

1,300

​

​

​

​

​

​

​

​

​

​

​

​

​

Total securities available for sale

​

$

144,109

​

$

24

​

$

(26,953)

​

$

117,180

​

- 11 -

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

At December 31, 2023

​

​

​

​

    

Gross

    

Gross

    

​

​

​

​

Amortized

​

Unrealized

​

Unrealized

​

Fair

(dollars in thousands)

​

Cost

​

Gains

​

Losses

​

Value

​

​

​

​

​

​

​

​

​

​

​

​

​

Collateralized mortgage obligations

​

$

15,962

​

$

8

​

$

(2,309)

​

$

13,661

Agency mortgage-backed securities

​

​

51,930

​

 

—

​

 

(5,816)

​

 

46,114

Municipal securities

​

​

42,990

​

​

4

​

​

(9,265)

​

​

33,729

U.S. Government agency securities

​

​

45,406

​

​

—

​

​

(7,712)

​

​

37,694

Corporate Securities

​

​

1,500

​

​

—

​

​

(216)

​