Glen Burnie Bancorp(GLBZ) - 2024 Q3 - Quarterly Report

Financial Performance - The Company reported a net loss of $72,000 for the nine-month period ended September 30, 2024, compared to net income of$1.3 million for the same period in 2023, primarily due to a $460,000 decrease in interest and dividends on securities and a$1.4 million increase in interest expense on deposits [108]. - Return on average assets for the nine-month period ended September 30, 2024, was (0.03)%, compared to 0.46% for the same period in 2023 [110]. - Return on average equity for the nine-month period ended September 30, 2024, was (0.52)%, compared to 9.34% for the same period in 2023 [110]. - Net interest income for the three-month period ended September 30, 2024, was $2.8 million, a decrease of$131,000 or 4.44% compared to the same period in 2023 [115]. - Net interest income for the nine-month period ended September 30, 2024, totaled $8.2 million, a decrease of$1.1 million from the same period in 2023 [116]. - Comprehensive income for the third quarter of 2024 totaled $3.9 million, compared to a comprehensive loss of$3.8 million for the same period in 2023 [133]. Asset and Deposit Growth - Total assets increased to $368.4 million on September 30, 2024, an increase of$16.5 million from December 31, 2023, with cash and cash equivalents rising by $7.2 million or 47.38$14.2 million, or 4.73%, during the first nine months of 2024 [109]. - Cash and cash equivalents rose to $22.5 million, reflecting a$7.2 million increase or 47.38% from $15.2 million at December 31, 2023 [134]. - Total deposits increased to$314.3 million, a rise of $14.2 million or 4.73$300.1 million on December 31, 2023 [138]. Loan Portfolio and Credit Losses - The Bank's loan portfolio increased by $30.7 million or 17.39$19.5 million or 13.96% [109]. - The Company's allowance for credit losses was $2.75 million as of September 30, 2024, an increase of$591,000 or 27.40% from $2.16 million at December 31, 2023 [109]. - The allowance for credit loss on loans was$2.75 million on September 30, 2024, representing 1.33% of total loans, compared to $2.09 million or 1.20$78,000 for the three-month period ended September 30, 2024, compared to a release of $92,000 for the same period in 2023 [129]. Interest Income and Expense - Total interest income for the third quarter of 2024 increased by$609,000, or 18.18%, from $3.4 million in 2023 to$4.0 million in 2024 [117]. - Total interest income for the nine-month period ended September 30, 2024, increased by $1.4 million, or 13.68$9.9 million in 2023 to $11.3 million [118]. - Interest expense for the third quarter of 2024 increased by$740,000, or 185.93%, from $398,000 in 2023 to$1.1 million [119]. - Net interest margin for the three-month period ended September 30, 2024, was 3.06%, a decrease of 0.15% from 3.21% in the same period of 2023 [120]. Capital Ratios and Equity - The Bank's tier 1 risk-based capital ratio was 15.47% at September 30, 2024, compared to 17.37% at December 31, 2023 [112]. - The Bank's Tier 1 leverage ratio was 10.11% as of September 30, 2024, exceeding the minimum requirement of 4.00% [172]. - The Bank's common equity tier 1 capital ratio was 15.47% as of September 30, 2024, well above the minimum requirement of 4.50% [173]. - The company's stockholders' equity increased by $1.8 million, or 9.50%, during the nine-month period ended September 30, 2024 [165]. Interest Rate Risk Management - The Bank's interest rate risk management policy includes limits on risk, with measures of net interest income at risk remaining within prescribed policy limits [149]. - As of September 30, 2024, the simulation analysis indicated the Bank is in an asset sensitive position in falling rate scenarios and slightly liability sensitive in rising rate scenarios [152]. - Estimated changes in net interest income showed a 2% increase in a +100 bp rate scenario, compared to a 1% increase in the previous year [155]. - The economic value of equity decreased in a rising interest rate environment due to the longer duration of assets compared to liabilities [159]. Changes in Accounting Methodology - The allowance for credit losses methodology changed significantly with the adoption of ASC 326, moving from an "incurred loss" approach to an "expected loss" approach [175]. - The impact of utilizing the CECL methodology for calculating the ACL will be significantly influenced by the loan portfolio's composition, characteristics, and quality, as well as prevailing economic conditions [177]. - Material changes in relevant factors may lead to greater volatility in the allowance for credit losses and reported earnings [177].