Safe and Sound

The Bank of Glen Burnie

Glen Burnie, MD
3
Star Rating
The Bank of Glen Burnie is a Glen Burnie, MD-based, FDIC-insured bank dating back to 1949. The bank holds equity of $33.8 million on assets of $389.5 million, according to December 31, 2017, regulatory filings.

Thanks to the work of 99 full-time employees in 8 offices in MD, the bank holds loans and leases worth $269.0 million, including real estate loans of $176.2 million. U.S. bank customers currently have $334.5 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, The Bank of Glen Burnie exhibited a generally satisfactory condition, earning 3 out of 5 stars for safety and soundness. Here's an analysis of how the bank did on the three major criteria Bankrate used to evaluate U.S. banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a buffer against losses and as protection for depositors when a bank is experiencing economic trouble. Therefore, when it comes to measuring an a bank's financial fortitude, capital is crucial. From a safety and soundness perspective, the more capital, the better.

The Bank of Glen Burnie received a score of 8 out of a possible 30 points on our test to measure the adequacy of a bank's capital, less than the national average of 13.13.

A bank's Tier 1 capital ratio is a commonly used measure of this buffer. The Bank of Glen Burnie's Tier 1 capital ratio was 12.83 percent, higher than the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to stand up to financial difficulties.

Overall, The Bank of Glen Burnie held equity amounting to 8.68 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to estimate how the bank's capitalization and allocated loan loss reserves could be affected by troubled assets, such as past-due loans.

A bank with lots of these types of assets could eventually have to use capital to cover losses, reducing its equity buffer. It also means that there are likely to be many assets that are in non-accrual status and thus aren't earning interest for the bank, resulting in reduced earnings and potentially more risk of a future failure.

The Bank of Glen Burnie fell below the national average of 37.49 on Bankrate's asset quality test, racking up 36 out of a possible 40 points .

A helpful indicator of asset quality is the percentage of problem assets a bank holds compared to its total assets. As of December 31, 2017, 1.23 percent of The Bank of Glen Burnie's loans were noncurrent, meaning they were more than 90 days past due or were in non-accrual status. That's above the national average of 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with troubled assets . How large that reserve is can be a widely used indicator when evaluating a bank's ability to manage troubled assets, especially when compared to the total amount of problem loans. Unfortunately, the FDIC did not provide information on The Bank of Glen Burnie's loan loss allowance in its most recent filings.

Earnings score

A bank's ability to earn money has an effect on its long-term survivability. Earnings may be retained by the bank, expanding its capital buffer, or be used to address problematic loans, potentially making the bank better able to withstand financial trouble. Losses, on the other hand, take away from a bank's ability to do those things.

The Bank of Glen Burnie underperformed the average on Bankrate's earnings test, achieving a score of 6 out of a possible 30.

One widely used measure of a bank's earnings is return on equity, or net income (profit, essentially) divided by total equity. The Bank of Glen Burnie's most recent annualized quarterly return on equity was 2.94 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $996,000 on total equity of $33.8 million. The bank reported an annualized return on average assets, or ROA, of 0.25 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.