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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Amendment No. 1)

​

☒

Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2024 or

☐

Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from     to    

Commission file number: 0-24047

GLEN BURNIE BANCORP

(Exact name of registrant as specified in its charter)

​

​

​

​

MARYLAND

    

52-1782444

(State or other jurisdiction

​

(I.R.S. Employer

of incorporation or organization)

​

Identification No.)

​

​

​

101 Crain Highway, S.E., Glen Burnie, Maryland

​

21061

(Address of principal executive offices)

​

(Zip Code)

Registrant’s telephone number, including area code

​

(410) 766-3300

​

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

​

​

​

Title of Class

    

Name of Each Exchange on Which Registered

None

​

None

​

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

​

​

​

​

Title of Class

​

Common Stock, $1.00 par value

Common Stock Purchase Rights

​

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ◻ No ⌧

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ◻ No ⌧

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 ◻

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 ◻

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ⌧

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

​

​

​

​

​

​

​

​

Large Accelerated Filer◻

Accelerated Filer◻

Non-Accelerated Filer⌧

Smaller Reporting Company⌧ Emerging Growth Company ☐

​

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. ◻

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes‐Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

​

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

​

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

​

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

The aggregate market value of the registrant’s outstanding common equity held by non-affiliates was $9,843,992, computed by reference to the closing sales price of such equity as of the last business day of the registrant’s most recently completed second fiscal quarter (June 30, 2024). For the purposes of this calculation, directors, executive officers, and controlling investors are considered affiliates

​

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

​

​

​

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

​

The number of shares of common stock outstanding as of March 19, 2025, was 2,900,681.

Documents Incorporated By Reference

Portions of the registrant’s definitive proxy statement for the 2024 Annual Meeting of Stockholders to be filed with the SEC pursuant to Regulation 14A are incorporated by reference into Part III of this Annual Report on Form 10-K.

​

​

​

Table of Contents

​

​

The Registrant hereby amends Item 15(a)(1) of its Annual Report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the Commission on April 8, 2025.  The purpose of the amendment is to add the signature of the Registrant’s Independent Registered Public Accounting Firm on its Report included on page F-4 of the Form 10-K.

​

PART IV

​

ITEM 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

​

(a)  1. Financial Statements.

​

​

​

​

Page

Report of Independent Registered Public Accounting Firm (PCAOB 1195)

F-3

Consolidated Balance Sheets as of December 31, 2024 and 2023

F-5

Consolidated Statements of Income for the Years Ended December 31, 2024 and 2023

F-6

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2024 and 2023

F-7

Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 2024 and 2023

F-8

Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and 2023

F-9

Notes to Consolidated Financial Statements

F-10

​

(a)  3. Exhibits required to be filed by Item 601 of Regulation S-K.

​

​

​

​

Exhibit No.

    

Description

31.1

​

Rule 15d-14(a) Certification by the Principal Executive Officer (filed herewith)

31.2

​

Rule 15d-14(a) Certification by the Principal Accounting Officer (filed herewith)

32.1

​

Certification by the Principal Executive Officer and Principal Accounting Officer of the periodic financial reports, required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)

​

​

SIGNATURES

​

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

​

​

​

GLEN BURNIE BANCORP

​

​

​

​

​

​

April 28, 2025

By:

/s/ Mark C. Hanna

​

​

Mark C. Hanna

​

​

President and Chief Executive Officer

​

​

​

​

​

​

Table of Contents

Glen Burnie Bancorp and Subsidiary

Consolidated Financial Statements

December 31, 2024

​

​

​

Table of Contents

CONTENTS

​

Page(s)

​

​

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

F - 3

​

​

FINANCIAL STATEMENTS

​

Consolidated Balance Sheets

F - 5

Consolidated Statements of (Loss) Income

F - 6

Consolidated Statements of Comprehensive (Loss) Income (Loss)

F - 7

Consolidated Statements of Changes in Stockholders’ Equity

F - 8

Consolidated Statements of Cash Flows

F - 9

Notes to Consolidated Financial Statements

F - 10 – F - 46

​

​

​

​

F - 2

Table of Contents

​

Graphic

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Glen Burnie Bancorp and Subsidiaries

Glen Burnie, Maryland

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Glen Burnie Bancorp and Subsidiaries (the “Company”) as of December 31, 2024 and 2023 and the related consolidated statements of (loss) income, comprehensive (loss) income, changes in stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

​

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

​

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

​

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

​

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating these critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

​

F - 3

Table of Contents

Allowance for Credit Losses on Loans

As described in Notes 1 and 4 to the consolidated financial statements, the Company’s loan portfolio totaled $205.2 million and has recorded an allowance for credit losses (“ACL”) in the amount of $2.8 million as of December 31, 2024. The Company estimates the allowance for credit losses at a level that is appropriate to cover estimated credit losses on individually evaluated loans, as well as the estimated credit losses inherent in the remainder of the loan portfolio. The determination of the ACL requires management to exercise significant judgment and consider numerous subjective factors, including determining qualitative factors utilized to adjust historical loss rates, risk grading loans, identifying loan impairments, among others. Different assumptions and conditions could result in a materially different amount for the ACL.

​

We identified the valuation of the ACL as a critical audit matter. Auditing the ACL involves a high degree of subjectivity in evaluating management's estimates, such as evaluating management’s assessment of economic conditions and other environmental factors used to adjust historical loss rates, evaluating the adequacy of specific allowances associated with impaired loans and assessing the appropriateness of loan grades.

​

Our audit procedures related to the estimated ACL included the following procedures, among others.

​

●Evaluating the design effectiveness of controls over the Company's ACL including data completeness and accuracy, classifications of loans by loan segment, historical loss data, the establishment of qualitative and forecast adjustments, the calculation of a loss rate, grading and risk classification of loans and establishment of reserves on individually evaluated loans and management's review controls over the ACL balance as a whole;

​

●Testing of completeness and accuracy of the information utilized in the calculation of the ACL;

​

●Testing the computational accuracy of the calculations utilized in the ACL model;

​

●Evaluating the qualitative adjustment to the historical loss rates, including assessing the basis for the adjustments and the reasonableness of the significant assumptions used;

​

●Testing the internal loan review functions and evaluating the assigned loan grades for appropriateness and reasonableness;

​

●Assessing the reasonableness of specific reserves on individually assessed impaired loans;

​

●Evaluating the overall reasonableness of qualitative factor and forecast adjustments, including assessing the basis and reasonableness for the adjustments;

​

●Reviewing subsequent events and considering whether they support or contradict the Company’s ACL estimate;

​

●Evaluating overall reasonableness of estimated reserve by considering and comparing past performance of the Company’s loan portfolio, and trends in credit quality of the loan portfolio.

​

We have served as the Company’s auditor since 2022 .

/s/ UHY LLP

Salisbury, Maryland

April 8, 2025

​

​

F - 4

Table of Contents

GLEN BURNIE BANCORP AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31,

​

​

2024

    

2023

​

​

​

​

​

​

​

ASSETS

​

​

​

​

​

​

Cash and due from banks

​

$

2,012

​

$

1,940

Interest-bearing deposits in other financial institutions

​

 

22,452

​

 

13,301

Cash and Cash Equivalents

​

 

24,464

​

 

15,241

Investment securities available for sale, at fair value

​

 

107,949

​

 

139,427

Restricted equity securities, at cost

​

​

1,671

​

​

1,217

Loans, net of deferred fees and costs

​

 

205,219

​

 

176,307

Less: Allowance for credit losses

​

​

(2,839)

​

​

(2,157)

Loans, net

​

​

202,380

​

​

174,150

Premises and equipment, net

​

 

2,678

​

 

3,046

Bank owned life insurance

​

 

8,834

​

 

8,657

Deferred tax assets, net

​

​

8,548

​

​

7,897

Accrued interest receivable

​

 

1,345

​

 

1,192

Accrued taxes receivable

​

 

148

​

 

121

Prepaid expenses

​

 

471

​

 

475

Other assets

​

 

468

​

 

390

Total Assets

​

$

358,956

​

$

351,813

​

​

​

​

​

​

​

LIABILITIES

​

​

​

​

​

​

Noninterest-bearing deposits

​

$

100,747

​

$

116,922

Interest-bearing deposits

​

 

208,442

​

 

183,145

Total Deposits

​

 

309,189

​

 

300,067

Short-term borrowings

​

 

30,000

​

 

30,000

Defined pension liability

​

​

330

​

​

324

Accrued expenses and other liabilities

​

 

1,620

​

 

2,097

Total Liabilities

​

​

341,139

​

​

332,488

​

​

​

​

​

​

​

STOCKHOLDERS' EQUITY

​

​

​

​

​

​

Common stock, par value $1, authorized 15,000,000 shares, issued and outstanding 2,900,681 and 2,882,627 shares as of December 31, 2024 and December 31, 2023, respectively.

​

 

2,901

​

 

2,883

Additional paid-in capital

​

 

11,037

​

 

10,964

Retained earnings

​

 

22,882

​

 

23,859

Accumulated other comprehensive loss

​

 

(19,003)

​

​

(18,381)

Total Stockholders' Equity

​

​

17,817

​

​

19,325

​

​

​

​

​

​

​

Total Liabilities and Stockholders' Equity

​

$

358,956

​

$

351,813

​

​

The Notes to Consolidated Financial Statements are an integral part of these consolidated financial statements.

​

F - 5

Table of Contents

GLEN BURNIE BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF (LOSS) INCOME

(dollars in thousands, except per share data)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended December 31,

​

​

2024

​

2023

​

​

​

​

​

​

​

INTEREST INCOME

 

​

  

 

​

  

Interest and fees on loans

​

$

10,498

​

$

8,559

Interest and dividends on securities

​

​

3,379

​

​

4,147

Interest on deposits with banks and federal funds sold

​

 

1,335

​

 

631

Total Interest Income

​

 

15,212

​

 

13,337

​

​

​

​

​

​

​

INTEREST EXPENSE

​

 

  

​

 

  

Interest on deposits

​

 

2,533

​

 

513

Interest on short-term borrowings

​

 

1,738

​

 

689

Total Interest Expense

​

 

4,271

​

 

1,202

​

​

​

​

​

​

​

Net Interest Income

​

 

10,941

​

 

12,135

​

​

​

​

​

​

​

Provision of credit loss allowance

​

 

844

​

 

96

​

​

​

​

​

​

​

Net interest income after provision for credit losses

​

 

10,097

​

 

12,039

​

​

​

​

​

​

​

NONINTEREST INCOME

​

 

  

​

 

  

Service charges on deposit accounts

​

 

150

​

 

159

Other fees and commissions

​

 

829

​

 

777

Income on life insurance

​

 

178

​

 

164

Total Noninterest Income

​

 

1,157

​

 

1,100

​

​

​

​

​

​

​

NONINTEREST EXPENSE

​

 

  

​

 

  

Salary and employee benefits

​

 

6,580

​

 

6,710

Occupancy and equipment expenses

​

​

1,325

​

​

1,294

Legal, accounting and other professional fees

​

​

1,115

​

​

993

Data processing and item processing services

​

​

1,016

​

​

1,005

FDIC insurance costs

​

​

161

​

​

163

Advertising and marketing related expenses

​

​

117

​

​

97

Loan collection costs

​

​

25

​

​

22

Telephone costs

​

 

154

​

 

151

Other expenses

​

 

1,398

​

 

1,203

Total Noninterest Expenses

​

 

11,891

​

 

11,638

​

​

​

​

​

​

​

(Loss) income before income taxes

​

 

(637)

​

 

1,501

​

​

​

​

​

​

​

Income tax (benefit) expense

​

 

(525)

​

 

72

​

​

​

​

​

​

​

NET (LOSS) INCOME

​

$

(112)

​

$

1,429

​

​

​

​

​

​

​

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

​

$

(0.04)

​

$

0.50

​

The Notes to Consolidated Financial Statements are an integral part of these consolidated financial statements.

​

F - 6

Table of Contents

GLEN BURNIE BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) INCOME

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

Year Ended

​

​

December 31, 

​

​

2024

    

2023

​

​

​

​

​

​

​

Net (loss) income

​

$

(112)

​

$

1,429

​

​

​

​

​

​

​

Other comprehensive (loss) income:

​

 

  

​

 

  

​

​

​

​

​

​

​

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

​

 

​

​

​

​

Net unrealized (loss) gain on securities during the period

​

​

(857)

​

​

3,961

Income tax benefit (expense) relating to item above

​

 

235

​

 

(1,090)

Reclassification adjustment for gain on sales of securities included in net income

​

 

—

​

 

—

Net effect on other comprehensive (loss) income

​

 

(622)

​

 

2,871

​

​

​

​

​

​

​

Other comprehensive (loss) income

​

​

(622)

​

​

2,871

​

​

​

​

​

​

​

Comprehensive (loss) income

​

$

(734)

​

$

4,300

​

The Notes to Consolidated Financial Statements are an integral part of these consolidated financial statements.

​

F - 7

Table of Contents

GLEN BURNIE BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

​

​

​

​

​

​

Accumulated

​

​

​

​

​

​

​

​

​

​

Other

​

​

​

​

​

​

Additional

​

​

​

Comprehensive

​

​

​

​

Common

​

Paid-in

​

Retained

​

(Loss)

​

​

​

​

Stock

​

Capital

​

Earnings

​

Income

​

Total

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balances, December 31, 2022

 

$

2,865

​

$

10,862

​

$

23,579

​

$

(21,252)

​

$

16,054

Net income

 

 

—

​

 

—

​

 

1,429

​

 

—

​

 

1,429

Cash dividends, $0.40 per share

 

 

—

​

 

—

​

 

(1,149)

​

 

—

​

 

(1,149)

Dividends reinvested under dividend reinvestment plan

 

 

18

​

 

102

​

 

—

​

 

—

​

 

120

Other comprehensive income

 

 

—

​

 

—

​

 

—

​

 

2,871

​

 

2,871

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, December 31, 2023

 

​

2,883

​

​

10,964

​

​

23,859

​

​

(18,381)

​

​

19,325

Net loss

 

 

—

​

 

—

​

 

(112)

​

 

—

​

 

(112)

Cash dividends, $0.20 per share

 

 

—

​

 

—

​

 

(865)

​

 

—

​

 

(865)

Dividends reinvested under dividend reinvestment plan

 

 

18

​

 

73

​

 

—

​

 

—

​

 

91

Other comprehensive loss

 

 

—

​

 

—

​

 

—

​

 

(622)

​

 

(622)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balance, December 31, 2024

 

$

2,901

​

$

11,037

​

$

22,882

​

$

(19,003)

​

$

17,817

​

The Notes to Consolidated Financial Statements are an integral part of these consolidated financial statements.

​

F - 8

Table of Contents

GLEN BURNIE BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in the thousands)

​

​

​

​

​

​

​

​

​

    

Year Ended

​

​

December 31, 

​

​

2024

    

2023

​

​

​

​

​

​

​

Cash flows from operating activities:

 

​

  

 

​

  

Net (loss) income

​

$

(112)

​

$

1,429

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

​

 

  

​

 

  

Depreciation and amortization of premises and equipment

​

 

238

​

 

227

Net amortization and (accretion) on AFS investments

​

​

166

​

​

(108)

Provision of credit loss allowance

​

 

844

​

 

96

Deferred income taxes, net

​

 

(415)

​

 

(84)

Increase in cash surrender value of bank owned life insurance

​

 

(177)

​

 

(164)

Decrease in ground rents

​

 

8

​

 

1

Increase in accrued interest receivable

​

 

(154)

​

 

(33)

Net increase in other assets

​

 

(60)

​

 

(106)

Net (decrease) increase in accrued expenses and other liabilities

​

 

(310)

​

 

141

​

​

​

​

​

​

​

Net cash provided by operating activities

​

 

28

​

 

1,399

​

​

​

​

​

​

​

Cash flows from investing activities:

​

 

  

​

 

  

Redemptions, sales and maturities of investment securities available for sale

​

 

30,455

​

 

18,523

Purchases of investment securities available for sale

​

 

—

​

 

(9,747)

Purchase of Federal Home Loan Bank stock, net

​

 

(454)

​

 

(996)

Net (increase) decrease in loans

​

 

(29,073)

​

 

10,032

Purchases of premises and equipment

​

​

(81)

​

​

(152)

​

​

​

​

​

​

​

Net cash provided by investing activities

​

 

847

​

 

17,660

​

​

​

​

​

​

​

Cash flows from financing activities:

​

 

  

​

 

  

Net increase (decrease) in deposits

​

 

9,122

​

 

(62,881)

Net increase in short term borrowings

​

​

—

​

 

30,000

Cash dividends paid

​

 

(865)

​

 

(1,149)

Common stock dividends reinvested

​

 

91

​

 

120

​

​

​

​

​

​

​

Net cash provided (used) by financing activities

​

 

8,348

​

 

(33,910)

​

​

​

​

​

​

​

Net increase (decrease) in cash and cash equivalents

​

 

9,223

​

 

(14,851)

​

​

​

​

​

​

​

Cash and cash equivalents at beginning of year

​

 

15,241

​

 

30,092

​

​

​

​

​

​

​

Cash and cash equivalents at end of year

​

$

24,464

​

$

15,241

​

​

​

​

​

​

​

Supplemental Disclosures of Cash Flow Information:

​

 

  

​

 

  

Interest paid on deposits and borrowings

​

$

4,202

​

$

1,127

Income taxes (refunded) paid

​

​

(163)

​

​

436

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

​

 

(857)

​

 

3,961

​

​

​

​

​

​

​

​

The Notes to Consolidated Financial Statements are an integral part of these consolidated financial statements.

​

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies

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 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. The accounting and financial reporting policies of the Bank conform, in all material respects, to accounting principles generally accepted in the United States (“U.S. GAAP”) and to general practices within the banking industry.

Basis of Presentation

The consolidated financial statements include the accounts of Glen Burnie Bancorp, The Bank of Glen Burnie and GBB Properties, Inc., a company engaged in the acquisition and disposition of other real estate. All significant intercompany transactions are eliminated in consolidation and certain reclassifications are made when necessary in order to conform the previous year’s financial statements to the current year’s presentation. In preparing the consolidated financial statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and revenues and expenses during the reporting periods and related disclosures. These estimates that require application of management's subjective or complex judgments often result in the need to make estimates about the effect of matters that are inherently uncertain and may change in future periods. Management has made significant estimates in several areas, including the valuation of certain loans held for investment (Note 4, Loans and Allowance for Credit Losses); allowance for credit losses (Note 4, Loans and Allowance for Credit Losses); valuation of investment securities (Note 3, Investment Securities); the fair value of financial instruments (Note 16, Fair Value of Financial Instruments); and the valuation of deferred tax assets (Note 9, Income Taxes). Certain amounts in the financial statements from prior periods have been reclassified to conform to the current financial statement presentation. The Parent Only financial statements (see Note 18, Parent Company Financial Information) of the Company account for the subsidiary using the equity method of accounting.

Investment Securities

We classify investment securities as trading, held to maturity ("HTM"), or available for sale ("AFS") at the date of acquisition. Purchases and sales of securities are generally recorded on a trade-date basis.

Investment securities that we might not hold until maturity are classified as AFS and are reported at fair value in the statement of financial condition. Fair value measurement is based upon quoted market prices in active markets, if available. If quoted prices in active markets are not available, fair value is measured using pricing models or other model-based valuation techniques such as the present value of future cash flows, which consider prepayment assumptions and other factors such as credit losses and market liquidity. Unrealized gains and losses are excluded from earnings and reported, net of tax, in other comprehensive income (“OCI”). Purchase premiums and discounts are recognized in interest income using the effective interest method over the life of the securities. Purchase premiums or discounts related to mortgage-backed securities are amortized or accreted using projected prepayment speeds. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

Debt securities are classified as HTM if the Company has both the intent and ability to hold those securities to maturity regardless of changes in market conditions, liquidity needs or changes in general economic conditions. These securities are carried at cost adjusted for amortization of purchase premiums and accretion of purchase discounts.

Transfers of securities from available for sale to held to maturity are accounted for at fair value as of the date of the transfer. The difference between the fair value and the par value at the date of transfer is considered a premium or

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discount and is accounted for accordingly. Any unrealized gain or loss at the date of the transfer is reported in OCI, and is amortized over the remaining life of the security as an adjustment of yield in a manner consistent with the amortization of any premium or discount, and will offset or mitigate the effect on interest income of the amortization of the premium or discount for that held to maturity security.

Impairment may result from credit deterioration of the issuer or collateral underlying the security. In performing an assessment of recoverability, all relevant information is considered, including the length of time and extent to which fair value has been less than the amortized cost basis, the cause of the price decline, credit performance of the issuer and underlying collateral, and recoveries or further declines in fair value subsequent to the balance sheet date.

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 before recovery of its amortized cost basis. If either criteria 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 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 for (or release of) 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, 2024 and 2023, 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.

Federal Home Loan Bank Stock

As a borrower from the Federal Home Loan Bank of Atlanta ("FHLB"), the Bank is required to purchase an amount of FHLB stock based on our outstanding borrowings with the FHLB. This stock is used as collateral to secure the borrowings from the FHLB and is accounted for as a cost-method investment. FHLB stock is an equity interest that does not necessarily have a readily determinable fair value for purposes of the ASC Topic 320, Accounting for Certain Investments in Debt and Equity Securities, because its ownership is restricted and lacks a market. FHLB stock can be sold back only at its par value of $100 per share and only to the FHLB or another member institution.

Loans Held for Investment

Loans held for investment are reported at the principal amount outstanding, net of cumulative charge-offs, interest applied to principal (for loans accounted for using the cost recovery method), unamortized net deferred loan origination fees and costs and unamortized premiums or discounts on purchased loans. Interest on loans is accrued and recognized as interest income at the contractual rate of interest. When a loan is designated as held for investment, the intent is to hold these loans for the foreseeable future or until maturity or pay off.

From time to time, the Company will originate loans to facilitate the sale of other real estate owned (OREO). Such loans are accounted for using the installment method and any gain on sale is deferred. The Bank financed no sales of OREO for 2024 or 2023.

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Loan Fees and Costs

Loan origination fees, commitment fees, direct loan origination costs and purchase premiums and discounts on loans are deferred and recognized as an adjustment of yield, to be amortized to interest income over the contractual term of the loan.

Nonaccrual Loans

Loans are placed on nonaccrual status when the full and timely collection of principal and interest is doubtful, generally when the loan becomes 90 days or more past due for principal or interest payment or if part of the principal balance has been charged off. When a loan is placed on nonaccrual status all interest previously accrued but not collected is reversed against current period interest income.

All payments received on nonaccrual loans are accounted for using the cost recovery method. Under the cost recovery method, all cash collected is applied to first reduce the principal balance. A loan may be returned to accrual status if all delinquent principal and interest payments are brought current and the collectability of the remaining principal and interest payments in accordance with the loan agreement is reasonably assured. Loans that are well-secured and in the process of collection are maintained on accrual status, even if they are 90 days or more past due.

Impaired Loans

A loan is considered impaired when it is probable that all contractual principal and interest payments due will not be collected in accordance with the terms of the loan agreement. Factors considered by management in determining whether a loan is impaired include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. The carrying value of impaired loans is based on the present value of the loan’s expected future cash flows or, alternatively, the observable market price of the loan or the fair value of the collateral.

Modifications with Borrowers Experiencing Financial Difficulty

Management evaluates loan restructurings according to the accounting guidance for loan modifications. We may, for economic or legal reasons, grant a concession to a borrower experiencing financial difficulty that we would not otherwise consider. Management strives to identify borrowers in financial difficulty early and works with them to modify to more affordable terms before their loan reaches nonaccrual status. These modified terms may include rate reductions, principal forgiveness, payment forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of the collateral. A restructuring that results in only an insignificant delay in payment is not considered a concession. A delay may be considered insignificant if the payments subject to the delay are insignificant relative to the unpaid principal or collateral value and the contractual amount due, or the delay in timing of the restructured payment period is insignificant relative to the frequency of payments, the debt's original contractual maturity or original expected duration.

Loan modifications with borrowers experiencing financial difficulty are designated as impaired because interest and principal payments will not be received in accordance with the original contract terms. Loans that are performing and on accrual status as of the date of the modification remain on accrual status. Loans that are nonperforming as of the date of modification generally remain as nonaccrual until the prospect of future payments in accordance with the modified loan agreement is reasonably assured, generally demonstrated when the borrower maintains compliance with the restructured terms for a predetermined period, normally at least six months. Loans with temporary below-market concessions remain designated as a loan to borrower experiencing financial difficulty and impaired regardless of the accrual or performance status until the loan is paid off. However, if the loan has been modified in a subsequent restructure with market terms and the borrower is not currently experiencing financial difficulty, then the loan may be de-designated as being made to a borrower experiencing financial difficulty.

Allowance for Credit Losses – Loans Receivable

Effective January 1, 2021, the Company applied ASU 2016-13, Financial Instruments - Credit Losses ("ASC 326"), such that the allowance calculation is based on the CECL methodology. Prior to January 1, 2021, the calculation

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was based on incurred loss methodology. See Note 4, Loans and Allowance for Credit Losses for details. 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 a loss event was incurred.

The ACL consists of the allowance for credit losses - loans 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.

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 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 forecast 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.

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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 loan modifications to borrowers experiencing financial difficulty.

Impaired Loans

The specific credit allocations are based on regular analysis of all loans over a fixed-dollar amount where the internal credit rating is at or below a predetermined classification. When a loan is identified as impaired, impairment is measured based on net realizable value, and the recorded investment balance of the loan. For impaired loans, we recognize impairment if we determine that the net realizable value of the impaired loan is less than the recorded investment of the loan (net of previous charge-offs and deferred loan fees and costs), except when the sole remaining source of collection is the underlying collateral. In these cases, impairment is measured as the difference between the recorded investment balance of the loan and the fair value of the collateral. The fair value of the collateral is adjusted for the estimated cost to sell if repayment or satisfaction of a loan is dependent on the sale (rather than only on the operation) of the collateral.

Once the impairment amount is determined, an asset-specific allowance is provided that is equal to the calculated impairment and included in the allowance for credit losses - loans. If the calculated impairment is determined to be permanent or not recoverable, the impairment will be charged off. Factors considered by management in determining if impairment is permanent or not recoverable include whether management judges the loan to be uncollectible, repayment is deemed to be protracted beyond reasonable time frames or the loss becomes evident owing to the borrower’s lack of assets.

Estimate of Probable Credit Losses - Loans

On January 1, 2021, the Company early adopted ASU 2016-13, Financial Instruments - Credit Losses (“ASC 326”) which replaced the “incurred loss approach” for estimating credit losses with an expected loss methodology. The incurred loss model delayed the recognition of credit losses until it was probable that a loss had occurred, while the CECL model requires the immediate recognition of expected credit losses over the contractual term for financial instruments that fall within the scope of CECL at the date of origination or purchase of the financial instrument. The CECL model, which is applicable to the measurement of credit losses on financial assets measured at amortized cost and certain off-balance sheet credit exposures, affects the Company’s estimates of the allowance for credit losses for our loan portfolio and the reserve for our off-balance sheet credit exposures related to loan commitments. The allowance for credit losses is established through a provision for credit losses charged to expense. Loans are charged against the allowance for credit losses when management believes that the collectability of the principal is unlikely. The allowance, based on all available information from internal and external sources, relevant to assessing the collectability of loans over their contractual terms, adjusted for expected prepayments when appropriate, is an amount that management believes will be adequate to absorb possible losses on existing loans that may become uncollectible. The evaluations are performed for each class of loans and take into consideration factors such as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, value of collateral securing the loans and current economic conditions and trends that may affect the borrowers’ ability to pay. For example, delinquencies in unsecured loans and indirect automobile installment loans will be reserved for at significantly higher ratios than loans secured by real estate. Finally, the Company considers forecasts about future economic conditions or changes in collateral values that are reasonable and supportable. Based on that analysis, the Bank deems its allowance for credit losses in proportion to the total nonaccrual loans and past due loans to be sufficient.

Reserve for Unfunded Commitments

The Company maintains a separate allowance for losses on unfunded loan commitments, which is included in accrued expenses and other liabilities on the consolidated statements of financial condition. The reserve for unfunded commitments (off-balance sheet financial instruments) is established through a provision for credit losses -  unfunded commitments, the changes of which are recorded in noninterest expense. The reserve for unfunded commitments is an amount that management believes will be adequate to absorb probable losses inherent in existing commitments, including unused portions of revolving lines of credit and other loans, standby letters of credit, and unused deposit

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account overdraft privileges. The reserve for unfunded commitments is based on evaluations of the collectability, and prior loss experience of unfunded commitments. The evaluations take into consideration such factors as changes in the nature and size of the loan portfolio, overall loan portfolio quality, loan concentrations, specific problem loans and related unfunded commitments, and current economic conditions that may affect the borrower’s or depositor’s ability to pay.

Other Real Estate Owned

Other real estate owned ("OREO") represents real estate acquired in partial or total satisfaction of debts previously contracted with the Company, generally through the foreclosure of loans. These properties are initially recorded at the net realizable value (fair value of collateral less estimated costs to sell). Upon transfer of a loan to OREO, an appraisal is obtained and any excess of the loan balance over the net realizable value is charged against the allowance for credit losses - loans. Subsequent declines in net realizable value identified from the ongoing analysis of such properties as well as gains and losses realized from the sale of OREO are recognized in current period earnings within noninterest expense as foreclosed property expense. The net realizable value of these assets is reviewed and updated as circumstances warrant. Loans transferred to OREO through foreclosure proceedings totaled $0 for the year ended December 31, 2023, and 2024.

Premises and Equipment

Bank premises and equipment are stated at cost less accumulated depreciation and depreciated over the estimated useful life of the related asset or the term of the lease using the straight-line method. Expenditures for improvements that extend the life of an asset are capitalized and depreciated over the asset’s remaining useful life. Gains or losses realized on the disposition of premises and equipment are reflected in the consolidated statements of income. Expenditures for repairs and maintenance are charged to occupancy and equipment expense as incurred. Computer software is recorded at cost and amortized over three to five years. Management periodically evaluates the carrying value of long-lived assets and certain identifiable intangibles, including goodwill, furniture and equipment and leasehold improvements for impairment.

Income Taxes

Our income tax expense, and deferred tax assets and liabilities reflect management’s best assessment of estimated current and future taxes to be paid. Significant judgments and estimates are required in determining the consolidated income tax expense.

Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. Deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes and are reflected as discrete tax items in the Company’s tax provision.

The Company records net deferred tax assets to the extent it is believed that these assets will more likely than not be realized. In making this determination, the Company considers all available evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and recent financial operations. A tax position that meets the more likely than not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement with a taxing authority.

The Company files a consolidated federal income tax return and separate company state tax returns.

For a more detailed description of income taxes see Note 8, Income Taxes of the Notes to Consolidated Financial Statements.

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Table of Contents

Fair Value Measurement

The term "fair value" is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The Company’s approach is to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements. The degree of management judgment involved in estimating the fair value of a financial instrument or other asset is dependent upon the availability of quoted market prices or observable market value inputs for internal valuation models used for estimating fair value. For financial instruments that are actively traded in the marketplace or whose values are based on readily available market data, little judgment is necessary when estimating the instrument’s fair value. When observable market prices and data are not readily available, significant management judgment often is necessary to estimate fair value. In those cases, different assumptions could result in significant changes in valuation. See Note 16, Fair Value Measurement.

Cash and Cash Equivalents

The Bank has included cash and due from banks, interest-bearing deposits in other financial institutions, and federal funds sold as cash and cash equivalents for the purpose of reporting cash flows. The carrying value of cash and cash equivalents approximates its fair value due to its short-term nature.

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).

Advertising Expense

Advertising costs, which we consider to be media and marketing materials, are expensed as incurred. We incurred $0.1 million in advertising expense during the years ended December 31, 2024 and 2023.

Bank Owned Life Insurance

The Company has purchased bank owned life insurance policies on certain current and former employees as a means to generate tax-exempt income which is used to offset a portion of current and future employee benefit costs. Bank owned life insurance is recorded at the cash surrender value of the policies. Changes in the cash surrender value are included in noninterest income.

Other Comprehensive Income (Loss)

Other comprehensive income includes unrealized gains and losses, net of tax, on AFS securities and derivative instruments. Unrealized gains and losses, net of tax, are excluded from net income, and are reflected as a direct charge or credit to shareholders’ equity. Comprehensive income (loss) and the related components are disclosed in the consolidated statements of comprehensive income.

Recent Accounting Pronouncements and Developments

ASU No. 2023-01.  Leases (Topic 842), “Common Control Arrangements.”  The ASU is an amendment to Topic 842.  The amendments in this Update clarify the accounting for leasehold improvements associated with common control leases.  This Update has been issued in order to address current diversity in practice associated with the accounting for leasehold improvements associated with a lease between entities under common control.  The amendments in this Update apply to all lessees that are a party to a lease between entities under common control in which there are leasehold improvements.  The amendments in this Update are effective for interim and annual periods beginning after December

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15, 2023.  The Company currently has no leases which are subject to this guidance and therefore the impact of adopting the new guidance did not have a material impact upon the Company’s financial position and results of operations.

​

ASU No. 2023-02.  Investments-Equity Method and Joint Ventures (Topic 323), “Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method.”  The amendments in this Update permit reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met.  The amendments in this Update are effective for interim and annual periods beginning after December 15, 2023 with early adoption permitted.  The Company currently has no investments which are subject to this guidance and therefore the impact of adopting the new guidance did not have a material impact upon the Company’s financial position and results of operations.

ASU No. 2023-05.  Business Combinations – “Joint Venture Formations (Subtopic 805-60):  Recognition and Initial Measurement.”  The amendments in this Update are effective prospectively for all joint venture formations with a formation date on or after January 1, 2025.  Additionally, a joint venture that was formed before January 1, 2025 may elect to apply the amendments retrospectively if it has sufficient information.  Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued (or made available for issuance), either prospectively or retrospectively.  The Company is evaluating the impact of adopting the new guidance on the consolidated financial statements.

ASU No. 2023-06. Disclosure Improvements – “Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative.” The amendments in this Update represent changes to clarify or improve disclosure and presentation requirements of a variety of Topics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. The effective date for each amendment will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. The amendments in this Update should be applied prospectively. If by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity.

​

ASU No. 2023-07. “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-04”). This update requires public entities with reportable segments to provide additional and more detailed disclosures. This standard is effective for annual periods beginning after December 15, 2023. The Company is not currently required to report segment information and, as such, the adoption did not have an impact on its consolidated financial statements.

​

ASU No. 2023-08. “Intangibles – Goodwill and Other – Crypto Assets (Subtopic 350-60): Accounting for and disclosure of Crypto Assets (“ASU 2023-08”).” This update provides guidance for crypto assets to be carried at fair value and requires additional disclosures. This standard is effective for all entities for fiscal years beginning after December 15, 2024, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU 2023-08 to have an impact on its consolidated financial statements. The Company currently does not hold crypto assets or carry goodwill on its balance sheet.

​

ASU No. 2023-09. “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This update requires more detailed disclosures of income taxes paid net of refunds received, income from continuing operations before income tax expense or benefit, and income tax expense from continuing operations. This standard is to be applied on a prospective basis, with retrospective application permitted, and will be effective for the Company for annual periods beginning after December 15, 2024. We do not expect adoption of this standard to have a material impact on the Company’s financial position or results of operations.

​

ASU No. 2024-03.  “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40).”  This standard is to be applied to annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027 (as amended by ASU 2025-01).  This update requires additional detailed information be disclosed—on an annual and interim basis—about purchase of inventory, employee compensation, depreciation and intangible assets amortization expenses included in each relevant

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expense caption.  Disclosure of the total amount of selling expenses on an interim and annual basis would be required, including definition of selling expenses in annual reporting periods.  We do not expect adoption of this standard to have a material impact on the Company’s financial position or results of operations.

Note 2. Restrictions on Cash and Amounts Due from Banks

On March 26, 2020 the Board of Governors of the Federal Reserve System set the reserve requirement ratios to zero percent and reserve requirements have not been administered since.

Note 3. Investment Securities

A summary of the amortized cost and market value of securities available for sale at December 31, 2024 and 2023 is as follows:

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​

​

​

    

At December 31, 2024

​

​

​

​

    

Gross

    

Gross

    

​

​

​

​

Amortized

​

Unrealized

​

Unrealized

​

Fair

(dollars in thousands)

​

Cost

​

Gains

​

Losses

​

Value

​

​

​

​

​

​

​

​

​

​

​

​

​

Collateralized mortgage obligations

​

$

14,439

​

$

21

​

$

(2,402)

​

$

12,058

Agency mortgage-backed securities

​

 

44,252

​

 

—

​

 

(5,651)

​

 

38,601

Municipal securities

​

​

42,607

​

​

5

​

​

(10,201)

​

​

32,411

U.S. Government agency securities

​

​

31,368

​

​

—

​

​

(7,830)

​

​

23,538

Corporate securities

​

​

1,500

​

​

—

​

​

(159)

​

​

1,341

U.S. Treasury securities

​

 

—

​

 

—

​

 

—

​

 

—

​

​

​

​

​

​

​

​

​

​

​

​

​

Total securities available for sale

​

$

134,166

​

$

26

​

$

(26,243)

​

$

107,949

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

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)

​

​

1,284

U.S. Treasury securities

​

 

6,999

​

 

—

​

 

(54)

​

 

6,945

​

​

​

​

​

​

​

​

​

​

​

​

​

Total securities available for sale

​

$

164,787

​

$

12

​

$

(25,372)

​

$

139,427

​

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 December 31, 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 or loss. 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 held no held-to-maturity securities at December 31, 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.

F - 18

Table of Contents

The following tables show the fair value and gross unrealized losses associated with the investment portfolio, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2024 and 2023:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At December 31, 2024

​

​

Less than 12 months

​

12 months or more

​

Total

​

    

Fair

    

Unrealized

    

Fair

    

Unrealized

    

Fair

    

Unrealized

(dollars in thousands)

​

Value

​

Loss

​

Value

​

Loss

​

Value

​

Loss

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Collateralized mortgage obligations

​

$

118

​

$

—

​

$

9,456

​

$

(2,402)

​

$

9,574

​

$

(2,402)

Agency mortgage-backed securities

​

​

66

​

​

(1)

​

​

38,535

​

​

(5,650)

​

​

38,601

​

​

(5,651)

Municipal securities

​

​

1,615

​

​

(20)

​

​

30,291

​

​

(10,181)

​

​

31,906

​

​

(10,201)

U.S. Government agency securities

​

 

—

​

​

​

​

​

23,538

​

​

(7,830)

​

​

23,538

​

​

(7,830)

Corporate securities

​

​

—

​

​

—

​

​

1,341

​

​

(159)

​

​

1,341

​

​

(159)

U.S. Treasury securities

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

$

1,799

​

$

(21)

​

$

103,161

​

$

(26,222)

​

$

104,960

​

$

(26,243)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

At December 31, 2023

​

​

Less than 12 months

​

12 months or more

​

Total

​

    

Fair

    

Unrealized

    

Fair

    

Unrealized

    

Fair

    

Unrealized

(dollars in thousands)

​

Value

​

Loss

​

Value

​

Loss

​

Value

​

Loss

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Collateralized mortgage obligations

​

$

492

​

$

(1)

​

$

11,927

​

$

(2,308)

​

$

12,419

​

$

(2,309)

Agency mortgage-backed securities

​

​

5

​

​

—

​

​

46,109

​

​

(5,816)

​

​

46,114

​

​

(5,816)

Municipal securities

​

​

2,978

​

​

(39)

​

​

28,667

​

​

(9,226)

​

​

31,645

​

​

(9,265)

U.S. Government agency securities

​

 

220

​

​

(1)

​

​

37,474

​

​

(7,711)

​

​

37,694

​

​

(7,712)

Corporate securities

​

​

—

​

​

—

​

​

1,284

​

​

(216)

​

​

1,284

​

​

(216)

U.S. Treasury securities

​

 

—

​

 

—

​

 

6,944

​

 

(54)

​

 

6,944

​

 

(54)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

$

3,695

​

$

(41)

​

$

132,405

​

$

(25,331)

​

$

136,100

​

$

(25,372)

​

At December 31, 2024 and 2023, the Company did not have any securities that had impairment charges.

The Company's investment securities portfolio consists primarily of debt securities issued by U.S. Government agencies, U.S. Government-sponsored agencies, Corporate securities, state governments and local municipalities. There were no private label mortgage-backed securities ("MBS") or collateralized mortgage obligations ("CMO") held in the investment securities portfolio as of December 31, 2024 and December 31, 2023.

The fair value of investment securities is impacted by interest rates, credit spreads, market volatility and liquidity conditions. Net unrealized gains and losses in the available for sale portfolio are included in shareholders' equity as a component of accumulated other comprehensive income or loss, net of tax. An unrealized loss exists when the current fair value of an individual security is less than the amortized cost basis.

The Company does not believe that the available-for-sale debt securities that were in an unrealized loss position have any credit loss impairment upon adoption of ASC 326 on January 1, 2021 or as of December 31, 2024. As of December 31, 2024, the Company did not intend to sell the investment securities that were in an unrealized loss position. It is more likely than not that the Company will not be required to sell the investment securities before recovery of their amortized cost basis, which may be at maturity. Available-for-sale debt securities issued by U.S. government agencies or U.S. government sponsored enterprises carry the explicit and/or implicit guarantee of the U.S. government and have a long history of zero credit loss. Municipal bonds are considered to have issuer(s) of high credit quality (rated A or higher) and the decline in fair value is due to changes in interest rates and other market conditions. Corporate securities are non-rated investments that are booked as a debt security where rating agencies do not provide a rating. The absence of a rating does not imply substandard quality. Non-rated corporate securities may be purchased from issuers operating

F - 19

Table of Contents

in and around the Company’s operating footprint. The issuer(s) continues to make timely principal and interest payments on the bonds. The fair value is expected to recover as the bond(s) approach maturity.

The Company held fifty-three U.S. Government agency, sixty-three collateralized mortgage obligations and seventy-nine agency mortgage-backed securities that were in an unrealized loss position at December 31, 2024. Principal and interest payments of the underlying collateral for each of these securities are backed by U.S. Government sponsored agencies and carry minimal credit risk. Management found no evidence of credit loss impairment on any of these securities and believes the unrealized losses are due to fluctuations in fair values resulting from changes in market interest rates and are considered temporary as of December 31, 2024.

The Company held one corporate security that was in an unrealized loss position at December 31, 2024. Management believes the unrealized losses were the result of movements in long-term interest rates and are not reflective of any credit deterioration.

All municipal securities held in the investment portfolio are reviewed on at least a quarterly basis for credit loss impairment. Each bond carries an investment grade rating by either Moody's or Standard & Poor's. In addition, the Company periodically conducts its own independent review on each issuer to ensure the financial stability of the municipal entity. The largest geographic concentration was in Maryland and consisted of either general obligation or revenue bonds backed by the taxing power of the issuing municipality. At December 31, 2024, the investment portfolio included thirty-four municipal securities that were in an unrealized loss position. Management believes the unrealized losses were the result of movements in long-term interest rates and are not reflective of any credit deterioration.

At December 31, 2024, investment securities in the amount of approximately $33.4 million were pledged as collateral under the Federal Reserve’s Discount Window Borrowing Program. At December 31, 2023, investment securities in the amount of approximately $13.2 million were pledged as collateral under the Federal Reserve’s Bank Term Funding Program.

Unrealized losses on securities in the investment portfolio amounted to $26.2 million with a total fair value of $105.0 million as of December 31, 2024 compared to unrealized losses of $25.4 million with a total fair value of $136.1 million as of December 31, 2023. The Company believes the unrealized losses presented in the tables above are temporary in nature and primarily related to market interest rates or limited trading activity in a particular type of security rather than the underlying credit quality of the issuers. The Company does not believe that these losses are other than temporary and does not currently intend to sell or believe it will be required to sell securities in an unrealized loss position prior to maturity or recovery of the amortized cost bases.

The following table presents investment securities by stated maturity at December 31, 2024. Collateralized mortgage obligations and agency mortgage-backed securities have expected maturities that differ from contractual maturities because borrowers have the right to call or prepay obligations with or without prepayment penalties and, therefore, these securities are classified separately with no specific maturity date.

​

​

​

​

​

​

​

​

​

​

At December 31, 2024

​

​

Amortized

​

Fair

(dollars in thousands)

    

Cost

    

Value

​

​

​

​

​

​

​

​

​

​

Due within one year

​

$

1,003

​

$

1,002

Due over one to five years

​

 

4,012

​

 

3,640

Due over five to ten years

​

 

16,288

​

 

13,790

Due over ten years

​

 

54,172

​

 

38,858

Collateralized mortgage obligations

​

​

14,439

​

​

12,058

Agency mortgage-backed securities

​

 

44,252

​

 

38,601

​

​

​

​

​

​

​

Total securities available for sale

​

$

134,166

​

$

107,949

​

No investment securities were sold in 2024 or 2023.  

F - 20

Table of Contents

Note 4. Loans and Allowance for Credit Losses - Loans

The following table sets forth the Company's gross loans by major categories as of December 31, 2024 and 2023:

​

​

​

​

​

​

​

​

​

    

December 31,

(dollars in thousands)

​

2024

​

2023

Loans Secured by Real Estate

​

​

​

​

​

​

Construction and land

​

$

8,882

​

$

4,636

Farmland

​

​

315

​

​

325

Single-family residential

​

​

98,993

​

​

86,887

Multi-family

​

​

5,022

​

​

5,165

Commercial

​

​

48,726

​

​

39,217

Total loans secured by real estate

​

​

161,938

​

​

136,230

Commercial and Industrial

​

​

​

​

​

​

Commercial and industrial

​

​

16,705

​

​

10,850

SBA guaranty

​

 

5,691

​

 

5,924

Total commercial and industrial loans

​

​

22,396

​

​

16,774

Consumer Loans

​

​

​

​

​

​

Consumer

​

 

2,880

​

 

2,039

Automobile

​

 

18,005

​

 

21,264

Total consumer loans

​

 

20,885

​

 

23,303

​

​

​

​

​

​

​

Loans, net of deferred fees and costs

​

​

205,219

​

​

176,307

Less: Allowance for credit losses

​

​

(2,839)

​

​

(2,157)

Loans, net

​

$

202,380

​

$

174,150

​

The Bank’s net loans totaled $202.4 million on December 31, 2024, compared to $174.2 million on December 31, 2023, an increase of $28.2 million, or 16.2%. Construction and land loans increased from $4.6 million on December 31, 2023, to $8.9 million on December 31, 2024, an increase of $4.2 million, or 91.6%. Farmland loans were $0.3 million at December 31, 2024 and December 31, 2023. Single-family residential loans increased from $86.9 million on December 31, 2023, to $99.0 million on December 31, 2024, an increase of $12.1 million, or 13.9%. Multi-family residential loans were $5.0 million on December 31, 2024, and $5.2 on December 31, 2023, a decrease of $0.1 million, or 2.8%. Commercial real estate loans increased $9.5 million, or 24.2%, to $48.7 million at December 31, 2024, compared to $39.2 million on December 31, 2023. Commercial and industrial loans increased by $5.9 million, or 54.0%, to $16.7 million on December 31, 2024, compared to $10.9 million on December 31, 2023. SBA guaranty loans were $5.7 million on December 31, 2024, a decrease of $0.2 million, or 3.9%, compared to $5.9 million at December 31, 2023. Consumer loans increased by $0.8 million, or 41.3% to $2.9 million on December 31, 2024, compared to $2.0 million on December 31, 2023. Automobile loans decreased from $21.3 million on December 31, 2023, to $18.0 million on December 31, 2024, a decrease of $3.3 million or 15.3%.

The Company currently manages its credit products and the respective exposure to credit losses by specific portfolio segments and classes, which are levels at which the Company develops and documents its systematic methodology to determine the allowance for credit losses. The Company believes each portfolio segment has unique risk characteristics. The Company's loans held for investment is divided into three portfolio segments: loans secured by real estate, commercial and industrial loans, and consumer loans. Each of these segments is further divided into loan classes for purposes of estimating the allowance for credit losses. The Bank has an automotive indirect lending program where loans, collateralized by vehicles, made by car dealers to consumers are acquired by the Bank. The Bank’s indirect loan group included $18.0 million and $21.3 million of such loans at December 31, 2024 and 2023, respectively.

The Bank makes loans to customers located primarily in Anne Arundel County and surrounding areas of Central Maryland. Although the loan portfolio is diversified, its performance will be influenced by the economy of the region.

F - 21

Table of Contents

In June of 2024, the Bank purchased a portfolio of home equity loans from a nationally recognized broker. The loans were originated by a community bank with $825 million in total assets located in Camden, New Jersey. The portfolio was comprised of 156 revolving home equity notes with a total commitment of $21.6 million of which $14.4 million was funded at the time of our purchase. The loans are ten-year draw and 20-year maturity products. The terms and credit quality of the loans are similar to the home equity loans presently held by the Bank. The loans are geographically distributed between eastern Pennsylvania and central New Jersey. Prior to purchasing the notes, the Bank performed credit risk due diligence on the portfolio and qualitatively assessed compliance, documentation, underwriting and repayment risks. The broker conducted their customary file review and their findings were substantially similar to the Bank’s independent file review. There were no loans included in the acquired portfolio that were classified as credit deteriorated. As of December 31, 2024 there were 138 loans remaining in the purchased portfolio with an aggregate total commitment of $19.2 million of which $12.3 million was outstanding and one loan that was 30-89 days past due with a balance of $744,000.

Included in loans are loans due from directors, executive officers and other related parties of $2.6 million and $0.2 million, at December 31, 2024 and December, and 2023, respectively. These loans are made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with unrelated borrowers. The Board of Directors approves loans to directors, executive officers and other related parties to confirm that collateral requirements, terms and rates are comparable to other borrowers and are in compliance with underwriting policies. The following presents the activity in amount due from directors and other related parties for the years ended December 31, 2024 and 2023.

​

​

​

​

​

​

​

​

​

    

December 31,

(dollars in thousands)

​

2024

​

2023

​

​

​

​

​

​

​

Balance at beginning of year

​

$

150

​

$

—

Additions

​

 

2,600

​

 

150

Repayments

​

 

(29)

​

 

—

Reduction due to retirement

​

​

(150)

​

​

—

Balance at end of year

​

$

2,571

​

$

150

​

Allowance for Credit Losses

Credit Risk and Allowance for Credit Losses - Loans. Credit risk is the risk of loss arising from the inability of a borrower to meet his or her obligations and entails both general risks, which are inherent in the process of lending, and risks specific to individual borrowers. Credit risk is mitigated through portfolio diversification, which limits exposure to any single customer, industry, or collateral type. Residential mortgage and home equity loans and lines generally have the lowest credit loss experience. Loans secured by personal property, such as auto loans, generally experience medium credit losses. Unsecured loan products, such as personal revolving credit, have the highest credit loss experience and for that reason, the Bank has chosen not to engage in a significant amount of this type of lending. Credit risk in commercial lending can vary significantly, as losses as a percentage of outstanding loans can shift widely during economic cycles and are particularly sensitive to changing economic conditions. Generally, improving economic conditions result in improved operating results on the part of commercial customers, enhancing their ability to meet their particular debt service requirements. Improvements, if any, in operating cash flows can be offset by the impact of rising interest rates that may occur during improved economic times. Inconsistent economic conditions may have an adverse effect on the operating results of commercial customers, reducing their ability to meet debt service obligations.

On January 1, 2021, the Company early adopted ASU 2016-13, Financial Instruments - Credit Losses (“ASC 326”) which replaces the “incurred loss approach” for estimating credit losses with an expected loss methodology. The incurred loss model delayed the recognition of credit losses until it was probable that a loss had occurred, while the CECL model requires the immediate recognition of expected credit losses over the contractual term for financial instruments that fall within the scope of CECL at the date of origination or purchase of the financial instrument. The CECL model, which is applicable to the measurement of credit losses on financial assets measured at amortized cost and certain off-balance sheet credit exposures, affects the Company’s estimates of the allowance for credit losses for our loan portfolio and the reserve for our off-balance sheet credit exposures related to loan commitments. The allowance for

F - 22

Table of Contents

credit losses - loans is established through a provision for credit losses charged to expense. Loans are charged against the allowance for credit losses - loans when management believes that the collectability of the principal is unlikely. The allowance, based on all available information from internal and external sources, relevant to assessing the collectability of loans over their contractual terms, adjusted for expected prepayments when appropriate, is an amount that management believes will be adequate to absorb possible losses on existing loans that may become uncollectible. The evaluations are performed for each class of loans and take into consideration factors such as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, value of collateral securing the loans and current economic conditions and trends that may affect the borrowers’ ability to pay. For example, delinquencies in unsecured loans and indirect automobile installment loans will be reserved for at significantly higher ratios than loans secured by real estate. Finally, the Company considers forecasts about future economic conditions or changes in collateral values that are reasonable and supportable. Based on that analysis, the Bank deems its allowance for credit losses - loans in proportion to the total nonaccrual loans and past due loans to be sufficient.

The following table presents the total allowance by loan segment:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans Secured By Real Estate

​

Commercial and Industrial Loans

​

Consumer Loans

​

 

​

December 31, 2024

​

Construction

​

​

​

Single-family

​

​

​

​

​

Commercial

​

​

​

​

​

​

​

​

​

 

​

(dollars in thousands)

    

and Land

​

Farmland

​

Residential

​

Multi-family

​

Commercial

    

and Industrial

​

SBA Guaranty

​

Consumer

​

Automobile

    

Total

​

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Balance, beginning of year

​

$

31

​

$

18

​

$

1,290

​

$

96

​

$

190

​

$

304

​

$

21

​

$

30

​

$

177

​

$

2,157

Charge-offs

​

 

—

​

​

—

​

​

—

​

 

—

​

​

—

​

​

—

​

​

(299)

​

​

(18)

​

​

(67)

​

​

(384)

Recoveries

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

133

​

 

89

​

 

222

Provision (release) for credit losses

​

 

9

​

 

(2)

​

 

239

​

 

128

​

 

317

​

 

(32)

​

 

316

​

 

(100)

​

 

(31)

​

 

844

​

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Balance, end of year

​

$

40

​

$

16

​

$

1,529

​

$

224

​

$

507

​

$

272

​

$

38

​

$

45

​

$

168

​

$

2,839

​

​

 

  

​

 

  

​

 

  

​

 

  

​

 

​

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Individually evaluated for impairment:

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Balance in allowance

​

$

—

​

$

—

​

$

18

​

$

—

​

$

—

​

$

121

​

$

—

​

$

—

​

$

—

​

$

139

Related loan balance

​

 

—

​

 

—

​

 

26

​

 

—

​

 

—

​

 

773

​

 

—

​

 

—

​

 

—

​

 

799

​

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Collectively evaluated for impairment:

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Balance in allowance

​

$

40

​

$

16

​

$

1,511

​

$

224

​

$

507

​

$

151

​

$

38

​

$

45

​

$

168

​

$

2,700

Related loan balance

​

 

8,882

​

 

315

​

 

98,967

​

 

5,022

​

 

48,726

​

 

15,932

​

 

5,691

​

 

2,880

​

 

18,005

​

 

204,420

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

Loans Secured By Real Estate

​

Commercial and Industrial Loans

​

Consumer Loans

    

​

​

December 31, 2023

​

Construction

​

​

​

Single-family

​

​

​

​

​

Commercial

​

​

​

​

​

​

​

​

​

​

​

(dollars in thousands)

    

and Land

​

Farmland

​

Residential

​

Multi-family

​

Commercial

    

and Industrial

​

SBA Guaranty

​

Consumer

​

Automobile

    

Total

​

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Balance, beginning of year

​

$

44

​

$

20

​

$

1,230

​

$

103

​

$

221

​

$

174

​

$

22

​

$

23

​

$

325

​

$

2,162

Charge-offs

​

 

—

​

​

—

​

​

—

​

 

—

​

​

—

​

​

—

​

​

—

​

​

(79)

​

​

(124)

​

​

(203)

Recoveries

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

1

​

 

101

​

 

102

(Release) provision for credit losses

​

 

(13)

​

 

(2)

​

 

60

​

 

(7)

​

 

(31)

​

 

130

​

 

(1)

​

 

85

​

 

(125)

​

 

96

​

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Balance, end of year

​

$

31

​

$

18

​

$

1,290

​

$

96

​

$

190

​

$

304

​

$

21

​

$

30

​

$

177

​

$

2,157

​

​

 

  

​

 

  

​

 

  

​

 

  

​

 

​

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Individually evaluated for impairment:

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Balance in allowance

​

$

—

​

$

—

​

$

21

​

$

—

​

$

—

​

$

179

​

$

—

​

$

—

​

$

—

​

$

200

Related loan balance

​

 

—

​

 

—

​

 

30

​

 

—

​

 

—

​

 

299

​

 

—

​

 

—

​

 

—

​

 

329

​

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Collectively evaluated for impairment:

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Balance in allowance

​

$

31

​

$

18

​

$

1,269

​

$

96

​

$

190

​

$

125

​

$

21

​

$

30

​

$

177

​

$

1,957

Related loan balance

​

 

4,636

​

 

325

​

 

86,857

​

 

5,165

​

 

39,217

​

 

10,551

​

 

5,924

​

 

2,039

​

 

21,264

​

 

175,978

​

Management believes the allowance for credit losses is at an appropriate level to absorb inherent probable losses in the portfolio.

During the 12 months ended December 31, 2024, loans to 13 borrowers and related entities totaling approximately $384,000 were determined to be uncollectible and were charged off. During the 12 months ended December 31, 2023, loans to 12 borrowers and related entities totaling approximately $203,000 were determined to be uncollectible and were charged off.

​

The following table provides gross charge-offs for the year 2024 by the year of origination:

​

F - 23

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gross Charge-offs

December 31, 2024

​

Term Loans by Origination Year

​

Revolving

​

​

​

(dollars in thousands)

​

2024

​

2023

​

2022

​

2021

​

2020

​

Prior

​

Loans

​

Total

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and Industrial Loans

​

$

—

​

$

—

​

$

—

​

$

299

​

$

—

​

$

—

​

$

—

​

$

299

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consumer Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consumer

​

​

—

​

$

—

​

$

13

​

$

—

​

$

—

​

$

5

​

$

—

​

​

18

Automobile

​

​

—

​

​

—

​

​

—

​

​

—

​

​

51

​

​

16

​

​

—

​

​

67

Total consumer

​

​

—

​

​

—

​

​

13

​

​

—

​

​

51

​

​

21

​

​

—

​

​

85

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total gross charge-offs this period

​

$

—

​

$

—

​

$

13

​

$

299

​

$

51

​

$

21

​

$

—

​

$

384

​

The following table rolls forward the Company’s activity for nonaccrual loans during the years 2024 and 2023:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans Secured By Real Estate

​

Commercial and Industrial Loans

​

Consumer Loans

​

​

​

​

Single-family

​

​

​

​

​

Commercial

​

​

​

​

​

​

​

​

​

​

​

​

​

Residential

​

Multi-family

​

Commercial

​

and Industrial

    

SBA Guaranty

    

Consumer

​

Automobile

​

​

Total

(dollars in thousands)

​

  

 

​

  

 

​

  

​

​

​

 

​

  

 

​

  

 

​

  

​

​

  

December 31, 2022

$

104

​

$

—

​

$

—

​

$

299

​

$

—

​

$

—

​

$

85

​

$

488

Transfers into nonaccrual

​

307

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

​

 

175

​

 

482

Loans paid down/payoffs

​

(266)

​

$

—

​

​

—

​

​

—

​

$

—

​

​

—

​

​

(35)

​

​

(301)

Loans returned to accrual status

 

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(18)

​

​

(18)

Loans charged off

 

—

​

 

—

​

 

—

​

 

​

​

 

​

​

 

—

​

 

(124)

​

 

(124)

​

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2023

$

145

​

$

—

​

$

—

​

$

299

​

$

—

​

$

—

​

$

83

​

$

527

Transfers into nonaccrual

 

52

​

 

—

​

 

140

​

 

—

​

 

—

​

 

—

​

 

93

​

 

285

Loans paid down/payoffs

​

(48)

​

$

—

​

​

(16)

​

​

—

​

​

—

​

​

—

​

​

(35)

​

​

(99)

Loans returned to accrual status

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

(1)

​

​

(1)

Loans charged off

 

—

​

 

—

​

 

—

​

 

(299)

​

 

—

​

 

—

​

 

(53)

​

 

(352)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

$

149

​

$

—

​

$

124

​

$

—

​

$

—

​

$

—

​

$

87

​

$

360

​

Credit Quality Information

In addition to monitoring the performance status of the loan portfolio, the Company utilizes a risk rating scale (1-8) to evaluate loan asset quality for all loans. Loans that are rated 1-4 are classified as “pass” credits. For the pass rated loans, management believes there is a low risk of loss related to these loans and as necessary, credit may be strengthened through improved borrower performance and/or additional collateral. Loans rated a 5 (Special Mention) are pass credits, but are loans that have been identified that warrant additional attention and monitoring and represent “criticized” assets. Loans rated a 6 (Substandard) or higher are considered “criticized” loans and represent an increased level of credit risk. The use and application of these risk ratings by the Bank conform to the Bank's policy and regulatory definitions.

The Bank’s internal risk ratings are as follows:

1 – 4 (Pass) - Pass credits are loans in grades “superior” through “acceptable”. These are at least considered to be credits with acceptable risks and would be granted in the normal course of lending operations.

5 (Special Mention) - Special mention credits have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the credits or in the Bank’s credit position at some future date. If weaknesses cannot be identified, classifying as special mention is not appropriate. Special mention credits are not adversely classified and do not expose the Bank to sufficient risk to warrant an adverse classification. No apparent loss of principal or interest is expected.

6 (Substandard) - Substandard credits are inadequately protected by the current worth and paying capacity of the obligor or by the collateral pledged. Financial statements normally reveal some or all of the following: poor

F - 24

Table of Contents

trends, lack of earnings and cash flow, excessive debt, lack of liquidity, and the absence of creditor protection. Credits so classified must have a well-defined weakness, or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

7 (Doubtful) - A doubtful credit has all the weaknesses inherent in a substandard asset with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors that may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans. Doubtful classification for an entire credit should be avoided when collection of a specific portion appears highly probable with the adequately secured portion graded Substandard.

In the normal course of loan portfolio management, loan originators are responsible for continuous assessment of credit risk arising from the individual borrowers within their portfolio and assigning appropriate risk ratings. Credit Administration is responsible for ensuring the integrity and operation of the risk rating system and maintenance of the watch list. The Bank contracts with an independent third-party loan review firm that reviews and validates the internal credit risk program on an annual basis. Results of these reviews are presented to the Audit Committee for approval and then to management for implementation. The loan review process complements and reinforces the risk identification and assessment decisions made by the lenders and credit personnel as well as the Bank’s policies and procedures.

The following table provides information with respect to the Company's risk ratings by loan portfolio segment:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans Secured By Real Estate

​

Commercial and Industrial Loans

​

Consumer Loans

​

 

​

December 31, 2024

​

Construction

​

​

​

Single-family

​

​

​

​

​

Commercial

​

​

​

​

​

​

​

​

​

 

​

(dollars in thousands)

    

and Land

​

Farmland

​

Residential

​

Multi-family

​

Commercial

    

and Industrial

​

SBA Guaranty

​

Consumer

​

Automobile

​

Total

​

​

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Pass

​

$

8,882

​

$

315

​

$

98,844

​

$

5,022

​

$

47,829

​

$

16,705

​

$

5,219

​

$

2,880

​

$

17,918

​

$

203,614

Special mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

472

​

​

—

​

​

—

​

​

472

Substandard

​

​

—

​

​

—

​

​

149

​

​

—

​

​

897

​

​

—

​

​

—

​

​

—

​

​

87

​

​

1,133

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Loss

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

​

$

8,882

​

$

315

​

$

98,993

​

$

5,022

​

$

48,726

​

$

16,705

​

$

5,691

​

$

2,880

​

$

18,005

​

$

205,219

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nonaccrual

​

$

—

​

$

—

​

$

149

​

$

—

​

$

124

​

$

—

​

$

—

​

$

—

​

$

87

​

$

360

Restructured loans to borrowers with financial difficulty

​

$

—

​

$

—

​

$

26

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

26

Number restructured loans to borrowers with financial difficulty

​

​

—

​

​

—

​

​

1

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

1

Non-performing restructured loans to borrowers with financial difficulty

​

$

—

​

$

—

​

$

26

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

26

Number of non-performing restructured loan accounts

​

​

—

​

​

—

​

​

1

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

1

​

F - 25

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans Secured By Real Estate

​

Commercial and Industrial Loans

​

Consumer Loans

​

 

​

December 31, 2023

​

Construction

​

​

​

Single-family

​

​

​

​

​

Commercial

​

​

​

​

​

​

​

​

​

 

​

(dollars in thousands)

    

and Land

​

Farmland

​

Residential

​

Multi-family

​

Commercial

    

and Industrial

​

SBA Guaranty

​

Consumer

​

Automobile

​

Total

​

 

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Pass

​

$

4,636

​

$

325

​

$

86,743

​

$

5,165

​

$

39,217

​

$

10,551

​

$

5,924

​

$

2,039

​

$

21,110

​

$

175,709

Special mention

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Substandard

​

​

—

​

​

—

​

​

145

​

​

—

​

​

—

​

​

299

​

​

—

​

​

—

​

​

154

​

​

598

Doubtful

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Loss

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

​

​

$

4,636

​

$

325

​

$

86,887

​

$

5,165

​

$

39,217

​

$

10,850

​

$

5,924

​

$

2,039

​

$

21,264

​

$

176,307

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nonaccrual

​

$

—

​

$

—

​

$

145

​

$

—

​

$

—

​

$

299

​

$

—

​

$

—

​

$

83

​

$

527

Restructured loans to borrowers with financial difficulty

​

$

—

​

$

—

​

$

30

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

30

Number restructured loans to borrowers with financial difficulty

​

​

—

​

​

—

​

​

1

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

1

Non-performing restructured loans to borrowers with financial difficulty

​

$

—

​

$

—

​

$

30

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

​

$

30

Number of non-performing restructured loan accounts

​

​

—

​

​

—

​

​

1

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

1

​

The following tables provide information about credit quality indicators by the year of origination at December 31, 2024 and 2023:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Origination Year

​

​

December 31, 2024

2024

​

2023

​

2022

​

2021

​

2020

​

Prior

​

Total

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans Secured By Real Estate:

​

  

​

​

  

​

​

  

​

​

  

​

​

  

​

​

  

​

​

  

Pass

$

37,899

​

$

14,919

​

$

13,565

​

$

14,959

​

$

8,287

​

$

71,263

​

$

160,892

Special mention

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Substandard

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

773

​

​

773

Nonaccrual

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

273

​

​

273

Doubtful

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Loss

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

$

37,899

​

$

14,919

​

$

13,565

​

$

14,959

​

$

8,287

​

$

72,309

​

$

161,938

Commercial and Industrial Loans:

​

  

​

​

  

​

​

  

​

​

  

​

​

  

​

​

  

​

​

  

Pass

$

5,734

​

$

3,493

​

$

903

​

$

301

​

$

3,434

​

$

8,059

​

$

21,924

Special mention

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

472

​

​

472

Substandard

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Nonaccrual

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Doubtful

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Loss

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

$

5,734

​

$

3,493

​

$

903

​

$

301

​

$

3,434

​

$

8,531

​

$

22,396

Consumer Loans:

​

  

​

​

  

​

​

  

​

​

  

​

​

  

​

​

  

​

​

  

Pass

$

7,917

​

$

1,786

​

$

3,128

​

$

3,174

​

$

1,721

​

$

3,072

​

$

20,798

Special mention

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Substandard

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Nonaccrual

​

—

​

​

—

​

​

40

​

​

34

​

​

12

​

​

1

​

​

87

Doubtful

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Loss

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

$

7,917

​

$

1,786

​

$

3,168

​

$

3,208

​

$

1,733

​

$

3,073

​

$

20,885

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

F - 26

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Origination Year

​

​

December 31, 2023

2023

​

2022

​

2021

​

2020

​

2019

​

Prior

​

Total

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans Secured By Real Estate:

​

  

​

​

  

​

​

  

​

​

  

​

​

  

​

​

  

​

​

  

Pass

$

15,316

​

$

12,507

​

$

16,675

​

$

9,739

​

$

9,457

​

$

72,391

​

$

136,085

Special mention

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Substandard

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Nonaccrual

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

145

​

​

145

Doubtful

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Loss

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

$

15,316

​

$

12,507

​

$

16,675

​

$

9,739

​

$

9,457

​

$

72,536

​

$

136,230

Commercial and Industrial Loans:

​

  

​

​

  

​

​

  

​

​

  

​

​

  

​

​

  

​

​

  

Pass

$

3,515

​

$

1,099

​

$

153

​

$

3,834

​

$

711

​

$

7,163

​

$

16,475

Special mention

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Substandard

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Nonaccrual

​

—

​

​

—

​

​

299

​

​

—

​

​

—

​

​

—

​

​

299

Doubtful

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Loss

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

$

3,515

​

$

1,099

​

$

452

​

$

3,834

​

$

711

​

$

7,163

​

$

16,774

Consumer Loans:

​

  

​

​

  

​

​

  

​

​

  

​

​

  

​

​

  

​

​

  

Pass

$

2,140

​

$

4,598

​

$

5,697

​

$

3,364

​

$

3,481

​

$

3,940

​

$

23,220

Special mention

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Substandard

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Nonaccrual

​

—

​

​

27

​

​

40

​

​

9

​

​

—

​

​

7

​

​

83

Doubtful

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Loss

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

​

$

2,140

​

$

4,625

​

$

5,737

​

$

3,373

​

$

3,481

​

$

3,947

​

$

23,303

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

F - 27

Table of Contents

Asset Quality

The following table presents the loan portfolio segments summarized by aging categories of performing loans and nonaccrual loans as of December 31, 2024 and 2023:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

90 Days or

​

​

​

​

​

​

​

​

​

​

​

30-89 Days

​

More and

​

​

​

​

​

​

December 31, 2024

    

Current

    

Past Due

    

Still Accruing

    

Nonaccrual

    

Total

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans Secured by Real Estate

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Construction and land

​

$

8,882

​

$

—

​

$

—

​

$

—

​

$

8,882

Farmland

​

​

315

​

​

—

​

​

—

​

​

—

​

​

315

Single-family residential

​

​

97,742

​

​

1,102

​

​

—

​

​

149

​

​

98,993

Multi-family

​

 

5,022

​

 

—

​

 

—

​

 

—

​

 

5,022

Commercial

​

​

48,602

​

​

—

​

​

—

​

​

124

​

​

48,726

Total loans secured by real estate

​

​

160,563

​

​

1,102

​

​

—

​

​

273

​

​

161,938

Commercial and Industrial

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

16,233

​

​

472

​

​

—

​

​

—

​

​

16,705

SBA guaranty

​

​

5,691

​

​

—

​

​

—

​

​

—

​

​

5,691

Total commercial and industrial loans

​

​

21,924

​

​

472

​

​

—

​

​

—

​

​

22,396

Consumer Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consumer

​

​

2,879

​

​

1

​

​

—

​

​

—

​

​

2,880

Automobile

​

​

17,613

​

​

305

​

​

—

​

​

87

​

​

18,005

Total consumer loans

​

​

20,492

​

​

306

​

​

—

​

​

87

​

​

20,885

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

$

202,979

​

$

1,880

​

$

—

​

$

360

​

$

205,219

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

90 Days or

​

​

​

​

​

​

​

​

​

​

​

30-89 Days

​

More and

​

​

​

​

​

​

December 31, 2023

    

Current

    

Past Due

    

Still Accruing

    

Nonaccrual

    

Total

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans Secured by Real Estate

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Construction and land

​

$

4,636

​

$

—

​

$

—

​

$

—

​

$

4,636

Farmland

​

 

325

​

​

—

​

​

—

​

​

—

​

​

325

Single-family residential

​

​

86,233

​

​

509

​

​

—

​

​

145

​

​

86,887

Multi-family

​

​

5,165

​

 

—

​

 

—

​

 

—

​

 

5,165

Commercial

​

​

39,217

​

​

—

​

​

—

​

​

—

​

​

39,217

Total loans secured by real estate

​

 

135,576

​

​

509

​

​

—

​

​

145

​

​

136,230

Commercial and Industrial

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

10,551

​

​

—

​

​

—

​

​

299

​

​

10,850

SBA guaranty

​

​

5,924

​

​

—

​

​

—

​

​

—

​

​

5,924

Total commercial and industrial loans

​

​

16,475

​

​

—

​

​

—

​

​

299

​

​

16,774

Consumer Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consumer

​

​

1,981

​

​

58

​

​

—

​

​

—

​

​

2,039

Automobile

​

​

20,794

​

​

387

​

​

—

​

​

83

​

​

21,264

Total consumer loans

​

 

22,775

​

​

445

​

​

—

​

​

83

​

​

23,303

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

$

174,826

​

$

954

​

$

—

​

$

527

​

$

176,307

​

Loans on which the accrual of interest has been discontinued totaled $0.4 million at December 31, 2024 and $0.5 million at December 31, 2023. The Bank recognizes interest income on non-accrual loans using a cash basis method for the time they are on non-accrual.  Interest income that was recognized on these non-accrual loans totaled $30,000 and $15,000 for the years ended December 31, 2024 and 2023, respectively. Loans past due 90 days or more and still accruing interest totaled $0 at December 31, 2024 and 2023. Management believes these particular loans are well secured and in the process of full collection of all amounts owed.

F - 28

Table of Contents

Nonaccrual loans with specific reserves at December 31, 2024 are comprised of:

Single-family residential – One loan in the amount of $26,000 with $18,000 of specific reserve established for the loan.

Commercial real estate – One loan in the amount of $773,000 with specific reserve of $121,000 established for the loan.

F - 29

Table of Contents

Impaired Loans

The following table presents information with respect to impaired loans. Management determined the specific reserve in the allowance based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the remaining source of repayment for the loan is the operation or liquidation of the collateral. In those cases, the current fair value of the collateral, less estimated selling costs is used to determine the specific allowance recorded.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Unpaid

    

Interest

    

​

​

    

Average

December 31, 2024

​

Recorded

​

Principal

​

Income

​

Specific

​

Recorded

(dollars in thousands)

​

Investment

​

Balance

​

Recognized

​

Reserve

​

Investment

Impaired loans with specific reserves:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Loans Secured by Real Estate

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Construction and land

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

Farmland

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

Single-family residential

​

 

8

​

 

26

​

 

4

​

 

18

​

 

48

Multi-family

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Commercial

​

​

652

​

​

773

​

​

—

​

​

121

​

​

2,270

Total loans secured by real estate

​

​

660

​

​

799

​

​

4

​

​

139

​

​

2,318

Commercial and Industrial

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

SBA guaranty

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total commercial and industrial loans

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Consumer Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consumer

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Automobile

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total consumer loans

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total impaired loans with specific reserves

​

$

660

​

$

799

​

$

4

​

$

139

​

$

2,318

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Impaired loans with no specific reserve:

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Loans Secured by Real Estate

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Construction and land

​

$

—

​

$

—

​

$

—

​

$

n/a

​

$

—

Farmland

​

 

—

​

 

—

​

 

—

​

 

n/a

​

 

—

Single-family residential

​

 

123

​

 

123

​

 

12

​

 

n/a

​

 

91

Multi-family

​

​

—

​

​

—

​

​

—

​

​

n/a

​

​

—

Commercial

​

​

125

​

​

125

​

​

8

​

​

n/a

​

​

138

Total loans secured by real estate

​

​

248

​

​

248

​

​

20

​

​

—

​

​

229

Commercial and Industrial

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

—

​

​

—

​

​

—

​

​

n/a

​

​

—

SBA guaranty

​

​

—

​

​

—

​

​

—

​

​

n/a

​

​

—

Total commercial and industrial loans

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Consumer Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consumer

​

​

—

​

​

—

​

​

—

​

​

n/a

​

​

—

Automobile

​

​

86

​

​

86

​

​

6

​

​

n/a

​

​

102

Total consumer loans

​

​

86

​

​

86

​

​

6

​

​

n/a

​

​

102

Total impaired loans with no specific reserve

​

$

334

​

$

334

​

$

26

​

$

—

​

$

331

​

F - 30

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

​

​

    

Unpaid

    

Interest

    

​

​

    

Average

December 31, 2023

​

Recorded

​

Principal

​

Income

​

Specific

​

Recorded

(dollars in thousands)

​

Investment

​

Balance

​

Recognized

​

Reserve

​

Investment

Impaired loans with specific reserves:

 

​

  

 

​

  

 

​

  

 

​

  

 

​

  

Loans Secured by Real Estate

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Construction and land

​

$

—

​

$

—

​

$

—

​

$

—

​

$

—

Farmland

​

 

—

​

 

—

​

 

—

​

 

—

​

 

—

Single-family residential

​

 

9

​

 

30

​

 

4

​

 

21

​

 

48

Multi-family

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Commercial

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total loans secured by real estate

​

​

9

​

​

30

​

​

4

​

​

21

​

​

48

Commercial and Industrial

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

120

​

​

299

​

​

—

​

​

179

​

​

499

SBA guaranty

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total commercial and industrial loans

​

​

120

​

​

299

​

​

—

​

​

179

​

​

499

Consumer Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consumer

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Automobile

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total consumer loans

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Total impaired loans with specific reserves

​

$

129

​

$

329

​

$

4

​

$

200

​

$

547

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Impaired loans with no specific reserve:

​

 

  

​

 

  

​

 

  

​

 

  

​

 

  

Loans Secured by Real Estate

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Construction and land

​

$

—

​

$

—

​

$

—

​

$

n/a

​

$

—

Farmland

​

 

—

​

 

—

​

 

—

​

 

n/a

​

 

—

Single-family residential

​

 

115

​

 

115

​

 

5

​

 

n/a

​

 

130

Multi-family

​

​

—

​

​

—

​

​

—

​

​

n/a

​

​

—

Commercial

​

​

—

​

​

—

​

​

—

​

​

n/a

​

​

—

Total loans secured by real estate

​

​

115

​

​

115

​

​

5

​

​

—

​

​

130

Commercial and Industrial

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Commercial and industrial

​

​

—

​

​

—

​

​

—

​

​

n/a

​

​

—

SBA guaranty

​

​

—

​

​

—

​

​

—

​

​

n/a

​

​

—

Total commercial and industrial loans

​

​

—

​

​

—

​

​

—

​

​

—

​

​

—

Consumer Loans

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Consumer

​

​

—

​

​

—

​

​

—

​

​

n/a

​

​

—

Automobile

​

​

154

​

​

154

​

​

6

​

​

n/a

​

​

104

Total consumer loans

​

​

154

​

​

154

​

​

6

​

​

n/a

​

​

104

Total impaired loans with no specific reserve

​

$

269

​

$

269

​

$

11

​

$

—

​

$

234

​

​

​

F - 31

Table of Contents

Note 5. Premises and Equipment

A summary of premises and equipment is as follows:

​

​

​

​

​

​

​

​

​

​

​

    

Useful

    

December 31,

​

​

lives

​

2024

​

2023

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

Land

 

  

​

$

685

​

$

685

Buildings

 

30-40 years

​

 

6,793

​

 

6,823

Equipment and fixtures

 

5-7 years

​

 

8,691

​

 

8,671

Construction in progress

 

  

​

 

66

​

 

25

Operating Lease Assets

​

​

​

​

48

​

​

210

​

 

  

​

 

16,283

​

 

16,414

Accumulated depreciation

 

  

​

 

(13,605)

​

 

(13,368)

​

 

  

​

$

2,678

​

$

3,046

​

Depreciation expense totaled $0.3 million for the years ended December 31, 2024 and 2023. Amortization of software totaled $0.1 million for the years ended December 31, 2024 and 2023.

Operating lease Right-of-Use (“ROU”) assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. The Bank leases its Severna Park and Linthicum branches. Minimum lease obligations under the Severna Park branch are $25,000 through September 2025. Minimum lease obligations under the Linthicum branch are $13,000 through January 2025, adjusted annually on a pre-determined basis. The Bank is also required to pay all maintenance costs under all these leasing arrangements. Income from rent totaled $73,000 and $76,000 and rent expense totaled $200,000 and $198,000 for the years ended December 31, 2024 and 2023, respectively. The Bank uses its incremental borrowing rate based on the information available at the commencement date in determining the lease liabilities as the Company’s leases generally do not provide an implicit rate. Lease terms may include options to extend or terminate when the Company is reasonably certain that the option will be exercised.

Future minimum payments of the Bank’s operating leases as of December 31, 2024 are as follows:

​

​

​

​

​

Year ending December 31,

    

Amount

​

​

(dollars in thousands)

2025

​

$

49

2026

​

 

9

2027

​

​

6

2028

​

​

—

2029

​

​

—

Thereafter

​

 

—

Total

​

$

64

​

​

Note 6. Federal Home Loan Bank, Short- and Long-term Borrowings

The Bank owned 16,713 shares of common stock of the FHLB at December 31, 2024. The Bank is required to maintain an investment of 0.07% of total assets with a dollar cap of $18.0 million, adjusted annually, plus 4.75% of total advances, adjusted for advances and repayments. The credit available under this facility is determined at 25% of the Bank’s total assets, or approximately $92.1 million at December 31, 2024. Short- and long-term advances totaled $30.0 million and $0, respectively, under this credit arrangement at December 31, 2024, and short- and long-term advances totaled $30.0 million and $0, respectively, at December 31, 2023. This credit facility is secured by a floating lien on the Bank’s residential mortgage loan portfolio and pledged securities. Average short-term borrowings approximated $14.4 million and $5.2 million for 2024 and 2023, respectively and the weighted average interest rate was 5.11% and 5.43%, respectively. Average long-term borrowings approximated $0 for 2024 and 2023, respectively.

F - 32

Table of Contents

At December 31, 2024 the Bank had available unsecured federal funds lines of credit from two financial institutions for $9.0 million and $8.0 million.    

​

​

Note 7. Deposits

The following table summarizes the major classifications of deposit balances as of the dates indicated:

​

​

​

​

​

​

​

​

​

​

    

December 31,

    

​

​

2024

    

2023

​

(dollars in thousands)

​

​

​

Noninterest-bearing deposits

​

$

100,747

​

$

116,922

​

​

​

​

​

​

​

​

​

Interest-bearing deposits:

​

​

​

​

​

​

​

Interest-bearing checking

​

​

25,487

​

​

28,571

​

Money Market

​

 

81,513

​

 

26,836

​

Savings

​

 

75,444

​

 

93,104

​

Time deposits, $250,000 or more

​

 

1,133

​

​

2,501

​

Time deposits below $250,000

​

 

24,865

​

​

32,133

​

Total interest- bearing deposits

​

​

208,442

​

​

183,145

​

​

​

​

​

​

​

​

​

Total Deposits

​

$

309,189

​

$

300,067

​

​

Interest expense on deposits for the years ended December 31, 2024 and 2023 is as follows:

​

​

​

​

​

​

​

​

​

​

    

2024

    

2023

    

(dollars in thousands)

​

​

​

Interest-bearing checking

​

$

50

​

$

10

​

Money Market

​

 

2,154

​

 

76

​

Savings

​

 

42

​

 

89

​

Time deposits, $250,000 or more

​

 

15

​

 

47

​

Time deposits below $250,000

​

​

272

​

 

291

​

Total Interest Expense

​

$

2,533

​

$

513

​

​

The Bank recognized $0.2 million of fee income from deposits for the years ended December 31, 2024 and 2023.

At December 31, 2024, the scheduled maturities of time deposits are approximately as follows:

​

​

​

​

​

(dollars in thousands)

​

Amount

Maturing in:

​

​

​

2025

​

$

13,711

2026

​

 

6,272

2027

​

 

1,633

2028

​

 

1,829

2029

​

 

2,318

2030 and thereafter

​

 

235

Total Time Deposits

​

$

25,998

​

Deposit balances of executive officers and directors and their affiliated interests totaled approximately $1.7 million and $2.4 million at December 31, 2024 and 2023, respectively.

The Bank had no brokered deposits at December 31, 2024 and 2023.  

F - 33

Table of Contents

The aggregate amount of time deposit accounts that equal or exceed the $250,000 insured limit totaled $1.1 million and $2.5 million at December 31, 2024 and 2023, respectively.

​

​

​

​

​

(dollars in thousands)

​

Amount

Maturing in:

​

​

​

Three months or less

​

$

—

Over three months through six months

​

 

—

Over six months through twelve months

​

 

552

Over twelve months

​

 

581

Total Time Deposits of $250,000 or More

​

$

1,133

​

​

Note 8. Income Taxes

The components of income tax expense are as follows for the years ended December 31, 2024 and 2023:

​

​

​

​

​

​

​

​

​

    

2024

    

2023

(dollars in thousands)

​

​

Current income tax expense:

 

​

  

 

​

  

Federal

​

$

—

​

$

128

State

​

 

(110)

​

 

28

Total current tax expense

​

 

(110)

​

 

156

Deferred income tax expense:

​

 

  

​

 

  

Federal

​

 

(320)

​

 

(59)

State

​

 

(95)

​

 

(25)

Total deferred tax expense

​

 

(415)

​

 

(84)

Total Income tax expense

​

$

(525)

​

$

72

​

A reconciliation of income tax expense computed at the statutory rate of 21% at December 31, 2024 and December 31, 2023 to the actual income tax expense for the years ended December 31, 2024 and 2023 is as follows:

​

​

​

​

​

​

​

​

​

​

    

2024

    

2023

    

(dollars in thousands)

​

​

​

Income tax expense at federal statutory rate

​

$

(134)

​

$

315

​

(Decrease) increase resulting from:

​

 

  

​

 

  

​

Tax-exempt income

​

 

(192)

​

 

(212)

​

Bank owned life insurance

​

​

(37)

​

​

(34)

​

State income taxes, net of Federal income tax benefit

​

 

(162)

​

 

3

​

Total income tax expense

​

$

(525)

​

$

72

​

​

​

​

​

​

​

​

​

​

F - 34

Table of Contents

Deferred tax assets and liabilities resulting from the tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes at December 31, 2024 and 2023 are as follows:

​

​

​

​

​

​

​

​

​

​

    

2024

    

2023

    

(dollars in thousands)

​

​

​

Deferred income tax benefits:

 

​

  

 

​

  

 

Accrued deferred compensation

​

$

91

​

$

89

​

Allowance for credit losses

​

 

676

​

 

480

​

Accumulated depreciation

​

 

(18)

​

 

(12)

​

Accrued Liabilities

​

​

75

​

​

110

​

Reserve for unfunded commitments

​

 

161

​

 

130

​

Accounting standard 310-20

​

​

(174)

​

​

(151)

​

Right of use asset

​

​

(13)

​

​

(58)

​

Lease liability

​

​

13

​

​

58

​

Accumulated securities discount accretion

​

 

283

​

 

272

​

Net operating loss carryforward

​

​

239

​

​

—

​

Net unrealized depreciation on investment securities available for sale

​

​

7,215

​

​

6,979

​

Net deferred income tax benefits

​

$

8,548

​

$

7,897

​

​

​

​

​

​

​

​

​

​

Management has determined that no valuation allowance is required as it believes it is more likely than not that all of the deferred tax assets will be fully realizable in the future. At December 31, 2024 and 2023, management believes there are no uncertain tax positions under ASC Topic 740 Income Taxes. We file income tax returns in the US federal jurisdictions.  We are no longer subject to state or US federal income tax examinations by tax authorities for years ended before 2021.

Income tax (benefit) / expense was $ (0.52) million and $0.07 million at December 2024 and 2023, respectively.

Note 9. Pension and Profit Sharing Plans

The Bank has a defined contribution retirement plan qualifying under Section 401(k) of the Internal Revenue Code that is funded through a profit sharing agreement and voluntary employee contributions.  Annual contributions, included in employee benefit expense, totaled $258,000 and $479,000 for the years ended December 31, 2024 and 2023, respectively.

Note 10. Other Benefit Plans

The Company is the owner and beneficiary of BOLI policies on certain current and former employees. Cash value totaled $8.8 million and $8.7 million at December 31, 2024 and 2023, respectively. Income on insurance investment totaled $0.2 million for years ended 2024 and 2023.

The Bank has an unfunded grantor trust, as part of a change in control severance plan, covering substantially all employees.  Participants in the plan are entitled to cash severance benefits upon termination of employment, for any reason other than just cause, should a “change in control” of the Company occur.

F - 35

Table of Contents

Note 11. Other Noninterest Expenses

Other noninterest expenses include the following:

​

​

​

​

​

​

​

​

​

​

    

Year Ended December 31,

    

​

​

2024

    

2023

​

(dollars in thousands)

​

​

​

​

​

​

​

Loan related expenses

​

$

165

​

$

164

​

Other ATM expenses

​

 

33

​

 

34

​

Directors and other fees

​

​

264

​

​

277

​

Postage, delivery and courier expenses

​

​

77

​

​

83

​

Office supplies expenses

​

​

35

​

​

44

​

Credit report fees

​

​

34

​

​

21

​

Dues and subscription fees

​

​

93

​

​

94

​

Examination and assessment fees

​

 

43

​

 

47

​

Federal Reserve and correspondent bank services

​

 

28

​

 

28

​

Liability insurance

​

 

141

​

 

124

​

Provision (release) for unfunded commitments

​

​

111

​

​

(4)

​

Card services

​

​

108

​

​

111

​

NASDAQ registration

​

​

50

​

​

50

​

Investor services

​

​

32

​

​

23

​

Other

​

 

184

​

 

107

​

​

​

 

  

​

 

  

​

Total Other Noninterest Expense

​

$

1,398

​

$

1,203

​

​

​

Note 12. Commitments and Contingencies

Financial instruments:

The Bank is a party to financial instruments in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit, which involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidated financial statements.

Outstanding loan commitments, unused lines of credit and letters of credit are as follows:

​

​

​

​

​

​

​

​

​

    

December 31,

    

​

​

2024

    

2023

​

(dollars in thousands)

​

​

​

​

​

​

​

Loan commitments:

​

 

  

​

 

  

​

Other mortgage loans

​

$

2,239

​

$

8,952

​

​

​

​

​

​

​

​

​

Unused lines of credit:

​

 

  

​

 

  

​

Home-equity lines

​

$

18,658

​

$

10,817

​

Commercial lines

​

 

9,913

​

 

12,862

​

Unsecured consumer lines

​

 

522

​

 

532

​

​

​

 

  

​

 

  

​

​

​

$

29,093

​

$

24,210

​

​

​

 

  

​

 

  

​

Letters of credit:

​

$

255

​

$

45

​

​

Loan commitments and lines of credit are agreements to lend to customers as long as there is no violation of any conditions of the contracts. Loan commitments generally have interest rates fixed at current market amounts, fixed expiration dates, and may require payment of a fee. Lines of credit generally have variable interest rates. Many of the loan commitments and lines of credit are expected to expire without being drawn upon; accordingly, the total

F - 36

Table of Contents

commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral or other security obtained, if deemed necessary by the Bank upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include deposits held in financial institutions, U.S. Treasury securities, other marketable securities, accounts receivable, inventory, property and equipment, personal residences, income-producing commercial properties, and land under development. Personal guarantees are also obtained to provide added security for certain commitments.

Letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to guarantee the installation of real property improvements and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Bank holds collateral and obtains personal guarantees supporting those commitments for which collateral or other securities is deemed necessary.

The Bank’s exposure to credit loss in the event of nonperformance by the customer is the contractual amount of the commitment.  Loan commitments, lines of credit, and letters of credit are made on the same terms, including collateral, as outstanding loans.  As of December 31, 2024 and December 31, 2023, the Bank accrued $584,000 and $473,000, respectively, as a reserve for losses on unfunded commitments related to these financial instruments with off balance sheet risk, which is included in other liabilities.

Note 13. Stockholders’ Equity

Restrictions on Dividends

The Company’s ability to pay dividends to its stockholders may be affected by both general corporate law considerations and policies of the Federal Reserve applicable to bank holding companies. Banking regulations limit the amount of dividends that may be paid without prior approval of the Bank’s regulatory agencies. Regulatory approval is required to pay dividends that exceed the Bank’s net profits for the current year plus its retained net profits for the preceding two years.

Retained earnings from which dividends may not be paid without prior approval totaled approximately $22.4 million at December 31, 2024 and $21.2 million at December 31, 2023 based on the earnings restrictions and minimum capital ratio requirements noted below.

The payment of dividends by any financial institution or its holding company is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations, and a financial institution generally is prohibited from paying any dividends if, following payment thereof, the institution would be undercapitalized. Notwithstanding the availability of funds for dividends, however, the Federal Reserve may prohibit the payment of any dividends by the subsidiary banks if the Federal Reserve determines such payment would constitute an unsafe or unsound practice.

Employee Stock Purchase Benefit Plans

The Company has a stock-based compensation plan, which is described below. There were no options issued or activity under this plan since August 2007.

Employees who have completed one year of service are eligible to participate in the employee stock purchase plan. The number of shares of common stock granted under options will bear a uniform relationship to compensation. The plan allows employees to buy stock under options granted at 85% of the fair market value of the stock on the date of grant. Options are vested when granted and will expire no later than 27 months from the grant date or upon termination of employment.

At December 31, 2024, shares of common stock reserved for issuance under the plan totaled 25,739.

The Board of Directors may suspend or discontinue the plan at its discretion.

F - 37

Table of Contents

Dividend Reinvestment and Stock Purchase Plan

The Company’s dividend reinvestment and stock purchase plan allows all participating stockholders the opportunity to receive additional shares of common stock in lieu of cash dividends at 95% of the fair market value on the dividend payment date.

During 2024 and 2023, shares of common stock purchased under the plan totaled 18,054 and 17,581, respectively. At December 31, 2024, shares of common stock reserved for issuance under the plan totaled 167,896.

The Board of Directors may suspend or discontinue the plan at its discretion.

Stockholder Purchase Plan

The Company’s stockholder purchase plan allows participating stockholders the option to purchase newly issued shares of common stock. The Board of Directors shall determine the number of shares that may be purchased pursuant to options. Options granted will expire no later than three months from the grant date. Each option will entitle the stockholder to purchase one share of common stock, and will be granted in proportion to stockholder share holdings. At the discretion of the Board of Directors, stockholders may be given the opportunity to purchase unsubscribed shares.

There was no activity under this plan since June 23, 2000.

At December 31, 2024, shares of common stock reserved for issuance under the plan totaled 183,348.

The Board of Directors may suspend or discontinue the plan at its discretion.

Under all three plans, options granted, exercised, and expired, shares issued and reserved, and grant prices have been restated for the effects of any stock dividends or stock splits.

Regulatory Capital Requirements

The Bank’s primary regulator is the Federal Deposit Insurance Corporation (“FDIC”) and is subject to regulation, supervision and regular examination by the Maryland Commissioner of Financial Regulation (the “Commissioner”) and the FDIC. The Company is subject to regulation, examination and supervision by the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended (the “BHCA”), and the regulations of the Federal Reserve Board.

On January 1, 2015, the Bank became subject to the new Basel III Capital Rules with full compliance with all of the final rule's requirements phased in over a multi-year schedule, to be fully phased-in by January 1, 2019. However, the new Basel III Capital Rules do not apply to the Company since it is a small bank holding company with less than $1.0 billion in total consolidated assets. In July 2013, the final rules were published establishing a new comprehensive capital framework for U.S. banking organizations. The rules implement the Basel Committee’s December 2010 framework known as “Basel III” for strengthening international capital standards as well as certain provisions of the Dodd-Frank Act. The Basel III Capital Rules substantially revise the risk-based capital requirements applicable to bank holding companies and depository institutions compared to the previous U.S. risk-based capital rules. The Basel III Capital Rules define the components of capital and address other issues affecting the numerator in banking institutions’ regulatory capital ratios. The Basel III Capital Rules also address risk weights and other issues affecting the denominator in banking institutions’ regulatory capital ratios and replace the existing risk-weighting approach with a more risk-sensitive approach. The Basel III Capital Rules also implement the requirements of Section 939A of the Dodd-Frank Act to remove references to credit ratings from the federal banking agencies’ rules.

Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. The Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting principles. The Bank’s capital amounts

F - 38

Table of Contents

and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

The rules include a new common equity Tier 1 capital to risk-weighted assets minimum ratio of 4.5%, raise the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0%, require a minimum ratio of Total Capital to risk-weighted assets of 8.0%, and require a minimum Tier 1 leverage ratio of 4.0%. A new capital conservation buffer is also established above the regulatory minimum capital requirements. This capital conservation buffer began its phase-in period beginning January 1, 2016 at 0.625% of risk-weighted assets and increased each subsequent year by an additional 0.625% until reaching its final level of 2.5% on January 1, 2019. The capital conservation buffer is designed to absorb losses during periods of economic stress and, as detailed above, effectively increases the minimum required risk-weighted capital ratios. Strict eligibility criteria for regulatory capital instruments were also implemented under the final rules.

The final rules also revised the definition and calculation of Tier 1 capital, Total Capital, and risk-weighted assets. The Common Equity Tier 1, Tier 1 and Total Capital ratios are calculated by dividing the respective capital amounts by risk-weighted assets. Risk-weighted assets are calculated based on regulatory requirements and include total assets, with certain exclusions, allocated by risk weight category, and certain off-balance-sheet items, among other things. The leverage ratio is calculated by dividing Tier 1 capital by adjusted quarterly average total assets, which exclude goodwill and other intangible assets, among other things.

As of December 31, 2024 and 2023, the Bank was well-capitalized under the regulatory framework for prompt corrective action under the new Basel III Capital Rules. Management believes, as of December 31, 2024 and 2023, that the Bank met all capital adequacy requirements to which they were subject. The following table presents actual and required capital ratios as of December 31, 2024 and 2023 for the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of December 31, 2024 and December 31, 2023 based on the phased-in provisions of the Basel III Capital Rules. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

The Company and Bank are subject to regulatory capital requirements administered by federal banking agencies. Management has determined that the Company’s risk-based capital ratios are not materially different than the Bank’s and are not reflected in the table below.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

To Be Well Capitalized

 

​

​

​

​

​

​

​

To Be Considered

​

Under Prompt Corrective

 

​

​

Actual

​

Adequately Capitalized

​

Action Provisions

 

(dollars in thousands)

    

Amount

    

Ratio

    

Amount

    

Ratio

    

Amount

    

Ratio

 

As of December 31, 2024

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Common Equity Tier 1 Capital

​

$

36,481

​

15.15

%

$

10,837

​

4.50

%

$

15,653

​

6.50

%

Total Risk-Based Capital

​

$

39,496

​

16.40

%

$

19,265

​

8.00

%

$

24,082

​

10.00

%

Tier 1 Risk-Based Capital

​

$

36,481

 

15.15

%

$

14,449

 

6.00

%

$

19,265

 

8.00

%

Tier 1 Leverage

​

$

36,481

​

9.97

%

$

14,640

​

4.00

%

$

18,300

​

5.00

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

To Be Well Capitalized

 

​

​

​

​

​

​

​

To Be Considered

​

Under Prompt Corrective

 

​

​

Actual

​

Adequately Capitalized

​

Action Provisions

 

(dollars in thousands)

    

Amount

    

Ratio

    

Amount

    

Ratio

    

Amount

    

Ratio

 

As of December 31, 2023

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Common Equity Tier 1 Capital

​

$

37,975

​

17.37

%

$

9,840

​

4.50

%

$

14,213

​

6.50

%

Total Risk-Based Capital

​

$

40,237

​

18.40

%

$

17,493

​

8.00

%

$

21,867

​

10.00

%

Tier 1 Risk-Based Capital

​

$

37,975

 

17.37

%

$

13,120

 

6.00

%

$

17,493

 

8.00

%

Tier 1 Leverage

​

$

37,975

​

10.76

%

$

14,113

​

4.00

%

$

17,641

​

5.00

%

​

​

​

F - 39

Table of Contents

Note 14. Earnings Per Common Share

The calculation of net income per common share for the years ended December 31, 2024 and 2023 are as follows:

​

​

​

​

​

​

​

​

​

​

​

Year Ended

​

​

​

December 31, 

​

​

    

2024

    

2023

    

Basic earnings per share:

​

​

​

​

​

​

​

Net income

​

$

(111,563)

​

$

1,429,094

​

Weighted average common shares outstanding

​

 

2,893,871

​

 

2,873,500

​

Basic net income per share

​

$

(0.04)

​

$

0.50

​

​

Diluted earnings per share calculations were not required for 2024 and 2023 as there were no options outstanding at December 31, 2024 and 2023.

Note 15. Fair Values of Financial Instruments

ASC Topic 825, Disclosure about Fair Value of Financial Instruments, requires the disclosure of the estimated fair values of financial instruments. Quoted market prices, where available, are shown as estimates of fair values. Because no quoted market prices are available for a significant part of the Company’s financial instruments, the fair values of such instruments have been derived based on the amount and timing of future cash flows and estimated discount rates.

Present value techniques used in estimating the fair value of the Company’s financial instruments are significantly affected by the assumptions used. Fair values derived from using present value techniques are not substantiated by comparisons to independent markets, and in many cases, could not be realized in immediate settlement of the instruments.

ASC Topic 825 excludes certain financial instruments and all nonfinancial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company.

The following table presents the estimated fair value and the related carrying values of the Company’s financial instruments as December 31, 2024 and 2023. Items that are not financial instruments are not included.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2024

​

December 31, 2023

​

(dollars in thousands)

​

Carrying

​

Fair

​

Carrying

​

Fair

​

​

    

Amount

    

Value

    

Amount

    

Value

    

Financial assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and due from banks

​

$

2,012

​

$

2,012

​

$

1,940

​

$

1,940

​

Interest-bearing deposits in other financial institutions

​

 

22,134

​

 

22,134

​

 

12,189

​

 

12,189

​

Federal funds sold

​

 

318

​

 

318

​

 

1,112

​

 

1,112

​

Investment securities available for sale

​

 

107,949

​

 

107,949

​

 

139,427

​

 

139,427

​

Investments in restricted stock

​

​

1,671

​

​

1,671

​

​

1,217

​

​

1,217

​

Ground rents

​

 

123

​

 

123

​

 

130

​

 

130

​

Loans, less allowance for credit losses

​

 

202,380

​

 

191,685

​

 

174,150

​

 

161,802

​

Accrued interest receivable

​

 

1,345

​

 

1,345

​

 

1,192

​

 

1,192

​

Cash value of life insurance

​

 

8,834

​

 

8,834

​

 

8,657

​

 

8,657

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial liabilities:

​

​

​

​

​

​

​

​

​

​

​

​

​

Deposits

​

 

309,189

​

 

260,368

​

 

300,067

​

 

252,707

​

Short-term borrowings

​

​

30,000

​

​

30,053

​

​

30,000

​

​

30,000

​

Accrued interest payable

​

 

153

​

 

153

​

 

366

​

 

366

​

Unrecognized financial instruments:

​

​

​

​

​

​

​

​

​

​

​

​

​

Commitments to extend credit

​

 

31,332

​

 

31,332

​

 

33,162

​

 

33,162

​

Standby letters of credit

​

 

255

​

 

255

​

 

45

​

 

45

​

​

F - 40

Table of Contents

The following table presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments.

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Carrying

​

Fair

​

​

​

​

​

​

​

​

​

December 31, 2024

    

Amount

    

Value

    

Level 1

    

​

Level 2

    

Level 3

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial instruments - Assets

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash and cash equivalents

​

$

24,464

​

$

24,464

​

$

24,464

 

$

—

​

$

—

Loans receivable, net

​

 

202,380

​

 

191,685

​

 

—

 

 

—

​

 

191,685

Cash value of life insurance

​

 

8,834

​

 

8,834

​

 

—

 

 

8,834

​

 

—

Financial instruments - Liabilities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Deposits

​

 

309,189

​

 

260,368

​

 

25,545

 

 

234,823

​

 

—

Short-term debt

​

 

30,000

​

 

30,053

​

 

—

 

 

30,053

​

 

—

​

For purposes of the disclosures of estimated fair value, the following assumptions were used.

Loans. The estimated fair value for loans is determined by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Investment securities. Fair values for investment securities are based on quoted market prices, where applicable. When quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.

Deposits. The estimated fair value of deposits with no stated maturity, such as noninterest-bearing demand deposits, savings, NOW accounts and money market accounts, is equal to the amount payable on demand at the reporting date (that is, their carrying amounts). The fair value of certificates of deposit is based on the rates currently offered for deposits of similar maturities. The fair value estimates do not include the benefit that results from the low-cost funding provided by the deposit liabilities compared to the cost of borrowing funds in the market.

Borrowings. The estimated fair value approximates carrying value for short-term borrowings. The fair value of long-term fixed rate borrowings is estimated by discounting future cash flows using current interest rates currently offered for similar financial instruments over the same maturities.

Other assets and liabilities. The estimated fair values for cash and due from banks, interest-bearing deposits in other financial institutions, Federal funds sold, accrued interest receivable and payable, and short-term borrowings are considered to approximate cost because of their short-term nature. Other assets and liabilities of the Bank that are not defined as financial instruments are not included in the above disclosures, such as property and equipment. In addition, non-financial instruments typically not recognized in the financial statements nevertheless may have value but are not included in the above disclosures. These include, among other items, the estimated earnings power of core deposit accounts, the trained work force, customer goodwill, and similar items.

Note 16. Fair Value Measurements

The Company follows ASC Topic 820, Fair Value Measurements which provides a framework for measuring and disclosing fair value under generally accepted accounting principles. ASC Topic 820 requires disclosures about the fair value of assets and liabilities recognized in the balance sheet in periods subsequent to initial recognition, whether the measurements are made on a recurring basis or on a nonrecurring basis.

ASC Topic 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC Topic 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value.

F - 41

Table of Contents

The Fair Value Hierarchy

Level 1 – Valuation is based on quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 assets and liabilities generally include debt and equity securities that are traded in an active exchange market. Valuations are obtained from readily available pricing sources for market transactions involving identical assets and liabilities.

Level 2 – Valuation is based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. The valuation may be based on quoted prices for similar assets and liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability.

Level 3 – Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which determination of fair value requires significant management judgment or estimation.

In determining the appropriate levels, the Company performs a detailed analysis of assets and liabilities that are subject to ASC Topic 820. The Bank’s securities available for sale are the only financial instruments subject to fair value measurements on a recurring basis. The Bank may also be required, from time to time, to measure certain other financial and non-financial assets and liabilities at fair value on a non-recurring basis in accordance with GAAP.

Fair value measurements on a recurring and non-recurring basis at December 31, 2024 and 2023 are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair

(dollars in thousands)

    

Level 1

    

Level 2

    

Level 3

    

Value

December 31, 2024

​

​

​

​

​

​

​

​

​

​

​

​

Recurring:

​

​

​

​

​

​

​

​

​

​

​

​

Securities available for sale

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Treasury

​

$

—

​

$

—

​

$

—

​

$

—

State and Municipal

​

 

11,182

​

 

32,411

​

 

—

​

 

43,593

Mortgaged-backed

​

 

3,006

​

 

71,191

​

 

—

​

 

74,197

Corporate securities

​

​

—

​

​

1,341

​

​

—

​

​

1,341

​

​

​

​

​

​

​

​

​

​

​

​

​

Non-recurring:

​

​

​

​

​

​

​

​

​

​

​

​

Maryland Financial Bank stock

​

 

—

​

 

—

​

 

—

​

 

—

Impaired loans

​

 

—

​

 

—

​

 

994

​

 

994

​

​

$

14,188

​

$

104,943

​

$

994

​

$

120,125

December 31, 2023

​

​

​

​

​

​

​

​

​

​

​

​

Recurring:

​

​

​

​

​

​

​

​

​

​

​

​

Securities available for sale

​

​

​

​

​

​

​

​

​

​

​

​

U.S. Treasury

​

$

6,945

​

$

—

​

$

—

​

$

6,945

State and Municipal

​

 

—

​

​

33,729

​

​

—

​

​

33,729

Mortgaged-backed

​

 

531

​

 

96,938

​

 

—

​

 

97,469

Corporate securities

​

​

—

​

 

1,284

​

 

—

​

 

1,284

​

​

​

​

​

​

​

​

​

​

​

​

​

Non-recurring:

​

​

​

​

​

​

​

​

​

​

​

​

Impaired loans

​

 

—

​

 

—

​

 

398

​

 

398

​

​

$

7,476

​

$

131,951

​

$

398

​

$

139,825

​

Securities available for sale and interest rate swaps are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments.

F - 42

Table of Contents

Measured on a Non-Recurring Basis:

Financial Assets and Liabilities

The Bank is predominantly a cash flow lender with real estate serving as collateral on a majority of loans. Loans which are deemed to be impaired and foreclosed real estate assets are primarily valued on a nonrecurring basis at the fair values of the underlying real estate collateral. The Bank determines such fair values from independent appraisals. Based on these appraisals, management has applied a specific valuation allowance allocation of $139,000 and $201,000 in 2024 and 2023, respectively, to the impaired loans, which management considers to be level 3 inputs.

Fair Value Measurements

We obtain fair values for our impaired loans through a variety of data points and mostly rely on appraisals from independent appraisers. These appraisals do not include an inside inspection of the property as our loan documents do not require the borrower to allow access to the property. Therefore, the most significant unobservable inputs are the details of the amenities included within the property and the condition of the property. Further, we cannot always accurately assess the amount of time it takes to gain ownership of our collateral through the foreclosure process and the damage, as well as potential looting, of the property further decreasing our value.

We typically get independent appraisals of properties within three months from the time we determine there may be a collateral shortfall from an impaired loan. The appraisals are typically updated every 12 months from the independent appraiser and more frequently if we feel material changes in value may have occurred for this specific property. During interim periods, typically at the end of each calendar quarter, we review other data points such as a comparable from other like properties or changes in tax assessment values.

Non-Financial Assets and Non-Financial Liabilities

Application of ASC Topic 820 to non-financial assets and non-financial liabilities became effective January 1, 2009. The Corporation has no non-financial assets or non-financial liabilities measured at fair value on a recurring basis. Certain non-financial assets and non-financial liabilities typically measured at fair value on a non-recurring basis include foreclosed assets (upon initial recognition or subsequent impairment), non-financial assets and non-financial liabilities measured at fair value in the second step of a goodwill impairment test, and intangible assets and other non-financial long-lived assets measured at fair value for impairment assessment.

Foreclosed real estate, which are considered to be non-financial assets, have been valued using a market approach.  The values were determined using market prices of similar current real estate assets in the same geographical area, which the Bank considers to be level 2 inputs.

Note 17. Revenue Recognition

On January 1, 2018, the Company adopted ASU No. 2014-09 “Revenue from Contracts with Customers” (Topic 606) and all subsequent ASUs that modified Topic 606. The implementation of the new standard did not have a material impact on the measurement or recognition of revenue; as such, a cumulative effect adjustment to opening retained earnings was not deemed necessary. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under Topic 605.

Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. Topic 606 is applicable to noninterest revenue streams such as deposit related fees, interchange fees and merchant income. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Substantially all of the Company’s revenue is generated from contracts with customers. Noninterest revenue streams in-scope of Topic 606 are discussed below.

Service Charges on Deposit Accounts. Service charges on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders, and other

F - 43

Table of Contents

deposit account related fees. The Company’s performance obligation for account analysis fees and monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided.

Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or at the end of the month through a direct charge to customers’ accounts.

Other Noninterest Income. Other noninterest income consists of: fees, exchange, other service charges, safety deposit box rental fees, and other miscellaneous revenue streams. Fees and other service charges are primarily comprised of debit income, ATM fees, merchant services income, and other service charges. Debit card income is primarily comprised of interchange fees earned whenever the Company’s debit cards are processed through card payment networks. ATM fees are primarily generated when a Company cardholder uses a non-Company ATM or a non-Company cardholder uses a Company ATM. Merchant services income mainly represents fees charged to merchants to process their debit card transactions, in addition to account management fees. Other service charges include revenue from processing wire transfers, bill pay service, cashier’s checks, and other services. The Company’s performance obligation for fees, exchange, and other service charges are largely satisfied, and related revenue recognized, when the services are rendered or upon completion. Payment is typically received immediately or in the following month. Safe deposit box rental fees are charged to the customer on an annual basis and recognized upon \receipt of payment.

​

​

​

Note 18. Parent Company Financial Information

The Balance Sheets, Statements of Income, and Statements of Cash Flows for Glen Burnie Bancorp (Parent Only) are presented below:

___________________________________________Balance Sheets________________________________________

​

​

​

​

​

​

​

​

December 31, 

    

2024

    

2023

    

(dollars in thousands)

​

​

​

Assets

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash

​

$

32

​

$

88

​

Investment in The Bank of Glen Burnie

​

 

17,726

​

 

19,227

​

Other assets

​

 

59

​

 

10

​

​

​

​

​

​

​

​

​

Total assets

​

$

17,817

​

$

19,325

​

​

​

​

​

​

​

​

​

Liabilities and Stockholders’ Equity

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Stockholders’ equity:

​

​

​

​

​

​

​

Common stock

​

 

2,901

​

 

2,883

​

Surplus

​

 

11,037

​

 

10,964

​

Retained earnings

​

 

22,882

​

 

23,859

​

Accumulated other comprehensive loss, net of benefits

​

 

(19,003)

​

 

(18,381)

​

Total stockholders’ equity

​

 

17,817

​

 

19,325

​

​

​

​

​

​

​

​

​

Total liabilities and stockholders’ equity

​

$

17,817

​

$

19,325

​

​

F - 44

Table of Contents

__________________________________________Statements of Income___________________________________

​

​

​

​

​

​

​

​

​

Year Ended December 31, 

    

2024

    

2023

    

(dollars in thousands)

​

​

​

​

​

​

​

​

​

​

​

Dividends and distributions from subsidiary

​

$

990

​

$

1,210

​

Other expenses

​

 

(282)

​

 

(205)

​

Income before income tax benefit and equity in undistributed net income of subsidiary

​

 

708

​

 

1,005

​

Income tax benefit

​

 

59

​

 

43

​

Change in undistributed equity of subsidiary

​

 

(879)

​

 

381

​

​

​

​

​

​

​

​

​

Net (loss) income

​

$

(112)

​

$

1,429

​

​

___________________________________Statements of Cash Flows_______________________________________

​

​

​

​

​

​

​

​

Year Ended December 31, 

    

2024

    

2023

    

​

​

(dollars in thousands)

​

Cash flows from operating activities:

​

​

​

​

​

​

​

Net (loss) income

​

$

(112)

​

$

1,429

​

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

​

​

​

​

​

​

​

Increase in other assets

​

 

(48)

​

 

(8)

​

Change in undistributed equity of subsidiary

​

 

879

​

 

(381)

​

​

​

​

​

​

​

​

​

Net cash provided by operating activities

​

 

719

​

 

1,040

​

​

​

​

​

​

​

​

​

Cash flows from financing activities:

​

​

​

​

​

​

​

Proceeds from dividend reinvestment plan

​

 

91

​

 

120

​

Dividends paid

​

 

(865)

​

 

(1,149)

​

​

​

​

​

​

​

​

​

Net cash used in financing activities

​

 

(774)

​

 

(1,029)

​

​

​

​

​

​

​

​

​

(Decrease) increase in cash

​

 

(55)

​

 

11

​

​

​

​

​

​

​

​

​

Cash, beginning of year

​

 

88

​

 

77

​

​

​

​

​

​

​

​

​

Cash, end of year

​

$

32

​

$

88

​

​

​

​

​

F - 45

Table of Contents

Note 19. Quarterly Results of Operations (Unaudited)

The following is a summary of consolidated unaudited quarterly results of operations:

__________________________________________2024__________________________________

​

​

​

​

​

​

​

​

​

​

​

​

​

​

(dollars in thousands,

​

Three months ended

except per share amounts)

    

December 31, 

    

September 30, 

    

June 30, 

    

March 31, 

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

3,955

​

$

3,959

​

$

3,893

​

$

3,405

Interest expense

​

 

1,192

​

 

1,138

​

 

1,108

​

 

833

Net interest income

​

 

2,763

​

​

2,821

​

​

2,785

​

​

2,572

Provision for credit losses

​

 

71

​

 

79

​

 

525

​

 

169

(Loss) income before income taxes

​

 

(95)

​

 

79

​

 

(392)

​

 

(229)

Net (loss) income

​

 

(40)

​

 

129

​

 

(204)

​

 

3

Net (loss) income per share (basic and diluted)

​

$

(0.02)

​

$

0.04

​

$

(0.07)

​

$

—

​

__________________________________________2023__________________________________

​

​

​

​

​

​

​

​

​

​

​

​

​

(dollars in thousands,

​

Three months ended

except per share amounts)

    

December 31, 

    

September 30, 

    

June 30, 

    

March 31, 

​

​

​

​

​

​

​

​

​

​

​

​

​

Interest income

​

$

3,435

​

$

3,350

​

$

3,267

​

$

3,285

Interest expense

​

 

544

​

 

398

​

 

153

​

 

107

Net interest income

​

 

2,891

​

​

2,952

​

​

3,114

​

​

3,178

Provision for credit losses

​

 

103

​

 

(92)

​

 

127

​

 

(42)

Income before income taxes

​

 

140

​

 

539

​

 

301

​

 

521

Net income

​

 

167

​

 

552

​

 

275

​

 

435

Net income per share (basic and diluted)

​

$

0.06

​

$

0.19

​

$

0.10

​

$

0.15

​

​

Note 20. Subsequent Event

​

On January 10, 2025, The Bank of Glen Burnie (the “Bank”), a wholly owned subsidiary of Glen Burnie Bancorp, and Andrew J. Hines, Executive Vice President of the Bank since 2017 and Chief Lending Officer of the Bank since 2014, terminated their relationship effective January 10, 2025.

​

​

​

F - 46