Glen Burnie Bancorp Updates on Non-Performing Commercial Real Estate Loans
The following is culled from the 10-K Filing by Glen Burnie Bancorp. A link to the entire 10-K is available at the end of this excerpt:
For the year ended December 31, 2009, interest of $105,365 would have been accrued on non-accrual loans if such loans had been current in accordance with their original terms. During that period, interest on non-accrual loans was not included in income. $2,993,569, or 99%, of the Bank's total $3,016,727 non-accrual loans at December 31, 2009 were attributable to 12 borrowers. One of these borrowers was in bankruptcy at that date. Because of the legal protections afforded to borrowers in bankruptcy, collections on such loans are difficult and the Bank anticipates that such loans may remain delinquent for an extended period of time. Three of these loans are secured with commercial real estate collateral which should repay some or all of the active principal balance on the loans.
At December 31, 2009, there were loans outstanding, totaling $6,496,910, not reflected in the above table as to which known information about the borrower's possible credit problems caused management to have serious doubts as to the ability of the borrowers to comply with present loan repayment terms. These loans consist of loans which were not 90 days or more past due but where the borrower is in bankruptcy or has a history of delinquency or the loan to value ratio is considered excessive due to deterioration of the collateral or other factors.
At December 31, 2009, the Company had $25,000 in real estate acquired in partial or total satisfaction of debt, compared to $550,000 and $50,000 in such properties at each of December 31, 2008 and 2007. This decrease resulted from the sale in 2009 of OREO valued at $550,000, which was acquired in 2008. The $25,000 balance at December 31, 2009 reflects the deposit on OREO acquired during 2009, which is awaiting ratification by the court. All such properties are recorded at the lower of cost or fair value at the date acquired and carried on the balance sheet as other real estate owned. Losses arising at the date of acquisition are charged against the allowance for credit losses. Subsequent write-downs that may be required and expense of operation are included in non-interest expense. Gains and losses realized from the sale of other real estate owned are included in non-interest income or expense.
GLEN BURNIE BANCORP 10-K
