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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0001116354-02-000023.txt : 20020807
<SEC-HEADER>0001116354-02-000023.hdr.sgml : 20020807
<ACCEPTANCE-DATETIME>20020807145339
ACCESSION NUMBER:		0001116354-02-000023
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20020630
FILED AS OF DATE:		20020807

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GLEN BURNIE BANCORP
		CENTRAL INDEX KEY:			0000890066
		STANDARD INDUSTRIAL CLASSIFICATION:	STATE COMMERCIAL BANKS [6022]
		IRS NUMBER:				521782444
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24047
		FILM NUMBER:		02721697

	BUSINESS ADDRESS:	
		STREET 1:		101 CRAIN HWY SE
		CITY:			GLEN BURNIE
		STATE:			MD
		ZIP:			21227
		BUSINESS PHONE:		4107663300

	MAIL ADDRESS:	
		STREET 1:		101 CRAIN HWY SE
		CITY:			GLEN BURNIE
		STATE:			MD
		ZIP:			21227
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>gbb6300210q.txt
<DESCRIPTION>GLEN BURNIE BANCORP 6/30/02 10-Q
<TEXT>
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-Q

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

                  For the Quarterly period ended June 30, 2002

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

                         Commission file number 0-24047


                              GLEN BURNIE BANCORP

             (Exact name of registrant as specified in its charter)

Maryland                                                         52-1782444
(State or other jurisdiction of                               (I.R.S. Employer
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

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

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 X   No
                                      ---     ---

At July 26, 2002, the number of shares  outstanding of the  registrant's  common
stock was 1,669,907.



<PAGE>

                               TABLE OF CONTENTS




Part I - Financial Information                                             Page
                                                                           ----

         Item 1.    Financial Statements:
         -------
                    Condensed Consolidated Balance Sheets,
                    June 30, 2002 (unaudited) and December
                    31, 2001 (audited)                                       3

                    Condensed Consolidated Statements of Income
                    for the Three and Six Months Ended June 30, 2002
                    and 2001 (unaudited)                                     4

                    Condensed Consolidated Statements of Comprehensive
                    Income for the Three and Six Months Ended
                    Months Ended June 30, 2002 and 2001 (unaudited)          5

                    Condensed Consolidated Statements of Cash
                    Flows for the Six Months Ended June 30, 2002
                    and 2001 (unaudited)                                     6

                    Notes to Unaudited Condensed Consolidated
                    Financial Statements                                     7

         Item 2.    Management's Discussion and Analysis of
         -------    Financial Condition and Results of Operations            9

         Item 3.    Quantitative And Qualitative Disclosure
         -------    About Market Risk                                       13




Part II - Other Information

         Item 4.    Submission of Matters to a Vote of
                    Security Holders                                        14
         -------

         Item 6.    Exhibits and Reports on Form 8-K                        14
         -------

<PAGE>

<TABLE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                      GLEN BURNIE BANCORP AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (Dollars in Thousands)
                                   (Unaudited)

<CAPTION>
                                                                                        June 30, 2002       December 31,
                                                                                        -------------       ------------
                                     ASSETS                                              (unaudited)            2001
                                                                                                                ----

<S>                                                                                         <C>              <C>
Cash and due from banks                                                                     $7,845           $10,888
Interest-bearing deposits in other financial institutions                                      377             1,879
Federal funds sold                                                                           5,672             5,453
                                                                                            ------           -------
       Cash and cash equivalents                                                            13,894            18,220
Certificates of deposit in other financial institutions                                        100               100
Investment securities available for sale, at fair value                                     71,327            55,548
Investment securities held to maturity, at cost
   (fair value June 30: $14,140;  December 31: $16,881)                                     13,669            16,517
Federal Home Loan Bank stock, at cost                                                          703               652
Common Stock in the Glen Burnie Statutory Trust I                                              155               155
Loans, less allowance for credit losses
   (June 30: $2,766; December 31: $2,938)                                                  161,286           164,569
Premises and equipment, at cost, less accumulated depreciation                               3,766             3,887
Other real estate owned                                                                        417               420
Other assets                                                                                 3,159             3,294
                                                                                          --------          --------
                   Total assets                                                           $268,476          $263,362
                                                                                          ========          ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
Deposits                                                                                  $233,275          $229,307
Short-term borrowings                                                                          630               882
Long-term borrowings                                                                         7,263             7,275
Other liabilities                                                                            2,150             2,881
                                                                                          --------          --------
                   Total liabilities                                                       243,318           240,345
                                                                                          --------          --------

Guaranteed preferred beneficial interests in Glen Burnie Bancorp
   junior subordinated debentures                                                            5,155             5,155
                                                                                          --------          --------

STOCKHOLDERS' EQUITY:
Common stock, par value $1, authorized 15,000,000 shares;
   Issued and outstanding: June 30: 1,669,907 shares;
   December 31: 1,663,560 shares                                                             1,670             1,664
Surplus                                                                                     10,527            10,390
Retained earnings                                                                            7,212             5,971
Accumulated other comprehensive income (loss), net of tax                                      594             (163)
                                                                                          --------          --------
                   Total stockholders' equity                                               20,003            17,862
                                                                                          --------          --------
                   Total liabilities and stockholders' equity                             $268,476          $263,362
                                                                                          ========          ========

                See accompanying notes to condensed consolidated
                             financial statements.


</TABLE>

                                       3
<PAGE>



<TABLE>
                      GLEN BURNIE BANCORP AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                (Dollars in Thousands, Except Per Share Amounts)
                                  (Unaudited)



<CAPTION>
                                                                  Three Months Ended June 30      Six Months Ended June 30
                                                                  --------------------------      ------------------------
                                                                      2002           2001            2002        2001
                                                                      ----           ----            ----        ----
Interest income on:
<S>                                                                 <C>             <C>             <C>            <C>
   Loans, including fees                                            $3,091          $3,249          $6,206         $6,535
   U.S. Treasury and U.S. Government agency securities                 674             651           1,279          1,293
   State and Municipal securities                                      281             167             539            291
   Other                                                               132             236             275            475
                                                                    ------          ------          ------         ------
       Total interest income                                         4,178           4,303           8,299          8,594
                                                                    ------          ------          ------         ------

Interest expense on:
   Deposits                                                          1,039           1,384           2,163          2,872
   Short-term borrowings                                                 1               4               3             11
   Long-term borrowings                                                107              73             213            181
   Junior subordinated debentures                                      137             137             273            278
                                                                    ------          ------          ------         ------
       Total interest expense                                        1,284           1,598           2,652          3,342
                                                                    ------          ------          ------         ------

          Net interest income                                        2,894           2,705           5,647          5,252

Provision for credit losses                                              0               0               0              0
                                                                    ------          ------          ------         ------

          Net interest income after provision for credit             2,894           2,705           5,647          5,252
          losses                                                    ------          ------          ------         ------


Other income:
   Service charges on deposit accounts                                 251             248             500            480
   Other fees and commissions                                          148             141             286            282
   Other non-interest income                                             1               9               4             16
   Gain on termination of post-retirement plan                           0               0             764              0
   Gains on investment securities                                        2              29               6             47
                                                                    ------          ------          ------         ------
       Total other income                                              402             427           1,560            825
                                                                    ------          ------          ------         ------

Other expenses:
   Salaries and employee benefits                                    1,494           1,434           2,918          2,825
   Occupancy                                                           146             117             292            281
   Other expenses                                                      894           1,096           1,794          1,887
                                                                    ------          ------          ------         ------
       Total other expenses                                          2,534           2,647           5,004          4,993
                                                                    ------          ------          ------         ------

Income before income taxes                                             762             485           2,203          1,084

Income tax expense                                                     175             108             628            275
                                                                    ------          ------          ------         ------

Net income                                                          $  587          $  377          $1,575         $  809
                                                                    ======          ======          ======         ======

Basic and diluted earnings per share of common stock                $  .35          $  .23          $  .94         $  .50
                                                                    ======          ======          ======         ======

Weighted average shares of common stock outstanding              1,666,052       1,654,051       1,664,911      1,655,578
                                                                 =========       =========       =========      =========
Dividends declared per share of common stock                        $  .10          $  .10          $  .20         $  .20
                                                                    ======          ======          ======         ======

                See accompanying notes to condensed consolidated
                             financial statements.
</TABLE>

                                       4
<PAGE>



<TABLE>
                      GLEN BURNIE BANCORP AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                             (Dollars in Thousands)
                                   (Unaudited)


<CAPTION>
                                                       Three Months Ended June 30      Six Months Ended June 30
                                                       --------------------------      ------------------------
                                                            2002           2001            2002        2001
                                                            ----           ----            ----        ----

<S>                                                         <C>            <C>           <C>           <C>
Net income                                                  $587           $377          $1,575        $809

Other comprehensive income (loss), net of tax

   Unrealized gains (losses) securities:

       Unrealized holding gains (losses) arising
       during period                                         995            (59)            759         100

       Reclassification adjustment for gains
       included in net income                                 (1)           (18)             (2)        (29)
                                                          ------           ----          ------        ----

Comprehensive income                                      $1,581           $300          $2,332        $880
                                                          ======           ====          ======        ====


                See accompanying notes to condensed consolidated
                             financial statements.
</TABLE>

                                       5
<PAGE>


<TABLE>
                      GLEN BURNIE BANCORP AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (Dollars in Thousands)
                                   (Unaudited)


<CAPTION>
                                                                                         Six Months Ended June 30,
                                                                                         -------------------------
                                                                                            2002             2001
                                                                                            ----             ----

Cash flows from operating activities:
<S>                                                                                       <C>                <C>
Net income                                                                                $1,575             $809
Adjustments to reconcile net income to net cash provided by operating activities:
   Depreciation, amortization, and accretion                                                  53              292
   Compensation expense from vested stock options                                             39                0
   Provision for credit losses                                                                 0                0
   Gains on disposals of assets, net                                                          (3)               0
   Changes in assets and liabilities:
      (Increase) decrease in other assets                                                   (411)            (124)
      (Decrease) increase in other liabilities                                              (703)            (759)
                                                                                         -------          -------

Net cash provided by operating activities                                                    550              218
                                                                                         -------          -------

Cash flows from investing activities:
    Maturities of available for sale mortgage-backed securities                            4,687            2,081
    Proceeds from disposals of investment securities                                       4,136            4,500
    Purchases of investment securities                                                   (20,204)         (12,254)
    Purchase of Federal Home Loan Bank stock                                                 (51)               0
    Decrease in loans, net                                                                 3,283            2,340
    Purchases of premises and equipment                                                     (176)            (303)
    Proceeds from sale of other real estate                                                    3                2
                                                                                         -------          -------

Net cash used by investing activities                                                     (8,322)          (3,634)
                                                                                         -------          -------

Cash flows from financing activities:
    Increase in deposits, net                                                              3,968            8,880
    Increase (decrease) in short-term borrowings                                            (252)             360
    Repayment of long-term borrowings                                                        (12)             (11)
    Dividends paid                                                                          (362)            (380)
    Common stock dividends reinvested                                                         72               39
    Issuance of common stock                                                                  32                0
    Repurchase and retirement of common stock                                                  0             (149)
                                                                                         -------          -------

Net cash provided by financing activities                                                  3,446            8,739
                                                                                         -------          -------

Increase (decrease) in cash and cash equivalents                                          (4,326)           5,323

Cash and cash equivalents, beginning of year                                              18,220           15,509
                                                                                         -------          -------

Cash and cash equivalents, end of period                                                 $13,894          $20,832
                                                                                         =======          =======



                See accompanying notes to condensed consolidated
                             financial statements.

</TABLE>

                                       6
<PAGE>


                      GLEN BURNIE BANCORP AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

     The accompanying  unaudited consolidated financial statements were prepared
in accordance with instructions for Form 10-Q and, therefore, do not include all
information  and  notes  necessary  for a  complete  presentation  of  financial
position, results of operations, changes in stockholders' equity, and cash flows
in conformity  with  generally  accepted  accounting  principles.  However,  all
adjustments (consisting only of normal recurring accruals) which, in the opinion
of  management,   are  necessary  for  a  fair  presentation  of  the  unaudited
consolidated   financial  statements  have  been  included  in  the  results  of
operations for the three and six months ended June 30, 2002 and 2001.

     Operating  results for the three and six-month  periods ended June 30, 2002
are not necessarily  indicative of the results that may be expected for the year
ending December 31, 2002.

NOTE 2 - PRIOR YEAR'S ADJUSTMENTS

     The  results  for the three and six months  ended  June 30,  2001 have been
restated to reflect a positive amendment to the Company's post-retirement health
insurance  benefit plan effective  during the first quarter of 2001 and reported
in the Company's  audited  financial  statements for the year ended December 31,
2001.

NOTE 3 - EARNINGS PER SHARE

     Basic  earnings  per share of common  stock are  computed by  dividing  net
earnings by the weighted average number of common shares  outstanding during the
period.  Diluted  earnings per share are  calculated  by  including  the average
dilutive  common stock  equivalents  outstanding  during the  periods.  Dilutive
common equivalent shares consist of stock options, calculated using the treasury
stock method.

<TABLE>
<CAPTION>
                                                                 Three Months Ended         Six Months Ended
                                                                   June 30, 2002             June 30, 2002
                                                                 ------------------         ----------------
    Diluted:
<S>                                                                    <C>                      <C>
      Net income                                                       $ 587,000                $1,575,000
      Weighted average common shares outstanding                       1,666,052                 1,664,911
      Dilutive effect of stock options                                     2,573                     1,286
                                                                       ---------                ----------
      Average common shares outstanding - diluted                      1,668,625                 1,666,197
      Diluted net income per share                                         $0.35                     $0.94

</TABLE>
     Diluted earnings per share calculations were not required for the three and
six months ended June 30, 2001 since there were no options outstanding.

NOTE 4 - EMPLOYEE STOCK PURCHASE BENEFIT PLANS

     The Company has an employee  stock  purchase  compensation  plan.  The Bank
applies  Accounting   Principles  Board  Opinion  ("APB")  No.  25  and  related
Interpretations  in accounting for this plan.  Compensation  cost of $39,000 has
been  recognized  in the second  quarter of 2002. If  compensation  cost for the
Company's  stock-based  compensation  plan had been determined based on the fair
value at the grant date for awards under this plan  consistent  with the methods
outlined in SFAS No. 123 Accounting for Stock-Based Compensation, there would be
no material change in reported net income.

     During  the  second  quarter  of 2002,  the  Board of  Directors  finalized
additional  options  to be  granted  under  this plan at $13.77  per share for a
period of 23 months,  expiring August, 2003. As of June, 2002, 7,765 options had
been granted under this plan.



                                       7
<PAGE>

NOTE 5 - COMMITMENT AND CONTINGENCY

     In May 2002, the Bank entered into an operating  lease  agreement for a new
branch.  The lease is for a term of five years  beginning  October 2002, and the
rent is $2,500 per month.  The Bank will also be required to pay all maintenance
costs and property taxes associated with the location.

NOTE 6 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In April 2002, the FASB issued Statement of Financial  Accounting Standards
No. 145,  Rescission  of FASB  Statements  No. 4, 44 and 64,  Amendment  of FASB
Statement  No.  13, and  Technical  Corrections  ("SFAS  145").  This  statement
rescinds FASB Statement No. 4, Reporting Gains and Losses from Extinguishment of
Debt, and an amendment of that Statement, FASB Statement No. 64, Extinguishments
of Debt Made to Satisfy Sinking-Fund Requirements.  This statement also rescinds
FASB Statement No. 44, Accounting for Intangible Assets of Motor Carriers.  This
Statement amends FASB Statement No. 13,  Accounting for Leases,  to eliminate an
inconsistency  between the required  accounting for sale-leaseback  transactions
and the required  accounting for certain lease  modifications that have economic
efforts that are similar to  sale-leaseback  transactions.  This  Statement also
amends other existing  authoritative  pronouncements  to make various  technical
corrections,  clarify meanings,  or describe their  applicability  under changed
conditions.

     The amendment to SFAS 13 is effective for transactions  occurring after May
15, 2002. All other provisions are effective for financial  statements issued on
or after  May 15,  2002.  In  management's  opinion,  the  Company  and Bank are
currently in compliance with all applicable provisions of this pronouncement.




                                       8
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

RESULTS OF OPERATIONS

     General.  Glen Burnie Bancorp, a Maryland corporation (the "Company"),  and
its subsidiaries, The Bank of Glen Burnie (the "Bank") and GBB Properties, Inc.,
both Maryland  corporations,  and Glen Burnie  Statutory  Trust I, a Connecticut
business trust,  had consolidated net income of $587,000 ($.35 basic and diluted
earnings per share) for the second  quarter of 2002,  compared to second quarter
2001  consolidated  net income of $377,000 ($0.23 basic and diluted earnings per
share).  The  increase  in  consolidated  net income was due to a  reduction  in
interest  expense and other expenses,  partially offset by a decline in interest
income.

     Net Interest Income.  The Company's  consolidated net interest income prior
to provision  for credit losses for the three and six months ended June 30, 2002
was  $2,894,000  and  $5,647,000,   respectively,  compared  to  $2,705,000  and
$5,252,000  for the same periods in 2001, an increase of $189,000 (or 6.99%) for
the three-month period, and an increase of $395,000 (or 7.52%) for the six-month
period.  These increases were primarily  attributable to a decline in rates paid
on deposits.

     Interest income decreased  $125,000 (2.90%) for the three months ended June
30, 2002, and decreased $295,000 (3.43%) for the six months ended June 30, 2002,
compared to the same  periods in 2001.  The  decrease  for the  three-month  and
six-month  period was primarily due to declining  outstanding  balances on loans
and declining interest rate environment  partially offset by increased income on
state and municipal  securities.  Interest  income on loans  decreased  $158,000
(4.86%) for the three months ended June 30, 2002, and decreased $329,000 (5.03%)
for the six months ended June 30, 2002, compared to the same periods in 2001.

     Interest  expense  decreased  $314,000  (19.65%) for the three months ended
June 30, 2002, and decreased $690,000 (20.65%) for the six months ended June 30,
2002, compared to the 2001 periods,  due to an overall decline in interest rates
paid on deposits as a result of the declining interest rate environment.

     Net interest  margins for the three and six months ended June 30, 2002 were
5.07% and 4.98%,  respectively,  compared to tax equivalent net interest margins
of 4.91% and 4.85%, for the three and six month periods ended June 30, 2001. The
increases in net interest margins for the three and six month periods ended June
30, 2002 were primarily due to a decrease in interest expenses.

     Provision For Credit Losses.  The Company made no additional  provision for
credit  losses  during the three and six month  periods  ended June 30, 2002 and
2001. As of June 30, 2002,  the allowance for credit losses  equaled  693.23% of
non-accrual  and past due loans  compared  to 445.30% at  December  31, 2001 and
1,049.68% at June 30, 2001.  During the three and six month  periods  ended June
30,  2002,  the  Company  recorded  net  charge-offs  of $66,000  and  $172,000,
respectively,  compared to net charge-offs of $35,000 and $89,000, respectively,
during the corresponding  periods of the prior year. On an annualized basis, net
charge-offs for the 2002 period represent .21% of the average loan portfolio.

     Other  Income.  Other  income for the three  month  period  decreased  from
$427,000 at June 30,  2001,  to $402,000 at June 30,  2002, a decline of $25,000
(5.85%).  For the six month period, other income increased from $825,000 at June
30, 2001 to $1,560,000 at June 30, 2002,  an increase of $735,000  (89.1%).  The
decrease for the three month period was due to a decline in gains on  investment
securities.  The increase for the six month period is primarily due to a gain of
$764,000  arising  from the  positive  amendment  on the Bank's  post-retirement
health insurance benefit plan which was recognized in the first quarter of 2002.

     Other  Expense.  Other  expenses for the three month period  decreased from
$2,647,000  at June 30,  2001,  to  $2,534,000  at June 30,  2002,  a decline of
$113,000  (4.27%).  For the six month  period,  other  expenses  increased  from
$4,993,000  at June 30,  2001 to  $5,004,000  at June 30,  2002,  an increase of
$11,000  (0.22%).  The decline  for the three month  period was due to a $70,000
legal  settlement  recognized in the second quarter 2001 and an overall  general
decrease in various other expenses.



                                       9
<PAGE>

     Income  Taxes.  During the three and six months  ended June 30,  2002,  the
Company  recorded  income tax expense of $175,000  and  $628,000,  respectively,
compared to an income tax expense of $108,000 and  $275,000,  respectively,  for
the corresponding periods of the prior year. The increase in income tax expenses
reflect the Company's  earnings [plus an increased tax  advantaged  portfolio in
the  investment  securities  during the current year's  periods].  The Company's
effective  tax rate for the three and six month  periods in 2002 were 22.97% and
28.51%, respectively, compared to 22.27% and 25.37%, respectively, for the prior
year periods.

FINANCIAL CONDITION

     General.  The Company's  assets  increased to $268,476,000 at June 30, 2002
from  $263,362,000  at  December  31,  2001  primarily  due  to an  increase  in
investment  securities  available  for sale,  partially  offset by a decrease in
loans and cash and cash equivalents.  The Bank's net loans totaled  $161,286,000
at June 30, 2002,  compared to  $164,569,000 at December 31, 2001, a decrease of
$3,283,000  (1.99%),  primarily  attributable  to a decline in the  portfolio of
indirect loans.

     The  Company's  total  investment   securities  portfolio  (including  both
investment  securities  available  for sale and  investment  securities  held to
maturity) totaled $84,996,000 at June 30, 2002, a $12,931,000 or 17.94% increase
from  $72,065,000  at December  31, 2001.  The Bank's cash and cash  equivalents
(cash due from banks, interest-bearing deposits in other financial institutions,
and federal funds sold), as of June 30, 2002, totaled $13,894,000, a decrease of
$4,326,000  (23.74%)  from the  December  31,  2001  total of  $18,220,000.  The
aggregate market value of investment  securities held by the Bank as of June 30,
2002 was  $85,467,000  compared  to  $72,429,000  as of  December  31,  2001,  a
$13,038,000 (18.0%) increase.

     Deposits as of June 30, 2002 totaled  $233,275,000  which is an increase of
$3,968,000 (1.73%) from $229,307,000 at December 31, 2001. Demand deposits as of
June 30, 2002 totaled  $58,290,000  which is an increase of  $2,605,000  (4.68%)
from  $55,685,000 at December 31, 2001. NOW accounts as of June 30, 2002 totaled
$21,823,267 which is a decrease of $572,436 (2.56%) from $22,395,703 at December
31, 2001. Money market accounts as of June 30, 2002 totaled  $19,632,095,  which
is a decrease of $994,154  (4.82%),  from  $20,626,249  at  December  31,  2001.
Savings  deposits  as of June 30,  2002  totaled  $45,631,973,  an  increase  of
$3,287,013  (7.76%)  from  $42,344,960  at December 31,  2001.  Certificates  of
deposit  over  $100,000  totaled  $17,037,128  on June 30,  2002,  a decrease of
$598,338 (3.4%) from $17,635,466 at December 31, 2001. Other time deposits (made
up of  certificates  of deposit  less than  $100,000 and  individual  retirement
accounts) totaled  $70,241,820 on June 30, 2002, a $377,412 (.53%) decrease from
the $70,619,232 total at December 31, 2001.

     Asset  Quality.  The  following  table  sets forth the amount of the Bank's
restructured  loans,  non-accrual  loans and accruing loans 90 days or more past
due at the dates indicated.


                                       10
<PAGE>
<TABLE>

<CAPTION>
                                                                                        At June 30        At December 31,
                                                                                        ----------        ---------------
                                                                                           2002                 2001
                                                                                           ----                 ----
                                                                                             (Dollars in Thousands)

<S>                                                                                        <C>                  <C>
Restructured loans                                                                         $ 39                 $  0
                                                                                           ====                 ====

Non-accrual loans:
   Real estate - mortgage:
     Residential                                                                           $269                $284
     Commercial                                                                               8                 189
   Real estate - construction                                                                 0                   0
   Installment                                                                               59                  88
   Credit card & related                                                                      0                   0
   Commercial                                                                                21                  40
                                                                                           ----                ----
       Total non-accrual loans                                                              357                 601
                                                                                           ----                ----

Accruing loans past due 90 days or more: Real estate - mortgage:
     Residential                                                                             42                  45
     Commercial                                                                               0                   0
   Real estate - construction                                                                 0                   0
   Installment                                                                                0                  13
   Credit card & related                                                                      0                   1
   Commercial                                                                                 0                   0
   Other                                                                                      0                   0
                                                                                           ----                ----
       Total accruing loans past due 90 days or more                                         42                  59
                                                                                           ----                ----

       Total non-accrual and past due loans                                                $399                $660
                                                                                           ====                ====

Non-accrual and past due loans to gross loans                                              0.24%               0.39%
                                                                                           ====                ====

Allowance for credit losses to non-accrual and past due loans                            693.23%             445.30%
                                                                                         ======              ======
</TABLE>

     At June  30,  2002,  there  were no loans  outstanding,  other  than  those
reflected  in the above  table,  as to which known  information  about  possible
credit problems of borrowers caused  management to have serious doubts as to the
ability of such  borrowers  to comply with present loan  repayment  terms.  Such
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.

     Allowance For Credit Losses. 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
collectibility of the principal is unlikely. The allowance, based on evaluations
of the collectibility of loans and prior loan loss experience, is an amount that
management believes will be adequate to absorb possible losses on existing loans
that may become  uncollectible.  The evaluations  take into  consideration  such
factors as changes  in the  nature  and  volume of the loan  portfolio,  overall
portfolio  quality,  review of specific  problem  loans,  and  current  economic
conditions and trends that may affect the borrowers' ability to pay.




                                       11
<PAGE>

     Transactions  in the  allowance  for credit losses for the six months ended
June 30, 2002 and 2001 were as follows:

<TABLE>
<CAPTION>
                                                                                                  Six Months Ended
                                                                                                       June 30
                                                                                                  2002        2001
                                                                                                  ----        ----
                                                                                               (Dollars in Thousands)

<S>                                                                                             <C>         <C>
Beginning balance                                                                               $2,938      $3,385

Charge-offs                                                                                       (323)       (265)
Recoveries                                                                                         151         176
                                                                                                ------      ------
Net charge-offs                                                                                   (172)        (89)
Provisions charged to operations                                                                     0           0
                                                                                                ------      ------
Ending balance                                                                                  $2,766      $3,296
                                                                                                ======      ======

Average loans                                                                                 $162,366    $158,869
Net charge offs to average loans (annualized)                                                     0.21%       0.11%

     Reserve  for  Unfunded  Commitments.  As of June  30,  2002,  the  Bank had
outstanding  commitments  totaling  $14,286,021.  These outstanding  commitments
consisted  of  letters  of  credit,  undrawn  lines of  credit,  and other  loan
commitments.  The following  table shows the Bank's  allowance for credit losses
arising from these unfunded commitments:

                                                                                                  Six Months Ended
                                                                                                       June 30
                                                                                                  2002        2001
                                                                                                  ----        ----
                                                                                               (Dollars in Thousands)


Beginning balance                                                                                 $150          $0

Provisions charged to operations                                                                     0           0
                                                                                                  ----        ----
Ending balance                                                                                    $150        $  0
                                                                                                  ====        ====
</TABLE>


LIQUIDITY AND CAPITAL RESOURCES

     The Company  currently has no business other than that of the Bank and does
not currently have any material  funding  commitments.  The Company's  principal
sources of liquidity are cash on hand and dividends  received from the Bank. The
Bank is subject to various regulatory restrictions on the payment of dividends.

     The Bank's  principal  sources of funds for  investments and operations are
net income,  deposits  from its primary  market  area,  principal  and  interest
payments on loans,  interest received on investment securities and proceeds from
maturing  investment  securities.  Its principal funding commitments are for the
origination or purchase of loans and the payment of maturing deposits.  Deposits
are  considered  a primary  source of funds  supporting  the Bank's  lending and
investment activities.

     The Bank's most liquid assets are cash and cash equivalents, which are cash
on  hand,  amounts  due  from  financial   institutions,   federal  funds  sold,
certificates of deposit with other financial  institutions that have an original
maturity of three months or less and money market  mutual  funds.  The levels of
such assets are  dependent  on the Bank's  operating  financing  and  investment
activities  at any  given  time.  The  variations  in  levels  of cash  and cash
equivalents  are  influenced by deposit  flows and  anticipated  future  deposit
flows.   The  Bank's   cash  and  cash   equivalents   (cash  due  from   banks,
interest-bearing  deposits in other  financial  institutions,  and federal funds
sold),  as of June 30,  2002,  totaled  $13,894,000  a  decrease  of  $4,326,000
(23.74%) from the December 31, 2001 total of $18,220,000.



                                       12
<PAGE>

     As of June 30, 2002,  the Bank was permitted to draw on a $31,600,000  line
of credit from the FHLB of Atlanta.  Borrowings  under the line are secured by a
floating lien on the Bank's  residential  mortgage loans. As of June 30, 2002, a
$7.0 million long-term  convertible  advance was outstanding under this line. In
addition  the Bank has a secured  line of credit in the  amount of $5.0  million
from another commercial bank on which it has not drawn. Furthermore,  as of June
30,  2002,  the  Company  had   outstanding   $5,155,000  of  its  10.6%  Junior
Subordinated  Deferrable  Interest  Debentures  issued to Glen Burnie  Statutory
Trust I, a Connecticut statutory trust subsidiary of the Company.

     The Company's stockholders' equity increased by $2,141,000 or 11.9%, during
the six  months  ended  June 30,  2002,  due to  earnings,  partially  offset by
decreases  in  equity  accounts  from  dividend  distributions.   The  Company's
accumulated  other  comprehensive  income net of tax  increased by $757,000 from
$163,000  loss at December 31, 2001 to $594,000  income at June 30,  2002,  as a
result of unrealized  holding gains  relating to securities  held for investment
arising during the period.  Retained earnings increased by $1,241,000 during the
six month period as the result of earnings during the period,  partially  offset
by dividends.  In addition,  $72,289 was transferred to stockholders'  equity in
consideration for shares to be issued under the Company's dividend  reinvestment
plan in lieu of cash dividends.

     The Federal  Reserve Board and the FDIC have  established  guidelines  with
respect to the  maintenance  of  appropriate  levels of capital by bank  holding
companies and state non-member banks,  respectively.  The regulations impose two
sets of capital adequacy  requirements:  minimum  leverage rules,  which require
bank  holding  companies  and banks to  maintain a  specified  minimum  ratio of
capital to total  assets,  and  risk-based  capital  rules,  which  require  the
maintenance of specified minimum ratios of capital to "risk-weighted" assets. At
June 30, 2002, the Bank was in full compliance with these guidelines with a Tier
1 leverage  ratio of 9.20%,  a Tier 1 risk-based  capital  ratio of 14.18% and a
total risk-based capital ratio of 15.43%.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     Not applicable.





                                       13
<PAGE>

                          PART II - OTHER INFORMATION

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     On May 9, 2002,  the Company held its Annual Meeting of  Stockholders.  The
only matters  submitted to the stockholders for a vote were the election of four
directors and the  authorization  of the Board of Directors to select an outside
auditing  firm for the  Company's  fiscal year ending  December  31,  2002.  The
nominees  submitted for election as directors  were John E. Demyan,  Theodore L.
Bertier, Jr., F. W. Kuethe, III, and Mary Lou Wilcox.

     At the  Meeting,  at least  1,338,857  shares  were  voted in favor of each
nominee,  no more  than 138  shares  were  voted  to  withhold  approval  of any
director.  As a result,  all of the nominees  were elected to serve as directors
until the next  annual  meeting of  shareholders  of the Company and until their
successors are duly elected and qualified.  Directors not up for re-election and
continuing  in office  after the  Meeting  are:  Charles L. Hein,  Alan E. Hahn,
Shirley E. Boyer,  John I. Young,  F. William Kuethe,  Jr.,  William N. Scherer,
Sr., Thomas Clocker, and Karen Thorwarth.

     At the Meeting,  1,205,415  shares were voted in favor of  authorizing  the
Board of Directors to select an outside  auditing firm for the Company's  fiscal
year ending December 31, 2002,  174,124 shares voted to withhold  authorization,
and 4,803 shares abstained.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)       Exhibits:

Exhibit No.

3.1       Articles of Incorporation (incorporated by reference to Exhibit 3.1 to
          Amendment No. 1 to the Registrant's  Form 8-A filed December 27, 1999,
          File No. 0-24047)

3.2       By-Laws  (incorporated by reference to Exhibit 3.2 to the Registrant's
          Annual  Report on Form 10-K for the  Fiscal  Year Ended  December  31,
          1998, File No. 0-24047)

3.3       Articles  Supplementary,  dated  November  16, 1999  (incorporated  by
          reference to Exhibit 3.3 to the  Registrant's  Current  Report on Form
          8-K filed December 8, 1999, File No. 0-24047)

4.1       Rights Agreement,  dated as of February 13, 1998,  between Glen Burnie
          Bancorp and The Bank of Glen Burnie,  as Rights Agent,  as amended and
          restated as of December 27, 1999 (incorporated by reference to Exhibit
          4.1 to Amendment No. 1 to the Registrant's Form 8-A filed December 27,
          1999, File No. 0-24047)

10.1      Glen Burnie  Bancorp  Director Stock  Purchase Plan  (incorporated  by
          reference to Exhibit  99.1 to  Post-Effective  Amendment  No. 1 to the
          Registrant's Registration Statement on Form S-8, File No. 33-62280)

10.2      The Bank of Glen Burnie Employee Stock Purchase Plan  (incorporated by
          reference to Exhibit  99.1 to  Post-Effective  Amendment  No. 1 to the
          Registrant's Registration Statement on Form S-8, File No. 333-46943)

10.3      Change-in-Control Severance Plan (incorporated by reference to Exhibit
          10.3 to the  Registrant's  Annual  Report on Form 10-K for the  Fiscal
          Year Ended December 31, 2001, File No. 0-24047)

10.4      The Bank of Glen Burnie Executive and Director  Deferred  Compensation
          Plan  (incorporated  by reference to Exhibit 10.4 to the  Registrant's
          Annual  Report on Form 10-K for the  Fiscal  Year Ended  December  31,
          1999, File No. 0-24047)

99.1      Certification  Required Pursuant to Section 906 of the  Sarbanes-Oxley
          Act of 2002

(b)       Reports on Form 8-K:

                  None.





                                       14
<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  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
                                           (Registrant)


Date: August 6, 2002                       By:   /s/ F. William Kuethe, Jr.
                                              ----------------------------------
                                              F. William Kuethe, Jr.
                                              President, Chief Executive Officer


                                           By:  /s/ John E. Porter
                                              ----------------------------------
                                              John E. Porter
                                              Chief Financial Officer






                                       15
<PAGE>

                                                                    Exhibit 99.1




                           CERTIFICATION PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In  connection  with the  Quarterly  Report  of Glen  Burnie  Bancorp  (the
"Company")  on Form 10-Q for the period  ending  June 30, 2002 as filed with the
Securities and Exchange Commission and to which this Certification is an exhibit
(the "Report"),  the undersigned hereby certify,  pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the  requirements  of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

(2)  The information  contained in the Report fairly  presents,  in all material
     respects,  the financial  condition and result of operations of the Company
     for the periods reflected therein.




Date: August 6, 2002                            /s/ F. William Kuethe, Jr.
                                           -------------------------------------
                                           F. William Kuethe, Jr.
                                           President, Chief Executive Officer


                                                /s/ John E. Porter
                                           -------------------------------------
                                           John E. Porter
                                           Chief Financial Officer

<PAGE>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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