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<SEC-DOCUMENT>0001116354-02-000028.txt : 20021101
<SEC-HEADER>0001116354-02-000028.hdr.sgml : 20021101
<ACCEPTANCE-DATETIME>20021101104727
ACCESSION NUMBER:		0001116354-02-000028
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20020930
FILED AS OF DATE:		20021101

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:		02805940

	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>gbb9300210q.txt
<DESCRIPTION>GLEN BURNIE BANCORP 9-30-02 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 September 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 October 29, 2002, the number of shares outstanding of the registrant's common
stock was 1,672,928.


<PAGE>

                                TABLE OF CONTENTS




Part I - Financial Information                                              Page
                                                                            ----

         Item 1.   Financial Statements:
         -------

                   Condensed Consolidated Balance Sheets, September
                   30, 2002 (unaudited) and December 31, 2001 (audited)       3

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

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

                   Condensed Consolidated Statements of Cash Flows
                   for the Nine Months Ended September 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                   13
         -------   about Market Risk

         Item 4.   Controls and Procedures                                   13
         -------



Part II - Other Information

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

                    Signatures                                               15
                    Certifications                                           16




<PAGE>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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

<CAPTION>
                                                                                  September 30, 2002       December 31,

                                                                                  ------------------       ------------
                                    ASSETS                                           (unaudited)               2001
                                                                                                               ----

<S>                                                                                     <C>                  <C>
Cash and due from banks                                                                 $11,207              $10,888
Interest-bearing deposits in other financial institutions                                   138                1,879
Federal funds sold                                                                        5,266                5,453
                                                                                        -------              -------
       Cash and cash equivalents                                                         16,611               18,220
Certificates of deposit in other financial institutions                                     100                  100
Investment securities available for sale, at fair value                                  87,059               55,548
Investment securities held to maturity, at cost
   (fair value September 30: $10,191;  December 31: $16,881)                              9,749               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
   (September 30: $2,682; December 31: $2,938)                                          160,929              164,569
Premises and equipment, at cost, less accumulated depreciation                            3,703                3,887
Other real estate owned                                                                     416                  420
Other assets                                                                              3,099                3,294
                                                                                       --------             --------
                   Total assets                                                        $282,524             $263,362
                                                                                       ========             ========

                     LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
Deposits                                                                               $241,853             $229,307
Short-term borrowings                                                                     3,814                  882
Long-term borrowings                                                                      7,257                7,275
Other liabilities                                                                         2,935                2,881
                                                                                        -------              -------
                  Total liabilities                                                     255,859              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: September 30: 1,672,928 shares;
   December 31: 1,663,560 shares                                                          1,673                1,664
Surplus                                                                                  10,571               10,390
Retained earnings                                                                         7,703                5,971
Accumulated other comprehensive income (loss), net of tax                                 1,563                 (163)
                                                                                       --------             --------
                   Total stockholders' equity                                            21,510               17,862
                                                                                       --------             --------
                   Total liabilities and stockholders' equity                          $282,524             $263,362
                                                                                       ========             ========

                See accompanying notes to condensed consolidated
                             financial statements.

</TABLE>




                                       3
<PAGE>

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

<CAPTION>
                                                               Three Months Ended September 30  Nine Months Ended September 30
                                                               -------------------------------  ------------------------------
                                                                      2002           2001             2002           2001
                                                                      ----           ----             ----           ----
Interest income on:
<S>                                                                 <C>            <C>              <C>            <C>
   Loans, including fees                                            $3,092         $3,336           $9,298         $9,871
   U.S. Treasury and U.S. Government agency securities                 720            567            1,999          1,860
   State and Municipal securities                                      316            209              855            500
   Other                                                               122            185              397            660
                                                                    ------         ------           ------         ------
       Total interest income                                         4,250          4,297           12,549         12,891
                                                                    ------         ------           ------         ------

Interest expense on:
   Deposits                                                          1,055          1,346            3,218          4,218
   Short-term borrowings                                                 2              4                5             15
   Long-term borrowings                                                108            141              321            322
   Junior subordinated debentures                                      137            136              410            414
                                                                    ------         ------           ------         ------
       Total interest expense                                        1,302          1,627            3,954          4,969
                                                                    ------         ------           ------         ------

          Net interest income                                        2,948          2,670            8,595          7,922

Provision for credit losses                                              0              0                0              0
                                                                    ------         ------           ------         ------
          Net interest income after provision for credit losses      2,948          2,670            8,595          7,922
                                                                    ------         ------           ------         ------

Other income:
   Service charges on deposit accounts                                 261            227              761            707
   Other fees and commissions                                          158            152              444            434
   Other non-interest income                                             3              3                7             19
   Gain on termination of post-retirement plan                           0              0              764              0
   Gains on investment securities                                       42            137               48            184
                                                                    ------         ------           ------         ------
       Total other income                                              464            519            2,024          1,344
                                                                    ------         ------           ------         ------

Other expenses:
   Salaries and employee benefits                                    1,464          1,404            4,382          4,229
   Occupancy                                                           142            160              434            441
   Other expenses                                                      888            800            2,682          2,687
                                                                    ------         ------           ------         ------
       Total other expenses                                          2,494          2,364            7,498          7,357
                                                                    ------         ------           ------         ------

Income before income taxes                                             918            825            3,121          1,909

Income tax expense                                                     227            239              855            514
                                                                    ------         ------           ------         ------

Net income                                                            $691           $586           $2,266         $1,395
                                                                      ====           ====           ======         ======

Basic and diluted earnings per share of common stock                 $0.41          $0.35            $1.36          $0.85
                                                                     =====          =====            =====          =====

Weighted average shares of common stock outstanding              1,670,221      1,656,898        1,666,681      1,655,945
                                                                 =========      =========        =========      =========
Dividends declared per share of common stock                         $0.12          $0.10            $0.32          $0.30
                                                                     =====          =====            =====          =====

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




                                       4
<PAGE>

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

<TABLE>

<CAPTION>
                                                        Three Months Ended             Nine Months Ended
                                                        ------------------             -----------------
                                                           September 30                   September 30
                                                                                          ------------
                                                        2002          2001             2002          2001
                                                        ----          ----             ----          ----

<S>                                                     <C>           <C>             <C>           <C>
Net income                                              $691          $586            $2,266        $1,395

Other comprehensive income, net of tax

   Unrealized gains securities:

      Unrealized holding gains
        arising during period                            991           228             1,750           319

      Reclassification adjustment for gains
        included in net income                           (22)          (22)              (22)         (104)
                                                      ------          ----            ------        ------
Comprehensive income                                  $1,660          $730            $3,992        $1,610
                                                      ======          ====            ======        ======


                See accompanying notes to condensed consolidated
                             financial statements.

</TABLE>




                                       5
<PAGE>

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

<CAPTION>
                                                                                        Nine Months Ended September 30,
                                                                                        -------------------------------
                                                                                             2001              2002
                                                                                             ----              ----
Cash flows from operating activities:
<S>                                                                                        <C>               <C>
Net income                                                                                 $2,266            $1,395
Adjustments to reconcile net income to net cash provided by operating activities:
   Depreciation, amortization, and accretion                                                 (332)              316
   Compensation expense from vested stock options                                              39                 0
   Provision for credit losses                                                                  0                 0
    Gains on disposals of assets, net                                                         (45)             (184)
Changes in assets and liabilities:
   (Increase) decrease in other assets                                                       (960)              (68)
   (Decrease) increase in other liabilities                                                    49              (302)
                                                                                           ------            ------
Net cash provided by operating activities                                                   1,017             1,157
                                                                                           ------            ------

Cash flows from investing activities:
    Maturities of available for sale mortgage-backed securities (includes                   8,336             3,470
    paydowns)
    Proceeds from disposals of investment securities                                        9,460            16,934
    Purchases of investment securities                                                    (38,809)          (25,407)
    Purchase of Federal Home Loan Bank stock                                                  (51)                0
    Decrease (increase) in loans, net                                                       3,640            (5,023)
    Purchases of premises and equipment                                                      (288)             (388)
    Proceeds from sale of other real estate                                                     4                 3
                                                                                          -------           -------
Net cash used by investing activities                                                     (17,708)          (10,411)
                                                                                          -------           -------
Cash flows from financing activities:
    Increase in deposits, net                                                              12,546            13,988
    Increase in short-term borrowings                                                       2,932               338
    Repayment of long-term borrowings                                                         (18)              (17)
    Dividends paid                                                                           (529)             (547)
    Common stock dividends reinvested                                                         115                77
    Issuance of common stock                                                                   36                 0
    Repurchase and retirement of common stock                                                   0              (149)
                                                                                           ------            ------
Net cash provided by financing activities                                                  15,082            13,690
                                                                                           ------            ------

Increase (decrease) in cash and cash equivalents                                           (1,609)            4,436

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

Cash and cash equivalents, end of period                                                  $16,611           $19,945
                                                                                          =======           =======

                      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 nine months ended September 30, 2002 and 2001.

     Operating  results for the three and nine month periods ended September 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 nine months  ended  September  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        Nine Months Ended
                                                                 September 30, 2002        September 30, 2002
                                                                 ------------------        ------------------
    Diluted:
<S>                                                                   <C>                       <C>
      Net income                                                      $691,000                  $2,266,000
      Weighted average common shares outstanding                     1,670,221                   1,666,681
      Dilutive effect of stock options                                   5,186                       2,587
                                                                     ---------                  ----------
      Average common shares outstanding - diluted                    1,675,407                   1,669,268
      Diluted net income per share                                       $0.41                       $1.36

</TABLE>
     Diluted earnings per share calculations were not required for the three and
nine months ended September 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.  As of September  30,  2002,  5,070
options were still outstanding under this plan.

NOTE 5 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

     In June 2002, the FASB issued statements of Financial  Accounting Standards
No. 146, Accounting for Costs Associated with Exit or Disposal Activities.  This


                                       7
<PAGE>

statement addresses financial accounting and reporting for costs associated with
exit or disposal  activities  and  nullifies  Emerging  Issues Task Force (EITF)
Issue No. 94-3, Liability  Recognition for Certain Employee Termination Benefits
and Other  Costs to Exit an  Activity  (including  Certain  Costs  Incurred in a
Restructuring).  This statement  changes the current  practice of accounting for
these transactions by changing the timing of the recognition of exit or disposal
costs and generally  requires such costs to be recognized  when the liability is
incurred  rather  than  on the  date  the  entity  commits  to a plan of exit or
disposal. It also requires such liabilities to be measured at fair value.

     The  provisions  of this  statement  are  effective  for  exit or  disposal
activities  initiated  after  December 31, 2002. In  management's  opinion,  the
Company and the 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 $691,000 ($0.41 basic and diluted
earnings  per share) for the third  quarter of 2002,  compared to third  quarter
2001  consolidated  net income of $586,000 ($0.35 basic and diluted earnings per
share).  This  increase  was  primarily  due to a decrease in interest  expense.
Year-to-date  consolidated  net income for the nine months ended  September  30,
2002 was $2,266,000  ($1.36 basic and diluted  earnings per share),  compared to
$1,395,000  ($0.85  basic and  diluted  earnings  per share) for the nine months
ended September 30, 2001.

     Net Interest Income.  The Company's  consolidated net interest income prior
to provision for credit losses for the three and nine months ended September 30,
2002 was $2,948,000  and  $8,595,000,  respectively,  compared to $2,670,000 and
$7,922,000,  respectively, for the same periods in 2001, an increase of $278,000
(10.41%) for the three month period, and an increase of $673,000 (8.50%) for the
nine month  period.  The increase in net interest  income for the three and nine
month period was primarily attributable to an increase in the interest earned on
securities and a decline in the rates paid on interest-bearing deposits.

     Interest  income  decreased  $47,000  (1.09%)  for the three  months  ended
September  30, 2002 and  decreased  $342,000  (2.65%) for the nine months  ended
September  30,  2002,  compared  to the same  periods in 2001.  The  decrease in
interest income were attributable to declining loan balances partially offset by
increases in income from securities. Interest income on loans decreased $244,000
(7.31%) for the three months ended  September 30, 2002,  and decreased  $573,000
(5.80%) for the nine  months  ended  September  30,  2002,  compared to the same
periods in 2001.

     Interest  expense  decreased  $325,000  (19.99%) and  $1,015,000  (20.43%),
respectively, for the three and nine months ended September 30, 2002 compared to
the 2001 periods. For both periods the decrease was due to a decline in interest
rates paid on deposits.

     Net interest margins for the three and nine months ended September 30, 2002
were 4.89% and 4.93%,  respectively,  compared to tax  equivalent  net  interest
margins of 5.08% and 5.14% for the three and nine  months  ended  September  30,
2001, respectively.  The decrease in net interest margins for the three and nine
months ended  September 30, 2001 were  primarily due to a continuing  decline in
the yield on earning assets.

     Provision For Credit Losses.  The Company made no additional  provision for
credit losses  during the three and nine month periods ended  September 30, 2002
and 2001.  As of September 30, 2002,  the  allowance  for credit losses  equaled
779.65% of  non-accrual  and past due loans  compared to 445.30% at December 31,
2001 and  1,122.68%  at  September  30,  2001.  During  the three and nine month
periods  ended  September  30, 2002,  the Company  recorded net  charge-offs  of
$84,000 and $256,000,  respectively,  compared to net chargeoffs of $126,000 and
$215,000,  respectively,  during the corresponding periods of the prior year. On
an annualized  basis,  net chargeoffs for the 2002 period  represent .21% of the
average loan portfolio.

     Other  Income.  Other  income for the three  month  period  decreased  from
$519,000 at September  30, 2001, to $464,000 at September 30, 2002, a decline of
$55,000  (10.60%).  For the nine  month  period,  other  income  increased  from
$1,344,000  at  September  30, 2001 to  $2,024,000  at September  30,  2002,  an
increase of $680,000  (50.60%).  The decrease for the three month period was due
to decrease in gains on investments,  partially offset by an increase in service
charges.  The increase  for the nine month period is primarily  due to a gain of
$764,000  from the  positive  amendment  on the  Bank's  post-retirement  health
insurance benefit plan.

     Other  Expense.  Other  expenses for the three month period  increased from
$2,364,000  at September  30, 2001,  to  $2,494,000  at September  30, 2002,  an
increase of $130,000 (5.5%). For the nine month period, other expenses increased


                                       9
<PAGE>

from  $7,357,000  at September  30, 2001 to $7,498,000 at September 30, 2002, an
increase  of $141,000  (1.9%).  The  increase  for both the three and nine month
periods was due to an increase on salaries and employee benefits.

     Income  Taxes.  During the three and nine months ended  September 30, 2002,
the Company recorded income tax expense of $227,000 and $855,000,  respectively,
compared to an income tax expense of $239,000 and  $514,000,  respectively,  for
the  corresponding  periods of the prior year. The Company's  effective tax rate
for the three and nine month periods in 2002 were 24.7% and 27.4%, respectively,
compared to 29% and 26.9%, respectively, for the prior year periods.

FINANCIAL CONDITION

     General.  The Company's  assets  increased to $282,524,000 at September 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
investment securities held to maturity, loans and cash and cash equivalents. The
Bank's net loans  totaled  $160,929,000  at  September  30,  2002,  compared  to
$164,569,000 at December 31, 2001, a decrease of $3,640,000  (2.21%),  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  $96,808,000  at September 30, 2002, a $24,743,000  or 34.33%
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  September  30,  2002,  totaled
$16,611,000,  a decrease of $1,609,000  (8.83%) from the December 31, 2001 total
of $18,220,000.  The aggregate market value of investment securities held by the
Bank as of September  30, 2002 was  $97,250,000  compared to  $72,429,000  as of
December 31, 2001, a $24,821,000 (34.2%) increase.

     Deposits as of September 30, 2002 totaled $241,853,000 which is an increase
of $12,546,000  (5.47%) from  $229,307,000 at December 31, 2001. Demand deposits
as of September 30, 2002 totaled  $62,111,928 which is an increase of $6,427,000
(11.54%) from $55,685,000 at December 31, 2001. NOW accounts as of September 30,
2002  totaled  $23,868,130  which is an  increase  of  $1,472,427  (6.57%)  from
$22,395,703 at December 31, 2001. Money market accounts as of September 30, 2002
totaled $20,414,459,  which is a decrease of $211,790 (1.03%),  from $20,626,249
at December  31,  2001.  Savings  deposits  as of  September  30,  2002  totaled
$45,142,747,  an increase of $2,797,787 (6.61%) from $42,344,960 at December 31,
2001. Certificates of deposit over $100,000 totaled $18,099,877 on September 30,
2002,  an increase of $464,411  (2.63%) 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  $72,049,626 on September 30, 2002, a
$1,430,394 (2.03%) increase 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 September 30     At December 31,
                                                                                      ---------------     ---------------
                                                                                            2002                 2001
                                                                                            ----                 ----
                                                                                              (Dollars in Thousands)
                                                                                              ----------------------

<S>                                                                                           <C>                 <C>
Restructured loans                                                                            $3                  $0
                                                                                              ==                  ==

Non-accrual loans:
   Real estate - mortgage:
     Residential                                                                            $267                $284
     Commercial                                                                                8                 189
   Real estate - construction                                                                  0                   0
   Installment                                                                                39                  88
   Credit card & related                                                                       0                   0
   Commercial                                                                                 29                  40
                                                                                            ----                ----
       Total non-accrual loans                                                               343                 601
                                                                                            ----                ----

Accruing loans past due 90 days or more: Real estate - mortgage:
     Residential                                                                               1                  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                                           1                  59
                                                                                            ----                ----
       Total non-accrual and past due loans                                                 $344                $660
                                                                                            ====                ====

Non-accrual and past due loans to gross loans                                               0.21%               0.39%
                                                                                            =====               =====

Allowance for credit losses to non-accrual and past due loans                             779.65%             445.30%

                                                                                          =======             =======
</TABLE>

     At September 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.

     Transactions  in the allowance for credit losses  relating to loans for the
nine months ended September 30, 2002 and 2001 were as follows:


                                       11
<PAGE>

<TABLE>
<CAPTION>
                                                     Nine Months Ended
                                                        September 30
                                                        ------------
                                                     2002         2001
                                                     ----         ----
                                                   (Dollars in Thousands)
                                                   ----------------------

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

Charge-offs                                           (513)        (470)
Recoveries                                             257          255
                                                    ------       ------
Net charge-offs                                       (256)        (215)
Provisions charged to operations                         0         (150)
                                                    ------       ------
Ending balance                                      $2,682       $3,020
                                                    ======       ======

Average loans                                     $161,562     $160,821
Net charge offs to average loans (annualized)         0.21%        0.18%

</TABLE>

     Reserve for Unfunded  Commitments.  As of September 30, 2002,  the Bank had
outstanding  commitments  totaling  $13,909,388.  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:

<TABLE>
<CAPTION>
                                                     Nine Months Ended
                                                        September 30
                                                        ------------
                                                     2002         2001
                                                     ----         ----
                                                   (Dollars in Thousands)
                                                   ----------------------

<S>                                                  <C>            <C>
Beginning balance                                    $150           $0

Provisions charged to operations                        0          150
                                                     ----         ----
Ending balance                                       $150         $150
                                                     ====         ====
</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 September 30, 2002, totaled  $16,611,000,  a decrease of $1,609,000
(8.83%) from the December 31, 2001 total of $18,220,000.

     As of September  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 September 30,
2002, a $7 million  long-term  convertible  advance and a $3 million  short-term


                                       12
<PAGE>

overnight  rate advance were  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  September  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  $3,648,000 or 20.42% during
the nine months ended  September 30, 2002,  due to earnings,  offset by dividend
distributions.  The Company's  accumulated other comprehensive income net of tax
increased by  $1,726,000  from  $163,000 loss at December 31, 2001 to $1,563,000
income at September 30, 2002 as a result of unrealized  holding gains.  Retained
earnings  increased by  $1,732,000  during the nine month period due to earnings
offset by dividends.  In addition,  $115,074 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
September 30, 2002, the Bank was in full compliance with these guidelines with a
Tier 1 leverage ratio of 9.11%, a Tier 1 risk-based  capital ratio of 14.11% and
a total risk-based capital ratio of 15.37%.

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 2002, the FASB issued statements of Financial  Accounting Standards
No. 146, Accounting for Costs Associated with Exit or Disposal Activities.  This
statement addresses financial accounting and reporting for costs associated with
exit or disposal  activities  and  nullifies  Emerging  Issues Task Force (EITF)
Issue No. 94-3, Liability  Recognition for Certain Employee Termination Benefits
and Other  Costs to Exit an  Activity  (including  Certain  Costs  Incurred in a
Restructuring).  This statement  changes the current  practice of accounting for
these transactions by changing the timing of the recognition of exit or disposal
costs and generally  requires such costs to be recognized  when the liability is
incurred  rather  than  on the  date  the  entity  commits  to a plan of exit or
disposal. It also requires such liabilities to be measured at fair value.

     The  provisions  of this  statement  are  effective  for  exit or  disposal
activities  initiated  after  December 31, 2002. In  management's  opinion,  the
Company and the Bank are currently in compliance with all applicable  provisions
of this pronouncement.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     Not applicable.


ITEM 4. CONTROLS AND PROCEDURES

     Based on the evaluation of the Company's disclosure controls and procedures
by F. William Kuethe,  Jr., the Company's Chief Executive  Officer,  and John E.
Porter,  the Company's Chief Financial  Officer,  as of a date within 90 days of
the filing date of this quarterly report,  such officers have concluded that the
Company's  disclosure  controls and  procedures  are  effective in ensuring that
information required to be disclosed by the Company in the reports that it files
or submits  under the  Securities  and  Exchange  Act of 1934,  as  amended,  is
recorded,  processed,  summarized and reported, within the time period specified
by the Securities and Exchange Commission's rules and forms.

     There were no significant  changes in the Company's internal controls or in
other factors that could  significantly  affect these controls subsequent to the
date of their  evaluation,  including  any  corrective  actions  with  regard to
significant deficiencies and material weaknesses.





                                       13
<PAGE>

                           PART II - OTHER INFORMATION


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, 2000,
          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, 2000  (incorporated  by
          reference to Exhibit 3.3 to the  Registrant's  Current  Report on Form
          8-K filed December 8, 2000, 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, 2000 (incorporated by reference to Exhibit
          4.1 to Amendment No. 1 to the Registrant's Form 8-A filed December 27,
          2000, 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
          10.7 to the  Registrant's  Annual  Report on Form 10-K for the  Fiscal
          Year Ended December 31, 1997, 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,
          2000, 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: November 1, 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>

                                  CERTIFICATION


         I, F. William Kuethe, Jr., certify that:

     1. I have  reviewed  this  Quarterly  Report  on Form  10-Q of Glen  Burnie
Bancorp;

     2. Based on my knowledge, this Quarterly Report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this Quarterly
Report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this Quarterly  Report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
Registrant as of, and for, the periods presented in this Quarterly Report;

     4. The  Registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  Registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the Registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this Quarterly Report (the "Evaluation Date"); and

     c)   presented  in  this  Quarterly   Report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5. The Registrant's other certifying  officers and I have disclosed,  based
on our most  recent  evaluation,  to the  Registrant's  auditors  and the  audit
committee  of  Registrant's  board  of  directors  (or  persons  performing  the
equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  Registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  Registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  Registrant's  internal
          controls; and

     6. The Registrant's other certifying  officers and I have indicated in this
Quarterly  Report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: November 1, 2002                          /s/ F. William Kuethe, Jr.
                                           -------------------------------------
                                           F. William Kuethe, Jr.
                                           Chief Executive Officer





                                       16
<PAGE>

                                  CERTIFICATION


     I, John E. Porter, certify that:

     1. I have  reviewed  this  Quarterly  Report  on Form  10-Q of Glen  Burnie
Bancorp;

     2. Based on my knowledge, this Quarterly Report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this Quarterly
Report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this Quarterly  Report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
Registrant as of, and for, the periods presented in this Quarterly Report;

     4. The  Registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we have:

     d)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  Registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     e)   evaluated the  effectiveness of the Registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this Quarterly Report (the "Evaluation Date"); and

     f)   presented  in  this  Quarterly   Report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

     5. The Registrant's other certifying  officers and I have disclosed,  based
on our most  recent  evaluation,  to the  Registrant's  auditors  and the  audit
committee  of  Registrant's  board  of  directors  (or  persons  performing  the
equivalent function):

     c)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  Registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  Registrant's  auditors any material  weaknesses in
          internal controls; and

     d)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  Registrant's  internal
          controls; and

     6. The Registrant's other certifying  officers and I have indicated in this
Quarterly  Report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: November 1, 2002                           /s/ John E. Porter
                                           -------------------------------------
                                           John E. Porter
                                           Chief Financial Officer





                                       17
<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  September 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: November 1, 2002                              /s/ F. William Kuethe, Jr.
                                           -------------------------------------
                                           F. William Kuethe, Jr.
                                           President, Chief Executive Officer


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



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