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BUSINESS COMBINATIONS
 9 Months Ended
Sep. 30, 2025
Business Combination [Abstract]  
BUSINESS COMBINATION

NOTE 8 – BUSINESS COMBINATION

As of the close of business on August 15, 2025, The Bank of Glen Burnie (the “Bank”), a wholly owned subsidiary of Glen Burnie Bancorp (the “Company”), completed the acquisition of VA Wholesale Mortgage Incorporated, a Virginia-based residential mortgage banking and brokerage company (“VA Wholesale” or the “acquired company”). The transaction was affected pursuant to a Stock Purchase Agreement dated March 5, 2025, between the Bank and Eric Tan, the sole shareholder of VA Wholesale.

Under the terms of the agreement, the Bank acquired 100 percent of the outstanding common stock of VA Wholesale for consideration of $750,000, payable in advance and subject to  a 36-month service obligation in the form of a forgivable promissory note. The note provides for monthly forgiveness of one-thirty-sixth of the principal balance

contingent upon the continued employment of the Seller and satisfaction of specified performance and conduct conditions. The amortization of the note will be treated as compensation expense. In the event of noncompliance, the unamortized portion of the note would become immediately due and payable.

In addition, the Seller is eligible to receive contingent consideration (“earn-out”) equal to 33% of the net earnings of the acquired company plus 0.04 percent of total closed-loan volume during the three-year period following closing. Earn-out payments, if any, will be determined annually based on the acquired company’s audited financial results for each measurement year.

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations. The purchase price was allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the acquisition date and the probable contingent consideration which was estimated at $298,000. The excess of the purchase price above the fair value of net assets acquired was recorded as goodwill in the amount of $317,000. No value was assigned to any identifiable intangible assets.

The results of operations of VA Wholesale have been included in the Company’s consolidated financial statements beginning on August 16, 2025. The acquisition enhances the Bank’s mortgage origination capabilities and expands its presence in the Mid-Atlantic market area.