-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SXxYO2TPYrvNso20ArEwxTyhXqbHm+BjK+4s69Wu6T9/dBd8Nfs+mc4+2r9pB5o+ 20cCKUE7TtJXte+15xHz0Q== 0000818999-96-000002.txt : 19960816 0000818999-96-000002.hdr.sgml : 19960816 ACCESSION NUMBER: 0000818999-96-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960815 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: METROBANCORP CENTRAL INDEX KEY: 0000818999 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 351712167 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-23790 FILM NUMBER: 96615883 BUSINESS ADDRESS: STREET 1: 10333 N MERIDIAN ST STREET 2: SUITE 111 CITY: INDIANAPOLIS STATE: IN ZIP: 46290 BUSINESS PHONE: 3175732400 MAIL ADDRESS: STREET 1: 10333 N MERIDIAN STREET STREET 2: SUITE 111 CITY: INDIANAPOLIS STATE: IN ZIP: 46290 10QSB 1 THIS DOCUMENT IS A COPY OF THE QUARTERLY REPORT ON FORM 10-QSB FILED ON AUGUST 15, 1996 PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION. U.S. Securities and Exchange Commission Washington D. C. 20549 Form 10-QSB X QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996. Commission file number: 0-23790 MetroBanCorp (Exact name of small business issuer as specified in its charter) Indiana (State or other jurisdiction of incorporation or organization) 35-1712167 (I.R.S. Employer ID No.) 10333 N. Meridian Street, Suite 111, Indianapolis, Indiana (Address of principal executive offices) 46290 (zip code) (317) 573-2400 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by section 13 or 15 (d) of the Exchange Act during the past 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 State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 1,681,291 Transitional Small Business Disclosure Format: Yes No X METROBANCORP INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statement of Condition June 30, 1996 and December 31, 1995. . . . . .... .3 Consolidated Statement of Operations Three Months Ended June 30, 1996 and 1995. . . . . 4 Consolidated Statement of Operations Six Months Ended June 30, 1996 and 1995. . . . . . .5 Consolidated Statement of Cash Flows Six Months Ended June 30, 1996 and 1995 . . . . . .6 Notes to Consolidated Financial Statements. . . . . 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . 8 PART II. OTHER INFORMATION. . . . . . . . . . . . . . .13 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . .15 MetroBanCorp Part I - Financial Information Item 1. Financial Statements Consolidated Statement of Condition (unaudited) (dollars in thousands)
June 30, Dec. 31, 1996 1995 Assets Cash and Due from Banks 4,000 11,432 Federal Funds Sold 1,500 6,650 Total Cash and Cash Equivalents 5,500 18,082 Investment Securities Held to Maturity - at Amortized Cost 9,573 10,266 Investment Securities Available for Sale - at Market Value 21,095 18,809 Total Investment Securities 30,668 29,075 Loans: Gross Loans 65,981 60,452 Less: Allowance for Loan Losses (892) (910) Loans, Net 65,089 59,542 Premises and Equipment, Net 1,872 1,910 Accrued Interest Receivable 918 953 Core Deposit Intangible, Net 392 463 Deferred Tax Asset 335 365 Other Assets 366 489 Total Assets 105,140 110,879 Liabilities Deposits Non- Interest Bearing Demand 16,869 17,983 Interest Bearing: Savings and Now Accounts 36,083 41,199 Certificates of Deposit of $100,000 and over 11,849 8,697 Other Time Deposits 26,842 26,985 Total Deposits 91,643 94,864 Securities Sold under Agreements to Repurchase 1,300 3,900 Accrued Interest Payable 440 466 Other Liabilities 526 504 Total Liabilities 93,909 99,734 Commitments and Contingencies Shareholders' Equity Preferred Stock: 1,000,000 shares authorized: none outstanding 0 0 Common Stock: Authorized Shares - 3,000,000 Issued and Outstanding Shares - 1,681,291 11,210 11,210 Accumulated Earnings 224 119 Net Unrealized Loss on Investment Securities Available for Sale (203) (184) Total Shareholders' Equity 11,231 11,145 Total Liabilities and Shareholders' Equity 105,140 110,879 See "Notes to Consolidated Financial Statements."
MetroBanCorp Part I Financial Information Item 1. Financial Statements Consolidated Statement of Operations (unaudited) (dollars in thousands, except share data)
Three Three Months Months ended ended 06/30/96 06/30/95 Interest and Fees on Loans 1,509 1,436 Interest on Invest Securities 407 385 Interest on Federal Funds Sold 30 73 Total Interest Income 1946 1894 Interest Expense Interest on Deposits 860 844 Other Interest Expense 5 10 Total Interest Expense 865 854 Net Interest Income 1081 1040 Provision for Loan Losses 17 73 Net Interest Income after Provision for Loan Losses 1064 967 Other Income Service Charges on Deposit Accounts 76 77 Other Service Charges 118 122 Total Other Income 194 199 Non-Interest Income Salaries and Employee Benefits 413 379 Occupancy Expense 55 46 Equipment Expense 87 47 Advertising and Pubic Relations 40 57 Legal and Professional 26 17 Data Processing 60 43 Student Loan Servicing 28 39 FDIC Insurance Assessment 45 42 Amortization - Core Deposit Intangible 35 35 Other Expenses 207 134 Total Non-Interest Expense 996 839 Income Before Income Taxes 262 327 Income Tax Provision 118 116 Net Income 144 211 Net Income per Weighted Average Share .09 .13 Weighted Average Shares Outstanding 1,681,291 1,681,291 See "Notes to Consolidated Financial Statements."
MetroBanCorp Part I Financial Information Item 1. Financial Statements Consolidated Statement of Operations (unaudited) (dollars in thousands, except share data)
Six Six Months Months ended ended 06/30/96 06/30/95 Interest Income Interest and Fees on Loans 2,952 2,723 Interest on Investment Securities 781 773 Interest on Federal Funds Sold 98 74 Total Interest Income 3,831 3,570 Interest Expense Interest on Deposits 1,720 1,520 Other Interest Expense 9 25 Total Interest Expense 1,729 1,545 Net Interest Income 2,102 2,025 Provision for Loan Losses 33 151 Net Interest Income after Provision for Loan Losses 2,069 1,874 Other Income Service Charges on Deposit Accounts 149 152 Other Service Charges 193 204 Total Other Income 342 356 Non-Interest Income Salaries and Employee Benefits 815 742 Occupancy Expense 109 92 Equipment Expense 160 97 Advertising and Pubic Relations 81 108 Legal and Professional 45 24 Data Processing 120 88 Student Loan Servicing 58 81 FDIC Insurance Assessment 82 85 Amortization - Core Deposit Intangible 70 70 Other Expenses 378 332 Total Non-Interest Expense 1918 1719 Income Before Income Taxes 493 511 Income Tax Provision 220 209 Net Income 273 302 Net Income per Weighted Average Share .16 .18 Weighted Average Shares Outstanding 1,681,291 1,681,291 See "Notes to Consolidated Financial Statements."
MetroBanCorp Part I - Financial Information Item 1. - Financial Statements Consolidated Statement of Cash Flows (unaudited) (dollars in thousands)
Six Months Six Months ended ended June 30, 1996 June 30, 1995 Cash Flows from Operating Activities: Net Income 273 302 Adjustments to Reconcile Net Income to Cash Provided by Operating Activities: Provision for Loan Losses 33 151 Deferred Income Tax Provision/(Benefit) 17 (144) Depreciation and Amortization 194 153 Gain on Sale of Real Estate (35) 0 Net (Gain)/Loss on Sale of Securities 12 (2) (Increase)/Decrease in Accrued Interest Rec. 35 (64) Decrease in Other Assets 123 262 Decrease in Accrued Interest Payable (26) (13) Increase in Other Liabilities 20 160 Total Adjustments 373 503 Net Cash flows Provided by Operating Act. 646 805 Cash flows from Investing Activities Proceeds from maturities of Investment Securities Held to maturity 1,184 8 Purchases of Invest Sec Held to Maturity 0 0 Proceeds from sales of Invest Sec Available for Sale 2,365 489 Purchases of Invest Securities Available for Sale (5,123) 831 Proceeds from the Repayment of Student Loans 1,280 0 Net Loans made to Customers (6,860) (3,064) Purchases of Premises and Equipment (494) (366) Proceeds from the Sale of Real Estate 409 0 Net cash flows used in Investing Act. (7,239) (2,102) Cash flows from Financing Activities: Net Increase/(Decrease) in Demand Deposits NOW and Savings Accounts (6,230) 513 Net Increase in Certificates of Deposit 3,009 3,063 Net Securities sold under an Agreement to Repurchase (2,600) 4,100 Payment of Dividends (168) 0 Net Cash flows provided by /(Used in ) Financing Activities (5,989) 7,676 Net Decrease in Cash and Cash Equivalents (12,582) 6,379 Cash and Cash Equivalents at Beg of Period 18,082 4,296 Cash and Cash Equivalents at end of Period 5,500 10,675 See "Notes to Consolidated Financial Statements."
MetroBanCorp Notes to Consolidated Financial Statements 1. Basis of Presentation The consolidated financial statements include the accounts of MetroBanCorp and its wholly-owned affiliate, MetroBank (together; "Metro"). All significant intercompany transactions and balances have been eliminated. In the opinion of management of Metro, the consolidated financial statements contain all the normal and recurring adjustments necessary to present fairly the consolidated financial position of Metro as of June 30, 1996 and December 31, 1995, and the results of its operations for the three months and six months ended June 30, 1996 and 1995, and its statement of cash flows for the six months ended June 30, 1996 and 1995. These statements should be read in conjunction with Metro's latest Annual Report on Form 10-KSB for the year ending December 31, 1995. 2. Investments The market value and amortized cost of investment securities as of June 30, 1996 are set forth below:
Market Value Amortized Cost Held to Maturity, at amortized cost $ 8,804,000 $ 9,573,000 Available for Sale, at market value 21,095,000 21,439,000 Total Investments $29,899,000 $31,012,000
3. Allowance for Loan and Lease Losses Metro adopted the provisions of Statement of Financial Accounting Standard No. 114, "Accounting by Creditors for Impairment of a Loan," as amended by Statement of Financial Accounting Standard No. 118, on January 1, 1995. As of June 30, 1996, Metro had investments in loans which are impaired in accordance with SFAS No. 114 and 118 of $216,000. Of this amount, $192,000 had no related specific allowance. The remaining impaired loans had a specific allowance of $24,000. Metro's policy for recognizing income on impaired loans is to accrue earnings until a loan is classified non-accrual. For loans which receive the classification of non-accrual during the current period, interest accrued to date is charged against current earnings. All payments received for a loan which is classified as non-accrual are utilized to reduce the principal outstanding. For the six months ended June 30, 1996, the average balance of impaired loans was $111,799. Additionally, there was no interest income earned on these loans during 1996. 4. The Financial Accounting Standards Board has issued SFAS No. 122, "Accounting for Mortgage Servicing Rights," which modifies the accounting for mortgage servicing rights to allow the recognition of servicing assets whether they are purchased or originated. The provisions of this statement were adopted effective January 1, 1996, and did not have a material effect on Metro's consolidated financial condition or results of operations. ITEM 2. , MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following management discussion is presented to provide information concerning the consolidated financial condition of Metro and MetroBank ( "Bank" ), as of June 30, 1996 as compared to December 31, 1995, and the results of operations for the three and six month periods ending June 30, 1996 and 1995. FINANCIAL CONDITION At June 30, 1996, Metro had total assets of $105.1 million, a decrease of $5.7 million or 5.2 percent from December 31, 1995. This decrease resulted principally from a decrease in the Bank's interest bearing deposits and securities sold under agreements to repurchase. Consolidated earning assets amounted to $98.1 million or 93.3 percent of total assets at June 30, 1996. The principal components of earning assets were loans in the amount of $66.0 million or 67.3 percent of total earning assets, and investment securities of $30.7 million or 31.3 percent of total earning assets. Federal funds sold amounted to $1.5 million or 1.4 percent of total earning assets at June 30, 1996. Earning assets at December 31, 1995 were $96.2 million. Earning assets as a percentage of total assets amounted to 86.7 percent at December 31, 1995. This increase in earning assets in 1996 is due principally to increases in both the loan and investment portfolios during the first two quarters of 1996, combined with a decrease in non-earning assets. LOANS Total loans outstanding increased $5.5 million or 9.1 percent since December 31, 1995 due to an increase in short and intermediate term commercial and installment loans. This increase is a result of growth in the Bank's indirect lending portfolio as well as growth in the commercial portfolio. New business has been generated by the hiring of an experienced lender, as well as seasonal agricultural lending in the first two quarters of 1996. The overall loan demand has been relatively strong in the Bank's local marketplace. At June 30, 1996, net loans amounted to 61.9 percent of total assets as compared to 53.7 percent at year end 1995. The Bank's loan to deposit ratio, which is one measure of liquidity, was 72.0 percent at June 30, 1996, as compared to 63.7 percent at year end 1995. (This space intentionally left blank) Loan Portfolio at Period-End (dollars in thousands)
June 30, 1996 Dec. 31, 1995 %change Commercial and Financial 35,770 31,122 14.9% Real Estate - Construction 3,745 2,251 66.4% Mortgage Loans 735 838 (12.3%) Installment Loans 14,012 13,242 5.8% Student Loans 11,719 12,999 (9.8%) Total Loans 65,981 60,452 9.1% Less: Allow for Loan Losses 892 910 Net Loans 65,089 59,542
Delinquent loans at June 30, 1996 were $1.5 million, representing 2.3 percent of total loans. At December 31, 1995, delinquent loans amounted to $1.7 million or 2.8 percent of total loans outstanding. Delinquent loans in both periods shown above consisted primarily of student loans guaranteed by USA Group, Inc. Non-accruing loans at June 30, 1996 amounted to $216,000, as compared to $37,000 at December 31, 1995. Net charged-off loans amounted to $51,000, for the six months ending June 30, 1996. At June 30, 1996 and December 31, 1995, the Bank had an allowance for loan losses of $892,000 and $910,000, respectively. The percentage of provision for loan losses to ending loans amounted to 1.35 percent and 1.51 percent, for June 30, 1996 and December 31, 1995, respectively. The Bank provides for possible loan losses through regular provisions to the allowance for loan losses. The provisions are made at a level which is considered necessary by management to absorb estimated losses in the loan portfolio. (This space intentionally left blank) Allowance for Loan Losses Six Months ended June 30, 1996 (dollars in thousands)
1996 1995 Allowance for Loan Losses, Jan 1 $910 $586 Loans Charged Off: Commercial and Financial (46) (5) Real Estate 0 0 Installment (8) (2) Total Charged-Off Loans (54) (7) Recoveries on Charged-Off Loans: Commercial and Financial 1 2 Real Estate 0 0 Installment 2 5 Total Recoveries on Charged-off Loans 3 7 Net Charged off Loans (51) 0 Provision for Loan Losses 33 151 Allowance for Loan Losses, June 30 $892 $737 Average Loans Outstanding $62,275 $58,212 Net Charged-Off Loans to Ave Loans 0.08% 0.00%
INVESTMENT SECURITIES Total investments at June 30, 1996 were $30.7 million compared to $29.1 million at December 31, 1995. The increase in this category amounts to $1.6 million or 5.5 percent since December 31, 1995. In 1996 management has gradually converted lower yielding federal fund sold to higher yielding investment securities. DEPOSITS Total deposits at June 30, 1996 amounted to $91.6 million in comparison to $94.9 million at December 31, 1995, representing a decrease of $3.2 million or 3.4 percent. Since December 31, 1995, non-interest bearing demand deposits decreased by $1.1 million or 6.2 percent, due principally to the run off of deposits that build up at the end of the calendar year. In 1996 interest bearing deposits decreased by $2.1 million or 2.7 percent. (This space intentionally left blank) OTHER LIABILITIES Liabilities at June 30, 1996 included $1.3 million of securities sold under an agreement to repurchase, a decrease of $2.6 million since December 31, 1996. This decrease is due principally to the overall reduction in deposits since 1995 year end, including balances held by certain large customers of the Bank. At June 30, 1996, other liabilities also include accrued interest payable of $440,000 and accrued expense of $526,000. CAPITAL Metro's total capital increased by a net amount of $86,000 or .8 percent during the first six months of 1996. Metro's earnings in the first six months of 1996 amounted to $273,000. The net unrealized loss on investment securities available for sale amounted to $203,000 at June 30, 1996, increasing by $19,000 in 1996. Capital decreased by approximately $168,000 in 1996 following the payment of a cash dividend in June, 1996. Tier 1, or core capital, for Metro and the Bank consists of shareholders' equity less the net core deposit intangible and the non-qualifying portion of the deferred tax asset plus the net unrealized loss on investment securities available for sale. Total capital includes Tier 1 capital and the qualifying portion of the allowance for loan losses. The minimum requirements for a "well capitalized" classification are a Leverage Ratio of 5 percent, which is tier 1 capital divided by total assets, a Tier 1 Risk-Based Capital Ratio of 6 percent, which is Tier 1 capital divided by total risk- adjusted assets, and a Total Risk-Based Capital Ratio of 10 percent, which is total capital divided by total risk- adjusted assets. Under these guidelines, both Metro and the Bank exceeded the regulatory minimum ratios. (dollars in thousands)
(Consolidated) MetroBanCorp MetroBank Tier 1 Capital Shareholders' Equity 11,231 7,452 Less:Intangible asset, Net (392) (392) Non-qualifying deferred tax assets (152) 0 Add: Net Unrealized loss on Invest Securities Available for sale 203 189 Total Tier 1 Capital 10,890 7,249 Tier 2 Capital Add: Allowance for loan losses (limited to the lesser of 1.25% of adjusted total assets or the balance in the loan loss reserve account) 807 804 Total Capital 11,697 8,053 Risk-adjusted assets 64,479 64,199 Total capital to risk-adjusted assets 18.14% 12.54% Tier 1 capital to risk-adj assets 16.89% 11.29% Tier 1 capital to total assets (leverage ratio) 10.36% 7.14%
RESULTS OF OPERATIONS NET INCOME Metro recognized net income in the amount of $273,000 for the six month period ending June 30, 1996 compared to $302,000 for the same period one year earlier. Following an announcement made earlier in the second quarter of 1996, Metro paid a cash dividend of ten cents ($.10) per share of common stock to shareholders of record at May 14, 1996. The dividend was paid on June 14, 1996 and amounted to a total of $168,129. The dividend represents the second cash dividend paid in the history of the Corporation. NET INTEREST INCOME Net interest income, after provision for loan losses of $33,000, was $2.1 million for six months ending June 30, 1996, compared to $1.9 million for the comparable period of 1995, or an increase of 10.4 percent compared to the same period one year earlier. Net Interest income increased principally due to growth in loans and investments, combined with a reduction in the provision for loan losses for the first two quarters of 1996. The Bank's provision for loan loss expense was $33,000 at June 30, 1996, compared to $151,000 for the same period in 1995. The provisions made in 1996 were at a level considered necessary by management to absorb estimated losses in the loan portfolio and is based upon an assessment of the adequacy of the Bank's loan loss reserve account. NON-INTEREST EXPENSE Non-interest expense amounted to $1.9 million for six months ending June 30, 1996 compared to $1.7 million for the same period in 1995, with a $199,000 or 11.6 percent increase. The increase in 1996 is primarily attributable to the overhead expense incurred in the strategic deployment of the Bank's automated teller and loan machines in 1996. (This space intentionally left blank) PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders (a) Metro held its annual meeting of shareholders on April 25, 1996. (b) At the annual meeting, Metro's shareholders elected ten directors to serve until the next annual meeting of the shareholders and until their successors are duly elected, qualified and serving. The votes cast for the directors, at the annual meeting were as follows:
Number of votes Director's Name for withheld abstaining Chris G. Batalis 1,520,555 152,736 8,000 Ike G. Batalis 1,520,555 152,736 8,000 Terry L. Eaton 1,520,855 152,436 8,000 Evans M. Harrell 1,520,855 152,436 8,000 Robert L. Lauth, Jr. 1,520,855 152,436 8,000 Edward G. McMahon 1,520,555 152,736 8,000 Larry E. Reed 1,520,855 152,436 8,000 Russell D. Richardson 1,519,855 153,436 8,000 Edward R Schmidt 1,520,855 152,436 8,000 Donald F. Walter 1,520,855 152,436 8,000
(c) At the annual meeting, Metro's Shareholders ratified the appointment of Arthur Andersen, LLP, Indianapolis, Indiana as independent public accountants for MetroBanCorp and its subsidiaries for the fiscal year ending December 31, 1996. for: 1,522,835 withheld: 155,856 abstaining: 2,600 (d) At the annual meeting, Metro's shareholders ratified a proposal to increase the number of shares subject to issuance pursuant to the 1994 Stock Option and Stock Appreciation Rights Plan from 24,000 shares of common stock to 74,000 shares of common stock. for: 1,473,988 withheld: 195,986 abstaining: 11,317 Item 6. Exhibits and Reports on Form 8-K. (b) No reports on Form 8-K were filed during the second quarter of 1996. SIGNATURES In accordance with 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. METROBANCORP (Registrant) August 14, 1996 By: /S/ Ike G.Batalis Ike G. Batalis Chairman and President (Principal Executive Officer) August 14, 1996 By: /S/Charles V. Turean Charles V.Turean Executive Vice President (Principal Financial and Accounting Officer) EX-27 2 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
9 1000 YEAR DEC-31-1996 JUN-30-1996 4,000 0 1,500 0 21,095 9,573 0 65,981 892 105,140 91,643 0 2,266 0 0 0 11,210 21 2,952 781 98 3,831 0 1,729 2,102 33 0 1,918 493 0 0 0 273 0.16 0 0 0 0 0 0 0 0 0 0 0 0 0
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