-----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, DrX+DkKgiLMrgRmFr9I6rrLOg87VKo7VISLZxa4GhpsrJ06J8CT7xH7YIKlCC6Jc TkDm+EXxEtmFR5S0rzHdpQ== 0000818999-97-000004.txt : 19970513 0000818999-97-000004.hdr.sgml : 19970513 ACCESSION NUMBER: 0000818999-97-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970512 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: 97601090 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 U.S. Securities and Exchange Commission Washington D.C. 20549 Form 10-QSB X QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED March 31, 1997. 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 Identification No.) 10333 N. Meridian Street, Suite 111, Indianapolis, Indiana - ----------------------------------------------------------------- (Address of principal executive offices) 46290 (317) 573-2400 - -------------------------- ------------------------------ (Zip Code) (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 FORM 10-QSB INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Statement of Condition March 31, 1997 and December 31, 1996 3 Consolidated Statement of Operations Three Months Ended March 31, 1997 and 1996 4 Consolidated Statement of Cash Flows Three Months Ended March 31, 1997 and 1996 5 Notes to Consolidated Financial Statements 6 Item 2. Managements's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 EXHIBITS 14 page 2 MetroBanCorp Part I - Financial Information Item 1. Financial Statements Consolidated Statement of Condition (unaudited) (dollars in thousands)
03/31/97 12/31/96 -------- -------- Assets Cash and Due from Banks $ 4,732 $ 7,475 Federal Funds Sold - 6,300 -------- -------- Total Cash and Cash Equivalents 4,732 13,775 Investment Securities HTM - at Cost 10,060 10,056 Investment Securities AFS - at Market 20,370 21,160 -------- -------- Total Investment Securities 30,430 31,216 Loans: Gross Loans 69,956 65,385 Less: Allowance for Loan Losses (891) (866) -------- -------- Loans, Net 69,065 64,519 Premises and Equipment, Net 1,646 1,821 Accrued Interest Receivable 911 871 Core Deposit Intangible, Net 287 322 Deferred Tax Asset 376 360 Other Assets 427 499 -------- -------- Total Assets $107,874 $113,383 ======== ======== Liabiities Deposits: Non-Interest Bearing Demand $ 15,057 $ 23,141 Interest Bearing: Savings and Now Accounts 36,875 35,507 Time Deposit of $100,000 and above 11,152 10,800 Other Time Deposits 29,797 29,836 -------- -------- Total Deposits 92,881 99,284 Federal Funds Purchased 600 - Securities Sold under Agreements to Repurchase 1,500 1,500 Accrued Interest Payable 462 419 Other Liabilities 881 679 -------- -------- Total Liabilities 96,324 101,882 -------- -------- Commitments and Contingencies - - Shareholders' Equity Preferred Stock: 1,000,000 Shares Authorized; None Outstanding - - Common Stock: 3,000,000 Shares Authorized; 1,681,291 Shares Issued and Outstanding 11,210 11,210 Accumulated Earnings 479 407 Net Unrealized Loss on Investment Securities AFS (139) (116) -------- -------- Total Shareholder's Equity 11,550 11,501 -------- -------- Total Liabilities and Shareholders' Equity $107,874 $113,383 ======== ======== See "Notes to Consolidated Financial Statements"
page 3 MetroBanCorp Part I - Financial Information Item 1. Financial Statements Consolidated Statement of Operations (unaudited) (dollars in thousands, execpt share data)
Three Months Ended ----------------------- 03/31/97 03/31/96 -------- -------- Interest Income Interest and Fees on Loans $ 1,595 $ 1,444 Interest on Investment Securities 414 373 Interest on Federal Funds Sold 4 68 -------- -------- Total Interest Income 2,013 1,885 Interest Expense Interest on Deposits 869 859 Other Interest Expense 9 4 -------- -------- Total Interest Expense 878 863 -------- -------- Net Interest Income 1,135 1,022 -------- -------- Provision for Loan Losses 29 16 -------- -------- Net Interest Income after Provision for Loan Losses 1,106 1,006 -------- -------- Non-Interest Income Service Charges on Deposit Accounts 75 73 Loss on Sale of Investment Securities - (12) Other Service Charges, Commissions and Fees 169 87 -------- -------- Total Non-Interest Income 244 148 Non-Interest Expense Salaries and Employee Benefits 458 403 Occupancy Expense 74 54 Equipment Expense 82 73 Advertising and Public Relations 46 40 Legal, Professional and Audit Services 42 21 Data Processing 70 59 Student Loan Servicing Fees 22 29 FDIC Insurance Assessment 20 37 Amortization of Core Deposit Intangible 35 35 Other 241 172 -------- -------- Total Non-Interest Expense 1,090 923 Income before Income Taxes 260 231 Applicable Income Taxes 105 102 -------- -------- Net Income $ 155 $ 129 ======== ======== Net Income per Weighted Average Share $ 0.09 $ 0.08 Weighted Average Shares Outstanding 1,681,291 1,681,291 See "Notes to Consolidated Financial Statements"
page 4 MetroBanCorp Part I - Financial Information Item 1. Financial Statements Consolidated Statement of Cash Flows (unaudited) (dollars in thousands)
Three Months Ended -------------------- 03/31/97 03/31/96 -------- -------- Cash Flows from Operating Activities: Net Income $ 155 $ 129 Adjustments to Reconcile Net Income to Cash Provided by Operating Activities: Provision for Loan Losses 29 16 Deferred Income Tax Provision - 9 Depreciation and Amortization 102 94 Gain on Sale of Real Estate (56) - Net Loss on Sale of Investment Securities - (12) (Increase)/Decrease in Accrued Interest Receivable (40) 61 Decrease in Other Assets 72 123 Increase/(Decrease) in Accrued Interest Payable 43 (8) Increase in Other Liabilities 208 64 -------- -------- Total Adjustments 358 347 -------- -------- Net Cash Flows Provided by Operating Activities 513 476 -------- -------- Cash flows from Investing Activities: Proceeds from Maturities of Investment Securities HTM - 318 Proceeds from Sales of Investment Securities AFS 1,738 2,000 Purchases of Investment Securities AFS (999) (3,136) Proceeds from the Repayment of Student Loans 373 568 Proceeds from the Sale of Student Loans 170 2 Net Loans made to Customers (5,118) (2,151) Purchases of Premises and Equipment (294) (194) Proceeds from the Sale of Real Estate 461 - -------- -------- Net Cash Flows Used in Investing Activities (3,669) (2,593) -------- -------- Cash Flows from Financing Activities: Net Decrease in DDA, NOW and Savings Accounts (6,716) (4,976) Net Increase in Time Deposits 313 982 Net Increase in Federal Funds Purchased 600 - Net Securities Sold Under an Agreement to Repurchase - (900) Payment of Dividends (84) - -------- -------- Net Cash Flows Used in Financing Acitivities (5,887) (4,894) -------- -------- Net Decrease in Cash and Cash Equivalents (9,043) (7,011) Cash and Cash Equivalents at Beginning of Period 13,775 18,082 -------- -------- Cash and Cash Equivalents at End of Period $ 4,732 $ 11,071 ======== ======== See "Notes to Consolidated Financial Statements"
page 5 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 condition of Metro as of March 31, 1997 and December 31, 1996, and the results of its operations and its statement of cash flows for the three months ended March 31, 1997 and 1996. These financial statements should be read in conjunction with Metro's latest Annual Report on Form 10-KSB for the year ending December 31, 1996. 2. Investments ----------- The market value and amortized cost of investment securities of Metro as of March 31, 1997 are set forth below:
Market Value Amortized Cost ------------ -------------- Held to Maturity $ 9,553,000 $ 10,060,000 Available for Sale 20,370,000 20,569,000 ------------ -------------- Total Investments $ 29,923,000 $ 30,629,000 ============ ==============
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 March 31, 1997, Metro had investments in loans which are impaired in accordance with SFAS Nos. 114 and 118 of $13,190. Of this amount, $5,756 had no related specific allowance. The remaining impaired loans had a specific allowance of $7,434. 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 on a loan which is classified as non-accrual are utilized to reduce the principal outstanding. For the three months ended March 31, 1997, the average balance of impaired loans was $66,574. Additionally, there was no interest income earned on these loans during the first three months of 1997. page 6 4. Mortgage Servicing Rights ------------------------- 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. Metro adopted the provisions of this statement effective January 1, 1996, and it 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 as of March 31, 1997 as compared to December 31, 1996, and the results of operations for the three month periods ending March 31, 1997 and 1996. FINANCIAL CONDITION At March 31, 1997, Metro had total assets of $107.9 million, a decrease of $5.5 million or 4.9 percent from December 31, 1996. This reduction is due to a decrease in interest bearing deposits and securities sold under agreements to repurchase. Consolidated earning assets totaled to $100.4 million or 93.0 percent of total assets at March 31, 1997. The principal components of earning assets were loans in the amount of $69.9 million or 69.7 percent of total earning assets, and investment securities of $30.4 million or 30.3 percent of total earning assets. Earning assets at December 31, 1996 were $102.9 million, and as a percentage of total assets amounted to 90.7 percent. This $2.5 million decrease in earning assets in the first quarter of 1997 is due principally to a reduction of Federal Funds Sold partially offset by an increase in loans. LOANS - ----- Total loans outstanding increased $4.6 million or 7.0 percent since December 31, 1996 due to an increase in short-term and intermediate- term commercial and installment loans. This growth is a result of increased indirect lending in installment and new growth in the commercial loan portfolio. The overall loan demand has been relatively strong in Metro's market area. At March 31, 1997, net loans amounted to 64.0 percent of total assets as compared to 56.9 percent at year end 1996. The Bank's loan to deposit ratio, which is one measure of liquidity, was 74.4 percent at March 31, 1997, as compared to 65.0 percent at year end 1996. page 7 Loan Portfolio at Period-End (dollars in thousands)
03/31/97 12/31/96 % Change -------- -------- -------- Commercial $ 39,954 $ 35,064 13.95% Real Estate - Construction 3,660 3,970 -7.81% Mortgage 719 787 -8.64% Installment 16,535 15,933 3.78% Student Loans 9,088 9,631 -5.64% -------- -------- -------- Total Loans $ 69,956 $ 65,385 6.99% Less: Allowance for Loan Losses (891) (866) 2.89% -------- -------- -------- Net Loans $ 69,065 $ 64,519 7.05% ======== ======== ========
Delinquent loans at March 31, 1997 were $1.2 million, representing 1.7 percent of total loans. At December 31, 1996, delinquent loans amounted to $1.3 million or 2.0 percent of total loans outstanding. Delinquent loans in both periods shown above consisted primarily of student loans guaranteed by USA Funds, a subsidiary of USA Group, Inc. Non-accruing loans at March 31, 1997 amounted to $13,190 as compared to $157,443 at December 31, 1996. Net charged-off loans amounted to $3,893 for the three months ending March 31, 1997. At March 31, 1997 and December 31, 1996, the Bank had an allowance for loan losses of $891,000 and $866,000, respectively. The percentage of provision for loan losses to ending loans amounted to 1.27 percent and 1.32 percent for March 31, 1997 and December 31, 1996, 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 and is based upon an assessment of adequacy of the Bank's loan loss reserve account. page 8 Allowance for Loan Losses (dollars in thousands)
Three Months Ended ----------------------- 03/31/97 03/31/96 -------- -------- Allowance for Loan Losses, January 1 $ 866 $ 910 Loans Charged-Off: Commercial (9) - Real Estate - - Mortgage - - Installment - (2) Student Loans - - -------- -------- Total Charged-Off Loans (9) (2) -------- -------- Recoveries on Charged-Off Loans: Commercial 5 1 Real Estate - - Mortgage - - Installment - - Student Loans - - -------- -------- Total Recoveries 5 1 -------- -------- Net Charged-Off Loans (4) (1) -------- -------- Provision for Loan Losses 29 16 -------- -------- Allowance for Loan Losses, March 31 $ 891 $ 925 ======== ======== Average Loans Outstanding $ 67,456 $ 61,027 ======== ======== Net Charged-Off loans to Average Loans .006% .002% ======== ========
INVESTMENT SECURITIES - --------------------- Total investments at March 31, 1997 were $30.4 million, decreasing by $786,000 or 2.5 percent from the amount at December 31, 1996. page 9 DEPOSITS - -------- Total deposits at March 31, 1997 amounted to $92.9 million in comparison to $99.3 million at December 31, 1996, representing a decrease of $6.4 million or 6.4 percent. Since December 31, 1996, non- interest bearing demand deposits decreased by $8.1 million or 34.9 percent. This change in demand deposits relates to timing differences of deposits and withdrawals. The Bank historically experiences a build up of deposits during the fourth quarter, followed by a decline during the next three quarters. In the first three months of 1997, interest bearing deposits increased by $1.7 million or 2.2 percent. OTHER LIABILITIES - ----------------- Short-term borrowings, which includes federal funds purchased and securities sold under an agreement to repurchase, increased $600,000 since December 31, 1996. Other liabilities increased to $881,000 from $679,000 from December 31, 1996. Total liabilities decreased by $5.6 million or 5.5 percent to $96.3 million since December 31, 1996. CAPITAL - ------- Metro's total capital increased by a net amount of $49,000 or .43 percent during the first three months of 1997. Metro's earnings in the first three months of 1997 amounted to $155,000. The net unrealized loss on investment securities available for sale amounted to $139,000 at March 31, 1997, increasing by $23,000 or 19.8 percent since December 31, 1996. During March, 1997, capital decreased by approximately $84,065 in 1997 following the payment of a $.05 cash dividend on 1,681,291 common shares outstanding. Metro is subject to various capital requirements imposed by the federal banking agencies. Quantitative measures established by regulation to ensure capital adequacy require Metro to maintain minimum amounts and ratios of total Tier 1 capital (as defined in the regulations) to risk-weighted assets, and Tier 1 capital to average assets. Management believes, as of March 31, 1997, that Metro meets all capital adequacy requirements to which it is subject. The following table sets forth the actual and minimum capital amount and ratio's of Metro and the Bank as of March 31, 1997 (dollars in thousands): page 10
To Be Well Capitalized Under Prompt Corrective Actual Action Provisions ------------------ --------------------- Amount Ratio Amount Ratio -------- ------- -------- ------- Total Capital (to Risk Weighted Assets) Consolidated 12,282 17.43% > 7,047 > 10.00% Bank 8,731 12.53% > 6,967 > 10.00% Tier 1 Capital (to Risk Weighted Assets) Consolidated 11,401 16.18% > 4,228 > 6.00% Bank 7,860 11.28% > 4,180 > 6.00% Tier 1 Capital (to Average Assets) Consolidated 11,401 10.68% > 5,338 > 5.00% Bank 7,860 7.59% > 5,178 > 5.00%
As of December 31, 1996, the most recent notification from the FDIC categorized the Bank as "well capitalized" under the regulatory framework for prompt corrective action. To be categorized as "well capitalized", the Bank must maintain minimum total risk-weighted, Tier 1 capital and leverage ratios as set forth in the table. There are no conditions or events since this notification that management believes have changed its or the Bank's capital category. RESULTS OF OPERATIONS NET INTEREST INCOME - ------------------- Net interest income after provision for loan losses was $1.1 million for the three months ending March 31, 1997, compared to $1.0 million for the comparable period of 1996, an increase of 9.9 percent. Net interest income increased principally due to growth in the loan portfolio for the first quarter of 1997. The Bank's provision for loan loss expense was $29,000 for three months ended March 31, 1997, compared to $16,000 for the same period in 1996. The provisions made in 1997 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. page 11 NON-INTEREST EXPENSE - -------------------- Non-interest expense amounted to $1.1 million for three months ending March 31, 1997, compared to $923,000 for the same period in 1996, amounting to a $167,000 or an 18.1 percent increase. This increase in Metro's non-interest expense is due principally to growth in addition- al staffing, placement of offsite automated teller machines and the opening of a new branch office facility. NET INCOME - ---------- Metro recognized net income of $155,000 for the three month period ending March 31, 1997, compared to $129,000 for the same period one year earlier. PART II-OTHER INFORMATION ------------------------- Item 5. Other Information - ------- ----------------- During the first quarter of 1997, the Bank opened its Noble Creek banking office located at 2025 Cherry Street , Noblesville, Indiana. This new facility commenced operations on March 18, 1997. The development of the Bank's Noble Creek office is part of the continuing commercial expansion of Noblesville's east side. The new office allows the bank to provide greater convenience and accessibility for local businesses and area residents. Item 6. Exhibits and Reports on Form 8-K - ------- -------------------------------- (a) Exhibits: Exhibit 10 Lease dated March 18, 1997 between Registrant and Riverview Hospital with respect to property at 2025 Cherry Street, Noblesville, Indiana Exhibit 27 Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter ended March 31, 1997. page 12 SIGNATURES ---------- In accordance with the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. METROBANCORP (Registrant) May 12, 1997 By: /S/ Ike G. Batalis ----------------------- Ike G. Batalis Chairman and President (Principal Executive Officer) May 12, 1997 By: /S/ Charles V. Turean ----------------------- Charles V. Turean Executive Vice President (Principal Financial and Accounting Officer) page 13 EX-10 2 EXHIBIT 10 LEASE AGREEMENT The Bank entered into a renewable lease agreement with Riverview Hospital, a non-affiliated corporation, for a retail banking facility. A summary of the lease terms is provided below. Lessee: MetroBank Location: 2025 Cherry Street, Noblesville, Indiana Purpose: Retail Banking Office Space: 1,410 Square Feet Commencement Date: 03/18/1997 Expiration Date: 03/18/2002 Renewal Options: Three (3) additional terms of five (5) years each Basic Rent: $17.76 per rentable square foot per year EX-27 3
9 1000 3-MOS DEC-31-1997 MAR-31-1997 4,732 0 0 0 20,370 30,629 29,923 69,956 891 107,874 92,881 2,100 1,343 0 0 0 11,210 340 107,874 1,595 414 4 2,013 869 9 1,135 29 0 1,090 260 155 0 0 155 .09 0 4.26 13 325 0 837 866 9 5 891 891 0 0
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