-----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, P5Lz9FUV6CTFxtlqP7TUt14kM2nwxkasMk4UvoRifk+8HpSz6iDqG3vaDQT6QYIh 4G9Pv88BSE2buAey2DJPPg== 0000926274-98-000206.txt : 19980514 0000926274-98-000206.hdr.sgml : 19980514 ACCESSION NUMBER: 0000926274-98-000206 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980513 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: SEC FILE NUMBER: 000-23790 FILM NUMBER: 98617965 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 (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ___________ TO ___________ Commission File Number 0-23790 ------------------- METROBANCORP ---------------------------------------------- (Name of Small Business Issuer in its charter) INDIANA 35-1712167 - ----------------------- --------------------- (State of incorporation) I.R.S. Employer Identification Number 10333 N. MERIDIAN STREET, SUITE 111, INDIANAPOLIS, INDIANA 46290 ---------------------------------------------------------------- (Address of principal executive offices and zip code) (317) 573-2400 --------------------------- (Issuer's telephone number) http://www.metb.com ----------------------------------- (Issuer's Internet Website Address) 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: 1,765,308 Shares of Common Stock -------------------------------- Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X] METROBANCORP FORM 10-QSB INDEX PART I. FINANCIAL INFORMATION Page ---- Item 1. Financial Statements Consolidated Statement of Condition March 31, 1998 and December 31, 1997 3 Consolidated Statement of Operations Three Months Ended March 31, 1998 and 1997 4 Consolidated Statement of Cash Flows Three Months Ended March 31, 1998 and 1997 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION Item 5. Other Information 12 Item 6. Exhibits and Reports on Form 8-K 12 SIGNATURES 13 EXHIBITS METROBANCORP PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CONDITION (unaudited) (dollars in thousands) 03/31/98 12/31/97 ---------- ---------- Assets Cash and Due from Banks $ 13,385 $ 9,595 Federal Funds Sold 9,400 7,500 ---------- ---------- Total Cash and Cash Equivalents 22,785 17,095 Investment Securities HTM - at Cost 9,492 9,519 Investment Securities AFS - at Market 19,519 18,518 ---------- ---------- Total Investment Securities 29,011 28,037 Loans: Gross Loans 77,831 77,295 Less: Allowance for Loan Losses (1,081) (998) ---------- ---------- Loans, Net 76,750 76,297 Premises and Equipment, Net 1,426 1,406 Accrued Interest Receivable 777 834 Core Deposit Intangible, Net 146 182 Deferred Tax Asset 392 419 Other Assets 399 448 ---------- ---------- Total Assets $131,686 $124,718 ========== ========== Liabilities Deposits: Non-Interest Bearing Demand $ 28,997 $ 28,552 Interest Bearing: Savings and NOW Accounts 45,938 40,500 Time Deposits of $100,000 and over 14,256 12,530 Other Time Deposits 28,885 29,652 ---------- ---------- Total Deposits 118,076 111,234 Accrued Interest Payable 443 426 Other Liabilities 942 926 ---------- ---------- Total Liabilities 119,461 112,586 ---------- ---------- Commitments and Contingencies - - Shareholders' Equity Preferred Stock: 1,000,000 Shares Authorized; None Outstanding - - Common Stock: 3,000,000 Shares Authorized; 1,765,308 Shares Issued and Outstanding 12,134 11,210 Accumulated Earnings 55 880 Net Unrealized Gain on Investment Securities AFS 36 42 ---------- ---------- Total Shareholders' Equity 12,225 12,132 ---------- ---------- Total Liabilities and Shareholders' Equity $131,686 $124,718 ========== ==========
See "Notes to Consolidated Financial Statements" 3 METROBANCORP PART I -FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF OPERATIONS (unaudited) Three Months Ended (dollars in thousands, except share data) ------------------------------ 03/31/98 03/31/97 ------------ ------------ Interest Income Interest and Fees on Loans $ 1,908 $ 1,595 Interest on Investment Securities 357 414 Interest on Federal Funds Sold 115 4 ------------ ------------ Total Interest Income 2,380 2,013 Interest Expense Interest on Deposits 1,032 869 Other Interest Expense - 9 ------------ ------------ Total Interest Expense 1,032 878 ------------ ------------ Net Interest Income 1,348 1,135 ------------ ------------ Provision for Loan Losses 75 29 ------------ ------------ Net Interest Income after Provision for Loan Losses 1,273 1,106 ------------ ------------ Non-Interest Income Service Charges on Deposit Accounts 79 75 Loss on Sale of Investment Securities (8) - Other Service Charges, Commissions and Fees 128 169 ------------ ------------ Total Non-Interest Income 199 244 Non-Interest Expense Salaries and Employee Benefits 503 458 Occupancy Expense 104 74 Equipment Expense 87 82 Advertising and Public Relations 65 46 Legal, Professional and Audit Services 54 42 Data Processing 80 70 Student Loan Servicing Fees 11 22 FDIC Insurance Assessment 7 20 Amortization of Core Deposit Intangible 36 35 Other 221 241 ------------ ------------ Total Non-Interest Expense 1,168 1,090 Income before Income Taxes 304 260 Applicable Income Taxes 121 105 ------------ ------------ Net Income $ 183 $ 155 ============ ============ Net Income per Common Share $ 0.10 $ 0.09 Net Income per Common Share - Assuming Dilution $ 0.10 $ 0.09 Weighted Average Shares Outstanding 1,765,308 1,765,308 Weighted Average Shares Outstanding - Assuming Dilution 1,847,241 1,769,503
See "Notes to Consolidated Financial Statements" 4 METROBANCORP PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited) Three Months Three Months (dollars in thousands) Ended Ended ------------ ------------ 03/31/98 03/31/97 ------------ ------------ Cash Flows from Operating Activities: Net Income $ 183 $ 155 Adjustments to Reconcile Net Income to Cash Provided by Operating Activities: Provision for Loan Losses 75 29 Depreciation and Amortization 106 102 Gain on Sale of Real Estate - (56) Loss on Sale of Securities 8 - (Increase)/Decrease in Accrued Interest Receivable 57 (40) Decrease in Other Assets 49 72 Increase in Accrued Interest Payable 17 43 Increase in Other Liabilities 16 208 ------------ ------------ Total Adjustments 328 358 ------------ ------------ Net Cash Flows Provided by Operating Activities 511 513 ------------ ------------ Cash Flows from Investing Activities: Proceeds from Maturities of Investment Securities Held to Maturity 19 - Proceeds from Maturities of Investment Securities Available for Sale - 1,738 Proceeds from Sales of Investment Securities Available for Sale 4,198 - Purchases of Investment Securities Available for Sale (5,174) (999) Proceeds from the Sale of Student Loans - 170 Proceeds from the Repayment of Student Loans 77 373 Net Loans Made to Customers (605) (5,118) Purchases of Premises and Equipment (94) (294) Proceeds from the Sale of Real Estate - 461 ------------ ------------ Net Cash Flows Used in Investing Activities (1,579) (3,669) ------------ ------------ Cash Flows from Financing Activities: Net Increase/(Decrease) in DDA, NOW and Savings Accounts 5,883 (6,716) Net Increase in Time Deposits 959 313 Net Decrease in Federal Funds Purchased - (900) Net Increase in Securities Sold Under Agreements to Repurchase - 1,500 Cash Dividends Paid (84) (84) ------------ ------------ Net Cash Flows Provided by/(Used in) Financing Activities 6,758 (5,887) ------------ ------------ Net Increase/(Decrease) in Cash and Cash Equivalents 5,690 (9,043) Cash and Cash Equivalents at Beginning of Period 17,095 13,775 ------------ ------------ Cash and Cash Equivalents at End of Period $ 22,785 $ 4,732 ============ ============
See "Notes to Consolidated Statements" 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, 1998 and December 31, 1997, and the results of its operations and cash flows for the three months ended March 31, 1998 and 1997. These financial statements should be read in conjunction with Metro's latest Annual Report on Form 10-KSB for the year ending December 31, 1997. 2. Investments ----------- The market value and amortized cost of investment securities of Metro as of March 31, 1998 are set forth below: Market Value Amortized Cost ------------ -------------- Held to Maturity $ 9,351,000 $ 9,492,000 Available for Sale 19,519,000 19,419,000 ------------ ------------ Total Investments $ 28,870,000 $ 28,911,000 ============ ============ 3. Allowance for Loan and Lease Losses ----------------------------------- As of March 31, 1998, Metro had investments in loans which are impaired in accordance with SFAS Nos. 114 and 118 of $163,813. Of this amount, $155,851 had no related specific allowance. The remaining $7,962 of impaired loans were fully reserved. Metro's policy for recognizing income on impaired loans is to accrue earnings until a loan is classified as impaired. For loans which receive the classification of impaired during the current period, interest accrued to date is charged against current earnings. All payments received on a loan which is classified as impaired are utilized to reduce the principal outstanding. For the three months ended March 31, 1998, the average balance of impaired loans was $40,079. Additionally, there was $1,254 in interest income earned on these loans during the first three months of 1998. 6 4. Comprehensive Income -------------------- During the first quarter of 1998, Metro adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income." Comprehensive Income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. It includes all changes in equity during a period except those resulting from investment by owners and distributions to owners. In Metro's case, comprehensive income includes net income and unrealized gains and losses of available for sale securities. Total comprehensive income was $177,000 and $132,000 for the three month period ended March 31, 1998 and 1997, respectively. 5. Per Share Data -------------- Basic net income per common share is computed by dividing net income by the weighted average number of common shares outstanding during each year. Net income per common share, assuming full dilution, is computed as above except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares (stock options) had been issued. Below is a table reconciling basic net income per common share and net income per common share - assuming full dilution:
For the Three Months Ended ------------------------------------------------------------------------------------- March 31, March 31, 1998 1997 ----------------------------------------- ------------------------------------------ Income Shares Per Share Income Shares Per Share (Numerator) (Denominator) Amount (Numerator) (Denominator) Amount ----------------------------------------- ------------------------------------------ Net Income per Common Share Income Available to Common Stockholders $ 183,000 $ 1,765,308 $ 0.10 $ 155,000 $ 1,765,308 $ 0.09 ========= ========= Effects of Dilutive Options Stock Options - 81,933 - 4,195 ---------------------------- ----------------------------- Net Income per Common Share - Assuming Dilution $ 183,000 $ 1,847,241 $ 0.10 $ 155,000 $ 1,769,503 $ 0.09 ========================================= ==========================================
Per share data included in Metro's consolidated statement of operations for the three months ended March 31, 1998 and 1997 was based on the weighted average number of common shares outstanding. 7 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, 1998 as compared to December 31, 1997, and the results of operations for the three month periods ending March 31, 1998 and 1997. FINANCIAL CONDITION At March 31, 1998, Metro had total assets of $131.7 million, an increase of $7.0 million or 5.6 percent from December 31, 1997. This increase is due to an increase in interest bearing deposits. Consolidated earning assets totaled to $116.2 million, or 88.3 percent of total assets, at March 31, 1998. The principal components of earning assets were loans in the amount of $77.8 million or 67.0 percent of total earning assets, and investment securities of $29.0 million or 25.0 percent of total earning assets. Earning assets at December 31, 1997 were $112.8 million, or 90.5 percent of total assets. LOANS - ----- Total gross loans outstanding increased $.5 million or .7 percent from December 31, 1997 to March 31, 1998. This growth is a result of increased indirect consumer lending and growth in the commercial loan portfolio. The overall loan demand has been relatively steady in Metro's market area. At March 31, 1998, net loans amounted to 58.3 percent of total assets as compared to 61.2 percent at year end 1997. The Bank's loan to deposit ratio, which is one measure of liquidity, was 65.0 percent at March 31, 1998, as compared to 68.6 percent at year end 1997.
LOAN PORTFOLIO AT PERIOD-END (dollars in thousands) March 31, 1998 December 31, 1997 % Change -------------- ----------------- -------- Commercial $47,621 $47,527 .20% Real Estate - Construction 3,417 3,689 -.07% Mortgage 593 646 -.08% Installment 21,311 20,467 4.10% Student Loans 4,889 4,966 -1.60% --------- --------- -------- Total Loans $77,831 $77,295 .69% Less: Allowance for Loan Losses (1,081) (998) 2.89% --------- --------- -------- Net Loans $76,750 $76,297 .59% ========= ========= ========
Delinquent loans at March 31, 1998 were $1.3 million, representing 1.6 percent of total loans. At December 31, 1997, delinquent loans amounted to $915,000 or 1.2 percent of total loans outstanding. Delinquent loans in both periods shown above consisted primarily of student loans 8 guaranteed by USA Funds, a subsidiary of USA Group, Inc. Non-accruing loans at March 31, 1998 amounted to $163,813 as compared to $9,701 at December 31, 1997. Net recoveries on charged-off loans amounted to $8,305 for the three months ending March 31, 1998. At March 31, 1998 and December 31, 1997, the Bank had an allowance for loan losses of $1,081,000 and $998,000, respectively. The percentage of provision for loan losses to ending loans amounted to 1.39 percent and 1.29 percent for March 31, 1998 and December 31, 1997, 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. ALLOWANCE FOR LOAN LOSSES THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (dollars in thousands)
1998 1997 ---- ---- Allowance for Loan Losses, January 1 $ 998 $ 866 Loans Charged-Off: Commercial - (9) Real Estate - - Mortgage - - Installment (10) - Student Loans - - --------- --------- Total Charged-Off Loans (10) (9) --------- --------- Recoveries on Charged-Off Loans: Commercial 10 5 Real Estate - - Mortgage - - Installment 8 - Student Loans - - --------- --------- Total Recoveries 18 5 --------- --------- Net Charged-Off Loans 8 (4) --------- --------- Provision for Loan Losses 75 29 --------- --------- Allowance for Loan Losses, March 31 $ 1,081 $ 891 ========= ========= Average Loans Outstanding $78,249 $67,456 ========= ========= Net Charged-Off loans to Average Loans .006% .006% ========= =========
9 INVESTMENT SECURITIES - --------------------- Total investments at March 31, 1998 were $29.0 million, increasing by $974,000 or 3.5 percent from the amount at December 31, 1997. DEPOSITS - -------- Total deposits at March 31, 1998 amounted to $118.1 million in comparison to $111.2 million at December 31, 1997, representing an increase of $6.8 million or 6.2 percent. Since December 31, 1997, non-interest bearing demand deposits increased by $445,000 or 1.6 percent. In the first three months of 1998, interest bearing deposits increased by $6.4 million or 7.7 percent. OTHER LIABILITIES - ----------------- Other liabilities increased to $942,000 from $926,000 from December 31, 1997. Total liabilities increased by $6.9 million or 6.1 percent to $119.5 million since December 31, 1997. CAPITAL - ------- Metro's total capital increased by a net amount of $93,000 or .76 percent during the first three months of 1998. Metro's earnings in the first three months of 1998 amounted to $183,000. The net unrealized gain on investment securities available for sale amounted to $36,000 at March 31, 1998, decreasing by $6,000 or 14.3 percent since December 31, 1997. Capital decreased by $84,065 in 1998 following the payment of a $.05 quarterly cash dividend in March, 1998. During the first quarter of 1998, the Board of Directors of Metro declared a five percent stock dividend issuable April 6, 1998 to shareholders of record as of March 18, 1998. Fractional shares resulting from the stock dividend were paid in cash. As a result, there were 84,017 shares issued, bringing the new number of common shares outstanding to 1,765,308. A transfer from accumulated earnings equity account to the common stock equity account in the amount of $924,000 followed the stock dividend issuance. 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, 1998, that Metro meets all capital adequacy requirements to which it is subject. The following table sets forth the actual and minimum capital amount and ratios of Metro and the Bank as of March 31, 1998 (dollars in thousands): 10
To Be Well Capitalized Under Prompt Corrective Actual Action Provisions ----------------------- ------------------------ Amount Ratio Amount Ratio -------- ------- -------- -------- Total Capital (to Risk Weighted Assets) Consolidated $13,123 15.59% > $8,418 > 10.00% Bank $ 9,959 11.91% > $8,362 > 10.00% Tier 1 Capital (to Risk Weighted Assets) Consolidated $12,042 14.31% > $5,051 > 6.00% Bank $ 8,878 10.62% > $5,017 > 6.00% Tier 1 Capital (to Average Assets) Consolidated $12,042 9.67% > $6,228 > 5.00% Bank $ 8,878 7.15% > $6,211 > 5.00%
As of December 31, 1997, 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. 11 RESULTS OF OPERATIONS NET INTEREST INCOME - ------------------- Net interest income after provision for loan losses was $1.3 million for the three months ending March 31, 1998, compared to $1.1 million for the comparable period of 1997, an increase of 15.1 percent. Net Interest income increased principally due to growth in earning assets for the first quarter of 1998. The Bank's provision for loan loss expense was $75,000 at March 31, 1998, compared to $29,000 for the same period in 1997. The provision made in 1998 was 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 $1.2 million for the three month period ending March 31, 1998, compared to $1.1 million for the same period in 1997. NET INCOME - ---------- Metro recognized net income of $183,000 for the three month period ending March 31, 1998, compared to $155,000 for the same period one year earlier. PART II-OTHER INFORMATION ------------------------- Item 5. Other Information - -------------------------- During the first quarter of 1998, the Bank opened its sixth branch office located at 16825 Clover Road, Noblesville, Indiana. This new facility commenced operations on February 11, 1998. With the continuing commercial expansion of Noblesville's east side, MetroBank's presence will provide greater convenience and accessibility for local businesses and area residents with extended hours and an increased emphasis on sales of financial products and services. Item 6. Exhibits and Reports on Form 8-K - ----------------------------------------- (a) Exhibits: Exhibit 27 Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter ended March 31, 1998. 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 13, 1998 By: /S/ Ike G. Batalis ------------------------------------ Ike G. Batalis Chairman and President (Principal Executive Officer) May 13, 1998 By: /S/ Charles V. Turean ------------------------------------ Charles V. Turean Executive Vice President (Principal Financial and Accounting Officer) 13 EX-27 2
9 1,000 3-MOS DEC-31-1998 MAR-31-1998 13,385 0 9,400 0 19,519 9,492 28,870 77,831 1,081 131,686 118,076 0 942 0 0 0 12,134 91 131,686 1,908 357 115 2,380 1,032 0 1,348 75 (8) 1,168 304 183 0 0 183 .11 .11 4.39 164 239 0 1,023 998 10 18 1,081 1,081 0 1,032
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