-----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, GPMmdtuW/ot0oCdpJIjYD6lP9bEa3GBU1qrqemqdK8lhXAEAOx/yhNJsNJsGh0bP 2NSC70rClNLi7DWVJho5tA== 0000879635-96-000007.txt : 19961106 0000879635-96-000007.hdr.sgml : 19961106 ACCESSION NUMBER: 0000879635-96-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961104 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MID PENN BANCORP INC CENTRAL INDEX KEY: 0000879635 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 251666413 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20141 FILM NUMBER: 96653548 BUSINESS ADDRESS: STREET 1: 349 UNION ST CITY: MILLERSBURG STATE: PA ZIP: 17061 BUSINESS PHONE: 7176922133 MAIL ADDRESS: STREET 2: 349 UNION STREET CITY: MILLERSBURG STATE: PA ZIP: 17061 10-Q 1 MID PENN BANCORP 10-Q PERIOD ENDING JUNE 30, 1996 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 Commission file number 0-20141 Mid Penn Bancorp, Inc. (Exact name of registrant as specified in its charter) Pennsylvania 25-1666413 (State or other jurisdiction of (IRS Employer ID No) Incorporation or Organization) 349 Union Street, Millersburg, PA 17061 (Address of principal executive offices) (Zip Code) (717) 692-2133 (Registrant's telephone number, including area code) 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. [ X ] Yes [ ] No Indicate the number of shares outstanding of each of the classes of common stock, as of the latest practical date. 1,183,105 shares of Common Stock, $1.00 par value per share, were outstanding as of September 30, 1996. MID PENN BANCORP, INC. CONSOLIDATED BALANCE SHEETS (Unaudited; Dollars in thousands)
Sept. 30, Dec. 31, 1996 1995 -------- -------- ASSETS: Cash and due from banks 5,245 3,389 Interest bearing balances 27,467 30,059 Available-for-sale securities 28,112 25,184 Federal funds sold 0 0 Loans 141,979 133,665 Less: Unearned discount 1,878 1,729 Allowance for loan losses 2,200 2,347 ------- ------- Net loans 137,901 129,589 ------- ------- Bank premises and equip't, net 3,491 3,451 Other real estate 219 507 Accrued interest receivable 1,363 1,386 Other assets 1,222 1,146 ------- ------- Total Assets 205,020 194,711 ======= ======= LIABILITIES & STOCKHOLDERS EQUITY: Deposits: Demand 14,289 11,766 NOW 24,594 25,223 Money Market 10,421 10,298 Savings 16,766 17,412 Time 106,099 97,569 ------- ------- Total deposits 172,169 162,268 ------- ------- Short-term borrowings 1,631 4,314 Accrued interest payable 1,731 1,052 Other liabilities 1,116 1,054 Long-term debt 4,741 3,329 ------- ------- Total Liabilities 181,388 172,017 ------- ------- STOCKHOLDERS' EQUITY: Common stock, par value $1 per share; authorized 10,000,000 shares; issued 1,202,161 shares at Sept. 30, 1996 and December 31, 1995 1,202 1,202 Surplus 9,889 9,889 Undivided profits 12,997 11,788 Unrealized holding gain on securities, net of estimated tax effect 77 348 Less: Treasury Stock at cost (19,056 shares) 533 533 ------- ------- Total Stockholders Equity 23,632 22,694 ------- ------ Total Liabilities & Equity 205,020 194,711 ======= =======
MID PENN BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited; dollars in thousands)
Three Months Nine Months Ended Sept 30, Ended Sept 30, 1996 1995 1996 1995 INTEREST INCOME: ----- ----- ----- ----- Interest & fees on loans 3,257 2,994 9,329 8,628 Int.-bearing balances 474 450 1,483 1,212 Treas. & Agency securities 230 165 647 505 Municipal securities 184 201 541 638 Other securities 11 11 40 27 Fed funds sold and repos 0 10 3 38 ----- ----- ----- ----- Total Int. Income 4,156 3,831 12,043 11,048 ----- ----- ----- ----- INTEREST EXPENSE: Deposits 1,810 1,650 5,350 4,656 Short-term borrowings 37 60 166 124 Long-term borrowings 49 25 109 100 ----- ----- ----- ----- Total Int. Expense 1,896 1,735 5,625 4,880 ----- ----- ----- ----- Net Int. Income 2,260 2,096 6,418 6,168 PROVISION FOR LOAN LOSSES 0 0 0 0 ----- ----- ----- ----- Net Int. Inc. after Prov. 2,260 2,096 6,418 6,168 ----- ----- ----- ----- NON-INTEREST INCOME: Trust Dept 6 6 44 36 Service Chgs. on Deposits 61 73 185 185 Investment sec. gains, net 0 -1 12 12 Other 85 83 273 294 ----- ----- ----- ----- Total Non-Interest Income 152 161 514 527 ----- ----- ----- ----- NON-INTEREST EXPENSE: Salaries and benefits 635 612 1,878 1,798 Occupancy, net 73 95 224 217 Equipment 90 86 270 253 PA Bank Shares tax 58 53 172 163 Other 301 301 1,030 1,100 ----- ----- ----- ----- Tot. Non-int. Exp. 1,157 1,147 3,574 3,531 ----- ----- ----- ----- Income before income taxes 1,255 1,110 3,358 3,164 INCOME TAX EXPENSE 360 314 965 871 ----- ----- ----- ----- NET INCOME 895 796 2,393 2,293 ===== ===== ===== ===== NET INCOME PER SHARE 0.76 0.67 2.02 1.94 ===== ===== ===== ===== Weighted Average No. of Shares Outstanding 1,183,105 1,183,105 1,183,105 1,183,105
MID PENN BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited; Dollars in thousands)
For the nine months ended: Sept 30, Sept 30, 1996 1995 -------- -------- Operating Activities: Net Income 2,393 2,293 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 0 0 Depreciation 253 224 Change in interest receivable 23 -66 Change in other assets -76 34 Change in interest payable 679 917 Change in other liabilities 62 -123 Other, net 0 -38 ------- ------- Net cash provided by operating activities: 3,334 3,241 ------- ------- Investing Activities: Net decrease in int-bearing balances 2,592 -4,358 Proceeds from sale of securities 3,336 2,455 Proceeds from the maturity of secs. 3,041 4,413 Purchase of investment securities -9,648 -4,673 Net decrease in loans -8,312 -13,309 Purchase of loans 0 0 Net purchases of fixed assets -293 -1,179 Proceeds from sale of other real estate 372 196 Capitalized additions - ORE -13 -152 ------- ------- Net cash provided by investing activities -8,925 -16,607 ------- ------- Financing Activities: Net increase in demand and savings 1,371 -4,316 Net increase in time deposits 8,530 11,838 Net increase in sh-term borrowings -2,683 7,745 Net increase in long-term borrowings 1,412 -2,082 Cash dividend declared -1,183 -1,146 ------- ------- Net cash provided by financing activities 7,447 12,039 ------- ------- Net increase in cash & equivalents 1,856 -1,327 Cash & cash equivalents, beg of period 3,389 4,764 ------- ------- Cash & cash equivalents, end of period 5,245 3,437 ======= ======= Supplemental Noncash Disclosures: Loan charge-offs 348 282 Transfers to other real estate 14 338
Mid Penn Bancorp, Inc. Notes to Consolidated Financial Statements 1. The consolidated interim financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission with respect to Form 10-Q. The financial information included herein reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures made herein are adequate to make the information not misleading. It is suggested that these interim financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's most recent Form 10-K. 2. Interim statements are subject to possible adjustments in connection with the annual audit of the Company's accounts for the full fiscal year. In the Company's opinion, all adjustments necessary in order to make the interim financial statements not misleading have been included. 3. The results of operations for the interim periods presented are not necessarily indicative of the results expected for the full year. 4. Management considers the Allowance for Loan Losses to be adequate at this time. Mid Penn Bancorp, Inc. Millersburg, Pennsylvania Management's Discussion of Consolidated Financial Condition for the nine months ended Sept 30, 1996 compared to year end 1995 and the Results of Operations for the third quarter compared to the same period in 1995. CONSOLIDATED FINANCIAL CONDITION Total assets as of September 30, 1996, amounted to $205,020,000,an increase of $10,309,000 or 5.3% over the total assets as of December 31, 1995. During 1995, interest rates on short and intermediate term U.S. Treasury Notes and other similar government issues, on average, decreased over 40%. At the end of 1995, there was considerable discussion about the Federal Reserve further lowering interest rates in 1996, and the discount rate was lowered on January 31, 1996, from 5.25% to 5.00%. In anticipation of the possibility that short term interest rates would continue to fall in 1996, during January $3,275,000 in interest bearing balances from other institutions was purchased. Although the focus in the beginning of 1996 was that interest rates would decline further, the actual results were opposite. At the end of June, the interest rate on the one-year U.S. Treasury Note was up 12.6% from December 31, 1995, while the two-year note was up 18.3%, and the five year note was up 20.1%. The Bank added $2,928,000 in U.S. Treasury and Agency investments to its portfolio during the first nine months of 1996 as these securities offered more attractive yields than interest bearing balances of similar terms. As a net result, interest-bearing balances from other institutions decreased $2,592,000 from December 31, 1995 to September 30, 1996. Interest bearing balances with other financial institutions are fully insured by the FDIC and provide liquidity while offering a competitive return. Although loan demand was sporatic during the beginning of 1996 as the banking industry continues to aggressively pursue borrowers by offering very competitive long-term, fixed interest rates, commercial loan demand increased during the second and third quarters. The Bank increased net loans by $8,312,000 or 6.4% during the first nine months of 1996, comprised primarily of commercial real estate loans. Foreclosed assets held for sale decreased $292,000 to $219,000 during the first nine months of 1996. The sale of a $200,000 commercial property greatly contributed to the decrease. As of September 30, 1996, the balance of foreclosed assets held for sale consists of undeveloped land. Total deposits increased by $9,901,000, or 6.1% from $162,268,000 at December 31, 1995, to $172,169,000 at September 30, 1996. Time deposits, which increased $8,530,000 to $106,099,000 at September 30, 1996, from $97,569,000 at December 31, 1995, accounted for the majority of the increase. Long term debt increased from $3,329,000 at December 31, 1995 to $4,741,000 at September 30, 1996. In February a $2,000,000 borrowing from the Federal Home Loan Bank of Pittsburgh matured and was subsequently repaid. The note was originally replaced by a 30-day short term note that was then repaid with cash from operations and funds generated by increased deposits. In the third quarter, the Bank borrowed $2,000,000 due August 4, 1997, and $1,500,000 due September 4, 2001, both bullet loan borrowings from the FHLB. These fixed-rate borrowings were initiated in order to insure an adequate spread on several recent loans written by the Bank. RESULTS OF OPERATION Net income for the third quarter was $895,000, a $99,000 or 12.4% increase from the $796,000 earned in the same quarter of 1995, while net income for the first nine months was $2,393,000 compared to the $2,293,000 earned in the like period of 1995. Net income per share for the nine months ended September 30, 1996, increased to $2.02 from $1.94 earned in the same period of 1995. Net income on an annualized basis at September 30, 1996, as a percent of total average assets, also known as return on assets (ROA) was 1.6% as compared to 1.7% for the same period in 1995. Net income as a percentage of stockholders' equity, also known as return on equity, (ROE), was 13.9% on an annualized basis for the first nine months of 1996 as compared to 14.0% for the same period in 1995. Net interest income as of September 30, 1996, was $6,418,000 as compared to $6,168,000 for the first nine months of 1995. The national prime rate, the rate used by the Bank as its index to price most of its short-term variable rate commercial loans, decreased from 8.75% at the end of September 1995 to 8.25%, at September 30, 1996. As a result, the annualized rate of interest income on average earning assets decreased to 8.6% at September 30, 1996, from 8.9% at September 30, 1995. With most of the growth in deposits being in the more costly time deposits, the annualized rate of interest expense on average costing liabilities increased from 4.5% at September 1995 to 4.6% at September 30, 1996. The growth in net interest income between the third quarter of 1996 and the third quarter of 1995 was the result of volume as opposed to yield. The net interest margin on average earning assets was 4.6% at September 30, 1996, as compared to 5.1% at September 30, 1995. The Bank made no provision for loan losses during the first nine months of 1996 or the same period in 1995. On a quarterly basis, senior management reviews potentially unsound loans. Taking into consideration judgments regarding risk or error, economic conditions, trends and other factors, management determined that no provision for loan losses was necessary during the first three quarters of 1996. Non-interest income remained fairly constant at $514,000 for the first nine months of 1996 as compared to $527,000 for the same period of 1995. A significant contribution to non- interest income is NSF fee income. NSF fee income contributed in excess of $140,000 during the first nine months of 1996. Non-interest expense increased by $43,000 from $3,531,000 at September 30, 1995, to $3,574,000 at September 30, 1996. A major factor contributing to the increase was an increase in salaries and employee benefits expense. Other non-interest expense decreased from $1,100,000 at September 30, 1995, to $1,030,000 at September 30, 1996. The significant factor resulting in the decrease was the FDIC insurance premium. Being a well-capitalized institution, the Bank was assessed the minimum assessment of $500 per quarter or $1,500 for the first nine months of 1996. During the same period of 1995, FDIC expense amounted to $167,000. As part of the fiscal year 1997 Omnibus Appropriations Bill signed into law by the President on September 30, 1996, beginning on January 1, 1997, the banking industry will be required to help pay the annual $780 million Financing Corporation (FICO) bond obligation. It is currently estimated that for three years, until January 1, 2000, banks will be required to pay 1.29 cents per $100 in deposits as FICO assessment. After January 1, 2000, the FICO assessment on bank deposits is anticipated to be 2.4 cents per $100 in deposits. Based on the Bank's current FDIC assessment base of $170,000,000, at 1.29 cents per $100 in deposits, the projected annual FICO assessment for 1997 would be approximately $21,930. The current annual statutory minimum assessment of $2,000 has been repealed. So long as the Bank Insurance Fund (BIF) remains fully capitalized, healthy banks will pay no premium for the BIF fund. They will only pay the FICO assessment. LIQUIDITY The Bank's objective is to maintain adequate liquidity while minimizing interest rate risk. Adequate liquidity provides resources for credit needs of borrowers, for depositor withdrawals, and for funding Corporate operations. Sources of liquidity include maturing investment securities, overnight borrowings of federal funds (and Flex Line), payments received on loans, and increases in deposit liabilities. Funds generated from operations contributed a major source of funds for the first nine months of 1996. Another major source of funds came from the net increase in time deposits, which contributed $8,530,000 during the period, while net demand and savings balances increased by $1,371,000. The majority of these deposit increases took place at our newest branch office which was opened in September of 1995. Deposits at this Mechanicsburg (Carlisle Pike) Office increased by $3,116,000 during the first nine months of 1996. A net increase in long-term borrowings contributed $1,412,000 in funds. In the third quarter, the Bank had a $2,000,000 bullet loan borrowing from the Federal Home Loan Bank of Pittsburgh due August 4, 1997, and $1,500,000 bullet loan due September 4, 2001. Additionally, $2,592,000 in net interest-bearing balances was allowed to run off in order to fund loan demand. The major uses of funds during the nine months included a net increase in investment securities of approximately $3,000,000. Even in an environment of strong competition among banks for commercial loans, the Bank achieved a net increase of $8,312,000 in net loans during the first nine months of 1996. Also during the first nine months, a $2,000,000 borrowing from the Federal Home Loan Bank of Pittsburgh matured and was subsequently repaid with generated funds. CREDIT RISK AND ALLOWANCE FOR LOAN LOSSES The total of non-accrual loans decreased by $201,000 or 11.5% from December 31, 1995. During the quarter, a payment of $754,000 was received on a non-accrual loan; however, a commercial loan relationship of $695,000 was then added on non-accrual status. Most non-performing assets are supported by collateral value that appears to be adequate at September 30, 1996. Total non-performing assets decreased to $2,173,000 representing 1.06% of total assets at September 30, 1996 from $2,455,000 or 1.26% of total assets at December 31, 1995. Credit card delinquencies remain a concern of bankers. While net credit card charge-offs decreased to approximately $100,000 during the first nine months of 1996 from approximately $117,000 during the same period of 1995, credit card delinquencies are reaching new heights industry- wide. This fact coupled with the rising rate of consumer bankruptcy has prompted the Bank to pursue a screening program of its credit card portfolio. It is hoped that this program will help to identify potentially troubled borrowers at an earlier level so as to improve the efficacy of collection efforts in this area. The Allowance for Loan Losses at September 30, 1996, was $2,200,000 or 1.57% of loans, net of unearned interest, as compared to $2,347,000 or 1.78% of loans, net of unearned interest, at December 31, 1995. Based upon the ongoing analysis of the Bank's loan portfolio by the loan review department, the latest quarterly analysis of potentially unsound loans and non-performing assets, Management considers the Allowance for Loan Losses to be adequate to absorb any reasonable, foreseeable loan losses. MID PENN BANCORP, INC.
Sept. 30, Dec. 31, 1996 1995 -------- -------- Non-Performing Assets: Non-accrual loans 1,552 1,753 Past due 90 days or more 279 195 Restructured loans 123 0 ------- ------- Total non-performing loans 1,954 1,948 Other real estate 219 507 ------- ------- Total 2,173 2,455 ======= ======= Percentage of total loans outstanding 1.53 1.84 Percentage of total assets 1.06 1.26 Analysis of the Allowance for Loan Losses: Balance beginning of period 2,347 2,511 Loans charged off: Commercial real estate, construction and land development 0 86 Commercial, industrial and agricultural 168 54 Real estate - residential mortgage 0 0 Consumer 180 226 ------- ------- Total loans charged off 348 366 ------- ------- Recoveries of loans previously charged off: Commercial real estate, construction and land development 35 33 Commercial, industrial and agricultural 84 110 Real estate - residential mortgage 35 4 Consumer 47 55 ------- ------- Total recoveries 201 202 ------- ------- Net charge-offs (recoveries) 147 164 ------- ------- Current period provision for loan losses 0 0 ------- ------- Balance end of period 2,200 2,347 ======= ======
Mid Penn Bancorp, Inc. PART II - OTHER INFORMATION: Item 1. Legal Proceedings - Nothing to report Item 2. Changes in Securities - Nothing to report Item 3. Defaults Upon Senior Securities - Nothing to report Item 4. Submission of Matters to a Vote of Security Holders - - Nothing to report Item 5. Other Information - At the end of the second quarter, Mid Penn Bancorp, Inc. contracted the services of Invest Financial Corporation, a third-party provider of investment services headquartered in Tampa, Florida. Invest provides financial planning and investment services, particularly mutual fund and annuity-type investments, by referral to interested bank customers. Item 6. Exhibits and Reports on Form 8-K a. Exhibits - (27) Financial Data Schedule b. Reports on Form 8-K - None 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. Mid Penn Bancorp, Inc. Registrant /s/ Eugene F. Shaffer /s/ Gerald D. Schoffstall By:Eugene F. Shaffer By:Gerald D. Schoffstall Chairman, Pres. & CEO Treasurer Date: October 21, 1996 Date: October 21, 1996 EX-27 2
9 1000 9-MOS DEC-31-1996 SEP-30-1996 5245 27467 0 0 28112 0 0 140101 2200 205020 172169 1631 2847 4741 0 0 1202 22430 205020 9329 2711 3 12043 5350 5625 6418 0 12 3574 3358 3358 0 0 2393 2.02 2.02 8.6 1522 279 123 1533 2347 348 201 2200 0 0 0
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