-----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, ORbYKcHQVTk9P9gb2peaPinp7dVZleJqRgEhUCkwiwGRLCBorkR8Ce2PETREIXc4 386vdeprOAh6vnc7P/wJBg== /in/edgar/work/0000879635-00-000004/0000879635-00-000004.txt : 20001116 0000879635-00-000004.hdr.sgml : 20001116 ACCESSION NUMBER: 0000879635-00-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MID PENN BANCORP INC CENTRAL INDEX KEY: 0000879635 STANDARD INDUSTRIAL CLASSIFICATION: [6022 ] IRS NUMBER: 251666413 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13677 FILM NUMBER: 769968 BUSINESS ADDRESS: STREET 1: 349 UNION ST CITY: MILLERSBURG STATE: PA ZIP: 17061 BUSINESS PHONE: 7176922133 MAIL ADDRESS: STREET 1: 349 UNION STREET STREET 2: 349 UNION STREET CITY: MILLERSBURG STATE: PA ZIP: 17061 10-Q 1 0001.txt MID PENN BANCORP 10-Q PERIOD ENDING SEPT 30 2000 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, 2000 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. 3,036,994 shares of Common Stock, $1.00 par value per share, were outstanding as of September 30, 2000. MID PENN BANCORP, INC. CONSOLIDATED BALANCE SHEET (Unaudited; Dollars in thousands)
Sept. 30, Dec. 31, 2000 1999 -------- -------- ASSETS: Cash and due from banks 5,910 7,474 Interest-bearing balances 41,186 34,570 Available-for-sale securities 67,258 64,099 Federal funds sold 0 0 Loans 180,154 172,294 Less, Allowance for loan losses 2,716 2,505 ------- ------- Net loans 177,438 169,789 ------- ------- Bank premises and equip't, net 3,512 3,307 Other real estate 70 63 Accrued interest receivable 2,195 2,120 Cash surrender value of life insurance 4,237 4,089 Deferred income taxes 1,579 1,676 Other assets 560 355 ------- ------- Total Assets 303,945 287,542 ======= ======= LIABILITIES & STOCKHOLDERS' EQUITY: Deposits: Demand 22,903 22,331 NOW 28,072 26,962 Money market 17,792 22,899 Savings 24,851 25,815 Time 135,996 119,833 ------- ------- Total deposits 229,614 217,840 ------- ------- Short-term borrowings 18,331 24,636 Accrued interest payable 2,338 1,202 Other liabilities 1,570 899 Long-term debt 24,282 16,400 ------- ------- Total Liabilities 276,135 260,977 ------- ------- STOCKHOLDERS' EQUITY: Common stock, par value $1 per share; authorized 10,000,000 shares; issued 3,056,501 shares at September 30, 2000 and December 31, 1999 3,057 3,057 Additional paid-in capital 20,368 20,368 Retained earnings 6,600 5,557 Accumulated other comprehensive loss -1,674 -1,861 Treasury stock at cost (19,507 and 19,996 shs., resp.) -541 -556 ------- ------- Total Stockholders' Equity 27,810 26,565 ------- ------ Total Liabilities & Equity 303,945 287,542 ======= ======= The accompanying notes are an integral part of these consolidated financial statements. Note: The balance sheet at December 31, 1999, has been derived from the audited financial statements at that date but does not include all the information and notes required by generally accepted accounting principles for complete financial statements.
MID PENN BANCORP, INC. CONSOLIDATED STATEMENT OF INCOME (Unaudited; dollars in thousands)
Three Months Nine Months Ended Sept 30, Ended Sept 30, 2000 1999 2000 1999 INTEREST INCOME: ----- ----- ----- ----- Interest & fees on loans 3,933 3,402 11,654 10,090 Int.-bearing balances 616 598 1,613 1,853 Treas. & Agency securities 581 610 1,692 1,853 Municipal securities 377 333 1,082 987 Other securities 57 35 160 99 Fed funds sold and repos 0 0 0 0 ----- ----- ----- ----- Total Int. Income 5,564 4,978 16,201 14,882 ----- ----- ----- ----- INTEREST EXPENSE: Deposits 2,325 2,048 6,551 6,242 Short-term borrowings 202 118 593 261 Long-term borrowings 403 220 1,181 655 ----- ----- ----- ----- Total Int. Expense 2,930 2,386 8,325 7,158 ----- ----- ----- ----- Net Int. Income 2,634 2,592 7,876 7,724 PROVISION FOR LOAN LOSSES 75 100 250 250 ----- ----- ----- ----- Net Int. Inc. after Prov. 2,559 2,492 7,626 7,474 ----- ----- ----- ----- NON-INTEREST INCOME: Trust dept 60 9 158 82 Service chgs. on deposits 143 129 440 373 Investment sec. gains (losses), net 0 0 -4 50 Gain on sale of loans 0 0 31 0 Other 171 190 560 848 ----- ----- ----- ----- Total Non-Interest Income 374 328 1,185 1,353 ----- ----- ----- ----- NON-INTEREST EXPENSE: Salaries and benefits 971 919 2,862 2,858 Occupancy, net 93 81 274 248 Equipment 137 124 384 354 PA Bank Shares tax 68 70 203 208 Other 437 399 1,320 1,355 ----- ----- ----- ----- Tot. Non-int. Exp. 1,706 1,593 5,043 5,023 ----- ----- ----- ----- Income before income taxes 1,227 1,227 3,768 3,804 INCOME TAX EXPENSE 280 297 904 950 ----- ----- ----- ----- NET INCOME 947 930 2,864 2,854 ===== ===== ===== ===== NET INCOME PER SHARE 0.31 0.31 .94 .94 ===== ===== ===== ===== DIVIDENDS PER SHARE 0.20 0.19 .60 1.99 ===== ===== ===== ===== Weighted Average No. of Shares Outstanding 3,036,387 3,035,665 3,037,857 3,038,390 The accompanying notes are an integral part of these consolidated financial statements.
MID PENN BANCORP, INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited; Dollars in thousands)
For the nine months ended: Sept. 30, Sept. 30, 2000 1999 -------- -------- Operating Activities: Net Income 2,864 2,854 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 250 250 Depreciation 318 303 Incr. in cash-surr. value of life ins. -148 -140 Loss (gain) on sale of investment securities 4 -50 Loss (gain) on sale/disposal of bank premises and equipment 0 0 Loss (gain) on the sale of foreclosed assets -40 -229 Loss (gain) on the sale of loans -31 0 Change in interest receivable -75 -143 Change in other assets -205 -69 Change in interest payable 1,136 719 Change in other liabilities 671 828 ------- ------- Net cash provided by operating activities: 4,744 4,323 ------- ------- Investing Activities: Net (incr)decr in int-bearing balances -6,616 4,661 Proceeds from sale of securities 3,515 3,811 Proceeds from the maturity of secs. 2,315 7,998 Purchase of investment securities -8,709 -9,762 Proceeds from the sale of loans 3,622 0 Net increase in loans -11,525 -9,542 Purchases of fixed assets -523 -190 Proceeds from sale of other real estate 68 523 Capitalized additions - ORE 0 0 ------- ------- Net cash used in investing activities -17,853 -2,501 ------- ------- Financing Activities: Net (decr)incr in demand and savings -4,389 5,225 Net incr(decr) in time deposits 16,163 -2,887 Net incr(decr) in sh-term borrowings -6,305 2,212 Net incr(decr) in long-term borrowings 7,882 -111 Cash dividend declared -1,821 -6,046 Net sale of treasury stock 15 3 ------- ------- Net cash provided by(used in) financing activities 11,545 -1,604 ------- ------- Net incr(decr) in cash & due from banks -1,564 218 Cash & due from banks, beg of period 7,474 5,651 ------- ------- Cash & due from banks, end of period 5,910 5,869 ======= ======= Supplemental Noncash Disclosures: Loan charge-offs 60 189 Transfers to other real estate 35 0 The accompanying notes are an integral part of these consolidated financial statements.
Mid Penn Bancorp, Inc. Notes to Consolidated Financial Statements 1. The consol. interim finan. stmts. have been prepared by the Corporation, without audit, according to the rules and regulations of the Securities and Exchange Commission with respect to Form 10-Q. The financial information reflects all adjustments (consisting only of normal recurring adjustments) which are, in our opinion, necessary for a fair statement of results for the periods covered. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted according to these rules and regulations. We believe, however, that the disclosures are adequate so that the information is not misleading. You should read these interim financial statements along with the financial statements including the notes included in the Corporation's most recent Form 10-K. 2. Interim statements are subject to possible adjustments in connection with the annual audit of the Corporation's accounts for the full fiscal year. In our opinion, all necessary adjustments have been included so that the interim financial statements are not misleading. 3. The results of operations for the interim periods presented are not necessarily an indicator of the results expected for the full year. 4. Management considers the allowance for loan losses to be adequate at this time. 5. Short-term borrowings as of Sept. 30, 2000, and December 31, 1999, consisted of: (Dollars in thousands) 9/30/00 12/31/99 ------- -------- Federal funds purchased $15,700 $22,300 Repurchase agreements 2,107 1,313 Treasury, tax and loan note 524 1,023 ------- -------- $18,331 $24,636 ======= ======= Federal funds purchased represent overnight funds as of Sept. 30, 2000. Securities sold under repurchase agreements generally mature between one day and one year. Treasury, tax and loan notes are open-ended interest bearing notes payable to the U.S. Treasury upon call. All tax deposits accepted by the Bank are placed in the Treasury note option account. 6. Long-term debt as of the quarter ended Sept. 30, 2000, and the year ended December 31, 1999, was $24,282,000 and $16,400,000, respectively. The Bank is a member of the Federal Home Loan Bank of Pittsburgh (FHLB) and through its membership, the Bank can access a number of credit products which are utilized to provide various forms of liquidity. The Bank entered into two long-term borrowings with the FHLB during the period: $5,000,000 in a five year/two year convertible borrowing at 6.28% with a final maturity of January 14, 2010; and a $5,000,000 ten year/three year convertible borrowing at 6.71% with a final maturity of February 22, 2010. 7. Earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during each of the periods presented, giving retroactive effect to stock dividends and stock splits. The Corporation's basic and diluted earnings per share are the same since there are no dilutive shares of potential common stock outstanding. 8. The purpose of reporting comprehensive income (loss) is to report a measure of all changes in the Corporation's equity resulting from economic events other than transactions with stockholders in their capacity as stockholders. For the Corporation "comprehensive income(loss)" includes traditional income statement amounts as well as unrealized gains and losses on certain investments in debt and equity securities (i.e. available for sale securities). Because unrealized gains and losses are part of comprehensive income (loss), comprehensive income (loss) may vary substantially between reporting periods due to fluctuations in the market prices of securities held. (In thousands) Three Months Nine Months Ended Sept 30, Ended Sept 30, 2000 1999 2000 1999 ---- ---- ---- ---- Net Income $947 $930 $2,864 $2,854 ---- ---- ---- ---- Other comprehensive income(loss): Unrealized holding gains(losses) on securities arising during the period 991 -345 283 -2,777 Less: reclassification adjustments for (gains) losses included in net income 0 0 4 -50 ----- ----- ----- ----- Other comprehensive income(loss) before income tax provision 991 -345 287 -2,827 Income tax (expense)benefit related to other comprehensive income(loss) -337 117 -96 944 ----- ----- ----- ----- Other comprehensive inc(loss) 654 -228 191 -1,883 ----- ----- ----- ----- Comprehensive Income $1,601 $702 3,055 971 ===== ===== ===== ===== Mid Penn Bancorp, Inc. Millersburg, Pennsylvania Management's Discussion of Consolidated Financial Condition as of September 30, 2000, compared to year-end 1999 and the Results of Operations for the third quarter and the first nine months of 2000 compared to the same periods in 1999. CONSOLIDATED FINANCIAL CONDITION Total assets as of September 30, 2000, increased to $303,945,000, or 6%, from $287,542,000 as of December 31,1999. During the first three quarters of 2000, loans outstanding Increased by $7,860,000, or 5% despite a sale of $3,622,000 in student loans. Our entire portfolio of investment securities is considered available-for-sale. As such, the investments are recorded on our Balance Sheet at market value. Our investments: US Treasury, Agency and Municipal securities are assigned a market price relative to investments of the same type with similar maturity dates. Since the interest rate environment of these securities has increased by more than 1.5 percentage points in the past twenty-four months, our existing securities are valued lower in comparison. This difference in value, or unrealized loss, amounted to $1,674,000, net of tax, as of Sept. 30, 2000. However, the investments are all high credit quality securities that if held to maturity are expected to yield no loss to the bank. Total deposits increased by $11,774,000 during the first nine months of 2000. Certificates of deposit increased by $16,163,000 while money market balances decreased by $5,107,000 indicating a movement toward time deposits at this point in the interest rate cycle. Short-term borrowings, consisting mainly of overnight borrowings, decreased by $6.3 million from year end. These borrowings had been increased during the fourth quarter of 1999 to fund strong loan growth, and to allow for sufficient liquidity to meet Y2K needs. During the first quarter of 2000, we refinanced approximately $8 million of short-term funds using longer term borrowings in light of rising interest rates. All components of long-term debt are advances from the FHLB. Long-term debt advances were initiated in order to secure an adequate spread on certain pools of loans and investments of the Bank. As of Sept. 30, 2000, the Bank's capital ratios are well in excess of the minimum and well-capitalized guidelines and the Corporation's capital ratios are in excess of the Bank's capital ratios. We launched a comprehensive interactive, internet banking package during the first quarter of 2000. Our internet banking program has been well received by our customers who are using the service in increasing numbers. The web site and online banking program can be found at www.midpennbank.com During the third quarter, the Bank purchased an office location on Front Street in uptown Harrisburg and has received approval for branch operation from the appropriate regulatory agencies. The office, which opened for business in late August, is located in an area of the city occupied by many legal and medical practices. This office will offer excellent exposure for the Bank in the Harrisburg city market. RESULTS OF OPERATIONS Net income for the first nine months of 2000 was $2,864,000, compared with $2,854,000 earned in the same period of 1999. Net income per share for the same period of both 2000 and 1999 was $.94. Net income as a percentage of stockholders' equity, also known as return on equity, (ROE), was 13.7% on an annualized basis for the first three quarters of 2000 as compared to 14.3% for the same period in 1999. Net income for the third quarter of 2000 was $947,000, compared with $930,000 earned in the same quarter of 1999. Net income per share for the third quarters of both 2000 and 1999 was $.31. Net interest income of $2,634,000 for the quarter ended September 30, 2000, increased by 1.6% compared to the $2,592,000 earned in the same quarter of 1999. This rise indicates an increase in interest spread during the quarter despite higher interest rates and keen competition. During the third quarter of 2000, we analyzed interest rate risk using the Vining Sparks Asset-Liability Management Model. Using the computerized model, management reviews interest rate risk on a periodic basis. This analysis includes an earnings scenario whereby interest rates are increased by 200 basis points (2 percentage points) and another whereby they are decreased by 200 basis points. At Aug. 31, 2000, these scenarios indicate that there would not be a significant variance in net interest income at the one-year time frame due to interest rate changes; however, actual results could vary significantly from the calculations prepared by management. The Bank made a provision for loan losses of $75,000 and $100,000 during the third quarters of 2000 and 1999, respectively. On a quarterly basis, senior management reviews potentially unsound loans taking into consideration judgments regarding risk of error, economic conditions, trends and other factors in determining a reasonable provision for the period. Non-interest income amounted to $374,000 for the third quarter of 2000 compared to $328,000 earned during the same quarter of 1999. Service charges on deposits grew by more than 10% during the third quarter of 2000 compared to the same period of 1999 as the bank continues to focus on fee and service charge income. One significant contributor to non-interest income is insufficient fund (NSF) fee income. NSF fee income contributed in excess of $110,000 during the third quarter of 2000. Non-interest expense during the third quarter of 2000 of $1,706,000 increased as compared to an expense of $1,593,000 during the same period of 1999. 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 three quarters of 2000 The major source of funds came from the increase in time deposits of $16,163,000 mainly an increase in certificates of deposits particularly a new-money, three-year offer at 6.88%. Other major sources of funds included the $7,882,000 net increase in net long-term borrowings, and the $3,622,000 received in principal on the sale of a block of student loans. The major use of funds during the period was an increase in loans of $11,525,000. The other major uses of funds included the $6,616,000 increase in interest bearing balances (certificates of deposit of other banks), which were purchased at a positive spread to cost of funds, and finally a $6,305,000 decrease in short-term borrowings. CREDIT RISK AND ALLOWANCE FOR LOAN LOSSES Total non-performing assets increased to $2,775,000 representing 0.91% of total assets at September 30, 2000, from $2,217,000 or 0.77% of total assets at December 31, 1999. Most non-performing assets are supported by collateral value that appears to be adequate at September 30, 2000. The allowance for loan losses at September 30, 2000, was $2,716,000 or 1.51% of loans, net of unearned interest, as compared to $2,505,000 or 1.45% of loans, net of unearned interest, at December 31, 1999. 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, we consider the Allowance for Loan Losses to be adequate to absorb any reasonable, foreseeable loan losses. MID PENN BANCORP, INC.
Sept 30, Dec. 31, 2000 1999 -------- -------- Non-Performing Assets: Non-accrual loans 737 890 Past due 90 days or more 1,214 386 Restructured loans 754 878 ------- ------- Total non-performing loans 2,705 2,154 Other real estate 70 63 ------- ------- Total 2,775 2,217 ======= ======= Percentage of loans, net of unearned interest, outstanding 1.54 1.29 Percentage of total assets 0.91 0.77 Analysis of the Allowance for Loan Losses: Balance beginning of period 2,505 2,313 Loans charged off: Commercial real estate, construction and land development 2 0 Commercial, industrial and agricultural 12 146 Real estate - residential mortgage 0 0 Consumer 46 78 ------- ------- Total loans charged off 60 224 ------- ------- Recoveries of loans previously charged off: Commercial real estate, construction and land development 0 55 Commercial, industrial and agricultural 0 1 Real estate - residential mortgage 0 0 Consumer 21 35 ------- ------- Total recoveries 21 91 ------- ------- Net (charge-offs) recoveries -39 -133 ------- ------- Current period provision for loan losses 250 325 ------- ------- Balance end of period 2,716 2,505 ======= ======
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 - Nothing to report 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/ Alan W. Dakey /s/ Kevin W. Laudenslager By: Alan W. Dakey By: Kevin W. Laudenslager President & CEO Treasurer Date: November 10, 2000 Date: November 10, 2000 EX-27 2 0002.txt
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