-----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, VfgLiIZnpXuNCdz0VpcmCrlfn6JWoSZVOZVN1HVdzaHxGE5tMPH5zJ4f3T/sV034 avznEMmm1tGh7cYVDziaBw== 0000879635-97-000002.txt : 19970811 0000879635-97-000002.hdr.sgml : 19970811 ACCESSION NUMBER: 0000879635-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970808 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: 97653759 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, 1997 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 June 30, 1997 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. 1,303,776 shares of Common Stock, $1.00 par value per share, were outstanding as of June 30, 1997. MID PENN BANCORP, INC. CONSOLIDATED BALANCE SHEETS (Unaudited; Dollars in thousands)
June 30, Dec. 31, 1997 1996 -------- -------- ASSETS: Cash and due from banks 4,950 4,442 Interest bearing balances 30,704 28,433 Available-for-sale securities 32,500 28,733 Federal funds sold 0 0 Loans 145,812 146,393 Less: Unearned discount 2,019 1,879 Allowance for loan losses 2,182 2,173 ------- ------- Net loans 141,611 142,341 ------- ------- Bank premises and equip't, net 3,286 3,397 Other real estate 721 548 Accrued interest receivable 1,404 1,335 Other assets 1,122 943 ------- ------- Total Assets 216,298 210,172 ======= ======= LIABILITIES & STOCKHOLDERS EQUITY: Deposits: Demand 16,093 15,350 NOW 23,274 24,211 Money Market 11,955 11,575 Savings 17,426 17,061 Time 105,016 106,474 ------- ------- Total deposits 173,764 174,671 ------- ------- Short-term borrowings 10,035 4,512 Accrued interest payable 1,440 1,020 Other liabilities 818 609 Long-term debt 4,754 4,710 ------- ------- Total Liabilities 190,811 185,522 ------- ------- STOCKHOLDERS' EQUITY: Common stock, par value $1 per share; authorized 10,000,000 shares; issued 1,322,832 and 1,261,029 shares at June 30, 1997 and December 31, 1996 1,323 1,261 Surplus 13,872 11,817 Undivided profits 10,700 11,937 Unrealized holding gain on securities, net of estimated tax effect 125 168 Less: Treasury Stock at cost (19,056 shares) 533 533 ------- ------- Total Stockholders Equity 25,487 24,650 ------- ------ Total Liabilities & Equity 216,298 210,172 ======= =======
MID PENN BANCORP, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited; dollars in thousands)
Three Months Six Months Ended June 30, Ended June 30, 1997 1996 1997 1996 INTEREST INCOME: ----- ----- ----- ----- Interest & fees on loans 3,419 3,031 6,694 6,072 Int.-bearing balances 453 490 897 1,009 Treas. & Agency securities 261 223 486 417 Municipal securities 186 176 371 357 Other securities 19 17 32 29 Fed funds sold and repos 9 3 9 3 ----- ----- ----- ----- Total Int. Income 4,347 3,940 8,489 7,887 ----- ----- ----- ----- INTEREST EXPENSE: Deposits 1,798 1,776 3,577 3,540 Short-term borrowings 41 41 110 129 Long-term borrowings 79 23 129 60 ----- ----- ----- ----- Total Int. Expense 1,918 1,840 3,816 3,729 ----- ----- ----- ----- Net Int. Income 2,429 2,100 4,673 4,158 PROVISION FOR LOAN LOSSES 25 0 50 0 ----- ----- ----- ----- Net Int. Inc. after Prov. 2,404 2,100 4,623 4,158 ----- ----- ----- ----- NON-INTEREST INCOME: Trust Dept 34 29 38 38 Service Chgs. on Deposits 73 64 143 124 Investment sec. gains, net 0 12 -1 12 Gain on sale of loans 64 0 64 0 Other 80 77 175 188 ----- ----- ----- ----- Total Non-Interest Income 251 182 419 362 ----- ----- ----- ----- NON-INTEREST EXPENSE: Salaries and benefits 666 627 1,305 1,243 Occupancy, net 75 67 149 151 Equipment 92 91 179 180 PA Bank Shares tax 60 57 121 114 Other 390 378 689 729 ----- ----- ----- ----- Tot. Non-int. Exp. 1,283 1,220 2,443 2,417 ----- ----- ----- ----- Income before income taxes 1,372 1,062 2,599 2,103 INCOME TAX EXPENSE 410 309 764 605 ----- ----- ----- ----- NET INCOME 962 753 1,835 1,498 ===== ===== ===== ===== NET INCOME PER SHARE 0.74 0.58 1.41 1.15 ===== ===== ===== ===== Weighted Average No. of Shares Outstanding 1,303,776 1,303,776 1,303,776 1,303,776
MID PENN BANCORP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited; Dollars in thousands)
For the six months ended: June 30, June 30, 1997 1996 -------- -------- Operating Activities: Net Income 1,835 1,498 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 50 0 Depreciation 166 168 Change in interest receivable -69 -21 Change in other assets -179 -122 Change in interest payable 420 360 Change in other liabilities 209 67 Other, net 0 12 ------- ------- Net cash provided by operating activities: 2,432 1,962 ------- ------- Investing Activities: Net decrease in int-bearing balances -2,271 417 Proceeds from sale of securities 3,267 2,570 Proceeds from the maturity of secs. 2,926 1,831 Purchase of investment securities -10,003 -7,182 Proceeds from the sale of loans 2,338 0 Net decrease in loans -1,984 -5,613 Net purchases of fixed assets -55 -260 Proceeds from sale of other real estate 153 299 Capitalized additions - ORE 0 -5 ------- ------- Net cash provided by investing activities -5,629 -7,943 ------- ------- Financing Activities: Net increase in demand and savings 551 2,594 Net increase in time deposits -1,458 6,715 Net increase in sh-term borrowings 5,523 -515 Net increase in long-term borrowings 44 -2,058 Cash dividend declared -955 -601 ------- ------- Net cash provided by financing activities 3,705 6,135 ------- ------- Net increase in cash & equivalents 508 154 Cash & cash equivalents, beg of period 4,442 3,389 ------- ------- Cash & cash equivalents, end of period 4,950 3,543 ======= ======= Supplemental Noncash Disclosures: Loan charge-offs 138 316 Transfers to other real estate 326 0
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 six months ended June 30, 1997 compared to year end 1996 and the Results of Operations for the second quarter and first half of 1996 compared to the same periods in 1996. CONSOLIDATED FINANCIAL CONDITION Total assets as of June 30, 1997, amounted to $216,298,000, an increase of $6,126,000 or 2.9% over the total assets as of December 31, 1996. Due to the growth of the economy during the first quarter of 1997, the Federal Open Market Committee, at its March 25th meeting, raised the overnight bank rate target by a quarter point to 5.50%. In anticipation of the expected increase, rates on short to intermediate U.S. Treasury securities increased approximately 50 to 75 basis points during the quarter. Because of the lag time involved between the time when Treasury rates increase and financial institutions increase rates on deposits, $1,161,000 in maturing interest bearing balances was not re-invested during the first quarter. In addition, in anticipation of possible further action being taken by the Federal Open Market Committee to increase interest rates, $893,000 from the maturity, call or sale of available-for-sale securities was not re-invested. Shortly after the end of the first quarter, economic statistics seemed to indicate that growth for the year peaked in the first quarter, and, along with great inflationary news, caused a substantial rally in the bond market. At June 30, 1997, the net result in the bond market was interest rates within 10 basis points of rates at December 31, 1996. During this unanticipated rally, in May and June, interest bearing deposits with other financial institutions were increased by more than $2.7 million, taking advantage of the same lag time as described above. These purchases were funded by short-term borrowings. In addition, in early May, the Bank sold over $2.3 million of student loans, and those funds along with approximately $2.4 million in short-term borrowings, were invested in available-for-sale securities, mainly in short to intermediate term agency securities with call features. Loan demand continues to be sporadic during the first half of 1997 as the banking industry continues to aggressively pursue borrowers by offering very competitive long-term, fixed interest rates. Net loans remained fairly constant during the first half at $141,611,000 on June 30, 1997 with the $2.3 million sale of student loans, compared to $142,341,000 at December 31, 1996. Foreclosed assets held for sale increased $173,000 to $721,000 during the first half of 1997. Two properties totaling $326,000 were added while previously held properties totaling $153,000 were sold. As of June 30, 1997, the balance of foreclosed assets held for sale consisted of undeveloped land, farmland and a single family residential property. Total deposits remained fairly flat at $173,764,000 on June 30, 1997 compared to $174,671,000 at December 31, 1996. Short-term borrowings, including funds borrowed from the US Treasury, Fed Funds, and a $2 million bullet loan from the FHLB maturing within the year which was included in long- term borrowings at December 31, 1996, increased by $5.5 million from yearend. 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 several loans written by the Bank. RESULTS OF OPERATION Net income for the first half of 1997 was $1,835,000, or a $337,000 or 22.5% increase from the $1,498,000 earned in the same period of 1996. Net income per share for the six months ended June 30, 1997, increased to $1.41 from $1.15 earned in the same period of 1996. Net income on an annualized basis at June 30, 1997, as a percent of total average assets, also known as return on assets (ROA) was 1.7% as compared to 1.5% for the same period in 1996. Net income as a percentage of stockholders' equity, also known as return on equity, (ROE), was 14.8% on an annualized basis for the first half of 1996 as compared to 13.0% for the same period in 1996. Second quarter net income was $962,000, or $.74 per share, in 1997 as compared to $753,000, or $.58 per share, during the same period of 1996. The principal reason for the increase in net income was an increase in net interest income. The reason for the increase in net interest income is two fold; a 12 basis point increase in yield on average earning assets and a 6 basis point reduction in cost of funds from June 30, 1996 to June 30, 1997. Net interest income as of June 30, 1997, was $4,673,000 as compared to $4,158,000 for the first half of 1996. The net interest margin on average earning assets was 4.88% at June 30, 1997, compared to 4.64% at June 30, 1996. A significant contribution to the increase in net interest income was an increase in volume in addition to the increase in yield. The Bank made a provision for loan losses of $50,000 during the first half of 1997. Due to the cyclical nature of the economy coupled with the Bank's substantial involvement in commercial loans and the record number of nationwide consumer bankruptcies, management thought it prudent to make this allocation during the present period of economic strength. On a quarterly basis, senior management reviews potentially unsound loans taking into consideration judgments regarding risk or error, economic conditions, trends and other factors. Non-interest income increased to $419,000 for the first half of 1997 as compared to $362,000 for the same period of 1996. The major component of the increase is a gain of $64,000 on the sale of a block of student loans. Management sees an opportunity for greater return on these funds than realized in the student loan portfolio. Another significant contribution to non-interest income is NSF fee income. NSF fee income contributed in excess of $115,000 during the first half of 1997. Non-interest expense increased by $26,000 from $2,417,000 at June 30, 1996, to $2,443,000 at June 30, 1997. The major factor contributing to the increase was an increase in salaries and employee benefits expense which increased $62,000 during the first half of 1997 over the same period of 1996. While employee expense increased, other expense decreased. Stationery and supplies expense decreased by approximately $14,000 while advertising expense decreased by $22,000. Much of these decreases may be attributed to the fact that the Bank was heavily promoting its newest offices during the first half of 1996. No such promotion occurred during the same period of 1997. In addition, bank maintenance expense was higher by nearly $8,000 in the first half of 1996 than during the same period of 1997. This difference was due mainly to the high cost of snow removal during this period in 1996. Finally, the Bank incurred approximately $6,000 less in expenses associated with other real estate than was incurred in the same period of 1996. 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 six months of 1997. Another major source of funds came from the net increase in short-term borrowings of $5,523,000 while loans and deposits remained fairly flat with $1,984,000 of the $2,338,000 in proceeds of the sale of student loans reinvested in the loan portfolio. The major uses of funds during the period included a net increase of $3,810,000 in investment securities and a net increase of $2,271,000 in interest bearing balances purchased in anticipation of falling interest rates. CREDIT RISK AND ALLOWANCE FOR LOAN LOSSES The total of non-accrual loans decreased to $2,089,000 representing 0.97% of total assets at June 30, 1997, from $2,395,000 at December 31, 1996. Most non-performing assets are supported by collateral value that appears to be adequate at June 30, 1997. The Allowance for Loan Losses at June 30, 1997, was $2,182,000 or 1.52% of loans, net of unearned interest, as compared to $2,173,000 or 1.50% of loans, net of unearned interest, at December 31, 1996. 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.
June 30, June 30, 1997 1996 -------- -------- Non-Performing Assets: Non-accrual loans 965 1,183 Past due 90 days or more 403 519 Restructured loans 0 145 ------- ------- Total non-performing loans 1,368 1,847 Other real estate 721 548 ------- ------- Total 2,089 2,395 ======= ======= Percentage of total loans outstanding 1.43 1.64 Percentage of total assets 0.97 1.14 Analysis of the Allowance for Loan Losses: Balance beginning of period 2,173 2,347 Loans charged off: Commercial real estate, construction and land development 0 25 Commercial, industrial and agricultural 7 213 Real estate - residential mortgage 12 0 Consumer 119 226 ------- ------- Total loans charged off 138 464 ------- ------- Recoveries of loans previously charged off: Commercial real estate, construction and land development 4 38 Commercial, industrial and agricultural 70 106 Real estate - residential mortgage 0 35 Consumer 23 61 ------- ------- Total recoveries 97 240 ------- ------- Net charge-offs (recoveries) 41 224 ------- ------- Current period provision for loan losses 50 50 ------- ------- Balance end of period 2,182 2,173 ======= ======
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 - - At the Annual Meeting of Shareholders held on April 22, 1997, a vote was held for the election of Class B directors: Jere M. Coxon, Alan W. Dakey, Charles F. Lebo and Guy J. Snyder, Jr. to serve for a three-year term, and to ratify the selection of Parente, Randolph, Orlando, Carey and Associates as external auditors for the corporation for the year ending December 31, 1997. Jere M. Coxon received 962,393.7358 votes for and 2,488.5339 votes withheld. Alan W. Dakey received 961,389.1914 votes for and 3,493.0783 votes withheld. Charles F. Lebo received 961,420.1914 votes for and 3,462.0783 votes withheld. And Guy J. Snyder, Jr. received 962,393.7358 votes for and 2488.5339 votes withheld. The selection of external auditors received 963,816.0913 votes for, 992 votes against, and 74.1784 votes abstaining. 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/ Eugene F. Shaffer /s/ Gerald D. Schoffstall By:Eugene F. Shaffer By:Gerald D. Schoffstall Chairman, Pres. & CEO Treasurer Date: July 31, 1997 Date: July 31, 1997 EX-27 2
9 1,000 3-MOS DEC-31-1997 JUN-30-1997 4950 30704 0 0 32500 0 0 143793 2182 216298 173764 10035 2258 4754 0 0 1323 24164 216298 6694 1786 9 8489 3577 3816 4673 50 (1) 2443 2599 2599 0 0 1835 1.41 1.41 8.7 965 403 0 2571 2173 138 97 2182 0 0 0
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