<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended March 31, 1997
O TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number: 333-6581
ST. JOSEPH CAPITAL CORPORATION
---------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
DELAWARE 35-1977746
- ---------------------------- ---------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification Number)
of incorporation or organization)
4101 EDISON LAKES PARKWAY, MISHAWAKA, IN 46545
----------------------------------------------
(Address of principal executive offices)
(219) 273-9700
-------------------------------
(Issuer's telephone number)
N/A
------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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. Yes X
---
No
---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
1,265,676 shares of common stock, $0.01 par value per share, were outstanding
as of April 30, 1997.
Transitional Small Business Disclosure Format (check one): Yes No X
--- ---
<PAGE> 2
TABLE OF CONTENTS
Page
Number
PART I ------
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Condensed Balance Sheets,
March 31, 1997 and December 31, 1996 3
Consolidated Condensed Statements of Income,
Three Months Ended March 31, 1997 and 1996. 4
Consolidated Statements of Changes in Stockholders' Equity,
Three Months Ended March 31, 1997 and 1996. 5
Consolidated Condensed Statements of Cash Flow,
Three Months Ended March 31, 1997 and 1996. 6
Notes to Consolidated Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8-9
PART II
ITEM 1. LEGAL PROCEEDINGS
ITEM 2. CHANGES IN SECURITIES
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES S-1
2
<PAGE> 3
ST. JOSEPH CAPITAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
ASSETS 1997 1996
---- ----
<S> <C> <C>
Cash and due from banks $ 1,768,148 $ 3,103
Interest bearing deposits in banks 500,000 1,307,009
Federal Funds sold 7,975,000 100,000
------------ -----------
Total Cash and Cash Equivalents 10,243,148 1,410,112
Securities available for sale 7,513,797 10,127,902
Loans, net 2,844,178 --
Bank premises and equipment, net 468,884 274,720
Other assets 130,708 28,671
------------ -----------
Total Assets $21,200,715 $11,841,405
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits $ 9,176,442 $ --
Repurchase Agreements 285,281 --
Other liabilities 95,782 48,519
------------ -----------
Total Liabilities 9,557,505 48,519
STOCKHOLDERS' EQUITY
Common stock 12,657 12,652
Additional Paid in Capital 12,108,075 12,103,000
Retained deficit (456,025) (290,219)
Unrealized losses on securities available for sale, net (21,497) (32,547)
------------ -----------
Total Stockholders' Equity 11,643,210 11,792,886
------------ -----------
Total Liabilities and Stockholders' $21,200,715 $11,841,405
============ ===========
</TABLE>
3
<PAGE> 4
ST. JOSEPH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
FEBRUARY 29, 1996
THREE MONTHS (DATE OF INCEPTION)
ENDED THROUGH
MARCH 31, 1997 MARCH 31, 1996
-------------- --------------
<S> <C> <C>
INTEREST INCOME:
Loans, including fees $ 25,954 $ --
Securities and other 145,230 79
--------- --------
Total Interest Income 171,184 79
INTEREST EXPENSE:
Deposits 32,671 --
Repurchase Agreements 562 --
--------- --------
Total Interest Expense 33,233 --
Net Interest Income 137,951 79
LESS: PROVISION FOR LOAN LOSSES 41,900 --
--------- --------
Net Interest Income after provision for loan losses 96,051 79
OTHER INCOME: 13,784 --
OTHER EXPENSES:
Salaries and employee benefits 143,684 4,605
Occupancy 49,113 1,038
Other 82,844 510
--------- --------
Total Other Expense 275,641 6,153
--------- --------
Loss before Income Tax $(165,806) $ (6,074)
Income Tax Expense -- --
--------- --------
Net Loss $(165,806) $ (6,074)
========= ========
Net Loss per share (.13) N/A
</TABLE>
4
<PAGE> 5
ST. JOSEPH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
PERIOD FROM
FEBRUARY 29, 1996
(DATE OF INCEPTION)
THREE MONTHS ENDED THROUGH
MARCH 31, 1997 MARCH 31, 1996
-------------- --------------
<S> <C> <C>
Balance, January 1 $11,792,886 $ --
Proceeds from issuance of common stock
for Employee 401k Plan 5,080 --
Proceeds from issuance of common stock -- 1,000
Change in unrealized appreciation on
securities available for sale, net of tax 11,050 --
Net loss (165,806) (6,074)
----------- -----------
Balance at end of period $11,643,210 $ (5,074)
=========== ===========
</TABLE>
5
<PAGE> 6
ST. JOSEPH CAPITAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
<TABLE>
<CAPTION>
Period from
Three Months February 29,1996
Ended (date of inception)
March 31, 1997 March 31, 1996
-------------- --------------
- --------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (165,806) $ (6,074)
Adjustments to reconcile net loss to net cash
from operating activities
Depreciation 11,235 --
Provision for loan loss 41,900 --
Discount accretion, net (48,023) --
Increase in other assets (102,037) (338)
Increase in other liabilities 47,263 --
------------ ----------
Net cash from operating activities (215,468) (6,412)
------------ ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Loans originated, net of repayments (2,886,078) --
Purchase of securities available for sale (10,611,822) --
Maturities of securities available for sale 13,285,000 --
Fixed asset expenditures (205,399) --
------------ ----------
Net cash from investing activities (418,299) --
------------ ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposit accounts 9,176,442 --
Net increase in repurchase agreements 285,281 --
Proceeds from loans -- 175,000
Proceeds from the issuance of common stock -- 1,000
Proceeds from issuance of common stock for
employee 401k Plan 5,080 --
------------ ----------
Net cash from financing activities 9,466,803 176,000
------------ ----------
Net increase in cash and cash equivalents 8,833,036 169,588
Cash and cash equivalents at beginning of period 1,410,112 --
------------ ----------
Cash and cash equivalents at end of period $ 10,243,148 $ 169,588
============ ==========
</TABLE>
6
<PAGE> 7
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements were prepared in accordance
with instructions for Form 10-QSB and, therefore, do not include all
disclosures required by generally accepted accounting principles for complete
presentation of financial statements. In the opinion of management, the
consolidated financial statements contain all adjustments (consisting only of
normal recurring accruals) necessary to present fairly the balance sheets of
St. Joseph Capital Corporation (the "Company") as of March 31, 1997 and
December 31, 1996 and the statements of income, changes in stockholders' equity
and cash flows for the period from January 1, 1997 through March 31, 1997 and
February 29, 1996 (date of inception) through March 31, 1996. The income
reported for the period presented is not necessarily indicative of the results
to be expected for the full year.
NOTE 2 - PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of St.
Joseph Capital Corporation ("the Company") and its wholly owned subsidiary, St.
Joseph Capital Bank (the "Bank"). All significant inter-company accounts and
transactions have been eliminated in consolidation.
NOTE 3 - INITIAL PUBLIC OFFERING
On September 10, 1996, the Company completed an initial common stock offering
during which 1,265,000 shares of the Company's common stock were sold at $10
per share, resulting in gross proceeds of $12.65 million. Expenses associated
with the initial public offering totaling $534,000 were netted against the
gross proceeds and not recorded as expenses in the Company's statement of
income. Thus, the net proceeds from the initial public offering were $12.1
million. The Company used approximately $10 million of the proceeds from the
stock offering to provide the initial capitalization of the Bank in February
1997.
NOTE 4 - DEVELOPMENT STAGE
During 1996, the Company was a development stage company as its wholly owned
subsidiary, the Bank, had not yet commenced its planned principal operations of
banking.
The Bank received regulatory approval to operate as a bank from the Indiana
Department of Financial Institutions on August 8, 1996, and received its
certificate of insurance from the Federal Deposit Insurance Corporation on
February 11, 1997. The Bank commenced operations on February 13, 1997. The
Bank offers a full range of commercial and consumer banking services primarily
within a 15-mile radius of Mishawaka, Indiana.
NOTE 5 - COMPARATIVE DATA
The Company was incorporated in February 1996. Its operating subsidiary (the
Bank) commenced operations on February 13, 1997. As of March 31, 1996, no
significant activity had taken place, therefore comparative statements for the
three months ended March 31, 1996 are not necessarily indicative of the results
that may be expected for the future years.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
- -------
St. Joseph Capital Corporation (the "Company") was formed under the laws
of the state of Delaware for the purpose of becoming the bank holding company
of St. Joseph Capital Bank (the "Bank").
The Bank was capitalized on February 7, 1997 and commenced operations on
February 13, 1997. The Bank is organized as an Indiana chartered commercial
bank that is a non-member of the Federal Reserve System with depository
accounts insured by the Federal Deposit Insurance Corporation. The Bank
provides full-service commercial and consumer banking services in Mishawaka and
the surrounding communities commonly referred to as the Michiana area.
FINANCIAL CONDITION
- -------------------
Total assets of the Company increased by $9,359,310 or 79% to $21,200,715
at March 31, 1997 from $11,841,405 at December 31, 1996. As the Bank is in its
initial year of operations, it is anticipated that asset growth will continue
at a fast pace.
Cash and cash equivalents, which includes federal funds sold, increased by
$8,833,036 to $10,243,148 at March 31, 1997 from $1,410,112 at December 31,
1996. The increase is attributed to $9,176,442 in deposits that have been
obtained since the Bank opened on February 13, 1997.
Securities decreased by $2,614,105 or 25% to $7,513,797 at March 31, 1997
from $10,127,902 at December 31, 1996. The decrease was partially a result of
the redeployment of part of the investment portfolio into loans.
The allowance for loan losses as of March 31, 1997 was $41,900,
representing approximately 1.45% of gross loans outstanding. St. Joseph
Capital Bank has not experienced any credit losses as of March 31, 1997.
Bank premises and equipment increased by $194,164 or 70.7% to $468,884 at
March 31, 1997 from $274,720 at December 31, 1996. The increase resulted from
the purchase of computer equipment, software, and furniture needed to operate
the Bank.
Deposits increased to $9,176,442 at March 31, 1997 as a result of
deposits being obtained from new clients of the Bank since operations began on
February 13, 1997.
RESULTS OF OPERATIONS
- ---------------------
Although the Company was incorporated in 1996, no significant activity
took place until the operating subsidiary (the "Bank") commenced operations on
February 13, 1997. Therefore, comparisons of the first fiscal quarter of 1996
and 1997 are not necessarily meaningful. The net loss for the three month
period ended March 31, 1997 was $165,806 as compared to $6,074 for the same
period in 1996.
Interest income was $171,184 for the three month period ended March 31,
1997, related to interest income on securities, loans and interest earning
deposits. Interest expense was $137,951 for the three month period ended March
31, 1997 related to interest incurred on interest bearing deposits.
8
<PAGE> 9
The Company has an allowance for loan losses of approximately 1.45% of
total loans at March 31, 1997. The provision for loan losses for the three
month period ended March 31, 1997 was $41,900. This amount was provided as a
result of the increase in the total loan portfolio. Management believes the
current reserve would cover any loan losses that may occur on the current loan
portfolio.
Other income of $13,784 for the three month period ended March 31, 1997
consisted of income from loan fees and other miscellaneous fees.
The main components of other expenses were primarily salaries and
benefits. Other expense for the three month period ended March 31, 1997 was
$82,844, consisting primarily of legal and accounting fees, advertising,
courier service, insurance and supplies.
Since the Company is a start-up venture, it is anticipated that the
Company's net losses will continue for some period in the future.
RECENT REGULATORY DEVELOPMENTS
- ------------------------------
Various bills have been introduced in the Congress that would allow bank
holding companies to engage in a wider range of nonbanking activities,
including greater authority to engage in securities and insurance activities.
While the scope of permissible nonbanking activities and the conditions under
which the new powers could be exercised varies among the bills, the expanded
powers generally would be available to a bank holding company only if the bank
holding company and its bank subsidiaries remain well-capitalized and
well-managed. The bills also impose various restrictions on transactions
between the depository institution subsidiaries of bank holding companies and
their non-bank affiliates. These restrictions are intended to protect the
depository institutions from the risks of the new nonbanking activities
permitted to such affiliates.
At this time, the Company is unable to predict whether any of the pending
bills will be enacted and, therefore, is unable to predict the impact such
legislation may have on the operations of the Company and the Bank.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This report contains certain forward looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Reform Act of
1995, and is including this statement for purposes of these safe harbor
provisions. Forward-looking statements, which are based on certain assumptions
and describe future plans, strategies and expectations of the Company, are
generally identifiable by use of the words "believe," "expect," "intend,"
"anticipate," "estimate," "project" or similar expressions. The Company's
ability to predict results or the actual effect of future plans or strategies
is inherently uncertain. Factors which could have a material adverse affect on
the operations and future prospects of the Company and the subsidiaries
include, but are not limited to, changes in: interest rates, general economic
conditions, legislative/regulatory changes, monetary and fiscal policies of the
U.S. Government, including policies of the U.S. Treasury and the Federal
Reserve Board, the quality or composition of the loan or investment portfolios,
demand for loan products, deposit flows, competition, demand for financial
services in the Company's market area and accounting principles, policies and
guidelines. These risks and uncertainties should be considered in evaluating
forward-looking statements and undue reliance should not be placed on such
statements. Further information concerning the Company and its business,
including additional factors that could materially affect the Company's
financial results, is included in the Company's filings with the Securities and
Exchange Commission.
9
<PAGE> 10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any legal proceedings.
ITEM 2. CHANGES IN SECURITIES
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
ITEM 5. OTHER INFORMATION
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
None
10
<PAGE> 11
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
ST. JOSEPH CAPITAL CORPORATION
(Registrant)
Date: May 12, 1997
-----------------------------------------
John W. Rosenthal
President
Date: May 12, 1997
-----------------------------------------
Edward R. Pooley
Principal Financial Officer
S-1
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 1,768,148
<INT-BEARING-DEPOSITS> 500,000
<FED-FUNDS-SOLD> 7,975,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 7,513,797
<LOANS> 2,886,078
<ALLOWANCE> (41,900)
<TOTAL-ASSETS> 21,200,715
<DEPOSITS> 9,176,442
<SHORT-TERM> 0
<LIABILITIES-OTHER> 599,592
<LONG-TERM> 0
0
0
<COMMON> 12,657
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 11,643,211
<INTEREST-LOAN> 25,954
<INTEREST-INVEST> 145,230
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 171,184
<INTEREST-DEPOSIT> 32,671
<INTEREST-EXPENSE> 561
<INTEREST-INCOME-NET> 137,951
<LOAN-LOSSES> 41,900
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 275,641
<INCOME-PRETAX> (165,806)
<INCOME-PRE-EXTRAORDINARY> (165,806)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (165,806)
<EPS-PRIMARY> (.13)
<EPS-DILUTED> 0
<YIELD-ACTUAL> 1.7
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> (41,900)
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> (41,900)
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
