SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ x ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ___________________ to ___________________
Commission file number 0-21285
MID-ATLANTIC COMMUNITY BANKGROUP, INC.
(Exact Name of Small Business Issuer as Specified in its Charter)
VIRGINIA 54-1809409
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
7171 George Washington Mem. Hwy.
Gloucester, Virginia 23061
(Address of Principal Executive Offices)
(804) 693-0628
(Issuer's Telephone Number, Including Area Code)
(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 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 September 30, 1997.
Common stock, $5 par value--1,093,833
<PAGE>
INDEX
MID-ATLANTIC COMMUNITY BANKGROUP, INC. Page No.
Part I. Financial Information
Item 1. Financial Statements 3
Consolidated Balance Sheets--
September 30, 1997 and December 31, 1996
Consolidated Statements of Income-- 4
Nine months ended September 30, 1997 and 1996
Three months ended September 30, 1997 and 1996
Consolidated Statements of Stockholders Equity-- 5
Nine months ended September 30, 1997 and 1996
Consolidated Statements of Cash Flows-- 6
Nine months ended September 30, 1997 and 1996
Notes to Consolidated Financial Statements 7 - 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10 - 12
Part II. Other Information: 13 - 16
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
2
<PAGE>
Item 1. FINANCIAL INFORMATION
MID-ATLANTIC COMMUNITY BANKGROUP, INC. AND AFFILIATE
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS: 1997 1996
------------------- ------------------
<S> <C> <C>
Cash and due from bank $ 5,419 $ 6,015
Securities Available for Sale (at Market Value) 22,796 27,297
Securities Held to Maturity
(Market Value $6,960 in 1997) 6,924 -0-
Federal Funds Sold 10,984 5,364
Loans, Net 100,169 90,978
Premises and equipment 5,546 4,923
Other Real Estate Owned 132 -0-
Other assets 2,383 1,857
--------- ---------
TOTAL ASSETS $ 154,353 $ 136,434
========= =========
LIABILITIES:
Deposits
Demand $ 18,345 $ 15,133
Interest-bearing Demand 22,280 25,968
Savings 15,466 14,969
Certificates of Deposit, $100,000 or more 13,810 9,417
Other Time 64,116 54,998
--------- ---------
TOTAL DEPOSITS 134,017 120,485
Short-term Debt 279 352
Long-term Debt 34 43
Other Liabilities 887 1,122
--------- ---------
TOTAL LIABILITIES 135,217 122,002
--------- ---------
SHAREHOLDERS' EQUITY:
Common stock, par value $5 per share,
10,000,000 shares authorized, 1,093,833
shares issued in 1997 and 944,333 in 1996 5,469 4,722
Surplus 9,302 6,701
Undivided Profits 4,350 3,170
Net Unrealized Gain (Loss) on
Available for Sale Securities 15 (161)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 19,136 14,432
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 154,353 $ 136,434
========= =========
</TABLE>
Notes to financial statements are an integral part of these statements.
3
<PAGE>
MID-ATLANTIC COMMUNITY BANKGROUP, INC. AND AFFILIATE
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans and Fees $ 2631 $ 2243 $ 7592 $ 6337
Federal Funds Sold 181 54 281 166
Investment Securities 506 480 1527 1259
------ ------- ------ ------
Total Interest Income 3318 2777 9400 7762
INTEREST EXPENSE:
Demand Deposits 202 191 587 494
Savings Deposits 115 96 329 262
Certificates of Deposit, $100,000 or more 180 124 471 365
Other Time Deposits 892 709 2497 2043
Short-term Debt 2 2 7 6
Long-term Debt 1 1 2 2
------ ------- ------ ------
Total Interest Expense 1392 1123 3893 3172
------ ------- ------ ------
Net Interest Income 1926 1654 5507 4590
PROVISION FOR
LOAN AND LEASE LOSSES 117 81 327 239
------ ------- ------ ------
Net Interest Income After
Provision for Loan and Lease Losses 1809 1573 5180 4351
OTHER INCOME:
Service Chgs on Deposit Accts 152 111 443 326
Other Service Charges & Fees 56 37 156 103
Securities Gains (Losses) 0 (6) 2 (3)
------ ------- ------ ------
Total Other Income 208 142 601 426
OTHER EXPENSES:
Salaries & Employee Benefits 731 533 2094 1577
Occupancy Expenses 59 38 155 104
Furniture & Equipment Expenses 168 145 537 405
Other Operating Expenses 459 349 1313 948
------ ------- ------ ------
Total Other Expenses 1417 1065 4099 3034
------ ------- ------ ------
Income Before Income Taxes 600 650 1682 1743
Applicable Income Taxes 184 246 502 624
------ ------- ------ ------
Net Income $ 416 $ 404 $ 1180 $ 1119
====== ======= ======= ======
NET INCOME PER SHARE .39 .41 1.17 1.15
====== ======= ======= ======
</TABLE>
Notes to financial statements are an integral part of these statements.
4
<PAGE>
MID-ATLANTIC COMMUNITY BANKGROUP, INC. AND AFFILIATE
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------
1997 1996
---- ----
<S> <C> <C>
Balance at Beginning of Year $ 14,431 $ 13,335
Net Income 1,180 1,119
Issuance of Common Stock - Stock Offering 3,348 0
Net change in unrealized gain (loss) on securities
available for sale 177 (442)
---------- ---------
Balance at End of Period $ 19,136 $ 14,012
========== =========
</TABLE>
Notes to financial statements are an integral part of these statements.
5
<PAGE>
MID-ATLANTIC COMMUNITY BANKGROUP, INC. AND AFFILIATE
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1997 1996
-------- -----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,180 1,119
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 227 195
Provision for loan losses 327 239
(Profits) Loss on sale of securities available for sale (2) 3
Changes in operating assets and liabilities:
(Increase) in other assets (617) (774)
Increase in other liabilities (235) 540
-------- ----------
Net Cash Provided By Operating Activities $ 880 $ 1,322
-------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (increase) in loans ($ 9,650) ($ 15,506)
Purchase of securities available for sale (1,894) (16,912)
Proceeds from sales of securities available for sale 1,593 13,934
Purchase of investment securities (1,853) 0
(Increase) decrease in federal funds sold - net (5,620) 3,277
Purchase of premises and equipment (850) 1,229)
-------- ----------
Net Cash (Used In) Investing Activities ($ 18,274) ($16,436)
-------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deposits - net $ 13,532 $ 15,094
Dividends paid 0 (113)
Proceeds from issuance of stock - net 3,348 0
Curtailment of other borrowed funds (82) (9)
-------- ----------
Net Cash Provided by Financing Activities $ 16,798 $ 14,972
-------- ----------
Net Increase (Decrease) In Cash and Due From Banks (596) (142)
CASH AND DUE FROM BANKS - BEGINNING OF PERIOD 6,015 4,580
-------- ----------
CASH AND DUE FROM BANKS - END OF PERIOD $ 5,419 $ 4,438
========== ===========
</TABLE>
Notes to financial statements are an integral part of these statements.
6
<PAGE>
MID-ATLANTIC COMMUNITY BANKGROUP, INC. AND AFFILIATE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
The consolidated statements include the accounts of Mid-Atlantic Community
BankGroup, Inc. and its affiliate, Peninsula Trust Bank. All significant
intercompany balances and transactions have been eliminated. In the
opinion of management, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial positions as of
September 30, 1997 and December 31, 1996, and the results of operations
and cash flows for the nine months ended September 30, 1997 and 1996.
The results of operations for the nine months ended September 30, 1997 and
1996 are not necessarily indicative of the results to be expected for the
full year.
2. Investment Securities
Amortized cost and carrying amount (estimated fair value) of securities
available for sale are summarized as follows:
<TABLE>
<CAPTION>
September 30, 1997
---------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
US Treasury Securities 633 -- 5 628
US Government Agencies & Corporations 11,802 47 14 11,835
Obligations of States & Political Subdivisions 5,482 33 58 5,457
Mortgage-backed Securities 4,456 20 -- 4,476
Federal Reserve Bank Stock 343 -- -- 343
Other Equity Securities 57 -- -- 57
---------- -------- ---------- ---------
$ 22,773 $ 100 $ 77 $ 22,796
========== ======== ========== =========
</TABLE>
Amortized cost and carrying amount (estimated fair value) of securities
held to maturity are summarized as follows:
<TABLE>
<CAPTION>
September 30, 1997
---------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
US Government Agencies & Corporations 3,833 15 -- 3,848
Obligations of States & Political Subdivisions 2,248 25 4 2,269
Mortgage-backed Securities 843 -- -- 843
---------- -------- ---------- ---------
$ 6,924 $ 40 $ 4 $ 6,960
========== ======== ========== =========
</TABLE>
7
<PAGE>
Securities available for sale at December 31, 1996 consist of the following:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
US Treasury Securities 534 -- 5 529
US Government Agencies and Corporations 15,650 35 211 15,474
Obligations of States & Political Subdivisions 7,468 40 87 7,421
Mortgage-backed Securities 3,196 2 21 3,177
Federal Reserve Bank Stock 343 -- -- 343
Marketable Equity Securities 351 2 -- 353
--------- ------- ------ ----------
$ 27,542 $ 79 $ 324 $ 27,297
========= ======= ====== ==========
</TABLE>
Nine Months Ended
September 30,
-------------
1997 1996
---- ----
(In Thousands of Dollars)
Gross proceeds from sales of securities 1,593 13,934
======== =========
Gross Gains on Sale of Securities 2 22
Gross Losses on Sale of Securities -- (25)
-------- ---------
Net Securities Losses 2 (3)
======== =========
3. Loans
The following is a summary of loans outstanding at the end of the periods
indicated:
September 30, December 31,
1997 1996
---- ----
(In Thousands of Dollars)
Commercial Mortgage 21,184 19,622
Residential Mortgage 28,988 25,056
Home Equity 10,098 9,318
Construction 6,092 6,915
Commercial 11,755 10,292
Installment 23,355 20,848
All Other 557 522
------------ -----------
102,029 92,573
Less Unearned Income 521 483
------------ -----------
101,508 92,090
Less Allowance for Loan and Lease Losses 1,339 1,112
------------ -----------
$ 100,169 $ 90,978
============ ===========
8
<PAGE>
The following schedule summarizes the changes in the allowance for loan and
lease losses:
<TABLE>
<CAPTION>
Nine Months Nine Months
Ending Ending
September 30, September 30, December 31,
1997 1996 1996
-------------------- ------------------- -------------
(In Thousands of Dollars)
<S> <C> <C> <C>
Balance, Beginning 1,112 865 865
Provision Charged Against Income 327 239 380
Recoveries 46 23 28
Loans Charged Off (146) (79) (161)
-------- -------- ---------
Balance, Ending $ 1,339 $ 1,048 $ 1,112
======== ======== =========
</TABLE>
Nonperforming assets consist of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
---- ----
(In Thousands of Dollars)
<S> <C> <C>
Nonaccrual Loans $ 486 $ 190
Restructured Loans -- ---
------ ------
Nonperforming Loans 486 190
Foreclosed Properties 132 ---
------ ------
Nonperforming Assets $ 618 $ 190
====== ======
</TABLE>
Total loans past due 90 days or more and still accruing were $102 on September
30, 1997 and $88 on December 31, 1996.
4. Earnings Per Share
Earnings per share are computed on the weighted average common shares
outstanding of 1,075,151 and 975,247 for the three months ended September 30,
1997 and 1996, respectively, and 1,010,326 and 974,791 for the nine months ended
September 30, 1997 and 1996, respectively.
5. Capital Requirements
A comparison of the Company's capital as of September 30, 1997 with the
minimum requirements is presented below:
Minimum
Actual Requirements
------ ------------
Tier I Risk-based Capital 17.84 % 4.00 %
Total Risk-based Capital 19.09 % 8.00 %
Leverage Ratio 12.63 % 4.00 %
9
<PAGE>
Item 2. Management's Discussion and Analysis
The following presents management's discussion and analysis of the consolidated
financial condition and results of operations of Mid-Atlantic community
BankGroup, Inc. (the "Company") as of the dates and for the periods indicated.
This discussion should be read in conjunction with the Selected Financial Data,
the Company's Consolidated Financial Statements and the Notes thereto, and other
financial data appearing elsewhere in this report. The consolidated financial
statements include the accounts of the Company and its wholly-owned subsidiary,
Peninsula Trust Bank (the "Bank").
PENINSULA TRUST BANK
Results of Operations
After experiencing strong asset growth during the second quarter of 1997,
Peninsula Trust Bank (the Bank) enjoyed moderate balance sheet expansion during
the third quarter of 1997, with total assets increasing $6.4 million, or 4.3%
over June 30, 1997 and $17.9 million, or 13.1% over December 31, 1996. Growth
was funded from a combination of new deposits, which reflected $2.4 million and
$13.5 million increases for the three months and nine months ending September
30, 1997, respectively and proceeds from the Company's July 24, 1997 stock
offering.
Loan demand somewhat mirrored the moderate growth in deposits during the third
quarter, evidenced by net loans increasing $3.4 million (3.6%) and $9.2 million
(10.1%), respectively, over June 30, 1997 and December 31, 1996.
Asset quality continues to be strong. Total loans past due 30 days or more
equaled $2.3 million (2.25% of total outstandings). Included in the 30 day total
are $102,000 which are 90 days or more past due and still accruing interest.
Non-accrual loans totaled $486,000 at September 30, 1997, which represented
0.48% of total outstanding loans and 36.3% of the loan loss reserve. Included in
the non-accrual loan total are two loans totaling $314,000, secured by real
estate, one of which has been sold by the Bank at auction, with little or no
expected net loss. The provision for loan losses was $117,000 in the third
quarter of 1997 and $327,000 in the first nine months of 1997. Gross charge-offs
for the quarter were $81,000, while total recoveries were $10,000.
The Bank maintained its practice during the third quarter of selling Federal
funds, having sold continuously on a daily basis in amounts averaging $12.8
million, 8.47% of average total assets. These figures compare to $4.7 million
and 3.37%, respectively, for the second quarter 1997. The quarter-end balance of
$11.0 million represented a $2.6 million increase from the second quarter 1997.
Management delayed aggressive employment of the proceeds of the July, 1997 stock
offering (discussed below), resulting in the buildup of excess funds sales.
The level of the investment account increased modestly during the third quarter
of 1997, ending the period at $29.7 million or 19.2% of total assets. The
portfolio is comprised of 2% US Treasuries, 71% US Government Agencies, 26%
State, County and Municipal governments, and 1% other equity securities and
Federal Reserve Bank Stock.
The Financial Accounting Standards Board (FASB) Statement 115 stipulated the way
in which banks must classify and account for their securities portfolio,
beginning with the first quarter of 1994. Securities are classified as
Investment Securities when management has both the intent and the ability at the
time of purchase to hold the securities until maturity. Investment Securities
are carried at cost adjusted for amortization of premiums and accretion of
discounts. Securities which are held for an indefinite period of time are
classified as Securities Available for Sale and are marked to market at each
financial reporting date, or at each month-end. Securities Available for Sale
include securities that may be sold in response to changes in interest rates,
10
<PAGE>
changes in the security's prepayment risk, increases in loan demand, general
liquidity needs and other similar factors.
The Bank elected, as of year-end 1995, to classify the entire portfolio as
"available for sale". In an effort to manage the fluctuation in the "net
unrealized gains/losses", the Bank elected to reclassify $5.1 million of the
portfolio as "held to maturity" as of July 31, 1997, resulting in a one time
capital adjustment for the gain. These reclassified bonds have longer final
maturities. However, due their respective call structures, exhibit more price
volatility with subtle changes in overall interest rates. Also the need for such
bonds to be used for liquidity purposes is considered remote. The Bank purchased
an additional $1.9 million during the remainder of the quarter, which were
classified as held to maturity.
Management has implemented additional tools for the measurement of three
critical elements in portfolio management: interest rate risk, call and/or
extension risk and maturity distribution. Activities of the Bank's Asset
Liability Committee (ALCO) will include establishing parameters for the
effective modified duration (EMD) for the portfolio in the future. With better
tools to monitor duration, long-term earnings performance of the portfolio is
expected to demonstrate improved stability over varying interest rate cycles.
These parameters will also draw a tighter relationship between EMD and bond
convexity. Convexity measures the percentage amount of portfolio price
appreciation if interest rates fall 1% relative to the percentage of price
depreciation if interest rates rise 1%. The more a bond declines relative to its
depreciation, the higher the negative convexity and, consequently the more
potential call and extension risk that bond is likely to have. The Bank's
overall portfolio has a current negative convexity of 1.40. Relative to the
current EMD, management is targeting a reduction in negative convexity to a
level of .70. This may be accomplished through a mixture of future purchases
blending shorter term maturities and longer term maturities with an absence of
call features in individual bonds.
Deposits represent 99.1% of total liabilities of the Bank, including
non-interest bearing checking accounts which represent 13.7% of total deposits.
Earnings
Net income for the third quarter of 1997 increased to $416,000, compared to
$349,000 for the second quarter of 1997 and $404,000 for the third quarter of
1996. The increase in earnings resulted from an increase in net interest income
and non-interest income while non-interest expense remained virtually unchanged.
Net interest income for the third quarter of 1997 totaled $1,926,000 (a 16.4%
increase over a similar period in 1996). The net interest margin experienced
modest contraction as the average yield on interest earning assets declined by
30 basis points during a time when the average rate on interest bearing
liabilities declined by 1 basis point. As a result, the 19.5% increase in
interest income for the third quarter 1997 compared to third quarter 1996 was
offset by a 24.0% increase in interest expense for the same period. The quarter
over quarter decline was due primarily to an increased reliance on interest from
Federal funds sold as a percentage of total interest income. While the average
yield on these overnight investment assets increased by 23 basis points, their
absolute yield of 5.65% was well below yields of alternative earning assets such
as loans or investment securities. However, the temporary buildup of excess
liquidity discussed above should be curtailed during the next two quarters.
Non-interest expense for the third quarter totaled $1.4 million, compared to the
same amount in the second quarter of 1997 and $1.1 million for the third quarter
of 1996. The increase in non-interest expense resulted from costs incurred in
connection with opening the Company's fifth banking office and new operations
center in Glenns, during the first quarter of 1997, the full impact of which was
not realized until the second quarter. In addition, the Bank completed minor
renovations and improvements at the Main Office. Capitalization of these
improvements and increases in furniture, fixtures and equipment relating to the
new branch, operations center and
11
<PAGE>
renovations at the Main Office resulted in increased depreciation expense of
approximately $12,000 per month. The Bank's rapid growth during the past three
years necessitated improved facilities for the operations support functions,
such as Accounting, Bookkeeping and Data Processing. In May, the loan loss
provision was increased by $12,000 per month due to increased loan volume,
resulting in a $24,000 increase in the second and third quarters of 1997.
Management is targeting a 1.26% loan loss reserve by year-end.
Capital and Liquidity
Equity capital at September 30, 1997 totaled $19.1 million, representing 12.40%
of total assets. The Company completed another successful stock offering in
July, 1997. The offering was represented by the sale of 149,500 additional
shares of common stock resulting in a net increase to total stockholders' equity
of $3,347,835. This level of capital will position the Company for growth well
into the future and could support asset growth to more than $200 million.
Liquidity is provided by both excess funds in the form of Federal funds sold and
access to the Federal funds market through the purchase of Federal funds from
correspondent banks. The Bank maintains lines of credit to purchase Federal
funds totaling $5.4 million. Federal funds sold equaled 27.0% of total demand
deposits at September 30, 1997. This compares to 13.1% at September 30, 1996.
This is considered an adequate level of liquidity to meet anticipated deposit
withdrawals and expected loan demand.
As mentioned above, future purchases in the investment portfolio will more
clearly delineate those bonds purchased for liquidity purposes. These
instruments will be purchased with greater attention to minimizing potential
price and market value volatility.
Future Plans
Construction of the permanent facility for the Newport News office began during
the first half of 1997. The branch will be located at the corner of Thimble
Shoals Boulevard and J. Clyde Morris Boulevard near the entrance to the Oyster
Point Industrial Park. The Company acquired the land for its permanent Newport
News branch site in 1996 at a cost of approximately $620,000. Construction costs
for the branch building are expected to be approximately $850,000, and combined
with site work should result in total capitalized improvements approximating
$1,000,000. The current operations for the Newport News branch are conducted in
rented office space, with a lease that expires in October, 1998.
The Company plans to establish a branch office in Hampton, Virginia to
complement its Newport News office and is currently evaluating available sites.
Although plans are incomplete and subject to change, it is the Company's desire
to open a branch office in Hampton, Virginia in the second half of 1998.
The Company expects to enter into an agreement, subject to state and federal
regulatory approval, to acquire a 50% membership interest in Johnson Mortgage
Company, L.L.C., which will be the successor to Johnson Mortgage Company
("Johnson Mortgage"), for a total of $500,000. Half the purchase price will be
paid in cash and the other half will be paid in shares of the Company's common
stock with a market value of $250,000 at the time of closing. Johnson Mortgage
originates and sells long-term, fixed-rate mortgage loans, a product the Company
has not previously offered.
12
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities
d) On July 24, 1997, the Commission declared the effectiveness
of the Company's Registration Statement on Form SB-2 (the
"Registration Statement"), file number 333-25557. The
Registration Statement covered 130,000 shares of the Company's
common stock, par value $5.00 per share ("Common Stock"), and up
to 19,500 additional shares of Common Stock that the Company
granted Davenport & Company LLC, as underwriter, under a 30-day
option to purchase solely to cover over-allotments, if any. The
offering commenced on July 24, 1997, and the sale of the 130,000
shares closed on July 30, 1997 and the sale of the 19,500 shares
covering the over-allotment closed on August 21, 1997.
The amount of Common Stock registered was 149,500 shares, and the
aggregate price of the offering amount registered was
$3,830,937.50. The amount of Common Stock sold was 149,500
shares, and the aggregate offering price of the amount sold was
$3,662,750.
Reasonable estimates for the amount of expenses incurred for the
Company's account in connection with the issuance and
distribution of the 149,500 shares of Common Stock described
above are $246,675 in underwriting discounts and $50,000 in
offering expenses, neither of which represent direct or indirect
payments to directors, officers, general partners of the Company
or their associates, to persons owning ten percent or more of any
class of equity securities of the Company, or to affiliates of
the Company. The net offering proceeds to the Company after
deducting total expenses was $3,416,075.
The net proceeds from the shares of Common Stock offered as
described above are being used for general corporate purposes,
including financing the opening of future branches and to support
the growth of assets and deposits. Additional capital is expected
to allow the Company to grow internally and through new branches
to support greater loan and deposit volumes. No direct or
indirect payments have been made to directors, officers, general
partners of the Company or their associates, to persons owning
ten percent or more of any class of equity securities of the
Company, or to affiliates of the Company.
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and reports on Form 8-K
a) Exhibits
11 Statement re: computation of per share earnings
b) Form 8-K - None
13
<PAGE>
SIGNATURES
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-ATLANTIC COMMUNITY BANKGROUP, INC.
Date: November 14, 1997 BY /s/ W. J. Farinholt
--------------------------------------
W. J. Farinholt, President & CEO
Date: November 14, 1997 BY /s/ Kenneth E. Smith
--------------------------------------
Kenneth E. Smith, Exec. Vice President
& Chief Financial Officer
Date: November 14, 1997 BY /s/ Kathleen C. Healy
--------------------------------------
Kathleen C. Healy, Vice President &
Chief Accounting Officer
14
MID-ATLANTIC COMMUNITY BANKGROUP, INC.
Exhibit (11)--Statement re: computation of per share earnings
3 Months Ended September 30,
1997 1996
---- ----
PRIMARY
Average shares outstanding 1,042,045 944,333
Net effect of dilutive stock
options--based on the treasury
stock method using average
market price 33,106 30,914
-------------- --------------
TOTAL 1,075,151 975,247
============== ==============
Net Income $ 415,892 $ 403,625
============== ==============
Per Share Amount $ 0.39 $ 0.41
============== ==============
FULLY DILUTED
Average shares outstanding 1,042,045 944,333
Net effect of dilutive stock
options--based on the treasury
stock method using the year
end market price, if higher
than average market price 34,504 33,064
-------------- --------------
TOTAL 1,076,549 977,397
============== ==============
Net Income $ 415,892 $ 403,625
============== ==============
Per Share Amount $ 0.39 $ 0.41
============== ==============
15
MID-ATLANTIC COMMUNITY BANKGROUP, INC.
Exhibit (11)--Statement re: computation of per share earnings
9 Months Ended September 30,
1997 1996
---- ----
PRIMARY
Average shares outstanding 977,262 944,333
Net effect of dilutive stock
options--based on the treasury
stock method using average
market price 33,064 30,458
-------------- ---------------
TOTAL 1,010,326 974,791
============== ===============
Net Income $ 1,180,479 $ 1,119,085
============== ===============
Per Share Amount $ 1.17 $ 1.15
============== ===============
FULLY DILUTED
Average shares outstanding 977,262 944,333
Net effect of dilutive stock
options--based on the treasury
stock method using the year
end market price, if higher
than average market price 34,504 33,064
-------------- ---------------
TOTAL 1,011,766 977,397
============== ===============
Net Income $1,180,479 $ 1,119,085
============== ===============
Per Share Amount $ 1.17 $ 1.14
============== ===============
16
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