UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
_X_ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1999
_____ 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: 0-23345
WYMAN PARK BANCORPORATION, INC.
-----------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
DELAWARE 52-2068893
- ------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
11 WEST RIDGELY ROAD, LUTHERVILLE, MARYLAND 21093
-------------------------------------------------
(Address of Principal Executive Offices)
(410)-252-6450
--------------
Registrant's Telephone Number, Including Area Code
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
--- ---
As of March 31, 1999, the issuer had 905,926 shares of Common Stock issued and
outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
---- -----
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CONTENTS
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PART I. FINANCIAL INFORMATION PAGE
---------------------- -----
Item I. Financial Statements
Consolidated Statements of Financial Condition at
March 31, 1999 and June 30, 1998................................. 2
Consolidated Statements of Operations for the Three Month
and Nine Month Periods Ended March 31, 1999 and 1998............. 3
Consolidated Statements of Cash Flows for the Nine Month
Periods Ended March 31, 1999 and 1998............................ 4
Notes to Consolidated Financial Statements.......................5-7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.......................................8-13
PART II. OTHER INFORMATION
-----------------
Item 1. Legal Proceedings.................................................14
Item 2. Changes in Securities.............................................14
Item 3. Defaults Upon Senior Securities...................................14
Item 4. Submission of Matters to a Vote of Security Holders...............14
Item 5. Other Information.................................................14
Item 6. Exhibits and Reports on Form 8-K..................................14
SIGNATURES....................................................................15
1
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<TABLE>
<CAPTION>
Wyman Park Bancorporation, Inc. and Subsidiaries
Lutherville, Maryland
Consolidated Statements of Financial Condition
March 31, June 30,
1999 1998
--------- --------
(Unaudited)
ASSETS
--------
<S> <C> <C>
Cash and noninterest bearing deposits $ 314,657 $ 206,303
Interest bearing deposits in other banks 4,182,103 2,071,076
Federal funds sold 7,305,330 4,570,744
---------- ----------
Total cash and cash equivalents 11,802,090 6,848,123
Loans receivable, net 59,308,058 62,042,464
Mortgage-backed securities held to maturity
at amortized cost, fair value of $231,308 (3/99)
and $291,212 (6/98) 229,894 283,715
Federal Home Loan Bank of Atlanta stock, at cost 509,900 509,900
Accrued interest receivable 282,696 328,934
Ground rents owned, at cost 125,487 129,108
Property and equipment, net 159,303 188,120
Prepaid expenses and other assets 76,690 60,504
Federal and state income taxes receivable -- 130
Deferred tax asset 165,563 150,019
---------- -----------
Total Assets $72,659,681 $70,541,017
----------- -----------
LIABILITIES & STOCKHOLDERS'EQUITY
----------------------------------
Liabilities:
Demand deposits $ 6,163,323 $ 5,611,764
Money market and NOW accounts 11,366,184 9,429,037
Time deposits 40,274,120 38,977,347
----------- -----------
Total deposits 57,803,627 54,018,148
Checks outstanding in excess of bank balance 6,184 143,430
Advance payments by borrowers for taxes,
insurance and ground rents 1,039,627 1,368,467
Accrued interest payable on savings deposits 20,032 17,495
Accrued expenses and other liabilities 488,791 448,120
Federal and state income taxes payable 8,314 279,073
----------- -----------
Total liabilities 59,366,575 56,274,733
STOCKHOLDERS' EQUITY
-----------------------
Common stock, par value $.0l per share;
authorized 2,000,000 shares; issued
1,011,713 shares; issued
and outstanding 905,926 shares 10,117 10,117
Additional paid-in capital 9,704,005 9,704,005
Contra equity - Employee Stock Ownership Plan (ESOP) (720,090) (720,090)
Contra equity - Recognition and Retention Plan (RRP) (302,667) --
Contra equity - Treasury Stock; 105,787shares, at
cost at March 31, 1999 (1,199,764) --
Retained earnings, substantially restricted 5,801,505 5,272,252
----------- -----------
Total stockholders' equity 13,293,106 14,266,284
----------- -----------
Total liabilities and stockholders' equity $72,659,681 $70,541,017
----------- -----------
</TABLE>
See accompanying notes to financial statements.
2
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<TABLE>
<CAPTION>
Wyman Park Bancorporation, Inc. and Subsidiaries
Lutherville, Maryland
Consolidated Statements of Operation
(Unaudited)
For the Nine Months For the Three Months
Ended March 31, Ended March 31,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest and fees on loans receivable $3,470,934 $3,476,269 $1,112,517 $1,198,467
Interest on mortgage-backed securities 13,271 18,124 4,115 5,796
Interest on investment securities -- 85,215 -- 13,463
Interest on other investments 385,026 196,531 146,239 109,252
---------- ---------- ---------- ----------
Total interest income $3,869,231 $3,776,139 $1,262,871 $1,326,978
---------- ---------- ---------- ----------
Interest on savings deposits $2,015,185 $2,028,929 $ 660,970 $ 648,263
Interest on Federal Home Loan Bank
of Atlanta advances -- 37,394 -- --
Interest on escrow deposits 2,467 3,352 1,093 1,557
---------- ---------- ---------- ----------
Total interest expense $2,017,652 $2,069,675 $ 662,063 $ 649,820
Net interest income before provision
for loan losses 1,851,579 1,706,464 600,808 677,158
Provision for loan losses 2,550 6,400 -- 2,500
---------- ---------- ---------- ----------
Net interest income $1,849,029 $1,700,064 $ 600,808 $ 674,658
---------- ---------- ---------- ----------
OTHER INCOME
Loan fees and service charges $ 50,767 $ 45,680 $ 17,285 $ 15,673
Gain on sales of loans receivable 47,174 6,031 9,154 1,969
Other 21,546 21,182 5,610 7,193
---------- ---------- ---------- ----------
Total other income $ 119,487 $ 72,893 $ 32,049 $ 24,835
---------- ---------- ---------- ----------
NONINTEREST EXPENSES
Salaries and employee benefits $ 629,438 $ 724,480 $ 240,742 $ 186,377
Occupancy costs 71,989 70,698 24,063 23,612
Federal deposit insurance premiums 24,958 26,485 8,630 8,731
Data processing 58,287 55,998 21,378 20,330
Advertising 33,470 43,007 10,671 20,282
Franchise and other taxes 41,554 32,928 18,573 15,176
Other 250,561 207,594 82,399 76,919
---------- ---------- ---------- ----------
Total noninterest expenses $1,110,257 $1,161,190 $ 406,456 $ 351,427
Income before tax provision 858,259 611,767 226,401 348,066
Provision for income taxes 322,176 238,120 74,456 133,900
---------- ---------- ---------- ----------
Net Income $ 536,083 $ 373,647 $ 151,945 $ 214,166
---------- ---------- ---------- ----------
Net income per share, basic (Note 4) $ 0.59 N/A $ 0.17 N/A
Net income per share, diluted (Note 4) $ 0.58 N/A $ 0.17 N/A
</TABLE>
See accompanying notes to financial statements.
3
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<TABLE>
<CAPTION>
Wyman Park Bancorporation, Inc.
and Subsidiaries
Lutherville, Maryland
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended March 31,
---------------------------
1999 1998
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
- ------------------------------------
Net income $ 536,083 $ 373,647
Adjustments to reconcile net income to net
Cash provided by operating activities:
Depreciation and amortization 41,086 47,007
Non-cash compensation under stock based benefit plan 75,667 --
Provision for loan losses 2,550 6,400
Amortization of loan fees (66,187) (64,519)
Gain on sales of loans receivable (47,174) (6,031)
Loans originated for sale (4,042,000) (515,700)
Proceeds from loans originated for sale 4,089,174 521,731
Decrease in accrued interest receivable 46,239 25,964
(Increase) decrease in prepaid expenses and other assets (16,186) 18,157
Increase in accrued expenses and other liabilities 40,671 301,708
Decrease in federal and state income taxes receivable 130 --
Increase (decrease) in federal and state income taxes payable (286,303) 113,242
Increase (decrease) in accrued interest payable on
savings deposits 2,537 (1,517)
---------- ----------
Net cash provided by operating activities 376,287 820,089
CASH FLOWS FROM INVESTING ACTIVITIES
- ------------------------------------
Proceeds from sale of ground rents 3,620 --
Purchases of investment securities available for sale -- (3,298,020)
Maturities of investment securities available for sale -- 3,000,000
Net (increase) decrease in loans receivable 3,033,549 (5,554,836)
Purchase of loan participations (235,506) (1,341,703)
Mortgage-backed securities principal repayments 53,821 48,788
Purchases of property and equipment (12,268) (46,615)
---------- ----------
Net cash provided by (used in) investing activities 2,843,216 (7,192,386)
CASH FLOWS FROM FINANCING ACTIVITIES
- -------------------------------------
Net increase (decrease) in savings deposits 3,785,479 (1,883,037)
Net decrease in checks outstanding in excess of bank balance (137,246) --
Decrease in advance payments by borrowers
for taxes, insurance and ground rents (328,841) (196,585)
Repurchase of common stock (1,584,928) --
Proceeds received from the sale of common stock -- 9,673,053
Employee stock ownership plan obligation -- (809,370)
---------- ----------
Net cash provided by financing activities 1,734,464 6,784,061
Net increase (decrease) in cash and cash equivalents $ 4,953,967 $ 411,764
Cash and cash equivalents at beginning of period 6,848,123 2,377,092
---------- ----------
Cash and cash equivalents at end of period $11,802,090 $ 2,788,856
---------- ----------
SUPPLEMENTAL INFORMATION
- -------------------------
Interest paid on savings deposits and borrowed funds $ 2,023,465 $ 2,067,840
Income taxes paid $ 608,620 $ 124,879
</TABLE>
See accompanying notes to financial statements.
4
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WYMAN PARK BANCORPORATION, INC. AND SUBSIDIARIES
LUTHERVILLE, MARYLAND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1: WYMAN PARK BANCORPORATION, INC.
Wyman Park Bancorporation, Inc. (the "Company") was incorporated under the laws
of the State of Delaware in September, 1997 as the holding company of Wyman Park
Federal Savings & Loan Association ("Association") upon its conversion from
mutual to stock form ("Stock Conversion"). All references to the Company prior
to January 5, 1998, except where otherwise indicated are to the Association. The
Company's common stock began trading on the OTC Electronic Bulletin Board on
January 7, 1998 under the symbol "WPBC".
The Association is regulated by the Office of Thrift Supervision ("OTS"). The
primary business of the Association is to attract deposits from individual and
corporate customers and to originate residential and commercial mortgage loans
and consumer loans. The Association competes with other financial and mortgage
institutions in attracting and retaining deposits and originating loans. The
Association conducts operations through its main office located at 11 West
Ridgely Road, Lutherville, Maryland 21093 and one branch office located at 7963
Baltimore-Annapolis Boulevard, Glen Burnie, Maryland 21060.
NOTE 2: BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with instructions for Form 10-QSB and therefore, do not include
all disclosures necessary for a complete presentation of the statements of
condition, statements of operations and statements of cash flows in conformity
with generally accepted accounting principles. However, all adjustments which,
in the opinion of management, are necessary for the fair presentation of the
interim financial statements have been included. Such adjustments were of a
normal recurring nature. The results of operations for the nine and three months
ended March 31, 1999 are not necessarily indicative of the results that may be
expected for the entire year.
NOTE 3: CASH AND CASH EQUIVALENTS
For cash, non-interest bearing deposits, variable rate interest-bearing deposits
in other banks and federal funds sold, the carrying amount is a reasonable
estimate of fair value.
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NOTE 4: EARNINGS PER SHARE
Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding for the appropriate period. Unearned
Employee Stock Ownership Plan (ESOP) shares are not included in outstanding
shares. Diluted earnings per share is computed by dividing net income by the
weighted average shares outstanding as adjusted for the diluted effect of stock
options and unvested stock awards based on the "treasury stock" method.
Information relating to the calculations of net income per share of common stock
is summarized for the nine months and three months ended March 31, 1999 as
follows:
Nine Months Ended Three Months Ended
March 31, 1999 March 31, 1999
-------------- --------------
Net income $536,083 $151,945
Weighted average shares
Outstanding basic EPS 913,839 893,892
Diluted items
Stock options 181 551
Unvested stock awards 7,130 21,706
Adjusted weighted average shares used
for diluted EPS 921,150 916,149
Basic and diluted earnings per share are not presented for the three month and
nine month periods ending March 31, 1998 since the Association had not converted
to stock until January 5, 1998 and such information would not be meaningful.
NOTE 5: REGULATORY CAPITAL REQUIREMENTS
The following table presents the Association's capital position based on the
March 31, 1999 financial statements.
<TABLE>
<CAPTION>
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
-------------------- --------------------- ---------------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Total Capital (to
Risk Weighted
Assets) $9,944,381 26.6% $2,986,535 8.0% $3,733,169 10.0%
Tier I capital (to
Risk Weighted
Assets) 9,663,831 25.9% 1,493,267 4.0% 2,239,901 6.0%
Tier 1 Capital (to
Average Assets) 9,663,831 13.8% 2,794,598 4.0% 3,493,248 5.0%
</TABLE>
6
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NOTE 6: RECENT ACCOUNTING PRONOUNCEMENTS
FASB statement on Accounting for Derivative Instruments and Hedging Activities -
In June, 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, which standardizes
the accounting for derivative instruments including certain derivative
instruments embedded in other contracts, by requiring that an entity recognize
these items as assets or liabilities in the statement of financial position and
measure them at fair value. This Statement generally provides for matching the
timing of gain or loss recognition on the hedging instrument with the
recognition of the changes in the fair value of the hedged asset or liability
that are attributable to the hedged risk or the earnings effect of the hedged
forecasted transaction. The Statement, which is effective for all fiscal
quarters of all fiscal years beginning after June 15, 1999, will not affect the
Company's financial position or its results of operations.
7
<PAGE>
ITEM2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FORWARD-LOOKING STATEMENTS
When used in this filing and in future filings by Wyman Park Bancorporation,
Inc. (the "Company") with the Securities and Exchange Commission, in the
Company's press releases or other public or shareholder communications, or in
oral statements made with the approval of an authorized executive officer, the
words or phrases "would be," "will allow," "intends to," "will likely result,"
"are expected to," "will continue," "is anticipated," "estimate," "project" or
similar expressions are intended to identify "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are subject to risks and uncertainties, including but not limited to
changes in economic conditions in the Company's market area, changes in policies
by regulatory agencies, fluctuations in interest rates, demand for loans in the
Company's market area and competition, all or some of which could cause actual
results to differ materially from historical earnings and those presently
anticipated or projected.
The Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made, and advises
readers that various factors, including regional and national economic
conditions, substantial changes in levels of market interest rates, credit and
other risks of lending and investment activities and competitive and regulatory
factors, could affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from those
anticipated or projected.
The Company does not undertake, and specifically disclaims any obligations, to
update any forward-looking statements to reflect occurrences or unanticipated
events or circumstances after the date of such statements.
IMPACT OF THE YEAR 2000
The Company has conducted a comprehensive review of its environment and computer
systems to identify any potential risk associated with the Year 2000, and has
developed an implementation plan to address the issues.
The Company's data processing is performed by a service provider, however,
software and hardware utilized in-house is under maintenance agreements with
third party vendors, consequently the Company is very dependent on these vendors
to conduct its business. The Company has contacted each vendor to request time
tables for Year 2000 compliance and expected costs, if any, to be passed along
to the Company. To date, the Company has been part of a national testing of its
service provider, and following the testing, the service provider has stated
that their system is Year 2000 qualified. All applications considered mission
8
<PAGE>
critical have been year 2000 qualified. Other support software is being tested
as vendors provide upgrades. The Company has determined that if necessary,
functions performed by support software can be performed manually. The Company
has identified certain hardware and equipment that is not Year 2000 compliant.
This hardware and equipment has been replaced and the related capital
expenditures totaled approximately $12,000.00 and have been considered in the
1999 fiscal year budget. Expenses related to Year 2000 are not expected to have
a significant impact on the Company's financial position.
The Company has drafted its Business Resumption and Contingency Plan in the
event that the Company does not have normal business operations as of January 1,
2000. The plan outlines contingency plans for both environmental and operational
failures related to the year 2000.
COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 1999 AND JUNE 30, 1998
The Company's assets increased $2.2 million or 3.1% to $72.7 million at March
31, 1999 from $70.5 million at June 30, 1998. Cash and cash equivalents
increased $5.0 million or 73.5% to $11.8 million at March 31, 1999 from $6.8
million at June 30, 1998. Net loans receivable decreased $2.7 million or 4.4% to
$59.3 million at March 31, 1999 from $62.0 million at June 30, 1998. The $2.7
million decrease in net loans receivable was primarily the result of a decrease
of $2.2 million in residential real estate loans, a decrease of $200,000 in
participation loans, a decrease of $200,000 in consumer loans and a decrease of
$100,000 in commercial real estate loans. Savings deposits increased $3.8
million or 7.0% to $57.8 million at March 31, 1999 from $54.0 million at June
30, 1998. The Company's stockholders' equity decreased $1.0 million or 7.0% to
$13.3 million at March 31, 1999 from $14.3 million at June 30, 1998. The
decrease in stockholders' equity was due primarily to the Company's repurchase
of 156,372 shares of its common stock for approximately $1.6 million, offset by
$536,000 of net income for the nine months ended March 31, 1999.
COMPARISON OF OPERATING RESULTS FOR THE QUARTER AND NINE MONTHS ENDED MARCH 31,
1999 AND MARCH 31, 1998
NET INCOME
- -----------
The Company reported net income of $152,000 for the quarter ended March 31, 1999
compared to $214,000 for the quarter ended March 31,1998. The $62,000 decrease
in net income was primarily due to decreased net interest income and increased
noninterest expense, offset by increased other income and decreased income
taxes. The Company's net income for the nine months ended March 31, 1999 was
$536,000 compared to $374,000 for the nine months ended March 31, 1998. The
$162,000 increase in net income was primarily due to an increase in net interest
income, an increase in other income and a decrease in noninterest expenses,
partially offset by an increase in income taxes.
9
<PAGE>
INTEREST INCOME
- ---------------
Total interest income decreased by $64,000 or 4.8% to $1,263,000 for the quarter
ended March 31, 1999 from $1,327,000 for the quarter ended March 31, 1998. The
decrease in total interest income for the comparable three months periods was
due to a decrease of 72 basis points in the average yield on interest-earning
assets to 7.01% from 7.73%, partially offset by an increase of $3.5 million in
the average balance of interest-earning assets to $72.1 million from $68.6
million.
Total interest income increased by $93,000 or 2.5% to $3,869,000 for the nine
months ended March 31, 1999 from $3,776,000 for the nine months ended March 31,
1998. The increase in total interest income for the comparable nine months
periods was due to an increase of $5.8 million in the average balance of
interest-earning assets to $71.3 million from $65.5 million, partially offset by
a decrease of 45 basis points in the average yield on interest-earning assets to
7.23% from 7.68%.
The increase in the average balance of interest-earning assets is due to an
increase in federal funds sold and also an increase in loans receivable, as a
result of investing the proceeds of the Company's recent stock conversion.
INTEREST EXPENSE
- ----------------
Total interest expense increased by $12,000 or 1.8% to $662,000 for the quarter
ended March 31, 1999 from $650,000 for the quarter ended March 31, 1998. The
increase in total interest expense for the comparable three months periods was
due to an increase of $3.4 million in the average balance of interest-bearing
liabilities to $57.7 million from $54.3 million, partially offset by a decrease
of 21 basis points in the average yield on interest-bearing liabilities to 4.58%
from 4.79%.
Total interest expense decreased $52,000 or 2.5% to $2,018,000 for the nine
months ended March 31, 1999 from $2,070,000 for the nine months ended March 31,
1998. The decrease in total interest expense for the comparable nine months
periods was due to a decrease of 19 basis points in the average yield on
interest-bearing liabilities to 4.73% from 4.92%, partially offset by an
increase of $700,000 in the average balance of interest-bearing liabilities to
$56.9 million from $56.2 million.
The increase in the average balance of interest-bearing liabilities is due
primarily to an increase of $1.5 million in savings, partially offset by a
decrease of $800,000 in borrowings.
NET INTEREST INCOME
- -------------------
The Company's net interest income decreased by $76,000 or 11.2% to $601,000 for
the quarter ended March 31, 1999 from $677,000 for the quarter ended March 31,
1998.
10
<PAGE>
The decrease in net interest income was primarily due to a decrease in the ratio
of average interest-earning assets to average interest-bearing liabilities to
124.86% from 126.42% and a decrease in the net yield on interest-earning assets
by 61 basis points to 3.34% from 3.95%.
The Company's net interest income increased $146,000 or 8.6% to $1,852,000 for
the nine months ended March 31, 1999 from $1,706,000 for the nine months ended
March 31, 1998. The increase in net interest income was primarily due to an
increase in the ratio of average interest-earning assets to average
interest-bearing liabilities to 125.32% from 116.68%. The Company's net yield on
interest-earning assets decreased by 1 basis point to 3.46% from 3.47%. The
proceeds from the Company's stock conversion was the major reason for the
increased ratios of average interest-bearing assets to average interest-bearing
liabilities.
PROVISION FOR LOAN LOSSES
- -------------------------
Management monitors its allowance for loan losses and makes additions to the
allowance, through the provision for loan losses, as economic conditions and
other factors dictate. Management maintains its allowance for loan losses at a
level which it considers to be adequate to provide for loan losses based on
volume, type of collateral and prior loan loss experience. During the nine
months ended March 31, 1999, the Company recorded a provision for loan losses of
$2,550 compared to $6,400 for the nine months ended March 31,1998. The Company's
nonperforming loans as a percentage of loans receivable was .07% and .04% at
March 31, 1999 and June 30, 1998, respectively, all consisting of single-family
residential mortgage loans.
NONINTEREST INCOME
- -------------------
Total noninterest income increased by $ 7,000 or 28.0% to $32,000 for the
quarter ended March 31, 1999 from $25,000 for the quarter ended March 31, 1998.
The increase in noninterest income was due to an increase of $7,000 in gain on
sales of loans receivable to $9,000 for the quarter ended March 31, 1999 from
$2,000 for the quarter ended March 31, 1998.
Total noninterest income increased by $46,000 or 63.0% to $119,000 for the nine
months ended March 31, 1999 from $73,000 for the nine months ended March 31,
1998. The increase in noninterest income was due primarily to an increase of
$41,000 in gain on sales of loans receivable to $47,000 for the nine months
ended March 31, 1999 from $6,000 for the nine months ended March 31, 1998 and an
increase of $5,000 in loan fees and service charges to $51,000 for the nine
months ended March 31, 1999 from $46,000 for the nine months ended March 31,
1998.
11
<PAGE>
NONINTEREST EXPENSES
- --------------------
Total noninterest expenses increased by $55,000 or 15.7% to $406,000 for the
quarter ended March 31, 1999 from $351,000 for the quarter ended March 31,1998.
The increase in noninterest expenses was primarily due to an increase in
salaries and employee benefits expense of $55,000 or 29.6% to $241,000 for the
quarter ended March 31,1999 from $186,000 for the quarter ended March 31, 1998.
The increase in salaries and employee benefits expense was primarily due to
expenses related to the Company's Recognition and Retention Plan (RRP) in the
amount of $88,000, an increase in retirement plan expenses in the amount of
$9,000, partially offset by a decrease of $48,000 in expenses related to the
Company's Employee Stock Ownership Plan (ESOP) during the quarter ended March
31, 1999, compared to the quarter ended March 31, 1998.
Total noninterest expenses decreased by $51,000 or 4.4% to $1,110,000 for the
nine months ended March 31, 1999 from $1,161,000 for the nine months ended March
31, 1998. The decrease in noninterest expenses was primarily due to a decrease
in salaries and employee benefits expense of $95,000 or 13.1% to $629,000 for
the nine months ended March 31, 1999 from $724,000 for the nine months ended
March 31, 1998, partially offset by an increase in other noninterest expenses of
$43,000 or 20.7% to $251,000 for the nine months ended March 31, 1999 from
$208,000 for the nine months ended March 31, 1998. The decrease in salaries and
employee benefits expense was primarily due to the establishment of a
non-qualified supplemental executive retirement plan for the benefit of the
Company's President and Chief Executive Officer in the amount of $272,000 during
the nine months ended March 31, 1998. This decrease was partially offset by
expenses related to the Company's Employee Stock Ownership Plan (ESOP) in the
amount of $17,000, expenses related to the Company's Recognition and Retention
Plan (RRP) in the amount of $88,000, an increase in retirement plan expenses in
the amount of $24,000, and a decrease in the capitalization of loan origination
expenses of $29,000 during the nine months ended March 31, 1999, compared to the
nine months ended March 31, 1998. The increase in other noninterest expenses was
primarily due to an increase in legal expenses of $22,000 and transfer agent
expenses of $12,000 during the nine months ended March 31, 1999, compared to the
nine months ended March 31, 1998, as the result of being a public company.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Liquidity management for the Company is both an ongoing and long-term function
of the Company's asset/liability management strategy. Excess funds, when
applicable, generally are invested in overnight deposits at a correspondent bank
and at the Federal Home Loan Bank (FHLB) of Atlanta. Currently when the Company
requires funds, beyond its ability to generate deposits, additional sources of
funds are available through the FHLB of Atlanta. The Company has the ability to
pledge its FHLB of Atlanta stock or certain other assets as collateral for such
advances. Management and the Board of Directors believe that the Company's
liquidity is adequate. The Company's most liquid assets are cash and cash
12
<PAGE>
equivalents, which include short-term investments. The levels of these assets
are dependent on the Company's operating, financing and investing activities
during any given period. At March 31, 1999, the Company's cash on hand, interest
bearing deposits, Federal funds sold and short-term investments totaled $11.8
million.
The Company anticipates that it will have sufficient funds available to meet its
current loan origination commitments of approximately $1.3 million. Certificates
of deposit which are scheduled to mature in less than one year at March 31, 1999
totaled $23.0 million. Historically, a high percentage of maturing deposits have
remained with the Company.
The Company's principal sources of funds are deposits, loan repayments and
prepayments, and other funds provided by operations. While scheduled loan
repayments are relatively predictable, deposit flows and early loan prepayments
are more influenced by interest rates, general economic conditions, and
competition. The Association maintains investments in liquid assets based upon
management's assessment of (1) need for funds, (2) expected deposit flows, (3)
yields available on short-term liquid assets and (4) objectives of the
asset/liability management program.
The Company's primary sources of cash in investing activities during the nine
months ended March 31, 1999 were a net decrease of $3.0 million in loans
receivable, offset by the purchase of loan participations of $236,000.
The Company's primary sources of cash provided by financing activities during
the nine months ended March 31, 1999 consisted of a net increase of $3.8 million
in savings deposits, offset by a decrease of $329,000 in advance payments by
borrowers for taxes, insurance and ground rents, and approximately $1.6 million
for the repurchase of 140,181 shares of the Company's common stock, of which
34,394 shares were used to fund the Company's Recognition and Retention Plan
(RRP).
13
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
On January 20, 1999, a Special Meeting of the Shareholders of the
Corporation was held. The following matters were submitted to the
Shareholders, for which the following votes were cast:
Ratification of the adoption of the Company's 1999 Stock Option and
Incentive Plan.
For: 577,027 Against: 68,905 Abstain: 7,508 Broker Non-Votes: 7,992
Ratification of the adoption of the Company's Recognition and Retention
Plan
For: 473,219 Against: 180,705 Abstain: 7,508 Broker Non-Votes: 0
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibit is filed as part of this Form 10QSB:
Exhibit 27 - Financial Data Schedule
14
<PAGE>
Signatures
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
WYMAN PARK BANCORPORATION, INC.
Registrant
Date: May 7, 1999 /s/ Ernest A. Moretti
------------------------------------
Ernest A. Moretti
President and Chief Executive Officer
(Principal Executive Officer)
Date: May 7, 1999 /s/ Ronald W. Robinson
-------------------------------------
Ronald W. Robinson
Treasurer
(Principal Financial and Accounting Officer)
15
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM WYMAN PARK
BANCORPORATION AND SUBSIDIARIES QUARTERLY REPORT ON FORM 10-QSB FOR THE PERIOD
ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 314,657
<INT-BEARING-DEPOSITS> 4,182,103
<FED-FUNDS-SOLD> 7,305,330
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 229,894
<INVESTMENTS-MARKET> 231,308
<LOANS> 59,308,058
<ALLOWANCE> (280,550)
<TOTAL-ASSETS> 72,659,681
<DEPOSITS> 57,803,627
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,562,948
<LONG-TERM> 0
0
0
<COMMON> 10,117
<OTHER-SE> 13,282,989
<TOTAL-LIABILITIES-AND-EQUITY> 72,659,681
<INTEREST-LOAN> 1,112,517
<INTEREST-INVEST> 4,115
<INTEREST-OTHER> 146,239
<INTEREST-TOTAL> 1,262,871
<INTEREST-DEPOSIT> 660,970
<INTEREST-EXPENSE> 662,063
<INTEREST-INCOME-NET> 600,808
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 406,456
<INCOME-PRETAX> 226,401
<INCOME-PRE-EXTRAORDINARY> 226,401
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 151,945
<EPS-PRIMARY> 0.170
<EPS-DILUTED> 0.166
<YIELD-ACTUAL> 3.34
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> (280,550)
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> (280,550)
<ALLOWANCE-DOMESTIC> (280,550)
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
