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 September 30, 2000
--------- 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 November 10, 2000, the issuer had 827,090 shares of Common Stock issued
and outstanding.
Transitional Small Business Disclosure Format (check one):
Yes___ No X
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<PAGE>
CONTENTS
--------
PART I. FINANCIAL INFORMATION PAGE
--------------------- ----
Item I. Financial Statements
Consolidated Statements of Financial Condition at
September 30, 2000 and June 30, 2000............................ 2
Consolidated Statements of Operations for the Three Month
Periods ended September 30, 2000 and 1999...................... 3
Consolidated Statements of Cash Flows for the Three Month
Periods Ended September 30, 2000 and 1999...................... 4
Notes to Consolidated Financial Statements..................... 5-6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.......................................... 7-11
PART II. OTHER INFORMATION
-----------------
Item 1. Legal Proceedings............................................... 12
Item 2. Changes in Securities and Use of Proceeds....................... 12
Item 3. Defaults Upon Senior Securities................................. 12
Item 4. Submission of Matters to a Vote of Security Holders............. 12
Item 5. Other Information............................................... 12
Item 6. Exhibits and Reports on Form 8-K................................ 12
SIGNATURES............................................................... 13
1
<PAGE>
Wyman Park Bancorporation, Inc. and Subsidiaries
Lutherville, Maryland
Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
September 30 June 30,
2000 2000
---- ----
(Unaudited)
Assets
------
<S> <C> <C>
Cash and noninterest bearing deposits $ 189,930 $ 310,442
Interest bearing deposits in other banks 923,828 474,358
Federal funds sold 1,888,859 1,301,106
------------ ------------
Total cash and cash equivalents 3,002,617 2,085,906
Loans receivable, net 64,992,025 65,223,905
Mortgage-backed securities held to maturity
at amortized cost, fair value of $169,100 (9/00)
and $176,350 (6/00) 167,637 174,086
Federal Home Loan Bank of Atlanta stock, at cost 508,500 508,500
Accrued interest receivable 346,949 333,114
Ground rents owned, at cost 122,600 122,600
Property and equipment, net 97,340 107,304
Federal and state income taxes receivable 5,986 16,985
Deferred tax asset 203,364 203,364
Prepaid expenses and other assets 91,984 63,850
------------ ------------
Total Assets $ 69,539,002 $ 68,839,614
------------ ------------
Liabilities & Stockholders'Equity
---------------------------------
Liabilities:
Demand deposits $ 5,511,981 $ 5,643,177
Money market and NOW accounts 8,613,074 9,093,949
Time deposits 41,705,278 40,609,938
------------ ------------
Total deposits 55,830,333 55,347,064
Checks outstanding in excess of bank balance 84,549 --
Borrowings 4,000,000 3,000,000
Advance payments by borrowers for taxes,
insurance and ground rents 392,654 1,315,538
Accrued interest payable on savings deposits 17,516 17,267
Accrued interest on borrowings 22,107 14,786
Federal and state income taxes payable 41,748 8,748
Accrued expenses and other liabilities 582,684 528,975
------------ ------------
Total liabilities 60,971,591 60,232,378
Stockholders' Equity
--------------------
Common stock, par value $.0l per share; authorized
2,000,000 shares; issued 1,011,713 shares 10,117 10,117
Additional paid-in capital 4,053,677 4,053,677
Contra equity - Employee Stock Ownership Plan (ESOP) (539,770) (539,770)
Retained earnings, substantially restricted 6,426,384 6,327,076
Treasury Stock; 133,987 shares, at cost at
September 30,2000 and 112,987 at cost at
June 30, 2000 (1,382,997) (1,243,864)
------------ ------------
Total stockholders' equity 8,567,411 8,607,236
------------ ------------
Total liabilities and stockholders' equity $ 69,539,002 $ 68,839,614
------------ ------------
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
Wyman Park Bancorporation, Inc. and Subsidiaries
Lutherville, Maryland
Consolidated Statements of Operation
(Unaudited)
For the Three Months
Ended September 30,
2000 1999
---- ----
Interest and fees on loans receivable $1,218,279 $1,063,714
Interest on mortgage-backed securities 3,305 3,420
Interest on other investments 51,874 103,244
---------- ----------
Total interest income $1,273,458 $1,170,378
---------- ----------
Interest on savings deposits $ 685,751 $ 653,808
Interest on borrowed money 59,412 3,084
Interest on escrow deposits 676 835
---------- ----------
Total interest expense $ 745,839 $ 657,727
Net interest income before provision
for loan losses 527,619 512,651
Provision for loan losses -- --
---------- ----------
Net interest income $ 527,619 $ 512,651
---------- ----------
Other Income
------------
Loan fees and service charges $ 22,107 $ 18,724
Other 2,102 4,276
---------- ----------
Total other income $ 24,209 $ 23,000
---------- ----------
Noninterest Expenses
--------------------
Salaries and employee benefits $ 232,674 $ 229,598
Occupancy costs 26,483 24,310
Professional services 15,327 22,070
Federal deposit insurance premiums 2,847 8,434
Furniture and fixtures depreciation
and maintenance 11,719 13,135
Data processing 20,671 20,301
Advertising 22,051 9,783
Franchise and other taxes 11,466 11,271
Other 47,282 46,533
---------- ----------
Total noninterest expenses $ 390,520 $ 385,435
Income before tax provision 161,308 150,216
Provision for income taxes 62,000 60,021
---------- ----------
Net Income $ 99,308 $ 90,195
---------- ----------
Net income per share, basic $0.13 $0.11
Net income per share, diluted $0.13 $0.11
See accompanying notes to financial statements.
3
<PAGE>
Wyman Park Bancorporation, Inc.
and Subsidiaries
Lutherville, Maryland
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30,
2000 1999
---- ----
Cash Flows from operating activities
------------------------------------
<S> <C> <C>
Net income $ 99,308 $ 90,195
Adjustments to reconcile net income to net
Cash provided by operating activities:
Depreciation and amortization 10,343 12,759
Amortization of loan fees (21,450) (16,638)
Increase in accrued interest receivable (13,835) (37)
Increase in prepaid expenses and other assets (28,134) (805)
Increase in accrued expenses and other liabilities 53,709 27,856
Decrease in federal and state income taxes receivable 10,999 13,688
Increase in federal and state income taxes payable 33,000 45,765
Increase in accrued interest payable on
savings deposits 249 795
Increase (decrease) in accrued interest payable on borrowings 7,321 (5,038)
------------ ------------
Net cash provided by operating activities 151,510 168,540
Cash flows from investing activities
------------------------------------
Net (increase) decrease in loans receivable 394,705 (1,032,919)
Purchase of loan participations (141,375) (500,000)
Mortgage-backed securities principal repayments 6,449 9,115
Purchases of property and equipment (379) (2,145)
------------ ------------
Net cash provided by (used in) investing activities 259,400 (1,525,949)
Cash flows from financing activities
------------------------------------
Net increase (decrease) in savings deposits 483,269 (1,640,921)
Net increase in checks outstanding in excess of
bank balance 84,549 --
Increase (decrease) in borrowings 1,000,000 (2,650,000)
Decrease in advance payments by borrowers
for taxes, insurance and ground rents (922,884) (946,889)
Repurchase of common stock (139,133) --
------------ ------------
Net cash provided by (used in) financing activities 505,801 (5,237,810)
Net increase (decrease) in cash and cash equivalents $ 916,711 $ (6,595,219)
Cash and cash equivalents at beginning of period 2,085,906 12,100,730
------------ ------------
Cash and cash equivalents at end of period $ 3,002,617 $ 5,505,511
------------ ------------
Supplemental information
------------------------
Interest paid on savings deposits and borrowed funds $ 745,839 $ 657,728
Income taxes paid $ 18,000 $ 569
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
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") is the holding company of Wyman
Park Federal Savings & Loan Association ("Association"), which converted from
mutual to stock form ("Stock Conversion") and became the wholly owned subsidiary
of the Company on January 5, 1998. 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 three months ended
September 30, 2000 are not necessarily indicative of the results that may be
expected for the entire year. Certain prior year amounts have been reclassified
to conform with the current year presentation.
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.
5
<PAGE>
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 dilutive 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 three months ended September 30, 2000 and 1999 as follows:
Three Months Ended Three Months Ended
September 30, 2000 September 30, 1999
------------------ -------------------
Net income $ 99,308 $ 90,195
Weighted average shares
Outstanding basic EPS 757,936 815,949
Dilutive items
Stock options 27,942 33,005
Unvested stock awards 935 -
Adjusted weighted average shares
Outstanding used for diluted EPS 786,813 848,954
NOTE 5: REGULATORY CAPITAL REQUIREMENTS
Under OTS regulations, the Association must maintain capital at least equal to
specified percentage of its assets. The Association's assets and capital for
these purposes are subject to OTS regulatory definition, and the percentage
levels vary depending on the capital levels being measured. The following table
presents the Association's capital position based on the September 30, 2000
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) $ 7,848,899 19.5% $3,214,934 8.0% $4,018,668 10.0%
Tier I capital (to
Risk Weighted
Assets) 7,564,899 18.8% 1,607,467 4.0% 2,411,201 6.0%
Tier 1 Capital (to
Average Assets) 7,564,899 10.9% 2,781,604 4.0% 3,477,005 5.0%
</TABLE>
6
<PAGE>
ITEM 2: 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 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.
7
<PAGE>
COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2000 AND JUNE 30, 2000
The Company's assets increased $700,000 or 1.0% to $69.5 million at September
30, 2000 from $68.8 million at June 30, 2000. Cash and cash equivalents
increased $900,000 or 42.9% to $3.0 million at September 30, 2000 from $2.1
million at June 30, 2000, primarily as a result of an increase in borrowings, an
increase in savings deposits, and a decrease in loans receivable offset by a
decrease in advance payments by borrowers for taxes, insurance and ground rents.
Advances from the Federal Home Loan Bank of Atlanta increased $1.0 million or
33.3% to $4.0 million at September 30, 2000 from $3.0 million at June 30, 2000,
as a result of the Company's paying real estate taxes from borrowers' escrow
accounts. Savings deposits increased $500,000 or 0.9% to $55.8 million at
September 30, 2000 from $55.3 million at June 30, 2000 as the Company attracted
more funds in certificates of deposit. Advance payments by borrowers for taxes,
insurance and ground rents decreased $900,000 or 69.2% to $400,000 at September
30, 2000 from $1.3 million at June 30, 2000 as the result of the payment of real
estate taxes. Net loans receivable decreased $200,000 or 0.3% to $65.0 million
at September 30, 2000 from $65.2 million at June 30, 2000 as a result of normal
amortization. The Company's stockholders' equity remained virtually unchanged at
$8.6 million at September 30, 2000 due to an increase in Treasury stock of
$100,000 or 7.7% to $1.4 million at September 30, 2000 from $1.3 million at June
30, 2000, offset by net income of $100,000 for the three months ended September
30, 2,000.
COMPARISON OF OPERATING RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2000 AND
SEPTEMBER 30, 1999
Net Income
----------
The Company reported net income of $99,000 for the quarter ended September 30,
2000 compared to $90,000 for the quarter ended September 30, 1999. The $9,000
increase in net income was primarily due to an increase in net interest income
of $15,000; offset by an increase in noninterest expenses of $6,000.
Interest Income
---------------
Total interest income increased by $103,000 or 8.8% to $1,273,000 for the
quarter ended September 30, 2000 from $1,170,000 for the quarter ended September
30, 1999. The increase in total interest income for the comparable three months
periods was due primarily to an increase of $3.1 million in the average balance
of interest-earning assets to $68.1 million from $65.0 million, and an increase
of 28 basis points in the average yield on interest-earning assets to 7.48% from
7.20%.
The increase in the average balance of interest-earning assets was due primarily
to an increase in average loans receivable as a result of increased loan volume.
8
<PAGE>
Interest Expense
----------------
Total interest expense increased by $88,000 or 13.4% to $746,000 for the quarter
ended September 30, 2000 from $658,000 for the quarter ended September 30, 1999.
The increase in total interest expense for the comparable three months periods
was due primarily to an increase of $2.1 million in the average balance of
interest-bearing liabilities to $58.9 million from $56.8 million and an increase
of 45 basis points in the average yield on interest-bearing liabilities to 5.06%
from 4.61%.
The increase in the average balance of interest-bearing liabilities was due to
an increase in average borrowings of $3.5 million for the three months
comparable periods, partially offset by a decrease of $1.4 million in the
average balance of savings deposits for the three months comparable periods.
Net Interest Income
-------------------
The Company's net interest income increased by $15,000 or 2.9% to $528,000 for
the quarter ended September 30, 2000 from $513,000 for the quarter ended
September 30, 1999. 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 115.6% from 114.5%, as the Company increased its
average loans receivable. The Company's net interest margin decreased 7 basis
points to 3.10% from 3.17%.
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. Among the other factors considered by management are loan
volume, type of collateral and prior loan loss experience. During the three
months ended September 30, 2000 and September 30, 1999, the Company recorded no
provision for loan losses. The Company's nonperforming loans as a percentage of
loans receivable was 0.20% and 0.42% at September 30, 2000, and June 30, 2000,
respectively, all consisting of single-family residential mortgage loans.
Noninterest Income
------------------
Total noninterest income increased by $1,000 or 4.3% to $24,000 for the quarter
ended September 30, 2000 from $23,000 for the quarter ended September 30, 1999.
The increase in noninterest income was due primarily to an increase of $1,000 in
service fees on checking accounts to $14,000 for the quarter ended September 30,
2000 from $13,000 for the quarter ended September 30, 1999.
9
<PAGE>
Noninterest Expenses
--------------------
Total noninterest expenses increased by $6,000 or 1.6% to $391,000 for the
quarter ended September 30, 2000 from $385,000 for the quarter ended September
30, 1999. The increase in noninterest expenses was primarily due to an increase
in advertising expense of $12,000 or 120.0% to $22,000 for the quarter ended
September 30, 2000 from $10,000 for the quarter ended September 30, 1999, offset
by a decrease in federal deposit insurance premiums of $5,000 or 62.5% to $3,000
for the quarter ended September 30, 2000 from $8,000 for the quarter ended
September 30, 1999. The increase in advertising expense was due to a more
aggressive advertising campaign and the decrease in federal deposit insurance
premiums was a scheduled reduction due to the recapitalization of the insurance
fund.
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, as advances or borrowings, through the FHLB of Atlanta. The
Company has the ability to pledge its FHLB of Atlanta stock or certain other
assets as collateral for up to $14 million in advances. The Company's most
liquid assets are cash and cash 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
September 30, 2000, the Company's cash on hand, interest bearing deposits,
Federal funds sold and short-term investments totaled $3.0 million. Management
and the Board of Directors believe that the Company's liquidity is adequate,
including its ability to secure advances from the FHLB of Atlanta, to satisfy
its loan commitments of approximately $1.0 million as of September 30, 2000.
The Company's principal sources of funds are deposits, loan repayments and
prepayments, and other funds provided by operations. Certificates of deposit
which are scheduled to mature in less than one year at September 30, 2000
totaled $17.9 million. Historically, a high percentage of maturing deposits have
remained with the Company. 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 source of cash in investing activities during the three
months ended September 30, 2000 was a net decrease of $400,000 in loans
receivable.
10
<PAGE>
The Company's primary sources of cash in financing activities during the three
months ended September 30, 2000 consisted of a net increase of $1 million in
borrowings and a net increase of $500,000 in savings deposits, offset by a net
decrease of $900,000 in advance payments by borrowers for taxes, insurance and
ground rents.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None.
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) The following exhibit is filed as part of this Form 10QSB:
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
None
12
<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: November 10, 2000 /s/ Ernest A. Moretti
------------------------------------
Ernest A. Moretti
President and Chief Executive Officer
(Principal Executive Officer)
Date: November 10, 2000 /s/ Ronald W. Robinson
-------------------------------------
Ronald W. Robinson
Treasurer
(Principal Financial and Accounting Officer)
13
