UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended June 30, 2000
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________________ to ___________________
Commission file number 0-23345
WYMAN PARK BANCORPORATION, INC.
--------------------------------------------------------------------------------
(Name of small business issuer in its charter)
Delaware 52-2068893
--------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
11 West Ridgely Road, Lutherville, Maryland 21093
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 252-6450
--------------
Securities Registered Pursuant to Section 12(b) of the Act:
None
----
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, par value $0.01 per share
---------------------------------------
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 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 _.
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained herein, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
State the issuer's revenues for its most recent fiscal year: $4,890,000.
The aggregate market value of the voting stock held by non-affiliates of
the registrant, computed by reference to the average of the bid and ask price of
such stock as of June 30, 2000, was approximately $4.0 million. (The exclusion
from such amount of the market value of the shares owned by any person shall not
be deemed an admission by the registrant that such person is an affiliate of the
registrant.)
As of September 18, 2000, there were 877,726 shares issued and outstanding
of the registrant's Common Stock.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of Annual Report to Stockholders for the fiscal year ended June
30, 2000 (Part II)
2. Portions of Proxy Statement for 2000 Annual Meeting of Stockholders (Part
III)
<PAGE>
PART I
Item 1. Description of Business
Forward-Looking Statements
When used in this filing and in future filings by the Wyman Park
Bancorporation (the "Company") with the Securities and Exchange Commission, in
the Company's press releases or other public or shareholder communications, or
in oral statements, 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 obligation,
to update any forward-looking statements to reflect occurrences or unanticipated
events or circumstances after the date of such statements.
General
The Company. Wyman Park Bancorporation, Inc. (the "Company") is a savings
and loan holding company which became the sole stockholder of Wyman Park Federal
Savings & Loan Association (the "Association" or "Wyman Park") in connection
with the Association's conversion from the mutual to the stock form on January
5, 1998. All references to the Company prior to January 5, 1998, except where
otherwise indicated, are to the Association.
At June 30, 2000, the Company had assets of $68.8 million, deposits of
$55.3 million and stockholders' equity of $8.6 million.
The principal executive offices of the Company are located at 11 West
Ridgely Road, Lutherville, Maryland 21093, and its telephone number is (410)
252-6450.
1
<PAGE>
The activities of the Company itself have been limited to investment in the
stock of the Association, interest-bearing deposits at financial institutions,
short-term borrowings and a note receivable from the Association's Employee
Stock Ownership Plan. Unless otherwise indicated, all activities discussed below
are of the Association.
The Association. The Association is a federally-chartered savings
association with its principal executive offices in Lutherville, Maryland. Its
deposits are insured up to applicable limits by the Federal Deposit Insurance
Corporation (the "FDIC"). The Association is primarily engaged in the business
of attracting savings deposits from the general public and investing such funds
in permanent mortgage loans secured by one- to four-family residential real
estate located primarily in central Baltimore county and northern Baltimore
City, Maryland. Through its branch office located in Glen Burnie, a suburb to
the south of Baltimore, the Association also services Anne Arundel County,
Maryland. In addition to permanent mortgage loans, the Association also
originates, to a lesser extent, loans for the construction of one- to
four-family real estate, commercial loans secured by multi-family real estate
(over four units) and nonresidential real estate, and consumer loans, including
home equity lines of credit, home improvement loans, and loans secured by
savings deposits. The Association invests in U.S. government obligations,
interest-bearing deposits in other financial institutions, mortgage-backed
securities, and other investments permitted by applicable law.
Lending Activities
Market Area. The Company's office is located at 11 West Ridgely Road,
Lutherville, Maryland. Through this office and a branch location, the Company
primarily serves central Baltimore County and northern Baltimore City, Maryland,
as well as Glen Burnie, a suburb south of Baltimore and Anne Arundel County,
Maryland.
General. The principal lending activity of the Company is originating first
mortgage loans secured by owner-occupied one- to four-family residential
properties located in its primary market areas. In addition, in order to
increase the yield and the interest rate sensitivity of its portfolio and in
order to provide more comprehensive financial services to families and community
businesses in the Company's primary market area, the Company also originates
commercial real estate, multi-family, consumer (secured and unsecured), land,
and second mortgage loans. The Company may in the future adjust or discontinue
any product offerings to respond to competitive or economic factors.
During fiscal year 2000, the Company implemented its commercial non-real
estate lending operations to provide business loans to small businesses in the
local community. The Company believes that this additional lending activity will
assist the Company in increasing the yield on its total loan portfolio.
2
<PAGE>
Loan Portfolio Composition. The following information concerning the
composition of the Company's loan portfolios in dollar amounts as of the dates
indicated.
June 30,
-------------------------------
2000 1999
-------------------------------
Amount Amount
------ ------
(Dollars in Thousands)
Real Estate Loans:
-----------------
One- to four-family........................... $53,384 $47,324
Multi-family ................................. 314 508
Commercial ................................... 7,709 6,395
Construction or development .................. 250 621
-------- -------
Total real estate loans................... 61,657 54,848
Commercial Non-Real Estate Loans .............. 968 ---
Other Loans:
-----------
Consumer Loans:
Deposit account loans....................... 170 151
Home equity................................. 3,010 2,850
Home improvement............................ 11 13
Overdraft lines of credit 12 8
-------- -------
Total consumer loans..................... 3,203 3,022
-------- -------
Total loans, gross....................... 65,828 57,870
-------- -------
Less:
----
Loans in process.............................. (112) (528)
Deferred fees and discounts................... (207) (219)
Allowance for losses.......................... (285) (283)
-------- -------
Total loans receivable, net.............. $65,224 $56,840
======== =======
Loan Maturities. The following table reflects at June 30, 2000 the dollar
amount of loans maturing or subject to rate adjustment based on their
contractual terms to maturity. Loans with fixed rates are reflected based upon
the contractual repayment schedule while loans with variable interest rates are
reflected based upon the contractual repayment schedule up to the contractual
rate adjustment date. Demand loans, loans having no stated schedule of
repayments and loans having no stated maturity are reported as due within one
year or less.
<TABLE>
<CAPTION>
Due in One Due After One Year Due After
Year or Less through Five Years Five Years Total
------------ ------------------ ---------- -----
(In thousands)
<S> <C> <C> <C> <C>
One-to-four family..................... $ 9,377 $13,720 $30,287 $53,384
Multi-family and Commercial............ 416 1,819 5,788 8,023
Commercial Non-Real Estate 467 261 240 968
Consumer loans......................... 3,106 97 3,203
Construction or development............ 250 250
-------- ------- ------- -------
Total $13,616 $15,897 $36,315 $65,828
======= ======= ======= =======
</TABLE>
3
<PAGE>
Under federal law, the aggregate amount of loans that the Company is
permitted to make to any one borrower is generally limited to 15% of unimpaired
capital and surplus (25% if the security for such loan has a "readily
ascertainable" value or 30% for certain residential development loans). At June
30, 2000, based on the above, the Company's regulatory loan-to-one borrower
limit was approximately $1.1 million. On the same date, the Company had no
borrowers with outstanding balances in excess of this amount. As of June 30,
2000, the largest dollar amount of indebtedness to one borrower or group of
related borrowers was a $996,000 loan secured by condominiums. The next two
largest loans had outstanding balances of $969,000 and $641,000, respectively,
and were secured by commercial office buildings and a strip shopping center.
Such loans are performing in accordance with their terms.
One- to Four-Family Residential Real Estate Lending
The principal activity of the Company's lending program involves the
origination of loans secured by first mortgages on owner-occupied one- to
four-family residences. At June 30, 2000, $53.4 million, or 81.1% of the
Company's gross loan portfolio consisted of such loans. Substantially all of the
residential loans originated by the Company are secured by properties located in
the Company's market area.
Although the Company has generally sold its fixed-rate loan production
since 1989, historically, the Company originated for retention in its own
portfolio 30-year fixed-rate loans secured by one- to four-family residential
real estate. The Company also originates adjustable rate mortgage loans
("ARMs"). The Company has from time to time sold some of its ARM production,
which conforms to standards promulgated by Freddie Mac (so-called "conforming
loans") and also originates fixed-rate residential loans in amounts and at rates
and terms which are monitored for compliance with the Company's asset/liability
management policy. Currently, the Company originates both conforming and jumbo
construction and jumbo fixed-rate permanent loans with maturities of up to 30
years. Jumbo loans are loans with initial balances in excess of the maximum
amount permitted for conforming loans.
The Company's ARM and balloon loans are offered at rates, terms and points
determined in accordance with market and competitive factors. The Company's
current one- to four-family residential ARMs are fully amortizing loans with
contractual maturities of up to 30 years. Balloon loans also have terms of up to
30 years. Though from time to time "teaser" rates are offered, applicants are
qualified pursuant to Freddie Mac guidelines, which permits qualifications at
less than the fully indexed rate, and no ARMs allow for negative amortization.
The interest rates on the ARMs originated by the Company are generally subject
to adjustment at one-, three- and five-year intervals based on a margin over the
Treasury Securities Constant Maturity Index. Decreases or increases in the
interest rate of the Company's ARMs are generally limited to 6% above the
initial interest rate over the life of the loan, and up to a 2% per adjustment
period per year or per adjustment period. The Company's ARMs may be convertible
into fixed-rate loans, depending on the program selected, and do not contain
prepayment penalties. Loans are not assumable. At June 30, 2000, the total
balance of one- to four-family ARMs was $14.0 million, or 21.3% of the Company's
gross loan portfolio.
4
<PAGE>
As a service to its older customers, the Company originates and sells
reverse mortgages, allowing the homeowner to utilize equity values that have
built up in the underlying property.
The Company originates residential mortgage loans with loan-to-value ratios
generally up to 95%. On mortgage loans exceeding an 80% loan-to-value ratio at
the time of origination, the Company will generally require private mortgage
insurance in an amount intended to reduce the Company's exposure to less than
80% of the appraised value of the underlying property.
Construction and Development Lending
The Company makes construction loans to individuals for the construction of
their primary or secondary residences. Loans to individuals for the construction
of their residences typically run for up to nine months. The borrower pays
interest only during the construction period. Residential construction loans are
generally underwritten pursuant to the same guidelines used for originating
permanent residential loans. At June 30, 2000 construction loans totaled
$250,000, or 0.4% of the Company's gross loan portfolio.
The Company has participated in loans to builders and developers to finance
the construction of residential property. Such loans generally have adjustable
interest rates based upon prime or treasury indexes with variable terms. The
proceeds of the loan are advanced during construction based upon the percentage
of completion as determined by an inspection by the lead lender. The loan amount
normally does not exceed 75% of the projected completed value. Whether the
Company is willing to provide permanent takeout financing to the purchaser of
the home is determined independently of the construction loan by separate
underwriting. In the event that upon completion the house is not sold, the
builder is required to make principal and interest payments until the house is
sold.
Building lot loans, which include loans to acquire vacant or raw land, are
made to individuals. All of such loans are secured by land zoned for residential
developments and located within the Company's market area. Before extending
credit, the Company will require percolation tests and related permits to be
secured.
Construction and development lending, through participation or direct
lending, generally affords the Company an opportunity to receive interest at
rates higher than those obtainable from residential lending and to receive
higher origination and other loan fees. In addition, such loans are generally
made for relatively short terms. Nevertheless, construction lending to persons
other than owner-occupants is generally considered to involve a higher level of
credit risk than one- to four-family permanent residential lending due to the
concentration of principal in a limited number of loans and borrowers and the
effects of general economic conditions on construction projects, real estate
developers and managers. In addition, the nature of these loans is such that
they are more difficult to evaluate and monitor. The Company's risk of loss on a
construction or development loan is dependent largely upon the accuracy of the
initial estimate of the property's value upon completion of the project and the
estimated cost (including interest) of the project. If the estimate of value
proves to be inaccurate, the Company may be confronted, at or prior to the
5
<PAGE>
maturity of the loan, with a project with a value which is insufficient to
assure full repayment and/or the possibility of having to make substantial
investments to complete and sell the project. Because defaults in repayment may
not occur during the construction period, it may be difficult to identify
problem loans at an early stage. When loan payments become due, the cash flow
from the property may not be adequate to service the debt. In such cases, the
Company may be required to modify the terms of the loan.
Commercial Real Estate Lending
The Company's commercial real estate loan portfolio consists of loans on a
variety of non-residential properties including retail facilities, warehouses,
small office buildings, small industrial parks and shopping centers. At June 30,
2000, the Company had $7.7 million in commercial real estate loans, comprising
11.7% of the Company's gross loan portfolio.
The Company has originated both balloon, adjustable-rate and fixed-rate
commercial real estate loans, although most current originations have balloon or
adjustable rates. Commercial loans generally adjust based on a constant maturity
index plus a margin. Adjustable rate loans generally have a balloon feature
after one or two adjustment periods to allow the Company to re-evaluate the
terms of the loan. Balloon loans mature at the end of the initial balloon term
and may be modified, extended or refinanced by the Company. Commercial loans are
generally underwritten in amounts of up to 75% of the appraised value of the
underlying property.
Substantially all of the commercial real estate loans originated by the
Company are secured by properties located within the Company's market area.
Commercial real estate loans generally present a higher level of credit
risk than loans secured by one- to four-family residences. This greater risk is
due to several factors, including the concentration of principal in a limited
number of loans and borrowers, the effects of general economic conditions on
income producing properties and the increased difficulty of evaluating and
monitoring these types of loans. Furthermore, the repayment of loans secured by
commercial real estate is typically dependent upon the successful operation of
the related real estate project. If the cash flow from the project is reduced
(for example, if leases are not obtained or renewed), the borrower's ability to
repay the loan may be impaired.
Multi-Family Lending
The Company has historically made few permanent multi-family loans in its
primary market area. As with commercial real estate loans, multi-family loans
present a higher level of credit risk than do loans secured by one- to
four-family residences. At June 30, 2000, loans secured by multi-family
properties aggregated $314,000, or 0.5% of the Company's gross loan portfolio.
The Company's multi-family loan portfolio includes loans secured by five or
more unit residential buildings located primarily in the Company's market area.
6
<PAGE>
Consumer Lending
The Company offers a variety of consumer loans, including loans secured by
savings deposits, home equity lines of credit and overdraft lines of credit as
well as unsecured home improvement loans. The Company currently originates
substantially all of its consumer loans in its market area. At June 30, 2000,
the Company's consumer loans totaled $3.2 million or 4.9% of the Company's gross
loan portfolio.
The largest component of the Company's consumer lending program is its home
equity line. At June 30, 2000, home equity loans totaled $3.0 million or 4.6% of
gross loans receivable. The Company's home equity lines of credit are originated
in amounts which, together with the amount of the first mortgage, generally do
not exceed 90% of the appraised value of the property securing the loan. At June
30, 2000, the Company had $6.1 million of funds committed, but undrawn, under
such lines.
Consumer loans may entail greater risk than residential mortgage loans,
particularly in the case of consumer loans which are unsecured or secured by
rapidly depreciable assets. In addition, consumer loan collections are dependent
on the borrower's continuing financial stability, and thus are more likely to be
affected by adverse personal circumstances. Furthermore, the application of
various federal and state laws, including federal and state bankruptcy and
insolvency laws, may limit the amount which can be recovered on such loans.
Delinquencies and Non-Performing Assets
Non-Performing Assets. The table below sets forth the amounts and
categories of non-performing assets in the Company's loan portfolio. Loans are
placed on non-accrual status when the collection of principal and/or interest
becomes doubtful. Foreclosed assets include assets acquired in settlement of
loans.
June 30,
--------------------------------
2000 1999
--------------- -------------
(Dollars in Thousands
Non-accruing loans ........................ $ --- $ ---
----- -----
Total non-performing assets................ $ --- $ ---
===== =====
Total as a percentage of total assets...... ---% ---%
===== =====
Classification of Assets. Federal regulations require that each savings
institution classify its own assets on a regular basis. In addition, in
connection with examinations of savings institutions, OTS and FDIC examiners
have authority to identify problem assets and, if appropriate, require them to
be classified. There are three classifications for problem assets: Substandard,
Doubtful and Loss. Substandard assets have one or more defined weaknesses and
are characterized by the distinct possibility that the Company will sustain some
loss if the deficiencies are not corrected. Doubtful assets have the weaknesses
of Substandard assets, with the additional characteristics that the weaknesses
make collection or liquidation in full on the
7
<PAGE>
basis of currently existing facts, conditions and values questionable, and there
is a high possibility of loss. An asset classified Loss is considered
uncollectible and of such little value that continuance as an asset on the
balance sheet of the institution, without establishment of a specific valuation
allowance or charge-off, is not warranted. Assets classified as Substandard or
Doubtful require the institution to establish prudent general allowances for
loan losses. If an asset or portion thereof is classified as a Loss, the
institution may charge off such amount against the loan loss allowance. If an
institution does not agree with an examiner's classification of an asset, it may
appeal this determination to the District Director of the OTS.
On the basis of management's review of its assets, at June 30, 2000, the
Company had no loans classified substandard.
Other Assets of Concern. In addition to non-performing loans and
substandard loans discussed above, as of June 30, 2000, the Company had six
loans totaling $278,000, which, because of known information about the possible
credit problems of the borrowers or the cash flows of the security property,
would cause management to have some doubts as to the ability of the borrowers to
comply with present loan repayment terms and may result in the future inclusion
of such assets in non-performing asset categories.
Allowance for Loan Losses. The allowance for loan losses is established
through a provision for loan losses charged to earnings based on management's
evaluation of the risk inherent in its entire loan portfolio and changes in the
nature and volume of its loan activity. Such evaluation, which includes a review
of all loans of which full collectibility may not be reasonably assured,
considers the estimated net realizable value of the underlying collateral,
economic conditions, historical loan loss experience and other factors that
warrant recognition in providing for an adequate allowance for loan losses. In
determining the general reserves under these policies, historical charge-offs
and recoveries, changes in the mix and levels of the various types of loans, net
realizable values, the current loan portfolio and current economic conditions
are considered. Management also considers the Company's non-performing assets in
establishing its allowance for loan losses.
As of June 30, 2000, the Company's allowance for loan losses as a percent
of gross loans receivable amounted to 0.4%. The Company did not have any
non-performing loans. While management believes that it uses the best
information available to determine the allowance for loan losses, unforeseen
market conditions could result in adjustments to the allowance for loan losses,
and net earnings could be significantly affected, if circumstances differ
substantially from the assumptions used in making the final determination.
8
<PAGE>
The following table sets forth an analysis of the Company's allowance for
loan losses.
<TABLE>
<CAPTION>
June 30,
----------------------------
2000 1999
------------ -----------
(Dollars in Thousands
<S> <C> <C>
Balance at beginning of period....................... $ 283 $ 278
Charge-offs ......................................... --- ---
Additions charged to operations...................... 2 5
-------- -------
Balance at end of period............................. $ 285 $ 283
======== =======
Ratio of net charge-offs during the period to
Average loans outstanding during the period.......... --- ---
======== =======
Ratio of net charge-offs during the period to
Average non-performing assets........................ ---% ---%
======== =======
</TABLE>
The distribution of the Company's allowance for losses on loans at the
dates indicated is summarized as follows:
<TABLE>
<CAPTION>
June 30,
---------------------------------------------------------------------
2000 1999
---------------------------------- ---------------------------------
Percent Percent
of Loans of Loans
in Each in Each
Amount of Category Amount of Category
Loan Loss to Total Loan Loss to Total
Allowance Loans Allowance Loans
-------------- ----------------- ---------------- ---------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
One- to four-family......... $ 27 81.10% $ 25 81.78%
Multi-family................ --- 0.48 --- 0.88
Commercial real estate...... 77 11.71 64 11.05
Commercial non-real estate.... 10 1.47 --- ---
Construction or development. --- 0.38 --- 1.07
Consumer.................... --- 4.86 --- 5.22
Unallocated................. 171 --- 194 ---
--------- --------- --------- ---------
Total $ 285 100.00% $ 283 100.00%
========= ========= ========= =========
</TABLE>
Investment Activities
As part of its asset/liability management strategy and liquidity
requirements, the Company invests in U.S. government and agency obligations to
supplement its lending activities. The Company's investment policy also allows
for investments in overnight funds, mortgage-backed securities and certificates
of deposit. The Company may consider the expansion of investments into other
securities if deemed appropriate. At June 30, 2000, the Company did not own any
securities of a single issuer which exceeded 10% of the Company's
9
<PAGE>
retained earnings. See Note 3 of the Notes to the Consolidated Financial
Statements for additional information regarding the Company's investment
securities portfolio.
All of the Company's investment securities, except mortgage-backed
securities, are classified as available for sale. Mortgage-backed securities are
classified as held to maturity. The Company may elect to classify investment
securities acquired in the future as trading securities or as held to maturity,
instead of available-for-sale, but there are no current plans to do so.
The following table sets forth the composition of the Company's investment
and mortgage-backed securities at the dates indicated.
<TABLE>
<CAPTION>
June 30,
-------------------------------------------------------------
2000 1999
---------------------------- ----------------------------
Book Book
Value % of Total Value % of Total
----- ---------- ----- ----------
(Dollars in Thousands)
Investment securities:
<S> <C> <C> <C> <C>
FHLB stock.......................................... $ 509 100.00% $ 509 100.00%
========= ========== ========= ==========
Other interest-earning assets:
Interest bearing deposits with banks................ $ 474 26.70% $ 7,069 60.14%
Federal funds sold.................................. 1,301 73.30 4,685 39.86
---------- ---------- --------- ----------
Total............................................... $ 1,775 100.00% $ 11,754 100.00%
========== =========== ========= ==========
Securities Held to Maturity:
Mortgage-backed securities:
FNMA................................................ $ 1 0.57% $ 2 0.92%
FHLMC............................................... 173 99.43 215 99.08
---------- ---------- --------- -----------
Total mortgage-backed securities.................... $ 174 100.00% $ 217 100.00%
---------- ========== --------- ===========
</TABLE>
The following table sets forth the contractual maturities of the Company's
mortgage-backed securities at June 30, 2000.
Due in June 30, 2000
10 to 20 Balance
Years Outstanding
---------- -----------
(In Thousands)
Freddie Mac............................. $ 173 $ 173
Fannie Mae.............................. 1 1
--------- -----------
Total............................... $ 174 $ 174
========= ===========
10
<PAGE>
Sources of Funds
General. The Company's primary sources of funds are deposits, amortization
and prepayment of loan principal, maturities of investment securities,
short-term investments and funds provided from operations as well as FHLB
advances and short-term borrowings.
Deposits. The Company offers a variety of deposit accounts having a wide
range of interest rates and terms. The Company's deposits consist of passbook
and statement accounts, NOW accounts, Christmas Club and money market and
certificate accounts, including Individual Retirement Accounts. The Company
relies primarily on advertising, including newspaper and radio, pricing policies
and customer service to attract and retain these deposits. Neither premiums nor
brokered deposits are utilized.
The flow of deposits is influenced significantly by general economic
conditions, changes in money market and prevailing interest rates and
competition. The Company's mix of transaction accounts and certificate accounts
is less favorable than its peers, resulting in a higher cost of funds for the
Company in relation to its peer group. At June 30, 2000, 26.6% of the Company's
deposits were in transaction accounts, versus 73.4% in certificates.
The Company has become more susceptible to short-term fluctuations in
deposit flows, as customers have become more interest rate sensitive. The
Company manages the pricing of its deposits in keeping with its asset/liability
management, profitability and growth objectives. Based on its experience, the
Company believes that its passbook, demand and NOW accounts are relatively
stable sources of deposits. However, the ability of the Company to attract and
maintain certificate deposits, and the rates paid on these deposits, has been
and will continue to be significantly affected by market conditions.
11
<PAGE>
The following table sets forth the dollar amount of savings deposits in the
various types of deposit programs offered by the Company for the periods
indicated.
<TABLE>
<CAPTION>
June 30,
---------------------------------------------------------
2000 1999
-------------------------- ---------------------------
Average Average Average Average
Amount Rate Amount Rate
------ ---- ------ ----
(Dollars in Thousands)
Transactions and Savings Deposits:
---------------------------------
<S> <C> <C> <C> <C>
Demand Deposits................................ $ 5,597 3.02% $ 5,727 3.27%
Money Market & NOW Accounts.................... 11,053 2.52 11,268 2.57
----------- --------- ---------- --------
Total Non-Certificates..................... 16,650 2.69 16,995 2.81
----------- --------- ---------- --------
Certificates:
------------
Total Certificates............................. 38,961 5.40 39,980 5.50
----------- --------- ---------- ========
Total Deposits................................. $ 55,611 4.59% $ 56,975 4.70%
=========== ========= ========== ========
</TABLE>
At June 30, 2000, the Company had approximately $5.2 million in certificate
accounts in amounts of $100,000 or more maturing as follows:
Maturity Period Amount
----------------------------------------------- -------------------
(Dollars in
Thousands)
Three months or less........................... $ 721
Over three through six months.................. 212
Over six through 12 months..................... 893
Over 12 months................................. 3,362
--------
Total................................... $ 5,188
========
Borrowings. The Company's other available sources of funds include advances
from the Federal Home Loan Bank ("FHLB") of Atlanta and other borrowings. As a
member of the FHLB of Atlanta, the Association is required to own capital stock
in the FHLB of Atlanta and is authorized to apply for advances from the FHLB of
Atlanta. Each FHLB credit program has its own interest rate, which may be fixed
or variable, and range of maturities. The FHLB of Atlanta may prescribe the
acceptable uses for these advances, as well as limitations on the size of the
advances and repayment provisions. The Association's total credit line at the
FHLB of Atlanta was approximately $8.0 million at June 30, 2000, of which the
Association had drawn down, through FHLB advances, $3.0 million.
12
<PAGE>
The Company may also borrow funds from other financial institutions.
Competition
The Company experiences strong competition both in originating real estate
loans and in attracting deposits. This competition arises from a highly
competitive market area with numerous commercial banks and savings institutions,
as well as credit unions and mortgage bankers and, with respect to deposits,
banking institutions and other financial intermediaries. The Association
competes for loans principally on the basis of the interest rates and loan fees
it charges, the types of loans it originates and the quality of services it
provides to borrowers.
The Company attracts all of its deposits through the communities in which
its offices are located; therefore, competition for those deposits is
principally from other savings institutions, commercial banks, securities firms,
money market and mutual funds and credit unions located in the same community.
The ability of the Company to attract and retain deposits depends on its ability
to provide an investment opportunity that satisfies the requirements of
investors as to rate of return, liquidity, risk, convenient locations and other
factors. The Company competes for these deposits by offering a variety of
deposit accounts at competitive rates, convenient business hours and a
customer-oriented staff. At June 30, 2000, the Company had in excess of 60
financial institutions competing with it in its market area. The Company
estimates its market share of savings deposits in its market area to be
approximately 11.4%.
Employees
At June 30, 2000, the Company had a total of 16 full-time employees and no
part-time employees. None of the Company's employees are represented by any
collective bargaining group. Management considers its employee relations to be
good.
13
<PAGE>
REGULATION
General
As a federal savings bank, Wyman Park is subject to regulation, supervision
and regular examination by the OTS. In addition, the FDIC has certain regulatory
and examination authority over OTS-regulated savings institutions and may
recommend enforcement actions against savings institutions to the OTS. The
supervision and regulation of Wyman Park is intended primarily for the
protection of the deposit insurance fund and depositors.
As a savings and loan holding company, the Company is subject to OTS
regulation, examination, supervision and reporting requirements. The Holding
Company also is required to file certain reports with, and otherwise comply with
the rules and regulations of, the SEC under the federal securities laws.
Regulation of Wyman Park
Regulatory Capital. The OTS's capital adequacy regulations require savings
institutions such as Wyman Park to meet three minimum capital standards: a
"core" capital requirement of between 3% and 5% of adjusted total assets, a
"tangible" capital requirement of 1.5% of adjusted total assets, and a
"risk-based" capital requirement of 8% of total risk-based capital to total
risk-weighted assets. In addition, the OTS has adopted regulations imposing
certain restrictions on savings institutions that have a total risk-based
capital ratio of less than 8%, a ratio of Tier 1 capital to risk-weighted assets
of less than 4% or a ratio of Tier 1 capital to total assets of less than 4% (or
3% if the institution is rated composite 1 under the CAMELS examination rating
system). See "--Prompt Corrective Regulatory Action."
The following table sets forth the Association's compliance with its
regulatory capital requirements as of June 30, 2000.
<TABLE>
<CAPTION>
Association's Capital
Capital Requirements Excess Capital
Amount Percent Amount Percent Amount Percent
---------- ------- ---------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
Tangible capital............ $7,467,000 10.9% $1,033,000 1.5% $6,434,000 9.4%
Core capital................ 7,467,000 10.9 2,754,000 4.0 4,713,000 6.9
Total risk-based capital.... 7,752,000 19.4 3,199,000 8.0 4,553,000 11.4
</TABLE>
Prompt Corrective Regulatory Action. The Federal Deposit Insurance Act
("FDI Act") requires the federal banking regulators to take prompt corrective
action in respect of depository institutions that do not meet certain minimum
capital requirements, including a leverage limit and a risk-based capital
requirement. The federal bank regulators, including the OTS, have issued
regulations that classify insured depository institutions by capital levels and
provide that the applicable agency will take various prompt corrective actions
to resolve the problems of any institution that fails to satisfy the capital
standards. Under the joint prompt corrective action
14
<PAGE>
regulations, a "well-capitalized" institution is one that is not subject to any
regulatory order or directive to meet any specific capital level and that has or
exceeds the following capital levels: a total risk-based capital ratio of 10%, a
Tier 1 risk-based capital ratio of 6%, and a ratio of Tier 1 capital to total
assets ("leverage ratio") of 5%. An "adequately capitalized" institution is one
that does not qualify as "well capitalized" but meets or exceeds the following
capital requirements: a total risk-based capital of 8%, a Tier 1 risk-based
capital ratio of 4%, and a leverage ratio of either (i) 4% or (ii) 3% if the
institution has the highest composite examination rating. An institution not
meeting these criteria is treated as "undercapitalized," "significantly
undercapitalized," or "critically undercapitalized" depending on the extent to
which its capital levels are below these standards. An institution that falls
within any of the three "undercapitalized" categories will be subject to certain
severe regulatory sanctions required by the FDI Act and the implementing
regulations. As of June 30, 2000, Wyman Park was "well-capitalized" as defined
by the regulations.
Qualified Thrift Lender Test. The Home Owners' Loan Act ("HOLA") and OTS
regulations require all savings institutions to satisfy one of two Qualified
Thrift Lender ("QTL") tests or to suffer a number of sanctions, including
restrictions on activities. A savings institution must maintain its status as a
QTL on a monthly basis in at least nine out of every 12 months. An initial
failure to qualify as a QTL results in a number of sanctions, including the
imposition of certain operating restrictions and a restriction on obtaining
additional advances from its Federal Home Loan Bank. If a savings institution
does not requalify under the QTL test within the three-year period after it
fails the QTL test, it would be required to terminate any activity not
permissible for a national bank and repay as promptly as possible any
outstanding advances from its Federal Home Loan Bank. In addition, the holding
company of such an institution would similarly be required to register as a bank
holding company with the Federal Reserve Board. At June 30, 2000, Wyman Park
qualified as a QTL.
Limitations on Capital Distributions. OTS regulations impose limitations
upon capital distributions by savings institutions, such as cash dividends,
payments to repurchase or otherwise acquire its shares, payments to stockholders
of another institution in a cash-out merger and other distributions charged
against capital. Under the OTS capital distribution regulations, a savings
institution that qualifies for expedited treatment of applications by
maintaining specified supervisory examination ratings and that is not otherwise
restricted in making capital distributions may, without prior approval by the
OTS, make capital distributions during a calendar year equal to its net income
for such year plus its retained net income for the preceding two years. Capital
distributions in excess of such amount are subject to prior OTS approval. In
addition, even if a proposed capital distribution is less than the above limit,
a savings institution must give notice to the OTS at least 30 days before
declaration of a capital distribution to its holding company.
Under the OTS's prompt corrective action regulations, Wyman Park would be
prohibited from paying dividends if Wyman Park were classified as
"undercapitalized" under such rules. See "--Prompt Corrective Regulatory
Action." Further, earnings of Wyman Park appropriated to bad debt reserves and
deducted for federal income tax purposes are not available for payment of
dividends or other distributions to Wyman Park without payment of taxes at the
then current
15
<PAGE>
tax rate by Wyman Park on the amount of earnings removed from the reserves for
such distributions.
Transactions with Affiliates and Insiders. Generally, transactions between
a savings association or its subsidiaries and its affiliates are required to be
on terms as favorable to the association as transactions with non-affiliates. In
addition, certain of these transactions, such as loans to an affiliate, are
restricted to a percentage of the association's capital. Affiliates of Wyman
Park include the Company and any company that is under common control with the
Association. In addition, a savings association may not lend to any affiliate
engaged in activities not permissible for a bank holding company or acquire the
securities of most affiliates. The OTS has the discretion to treat subsidiaries
of savings associations as affiliates on a case by case basis.
Certain transactions with directors, officers or controlling persons are
also subject to conflict of interest regulations enforced by the OTS. These
conflict of interest regulations and other statutes also impose restrictions on
loans to such persons and their related interests. Among other things, such
loans must generally be made on terms that are substantially the same as for
loans to unaffiliated individuals.
Reserve Requirements. The Federal Reserve Board requires all depository
institutions to maintain noninterest bearing reserves at specified levels
against their transaction accounts (primarily checking, NOW and Super NOW
checking accounts). At June 30, 2000, Wyman Park was in compliance with these
reserve requirements.
Liquidity Requirements. Wyman Park is required by OTS regulations to
maintain an average daily balance of liquid assets. The current minimum liquid
asset ratio required by the OTS is 4% of a liquidity base as defined under OTS
regulations. For the quarter ended June 30, 2000, Wyman Park was in compliance
with the requirement, with an average daily liquidity ratio of 8.51%.
Federal Home Loan Bank System. The Federal Home Loan Bank System consists
of 12 district Federal Home Loan Banks subject to supervision and regulation by
the Federal Housing Finance Board ("FHFB"). The Federal Home Loan Banks provide
a central credit facility primarily for member institutions. As a member of the
FHLB, Wyman Park is required to acquire and hold shares of capital stock in the
FHLB in an amount at least equal to 1% of the aggregate unpaid principal of its
home mortgage loans, home purchase contracts, and similar obligations at the
beginning of each year, or 1/20 of its advances (borrowings) from the FHLB,
whichever is greater. Wyman Park was in compliance with this requirement, with
an investment in FHLB stock at June 30, 2000 of $508,500.
Regulation of the Company
The Company is a unitary savings and loan holding company subject to
regulatory oversight by the OTS. As such, the Company is required to register
and file reports with the OTS and is subject to regulation and examination by
the OTS. In addition, the OTS has enforcement authority over the Company and its
non-savings association subsidiaries, which permits the OTS
16
<PAGE>
to restrict or prohibit activities that are determined to be a serious risk to
the subsidiary savings association.
As a unitary savings and loan holding company, the Company generally is not
subject to activity restrictions. If the Company were to acquire control of
another savings association as a separate subsidiary, it would become a multiple
savings and loan holding company, and the activities of the Company and any of
its subsidiaries (other than Wyman Park or any other SAIF-insured savings
association) would become subject to such restrictions unless such other
associations each qualify as a QTL and were acquired in a supervisory
acquisition.
If Wyman Park fails the QTL test, the Company must obtain the approval of
the OTS prior to continuing after such failure, directly or through its other
subsidiaries, any business activity other than those approved for multiple
savings and loan holding companies or their subsidiaries. In addition, within
one year of such failure the Company would be required to register as, and would
become subject to, the restrictions applicable to bank holding companies. The
activities authorized for a bank holding company are more limited than are the
activities authorized for a unitary or multiple savings and loan holding
company. See "--Qualified Thrift Lender Test."
The Company must obtain approval from the OTS before acquiring control of
any other SAIF-insured association. Such acquisitions are generally prohibited
if they result in a multiple savings and loan holding company controlling
savings associations in more than one state. However, such interstate
acquisitions are permitted based on specific state authorization or in a
supervisory acquisition of a failing savings institution.
17
<PAGE>
Item 2. Description of Properties
The following table sets forth information concerning the main office and a
branch office of the Company at June 30, 2000.
<TABLE>
<CAPTION>
Owned Net Book
Year Or Value at
Location Opened Leased(1) June 30, 2000
------------------------------- ---------- ----------------------- ---------------
Main Office:
<S> <C> <C> <C>
11 Ridgely Road 1977 Land Leased;(2) $39,084
Lutherville, MD 21093 Building Owned
Branch Office:
7963 Baltimore/Annapolis Blvd. 1981 Leased;(3) N/A
Glen Burnie, MD 21060
</TABLE>
---------------------
(1) See Note 6 to Notes to Consolidated Financial Statements.
(2) There are five, five-year options which expire in May 2027.
(3) Lease expires in November 2001.
The Company's depositor and borrower customer files are maintained by an
independent data processing company. The net book value of the data processing
and computer equipment utilized by the Company at June 30, 2000 was
approximately $7,200.
Item 3. Legal Proceedings
From time to time, the Company and its subsidiaries are parties to various
legal proceedings incident to its business. At June 30, 2000, there were no
legal proceedings which management anticipates would have a material adverse
effect on the Company.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the quarter
ended June 30, 2000.
18
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
The information contained under the section captioned "Stock Listing and
Price Range of Common Stock" in the Company's 2000 Annual Report to Shareholders
(the "Annual Report") filed as Exhibit 13 hereto is incorporated herein by
reference.
Item 6. Management's Discussion and Analysis or Plan of Operation
The information contained in the table captioned "Selected Consolidated
Financial Information" in the Company's Annual Report is incorporated herein by
reference.
Item 7. Financial Statements
The following information appearing in the Company's Annual Report to
Stockholders for the year ended June 30, 2000, is incorporated by reference in
this Annual Report on Form 10-KSB and attached hereto as Exhibit 13.
Report of Independent Auditors
Consolidated Statements of Financial Condition as of June 30, 2000 and 1999
Consolidated Statements of Operations for the Years Ended June 30, 2000 and
1999
Consolidated Statements of Stockholders' Equity for Years Ended June 30,
2000 and 1999
Consolidated Statements of Cash Flows for Years Ended June 30, 2000 and
1999
Notes to Consolidated Financial Statements
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not applicable
19
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act
Directors
For information concerning the Board of Directors of the Company, the
information contained under the section captioned "Election of Directors" in the
Company's definitive proxy statement for the Company's 2000 Annual Meeting of
Shareholders (the "Proxy Statement") is incorporated herein by reference.
Executive Officers
For information concerning the executive officers of the Company, the
information contained under the section captioned "Executive Officers" in the
Company's definitive proxy statement for the Company's 2000 Annual Meeting of
Shareholders (the "Proxy Statement") is incorporated herein by reference.
Compliance with Section 16(a)
Information regarding delinquent Form 3, 4 or 5 filers is incorporated
herein by reference to the section entitled "Section 16(a) Beneficial Ownership
Reporting Compliance" in the Proxy Statement.
Item 10. Executive Compensation
The information contained under the section captioned "Election of
Directors -- Executive Compensation" in the Proxy Statement is incorporated
herein by reference.
Item 11. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners
Information required by this item is incorporated herein by
reference to the section captioned "Voting Securities and
Principal Holders of Securities" in the Proxy Statement.
(b) Security Ownership of Management
Information required by this item is incorporated herein by
reference to the sections captioned "Voting Securities and
Principal Holders of Securities" and "Election of Directors" in
the Proxy Statement.
20
<PAGE>
(c) Changes in Control
Management of the Company knows of no arrangements, including any
pledge by any person of securities of the Company, the operation
of which may at a subsequent date result in a change in control
of the registrant.
Item 12. Certain Relationships and Related Transactions
The information required by this item is incorporated herein by reference
to the section captioned "Election of Directors" in the Proxy Statement.
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits
Reference to
Prior Filing or
Exhibit Exhibit Number
Number Document Attached Hereto
------- -------------------------------------------- ---------------
3(i) Certificate of Incorporation *
3(ii) Bylaws *
4 Instruments defining the rights of security *
holders, including debentures
10 Material Contracts
(a) Employment Contract between *
Ernest A. Moretti and the Association
(b) Executive Supplemental Retirement Plan **
(c) 1999 Stock Option and Incentive Plan
(d) Recognition and Retention Plan
13 Annual Report to Stockholders 13
21 Subsidiaries of Registrant 21
23 Consents of Experts and Counsel 23
27 Financial Data Schedule 27
-------------
* Filed as exhibits to the Company's Form SB-2 Registration Statement as
initially filed on September 22, 1997 and subsequently amended (File No.
333-36119) of the Securities Act of 1933. All of such previously filed
documents are hereby incorporated herein by reference in accordance with
Item 601 of Regulation S-B.
** Filed as exhibit 10(b) to the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1998 and is hereby incorporated herein by
reference in accordance with Item 601 of Regulation S-B.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the last quarter of the year
ended June 30, 2000.
21
<PAGE>
SIGNATURES
In accordance with Section 13 of 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WYMAN PARK BANCORPORATION, INC.
Date: September 28, 2000 By: /s/ Ernest A. Moretti
------------------ ---------------------------------------
Ernest A. Moretti
(President and Chief Executive Officer)
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
By: /s/ Ernest A. Moretti By: /s/ Ronald W. Robinson
-------------------------------------- -------------------------------
Ernest A. Moretti Ronald W. Robinson,
(Principal Executive Officer) (Principal Financial and
Accounting Officer)
Date: September 28, 2000 Date: September 28, 2000
------------------- ------------------
By: /s/ Allan B. Heaver By: /s/ H. Douglas Huether
-------------------------------------- -------------------------------
Allan B. Heaver, H. Douglas Huether, Director
Chairman of the Board
Date: September 28, 2000 Date: September 28, 2000
------------------ ------------------
By: /s/ John K. White By: /s/ John R. Beever
-------------------------------------- -------------------------------
John K. White, Director John R. Beever, Director
Date: September 28, 2000 Date: September 28, 2000
------------------ ------------------
By: /s/ Albert M. Copp By: /s/ Gilbert D. Marsiglia, Sr.
-------------------------------------- -------------------------------
Albert M. Copp, Director Gilbert D. Marsiglia, Sr.,
Director
Date: September 28, 2000 Date: September 28, 2000
------------------ ------------------
By: /s/ Jay H. Salkin By: /s/ G. Scott Barhight
-------------------------------------- -------------------------------
Jay H. Salkin, Director G. Scott Barhight, Director
Date: September 28, 2000 Date: September 28, 2000
------------------ ------------------
