<PAGE> 1
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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, 1999
OR
[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition period from to
------------- ------------------
Commission File No. 0-25079
MICHIGAN COMMUNITY BANCORP LIMITED
(Exact name of registrant as specified in its charter)
MICHIGAN 38-3390193
(State of incorporation) (I.R.S. Employer Identification No.)
43850 SCHOENHERR ROAD
STERLING HEIGHTS MI 48313
(Address of principal executive offices)
(810) 532-8000
Registrant's Telephone Number, including area code:
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such report(s), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No
----- -----
As of September 30, 1999, the Registrant had 665,000 shares of Common Stock
issued and outstanding.
Transitional Small Business Disclosure Format (check one)
Yes No x
----- -----
(1)
<PAGE> 2
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Michigan Community Bancorp Limited (the "Company" or "MCB") completed an
initial public offering of its common Stock in December 1998 raising
$9,975,000 of gross proceeds before fees and expenses. The total
offering consisted of 665,000 shares which were priced at $15 per share.
The net proceeds to the Company after deducting underwriting fees were
$9.2 million. The consolidated financial statements of the Company
include its subsidiary banks, Lakeside Community Bank (LCB) and North
Oakland Community Bank (NOCB). All adjustments, which in the opinion of
management are necessary in order to ensure the financial statements are
not misleading, have been included.
(2)
<PAGE> 3
MICHIGAN COMMUNITY BANCORP LIMITED
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
9/30/99 12/31/98
------- --------
<S> <C> <C>
Assets
Cash & cash equivalents:
Cash & due from banks $ 2,005 $ 67
Federal funds sold 9,950 7,839
-------- --------
Cash and cash equivalents 11,955 7,906
Securities Available for Sale (Note 2) 1,993 --
Loans: (Note 3)
Loans, gross 36,093 --
Less: allowance for loan losses 560 --
-------- --------
Net loans 35,533 --
Premises and equipment-Net 1,677 222
Other assets 439 835
-------- --------
Total assets $ 51,597 $ 8,963
======== ========
Liabilities and Stockholders' Equity
Liabilities
Deposits: (Note 4)
Non-Interest Bearing Demand Deposits $ 5,190 --
Interest Bearing Demand Deposits 5,302 --
Savings Deposits 1,620 --
Time Deposits 31,032 --
-------- --------
Total deposits $ 43,144 --
Other liabilities 1,328 318
-------- --------
Total liabilities 44,472 318
Shareholders Equity
Preferred stock, no par value, 1,000,000
shares authorized, none issued -- --
Common stocks-$5 stated value
authorized - 9,000,000 shares
issued and outstanding - 665,000 shares 3,325 3,325
Capital surplus 5,880 5,880
Accumulated deficit (2,081) (560)
Accumulated Other Comprehensive, Net of 1 --
Tax of $ 1
-------- --------
Total stockholders' equity 7,125 8,645
-------- --------
Total liabilities and stockholders' equity $ 51,597 $ 8,963
======== ========
</TABLE>
(3)
<PAGE> 4
MICHIGAN COMMUNITY BANCORP LIMITED
CONSOLIDATED STATEMENT OF EARNINGS
JANUARY 1, 1999 TO SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
3 MONTH ENDED YEAR-TO-DATE
9/30/99 9/30/99
------------- ------------
<S> <C> <C>
Interest Income:
Interest & Fee on Loans $ 689 $ 1,041
Interest on Investment Securities 29 39
Interest on Certificate of Deposit -- 4
Interest on Federal Funds Sold 126 368
--------- ---------
Total Interest Income 844 1,452
Interest Expense:
Interest on Demand Deposits 38 73
Interest on Savings Deposits 7 12
Interest on Time Deposits 385 594
--------- ---------
Total Interest Expense 430 679
--------- ---------
Net interest income before allowance for loan losses 414 773
Less allowance for loan losses 200 560
--------- ---------
Net interest income after allowance for loan losses 214 213
Other Income 3 27
Other operating expenses:
Salaries and employee benefits 329 1,005
Occupancy 44 162
Equipment expense 70 164
Advertising 30 72
Miscellaneous 148 358
--------- ---------
Total other operating expense 621 1,761
--------- ---------
Loss - Before income taxes (404) (1,521)
Provision for income taxes -- --
--------- ---------
Net loss $ (404) $ (1,521)
========= =========
Number of shares outstanding 665,000 665,000
========= =========
Net loss per share $ (0.61) $ (2.29)
========= =========
</TABLE>
(4)
<PAGE> 5
MICHIGAN COMMUNITY BANCORP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
JANUARY 28, 1998 TO SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
ACCUMULATED
OTHER TOTAL
COMMON CAPITAL ACCUMULATED COMPREHENSIVE STOCKHOLDERS'
STOCK SURPLUS DEFICIT INCOME EQUITY
--------- --------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE - JANUARY 28, 1998 - INCEPTION $ - $ - $ - $ - $ -
Public Stock Offering 3,325 6,102 - - 9,427
Cost of Stock Offering - (222) - - (222)
Net Loss - - (560) - (560)
--------- --------- ----------- ------------- -----------
BALANCE - DECEMBER 31, 1998 3,325 5,880 (560) - 8,645
Comprehensive Income:
Net Loss - - (1,521) (1,521)
Change in Unrealized Loss on Securities - -
Available for Sale, Net of Re-classification
Adjustment and Tax Effect of $ 1 1 1
--------- --------- ---------- ------------ ----------
Total Comprehensive Income - - (1,521) 1 (1,520)
--------- --------- ---------- ------------ ----------
September 30, 1999 $ 3,325 $ 5,880 $ (2,081) $ 1 $ 7,125
========= ========== ========== ============ ==========
</TABLE>
(5)
<PAGE> 6
MICHIGAN COMMUNITY BANCORP LIMITED
CONSOLIDATED STATEMENT OF CASH FLOW
JANUARY 1, 1999 TO SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
Operating activities:
Net loss ($1,521)
Adjustments to reconcile net loss to net cash
provided in operating activities
Loss on Sale of Securities 2
Provision for loan loss 560
Depreciation 94
Accretion of Securities (1)
(Increase) Decrease in Interest Receivable & other assets 396
Increase (Decrease) in Interest Payable & other liabilities 1,009
--------------------
Net cash provided by operating activities 539
Investing activities:
Increase in gross loans (36,093)
Additions to premises and equipment (1,549)
Purchases of Available for Sale Securities (3,981)
Proceeds from sale of Available for Sale Securities 1,989
--------------------
Net cash used in investing activities (39,634)
Cash flows from financing activities:
Net increase in interest-bearing and non-interest
bearing demand accounts 10,492
Net increase in savings and time deposits 32,652
--------------------
Net cash provided by financing activities 43,144
Net increase in cash and cash equivalents 4,049
Cash and cash equivalents - December 31, 1998 7,906
--------------------
Cash and cash equivalents - September 30, 1999 $11,955
====================
Cash paid for interest $548
====================
</TABLE>
(6)
<PAGE> 7
MICHIGAN COMMUNITY BANCORP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of Michigan Community Bancorp
Limited (the "Company") conform to generally accepted accounting
principles. Management is required to make estimates and assumptions
that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from
these estimates and assumptions.
NATURE OF OPERATIONS - Michigan Community Bancorp Limited was
incorporated on January 28, 1998 as a bank holding company to establish
and operate two new banks, Lakeside Community Bank (LCB) in Sterling
Heights, Michigan and North Oakland Community Bank (NOCB) in Rochester
Hills, Michigan. In December 1998, the Company completed an initial
public offering for the sale of 665,000 shares of common stock, raising
$9.2 million, net of offering costs. LCB and NOCB commenced operations
in January 1999.
PRINCIPLES OF CONSOLIDATION - The consolidated financial statements
include the accounts of Michigan Community Bancorp Limited (the
"Corporation") and its wholly owned subsidiaries, Lakeside Community
Bank and North Oakland Community Bank (the "Banks"). The tabular
presentations omit 000's.
SECURITIES - Securities for which the Corporation has both the positive
intent and ability to hold to maturity are classified as
"held-to-maturity." Those securities are recorded at cost, adjusted for
accumulated amortization of premium and accretion of discount. Realized
gains and losses on sales of held to maturity securities, while rare,
will be included in net securities gains based on the adjusted cost of
the specific item sold. At September 30, 1999 there are no securities
classified as held to maturity.
When securities are purchased and the Corporation intends to hold the
securities for an indefinite period of time, but not necessarily to
maturity, they are classified as "available for sale" and recorded at
market value. Any decision to sell a security available for sale will
be based on various factors, including significant movements in
interest rates, changes in the maturity mix of the Corporation's assets
and liabilities, liquidity demands, regulatory capital considerations
and other similar factors. Cost is adjusted for amortization of
premiums and accretion of discounts to maturity or, for mortgage-backed
securities, over the estimated life of the security. Unrealized gains
and losses for available-for-sale securities will be excluded from
earnings and recorded as an amount, net of tax, as a component of
comprehensive income in stockholders' equity.
(7)
<PAGE> 8
MICHIGAN COMMUNITY BANCORP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INTEREST INCOME ON LOANS - Interest on loans is accrued and credited to
income based on the principal amount outstanding. The accrual of
interest on loans is discontinued when, in the opinion of management,
there is an indication that the borrower may be unable to meet payments
as they become due. Upon such discontinuance, all unpaid interest
accrued during the current year is reversed. Interest accruals are
generally resumed when all delinquent principal and/or interest has
been brought current, and in the opinion of management, the borrower
has demonstrated the ability to meet the terms and conditions of the
agreement.
LOANS AND RESERVE FOR POSSIBLE LOAN LOSSES - The reserve for possible
loan losses is established through a provision for possible loan losses
charged to expense. Loans are charged against the reserve for possible
loan losses when management believes collection of the principal is
unlikely. The reserve for possible loan losses is an amount management
believes will be adequate to absorb losses inherent in existing loans
based on evaluations of the anticipated repayment and prior loss
experience. The factors taken into consideration include: changes in
the nature, volume and quality of the portfolio, loan concentrations,
specific problem loans and current and anticipated economic conditions
that may affect the borrower's ability to pay.
PREMISES AND EQUIPMENT - Premises and equipment are stated at cost.
Depreciation is computed on the straight-line basis and charged to
operations over the estimated useful lives of the properties.
INCOME TAXES - The Corporation files a consolidated federal income tax
return and uses the asset and liability method of accounting for income
taxes. Current taxes are measured by applying the provisions of enacted
tax laws to taxable income to determine the amount of taxes receivable
or payable. Deferred tax assets and liabilities are recorded based on
the difference between the tax basis of assets and liabilities and
their carrying amounts for financial reporting purposes.
OTHER COMPREHENSIVE INCOME - Accounting principles generally require
that recognized revenue, expenses, gains and losses be included in net
income. Certain changes in assets and liabilities however, such as
unrealized gains and losses on available-for-sale securities, are
reported as a direct adjustment of the equity section of the balance
sheet. Such items, along with net income, are components of
comprehensive income. The only item included in "accumulated other
comprehensive income" at September 30, 1999 is the net unrealized gains
and losses on available-for-sale securities.
OFFERING COSTS - Costs related to the offering of common stock have
been netted against the offering proceeds from the sale of the
Company's stock.
EARNINGS PER SHARE - Basic earnings per share is based on the weighted
number of shares outstanding during the period.
(8)
<PAGE> 9
MICHIGAN COMMUNITY BANCORP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STOCK OPTIONS - The Company has two stock option plans. Options granted
to directors and key employees under both plans are accounted for using
the intrinsic value method, under which compensation expense is
recorded at the amount by which the market price of the underlying
stock at grant date exceeds the exercise price of an option. Under the
Company's plans, the exercise price on all options granted equals or
exceeds the fair value of the stock at the grant date. Accordingly, no
compensation cost is recorded as a result of stock options awards under
the plan.
NOTE 2 - SECURITIES
The amortized cost and estimated market value of securities available
for sale are as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Estimated
Cost Gains Losses Market Value
----------------- ----------- ----------- --------------
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations of
U.S. government corporations and agencies $ 1,991 $ 2 $ - $ 1,993
================= ============ =========== ==============
</TABLE>
The amortized cost and estimated market value of securities available
for sale at September 30, 1999, by contractual maturity, are shown
below. Expected maturities will differ from contractual maturity
because issuers have the right to call or prepay obligations with or
without call or prepayment penalties:
<TABLE>
<CAPTION>
Amortized Estimated
Cost Market Value
------------ -------------
<S> <C> <C>
Due after one year but within five years $ 1,991 $ 1,993
============ =============
</TABLE>
At September 30, 1999, U.S. Treasury Securities and obligations of U.S.
Government corporations and agencies were carried at $1,993 with a
market value of $1,993 and were pledged to secure public deposits and
for other purposes required by law.
Other than the U.S. Treasury Securities and obligations of U.S.
Government corporations and agencies, there were no investment
securities of any one issuer aggregating 10 percent of consolidated
stockholders' equity at September 30, 1999.
(9)
<PAGE> 10
MICHIGAN COMMUNITY BANCORP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
NOTE 3 - LOANS
Major classifications of loans are summarized as follows:
<TABLE>
<CAPTION>
September 30, 1999
------------------
<S> <C>
Commercial $ 29,834
Real Estate Mortgage 2,700
Installment 3,559
----------------
Total Loans 36,093
Less reserve for possible loan losses 560
--------------
Net Loans $ 35,533
================
</TABLE>
At September 30, 1999, approximately 3.7 million of loans were
outstanding to officers, bank directors, principal stockholders and
their associated companies. In the opinion of the Board of Directors of
the respective Banks, such loans were made on the same terms and
conditions as those to other borrowers and did not involve more than
the normal risk of collectibility.
At September 30, 1999, the Company had a loan concentration of 6.4
million in non-residential building operators and single-family housing
construction. Management does not feel that the borrowers will be
similarily impacted by economic or other activities.
ALLOCATION OF THE RESERVE FOR LOAN LOSS
At September 30, 1999, there were two loans 30 days past due (1.0
million). There were no non-accrual loans and no watch loans.
Transactions in the reserve for possible loan losses were as follows:
<TABLE>
<S> <C>
Balance - Beginning of year $ -
Provision charged to operations 560
Loans charged off -
Recoveries -
--------
Balance - September 30, 1999 $ 560
========
Reserve as a percentage of total loans 1.55%
========
</TABLE>
(10)
<PAGE> 11
MICHIGAN COMMUNITY BANCORP LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
NOTE 4 - CERTIFICATES OF DEPOSIT
The aggregate amount of certificates of deposit in denominations in
excess of $100,000 totaled approximately $11 million at September 30,
1999. The interest expense related to such deposits throughout the year
was approximately $265,800, which is included in interest on time
deposits in the accompanying consolidated statement of income.
NOTE 5 - OPERATING LEASE
The company assigned the lease for a building utilized by NOCB's branch
operations to NOCB. The assignment required the prepayment of the lease
totaling $250,000 and an ongoing monthly rental payment of $600. The
prepayment of rent will be expensed over the lease assignment term that
expires on December 31, 2004.
The Company has entered into a lease for a building to be utilized to
LCB's branch operations and the Company's headquarters. During the
first five year period, the lease requires a $8,392 monthly payment. A
credit of $4,196 for the first sixteen months will be given for tenant
improvements. The last five year period of the lease requires a $8,890
monthly payment. The lease expires December 1, 2008.
The annual future minimum lease payments required under these
non-cancelable operating leases as of September 30, 1999 are as
follows:
<TABLE>
<S> <C>
1999 $ 16,775
2000 95,316
2001 107,904
2002 107,904
2003 108,402
thereafter 535,310
---------------
Total $ 971,611
===============
</TABLE>
NOTE 6 - SUBSEQUENT EVENT
During September, 1999, the Company commenced a Private Placement of
91,000 units. Each unit is comprised of 1 share of common stock and
1 common stock purchase warrant which entitles the holder to acquire 1
1/2 shares of common stock at $11.00 per share. At September 30,
1999, the Company has collected $951.993, this amount is recorded as a
deposit in other liabilities. On October 1, 1999 the remaining units
were sold and the common stock and warrants were issued.
(11)
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
FORWARD - LOOKING STATEMENTS
The following discussion contains forward-looking statements that
involve substantial risks and uncertainties. These forward-looking
statements can be identified by the use of the words "anticipate",
"believe", "expect", "plan", and similar expressions. They are not
guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to predict with regard
to timing, extent, likeliness and degree of occurrence. 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. A list of the material
risks of the Company may be found under the caption "Factors That May
Affect Our Future Results" in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1998.
(A) PLAN OF OPERATION
ORGANIZATION
The Company was incorporated in 1998 as a bank holding company. The
Company operates two wholly owned subsidiary banks, Lakeside Community
Bank (LCB) and North Oakland Community Bank (NOCB) (collectively the
"Banks"). LCB and NOCB are organized as Michigan banking corporations
with depository accounts insured by the Bank Insurance Fund of the
Federal Deposit Insurance Corporation. LOC and NOCB provide a range of
commercial and consumer banking services primarily in the northern
communities of Macomb and Oakland Counties.
MARKET AREA
LCB is located on Schoenherr Road in a rapidly growing area of Macomb
County. NOCB is located on Rochester Road and occupies a renovated
former bank building in a rapidly growing area of Oakland County. The
communities that comprise the company's primary service area include
Sterling Heights, Macomb, Rochester and Rochester Hills. Management
believes these communities have an expanding and diverse economic base,
which includes a wide range of small to medium-sized businesses engaged
in manufacturing, construction and retail.
BANK LINES OF BUSINESS
The Banks' core business activities include attracting deposits from
the general public and using such deposits along with equity capital to
originate commercial loans. The Banks also offer installment and home
equity loans to consumers. The Banks' results of operations are
dependent primarily upon net interest income, which is the difference
between interest income from interest earning assets and interest
expense on interest bearing liabilities. Results of operation may be
positively influenced by non-interest income such as fees related to
loan origination and service charges associated with customer deposit
accounts. The Banks offer a full array of demand deposit accounts,
money market demand accounts, NOW accounts, savings accounts,
individual retirement accounts, certificates of deposit and ATM cards.
(12)
<PAGE> 13
CASH REQUIREMENTS
During September, 1999, the Company commenced a private placement of
91,000 units. Each unit is comprised of 1 share of common stock and 1
common stock purchase warrant which entitles the holder to acquire 1
1/2 shares of common stock at $11.00 per share. As of October 1, 1999
all the units were sold providing $1,001,000.00 in net proceeds to the
Company. Proceeds from the offering are to be used to repay
indebtedness to Lakeside Community Bank and North Oakland Community
Bank and to bring the Company and the Banks into compliance with
Section 23A and 23B of the Federal Reserve Act. Remaining proceeds will
be used to provide the company with additional working capital.
NUMBER OF EMPLOYEES
At September 30, 1999 the Company and the Banks' employed 22 people on
a full time basis and 4 people on a part time basis. Over the next
twelve months, MCB does not expect any significant changes in staffing
levels.
(B) MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
Total assets at September 30, 1999 were $51.6 million as compared to
$32.9 million at June 30, 1999. The increase in total assets was funded
by a $17.9 million dollar increase in deposits. Total net loss year to
date September 30, 1999 was $1.5 million. A portion of the loss can be
attributed to the volume of funds invested in low interest federal
funds sold, in anticipation of the commercial loans committed to, but
as of September 30, 1999 not funded.
DISTRIBUTION OF ASSETS, LIABILITES AND SHAREHOLDERS' EQUITY; INTEREST RATES AND
INTEREST DIFFERENTIAL
Net interest income, the primary component of earnings, represents the
difference between interest income on interest-earning assets and the
interest expense of interest-bearing liabilities. Net interest income
depends upon the volume of interest-earning assets and interest-bearing
liabilities and the rates earned or paid on them. This table represents
the daily average balances for the major asset and liability categories
and the related interest income and expense and interest rates for the
periods:
(13)
<PAGE> 14
<TABLE>
<CAPTION>
Three months ended September 30, 1999 Nine Months Ended September 30, 1999
Average Average
Interest Rate Interest Rate
Average Income/ Earned/ Average Income/ Earned/
(in thousands) Balance Expense Paid Balance Expenses Paid
------------------------------------------------------------------------------
(Annualized) (Annualized)
<S> <C> <C> <C> <C> <C> <C>
Assets
Federal funds sold 9,924 126 5.07 10,187 368 4.82
Securities 2,047 29 5.62 960 39 5.43
Loans 29,577 689 9.32 14,234 1,041 9.75
Purchased CD's $ - - - 110 4 4.86
------------------------------------------------------------------------
Total Earning Assets/Total Interest 41,548 844 8.12 25,491 1,452 7.6
Income
Cash and due from banks 1,793 1,223
All other assets 2,131 1,940
-------- -------
Total Assets 45,472 28,654
======== =======
Liabilities and Stockholder's Equity
NOW and money market accounts 4,581 38 3.29 2,660 73 3.67
Savings deposits 939 7 2.98 560 12 2.86
Time deposits 28,114 385 5.48 14,910 594 5.31
------------------------------------------------------------------------
Total Interest Bearing Liabilities/Total 33,634 430 5.11 18,130 679 4.99
Interest Expense
Noninterest bearing demand deposits 4,286 2,314
All other liabilities 262 151
Stockholder's equity 7,772 8,174
-------- -------
Total Liabilities and Stockholder's
Equity 45,954 28,769
======== =======
Net Interest Income 414 773
======= ======
Net Interest Spread (Net Interest
Income/Total Earning Assets) 3.95 4.05
====== =====
</TABLE>
(14)
<PAGE> 15
The following table shows the rate sensitivity of the Corporation's interest
earning assets and interest bearing liabilities as of September 30, 1999. This
table displays the interest rate sensitivity gap (i.e., interest rate sensitive
assets less interest rate sensitive liabilities), cumulative interest rate
sensitivity gap. For the purposes of this table, an asset or liability is
considered rate sensitive within a specified period when it matures or could be
repriced within such period, generally according to its contractual terms.
<TABLE>
<CAPTION>
After Three After One
Within Months But Year But After
Three Within One Within Five
Months Year Five Years Years Total
------------ -------------- ------------- ----------- ------------
(in thousands)
<S> <C> <C> <C> <C> <C>
Interest Earning Assets
Federal funds sold 9,950 - - - 9,950
Securities (1) - - 1,993 - 1,993
Loans 15,053 3,355 13,671 4,014 36,093
----------- ------------- ------------ ---------- -----------
Total 25,003 3,355 15,664 4,014 48,036
=========== ============= ============ ========== ===========
Interest Bearing Liabilities
NOW and money market
accounts 3,447 225 1,200 430 5,302
Savings deposits 54 162 810 594 1,620
Jumbo time deposits/
Time deposits $100,000 7,666 21,065 2,301 - 31,032
----------- ------------- ------------ ---------- -----------
Total 11,167 21,452 4,311 1,024 37,954
=========== ============= ============ ========== ===========
(1) Securities in the "available for sale" category are reported in this table
at fair value
Interest rate sensitivity gap 13,836 (18,097) 11,353 2,990 10,082
Cumulative interest rate
sensitivity gap 13,836 (4,261) 7,092 10,082 10,082
</TABLE>
The Corporation is asset sensitive, a decrease in market interest rates will
adversely affect net interest income.
The preceding table indicates the time periods in which interest earning assets
and interest bearing liabilities will mature or may be repriced, generally
according to their contractual terms. However, this table does not necessarily
indicate the impact that general interest rate movements would have on the
Corporation's net interest yield, because the repricing of various categories of
assets and liabilities is discretionary and is subject to competitive and other
pressures. As a result, various assets and liabilities indicated as repricing
within the same period may, in fact, reprice at different times and by different
increments.
(15)
<PAGE> 16
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On July 21, 1999 the Company held its annual meeting of shareholders.
At the meeting Messrs Balter, Blowers, Ferlito, Peleman, Shelton and
Sumner were elected to the Company's Board of Directors.
PART II
OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit Description
27 Financial Data Schedule (EDGAR filing only)
(b) Reports on Form 8-K
No reports on form 8-K have been filed during the quarter for which this
report is filed.
SIGNATURES
In accordance with the requirements of the Exchange Act the registrant caused
this report to be signed on its behalf by the undersigned, there onto duly
organized.
November 5, 1999 Michigan Community Bancorp Limited
By: /s/ David A. McKinnon
--------------------------------------
David A. McKinnon, President and Chief
Executive Officer
By: /s/ William L. Carley
-------------------------------------------
William L. Carley, Vice President and Chief
Financial Officer
(16)
<PAGE> 17
EXHIBIT INDEX
Exhibit Description
------- -----------
27 Financial Data Schedule (EDGAR filing only)
(17)
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JUL-01-1999
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0
0
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</TABLE>
