<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
--
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Allfirst Preferred Capital Trust
(Exact name of registrant as specified in its charter)
Commission File No. 33-88485-02
Delaware 52-7054489
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
25 South Charles Street
Baltimore, Maryland 21201
(Address of principal executive offices) (zip code)
410-244-4000
(Registrant's telephone number, including area code)
Allfirst Preferred Asset Trust
(Exact name of registrant as specified in its charter)
Commission File No. 33-88485-01
Delaware 52-2205894
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
25 South Charles Street
Baltimore, Maryland 21201
(Address of principal executive offices) (zip code)
410-244-4000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrants (1) have 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 reports), and (2) has been subject to such
filing requirements for at least the past 90 days. Yes X No
-
As of March 31, 2000, no voting stock was held by non-affiliates of the
Registrants
<PAGE>
Part 1 - Financial Information
------------------------------
Item 1. Financial Statements
ALLFIRST PREFERRED CAPITAL TRUST
Balance Sheet
(unaudited)
<TABLE>
(dollars in thousands) March 31, December 31,
2000 1999
---- -----
<S> <C> <C>
ASSETS
Investment in Asset Preferred Securities - Allfirst Preferred Asset Trust......... $102,047 $102,019
Income receivable................................................................. 1,662 1,715
-------- --------
Total assets .............................................................. $103,709 $103,734
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accrued distributions payable..................................................... $ 1,613 $ 1,664
-------- --------
Total liabilities........................................................ 1,613 1,664
-------- --------
Stockholders' equity:
Floating Rate Non-Cumulative Subordinated Capital Trust Enhanced
Securities; (aggregate liquidation amount $100,000).......................... 98,985 98,958
Trust Common Securities (aggregate liquidation amount $3,059)..................... 3,059 3,059
Retained earnings................................................................. 52 53
-------- --------
Total stockholders' equity................................................. 102,096 102,070
-------- --------
Total liabilities and stockholders' equity................................. $103,709 $103,734
======== ========
</TABLE>
See Notes to Financial Statements
2
<PAGE>
ALLFIRST PREFERRED CAPITAL TRUST
Statement of Earnings
For the Quarter ended March 31, 2000
(unaudited)
<TABLE>
(in thousands)
<S> <C>
Income on Asset Preferred Securities- Allfirst Preferred Asset Trust, net of
discount accretion of $28 ...................................................... $1,998
------
Net income............................................................... $1,998
======
</TABLE>
See Notes to Financial Statements
3
<PAGE>
ALLFIRST PREFERRED CAPITAL TRUST
Statement of Changes in Stockholders' Equity
For the Quarter Ended March 31, 2000
(unaudited)
<TABLE>
(in thousands)
<S> <C>
Floating Rate Non-Cumulative Subordinated Capital Trust Enhanced
Securities:
Balance at December 31, 1999......................................................... $ 98,958
Discount accretion................................................................... 27
--------
Balance at March 31, 2000............................................................ 98,985
--------
Trust Common Securities:
Balance at December 31, 1999......................................................... 3,059
--------
Balance at March 31, 2000............................................................ 3,059
--------
Undistributed earnings:
Undistributed Earnings December 31, 1999............................................. 53
Net income........................................................................... 1,998
Discount accretion................................................................... (27)
Distributions on Floating Rate Non-Cumulative Subordinated Capital Trust
Enhanced Securities............................................................... (1,911)
Dividends on Trust Common Securities................................................. (61)
--------
Balance at March 31, 2000............................................................ 52
--------
Total Stockholders' Equity.................................................................. $102,096
========
</TABLE>
See Notes to Financial Statements
4
<PAGE>
ALLFIRST PREFERRED CAPITAL TRUST
Statement of Cash Flows
(Unaudited)
For the Quarter Ended March 31, 2000
<TABLE>
(in thousands)
<S> <C>
Cash Flows From Operating Activities:
Net income......................................................................... $1,998
Adjustments to reconcile net income to cash provided by operating activities:
Accretion of discount.............................................................. (28)
Net decrease in accrued distributions receivable .................................. 53
------
Cash provided by operating activities.......................................... 2,023
------
Cash Flows From Financing Activities:
Cash dividends and distributions paid............................................. (2,023)
------
Cash used for financing activities........................................... (2,023)
------
Net change in cash...................................................................... -
Cash, December 31, 1999................................................................. -
------
Cash, March 31, 2000.................................................................... $ -
======
Supplemental Disclosure of Cash Flows:
Preferred distributions of $1,613 were accrued at March 31, 2000
</TABLE>
See Notes to Financial Statements
5
<PAGE>
ALLFIRST PREFERRED CAPITAL TRUST
Notes To Financial Statements (unaudited)
March 31, 2000
1. Basis of Presentation
The accompanying unaudited consolidated financial statements of
Allfirst Preferred Capital Trust ("Allfirst Capital Trust"), have been prepared
in accordance with generally accepted accounting principles for interim
financial reporting. Accordingly they do not include all information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (which
consist only of normal, recurring accruals) necessary for a fair presentation
have been included. Operating results for the three month period ended March 31,
2000 are not necessarily indicative of the results that may be expected for the
year ended December 31, 2000. These unaudited financial statements should be
read in conjunction with the audited financial statements and related notes
included in Allfirst Capital Trust's 1999 Annual Report on Form 10-K.
6
<PAGE>
ALLFIRST PREFERRED ASSET TRUST
Balance Sheets
(unaudited)
<TABLE>
(dollars in thousands) March 31, December 31,
2000 1999
---- ----
<S> <C> <C>
ASSETS
Cash....................................................................... $ 61 $ 60
U.S. Treasury bills available-for-sale..................................... 5,657 5,563
Investment in affiliate junior subordinated debenture...................... 104,241 104,212
Interest receivable........................................................ 1,683 1,736
-------- --------
Total assets ....................................................... $111,642 $111,571
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accrued distributions payable.............................................. $ 1,662 $ 1,715
-------- --------
Total liabilities................................................... 1,662 1,715
-------- --------
Stockholders' equity:
Asset Preferred Securities (aggregate liquidation amount $103,093)......... 102,047 102,019
Trust Common Securities (aggregate liquidation amount $7,675)............. 7,675 7,675
Undistributed earnings.................................................... 273 165
Other comprehensive income................................................. (15) (3)
-------- --------
Total stockholders' equity.......................................... 109,980 109,856
-------- --------
Total liabilities and stockholders' equity.......................... $111,642 $111,571
======== ========
</TABLE>
See Notes to Financial Statements
7
<PAGE>
ALLFIRST PREFERRED ASSET TRUST
Statement of Earnings
For the Quarter Ended March 31, 2000
(unaudited)
<TABLE>
(in thousands)
<S> <C>
Interest income on investment securities available-for- sale, including
discount accretion of $83............................................... $ 83
Interest income on junior subordinated debenture, including discount
accretion of $28........................................................ 2,023
------
Net Income.......................................................... $2,106
======
</TABLE>
See Notes to Financial Statements
8
<PAGE>
ALLFIRST PREFERRED ASSET TRUST
Statement of Changes in Stockholders Equity
For the Quarter Ended March 31, 2000
(unaudited)
<TABLE>
(in thousands)
<S> <C>
Asset Preferred Securities:
Balance at December 31, 1999.................................................... $102,019
Discount accretion.............................................................. 28
--------
Balance at March 31, 2000....................................................... 102,047
--------
Trust Common Securities:
Balance at December 31, 1999.................................................... 7,675
--------
Balance at March 31, 2000....................................................... 7,675
--------
Undistributed earnings:
Balance at December 31, 1999.................................................... 165
Earnings........................................................................ 2,106
Discount accretion.............................................................. (28)
Distributions on asset preferred securities..................................... (1,970)
--------
Balance at March 31, 2000....................................................... 273
--------
Other Comprehensive Income:
Balance December 31, 1999....................................................... (3)
Change in unrealized gains and losses on investment securities.................. (12)
--------
Balance at March 31, 2000....................................................... (15)
--------
Total Stockholders' Equity March 31, 2000.................................. $109,980
========
</TABLE>
See Notes to Financial Statements
9
<PAGE>
ALLFIRST PREFERRED ASSET TRUST
Statement of Cash Flows
For the Quarter Ended March 31, 2000
(Unaudited)
<TABLE>
<S> <C>
Cash Flows From Operating Activities:
Net income....................................................................... $ 2,106
Adjustments to reconcile net income to cash provided by operating activities:
Accretion of discounts........................................................ (111)
Net decrease in interest receivable .......................................... 53
-------
Cash provided by operating activities...................................... 2,048
-------
Cash Flows From Investing Activities:
Investment in U.S. Treasury Bills............................................ (24)
-------
Cash used for investing activities......................................... (24)
-------
Cash Flows From Financing Activities:
Cash distributions on Asset Preferred Securities............................. (2,023)
-------
Cash used for financing activities......................................... (2,023)
-------
Net change in cash................................................................. 1
Cash, December 31, 1999............................................................ 60
-------
Cash, March 31, 2000............................................................... $ 61
=======
</TABLE>
Supplemental Disclosure of Cash Flows:
Preferred distributions of $1,662 were accrued at March 31, 2000.
See Notes to Financial Statements
10
<PAGE>
ALLFIRST PREFERRED ASSET TRUST
Notes To Financial Statements
March 31, 2000
1. Basis of Presentation
The accompanying unaudited consolidated financial statements of
Allfirst Preferred Asset Trust ("Allfirst Asset Trust"), have been prepared in
accordance with generally accepted accounting principles for interim financial
reporting. Accordingly they do not include all information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (which consist only of
normal, recurring accruals) necessary for a fair presentation have been
included. Operating results for the three month period ended March 31, 2000 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 2000. These unaudited financial statements should be read in
conjunction with the audited financial statements and related notes included in
Allfirst Asset Trust's 1999 Annual Report on Form 10-K.
11
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Allfirst Preferred Capital Trust ("Allfirst Capital Trust") is a statutory
business trust formed on June 29, 1999 under the laws of the State of Delaware
for exclusive purposes of (i) issuing Floating Rate Non-Cumulative Subordinated
Capital Trust Enhanced Securities ("Capital Trust Securities") and common
securities (ii) purchasing Asset Preferred Securities issued by Allfirst
Preferred Asset Trust ("Allfirst Asset Trust") and (iii) engaging in only those
other activities necessary or incidental thereto.
Allfirst Preferred Asset Trust ("Allfirst Asset Trust") is a statutory
business trust formed on June 29, 1999 under the laws of the State of Delaware
for exclusive purposes of (i) issuing Asset Preferred Securities and its common
securities (collectively the "asset securities"), (ii) investing the gross
proceeds of the asset securities in junior subordinated debentures of Allfirst
Financial Inc. and other permitted investments and (iii) engaging in only those
other activities necessary or incidental thereto.
The registrants' activities are limited to issuing securities and investing
the proceeds as described above. Since Allfirst Capital Trust was formed on June
29, 1999, its activities, as specified in its declaration of trust, have been
limited to the issuance of the Floating Rate Non-Cumulative Subordinated Capital
Trust Enhanced Securities and the Trust Common Securities, investing of the
proceeds in the Asset Preferred Securities of Allfirst Asset Trust and the
payment of distributions on the Capital Trust Securities. Since Allfirst Asset
trust was formed on June 29, 1999, its activities, as specified in its
declaration of Trust, have been limited to issuing Asset Preferred Securities
and Trust Common Securities, investing the proceeds in a junior subordinated
debenture of Allfirst Financial Inc. and other permitted investments and the
payment of distributions on the Asset Preferred Securities.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
On July 13, 1999, Allfirst Capital Trust invested the gross proceeds from
the sale of the Trust Common Securities and the Capital Trust Securities in the
Asset Preferred Securities of Allfirst Asset Trust. Allfirst Asset Trust, in
turn, invested the proceeds from the sale of the Asset Preferred Securities and
a capital contribution from Allfirst in certain affiliate investment instruments
and eligible securities (the "Trust Assets"). To the extent Allfirst Asset Trust
has funds available from the Trust Assets, the Asset Trust Administrator may
declare distributions to Allfirst Capital Trust, as holder of the Asset
Preferred Securities. Allfirst Capital Trust's ability to pay distributions to
the holders of the Capital Trust Securities is dependent on its receipt of
distributions on the Asset Preferred Securities of Allfirst Asset Trust.
Therefore, upon receipt of payments from the Trust Assets and the distribution
thereof to Allfirst Capital Trust, Allfirst Capital Trust will make
distributions to the holders of the Capital Trust Securities.
12
<PAGE>
Part II - Other Information
Item 1. Legal Proceedings
The registrants know of no material legal proceedings involving
Allfirst Preferred Capital Trust or Allfirst Preferred Asset Trust, or the
assets of either of them.
Item 2. Changes in Securities
Not applicable
Item 3. Defaults upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
(27) Financial Data Schedules
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrants have duly caused this report to be signed on their
behalf by the undersigned, thereunto duly authorized on the 10th day of May,
2000.
ALLFIRST PREFERRED CAPITAL TRUST
By: /s/ David M. Cronin
-------------------------
(David M. Cronin )
Title: Capital Trust Administrator
ALLFIRST PREFERRED ASSET TRUST
By: /s/ David M. Cronin
-------------------------
(David M. Cronin)
Title: Asset Trust Administrator
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<CIK> 0001093414
<NAME> ALLFIRST PREFERRED CAPITAL TRUST
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 0
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 102,047
<INVESTMENTS-MARKET> 102,047
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 103,709
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,613
<LONG-TERM> 0
0
98,985
<COMMON> 3,059
<OTHER-SE> 52
<TOTAL-LIABILITIES-AND-EQUITY> 103,709
<INTEREST-LOAN> 0
<INTEREST-INVEST> 1,998
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 1,998
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 1,998
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 0
<INCOME-PRETAX> 1,998
<INCOME-PRE-EXTRAORDINARY> 1,998
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,998
<EPS-BASIC> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0.00
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<CIK> 0001093413
<NAME> ALLFIRST PREFERRED ASSET TRUST
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 61
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 5,657
<INVESTMENTS-CARRYING> 104,241
<INVESTMENTS-MARKET> 104,241
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 111,642
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,662
<LONG-TERM> 0
0
102,047
<COMMON> 7,675
<OTHER-SE> 258
<TOTAL-LIABILITIES-AND-EQUITY> 111,642
<INTEREST-LOAN> 0
<INTEREST-INVEST> 2,106
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 2,106
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 2,106
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 0
<INCOME-PRETAX> 2,106
<INCOME-PRE-EXTRAORDINARY> 2,106
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,106
<EPS-BASIC> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0.00
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
