<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------------- -------------
Commission file number 0-8679
BAYLAKE CORP.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-1268055
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
217 North Fourth Ave., Sturgeon Bay, WI 54235
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(414)-743-5551
(Registrant's telephone number, including area code)
None
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
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 reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------ ------
Applicable Only to Corporate Issuers:
Indicate the number of shares outstanding of each of issuer's classes of common
stock as of May 8, 1995.
$5.00 Par Value Common
2,452,137 shares
<PAGE> 2
BAYLAKE CORP. AND SUBSIDIARIES
INDEX
PART I - FINANCIAL INFORMATION PAGE NUMBER
Item 1.
Consolidated Condensed Balance Sheets
as of March 31, 1995 and December 31, 1994 3
Consolidated Condensed Statement of Income
Three months ended March 31, 1995 and
1994 4
Consolidated Statement of Cash Flows
Three months ended March 31, 1995 and 1994 5 - 6
Notes to Consolidated Condensed Financial Statements 7 - 8
Item 2.
Managements Discussion and Analysis of Financial
Condition and Results of Operations 9 - 16
PART II. OTHER INFORMATION 17
Signatures 18
<PAGE> 3
PART 1 - FINANCIAL INFORMATION
BAYLAKE CORP. AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)
(In thousands of dollars)
<TABLE>
<CAPTION>
MARCH 31 DEC. 31
ASSETS 1995 1994
------ -------- --------
<S> <C> <C>
Cash and due from Banks $ 7,651 $ 10,516
Investment securities available for
sale (at market) 60,749 59,033
Investment securities held to maturity
(market value $11,951 on 3/31/95;
$14,237 on 12/31/94) 11,470 14,013
Loans 197,896 192,673
Less: Allowance for loan losses (2,619) (2,534)
--------- ---------
Loans, net of allowance for loan losses 195,277 190,139
Bank premises and equipment 6,614 5,930
Accrued interest receivable 2,317 1,995
Prepaid income taxes 237
Deferred income taxes 1,520 2,125
Other assets 3,486 3,119
-------- --------
TOTAL ASSETS $289,084 $287,107
======== ========
LIABILITIES
-----------
Domestic Deposits
Non-interest bearing $ 27,309 $ 33,506
Interest bearing
NOW 29,515 34,369
Savings 81,036 87,467
Time, $100,000 and over 14,259 4,900
Other time 90,655 86,875
-------- --------
Interest bearing deposits 215,465 213,611
-------- --------
Total deposits $242,774 247,117
Short term borrowings 9,300 4,149
Income taxes payable 144
Accrued expenses and other liabilities 3,151 3,062
Dividends payable 540
TOTAL LIABILITIES $255,369 $254,868
-------- --------
STOCKHOLDERS EQUITY
-------------------
Common Stock $5.00 par value - authorized
10,000,000 shares; issued 2,454,081 shares
on 3/31/95 and 12/31/94; outstanding
2,452,137 shares on 3/31/95 and 12/31/94
12,270 12,270
Additional paid-in capital 5,941 5,941
Reserve for market adjustment of
securities (1,059) (1,995)
Retained earnings 16,612 16,072
Treasury Stock (49) (49)
-------- --------
TOTAL STOCKHOLDERS EQUITY 33,715 32,239
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $289,084 $287,107
======== ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements
<PAGE> 4
BAYLAKE CORP. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS OF DOLLARS EXCEPT AMOUNTS PER SHARE)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
1995 1994
-------- --------
<S> <C> <C>
Interest Income
Interest and fees on loans $ 4,643 $ 3,809
Interest on investment securities
Taxable 827 776
Exempt from federal income tax 314 402
Other interest income 21 61
-------- --------
Total Interest Income 5,805 5,048
Interest Expense
Interest on deposits 2,231 1,731
Interest on short-term borrowings 129 42
-------- --------
Total Interest Expense 2,360 1,773
-------- --------
Net Interest Income 3,445 3,275
Provision for loan losses 77 68
-------- --------
Net interest income after
provision for loan losses 3,368 3,207
-------- --------
Other Income
Fees for fiduciary activities 81 76
Fees from loan servicing 98 95
Fees for other services to customers 262 313
Securities gains (losses) 0 31
Other income 57 26
-------- --------
Total Other Income 498 541
-------- --------
Other Expenses
Salaries and employee benefits 1,319 1,209
Occupancy expense 132 132
Equipment expense 150 128
Data processing and courier 104 108
FDIC insurance expense 152 134
Operation of other real estate 10 6
Other operating expense 441 396
-------- --------
Total Other Expenses 2,308 2,113
-------- --------
Income before income taxes 1,558 1,635
Income tax expense (benefit) 479 471
-------- --------
Net Income $ 1,079 $ 1,164
======== ========
Net Income per share (1) $0.44 $0.48
Cash dividends per share $0.22 $0.15
</TABLE>
(1) Based on 2,452,137 shares average outstanding in 1995 and 2,442,891 in
1994.
See accompanying notes to unaudited consolidated financial statements.
<PAGE> 5
BAYLAKE CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASHFLOWS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31
1995 1994
----------- ----------
(thousands of dollars)
<S> <C> <C>
Cash flows from operating activities:
Interest received from
Loans $ 4,366 $ 3,635
Investments 1,104 1,302
Fees and service charges 457 497
Interest paid to depositors (1,900) (1,601)
Interest paid to others (119) (42)
Cash paid to suppliers and employees (2,629) (2,257)
Income taxes paid (104) (150)
--------- ---------
Net cash provided by operating activities 1,175 1,384
Cash flows from investing activities:
Proceeds from sales of investment securities 4,861
Principal payments received on investments 5,769 17,536
Purchase of investments (3,393) (14,673)
Proceeds from sale of other real estate owned 16
Loans made to customers in excess of principal
collected (5,352) (5,810)
Capital expenditures (808) (258)
--------- ---------
Net cash (used) provided in investing activities (3,768) 1,656
Cash flows from financing activities:
Net increase (decrease) in demand deposits, NOW (17,482) (11,725)
accounts and savings accounts
Net increase (decrease) in advances from borrowers 5,151 6,242
Net increase (decrease) in time deposits 13,138 337
Proceeds from issuance of common stock 207
Dividends paid (1,079) (671)
--------- ---------
Net cash used by financing activities (272) (5,610)
--------- ---------
Net increase (decrease) in cash and cash equivalents (2,865) (2,570)
Cash and cash equivalents, beginning 10,516 10,288
--------- ---------
Cash and cash equivalents, ending $ 7,651 $ 7,718
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
1995 1994
-------- ---------
(thousands of dollars)
<S> <C> <C>
Reconciliation of net income to net cash provided by
operating activities:
Net Income $ 1,079 $ 1,164
Adjustment to reconcile net income to net cash
provided by operating activities:
Depreciation 124 127
Provision for loan losses and real estate owned 77 68
Amortization of premium on investments 44 86
Accretion of discount on investments (50) (24)
Cash surrender value increase (20) (21)
(Gain) loss on sale of investment securities (31)
Equity in income of service center (17) 2
Amortization of book of business 1
Goodwill writedown 1 1
Deferred compensation 24 24
Changes in assets and liabilities:
Interest receivable (322) (188)
Prepaids and other assets (222) (119)
Unearned income (11) 20
Interest payable 341 130
Taxes payable 375 322
Other liabilities (248) (178)
--------- ---------
Total adjustments 96 220
--------- ---------
Net cash provided by operating activities $ 1,175 $ 1,384
========= =========
</TABLE>
<PAGE> 7
BAYLAKE CORP. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
1. The accompanying unaudited consolidated financial statements should be
read in conjunction with Baylake Corp.'s ("Company") 1994 annual report on
Form 10-K. The financial data presented includes the combination of
financial data from Baylake Bank and Baylake Bank-Kewaunee, formerly known
as State Bank of Kewaunee, the principal subsidiary of Kewaunee County
Banc-Shares, Inc. ("KCB"). KCB was acquired by the Company in a merger,
which has been accounted for as a pooling of interests. The unaudited
financial information included in this reports reflects all adjustments
(consisting only of normal recurring accruals) which are necessary for a
fair statement of the financial position as of March 31, 1995 and December
31, 1994. The results of operations for the three months ended March 31,
1995 and 1994 and results of operations for the three months ended March
31, 1995 and 1994 are not necessarily indicative of results to be expected
for the entire year.
2. The book value of investment securities, by type, held by the Company are
as follows:
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1995 1994
-------- -----------
(Thousands of dollars)
<S> <C> <C>
Investment securities held to maturity:
U.S. Treasury and other U.S. government agencies $ $
Mortgage-backed securities
Obligations of states and political subdivisions 11,062 13,605
Other 408 408
--------- -----------
Investment securities held to maturity $ 11,470 $ 14,013
Investment securities available for sale:
U.S. Treasury and other U.S. government agencies $ 10,256 $ 8,187
Mortgage-backed securities 42,322 41,139
Obligations of states and other political subdivisions 6,954 6,742
Other 1,217 2,965
--------- -----------
Investments securities available for sale $ 60,749 $ 59,033
</TABLE>
3. At March 31, 1995 and December 31, 1994, loans are as follows:
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1995 1994
-------- -----------
(Thousands of dollars)
<S> <C> <C>
Commercial, industrial and agricultural $119,810 $ 109,133
Real estate-construction 6,440 5,881
Real estate-mortgage 55,573 61,818
Installment 16,862 16,639
Less: Deferred loan origination fees,
net of costs (789) (798)
--------- ----------
$197,896 $ 192,673
Less allowance for loan losses (2,619) (2,534)
--------- ----------
Net loans $195,277 $ 190,139
</TABLE>
<PAGE> 8
4. As of December 31, 1993, the company adopted Statements of Financial
Accounting Standards No. 115 (SFAS 115) "Accounting for Certain
Investments in Debt and Equity Securities." Accordingly, investment
securities available for sale at March 31, 1995 and December 31, 1994 are
carried at market value. Adjustments up or down to market value are
recorded as a separate component of equity, net of tax. Premium
amortization and discount accretion are recognized as adjustments to
interest income. Realized gains or losses on disposition are based on the
net proceeds and the adjusted carrying amount of the securities sold,
using the specific identification method.
5. The Company completed its merger with KCB on August 31, 1994. In
conjunction with the merger, the Company issued 15.69 shares of its common
stock for each share of KCB common stock. The acquisition has been
accounted for as a pooling of interests.
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
GENERAL
The following sets forth management's discussion and analysis of the
consolidated financial condition of Baylake Corp. (the "Company") at March 31,
1995, and the results of operations for the three months ended March 31, 1995
and March 31, 1994. This discussion and analysis should be read in conjunction
with the Company's unaudited consolidated financial statements and the notes
thereto included herein.
The company completed its acquisition of Kewaunee County Banc-Shares, Inc.
("KCB"), the holding company for Baylake-Kewaunee ("BBK"), on August 31, 1994.
The Company acquired all of the outstanding shares of KCB in exchange for
574,756 shares of the Company's common stock. The acquisition was structured
as a merger of KCB with a newly-formed subsidiary of the Company and accounted
for using the pooling-of-interests method of accounting; therefore the
financial data presented reflects the combined data of the Company and KCB.
RESULTS OF OPERATIONS
For the three months ended March 31, 1995, net income decreased $85,000, or
7.3%, to $1,079,000 from $1,164,000 for the first quarter of 1994. The
annualized return on average assets and return on average equity for the three
months ended March 31, 1995, were 1.53% and 12.78%, respectively, compared to
1.66% and 14.89%, respectively, for the same period a year ago.
The decrease in net income for the period is primarily due to increased
personnel costs and a reduction in other income offset by increased net
interest income.
NET INTEREST INCOME
Net interest income for the three months ended March 31, 1995 increased
$170,000, or 5.2%, to $3.45 million from $3.28 million for the same period a
year ago. Total interest income for the first quarter of 1995 increased
$757,000, or 15.0%, to $5.81 million from $5.05 million for the first quarter
of 1994, while interest expense increased $587,000 or 33.1%, to $2.36 million
in the first quarter of 1995 from $1.77 million in the first quarter of 1994.
These changes were primarily the result of a favorable increase in the average
volume of earning assets and an increased rate environment contributing to an
increase in net interest margin for the first quarter of 1995.
For the three months ended March 31, 1995, average earning assets increased
$3.17 million, or 1.19%, when compared to the same period last year. The
Company registered an increase in average loans of
<PAGE> 10
$12.94 million, or 4.85%, for the first quarter of 1995 compared to the same
period a year ago. Loans have typically resulted in higher rates of interest
payable to the Company then have investment securities.
Net interest margin (on a federal tax-equivalent basis) for the three months
ended March 31, 1995 increased from 5.30% to 5.43% compared to a year ago. The
average yield on interest earning assets amounted to 8.97% for the first
quarter of 1995, representing a increase of 97 basis points from the same
period last year. Total loan yields increased 117 basis points, while total
investment yields increased 25 basis points. The Company's average cost on
interest-bearing liabilities amounted to 4.30%, an increase of 103 basis points
for the first quarter of 1995 compared to the same period in 1994.
Interest-bearing deposits increased 94 basis points while short-term borrowing
costs increased 319 basis points.
PROVISION FOR LOAN LOSSES
The provision for loan losses for the three months ended March 31, 1995
increased $9,000, or 13.24%, to $77,000 from $68,000 for the first quarter a
year ago. This increase has occurred primarily as a result of above average
loan growth. Management believes that the current allowance is adequate in
view of the present condition of the Company's loan portfolio. Based on
current conditions, management intends to maintain the loan loss reserve at a
level above 1.25% of average total loans, subject to continuing review.
NON-INTEREST INCOME
Total non-interest income declined $43,000, or 7.95%, to $498,000 for the first
quarter of 1995, from $541,000 for the first quarter a year ago. This occurred
as a result of reduced service fee income and reduced securities activity
offset by increased other income.
Service fee income decreased primarily as a result of reduced insurance
commissions of $53,000 due to the discontinued operations of KCB's insurance
subsidiary which was sold in mid 1994. No securities gains or losses were
taken in the first quarter of 1995 compared to gains of $31,000 taken in a
similar period in 1994. Other income increased as Baylake Bank's data service
subsidiary, United Financial Services, Inc., showed income of $17,000 for the
first quarter of 1995 compared to a small net loss for the same period in 1994.
NON-INTEREST EXPENSE
Non-interest expense increased $195,000, or 9.2%, for the three months ended
March 31, 1995 compared to the same period in 1994. Salaries and employee
benefits showed the largest increase of $110,000, or 9.1%, due in part to
additional employee expense resulting from the February startup of the
Company's Green Bay
<PAGE> 11
operation. Increased benefit costs stemming from increased 401K contributions
and normal salary increases accounted for the remaining increase in salaries
and employee benefit expense. Other operating expense showed an increase of
$45,000, or 11.4%, primarily from startup costs in the Green Bay operation,
including such expenses as supplies and marketing.
The overhead ratio, which is computed by subtracting non-interest income from
non-interest expense and dividing by average total assets, was 2.56% for the
three months ended March 31, 1995 compared with the 2.24% for the same period
in 1994.
PROVISION FOR INCOME TAXES
The Company's provision for income taxes for the three months ended March 31,
1995 increased $8,000, or 1.7%, to $479,000 from $471,000 for the same period
one year ago. The increase in income tax provision was due to increased
taxable income.
BALANCE SHEET ANALYSIS
LOAN PORTFOLIO
At March 31, 1995, total loans increased $5.22 million, or 2.7%, to $197.9
million form $192.7 million at December 31, 1994. The change in the loan mix
in the Company's portfolio resulted primarily from an increase in commercial
loans to $119.8 million at March 31, 1995 compared to $109.1 million at
December 31, 1994, offset by a decline in real estate mortgage loans from $55.6
million at March 31, 1995 compared to $61.8 million at December 31, 1994.
NON-PERFORMING ASSETS
At March 31, 1995, non-performing assets amounted to $1.90 million compared to
$1.66 million at December 31, 1994. Non-performing loans at March 31, 1995
were .84% of total loans compared with .80% at December 31, 1994. There existed
other real estate owned of $252,000 at March 31, 1995 as compared with $123,000
at December 31, 1994. $145,000 of this increase stems from property foreclosed
on and taken as additional collateral as a result of a commercial credit in a
manufacturing concern which has ceased operations. The ratio of non-performing
assets to total loans at March 31, 1995 was .96% compared to .86% at December
31, 1994.
ALLOWANCE FOR POSSIBLE LOAN LOSSES
At March 31, 1995, the allowance for loan losses increased $85,000 from year
end 1994 to $2.62 million. Although loans have continued to grow at an above
average rate, the allowance for loan losses as a percent of total loans has not
increased. The allowance is at a level currently believed to be acceptable by
management. At March 31, 1995 and December 31, 1994, the allowance for loan
losses as a percentage of total loans were each at 1.32%.
<PAGE> 12
INVESTMENT PORTFOLIO
At March 31, 1995, the investment portfolio declined $827,000, or 1.13%, to
$72.2 million from $73.0 million at December 31, 1994. At March 31, 1995, the
investment portfolio represented 25.0% of total assets compared with 25.4% at
December 31, 1994. The slight decline in total investments occurred as
proceeds from matured investment securities were used to fund loan demand.
DEPOSITS
Total deposits at March 31, 1995 decreased $4.3 million, or 1.76%, to $242.8
million from $247.1 million at December 31, 1994. Non-interest bearing
deposits at March 31, 1995 decreased $6.2 million, or 18.5%, to $27.3 million
from $33.5 million at December 31, 1994. Interest-bearing deposits at March
31, 1995 increased $1.9 million, or .87%, to $215.5 million from $213.6 million
at December 31, 1994. Time deposits show a larger than normal increase with
$9.4 million in growth since year end 1994 as municipal deposits have shifted
into higher interest paying time deposit accounts. Overall deposits for the
first quarter tend to decline as a result of the seasonality of the customer
base as they drawdown deposits during the early first half of the year in
anticipation of the summer tourist season.
SHORT-TERM BORROWINGS
Total short-term borrowings at March 31, 1995 increased $5.2 million, or
$124.2%, to $9.3 million from $4.1 million at December 31, 1994. This increase
corresponds to past history. The seasonality of the customer base influences
the Company's balance sheet as deposits normally decrease and loan demand
increases during the early part of the year requiring the Company to meet these
needs with other short term funding.
LIQUIDITY
As shown in the Company's Consolidated Statements of Cash Flows for the three
months ended March 30, 1995, cash and cash equivalents decreased $2.87 million
during the period to $7.65 million at March 31, 1995. The decrease primarily
reflected $1.18 million in net cash provided by operating activities offset by
$3.77 million in net cash used in investing activities, and $272,000 used in
financing activities. Net cash provided by operating activities consisted of
the Company's net income for the periods increased by adjustments for non-cash
expenditures. Net cash used in investing activities consisted of a net
decrease in investments offset by a net increase in loans plus necessary
capital expenditures. Net cash used in financing activities resulted primarily
from a net decrease in deposits and an increase in borrowed funds offset by
dividends paid. As is typical of the seasonality that exists in the tourism
market serviced, customers tend to prepare for summer business through
increasing loans and drawing down on deposit
<PAGE> 13
drawndown during the early part of the year, increasing deposits at the end of
summer.
The Company manages its liquidity to provide adequate funds to support the
borrowing requirements and deposit flow of its customers. Management view its
liquidity as the ability to raise cash at reasonable costs or with a minimum of
loss and as a measure of balance sheet flexibility to react to marketplace,
regulatory and competitive changes. The primary sources of the Company's
liquidity are marketable assets maturing within one year. The Company
attempts, when possible, to match relative maturities of assets and
liabilities, while maintaining the desired net interest margin. Although the
percentage of earning assets represented by loans is increasing, management
believes that liquidity is adequate to support anticipated borrowing
requirements and deposit flows.
INTEREST RATE SENSITIVITY
The following table entitled "Asset and Liability Maturity Repricing Schedule"
indicates that the Company is slightly liability gap sensitive, although
management believes that a range of plus or minus 15% (from 100% matching)
within one year pricing schedule is acceptable. The analysis considers regular
savings, money market deposits and NOW accounts to be rate sensitive within
three months. All other earning categories including loans and investments as
well as other paying liability categories such as time deposits are scheduled
according to their contractual maturities. Also, Baylake Bank considers it
savings and NOW accounts to be core deposits and relatively non-price
sensitive, as it believes it could make repricing adjustments for these types
of accounts in smaller increments without a material decrease in balances.
Interest rate sensitivity analysis can be performed in several different ways.
The traditional method of measuring interest sensitivity is called "gap"
analysis. This mismatch between asset and liability repricing characteristics
in specific time intervals is referred to as "interest rate sensitivity gap."
If more liabilities than assets reprice in a given time interval a liability
gap position exits. In general, liability sensitive gap positions in a
declining interest rate environment increases net interest income.
Alternatively asset sensitive positions, where assets reprice more quickly than
liabilities, negatively impact the net interest income in a declining rate
environment. In the event of an increasing rate environment, opposite results
would occur in that a liability sensitivity gap position would decrease net
interest income and an asset sensitivity gap position would increase net
interest income. The sensitivity of net interest income to changing interest
rates can be reduced by matching the repricing characteristics of assets and
liabilities. For the time frame within three months as of March 31, 1995, rate
sensitive liabilities exceeded rate sensitive assets by $30.09 million, or a
ratio of rate sensitive assets to rate sensitive liabilities of 80.09%. For
the next time frame of four to six months, rate
<PAGE> 14
sensitive liabilities exceeded rate sensitive assets by $956,000, or a ratio
of rate sensitive assets to rate sensitive liabilities of 94.13%. For all
assets and liabilities priced within a one year time frame, the cumulative
ratio of rate sensitive assets to rate sensitive liabilities was 86.29%, which
is within the range of plus or minus 15% deemed acceptable by management.
Management continually reviews its interest risk position through its committee
processes. Managements' philosophy is to maintain a relatively matched rate
sensitive asset and liability position, within the range described above, in
order to provide earnings stability in the event of significant interest rate
changes.
<PAGE> 15
ASSET AND LIABILITY REPRICING SCHEDULE
AS OF MARCH 31, 1995
<TABLE>
<CAPTION>
Within Four to Seven to One Year Over
Three Six Twelve to Five Five
Months Months Months Years Years Total
------ ------ ------ ----- ----- -----
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Earning Assets:
Investment Securities $ 3,791 $ 1,288 $ 1,778 $13,724 $51,639 $72,220
Loans and Leases:
Variable Rate 102,919 102,919
Fixed Rate 14,303 14,031 24,045 40,967 433 93,779
-------- ------- ------- ------- ------- --------
Total Loans and Leases $117,222 $14,031 $24,045 $40,967 $ 433 $196,698
-------- ------- ------- ------- ------- --------
Total Earning Assets $121,013 $15,319 $25,823 $54,691 $52,072 $268,918
======== ======= ======= ======= ======= ========
Interest Bearing Liabilities:
NOW Accounts $ 29,515 $ $ $ $ $ 29,515
Saving Deposits 81,036 81,036
Time Deposits 31,728 16,275 20,483 36,374 53 104,913
Borrowed Funds 8,825 53 211 211 9,300
-------- -------- ------- ------- ------- --------
Total Interest Bearing Liabilities $151,104 $16,275 $20,536 $36,585 $ 264 $224,764
======== ======= ======= ======= ======= ========
Interest Sensitivity GAP $(30,091) $ (956) $ 5,287 $18,106 $51,808 $44,154
(within periods)
Cumulative Interest $(30,091) $(31,047) $(25,760) $(7,654) $44,154
Sensitivity GAP
Ratio of Cumulative -11.19% -11.55% -9.58% -2.85% 16.42%
Interest Sensitivity GAP to
Rate Sensitive Assets
Ratio of Rate Sensitive 80.09% 94.13% 125.75% 149.49% ---
Assets to Rate Sensitive
Liabilities
Cumulative Ratio of Rate 80.09% 81.45% 86.29% 119.64% ---
Sensitive Assets to Rate
Sensitive Liabilities
</TABLE>
<PAGE> 16
CAPITAL RESOURCES
At March 31, 1995, stockholders' equity increased $1.48 million, or 4.58%, to
$33.7 million from $32.2 million at December 31, 1994. An increase of $936,000
in capital resulting from the implementation of FAS 115 accounted for part of
this increase, while the remaining increase resulted from net income less
dividends paid. At March 31, 1995, the Company's risk-based Tier 1 Capital
Ratio was 17.31%, the total risk based capital ratio was 18.56% and the
leverage ratio was 11.77%. The Company, Baylake Bank and Baylake Bank-Kewaunee
continue to exceed all applicable regulatory capital requirements.
<PAGE> 17
PART II - OTHER INFORMATION
Item 5. Other Information.
Baylake Bank has expanded into the Northeast Brown County region
with a mobile unit facility located in Green Bay commencing operations
on February 20, 1995. Various retail services in addition to consumer
and commercial loans services are being offered at this temporary
facility. A permanent facility is planned for fall of 1995 and is
expected to offer a full range of products and services. Construction
costs for this facility are estimated to be $1.2 million with total
costs for building and equipment estmated to be $2.0 million.
Item 6. 8-K
(A) Exhibits
None
(b) Reports on Form 8-K filed for three months ended
March 31, 1995
None
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BAYLAKE CORP.
-------------------------
(Registrant)
Date: May 9, 1995 Steven D. Jennerjohn
------------------ -------------------------
Steven D. Jennerjohn
Treasurer
Date: May 9, 1995 Paul C. Wickmann
------------------ -------------------------
Paul C. Wickmann
Vice President
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