UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarter ended June 30, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-10602
MID-AMERICA BANCORP
(Exact name of registrant as specified in its charter)
KENTUCKY 61-1012933
(State or other jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
500 West Broadway, Louisville, Kentucky 40202
(Address of principal executive offices) (Zip Code)
(502) 589-3351
(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 a 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 ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS: Indicate by check mark
whether the registrant has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Securities Exchange
Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the
number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. July 31, 1996:
9,129,235 shares of common stock, no par value
<PAGE>
MID-AMERICA BANCORP
PART I. FINANCIAL INFORMATION
The consolidated financial statements of Mid-America Bancorp
and subsidiaries (Company) submitted herewith are unaudited.
However, in the opinion of management, all adjustments (consisting
only of adjustments of a normal recurring nature) necessary for a
fair presentation of the results for the interim periods have been
made.
ITEM 1. FINANCIAL STATEMENTS
The following consolidated financial statements of the Company
are submitted herewith:
Consolidated balance sheets - June 30, 1996 and December 31, 1995
Consolidated statements of income - three and six months ended
June 30, 1996 and 1995
Consolidated statements of changes in shareholders' equity - six
months ended June 30, 1996 and 1995
Consolidated statements of cash flows - six months ended June 30,
1996 and 1995
Notes to consolidated financial statements
<PAGE>
MID-AMERICA BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands except share and per share data) (Unaudited)
<TABLE>
<CAPTION>
June 30 December 31
----------- -------------
1996 1995
ASSETS ----------- -------------
<S> <C> <C>
Cash and due from banks $36,364 $50,962
Federal funds sold 104,000 38,200
Securities purchased under agreements to resell 100,000 75,000
Securities available for sale, amortized cost of $310,275 (1996)
and $287,470 (1995) (Note 3) 308,172 292,374
Securities held to maturity, market value of $16,802 (1996)
and $69,766 (1995) (Note 3) 16,632 69,326
Loans, net of unearned income of $18,539 (1996) and $23,304 (1995) 766,912 748,565
Allowance for loan losses (Note 4) (9,396) (9,318)
----------- -------------
Loans, net 757,516 739,247
Premises and equipment 21,223 20,265
Other assets 43,356 28,613
----------- -------------
TOTAL ASSETS $1,387,263 $1,313,987
=========== =============
LIABILITIES
Deposits:
Non-interest bearing $242,529 $132,931
Interest bearing 667,839 652,026
----------- -------------
Total deposits 910,368 784,957
Securities sold under agreements to repurchase 198,153 227,166
Federal funds purchased 4,300 3,050
Advances from the Federal Home Loan Bank 72,585 75,109
Money orders and similar payment instruments outstanding 57,701 79,409
Accrued expenses and other liabilities 10,144 11,346
----------- -------------
TOTAL LIABILITIES 1,253,251 1,181,037
SHAREHOLDERS' EQUITY
Preferred stock, no par value;
authorized - 750,000 shares; none issued -- --
Common stock, no par value, stated value $2.77 per
share; authorized - 12,000,000 shares; issued and outstanding -
9,128,690 shares (1996) and 9,091,642 shares (1995) 25,321 25,218
Additional paid-in capital 100,397 99,991
Retained earnings 9,661 4,554
Net unrealized securities gains (losses) (Note 3) (1,367) 3,187
----------- -------------
TOTAL SHAREHOLDERS' EQUITY 134,012 132,950
----------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,387,263 $1,313,987
=========== =============
See notes to consolidated financial statements.
/TABLE
<PAGE>
MID-AMERICA BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data) (Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
-------------------------- --------------------------
1996 1995 1996 1995
INTEREST INCOME: ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Interest and fees on loans $18,119 $17,491 $36,034 $34,478
Interest on securities:
U.S.Treasury and agencies 3,040 3,472 6,359 6,675
States and political subdivisions 259 174 467 303
Corporate and other 1,392 750 2,463 1,438
Interest on federal funds sold 485 730 931 1,393
Interest on securities purchased under agreements to resell 1,728 170 3,328 604
----------- ----------- ----------- -----------
Total interest income 25,023 22,787 49,582 44,891
----------- ----------- ----------- -----------
INTEREST EXPENSE:
Interest on deposits 7,461 7,312 14,936 14,282
Interest on federal funds purchased and
securities sold under agreements to repurchase 3,363 2,156 6,475 4,414
Interest on Federal Home Loan Bank advances 1,118 1,208 2,259 2,438
----------- ----------- ----------- -----------
Total interest expense 11,942 10,676 23,670 21,134
----------- ----------- ----------- -----------
Net interest income before provision for loan losses 13,081 12,111 25,912 23,757
Provision for loan losses (Note 4) 104 127 104 229
----------- ----------- ----------- -----------
Net interest income after provision for loan losses 12,977 11,984 25,808 23,528
----------- ----------- ----------- -----------
/TABLE
<PAGE>
MID-AMERICA BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Cont'd)
(In thousands except per share data) (Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
-------------------------- --------------------------
1996 1995 1995 1994
NON-INTEREST INCOME: ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Income from trust department 231 222 499 453
Service charges on deposit accounts 1,110 1,097 2,186 2,207
Money order fees 1,003 923 1,959 1,778
Securities gains (losses) 8 (37) 1,176 (12)
Other 679 649 1,432 1,190
----------- ----------- ----------- -----------
Total non-interest income 3,031 2,854 7,252 5,616
----------- ----------- ----------- -----------
OTHER OPERATING EXPENSES:
Salaries and employee benefits 6,279 5,681 12,498 11,158
Occupancy expense 713 741 1,469 1,481
Furniture and equipment expenses 1,210 1,197 2,430 2,439
Other (Note 5) 2,231 2,568 4,720 5,317
----------- ----------- ----------- -----------
Total other operating expenses 10,433 10,187 21,117 20,395
----------- ----------- ----------- -----------
Income before income taxes 5,575 4,651 11,943 8,749
Income tax expense 1,868 1,440 3,919 2,718
----------- ----------- ----------- -----------
NET INCOME $3,707 $3,211 $8,024 $6,031
=========== =========== =========== ===========
NET INCOME PER COMMON SHARE (Note 2) $0.40 $0.35 $0.87 $0.66
=========== =========== =========== ===========
Weighted Average Number of Shares Outstanding 9,217 9,151 9,216 9,151
=========== =========== =========== ===========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
MID-AMERICA BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In thousands except per share data) (Unaudited)
<TABLE>
<CAPTION>
Six months ended
June 30
------------------------------
1996 1995
-------------- -------------
<S> <C> <C>
Balance, January 1 $132,950 $125,052
Net income 8,024 6,031
Cash dividends declared ($.32 and $.30 per share, respectively) (2,916) (2,644)
Stock options exercised, including related tax benefits 508 169
Net unrealized gains (losses) on securities available for sale, net of tax (4,554) 2,117
-------------- -------------
Balance, June 30 $134,012 $130,725
============== =============
See notes to consolidated financial statements.
/TABLE
<PAGE>
MID-AMERICA BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
<TABLE>
<CAPTION> Six months ended
June 30
--------------------------
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES: ----------- -----------
<S> <C> <C>
Net income $8,024 $6,031
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Depreciation, amortization and accretion, net 1,716 2,334
Provision for loan losses 104 229
Federal Home Loan Bank stock dividend (470) (414)
Loss (gain) on sales of securities (1,176) 12
Deferred taxes (1,690) 846
Increase in interest receivable (453) (234)
Increase in other assets (2,368) (5,472)
Decrease in money orders and similar payment instruments outstanding (21,708) (1,845)
Increase (decrease) in other liabilities 2,179 (475)
----------- -----------
Net cash provided by (used in) operating activities (15,842) 1,012
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities available for sale (88,526) (35,717)
Proceeds from maturities of securities available for sale 35,081 24,722
Proceeds from sales of securities available for sale 32,793 13,591
Purchases of securities held to maturity (2,012) (57,121)
Proceeds from maturities of securities held to maturity 54,725 80,213
Decrease (increase) in customer loans (30,306) 3,505
Proceeds from sales of premises and equipment 87 291
Payments for purchases of premises and equipment (2,496) (2,074)
----------- -----------
Net cash provided by (used in) investing activities (654) 27,410
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 125,411 121,287
Net decrease in securities sold under agreements to repurchase (29,013) (131,073)
Net increase (decrease) in federal funds purchased 1,250 (700)
Repayment of advances from the Federal Home Loan Bank (2,524) (3,209)
Stock options exercised 490 168
Dividends paid (2,916) (2,644)
----------- -----------
Net cash provided by (used in) financing activities 92,698 (16,171)
----------- -----------
Net increase in cash and cash equivalents 76,202 12,251
Cash and cash equivalents at January 1 164,162 134,515
----------- -----------
Cash and cash equivalents at June 30 $240,364 $146,766
=========== ===========
</TABLE>
During the six months ended June 30, 1996 there was a transfer from
loans to other assets (other real estate owned) of $11,934,000.
See notes to consolidated financial statements.
MID-AMERICA BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The accounting and reporting policies of Mid-America Bancorp and
its subsidiaries (the Company) conform with generally accepted
accounting principles and general practices within the banking
industry. The accompanying unaudited consolidated financial
statements should be read in conjunction with the Summary of
Significant Accounting Policies footnote which appears in the
Company's 1995 Annual Report and Form 10-K filed with the
Securities and Exchange Commission.
2. Appropriate share information in the consolidated financial
statements has been adjusted for the 3% stock dividend of
November 1995.
3. The amortized cost and market value of securities available for
sale are summarized as follows:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
---------------------- ------------------------
Amortized Market Amortized Market
Cost Value Cost Value
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
U.S. Treasury and agencies $241,008 $239,160 $232,934 $237,294
Obligations of states and political subdivisions 23,501 23,259 10,841 11,301
Corporate obligations 29,873 29,860 28,023 28,107
Equity securities 15,893 15,893 15,672 15,672
---------- ---------- ----------- -----------
$310,275 $308,172 $287,470 $292,374
========== ========== =========== ===========
</TABLE>
The book value and market value of securities held to maturity are
summarized as follows:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
---------------------- ------------------------
Book Market Book Market
Value Value Value Value
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
U.S. Treasury and agencies $16,532 $16,702 $69,226 $69,665
Corporate obligations 100 100 100 101
---------- ---------- ----------- -----------
$16,632 $16,802 $69,326 $69,766
========== ========== =========== ===========
/TABLE
<PAGE>
MID-AMERICA BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands) (Unaudited)
4. Allowance for Loan Losses - Changes in the allowance for loan losses
are as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---------- -----------
<S> <C> <C>
Balance, January 1 $9,318 $7,045
Provision for Loan Losses 104 6,047
Recoveries 124 271
Loans charged-off (150) (4,045)
---------- -----------
Balance, end of period $9,396 $9,318
========== ===========
</TABLE>
5. Other operating expenses consist of the following:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
----------------------- ------------------------
1996 1995 1996 1995
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Operating supplies $385 $494 $744 $1,031
Legal and professional fees 378 188 617 389
Taxes - Bank, property and other 408 376 771 731
Deposit insurance 3 404 6 808
Other 1,057 1,106 2,582 2,358
---------- ----------- ----------- -----------
$2,231 $2,568 $4,720 $5,317
========== =========== =========== ===========
</TABLE>
<PAGE>
ITEM II. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This item discusses the results of operations for Mid-America
Bancorp and its subsidiaries for the three and six months ended June
30, 1996 and compares those periods with the same periods of the
previous year. In addition, the discussion describes the
significant changes in the financial condition of the Company that
have occurred between December 31, 1995 and June 30, 1996. This
discussion should be read in conjunction with the consolidated
financial statements and accompanying notes presented in Part I,
Item 1 of this report.
A. RESULTS OF OPERATIONS
Net income for the six months ended June 30, 1996 was
$8,024,000 or $0.87 per share, compared to $6,031,000 or $0.66 per
share for the six months ended June 30, 1995. Net income for the
second quarter of 1996 was $3,707,000 or $0.40 per share. Net
income for the second quarter of 1995 was $3,211,000 or $0.35 per
share.
Net income for the six months ended June 30, 1996, when
compared to the same period in 1995, increased 33%. For the second
quarter of 1996 compared to the second quarter in 1995, net income
increased 15.4%. Excluding the effects of securities transactions
in each period, the six month increase was 20.2% and the second
quarter increase was 14.4%. The Company's results for the quarter
and year-to-date periods ended June 30, 1996, compared to the same
periods in 1995 reflected the following:
*Increased net interest income resulting primarily from
increases in earning assets, offset somewhat by the impact of
lower interest rates during 1996 than in 1995.
*Year-to-date securities gains of $1,176,000, with an after tax
impact of $764,000 or $0.08 per share.
*Increases in non-interest income, excluding securities
transactions, of 4.5% and 7.9% for the quarter and
year-to-date, respectively.
*Decreases in other operating expenses, excluding salaries, of
7.8% and 6.7% for the quarter and year-to-date, respectively.
*Increases in salaries and benefits for the quarter and
year-to-date periods of 10.5% and 12.0%, respectively, arising
primarily from staffing changes that occurred during the last
half of 1995 and annual salary increases that averaged
approximately 4%.
Net Interest Income
Net interest income is the difference between interest earned
on earning assets and interest expensed on interest bearing
liabilities. The net interest spread is the difference between the
average yield on earning assets and the average rate on interest
bearing liabilities. The net yield on earning assets (interest
margin) is net interest income divided by average earning assets.
The following table summarizes the above for the three and six
months ending June 30, 1996 and 1995.
<PAGE>
In thousands except percentages
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Total interest income $25,023 $22,787 $49,582 $44,891
Tax equivalent adjustment 354 321 689 637
Tax equivalent interest income 25,377 23,108 50,271 45,528
Total interest expense 11,942 10,676 23,670 21,134
Tax equivalent net interest income $13,435 $12,432 $26,601 $24,394
Average rate on earning assets 8.25% 8.50% 8.26% 8.38%
Average rate on intereterest bearing liabilities 4.77% 4.90% 4.80% 4.81%
Net interest spread, annualized 3.48% 3.60% 3.46% 3.57%
Net interest margin, annualized 4.37% 4.57% 4.37% 4.49%
Average earning assets $1,232,663 $1,078,646 $1,222,505 $1,085,820
Average interest bearing liabilities $1,004,132 $873,773 $988,383 $885,614
</TABLE>
Net interest income on a tax equivalent basis increased
approximately $1.0 million or 8.1% and $2.2 million or 9.1% for the
three and six months ended June 30, 1996, respectively, compared to
comparable periods in 1995. The increases result from increases in
average earning assets, offset somewhat by lower interest spreads.
Provision for Loan Losses
The allowance for loan losses is maintained at a level adequate
to absorb estimated potential credit losses. Management determines
the adequacy of the allowance based upon reviews of individual
credits, evaluation of the risk characteristics of the loan
portfolio, including the impact of current economic conditions on
the borrowers' ability to repay, past collection and loss experience
and such other factors, which, in management's judgement, deserve
current recognition. See "Non-Performing Loans and Assets". The
allowance for loan losses is established by charges to operating
earnings.
An analysis of the changes in the allowance for loan
losses and selected ratios follows:
<PAGE>
Dollars In thousands
<TABLE>
<CAPTION>
Six Months End
June 30
1996 1995
<S> <C> <C>
Balance at January 1 $9,318 $7,045
Provision for loan losses 104 229
Net loan charge-offs, net of recoveries -26 -139
Balance June 30 $9,396 $7,135
Average loans, net of unearned income $754,324 $695,327
Provision for loan losses to average loans 0.01% 0.03%
Allowance for loan losses to average loans 1.25% 1.03%
Allowance for loan losses to period-end loans 1.23% 1.03%
</TABLE>
Non-interest Income and Other Operating Expenses
The following table sets forth the major components of
non-interest income and other operating expenses for the three and
six months ended June 30, 1996 and 1995:
<PAGE>
<TABLE>
<CAPTION>
Three months ended Six months ended
In thousands June 30 Increase June 30 Increase
1996 1995 (Decrease) 1996 1995 (Decrease)
<S> <C> <C> <C> <C> <C> <C>
Non-Interest Income:
Income from trust department $231 $222 $9 $499 $453 $46
Service charges on deposit accounts 1,110 1,097 13 2,186 2,207 -21
Money order fees 1,003 923 80 1,959 1,778 181
Securities gains (losses) 8 -37 45 1,176 -12 1,188
Other 679 649 30 1,432 1,190 242
Total non-interest income $3,031 $2,854 $177 $7,252 $5,616 $1,636
Other Operating Expenses:
Salaries and employee benefits $6,279 $5,681 $598 $12,498 $11,158 $1,340
Occupancy expenses 713 741 -28 1,469 1,481 -12
Furniture and equipment expenses 1,210 1,197 13 2,430 2,439 -9
Operating supplies 385 494 -109 744 1,031 -287
Professional fees 378 188 190 617 389 228
Taxes-Bank, property and other 408 376 32 771 731 40
Deposit insurance 3 404 -401 6 808 -802
Other 1,057 1,106 -49 2,582 2,358 224
Total other operating expenses $10,433 $10,187 $246 $21,117 $20,395 $722
</TABLE>
Non-interest income increased $1,636,000 or 29% for the six months
ended June 30, 1996 and increased $177,000 or 6.2% for the three
months ended June 30, 1996 compared to the same periods in 1995.
Excluding securities transactions in all periods, the increases in
1996 were 7.9% and 4.5% for the six month and three month periods,
respectively. In the first quarter of 1996 the Company sold $28.8
million of callable agency securities and realized a gain of
$1,168,000. The proceeds from the sales were reinvested in longer
term municipal and agency securities in connection with the
Company's ongoing asset/liability management process. The Company
benefitted from the continuing volume increases in the money order
company subsidiary's business which caused increased fees of 10.2%
and 8.7% for the six and three month periods, respectively. For the
three month periods there were no other significant fluctuations in
the components of non-interest income. The year-to-date period
reflected an increase in other non-interest income primarily from
first quarter activity, which related to higher bank card merchant
fees, interchange fees from the Company's new debit card product and
a gain on disposition of a branch location.
Western Union Financial Services, Inc. has exercised a contractual
option to purchase part of the money order business from Mid-America
Money Order Company, a wholly-owned subsidiary of the Company (MOC).
The purchase of this business by Western Union involves
approximately one-third of MOC's agent base and volume. However,
the Company does not expect the profit level of MOC to decline in
the same proportion as the lost volume because this portion of the
agent base accounts for the lowest margin business in the MOC
portfolio and the sale will permit some cost reductions. The sale
closed July 25, 1996, at which time the Company realized a pre-tax
gain of approximately $1.8 million.
Other operating expenses increased $722,000 or 3.5% for the six
months ended June 30, 1996 and $246,000 or 2.4% for the three months
ended June 30, 1996, when compared to the same periods in 1995.
Excluding the increases in salaries and benefits during the periods,
other operating expenses declined. Salaries and benefits increased
12% and 10.5% for the six and three month periods, respectively,
primarily from staffing changes (the addition of a Vice-Chairman and
Chief Executive Officer and several senior commercial and real
estate lending officers) that occured during the last half of 1995,
annual salary increases effective in late February 1996 and early
April 1996 that averaged approximately 4%, and higher pension costs.
The number of full-time equivalent employees has not changed
sustantially during the periods. Occupancy and furniture and
equipment expenses reflected no significant change during the six or
three month periods compared to the prior year. Delcines in
operating supplies relate to changes in purchasing procedures in
1996 and an emphasis on cost reduction. Professional fees increased
for the three and six month periods as a result of legal fees
related primarily to other real estate matters, and professional
fees for consultants engaged to review the Company's operations.
The substantial decline in deposit insurance expense related to the
change in the FDIC assessment rate. Advertising expenses increased
in 1996 as additional media advertising has been implemented.
Income Taxes
The Company had income tax expense of $1,868,000 for the second
quarter of 1996 compared to $1,440,000 for the same period in 1995.
The year-to-date tax expense and effective tax rate were $3,919,000
and 32.8% for 1996, respectively and $2,718,000 and 31.1% for 1995,
respectively. The increase in the effective rate is attributable to
the smaller proportion of tax free income to the increased level of
income.
B. FINANCIAL CONDITION
Total Assets
Total assets increased approximately $73 million from December 31,
1995 to June 30, 1996, while average assets increased $121,593,000
or 10.2% to $1,315,614,000 for the second quarter of 1996 compared
to the last quarter of 1995. When comparing averages for the first
six months of 1996 to the comparable period in 1995, earning assets
increased approximately $137 million to $1,222,505,000. Loans
increased $59 million or 8.5% and short-term liquid assets, federal
funds sold and resale agreements, increased $91.6 million. This
growth was funded primarily by increases in deposits, ($15 million)
repurchase agreements ($99.2 million) and non-interest bearing
liabilities ($17.4 million) and a decrease in securities of $14
million.
Nonperforming Loans and Assets
A summary of non-performing loans and assets follows:
Dollars in thousands June 30, 1996 December 31, 1995
Loans accounted for on a non-
accrual basis $2,589 $14,301
Loans contractually past due
ninety days or more as to
interest or principal payments 1,193 842
Total non-performing loans 3,782 15,143
Other real estate held for sale 12,941 1,085
Total non-performing assets $16,723 $16,228
Non-performing loans to total
loans .49% 2.02%
Non-performing assets to total
assets 1.21% 1.24%
Allowance for loan losses to
non-performing loans 248.44% 61.53%
Loans classified as impaired at June 30, 1996 aggregated
$2,589,000 and included all non-accrual loans. At December 31,
1995, impaired loans aggregated $14,328,000.
In April 1996, the Company obtained from bankruptcy court, title
to properties related to $11.9 million of non-performing loans at
December 31, 1995. The carrying value of these properties and other
properties acquired from the bankruptcy court and transferred to
other real estate owned was approximately $15.2 million. At June
30, 1996, the carrying value of these properties has been reduced to
$12.6 million as a result of property sales. As of late July, 1996,
the Company has contracts for additional property sales, expected to
close in 1996, that will reduce the real estate carrying value by
approximately $3.4 million. As of August 14, 1996, the Company
entered into an additional sales contract for a portion of these
properties with a carrying value of approximately $1.5 million.
This contract is contingent on zoning changes which are not expected
to be resolved until the middle of 1997. These properties had
previously been adjusted to fair value based on recent appraisals
and current contracts support appraised values.
The Company considers the level of non-performing loans in its
evaluation of the adequacy of the allowance for loan losses.
C. LIQUIDITY AND INTEREST SENSITIVITY
Liquidity represents the Company's ability to generate cash or
otherwise obtain funds at a reasonable price to satisfy commitments
to borrowers as well as demands of depositors. The loan and
securities portfolios are managed to provide liquidity through
maturity or payments related to such assets.
Interest rate sensitivity management is managing the difference or
gap between rate sensitive assets and rate sensitive liabilities to
minimize the impact of changing interest rates on profitability and
allow for adequate liquidity.
The Company's adjusted one year cumulative interest sensitivity
gap was (3.23%) at June 30, 1996 compared to 6.76% at December 31,
1995. The cumulative interest sensitivity gap through 90 days was
4.60% at June 30, 1996 compared to 10.97% at December 31, 1995.
Interest rate swap contracts with notional amounts aggregating $150
million, with a remaining weighted average life of 3.6 years, that
pay the floating prime rate for the right to receive a weighted
average fixed of 8.56%, have been utilized to supplement on-balance
sheet strategies to reduce the Company's sensitivity to interest
rate changes. At June 30, 1996 and December 31, 1995, the aggregate
fair value of interest rate swap contracts was approximately
($3,121,000) and $2,444,000, respectively.
The parent company's liquidity depends primarily on the dividends
paid to it as the sole shareholder of the Mid-America Bank of
Louisville and Trust Company.
D. CAPITAL RESOURCES
At June 30, 1996 shareholders' equity totaled $134,012,000, an
increase of $1,062,000 since December 31, 1995. The increase is
attributed to net income less dividends, net of depreciation in the
value of securities available for sale of $4,554,000.
<PAGE>
<TABLE>
<CAPTION>
Company Company Minimum Required
June 30, 1996 December 31, 1995
<S> <C> <C> <C>
Leverage Ratio 9.75% 9.86% 3.00%
Tier I risk based capital ratio 14.78% 14.90% 4.00%
Total risk based capital ratio 15.80% 15.97% 8.00%
</TABLE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The regular annual meeting of shareholders of Mid-America
Bancorp was held on April 18, 1996.
(b) Proxies for the meeting were solicited pursuant to Section
14(a) of the Securities Exchange Act of 1934 and there was no
solicitation in opposition to management's solicitations. All
of management's nominees for directors were elected.
(c) The following item was submitted to a vote of security
holders as follows:
(1) The shareholders approved the election of the following
persons as directors of Mid-America Bancorp.
For Withheld
Donald G. McClinton 8,096,768 195,226
John S. Palmore 8,092,810 199,184
Woodford R. Porter, Sr. 8,098,658 193,336
Raymond L. Sales 8,091,619 200,375
Thomas E. Sandefur, Jr. 8,083,714 208,280
Jerome J. Pakenham 8,102,678 189,316
R.K. Guillaume 8,088,886 203,108
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None
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.
Mid-America Bancorp
(Registrant)
Date: August 9, 1996 By:
Steven Small
Executive Vice President and
Chief Financial Officer
Date: August 9,1996 By:
Orson Oliver
President
INDEX TO EXHIBITS
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<PERIOD-TYPE> 3-MOS
<CASH> 36,364
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 204,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 308,172
<INVESTMENTS-CARRYING> 16,632
<INVESTMENTS-MARKET> 16,802
<LOANS> 766,912
<ALLOWANCE> (9,396)
<TOTAL-ASSETS> 1,387,263
<DEPOSITS> 910,368
<SHORT-TERM> 202,453
<LIABILITIES-OTHER> 67,845
<LONG-TERM> 72,585
0
0
<COMMON> 25,321
<OTHER-SE> 108,691
<TOTAL-LIABILITIES-AND-EQUITY> 1,387,263
<INTEREST-LOAN> 18,119
<INTEREST-INVEST> 4,691
<INTEREST-OTHER> 2,213
<INTEREST-TOTAL> 25,023
<INTEREST-DEPOSIT> 7,461
<INTEREST-EXPENSE> 11,942
<INTEREST-INCOME-NET> 13,081
<LOAN-LOSSES> 104
<SECURITIES-GAINS> 8
<EXPENSE-OTHER> 10,433
<INCOME-PRETAX> 5,575
<INCOME-PRE-EXTRAORDINARY> 5,575
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,707
<EPS-PRIMARY> 0.40
<EPS-DILUTED> 0.40
<YIELD-ACTUAL> 4.37
<LOANS-NON> 2,589
<LOANS-PAST> 1,193
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 19,098
<ALLOWANCE-OPEN> 9,318
<CHARGE-OFFS> 150
<RECOVERIES> 124
<ALLOWANCE-CLOSE> 9,396
<ALLOWANCE-DOMESTIC> 9,396
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
