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 quarterly period ended March 31, 1998
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 Identification 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.
April 30, 1998: 9,916,378 shares of common stock, no par value
MIDAMERICA BANCORP
PART I. FINANCIAL INFORMATION
The consolidated financial statements of MidAmerica 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 - March 31, 1998 and December 31, 1997
Consolidated statements of income - three months ended March 31, 1998
and 1997
Consolidated statements of changes in shareholders' equity - three months
ended March 31, 1998 and 1997
Consolidated statements of comprehensive income - three months ended
March 31, 1998 and 1997
Consolidated statements of cash flows - three months ended March 31, 1998
and 1997
Notes to consolidated financial statements
CONSOLIDATED BALANCE SHEETS
In thousands, except share and per share amounts
Unaudited
<TABLE>
<CAPTION>
March 31 December 31
----------- -----------
1998 1997
ASSETS ----------- -----------
<S> <C> <C>
Cash and due from banks $28,126 $29,002
Federal funds sold 8,100 16,900
Securities purchased under agreements to resell 178,000 --
Securities available for sale, amortized cost
of $314,728 (1998) and $409,497 (1997) 318,842 414,721
Securities held to maturity, market value
of $3,498 (1998) and $108,321 (1997) 3,497 108,178
Loans, net of unearned income 904,064 891,075
Allowance for loan losses (9,175) (9,209)
----------- -----------
Loans, net 894,889 881,866
Premises and equipment 21,306 21,757
Other assets 31,807 37,155
----------- -----------
TOTAL ASSETS $1,484,567 $1,509,579
=========== ===========
LIABILITIES
Deposits:
Non-interest bearing $123,065 $140,092
Interest bearing 756,201 738,737
----------- -----------
Total deposits 879,266 878,829
Securities sold under agreements to repurchase 330,309 284,500
Federal funds purchased 625 --
Advances from the Federal Home Loan Bank 59,716 63,165
Gift certificates and money orders
outstanding 34,486 104,609
Accrued expenses and other liabilities 21,778 22,767
----------- -----------
TOTAL LIABILITIES 1,326,180 1,353,870
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 - 9,900,488 shares (1998)
and 9,878,803 shares (1997) 27,459 27,399
Additional paid-in capital 115,433 115,182
Retained earnings 12,821 9,773
Accumulated other comprehensive income 2,674 3,355
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 158,387 155,709
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,484,567 $1,509,579
=========== ===========
See notes to consolidated financial statements.
/TABLE
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
In thousands, except per share amounts
Unaudited
<TABLE>
<CAPTION>
Three months ended
March 31
------------------
1998 1997
-------- --------
<S> <C> <C>
INTEREST INCOME:
Interest and fees on loans $20,792 $18,838
Interest and dividends on:
Taxable securities 4,411 4,817
Tax-exempt securities 709 595
Interest on federal funds sold 144 290
Interest on securities purchased under
agreements to resell 1,960 1,851
-------- --------
Total interest income 28,016 26,391
-------- --------
INTEREST EXPENSE:
Interest on deposits 8,530 7,900
Interest on federal funds purchased
and securities sold under
agreements to repurchase 3,817 3,544
Interest on Federal Home
Loan Bank advances 946 1,053
-------- --------
Total interest expense 13,293 12,497
-------- --------
Net interest income before
provision for loan losses 14,723 13,894
Provision for loan losses -- --
-------- --------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 14,723 13,894
-------- --------
NON-INTEREST INCOME:
Income from trust department 540 285
Service charges on deposit accounts 1,268 1,209
Gift certificate and money order fees 50 674
Securities gains 27 76
Other 2,470 1,104
-------- --------
Total non-interest income 4,355 3,348
-------- --------
OTHER OPERATING EXPENSES:
Salaries and employee benefits 6,707 6,156
Occupancy expense 736 771
Furniture and equipment expenses 1,043 1,176
Other 3,298 2,589
-------- --------
Total other operating expenses 11,784 10,692
-------- --------
Income before income taxes 7,294 6,550
Income tax expense 2,169 2,033
-------- --------
NET INCOME $5,125 $4,517
======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 9,889 9,735
Diluted 10,122 9,851
NET INCOME PER COMMON SHARE
Basic $0.52 $0.46
Diluted 0.51 0.46
See notes to consolidated financial statements.
/TABLE
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
In thousands, except per share amounts
Unaudited
<TABLE>
<CAPTION>
Three months ended
March 31
----------------------
1998 1997
---------- ----------
<S> <C> <C>
Balance, January 1 $155,709 $140,638
Net income 5,125 4,517
Other comprehensive income (loss), net of tax (681) (2,018)
Cash dividends declared - $.21 (1998)
and $.185 (1997) per share (2,077) (1,797)
Stock options exercised, including related tax benefits 311 803
---------- ----------
Balance, March 31 $158,387 $142,143
========== ==========
See notes to consolidated financial statements.
</TABLE>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
In Thousands
Unaudited
<TABLE>
<CAPTION>
Three months
ended March 31
----------------------
1998 1997
---------- ----------
<S> <C> <C>
Net Income $5,125 $4,517
Other comprehensive income (loss), net of tax:
Unrealized gains (losses)
on securities available for sale:
Unrealized holding gains (losses) arising
during the period (703) (2,046)
Less reclassification adjustment for gains
included in net income (18) (49)
---------- ----------
(721) (2,095)
Pension liability adjustment 40 77
---------- ----------
Other comprehensive income (loss) (681) (2,018)
---------- ----------
COMPREHENSIVE INCOME $4,444 $2,499
========== ==========
See notes to consolidated financial statements.
/TABLE
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
In Thousands
Unaudited
<TABLE>
<CAPTION> Three Months
ended March 31
----------------------
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES: ---------- ----------
<S> <C> <C>
Net income $5,125 $4,517
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, amortization and accretion, net 1,094 895
Federal Home Loan Bank stock dividend (276) (248)
Gain on sales of securities (27) (76)
Gain on sales of other real estate (624) (10)
Gain on sale of subsidiary (436) --
Deferred taxes (2,151) (163)
Increase in interest receivable (506) (805)
Decrease (increase) in other assets 988 (5,130)
Increase in other liabilities 2,679 1,723
---------- ----------
Net cash provided by operating activities 5,886 703
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities available for sale (24,060) (37,945)
Proceeds from maturities of
securities available for sale 105,885 20,419
Proceeds from sales of securities available for sale 7,103 12,998
Purchases of securities held to maturity (997) (4,358)
Proceeds from maturities of securities held to maturity 75,000 60,000
Net proceeds from sale of subsidiary 8,134 --
Increase in customer loans (13,208) 21,340
Proceeds from sales of other real estate 1,552 15
Payments for purchases of premises and equipment (912) (196)
---------- ----------
Net cash provided by investing activities 158,497 72,273
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits 437 (789)
Net increase (decrease) in securities sold
under agreements to repurchase 45,809 (12,996)
Net increase (decrease) in federal funds purchased 625 (3,000)
Repayment of advances from the Federal Home Loan Bank (3,449) (969)
Decrease in gift certificates and money
orders outstanding (37,605) (22,284)
Stock options exercised 221 714
Dividends paid (2,077) (1,797)
---------- ----------
Net cash provided by (used in) financing activities 3,961 (41,121)
---------- ----------
Net increase in cash and cash equivalents 168,324 31,855
Cash and cash equivalents at January 1 45,902 161,084
---------- ----------
Cash and cash equivalents at March 31 $214,226 $192,939
========== ==========
See notes to consolidated financial statements.
/TABLE
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.The accounting and reporting policies of MidAmerica 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 1997 Annual Report and
Form 10-K filed with the Securities and Exchange Commission. The
consolidated financial statements reflect all adjustments (consisting
only of adjustments of a normal recurring nature) which are, in the
opinion of management, necessary for a fair presentation of financial
condition and results of operating for the interim periods.
2.The Company adopted FASB Statement No. 130, "Reporting
Comprehensive Income", during the first quarter of 1998.
The statement establishes standards for reporting and
display of comprehensive income and its components.
Comprehensive income includes net income and other
comprehensive income, which for the Company includes
unrealized gains and losses on securities available for
sale and a minimum pension liability adjustment.
3.The following table presents the numerators (net income) and
denominators (average shares outstanding) for the basic and
diluted net income per share computations for the three months
ended March 31:
<TABLE>
<CAPTION>
In thousands, except per share amounts
1998 1997
--------- ---------
<S> <C> <C>
Net income, basic and diluted $5,175 $4,517
========= =========
Average shares outstanding 9,889 9,735
Effect of dilutive securities 233 116
Average shares outstanding including --------- ---------
dilutive securities 10,122 9,851
========= =========
Net income per share, basic $0.52 $0.46
========= =========
Net income per share, diluted $0.51 $0.46
========= =========
</TABLE>
Appropriate share information in the consolidated financial statements
has been adjusted for the 3% stock dividend of November 1997.
4.The amortized cost and market value of securities available for
sale are summarized as follows:
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
-------------------- -------------------
In thousands Amortized Market Amortized Market
Cost Value Cost Value
--------- --------- --------- --------
<S> <C> <C> <C> <C>
U.S. Treasury and
U.S. government agencies $58,058 $58,595 $156,040 $156,654
Collateralized mortgage obligations 186,337 187,008 183,792 185,474
States and political subdivisions 50,745 53,642 50,352 53,272
Corporate obligations 1,756 1,765 1,757 1,765
Equity securities 17,832 17,832 17,556 17,556
--------- --------- --------- --------
$314,728 $318,842 $409,497 $414,721
========= ========= ========= ========
</TABLE>
The amortized cost and market value of securities held to maturity are
summarized as follows:
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
-------------------- -------------------
In thousands Amortized Market Amortized Market
Cost Value Cost Value
--------- --------- --------- --------
<S> <C> <C> <C> <C>
U.S. Treasury and
U.S. government agencies $3,497 $3,498 $108,078 $108,221
Corporate obligations -- -- 100 100
--------- --------- --------- --------
$3,497 $3,498 $108,178 $108,321
========= ========= ========= ========
</TABLE>
5.Activity in the allowance for loan losses follows:
<TABLE>
<CAPTION>
March 31, December 31,
In thousands 1998 1997
--------- ---------
<S> <C> <C>
Balance, January 1 $9,209 $9,167
Loans charged-off (67) (621)
Recoveries 33 363
--------- ---------
($34) ($258)
Provision for loan losses -- 300
--------- ---------
Balance, end of period $9,175 $9,209
========= =========
</TABLE>
6.Significant components of other non-interest income and operating
expenses are set forth below:
<TABLE>
<CAPTION>
Three Months Ended
In thousands March 31
-------------------
1998 1997
--------- --------
<S> <C> <C>
Other non-interest income:
Gain on sale of money order subsidiary $436 --
Gains on sales of other real estate 624 10
Money order processing fees 415 --
Other 995 1,094
--------- --------
$2,470 $1,104
========= ========
<CAPTION>
Three Months Ended
In thousands March 31
-------------------
1998 1997
--------- --------
<S> <C> <C>
Other operating expenses:
Advertising and marketing $510 $361
Operating supplies 429 655
Professional fees 696 201
Taxes - Bank, property and other 407 427
Other 1,256 945
--------- --------
$3,298 $2,589
========= ========
</TABLE>
7.On January 8, 1998, the Company completed the previously announced sale of
MidAmerica Money Order Company (MAMO), a wholly-owned subsidiary, to
MoneyGram Payment Systems, Inc. (MoneyGram) for $15.6 million in cash, a
$5 million premium over book value. As a part of the agreement with
MoneyGram, the Company will provide data processing and banking services to
MAMO for at least four years. Under the provisions of the sales contract
and the processing agreement, a gain of $436,000 was recognized in January,
1998; $4.6 million of the premium was deferred and will be amortized
to income in 1998 and the following three years to provide for normal
processing fees over the term of the processing agreement. The Company may
recognize an additional gain in 1998 of up to $475,000 if certain other
conditions are met.
At December 31, 1997, MAMO had assets of $43 million and outstanding gift
certificates and money orders of $32.5 million. Excluding the mall gift
certificate program, retained by the Company, MAMO had fees and interest
income of $4.4 million, operating expenses of $3.1 million and net income of
$850,000 in 1997.
8.On February 23, 1998, the Board of Directors of the Company adopted a
shareholders right plan. Pursuant to that Plan, the Board declared a
dividend distribution of one right for each outstanding share of the
Company's common stock. Under certain conditions, each right entitles the
registered holder to purchase from the Company a unit consisting of
one-hundredth of a share of Junior Participation Preferred Stock at a
purchase price of $75.00 per unit, subject to adjustment. The Company can
redeem the rights for $0.01 per right at any time prior to their becoming
exercisable. The Rights expire on March 13, 2008, unless earlier redeemed
by the Company.
The rights become exercisable upon the earlier of (i) the tenth day following
a public announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the outstanding shares of
common stock of the Company or (ii) the tenth business day following the
commencement of the tender offer or exchange offer that would result in a
person or group beneficially owning 15% or more of such outstanding shares of
common stock of the Company.
After an Acquiring Person acquires 15% or more of the common stock of the
Company, (i) each right not owned by an Acquiring Person will become a right
to receive, upon exercise, common stock of the Company having a value equal
to two times the exercise price of the right; and (ii) all rights that are
owned by any Acquiring Person will be null and void.
If the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation or 50% or
more of the Company's assets or earning power is sold or transferred, each
holder of a right shall thereafter have the right to receive, upon exercise,
common stock of the acquiring company having a value equal to two times the
exercise price of the right.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This item discusses the results of operations for the Company for the
three months ended March 31, 1998, and compares this period with the same
period of the previous year. In addition, the discussion describes the
significant changes in the financial condition of the Company that have
occurred during the first three months of 1998 compared to December 31, 1997.
This discussion should be read in conjunction with the consolidated financial
statements and accompanying notes presented in Part I, Item 1 of this report.
RESULTS OF OPERATIONS
Net income for the quarter ended March 31, 1998 was $5,125,000 or $0.51
per share on a diluted basis compared to $4,517,000 or $0.46 per share on a
diluted basis for the same period last year. Net income for the quarter
ended March 31, 1998, when compared to the same period in 1997, increased
13.5% and diluted net income per share increase 10.9%.
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 rate of interest earned
on earning assets and the average rate of interest expensed 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 months ended March 31, 1998 and 1997.
Dollars in thousands Three Months Ended
March 31
------------------------
1998 1997
---------- -----------
Total interest income $28,016 $26,391
Tax equivalent adjustment 449 425
-------- --------
Tax equivalent interest income 28,465 26,816
Total interest expense 13,293 12,497
-------- --------
Tax equivalent net interest income $15,172 $14,319
======== ========
Average rate on earning assets 8.35% 8.23%
Average rate on interest bearing liabilities 4.86% 4.80%
Net interest spread, annualized 3.49% 3.43%
Net interest margin, annualized 4.45% 4.39%
Average earning assets $1,387,228 $1,323,890
Average interest bearing liabilities $1,109,544 $1,056,681
Tax equivalent net interest income increased $853 thousand or
approximately 6% for the three months ended March 31, 1998, compared to the
first quarter in 1997. Volume increases contributed to a majority of the
increase in net interest income, with average earning assets increasing $63
million or 5%. The net interest spread and net interest margin both increased
slightly during the first quarter of 1998 compared to the first quarter in
1997. The average rate on earning assets increased 12 basis points while the
costs of interest bearing liabilities increased only 6 basis points.
Allowance for Loan Losses and Provision for Loan Losses
The allowance for loan losses is maintained at a level adequate to absorb
estimated probable 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 judgment,
deserve current recognition. Based on this process, the allowance for loan
losses was considered adequate and no provision for loan losses was considered
necessary for the three months ended March 31, 1998 and 1997. See
"Non-Performing Loans and Assets". The allowance for loan losses is
established by charges to operating earnings and reduced by charge-offs, net
of recoveries.
An analysis of the changes in the allowance for loan losses and selected
ratios follows:
Dollars in thousands Three Months Ended
March 31
------------------
1998 1997
------- -------
Balance at January 1 $9,209 $9,167
Provision for loan losses -- --
Loan charge-offs, net (34) (70)
------- -------
Balance March 31 $9,175 $9,097
======= =======
Average loans, net of unearned income $892,091 $800,478
Provision for loan losses to average loans -- --
Allowance for loan losses to average loans 1.03% 1.14%
Allowance for loan losses to period-end loans 1.01% 1.16%
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 months ended March 31, 1998
and 1997:
Three months ended
In thousands March 31
------------------
1998 1997
------- -------
Non-Interest Income:
Income from trust department $540 $285
Service charges on deposit accounts 1,268 1,209
Gift certificate and money order fees 50 674
Securities gains 27 76
Other 2,470 1,104
------- -------
Total non-interest income $4,355 $3,348
======= =======
Other Operating Expenses:
Salaries and employee benefits $6,707 $6,156
Occupancy expenses 736 771
Furniture and equipment expenses 1,043 1,176
Advertising and marketing 510 361
Operating supplies 429 655
Professional fees 696 201
Taxes-Bank, property and other 407 427
Other 1,256 945
------- -------
Total other operating expenses $11,784 $10,692
======= =======
In the first quarter of 1998, non-interest income included gains on other
real estate sales of $624,000 and a gain on the sale of the money order
subsidiary of $436,000. Also, in the first quarter of 1998, the Company had
processing fee income of $415,000 from the purchaser of the money order
subsidiary. This new source of processing income, combined with expense
reductions, offsets the decline in gift certificate and money order fees of
$624,000. Excluding the aforementioned gains and the impact of the money
order subsidiary sale in 1998, and a branch sale gain and other real estate
gains in the first quarter of 1997, the remaining components of non-interest
income increased $325,000 or 10%. This increase relates primarily to the
increase in Trust Department fees of $255,000 and a 5% increase in service
charges on deposits. Trust Department income increased as a result of
increased assets under management after the Trust Department was expanded in
the second quarter of 1997, with the addition of several trust officers.
Other operating expenses increased 10% or $1,092,000 in the first quarter
of 1998 compared to the first quarter of 1997. Over half the increase was
attributable to the $551,000 increase in salaries and employee benefits, which
increased primarily as a result of normal salary increases effective in April
1997 and the cost of the Company's Year 2000 staff retention program. There
were no significant changes in staffing levels. The declines in furniture and
equipment expenses and operating supplies expense are primarily attributable
to the absence of money order subsidiary expenses, subsequent to the sale.
Advertising and marketing expense increased $149,000 as the Company has
expanded its advertising program. Professional fees increased $495,000 as a
result of legal fees associated with the money order subsidiary sale, legal
and expert witness fees related to intensive discovery efforts in ongoing
litigation and consulting fees related to Year 2000 hardware and software
installations.
Income Taxes
The Company had income tax expense of $2,169,000 for the first quarter of
1998 compared to $2,033,000 for the same period in 1997, which yielded
effective tax rates of 29.7% for 1998 and 31.0% for 1997.
FINANCIAL CONDITION
Average assets were $1,457,852,000 for the first quarter of 1998, an
increase of $64,213,000 or 4.4% compared to the last quarter of 1997. Actual
total assets decreased approximately $25 million from December 31, 1997 to
March 31, 1998. Included in the increase in average earning assets are
increases in commercial loans of $21 million and retail loans of $10 million,
and increases in securities and short-term liquid assets of $33 million. The
earning asset growth was funded by a $20 million increase in checking and
savings account balances, an $11 million increase in time deposits and a $51
million increase in customer repurchase agreements.
Nonperforming Loans and Assets
A summary of non-performing loans and assets follows:
Dollars in thousands March 31, 1998 December 31, 1997
Loans accounted for on a non-
accrual basis $1,685 $1,678
Loans contractually past due
ninety days or more as to
interest or principal payments 1,137 788
------ ------
Total non-performing loans 2,822 2,466
Other real estate held for sale 15,534 16,186
------ ------
Total non-performing assets $18,356 $18,652
====== ======
Non-performing loans to total loans .31% .28%
Non-performing assets to total assets 1.24% 1.24%
Allowance for loan losses to non-
performing loans 325% 373%
Loans classified as impaired at March 31, 1998 aggregated $1,685,000 and
included all non-accrual loans. At December 31, 1997, impaired loans
aggregated $1,670,000.
Other real estate aggregated $15.5 million at March 31, 1998 and was
principally comprised of properties acquired in settlement of problem real
estate development loans in April 1996, and a completed condominium project
acquired in settlement of loans in November 1997. The carrying value of real
estate development property has been substantially reduced through sales from
the original carrying value of $15.2 million to $5.8 million at March 31,
1998. In January 1998, a portion of this property was sold and a gain of
$624,000 was recognized. The Company has contracts for additional property
sales, expected to close later in 1998, that will further reduce the carrying
value by $400,000 and result in additional gains of $600,000. In addition to
these contracts, the Company has granted options covering carrying values of
$2.1 million of this development property. Sales efforts on the remaining
development property are expected to accelerate in the second half of 1998
after a fronting highway is widened to four lanes. The condominium project
involves 32 (44 originally) completed and readily marketable units and 7.5
acres of adjacent developed land. Two additional unit sales are scheduled to
close in the second quarter of 1998. This riverfront development has a
carrying value of $8.4 million. Management intends to continue to provide for
the orderly development and marketing of these properties in a manner designed
to maximize the value thereof to the Company.
The Company considers the level of nonperforming loans in its evaluation
of the adequacy of the allowance for loan losses.
LIQUIDITY
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.
The parent Company's liquidity depends primarily on the dividends paid to
it as the sole shareholder of Bank of Louisville.
CAPITAL RESOURCES
At March 31, 1998 shareholders' equity totaled $158,387,000, an increase
of $2.7 million since December 31, 1997. Since December 31, 1997, the
Company's available for sale securities portfolio had unrealized losses, net
of taxes, that reduced shareholders' equity $721,000.
The Company's capital ratios exceed minimum regulatory requirements and
are as follows:
Company Company Minimum
March December Required
31, 1998 31, 1997
Leverage Ratio 10.6% 11.1% 4.00%
Tier I risk based capital ratio 14.8% 13.8% 4.00%
Total risk based capital ratio 15.7% 14.7% 8.00%
YEAR 2000
The Company's program to prepare its computer systems and applications
for the year 2000 is on schedule for testing by the end of 1998 and completion
by the end of the second quarter of 1999.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's March 31, 1998 analysis of the impact of changes in
interest rates on net interest income over the next 12 months indicates no
significant changes in the Company's exposure to interest rate changes since
December 31, 1997. The table below illustrates the simulation analysis of the
impact of a 50 or 100 basis point upward or downward movement in interest
rates. The impact of the rate movement was simulated as if rates changed
immediately from March 31, 1998 levels, and remained constant at those levels
thereafter.
Movement in interest
rates from March 31, 1998, rates
Increase Decrease
+50bp +100bp -50bp -100bp
Net interest income increase
(decrease) (in 1000's) $(626) $(550) $(89) $66
Net income per share increase
(decrease) $(0.04) $(0.04) $(0.01) $0.00
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10 Material Contracts - Employment agreement between the Company
and William J. Hornig, dated January 1, 1998.
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on March 3, 1998, and reported
under Item 5, Other Events, the declaration of one Junior Participating
Preferred Stock Purchase Right on each outstanding share of the Company's
Common Stock, as set forth in the Rights Agreement dated as of February 23,
1998.
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: May 8, 1998 By:/s/ Steven Small
Steven Small
Executive Vice President and
Chief Financial Officer
Date: May 8, 1998 By:/s/ R.K. Guillaume
R.K. Guillaume
Chief Executive Officer
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 1st day of
January, 1998 by and between MID AMERICA BANCORP, INC., a
Kentucky corporation and MID AMERICA BANK OF LOUISVILLE & TRUST
COMPANY, a Kentucky Combined Bank and Trust Company, (together
with their successors and assigns permitted under this Agreement,
the "Companies"), and WILLIAM J. HORNIG (the "Executive").
W I T N E S S E T H:
WHEREAS, the Companies and the Executive are parties to an
Agreement dated as of February 10, 1995, covering the employment
relationship of Executive with Companies, and
WHEREAS, the Parties desire to cancel that Agreement and
replace it in its entirety with this Employment Agreement (this
"Agreement").
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable
consideration, the receipt of which is mutually acknowledged, the
Companies and the Executive (individually a "Party" and together
the "Parties") agree as follows:
1. Definitions.
(a) "Affiliate" of a person or other entity shall mean a
person or other entity that directly or indirectly
controls, is controlled by, or is under common control
with the person or other entity specified.
(b) Except as provided otherwise in Section 8 hereof, "Base
Salary" shall mean the salary provided for in Section 5
below or any increased salary granted to the Executive
pursuant to Section 5.
(c) "Board" shall mean the Boards of Directors of the
Companies.
(d) "Cause" shall mean:
(i) The Executive is convicted of a felony; or
(ii) The Executive is guilty of willful gross neglect
or willful gross misconduct in carrying out his
duties under this Agreement, resulting, in either
case, in material economic harm to the Companies,
unless the Executive believed in good faith that
such act or nonact was in the best interests of
such Company.
(e) A "Change of Control" shall mean the occurrence of any
one of the following events:
(i) Any "person," as such term is used in Sections
3(a)(9) and 13(d)of the Securities Exchange Act of
1923, after the date hereof becomes a "beneficial
owner," as such term is used in Rule 13d-3
promulgated under that Act, of 20% or more of the
Voting Stock of the Companies;
(ii) The majority of either Board consists of
individuals other than Incumbent Directors, which
term means the members of the Board on the date of
this Agreement; provided that any person becoming
a director subsequent to such date whose election
or nomination for election was supported by
two-thirds of the directors who then comprised the
Incumbent Directors shall be considered to be an
Incumbent Director;
(iii)The Companies adopt any plan of liquidation
providing for the distribution of all or
substantially all of its assets;
(iv) All or substantially all of the assets or business
of the Companies is disposed of pursuant to a
merger, consolidation or other transaction (unless
the shareholders of such Company immediately prior
to such merger, consolidation or other transaction
beneficially own, directly or indirectly, in
substantially the same proportion as they owned
the Voting Stock of such Company, all of the
Voting Stock or other ownership interests of the
entity or entities, if any, that succeed to the
business of such Company); or
(v) The Companies combine with another company and is
the surviving corporation but, immediately after
the combination, the shareholders of such Company
immediately prior to the combination hold,
directly or indirectly, 50% or less of the Voting
Stock of the combined company (there being
excluded from the number of shares held by such
shareholders, but not from the Voting Stock of the
combined company, any shares received by
Affiliates of such other company in exchange for
stock of such other company).
(f) "Constructive Termination Without Cause" shall mean a
termination of the Executive's employment at his
initiative as provided in Section 8(d) below following
the occurrence, without the Executive's prior written
consent, of one or more of the following events (except
in consequence of a prior termination):
(i) A reduction in the Executive's then current Base
Salary or the termination or material reduction of
any employee benefit or perquisite enjoyed by him;
(ii) The failure to elect or reelect the Executive to
any of the positions described in Section 4 below
or removal of him from any such position;
(iii)A material diminution in the Executive's
duties or the assignment to the Executive of
duties which are materially inconsistent with his
duties or which materially impair the Executive's
ability to function as the Executive Vice
President and Chief Executive Officer or any other
office to which he may be elected or appointed:
(iv) The failure to continue the Executive's
participation in any incentive compensation plan
unless a plan providing a substantially similar
opportunity is substituted;
(v) The relocation of a Companies' principal office,
or the Executive's own office location as assigned
to him by the Companies, to a location outside of
the metropolitan area of Louisville, Kentucky; or
(vi) The failure of the Companies to obtain the
assumption in writing of its obligation to perform
this Agreement by any successor to all or
substantially all of the assets of such Company
within 45 days after a merger, consolidation, sale
or similar transaction.
(g) "Disability" shall mean the Executive's inability to
substantially perform his duties and responsibilities
under this Agreement for a period of 180 consecutive
days.
(h) "Term of Employment" shall mean the period specified in
Section 3 below.
2. Cancellation of Old Agreement.
The Agreement between the Parties entered into as of
February 10, 1995, is hereby revoked and canceled in its
entirety.
3. Term of Employment.
The employment of the Executive will continue for thirty-six
months from the date hereof or until the earlier termination of
his employment in accordance with the terms of this Agreement.
Thereafter, if not so terminated, employment shall be renewed for
successive thirty-six month periods or until the earlier
termination in accordance with the terms of this Agreement.
4. Position. Duties and Responsibilities.
(a) During the term of Employment, the Executive shall
continue to be employed as Executive Vice President of
the Companies with duties commensurate with that
position. The Executive, in carrying out his duties
under this Agreement, shall report to the Chief
Executive Officer.
(b) Anything herein to the contrary notwithstanding,
nothing shall preclude the Executive from (i) serving
on the boards of directors of a reasonable number of
other corporations (except Executive will not serve on
the board of any other financial institution) or the
boards of a reasonable number of trade associations
and/or charitable organizations, (ii) engaging in
charitable activities and community affairs, and (iii)
managing his personal investments and affairs, provided
that such activities do not materially interfere with
the proper performance of his duties and
responsibilities as the Companies' Executive Vice
President or any other office to which he may be
elected or appointed.
5. Base Salary.
The Executive shall be paid an annualized Base Salary,
payable in accordance with the regular payroll practices of the
Companies, of $123,200. The Base Salary shall be reviewed no less
frequently than annually for increase at the sole discretion of
the Board and its Nominating and Executive Compensation
Committee.
6. Employee Benefit Programs.
During the Term of Employment, the Executive shall be
entitled to participate in all employee incentive, pension and
welfare benefit plans and programs made available to the
Companies' senior level executives or to its employees generally,
as such plans or programs may be in effect from time to time,
including without limitation, annual stock option grant, ESOP,
bonus, pension, profit sharing, savings and other retirement
plans or programs, medical, dental, hospitalization, short-term
and long-term disability and life insurance plans, accidental
death and dismemberment protection, travel accident insurance,
and any other pension or retirement plans or programs and any
other employee incentive compensation plan, employee welfare
benefit plans or programs that may be sponsored by the Companies
from time to time, including any plans that supplement the above-
listed types of plans or programs, whether funded or unfunded.
7. Reimbursement of Business and Other Expenses.
The Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this agreement
and the Companies shall promptly reimburse him for all business
expenses incurred in connection with carrying out the business of
the Companies, subject to documentation in accordance with the
Companies' policy.
8. Termination of Employment.
(a) Termination for Cause. In the event the Companies
terminate the Executive's employment for Cause, he
shall be entitled to:
(i) The Base Salary through the date of the
termination of his employment for Cause;
(ii) Any incentive awards earned (but not yet paid);
(iii)Any pension benefit that may become due
pursuant to Section 6 above, determined as of the
date of such termination;
(iv) Other or additional benefits in accordance with
applicable plans or programs of the Companies to
the date of termination.
(b) Termination Without Cause. If the Executive's
employment is terminated without Cause other than due
to Disability or death, or there is a Constructive
Termination without Cause, the Executive shall be
entitled to:
(i) The Base Salary through the date of termination of
the Executive's employment;
(ii) The Base Salary, at the annualized rate in effect
on the date of termination of the Executive's
employment for thirty-six months following such
termination, paid in installments in accordance
with the regular pay practices of the Companies;
provided that at the Executive's option the
Companies shall pay him the present value of such
salary continuation payments in a lump sum (using
as the discount rate the Applicable Federal Rate
for short term Treasury obligations as published
by the Internal Revenue Service for the month in
which such termination occurs). For purposes of
this subsection (ii) Base Salary shall include
an annual bonus calculated by taking the average
of the bonuses of the three years preceding the
year of termination;
(iii)The balance of any incentive awards earned
(but not yet paid);
(iv) The right to exercise any stock option in full,
whether or not such right is exercisable pursuant
to the terms of the grant.
(v) Any pension benefit that may become due pursuant
to Section 6 above;
(vi) Continued accrual of credited service for the
purpose of the pension benefit provided under
Section 6 for thirty-six months;
(vii)Continued participation in all medical,
dental, hospitalization and life insurance
coverage and in other employee benefit plans or
programs in which he was participating on the date
of the termination of his employment until the
earlier of:
(A) The end of the period during which he is
receiving salary continuation payments (or in
respect of which a lump-sum severance payment
is made);
(B) The date, or dates, he receives equivalent coverage and
benefits under the plans and programs of a subsequent
employer (such coverages and benefits to be determined on
a coverage-by-coverage, or benefit-by-benefit, basis);
provided that (x) if the Executive is precluded
from continuing his participation in any employee
benefit plan or program as provided in this clause
(vii) of this Section 8(b), he shall be provided
with the after-tax economic equivalent of the
benefit provided under the plan or program in
which he is unable to participate for the period
specified in this clause (vii) of this Section
8(b), (y) the economic equivalent of any benefit
foregone shall be deemed to be the lowest cost
that would be incurred by the Executive in
obtaining such benefit himself on an individual
basis, and (z) payment of such after-tax economic
equivalent shall be made quarterly in advance; and
(viii)Immediate vesting of the Companies
contribution to his Employee Stock Option Plan
(ix) Other or additional benefits in accordance with
applicable plans and programs of the Companies to
the date of termination.
(c) Termination of Employment Following a Change in
Control. If following a Change in Control, the
Executive's employment is terminated without Cause or
there is a Constructive Termination Without Cause, the
Executive shall be entitled to the payments and
benefits provided in Section 8(b), provided that the
salary continuation payments shall be paid in a lump
sum without any discount. Also, immediately following a
Change in Control, all amounts, entitlements or
benefits in which he is not yet vested shall become
fully vested. In addition, if Executive continues in
the employ of the Companies for a period of two years
following the effective date of the Change of Control,
he may then voluntarily terminate his employment and in
such a case would receive a sum equal to three times
Base Salary. A voluntary termination under this
Section 8(c) shall be effective upon 30 days prior
notice to the Companies and shall not be deemed a
breach of this Agreement. For purposes of this Section
8(c) Base Salary shall include an annual bonus
calculated by taking the highest bonus of the three
years preceding the year of termination;
(d) Voluntary Termination. In the event of a termination
of employment by the Executive on his own initiative
other than a termination due to death or Disability or
a Constructive Termination without Cause, the Executive
shall have the same entitlements as provided in Section
8(a) for a Termination for Cause.
(e) Limitation Following a Change in Control. In the event
that the termination of the Executive's employment is
for one of the reasons set forth in Section 8(b) above
following a Change in Control, and the aggregate of all
payments or benefits made or provided to the Executive
under such Section above and under all other plans and
programs of the Companies (the "Aggregate Payment") is
determined to constitute a Parachute Payment, as such
term is defined in Section 280G(b)(2) of the Internal
Revenue Code of 1986, as amended, notwithstanding any
other provision of this Agreement to the contrary, the
aggregate amount of payments or benefits paid by the
Companies to the Executive pursuant to this Agreement,
the amount to be paid to the Executive and the time of
payment pursuant to this Section 8(e) shall be adjusted
so as to make such payments fully deductible by the
Companies. If the Parties are unable to agree upon an
Auditor to calculate such an adjustment, then the
Executive and Companies shall each select one
accounting firm and those two firms shall jointly
select the accounting firm to serve as the Auditor.
(f) Upon termination pursuant to Section 8(b), the
Executive will have the option of purchasing his
Company car for the value of such car on the books of
the Company at the time of termination, adjusted for
value of the Executives cash contribution, if any, to
the purchase of the car.
(g) No Mitigation - No Offset. In the event of any
termination of employment under this Section 8, the
Executive shall be under no obligation to seek other
employment and there shall be no offset against amounts
due the Executive under this Agreement on account of
any remuneration attributable to any subsequent
employment that he may obtain except as specifically
provided in this Section 8.
(h) Nature of Payments. Any amounts due under this Section 8 are
in the nature of severance payments considered to be reasonable
by the Companies and are not in the nature of a penalty.
9. Conditional Future Payment. In the event that Executive
retires from the employment of the Companies and there
has been no event of Termination under Section 8 hereof
(other than Voluntary Termination in connection with
retirement), Executive will receive the following,
payable in a lump sum:
(a) If Executive retires after attaining the age of 65 --
$369,600.
(b) If Executive retires before age 65 and after attaining the
age of 55 - The amount shown in Exhibit A hereof, applicable to
his age upon retirement, or
(c) If Executive is totally and permanently disabled during the
term of his employment hereunder - The amount shown in Exhibit A
applicable to his age when first determined to be totally and
permanently disabled. If Executive is determined to be totally
and permanently disabled prior to reaching age 55, he will be
paid a sum equal to the amount then accrued on the books of the
Companies for the purpose of providing for the payment schedule
reflected in Exhibit A.
(d) In no event will Executive receive both a payment pursuant
to this Section 9 and severance pay pursuant to Section 8 hereof.
10. Indemnification.
(a) The Companies agree that if the Executive is made a
party, or is threatened to be made a party, to any
action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by
reason of the fact that he is or was a director,
officer or employee of the Companies or is or was
serving at the request of the Companies as a director,
officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee
benefit plans, whether or not the basis of such
Proceeding is the Executive's alleged action in an
official capacity while serving as a director, officer,
member, employee or agent, the Executive shall be
indemnified and held harmless by the Companies to the
fullest extent permitted or authorized by the
Companies' certificates of incorporation or bylaws or,
if greater, by the laws of the State of Kentucky,
against all cost, expense, liability and loss
(including, without limitation, reasonable attorney's
fees, judgments, fines, ERISA fines, excise taxes or
penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Executive in
connection therewith, and such indemnification shall
continue as to the Executive even if he has ceased to
be a director, member, employee or agent of the
Companies or other entity and shall inure to the
benefit of the Executive's heirs, executors and
administrators. The Companies shall advance to the
Executive all reasonable costs and expenses incurred by
him in connection with a Proceeding within 20 days
after receipt by the Companies of a written request for
such advance. Such request shall include an undertaking
by the Executive to repay the amount of such advance if
it shall ultimately be determined that he is not
entitled to be indemnified against such costs and
expenses.
(b) Neither the failure of the Companies (including its
board of directors, independent legal counsel or
stockholders) to have made a determination prior to the
commencement of any proceeding concerning payment of
amounts claimed by the Executive under Section 9(a)
that indemnification of the Executive is proper because
he has met the applicable standard of conduct, nor a
determination by the Companies (including its board of
directors, independent legal counsel or stockholders)
that the Executive has not met such applicable standard
of conduct, shall create a presumption that the
Executive has not met the applicable standard of
conduct.
(c) The Companies agree to continue and maintain a
directors' and officers' liability insurance policy
covering the Executive to the extent either Company
provides such coverage for its other executive
officers.
11. Representation. The Companies represent and warrant
that they are fully authorized and empowered to enter into this
Agreement and that the performance of their obligations under
this Agreement will not violate any agreement between it and any
other person, form or organization.
12. Entire Agreement. This Agreement contains the entire
understanding and agreement between the Parties concerning the
subject matter hereof and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings,
whether written or oral, between the Parties with respect
thereto.
13. Amendment or Waiver. No provision in this Agreement
may be amended unless such amendment is agreed to in writing and
signed by the Executive and an authorized officer of the
Companies. No waiver by either Party of any breach by the other
Party of any condition or provision contained in this Agreement
to be performed by such other Party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any
prior or subsequent time. Any waiver must be in writing and
signed by the Executive or an authorized officer of the
Companies, as the case may be.
14. Severability. In the event that any provision or
portion of this Agreement shall be determined to be invalid or
unenforceable for any reason, in whole or in part, the remaining
provisions of this Agreement shall be unaffected thereby and
shall remain in full force and effect to the fullest extent
permitted by law.
15. Survivorship. The respective rights and obligations of
the Parties hereunder shall survive any termination of the
Executive's employment to the extent necessary to the intended
preservation of such rights and obligations.
16. Resolution of Disputes. Any disputes arising under or
in connection with this Agreement shall, at the election of the
Executive or the Companies, be resolved by binding arbitration,
to be held in Kentucky in accordance with the rules and
procedures of the American Arbitration Association. Judgment upon
the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. Costs of the arbitration or
litigation, including, without limitation, attorneys' fees of
both Parties, shall be borne by the Companies, provided that if
the arbitrator(s) determine that the claims or defenses of the
Executive were without any reasonable basis, each Party shall
bear his or its own costs.
17. Notices. Any notice given to a party shall be in
writing and shall be deemed to have been given when delivered
personally or sent by certified or registered mail, postage
prepaid, return receipt requested, duly addressed to the Party
concerned at the address indicated below or to such changed
address as such Party may subsequently give such notice of:
If to the Companies: Mid-America Bancorp, Inc.
P.O. Box 1101
Louisville, KY 40201-1101
Attention: Bertram W. Klein
If to the Executive: WILLIAM J. HORNIG
1710 Hawk Hill Road
LaGrange, KY 40031
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first written above.
MID-AMERICA BANCORP, INC.
By:/s/ Bertram W. Klein
Title: Chairman of the Board
MID-AMERICA BANK OF LOUISVILLE
& TRUST COMPANY
By:/s/ Bertram W. Klein
Title: Chairman of the Board
/s/ William J. Hornig
WILLIAM J. HORNIG
EXHIBIT A
Age At Conditional
Retirement Payment
65 $369,600
64 $363,834
63 $341,628
62 $320,199
61 $301,199
60 $282,816
59 $265,555
58 $249,348
57 $234,129
56 $219,840
55 $206,422
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<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<PERIOD-TYPE> 3-MOS
<CASH> 28,126
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 186,100
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 318,842
<INVESTMENTS-CARRYING> 3,497
<INVESTMENTS-MARKET> 3,498
<LOANS> 904,064
<ALLOWANCE> (9,175)
<TOTAL-ASSETS> 1,484,567
<DEPOSITS> 879,266
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0
0
<COMMON> 27,459
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<INCOME-PRETAX> 7,294
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<LOANS-PAST> 1,137
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<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<PERIOD-TYPE> 3-MOS
<CASH> 25,939
<INT-BEARING-DEPOSITS> 0
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<TRADING-ASSETS> 0
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0
0
<COMMON> 26,283
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<TOTAL-LIABILITIES-AND-EQUITY> 1,378,688
<INTEREST-LOAN> 18,838
<INTEREST-INVEST> 5,412
<INTEREST-OTHER> 2,141
<INTEREST-TOTAL> 26,391
<INTEREST-DEPOSIT> 7,900
<INTEREST-EXPENSE> 12,497
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<LOAN-LOSSES> 0
<SECURITIES-GAINS> 76
<EXPENSE-OTHER> 10,692
<INCOME-PRETAX> 6,550
<INCOME-PRE-EXTRAORDINARY> 6,550
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,517
<EPS-PRIMARY> 0.46
<EPS-DILUTED> 0.46
<YIELD-ACTUAL> 4.39
<LOANS-NON> 3,011
<LOANS-PAST> 876
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 13,140
<ALLOWANCE-OPEN> 9,167
<CHARGE-OFFS> 130
<RECOVERIES> 60
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