<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
-------------
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 0-21292
-------
MERCHANTS AND MANUFACTURERS BANCORPORATION, INC.
- - - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S><C>
Wisconsin 39-1413328
- - - ---------------------------------- -----------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
573 West Lincoln Avenue
Milwaukee, Wisconsin 53207
- - - ----------------------------------------------------------------------------------
(Address of principal executive office)
(414) 649-2073
- - - ----------------------------------------------------------------------------------
Registrant's telephone number, including area code:
- - - ----------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last report)
</TABLE>
Indicate by check mark whether the Registrant (1) has filed all reports
required 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 the issuer's classes of
common stock, as of the latest practical date.
Common Stock, par value $1.00 per share 872,404 Shares
- - - --------------------------------------- -----------------------------
Class Outstanding at August 1, 1996
<PAGE> 2
MERCHANTS AND MANUFACTURERS BANCORPORATION, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE NUMBER
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Statements of Financial Condition
as of June 30, 1996 (Unaudited) and December 31, 1995 3
Unaudited Condensed Consolidated Statements of Income
for the Three Months and the Six Months
ended June 30, 1996 and 1995 4
Unaudited Condensed Consolidated Statements of Cash
Flows for the Six Months ended June 30, 1996 and 1995 5
Notes to Unaudited Condensed Consolidated Financial
Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Items 1-6 14
Signatures 15
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
MERCHANTS AND MANUFACTURERS BANCORPORATION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - UNAUDITED
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
--------- ------------
(In Thousands)
<S> <C> <C>
ASSETS
Cash and due from banks $ 10,673 $ 11,164
Interest-bearing deposits at other banks 2,598 8,737
Federal funds sold 4,417 8,546
-------- --------
Cash and cash equivalents 17,688 28,447
Securities available-for-sale (at fair value):
Investment securities 20,825 15,833
Mortgage-related securities 38,589 44,251
Loans receivable, net 174,262 163,650
Accrued interest receivable 1,708 1,532
Federal Home Loan Bank stock, at cost 646 702
Premises and equipment, net 7,738 7,605
Other assets 2,950 2,227
-------- --------
Total assets $264,406 $264,247
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $232,571 $233,083
Accrued interest payable 551 575
Short-term borrowings 3,000 3,000
Advance payments by borrowers for taxes and insurance 1,075 365
Other liabilities 1,077 681
-------- --------
Total liabilities 238,274 237,704
Stockholders' equity
Common stock, par value $1.00 per share: authorized--
1,500,000 shares; issued--897,812 898 898
Additional paid in capital 10,759 10,759
Unrealized loss on securities available-for-sale (566) (181)
Retained earnings, substantially restricted 15,748 15,249
Less treasury stock, at cost--25,021 shares and 7,013
shares, respectively (707) (182)
-------- --------
Total stockholders' equity 26,132 26,543
-------- --------
Total liabilities and stockholders' equity $264,406 $264,247
======== ========
See notes to unaudited consolidated financial statements.
</TABLE>
3
<PAGE> 4
MERCHANTS AND MANUFACTURERS BANCORPORATION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
------- ------ ------ ------
(In Thousands, except per share data)
<S> <C> <C> <C> <C>
Interest income:
Loans, including fees $3,647 $3,360 $7,194 $6,586
Investment securities:
Taxable 305 159 528 341
Exempt from federal income taxes 42 31 85 64
Mortgage-related securities 639 817 1,325 1,632
Other 95 145 270 219
------ ------ ------ ------
Total interest income 4,728 4,512 9,402 8,842
Interest expense:
Deposits 1,991 1,877 3,968 3,548
Borrowings 53 61 100 117
------ ------ ------ ------
Total interest expense 2,044 1,938 4,068 3,665
Net interest income 2,684 2,574 5,334 5,177
Provision for loan losses 36 60 72 120
------ ------ ------ ------
Net interest income after provision for
loan losses 2,648 2,514 5,262 5,057
Non-interest income:
Service charges on deposit accounts 179 181 361 357
Service charges on loans 45 33 109 38
Net gain on securities sales 9 10 7 10
Other 133 110 257 230
------ ------ ------ ------
366 334 734 635
Non-interest expenses:
Salaries and employee benefits 1,202 1,176 2,625 2,358
Premises and equipment 327 295 692 580
Data processing fees 139 145 275 279
Federal deposit insurance premiums 52 127 106 253
Other 463 527 1,077 1,088
------ ------ ------ ------
2,183 2,270 4,775 4,558
Income before income taxes 831 578 1,221 1,134
Income taxes 290 195 423 396
------ ------ ------ ------
Net income $ 541 $ 383 $ 798 $ 738
====== ====== ====== ======
Earnings per share $ 0.62 $ 0.43 $ 0.90 $ 0.83
====== ====== ====== ======
Dividends per share $ 0.17 $ 0.15 $ 0.34 $ 0.30
====== ====== ====== ======
See notes to unaudited consolidated financial statements.
</TABLE>
4
<PAGE> 5
MERCHANTS AND MANUFACTURERS BANCORPORATION, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
1996 1995
--------- ---------
(In Thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 799 $ 738
Adjustments to reconcile net income to cash provided (used) by
operating activities:
Provision for loan losses 72 120
Provision for depreciation 197 176
Net amortization of investments securities premiums and discounts 160 185
Net realized investment security gains (7) (10)
Increase in accrued interest receivable (176) (209)
Increase (decrease) in accrued interest payable (24) 141
Other (122) (174)
-------- -------
Net cash provided by operating activities 899 967
INVESTING ACTIVITIES
Purchases of securities available for sale (9,866) (2,128)
Proceeds from redemptions and maturities of securities available for sale 6,237 4,360
Proceeds from sales of securities available for sale 3,556 6,564
Purchases of investment securities 0 (992)
Net increase in loans (10,784) (3,952)
Purchase of premises and equipment (330) (291)
Proceeds from sales of real estate 100 261
Redemption (purchase) of Federal Home Loan Bank stock 56 (38)
-------- -------
Net cash provided or (used) in investing activities (11,031) 3,784
FINANCING ACTIVITIES
Net decrease in deposits (512) (333)
Payments of cash dividends to stockholders (299) (266)
Net increase in borrowings 0 4,200
Purchase of treasury stock (564) 0
Proceeds from sale of treasury stock 38 0
Increase in advance payments by borrowers for taxes and insurance 710 768
Proceeds from dividend reinvestment plan 0 100
-------- -------
Net cash provided or (used) in financing activities (627) 4,469
Increase (decrease) in cash and cash equivalents (10,759) 9,220
Cash and cash equivalents at beginning of period 28,447 17,694
-------- -------
Cash and cash equivalents at end of period $ 17,688 $26,914
======== =======
Supplemental cash flow information:
Interest paid $ 4,081 $ 2,877
Income taxes paid 549 337
Loans transferred to other real estate owned 100 0
See notes to unaudited consolidated financial statements
</TABLE>
5
<PAGE> 6
MERCHANTS AND MANUFACTURERS BANCORPORATION, INC.
Notes to Unaudited Condensed Consolidated Financial Statements
June 30, 1996
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the six-month
period ended June 30, 1996 are not necessarily indicative of the results that
may be expected for the year ended December 31, 1996. For further information,
refer to the consolidated financial statements and footnotes thereto included
in the Corporation's Form 10-K for the year ended December 31, 1995.
NOTE B -- EARNINGS PER SHARE INFORMATION
Earnings per share of common stock for the six months ended June 30, 1996, and
1995 have been determined by dividing net income for the respective periods by
the weighted average number of shares of common stock and common stock
equivalents outstanding during the period.
<TABLE>
<CAPTION>
Three Months Ended, Six Months Ended
June 30, June 30,
1996 1995 1996 1995
--------------------- ----------------------
<S> <C> <C> <C> <C>
Net income $541,795 $383,259 $798,500 $738,339
Weighted average
shares outstanding 875,098 889,507 879,536 888,858
-------- -------- -------- --------
Earnings per share $ 0.62 $ 0.43 $ 0.90 $ 0.83
======== ======== ======== ========
</TABLE>
6
<PAGE> 7
NOTE C -- LOANS RECEIVABLE
Loans are comprised of the following categories:
<TABLE>
<CAPTION>
June 30 December 31
1996 1995
----------- -----------
(In Thousands)
<S> <C> <C>
Commercial business loans $ 41,486 $ 36,605
Commercial real estate 49,781 44,594
Real estate mortgages 74,786 71,943
Installments 8,741 10,810
Other 1,122 1,326
-------- --------
Total loans 175,916 165,278
Unearned income (93) (95)
-------- --------
Loans, net of unearned income $175,823 $165,183
======== ========
</TABLE>
The following table presents changes in the allowance for credit losses:
<TABLE>
<CAPTION>
Three Months Ended, Six Months Ended
June 30, June 30,
1996 1995 1996 1995
--------------------- --------------------
(In Thousands)
<S> <C> <C> <C> <C>
Beginning balance $1,501 $1,496 $1,533 $1,464
Provisions 36 60 72 120
Charge-offs (5) (12) (73) (40)
Recoveries 29 0 29 0
------ ------ ------ ------
Balance at June 30 $1,561 $1,544 $1,561 $1,544
====== ====== ====== ======
</TABLE>
NOTE D -- STOCKHOLDERS' EQUITY
Under federal law and regulations, the Corporation is required to meet certain
capital requirements. The Banks and Lincoln Savings are required to meet
leverage and risk-based capital requirements. The leverage ratio, in general,
is stockholders' equity as a percentage of total assets. The risk-based
capital ratio, in general, is stockholders' equity plus general loan loss
allowances (within certain limitations) as a percentage of risk adjusted
assets.
The risk-based capital requirements presently address credit risk related to
both recorded and off-balance sheet commitments and obligations. As a
state-chartered savings institution, Lincoln Savings is also subject to minimum
regulatory capital requirements of the State of Wisconsin.
7
<PAGE> 8
The following summarizes the June 30, 1996 actual capital levels and ratios and
those required by federal regulations and the State of Wisconsin for Lincoln
Savings.
<TABLE>
<CAPTION>
Amount Ratios
--------------------------------- ----------------------------------
Actual Required Excess Actual Required Excess
--------------------------------- ----------------------------------
(In Thousands, Except Percentages)
<S> <C> <C> <C> <C> <C> <C>
Lincoln State Bank:
Leverage $10,536 $4,965 $5,571 8.49% 4.00% 4.49%
Risk-based 11,463 7,420 4,043 12.36 8.00 4.36
Franklin State Bank:
Leverage 2,406 1,316 1,090 7.31 4.00 3.31
Risk-based 2,612 1,782 830 11.72 8.00 3.72
Lincoln Savings:
Leverage 10,307 4,149 6,158 9.94 4.00 5.94
Risk-based 10,734 4,609 6,125 18.63 8.00 10.63
State of Wisconsin: 10,336 6,224 4,112 9.96 6.00 3.96
</TABLE>
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Financial Condition
At June 30, 1996, the Corporation's consolidated total assets were $264.4
million as compared to $264.2 million at December 31, 1995.
Investment securities increased $5.0 million, or 31.5%, from $15.8 million at
December 31, 1995 to $20.8 million at June 30, 1996. Purchases of new
investments were offset by securities maturing during the quarter and the
increased unrealized loss on investments classified as available for sale.
Mortgage-related securities available-for-sale decreased $5.7 million, or 12.8%
from $44.3 million at December 31, 1995, to $38.6 million at June 30, 1996.
The majority of mortgage-related securities are variable rate which will allow
the Corporation to benefit from rising interest rates.
Loans receivable increased $10.6 million, or 6.48%, from $163.7 million at
December 31, 1995 compared to $174.2 million at June 30, 1996. This increase
was primarily due to new commercial loan relationships. This movement
corresponds to the Corporation's strategic plan of emphasizing commercial
business. These assets tend to be rate-sensitive and will add interest income
in a rising interest rate environment. Currently, loans receivable consists
mainly of mortgages secured by residential properties located in the
Corporation's primary market area and commercial loans secured by business
assets, real estate, and guarantees. At June 30, 1996 the Corporation has not
designated any loans held for sale. Past loan sales have been loan
participations sold to correspondent banks when the borrowers reached their
lending limit at the Corporation's subsidiary Banks.
Stockholders' equity at June 30, 1996 was $26.1 million compared to $26.5
million at December 31, 1995, a decrease of $411,000, or 1.5%. The change in
stockholders' equity consists of net income of $798,000, less payments of
dividends to shareholders of $299,000, less the purchase of treasury stock of
$526,000 and the $385,000 decrease in the market value of securities
categorized as available for sale. The Banks and Lincoln Savings continue to
exceed their regulatory capital requirements.
Nonperforming Assets and Allowance for Losses
Generally a loan is classified as nonaccrual and the accrual of interest on
such loan is discontinued when the contractual payment of principal or interest
has become 90 days past due or management has serious doubts about further
collectibility of principal or interest, even though the loan currently is
performing. Generally, loans are restored to accrual status when the
obligation is brought current, has performed in accordance with the contractual
terms for a reasonable period of time and the ultimate collectibility of the
total contractual principal and interest is no longer in doubt.
9
<PAGE> 10
Nonperforming assets are summarized, for the dates indicated, as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------------- --------------
(In Thousands, Except Percentages)
<S> <C> <C>
Non-accrual loans:
Mortgage loans
One-to-four family $ 585 $ 355
Commercial mortgage 83 148
------- -------
Total mortgage loans 668 503
Commercial business 105 94
Consumer and other 23 61
------- -------
Total non-accrual loans 796 658
Other real estate owned 0 0
------- -------
Total nonperforming assets $ 796 $ 658
======= =======
RATIOS:
Non-accrual loans to total loans 0.46% 0.40%
Nonperforming assets to total assets 0.30 0.25
Loan loss allowance to non-accrual loans 196.11 232.98
Loan loss allowance to total loans 0.89 0.93
</TABLE>
Nonperforming assets increased by $138,000 from $658,000 at December 31, 1995
to $796,000 at June 30, 1996, a increase of 21.0%. A $230,000 increase in
non-accrual 1-4 family loans accounted for the majority of the increase.
Although the amount of non-accrual loans increased, management believes that
losses will be minimal on the remaining balances, due to the collateral
position in each situation.
Results of Operation
Net interest income, for the three months ended June 30, 1996 was $2.65
million, an increase of 4.3% from the $2.57 million reported for the same
period in 1995. The increase in loans receivable and the stabilization of
rates paid on deposit products were the major contributing factors to the
increase in net interest income. Net interest income for the six months ended
June 30, 1996 was $5.33 million, an increase of 3.0% from the $5.18 million
reported for the same period in 1995. The increase in loans and the higher net
interest margin were the primary reasons for the improvement in the
year-to-date net interest income as well.
10
<PAGE> 11
The following table sets forth the weighted average yield earned on the
Corporation's consolidated loan and investment portfolios, the weighted average
interest paid on deposits and borrowings, the net spread between yield earned
and rates paid and the net interest margin during the six and three months
ended June 30, 1996 and 1995.
<TABLE>
<CAPTION>
During the During the
Three Months Six Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
--------------------------------------
<S> <C> <C> <C> <C>
Weighted average yield on
interest-earning assets 7.80% 7.94% 8.04% 7.81%
Weighted average rate paid on
deposit accounts and borrowings 3.50 3.51 3.52 3.33
---- ---- ---- ----
Net interest spread 4.30% 4.43% 4.52% 4.48%
==== ==== ==== ====
Net interest margin (net interest
income divided by average
earning assets) 4.43% 4.53% 4.44% 4.57%
==== ==== ==== ====
</TABLE>
The provision for loan losses for the three month period ended June 30, 1996
was $36,000 compared to $60,000 for the three months ended June 30, 1995. For
the six months ended June 30, 1996, the provision for loan losses was $72,000
compared to $120,000 for than the same period in 1995. The decline is
primarily due to the low volume of nonaccrual and past due loans. This
procedure is based on internal reviews intended to determine the adequacy of
the loan loss allowance in view of presently known factors. However, changes
in economic conditions in the future financial conditions of borrowers cannot
be predicted and may result in increased future provisions to the loan loss
allowance.
Service charges on deposits and other income for the three months ended June
30, 1996 was $366,000 compared to $334,000 for the three months ended June 30,
1995, an increase of $32,000, or 9.6%. Service charges on deposits and other
income for the six months ended June 30, 1996 was $734,000 compared to $635,000
for the six months ended June 30, 1995, an increase of $99,000, or 15.6%. The
increases are due to fees collected on loans, the higher number of accounts
eligible for service charges and a continued evaluation of fees charged on our
depository accounts.
Non-interest expense for the three months ended June 30, 1996 was $2.18 million
compared to $2.27 million for the three months ended June 30, 1995, an decrease
of $87,000, or 3.8%. The reduction in insurance fees paid to the Federal
Deposit Insurance Corporation accounted for majority of the decrease.
Non-interest expense for the six months ended June 30, 1996 was $4.78 million
compared to $4.56 million for the six months ended June 30, 1995, an increase
of $217,000, or 4.8%. The other operating expense increases consisted
primarily of premises and equipment costs related to the opening of two new
branch locations of Lincoln State Bank.
11
<PAGE> 12
Income before taxes for the three month period ended June 30, 1996 was $831,000
compared to $578,000 for the three months ended June 30, 1995, an increase of
$253,000 or 43.8%. Income before taxes for the six month period ended June 30,
1996 was $1.22 million compared to $1.13 million for the six months ended June
30, 1995, an increase of $87,000 or 7.7%. On an after tax basis, the
Corporation reported net income of $541,000 for the three month period ended
June 30, 1996 compared to $383,000 for the same period in 1995; and for the six
month period ended June 30, 1996, the Corporation reported net income of
$798,000 compared to $738,000 for the same period in 1995.
Liquidity and Capital Resources
Liquidity management involves the ability to meet the cash flow requirements of
customers who may be either depositors wanting to withdraw funds or borrowers
needing assurance that sufficient funds will be available to meet their credit
needs. The Corporation had liquid assets of $17.7 million and $28.4 million at
June 30, 1996 and December 31, 1995, respectively.
Management believes liquidity and capital levels are adequate at June 30, 1996.
For a discussion of regulatory requirements, see Note D to the Unaudited
Condensed Consolidated Financial Statements.
Asset/Liability Management
Financial institutions are subject to interest rate risk to the extent their
interest-bearing liabilities (primarily deposits) mature or reprice at
different times and on a different basis than their interest-earning assets
(consisting primarily of loans and securities). Interest rate sensitivity
management seeks to match maturities on assets and liabilities and avoid
fluctuating net interest margins while enhancing net interest income during
periods of changing interest rates. The difference between the amount of
interest-earning assets maturing or repricing within a specific time period and
the amount of interest-bearing liabilities maturing or repricing within the
same time period is referred to as an interest rate gap. A gap is considered
positive when the amount of interest rate sensitive assets exceeds the amount
of interest rate sensitive liabilities. A gap is considered negative when the
amount of interest rate sensitive liabilities exceeds the amount of interest
rate sensitive assets. During periods of rising interest rates, a negative gap
tends to adversely affect net interest income while a positive gap tends to
result in an increase in net interest income. During a period of falling
interest rates, a negative gap tends to result in an increase in net interest
income while a positive gap tends to adversely affect net interest income.
Assumptions regarding prepayment and withdrawal rates are based upon the
Corporation's historical experience, and management believes such assumptions
are reasonable.
12
<PAGE> 13
The following table shows the interest rate sensitivity gap for four different
time intervals as of June 30, 1996.
<TABLE>
<CAPTION>
AMOUNTS MATURING OR REPRICING AS OF JUNE 30, 1996
--------------------------------------------------------------
WITHIN SIX TO TWELVE ONE TO FIVE OVER
SIX MONTHS MONTHS YEARS FIVE YEARS TOTAL
---------- ------------- ----------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Interest-earning assets:
Fixed-rate mortgage loans $ 19,226 $ 10,906 $46,751 $ 7,201 $ 84,084
Adjustable-rate mortgage loans 17,578 6,452 15,337 170 39,537
-------- -------- ------- -------- --------
Total mortgage loans 36,804 17,358 62,088 7,371 123,621
Commercial business loans 28,836 2,823 9,420 31 41,110
Consumer loans 5,502 1,089 3,747 4 10,342
Tax-exempt loans 750 0 0 0 750
Mortgage-related securities 21,018 5,537 11,497 537 38,589
Fixed rate investment securities and other 6,701 3,533 6,310 0 16,544
Variable rate investment securities and other 11,296 646 0 0 11,942
-------- -------- ------- -------- --------
Total interest-earning assets $110,907 $ 30,986 $93,062 $ 7,943 $242,898
======== ======== ======= ======== ========
Interest-bearing liabilities:
Deposits
Time deposits $ 64,890 $ 31,611 $14,000 $ 4 $110,505
NOW accounts 1,401 1,401 14,013 6,540 23,355
Savings accounts 4,861 3,784 37,841 17,660 64,146
Money market accounts 352 352 3,524 1,645 5,873
-------- -------- ------- -------- --------
Total deposits 71,504 37,148 69,378 25,849 203,879
Borrowings 3,000 0 0 0 3,000
-------- -------- ------- -------- --------
Total interest-bearing liabilities $ 74,504 $ 37,148 $69,378 $ 25,849 $206,879
======== ======== ======= ======== ========
Interest-earning assets less interest-bearing
liabilities $ 36,403 ($6,162) $23,684 ($17,906) $ 36,019
======== ======== ======= ======== ========
Cumulative interest rate sensitivity gap $ 36,403 $ 30,241 $53,925 $ 36,019
======== ======== ======= ========
Cumulative interest rate sensitivity gap as a
percentage of total assets 13.77% 11.44% 20.39% 13.62%
======== ======== ======= ========
</TABLE>
At June 30, 1996, the Corporation's cumulative ratio of interest-rate sensitive
assets to interest-rate sensitive liabilities was 13.77% for six months and
11.44% for one year maturities. Therefore, the Corporation is positively
gapped and may benefit from rising interest rates.
Certain shortcomings are inherent in the method of analysis presented in the
Schedule. For example, although certain assets and liabilities may have
similar maturities or periods of repricing, they may react in different degrees
to changes in market interest rates. Also, the interest rates on certain types
of assets and liabilities may fluctuate in advance of changes in market
interest rates, while interest rates on other types may lag behind changes in
market rates. Additionally, certain assets, such as adjustable rate mortgage
loans, have features that restrict changes in interest rates, on a short term
basis over the life of the asset. Further, in the event of a change in
interest rates, prepayment and early withdrawal levels would likely deviate
significantly from those assumed in calculating the schedule. Finally, the
ability of many borrowers to service their debt may decrease in the event of an
interest rate decrease.
13
<PAGE> 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As of June 30, 1996 there were no material pending legal proceedings,
other than ordinary routine litigation incidental to the business of
the Corporation, to which the Corporation or any of its subsidiaries
was a party or to which any of their property was subject.
Item 2. Changes in Securities - NONE
Item 3 Defaults upon Senior Securities - NONE
Item 4 Submission of Matters to Vote of Security Holders - NONE
Item 5 Other Information - NONE
Item 6 Exhibits and Reports on Form 8-K
The Corporation did not file any reports on Form 8-K during the three months
ended June 30, 1996. Required exhibits are incorporated by reference to
previously filed Securities Act registration statements.
14
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed by on its behalf by the
undersigned thereunto duly authorized.
MERCHANTS AND MANUFACTURERS
BANCORPORATION, INC.
-------------------------------
(Registrant)
Date August 5, 1996
- - - ----------------------------- -----------------------------------------
Michael J. Murry
Chief Executive Officer & Chairman of the
Board of Directors
Date August 5, 1996
- - - ----------------------------- -----------------------------------------
James C. Mroczkowski
Vice President & Chief Financial Officer
Principal Financial Officer
15
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 10,673
<INT-BEARING-DEPOSITS> 2,598
<FED-FUNDS-SOLD> 4,417
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 59,414
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 175,823
<ALLOWANCE> 1,561
<TOTAL-ASSETS> 264,406
<DEPOSITS> 233,646
<SHORT-TERM> 3,000
<LIABILITIES-OTHER> 1,628
<LONG-TERM> 0
0
0
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</TABLE>
