United States Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1998
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 0-14354
FIRST INDIANA CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 35-1692825
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
135 North Pennsylvania Street, Indianapolis, IN 46204
(Address of principal executive office) (Zip Code)
(317) 269-1200
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes (X) No ( )
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date:
Common Stock, par value $0.01 per share 12,709,200 Shares
Class Outstanding at 10/31/98
<PAGE> 1
FIRST INDIANA CORPORATION AND SUBSIDIARIES
FORM 10-Q
INDEX
Page
Part I Financial Information 3
Item 1. Financial Highlights
Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets as
of September 30, 1998 and December 31, 1997 4
Condensed Consolidated Statements of
Earnings for the Three and Nine Months
Ended September 30, 1998 and 1997 5
Condensed Consolidated Statements of
Shareholders' Equity for the Nine Months
Ended September 30, 1998 6
Condensed Consolidated Statements of Cash
Flows for the Nine Months Ended
September 30, 1998 and 1997 7
Notes to Condensed Consolidated Financial
Statements 8
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 10
Item 3. Disclosures About Market Risk 19
Part II Other Information 20
Signatures 21
<PAGE> 2
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
First Indiana Corporation and Subsidiaries
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
For the Three Months Ended
September 30,
1998 1997
<S> <C> <C>
Total Interest Income $ 34,551 $ 32,518
Total Interest Expense 18,905 16,240
Net Earnings 5,003 4,706
Basic Earnings Per Share 0.39 0.37
Diluted Earnings Per Share 0.38 0.36
Dividends Per Share 0.12 0.10
Net Interest Margin 3.77 % 4.49 %
Net Interest Spread 3.08 3.81
Return on Average Equity 12.36 12.75
Return on Average Assets 1.15 1.25
Average Shares Outstanding 12,750,527 12,673,591
Average Diluted Shares Outstanding 13,255,871 13,052,644
For the Nine Months Ended
September 30,
1998 1997
<S> <C> <C>
Total Interest Income $ 101,410 $ 94,652
Total Interest Expense 54,771 47,363
Net Earnings 14,038 12,758
Basic Earnings Per Share 1.10 1.01
Diluted Earnings Per Share 1.06 0.98
Dividends Per Share 0.36 0.30
Net Interest Margin 3.85 % 4.42 %
Net Interest Spread 3.17 3.77
Return on Average Equity 11.80 11.80
Return on Average Assets 1.10 1.14
Average Shares Outstanding 12,746,277 12,634,092
Average Diluted Shares Outstanding 13,286,412 13,033,249
<CAPTION>
At September 30,
1998 1997
<S> <C> <C>
Assets $ 1,738,652 $ 1,547,121
Loans-Net 1,462,763 1,284,800
Deposits 1,211,714 1,094,468
Shareholders' Equity 163,061 149,177
Shareholders' Equity/Assets 9.38 % 9.64 %
Shareholders' Equity Per Share $ 12.83 $ 11.77
Market Closing Price 21.00 19.79
Price/Earnings Multiple 13.82 x 13.81 x
<CAPTION>
At September 30, 1998
Actual Required
<S> <C> <C>
Capital Ratios
Tangible Capital/Total Assets 7.84 % 1.50 %
Core (Tier One) Capital/Total Assets 7.84 % 3.00 %
Risk-Based Capital/Risk-Weighted Assets 11.27 % 8.00 %
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEETS
First Indiana Corporation and Subsidiaries
(Dollars in Thousands, Except Share Data)
September 30, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
Assets
Cash $ 37,750 $ 34,231
Federal Funds Sold 22,000 16,000
Total Cash and Cash Equivalents 59,750 50,231
Investments Available for Sale 129,380 106,095
Investments Held to Maturity -- 5,305
(Market Value of $5,419)
Mortgage-Backed Securities Available for Sale 16,634 17,077
Mortgage-Backed Securities Held to Maturity - Net
(Market Value of $21,549) -- 21,202
Loans Held for Sale 89,410 57,518
Loans Receivable 1,397,876 1,313,425
Less Allowance for Loan Losses (24,523) (22,414)
Loans Receivable - Net 1,462,763 1,348,529
Premises and Equipment 16,678 13,947
Accrued Interest Receivable 11,780 11,322
Real Estate Owned - Net 3,469 3,907
Prepaid Expenses and Other Assets 38,198 35,790
Total Assets $ 1,738,652 $ 1,613,405
Liabilities and Shareholders' Equity
Liabilities
Non-Interest-Bearing Deposits $ 123,060 $ 90,612
Interest-Bearing Deposits 1,088,654 1,016,943
Total Deposits 1,211,714 1,107,555
Federal Home Loan Bank Advances 287,247 257,458
Short-Term Borrowings 52,458 75,751
Accrued Interest Payable 4,101 2,715
Advances by Borrowers for Taxes and Insurance 4,230 1,419
Other Liabilities 11,814 10,733
Total Liabilities 1,571,564 1,455,631
Negative Goodwill 4,027 4,738
Shareholders' Equity
Preferred Stock, $.01 Par Value: 2,000,000 Shares
Authorized; None Issued -
Common Stock, $.01 Par Value: 33,000,000 Shares
Authorized; 13,502,733 and 13,374,799 Shares Issued and
Outstanding, Including Shares in Treasury 135 134
Paid-In Capital in Excess of Par 35,406 34,662
Retained Earnings 133,376 123,699
Accumulated Other Comprehensive Income 2,583 981
Treasury Stock-at Cost, 794,608 and 706,608 Shares (8,439) (6,440)
Total Shareholders' Equity 163,061 153,036
Total Liabilities and Shareholders' Equity $ 1,738,652 $ 1,613,405
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE> 4
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
First Indiana Corporation and Subsidiaries
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Interest Income
Loans $ 32,117 $ 30,117 $ 93,670 $ 87,171
Investments 1,879 1,692 5,626 5,138
Mortgage-Backed Securities 456 559 1,648 1,780
Federal Funds Sold and
Interest-Bearing Deposits 99 150 466 563
Total Interest Income 34,551 32,518 101,410 94,652
Interest Expense
Deposits 14,227 12,590 41,366 37,110
Federal Home Loan Bank Advances 3,929 3,171 11,218 9,118
Short-Term Borrowings 749 479 2,187 1,135
Total Interest Expense 18,905 16,240 54,771 47,363
Net Interest Income 15,646 16,278 46,639 47,289
Provision for Loan Losses 2,320 2,600 7,460 8,100
Net Interest Income After
Provision for Loan Losses 13,326 13,678 39,179 39,189
Non-Interest Income
Gain on Sale of Investments Available for Sale - 220 19 222
Gain on Sale of Mortgage-Backed Securities
Available for Sale 368 - 368 -
Gain on Sale of Loans 3,080 1,329 7,554 2,907
Dividends on Federal Home Loan Bank Stock 306 275 832 789
Loan Servicing Income 385 728 1,330 2,183
Loan Fees 906 580 2,346 1,842
Insurance Commissions 20 45 85 221
Accretion of Negative Goodwill 237 237 711 711
Deposit Product Fee Income 735 662 2,088 1,959
Other 560 643 2,021 1,735
Total Non-Interest Income 6,597 4,719 17,354 12,569
Non-Interest Expense
Salaries and Benefits 5,888 5,292 16,472 15,054
Net Occupancy 776 642 2,157 2,168
Equipment 1,349 1,205 3,816 3,499
Office Supplies and Postage 516 471 1,490 1,408
Real Estate Owned Operations - Net 226 165 642 427
Deposit Insurance 178 169 514 523
Other 2,816 2,702 8,466 7,731
Total Non-Interest Expense 11,749 10,646 33,557 30,810
Earnings Before Income Taxes 8,174 7,751 22,976 20,948
Income Taxes 3,171 3,045 8,938 8,190
Net Earnings $ 5,003 $ 4,706 $ 14,038 $ 12,758
Basic Earnings Per Share $ 0.39 $ 0.37 $ 1.10 $ 1.01
Diluted Earnings Per Share $ 0.38 $ 0.36 $ 1.06 $ 0.98
Dividends Per Common Share $ 0.12 $ 0.10 $ 0.36 $ 0.30
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE> 5
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
First Indiana Corporation and Subsidiaries Accumulated
(Dollars in Thousands, Except Share Data) Paid-In Other
(Unaudited) Capital Compre- Total
Common Stock in Excess Retained hensive Treasury Shareholders'
Shares Amount of Par Earnings Income Stock Equity
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 12,668,191 $134 $34,662 $123,699 $981 $(6,440) $153,036
Comprehensive Income:
Net Earnings For The Nine Months
Ended September 30, 1998 14,038 14,038
Unrealized Gain on Securities Available
for Sale, Net of Income Taxes of $516
and Reclassification Adjustment of $620 758 758
Tax Benefit of Stock Options Exercised 844 844
Total Comprehensive Income 15,640
Common Stock Issued Under Restricted
Stock Plans-Net of Amortization 6,000 150 164 314
Common Stock Issued Under Deferred
Compensation Plan 65 65
Exercise of Stock Options 128,978 1 788 789
Dividends on Common Stock ($.36 per share) (4,590) (4,590)
Redemption of Common Stock (6,695) (184) (184)
Payment for Fractional Shares (349) (10) (10)
Purchase of Treasury Stock (88,000) (1,999) (1,999)
Balance at September 30, 1998 12,708,125 $135 $35,406 $133,376 $2,583 $(8,439) $163,061
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE> 6
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
First Indiana Corporation and Subsidiaries
(Dollars in Thousands)
(Unaudited)
Nine Months Ended September 30,
1998 1997
<S> <C> <C>
Cash Flows from Operating Activities
Net Earnings $ 14,038 $ 12,758
Adjustments to Reconcile Net Earnings to
Net Cash Provided (Used) by Operating Activities:
Gain on Sale of Assets (7,941) (3,128)
Amortization 1,372 533
Amortization of Restricted Stock Plan 314 218
Net Amortization of Loans
and Mortgage-Backed Securities 345 369
Depreciation 1,710 1,515
Provision for Loan Losses 7,460 8,100
Origination of Loans Held For Sale
Net of Principal Collected (447,964) (139,901)
Proceeds from Sale of Loans Held for Sale 430,117 127,463
Change In:
Accrued Interest Receivable (458) (658)
Other Assets (12,261) (3,632)
Accrued Interest Payable 1,386 350
Other Liabilities 1,081 941
Net Cash Provided (Used) by Operating Activities (10,801) 4,928
Cash Flows from Investing Activities
Proceeds from Maturities of
Investment Securities Held to Maturity 20,679 15,727
Proceeds from Sale of Investments Available for Sale 10,023 --
Proceeds from Sale of Mortgage-Backed Securities
Available for Sale 23,483 --
Purchase of Investment Securities Available for Sale (47,375) (19,958)
Purchase of Mortgage-Backed Securities Available for Sale (9,967) (17,568)
Principal Collected on Mortgage-Backed Securities 1,928 6,732
Proceeds from Sale of Mortgage-Backed Securities -- 7,528
Originations of Loans Net of Principal Collected (89,781) (58,348)
Proceeds from Sale of Loans 7,391 1,261
Proceeds from Sale of Premises and Equipment -- 20
Purchase of Premises and Equipment (4,441) (1,694)
Net Cash Used by Investing Activities (88,060) (66,300)
Cash Flows from Financing Activities
Net Change in Deposits 104,159 (1,018)
Repayment of Federal Home Loan Bank Advances (259,048) (144,028)
Borrowings of Federal Home Loan Bank Advances 288,837 156,020
Net Change in Short-Term Borrowings (23,293) 26,230
Net Change in Advances by Borrowers
for Taxes and Insurance 2,811 2,478
Stock Option Proceeds 604 363
Tax Benefit of Stock Options Exercised 844 656
Common Stock Issued Under Deferred Compensation Plan 65 (12)
Payment for Fractional Shares (10) (18)
Dividends Paid (4,590) (3,796)
Purchase of Treasury Stock (1,999) --
Net Cash Provided (Used) by Financing Activities 108,380 36,875
Net Change in Cash and Cash Equivalents 9,519 (24,497)
Cash and Cash Equivalents at Beginning of Period 50,231 73,618
Cash and Cash Equivalents at End of Period $ 59,750 $ 49,121
Supplemental Disclosures of Cash Flow Information
Cash Paid During the Period For:
Interest on Deposits, Advances, and
Other Borrowed Money $ 53,385 $ 47,013
Income Taxes 8,873 8,560
Transfer of Mortgage-Backed Securities to Available for Sale 19,274 --
Transfer of Investments to Available for Sale 5,423 --
Transfer of Loans to Real Estate Owned 7,757 5,261
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE> 7
FIRST INDIANA CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
Nine Months Ended September 30, 1998
(Unaudited)
Note 1 - Basis of Presentation
The foregoing condensed consolidated financial
statements are unaudited. However, in the opinion of
management, all adjustments (comprising only normal
recurring accruals) necessary for a fair presentation of the
condensed consolidated financial statements have been
included. Results for any interim period are not necessarily
indicative of results to be expected for the year. The
condensed consolidated financial statements include the
accounts of First Indiana Corporation and its subsidiaries
(the "Corporation"). The principal subsidiary of the
Corporation is First Indiana Bank and its subsidiaries (the
"Bank"). A summary of the Corporation's significant
accounting policies is set forth in Note 1 of the Notes to
Consolidated Financial Statements in the Corporation's
Annual Report on Form 10-K for the year ended December
31, 1997.
Note 2 - Earnings Per Share
Basic earnings per share for 1998 and 1997 were
computed by dividing net earnings by the weighted
averages shares of common stock outstanding (12,750,527
and 12,673,591 for the three months ended September 30,
1998 and 1997 and 12,746,277 and 12,634,092 for the nine
months ended September 30, 1998 and 1997). Diluted
earnings per share for 1998 and 1997 were computed by
dividing net earnings by the weighted average shares of
common stock and common stock that would have been
outstanding assuming the issuance of all dilutive potential
common shares outstanding (13,255,871 and 13,052,644
for the three months ended September 30, 1998 and 1997
and 13,286,412 and 13,033,249 for the nine months ended
September 30, 1998 and 1997) after giving retroactive
effect to a six-for-five stock dividend in March 1998 and a
five-for-four stock split in March 1997. Dilution of the
per-share calculation relates to stock options.
Note 3 - Allowance for Loan Loss Reserve
Allowances have been established for possible
losses on loans and real estate owned ("REO"). The
provisions for losses charged to operations are based on
management's judgment of current circumstances and the
credit risk of the loan portfolio and REO. Management
believes that these allowances are adequate. While
management uses available information to recognize losses
on loans and REO, future additions to the allowances may
be necessary based on changes in economic conditions. In
addition, various regulatory agencies, as an integral part of
their examinations, periodically review these allowances
and may require the Corporation to recognize additions to
the allowance based on their judgment about information
available to them at the time of their examination.
<PAGE> 8
Note 4 - Current Accounting Pronouncements
In June 1997, FASB issued Statement of Financial
Accounting Standard No. 131, "Disclosures About
Segments of an Enterprise and Related Information" ("FAS
131"), which introduces new guidance on segment
reporting. The Statement is effective for fiscal years
beginning after December 15, 1997, with earlier application
encouraged. The Statement is not expected to have a
material impact on the financial condition or results of
operations of the Corporation when adopted in 1998.
In February 1998, FASB issued Statement of
Financial Accounting Standard No. 132, "Employers'
Disclosures about Pensions and Other Postretirement
Benefits" ("FAS 132"). The Statement does not alter the
measurement and recognition provisions currently outlined
in generally accepted accounting principles, but merely
standardizes the disclosure requirements. The Statement
is effective for fiscal years beginning after December 15,
1997, with earlier application encouraged. The Statement
is not expected to have a material impact on the financial
condition or results of operations of the Corporation when
adopted in 1998.
In June 1998, FASB issued Statement of Financial
Accounting Standard No. 133, "Accounting for Derivative
Instruments and Hedging Activities". The Statement is
effective for fiscal years beginning after June 15, 1999,
with earlier application allowed. Management is currently
assessing the impact of this Statement on the financial
condition and results of operations of the Corporation upon
adoption.
In October 1998, FASB issued Statement of
Financial Accounting Standard No. 134, "Accounting for
Mortgage-Backed Securities Retained after the
Securitization of Mortgage Loans Held for Sale by a
Mortgage Banking Enterprise." This Statement is effective
for fiscal quarters beginning after December 15, 1998, with
earlier application allowed. Management is currently
assessing the impact of this Statement on the financial
condition and results of operations of the Corporation upon
adoption.
Note 5 - Reclassifications
Certain amounts in the 1997 Condensed
Consolidated Financial Statements have been reclassified to
conform to the 1998 presentation.
<PAGE> 9
Management's Discussion and Analysis of
Results of Operations and Financial Condition
Summary of Corporation's Results
First Indiana Corporation and subsidiaries had net
earnings of $5,003,000 for the third quarter of 1998,
compared with net earnings of $4,706,000 in the third
quarter of 1997. Diluted earnings per share for the three
months ended September 30, 1998 were $.38, compared
with $.36 per share for the same period one year ago.
Cash dividends for the third quarter of 1998 and 1997 were
$.12 and $.10, respectively.
For the first nine months of 1998, net earnings were
$14,038,000, compared with $12,758,000 one year ago.
For the nine months ended September 30, 1998, diluted
earnings per share were $1.06, compared with $0.98 for
the same period one year ago. Cash dividends through the
first nine months of 1998 and 1997 were $.36 and $.30,
respectively.
Net Interest Income
Net interest income was $15,646,000 for the three
months ended September 30, 1998, compared with
$16,278,000 for the three months ended September 30,
1997. For the nine months ended September 30, 1998, net
interest income was $46,639,000, compared with
$47,289,000 for the nine months ended September 30,
1997.
Total net loans outstanding grew to
$1,462,763,000 at September 30, 1998, compared with
$1,284,800,000 one year earlier. Residential loans
outstanding at September 30, 1998 were $520,469,000, up
15 percent from one year ago. The increase in the
residential portfolio illustrates the successful
implementation of strategies aimed at capitalizing upon
alternative product delivery channels, such as telemarketing
and wholesale lending. At September 30, 1998, home
equity loans outstanding were $554,962,000, compared
with $518,397,000 at September 30, 1997, a seven percent
increase. Commercial and industrial loans were
$162,969,000 at September 30, 1998, compared with
$114,743,000 one year earlier, a 42 percent increase. The
increase results from the Bank's focus on developing the
commercial and industrial market segment.
Interest income for the third quarter of 1998 was
$34,551,000, compared with $32,518,000 for the three
months ended September 30, 1997. Interest income for the
nine months ended September 30, 1998 was $101,410,000,
compared with $94,652,000 for the same period in 1997.
Interest expense for the third quarter of 1998 was
$18,905,000, compared with $16,240,000 for the three
months ended September 30, 1997. Interest expense for
the nine months ended September 30, 1998 and 1997 was
$54,771,000 and $47,363,000, respectively.
During the third quarter of 1998, the Corporation's
cost of funds was 5.24 percent, compared with 5.16
percent one year ago. For the nine months ended
September 30, 1998, the cost of funds was 5.20 percent,
compared with 5.07 percent for the same period in 1997.
The yield on earning assets was 8.32 percent for the third
quarter of 1998, compared with 8.97 percent one year ago.
For the nine months ended September 30, 1998, the yield
on earning assets was 8.37 percent, compared with 8.84
percent for the same period in 1997.
<PAGE> 10
Annualized return on total average assets was 1.15
percent for the three months ended September 30, 1998,
compared with 1.25 percent one year ago. For the nine
months ended September 30, 1998, the Corporation's
annualized return on total average assets was 1.10 percent,
compared with 1.14 percent for the same period in 1997.
Net Interest Margin
Net interest margin consists of two components:
interest-rate spread and the contribution of interest-free
funds (primarily capital and other non-interest-bearing
liabilities). The following analysis of net interest margin
reflects the Corporation's ability to effectively manage net
interest income.
<TABLE>
<CAPTION>
Three Months Ended September 30,
(Dollars in Thousands) 1998 1997
<S> <C> <C>
Net Interest Income $ 15,646 $ 16,278
Average Interest-Earning Assets $ 1,660,780 $ 1,450,272
Average Interest-Bearing Liabilities 1,442,733 1,258,489
Average Interest-Free Funds $ 218,047 $ 191,783
Yield on Interest-Earning Assets 8.32% 8.97%
Yield on Interest-Bearing Liabilities 5.24% 5.16%
Interest-Rate Spread 3.08% 3.81%
Impact of Interest-Free Funds 0.69% 0.68%
Net Interest Margin 3.77% 4.49%
<CAPTION>
All non-accruing delinquent loans have been included in average
interest-earning assets.
<CAPTION>
Nine Months Ended September 30,
(Dollars in Thousands) 1998 1997
<S> <C> <C>
Net Interest Income $ 46,639 $ 47,289
Average Interest-Earning Assets $ 1,616,067 $ 1,427,585
Average Interest-Bearing Liabilities 1,404,887 1,246,751
Average Interest-Free Funds $ 211,180 $ 180,834
Yield on Interest-Earning Assets 8.37% 8.84%
Yield on Interest-Bearing Liabilities 5.20% 5.07%
Interest-Rate Spread 3.17% 3.77%
Impact of Interest-Free Funds 0.68% 0.65%
Net Interest Margin 3.85% 4.42%
<CAPTION>
All non-accruing delinquent loans have been included in average
interest-earning assets.
</TABLE>
The current declining interest-rate environment
encourages borrowers to replace their higher yielding
mortgage loans with those loans offering a lower rate. This
environment of heavy refinancing activity resulted in a
negative impact on the Corporation's interest-rate margin
when compared with last year. Management has chosen to
continue expansion in the residential market with the
realization that the margin would decrease in the near term.
However, management believes the Corporation is
strategically positioned for long-term growth by developing
a customer base that has the potential of utilizing other
First Indiana Bank products and services.
<PAGE> 11
Non-Performing Assets and Summary of Loan Loss Experience
The following table analyzes the allowance for losses on loans and
REO for the nine months ended September 30, 1998 and 1997.
<TABLE>
<CAPTION>
Loan Loss REO Loss Loan and REO
Allowance Allowance Loss Allowance
1998 1997 1998 1997 1998 1997
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance of Loss Allowance
at Beginning of Year $22,414 $18,768 $483 $ 543 $22,897 $19,311
Provision for Losses 7,460 8,100 (77) -- 7,383 8,100
Charge-Offs -- Residential (51) -- (7) (13) (58) (13)
-- Consumer (5,564) (5,287) (240) (179) (5,804) (5,466)
-- Construction (576) (1,079) -- (8) (576) (1,087)
-- Commercial and
Industrial (15) (59) -- -- (15) (59)
-- Commercial Real
Estate -- -- -- -- -- --
Recoveries -- Residential 2 -- 100 6 102 6
-- Consumer 738 1,011 233 159 971 1,170
-- Construction 79 35 8 17 87 52
-- Commercial and
Industrial 36 4 -- -- 36 4
-- Commercial Real
Estate -- 727 -- -- -- 727
Balance at September 30, $24,523 $22,220 $500 $525 $25,023 $22,745
Ratio of Allowance for Loan Losses to Loans
Receivable 1.65% 1.70%
Ratio of REO Loss Allowance to Real Estate Owned 12.60% 11.50%
Ratio of Total Loan and REO Loss Allowance to
Non-Performing Assets 130.17% 60.21%
</TABLE>
Non-performing assets were $19,224,000, or 1.11
percent of assets, at September 30, 1998. This compares
with $22,822,000, or 1.41 percent of assets, at December
31, 1997 and $22,002,000, or 1.42 percent of assets, at
September 30, 1997. This category includes non-accrual
loans, REO, and restructured loans on which the Bank
continues to accrue interest.
The Bank regularly reviews all non-performing
assets to evaluate the adequacy of the allowances for losses
on loans and REO. The allowance for loan losses is
maintained through a provision for loan losses, which is
charged to earnings. The provisions are determined in
conjunction with management's review and evaluation of
current economic conditions, changes in the character and
size of the loan portfolio, estimated charge-offs, and other
pertinent information derived from a quarterly review of
the loan portfolio and REO properties.
The provision for losses on loans in the third
quarter of 1998 was $2,320,000, compared with
$2,600,000 in the third quarter of 1997. For the nine
months ended September 30, 1998, the total provision for
loan losses was $7,460,000, compared with $8,100,000 for
the same period in 1997. The reduction in loan loss
provision comes as a result of the Bank's ability to control
the level of charge-offs, particularly in the consumer
portfolio, and the conservative underwriting guidelines in
place for commercial loan growth.
The Bank writes down consumer loans at the date
of foreclosure and charges off the entire balance of home
equity loans greater than 120 days delinquent with loan-to-value
ratios above 90
<PAGE> 12
percent. If the loan has a loan-to-value ratio of
less than 90 percent, the loan is written down
to its estimated disposition value after considering any first
mortgage position and 15 percent disposition costs.
Indirect automobile loans greater than 120 days delinquent
are charged off in full. If collection efforts result in a
subsequent recovery of all or a portion of the loan amount,
the Bank recognizes the recovery at the time of receipt.
The amount of the provision in 1998 is the result of
management's ongoing evaluation of the adequacy of its
loan and real estate owned loss allowances and the
changing composition of the Corporation's loan portfolio,
non-performing loans, and REO. Management will
continue to evaluate the adequacy of the provision and will
adjust it if necessary to reflect changes in the amount or
category of loans originated, changes in current economic
conditions and the credit risk of the loan portfolio and
REO.
Non-Interest Income
Total non-interest income was $6,597,000 for the
three months ended September 30, 1998, compared with
$4,719,000 for the same period in 1997. For the nine
months ended September 30, 1998 and 1997, total non-interest
income was $17,354,000 and $12,569,000, respectively.
The 1998 gain on sale of loans of $7,554,000 is
comprised of both a $5,197,000 gain on the sale of fixed-rate
home equity loans and a $2,357,000 gain on residential
mortgage loans. In the third quarter of 1998, the Bank
recognized a gain of $2,190,000 on home equity loan sales,
and a $890,000 gain on residential sales. Through the first
nine months of 1997, the Bank recognized $1,582,000 in
gains on home equity sales and gains of $1,325,000
through the sale of residential mortgage loans. A national
network of agents coupled with a call center, has allowed
the Bank to aggressively pursue originations of home
equity products with loan-to-value ratios of greater than 80
percent. The Bank processes and underwrites these loans
and subsequently sells them into the secondary market. In
some cases, the Bank retains the servicing rights on the
home equity loan sales. Following the end of the third
quarter, the Bank temporarily suspended origination and
sales of home equity products with loan-to-value ratios
greater than 100 percent due to volatility within the
secondary market. The Bank is pursuing alternate outlets
for selling these loans, and with a stabilization of the
secondary market, will reenter this line of business during
the fourth quarter of 1998. Management is confident that
the current pipeline of loans has a market value that
exceeds cost.
As required by SFAS No. 115, Accounting for
Certain Investments in Debt and Equity Securities, First
Indiana continually reassesses the classification of securities
as either available-for-sale or held-to-maturity. During the
third quarter of 1998, management changed its positive
intent to hold held-to-maturity investments and mortgage-backed
securities. Accordingly, the entire portfolios of
mortgage-backed securities with an amortized cost of
$19,274,000 and investment securities with an amortized
cost of $5,243,000 were transferred from held-to-maturity
to available-for-sale. At the time of the transfer, these
securities had unrecognized gains of $374,000 and
$86,000, respectively, which are included as a separate
component of comprehensive income. Management
elected to move these securities which had been previously
designated as held-to-maturity based on major,
unanticipated shifts in the economic environment which had
a significant impact not on the interest-rate or credit risk of
the securities, but on the expected life of the securities.
This extreme, unforeseen volatility make flexibility and the
ability to closely manage these securities key in the Bank's
overall financial strategies. During the third quarter, the
Bank sold mortgage-backed securities totaling $23,115,000
from the available-for-sale portfolio at a gain of $368,000.
<PAGE> 13
Loan servicing income for the three and nine
months ended September 30, 1998 decreased $343,000
and $853,000 from the comparable periods in 1997. This
decrease primarily occurred as a result of the Bank's
amortization of mortgage servicing rights, coupled with
servicing sales and a general decline in the servicing
portfolio. During the second quarter of 1998, the Bank
recognized a gain of $260,000 on the sale of loan servicing
rights.
Loan fees increased $326,000 and $504,000 for the
three and nine months ending September 30, 1998 when
compared with last year due to the increased activity in
the commercial and industrial portfolio.
Insurance commissions decreased $136,000 for the
nine months ended September 30, 1998 compared with last
year because of the wide availability of alternate investment
vehicles for the consumer.
Non-Interest Expense
Non-interest expense was $11,749,000 for the three
months ended September 30, 1998, compared with
$10,646,000 for the same period in 1997. Non-interest
expense for the nine months ended September 30, 1998
and 1997 was $33,557,000 and $30,810,000, respectively.
Salaries and benefits increased $596,000 and $1,418,000
during the three and nine months ended September 30,
1998 from the comparable period in 1997 in order to
provide processing and sales support to the increased
residential and consumer loan origination efforts, and to
provide normal salary increases to retain associates. A
renewed commitment to increase community awareness of
the Bank's products and services led to a marketing
expense increase of $365,000 in 1998 from the first nine
months of 1997.
Included in real estate owned operations-net are all
of the operating revenues and expenses associated with the
Corporation's real estate owned. Such net results declined
by $61,000 and $215,000 for the three and nine months
ended September 30, 1998 from one year ago due to the
increased asset balance of the consumer portion of real
estate owned.
In April 1998, Bank One and First Chicago NBD
announced that they would merge. Because both banks
have large market shares in Indianapolis, they divested
approximately $850 million in deposits to another bank.
This major consolidation within the local market has
presented the Bank with the opportunity to introduce the
Bank to new customers, launch new products into the
market, and obtain talented associates whose positions may
have been consolidated as a result of the divestiture. The
Bank, therefore, expects to see an increase in non-interest
expenses during the fourth quarter of 1998 until the
tangible benefits of such an aggressive strategy are realized.
Capital Resources and Liquidity
At September 30, 1998, shareholders' equity was
$163,061,000, or 9.38 percent of total assets, compared
with $153,036,000, or 9.49 percent, at December 31, 1997
and $149,177,000, or 9.64 percent, at September 30, 1997.
The following table shows First Indiana's strong
capital levels and compliance with all capital requirements
at September 30, 1998. First Indiana is classified as "well-
capitalized" under the OTS regulatory framework for
prompt corrective action, its highest classification. To be
categorized as "well-capitalized," the Bank must maintain
minimum total risk-based, tier one risk-based and tier one
<PAGE> 14
leverage ratios as set forth in the table. The table reflects
categories of assets includable under OTS regulations.
There are no conditions or events since the date of
classification that management believes have changed the
Bank's category.
<TABLE>
<CAPTION>
To Be Well
For FDICIA Capitalized Under OTS
(Dollars in Thousands) Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
Amount Ratio Amount Ratio Amount Ratio
<S> <C> <C> <C> <C> <C> <C>
First Indiana Bank Capital $137,209
Tangible Capital (1) $136,126 7.84% $26,034 1.50% N/A N/A
Core (Tier One) Capital 136,126 7.84% 52,068 3.00% 86,780 5.00%
Tier One Risk-Based Capital 136,126 10.14% N/A N/A 80,572 6.00%
Total Risk-Based Capital (2) 151,278 11.27% 107,430 8.00% 134,287 10.00%
(1) First Indiana Bank capital differs from tangible capital by the FAS115 equity
securities adjustment of $1,083
(2) Risk-based capital includes a $16,881 addition for general loan loss reserves and
a $1,729 deduction for land loans with loan-to-value ratios in excess of 80 percent.
</TABLE>
The Corporation paid a quarterly dividend of $.12
per common share September 16, 1998 to shareholders of
record as of September 3, 1998. This reflects an increase
from $.10 per share in 1997. For the nine months ended
September 30, 1998 the Corporation has paid $.36 per
share in dividends, compared to $.30 for the same period
in 1997. On March 6, 1998, the Corporation effected a six-for-five
stock dividend. On March 18, 1997, the
Corporation effected a five-for-four stock split. All per-share
amounts have been adjusted to reflect the stock dividends and splits.
The Corporation conducts its business through its
subsidiaries. The main source of funds for the Corporation
is dividends from the Bank. The Corporation has no
significant assets other than its investment in the Bank.
Regulations require the director of the OTS to set
minimum liquidity levels between four and 10 percent of
assets. In the fourth quarter of 1997, the regulations were
altered to lower the liquidity requirement to four percent of
net withdrawable assets, and the definition of net
withdrawable assets was simplified. This change did not
have a significant impact on the Corporation's liquidity
position. The Corporation's liquidity ratio at September
30, 1998, was 8.30 percent.
Interest-Rate Sensitivity
First Indiana engages in rigorous, formal
asset/liability management, the objectives of which are to
manage interest-rate risk, ensure adequate liquidity, and
coordinate sources and uses of funds. At September 30,
1998, the Corporation's cumulative one-year interest-rate
gap stood at 3.98 percent. This means that 3.98 percent of
First Indiana's assets will reprice within one year without
a corresponding repricing of the liabilities funding them.
<PAGE> 15
The following schedule analyzes the difference in
rate-sensitive assets and liabilities or gap at September 30,
1998 and December 31, 1997.
<TABLE>
<CAPTION>
Rate Sensitivity by Period of Maturity or Rate Change
September 30, 1998
Over 180 Over
% of Within Days to 1 Year to Over
(Dollars in Thousands) Rate Balance Total 180 Days 1 Year 5 Years 5 Years
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-Earning Assets
Investment Securities & Other 5.66%$ 151,380 9.14%$ 62,228 7,629 81,523 -
Loans Receivable (1)
Mortgage-Backed Securities 5.98% 16,634 1.00% 4,400 3,802 8,432 -
Residential Mortgage Loans 7.39% 520,469 31.44% 270,319 80,801 156,088 13,261
Commercial Real Estate Loans 8.84% 35,237 2.13% 10,308 5,597 15,014 4,318
Commercial and Industrial Loans 9.07% 162,969 9.85% 104,635 1,993 32,980 23,361
Consumer Loans 9.56% 570,048 34.44% 231,200 57,447 242,658 38,743
Residential Construction Loans 8.29% 198,563 12.00% 178,922 9,940 9,701 -
Total 8.27%$ 1,655,300 100.00% 862,012 167,209 546,396 79,683
Interest-Bearing Liabilities
Deposits:
Demand Deposits (2) 2.22%$ 80,435 5.63%$ - - - 80,435
Passbook Deposits (3) 3.00% 40,746 2.85% 1,754 1,008 8,064 29,920
Money Market Savings 4.57% 332,544 23.28% 332,544 - - -
Jumbo Certificates 5.69% 177,509 12.43% 102,531 29,431 45,547 -
Fixed-Rate Certificates 5.61% 457,420 32.03% 160,392 126,146 170,882 -
Total 4.96% 1,088,654 76.22% 597,221 156,585 224,493 110,355
Borrowings:
FHLB Advances 5.64% 287,247 20.11%$ 157,000 - 125,000 5,247
Short-Term Borrowings 5.18% 52,458 3.67% 52,458 - - -
Total 5.10% 1,428,359 100.00% 806,679 156,585 349,493 115,602
Net - Other (4) 226,941 226,941
Total $ 1,655,300 806,679 156,585 349,493 342,543
Rate Sensitivity Gap $ 55,333 $ 10,624 $ 196,903 $ (262,860)
June 30, 1998
Cumulative Rate-Sensitivity Gap $ 55,333 $ 65,957 $ 262,860
Percent of Total Interest-Earning Assets 3.34 % 3.98 % 15.88%
December 31, 1997
Cumulative Rate-Sensitivity Gap $ (10,423)$ (3,148)$ 167,284
Percent of Total Interest-Earning Assets (0.68)% (0.20)% 10.89%
(1) The distribution of fixed-rate loans is based upon contractual maturity and scheduled
contractual repayments adjusted for estimated prepayments. For adjustable-rate loans, interest
rates adjust at intervals of six months to five years. Included in Residential Mortgage Loans are
$63,627,000 of Loans Held for Sale. Included in Consumer Loans are $25,783,000 of Home
Equity Loans Held for Sale.
(2) These deposits have been included in the Over 5 Years category to reflect management's
assumption that these accounts are not rate-sensitive. This assumption is based upon historic
trends of these deposits through periods of significant increases and decreases in interest rates
without changes in rates paid on these deposits. Included in this category are NOW, money
market checking and non-interest bearing deposits. The rate represents a blended rate on all
deposit types in the category.
(3) A portion of these deposits has been included in the Over 5 Years category to reflect
management's assumption that these accounts are not rate-sensitive. This assumption is based
upon the historic minimal decay rates on these types of deposits experienced through periods of
significant increases and decreases in interest rates without changes in rates paid on these
deposits.
(4) Net Other is the excess of other non-interest-bearing liabilities and capital over other non-interest-bearing
assets.
</TABLE>
<PAGE> 16
Year 2000 Readiness
The Bank is required by the Federal Financial
Institutions Examination Council ("FFIEC") to assess both
the Bank's and its vendors' ability to be Year 2000 ready
by December 31, 1998. The Year 2000 issue refers to
shortcomings which exist in some current computer
hardware and software that preclude the correct calculation
of date-sensitive information from, into, and between the
twentieth and twenty-first centuries, including leap year
calculations. Because the Bank relies heavily on
technology for transaction processing and interest
calculation, preparing for the Year 2000 is a critical focus
of the Bank's resources. In addition to testing the
technology, the Bank also has embedded systems in
elevators, alarm systems, and HVAC units which must be
checked for Year 2000 readiness.
The Bank has assembled a team of associates which
meets regularly to lead the Bank's Year 2000 readiness
efforts. All hardware and software vendors, as well as
significant other vendors and borrowers, have been
identified and contact has been initiated with these
individuals or companies. The Bank has an inventory of
known potential Year 2000 readiness issues, and has
developed action plans and contingency plans for each
issue. During 1998, the Bank is testing systems for the
purpose of validating Year 2000 readiness, upgrading or
replacing existing hardware, software, or embedded
systems, and implementing contingency plans in the event
a particular vendor or borrower will not assist the Bank in
its Year 2000 efforts. The team is monitoring significant
vendor and borrower relationships to ensure that no issues
arise which cause management to question the ability of the
vendor or borrower to adequately prepare for the Year
2000, and thus possibly impact the Bank's own ability to
conduct business beyond the century change.
The OTS is conducting quarterly audits of all
financial institutions to assess Year 2000 readiness in
accordance with FFIEC guidelines. The Bank uses an
external data services bureau which provides most of the
automated processing of First Indiana's customer
transactions. The service bureau is also being examined by
the OTS.
The Bank is scheduled to complete an upgrade of
all personal computers in the fourth quarter at a cost
approximating $550,000. Although management sees no
internal impact or risk to the Bank's ability to operate in
the 21st century, it is not possible to assess the financial
impact of lost revenue due to Year 2000 issues or future
expenditures due to external factors at this time.
Financial Condition
Total assets at September 30, 1998, were
$1,738,652,000, an increase from $1,613,405,000 at
December 31, 1997.
Net loans receivable at September 30, 1998, were
$1,462,763,000, compared with $1,348,529,000 at
December 31, 1997. The predominant growth in loans
occurred in the commercial and industrial and home equity
portfolios, which amounted to $162,969,000 and
$554,962,000 at September 30, 1998, respectively.
Mortgage-backed securities decreased $21,645,000 to
$16,634,0000 at September 30, 1998 due primarily to the
third quarter sales discussed previously.
In the past nine months, consumer loans increased
$22,032,000, primarily as the Bank built a portfolio of
available-for-sale fixed-rate home equity loans and
expanded its origination channels. The Corporation's
residential loan servicing portfolio amounted to
$954,342,000 at September 30, 1998, compared with
$977,827,000 at September 30, 1997.
<PAGE> 17
Total deposits were $1,211,714,000 at September
30, 1998, compared with $1,107,555,000 at December 31,
1997. Non-interest-bearing deposits consist of retail and
commercial checking accounts, as well as official checking
accounts. Commercial checking accounts are expected to
become a more significant source of funds as the Bank
expands its commercial and industrial portfolio and the
related business services unit. Included in commercial
checking accounts at September 30, 1998 and December
31, 1997 were approximately $8,854,000 and $4,624,000
of escrow balances maintained for loans serviced for
others. These balances represent principal, interest, taxes
and insurance that require separate maintenance at the
request of the investor. Official checking accounts
included in total deposits at September 30, 1998 and
December 31, 1997 were $56,159,000 and $32,517,000,
respectively. Federal Home Loan Bank advances totaled
$287,247,000 at September 30, 1998, compared with
$257,458,000 at December 31, 1997.
The Corporation also uses short-term repurchase
agreements as sources of funds. Borrowings will continue
to be used in the short run to compensate for periodic or
other reductions in deposits or inflows at less than
projected levels, and long-term to support mortgage
lending activities.
<PAGE> 18
Disclosures About Market Risk
The Corporation's success is largely dependent
upon its ability to manage interest-rate risk, which is
defined as the exposure of the Corporation's net interest
income and net earnings to changes in interest rates. The
Bank's Asset/Liability Committee ("ALCO") is responsible
for managing interest-rate risk and the Corporation has
established acceptable limits for interest-rate exposure,
which are reviewed on a monthly basis. The Bank uses a
model which measures interest-rate sensitivity to determine
the impact on net earnings of immediate and sustained
upward and downward movements in interest rates.
Incorporated into the model are assumptions regarding the
current and anticipated interest rate environment, estimated
prepayment rates of certain assets and liabilities, forecasted
loan and deposit originations, contractual maturities and
renewal rates on certificates of deposits, estimated
borrowing needs, anticipated loan loss provision, projected
secondary marketing gains and losses, expected repricing
spreads on variable-rate products, and contractual
maturities and repayments on lending and investment
products. The model incorporates interest-rate sensitive
instruments which are held to maturity or available for sale.
The Bank has no trading assets. Based on the information
and assumptions in effect at September 30, 1998,
management believes that a 100 basis point increase or
decrease in interest rates over a 12 month period would
result in a 6.4 percent increase and a 9.2 percent decrease
in net earnings, respectively, because of the change in net
interest income. Because of the numerous assumptions
used in the computation of interest-rate sensitivity, and the
fact that the model does not assume any actions the ALCO
could take in response to the change in interest rates, the
results should not be relied upon as indicative of actual
results.
The Bank enters into forward sales contracts for
future delivery of residential fixed-rate mortgage loans at
a specified yield in order to limit market risk associated
with its pipeline of residential mortgage loans held for sale
and commitments to fund residential mortgage loans.
Market risk arises from the possible inability of either party
to comply with the contract terms.
The Bank designates these forward sales contracts
as hedges. To qualify as a hedge, the forward sales
contract must be effective in reducing the market risk of
the identified anticipated residential mortgage loan sale
which is probable to occur. Effectiveness is evaluated on
an ongoing basis through analysis of the residential
mortgage loan pipeline position. Commitments under these
forward sales contracts and the underlying residential
mortgage loans are valued, and the net position is carried
at the lower of cost or market. Unrecognized gains and
losses on these forward sales contracts are generally
immaterial and are charged to current earnings as an
adjustment to the gain or loss on residential mortgage loan
sales when realized, when the contract matures, or is
terminated.
<PAGE> 19
Other Information
Items 1, 2, 3 and 4 are not applicable.
Item 5. When used in this Form 10-Q, the words "believes,"
"expects," "estimates," "will likely result," or "will continue"
and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks and
uncertainties which could cause actual results to differ
materially. In particular, among the factors that could
cause actual results to differ materially are general business and
economic conditions, competitive and regulatory factors, credit
risks of lending activities, and interest rates. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The
Corporation undertakes no obligation to publicly release the
results of any revisions to these forward-looking
statements which may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of
unanticipated events.
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits Financial Data Schedule
(b) Reports on Form 8-K There were no reports on
Form 8-K filed during the nine months ended
September 30, 1998.
<PAGE> 20
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.
First Indiana Corporation
November 6, 1998 /s/Owen B. Melton, Jr.
Owen B. Melton, Jr.
President
November 6, 1998 /s/David L. Gray
David L. Gray
Vice President and
Treasurer
<PAGE> 21
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements for the six months ended June 30, 1998 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1998
<CASH> 37,750
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 22,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 146,014
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 1,487,286
<ALLOWANCE> 24,523
<TOTAL-ASSETS> 1,738,652
<DEPOSITS> 1,211,714
<SHORT-TERM> 174,458
<LIABILITIES-OTHER> 24,172
<LONG-TERM> 165,247
0
0
<COMMON> 135
<OTHER-SE> 162,926
<TOTAL-LIABILITIES-AND-EQUITY> 1,738,652
<INTEREST-LOAN> 95,318
<INTEREST-INVEST> 5,626
<INTEREST-OTHER> 466
<INTEREST-TOTAL> 101,410
<INTEREST-DEPOSIT> 41,366
<INTEREST-EXPENSE> 54,771
<INTEREST-INCOME-NET> 46,639
<LOAN-LOSSES> 7,460
<SECURITIES-GAINS> 387
<EXPENSE-OTHER> 33,557
<INCOME-PRETAX> 22,976
<INCOME-PRE-EXTRAORDINARY> 22,976
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,038
<EPS-PRIMARY> 1.10
<EPS-DILUTED> 1.06
<YIELD-ACTUAL> 3.85
<LOANS-NON> 15,468
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 10,641
<ALLOWANCE-OPEN> 22,414
<CHARGE-OFFS> 6,205
<RECOVERIES> 854
<ALLOWANCE-CLOSE> 24,523
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 6,945
</TABLE>
