UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the period ended June 30, 1997
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 0-23134
PEOPLES BANK CORPORATION OF INDIANAPOLIS
(Exact name of registrant as specified in its charter)
Indiana 35-1681096
- --------------------------------------------------------------------------------
(State of other jurisdiction (I.R.S. Employer
of incorporation or organization) identification no.)
130 East Market Street Indianapolis, Indiana 46204
- --------------------------------------------------------------------------------
(Address of principal (Zip Code)
executive offices)
(317) 237-8121
(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. X Yes No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date.
Common Shares, without par value
Nonvoting - 2,833,282 shares as of August 12, 1997
Voting - 280,000 shares as of August 12, 1997
<PAGE>
PEOPLES BANK CORPORATION OF INDIANAPOLIS
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at June 30, 1997
and December 31, 1996 ................................................2
Consolidated Statements of Income for three months ended
June 30, 1997 and 1996 ...............................................3
Consolidated Statements of Changes in Shareholders'
Equity................................................................4
Consolidated Statements of Cash Flows for three months ended
June 30, 1997 and 1996 ...............................................5
Notes to Consolidated Financial Statements ...........................6
Item 2. Management's Discussion and Analysis of Results of Operations
and Financial Condition ..........................................7-14
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders...................15
Item 6. Exhibits and Reports on Form 8-K .....................................15
Signatures....................................................................16
<PAGE>
PEOPLES BANK CORPORATION OF INDIANAPOLIS
CONSOLIDATED BALANCE SHEETS
================================================================================
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
--------------- --------------
<S> <C> <C>
Assets
Cash and due from banks $19,416 $32,252
Federal funds sold 12,300 0
--------------- --------------
Total cash and equivalents 31,716 32,252
Available-for-sale securities 116,559 94,589
Loans held for sale 603 421
Total loans 367,578 332,953
Allowance for loan losses (4,877) (3,900)
--------------- --------------
Loans, net 362,701 329,053
Premises and equipment, net 7,599 7,923
Accrued income and other assets 9,014 7,240
--------------- --------------
Total assets $528,192 $471,478
=============== ==============
Liabilities
Non interest-bearing deposits $70,932 $83,911
Interest-bearing deposits 395,932 327,894
--------------- --------------
Total deposits 466,864 411,805
Short-term borrowings 10,025 10,266
Accrued expenses and other liabilities 4,286 4,058
--------------- --------------
Total liabilities 481,175 426,129
Shareholders' equity Common shares, no par value:
Authorized:
Voting - 300,000 shares
Nonvoting - 4,000,000 shares
Issued:
Voting - 280,000 shares 950 950
Nonvoting - 2,833,282 shares (1997)
- 2,866,424 shares (1996) 14,051 14,775
Retained earnings 31,636 29,338
Net unrealized gain/(loss) on available-for-sale securities 380 286
--------------- --------------
Total shareholders' equity 47,017 45,349
--------------- --------------
Total liabilities and shareholders' equity $528,192 $471,478
=============== ==============
</TABLE>
See accompanying notes.
<PAGE>
PEOPLES BANK CORPORATION OF INDIANAPOLIS
CONSOLIDATED STATEMENTS OF INCOME
================================================================================
<TABLE>
<CAPTION>
(Dollar amounts in thousands, except per share data)
Three months ended Six months ended
June 30, June 30,
1997 1996 1997 1996
---------------------------------------------------------
Interest income
<S> <C> <C> <C> <C>
Interest and fees on loans $7,667 $6,326 $14,843 $12,511
Interest on federal funds sold 298 300 518 398
Interest on investments 1,537 1,264 2,873 2,633
---------------------------------------------------------
Total interest income 9,502 7,890 18,234 15,542
Interest expense
Interest on deposits 4,056 3,253 7,688 6,414
Interest on short-term borrowings 132 150 252 329
---------------------------------------------------------
Total interest expense 4,188 3,403 7,940 6,743
---------------------------------------------------------
Net interest income 5,314 4,487 10,294 8,799
Provision for loan losses 500 300 900 450
---------------------------------------------------------
Net interest income after
provision for loan losses 4,814 4,187 9,394 8,349
Other operating income
Trust fees 370 354 741 707
Service charge income 749 563 1,454 1,093
Mortgage banking revenue 109 191 236 366
Net gain (loss) on
investments (38) (1) (39) (28)
Other operating income 253 265 454 496
---------------------------------------------------------
Total other operating income 1,443 1,372 2,846 2,634
Other operating expenses
Salaries and employee benefits 2,184 2,003 4,314 3,944
Occupancy expense (net) 401 376 835 766
Equipment expense 262 255 525 516
FDIC insurance expense 17 1 29 1
Advertising Expense 149 135 273 270
Other operating expense 1,045 893 1,935 1,714
---------------------------------------------------------
Total other operating expenses 4,058 3,663 7,911 7,211
Income before income taxes 2,199 1,896 4,329 3,772
Income Taxes 681 560 1,358 1,125
Net income $1,518 $1,336 $2,971 $2,647
=========================================================
Net income per share (Note 3) $0.49 $0.42 $0.95 $0.83
=========================================================
</TABLE>
See accompanying notes.
<PAGE>
PEOPLES BANK CORPORATION OF INDIANAPOLIS
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
================================================================================
(Dollar amounts in thousands)
1997 1996
------------- ------------
Balance at January 1 $45,349 $41,636
Net Income 2,971 2,647
Cash dividends (673) (572)
Repurchase of common stock (724) 0
Change in net unrealized loss on
available-for-sale securities 94 (266)
------------- ------------
Balance at June 30 $47,017 $43,445
============= ============
<PAGE>
PEOPLES BANK CORPORATION OF INDIANAPOLIS
CONSOLIDATED STATEMENTS OF CASH FLOWS
================================================================================
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
Six months ended
June 30
1997 1996
------------ -------------
<S> <C> <C>
Cash flows from operating activities
Net Income $2,971 $2,647
Adjustments to reconcile net income to net cash
from operating activities
Depreciation and amortization 588 525
Provision for loan losses 0 450
Net loss on investment securities 39 28
Net amortization/(accretion) on investments 119 150
Net gain on the sale of loans (119) (267)
Change in interest payable and other liabilities 228 (356)
Change in interest receivable and other assets (1,970) (650)
Loans originated for sale, net of sales proceeds (62) 560
------------ -------------
Net cash from operating activities 1,794 3,087
------------ -------------
Cash flows from investing activities
Proceeds from maturities and principal
reductions of investment securities 0 0
Proceeds from sales of available-for-sale securities 14,218 2,972
Proceeds from maturities of available-for-sale securities 18,200 30,760
Purchase of available-for-sale securities (54,471) (11,891)
Loans made to customers, net of principal
collection thereon (33,648) (21,926)
Property and equipment expenditures (50) (111)
------------ -------------
Net cash from investing activities (55,751) (196)
------------ -------------
Cash flows from financing activities
Net change in deposits 55,059 33,892
Net change in short-term borrowings (241) (8,198)
Dividends paid (673) (572)
Purchase of common stock (724) 0
------------ -------------
Net cash from financing activities 53,421 25,122
------------ -------------
Net change in cash and cash equivalents (536) 28,013
Cash and cash equivalents at beginning of year 32,252 23,377
------------ -------------
Cash and cash equivalents at June 30 $31,716 $51,390
============ =============
</TABLE>
<PAGE>
Peoples Bank Corporation of Indianapolis
Notes to Consolidated Financial Statements
June 30, 1997
1. Accounting Policies
Except as noted in Note 3, the significant accounting policies followed
by Peoples Bank Corporation of Indianapolis (the "Corporation") for interim
financial reporting are consistent with the accounting policies followed for
annual financial reporting. The consolidated interim financial statements have
been prepared in accordance with instructions to Form 10-Q and may not include
all information and footnotes normally shown for full annual financial
statements. All adjustments which are, in the opinion of management, necessary
for a fair presentation of the results for the periods reported have been
included in the accompanying unaudited consolidated financial statements and all
such adjustments are of a normal recurring nature.
2. Earnings Per Share
Earnings per share are computed based upon the weighted average number
of shares outstanding during the period which were 3,129,231 and 3,136,413 for
the three and six months ending June 30, 1997, and 3,179,984 and 3,179,984 for
the three and six months ending June 30, 1996.
3. Accounting Changes
Financial Accounting Standard No. 125, Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities, was issued by
the Financial Accounting Standards Board in 1996. It revises the accounting for
transfers of financial assets, such as loans and securities, and for
distinquishing between sales and secured borrowings. It is effective for some
transactions in 1997 and others in 1998. Management does not expect adoption of
this Standard to have a significant effect on the Company's financial position
or results of operations.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
(Dollar amounts in thousands, except per share data)
General
The business of Peoples Bank Corporation of Indianapolis (the "Company")
consists of holding and administering its interest in Peoples Bank & Trust
Company ("Peoples"). The principal business of Peoples consists of attracting
deposits from consumer and commercial customers and making loans to individuals
and businesses. Peoples offers various products for depositors including
checking and savings accounts, certificates of deposit and safe deposit boxes.
Loans consist principally of loans to individuals secured by mortgage liens on
residential properties, consumer loans generally secured by personal property
and loans to businesses generally secured by liens on business assets. Peoples
also offers trust services to individuals, businesses and institutions.
The Company operates 11 branch locations, a twelve story office in downtown
Indianapolis, and an operations center. Peoples occupies five floors of the
downtown office building and leases six floors to tenants. The top floor houses
the board room and a training area. Leased tenant space at the downtown office
remains at near capacity.
The Board of Directors of the Company approved on July 18, 1996, the repurchase,
from time to time, of 100,000 nonvoting common shares on the open market. The
Board believed that the shares had been at times undervalued in the market and
that it was in the best interest of the shareholders and the Company to effect
such share repurchases. At June 30, 1997, a total of 66,702 shares had been
repurchased at an average price of $19.23.
The book value per share of Peoples nonvoting common shares at June 30, 1997,
was $15.10. For the second quarter, the low trading price per share was $21.75,
and the high trading price per share was $26.56.
On June 19,1997, Peoples declared a cash dividend in the amount of $.11 per
share, payable July 18, 1997, to shareholders of record June 30, 1997. This
dividend represents a 4.8% increase over the first quarter 1997 dividend and is
the fourth consecutive quarter in which Peoples has declared an increase in
dividends.
<PAGE>
Selected ratios and summary data.
At or for the Six Months Ended
June 30,
1997 1996
-------------- -------------
Assets $ 528,192 $ 444,337
Loans (includes loans held for sale) 368,181 295,386
Deposits 466,864 385,653
Shareholders Equity 47,017 43,445
Book value per share 15.10 13.66
Earnings per share $ 0.95 $ 0.83
Dividends per share $ 0.215 $ 0.18
Net Interest Margin (FTE) 4.65% 4.64%
Return on Average Assets 1.20% 1.25%
Return on Average Equity 12.87% 12.38%
Average Shares Outstanding 3,136,413 3,179,984
Total Shares Outstanding 3,113,282 3,179,984
Net Income
Net income for the second quarter of 1997 was $1,518 compared to $1,336 for the
second quarter of 1996, an increase of 13.62% or $182. Net income for the six
months ended June 30, 1997, was $2,971, which represents an increase of 12.24%
or $324 from net income of $2,647 for the six months ended June 30, 1996. Net
income per share for the second quarter 1997 increased $0.07 or 16.67% to $0.49
from $0.42 for the second quarter of 1996. Net income per share for the first
six months of 1997 was $0.95 compared to $0.83 for the first six months of 1996,
an increase of 0.12 or 14.46%. The increase in net income is attributable to
increases in net interest income and non-interest income which exceeded
increases in non-interest expense.
Net Interest Income
Net interest income is the principal component of net income for the Company and
represents the difference between interest earned on loans and investments and
the interest cost of deposits and other borrowed funds. For the six months ended
June 30, net interest income was $10,294 and $8,799 for 1997 and 1996,
respectively. This reflects an increase of $1,495 or 16.99%. For the second
quarter of 1997 and 1996, respectively, net interest income was $5,314 and
$4,487, an increase of $827 or 18.43%.
<PAGE>
Interest income for the six months ended June 30, was $18,234 and $15,542 for
1997 and 1996, respectively. Interest income for the second quarter of 1997 and
1996, respectively, was $9,502 and $7,890, an increase of $1,612 or 20.43%.
Total interest expense was $7,940 and $6,743 for the six months ended June 30,
1997, and 1996, respectively. For the second quarter of 1997 and 1996,
respectively, total interest expense was $4,188 and $3,403, an increase of $785
or 23.07%.
Interest and fees on loans increased from $12,511 for the first six months of
1996 to $14,843 for that period in 1997, an increase of $2,332 or 18.64%. For
the second quarter of 1997 and 1996, respectively, interest and fees on loans
were $7,667 and $6,326, an increase of $1,341 or 21.20%. These increases are
attributable to an increase in loans outstanding. Total loans were $295,386 at
June 30, 1996, compared to $368,181 at June 30, 1997, an increase of of $72,795
or 24.64 %.
The Company's net interest margin, or margin on earning assets, increased 0.06%
from 4.41% for the first six months of 1996 to 4.47% for the first six months of
1997. On a tax equivalent basis, the Company's net interest margin was 4.64% and
4.65%, respectively, for those periods. For the second quarter, the net interest
margin increased 0.04% from 4.38% in 1996 to 4.42% in 1997. On a tax equivalent
basis, the Company's net interest margin was 4.61% and 4.59% for the second
quarters of 1996 and 1997, respectively. The stability of the net interest
margin occurred at the same time that the balance sheet was growing
significantly which demonstrates that balance sheet growth was not achieved
through lower loan or higher deposit pricing.
Provision & Allowance for Loan Losses
The provision for loan losses was $900 for the first six months of 1997 as
compared to $450 for the first six months of 1996, an increase of $450 or
100.00%. The allowance for loan losses at June 30, 1997, was $4,877 or 1.32% of
total loans compared to $3,900 or 1.17% of total loans at December 31, 1996.
Gross charge-offs during the first six months of 1997 were $162 and recoveries
were $239.
The adequacy of the allowance for loan loss is evaluated at least quarterly by a
credit review officer and management based upon the review of identified loans
with more than a normal degree of risk, historical loan loss percentages, and
present and forecasted economic conditions. Management's analysis indicated that
the allowance for loan losses at June 30, 1997, was adequate to cover potential
losses on identified loans with credit problems and potential losses on the
remaining loan portfolio based on historical percentages. Peoples has made an
effort to increase the allowance through increases in the provision for loan
losses in order to increase the ratio of the allowance to total loans rather
than due to any specific decrease in credit quality.
<PAGE>
Other Operating Income
Non-interest income totaled $2,846 for the first six months of 1997, compared to
$2,634 for that period of 1996, an increase of $212 or 8.05%. Non-interest
income was $1,443 and $1,372 for the second quarters of 1997 and 1996,
respectively, an increase of $71 or 5.17%. Trust fees were $741 and $707 for the
first six months of 1997 and 1996, respectively, an increase of $34 or 4.81%.
Service charges on deposit accounts, which comprise the largest component of
non-interest income, were up for the first six months of 1997 compared with the
same periods of 1996. Service charge income was $1,454 for the six months ended
June 30, 1997, an increase of $361 or 33.03%, from $1,093 for the same period in
1996. For the three month periods ending June 30, 1997 and 1996, service charge
income was $749 and $563 respectively, an increase of $186 or 33.04%. The
increase in service charge income can be traced to a review of local market fees
during late 1996 which resulted in increases in many service charges to market
levels.
Mortgage banking revenue includes net gains and losses realized when mortgage
loans are sold into the secondary market and service fee revenue earned from
servicing those loans after they are sold. Mortgage banking revenue for the
first six months of 1997 was $236, reflecting a decrease of $130 or 35.52%,
compared to $366 for the same period in 1996. Mortgage banking revenue for the
second quarter of 1997 and 1996, respectively, was $109 and $191, a decrease of
$82 or 42.93%. The decrease in mortgage banking revenue can be associated with a
change in the bank's mortgage origination strategy. During 1996, the bank
reduced staff in this area by more than fifty percent and focused its
origination efforts on adjustable rate mortgage loans which would not be sold
into the secondary market. During the second quarter of 1996, the bank
originated $6.44 million in loans sold into the secondary market and $15.79
million in adjustable rate mortgages retained by the bank. During the second
quarter of 1997, the bank originated $3.53 million in loans sold into the
secondary market and $11.24 million in adjustable rate mortgages retained by the
bank.
Other operating income decreased during the first six months of 1997 to $454
from $496 for the same period in 1996, a decrease of $42 or 8.05%.
Other Operating Expenses
Total other operating expenses were $7,911 for the six months ended June 30,
1997, compared with $7,211 for that period in 1996. This represents an increase
of $700, or 9.71%. Total other operating expenses for the second quarter of 1997
and 1996, respectively, were $4,058 and $3,663, a increase of $395 or 10.78%.
Salary and employee benefit expense was $4,314 for the first six months of 1997,
an increase of $370 or 9.38% from 3,944 for the first six months of 1996. Salary
and employee benefit expense for the second quarter of 1997 and 1996,
respectively, were $2,184 and $2,003, an increase of $181 or 9.04%. The increase
was primarily associated with an increase in headcount and in salary and wage
rate increases.
<PAGE>
Occupancy expense was $835 for the first six months of 1997, an increase of $69,
or 9.00% from $766 for the first six months of 1996. Equipment expenses were
$525 and $516, respectively, for the first six months of 1997 and 1996, an
increase of $9 or 1.74%. Equipment expenses was $262 for the second quarter of
1997, an increase of $7 or 2.75% from $255 for the same period in 1996.
FDIC insurance expense was $17 and $1 for the second quarter of 1997 and 1996,
respectively.
Advertising expenses were $273 and $270, for the first six months of 1997 and
1996, respectively, an increase of $3 or 1.11%. For the second quarter of 1997,
advertising expenses were $149, an increase of $14, or 10.37% over the same
period in 1996. Other operating expenses were $1,935 and $1,714 for the first
six months of 1997 and 1996, respectively, an increase of $221 or 12.89%. For
the second quarter of 1997 and 1996, respectively, other operating expenses were
$1,045 and $893, an increase of $152 or 17.02%.
Income Taxes
Income taxes were $1,358 for the first six months of 1997 and $1,125 for the
first six months of 1996. On a quarterly comparison, income taxes were $681 for
the second quarter of 1997 and $560 for the second quarter of 1996. The increase
in taxes can be primarily attributed to increased profitability.
Balance sheet
Total assets were $528,192 at June 30, 1997, and $471,478 at December 31, 1996,
an increase of $56,714. The portfolio of available-for-sale securities increased
from $94,589 at December 31, 1996, to $116,559 at June 30, 1997, an increase of
$21,970 or 23.23%. The increase in the portfolio resulted from growth in deposit
exceeding loan growth. Total loans, excluding loans held for sale, increased
during the first six months of 1997 from $332,953 at December 31, 1996, to
$367,578 at June 30, 1997. This reflects an increase of $34,625 or 10.40%.
Commercial loans increased $1,945 or 1.24% from $156,755 at December 31, 1996,
to $158,700 at June 30, 1997. Real estate loans, which consist of construction
loans and permanent residental and commercial mortgages, increased $18,859 or
19.07% from $98,891 at December 31, 1996, to $117,750 at June 30, 1997. Consumer
loans increased $13,866 or 18.44% from $75,187 at December 31, 1996, to $117,750
at June 30, 1997 on strong growth in home equity lending. Loans held for sale
consist of conforming fixed rate mortgage loans that Peoples sells in the
secondary market (having retained servicing rights with respect to such loans)
and that are pending funding. Loans held for sale were $421 at December 31,
1996, compared to $603 at June 30, 1997. The amount of loans outstanding
(excluding loans held for sale) are reflected in the following table.
<PAGE>
June 30, December 31, June 30,
1997 1996 1996
-------- -------- --------
Real Estate $117,750 $ 98,891 $115,003
Commercial 158,700 156,755 108,987
Consumer 89,053 75,187 67,225
Tax exempt 2,075 2,120
2,166
Loans to Depository Institutions 0 0 0
-------- -------- --------
Total Loans 367,578 332,953 293,381
Less: Allowance for Loan Losses 4,877 3,900 3,695
-------- -------- --------
Net Loans $362,701 $329,053 $289,686
======== ======== ========
Deposits represent the primary source of funds for the Company. Total deposits
increased $55,059 or 13.37%, from $411,805 at December 31,1996, to $466,864 at
June 30, 1997. Non-interest-bearing deposits decreased $12,979, or 15.47%, from
$83,911 at December 31, 1996, to $70,932 at June 30, 1997. The Company's deposit
balances are reflected in the following table.
June 30, December 31, June 30,
1997 1996 1996
-------- -------- --------
Deposits:
Non-interest-bearing $ 70,932 $ 83,911 $ 73,798
Interest-bearing 395,932 327,894 311,855
-------- -------- --------
Total deposits $466,864 $411,805 $385,653
======== ======== ========
Total deposits/total assets 88.39% 87.34% 86.79%
<PAGE>
Short-term borrowings in the form of Federal funds and repurchase agreements are
acquired, as needed, to satisfy temporary liquidity needs. Many of the funds are
from businesses with large cash balances. Though short-term in nature,
repurchase agreements have been and continue to be a stable source of funds for
Peoples. Short-term borrowings were $10,025 at June 30, 1997, as compared to
$10,266 at December 31, 1996. This represents a decrease of $241 or 2.35%. At
June 30, 1997, all short-term borrowings were in the form of repurchase
agreements.
Total shareholders' equity increased $1,668 or 3.68% for the six months ended
June 30, 1997, to $47,017, from $45,349 at December 31, 1996. The increase in
shareholders' equity was the result of net income of $2,971, less dividends paid
of $673, plus the adoption of FAS No. 115 resulted in a $94 increase in equity,
less the repurchase of $724 of common stock.
The Company issued a 2-for-1 share split effective July 18, 1997.
Credit Quality
Nonaccrual loans are loans on which the Company no longer accrues interest.
Management places a loan on nonaccrual status when the collection of additional
interest is unlikely and the loan is not considered to be well secured and in
the process of collection. Nonperforming loans consist of loans that are on
nonaccrual status, that are 90 days or more past due as to principal or
interest, or that are restructured. If a loan is designated as a nonperforming
loan, management, as a result of delinquent status or significant concern about
the ultimate collectibility of the loan, typically ceases to recognize interest
income with respect to such loan and places it on nonaccrual status.
At June 30, 1997, Management designated $3,961 in loans as "impaired" for the
purpose of FAS No. 114. Management has further determined that all commercial
non-accrual loans will be considered as impaired.
The following table shows the composition of nonperforming loans.
June 30, December 31, June 30,
1997 1996 1996
-------- ------------ --------
Nonperforming loans:
Total nonaccrual loans $784 $234 $365
Loans past due more than
90 days and still accruing 4 49 164
---- ---- ----
Total $788 $283 $529
==== ==== ====
<PAGE>
At June 30, 1997, nonperforming loans were comprised of $322 of commercial
loans, $460 of real estate loans and $6 of consumer loans. Nonperforming loans
were comprised of $143 of commercial loans, $140 of real estate loans and $0 of
consumer loans at December 31, 1996. At June 30, 1996, nonperforming loans
consisted of $188 of commercial loans, $308 of real estate loans and $33 of
consumer loans. Asset quality continues to be an important area of focus for the
Company. Nonperforming loans as a percent of assets were 0.15% at June 30, 1997,
and 0.06% at December 31, 1996. The Company maintains asset quality through the
use of well-defined policies, underwriting criteria, and review processes.
Capital
The Company and Peoples are required to comply with capital requirements
promulgated by their primary regulators that affect their ability to pay
dividends and that can affect their operations. Those regulations require the
maintenance of specified levels of capital to total assets (leverage ratio) and
to risk weighted assets (the risk-based capital ratios). These regulations
require the maintenance of a leverage ratio of at least 3.00% and a total
risk-based capital ratio of at least 8.00%. A financial institution's deposit
insurance assessment and, in certain circumstances, operations will be affected
by its capital level. Institutions with leverage ratios of 5.00% or more and
total risk-based capital ratios of 10.00% or more are deemed to be "well
capitalized," and accordingly, pay the lowest deposit insurance assessment and
are not subject to operational restrictions as outlined within the regulation.
As of June 30, 1997, the Company's Tier I and total risk-based capital ratios
were 12.01% and 13.26%, respectively. The Company's leverage ratio was 8.90% at
June 30, 1997. As of June 30, 1997, Peoples was in excess of the minimum capital
and leverage requirements necessary to be considered a "well capitalized"
banking company as defined by Federal regulators. The Company and Peoples were
in full compliance with all regulatory capital requirements at June 30, 1997.
The following table provides the capital ratios for the entities.
At June 30, 1997
Consolidated
Bank Only Company
Total assets $524,204 $528,192
Risked-based assets 386,561 388,287
Tier I capital 39,993 47,017
Total risk-based capital 44,826 51,468
Leverage ratio 7.63% 8.90%
Tier I risk-based capital ratio 10.35% 12.01%
Total risk-based capital 11.60% 13.26%
<PAGE>
PART II. OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's Annual Meeting of Stockholders was held April 17, 1997. The
following members were elected to the Company's Board of Directors to hold
office for a period of one year or until their successors are duly chosen and
qualified. Proxy votes comprised 76% percent of the outstanding voting shares.
No shares were voted in person.
Against or Broker
Nominee For Withheld Abstain Non-votes
William. E. McWhirter 100,876 0 0 0
Gerald R. Francis 100,312 560 0 0
Charles R. Farber 100,876 0 0 0
Elbert L. Bradshaw 100,876 0 0 0
Robert B. Hirschman 100,876 0 0 0
David W. Knall 100,876 0 0 0
Mary Ellen Rodgers 100,312 560 0 0
Henry C. Ryder 99,008 1,864 0 0
Stephen R. West 100,312 560 0 0
The shareholders also ratified the Directors Stock Option Plan with 87,656
shares voting in favor of the plan and 13,220 shares voting against.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits -
27 Financial Data Schedule
B. Form 8-K - No reports on Form 8-K were filed during the quarter
ended June 20, 1997.
<PAGE>
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.
PEOPLES BANK CORPORATION
OF INDIANAPOLIS
By: /s/ William. E. McWhirter
--------------------------------
William E. McWhirter
Chairman and Chief Executive
Officer
By: /s/ Charles R. Hageboeck
--------------------------------
Charles R. Hageboeck
Senior Vice President and
Chief Financial Officer
DATE: August 14, 1997
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS
ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
</LEGEND>
<CIK> 0000796322
<NAME> Peoples Bank Corporation of Indianapolis
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-1-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1.000
<CASH> 19,416
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 12,300
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 116,559
<INVESTMENTS-CARRYING> 0
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<LOANS> 368,181
<ALLOWANCE> 4,877
<TOTAL-ASSETS> 528,192
<DEPOSITS> 466,864
<SHORT-TERM> 10,025
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<LONG-TERM> 0
<COMMON> 15,001
0
0
<OTHER-SE> 31,636
<TOTAL-LIABILITIES-AND-EQUITY> 528,192
<INTEREST-LOAN> 14,843
<INTEREST-INVEST> 2,873
<INTEREST-OTHER> 518
<INTEREST-TOTAL> 18,234
<INTEREST-DEPOSIT> 7,688
<INTEREST-EXPENSE> 7,940
<INTEREST-INCOME-NET> 10,294
<LOAN-LOSSES> 900
<SECURITIES-GAINS> (39)
<EXPENSE-OTHER> 7,911
<INCOME-PRETAX> 4,329
<INCOME-PRE-EXTRAORDINARY> 4,329
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,971
<EPS-PRIMARY> .95
<EPS-DILUTED> .95
<YIELD-ACTUAL> 7.93
<LOANS-NON> 784
<LOANS-PAST> 4
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 11,240
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</TABLE>
