<PAGE> 1
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1995
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 0-16023
NEWBERRY BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware 38-2929531
(State of incorporation) (IRS Employer Identification Number)
209 East Portage Avenue,
Sault Ste. Marie, Michigan 49783
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (906) 635-9794
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, $0.010 par value Outstanding at May 10, 1995
1,200,000 shares
page 1 of 30 pages
Exhibit index on sequentially numbered page 29
<PAGE> 2
FORM 10-Q 2
TABLE OF CONTENTS
PART I - Financial Information
Item 1. Financial Statements PAGE
Consolidated Balance Sheets 3
Consolidated Statements of Operations 5
Consolidated Statements of Cash Flows 7
Notes to the Consolidated Financial
Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Summary 9
Recent Development 10
Results of Operations 10
Liquidity and Capital Resources 20
PART II - Other Information
Item 1. Legal Proceedings 24
Item 5. Other Information
Parent Company Condensed
Financial Information 24
Item 6. Exhibits and Reports on Form 8-K 28
Signature 28
Exhibit Index 29
Item 1. Financial Data Schedule 30
The information furnished in these interim statements reflects all
adjustments and accruals which are, in the opinion of management, necessary for
a fair statement of the results for such periods, and reflect adjustments which
are solely of a normal, recurring nature. The results of operations in the
interim statements are not necessarily indicative of the results that may be
expected for the full year.
<PAGE> 3
Part I FINANCIAL INFORMATION
Item 1. Financial Statements
NEWBERRY BANCORP,INC. 3
CONSOLIDATED BALANCE SHEET
March 31,1995 and December 31,1994
(Unaudited)
<TABLE>
<CAPTION>
At At
March 31 December 31
1995 1994
ASSETS ----------- -----------
<S> <C> <C>
Cash and due from banks $ 692,920 $ 908,257
Federal funds sold 10,733 606,422
----------- -----------
Total cash and cash equivalents 703,653 1,514,679
Securities available for sale (Note 2) 19,567,700 18,658,332
Loans held for sale 4,989,795 4,129,321
Loans, net 7,687,418 4,220,633
Goodwill, net - -
Premises and equipment 385,207 373,877
Purchased mortgage servicing rights 1,960,895 1,625,889
Investment in Northern Michigan BIDCO 646,546 467,820
Other real estate owned 134,086 130,015
Other assets 697,635 706,018
----------- -----------
Total other assets 3,824,369 3,303,619
----------- -----------
TOTAL ASSETS $36,772,935 $31,826,584
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 4
4
NEWBERRY BANCORP, INC.
Consolidated Balance Sheets
March 31, 1995 and December 31, 1994
(Unaudited)
<TABLE>
<CAPTION>
At At
March 31 December 31
1995 1994
LIABILITIES AND STOCKHOLDERS EQUITY ----------- -----------
<S> <C> <C>
Deposits:
Demand - non interest bearing $ 504,026 $ 1,638,101
Demand - interest bearing 2,261,901 3,026,925
Savings 943,500 587,370
Time 11,809,272 7,875,499
----------- -----------
Total deposits 15,518,699 13,127,895
Repurchase agreements 2,809,000 -
FHLB advances 9,800,000 9,800,000
Other Bank Borrowings 1,361,157 -
Mortgage escrow 1,443,654 1,214,313
Note payable 1,000,000 1,000,000
Due to broker - 1,288,169
Other Liabilities 426,578 1,300,518
----------- -----------
Total Liabilities 32,359,088 27,730,895
----------- -----------
Commitments and contingencies
Stockholders' equity:
Preferred Stock, $0.001 par value;
Authorized - 500,000 shares;
issued 0 shares in both 1995 and 1994 -
Common stock, $0.01 par value;
Authorized - 2,500,000 shares;
issued 1,200,000 shares in 1995
and 1,172,853 shares in 1994 12,000 12,000
Surplus 2,478,270 2,478,270
Retained earnings 2,118,093 2,131,207
Unrealized gain (loss) on securities
available for sale, net of tax
of $(113,794) in 1995, and
$(270,860) in 1994. (194,516) (525,788)
----------- -----------
Total Stockholders' equity 4,413,847 4,095,689
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $36,772,935 $31,826,584
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 5
NEWBERRY BANCORP, INC. AND SUBSIDIARY 5
Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
For the Three-Month
Periods Ended
March 31, March 31,
1995 1994
---------- -----------
<S> <C> <C>
Interest income:
Interest and fees on loans $ 240,438 $ 802,532
Interest on securities:
U.S. Treasury Securities - 8,304
U.S. Government agencies 262,435 160,959
State and political subdivisions 1,802 4,563
Other securities 1,920 906
Interest on bank deposits 8,987 18,441
Interest on federal funds 16,180 21,684
---------- -----------
Total interest income 531,762 1,017,389
---------- -----------
Interest expense:
Interest on deposits:
Demand deposits 40,614 185,521
Savings deposits 18,565 52,181
Time certificates of deposit 134,651 130,047
Bank borrowings 166,469 58,892
Repurchase agreements 40,054 2,923
Interest expense on note payable 23,425 37,416
---------- -----------
Total interest expense 423,778 466,980
---------- -----------
Net interest income 107,984 550,409
Provision for loan losses 1,200 52,500
---------- -----------
Net interest income after
provision for loan losses 106,784 497,909
---------- -----------
Other income:
Security gains (losses) 23,377 (3,459)
Service charges on deposit accounts 101 22,722
Other service charges and fees 1,062 903
Foreign exchange income 12,431 47,515
Mortgage banking income 144,583 74,851
Profit from equity investment in
Northern Michigan BIDCO 46,726 77,686
Other 10,549 14,692
---------- -----------
Total other income $ 238,829 $ 234,910
---------- -----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 6
NEWBERRY BANCORP, INC. AND SUBSIDIARY 6
Consolidated Statement of Operations (Continued)
(Unaudited)
<TABLE>
<CAPTION>
For the Three-Month
Periods Ended
March 31, March 31,
1995 1994
----------- -----------
<S> <C> <C>
Other expenses:
Salaries and wages $ 79,132 $ 219,444
Employee benefits 11,321 45,828
Occupancy, net 13,785 51,901
Taxes other than income 2,817 14,400
Data processing and equip. exp. 23,700 105,263
Correspondent bank service charges 11,824 9,969
Advertising 10,125 28,505
Net expense of other real estate owned 3,215 3,092
FDIC insurance 18,150 28,389
Mortgage banking expense 15,825 87,078
Legal and audit expense 93,466 35,656
Other operating expenses 100,328 43,554
Amortization expense 0 3,184
Management fees 0 15,000
----------- -----------
Total other expenses 383,688 691,263
----------- -----------
Income before income taxes (38,075) 41,556
----------- -----------
Applicable income taxes (benefit) (24,962) (4,531)
----------- -----------
Net income $ (13,113) $ 46,087
=========== ===========
Earnings per common share (note 1) ($0.011) $0.039
=========== ===========
Weighted average shares outstanding 1,200,000 1,172,853
=========== ===========
Dividends declared per share $ --- $ ---
=========== ===========
</TABLE>
The acccompanying notes are an integral part of the financial statements.
<PAGE> 7
NEWBERRY BANCORP, INC. AND SUBSIDIARY 7
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the Three-Month
Periods Ended
March 31,
1995 1994
------------ ------------
<S> <C> <C>
Cash flow from operating activities:
Net income (loss) $ (13,113) $ 46,087
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation and amortization 28,975 25,945
Provision for loan loss 1,200 52,500
Mortgage loans originated for sale (8,441,480) (11,202,439)
Sale of mortgage loans 7,581,005 14,615,122
Net amortization/accretion on securities (4,867) (18,497)
Gain on sale of available for
sale securities (23,377) -
Loss on sale of trading account
securities - 3,459
Proceeds from sales of trading account
securities - 1,842,600
Change in:
Investment in Northern Michigan BIDCO (178,726) (77,686)
Purchased mortgage servicing rights (353,386) 10,920
Other real estate (4,071) 10
Increase in other assets (162,272) (187,898)
Decrease in other liabilities (873,940) (49,762)
------------ ------------
Net cash from (used in)
operating activities (2,444,052) 5,060,361
------------ ------------
Cash flow from investing activities:
Purchase of available for sale
securities (2,652,639) (6,442,198)
Proceeds from sales of available for
sale securities 1,814,862 80,000
Loans granted net of repayments (3,467,985) (604,088)
Premises and equipment expenditures (21,925) (19,859)
Principal paydowns on available for
sale securities 458,580 258,951
------------ ------------
Net cash from (used in)
investing activities (3,869,107) (6,727,194)
------------ ------------
Cash flow from financing activities:
Net increase in repurchase agreements 2,809,000 40,228
Net increase in deposits 2,390,804 2,661,503
Other Bank Borrowings 1,361,157 -
Net increase (decrease) in mortgage
escrow accounts 229,341 (1,550,502)
Amount due to Broker (1,288,169) -
Principal payment on notes payable - (76,000)
------------ ------------
Net cash from
financing activities 5,502,133 1,075,229
------------ ------------
Net change in cash and
cash equivalents (811,026) (591,604)
Cash and cash equivalents:
Beginning of period 1,514,679 6,455,516
End of period $ 703,653 $ 5,863,912
============ ============
Supplemental disclosure of cash flow information:
Cash paid for interest expense $ 274,340 $ 503,792
Cash paid for income taxes 852,719 -
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 8
NEWBERRY BANCORP, INC. AND SUBSIDIARY 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(1) General
See note 1 of Notes to Financial Statements incorporated by reference
in the Company's 1994 Annual Report on Form 10-K for a summary of the Company's
significant accounting policies.
The unaudited financial statements included herein were prepared from
the books of the Company in accordance with generally accepted accounting
principles and reflect all adjustments which are, in the opinion of management,
necessary to provide a fair statement of the results of operations and
financial position for the interim periods. Such financial statements generally
conform to the presentation reflected in the Company's 1994 Annual Report to
Stockholders, and reflect adjustments which are solely of a normal, recurring
nature. The current interim periods reported herein are included in the fiscal
year subject to independent audit at the end of the year.
Earnings per share are calculated based on the weighted average number
of common shares outstanding during each period as follows: 1,200,000 and
1,172,853 for the three months ended March 31, 1995 and 1994, respectively.
Stock options are considered not dilutive and therefore, not included in
earnings per share calculations.
(2) Available-for-sale Securities
The Bank's available-for-sale securities portfolio at March 31, 1995
had a net unrealized loss of approximately $296,000 as compared with a net
unrealized loss of approximately $798,000 at December 31, 1994, an improvement
of $502,000 due to an improvement in the current market value of
adjustable-rate U.S. agency guaranteed mortgage-backed securities.
Available-for-sale securities
<TABLE>
<CAPTION>
March 31, 1995
-----------------------------------------------------------
Gross Estimated
Amortized Unrealized Fair
(in thousands) Cost Gains Losses Value
- - ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. agency mortgage-backed 18,979 143 (492) 18,630
U.S. agency equity 739 14 - 753
State and municipal 101 - 101
Other equity 45 39 - 84
------- ---- ------ -------
Total investment securities
available for sale $19,864 $196 $(492) $19,568
======= ==== ====== =======
</TABLE>
<PAGE> 9
Available-for-sale securities (continued) 9
<TABLE>
December 31, 1994
-----------------------------------------------------------
Gross Estimated
Amortized Unrealized Fair
(in thousands) Cost Gains Losses Value
- - ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. agency mortgage-backed $16,818 $10 $(864) $15,964
Other U.S. agency 1,740 3 - 1,743
U.S. agency equity 739 14 - 753
State and municipal 101 - - 101
Other equity 58 39 - 97
------- --- ------ -------
Total investment securities
available for sale $19,456 $66 $(864) $18,658
======= === ====== =======
</TABLE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
SUMMARY
In the three months ended March 31, 1995, a net loss of $13,113 was
realized versus a net income of $46,087 in the same period in 1994. Net
interest income decreased from $550,409 in the 1994 period to $107,984 in the
1995 period, and other income was $238,829 in the 1995 period versus $234,910
in the 1994 period. The decline in net income was primarily the result of the
decrease in net interest income in the quarter. The reduction of net interest
income was due principally to the sale of the majority of the Bank's loan
portfolio in December 1994, and also due to decreased spread income from the
bank's securities portfolio. Other operating expense decreased to $383,688 in
the 1995 period from $691,263 in the 1994 period. Unusual operating expenses
during the three months ended March 31, 1995 were a major contributing factor
to the loss.
Net income (loss) per share in the three months ended March 31, 1995 was
($0.011), and in the three months ended March 31, 1994 was $0.039 per share.
The following table summarizes the pre-tax income of each profit center of
the Company for the three months ended March 31, 1995:
THREE MONTHS ENDED MARCH 31, 1995 PRE-TAX INCOME (LOSS) SUMMARY
<TABLE>
<S> <C>
Banking & Mortgage Banking (76,766)
Equity in earnings of
Northern Michigan BIDCO 46,726
Corporate Office (8,035)
---------
Total $(38,075)
</TABLE>
The loss of the Company for the three months ended March 31, 1995 was
principally a result of a lack of profitability from
<PAGE> 10
10
the Company's banking operations, which was only partially offset by the equity
in the earnings of Northern Michigan BIDCO and income from the mortgage banking
operation.
The following table summarizes the pre-tax income of each profit center of
the Company for the three months ended March 31, 1994:
THREE MONTHS ENDED MARCH 31, 1994 PRE-TAX INCOME (LOSS) SUMMARY
<TABLE>
<S> <C>
Community Banking:
Newberry Office: $132,362
Sault Office: (70,887)
Mortgage Banking (12,053)
Equity in earnings of
Northern Michigan BIDCO 77,686
Corporate Office (85,552)
---------
Total $ 41,556
</TABLE>
RECENT DEVELOPMENT
The Bank has applied to its banking regulators to relocate its main office
to Ann Arbor, Michigan, near the University of Michigan's Medical Center. In
connection with the Bank's sale of three branches and associated loans and
deposits in December 1994, the State of Michigan Financial Institutions Bureau
(the "FIB") has imposed certain post-closing conditions to maintain the Bank's
charter with the State of Michigan. Although it is unlikely that the
application will be granted by the earlier deadline imposed by the FIB,
management believes that an extension is likely under the circumstances. The
granting of such extension is within the sole discretion of the FIB.
If the application, or an amendment of the application is not approved,
management has committed to the FIB that it will place the Bank into voluntary
liquidation no later than June 1, 1995, or later, if the deadline is extended.
Under state law the liquidation could take up to three years. Management would
anticipate that such a liquidation would not have a material adverse effect on
the Bank's net equity. Management believes that it is unlikely that the
application will be denied.
RESULTS OF OPERATIONS
Net Interest Income
Net interest income decreased from $550,409 for the three months ended
March 31, 1994 to $107,984 for the three months ended March 31, 1995. Net
interest income fell from the year ago period because of a decrease in loans
and an increase in the cost of interest bearing liabilities. The yield on
interest earning assets decreased from 7.29% in the 1994 period to 7.02% in the
1995 period. The cost of interest bearing liabilities increased from 3.57% in
the 1994 period to 6.57% in the 1995 period, causing net interest income as a
percentage of total earning assets to decrease from 3.94% to 1.40%.
<PAGE> 11
11
Interest income
Interest income decreased from $1,017,389 in the quarter ended March 31,
1994 to $531,762 in the quarter ended March 31, 1995. The average volume of
interest earning assets decreased from $55,821,749 in the 1994 period to
$30,202,189 in the 1995 period, a decrease of 45.9%. The decreased volume of
earning assets was due to the sale of deposits in December 1994, offset by new
wholesale money market borrowings. Interest income decreased as a result of a
decrease in earning assets also as a result of the sale. The overall yield on
the loan portfolio increased from 8.39% to 10.56%. The yield on the loans
which the Bank retained was increased to compensate for their somewhat higher
risk profile.
The average volume of investment securities in the three months ended
March 31, 1995 increased 18.7% over the same periods in 1994, as the Bank's
portfolio of adjustable rate agency backed mortgage securities was increased
throughout late 1994.
The yield increased from 4.93% in the three month period ended March 31,
1994 to 5.49% in the 1995 period. The increase in yields was in line with the
general increase in interest rates between early 1994 and early 1995.
Interest Expense
Interest expense decreased from $466,980 in the three months ended March
31, 1994 to $423,778 in the 1995 period. The decrease was due to a decrease in
interest bearing liabilities as a result of the sale, only partially offset by
an increase in rates paid on deposits and borrowings. A portion of the
increase in rates was due to generally higher short term interest rates. A
shift to more heavy reliance on more expensive wholesale funds was also a
factor. The cost of funds increased from 3.57% in the 1994 period to 6.57% in
the 1995 period. The average volume of interest bearing liabilities decreased
50.6% in the 1995 period versus the 1994 period.
MONTHLY AVERAGE BALANCE SHEET AND
INTEREST MARGIN ANALYSIS
The following tables summarize monthly average balances, revenues from
earning assets, expenses of interest bearing liabilities, their associated
yield or cost and the net return on earning assets for the three months ended
March 31, 1995 and 1994.
<PAGE> 12
12
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------------------------------------------------
1995 1994
---------------------------------- --------------------------------
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Cost Balance Expense Cost
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest Earning Assets:
Short term investments:
Interest bearing deposits $ 701,641 $ 8,987 5.12% $ 1,508,052 $ 18,441 4.89%
Federal funds sold 1,167,884 16,180 5.54% 2,574,944 21,684 3.37%
Investment Securities:
Non-taxable (1) 101,046 1,802 7.13% 270,125 4,563 6.76%
Taxable 19,124,392 264,355 5.53% 13,420,807 174,322 5.20%
--------------------------------- ------------------------------
Total investment securities 21,094,963 291,324 5.52% 17,773,928 219,010 4.93%
Loans: (2) --------------------------------- ------------------------------
Commercial 1,668,210 56,011 13.43% 6,663,710 132,764 7.97%
Real Estate 5,884,341 135,965 9.24% 21,159,160 420,648 7.95%
Installment/Consumer 1,554,675 48,462 12.47% 10,224,950 244,966 9.58%
--------------------------------- ------------------------------
Total Loans 9,107,226 240,438 10.56% 38,047,821 798,379 8.39%
--------------------------------- ------------------------------
Total earning assets 30,202,189 531,762 7.04% 55,821,749 1,017,389 7.29%
--------------------------------- ------------------------------
Less allowance for possible
loan losses & deferred fees (354,367) (329,312)
----------- -----------
29,847,822 55,492,437
Mortgage servicing rights 1,754,385 1,773,425
Non earning assets 1,930,935 7,480,202
----------- -----------
Total assets $33,533,142 $64,746,064
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest Bearing Liabilities:
Deposit Accounts:
Now/S-Now $ 74,480 $ 479 2.57% $ 5,625,096 $ 35,526 2.53%
Savings 100,273 611 2.44% 5,268,641 32,423 2.46%
Canadian Dollar Savings 1,066,609 17,954 6.73% 1,919,638 19,758 4.12%
Time Under $100,000 8,329,727 134,651 6.47% 10,143,425 122,472 4.83%
Time Over $100,000 0 0 0.00% 601,500 7,576 5.04%
Borrowed Funds 12,466,545 206,523 6.63% 7,460,048 61,815 3.31%
Money Market 2,776,527 40,135 5.78% 19,041,613 149,994 3.15%
Holding company debt 1,000,000 23,425 9.37% 2,233,200 37,416 6.70%
--------------------------------- ------------------------------
Total interest bearing
liabilities $25,814,161 423,778 6.57% $52,293,161 466,980 3.57%
=============----------- ---- =============----------- ----
Net interest income $ 107,984 $ 550,409
========== ==========
Weighted average rate spread 0.48% 3.72%
===== =====
Net yield on average earning
assets 1.43% 3.94%
</TABLE>
(1) Actual yields; not adjusted for Tax-equivalent yields.
(2) For purposes of computing average yields on the loan portfolio as presented
in the above analysis, loans on non-accrual status are included in the
average loan balances.
<PAGE> 13
13
Provision for Loan Losses
Management decreased the monthly loan loss provision to a rate of $400 in
the three months ended March 31, 1995 from $17,500 in the prior-year period.
The reduction was made due to management's assessment of the adequacy of the
reserve and the low level of origination of non-guaranteed loans. The actual
loan losses were $26,625 in the three month period ended March 31, 1995 versus
$3,111 in the three month period ended March 31, 1994.
<TABLE>
<CAPTION>
Three Months Ended
March 31
1995 1994
----------------------------------------------------------
<S> <C> <C>
Provision for loan losses 1,200 52,500
Loan charge-offs 26,625 3,111
Reclassification (19,736) -
Recoveries 386 7,072
------- -------
Net increase (decrease)
in provision (44,775) 56,461
</TABLE>
<TABLE>
<CAPTION>
At At
March 31, 1994 December 31, 1994
----------------------------------------------------------
<S> <C> <C>
Total loans (1) 8,005,202 4,583,192
Reserve for loan losses 317,784 362,559
Reserve/Loans (1), % 3.97% 7.91%
</TABLE>
(1) Excludes loans held for sale.
In addition to the general loan loss reserve, the Company had a Michigan
Strategic Fund loan loss reserve balance of approximately $65,000 available at
March 31, 1995 and December 31, 1994 to offset loan losses on a group of
commercial loans amounting to approximately $564,000 at March 31, 1995 and
$534,893 at December 31, 1994. The Michigan Strategic Fund (the "MSF") is a
State of Michigan sponsored program. Under the terms of the program, the Bank
can assign, at the Bank's sole discretion, business loans to be covered by MSF
guarantees. The funds which are paid to the Bank by the MSF are held at the
Bank in a segregated account to offset such loan losses. If there are no
losses and the loans are all liquidated, the MSF would retain ownership of the
funds in the segregated account. The Bank expects to recover $10,500 of the
chargeoffs in the three months ended March 31, 1995 from the MSF loan loss
reserve balance in the near future.
Financial Accounting Standards Board ("FASB") has issued statement number
114, Accounting by Creditors for Impairment of a Loan, which must be adopted
for fiscal years beginning after December 14, 1994. The Company has not fully
analysed the impact of adopting this statement but believes that upon adoption
the impact will be not material.
<PAGE> 14
14
The following schedule summarizes the Company's nonperforming loans for
the periods indicated:
<TABLE>
<CAPTION>
At At
March 31, 1995 December 31, 1994
-------------------------------------------------------------
<S> <C> <C>
Past due 90 days and over
and still accruing:
Real estate 77,117 76,576
Installment 16,463 92,947
Commercial 135,302 112,219
--------- -------
Subtotal 228,882 281,742
Nonaccrual loans:
Real estate 108,056 108,056
Installment - -
Commercial 8,520 4,893
------- -------
Subtotal 116,576 112,949
Other real estate owned 134,086 130,015
--------- ---------
Total 479,544 524,706
As % of loans (1) 5.99% 11.45%
Ratio of reserve for loan
losses to all loans
90 days and over 92.0% 91.9%
</TABLE>
(1) Excluding loans held for sale.
Economic conditions in the Bank's primary market area appear to have
stabilized in the period. The growth in the Sault Ste. Marie area appears to
have ceased; however, the Newberry area appears to be growing following the
announcement of the establishment of a major prison complex in the town by the
State Department of Corrections. The full impact of the prison complex on the
local economy is likely to be felt later in the year, when it is fully staffed.
The sale of the bulk of the Bank's loan portfolio leaves the Bank with a larger
than average loan loss reserve and a larger than average ratio of
underperforming loans.
Management believes that the current reserve level and the ongoing loan
loss reserve for loan losses is adequate to absorb future losses inherent in
the loan portfolio, although the ultimate adequacy of the reserve is dependent
upon future economic factors beyond the Company's control. A downturn in the
general nationwide economy will tend to aggravate, for example, the problems
of local loan customers currently facing some difficulties. A general
nationwide business expansion could conversely tend to diminish the severity
of any such difficulties.
<PAGE> 15
15
Non-Interest Income
Total non-interest income increased to $238,829 for the three months ended
March 31, 1995 from $234,910 for the three months ended March 31, 1994. The
increase was principally a result of a $69,732 increase in the Bank's mortgage
banking income, and an increase in securities gains, which was partially offset
by a $30,960 decrease in the Company's share of the profit from the equity
investment in Northern Michigan BIDCO and decreases in other fee income related
to the sale of three branches in December 1994.
Securities. During the three months ended March 31, 1995 a realized gain
of $15,330 was booked by the Company, with total proceeds of $74,367, on the
sale of shares in Banco de Galicia, a leading Argentine bank (NASDAQ - BGALY)
from the trading portfolio. At March 31, 1995, the Company had an unrealized
gain on its equity portfolio of $39,968.
During the three months ended March 31, 1995, three securities totalling
$1,746,515 were sold from the Bank's available-for-sale securities portfolio
with a gross realized gain of $8,047 and no losses. During the quarter, the
Bank liquidated its position in monthly adjusting agency debentures. The Bank
still has a position in agency backed CMOs indexed monthly to the 11th District
Cost-Of-Funds Index and agency backed CMOs indexed to the one year CMT (the
"ARM Securities Portfolio"). At March 31, 1995, approximately $19,000,000 of
the Bank's portfolio was invested in variable-rate U.S. agency mortgage backed
securities. The decrease in early 1995 in short term interest rates has
increased the market value of the Bank's ARM Securities Portfolio from an
unrealized loss of $851,000 at December 31, 1994 to an unrealized loss of
$349,000 as of March 31, 1995, an increase in value of $502,000. In the past
month, this positive trend has continued, and at April 30, 1995, the unrealized
loss in the Bank's ARM Securities Portfolio has decreased further to $221,757.
Management made the decision in December 1994, at the time of the sale, to
hold onto the Bank's ARM Securities Portfolio, although its cost of funds to
carry the portfolio at the time exceeded the yield on the portfolio. During
the first quarter of 1995, the yield on the Bank's taxable investment
securities was 5.49%, versus the cost of borrowed funds of 6.63% and CDs of
6.47%. As the rates on the ARM Securities Portfolio adjust over the next
several months, the yield will increase, and it is expected that the Bank's ARM
Securities Portfolio should ultimately yield between 1-2% over the cost of
funds, unless short term interest rates again increase sharply, as they did
throughout 1994. The negative net interest income on the ARM Securities
Portfolio had a substantial negative impact on profitability in the first
quarter, however, a portion of the return in these securities over the past
quarter was expected by management to be an increase in market value, which was
$502,000 in the first quarter of 1995.
Foreign Exchange. Foreign exchange revenues decreased to $12,431 for the
three months ended March 31, 1995 from $47,515 in the 1994
<PAGE> 16
16
period, as a result of the sale of the three bank branches in December 1994.
Mortgage Banking. Mortgage banking income increased to $144,583 in the
three months ended March 31, 1995 from $74,851 in the three months ended March
31, 1994. Sharply decreased loan purchase and origination volumes during the
1995 period were offset by an increase in return from the Bank's investment in
FHLMC single family mortgage loans serviced for others, and a recovery of
$58,058 previously charged to income on loans held for sale as a result of an
increase in the market value of the loans held for sale.
At March 31, 1995, the Bank serviced $150,074,735 of FHLMC mortgages for
others and owned servicing rights on another $29,995,997 subserviced by an
affiliate of the BIDCO, versus $150,627,733 at December 31, 1994. The
following table summarizes the portfolio by type and mortgage note rate:
<TABLE>
<CAPTION>
($ in 000s) FIXED RATE - BY MATURITY
--------------------------------------------------------------
MORTGAGE RATE (%) ARMs UNDER 10 10-25 OVER 25
<S> <C> <C> <C> <C>
9.00 and up - 42 113 3,939
8.50 - 8.99 117 567 576 20,085
8.00 - 8.49 89 546 1,664 30,571
7.50 - 7.99 753 450 3,634 47,865
7.00 - 7.49 891 572 14,253 23,277
6.50 - 6.99 4,733 1,097 11,277 6,084
6.00 - 6.49 2,755 661 1,786 474
under 6.00 825 293 82 -
------ ------ ------ -------
10,163 4,227 33,385 132,295
Current market
interest rates 7.50% 7.60% 7.82% 8.28%
Average annual
servicing fee 0.56% 0.30% 0.29% 0.26%
</TABLE>
If interest rates were to decline to levels briefly seen during the Summer
of 1993, the portfolio would experience significant refinancings and payoffs,
which would hurt income.
<TABLE>
<CAPTION>
Mortgage Payoffs
<S> <C>
First Quarter 1994 $5,347,079
Second Quarter 1994 3,358,617
Third Quarter 1994 1,539,680
Fourth Quarter 1994 1,544,922
First Quarter 1995 765,480
</TABLE>
<PAGE> 17
17
If interest rates were to stay at current levels, refinancings and payoffs
would likely increase over recent experience since approximately 20% of the
fixed rate mortgages being serviced carry interest rates within 0.5% of the
current market rate. Based on recent comparable sales and indications of
market value from industry brokers, management believes that the current market
value of the Bank's portfolio of mortgage servicing rights exceeds cost by
approximately $440,000 to $600,000. Market interest rate conditions can
quickly affect the value of mortgage servicing rights in a positive or negative
fashion, as long term interest rates rise and fall. A portion of the Bank's
ARM Securities Portfolio acts as a hedge against repayments of mortgage
servicing rights.
At March 31, 1995, the Bank had outstanding purchase commitments to buy
single family FHLMC qualifying mortgage loans of $3,811,000 and outstanding
forward commitments to deliver FHLMC mortgage-backed securities of $5,380,000,
substantially all of which commitments were for delivery within three months or
less. The following tables summarize mortgage banking activity for the three
months periods ending March 31, 1995 and 1994:
<TABLE>
<CAPTION>
(amounts in $000s) Three Months Ended
March 31
1995 1994
-----------------------------
<S> <C> <C>
Net servicing originated (553) 3,434
Bulk servicing purchased 29,996 -
------ ------
Net increase in servicing 29,443 3,434
====== ======
<CAPTION>
(amounts in $000s) March 31, December 31,
1995 1994
----------------------------------------------------------
<S> <C> <C>
Total servicing (1) 180,071 150,628
Book value of servicing 1,961 1,626
Estimated market value
of servicing:
Management estimate (2) 2,527 2,162
Discounted cash flow (3) 2,111 1,910
Estimated excess of market
over book value (4) 150-566 536-284
</TABLE>
(1) Includes servicing related to FHLMC qualified loans held for delivery of
$4,989,795 at March 31, 1995, $4,129,321 at December 31, 1994.
(2) Assumes a price based upon market transactions at March 31, 1995 and
December 31, 1994 of 5.8x (5.8 times the servicing fee) for 30-year
production, 4.8x for 15-year production and 3.1x for Balloon servicing and
3.2x for ARM servicing. A discount of 1x is subtracted for servicing on
California properties.
Table continued on following page
<PAGE> 18
18
(3) Uses net present value analysis of future cash flows, discounted back at
13.14% (the original rate used to price the bulk portfolio purchased in
1993).
(4) Range based upon the two methods used in (2) and (3), above.
- - --------------------------
During 1994 and early 1995, market transactions for servicing rights show a
trend to increased prices.
In the first quarter, the Bank acquired a $30,000,000 portfolio of low
coupon 1993 servicing on properties located in California for 1.04% of unpaid
principal balance, which is being subserviced by a subservicing firm to which
the BIDCO has a loan investment with equity participation. The Bank has
recently added some new mortgage correspondents. In addition, the Bank
recently began selling B and C impaired credit quality loans to a
correspondent. Recent origination activity subsequent to quarter-end has
increased and management anticipates that its monthly mortgage origination
activity will increase in the second quarter of 1995 from the depressed levels
of the first quarter. Farmer Mac, the AgFirst Farm Credit Bank and FNMA have
announced that they expect to begin pooling Farmer Mac Guaranteed Rural Housing
Loans beginning August 1, 1995, and the Bank expects to participate as a
nationwide seller under the program. The Bank owns over 1% of Farmer Mac's
outstanding common stock.
Northern Michigan BIDCO. Northern Michigan BIDCO (the "BIDCO") invests in
businesses in Northern Michigan with the objective of fostering job growth and
economic development. As of March 31, 1995, the BIDCO had made fourteen such
investments, amounting to a total of $7,025,000 at original cost. At March 31,
1995, the BIDCO had total assets of $6,746,260 (treating three companies of
which the BIDCO maintains a controlling interest on a non-consolidated basis).
For the three months ended March 31, 1995 and 1994, the Bank's 43.08% equity
share in the earnings of the BIDCO's reported net income was $46,726 and
$77,686, respectively.
The Bank owns 280 shares of common stock in the BIDCO, currently
representing a 43.08% equity interest. In January 1995, the Company purchased
$132,000 principal amount of the BIDCO's 9% convertible debentures at par
value, thereby increasing the Company's consolidated fully diluted ownership in
the BIDCO to 13.89% from 10.57%.
Northern Michigan BIDCO makes its investments in the form of loans or
direct equity investments, or a combination thereof. The BIDCO's limit on its
investment in one borrower is currently $500,000, and the BIDCO arranges
participations for investments in excess of this amount. The Bank is
restricted from investing or lending to a business that the BIDCO finances.
The BIDCO typically receives warrants or participation rights in the companies
in which it invests. To date, investments (at original investment cost) have
been made in the following types of businesses:
<PAGE> 19
19
Northern Michigan BIDCO, investments:
<TABLE>
<CAPTION>
Equity
Industry Amount Participation?
<S> <C> <C>
ABC-TV affiliate $ 300,000 yes
Adult foster care 40,000 no
Cable TV 350,000 yes
Children's clothing manufacturer 200,000 yes
Environmental engineering 100,000 yes
Hotel 300,000 yes
Loan subservicing 450,000 yes
Mining equipment manufacturer 80,000 no
Paper converting plant 500,000 yes
Paper recycle pulp mill 780,000 yes
Plastic injection molding 2,000,000 no (paid-off)
Railroad boxcar leasing 1,300,000 no
Railcar equipment manufacturing 125,000 yes
Tissue paper mill 500,000 yes
---------
Total $7,025,000
==========
</TABLE>
At March 31, 1995, the BIDCO had the following outstanding conditional
commitments to lend:
<TABLE>
<S> <C>
Cable TV (add-on) $150,000
-------
Total $150,000
=======
</TABLE>
The BIDCO recently received federal government approval of an
application for $2,000,000 in funding in the form of a 1% 30-year loan to a
non-profit affiliate of the BIDCO, Northern Michigan Foundation (the
"Foundation"). The Foundation will be lent this money at 1% interest for 30
years. The Foundation will relend this money to businesses in Northern
Michigan to promote economic development and to create jobs for low and
moderate income individuals. It is anticipated that an increasing portion of
the BIDCO's normal operating expenses will be absorbed by the Foundation.
Non-Interest Expense
Non-interest expense decreased from $691,263 in the three months ended
March 31, 1994 to $383,688 for the three months ended March 31, 1995. Such
decrease was primarily the result of the sale of three branches of the Bank in
December 1994. Certain unusual expenses negatively impacted the 1995 first
quarter. Legal expenses of the Bank were $69,844 in the 1995 period versus
$11,409 in the 1994 period, resulting from foreclosure expenses and a related
lender liability countersuit related to one case, since decided in the Bank's
favor. Approximately $25,000 in extra temporary personnel expenses were
incurred in the 1995 period as a result of short term personnel requirements
following the sale. Non-interest operating expense for
<PAGE> 20
20
only the parent company decreased from $49,555 for the three month 1994 period
to $10,767 for the 1995 period. Management fees and goodwill amortization
expense previously incurred at the holding company level were discontinued due
to the sale. Legal and audit expenses were also lower.
Liquidity and Capital Resources
Parent Company Liquidity:
At year-end 1994, Newberry Bancorp, Inc. held cash and marketable equity
securities of $151,922. This increased by $75,243 to $227,165 at March 31,
1995. The increase in cash and marketable equity securities was due to
intercompany tax transfers. During the three months ended March 31, 1995 no
dividends were paid from the Bank, as a result of low profitability at the
Bank. Dividends from the Company's bank subsidiary together with earnings from
the cash and marketable equity securities held by the parent company are the
principal sources of income used to fund the parent company's indebtedness
owing to BankOne Milwaukee, N.A. ("BankOne"), which amounted to $1,000,000 at
March 31, 1995 and at December 31, 1994. The Company's bank debt currently
calls for a balloon maturity on June 1, 1995, however, the Company has applied
for a renewal based upon its application to establish a branch in Ann Arbor,
Michigan, and management currently expects such renewal to be granted. If not,
the Bank would pay a special dividend from retained earnings to pay off the
balance.
<PAGE> 21
21
Capital Resources:
The following table sets forth the Bank's risk based assets, and the
capital ratios and risk based capital ratios of the Bank and Company.
NEWBERRY STATE BANK
Risk Adjusted Assets & Risk Adjusted Capital Ratio at March 31, 1995
($ in 000's)
- - -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Risk Adj.
Value Risk Asset
Asset (000's) Weight Value
- - --------------------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Cash and Fed Funds 11 0% 0
U.S. and Canadian Treasuries 0 0% 0
U.S. Gov't Agency Securities 1,779 0% 0
Reserve for Loan Losses (318) 0% 0
U.S. Gov't Sponsored Agency Securities 17,604 20% 3,521
U.S. Gov't Guaranteed Loans 525 20% 105
Balances at Domestic and Canadian Banks 693 20% 139
General Obligation Municipal Securities 101 20% 20
1-4 Family Mortgage Loans 8,642 50% 4,321
Municipal Revenue Bonds 0 50% 0
All Other Loans 3,828 100% 3,828
All Other Securities 0 100% 0
Real Estate Owned 134 100% 134
Premises & Equipment 381 100% 381
Mortgage Servicing Rights 1,961 100% 1,961
Other Assets 1,120 100% 1,120
- - --------------------------------------------- -------
TOTAL ASSETS 36,461
=======
Off Balance Sheet Items:
Letters of Credit and Committments 700 100.00% 700
Foreign Exchange Contracts 1,058 0.50%(1) 5
Interest Rate Contracts 0 0.00%(1) 0
FHLMC Loan Purchase Committments 1,654 50.00% 827
MBS FHLMC Forward Sell Committments 2,022 0.00%(1) 8
Agency Guaranteed Commercial Loans Sold 231 20.00% 46
-------- --------- -------
TOTAL RISK-ADJUSTED ASSETS 17,116
=======
CAPITAL RESOURCES 0
Shareholders Equity, GAAP 5,313 5,313
Unrealized Loss on AFS Securities (221) (221)
Investment in Unconsolidated Subsidiary 519 519
------- -------
Total Equity (Tier 1) 5,611 5,611
Qualifying Loan Loss Reserve (Tier 2) 214 214
------- -------
Regulatory Capital (Tier 1 & Tier 2) 5,825 5,825
======= =======
Primary and Total Capital Ratio (Leverage) 16.26%
=======
Risk-adjusted Capital Ratio (Tier 1) 32.78% 32.78%
======= =======
Risk-adjusted Capital Ratio (Tier 2) 34.03% 34.03%
======= =======
Newberry Bancorp Consolidated
Total Capital Ratio (Leverage Ratio) 11.36%
=======
</TABLE>
(1) Plus market value, or replacement cost valuation, as required.
<PAGE> 22
22
The Newberry State Bank Liquidity:
The Company's primary sources of liquidity are customer deposits,
scheduled amortization and prepayments of loan principal, cash flow from
operations, maturities of various investments, the sale of loans held for sale,
reverse repo credit lines secured by securities, and overnight fed funds credit
lines from correspondent banks. In addition, the Bank invests in overnight
Federal Funds. At March 31, 1995, the bank had cash and due from banks and fed
funds on hand of $700,000. At March 31, 1995 the Bank had available overnight
fed funds lines of $2,600,000. In order to bolster liquidity, the Bank has
also sold brokered CDs from time to time.
Impact of Inflation
The primary impact of inflation on the Company's operations is reflected
in increased operating costs. Because the assets and liabilities of the
Company are primarily monetary in nature, changes in interest rates have a more
significant impact on the Company's performance than the general effects of
inflation. However, to the extent that inflation affects interest rates, it
also affects the net income of the Company.
Last year's sharp rise in short term interest rates led to an increase in
funding cost of the Bank's ARM Securities Portfolio and a decrease in
unrealized market value of this portfolio. In the short run, the rise in
interest rates has depressed net interest income and will continue to do so
until the interest rates on these securities reprice by adjusting upward at the
scheduled repricing dates.
Rising long term and short term interest rates tends to increase the value
of the Bank's investment in mortgage servicing rights and improve the Bank's
current return on such rights by lowering required amortization rates on them.
However, rising interest rates tends to decrease new mortgage origination
activity, negatively impacting current income from mortgage banking operations.
The table on page 23 details the Bank's asset/liability sensitivity as of March
31, 1995.
<PAGE> 23
<TABLE>
<CAPTION>
The Newberry State Bank 23
Asset/Liability Position Analysis
($ in 000s)
Maturing or Repricing in
-------------------------------------------------------
Under 91 Days- 1-5 Over 5 All Total
3 Months 1 Year Years Years Others
-------- -------- -------- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
- - ------
Fed Funds 11 11
Loans (1) 542 1,280 2,733 26 (1) 4,581
Securities 6,527 13,176 15 12 792 20,522
Loans held for sale 4,990 4,990
Matured Loans 233 233
Variable Loans 2,597 2,597
Other Assets 2,886 2,886
Cash & Due 476 217 693
Overdrafts 166 166
Non Accrual Loans 117 117
Valuation Adjustment (335) (335)
------ ------ ------ ------ ------ ------
15,542 14,456 2,748 38 3,677 36,461
LIABILITIES
- - -----------
Other CDs 7,750 3,999 60 11,809
MMDA 2,309 2,309
Now & S-Now 4 10 58 72
Demand & Escrows 1,948 1,948
Savings 96 96
Can$Savings 847 847
Other Liabilities 333 333
Repos & Borrowings 13,970 13,970
Equity 5,077 5,077
------ ------ ------ ------ ------ ------
24,976 4,009 118 - 7,358 36,461
GAP (9,434) 10,447 2,630 38 (3,681)
CUMULATIVE GAP (9,434) 1,013 3,643 3,681
-25.87% 2.78% 9.99% 10.10%
</TABLE>
NOTES:
(1) Net of bad debt reserve.
<PAGE> 24
24
PART II OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings to which the Company or
any of its subsidiaries is party or to which any of their properties are
subject.
Item 5. Other information
Parent Company Financial Information
Certain condensed financial information with respect to
Newberry Bancorp, Inc. follows:
<PAGE> 25
NEWBERRY BANCORP, INC. (The Parent) 25
Condensed Balance Sheet (Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
---------- ------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 143,461 $ 54,151
---------- ------------
Investment in subsidiary 5,209,040 4,746,807
---------- ------------
Due from ESOP 1,000 1,000
Available for sale securities (Note 2) 83,704 97,771
Federal income tax receivable 150,534 22,281
Furniture, fixtures & equipment 3,994 4,744
Deferred taxes 8,537 8,537
Prepaid expenses and other assets 67,556 973,212
---------- ------------
Total other assets 315,325 1,107,545
TOTAL ASSETS 5,667,826 5,908,503
========== ============
</TABLE>
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
---------- ------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS EQUITY
Note payable 1,000,000 1,000,000
Accrued interest payable 102,223 78,798
Accounts payable 15,939 734,017
Payable to bank subsidiary 135,817 -
---------- ------------
Total Liabilities 1,253,979 1,812,815
Stockholders' equity:
Net unrealized gain (loss) on
available-for-sale securities (194,516) (525,788)
Capital stock and paid in capital 2,490,270 2,490,270
Retained earnings 2,118,093 2,131,206
---------- ------------
Total Stockholders' equity 4,413,847 4,095,688
---------- ------------
TOTAL LIABILITIES AND
SHAREHOLDERS EQUITY $5,667,826 $ 5,908,503
========== ============
</TABLE>
<PAGE> 26
NEWBERRY BANCORP, INC. (The Parent) 26
<TABLE>
<CAPTION>
Condensed Statement of Operations For the Three-Month
(Unaudited) Periods Ended
March 31,
1995 1993
----------- -----------
<S> <C> <C>
Interest on Securities $ 1,920 $ -
Net income from bank subsidiary (1,040) 103,634
Gain (loss) on sale of investment 15,330 -
Other income 8,907 1,419
--------- ---------
Total income 25,117 105,053
--------- ---------
Interest expense 23,425 37,416
Amortization expense - 3,184
Management fees - 15,000
Legal and Audit Expense 3,508 20,347
Public listing expense 1,000 1,126
Other expenses 6,259 9,898
--------- ---------
Total expenses 34,192 86,971
--------- ---------
Income before income taxes (9,075) 18,082
--------- ---------
Income taxes (benefit) 4,038 (28,005)
--------- ---------
Net income (13,113) 46,087
========= =========
Net income per common share ($0.011) $0.039
========= =========
Dividends declared per share $ --- $ ---
========= =========
</TABLE>
<PAGE> 27
NEWBERRY BANCORP, INC. (The Parent) 27
<TABLE>
<CAPTION>
Condensed Statement of Cash Flows
(Unaudited)
For the Three-Month
Periods Ended
March 31,
1995 1994
<S> <C> <C>
Reconciliation of net income (loss)
to net cash used in
operating activities:
Net income (loss) $ (13,113) $ 46,087
Depreciation 750 750
Amortization - 3,184
Proceeds from sales of trading securities 74,367
Purchases of trading securities (44,970) -
Loss (gain) on sale of investments (15,330) -
Decrease (increase) in receivable
from affiliate 973,211 -
Decrease (increase) in Prepaid Assets (67,558) 2,469
Decrease (increase) in Income Tax Receivable (128,252)
Increase (decrease) in interest payable 23,425
Increase (decrease) in accounts payable 2,350
Increase (decrease) in payable to subsidiary 135,817
Increase (decrease) in Income Tax Payable (720,427) (23,989)
Investment in Northern Michigan Bidco (132,000) -
Equity from undistributed earnings of subsidiary 1,040 (3,634)
----------- -----------
Net cash provided by (used in)
operating activities 89,310 24,867
----------- -----------
Cash flow from financing activities:
Principal payment on notes payable - (76,000)
----------- -----------
Net cash provided by (used in)
financing activities: - (76,000)
---------- -----------
Net changes in cash and cash equivalents 89,310 (51,133)
Cash and cash equivalents:
Beginning of year 54,151 105,967
---------- -----------
End of year $ 143,461 $ 54,834
========== ===========
Supplemental disclosure of cash flow information:
Cash paid (received) during the year for:
Interest $ (8,907) $ 31,695
Income tax $ (22,281) $ (27,085)
</TABLE>
<PAGE> 28
28
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
27. Financial Data Schedule.
(b) Reports on Form 8-K.
No reports on Form 8-K have been filed during the quarter for which
this report is filed.
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.
NEWBERRY BANCORP INC.
Date: May 12, 1995 /s/ Stephen Lange Ranzini
-------------------------
Stephen Lange Ranzini
President, Chief Executive
Officer, and Treasurer
(On behalf of the registrant
and as
Principal Financial Officer)
<PAGE> 29
29
Sequentially
Numbered
Exhibit Index Page
-------------- ------------
27. Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 575,272
<INT-BEARING-DEPOSITS> 117,649
<FED-FUNDS-SOLD> 10,733
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 19,567,700
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 12,994,997
<ALLOWANCE> (317,784)
<TOTAL-ASSETS> 36,772,935
<DEPOSITS> 16,962,353
<SHORT-TERM> 13,970,157
<LIABILITIES-OTHER> 1,426,578
<LONG-TERM> 0
<COMMON> 12,000
0
0
<OTHER-SE> 4,401,847
<TOTAL-LIABILITIES-AND-EQUITY> 36,772,935
<INTEREST-LOAN> 240,438
<INTEREST-INVEST> 291,324
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 531,762
<INTEREST-DEPOSIT> 193,830
<INTEREST-EXPENSE> 423,778
<INTEREST-INCOME-NET> 107,984
<LOAN-LOSSES> 1,200
<SECURITIES-GAINS> 23,377
<EXPENSE-OTHER> 383,688
<INCOME-PRETAX> (38,075)
<INCOME-PRE-EXTRAORDINARY> (13,113)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,113)
<EPS-PRIMARY> (.011)
<EPS-DILUTED> (.011)
<YIELD-ACTUAL> 7.02
<LOANS-NON> 116,576
<LOANS-PAST> 228,882
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 173,844
<ALLOWANCE-OPEN> 362,559
<CHARGE-OFFS> 26,625
<RECOVERIES> 386
<ALLOWANCE-CLOSE> 317,784
<ALLOWANCE-DOMESTIC> 317,784
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
