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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 30, 2000
UNIVERSITY BANCORP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-16023 38-2929531
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(State of or other (Commission File Number) (IRS Employer
jurisdiction of Identification Number)
incorporation)
959 Maiden Lane, Ann Arbor, Michigan 48105
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (734) 741-5858
N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events
University Bancorp, Inc. (NASDAQ Symbol - UNIBC) (the "Company") issued
a private placement of $725,000 of 6% cumulative non-voting convertible
preferred stock which will allow the Company to meet the requirement for
continued listing on The Nasdaq SmallCap Market of $2,000,000 in Net Tangible
Assets. See the Company's pro-forma consolidated balance sheet as of October 31,
2000 on pages 3 and 4 which reflects the adjusted amount of shareholder equity
of $2,171,458.
The preferred stock is convertible into common stock at $3 per share,
however, in the event the Company completes a rights offering of newly issued
shares at a price less than $3 per share in the future, the preferred stock will
be convertible provided that the funds are reinvested into common stock
purchased in the rights offering. The majority shareholders of the Company
purchased the preferred stock through a combination of conversion of existing
debt and new cash. The transaction was approved by the independent members of
the Company's board of directors as being in the best interest of the
shareholders as a means of preserving the Company's listing on the Nasdaq
SmallCap Market.
The Company's common stock is currently listed on the Nasdaq SmallCap
Market under an exemption from the Net Tangible Assets requirement. In order for
the Company's common stock to continue to be listed, it must also remain in
compliance with all ongoing requirements of continued listing on the Nasdaq
SmallCap Market, such as the public float requirement. The Company is required
to maintain $1,000,000 of capital by non-insiders. With 562,647 shares held by
non-insiders, a floor bid price of $1.78 is needed to meet this requirement.
The exception from Nasdaq will expire on November 30, 2000. In the
event the Company is deemed to have met the terms of the exception, it shall
continue to be listed on The Nasdaq SmallCap Market. The Company believes that
it can meet these conditions, however, there is no assurance that it will do so.
If at some future date the Company's securities should cease to be listed on The
Nasdaq SmallCap Market, they may continue to be listed on the OTC-Bulletin
Board.
RIGHTS OFFERING UPDATE
The Company has initiated a rights offering in an effort to evidence
compliance with the $2,000,000 net tangible assets requirement in a manner which
does not discriminate against minority shareholders. On September 29, 2000
University Bancorp filed a registration statement on Form S-2 with the
Securities and Exchange Commission (the "SEC") indicating that the rights
offering will be open to shareholders of record as of October 1, 2000. According
to the registration statement, the Company will register 1,525,000 common
shares, thereby granting each shareholder the right to purchase three common
shares for every four shares held, at a price of $1.00 per share.
On November 2, 2000 the SEC issued a comment letter on the rights
offering. Management has nearly completed the process of revising the document
and intends to submit an amended filing shortly. The Company intends to change
the record date for the rights offering in the amended filing from October 1,
2000 to January 1, 2001. There is no assurance that the SEC will accept the
amended filing without further comments.
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3
UNIVERSITY BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
October 31, 2000 (Unaudited) and December 31, 1999
<TABLE>
<CAPTION>
PROFORMA * HISTORICAL HISTORICAL
October 31, October 31, December 31,
ASSETS 2000 2000 1999
------------------- ------------------- -------------------
<S> <C> <C> <C>
Cash and due from banks $ 2,941,409 $ 2,829,236 $ 1,542,567
Short term investments 9,208 9,208 8,753
------------------- ------------------- -------------------
Total cash and cash equivalents 2,950,617 2,838,444 1,551,320
Securities available for sale at market 2,705,600 2,705,600 2,626,415
Federal Home Loan Bank Stock 848,400 848,400 848,400
Equity investments of Michigan BIDCO 0 0 892,965
Loans held for sale 179,199 179,199 305,049
Loans 35,000,804 35,000,804 31,112,496
Allowance for loan losses (543,903) (543,903) (532,585)
------------------- ------------------- -------------------
Loans, net 34,456,901 34,456,901 30,579,911
Premises and equipment 1,351,182 1,351,182 1,405,210
Investment in Michigan BIDCO Inc. 1,277,383 1,277,383 0
Investment in Michigan Capital Fund LP I 573,571 573,571 656,904
Mortgage servicing rights 657,258 657,258 704,164
Other real estate owned 341,317 341,317 683,784
Accounts receivable 830,890 830,890 159,584
Accrued interest receivable 268,193 268,193 234,252
Prepaid expenses 158,158 158,158 84,036
Other assets 31,095 31,095 90,544
------------------- ------------------- -------------------
TOTAL ASSETS $ 46,629,764 $ 46,517,591 $ 40,822,538
=================== =================== ===================
</TABLE>
* Amounts adjusted to reflect issuance of $725,000 in Preferred Stock as of
October 31, 2000.
-Continued-
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UNIVERSITY BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (continued)
October 31, 2000 (Unaudited) and December 31, 1999
<TABLE>
<CAPTION>
PRO-FORMA* HISTORICAL HISTORICAL
October 31, October 31, December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 2000 2000 1999
------------------ ------------------ ------------------
<S> <C> <C> <C>
Liabilities
Deposits:
Demand - non interest bearing $ 3,768,772 $ 3,768,772 $ 2,126,157
Demand - interest bearing 14,320,985 14,320,985 13,840,469
Savings 370,175 370,175 294,487
Time 19,823,241 19,823,241 15,789,866
------------------ ------------------ ------------------
Total Deposits 38,283,173 38,283,173 32,050,979
Mortgage escrow 5,367 5,367 3,058
Short term borrowings 3,291,760 3,291,760 3,113,860
Long term borrowings 1,101,116 1,526,116 2,627,116
Accounts payable 1,145,343 1,287,329 230,802
Accrued interest payable 312,393 358,234 240,106
Other liabilities 52,164 52,164 100,442
------------------ ------------------ ------------------
Total Liabilities 44,191,316 44,804,143 38,366,363
Minority Interest 266,990 266,990 505,795
Stockholders' equity:
Preferred stock, $0.001 par value;
$1,000 liquidation value;
Authorized - 500,000 shares; Issued 725
shares in 2000 and 0 shares in 1999 725,000 0 0
Common stock, $0.01 par value;
Authorized - 5,000,000 shares;
Issued - 2,142,985 shares in 2000 and
2,127,985 shares in 1999 21,430 21,430 21,280
Treasury stock - 115,184 shares in 2000
and 1999. (340,530) (340,530) (340,530)
Additional paid-in-capital 3,817,608 3,817,608 3,786,508
Retained deficit (1,454,781) (1,454,781) (931,980)
Accumulated other comprehensive loss (597,269) (597,269) (584,898)
------------------ ------------------ ------------------
Total Stockholders' Equity 2,171,458 1,446,458 1,950,380
------------------ ------------------ ------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 46,629,764 $ 46,517,591 $ 40,822,538
================== ================== ==================
</TABLE>
* Amounts adjusted to reflect issuance of $725,000 in Preferred Stock as of
October 31, 2000.
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UPDATE ON OPERATIONS
Our operating subsidiary, University Bank, had unaudited net income for
the three months ended September 30, 2000 of $22,060. All facets of operations
(at University Bank, Midwest Loan Services and Michigan BIDCO) continued to
improve in October, and University Bank had unaudited net income in the month of
October of $38,295. Unaudited results indicate that University Bancorp had net
income for the three months ended September 30, 2000 of $3,673, and during
October 2000, University Bancorp had net income of $19,804. See the Company's
consolidated statement of operations for one month and ten months ended October
31, 2000 on pages 6 and 7.
Our mortgage subservicing subsidiary, Midwest Loan Services, continues
to expand and had unaudited pre-tax profit for the month of October 2000 of
$146,387. According to President Stephen Lange Ranzini, "We continue to be
cautiously optimistic that the Company will have a sequential quarterly increase
in net income in the fourth quarter of 2000."
FORWARD-LOOKING STATEMENTS
Certain statements contained in this release that are not statements of
historical fact are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. The words "believe," "expect,"
"anticipate", "intend," "will" and similar expressions are examples of words
that identify forward-looking statements. Forward-looking statements include,
without limitation, statements regarding our future financial position and
business strategies and activities. These forward-looking statements are based
on our current beliefs, as well as assumptions we have made based upon
information currently available to us. We have no obligation to publicly update
or revise these forward-looking statements to reflect new information, future
events, or otherwise, except as required by applicable securities laws, and we
caution you not to place undue reliance on these forward-looking statements.
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UNIVERSITY BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
For the Period Ended October 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
For the One Month For the Ten Month
Period Ended Period Ended
2000 2000
----------------- ------------------
<S> <C> <C>
Interest income:
Interest and fees on loans $ 279,265 $ 2,548,254
Interest on securities:
U.S. Government agencies 12,171 120,570
Other securities 6,000 61,940
Interest on bank deposits 195 1,166
Interest on federal funds 53 457
------------------ -------------------
Total interest income 297,684 2,732,387
------------------ -------------------
Interest expense:
Interest on deposits:
Demand deposits 53,141 517,380
Savings deposits 630 5,285
Time certificates of deposit 103,430 841,573
Bank and other short term borrowings 24,790 187,061
Long Term Notes Payable 8,336 114,405
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Total interest expense 190,327 1,665,704
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Net interest income 107,357 1,066,683
Provision for loan losses 7,500 96,000
------------------ -------------------
Net interest income after
provision for loan losses 99,857 970,683
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Other income:
Loan origination and other fees 163,941 811,226
Loan servicing and subservicing fees 128,324 812,397
Gain on sale of mortgage loans 2,050 39,291
Merchant banking/ BIDCO income 0 234,739
Insurance and investment fee income 4,145 62,305
Deposit service charges and fees 5,105 52,621
Net security gains (losses) 0 24,126
Other 1,835 64,801
------------------ -------------------
Total other income 305,400 2,101,506
------------------ -------------------
</TABLE>
-Continued-
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UNIVERSITY BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
For the Period Ended October 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
For the One Month For the Ten Month
Period Ended Period Ended
2000 2000
----------------- -----------------
<S> <C> <C>
Other expenses:
Salaries and wages $ 139,354 $ 1,300,220
Employee benefits 26,915 261,601
Occupancy, net 29,475 253,864
Data processing and equipment 30,313 278,621
Advertising 9,944 80,167
Supplies and postage 17,357 139,813
Servicing rights amortization 6,538 91,899
Mortgage banking expense 15,068 150,055
Legal and audit fees 17,060 316,700
Consulting fees 18,512 164,510
Memberships and training 19,382 69,703
Travel and entertainment 7,449 48,953
Insurance 7,684 84,576
Other 40,402 350,014
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Total other expenses 385,453 3,590,696
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Income (Loss)
before income taxes 19,804 (518,507)
--------------- ----------------
Income tax expense (benefit) 0 4,294
--------------- ----------------
Net income (loss) $ 19,804 $ (522,801)
=============== ================
Basic and diluted income (loss) per
common share $ 0.01 $ (0.26)
=============== ================
Weighted average shares outstanding 2,027,801 2,026,522
=============== ================
</TABLE>
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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.
UNIVERSITY BANCORP, INC.
By: /s/ Stephen Lange Ranzini
-----------------------------
Stephen Lange Ranzini
President & Chief Executive
Officer
Date: November 30, 2000
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Exhibit Number Description
3.3 Certificate of the Series 3 6% Cumulative
Convertible Preferred Stock
