U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
----- ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
----- ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO ___________
Commission File Number 000-21671
-------------
The National Bank of Indianapolis Corporation
---------------------------------------------
(Exact name of registrant as specified in its charter)
Indiana 35-1887991
------- ----------
(State of incorporation) I.R.S. Employer
Identification Number
107 N. Pennsylvania Street, Suite 700, Indianapolis, Indiana 46204
------------------------------------------------------------------
(Address of principal executive offices and zip code)
(317) 261-9000
--------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
--- ---
As of November 2, 2000, there were 1,958,962 Common Shares outstanding.
Transitional Small Business Disclosure Format (Check one):
Yes No X
--- ---
<PAGE>
Table of Contents
The National Bank of Indianapolis Corporation
Report on Form 10-Q
for Quarter Ended
September 30, 2000
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets - September 30, 2000
and December 31, 1999..............................................1
Consolidated Statements of Income - Three months
ended September 30, 2000 and 1999..................................2
Consolidated Statements of Income - Nine months
ended September 30, 2000 and 1999..................................3
Consolidated Statements of Cash Flows - Nine months
ended September 30, 2000 and 1999 .................................4
Consolidated Statements of Shareholders' Equity - Nine months
ended September 30, 2000 and 1999..................................5
Notes to Consolidated Financial Statements.....................6 - 7
Item 2. Management's Discussion and Analysis..........................8 - 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.................................................13
Item 2. Changes in Securities.............................................13
Item 3. Default Upon Senior Securities....................................13
Item 4. Submission of Matters to a Vote of Security Holders...............13
Item 5. Other Information ................................................13
Item 6. Exhibits and Reports on Form 8-K..................................13
Signatures ..................................................................13
<PAGE>
The National Bank of Indianapolis Corporation
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
(Unaudited) (Note)
-----------------------------------
<S> <C> <C>
Assets
Cash and due from banks $ 49,404,719 $ 34,809,536
Federal funds sold 29,239,808 17,302,304
Investment securities
Available-for-sale securities 66,436,772 46,163,821
Held-to-maturity securities 5,413,927 7,698,420
-----------------------------------
Total investment securities 71,850,699 53,862,241
Loans 343,340,057 311,477,835
Less: Allowance for loan losses (4,366,100) (3,392,587)
-----------------------------------
Net loans 338,973,957 308,085,248
Premises and equipment 7,891,741 7,925,669
Accrued interest 3,289,874 3,296,010
Stock in federal banks 2,089,200 1,797,500
Other assets 3,500,777 2,422,956
-----------------------------------
Total assets $ 506,240,775 $ 429,501,464
===================================
Liabilities and shareholders' equity
Deposits:
Noninterest-bearing demand deposits $ 80,649,684 $ 66,799,489
Money market and savings deposits 194,910,888 171,147,030
Time deposits over $100,000 40,580,817 35,403,389
Other time deposits 67,493,068 71,658,213
-----------------------------------
Total deposits 383,634,457 345,008,121
Security repurchase agreements 57,864,378 40,195,017
FHLB advances 24,000,000 14,000,000
Long term debt - 6,000,000
Company obligated mandatorily redeemable preferred
capital securities of subsidiary trust holding
solely the junior subordinated debentures of the
parent company 13,500,000 -
Other liabilities 3,402,106 2,662,482
-----------------------------------
Total liabilities 482,400,941 407,865,620
Shareholders' equity:
Common stock, no par value:
Authorized shares - 3,000,000
Issued and outstanding shares; 2000 -
1,958,962; 1999 - 1,950,171 20,711,160 20,534,340
Unearned compensation (649,904) (817,014)
Retained earnings 3,835,412 1,943,274
Accumulated other comprehensive (loss) (56,834) (24,756)
----------------------------------
Total shareholders' equity 23,839,834 21,635,844
-----------------------------------
Total liabilities and shareholders' equity $ 506,240,775 $ 429,501,464
===================================
</TABLE>
Note: The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. See notes to condensed consolidated financial statements.
1
<PAGE>
The National Bank of Indianapolis Corporation
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
September 30
2000 1999
------------------------------------
<S> <C> <C>
Interest income:
Interest and fees on loans $ 7,293,073 $ 5,402,891
Interest on investment securities 1,451,566 1,153,214
Interest on federal funds sold 391,460 281,686
------------------------------------
Total interest income 9,136,099 6,837,791
Interest expense:
Interest on deposits 3,807,410 2,937,006
Interest on repurchase agreements 795,125 420,122
Interest on FHLB advances 357,641 203,371
Interest on long term debt 258,566 99,720
------------------------------------
Total interest expense 5,218,742 3,660,219
------------------------------------
Net interest income 3,917,357 3,177,572
Provision for loan losses 360,000 240,000
------------------------------------
Net interest income after provision for loan losses 3,557,357 2,937,572
Other operating income:
Trust fees and commissions 422,975 329,226
Building rental income 171,681 169,134
Service charges and fees on deposit accounts 212,636 136,471
Net gain on sale of mortgage loans 27,026 290
Other 250,245 205,323
------------------------------------
Total operating income 1,084,563 840,444
Other operating
expenses:
Salaries, wages and employee benefits 1,958,565 1,579,166
Net occupancy expense 302,303 311,139
Furniture and equipment expense 179,524 146,577
Professional services 174,514 130,932
Data processing 221,713 168,136
Business development 132,594 92,777
Other expenses 488,252 404,774
------------------------------------
Total other operating expenses 3,457,465 2,833,501
------------------------------------
Net income before tax 1,184,455 944,515
Federal and state income tax 452,470 378,091
------------------------------------
Net income after tax $ 731,985 $ 566,424
====================================
Basic earnings per share $ 0.38 $ 0.30
====================================
Diluted earnings per share $ 0.34 $ 0.27
====================================
</TABLE>
See notes to condensed consolidated financial statements.
2
<PAGE>
The National Bank of Indianapolis Corporation
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30
2000 1999
-----------------------------------
<S> <C> <C>
Interest income:
Interest and fees on loans $ 20,610,877 $ 14,623,216
Interest on investment securities 3,716,553 3,321,364
Interest on federal funds sold 1,019,826 855,716
-----------------------------------
Total interest income 25,347,256 18,800,296
Interest expense:
Interest on deposits 10,514,992 8,507,273
Interest on repurchase agreements 1,999,782 1,050,304
Interest on FHLB advances 759,963 603,405
Interest on long term debt 556,903 196,428
-----------------------------------
Total interest expense 13,831,640 10,357,410
-----------------------------------
Net interest income 11,515,616 8,442,886
Provision for loan losses 1,080,000 720,000
-----------------------------------
Net interest income after provision for loan losses 10,435,616 7,722,886
Other operating income:
Trust fees and commissions 1,203,994 916,166
Building rental income 515,731 457,619
Service charges and fees on deposit accounts 604,057 369,510
Net gain (loss) on sale of mortgage loans (58,040) 71,709
Other 748,812 602,234
-----------------------------------
Total operating income 3,014,554 2,417,238
Other operating expenses:
Salaries, wages and employee benefits 5,811,638 4,409,843
Net occupancy expense 900,428 807,290
Furniture and equipment expense 534,659 418,539
Professional services 512,318 416,001
Data processing 696,894 471,719
Business development 393,065 285,301
Other expenses 1,461,646 1,126,025
-----------------------------------
Total other operating expenses 10,310,648 7,934,718
-----------------------------------
Net income before tax 3,139,522 2,205,406
Federal and state income tax 1,247,384 879,289
-----------------------------------
Net income after tax $ 1,892,138 $ 1,326,117
===================================
Basic earnings per share $ 0.99 $ 0.70
===================================
Diluted earnings per share $ 0.88 $ 0.64
===================================
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
The National Bank of Indianapolis Corporation
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30
2000 1999
-----------------------------------
<S> <C> <C>
Operating Activities
Net Income $ 1,892,138 $ 1,326,117
Adjustments to reconcile net income to net cash
provided (used) by operating
activities:
Provision for loan losses 1,080,000 720,000
Depreciation and amortization 679,174 537,373
Net accretion of investments (656,308) (1,001,975)
Unearned compensation amortization 248,110 229,861
(Increase) decrease in:
Interest receivable 6,136 (836,208)
Other assets (1,056,782) (420,165)
Increase (decrease) in:
Other liabilities 739,624 988,772
-----------------------------------
Net cash provided by operating activities 2,932,092 1,543,775
-----------------------------------
Investing Activities
Net change in federal funds sold (11,937,504) (4,294,997)
Proceeds from maturities of investment securities
held to maturity 2,304,043 4,371,563
Proceeds from maturities of investment securities
available for sale 139,589,680 74,189,331
Purchases of investment securities held to maturity (291,700) (2,277,070)
Purchases of investment securities available
for sale (159,278,990) (59,308,515)
Net increase in loans (31,968,709) (59,854,706)
Purchases of bank premises and equipment (645,246) (1,126,901)
-----------------------------------
Net cash used by investing activities (62,228,426) (48,301,295)
-----------------------------------
Financing Activities
Net increase in deposits 38,626,336 38,995,015
Increase in security repurchase agreements 17,669,361 15,649,007
Increase in FHLB borrowings 10,000,000 -
Proceeds from issuance of long-term debt (6,000,000) 6,000,000
Proceeds from issuance of capital 13,500,000 -
Proceeds from issuance of stock 95,820 103,020
-----------------------------------
Net cash provided by financing activities 73,891,517 60,747,042
-----------------------------------
Increase in Cash and Cash Equivalents 14,595,183 13,989,522
Cash and Cash Equivalents at Beginning of Year 34,809,536 26,547,970
-----------------------------------
Cash and Cash Equivalents at End of Period $ 49,404,719 $ 40,537,492
===================================
Interest Paid $ 13,562,225 $ 10,188,265
-----------------------------------
Income Taxes Paid $ 1,588,931 $ 880,692
-----------------------------------
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
The National Bank of Indianapolis Corporation
Consolidated Statement of Shareholders' Equity
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
and Other
Common Unearned Retained Comprehensive
Stock Compensation Earnings Income TOTAL
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1998 $ 19,747,320 $ (460,394) $ 112,954 $ (44,448) $ 19,355,432
Comprehensive income:
Net income 1,326,117 1,326,117
Other comprehensive income
Net unrealized gain on
investments, net of tax
of $415 43,816 43,816
------------
Total comprehensive income 1,369,933
Issuance of stock 787,020 (684,000) 103,020
Compensation earned 229,861 229,861
------------------------------------------------------------------------
Balance at September 30, 1999 $ 20,534,340 $ (914,533) $1,439,071 $ (632) $ 21,058,246
========================================================================
Balance at December 31, 1999 $ 20,534,340 $ (817,014) $1,943,274 $ (24,756) $ 21,635,844
Comprehensive income:
Net income 1,892,138 1,892,138
Other comprehensive income
Net unrealized loss on
investments, net of tax
of $37,278 (32,078) (32,078)
------------
Total comprehensive income 1,860,060
Issuance of stock 176,820 (81,000) 95,820
Compensation earned 248,110 248,110
------------------------------------------------------------------------
Balance at September 30, 2000 $ 20,711,160 $ (649,904) $3,835,412 $ (56,834) $ 23,839,834
========================================================================
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
The National Bank of Indianapolis
Corporation
Notes to Consolidated Financial Statements
September 30, 2000
Note 1: Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include
the accounts of The National Bank of Indianapolis Corporation ("Corporation")
and its wholly-owned subsidiary The National Bank of Indianapolis ("Bank"). All
intercompany transactions between the Corporation and Bank have been properly
eliminated. The consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the nine month period ended September 30, 2000
is not necessarily indicative of the results that may be expected for the year
ended December 31, 2000. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Corporation's Form
10-K for the year ended December 31, 1999.
Note 2: Trust Preferred Securities
In September 2000, NBIN Statutory Trust I ("the Trust"), a Connecticut statutory
business trust owned by the Corporation, issued $13,500,000 of company obligated
mandatorily redeemable capital securities. The proceeds from the issuance of the
capital securities and common securities ($418,000) were used by the Trust to
purchase from the Corporation $13,918,000 Fixed Rate Junior Subordinated
Debentures.
The subordinated debentures are the sole assets of the trust and the Corporation
owns all of the common securities of the trust. Interest payments made on the
capital securities are reported as a component of interest expense on long-term
debt. The capital securities bear interest and mature as follows:
Fixed Interest
Rate Maturity Date
---- -------------
NBIN Statutory Trust I 10.60% September 6, 2030
The net proceeds received by the Corporation from the sale of the capital
securities were used for general corporate purposes.
6
<PAGE>
Note 3: Earnings per Share
The following table sets forth the computation of basic and diluted earnings per
share for the three and nine month periods ended September 30, 2000 and 1999.
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Basic average shares outstanding 1,910,762 1,890,446 1,908,112 1,887,861
=========== =========== ========== ==========
Net income $731,985 $566,424 $1,892,138 $1,326,117
=========== =========== ========== ==========
Basic net income per common share $0.38 $0.30 $0.99 $0.70
=========== =========== ========== ==========
Diluted
Average shares outstanding 1,910,762 1,890,446 1,908,112 1,887,861
Nonvested restricted stock 28,920 35,820 28,920 35,820
Common stock equivalents
Net effect of the assumed exercise of stock
options 66,481 45,831 66,481 45,831
Net effect of the assumed exercise of
warrants 135,667 113,974 135,667 113,974
----------- ----------- ---------- ----------
Diluted average shares 2,141,830 2,086,071 2,139,180 2,083,486
=========== =========== ========== ==========
Net income $731,985 $566,424 $1,892,138 $1,326,117
=========== =========== ========== ==========
Diluted net income per common share $0.34 $0.27 $0.88 $0.64
=========== =========== ========== ==========
</TABLE>
7
<PAGE>
Management's Discussion and Analysis
of Financial Condition and Results of Operation
Results of Operations
Nine months Ended September 30, 2000 Compared to the Nine months Ended September
30, 1999:
The Corporation's results of operations depends primarily on the level of its
net interest income, its non-interest income and its operating expenses. Net
interest income depends on the volume of and rates associated with interest
earning assets and interest bearing liabilities which results in the net
interest spread. The Corporation had net income of $1,892,138 for the nine
months ended September 30, 2000 compared to a net income of $1,326,117 for the
nine months ended September 30, 1999. This change is primarily due to the growth
of the Bank allowing for more interest earning assets and net interest income
compared to the same period during 1999, thereby offsetting more of the
operating expenses.
Net Interest Income
-------------------
Net interest income increased $3,072,730 or 36.4% to $11,515,616 for the nine
months ended September 30, 2000 from $8,442,886 for the nine months ended
September 30, 1999. Total interest income increased $6,546,960 for the nine
months ended September 30, 2000 to $25,347,256 from $18,800,296 for the nine
months ended September 30, 1999. This increase is primarily a result of average
total loans for the nine months ended September 30, 2000 being approximately
$325,000,000 compared to average total loans of approximately $285,000,000 for
the nine months ended September 30, 1999. The increased loan growth is the
result of new clients due to local bank mergers and the addition of experienced
lenders to the staff. The loan portfolio produces the highest yield of all
earning assets. The increase in interest income is also the result of an
increase in the prime lending rate. The prime lending rate has increased from
8.25% as of September 30, 1999 to 9.50% as of September 30, 2000. Investment
portfolio income increased $395,189 or 11.9% to $3,321,364 for the nine months
ended September 30, 2000, as compared to $3,321,364 for the nine months ended
September 30, 1999. Interest on investment securities increased due to a higher
yield although the average investment securities portfolio decreased from
approximately $85,000,000 for the nine months ended September 30, 1999, to
approximately $80,000,000 for the nine months ended September 30, 2000. Interest
on federal funds sold increased although average federal funds sold decreased
approximately $1,000,000 due to a higher yield for the nine months ended
September 30, 2000 over the same period the previous year.
Total interest expense increased $3,474,230 or 33.5% to $13,831,640 for the nine
months ended September 30, 2000, from $10,357,410 for the nine months ended
September 30, 1999. This increase is due to an increase in interest bearing
deposits. Total interest bearing liabilities averaged approximately $361,000,000
for the nine months ended September 30, 2000 as compared to approximately
$336,000,000 for the nine months ended September 30, 1999. The increase in
interest expense is also the result of an overall upward movement of interest
rates. The average cost of interest bearing liabilities was approximately 5.1%
at September 30, 2000 compared to 4.1% at September 30, 1999.
8
<PAGE>
Provision for Loan Losses
-------------------------
The amount charged to the provision for loan losses by the Bank is based on
management's evaluation as to the amounts required to maintain an allowance
adequate to provide for potential losses inherent in the loan portfolio. The
level of this allowance is dependent upon the total amount of past due and
non-performing loans, general economic conditions and management's assessment of
potential losses based upon internal credit evaluations of loan portfolios and
particular loans. Loans are entirely to borrowers in central Indiana.
Nine months ended
September 30,
2000 1999
-------------- --------------
Beginning of Period $ 3,392,587 $ 2,626,279
Provision for loan losses 1,080,000 720,000
Losses charged to the reserve
Commercial 100,726 -
Real Estate 30,168 27,452
Installment 18,405 -
Credit Cards 11,036 -
-------------- --------------
160,335 27,452
Recoveries
Commercial 53,672 3,760
Credit Cards 176 -
--------------------------------
53,848 3,760
-------------- --------------
End of Period $ 4,366,100 $ 3,322,587
============== ==============
Allowance as a % of Loans 1.27% 1.15%
Loans past due over 30 days totaled $467,000 or 0.14% of total loans at
September 30, 2000 compared to $228,000 or 0.08% of total loans at September 30,
1999.
Other Operating Income
----------------------
Other operating income for the nine months ended September 30, 2000, increased
$597,316 or 24.7% to $3,014,554 from $2,417,238 for the nine months ended
September 30, 1999. The increase is primarily due to an increase in trust fees
and commissions of $287,828 or 31.4% from $916,166 for the nine months ended
September 30, 1999 to $1,203,994 for the nine months ended September 30, 2000.
The increase in trust income is attributable to the increase in total assets
under trust management of approximately $60,000,000 from approximately
$492,000,000 at September 30, 1999 to approximately $552,000,000 at September
30, 2000. The increase in other operating income is also attributable to an
increase in service charges and fees on deposit accounts of $234,547 or 63.5%
from $369,510 for the nine months ended September 30, 1999 to $604,057 for the
nine months ended September 30, 2000. This increase is attributable to the
increase in average demand deposit accounts of $25,000,000 from approximately
$229,000,000 at September 30, 1999 to approximately $254,000,000 at September
30, 2000. A net loss on the sale of mortgage loans of $58,040 for the nine
months ended September 30, 2000 compared to
9
<PAGE>
a net gain of $71,709 for the nine months ended September 30, 1999 caused a
decrease in other operating income. Contributing to the increase in other
operating income was the rental income from the other tenants in the
Corporation's main office building. For the nine months ended September 30,
2000, building rental income was $515,731 compared to $457,619 for the nine
months ended September 30, 1999.
Other Operating Expenses
------------------------
Other operating expenses for the nine months ended September 30, 2000 increased
$2,375,930 or 29.9% to $10,310,648 from $7,934,718 for the nine months ended
September 30, 1999. Salaries, wages and employee benefits increased $1,401,795
or 31.8% to $5,811,638 for the nine months ended September 30, 2000 from
$4,409,843 for the nine months ended September 30, 1999. This increase is
primarily due to the increase in the number of employees from 111 full time
equivalents at September 30, 1999 to 132 full time equivalents at September 30,
2000. Net occupancy expense increased $93,138 for the nine months ended
September 30, 2000 over the same period the previous year. This is due to the
opening of a new banking center at the AUL Office Complex in June 1999 and in
Carmel in September 2000. Professional services expense increased $96,317 or
23.2% from $416,001 for the nine months ended September 30, 1999 to $512,318 for
the nine months ended September 30, 2000. The increase is due to courier service
and accounting fees. Data processing expenses increased $225,175 or 47.7% for
the nine months ended September 30, 2000 over the same period the previous year
primarily due to increased service bureau fees relating to increased transaction
activity by the Bank and trust department.
Liquidity and Interest Rate Sensitivity
The Corporation must maintain an adequate liquidity position in order to respond
to the short-term demand for funds caused by withdrawals from deposit accounts,
extensions of credit and for the payment of operating expenses. Maintaining this
position of adequate liquidity is accomplished through the management of a
combination of liquid assets; those which can be converted into cash and access
to additional sources of funds. Primary liquid assets of the Corporation are
cash and due from banks, federal funds sold, investments held as available for
sale and maturing loans. Federal funds sold represent the Corporation's primary
source of immediate liquidity and were maintained at a level adequate to meet
immediate needs. Federal funds averaged approximately $22,000,000 and
$23,000,000 for the nine months ended September 30, 2000 and 1999, respectively.
Maturities in the Corporation's loan and investment portfolios are monitored
regularly to manage the maturity dates of deposits to coincide with long-term
loans and investments. Other assets and liabilities are also monitored to
provide the proper balance between liquidity, safety, and profitability. This
monitoring process must be continuous due to the constant flow of cash which is
inherent in a financial institution.
The Corporation actively manages its interest rate sensitive assets and
liabilities to reduce the impact of interest rate fluctuations. At September 30,
2000, the Corporation's rate sensitive liabilities exceeded rate sensitive
assets due within one year by $24,839,000.
As part of managing liquidity, the Corporation monitors its loan to deposit
ratio on a daily basis. At September 30, 2000 the ratio was 89.5 percent.
The Corporation experienced an increase in cash and cash equivalents, its
primary source of liquidity, of $14,595,183 during the first nine months of
2000. The primary financing activity
10
<PAGE>
of deposit growth provided net cash of $38,626,336. Lending used $31,968,709,
investments used $17,676,967, and increasing federal funds used provided
$11,937,504. The Corporation's management believes its liquidity sources are
adequate to meet its operating needs and does not know of any trends, events or
uncertainties that may result in a significant adverse effect on the
Corporation' liquidity position.
Capital Resources
The Corporation's only source of capital since commencing operations has been
from issuance of common stock, results of operations, issuance of long term debt
to a non-affiliated third party, and the issuance of company obligated
mandatorily redeemable preferred capital securities.
The Corporation incurred indebtedness in the amount of $7,500,000 pursuant to a
Revolving Credit Agreement with Harris Trust and Savings Bank dated March 26,
1999. The aggregate amount of the revolving line of credit is $7,500,000
maturing December 31, 2005. The Corporation made a $7,500,000 capital
contribution to the Bank from the loan proceeds. On September 29, 2000, the
Corporation paid the total outstanding of $7,500,000 in full with part of the
proceeds from the issuance of company obligated mandatorily redeemable preferred
capital securities.
In September 2000, the Trust, which is wholly owned by the Corporation, issued
$13,500,000 of company obligated mandatorily redeemable capital securities. The
proceeds from the issuance of the capital securities and common securities
($418,000) were used by the Trust to purchase from the Corporation $13,918,000
Fixed Rate Junior Subordinated Debentures. The capital securities mature
September 6, 2030, and have a fixed interest rate of 10.60%. The net proceeds
received by the Corporation from the sale of the capital securities were used
for general corporate purposes.
The Bank has incurred indebtedness pursuant to FHLB advances as follows:
Amount Rate Maturity
------ ---- --------
$ 2,000,000 6.40% 08/01/2001
10,000,000 7.03% 07/17/2002
6,000,000 5.66% 09/04/2003
3,000,000 5.55% 10/02/2005
3,000,000 5.39% 10/03/2005
-------------
$24,000,000
=============
The Bank may add indebtedness of this nature in the future if determined to be
in the best interest of the Bank.
11
<PAGE>
Capital for the Bank is above regulatory requirements at September 30, 2000.
Pertinent capital ratios for the Bank as of September 30, 2000 are as follows:
Minimum
Actual Requirements
------ ------------
Tier 1 risk-based capital ratio 8.90% 4.0%
Total risk-based capital ratio 10.15% 8.0%
Leverage ratio 6.49% 4.0%
Dividends from the Bank to the Corporation may not exceed the undivided profits
of the Bank (included in consolidated retained earnings) without prior approval
of a federal regulatory agency. In addition, Federal banking laws limit the
amount of loans the Bank may make to the Corporation, subject to certain
collateral requirements. No dividends were declared, or loans made, during 2000
or 1999 by the Bank to the Corporation.
12
<PAGE>
Other Information
Item 1. Legal Proceedings
Neither The National Bank of Indianapolis Corporation nor its
subsidiary are involved in any pending legal proceedings at this
time, other than routine litigation incidental to its business.
Item 2. Changes in Securities - Not applicable.
Item 3. Defaults Upon Senior Securities - Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders - None.
Item 5. Other Information - Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - Exhibit 27 - Financial Data Schedule
(b) No reports on Form 8-K were filed during the last quarter
of the fiscal year.
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.
Date: 11/3/00
------------------------
THE NATIONAL BANK OF INDIANAPOLIS CORPORATION
/S/ Debra L. Ross
------------------------------
Debra L. Ross
Chief Financial Officer
13
