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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 2000
Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _________ to _________
Commission file number 0-24433
--------
POINTE FINANCIAL CORPORATION
----------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Florida 65-0451402
- -------------------------- ------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
21845 Powerline Road
Boca Raton, Florida 33433
(Address of Principal Executive Offices)
(561) 368-6300
(Issuer's Telephone Number, Including Area Code)
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
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
----
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date;
Common stock, par value $.01 per share 2,013,018 shares
- -------------------------------------- -----------------------------
(class) Outstanding at April 26, 2000
Transitional small business disclosure format (check one):
YES [ ] NO [X]
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<PAGE>
<TABLE>
<CAPTION>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
INDEX
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements Page
---------------------------- ----
<S> <C>
Condensed Consolidated Balance Sheets -
at March 31, 2000 (unaudited) and at December 31, 1999...................................................2
Condensed Consolidated Statements of Earnings -
Three Months ended March 31, 2000 and 1999 (unaudited)...................................................3
Condensed Consolidated Statement of Changes in Stockholders' Equity -
Three Months ended March 31, 2000 (unaudited)............................................................4
Condensed Consolidated Statements of Cash Flows -
Three Months ended March 31, 2000 and 1999 (unaudited).................................................5-6
Notes to Condensed Consolidated Financial Statements (unaudited).........................................7-8
Review by Independent Certified Public Accountants.........................................................9
Report on Review by Independent Certified Public Accountants..............................................10
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..............................................................................11-14
Item 3. Quantitative and Qualitative Disclosures about Market Risk..........................................14
Part II. OTHER INFORMATION
Item 1. Legal Proceedings..................................................................................14
Item 6. Exhibits and Reports on Form 8-K...................................................................15
SIGNATURES.....................................................................................................16
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
(Dollars in thousands)
At
---------------------------
March 31, December 31,
Assets 2000 1999
---- ----
(Unaudited)
<S> <C> <C>
Cash and due from banks $ 5,058 6,822
Interest-bearing deposits with banks 131 87
--------- ---------
Total cash and cash equivalents 5,189 6,909
Securities available for sale 55,097 46,157
Loans receivable, net of allowance for loan losses of $1,446
in 2000 and $1,331 in 1999 150,816 150,852
Loans held for sale 9,794 2,696
Accrued interest receivable 1,661 1,375
Premises and equipment, net 2,200 2,225
Federal Home Loan Bank stock, at cost 2,326 1,753
Federal Reserve Bank stock, at cost 479 479
Foreclosed real estate - 257
Deferred income tax asset 348 348
Other assets 518 605
--------- ---------
Total $ 228,428 213,656
========= =========
Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand deposits 22,539 21,370
Savings and NOW deposits 12,501 13,640
Money-market deposits 37,394 38,146
Time deposits 74,718 73,020
-------- -------
Total deposits 147,152 146,176
Official checks 1,426 1,075
Other borrowings 7,393 5,394
Advances from Federal Home Loan Bank 45,470 35,060
Accrued interest payable 692 688
Advance payments by borrowers for taxes and insurance 721 451
Other liabilities 879 229
--------- -------
Total liabilities 203,733 189,073
--------- -------
Stockholders' equity:
Preferred stock - -
Common stock 23 23
Additional paid-in capital 23,753 23,753
Retained earnings 5,230 4,959
Accumulated other comprehensive income (loss) (1,265) (1,102)
Treasury stock (3,000) (3,000)
Stock incentive plan (46) (50)
--------- -------
Total stockholders' equity 24,695 24,583
--------- -------
Total $ 228,428 213,656
========= =======
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
2
<PAGE>
<TABLE>
<CAPTION>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Earnings
(Dollars in thousands, except share amounts)
Three Months Ended
March 31,
--------------------
2000 1999
---- ----
(Unaudited)
<S> <C> <C>
Interest income:
Loans receivable $ 3,435 2,900
Securities 800 621
Other interest earning assets 9 9
---------- ----------
Total interest income 4,244 3,530
---------- ----------
Interest expense:
Deposits 1,408 1,303
Borrowings 617 289
---------- ----------
Total interest expense 2,025 1,592
---------- ----------
Net interest income 2,219 1,938
Provision for loan losses 165 155
---------- ----------
Net interest income after provision for loan losses 2,054 1,783
---------- ----------
Noninterest income:
Service charges on deposit accounts 187 147
Loan servicing fees 12 15
Net realized gains on sale of securities -- 29
Other 99 91
Total noninterest income 298 282
---------- ----------
Noninterest expenses:
Salaries and employee benefits 947 808
Occupancy expense 281 267
Advertising and promotion 59 77
Professional fees 56 46
Data processing 98 80
Other 335 307
Total noninterest expenses 1,776 1,585
---------- ----------
Earnings before income taxes 576 480
Income taxes 204 178
---------- ----------
Net earnings $ 372 302
========== ==========
Earnings per share:
Basic $ .18 .13
========== ==========
Diluted $ .18 .13
========== ==========
Weighted average shares outstanding for Basic 2,013,018 2,284,593
========== ==========
Weighted average shares outstanding for Diluted 2,013,018 2,294,253
========== ==========
Dividends per share $ .05 --
========== ==========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements
3
<PAGE>
<TABLE>
<CAPTION>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statement of Changes in Stockholders' Equity
Three Months Ended March 31, 2000
(In thousands)
Accumulated
Other
Compre-
Additional Stock hensive Total
Common Paid-In Incentive Treasury Retained Income Stockholders'
Stock Capital Plan Stock Earnings (Loss) Equity
----- ------- ---- ----- -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1999 $ 23 23,753 (50) (3,000) 4,959 (1,102) 24,583
-------
Comprehensive income:
Net earnings (unaudited) -- -- -- -- 372 -- 372
Net change in unrealized
loss on securities available for sale,
net of tax of $98 (unaudited) -- -- -- -- -- (163) (163)
------- ------ ------- ------ ------ ------ -------
Comprehensive income (unaudited) 209
-------
Shares committed to participants
in stock incentive plans (unaudited) -- -- 4 -- -- -- 4
Cash dividends paid (unaudited) -- -- -- -- (101) -- (101)
------- ------ ------- ------ ------ ------ -------
Balance at March 31, 2000 (unaudited) $ 23 23,753 (46) (3,000) 5,230 (1,265) 24,695
======= ======= ======= ======= ======= ======= =======
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements
4
<PAGE>
<TABLE>
<CAPTION>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
Three Months Ended
March 31,
2000 1999
---- ----
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 372 302
Adjustments to reconcile net earnings to net cash provided by (used in)
operating activities:
Provision for loan losses 165 155
Depreciation 109 105
Net amortization of fees, premiums, discounts and other 1 3
Shares committed to participants in incentive stock plans 4 --
Gain on sale of securities -- (29)
Originations of loans held for sale (478) (1,066)
Increase in accrued interest receivable (286) (85)
Decrease (increase) in other assets 183 (165)
Increase (decrease) in official checks 351 (724)
Increase (decrease) in accrued interest payable 4 (81)
Increase in other liabilities 650 282
-------- --------
Net cash provided by (used in) operating activities 1,075 (1,303)
-------- --------
Cash flows from investing activities:
Purchase of securities available for sale (11,490) (8,792)
Proceeds from sale of securities available for sale 2,004 12,070
Maturities and calls of securities available for sale -- 3,705
Principal repayments on securities available for sale 254 834
Net increase in loans (6,717) (9,616)
Net proceeds from sale of foreclosed real estate 257 195
Purchase of premises and equipment, net (84) (113)
Net increase in other securities (573) (65)
-------- --------
Net cash used in investing activities (16,349) (1,782)
-------- --------
Cash flows from financing activities:
Net increase (decrease) in deposits 976 (2,496)
Net increase in advances from Federal Home Loan Bank 10,410 10,000
Net increase (decrease) in other borrowings 1,999 (391)
Increase in advance payments by borrowers for taxes and insurance 270 301
Proceeds from issuance of common stock -- 258
Cash dividends paid on common stock (101) --
-------- --------
Net cash provided by financing activities 13,554 7,672
-------- --------
Net (decrease) increase in cash and cash equivalents (1,720) 4,587
Cash and cash equivalents at beginning of period 6,909 3,471
-------- --------
Cash and cash equivalents at end of period $ 5,189 8,058
======== ========
(continued)
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows, Continued
(In thousands)
Three Months Ended
March 31,
2000 1999
---- ----
(Unaudited)
<S> <C> <C>
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 2,021 1,673
======= =====
Income taxes $ -- 40
======= =====
Noncash transactions:
Accumulated other comprehensive income (loss), change in unrealized
loss on securities available for sale, net $ (163) (190)
======= =====
Activity in stock incentive plans $ 4 --
======= =====
Transfer of loans to loans held for sale $ 6,736 --
======= =====
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
6
<PAGE>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited)
1. General. In the opinion of the management of Pointe Financial
Corporation, the accompanying condensed consolidated financial
statements contain all adjustments (consisting principally of normal
recurring accruals) necessary to present fairly the financial position
at March 31, 2000 and the results of operations and cash flows for the
three-month periods ended March 31, 2000 and 1999. The results of
operations and other data for the three months ended March 31, 2000 are
not necessarily indicative of the results to be expected for the year
ending December 31, 2000.
Pointe Financial Corporation (the "Holding Company") was incorporated
under the laws of the State of Florida in September 1993. The Holding
Company"s principal business is conducted through Pointe Bank (the
"Bank"), a state-chartered commercial bank. The Holding Company and the
Bank are collectively referred to as the "Company." The Bank provides a
wide range of community banking services to small and middle-market
business and individuals through its five banking offices located in
Broward, Miami-Dade and Palm Beach counties, Florida.
On March 12, 2000, the Company received approval of the election to
become a Financial Holding Company from the Board of Governors of the
Federal Reserve System. The Company plans to use the expanded business
capacity to broaden the services it provides to its clients.
2. Loan Impairment and Loan Losses. The activity in the allowance for loan
losses is as follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
2000 1999
---- ----
<S> <C> <C>
Balance at beginning of period $ 1,331 1,078
Provision charged to earnings 165 155
(Charge-offs), net of recoveries (50) (5)
------- -------
Balance at end of period $ 1,446 1,228
======= =======
</TABLE>
The following summarizes the amount of impaired loans (in thousands):
<TABLE>
<CAPTION>
At
--------------------------
March 31, December 31,
2000 1999
------- -------
<S> <C> <C>
Loans identified as impaired:
Gross loans with related allowance for losses recorded $ 260 440
Less allowance on these loans (97) (220)
------- -------
Net investment in impaired loans $ 163 220
======= =======
</TABLE>
The average net investment in impaired loans and interest income
recognized and received on impaired loans is as follows (in
thousands):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
------- -------
<S> <C> <C>
Average net investment in impaired loans $ 187 220
======= =======
Interest income recognized on impaired loans $ -- --
======= =======
Interest income received on impaired loans $ -- --
======= =======
(continued)
</TABLE>
7
<PAGE>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (unaudited), Continued
3. Earnings Per Share . Earnings per share of common stock has been
computed on the basis of the weighted-average number of shares of common
stock outstanding. For the three months ended March 31, 1999 outstanding
stock options are considered dilutive securities for purposes of
calculating diluted earnings per share. The following table presents the
calculations of earnings per share ($ in thousands, except per share
amounts).
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
2000 1999
-------------------------------------- ------------------------------------------
Weighted- Weighted-
Average Average
Earnings Shares Per Share Earnings Shares Per Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- ------ ----------- ------------- -------
<S> <C> <C> <C> <C> <C> <C>
Basic Earnings Per Share:
Net earnings available
to common
stockholders $ 372 2,013,018 $ .18 $ 302 2,284,593 $ .13
===== =====
Effect of dilutive
securities-
Incremental shares
from assumed
exercise of
options utilizing the
treasury stock method -- 9,660
--------- ----------
Diluted Earnings Per Share:
Net earnings available
to common
stockholders
and assumed
conversions $ 372 2,013,018 $ .18 $ 302 2,294,253 $ .13
===== ========= ===== ===== ========= =====
</TABLE>
4. Regulatory Capital. The Bank is required to maintain certain minimum
regulatory capital requirements. The following is a summary at March
31, 2000 of the regulatory capital requirements and the Bank's actual
capital on a percentage basis:
<TABLE>
<CAPTION>
Regulatory
Actual Requirement
------ -----------
<S> <C> <C>
Total capital to risk-weighted assets 16.93% 8.00%
Tier I capital to risk-weighted assets 15.91% 4.00%
Tier I capital to total assets - leverage ratio 10.16% 4.00%
</TABLE>
8
<PAGE>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
Review by Independent Certified Public Accountants
Hacker, Johnson, Cohen & Grieb PA, the Company's independent certified public
accountants, have made a limited review of the financial data as of March 31,
2000, and for the three-month periods ended March 31, 2000 and 1999 presented in
this document, in accordance with standards established by the American
Institute of Certified Public Accountants.
Their report furnished pursuant to Article 10 of Regulation S-X is included
herein.
9
<PAGE>
Report on Review by Independent Certified Public Accountants
The Board of Directors
Pointe Financial Corporation
Boca Raton, Florida:
We have reviewed the accompanying condensed consolidated balance sheet of
Pointe Financial Corporation and subsidiaries (the "Company") as of March 31,
2000, and the related condensed consolidated statements of earnings and cash
flows for the three-month periods ended March 31, 2000 and 1999, and the
condensed consolidated statement of changes in stockholders' equity for the
three-month period ended March 31, 2000. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1999, and the
related consolidated statements of earnings, changes in stockholders' equity and
cash flows for the year then ended (not presented herein); and in our report
dated January 21, 2000 we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 1999, is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
HACKER, JOHNSON, COHEN & GRIEB PA
Tampa, Florida
April 14, 2000
10
<PAGE>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Comparison of March 31, 2000 and December 31, 1999
Liquidity and Capital Resources
The Company's primary source of cash during the three months ended March 31,
2000 was from an increase in advances from the Federal Home Loan Bank of $10.4
million, an increase in other borrowings of $2.0 million and proceeds from the
sale of securities available for sale of $2.0 million. Cash was used primarily
for net loan originations of $7.2 million and the purchase of securities
totaling $11.5 million. At March 31, 2000, the Company had outstanding
commitments to originate loans of $12.7 million and time deposits of $50.8
million which mature in one year or less. It is expected that these
requirements will be funded from the sources described above. At March 31,
2000, the Bank exceeded its regulatory liquidity requirements.
The following table shows selected ratios for the periods ended or at the dates
indicated:
<TABLE>
<CAPTION>
Three Months Three Months
Ended Year Ended Ended
March 31, December 31, March 31,
2000 1999 1999
---- ---- ----
<S> <C> <C> <C>
Average equity as a percentage
of average assets 10.77% 12.95% 14.11%
Equity to total assets at end of period 10.81% 11.51% 13.94%
Return on average assets (1) .65% .60% .63%
Return on average equity (1) 6.08% 4.67% 4.46%
Noninterest expense to average assets (1) 3.13% 3.32% 3.30%
Nonperforming loans and foreclosed real estate to
total assets at end of period .65% .83% .86%
</TABLE>
(1) Annualized for the three months ended March 31, 2000 and 1999.
11
<PAGE>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
The following table sets forth, for the periods indicated, information regarding
(i) the total dollar amount of interest and dividend income of the Company from
interest-earning assets and the resultant average yields; (ii) the total dollar
amount of interest expense on interest-bearing liabilities and the resultant
average cost; (iii) net interest/dividend income; (iv) interest-rate spread; (v)
net interest margin; and (vi) ratio of average interest-earning assets to
average interest-bearing liabilities.
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
2000 1999
----------------------------- ----------------------------
Interest Average Interest Average
Average and Yield/ Average and Yield/
Balance Dividends Rate Balance Dividends Rate
------- --------- ------- ------- --------- -------
($ in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans $ 159,485 3,435 8.62% $ 133,404 2,900 8.70%
Securities 56,933 800 5.62 47,851 621 5.19
Other interest-earning assets (1) 544 9 6.62 765 9 4.71
--------- ------- --------- -------
Total interest-earning assets 216,962 4,244 7.82 182,020 3,530 7.76
------- -------
Noninterest-earning assets (2) 10,243 10,003
--------- ---------
Total assets $ 227,205 $ 192,023
========= =========
Interest-bearing liabilities:
Savings and NOW deposits 12,521 47 1.50 12,640 47 1.49
Money-market deposits 37,461 380 4.06 39,542 363 3.67
Time deposits 74,392 981 5.27 67,863 893 5.26
Borrowings (3) 50,664 617 4.87 23,015 289 5.02
--------- ------- --------- -------
Total interest-bearing liabilities 175,038 2,025 4.63 143,060 1,592 4.45
------- -------
Demand deposits 24,519 19,062
Noninterest-bearing liabilities 3,186 2,803
Stockholders' equity 24,462 27,098
--------- ---------
Total liabilities and
stockholders' equity $ 227,205 $ 192,023
========= =========
Net interest income $ 2,219 $ 1,938
======= =======
Interest-rate spread (4) 3.19% 3.31%
==== ====
Net interest margin (5) 4.09% 4.26%
==== ====
Ratio of average interest-earning assets to
average interest-bearing liabilities 1.24 1.27
==== ====
</TABLE>
(1) Includes interest-bearing deposits and federal funds sold.
(2) Includes nonaccrual loans.
(3) Includes advances from Federal Home Loan Bank, investment repurchase
agreements and federal funds purchased.
(4) Interest-rate spread represents the difference between the
weighted-average yield on interest-earning assets and the
weighted-average cost of interest-bearing liabilities.
(5) Net interest margin is net interest income divided by average
interest-earning assets.
12
<PAGE>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
Comparison of the Three Months Ended March 31, 2000 and 1999
Results of Operations:
General. Net earnings for the three months ended March 31, 2000 were
$372,000 or $.18 basic and diluted earnings per share compared to net
earnings of $302,000 or $.13 basic and diluted earnings per share for
the three months ended March 31, 1999. The increase in the Company's
net earnings was primarily due to an increase in net interest income,
partially offset by an increase in noninterest expenses.
Interest Income and Expense. Interest income increased by $714,000, or
20.2%, from $3.5 million for the three months ended March 31, 1999 to
$4.2 million for the three months ended March 31, 2000. Interest
income on loans increased $535,000 primarily due to an increase in
the average loan portfolio balance from $133.4 million for the three
months ended March 31, 1999 to $159.5 million for the comparable
period in 2000, partially offset by a decrease in the average yield
from 8.70% in 1999 to 8.62% in 2000. Interest on securities increased
$179,000 primarily due to an increase in the average securities
portfolio balance from $47.9 million in 1999 to $56.9 million in 2000
and an increase in the weighted average yield of 43 basis points.
Interest expense on deposits increased to $1.4 million for the three
months ended March 31, 2000 from $1.3 million for the three months
ended March 31, 1999. Interest expense on deposits increased due to a
increase in the average rate paid on deposits from 4.34% in 1999 to
4.53% in 2000 and an increase in the average balance from $120.0
million in 1999 to $124.4 million in 2000.
Interest expense on borrowings increased $328,000 to $617,000 for the
three months ended March 31, 2000 from $289,000 for the three months
ended March 31, 1999. Interest expense on borrowings increased due to
an increase in the average balance of borrowings outstanding from
$23.0 million in 1999 to $50.7 million in 2000, partially offset by a
decrease in the weighted-average rate paid for the three months ended
March 31, 2000 compared to the same period in 1999.
Provision for Loan Losses. The provision for loan losses is charged to
earnings to bring the total allowance to a level deemed appropriate
by management and is based upon historical experience, the volume and
type of lending conducted by the Company, industry standards, the
amount of nonperforming loans, general economic conditions,
particularly as they relate to the Company's market areas, and other
factors related to the collectibility of the Company's loan
portfolio. The provision was $165,000 for the three months ended
March 31, 2000 compared to $155,000 for the comparable period in
1999. Management believes the balance in the allowance for loan
losses of $1.4 million at March 31, 2000 is adequate.
Noninterest Income. Noninterest income increased $16,000 primarily due
to an increase in service charges on deposit accounts of $40,000,
partially offset by a decrease in net gains from the sales of
securities of $29,000 for the three months ended March 31, 2000 when
compared to the same period in 1999.
Noninterest Expenses. Noninterest expenses increased $191,000 during
the three-month period ended March 31, 2000 compared to the same
period in 1999, primarily due to increases in salaries and employee
benefits of $139,000 and other expenses of $28,000 which relates to
the Company"s overall expansion plans.
Provision for Income Taxes. The income tax provision for the three
months ended March 31, 2000 was $204,000 (an effective rate of 35.4%)
compared to $178,000 (an effective rate of 37.1%) for the comparable
1999 period.
13
<PAGE>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
Year 2000 Issues
The Company's operating and financial systems have been found to be compliant;
the "Y2K Problem" has not adversely affected the Company's operations nor does
management expect that it will.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk is the risk of loss from adverse changes in market prices and rates.
The Company's market risk arises primarily from interest rate risk inherent in
its lending and deposit taking activities. The Company has little or no risk
related to trading accounts, commodities or foreign exchange.
Management actively monitors and manages its interest rate risk exposure. The
primary objective in managing interest-rate risk is to limit, within established
guidelines, the adverse impact of changes in interest rates on the Company's net
interest income and capital, while adjusting the Company's asset-liability
structure to obtain the maximum yield-cost spread on that structure. Management
relies primarily on its asset-liability structure to control interest rate risk.
However, a sudden and substantial increase in interest rates could adversely
impact the Company's earnings, to the extent that the interest rates borne by
assets and liabilities do not change at the same speed, to the same extent, or
on the same basis. There have been no significant changes in the Company's
market risk exposure since December 31, 1999.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceeding to which Pointe Financial
Corporation or any of its subsidiaries is a party or to which any of their
property is subject.
14
<PAGE>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of this report.*
2.1 Plan of Merger and Merger Agreement dated February 14, 1997 by
and between Pointe Federal Savings Bank and Pointe Bank
(Exhibit 2.1 to the Registrant's Form SB-2 Registration
Statement, File No. 333-49835, as initially filed with the
Securities and Exchange Commission on April 9, 1998 [the
"Registration Statement"]).
3.1 Articles of Incorporation of the Registrant (Exhibit 3.1 to the
Registration Statement).
3.2 By-Laws of the Registrant (Exhibit 3.2 to the Registration
Statement).
4.1 Specimen Common Stock Certificate (Exhibit 4.1 to the
Registration Statement).*
10.1** 1994 Non-Statutory Stock Option Plan (Exhibit 10.1 to the
Registration Statement).
10.2** Deferred Compensation Plan (Exhibit 10.2 to the Registration
Statement).
10.3 Office Lease Agreement dated October 8, 1986 by and between
Centrum Pembroke, Inc. and Flamingo
Bank (Exhibit 10.3 to the Registration Statement).
10.4 Lease dated as of July 15, 1992 between Konrad Ulmer and
Pointe Savings Bank (Exhibit 10.4 to
the Registration Statement).
10.5 Lease Agreement dated January 23, 1995 by and between Hollywood
Associates VI and Pointe Bank (Exhibit 10.5 to the Registration
Statement).
10.6 Credit Agreement dated August 18, 1997 between Independent
Bankers' Bank of Florida and Pointe
Bank (Exhibit 10.6 to the Registration Statement).
10.7 Credit Agreement dated October 14, 1997 between SunTrust
Bank/Miami, N.A. and Pointe Bank
(Exhibit 10.7 to the Registration Statement).
10.8 Agreement for Advances and Security Agreement with Blanket
Floating Lien dated November 24, 1997 between Pointe Bank and
the Federal Home Loan Bank of Atlanta (Exhibit 10.8 to the
Registration Statement).
10.9 Equipment Sales and Software License Agreements between
Information Technology, Inc. and Pointe
Financial Corporation (Exhibit 10.9 to the Registration
Statement).
10.10 Master Equipment Lease Agreement dated May 7, 1997 between
Leasetec Corporation and Pointe Financial Corporation (Exhibit
10.10 to the Registration Statement).
10.11*** Letter Agreement dated March 9, 1995 between Pointe Financial
Corporation and R. Carl Palmer, Jr.
(Exhibit 10.11 to the Registration Statement).
10.12** 1998 Incentive Compensation and Stock Award Plan.
10.13*** Employment agreement between the company and R. Carl
Palmer, Jr.
10.14*** Employment agreement between the company and Beverly P.
Chambers
10.15*** Employment agreement between the company and Bradley R.
Meredith
27 Financial Data Schedule (for SEC use only)
- ----------
* Exhibits followed by a parenthetical reference are incorporated
herein by reference from the documents described therein.
** Exhibits 10.1, 10.2, 10.11 and 10.12 are compensatory plans or
arrangements.
*** Contracts with Management.
(b) No reports on Form 8-K were filed during the period covered by this report.
15
<PAGE>
POINTE FINANCIAL CORPORATION AND SUBSIDIARIES
SIGNATURES
In accordance with 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.
POINTE FINANCIAL CORPORATION
(Registrant)
Date: April 26, 2000 By: /s/ R. Carl Palmer, Jr.
------------------ -----------------------
R. Carl Palmer, Jr., President and
Chief Executive Officer
Date: April 26, 2000 By: /s/ Bradley R. Meredith
------------------ -----------------------
Bradley R. Meredith, Senior Vice President
and Chief Financial Officer
16
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from Form 10-QSB
for the period ended March 31, 2000 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 5,058
<INT-BEARING-DEPOSITS> 131<F1>
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 55,097
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 162,056
<ALLOWANCE> 1,446
<TOTAL-ASSETS> 228,428
<DEPOSITS> 147,152
<SHORT-TERM> 7,863
<LIABILITIES-OTHER> 3,718
<LONG-TERM> 45,000
23
0
<COMMON> 0
<OTHER-SE> 24,672
<TOTAL-LIABILITIES-AND-EQUITY> 228,428
<INTEREST-LOAN> 3,435
<INTEREST-INVEST> 800
<INTEREST-OTHER> 9
<INTEREST-TOTAL> 4,244
<INTEREST-DEPOSIT> 1,408
<INTEREST-EXPENSE> 2,025
<INTEREST-INCOME-NET> 2,219
<LOAN-LOSSES> 165
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,776<F2>
<INCOME-PRETAX> 576
<INCOME-PRE-EXTRAORDINARY> 372
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 372
<EPS-BASIC> .18
<EPS-DILUTED> .18
<YIELD-ACTUAL> 4.09
<LOANS-NON> 1,477
<LOANS-PAST> 2
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,331
<CHARGE-OFFS> 50
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1,446
<ALLOWANCE-DOMESTIC> 0<F3>
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0<F3>
<FN>
(1) Includes short-term investments and interest-bearing deposits with banks.
(2) Other expense includes: salaries and employee benefits of $947,
occupancy and equipment of $281, and other expenses which totaled $548.
(3) Items are only disclosed on an annual basis in the Company"s Form 10-KSB,
and are, therefore, not included in this Financial Data Schedule.
</FN>
</TABLE>
