SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
Quarterly Report Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934.
For the Quarter ended: December 31, 1996 Commission File No. 0-18096
MID-COAST BANCORP, INC.
-----------------------
(Exact name of registrant as specified in its charter)
Delaware 01-0454232
- -------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1768 Atlantic Highway, PO Box 589
Waldoboro, Maine 04572
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including are code: (207) 832-7521
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
----- -----
The number of shares outstanding of each of the registrant's classes
of common stock, as of December 31, 1996, is 230,171.
Page 1 of 15.
MID-COAST BANCORP, INC.
Index
PART I FINANCIAL INFORMATION Page
----
Item 1: Consolidated Balance Sheets of Mid-Coast Bancorp, Inc.
(Unaudited), at December 31, 1996 and March 31, 1996 3
Consolidated Statements of Operations of Mid-Coast Bancorp,
Inc. (Unaudited), Three Months Ended December 31, 1996 and
1995 and Nine Months Ended December 31, 1996 and 1995 5
Consolidated Statement of Changes in Stockholders' Equity
of Mid-Coast Bancorp, Inc. (Unaudited) for the period April
1, 1995 to December 31, 1996 6
Consolidated Statements of Cash Flows of Mid-Coast Bancorp,
Inc. (Unaudited), for the Nine Months Ended December 31,
1996 and 1995 7
Notes to the Consolidated Financial Statements (Unaudited) 8
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II OTHER INFORMATION 14
SIGNATURES 15
MID-COAST BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
ASSETS
December 31, 1996 March 31, 1996
----------------- --------------
Cash and due from banks $ 994,980 $ 297,198
Interest bearing deposits 98,002 805,853
Federal funds sold 1,125,000 1,625,000
--------------------------------
Cash and cash equivalents 2,217,982 2,728,051
Time deposits 1,289,000 1,780,101
Investments available for sale, at market 2,052,734 528,673
Held to maturity investment securities
(Market value of $1,895,360 at December 31, 1996
and $3,861,576 at March 31, 1996) 1,904,182 3,904,862
Held to maturity mortgage backed securities
(Market value of $173,623 at December 31, 1996
and $219,775 at March 31, 1996) 173,244 218,323
Loans held for sale 185,225 559,079
Loans 48,284,883 42,838,169
Less: Allowance for loan losses 296,389 221,356
Deferred loan fees 123,811 151,254
--------------------------------
47,864,683 42,465,559
Bank premises and equipment, net 1,546,939 1,386,589
Other Assets:
Accrued interest receivable:
Loans 254,085 244,963
Time deposits/investment 61,914 68,447
Mortgage backed securities 1,369 1,181
Income taxes receivable 18,460 60,220
Deferred income taxes 94,000 94,000
Prepaid expenses and other assets 83,104 97,881
Real estate owned 91,823 224,137
--------------------------------
Total other assets 604,755 790,829
--------------------------------
Total assets $57,838,744 $54,362,066
================================
See accompanying notes.
MID-COAST BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
December 31, 1996 March 31, 1996
----------------- --------------
Liabilities:
Deposits:
Demand deposits $ 2,512,556 $ 1,802,239
NOW accounts 3,588,995 3,111,931
Savings 5,079,196 4,645,035
Money market deposit accounts 5,020,648 4,740,543
Certificates of deposit 26,238,793 27,517,154
--------------------------------
Total deposits 42,440,188 41,816,902
Advances from the Federal Home Loan Bank 10,190,000 7,465,000
Accrued expenses and other liabilities 233,565 154,087
--------------------------------
Total liabilities 52,863,753 49,435,989
Stockholders' equity:
Preferred stock, $1 par value, 500,000
shares authorized; none issued
or outstanding 0 0
Common stock, $1 par value, 1,500,000
shares authorized; 230,171
shares issued and outstanding, 230,171 229,031
(229,031 at March 31, 1996)
Paid-in capital 1,458,094 1,448,282
Retained earnings 3,286,726 3,248,764
--------------------------------
Total stockholders' equity 4,974,991 4,926,077
--------------------------------
Total liabilities and stockholders' equity $57,838,744 $54,362,066
================================
See accompanying notes.
MID-COAST BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
December 31 December 31
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
Interest income:
Interest on loans $1,050,035 $1,007,926 $3,089,153 $2,975,054
Interest on investment securities 67,700 52,002 188,105 145,994
Interest on mortgage backed securities 18,547 3,840 38,876 12,178
Other 29,155 67,703 110,802 159,170
-------------------------------------------------
Total interest income 1,165,437 1,131,471 3,426,936 3,292,396
Interest expense:
Interest on deposits 473,855 519,929 1,450,791 1,464,805
Interest on borrowed money 138,028 125,401 360,513 411,502
-------------------------------------------------
Total interest expense 611,883 645,330 1,811,304 1,876,307
-------------------------------------------------
Net interest income 533,554 486,141 1,615,632 1,416,089
Provision for losses on loans 21,000 21,000 72,000 41,000
-------------------------------------------------
Net interest income after provision
for loan losses 532,554 465,141 1,543,632 1,375,089
Non interest income:
Loan service and other loan fees 8,344 9,021 30,259 26,826
Gain on loans sold and held for sale 13,639 18,515 30,465 30,248
Gain on sale of Real Estate Owned 1,010 0 1,639 0
Other 39,135 28,276 115,935 82,197
-------------------------------------------------
Total non interest income 62,128 55,812 178,298 139,271
Non interest expense:
Compensation of directors, officers and staff 164,339 158,243 486,867 469,650
Building occupancy 10,062 7,784 29,613 23,102
Repairs and maintenance 6,086 7,328 23,880 20,260
Depreciation and amortization 15,617 15,417 46,729 51,508
Advertising 4,461 6,040 23,736 26,036
Insurance and bonds (note 2) 35,159 33,933 346,839 102,524
Legal, audit and examinations 18,654 13,349 48,037 35,073
Taxes (other than income) 10,234 10,937 35,037 36,199
Employee benefits 14,408 11,764 59,339 46,581
Data processing 41,194 28,361 110,275 79,431
Real Estate Owned 1,934 511 10,975 22,237
Other 91,285 92,450 248,506 231,557
-------------------------------------------------
Total non interest expense 413,433 386,117 1,469,833 1,144,158
-------------------------------------------------
Income before income taxes 181,249 134,836 252,097 370,202
Income taxes 59,850 48,250 96,933 120,744
-------------------------------------------------
Net income $ 121,399 $ 86,586 $ 155,164 $ 249,458
=================================================
Earnings per share $ 0.53 $ 0.38 $ 0.68 $ 1.04
=================================================
See accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
For the Period April 1, 1995 to December 31, 1996
Total
Common Paid-in Retained Stockholders'
Stock Capital Earnings Equity
------ ------- -------- -------------
Balance, April 1, 1995 $217,084 $1,258,178 $3,247,334 $4,722,596
Issuance of 918 shares
of common stock upon
exercise of options 918 6,214 0 7,132
Net income 0 0 237,142 237,142
Dividends declared
($.47 per share) 0 0 (107,123) (107,123)
5% stock dividend 10,775 181,881 (194,894) (2,238)
------------------------------------------------
Balance, December 31, 1995 228,777 1,446,273 3,182,459 4,857,509
Issuance of 254 shares
of common stock upon
exercise of options 254 2,009 0 2,263
Net Income 0 0 66,305 66,305
------------------------------------------------
Balance, March 31, 1996 229,031 1,448,282 3,248,764 4,926,077
Issuance of 1,140 shares
of common stock upon
exercise of options 1,040 9,812 0 10,952
Net Income 0 0 155,164 155,164
Cash dividends declared
($.51 per share) 0 0 (117,202) (117,202)
------------------------------------------------
Balance, December 31, 1996 $230,171 $1,458,094 $3,286,726 $4,974,991
================================================
See accompanying notes.
MID-COAST BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
December 31,
--------------------------
1996 1995
---- ----
Cash flows from operating activities:
Net income $ 155,164 $ 237,142
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation, amortization, and accretion 7,722 21,816
Provisions for losses on loans 72,000 56,000
Gain on sale of loans (30,465) (30,248)
Deferred fees 9,613 24,448
(Gain) loss on sale of real estate owned (1,639) 12,316
Loans originated for sale (982,624) (2,212,302)
Proceeds from sales of loans 1,380,195 2,103,050
Increase in other assets 12,000 (41,844)
Change in income taxes receivable/payable 41,760 (27,709)
Increase(decrease) in other liabilities 79,478 (22,497)
--------------------------
Net cash provided by operating activities 743,204 120,172
Cash flows from investing activities:
Loan originations and repayments, net (5,444,520) (154,009)
Net increase (decrease) in time deposits 493,000 (1,402,332)
Investment and mortgage-backed securities:
Purchases (2,579,060) (912,500)
Proceeds from maturities and repayments 3,107,558 935,609
Purchases of property and equipment (207,079) (156,809)
Sale of real estate owned 134,792 18,075
--------------------------
Net cash used by investing activities (4,495,309) (1,671,966)
Cash flows from financing activities:
Net increase (decrease) in certificates of deposit (1,278,361) 1,469,097
Net increase in demand, NOW accounts, savings
and money market deposit accounts 1,901,647 3,325,507
FHLB advances 8,300,000 1,750,000
FHLB advances paid (5,575,000) (4,000,000)
Dividends paid in cash (117,202) (109,360)
Sale of common stock 10,952 7,132
--------------------------
Net cash provided by financing activities 3,242,036 2,442,376
--------------------------
Net increase (decrease) in cash and cash equivalents (510,069) 890,582
Cash and cash equivalents, at beginning of period 2,728,051 3,015,032
--------------------------
Cash and cash equivalents, at end of period $ 2,217,982 $ 3,905,614
==========================
See accompanying notes.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
December 31, 1996
1. Financial Statements
--------------------
The accompanying consolidated financial statements include the
accounts of Mid-Coast Bancorp, Inc. (the "Company") and its wholly-
owned subsidiary, The Waldoboro Bank, F.S.B. (the "Bank"). The
accounts of the Bank include its wholly-owned subsidiary, The First
Waldoboro Corporation. Such consolidated financial statements are
unaudited. However, in the opinion of management, all adjustments
necessary for a fair presentation of the consolidated financial
statements have been included, and all such adjustments are of a
normal and recurring nature.
Amounts presented in the consolidated financial statements as of March
31, 1996 were derived from audited consolidated financial statements.
2. Insurance Fund Resolution
-------------------------
The resolution of the Savings Insurance Fund (SAIF) and Bank Insurance
Fund (BIF) has been established by Congress. Effective September 30,
1996, Banks insured by the SAIF will pay a one time assessment to
recapitalize SAIF. The one-time charge of $241,299 is reflected in
the balance sheet and statement of operations as of and for the period
ended December 31, 1996.
3. Investments Available For Sale
------------------------------
At December 31, 1996 and March 31, 1996, the market value of
investments available for sale was approximately equal to the cost of
such investments.
4. Dividends Paid
--------------
On October 15, 1996, the Company declared a cash dividend of $0.26 per
share payable on December 31, 1996 to shareholders of record on
December 2, 1996.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
General
- -------
The financial condition and results of operations of Mid-Coast
Bancorp, Inc. (the "Holding Company") essentially reflect the operation of
its subsidiary The Waldoboro Bank, F.S.B. (the "Bank" or "Waldoboro"). Like
most savings institutions, Waldoboro's earnings are primarily dependent upon
its net interest income, which is determined by (i) the difference (known as
the interest rate spread) between yields on interest-earning assets and
rates paid on interest-bearing liabilities and (ii) the relative amounts of
interest-earning assets and interest-bearing liabilities outstanding.
The Bank and the entire savings institution industry are significantly
affected by prevailing economic conditions as well as government policies
and regulations concerning, among other things, monetary and fiscal affairs,
housing and financial institutions. Deposit flows are influenced by a
number of factors including interest rates on money market funds and other
competing investments, account maturities and levels of personal income and
savings. Lending activities are influenced by, among other things, the
demand for and supply of housing, conditions in the construction industry
and the availability and cost of funds, and loan rewrites resulting from
declining interest rates. Sources of funds for lending activities include
deposits, loan payments, proceeds from sales of loans and investments,
investment returns and borrowings.
Due to the relative interest rate sensitivity of the Bank's assets and
liabilities, the cost of funds to the Bank (principally interest on deposits
and borrowings) does not reprice as fast as the yield on its assets
(principally interest received on loans and investments). Accordingly,
sharp increases or decreases in the general level of interest rates will
have a significant impact on the Bank's interest rate spreads in the short
term.
Financial Condition
- -------------------
Total assets increased $3,476,678 or 6.40% between March 31, 1996 and
December 31, 1996. Of this amount cash and cash equivalents decreased
$510,069 or 18.70%, investment securities and time deposits decreased
$967,720 or 15.57%, and loans increased $5,446,714 or 12.71%. The Bank's
increase in loans is primarily affected by a renewed demand in mortgage
lending, coupled with a continued active role in the origination of consumer
and commercial loans. As a result, the volume of cash and cash equivalents,
and time deposits have decreased in order to partially fund the increased
loan volume.
Total liabilities increased $3,427,764 or 6.93% between March 31, 1996
and December 31, 1996. Increases occurred in all deposit areas except
Certificates of Deposit which decreased $1,278,361 or 4.65%. Advances from
the FHLB increased $2,725,000 or 36.50%. These increased borrowings were
used to fund loans not funded through the Bank's regular sources of
liquidity.
The allowance for loan losses amounted to $296,389 at December 31,
1996, compared to $221,356 at March 31, 1996. The increase in allowance for
loan losses is primarily due to the current periodic provision for loan
losses. At December 31, 1996, the Bank's allowance for loan losses as a
percentage of total loans and allowance for loan losses as a percentage of
non-performing loans was 0.61% and 281%.
At December 31, 1996 and March 31, 1996, loans contractually past due
90 days or more amounted to $105,528 and $375,338 or 0.2% and 0.9% of loans
outstanding, respectively, at such dates. Non-accrual of interest on these
loans totalled $9,416 at December 31, 1996 as compared with $42,901 at March
31, 1996. Management does not believe these loans materially affect the
overall credit quality of the Bank's loan portfolio.
RESULTS OF OPERATIONS
Three Months Ended December 31, 1996 and 1995
Net Income
- ----------
Mid-Coast recorded net income for the three months ended December 31,
1996 of $121,399 or $0.52 cents per share compared to $86,586 or $0.38 cents
per share for the period ended December 31, 1995. The increase is primarily
the result of a modest increase in total interest income of $33,966 or
3.00%, a decrease in total interest expense of $33,447 or 5.18%, and an
increase in total other income of $6,316 or 11.32%.
Interest Income
- ---------------
Interest income increased $33,966 or 3.0% for the three month period
ended December 31, 1996, primarily as a result of increases in loan volume.
Originations of commercial and consumer loan has increased, thereby
contributing to relatively higher yield in the overall loan portfolio.
During the three month period, the average yield on consumer and commercial
loans was 9.42% and 9.51% respectively. Mortgage balances have increased
$4,309,867 or 9.80%, and have an average yield for the period of 8.65%, a
decrease of 16 basis points for the same period in the previous fiscal year.
During the quarter ended December 31, 1996, the level of investments and
mortgage-backed securities income increased 54.45% when compared to the
previous period, producing additional income of $30,405. This is primarily
a result of an increase in the volume of investments and mortgage-backed
securities and the sale of one security. Other interest income decreased
$38,548 or 56.94% due to decreases in federal funds sold.
Interest Expense
- ----------------
Total interest expense for the three month period ended December 31,
1996, decreased $33,447 or 5.18%. This decrease is primarily the result of
a decrease in the average cost of funds from 5.11% at December 31, 1995 to
4.67% at December 31, 1996. Interest on borrowed money increased primarily
as a result of the increased level of borrowing, which were partially used
to fund increased loan demand.
Net Interest Income
- -------------------
Net interest income, before provisions for loan losses, increased
$67,413 or 13.87% for the quarter ended December 31, 1996 compared to the
same quarter in the previous fiscal year. This increase is primarily the
result of average balance increases in mortgage, commercial, and consumer
loans and a decrease in the average cost of funds on deposits and
borrowings.
Provisions for Losses on Loans
- ------------------------------
The allowance for loan losses is established through a provision for
loan losses based on management's evaluation of the risk inherent in its
loan portfolio and the general economy. Such evaluation considers numerous
factors including general economic conditions, loan portfolio compositions,
prior loss experience, the estimated fair value of the underlying collateral
and other factors that warrant recognition in providing for an adequate loan
loss allowance. The Bank's provision for losses on loans during the three
month period ended December 31, 1996, remained consistent at $21,000 with
the same quarter in the previous fiscal year.
Non-Interest Income
- -------------------
Total non-interest income for the three month period ended December
31, 1996, increased $6,316 or 11.32%, primarily as a result of increased
fees and charges particularly related to NOW accounts and overdraft fees.
Other Expenses
- --------------
Total other expenses increased $27,316 or 7.07% for the three months
ended December 31, 1996, as compared to the same period in the previous
fiscal year. The increase is primarily related to an $6,096 or 3.85%
increase in compensation of directors, officers, and staff, a $12,833 or
45.25% increase in data processing relating to the Bank's computer
conversion scheduled for February 1997, and a $5,305 or 39.74% increase in
legal, audit and examinations.
Nine Months Ended December 31, 1996 and 1995
Net Income
- ----------
The Bank reported net income of $155,164 for the nine months ended
December 31, 1996, compared to $249,458 for the nine months ended December
31, 1995, which represents a decrease of $94,294. This decrease is
primarily the result of the one-time assessment of $241,299, which is the
Bank's portion, legislated by Congress to recapitalize the Savings
Association Insurance Fund (SAIF). Net income without the assessment would
have been $324,399 or $1.41 per share for the nine months ended December 31,
1996 compared to 1.04 per share for the same period in the previous fiscal
year. Included in net income for the period ended December 31, 1996 is an
increase of $134,540 or 4.09% in total interest income, a decrease of
$65,003 or 3.46% in total interest expense, an increase of $39,027 or 28.02%
in total other income, and an increase of $325,675 or 28.46% in total other
expenses, primarily as a result of the one-time assessment to recapitalize
SAIF. Without the assessment total other expenses would have increased
$84,376 or 7.37%.
Interest Income
- ---------------
Total interest income for the nine months ended December 31, 1996,
increased $134,540 or 4.09% as compared to the same period in the previous
fiscal year. Interest on loans increased $114,099 or 3.84%, primarily due
to increases in the average yield paid on commercial and consumer loans and
increases in the average balance of mortgages. Interest on investment
securities and mortgage backed securities increased $42,111 or 28.84% and
$26,698 or 219.23% respectively, primarily due to increases in the average
balance and general increases in prevailing market rates. These increases
are partially offset by a decrease of $48,368 or 30.39% in miscellaneous
interest income primarily due to decreases in federal funds and other
interest bearing deposits.
Interest Expense
- ----------------
Total interest expense for the nine month period ended December 31,
1996 decreased $65,003 or 3.46% from the comparable period in the previous
fiscal year. Interest expense on deposits decreased $14,014 or 0.96% and
interest on borrowed money decreased $50,989 or 12.39%. The decrease in
interest expense is primarily affected by the reduction in the average cost
of funds for the period of 28 basis points compared to the same period in
the previous fiscal year.
Net Interest Income
- -------------------
Total net interest income for the nine months ended December 31, 1996
increased $199,543 or 14.09%. This increase is primarily the result of
increases in the average balances of commercial, consumer and mortgage loans
and a decrease in the average cost of funds on deposits and borrowings.
Provisions for Losses on Loans
- ------------------------------
The Bank's provision for losses on loans for the nine months period
ended December 31, 1996 increased to $72,000 as compared to $41,000 in the
previous fiscal year. The provision is deemed appropriate given the risks
associated with the Bank's increased volume in consumer and commercial
loans.
Non-Interest Income
- -------------------
Non-interest income for the nine months ended December 31, 1996
increased $39,027 or 28.02% compared to the comparable period in 1995.
Increases occurred in all categories of other income, with miscellaneous
income increasing $33,738 or 41.05%. Miscellaneous income is the result of
increased fees and charges particularly related to NOW accounts and
overdraft fees.
Non-interest Expenses
- ---------------------
Non-interest expenses for the nine month period ended December 31,
1996 increased $325,675 or 28.46% as compared to the same period in the last
fiscal year. The increase in other expenses is primarily due to the one-
time assessment of $241,299 required to recapitalize the SAIF.
Additionally, increases occurred in data processing relating to the Bank's
computer conversion and miscellaneous expenses primarily consisting of
shareholder services. Without the one-time assessment, other expenses would
have increased $84,376 or 7.37%.
Insurance of Deposits
- ---------------------
The Bank is a member of the SAIF of the FDIC, and the Bank pays most
of its deposit insurance assessments to the SAIF of the FDIC. The FDIC also
maintains another insurance fund, the Bank Insurance Fund ("BIF"), which
primarily insures the deposits of commercial banks and savings and loan
associations. The SAIF also insures the deposits acquired by a BIF-insured
institution from a SAIF-insured institution.
Applicable law requires that both the SAIF and the BIF be
recapitalized to a ratio of 1.25% of reserves to deposits. The BIF achieved
the 1.25% reserve ratio in May 1995, but the SAIF was not then expected to
be recapitalized until after 2001. In recognition of the BIF's achievement
of the 1.25% reserve ratio, the FDIC reduced the deposit insurance
assessment rates for BIF-assessable deposits. Effective January 1, 1996,
the FDIC reduced the annual assessments for BIF-insured institutions to the
legal minimum of $2,000, except for institutions that were not well
capitalized or that were assigned to the higher supervisory risk categories.
The FDIC estimated that 92% of the BIF-insured institutions would pay only
the minimum annual assessment.
In contrast, SAIF reserves had not grown as quickly as BIF reserves
due to a number of factors, including the fact that a significant portion of
SAIF premiums had been and are currently being used to make payments on
bonds ("FICO bonds") issued in the late 1980's by the Financing Corporation
to recapitalize the now defunct Federal Savings and Loan Insurance
Corporation. Given the undercapitalized status of the SAIF, the FDIC had
continued the range of assessment rates of $0.23 to $0.31 per $100 of SAIF-
assessable deposits.
On September 30, 1996, the Deposit Funds Insurance Act of 1996 (the
"1996 Act") was enacted into law, and it amended the Federal Deposit
Insurance Act in several ways to recapitalize the SAIF and reduce the
disparity in the assessment rates for the BIF and the SAIF. The 1996 Act
authorized the FDIC to impose a special assessment on all institutions with
SAIF-assessable deposits in the amount necessary to recapitalize the SAIF.
As implemented by the FDIC, the special assessment has been fixed, subject
to adjustment, at 65.7 basis points of an institution's SAIF-assessable
deposits, and the special assessment was paid on November 27, 1996. The
special assessment is based on the amount of SAIF-assessable deposits held
on March 31, 1995. Based on the foregoing, the special SAIF assessment was
paid by the Bank on November 27, 1996 was $241,299, and such amount has been
accrued in the financial statements as of and for the period ended September
30, 1996.
Liquidity and Capital Resources
- -------------------------------
On December 31, 1996, the Holding Company's stockholders' equity was
$4,974,991 or 8.60% of total assets compared to $4,926,077 or 9.06% at March
31, 1996.
The Office of Thrift Supervision ("OTS") requires savings institutions
such as Waldoboro to maintain a specified ratio of cash and short-term
investment securities to new withdrawable deposits and borrowings with
maturities of one year or less. This minimum liquidity ratio, currently 5%,
may vary from time to time, depending upon general economic conditions and
deposit flows. As a part of its asset/liability management program,
Waldoboro has historically maintained liquidity in excess of regulatory
requirements to better match its short-term liabilities. At December 31,
1996, Waldoboro's liquidity ratio was approximately 14.55% compared to
14.45% at December 31, 1995.
The minimum capital standards set by the OTS have three components:
(1) tangible capital; (2) leverage ratio or "core" capital; and (3) risk-
based capital. The tangible capital requirement is 1.5% and the leverage
ratio or "core" capital requirement is 3% of an institution's adjusted total
assets. The risk-based capital requirement is 8% of risk-weighted assets.
The amount of an institution's risk-weighted assets is determined by
assigning a "risk-weighted" value to each of the institution's assets.
Under the regulations, the "risk-weighted" of a particular type of assets
depends upon the degree of credit risk which is deemed to be associated with
that type of asset.
At December 31, 1996, Waldoboro had tangible capital of $4,937,000 or
8.53% of adjusted total assets, which exceeds the minimum required tangible
capital and leverage ratio or "core" capital requirements. Waldoboro had
risk-based capital of $5,233,000 or 15.24% of risk-weighted assets at
December 31, 1996.
PART II OTHER INFORMATION
Item 1. Legal Proceedings.
------------------
There was no material litigation pending to which the Registrant was
a party or to which the property of the Registrant was subject during the
quarter ended December 31, 1996.
Item 2. Changes in Securities.
----------------------
None.
Item 3. Defaults Upon Senior Securities.
--------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
None.
Item 5. Other Information.
------------------
None.
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits required by Item 601 of Regulation S-K.
Exhibit 27-Financial Data Schedule
(b) Reports on Form 8-K.
None.
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.
MID-COAST BANCORP, INC.
/s/ Wesley E. Richardson
----------------------------------------
(Registrant)
Date February 6, 1997 /s/ Wesley E. Richardson
---------------------------- ----------------------------------------
(Signature)
Wesley E. Richardson
President and Treasurer