United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
- --- Act of 1934
For the quarterly period ended December 31, 2002
- --- Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____ to _____
Commission File Number: 0-23345
WYMAN PARK BANCORPORATION, INC.
-------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
Delaware 52-2068893
- --------------------------------------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
11 West Ridgely Road, Lutherville, Maryland 21093
-------------------------------------------------
(Address of Principal Executive Offices)
(410)-252-6450
--------------
Registrant's Telephone Number, Including Area Code
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d)of the Exchange Act 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 ___
---
As of February 5, 2003, the issuer had 822,490 shares of Common Stock issued and
outstanding.
Transitional Small Business Disclosure Format (check one):
Yes___ No X
-------
Contents
Part I. Financial Information Page
--------------------- ----
Item I. Financial Statements
Consolidated Statements of Financial Condition at
December 31, 2002 and June 30, 2002..................................... 2
Consolidated Statements of Operations for the Three Month and Six
Month Periods ended December 31, 2002 and 2001.... ................ 3
Consolidated Statements of Cash Flows for the Six Month
Periods Ended December 31, 2002 and 2001.............................. 4
Notes to Consolidated Financial Statements............................... 5-6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................... 7-12
Item 3. Controls and Procedures................................................ 12
Part II. Other Information
-----------------
Item 1. Legal Proceedings...................................................... 13
Item 2. Changes in Securities and Use of Proceeds.............................. 13
Item 3. Defaults Upon Senior Securities........................................ 13
Item 4. Submission of Matters to a Vote of Security Holders.................... 13
Item 5. Other Information...................................................... 14
Item 6. Exhibits and Reports on Form 8-K....................................... 14
Signatures...................................................................... 15
Certifications................................................................. 16-17
1
Wyman Park Bancorporation, Inc. and Subsidiaries
Lutherville, Maryland
Consolidated Statements of Financial Condition
December 31, June 30,
2002 2002
---- ----
(Unaudited)
Assets
------
Cash and noninterest bearing deposits $ 930,845 $ 263,180
Interest bearing deposits in other banks 5,076,558 3,516,191
Federal funds sold 6,545,009 4,641,478
------------ ------------
Total cash and cash equivalents 12,552,412 8,420,849
Investments 4,025,434 --
Loans receivable, net 51,929,775 61,072,782
Mortgage-backed securities held to maturity
at amortized cost, fair value of $96,289 (12/2002)
and $111,684 (6/2002) 95,599 109,306
Federal Home Loan Bank of Atlanta stock, at cost 528,900 528,900
Accrued interest receivable 214,650 319,109
Ground rents owned, at cost 120,100 120,100
Property and equipment, net 73,346 92,141
Federal and state income taxes receivable 7,719 --
Deferred tax asset 216,740 216,740
Prepaid expenses and other assets 325,503 131,504
------------ ------------
Total Assets $ 70,090,178 $ 71,011,431
------------ ------------
Liabilities & Stockholders'Equity
---------------------------------
Liabilities:
Demand deposits $ 5,701,961 $ 5,649,688
Money market and NOW accounts 10,624,565 10,097,757
Time deposits 43,073,503 44,240,930
------------ ------------
Total deposits 59,400,029 59,988,375
Advance payments by borrowers for taxes,
insurance and ground rents 430,463 1,104,059
Accrued interest payable on savings deposits 7,059 9,650
Federal and state income taxes payable 4,066 14,643
Accrued expenses and other liabilities 649,000 532,045
------------ ------------
Total liabilities 60,490,617 61,648,772
Stockholders' Equity
- --------------------
Common stock, par value $.0l per share; authorized
2,000,000 shares; issued 1,011,713 shares 10,117 10,117
Additional paid-in capital 4,264,703 4,264,703
Contra equity - Employee Stock Ownership Plan (ESOP) (366,126) (366,126)
Retained earnings, substantially restricted 7,439,807 7,202,905
Treasury Stock; 189,223 shares at cost at
December 31, 2002 and June 30, 2002 (1,748,940) (1,748,940)
------------ ------------
Total stockholders' equity 9,599,561 9,362,659
------------ ------------
Total liabilities and stockholders' equity $ 70,090,178 $ 71,011,431
------------ ------------
See accompanying notes to financial statements
2
Wyman Park Bancorporation, Inc. and Subsidiaries
Lutherville, Maryland
Consolidated Statements of Operation
(Unaudited)
For the Six Months For the Three Months
Ended December 31, Ended December 31,
2002 2001 2002 2001
---- ---- ---- ----
Interest and fees on loans receivable $2,033,718 $2,333,405 $ 993,377 $1,151,429
Interest on mortgage-backed securities 2,291 4,336 1,108 2,122
Interest on investment securities 25,434 - 14,797 -
Interest on other investments 76,441 81,324 41,178 38,435
---------- ---------- ---------- ----------
Total interest income $2,137,884 $2,419,065 $1,050,460 $1,191,986
---------- ---------- ---------- ----------
Interest on savings deposits $1,040,007 $1,384,420 $ 497,693 $ 662,810
Interest on escrow deposits 521 648 200 260
---------- ---------- ---------- ----------
Total interest expense $1,040,528 $1,385,068 $ 497,893 $ 663,070
Net interest income before provision
for loan losses 1,097,356 1,033,997 552,567 528,916
Provision for loan losses - 165 - 165
---------- ---------- ---------- ----------
Net interest income $1,097,356 $1,033,832 $ 552,567 $ 528,751
---------- ---------- ---------- ----------
Other Income
- ------------
Loan fees and service charges $ 35,797 $ 54,674 $ 14,220 $ 25,346
Gain on sales of loans receivable 3,850 24,098 2,200 19,323
Other 40,247 21,275 32,036 12,159
---------- ---------- ---------- ----------
Total other income $ 79,894 $ 100,047 $ 48,456 $ 56,828
---------- ---------- ---------- ----------
Noninterest Expenses
- --------------------
Salaries and employee benefits $ 493,442 $ 483,004 $ 225,538 $ 229,829
Occupancy costs 45,397 51,185 22,023 24,566
Professional services 36,546 33,036 22,302 20,307
Federal deposit insurance premiums 5,131 5,501 2,570 2,794
Furniture and fixtures depreciation and
maintenance 31,756 20,499 17,085 9,508
Data processing 41,915 40,907 20,620 20,263
Advertising 11,967 15,319 8,078 8,540
Franchise and other taxes 17,599 19,172 7,935 6,683
Other 99,228 109,491 52,430 58,396
---------- ---------- ---------- ----------
Total noninterest expenses $ 782,981 $ 778,114 $ 378,581 $ 380,886
Income before tax provision 394,269 355,765 222,442 204,693
Provision for income taxes 157,367 140,016 90,367 82,316
---------- ---------- ---------- ----------
Net Income $ 236,902 $ 215,749 $ 132,075 $ 122,377
---------- ---------- ---------- ----------
Basic net income per share $ 0.32 $ 0.30 $ 0.18 $ 0.17
Diluted net income per share $ 0.28 $ 0.28 $ 0.15 $ 0.16
See accompanying notes to financial statements.
3
Wyman Park Bancorporation, Inc.
and Subsidiaries
Lutherville, Maryland
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended December 31,
-----------------------------
2002 2001
---- ----
Cash Flows from operating activities
Net income $ 236,902 $ 215,749
Adjustments to reconcile net income to net
Cash provided by operating activities:
Depreciation and amortization 19,287 19,572
Non-cash compensation under stock based benefit plan - (3,022)
Amortization of loan fees (82,747) (32,301)
Provision for loan loss - 165
Gain on sales of loans receivable (3,850) (24,098)
Loans originated for sale (385,000) (1,310,350)
Proceeds from loans originated for sale 388,850 1,334,448
Decease in accrued interest receivable 104,459 55,571
Increase in prepaid expenses and other assets (193,999) (18,082)
Increase in accrued expenses and other liabilities 116,955 118,835
Increase in federal and sate income taxes receivable (7,719) (5,854)
Decrease in federal and state income taxes payable (10,577) (17,562)
Decrease in accrued interest payable on
savings deposits (2,591) (3,867)
------------ ------------
Net cash provided by operating activities 179,970 329,104
Cash flows from investing activities
- ------------------------------------
Increase in investments (4,025,434) (2,509,778)
Proceeds from sale of ground rents - 2,500
Net decrease in loans receivable 10,081,252 4,107,162
Purchase of loan participations (855,498) (1,652,351)
Mortgage-backed securities principal repayments 13,707 17,263
Purchases of property and equipment (492) (11,209)
Net cash provided by (used in) investing activities 5,213,535 (46,413)
Cash flows from financing activities
- ------------------------------------
Net decrease in savings deposits (588,346) (1,870,951)
Decrease in advance payments by borrowers
for taxes, insurance and ground rents (673,596) (688,019)
Repurchase of common stock - -
------------ ------------
Net cash used in financing activities (1,261,942) (2,558,970)
Net increase (decrease) in cash and cash equivalents $ 4,131,563 $ (2,276,279)
Cash and cash equivalents at beginning of period 8,420,849 4,432,017
------------ ------------
Cash and cash equivalents at end of period $ 12,552,412 $ 2,155,738
------------ ------------
Supplemental information
- ------------------------
Interest paid on savings deposits and borrowed funds $ 1,040,528 $ 1,385,069
Income taxes paid $ 137,860 $ 147,000
See accompanying notes to financial statements.
4
WYMAN PARK BANCORPORATION, INC. AND SUBSIDIARIES
LUTHERVILLE, MARYLAND
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1: Wyman Park Bancorporation, Inc.
Wyman Park Bancorporation, Inc. (the "Company") is the holding company of Wyman
Park Federal Savings & Loan Association ("Association"), which converted from
mutual to stock form ("Stock Conversion") and became the wholly owned subsidiary
of the Company on January 5, 1998. All references to the Company prior to
January 5, 1998, except where otherwise indicated are to the Association. The
Company's common stock began trading on the OTC Electronic Bulletin Board on
January 7, 1998 under the symbol "WPBC".
The Association is regulated by the Office of Thrift Supervision ("OTS"). The
primary business of the Association is to attract deposits from individual and
corporate customers and to originate residential and commercial mortgage loans
and consumer loans. The Association competes with other financial and mortgage
institutions in attracting and retaining deposits and originating loans. The
Association conducts operations through its main office located at 11 West
Ridgely Road, Lutherville, Maryland 21093 and one branch office located at 7963
Baltimore-Annapolis Boulevard, Glen Burnie, Maryland 21060.
Note 2: Basis of Presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with instructions for Form 10-QSB and therefore, do not include
all disclosures necessary for a complete presentation of the statements of
condition, statements of operations and statements of cash flows in conformity
with generally accepted accounting principles. However, all adjustments which,
in the opinion of management, are necessary for the fair presentation of the
interim financial statements have been included. Such adjustments were of a
normal recurring nature. The results of operations for the six months ended
December 31, 2002 are not necessarily indicative of the results that may be
expected for the entire year. Certain prior year amounts have been reclassified
to conform with the current year presentation.
Note 3: Cash and Cash Equivalents
For the purposes of the statement of cash flows, the Company considers all
highly liquid investments with maturities at date of purchase of three months or
less to be cash equivalents. Cash equivalents consist of cash, non-interest
bearing deposits, variable rate interest bearing deposits in other banks and
federal funds sold.
5
D
Note 4: Earnings Per Share
Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding for the appropriate period. Unearned
Employee Stock Ownership Plan (ESOP) shares are not included in outstanding
shares. Diluted earnings per share is computed by dividing net income by the
weighted average shares outstanding as adjusted for the dilutive effect of stock
options and unvested stock awards based on the "treasury stock" method.
Information relating to the calculations of net income per share of common stock
is summarized for the three months and six months ended December 31, 2002 and
2001 as follows:
Three Months Ended Six Months Ended
December 31, December 31,
2002 2001 2002 2001
---------------------- ----------------------
Net income $132,075 $122,377 $236,902 $215,749
Weighted average shares
Outstanding basic EPS 750,081 724,731 748,209 722,767
Dilutive items
Stock options 102,437 49,328 101,586 44,450
Unvested stock awards 4,007 2,604 3,931 1,898
Adjusted weighted average shares
Outstanding used for diluted EPS 856,525 776,663 853,726 769,115
Note 5: Regulatory Capital Requirements
Under OTS regulations, the Association must maintain capital at least equal to
specified percentage of its assets. The Association's assets and capital for
these purposes are subject to OTS regulatory definition, and the percentage
levels vary depending on the capital levels being measured. The following table
presents the Association's capital position based on the December 31, 2002
financial statements.
To Be Well
Capitalized Under
For Capital Prompt Corrective
Actual Adequacy Purposes Action Provisions
------------------------ ----------------- -----------------
Amount Ratio Amount Ratio Amount Ratio
------ ----- ------ ----- ------ -----
Total Capital (to
Risk Weighted
Assets) $9,272,477 25.0% $2,963,621 8.0% $3,704,526 10.0%
Tier I capital (to
Risk Weighted
Assets) 8,988,849 24.3% 1,481,810 4.0% 2,222,716 6.0%
Tier 1 Capital (to
Average Assets) 8,988,849 12.9% 2,796,596 4.0% 3,495,746 5.0%
6
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Forward-Looking Statements
When used in this filing and in future filings by the Company with the
Securities and Exchange Commission, in the Company's press releases or other
public or shareholder communications, or in oral statements made with the
approval of an authorized executive officer, the words or phrases "would be,"
"will allow," "intends to," "will likely result," "are expected to," "will
continue," "is anticipated," "estimate," "project" or similar expressions are
intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements are subject to
risks and uncertainties, including but not limited to changes in economic
conditions in the Company's market area, changes in policies by regulatory
agencies, fluctuations in interest rates, demand for loans in the Company's
market area and competition, all or some of which could cause actual results to
differ materially from historical earnings and those presently anticipated or
projected.
The Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made, and advises
readers that various factors, including regional and national economic
conditions, substantial changes in levels of market interest rates, credit and
other risks of lending and investment activities and competitive and regulatory
factors, could affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from those
anticipated or projected.
The Company does not undertake, and specifically disclaims any obligations, to
update any forward-looking statements to reflect occurrences or unanticipated
events or circumstances after the date of such statements.
Merger Agreement With Bradford Bank
On July 9, 2002, the Company entered into a Merger Agreement with Bradford Bank,
whereby Bradford Bank will purchase all the outstanding shares of the Company
for $14.55 per share in cash. Bradford Bank will also pay $14.55, less the
respective exercise price, for each outstanding stock option. The merger price
is subject to reduction to the extent that the cost of the Company's termination
of its defined benefit pension plan, as part of the merger, exceeds $100,000.
The Company's stockholders approved the merger at the Annual Stockholders'
Meeting on October 16, 2002. The Office of Thrift Supervision (OTS) approved the
merger on December 19, 2002. The merger is expected to occur in February 2003.
7
Comparison of Financial Condition at December 31, 2002 and June 30, 2002
The Company's assets decreased $900,000 or 1.3% to $70.1 million at December 31,
2002 from $71.0 million at June 30, 2002. Cash and cash equivalents increased
$4.2 million or 50.0% to $12.6 million at December 31, 2002 from $8.4 million at
June 30, 2002, primarily as a result of a decrease in loan originations.
Investments increased $4.0 million at December 31, 2002 from $0 at June 30,
2002, as cash from loan payments and loan payoffs were instead invested in a
cash management fund. Net loans receivable decreased $9.2 million or 15.1% to
$51.9 million at December 31, 2002 from $61.1 million at June 30, 2002 as a
result of normal amortization and payoffs. Savings deposits decreased $588,000
or 1.0% to $59.4 million at December 31, 2002 from $60.0 million at June 30,
2002. The Company believes the deposit decline is the result of customer
reaction to reduced deposit rates, as the Company seeks to manage its net
interest margin. Advance payments by borrowers for taxes, insurance and ground
rents decreased $670,000 or 60.9% to $430,000 at December 31, 2002 from $1.1
million at June 30, 2002 as the result of the payment of escrowed real estate
taxes. The Company's stockholders' equity increased $237,000 or 2.5% to $9.6
million at December 31, 2002 from $9.4 million at June 30, 2002 as a result of
net income of $237,000 for the six months ended December 31, 2002.
Comparison of Operating Results for the Quarter and Six Months Ended December
31, 2002 and December 31, 2001
Net Income
- ----------
The Company reported net income of $132,000 for the quarter ended December 31,
2002 compared to $122,000 for the quarter ended December 31, 2001. The $10,000
increase in net income was primarily due to an increase in net interest income
of $24,000, offset by a decrease in non-interest income of $8,000 and an
increase in provision for income taxes of $8,000.
The Company's net income for the six months ended December 31, 2002 was $237,000
compared to $216,000 for the six months ended December 31, 2001. The $21,000
increase in net income was primarily due to an increase in net interest income
of $63,000, offset by a decrease in non-interest income of $20,000 and an
increase in provision for income taxes of $17,000.
Interest Income
- ---------------
Total interest income decreased by $142,000 or 11.9% to $1,050,000 for the
quarter ended December 31, 2002 from $1,192,000 for the quarter ended December
31, 2001. The decrease in total interest income for the comparable three months
periods was due primarily to a decrease of 84 basis points in the average yield
on interest-earning assets to 6.18% from 7.02%, as a result of declining
interest rates.
8
Total interest income decreased by $281,000 or 11.6% to $2,138,000 for the six
months ended December 31, 2002 from $2,419,000 for the six months ended December
31, 2001. The decrease in total interest income for the comparable six months
periods was due primarily to a decrease of 84 basis points in the average yield
on interest-earning assets to 6.28% from 7.12%, as a result of declining
interest rates.
Interest Expense
- ----------------
Total interest expense decreased by $165,000 or 24.9% to $498,000 for the
quarter ended December 31, 2002 from $663,000 for the quarter ended December 31,
2001. The decrease in total interest expense for the comparable three months
periods was due primarily to a decrease of 118 basis points in the average yield
on interest-bearing liabilities to 3.36% from 4.54%, partially offset by an
increase of $900,000 in the average balance of interest-bearing liabilities to
$59.3 million from $58.4 million.
The increase in the average balance of interest-bearing liabilities was due to
an increase of $900,000 in the average balance of savings deposits for the three
months comparable periods.
Total interest expense decreased by $344,000 or 24.8% to $1,041,000 for the six
months ended December 31, 2002 from $1,385,000 for the six months ended December
31, 2001. The decrease in total interest expense for the comparable six months
periods was due primarily to a decrease of 123 basis points in the average yield
on interest-bearing liabilities to 3.50% from 4.73%, partially offset by an
increase of $900,000 in the average balance of interest-bearing liabilities to
$59.4 million from $58.5 million.
The increase in the average balance of interest-bearing liabilities was due to a
an increase of $900,000 in the average balance of savings deposits for the six
months comparable periods.
Net Interest Income
- -------------------
The Company's net interest income increased $24,000 or 4.5% to $553,000 for the
quarter ended December 31, 2002 from $529,000 for the quarter ended December 31,
2001. This was the result of the decline in interest expense in a greater amount
than the decline in interest income. This is reflected in the Company's net
interest margin, which increased 13 basis points to 3.25% from 3.12%.
The Company's net interest income increased $63,000 or 6.1% to $1,097,000 for
the six months ended December 31, 2002 from $1,034,000 for the six months ended
December 31, 2001. The increase in net interest income was primarily due to a
decline in interest expense in a greater amount than the decline in interest
income. This is reflected in the Company's net interest margin, which increased
18 basis points to 3.22% from 3.04% for the comparable six month periods.
9
Provision For Loan Losses
- -------------------------
Management monitors its allowance for loan losses and makes additions to the
allowance, through the provision for loan losses, as economic conditions and
other factors dictate. Among the other factors considered by management are loan
volume, type of collateral and prior loan loss experience. During the three
months and six months ended December 31, 2002, the Company recorded no provision
for loan losses. The Company's nonperforming loans as a percentage of loans
receivable was 0.08% and 0.10% at December 31, 2002, and June 30, 2002,
respectively, all consisting of single-family residential mortgage loans.
Noninterest Income
- ------------------
Total noninterest income decreased by $9,000 or 15.8% to $48,000 for the quarter
ended December 31, 2002 from $57,000 for the quarter ended December 31, 2001.
The decrease in noninterest income was due primarily to a decrease of $11,000 in
service fees on checking accounts to $14,000 for the quarter ended December 31,
2002 from $25,000 for the quarter ended December 31, 2001 and a decrease of
$17,000 in gain on sales of loans receivable to $2,000 for the quarter ended
December 31, 2002 from $19,000 for the quarter ended December 31, 2001,
partially offset by an increase of $20,000 in other income to $32,000 for the
quarter ended December 31, 2002 from $12,000 for the quarter ended December 31,
2001 due to sales of annuities and miscellaneous fees.
Total noninterest income decreased by $20,000 or 20.0% to $80,000 for the six
months ended December 31,2002 from $100,000 for the six months ended December
31, 2001. The decrease in noninterest income was due primarily to a decrease of
$19,000 in service fees on checking accounts to $36,000 for the six months ended
December 31, 2002 from $55,000 for the six months ended December 31, 2001 and a
decrease of $20,000 in gain on sales of loans receivable to $4,000 for the six
months ended December 31, 2002 from $24,000 for the six months ended December
31, 2001, partially offset by an increase of $19,000 in other income to $40,000
for the six months ended December 31, 2002, from $21,000 for the six months
ended December 31, 2001, due to sales of annuities and miscellaneous fees. The
decrease in gain on sales of loans receivable during both the three month and
six month periods was due to the corresponding decline in loan originations, as
the Company's lending activity has been concentrated primarily in the
refinancing area.
Noninterest Expenses
- --------------------
Total noninterest expenses decreased by $2,000 or 0.5% to $379,000 for the
quarter ended December 31, 2002 from $381,000 for the quarter ended December 31,
2001. The decrease in noninterest expenses was primarily due to a decrease in
salaries and employee benefits of $4,000 to $226,000 for the quarter ended
December 31, 2002 from $230,000 for the quarter ended December 31, 2001, as a
result of a decline in staff and a decrease in other noninterest expenses of
$6,000 to $52,000 for the quarter ended December 31, 2002 from $58,000 for the
quarter ended December 31, 2001, partially offset by an increase in furniture
10
and fixtures depreciation and maintenance of $7,000 to $17,000 for the quarter
ended December 31, 2002 from $10,000 for the quarter ended December 31, 2001,
due to depreciation on a new ATM and computer hardware.
Total noninterest expenses increased by $5,000 or 0.6% to $783,000 for the six
months ended December 31, 2002 from $778,000 for the six months ended December
31, 2001. The increase in noninterest expenses was primarily due to an increase
in salaries and employee benefits of $10,000 to $493,000 for the six months
ended December 31, 2002 from $483,000 for the six months ended December 31,
2001, due to staff additions and an increase in furniture and fixtures
depreciation and maintenance of $11,000 to $32,000 for the six months ended
December 31, 2002 from $21,000 for the six months ended December 31, 2001, due
to depreciation on a new ATM and computer hardware, partially offset by a
decline in occupancy costs of $6,000 to $45,000 for the six months ended
December 31, 2002 from $51,000 for the six months ended December 31, 2001, as a
result of fully depreciated office building components and a decline in other
noninterest expenses of $10,000 to $99,000 for the six months ended December 31,
2002 from $109,000 for the six months ended December 31, 2001.
Liquidity and Capital Resources
- -------------------------------
Liquidity management for the Company is both an ongoing and long-term function
of the Company's asset/liability management strategy. Excess funds, when
applicable, generally are invested in overnight deposits at a correspondent bank
and at the Federal Home Loan Bank (FHLB) of Atlanta and in a short term liquid
cash management fund. Currently when the Company requires funds, beyond its
ability to generate deposits, additional sources of funds are available, as
advances or borrowings, through the FHLB of Atlanta. The Company has the ability
to pledge its FHLB of Atlanta stock or certain other assets as collateral for up
to $14.0 million in advances. The Company's most liquid assets are cash and cash
equivalents, which include short-term investments, as well as an investment in a
short-term, liquid cash management fund. The levels of these assets are
dependent on the Company's operating, financing and investing activities during
any given period. At December 31, 2002, the Company's cash on hand, interest
bearing deposits, Federal funds sold and short-term investments totaled $12.6
million. Management and the Board of Directors believe that the Company's
liquidity is adequate, including its ability to secure advances from the FHLB of
Atlanta, to satisfy its loan commitments of approximately $318,000 as of
December 31, 2002.
The Company's principal sources of funds are deposits, loan repayments and other
funds provided by operations. Certificates of deposit which are scheduled to
mature in less than one year at December 31, 2002 totaled $22.1 million.
Historically, a high percentage of maturing deposits have remained with the
Company. While scheduled loan repayments are relatively predictable, deposit
flows and early loan prepayments are more influenced by interest rates, general
economic conditions, and competition. The Association maintains investments in
liquid assets based upon management's assessment of (1) need for funds, (2)
expected deposit flows, (3) yields available on short-term liquid assets and (4)
objectives of the asset/liability management program.
11
The Company's primary source of cash in investing activities during the six
months ended December 31, 2002 was a net decrease of $10.1 million in loans
receivable, offset by a $4.0 million increase in investments.
The Company's primary uses of cash in financing activities during the six months
ended December 31, 2002 consisted of a net decrease of $600,000 in savings
deposits and a net decrease of $700,000 in advance payments by borrowers for
taxes, insurance and ground rents.
Item 3: Controls and Procedures
A review and evaluation was performed by the Company's management, including the
Company's Chief Executive Officer (the "CEO") and Chief Financial Officer (the
"CFO"), of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as of a date within 90 days prior to the
filing of this quarterly report. Based on that review and evaluation, the CEO
and CFO have concluded that the Company's current disclosure controls and
procedures, as designed and implemented, were effective. There have been no
significant changes in the Company's internal controls subsequent to the date of
their evaluation. There were no significant material weaknesses identified in
the course of such review and evaluation and, therefore, no corrective measures
were taken by the Company.
12
Part II. Other Information
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security-Holders
(a) On October 16, 2002, Wyman Park Bancorporation, Inc. (the
"Company") held its Annual Meeting of Stockholders.
(b) Not Applicable
(c) Stockholders voted on the following matters:
(i) The election of the following three directors of the
Company;
Votes: For Withheld
------ --- --------
G. Scott Barhight 722,662 32,426
Ernest A. Moretti 750,563 4,525
John K. White 723,022 32,066
As a result, G. Scott Barhight, Ernest A. Moretti and John K. White
were elected directors for terms to expire in 2005. There were no
abstentions or broker non votes.
(ii) The adoption of the Agreement and Plan of Merger;
Votes: % of Outstanding Shares
------ -----------------------
For 679,906 82.7%
Against 575 .1%
Abstain 100 -
Broker Non-Votes 74,507 9.1%
As a result, the adoption of the Agreement and Plan of Merger was
approved.
13
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K
(a)Exhibits None
(b) On October 16, 2002, the Company filed a Current Report on Form
8-K to report the approval by its stockholders of the Merger Agreement
with Bradford Bank.
14
Signatures
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
WYMAN PARK BANCORPORATION, INC.
Registrant
Date: February 5, 2003 /s/ Ernest A. Moretti
--------------------------------------------
Ernest A. Moretti
President and Chief Executive Officer
(Principal Executive Officer)
Date: February 5, 2003 /s/ Ronald W. Robinson
--------------------------------------------
Ronald W. Robinson
Treasurer
(Principal Financial and Accounting Officer)
15
CERTIFICATION
I, Ernest A. Moretti, certify that:
(1) I have reviewed this quarterly report on Form 10-QSB of Wyman Park
Bancorporation, Inc.,
(2) Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
(3) Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly
report;
(4) The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
(5) The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's
internal controls; and
(6) The registrant's other certifying officers and I have indicated in
this quarterly report whether there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
February 5, 2003 /s/ Ernest A. Moretti
-----------------------
Ernest A. Moretti
Chief Executive Officer
16
CERTIFICATION
I, Ronald W. Robinson, certify that:
(1) I have reviewed this quarterly report on Form 10-QSB of Wyman Park
Bancorporation, Inc.;
(2) Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
quarterly report;
(3) Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly
report;
(4) The registrant's other certifying officers and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
(c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
(5) The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant role in the registrant's
internal controls; and
(6) The registrant's other certifying officers and I have indicated in
this annual report whether there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
February 5, 2003 /s/ Ronald W. Robinson
-----------------------
Ronald W. Robinson
Chief Financial Officer
17
CERTIFICATION OF QUARTERLY REPORT
In connection with the accompanying Quarterly Report of Wyman Park
Bancorporation, Inc. (the "Company") on Form 10-QSB for the quarter ended
December 31, 2002 (the "Report"), I, Ernest A. Moretti, Chief Executive Officer
of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ Ernest A. Moretti
---------------------------
Ernest A. Moretti
Chief Executive Officer
Date: February 5, 2003
CERTIFICATION OF QUARTERLY REPORT
In connection with the accompanying Quarterly Report of Wyman Park
Bancorporation, Inc. (the "Company") on Form 10-QSB for the quarter ended
December 31, 2002 (the "Report"), I, Ronald W. Robinson, Chief Financial Officer
of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the Company.
/s/ Ronald W. Robinson
---------------------------
Ronald W. Robinson
Chief Financial Officer
Date: February 5, 2003