SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _________ to ________
Commission File Number: 000-21553
METROPOLITAN BANK AND TRUST
COMPANY 401(k) PLAN
(Full title of the Plan)
METROPOLITAN FINANCIAL CORP.
22901 Millcreek Boulevard
Highland Hills, OH 44122
(216) 206-6000
(Name of issuer of the securities held pursuant to the
plan and address of its principal office)
REQUIRED INFORMATION
Financial Statements. The following financial statements and schedules are filed
as part of this annual report and appear immediately after the signature page
hereof:
1. Independent Auditors' Report
2. Statement of Net Assets Available for Benefits
3. Statement of Changes in Net Assets Available for Benefits
4. Notes to Financial Statements
5. Schedule of Assets Held for Investment Purposes at the End of
the Year
6. Schedule of Reportable Transactions
Exhibits. The following exhibit is filed as part of this annual report:
Exhibit 23 - Consent of Crowe, Chizek and Company LLP
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
administrator of the employee benefit plan has duly caused this annual report to
be signed on its behalf by the undersigned hereunto duly authorized.
METROPOLITAN BANK AND TRUST
COMPANY 401(k) PLAN
By: METROPOLITAN BANK AND
TRUST COMPANY
By: /S/ KENNETH T. KOEHLER
----------------------------------------
Kenneth T. Koehler,
President & Chief Operating Officer
(on behalf of the Registrant)
By: /S/ TIMOTHY W. ESSON
---------------------------------------
Timothy W. Esson,
Vice President-Finance for the Bank
(as Principal Accounting Officer)
Date: June 28, 2002
METROPOLITAN BANK AND TRUST
401(k) PLAN
FINANCIAL STATEMENTS
December 31, 2001 and 2000
METROPOLITAN BANK AND TRUST
401(k) PLAN
Highland Hills, Ohio
FINANCIAL STATEMENTS
December 31, 2001 and 2000
CONTENTS
REPORT OF INDEPENDENT AUDITORS .................................... 1
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS .............. 2
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS .... 3
NOTES TO FINANCIAL STATEMENTS ................................ 4
SUPPLEMENTAL SCHEDULE
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR) 9
REPORT OF INDEPENDENT AUDITORS
Plan Administrator
Metropolitan Bank and Trust 401(k) Plan
Highland Hills, Ohio
We have audited the accompanying statements of net assets available for benefits
of the Metropolitan Bank and Trust 401(k) Plan as of December 31, 2001 and 2000,
and the related statement of changes in net assets available for benefits for
the year ended December 31, 2001. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2001 and 2000, and the changes in net assets available for benefits
for the year ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) is presented for the purpose of additional analysis and is not a
required part of the basic financial statements, but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedule has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
Crowe, Chizek and Company LLP
Cleveland, Ohio
April 5, 2002
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1.
METROPOLITAN BANK AND TRUST 401(k) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2001 and 2000
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2001 2000
---------- ----------
ASSETS
Investments
Common stock $ 180,673 $ 115,741
Short-term investments 18,069 584,817
Shares of registered investment companies 3,688,695 3,414,548
Loans to Plan participants 86,767 170,329
---------- ----------
3,974,204 4,285,435
Receivables
Employer contribution 77,203 58,219
Participant contributions 31,936 24,737
Loan payments 1,375 2,207
---------- ----------
Total assets 4,084,718 4,370,598
---------- ----------
LIABILITIES
Accounts payable 56 4,603
---------- ----------
Total liabilities 56 4,603
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $4,084,662 $4,365,995
========== ==========
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See accompanying notes to financial statements.
2.
METROPOLITAN BANK AND TRUST 401(k) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2001
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ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income (loss)
Net depreciation in fair value of investments $ (586,200)
Interest and dividends 50,215
-----------
(535,985)
Contributions
Employer 271,837
Participant 846,837
Rollovers 144,124
-----------
1,262,798
-----------
Total additions 726,813
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Fees and expenses 25,822
Benefits paid to participants 982,324
-----------
Total deductions 1,008,146
-----------
NET DECREASE (281,333)
Net assets available for benefits
Beginning of year 4,365,995
-----------
End of year $ 4,084,662
===========
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See accompanying notes to financial statements.
3.
METROPOLITAN BANK AND TRUST
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
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NOTE 1 - DESCRIPTION OF PLAN
The following description of the Metropolitan Bank and Trust 401(k) Plan (the
Plan) provides only general information. Participants should refer to the Plan
agreement or Summary Plan Description for a more complete description of the
Plan's provisions.
GENERAL: The Plan is a defined contribution plan covering all eligible employees
of Metropolitan Bank and Trust Company (the Bank). The Plan is subject to the
provisions of the Employee Retirement Income Security Act (ERISA). Employees who
have completed 30 days of service and are at least 21 years old are entitled to
defer a portion of their salary to the plan.
CONTRIBUTIONS: Participants may make salary deferral contributions at their
discretion of up to 20% of annual compensation. Matching contributions are made
by the employer on behalf of participants with at least one year of service who
made elective compensation deferrals, at the rate of 50% of the first 6% of the
participant's compensation deferred under the plan. In addition to the employer
matching contribution as described above, the Board of Directors of the Bank can
provide for an additional contribution on a discretionary basis. The additional
contribution is allocated based on annual compensation. To be eligible to
receive the additional contribution, an employee must work 1,000 hours and be
employed on the last day of the plan year.
PARTICIPANT ACCOUNTS: Each participant's account is credited with the
participant's contributions, the Bank's matching contribution and an allocation
of the amount of a) the Bank's discretionary contribution b) plan earnings, and
c) forfeitures of terminated participants' nonvested accounts. Forfeitures are
allocated based on the ratio of a particular employee's compensation to the
total compensation of all employees participating in the plan. Plan earnings are
allocated based on account balances, as defined in the Plan. The benefit to
which a participant is entitled is the benefit that can be provided from the
participant's vested account. Each participant directs the investment of their
account to any of the investment options available under the Plan.
VESTING: Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the remainder of their account plus earnings
thereon is based on years of continuous service. Participants vest 20% per year
of credited service and are 100% vested after five years of credited service.
PAYMENT OF BENEFITS: On termination of service due to death, disability or
retirement, a participant may elect to receive an amount equal to the value of
the participant's vested interest in his or her account in a lump-sum amount.
For termination of service due to other reasons, a participant may transfer the
value of the vested interest in his or her account to the trustee or custodian
of another qualified retirement plan or receive a lump-sum distribution.
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(Continued)
4.
METROPOLITAN BANK AND TRUST
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
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NOTE 1 - DESCRIPTION OF PLAN (Continued)
LOAN PROVISIONS: Participants may borrow from their fund accounts up to a
maximum of $50,000 or 50 percent of their vested account balance, whichever is
less. The loans are secured by the balance in the participant's account and bear
interest at rates that range from 7.25 percent to 10.50 percent, which are
commensurate with local prevailing rates as determined quarterly by the Plan
administrator.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING METHOD: The Plan's financial statements are prepared on the accrual
basis of accounting in conformity with accounting principles generally accepted
in the United States of America.
INVESTMENT VALUATION: The Plan's investments are stated at fair value. Quoted
market prices are used to value investments. Shares of registered investment
companies are valued at the net asset value of shares held by the Plan at
year-end. Loans to Plan participants are stated at cost which approximates fair
value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
ESTIMATES: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires the plan
administrator to make estimates and assumptions that affect certain reported
amounts and disclosures, and actual results may differ from these estimates.
PAYMENT OF BENEFITS: Benefits are recorded when paid.
NOTE 3 - RIGHTS UPON PLAN TERMINATION
Although it has not expressed any intent to do so, the Bank has the right under
the Plan to discontinue its contributions at any time and to terminate the Plan
subject to the provisions of ERISA. In the event of Plan termination,
participants would become 100 percent vested in their employer contributions.
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(Continued)
5.
METROPOLITAN BANK AND TRUST
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
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NOTE 4 - INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's net assets.
December 31,
2001
----
SHARES FAIR VALUE
------ ----------
Shares of registered investment companies
Van Kampen Growth and Income fund 22,297 $ 379,264
Van Kampen Equity Income fund 29,805 222,345
Strong Opportunity fund 6,431 252,680
Royce Low Priced Stock fund 18,385 214,551
Oppenheimer Capital Appreciation fund 7,944 322,220
Dreyfus S&P 500 Index fund 7,871 263,040
Charles Schwab Stable Value fund 85,450 1,158,102
December 31,
2000
----
SHARES FAIR VALUE
------ ----------
Shares of registered investment companies
AIM Aggressive Growth fund 25,248 $ 322,411
AIM Value Fund 41,398 517,892
AIM Balanced fund 12,078 363,425
MFS Massachusetts Growth #13 fund 102,173 1,751,253
Templeton Foreign A fund 23,946 247,598
Short-term investments
Metropolitan passbook savings account 517,162
During 2001, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) depreciated in value by
$586,200 as follows:
Shares of registered investment companies $(571,958)
Common stock (14,242)
---------
$(586,200)
=========
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(Continued)
6.
METROPOLITAN BANK AND TRUST
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
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NOTE 5 - TAX STATUS
The Internal Revenue Service has determined and informed the Bank by a letter
dated November 29, 1993, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code (IRC). Although
the Plan has been amended since receiving the determination letter, the plan
administrator believes that the Plan is designed and is currently being operated
in compliance with the applicable requirements of the IRC.
NOTE 6 - PARTY-IN-INTEREST TRANSACTIONS
Parties-in-interest are defined under Department of Labor Regulations as any
fiduciary of the Plan, any party rendering service to the Plan, the employer and
certain others. Professional fees for the administration and audit of the Plan
were paid by the Bank.
The Plan held the following party-in-interest investments (at fair value):
December 31,
2001 2000
---------- ----------
Metropolitan Financial Corp. common stock,
59,237 and 48,733 shares, respectively $ 180,673 $ 115,741
Metropolitan passbook savings account 0 517,162
Charles Schwab Stable Value fund, 85,450 shares 1,158,102 0
Schwab Retirement Money fund, 831 shares 831 0
NOTE 7 - CHANGE IN TRUSTEE AND THIRD PARTY ADMINISTRATOR
On September 25, 2001, the Board of Directors of the Bank resolved to change the
trustee of the Plan from Metropolitan Bank & Trust to The Charles Schwab Trust
Company. In addition, the third party administrator for the Plan was changed
from Invesco to Invesmart, Inc.
NOTE 8 - TERMINATED PARTICIPANTS
Included in net assets available for benefits are amounts allocated to
individuals who have elected to withdraw from the Plan, but who have not yet
been paid. Plan assets allocated to these participants were $20,387 and $0 at
December 31, 2001 and 2000, respectively.
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(Continued)
7.
METROPOLITAN BANK AND TRUST
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001 and 2000
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NOTE 9 - EXPLANATION OF DIFFERENCE BETWEEN FINANCIAL STATEMENTS AND
AMOUNTS REPORTED ON FORM 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the 5500 as of December 31, 2001:
Net asset available for benefits
per the financial statements $ 4,084,622
Amounts allocated to withdrawing
participants (17,032)
-----------
Net assets available for benefits per
Form 5500, Schedule H, Part I, line l $ 4,067,630
===========
The following is a reconciliation of benefits paid to participants per the
financial statements for the year ended December 31, 2001, to Form 5500:
Benefits paid to participants per
the financial statements $982,324
Add: Amounts allocated to withdrawing
participants at December 31, 2001 17,032
--------
Benefits paid to participants per Form 5500 $999,356
========
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31, 2001, but not yet paid as of that date.
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(Continued)
8.
SUPPLEMENTAL SCHEDULE
METROPOLITAN BANK AND TRUST
401(k) PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2001
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Attachment to Form 5500, Schedule H, Part IV, Line 4i
Name of plan sponsor: METROPOLITAN BANK AND TRUST COMPANY
-----------------------------------
Employer identification number: 34-0847574
-----------------------------------
Three-digit plan number: 002
-----------------------------------
(c)
DESCRIPTION OF INVESTMENT
(b) INCLUDING MATURITY DATE (e)
IDENTITY OF ISSUE, BORROWER, RATE OF INTEREST, COLLATERAL, (d) CURRENT
(a) LESSOR, OR SIMILAR PARTY PAR OR MATURITY VALUE COST VALUE
--- ------------------------ --------------------- ---- -----
SHARES OF REGISTERED INVESTMENT COMPANIES
Calvert Income fund 12,028 shares $ 200,746
Citizens Emerging Growth fund 2,770 shares 37,816
Columbia High Yield fund 1,721 shares 15,266
Dreyfus S&P 500 Index fund 7,871 shares 263,040
Gabelli Growth fund 2,066 shares 59,247
Oppenheimer Capital Appreciation fund 7,944 shares 322,220
Oppenheimer Global fund 3,500 shares 163,538
PBHG Strategic Small Corp. 11,765 shares 161,411
Pilgrim International Value fund 3,907 shares 50,238
Royce Low Priced Stock fund 18,385 shares 214,551
Strong Corporate Bond fund 10,991 shares 115,403
Strong Opportunity fund 6,431 shares 252,680
Van Kampen Equity Income fund 29,805 shares 222,345
Van Kampen Growth and Income fund 22,297 shares 379,264
White Oak Growth Stock fund 1,895 shares 72,828
* Charles Schwab Stable Value fund 85,450 shares 1,158,102
---------------
3,688,695
COMMON STOCK
* Metropolitan Financial Corp. Common stock,
59,237 shares 180,673
---------------
SHORT-TERM INVESTMENTS
Cash 17,238
* Schwab Retirement Money fund 831 shares 831
---------------
18,069
PARTICIPANT LOANS Highest interest rate -
10.50%
Lowest interest rate -
7.25% 86,767
---------------
$ 3,974,204
===============
* Denotes party-in-interest
(d) All investments are participant directed, therefore, historical cost
information is not required.
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9.