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 September 30, 2001
________ 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 November 2, 2001, the issuer had 822,490 shares of Common Stock issued and
outstanding.
Transitional Small Business Disclosure Format (check one):
Yes___ No X
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CONTENTS
--------
PART I. FINANCIAL INFORMATION PAGE
--------------------- ----
Item I. Financial Statements
Consolidated Statements of Financial Condition at
September 30, 2001 and June 30, 2001............................... 2
Consolidated Statements of Operations for the Three Month
Periods ended September 30, 2001 and 2000.......................... 3
Consolidated Statements of Cash Flows for the Three Month
Periods Ended September 30, 2001 and 2000.......................... 4
Notes to Consolidated Financial Statements........................5-6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................7-11
PART II. OTHER INFORMATION
-----------------
Item 1. Legal Proceedings....................................................12
Item 2. Changes in Securities and Use of Proceeds............................12
Item 3. Defaults Upon Senior Securities......................................12
Item 4. Submission of Matters to a Vote of Security Holders..................12
Item 5. Other Information....................................................12
Item 6. Exhibits and Reports on Form 8-K.....................................12
SIGNATURES....................................................................13
1
Wyman Park Bancorporation, Inc. and Subsidiaries
Lutherville, Maryland
Consolidated Statements of Financial Condition
September, June 30,
2001 2001
----------- ---------
(Unaudited)
Assets
------
Cash and noninterest bearing deposits $ 475,825 $ 882,696
Interest bearing deposits in other banks 300,045 93,680
Federal funds sold 2,558,662 3,455,641
------------ ------------
Total cash and cash equivalents 3,334,532 4,432,017
Loans receivable, net 63,159,501 64,712,777
Mortgage-backed securities held to maturity
at amortized cost, fair value of $137,527 (9/2001)
and $146,691 (6/2001) 135,020 145,796
Federal Home Loan Bank of Atlanta stock, at cost 528,900 528,900
Accrued interest receivable 336,389 345,969
Ground rents owned, at cost 120,100 122,600
Property and equipment, net 73,084 83,069
Federal and state income taxes receivable -- 6,237
Deferred tax asset 217,646 217,646
Prepaid expenses and other assets 57,679 53,596
------------ ------------
Total Assets $ 67,962,851 $ 70,648,607
------------ ------------
Liabilities & Stockholders' Equity
----------------------------------
Liabilities:
Demand deposits $ 5,054,970 $ 5,246,632
Money market and NOW accounts 8,860,552 9,454,074
Time deposits 44,220,228 45,481,277
------------ ------------
Total deposits 58,135,750 60,181,983
Advance payments by borrowers for taxes,
insurance and ground rents 344,889 1,196,077
Accrued interest payable on savings deposits 12,305 12,544
Federal and state income taxes payable 34,919 20,455
Accrued expenses and other liabilities 660,888 556,820
------------ ------------
Total liabilities 59,188,751 61,967,879
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 4,149,733 4,149,733
Contra equity - Employee Stock Ownership Plan (ESOP) (451,008) (451,008)
Retained earnings, substantially restricted 6,814,198 6,720,826
Treasury Stock; 189,223 shares at
cost at September 30, 2001 and June 30, 2001 (1,748,940) (1,748,940)
------------ ------------
Total stockholders' equity 8,774,100 8,680,728
Total liabilities and stockholders' equity $ 67,962,851 $ 70,648,607
------------ ------------
See accompanying notes to financial statements.
2
Wyman Park Bancorporation, Inc. and Subsidiaries
Lutherville, Maryland
Consolidated Statements of Operation
(Unaudited)
For the Three Months
Ended September 30,
2001 2000
---- ----
Interest and fees on loans receivable $1,181,976 $1,218,279
Interest on mortgage-backed securities 2,214 3,305
Interest on other investments 42,889 51,874
---------- ----------
Total interest income $1,227,079 $1,273,458
---------- ----------
Interest on savings deposits $ 721,610 $ 685,751
Interest on borrowed money -- 59,412
Interest on escrow deposits 388 676
---------- ----------
Total interest expense $ 721,998 $ 745,839
Net interest income before provision
for loan losses 505,081 527,619
Provision for loan losses -- --
---------- ----------
Net interest income $ 505,081 $ 527,619
---------- ----------
Other Income
------------
Loan fees and service charges $ 29,328 $ 22,107
Gain on sales of loans receivable 4,775 --
Other 9,116 2,102
---------- ----------
Total other income $ 43,219 $ 24,209
---------- ----------
Noninterest Expenses
--------------------
Salaries and employee benefits $ 253,175 $ 232,674
Occupancy costs 26,619 26,483
Professional services 12,729 15,327
Federal deposit insurance premiums 2,707 2,847
Furniture and fixtures depreciation and
maintenance 10,991 11,719
Data processing 20,644 20,671
Advertising 6,779 22,051
Franchise and other taxes 12,489 11,466
Other 51,095 47,282
---------- ----------
Total noninterest expenses $ 397,228 $ 390,520
Income before tax provision 151,072 161,308
Provision for income taxes 57,700 62,000
---------- ----------
Net Income $ 93,372 $ 99,308
---------- ----------
Basic net income per share $ 0.13 $ 0.13
Diluted net income per share $ 0.12 $ 0.13
See accompanying notes to financial statements.
3
Wyman Park Bancorporation, Inc.
and Subsidiaries
Lutherville, Maryland
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended September 30,
2001 2000
---- ----
Cash Flows from operating activities
------------------------------------
Net income $ 93,372 $ 99,308
Adjustments to reconcile net income to net
Cash provided by operating activities:
Depreciation and amortization 9,985 10,343
Amortization of loan fees (8,602) (21,450)
Gain on sales of loans receivable (4,775) --
Loans originated for sale (392,500) --
Proceeds from loans originated for sale 397,275 --
(Increase) decease in accrued interest receivable 9,580 (13,835)
Increase in prepaid expenses and other assets (4,083) (28,134)
Increase in accrued expenses and other liabilities 104,068 53,709
Decrease in federal and state income taxes receivable 6,237 10,999
Increase in federal and state income taxes payable 14,464 33,000
Increase (decrease) in accrued interest payable
on savings deposits (239) 249
Increase in accrued interest payable on borrowings -- 7,321
----------- -----------
Net cash provided by operating activities 224,782 151,510
Cash flows from investing activities
------------------------------------
Proceeds from sale of ground rents 2,500 --
Net decrease in loans receivable 1,793,913 394,705
Purchase of loan participations (232,035) (141,375)
Mortgage-backed securities principal repayments 10,776 6,449
Purchases of property and equipment -- (379)
----------- -----------
Net cash provided by investing activities 1,575,154 259,400
Cash flows from financing activities
------------------------------------
Net increase (decrease) in savings deposits (2,046,233) 483,269
Net increase in checks outstanding in excess of
bank balance -- 84,549
Increase in borrowings -- 1,000,000
Decrease in advance payments by borrowers
for taxes, insurance and ground rents (851,188) (922,884)
Repurchase of common stock -- (139,133)
----------- -----------
Net cash provided by (used in) financing activities (2,897,421) 505,801
Net increase (decrease) in cash and cash equivalents $(1,097,485) $ 916,711
Cash and cash equivalents at beginning of period 4,432,017 2,085,906
----------- -----------
Cash and cash equivalents at end of period $ 3,334,532 $ 3,002,617
----------- -----------
Supplemental information
------------------------
Interest paid on savings deposits and borrowed funds $ 721,998 $ 745,839
Income taxes paid $ 37,000 $ 18,000
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 three months ended
September 30, 2001 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
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 ended September 30, 2001 and 2000 as follows:
Three Months Ended Three Months Ended
September 30, 2001 September 30, 2000
------------------ ------------------
Net income $ 93,372 $ 99,308
Weighted average shares
Outstanding basic EPS 720,804 757,936
Dilutive items
Stock options 40,739 27,942
Unvested stock awards 1,362 935
Adjusted weighted average shares
Outstanding used for diluted EPS 762,905 786,813
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 September 30, 2001
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) $ 8,434,166 21.2% $3,182,891 8.0% $3,978,614 10.0%
Tier I capital (to
Risk Weighted
Assets) 8,150,211 20.5% 1,591,445 4.0% 2,387,168 6.0%
Tier 1 Capital (to
Average Assets) 8,150,211 12.0% 2,718,732 4.0% 3,398,416 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.
7
COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 2001 AND JUNE 30, 2001
The Company's assets decreased $2.6 million or 3.7% to $68.0 million at
September 30, 2001 from $70.6 million at June 30, 2001. Cash and cash
equivalents decreased $1.1 million or 25.0% to $3.3 million at September 30,
2001 from $4.4 million at June 30, 2001, primarily as a result of a decrease in
savings deposits, and a decrease in advance payments by borrowers for taxes,
insurance and ground rents, partially offset by a decrease in loans receivable.
Savings deposits decreased $2.1 million or 3.5% to $58.1 million at September
30, 2001 from $60.2 million at June 30, 2001. 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 $900,000 or 75.0% to $300,000 at
September 30, 2001 from $1.2 million at June 30, 2001 as the result of the
payment of real estate taxes. Net loans receivable decreased $1.5 million or
2.3% to $63.2 million at September 30, 2001 from $64.7 million at June 30, 2001
as a result of normal amortization and payoffs. The Company's stockholders'
equity increased $93,000 or 1.1% to $8.8 million at September 30, 2001 from $8.7
million at June 30, 2001 as a result of net income of $93,000 for the three
months ended September 30, 2001.
COMPARISON OF OPERATING RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2001 AND
SEPTEMBER 30, 2000
Net Income
----------
The Company reported net income of $93,000 for the quarter ended September 30,
2001 compared to $99,000 for the quarter ended September 30, 2000. The $6,000
decrease in net income was primarily due to a decrease in net interest income of
$23,000, offset by an increase in noninterest income of $19,000.
Interest Income
---------------
Total interest income decreased by $46,000 or 3.6% to $1,227,000 for the quarter
ended September 30, 2001 from $1,273,000 for the quarter ended September 30,
2000. The decrease in total interest income for the comparable three months
periods was due primarily to a decrease of $600,000 in the average balance of
interest-earning assets to $67.5 million from $68.1 million, and a decrease of
21 basis points in the average yield on interest-earning assets to 7.27% from
7.48%.
The decrease in the average balance of interest-earning assets was due primarily
to a decrease in average loans receivable of $1.3 million as a result of payoffs
and regular loan amortization, partially offset by an increase in average
federal funds sold and other interest earning assets of $700,000.
8
Interest Expense
----------------
Total interest expense decreased by $24,000 or 3.2% to $722,000 for the quarter
ended September 30, 2001 from $746,000 for the quarter ended September 30, 2000.
The decrease in total interest expense for the comparable three months periods
was due primarily to a decrease of $200,000 in the average balance of
interest-bearing liabilities to $58.7 million from $58.9 million and a decrease
of 14 basis points in the average yield on interest-bearing liabilities to 4.92%
from 5.06%.
The decrease in the average balance of interest-bearing liabilities was due to a
decrease in average borrowings of $3.5 million for the three months comparable
periods, partially offset by an increase of $3.3 million in the average balance
of savings deposits for the three months comparable periods.
Net Interest Income
-------------------
The Company's net interest income decreased by $23,000 or 4.4% to $505,000 for
the quarter ended September 30, 2001 from $528,000 for the quarter ended
September 30, 2000. The decrease in net interest income was primarily due to a
decline in interest income in a greater amount than the decline in interest
expense. This is reflected in a decrease in the ratio of average
interest-earning assets to average interest-bearing liabilities to 114.9% from
115.6%, as the Company decreased its average loans receivable. This is also
reflected in the Company's net interest margin, which decreased 11 basis points
to 2.99% from 3.10%.
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 ended September 30, 2001 and September 30, 2000, the Company recorded no
provision for loan losses. The Company's nonperforming loans as a percentage of
loans receivable was 0.23% and 0.14% at September 30, 2001, and June 30, 2001,
respectively, all consisting of single-family residential mortgage loans.
Noninterest Income
------------------
Total noninterest income increased by $19,000 or 79.2% to $43,000 for the
quarter ended September 30, 2001 from $24,000 for the quarter ended September
30, 2000. The increase in noninterest income was due primarily to an increase of
$7,000 in service fees on checking accounts to $21,000 for the quarter ended
September 30, 2001 from $14,000 for the quarter
9
ended September 30, 2000, an increase of $5,000 on gain of sales of loans
receivable to $5,000 for the quarter ended September 30, 2001 from $0 for the
quarter ended September 30, 2000 and an increase of $7,000 in other income to
$9,000 for the quarter ended September 30, 2001 from $2,000 for the quarter
ended September 30, 2000 due to sales of annuities and miscellaneous fees.
Noninterest Expenses
--------------------
Total noninterest expenses increased by $6,000 or 1.5% to $397,000 for the
quarter ended September 30, 2001 from $391,000 for the quarter ended September
30, 2000. The increase in noninterest expenses was primarily due to an increase
in salaries and employee benefits of $20,000 or 8.6% to $253,000 for the quarter
ended September 30, 2001 from $233,000 for the quarter ended September 30, 2000
as a result of staff additions.
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. 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 $13.6 million in advances. The Company's most
liquid assets are cash and cash equivalents, which include short-term
investments. The levels of these assets are dependent on the Company's
operating, financing and investing activities during any given period. At
September 30, 2001, the Company's cash on hand, interest bearing deposits,
Federal funds sold and short-term investments totaled $3.3 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 $2.8 million as of September 30, 2001.
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 September 30, 2001 totaled $27.4 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.
The Company's primary source of cash in investing activities during the three
months ended September 30, 2001 was a net decrease of $1.8 million in loans
receivable.
10
The Company's primary uses of cash in financing activities during the three
months ended September 30, 2001 consisted of a net decrease of $2.1 million in
savings deposits and a net decrease of $900,000 in advance payments by borrowers
for taxes, insurance and ground rents.
11
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
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Reports on Form 8-K
None
12
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: November 2, 2001 /s/ Ernest A. Moretti
------------------------------------
Ernest A. Moretti
President and Chief Executive Officer
(Principal Executive Officer)
Date: November 2, 2001 /s/ Ronald W. Robinson
-------------------------------------
Ronald W. Robinson
Treasurer
(Principal Financial and Accounting Officer)
13