UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM 10-QSB
(Mark One)
[X]
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2005
--------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from __________________ to ______________________
Commission File Number: 000-51234
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NORTH PENN BANCORP, INC.
------------------------
(Exact name of small business issuer as specified in its charter)
Pennsylvania 20-1882440
------------ ----------
(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No.)
216 Adams Avenue, Scranton, PA 18503
------------------------------------
(Address of principal executive offices)
(570) 344-6113
--------------
(Issuer's telephone number)
(Former name, former address and former fiscal year
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date: none
Transitional Small Business Disclosure Format (Check One): Yes [ ] No [X]
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
Condensed Consolidated Balance Sheets
at March 31, 2005 and December 31, 2004
Condensed Consolidated Statements of Income
for the three months ended March 31, 2005 and 2004
Condensed Consolidated Statements of Cash Flows for
the three months ended March 31, 2005 and 2004
Notes to Unaudited Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis or Plan of Operation.
Item 3. Controls and Procedures.
PART II OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
EXPLANATORY NOTE
North Penn Bancorp, Inc. (the "Company") has filed this Amended
Quarterly Report on Form 10-QSB/A in order to include use of proceeds under Part
II, Item 2. The use of proceeds described herein is consistent with the use of
proceeds described in the Company's prospectus and does not represent a material
change thereto.
North Penn Bancorp, Inc. (the "Company") was organized on November 22,
2004 in anticipation of the mutual holding company reorganization of North Penn
Bank. After completion of the reorganization, the Company will become the state
chartered mid-tier stock holding company of the Bank and will own all of the
Bank's capital stock. The Company is not currently an operating company and,
therefore, the information presented in this report is for the Bank and its
subsidiary.
ITEM I. FINANCIAL STATEMENTS
NORTH PENN BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
March 31, 2005 December 31, 2004
-------------- -----------------
(Unaudited) (Audited)
(In thousands)
ASSETS:
Cash and due from banks $ 1,167 $ 719
Interest bearing deposits 344 940
-------- --------
Total cash and cash equivalents 1,511 1,659
Investment securities, available for sale 17,198 22,967
Investment securities, held to maturity
(fair value 2005, $500; 2004, $503 500 498
Equity securities at cost, substantially restricted 543 786
Loans, net of allowance for loan losses 64,042 60,829
Bank premises and equipment - net 2,705 2,713
Accrued interest receivable 508 529
Cash surrender value of life insurance 1,960 1,817
Deferred income taxes 354 291
Other assets 1,080 908
Foreclosed assets 88 0
-------- --------
TOTAL ASSETS 90,489 92,997
======== ========
LIABILITIES:
Deposits:
Non-interest bearing deposits 3,850 4,127
Interest bearing demand deposits 28,006 30,190
Interest bearing time deposits 44,558 43,025
-------- --------
Total deposits 76,414 77,342
Other borrowed funds 5,900 7,375
Accrued interest and other liabilities 467 527
-------- --------
TOTAL LIABILITIES 82,781 85,244
EQUITY
Unappropiated retained earnings 4,887 4,796
Appropriated retained earnings 2,952 2,952
Accumulated other comprehensive income (132) 5
TOTAL EQUITY 7,708 7,753
-------- --------
TOTAL LIABILITIES AND EQUITY $ 90,489 $ 92,997
======== ========
1
NORTH PENN BANCORP, INC. AND SUBSIDIARY
UNAUDITED CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(In thousands)
2005 2004
------- -------
INTEREST INCOME
Interest on loans $ 961 $ 777
Interest and dividends on investments 239 389
------- -------
Total interest income 1,200 1,166
INTEREST EXPENSE
Interest on deposits 396 430
Interest on borrowed funds 88 78
------- -------
Total interest expense 484 508
------- -------
NET INTEREST INCOME 716 658
PROVISION FOR LOAN LOSSES 15 0
------- -------
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES 701 658
------- -------
OTHER INCOME
Service charges on deposit accounts 50 35
Other income 40 51
Gain on sale of securities 4 4
------- -------
TOTAL OTHER INCOME 94 90
OTHER EXPENSE
Salaries and employee benefits 377 346
Occupancy and equipment expense 116 132
Other expenses 156 164
------- -------
TOTAL OTHER EXPENSE 649 642
------- -------
INCOME BEFORE INCOME TAXES 146 106
INCOME TAX EXPENSE (BENEFIT) 54 (8)
------- -------
NET INCOME 92 114
OTHER COMPREHENSIVE INCOME (LOSS):
Unrealized holding (loss) gain arising during period,
net of income tax (136) 52
------- -------
COMPREHENSIVE INCOME $ (44) $ 166
======= =======
2
NORTH PENN BANCORP, INC. AND SUBSIDIARY
(UNAUDITED) CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
(In thousands)
2005 2004
------- -------
Operating Activities:
Net income $ 92 $ 114
Items not requiring (providing) cash
Depreciation 40 62
Provision for loan losses 15 0
Increase in cash surrender value of life insurance (18) (17)
Net realized (gain) loss on securities (4) (4)
Changes in:
Accrued interest income and other assets (98) (261)
Accrued interest expense and other liabilities (107) 48
------- -------
Net Cash Used In Operating Activities (80) (58)
------- -------
Investing Activities:
Purchase bank premises and equipment (32) (51)
Purchase of securities "available for sale" (291) (385)
Sales of securities "available for sale" 4,428 1,254
Redemptions of securities "available for sale" 915 1,421
Purchase of mortgage-backed securities "available for sale" (1,251)
Redemptions of mortgage-backed securities "available for sale" 513 468
Purchase of life insurance policies (125)
Net (purchase) sale of restricted stock 243 54
Net decrease (increase) in loans to customers (3,316) (2,038)
------- -------
Net Cash Provided by (Used) In Investing Activities 2,335 (528)
------- -------
Financing Activities:
Increase (decrease) in deposits before interest credited (928) (503)
Increase (decrease) in borrowed funds (1,475)
------- -------
Net Cash Used In Financing Activities (2,403) (503)
------- -------
Net Decrease In Cash and Cash Equivalents (148) (1,089)
------- -------
Cash and Cash Equivalents, January 1 1,659 3,068
------- -------
Cash and Cash Equivalents, March 31 $ 1,511 $ 1,979
======= =======
Supplementary Schedule of Cash Flow Information:
Cash paid during the period for:
Interest $ 68 $ 82
Income taxes 36 2
Non-cash investing and financing activities:
Unrealized gains (losses) on securities $ (199) $ 79
3
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS
The Company was organized on November 22 2004 to be the holding
company for the Bank. North Penn Bank (formerly "North Penn
Savings and Loan Association") operates from four offices under a
state savings bank charter and provides financial services to
individuals and corporate customers primarily in Northeastern
Pennsylvania. The Bank's primary deposit products are savings and
demand deposit accounts and certificates of deposit. Its primary
lending products are real estate and consumer loans.
On June 19, 2003, the Pennsylvania Department of Banking approved
the Bank's conversion from a Pennsylvania State-chartered mutual
savings association to a Pennsylvania State-chartered mutual
savings bank and subsequent name change.
The accounting policies of North Penn Bank and Norpenco, Inc.
(sometimes collectively referred to herein as the "Bank") conform
with accounting principles generally accepted in the United States
of America and with general practice within the banking industry.
A description of the significant accounting policies is presented
below.
PRINCIPLES OF CONSOLIDATION
The financial statements of the North Penn Bank have been
consolidated with those of its wholly-owned subsidiary, Norpenco,
Inc., eliminating intercompany accounts. Norpenco, Inc. is used by
the Bank to make equity investments in other banking companies.
BASIS OF PRESENTATION
The unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principals for
interim financial information. In the opinion of management, all
adjustments that are of a normal recurring nature and are
considered necessary for a fair presentation have been included.
They are not, however, necessarily indicative of the results of
consolidated operations for a full year.
USE OF ESTIMATES
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of
4
America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ
from those estimates.
Material estimates that are particularly susceptible to
significant change relate to the determination of the allowance
for loan losses on loans and the valuation of real estate acquired
in connection with foreclosures or in the satisfaction of loans.
In connection with the determination of the allowances for losses
on loans and foreclosed real estate, management periodically
obtains independent appraisals for significant properties.
INVESTMENT SECURITIES
The Bank's investments in securities are classified in two
categories and accounted for as follows:
Securities Held-to-Maturity. Bonds, notes and debentures for
which the Bank has the positive intent and ability to hold to
maturity are reported at cost, adjusted for amortization of
premiums and accretion of discounts.
Securities Available-for-Sale. Securities available-for-sale
consist of bonds, notes, debentures and equity securities not
classified to be held-to-maturity and are carried at fair
value with unrealized holding gains and losses, net of tax,
reported as a separate component of other comprehensive income
until realized.
Purchase premiums and discounts are recognized in interest income
on the straight-line basis over the terms of the securities, which
approximates the interest method. Declines in the fair value of
held-to-maturity and available-for-sale securities below their
cost that are deemed to be other than temporary are reflected in
earnings as realized losses. Gains and losses on the sale of
securities are recorded on the trade date and are determined using
the specific identification method and are reported as other
income in the statement of income.
The amortized cost and fair value of investment securities at
March 31, 2005 and December 31, 2004 are as follows:
5
AVAILABLE-FOR-SALE
MARCH 31, 2005
(In thousands)
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-------------------------------------------------------------------------------------------
U.S. Agency securities $ 2,545 $ 4 $ (43) $ 2,342
Mortgage-backed securities 7,796 (178) 7,781
Municipal securities 550 (11) 539
Other securities 5,941 37 (8) 5,970
----------- ---------- --------- -----------
Total debt securities 16,832 41 (240) 16,633
Equity securities 565 16 (16) 565
----------- ---------- --------- -----------
Total Available for Sale $ 17,397 $ 57 $ (256) $ 17,198
=========== ========== ========= ===========
HELD-TO-MATURITY
MARCH 31, 2005
(In thousands)
Gross Gross
March 31, 2005 Amortized Unrealized Unrealized Fair
(in thousands) Cost Gains Losses Value
-------------------------------------------------------------------------------------------
Municipal securities $ 500 500
----------- ----------- ----------- -----------
Total Available for Sale $ 500 $ $ $ 500
=========== =========== =========== ===========
AVAILABLE-FOR-SALE
DECEMBER 31, 2004
(In thousands)
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-------------------------------------------------------------------------------------------
U.S. Agency securities $ 2,385 $ -- $ (35) $ 2,350
Mortgage-backed securities 10,882 10 (116) 10,776
Municipal securities 875 1 (3) 873
Other securities 8,544 143 (1) 8,686
----------- ---------- --------- -----------
Total debt securities 22,686 154 (155) 22,865
Equity securities 273 11 (2) 282
----------- ---------- --------- -----------
Total Available for Sale $ 22,959 $ 165 $ (157) $ 22,967
=========== ========== ========= ===========
HELD-TO-MATURITY
DECEMBER 31, 2004
(In thousands)
Gross Gross
December 31, 2004 Amortized Unrealized Unrealized Fair
(in thousands) Cost Gains Losses Value
-------------------------------------------------------------------------------------------
Municipal securities $ 498 6 504
----------- ---------- ----------- -----------
Total Available for Sale $ 498 $ 6 $ $ 504
=========== ========== =========== ===========
6
The gross fair value and unrealized losses of the Bank's
investments, aggregated by investment category and length of time
that individual securities have been in a continuous unrealized
loss position at March 31, 2005 is as follows:
Less than 12 months 12 months or longer Total
------------------- ------------------- ------
Fair Unrealized Fair Unrealized Fair Unrealized
Value Losses Value Losses Value Losses
----------------------------------------------------------------------------------------------
U.S. Agencies $ 990 $ (10) $ 1,352 $ (33) $ 2,342 $ (43)
Mortgage-backed 5,419 (141) 2,199 (37) 7,618 (178)
Municipal 265 (5) 274 (6) 539 (11)
Other securities 2,003 (8) 2,003 (8)
Equity securities 303 (16) 2,003 (16)
------- ---------- ---------- -------- ------- ----------
$ 8,980 $ (180) $ 3,825 $ (76) $12,805 $ (256)
======= ========== ========== ======== ======= ==========
The Bank invests in debt securities of the U.S. government, U.S.
agencies, U.S. sponsored agencies, obligations of states and political
subdivisions and corporate obligations. Changes in market value of all
debt securities can result from changes in interest rates. Changes in
credit quality can affect securities of states and political
subdivisions and corporate obligations. The changes in market value of
the debt securities held by the Bank have been due to changes in
interest rates, and because the Bank has the ability these investments
until maturity, the Bank does not consider these investments to be
other-than-temporarily impaired at March 31, 2005.
The Bank invests in equity securities of other banks through its
subsidiary, Norpenco, Inc. Management has evaluated the near-term
prospects of the issuers with unrealized losses, in relation to the
severity and duration of the impairment. Based on that evaluation, and
the Bank's ability to hold these stocks for a reasonable period of time
sufficient for a forecasted recovery of fair value, the management does
not consider these investments to be other-than-temporarily impaired at
March 31, 2005.
LOANS
March 31, December 31,
2005 2004
--------- ------------
(In thousands)
Real estate mortgages:
Construction and land development $ 919 $ 2,030
Residential, 1 - 4 family 34,342 32,743
Residential, multi-family 251 256
------- -------
Total real estate mortgages 35,102 35,029
Commercial 20,182 17,136
Consumer 9,365 9,595
------- -------
Total loans 64,990 61,760
Allowance for loan loss 948 931
------- -------
Total loans, net $64,042 $60,829
======= =======
7
Loans are stated at the principal amount outstanding, net of any
unearned income, deferred loan fees and the allowance for loan
losses. Interest on mortgage and commercial loans is calculated at
the time of payment based on the current outstanding balance of
the loan. Interest on consumer loans is recognized on the simple
interest method.
The allowance for loan losses is increased by charges to income
and decreased by charge-offs (net of recoveries). Management's
periodic evaluation of the adequacy of the allowance is based on
the bank's past loan loss experience, known and inherent risks in
the portfolio, adverse situations that may affect the borrower's
ability to pay, the estimated value of any underlying collateral
and current economic conditions.
Uncollectable interest on loans that are contractually past due 90
days or more is credited to an allowance established through
management's periodic evaluation. The allowance is established by
a charge to interest income equal to all interest previously
accrued, and income is subsequently recognized only to the extent
that cash payments are received until, in management's judgment,
the borrower's ability to make periodic interest and principal
payments is back to normal, in which case the loan is returned to
accrual status.
OTHER BORROWINGS
The Bank has a line of credit agreement with the Federal Home Loan
Bank of Pittsburgh for short term borrowings varying from one day
to three years. Advances on this line must be secured by
"qualifying collateral" as defined in the agreement and bear
interest at fixed or variable rates as determined at the date
advances are made. The line expires in June, 2005. At March 31,
2005, the Bank borrowed $900 in overnight funds.
The Bank also has a $5,000 term loan at a fixed rate of 6.19%,
which was issued in July of 2000, and matures July of 2010. The
loan requires monthly interest payments, with the principal due at
maturity.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS.
FORWARD-LOOKING INFORMATION
In addition to historical information, this Report on Form 10-QSB may
include certain forward-looking statements based on current management
expectations. The Company's actual results could differ materially from those
management expectations. Factors that could cause future results to vary from
current management expectations include, but are not limited to general economic
conditions, legislative and regulatory changes, monetary and fiscal policies of
the federal government, changes in tax policies, rates and regulation of
federal, state and local tax authorities, changes in interest rates, deposit
flows, the cost of funds, demand for loan products, demand for financial
services, competition, changes in the quality of competition, changes in the
quality or composition of the Company's loan or investment portfolios, changes
in accounting principles, policies or guidelines, and other economic,
competitive, governmental and technological factors affecting the Company's
operations, markets, products, services and prices.
FINANCIAL CONDITION
All amounts presented are in thousands, except ratios.
Our total assets decreased $2,554 from $92,997 at December 31, 2004 to $90,443
at March 31, 2005, or 3%. The decline was primarily in investment securities.
Investment securities decreased $5,767 from $23,465 at December 31, 2005 to
$17,698 at March 31, 2005, or 25%. Investment securities decreased primarily to
fund an increase in loans and a decline in other borrowings. The decrease was in
securities "available for sale". The decrease included $4,516 in sales of
securities, $243 in maturities and $513 in principal payments on mortgage-backed
securities.
Net loans increased $3,213, or 5%, from $60,829 at December 31, 2004 to $64,042
at March 31, 2005, mainly due to an increase in commercial loans. The Bank has
been increasing its commercial loan portfolio to diversify its loan portfolio
and reduce its exposure to the interest rate risk associated with residential
mortgages.
The allowance for loan loss was $948 at March 31, 2005, compared to $931 at
December 31, 2004. We recorded $15 in loan loss provision for the three months
ended March 31, 2005. During this period, the Bank had no loans charged-off and
collected $2 in payments on loans previously charged off. Management assesses
the adequacy of the allowance for loan losses based on evaluating known and
inherent risks in the loan portfolio and upon management's continuing analysis
of the factors underlying the quality of the loan portfolio. While management
believes that, based on information currently available, the allowance for loan
losses is sufficient to cover losses inherent in its loan portfolio at this
time, no assurance can be given that the level of the allowance for loan losses
is sufficient to cover future possible loan losses incurred by the Bank or that
future adjustments to the allowance for loan losses will not be necessary if
economic and other conditions differ substantially from the economic and other
9
conditions used by management to determine the current level of the allowance
for loan losses. Management may in the future increase the level of the
allowance for loan losses as a percentage of total loans and non-performing
loans in the event it increases the level of commercial or consumer lending as a
percentage of its total loan portfolio. In addition, various regulatory
agencies, as an integral part of their examination process, periodically review
the allowance for loan losses. Such agencies may require the Bank to provide
additions to the allowance based upon judgments different from management.
Non-performing loans, which are loans past due 90 days or more and non-accruing
loans, totaled $763 at March 31, 2005, compared to $1,357 at December 31, 2005.
The reduction was $575 in residential mortgages and $19 in consumer loans. The
ratio of the Bank's allowance for loan losses to total loans was 1.46% at March
31, 2005 and 1.51% at December 31, 2004.
Total deposits decreased $928 or 1% from $77,342 at December 31, 2005 to $76,414
at March 31, 2005. Non-interest bearing deposits declined by $277 or 7%,
interest bearing demand deposits declined $2,184 or 7%, while time deposits
increased $1,533 or 4%. The changes in the accounts are primarily due to
seasonal fluctuations.
Other borrowings decreased $1,475 from $7,375 at December 31, 2004 to $5,900 at
March 31, 2005, due to reductions in overnight borrowings from the Federal Home
Loan Bank of Pittsburgh.
RESULTS OF OPERATIONS
COMPARISON OF THE THREE MONTH PERIODS ENDED MARCH 31, 2005 AND 2004
Net income totaled $92 for the three months ended March 31, 2005 compared to
$114 for the three months ended March 31, 2004, a decrease of $22, or 19%. Net
income decreased primarily due to income tax expense of $54 in 2005, compared to
an income tax benefit of $8 in 2004. The tax benefit was due to an over payment
from the previous year.
Interest income increased $34 or 3%, to $1,200 in 2005, compared to $1,166 in
2004. Interest on loans increased $184 or 24%, from $777 in 2004 to $961 in
2005, due to higher loan volume. Interest on investments decreased $150, or 39%
due to lower balances of investments.
Interest expense decreased $24, or 5%, from $508 in 2004 to $484 in 2005.
Interest on deposits decreased $34, or 8%, from $430 in 2004 to $396 due to the
roll-off of higher rate time deposits. Interest on borrowed funds increased $10,
or 13%, due to overnight borrowings.
Net interest income increased $58 or 9% from $658 in 2004, to $716 in 2005.
10
Other income increased $4, from $90 in 2004, to $94 in 2005. Other expenses
increased $7 from $642 in 2004 to $649 in 2005. Salaries and employee benefits
increased $31 or 9%, from $346 in 2004, to $377 in 2005, while occupancy and
equipment expense decreased $16, or 12% from $132 in 2004, to $116 in 2005, and
other expenses decreased $8 or 5%, from $164 in 2004 to $156 in 2005.
LIQUIDITY AND CAPITAL RESOURCES
The Bank's primary sources of funds are deposits, principal and interest
payments on loans, FHLB advances and proceeds from mortgage loan sales. While
maturities and scheduled amortization of loans are predictable sources of funds,
deposit flows and mortgage prepayments are greatly influenced by general
interest rates, economic conditions, and competition. The Bank's regulators
require the Bank to maintain sufficient liquidity to ensure its safe and sound
operation.
A review of the Consolidated Statement of Cash Flows included in the
accompanying financial statements shows that the Bank's cash and cash
equivalents decreased $148 for the three months ended March 31, 2005. During
that period, cash was primarily provided from sales and redemptions of
securities, deposits in other banks and earnings. During the period, cash was
used primarily to fund loans to customers, a decrease in customer's deposits and
a decrease in borrowed funds.
At March 31, 2005 and December 31, 2004, the Bank exceeded all of its regulatory
capital requirements as indicated in the following table.
March 31, 2005 December 31, 2004
-------------- -----------------
(Dollars in Thousands)
Tier 1 capital:
Equity, less unrealized gains or losses $ 7,839 $ 7,744
Tier 2 capital:
Loan loss reserves includable in Tier 2 801 803
Total risk-based capital 8,637 8,547
Risk-adjusted assets (including off-balance sheet items) 90,646 92,686
Tier 1 capital ratio (4.00% required) 8.64% 8.35%
Total risked-based capital ratio (8.00% required) 12.26% 12.07%
Tier 1 leverage ratio 13.53% 13.32%
RELATED PARTIES
The Company does not have any material transactions involving related persons or
entities, other than traditional banking transactions, which are made on the
same terms and conditions as those prevailing at the time for comparable
transactions with unrelated parties.
11
ITEM 3. CONTROLS AND PROCEDURES.
The Company's management, including the Company's principal executive officer
and principal financial officer, have evaluated the effectiveness of the
Company's "disclosure controls and procedures," as such term is defined in Rule
13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended,
(the "Exchange Act"). Based upon their evaluation, the principal executive
officer and principal financial officer concluded that, as of the end of the
period covered by this report, the Company's disclosure controls and procedures
were effective for the purpose of ensuring that the information required to be
disclosed in the reports that the Company files or submits under the Exchange
Act with the Securities and Exchange Commission (the "SEC") (1) is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms, and (2) is accumulated and communicated to the Company's
management, including its principal executive and principal financial officers,
as appropriate to allow timely decisions regarding required disclosure.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is not involved in any pending legal proceedings other than routine
legal proceedings occurring in the ordinary course of business. Such routine
legal proceedings, in the aggregate, are believed by management to be immaterial
to the Company's financial condition or results of operations.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
USE OF PROCEEDS
1. The effective date of the Securities Act statement for which the use
of proceeds information is being disclosed is December 10, 2004. The
Commission file number assigned to the registration statement is
333-121121.
2. The offering was commenced on March 28, 2005.
3. The offering was not terminated before any securities were sold.
4. (i) The offering terminated upon the completion of the sale of Company
common stock in the minority stock issuance.
(ii) Ryan, Beck & CO. served as the managing underwriter for the
Company's minority stock issuance.
(iii) As part of the Company's minority stock issuance, it registered
common stock, par value $0.10 per share.
(iv) The amount of shares registered in the minority stock issuance
was 636,863. The aggregate price of the offering amount
registered was $6,368,630. The Company sold a total of 636,863
shares of its common stock at an aggregate offering price of
$6,368,630.
(v) From the effective date of the Securities Act registration
statement to the ending of the reporting period, the Company
incurred $654,000 in expenses in connection with the issuance
and distribution of the securities registered for underwriting
discounts and commissions, finders' fees, expenses paid to or
for underwriters, other expenses and total expenses. The
payments were direct payments to others persons, not directors,
officers, general partners of the Company or their associates,
persons owning 10% or more of any class of equity securities of
the Company or to affiliates of the Company.
(vi) The net offering proceeds from the minority stock issuance were
not finalized as of March 31, 2005.
(vii) From March 28, 2005 to March 31, 2005, the Company did not
receive or use any of the net offering proceeds.
Amount of Net
Activity Proceeds
---------------------------------------------- ----------
Net Offering Proceeds --
Construction of Plant, Building and Facilities --
Purchase and Installation of Machinery and
Equipment --
Purchase of Real Estate --
Acquisition of Other Business(es) --
Repayment of Indebtedness --
Working Capital --
North Penn Bank --
North Penn Mutual Holding Company --
North Penn Charitable Foundation --
North Penn Bank Employee Stock Ownership
Plan Loan --
Dividends Paid --
--
-----------
Proceeds Remaining at North Penn Bancorp, Inc. --
===========
(viii) The use of proceeds described above is consistent with the use
of proceeds described in the Company's prospectus and does not
represent a material change thereto.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5 OTHER INFORMATION.
None
12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
EXHIBITS
3.1 Certificate of Incorporation of North Penn Bancorp, Inc.*
3.2 By-laws of North Penn Bancorp, Inc.*
4.1 Specimen Stock Certificate of North Penn Bancorp, Inc.*
11.1 Statement re: computation of per share earnings: None
31.1 Rule 13a-14(a) /15d-14(a) Chief Executive Officer Certification
31.1 Rule 13a-14(a) /15d-14(a) Chief Financial Officer Certification
32.1 Section 1350 Certification of Chief Executive Officer
32.2 Section 1350 Certification of Chief Financial Officer
FORM 8-K
April 11, 2005 Announcement of the resignation of John B. Errico, the
Company's Controller and Principal Accounting Officer.
April 21, 2005 Press Release announcing the appointment of Philip O. Farr
as Senior Vice President and Chief Financial Officer.
May 4, 2005 Press Release announcing Depositor approval of Plan of
Mutual Holding Company Reorganization.
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* Incorporated herein by reference into this document from Form SB-2
Registration Statement, as amended, filed on December 10, 2004,
Registration No. 333-121121.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be so signed on its behalf by the undersigned, thereunto duly
authorized.
North Penn Bancorp, Inc
Dated: March 29, 2006 /s/ Frederick L. Hickman
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Frederick L. Hickman
President and
Chief Executive Officer
Dated: March 29, 2006 /s/ Philip O. Farr
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Philip O. Farr
Senior Vice President and
Chief Financial Officer
14