United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
(X) Quarterly Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act
of 1934
For the quarterly
period ended
June 30, 2003
or
( ) 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 0-14354
FIRST INDIANA
CORPORATION
(Exact name of
registrant as specified in its charter)
Indiana | 35-1692825 |
(State or other jurisdiction of |
(IRS Employer Identification Number) |
incorporation or organization) | |
135 North Pennsylvania Street, Indianapolis, IN | 46204 |
(Address of principal executive office) |
(Zip Code) |
(317) 269-1200 | |
(Registrant's telephone number, including area code) | |
| Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ) | |
| Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Securities Exchange Act). Yes (X) No ( ) | |
| Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: | |
Class |
Shares |
Common Stock, par value $0.01 per share |
Outstanding at 07/31/2003 |
15,629,953 |
FIRST INDIANA
CORPORATION AND SUBSIDIARIES
FORM 10-Q
INDEX
| Page | ||
|---|---|---|
| Part I | Financial Information | |
| Item 1. | Financial Statements | |
| Condensed Consolidated Balance Sheets as of June 30, 2003, December 31, 2002, and June 30, 2002 | 3 | |
| Condensed Consolidated Statements of Earnings for the Three and Six Months Ended June 30, 2003 and 2002 | 4 | |
| Condensed Consolidated Statement of Shareholders' Equity for the Six Months Ended June 30, 2003 | 5 | |
| Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2003 and 2002 | 6 | |
| Notes to Condensed Consolidated Financial Statements | 7 | |
| Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 16 |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 31 |
| Item 4. | Controls and Procedures | 33 |
| Part II | Other Information | |
| Item 1. | Legal Proceedings | 34 |
| Item 2. | Changes in Securities and Use of Proceeds | 34 |
| Item 3. | Defaults upon Senior Securities | 34 |
| Item 4. | Submission of Matters to a Vote of Security Holders | 34 |
| Item 5. | Other Information | 34 |
| Item 6. | Exhibits and Reports on Form 8-K | 34 |
| Signatures |
2
Condensed Consolidated Balance
Sheets
First Indiana Corporation and
Subsidiaries
(Dollars in Thousands, Except Per
Share Data)
(Unaudited)
| June 30 2003 |
December 31 2002 |
June 30 2002 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Assets | |||||||||||
| Cash | $ | 68,065 | $ | 76,050 | $ | 62,464 | |||||
| Interest-Bearing Due from Banks | 8,949 | -- | -- | ||||||||
| Federal Funds Sold | -- | -- | -- | ||||||||
| Securities Available for Sale | 155,024 | 138,457 | 145,085 | ||||||||
| Federal Home Loan Bank and Federal Reserve Bank Stock | 25,097 | 22,491 | 22,491 | ||||||||
| Loans | |||||||||||
| Business | 594,909 | 501,213 | 495,427 | ||||||||
| Consumer | 638,982 | 666,150 | 672,972 | ||||||||
| Residential Mortgage | 298,789 | 311,324 | 278,505 | ||||||||
| Single-Family Construction | 203,735 | 212,772 | 220,658 | ||||||||
| Commercial Real Estate | 167,435 | 146,174 | 142,532 | ||||||||
| Total Loans | 1,903,850 | 1,837,633 | 1,810,094 | ||||||||
| Allowance for Loan Losses | (46,247 | ) | (44,469 | ) | (37,353 | ) | |||||
| Net Loans | 1,857,603 | 1,793,164 | 1,772,741 | ||||||||
| Premises and Equipment | 26,278 | 21,528 | 20,148 | ||||||||
| Accrued Interest Receivable | 10,361 | 10,771 | 11,936 | ||||||||
| Mortgage Servicing Rights | 8,368 | 9,065 | 9,679 | ||||||||
| Goodwill | 36,901 | 13,045 | 13,045 | ||||||||
| Other Intangible Assets | 4,989 | -- | -- | ||||||||
| Other Assets | 48,759 | 40,643 | 39,749 | ||||||||
| Total Assets | $ | 2,250,394 | $ | 2,125,214 | $ | 2,097,338 | |||||
| Liabilities | |||||||||||
| Non-Interest-Bearing Deposits | $ | 253,571 | $ | 180,389 | $ | 169,461 | |||||
| Interest-Bearing Deposits | |||||||||||
| Demand Deposits | 212,023 | 179,751 | 160,781 | ||||||||
| Savings Deposits | 427,572 | 398,752 | 414,581 | ||||||||
| Certificates of Deposit | 652,418 | 580,312 | 638,725 | ||||||||
| Total Interest-Bearing Deposits | 1,292,013 | 1,158,815 | 1,214,087 | ||||||||
| Total Deposits | 1,545,584 | 1,339,204 | 1,383,548 | ||||||||
| Short-Term Borrowings | 150,832 | 170,956 | 143,142 | ||||||||
| Federal Home Loan Bank Advances | 278,550 | 346,532 | 319,538 | ||||||||
| Trust Preferred Securities | 23,578 | 11,797 | -- | ||||||||
| Accrued Interest Payable | 2,554 | 2,290 | 2,942 | ||||||||
| Advances by Borrowers for Taxes and Insurance | 2,736 | 1,820 | 3,403 | ||||||||
| Other Liabilities | 29,019 | 31,404 | 26,702 | ||||||||
| Total Liabilities | 2,032,853 | 1,904,003 | 1,879,275 | ||||||||
| Shareholders' Equity | |||||||||||
| Preferred Stock, $.01 Par Value: 2,000,000 Shares | |||||||||||
| Authorized; None Issued | -- | -- | -- | ||||||||
| Common Stock, $.01 Par Value: 33,000,000 Shares | |||||||||||
| Authorized; Issued: 2003 - 17,372,811 Shares; | |||||||||||
| 2002 - 17,295,351 and 17,246,624 Shares | 174 | 173 | 172 | ||||||||
| Capital Surplus | 44,472 | 43,296 | 43,222 | ||||||||
| Retained Earnings | 192,005 | 194,738 | 191,077 | ||||||||
| Accumulated Other Comprehensive Income | 3,795 | 4,644 | 3,825 | ||||||||
| Treasury Stock at Cost: 2003 - 1,830,750 Shares; | |||||||||||
| 2002 - 1,754,891 and 1,680,730 Shares | (22,905 | ) | (21,640 | ) | (20,233 | ) | |||||
| Total Shareholders' Equity | 217,541 | 221,211 | 218,063 | ||||||||
| Total Liabilities and Shareholders' Equity | $ | 2,250,394 | $ | 2,125,214 | $ | 2,097,338 | |||||
See Notes to Consolidated Financial Statements
3
Condensed Consolidated Statements
of Earnings
First Indiana Corporation and
Subsidiaries
(Dollars in Thousands, Except Per
Share Data)
(Unaudited)
| Three Months Ended June 30 |
Six Months Ended June 30 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2003 |
2002 |
2003 |
2002 | |||||||||||
| Interest Income | ||||||||||||||
| Loans | $ | 27,318 | $ | 29,343 | $ | 55,076 | $ | 58,371 | ||||||
| Securities Available for Sale | 1,863 | 2,173 | 3,892 | 4,415 | ||||||||||
| Dividends on FRB and FHLB Stock | 322 | 350 | 668 | 683 | ||||||||||
| Federal Funds Sold | -- | 3 | 3 | 15 | ||||||||||
| Interest-Bearing Due from Banks | 23 | -- | 29 | -- | ||||||||||
| Total Interest Income | 29,526 | 31,869 | 59,668 | 63,484 | ||||||||||
| Interest Expense | ||||||||||||||
| Deposits | 6,449 | 9,771 | 13,840 | 19,972 | ||||||||||
| Short-Term Borrowings | 385 | 527 | 772 | 922 | ||||||||||
| Federal Home Loan Bank Advances | 2,216 | 3,098 | 4,817 | 6,923 | ||||||||||
| Trust Preferred Securities | 226 | -- | 448 | -- | ||||||||||
| Total Interest Expense | 9,276 | 13,396 | 19,877 | 27,817 | ||||||||||
| Net Interest Income | 20,250 | 18,473 | 39,791 | 35,667 | ||||||||||
| Provision for Loan Losses | 16,091 | 4,159 | 22,328 | 6,769 | ||||||||||
| Net Interest Income After Provision for Loan Losses | 4,159 | 14,314 | 17,463 | 28,898 | ||||||||||
| Non-Interest Income | ||||||||||||||
| Loan and Deposit Charges | 4,547 | 3,897 | 8,807 | 7,407 | ||||||||||
| Loan Servicing Income (Expense) | (168 | ) | 203 | (265 | ) | 434 | ||||||||
| Loan Fees | 630 | 792 | 1,219 | 1,397 | ||||||||||
| Trust Fees | 709 | 655 | 1,435 | 1,328 | ||||||||||
| Somerset Fees | 2,531 | 2,539 | 7,230 | 6,822 | ||||||||||
| Investment Product Sales Commissions | 486 | 927 | 834 | 1,535 | ||||||||||
| Sale of Loans | 2,895 | 2,052 | 5,368 | 3,933 | ||||||||||
| Sale of Investment Securities | -- | 223 | 7 | 223 | ||||||||||
| Other | 904 | 667 | 1,818 | 1,370 | ||||||||||
| Total Non-Interest Income | 12,534 | 11,955 | 26,453 | 24,449 | ||||||||||
| Non-Interest Expense | ||||||||||||||
| Salaries and Benefits | 11,378 | 8,616 | 23,541 | 18,653 | ||||||||||
| Net Occupancy | 1,243 | 1,041 | 2,392 | 2,021 | ||||||||||
| Equipment | 1,684 | 1,555 | 3,357 | 3,144 | ||||||||||
| Professional Services | 1,374 | 1,025 | 2,463 | 2,096 | ||||||||||
| Marketing | 629 | 494 | 1,246 | 1,153 | ||||||||||
| Telephone, Supplies, and Postage | 958 | 893 | 2,002 | 1,672 | ||||||||||
| Other Intangible Asset Amortization | 184 | -- | 368 | -- | ||||||||||
| Other | 2,211 | 1,669 | 4,051 | 3,644 | ||||||||||
| Total Non-Interest Expense | 19,661 | 15,293 | 39,420 | 32,383 | ||||||||||
| Earnings (Loss) before Income Taxes | (2,968 | ) | 10,976 | 4,496 | 20,964 | |||||||||
| Income Taxes (Benefit) | (1,245 | ) | 4,080 | 1,491 | 7,685 | |||||||||
| Net Earnings (Loss) | $ | (1,723 | ) | $ | 6,896 | $ | 3,005 | $ | 13,279 | |||||
| Basic Earnings (Loss) Per Share | $ | (0.11 | ) | $ | 0.44 | $ | 0.19 | $ | 0.86 | |||||
| Diluted Earnings (Loss) Per Share | $ | (0.11 | ) | $ | 0.43 | $ | 0.19 | $ | 0.84 | |||||
| Dividends Per Common Share | $ | 0.165 | $ | 0.160 | $ | 0.330 | $ | 0.320 | ||||||
See Notes to Consolidated Financial Statements
4