| 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 March 31, 2004 |
| 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 incorporation or organization) |
(IRS Employer Identification Number) |
| 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 04/30/2004 15,658,459 |
| FIRST INDIANA CORPORATION AND SUBSIDIARIES |
| FORM 10-Q INDEX |
| Page
|
||
| Part I | Financial Information | |
| Item 1. | Financial Statements | |
| Condensed Consolidated Balance
Sheets as of March 31, 2004, December 31, 2003, and March 31, 2003 |
3 | |
| Condensed Consolidated Statements
of Earnings for the Three Months Ended March 31, 2004 and 2003 |
4 | |
| Condensed Consolidated Statement of Shareholders’ Equity for the Three Months Ended March 31, 2004 | 5 | |
| Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2004 and 2003 | 6 | |
| Notes to Condensed Consolidated Financial Statements | 7 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 14 |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 25 |
| Item 4. | Controls and Procedures | 28 |
| Part II | Other Information | |
| Item 1. | Legal Proceedings | 29 |
| Item 2. | Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities | 29 |
| Item 3. | Defaults upon Senior Securities | 29 |
| Item 4. | Submission of Matters to a Vote of Security Holders | 30 |
| Item 5. | Other Information | 30 |
| Item 6. | Exhibits and Reports on Form 8-K | 31 |
| Signatures |
| 2 |
| Condensed Consolidated Balance Sheets |
|
First Indiana Corporation and Subsidiaries (Dollars in Thousands, Except Per Share Data) (Unaudited) |
|
March 31 |
December
31 2003 |
March 31 2003 |
||||
|
Assets |
|
|
|
|
|
|
|
Cash |
$ 48,448 |
|
$ 58,590 |
|
$ 52,187 |
|
|
Interest-Bearing Due from Banks |
35,463 |
|
1,715 |
|
10,359 |
|
|
Federal Funds Sold |
— |
|
— |
|
29,000 |
|
|
|
|
|
||||
|
Cash and Cash Equivalents |
83,911 |
|
60,305 |
|
91,546 |
|
|
Securities Available for Sale |
212,220 |
|
215,453 |
|
156,093 |
|
|
Other Investments |
25,248 |
|
24,957 |
|
23,649 |
|
|
Loans |
|
|
|
|
|
|
|
Business |
499,688 |
|
515,316 |
|
588,086 |
|
|
Consumer |
572,546 |
|
612,025 |
|
665,371 |
|
|
Residential Mortgage |
324,709 |
|
316,822 |
|
306,081 |
|
|
Single-Family Construction |
187,381 |
|
192,450 |
|
206,289 |
|
|
Commercial Real Estate |
175,482 |
|
178,378 |
|
154,490 |
|
|
|
|
|
||||
|
Total Loans |
1,759,806 |
|
1,814,991 |
|
1,920,317 |
|
|
Allowance for Loan Losses |
(53,034 |
) |
(53,197 |
) |
(48,178 |
) |
|
|
|
|
||||
|
Net Loans |
1,706,772 |
|
1,761,794 |
|
1,872,139 |
|
|
Premises and Equipment |
25,233 |
|
25,673 |
|
25,798 |
|
|
Accrued Interest Receivable |
8,602 |
|
9,353 |
|
10,286 |
|
|
Loan Servicing Rights |
5,716 |
|
5,985 |
|
8,642 |
|
|
Goodwill |
37,042 |
|
37,042 |
|
36,022 |
|
|
Other Intangible Assets |
4,441 |
|
4,621 |
|
5,173 |
|
|
Other Assets |
51,690 |
|
47,954 |
|
41,744 |
|
|
|
|
|
||||
|
Total Assets |
$2,160,875 |
|
$2,193,137 |
|
$2,271,092 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Non-Interest-Bearing Deposits |
$ 261,383 |
|
$ 235,811 |
|
$ 214,811 |
|
|
Interest-Bearing Deposits |
|
|
|
|
|
|
|
Demand Deposits |
176,845 |
|
217,353 |
|
187,711 |
|
|
Savings Deposits |
452,017 |
|
400,804 |
|
441,080 |
|
|
Certificates of Deposit |
595,808 |
|
636,004 |
|
695,488 |
|
|
|
|
|
||||
|
Total Interest-Bearing Deposits |
1,224,670 |
|
1,254,161 |
|
1,324,279 |
|
|
|
|
|
||||
|
Total Deposits |
1,486,053 |
|
1,489,972 |
|
1,539,090 |
|
|
Short-Term Borrowings |
123,754 |
|
147,074 |
|
145,456 |
|
|
Federal Home Loan Bank Advances |
250,426 |
|
265,488 |
|
315,492 |
|
|
Subordinated Notes |
46,565 |
|
46,534 |
|
12,180 |
|
|
Accrued Interest Payable |
2,876 |
|
2,156 |
|
3,156 |
|
|
Advances by Borrowers for Taxes and Insurance |
3,070 |
|
1,533 |
|
3,946 |
|
|
Other Liabilities |
35,258 |
|
31,486 |
|
29,455 |
|
|
|
|
|
||||
|
Total Liabilities |
1,948,002 |
|
1,984,243 |
|
2,048,775 |
|
|
|
|
|
||||
|
Shareholders’ Equity |
|
|
|
|
|
|
|
Preferred Stock, $.01 Par Value: 2,000,000
Shares Authorized; |
— |
|
— |
|
— |
|
|
Common Stock, $.01 Par Value: 33,000,000 Shares Authorized; |
|
|
|
|
|
|
|
Issued: 2004 - 17,576,964
Shares; 2003 - 17,473,764 and |
176 |
|
175 |
|
174 |
|
|
Capital Surplus |
48,106 |
|
46,595 |
|
44,313 |
|
|
Retained Earnings |
187,959 |
|
185,012 |
|
196,232 |
|
|
Accumulated Other Comprehensive Income |
1,251 |
|
1,756 |
|
4,204 |
|
|
Treasury Stock at Cost: 2004 - 1,923,187 Shares; |
|
|
|
|
|
|
|
2003 - 1,927,017 and 1,812,750 Shares |
(24,619 |
) |
(24,644 |
) |
(22,606 |
) |
|
|
|
|
||||
|
Total Shareholders’ Equity |
212,873 |
|
208,894 |
|
222,317 |
|
|
|
|
|
||||
|
Total Liabilities and Shareholders’ Equity |
$ 2,160,875 |
|
$ 2,193,137 |
|
$ 2,271,092 |
|
|
|
|
|
||||
| See Notes to Condensed 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 March 31
|
|||
|
|
2004 |
2003 |
||
|
Interest Income |
|
|
|
|
|
Interest-Bearing Due from Banks |
$ 20 |
|
$ 6 |
|
|
Federal Funds Sold |
— |
|
3 |
|
|
Securities Available for Sale |
2,179 |
|
2,043 |
|
|
Dividends on Other Investments |
344 |
|
338 |
|
|
Loans |
23,572 |
|
27,758 |
|
|
|
|
|||
|
Total Interest Income |
26,115 |
|
30,148 |
|
|
Interest Expense |
|
|
|
|
|
Deposits |
5,391 |
|
7,391 |
|
|
Short-Term Borrowings |
286 |
|
387 |
|
|
Federal Home Loan Bank Advances |
1,971 |
|
2,601 |
|
|
Subordinated Notes |
841 |
|
228 |
|
|
|
|
|||
|
Total Interest Expense |
8,489 |
|
10,607 |
|
|
|
|
|||
|
Net Interest Income |
17,626 |
|
19,541 |
|
|
Provision for Loan Losses |
3,000 |
|
6,237 |
|
|
|
|
|||
|
Net Interest Income After Provision for Loan Losses |
14,626 |
|
13,304 |
|
|
Non-Interest Income |
|
|
|
|
|
Deposit Charges |
4,117 |
|
4,011 |
|
|
Loan Servicing Income (Expense) |
(86 |
) |
(97 |
) |
|
Loan Fees |
679 |
|
589 |
|
|
Trust Fees |
876 |
|
726 |
|
|
Somerset Fees |
4,927 |
|
4,699 |
|
|
Investment Product Sales Commissions |
633 |
|
348 |
|
|
Sale of Loans |
2,657 |
|
2,473 |
|
|
Sale of Investment Securities |
280 |
|
7 |
|
|
Other |
715 |
|
1,163 |
|
|
|
|
|||
|
Total Non-Interest Income |
14,798 |
|
13,919 |
|
|
Non-Interest Expense |
|
|
|
|
|
Salaries and Benefits |
12,972 |
|
12,163 |
|
|
Net Occupancy |
1,230 |
|
1,149 |
|
|
Equipment |
1,621 |
|
1,673 |
|
|
Professional Services |
1,303 |
|
1,089 |
|
|
Marketing |
594 |
|
617 |
|
|
Telephone, Supplies, and Postage |
947 |
|
1,044 |
|
|
Other Intangible Asset Amortization |
180 |
|
184 |
|
|
Other |
2,058 |
|
1,840 |
|
|
|
|
|||
|
Total Non-Interest Expense |
20,905 |
|
19,759 |
|
|
|
|
|||
|
Earnings before Income Taxes |
8,519 |
|
7,464 |
|
|
Income Taxes |
3,113 |
|
2,736 |
|
|
|
|
|||
|
Net Earnings |
$ 5,406 |
|
$ 4,728 |
|
|
|
|
|||
|
Basic Earnings Per Share |
$ 0.35 |
|
$ 0.30 |
|
|
|
|
|||
|
Diluted Earnings Per Share |
$ 0.34 |
|
$ 0.30 |
|
|
|
|
|||
|
Dividends Per Common Share |
$ 0.165 |
|
$ 0.165 |
|
|
|
|
|||
| See Notes to Condensed Consolidated Financial Statements |
| 4 |
| Condensed Consolidated Statement of Shareholders’ Equity |
| First Indiana Corporation and Subsidiaries (Dollars in Thousands, Except Per Share Data) (Unaudited) |
| Common Stock
|
Capital
Surplus |
Retained
Earnings |
Accumulated
Other Comprehensive Income (Loss) |
Treasury
Stock |
Total Shareholders’ Equity |
|||||||||
| Shares
|
Amount
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2003 |
15,546,747 |
|
$ 175 |
|
$ 46,595 |
|
$ 185,012 |
|
$ 1,756 |
|
$ (24,644 |
) |
$ 208,894 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Earnings |
— |
|
— |
|
— |
|
5,406 |
|
— |
|
— |
|
5,406 |
|
|
Unrealized Loss on Securities Available for Sale of $835, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net of Income
Taxes and Reclassification Adjustment of $169, Net of Income Taxes |
— | — | — | — | (505 | ) | — | (505 | ) | |||||
|
|
||||||||||||||
|
Total Comprehensive Income |
|
|
|
|
|
|
|
|
|
|
|
|
4,901 |
|
|
Dividends on Common Stock - $0.165 per share |
— |
|
— |
|
— |
|
(2,578 |
) |
— |
|
— |
|
(2,578 |
) |
|
Exercise of Stock Options |
118,141 |
|
1 |
|
1,657 |
|
— |
|
— |
|
— |
|
1,658 |
|
|
Tax Benefit of Option Compensation |
— |
|
— |
|
123 |
|
— |
|
— |
|
— |
|
123 |
|
| Common Stock Issued under Restricted Stock Plans
- Net of Amortization |
— | — | — | 119 | — | — | 119 | |||||||
|
Common Stock Issued under Deferred Compensation Plan |
— |
|
— |
|
(14 |
) |
— |
|
— |
|
— |
|
(14 |
) |
|
Reissuance of Treasury Stock |
3,830 |
|
— |
|
49 |
|
— |
|
— |
|
25 |
|
74 |
|
|
Redemption of Common Stock |
(14,941) |
|
— |
|
(304 |
) |
— |
|
— |
|
— |
|
(304 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2004 |
15,653,777 |
|
$ 176 |
|
$ 48,106 |
|
$ 187,959 |
|
$ 1,251 |
|
$ (24,619 |
) |
$ 212,873 |
|
|
|
|
|
|
|
|
|
||||||||
| See Notes to Condensed Consolidated Financial Statements |
| 5 |
| Condensed Consolidated Statements of Cash Flows |
|
First Indiana Corporation and Subsidiaries (Dollars in Thousands, Except Per Share Data) (Unaudited) |
|
|
Three Months Ended March 31 |
|||
|
|
2004 |
2003 |
||
|
Cash Flows from Operating Activities |
|
|
|
|
|
Net Earnings |
$ 5,406 |
|
$ 4,728 |
|
|
Adjustments to Reconcile Net Earnings to Net Cash Provided by |
|
|
|
|
|
Operating Activities |
|
|
|
|
|
Gain on Sale of Assets, Net |
(2,937 |
) |
(2,480 |
) |
|
Amortization of Premium, Discount, and Intangibles, Net |
(409 |
) |
788 |
|
|
Depreciation and Amortization of Premises and Equipment |
870 |
|
629 |
|
|
Amortization of Net Deferred Loan Fees |
514 |
|
464 |
|
|
Provision for Loan Losses |
3,000 |
|
6,237 |
|
|
Origination of Loans Held For Sale, Net of Principal Collected |
(72,473 |
) |
(80,851 |
) |
|
Proceeds from Sale of Loans Held for Sale |
87,482 |
|
83,316 |
|
|
Tax Benefit of Option Compensation |
123 |
|
55 |
|
|
Change In: |
|
|
|
|
|
Accrued Interest Receivable |
751 |
|
1,153 |
|
|
Other Assets |
(3,760 |
) |
(6,476 |
) |
|
Accrued Interest Payable |
720 |
|
229 |
|
|
Other Liabilities |
3,777 |
|
(5,209 |
) |
|
|
|
|||
|
Net Cash Provided by Operating Activities |
23,064 |
|
2,583 |
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities |
|
|
|
|
|
Proceeds from Sale of Securities Available for Sale |
20,280 |
|
12,650 |
|
|
Proceeds from Maturities of Securities Available for Sale |
13,641 |
|
5,310 |
|
|
Purchase of Securities Available for Sale |
(30,000 |
) |
(10,000 |
) |
|
Purchase of Other Investments |
(291 |
) |
(136 |
) |
|
Principal Collected on Loans, Net of Originations |
63,901 |
|
53,481 |
|
|
Purchase of Loans |
(24,725 |
) |
(25,020 |
) |
|
Purchase of Premises and Equipment |
(436 |
) |
(3,237 |
) |
|
Acquisition of MetroBanCorp, Net of Cash Acquired |
(5 |
) |
15,738 |
|
|
Acquisition of Somerset, Net of Cash Acquired |
— |
|
(6 |
) |
|
Proceeds from Sale of Premises and Equipment |
— |
|
116 |
|
|
|
|
|||
|
Net Cash Provided by Investing Activities |
||||