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, 2003
OR
o
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 0-13270
Unizan Financial Corp.
(Exact name of registrant as specified in its charter)
| Ohio (State or other jurisdiction of incorporation or organization) |
34-1442295 (I.R.S. Employer Identification No.) |
220 Market Avenue South, Canton, Ohio 44702
(Address of principal executive
offices)
(Zip Code)
(330) 438-1118
(Registrant’s telephone number, including area
code)
(Former name, former address and former fiscal year, if changed since last report)
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 o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes
x No o
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.
| Class Common Stock, $1.00 Stated Value |
Outstanding as of April 30, 2003 21,615,792 |
INDEX
UNIZAN FINANCIAL CORP.
|
|
|
|
|
|
PAGE NO. |
|
|
|
|
|
|
|
| PART I. |
|
FINANCIAL INFORMATION |
| ||
|
|
|
|
|
|
|
|
|
|
Item 1. |
|
Financial Statements |
|
|
|
|
|
|
|
|
|
|
|
|
|
1 | |
|
|
|
|
|
|
|
|
|
|
|
|
2 | |
|
|
|
|
|
|
|
|
|
|
|
|
3 | |
|
|
|
|
|
|
|
|
|
|
|
|
4 | |
|
|
|
|
|
|
|
|
|
|
|
|
5-6 | |
|
|
|
|
|
|
|
|
|
|
Item 2. |
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
7-13 |
|
|
|
|
|
|
|
|
|
|
Item 3. |
|
14-15 | |
|
|
|
|
|
|
|
|
|
|
Item 4. |
|
15 | |
|
|
|
|
|
|
|
| PART II. |
|
OTHER INFORMATION |
| ||
|
|
|
|
|
|
|
|
|
|
16 | |||
|
|
|
|
|
|
|
|
|
|
Item 1. |
|
16 | |
|
|
|
Item 2. |
|
16 | |
|
|
|
Item 3. |
|
16 | |
|
|
|
Item 4. |
|
16 | |
|
|
|
Item 5. |
|
17 | |
|
|
|
Item 6. |
|
| |
|
|
|
|
|
(a) Exhibits on Item 601 of Regulation S-K |
17-18 |
| 18 | |
|
|
|
| 19-20 |
Unizan Financial Corp.
CONSOLIDATED BALANCE SHEETS
| (In thousands except per share data) |
|
March 31, |
|
December 31, |
| ||
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ASSETS |
|
$ |
77,895 |
|
$ |
70,082 |
|
| Cash and cash equivalents |
|
|
3,800 |
|
|
9,250 |
|
| Federal Funds Sold |
|
|
189 |
|
|
835 |
|
| Interest bearing deposits with banks |
|
|
|
|
|
|
|
| Securities held-to-maturity, (Fair value: $4,862 and $5,529, respectively) |
|
|
4,636 |
|
|
5,257 |
|
| Securities available-for-sale, at fair value |
|
|
516,949 |
|
|
446,301 |
|
| Federal Home Loan Bank stock, at cost |
|
|
33,691 |
|
|
33,362 |
|
| Loans originated and held for sale |
|
|
17,660 |
|
|
24,067 |
|
| Loans: |
|
|
|
|
|
|
|
| Commercial, financial and agricultural |
|
|
265,945 |
|
|
246,116 |
|
| Aircraft |
|
|
130,122 |
|
|
131,601 |
|
| Commercial real estate |
|
|
638,494 |
|
|
627,386 |
|
| Residential real estate |
|
|
480,510 |
|
|
473,180 |
|
| Consumer |
|
|
442,563 |
|
|
428,091 |
|
|
|
|
|
|
|
|
|
|
| Total loans |
|
|
1,957,634 |
|
|
1,906,374 |
|
| Less allowance for loan losses |
|
|
(25,281 |
) |
|
(25,271 |
) |
|
|
|
|
|
|
|
|
|
| Net loans |
|
|
1,932,353 |
|
|
1,881,103 |
|
| Premises and equipment, net |
|
|
27,025 |
|
|
26,937 |
|
| Goodwill |
|
|
91,971 |
|
|
92,055 |
|
| Other intangible assets |
|
|
21,190 |
|
|
22,048 |
|
| Accrued interest receivable and other assets |
|
|
77,373 |
|
|
80,605 |
|
|
|
|
|
|
|
|
|
|
| Total Assets |
|
$ |
2,804,732 |
|
$ |
2,691,902 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES |
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
| Noninterest bearing deposits |
|
$ |
192,318 |
|
$ |
196,194 |
|
| Interest bearing deposits |
|
|
1,825,635 |
|
|
1,735,421 |
|
|
|
|
|
|
|
|
|
|
| Total deposits |
|
|
2,017,953 |
|
|
1,931,615 |
|
| Short-term borrowings |
|
|
82,889 |
|
|
58,714 |
|
| Other borrowings |
|
|
352,842 |
|
|
331,911 |
|
| Company obligated mandatorily redeemable trust preferred |
|
|
20,000 |
|
|
20,000 |
|
| Accrued taxes, expenses and other liabilities |
|
|
33,300 |
|
|
45,372 |
|
|
|
|
|
|
|
|
|
|
| Total Liabilities |
|
|
2,506,984 |
|
|
2,387,612 |
|
|
|
|
|
|
|
|
|
|
| SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
| Common stock ($1.00 stated value, 100,000,000 shares authorized and 22,123,069 shares issued) |
|
|
22,123 |
|
|
22,123 |
|
| Paid-in capital |
|
|
221,288 |
|
|
222,458 |
|
| Retained earnings |
|
|
67,608 |
|
|
63,487 |
|
| Stock held by deferred compensation plan, 89,418 and 87,234 shares at cost |
|
|
(1,394 |
) |
|
(1,362 |
) |
| Treasury stock, 508,949 and 52,693 shares at cost |
|
|
(10,479 |
) |
|
(1,118 |
) |
| Accumulated other comprehensive income |
|
|
(1,398 |
) |
|
(1,298 |
) |
|
|
|
|
|
|
|
|
|
| Total Shareholders’ Equity |
|
|
297,748 |
|
|
304,290 |
|
|
|
|
|
|
|
|
|
|
| Total Liabilities and Shareholders’ Equity |
|
$ |
2,804,732 |
|
$ |
2,691,902 |
|
|
|
|
|
|
|
|
|
|
See Notes to the Consolidated Financial Statements
1
Unizan Financial Corp.
CONSOLIDATED STATEMENTS OF INCOME
| (In thousands except per share data) |
|
Three Months Ended |
| ||||
|
|
|
|
| ||||
|
|
|
2003 |
|
2002 |
| ||
|
|
|
|
|
|
| ||
| Interest income: |
|
|
|
|
|
|
|
| Interest and fees on loans: |
|
|
|
|
|
|
|
| Taxable |
|
$ |
31,355 |
|
$ |
23,646 |
|
| Tax exempt |
|
|
42 |
|
|
25 |
|
| Interest and dividends on securities |
|
|
|
|
|
|
|
| Taxable |
|
|
5,516 |
|
|
4,902 |
|
| Tax exempt |
|
|
418 |
|
|
354 |
|
| Interest on bank deposits and federal funds sold |
|
|
9 |
|
|
23 |
|
|
|
|
|
|
|
|
|
|
| Total interest income |
|
|
37,340 |
|
|
28,950 |
|
|
|
|
|
|
|
|
|
|
| Interest expense: |
|
|
|
|
|
|
|
| Interest on deposits |
|
|
11,051 |
|
|
10,161 |
|
| Interest on company obligated mandatorily redeemable trust preferred |
|
|
505 |
|
|
505 |
|
| Interest on borrowings |
|
|
4,493 |
|
|
3,966 |
|
|
|
|
|
|
|
|
|
|
| Total interest expense |
|
|
16,049 |
|
|
14,632 |
|
|
|
|
|
|
|
|
|
|
| Net interest income |
|
|
21,291 |
|
|
14,318 |
|
| Provision for loan losses |
|
|
1,269 |
|
|
5,587 |
|
|
|
|
|
|
|
|
|
|
| Net interest income after provision for loan losses |
|
|
20,022 |
|
|
8,731 |
|
| Other income: |
|
|
|
|
|
|
|
| Trust and financial planning income |
|
|
1,712 |
|
|
1,248 |
|
| Customer service fees |
|
|
1,553 |
|
|
872 |
|
| Gains on sale of loans |
|
|
2,130 |
|
|
784 |
|
| Other operating income |
|
|
1,557 |
|
|
1,221 |
|
|
|
|
|
|
|
|
|
|
| Total other income |
|
|
6,952 |
|
|
4,125 |
|
|
|
|
|
|
|
|
|
|
| Other expenses: |
|
|
|
|
|
|
|
| Salaries, wages, pension and benefits |
|
|
8,932 |
|
|
6,893 |
|
| Occupancy expense |
|
|
911 |
|
|
592 |
|
| Furniture and equipment expense |
|
|
558 |
|
|
334 |
|
| Taxes other than income taxes |
|
|
517 |
|
|
1,243 |
|
| Other intangible amortization expense |
|
|
858 |
|
|
110 |
|
| Other operating expense |
|
|
4,934 |
|
|
3,977 |
|
|
|
|
|
|
|
|
|
|
| Total other expenses |
|
|
16,710 |
|
|
13,149 |
|
|
|
|
|
|
|
|
|
|
| Income before income taxes and cumulative effect of change in accounting principles |
|
|
10,264 |
|
|
(293 |
) |
| Provision for income taxes |
|
|
3,228 |
|
|
(433 |
) |
|
|
|
|
|
|
|
|
|
| Income before cumulative effect of change in accounting principles |
|
|
7,036 |
|
|
140 |
|
| Accounting method change - Adoption of FAS 142 |
|
|
— |
|
|
(1,392 |
) |
|
|
|
|
|
|
|
|
|
| Net income/(loss) |
|
$ |
|||||