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The Annual Meeting of Stockholders
will be held at 3 p.m.
on Tuesday, March 18, 2003
at the Lincoln Center office of
Minotola National Bank,
1748 South Lincoln Avenue,
Vineland, New Jersey
John B. Morello, Chairman
Michael D. Capizola, Vice Chairman
Judith Morello Browne
Dennis W. DiLazzero
Michael A. Morello
William R. Plick
Edith M. Taylor
Standing, left to right: Michael A. Morello; Dennis W. DiLazzero; William R. Plick
Seated: Judith Morello Browne; Michael D. Capizola, Vice Chairman;
John B. Morello, Chairman; Edith M. Taylor
We invite you to join us in celebrating Minotola National Bank’s
90th year in business. Turn the pages with us as we document
our history, report our current performance, and take a quick
glimpse at our plans for the future.
The year was 1913. Woodrow Wilson was President;
an average three-bedroom home cost $2,625 and
Congress passed the Federal Reserve Act, which
marked the beginning of our national banking system.
A MODEST BEGINNING
First National Bank of Minotola, circa 1913
In September of that year First National Bank of
Minotola, with four employees and $5,019.92 in
initial deposits, opened for business at the corner of
Central and Atlantic Avenues, Minotola, New Jersey.
During the early days, select national banks were
authorized to issue currency that reflected the
name of the bank on the face of the bill.
Contrary to common belief, the initial stockholders
were not native to the greater Vineland area. It wasn’t
until 1917 when then Atlantic County Sheriff James
Cimino began acquiring stock from the original
investors. He was eventually joined by Michael
Capizola, Charles F. Riddle, Daniel D. Conway,
Samuel Santagata, Fred Leonelli, and a host of
other local investors. By 1927, transition from
the original investors to local ownership and
management was complete.
2
WEATHERING THE DEPRESSION
The 1929 stock market crash marked the beginning of
the Great Depression. Much of the nation was in a panic,
withdrawing their savings from institutions across the country.
The First National Bank of Minotola weathered the storm
by allowing depositors to withdraw cash as they wished.
Within several weeks much of the money was re-deposited.
In 1930, The First National Bank of Minotola began paying its
first of a long string of consecutive dividends. A decade later,
the Bank’s assets had grown to over $700,000.
DOING OUR PART: THE WAR YEARS
A group of people outside a bank
during the Great Depression.
The Bank had survived the Great Depression only to meet
a new challenge, World War II, the greatest war of all time.
While the U.S. military battled across the globe, the First National
Bank of Minotola assisted in the war effort by selling war bonds
and providing funding for the farmers and local industries that
supported the war effort. The Bank continued to grow, increasing
deposits to more than $4.5 million by 1946.
3
BOARD OF DIRECTORS:
THE CHANGING OF THE GUARD
First National Bank of Minotola, circa 1950
It was now the early 50’s; James Cimino, President,
and Michael Capizola, Cashier, had successfully
guided the bank since 1927. It was time for the
second generation of the Cimino/Conway and
Capizola families to join the Bank’s management
team. In 1954 John B. Morello and Daniel Pantaleo
joined Cimino, Capizola, Charles F. Riddle and
Samuel Santagata as directors of the Bank. One year
later, in 1955, George J. Karibjanian joined the board
and in 1966 Michael D. Capizola, Esq., joined the
board, completing the cycle.
THE 60S AND 70S:
DECADES OF GROWTH
Responding to growth in Vineland and Cumberland
County, the First National Bank of Minotola
prepared to expand its operations. When legislation
restricting the expansion of banks was repealed,
the Bank opened its first branch office at the corner
of Landis Avenue and Union Road in East Vineland
in 1962. Just a decade later, with assets totaling
$21 million, a second branch opened on Wheat Road
in Vineland. In 1974, the institution changed its
name to Minotola National Bank and moved into its
new main office on Lincoln Avenue. By 1977, assets
had grown to almost $32 million. Highly regarded for
its financial strength and quality customer service,
Minotola National Bank closed out the 70s with
more than $39 million in total assets.
Groundbreaking Ceremony, left to right:
John B. Morello, Vice President; Michael Capizola, President;
John Fletcher, Architect; George Karibjanian, Director
4
TUMULTUOUS TIMES:
THE 80S AND 90S
Around the country the failures of many Savings
and Loans haunted the banking industry. Nearly
500 institutions failed in 10 years, including banks
in Hammonton and Vineland, leaving Minotola
National Bank with a golden opportunity to expand.
By focusing on building strong internal management
and operations, new President Dennis DiLazzero
prepared the Bank for its latest growth movement.
In the 90s, computer technology transformed
the banking industry into a 24-hour business.
Minotola National Bank embraced the emerging
services, installing ATMs, computerized teller
stations, telephone banking and online banking.
These products cemented Minotola National Bank’s
position as a local leader in banking services by
allowing customers to have easier access and
more control over their finances.
Minotola Office
The 90s was a time of expansion into new
markets. To take advantage of the rapid growth
throughout Southern New Jersey, the Bank
opened new branches in both Glassboro
and Linwood.
Glassboro Office
Wheat Road Office, Vineland
5
Throughout its history, Minotola National Bank has
surveyed the local landscape to identify opportunities to
better serve the needs of its customers. In keeping with
that tradition, the Bank formed two successful subsidiaries
to provide effective new services to their customers.
CENTRAL ATLANTIC LEASING
Central Atlantic Leasing is a leader in providing
value, personalized service and leasing experience
for commercial and municipal clients. Equipment
leasing is available for all industries — agriculture,
technical, food service, utilities, municipalities,
school districts, medical/dental, trucking and more.
Louis L. Petrini, President
Craig DeGenova, Assistant Vice President
MINOTOLA MERCHANT SERVICES
The Minotola National Bank Merchant Services
is a leader in enabling merchants of all sizes to
use advanced payment processing systems.
This service helps merchants to increase sales and
improve their bottom line utilizing a wide range of
payment processing products that are supported
by exemplary customer service, comprehensive
training and a toll-free service hotline.
Michael C. Capizola, Assistant Vice President
Robert Baldissero, Vice President
6
Minotola National Bank currently has 11 branches
and three loan centers serving Cumberland, Atlantic
and Gloucester Counties, and the $5,019.92 in initial
deposits has grown to over $550 million.
Now celebrating its 90th year, the Bank employs
more than 200 professionals, all dedicated to meeting
the personal and business banking needs of its
communities.
Today, while continuing to offer innovative technology
and effective products, Minotola National Bank still
recognizes its employees as the company’s true
source of strength. “A review of the Bank’s history is
not complete without giving due credit to the long
line of excellent and loyal employees who are
responsible for our successes,” said Dennis DiLazzero,
President of Minotola National Bank. “Many of our
employees have been with us for greater than 20
years. We are extremely proud of our people, their
abilities and their consistently excellent performance.”
Chestnut Avenue Office, Vineland
Minotola National Bank professionals who have been dedicated to serving the community for over ten years.
Front Row (l to r): J. Dafcik, A. Ravelli, W. Plick, E. Taylor, M. Capizola, J. Morello, J. Morello Browne, D. DiLazzero, P. Perry, L. Sikking, R. Baldissero;
Row 2: M. Sanchez, K. Waugh, C. Ingraham, M. Baker, D. Bartholomew, M. Harkins, D. McCauley, D. Zemanik, B. Roman, M. Lopez-Rodriguez, K. Castellini;
Row 3: G. Cafiso, G. Coia, R. Hutchinson, C. Rambone, J. Rosmini, A. Garton, R. Tetz, F. Haserick, C. Nekrasz, T. Fifer, M. Venuto, M. Romanik;
Row 4: M. DeFeo, J. Nightlinger, J. Allen, J. Nash, D. Collinge, D. Schmidt, M. Golway, L. Dellorifice, V. Webster, R. Kastorsky, D. Marciano, D. Gallo;
Back Row: P. Castellini, J. Sparks, R. Kauffman, L. Montressor, A. Wargo, R. Coccaro, J. Matos, K. Santagata, M. Alvarado, A. D’Alessandro
7
Left to right:
Rosana Kastorsky, Branch Manager
Maria Alvarado, Teller Supervisor
Standing, left to right:
John A. O’Connor, Senior Vice President
William R. Plick, Executive Vice President
Seated: Dennis W. DiLazzero, President
“We are extremely proud
of our people, their abilities and their
consistently excellent performance.”
Linwood team, left to right:
Anthony Mortellite, Vice President
George Morgan, Assistant Vice President
Patricia Miller, Branch Manager
Joseph Ciapanna, Lending Associate
8
Glassboro team, left to right:
Louis L. Petrini, Regional Vice President
Michael A. Milano, Assistant Vice President
Tracy Kozlowski, Loan Officer
Minotola National Bank takes pride in serving its communities
by contributing to civic, youth, health, religious and support
organizations. Employees of the bank are active on boards and
committees for important organizations throughout the region
including Southern New Jersey Council of Boy Scouts, American Cancer Society,
the American Red Cross, Rowan University, Cumberland County College,
Kessler Hospital, Lions Clubs, Rotary Clubs and the Salvation Army.
AWARDS
In addition to its prominent standing in the South Jersey
community, Minotola National Bank is often recognized by
the financial community for superior stability and strength:
䡲 VERIBANC BLUE RIBBON BANK
The country’s oldest award for banks, the Veribanc Blue Ribbon
Bank Commendation of Excellence has been awarded to
Minotola National Bank for 27 consecutive quarters.
䡲 BAUER FINANCIAL
Minotola National Bank has been awarded Bauer’s highest rating
— a five-star rating — 29 consecutive times since December 1995.
䡲 ONE OF THE NATION’S TOP LENDERS – 1995
Minotola National Bank was named one of nation’s top
lenders by the U.S. Small Business Administration in the
first-ever study Small Business Lending in the United States.
The report identified Minotola National Bank as the only
bank in Vineland and Hammonton to qualify as a top
performer in small business lending.
䡲 THE NEW JERSEY HOUSING AND MORTGAGE
FINANCE AGENCY AWARD IN 1998
Highest Percentage of Quality Mortgage Packages
䡲 THE NEW JERSEY HOUSING AND MORTGAGE
FINANCE AGENCY AWARD IN 1998
Outstanding Service to First Time Home Buyers
䡲 VINELAND CHAMBER OF COMMERCE
“LARGE BUSINESS OF THE YEAR” 1998
Financing from Minotola National Bank helped Nick George Construction
make Lakeside Estates in Egg Harbor Township a reality.
9
Fostering Economic Growth
in Our Expanding Service Area
Jerry Villecco, President/Owner of
Glassboro Lumber, meets with
Bank officials Tracy Kozlowski, Loan
Officer, and Michael A. Milano,
Assistant Vice President.
Minotola National Bank
provided the financing to make
the long-awaited parking lot
at Atlantic City International
Airport a reality.
financed improvements to help
establish Mays Landing
Golf and Country Club as
one of the area’s premiere golf
and banquet facilities.
10
Minotola National Bank teamed up with Vineland
Ice Arena to provide financing for a state-of-the-art
ice skating facility for South Jersey. Left to right:
Andrew G. Berenato, Jr., Co-Owner; Louis L. Petrini,
Regional Vice President.
Matt Blatt Auto Sales received financing
from Minotola National Bank to construct
a Suzuki showroom in Vineland.
Bridgeton-based Sheppard
Bus Company, financed in part
by Minotola National Bank,
serves school districts throughout
South Jersey. Left to right:
John Sheppard, Principal; Todd
R. Sciore, Assistant Vice President;
Fred Angelo, Vice President.
Minotola National Bank financed the construction
of this brand new Best Western Hotel located
just minutes from Atlantic City.
11
TO OUR STOCKHOLDERS, CUSTOMERS AND FRIENDS
The Directors, officers and employees of Minotola National Bank are proud of the Bank’s performance in
2002. In a year marked by recession, geopolitical tension and an unprecedented drop in interest rates,
we were able to generate record earnings, increase our dividends paid and preserve the safety and
soundness of the Bank’s loan and investment portfolios.
With consolidated after-tax income of $8,044,000, or $158 per share, 2002 was the most profitable year in
the Bank’s history. Declared dividends of $37.50 per share were up approximately 6% over the prior year
and up 56% over the past five years. During the same five-year period, the book value of our stock
increased 72%, or $580, to $1,387 per share. Total assets at December 31, 2002, were $554,558,000, a 7%
increase over the previous year.
Because of the historically low interest rates, our Fixed Rate Mortgage Department has provided more
customers than ever before with the opportunity to buy, build or refinance their home. At the same time,
net leases held by our wholly owned leasing subsidiary, Central Atlantic Leasing, grew an impressive
35%. Both divisions made positive contributions to our overall bottom line.
The year 2002 was a year of preparation and planning for the future. Our bank’s original slogan, “People,
Purpose, Progress” has evolved to our new slogan, “Expect More.” You can expect more because you truly
get more at Minotola National Bank. This theme is best exemplified in our Masters Club program. The
already popular Masters Club was updated and expanded in 2002 to include a much larger segment of
our deposit base, benefiting both the customer and the Bank.
We’ve taken major steps in 2002 to further expand and improve customer service and delivery channels.
The initial groundwork has been laid to offer improved product and service delivery through image
technology and the use of a wide area network. Our customers will begin to experience the benefits of
this new technology early in 2003.
We enter 2003, our 90th year in business, pleased with our past performance. And, we remain firmly
committed to use all of our human and technological resources to continue to provide our customers
with the best products and services available.
John B. Morello
Chairman
12
2002 Financial Report
Dennis W. DiLazzero
President
MANAGEMENT REPORT
Minotola National Bank (the “Bank”) is responsible for the preparation, integrity and fair presentation of
its published consolidated financial statements as of December 31, 2002, and the year then ended. The
financial statements have been prepared in accordance with accounting principles generally accepted in
the United States of America, and as such, include amounts, some of which are based on judgments and
estimates of management.
Management of the Bank is responsible for establishing and maintaining effective internal control over
financial reporting presented in conformity with accounting principles generally accepted in the United
States of America. This internal control contains monitoring mechanisms, and actions are taken to
correct deficiencies identified.
There are inherent limitations in the effectiveness of any internal control, including the possibility of
human error and the circumvention or overriding of controls. Accordingly, even effective internal controls
can provide only reasonable assurance with respect to financial statement preparation. Further, because
of changes in conditions, the effectiveness of internal control may vary over time.
Management assessed the Bank’s internal control over financial reporting presented in conformity with
accounting principles generally accepted in the United States of America as of December 31, 2002. This
assessment was based on criteria for effective internal control over financial reporting described in
Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on this assessment, management believes that, as of December 31, 2002,
Minotola National Bank maintained effective internal control over financial reporting presented in
conformity with accounting principles generally accepted in the United States of America.
Management is also responsible for compliance with the federal and state laws and regulations
concerning dividend restrictions and federal laws and regulations concerning loans to insiders
designated by the Federal Deposit Insurance Corporation as safety and soundness laws and regulations.
Management assessed its compliance with the designated laws and regulations relating to safety and
soundness. Based on this assessment, management believes that Minotola National Bank complied, in
all significant respects, with the designated laws and regulations relating to safety and soundness for the
year ended December 31, 2002.
Dennis W. DiLazzero
President
Ava Wargo
Chief Financial Officer
13
INDEPENDENT AUDITOR’S REPORT
The Board of Directors
Minotola National Bank:
We have examined management’s assertion, included in the accompanying Management Report, that
Minotola National Bank and subsidiaries (the “Bank”) maintained effective internal control over financial
reporting presented in conformity with both accounting principles generally accepted in the United
States of America, including controls over the safeguarding of assets, as of December 31, 2002, based on
criteria for effective internal control over financial reporting described in Internal Control — Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The
Bank’s management is responsible for maintaining effective internal control over financial reporting. Our
responsibility is to express an opinion on management’s assertion based on our examination.
Our examination was made in accordance with attestation standards established by the American
Institute of Certified Public Accountants and, accordingly, included obtaining an understanding of the
internal control over financial reporting, testing and evaluating the design and operating effectiveness of
the internal control, and performing such other procedures as we considered necessary in the
circumstances. We believe that our examination provides a reasonable basis for our opinion.
Because of inherent limitations in any internal control, misstatements due to error or fraud may occur
and not be detected. Also, projections of any evaluation of the internal control over financial reporting to
future periods are subject to the risk that the internal control may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, management’s assertion that Minotola National Bank maintained effective internal
control over financial reporting presented in conformity with accounting principles generally accepted in
the United States of America as of December 31, 2002, is fairly stated, in all material respects, based on
criteria for effective internal control over financial reporting described in Internal Control — Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Philadelphia, Pennsylvania
January 31, 2003
14
INDEPENDENT AUDITOR’S REPORT
The Board of Directors
Minotola National Bank:
We have audited the accompanying consolidated balance sheet of Minotola National Bank and
subsidiaries as of December 31, 2002, and the related consolidated statements of income, stockholders’
equity and cash flows for the year then ended. These consolidated financial statements are the
responsibility of the Bank’s management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. The consolidated financial statements of
Minotola National Bank as of December 31, 2001, were audited by other auditors who have ceased
operations. These auditors expressed an unqualified opinion on those financial statements in their
report dated February 1, 2002.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audit and the
report of the other auditors provide a reasonable basis for our opinion.
In our opinion, the 2002 consolidated financial statements referred to above present fairly, in all material
respects, the financial position of Minotola National Bank and subsidiaries as of December 31, 2002, and
the results of its consolidated operations and its cash flows for the year then ended in conformity with
accounting principles generally accepted in the United States of America.
Philadelphia, Pennsylvania
January 31, 2003
15
C ONSOLIDATED B ALANCE S HEETS
2002
As of December 31 (In thousands, except per share data)
ASSETS
Cash and due from banks
Interest-bearing deposits with other depository institutions
Federal funds sold
Cash And Cash Equivalents
Investment securities available for sale, at fair value
(cost: 2002–$90,000; 2001–$61,341)
Investment securities held to maturity, at cost
(fair value: 2002–$9,128; 2001–$12,046)
Loans, net
(loan loss reserves: 2002–$5,207; 2001–$4,953)
Premises and equipment, net
Accrued interest receivable
Deferred taxes and other assets
(deferred taxes: 2002–$1,820; 2001–$1,047)
Total Assets
LIABILITIES
Noninterest-bearing deposits
Interest-bearing deposits
Total Deposits
Federal funds purchased and other borrowed funds
Accrued interest payable
Accrued expenses and other liabilities
Total Liabilities
STOCKHOLDERS’ EQUITY
Common Stock, par value $70 per share;
authorized 52,000 shares; issued and outstanding:
2002–50,830 shares; 2001–50,730 shares
Additional paid-in capital
Accumulated other comprehensive income, net of taxes
Retained earnings
Total Stockholders’ Equity
Total Liabilities And Stockholders’ Equity
See notes to consolidated financial statements
16
$
$
$
$
19,032
3
11,665
30,700
2001
$
18,059
614
18,673
92,354
62,426
8,703
11,697
402,618
12,302
2,690
404,833
11,533
2,528
5,191
554,558
5,080
516,770
100,156
378,176
478,332
$
$
731
4,996
484,059
89,349
344,816
434,165
13,900
829
4,478
453,372
3,558
1,083
1,554
64,304
70,499
554,558
3,551
966
716
58,165
63,398
516,770
$
C O N S O L I D AT E D S TAT E M E N T S O F I N C O M E
2002
For the years ended December 31 (In thousands, except per share data)
INTEREST INCOME
Loans
Investment securities, taxable
Investment securities, exempt from federal income tax
Federal funds sold and other
Total Interest Income
$
INTEREST EXPENSE
Deposits
Federal funds purchased and other
Total Interest Expense
Net Interest Income
Provision for loan losses
Net Interest Income After Provision For Loan Losses
OTHER INCOME
Merchant services fees
Service fees
Other
Total Other Income
OTHER EXPENSES
Salaries and wages
Employee benefits
Occupancy and equipment expenses
Net realized losses on sale of securities
Other operating expenses
Total Other Expenses
Income Before Income Taxes
Provision for income taxes
Net Income
$
Earnings Per Common Share
Weighted Average Shares Outstanding
$
29,575
3,912
120
274
33,881
2001
$
31,975
4,706
125
271
37,077
8,606
38
8,644
13,347
132
13,479
25,237
300
24,937
23,598
400
23,198
4,025
1,345
1,103
6,473
4,810
1,388
948
7,146
8,516
2,114
2,705
163
5,709
19,207
12,203
7,522
1,865
2,437
51
6,409
18,284
12,060
4,159
8,044
4,123
7,937
158.45
50,765
$
$
156.64
50,669
17
C ONSOLIDATED S TATEMENTS O F S TOCKHOLDERS ’ E QUITY
Accumulated
Additional
Other
Common
Paid-in
Comprehensive
Stock
Capital
Income/(Loss)
(In thousands, except per share data)
Balance at December 31, 2000
$
Net income
Change in unrealized gains
on available for sale securities,
net of taxes
Total comprehensive income
Issuance of common stock
(85 shares)
Cash dividends
($35.50 per share)
$
878
$
$
52,027
$
6
$
3,551
1,046
8,983
88
$
966
94
$
716
$
(1,799)
58,165
$
8,044
838
8,882
117
124
(1,905)
$
3,558
$
1,083
(1,799)
63,398
8,044
838
7
56,120
7,937
1,046
$
18
(330)
7,937
Net income
Change in unrealized gains
on available for sale securities
net of taxes
Total comprehensive income
(100 shares)
Cash dividends
($37.50 per share)
3,545
Total
Retained Stockholders’
Earnings
Equity
1,554
$
64,304
(1,905)
$
70,499
C O N S O L I D A T E D S TA T E M E N T S O F C A S H F L O W S
2002
For the years ended December 31 (In thousands, except per share data)
OPERATING ACTIVITIES
Net income
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses
Depreciation and amortization
(Increase)decrease in accrued interest receivable
Increase in other assets
Decrease in accrued interest payable
Increase(decrease) in other liabilities
Net Cash Provided By Operating Activities
$
8,044
2001
$
7,937
300
1,366
(162)
(886)
(98)
518
9,082
400
1,309
127
(1,413)
(655)
(1,081)
6,624
INVESTING ACTIVITIES
Purchase of available for sale investment securities
Sales and maturities of available for sale investment securities
Maturities and calls of held to maturity investment securities
Net decrease(increase) in loans
Purchases of premises and equipment
Sales of premises and equipment and other real estate
Net Cash Used By Investing Activities
(66,909)
37,879
2,980
1,915
(1,739)
333
(25,541)
(27,520)
37,793
5,911
(44,321)
(3,168)
374
(30,931)
FINANCING ACTIVITIES
Net increase in noninterest-bearing deposits
Net increase interest-bearing deposits
Net (decrease)increase in federal funds purchased and other
Dividends paid
Net Cash Provided By Financing Activities
10,807
33,360
(13,900)
(1,905)
124
28,486
3,188
14,361
12,065
(1,799)
94
27,909
Net Increase In Cash And Cash Equivalents
12,027
3,602
Cash and cash equivalents at beginning of year
Cash And Cash Equivalents At End Of Year
$
18,673
30,700
$
15,071
18,673
SUPPLEMENTAL CASH FLOW DISCLOSURES
Cash paid during the year for:
Interest on deposits and borrowed funds
Income taxes
$
$
8,740
4,796
$
$
13,995
4,375
19
N O T E S T O C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
1. ACCOUNTING POLICIES
Nature Of Operations
Minotola National Bank (the “Bank”) was organized in 1913 as a nationally chartered commercial bank.
The Bank provides a full range of banking services to individual and corporate customers in a competitive
southern New Jersey environment. Minotola National Bank is regulated by various federal agencies and
is subject to periodic examination by those regulatory authorities.
Basis Of Financial Statement Presentation And Accounting Estimates
The consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America and include the accounts of Minotola National Bank
and its wholly owned subsidiaries, Lincoln Investment Company, Central Atlantic Leasing Corporation,
and Central Atlantic Merchant Services, Inc. All intercompany balances and transactions have been
eliminated in consolidation.
The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of the date of the financial statements and the reported
amounts of revenue and expenses for the reporting period. Actual results could differ from those
estimates. Certain prior year amounts have been reclassified to conform to current year financial
statement presentation.
Investment Securities
Debt securities are classified as held to maturity when the Bank has the positive intent and ability to
hold the securities to maturity and are stated at amortized cost adjusted for amortization of premiums
and accretion of discounts. Debt securities not classified as held to maturity are classified as available
for sale, and are carried at fair value with unrealized gains and losses and temporary declines in value
included in stockholders equity, net of taxes. Amortization and accretion, and interest and dividends, are
included in interest income from investments. The cost of securities sold is based on the specific
identification method. Realized gains and losses, and declines in value judged to be other-thantemporary, are included in net income as net gains or losses on sales of securities.
Loans
Loans are stated at the amount of unpaid principal, reduced by unearned discount and fees and a
reserve for loan losses. Unearned interest on discounted loans is amortized to income over the life of the
loans, using the interest method. For all other loans, interest is accrued on the outstanding principal
balance and credited to operating income. Accrual of interest is generally discontinued when the
collection of interest payments is doubtful. Once identified as a nonaccrual loan, the loan is not returned
to accrual status until interest is received on a current basis and the other factors indicating doubtful
collection cease to exist. When interest accruals are discontinued, interest credited to income in the
current year is reversed, and interest accrued in the prior year is charged to the reserve for possible loan
losses.
20
Reserve For Loan Losses
The reserve for loan losses is maintained at a level that management considers adequate to provide for
known and inherent losses, based upon an evaluation of various risks in the loan portfolio that includes
an analysis of the composition of the portfolio, past loss experience, current economic conditions and
other relevant factors. While management uses the best information available to make evaluations, such
evaluations are highly subjective and future adjustments to the reserve may be necessary if conditions
differ substantially from the assumptions used in making the evaluations. In addition, federal agencies,
as an integral part of their examination process, periodically review the Bank’s reserve for loan losses.
Such agencies may require the Bank to recognize additions to the reserve, based on their judgments
about information available to them at the time of their examination. The reserve is increased by the
provision for loan losses, which is charged to operations. Loan losses are charged directly against, and
recoveries on previously charged-off loans are added to, the reserve.
Premises And Equipment
Premises and equipment are stated at cost less accumulated depreciation. Depreciation expense is
computed using the straight-line method based on the estimated useful lives of the assets. Leasehold
improvements are carried at cost less accumulated amortization calculated using the straight-line
method over the terms of the leases or the estimated useful lives of the assets, if shorter. The estimated
useful lives are:
Buildings
Furniture, fixtures and equipment
Leasehold improvements
15 to 40 years
5 to 15 years
3 to 10 years
Major renewals and betterments are capitalized as part of the asset. Expenditures for maintenance and
repairs are charged to operations as incurred.
Other Real Estate
Other real estate includes properties acquired through foreclosure or other proceedings and are initially
recorded at the lower of the related loan balance or estimated fair value of the collateral at the date
acquired. Thereafter, these assets are valued at the lower of the amount recorded at the date acquired or
the then current market value. Market values are primarily estimated based upon appraisals. Balances of
$70,000 and $371,000 at December 31, 2002 and 2001, respectively, are included in other assets in the
consolidated balance sheets.
Loan Servicing
The Bank generally retains the right to service mortgage loans sold to others. The cost allocated to the
mortgage servicing rights retained is recognized as a separate asset and is amortized in proportion to,
and over the period of, estimated net servicing income. The mortgage servicing rights asset is
periodically assessed for impairment, based upon risk characteristics of the underlying loans. The
amount of impairment recognized, if any, is the amount by which the capitalized mortgage servicing
rights exceed their fair value. Fair values are estimated using discounted cash flows based on current
market rates of interest.
21
Income Taxes
The Bank uses the liability method of accounting for income taxes. Under this method, deferred tax
assets and liabilities are determined based on differences between financial reporting and tax bases of
assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when
the differences are expected to reverse.
Stock Bonus Plan
At December 31, 2002, the Bank has 1,170 shares of common stock available for issuance under an
employee compensation plan. One hundred shares and eighty-five shares were issued in 2002 and 2001,
respectively. Related compensation expense charged to operations was $124,000 and $94,000 in 2002
and 2001, respectively.
Interest Rate Risk
The Bank is engaged principally in providing first mortgage loans to commercial enterprises. At
December 31, 2002, a majority of the Bank’s assets are assets that earn interest at adjustable interest
rates. Those assets were funded primarily with short-term liabilities that have interest rates that vary with
market rates over time. Generally, an interest rate sensitivity imbalance exists. For this reason,
management regularly monitors the maturity structure of the Bank’s assets and liabilities in order to
measure its level of interest rate risk and to plan for future volatility.
Fair Values Of Financial Instruments
Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standard (SFAS) No.
107, “Disclosures About Fair Values of Financial Instruments,” requires disclosure of fair value
information about financial instruments, where practicable, whether or not recognized in the balance
sheet. In cases where quoted market prices are not available, fair values are estimated using present
value or other valuation techniques. Accordingly, the aggregate fair value amounts presented do not
represent the underlying value of the Bank.
The following methods and assumptions were used by the Bank in estimating the fair value of its
financial instruments:
Cash and cash equivalents: The carrying amounts reported in the balance sheet for cash and short-term
instruments approximate their fair values.
Investment securities: Fair values for investment securities are based on quoted market prices, where
available. If quoted market prices are not available, fair values are based on quoted market prices of
comparable instruments.
Loans: For variable-rate loans that reprice frequently and with no significant change in credit risk, fair
values approximate carrying values. The fair values of other loans and leases are estimated using
discounted cash flow analyses, using interest rates currently being offered for loans and leases with
similar terms to borrowers with similar credit quality. The carrying amount of accrued interest
approximates its fair value.
22
Deposit liabilities: The fair values for deposits with no defined maturities are equal to their carrying
amounts, which represent the amount payable on demand. The carrying amounts for variable-rate, fixedterm money market accounts approximate their fair values at the reporting date. Fair values for fixed-rate
certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates
currently being offered on certificates to a schedule of aggregated expected monthly maturities on time
deposits.
Long-term borrowing: The fair values of the Bank’s long-term borrowings (other than deposits) are
estimated using discounted cash flow analyses based on the Bank’s current incremental borrowing rates
for similar types of borrowing arrangements.
Off balance sheet instruments: Fair values for the Bank’s off balance sheet letters of credit are based on fees
currently charged to enter into similar agreements, taking into account the remaining terms of the
agreements and the counterparties’ credit standing. Fees generally are not charged to enter into
unfunded loan commitments.
Recent Accounting Pronouncements
In August 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of LongLived Assets.” This Statement addresses financial accounting and reporting for the impairment or
disposal of long-lived assets and supersedes SFAS No. 121, “Accounting for the Impairment of LongLived Assets and for Long-Lived Assets To Be Disposed Of.” However, the Statement retains the
fundamental provisions of Statement 121 for (a) recognition and measurement of the impairment of
long-lived assets to be held and used including long-term customer relationship intangible assets of
financial institutions, such as depositor-relationship and borrower-relationship intangible assets and (b)
measurement of long-lived assets to be disposed of by sale. This Statement supersedes the accounting
and reporting provisions of Accounting Principles Board Opinion No. 30, “Reporting the Results of
Operations–Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions,” for the disposal of a segment of business. However,
this Statement retains the requirement of Opinion 30 to report discontinued operations separately from
continuing operations and extends that reporting to a component of an entity that either has been
disposed of (by sale, by abandonment, or in distribution to owners) or is classified as held for sale. The
provisions of this Statement are effective for financial statements issued for fiscal years beginning after
May 15, 2002, and interim periods within those fiscal years, with earlier application encouraged. The
provisions of this Statement generally are to be applied prospectively. The adoption of this Statement
did not impact the Bank’s earnings, financial condition or equity.
23
2. INVESTMENT SECURITIES
The following is a comparative summary of investment securities available for sale at December 31:
In thousands
2002
U.S. Treasury securities and obligations of U.S.
Government corporations and agencies
Obligations of state and political subdivisions
Mortgage-backed securities
Other securities
Total
2001
U.S. Treasury securities and obligations of U.S.
Government corporations and agencies
Other securities
Total
Gross
Gross
Amortized Unrealized Unrealized
Cost
Gains
Losses
$
$
$
$
35,702
5,567
17,260
31,471
90,000
13,760
4,491
12,735
30,355
61,341
$
$
$
$
Fair
Value
372 $
390
276
1,399
2,437 $
( 83) $
(17)
(5)
(61)
( 83) $
36,074
5,940
17,531
32,809
92,354
176 $
174
268
758
1,376 $
(12) $
(34)
(9)
(236)
(291) $
13,924
4,631
12,994
30,877
62,426
The following is a comparative summary of investment securities to be held to maturity at December 31:
In thousands
24
Gross
Gross
Amortized Unrealized Unrealized
Cost
Gains
Losses
2002
Total
$
$
8,703
8,703
$
$
425
425
2001
Total
$
$
11,697
11,697
$
$
350
350
$
$
Fair
Value
$
$
9,128
9,128
(1) $
(1) $
12,046
12,046
The amortized cost and fair value of securities at December 31, 2002, by contractual maturity, are shown
in the following table. Expected maturities may differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or prepayment penalties.
Available For Sale
In thousands
Due in one year or less
Due after one year through five years
Due after five years through ten years
Due after ten years
Other securities
Total
Amortized
Cost
$
$
6,032 $
46,967
17,917
564
17,260
1,260
90,000 $
Fair
Value
6,052
48,296
18,706
549
17,531
1,220
92,354
Held To Maturity
Amortized
Cost
Fair
Value
$
1,829
5,787
757
330
$
1,877
6,104
801
346
$
8,703
$
9,128
The book values of securities pledged to secure borrowed and public funds, customer deposits, and for
other purposes required by law were $2,009,000 at December 31, 2002, and $2,015,000 at December 31,
2001.
Gross losses of $163,000 and $51,000 were realized on sales of available for sale securities in 2002 and
2001, respectively.
3. LOANS
The following is a comparative summary of loans at December 31:
2002
In thousands
Real estate
Commercial and other
Equipment leases
Consumer credit
Unearned discounts
Loan loss reserves
Total
Carrying
Amount
$
$
314,211 $
63,583
25,341
8,920
412,055
(4,230)
(5,207)
402,618 $
2001
Fair
Value
Carrying
Amount
322,989 $
66,063
25,256
9,017
423,325
(4,230)
(5,207)
413,888 $
307,488 $
75,778
19,182
11,245
413,693
(3,907)
(4,953)
404,833 $
Fair
Value
312,778
76,473
19,707
11,243
420,201
(3,907)
(4,953)
411,341
25
The following are changes in loan loss reserves for the years ended December 31:
2002
In thousands
Balance at January 1
Provision charged to operations
Recoveries
Loans charged off
Balance at December 31
$
2001
4,953 $
300
37
(83)
5,207 $
$
4,716
400
28
(191)
4,953
Additional information related to impaired accrual and nonaccrual loans included in total loans at
December 31 follows:
In thousands
Average recorded investment in impaired loans
Impaired loans subject to a reserve for loan losses
(reserve: 2002–$2; 2001–$2)
Impaired loans requiring no reserve for loan losses
Total impaired loans
Impaired loans that are on a nonaccrual basis
Interest income on impaired loans
Interest income on impaired loans recorded on a cash basis
Nonaccrual loans:
Real estate
Interest income that would have been recorded under original terms:
Real estate
2002
2001
$
391
$
146
$
255
$
145
$
$
255
255
$
$
$
$
145
145
1
1
$
$
1,746
288
$
$
876
619
$
$
97
28
$
$
64
37
At December 31, 2002, the Bank did not have any commitments to lend additional funds to any
borrowers whose loans have been placed on nonaccrual status.
The expected remaining maturity or repricing of loans at December 31, 2002, is shown in the following
table. Expected maturities will differ from contractual maturities because borrowers may have the right
to prepay obligations with or without prepayment penalties.
In thousands
Due in one year or less
Due after one year through five years
Due after five years
Nonaccrual loans
Total
26
Carrying
Amount
$ 91,061
285,441
33,519
2,034
$ 412,055
4. CONCENTRATIONS OF CREDIT RISK
Concentrations of credit risk, whether on or off the balance sheet, exist in relation to certain groups of
customers. A group concentration arises when a number of customers have similar economic
characteristics that would cause their ability to meet contractual obligations to be similarly affected by
changes in economic or other conditions. The Bank’s business is concentrated in Cumberland, Atlantic
and Gloucester counties in the State of New Jersey. A significant portion of the total loan portfolio is
secured by real estate or other collateral located in these counties. While the Bank does not have a
significant exposure to any individual customer, the ability of its customers to pay their credit is, to some
extent, dependent upon the economy in the Bank’s market area.
5. LOAN SERVICING
Mortgage loans serviced for others are not included in the accompanying consolidated balance sheets.
The unpaid principal balances of these loans at December 31 are summarized as follows:
2002
In thousands
Mortgage loan portfolios serviced for:
FNMA
FHLMC
Total
$
$
105,230 $
1,197
106,427 $
2001
88,411
1,267
89,678
Custodial escrow balances maintained in connection with the foregoing loan servicing, and included in
deposits, were approximately $36,000 and $54,000 at December 31, 2002 and 2001, respectively.
Mortgage servicing rights in the amounts of $260,000 and $269,000 were capitalized during the years
ended December 31, 2002 and 2001, respectively. The fair value of capitalized mortgage servicing rights
was $459,000 at December 31, 2002, and $253,000 at December 31, 2001. The fair value of the mortgage
servicing rights was estimated as the present value of the expected future cash flows using a discount
rate of 6.26%. The Bank recognized amortization of mortgage servicing rights in the amounts of $54,000
and $16,000 in 2002 and 2001, respectively.
Loans held for sale at December 31, 2002, were $3,178,000, and are included in net loans in the
consolidated balance sheets.
27
6. PREMISES AND EQUIPMENT
The major classes of premises and equipment and the total accumulated depreciation and amortization
as of December 31 follow:
2002
In thousands
Land and premises
Furniture, fixtures and equipment
Leasehold improvements
$
Less accumulated depreciation and amortization
Total
$
2001
12,492 $
5,899
771
19,162
6,860
12,302 $
11,531
5,239
732
17,502
5,969
11,533
7. DEPOSITS
The following is a comparative summary of deposits at December 31:
2002
In thousands
Demand deposits, noninterest-bearing
Demand deposits, interest-bearing
Money market deposits
Savings deposits
Certificates of deposit and other
Total
Carrying
Amount
$
$
100,156 $
11,169
91,597
123,397
152,013
478,332 $
2001
Fair
Value
Carrying
Amount
100,156 $
11,169
91,597
123,397
152,953
479,272 $
Fair
Value
89,349 $
3,129
91,196
92,927
157,564
434,165 $
89,349
3,129
91,196
92,927
158,885
435,486
At December 31, 2002, deposits with balances greater than $100,000 totaled $155,899,000.
The scheduled maturities of certificates of deposit and other at December 31, 2002, are as follows:
Carrying
Amount
In thousands
No stated maturity
One year or less
Over one year through three years
Over three years
Total
28
$
$
1,220
130,027
20,204
562
152,013
Interest expense on deposits for the years ended December 31 is summarized below:
2002
In thousands
Interest-bearing checking
Money market deposits
Savings deposits
Certificates of deposit and other
Total
$
$
598 $
593
2,265
5,150
8,606 $
2001
875
1,144
2,353
8,975
13,347
On February 9, 2001, the Bank assumed the deposits of four branches of an unrelated financial
institution. These deposits, totaling approximately $18,000,000, were acquired at a net premium of
4.55%, or approximately $822,000. The net deposit premium at December 31, 2002, of $422,000 is
included in other assets in the consolidated balance sheets. Amortization is calculated over a period not
to exceed 10 years and is included in other operating expenses.
8. INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts
of assets and liabilities for financial reporting and the amounts used for income tax purposes.
Significant components of the Bank’s deferred tax assets and liabilities at December 31 are as follows:
2002
In thousands
Deferred tax assets:
Loan loss reserve
Depreciation
Compensation
Deposit premium amortization
Loan origination costs
REO reserve
Capital loss carryforward
$
Deferred tax liabilities:
Originated mortgage service rights
Prepaid expenses
Deferred fee income
Available for sale securities
Other
Net Deferred Tax Assets
$
2001
2,280 $
212
241
118
32
2
122
3,007
2,166
180
249
154
33
46
(183)
(70)
(67)
(800)
(67)
(1,187)
1,820 $
(101)
(71)
(75)
(369)
(1,165)
(1,781)
1,047
2,828
29
Significant components of the provision for income taxes at December 31 are as follows:
2002
In thousands
Current tax expense(benefit):
Federal
State
$
Deferred tax expense(benefit):
Federal
State
Total
$
2001
4,623 $
740
5,363
3,531
695
4,226
(1,031)
(173)
(1,204)
4,159 $
(86)
(17)
( 103)
4,123
9. BENEFIT PLANS
The Bank’s qualified defined benefit pension plan covers substantially all employees. The benefits are
based on years of service and the employees’ compensation during the last ten years of employment. At
age 21 with one year of service, employees are generally eligible to participate in this noncontributory
plan. The plan assets are invested primarily in mutual funds.
The Bank’s funding policy provides that payments to the pension plan will be at least equal to the
minimum funding requirements of the Employee Retirement Income Security Act of 1974. The entry-age
normal method is used to determine the Bank’s contributions to the Plan.
Pension expense in 2002 and 2001 was $190,000 and $215,000, respectively. The funded status of the plan
at December 31 is as follows:
2002
In thousands
Benefit obligation
Estimated plan assets at fair value
Under funded status
$
Accrued benefit cost recognized
Weighted-average assumptions used:
Discount rate
Expected rate of return
Rate of compensation increase
2001
$
3,506 $
2,063
(1,443) $
2,540
2,014
(526)
$
129 $
289
7.00%
7.00%
5.00%
7.50%
7.50%
4.50%
The Bank also has a 401(k) retirement savings plan. At age 21 with one year of service, employees are
generally eligible to participate in this plan. Employees may contribute a minimum of 1% of annual
salary. The Bank’s contribution is 25% of the first 4% of the employees’ contribution. Employees may
30
choose among nine investment options and may change either investment allocations or the amount
contributed. The employees’ contributions are immediately vested and the Bank’s contribution is vested
after three years of service.
In 2002 and 2001, the Bank’s contributions to the 401(k) retirement savings plan totaled $49,000 and
$46,000, respectively. In 2002 and 2001, administration fees charged to operations totaled $22,000 and
$20,000, respectively.
10. COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Bank makes commitments to extend credit and issues standby
letters of credit. Commitments to extend credit are agreements to lend to a customer. Generally, they
have fixed expiration dates or termination clauses and may require payment of a fee. Many commitments
expire without being drawn upon. The Bank evaluates each customer’s credit worthiness on a case-bycase basis. The type and amount of collateral obtained, if deemed necessary by the Bank upon extension
of credit, is based on management’s credit evaluation of the borrower. Standby letters of credit are
conditional commitments issued by the Bank to guarantee the performance of a customer to a third
party. The credit risk involved in issuing letters of credit is essentially the same as that involved in
extending loan facilities to customers. At December 31, 2002 and 2001, firm loan commitments
approximated $85,126,000 and $100,721,000 and commitments under standby letters of credit
approximated $12,503,000 and $8,515,000, respectively. No losses are expected should the Bank be
required to fund these commitments.
The fair value of the off balance sheet standby letters of credit is based on the fees received to enter into
the agreements and represents what the Bank would have to pay to have another entity assume its
obligations under the agreements. At December 31, 2002 and 2001, that amount approximated $188,000
and $128,000, respectively. The Bank generally does not charge a fee to enter into unfunded loan
commitments. The unfunded commitments at December 31, 2002, if drawn upon, will be funded at
current market rates.
The Bank provides merchant services to its own customers as well as to customers of several other
banks. These services include the processing of customer credit card transactions, sale and support of
equipment and software used by the merchants to accept customer credit card transactions, and the
related account settlement activities. During the normal course of business, transactions may be
dishonored for various reasons resulting in chargebacks to the merchant. The Bank is exposed to credit
risk arising from these activities. The risk is largely a function of merchant sales volumes, chargeback
levels, credit/return levels and delayed delivery levels. Industry benchmarks and the Bank’s normal credit
policies are used to evaluate merchant credit risk. In addition, merchants with chargeback activity
exceeding 2% of monthly sales transaction volumes are reviewed and any action taken is determined on
a case-by-case basis. During 2002, the Bank processed $527,447,000 in transactions. Reserves for
estimated potential losses in connection with processed transactions were $921,000 and $936,000 at
December 31, 2002 and 2001, respectively.
31
Operating expenses include rentals for bank premises of $101,000 in 2002 and $103,000 in 2001. At
December 31, 2002, the Bank was obligated under two noncancelable leases for premises. These leases,
which are for twenty and ten year terms with renewal provisions, are operating leases.
Minimum annual rental payments under the terms of these leases are as follows:
2003
2004
2005
2006
2007
2008 and thereafter
Total
$
$
99,160
99,160
99,160
99,160
99,160
211,413
707,213
There are no material legal proceedings to which the Bank or any of its subsidiaries is a party to, or to
which any of their property is subject, other than proceedings routine to the business of the Bank and its
subsidiaries.
11. REGULATORY MATTERS
The Bank is subject to various regulatory capital requirements administered by the federal banking
agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly
additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on
the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for
prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative
measures of the Bank’s assets, liabilities and certain off balance sheet items as calculated under
regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to
qualitative judgments by the regulators about components, risk weightings and other factors.
Quantitative measures established by regulation to ensure capital adequacy require the Bank to
maintain minimum amounts and ratios of total and Tier 1 capital to risk-weighted assets, and Tier 1
capital to average assets (as those terms are defined in the regulations). Management believes, as of
December 31, 2002, that the Bank meets all capital adequacy requirements to which it is subject. As of
December 31, 2002, the most recent notification from the Office of the Controller of the Currency
categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To
be categorized as well capitalized the Bank must maintain certain minimum total risk-based, Tier 1 riskbased, and Tier 1 leverage ratios. There are no conditions or events since that notification that
management believes have changed the institution’s category.
32
The minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios required by regulation are set
forth in the table below. The Bank’s actual capital amounts and ratios at December 31 are also presented
in the table. There were no deductions from capital for interest rate risk in 2002 or in 2001.
Actual:
Dollars in thousands
2002
Total Capital (to Risk Weighted Assets)
Tier 1 Capital (to Risk-Weighted Assets)
Tier 1 Capital (to Average Assets)
2001
Total Capital (to Risk-Weighted Assets)
Tier 1 Capital (to Risk-Weighted Assets)
Tier 1 Capital (to Average Assets)
Amount
Ratio
To Be Well
Capitalized Under
For Capital
Prompt Corrective
Adequacy Purposes: Action Provisions:
Amount
Ratio
Amount
Ratio
$ 78,644 15.88%
$ 68,437 14.76%
$ 68,437 12.23%
≥$ 32,958
≥$ 16,479
≥$ 22,382
≥8.0%
≥4.0%
≥4.0%
≥$ 41,197 ≥10.0%
≥$ 24,718 ≥ 6.0%
≥$ 27,978 ≥ 5.0%
$ 67,165 14.66%
$ 62,212 13.58%
$ 62,212 12.09%
≥$ 33,291
≥$ 16,645
≥$ 20,580
≥8.0%
≥4.0%
≥4.0%
≥$ 41,613 ≥10.0%
≥$ 24,968 ≥ 6.0%
≥$ 25,725 ≥ 5.0%
12. RELATED PARTY TRANSACTIONS
In the ordinary course of business, the Bank makes loans to its directors, officers and employees, and
their related interests. At December 31, 2002 and 2001, these loans amounted to approximately
$5,462,000 and $6,159,000, respectively.
The Bank is obligated under a noncancelable lease for premises held by a partnership controlled by
certain directors of the Bank. Annual rent paid under this lease is approximately $40,000 and is included
in other operating expenses. In addition, legal fees are incurred by the Bank in the ordinary course of
business, some of which are paid to a law firm that employed a family member of an executive officer of
the Bank, and to a law firm in which a director and significant shareholder has an ownership interest.
Legal fees paid to these law firms during 2002 were approximately $335,000.
33
PROVIDING MORE VALUE
TO CUSTOMERS
Central Atlantic Leasing
helped William B. Kessler
Memorial Hospital
acquire state-of-the-art
radiology equipment.
One constant over the past 90 years has
been Minotola National Bank’s ability to
consistently deliver More Value, in terms
of both products and services. The Bank
has become the hallmark for strong, locally
owned and operated community banks.
Through nine decades of operation,
Minotola National Bank has been a wellcapitalized, solid earner with a focus on
customer service.
Left to right:
Dorothy R. Berenato
Chairperson, Board of Directors
Bernard Neff, M.D.
Director of Radiology
Warren E. Gager
President/CEO
Louis L. Petrini
President
Craig DeGenova
Assistant Vice President
Minotola National Bank provides
financing and banking services
to Vineland-based ChemGlass,
maker of specialized scientific and
laboratory glassware.
Left to right, front row:
Jeffrey Taylor,
Assistant Vice President
Rich Brainard, Lamp Worker
Donna Marciano, Branch Manager
Susan Toulson, Controller
Back row:
Philip Surdam, Secretary
David Surdam, Vice President
financed the construction of
this Friendly’s restaurant
in Upper Deerfield, due to
open in Spring 2003.
34
The plan for the future is to carefully
blend traditional values, which remain an
integral part of the Minotola National Bank
culture, with innovative products and
services. Technology offers a world of new
and exciting possibilities, making more
products and services available than could
previously be imagined. Check imaging, new
statement delivery options including email
and CD-ROMs, “smart” debit cards and
other advanced services, are on pace to
launch in the coming months.
Equally important to the growth of Minotola
National Bank is the continued development
of its “brick and mortar” branch network to
better serve each of its communities. Toward
that end, additional facilities are planned for
Millville, Upper Deerfield and Hammonton.
There is an old adage that states,
“The only thing that does not change
is the need for innovative change.”
Minotola National Bank remains
focused on its customers and
committed to providing products
to meet their needs.
provides personalized banking
and lending services to help
keep Massarelli Lawn
Ornaments on top of the
stone masonry and garden
accessories industry.
Left to right:
Louis L. Petrini
Regional Vice President,
Mario Massarelli
President,
Massarelli Lawn Ornaments
Minotola National Bank financed the
construction of this 80,000 square foot facility
for Garden State Bulb, an importer and
wholesaler of flower bulbs from around the world.
Minotola National Bank provides lending and leasing services to
Millville-based plastics manufacturer Toco Products so they can
acquire equipment like this advanced injection molding machine.
Left to right:
Louis L. Petrini, President, Central Atlantic Leasing
Wilam Tekelenburg, Secretary, Toco Products
Peter Bertram, Vice President, Minotola National Bank
Tony Tekelenburg, Vice President, Toco Products
Craig DeGenova, Assistant Vice President, Central Atlantic Leasing
35
E XECUTIVE OFFICERS
John B. Morello, Board Chairman
Michael D. Capizola, Vice Chairman
Dennis W. DiLazzero, President
William R. Plick, Executive Vice President
Edith M. Taylor, Senior Vice President, Chief Operating Officer
Ava Wargo, Senior Vice President, Chief Financial Officer
John A. O’Connor, Senior Vice President
V ICE P RESIDENTS
Charles Andaloro
Fred Angelo
Robert Baldissero
Peter Bertram
Joseph J. Dafcik
Margaret Harkins
John F. Hawkins
Joseph A. Landi
Donna Leemon
Anthony Mortellite
Louis L. Petrini
Nicholas Scardino
A SSISTANT V ICE P RESIDENTS
Charles R. Biondi
Brian A. Busnardo
Michael C. Capizola
Tammy L. Crowell
Cathi D. Ingraham
Michael A. Milano
George Morgan
Caroline Rambone
Gregory P. Sawyers
Todd R. Sciore
Jeffrey Taylor
Melanie Venuto
A SSISTANT C ASHIERS
Julie Massaro Allen
Christy Bryant
Kimberley S. Castellini
Alice Garton
Michael Harris
Linda Hendricks
Lynn Hoban
Debbie Holman
Rosana Kastorsky
Tracy Kozlowski
Madeline Lopez-Rodriguez
Donna Marciano
Emmett Marra
Patricia Miller
Joni Rogers
Jayne M. Rosmini
Oswald Schumacher
Cara Stewart
Thomas St. John
Kathleen M. Waugh
Denise Zemanik
I NTERNAL A UDITORS
Scott E. Leri, Vice President, Senior Auditor
Patricia M. Perry, Auditor
Donovan Hawse, Auditor
M INOTOLA N ATIONAL B ANK G LASSBORO A DVISORY B OARD
Joseph J. Bennis
Corporate Secretary/ Treasurer, Joseph Fazzio, Inc.
Chris Fazzio
President, Joseph Fazzio, Inc.
Andrew Roesler
CPA
Margaret Tannenbaum
Retired Rowan University Professor,
Owner/Operator, Evergreen Book Store
Jerry Villecco
President/Owner, Glassboro Lumber

pdf - Performance Marketing

Transcription

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