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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001
COMMISSION FILE NUMBER 0-6136
CORUS BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-0823592
(State of incorporation or organization) (I.R.S. Employer Identification No.)
3959 N. LINCOLN AVE., CHICAGO, ILLINOIS 60613-2431
(Address of principal executive offices) (Zip Code)
(773) 832-3088
(Registrant's telephone number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EXCHANGE ON WHICH REGISTERED
Common stock, par value $0.05 per share NASDAQ
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 and
(2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
On February 22, 2002, the Registrant had 14,159,644 common shares
outstanding. Of these, 7,760,664 common shares having an aggregate market value
(based on the closing price for these shares as reported in a summary of
national market issues in The Wall Street Journal for stocks listed on NASDAQ on
February 22, 2002) of approximately $356.0 million, were owned by shareholders
other than directors and executive officers of the Registrant and any other
person known by the Registrant as of the date hereof to beneficially own five
percent or more of Registrant's common shares.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II of this Form 10-K incorporate by reference certain
information from the Registrant's 2001 Annual Report to Shareholders. Part III
of this Form 10-K incorporates by reference certain information from the
Registrant's definitive Proxy Statement dated March 12, 2002 for its Annual
Meeting of Shareholders to be held on April 22, 2002.
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Corus Bankshares, Inc.
Index to Annual report on form 10-K
December 31, 2001
TABLE OF CONTENTS
PART I
ITEM 1. Business .................................................................... 1
ITEM 2. Properties .................................................................. 10
ITEM 3. Legal Proceedings ........................................................... 10
ITEM 4. Submission of Matters to a Vote of Security Holders. ........................ 10
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholder Matters........ 11
ITEM 6. Selected Financial Data ..................................................... 12
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations. ........................................................... 13
ITEM 7a. Quantitative and Qualitative Disclosures About Market Risk................... 13
ITEM 8. Financial Statements and Supplementary Data. ................................ 13
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure. .................................................... 13
PART III
ITEM 10. Directors and Executive Officers of the Registrant. ......................... 14
ITEM 11. Executive Compensation ...................................................... 15
ITEM 12. Security Ownership of Certain Beneficial Owners and Management .............. 15
ITEM 13. Certain Relationships and Related Transactions .............................. 15
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K ............ 15
PART I
ITEM 1. BUSINESS
Corus Bankshares, Inc. ("Corus"), incorporated in Minnesota in 1958, is a bank
holding company registered under the Bank Holding Company Act of 1956. Corus
provides consumer and corporate banking products and services through its wholly
owned banking subsidiary, Corus Bank, N.A. (the "Bank").
During 2000 and 2001, the Bank restructured its business, focusing on two main
businesses and one smaller business. The two main business activities for Corus
are commercial real estate lending and deposit gathering. The third, and
smaller, business is servicing the check cashing industry.
Commercial real estate lending is focused primarily on loans secured by office,
hotel, condominium and residential apartment projects. Loan amounts often
approach the Bank's legal lending limit and are secured by properties throughout
the United States. As of December 31, 2001, 65% of outstanding loan balances
were secured by property outside of Illinois providing the geographic
diversification that management believes is very important in the commercial
real estate business.
With respect to retail banking, the bank has 11 branches in the Chicago
metropolitan area. Through these branches Corus offers general banking services
such as checking, savings, money market, and time deposit accounts as well as
safe deposit boxes and a variety of additional services.
Finally, Corus provides clearing, depository, and credit services to more than
525 check cashing industry locations in the Chicago area and an additional 20 in
Milwaukee, Wisconsin.
The restructuring referred to above included the sale in October 2000 of Corus'
trust and investment management services business. In addition, Corus sold the
majority of its student loans, over $460 million in loans, in a two-part
transaction completed in April 2001. Corus also decided to cease originating any
new residential first mortgage or home equity loans. The existing portfolio will
continue to be serviced by Corus. Finally, Corus sold the majority of its
medical finance portfolio with the remaining amount expected to run off over the
next few years.
COMPETITION
All of Corus' principal business activities are highly competitive. Corus
competes actively with other financial services providers offering a wide array
of financial products and services. The competitors include other commercial
banks, savings banks, credit unions, brokerage firms, finance companies,
insurance companies, and mutual funds. Competition is generally in the form of
interest rates and points charged on loans, interest rates paid on deposits,
service charges, banking hours and locations including ATM access, and other
service-related products.
EMPLOYEES
At December 31, 2001, Corus employed a total of 506 full-time equivalent
persons, consisting of 109 executives, management and supervisory personnel and
397 clerical and secretarial employees.
1
SUPERVISION AND REGULATION
General
Corus is a bank holding company within the meaning of the Bank Holding Company
Act of 1956, as amended ("the Act"), and is registered as such with the Board of
Governors of the Federal Reserve System ("the Federal Reserve Board"). The Act
requires every bank holding company to obtain the prior approval of the Federal
Reserve Board before acquiring, merging with or consolidating into another bank
holding company, acquiring substantially all the assets of any bank, or
acquiring direct or indirect ownership or control of 5% or more of the voting
shares of any bank or bank holding company.
The Act also prohibits a bank holding company, with certain exceptions, from
acquiring direct or indirect ownership or control of 5% or more of the voting
shares of any company which is not a bank and from engaging in any business
other than that of banking, managing and controlling banks, or furnishing
services to banks and their subsidiaries. However, Corus may engage in and own
shares of companies engaged in certain businesses determined by the Federal
Reserve Board to be closely related to banking or managing or controlling banks.
The Illinois Bank Holding Company Act of 1957 ("the Illinois Act"), as amended,
permits Corus to acquire banks located anywhere in Illinois. Other amendments of
the Illinois Act authorize combinations between banks and bank holding companies
located in Illinois and banks and bank holding companies located in another
state if that other state has passed legislation granting similar privileges to
Illinois banks and bank holding companies. Effective December 1, 1990, holding
companies from any state were permitted to acquire Illinois banks and bank
holding companies if the other state allows Illinois bank holding companies the
same privilege. In June 1993, the Illinois Act was amended to eliminate all
branch restrictions. Accordingly, banks located in Illinois are permitted to
establish branches anywhere in the state.
Corus' subsidiary bank is a national bank and, as such, is supervised, examined
and regulated by the Office of the Comptroller of the Currency under the
National Bank Act. Since a national bank is also a member of the Federal Reserve
System and its deposits are insured by the Federal Deposit Insurance Corporation
("FDIC"), the subsidiary bank is also subject to the applicable provisions of
the Federal Reserve Act, the Federal Deposit Insurance Act, and, in certain
respects, to state laws applicable to financial institutions.
The subsidiary bank is subject to FDIC deposit insurance assessments. Under the
FDIC's risk-based assessment system, the assessment rate is based on
classification of a depository institution in one of nine risk assessment
categories. Such classification is based upon the institution's capital level
and upon certain supervisory evaluations of the institution by its primary
regulator. The subsidiary bank's FDIC deposit insurance cost for 2002 will be
approximately 0.02% of deposits.
The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
initiated new intense regulation for the financial services industry. FDICIA
made significant changes in the legal environment for insured banks, including
reductions in insurance coverage for certain types of deposits, increases in
consumer-oriented requirements, and substantial revisions in the supervision,
examination, and audit processes. FDICIA also required new reporting by banks
and mandated adoption of new regulations concerning capital, liquidity, internal
controls, safety and soundness, and prompt corrective action.
2
Capital Adequacy
The Federal Reserve Board established risk-based capital guidelines that require
bank holding companies to maintain minimum ratios. The main objective of the
risk-based capital requirements is to provide a fair and consistent framework
for comparing capital positions of all banking institutions. Under these
guidelines, capital consists of two components, core capital elements (Tier 1
capital) and supplementary capital elements (Tier 2 capital). Assets and
off-balance-sheet items are assigned broad risk categories. The aggregate dollar
value of each category is multiplied by a risk weight associated with that
category.
In 1992, the FDIC adopted new regulations that defined five capital categories
for purposes of implementing the requirements under FDICIA. The five capital
categories, which range from "well-capitalized" to "critically
under-capitalized", are based on the level of risk-based capital measures. The
minimum risk-based capital ratios for Tier 1 capital to risk-weighted assets and
total risk-based capital to risk-weighted assets to be classified as
well-capitalized are 6.0% and 10.0%, respectively. At December 31, 2001, Corus'
Tier 1 capital and total risk-based capital ratios were 19.4% and 22.0%,
respectively.
In addition, bank regulatory agencies established a leverage ratio to supplement
the risk-based capital guidelines. The leverage ratio is intended to ensure that
adequate capital is maintained against risks other than credit risk. A minimum
required ratio of Tier 1 capital to total assets of 3.0% is required for the
highest quality bank holding companies that are not anticipating or experiencing
significant growth. All other banking institutions must maintain a leverage
ratio of 4.0% to 5.0% depending upon an institution's particular risk profile.
At December 31, 2001, Corus' leverage ratio was 15.4%.
Interstate Banking
The Riegle-Neal Interstate Bank and Branching Efficiency Act of 1994 ("IBBA")
permits bank holding companies that are adequately capitalized and managed to
acquire banks located in any other state after September 29, 1995, subject to
certain statewide and nationwide deposit concentration limits. States may
prohibit acquisition of banks that have not been in existence for at least five
years.
The interstate branching by merger provisions were effective on June 1, 1997,
unless a state took legislative action prior to that date. The long-term effects
on Corus of such changes in interstate banking and branching laws cannot be
predicted. However, it is likely that there will be increased competition from
national and regional banking firms headquartered outside of Illinois.
Graham-Leach-Bliley Act of 1999
The enactment of the Graham-Leach-Bliley Act of 1999 ("the GLB act") repeals
sections 20 and 32 of the Banking Act of 1933 ("the Act"), allowing new
opportunities to be available for banks, other depository institutions,
insurance companies, and securities firms to enter into combinations that permit
a single financial services organization to offer customers a more complete
array of financial products and services. To further this goal, the GLB Act
amends section 4 of the Act providing a new regulatory framework for regulation
through the financial holding company ("FHC"), which will have as its umbrella
regulator the Federal Reserve Board. Functional regulation of the FHC's
separately regulated subsidiaries will be conducted by their primary functional
regulator. Pursuant to the GLB Act, bank holding companies, subsidiary
depository institutions thereof, and foreign banks electing to qualify as a FHC
must be "well managed," "well capitalized," and at least rated satisfactory
under the Community Reinvestment Act in
3
order for them to engage in new financial activities. The GLB Act also provides
a federal right to privacy of non-public personal information of individual
customers.
STATISTICAL DATA
Pages 4 through 10 contain supplemental statistical data. This data should be
read in conjunction with Corus' Management's Discussion and Analysis of
Financial Statements and the Consolidated Financial Statements and notes thereto
of the 2001 Annual Report to Shareholders ("2001 Annual Report"), incorporated
herein by reference in response to Items 7 and 8 hereof.
SECURITIES PORTFOLIO
Carrying Value of Securities by Category
The carrying value of securities held by Corus were as follows:
DECEMBER 31
--------------------------------------
(THOUSANDS) 2001 2000 1999
--------- --------- ---------
Available-for-sale
U.S. Government and agencies ....................... $ 35,429 $ 25,851 $ 124,141
Corporate debt securities .......................... 59,410 107,136 57,851
Common stocks ...................................... 163,024 160,943 169,927
Mortgage backed securities ......................... 38,677 144,452 128,117
Other .............................................. 3,595 3,595 7,207
--------- --------- ---------
Total ........................................... $ 300,135 $ 441,977 $ 487,243
========= ========= =========
Held-to-maturity
State and municipal ................................ $ 1,244 $ 1,418 $ 1,556
U.S. Government and agencies ....................... -- -- --
Corporate debt securities .......................... 15 15 15
Mortgage backed securities ......................... 478 761 1,084
Other .............................................. 5,286 3,998 2,732
--------- --------- ---------
Total ........................................... $ 7,023 $ 6,192 $ 5,387
========= ========= =========
4
Maturities of Securities
The scheduled maturities by security type as of December 31, 2001 were as
follows:
FROM ONE FROM FIVE NOT DUE AT A
ONE YEAR THROUGH FIVE THROUGH TEN AFTER SINGLE
(THOUSANDS) OR LESS YEARS YEARS TEN YEARS MATURITY TOTAL
-------- ------------ ----------- --------- ------------- --------
U.S. Government
and agencies .................... $ 20,131 $ 15,298 $ -- $ -- $ -- $ 35,429
Corporate debt securities ......... 15,297 44,128 -- -- -- 59,425
State and municipal ............... 145 599 500 -- -- 1,244
Common stocks ..................... -- -- -- -- 163,024 163,024
Mortgage backed securities ........ 11 9,995 2,177 26,972 -- 39,155
Other ............................. -- -- -- -- 8,881 8,881
-------- -------- -------- -------- -------- --------
Total ........................ $ 35,584 $ 70,020 $ 2,677 $ 26,972 $171,905 $307,158
======== ======== ======== ======== ======== ========
The weighted-average yields for each range of maturities of securities at
December 31, 2001 were as follows:
FROM ONE FROM FIVE NOT DUE AT A
ONE YEAR THROUGH FIVE THROUGH TEN AFTER SINGLE
OR LESS YEARS YEARS TEN YEARS MATURITY TOTAL
-------- ------------ ----------- --------- ------------- -----
U.S. Government
and agencies ...................... 5.26% 5.00% -- % -- % -- % 5.15%
Corporate debt securities ........... 6.35 6.24 -- -- -- 6.27
State and municipal ................. 11.21 8.11 10.41 -- -- 9.40
Common stocks ....................... -- -- -- -- 3.75 3.75
Mortgage backed securities .......... 9.01 6.08 7.08 5.97 -- 6.06
Other ............................... -- -- -- -- 6.41 6.41
Actual maturities may differ from those scheduled due to prepayments from
issuers. Common stock yields, which reflect a tax equivalent adjustment for the
70% dividend received deduction, include the impact of dividend payments only.
Yields on tax-advantaged securities reflect a tax equivalent adjustment based on
a marginal corporate tax rate of 35%.
5
LOAN PORTFOLIO
Classification of Loans
Corus' loans were as follows:
DECEMBER 31
--------------------------------------------------------------
(THOUSANDS) 2001 2000 1999 1998 1997
---------- ---------- ---------- ---------- ----------
Commercial real estate:
Mortgage ....................... $ 675,526 $ 655,148 $ 537,603 $ 533,253 $ 554,545
Construction ................... 554,225 534,832 378,909 228,311 156,950
Commercial ........................ 94,015 91,093 117,021 108,759 55,062
Home equity ....................... 84,214 117,858 135,603 85,408 131,868
Residential first mortgage ........ 50,779 71,197 92,683 137,683 209,669
Student ........................... 14,591 63,096 443,074 431,304 412,926
Consumer .......................... 1,895 18,656 22,464 26,869 24,955
---------- ---------- ---------- ---------- ----------
Total ........................ $1,475,245 $1,551,880 $1,727,357 $1,551,587 $1,545,975
========== ========== ========== ========== ==========
Maturities of Loans and Sensitivity to Changes in Interest
The following table classifies the scheduled maturities for the following loan
portfolio categories at December 31, 2001:
ONE YEAR FROM ONE AFTER
(THOUSANDS) OR LESS TO FIVE YEARS FIVE YEARS TOTAL
-------- ------------- ---------- --------
Commercial real estate:
Mortgage ............. $167,732 $424,428 $ 83,366 $675,526
Construction ......... 266,176 288,049 -- 554,225
Commercial .............. 51,714 37,024 5,277 94,015
Of the loans maturing after one year, $186.2 million have fixed rates and $652.0
million have floating or adjustable rates. To partially manage interest rate
exposure, Corus has entered into interest rate swap agreements on certain
fixed-rate commercial real estate loans. For additional information on such
financial instruments, see Notes 10 and 11 to the Consolidated Financial
Statements on pages 25 through 28 of the 2001 Annual Report, incorporated herein
by reference in response to Item 8 hereof.
6
Risk Elements in the Loan Portfolio
Nonaccrual, Past Due, and Restructured Loans:
Nonaccrual loans were as follows:
DECEMBER 31
-------------------------------------------------
(THOUSANDS) 2001 2000 1999 1998 1997
------- ------- ------ ------ ------
Nonaccrual loans .................... $ 1,520 $ 1,300 $2,529 $5,307 $8,641
Nonaccrual loans to total loans ..... 0.10% 0.08% 0.15% 0.34% 0.56%
The interest income forgone on these loans, net of cash receipts, totaled
$90,000 for the year ended December 31, 2001. In addition, prior year interest
income was reversed for loans becoming nonaccrual in each year. The interest
income reversals totaled $80,000 in 2001.
Loans past due 90 days or more, excluding nonaccrual loans, were as follows:
DECEMBER 31
-----------------------------------------------
(THOUSANDS) 2001 2000 1999 1998 1997
------- ------- ------- ------- -------
Loans past due 90 days or more ......... $ 5,939 $20,510 $34,485 $34,877 $41,248
Less guaranteed student loans .......... 1,721 16,729 21,937 17,543 14,077
------- ------- ------- ------- -------
Net loans past due 90 days or more ..... $ 4,218 $ 3,781 $12,548 $17,334 $27,171
======= ======= ======= ======= =======
Net loans past due 90 days or more
as a percentage of total loans ....... 0.29% 0.24% 0.73% 1.12% 1.76%
======= ======= ======= ======= =======
Guaranteed student loans that are greater than 90 days past due are classified
as performing due to the principal and accrued interest on such loans being
guaranteed by individual state or private non-profit agencies.
Restructured loans were as follows:
DECEMBER 31
-----------------------------------------
(THOUSANDS) 2001 2000 1999 1998 1997
------ ------ ------ ------ ------
Restructured loans ............... $ 63 $ 63 $ 320 $ 454 $ --
Potential Problem Loans
In addition to those loans disclosed under the preceding "Nonaccrual, Past Due,
and Restructured Loans" section, management identified, through their problem
loan identification system, certain other loans in the portfolio that exhibit a
higher than normal credit risk. However, these loans were not classified as
nonperforming loans. These other loans include loans where known information
about possible credit problems of borrowers causes management to have serious
doubts as to the ability of such borrowers to comply with the present loan
repayment terms and which may result in future disclosure of such loans as
7
nonaccrual, past due, or restructured. At December 31, 2001, the principal
amount of these loans was $31.9 million. This amount generally includes loans
that were classified for regulatory purposes.
Analysis of the Allowance for Loan Losses
The activity in the allowance for loan losses was as follows:
YEAR ENDED DECEMBER 31
----------------------------------------------------------
(THOUSANDS) 2001 2000 1999 1998 1997
-------- -------- -------- -------- --------
Balance at beginning of year ................ $ 39,601 $ 32,090 $ 35,773 $ 30,660 $ 32,668
Provision for loan losses ................... -- -- -- 10,000 16,000
Less charge-offs:
Home equity loans ......................... 3,254 3,945 4,193 5,171 8,454
Student loans ............................. 316 294 1,365 1,240 9,707
Consumer loans ............................ 49 56 96 7 131
Residential first mortgage loans .......... 9 62 109 414 431
Commercial loans .......................... 4 116 84 2 22
Commercial real estate loans .............. -- -- 61 18 350
-------- -------- -------- -------- --------
Total charge-offs ...................... 3,632 4,473 5,908 6,852 19,095
-------- -------- -------- -------- --------
Add recoveries:
Student loans ............................. 3,028 10,339 174 143 24
Home equity loans ......................... 1,386 1,544 1,778 1,553 745
Consumer loans ............................ 49 45 83 94 101
Residential first mortgage loans .......... 12 1 1 -- 3
Commercial real estate loans .............. 10 42 124 166 195
Commercial loans .......................... 3 13 65 9 19
-------- -------- -------- -------- --------
Total recoveries ....................... 4,488 11,984 2,225 1,965 1,087
-------- -------- -------- -------- --------
Net (charge-offs)/recoveries ................ 856 7,511 (3,683) (4,887) (18,008)
-------- -------- -------- -------- --------
Balance at end of year ...................... $ 40,457 $ 39,601 $ 32,090 $ 35,773 $ 30,660
======== ======== ======== ======== ========
Net (charge-offs)/recoveries to average
loans outstanding ......................... 0.05% 0.42% (0.22%) (0.32%) (1.15%)
======== ======== ======== ======== ========
8
Allocation of the Allowance for Loan Losses
The allocation of the allowance for loan losses was as follows:
DECEMBER 31
-----------------------------------------------
(THOUSANDS) 2001 2000 1999 1998 1997
------- ------- ------- ------- -------
Commercial real estate ............ $25,711 $25,837 $16,417 $12,971 $ 2,814
Home equity ....................... 8,815 12,010 11,777 10,070 16,180
Student ........................... 728 747 1,374 2,782 2,658
Residential first mortgage ........ 247 438 358 459 784
Commercial ........................ 44 141 273 269 29
Consumer .......................... 9 104 120 169 306
Unallocated ....................... 4,903 324 1,771 9,053 7,889
------- ------- ------- ------- -------
Total ........................ $40,457 $39,601 $32,090 $35,773 $30,660
======= ======= ======= ======= =======
The unallocated balance is based on management's review of overall factors
affecting the determination of probable losses inherent in the portfolio, which
may not be captured, or captured completely, by the mechanical application of
historical loss ratios and other factors used in determining the allocated
inherent reserve. This portion of the reserve analysis involves the exercise of
judgment and reflects all appropriate considerations, including management's
view that the reserve should have a margin that recognizes the imprecision
inherent in the process of estimating expected credit losses.
Loan Portfolio Composition
The composition of the loan portfolio was as follows:
DECEMBER 31
-----------------------------------------------
2001 2000 1999 1998 1997
------ ------ ------ ------ ------
Commercial real estate .............. 84% 76% 53% 49% 46%
Commercial .......................... 6 6 7 5 3
Home equity ......................... 6 8 8 7 8
Residential first mortgage .......... 3 5 5 9 14
Student ............................. 1 4 26 28 27
Consumer ............................ -- 1 1 2 2
--- --- --- --- ---
Total .......................... 100% 100% 100% 100% 100%
=== === === === ===
For further review of the loan loss provision and the allowance for loan losses,
reference is made to pages 52 through 53 of Management's Discussion and Analysis
of Financial Statements of the 2001 Annual Report, incorporated herein by
reference in response to Item 7 hereof.
9
DEPOSITS
The scheduled maturities of time deposits in denominations of $100,000 and
greater were as follows at December 31, 2001:
(THOUSANDS)
Maturing within 3 months ......................... $ 67,231
After 3 but within 6 months ...................... 93,681
After 6 but within 12 months ..................... 50,923
After 12 months .................................. 272,451
--------
Total ....................................... $484,286
========
RETURN ON EQUITY AND ASSETS
The following table presents certain ratios relating to Corus' equity and
assets:
DECEMBER 31
-----------------------------
2001 2000 1999
------ ------ -------
Return on average total assets ............................ 2.0% 3.0% 1.6%
Return on average common shareholders' equity ............. 12.8 21.6 12.5
Dividend payout ratio ..................................... 16.1 11.4 20.4
Average equity to average total assets .................... 15.9 13.8 12.9
ITEM 2. PROPERTIES
Corus utilizes the building facilities of its Irving Park branch, which is
located at 3959 N. Lincoln Avenue, Chicago, Illinois, for its executive offices.
Corus owns the property and buildings on which nine of the eleven bank branches
are located. The other two branch facilities are leased from unrelated parties.
ITEM 3. LEGAL PROCEEDINGS
Corus is involved in various legal and regulatory proceedings involving matters
that arose in the ordinary course of business. The consequences of these
proceedings are not presently determinable but, in the opinion of management,
these proceedings will not have a material effect on the results of operations,
financial position, liquidity or capital resources.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
10
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
PRICE RANGE OF COMMON STOCK
Corus' common stock trades on the NASDAQ National Market tier of The NASDAQ
Stock Market under the symbol: CORS. The high and low prices for the common
stock for the calendar quarters indicated, as reported by NASDAQ, are listed on
page 36 of the 2001 Annual Report, incorporated herein by reference in response
to Item 8 hereof.
APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS
The Company had approximately 2,500 shareholders as of February 22, 2002.
DIVIDENDS ON COMMON STOCK
Quarterly cash dividends per common share for the last two years are included on
page 36 of the 2001 Annual Report, incorporated herein by reference in response
to Item 8 hereof. Dividends were declared and paid on a quarterly basis. The
declaration of dividends is at the discretion of Corus' Board of Directors and
depends upon, among other factors, earnings, capital requirements and the
operating and financial condition of Corus.
11
ITEM 6. SELECTED FINANCIAL DATA
Refer to pages 56 and 57 of the 2001 Annual Report, incorporated herein by
reference for additional selected financial data.
DECEMBER 31
---------------------------------------------------------------------
(THOUSANDS, EXCEPT PER SHARE DATA) 2001 2000 1999 1998 1997
----------- ----------- ----------- ----------- ------------
Interest income ........................ $ 188,630 $ 223,676 $ 196,580 $ 187,525 $ 183,932
Interest expense ....................... 80,921 102,625 90,449 89,305 82,661
----------- ----------- ----------- ----------- -----------
Net interest income .................... 107,709 121,051 106,131 98,220 101,271
Provision for loan losses .............. -- -- -- 10,000 16,000
----------- ----------- ----------- ----------- -----------
Net interest income after provision
for loan losses .................... 107,709 121,051 106,131 88,220 85,271
Noninterest income, excluding
securities and other financial
instrument gains/(losses) .......... 17,881 36,729 20,483 20,747 22,032
Securities and other financial
instrument gains/(losses), net ..... 7,835 10,531 (1,535) 4,919 4,881
Noninterest expense .................... 51,100 54,654 63,096 51,889 51,677
Income tax expense ..................... 28,142 38,903 21,257 21,369 21,136
----------- ----------- ----------- ----------- -----------
Net income available to common
shareholders ....................... $ 54,183 $ 74,754 $ 40,726 $ 40,628 $ 39,371
=========== =========== =========== =========== ===========
Net income per share:
Basic .............................. $ 3.83 $ 5.24 $ 2.82 $ 2.79 $ 2.66
Diluted ............................ 3.79 5.23 2.82 2.75 2.63
=========== =========== =========== =========== ===========
Cash dividends declared per
common share ....................... $ 0.615 $ 0.595 $ 0.575 $ 0.555 $ 0.530
=========== =========== =========== =========== ===========
Assets ................................. $ 2,659,322 $ 2,598,467 $ 2,378,544 $ 2,577,460 $ 2,251,927
=========== =========== =========== =========== ===========
12
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information contained under the caption "Management's Discussion and
Analysis of Financial Statements" on pages 38 through 55 of the 2001 Annual
Report is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information contained under the caption "Market Risk Management" on pages 54
through 55 of the 2001 Annual Report is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated by reference to the
Consolidated Financial Statements, Notes to Consolidated Financial Statements,
and Report of Independent Public Accountants on pages 10 through 37 of the
Company's 2001 Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
13
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding directors and executive officers of Corus is incorporated
herein by reference to the descriptions under "Election of Directors" on pages 2
through 5 of the 2002 Proxy Statement. For both those executive officers listed
in the Proxy as well as the other executive officers of the Company (Senior Vice
President title and greater) not listed in the Proxy, the following is a table
providing the executive officer's name, age, position(s) held with the Company
and Subsidiary and the date the officer assumed their present office(s).
EXECUTIVE OFFICERS OF THE REGISTRANT
POSITION(S) AND OFFICE(S) HELD WITH ASSUMED
NAME AGE THE COMPANY AND SUBSIDIARY PRESENT OFFICE(S)
- --------------------------- --- ----------------------------------- -----------------
J.C. Glickman ................... 86 Chairman of the Board of June 1, 1984
the Company
Robert J. Glickman .............. 55 President and Chief Executive June 1, 1984
of the Company and Corus Bank, N.A.
Michael G. Stein ................ 41 Executive Vice President of Corus February 19, 1996
Bank, N.A.
Tim H. Taylor ................... 37 Executive Vice President and Chief December 1, 1998
Financial Officer of the Company
and Corus Bank, N.A.
Randy P. Curtis ................. 43 Senior Vice President of Corus April 30, 1997
Bank N.A.
Christopher Glancy .............. 48 Senior Vice President of Corus November 15, 1995
Bank, N.A.
Michael W. Jump ................. 57 Senior Vice President of Corus January 1, 1996
Bank, N.A.
Terence W. Keenan ............... 56 Senior Vice President of Corus September 16, 1996
Bank, N.A.
Richard J. Koretz ............... 38 Senior Vice President of Corus November 15, 1995
Bank, N.A.
Joel C. Solomon ................. 47 Senior Vice President of Corus August 29, 1997
Bank, N.A.
14
ITEM 11. EXECUTIVE COMPENSATION
Information regarding executive compensation is incorporated by reference to the
material under the caption "Executive Compensation" on pages 7 through 15 of the
2002 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding security ownership of certain beneficial owners and
management is incorporated by reference to the material under the headings
"Outstanding Voting Securities and Principal Shareholders" and "Proposal One:
Election of Directors" on pages 1 through 5 of the 2002 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding certain relationships and related transactions is
incorporated herein by reference to the material under the heading "Transactions
with Management and Others" on page 17 of the 2002 Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following Consolidated Financial Statements, Notes to Consolidated
Financial Statements, and the Report of Independent Public Accountants
are incorporated herein by reference to the following pages of the
registrant's 2001 annual report:
INDEX PAGES
----- -----
Consolidated Balance Sheets ........................................ 10
Consolidated Statements of Income .................................. 11
Consolidated Statements of Changes in Shareholders' Equity ......... 12
Consolidated Statements of Cash Flows .............................. 13
Notes to Consolidated Financial Statements ......................... 14-36
Report of Independent Public Accountants ........................... 37
Average Balance Sheet and Net Interest Margin ...................... 39
(b) Reports on Form 8-K:
None
15
(c) Exhibits: See exhibits filed herewith
(3a) Amended and Restated Articles of Incorporation is incorporated
herein by reference to Exhibit 4.1 to the form S-8 filing dated May
22, 1998
(3b) By-Laws are incorporated herein by reference to Exhibit 4.2 to the
Form S-8 filing dated May 22, 1998
(10.1) Commission Program for the Commercial Loan Officers is incorporated
herein by reference to Form S-8 filing dated May 22, 1998
(10.2) The 1999 Stock Option Plan is incorporated herein by reference to
Form S-8 filing dated April 30, 1999
(11) Computation of Net Income Per Share is incorporate herein by
reference to page 32 of the registrant's 2001 Annual Report
(13) The registrant's 2001 Annual Report
(99) Management's letter to the Securities and Exchange Commission
regarding receipt of certain representations from Arthur Andersen
LLP concerning the firm's ability to comply with professional
standards
16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
/s/ TIM H. TAYLOR
------------------------------
Tim H. Taylor
Executive Vice President &
Chief Financial Officer
March 26, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
/s/ JOSEPH C. GLICKMAN Chairman of the Board of Directors March 26, 2002
- ---------------------------------
Joseph C. Glickman
/s/ ROBERT J. GLICKMAN President, Chief Executive Officer & March 26, 2002
- --------------------------------- Director
Robert J. Glickman
/s/ TIM H. TAYLOR Executive Vice President & Chief Financial March 26, 2002
- --------------------------------- Officer
Tim H. Taylor
/s/ MICHAEL E. DULBERG First Vice President & Chief Accounting March 26, 2002
- --------------------------------- Officer
Michael E. Dulberg
/s/ STEVEN D. FIFIELD Director March 26, 2002
- ---------------------------------
Steven D. Fifield
/s/ VANCE A. JOHNSON Director March 26, 2002
- ---------------------------------
Vance A. Johnson
/s/ MICHAEL LEVITT Director March 26, 2002
- ---------------------------------
Michael Levitt
/s/ RODNEY D. LUBEZNIK Director March 26, 2002
- ---------------------------------
Rodney D. Lubeznik
/s/ MICHAEL TANG Director March 26, 2002
- ---------------------------------
Michael Tang
17