<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OR THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
----------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________________ to _______________
Commission File Number: 0-28700
FIRST HOME BANCORP INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-3423990
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
125 South Broadway, Pennsville, New Jersey 08070
----------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(609) 678-4400
----------------------------------------------------
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changes since last report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes __X__ No _____
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date:
Common Stock, No par value, 2,031,142 shares as of November 8, 1996.
<PAGE>
FIRST HOME BANCORP INC.
AND SUBSIDIARY
TABLE OF CONTENTS
Page
Number
------
Part I Financial Information:
Item 1: Financial Statements:
Consolidated Statements of Financial Condition -
September 30, 1996 and December 31, 1995 (unaudited) 1
Consolidated Statements of Income -
Three and Nine Months Ended September 30, 1996
and 1995 (unaudited) 2
Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 1996
and 1995 (unaudited) 3
Notes to Consolidated Financial Statements
(unaudited) 4
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Part II
Other Information 18
<PAGE>
Part I
Item 1.
FIRST HOME BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and amounts due from depository institutions $ 4,961,084 $ 7,015,388
Interest-earning deposits and short-term funds 1,055,126 1,642,052
Investment securities (market value - 1996, $1,213,000
1995, $517,000) 1,213,000 517,000
Investment securities held for trading at market value 59,375 57,019
Investment securities available-for-sale at market value 24,334,147 28,729,522
Mortgage-backed securities (market value - 1996, $89,753,364;
1995, $69,588,486) 89,207,889 67,994,547
Mortgage-backed securities available-for-sale at market value 88,445,486 78,765,677
Loans receivable - net 259,225,596 254,798,690
Loans held for sale at market value 981,020 418,305
Accrued interest receivable 2,948,813 2,903,279
Real estate owned and other repossessed assets 652,729 486,763
Federal Home Loan Bank stock-at cost 7,293,800 5,317,000
Office properties and equipment 3,062,724 2,586,321
Deposit premium 695,240 888,632
Net deferred income taxes 1,653,010 542,473
Prepaid expenses and other assets 1,419,644 376,057
------------- ------------
TOTAL ASSETS $487,208,683 $453,038,725
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Deposits $275,239,930 $270,175,738
Advances from the Federal Home Loan Bank 114,597,300 105,797,300
Other borrowed funds 62,414,000 44,329,000
Advances by borrowers for taxes and insurance 375,722 393,140
Accrued interest payable on advances 614,484 555,101
Excess of fair value over cost 128,375 315,089
Accounts payable and accrued expenses 2,383,146 1,370,629
------------- ------------
Total liabilities 455,752,957 422,935,997
------------- ------------
Commitments and Contingencies (Note 14)
Shareholders' equity:
Preferred stock - No par value; 1,000,000 shares authorized;
none issued
Common stock - No par value; 10,000,000 shares authorized; 2,030,009 shares
issued and outstanding at September 30,1996 and
December 31, 1995 --- ---
Paid-in capital 8,918,639 8,918,639
Retained earnings - partially restricted 23,723,963 21,315,342
Unrealized (loss) gain on securities available-for-sale (1,186,876) (131,253)
------------- ------------
Total shareholders' equity 31,455,726 30,102,728
------------- ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $487,208,683 $453,038,725
============ ============
</TABLE>
See notes to consolidated financial statements.
1
<PAGE>
FIRST HOME BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
------------- ------------- ------------- -------------
(Unaudited)
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $5,482,549 $5,191,942 $16,251,328 $15,189,582
Interest on mortgage-backed securities 3,164,263 2,537,560 9,099,035 6,762,945
Other interest income and dividends 547,794 640,558 1,706,177 1,949,160
----------- ---------- ----------- -----------
Total interest income 9,194,606 8,370,060 27,056,540 23,901,687
----------- ---------- ----------- -----------
INTEREST EXPENSE:
Interest on deposits 2,999,762 2,927,278 9,010,117 8,149,629
Interest on borrowed money 2,398,108 2,066,924 6,743,172 5,676,658
----------- ---------- ----------- -----------
Total interest expense 5,397,870 4,994,202 15,753,289 13,826,287
----------- ---------- ----------- -----------
NET INTEREST INCOME 3,796,736 3,375,858 11,303,251 10,075,400
PROVISION FOR CREDIT LOSSES 100,000 150,000 300,000 500,000
----------- ---------- ----------- -----------
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES 3,696,736 3,225,858 11,003,251 9,575,400
----------- ---------- ----------- -----------
OTHER INCOME:
Loan servicing fees 53,016 58,016 162,398 174,051
Profit (loss) relating to:
Loans held for sale 4,604 54,565 (79,445) 102,149
Investment securities held for trading 71,350 29,410 184,522 116,070
Mortgage-backed securities available-for-sale 22,895 --- 22,895 ---
Accretion of excess of fair value over cost 62,238 62,238 186,714 186,714
Other income 208,827 180,832 574,522 1,341,136
----------- ---------- ----------- -----------
Total other income 422,930 385,061 1,051,606 1,920,120
----------- ---------- ----------- -----------
OPERATING EXPENSES:
General and administrative expense:
Salaries and employee benefits 1,119,994 1,023,724 3,164,872 2,785,193
Occupancy and equipment 326,392 277,699 952,908 829,265
Federal insurance premium 148,076 146,064 426,595 432,789
Other expenses 642,906 517,220 1,884,657 1,649,890
----------- ---------- ----------- -----------
Total general and administrative expenses 2,237,368 1,964,707 6,429,032 5,697,137
SAIF recapitalization assessment 1,564,323 --- 1,564,323 ---
Amortization of deposit premium 64,464 64,464 193,392 192,819
Real estate operations, net 71,508 11,507 156,130 (16,943)
----------- ---------- ----------- -----------
Total operating expenses 3,937,663 2,040,678 8,342,877 5,873,013
----------- ---------- ----------- -----------
INCOME BEFORE INCOME TAXES 182,003 1,570,241 3,711,980 5,622,507
INCOME TAX EXPENSE:
Income tax expense 49,704 543,100 1,304,804 2,020,750
Recovery of valuation allowance
on deferred tax asset (732,203) --- (732,203) ---
----------- ---------- ----------- -----------
Total income tax expense (recovery) (682,499) 543,100 572,601 2,020,750
----------- ---------- ----------- -----------
NET INCOME $ 864,502 $1,027,141 $ 3,139,379 $ 3,601,757
=========== ========== =========== ===========
PER SHARE DATA:
Primary and fully diluted net income per share $ .42 $ .50 $ 1.54 $ 1.77
=========== =========== =========== ===========
Dividends per common share $ .12 $ .12 $ .36 $ .36
=========== =========== =========== ===========
Average primary shares outstanding 2,043,258 2,040,182 2,043,281 2,033,300
=========== =========== =========== ===========
Average fully diluted shares outstanding 2,043,389 2,040,182 2,043,389 2,033,300
=========== =========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
FIRST HOME BANCORP INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended
September 30, September 30,
1996 1995
------------- ------------
(Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 3,139,379 $ 3,601,757
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for credit losses 300,000 500,000
Depreciation 255,557 224,895
Accretion of excess fair value over cost (186,714) (186,714)
Amortization of fair market premiums 48,641 151,515
Amortization of deposit premium 193,392 192,819
Investment security gains (184,522) (116,070)
Purchase of investment securities held for trading (6,716,613) (953,267)
Proceeds from sale of investment securities held for trading 6,898,779 1,054,924
Loans originated for sale (6,718,286) (4,269,956)
Proceeds from sale of mortgage-backed securities available-for-sale 3,635,119 ---
Gains from sale of mortgage-backed securities available-for-sale (22,895) ---
Proceeds from loans sold 6,076,126 4,285,780
Losses (gains) on sale of loans 79,445 (102,149)
Increase in accrued interest receivable (45,534) (341,404)
Increase in accrued interest payable 59,383 131,349
Increase in net deferred tax asset (516,749) (103,712)
Net other (31,070) 268,709
----------- -----------
Net cash (used in) provided by operating activities 6,263,438 4,338,476
----------- -----------
INVESTMENT ACTIVITIES:
Proceeds from maturities of investment securities 14,060,833 17,216,000
Purchase of investment securities (10,733,420) (13,912,247)
Purchase of mortgage-backed securities (42,915,890) (50,141,710)
Repayments on mortgage-backed securities 7,104,328 4,443,801
Purchase of FHLB stock (1,976,800) (660,300)
Purchase of property and equipment (731,960) (233,889)
(Increase) decrease in real estate owned (165,966) 696,376
Principal collected on longer term loans 42,635,734 29,480,853
Loans originated or acquired (47,382,543) (36,258,533)
Cash obtained from acquisition of branches --- 14,511,820
----------- -----------
Net cash used by investing activities (40,105,684) (34,857,829)
----------- -----------
FINANCING ACTIVITIES:
Net increase (decrease) in:
Demand deposits, NOW accounts, and savings accounts 1,425,569 (6,183,284)
Certificates of deposit 3,638,623 17,044,394
Proceeds from short-term borrowings 18,085,000 7,477,200
Proceeds from FHLB advances 15,100,000 27,356,480
Cash dividends (730,758) (731,054)
Repayment of FHLB advances (6,300,000) (12,900,000)
Proceeds from exercise of common stock options --- 46,345
Decrease in advance from borrowers for taxes and insurance (17,418) (120,707)
----------- -----------
Net cash provided by financing activities 31,201,016 31,989,374
----------- -----------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (2,641,230) 1,470,021
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 8,657,440 5,783,663
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,016,210 $ 7,253,684
=========== ===========
</TABLE>
See notes to consolidated financial statements
3
<PAGE>
FIRST HOME BANCORP INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
1. BASIS OF PRESENTATION
First Home Bancorp Inc. (the Company) is a New Jersey corporation which
is the holding company for First Home Savings Bank, F.S.B. (First Home
or Bank). The Company was organized for the purpose of acquiring all of
the capital stock of the Bank in connection with the reorganization of
the Bank into the holding company form of ownership. Each outstanding
share of common stock of the Bank was converted into one share of
common stock of the Company. The reorganization was consummated on May
31, 1996.
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present
fairly the Company's financial position as of September 30, 1996 and
December 31, 1995, the results of operations for the three months and
nine months ended September 30, 1996 and 1995 and changes in cash flows
for the nine months then ended. The accompanying financial statements
do not include information or footnotes necessary for a complete
presentation of financial condition, statements of income and cash
flows in conformity with generally accepted accounting principles.
Certain reclassifications have been made to the consolidated financial
statements for 1995 to conform to the 1996 presentation. The statements
of income for the three months and nine months ended September 30, 1996
and 1995 are not necessarily indicative of the results which may be
expected for the entire year.
On July 1, 1992, the Bank acquired Fidelity Mutual Savings and Loan
Association (Fidelity Mutual) in a supervisory conversion merger
transaction. No consideration was paid in connection with the
transaction. The Bank acquired assets with a fair value of $79.9
million and assumed liabilities of $79.4 million. The acquisition was
accounted for as a purchase with excess fair value over cost being
accreted into income over a period of five years.
2. INVESTMENT SECURITIES HELD TO MATURITY
Investment securities at September 30, 1996 and December 31, 1995
consisted of the following:
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
Estimated Estimated
Amortized Market Amortized Market
Cost Value Cost Value
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Tax Exempt Obligations
Due in one year or less $1,213,000 $1,213,000 $517,000 $517,000
---------- ---------- -------- --------
Total $1,213,000 $1,213,000 $517,000 $517,000
========== ========== ======== ========
</TABLE>
4
<PAGE>
3. INVESTMENT SECURITIES HELD FOR TRADING
Investment securities held for trading at September 30, 1996 and
December 31, 1995 consisted of an investment in a mutual fund.
The Bank buys and sells debt and equity securities that are classified
as trading securities. At each recording period, the Bank adjusts the
value of these securities to market value.
4. INVESTMENT SECURITIES AVAILABLE-FOR-SALE
Investment securities available-for-sale at September 30, 1996 and
December 31, 1995 consisted of the following:
<TABLE>
<CAPTION>
September 30, 1996
------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ------
<S> <C> <C> <C> <C>
U.S. Government Agencies
Due in one year through five years $16,974,782 $32,600 $(82,915) $16,924,467
Due after five years through ten years 1,000,000 --- (190) 999,810
Corporate Notes
Due in one year or less 724,296 6,741 --- 731,037
Due after one year through five years 2,966,325 32,663 (1,868) 2,997,120
Due after five years through ten years 640,811 902 --- 641,713
Preferred stock 2,047,723 --- (7,723) 2,040,000
---------- -------- -------- ----------
Total $24,353,937 $72,906 $(92,696) $24,334,147
=========== ======= ======== ===========
December 31, 1995
-----------------
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ------
U.S. Government Agencies
Due in one year through five years $10,991,273 $132,055 $(15,000) $11,108,328
Due after five years through ten years 8,978,750 39,129 (11,400) 9,006,479
Corporate Notes
Due in one year or less 1,996,543 19,719 --- 2,016,262
Due after one year through five years 3,668,388 103,305 --- 3,771,693
Due after five years through ten years 645,621 33,639 --- 679,260
Preferred stock 2,096,775 50,725 --- 2,147,500
---------- -------- -------- ----------
Total $28,377,350 $378,572 $(26,400) $28,729,522
=========== ======== ======== ===========
</TABLE>
No investment securities available-for-sale were sold under agreement
to repurchase at September 30, 1996. U.S. Government Agencies with
amortized costs of $8,978,750 and market values of $9,006,479 were sold
under agreement to repurchase at December 31, 1995.
5
<PAGE>
5. MORTGAGE-BACKED SECURITIES
A summary of mortgage-backed securities at September 30, 1996 and
December 31, 1995 consisted of the following:
<TABLE>
<CAPTION>
September 30, 1996
------------------
Gross Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ------
<S> <C> <C> <C> <C>
Mortgage-Backed Securities
Available-for-Sale
FNMA pass-through certificates $ 1,940,003 $ 18,897 $ (7,168) $ 1,951,732
FHLMC pass-through certificates 4,568,178 220,062 (905) 4,787,335
GNMA pass-through certificates 6,394,377 412,559 --- 6,806,936
Real estate mortgage investment
conduit obligations 77,377,633 172,249 (2,650,399) 74,899,483
---------- -------- -------- ----------
Total mortgage-backed securities
available-for-sale $90,280,191 $823,767 $(2,658,472) $88,445,486
=========== ======== =========== ===========
Mortgage-Backed Securities
Held to Maturity
Non-agency pass through certificates $ 6,299,818 $ 48,591 $ (2,073) $ 6,346,336
Real estate mortgage investment
conduit obligations 82,908,071 945,939 (446,982) 83,407,028
---------- -------- -------- ----------
Total mortgage-backed securities
held to maturity $89,207,889 $ 994,530 $ (449,055) $89,753,364
=========== =========== ========= ===========
December 31, 1995
------------------
Gross Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ------
Mortgage-Backed Securities
Available-for-Sale
FNMA pass-through certificates $ 2,340,880 $ 38,472$ --- $ 2,379,352
FHLMC pass-through certificates 5,573,652 332,827 (373) 5,906,106
GNMA pass-through certificates 7,775,011 378,043 --- 8,153,054
Real estate mortgage investment
conduit obligations 63,633,391 236,559 (1,542,785) 62,327,165
---------- -------- -------- ----------
Total mortgage-backed securities
available-for-sale $79,322,934 $985,901 $(1,543,158) $78,765,677
=========== ======== =========== ===========
Mortgage-Backed Securities
Held to Maturity
Non-agency pass through certificates $ 7,319,434 $ 79,947 $ (47,265) $ 7,352,116
Real estate mortgage investment
conduit obligations 60,675,113 1,651,045 (89,788) 62,236,370
---------- -------- -------- ----------
Total mortgage-backed securities
held to maturity $67,994,547 $1,730,992 $ (137,053) $69,588,486
=========== ========== ========= ===========
</TABLE>
Mortgage-backed securities with amortized costs of $65,134,282 and
$36,860,813 and market values of approximately $65,087,396 and
$36,863,793 were pledged as collateral for securities sold under
agreements to repurchase at September 30, 1996 and December 31, 1995,
respectively.
6
<PAGE>
6. LOANS RECEIVABLE
Loans receivable at September 30, 1996 and December 31, 1995 consisted
of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ -------------
<S> <C> <C>
Residential mortgages on existing property $206,820,966 $206,264,708
Residential construction mortgages 4,293,276 3,258,284
Commercial real estate loans 16,124,071 15,670,880
Commercial business loans 1,776,234 1,232,999
Consumer loans:
Home equity loans 18,793,319 16,631,949
Mobile home loans 6,855,104 7,804,508
Equity lines of credit 3,863,526 3,674,874
Automobile loans 4,591,996 4,087,717
Other loans 3,580,917 3,538,614
------------- ------------
Total 266,699,409 262,164,533
Undisbursed portion of loans in process (1,817,256) (1,680,884)
Net deferred loan fees, discounts and premiums (1,896,380) (2,122,629)
Allowance for possible credit losses (3,760,177) (3,562,330)
------------- ------------
Total $259,225,596 $254,798,690
============ ============
</TABLE>
The total amount of loans serviced for the benefit of others was approximately
$63,200,000 and $63,400,000 at September 30, 1996 and December 31, 1995,
respectively.
Following is a summary of changes in allowance for possible credit losses:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ -------------
<S> <C> <C>
Balance, beginning of period $3,562,330 $3,315,340
Provision for credit losses 300,000 600,000
Charge-offs (234,629) (580,427)
Recoveries 132,476 227,417
----------- -----------
Total $3,760,177 $3,562,330
========== ==========
</TABLE>
7. LOANS HELD FOR SALE
Loans held for sale amounted to $981,020 and $418,305 at September 30,
1996 and December 31, 1995, respectively. Loans held for sale consist
of long-term fixed-rate residential mortgage loans which qualify for
sale in the secondary market. These loans are recorded at the lower of
cost or market value determined on an aggregate basis.
7
<PAGE>
8. REAL ESTATE OWNED AND OTHER REPOSSESSED ASSETS
Repossessed assets at September 30, 1996 and December 31, 1995
consisted of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ -------------
<S> <C> <C>
Real estate owned $646,229 $480,763
Other repossessed assets 6,500 6,000
-------- --------
Total $652,729 $486,763
======== ========
</TABLE>
The components of real estate operations, net consisted of the
following:
<TABLE>
<CAPTION>
September 30, September 30,
1996 1995
------------ -------------
<S> <C> <C>
Rental income $ 29,197 $ 3,866
Real estate operation expense (121,681) (65,207)
Net (provision) recovery for losses (63,646) 78,284
--------- ---------
Total $(156,130) $ 16,943
========= ========
</TABLE>
9. OFFICE PROPERTIES AND EQUIPMENT
Office properties and equipment are summarized by major classifications
as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ -------------
<S> <C> <C>
Land, buildings and improvements $ 3,756,530 $ 3,435,768
Furniture and equipment 1,329,041 969,719
----------- ------------
Total 5,085,571 4,405,487
Less accumulated depreciation (2,022,847) (1,819,166)
----------- ------------
Total $ 3,062,724 $ 2,586,321
=========== ===========
</TABLE>
10. DEPOSITS
Deposits at September 30, 1996 and December 31, 1995 consisted of the
following:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ -------------
<S> <C> <C>
NOW accounts $ 24,869,434 $ 26,292,766
Non-interest bearing accounts 8,046,537 7,042,519
Money market and other accounts 47,085,910 41,364,855
Savings and club accounts 36,176,732 40,043,245
Time deposits 158,780,147 155,223,667
------------ -------------
Total 274,958,760 269,967,052
Accrued interest payable 281,170 208,686
------------ -------------
Total $275,239,930 $270,175,738
============ ============
</TABLE>
The Bank has pledged mortgage loans and mortgage-backed securities
aggregating approximately $785,000 for public fund deposits as required
by the New Jersey Department of Banking's Governmental Unit Deposit
Protection Act.
8
<PAGE>
11. ADVANCES FROM FEDERAL HOME LOAN BANK
Federal Home Loan Bank advances, due at various dates through 2001 with
interest rates from 4.67% to 7.52% at September 30, 1996 totaled
$114,597,300 and from 4.47% to 7.52% at December 31, 1995 totaled
$105,797,300. The advances from the Federal Home Loan Bank are
collateralized by Federal Home Loan Bank stock and substantially all
first mortgage loans.
12. OTHER BORROWED FUNDS
Other borrowed funds at September 30, 1996 and December 31, 1995
consisted of securities sold under agreements to repurchase. These
agreements are all due within ninety days and have a weighted interest
rate of 5.58% and 6.00%, respectively. Such agreements are treated as
financings and the obligations to repurchase securities sold are
reflected as a liability in the statements of financial condition.
Securities sold under agreement to repurchase were collateralized by
mortgage-backed securities and U.S. Government Agencies with amortized
costs of $65,134,282 and $45,839,563 and market values of approximately
$65,087,396 and $45,870,272 at September 30, 1996 and December 31,
1995, respectively. The securities underlying the agreements were
delivered to, and are held by, the dealers who arranged the
transactions.
13. RECOVERY OF VALUATION ALLOWANCE ON DEFERRED TAX ASSET
A recovery of a valuation allowance related to deferred income taxes
was recognized in the amount of $732,203 during the quarter ended
September 30, 1996. The recovery was recognized after considering the
impact of a recent change in the Internal Revenue Code related to the
bad debt deduction and the estimated timing of temporary differences
related to deferred loan fees for tax purposes.
14. COMMITMENTS
Commitments at September 30, 1996 and December 31, 1995 consisted of
the following:
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ -------------
<S> <C> <C>
Fixed rate (current market rates) mortgage loans $ 1,688,110 $1,686,700
Unused lines of credit 5,069,890 4,618,605
Purchase of securities and investments 394,703 ---
Letters of credit 753,251 1,176,358
Consumer loans 643,729 207,794
Loans in process 1,817,256 1,680,884
---------- ----------
Total $10,366,939 $9,370,341
=========== ==========
</TABLE>
At September 30, 1996 all commitments are expected to be funded within
one year.
15. LEGISLATION
Legislation to recapitalize the Savings Association Insurance Fund
(SAIF) was passed by Congress and signed by the President on September
30, 1996. The legislation provides for an assessment on all SAIF
insured deposits of $.657 per $100 of deposits held as of March 31,
1995. The assessment will enable SAIF to be capitalized at the required
level of 1.25% of insured deposits. The Bank's portion of the
assessment totals $1,564,323 and is payable on November 27, 1996. SAIF
will reduce the insurance premium from its current level of $.23 per
$100 of deposits to a level competitive with the Bank Insurance Fund.
Additionally, legislation was signed in August 1996 which changed the
Internal Revenue Code regarding the bad debt deduction. This
legislation eliminated the bad debt deduction under the percentage of
taxable income method, and requires the recapture of bad debt reserve
accumulated since 1988. The amount recaptured must be taken into
account ratably over a six year period beginning with the 1996 tax
year. If certain lending requirements are met, a two year delay in the
recognition of the recapture is possible. Since the Bank is currently
providing deferred income taxes for these reserves, the change would
increase the Bank's tax payments but would not have a material effect
on earnings.
9
<PAGE>
FIRST HOME BANCORP INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The Company is the sole stockholder of First Home. Substantially all of
the Company's consolidated revenues are derived from the operations of First
Home, and First Home represented substantially all of the Company's consolidated
assets and liabilities at September 30, 1996. First Home's business is that of a
financial intermediary and consists primarily of attracting deposits from the
general public and using such deposits, together with borrowings and other
funds, to make mortgage loans secured by residential real estate located in New
Jersey and Delaware. First Home operates eight retail banking offices in New
Jersey and two retail banking offices in Delaware, providing consumer banking
services. First Home is subject to significant competition from other financial
institutions, and is also subject to regulation by the Office of Thrift
Supervision and the Federal Deposit Insurance Corporation and undergoes periodic
examinations by these regulatory agencies.
Net Income
The Company earned $1,133,466 or $.55 per share for the quarter ended
September 30, 1996 before the effect of an imposition of a special assessment to
recapitalize the Savings Association Insurance Fund ("SAIF") and a recovery of a
valuation allowance related to deferred income taxes. After considering the
$1,001,167 after-tax effect of the special assessment and the $732,203 effect of
the recovery of the valuation allowance, net income totaled $864,502 or $.42 per
share. For the comparable period one year ago, First Home earned $1,027,141 or
$.50 per share.
Net income for the nine month period ended September 30, 1996 was
$3,139,379 or $1.54 per share. First Home earned $3,601,757 or $1.77 per share
during the comparable nine month period one year ago.
The Company earned $3,408,343 or $1.67 per share for the nine month
period ended September 30, 1996 before the effect of an imposition of a special
assessment to recapitalize SAIF and a recovery of the valuation allowance
related to deferred income taxes.
The Company earned $3,171,677 or $1.56 per share for the nine month
period ended September 30, 1995 before the effect of a $672,000 recovery from an
insurance carrier which after giving effect to related income taxes increased
1995 earnings by $430,080 or $.21 per share.
Net Interest Income
Net interest income for the three and nine month periods ended
September 30, 1996 totaled $3,796,736 and $11,303,251 compared to $3,375,858 and
$10,075,400 for the three and nine month periods ended September 30, 1995, a
$420,878 or a 12.5% increase and $1,227,851 or a 12.2% increase for the three
and nine month periods, respectively. The increases in net interest income for
the three and nine month periods ended September 30, 1996 were attributable to
growth in interest-earning assets of $1.6 million and $4.5 million,
respectively. Average interest-earning assets increased by $45.9 million and
$54.4 million for the three and nine month periods ended September 30, 1996 as
compared to the prior year. Average interest-bearing liabilities increased by
$44.3 million and $49.9 million for the three and nine month periods ended
September 30, 1996 as compared to the prior year. The increase in
interest-earning assets was primarily attributable to the purchase of
mortgaged-backed securities which increased by $37.8 million and $44.3 million
for the three and nine month periods ended September 30, 1996 as compared to the
prior year. During the three month period, the increase in net interest income
resulting from the increase in net interest-earning assets was enhanced by an
increase in interest rate spread of .05% from 3.00% to 3.05%. However, during
the nine month period the increase in net interest-earning assets was offset by
a decline in interest rate spread of .06% from 3.16% to 3.10%.
10
<PAGE>
The following table sets forth information for the three and nine month
periods ended September 30, 1996 and September 30, 1995 regarding the Company's
(1) average balance of interest-earning assets and the resultant interest income
and average yields; (2) average balance of interest-bearing liabilities and the
resultant interest expense and average costs; (3) net interest income; (4)
interest rate spread; (5) and net yield earned on weighted average
interest-earning assets. Averages are calculated on a month-end basis for each
of the periods indicated. The table is not presented on a tax equivalent basis
because the Company's investment in tax-free obligations is insignificant.
<TABLE>
<CAPTION>
Three Months Ended
September 30, 1996 September 30, 1995
------------------ ------------------
(Dollars in thousands)
Average Average
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
------- -------- ---- ------- -------- ----
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans $259,338 $5,483 8.46% $246,562 $5,192 8.42%
Mortgage-backed securities 176,244 3,164 7.18 138,414 2,538 7.33
Other (1) 31,900 548 6.87 36,591 640 7.00
-------- ------ ---- -------- ------ -----
Total interest-earning assets 467,482 9,195 7.87 421,567 8,370 7.94
-------- ------ ---- -------- ------ -----
Non-interest earning assets 14,990 13,322
-------- --------
Total assets $482,472 $434,889
======== ========
Interest bearing liabilities:
Deposits $276,057 3,000 4.35 $264,503 2,927 4.43
Borrowings 172,359 2,398 5.57 139,620 2,067 5.92
-------- ------ ---- -------- ------ -----
Total interest-bearing liabilities 448,416 5,398 4.82 404,123 4,994 4.94
-------- ------ ---- -------- ------ -----
Non-interest-bearing liabilities 3,235 2,825
----- -----
Total liabilities 451,651 406,948
-------- --------
Shareholders' equity 30,821 27,941
-------- --------
Total liabilities and shareholders' equity $482,472 $434,889
======== ========
Net interest income $3,797 $3,376
====== ======
Interest rate spread 3.05% 3.00%
==== ====
Net yield on weighted average
interest-earning assets 3.25% 3.20%
==== ====
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1996 September 30, 1995
------------------ ------------------
(Dollars in thousands)
Average Average
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
------- -------- ---- ------- -------- ----
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans $256,349 $16,251 8.45% $242,847 $15,190 8.34%
Mortgage-backed securities 167,552 9,099 7.24 123,162 6,763 7.32
Other (1) 33,374 1,706 6.82 36,812 1,949 7.06
-------- ------ ---- -------- ------ -----
Total interest-earning assets 457,275 27,056 7.89 402,821 23,902 7.91
-------- ------ ---- -------- ------ -----
Non-interest earning assets 14,253 14,343
-------- --------
Total assets $471,528 $417,164
======== ========
Interest bearing liabilities:
Deposits $276,266 9,010 4.35 $259,838 8,150 4.18
Borrowings 161,897 6,743 5.55 128,400 5,677 5.89
-------- ------ ---- -------- ------ -----
Total interest-bearing liabilities 438,163 15,753 4.79 388,238 13,827 4.75
-------- ------ ---- -------- ------ -----
Non-interest-bearing liabilities 2,633 2,791
-------- --------
Total liabilities 440,796 391,029
-------- --------
Shareholders' equity 30,732 26,135
-------- --------
Total liabilities and shareholders' equity $471,528 $417,164
======== ========
Net interest income $11,303 $10,075
======= =======
Interest rate spread 3.10% 3.16%
==== ====
Net yield on weighted average
interest-earning assets 3.30% 3.33%
==== ====
</TABLE>
(1) Consists of interest-earning deposits, short-term funds, investment
securities, and Federal Home Loan Bank Stock.
Provision for Credit Losses
The provision for credit losses was $100,000 and $300,000 for the three
and nine month periods ended September 30, 1996 compared to $150,000 and
$500,000 for the three month and nine month periods in the prior year, a $50,000
and $200,000 decrease for the three and nine month periods, respectively. As of
September 30, 1996, the allowance for credit losses totaled $3,760,177 or 1.42%
of total loans including loans held for sale compared to $3,524,316 or 1.41% of
total loans at September 30, 1995.
Other Income
Other income decreased by $868,514 for the nine month period ended
September 30, 1996 from the comparable period of 1995. During the nine month
period ended September 30, 1995, two significant one-time events impacted
earnings. The Bank received a recovery from an insurance carrier for $672,000
and interest on a Federal tax refund for $135,129. In addition, losses relating
to the sale of loans held for sale of $79,445 were recognized for the nine month
period ended September 30, 1996 compared to gains of $102,149 for the same
period of 1995. These decreases were partially offset by gains recognized on the
sale of investment securities held for trading and sales of mortgage-backed
securities available-for-sale totaling $207,417 for the nine month period ended
September 30, 1996 compared to $116,070 for the comparable period ended
September 30, 1995.
Operating Expenses
General and Administrative Expense - General and administrative expenses
increased $272,661 and $731,895 or 13.9% and 12.8% for the three and nine month
periods ended September 30, 1996 from the comparable periods ended September 30,
1995. The increase in general and administrative expenses for the three and nine
month
12
<PAGE>
periods ended September 30, 1996 was attributable to costs associated with the
operation of ten retail banking offices.
SAIF Recapitalization Assessment - On September 30, 1996, the Deposit Insurance
Funds Act of 1996 was enacted. The legislation requires financial institutions
with SAIF insured deposits to pay a special assessment based on deposits as of
March 31, 1995 to recapitalize the SAIF. The assessment rate of $.657 per $100
of assessable deposits amounted to a $1,564,323 charge to income before taxes
during the quarter ended September 30, 1996. Beginning January 1997, the deposit
insurance premium will be reduced from $.23 per $100 to $.0645 per $100 of
assessable deposits. In addition, a nominal refund on the fourth quarter 1996
insurance premium is expected.
Amortization of Deposit Premium - In January 1995, the Bank acquired two branch
offices with deposits of approximately $15.9 million. The premium paid for these
deposits are being amortized over a period not exceeding the estimated average
remaining life of the customer base acquired.
Real Estate Operations (Net) - Real estate operations, net expense increased
$60,001 and $173,073 for the three and nine month periods ended September 30,
1996, compared to the same periods of the prior year. Real estate operations
include rental income, real estate operations expense, and net loss provisions
or recoveries. Net loss provisions increased $52,198 and $141,930 for the three
and nine month periods ended September 30, 1996, compared to the same periods of
the prior year. Real estate operations expense increased $17,993 and $56,474
during the three and nine month periods ended September 30, 1996, compared to
the same periods of the prior year.
Income Tax Expense
Income tax expense decreased $493,396 and $715,946 or 90.8% and 35.4%for
the three and nine month periods ended September 30, 1996 as compared to the
same periods in 1995. The decrease was attributable to a decrease in pre-tax
income for the three and nine month periods ended September 30, 1996 of
$1,388,238 and $1,910,527 or 88.4%and 34.0%, respectively, from the comparable
periods of 1995.
A recovery of a valuation allowance related to deferred income taxes was
recognized in the amount of $732,203 during the quarter ended September 30,
1996. The recovery was recognized after considering the impact of a recent
change in the Internal Revenue Code and the estimated timing of temporary
differences related to deferred loan fees for tax purposes.
Financial Condition
Total assets increased to $487,208,683 as of September 30, 1996 from
$453,038,725 on December 31, 1995, an increase of 10.1% on an annualized basis.
This increase was mainly attributable to an increase in mortgage-backed
securities. Mortgage-backed securities increased $30,893,151 to $177,653,375 on
September 30, 1996 from $146,760,224 on December 31, 1995.
Total liabilities increased to $455,752,957 as of September 30, 1996
from $422,935,997 as of December 31, 1995, an increase of 10.3% on an annualized
basis. Deposits increased to $275,239,930 as of September 30, 1996 from
$270,175,738 on December 31, 1995. Advances from the Federal Home Loan Bank and
other borrowed funds increased to $177,011,300 as of September 30, 1996 from
$150,126,300 on December 31, 1995 . This increase of $26,885,000 was primarily
used to fund the purchases of mortgage-backed securities.
Shareholders' equity increased to $31,455,726 as of September 30, 1996
from $30,102,728 as of December 31, 1995. This increase was primarily the result
of net income of $3,193,379 for the nine months ended September 30, 1996, less
cash dividends of $730,758 declared during the period. In addition, investments
classified as available-for-sale in accordance with the Financial Accounting
Standards Board Statement No. 115 "Accounting for Certain Investments in Debt
and Equity Securities" are required to be marked to market on an after-tax basis
and unrealized gains or losses reflected as adjustments to shareholders' equity.
Unrealized losses
13
<PAGE>
increased $1,055,623 to $1,186,876 at September 30, 1996 compared to unrealized
losses of $131,253 at December 31, 1995.
Asset Quality
The Company's non-performing assets consist of non-accrual loans, real
estate owned and other repossessed assets. The following table sets forth
information regarding non-performing assets.
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
Non-accrual loans
Residential loans $2,404,787 $2,308,546
Commercial loans 492,874 351,566
Consumer loans 263,450 261,347
---------- ----------
Total non-accrual loans 3,161,111 2,921,459
Real estate owned 646,227 480,763
Other repossessed assets 6,500 6,000
---------- ----------
Total non-performing assets $3,813,838 $3,408,222
========== ==========
Total non-performing assets as a
percent of total assets .78% .75%
=== ===
</TABLE>
The Company's level of non-performing assets is affected by adverse
situations that may affect a borrower's ability to repay and other conditions
beyond the Company's control. The Company's management monitors the quality of
the Company's assets on a regular basis.
Liquidity and Committed Resources
Liquidity is maintained at a sufficient level to generate cash to fund
current loan demand and pay operating expenses. Sources of funds are obtained
from increases in deposits, loan principal repayments, sales of loans and
investments, increases in borrowed money and from operations. While loan
principal repayments are a relatively stable source of funds, deposit flows are
greatly influenced by general interest rates, economic conditions and
competition. As a member of the Federal Home Loan Bank (FHLB) system, First Home
borrows from the FHLB of New York. First Home also utilizes reverse repurchase
agreements collateralized by mortgage-backed securities or other securities.
Management believes that First Home has sufficient borrowing capacity to
compensate for reductions in other sources of funds such as deposits.
First Home had 6.82% of its assets qualifying for liquidity under
applicable federal regulations as of September 30, 1996. The overall liquidity
percentage requirement is currently 5% on an average monthly basis.
At September 30, 1996, First Home had $10,366,939 in outstanding
commitments. It is anticipated that these commitments will fund within the next
year and funds will be available from normal cash flows.
Interest Rate Risk Management
First Home has a program to control interest rate risk. The strategy
includes an emphasis on originating adjustable rate mortgage (ARM) loans, the
purchase of adjustable rate and short-term mortgage-backed securities (MBS) and
the origination of short-term consumer loans. Management maintains interest rate
risk within prescribed limits. First Home implemented an internal
asset/liability modeling system to monitor the effect on income of changing
market interest rates.
First Home also monitors the difference between the amount of
interest-earning assets maturing or repricing within a specific time period and
the amount of interest-bearing liabilities maturing or repricing within that
time period (gap). A gap is considered positive when the amount of interest rate
sensitive assets exceeds the amount of interest rate sensitive liabilities. When
interest rate sensitive liabilities exceed interest rate sensitive assets, the
gap
14
<PAGE>
is considered negative. However, because all interest rates and yields do not
adjust at the same velocity, the gap is only a general indicator of interest
rate sensitivity.
During a period of rising interest rates, a negative gap tends to
adversely affect net interest income while a positive gap tends to increase net
interest income. During a period of declining interest rates, a negative gap
tends to increase net interest income while a positive gap tends to adversely
affect net interest income.
First Home's net interest income tends to increase in periods of
declining interest rates because its interest-bearing liabilities generally
reprice faster than its interest-earning assets. First Home's net interest
income tends to decrease in periods of rising interest rates.
The following table summarizes the amount of interest-earning assets and
interest-bearing liabilities outstanding as of September 30, 1996 , which are
anticipated to mature, prepay or reprice in each of the time periods shown.
Adjustable and floating rate assets are included in the period in which interest
rates are next scheduled to adjust rather than in the period in which they are
due. Loans and MBS are included in the periods in which they are anticipated to
be repaid. If available, estimated prepayment speeds were obtained from external
sources. Otherwise, they were estimated by management based on the experience of
the portfolio. Non-performing loans have been excluded from interest-earning
assets. Money market deposits, NOW and savings accounts which are subject to
immediate withdrawal and repricing are classified at decay rates based upon
assumptions provided by the Office of Thrift Supervision (OTS).
<TABLE>
<CAPTION>
Twelve
Months 1-3 3-5 5-10 10-20 Over 20
or less Years Years Years Years Years Total
------- ----- ----- ----- ----- ----- -----
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Residential mortgage loans
Adjustable rate $ 55,520 $ 18,725 $ 419 $ --- $ --- $ --- $ 74,664
Fixed rate 24,744 36,993 25,489 32,015 11,936 281 131,458
Mortgage-backed securities
Adjustable rate 92,638 --- --- --- --- --- 92,638
Fixed rate 15,157 22,349 15,512 21,210 11,532 1,090 86,850
Consumer and commercial loans
Adjustable rate 10,418 3,085 346 --- --- --- 13,849
Fixed rate 17,833 15,203 5,520 2,914 280 --- 41,750
Loans held for sale 981 --- --- --- --- --- 981
Investment portfolio 4,992 3,965 13,976 1,641 --- 9,342 33,916
Investment securities held for trading 59 --- --- --- --- --- 59
-------- -------- -------- -------- -------- ------- --------
Total 222,342 100,320 61,262 57,780 23,748 10,713 476,165
-------- -------- -------- -------- -------- ------- --------
Interest-bearing liabilities:
Deposits
Savings accounts 5,065 8,102 5,992 9,013 6,234 1,771 36,177
NOW and non-interest
bearing demand accounts 5,596 8,499 5,855 7,858 4,315 793 32,916
Money market accounts 14,597 17,021 8,104 6,213 1,124 27 47,086
Certificates of deposit 73,580 57,485 27,715 --- --- --- 158,780
Borrowings 133,926 35,603 7,482 --- --- --- 177,011
-------- -------- -------- -------- -------- ------- --------
Total 232,764 126,710 55,148 23,084 11,673 2,591 451,970
-------- -------- -------- -------- -------- ------- --------
Excess int.-earning assets (liabilities) $(10,422) $(26,390) $ 6,114 $34,696 $12,075 $ 8,122 $ 24,195
======== ======== ======== ======= ======= ======= ========
Cumulative excess interest-earning
asset (liabilities) $(10,422) $(36,812) $(30,698) $ 3,998 $16,073 $24,195
======== ======== ======== ======= ======= =======
Ratio of GAP during the period
to total assets (2.14)% (5.42)% 1.26% 7.12% 2.48% 1.67%
===== ===== ==== ==== ==== ====
Ratio of cumulative GAP
to total assets (2.14)% (7.56)% (6.30)% .82% 3.30% 4.97%
===== ===== ===== === ==== ====
</TABLE>
15
<PAGE>
Capital
First Home is in full compliance with its capital requirements. Management
believes that, under current regulations, First Home will continue to meet its
minimum capital requirements in the foreseeable future. The table below presents
First Home's required, actual and excess capital at September 30, 1996.
<TABLE>
<CAPTION>
Percentage
Percentage Percentage of Risk/
of Core of Tangible Weighted
Amount Assets Amount Assets Amount Assets
------ ------ ------ ------ ------ ------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Actual regulatory capital $31,200 6.4% $31,200 6.4% $33,678 16.6%
Minimum required
regulatory capital 14,599 3.0 7,299 1.5 16,248 8.0
------ --- ----- --- ------ ---
Excess capital $16,601 3.4% $23,901 4.9% $17,430 8.6%
======= === ======= === ======= =====
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Selected Financial and Other Data
- -------------------------------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30
1996 1995 1996 1995
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest rate spread 3.05% 3.00% 3.10% 3.16%
Net yield on interest-earning assets 3.25% 3.20% 3.30% 3.33%
Return on average assets .72% .94% .89% 1.15%
Return on average equity 11.22% 14.70% 13.62% 18.37%
General and administrative
expenses to average assets 1.85% 1.81% 1.82% 1.82%
Ratio of interest-earning assets to
interest-bearing liabilities 1.04x 1.04x 1.04x 1.04x
Ratio of non-performing assets
to total assets at end of period --- --- .78% .85%
Dividends per common share $.12 $ .12 $ .36 $ .36
Book value per share
at end of period --- --- $15.50 $13.89
</TABLE>
17
<PAGE>
FIRST HOME BANCORP INC.
AND SUBSIDIARY
Part II: Other Information
Item 6: Exhibit and Other Reports on Form 8-K
(A) Exhibit 27 - Financial Data Schedule
(B) No reports on Form 8-K were filed during the quarter for which this
report is filed.
18
<PAGE>
FIRST HOME BANCORP INC.
AND SUBSIDIARY
SIGNATURES
Pursuant to the requirements 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.
First Home Bancorp Inc.
(Registrant)
Date: November 8, 1996 /s/Stephen D. Miller
-----------------------------------
Stephen D. Miller
President/Chief Executive Officer
Date: November 8, 1996 /s/Robert A. DiValerio
-----------------------------------
Robert A. DiValerio
Sr. Executive Vice President/
Chief Financial Officer
19
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE QUARTERLY REPORT
ON FORM 10-Q FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001009195
<NAME> FIRST HOME BANCORP INC
<MULTIPLIER> 1,000
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 4,961,084
<INT-BEARING-DEPOSITS> 1,055,126
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 59,375
<INVESTMENTS-HELD-FOR-SALE> 112,779,633
<INVESTMENTS-CARRYING> 90,420,889
<INVESTMENTS-MARKET> 90,966,364
<LOANS> 260,206,616
<ALLOWANCE> 3,760,177
<TOTAL-ASSETS> 487,208,683
<DEPOSITS> 275,239,930
<SHORT-TERM> 133,926,000
<LIABILITIES-OTHER> 3,501,727
<LONG-TERM> 43,085,300
0
0
<COMMON> 0
<OTHER-SE> 31,455,726
<TOTAL-LIABILITIES-AND-EQUITY> 487,208,683
<INTEREST-LOAN> 16,251,328
<INTEREST-INVEST> 10,805,212
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 27,056,540
<INTEREST-DEPOSIT> 9,010,117
<INTEREST-EXPENSE> 15,753,289
<INTEREST-INCOME-NET> 11,303,251
<LOAN-LOSSES> 300,000
<SECURITIES-GAINS> 207,417
<EXPENSE-OTHER> 8,342,877
<INCOME-PRETAX> 3,711,980
<INCOME-PRE-EXTRAORDINARY> 3,711,980
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,139,379
<EPS-PRIMARY> 1.54
<EPS-DILUTED> 1.54
<YIELD-ACTUAL> 7.89
<LOANS-NON> 3,161,111
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,562,330
<CHARGE-OFFS> 234,629
<RECOVERIES> 132,476
<ALLOWANCE-CLOSE> 3,760,177
<ALLOWANCE-DOMESTIC> 3,760,177
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
