UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 5TH STREET, N.W.
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
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 No. 028250
CNS BANCORP, INC.
Delaware 43-1738315
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
427 Monroe Street, Jefferson City, Missouri 65101
- ------------------------------------------- ----------------
Registrant's telephone number, including area code (573) 634-3336
Not applicable
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such report),
and (2) has been subject to such filing requirements for the past 90 days. Yes X
No .
Indicate the number of shares outstanding of the issuer's classes of common
stock, as of the latest practicable date.
Class Outstanding September 30, 1997
Common Stock, par value $.01 per share 1,653,125 Shares
<PAGE>
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CNS BANCORP, INC. AND SUBSIDIARY
FORM 10-QSB
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
INDEX
PAGE NO.
PART I - Financial Information
Consolidated Balance Sheets 1
Consolidated Statements of Earnings 2
Consolidated Statements of Cash Flows 3
Notes to Consolidated Financial Statements 4
Management's Discussion and Analysis of 6
Financial Condition and Results of Operations
PART II - Other Information 11
<PAGE>
<PAGE>
CNS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED)
ASSETS SEPTEMBER 30,1997 DECEMBER 31,1996
----------------- ----------------
CASH AND DUE FROM DEPOSITORY
INSTITUTIONS (INCLUDING
INTEREST-BEARING ACCOUNTS
TOTALING $4,204,131 IN 1996
AND $2,337,631 IN 1997) $2,968,818 $4,572,026
SECURITIES AVAILABLE-FOR-SALE $21,922,624 $27,574,516
STOCK IN FEDERAL HOME LOAN BANK $939,300 $939,300
LOANS HELD-FOR-SALE, NET $113,110 $570,986
LOANS RECEIVABLE, NET $67,371,834 $60,980,826
ACCRUED INTEREST RECEIVABLE $597,889 $619,454
EQUITY IN BRIAR POINTE,LLC $694,632 $0
EQUITY IN BALES BROTHERS, INC. J.V. $467,995 $0
PREMISES AND EQUIPMENT, NET $1,650,532 $1,657,421
INCOME TAX RECEIVABLE $286,057 $486,321
OTHER ASSETS $397,775 $80,341
-------- -------
TOTAL ASSETS $97,410,566 $97,481,191
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
DEPOSITS $72,965,517 $72,880,431
ACCRUED INTEREST ON DEPOSITS $130,120 $92,381
ADVANCES FROM BORROWERS FOR TAXES
AND INSURANCE $229,184 $57,299
ACCRUED EXPENSES AND OTHER
LIABILITIES $387,401 $251,802
----------- -----------
TOTAL LIABILITIES $73,712,222 $73,281,913
----------- -----------
COMMON STOCK, $.01 PAR VALUE:
AUTHORIZED, 6,000,000 SHARES;
1,653,125 SHARES ISSUED $16,531 $16,531
ADDITIONAL PAID-IN-CAPITAL $16,048,210 $16,003,502
RETAINED EARNINGS, SUBSTANTIALLY
RESTRICTED $10,428,660 $10,044,280
DEFERRED COMPENSATION - ESOP ($1,178,152) ($1,249,411)
DEFERRED COMPENSATION - MRDP ($981,543) $0
INVESTMENTS HELD IN TRUST FOR
EXEC. DEF. COMP. PLAN ($151,342) ($127,428)
UNREALIZED LOSS ON SECURITIES NET
OF DEFERRED TAXES ($484,020) ($488,196)
---------- -----------
TOTAL STOCKHOLDERS' EQUITY $23,698,344 $24,199,278
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $97,410,566 $97,481,191
=========== ===========
<PAGE>
<PAGE>
CNS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
------ ------ ------ ------
INTEREST INCOME
MORTGAGE LOANS $1,301,575 $1,088,381 $3,738,019 $3,171,480
CONSUMER AND OTHER LOANS $45,008 $28,991 $160,894 $73,372
INVESTMENT SECURITIES $140,919 $255,952 $511,912 $419,647
MORTGAGE-BACKED SECURITIES $171,181 $194,181 $528,092 $612,458
OTHER INTEREST-EARNING ASSETS $107,845 $131,035 $343,376 $544,632
----------- ---------- ---------- ----------
TOTAL INTEREST INCOME $1,766,528 $1,698,540 $5,282,293 $4,821,589
----------- ---------- ---------- ----------
INTEREST EXPENSE
DEPOSITS $921,789 $917,460 $2,721,120 $2,846,131
BORROWED MONEY $0 $221 $890 $221
----------- ---------- ---------- ----------
TOTAL INTEREST EXPENSE $921,789 $917,681 $2,722,009 $2,846,352
----------- ---------- ---------- ----------
NET INTEREST INCOME $844,739 $780,859 $2,560,284 $1,975,237
PROVISION FOR LOAN LOSSES $15,505 $40,368 $10,869 $42,262
----------- ---------- ---------- ----------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES $829,234 $740,491 $2,549,415 $1,932,975
NONINTEREST INCOME
LOAN SERVICING FEES $11,652 $13,791 $36,646 $41,737
INCOME FROM REAL ESTATE OWNED $1,650 $1,650 $4,700 $186,370
NET GAIN ON SALE OF ASSETS $0 $0 $6,156 $51,652
OTHER $31,799 $26,247 $91,463 $69,197
----------- ---------- ---------- ----------
TOTAL NONINTEREST INCOME $45,101 $41,688 $138,965 $348,956
NONINTEREST EXPENSE
COMPENSATION AND BENEFITS $332,840 $285,911 $884,332 $767,287
OCCUPANCY AND EQUIPMENT $65,774 $62,339 $189,745 $179,069
DEPOSIT INSURANCE PREMIUMS $11,931 $554,092 $35,793 $643,864
OTHER $144,413 $115,785 $516,041 $338,239
----------- ---------- ---------- ----------
TOTAL NONINTEREST EXPENSE $554,958 $1,018,127 $1,625,911 $1,928,459
----------- ---------- ---------- ----------
NET INCOME(LOSS) BEFORE
INCOME TAXES $319,378 ($235,948) $1,062,469 $353,472
PROVISION FOR INCOME TAXES $127,745 ($64,043) $424,967 $68,707
----------- ---------- ---------- ----------
NET INCOME (LOSS) $191,633 ($171,905) $637,502 $284,765
========= ========= ======== ========
NET INCOME PER SHARE $0.13 ($0.10) $0.42 $0.17
WEIGHTED AVERAGE SHARES OUTSTANDING 1,528,184 1,653,125 1,528,184 1,653,125
DIVIDENDS PAID PER SHARE $0.06 N/A $0.16 N/A
<PAGE>
<PAGE>
CNS BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES: -------- --------
NET INCOME $637,502 $284,765
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
FLOWS PROVIDED BY (USED FOR) OPERATING ACTIVITIES:
DEPRECIATION $101,701 $96,048
PROVISION FOR LOAN LOSSES $10,869 $42,262
(GAIN)ON SALE OF REAL ESTATE OWNED $0 ($200,717)
AMORTIZATION OF PREMIUMS ON
SECURITIES AVAILABLE-FOR-SALE $23,288 $26,945
PROCEEDS FROM SALE OF LOANS HELD-FOR-SALE $607,641 $4,081,012
ORIGINATION OF LOANS HELD-FOR-SALE ($113,110) ($4,883,496)
(GAIN) ON SALES OF LOANS HELD-FOR-SALE $0 ($13,332)
COMPENSATION EXPENSE - ESOP $115,967 $62,092
COMPENSATION EXPENSE - MRDP $51,660 $0
DECREASE (INCREASE) IN:
ACCRUED INTEREST RECEIVABLE $21,565 ($153,225)
OTHER ASSETS ($317,434) $175,877
INCOME TAX RECEIVABLE $197,480 ($254,823)
INCREASE (DECREASE) IN:
ACCRUED EXPENSES AND OTHER LIABILITIES $173,338 $728,078
---------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES $1,510,467 ($8,514)
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
LOANS:
LOAN (ORIGINATIONS) AND PRINCIPAL PAYMENTS-NET ($2,791,213) ($3,017,575)
PURCHASES OF:
LOANS RECEIVABLE ($3,647,320) ($1,041,450)
SECURITIES AVAILABLE-FOR-SALE ($1,800,483) ($16,014,757)
PROCEEDS FROM MATURITY OR REPAYMENT OF:
SECURITIES AVAILABLE-FOR-SALE $7,436,047 $6,587,962
PROCEEDS FROM SALE OR CALL OF:
SECURITIES AVAILABLE-FOR-SALE $0 $150,000
EQUITY INVESTMENT IN BRIAR POINTE, LLC ($694,632) $0
EQUITY INVESTMENT IN BALES BROTHERS, INC. J.V. ($467,995) $0
INVESTMENT IN MRDP TRUST TO REPURCHASE STOCK ($1,033,203) $0
PROCEEDS FROM SALES OF REAL ESTATE OWNED $0 $362,704
CASH OUTFLOWS FOR PREMISES AND EQUIPMENT ($94,810) ($22,899)
--------- ---------
NET CASH PROVIDED BY INVESTING ACTIVITIES ($3,093,609) ($12,996,015)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
NET INCREASE (DECREASE) IN:
DEPOSITS $85,086 ($2,425,248)
ADVANCES FROM BORROWERS FOR TAXES AND INSURANCE $171,885 $168,530
PROCEEDS FROM SALE OF COMMON STOCK $0 $14,708,750
EXECUTIVE DEFERRED COMPENSATION TRUST ($23,914) $0
DIVIDENDS PAID TO SHAREHOLDERS ($253,123) $0
----------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES ($20,066) $12,452,032
NET INCREASE(DECREASE) IN CASH AND ----------- ----------
CASH EQUIVALENT ($1,603,208) ($552,497)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD $4,572,026 $2,855,944
CASH AND CASH EQUIVALENTS AT ---------- ----------
END OF PERIOD $2,968,818 $2,303,447
========== ==========
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD FOR:
INTEREST ON DEPOSITS $580,905 $610,346
INCOME TAXES $121,750 $102,301
NON-CASH TRANSACTIONS DURING THE PERIOD:
EXCHANGE OF COMMON STOCK FOR ESOP SHARES $1,322,500
<PAGE>
<PAGE>
CNS BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Generally Accepted Accounting Principles
(GAAP) for interim financial information and with the instructions to Form
10-QSB and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by GAAP for complete
financial statements. In the opinion of management, all adjustments
necessary for a fair presentation have been included. The results of
operations and other data for the three months and nine months ended
September 30, 1997 are not necessarily indicative of results that may be
expected for the entire fiscal year ending December 31, 1997.
The unaudited consolidated financial statements include the amounts of
CNS Bancorp, Inc. (the "Company") and its wholly-owned subsidiary, City
National Savings Bank, FSB (the "Savings Bank") and the Savings Bank's
wholly-owned subsidiary, Parity Insurance Agency, Inc., and its
wholly-owned subsidiary, City National Real Estate, Inc., for the three
months and nine months ended September 30, 1997. Material intercompany
accounts and transactions have been eliminated in consolidation.
(2) Conversion to Stock Ownership
On December 19, 1995 the Board of Directors of the Savings Bank
unanimously adopted a Plan of Conversion pursuant to which the Savings
Bank converted from a federally chartered mutual savings bank to a
federally chartered stock savings bank, with the concurrent formation of
the Company. The Company, on June 11, 1996, sold 1,653,125 shares of
common stock at $10.00 per share to depositors, borrowers and employees of
the Savings Bank in a subscription offering. The proceeds from the
conversion, after recognizing conversion expenses and underwriting costs
of $531,424 were $15,999,826 and are recorded as common stock and
additional paid in capital on the accompanying unaudited consolidated
statement of financial condition. The Company utilized 50% of the net
proceeds to purchase all of the capital stock of the Savings Bank.
The Savings Bank has established for eligible employees an Employee Stock
Ownership Plan ("ESOP") in connection with the conversion. The ESOP
borrowed $1,322,500 from the Company and purchased 132,250 common shares
issued in the conversion. The Savings Bank is expected to make scheduled
discretionary cash contributions to the ESOP sufficient to service the
amount borrowed. The $1,322,500 in stock issued by the Company is
reflected in the accompanying consolidated financial statements as a
charge to unearned compensation and a credit to common stock and paid-in
capital. The unamortized balance of unearned compensation is shown as a
deduction of stockholders' equity. The unpaid balance of the ESOP loan is
eliminated in consolidation.
(3) Earnings Per Share
Earnings per share for the three months and nine months ended September
30, 1997 have been calculated to be $.13 and $.42 respectively based upon
the weighted average number of shares outstanding.
(4) Repurchase of stock:
During the three months ended September 30, 1997 the Company repurchased
48,025 shares of common stock at an average price of $16.70 per share for
the MRDP trust.
<PAGE>
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
General
On June 11, 1996, City National Savings Bank, FSB (Savings Bank) converted from
mutual to stock form and became a wholly-owned subsidiary of a newly formed
Delaware holding company, CNS Bancorp, Inc. (Company). The Company sold
1,653,125 shares of common stock at $10 per share in conjunction with a
subscription offering to the Savings Bank's Employee Stock Ownership Plan (ESOP)
and eligible account holders.
The Company's principal business is the business of the Savings Bank. Therefore,
the discussion in the Managements's Discussion and Analysis of Financial
Condition and Results of Operation relates to the Savings Bank and its
operations.
Liquidity and Capital Resources
The Savings Bank's principal sources of funds are cash receipts from deposits,
loan repayments by borrowers and net earnings. The Savings Bank has an agreement
with the Federal Home Loan Bank of Des Moines to provide cash advances, should
the need for additional funds be required.
For regulatory purposes, liquidity is measured as a ratio of cash and certain
investments to withdrawable deposits. The minimum level of liquidity required by
regulation is presently 5%. The Savings Bank's liquidity ratio was approximately
15.23% at September 30, 1997.
Commitments to originate adjustable-rate mortgage loans at September 30, 1997
were approximately $121,000. Commitments to originate fixed-rate mortgage loans
at September 30, 1997 were approximately $255,000.
The thrift industry historically has accepted interest rate risk as a part of
its operating philosophy. Long-term, fixed-rate loans were funded with deposits
which adjust to market interest rates more frequently. From the early 1980's up
until 1996, the Savings Bank has originated primarily adjustable-rate mortgage
loans for it's loan portfolio. In early 1996 the Savings Bank began keeping some
of the fixed rate loans it originates. As of September 30, 1997 the Savings Bank
held adjustable-rate mortgage loans of $47 million or 71.36% of the total
mortgage loans.
The Savings Bank is required to meet certain tangible, core and risk-based
capital requirements. The following table presents the Savings Bank's capital
position relative to its regulatory capital requirements at September 30, 1997:
<PAGE>
<PAGE>
Percent of Adjusted
Amount Total Assets
(Unaudited)
(Dollars in Thousands)
Tangible capital $18,655 19.92%
Tangible capital requirement $1,405 1.50%
------------------------
Excess $17,250 18.42%
======= ======
Core capital $18,655 19.92%
Core capital requirement $2,809 3.00%
------------------------
Excess $15,846 16.92%
======= ======
Risk-based capital $19,034 40.19%
Risk-based capital requirement $3,789 8.00%
------------------------
Excess $15,245 32.19%
======= ======
Financial Condition
Assets decreased from $97.5 million at December 31, 1996 to $97.4 million at
September 30, 1997. Cash and due from depository institutions decreased from
$4.6 million at December 31, 1996 to $3 million at September 30, 1997 due to the
funding of the CNS Bancorp, Inc. MRDP Trust to repurchase stock, the investment
in Briar Pointe, LLC, a single family home development and the investment in a
joint venture with Bales Brothers, Inc. Securities available-for-sale decreased
from $27.6 million at December 31, 1996 to $21.9 million at September 30, 1997.
Loans held-for-sale and loans receivable, net increased from $61.6 million at
December 31, 1996 to $68.5 million at September 30, 1997 due primarily to the
favorable interest rate environment during the period.
Equity in Briar Pointe, LLC is the result of an investment in June 1997 by CNS
Bancorp, Inc. in a real estate joint venture in Waynesville, Mo. known as Briar
Pointe Development Co., LLC. Briar Pointe, LLC will develop and sell 125
building lots for single family homes in a new subdivision known as Briar Pointe
located in the city of Waynesville, Missouri. The project is expected to be
completed within the next three years. CNS Bancorp, Inc. has a 55% interest and
two individuals have a 45% interest. CNS Bancorp, Inc. will provide the
financing and the individuals will provide the management for the project. CNS
Bancorp, Inc. will receive interest on its investment at an interest rate of
8.5% and the manager will receive a management fee of $75,000. When all lots
have been sold any profit will be shared with CNS Bancorp, Inc. to receive 55%
and other investors to receive 45%. At September 30, 1997 nine lots had been
sold at an average price of $19,000.
Equity in Bales Brothers, Inc. J.V. is the result of an investment in a joint
venture which will be building single family homes for sale in the Briar Pointe
subdivision. CNS Bancorp, Inc. provides the funds and Bales Brothers, Inc.
provides the labor and management for the construction projects. CNS Bancorp,
Inc. will receive interest on its investment at an interest rate of 8.5% and
Bales Brothers, Inc. will receive compensation for its labor. When a house is
sold any profit will be shared with CNS Bancorp, Inc. to receive 50% and Bales
Brothers, Inc. to receive 50%. At September 30, 1997 Bales Brothers, Inc. had
seven houses under construction in the Briar Pointe subdivision.
Deposits increased from $72.9 million at December 31, 1996 to $73.0 million at
September 30, 1997. Accrued interest on deposits, advances from borrowers for
taxes and insurance and accrued expenses and other liabilities also increased
during the first nine months of 1997.
It is the policy of the Savings Bank to cease accruing interest on loans 90 days
or more past due. Nonaccrual loans decreased from $310,000 at December 31, 1996
to $185,000 at September 30, 1997 as a result of the loans being paid current.
Results of Operations
Net earnings increased $364,000, or 211.48%, from ($172,000) for the three
months ended September 30, 1996 to $192,000 for the three months ended September
30, 1997. Net earnings increased $353,000, or 123.87%, from $285,000 for the
nine months ended September 30, 1996 to $638,000 for the nine months ended
September 30, 1997. The primary reasons for the increase in net earnings were
the increase in net interest income and the decrease in noninterest expense
which was partially offset by a decrease in noninterest income due to two
nonrecurring events in 1996 when profits were recognized from the sale of Texas
REO and the cooperative ownership of a data center.
<PAGE>
<PAGE>
Net Interest Income
Net interest income increased $64,000, or 8.18%, from $781,000 for the three
months ended September 30, 1996 to $845,000 for the three months ended September
30, 1997 and $585,000, or 29.62%, from $2.0 million for the nine months ended
September 30, 1996 to $2.6 million for the nine months ended September 30, 1997.
Total interest income increased $68,000, or 4.00%, from $1.7 million for the
three months ended September 30, 1996 to $1.8 million for the three months ended
September 30, 1997 and $461,000, or 9.56%, from $4.8 million for the nine months
ended September 30, 1996 to $5.3 million for the nine months ended September 30,
1997. The increase in total interest income is due primarily to increases in
interest income from mortgage loans and consumer and other loans which was
partially offset by decreases in interest income from investment securities,
mortgage-backed securities and other interest earnings assets. The increases in
interest income from loans is a result of higher average balances and higher
average yields from those assets in 1997 compared to the same time periods in
1996. During 1997, the Savings Bank reduced its portfolio of investments and
mortgage-backed securities and increased it investment in higher yielding loans.
Total interest expense increased $4,000, or .45%, from $918,000 for the three
months ended September 30, 1996 to $922,000 for the three months ended September
30, 1997. Total interest expense decreased $124,00, or 4.37%, from $2.8 million
for the nine months ended September 30, 1996 to $2.7 million for the nine months
ended September 30, 1997. The decrease in interest expense is primarily due to a
decrease in the average deposit balance outstanding during the first nine months
of 1997 compared to the first nine months of 1996 when the stock conversion was
completed.
Provision for Loan Losses
Provision for loan losses is based upon management's consideration of economic
conditions which may affect the ability of borrowers to repay their loans.
Management also reviews individual loans for which full collectibility may not
be reasonably assured and considers, among other matters, the risks inherent in
the Savings Bank's portfolio and the estimated fair value of the underlying
collateral. This evaluation is ongoing and results in variations in the Savings
Bank's provision for loan losses. As a result of this evaluation, the Savings
Bank's provision for loan losses decreased from $40,000 for the three months
ended September 30, 1996 to $16,000 for the three months ended September 30,
1997 and from $42,000 for the nine months ended September 30, 1996 to $11,000
for the nine months ended September 30, 1997. The decrease in the Bank's
provision for loan losses is primarily due to the large recapture of loan losses
during the first quarter of 1997 when a large commercial real estate loan which
was classified at the end of 1996 was paid current.
Noninterest Income
Noninterest income increased $3,000, or 8.19%, from $42,000 for the three months
ended September 30, 1996 to $45,000 for the three months ended September 30,
1997. Noninterest income decreased $210,000, or 60.18%, from $349,000 for the
nine months ended September 30, 1996 to $139,000 for the nine months ended
September 30, 1997. The primary reasons that noninterest income decreased in
1997 were the decrease in income from real estate owned and the gain in 1996 on
the sale of other assets. The Savings Bank recognized a gain of $182,000 on the
sale of Texas real estate owned and a gain of $38,000 from the sale of a
cooperative ownership of a data center during the first nine months of 1996 and
there was no such activity during 1997.
Noninterest Expense
Noninterest expense decreased $463,000, or 45.49%, from $1.0 million for the
three months ended September 30, 1996 to $555,000 for the three months ended
September 30, 1997 and $303,000, or 15.69%, from $1.9 million for the nine
months ended September 30, 1996 to $1.6 million for the nine months ended
September 30, 1997. The decrease in noninterest expense during 1997 is due
primarily to a decrease in deposit insurance premiums which reflected the
special assessment of $513,000 to recapitalize the SAIF fund in the third
quarter of 1996. The decrease in noninterest expense is partially offset by
increases in compensation and benefits and other noninterest expense. The
increase in compensation and benefits is due primarily to the recognition of
more ESOP and MRDP compensation during the first nine months of 1997 than in the
first nine months of 1996. Other noninterest expenses increased primarily due to
first time expenses resulting from operating as a public company.
Income Taxes
Income taxes increased from a benefit of ($64,000) for the three months ended
September 30, 1996 to a provision of $128,000 for the three months ended
September 30, 1997 and from $69,000 for the nine months ended September 30, 1996
to $425,000 for the nine months ended September 30, 1997. The increase in
provision for income taxes is due primarily to the large decrease in taxable
income and a change in the effective income tax rate. The effective income tax
rates used to calculate the provision for income taxes in 1997 is 40%. A lower
rate was applicable last year due primarily to non-taxable income which included
gains on sale of real estate owned.
<PAGE>
<PAGE>
CNS BANCORP, INC. AND SUBSIDIARIES
PART II - Other Information
Item 1 - Legal Proceeding
There are no material legal proceedings to which the Company or the
Savings Bank is a party of or which any of their property is subject. From
time to time, the Savings Bank is a party to various legal proceedings
incident to its business.
Item 2 - Changes in Securities
None.
Item 3 - Defaults upon Senior Securities
Not applicable.
Item 4 - Submission of Matters to a Vote of Security Holders
None.
Item 5 - Other Information
None.
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K: No reports on Form 8-K have been filed during
the quarter for which this report is filed.
<PAGE>
<PAGE>
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.
CNS BANCORP, INC.
-----------------
(Registrant)
DATE: November 13, 1997 BY:/s/ROBERT E. CHILES
----------------- -------------------
Robert E. Chiles, President and
Duly Authorized Officer
BY:/s/DAVID L. JOBE
----------------
David L. Jobe, Treasurer and
Chief Financial Officer
<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 2968818
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<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 21922624
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<INVESTMENTS-MARKET> 0
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<ALLOWANCE> 393318
<TOTAL-ASSETS> 97410566
<DEPOSITS> 72965517
<SHORT-TERM> 0
<LIABILITIES-OTHER> 746705
<LONG-TERM> 0
0
0
<COMMON> 16531
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