<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 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 Number : 33-302132
TRI-STATE, 1ST BANK, INC.
(Exact Name of small business issuer as specified in its charter)
OHIO 34-1824708
- ---------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
16924 St. Clair Avenue
P.O. Box 796
East Liverpool, Ohio 43920
(330) 385-9200
---------------------------------
(Address, including zip code, and
telephone number, including area
code of Principal Executive Officers)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirement for the past 90 days.
Yes X No
--- ---
As of August 14, 1997 there were 410,800 shares outstanding of the issuer's
class of common stock.
<PAGE>
TRI-STATE, 1ST BANK, INC.
INDEX TO QUARTERLY REPORT ON FORM 10-QSB
Page
----
Part I Financial Information
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheet as of June 30, 1997
and December 31, 1996 3
Consolidated Statement of Income for the three
and six months ended June 30, 1997 4
Consolidated Statement of Changes in Stockholders'
Equity for the six months ended June 30, 1997 5
Consolidated Statement of Cash Flows for the six
months ended June 30, 1997 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II Other Information 12
Signatures 13
<PAGE>
Tri-State 1st Bank, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEET
(Unaudited)
June 30, December 31,
1997 1996
--------- ---------
(In Thousands)
ASSETS
Cash and due from banks $ 3,066 $ 3,778
Interest-bearing deposits with other banks 36 99
Federal funds sold 2,500 1,700
Securities available for sale 10,180 9,982
Investment securities (estimated market value of
$2,178 and $2,220) 2,160 2,205
Loans 26,028 24,051
Less allowance for loan losses 300 290
--------- ---------
Net loans 25,728 23,761
Premises and equipment 1,229 1,216
Accrued interest and other assets 463 434
--------- ---------
TOTAL ASSETS $ 45,362 $ 43,175
========= =========
LIABILITIES
Deposits:
Noninterest-bearing demand $ 6,542 $ 5,991
Interest-bearing demand 7,754 8,028
Money market 4,958 4,789
Savings 8,298 7,877
Time 13,078 12,005
--------- ---------
Total deposits 40,630 38,690
Other borrowings 229 279
Accrued interest and other liabilities 232 170
--------- ---------
TOTAL LIABILITIES 41,091 39,139
--------- ---------
STOCKHOLDERS' EQUITY
Common stock, no par value; 1,000,000 shares authorized,
205,400 issued and outstanding 1,284 1,284
Surplus 1,611 1,611
Retained earnings 1,380 1,159
Net unrealized loss on securities (4) (18)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 4,271 4,036
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 45,362 $ 43,175
========= =========
See accompanying notes to the consolidated financial statements.
Page 3
<PAGE>
Tri-State 1st Bank, Inc. and Subsidiary
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
--------- --------- --------- ---------
(In Thousands, Except (In Thousands, Except
Per Share Amounts) Per Share Amounts)
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans, including fees $ 629 $ 567 $ 1,218 $ 1,124
Interest-bearing deposits with other banks 1 1 2 2
Federal funds sold 33 43 55 64
Investment securities:
Taxable 122 115 245 220
Exempt from federal income tax 56 41 110 78
--------- --------- --------- ---------
Total interest income 841 767 1,630 1,488
--------- --------- --------- ---------
INTEREST EXPENSE
Deposits 319 299 618 582
Other borrowings 4 6 8 12
--------- --------- --------- ---------
Total interest expense 323 305 626 594
--------- --------- --------- ---------
NET INTEREST INCOME 518 462 1,004 894
Provision for loan losses 21 15 29 24
--------- --------- --------- ---------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 497 447 975 870
--------- --------- --------- ---------
OTHER OPERATING INCOME
Service fees on deposit accounts 60 61 117 118
Investment security losses (3) - (3) -
Other 21 46 56 68
--------- --------- --------- ---------
Total other operating income 78 107 170 186
--------- --------- --------- ---------
OTHER OPERATING EXPENSE
Salaries and employee benefits 176 155 352 309
Occupancy 42 46 86 89
Furniture and equipment 29 32 57 64
Other 148 139 289 255
--------- --------- --------- ---------
Total other operating expense 395 372 784 717
--------- --------- --------- ---------
Income before income taxes 180 182 361 339
Income taxes 41 51 85 93
--------- --------- --------- ---------
NET INCOME $ 139 $ 131 $ 276 $ 246
========= ========= ========= =========
EARNINGS PER SHARE $ 0.68 $ 0.64 $ 1.34 $ 1.20
AVERAGE SHARES OUTSTANDING 205,400 205,400 205,400 205,400
</TABLE>
See the accompanying notes to the consolidated financial statements.
Page 4
<PAGE>
Tri-State 1st Bank, Inc. and Subsidiary
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Net Unrealized
Common Retained Loss on
Stock Surplus Earnings Securities Total
--------- --------- --------- --------- ---------
(In Thousands Except Per Share Amount)
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996 $ 1,284 $ 1,611 $ 1,159 $ (18) $ 4,036
Net income 276 276
Dividend declared (55) (55)
Net unrealized gain on
securities 14 14
--------- --------- --------- --------- ---------
Balance, June 30, 1997 $ 1,284 $ 1,611 $ 1,380 $ (4) $ 4,271
========= ========= ========= ========= =========
</TABLE>
See accompanying notes to the consolidated financial statements.
Page 5
<PAGE>
Tri-State 1st Bank, Inc. and Subsidiary
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
1997 1996
--------- ---------
(In Thousands)
OPERATING ACTIVITIES
Net income $ 276 $ 246
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 29 24
Depreciation and amortization , net 97 63
Increase in accrued interest receivable (47) -
Increase (decrease) in accrued interest payable (4) 3
Other (29) 260
--------- ---------
Net cash provided by operating activities 322 596
--------- ---------
INVESTING ACTIVITIES
Securities available for sale:
Proceeds from sales 348 257
Proceeds from principal repayments and maturities 1,805 159
Purchases of securities (2,334) (650)
Investment securities:
Proceeds from principal repayments and maturities 28 108
Purchases of securities - (809)
Net loan originations (2,018) (630)
Acquisition of premises and equipment (70) (26)
Proceeds from sale of real estate owned 54 -
--------- ---------
Net cash used for investing activities (2,187) (1,591)
--------- ---------
FINANCING ACTIVITIES
Net increase in deposits 1,940 3,163
Principal payments on other borrowings (50) (47)
--------- ---------
Net cash provided by financing activities 1,890 3,116
--------- ---------
Increase in cash and cash equivalents 25 2,121
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,577 4,107
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,602 $ 6,228
========= =========
See accompanying notes to the consolidated financial statements.
Page 6
<PAGE>
Tri-State 1st Bank, Inc. and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The consolidated financial statements of Tri-State 1st Bank, Inc., (the
"Company"), includes its wholly-owned subsidiary, 1st National Community Bank
(the "Bank"). All significant intercompany balances and transactions have
been eliminated.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with instructions to Form 10-QSB and, therefore, do not
necessarily include all information which would be included in audited
financial statements. The information furnished reflects all normal recurring
adjustments which are, in the opinion of management, necessary for the fair
statement of the results of the period. The results of operations for the
interim periods are not necessarily indicative of the results to be expected
for the full year.
NOTE 2 - PENDING ACCOUNTING PRONOUNCEMENTS
In June 1996, the Financial Accounting Standards Board ("FASB") issued
Statement No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities." The Statement provides consistent
standards for distinguishing transfers of financial assets that are sales from
transfers that are secured borrowings based on control-oriented "financial
components" approach. Under this approach, after a transfer of financial
assets, an entity recognizes the financial and servicing assets it controls
and liabilities it has incurred, derecognizes financial assets when control
has been surrendered and derecognizes liabilities when extinguished. The
provisions of No. 125 are effective for transactions occurring after December
31, 1996, except those provisions relating to repurchase agreements,
securities lending, and other similar transactions and pledged collateral,
which have been delayed until after December 31, 1997 by Statement No. 127,
Deferral of the Effective Date of Certain Provisions of FASB Statement No.
125, an amendment of FASB Statement No. 125." The adoption of these
statements is not expected to have a material impact on financial position or
results of operations.
In July 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income."
Statement No. 130 is effective for fiscal years beginning after December 15,
1997. This statement establishes standards for reporting and presentation of
comprehensive income and its components (revenue, expenses, gains and losses)
in a full set of general purpose financial statements. It requires that all
items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that
is presented with the same prominence as other financial statements.
Statement No. 130 requires that companies (i) classify items of other
comprehensive income by their nature in a financial and (ii) display the
accumulated balance of other comprehensive income separately from retained
earnings and additional paid-in capital in the equity section of the
statement of financial condition. Reclassification of financial statements
for earlier periods provided for comprehensive purposes is required.
On March 3, 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 128, "Earnings Per Share." This statement
re-defines the standards for computing earnings per share (EPS) previously
found in Accounting Principles Board Opinion No. 15, Earnings Per Share.
Statement No. 128 establishes new standards for computing and presenting EPS
and requires dual presentation of "basic" and "diluted" EPS on the face of the
income statement for all entities with complex capital structures. Under
Statement No. 128, basic EPS is to be computed based upon income available to
common shareholders and weighted average number of common shares outstanding
for the period. Diluted EPS is to reflect the potential dilution that could
occur if securities or other contracts to issue common stock were exercised or
converted into common stock or resulted in the issuance of common stock that
then shared in the earnings of the Company. Statement No. 128 also requires
the restatement of all prior-period EPS data presented. The Company will
adopt Statement No. 128 on December 31, 1997 and based on current estimates,
does not believe the effect on adoption will have a significant impact on the
Company's financial position or results of operations.
Page 7
<PAGE>
Tri-State 1st Bank, Inc. and Subsidiary
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Total Assets on June 30, 1997 of $45,362,000 had increased approximately $2.2
million over the $43,175,000 reported as of December 31, 1996. This is a 5.1%
increase in assets for the six month period. Over the same period, Total
Securities increased $153,000 to $12,340,000 from $12,187,000, or 1.3%. Net
loans of $25,728,000 on June 30, 1997, reflect an increase of $1,967,000 or
8.3% during the six month period. Federal Funds Sold at $2,500,000 showed an
$800,000 or 47.1% increase for the six months ended June 30, 1997, while Cash
and Due from Banks decreased $712,000 and Interest Bearing Deposits with other
Banks decreased $63,000.
The increase in Investment Securities as of June 30, 1997 compared with year-
end 1996, is part of a strategy of management to invest funds in the
investment portfolio methodically over a period of time in order to employ
funds not required for loan demand in a manner which will provide safety,
liquidity, and improved earnings potential. Investing in securities
regularly, rather than investment based upon when interest rates are perceived
to be peaking or troughing, helps hedge against the risk of market value
fluctuations which could adversely impact the value of the Company's assets.
There was a $198,000 or 2.0% increase in the Securities Available for Sale
which was partially offset by a $45,000 or 2% decrease in the Investment
Securities Held to Maturity, for a net increase in Investment Securities of
$153,000, after replacement of matured and called securities during the six
month period.
Demand for loans that met the credit standards of the Bank grew nearly as much
as the increase in Total Assets during the six month period. The net increase
in loans constituted 89.9% of the $2.2 million asset growth. The $953,000
increase in Federal Funds Sold and Total Securities was principally funded
from a decrease of $775,000 in Cash and Due from Banks, and Interest Bearing
Deposits with other Banks. Changes in other components accounted for
relatively small remaining differences after these changes in the more
significant elements of Total Assets.
The net growth in loans resulted generally from an increase in loans secured
with real estate mortgages and in commercial loans. Construction loans were up
$63,000, while first mortgage loans on 1 to 4 family residences was up
$993,000. Loans secured with mortgages on nonfarm, nonresidential properties
increased $704,000. Commercial and industrial loans not secured with
mortgages showed an increase of $420,000. There were decreases in consumer
installment loans and state and local government loan obligations of $128,000
and $136,000, respectively. The combined increase in nonresidential loans and
commercial loans of $1.1 million which exceeded the growth of residential
first mortgages is consistent with management's endeavor to achieve a more
balanced mix of loans.
The allowance for loan losses rose from $290,000 to $300,000 for a $10,000, or
3.5% increase for the six month period ended June 30, 1997. The overall ratio
of the allowance to loans receivable remained at the 1.2% level as on December
31, 1996. However, since the rate of increase in net loans of 8.3% was
greater than the increase in the allowances, there was a slight decrease in
the allowance relative to the loans. The relationship between the allowance
and loans receivable is a function of credit quality and known risk factors of
the loan portfolio.
Total Deposits on June 30, 1997, were $40,630,000 for an increase of
$1,940,000 or 5.0% from $38,690,000 on December 31, 1996. The increase in
deposits was roughly equivalent to the dollar increase in loans for the six
month period. The greatest increase in any segment of deposits was $1,073,000
or 8.9% in time deposits, but there were also increases of $551,000 or 9.2% in
Non-interest Bearing Demand Deposits, $421,000 or 5.3% in Savings Accounts and
$169,000 or 3.5% in Money Market Accounts. The only decline was $274,000 or
3.4% in Interest Bearing Demand Deposit Accounts.
The $62,000 or 36.5% increase in Accrued Interest and Other Liabilities on
June 30, 1997, is attributable to increases in accrued interest payable on
deposits and accrued payroll taxes.
Stockholders' Equity increased $235,000 to $4,271,000 on June 30, 1997.
This is an increase of 5.8% for the six month period, and is the result of an
increase in Net Retained Earnings from operations of $221,000 or 19.1%, and an
improvement in the Net Unrealized Loss on Securities from a negative $18,000
to a negative $4,000. The Net Unrealized Loss on Securities is considered
temporary in nature. It is attributable to the market interest rate
environment which showed some decrease in rates and therefore a strengthening
of the market on June 30, 1997, as compared to December 31, 1996.
Page 8
<PAGE>
RESULTS OF OPERATIONS
Comparison of the Six Months Ended June 30, 1997 to 1996
- --------------------------------------------------------
GENERAL.
The Company had Net Income of $276,000 for the six month period ended June 30,
1997. For the same six month period of 1996, the Company had earned $246,000.
The increase of $30,000 represents a 12.2% change over the same period ended
June 30, 1996.
NET INTEREST INCOME.
The Net Interest Income for the first six months of 1997 was up $110,000 from
the six months of 1996 for an increase of 12.3%. A significant factor
contributing to this increase was the $94,000 or 8.4% increase in interest and
fees on loans. New loans and the greater volume of loans outstanding provided
greater loan fee income and higher loan interest revenues in real estate,
commercial and consumer loans. Federal Funds Sold income was down $9,000 or
14.1% as a result of less investible funds being available. Interest income
on securities exempt from federal income tax was up $32,000 or 41.0%. The
government securities and other debt securities income was up $25,000 or 11.4%
also reflecting additions to that segment of the portfolio. Total Interest
Income for the first six months of 1997 was $142,000 greater than the same six
month period of 1996, for an increase of 9.5%.
A $36,000 or 6.2% increase in interest expense on deposits together with a
$4,000 decrease in expense on other borrowings resulted in a $32,000 or 5.4%
increase in Net Interest Income for the six month period.
PROVISION FOR LOAN LOSSES.
Based upon management's continuing evaluation of the loan portfolio, $29,000
was provided for loan losses in 1997. This addition was made to maintain the
allowance for loan losses at an appropriate level. This provision was $5,000
greater than during the first six months of 1996, or an increase of 20.8%. An
increase in loans made during the first six months of 1997 was a primary
reason for increasing the amount of the provision in the current year.
OTHER OPERATING INCOME.
Non-Interest Income decreased by $16,000 to $170,000 for the first six months
of 1997 compared with the same period in 1996, for an 8.6% decrease. Service
fees on deposit accounts decreased $1,000 or .9%, and there was also a $3,000
loss taken on the sale of securities and a $12,000 or 17.7% decrease in other
operating income. The loss was taken on securities in order to switch to
investments which would provide a greater current return. There was a decline
in other operating income primarily because of a reduction in fees received
for credit life fees and other customer service fees.
OTHER OPERATING EXPENSE.
Salaries of employees and benefits increased $43,000 or 13.9% with the hiring
of additional personnel and normal salary and cost increases related to the
existing staff. due to fewer new equipment purchases as older, well-maintained
equipment remained in service. Other operating expense rose $34,000 or 13.3%
as the result of increases in advertising expenses, customer check expense,
postage expense, telephone and costs in initiating the 1st Bank Check Card
service. The Company incurred expenses in 1997 in connection with
organizational cost amortization, printing, accounting fees and legal fees by
the Corporation of $18,000 which were not included in 1996 expenses.
INCOME TAX EXPENSE.
Income tax expense decreased $8,000 or 8.6% from the same six month period in
1996. This decrease occurred in spite of a $22,000 or 6.5% increase in pre-tax
income and results from a greater amount of tax-exempt securities as part
of the total investment account. This reduced the income tax ratio on taxable
income on the Company.
Comparison of the Three Months Ended June 30, 1997 to 1996
- ----------------------------------------------------------
GENERAL.
The Company had Net Income of $139,000 for the three month period ended June
30, 1997. Compared to the same period of 1996 when Net Income was $131,000,
there was an increase of $8,000 or 6.11%.
NET INTEREST INCOME.
There was a $74,000 or 9.7% rise in Interest Income, and an $18,000 or 5.9%
increase in Total Interest Expense. Therefore, the Net Interest Income showed
a $56,000 or 12.1% increase for the three month period in 1997 compared with
the same period in 1996. Interest on Loans and Loan Fees were $629,000 which
was $62,000 or 10.9% higher than for the second quarter of 1996. In 1997, as
the Bank experienced rapid loan growth it was necessary to more aggressively
seek time deposits in order to fund this growth. The Bank experienced
significant growth in all types of deposit accounts. Federal Funds Sold income
was down $10,000 or 23.3% due primarily to using available investible funds to
make loans. Interest on Investment Securities was up $22,000 or 14.1% to
$178,000 for the three month period in 1997 due to the greater number of
securities. Also, the tax equivalent yield on the portfolio was higher in
part because of the greater proportion of investment income from tax exempt
investments, which was up $15,000 or 36.6% to $56,000.
Page 9
<PAGE>
Total Interest Expense for the second quarter 1997 was $323,000 or 5.9% higher
than $305,000 in 1996. Interest expense on other borrowings was down $2,000
while the interest expense on deposits rose $20,000 or 6.7% to $319,000.
The increase in the Net Interest Income was $56,000 or 12.1% to $518,000 when
compared to $462,000 for 1996. In spite of the rise in the cost of deposits,
the increase in loan interest income resulted in more interest income in the
second quarter of 1997 than in the first quarter of the year.
PROVISION FOR LOAN LOSSES.
In order to maintain the allowance for loan losses at an appropriate level, in
light of the increase in loans outstanding and after careful evaluation by
management of the composition of the loan portfolio, $21,000 was allotted as
the provision for loan losses. This is a $6,000 increase over the amount
provided in the second quarter of 1996.
OTHER OPERATING INCOME.
Total Non-Interest Income and Gains/Losses amounted to $78,000 in the quarter,
which was $29,000 or 27.1% below the same quarter in 1996. Service fees on
deposit accounts remained essentially unchanged, but there was a $3,000 loss
taken on the sale of securities and a $25,000 decline in other operating
expenses. $22,000 can be accounted for by a decline in fees from credit life
and other services.
OTHER OPERATING EXPENSE.
Salaries and Employee Benefits for the three month period ended June 30, 1997
were $21,000 or 13.6% higher than the same period in 1996. There were
additional staff members on the payroll during 1997 which were not employed by
the Bank in 1996. Some employee salary adjustments were granted during the
month of June and there was an increase in the cost of medical and disability
insurance.
Occupancy and Furniture and Equipment costs declined by a total of $7,000 or
9.0% in the second quarter of 1997 as compared to the same period in 1996.
Other Expense increased $9,000 or 6.5% over the same period of the prior year.
Increases in advertising and corporate accounting and legal expenses were
responsible for much of this increase. Total Other Operating Expense was up
$23,000 or 6.2% in the second quarter of 1997 compared with the second quarter
of 1996.
INCOME TAX EXPENSE.
Net Current Earnings Before Income Taxes was down $2,000 from the second
quarter of 1996. However, with Income Taxes down $10,000 or 19.6% there was
an $8,000 increase in Net Income which was $2,000 or 1.1% higher than the
second quarter of 1997.
Page 10
<PAGE>
LIQUIDITY AND CASH FLOWS
The liquidity of a banking institution reflects its ability to provide funds
to meet loan requests, to accommodate the possible outflows of deposits and
take advantage of interest rate market opportunities. It requires continuous
analysis by management in order to match the maturities of short-term loans
and investments with the various types of deposits and borrowings. Bank
liquidity is normally considered in terms of the nature and mix of the Bank's
sources and uses of funds.
The Consolidated Statement of Cash Flows for the six month period ended June
30, 1997, shows a decrease in Cash and Cash equivalents of $626,000 to
$5,602,000, but a slight increase of $25,000 from the end of 1996. The Cash
used for investing activities of $2,187,000 was offset by the cash provided by
operating activities and financing activities. During the first six months of
1996, a lower level of investing activities was offset by a more rapid growth
rate of deposits and greater cash provided from operating activities.
Management is not aware of any known trends, events or uncertainties that
would have a material effect on either the liquidity, capital, resources or
operations of the Company. Management is not aware of any current
recommendations by the regulatory authorities, which, if implemented, would
have a material effect on the liquidity, capital resources or operations of
the Company.
In June of 1997, the Board of Directors of the Company declared a 2 for 1
split of the outstanding shares to the stockholders of record on July 9, 1997,
payable on July 25, 1997. The number of shares outstanding will increase to
410,800 on that date. This event should have no material effect on the
liquidity, capital resources or operations of the Company in the opinion of
management.
RISK ELEMENTS
The following schedule presents the non - performing assets at June 30, 1997
and December 31, 1996.
June 30, December 31,
1997 1996
--------- ---------
(In Thousands)
Non-performing loans
Loans past due 90 days
or more $ 36 $ 236
Nonaccrual loans - -
Impaired loans 23 110
--------- ---------
Total non-performing loans 59 346
--------- ---------
Other non-performing assets
Other real estate owned - 54
Repossessed assets - -
--------- ---------
Total other non-performing
assets - 54
--------- ---------
Total non-performing
assets $ 59 $ 400
========= =========
Non-performing loans as a
percentage of total loans 0.23% 1.44%
Non-performing assets as a
percentage of total loans and
other non-performing assets 0.23% 1.66%
During the six month period ended June 30, 1997, loans increased $1,977,000 or
8.2% while the allowance for loan losses was increased by $10,000 or 3.5%.
The percentage of allowance for loan losses to loans and leases outstanding
was 1.16% on June 30, 1997.
The relationship between the allowance for loan losses and outstanding loans
is a function of the credit quality and known risks attributed to the loan
portfolio. An on-going loan review program and credit approval process is
used to maintain credit quality.
Management performs a quarterly evaluation of the allowance for loan losses
which incorporates internal loan review, actual historical losses, negative
economic trends in the local and national market and the other pertinent
factors. The evaluation is presented to and approved by the Board of
Directors of the Bank. Management, through the use of the quarterly evaluation
process believes that the allowance was at an adequate level as of June 30,
1997.
Page 11
<PAGE>
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in rights of the Company's Security holders.
None.
Item 3. Defaults by the Company on its senior securities.
None.
Item 4. Results of votes of security holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
Page 12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Tri-State 1st Bank, Inc.
(Registrant)
By:/s/ Charles B. Lang
Date: -----------------------------------
August 14, 1997 Charles B. Lang
President and Chief Executive Officer
By:/s/ Keith R. Clutter
Date: -----------------------------------
August 14, 1997 Keith R. Clutter
Secretary
Page 13
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1997
<CASH> 3,066
<INT-BEARING-DEPOSITS> 36
<FED-FUNDS-SOLD> 2,500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 10,180
<INVESTMENTS-CARRYING> 2,160
<INVESTMENTS-MARKET> 2,178
<LOANS> 26,028
<ALLOWANCE> 300
<TOTAL-ASSETS> 45,362
<DEPOSITS> 40,630
<SHORT-TERM> 229
<LIABILITIES-OTHER> 232
<LONG-TERM> 0
0
0
<COMMON> 1,284
<OTHER-SE> 2,987
<TOTAL-LIABILITIES-AND-EQUITY> 45,362
<INTEREST-LOAN> 1,218
<INTEREST-INVEST> 355
<INTEREST-OTHER> 57
<INTEREST-TOTAL> 1,630
<INTEREST-DEPOSIT> 618
<INTEREST-EXPENSE> 626
<INTEREST-INCOME-NET> 1,004
<LOAN-LOSSES> 29
<SECURITIES-GAINS> (3)
<EXPENSE-OTHER> 784
<INCOME-PRETAX> 361
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 276
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 5.00
<LOANS-NON> 23
<LOANS-PAST> 26
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 290
<CHARGE-OFFS> 20
<RECOVERIES> 1
<ALLOWANCE-CLOSE> 300
<ALLOWANCE-DOMESTIC> 193
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 107
</TABLE>
