<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB/A
(Amendment No. 1)
x Quarterly Report under Section 13 or 15(d) of the Securities
-----
Exchange Act of 1934
For the Quarterly Period ended March 31, 1998
--------------
____ Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _____ to _____
Commission file number 0-28360
IBW Financial Corporation
(Name of Small Business Issuer in its Charter)
<TABLE>
<S> <C>
District of Columbia 52-1943477
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
</TABLE>
4812 Georgia Avenue, NW, Washington, DC 20011
(Address of Principal Executive Offices) (Zip Code)
(202) 722-2000
(Issuer's Telephone Number, Including Area Code)
N/A
(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 Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file reports), and (2) has
been subject to such filing requirements for the past 90 days. X Yes ____No
-----
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date: As of April 30, 1998, there
were 668,360 shares of the common stock $1.00 par value of IBW Financial
Corporation outstanding.
Transitional Small Business Disclosure Format (check one) ____Yes x No
-----
<PAGE>
Part I Financial Information
---------------------
Item 1. Financial Statements
IBW FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
-----------------------------------
(dollars in thousands)
ASSETS
Cash and cash equivalents
<S> <C> <C>
Cash and due from banks $ 12,452 $ 11,842
Federal funds sold 17,000 11,500
-----------------------------------
Total cash and cash equivalents 29,452 23,342
Interest-bearing deposits in banks 3,025 3,000
Securities available-for-sale, at
fair value (amortized cost,
$100,285 and $99,933) 101,067 101,106
Loans receivable, net of allowance
for loan losses of $2,498 and $1,702 113,519 116,476
Other real estate owned, net 451 522
Bank premises and equipment, net 2,798 2,672
Other assets 3,562 3,584
-----------------------------------
TOTAL $253,874 $250,702
===================================
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Demand deposits $ 53,188 $ 52,922
Time and savings deposits 157,018 155,274
-----------------------------------
Total deposits 210,206 208,196
Securities sold under repurchase agreements 21,238 19,496
Other liabilities 1,887 1,833
Note payable 1,000 1,000
-----------------------------------
Total liabilities 234,331 230,525
-----------------------------------
SHAREHOLDERS' EQUITY
Preferred stock - $1 par value; 1,000,000
authorized
(500,000 voting and 500,000 nonvoting);
20,000 series A nonvoting issued and
outstanding, 500 500
stated at liquidation value
Common stock - $1 par value; 1,000,000
authorized;
668 668
668,360 shares issued and outstanding
Capital surplus 5,051 5,051
Retained earnings 12,807 13,183
Accumulated other comprehensive income 517 775
-----------------------------------
Total shareholders' equity 19,543 20,177
-----------------------------------
TOTAL $253,874 $250,702
===================================
-1-
</TABLE>
<PAGE>
IBW FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1998 AND MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------------------------
1998 1997
------------------------------------------------
<S> <C> <C>
(dollars in thousands, except per share data)
INTEREST INCOME
Interest and fees on loans $ 2,667 $2,452
U.S. treasury securities 259 317
Obligations of U.S. 1,162 977
government agencies and
corporations
Obligations of states and 168 216
political subdivisions
Bank balances and other 243 204
securities
------------------------------------------------
Total interest income 4,499 4,166
------------------------------------------------
INTEREST EXPENSE
Time certificates over 215 175
$100,000
Other savings and time 1,075 1,076
deposits
Securities sold under 224 141
repurchase agreements
Note payable 13 13
------------------------------------------------
Total interest expense 1,527 1,405
------------------------------------------------
NET INTEREST INCOME 2,972 2,761
PROVISION FOR LOAN LOSSES 1,209 425
------------------------------------------------
NET INTEREST INCOME AFTER
PROVISION
1,763 2,336
FOR LOAN LOSSES
------------------------------------------------
NONINTEREST INCOME
Service charges on deposit 757 661
and checking accounts
Gain on sale of securities 121 -
Other operating income 24 4
------------------------------------------------
Total noninterest income 902 665
------------------------------------------------
NONINTEREST EXPENSE
Salaries and employee 1,700 1,414
benefits
Occupancy 193 172
Furniture and equipment 181 167
Data processing 161 149
Other 754 771
------------------------------------------------
Total noninterest expense 2,989 2,673
------------------------------------------------
INCOME BEFORE INCOME TAXES (324) 328
PROVISION FOR INCOME TAXES (157) 88
------------------------------------------------
NET INCOME ($167) $ 240
================================================
OTHER COMPREHENSIVE INCOME,
NET OF TAX
Unrealized securities gains (258) (355)
(losses)
Reclassification adjustment (209) -
------------------------------------------------
Other Comprehensive (467) (355)
Income
------------------------------------------------
COMPREHENSIVE INCOME/(LOSS) (634) (115)
================================================
NET INCOME PER COMMON SHARE ($0.25) $0.38
================================================
-2-
</TABLE>
<PAGE>
IBW FINANCIAL CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31
------------------------------
1998 1997
------------------------------
<S> <C> <C>
(dollars in thousands)
OPERATING ACTIVITIES
Net income $ (167) $ 240
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 150 162
Amortization of premiums (60) 221
Gain on sale of loans (23) -
(Gain) loss on sale of other real estate owned (1) 12
Gain on sale of securities available-for-sale (121) -
Provision for losses on other real estate
owned 0 33
Interest on capitalized securities (156) -
Provision for loan losses 1,209 425
Decrease (increase) in other assets 113 (645)
Increase in accrued expenses and other
liabilities (155) 287
------------------------------
Net cash provided by operating
activities 789 735
------------------------------
INVESTING ACTIVITIES
Net decrease in loans 1,886 839
Net increase in other short-term investments (25) -
Additions to bank premises and equipment (228) (91)
Net proceeds on sale of other real estate owned 72 615
Proceeds from sale of securities
available-for-sale 2,059 -
Proceeds from maturities of securities
available-for-sale 5,897 2,000
Purchase of securities available-for-sale (12,163) (18,679)
Principal collected on securities
available-for-sale 4,077 2,131
------------------------------
Net cash provided by (used in)
investing activities 1,575 (13,185)
------------------------------
FINANCING ACTIVITIES
Cash Dividends (6) -
Net increase in deposits 2,010 6,644
Net increase in securities sold under
repurchase agreements 1,742 3,704
------------------------------
Net cash provided by financing
activities 3,746 10,348
------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 6,110 (2,102)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 23,342 21,992
------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 29,452 $ 19,890
==============================
Supplemental disclosures of cash flow
information
Cash paid during the year for
Interest $ 1,008 $ 1,343
Taxes $ 0 $ 110
</TABLE>
-3-
<PAGE>
IBW FINANCIAL CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A Basis of Presentation
The accompanying unaudited consolidated financial statements of IBW Financial
Corporation and Subsidiary (the Company) have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB. Accordingly, they do not include all the
information and footnotes required for complete financial statements. In the
opinion of management, all adjustments and reclassifications consistently, of a
normal and recurring nature, considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31,
1998, are not necessarily indicative of the results that may be expected for
the year ended December 31, 1998. The unaudited consolidated financial
statements should be read in conjunction with the consolidated financial
statements and footnotes for the year-ended December 31, 1997.
Note B New Accounting Pronouncement
As of January 1, 1998, the company adopted, SFAS No. 130 Reporting Comprehensive
Income. SFAS No.130 requires comprehensive income to be reported in a financial
statement that is displayed with the same prominence as other financial
statements, thereby permitting companies to display the components of other
comprehensive income below the total for net income in an income statement, in a
separate statement that begins with net income, or in a statement of changes to
equity. Such requirement would apply to all enterprises that provide a full set
of financial statements. This statement is effective for fiscal years beginning
after December 15, 1997. Reclassification of financial statements for earlier
periods for comparative purposes is required. (See Consolidated Balance Sheets
and Statement of Income)
The company also adopted as of January 1, 1998, SFAS No.131, Disclosures about
Segments of an Enterprise and Related Information. SFAS No.131 establishes
standards for the way that public enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. It also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
SFAS No.131 is effective for financial statements beginning after December
15,1997.
The implementation of SFAS 131 did not have a significant effect on the
Company's financial statements and related footnote disclosures.
-4-
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
As of and for the Three Months Ended March 31, 1998 (dollars in thousands)
Forward looking statements. This discussion contains forward looking
statements within the meaning of the Securities Exchange Act of 1934, as
amended, including statements of goals, intentions, and expectations as to
future trends, plans, events or results of Company operations and policies and
regarding general economic conditions. These statements are based upon current
and anticipated economic conditions, nationally and in the Company's market,
interest rates and interest rate policy, competitive factors and other
conditions which, by their nature, are not susceptible to accurate forecast, and
are subject to significant uncertainty. Because of these uncertainties and the
assumptions on which this discussion and the forward looking statements are
based, actual future operations and results in the future may differ materially
from those indicated herein. Readers are cautioned against placing undue
reliance on any such forward looking statement. The Company does not undertake
to update any forward looking statement to reflect occurrences or events which
may not have been anticipated as of the date of such statements.
Overview
IBW Financial Corporation's net income for the first quarter of 1998
totaled ($167), a decrease of $407, or 170% from the comparable period of 1997.
This decrease is primarily attributed to an increase in the provision for loan
losses of $784, an increase in noninterest expenses of $316, offset by an
increase of net interest income of $211, an increase in noninterest income of
$237 and a decrease in taxes of $245. Return on average assets (ROAA), and
return on average shareholder's equity (ROAE) through the first quarters of 1998
and 1997 were (.27%) and (3.26%), .40% and 5.61%, respectively.
Net Interest Income
Net interest income increased $211, or 8% over the comparable period in
1997. Interest on loans increased by $215, or 9%, reflecting higher levels of
loans. Interest on securities increased $79, or 5%, reflecting higher levels of
mortgage backed securities, and obligations of states and political
subdivisions, and lower levels of U.S. Treasury securities. Interest on federal
funds sold and other increased $39, or 19%, from the 1997 comparable period due
primarily to higher volume of federal folds sold. Interest expense increased
$122, or 9%, attributed primarily to a higher volume of repurchase agreements,
averaging $20,274 for the three months ending March 31, 1998 compared to $12,695
for the comparable period in 1997. Interest expense related to deposits
increased $39, while interest expense related to repurchase agreements increased
$83. On a tax-equivalent basis, net interest income for the three months ended
March 31, 1998 increased $187, or 7%, over the comparable period in 1997. The
increase was primarily attributable to an increase in average interest-earning
assets, an increase in the net interest spread and principally offset by an
increase in average interest-bearing liabilities. Average interest-earning
assets increased by $13 million, or 6%, comprised principally of growth in loans
of $7 million, taxable securities of $7 million and $2 million in federal funds
sold, partially offset by a decline of $4 million in nontaxable securities.
The interest rate spread was unchanged and stood at 4.47% for both the
three months ending March 1997 and March 1998. However, the components of net
interest income changed reflecting an increase in the average rate earned on
interest-earning assets, except for federal funds sold, and a substantiaL
increase in the average volume of repurchase agreements.
Average interest-bearing liabilities increased $8,151, or 5%, during the
three months ending March 31, 1998, as compared to the comparable period in
1997, due primarily to an increase in borrowings. Borrowings consist of
repurchase agreements in the amount of $21,238 at March 31, and the note payable
of $1,000.
Provision for Loan Losses
The Company maintains an allowance for loan losses to absorb losses on
existing loans and commitments that may become uncollectible. The provision for
loan losses increased $784 in the first quarter of 1998, to $1,209, from $425
for the three months ended March 31, 1997. The increase in the provision for
loan losses is attributable to the increase in nonperforming assets and an
increase in loans with potential credit problems. Nonperforming assets
increased to $2,822 at March 31, 1998 from $2,127 at year end 1997, representing
an increase of $695 or 33%. Loans with potential credit problems increased to
$8,537 at March 31, 1998 from $7,931 at year-end 1997,
-5-
<PAGE>
representing an increase of $606, or 8%. See the Non-Performing Assets section
for additional information related to the Company's allowance for loan losses.
Noninterest Income
Noninterest income increased $237, or 36%, to $902 for March 1998 compared
to $665 for March 1997. The increase is attributed to $92 of ATM surcharges on
nondepositors and $121 in security gains. There were no security gains or ATM
surcharges during the first quarter of 1997.
Noninterest Expense
Noninterest expense for the first quarter of 1998 increased $316, or 12%,
over the comparable period of 1997. This increase is attributed primarily to an
increase of $286 in salaries and employee benefits, an increase of $21 in
occupancy expenses, an increase of $14 in furniture and equipment expenses, and
an increase of $12 in data processing costs, partially offset by a $16 decrease
in other expenses. The increase in salaries and benefits was attributed largely
to $104 of various salary accruals and $28 in 401K expenses during the first
quarter of 1998 compared to none during the first quarter of 1997. The
remaining $154 represents primarily salary and benefits increases, including
those relating to additional staffing for the Rhode Island Avenue Branch, which
opened during the second quarter of 1997.
Provision for Income Taxes
The provision for income taxes for the first quarter of 1998 decreased $245
to ($157), or 278%, from the comparable period of 1997, and was attributable to
lower income before taxes primarily due to larger provision for loan losses.
Financial Overview
Total assets increased $4 million, or 2%, from December 31, 1997 to March
31, 1998, mainly due to an increase in cash and cash equivalents of $6 million,
offset primarily by a decrease in loans of $2 million. The increase in assets
was primarily funded by deposit growth of $2 million and repurchase agreements
growth of $2 million. Total shareholders' equity decreased $634 due to the
decrease in retained earnings of $376 and the decrease in the unrealized gain
on available-for-sale securities of $258. $208 in dividends were declared
during the first quarter of 1998.
The carrying value of the Company's securities portfolio was virtually
unchanged at $101 million at December 31, 1997 and March 31, 1998. This
composition reflected a change as mortgage-backed securities increased $2
million to $59 million, while tax-exempt securities decreased $2 million to $10
million from December 31, 1997 to March 31, 1998. The mortgage-backed
securities portfolio had a weighted-average remaining maturity of 2.10 years at
March 31, 1998 compared to 2.29 years at December 31, 1997. The collateral
underlying all the mortgage-backed securities is guaranteed by one of the
"Quasi-Governmental" agencies, and therefore maintains a risk weight of 20% for
risk-based capital purposes. Management's analysis of mortgage-related
securities includes, but is not limited to, the average lives, seasonality,
coupon and historic behavior (including prepayment history) of each particular
security over its life, as affected by various interest rate environments.
Stress tests are performed on each security on a quarterly basis as part of
management's ongoing analysis. There are no issuers of securities held by the
Company, the securities of which have a book value in excess of 10% of
shareholders' equity.
The allowance for loan losses was $2.5 million at March 31, 1998 compared
to $1.7 million at December 31, 1997. The increase in the level of the
allowance for loan losses as a percentage of ending loans reflects the increase
in nonperforming assets. Nonperforming assets increased $695 or 33% to $2,822
from $2,127 at year-end 1997. Loans with potential credit problems (excluding
nonperforming assets) increased to $8,537 at March 31, 1998 from $7,931 at year-
end 1997, representing an increase of $606 or 8% The ratio of allowance for
possible loan losses to total loans increased to 2.14% at March 31, 1998 from
1.43% at year-end 1997. At March 31, 1998 and year-end 1997, non-performing
assets represented 1.11% and .85% respectively of total assets.
-6-
<PAGE>
AVERAGE BALANCES AND NET INTEREST INCOME ANALYSIS/(1)/
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended Year Ended
March 31, 1998 March 31, 1997 December 31, 1997
-------------------------------------------------------------------------------------------
Amount Amount Amount
Average Average Paid or Average Average Paid or Average Average Paid or
Balance Rate Earned Balance Rate Earned Balance Rate Earned
-------------------------------------------------------------------------------------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Loans, net $114,343 9.46% $2,667 $107,407 9.26% $2,452 $111,856 9.33% $10,434
Taxable securities 90,837 6.40% 1,434 83,341 6.29% 1,293 88,897 6.31% 5,605
Non-taxable securities/(2)/ 12,018 8.57% 254 15,982 8.30% 327 15,919 8.22% 1,309
Federal funds sold 13,557 5.44% 182 11,529 5.56% 158 6,575 5.66% 372
Interest-bearing deposits held 3,015 6.59% 49 3,000 6.35% 47 3,000 6.10% 183
-------------------------------------------------------------------------------------------
Total interest-earning assets 233,770 7.96% 4,586 221,259 7.84% 4,277 226,247 7.91% 17,903
Cash and due from banks 10,802 11,484 11,108
Bank premises and
equipment, net 2,695 2,464 2,515
Other assets 3,931 5,258 4,669
---------- --------- ---------
Total assets $251,198 $240,465 $244,539
========== ========= =========
Liabilities and
Shareholders' Equity
Interest-bearing demand deposits $ 27,115 1.99% $ 133 $ 29,307 1.97% $ 142 $ 28,326 1.99% 563
Savings deposits 64,891 2.75% 440 68,336 2.76% 465 66,724 2.75% 1,836
Time deposits 64,227 4.53% 717 58,018 4.50% 644 61,041 4.42% 2,697
-------------------------------------------------------------------------------------------
Total interest-bearing deposits 156,233 3.35% 1,290 155,661 3.36% 1,251 156,091 3.26% 5,096
Borrowed funds 1,000 5.27% 13 1,000 5.27% 13 1,000 5.30% 53
Repurchase agreements 20,274 4.48% 224 12,695 4.50% 141 16,820 4.46% 767
-------------------------------------------------------------------------------------------
Total interest-bearing liabilities 177,507 3.49% 1,527 169,356 3.36% 1,405 173,911 3.40% 5,916
Noninterest-bearing liabilities 51,890 52,117 50,362
Other liabilities 1,318 1,878 2,235
Shareholders' equity 20,483 17,114 18,031
---------- --------- ---------
Total liabilities and
shareholders' equity $251,198 $240,465 $244,539
========== ========= =========
Net interest income and net
yield on interest-earning assets
Net interest income $3,059 $2,872 $11,987
======== ======== =========
Interest rate spread 4.47% 4.47% 4.51%
Net yield on average interest- 5.30%
earning assets 5.31% 5.26%
Average interest-earning assets
to average interest-bearing 130.09%
liabilities 131.70% 130.65%
</TABLE>
(1) Yields on securities have been computed based upon the historical cost of
such securities. Nonaccruing loans are included in average balances.
(2) Yields on non-taxable securities are presented on a tax-equivalent basis
using a 34% tax rate. Interest income and net interest income reported in
the Company's consolidated statements of income were $4,499, and $2,972 for
March 31, 1998, $4,166 and $2,761 for March 31, 1997 and $17,458 and
$11,542 for 1997.
-7-
<PAGE>
LOAN LOSS AND RECOVERY EXPERIENCE
<TABLE>
<CAPTION>
----------------------------------------
Three Months Ended Year Ended
March 31, 1998 December 31, 1997
----------------------------------------
(dollars in thousands)
<S> <C> <C>
Total outstanding loans at year end $116,521 $118,646
Average amount of loans outstanding 114,343 113,511
Allowance for loan losses
at beginning of year 1,702 1,266
Loans charged off:
Commercial 374 451
Real estate mortgage - 256
Installment loans to individuals 64 182
----------------------------------------
Total charge-offs 438 889
----------------------------------------
Recoveries of loans previously
charged-off:
Commercial 20 81
Real estate mortgage - -
Installment loans to individuals 5 49
----------------------------------------
Total recoveries 25 130
----------------------------------------
Net charge-offs 412 759
Additions to allowance charged to
operations 1,209 1,195
----------------------------------------
Allowance for loan losses at end of
period $ 2,498 $ 1,702
========================================
Ratio of net charge-offs during period
to average outstanding loans during
period 1.44% 0.67%
Ratio of allowance for possible loan
losses at period to total loans 2.14% 1.43%
</TABLE>
ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
------------------------------------------------------
March 31, 1998 Percent December 31, 1997 Percent
------------------------------------------------------
(dollars in thousands)
<S> <C> <C> <C> <C>
Commercial $2,242 89.75% $1,378 80.96%
Real estate mortgage 119 4.76% 117 6.88%
Consumer 137 5.49% 182 10.69%
Unallocated 0 0.0% 25 1.47%
------------------------------------------------------
Total $2,498 100.00% $1,702 100.00%
======================================================
</TABLE>
The level of the allowance for loan losses is determined by management on
the basis of various assumptions and judgments. These include levels and trends
of past due and non-accrual loans, trends in volume and changes in terms,
effects of policy changes, experience and depth of management, anticipated
economic conditions in the Washington, DC metropolitan area, concentrations of
credit, the composition of the loan portfolio, prior loan loss experience, and
the ongoing and periodic reviews of the loan portfolio by the Company's internal
and external loan review function. For impaired loans, the Company establishes
reserves in accordance with SFAS 114 and SFAS 118, and for non-impaired loans
uses an allocation approach which relies on historical loan loss experience,
adjusted to reflect current conditions and trends.
Although management believes that it uses the best information available to
make such determinations that the allowance for loan losses is adequate as of
the dates shown, future adjustments to the allowance may be necessary, and net
income could be significantly affected, if circumstances and/or economic
conditions differ substantially from the assumptions used in making the initial
determinations. Any downturn in the real estate market or general economic
conditions in the Washington, DC metropolitan area could result in the Company
experiencing
-8-
<PAGE>
increased levels of non-performing assets and charge-offs, significant
provisions for loan losses, and significant reductions in net income.
Additionally, various regulatory agencies periodically review the Company's
allowance for loan losses. Such agencies may require the recognition of
additions to the allowance based on their judgments or information available to
them at the time of their examination. In light of the foregoing, there can be
no assurance that management's determinations as to the future adequacy of the
allowance for loan losses will prove accurate, or that additional provisions or
charge-offs will not be required.
The following table sets forth information concerning non-performing
assets.
NON-PERFORMING ASSETS
<TABLE>
<CAPTION>
------------------------------------
March 31, 1998 December 31, 1997
------------------------------------
(dollars in thousands)
<S> <C> <C>
Non-accrual loans/(1)/ $2,023 $ 852
Loans past due 90 days or more
and still accruing 348 753
Foreclosed properties 451 522
------ ------
Total $2,822 $2,127
====================================
Non-performing assets to gross loans 2.41% 1.78%
and foreclosed properties at period
end
Non-performing assets to total 1.11% .85%
assets at period end
</TABLE>
1. Loans are placed on non-accrual status when in the opinion of management
the collection of additional interest is unlikely or a specific loan meets
the criteria for non-accrual status established by regulatory authorities.
No interest is taken into income on non-accrual loans unless received in
cash. A loan remains on non-accrual status until the loan is current to
both principal and interest and the borrower demonstrates the ability to
pay and remain current, or the loan becomes well secured and is in the
process of collection. The gross interest income that would have been
recorded in the three months ended March 31, 1998 and the year ended
December 31, 1997 for non-accrual loans had the loans been current in
accordance with their original terms was $26 and $223, respectively.
At March 31, 1998, there were $8,537 of loans not reflected in the table
above, where known information about possible credit problems of borrowers
caused management to have doubts as to the ability of the borrower to comply
with present loan repayment terms and that may result in disclosure of such
loans in the future. This represents an increase of $606 or 6% from year-end
1997. Included in the total are nineteen loans, totaling $5,290 fully
collateralized by real estate, three of which represent $3,615 or 68% of the
total. The remaining $2,459 consists of fifteen commercial loans, one at $708
or 29% of the remaining amount, secured primarily by accounts receivable and
various business equipment.
-9-
<PAGE>
Part II Other Information
-----------------
Item 1 Legal Proceedings
None.
Item 2 Changes in Securities
None.
Item 3 Defaults Upon Senior Securities
None.
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) Exhibits
(11) Statement Regarding Computation of Per Share Earnings
(27) Financial Data Schedule
(b) Reports on Form 8-K
None.
-10-
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
IBW FINANCIAL CORPORATION
June 29, 1998 /s/ B. Doyle Mitchell, Jr.
B. Doyle Mitchell, Jr., President
------------------------------------------
June 29, 1998 /s/ Thomas A Wilson
Thomas A. Wilson, Senior Vice President
------------------------------------------
-11-
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
11 Statement regarding Computation of Per Share Earnings
27 Financial Data Schedule
-12-
<PAGE>
Exhibit 11
STATEMENT OF COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Three Months Ended March 31,
-------------------------------
1998 1997
-------------------------------
<S> <C> <C>
Earnings per common share
Basic and diluted ($0.25) $ 0.38
Average shares outstanding
Basic and diluted 668,360 637,160
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM
10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
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0
500
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</TABLE>
