SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE) FORM 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
----
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM _________TO_________
Commission File Number 33-76644
COMMUNITYCORP
(Exact name of registrant as specified in its charter)
South Carolina 57-1019001
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
1002 N. JEFFERIES BOULEVARD
WALTERBORO, SC 29488
(Address of principal executive
offices, including zip code)
(803) 549-2265
(Registrant's telephone number, including area code)
------------------------------------------------
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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the date of this filing.
300,000 SHARES OF COMMON STOCK, $5.00 PAR VALUE
PAGE 1 OF 14
EXHIBIT INDEX ON PAGE 2
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COMMUNITYCORP
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page No.
<S> <C>
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets - June 30, 1996 and
December 31, 1995............................................ 3
Condensed Consolidated Statements of Income - Six months ended
June 30, 1996 and 1995 and Three months ended June 30, 1996
and 1995..................................................... 4
Condensed Consolidated Statement of Shareholders' Equity - Six
months ended June 30, 1996................................... 5
Condensed Consolidated Statements of Cash Flows - Six months
ended June 30, 1996 and 1995................................. 6
Notes to Condensed Consolidated Financial Statements......... 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. ............................... 8-12
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders...... 12
Item 6. Exhibits and Reports on Form 8-K......................... 13-14
(a) Exhibits. ........................................... 13-14
(b) Reports on Form 8-K. ................................ 13-14
</TABLE>
2
<PAGE>
COMMUNITYCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------------- -------------------
<S> <C> <C>
ASSETS:
CASH AND CASH EQUIVALENTS:
CASH AND DUE FROM BANKS $ 2,043,569 $ 2,078,028
FEDERAL FUNDS SOLD 4,070,000 4,550,000
------------------- -------------------
6,113,569 6,628,028
TIME DEPOSITS WITH OTHER BANKS 10,000 10,000
SECURITIES AVAILABLE-FOR-SALE 9,011,842 4,964,894
SECURITIES HELD-TO-MATURITY (ESTIMATED MARKET VALUE
OF $6,818,805 AND $5,024,493 AT JUNE 30, 1996
AND DECEMBER 31, 1995, RESPECTIVELY) 6,939,292 5,007,879
LOANS RECEIVABLE 30,508,092 30,215,361
LESS ALLOWANCE FOR LOAN LOSSES (626,291) (617,457)
------------------- --------------------
LOANS, NET 29,881,801 29,597,904
ACCRUED INTEREST RECEIVABLE 614,736 498,371
PREMISES, FURNITURE & EQUIPMENT, NET 794,252 818,375
OTHER ASSETS 371,249 322,098
------------------- -------------------
TOTAL ASSETS $ 53,736,741 $ 47,847,549
=================== ===================
LIABILITIES AND SHAREHOLDERS' EQUITY:
LIABILITIES:
DEPOSITS:
NON-INTEREST BEARING $ 4,983,788 $ 4,689,668
INTEREST BEARING 42,589,864 35,949,939
------------------- -------------------
47,573,652 40,639,607
SHORT-TERM BORROWINGS 989,554
ACCRUED INTEREST AND OTHER LIABILITIES 342,402 604,883
------------------- -------------------
TOTAL LIABILITIES 47,916,054 42,234,044
------------------- -------------------
SHAREHOLDERS' EQUITY:
PREFERRED STOCK, $5 PAR VALUE, 3,000,000 SHARES AUTHORIZED AND UNISSUED (NOTE 3)
COMMON STOCK, $5 PAR VALUE, 3,000,000 SHARES
AUTHORIZED, 300,000 SHARES ISSUED
AND OUTSTANDING (NOTE 3) 1,500,000 1,500,000
CAPITAL SURPLUS 1,731,708 1,731,708
UNREALIZED GAIN (LOSS) ON SECURITIES
AVAILABLE-FOR-SALE, NET OF DEFERRED TAXES (78,585) (5,639)
RETAINED EARNINGS 2,685,975 2,387,436
TREASURY STOCK (18,411)
TOTAL SHAREHOLDERS' EQUITY 5,820,687 5,613,505
------------------- -------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 53,736,741 $ 47,847,549
=================== ===================
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
COMMUNITYCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- --------------------
1996 1995 1996 1995
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
INTEREST INCOME:
LOANS, INCLUDING FEES $ 1,474,471 $ 1,301,341 $ 738,466 $ 669,599
SECURITIES 361,921 275,385 204,056 130,815
OTHER INTEREST INCOME 128,080 107,864 67,966 72,627
------------------ ------------------ ------------------ ------------------
TOTAL 1,964,472 1,684,590 1,010,488 873,041
------------------ ------------------ ------------------ ------------------
INTEREST EXPENSE:
DEPOSIT ACCOUNTS 910,241 629,080 472,935 344,701
OTHER INTEREST
EXPENSE 12,601 56,014 2,079 24,293
------------------ ------------------ ------------------ ------------------
922,842 685,094 475,014 368,994
------------------ ------------------ ------------------ ------------------
NET INTEREST INCOME 1,041,630 999,496 535,474 504,047
PROVISION FOR LOAN
LOSSES 60,000 60,000 30,000 30,000
------------------ ------------------ ------------------ ------------------
NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES 981,630 939,496 505,474 474,047
------------------ ------------------ ------------------ ------------------
OTHER OPERATING INCOME:
SERVICE CHARGES 78,572 55,918 39,604 28,692
OTHER INCOME 33,089 26,818 15,706 13,940
------------------ ------------------ ------------------ ------------------
TOTAL 111,661 82,736 55,310 42,632
------------------ ------------------ ------------------ ------------------
OTHER OPERATING EXPENSES:
SALARIES AND BENEFITS 238,812 205,114 121,737 106,853
NET OCCUPANCY EXPENSE 64,587 62,850 32,380 31,534
EQUIPMENT EXPENSE 26,322 23,486 16,693 13,437
OTHER OPERATING
EXPENSES 185,831 196,812 95,163 103,184
------------------ ------------------ ------------------ ------------------
TOTAL 515,552 488,262 265,973 255,008
------------------ ------------------ ------------------ ------------------
INCOME BEFORE TAXES 577,739 533,970 294,811 261,671
INCOME TAX PROVISION 204,200 183,200 103,700 89,000
------------------ ------------------ ------------------ ------------------
NET INCOME $ 373,539 $ 350,770 $ 191,111 $ 172,671
================== ================== ================== ==================
EARNINGS PER SHARE:
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING $ 299,929 $ 300,000 $ 299,857 $ 300,000
================== ================== ================== ==================
NET INCOME PER COMMON
SHARE $ 1.25 $ 1.17 $ .64 $ .58
================== ================== ================== ==================
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
COMMUNITYCORP
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
UNREALIZED
GAIN (LOSS)ON
SECURITIES TOTAL
COMMON CAPITAL AVAILABLE-FOR RETAINED TREASURY SHAREHOLDERS'
STOCK SURPLUS SALE, NET EARNINGS STOCK EQUITY
<S> <C> <C> <C> <C> <C> <C>
BALANCE,
DECEMBER 31,
1995 $ 1,500,000 $ 1,731,708 $ (5,639) $2,387,436 $ $ 5,613,505
CASH DIVIDENDS
DECLARED -
$.25 PER SHARE (75,000) (75,000)
CHANGE IN FAIR
VALUE FOR THE
PERIOD (72,946) (72,946)
PURCHASE OF
TREASURY STOCK (18,411) (18,411)
NET INCOME
FOR THE PERIOD 373,539 373,539
---------------- ---------------- ---------------- --------------- ------------ ---------------
BALANCE,
JUNE 30, 1996 $ 1,500,000 $ 1,731,708 $ (78,585) $2,685,975 $ (18,411) $5,820,687
================ ================ ================ ============== ============ ===============
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE>
COMMUNITYCORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
1996 1995
------------------ -------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 373,539 $ 350,770
ADJUSTMENTS TO RECONCILE NET INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION 41,950 38,800
PROVISION FOR POSSIBLE LOAN LOSSES 60,000 60,000
AMORTIZATION LESS ACCRETION ON INVESTMENTS 9,139 (2,406)
AMORTIZATION OF DEFERRED LOAN COSTS 17,428 19,269
(INCREASE) DECREASE IN INTEREST RECEIVABLE
AND OTHER ASSETS (126,237) (85,907)
INCREASE (DECREASE) IN INTEREST PAYABLE
AND OTHER LIABILITIES (262,481) 180,525
------------------ ------------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 113,338 561,051
------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
NET INCREASE IN LOANS TO CUSTOMERS (361,325) (2,394,544)
MATURITIES OF TIME DEPOSITS WITH OTHER BANKS 100,000
PURCHASES OF SECURITIES AVAILABLE-FOR-SALE (5,549,273) (400,000)
MATURITIES OF SECURITIES AVAILABLE-FOR-SALE 1,289,880 1,400,000
SALES OF SECURITIES AVAILABLE-FOR-SALE 100,125
PURCHASES OF SECURITIES HELD-TO-MATURITY (2,589,017)
MATURITIES OF SECURITIES HELD-TO-MATURITY 648,560 2,534,711
PURCHASES OF PREMISES AND EQUIPMENT (17,827) (38,256)
------------------ ------------------
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES (6,478,877) 1,201,911
------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
NET INCREASE IN DEPOSITS ACCOUNTS 6,934,045 3,538,103
DECREASE IN SHORT-TERM BORROWINGS (989,554) (1,607,807)
PURCHASE OF TREASURY STOCK (18,411)
DIVIDENDS PAID (75,000) (63,000)
------------------ ------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 5,851,080 1,867,296
------------------ ------------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (514,459) 3,630,258
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 6,628,028 1,859,728
------------------ ------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 6,113,569 $ 5,489,986
================== ==================
CASH PAID DURING THE PERIOD FOR:
INCOME TAXES $ 413,129 $ 126,900
INTEREST $ 925,353 $ 608,985
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
6
<PAGE>
COMMUNITYCORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in
accordance with the requirements for interim financial statements and,
accordingly, they are condensed and omit disclosures which would substantially
duplicate those contained in the most recent annual report to shareholders. The
financial statements as of June 30, 1996 and for the interim periods ended June
30, 1996 and 1995 are unaudited and, in the opinion of management, include all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation. The financial information as of December 31, 1995 has been
derived from the audited financial statements as of that date. For further
information, refer to the financial statements and the notes included in
Communitycorp's 1995 Annual Report.
NOTE 2 - ADOPTION OF ACCOUNTING PRINCIPLE
Effective January 1, 1995, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 114 "Accounting by Creditors for Impairment
of a Loan". FASB 114 requires that impaired loans be measured based on the
present value of expected future cash flows discounted at the loan's effective
interest rate or, as a practical expedient, at the loan's observable market
price or the fair value of the collateral if the loan is collateral dependent.
The standard also requires that the Company evaluate the collectibility of both
contractual interest and contractual principal when assessing the need for a
loss accrual. Net income and earnings per share for the interim period reported
were not affected by the adoption of the new accounting principle.
The Company has adopted Statement of Financial Accounting Standards No. 107
"Disclosures about the Fair Value of Financial Instruments". The statement, as
amended, extends fair value disclosure practices by requiring disclosure of the
fair value of financial instruments, both assets and liabilities, recognized and
not recognized in the statement of financial position, for which it is
practicable to estimate fair value. If estimating fair value is not practicable,
FASB 107 requires disclosure of descriptive information pertinent to estimating
fair value. As permitted by FASB 107, the Company will not apply the provisions
to complete interim financial statements in the year of adoption.
NOTE 3 - REORGANIZATION OF BANK OF WALTERBORO
Effective September 11, 1995, Communitycorp acquired all of the outstanding
shares of common stock, $5.00 par value per share, of Bank of Walterboro (the
"Bank") pursuant to an Agreement and Plan of Reorganization dated March 13,
1995, between the Bank and Communitycorp. Pursuant to the Agreement and Plan of
Reorganization, each outstanding share of the Bank's common stock was exchanged
for one share of Communitycorp's common stock at $5.00 par value per share. Upon
consummation of the acquisition, the Bank became a
7
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COMMUNITYCORP
NOTE 3 - REORGANIZATION OF BANK OF WALTERBORO -- continued
wholly-owned subsidiary of Communitycorp. Pursuant to the registration, all
300,000 shares of common stock of Bank of Walterboro were converted into equal
shares of common stock of the holding company. The authorized common stock of
Communitycorp is 3,000,000 shares with a par value of $5.00 per share. The
Company is also authorized to issue 3,000,000 shares of serial preferred stock
with a par value of $5.00 per share.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
The following is a discussion of the Company's financial condition as of June
30, 1996 compared to December 31, 1995, and the results of operations for the
three and six months ended June 30, 1996 compared to the three and six months
ended June 30, 1995. These comments should be read in conjunction with the
Company's condensed consolidated financial statements and accompanying footnotes
appearing in this report.
RESULTS OF OPERATIONS
NET INTEREST INCOME
For the six months ended June 30, 1996, net interest income increased $42,134 or
4.22% over the same period in 1995. The net interest margin realized on earning
assets decreased slightly from 5.06% for the six months ended June 30, 1995 to
4.38% for the same period in 1996. Yields on earning assets decreased slightly
as a result of growth in lower earning investments while the increase in
certificates of deposit resulted in higher yields on interest bearing
liabilities. The interest rate spread also decreased by 74 basis points from
4.31% at June 30, 1995 to 3.57% at June 30, 1996.
Net interest income increased from $504,047 for the quarter ending June 30, 1995
to $535,474 for the quarter ending June 30, 1996. This represents an increase of
$31,427 or 6.23%. The net interest margin realized on earning assets decreased
from 4.96% for the quarter ended June 30, 1995 to 4.34% for the quarter ended
June 30, 1996. The interest rate spread also decreased by 59 basis points from
4.16% at June 30, 1995 to 3.57% at June 30, 1996.
PROVISION AND ALLOWANCE FOR LOAN LOSSES
The provision for loan losses is the charge to operating earnings that
management feels is necessary to maintain the allowance for possible loan losses
at an adequate level. For the six months ended June 30, 1996, the provision
charged to expense was $60,000. This was the same amount for the comparable
period in 1995. For the quarter ended June 30, 1996 and 1995, the provision
charged to expense was $30,000. Based on present information, management
believes the allowance for loan losses is adequate at June 30, 1996 to meet
presently known and inherent risks in the loan portfolio.
8
<PAGE>
COMMUNITYCORP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
NON-INTEREST INCOME
Non-interest income during the six months ended June 30, 1996 was $111,661, an
increase of $28,925 or 34.96% from the comparable period in 1995. The increase
is primarily a result of an increase in service charges from $55,918 at June 30,
1995 to $78,572 at June 30, 1996. Overdraft and NSF fees increased by $21,201 to
$66,985 at June 30, 1996. This change is a result of the increase in deposit
accounts over the two periods. Deposits at June 30, 1995 were $36,174,678
compared to $47,573,652 at June 30, 1996.
For the quarter ended June 30, 1996, non-interest income increased $12,678 or
29.73% over the same period in 1995. This increase is primarily due to service
charges which increased $10,912 or 38.03% from the quarter ended June 30, 1995
to the quarter ended June 30, 1996.
NON-INTEREST EXPENSE
Total non-interest expense for the six months ended June 30, 1996 was $515,552
or 5.59% higher than the six months ended June 30, 1995. Salaries and employee
benefits increased from $205,114 at June 30, 1995 to $238,812 for the six months
ended June 30, 1996. This increase is due to the addition of one full time
employee, pay raises and additional part-time help to assist in various areas of
the Company.
For the quarter ended June 30, 1996, non-interest expense increased $10,965 or
4.30% over the same period in 1995. The largest increase between the quarter
ended June 30, 1996 and the quarter ended June 30, 1995 was in salaries and
benefits which increased $14,884 or 13.92%.
INCOME TAXES
The income tax provision for the six months ended June 30, 1996 was $204,200 as
compared to $183,200 for the same period in 1995. The effective tax rates were
35.34% and 34.31% at June 30, 1996 and 1995, respectively. The effective tax
rates were 35.17% and 34.01% for the quarter ended June 30, 1996 and June 30,
1995, respectively.
NET INCOME
The combination of the above factors resulted in net income for the six months
ended June 30, 1996 of $373,539 as compared to $350,770 for the same period in
1995. This represents an increase of $22,769 or 6.49% over the same period in
1995. For the quarter ended June 30, 1996, net income was $191,111 as compared
to $172,671 for the quarter ended June 30, 1995. This represents an increase of
$18,440 or 10.68% from the quarter ending June 30, 1996 as compared to the
quarter ending June 30, 1995.
9
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COMMUNITYCORP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
ASSETS AND LIABILITIES
During the first six months of 1996, total assets grew $5,889,192 or 12.31% when
compared to December 31, 1995. The primary source of growth in assets was in
investment securities with an increase of $5,978,361 or 59.95% during the first
six months of 1996. Total deposits increased $6,934,045 or 17.06% from the
December 31, 1995 amount of $40,639,607. Within the deposit area, certificates
of deposit increased $2,808,571 or 15.54% during the first six months of 1996.
INVESTMENT SECURITIES
Investment securities increased form $9,972,773 at December 31, 1995 to
$15,951,134 at June 30, 1996. This increase of $5,978,361 or 59.95% is a result
of growth in interest bearing deposits. Securities available-for-sale increased
$4,046,948 or 81.51% from December 31, 1995 to June 30, 1996.
LOANS
The demand for loans leveled off in the Walterboro marketplace during the first
six months of 1996. Net loans increased $283,897 or 9.59% during the period.
Balances within the major loans receivable categories as of June 30, 1996 and
December 31, 1995 are as follows:
June 30, December 31,
1996 1995
Commercial and industrial $ 20,458,410 $ 20,628,084
Real estate 4,234,861 4,150,250
Consumer 4,847,283 4,687,119
Agricultural 469,179 376,221
Other, net 498,359 373,687
-------------------- --------------------
$ 30,508,092 $ 30,215,361
==================== ====================
RISK ELEMENTS IN THE LOAN PORTFOLIO
The following is a summary of risk elements in the loan portfolio:
June 30,
1996 1995
Loans:
Nonaccrual loans $ 214,047 $ 299,860
Accruing loans more than 90
days past due $ 0 $ 0
Loans identified by the internal review mechanism:
Criticized $ 0 $ 423,851
Classified $ 565,559 $ 449,381
10
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COMMUNITYCORP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
RISK ELEMENTS IN THE LOAN PORTFOLIO -- continued
Activity in the Allowance for Loan Losses is as follows:
June 30,
1996 1995
Balance, January 1, $ 617,457 $ 550,457
Provision for loan losses for the period 60,000 60,000
Net loans (charged off) recovered for
the period (51,166) (30,753)
-------------- --------------
Balance, end of period $ 626,291 $ 579,704
============= ==============
Gross loans outstanding, end of period $ 30,508,092 $ 28,118,662
Allowance for Loan Losses to
loans outstanding 2.05% 2.06%
DEPOSITS
At June 30, 1996, total deposits increased by $6,934,045 or 17.06% from December
31, 1995. Expressed in percentages, non-interest bearing deposits increased
6.27% and interest bearing deposits increased 18.47%.
Balances within the major deposit categories as of June 30, 1996 and December
31, 1995 are as follows:
June 30, December 31,
1996 1995
------------- -------------
Non-interest bearing demand deposits $ 4,983,788 $ 4,689,668
Interest bearing demand deposits 5,845,279 5,973,089
Savings deposits 15,863,467 11,904,303
Certificates of deposit 20,881,118 18,072,547
------------- -------------
$ 47,573,652 $ 40,639,607
============= =============
LIQUIDITY
Liquidity needs are met by the Company through scheduled maturities of loans and
investments on the asset side and through pricing policies on the liability side
for interest-bearing deposit accounts. The level of liquidity is measured by the
loan-to-total borrowed funds ratio which was at 62.81% at June 30, 1996 and
71.10% at December 31, 1995.
Securities available-for-sale which totaled $9,011,842 at June 30, 1996, serve
as a ready source of liquidity. The Company also has lines of credit available
with correspondent banks to purchase federal funds for periods from one to seven
days. At June 30, 1996, unused lines of credit totaled $2,500,000.
11
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COMMUNITYCORP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
CAPITAL RESOURCES
Total shareholders' equity increased from $5,613,505 at December 31, 1995 to
$5,820,687 at June 30, 1996. The increase of $207,182 is primarily attributable
to earnings for the period of $373,539 with dividends paid out of $75,000. A
negative change of $72,946 in the fair value of securities available-for-sale
and the purchase of treasury stock of $18,411 resulted in decreases to total
equity.
Bank holding companies, such as the Company, and their banking subsidiaries are
required by banking regulators to meet certain minimum levels of capital
adequacy which are expressed in the form of certain ratios. Capital is separated
into Tier I capital (essentially common shareholders' equity less intangible
assets) and Tier II capital (essentially the allowance for loan losses limited
to 1.25% of risk-weighted assets). The first two ratios, which are based on the
degree of credit risk in the Company's assets, provide the weighting of assets
based on assigned risk factors and include off-balance sheet items such as loan
commitments and stand-by letters of credit. The ratio of Tier I capital to
risk-weighted assets must be at least 4.0% and the ratio of total capital (Tier
I capital plus Tier 2 capital) to risk-weighted assets must be at least 8.0%.
The capital leverage ratio supplements the risk-based capital guidelines. Banks
and bank holding companies are required to maintain a minimum ratio of Tier I
capital to adjusted quarterly average total assets of 3.0%.
The following table summarizes the Company's risk-based capital at June 30,
1996:
Shareholders' equity $ 5,899,272
Less: intangibles (46,787)
--------------------
Tier I capital 5,852,485
Plus: allowance for loan losses (1) 438,307
--------------------
Total capital $ 6,290,792
====================
Risk-weighted assets $ 35,064,598
====================
Risk based capital ratios
Tier I 16.69%
Total capital 17.94%
Leverage ratio 10.89%
(1) limited to 1.25% of risk-weighted assets
The Company has put $5,000 down on an option to purchase a lot in a neighboring
community. The Company has filed an application with the State Board of
Financial Institutions to open a branch on this lot. Estimated costs for this
branch include $157,500 for the lot and $550,000 for the building.
12
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COMMUNITYCORP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
REGULATORY MATTERS
The management of the Company is not aware of any current recommendations by
regulatory authorities which, if they were to be implemented, would have a
material effect on liquidity, capital resources, or operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On April 30, 1996, the Company held its Annual Meeting of Shareholders for the
purpose of (a) electing three directors for three-year terms, and (b) ratifying
the appointment of Tourville, Simpson & Henderson, certified public accountants,
as the Company's independent auditors for the fiscal year ending December 31,
1996.
The nominees for director received the number of affirmative votes of
shareholders required for such nominee's election in accordance with the Bylaws
of the Company with 218,476 shareholders voting for the nominees and 400
shareholders abstaining out of a total 300,000 outstanding shareholders.
Tourville, Simpson & Henderson also received the requisite number of affirmative
votes required for approval pursuant to the Bylaws of the Company. Of the
300,000 outstanding shareholders of the Company, the voting was as follows:
218,576 shareholders voted for and 300 abstained.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - No reports on Form 8-K were filed
during the quarter ended June 30, 1996
Items 1, 2, 3 and 5 are not applicable.
13
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COMMUNITYCORP
PART II - OTHER INFORMATION
SIGNATURE
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.
COMMUNITYCORP
By:
W. Roger Crook
President & Chief Executive Officer
Date: August 7, 1996 By:
Gwen P. Bunton
Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
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1,500,000
0
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</TABLE>
