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 SEPTEMBER 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
<PAGE>
COMMUNITYCORP
INDEX
PART I. FINANCIAL INFORMATION Page No.
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets - September 30, 1996 and
December 31, 1995............................................ 3
Condensed Consolidated Statements of Income - Nine months ended
September 30, 1996 and 1995 and Three months ended September
30, 1996 and 1995............................................ 4
Condensed Consolidated Statement of Shareholders' Equity - Nine
months ended September 30, 1996.............................. 5
Condensed Consolidated Statements of Cash Flows - Nine months
ended September 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. ............................... 8-14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K......................... 14
(a) Exhibits. ........................................... 14
(b) Reports on Form 8-K. ................................ 14
2
<PAGE>
COMMUNITYCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
SEPT. 30, DEC. 31,
1996 1995
------------------- --------------------
<S> <C> <C>
ASSETS:
CASH AND CASH EQUIVALENTS:
CASH AND DUE FROM BANKS $ 2,598,500 $ 2,078,028
FEDERAL FUNDS SOLD 2,350,000 4,550,000
------------------- -------------------
4,948,500 6,628,028
TIME DEPOSITS WITH OTHER BANKS 10,000 10,000
SECURITIES AVAILABLE-FOR-SALE 11,118,402 4,964,894
SECURITIES HELD-TO-MATURITY (ESTIMATED MARKET VALUE
OF $7,533,394 AND $5,024,493 AT SEPTEMBER 30, 1996
AND DECEMBER 31, 1995, RESPECTIVELY) 7,594,347 5,007,879
LOANS RECEIVABLE 31,893,984 30,215,361
LESS ALLOWANCE FOR LOAN LOSSES (646,230) (617,457)
------------------- --------------------
LOANS, NET 31,247,754 29,597,904
ACCRUED INTEREST RECEIVABLE 660,440 498,371
PREMISES, FURNITURE & EQUIPMENT, NET 1,250,888 818,375
OTHER ASSETS 341,470 322,098
------------------- -------------------
TOTAL ASSETS $ 57,171,801 $ 47,847,549
=================== ===================
LIABILITIES AND SHAREHOLDERS' EQUITY:
LIABILITIES:
DEPOSITS:
NON-INTEREST BEARING $ 5,120,738 $ 4,689,668
INTEREST BEARING 45,573,215 35,949,939
------------------- -------------------
50,693,953 40,639,607
SHORT-TERM BORROWINGS 989,554
ACCRUED INTEREST AND OTHER LIABILITIES 410,558 604,883
------------------- -------------------
TOTAL LIABILITIES 51,104,511 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 (44,040) (5,639)
RETAINED EARNINGS 2,898,033 2,387,436
TREASURY STOCK (18,411)
TOTAL SHAREHOLDERS' EQUITY 6,067,290 5,613,505
------------------- -------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 57,171,801 $ 47,847,549
=================== ===================
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
COMMUNITYCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- ---------------------
1996 1995 1996 1995
------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
INTEREST INCOME:
LOANS, INCLUDING FEES $ 2,237,317 $ 2,020,447 $ 758,024 $ 713,755
SECURITIES 614,488 408,509 252,567 133,124
OTHER INTEREST INCOME 188,231 182,142 60,151 74,278
------------------ ------------------ ------------------ ------------------
TOTAL 3,040,036 2,611,098 1,070,742 921,157
------------------ ------------------ ------------------ ------------------
INTEREST EXPENSE:
DEPOSIT ACCOUNTS 1,415,576 1,016,645 505,335 387,565
OTHER INTEREST
EXPENSE 12,641 72,799 40 16,785
------------------ ------------------ ------------------ ------------------
1,428,217 1,089,444 505,375 404,350
------------------ ------------------ ------------------ ------------------
NET INTEREST INCOME 1,611,819 1,521,654 565,367 516,807
PROVISION FOR LOAN
LOSSES 90,000 90,000 30,000 30,000
------------------ ------------------ ------------------ ------------------
NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES 1,521,819 1,431,654 535,367 486,807
------------------ ------------------ ------------------ ------------------
OTHER OPERATING INCOME:
SERVICE CHARGES 148,194 116,505 49,932 44,075
OTHER INCOME 15,544 6,460 6,967 1,505
------------------ ------------------ ------------------ ------------------
TOTAL 163,738 122,965 56,899 45,580
------------------ ------------------ ------------------ ------------------
OTHER OPERATING EXPENSES:
SALARIES AND BENEFITS 365,875 313,402 127,063 108,288
NET OCCUPANCY EXPENSE 98,707 94,161 34,120 31,311
EQUIPMENT EXPENSE 42,399 37,939 16,077 14,453
OTHER OPERATING
EXPENSES 288,279 266,553 102,448 69,741
------------------ ------------------ ------------------ ------------------
TOTAL 795,260 712,055 279,708 223,793
------------------ ------------------ ------------------ ------------------
INCOME BEFORE TAXES 890,297 842,564 312,558 308,594
INCOME TAX PROVISION 304,700 287,700 100,500 104,500
------------------ ------------------ ------------------ ------------------
NET INCOME $ 585,597 $ 554,864 $ 212,058 $ 204,094
================== ================== ================== ==================
EARNINGS PER SHARE:
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING $ 299,589 $ 300,000 $ 298,917 $ 300,000
================== ================== ================== ==================
NET INCOME PER COMMON
SHARE $ 1.95 $ 1.85 $ .71 $ .68
================== ================== ================== ==================
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
COMMUNITYCORP
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 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 (38,401) (38,401)
PURCHASE OF
TREASURY STOCK (18,411) (18,411)
NET INCOME
FOR THE PERIOD 585,597 585,597
---------------- ---------------- ---------------- ---------- ---------------- ---------------
BALANCE,
SEPT. 30, 1996 $ 1,500,000 $ 1,731,708 $ (44,040) $2,898,033 $ (18,411) $6,067,290
================ ================ ================ ========== =============== ===============
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE>
COMMUNITYCORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
1996 1995
------------------ ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 585,597 $ 554,864
ADJUSTMENTS TO RECONCILE NET INCOME TO
NET CASH PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION 63,550 59,020
PROVISION FOR POSSIBLE LOAN LOSSES 90,000 90,000
AMORTIZATION LESS ACCRETION ON INVESTMENTS 13,135 1,379
AMORTIZATION OF DEFERRED LOAN COSTS 26,330 29,667
(INCREASE) DECREASE IN INTEREST RECEIVABLE
AND OTHER ASSETS (161,281) (126,550)
INCREASE (DECREASE) IN INTEREST PAYABLE
AND OTHER LIABILITIES (194,325) 266,888
------------------ ------------------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 423,006 875,268
------------------ ------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
NET INCREASE IN LOANS TO CUSTOMERS (1,766,180) (3,527,237)
MATURITIES OF TIME DEPOSITS WITH OTHER BANKS 100,000
PURCHASES OF SECURITIES AVAILABLE-FOR-SALE (8,379,992) (1,899,892)
MATURITIES OF SECURITIES AVAILABLE-FOR-SALE 2,068,015 1,900,000
SALES OF SECURITIES AVAILABLE-FOR-SALE 100,125
PURCHASES OF SECURITIES HELD-TO-MATURITY (3,310,939) (200,000)
MATURITIES OF SECURITIES HELD-TO-MATURITY 711,119 2,665,886
PURCHASES OF PREMISES AND EQUIPMENT (496,063) (49,626)
------------------ ------------------
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES (11,073,915) 1,010,868
------------------ ------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
NET INCREASE IN DEPOSITS ACCOUNTS 10,054,346 6,389,933
DECREASE IN SHORT-TERM BORROWINGS (989,554) (1,972,938)
PURCHASE OF TREASURY STOCK (18,411)
DIVIDENDS PAID (75,000) (63,000)
------------------ ------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 8,971,381 4,353,995
------------------ ------------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (1,679,528) 4,218,395
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 6,628,028 1,859,728
------------------ ------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,948,500 $ 6,078,123
================== ==================
CASH PAID DURING THE PERIOD FOR:
INCOME TAXES $ 475,129 $ 197,100
INTEREST $ 1,413,509 $ 967,373
</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 September 30, 1996 and for the interim periods ended
September 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.
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 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.
7
<PAGE>
COMMUNITYCORP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
The following is a discussion of the Company's financial condition as of
September 30, 1996 compared to December 31, 1995, and the results of operations
for the three and nine months ended September 30, 1996 compared to the three and
nine months ended September 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 nine months ended September 30, 1996, net interest income increased
$90,165 or 5.93% over the same period in 1995. The net interest margin realized
on earning assets decreased slightly from 4.99% for the nine months ended
September 30, 1995 to 4.36% for the same period in 1996. The interest rate
spread also decreased by 62 basis points from 4.20% at September 30, 1995 to
3.58% at September 30, 1996. Yields on earning assets decreased slightly while
an increase in certificates of deposit resulted in higher rates paid on interest
bearing liabilities. The increase in investment securities which tend to have
lower earning yields than loans contributed to the decrease in the interest
margin and interest rate spread.
Net interest income increased from $516,807 for the quarter ending September 30,
1995 to $565,367 for the quarter ending September 30, 1996. This represents an
increase of $48,560 or 9.40%. The net interest margin realized on earning assets
decreased from 5.14% for the quarter ended September 30, 1995 to 4.34% for the
quarter ended September 30, 1996. The interest rate spread also decreased by 64
basis points from 4.25% at September 30, 1995 to 3.61% at September 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 nine months ended September 30, 1996, the
provision charged to expense was $90,000. This was the same amount for the
comparable period in 1995. For the quarter ended September 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 September 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 nine months ended September 30, 1996 was
$163,738, an increase of $40,773 or 33.16% from the comparable period in 1995.
The increase is primarily a result of an increase in Overdraft and NSF fees from
$74,470 at September 30, 1995 to $100,795 at September 30, 1996. This increase
is the result of continued growth in deposit accounts over the two periods.
Deposits at September 30, 1995 were $40,639,607 compared to $50,693,953 at
September 30, 1996. Other income increased by $9,084 to $15,544 at September 30,
1996.
For the quarter ended September 30, 1996, non-interest income increased $11,319
or 24.83% over the same period in 1995. This increase is primarily due to
service charges which increased $5,857 or 13.29% to $49,932 for the quarter
ended September 30, 1996. Other income increased $5,462 for the quarter ended
September 30, 1995 compared to the quarter ended September 30, 1996.
NON-INTEREST EXPENSE
Total non-interest expense for the nine months ended September 30, 1996 was
$795,260 or 11.69% higher than the nine months ended September 30, 1995.
Salaries and employee benefits increased from $313,402 at September 30, 1995 to
$365,875 for the nine months ended September 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 September 30, 1996, non-interest expense increased $55,915
or 24.99% over the same period in 1995. The largest increase between the quarter
ended September 30, 1996 and the quarter ended September 30, 1995 was in other
operating expenses which increased $32,707 or 46.90%.
INCOME TAXES
The income tax provision for the nine months ended September 30, 1996 was
$304,700 as compared to $287,700 for the same period in 1995. The effective tax
rates were 34.22% and 34.15% at September 30, 1996 and 1995, respectively. The
effective tax rates were 32.15% and 33.86% for the quarter ended September 30,
1996 and September 30, 1995, respectively.
NET INCOME
The combination of the above factors resulted in net income for the nine months
ended September 30, 1996 of $585,597 as compared to $554,864 for the same period
in 1995. This represents an increase of $30,733 or 5.54% over the same period in
1995. For the quarter ended September 30, 1996, net income was $212,058 as
compared to $204,094 for the quarter ended September 30, 1995. This represents
an increase of $7,964 or 3.90% from the quarter ending September 30, 1996 as
compared to the quarter ending September 30, 1995.
9
<PAGE>
COMMUNITYCORP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
ASSETS AND LIABILITIES
During the first nine months of 1996, total assets grew $9,324,252 or 19.49%
when compared to December 31, 1995. The primary source of growth in assets was
in investment securities with an increase of $8,739,976 or 87.64% during the
first nine months of 1996. Total deposits increased $10,054,346 or 24.74% from
the December 31, 1995 amount of $40,639,607. Within the deposit area,
certificates of deposit increased $4,061,792 or 22.47% during the first nine
months of 1996.
INVESTMENT SECURITIES
Investment securities increased from $9,972,773 at December 31, 1995 to
$18,712,749 at September 30, 1996. Securities available-for-sale increased
$6,153,508 or 123.94% from December 31, 1995 to September 30, 1996. Securities
held to maturity increased $2,586,468 or 51.65% to a balance of $7,594,347 at
September 30, 1996. The increase in investments is attributable to the slow
growth in the loan portfolio.
LOANS
The demand for loans remained stable in the Walterboro marketplace during the
first nine months of 1996. Net loans increased $1,649,850 or 5.57% during the
period. Balances within the major loans receivable categories as of September
30, 1996 and December 31, 1995 are as follows:
September 30, December 31,
1996 1995
Commercial and industrial $ 21,761,945 $ 20,628,084
Real estate 4,203,042 4,150,250
Consumer 5,156,480 4,687,119
Agricultural 293,047 376,221
Other, net 479,470 373,687
-------------------- --------------------
$ 31,893,984 $ 30,215,361
==================== ====================
10
<PAGE>
COMMUNITYCORP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
RISK ELEMENTS IN THE LOAN PORTFOLIO
The following is a summary of risk elements in the loan portfolio:
September 30,
1996 1995
Loans:
Nonaccrual loans $ 321,428 $277,297
Accruing loans more than 90
days past due $ 0 $ 0
Loans identified by the internal review mechanism:
Criticized $ 0 $406,022
Classified $ 602,130 $437,132
Activity in the Allowance for Loan Losses is as follows:
September 30,
1996 1995
Balance, January 1, $ 617,457 $ 550,457
Provision for loan losses for the period 90,000 90,000
Net loans (charged off) recovered for
the period (61,227) (30,130)
------------ -----------
Balance, end of period $ 646,230 $ 610,327
=========== ===========
Gross loans outstanding, end of period $31,893,984 $ 9,241,580
Allowance for Loan Losses to
loans outstanding 2.03% 2.09%
PREMISES, FURNITURE & EQUIPMENT
Premises, furniture and equipment increased from $818,375 at December 31, 1995
to $1,250,888 at September 30, 1996. This increase of $432,513 or 52.85% is
primarily the result of the Company's purchase of a new computer system. The
previous computer system was purchased when the Bank commenced operations in
May, 1989. Management expects the increased depreciation charges to have a
negative impact on earnings.
11
<PAGE>
COMMUNITYCORP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
DEPOSITS
At September 30, 1996, total deposits increased by $10,054,346 or 24.74% from
December 31, 1995. Expressed in percentages, non-interest bearing deposits
increased 9.19% and interest bearing deposits increased 26.77%.
Balances within the major deposit categories as of September 30, 1996 and
December 31, 1995 are as follows:
September 30, December 31,
1996 1995
Non-interest bearing demand deposits $ 5,120,739 $ 4,689,668
Interest bearing demand deposits 7,252,045 5,973,089
Savings deposits 16,186,830 11,904,303
Certificates of deposit 22,134,339 18,072,547
------------- ----------
$ 50,693,953 $ 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 61.64% at September 30, 1996 and
71.10% at December 31, 1995.
Securities available-for-sale which totaled $11,118,402 at September 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 September 30, 1996, unused lines of credit totaled
$2,500,000.
12
<PAGE>
COMMUNITYCORP
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS -- continued
CAPITAL RESOURCES
Total shareholders' equity increased from $5,613,505 at December 31, 1995 to
$6,067,290 at September 30, 1996. The increase of $453,785 is primarily
attributable to earnings for the period of $585,597 with dividends paid of
$75,000. A negative change of $38,401 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 September 30,
1996:
Shareholders' equity $ 6,045,355
Less: intangibles (44,008)
--------------------
Tier I capital 6,001,347
Plus: allowance for loan losses (1) 474,770
--------------------
Total capital $ 6,476,117
====================
Risk-weighted assets $ 37,981,591
====================
CAPITAL RESOURCES -- continued
Risk based capital ratios
Tier I 15.80%
Total capital 17.05%
Leverage ratio 10.50%
(1) limited to 1.25% of risk-weighted assets
The Company has an option to purchase a lot in a neighboring community. The
Company has received regulatory approval from the State Board of Financial
Institutions and FDIC to open a branch on this lot. Estimated costs for this
branch include $157,500 for the lot and $550,000 for the building.
13
<PAGE>
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.
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 September 30, 1996
Items 1, 2, 3, 4 and 5 are not applicable.
14
<PAGE>
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: October 31, 1996 By:
Gwen P. Bunton
Chief Financial Officer
15
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 2,598,500
<INT-BEARING-DEPOSITS> 10,000
<FED-FUNDS-SOLD> 2,350,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 11,118,402
<INVESTMENTS-CARRYING> 7,594,347
<INVESTMENTS-MARKET> 7,533,394
<LOANS> 31,893,984
<ALLOWANCE> 646,230
<TOTAL-ASSETS> 57,171,801
<DEPOSITS> 50,693,953
<SHORT-TERM> 0
<LIABILITIES-OTHER> 410,558
<LONG-TERM> 0
0
0
<COMMON> 1,500,000
<OTHER-SE> 4,567,290
<TOTAL-LIABILITIES-AND-EQUITY> 57,171,801
<INTEREST-LOAN> 2,237,317
<INTEREST-INVEST> 614,488
<INTEREST-OTHER> 188,231
<INTEREST-TOTAL> 3,040,036
<INTEREST-DEPOSIT> 1,415,576
<INTEREST-EXPENSE> 1,428,217
<INTEREST-INCOME-NET> 1,611,819
<LOAN-LOSSES> 90,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 795,260
<INCOME-PRETAX> 890,297
<INCOME-PRE-EXTRAORDINARY> 890,297
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 585,597
<EPS-PRIMARY> 1.95
<EPS-DILUTED> 1.95
<YIELD-ACTUAL> 4.36
<LOANS-NON> 321,428
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 602,130
<ALLOWANCE-OPEN> 617,457
<CHARGE-OFFS> 71,227
<RECOVERIES> 10,000
<ALLOWANCE-CLOSE> 646,230
<ALLOWANCE-DOMESTIC> 646,230
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
