<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the quarterly period ended June 30, 1999
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 000-23129
NORTHWAY FINANCIAL, INC
(Exact name of registrant as specified in its charter)
New Hampshire 04-3368579
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9 Main Street
Berlin, New Hampshire 03570
Address of principal executive offices (Zip Code)
(603) 752-1171
(Registrant's telephone number, including area code)
No Change
(Former name, former address and former fiscal year, if changed since last year)
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 twelve (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 ninety (90) days. YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date. At August 2, 1999, there were
1,668,169 shares of common stock outstanding, par value $1.00 per share.
<PAGE>
INDEX
NORTHWAY FINANCIAL, INC.
PART I. FINANCIAL INFORMATION PAGE
Item 1.
Financial Statements (Unaudited)
Consolidated Statements of Income for the Three Months and Six
Months Ended June 30, 1999 and 1998 ............................. 3
Consolidated Balance Sheets at June 30, 1999 and December
31, 1998 ........................................................ 4
Consolidated Statements of Cash Flows for the Six Months
Ended June 30, 1999 and 1998 .................................... 5
Notes to Consolidated Financial Statements ...................... 7
Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations ....................................... 8
Item 3.
Quantitative and Qualitative Disclosures about Market Risk ...... 12
PART II. OTHER INFORMATION
Item 1.
Legal Proceedings ............................................... 13
Item 2.
Changes in Securities ........................................... 13
Item 3.
Defaults Upon Senior Securities ................................. 13
Item 4.
Submission of Matters to a Vote of Security Holders ............. 13
Item 5.
Other Information ............................................... 13
Item 6.
Exhibits and Reports on Form 8-K ................................ 13
Signatures ............................................................... 14
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
NORTHWAY FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
(Dollars in thousands, except per share data) 1999 1998 1999 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest and dividend income:
Loans $ 6,306 $5,995 $12,234 $11,898
Investment securities available-for-sale 850 883 1,601 1,711
Investment securities held-to-maturity 153 175 286 360
Federal funds sold 9 134 219 384
Interest bearing deposits 2 2 3 3
-------------------------------------------
Total interest and dividend income 7,320 7,189 14,343 14,356
-------------------------------------------
Interest expense:
Deposits 2,427 2,684 4,923 5,360
Borrowed funds 278 200 440 433
-------------------------------------------
Total interest expense 2 ,705 2,884 5,363 5,793
-------------------------------------------
Net interest and dividend income 4,615 4,305 8,980 8,563
Provision for loan losses 135 135 270 270
-------------------------------------------
Net interest and dividend income after provision
for loan losses 4,480 4,170 8,710 8,293
-------------------------------------------
Noninterest income:
Service charges on deposit accounts and fees 238 211 451 420
Securities gains, net 93 74 411 392
Other 283 168 470 286
-------------------------------------------
Total noninterest income 614 453 1,332 1,098
-------------------------------------------
Noninterest expense:
Salaries and employee benefits 2,033 1,563 4,038 3,134
Office occupancy and equipment 625 539 1,238 1,004
Amortization of deposit purchase premium 75 75 150 151
Other 1,052 877 2,090 1,673
-------------------------------------------
Total noninterest expense 3,785 3,054 7,516 5,962
-------------------------------------------
Income before income tax expense 1,309 1,569 2,526 3,429
Income tax expense 470 515 869 1,167
-------------------------------------------
Net income $ 839 $1,054 $ 1,657 $ 2,262
===========================================
Comprehensive net income $ 308 $1,035 $ 956 $ 2,304
===========================================
Per share data:
Earnings per common share $ 0.50 $ 0.61 $ 0.98 $ 1.31
Cash dividends declared $ 0.14 $ 0.14 $ 0.28 $ 0.28
Weighted average number of common shares 1,675,477 1,731,969 1,695,272 1,731,969
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
NORTHWAY FINANCIAL, INC.
CONSOLIDATED BALANCE SHEETS
<CAPTION>
Jun. 30, Dec. 31,
(Dollars in thousands, except per share data) 1999 1998
- ----------------------------------------------------------------------------------------------------------------
(Unaudited) (Audited)
<S> <C> <C>
Assets
Cash and due from banks and interest bearing deposits $ 13,579 $ 14,948
Federal funds sold - 36,475
Investment securities available-for-sale 55,767 50,567
Investment securities held-to-maturity 13,913 6,509
Loans held for sale 649 535
Loans 314,864 284,158
Unearned income (501) (332)
Allowance for loan losses (4,637) (4,404)
-----------------------
Loans, net 309,726 279,422
-----------------------
Real estate acquired by foreclosure 284 158
Accrued interest receivable 2,320 1,846
Deferred income tax asset, net 1,788 1,222
Premises and equipment, net 10,024 9,963
Deposit purchase premium 709 860
Other assets 2,593 1,467
-----------------------
Total assets $411,352 $403,972
=======================
Liabilities and Stockholders' Equity
Liabilities:
Interest bearing deposits $286,970 $305,113
Non-interest bearing deposits 44,794 45,808
Securities sold under agreements to repurchase 9,054 6,791
Short-term Federal Home Loan Bank advances 24,548 833
Long-term Federal Home Loan Bank advances 2,278 2,278
Other liabilities 4,074 2,193
-----------------------
Total liabilities 371,718 363,016
-----------------------
Stockholders' equity:
Preferred stock, $1 par value; 1,000,000 shares authorized; none issued -- --
Common stock, $1 par value; 9,000,000 shares authorized;
1,731,969 shares issued and 1,677,169 outstanding June 30, 1999
and 1,729,969 outstanding December 31, 1998 1,732 1,732
Additional paid-in-capital 2,101 2,101
Retained earnings 38,264 37,084
Treasury stock, at cost (54,800 and 2,000 shares, respectively) (1,856) (55)
Accumulated other comprehensive income (loss), net of tax (607) 94
-----------------------
Total stockholders' equity 39,634 40,956
-----------------------
Total liabilities and stockholders' equity $411,352 $403,972
=======================
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
NORTHWAY FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Six Months
Ended June 30,
(Dollars in thousands) 1999 1998
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,657 $ 2,262
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for:
Loan losses 270 270
Depreciation and amortization 598 542
Deferred income taxes (125) (11)
Writedown of real estate acquired by foreclosure 37 --
Gains on sales of investment securities available-for-sale, net (411) (392)
Amortization of premium on investment and mortgage-backed securities, net 52 66
Increase (decrease) in unearned income, net 169 (94)
Gains on sales of real estate acquired by foreclosure -- (65)
Net increase in loans held for sale (114) (155)
Increase in accrued income receivable (474) (250)
(Increase) decrease in other assets (1,126) 85
Increase (decrease) in other liabilities 1,881 (371)
-------------------
Net cash provided by operating activities 2,414 1,887
-------------------
Cash flows from investing activities:
Proceeds from sales of investment securities available-for-sale 4,588 2,161
Proceeds from maturities of investment securities held-to-maturity 442 3,566
Proceeds from maturities of investment securities available-for-sale 5,086 8,394
Purchase of investment securities available-for-sale (18,999) (15,632)
Purchase of investment securities held-to-maturity (9,156) (6,492)
Principal payments received on investment securities held-to-maturity 1,287 --
Principal payments received on investment securities available-for-sale 3,365 2,327
Net increase in loans (31,032) (7,925)
Proceeds from sales of real estate acquired by foreclosure 126 265
Additions to premises and equipment (508) (1,192)
------------------
Net cash used in investing activities (44,801) (14,528)
------------------
Cash flows from financing activities:
Net (decrease) increase in deposits (19,157) 1,273
Advances from Federal Home Loan Bank 121,210 --
Repayment of Federal Home Loan Bank advances (97,495) (4,094)
Net increase in securities sold under agreements to repurchase 2,263 2,937
Purchases of treasury stock (1,801) --
Cash dividends paid ( 477) (243)
------------------
Net cash provided by (used in) financing activities 4,543 (127)
------------------
Net decreases in cash and cash equivalents (37,844) (12,768)
Cash and cash equivalents at beginning of period 51,423 31,396
------------------
Cash and cash equivalents at end of period $13,579 $18,628
==================
Continued....
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
NORTHWAY FINANCIAL, INC.
CONSOLIDATED STATEMENTS OF CASHFLOWS
(Unaudited)
<CAPTION>
For the Six Months
Ended June 30,
(Dollars in thousands) 1999 1998
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash paid during the period for:
Interest $ 5,068 $6,058
==================
Income taxes $ 971 $1,230
==================
Supplemental disclosures of non-cash activities:
Loans transferred to real estate acquired by foreclosure $ 289 $ 251
==================
Loans charged off, net of recoveries $ 37 $ 82
==================
Financed sales of real estate acquired by foreclosure $ -- $ 182
==================
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
NORTHWAY FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
1. Basis of Presentation.
The unaudited consolidated financial statements of Northway Financial,
Inc. and its two wholly owned bank subsidiaries (collectively "the Corporation")
included herein have been prepared by the Corporation in accordance with the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted in accordance with such rules and regulations. The
Corporation, however, believes that the disclosures are adequate to make the
information presented not misleading. The amounts shown reflect, in the opinion
of management, all adjustments necessary for a fair presentation of the
financial statements for the periods reported.
The results of operations for the three and six month periods ended June
30, 1999 and 1998 are not necessarily indicative of the results of operations to
be expected for the full year or any other interim periods.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Introduction
The following discussion and analysis and related consolidated
financial statements include Northway Financial, Inc. and its wholly-owned
subsidiaries, The Berlin City Bank and Pemigewasset National Bank (collectively
the "Corporation").
Certain statements in this Form 10-Q are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward looking statements may include, but are not limited to, projections of
revenue, income or loss, plans for future operations and acquisitions, plans
related to products or services of the Corporation and its subsidiaries, and the
statements made in the Year 2000 discussion. Such forward looking statements are
subject to known and unknown risks, uncertainties and contingencies, many of
which are beyond the control of the Corporation. To the extent any such risks,
uncertainties and contingencies are realized, the Corporation's actual results,
performance or achievements could differ materially from anticipated results,
performance or achievements. Factors that might affect such forward looking
statements include, among other things, overall economic and business
conditions, the demand for the Corporation's products and services, competitive
factors in the industries in which the Corporation competes, changes in
government regulations, the timing, impact and other uncertainties of future
acquisitions, and the Corporation's handling of the Year 2000 issue.
Financial Condition
The Corporation's total assets at June 30, 1999 were $411.4 million
compared to $404.0 million at December 31, 1998, a $7.4 million increase. Net
loans, including loans held for sale, increased $30.4 million to $310.4 million,
the principal cause for this increase was that indirect auto loans outstanding
increased $19.1 million during the quarter. Investment securities, primarily
U.S. Government Agency obligations, increased $12.6 million to $69.7 million.
Cash and cash equivalents decreased $37.8 million to $13.6 million as a result
of the increases in loan and investment securities balances. Total deposits
decreased $19.2 million. The decrease was primarily caused by the withdrawal of
a $14.5 million temporary money market deposit on January 6, 1999 which was
deposited on December 31, 1998. Federal Home Loan Bank advances increased $23.7
million while repurchase agreements increased $2.3 million. Total stockholders
equity declined $1.3 million from $40.9 million at December 31, 1998 to $39.6
million at June 30, 1999. The decline in stockholders' equity was a result of
treasury share purchases totaling $1.8 million, dividend payments of $0.5
million and a decline in the market value of securities available for sale of
$0.7 million. This decrease in stockholders' equity was partially offset by net
income of $1.7 million.
On July 9, 1999, the Corporation, through its Pemigewasset National
Bank subsidiary, completed the purchase of two branch offices from the Vermont
National Bank. The branches, located in Franklin and Tilton, New Hampshire, hold
deposits totaling approximately $18.0 million. Proceeds from the assumption of
deposit liabilities pursuant to the branch purchase were used to pay down short
term debt to the Federal Home Loan Bank of Boston.
The Corporation maintains an allowance for loan losses to absorb future
chargeoffs of loans in the existing portfolio. The allowance is increased when a
loan loss provision is recorded as an expense in the income statement. When a
loan, or portion thereof, is considered uncollectible, it is charged against
this allowance. Recoveries of amounts previously charged off are added to the
allowance when collected. At June 30, 1999 the allowance for loan losses was
$4.6 million, or 1.47% of total loans, as compared to $4.4 million, or 1.55% of
total loans at December 31, 1998. The adequacy of the allowance for loan losses
was based on an evaluation by each bank's management and Board of Directors of
current and anticipated economic conditions, changes in the diversification,
size and risk within the loan portfolio, and other factors. An analysis of the
allowance for loan losses for the three month and six month periods ended June
30, 1999 and 1998 is as follows:
Three Months Six Months
Ended June 30, Ended June 30,
(Dollars in thousands) 1999 1998 1999 1998
- -------------------------------------------------------------------------------
Balance at beginning of period $4,562 $4,225 $4,404 $4,156
----------------------------------------
Charge-offs (77) (119) (166) (250)
Recoveries 17 103 129 168
----------------------------------------
Net Charge-offs (60) (16) (37) (82)
Provision for possible loan losses 135 135 270 270
----------------------------------------
Balance at end of period $4,637 $4,344 $4,637 $4,344
========================================
Nonperforming loans totaled $2.0 million as of June 30, 1999, compared
to $2.5 million at December 31, 1998. The ratio of nonperforming loans to total
loans was 0.64% as of June 30, 1999 compared to 0.90% at December 31, 1998 and
the ratio of nonperforming assets to total assets was 0.56% as of June 30, 1999
compared to 0.67% at December 31, 1998.
Results of Operations
The Corporation reported net income of $839 thousand, or $0.50 per
share, for the three months ended June 30, 1999, versus $1.1 million, or $0.61
per common share, for the three months ended June 30, 1998. Net income for the
six months ended June 30, 1999 was $1.7 million, or $0.98 per share, as compared
to $2.3 million, or $1.31 per share, for the six months ended June 30, 1998. The
decrease in net income is a result of the implementation of several strategic
initiatives in 1998 that have increased noninterest expense and reduced short
term earnings. These initiatives include the opening of new branches in Conway
Village and Tilton, New Hampshire; the creation of a statewide indirect lending
program and an expansion of the Corporation's traditional lending programs.
Additional staffing and office facilities required by these initiatives is the
primary cause for the increases in salaries and benefits and occupancy and
equipment expenses.
Net interest income for the second quarter increased $310 thousand to
$4.6 million as compared to $4.3 million for the second quarter of the prior
year. For the six months ended June 30, 1999 net interest income increased $417
thousand to $9.0 million as compared to $8.6 million for the same period of the
prior year. The increase is a result of higher average loan balances which
enabled the Corporation to maintain the level of interest income while interest
expense decreased due to a more favorable deposit mix and lower interest rates.
Noninterest income increased $161 thousand to $614 thousand in the
second quarter of 1999 versus $453 thousand in the second quarter of 1998. For
the six months ended June 30, 1999 noninterest income increased $234 thousand to
$1.3 million as compared to $1.1 million for the same period of the prior year.
The increase was primarily attributable to increases in other noninterest income
items resulting from the imposition of an ATM surcharge, the creation of
mortgage servicing assets and loan fees.
Noninterest expense increased $731 thousand to $3.8 million for the
quarter ended June 30, 1999 compared to the $3.1 million recorded during the
same period last year. For the six months ended June 30, 1999 noninterest
expense totaled $7.5 million, an increase of $1.6 million over the $5.9 million
recorded for the same period of the prior year. The increase was principally
attributable to the implementation of the strategic initiatives outlined above.
Income Tax Expense
The Corporation recognized income tax expense of $869 thousand and $1.2
million for the six months ended June 30, 1999 and 1998, respectively. The
effective tax rate was 34.4% and 34.0% for those respective periods. The
increase in the effective tax rate is due to the fact that on April 29, 1999 New
Hampshire adopted a new tax law that increased the rate of the Business Profits
Tax from seven to eight percent of income. The tax applies to the Corporation's
1999 fiscal year.
Liquidity
Liquidity risk management refers to the Corporation's and its
subsidiaries' ability to raise funds in order to meet their existing and
anticipated financial obligations. These obligations are the withdrawal of
deposits on demand or at their contractual maturity, the repayment of borrowings
as they mature, the ability to fund new and existing loan commitments and the
ability to take advantage of new business opportunities. Liquidity may be
provided through amortization, maturity or sale of assets such as loans and
securities available-for-sale, liability sources such as increased deposits,
utilization of the FHLB credit facility, purchased or other borrowed funds, and
access to the capital markets. Liquidity targets are subject to change based on
economic and market conditions and are controlled and monitored by the
Corporation's Asset/Liability Committee.
At the subsidiary bank level, liquidity is managed by measuring the net
amount of marketable assets after deducting pledged assets, plus lines of
credit, primarily with the FHLB, which are available to fund liquidity
requirements. Management then measures the adequacy of that aggregate amount
relative to the aggregate amount of liabilities deemed to be sensitive or
volatile liabilities. These include core deposits in excess of $100,000, term
deposits with short maturities, and credit commitments outstanding.
Additionally, the parent holding company requires cash for various
operating needs including dividends to shareholders, the stock repurchase
program, capital injections to the subsidiary banks, and the payment of general
corporate expenses. The primary source of liquidity for the parent holding
company is dividends from the subsidiary banks.
The Corporation's current level of liquidity and funds availability
from outside sources are sufficient to meet the Corporation's needs.
Capital
The Corporation's Tier 1 and Total Risk Based Capital ratios were
14.84% and 16.09%, respectively, at June 30, 1999. The Corporation's leverage
ratio at June 30, 1999 was 10.00%.
As of June 30, 1999, the capital ratios of the Corporation and all its
subsidiary banks exceeded the minimum capital ratio requirements of the "well
capitalized" category under the Federal Deposit Insurance Corporation
Improvement Act of 1991 (FDICIA).
Impact of the Year 2000 Issue
The statements in the following section include "Year 2000 readiness
disclosures" within the meaning of the Year 2000 Information and Readiness
Disclosure Act.
There is considerable concern over the ability of many computer
software programs to function when the year 2000 arrives. This concern arises
because many existing programs use only the last two digits to refer to the
year. As such, programs do not recognize the difference between a year that
begins with "20" instead of the current "19."
The Corporation has developed a Year 2000 strategic plan and a Year
2000 test plan. The Corporation appointed a dedicated Year 2000 project manager.
Each of the Corporation's subsidiary Banks have Year 2000 action teams. These
teams and the Year 2000 project manager work together closely.
The first phase of this project called for the identification of all
information and non information technology systems, both in house and those
provided by third party vendors. All systems have been identified.
The second phase was to complete a risk analysis assessment of each
information and non information technology system. This second phase is
complete.
The third phase was to renovate the information and non information
technology systems to ensure Year 2000 compliance based upon conclusions reached
in the risk analysis assessment phase. Renovation of the subsidiary banks' core
operating hardware was completed on September 19, 1998. Renovation of the Banks'
core operating software was completed on October 10, 1998. Renovations to the
critical mission operating systems was completed by March 31, 1999.
The fourth phase was to validate the renovations to the system. The
testing of the core operating systems was substantially completed by December
31, 1998. The Corporation has hired an outside independent third party to review
the Corporation's validation and testing procedures. Validation of the core
operating systems was completed on March 31, 1999.
The fifth phase was to implement Year 2000 compliant systems. The
Corporation believes that all mission critical systems are now operating on a
Year 2000 compliant basis.
The Corporation has identified both customers and vendors with whom it
has a material relationship and has determined that the risk that these third
party relationships pose to the Corporation is low. For those customers where a
borrowing relationship exists, the subsidiary banks have completed a customer
risk assessment to determine the status of their Year 2000 efforts.
The Corporation has developed a Year 2000 budget which includes
administration, cost of new technology and the cost of testing. Total expenses
from Year 2000 compliance are estimated to be $257,000 a $71,000 increase over
the Corporation's prior estimate. Actual expenses incurred to date are $193,000.
Expenses incurred to date in 1999 are $114,000 and it is projected that total
Year 2000 expense in 1999 will approximate $178,000, a $44,000 increase over the
prior estimate.
The development of a Business Resumption Contingency Plan, to deal with
the Corporation's worst case scenario, loss of electric power, has been
completed. Contingency planning teams have been appointed and are led by the
Year 2000 project manager. The Corporation hired an outside independent third
party to assist the Corporation in preparing the contingency plan. The four
phases to the plan include developing organization planning guidelines,
performing a business impact analysis, drafting a business resumption
contingency plan and validating the plan.
Should the Corporation's worst case scenario, the loss of electric
power, occur, the Corporation will have in place an electric generator at its
operations center. This should allow the Corporation to continue to run its core
operating system. Transactions that would be performed at a number of the
Corporation's locations would then have to be transported to the operations
center for input. This would continue until such time as normal electric power
is restored.
The Year 2000 project manager provides progress reports to the
Corporation's Executive Committee on a weekly basis. Additionally progress
reports are presented to the Corporation's and the subsidiary banks' Boards of
Directors on a monthly basis.
The Corporation's subsidiary banks are subject to regulation by the
Federal Deposit Insurance Corporation and the Office of the Comptroller of the
Currency. In the event the Corporation's efforts as described above fail to
adequately resolve any such Year 2000 issues affecting the Corporation's
subsidiary banks, the Corporation could be subject to formal supervisory or
enforcement actions by their respective regulators.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
For information regarding quantitative and qualitative disclosures
about market risk, see the Corporation's discussion under Item 7A of its Annual
Report on Form 10-K for the fiscal year ended December 31, 1998. Between
December 31, 1998 and June 30, 1999, there were no material changes in the
Corporation's market risk.
<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
The Company's Annual Meeting of Stockholders was held on May 18, 1999. At the
Annual Meeting, the stockholders elected Donald R. Hatt, Barry J. Kelley,
Randall G. Labnon and Steven G. Boucher to three year terms as directors
expiring at the 2002 annual meeting. The final vote for each of these elected
directors is as follows;
For Withheld
--- --------
Donald R. Hatt 1,290,986 52,160
Barry J. Kelley 1,329,986 13,864
Randall G. Labnon 1,329,298 13,848
Stephen G. Boucher 1,319,862 23,284
In addition the stockholders approved the adoption of the Northway Financial,
Inc. 1999 Stock Option and Grant Plan. The final vote regarding the approval of
the Plan is as follows;
For Against Abstain Non-Votes
929,787 92,184 27,482 293,393
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Number
(27) Financial Data Schedule
(b) The Corporation did not file any Reports on Form 8-K during the
quarter ended June 30, 1999.
<PAGE>
SIGNATURES
Pursuant to 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.
NORTHWAY FINANCIAL, INC.
August 13, 1999 BY: \s\ William J. Woodward
-----------------------------
William J. Woodward
President & CEO
(Principal Executive Officer)
August 13, 1999 BY: \s\ George L. Fredette
-----------------------------
George L. Fredette
Senior Vice President & CFO
(Principal Financial and Accounting
Officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND INCOME STATEMENT AND FROM THE MANAGEMENT DISCUSSION AND ANALYSIS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS AND
MANAGEMENT DISCUSSION.
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Jun-30-1999
<CASH> 13,416
<INT-BEARING-DEPOSITS> 163
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 55,767
<INVESTMENTS-CARRYING> 13,913
<INVESTMENTS-MARKET> 13,889
<LOANS> 315,365
<ALLOWANCE> 4,637
<TOTAL-ASSETS> 411,352
<DEPOSITS> 331,764
<SHORT-TERM> 33,602
<LIABILITIES-OTHER> 4,074
<LONG-TERM> 2,278
0
0
<COMMON> 1,732
<OTHER-SE> 37,902
<TOTAL-LIABILITIES-AND-EQUITY> 411,352
<INTEREST-LOAN> 12,234
<INTEREST-INVEST> 1,887
<INTEREST-OTHER> 222
<INTEREST-TOTAL> 14,343
<INTEREST-DEPOSIT> 4,923
<INTEREST-EXPENSE> 5,363
<INTEREST-INCOME-NET> 8,980
<LOAN-LOSSES> 270
<SECURITIES-GAINS> 411
<EXPENSE-OTHER> 7,516
<INCOME-PRETAX> 2,526
<INCOME-PRE-EXTRAORDINARY> 2,526
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,657
<EPS-BASIC> .98
<EPS-DILUTED> .98
<YIELD-ACTUAL> 7.94
<LOANS-NON> 2,012
<LOANS-PAST> 0
<LOANS-TROUBLED> 1,135
<LOANS-PROBLEM> 796
<ALLOWANCE-OPEN> 4,404
<CHARGE-OFFS> 166
<RECOVERIES> 129
<ALLOWANCE-CLOSE> 4,637
<ALLOWANCE-DOMESTIC> 3,940
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 697
</TABLE>
