<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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, 1997
-------------
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________________ to __________________________
Commission file number 0-4707
------
Beverly Bancorporation, Inc.
(Exact name of registrant as specified in its charter)
Delaware 36-4090152
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No. )
16345 South Harlem Avenue 60477
Tinley Park, Illinois (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (708) 614-5073
--------------
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
----- -----
As of July 31, 1997, 5,473,431 shares of the registrants common stock were
outstanding.
1
<PAGE>
BEVERLY BANCORPORATION, INC.
INDEX
PART I. FINANCIAL INFORMATION
Page
----
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets at June 30, 1997 and December 31, 1996 3
Consolidated Statements of Income for the three-month and
six-month periods ended June 30, 1997 and 1996 4
Consolidated Statements of Cash Flows for the six-month periods
ended June 30, 1997 and 1996 6
Notes to Condensed Consolidated Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II OTHER INFORMATION
Item 4. Submission of Matters To A Vote of Security Holders 16
Item 6. Exhibits and reports on Form 8-K 16
Signatures 17
- ----------
2
<PAGE>
PART I. FINANCIAL INFORMATION - ITEM 1. FINANCIAL STATEMENTS
BEVERLY BANCORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1997 (UNAUDITED) AND DECEMBER 31, 1996
(AMOUNTS IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------- ------------
<S> <C> <C>
Cash and due from banks $ 23,680 $ 25,698
Funds sold -- 4,900
Investment securities:
Available-for-sale, at fair value 172,425 175,530
Held-to-maturity, at amortized cost (fair value $29,736 and $30,703,
respectively) 29,817 30,797
Loans 400,947 372,622
Less allowance for possible loan losses 3,847 4,020
-------- --------
Net loans 397,100 368,602
Premises and equipment, net 16,428 15,816
Accrued interest receivable 4,924 4,848
Other real estate 250 350
Intangible assets, net 881 1,021
Other assets 3,375 2,482
-------- --------
TOTAL ASSETS $648,880 $630,044
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Interest bearing $479,581 $469,397
Non-interest bearing 91,117 90,749
-------- --------
Total deposits 570,698 560,146
Securities sold under agreements to repurchase, funds purchased,
and other short-term borrowings 9,290 2,542
Accrued expenses and other liabilities 3,984 5,410
-------- --------
TOTAL LIABILITIES 583,972 568,098
STOCKHOLDERS' EQUITY
Preferred stock, par value $.01 per share; authorized 1,000,000 shares;
no shares issued and outstanding - -
Common stock, par value $.01 per share; authorized 8,000,000 shares;
issued and outstanding 5,473,431 and 5,175,182 55 52
Additional paid-in capital 32,762 27,292
Retained earnings 34,203 36,607
Net unrealized (losses) on available-for-sale securities (314) (207)
Note receivable - officer stockholders (1,798) (1,798)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 64,908 61,946
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $648,880 $630,044
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE>
BEVERLY BANCORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $ 8,301 $ 6,821 $16,117 $13,531
Interest on investment securities:
Taxable 2,543 3,135 5,127 5,983
Tax-exempt 509 465 982 801
Funds sold 33 104 175 463
------- ------- ------- -------
Total Interest Income 11,386 10,525 22,401 20,778
------- ------- ------- -------
INTEREST EXPENSE:
Deposits 4,853 4,613 9,615 9,138
Securities sold under agreements to
repurchase, funds purchased, and
other short-term borrowings 139 87 198 142
Note payable - 181 - 369
------- ------- ------- -------
Total Interest Expense 4,992 4,881 9,813 9,649
------- ------- ------- -------
Net Interest Income 6,394 5,644 12,588 11,129
PROVISION FOR LOAN LOSSES - 34 - 75
------- ------- ------- -------
Net interest income after provision
for loan losses 6,394 5,610 12,588 11,054
------- ------- ------- -------
OTHER INCOME:
Income from fiduciary activities 556 501 1,086 998
Service charges on deposit accounts 960 1,067 1,977 2,172
Net gains on sales of investment
securities 5 35 377 35
Gains on sales of mortgage servicing
rights 283 - 283 -
Gains on sales of other real estate owned 140 - 140 -
Mortgage origination and servicing fees 103 117 208 312
Other 420 306 741 632
------- ------- ------- -------
Total Other Income 2,467 2,026 4,812 4,149
------- ------- ------- -------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
OPERATING EXPENSES:
Salaries and employee benefits 2,880 2,617 6,065 5,372
Occupancy 641 565 1,308 1,188
Equipment 407 377 790 797
Marketing and promotion 287 224 520 427
Computer systems and services 323 273 619 515
Outside services 190 120 412 150
Other 1,670 1,226 3,027 2,430
------- ------- ------- -------
Total Operating Expenses 6,398 5,402 12,741 10,879
------- ------- ------- -------
INCOME BEFORE INCOME TAXES 2,463 2,234 4,659 4,324
Income Tax Expense 749 670 1,391 1,317
------- ------- ------- -------
NET INCOME $ 1,714 $ 1,564 $ 3,268 $ 3,007
======= ======= ======= =======
Net Income Per Share $ 0.30 $ 0.36 $ 0.58 $ 0.70
======= ======= ======= =======
Common and Common Equivalent Shares 5,683,156 4,309,886 5,670,175 4,293,509
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
5
<PAGE>
BEVERLY BANCORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------
CASH FLOWS FROM OPERATING ACTIVITIES: 1997 1996
---- ----
<S> <C> <C>
Net Income $ 3,268 $ 3,007
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses - 75
Provision for depreciation and amortization 783 788
Investment security accretion and amortization net 606 391
Deferred tax expense (125) (258)
Amortization of intangible assets 159 135
Realized investment security gains, net (377) (35)
Gains on sale of other real estate (140) -
Gain on sale of loan servicing rights (283) -
Increase in accrued interest receivable (76) (285)
Increase (decrease) in other assets (700) 346
Loans held for sale 627 1,033
Decrease in accrued expense and other liabilities (1,426) (677)
------- -------
Net Cash Provided by Operating Activities 2,316 4,520
------- -------
CASH FLOWS FROM INVESTMENT ACTIVITIES:
Investment securities available-for-sale:
Proceeds from sale or maturities of securities 37,397 39,404
Purchase of securities (34,704) (70,836)
Investment securities held-to-maturity:
Proceeds from maturities and call of securities 1,739 890
Purchase of securities (751) (2,710)
Net increase in loans (29,070) (13,379)
Purchase of premises and equipment (1,414) (2,110)
Proceeds from sale of other real estate and equipment 185 148
Proceeds from sale of loan servicing rights 283 -
------- -------
Net Cash Used by Investment Activities (26,335) (48,593)
------- -------
</TABLE>
6
<PAGE>
BEVERLY BANCORPORATION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
------------------
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits 10,552 26,661
Net increase in securities sold under agreements to repurchase,
funds purchased and other borrowings 6,748 74
Principal reductions on note payable - (2,000)
Cash dividends (660) (403)
Proceeds from issuance of common stock 461 184
Proceeds from notes receivable - officer stockholders - 30
------- -------
Net Cash Provided by Financing Activities 17,101 24,546
------- -------
Increase (Decrease) in Cash and Cash Equivalents (6,918) (19,527)
Cash and Cash Equivalents at Beginning of Year 30,598 52,710
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $23,680 $33,183
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid During the Year for:
Interest $ 9,668 $ 9,483
Income Taxes 1,250 1,300
Non-Cash Investing and Financing Activities:
Unrealized (loss) on available-for-sale securities (175) (5,125)
Net change in loans transferred to other real estate (55) 278
Capital lease - 601
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements
7
<PAGE>
BEVERLY BANCORPORATION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1997
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the rules and
regulations of the Securities and Exchange Commission. Accordingly, they do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring items)
considered necessary for a fair presentation have been included. Operating
results for the three and six month periods ended June 30, 1997 are not
necessarily indicative of the results that maybe expected for the year ended
December 31, 1997. The year end condensed balance sheet data was derived
from audited financial statements. These financial statements should be read
in conjunction with the consolidated financial statements and footnotes
thereto included in the Company's annual report and 10-K as of December 31,
1996.
NOTE 2. NEW ACCOUNTING PRONOUNCEMENT
The FASB has issued Statement of Financial Accounting Standards No. 128,
Earnings Per Share, which is effective for financial statements issued after
December 15, 1997. Early adoption of the new standard is not permitted. The
new standard eliminates primary and fully diluted earnings per share and
requires presentation of basic and diluted earnings per share together with
disclosure of how the per share amounts were computed. The pro-forma effect
of adopting the new standard would be basic earnings per share of $.31 and
$.37, and diluted earnings per share of $.30 and $.36 for the three months
ended June 30, 1997 and 1996. For the six months ended June 30, 1997 and
1996 the pro-forma effect of adopting the new standard would be basic
earnings per share of $.60 and $.72 and diluted earnings per share of $.58
and $.70.
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income ("SFAS 130"). SFAS 130 establishes standards for reporting and
display of comprehensive income and its components. There will be no effect
on the Company's recognition or measurement of income or operations, but will
require changes in the disclosure and reporting of the change in equity
during a period from nonowner sources, such as unrealized gains (losses) on
investment securities, Adoption of SFAS 130 is required for the fiscal year
beginning January 1, 1998.
In June 1997, the FASB also issued Statement of Financial Accounting
Standards No. 131, Disclosure about Segments of an Enterprise and Related
Information ("SFAS 131"). SFAS 131 establishes standards for the way that
public business enterprises report selected information about operating
segments in quarterly and annual financial reports to shareholders. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. The Company is currently evaluating
its operations to determine the applicability of the disclosure requirements
to its financial statements. Adoption of SFAS 131 is required for the fiscal
year beginning January 1, 1998.
8
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis is a review of significant factors
affecting the results of operations and the financial condition of the
Company for the three and six month periods ended June 30, 1997. This
discussion should be read in conjunction with the accompanying unaudited
condensed consolidated financial statements and the notes thereto included in
this report.
OVERVIEW
Beverly Bancorporation, Inc. (the "Company") provides a full range of
banking services, including personal and corporate trust services. The
strategy of the company is to continue to increase its core banking business
and to further develop its mortgage, trust, securities sales and insurance
activities in order to provide an array of household financial services
encompassing banking and other investment products.
The Company was incorporated in Delaware on June 13, 1996, as a
wholly-owned subsidiary of Beverly Bancorporation, Inc., an Illinois
Corporation ("Beverly Illinois"). Beverly Illinois was organized in 1969 and
owned all of the outstanding capital stock of the subsidiary banks and
Beverly Trust Company. Pursuant to a reincorporation, on August 16, 1996,
Beverly Illinois was merged with and into the Company and the Company is the
surviving corporation.
Subsequent to the incorporation, the Company sold 1,150,000 shares of
common stock at $15.00 per share in a public offering in the third quarter of
1996. In connection with the offering, the Company's common stock is listed
on the NASDAQ National Market under the symbol BEVB. A portion of the
proceeds of the offering was used to pay off the Company's $9 million debt.
In September 1996, the Company completed the merger of its four subsidiary
banks into one bank subsidiary and renamed the bank "Beverly National Bank".
The net income of the Company was $1.7 million for the three months ended
June 30, 1997, compared with net income of $1.6 million for the three months
ended June 30, 1996. Earnings per share for the second quarter of 1997 was
$.30. The net income of the Company was $3.3 million for the six months
ended June 30, 1997, compared with net income of $3.0 million for the six
months ended June 30, 1996. Earnings per share for the six months ended June
30, 1997 was $.58, compared to $.70 per share in the first six months of
1996. The reduction in earnings per share is attributed to the issuance of
1,150,000 additional shares in the Company's initial public offering in
August of 1996. The following table sets forth certain selected additional
financial data of the company.
9
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1997 1996 1997 1996
---- ---- ---- ----
(dollars in thousands except per share amounts)
<S> <C> <C> <C> <C>
Balance sheet data
Average assets $641,274 $610,388 $636,997 $602,581
Average total loans 390,480 316,268 382,113 312,449
Average deposits 565,716 549,134 563,757 541,362
Average equity 63,469 40,849 62,979 41,360
Per share data
Net income $ 0.30 $ 0.36 $ 0.58 $ 0.70
Book value end of period 11.85 10.19 11.85 10.19
Selected financial ratios
Return on average assets 1.07% 1.02% 1.03% 1.00%
Return on average equity 10.80% 15.31% 10.38% 14.58%
Net interest margin (TE) 4.50% 4.23% 4.43% 4.18%
Net charge-offs (recoveries)
to average total loans 0.03% 0.01% 0.05% ( 0.11%)
</TABLE>
10
<PAGE>
RESULTS OF OPERATIONS
NET INTEREST INCOME
Net interest income equals the difference between interest income earned
on assets and the interest paid on liabilities. A comparison of the
Company's net interest income, on taxable-equivalent basis, follows:
<TABLE>
<CAPTION>
For the Three Months Ended
-------------------------------------------------------------
June 30, 1997 June 30, 1996
---------------------------- -----------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
------- -------- ------ ------- -------- ------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Funds sold $ 2,470 $ 33 5.36% $ 8,172 $ 105 5.10%
Investment securities 204,964 3,315 6.47% 238,246 3,835 6.44%
Loans 386,547 8,331 8.64% 312,322 6,853 8.73%
-------- -------- ---- -------- -------- ----
Total earning assets 593,981 11,679 7.87% 558,740 10,793 7.70%
-------- -------- ---- -------- -------- ----
Interest bearing deposits 479,161 4,854 4.06% 461,988 4,617 3.96%
Note payable - - - 9,907 196 7.85%
Other interest bearing
liabilities 9,124 138 6.07% 5,735 68 4.70%
-------- -------- ---- -------- -------- ----
Total interest bearing
liabilities $488,285 4,992 4.10% $477,630 4,881 4.05%
-------- -------- ---- -------- -------- ----
Margin (T/E) $ 6,687 4.50% $ 5,912 4.23%
======== ==== ======== ====
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
For the Six Months Ended
-------------------------------------------------------------
June 30, 1997 June 30, 1996
---------------------------- -----------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
------- -------- ------ ------- -------- ------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Funds sold $ 6,781 $ 175 5.20% $ 17,701 $ 463 5.25%
Investment securities 205,273 6,614 6.44% 227,190 7,197 6.34%
Loans 378,140 16,176 8.60% 312,449 13,598 8.73%
-------- -------- ---- -------- -------- ----
Total earning assets 590,194 22,965 7.81% 557,340 21,258 7.65%
-------- -------- ---- -------- -------- ----
Interest bearing deposits 477,354 9,606 4.06% 455,468 9,138 4.02%
Note payable - - - 9,678 369 7.65%
Other interest bearing
liabilities 6,405 194 6.11% 5,113 142 5.57%
-------- -------- ---- -------- -------- ----
Total interest bearing
liabilities $483,759 9,800 4.09% $470,259 9,649 4.11%
-------- -------- ---- -------- -------- ----
Margin (T/E) $ 13,165 4.46% $ 11,609 4.18%
======== ==== ======== ====
</TABLE>
For the three months ended June 30, 1997, the Company's net interest
income increased $775,000 or 13.1% to $6.7 million on a taxable equivalent
basis from $5.9 million in the second quarter of 1996.. Interest on earning
assets increased $886,000 or 8.2% to $11.7 million in the second quarter of
1997 from $10.8 million in the same period in 1996 due to the investment of
the deposit and capital growth of the Company, and an increase in loans
outstanding (which provide higher yields than alternative investments). The
Company's interest expense increased $111,000 or 2.3% to $5.0 million in the
second quarter of 1997 from $4.9 million from the same period in 1996 due to
growth in deposits, while the interest expense on the note payable was
eliminated with the payoff of the note .
For the six months ended June 30, 1997, the Company's net interest income
increased $1.6 million or 13.4% to $13.2 million on a taxable equivalent
basis from $11.6 million in the same period of 1996. Interest on earning
assets increased $1.7 million or 8.0% to $23.0 million in the six months
ended June 30, 1997 from $21.3 million in the same period in 1996, primarily
due to growth in loans. Total interest expense increased $151,000 or 1.6% to
$9.8 million in the six months ended June 30, 1997 from $9.6 million in the
same period in 1996, due to growth in deposits which was partially offset by
the elimination of the note payable.
12
<PAGE>
LOAN LOSS PROVISION
The Company has not booked a provision for loan losses in 1997, compared
to $34,000 in the second quarter of 1996 and $75,000 for the six months ended
June 30, 1996. The loan loss provisions have remained relatively low due to
the Company's asset quality, its significant loan loss recoveries, and its
relatively high concentration of generally low-risk residential real estate
loans.
OTHER INCOME
Other income increased $441,000 to $2.5 million in the second quarter of
1997, compared to $2.0 million in the second quarter of 1996, primarily due
to a gain of $283,000 on the sale of servicing rights on $24.5 million of
mortgages and a gain of $140,000 on the sale of other real estate. Service
charges on deposit accounts declined $107,000 from the second quarter of
1996. Other income increased $114,000 in the second quarter to $420,000 from
$306,000 in the second quarter of 1996 primarily due to the initiation of ATM
surcharges in late 1996.
For the six months ended June 30, 1997, other income increased $663,000 to
$4.8 million from $4.1 million for the six months ended June 30, 1996,
primarily due to gains on the sales of service rights, other real estate and
investment securities. Fiduciary income also increased $88,000 to $1.1 million
for the six months ended June 30, 1997.
OPERATING EXPENSE
Operating expenses increased $996,000 or 18.4% to $6.4 million for the
three months ended June 30, 1997, compared to $5.4 million in the three
months ended June 30, 1996. Salaries and Benefits increased $263,000 or
10.0% to $2.9 million. Occupancy expense increased $76,000 due to the
remodeling of several of the Company's branches. Other expenses increased
$444,000 due to increases in audit expense, correspondent services, telephone
expense and operational charge-offs.
For the six months ended June 30, 1997, operating expenses increased
$1.9 million or 17.1% to $12.7 million, compared to $10.9 million in the six
months ended June 30, 1996. Salaries and Benefits increased $693,000 which
included certain severance arrangements totaling $280,000. Occupancy expense
increased $120,000 due to the remodeling of certain of the facilities, and
the opening of the Company's Will-Cook branch in February of 1996. Computer
systems and service increased $104,000 due to additional services obtained
from the Company's outside service provider. Outside services increased
$262,000 due to the outsourcing of additional operational functions in the
later portion of 1996 and the cost of additional in-house MIS support. Other
expense increased $597,000 due to increases in audit, telephone, corespondent
service, and operational losses.
13
<PAGE>
FINANCIAL CONDITION
LOANS
The following table summarizes the Company's loan portfolio at June 30,
1997 and December 31, 1996
June 30, December 31,
1997 1996
--------------------------------
(in thousands)
Commercial and industrial $ 54,160 $ 55,492
Residential real estate 158,803 151,769
Home equity lines of credit 33,798 29,379
Commercial real estate 108,295 93,734
Other consumer 45,891 42,248
-------- --------
Total loans 400,947 372,622
Allowance for loan loss (3,847) (4,020)
-------- --------
Net loans $397,100 $368,602
======== ========
The Company's loan portfolio has increased $28.5 million or 7.7% since
December 31, 1996. Commercial Real Estate Loans increased $14.6 million in
1997 due to the Company's emphasis on collateralized loans to businesses.
Home Equity loans increased $4.4 million with a new promotion beginning in
the first quarter of 1997. Residential Real Estate loans increased
$7.0 million since December 31, 1996. These loans are exclusively ARM and
balloon loans, as the Company does not retain long-term, fixed-rate loans in
its loan portfolio.
NON-PERFORMING LOANS
The following table sets forth information on the Company's non-performing
loans and other real estate as of June 30, 1997 and December 31,1996.
June 30, December 31,
1997 1996
--------------------------------
(in thousands)
Non-accrual loans $ 2,605 $ 1,197
Other loans 90 days past due 357 508
Other real estate 250 350
-------- --------
Total non-performing assets $ 3,212 $ 2,055
======== ========
Nonaccrual and other loans
90 days past due to
total loans .74% .46%
Non-performing assets to
total loans plus
other real estate .80% .55%
Non-performing assets to total
assets .50% .33%
14
<PAGE>
The Company's nonaccrual loans increased to $2.6 million at June 30, 1997
from December 31, 1996. The increased is largely attributed to one
relationship on which the Company believes it is adequately collateralized.
DEPOSITS
Total deposits were $570.7 million as of June 30, 1997, an increase of
$10.6 million from December 31, 1996. This growth was primarily in
certificates of deposit due to short-term promotional certificates offered in
connection with the renovation of the Lockport branch. The Company has seen
a slowing of its growth due to the maturity of some of its promotional
certificates issued in 1996.
COMMON STOCK
On March 11, 1997, the Board of Directors of the Company declared a
5% stock dividend to shareholders of record April 1,1997. The stock dividend
was paid on April 14, 1997.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995.
This quarterly report contains forward looking statements. Forward
looking statements made by or on behalf of the Company are subject to risks
and uncertainties, including but not limited to the following: changes in
interest rates and other economic conditions could have an adverse impact on
the Company; there is no assurance as to the sufficiency of the Company's
allowance for loan losses; current and future government regulation could
have an adverse impact on the Company; and the financial services business is
extremely competitive with a number of competitors being substantially larger
than the Company. Accordingly, actual results may differ materially from
those set forth in the forward looking statements. Attention is also
directed to other risk factors set forth in the company's filings with the
Securities and Exchange Commission.
15
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its annual meeting of stockholders on May 20, 1997. The
following directors were elected, having received the following votes:
DIRECTOR VOTES FOR
Anthony R. Pasquinelli 3,848,381
John D. Van Winkle 3,848,581
William E. Brazley 3,848,581
David B. Colmar 3,848,581
Christopher M. Cronin 3,848,581
Richard I. Polanek 3,841,246
William C. Waddell 3,848,581
The stockholders also approved the Beverly Bancorporation, Inc. 1997
Long-Term Stock Incentive Plan by a vote of 3,630,428 shares in favor to
214,217 shares opposed to the proposal.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the three-month period
ended June 30, 1997
16
<PAGE>
SIGNATURES
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.
BEVERLY BANCORPORATION, INC.
(Registrant)
Date: August 12, 1997 /s/ John D. VanWinkle
--------------------------------------------
John D. Van Winkle
President, Chief Executive Officer
and Director
Date: August 12, 1997 /s/ John T. O'Neill
--------------------------------------------
John T. O'Neill
Executive Vice President,
Chief Financial Officer and
Principal Accounting Officer
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 23680
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 172425
<INVESTMENTS-CARRYING> 29817
<INVESTMENTS-MARKET> 29736
<LOANS> 400947
<ALLOWANCE> 3847
<TOTAL-ASSETS> 648880
<DEPOSITS> 570698
<SHORT-TERM> 9290
<LIABILITIES-OTHER> 3984
<LONG-TERM> 0
0
0
<COMMON> 55
<OTHER-SE> 64853
<TOTAL-LIABILITIES-AND-EQUITY> 648880
<INTEREST-LOAN> 16117
<INTEREST-INVEST> 6109
<INTEREST-OTHER> 175
<INTEREST-TOTAL> 22401
<INTEREST-DEPOSIT> 9615
<INTEREST-EXPENSE> 9813
<INTEREST-INCOME-NET> 12588
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 377
<EXPENSE-OTHER> 3027
<INCOME-PRETAX> 4659
<INCOME-PRE-EXTRAORDINARY> 3268
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3268
<EPS-PRIMARY> .58
<EPS-DILUTED> .58
<YIELD-ACTUAL> 7.87
<LOANS-NON> 2605
<LOANS-PAST> 357
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
