FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark one)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
0-9517
Commission File Number
BANK OF NEW HAMPSHIRE CORPORATION
(Exact name of registrant as specified in its charter)
NEW HAMPSHIRE 02-0346918
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
300 Franklin Street
Manchester, New Hampshire 03105
(Address of principal executive office) (Zip Code)
(603) 624-6600
(Registrant's telephone number, including area code
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
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 periods 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 the issuer's common stock as of
September 30, 1995:
Common Stock, $2.50 stated value, no par value, 4,064,165 shares.
<PAGE>
BANK OF NEW HAMPSHIRE CORPORATION
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Bank of New Hampshire Corporation and Subsidiary:
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Cash Flows 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 6
LIST OF TABLES
1995 Quarterly Average Balance Sheets and Rates 14
1994 Quarterly Average Balance Sheets and Rates 15
Quarterly Condensed Income Statements 16
Nonperforming Assets Quarterly Summary 17
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. 18
SIGNATURES 18
<PAGE>
BANK OF NEW HAMPSHIRE CORPORATION
CONSOLIDATED BALANCE SHEETS
September 30 December 31
1995 1994
(Dollars in thousands,
Assets except per share amounts)
Cash and due from banks $ 69,512 $ 66,037
Federal funds sold 58,000 28,000
Total cash and cash equivalents 127,512 94,037
Securities:
Held-to-maturity debt 275,956 286,577
Available-for-sale equity 3,686 3,614
Total securities 279,642 290,191
Loans:
Commercial 64,325 58,764
Real estate - commercial 135,372 133,183
Real estate - construction 5,747 3,544
Real estate - residential 259,845 261,062
Installment 65,437 85,926
Total loans 530,726 542,479
Less: Allowance for possible loan losses 12,073 13,191
Net loans 518,653 529,288
Premises and equipment 10,634 10,226
Other real estate owned 7,959 10,124
Other assets 17,927 19,590
Total Assets $962,327 $953,456
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing $160,756 $148,009
Interest bearing 674,746 677,847
Total deposits 835,502 825,856
Securities sold under agreements to repurchase 30,392 40,888
Other borrowed funds 3,072 3,072
Accrued expenses and other liabilities 10,551 8,466
Total liabilities 879,517 878,282
Shareholders' Equity:
Preferred stock - no par value
Authorized shares - 500,000; none issued
Common stock - stated value $2.50 per share
Authorized - 6,000,000 shares
Issued - 4,064,165 shares in 1995
and 4,064,103 shares in 1994 10,160 10,160
Surplus 27,289 27,288
Retained earnings 45,361 37,726
Total shareholders' equity 82,810 75,174
Total liabilities and shareholders' equity $962,327 $953,456
See notes to financial statements.
<PAGE>
BANK OF NEW HAMPSHIRE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Quarters Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
(In thousands, except per share amounts)
<S> <C> <C> <C> <C>
Interest income:
Loans, including fees $ 12,752 $ 11,507 $ 37,454 $ 33,660
Securities 4,377 3,275 12,506 8,647
Other 1,021 666 2,502 2,164
Total interest income 18,150 15,448 52,462 44,471
Interest expense:
Deposits 5,720 4,959 16,142 14,715
Funds borrowed 421 268 1,345 609
Total interest expense 6,141 5,227 17,487 15,324
Net interest income 12,009 10,221 34,975 29,147
Provision for possible loan losses 450 252 1,350 1,132
Net interest income after provision
for possible loan losses 11,559 9,969 33,625 28,015
Non-interest income:
Trust fees 1,021 919 3,096 2,912
Service charges on deposit accounts 817 861 2,425 2,464
Securities gains (losses) 2 165 (1) 165
Other 546 578 2,117 1,745
Total non-interest income 2,386 2,523 7,637 7,286
Non-interest expense:
Salaries 3,728 3,492 10,756 10,243
Employee benefits 990 1,380 3,628 3,475
Occupancy 747 730 2,372 2,351
Equipment 459 457 1,293 1,361
OREO expense 503 522 710 1,363
FDIC insurance (57) 540 874 1,643
Other 2,326 2,011 7,182 6,203
Total non-interest expense 8,696 9,132 26,815 26,639
Income before income taxes 5,249 3,360 14,447 8,662
Provision for income taxes 1,799 1,130 4,909 2,718
NET INCOME $ 3,450 $ 2,230 $ 9,538 $ 5,944
Average shares outstanding 4,064 4,064 4,064 4,066
Per share amounts:
Earnings $ .85 $ .55 $2.35 $1.46
Cash dividends declared $ .18 $ .10 $ .48 $ .28
</TABLE>
See notes to financial statements.
<PAGE>
BANK OF NEW HAMPSHIRE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30
1995 1994
(In thousands)
Cash Flows from Operating Activities:
Net income $ 9,538 $ 5,944
Reconciliation of net income to net
cash provided from operating activities:
Provision for possible loan losses 1,350 1,132
Depreciation, amortization and accretion 1,426 2,235
Net change in interest receivables and payables 2,272 (1,908)
Securities (gains) losses 1 (165)
Net gain on sales of loans (154) (53)
(Gains) losses on OREO, net (59) 28
Provision for deferred taxes 646 533
Other, net 1,320 (245)
Net cash provided from operating activities 16,340 7,501
Cash Flows from (used for) Investing Activities:
Sales of available-for-sale equity securities 622 233
Maturities of held-to-maturity debt securities 124,266 113,344
Purchases of held-to-maturity debt securities (114,491) (145,936)
Proceeds from sales of loans 31,425 8,214
Proceeds from sales of OREO 3,571 3,530
Net cash used for loans (23,477) (14,448)
Purchases of premises and equipment (1,980) (541)
Net cash provided from (used for) investing
activities 19,936 (35,604)
Cash Flows used for Financing Activities:
Net cash used for core deposits (23,047) (1,025)
Net cash provided from (used for) certificates
of deposit 32,693 (23,292)
Net cash (used for) provided from short-term
borrowings (10,496) 1,870
Dividends paid (1,951) (1,138)
Net cash used for financing
activities (2,801) (23,585)
Net change in cash and cash equivalents 33,475 (51,688)
Cash and cash equivalents at January 1 94,037 165,999
Cash and cash equivalents at September 30 $127,512 $114,311
Income tax paid $ 4,650 $ 1,820
Interest paid $ 16,154 $ 15,932
See notes to financial statements.
<PAGE>
BANK OF NEW HAMPSHIRE CORPORATION
NOTES TO FINANCIAL STATEMENTS
Note 1. The accompanying unaudited interim consolidated financial
statements of Bank of New Hampshire Corporation (the "Company")
have been prepared in accordance with generally accepted
accounting principles. The balance sheet at December 31, 1994 is
from the audited financial statements at that date but does not
include all of the information and footnotes required for complete
financial statements.
In the opinion of Management, all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of
the information contained herein have been made. Certain amounts
reported in prior periods have been reclassified for comparative
purposes. Results for the three and nine-month periods ended
September 30, 1995 are not necessarily indicative of the results
that may be expected for the year ended December 31, 1995. The
accounting policies followed by the Company are set forth in Note
A to the consolidated financial statements in the 1994 Annual
Report to Shareholders (Form 10-K - Exhibit 13) and should be read
in conjunction with the information contained herein.
Note 2. On October 25, 1995 the Company, along with Peoples
Heritage Financial Group, Inc. ("Peoples") announced a definitive
agreement to merge. The transaction would be a tax-free exchange
of two shares of Peoples common stock for each share of the
Companys' common stock. It is intended that the transaction will
be accounted for as a pooling of interests.
Under the definitive agreement, Peoples' New Hampshire-based
holding company, First Coastal Banks, Inc., will merge into the
Company. Immediately following, The First National Bank of
Portsmouth, a wholly owned subsidiary of First Coastal, will be
merged into Bank of New Hampshire. The combination will result in
Peoples becoming a $4.2 billion banking company with a N.H.-based
banking subsidiary of approximately $1.7 billion in assets.
The agreement is subject to approval by shareholders of both
companies and by regulatory authorities. It is anticipated that
the transaction will close by mid-1996.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
For the Three and Nine-Month Periods Ended September 30, 1995 and
1994
OVERVIEW
Net Income
For the nine months ended September 30, 1995, the Company recorded
net income of $9.5 million, or $2.35 per share, compared to net
income of $5.9 million, or $1.46 per share, for the first nine
months of 1994, a 60% increase. For the third quarter of 1995,
the Company recorded net income of $3.4 million, or $.85 per
share, compared to net income of $2.2 million, or $.55 per share,
for the third quarter of 1994, a 55% increase. The principal
reason for the increases in net income in 1995 compared to 1994
were the increases in net interest income of $1.8 million and $5.8
million for the three and nine-month periods, respectively.
<PAGE>
FINANCIAL CONDITION
Loans
Total loans at September 30, 1995 were $530.7 million, a decrease of
$11.8 million from the 1994 year-end balance of $542.5 million. This
decrease was primarily due to the sale of $31.3 million in student
loans offset somewhat by increases of $10.8 million in installment
loans and $7.7 million in commercial real estate and commercial
loans. A significant amount of the Company's commercial real estate
loans have been made to owner occupied businesses. Even though these
loans are collateralized by real estate, the primary repayment source
for each such loan is the cash flow generated by the related
business. The diversification of the commercial real estate loan
portfolio is such that a material adverse impact on future operations
of the Company is unlikely. See "Nonperforming Assets," and "Net
Interest Income." The Company has no foreign loans or energy loans,
and agricultural loans totalled only $151,000 at September 30, 1995.
Nonperforming Assets
The following Table provides information with respect to the
Company's nonaccrual, past due and restructured loans as well as
the components of nonperforming assets as of the dates indicated.
September 30 December 31
1995 1994
(In thousands)
Nonaccrual loans (NL) $ 6,484 $10,927
Past due 90 days or more (accruing) 2,418 3,003
Restructured loans 594 1,251
Total nonperforming loans (NPL) 9,496 15,181
Other real estate owned (OREO) 7,959 10,124
Total nonperforming assets (NPA) $17,455 $25,305
At September 30, 1995, the nonaccrual loan balance of $6.5
million included $6.1 million in real estate loans, $366,000 in
commercial loans, and $32,000 in installment loans. Loans 90
days past due and still accruing interest were $2.4 million and
included real estate loans of $2.3 million, commercial loans of
$36,000 and installment debt of $51,000. Although restructured
loans have not been material, management encourages restructuring
when it is likely to benefit the Company and the borrower.
The OREO balance at September 30, 1995 of $8.0 million consists of
$5.6 million of commercial properties, $1.4 million of residential
properties, and $1.0 million of sub-divided lots and undeveloped
land.
<PAGE>
The following Table summarizes the real estate operations of property held for
sale for the three and nine-month periods ended September 30, 1995 and 1994.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
(In thousands)
<S> <C> <C> <C> <C>
Balance, beginning of period $ 9,054 $11,484 $10,192 $ 8,607
Additions during the period 348 564 1,499 6,140
OREO losses (56) (49) (112) (275)
OREO sales (1,109) (1,064) (3,250) (3,383)
Other, net (35) (91) (127) (245)
8,202 10,844 8,202 10,844
Allowance for possible OREO losses (243) (168) (243) (168)
Balance, end of period $ 7,959 $10,676 $ 7,959 $10,676
</TABLE>
The following Table summarizes the components of OREO expense for the three and
nine-month periods ended September 30, 1995 and 1994.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
(In thousands)
<S> <C> <C> <C> <C>
Valuation adjustments:
OREO losses $ 31 $ 49 $ 37 $ 175
Provision for possible OREO losses 225 225
Net (gain) loss on OREO sales (51) 12 (321) (147)
205 61 (59) 28
General carrying costs 298 461 769 1,335
OREO expense $ 503 $ 522 $ 710 $ 1,363
</TABLE>
General carrying costs include legal fees, real estate taxes, maintenance,
appraisals, insurance and miscellaneous other costs. See "Non-Interest
Expense."
<PAGE>
Allowance for Possible Loan Losses (APLL)
The APLL is available for future loan losses. Management believes the APLL is
adequate as of September 30, 1995.
The following table presents the activity in the APLL for the three and
nine-month periods ended September 30, 1995 and 1994, and the coverage
percentages at September 30, 1995 and 1994.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
(Dollars in thousands)
<S> <C> <C> <C> <C>
Balance, beginning of period $12,550 $13,090 $13,191 $14,581
Provision for possible loan losses 450 252 1,350 1,132
Loan losses:
Commercial (15) (6) (166) (669)
Real estate - commercial (654) (483) (1,286) (931)
Real estate - construction (2) -- (5) --
Real estate - residential (504) (452) (1,983) (2,349)
Installment (78) (167) (267) (376)
Total loan losses (1,253) (1,108) (3,707) (4,325)
Recoveries:
Commercial 54 84 297 548
Real estate - commercial 18 375 284 396
Real estate - construction 21 5 167 23
Real estate - residential 108 232 210 405
Installment 125 84 281 254
Total recoveries 326 780 1,239 1,626
Net loan losses (927) (328) (2,468) (2,699)
Balance, end of period $12,073 $13,014 $12,073 $13,014
September 30
1995 1994
APLL/NPA 69% 49%
APLL/NPL 127 81
APLL/NL 186 102
</TABLE>
At September 30, 1995, the recorded investment in loans that were considered
impaired under SFAS 114 was $3.8 million, $3.2 million of which were nonaccrual
loans. Included in this amount are $2.8 million of impaired loans for which the
related allocation of the APLL is $905,000. Impaired loans totalling $969,000
do not have an allocation of the APLL as a result of write-downs and other
factors. The average recorded investment in impaired loans during the nine
months ended September 30, 1995 was $4.7 million. The Company recognized no
interest income on impaired loans or nonaccrual loans in 1995.
Securities
Securities totalled $279.6 million at September 30, 1995 and $290.2 million at
December 31, 1994. The portfolio consists principally of U.S. Treasury
instruments with an overall maturity of approximately twelve months. The
estimated fair value of held-to-maturity debt securities totalled $277.7
million and $283.0 million at September 30, 1995 and December 31, 1994,
respectively. Federal funds sold totalled $58.0 million at September 30, 1995,
compared to $28.0 million at year-end 1994, an increase of $30.0 million.
The increase in federal funds sold is principally due to the previously
mentioned sale of student loans.
<PAGE>
Deposits
Deposits of $835.5 million at September 30, 1995 increased $9.6
million from $825.9 million at December 31, 1994. Interest
bearing deposit balances at September 30, 1995 totalled $674.7
million compared to $677.8 million at year-end 1994, a decrease of
$3.1 million. The decrease occurred in savings deposits ($29.5
million), money market accounts ($5.6 million) and NOW accounts
($658,000) and was mostly offset by increases in time deposits
($32.7 million). Demand deposits increased by $12.7 million
through September 30, 1995 compared to the 1994 year-end balance
of $148.0 million. The impact of the changes in deposits during
the first nine months of 1995 was not material to the overall
liquidity position of the Company.
The following Table presents the various types of deposit balances
at September 30, 1995 and at December 31, 1994.
September 30 December 31
1995 1994
(In thousands)
Demand deposits $160,756 $148,009
NOW accounts 137,373 138,031
Savings deposits 259,108 288,646
Money market accounts 45,761 51,359
Time deposits of $100,000 or more 12,994 9,558
Other time deposits 219,510 190,253
Total deposits $835,502 $825,856
Capitalization
The following Table presents the regulatory capital ratios of the
Company.
Regulatory September 30 December 31
Minimum 1995 1994
Regulatory Capital Ratios:
Leverage ratio 3.00% 8.62% 7.68%
Tier 1 risk-based ratio 4.00 16.92 15.94
Total risk-based ratio 8.00 18.19 17.21
The following Table presents the regulatory capital ratios of the Bank.
Regulatory September 30 December 31
Minimum 1995 1994
Regulatory Capital Ratios:
Leverage ratio 3.00% 8.02% 7.06%
Tier 1 risk-based ratio 4.00 15.77 14.67
Total risk-based ratio 8.00 17.04 15.94
Dividend Policy
The declaration and subsequent payment of dividends on the
Company's common stock is considered quarterly by the Board of
Directors. The long-term capacity of the Company to pay dividends
is conditioned upon the receipt of upstreamed dividends from the
Bank.
<PAGE>
RESULTS OF OPERATIONS
Net Interest Income
This discussion of net interest income should be read in
conjunction with the Tables on pages 13 through 16. All interest
income, yields, rates and net interest margins which follow in
this discussion are stated on a fully taxable equivalent ("FTE")
basis using a tax rate of 34%.
Net interest income for the nine months ended September 30, 1995,
totalled $35.1 million compared to $29.3 million for the nine
months ended September 30, 1994. Net interest income changes are
caused by interest-rate movements, changes in the amounts and the
mix of earning assets and interest bearing liabilities, and
changes in the amounts of non-earning assets and non-interest
bearing liabilities. For the first nine months of 1995, the $5.8
million increase in net interest income was primarily due to
higher rates earned on loans and securities. For the first nine
months of 1995, the net interest margin equalled 5.44% compared to
4.47% for the nine months ended September 30, 1994. Net interest
margin is calculated by dividing annualized net interest income by
average total earning assets.
Third quarter net interest income increased from $10.3 million in
1994 to $12.0 million in 1995. This increase of $1.7 million is
the result of higher rates earned, in general, on interest earning
assets, primarily loans and securities. The net interest margin
was 5.48% and 4.67% for the 1995 and 1994 third quarters,
respectively.
The levels of net interest income and margin reported for the
three and nine-month periods ended September 30, 1995 are not
necessarily indicative of future results. The Company has
benefited from interest rate increases on earning assets,
primarily loans and securities, outpacing increases in deposit
rates. The Company will continue to be affected by competitive
pricing pressure on deposits, loans and other products.
Average interest earning assets totalled $862.7 million for the
first nine months of 1995, a decrease of $12.7 million compared to
the 1994 comparable period. The decrease in average interest
earning assets consists primarily of a decrease of $20.6 million
in federal funds sold offset somewhat by an increase of $10.2
million in securities. The yield on average interest earning
assets for the first nine months of 1995 equalled 8.15%, an
increase of 134 basis points from the comparable 1994 yield of
6.81%. The increase in yield was offset somewhat by higher
interest rates paid on deposits and borrowings in the first nine
months of 1995 compared to 1994. Rates paid on deposits and
borrowings increased from 2.78% in the first nine months of 1994
to 3.31% in the comparable 1995 period. Average interest bearing
liabilities totalled $706.5 million for the first nine months of
1995, a decrease of $31.0 million from the comparable 1994 total.
The decrease in average interest bearing liabilities resulted from
a decrease of $38.5 million in savings deposits offset somewhat by
an increase of $7.9 million in securities sold under agreements to
repurchase.
<PAGE>
Provision for Possible Loan Losses
The amount of the provision for possible loan losses is
recommended by Management and is then reviewed and approved
quarterly by the Board of Directors of the Company based on its
assessment of the size, composition and quality of the loan
portfolio and the adequacy of the APLL in relation to the risks
within the loan portfolio.
The provision for possible loan losses for the first nine months
of 1995 and 1994 was $1.3 million and $1.1 million, respectively.
Net loan losses for the first nine months of 1995 and 1994 were
$2.5 million and $2.7 million, respectively. In connection with
determining the appropriate amount of the provision for possible
loan losses for any period, Management evaluates the current
financial condition of specific borrowers, the general economic
climate, loan portfolio composition, concentration of credits,
loan loss history, adequacy of collateral and the trends and
amounts of nonaccrual and past due loans. Management will
continue to utilize the aforementioned criteria to monitor and
analyze loan quality in future periods and will provide for
possible loan losses accordingly.
The provision for possible loan losses for the third quarter of
1995 was $450,000 compared to $252,000 during the third quarter of
1994. Net loans charged off for the quarters ended September 30,
1995 and 1994 were $927,000 and $328,000, respectively.
Non-Interest Income
Non-interest income increased by $351,000 for the nine months
ended September 30, 1995 compared with the same period last year.
The increase is primarily due to a $367,000 gain resulting from a
fire in one of the branch locations wherein the insurance proceeds
exceeded the book basis of the property destroyed. The increase
was also due to higher gains on sales of loans ($101,000) and
higher trust fees ($184,000) which were offset somewhat by lower
securities gains ($166,000).
Non-interest income decreased $137,000 for the third quarter of
1995 over last year's total of $2.5 million. The decrease was
primarily due to lower gains on sales of securities ($163,000).
Non-Interest Expense
Non-interest expense increased $176,000 to $26.8 million for the
nine months ended September 30, 1995 compared to 1994. This
increase was primarily due to other miscellaneous non-interest
expense which totalled $7.2 million for the nine months ended
September 30, 1995, an increase of $979,000 from the 1994
comparable total. This consists of increases in various data
service and computer related expenses ($526,000) and higher other
miscellaneous expenses. OREO expense decreased by $653,000 for
the nine months ended September 30,1995 compared to the 1994 total
of $1.4 million. The decrease was due to lower general carrying
costs ($566,000), lower write-downs to fair value ($138,000) and
higher gains on OREO sales ($174,000). FDIC insurance expense
totalled $874,000 for the nine months ended September 30, 1995, a
decrease of $769,000 from the comparable 1994 total. Effective
June 1, 1995, the deposit insurance premium rate was reduced from
$.23 to approximately $.04 per $100 of deposits. This retroactive
rate reduction resulted in a third quarter refund of $506,000 in
<PAGE>
prepaid premium expense. Salaries and employee benefits increased
by $666,000 for the first nine months of 1995. This increase was
due to increases in the cost of various employee benefit programs
of $153,000 with the remainder resulting from planned increases in
salaries and wages.
Non-interest expense decreased $436,000 for the third quarter of
1995 compared with last year's total for the comparable period of
$9.1 million. Budgeted salary increases of $236,000 were more
than offset by a decrease of $390,000 in employee benefits. FDIC
insurance expense decreased by $597,000 for the third quarter due
to receipt of the overpayment from June 1 to September 30, 1995
and the reduction in rates. Other non-interest expense increased
by $315,000 due primarily to higher other miscellaneous expenses.
Income Tax Expense
Income taxes for the first nine months of 1995 and 1994 totalled
$4.9 million and $2.7 million, respectively, on 1995 pre-tax
income of $14.4 million and 1994 pre-tax income of $8.7 million.
The effective tax rate was 34% and 31% for the nine months ended
September 30, 1995 and 1994, respectively. The SFAS 109 valuation
allowance which totalled $198,000 at December 31, 1993, was
reversed during the 1994 first quarter resulting in a reduction in
income tax expense.
<PAGE>
<TABLE>
<CAPTION>
AVERAGE BALANCES AND RATES -
FULLY TAXABLE EQUIVALENT BASIS
QUARTERLY SUMMARY
(In thousands)
1995
3rd Quarter 2nd Quarter 1st Quarter
Avg Balance Rate Avg Balance Rate Avg Balance Rate
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest earning assets:
Loans (1) $515,809 9.83% $511,435 9.66% $524,790 9.62%
Taxable securities 285,249 6.07 289,138 5.87 289,077 5.43
Non-taxable securities 703 10.16 842 8.57 908 8.93
Federal funds sold and securities
purchased under agreements to resell 69,881 5.80 55,335 6.02 45,037 5.85
Total interest earning assets 871,642 8.28 856,750 8.14 859,812 8.01
Non-interest earning assets:
Cash and due from banks 47,478 47,797 48,304
Premises and equipment, net 10,277 9,999 10,172
Other assets 25,887 26,846 28,568
Less allowance for possible loan losses (12,777) (12,995) (13,318)
Total assets $942,507 $928,397 $933,538
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Savings deposits $440,412 2.44 $449,040 2.49 $464,528 2.52
Certificates of deposit of $100,000
or more 12,249 5.25 10,926 4.52 9,737 4.17
Other time deposits 215,059 5.26 200,546 4.95 191,736 4.34
Federal funds purchased and securities
sold under agreements to repurchase 36,173 4.19 38,542 4.23 42,365 4.24
Other borrowed funds 2,722 5.68 2,484 6.30 2,876 5.08
Total interest bearing liabilities 706,615 3.45 701,538 3.33 711,242 3.14
Non-interest bearing liabilities:
Demand deposits 143,835 138,156 136,893
Other liabilities 10,918 10,318 9,512
Total liabilities 861,368 850,012 857,647
Shareholders' equity 81,139 78,385 75,891
Total liabilities and shareholders' equity $942,507 $928,397 $933,538
Interest rate spread 4.83% 4.81% 4.87%
Net interest margin 5.48% 5.41% 5.41%
</TABLE>
(1) For the calculation of rates earned on loans, nonaccrual and restructured
loans are included in the average balance.
<PAGE>
<TABLE>
<CAPTION>
AVERAGE BALANCES AND RATES -
FULLY TAXABLE EQUIVALENT BASIS
QUARTERLY SUMMARY
(In thousands)
1994
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
Avg Balance Rate Avg Balance Rate Avg Balance Rate Avg Balance Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Interest earning assets:
Loans (1) $533,046 9.05% $520,221 8.80% $514,687 8.65% $523,703 8.60%
Taxable securities 287,717 4.80 289,680 4.45 281,454 4.16 255,100 3.81
Non-taxable securities 2,865 5.54 2,944 5.39 3,057 5.64 2,168 6.55
Federal funds sold and securities
purchased under agreements to resell 58,438 5.06 59,536 4.44 78,148 3.88 94,487 3.19
Total interest earning assets 882,066 7.39 872,381 7.04 877,346 6.77 875,458 6.62
Non-interest earning assets:
Cash and due from banks 50,905 52,694 56,095 55,377
Premises and equipment, net 10,347 10,770 11,041 11,201
Other assets 28,242 27,054 26,192 24,729
Less allowance for possible loan losses (13,509) (13,395) (13,750) (14,694)
Total assets $958,051 $949,504 $956,924 $952,071
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Savings deposits $486,783 2.42 $490,648 2.38 $493,573 2.23 $485,317 2.23
Certificates of deposit of $100,000
or more 9,430 3.83 9,467 3.65 10,262 3.64 11,517 3.70
Other time deposits 191,084 4.00 194,882 3.92 203,024 3.95 212,233 4.11
Federal funds purchased and securities
sold under agreements to repurchase 39,976 3.85 32,855 2.86 29,666 2.15 30,886 1.79
Other borrowed funds 2,573 5.40 2,643 4.65 2,879 3.76 2,785 2.77
Total interest bearing liabilities 729,846 2.94 730,495 2.84 739,404 2.72 742,738 2.77
Non-interest bearing liabilities:
Demand deposits 145,845 138,736 138,464 131,659
Other liabilities 8,485 8,281 8,656 8,801
Total liabilities 884,176 877,512 886,524 883,198
Shareholders' equity 73,875 71,992 70,400 68,873
Total liabilities and shareholders'
equity $958,051 $949,504 $956,924 $952,071
Interest rate spread 4.45% 4.20% 4.05% 3.85%
Net interest margin 4.95% 4.67% 4.48% 4.27%
</TABLE>
(1) For the calculation of rates earned on loans, nonaccrual and restructured
loans are included in the average balance.
Note: Certain amounts in the 1994 Average Balances and Rates schedule have been
reclassified to present in-substance foreclosed assets on a consistent
basis under SFAS 114.
<PAGE>
<TABLE>
<CAPTION>
QUARTERLY INCOME SUMMARY -
FULLY TAXABLE EQUIVALENT BASIS
(In thousands, except per share data)
1995 1994
Third Second First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C> <C> <C> <C>
Interest income $18,183 $17,394 $16,985 $16,420 $15,489 $14,817 $14,286
Interest expense 6,141 5,832 5,514 5,404 5,227 5,019 5,078
Net interest income 12,042 11,562 11,471 11,016 10,262 9,798 9,208
Less tax equivalent adjustment 33 34 33 39 41 47 33
Provision for possible loan
losses 450 450 450 385 252 431 449
Non-interest income 2,386 2,524 2,727 2,402 2,523 2,379 2,384
Non-interest expense 8,696 8,629 9,490 8,971 9,132 8,667 8,840
Income before income taxes 5,249 4,973 4,225 4,023 3,360 3,032 2,270
Provision for income taxes 1,799 1,682 1,428 1,356 1,130 1,021 567
Net income $ 3,450 $ 3,291 $ 2,797 $ 2,667 $ 2,230 $ 2,011 $ 1,703
Earnings per share $ .85 $ .81 $ .69 $ .66 $ .55 $ .49 $ .42
Dividends per share $ .18 $ .15 $ .15 $ .125 $ .10 $ .10 $ .08
Return on average assets (1) 1.45% 1.42% 1.22% 1.10% .93% .84% .73%
Return on average equity (1) 16.87% 16.84% 14.95% 14.32% 12.29% 11.46% 10.03%
</TABLE>
(1) Annualized
Note: Certain amounts in the 1994 Quarterly Income Summary have been
reclassified to present in-substance foreclosed assets on a consistent basis
under SFAS 114.
<PAGE>
<TABLE>
<CAPTION>
NONPERFORMING ASSETS
QUARTERLY SUMMARY
(In thousands)
1995 1994
Third Second First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C> <C> <C> <C>
Nonaccrual loans $ 6,484 $ 8,461 $10,293 $10,927 $12,760 $14,367 $16,673
Loans 90 days or more past due 2,418 1,933 2,058 3,003 2,041 2,603 4,144
Restructured loans 594 - - 1,251 1,259 281 602
Total nonperforming loans 9,496 10,394 12,351 15,181 16,060 17,251 21,419
Other real estate owned 7,959 9,011 10,149 10,124 10,676 11,312 9,650
Total nonperforming assets $17,455 $19,405 $22,500 $25,305 $26,736 $28,563 $31,069
Nonperforming loans as a
percent of total loans 1.79% 2.04% 2.41% 2.80% 3.04% 3.37% 4.17%
Nonperforming assets as a
percent of total loans 3.29% 3.80% 4.38% 4.67% 5.07% 5.57% 6.05%
Allowance for possible loan
losses as a percent of
nonperforming assets 69.17% 64.67% 56.67% 52.13% 48.68% 45.83% 43.81%
</TABLE>
Note: Certain amounts in the 1994 Nonperforming Assets Quarterly Summary have
been reclassified to present in-substance foreclosed assets on a consistent
basis under SFAS 114.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits required by Item 601 of Regulation S-K are listed on
the Exhibits Index on page 18 of this report and are filed
herewith.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended
September 30, 1995.
On October 25, 1995, the Company entered into an Agreement and
Plan of Merger ("Agreement") with Peoples Heritage Financial
Group, Inc. and First Coastal Banks, Inc. A copy of the
Agreement and related documents were enclosed as exhibits
to a Report on Form 8-K filed with the Securities and Exchange
Commission on November 3, 1995.
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.
BANK OF NEW HAMPSHIRE CORPORATION
Date: November 7, 1995 /s/ Davis P. Thurber
Davis P. Thurber, Chairman of the
Board and President
Date: November 7, 1995 /s/ Gregory D. Landroche
Gregory D. Landroche, Executive Vice
President, Chief Financial Officer and
Treasurer
<PAGE>
EXHIBITS INDEX
Filed as part of this Report on Form 10-Q
Part I
Exhibit No. Description Page No.
27 Financial Data Schedule 20
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 69,512
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 58,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 3,686
<INVESTMENTS-CARRYING> 275,956
<INVESTMENTS-MARKET> 277,685
<LOANS> 530,726
<ALLOWANCE> 12,073
<TOTAL-ASSETS> 962,327
<DEPOSITS> 835,502
<SHORT-TERM> 33,464
<LIABILITIES-OTHER> 10,551
<LONG-TERM> 0
<COMMON> 10,160
0
0
<OTHER-SE> 72,650
<TOTAL-LIABILITIES-AND-EQUITY> 962,327
<INTEREST-LOAN> 37,454
<INTEREST-INVEST> 12,506
<INTEREST-OTHER> 2,502
<INTEREST-TOTAL> 52,462
<INTEREST-DEPOSIT> 16,142
<INTEREST-EXPENSE> 17,487
<INTEREST-INCOME-NET> 34,975
<LOAN-LOSSES> 1,350
<SECURITIES-GAINS> (1)
<EXPENSE-OTHER> 26,815
<INCOME-PRETAX> 14,447
<INCOME-PRE-EXTRAORDINARY> 9,538
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,538
<EPS-PRIMARY> 2.35
<EPS-DILUTED> 2.35
<YIELD-ACTUAL> 5.44
<LOANS-NON> 6,484
<LOANS-PAST> 2,418
<LOANS-TROUBLED> 594
<LOANS-PROBLEM> 7,006
<ALLOWANCE-OPEN> 13,191
<CHARGE-OFFS> 3,707
<RECOVERIES> 1,239
<ALLOWANCE-CLOSE> 12,073
<ALLOWANCE-DOMESTIC> 4,858
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 7,215
</TABLE>
