FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended September 30, 1995
Commission File Number 0-10275
EVERGREEN BANCORP, INC.
-----------------------
(Exact name of registrant as specified in its charter)
DELAWARE 36-3114735
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
237 GLEN STREET, GLENS FALLS, NEW YORK 12801
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(Address of principal executive offices)
Registrant's telephone number, including area code: (518) 792-1151
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Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securi-
ties Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
----- -----
Indicate the number of shares outstanding of each Issuer's classes of
common stock, as of the latest practicable date:
Class of Common Stock Number of Shares Outstanding
as of September 30, 1995
------------------- -------------------
$3.33 1/3 Par Value 4,713,394
EVERGREEN BANCORP, INC. AND SUBSIDIARIES
INDEX
Page No.
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PART I FINANCIAL INFORMATION
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Item 1 Financial Statements (unaudited):
Consolidated Statements of Income for the Three
Months Ended September 30, 1995, and 1994 1-2
Consolidated Statements of Income for the Nine
Months Ended September 30, 1995, and 1994 3-4
Consolidated Statements of Financial Condition
as of September 30, 1995, and December 31, 1994 5-6
Consolidated Statements of Cash Flows for the
Nine Months Ended September 30, 1995 and 1994 7-8
Notes to Consolidated Interim
Financial Statements 9-12
Report of Independent Auditors 13-14
Item 2 Management's Discussion and Analysis 15-28
PART II OTHER INFORMATION
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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 -
None
Item 5 Other Information - None
Item 6 (a) Exhibits - Not Applicable
(b) Reports on Form 8-K
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS)
(EXCEPT PER SHARE DATA)
THREE MONTHS
ENDED September 30,
1995 1994
(UNAUDITED)
Interest Income:
Interest and Fees on Loans $13,369 $12,277
Interest on U.S. Government & Agency Obligations 2,714 2,454
Interest on State & Municipal Obligations 388 487
Interest on Other Bonds, Notes, & Debentures 143 174
Interest on Federal Funds Sold & Bank Deposits 411 103
------- -------
Total Interest Income 17,025 15,495
------- -------
Interest Expense:
Interest on Deposits:
Regular Savings, NOW and Money Market
Deposit Accounts 2,515 2,672
Other Time 4,125 2,481
Interest on Short-Term Borrowings 185 55
Interest on Long-Term Debt 205 144
------- -------
Total Interest Expense 7,030 5,352
------- -------
Net Interest Income 9,995 10,143
Provision for Loan Losses 360 540
------- -------
Net Interest Income After Provision for
Loan Losses 9,635 9,603
------- -------
Other Income:
Trust Department Income 465 517
Service Charges on Deposit Accounts 722 691
Credit Card Merchant Discount - 207
Net Gain (Loss) on Security Transactions 25 (112)
Other 338 485
------- -------
Total Other Income 1,550 1,788
------- -------
1
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
CONTINUED
(DOLLARS IN THOUSANDS)
(EXCEPT PER SHARE DATA)
THREE MONTHS
ENDED September 30,
1995 1994
(UNAUDITED)
Other Expense:
Salaries and Employee Benefits 4,484 3,894
Net Occupancy Expense 498 433
Equipment Expense 464 467
FDIC Insurance 6 495
Professional Services 374 253
Data Processing 481 445
Supplies and Printing 186 188
Advertising 157 288
Loss on Sale and Writedown of OREO 904 301
Credit Card Interchange Fees - 150
Other 1,380 1,458
------- -------
Total Other Expense 8,934 8,372
------- -------
Income Before Taxes 2,251 3,019
Applicable Income Taxes 201 1,118
------- -------
Net Income $ 2,050 $ 1,901
======= =======
Earnings Per Common Share:
Average Shares Outstanding 4,708,000 4,734,000
Net Income per Share $ .43 $ .40
See accompanying notes to consolidated interim financial statements.
2
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS)
(EXCEPT PER SHARE DATA)
NINE MONTHS
ENDED September 30,
1995 1994
(UNAUDITED)
Interest Income:
Interest and Fees on Loans $39,577 $35,429
Interest on U.S. Government & Agency Obligations 7,613 7,232
Interest on State & Municipal Obligations 1,367 1,494
Interest on Other Bonds, Notes, & Debentures 434 529
Interest on Federal Funds Sold & Bank Deposits 1,011 170
------- ------
Total Interest Income 50,002 44,854
------- ------
Interest Expense:
Interest on Deposits:
Regular Savings, NOW and Money Market
Deposit Accounts 7,251 8,352
Other Time 11,939 6,965
Interest on Short-Term Borrowings 491 198
Interest on Long-Term Debt 559 398
------- ------
Total Interest Expense 20,240 15,913
------- ------
Net Interest Income 29,762 28,941
Provision for Loan Losses 1,440 1,671
------- ------
Net Interest Income After Provision for Loan Losses 28,322 27,270
------- ------
Other Income:
Trust Department Income 1,701 1,905
Service Charges on Deposit Accounts 2,081 2,092
Credit Card Merchant Discount - 657
Net Loss on Security Transactions (162) (93)
Other 1,067 1,167
------- ------
Total Other Income 4,687 5,728
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3
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF INCOME
CONTINUED
(DOLLARS IN THOUSANDS)
(EXCEPT PER SHARE DATA)
NINE MONTHS
ENDED September 30,
1995 1994
(UNAUDITED)
Other Expenses:
Salaries and Employee Benefits 12,183 10,965
Net Occupancy Expense 1,483 1,584
Equipment Expense 1,376 1,508
FDIC Insurance 942 1,500
Professional Services 1,197 1,429
Data Processing 1,438 1,352
Supplies and Printing 772 565
Advertising 487 850
Loss on Sale and Writedown of OREO 903 344
Credit Card Interchange Fees - 495
Other 4,185 4,372
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Total Other Expenses 24,966 24,964
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Income Before Taxes 8,043 8,034
Applicable Income Taxes 2,130 2,748
------- -------
Net Income $ 5,913 $ 5,286
======= =======
Earnings Per Common Share:
Average Shares Outstanding 4,724,000 4,724,000
Net Income per share $ 1.25 $ 1.12
See accompanying notes to consolidated interim financial statements.
4
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(DOLLARS IN THOUSANDS)
9/30/95 12/31/94
(UNAUDITED)
Assets:
Cash and Cash Equivalents:
Cash and Due From Banks $ 27,285 $ 32,592
Federal Funds Sold 45,600 2,000
-------- --------
Total Cash and Cash Equivalents 72,885 34,592
-------- --------
Securities:
Securities Available For Sale (Amortized
cost of $162,892 and $167,508 at 9/30/95
and 12/31/94 respectively) 162,254 161,079
Securities Held to Maturity (fair value
of $36,034 and $36,328 at 9/30/95
and 12/31/94 respectively) 34,870 35,803
-------- --------
Total Securities 197,124 196,882
-------- --------
Loans (Note 3):
Commercial 217,163 257,152
Mortgage 244,108 232,373
Installment 113,539 98,545
Other 485 452
-------- --------
Total Loans 575,295 588,522
Less:
Allowance for Loan Losses (11,997) (18,752)
Unearned Income on Loans ( 7,978) (11,193)
-------- --------
Loans, net 555,320 558,577
-------- --------
Bank Premises and Equipment net of Depreciation 13,908 13,946
Other Real Estate Owned 4,568 10,319
Other Assets 16,460 19,302
-------- --------
Total Assets $860,265 $833,618
======== ========
5
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
CONTINUED
(DOLLARS IN THOUSANDS)
9/30/95 12/31/94
(UNAUDITED)
Liabilities:
Deposits:
Demand $100,651 $ 98,628
Regular Savings, Now Accounts and Money
Market Deposit Accounts 356,945 372,381
Certificates of Deposit over $100,000 46,954 61,485
Other Time 243,311 203,327
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Total Deposits 747,861 735,821
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Federal Funds Purchased and Other Short
Term Borrowings 3,605 4,418
Accrued Taxes and Other Liabilities 9,894 9,309
Long-Term Debt 17,755 10,469
-------- --------
Total Liabilities 779,115 760,017
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Stockholders' Equity
Common Stock $3.33 1/3 Par Value: Authorized
20,000,000 Shares Issued 4,777,753 at September
30, 1995 and 4,765,253 at December 31, 1994 15,926 15,884
Surplus 6,275 6,141
Undivided Profits 61,305 56,811
Excess Cost Over Fair Value on Securities Available
For Sale Net of Deferred Tax (382) (3,857)
Treasury Stock (64,359 shares at September 30,
1995 and 19,359 shares at December 31, 1994) (1,007) (258)
Common Stock Subscribed by ESOP (967) (1,120)
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Total Stockholders' Equity 81,150 73,601
-------- --------
Total Liabilities and Stockholders' Equity $860,265 $833,618
======== ========
See accompanying notes to consolidated interim financial statements.
6
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
THE NINE MONTHS ENDED SEPTEMBER 30, 1995 1994
(Unaudited)
-----------------
Cash Flows from Operating Activities:
Net Income. . . . . . . . . . . . . . . . . $ 5,913 $ 5,286
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Net Change in Unearned Loan Fees . . . . . 26 68
Net Change in Other Assets and Other Liabilities (388) 423
Loss on Sale of Loans and Securities 162 44
Decrease in Deferred Tax Benefit 1,499 166
Loss on Sale / Write-Down of Other Real Estate. 903 344
Loss on Disposition of Assets. . . . . . . - 13
Depreciation . . . . . . . . . . . . . 1,195 1,202
Provision for Loan Losses. . . . . . . . 1,440 1,671
Amortization of Premiums & Accretion of
Discounts on Securities, Net. . . 91 718
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Net Cash Provided By Operating Activities. 10,841 9,935
------- ------
Cash Flows From Investing Activities:
Proceeds From:
Sales of Securities Available for Sale. . . 8,404 24,872
Maturities of Securities Available for Sale 32,240 28,012
Maturities of Securities Held to Maturity . 10,509 2,505
Purchases of Securities Available for Sale. . (36,256) (43,522)
Purchases of Securities Held to Maturity. . . (9,601) (4,900)
Proceeds From Sales of Loans. . . . . . . . . 18,031 5,027
Net Increase in Loans . . . . . . . . . . . . (18,918) (21,919)
Change in Credit Card and
Check Overdraft Receivables . . . . . . . . 191 364
Proceeds From Sales of Other Real Estate. . . 7,335 1,882
Capital Expenditures. . . . . . . . . . . . . (1,157) (388)
------ ------
Net Cash Provided (Used) By
Investing Activities. . . . . . . . . . 10,778 (8,067)
------ -------
Cash Flows From Financing Activities:
Net Increase in Deposits. . . . . . . . . . . . 12,040 10,581
Net Decrease in Short-Term Borrowings . . . . . (813) (4,879)
Payments on Long Term Debt. . . . . . . . . . . (61) (50)
Proceeds From Issuance of Long-Term Debt. . . . 7,500 2,200
Proceeds From Issuance of Common Stock. . . . . 176 316
7
EVERGREEN BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
CONTINUED
(DOLLARS IN THOUSANDS)
THE NINE MONTHS ENDED SEPTEMBER 30, 1995 1994
(Unaudited)
-----------------
Payments for Purchase of Treasury Stock . . . . (749) -
Dividends Paid. . . . . . . . . . . . . . . . . (1,419) -
------ ------
Net Cash Provided By
Financing Activities. . . . . . . . . . . 16,674 8,168
------ ------
Net Increase in Cash and Cash Equivalents . . . 38,293 10,036
Cash and Cash Equivalents at Beginning of Year. 34,592 31,963
------- -------
Cash and Cash Equivalents at End of Quarter . . $ 72,885 $ 41,999
======== ========
Supplemental Disclosure of Cash Flows:
Interest Paid . . . . . . . . . . . . . . . . $ 19,916 $ 15,860
Taxes Paid. . . . . . . . . . . . . . . . . . 3,367 2,708
Supplemental Schedule of Non-Cash Investing and Financing Activities:
Certain properties which were foreclosed upon were transferred from
loans to other real estate in the amount of $2,487,000 and $9,909,000
during the nine months ended September 30, 1995 and 1994, respective-
ly.
The Company borrowed $1,600,000 which was used to subscribe for
common stock of the Company in 1990. Payments were made on the ESOP
loan in the amount of $153,000 and $144,000 during the nine months
ended September 30, 1995 and 1994 respectively.
As a result of the adoption of Statement of Financial Accounting
Standard No. 115, securities available for sale are recorded at fair
value. The unrealized loss on these securities was $638,000 at
September 30, 1995. The adjustment to stockholders' equity for the
unrealized loss was $382,000, net of deferred income tax benefit of
$256,000 which is included as an increase to the deferred tax asset.
The unrealized loss on these securities was $6,429,000 at December
31, 1994. The adjustment to stockholders' equity for the unrealized
loss was $3,857,000, net of deferred income tax benefit of $2,572,000
which is included as an increase to the deferred tax asset.
At September 30, 1994 securities available for sale had an unrealized
loss of $3,658,000. The adjustment to stockholders' equity net of
deferred income tax benefit of $1,464,000, was $2,194,000.
See accompanying notes to consolidated interim financial statements.
8
EVERGREEN BANCORP, INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
1. Financial Statement Presentation
--------------------------------
The accompanying consolidated financial statements consist of Ever-
green Bancorp, Inc. ("the Company") and the financial statements of
its wholly owned subsidiary, Evergreen Bank, N.A. The unaudited
financial statements have been prepared according to the rules of the
Securities and Exchange Commission. In the opinion of the Company,
the accompanying unaudited consolidated interim financial statements
contain all adjustments necessary to present fairly the financial
position as of September 30, 1995, the results of operations for the
three and nine months ended September 30, 1995 and 1994 and cash
flows for the nine months ended September 30, 1995 and 1994. All
adjustments are of a normal recurring nature. Certain information and
footnote disclosures normally included in financial statements pre-
pared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to rules and regulations
applicable to interim financial statements.
The accompanying interim consolidated financial statements should be
read in conjunction with the Evergreen Bancorp, Inc. consolidated
year-end financial statements, including notes thereto, which are
included in the Evergreen Bancorp, Inc. 1994 Annual Report and Form
10-K.
2. Earnings Per Share
------------------
Primary earnings per share is calculated as net income divided by
average shares outstanding. Average shares outstanding for September
30, 1995, and 1994, takes into consideration a reduction to issued
shares by Treasury Stock held weighted by the number of days in the
quarter such stock is held.
3. Loans
-----
Loans are stated at the principal amount outstanding, net of unearned
discount and deferred fees. Interest on loans is computed by methods
which result in level rates of return on principal amounts outstand-
ing. Net deferred fees are amortized as yield adjustments using
methods that provide for a constant level-yield on the loan.
9
EVERGREEN BANCORP, INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONTINUED
(UNAUDITED)
3. Loans - Continued
-----------------
Commercial loans which are 90 days past due are placed on a non-
accrual status unless they are well secured and in the process of
collection or, regardless of the past due status of the loan, when
management determines that the complete recovery of principal and
interest is in doubt. Consumer loans are generally charged off after
they become 120 days past due. Mortgage loans are generally not
placed on a non-accrual basis unless the value of the real estate has
deteriorated to the point that a potential loss of principal or
interest exists. Amortization of related deferred fees is suspended
when a loan is placed on a non-accrual status.
On May 31, 1993, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 114, "Accounting by
Creditors for Impairement of a Loan", (SFAS No. 114). SFAS No. 114,
was amended by Statement of Financial Accounting Standards No. 118,"
Accounting by Creditors for Impairment of a Loan - Income Recognition
and Disclosure", (SFAS No. 118). These Statements prescribe recogni-
tion criteria for loan impairement and measurement methods for cer-
tain impaired loans and loans whose terms are modified in troubled
debt restructurings. As of January 1, 1995, the Company has adopted
the provisions of SFAS No. 114 and SFAS No. 118 and has provided the
required disclosures.
The allowance for loan losses is utilized to absorb losses in the
loan portfolio. Provisions for loan losses are charged to operating
expense and added to the allowance for loan losses. Losses are
charged to the allowance and recoveries are credited to it. As a
result of the adoption of SFAS No. 114, the allowance for loan losses
related to loans that are identified for evaluation in accordance
with SFAS No. 114 is based on discounted cash flows using the loan's
initial effective interest rate or the fair value of the collateral
for certain collateral dependent loans. The allowance is maintained
at a level deemed appropriate by management to adequately provide
for known and inherent risks in the present portfolio. This evalua-
tion is inherently subjective as it requires material estimates in-
cluding the amounts and timing of future cash flows expected to be
received on impaired loans that may be susceptible to significant
change. While management uses available information to recognize
losses on loans, future additions to the allowance may be necessary
based on changes in economic conditions. In addition, various regu-
latory agencies, as part of their examination process, periodically
10
EVERGREEN BANCORP, INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONTINUED
(UNAUDITED)
3. Loans - Continued
-----------------
review the Company's allowance for loan losses. Such agencies may
require the Company to recognize additions to the allowance based on
their judgments of information available to them at the time of
examination.
Loans at September 30, 1995 are as follows:
Commercial $ 217,163,000
Real estate mortgage 244,108,000
Installment 113,539,000
Other 485,000
-------------
575,295,000
less:
Allowance for loan losses ( 11,997,000)
Unearned income ( 7,978,000)
-------------
Net Loans $ 555,320,000
=============
Changes in the allowance for loan losses for the nine months ended
September 30, 1995, is as follows:
Balance at December 31, 1994 $ 18,752,000
Provisions for loan losses 1,440,000
Recoveries during the period 1,005,000
Losses charged to the allowance (9,200,000)
-------------
Balance at September 30,1995 $ 11,997,000
=============
At September 30, 1995, the recorded investment in loans that are con-
sidered to be impaired under SFAS No. 114 was $ 3,928,000. Included
in this amount is $1,824,000 of impaired loans for which the related
allowance for credit losses is $ 796,000 and $2,104,000 of impaired
loans that as a result of write downs do not have an allowance for
11
EVERGREEN BANCORP, INC.
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
CONTINUED
(UNAUDITED)
3. Loans - Continued
-----------------
credit losses. The average recorded investment in impaired loans
during the nine months ended September 30, 1995 was approximately
$12,512,000. For the nine months ended September 30, 1995 the
Company recognized interest income on those impaired loans of $36,000
which is recognized using the cash basis method of income
recognition.
The following table presents information concerning nonperforming
loans at September 30, 1995:
Non accrual $ 3,991,000
Past due 90+ days 2,583,000
Restructured 796,000
-------------
Total $ 7,370,000
=============
4. Payment of Dividends
--------------------
The Company is a legal entity separate and distinct from its bank and
other subsidiary. The principal source of cash flow of the
Registrant, including cash flow to pay dividends to its stockholders,
is dividends from Evergreen Bank. The subsidiary bank is required to
meet various legal requirements prior to the payment of dividends to
the Company. Without the payment of dividends from Evergreen Bank
the Company would not be able to pay dividends to its stockholders.
12
Independent Auditors' Review Report
The Board of Directors and Stockholders
Evergreen Bancorp, Inc.:
We have reviewed the consolidated statement of financial condition of
Evergreen Bancorp, Inc. and subsidiaries as of September 30, 1995 and
the related consolidated statements of income for the three-month and
nine-month periods ended September 30, 1995 and 1994, and the consol-
idated statements of cash flows for the nine-month periods ended
September 30, 1995 and 1994. These consolidated financial statements
are the responsibility of the Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying ana-
lytical procedures to financial data and making inquiries of persons
responsible for financial and accounting matters. It is substantial-
ly less in scope than an audit conducted in accordance with generally
accepted auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the consolidated financial statements referred
to above for them to be in conformity with generally accepted ac-
counting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated statement of financial condition
of Evergreen Bancorp, Inc. and subsidiaries as of December 31, 1994,
and the related consolidated statements of income, changes in stock-
holders' equity, and cash flows for the year then ended (not present-
ed herein); and in our report dated January 26, 1995, we expressed an
unqualified opinion on those consolidated financial statement. In
our opinion, the information set forth in the accompanying consoli-
dated statement of financial condition as of December 31, 1994, is
fairly presented, in all material respects, in relation to the con-
solidated statement of financial condition from which it has been
derived.
As discussed in note 3 to the consolidated statements, effective
January 1, 1995, the Company adopted the provisions of the Financial
Accounting Standards Board's Statement of Financial Accounting Stan-
dards No. 114, "Accounting by Creditors for Impairment of a Loan,"
and Statement of Financial Accounting Standards No. 118, "Accounting
by Creditors for Impairment of a Loan - Income Recognition and Dis-
closure" which prescribed recognition criteria for loan impairment
and measurement methods for certain impaired loans and loans whose
13
Independent Auditors' Review Report
Continued
The Board of Directors and Stockholders
Evergreen Bancorp, Inc.:
Page 2
terms are modified in a troubled debt restructuring subsequent to the
adoption of these statements.
/s/ KPMG PEAT MARWICK, LLP
Albany, New York
November 9, 1995
14
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FINANCIAL REVIEW
----------------
The principal source of earnings for the Company is its single
banking subsidiary, Evergreen Bank, N.A., the surviving bank from the
1994 merger of the Company's three banking subsidiaries. All discus-
sion herein refers to the banking activities of the Company's banking
subsidiary unless otherwise noted.
SUMMARY OF RESULTS OF OPERATION
-------------------------------
Net income for the three months ended September 30, 1995, was
$2,050,000 or $.43 per share, compared to $1,901,000 or $.40 per
share in 1994's third quarter. For the nine month period, net income
was $5,913,000, or $1.25 per share, compared to $5,286,000, or $1.12
per share, in 1994. Income for the third quarter was primarily
affected by an increased loss on sale and writedown of OREO, lower
FDIC insurance expense, and an accrual for the workforce reduction of
approximately 10% of the Bank's staff. Tax benefits associated with
the sale of certain loan and real estate assets led to lower tax
provision of $201,000 in the third quarter.
On September 29, 1995, the Bank consumated a bulk sale (the
"Bulk Sale") of certain performing and nonperforming loans and OREO
for approximately $13,250,000. The assets sold by the Bank carried a
net book value of approximately $20,000,000 and the loan loss reserve
was reduced by approximately $6,345,000. The loss on sale and
writedown of OREO for the third quarter was $904,000, or
approximately $600,000 higher than in 1994, largely because of the
Bulk Sale.
During the third quarter the FDIC confirmed a reduction in
deposit insurance for commercial banks in the Bank Insurance Fund,
retroactive to June 1, 1995. Cosequently, FDIC insurance expense for
the Bank was $6,000 , or $489,000 lower than in 1994, primarily
because of the lower premiums and a credit for $109,000 in expense
previously recorded in the second quarter.
The Bank announced a workforce reduction of administrative
personnel and recorded an accrual of approximately $462,000 in
severance pay, termination benefits and related expenses.
In 1995 the annualized return on average assets for the nine
months was .94%, compared to .84% for the first nine months last
year. The annualized return on average stockholders' equity, includ-
ing the effect of FASB 115 "Accounting for Certain Investments in
15
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
Debt and Equity Securities", for the first nine months of 1995 was
10.1%, compared to 9.8% for the same period in 1994. The increase in
the returns on average assets and stockholders' equity are due pri-
marily to the increased level of net income.
NET INTEREST INCOME
-------------------
Net interest income for the three months ended September 30,
1995 was $9,995,000, compared to $10,143,000 for the same period of
1994. This represents a decrease of $148,000 or 1.5%. The first
nine months of 1995 reflects net interest income of $29,762,000 an
increase of 2.8% as compared to $28,941,000 for the same period last
year. The decrease in net interest income in 1995's third quarter is
attributed primarily to a decrease in net interest margin due to the
fact that interest rates on costing liabilities continued to rise
while rates on earning assets were negatively affected by a 0.25%
decrease in the federal funds rate early in the quarter and a shift
in assets from higher yielding loans and investments to federal funds
sold.
On a taxable equivalent basis, net interest income was
$10,301,000 for the quarter ended September 30, 1995 as compared to
$10,439,000 for the quarter ended September 30, 1994. This repre-
sents a decrease of $138,000 or 1.3%.
For the first nine months of 1995 taxable equivalent net
interest income increased 2.8% to $30,670,000 from the level reported
for the nine months ended September 30, 1994. The increase in net
interest income on a taxable equivalent basis resulted primarily from
an increase in net interest margin. The favorable rate trend was
created by the yield on earning assets increasing more than the rate
on interest bearing liabilities during the first half of 1995.
Additionally, during the first nine months of 1995 the volume of
average earning assets increased $8.2 million, or 1.0%, in comparison
to the same period in 1994. This increase resulted primarily from a
higher level of federal funds sold, which increased $16.6 million,
nearly four times the respective 1994 average balances. In 1995,
average loans decreased $795,000 or approximately .1% from 1994
average balances of $580.7 million. Investment securities and
securities available for sale decreased $7.5 million or 3.7%.
The increases in average earning assets were funded primarily by
increases in average stockholders equity, which increased $7.0
million or 9.6%. Average interest bearing liabilities increased $4.3
million or less than .7% of their 1994 average balance of $659.4
million.
16
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
While interest bearing liabilities in total only showed a
modest increase, significant balance changes occured within this
category. The average volume of time deposits, increased 31.9% to
$295.1 million as rates increased 125 basis points. The average
volume of Savings, NOW and Money Market Deposit decreased $71.0
million to $347.3 million, as average interest rates on these
deposits increased only 12 basis points from the nine months ended
September 30, 1994. These deposit shifts are largely attributed to
depositors placing funds in longer maturity deposits, in an effort to
increase the effective income yield on their funds.
The 9 basis point increase in net interest margin for the year
resulted from net increases in non-interest bearing funding sources
offset by a 7 basis point decrease in the net interest rate spread
from 1994 to 1995. The trend of increased margin would reverse if
earning asset increases were funded with a more costly funding
source. Additionally, because repricable assets react more rapidly
than repricable liabilities in a lower rate environment, net interest
spread and margin would be negatively impacted.
PROVISION FOR LOAN LOSSES
-------------------------
Management records the provision for loan losses in amounts
sufficient to cover current estimates of the credit risks inherent in
the loan portfolio. Amounts thus charged are reflected in the provi-
sion for loan losses, an element of expenses appearing on the Com-
pany's consolidated statement of income. Factors which influence
management's judgement in determining the adequacy of the allowance
for loan losses and the related loss provision include an analysis
of: existing credits, the growth and composition of the loan portfo-
lio, the loss potential of loans classified by internal reviewers and
supervisory authorities, prevailing regional and national economic
conditions, past due and non-accrual loans and historical loss ex-
perience.
Additionally the collateral value supporting the loan affects
the reserve associated with the loan and the required provision
expense. Collateralization and loan-to-value policies vary by type
of loan and type of collateral. Commercial real estate loans gener-
ally have ratios of 65% or less, whereas required residential real
estate loan-to-value ratios may range from 70% on refinances to 95%
on FHA guaranteed loans. Home equity loans require a 70% loan-to-
value ratio and consumer loan-to-value ratios range from 70% on older
used automobiles to 90% on shorter term mobile home loans secured by
bank deposits. The commercial construction loan collateralization
policy requires a loan-to-value ratio of 65% with a 35% equity in-
vestment by the borrower. Commercial new equipment loans may be
advanced at an 80 - 90% loan-to-value ratio.
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The provision for loan losses for the quarter ended September
30, 1995 was $360,000, compared to $540,000 for the quarter ended
September 30, 1994. For the nine months ended September 30, 1995 the
provision totaled $1,440,000 compared to $1,671,000 a year earlier.
The reduction in provision level can be attributed to the significant
third quarter 1995 reduction of nonperforming loans as a result of
the "Bulk Sale" of nonperforming and performing assets totaling
approximately $20,000,000.
The allowance for loan losses at September 30, 1995, decreased
$6,755,000 since December 31, 1994, as net chargeoffs of $8,195,000
exceeded the nine month 1995 provision of $1,440,000. $ 6,345,000 of
the chargeoff was directly attributable to the bulk sale in September
1995. As a percent of total loans, net of unearned income, the
allowance was 2.1% at September 30, 1995. The allowance represents
162.8 % of the non-performing loans at quarter end compared to 96.5%
at year end 1994.
The relatively modest provision in 1995 and 1994 in relation to
the net charge offs in the periods is attributable to the significant
provision taken in the second quarter of 1993. Since then provision
levels have been at a more modest level due to significant reductions
in nonperforming loans and weaker loan demand.
The following table presents information concerning non-
performing loans and other real estate.
9/30/95 12/31/94
------- --------
(Dollars In Thousands)
Non-Accrual $ 3,991 $ 14,139
Past Due 90 Days 2,583 2,630
Restructured 796 2,656
-------- --------
Total Non-Performing
Loans $ 7,370 $ 19,425
======== ========
Other Real Estate $ 4,568 $ 10,319
The majority of the Company's non-performing loans consist of
commercial and commercial real estate loans. There is no distinct
concentration as to type of borrower within these classifications.
The Company expects net loan charge-offs will exceed peer levels
in 1995 and they may reach the level seen during 1993 owing to the
aproximately $6,300,000 chargeoff attributed to the "Bulk Sale".
While in times of economic uncertainty, it is more difficult to
determine exposure in the loan portfolio, the Company believes its
allowance for loan losses at September 30, 1995 is adequate.
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
OTHER INCOME AND EXPENSE
------------------------
Other income for the nine months ended September 30, 1995, was
$4,687,000, $1,041,000 less than the $5,728,000 recorded in the same
period last year, $657,000 of this decrease is the result of the
Company's decision to sell its merchant credit card portfolio in
1994. Additionally, the Company recorded security losses of $162,000
in 1995 versus a loss of $93,000 in 1994. The largest source of
other income continues to be service charges. Other income for the
third quarter of 1995 was $1,550,000 down 13.3% from $1,788,000 in
the third quarter of 1994.
Other expense for the three months ended September 30, 1995 was
$8,934,000, compared to $8,372,000 for the same quarter last year, an
increase of $562,000 or 6.7%. This increase resulted primarily from
a net loss from sales of other real estate owned of $ 904,000.
Salaries and benefits continue to represent the largest portion of
other expense and they increased $590,000, or 15.2%, on a quarterly
basis and $1,218,000, or 11.1%, on a year to date basis. The third
quarter 1995 increase is due primarily to a one time charge of
$462,000 related to a reduction in force ("RIF") scheduled for the
beginning of the fourth quarter. The annual increase is due to the
"RIF" and to increased merit salary levels and specialized staffing
increases. Management expects that as a result of the reduction of
force salary and benefits should decline from current levels in 1996.
FDIC insurance was $6,000 for the quarter ended September 30,
1995, compared to $495,000 for the same quarter last year. This
decrease is primarily a result of decreased insurance rates on depos-
its retroactive to June 1,1995. Approximately $109,000 of the
decrease from the prior quarter was due to the refund of fees
previously recorded for June 1995. Professional services were
$374,000 for the quarter ended September 30, 1995 as compared to
$253,000 for the same period a year ago. This represents an increase
of $121,000 or 47.8%.
INCOME TAX EXPENSE
------------------
Income tax for the three months ended September 30, 1995, was
$201,000 as compared to $1,118,000 for the three months ended Septem-
ber 30, 1995. The decrease of $917,000 was largely a result of New
York State tax benefits resulting from the "Bulk Sale" and re-
evaluations of reserves related to deferred Federal tax assets in
light of the sale. For the nine months ended September 30, 1995
income tax was $2,130,000 compared to $2,748,000 in 1994. The
effective income tax rates for the nine months ended September 30,
1995 and 1994 were 26.5% and 34.2%, respectively.
19
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
CAPITAL AND LIQUIDITY
---------------------
At September 30, 1995, stockholders' equity was $81,150,000 as
compared to $73,601,000 at December 31, 1994, an increase of 10.3%.
The increase in stockholders' equity is greater than the amount of
1995 earnings, net of dividends and treasury stock purchases, due to
a reduction in the market deficit over cost on the available for sale
securities component of the equity section required by FASB 115.
On March 16, 1995 the Company indicated its intent to repurchase
up to 5 percent of its then outstanding shares. The purchase author-
ization, to a maximum of 237,000 shares, is an amount not to exceed
$4,750,000. The funding for this program is not anticipated to
materially affect the liquidity or capital position of the Company or
the bank. Through September 30, 1995 the Company has purchased
45,000 shares at a cost of $749,000.
The following table sets forth the Company's risk based capital
ratios as of September 30, 1995 and the regulatory guidelines for
well capitalized institutions.
Evergreen Well Capitalized
Risk-Based Bancorp, Inc. Regulatory
Ratios Sept. 30, 1995 Guidelines
---------- ------------- ----------------
Leverage Ratio 9.4 % 5.0 %
Tier 1 14.2 % 6.0 %
Total Capital 15.4 % 10.0 %
Average federal funds sold for the nine months ended September
30, 1995 was $22,185,000 as compared to $5,579,000 for the nine
months ended September 30, 1994. Net cash provided by operating
activities was $10,841,000 for the nine months ended September 30,
1995 as compared to net cash provided of $9,935,000 for the nine
months ended September 30, 1994. Largely due to increases in sales
of loans and other real estate, primarily related to the "Bulk Sale",
net cash provided by investing activities was $10,778,000 for the
nine months ended September 30, 1995 as compared to net cash used of
$8,067,000 for the same period last year. Net cash provided by
20
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
financing activities was $16,674,000 for the nine months of 1995 as
compared to $8,168,000 for the nine months of 1994. The increase in
cash provided by financing activities resulted primarily from a
$7,500,000 increase in long term debt. The level of cash and cash
equivalents was $72,885,000 at September 30, 1995 as compared to
$41,999,000 at September 30, 1994.
Evergreen Bank, N.A. is the principal source of funds to the
Company and, if it cannot pay dividends to the Company, the Company
will be unable to pay dividends to its shareholders.
Adoption of New Accounting Pronouncements
-----------------------------------------
On May 31, 1993, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 114, "Accounting by
Creditors for Impairment of a Loan", (SFAS No. 114). SFAS No. 114,
was amended by Statement of Financial Accounting Standards No. 118,
"Accounting by Creditors for Impairment of a Loan - Income Recogni-
tion and Disclosure", (SFAS No. 118). These Statements prescribe
recognition criteria for loan impairment and measurement methods for
certain impaired loans, and loans whose terms are modified in
troubled debt restructurings subsequent to the adoption of SFAS No.
114. As of January 1, 1995, the Company has adopted the provisions
of SFAS No. 114 and SFAS No. 118 and has provided the required dis-
closures. The accompanying financial statements reflect the effect
of these new pronouncements. Details of the effect of these new
statements are included in the footnotes to the accompanying finan-
cial statements.
Rate Volume Analysis
----------------------
For the purposes of the following analysis, Securities Available for
Sale are stated at average amortized cost and Stockholders' Equity is
unadjusted for the effects of SFAS No. 115.
* Non-accrual loans are included in the previous analysis and the
average balance of these loans is deemed immaterial.
21
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
* Portions of income earned on certain Commercial Loans, US Govern-
ment Obligations and Obligations of State and Political Subdivisions
are exempt from Federal and/or State taxation. Appropriate adjust-
ments have been made to reflect the equivalent amount of taxable
income that would have been necessary to genertae an equal amount of
after tax income. The taxable equivalent adjustment is based on a
marginal Federal income tax rate of 35.0% in 1995 and 34.0% in 1994
along with a marginal State income tax rate of 9.675% for 1995 and
10.35% for 1994.
The following table sets forth the dollar amounts of interest income
(on a taxable equivalent basis) and interest expense and changes
therein resulting from changes in volume and changes in rate. The
change in interest due to both rate and volume has been allocated to
change due to volume and change due to rate based on the percentage
relationship of such variances to each other.
22
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
Analysis of Variance in Net Interest Income Due to Volume and Rates
For the three months ended
30-SEPT-95 VS 30-SEPT-94
INCREASE / (DECREASE) TOTAL
DUE TO CHANGE IN INCREASE/
VOLUME RATE (DECREASE)
--------------------- ----------
Interest Earned:
Loans
Taxable $ (13) $ 1,093 $ 1,080
Tax-Exempt (20) 43 23
Investment Securities
Taxable (43) 249 206
Tax-Exempt 19 (96) (77)
Federal Funds Sold 271 37 308
Interest-Bearing Deposits (1) 1 -
----- ------ ------
Changes in Total Interest
Income 213 1,327 1,540
----- ------ ------
Less Interest Expense Incurred:
Regular Savings, NOW and MMDAs (406) 249 (157)
Time Deposits 710 934 1,644
Short-Term Borrowings 88 42 130
Long Term Debt 13 48 61
Changes in Total Interest ----- ------ ------
Expense 405 1,273 1,678
----- ------ ------
Changes in Net Interest
Income $ (192) $ 54 $ (138)
====== ====== ======
23
EVERGREEN BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CONTINUED
Analysis of Variance in Net Interest Income Due to Volume and Rates
For the nine months ended
30-SEPT-95 VS 30-SEPT-94
INCREASE / (DECREASE) TOTAL
DUE TO CHANGE IN INCREASE/
VOLUME RATE (DECREASE)
--------------------- ----------
Interest Earned:
Loans and Leases
Taxable $ 35 $ 4,054 $ 4,089
Tax-Exempt (89) 187 98
Investment Securities
Taxable (351) 569 218
Tax-Exempt 4 (78) (74)
Federal Funds Sold 708 123 831
Interest-Bearing Deposits (1) 11 10
------ ------ ------
Changes in Total Interest
Income 306 4,866 5,172
------ ------ ------
Less Interest Expense Incurred:
Regular Savings, NOW and MMDAs (1,469) 368 (1,101)
Time Deposits 2,562 2,412 4,974
Short-Term Borrowings 112 181 293
Long Term Debt 40 121 161
------ ------ ------
Changes in Total Interest
Expense 1,245 3,082 4,327
------ ------ ------
Changes in Net Interest
Income $ (939) $1,784 $ 845
====== ====== ======
24
EVERGREEN BANCORP, INC.
Average Balances For The Three Months Ended September 30, 1995
Interest Average
Average Income/ Yield/
Balance Expense Rate
Assets: ------- ------- -------
Loans
Taxable $562,505 $13,077 9.22%
Tax Exempt 17,396 425 9.69%
Securities
Taxable 176,729 2,983 6.70%
Tax Exempt 21,045 435 8.20%
Federal Funds Sold 27,360 407 5.90%
Interest Bearing Deposits
with Banks 434 4 3.65%
-------- -------
Total Earning Assets 805,469 17,331 8.54%
------- -----
Allowance for Loan
Losses (17,789)
Cash and Due from Banks 29,235
Other Non-Earning Assets 37,478
--------
Total Assets $854,393
=======
Liabilities and
Stockholders' Equity:
Regular Savings, NOW
and MMDAs $348,300 2,515 2.86%
Time Deposits 293,325 4,125 5.58%
Short-Term Borrowings 11,782 185 6.23%
Long Term Debt 11,645 205 6.98%
-------- -------
Total Interest
Bearing Liabilities 665,052 7,030 4.19%
------- -----
Demand Deposits 98,205
Other Liabilities 10,041
Stockholders' Equity 81,095
Total Liabilities and --------
Stockholders' Equity $854,393
========
Net Interest Income (Tax
Equivalent Basis) 10,301
Tax Equivalent Adjustment (306)
-------
Net Interest Income $ 9,995
=======
Net Interest Rate Spread 4.35%
=====
Net Interest Margin 5.07%
=====
25
EVERGREEN BANCORP, INC.
Average Balances For The Three Months Ended September 30, 1994
Interest Average
Average Income/ Yield/
Balance Expense Rate
Assets: ------- ------- -------
Loans
Taxable $563,143 $11,997 8.45%
Tax Exempt 18,258 402 8.74%
Securities
Taxable 179,462 2,777 6.14%
Tax Exempt 20,257 512 10.03%
Federal Funds Sold 8,625 99 4.55%
Interest Bearing Deposits
with Banks 737 4 2.15%
-------- -------
Total Earning Assets 790,482 15,791 7.93%
------- -----
Allowance for Loan
Losses (19,224)
Cash and Due from Banks 30,616
Other Non-Earning Assets 38,832
--------
Total Assets $840,706
========
Liabilities and
Stockholders' Equity
Regular Savings, NOW
and MMDAs $406,725 2,672 2.61%
Time Deposits 234,572 2,481 4.20%
Short-Term Borrowings 5,458 55 4.00%
Long Term Debt 10,710 144 5.33%
-------- -------
Total Interest
Bearing Liabilities 657,465 5,352 3.23%
------- -----
Demand Deposits 100,073
Other Liabilities 8,746
Stockholders' Equity 74,422
--------
Total Liabilities and
Stockholders' Equity $840,706
========
Net Interest Income (Tax
Equivalent Basis) 10,439
Tax Equivalent Adjustment (296)
-------
Net Interest Income $10,143
=======
Net Interest Rate Spread 4.70%
=====
Net Interest Margin 5.24%
=====
26
EVERGREEN BANCORP, INC.
Average Balances For The Nine Months Ended September 30, 1995
Interest Average
Average Income/ Yield/
Balance Expense Rate
Assets: ------- ------- -------
Loans
Taxable $562,490 $38,707 9.20%
Tax Exempt 17,452 1,265 9.69%
Securities
Taxable 173,843 8,436 6.49%
Tax Exempt 21,101 1,491 9.45%
Federal Funds Sold 22,185 996 6.00%
Interest Bearing Deposits
with Banks 450 15 4.46%
-------- -------
Total Earning Assets 797,521 50,910 8.53%
------- -----
Allowance for Loan
Losses (18,309)
Cash and Due from Banks 28,148
Other Non-Earning Assets 38,788
--------
Total Assets $846,148
========
Liabilities and
Stockholders' Equity:
Regular Savings, NOW
and MMDAs $347,337 7,251 2.79%
Time Deposits 295,084 11,939 5.41%
Short-Term Borrowings 9,979 491 6.58%
Long Term Debt 11,293 559 6.62%
-------- -------
Total Interest
Bearing Liabilities 663,693 20,240 4.08%
------- -----
Demand Deposits 92,589
Other Liabilities 10,080
Stockholders' Equity 79,786
--------
Total Liabilities and
Stockholders' Equity $846,148
========
Net Interest Income (Tax
Equivalent Basis) 30,670
Tax Equivalent Adjustment (908)
-------
Net Interest Income $29,762
=======
Net Interest Rate Spread 4.45%
=====
Net Interest Margin 5.14%
=====
27
EVERGREEN BANCORP, INC.
Average Balances For The Nine Months Ended September 30, 1994
Interest Average
Average Income/ Yield/
Balance Expense Rate
Assets: ------- ------- -------
Loans
Taxable $561,914 $34,618 8.24%
Tax Exempt 18,823 1,167 8.29%
Securities
Taxable 181,399 8,218 6.06%
Tax Exempt 21,052 1,565 9.94%
Federal Funds Sold 5,579 165 3.95%
Interest Bearing Deposits
with Banks 516 5 1.30%
-------- -------
Total Earning Assets 789,283 45,738 7.75%
-------- ------- -----
Allowance for Loan
Losses (19,191)
Cash and Due from Banks 30,646
Other Non-Earning Assets 35,929
--------
Total Assets $836,667
========
Liabilities and
Stockholders' Equity
Regular Savings, NOW
and MMDAs $418,339 8,352 2.67%
Time Deposits 223,785 6,965 4.16%
Short-Term Borrowings 6,918 198 3.83%
Long Term Debt 10,314 398 5.16%
-------- -------
Total Interest
Bearing Liabilities 659,356 15,913 3.23%
------- -----
Demand Deposits 95,839
Other Liabilities 8,654
Stockholders' Equity 72,818
--------
Total Liabilities and
Stockholders' Equity $836,667
========
Net Interest Income (Tax
Equivalent Basis) 29,825
Tax Equivalent Adjustment (884)
-------
Net Interest Income $28,941
=======
Net Interest Rate Spread 4.52%
=====
Net Interest Margin 5.05%
=====
28
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 duly authorized.
EVERGREEN BANCORP, INC.
November 9, 1995 /s/ George W. Dougan
--------------- --------------------
Date George W. Dougan
President & Chief Executive Officer
(Principal Executive Officer)
November 9, 1995 /s/ Frederick M. Fink
--------------- ---------------------
Date Frederick M. Fink, EVP &
Chief Financial Officer
29
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
<ARTICLE> 9
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 27,285
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 45,600
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 162,254
<INVESTMENTS-CARRYING> 34,870
<INVESTMENTS-MARKET> 36,034
<LOANS> 567,317
<ALLOWANCE> 11,997
<TOTAL-ASSETS> 860,265
<DEPOSITS> 747,861
<SHORT-TERM> 3,605
<LIABILITIES-OTHER> 9,894
<LONG-TERM> 17,755
<COMMON> 15,926
0
0
<OTHER-SE> 65,224
<TOTAL-LIABILITIES-AND-EQUITY> 860,265
<INTEREST-LOAN> 39,577
<INTEREST-INVEST> 9,414
<INTEREST-OTHER> 1,011
<INTEREST-TOTAL> 50,002
<INTEREST-DEPOSIT> 19,190
<INTEREST-EXPENSE> 20,240
<INTEREST-INCOME-NET> 29,762
<LOAN-LOSSES> 1,440
<SECURITIES-GAINS> (162)
<EXPENSE-OTHER> 24,966
<INCOME-PRETAX> 8,043
<INCOME-PRE-EXTRAORDINARY> 8,043
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,913
<EPS-PRIMARY> 1.25
<EPS-DILUTED> 1.25
<YIELD-ACTUAL> 514
<LOANS-NON> 3,991
<LOANS-PAST> 2,583
<LOANS-TROUBLED> 796
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 18,752
<CHARGE-OFFS> 9,200
<RECOVERIES> 1,005
<ALLOWANCE-CLOSE> 11,997
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 11,997
</TABLE>
