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 March 31, 1998
Commission File Number 0-10275
EVERGREEN BANCORP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-3114735
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
237 GLEN STREET, GLENS FALLS, NEW YORK 12801
(Address of principal executive offices)
Registrant's telephone number, including area code:
(518) 792-1151
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes [ x ] No [ ]
Indicate the number of shares outstanding of the Issuer's classes of common
stock, as of the latest practicable date:
Class of Common Stock Number of Shares Outstanding
as of April 30, 1998
$3.33 1/3 Par Value 8,765,963
INDEX
Page No.
PART I FINANCIAL INFORMATION
Item 1 Financial Statements (unaudited):
Consolidated Statements of Income for the Three
Months Ended March 31, 1998, and 1997 1
Consolidated Statements of Financial Condition
as of March 31, 1998, and December 31, 1997 2-3
Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 1998, and 1997 4-5
Notes to Consolidated Interim Financial Statements 6-7
Report of Independent Auditors 8
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operation 9-15
PART II OTHER INFORMATION
Item 1 Legal Proceedings - None
Item 2 Changes in Securities - None
Item 3 Defaults Upon Senior Securities - None
Item 4 Submission of Matters to a Vote of Security Holders - None
Item 5 Other Information - None
Item 6(a) Exhibits - The following exhibits are submitted herewith:
Exhibit 27 - Financial Data Schedule
Exhibit 99 - Press release dated April 17, 1998, regarding
the adoption of a Shareholder Rights Plan.
Item 6(b) Reports on Form 8-K - None
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS)
(EXCEPT PER SHARE DATA)
FOR THE THREE MONTHS
ENDED March 31,
1998 1997
(UNAUDITED)
Interest Income:
Interest and Fees on Loans $14,763 $14,598
Interest on Investment Secrurities 4,865 3,327
Interest on Federal Funds Sold & Bank Deposits 173 368
Total Interest Income 19,801 18,301
Interest Expense:
Interest on Deposits:
Regular Savings, Interest Checking and
Money Market Deposit Accounts 2,384 2,409
Other Time 6,189 5,069
Interest on Short-Term Borrowings 121 51
Interest on Long-Term Debt 409 931
Total Interest Expense 9,103 7,920
Net Interest Income 10,698 10,381
Provision for Loan Losses 495 360
Net Interest Income After Provision
for Loan Losses 10,203 10,021
Other Income:
Trust Department Income 740 657
Service Charges on Deposit Accounts 746 641
Other 400 408
Total Other Income 1,886 1,706
Other Expenses:
Salaries and Employee Benefits 4,070 4,043
Net Occupancy Expense 604 585
Equipment Expense 524 496
Professional Services 196 300
Data Processing 617 580
Supplies and Printing 213 212
Advertising 254 263
Postage 143 148
OREO Writedowns and Expenses, Net 85 51
Other 935 1,016
Total Other Expenses 7,641 7,694
Income Before Taxes 4,448 4,033
Applicable Income Taxes 1,472 1,351
Net Income $ 2,976 $ 2,682
Earnings Per Common Share:
Average Shares Outstanding 8,866 9,083
Basic Income Per Share $ .34 $ .30
Diluted Income Per Share $ .33 $ .29
See accompanying notes to consolidated interim financial statements.
1
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(DOLLARS IN THOUSANDS)
3/31/98 12/31/97
(UNAUDITED)
Assets
Cash and Cash Equivalents:
Cash and Due From Banks $ 29,104 $ 26,596
Federal Funds Sold 16,800 -
Total Cash and Cash Equivalents 45,904 26,596
Securities:
Securities Available For Sale (Amortized
cost of $271,851 and $246,567 at 3/31/98
and 12/31/97, respectively) 273,085 248,245
Securities Held to Maturity (Fair market
value of $27,859 and $35,586 at 3/31/98 and
12/31/97, respectively) 27,007 34,655
Loans:
Commercial 227,778 233,296
Mortgage 316,865 310,839
Installment 136,806 136,480
Other 114 263
Total Loans 681,563 680,878
Less:
Allowance for Loan Losses (13,039) (12,831)
Unearned Income on Loans (1,599) (1,839)
Loans, net 666,925 666,208
Bank Premises and Equipment 16,445 16,308
Other Real Estate Owned 667 1,067
Other Assets 18,274 17,082
Total Assets $1,048,307 $1,010,161
(Continued)
2
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(DOLLARS IN THOUSANDS)
Liabilities
Deposits:
Demand $ 93,089 $ 102,345
Regular Savings, Now Accounts and Money
Market Deposit Accounts 363,575 339,470
Certificates of Deposit over $100,000 133,925 110,189
Other Time 319,889 301,672
Total Deposits 910,478 853,676
Federal Funds Purchased and Other Short
Term Borrowings 9,053 27,208
Accrued Taxes and Other Liabilities 17,428 15,311
Long-Term Debt 25,465 25,710
Total Liabilities 962,424 921,905
Stockholders' Equity
Common Stock $3.33 1/3 Par Value: Shares Authorized
20,000,000, Shares Issued: 9,633,966 at March
31, 1998 and December 31, 1997 32,113 32,113
Surplus 6,787 6,787
Undivided Profits 60,758 59,225
Accumulated Other Comprehensive Income 555 1,007
Treasury Stock (868,003 shares at March 31, 1998
and 727,256 shares at December 31, 1997) (13,867) (10,236)
Common Stock Subscribed by ESOP (463) (640)
Total Stockholders' Equity 85,883 88,256
Total Liabilities and Stockholders' Equity $1,048,307 $1,010,161
See accompanying notes to consolidated interim financial statements.
3
CONSOLIDATED STATEMENTS OF CASH FLOW
(DOLLARS IN THOUSANDS)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 1997
(Unaudited)
Cash Flows from Operating Activities:
Net Income . . . . . . . . . . . . . . . . . . . . . . $ 2,976 $ 2,682
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Net Change in Unearned Loan Fees. . . . . . . . . . 24 17
Net Change in Other Assets and Other Liabilities. . 1,063 820
Increase in Deferred Tax Benefit. . . . . . . . . . (146) (254)
Gain on Sale of Loans, Securities and OREO. . . . . (25) -
Write-Down of Other Real Estate . . . . . . . . . . 50 -
Depreciation. . . . . . . . . . . . . . . . . . . . 468 445
Provision for Loan Losses . . . . . . . . . . . . . 495 360
Amortization of Premiums & Accretion of
Discounts on Securities, Net. . . . . . . . . . . 203 108
Net Cash Provided By Operating Activities. . . 5,108 4,178
Cash Flows From Investing Activities:
Proceeds From:
Sales of Securities Available for Sale . . . . . . . 12,431 -
Maturities of Securities Available for Sale. . . . . 30,985 10,913
Maturities of Securities Held to Maturity. . . . . . 7,635 595
Purchases of Securities Available for Sale . . . . . . (68,880) (24,675)
Purchases of Securities Held to Maturity . . . . . . . - (3,000)
Proceeds From Sales of Loans . . . . . . . . . . . . . 2,909 375
Change in Credit Card and Check Overdraft Receivables. 345 21
Proceeds From Sales of Other Real Estate . . . . . . . 341 -
Net Increase in Loans. . . . . . . . . . . . . . . . . (4,466) (4,526)
Capital Expenditures . . . . . . . . . . . . . . . . . (605) (785)
Net Cash Used By Investing Activities (19,305) (21,082)
Cash Flows From Financing Activities:
Net Increase in Deposits . . . . . . . . . . . . . . . 56,802 28,084
Net (Decrease)/Increase in Short-Term Borrowings . . . (18,155) 72
Payments on Long Term Debt . . . . . . . . . . . . . . (68) (160)
Proceeds from Sale of Treasury Shares. . . . . . . . . 316 228
Payments for Purchase of Treasury Shares . . . . . . . (4,054) (1,524)
Dividends Paid . . . . . . . . . . . . . . . . . . . . (1,336) (1,186)
Net Cash Provided By Financing Activities 33,505 25,514
Net Increase in Cash and Cash Equivalents. . . . . . . 19,308 8,610
Cash and Cash Equivalents at Beginning of Year . . . . 26,596 56,130
Cash and Cash Equivalents at End of Quarter. . . . . . $ 45,904 $ 64,740
(Continued)
(Continued)
4
CONSOLIDATED STATEMENTS OF CASH FLOW
(DOLLARS IN THOUSANDS)
Supplemental Disclosure of Cash Flows:
Interest Paid. . . . . . . . . . . . . . . . . . . . . $ 8,828 $ 7,719
Taxes Paid . . . . . . . . . . . . . . . . . . . . . . 853 21
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 $218,000 during the three months ended
March 31, 1997. No such transfers occurred during 1998.
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
$177,000 and $168,000 during the three months ended March 31, 1998 and 1997,
respectively.
As a result of the adoption of Statement of Financial Accounting Standards
No. 115, securities available for sale are recorded at fair value. The
unrealized gain on these securities was $1,234,000 at March 31, 1998. The
adjustment to Accumulated Other Comprehensive Income, for the unrealized loss
was $740,000, net of deferred income tax expense of $494,000.
At March 31, 1997, these securities had an unrealized loss of $955,000. The
adjustment to Accumulated Other Comprehensive Income, net of the deferred tax
benefit of $382,000, was $537,000.
See accompanying notes to consolidated interim financial statements.
5
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
1. Financial Statement Presentation
The accompanying consolidated financial statements consist of Evergreen
Bancorp, Inc. (the" Company") and the financial statements of its wholly owned
subsidiary, Evergreen Bank, N.A. The unaudited consolidated interim 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 March 31, 1998, the results of
operations for the three months ended March 31, 1998 and 1997 and cash flows
for the three months ended March 31, 1998 and 1997. All adjustments are of a
normal recurring nature. Certain information and footnote disclosures normally
included in financial statements prepared 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. 1997 Annual Report and Form 10-K.
2. Payment of Dividends.
The Registrant is a legal entity separate and distinct from its' bank
subsidiary. The principal source of cash flow of the Registrant, including
cash flow to pay dividends to its stockholders, is dividends from Evergreen
Bank, N.A. 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, N.A. the Company would not be able to pay
dividends to its stockholders.
3. Comprehensive Income
On January 1, 1998, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income.) This
statement establishes standards for reporting and display of comprehensive
income and its components. Comprehensive income includes the reported net
income of a company adjusted for items that are currently accounted for as
direct entries to equity such as the mark to market adjustment on securities
available for sale, foreign currency items and minimum pension liability
adjustments. At the Company, comprehensive income represents net income plus
other comprehensive income, which consists of the net change in unrealized
gains or losses on securities available for sale for the period and changes to
the minimum pension liability adjustments. Accumulated other comprehensive
income represents the net unrealized gains or losses on securities available
for sale and the net minimum pension liability adjustments as of the balance
sheet dates.
Comprehensive income for the three months ended March 31, 1998 and March 31,
1997 was $2,524,000 and $2,085,000, respectively.
6
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(Unaudited)
(Continued)
4. Earnings Per Share
The following table shows the reconciliation of basic to diluted earings per
share:
Computation of Net Income Per Common Share
(Dollars in Thousands, except Per Share Amounts)
Three Months Ended March 31,
1998 1997
Basic Earnings Per Share
Average Shares Outstanding 8,866,000 9,083,000
Net Income $ 2,976 $ 2,682
Basic Earnings Per Share $ .34 $ .30
Diluted Earnings Per Share
Average Shares Outstanding 8,866,000 9,083,000
Dilutive Effect of Stock Options 162,000 112,000
Average Potential Shares 9,028,000 9,195,000
Net Income $ 2,976 $ 2,682
Diluted Earnings Per Share $ .33 $ .29
7
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 March 31, 1998 and the related
consolidated statements of income for the three-month periods ended March 31,
1998 and 1997, and the consolidated statements of cash flows for the three-
month periods ended March 31, 1998 and 1997. 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 analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially 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 accounting 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, 1997, and the related
consolidated statements of income, changes in stockholders' equity, and cash
flows for the year then ended (not presented herein); and in our report dated
January 23, 1998, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying consolidated statement of financial condition as of December 31,
1997, is fairly presented, in all material respects, in relation to the
consolidated statement of financial condition from which it has been derived.
/s/ KPMG PEAT MARWICK LLP
Albany, New York
May 8, 1998
8
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. All discussions herein refer to the banking
activities of the Company's banking subsidiary unless otherwise noted.
When used in this quarterly Report on Form 10-Q, the words or phrases "will
likely result," "are expected to," "will continue," "is anticipated," "est-
imate," "project" or similar expressions are intended to identify "forward
- -looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements are subject to certain risks and
uncertainties including, changes in economic conditions in the Company's
market area, changes in policies by regulatory agencies, fluctuations in
interest rates, demand for loans in the Company's market area and competition,
that could cause actual results to differ materially from historical earnings
and those presently anticipated or projected. The Company cautions readers not
to place undue reliance on any such forward-looking statements, which speak
only as of the date made. The factors listed above could affect the Company's
financial performance and could cause the Company's actual results for future
periods to differ materially from any opinions or statements expressed with
respect to future periods in any current statements.
The Company does not undertake, and specifically disclaims, any obligation to
publicly release the result of any revisions which may be made to any forward-
looking statements to reflect events or circumstances after the date of such
events or to reflect the occurance of anticipated or unanticipated events.
SUMMARY OF RESULTS OF OPERATIONS
Net income for the quarter ended March 31, 1998, was $2,976,000 compared to
$2,682,000 for the same quarter last year. This represents an increase of
$294,000 or 11.0%. The primary reasons for the increase from the first quarter
of 1997 were an increase in net interest income of $317,000 and an increase in
other operating income of $180,000. These increases were partially offset by
an increase in the provision for loan losses of $135,000. As a result of the
changes noted, pretax income increased $415,000 or 10.3%. Diluted net income
per share for the quarter ended March 31, 1998, was $.33 compared to $.29 per
share for the March 31, 1997 quarter. This represents an increase of 13.8%.
The annualized return on average assets for the first quarter is 1.18%
compared to 1.17% for the first quarter last year. The annualized return on
average stockholders' equity for the first quarter of 1998 was 13.7% as
compared to 12.7% for the same period in 1997. The increase in the returns on
average assets and stockholders' equity are due primarily to the increased
level of net income.
NET INTEREST INCOME
Net interest income for the first quarter of 1998 was $10,698,000 compared to
$10,381,000 for the same period of 1997, an increase of $317,000. On a taxable
equivalent basis, net interest income was $10,840,000 for the quarter ended
March 31, 1998 compared to $10,497,000 for the quarter ended March 31, 1997.
9
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CONTINUED
This represents a increase of $343,000 or 3.3%. The increase in net interest
income on a taxable equivalent basis resulted primarily from an increase in
volume as the net interest margin declined by 34 basis points. Rates paid on
costing liabilities rose 16 basis points while rates received on earning
assets declined by 20 basis points. The increase in rates paid on costing
liabilities was a result of liabilty growth being concentrated in the higher
cost time deposit category. Average time deposits increased $68,706,000 or
18.6% due primarily promotions relating to branch openings during 1997. The
decrease in rates received on earning assets was primarily attributable to
a larger proportion of lower yielding investment securities. Average taxable
investment securities increased $88,513,000 or 46.2%
ALLOWANCE FOR LOAN LOSSES
The Company's allowance for loan losses at March 31, 1998, has increased
$208,000 to $13,039,000 from the December 31, 1997 level. As a percent of
total loans, net of unearned income, the allowance was approximately 1.9% at
March 31, 1998. The allowance represents approximately 229.8% of the nonper-
forming loans at quarter end. The provision for loan losses for the quarters
ended March 31, 1998 and 1997 was $495,000 and $360,000, respectively. The
increase in the provision is a reflection of continued loan growth and a
somewhat higher level of consumer installment loan charge-offs during recent
periods.
The allowance for loan losses represents amounts available for future credit
losses and reflects management's ongoing detailed review of certain individual
credits, as well as analysis of the historic net charge-off experience of the
portfolio, an evaluation of current and anticipated economic conditions, peer
group statistics and other pertinent factors.
Loans (or portions thereof) deemed uncollectible are charged against the
allowance, while recoveries of amounts previously charged off are added to the
allowance. Provisions for loan losses charged to earnings are added to the
allowance. Amounts are charged off once the probability of loss has been
determined, with consideration given to factors such as the customer's
financial condition, underlying collateral and guarantees, and general and
industry economic conditions.
The following table presents information concerning non-performing loans and
other real estate:
3/31/98 12/31/97
(Dollars In Thousands)
Non-Accrual $ 4,821 $ 4,838
Past Due 90 Days 854 951
Total Non-Performing
Loans $ 5,675 $ 5,789
Other Real Estate $ 667 $ 1,067
10
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CONTINUED
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.
OTHER INCOME AND EXPENSE
Other income for the three months ended March 31, 1998, was $1,886,000, comp-
ared to $1,706,000 for the same quarter last year, an increase of $180,000 or
10.6%. This increase was largely due to an increase in trust income of $83,000
to $740,000 and an increase in service fee income of $105,000 to $746,000.
Other expense for the three months ended March 31, 1998 was $7,641,000, comp-
ared to $7,694,000 for the first three months last year. This represents a
decrease of $53,000 or 0.7%. Salaries and benefits continue to represent the
largest portion of other expense, however the increase in this expense
category from prior year levels, was a nominal 0.7%. Occupancy expense rose
4.3% from prior year levels due to the ongoing branch expansion program. Late
in the first quarter the Company opened its' twenty-eigth banking office.
Other operating expenses declined $161,000 compared to the same quarter of the
prior year.
INCOME TAX EXPENSE
Income tax expense for the three months ended March 31, 1998, was $1,472,000
as compared to $1,351,000 for the three months ended March 31, 1997, an
increase of $121,000 or 9.0%. The effective income tax rate for the first
quarter of this year was 33.1% as compared to 33.5% for the same quarter last
year. This decrease in the effective income tax rate is attributed to timing
differances and somewhat higher levels of tax exempt income.
CAPITAL AND LIQUIDITY
At March 31, 1998, stockholders' equity was $85,883,000 as compared to
$88,256,000 at December 31, 1997, a decrease of $2,373,000 or 2.7%. The
decrease in stockholders' equity is primarily a result of the retention of
earnings of $1,640,000 and a reduction of the ESOP balance of $177,000 being
offset by net treasury share transactions of $3,738,000 and a decrease in the
valuation of securities available for sale, net of deferred tax benefit of
$452,000.
The following table sets forth the Company's risk based capital ratios as of
March 31, 1998 and the minimum regulatory guidelines:
Evergreen Well Capitalized
Risk-Based Bancorp, Inc. Regulatory
Ratios March 31, 1998 Guidelines
Leverage Ratio 8.1 % 5.0 %
Tier 1 13.1 % 6.0 %
Total Capital 14.4 % 10.0 %
11
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CONTINUED
Average federal funds sold for the three months ended March 31, 1998 was
$12,618,000 compared to $27,659,000 for the three months ended March 31, 1997.
Net cash provided by operating activities was $5,108,000 for the first quarter
of 1998 as compared to net cash provided of $4,178,000 for the three months
ended March 31, 1997. Net cash used by investing activities was $19,305,000
for the first quarter of 1998 as compared to net cash used of $21,082,000 for
the same period last year. Although the amounts provided are substantially the
same, investing activity has increased significantly due to increases in loan
and investment repayments resulting from lower interest rates. Net cash
provided by financing activities was $33,505,000 for the first quarter of 1998
as compared to $25,514,000 provided by financing activities for the first
quarter of 1997. The main source of cash provided by financing activities
continues to be from increases in deposits in the other time deposit category.
The level of cash and cash equivalents was $45,904,000 at March 31, 1998
compared to $64,740,000 at March 31, 1997.
Evergreen Bank, N.A. is the principal source of funds to the Company and, if
it can not pay dividends to the Company, the Company will be unable to pay
dividends to its shareholders.
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 analysis and the average balance of
these loans is deemed immaterial.
Portions of income earned on certain Commercial Loans, US Government Obliga-
tions and Obligations of State and Political Subdivisions are exempt from
Federal and/or State taxation. Appropriate adjustments have been made to
reflect the equivalent amount of taxable income that would have been necessary
to generate an equal amount of after tax income. The taxable equivalent
adjustment is based on a marginal Federal income tax rate of 35.0% and a
marginal State income tax rate of 9.0%.
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.
12
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
March 31, 1998 VS March 31, 1997
INCREASE / (DECREASE) TOTAL
DUE TO CHANGE IN INCREASE/
VOLUME RATE (DECREASE)
Interest Earned:
Loans
Taxable $ 370 $ (255) $ 115
Tax-Exempt 74 - 74
Investment Securities
Taxable 1,493) 11 1,504
Tax-Exempt 57 (29) 28
Federal Funds Sold &
Interest-Bearing Deposits (206) 11 (195)
Changes in Total Interest
Income 1,788 (262) 1,526
Less Interest Expense Incurred:
Regular Savings, NOW and MMDAs 52 (77) (25)
Time Deposits 965 155 1,120
Short-Term Borrowings 73 (3) 70
Long Term Debt (8) 26 18
Changes in Total Interest
Expense 1,082 101 1,183
Changes in Net Interest
Income $ 706 $ (363) $ 343
13
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CONTINUED
Average Balances For The Three Months Ended March 31, 1998
Interest Average
Average Income/ Yield/
Balance Expense Rate
Assets:
Loans
Taxable $660,436 $14,559 8.94%
Tax Exempt 15,606 288 7.48%
Securities
Taxable 280,036 4,724 6.84%
Tax Exempt 9,896 199 8.16%
Federal Funds Sold &
Interest Bearing Deposits 12,618 173 5.56%
Total Earning Assets 978,592 19,943 8.27%
Allowance for Loan
Losses (12,996)
Cash and Due from Banks 22,329
Other Non-Earning Assets 35,410
Total Assets $1,023,335
Liabilities and
Stockholders' Equity:
Regular Savings, NOW
and MMDAs $352,421 2,384 2.74%
Time Deposits 438,859 6,189 5.72%
Short-Term Borrowings 10,028 121 4.89%
Long Term Debt 25,491 409 6.51%
Total Interest
Bearing Liabilities 826,799 9,103 4.47%
Demand Deposits 92,853
Other Liabilities 16,903
Stockholders' Equity 86,780
Total Liabilities and
Stockholders' Equity $1,023,335
Net Interest Income (Tax
Equivalent Basis) 10,840
Tax Equivalent Adjustment (142)
Net Interest Income $ 10,698
Net Interest Rate Spread 3.80%
Net Interest Margin 4.49%
14
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CONTINUED
Average Balances For The Three Months Ended March 31, 1997
Interest Average
Average Income/ Yield/
Balance Expense Rate
Assets:
Loans
Taxable $643,780 $13,402 9.19%
Tax Exempt 11,598 307 8.06%
Securities
Taxable 191,523 3,157 6.58%
Tax Exempt 7,214 329 9.77%
Federal Funds Sold &
Interest Bearing Deposits 27,659 209 5.40%
Total Earning Assets 881,774 17,404 8.49%
Allowance for Loan
Losses (12,527)
Cash and Due from Banks 29,833
Other Non-Earning Assets 32,752
Total Assets $931,832
Liabilities and
Stockholders' Equity:
Regular Savings, NOW
and MMDAs $344,813 2,345 2.78%
Time Deposits 370,153 4,460 5.60%
Short-Term Borrowings 4,004 43 5.06%
Long Term Debt 25,985 418 7.22%
Total Interest
Bearing Liabilities 744,955 7,266 4.26%
Demand Deposits 88,759
Other Liabilities 12,608
Stockholders' Equity 85,510
Total Liabilities and
Stockholders' Equity $931,832
Net Interest Income (Tax
Equivalent Basis) 10,497
Tax Equivalent Adjustment (116)
Net Interest Income $ 10,381
Net Interest Rate Spread 4.16%
Net Interest Margin 4.83%
15
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.
May 8, 1998 /s/ George W. Dougan
Date George W. Dougan
President and Chief Executive Officer
(Principal Executive Officer)
May 8, 1998 /s/ George L. Fredette
Date George L. Fredette,
Senior Vice President, Chief
Financial Officer
(Principal Accounting Officer)
Exhibit 99 - Press Release
Evergreen Bancorp NEWS
For Immediate Release Contact: George W. Dougan
Chaiman and CEO
(518) 792-1151
EVERGREEN BANCORP, INC. ADOPTS SHAREHOLDER RIGHTS PLAN
Glens Falls, New York (April 17, 1998) - George W. Dougan, Chairman and Chief
Executive Officer of Evergreen Bancorp, Inc. today announced that its Board of
Directors has approved a Shareholder Rights Plan designed to discourage
takeovers that involve tactics that do not provide fair value to shareholders.
The plan is similar to plans adopted by many other publicly traded companies.
"We believe Evergreen has a strong banking franchise in its key markets and
that we have the people, products and support systems necessary to prosper as
an independent entity," Dougan stated. "Although the Bank has from time to
time held discussions with various parties about possible business combina-
tions, the Board of Directors has determined that the Share Rights Purchase
Plan is an effective and reasonable method to safeguard the interests of our
shareholders, employees and customers."
Details of the Plan will be set forth in filings with the Securities and
Exchange Commission
Evergreen bancorp, Inc. with headquarters in Glens Falls, New York, operates
28 banking offices in northeastern New York, including Albany, Clinton,
Columbia, Rensselaer, Saratoga, Schenectady, Warren, and Washington Counties.
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