<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1995
or
/ / Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ------ to -------
Commission File No. 0-10657
FIRST NATIONAL BANCORP
(Exact name of registrant as specified in its charter)
Georgia 58-1415138
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
303 Jesse Jewell Parkway, Suite 700 30501
Gainesville, Georgia (Zip Code)
(Address of principal executive offices)
(404) 503-2000
(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 twelve 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 of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at May 4, 1995
Common Stock, $1.00 Par Value 16,571,695 Shares
<PAGE>
FIRST NATIONAL BANCORP AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
Part I. Financial Information
Page Number
Item 1. Financial Statements (unaudited):
Consolidated Balance Sheets. . . . . . . . . . . . . . . . 3
Consolidated Statements of Income. . . . . . . . . . . . . 4
Consolidated Statements of Shareholders' Equity . . 5
Consolidated Statements of Cash Flows. . . . . . . . . . . 6
Notes to Consolidated Financial Statements. . . . . . . . . 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . . .8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K . . . . .. . . . . . . . 21
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
<PAGE>
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
March 31 December 31 March 31
1995 1994 1994
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 72,751 $ 84,260 $ 76,454
Federal funds sold 27,610 28,908 24,910
Cash and cash equivalents 100,361 113,168 101,364
Interest-bearing deposits in other financial institutions 14,763 16,259 53,915
Investment securities available-for-sale 571,551 549,432 465,375
Investment securities held-to-maturity (market value
$164,248, $156,044 and $155,786, respectively 157,636 157,567 148,325
Loans, net of unearned income 1,441,743 1,424,246 1,391,084
Allowance for loan losses (20,139) (20,441) (25,641)
Net loans 1,421,604 1,403,805 1,365,443
Premises and equipment, net 57,024 57,004 56,763
Other assets 77,627 83,313 83,913
Total assets $2,400,566 $2,380,548 $2,275,098
LIABILITIES
Deposits:
Noninterest-bearing demand deposits $ 295,178 $ 331,521 $ 299,349
Interest-bearing checking deposits 180,947 199,645 195,155
Money market deposits 80,299 87,818 97,683
Certificates of deposit less than $100 520,035 480,248 440,449
Certificates of deposit greater than $100 197,608 189,431 181,409
Other interest-bearing deposits 660,752 654,601 671,397
Total deposits 1,934,819 1,943,264 1,885,442
Federal funds purchased 35,686 44,485 23,112
Securities sold under agreements
to repurchase 71,483 54,217 28,871
Other short-term borrowings 4,611 6,427 11,867
Long-term debt 90,073 80,238 71,023
Other liabilities 23,754 24,960 31,417
Total liabilities 2,160,426 2,153,591 2,051,732
SHAREHOLDERS' EQUITY
Common stock, par value $1 per share authorized
30,000,000 shares; issued and outstanding 16,569,695
16,540,495 and 16,389,886 shares, respectively 16,570 16,540 16,390
Additional paid-in capital 67,960 67,606 65,135
Retained earnings 158,225 155,541 143,431
Net unrealized holding losses on securities
available-for-sale (2,615) (12,730) (1,590)
Total shareholders' equity 240,140 226,957 223,366
Total liabilities and shareholders' equity $2,400,566 $2,380,548 $2,275,098
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except share data)
(unaudited)
Three Months
Ended March 31
1995 1994
INTEREST INCOME
Loans (including fees) $ 33,439 $ 28,173
Interest-bearing deposits in other
financial institutions 227 628
Investment securities:
Tax-exempt 2,673 2,526
Taxable 8,865 5,827
Federal funds sold 428 299
Total interest income 45,632 37,453
INTEREST EXPENSE
Deposits, including interest expense on certificates
of deposit of $100 or more of $1,982 and 1,654,
respectively. 17,650 13,743
Federal funds purchased and securities
sold under agreements to repurchase 1,419 630
Other short-term borrowings 81 61
Long-term debt 1,146 798
Total interest expense 20,296 15,232
NET INTEREST INCOME 25,336 22,221
Provision for loan losses 479 366
Net interest income after provision for loan losses 24,857 21,855
NONINTEREST INCOME
Service charges on deposit accounts 2,709 2,274
Fees for trust services 546 542
Net gains on sale of investment securities 7 163
Other noninterest income 2,991 3,917
Total noninterest income 6,253 6,896
NONINTEREST EXPENSE
Salaries and employee benefits 12,478 10,746
Net occupancy 1,225 1,149
Furniture and equipment 1,389 1,398
Other noninterest expense 7,710 7,078
Total noninterest expense 22,802 20,371
Income before income taxes 8,308 8,380
Income tax expense 2,229 1,926
NET INCOME $ 6,079 $ 6,454
PER SHARE INFORMATION:
Weighted-average shares outstanding 16,555,816 16,190,429
Net income per share $ .37 $ .40
Dividends per share $ .205 $ .190
See accompanying notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(dollars in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Net
Unrealized
Holding Gains
(Losses) On
Additional Securities
Common Stock Paid-In Retained Available-
Shares Amount Capital Earnings For-Sale Total
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1994 16,034,183 $16,034 $58,762 $139,996 $ 3,267 $ 218,059
Net income --- --- --- 6,454 --- 6,454
Cash dividends declared -
$.190 per share --- --- --- (3,019) --- (3,019)
Proceeds from the excercised
of stock options by
pooled subsidiary 18,883 19 184 --- --- 203
Issuance of common shares
for bank acquisition 266,414 266 5,112 --- --- 5,378
Stock options exercised 48,827 49 654 --- --- 703
Issuance of common stock
for dividend reinvestment 21,579 22 423 --- --- 445
Unrealized losses on securities
available-for-sale, net of tax
effect of $(3,066) --- --- --- --- (4,857) (4,857)
Balance at March 31, 1994 16,389,886 $16,390 $65,135 $143,431 $ (1,590) $ 223,366
Balance at January 1, 1995 16,540,495 $16,540 $67,606 $155,541 $(12,730) $ 226,957
Net income --- --- --- 6,079 --- 6,079
Cash dividends declared -
$.205 per share --- --- --- (3,395) --- (3,395)
Stock options exercised 29,200 30 354 --- --- 384
Unrealized gains on securities
available-for-sale, net of tax
effect of $6,386 --- --- --- --- 10,115 10,115
Balance at March 31, 1995 16,569,695 $16,570 $67,960 $158,225 $ (2,615) $ 240,140
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands) (unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 6,079 $ 6,454
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 479 366
Provision for other real estate losses 314 29
Depreciation 1,356 1,365
Amortization, net (2,094) (2,361)
Deferred income tax benefit (396) (3,091)
Gains on sales of investment securities (7) (163)
Gains on sales of mortgage loan servicing rights --- (1,230)
Gains on sales of other assets (15) (3)
Gains on sales of assets acquired in
foreclosure and equipment (354) (197)
Excess servicing fees receivable resulting from
mortgage loan sales (97) (227)
(Increase) decrease in mortgage loans held-for-sale (2,460) 25,777
Other, net (1,673) 9,957
Net cash provided by operating activities 1,132 36,676
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales/calls of investment securities
held-to-maturity 1,507 1,162
Proceeds from principal collections on and maturities of
investment securities held-to-maturity 2,360 2,855
Purchases of investment securities held-to-maturity (3,014) (12,061)
Proceeds from sales of investment securities
available-for-sale 10,425 3,952
Proceeds from principal collections on and maturities of
investment securities available-for-sale 92,389 32,972
Purchases of investment securities available-for-sale (107,451) (89,707)
Net decrease in interest-bearing deposits in other
financial institutions 1,496 14,838
Net increase in loans (17,105) (20,098)
Proceeds from sale of mortgage loan servicing rights --- 1,729
Purchases of mortgage loan servicing rights --- (5,408)
Purchases of premises and equipment (1,663) (649)
Proceeds from sales of premises and equipment 272 106
Proceeds from sales of assets acquired in foreclosure 1,509 1,309
Net cash and cash equivalents acquired in the
purchase of bank subsidiary --- 24,563
Net cash used in investing activities (19,275) (44,437)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in deposits (8,445) (11,031)
Net increase (decrease) in short-term borrowings 6,651 (13,336)
Proceeds from the issuance of long-term debt 10,000 13,000
Payments on long-term debt (165) (165)
Proceeds from issuance of common stock for
stock options exercised 384 906
Cash dividends paid on common stock (3,089) (3,013)
Net cash provided by (used in) financing activities 5,336 (13,639)
Net decrease in cash and cash equivalents (12,807) (21,400)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 113,168 122,764
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 100,361 $ 101,364
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $ 20,636 $ 13,411
Income taxes paid $ 177 $ 1,565
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-
Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been
included. Operating results for the interim periods are not
necessarily indicative of the results that may be expected for the full
year or any other interim period. Certain reclassifications have been
made to amounts previously presented to conform with current period
presentations. Such reclassifications had no effect on net income.
For further information, refer to the consolidated financial statements
and footnotes thereto incorporated by reference in the Company's annual
report on Form 10-K for the year ended December 31, 1994.
2.BUSINESS COMBINATION
On November 22, 1994, the Company and FF Bancorp, Inc. ("FF Bancorp"),
New Smyrna Beach, Florida, entered into an Agreement and Plan of Merger
("Agreement") as amended January 23, 1995, whereby the Company will
acquire all of the outstanding stock of the approximately $600 million
asset FF Bancorp. FF Bancorp is the holding company of First Federal
Savings Bank of New Smyrna Beach, Florida, a $318 million asset thrift
institution, First Federal Savings Bank of Citrus County, Florida, a
$214 million asset thrift headquartered in Inverness, Florida, and Key
Bank of Florida, a $66 million asset commercial bank located in Tampa,
Florida. Under the Agreement, each share of FF Bancorp stock will be
exchanged for .825 shares of the Company stock in a tax-free exchange
to be accounted for as a pooling-of-interests. The acquisition is
subject to the approval of FF Bancorp shareholders and various
regulatory authorities. The Company anticipates completing the
transaction in the second quarter of 1995.
3. LOANS
In May 1993, the Financial Accounting Standards Board ("FASB") issued
FAS 114, "Accounting for Creditors for Impairment of a Loan."
Statement No. 114 requires impaired loans to be measured based on the
present value of expected future cash flows, discounted at the loan's
effective interest rate, or at the loan's observable market price, or
the fair value of the collateral if the loan is collateral dependent,
beginning in 1995. In October 1994, the FASB issued Statement No. 118,
"Accounting by Creditors for Impairment of a Loan-Income Recognition
and Disclosures," which amends the requirements of Statement No. 114
regarding interest income recognition and related disclosure
requirements.
On January 1, 1995, the Company adopted Statement No. 114 and Statement
No. 118. At March 31, 1995, pursuant to the definition within
Statement No. 114, the Company had approximately $16,145,000 of
impaired loans, all of which are classified as nonaccrual. A valuation
reserve in the amount of $435,000 has been established for
approximately $6,067,000 of these impaired loans.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion will cover results of operations, asset quality,
financial position and capital resources. The information included in
this discussion is intended to assist readers in their analysis of, and
should be read in conjunction with, the consolidated financial statements
presented elsewhere in this report, and the Company's annual report on
Form 10-K for the year ended December 31, 1994.
Table 1: SELECTED FINANCIAL DATA
(in thousands, except per share data)
<TABLE>
<CAPTION>
1995 1994 Change % Change
<S> <C> <C>
Quarter Ended March 31:
Net income $ 6,079 $ 6,454 $ (375) (5.8)
Net interest income 25,336 22,221 3,115 14.0
Net interest income (FTE) 26,940 23,743 3,197 13.5
Noninterest income 6,253 6,896 (643) (9.3)
Noninterest expenses 22,802 20,371 2,431 11.9
Provision for loan losses 479 366 113 30.9
Net income per share .37 .40 (.03) (7.5)
Dividends declared per share .205 .190 .015 7.9
Book value per share 14.49 13.63 .86 6.3
Tangible book value per share 12.97 12.10 .87 7.2
Weighted average shares outstanding 16,555,816 16,190,429
Shares outstanding at quarter-end 16,569,695 16,389,886
Financial Ratios:
Return on average assets 1.05 % 1.21 %
Return on average shareholders' equity 10.77 12.04
Net interest margin 5.05 4.81
Primary capital to adjusted assets:
Including intangibles 10.75 10.82
Excluding intangibles 10.42 10.43
Allowance for loan losses to loans, net of unearned income:
Including mortgage loans held for sale 1.40 1.84
Excluding mortgage loans held for sale 1.41 1.90
Selected Balances as of March 31:
Total assets 2,400,566 2,275,098 125,468 5.5%
Earning assets 2,213,303 2,083,609 129,694 6.2
Loans, net of unearned income:
Including mortgage loans held for sale 1,441,743 1,391,084 50,659 3.6
Excluding mortgage loans held for sale 1,425,764 1,351,500 74,264 5.5
Allowance for loan losses 20,139 25,641 (5,502) (21.5)
Securities 729,187 613,700 115,487 18.8
Deposits 1,934,819 1,885,442 49,377 2.6
Short-term borrowings 111,780 63,850 47,929 75.1
Long-term borrowings 90,073 71,023 19,050 26.8
Shareholders' equity 240,140 223,366 16,774 7.5
<PAGE>
PERFORMANCE OVERVIEW
In the first quarter of 1995, the Company reported net income of
$6,079,000, a decrease of $375,000, or 5.8%, from the $6,454,000 reported
in the first quarter of 1994. Earnings per share in the first quarter of
1995 were $.37, compared with $.40 reported for the first quarter of
1994, a decrease of 7.5%. Weighted average shares outstanding for the
first quarter of 1995 increased to 16,555,816, compared with 16,190,429
reported in the first quarter of 1994. A majority of the increase in
average shares outstanding is the result of shares issued in the
acquisition of Metro Bancorp, Inc. ("Metro") on February 28, 1994.
Net income in the first quarter produced a return on average assets of
1.05%, compared to the 1.21% reported for first quarter 1994. Return on
average equity was 10.77% for the three months ended March 31, 1995,
compared to 12.04% for the same period in 1994.
On April 11, 1995, Richard A. McNeece, chairman and chief executive
officer of the Company announced that he would leave the Company on June
30, 1995. Earnings for first quarter 1995 reflect the full recognition
of the compensation package and claims release agreement to be provided
to Mr. McNeece relative to his resignation. In addition, increases in
income and expenses, including personnel related expenses in the first
quarter of 1995 as compared to 1994, is due to the 1994 acquisition of
Metro acquired on February 28, 1994, which was accounted for under the
purchase method of accounting, thereby excluding the first two months of
Metro's operations in 1994.
The remainder of this discussion provides a more detailed explanation of
factors affecting the change in results of operations and the change in
financial position of the Company for the reported periods.
NET INTEREST INCOME
Net interest income is the most significant component of earnings. For
analytical purposes, interest earned on tax exempt assets, such as
industrial development revenue bonds and state and municipal obligations,
is adjusted to a fully-taxable equivalent (FTE) basis. This adjustment
is based upon the federal corporate income tax rate, and any interest
expense which is disallowed as a deduction in connection with carrying
tax exempt assets. Table 2 shows the sources of interest income and
expense between years and the variances resulting from fluctuations in
interest rate (rate) and changes in the amount (volume) of earning assets
and interest-bearing liabilities.
Net interest income on an FTE basis increased to $26,940,000 in the first
three months of 1995, compared with $23,743,000 in the first three months
of 1994, with both rate and volume increases impacting net interest
income equally. A majority of the increase impacting interest on loans
was the result of increases in interest rates from an average of 8.64%
during the first quarter of 1994, compared to 9.57% during the first
quarter of 1995. The most significant increase in interest expense
resulted from an average increase in time deposits rates of 87 basis
points, from 4.37% during the first quarter of 1994 to 5.24% in the first
quarter of 1995.
Average loans, which increased $95,344,000, and average investment
securities, which increased $120,164,000, comprised the majority of the
increase in average earning assets from the same period ended 1994, with
a majority of this increase resulting from the acquisition of Metro
during the first quarter of 1994.
The Company's net interest margin for the three months ended March 31,
1995, was 5.05% , up from 4.81% reported for the same period in 1994.
Increases in the prime rate during 1994 and early 1995, in response to
Federal Reserve's increase in interest rates, has contributed to overall
rate spread increases. However, management believes the industry will
begin to see increased margin pressure during the next few quarters, as
rates on deposit accounts and other funding sources catch up to previous
increases and loan rates stabilize or even decrease slightly. However,
management believes current margin levels will be sustainable during the
next few quarters, due to continued improvements in asset quality and
current loan pricing stratagies.
<PAGE>
Table 2: CHANGES IN NET INTEREST INCOME - TAXABLE EQUIVALENT BASIS
(dollars in thousands)
</TABLE>
<TABLE>
<CAPTION>
------ 1995-1994 -------
Average Balance Average Rates Interest Income
Three months ended Increase/ Three months ended Three months ended Expense Volume Rate
3/31/95 3/31/94 Decrease) 3/31/95 3/31/94 3/31/95 3/31/94 Variance Variance Variance
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans, net $1,417,002 $1,321,658 $95,344 9.57% 8.64% $33,439 $28,173 $5,266 $2,120 $3,146
Interest-bearing deposits in
other financial institutions 15,149 63,294 (48,145) 6.08% 4.02% 227 628 (401) (624) 223
financial institutions
Investment securities:
Tax-exempt 158,699 147,803 10,896 10.93% 11.11% 4,277 4,048 229 295 (66)
Taxable 542,098 432,830 109,268 6.63% 5.46% 8,865 5,827 3,038 1,642 1,396
Federal funds sold 29,474 35,363 (5,889) 5.89% 3.43% 428 299 129 (57) 186
Total earning assets 2,162,422 2,000,948 161,474 8.86% 7.90% 47,236 38,975 8,261 3,376 4,885
Reserve for loan loss (20,720) (22,980) 2,260
Cash and due from banks 68,288 65,362 2,926
from banks
Premises and equipment, net 57,242 51,903 5,339
Other assets 81,980 69,700 12,280
Total assets $2,349,212 $2,164,933 $184,279
Savings, IMMA deposits $ 615,033 $ 586,295 $ 28,738 3.04% 2.57% 4,614 3,719 895 189 706
Time deposits 1,008,980 931,130 77,850 5.24% 4.37% 13,036 10,024 3,012 888 2,124
Federal funds purchased and
securities sold under
agreements to repurchase 97,245 72,698 24,547 5.92% 3.51% 1,419 630 789 261 528
Other borrowed funds 93,397 74,018 19,379 5.33% 4.71% 1,227 859 368 245 123
Total interest-
bearing liabilities 1,814,655 1,664,141 150,514 4.54% 3.71% 20,296 15,232 5,064 1,583 3,481
Demand deposits 285,246 261,065 24,181
Other liabilities 20,470 22,348 (1,878)
Shareholders' equity 228,841 217,379 11,462
Total liabilities and
shareholders' equity $2,349,212 $2,164,933 $184,279
Rate spread 4.32% 4.19%
Net interest margin/revenue 5.05% 4.81% $26,940 $23,743 $3,197 $1,793 $1,404
</TABLE>
Changes in interest due to volume and rate were defined as follows:
Volume variance-change in average balance multiplied by prior year rate;
Rate variance-change
in rate multiplied by prior year average balance. The change in interest
due to both rate and volume has been allocated proportionately to volume
variance and rate variance based on the relationship of the absolute
dollar change in each.
NONINTEREST INCOME
Noninterest income decreased to $6,253,000 for the first quarter of 1995,
from $6,896,000 for the first quarter of 1994 . Revenues from service
charges on deposit accounts helped offset the lower income from mortgage
related activity, with an increase of $435,000 between the first quarter
of 1995. Mortgage loan and other related fees decreased $204,000, from
$1,405,000 recognized in the first quarter of 1994, to $1,201,000 earned
for the first quarter of 1995. The decrease in mortgage loan and other
related fees is primarily due to the decrease in the average servicing
portfolio levels and lower refinancing activity. Additional income was
recognized in the first quarter of 1994, due to the sale of refinancing
mortgages, which existed on the Company's books at December 31, 1993. No
sales occured during the first quarter of 1995, resulting in a significant
decrease in other noninterest income.
<PAGE>
The Company believes that while refinancing activity has declined,
mortgage loan originations may begin to increase, as mortgage loan rates
begin to stabilize or even decrease slightly. Refinancing by customers
during previous periods decreased the Company's loan servicing portfolio,
as loans held in the portfolio were being paid off. The Company
anticipates that additional servicing income may be obtained in later
periods through retail efforts by affiliate banks and through possible
acquisitions of servicing portfolios purchased from other financial
institutions and mortgage companies. The Company continues to analyze
opportunities available through the expansion of trust, credit card, and
annuity products, as a source for generating additional noninterest
income. Table 3 shows the key noninterest income categories and changes
for the three months ended March 31, 1995 and 1994:
Table 3: ANALYSIS OF NONINTEREST INCOME
(dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended Increase/(Decrease)
3/31/95 3/31/94 $ %
<S> <C> <C> <C> <C>
Service charges on deposit accounts $ 2,709 $2,274 435 19.13
Mortgage loan and other related fees 1,201 1,405 (204) (14.52)
Fees for trust services 546 542 4 .74
Credit card 402 374 28 7.49
Insurance premiums and commissions 305 306 (1) (.33)
Net gains on sales of investment securities 7 163 (156) (95.73)
Other noninterest income 1,083 1,832 (749) (40.85)
Total noninterest income $ 6,253 $6,896 (643) (9.32)
Noninterest income as a percentage of
average assets (annualized) 1.08% 1.29%
</TABLE>
NONINTEREST EXPENSE
Noninterest expense was $22,802,000 in the first quarter of 1995,
compared to $20,371,000 in the first quarter of 1994, an increase of
$2,431,000, or 11.93%. Personnel related expenses, which makes up the
largest category of noninterest expense, increased $1,732,000 between the
first quarter of 1995 and the first quarter of 1994. As described
elsewhere, part of the increase is the result of the first quarter 1994
acquisition of Metro, which is included for all three months of 1995, but
for only one month in 1994 and the compensation package and claims release
agreement provided to the chairman and chief executive officer relative
to the announcement of his resignation. The Company's efficiency ratio
(noninterest expense as a percentage of total FTE net interest income and
non interest income, excluding securities gains or losses) increased to
68.71% for the first quarter of 1995, compared to the 66.84% for the
first quarter of 1994. Table 4 shows the key noninterest expense
categories and changes for the three months ended March 31, 1995 and
1994:
Table 4: ANALYSIS OF NONINTEREST EXPENSE
(dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended Increase/(Decrease)
3/31/95 3/31/94 $ %
<S> <C> <C> <C> <C>
Salaries and employee benefits $12,478 $ 10,746 1,732 16.12
Furniture and equipment 1,389 1,398 (9) (0.57)
Postage, telephone and stationary 1,330 1,241 89 7.17
Net occupancy 1,225 1,149 76 6.53
FDIC insurance premiums 1,096 991 105 10.60
Data processing 736 590 146 24.75
Other noninterest expense 4,548 4,256 292 6.86
Total noninterest expense $22,802 $ 20,371 2,431 11.93
Noninterest expense as a percentage of
average assets 3.94% 3.82%
Overhead ratio 68.71% 66.84%
</TABLE>
<PAGE>
INCOME TAXES
Income tax expense was $2,229,000 for the first quarter of 1995, an
increase of 15.73% over the same period of 1994. The effective tax rate
for the first three months of 1995 increased slightly to 26.83%, from the
22.98% reported in 1994, due primarily to deferred tax benefits recorded
in the first quarter of 1994, which were not available in the first
quarter of 1995.
ASSET QUALITY
The most significant risk of loss in a financial institution is from its
loan portfolio. The Company manages its loan portfolio to limit risk
through initial review of credit applications, approval of loans by
experienced and trained personnel, loan documentation and compliance
procedures. The Company's loan portfolio is well diversified with no
excessive concentration in any one industry.
In accordance with regulatory standards, loans are placed in nonaccrual
status when they reach a prescribed delinquency stage, generally when
payments are 90 days past due or when other events occur which make the
collection of all principal and interest on the loan questionable.
Table 5 shows balances of nonperforming assets and other key asset
quality performance ratios.
Table 5: RISK ELEMENTS
(dollars in thousands)
3/31/95 12/31/94 9/30/94 6/30/94 3/31/94
Nonperforming loans:
Nonaccrual loans $16,087 $18,936 $20,666 $18,154 $22,240
Renegotiated loans 59 45 368 1,811 1,938
Total nonperforming loans 16,146 18,981 21,034 19,965 24,178
Other real estate 9,966 9,813 10,312 11,490 11,837
Total nonperforming assets $26,112 $28,794 $31,346 $31,455 $36,015
Loans past due 90 days or more $127 $214 $291 $215 $147
Nonperforming loans as a
percentage of loans, net of
unearned income (including
mortgage loans held-for-sale) 1.12% 1.33% 1.51% 1.44% 1.74%
Nonperforming assets as a
percentage of loans,
net of unearned income, plus
other real estate owned
(including mortgage loans
held-for-sale) 1.80 2.01 2.23 2.25 2.57
Allowance for loan losses as
a percentage of
nonperforming loans 124.73 107.69 107.72 122.28 106.10
Allowance for loan losses
as a percentage of
nonperforming assets
and loans past
due 90 days or more 76.75 70.47 71.62 77.09 70.94
The Company has had significant success in improving core asset quality
over the last five quarters.
While management continues to place emphasis on asset quality procedures
and training, the level of nonperforming loans and assets will also
continue to be largely dependent on the continuing economic recovery in
the markets the Company serves. Management anticipates a continuation of
a slowly improving economy, and due to continued problem asset
remediation, continued improvement in nonperforming loans, assets, and
applicable asset quality ratios.
<PAGE>
ALLOWANCE AND PROVISION FOR LOAN LOSSES
During the first quarter of 1995, the Company experienced a slight
reduction in loan loss reserves. This reduction was due to $781,000 in
net charge offs, offset by a $479,000 provision expense. Previous
provision recaptures and current levels of provision expense have been
warranted by the improvement in asset quality since 1993. Activity in
the allowance for loan losses, including the contribution from the
acquisition of Metro during the first quarter of 1994, is shown in Table
6.
Table 6: LOAN CHARGE-OFF ANALYSIS
(dollars in thousands)
For the
Quarter Ended 3/31/95 12/31/94 9/30/94 6/30/94 3/31/94
Average total
loans, net
of unearned
unearned $1,417,002 $1,411,880 $1,387,043 $1,381,007 $1,321,658
Allowance for loan
losses, beginning
of the quarter $20,441 $22,653 $24,409 $25,650 $21,530
Charge-offs 1,366 2,739 2,222 1,550 916
Recoveries on
loans charged-off 585 753 625 652 621
Net charge-offs 781 1,986 1,597 898 295
Provision for
loan losses 479 (226) (159) (343) 366
Allowance of
subsidiary
bank acquired --- --- --- --- 4,040
Allowance for loan
losses, end of
quarter $20,139 $20,441 $22,653 $24,409 $25,641
Allowance for loan
losses as a
percentage of
loans, net of
unearned income:
Including mortgage
loans held-
for-sale 1.40% 1.44% 1.62% 1.76% 1.84%
Excluding mortgage
loans held-
for-sale 1.41 1.45 1.64 1.78 1.90
Net loans charged off
as a percentage
of average loans,
net of unearned
income (annualized):
Including mortgage
loans held-
for-sale .22 .56 .46 .26 .09
Excluding mortgage
loans held-
for-sale .22 .57 .46 .26 .09
<PAGE>
Table 7 presents the Company's consolidated loan and asset quality
concentrations as of March 31, 1995:
TABLE 7: LOAN AND ASSET QUALITY CONCENTRATIONS
(dollars in thousands)
<TABLE>
<CAPTION>
Percent Other Loans 90
of Real Days or more
Collateral Type Outstanding Loans Nonaccrual Renegotiated Estate Past Due
<S> <C> <C> <C> <C> <C> <C>
Commercial mortgages:
Retail business $60,126 4.17% $ 1,379 $ --- $ 332 $ ---
Broiler operations 35,270 2.45 691 --- --- ---
Egg operations 18,315 1.27 418 --- 185 ---
Farmland 22,069 1.53 267 --- --- ---
Multi-family residential 26,541 1.84 608 --- 1,184 ---
Office buildings 34,119 2.37 216 --- 1,411 ---
Manufacturing/industrial 27,291 1.89 93 --- 72 ---
Hotel/motel 29,524 2.05 --- --- --- ---
Recreational properties 13,134 .91 936 --- 94 ---
Shopping centers 18,808 1.30 254 --- 751 ---
Other commercial 94,523 6.56 2,114 --- 1,523 ---
Other 29,177 2.02 167 --- 653 ---
408,897 28.36 7,143 --- 6,205 ---
Acquisition and land development:
Residential 37,824 2.62 5 --- 382 ---
Commercial 4,640 .32 --- --- 203 ---
Construction 111,407 7.73 123 --- 67 ---
153,871 10.67 128 --- 652 ---
Residential mortgages
Real estate dwelling 232,625 16.13 4,493 43 875 7
Mortgage loans held-for-sale 15,979 1.11 --- --- --- ---
Residential lots 45,894 3.18 395 --- 670 ---
Mobile homes 33,476 2.32 936 16 51 9
Rental 36,446 2.53 702 --- 1,513 ---
Interval ownership 4,981 .35 --- --- --- ---
Mortgage loan investments 39,774 2.76 501 --- --- ---
Home equity 30,035 2.08 44 --- --- ---
Other 5,749 .40 --- --- --- ---
444,959 30.86 7,071 59 3,109 16
Commercial products:
Assignment A/R and contrats 19,743 1.37 --- --- --- ---
Inventory 8,147 .57 217 --- --- ---
Assignment of notes 6,065 .42 99 --- --- ---
Automobiles - heavy trucks 4,510 .31 71 --- --- ---
Floor plans 1,701 .12 --- --- --- ---
Other 23,587 1.64 233 --- --- ---
63,753 4.43 620 --- --- ---
Consumer goods:
Automobiles 227,928 15.81 847 --- --- 63
Unsecured 36,439 2.53 182 --- --- 12
Savings and certificates 33,968 2.36 6 --- --- ---
Credit cards 20,094 1.39 --- --- --- 36
Mobile homes
without real estate 6,920 .48 62 --- --- ---
Unsecured consumer lines
of credit 4,380 .30 7 --- --- ---
Co-maker/guarantor 5,671 .39 15 --- --- ---
Other 34,863 2.42 6 --- --- ---
370,263 25.68 1,125 --- --- 111
Total concentrations $1,441,743 100.00% $16,087 $59 $9,966 $127
</TABLE>
<PAGE>
Table 8 provides a summary of average balances for the quarters ended
March 31, 1995, December 31, 1994, and March 31, 1994, along with
interest earned and paid during each quarter and average rates by
category:
Table 8: QUARTERLY AVERAGES, MIX, INTEREST AND RATES
(dollars in thousands)
<TABLE>
<CAPTION>
For the three months ended
3/31/95 12/31/94 3/31/94
Average Average Average
Balance Interest Rate Balance Interest Rate Balance Interest Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Net loans $1,417,002 $33,439 9.57% $1,411,880 $32,440 9.12% $1,321,658 $28,173 8.64%
Interest-bearing deposits
in other financial institutions 15,149 227 6.08 21,214 289 5.40 63,294 628 4.02
Investment securities, taxable 542,098 8,865 6.63 530,328 8,014 6.00 432,830 5,827 5.46
Investment securities, non-taxable 158,699 4,277 10.93 150,036 4,130 10.92 147,803 4,048 11.11
Federal funds sold 29,474 428 5.89 43,201 285 2.62 35,363 299 3.43
Total earning assets 2,162,422 47,236 8.86 2,156,659 45,158 8.31 2,000,948 38,975 7.90
Other assets 81,980 84,408 69,700
Cash and due from banks 68,288 73,670 65,362
Premises and equipment, net 57,242 56,587 51,903
Less allowance for loan losses (20,720) (22,613) (22,980)
Total assets $2,349,212 $2,348,711 $2,164,933
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities:
Savings and IMMA accounts $ 615,033 4,614 3.04 $ 627,285 4,507 2.85 $ 586,295 3,719 2.57
Time deposits 1,008,980 13,036 5.24 963,397 11,827 4.87 931,130 10,024 4.37
Federal funds purchased
and securities sold under
agreements to repurchase 97,245 1,419 5.92 81,901 830 4.02 72,698 630 3.51
Other borrowed funds 93,397 1,227 5.33 87,337 1,114 5.06 74,018 859 4.71
Total interest-
bearing liabilities 1,814,655 20,296 4.54 1,759,920 18,278 4.12 1,664,141 15,232 3.71
Noninterest-bearing
demand deposits 285,246 337,567 261,065
Other liabilities 20,470 22,876 22,348
Total liabilities 2,120,371 2,120,363 1,947,554
Total shareholders' equity 228,841 228,348 217,379
Total liabilities and
shareholders' equity $2,349,212 $2,348,711 $2,164,933
Net interest income $26,940 $26,880 $23,743
Interest spread 4.32% 4.19% 4.19%
Net interest margin 5.05% 4.94% 4.81%
</TABLE>
<PAGE>
EARNING ASSETS AND FUNDING SOURCES
Management classifies earning assets into two categories, core and
incremental. Core earning assets are defined as loans relative to the
business of banking, while incremental earning assets are all other
earning assets, including mortgage loans held-for-sale, investments, and
interest-bearing deposits with other financial institutions. Table 9
provides the Company's allocation between these categories and the change
between these categories for the periods presented.
Table 9: ANALYSIS OF PERIOD END BALANCE SHEET CHANGES
(dollars in thousands)
<TABLE>
<CAPTION>
Change 3/31/95 Change 3/31/95
from 12/31/94 from 3/31/94
3/31/95 12/31/94 3/31/94 $ % $ %
<S> <C> <C> <C> <C> <C> <C> <C>
Earning Assets:
Core earning assets:
Commercial loans $ 688,907 $ 682,541 $ 672,060 6,366 .9 16,847 2.5
Retail loans 692,076 664,321 650,464 27,755 4.2 41,612 6.4
Other core loans 44,781 63,865 28,976 (19,084) (29.9) 15,805 54.5
Total core earning assets 1,425,764 1,410,727 1,351,500 15,037 1.1 74,264 5.5
Incremental earning assets:
First mortgage loans held-for-sale 15,979 13,519 39,584 2,460 18.2 (23,605) (59.6)
Investment securities 729,187 706,999 613,700 22,187 3.1 115,487 18.8
Interest-bearing deposits with
financial institutions 14,763 16,259 53,915 (1,496) (9.2)(39,152) (72.6)
Federal funds sold
and repurchase agreements 27,610 28,908 24,910 (1,298) (4.5) 2,700 10.8
Total incremental earning assets 787,539 765,685 732,109 21,853 2.9 55,430 7.6
Total earning assets $2,213,303 $2,176,412 $2,083,609 36,890 1.7 129,694 6.2
Deposits and Funds:
Core funds:
Demand deposits $ 295,178 $ 331,521 $ 299,349 (36,343) (11.0) (4,171) (1.4)
Interest-bearing checking 180,947 199,645 195,155 (18,698) (9.4)(14,208) (7.3)
Century Service and IMMA 298,914 315,859 318,800 (16,945) (5.4)(19,886) (6.2)
Statement savings 111,269 115,148 125,984 (3,879) (3.4)(14,715) (11.7)
Certificates less than
$100,000 and IRAs 670,626 628,162 590,453 42,464 6.8 80,173 13.6
Total core funds 1,556,934 1,590,335 1,529,741 (33,401) (2.1) 27,193 1.8
Incremental funds:
Certificates over $100 197,608 189,431 181,409 8,177 4.3 16,199 8.9
Other large deposits 180,277 163,498 174,292 16,779 10.3 5,985 3.4
Federal funds purchased 35,686 44,485 23,112 (8,799) (19.8) 12,574 54.4
Repurchase agreements 71,483 54,217 28,871 17,266 31.8 42,612 147.6
Other short-term borrowings 4,611 6,427 11,867 (1,816) (28.3) (7,256) (61.1
Long-term debt 90,073 80,238 71,023 9,835 12.3 19,050 26.8
Total incremental funds 579,738 538,296 490,574 41,442 7.7 89,164 18.2
Total funds $2,136,672 $2,128,631 $2,020,315 8,041 .4 116,357 5.8
</TABLE>
Total earning assets at March 31, 1995, were $2,213,303,000, up 1.7% from
the $2,176,412,000 at December 31, 1994, and up 6.2% from the
$2,083,609,000 at March 31, 1994. Total core earning assets increased
1.1% to $1,425,764,000 over the $1,410,727,000 reported at December 31,
1994, while incremental earning assets increased 2.9% to $787,539,000,
from
<PAGE>
$765,685,000 reported for the quarter ended December 31, 1994, and
increased 7.6% over incremental earning assets at March 31, 1994. The
decrease in mortgage loans held-for-sale between March 31, 1995 and March
31, 1994 can be attributed to lower loan production and decreasing
refinancing activity, which are the result of recent increases in
mortgage loan rates and slower housing starts.
Similar to earning assets, management classifies funding sources into
core and incremental categories. Core funding sources are primarily
deposits held, including demand deposits, but excluding certificates of
deposit greater than $100,000. Incremental funds are defined as all
other funding sources, including federal funds purchased and other
borrowings.
Total funds at March 31, 1995, were $2,136,672,000, up .4% from the
$2,128,631,000 at December 31, 1994, and up 5.8% from the $2,020,315,000
at March 31, 1994. Total core funds decreased to $1,556,934,000 at March
31, 1995 from the $1,590,335,000 reported at December 31, 1994, but
increased 1.8% from the $1,529,741,000 reported at March 31, 1994, as
customers shifted out of lower earning deposit accounts into higher
yielding deposit accounts. Total incremental funds increased 7.7%, or
$41,442,000, to $579,738,000 at March 31, 1995, from the $538,296,000
reported at December 31, 1994. Incremental funds increased $89,164,000,
or 18.2% between March 31, 1994 and March 31, 1995, with the largest
increase the result of increases in short-term borrowings such as federal
funds purchased and securities sold under agreements to repurchase.
While there may be continued changes within categories, management
expects no material changes in the overall mix of core or incremental
assets or liabilities during the second quarter of 1995.
<PAGE>
SECURITIES
Federal funds sold, interest-bearing deposits with financial
institutions, and short-term U.S. Treasury and federal agency securities
are held primarily for liquidity purposes while mortgage-backed
securities are held for income purposes. The mortgage-backed security
distribution between adjustable and fixed rate securities is determined
by interest rate sensitivity requirements. Management anticipates no
material change in the portfolio distribution in the second quarter based
on the current interest rate environment. The amortized cost and fair
value of securities at March 31, 1995, are summarized in Table 10.
Table 10: SECURITIES - AMORTIZED COST AND FAIR VALUE
(in thousands)
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Investment securities
available-for-sale:
U.S. Treasury and
U.S. Government Agencies $209,738 $ 431 $ 1,318 $208,841
Mortgage-backed securities 356,272 3,565 7,038 352,799
State and municipal - taxable 884 85 0 969
Other investments 9,036 22 117 8,941
Total investment securities
available-for-sale $575,920 $4,103 $8,473 $571,550
Investment securities
held-to-maturity:
State an municipal - tax exempt $157,636 $7,738 $1,126 $164,248
</TABLE>
Table 11 presents the current distribution of total investments by
expected maturity and average yields (for all investment securities on a
FTE basis assuming a 35% tax rate) at March 31, 1995. Expected
maturities may differ from contractual maturities due to call and
prepayment options.
Table 11: EXPECTED MATURITY OF INVESTMENTS (SECURITIES AND OTHER FUNDS)
(dollars in thousands)
<TABLE>
<CAPTION>
After 1 But After 5 But
Within 1 Year Within 5 Years Within 10 Years After 10 Years
Amount Yield Amount Yield Amount Yield Amount Yield
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment securities
available-for-sale:
U. S. Treasury $14,568 5.48% $ 5,565 6.31% $ 1,052 8.24%
U. S. Government agencies 94,249 6.07 75,179 6.77 18,228 6.73
Mortgage-backed securities:
Fixed rate --- --- 8,588 7.48 21,440 7.05 $ 85,160 7.20%
Adjustable rate --- --- 110 5.39 155 5.42 237,345 6.30
Corporate bonds --- --- 522 8.84 --- --- --- ---
State and municipal 102 8.49 481 8.08 387 7.80 --- ---
Equity investments --- --- --- --- --- --- 8,420 7.02
Total investment securities
available-for-sale 108,919 5.99 90,445 6.78 41,262 6.87 330,925 6.55
State and municipal
held-to-maturity 14,007 11.45 46,160 12.26 11,575 9.40 85,894 8.64
Federal funds sold 27,610 6.25 --- --- --- --- --- ---
Interest-bearing deposits with
other financial institutions 14,763 6.36 --- --- --- --- --- ---
Total investments securities $165,299 6.53% $136,605 8.64% $52,837 7.42% $416,819 6.98 %
</TABLE>
<PAGE>
INTEREST RATE SENSITIVITY MANAGEMENT
Interest rate sensitivity is defined as the exposure to variability in
net interest income resulting from changes in market-based interest
rates. It is the Company's philosophy to protect net interest income
against unexpected changes in interest rates though a controlled
assumption of interest rate risk for profit. This potential variability
is closely monitored by the Company's traditional and beta adjusted gap
positions. Since all interest rates and yields do not adjust in the same
degree, the traditional and beta adjusted gap analysis is only a general
indicator of rate sensitivity and net interest income volatility.
Consequently, the Company relies heavily on simulation analysis and
modeling of the Company's balance sheet in varying interest rate
environments to gauge net income volatility and develop appropriate
balance sheet strategies to assure attainment of the Company's objective:
The Company's interest rate sensitivity at March 31, 1995, is as follows:
TABLE 12: INTEREST RATE SENSITIVITY
(dollars in thousands)
At March 31, 1995
0-3 4-12 1-5 Over 5
Months Months Years Years
Investment securities-taxable $ 137,940 $ 220,229 $ 150,453 $ 77,270
Investment securities-nontaxable 915 13,134 56,895 86,667
Loans, net of unearned income 587,516 232,114 558,810 44,058
Other 27,670 --- --- ---
Interest sensitive assets $ 754,041 $ 465,477 $ 766,158 $ 207,995
IMMA and savings deposits $ 410,284 $ --- $ --- $ ---
Other deposits 390,817 508,524 326,757 1,378
Other borrowings 109,360 34,569 40,000 10,000
Interest sensitive liabilities $ 910,461 $ 543,093 $ 366,757 $ 11,378
Interest sensitive gap $(156,420) $ (77,616) $ 399,401 $ 196,617
Cumulative interest
sensitive gap $(156,420) $(234,036) $ 165,365 $ 361,982
Cumulative interest sensitivity
gap as a percentage of
interest sensitive assets (7.13)% (10.67)% 7.54% 16.50%
Management is of the opinion that the current rate sensitivity profile
meets the Company's objectives. No material changes in the interest rate
sensitivity profile are anticipated during 1995.
LIQUIDITY
The Company measures and manages the consolidated liquidity position
based on core funding and incremental funding objectives. It is the
Company's target policy for core funding to equal at least 100% of core
earning assets, with the minimum acceptable level being 90%. For the
quarter ended March 31, 1995, the average core funding to average core
assets ratio equaled 109.83% down from the 113.04% reported for the
quarter ended December 31, 1994, and from the 111.85% reported at March
31, 1994. These percentages are well above the Company's minimum
tolerance. Management anticipates that the core funding ratio will
remain above the 100% mark during the remainder of the year.
It is also the Company's target policy for incremental funds to total
deposits and funds not to exceed 40%. For the quarter ended March 31,
1995, this ratio, based on quarterly averages, equaled 26.37%, up from
the 24.76% reported for the quarter ended December 31, 1994, and the
25.88% reported for the quarter ended March 31, 1994. These ratios are
all well below the Company's maximum tolerance. Through its lead
affiliate bank, the Company maintains upstream overnight federal funds
lines of credit of $70,000,000. These lines are occasionally used to
fund peak balances in mortgage loans held-for-sale. In June 1992, the
parent Company secured a revolving line of credit totaling $3,000,000.
Management knows of no demands, commitments or events that will result
in, or that are likely to result in, the Company's liquidity increasing
or decreasing in any material way.
<PAGE>
CAPITAL RESOURCES AND ADEQUACY
It is the Company's risk management policy to maintain a capital base
sufficient to support anticipated asset growth, merger activity and
management's estimation of long-term earnings risk. Capital standards
assume that the Company's risk profiles in liquidity, rate sensitivity
and asset quality are in line with internal risk management objectives.
The Company's risk-based capital position is well in excess of minimum
regulatory standards. Consequently, management anticipates no change in
asset allocation strategies to complement risk-based capital
requirements. Additionally, the Company's leverage capital position is
well in excess of the new regulatory requirements. The Company's
standards and capital levels at March 31, 1995, are provided in Table 13.
Management anticipates that risk-based and leverage ratios will remain
well above minimum regulatory standards. The Company has met all of its
capital requirements through retained earnings while steadily increasing
regulatory and internally defined capital ratio objectives.
Table 13: ANALYSIS OF CAPITAL ADEQUACY
(dollars in thousands)
Regulatory Internal
3/31/95 Guidelines Standards
Risk-based capital ratios:
Tier 1 capital to
risk-adjusted assets 14.67% 4.00% 9.00% (minimum)
Tier 2 capital to
risk-adjusted assets 1.25 4.00 2.00 (maximun)
Total capital to
risk-adjusted assets 15.92% 8.00 9.00 (minimum)
Leverage ratios:
Capital to assets 10.11% 6.50% (minimum)
Primary capital to
adjusted assets (a) 10.86 5.50% 8.00 (minimum)
Primary tangible capital
to adjusted assets (b) 10.53 6.00 (minimum)
Risk-based capital:
Tier 1 capital $ 233,760
Tier 2 capital 19,915
Total capital $ 253,675
Risk-adjusted assets $1,593,183
(a) Shareholders' equity (excluding investment securities valuation)
plus allowance for loan losses divided by total assets, plus allowance
for loan losses.
(b) Shareholders' equity (excluding investment securities valuation)
plus allowance for loan losses, less goodwill divided by total assets,
plus allowance for loan losses,
less goodwill.
Table 14 summarizes the Company's internal capital generation and the
factors that influence it.
Table 14: INTERNAL CAPITAL GENERATION RATE
For the Quarter Ended
3/31/95 12/31/94 3/31/94
Return on average assets 1.05% 1.21% 1.21%
divided by
Average equity as a % of average assets 9.74 9.73 10.05
equals
Return on average equity 10.78 12.43 12.04
times
Earnings retained 49.63 53.81 52.38
equals
Internal capital growth 5.35 6.69 6.31
Between the quarters ended March 31, 1995 and 1994, the internal growth
rate decreased due to the decrease in all categories which make up the
internal growth rate calculation.
The cash dividend declared for the first quarter of 1995 was $.205
compared to $.20 declared for the quarter ended December 31, 1994 and
$.19 for the first quarter of 1994. Management is of the opinion that,
given the Company's dividend policy, asset growth can be funded
internally while maintaining the integrity of the Company's capital
positions.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Number Description of Exhibits
10.1 Change of Control Agreement, dated April 21, 1995, between
First National Bancorp and J. Reid Moore
10.2 Contract, dated April 10, 1995, between Richard A. McNeece
and First National Bancorp (incorporated by reference to
such document filed as exhibit 10 to Amendment No. 1
(filed April 18, 1995) to the Company's Registration
Statement No. 33-57681 on Form S-4).
11.1 Statement RE Computation of Per Share Earnings
27.1 Financial Data Schedule
(b) Dated and filed on April 11, 1995, a Form 8-K was filed pursuant to
the announcement by the Company of the
resignation of Richard A. McNeece, chairman and chief executive
officer of the Company, effective June 30, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FIRST NATIONAL BANCORP
Dated: May 5, 1995
By: /s/ Peter D. Miller
Peter D. Miller
President, Chief Administrative,
and Chief Financial Officer
By: /s/ J. Reid Moore
J. Reid Moore
Group Vice President and Controller
Exhibit 10.10
CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT, made as of the 21ST day of April, 1995, by
and between FIRST NATIONAL BANCORP (hereinafter referred to as
"Company") and J. REID MOORE (hereinafter referred to as
"Employee"), establishes a severance arrangement between the
parties in the event of a change of control of Company.
WITNESSETH:
WHEREAS, Employee is serving as Group Vice President and
Controller of First National Bancorp; and
WHEREAS, Company desires to induce Employee to continue to
serve as Group Vice President and Controller by providing
Employee a measure of security; and
WHEREAS, Company wants to continue to have the benefits of
Employee's full time and attention to the affairs of First
National Bancorp without diversion due to concerns about a
possible change of control;
NOW, THEREFORE, in consideration of ONE DOLLAR and other
good and valuable consideration, receipt of which is hereby
acknowledged, Company and Employee agree as follows:
1. Payment of Severance Amount. If the Employee's
employment by the Company or any subsidiary or successor of the
Company shall be subject to an Involuntary Termination within the
Covered Period, then the Company shall pay to the Employee an
amount equal to the Severance Amount, payable within 15 days
after the Termination Date. In addition, Employee will
immediately be entitled to payment of the Severance Amount and
the other benefits hereunder if, following a Change of Control,
any successor to Company refuses to acknowledge and accept the
obligations of Company hereunder either directly or by operation
of law. If for any reason or no reason, the Company takes the
position that some or all of the benefits provided hereunder are
not due and owing to Employee or that it will not pay Employee
any or all of the benefits provided hereunder, Employee may, at
his discretion, submit the resolution of such dispute to
arbitration as provided in Paragraph 5 below by notifying Company
in writing of his intent to do so.
2. Definitions. All the terms defined in this Paragraph 2
shall have the meanings given below throughout this Agreement.
(a) An "Affiliate" shall mean any entity which owns or
controls, is owned by or is under common ownership or control
with, the Company.
(b) "Base Annual Salary" shall, as determined on the
Termination Date, be equal to the greater of:
i. the Employee's annual salary excluding bonuses and
special incentive payments on the date of the earliest
Change of Control to occur during the Covered Period; or
ii. the Employee's annual salary excluding bonuses and
special incentive payments on the Termination Date.
(c) "Change in Duties" shall mean any one or more of the
following:
i. a significant change in the nature or scope of the
Employee's authorities or duties from those applicable to
him immediately prior to the date on which a Change of
Control occurs;
ii. a reduction in the Employee's Base Annual Salary from
that provided to him immediately prior to the date on which
a Change of Control occurs;
iii. any diminution in the Employee's eligibility to
participate or level of participation in bonus,
<PAGE>
stock
option, incentive award and other compensation plans which
provide opportunities to receive compensation, from the
greater of:
-the opportunities provided by the Company (including
its subsidiaries) for executives with comparable
duties; or
-the opportunities under any such plans under which he
was participating immediately prior to the date on
which a Change of Control occurs;
iv. a diminution in employee benefits (including but not
limited to medical, dental, life insurance and long-term
disability plans) and perquisites applicable to Employee,
from the greater of:
-the employee benefits and perquisites provided by the
Company (including its subsidiaries) to executives with
comparable duties; or
-the employee benefits and perquisites to which he was
entitled immediately prior to the date on which a
Change in Control occurs;
v. a change in the location of the Employee's principal
place of employment by the Company (including its
subsidiaries) by more than 50 miles from the location where
he was principally employed immediately prior to the date on
which a Change of Control occurs to which Employee has not
agreed;
vi. any reduction in the Employee's title with Company;
vii. if Employee, because of any change in
circumstances resulting from a Change of Control, is
adversely affected with respect to his ability to exercise
the authorities, powers, functions or duties attached to his
position immediately prior to the date on which a Change of
Control occurs.
(d) A "Change of Control" shall be deemed to have occurred
if:
i. any "person," including a "group" as determined in
accordance with Section 13(d)(3) of the Securities Exchange
Act of 1934 (the "Exchange Act")(other than the Company, any
subsidiary of the Company, or any employee benefit plan, as
defined in ERISA, or any of the foregoing) is or becomes the
beneficial owner, directly or indirectly, of securities of
the Company representing 25% or more of the combined voting
power of the Company's then outstanding securities;
ii. as a result of, or in connection with, any tender offer
or exchange offer, merger or other business combination,
sale of assets or contested election, or any combination of
the foregoing transactions (a "Transaction"), the persons
who were directors of the Company before the Transaction
shall cease to constitute a majority of the Board of
Directors of the Company or any successor to the Company;
iii. the Company is merged or consolidated with another
corporation and as a result of the merger or consolidation
less than 75% of the outstanding voting securities of the
surviving or resulting corporation shall then be owned in
the aggregate by the former shareholders of the Company,
other than (x) affiliates within the meaning of the Exchange
Act or (y) any party to the merger or consolidation;
iv. a tender offer or exchange offer is made and
consummated for the ownership of securities of the Company
representing 50% or more of the combined voting power of the
Company's then outstanding voting securities; or
v. the Company transfers substantially all of its assets
to another corporation which is not a wholly-owned
subsidiary of Company.
<PAGE>
(e) "Covered Period" for the Employee shall mean two years
following the occurrence of any Change of Control, including
a Change of Control following another/other Change(s) of Control.
(f) "Involuntary Termination" shall mean any termination
which:
i. does not result from a resignation by the Employee
(other than a resignation pursuant to clause ii of this
subparagraph (f)); or
ii. results from a resignation following any Change in
Duties; provided, however, the term "Involuntary
Termination" shall not include:
x. a Termination for Cause, or
y. any termination as a result of death, disability,
or normal retirement pursuant to a retirement plan to
which the Employee was subject prior to any Change in
Control.
(g) "Severance Amount" is equal to one hundred percent
(100%) of the Employee's Base Annual Salary, plus an amount
equal to the average of the annual amounts Employee was
awarded during the preceding three years under the Company's
Senior Management Incentive Compensation Plan.
(h) "Termination for Cause" shall mean only a termination
as a result of fraud, gross negligence, gross dereliction of
duties, misappropriation of or intentional material damage to the
property or business of the Company (including its subsidiaries),
or a commission of a felony by the Employee. In the event that
the Company takes the position that there is a Termination for
Cause, the Company shall so notify the Employee in writing at the
Termination Date and Employee may, at his discretion, submit the
determination of such matter to arbitration by notification to
Company that he elects his rights pursuant to Paragraph 5 below
within thirty (30) days after the receipt of such notification.
(i) "Voting Securities" shall mean any securities which
ordinarily possess the power to vote in the election of directors
without the happening of any pre-condition or contingency.
3. Other Employee Benefits. If the Employee's employment
by the Company or any subsidiary or successor of the Company
shall be subject to an Involuntary Termination within the Covered
Period, then the following provisions shall also apply:
(a) Medical, Dental, Life Insurance and Long-Term
Disability Benefits. To the extent that the Employee or any of
the Employee's dependents may be covered under the terms of any
medical, dental, life insurance or long-term disability plans of
the Company (or any subsidiary) for active employees immediately
prior to the termination, the Company will provide the Employee
and those dependents with equivalent coverages for twenty-four
(24) months from the termination. The coverages may be procured
directly by the Company (or any subsidiary, if appropriate) apart
from, and outside of the terms of the plans themselves; provided
that the Employee and the Employee's dependents comply with all
of the conditions of the medical, dental, life insurance or long-
term disability plans. In consideration for these benefits, the
Employee must make contributions equal to those required from
time to time from active employees of Company (or its
subsidiaries) for equivalent coverages under the medical, dental,
life insurance, or long-term disability plans. Company shall not
be entitled to amend or modify the benefits for Employee or any
of his dependents or any of the terms or conditions thereof
without the prior written consent of Employee. The foregoing
health benefits are not intended to be a substitute for any
benefits required under COBRA. Notwithstanding the foregoing,
Employee's rights to the foregoing benefits shall terminate as to
any benefit for which he becomes entitled to substantially
similar benefits on substantially similar terms, without
limitations or exclusions for pre-existing conditions or similar
limitations, through a program of a subsequent employer.
<PAGE>
(b) Profit-Sharing Plans. An amount equal to the amount of
the Employee's account balance which is not vested under any
profit-sharing plans (including, without limitation, plans with
401k arrangements) maintained by Company immediately prior to the
termination of Employee shall be paid by Company to Employee
within 15 days after the Termination Date. Such amount shall be
repaid by Employee to Company, without interest, in the event
that the profit-sharing plan(s) is/are terminated and Employee
receives distribution of his fully vested account from a
terminated plan. In addition, at each of the two consecutive plan
year ends the first of which coincides with or next follows the
Termination Date, Company shall pay to Employee (within 15 days
after the end of the plan year) the amounts which Employee would
have been allocated under the profit-sharing plans from
contributions (including, without limitation, matching
contributions under any 401(k) plan or arrangement) made by the
Company for such plan years had Employee not been terminated, had
he continued to earn the Base Annual Salary, and had he elected
to make employee deferrals to any 401(k) plan at the level such
deferrals were made by Employee immediately prior to his
termination. In addition, if the Employee has, or should have,
an Excess Benefit Account under the First National Bancorp Excess
Benefits Plan (the "Excess Plan") or similar account under any
other deferred compensation plan which is designed to supplement
the Company's 401(k) plan, the entire account, including any
nonvested portion, shall be paid by Company to Employee within 15
days after the Termination Date. If, at the two consecutive plan
year ends of the Excess Plan (or other deferred compensation
plan, as applicable) the first of which coincides with or next
follows the Termination Date, Employee's Excess Benefit Account,
or similar account under any other deferred compensation plan,
would have been credited with amounts (based on Employee's Base
Salary Amount and employee deferrals to any 401(k) and other
deferred compensation plans at the level such deferrals were made
by Employee immediately prior to his termination) if Employee had
not been terminated, then Company shall pay to Employee said
amounts within 15 days after the end of each respective plan
year. The Excess Plan shall be deemed amended to reflect the
above provisions as applicable to Employee and the provisions
shall also apply to any deferred compensation plan which is
subsequently adopted by Company under which Employee
participates.
(c) Stock Plans. Employee shall receive full vesting and
all restrictions against Employee shall lapse with respect to and
under any stock plans maintained by Company immediately prior to
the Termination Date. Employee shall have six months following
the Termination Date in which to exercise the rights granted
below. The six-month exercise period shall apply notwithstanding
any shorter exercise period which may be provided for under the
stock option agreement in the case of Employee's termination of
employment. To the extent that the provision set forth in the
previous sentence conflicts with Employee's stock option
agreement, the stock option agreement is deemed amended and the
provision in the previous sentence shall control. Provided,
however, the exercise period shall in no event be extended beyond
the date on which the option would expire under the stock option
agreement if Employee had not been terminated. During the six-
month period (or shorter period if the options would expire
within such shorter period under the stock option agreement if
Employee had not been terminated) following the Termination Date,
the Employee shall be entitled to elect one (but not more than
one) of the following alternatives:
(1) To exercise any stock options not exercised prior to
the Termination Date;
(2) To make a written demand for payment by Company of an
amount equal to the difference between the value of the stock
which is subject to the options and the exercise price for the
stock subject to said options. For this purpose, the "value" of
the stock subject to the options shall be the greatest of (i) the
fair market value of the stock on the date Employee demands
payment hereunder, or (ii) the highest fair market value of the
stock on the date any Change of Control occurred, or (iii) the
highest consideration (whether in cash or in kind) paid in
connection with any Change of Control event to any shareholder of
Company for such shareholder's shares of stock in Company by the
"person" or "group," as determined in accordance with Section
13(d)(3) of the Exchange Act, which attained control pursuant to
said Change of Control event. Company shall make payment of the
appropriate amount, as determined above, within 15 days after
Employee makes the written demand.
(e) Miscellaneous Benefits. Employee may continue using
any Company-owned automobile and any Company-provided country
club privileges through the end of the month in which the
Termination Date occurs.
<PAGE>
(f) Other Employee Benefits. The benefits hereunder shall
not be affected by or reduced because of any other benefits
(including, but not limited to, a severance pay plan which is
independent of a Change of Control) to which Employee may be
entitled by reason of his continuing employment with Company or
the termination of his employment with Company, and no other such
benefit by reason of such employment shall be affected or reduced
because of the benefits bestowed by this Agreement; provided,
however, that the foregoing will not be interpreted to require
duplicative medical benefits.
4. Golden Parachute Payment. It is the intention of the
parties that the Severance Amount payments and other payments
under this Agreement are reasonable compensation for Employee's
service to Company and its subsidiaries and shall not constitute
"excess parachute payments" within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended, and any
regulations thereunder. If the independent accountants acting as
auditors for the Company on the date of a Change of Control (or
another accounting firm designated by them) determine that the
Severance Amount payments or other payments under this Agreement
constitute "excess parachute payments" (without taking into
account any amounts in excess of 299 percent (299%) of the "base
amount," as defined in Section 280G(b)(3) which might otherwise
be "reasonable compensation" within the meaning of Section
280G(b)(4)), then the payments under this Agreement shall, in
lieu of the payments otherwise due, be increased to the sum of
(a) the base amount, as defined in Section 280G(b)(3), plus (b)
an amount equal to the quotient of (i) the "excess parachute
payment," as defined in Section 280G(b), divided by (ii) one (1)
minus the rate of tax (expressed as a decimal) imposed under Code
Section 4999. The purpose of the preceding sentence is that
payments hereunder are "grossed up" so that Employee will receive
all amounts due under this Agreement without diminution by reason
of taxes imposed under Section 4999.
5. Arbitration and Litigation.
(a) Arbitration is not required of Employee to resolve any
dispute with Company hereunder, but is merely an alternative to
resolve the dispute available to Employee if he elects to use it.
Company shall have no right to avail itself of arbitration unless
Employee agrees to arbitration. All arbitrations pursuant to
this Agreement shall be determined in accordance with the rules
of the American Arbitration Association then in effect, by a
single arbitrator if the parties shall agree upon one, or by
three arbitrators, one appointed by each party, and a third
arbitrator appointed by the two arbitrators selected by the
parties, all arbitrators from a panel proposed by the American
Arbitration Association. If any party shall fail to appoint an
arbitrator within thirty (30) days after it is notified to do so,
then the arbitration shall be accomplished by a single
arbitrator. Unless otherwise agreed by the parties hereto, all
arbitration proceedings shall be held in Gainesville, Georgia.
Each party agrees to comply with any award rendered in such
proceeding. The decision of the arbitrator(s) shall be tendered
within sixty (60) days after final submission of the parties in
writing or any hearing before the arbitrators and shall include
their individual votes. If Employee is entitled to any award
pursuant to the determination reached in the arbitration
proceeding, he shall be entitled to payment by Company of all
attorney's fees, costs and other out-of-pocket expenses incurred
in connection with the arbitration.
(b) In the event that any dispute hereunder is resolved
through litigation, and Employee's position in such litigation is
sustained to any extent by the court, then Company agrees that it
shall pay all of Employee's attorney's fees, court costs and
other out-of-pocket expenses relating to the litigation.
6. Notices. Notices and all other communications under
this Agreement shall be in writing and shall be deemed given when
personally delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Company to:
First National Bancorp
P.O. Drawer 937
Gainesville, Georgia 30503
<PAGE>
Attention: Secretary of First National Bancorp, or its
successor, with copies to the President of First National
Bancorp, or its successor and the President of The First National
Bank of Gainesville, or its successor.
If to the Employee to: J. Reid Moore
or to such other address as either party may furnish to the other
in writing, except that notice of changes of address shall be
effective only upon receipt.
7. Applicable Law. This contract is entered into under,
and shall be governed for all purposes by, the laws of the State
of Georgia.
8. Severability. If a court of competent jurisdiction
determines that any provision of this Agreement is invalid or
unenforceable, then the invalidity or unenforceability of that
provision shall not affect the validity or enforceability of any
other provision of this Agreement and all other provisions shall
remain in full force and effect.
9. Withholding of Taxes; Set-Off. Company may withhold
from any benefits payable under this Agreement all federal,
state, city or other taxes as may be required pursuant to any
law, governmental regulation or ruling. The right of Employee to
receive benefits under this Agreement, however, shall be absolute
and shall not be subject to any set-off, counterclaim,
recoupment, defense, duty to mitigate, or other rights Company
may have against him or anyone else.
10. Not An Employment Agreement; Subsequent Employment.
Nothing in this Agreement shall give the Employee any rights (or
impose any obligations) to continued employment by the Company or
any subsidiary or successor of the Company, nor shall it give the
Company any rights (or impose any obligations) for the continued
performance of duties by the Employee for the Company or any
subsidiary or successor of the Company. Employee's right to
receive benefits under this Agreement shall not be reduced by
Employee's employment with any other employer after terminating
employment with the Company. Any compensation for services
rendered or consulting fees earned after the date of termination
shall not diminish Employee's right to receive all amounts due
hereunder.
11. No Assignment. The Employee's right to receive
payments or benefits under this Agreement shall not be assignable
or transferable, whether by pledge, creation of a security
interest or otherwise, other than a transfer by will or by the
laws of descent and distribution. In the event of any attempted
assignment or transfer contrary to this paragraph the Company
shall have no liability to pay any amount so attempted to be
assigned or transferred. This Agreement will inure to the
benefit of and be enforceable by the Employee's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
12. Successors. This Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns
(including, without limitation, any company into or with which
the Company may merge or consolidate). The Company agrees that
it will not effect the sale or other disposition of all or
substantially all of its assets unless either (i) the person or
entity acquiring the assets or a substantial portion of the
assets shall expressly assume by an instrument in writing all
duties and obligations of the Company under this Agreement or
(ii) the company shall provide, through the establishment of a
separate reserve for the payment in full of all amounts which are
or may reasonably be expected to become payable to the Employee
under this Agreement.
13. Employee's Indemnity. Employee shall be entitled to
the indemnity provided to officers of Company immediately prior
to the Change of Control. Any changes to Company's bylaws or
otherwise which reduce any indemnity granted to officers shall
not affect the rights granted hereunder. Company shall not
reduce any of Employee's indemnity benefits without the prior
written consent of Employee. Any references to Georgia law
<PAGE>
in the bylaws of Company or other documents granting indemnity to
Employee shall be deemed to be references as of the date of this
Agreement, and any amendments to Georgia law, including a
revocation thereof, shall not reduce the indemnity benefits
granted hereunder.
14. Costs of Enforcement; Interest. Subject to the
provisions of Paragraph 5 above, in the event the Employee
collects any part of the Severance Amount or other benefits
hereunder or otherwise enforces the terms of this Agreement
through a lawyer or lawyers, Company will pay all costs of such
collection or enforcement, including reasonable legal fees
incurred by the Employee. In addition, Company shall pay to
Employee interest on all or any part of the Severance Amount or
other benefits hereunder that is not paid when due at a rate
equal to the Prime Rate as announced by The First National Bank
of Gainesville or its successors from time to time.
15. Term. This Agreement shall be effective as of the date
first above written and shall remain in effect for a period of
three years. Notwithstanding anything herein to the contrary, in
the event of a Change of Control during the initial, or any
subsequent, term of this Agreement, this Agreement shall remain
in effect until the later of (a) the end of the term of the
Agreement or (b) the day after the last day in the Covered
Period. This Agreement, unless terminated as provided below,
shall be automatically renewed to add an additional year after
each year expires, so that the term is always three years,
without further action by the Employee or the Company. This
Agreement can be terminated only by either party giving the other
notice on or before June 30 of the year of termination. If the
agreement is terminated under the preceding sentence, the term
shall continue for two years after the end of the year in which
the notice of termination was given. If notice of termination is
given after June 30 of a year, then the term of the Agreement
shall continue for three years after the end of the year in which
the notice of termination was given.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed and delivered as of the day and year first above
written.
FIRST NATIONAL BANCORP
By: /s/ Peter D. Miller
Its: President
/s/ J. Reid Moore
J. REID MOORE
EXHIBIT 11.1
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(dollars in thousands, except for per share data)
Three Months Ended
March 31 March 31
1995 1994
EARNINGS PER SHARE
Weighted average shares outstanding 16,555,816 16,190,429
Net income per share $.37 $.40
PRIMARY EARNINGS PER SHARE
Weighted average shares outstanding 16,555,816 16,190,429
Dilutive stock options 125,197 88,570
16,681,013 16,278,999
Net income per share $.36 $.40
FULLY DILUTED EARNINGS PER SHARE
Weighted average shares outstanding 16,555,816 16,190,429
Dilutive stock options 139,877 88,570
16,695,693 16,278,999
Net income per share $.36 $.40
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
REGISTRANT'S MARCH 31, 1995 QUARTERLY REPORT, AS FILED ON FORM 10-Q
WITH THE SECURITIES AND EXCHANGE COMMISSION, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 72751
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<INVESTMENTS-HELD-FOR-SALE> 571551
<INVESTMENTS-CARRYING> 157636
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<ALLOWANCE> 20139
<TOTAL-ASSETS> 2400566
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<LONG-TERM> 90073
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0
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