<PAGE> 1
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 JUNE 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-6136
CORUS BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-0823592
(State of incorporation of organization) (I.R.S. Employer Identification No.)
3959 N. Lincoln Ave., Chicago, Illinois 60613
(Address of principal executive offices) (Zip Code)
(312) 549-7100
(Registrant's telephone number)
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 and
(2) has been subject to such filing requirements for the past 90 days.
Yes __X__ No ____
As of July 31, 1996, the Registrant had 14,825,242 common shares, $0.05 par
value, outstanding.
<PAGE> 2
Corus Bankshares, Inc.
Index to Quarterly Report on Form 10-Q
June 30, 1996
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION. PAGE
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Statements of Condition (unaudited) -
June 30, 1996, December 31, 1995 and June 30, 1995. 1
Condensed Consolidated Statements of Income (unaudited) -
Three and Six Months Ended June 30, 1996 and 1995. 2
Condensed Consolidated Statements of Cash Flows (unaudited) -
Six Months Ended June 30, 1996 and 1995. 3
Notes to Condensed Consolidated Financial Statements (unaudited) 4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 5
PART II - OTHER INFORMATION.
Item 4. Submission of Matters to a Vote of Security Holders. 10
Item 6. Exhibits and Reports on Form 8-K. 10
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
CORUS BANKSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION
(Unaudited)
<TABLE>
<CAPTION>
(thousands) June 30 December 31 June 30
Assets 1996 1995 1995
---------- ------------ ----------
<S> <C> <C> <C>
Cash and due from banks - noninterest bearing $ 100,249 $ 104,805 $ 73,088
Federal funds sold 2,470 3,170 1,170
Interest-bearing deposits with banks -- 25,000 25,000
Securities:
Available for sale, at market value 417,855 364,404 476,656
Held to maturity, at amortized cost 13,828 14,567 16,302
---------- ------------ ----------
Total Securities 431,683 378,971 492,958
Loans, net of unearned discount 1,624,158 1,558,782 1,330,141
Less: Allowance for possible loan losses 32,035 25,640 21,513
---------- ------------ ----------
Net Loans 1,592,123 1,533,142 1,308,628
Premises and equipment, net 26,926 26,794 26,890
Accrued interest receivable and other assets 41,285 40,907 36,577
Goodwill, net of accumulated amortization 13,690 12,303 13,478
---------- ------------ ----------
Total Assets $2,208,426 $ 2,125,092 $1,977,789
========== ============ ==========
Liabilities & Shareholders' Equity
Deposits:
Noninterest-bearing $ 209,264 $ 209,881 $ 179,793
Interest-bearing 1,691,124 1,688,659 1,549,421
---------- ------------ ----------
Total Deposits 1,900,388 1,898,540 1,729,214
Short-term borrowings 22,091 1,828 37,835
Federal Home Loan Bank advances 40,000 -- --
Accrued interest payable and other liabilities 36,851 28,071 28,960
---------- ------------ ----------
Total Liabilities 1,999,330 1,928,439 1,796,009
Minority Interest -- 1,927 1,998
Shareholders' Equity
Common stock, Surplus & Retained Earnings 201,912 188,342 176,299
Net unrealized gains on available for sale
securities 7,184 6,384 3,483
---------- ------------ ----------
Total Shareholders' Equity 209,096 194,726 179,782
---------- ------------ ----------
Total Liabilities and Shareholders' Equity $2,208,426 $ 2,125,092 $1,977,789
========== ============ ==========
</TABLE>
See accompanying notes.
1
<PAGE> 4
CORUS BANKSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------------ ----------------------
(thousands, except per share data) 1996 1995 1996 1995
-------- -------- --------- -------
<S> <C> <C> <C> <C>
Interest Income $48,074 $43,701 $97,295 $81,732
Interest Expense 19,917 20,365 39,895 37,601
------- -------- -------- -------
Net Interest Income 28,157 23,336 57,400 44,131
Provision for Possible Loan Losses 4,000 1,479 8,000 1,479
------- -------- -------- -------
Net Interest Income after Provision
for Possible Loan Losses 24,157 21,857 49,400 42,652
Noninterest Income:
Service charges on deposit accounts 2,508 2,448 4,903 4,798
Trust services 93 109 214 213
Gain on dispositions of loans 1,704 797 2,749 1,110
Other income 335 804 730 2,225
Trading account gains (losses), net - (78) - 297
Securities and other financial
instruments gains (losses), net 199 326 1,619 (1,088)
------- -------- -------- -------
Total noninterest income 4,839 4,406 10,215 7,555
Noninterest Expense:
Salaries and employee benefits 6,707 6,008 13,514 11,808
Net occupancy 964 964 1,965 1,970
Data processing 571 547 1,206 1,064
FDIC deposit insurance 3 898 7 1,797
Goodwill amortization 698 571 1,361 1,070
Other expenses 3,600 3,917 7,365 7,506
------- -------- -------- -------
Total noninterest expense 12,543 12,905 25,418 25,215
------- -------- -------- -------
Income before income taxes 16,453 13,358 34,197 24,992
Income tax expense 5,811 4,760 12,070 8,829
------- -------- -------- -------
Net Income $10,642 $ 8,598 $22,127 $16,163
======= ======== ======== =======
Net Income per Common Share $ 0.71 $ 0.56 $ 1.47 $ 1.06
======= ======== ======== =======
Cash Dividends Declared Per Common Share $ 0.125 $ 0.088 $ 0.225 $ 0.145
======= ======== ======== =======
Weighted Average Common and Common
Equivalent Shares Outstanding 14,992 15,296 15,002 15,292
======= ======== ======== =======
</TABLE>
See accompanying notes.
2
<PAGE> 5
' CORUS BANKSHARES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30
--------------------------
(thousands) 1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 22,127 $ 16,163
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for possible loan losses 8,000 1,479
Depreciation and amortization 1,064 926
Accretion of investment and loan discounts (9,140) (5,319)
Amortization of goodwill 1,361 1,070
Gain on dispositions of loans (2,749) (1,110)
Decrease in trading account securities - 74,729
Gain on trading account securities - (297)
(Gain) loss on sales of securities and other financial instruments (1,619) 1,088
Decrease in accrued interest receivable and other assets (378) (372)
Increase in accrued interest payable, other liabilities and
minority interest 8,760 1,799
----------- ---------
Net cash provided by operating activities 27,426 90,156
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of securities held to maturity 739 2,952
Proceeds from maturities of available for sale securities 94,805 13,041
Proceeds from sales of available for sale securities 1,491,040 797,070
Purchases of available for sale securities (1,636,432) (867,610)
Maturities of interest-bearing deposits with banks 25,000 -
Purchases of loans (2,191) (3,481)
Net increase in loans (54,246) (219,845)
Purchases of premises and equipment, net (1,196) (548)
Purchases of minority interest of and additional consideration
for bank subsidiaries (4,103) (42)
----------- ---------
Net cash used in investing activities (86,584) (278,463)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in deposit accounts 1,848 30,716
Increase in short-term borrowings 20,263 27,670
Proceeds from Federal Home Loan Bank advances 40,000 -
Issuance of common shares under the stock option plan 9 -
Retirements of common shares (5,233) (200)
Cash dividends paid on common shares (2,985) (2,286)
----------- ---------
Net cash provided by financing activities 53,902 55,900
----------- ---------
Net increase (decrease) in cash and cash equivalents (5,256) (132,407)
Cash and cash equivalents at December 31, 1995 and 1994 107,975 206,665
----------- ---------
Cash and cash equivalents at June 30, 1996 and 1995 $ 102,719 $ 74,258
=========== =========
</TABLE>
See accompanying notes.
3
<PAGE> 6
CORUS BANKSHARES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Condensed Consolidated Financial Statements
The Condensed Consolidated Statements of Condition, Income and Cash
Flows are unaudited. The interim financial statements reflect all
adjustments (consisting only of normal recurring accruals) which are, in the
opinion of management, necessary for a fair statement of the results for the
interim periods presented. The condensed consolidated financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto included in Corus Bankshares, Inc.'s (formerly known as River
Forest Bancorp, Inc.) consolidated financial statements for the three years
ended December 31, 1995 included in Bankshares' Annual Report and Form 10-K
for the year ended December 31, 1995. The results of operations for the
interim period should not be considered indicative of results to be expected
for the full year.
Net income per common share is computed by dividing net income by the
weighted average number of common shares and common share equivalents
(dilutive stock options) outstanding during the respective periods.
Certain reclassifications have been made in the 1995 financial statements to
conform to current accounting classifications.
2. Goodwill
In the second quarter of 1996, an additional $754,000 of goodwill was
recorded for the 1993 acquisition of Belmont National Bank. The additional
goodwill was the result of the settlement of contingencies related to the
purchase. The original purchase price was contingent upon the performance
of certain specified loans and assets during the post-acquisition period.
The additional goodwill is being amortized over the remaining term of the
original goodwill period of 15 years.
In addition, goodwill was recorded during the first and second quarter
of 1996 of $922,000 and $968,000, respectively, related to the purchase of
the minority interest ownership interests in two of the subsidiary banks.
At June 30, 1996, there was no minority ownership interest in any of the
subsidiary banks.
3. Student Loan Investigation
As disclosed in previous SEC filings, Bankshares discovered that
certain former employees in the student loan servicing area had falsified
some records of telephone calls from late 1993 to April 1994 to students
whose loans were delinquent. The telephone calls are a required action to
maintain the enforceability of a student loan's government guarantee.
Bankshares terminated the employees involved and informed the U.S.
Department of Education immediately upon discovery of the problem and the
Department commenced an investigation.
Bankshares believes that the Department's investigation has been
expanded to include a review of whether Bankshares' student loan division
has engaged in improper practices since 1988, including whether information
contained on guarantee claim forms may have been falsified. If there have
been improper practices, Bankshares could lose its government guarantees
with respect to certain student loans and Bankshares or individual employees
could be subject to substantial penalties.
Bankshares does not condone or permit such improper practices and is
cooperating fully with the investigation. Bankshares is actively working to
implement procedures designed to minimize the likelihood that such practices
can occur in the future.
At June 30, 1996, Bankshares had $8.9 million of student loans on
nonaccrual status that may have lost their guarantees. Management is unable
to predict the amount or range of Bankshares' ultimate loss.
4
<PAGE> 7
ITEM 2. - CORUS BANKSHARES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
OPERATING RESULTS
The major source of earnings for Bankshares is net interest income. The
related net interest margin represents the net interest income as a percentage
of average earning assets during the period. The following table represents a
summary of Bankshares' net interest income and related net interest margin, as
calculated on a fully taxable equivalent basis.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------------ -------------------------------
(thousands) 1996 1995 1996 1995
---------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
Net interest income $ 28,517 $ 23,336 $ 57,400 $ 44,131
Taxable equivalent adjustment 273 361 552 724
---------- ---------- ------------ ----------
Taxable equivalent net
interest income $ 28,430 $ 23,697 $ 57,952 $ 44,855
=========== ========== =========== ==========
Average earning assets $2,073,991 $1,808,419 $2,070,965 $1,788,689
=========== ========== =========== ==========
Net interest margin (annualized) 5.48% 5.24% 5.60% 5.02%
=========== ========== =========== ==========
</TABLE>
During the three months ended June 30, 1996, Bankshares had $3.7 million of
interest income from the accretion of acquisition discount related to several
groups of purchased, previously nonperforming student loan pools compared with
$2.9 million in the second quarter of 1995. Excluding the accretion of the
acquisition discount, the net interest margin was 4.77% and 4.60% for the
quarterly periods ended June 30, 1996 and 1995, respectively.
For the first six months of 1996, Bankshares had $7.8 million of interest
income from the accretion of acquisition discount related to several groups of
purchased student loan pools compared with $5.3 million in the same period in
1995. Excluding the accretion of the acquisition discount, the net interest
margin was 4.84% and 4.42% for the first six months of 1996 and 1995,
respectively.
The following table represents a reconciliation of fully tax equivalent net
interest income:
<TABLE>
<CAPTION>
(thousands)
<S> <C>
Fully tax equivalent net interest income for the six months ended June 30, 1995 $44,855
Change due to average earning assets fluctuations 7,085
Change due to interest rate fluctuations 5,187
Change due to rate/volume fluctuations 825
-------
Fully tax equivalent net interest income for the six months ended June 30, 1996 $57,952
=======
</TABLE>
For the second quarter of 1996, noninterest income increased $433,000 to $4.8
million, compared with $4.4 million for the second quarter of 1995. Gains on
the dispositions of loans increased $907,000 in 1996. These gains are the
result of payments made by guarantee agencies for student loan borrowers that
defaulted. Other income decreased $469,000 in 1996 primarily due to gains on
sales of other real estate owned properties in 1995.
5
<PAGE> 8
ITEM 2. - CORUS BANKSHARES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
For the first six months of 1996, noninterest income increased $2.7 million to
$10.2 million, compared with $7.5 million in 1995. Gains on the dispositions
of loans increased $1.6 million. Other income decreased $1.5 million primarily
due to a $713,000 gain on the sale of a section of a bank parking lot in the
first quarter of 1995 and gains on sales of other real estate owned properties.
In 1996, securities and other financial instruments gains included a gain of
$1.3 million from interest rate swaps that did not qualify for hedge accounting
treatment. These swap agreements were terminated in the first quarter of 1996.
In the second quarter of 1996, noninterest expense decreased $362,000 to $12.5
million, compared with $12.9 million in 1995. Compensation expense increased
$699,000 to $6.7 million due to the implementation of performance-based
compensation plans and increased staffing in Bankshares' lending operations.
FDIC deposit insurance decreased $895,000 to $3,000 due to the elimination of
premiums for Bankshares' banks. The banks are currently required to pay only
administrative fees for their FDIC insurance. Goodwill amortization increased
$127,000 to $698,000 primarily due to additional goodwill that was recorded in
the second quarter of 1995 for the acquisition of Belmont National Bank and in
the first quarter of 1996 for the purchase of a portion of the minority
interest in one of Bankshares' subsidiary banks. Other expenses decreased
$317,000 primarily due to reduced advertising expenses and a reduction in the
minority interest of Bankshares' subsidiary banks.
In the first half of 1996, noninterest expense increased $203,000 to $25.4
million, compared with $25.2 million in 1995. Compensation expense increased
$1.7 million due to the performance-based compensation plans and increased
staffing in lending operations. FDIC deposit insurance decreased $1.8 million
due to the elimination of premiums.
The effective tax rate for the second quarter of 1996 was 35.3% versus 35.6% in
1995. For the six months ended June 30, 1996 and 1995, the effective tax rate
was 35.3%.
FINANCIAL CONDITION
Interest-Earning Assets
The following table details the composition of Bankshares' earning assets.
<TABLE>
<CAPTION>
June 30 December 31 June 30
1996 1995 1995
------- ----------- -------
<S> <C> <C> <C>
Loans:
Commercial real estate 30% 30% 24%
Student 19 19 20
Residential mortgage 16 16 15
Home equity 9 9 6
Commercial 3 4 5
Consumer 2 2 2
---- ---- ----
Total Loans 79 80 72
Securities 21 19 27
Federal funds sold and time deposits - 1 1
---- ---- -----
Total 100% 100% 100%
==== ==== ====
</TABLE>
6
<PAGE> 9
ITEM 2. - CORUS BANKSHARES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Total loans at June 30, 1996 were $1.62 billion, an increase of $65.4 million,
or 4.2%, from year-end 1995. From time to time, Bankshares has purchased
nonperforming student loans. Bankshares attempts to convert these loans to
performing status and have their guarantees reinstated. The excess of the
amount of performing loans converted over the cost of the loans is accreted
into income over the estimated lives of the loans using the level-yield method.
The total discount remaining to be accreted into income in future periods
totaled $26.2 million at June 30, 1996.
At June 30, 1996, total securities were $431.7 million, an increase of $52.7
million, or 7.9%, from $379.0 million at December 31, 1995. This increase was
partially due to the maturity of $25.0 million of interest-bearing deposits
with banks in the second quarter of 1996. At June 30, 1996, Bankshares held
$46.6 million of investments in equity securities of publicly-traded bank
holding companies included in the available for sale securities classification.
These securities represented minority investments in 30 companies with
unrealized gains of $11.0 million. Gains of $195,000 and $405,000 were
recognized on sales of these securities during the second quarter and first six
months of 1996, respectively.
Allowance for Possible Loan Losses
A reconciliation of the activity in Bankshares' allowance for possible loan
losses is as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
---------------------- ------------------------
(thousands) 1996 1995 1996 1995
---------- ---------- --------- -----------
<S> <C> <C> <C> <C>
Balance at beginning of period $ 29,525 $ 19,970 $ 25,640 $ 20,157
Provision for possible loan losses 4,000 1,479 8,000 1,479
Charge-offs (1,558) (124) (2,489) (390)
Recoveries 68 188 884 267
---------- ---------- ---------- ----------
Balance at June 30 $ 32,035 $ 21,513 $ 32,035 $ 21,513
========== ========== ========== ==========
Total loans at June 30 $1,624,158 $1,330,141 $1,624,158 $1,330,141
========== ========== ========== ==========
Allowance as a percentage of loans 1.97% 1.62% 1.97% 1.62%
Annualized net charge-offs/ =========== ========== ========== ==========
(recoveries) as a percentage of:
Total loans 0.37% (0.02%) 0.20% 0.02%
Annualized provision for =========== ========== ========== ==========
possible loan losses 37.25% (4.33%) 20.06% 8.32%
=========== ========== =========== ==========
</TABLE>
The $4.0 and $8.0 million provisions for possible loan losses for the second
quarter and first six months of 1996, respectively, reflect higher levels of
credit risk in the loan portfolio. The higher levels of risk are primarily due
to: (1) increased delinquencies in the home equity loan portfolio; (2) greater
risk in the commercial real estate loan portfolio; and, (3) consideration given
to the potential losses that could result from the student loan investigation
described in Note 3 in the Notes to the Condensed Consolidated Financial
Statements.
7
<PAGE> 10
ITEM 2. - CORUS BANKSHARES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Nonperforming Assets
The following table presents a summary of nonperforming assets' book value.
Nonperforming loans are nonaccrual loans, restructured loans and 90 days or
more past due loans still accruing interest. Excluded from the table are
student loans that Bankshares has no reason to believe have lost their
guarantee. Guaranteed student loans more than 90 days past due and not
included in the table totaled $11.7, $13.9 and $10.8 million at June 30, 1996,
December 31, 1995 and June 30, 1995, respectively.
<TABLE>
<CAPTION>
(thousands) June 30 December 31 June 30
1996 1995 1995
---------- ------------- -----------
<S> <C> <C> <C>
Nonperforming loans:
Residential mortgage $ 14,648 $ 7,828 $ 2,900
Commercial real estate 6,213 1,973 4,188
Commercial 42 381 86
Home equity 2,033 1,119 894
Student 9,216 6,837 6,632
Consumer 683 663 1,049
---------- --------- ---------
Total nonperforming loans 32,835 18,801 15,749
Other real estate owned 1,382 1,589 1,021
---------- --------- ---------
Total nonperforming assets $ 34,217 $ 20,390 $ 16,770
========== ========= =========
Nonaccrual loans included in
nonperforming loans above $ 10,241 $ 8,536 $ $9,106
========== ========= =========
Nonperforming loans/Total loans 2.02% 1.21% 1.18%
Nonperforming assets/Total assets 1.55% 0.96% 0.85%
Allowance for loan losses/
nonperforming loans 97.56% 125.75% 136.60%
</TABLE>
Nonperforming residential mortgage loans are adequately secured by first
mortgages on owner-occupied, residential property. Therefore, minimal losses
are anticipated for any of the nonperforming residential mortgage loans.
Student Loan Investigation
Refer to Note 3 of the Notes to Condensed Consolidated Financial Statements on
page 4 for further information.
8
<PAGE> 11
ITEM 2. - CORUS BANKSHARES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
Liabilities
The following table details the composition of deposit products by type.
<TABLE>
<CAPTION>
June 30 December 31 June 30
1996 1995 1995
------- ----------- -------
<S> <C> <C> <C>
Demand 11% 11% 10%
NOW 5 5 6
Money Market 48 48 52
Savings 11 12 14
Certificates of Deposit 25 24 18
------- ----------- -------
Total 100% 100% 100%
======= =========== =======
</TABLE>
The increase in the percentage of certificates of deposit to total deposits at
June 30, 1996 was due to an increase in retail certificates of deposit obtained
from brokers. In the second quarter of 1996, Bankshares borrowed $40.0 million
of Federal Home Loan Bank advances. The advances have a term of 5 years and an
interest rate of 3-month LIBOR that reprices quarterly. At June 30, 1996,
Bankshares had $219.8 million of retail certificates of deposit. Management
intends to utilize outside funding sources, as necessary, to support loan
growth.
Capital
Bankshares' consolidated leverage ratio (Tier 1 capital/total average quarterly
assets) was 8.63% at June 30, 1996, well in excess of the minimum regulatory
level of 5%. The consolidated Tier 1 and total risk-based capital ratios were
12.51% and 13.78%, respectively, exceeding the well-capitalized Tier 1 and
total risk-based capital ratios of 6.00% and 10.00%, respectively.
During the first quarter of 1996, Bankshares repurchased 202,000 shares of
common stock, or 1.3% of shares outstanding at December 31, 1995, under the
previously announced 1,000,000 share repurchase program that was approved by
the Board of Directors. There were no repurchases in the second quarter of
1996. As of June 30, 1996, a total of 417,500 shares had been repurchased
under the program.
Operating, Investing and Financing Activities
Net cash provided by operating activities totaled $27.4 million for the first
six months of 1996, compared with $90.2 million for the same period in 1995.
The change was primarily attributable to fluctuations in the level of trading
account securities.
Net cash used in investing activities totaled $86.6 million for the first six
months of 1996, compared with $278.5 million in 1995. The decrease was
primarily due to a lower level of loan originations net of repayments in 1996.
Net cash provided by financing activities totaled $53.9 million for the first
six months of 1996, compared with $55.9 million in 1995. In the second quarter
of 1996, Bankshares received proceeds of $40.0 million from Federal Home Loan
Bank advances. During the first six months of 1996, Bankshares repurchased
202,000 common shares.
9
<PAGE> 12
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The Annual Meeting of Shareholders was held on May 22, 1996.
(c) At the Annual Meeting of Shareholders the following matters were
submitted to a vote of the shareholders:
(1) The election of seven directors to the Board of Directors to serve
until the next annual meeting of shareholders or until their
successors are elected and take office:
<TABLE>
<CAPTION>
Director Votes For Votes Withheld
--------------------- ---------- --------------
<C> <C> <C>
Joseph C. Glickman 13,572,736 16,874
Robert J. Glickman 13,572,916 16,694
Karl H. Horn 13,548,423 41,187
Michael Levitt 13,556,510 33,100
Rodney D. Lubeznik 13,551,523 38,087
Michael Tang 13,553,023 36,587
William H. Wendt, III 13,513,916 75,694
</TABLE>
(2) The ratification of the appointment of KPMG Peat Marwick LLP as
Bankshares' independent accountants for the 1996 fiscal year:
<TABLE>
<CAPTION>
Votes For Votes Against Abstentions
---------- ------------- -----------
<C> <C> <C>
13,566,136 10,530 12,944
</TABLE>
(3) The ratification of the amendment of Bankshares' articles of
incorporation to change the name of the company to Corus Bankshares.
<TABLE>
<CAPTION>
Votes For Votes Against Abstentions
--------- ------------- -----------
<C> <C> <C>
9,106,291 51,098 23,124
</TABLE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 11 - Computation of Net Income per Common Share is on
page 12.
(b) Reports on Form 8-K.
None.
10
<PAGE> 13
SIGNATURE
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.
CORUS BANKSHARES, INC.
(Registrant)
August 12, 1996 By: /s/ Michael J. McClure
----------------------------
Michael J. McClure
Vice President and Chief
Accounting Officer
(Principal Accounting
Officer and duly authorized
Officer of Registrant)
11
<PAGE> 1
EXHIBIT 11 - CORUS BANKSHARES, INC.
COMPUTATION OF NET INCOME PER SHARE
<TABLE>
<CAPTION>
Six Months Ended
June 30
1996 1995
------------- -------------
<S> <C> <C>
Net Income (A) $22,127,000 $16,163,000
=========== ===========
Weighted Average Common Shares Outstanding 14,842,242 15,240,676
Weighted Average Common Share Equivalents (1) 152,783 51,996
----------- -----------
Weighted Average Common Shares and
Common Stock Equivalents (B) 15,002,065 15,292,672
=========== ===========
Net Income per Common Share (A/B) $1.47 $1.06
=========== ===========
</TABLE>
(1) Common share equivalents result from stock options being treated as if they
had been exercised and are computed by application of the treasury stock
method.
12
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 100,249
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,470
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 417,855
<INVESTMENTS-CARRYING> 13,828
<INVESTMENTS-MARKET> 13,778
<LOANS> 1,624,158
<ALLOWANCE> 32,035
<TOTAL-ASSETS> 2,208,426
<DEPOSITS> 1,900,388
<SHORT-TERM> 22,091
<LIABILITIES-OTHER> 36,851
<LONG-TERM> 40,000
<COMMON> 741
0
0
<OTHER-SE> 208,355
<TOTAL-LIABILITIES-AND-EQUITY> 2,208,426
<INTEREST-LOAN> 84,822
<INTEREST-INVEST> 10,960
<INTEREST-OTHER> 1,513
<INTEREST-TOTAL> 97,295
<INTEREST-DEPOSIT> 38,490
<INTEREST-EXPENSE> 39,895
<INTEREST-INCOME-NET> 57,400
<LOAN-LOSSES> 8,000
<SECURITIES-GAINS> 1,619
<EXPENSE-OTHER> 25,418
<INCOME-PRETAX> 34,197
<INCOME-PRE-EXTRAORDINARY> 34,197
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,127
<EPS-PRIMARY> 1.47
<EPS-DILUTED> 1.47
<YIELD-ACTUAL> 5.54
<LOANS-NON> 10,241
<LOANS-PAST> 22,594
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 25,640
<CHARGE-OFFS> 2,489
<RECOVERIES> 884
<ALLOWANCE-CLOSE> 32,035
<ALLOWANCE-DOMESTIC> 17,847
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 14,188
</TABLE>
