FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20949
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For The Quarter Ended September 30, 1996 Commission File No. 0-10680
CITIZENS BANCORP
(exact name of registrant as specified in its charter)
Maryland 52-1239452
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) identification No.)
14401 Sweitzer Lane, Laurel, MD 20707
(Address of principal executive offices)
(301) 206-6080
(Registrant's telephone number, including area code)
Former name, former address and former
fiscal year, if changed since last report.
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter 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
As of October 18, 1996, registrant has 15,133,099 shares of
Common Stock issued.
<PAGE>
INDEX
CITIZENS BANCORP AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Condition - September 30, 1996 and December 31,
1995.
Consolidated Statements of Income - Three months ended
September 30, 1996 and 1995. Nine months ended September 30,
1996 and 1995.
Consolidated Statements of Changes in Stockholders' Equity -
Nine months ended September 30, 1996 and 1995.
Consolidated Statements of Cash Flows - Nine months ended
September 30, 1996 and 1995.
Notes to Consolidated Financial Statements.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
CITIZENS BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
(Dollars In Thousands, Except Per Share Data)
<CAPTION>
Sept. 30, Dec. 31,
1996 1995
<S> <C> <C>
Assets
Cash and Cash Equivalents . . . . . . . . $ 198,145 $ 199,001
Securities Available for Sale(at fair value,
amortized cost of $534,283 and $468,614,
respectively) 545,425 471,989
Securities Held to Maturity(at amortized cost,
fair value of $993,371 and $1,019,600,
respectively) 1,000,859 1,019,708
Loans and Leases, net of Unearned Income 2,333,811 2,226,399
Less Allowance for Loan Losses. . . . . 37,156 34,145
Net Loans and Leases . . . . . . . . 2,296,655 2,192,254
Premises and Equipment, Net . . . . . . . 56,471 55,497
Accrued Income and Other Assets . . . . . 71,580 101,238
Total Assets . . . . . . . . . . . . $4,169,135 $4,039,687
</TABLE>
<TABLE>
<CAPTION>
Liabilities
<S> <C> <C>
Deposits:
Noninterest-bearing . . . . . . . . $ 654,507 $ 639,667
Interest-bearing . . . . . . . . . . 2,371,189 2,407,188
Total Deposits . . . . . . . . . . 3,025,696 3,046,855
Short-term Borrowings . . . . . . . . . . 772,466 644,183
Other Liabilities . . . . . . . . . . . . 16,389 14,458
Total Liabilities . . . . . . . . 3,814,551 3,705,496
Stockholders' Equity
Preferred Stock, $10.00 Par Value;
2,500,000 Shares; Outstanding, None
Common Stock, $2.50 Par Value;
125,000,000 Shares Authorized;
15,132,599 Shares Issued (1996) and
15,056,981 (1995) . . . . . . . . . . 37,832 37,642
Capital Surplus . . . . . . . . . . . . . 122,110 120,185
Retained Earnings . . . . . . . . . . . . 194,642 176,364
Total Stockholders' Equity . . . . 354,584 334,191
Total Liabilities and
Stockholders' Equity . . . . . . $4,169,135 $ 4,039,687
</TABLE>
<PAGE>
<TABLE>
CITIZENS BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
<CAPTION>
For Three Months For Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Interest Income
Interest and Fees on Loans
and Leases $46,699 $43,680 $137,821 $127,082
Interest and Dividends on Securities:
Securities Available for Sale 8,202 5,349 23,602 16,621
Securities Held to Maturity 15,131 16,110 43,425 49,812
Interest on Federal Funds Sold
and Securities Purchased
Under Resale Agreements 116
Total Interest Income 70,032 65,139 204,964 193,515
Interest Expense
Interest on Deposits 24,322 24,357 74,142 65,355
Interest on Short-term Borrowings 9,675 6,623 25,561 25,300
Total Interest Expense 33,997 30,980 99,703 90,655
Net Interest Income 36,035 34,159 105,261 102,860
Provision for Loan Losses (1,930) (1,825) (5,790) (5,120)
Net Interest Income After
Provision for Loan Losses 34,105 32,334 99,471 97,740
Other Income
Service Charges on Deposit Accounts 5,246 5,116 15,682 15,031
Other Service Charges and Fees 1,822 1,736 5,825 4,127
Insurance and Brokerage Fees 824 576 2,604 1,902
Other 3,194 2,698 8,453 7,671
Total Other Income 11,086 10,126 32,564 28,731
Other Expenses
Compensation and Employee Benefits 15,568 14,705 45,800 42,822
Occupancy and Equipment 5,628 5,513 16,522 16,940
Other 6,309 7,010 20,707 23,561
Total Other Expenses 27,505 27,228 83,029 83,323
Income Before Income Taxes 17,686 15,232 49,006 43,148
Income Taxes 6,375 5,783 17,860 16,321
Net Income $11,311 $ 9,449 $31,146 $26,827
Per Share of Common Stock Net Income $ .75 $ .63 $ 2.06 $ 1.79
</TABLE>
<PAGE>
<TABLE>PART I, Item 1 (Continued)
CITIZENS BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES
IN STOCKHOLDERS' EQUITY
(Dollars In Thousands, Except Per Share Data)
<CAPTION>
Common Capital Retained
Stock Surplus Earnings Total
<S> <C> <C> <C> <C>
Balance,
December 31, 1994 . . . . . $ 37,330 $116,939 $152,110 $306,379
Net Income . . . . . . . 26,827 26,827
Cash Dividends Paid on
Common Stock . . . . . . (12,610) (12,610)
Shares of Common Stock
Sold . . . . . . . . . 245 2,434 2,679
Net Change in Unrealized
Gain on Securities
Available for Sale 4,308 4,308
Balance,
September 30, 1995 $ 37,575 $119,373 $170,635 $327,583
Balance,
December 31, 1995. . . . . $ 37,642 $120,185 $176,364 $334,191
Net Income . . . . . . . . 31,146 31,146
Cash Dividends Paid On
Common Stock . . . . . (13,153) (13,153)
Shares of Common Stock
Sold . . . . . . . . . . 190 1,925 2,115
Net Change in Unrealized
Gain on Securities
Available for Sale . . 285 285
Balance,
September 30, 1996 . . . . $ 37,832 $122,110 $194,642 $354,584
</TABLE>
<PAGE>
<TABLE>
PART I, Item 1 (Continued)
CITIZENS BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Dollars In Thousands)
<CAPTION>
For Nine Months
Ended September 30,
1996 1995
<S> <C> <C>
Cash Flows From Operating Activities
Net Income . . . . . . . . . . . . . . $ 31,146 $ 26,827
Adjustments to Reconcile Net Income
to Net Cash Provided by Operating
Activities:
Loans Originated for Sale . . . . (159,314) (75,124)
Loans Sold . . . . . . . . . . . . 141,691 63,505
Provision for Loan Losses . . . . 5,790 5,120
Provision for Loss on Real Estate
Acquired in Settlement of Loans 62 1,260
Depreciation and Amortization. . . . 5,415 5,348
Amortization of Intangible Assets. . 178 1,087
Net Amortization/Accretion of
Premium/Discount on Securities . . . . 369 364
Decrease (Increase)in Accrued Interest
Receivable and Other Assets . . 29,006 (3,378)
Increase in Other Liabilities . . . 1,801 1,761
Other . . . . . . . . . . . . . . . (64) (771)
Net Cash Provided by
Operating Activities . . . . $ 56,080 $ 25,999
Cash Flows From Investing Activities
Proceeds from Maturities and Sales of
Investment Securities:
Available for Sale . . . . . . . $ 246,685 $ 79,849
Held to Maturity . . . . . . . . 264,299 139,447
Purchases of Investment Securities:
Available for Sale . . . . . . . (320,052) (231,595)
Held to Maturity . . . . . . . . (245,473) (20,940)
Net Increase in Loans
and Lease Receivables . . . . . (92,556) (171,361)
Purchases of Premises and Equipment (6,434) (3,249)
Proceeds from Sale of Real Estate
Acquired in Settlement of Loans 2,151 6,359
Development Costs of Real Estate
Acquired in Settlement of Loans (1,726) (2,260)
Other 84 71
Net Cash Used in Investing Activities $(153,022) $ (203,679)
<PAGE>
PART I, Item 1 (Continued)
For Nine Months
Ended September 30,
1996 1995
Cash Flows From Financing Activities
Net Increase (Decrease) in
Noninterest-bearing Deposits . . . . $ 14,840 $ (37,863)
Net (Decrease) Increase in Interest-
bearing Deposits . . . . . . . . . . (35,999) 247,540
Net Increase (Decrease) in Short-term
Borrowings . . . . . . . . . . . . . 128,283 (37,856)
Sale of Common Stock . . . . . . . . . 2,115 2,679
Cash Dividends Paid on Common Stock . (13,153) (12,610)
Net Cash Provided by Financing
Activities . . . . . . . . . $ 96,086 $ 161,890
Net Decrease in Cash and Cash
Equivalents . . . . . . . . . . . . . (856) (15,790)
Cash and Cash Equivalents, Beginning
of Period . . . . . . . . . . . . . . 199,001 215,114
Cash and Cash Equivalents, End of Period $ 198,145 $ 199,324
</TABLE>
<PAGE>
PART I, Item 1 (Continued)
CITIZENS BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Nine Months Ended September 30, 1996
NOTE 1. UNAUDITED FINANCIAL STATEMENTS
The accompanying unaudited, consolidated, financial statements have been
prepared by Citizens Bancorp in accordance with generally accepted accounting
principles, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements have been condensed or omitted pursuant to
such rules and regulations, although management believes that the disclosures
are adequate to make the information presented not misleading. In the
opinion of management, all adjustments made to the unaudited interim
financial statements were of a normal recurring nature. It is suggested that
these condensed financial statements be read in conjunction with the
financial statements and the notes thereto included in the Citizens Bancorp
and Subsidiaries' Form 10-K for the year ended December 31, 1995.
NOTE 2. EARNINGS PER SHARE
Earnings per share have been calculated on the basis of the weighted
average number of shares outstanding for the applicable periods. Weighted
average number of shares was 15,114,438 and 14,992,090 for the nine months
ended September 30, 1996 and 1995, respectively.
NOTE 3. SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid during the nine months ended September 30, 1996 and 1995
was approximately $100.9 million and $89.8 million, respectively. In
addition, the Corporation paid income taxes of approximately $17.1 million
for both the nine months ended September 30, 1996 and 1995, respectively.
In non-cash investing activities, the Corporation transferred $289
thousand from Loans Receivable to Real Estate Acquired in Settlement of Loans
during the nine months ended September 30, 1996. For the same period in
1995, $1.1 million was transferred from Loans Receivable to Real Estate
Acquired in Settlement of Loans.
<PAGE>
NOTE 4. NEW ACCOUNTING PRONOUNCEMENTS
Citizens Bancorp adopted SFAS 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets Disposed Of",effective January 1,
1996. This Statement prescribes the accounting for the impairment of long-lived
assets, such as property, plant and equipment, identifiable intangible
assets and goodwill related to those assets. An impairment loss is recorded
when the undiscounted cashflows from the use and eventual disposal of the
asset is less than the carrying value of the asset.
Effective January 1, 1996 Citizens Bancorp also adopted SFAS 122,
"Accounting for Mortgage Servicing Rights". This Statement, among other
items, will require the Corporation to capitalize the fair value of mortgage
servicing rights for loans originated at the time a loan is sold with the
servicing retained by the seller.
In addition, Citizens Bancorp adopted SFAS 123, "Accounting for Stock-Based
Compensation", effective January 1, 1996. This Statement gives the
Corporation the option of either 1) continuing to account for stock options
and other forms of stock compensation under the current accounting rules (APB
No. 25, "Accounting for Stock Issued to Employees") while providing the
disclosures required under SFAS 123 or 2) adopting SFAS 123 accounting for
all stock compensation arrangements. The Corporation opted to continue to
account for stock options under APB No. 25, "Accounting for Stock Issued to
Employees".
The adoption of these Statements did not have a material impact on the
Corporation's financial condition or results of operations for the nine
months ended September 30, 1996.
<PAGE>
<TABLE>
PART I, Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CITIZENS BANCORP AND SUBSIDIARIES
(Dollars In Thousands, Except Per Share Data)
Selected financial information for Citizens Bancorp and Subsidiaries is
listed below:
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1996 1995
<S> <C> <C>
Condensed Income Statement
Interest Income . . . . . . . . . . $ 204,964 $ 193,515
Interest Expense . . . . . . . . . 99,703 90,655
Net Interest Income . . . . . . . . 105,261 102,860
Provision for Loan Losses . . . . . 5,790 5,120
Other Income . . . . . . . . . . . 32,564 28,731
Other Expenses . . . . . . . . . . 83,029 83,323
Income before Income Tax . . . . . 49,006 43,148
Applicable Income Taxes . . . . . . 17,860 16,321
Net Income . . . . . . . . . . . . 31,146 26,827
Per Share of Common Stock
Net Income . . . . . . . . . . . . $ 2.06 $ 1.79
Dividends Paid . . . . . . . . . . .87 .84
Book Value . . . . . . . . . . . . 23.43 21.79
Other Information
Total Average Assets . . . . . . . $4,058,025 $3,766,522
Total Assets . . . . . . . . . . . 4,169,135 3,883,747
Total Average
Stockholders' Equity . . . . . . 342,463 317,646
Ratios
Interest Margin . . . . . . . . . . 3.72% 3.94%
Loans to Deposits . . . . . . . . . 74.86 70.92
Capital to Assets . . . . . . . . . 8.44 8.43
Return on Equity . . . . . . . . . 12.15 11.29
Return on Assets . . . . . . . . . 1.03 .95
Loans to Assets . . . . . . . . . . 56.03 53.69
Dividends Paid to
Net Income . . . . . . . . . . . 42.23 47.00
Allowance for Loan
Losses to Loans . . . . . . . . 1.59 1.61
</TABLE>
<PAGE>
PART I, Item 2 (Continued)
Results of Operations
Net income for the nine months ended September 30, 1996
increased $4.3 million or 16.1% from the corresponding period in
1995. Earnings per share for the nine months totaled $2.06 which
was $.27 or 15.1% greater than the first nine months of 1995. The
Corporation's returns on average equity were 12.15% and 11.29% for
the nine months ended September 30, 1996 and 1995, respectively.
The Corporation's returns on average assets were 1.03% and .95% for
the nine months ended Setember 30, 1996 and 1995, respectively.
Net Interest Income
Net interest income for the nine months ended September 30,
1996 increased $2.4 million or 2.3% from the corresponding period
in 1995. This increase resulted primarily from an additional $11.4
million in interest income which was realized from an increase in
earnings assets, offset by a $9.0 million rise in interest expense
due to an increase in volume in interest-bearing liabilities.
Average earning assets increased due to an additional $252 million
(12.4%) in average loans outstanding. Funding for the loan growth
was obtained largely through $230 million (26.4%) growth in time
certificate deposits.
In the table below, net interest income is presented on a
"taxable equivalent" basis. The income earned on tax-exempt
assets, such as municipal securities, is adjusted for analytical
purposes to recognize the income tax savings which facilitates
comparison between taxable and tax-exempt assets.
<PAGE>
<TABLE>
PART I, Item 2 (Continued)
CITIZENS BANCORP AND SUBSIDIARIES
QUARTERLY AVERAGE CONSOLIDATED STATEMENTS
OF CONDITION AND RATES
<CAPTION>
Nine Months - 1996 Nine Months - 1995
Average Average
Balance Interest Rate Balance Interest Rate
(Taxable Equivalent Basis, Dollars In Thousands)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Loans:
Commercial . . . $ 387,769 $ 24,499 8.44% $ 351,879 $23,840 9.06%
Real Estate . . 1,133,379 71,713 8.45 996,504 66,940 8.98
Consumer . . . . 752,730 41,609 7.38 673,826 36,302 7.20
Total Loans . 2,273,878 137,821 8.10 2,022,209 127,082 8.40
Securities:
Available for Sale 543,080 23,602 5.81 343,585 16,621 6.47
Held to Maturity. 963,518 41,837 5.80 1,124,205 48,127 5.72
Tax-exempt
Held to Maturity . 28,413 2,443 11.49 29,846 2,592 11.61
Total Investment
Securities . . . 1,535,011 67,882 5.91 1,497,636 67,340 6.01
Fed Funds Sold &
Securities Purchased
Under Resale
Agreements 3,026 116 5.12 - - -
Total Interest
Earning Assets 3,811,915 $205,819 7.21% 3,519,845 194,422 7.38%
Cash . . . . . . . . 160,436 161,929
Allowance for Loan
Losses . . . . . (35,692) (33,390)
Other Assets . . . . 121,366 118,138
Total Assets $4,058,025 $3,766,522
</TABLE>
<PAGE>
<TABLE>
PART I, Item 2 (Continued)
<CAPTION>
Nine Months - 1996 Nine Months - 1995
Average Average
Balance Interest Rate Balance Interest Rate
(Taxable Equivalent Basis, Dollars In Thousands)
<S> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits:
Savings and Demand $ 902,323 $ 18,224 2.70% $ 912,751 $ 18,562 2.72%
Money Market . . 411,873 10,625 3.45 430,522 10,876 3.38
Time Certificates 1,099,136 45,293 5.50 869,296 35,917 5.52
Total . . . . . . 2,413,332 74,142 4.10 2,121,569 65,355 3.95
Short-term Borrowings 658,702 25,561 5.18 580,802 25,300 5.82
Total Interest-bearing
Liabilities . . . 3,072,034 99,703 4.33 2,793,371 90,655 4.34
Noninterest-bearing
Deposits . . . . . . 624,336 638,810
Other Liabilities . . 19,192 16,695
Stockholders' Equity 342,463 317,646
Total Liabilities and
Stockholders' Equity $4,058,025 $3,766,522
Net Interest Income . $106,116 $103,767
Net Interest Margin . 3.72% 3.94
</TABLE>
<PAGE>
PART I, Item 2 (Continued)
Provision for Loan Losses and Allowance
The provision for loan losses was $ 5.8 million for the nine
months ended September 30, 1996 compared to $5.1 million for the
comparable 1995 period. Charge-offs and recoveries for each nine
month periods are listed below.
<TABLE>
<CAPTION>
For Nine Months
Ended September 30,
1996 1995
(Dollars in Thousands)
<S> <C> <C>
Charge-offs:
Real Estate-Mortgage $1,764 $1,473
Real Estate-Const/Land 772 0
Commercial 561 205
Consumer 1,290 802
Total Charge-offs 4,387 2,480
Recoveries:
Real Estate-Mortgage 17 86
Commercial 1,012 346
Consumer 577 434
Total Recoveries 1,606 866
Net Charge-offs $2,781 $1,614
</TABLE>
The allowance for loan losses was $37.2 million and $34.4
million at September 30, 1996 and 1995, respectively. The
allowance approximates 1.59% and 1.61% of total loans outstanding
at both September 30, 1996 and 1995, respectively. The allowance
represents coverage of 312.6% and 221.9% of non-performing loans
outstanding at September 30, 1996 and 1995, respectively. At
September 30, 1996 and December 31, 1995 there was $11.9 million
and $14.3 million in non-performing loans outstanding.
At September 30, 1996 and December 31, 1995 there was $20.9
million and $21.4 million, respectively in real estate acquired in
settlement of loans owned by the Corporation.
PAGE
<PAGE>
Non-Performing Assets
Non-performing assets include nonaccrual and restructured
loans, accruing loans past-due 90 days or more, and real estate
acquired in settlement of loans. The table below reflects the
distribution of non-performing assets.
<TABLE>
<CAPTION>
Sept. 30, Dec.31,
1996 1995
(Dollars in Thousands)
<S> <C> <C>
Commercial, Financial, and
Agricultural $ 3,595 $ 5,015
Real Estate - Construction - 1,384
Real Estate - Mortgage 8,117 7,421
Consumer 169 458
Total Non-performing Loans 11,881 14,278
Real Estate Acquired in Settlement
of Loans 20,927 21,399
Total Non-performing Assets $32,808 $ 35,677
Non-performing Loans to Total Loans .51% .64%
Non-performing Assets to Loans
and Real Estate Acquired
in Settlement of Loans 1.39 1.59
Accruing Loans past Due 90 Days
or More $ 1,712 $ 5,303
Restructured Loans 7,939 13,227
</TABLE>
Other Income and Expense
Other income for the nine months ended September 30, 1996
increased $3.8 million or 13.3% from the comparable 1995 period.
Included in the September 30, 1996 results were increases of $710
thousand and $298 thousand in automated teller machine surcharge
and official check fees, repectively. Revenues from the mortgage
bank subsidiary increased $1.4 million for the nine months ended
September 30, 1996 compared to the same period in 1995. This
increase was attributable to lower interest rates in 1996 which
stimulated the refinancing market volume.
<PAGE>
PART I, Item 2 (Continued)
Other expenses decreased $291 thousand or .4% for the nine
months ended September 30, 1996 compared to the same period in
1995. Included in the September 30, 1996 results were compensation
cost increases of $3.0 million as a result of normal merit
increases and hiring of new staff. Also included was a decrease in
FDIC premium assessments of $2.9 million for the period ended
September 30, 1996 as compared to the same period in 1995.
Income Taxes
Federal and state income taxes increased 9.4% for the nine
months ended September 30, 1996 when compared with 1995. This
resulted primarily from higher levels of pre-tax income.
The Corporation's effective income tax rates were 36.4% and
38.8% for the nine months ended September 30, 1996 and 1995,
respectively.
Financial Condition
As reflected in the Consolidated Statements of Cash Flows, net
cash provided by operating activities was $56.1 million and $26.0
million for the nine months ended September 30, 1996 and 1995,
respectively.
Purchases of investment securities and growth in loans
outstanding were the Corporation's most significant investing
activities. During the first nine months of 1996, approximately
$54.5 million of securities purchases were consummated in excess of
replacement of maturing securities. Loan demand continued in the
nine months ended September 30, 1996 with $92.5 million in net new
loans booked. Deposit decreases in the first nine months of 1996
stemmed from a $36.0 million decrease in interest bearing deposits
offset by an increase in non-interest bearing deposits of $14.8
million.
PAGE
<PAGE>
PART I, Item 2 (Continued)
Capital Resources
Dividends for the three quarters ended September 30, 1996
increased to $.29 compared to $.28 paid in dividends for all four
quarters of 1995.
The Federal Reserve Board sets standards for measuring capital
adequacy for U.S. banking organizations. These standards classify
capital into two tiers, referred to as Tier 1 and Tier 2.
At September 30, 1996 and 1995, Citizens Bancorp's Tier I
risk-based capital ratio was 12.9% and 12.7%, respectively, well in
excess of the 4% regulatory requirement. For the same periods, the
total risk-based capital ratio was 14.1% and 14.0%, respectively,
also well in excess of the 8% requirement. The leverage ratio
stood at 8.5% and 8.7% at September 30, 1996 and 1995,
respectively, exceeding the 4% ratio test.
At September 30, 1996 and 1995, Citizens Bank of Maryland's
Tier I risk-based capital ratio was 12.2% and 12.6%, respectively.
For the same periods, the total risk-based capital ratio was 13.5%
and 13.9%, respectively. The leverage ratio stood at 8.2% and 8.4%
at September 30, 1996 and 1995, respectively.
At September 30, 1996 and 1995 Citizens Bank of Washington's
Tier I risk-based capital ratio was 15.0% and 13.7%, respectively.
For the same periods, the total risk-based capital ratio was 16.2%
and 14.9%, respectively. The leverage ratio stood at 11.0% and
10.6% at September 30, 1996 and 1995, respectively.
<PAGE>
PART I, Item 2 (Continued)
Other Events-Announcement of Merger
On September 16, 1996, Citizens Bancorp announced the signing
of a definitive agreement under which Citizens will merge with
Crestar Financial Corporation. Pending approval by regulatory
authorities and the shareholders of both institutions, the
transaction is expected to be completed by March 31, 1997. Under
the terms of the agreement, Citizens' shareholders will receive
.835 shares of Crestar common stock for each share of Citizens
stock they hold. We believe this merger is a very positive step
forward, and in the best interests of our shareholders, customers,
and staff. Upon completion of the merger, our combined
organization will have the largest deposit share in the Greater
Washington Metropolitan area and hold the number two position in
the State of Maryland.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - See
proxy statement filed with the Securities and Exchange
Commission on April 5, 1991.
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K - See Form 8-K filed
with the Securities and Exchange Commission on September
16, 1996 regarding merger announcement between Citizens
Bancorp and Crestar Financial Corporation.
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.
CITIZENS BANCORP
By: Kaye A. Simmons
Treasurer
Principal Accounting Officer
By: Jean G. Salamone
Secretary
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