UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act
of 1934
For the quarter ended September 30, 1994 Commission File Number 0-13030
Trans Financial Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Kentucky 61-1048868
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
500 East Main Street, Bowling Green, Kentucky 42101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (502)781-5000
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 _
The number of shares outstanding of the issuer's class of common stock on
November 8, 1994: 11,191,781 shares.
The Exhibit Index is on page 21. This filing contains 23 pages (including this
facing sheet).
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
(Unaudited)
In thousands, except share data September 30 December 31 September 30
1994 1993 1993
Assets
Cash and due from banks $83,037 $68,533 $60,286
Interest-bearing deposits with 197 447 747
banks
Federal funds sold and
resale agreements 2,500 32,778 43,280
Mortgage loans held for sale 4,886 45,178 36,997
Securities available for sale (amortized
cost of $254,389 as of September 30, 1994
and $238,486 as of December 31, 1993;
and market value of $53,052 as of
September 30, 1993) 245,129 239,905 52,043
Securities held to maturity (market
value of $85,741 as of September 30, 1994;
$142,979 as of December 31, 1993;
and $358,877 as of September
30, 1993 87,380 145,741 352,089
Loans, net of unearned income 1,101,982 1,006,796 990,028
Less allowance for loan losses 12,539 12,505 12,695
Net loans 1,089,443 994,291 977,333
Premises and equipment, net 36,012 33,393 32,987
Other assets 47,287 37,185 41,053
Total assets $1,595,871 $1,597,451 $1,596,815
Liabilities and Shareholders' Equity
Deposits:
Non-interest bearing $180,314 $169,828 $173,728
Interest bearing 1,165,157 1,206,399 1,201,523
Total deposits 1,345,471 1,376,227 1,375,251
Fed funds purchased and
repurchase agreements 47,349 29,704 32,720
Other short-term borrowings 43,243 15,000 15,099
Long-term debt 37,541 54,217 54,378
Other liabilities 11,355 10,268 10,127
Total liabilities 1,484,959 1,485,416 1,487,575
Shareholders' equity:
Preferred stock - 1,010 1,010
Common stock, no par value. Authorized
25,000,000 shares; issued and
outstanding 11,190,342; 11,149,702;
and 11,133,389 shares, respectively 20,982 20,437 20,876
Additional paid-in capital 42,641 42,725 42,074
Retained earnings 57,106 51,006 49,180
Unrealized net gain (loss) on
securities available for sale,
net of tax (5,982) 718 -
Unrealized loss on marketable
equity securities - - (128)
Employee Stock Ownership Plan shares
purchased with debt (3,835) (3,861) (3,772)
Total shareholders' equity 110,912 112,035 109,240
Total liabilities
and shareholders' equity $1,595,871 $1,597,451 $1,596,815
See accompanying notes to consolidated financial statements.
<PAGE>
Consolidated Statements of Income
(Unaudited)
In thousands, except per share data Three Months Nine Months
For the periods ended September 30 1994 1993 1994 1993
Interest income
Loans, including fees $23,684 $20,569 $67,440 $55,316
Federal funds sold and resale
agreements 215 111 525 601
Securities 4,816 5,947 14,593 17,804
Mortgage loans held for sale 136 581 1,031 1,439
Interest-bearing deposits with banks 75 37 99 94
Total interest income 28,926 27,245 83,688 75,254
Interest expense
Deposits 10,630 10,769 30,815 30,947
Federal funds purchased
and repurchase agreements 297 179 749 498
Long-term debt and other
borrowings 1,045 587 3,108 1,125
Total interest expense 11,972 11,535 34,672 32,570
Net interest income 16,954 15,710 49,016 42,684
Provision for loan losses 555 786 1,567 2,206
Net interest income after
provision for loan losses 16,399 14,924 47,449 40,478
Non-interest income
Service charges on
deposit accounts 1,914 1,689 5,492 4,526
Loan servicing fees 766 530 2,060 1,701
Gains on sales of securities
available for sale, net 33 43 121 1,100
Gains (losses) on sales of mortgage
loans held for sale, net 12 377 (160) 650
Trust services 310 295 932 832
Brokerage fees 184 206 720 551
Other 1,055 1,118 3,064 2,991
Total non-interest income 4,274 4,258 12,229 12,351
Non-interest expenses
Compensation and benefits 6,474 6,136 19,365 16,343
Net occupancy expense 1,186 1,312 3,264 3,275
Furniture and equipment expense 1,390 1,071 3,805 2,917
Deposit insurance 785 773 2,399 2,002
Professional fees 691 656 2,484 1,991
Postage, printing & supplies 941 741 2,706 2,086
Communications 270 147 796 748
Other 3,259 3,149 9,378 7,840
Total non-interest expenses 14,996 13,985 44,197 37,202
Income before income taxes and
cumulative effect of change
in accounting principle 5,677 5,197 15,481 15,627
Income tax expense 1,870 1,648 5,112 4,729
Income before cumulative effect
of change in accounting principle 3,807 3,549 10,369 10,898
Cumulative effect of change in
accounting principle - - - 296
Net income $3,807 $3,549 $10,369 $11,194
Net income available
for common stock $3,793 $3,528 $10,315 $11,133
Primary earnings per share $0.34 $0.31 $0.92 $0.99
Fully-diluted earnings per share $0.34 $0.31 $0.92 $0.99
See accompanying notes to consolidated financial statements.
<PAGE>
Consolidated Statements of Changes in Shareholders' Equity
(Unaudited)
In thousands, except per share data
For the nine months ended September 30 1994 1993
Balance January 1 $112,035 $99,406
Net income 10,369 11,194
Issuance of common stock 462 1,560
Retirement of FGC preferred stock (1,010) -
Cash dividends declared:
Common stock (4,215) (2,994)
Preferred stock (54) (61)
Change in unrealized gain (loss) on
securities available for sale and
marketable equity securities,
net of taxes (6,700) 35
ESOP debt reduction 277 100
ESOP shares purchased with debt (252) -
Balance September 30 $110,912 $109,240
See accompanying notes to consolidated financial statements.
<PAGE>
Consolidated Statements of Cash Flows
(Unaudited)
In thousands, except per share data
For the nine months ended September 30 1994 1993
Cash flows from operating activities:
Net income $10,369 $11,194
Adjustments to reconcile net income to cash
provided by operating activities:
Provision for loan losses 1,567 2,206
Gains on sales of securities available for sale (121) (1,100)
Losses(gains) on sales of mortgage loans
held for sale, net 160 (650)
Gain on sale of premises and equipment (193) -
Depreciation, amortization and accretion, net 4,561 2,438
Proceeds from sale of mortgage loans held for sale 161,175 109,577
Originations of mortgage loans held for sale (121,043) (120,927)
Decrease (increase) in other assets (9,925) 429
Increase (decrease) in other liabilities 4,820 (20,945)
Net cash provided by operating activities 51,370 (17,778)
Cash flows from investing activities:
Net decrease (increase) in interest-bearing deposits
with banks 250 8,160
Net decrease (increase) in federal funds sold
and resale agreements 30,278 44,898
Proceeds from sales of securities available for sale 6,989 26,474
Proceeds from maturities, prepayment and call of securities:
Available for sale 54,533 11,590
Held to maturity 25,391 95,548
Purchases of securities:
Available for sale (19,301) (17,501)
Held to maturity (26,350) (82,412)
Net increase in loans (97,912) (101,499)
Purchases of premises and equipment (5,294) (3,651)
Proceeds from disposals of premises and equipment 885 1,797
Net cash and cash equivalents (outflow) from acquisition - (7,996)
Net cash provided by (used in) investing activities (30,531) (24,592)
Cash flows from financing activities:
Net increase (decrease) in deposits (30,756) (10,684)
Net increase (decrease) in federal funds purchased
and repurchase agreements 17,645 2,585
Net increase (decrease) in other short-term borrowings 18,243 14,499
Repayment of long-term debt (6,650) (479)
Proceeds from issuance of long-term debt - 33,000
Retirement of preferred stock (1,010) -
Proceeds from issuance of common stock 462 1,560
Dividends paid (4,269) (3,055)
Net cash provided by (used in) financing activities (6,335) 37,426
Net decrease in cash and cash equivalents 14,504 (4,944)
Cash and cash equivalents at beginning of year 68,533 65,230
Cash and cash equivalents at end of period (note 4 $83,037 $60,286
See accompanying notes to consolidated financial statements.
<PAGE>
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and, therefore, do not
include all information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting only of normal recurring accruals) considered necessary
for a fair presentation have been reflected in the accompanying financial
statements. Results of interim periods are not necessarily indicative of results
to be expected for the full year.
The accounting and reporting policies of Trans Financial Bancorp, Inc. and its
subsidiaries ("the company") conform to generally accepted accounting principles
and general practices within the banking industry. The consolidated financial
statements include the accounts of Trans Financial Bancorp, Inc. and its wholly-
owned subsidiaries. All significant inter-company accounts and transactions have
been eliminated in consolidation. A description of other significant accounting
policies is presented in the 1993 annual report to shareholders.
(2) Allowance for Loan Losses
An analysis of the changes in the allowance for loan losses follows:
In thousands, except per share data
For the nine months ended September 30 1994 1993
Balance January 1 $12,504 $9,595
Change due to acquisitions - 2,439
Provision for loan losses 1,567 2,206
Loans charged off (1,956) (2,112)
Recoveries of loans previously charged off 424 567
Net charge-offs (1,532) (1,545)
Balance September 30 $12,539 $12,695
(3) Business Combinations
On February 15, 1994, Trans Financial merged with Kentucky Community Bancorp.
Inc. ("KCB") of Maysville, Kentucky, the holding company for The State National
Bank, Peoples First Bank, and Farmers Liberty Bank, with combined assets of
approximately $175 million. Under the terms of the merger the shares of KCB
common stock outstanding were converted into 1,374,962 shares of common stock of
the company.
On April 22, 1994, Trans Financial merged with Peoples Financial Services,
Inc. ("PFS") of Cookeville, Tennessee, the holding company for Peoples Bank and
Trust of the Cumberlands and Citizens Federal Savings Bank, with combined assets
of approximately $120 million. Under the terms of the merger the shares of PFS
common stock outstanding were converted into 1,302,254 shares of common stock of
the company.
On August 31, 1994, Trans Financial merged with FGC Holding Company ("FGC") of
Martin, Kentucky, the holding company for First Guaranty National Bank, with
approximately $125 million in assets. Under the terms of the merger, the shares
of FGC common stock outstanding were converted into 1,050,000 shares of common
stock of the company and the shares of FGC preferred stock were retired.
These transactions have been accounted for as poolings of interests and,
accordingly, all financial data has been restated as if the entities were
combined for all periods presented.
(4) Statement of Cash Flows
For purposes of reporting cash flows, cash and cash equivalents include cash
on hand and amounts due from banks. Certain non-cash investing and financing
transactions are summarized as follows:
Nine months ended September 30 (Dollars in thousands) 1994 1993
Securities transferred from held to maturity
to available for sale $52,920 $14,202
Increase (decrease) in unrealized loss
on securities available for sale, net of tax 6,700 (35)
Loans transferred to foreclosed property 1,158 781
Reclassification of debt from long-term to short-term 10,000 -
Debt transactions of Employee Stock Ownership Plan (net) 25 -
(5) Accounting Matters
During 1993 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 114, Accounting by Creditors for Impairment
of a Loan ("SFAS 114"). This statement must be adopted on a prospective basis by
January 1995. SFAS 114 requires that impaired loans be measured at the present
value of expected future cash flows, discounted at the loan's effective interest
rate, at the loan's observable market price, or at the fair value of the
collateral if the loan is collateral dependent. The company is currently
evaluating the possible financial impact on the company of adopting SFAS 114.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
Trans Financial Bancorp, Inc. is a bank holding company registered under the
Bank Holding Company Act of 1956, and a savings and loan holding company
registered under the Home Owners' Loan Act. The company has four subsidiary
banks - Trans Financial Bank, N.A., headquartered in Bowling Green, Kentucky,
Trans Financial Bank, located in Pikeville, Kentucky ("TFB-Pikeville"), Trans
Financial Bank Tennessee, National Association (formerly known as Peoples Bank
and Trust of the Cumberlands ["Peoples Bank"]), headquartered in Cookeville,
Tennessee, and Trans Financial Bank Martin, National Association (formerly known
as First Guaranty National Bank ["First Guaranty"]), headquartered in Martin,
Kentucky. As of September 30, 1994, the company had two thrift subsidiaries -
Trans Financial Bank, FSB, located in Russellville, Kentucky, and Trans
Financial Bank of Tennessee, FSB, headquartered in Tullahoma, Tennessee ("TFB-
Tennessee"). Collectively, the company's four banks and two thrift institutions
are referred to in this discussion as "the banks."
The company had total consolidated assets of $1.596 billion on September 30,
1994. Loans totaled $1.102 billion on that date, deposits were $1.345 billion
and shareholders' equity was $111 million.
On July 6, 1993, in a transaction accounted for as a purchase, the company
acquired Trans Kentucky Bancorp, Pikeville, Kentucky, the holding company for
The Citizens Bank of Pikeville. At the acquisition date, TFB-Pikeville (the
former Citizens Bank of Pikeville) had total assets of $207.2 million, net loans
of $107.6 million and total deposits of $163.9 million. The aggregate cost,
including consideration and acquisition costs, totaled $18.8 million. Because
this acquisition was accounted for under the purchase method, results of
operations prior to the acquisition date have not been included in the company's
results of operations. Therefore, ratios or analyses for periods before and
after that date will not be comparable.
On February 15, 1994, Trans Financial merged with KCB, the holding company for
The State National Bank, Peoples First Bank, and Farmers Liberty Bank, with
combined assets of approximately $175 million. Under the terms of the merger the
shares of KCB common stock outstanding were converted into 1,374,962 shares of
Trans Financial common stock.
On April 22, 1994, Trans Financial merged with PFS, the holding company for
Peoples Bank and Citizens Federal Savings Bank, located in Rockwood, Tennessee,
with combined assets of approximately $120 million. Under the terms of the
merger the shares of PFS common stock outstanding were converted into 1,302,254
shares of Trans Financial common stock.
On August 31, 1994, Trans Financial merged with FGC Holding Company ("FGC") of
Martin, Kentucky, the holding company for First Guaranty, with approximately
$125 million in assets. Under the terms of the merger, the shares of FGC common
stock outstanding were converted into 1,050,000 shares of common stock of the
company and the shares of FGC preferred stock were retired.
The three mergers in 1994 have been accounted for as poolings of interests
and, accordingly, all financial data has been restated as if the entities were
combined for all periods presented.
The discussion that follows is intended to provide additional insight into the
company's financial condition and results of operations. This discussion should
be read in conjunction with the consolidated financial statements and
accompanying notes presented in Item 1 of Part I of this report.
Results of Operations
Overview
For the three months ended September 30, 1994, the company's net income
increased 7%, from $3.5 million, or $.31 per share, to $3.8 million, or $.34 per
share, as compared to the third quarter of 1993. Results for the third quarter
produced an annualized return on average assets of 0.96% and a return on average
equity of 13.50%, compared with returns of 0.90% and 13.32%, respectively, for
the comparable period of 1993. For the first nine months, net income decreased
from $11.2 million in 1993 to $10.4 million in 1994. Year-to-date earnings for
1993, however, included $1.1 million in gains on sales of securities and a
positive adjustment of $296 thousand for the cumulative effect of adopting
Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes
("SFAS 109"). Securities gains recognized in the first nine months of 1994
totaled $121 thousand. Excluding the after-tax effect of these items from both
periods, year-to-date net income increased 1% from the prior year.
Net Interest Income
Net interest income totaled $17.0 million in the third quarter of 1994,
compared with $15.7 million in the comparable 1993 period - an 8% increase. Net
interest margin for the third quarter also increased from the prior year, to
4.64% from 4.30%, reflecting a more favorable mix of earning assets, primarily
due to loan growth. In addition, recent increases in the prime lending rate have
had a positive impact on net interest margin, since approximately $500 million
of the company's commercial and consumer loans are tied to the prime rate. At
the same time, while rates on earning assets have risen, increases in the
company's funding costs have lagged the increase in loan yields.
<TABLE>
Average Consolidated Balance Sheets and Net Interest Analysis
For the three months ended September 30
Dollars in thousands
<CAPTION>
1994 1993
Average Average Average Average
Balance Interest Rate Balance Interest Rate
<S> <C> <C> <C> <C> <C> <C>
Assets:
Interest-earning assets:
Loans, net of unearned income $1,079,153 $23,684 8.71% $965,795 $20,569 8.45%
Securities 341,485 4,816 5.60% 415,684 5,947 5.68%
Mortgage loans held for sale 8,454 136 6.38% 30,815 581 7.48%
Other interest income 20,402 290 5.64% 37,538 148 1.56%
Total interest-earning assets /
interest income 1,449,494 28,926 7.92% 1,449,832 27,245 7.46%
Non-interest-earning assets:
Cash and due from banks 67,994 56,247
Premises and equipment 36,158 30,946
Other assets 26,332 22,920
Total assets $1,579,978 $1,559,945
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing demand $143,373 891 2.47% $143,631 763 2.11%
Savings deposits 156,326 1,095 2.78% 154,434 1,129 2.90%
Money market accounts 53,729 375 2.77% 40,552 386 3.78%
TransPlus (SuperNOW) 98,711 623 2.50% 98,032 593 2.40%
Certificates of deposit 638,673 6,617 4.11% 657,914 6,798 4.10%
Other time deposits 91,459 1,029 4.46% 101,719 1,100 4.29%
Total interest-bearing deposits 1,182,271 10,630 3.57% 1,196,282 10,769 3.57%
Federal funds purchased
and repurchase agreements 39,954 297 2.95% 32,893 179 2.16%
Long-term debt and
and other borrowings 71,444 1,045 5.80% 47,630 587 4.89%
Total borrowed funds 111,398 1,342 4.78% 80,523 766 3.77%
Total interest-bearing liabilities /
interest expense 1,293,669 11,972 3.67% 1,276,805 11,535 3.58%
Non-interest-bearing liabilities:
Non-interest-bearing deposits 167,830 165,742
Other liabilities 6,574 11,721
Total liabilities 1,468,073 1,454,268
Shareholders' equity 111,905 105,677
Total liabilities
and Shareholders' Equity $1,579,978 $1,559,945
Net interest-rate spread 4.25% 3.88%
Impact of non-interest bearing sources 0.39% 0.42%
Net interest income /
margin on interest-earning assets $16,954 4.64% $15,710 4.30%
</TABLE>
Net interest margin is net interest income divided by average interest-earning
assets. For computational purposes, non-accrual loans are included in interest-
earning assets. Net interest spread is the difference between the average rate
of interest earned on interest-earning assets and the average rate of interest
expensed on interest-bearing liabilities. Average balances are based on daily
balances.
For the first nine months of 1994, net interest income totaled $49.0 million,
compared with $42.7 million in the comparable 1993 period - a 15% increase. The
company's net interest margin for the year-to-date period increased 13 basis
points from the prior year, to 4.48% from 4.35%.
<TABLE>
Average Consolidated Balance Sheets and Net Interest Analysis
For the nine months ended September 30
Dollars in thousands
<CAPTION>
1994 1993
Average Average Average Average
Balance Interest Rate Balance Interest Rate
<S> <C> <C> <C> <C> <C> <C>
Assets:
Interest-earning assets:
Loans, net of unearned income $1,058,221 $67,440 8.52% $862,579 $55,316 8.57%
Securities 363,786 14,593 5.36% 385,308 17,804 6.18%
Mortgage loans held for sale 21,525 1,031 6.40% 27,110 1,439 7.10%
Other interest income 17,876 624 4.67% 37,220 695 2.50%
Total interest-earning assets /
interest income 1,461,408 83,688 7.66% 1,312,217 75,254 7.67%
Non-interest-earning assets:
Cash and due from banks 65,261 51,479
Premises and equipment 34,804 28,972
Other assets 25,918 25,297
Total assets $1,587,391 $1,417,965
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing demand $143,898 $2,582 2.40% $121,003 $2,049 2.26%
Savings deposits 158,291 3,305 2.79% 127,893 2,786 2.91%
Money market accounts 55,982 1,099 2.62% 50,499 1,178 3.12%
TransPlus (SuperNOW) 101,121 1,817 2.40% 97,934 1,898 2.59%
Certificates of deposit 636,841 19,044 4.00% 615,031 19,723 4.29%
Other time deposits 93,714 2,968 4.23% 98,275 3,313 4.51%
Total interest-bearing deposits 1,189,847 30,815 3.46% 1,110,635 30,947 3.73%
Federal funds purchased
and repurchase agreements 36,023 749 2.78% 27,016 498 2.46%
Long-term debt and
and other borrowings 74,789 3,108 5.56% 30,987 1,125 4.85%
Total borrowed funds 110,812 3,857 4.65% 58,003 1,623 3.74%
Total interest-bearing liabilities /
interest expense 1,300,659 34,672 3.56% 1,168,638 32,570 3.73%
Non-interest-bearing liabilities:
Non-interest-bearing deposits 166,718 135,794
Other liabilities 7,870 9,289
Total liabilities 1,475,247 1,313,721
Shareholders' equity 112,144 104,244
Total Liabilities
and Shareholders' Equity $1,587,391 $1,417,965
Net interest-rate spread 4.10% 3.94%
Impact of non-interest bearing sources 0.38% 0.41%
Net interest income /
margin on interest-earning assets $49,016 4.48% $42,684 4.35%
</TABLE>
Analysis of Changes in Net Interest Income
The following tables show changes in interest income and interest expense
resulting from changes in volume and interest rates for the quarter ended
September 30, 1994 as compared to the same period in 1993, and for the nine-
month period ended September 30, 1994 as compared to the first nine months of
1993. Approximately $3.8 million of the increase in net interest income for the
nine-month period represents the effect of the TFB-Pikeville acquisition.
Substantially all of this amount is reflected in the nine-month table as change
due to volume.
Third Quarter 1994 vs. 1993 Increase (decrease)
in interest income and expense
In thousands due to changes in:
Volume Rate Total
Interest-earning assets:
Loans $2,473 $642 $3,115
Securities (1,048) (83) (1,131)
Mortgage loans held for sale (370) (75) (445)
Other interest income (94) 236 142
Total interest-earning assets 961 720 1,681
Interest-bearing liabilities:
Interest-bearing demand (1) 129 128
Savings deposits 14 (48) (34)
Money market accounts 107 (118) (11)
TransPlus (SuperNOW) 4 26 30
Certificates of deposit (199) 18 (181)
Other time deposits (114) 43 (71)
Total interest-bearing deposits (189) 50 (139)
Federal funds purchased
and repurchase agreements 44 74 118
Long-term debt and
and other borrowings 333 125 458
Total borrowed funds 377 199 576
Total interest-bearing liabilities 188 249 437
Increase (decrease)
in net interest income $773 $471 $1,244
The change in interest due to both rate and volume has been allocated to changes
in average volume and changes in average rates in proportion to the relationship
of absolute dollar amounts of change in each.
Nine Months 1994 vs. 1993 Increase (decrease)
in interest income and expense
In thousands due to changes in:
Volume Rate Total
Interest-earning assets:
Loans $12,470 $(346) $12,124
Securities (955) (2,256) (3,211)
Mortgage loans held for sale (277) (131) (408)
Interest-bearing deposits with banks (479) 408 (71)
Total interest-earning assets 10,759 (2,325) 8,434
Interest-bearing liabilities:
Interest-bearing demand 405 128 533
Savings deposits 639 (120) 519
Money market accounts 120 (199) (79)
TransPlus (SuperNOW) 60 (141) (81)
Certificates of deposit 683 (1,362) (679)
Other time deposits (150) (195) (345)
Total interest-bearing deposits 1,757 (1,889) (132)
Federal funds purchased
and repurchase agreements 181 70 251
Long-term debt and
and other borrowings 1,799 184 1,983
Total borrowed funds 1,980 254 2,234
Total interest-bearing liabilities 3,737 (1,635) 2,102
Increase (decrease)
in net interest income $7,022 $(690) $6,332
Provision for Loan Losses
The provision for loan losses was $555 thousand (.20% of average loans, on an
annualized basis, excluding mortgage loans held for sale) in the third quarter
of 1994, compared with $786 thousand (.32% of average loans) in the third
quarter of 1993. Net loan charge-offs were $852 thousand (.31% of average loans)
for the three months ended September 30, 1994, and $615 thousand (.25% of
average loans) for the comparable period in 1993.
For the first nine months of 1994, the provision for loan losses was $1.567
million (.20% of average loans), compared with $2.206 million (.34% of average
loans) in the first nine months of 1993. Net loan charge-offs were $1.532
million (.19% of average loans) for the first nine months of 1994, compared with
$1.545 million (.24% of average loans) for the comparable 1993 period.
The provision for loan losses and the level of the allowance for loan losses
reflect the quality of the loan portfolio and result from management's
evaluation of the risks in the loan portfolio. Further discussion on loan
quality and the allowance for loan losses is included in the Asset Quality
discussion later in this review.
Non-Interest Income
Non-interest income for the first nine months of 1994 decreased $122 thousand
over the first nine months of 1993. For the third quarter of 1994, non-interest
income increased $16 thousand over the comparable quarter of 1993. These changes
were primarily due to (in thousands):
Increase (decrease) Nine Third
Months Quarter
- The TFB-Pikeville acquisition $661 $ -
Excluding TFB-Pikeville from the first half of 1994:
- Lower gains on sales of securities (980) (10)
- Lower gains on sales of mortgage loans (810) (365)
- Increased service charges on deposit accounts 546 225
- Increase in loan servicing fees 366 236
- Increase (decrease)in brokerage fees 167 (22)
- Increase in trust fees 92 15
- All other, net (164) (63)
Net increase (decrease) in non-interest income $(122) $ 16
Non-Interest Expenses
Non-interest expenses increased $7.0 million for the first nine months of
1994, compared to the first nine months of 1993. For the third quarter of 1994,
non-interest expenses were up $1.0 million over the third quarter of 1993. These
changes were primarily due to (in thousands):
Increase (decrease) Nine Third
Months Quarter
- The TFB-Pikeville acquisition $3,128 $ -
Excluding TFB-Pikeville from the first half of 1994:
- Increased compensation and benefits 1,526 338
- Increase in postage, printing
and supplies expenses 527 200
- Increase in professional fees 261 35
- Increase (decrease) in occupancy,
furniture & equipment expenses 423 193
- Increase in deposit insurance expense 202 12
- All other, net 928 233
Net increase in non-interest expense $6,995 $1,011
Income Taxes
The company adopted effective January 1, 1993, SFAS 109, resulting in a $296
thousand increase in net income in the first quarter of that year. Income tax
expense totaled $5.112 million in the first nine months of 1994, compared with
$4.724 million in the comparable 1993 period, excluding the effect of adopting
Statement 109. These represent effective tax rates of 33.0% and 30.3%,
respectively.
Balance Sheet Review
Overview
Assets at September 30, 1994, totaled $1.596 billion, compared with $1.597
billion at December 31, 1993, and $1.597 billion a year ago. Average total
assets for the third quarter increased $20 million (1%) over the past year to
$1.580 billion. Average interest-earning assets remained flat at $1.449 billion.
Loans
Total loans, net of unearned income, averaged $1.079 billion in the third
quarter of 1994, excluding mortgage loans held for sale of $8 million. For the
comparable period in 1993, loans averaged $966 million, excluding the $31
million of mortgage loans held for sale. The company continues to experience
strong loan growth throughout its markets, with particular strength in middle
market commercial lending products. At September 30, 1994, loans net of unearned
income (excluding mortgage loans held for sale) totaled $1.102 billion, compared
with $1.007 billion at December 31, 1993, and $990 million a year ago.
Asset Quality
With respect to asset quality, management considers three categories of assets
to merit additional scrutiny. These categories include (a) loans which are
currently nonperforming, (b) other real estate and loans classified as
in-substance foreclosures (ISF), and (c) loans which are currently performing
but which management believes require special attention.
Nonperforming loans, which include non-accrual loans, accruing loans past due
over 90 days and restructured loans, totaled $9.9 million at September 30, 1994,
virtually unchanged from December 31, 1993, and down $232 thousand from the end
of the third quarter of 1993. The ratio of nonperforming loans to total loans
(net of unearned income) was .90% at September 30, 1994, compared with .99% at
the end of 1993 and 1.02% a year ago. Nonperforming assets, which include
nonperforming loans, other real estate, and loans classified as in-substance
foreclosures, totaled $15.6 million at the end of 1994's third quarter. The
ratio of nonperforming loans and other real estate to total assets decreased
from 1.17% a year ago to .98% at September 30, 1994.
The following table presents information concerning nonperforming assets,
including nonaccrual and restructured loans. Management classifies a loan as
nonaccrual when principal or interest is past due 90 days or more and the loan
is not adequately collateralized and in the process of collection, or when, in
the opinion of management, principal or interest is not likely to be paid in
accordance with the terms of the obligation. Consumer installment loans are
charged off after 120 days of delinquency unless adequately secured and in the
process of collection. Loans are not reclassified as accruing until principal
and interest payments are brought current and future payments appear certain.
Loans are categorized as restructured if the original interest rate, repayment
terms, or both were restructured due to a deterioration in the financial
condition of the borrower. However, restructured loans that demonstrate
performance under restructured terms and that yield a market rate of interest
are removed from restructured status in the year following the restructure.
Nonperforming Assets
Dollars in thousands
September 30 June 30 December 31 September 30
1994 1994 1993 1993
Nonaccrual loans $6,839 $6,338 $5,926 $7,997
Accruing loans which are
contractually past due
90 days or more 3,003 4,036 2,377 2,076
Restructured loans 34 38 1,591 35
Total nonperforming and
restructured loans 9,876 10,412 9,894 10,108
Other real estate and
in-substance foreclosures 5,156 5,909 5,869 8,421
Other foreclosed property 531 63 113 139
Total nonperforming and
restructured loans
and foreclosed property $15,563 $16,384 $15,876 $18,668
Nonperforming and restructured loans
as a percentage of net loans 0.90% 0.99% 0.98% 1.02%
Nonperforming and restructured loans
and other real estate as a
percentage of total assets 0.98% 1.02% 0.99% 1.17%
Two credit relationships account for $2.8 million, or 42%, of the September
30, 1994, nonaccrual balance. The first of these loans is to a manufacturing
concern and is secured by commercial real estate and equipment. The loan has
been on nonaccrual since 1992. During 1993, $775,000 of the loan balance was
charged off, reducing the loan to $1.5 million. In the second quarter of 1994,
the borrower resumed making partial principal payments and, at September 30,
1994, the loan had a balance of $1,450,000. Appropriate amounts have been
specifically allocated in the evaluation of the allowance for loan losses for
this credit exposure. The second loan was acquired in the TFB-Pikeville
acquisition. It has an outstanding balance of $1,394,000 and is secured by
commercial real estate. The borrower filed for Chapter 11 bankruptcy protection
during the third quarter of 1993 and the property is being liquidated.
Other real estate and in-substance foreclosures at September 30, 1994,
includes two properties with an aggregate book value of $2.9 million, or 56% of
the outstanding balance.
The first property was acquired through foreclosure in 1986 with an
unsatisfied loan balance at the time of $1.8 million. In order to facilitate the
disposal of the property, the company entered into a joint venture with a real
estate developer and developed the land for industrial and other commercial use.
In the third quarter of 1993, the company dissolved the joint venture and
retained title to the property. Several parcels have been sold at a profit. The
book value of the property at September 30, 1994, including development costs,
was $1.4 million. Based on a recent appraisal of the property and previous sales
experience, management does not anticipate any significant losses to be incurred
on disposition.
The second property included in other real estate and in-substance
foreclosures relates to a wood products manufacturing facility. Based on an
appraisal of the property, the company wrote down its carrying value by $210,000
in the third quarter of 1994, and it is currently carried at $1.5 million. The
facility was closed in 1992 and is presently listed for sale with a commercial
real estate firm. Management is of the opinion that no significant additional
loss will be incurred in the disposal of the collateral.
As of September 30, 1994, the company had $8.6 million of loans which were not
included in the past due, nonaccrual or restructured categories, but for which
known information about possible credit problems caused management to have
serious doubts as to the ability of the borrowers to comply with the present
loan repayment terms. Based on management's evaluation, including current market
conditions, cash flow generated and recent appraisals, management currently
anticipates no significant losses will be incurred in connection with these
loans. These loans are subject to continuing management attention and are
considered by management in determining the level of the allowance for loan
losses.
The allowance for loan losses is established through a provision for loan
losses charged to expense. The allowance represents an amount which, in
management's judgment, will be adequate to absorb probable losses on existing
loans. At September 30, 1994, the allowance was $12.5 million, virtually
unchanged from December 31, 1993, and down slightly from the $12.7 million at
September 30, 1993. The allowance as a percentage of nonperforming loans - an
indication of the relative ability to cover problem loans with existing reserves
- - - increased slightly from 126% at September 30, 1993 and at year-end 1993 to
127% at September 30, 1994. The ratio of the allowance for loan losses to total
loans (excluding mortgage loans held for sale) at September 30, 1994, was 1.14%,
compared with 1.24% at December 31, 1993, and 1.28% at the end of 1993's third
quarter.
The adequacy of the allowance for loan losses is determined on an ongoing
basis through analysis of the overall quality of the loan portfolio, historical
loan loss experience, loan delinquency trends and the economic conditions within
the company's market area. Additional allocations from the allowance are based
on specifically identified potential loss situations. These potential loss
situations are identified by account officers' evaluations of their own
portfolios as well as by an independent loan review function.
Securities, Federal Funds Sold and Resale Agreements
Securities, including those classified as held to maturity and available for
sale, decreased from $404 million at September 30, 1993, to $386 million at
year-end 1993, and $333 million at September 30, 1994.
Effective December 31, 1993, the company adopted Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in Debt and
Equity Securities. Accordingly, all debt securities in which the company does
not have the ability or management does not have the positive intent to hold to
maturity are classified as securities available for sale and are carried at
market value. All equity securities are classified as available for sale
beginning December 31, 1993. Unrealized gains and losses on securities available
for sale are reported as a separate component of shareholders' equity (net of
tax).
Federal funds sold and securities purchased under agreements to resell
decreased to $2.5 million at September 30, 1994, from $32.8 million at December
31, 1993, and $43.3 million a year ago. The decline in the balance of these
short-term assets, as well as the decline in the size of the securities
portfolio, is the result of the strong loan demand mentioned above, coupled with
a decrease in the level of deposits
Deposits and Borrowed Funds
Total deposits averaged $1.350 billion in the third quarter of 1994, a
decrease of $12 million (1%) over the comparable 1993 period. Interest-bearing
accounts decreased $14 million (1%), while non-interest-bearing accounts
increased $2 million (1%) over the past year.
Long-term debt averaged $40 million in the third quarter of 1994, an increase
of $13 million from the third quarter of 1993. This increase is due to the
issuance of $33 million of 7.25% Subordinated Notes in a public offering toward
the end of the third quarter of 1993. Average short-term borrowings, including
federal funds purchased and repurchases, increased $17 million period to period,
in order to fund additional loan growth
Capital Resources and Liquidity
On September 16, 1993, the company issued $33 million of 7.25% Subordinated
Notes on September 16, 1993, in a public offering. The net proceeds were
approximately $32 million, of which $20 million was used to repay debt incurred
and preferred stock acquired in the TFB-Pikeville, KCB and FGC transactions, $5
million was contributed to the banks as capital, and $7 million was used for
general corporate purposes.
The company's capital ratios at September 30, 1994, December 31, 1993, and
September 30, 1993 (calculated in accordance with regulatory guidelines) were as
follows:
September 30, December 31, September 30,
1994 1993 1993
Tier 1 risk based 9.42% 9.44% 9.53%
Regulatory minimum 4.00 4.00 4.00
Total risk based 13.34 13.58 13.87
Regulatory minimum 8.00 8.00 8.00
Leverage 6.88 6.52 6.32
Regulatory minimum 3.00 3.00 3.00
Capital ratios of all of the company's subsidiaries are in excess of
applicable minimum regulatory capital ratio requirements at September 30, 1994.
In general, the company relies upon net inflows of cash from financing
activities, supplemented by net inflows of cash from operating activities, to
provide cash used in its investing activities. As is typical of most banking
companies, significant financing activities include issuance of common stock,
deposit gathering, use of short-term borrowing facilities, such as federal funds
purchased and repurchase agreements, and the issuance of long-term debt. The
company's primary investing activities include purchases of securities and loan
originations, offset by maturities and sales of securities, and loan payments.
Asset/Liability Management
A primary objective of asset/liability management is to manage the company's
exposure to interest-rate risk. The company's Asset/Liability Committee monitors
and adjusts exposure to interest rates in response to economic conditions and
the flow of loans and deposits, provides oversight to the asset/liability
management process and approves policy guidelines. Further, asset/liability
activity is reviewed by the board of directors.
An earnings simulation model is used to monitor and evaluate the exposure and
impact of changing interest rates on earnings. This dynamic model captures all
interest-earning assets, interest-bearing liabilities and off-balance-sheet
financial instruments. The model combines the various factors affecting rate
sensitivity into an earnings outlook that incorporates management's view of the
most likely interest rate environment for the next 24 months. Rate sensitivity
is determined by assessing the impact on net interest income in multiple rising
and falling interest-rate scenarios. The model is updated at least monthly and
more often if necessary.
The simulation model provides a more dynamic assessment of interest-rate
sensitivity than does a portrayal of the static interest-rate sensitivity gap,
compiled as of a point in time. Static gap analysis does not reflect the
multiple effects of interest rate movements on the whole range of assets,
liabilities, and off-balance-sheet financial instruments. Moreover, in today's
financial environment, which includes a complex array of both on- and off-
balance-sheet financial instruments, static gap analysis does not provide the
most comprehensive and informative disclosures about interest-rate risks.
The model presents a sharper and more complete picture of the company's
interest-rate sensitivity, which allows management to emphasize stable net
interest income throughout rate cycles, with the result that intermediate and
longer-term implications take precedence over short-term profitability.
Because it includes significant variables identified as being affected by
interest rates, the earnings simulation model provides better information to
management. For example, among the factors the model captures which static gap
analysis does not are: 1) rate-of-change differentials, such as federal funds
rates versus savings account rates; 2) maturity effects, such as calls on
securities; 3) rate-barrier effects, such as caps or floors on loans; 4)
changing balance sheet levels, 5) floating-rate loans that may be tied or
related to prime, treasury notes, CD rates or other rate indices, which do not
necessarily move identically as rates change; 6) leads and lags that occur as
rates move away from current levels; and 7) the effects of prepayments on
various fixed rate assets such as residential mortgages, mortgage-backed
securities, collateralized mortgage obligations, and consumer loans. These, and
certain other effects, are evaluated to develop multiple scenarios from which
the sensitivity of earnings to changes in interest rates is determined. It
should be noted, however, the model does not take into account future actions
that could be undertaken to reduce this impact if there were a change in
management's interest rate expectations or the actual level of interest rates.
The model combines the pivotal factors that affect interest-rate sensitivity
into a comprehensive outlook for the next 12 months. In developing multiple rate
scenarios, an econometric model is employed to forecast key rates, based on the
cyclical nature of those rates, with a probability assigned to potential future
events might affect those rates.
The following illustrates the effects on net interest income of varying rate
environments compared to the rate environment of September 1994 (the "flat"
scenario). For example, in the scenario considered "most likely" the company
assumed that the federal funds rate and prime rate would be 5.00% and 8.00%,
respectively, at the end of the 12-month period ending September 1995, and
would be slightly higher for seven of the 12 months in that period. Following is
a summary of the assumptions used in the model at the end of the third quarter
of 1994, along with the resultant projected impact on net interest income.
Flat Most Likely Rising Declining
Assumptions:
Federal funds rate, September 1995 4.75% 5.00% 8.00% 3.75%
Prime rate, September 1995 7.75% 8.00% 10.50% 7.00%
Increase (decrease) in net interest income -0-% 5.71% 4.19% (0.42)%
<PAGE>
Part II - Other Information
Item 1. Legal Proceedings
In the ordinary course of operations, the company and its subsidiaries are
defendants in various legal proceedings. In the opinion of management, there is
no proceeding pending or, to the knowledge of management, threatened in which an
adverse decision could result in a material adverse change in the business or
consolidated financial position of the company.
Item 2 through 5.
No information is required to be filed for these items.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed on the Exhibit Index on pages 21 through 22 of this Form
10-Q are filed as a part of this report.
(b) Reports on Form 8-K
The registrant filed on September 15, 1994 (as amended on November 14,
1994), a report on Form 8-K dated August 31, 1994 reporting the merger of
FGC Holding Company ("FGC") with and into the registrant, and the issuance
of 1,050,000 shares of common stock of the registrant, pursuant to an
Agreement and Plan of Reorganization and Plan of Merger dated January 28,
1994.
The following consolidated financial statements of FGC, notes related
thereto and independent auditors' report thereon were filed as a part of the
report:
1. Independent Auditors' Report;
2. Consolidated Balance Sheets as of December 31, 1993 and 1992;
3. Consolidated Statements of Income for the years ended December 31, 1993
and 1992;
4. Consolidated Statements of Changes in Stockholders' Equity for the
years ended December 31, 1993 and 1992;
5. Consolidated Statements of Cash Flows for the years ended December 31,
1993 and 1992; and
6. Notes to Consolidated Financial Statements.
The following unaudited consolidated financial statements of FGC were
filed as a part of the report:
1. Consolidated Balance Sheet as of June 30, 1994 (unaudited); and
2. Consolidated Statement of Income for the six months ended June 30, 1994
(unaudited).
3. Consolidated Statement of Cash Flows for the six months ended June 30,
1994;
The following unaudited pro forma consolidated financial statements of
Trans Financial Bancorp, Inc. and notes related thereto were filed as a part
of the report:
1. Pro Forma Balance Sheet as of June 30, 1994 (unaudited);
2. Pro Forma Income Statement for the six months ended June 30, 1994
(unaudited);
3. Pro Forma Income Statement for the year ended December 31, 1993
(unaudited);
4. Pro Forma Income Statement for the year ended December 31, 1992
(unaudited);
5. Pro Forma Income Statement for the year ended December 31, 1991
(unaudited); and
6. Notes to Pro Forma Financial Statements (unaudited).
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Trans Financial Bancorp, Inc.
(Registrant)
Principal Executive Officer:
Date: November 14, 1994 /s/ Douglas M. Lester
Douglas M. Lester
Chairman of the Board, President
and Chief Executive Officer
Principal Financial Officer:
Date: November 14, 1994 /s/ Vince A. Berta
Vince A. Berta
Executive Vice President
and Chief Financial Officer
<PAGE>
Exhibits
Sequentially
Numbered Pages
4(a) Restated Articles of Incorporation of the registrant are incorporated
by reference to Exhibit 3 of the registrant's report on Form 10-Q for
the quarter ended March 31, 1992.
4(b) Bylaws of the registrant, as amended, are incorporated by reference
to Exhibit 4(b) of the registrant's report on Form 10-K for the year
ended December 31, 1993.
4(c) Rights Agreement dated January 20, 1992 between Manufacturers Hanover
Trust Company and Trans Financial Bancorp, Inc. is incorporated by
reference to Exhibit 1 to the registrant's report on Form 8-K dated
January 24, 1992.
4(d) Form of Indenture (including Form of Subordinated Note) dated as of
September 1, 1993, between the registrant and First Tennessee Bank
National Association as Trustee, relating to the issuance of 7.25%
Subordinated Notes due 2003, is incorporated by reference to Exhibit
4 of Registration Statement on Form S-2 of the registrant (File
No. 33-67686).
10(a) Trans Financial Bancorp, Inc. 1987 Stock Option Plan is incorporated
by reference to Exhibit 4(a) of Registration Statement on Form S-8
of the registrant (File No. 33-43046).*
10(b) Trans Financial Bancorp, Inc. 1990 Stock Option Plan is incorporated
by reference to Exhibit 10(d) of the registrant's Report on Form
10-K for the year ended December 31, 1990.*
10(c) Trans Financial Bancorp, Inc. 1992 Stock Option Plan is incorporated
by reference to Exhibit 28 of the registrant's Report on Form 10-Q
for the quarter ended March 31, 1992.*
10(d) Trans Financial Bancorp, Inc. 1994 Stock Option Plan is incorporated
by reference to the registrant's Proxy Statement dated March 18,
1994, for the April 25, 1994 Annual Meeting of Shareholders.*
10(e) Employment Agreement between Douglas M. Lester and Trans Financial
Bancorp, Inc. is incorporated by reference to Exhibit 10(c) of the
registrant's Report on Form 10-K for the year ended December 31,
1990.*
10(f) Employment Agreement between Harold T. Matthews and Trans Financial
Bank, National Association is incorporated by reference to Exhibit
10(e) of the registrant's Report on Form 10-K for the year ended
December 31, 1992.*
10(g) Description of the registrant's Performance Incentive Plan is
incorporated by reference to Exhibit 10(f) of the registrant's
Report on Form 10-K for the year ended December 31, 1992.*
10(h) Form of Deferred Compensation Agreement between registrant and
certain officers of the registrant is incorporated by reference to
Exhibit 10(g) of the registrant's Report on Form 10-K for the year
ended December 31, 1992.*
10(i) Trans Financial Bancorp, Inc. Dividend Reinvestment and Stock
Purchase Plan is incorporated by reference to Registration Statement
on Form S-3 of the registrant dated May 15, 1991 (File No.
33-40606).
<PAGE>
10(j) Warrant dated as of February 13, 1992 between Morgan Keegan &
Company, Inc. and Trans Financial Bancorp, Inc. incorporated by
reference to Exhibit 10(m) of Registration Statement on Form S-2 of
the registrant (File No. 33-45483).
10(k) Share Exchange Agreement dated March 25, 1993 between Trans
Financial Bancorp, Inc. and Trans Kentucky Bancorp is incorporated
by reference to Exhibit 1 of the registrant's Report on Form 8-K
dated April 8, 1993.
10(l) Loan Agreement dated as of July 6, 1993 between First Tennessee Bank
National Association and Trans Financial Bancorp, Inc. is
incorporated by reference to Exhibit 10(p) to the Registration
Statement on Form S-2 of the registrant (File No. 33-67686).
10(m) Underwriting Agreement dated as of September 9, 1993 among Morgan
Keegan & Company, Inc., J.C. Bradford and Company, and Trans
Financial Bancorp, Inc. incorporated by reference to Exhibit (1) to
Registration Statement on Form S-2 of the registrant (File No.
33-67686).
10(n) Subordinated Note dated as of September 16, 1993, by Trans Financial
Bancorp, Inc. is incorporated by reference to Exhibit 1 to
Registration Statement on Form S-2 of the registrant (File No.
33-67686).
10(o) Agreement and Plan of Reorganization dated November 9, 1993, as
amended January 6, 1994, among Trans Financial Bancorp, Inc., Trans
Financial Acquisition Corporation and Kentucky Community Bancorp,
Inc. is incorporated by reference to Exhibit 2 to the Registration
Statement on Form S-4 of the registrant (File No. 33-51575).
10(p) Agreement and Plan of Reorganization and Plan of Merger dated
December 27, 1993 between Trans Financial Bancorp, Inc. and Peoples
Financial Services, Inc. is incorporated by reference to Exhibit 2
of the registrant's Report on Form 8-K dated January 10, 1994.
10(q) Agreement and Plan of Reorganization and Plan of Merger dated
January 28, 1994 between Trans Financial Bancorp, Inc. and FGC
Holding Company is incorporated by reference to Exhibits 2(a) and
2(b) of the registrant's Report on Form 8-K dated February 18, 1994.
11 Statement Regarding Computation of Per Share Earnings Page 23
27 Financial DataSchedule (filed in electronic format only)
*Denotes a management contract or compensatory plan or arrangement of the
registrant required to be filed as an exhibit pursuant to Item 601 (10) (iii)
of Regulation S-K.
<PAGE>
Exhibit 11.
Statement Regarding Computation of Per Share Earnings
In thousands, except per share amounts
Three Months Nine Months
For the periods ended September 30 1994 1993 1994 1993
Primary earnings per common share: (1)
Average common shares outstanding 11,180 11,129 11,168 11,118
Common stock equivalents 89 119 86 130
Average shares and share
equivalents 11,269 11,248 11,254 11,248
Income before cumulative effect
of change in accounting principle $3,807 $3,549 $10,369 $10,898
Primary earnings per common share
before cumulative effect of change
in accounting principle $0.34 $0.32 $0.92 $0.97
Net income $3,807 $3,549 $10,369 $11,194
Less preferred stock dividends (14) (21) (54) (61)
Income available for common stock $3,793 $3,528 $10,315 $11,133
Primary net income per share $0.34 $0.31 $0.92 $0.99
Fully-diluted earnings per common share: (1)
Average common shares outstanding 11,180 11,129 11,168 11,118
Common stock equivalents 91 119 91 130
Average shares and share
equivalents 11,271 11,248 11,259 11,248
Income before cumulative effect
of change in accounting principle $3,807 $3,549 $10,369 $10,898
Fully-diluted earnings per common share
before cumulative effect of change
in accounting principle $0.34 $0.32 $0.92 $0.97
Net income $3,807 $3,549 $10,369 $11,194
Less preferred stock dividends (14) (21) (54) (61)
Income available for common stock $3,793 $3,528 $10,315 $11,133
Fully-diluted net income per share $0.34 $0.31 $0.92 $0.99
(1) All common share and per share data have been adjusted to reflect the 4-
for-3 stock split effected February 1, 1993, and shares issued in
acquisitions accounted for using the pooling-of-interests method of
accounting.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET, CONSOLIDATED INCOME STATEMENT AND RELATED GUIDE 3
DISCLOSURES OF THE REGISTRANT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 9-MOS QTR-3
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1994
<PERIOD-END> SEP-30-1994 SEP-30-1994
<CASH> 83037 83037
<INT-BEARING-DEPOSITS> 197 197
<FED-FUNDS-SOLD> 2500 2500
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 245129 245129
<INVESTMENTS-CARRYING> 87380 87380
<INVESTMENTS-MARKET> 85741 85741
<LOANS> 1106868 1106868
<ALLOWANCE> 12539 12539
<TOTAL-ASSETS> 1595871 1595871
<DEPOSITS> 1345471 1345471
<SHORT-TERM> 90592 90592
<LIABILITIES-OTHER> 11355 11355
<LONG-TERM> 37541 37541
<COMMON> 20982 20982
0 0
0 0
<OTHER-SE> 89930 89930
<TOTAL-LIABILITIES-AND-EQUITY> 1595871 1595871
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<LOAN-LOSSES> 1567 555
<SECURITIES-GAINS> 121 33
<EXPENSE-OTHER> 44197 14996
<INCOME-PRETAX> 15481 5677
<INCOME-PRE-EXTRAORDINARY> 10369 3807
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 10369 3807
<EPS-PRIMARY> .92 .34
<EPS-DILUTED> .92 .34
<YIELD-ACTUAL> 4.48 4.64
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<LOANS-PAST> 3003 3003
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<ALLOWANCE-CLOSE> 12539 12539
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<ALLOWANCE-FOREIGN> 0 0
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