<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended September 30, 1998
Commission file number 0-25422
PAB BANKSHARES, INC.
(Exact name of Registrant
as specified in its charter)
Georgia 58-1473302
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3102 North Oak Street Extension
Valdosta, Georgia 31602
(Address of principal executive offices)
(912) 241-2775
(Registrant's telephone number)
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 at
September 30, 1998 was 7,372,635 shares of common stock.
<PAGE> 2
PAB BANKSHARES, INC.
FORM 10-Q
TABLE OF CONTENTS
-----------------
PAGE
----
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS:
CONSOLIDATED BALANCE SHEETS - SEPTEMBER 30, 1998
(UNAUDITED) AND DECEMBER 31, 1997 . . . . . . . . . . . . . 3
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) -
THREE MONTH AND NINE MONTH PERIODS ENDED
SEPTEMBER 30, 1998 AND 1997 . . . . . . . . . . . . . . . . 4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) -
THREE MONTH AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1998
AND 1997 . . . . . . . . . . . . . . . . . . . . . . . . . . 5
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED) - NINE MONTH PERIODS ENDED SEPTEMBER 30,
1998 AND 1997 . . . . . . . . . . . . . . . . . . . . . . . 6
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) -
NINE MONTH PERIODS ENDED SEPTEMBER 30, 1998 AND 1997 . . . . 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . 10
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . 17
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . 18
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS . . . . . . . . . . 18
ITEM 3. DEFAULTS UPON SENIOR SECURITIES . . . . . . . . . . . . . . . 18
ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS . . . . . . . . . . . . . . . . . . . . 18
ITEM 5. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . 18
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . . . . 18
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 19
INDEX OF EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
<PAGE> 3
<TABLE>
PAB BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- ------------
(Unaudited)
<S> <C> <C>
Cash and Cash Equivalents:
Cash and due from banks $ 21,972,902 22,239,560
Interest-bearing deposits in other banks 1,678,756 3,247,147
Federal funds sold and securities purchased under
agreement to resell 12,710,000 14,568,204
------------ ------------
Total Cash and Cash Equivalents 36,361,658 40,054,911
Time Deposits 398,000 3,398,000
Investment Securities available-for-sale, at fair value 62,881,036 72,299,716
Investment in Unconsolidated Subsidiary 171,240 66,749
Loans, Net of Allowance for Loan Losses ($3,736,116 - 1998; $3,536,806 - 1997)
and Unearned Interest 301,257,988 268,493,383
Bank Premises and Equipment 10,721,963 9,392,509
Property Acquired in Settlement of Loans and Other Real Estate Owned:
Land and building of former banking offices 332,619 315,277
Land and building held for lease 594,589 -0-
Property acquired in settlement of loans 576,906 419,036
Accrued Interest Receivable 5,003,913 4,421,661
Cash Value of Life Insurance 2,863,566 2,783,838
Goodwill and other intangible assets 2,802,928 3,070,426
Other Assets 1,126,247 871,668
------------- ------------
Total Assets $ 425,092,653 405,587,174
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Deposits:
Demand $ 53,581,946 60,218,277
NOW 77,024,951 68,994,844
Savings 23,270,981 22,139,241
Time, $100,000 and over 52,156,539 52,166,532
Other time 129,457,176 127,457,360
------------ ------------
335,491,593 330,976,254
Federal funds purchased and securities sold under agreement to repurchase 3,636,300 -0-
Advances from Federal Home Loan Bank 35,129,947 29,168,166
Note payable 2,047,500 2,184,000
Other borrowed funds 3,598,330 1,004,854
Accrued Interest Payable 972,313 985,074
Advance Payments by Borrowers for Taxes and Insurance 111,674 180,322
Dividends Payable 478,084 268,466
Other Liabilities 916,929 1,507,497
------------ ------------
Total Liabilities 382,382,670 366,274,633
------------ ------------
Stockholders' Equity:
Common stock, no par value, 15,000,000 shares authorized,
7,372,635 shares (1997 - 7,527,487) issued and 7,372,635
shares (1997 - 7,363,175) outstanding 1,217,065 1,263,745
Preferred stock, no par value, 1,500,000 shares authorized,
no shares issued or outstanding -0- -0-
Additional paid in capital 19,736,038 20,543,122
Retained earnings 21,492,058 18,383,396
Accumulated other comprehensive income 264,822 105,467
------------ ------------
42,709,983 40,295,730
Treasury stock, at cost (1997 - 164,312 shares) -0- (983,189)
------------ ------------
42,709,983 39,312,541
------------ ------------
Total Liabilities and Stockholders' Equity $425,092,653 405,587,174
============ ============
</TABLE>
<PAGE> 4
<TABLE>
PAB BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------- --------------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans $ 7,372,080 6,581,529 21,052,501 18,751,924
Interest on investment securities:
Taxable 940,788 1,106,859 3,113,089 3,466,906
Tax exempt 44,010 36,303 132,635 101,021
Interest on federal funds sold 282,471 90,087 1,033,115 265,546
Interest on deposits in banks 39,918 55,841 151,439 149,296
------------ ----------- ------------ ------------
Total 8,679,267 7,870,619 25,482,779 22,734,693
------------ ----------- ------------ ------------
Interest Expense:
Interest on deposits 3,462,891 3,256,740 10,302,575 9,518,767
Interest on federal funds purchased 478 (933) 5,562 24,057
Interest on notes and mortgages 38,748 59,510 117,028 185,040
Interest on other borrowed funds 9,804 6,234 75,291 14,623
Interest on advances from Federal Home Loan Bank 610,006 344,250 1,687,088 874,893
------------ ------------ ------------ ------------
Total 4,121,927 3,665,801 12,187,544 10,617,380
------------ ------------ ------------ ------------
Net Interest Income 4,557,340 4,204,818 13,295,235 12,117,313
Provision for Loan Losses 163,876 219,800 598,159 485,800
------------ ------------ ------------ ------------
Net Interest Income After Provision for Loan Losses 4,393,464 3,985,018 12,697,076 11,631,513
------------ ------------ ------------ ------------
Other Income:
Service charges on deposit accounts 663,089 599,026 1,948,273 1,747,391
Insurance commissions 67,500 35,728 157,427 91,613
Equity in earnings of unconsolidated subsidiary 93,941 26,506 304,491 186,648
Fees on mortgage loans originated for sale 86,231 3,591 229,385 5,150
Gain (Loss) on sale of loans -0- 4,960 1,989 23,262
Gain (Loss) on sale of assets -0- -0- 102,131 -0-
Gain (Loss) on sale of real estate owned -0- 1,285 (7,525) 2,154
Other income 295,909 171,674 827,013 558,138
Securities gains (losses) (5,787) 4,310 23,201 (20,609)
------------ ------------ ------------ ------------
Total 1,200,883 847,080 3,586,385 2,593,747
------------ ------------ ------------ ------------
Other Expenses:
Compensation 1,441,347 1,288,895 4,028,049 3,626,826
Other personnel expenses 338,564 281,790 974,886 832,143
Occupancy expense of bank premises 148,677 146,054 450,860 447,433
Furniture and equipment expense 299,938 301,484 820,506 770,764
Federal deposit insurance 21,265 21,922 51,558 44,436
Postage and courier services 46,191 57,800 205,184 211,080
Supplies 100,963 99,415 316,520 301,399
Amortization 89,166 89,166 267,498 267,498
Other operating expenses 859,848 527,813 2,326,052 1,598,002
------------ ------------ ------------ ------------
Total 3,345,959 2,814,339 9,441,113 8,099,581
------------ ------------ ------------ ------------
Income Before Income Taxes 2,248,388 2,017,759 6,842,348 6,125,679
Income Taxes 775,045 741,990 2,332,849 2,141,325
------------ ------------ ------------ ------------
Net Income $ 1,473,343 1,275,769 4,509,499 3,984,354
============ ============ ============ ============
Earnings Per Share:
Basic $ .20 .17 .61 .54
============ ============ ============ ============
Diluted $ .19 .17 .60 .54
============ ============ ============ ============
Weighted Average Shares:
Basic 7,372,687 7,363,831 7,371,480 7,354,764
============ ============ ============ ============
Diluted 7,439,661 7,449,398 7,462,807 7,430,471
============ ============ ============ ============
</TABLE>
<PAGE> 5
<TABLE>
PAB BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
-----------------------------------------------
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------------------- ------------------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income $1,473,343 1,275,769 4,509,499 3,984,354
---------- ---------- ---------- ----------
Other comprehensive income, net of tax:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during
period 161,014 208,672 173,800 52,171
Less: reclassification adjustment for (gains)
losses included in net income 3,603 (2,683) (14,445) 11,677
---------- ---------- ---------- ----------
Other comprehensive income 164,617 205,989 159,355 63,848
---------- ---------- ---------- ----------
Comprehensive Income $1,637,960 1,481,758 4,668,854 4,048,202
========== ========== ========== ==========
</TABLE>
<PAGE> 6
<TABLE>
PAB BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
---------------------------------------------
<CAPTION>
ACCUMULATED
OTHER
ADDITIONAL COMPREHENSIVE
COMMON PREFERRED PAID IN RETAINED INCOME TREASURY
STOCK STOCK CAPITAL EARNINGS (LOSS) STOCK TOTAL
---------- ---------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, December 31,
1996, as previously
reported $1,263,745 -0- 15,609,717 11,246,210 21,388 1,074,547 27,066,513
Adjustment for pooling
of interest:
Issuance of
1,711,249 shares
to shareholders of
Investors Financial
Corp. -0- -0- 4,608,542 3,041,056 (100,484) -0- 7,549,114
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balances, December 31,
1996, as restated 1,263,745 -0- 20,218,259 14,287,266 (79,096) 1,074,547 34,615,627
Issuance of 26,150 shares
at $10.33 average
through dividend
reinvestment plan -0- -0- 270,062 -0- -0- -0- 270,062
Issuance of 4,810 shares at
$10.55 through common
stock purchase plan -0- -0- 50,732 -0- -0- -0- 50,732
Issuance of 15,268 shares
at $6.25 to Directors
in lieu of fees -0- -0- 4,069 -0- -0- (91,358) 95,427
Net Income -0- -0- -0- 3,984,354 -0- -0- 3,984,354
Dividends -0- -0- -0- (719,956) -0- -0- (719,956)
Dividends-pooled company -0- -0- -0- (178,600) -0- -0- (178,600)
Other comprehensive income
(loss) -0- -0- -0- -0- 63,848 -0- 63,848
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balances,
September 30, 1997
(Unaudited) $1,263,745 -0- 20,543,122 17,373,064 (15,248) 983,189 38,181,494
========== ========== ========== ========== ========== ========== ===========
Balances, December 31,
1997, as previously
reported $1,263,745 -0- 15,934,580 14,401,920 114,785 983,189 30,731,841
Adjustment for pooling
of interest:
Issuance of
1,711,249 shares
to shareholders of
Investors Financial
Corp. -0- -0- 4,608,542 3,981,476 (9,318) -0- 8,580,700
---------- ---------- ---------- ---------- ---------- ---------- ----------
Balances, December 31,
1997, as restated 1,263,745 -0- 20,543,122 18,383,396 105,467 983,189 39,312,541
Issuance of 1,650 shares
at $11.93 average through
dividend reinvestment plan -0- -0- 19,685 -0- -0- -0- 19,685
Issuance of 7,808 shares
at $10.40 to directors
in lieu of fees -0- -0- 81,240 -0- -0- -0- 81,240
Net Income -0- -0- -0- 4,509,499 -0- -0- 4,509,499
Dividends -0- -0- -0- (1,335,037) -0- -0- (1,335,037)
Dividends-pooled
company -0- -0- -0- (65,800) -0- -0- (65,800)
Additional stock
issued by
pooled company -0- -0- 28,500 -0- -0- -0- 28,500
Cancellation of
treasury stock (46,680) -0- (936,509) -0- -0- (983,189) -0-
Other comprehensive income
(loss) -0- -0- -0- -0- 159,355 -0- 159,355
---------- ---------- ---------- ---------- ---------- ----------- ----------
Balances,
September 30, 1998
(Unaudited) $1,217,065 -0- 19,736,038 21,492,058 264,822 -0- 42,709,983
========== ========== ========== ========== ========== ========== ==========
</TABLE>
<PAGE> 7
<TABLE>
PAB BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(UNAUDITED)
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------------
1998 1997
---------- ---------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 4,509,499 3,984,354
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 623,943 638,195
Deferred income taxes (32,408) (24,761)
Provision for loan losses 598,159 485,800
Amortization of goodwill and other intangible assets 267,498 267,498
Amortization (accretion) of securities (90,381) (104,692)
(Gain) loss on sale of loans (1,989) (23,262)
Securities (gains) losses (23,201) 20,609
(Gain) loss on sale of assets (102,131) -0-
(Gain) Loss on sale of real estate owned 7,525 (2,154)
Minority interests 552 472
Equity in earnings of unconsolidated subsidiary (304,491) (186,648)
Dividend received from unconsolidated subsidiary 200,000 220,000
Increase in cash value of life insurance (79,728) (62,161)
Change in assets and liabilities:
(Increase) decrease in accrued interest receivable (582,252) (707,012)
Increase (decrease) in accrued interest payable (12,761) (35,247)
(Increase) decrease in other assets (365,465) (347,525)
Increase (decrease) in other liabilities (509,880) 224,785
---------- ----------
Net cash provided (used) by operating activities 4,102,489 4,348,251
---------- ----------
Cash Flows From Investing Activities:
Capital expenditures (2,565,328) (963,103)
Proceeds from sale of assets 167,414 -0-
Principal payments on mortgage-backed securities 6,896,807 2,285,463
Purchase of available-for-sale securities (19,218,521) (16,134,741)
Proceeds from maturities of available-for-sale securities 21,089,046 12,896,975
Proceeds from sales of available-for-sale securities 1,002,296 7,874,082
(Increase) decrease in interest-bearing deposits in banks 3,000,000 198,000
(Increase) decrease in loans (33,526,170) (26,088,668)
Increase in cash value of life insurance -0- (335,850)
---------- ----------
Net cash provided (used) by investing activities (23,154,456) (20,267,842)
---------- ----------
Cash Flows From Financing Activities:
Proceeds of additional stock issue 28,500 50,732
Increase (decrease) in time deposits 1,989,823 3,789,088
Increase (decrease) in other deposits 2,525,516 (3,640,237)
Advances from Federal Home Loan Bank 16,900,000 14,350,000
Payments on long-term indebtedness (11,074,719) (6,820,416)
Increase (Decrease) in other borrowed funds 2,593,476 -0-
Dividends paid (1,171,534) (627,930)
Increase in federal funds purchased and securities sold under
agreement to repurchase 3,636,300 -0-
Increase in advance payments by borrowers for taxes and insurance (68,648) 120,902
---------- ----------
Net cash provided (used) by financing activities 15,358,714 7,222,139
---------- ----------
Net Increase (Decrease) in Cash and Cash Equivalents (3,693,253) (8,697,452)
Cash and Cash Equivalents at Beginning of Period 40,054,911 32,841,055
---------- ----------
Cash and Cash Equivalents at End of Period $36,361,658 24,143,603
========== ==========
Supplemental Disclosures of Cash Flow Information
-------------------------------------------------
Cash Paid During The Period For:
Interest $12,200,305 10,652,627
========== ==========
Income taxes $ 2,520,879 2,259,107
========== ==========
Schedule of Non-Cash Investing and Financing Activities
-------------------------------------------------------
Total increase (decrease) in unrealized losses on securities available-for-sale $ (237,366) (91,347)
========== ==========
Stock issued to directors in payment of fees and stock issued through dividend
reinvestment plan $ 100,925 365,489
========== ==========
</TABLE>
<PAGE> 8
PAB BANKSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
Note 1 - Basis of Presentation
------------------------------
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of
normal and recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the nine months ended September
30, 1998 are not necessarily indicative of the results that may be expected
for the year ending December 31, 1998. For further information, refer to the
consolidated financial statements and footnotes thereto included in the
Company's annual report on Form 10-KSB for the year ended December 31, 1997.
Earnings per share information for the period ended September 30, 1997 has
been restated to reflect a two-for-one stock split on March 10, 1998 for
shareholders of record February 17, 1998.
Prior period financial information has been restated for a business
combination with Investors Financial Corporation (Investors) (and its
subsidiary, Bainbridge National Bank), which was consummated on June 19, 1998
and accounted for as a pooling of interests in conformity with generally
accepted accounting principles.
Note 2 - Business Combination
-----------------------------
On June 19, 1998, PAB Bankshares, Inc. (PAB) issued 1,711,249 shares of
common stock in exchange for all of the outstanding stock, warrants and
options of Investors (Bainbridge, Georgia). This transaction, accounted for
as a pooling of interests, added $79.5 million in assets.
As explained in Note 1, PAB restated prior period financial information for
the Investors transaction. The following table presents net interest income,
net income and earnings per share as reported by PAB and Investors and on a
combined basis for the nine months ended September 30, 1997 (amounts in
thousands, except per share information):
<TABLE>
<CAPTION>
<S> <C>
Net Interest Income:
PAB $ 9,655
Investors 2,462
----------
Combined $ 12,117
==========
Net Income:
PAB $ 3,134
Investors 850
----------
Combined $ 3,984
==========
<PAGE> 9
Basic Earnings Per Share:
PAB $ .55
Investors 1.81
Combined .54
Diluted Earnings Per Share:
PAB $ .55
Investors 1.64
Combined .54
</TABLE>
<PAGE> 10
ITEM 2. MANAGEMENTS'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
On June 19, 1998, the Company completed its merger of Investors Financial
Corporation (and its subsidiary, Bainbridge National Bank). The transaction
has been accounted for as a pooling of interests; therefore, all prior period
financial information has been restated to reflect the merger. Current
period financial information reflects the merger as if it had occurred on
January 1, 1998.
Results of Operations
---------------------
The Company, including the operations of its subsidiaries, reported
consolidated net income of $4,509,499 for the nine months ended September 30,
1998 compared to $3,984,354 for the nine months ended September 30, 1997.
Net interest income after provision for loan losses was $12,697,076 and
$11,631,513 for the nine months ended September 30, 1998 and 1997,
respectively. The provision for loan losses was $598,159 and $485,800 for
the nine months ended September 30, 1998 and 1997, respectively. Noninterest
income totalled $3,586,385 and $2,593,747 for the nine months ended June 30,
1998 and 1997, respectively, and noninterest expenses totalled $9,441,113 and
$8,099,581 for the nine months ended September 30, 1998 and 1997,
respectively. Net income for the quarter ended September 30, 1998 was
$1,473,343 compared to $1,275,769 for the quarter ended September 30, 1997.
Comprehensive income was $4,668,854 and $4,048,202 for the nine months ended
September 30, 1998 and 1997, respectively. Other comprehensive income
consisted of unrealized gains and losses on available-for-sale securities.
The following table summarizes the results of operations of the Company for
the three month and nine month periods ended September 30, 1998 and 1997.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ------------------
1998 1997 1998 1997
-------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Interest income $ 8,679 7,871 25,483 22,735
Interest expense (4,122) (3,666) (12,188) (10,617)
-------- -------- -------- --------
Net interest income 4,557 4,205 13,295 12,118
Provision for loan losses (164) (220) (598) (486)
Noninterest income 1,201 847 3,586 2,594
Noninterest expense (3,346) (2,814) (9,441) (8,100)
-------- -------- -------- --------
Income before taxes 2,248 2,018 6,842 6,126
Income taxes (775) (742) (2,333) (2,142)
-------- -------- -------- --------
Net income 1,473 1,276 4,509 3,984
Other comprehensive income,
net of tax 165 206 160 64
-------- -------- -------- --------
Comprehensive income $ 1,638 1,482 4,669 4,048
======== ======== ======== ========
</TABLE>
Interest Income
---------------
Total interest income increased approximately $2,748,000 for the nine months
ended September 30, 1998 compared to the nine months ended September 30,
1997. This increase is attributed to the factors explained in the following
paragraph.
<PAGE> 11
This increase was the combined effect of an increase in the average loan
portfolio balance from approximately $257.1 million for the nine months ended
September 30, 1997 to approximately $288.5 million for the nine months ended
September 30, 1998 and an increase in the average rate earned on the loan
portfolio from 9.72% for the nine months ended September 30, 1997 to 9.73%
for the nine months ended September 30, 1998. The effect of these changes
increased the interest income earned on the loan portfolio from approximately
$18,752,000 for the nine months ended September 30, 1997 to approximately
$21,053,000 for the nine months ended September 30, 1998, an increase of
$2,301,000. Interest income on the loan portfolio increased from
approximately $6,582,000 for the quarter ended September 30, 1997 to
approximately $7,372,000 for the quarter ended September 30, 1998, an
increase of $790,000.
Interest earned on taxable investment securities decreased from approximately
$3,467,000 for the nine months ended September 30, 1997 to approximately
$3,113,000 for the nine months ended September 30, 1998, a decrease of
$354,000. This decrease was the net effect of a decrease in the average
taxable investment portfolio balance from approximately $72.7 million for the
nine months ended September 30, 1997 to approximately $64.0 million for the
nine months ended September 30, 1998 and an increase in the rate earned on
the taxable investment portfolio from 6.36% for the nine months ended
September 30, 1997 to 6.49% for the nine months ended September 30, 1998.
Interest income on the taxable investment portfolio decreased from
approximately $1,107,000 for the quarter ended September 30, 1997 to
approximately $941,000 for the quarter ended September 30, 1998, a decrease
of $166,000.
Interest earned on non-taxable investment securities increased from
approximately $101,000 for the nine months ended September 30, 1997 to
approximately $133,000 for the nine months ended September 30, 1998, an
increase of $32,000. This increase was the combined effect of an increase in
the average non-taxable investment portfolio from approximately $2.7 million
for the nine months ended September 30, 1997 to approximately $3.3 million
for the nine months ended September 30, 1998 and an increase in the rate
earned on the non-taxable investment portfolio from 5.03% for the nine months
ended September 30, 1997 to 5.36% for the nine months ended September 30,
1998. Interest income on the non-taxable investment securities portfolio
increased from approximately $36,000 for the quarter ended September 30, 1997
to approximately $44,000 for the quarter ended September 30, 1998, an
increase of $8,000.
As of September 30, 1998, the amortized cost of taxable and non-taxable
investments consisted of U.S. Treasury securities (13.9%), securities of U.S.
Government Agencies and Corporations (73.3%), obligations of States, Counties
and Municipalities (5.8%) and equity securities (7.0%). The securities are
predominantly at fixed rates. There are no interest rates which change
inversely to changes in interest rates.
Interest earned on interest-bearing deposits in banks increased from
approximately $149,000 for the nine months ended September 30, 1997 to
approximately $151,000 for the nine months ended September 30, 1998, an
increase of $2,000. This increase was the net effect of an increase in the
average interest-bearing deposits balance from approximately $3.9 million for
the nine months ended September 30, 1997 to approximately $4.4 million for
the nine months ended September 30, 1998 and a decrease in the rate earned on
the interest-bearing deposits from 5.17% for the nine months ended September
30, 1997 to 4.63% for the nine months ended September 30, 1998. Interest
income on the interest-bearing deposits decreased from approximately $56,000
for the quarter ended September 30, 1997 to approximately $40,000 for the
quarter ended September 30, 1998, a decrease of $16,000.
<PAGE> 12
Interest earned on federal funds sold and securities purchased under
agreement to resell increased from approximately $266,000 for the nine months
ended September 30, 1997 to approximately $1,033,000 for the nine months
ended September 30, 1998, an increase of $767,000. This increase was the net
effect of an increase in the average federal funds sold balance from
approximately $6.1 million for the nine months ended September 30, 1997 to
approximately $25.6 million for the nine months ended September 30, 1998 and
a decrease in the average rate earned from 5.78% for the nine months ended
September 30, 1997 to 5.38% for the nine months ended September 30, 1998.
Interest income on federal funds sold and securities purchased under
agreement to resell increased from approximately $90,000 for the quarter
ended September 30, 1997 to approximately $282,000 for the quarter ended
September 30, 1998, an increase of $192,000.
Interest Expense
----------------
Total interest expense increased approximately $1,571,000 for the nine months
ended September 30, 1998 compared to the nine months ended September 30,
1997. This increase is attributed to the factors explained in the following
paragraph.
This increase was the combined effect of an increase in the average balance
of interest-bearing deposits from approximately $266.2 million for the nine
months ended September 30, 1997 to approximately $276.3 million for the nine
months ended September 30, 1998 and an increase in the average rate paid on
interest-bearing deposits from 4.77% for the nine months ended September 30,
1997 to 4.97% for the nine months ended September 30, 1998. The effect of
these changes increased the interest expense on interest-bearing deposits
from approximately $9,519,000 for the nine months ended June 30, 1997 to
approximately $10,303,000 for the nine months ended September 30, 1998, an
increase of $784,000. Interest expense on interest-bearing deposits
increased from approximately $3,257,000 for the quarter ended September 30,
1997 to approximately $3,463,000 for the quarter ended September 30, 1998, an
increase of $206,000. The increase in interest-bearing deposits came
primarily from the local communities served by the Banks.
Interest expense on advances from the Federal Home Loan Bank increased from
approximately $875,000 for the nine months ended September 30, 1997 to
approximately $1,687,000 for the nine months ended September 30, 1998, an
increase of $812,000. This increase was the combined effect of an increase
in the average balance of advances from approximately $19.4 million for the
nine months ended September 30, 1997 to approximately $32.1 million for the
nine months ended September 30, 1998 and an increase in the average rate paid
from 6.02% for the nine months ended September 30, 1997 to 7.00% for the nine
months ended September 30, 1998. Interest expense on Federal Home Loan Bank
advances increased from approximately $344,000 for the quarter ended June 30,
1997 to approximately $610,000 for the quarter ended September 30, 1998, an
increase of $266,000.
All other interest expense consisting of interest on notes and mortgages
payable, federal funds purchased and securities sold under agreements to
repurchase and sweep agreements decreased from approximately $224,000 for the
nine months ended September 30, 1997 to approximately $198,000 for the nine
months ended September 30, 1998, a decrease of $26,000. This decrease was
the combined effect of an increase in the average balance of such
indebtedness from approximately $4.2 million for the mine months ended
September 30, 1997 to approximately $4.6 million for the nine months ended
September 30, 1998 and a decrease in the average rate paid from approximately
7.05% for the nine months ended September 30, 1997 to approximately 5.79% for
the nine months ended September 30, 1998. All other interest expense
decreased from approximately $65,000 for the quarter ended September 30, 1997
to approximately $49,000 for the quarter ended September 30, 1998, a decrease
of $16,000. The interest rate reduction was attributed to the repayment
prior to maturity of a note payable to a correspondent bank which carried a
rate of prime less .50% subject to a ceiling of 9.50% until July 1, 1999.
<PAGE> 13
Noninterest Income
------------------
The following table presents the principal components of noninterest income
for the three month and nine month periods ended September 30, 1998 and 1997.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ------------------
1998 1997 1998 1997
-------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Service charges on deposit
accounts $ 663 599 1,948 1,747
Insurance commissions 68 36 157 92
Fees on mortgage loans
originated for sale 86 4 229 5
Gain (Loss) on sale of loans -0- 5 2 23
Gain (Loss) on sale of assets -0- -0- 102 (2)
Securities gains (losses) (6) 4 23 (19)
Equity in earnings of
unconsolidated subsidiary 94 27 304 187
Gain (Loss) on sale of other
real estate -0- 1 (7) 2
Other income 296 171 828 559
-------- -------- -------- --------
Total Noninterest Income $ 1,201 847 3,586 2,594
======== ======== ======== ========
</TABLE>
Noninterest income for the nine months ended September 30, 1998 as compared
to the nine months ended September 30, 1997 increased approximately $992,000.
Service charges on deposit accounts for the nine months ended September 30,
1998 as compared to the nine months ended September 30, 1997, increased
approximately $201,000. This increase was related primarily to an increase
in the number of transaction deposit accounts with NSF charges. Equity in
earnings of unconsolidated subsidiary, which represents the Company's 50%
interest in the earnings of Empire Financial Services, Inc., an
unconsolidated subsidiary which is owned by First Community Bank of Southwest
Georgia (a subsidiary of the Company), increased $117,000. Gain on sale of
assets represented a gain on the sale of mortgage servicing rights. Fees on
mortgage loans originated for sale increased $224,000 due to an increase in
loan origination activity undertaken by the Company. All other income
increased approximately $346,000 for the nine months ended September 30,
1998.
<PAGE> 14
Noninterest Expenses
--------------------
The following table presents the principal components of noninterest expenses
for the three month and nine month periods ended September 30, 1998 and 1997.
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ ------------------
1998 1997 1998 1997
-------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Compensation $ 1,441 1,289 4,028 3,627
Other personnel expenses 339 282 975 832
Occupancy expense of bank
premises 149 146 451 448
Furniture and equipment
expense 300 301 821 771
Federal deposit insurance 21 22 52 45
Postage and courier services 46 58 205 211
Supplies 101 99 316 301
Amortization 89 89 267 267
Other operating expenses 860 528 2,326 1,598
-------- -------- -------- --------
Total Noninterest Expenses $ 3,346 2,814 9,441 8,100
======== ======== ======== ========
</TABLE>
Noninterest expenses for the nine months ended September 30, 1998 as compared
to the nine months ended September 30, 1997, increased approximately
$1,341,000 or 16.6%. Compensation and other personnel expenses increased
approximately $544,000 for the nine months ended September 30, 1998 as
compared to the nine months ended September 30, 1997. This increase reflects
increases in the number of employees, in wage levels and in the cost of
employee benefits. All other expenses increased approximately $797,000 or
21.9% for the nine months ended September 30, 1998 compared to the nine
months ended September 30, 1997. This increase was primarily the result of a
larger volume of business and professional fees associated with the merger
activities of the Company.
Provision for Loan Losses
-------------------------
The provision for loan losses for the nine months ended September 30, 1998
was $598,000 compared to $486,000 for the nine months ended September 30,
1997. The balance of the allowance for loan losses was approximately
$3,736,000 (1.2% of outstanding loans) at September 30, 1998 and
approximately $3,446,000 (1.3% of outstanding loans) at September 30, 1997.
Actual loan charge-offs net of recoveries were approximately $399,000 for the
nine months ended September 30, 1998 and approximately $204,000 for the nine
months ended September 30, 1997. Non-accrual loans were approximately
$924,000 at September 30, 1998 as compared to $472,000 at December 31, 1997.
Loans ninety days or more past due and still accruing amounted to
approximately $428,000 at September 30, 1998 and $178,000 at December 31,
1997. In determining an adequate level of loan loss reserves, such loans
were included in such consideration. The amount of the provision for loan
losses is a result of the amount of loans charged off, the amount of loans
recovered and management's conclusion concerning the level of the allowance
for loan losses. The level of the allowance for loan losses is based upon a
number of factors including the Banks' past loan loss experience,
management's evaluation of the collectibility of loans including specific
impaired loans, the general state of the economy and other relevant factors.
<PAGE> 15
Income Taxes
------------
The effective tax rate for the nine months ended September 30, 1998 was 34.1%
compared to 35.0% for the nine months ended September 30, 1997.
Financial Condition
-------------------
The Company, including its subsidiaries, reported consolidated total assets
of approximately $425.1 million at September 30, 1998 and approximately
$405.6 million at December 31, 1997, representing an increase of
approximately $19.5 million.
During the nine months ended September 30, 1998, deposits increased $4.5
million, cash and due from banks decreased $.2 million, federal funds sold
and securities purchased under agreement to resell decreased $1.9 million,
federal funds purchased and securities sold under agreement to repurchase
increased $3.6 million, investments decreased $9.4 million, advances from the
Federal Home Loan Bank increased $6.0 million, other borrowed funds increased
$2.6 million, operations generated $4.6 million and interest bearing deposits
decreased $4.6 million which provided $37.4 million of funds which were used
to fund increases in loans of $33.5 million, decrease long-term debt $.1
million, pay dividends of $1.2 million and fund capital expenditures of $2.6
million.
A number of factors contribute to the charges in loans and deposits as
discussed under "Results of Operations" and "Financial Condition". Such
factors include the growth in the customer base due to business development
efforts of the management team, the pricing of loans and deposits and the
favorable economic conditions experienced in the markets served by the
subsidiary banks. The changes in interest rates as previously discussed are
reflective of interest rates in general, market conditions and competition.
Changes in short-term funds including cash and due from banks, federal funds
sold and securities purchased under agreement to resell, interest-bearing
deposits and investment securities are reflective of the liquidity position
of the company.
The investment securities portfolio of the Company, including its
subsidiaries, reflected unrealized gains for the available-for-sale category
of approximately $415,000 ($265,000 net of income tax effect). All
securities were held in the available-for-sale category as of September 30,
1998. Pursuant to Financial Accounting Standards Board Statement No. 115 and
as amended by Statement No. 130, a valuation allowance has been provided for
the available-for-sale category and is reflected as a separate component of
shareholders' equity as other comprehensive income.
The Company and its subsidiary banks are required to maintain minimum amounts
of capital to total "risk weighted" assets, as defined by the banking
regulators. On a consolidated basis, at September 30, 1998, a comparison of
the minimum required and actual capital ratios are as follows:
<TABLE>
<CAPTION>
TO BE WELL
CAPITALIZED
UNDER
PROMPT
FOR CAPITAL CORRECTIVE
ADEQUACY ACTION
ACTUAL PURPOSES PROVISIONS
---------------- ---------------- ----------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
-------- ----- -------- ----- -------- -----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
As of September 30, 1998
Total Capital
(to Risk Weighted
Assets) $43,643 13.91% 25,104 8.00% 31,380 10.00%
Tier 1 Capital
(to Risk Weighted
Assets) 39,907 12.72% 12,552 4.00% 18,828 6.00%
Tier 1 Capital
(to Average Assets) 39,907 9.61% 16,615 4.00% 20,769 5.00%
</TABLE>
Each entity was in full compliance with its respective regulatory capital
requirements.
<PAGE> 16
Liquidity and Capital Resources
-------------------------------
Liquidity management involves the matching of the cash flow requirements of
customers, for the withdrawal of funds or the funding of additional loans,
and the ability of the Banks to meet those requirements. Management monitors
and maintains appropriate levels of assets and liabilities so that maturities
of assets are such that adequate funds are provided to meet estimated
customer withdrawals and loan requests.
The Banks' liquidity position depends primarily upon the liquidity of its
assets relative to its need to respond to short-term demand for funds caused
by withdrawals from deposit accounts and loan funding commitments. Primary
sources of liquidity are scheduled payments on its loans and interest on the
Banks' investments. The Banks may also utilize their cash and due from
banks, short-term deposits with financial institutions, federal funds sold
and investment securities to meet liquidity requirements. At September 30,
1998, the Company's cash and due from banks were approximately $20.7 million
in excess of its reserve requirements of approximately $1.3 million, its
short-term deposits with financial institutions were approximately $2.1
million and its federal funds sold and securities purchased under agreement
to resell were approximately $12.7 million. All of the above can be
converted to cash on short notice. The sale of investments which had a
market value of approximately $62.9 million at September 30, 1998 can also be
used to meet liquidity requirements, to the extent the investments are not
pledged to secure public funds on deposit as required by law. Securities
with a market value of approximately $25.0 million were pledged as of
September 30, 1998.
The Banks' funding needs are based primarily on the volume of lending. The
primary funding source is from new deposits. The Banks seek to attract new
deposits by paying rates of interest on deposit accounts which are
competitive in their respective primary service areas. The Banks' generally
do not pay brokers' commissions in connection with the obtaining of deposits
or have deposits outside the primary service area. The Banks do not pay
premiums to attract deposits. The Banks continue to expect that new deposits
will serve as their primary funding source.
The Banks also have the ability, on short-term basis, to borrow and purchase
federal funds from other financial institutions. The Banks are members of
the Federal Home Loan Bank of Atlanta and as such have the ability to secure
advances therefrom, although the cost of such advances exceed lower cost
alternatives such as deposits from the local communities. The Banks had
advances outstanding from the Federal Home Loan Bank of Atlanta of $35.1
million at September 30, 1998, at fixed and variable rates ranging from 5.20%
to 7.24%.
Through the Company's dividend reinvestment and common stock purchase plans,
an additional 1,650 shares at an average of $11.93 per share was issued
during the nine months ended September 30, 1998.
Year 2000 Issue
---------------
Based on a preliminary study, the Company expects to spend approximately
$200,000 to $250,000 from 1998 through 1999 to modify its computer
information systems enabling proper processing of transactions relating to
the year 2000 and beyond. The Company continues to evaluate appropriate
courses of corrective action, including replacement of certain systems whose
associated costs would be recorded as assets and amortized. Accordingly, the
Company does not expect the amounts required to be expensed over the next two
years to have a material effect on its financial position or results of
operations. The amount expensed through September 30, 1998 was immaterial.
<PAGE> 17
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's financial performance is impacted by, among other factors,
interest rate risk and credit risk. The Company utilizes no derivatives to
mitigate its credit risk, relying instead on strict underwriting standards,
loan review and an adequate loan loss reserve.
The Company has reviewed its market risk information disclosed in its 1997
Annual Report to Stockholders in relation to market risk information for the
nine months ended September 30, 1998 and has determined that there has been
no material changes in its market risk disclosures from those presented in
its 1997 Annual Report.
<PAGE> 18
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
The Company has announced its plan for a merger of Eagle Bancorp,
Inc. (Eagle) (Parent Company of Eagle Bank and Trust in Statesboro)
into the Company. The anticipated effective date is prior to
December 31, 1998. The transaction is to be consummated by issuance
of 873,875 shares of Company common stock for 873,875 shares of
Eagle common stock representing all of the outstanding stock of
Eagle. It is anticipated that the merger will qualify as a "pooling
of interest" for financial reporting purposes. Regulatory and
stockholder approvals will be required.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit No.
-----------
11 Statement re Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K.
During the quarterly period ended September 30, 1998, the
Company filed a current report on Form 8-K dated July 2, 1998.
Such current report, was filed under Item 2 and 7 of Form 8-K
and reported the consummation on June 19, 1998 of a merger of
Investors Financial Corporation and Bainbridge National Bank
with PAB Bankshares, Inc. by the issuance of 1,711,249 shares
of common stock of PAB Bankshares, Inc. in exchange for all of
the common stock, warrants and options of Investors Financial
Corporation. Item 7 of the Form 8-K reported that the
financial statements of Investors Financial Corporation and the
pro forma financial information concerning Investors Financial
Corporation and PAB Bankshares, Inc. would be filed no later
than September 1, 1998.
On August 21, 1998, the Company filed an amendment to the Form
8-K referred to above to include the financial statements of
Investors Financial Corporation and the pro forma financial
information concerning Investors Financial Corporation and PAB
Bankshares, Inc.
<PAGE> 19
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.
PAB BANKSHARES, INC.
By:/s/ R. Bradford Burnette
---------------------------------
R. Bradford Burnette
(President and
Chief Executive Officer)
By:/s/ C. Larry Wilkinson
---------------------------------
C. Larry Wilkinson
(Executive Vice President and Chief
Financial Officer)
Date: November 13, 1998
<PAGE> 20
PAB BANKSHARES, INC.
FORM 10-Q
INDEX OF EXHIBITS
-----------------
The following exhibits are filed as part of the report.
EXHIBIT NO. DESCRIPTION PAGE
----------- ----------- ----
11 Statement re computation of
per share earnings 21
27 Financial data schedule 22
[MULTIPLIER] 1
EXHIBIT 11
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
PAB BANKSHARES, INC.
--------------------
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
1998 1997
---------- ----------
<S> <C> <C>
Basic Earnings Per Share:
-------------------------
Average shares outstanding 7,371,480 7,354,764
========== ==========
Diluted Earnings Per Share:
---------------------------
Average shares outstanding 7,371,480 7,354,764
---------- ----------
Average options outstanding:
With exercise price of $12.50 144,000 144,000
With exercise price of $20.125 131,500 131,500
With exercise price of $24.125 46,500 -0-
With exercise price of $21.625 3,000 -0-
---------- ----------
Proceeds from assumed exercise of options
outstanding $5,633,126 4,446,438
Average market price per share during the period $ 24.11 22.26
---------- ----------
Assumed shares repurchased 233,673 199,793
---------- ----------
Common stock equivalents of options outstanding 91,327 75,707
---------- ----------
Average shares outstanding 7,462,807 7,430,471
========== ==========
Earnings Per Share:
-------------------
Net Income $4,509,499 3,984,354
========== ==========
Basic Earnings Per Share $ .61 .54
========== ==========
Diluted Earnings Per Share $ .60 .54
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 21,972,902
<INT-BEARING-DEPOSITS> 2,076,756
<FED-FUNDS-SOLD> 12,710,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 62,881,036
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 304,994,104
<ALLOWANCE> 3,736,116
<TOTAL-ASSETS> 425,092,653
<DEPOSITS> 335,491,593
<SHORT-TERM> 7,234,630
<LIABILITIES-OTHER> 2,479,000
<LONG-TERM> 37,177,447
<COMMON> 1,217,065
0
0
<OTHER-SE> 41,492,918
<TOTAL-LIABILITIES-AND-EQUITY> 425,092,653
<INTEREST-LOAN> 21,052,501
<INTEREST-INVEST> 3,245,724
<INTEREST-OTHER> 1,184,554
<INTEREST-TOTAL> 25,482,779
<INTEREST-DEPOSIT> 10,302,575
<INTEREST-EXPENSE> 12,187,544
<INTEREST-INCOME-NET> 13,295,235
<LOAN-LOSSES> 598,159
<SECURITIES-GAINS> 23,201
<EXPENSE-OTHER> 9,441,113
<INCOME-PRETAX> 6,842,348
<INCOME-PRE-EXTRAORDINARY> 4,509,499
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,509,499
<EPS-PRIMARY> .61
<EPS-DILUTED> .60
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
