<PAGE>
1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
SEPTEMBER 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-11535
CITY NATIONAL BANCSHARES CORPORATION
(Exact name of registrant as specified in its charter)
New Jersey 22-2434751
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
900 Broad Street, 07102
Newark, New Jersey (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (201) 624-0865
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Title of each class
Common stock, par value $10 per share
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 aggregate market value of voting stock held by non affiliates of the
Registrant as of November 12, 1996 was approximately $1,384,000.
There were 114,141 shares of common stock outstanding at November 12, 1996.
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2
CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheet (Unaudited)
September 30, December 31,
Dollars in thousands, except per share data 1996 1995
================================================================================
Assets
Cash and due from banks .............................. $ 2,553 $ 3,344
Federal funds sold ................................... 11,600 6,950
Interest bearing deposits with banks ................. 66 321
Investment securities available for sale ............. 39,471 30,609
Investment securities held to maturity
(Market value of $29,603 at September
30, 1996 and $24,434 at December 31,1995) .......... 30,200 24,494
Loans held for sale .................................. 1,466 555
Loans ................................................ 55,265 44,739
Less: Reserve for possible loan losses ............... 725 650
-------- --------
Net loans ............................................ 54,540 44,089
-------- --------
Premises and equipment ............................... 3,285 2,288
Accrued interest receivable .......................... 925 955
Other real estate owned .............................. 306 212
Other assets ......................................... 346 593
-------- --------
Total assets ......................................... $144,758 $114,410
======== ========
Liabilities and Stockholders' Equity
Deposits:
Demand ............................................. $ 15,801 $ 12,925
Savings ............................................ 34,257 37,019
Time ............................................... 75,449 50,945
-------- --------
Total deposits ....................................... 125,507 100,889
Short-term borrowings ................................ 8,000 3,661
Accrued expenses and other liabilities ............... 1,447 1,215
Long-term debt ....................................... 1,749 1,749
-------- --------
Total liabilities .................................... 136,703 107,514
Commitments and contingencies
Stockholders' equity
Preferred stock, no par value: Authorized
100,000 shares; issued 128 shares in
1996 and eight shares in 1995,
outstanding 128 shares in 1966 and eight
shares in 1995, .................................. 727 200
Common stock, par value $10: Authorized
400,000 shares; Issued 111,980 shares in
1995 and 1994, outstanding 111,141 shares
in 1995 and 111,941 shares in 1995 ............... 1,150 1,120
Surplus ............................................ 901 886
Retained earnings .................................. 5,410 4,856
Less:
Net unrealized loss on investment
securities available for sale .................. 108 141
Treasury stock, at cost - 839 shares ............. 25 25
-------- --------
Total stockholders' equity ........................... 8,055 6,896
-------- --------
Total liabilities and stockholders' equity ........... $144,758 $114,410
======== ========
See accompanying notes to consolidated financial statements.
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3
CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARIES
Consolidated Statement of Income (Unaudited)
Nine months ended Three months ended
Dollars in thousands, September 30, September 30,
except per share data 1996 1995 1996 1995
================================================================================
Interest income
Interest and fees on loans .. $ 3,524 $ 2,591 $ 1,278 $ 945
Interest on Federal funds
sold and securities
purchased under agreements
to resell ................. 206 259 90 57
Interest on other short-term
investments ............... 185 87 41 61
Interest on deposits with
banks ..................... 5 6 1 4
Interest and dividends on
investment securities:
Taxable ................... 2,621 2,470 905 815
Tax-exempt ................ 87 84 31 29
--------- --------- --------- ---------
Total interest income ....... 6,628 5,497 2,346 1,911
--------- --------- --------- ---------
Interest expense
Interest on deposits ........ 2,452 1,939 929 676
Interest on short-term
borrowings ................ 154 128 52 47
Interest on long-term debt .. 74 16 25 5
--------- --------- --------- ---------
Total interest expense ...... 2,680 2,082 1,006 728
--------- --------- --------- ---------
Net interest income ......... 3,948 3,415 1,340 1,183
Provision (credit) for
possible loan losses ...... 65 151 32 (32)
--------- --------- --------- ---------
Net interest income
after provision (credit)
for possible loan losses .. 3,883 3,264 1308 1151
--------- --------- --------- ---------
Other operating income
Service charges on deposit
accounts .................. 419 463 140 143
Other income ................ 433 621 100 107
Net gain (loss) on sales
of investment securities .. 8 (2) (1) (1)
--------- --------- --------- ---------
Total other operating
income .................... 860 1,082 239 249
--------- --------- --------- ---------
Other operating expenses
Salaries and other
employee benefits ......... 1,982 1,842 672 644
Occupancy expense ........... 251 119 117 63
Equipment expense ........... 254 180 77 65
Other expenses .............. 1,161 1,044 454 361
--------- --------- --------- ---------
Total other operating
expenses .................. 3,648 3,185 1,320 1,133
--------- --------- --------- ---------
Income before income
tax expense ............... 1,095 1,161 227 267
Income tax expense .......... 385 421 82 90
========= ========= ========= =========
Net income .................. $ 710 $ 740 $ 145 $ 177
========= ========= ========= =========
Net income applicable
to common stock ........... $ 708 $ 740 $ 143 $ 177
========= ========= ========= =========
Net income per share
Primary ..................... $ 6.27 $ 6.66 $ 1.25 $ 1.59
Fully diluted ............... 5.66 5.99 1.12 1.44
========= ========= ========= =========
Primary average
shares outstanding ........ 112,855 111,141 114,141 111,141
Fully diluted average
shares outstanding ........ 126,705 124,991 127,991 124,991
========= ========= ========= =========
See accompanying notes to consolidated financial statements.
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4
CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARIES
<TABLE>
Consolidated Statement of Changes
in Stockholders' Equity
(Unaudited)
<CAPTION>
Net Unrealized
Gain (Loss) on Invest-
Dollars in thousands, except Common Preferred Retained ment Securities Treasury
per share data Stock Surplus Stock Earnings Available for Sale Stock Total
===================================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994 ................ $ 1,120 $ 886 -- $ 4,194 $ (587) $ (25) $ 5,588
Net income ................................ -- -- -- 740 -- -- 740
Change in net unrealized
gain on investment
securities available for sale ........... -- -- -- -- 223 -- 223
Dividends paid on common stock ............ -- -- -- (140) -- -- (140)
------- ------- ------- ------- ------- ------- -------
Balance, September 30, 1995 ............... $ 1,120 $ 886 -- $ 4,794 $ (364) $ (25) $ 6,411
======= ======= ======= ======= ======= ======= =======
Balance, December 31, 1995 ................ $ 1,120 $ 886 $ 200 $ 4,856 $ (141) $ (25) $ 6,896
Net income ................................ -- -- -- 710 -- -- 710
Proceeds from issuance of
common stock ............................ 30 15 -- -- -- -- 45
Proceeds from issuance of
preferred stock ......................... -- -- 527 -- -- -- 527
Change in net unrealized loss
on investment securities
available for sale ...................... -- -- -- -- 33 -- 33
Dividends paid on common stock ............ -- -- -- (154) -- -- (154)
Dividends paid on preferred
stock ................................... -- -- -- (2) -- -- (2)
------- ------- ------- ------- ------- ------- -------
Balance, September 30, 1996 ............... $ 1,150 $ 901 $ 727 $ 5,410 $ (108) $ (25) $ 8,055
======= ======= ======= ======= ======= ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
5
CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARIES
Consolidated Statement of Cash Flows (Unaudited)
Nine Months Ended
September 30,
In thousands 1996 1995
===============================================================================
Operating activities
Net income ........................................... $ 710 $ 740
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation and amortization ...................... 260 119
Provision for possible loan losses ................. 65 151
Amortization of premium, net of
discount accretion on investment
securities ....................................... 46 135
Gains on calls of investment securities
held to maturity ................................ (8) --
Gains and commissions on loans held for sale ....... (84) (100)
Decrease in accrued interest receivable .............. 30 230
Deferred income tax expense .......................... 140 12
Decrease in other assets ............................. 247 1,139
Increase (decrease) in accrued expenses and
other liabilities .................................. 67 (73)
-------- --------
Net cash provided by (used in) operating
activities ......................................... 1,473 2,353
-------- --------
Investing activities
Loans originated for sale ............................ (3,191) (4,000)
Proceeds from sales of loans held for sale ........... 2,253 3,868
Increase in loans .................................... (6,464) (4,647)
Purchase of loans in conjunction with
branch acquisitions ................................ (4,035) (11,479)
Decrease (increase) in interest bearing
deposits with banks ................................ 255 (293)
Proceeds from maturities of investment
securities available for sale,
including principal payments and calls ............. 5,749 271
Proceeds from maturities of investment
securities held to maturity,
including principal payments and calls ............. 4,311 6,565
Purchases of investment securities
available for sale ................................. (14,583) (2,746)
Purchases of investment securities
held to maturity ................................... (10,025) (5,445)
Purchases of premises and equipment .................. (1,257) (580)
-------- --------
Net cash used in investing activities ................ (26,987) (18,486)
-------- --------
Financing activities
Deposits acquired in branch acquisition .............. 7,661 --
Increase (decrease) in deposits ...................... 16,957 (2,724)
Increase in short-term borrowings .................... 4,339 4,343
Proceeds from issuance of common stock ............... 45 --
Proceeds from issuance of preferred stock ............ 527 --
Dividends paid ....................................... (156) (140)
-------- --------
Net cash provided by financing activities ............ 29,373 1,479
-------- --------
Net increase (decrease) in cash and cash
equivalents ........................................ 3,859 (14,655)
Cash and cash equivalents at beginning of period ..... 10,294 27,131
-------- --------
Cash and cash equivalents at end of period ........... $ 14,153 $ 12,476
======== ========
Cash paid during the year:
Interest ............................................. $ 2,602 $ 1,939
Income taxes ......................................... 199 734
Noncash investing activities:
Transfer of loans to other real estate owned ......... 94 212
See accompanying notes to consolidated financial statements.
<PAGE>
6
CITY NATIONAL BANCSHARES CORPORATION
Notes to Consolidated Financial Statements (Unaudited)
1. Principles of consolidation
The accompanying consolidated financial statements include the accounts of City
National Bancshares Corporation (the "Corporation") and its subsidiary, City
National Bank of New Jersey (the "Bank"). All significant intercompany accounts
and transactions have been eliminated in consolidation.
2. Basis of presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation of
the financial statements have been included. Operating results for the nine
months ended September 30,1996 are not necessarily indicative of the results
that may be expected for the year ended December 31,1996.
3. Earnings per common share
Earnings per common share is calculated by dividing net income, less the
dividends on preferred stock, by the average number of common shares outstanding
during the period.
4. Reclassifications
Certain reclassifications have been made to the 1996 consolidated financial
statements in order to conform to the 1995 presentation.
<PAGE>
7
Management's Discussion and Analysis of Results of Operations and Financial
Condition
General
On March 8,1996 City National Bank acquired a branch office, assuming deposits
totalling $7.6 million in exchange for $500,000 of the Corporation preferred
stock, continuing a trend established in 1994 of selectively expanding into
urban areas where the Bank believes it can provide a need for its unique
personalized type of service. During the third quarter of 1996, the Bank was
assessed $96,000 by the FDIC representing its share to replenish the Savings
Association Insurance Fund.
Results of operations
Net income for the first nine months of 1996 was $710,000, compared to $740,000
for the similar 1995 period, which included the benefits of $198,000 of proceeds
received from the Resolution Trust Corporation ("RTC") in February, 1995,
representing earnings on funds allocated to purchase loans from the RTC, offset
in part by a special addition of $115,000 to the provision for possible loan
losses. Returns on average stockholders' equity and average assets were 12.36%
and .73% for the first nine months and 16.44 % and .90% for the corresponding
1995 period. Related earnings per share on a fully diluted basis rose to $5.57
from $5.92.
1996 third quarter net income decreased to $145,000 from $177,000 a year
earlier. Returns on average shareholders' equity and average assets were 12.90%
and .88% for the 1996 second quarter, while the corresponding 1995 returns were
12.90% and .63%. Related fully diluted per share earnings were $1.12 compared to
$1.42. The FDIC assessment was the primary reason for the decrease in earnings.
Excluding the nonrecurring items in both1996 and 1995, 1996 third quarter
year-to-date earnings were $773,000, 12.7% greater than the $686,000 earnings in
the corresponding 1995 period, while 1996 third quarter earnings were $208,000,
or 17.5% higher than the 1995 third quarter.
Net interest income
For the first nine months of 1996, net interest income rose 15.68% to $3,948,000
from $3,415,000 for the same 1995 period. Higher earning asset levels, resulting
primarily from increased loan volume, was the primary reason for this
improvement. Related net interest margins on a tax equivalent basis were 4.36%
compared to 4.47%, as higher rates derived from increased loan volume were
offset by increased deposit costs. Average interest earning assets for the first
nine months of 1996 rose to $122.1 million from $103.4 million in 1995. Most of
this growth occurred within the loan portfolio, which averaged $52.4 million
compared to $37.5 million , a 39.7 % increase, due in part to the purchase of $4
million in residential mortgage loans in conjunction with the March, 1996 branch
acquisition. Average short-term earning assets rose from $8.3 million for the
1995 first nine-month period to $10 million for the similar 1996 period. The
average investment portfolio increased from $57.6 million for the first nine
months of 1995 to $59.6 million for the similar 1996 period. This growth
occurred primarily in U.S. Government agency securities.
For the third quarter of 1996, net interest income rose to 13.27% to $1,340,000
from $1,183,000 in the third quarter of 1995 also due primarily to higher loan
volume.
Provision and reserve for possible loan losses
Changes in the reserve for possible loan losses are set forth below.
Nine Months Three Months
Ended Sept. 30, Ended Sept. 30,
(Dollars in thousands) 1996 1995 1996 1995
- --------------------------------------------------------------------------------
Balance at
beginning of period ............. $ 650 $ 625 $ 700 $ 700
Provision (credit) for
possible loan losses ............ 65 151 32 (32)
Recoveries of previous
charge-offs ..................... 94 29 10 6
----- ----- ----- -----
809 805 742 674
Less: Charge-offs ................. 84 180 17 49
----- ----- ----- -----
Balance at end of period .......... $ 725 $ 625 $ 725 $ 625
===== ===== ===== =====
The higher provision in the first half of 1995 resulted from a special charge in
the first quarter of 1995 of $115,000, representing an addition to the reserve
for possible loan losses of 1 % of the balance of the loan portfolio acquired
from the RTC.
<PAGE>
8
Management believes that the reserve for possible loan losses is adequate based
on an ongoing evaluation of the loan portfolio. This evaluation includes
consideration of past loan loss experience, the level and composition of
nonperforming loans, collateral adequacy, and general economic conditions,
including the effect of such conditions on particular industries.
While management uses available information to determine the adequacy of the
reserve, future additions may be necessary based on changes in economic
conditions or in subsequently occurring events unforeseen at the time of
evaluation.
Sept. 30, December 31, Sept. 30,
(Dollars in thousands) 1996 1995 1995
- --------------------------------------------------------------------------------
Reserve for possible loan
losses as a percentage of:
Total loans ............................. 1.31% 1.45% 1.50%
Total nonperforming loans ............... 55.51% 74.71% 72.92%
Total nonperforming assets
(nonperforming loans and OREO) .......... 44.98% 60.07% 53.69%
Net charge-offs (recoveries)
as a percentage of average
loans (year-to-date) .................... (.02)% 1.43% .04%
Nonperforming loans
Nonperforming loans include loans on which the accrual of interest has been
discontinued or loans which are contractually past due 90 days or more as to
interest or principal payments on which interest income is still being accrued.
Nonaccrual loans include loans where principal or interest interest income is
still being accrued Delinquent interest payments are credited to income when
received. The following table presents the principal amounts of nonperforming
loans past due 90 days or more and accruing.
Sept. 30, December 31, Sept. 30,
(Dollars in thousands) 1996 1995 1995
- --------------------------------------------------------------------------------
Nonaccrual loans
Commercial .......................... $ 350 $ 68 $ --
Installment ......................... 6 2 6
Real estate ......................... 738 800 507
------ ------ ------
Total ................................ 1,094 839 513
------ ------ ------
Loans past due 90 days
or more and accruing
Commercial .......................... 57 1 --
Installment ......................... -- -- --
Real estate ......................... 165 30 344
------ ------ ------
Total ................................ 212 31 344
------ ------ ------
Total nonperforming loans ............ $1,306 $ 870 $ 857
====== ====== ======
Nonperforming assets are generally well secured by real estate and small
commercial buildings. It is the Bank's intent to move nonperforming loans into
other real estate owned ("OREO") as rapidly as possible and to dispose of all
OREO properties at the earliest possible date at prices considered reasonable
under the circumstances.
Other operating income
Other operating income, including the results of investment securities
transactions, decreased from $1,082,000 for the first nine months of 1995 to
$860,000 for the similar period in 1996 due primarily to the aforementioned
$198,000 received from the RTC in 1995. Third quarter 1996 other operating
income was slightly less than the similar 1995 quarter.
Other operating expenses
Other operating expenses rose 14.5% for the first three quarters of 1996 to
$3,648,000 from $3,185,000 in the first three quarters of 1995, with the
greatest increase arising from higher occupancy and equipment expense, due to
increased costs attributable to the renovation of the administrative office,
along with the branch acquisition. Third quarter 1996 other operating expenses
rose 16.5% compared to the 1995 third quarter for the same reasons. Additional
staffing costs incurred in connection with the branch acquisition also
contributed to higher operating expenses in both 1996 periods.
<PAGE>
9
Income tax expense
Income tax expense as a percentage of pretax income decreased slightly from
36.3% to 35.2% for the first three quarters of 1996 compared to the first three
quarters of 1995 as a result of lower levels of income subject to state income
tax.
Short-term interest earning assets
Short-term interest earning assets averaged $9.9 million for the first nine
months of 1996 compared to $8.1 million for the similar 1996 period, reflecting
the additional liquidity resulting from the branch acquisition.
Investment securities available for sale
Investment securities available for sale increased to $39.5 million at June
30,1996 from $30.6 million at 1995 year-end, while unrealized depreciation in
the portfolio declined to $108,000 from $141,000 at those dates.
Investment securities held to maturity
Investment securities held to maturity increased from $24.5 million at 1995
year-end to $30.2 million at September 30, 1996 reflecting the purchase of $8.7
million of fixed-rate medium-term U.S. agency callable securities. The
unrealized depreciation in the held to maturity portfolio rose from $60,000 at
December 31,1995 to $597,000 at September 30, 1996 due primarily to the
sensitivity to interest rate changes in both direction of the aforementioned
agency securities.
Loans
Loans held for sale rose from $555,000 at December 31,1995 to $1,466,000 at
September 30,1996 while loans originated for sale declined slightly from $3.3
million during the first nine months of 1995 to $3.2 million for the first nine
months of 1996. For the third quarter of 1996, loan originations totalled $1.8
million, slightly less than the $1.9 million originated during the third quarter
of 1995. Loans sold during the first three quarters of 1996 decreased to $2.1
million compared to $3.8 million for the first three quarters of 1995, while
sales in the 1996 third quarter were $896,000 compared to $1.4 million for the
similar 1995 quarter. The increase in loans from $44.7 million at December
31,1995 to $55.3 million at September 30, 1996 resulted primarily from the $4
million in loans purchased along with an increase in the commercial loan
portfolio.
Deposits
Average deposits for the first three quarters of 1996 and 1995 were $115.1
million and $99.4 million, respectively, a 15.7% increase, approximately half of
which resulted from the branch acquisition. The balance was derived from
increased time deposits.
Short-term borrowings
Average short-term borrowings rose 31.2% from the first three quarters of 1995
to the corresponding 1996 period, reflecting higher levels of U.S. Treasury tax
and loan note option balances.
Long-term debt
Long-term debt averaged $1,749,000 million for the first three quarters of 1996
compared to $249,000 for the first three quarters of 1995 as the result of the
issuance during the fourth quarter of 1995 of $1.5 million in capital notes.
Liquidity
The liquidity position of the Corporation is dependent on the successful
management of its assets and liabilities so as to meet the needs of both
deposits and credit customers. Liquidity needs arise principally to accommodate
possible deposit outflows and to meet customers' request for loans. Such needs
can be satisfied by maturing loans and investments, short-term liquid assets and
the ability to raise short-term funds from external sources.
The Corporation depends primarily on deposits as a source of funds and also
provides for a portion of its funding needs through short-term borrowings, such
as Federal funds purchased, securities sold under repurchase agreements,
borrowings under the U.S. Treasury tax and loan note option program and Federal
Home Loan Bank advances.
<PAGE>
10
It is the responsibility of senior management to monitor and oversee all
activities relating to liquidity management and the protection of net interest
income from fluctuations in interest rates. The major contribution for the first
nine months of 1996 from operating activities to the Corporation's liquidity
came from net income. Most of the cash received from investing activities came
from proceeds from maturities of investment securities, including principal
payments and calls, which totalled $10.1 million. The primary use for investing
activities was the $24.6 million purchase of investment securities.
An increase in deposits provided the largest source of cash from financing
activities, while cash dividends represented the greatest outlay.
Interest rate sensitivity
The management of interest rate risk is also important to the profitability of
the Corporation. Interest rate risk arises when an earning asset matures or when
its interest rate changes in a time period different from that of a supporting
interest bearing liability, or when its interest rate changes in a time period
different from that of an interest earning asset that it supports. While the
Corporation does not match specific assets and liabilities, total earnings
assets and interest bearing liabilities are grouped to determine the overall
interest rate risk within a number of specific time frames.
Interest sensitivity analysis attempts to measure the responsiveness of net
interest income to changes in interest rate levels. The difference between
interest sensitive assets and interest sensitive liabilities is referred to as
the interest sensitivity gap. At any given point in time, the Corporation may be
in an asset-sensitive position, whereby its interest-sensitive assets exceed its
interest-sensitive liabilities or in a liability-sensitive position, whereby its
interest-sensitive liabilities exceed its interest-sensitive assets, depending
on management's judgment as to projected interest rate trends.
One measure of interest rate risk is the interest-sensitvity analysis, which
details the repricing differences for assets and liabilities for given periods.
The primary limitation of this analysis is that it is a static (i.e, as of a
specific point in time) measurement which does not capture risk that varies
nonproportionally with changes in interest rates. Because of this limitation,
the Corporation uses a simulation model as its primary method of measuring
interest rate risk. This model, because of its dynamic nature, forecasts the
effects of different patterns of rate movement and variances in the effects of
rate changes on the Corporations' mix of interest-sensitive assets and
liabilities.
At September 30,1996, the Corporation had a cumulative one-year static gap of a
negative $13.5 million, representing 10.96% of total assets compared to a
negative $13.5 million gap at December 31,1995, which represented 11.74% of
total assets. Utilizing a dynamic simulation model, management believes that
this amount would not result in a significant change in net interest income
should interest rates rise or fall up to 300 basis points, which is the maximum
change that management uses to measure the Corporation's exposure to interest
rate risk.
Capital
Consolidated stockholders' equity amounted to $8.1 million at Sept. 30,1996
compared to $6.9 million to December 31,1995. In addition to the increase from
earnings, the Corporation issued $527,000 of preferred stock and $45,000 of
common stock during 1996. Stockholders' equity as a percentage of total assets
was 5.56% at Sept. 30,1996, while the consolidated leverage ratio was 5.78%,
which compares with existing guidelines established by the Federal Reserve Bank
for bank holding companies of 3%.
Risk-based capital ratios are expressed as a percentage of risk-adjusted assets,
and relate capital to the risk factors of a bank's asset base, including
off-balance sheet risk exposures. Various weights are assigned to different
asset categories as well as off-balance sheet exposures depending on the risk
associated with each. In general, less capital is required for less risk.
At September 30,1996, the Corporation's core capital (Tier 1 ) and total (Tier 1
plus Tier 2) risked-based capital ratios were 13.84% and 18.08%, respectively.
<PAGE>
11
PART II Other information
Item 6a. Exhibits
(11 ) Statement re computation of per share earnings
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 hereunto duly authorized.
CITY NATIONAL BANCSHARES CORPORATION
(Registrant)
November 14,1996 ____________________
Edward R. Wright
Senior Vice President and Chief Financial
Officer Principal Financial and Accounting
Officer)
EXHIBIT 11. STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
City National Bancshares Corporation
Computation of Earnings Per Common Share on a
Primary & Fully Diluted Basis
In thousands, except per share data
Nine Months Ended Three Months Ended
September 30, September 30,
-----------------------------------------
1996 1995 1996 1995
Net Income ......................... $ 710 $ 740 $ 145 $ 177
Dividends on preferred
stock ............................ 2 -- 2 --
-------- -------- -------- --------
Net income applicable
to primary common
shares ........................... 708 740 143 177
Interest expense on
convertible subordinated
debentures, net of
income tax ....................... 9 9 3 3
-------- -------- -------- --------
Net income applicable to
fully diluted common
shares ........................... $ 717 $ 749 $ 146 $ 180
======== ======== ======== ========
Number of average shares
Primary ............................ 112,855 111,141 114,141 111,141
======== ======== ======== ========
Fully diluted:
Average common shares
outstanding .................... 112,855 111,141 114,141 111,141
Average convertible
subordinated debentures
converted to common shares ..... 13,850 13,850 13,850 13,850
-------- -------- -------- --------
126,705 124,991 127,991 124,991
======== ======== ======== ========
Net income per share
Primary .......................... $ 6.27 $ 6.66 $ 1.25 $ 1.59
Fully diluted .................... 5.66 5.99 1.14 1.44
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000714980
<NAME> City National Bancsahres Corporation
<MULTIPLIER> 1000
<CURRENCY> dollar
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-END> SEP-30-1996 SEP-30-1995
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<INVESTMENTS-CARRYING> 30200 24494
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<LOANS> 56731 44739
<ALLOWANCE> 725 650
<TOTAL-ASSETS> 144758 114410
<DEPOSITS> 125507 100889
<SHORT-TERM> 8000 3661
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<LONG-TERM> 1749 1749
027 000
727 200
<COMMON> 2051 2006
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<INTEREST-INVEST> 2708 2554
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<INTEREST-TOTAL> 6628 5497
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<INTEREST-INCOME-NET> 3948 3264
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<SECURITIES-GAINS> 8 (2)
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<INCOME-PRETAX> 1095 1161
<INCOME-PRE-EXTRAORDINARY> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 710 740
<EPS-PRIMARY> 6.27 6.66
<EPS-DILUTED> 5.66 5.99
<YIELD-ACTUAL> 7.30 7.17
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<LOANS-PAST> 3460 344
<LOANS-TROUBLED> 0 0
<LOANS-PROBLEM> 0 0
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<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 46 94
</TABLE>
