<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
JUNE 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 August 12, 1996 was approximately $1,398,440.
There were 114,141 shares of common stock outstanding at August 12, 1996.
<PAGE>
2
CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheet (Unaudited)
June 30, December 31,
Dollars in thousands, except per share data 1996 1995
=====================================================================
Assets
Cash and due from banks ....................... $ 5,026 $ 3,344
Federal funds sold ............................ -- 6,950
Interest bearing deposits
with banks .................................. 35 321
Investment securities
available for sale .......................... 29,234 30,609
Investment securities held
to maturity (Market value of
$30,121 at June 30, 1995 and
$24,434 at December 31,1995) ................ 30,733 24,494
Loans held for sale ........................... 613 555
Loans ......................................... 54,126 44,739
Less: Reserve for possible loan losses ........ 700 650
-------- --------
Net loans ..................................... 53,426 44,089
-------- --------
Premises and equipment ........................ 3,274 2,288
Accrued interest receivable ................... 1,120 955
Other real estate owned ....................... 306 212
Other assets .................................. 298 593
-------- --------
Total assets .................................. $124,065 $114,410
======== ========
Liabilities and Stockholders' Equity
Deposits:
Demand ................................. $ 11,789 $ 12,925
Savings ................................ 34,387 37,019
Time ................................... 56,906 50,945
-------- --------
Total deposits ................................ 103,082 100,889
Short-term borrowings ......................... 10,187 3,661
Accrued expenses and other
liabilities ................................. 1,230 1,215
Long-term debt ................................ 1,749 1,749
-------- --------
Total liabilities ............................. 116,248 107,514
Commitments and contingencies
Stockholders' equity
Preferred stock, no par value:
Authorized 100,000 shares;
Issued 128 shares in 1996 and
8 shares in 1995, outstanding 128
shares in 1996 and 8 shares 1995 ........... 727 200
Common stock, par value $10:
Authorized 400,000 shares; Issued
114,980 shares in 1996 and 111,980
shares in 1995, outstanding 114,141
shares in 1996 and 111,141 shares 1995 .... 1,150 1,120
Surplus ..................................... 901 886
Retained earnings ........................... 5,265 4,856
Less:
Net unrealized loss on investment
securities available for sale ........... 201 141
Treasury stock, at cost - 839 shares .... 25 25
-------- --------
Total stockholders' equity .................... 7,817 6,896
-------- --------
Total liabilities and stockholders' equity .... $124,065 $114,410
======== ========
See accompanying notes to consolidated financial statements.
<PAGE>
3
CITY NATIONAL BANCSHARES CORPORATION AND SUBSIDIARIES
Consolidated Statement of Income (Unaudited)
Three months ended Six months ended
June 30, June 30,
Dollars in thousands, -----------------------------------------
except per share data 1996 1995 1996 1995
================================================================================
Interest income
Interest and fees on loans ....... $ 1,200 $ 895 $ 2,245 $ 1,646
Interest on Federal funds sold
and securities purchased under
agreements to resell ........... 42 46 116 202
Interest on other short-term
investments .................... -- 1 144 2
Interest on deposits with banks .. 2 26 4 26
Interest and dividends on
investment securities:
Taxable .................. 732 853 1,715 1,655
Tax-exempt ............... 29 29 58 55
-------- -------- -------- --------
Total interest income ............ 2,005 1,850 4,282 3,586
-------- -------- -------- --------
Interest expense
Interest on deposits ............. 798 644 1,523 1,263
Interest on short-term borrowings 65 32 102 81
Interest on long-term debt ....... 24 5 49 10
-------- -------- -------- --------
Total interest expense ........... 887 681 1,674 1,354
-------- -------- -------- --------
Net interest income .............. 1,338 1,169 2,608 2,232
Provision for possible loan
losses ......................... 23 (3) 33 119
-------- -------- -------- --------
Net interest income after
provision for possible loan
losses ......................... 1,315 1,172 2,575 2,113
-------- -------- -------- --------
Other operating income
Service charges on deposit
accounts ....................... 136 161 279 320
Other income ..................... 164 160 333 514
Net gain on sales of investment
securities ..................... (1) -- 9 (1)
-------- -------- -------- --------
Total other operating income ..... 299 321 621 833
-------- -------- -------- --------
Other operating expenses
Salaries and other employee
benefits ....................... 649 609 1,310 1,198
Occupancy expense ................ 70 40 134 56
Equipment expense ................ 105 66 178 115
Other expenses ................... 340 356 706 683
-------- -------- -------- --------
Total other operating expenses ... 1,164 1,071 2,328 2,052
-------- -------- -------- --------
Income before income tax expense . 450 422 868 894
Income tax expense ............... 157 156 303 331
======== ======== ======== ========
Net income ....................... $ 293 $ 266 $ 565 $ 563
======== ======== ======== ========
Net income per share
Primary .......................... $ 2.55 $ 2.39 $ 5.08 $ 5.07
Fully diluted .................... 2.27 2.13 4.52 4.50
======== ======== ======== ========
Primary average shares
outstanding .................... 114,141 111,141 112,855 111,141
Fully diluted average
shares outstanding ............. 127,991 124,991 126,705 124,991
======== ======== ======== ========
See accompanying notes to consolidated financial statements.
<PAGE>
4
<TABLE>
CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARIES
Consolidated Statement of Changes
in Stockholders' Equity
(Unaudited)
Net Unrealized
<CAPTION>
Gain (Loss) on Invest-
Common Preferred Retained ment Securities Treasury
Dollars in thousands, except per share data Stock Surplus Stock Earnings Available for Sale Stock Total
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1994 ................ $ 1,120 $ 886 -- $ 4,194 $ (587) $ (25) $ 5,588
Net income ................................ -- -- -- 563 -- -- 563
Change in net unrealized
loss on investment securities
available for sale ...................... -- -- -- -- 184 -- 184
Dividends paid ............................ -- -- -- (140) -- -- (140)
------- ------- ------- ------- ------- ------- -------
Balance, June 30, 1995 .................... $ 1,120 $ 886 -- $ 4,617 $ (403) $ (25) $ 6,195
======= ======= ======= ======= ======= ======= =======
Balance, December 31, 1995 ................ $ 1,120 $ 886 $ 200 $ 4,856 $ (141) $ (25) $ 6,896
Net income ................................ -- -- -- 565 -- -- 565
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 ...................... -- -- -- -- (60) -- (60)
Dividends paid ............................ -- -- -- (156) -- -- (156)
------- ------- ------- ------- ------- ------- -------
Balance, June 30, 1996 .................... $ 1,150 $ 901 $ 727 $ 5,265 $ (201) $ (25) $ 7,817
======= ======= ======= ======= ======= ======= =======
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
5
CITY NATIONAL BANCSHARES CORPORATION
AND SUBSIDIARIES
Consolidated Statement of Cash Flows (Unaudited)
Six Months Ended
June 30,
----------------------
In thousands ......................................... 1996 1995
-------- --------
Operating activities
Net income ........................................... $ 565 $ 563
Adjustments to reconcile net income
to net cash from operating activities:
Depreciation and amortization ...................... 158 62
Provision for possible loan losses ................. 33 119
Amortization of premium, net of discount
accretion on investment securities ............... 26 103
Gain on sales of investment securities
held to maturity ................................. (10) --
Gains and commissions on loans held for sale ....... (40) (34)
(Increase) decrease in accrued interest receivable ... (165) 179
Deferred income tax expense .......................... 80 8
Decrease in other assets ............................. 223 1,281
Increase (decrease) in accrued expenses
and other liabilities .............................. 59 (284)
-------- --------
Net cash provided by operating activities ............ 929 1,997
-------- --------
Investing activities
Loans originated for sale ............................ (1,439) (2,140)
Proceeds from sales of loans held for sale ........... 1,313 2,362
Increase in loans .................................... (5,321) (1,585)
Purchase of loans in conjunction with
branch acquisitions ................................ (4,035) (11,479)
Decrease (increase) in interest bearing
deposits with banks ................................ 286 (93)
Proceeds from maturities of investment
securities availabe for sale, including
principal payments and calls ....................... 3,446 175
Proceeds from maturities of investment
securities held to maturity, including
principal payments and calls ....................... 3,787 2,501
Purchases of investment securities
available for sale ................................. (2,200) (1,493)
Purchases of investment securities
held to maturity ................................... (10,025) (5,444)
Purchases of premises and equipment .................. (1,144) (392)
-------- --------
Net cash used in investing activities ................ (15,332) (17,588)
-------- --------
Financing activities
Deposits acquired in branch acquisition .............. 7,661 --
Decrease in deposits ................................. (5,468) (9,453)
Increase in short-term borrowings .................... 6,526 3,793
Proceeds from issuance of common stock ............... 45 --
Proceeds from issuance of preferred stock ............ 527 --
Dividends paid ....................................... (156) (140)
-------- --------
Net cash provided by (used in)
financing activities ............................... 9,135 (5,800)
-------- --------
Net decrease in cash and cash equivalents ............ (5,268) (21,391)
Cash and cash equivalents at beginning
of period .......................................... 10,294 27,131
-------- --------
Cash and cash equivalents at end of period ........... $ 5,026 $ 5,740
======== ========
Cash paid during the year:
Interest ............................................. $ 1,646 $ 1,236
Income taxes ......................................... 168 601
Noncash investing activities:
Transfer of loans to other real estate owned ......... 94 --
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 three
months ended June 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 CNBC preferred stock. The
branch was acquired for fair market value and continues a trend established in
1994 of selectively expanding into urban areas where CNB believes it can provide
a need for its unique personalized type of service.
Results of operations
Net income for the first half of 1996 was $565,000, virtually unchanged from
$563,000 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
14.94% and .88% for the 1996 first half and 18.71 % and 1.04% for the
corresponding 1995 period. Related earnings per share on a fully diluted basis
rose to $5.08 from $5.07.
1996 second quarter net income rose 10.1 % to $293,000 from $266,000 a year
earlier. Returns on average shareholders' equity and average assets were 15.34%
and .88% for the 1996 second quarter, while the corresponding 1995 returns were
17.64% and .99%. Related fully diluted per share earnings were $2.39 compared to
$2.13. Higher net interest income was the primary reason for the increase in
earnings.
Net interest income
Net interest income increased $169,000, from $1,169,000 in the first quarter of
1995 to $1,338,000 in the first quarter of 1996. A higher level of interest
earning assets, resulting primarily from increased loan volume, was the primary
reason for the increase.
In the first half of 1996, net interest income grew 16.8% to $2,608,000 from
$2,232,000 in the same 1995 period. Higher earning asset levels were also the
primary reason for this improvement. Average interest earning assets in the
first half of 1996 rose to $119.2 million from $101.9 million in 1995. Most of
this growth occurred within the loan portfolio, which totalled $54.1 million at
June 30,1996 compared to $44.7 million a year earlier, a 21 % 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 $8.1 million for the 1995 first six-month period to $9.9 million for the
similar 1996 period due primarily to the temporary excess liquidity created by
the branch acquisition. The investment portfolio increased from $55.1 million at
June 30,1995 to $60 million at June 30,1996. This growth occurred primarily in
U.S. Government agency securities as the Bank purchased $8.7 million of
medium-term callable fixed rate agency securities with various call dates
ranging from one to three years, to mitigate interest rate risk in the event the
bonds are called.
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8
Provision and reserve for possible loan losses
Changes in the reserve for possible loan losses are set forth below.
Six Months Three Months
Ended June 30, Ended June 30,
(Dollars in thousands) .................... 1996 1995 1996 1995
----- ----- ----- -----
Balance at beginning of period ............ $ 650 $ 625 $ 675 $ 750
Provision (credit) for possible
loan losses ............................ 33 119 23 (3)
Recoveries of previous charge-offs ........ 84 23 66 9
----- ----- ----- -----
767 767 764 756
Less: Charge-offs ......................... 67 17 64 6
----- ----- ----- -----
Balance at end of period .................. $ 700 $ 700 $ 700 $ 750
===== ===== ===== =====
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.
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.
(Dollars in thousands) June 30, December 31, June 30,
Reserve for possible loan losses
as a percentage of:
Total loans ............................. 1.29% 1.45% 1.93%
Total nonperforming loans ............... 78.83% 74.71% 90.33%
Total nonperforming assets
(nonperforming loans and OREO) ......... 83.75% 60.07% 65.79%
Net charge-offs (recoveries) as
a percentage of average loans ......... (.03)% 1.43% (.07)%
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 payment are 90 days
or more past due. Delinquent interest payments are credited to income when
received. The following table presents the principal amounts of non performing
loans past due 90 days or more and accruing.
<PAGE>
9
June 30, December 31, June 30,
(Dollars in thousands) 1996 1995 1995
- ---------------------- --------------------------------------
Nonaccrual loans
Commercial ............................. $143 $ 68 $ 20
Installment ............................ -- 2 3
Real estate ............................ 393 800 408
---- ---- ----
Total ................................... 536 839 431
---- ---- ----
Loans past due 90 days
or more and accruing
Commercial ............................. -- 1 88
Installment ............................ -- -- --
Real estate ............................ 351 30 167
---- ---- ----
Total ................................... 351 31 255
---- ---- ----
Total nonperforming loans ............... $888 $870 $686
==== ==== ====
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.
The reduction in nonaccrual loans during the first half resulted from the
favorable resolution of two real estate loans.
Other operating income
Other operating income, including the results of investment securities
transactions, decreased, from $321,000 in the second quarter of 1995 to $299,000
in the second quarter of 1996, due to a reduction in return item charges. In the
first half of 1996, other operating income was 25.4% lower than in the similar
1995 period due to the aforementioned $198,000 received from the RTC in 1995.
Other operating expenses
Other operating expenses rose 8.6% in the 1996 second quarter to $1,164,000 from
$1,071,000 in the 1995 second quarter, with the greatest increase arising from
higher occupancy and equipment expense, due to higher depreciation expense
associated with the renovation of the administrative office. First half 1996
other operating expense rose 13.5% compared to 1995 due to the effects of the
aforementioned renovation. Additional staffing costs incurred in connection with
the branch acquisition also contributed to higher operating expenses in both
1996 periods.
Occupancy and equipment expenses increased 110.8% in the 1996 first quarter from
a year earlier due to primarily higher depreciation resulting from the completed
renovations of the administrative offices
Income tax expense
<PAGE>
10
Income tax expense as a percentage of pretax income decreased from 37% to 34.9%
for the second quarter of 1996 compared to the second quarter of 1995 as well as
for the first half of 1996 compared to the first half 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 half 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 decreased slightly at June 30,1996 from
1995 year-end, while unrealized depreciation in the portfolio rose to $201,000
from $141,000 at those dates, reflecting the effects of an increase during the
half in interest rates.
Investment securities held to maturity
Investment securities held to maturity increased from $24.5 million at 1995
year-end to $30.7 million at the end of the 1996 first half reflecting the
purchase of $8.7 million of fixed-rate medium-term U.S. agency callable
securities. As a result of the aforementioned increase in rates, the unrealized
depreciation in the held to maturity portfolio rose from $60,000 at December
31,1995 to $612,000 at the end of the 1995 first quarter.
Loans
Loans held for sale rose from $555,000 at December 31,1995 to $613,000 at June
30,1996 while loans originated for sale declined from $2.1 million during the
1995 first half to $1.4 million in the 1996 first half. The increase in loans
from $44.7 million at December 31,1995 to $54.1 million at June 30, 1996
resulted primarily from $4 million in loans purchased in connection with the
branch acquisition. These loans consisted of one-to-four family residential
mortgages, all of which were performing.
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.
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
three months to the Corporation's liquidity came from the deposit assumption,
while the primary use of funds was for investment purchases.
<PAGE>
11
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 June 30,1996, the Corporation had a cumulative one-year static gap of a
negative $21 million, representing 16.99% 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 $7.8 million at June 30,1996
compared to $6.9 million to December 31,1995. In addition to the increase from
first half earnings, the Corporation issued $527,000 of preferred stock and
$45,000 of common stock. Stockholders' equity as a percentage of total assets
was 6.06% at June 30,1996, while the consolidated leverage ratio was 6.16%,
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 June 30,1996, the Corporation's core capital (Tier 1 ) and total (Tier 1 plus
Tier 2) risked-based capital ratios were 15.39% and 20.13%, respectively.
PART II Other information
<PAGE>
12
Item 4. Submission of matters to a Vote of Security Holders
a) The Annual Meeting of Stockholders of City National Bancshares Corporation
was held on May 23, 1996. The stockholders voted upon the election of four
persons, named in the proxy statement, to serve as directors of the Corporation.
The following directors were elected at the Annual Meeting with the number of
votes "For" and "Withheld" indicated. There were no abstentions.
Number of Votes
Name For Withheld
Douglas E. Anderson 73,155 82
Eugene Giscombe 73,066 171
Louis E. Prezeau 73,054 183
Barbara Bell 73,081 219
b) In addition, stockholders voted upon the ratification of the appointment of
KPMG Peat Marwick as independent auditors for the fiscal year ended December
31,1996. Shareholders voted 73,081 shares "For" the proposal and 53 shares
"Against".
Item 5. Other Matters
a) On March 21,1996, the Board approved the declaration of a $1.35 per share
dividend, payable on May 2,1996 to stockholders of record on April 2,1996.
Item 6a. Exhibits
(11 ) Statement re computation of per share earnings
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CITY NATIONAL BANCSHARES CORPORATION
(Registrant)
August 14,1996 /s/ Edward R. Wright
---------------------
Edward R. Wright
Senior Vice President and Chief Financial
Officer (Principal Financial and Accounting
Officer)
13
EXHIBIT 11. STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS City National
Bancshares Corporation Computation of Earnings Per Common Share on a Primary &
Fully Diluted Basis
In thousands, except per share data
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Net income
Net income applicable to primary
common shares .......................$ 293 $ 266 $ 565 $ 563
Interest expense on convertible
subordinated debentures, net of
income tax .......................... 3 3 6 6
Dividends on preferred stock .......... 2 -- -- --
-------- -------- -------- --------
Net income applicable to fully
diluted common shares ...............$ 288 $ 263 $ 559 $ 557
======== ======== ======== ========
Number of average shares
Primary ............................... 114,141 111,141 112,855 111,141
Fully diluted:
Average common shares outstanding ... 114,141 111,141 112,855 111,141
Average convertible subordinated
debentures converted to common shares 13,850 13,850 13,850 13,850
-------- -------- -------- -------
127,991 124,991 126,705 124,991
======== ======== ======== ========
Net income per share
Primary ...............................$ 2.55 $ 2.39 $ 5.08 $ 5.07
Fully diluted ......................... 2.27 2.13 4.52 4.50
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-END> JUN-30-1996 JUN-30-1995
<CASH> 5026 3344
<INT-BEARING-DEPOSITS> 35 321
<FED-FUNDS-SOLD> 0 6950
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 29234 30609
<INVESTMENTS-CARRYING> 30733 24494
<INVESTMENTS-MARKET> 30121 24234
<LOANS> 54126 44739
<ALLOWANCE> 700 650
<TOTAL-ASSETS> 124065 114410
<DEPOSITS> 103082 100889
<SHORT-TERM> 10187 3661
<LIABILITIES-OTHER> 1230 1215
<LONG-TERM> 1749 1749
0 0
727 200
<COMMON> 2051 2006
<OTHER-SE> 5039 4690
<TOTAL-LIABILITIES-AND-EQUITY> 124065 114410
<INTEREST-LOAN> 2245 1646
<INTEREST-INVEST> 1773 1710
<INTEREST-OTHER> 264 230
<INTEREST-TOTAL> 4282 3586
<INTEREST-DEPOSIT> 1523 1263
<INTEREST-EXPENSE> 151 91
<INTEREST-INCOME-NET> 2575 2113
<LOAN-LOSSES> 33 119
<SECURITIES-GAINS> 9 (1)
<EXPENSE-OTHER> 621 833
<INCOME-PRETAX> 868 894
<INCOME-PRE-EXTRAORDINARY> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 565 563
<EPS-PRIMARY> 5.08 5.07
<EPS-DILUTED> 4.52 4.50
<YIELD-ACTUAL> 7.33 7.45
<LOANS-NON> 3491 789
<LOANS-PAST> 536 44
<LOANS-TROUBLED> 0 0
<LOANS-PROBLEM> 0 0
<ALLOWANCE-OPEN> 650 625
<CHARGE-OFFS> 66 17
<RECOVERIES> 84 24
<ALLOWANCE-CLOSE> 700 750
<ALLOWANCE-DOMESTIC> 570 578
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 130 172
</TABLE>
