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 JUNE 30, 1996
COMMISSION FILE NO. 0-11786
VILLAGE BANCORP, INC.
(Exact name of Registrant as specified in its charter)
CONNECTICUT 06-1076844
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
25 PROSPECT STREET RIDGEFIELD, CONNECTICUT 06877
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code (203) 438-9551
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 _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS OUTSTANDING AT JULY 31, 1996
COMMON STOCK, $3.33 PAR VALUE 951,617 SHARES
<PAGE>
VILLAGE BANCORP, INC.
TABLE OF CONTENTS
PAGE NO.
--------
PART I. FINANCIAL INFORMATION:
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets
June 30, 1996 and December 31, 1995 (unaudited) . . . . . . 1
Condensed Consolidated Statements of Income For The
Three Months Ended June 30, 1996 and 1995 (unaudited)
Six Months Ended June 30, 1996 and 1995 (unaudited) . . . . 2
Condensed Consolidated Statements of Cash Flows For The
Six Months Ended June 30, 1996 and 1995 (unaudited) . . . . 3
Notes to Condensed Consolidated Financial Statements
(unaudited) . . . . . . . . . . . . . . . . . . . . . . . . 4
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . 8
PART II. OTHER INFORMATION:
ITEM 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 12
ITEM 2. Changes in Securities . . . . . . . . . . . . . . . . . . . 12
ITEM 3. Defaults Upon Senior Securities . . . . . . . . . . . . . . 12
ITEM 4. Results of votes of Security Holders . . . . . . . . . . . 12
ITEM 5. Other Information . . . . . . . . . . . . . . . . . . . . . 12
ITEM 6. (a). Exhibits . . . . . . . . . . . . . . . . . . . . . . 12
(b). Reports on Form 8-K . . . . . . . . . . . . . . . . . 12
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
<PAGE>
VILLAGE BANCORP, INC.
- --------------------------------------------------------------------------------
PART I. - FINANCIAL INFORMATION
<PAGE>
VILLAGE BANCORP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, 1996 Dec. 31, 1995
------------- -------------
(In thousands, except share data)
<S> <C> <C>
ASSETS
Cash and due from banks $ 9,540 $ 9,125
Federal funds sold 8,600 8,200
--------- ---------
Total cash and cash equivalents 18,140 17,325
Securities:
Available-for-sale (at fair value) 14,545 20,482
Held-to-maturity (market value of
$17,731 at June 30, 1996 and $14,294 at
December 31, 1995) 17,960 14,080
Loans, net of deferred loan fees - Note C 118,325 119,591
Allowance for loan losses (1,351) (1,311)
--------- ---------
Loans - net 116,974 118,280
Loans held for sale 230 552
Bank premises and equipment - net 1,563 1,550
Accrued interest and other assets 2,462 2,008
--------- ---------
TOTAL ASSETS $ 171,874 $ 174,277
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest bearing $ 19,280 $ 17,265
Interest bearing 136,501 141,274
--------- ---------
Total deposits 155,781 158,539
Accrued interest payable 925 1,161
Other liabilities 618 429
--------- ---------
Total liabilities 157,324 160,129
--------- ---------
Stockholders' Equity:
Common stock, par value $3.33 per share;
authorized - 2,000,000 shares, issued
and outstanding, 950,817 at June 30,
1996 and 950,317 at December 31, 1995 3,167 3,165
Additional paid-in capital 7,986 7,982
Retained earnings 3,469 2,960
Net unrealized (loss) gain on available-
for-sale securities, net of tax (72) 41
--------- ---------
Total stockholders' equity 14,550 14,148
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 171,874 $ 174,277
========= =========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
- 1 -
<PAGE>
VILLAGE BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1996 1995 1996 1995
-------- -------- -------- --------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans, including fees $ 2,555 $ 2,551 $ 5,203 $ 4,847
Investment securities:
Taxable 526 370 1,009 843
Tax-exempt 30 27 59 56
Federal funds sold 51 120 184 160
-------- -------- -------- --------
Total interest income 3,162 3,068 6,455 5,906
INTEREST EXPENSE ON DEPOSITS 1,229 1,154 2,557 2,088
-------- -------- -------- --------
NET INTEREST INCOME 1,933 1,914 3,898 3,818
PROVISION FOR LOAN LOSSES 30 55 60 105
-------- -------- -------- --------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 1,903 1,859 3,838 3,713
-------- -------- -------- --------
OTHER INCOME:
Security gains/(losses) - net 2 8 2 6
Other operating income 126 129 247 265
-------- -------- -------- --------
Total other income 128 137 249 271
-------- -------- -------- --------
OTHER EXPENSES:
Salaries and employee benefits 725 814 1,506 1,547
Net occupancy 142 130 295 269
Furniture and equipment 65 69 135 142
Data processing services 132 111 261 229
Regulatory assessments 1 80 2 134
Printing, stationery and supplies 37 49 80 101
Other operating expenses 296 288 565 531
-------- -------- -------- --------
Total other expenses 1,398 1,541 2,844 2,953
-------- -------- -------- --------
INCOME BEFORE PROVISION FOR INCOME TAXES 633 455 1,243 1,031
PROVISION FOR INCOME TAXES 212 190 430 430
-------- -------- -------- --------
NET INCOME $ 421 $ 265 $ 813 $ 601
======== ======== ======== ========
PER SHARE DATA - Note E:
Cash dividends declared $ .17 $ .11 $ .32 $ .22
Net income $ .44 $ .28 $ .86 $ .63
Number of shares outstanding 950,817 946,949 950,817 946,949
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
- 2 -
<PAGE>
VILLAGE BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended June 30,
1996 1995
-------- --------
(In thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 813 $ 601
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 60 105
Provision for depreciation and amortization 122 128
(Accretion) amortization of investment security
premiums discounts - net (230) (73)
Net decrease in deferred loan fees (54) (14)
(Decrease) increase in interest payable (236) 462
Increase in accrued interest and other assets (369) (194)
Increase in other liabilities 189 16
Origination of loans for sale (4,944) (625)
Proceeds from sales of loans 5,266 625
-------- --------
Net cash provided by operating activities 617 1,031
-------- --------
INVESTING ACTIVITIES:
Proceeds from sales of available-for-sale securities 2,025 4,917
Proceeds from maturities of available-for-sale securities 9,151 438
Proceeds from maturities of held-to-maturity securities 5,524 8,593
Purchases of available-for-sale securities (5,178) --
Purchases of held-to-maturity securities (9,433) (97)
Net decrease (increase) in loans 1,300 (14,016)
Purchases of premises and equipment (135) (123)
-------- --------
Net cash provided by (used in) investing activities 3,254 (288)
-------- --------
FINANCING ACTIVITIES:
Net (decrease) increase in deposits (2,758) 8,706
Cash dividends (304) (208)
Net proceeds from issuance of common stock 6 --
-------- --------
Net cash (used in) provided by financing activities (3,056) 8,498
-------- --------
INCREASE IN CASH AND CASH EQUIVALENTS 815 9,241
-------- --------
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 17,325 12,893
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 18,140 $ 22,134
======== ========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid on deposits $ 2,793 $ 1,626
Income tax payments, net of refunds of $149 478 490
Net unrealized (loss) gain on available-for-sale
securities, net of tax (113) 177
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
- 3 -
<PAGE>
VILLAGE BANCORP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE A - BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited condensed consolidated
financial statements reflect all adjustments necessary, consisting only of
normal recurring accruals, to present fairly the financial position, the results
of operations, cash flows and the changes in financial position of Village
Bancorp, Inc. ("Company") for the periods presented. In preparing such financial
statements, management is required to make estimates and assumptions that effect
the reported amounts. Actual results could differ significantly from these
estimates.
The Company's consolidated financial statements include the accounts of Village
Bancorp, Inc. and its wholly owned subsidiary The Village Bank & Trust Company
("Village") and have been prepared in accordance with generally accepted
accounting principles and conform with predominant practices used within the
banking industry.
Village is engaged in the business of commercial banking and operates four
branch banking offices in Fairfield and Litchfield counties in Connecticut, and
is principally engaged in lending and deposit gathering activities within these
counties.
While management believes that the disclosures presented are adequate so as not
to make the information misleading, it is suggested that these financial
statements be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's 1995 annual report.
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation." SFAS No. 123 establishes a fair value based method of accounting
for stock-based compensation plans and encourages, but does not require,
entities to adopt that method in place of the provisions of Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees," for all arrangements under which employees receive shares of stock
or other equity instruments of the employer or the employer incurs liabilities
to employees in amounts based on the price of the stock. SFAS No. 123 also
establishes fair value as the measurement basis for transactions in which an
entity acquires goods or services from non-employees in exchange for equity
instruments. The accounting provisions of SFAS No. 123 are effective for
transactions entered into after December 15, 1995. Effective January 1, 1996,
the Company adopted SFAS No. 123 and has decided that it will continue measuring
compensation cost for employee stock compensation plans in accordance with the
provisions of APB No. 25.
- 4 -
<PAGE>
VILLAGE BANCORP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED)
- --------------------------------------------------------------------------------
SFAS No. 114, "Accounting for Impairment of a Loan," as amended by SFAS No. 118
"Accounting by Creditors for Impairment of a Loan - Income Recognition and
Disclosures," which was adopted by the Company as of January 1, 1995, requires
recognition of an impairment of a loan when it is probable that either the
principal and/or interest are not collectible in accordance with the terms of
the loan agreement. Adoption of these statements did not result in any
adjustment to the allowance for loan losses as of January 1, 1995.
The recorded investment in loans that are considered to be impaired at June 30,
1996 was $441,000. Included in this amount is $441,000 of impaired loans for
which specific valuation allowances of $187,000 have been established. During
the first half of 1996 the average recorded investment in impaired loans was
approximately $539,000. No interest income was recognized on impaired loans,
either on the accrual or on the cash basis method of interest recognition.
Loan are placed on nonaccrual status when management believes that interest or
principal on such loans may not be collected in the normal course of business.
Interest payments received on loans in nonaccrual status are applied, based on
management's judgement as to the collectibility of loan principal, either as a
reduction of principal or as interest income. At June 30, 1996, the amount of
both nonaccrual loans and nonperforming assets was $647,000.
NOTE B - SECURITIES
The amortized cost and the approximate fair values of securities were as follows
(in thousands):
<TABLE>
<CAPTION>
June 30, 1996
------------------------------------------------------------------
Amortized Unrealized Fair
Cost Gain (Loss) Value
------- ------- ------- -------
<S> <C> <C> <C> <C>
SECURITIES HELD-TO-MATURITY
U.S. Treasury Securities $10,186 $ 43 $ (191) $10,038
U.S. Government Agency 5,216 15 (84) 5,147
Mortgage-backed securities of
U.S. Government agencies 67 1 -- 68
Obligations of states and
political subdivision 2,491 23 (36) 2,478
------- ------- ------- -------
TOTAL $17,960 $ 82 $ (311) $17,731
======= ======= ======= =======
SECURITIES AVAILABLE-FOR-SALE
U.S. Treasury Securities $12,827 $ 2 $ (95) $12,734
U.S. Government Agency 1,000 1 -- 1,001
Mortgage-backed securities of
U.S. Government agencies 794 -- (35) 759
Other 53 -- (2) 51
------- ------- ------- -------
TOTAL $14,674 $ 3 $ (132) $14,545
======= ======= ======= =======
</TABLE>
- 5 -
<PAGE>
VILLAGE BANCORP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED)
- --------------------------------------------------------------------------------
(Continued)
<TABLE>
<CAPTION>
December 31, 1995
------------------------------------------------------------------
Amortized Unrealized Fair
Cost Gain (Loss) Value
------- ------- ------- -------
<S> <C> <C> <C> <C>
SECURITIES HELD-TO-MATURITY
U.S. Treasury Securities $ 6,054 $ 124 $ (1) $ 6,177
Mortgage-backed securities of
U.S. Government agencies 5,582 59 (8) 5,633
Obligations of states and
political subdivision 2,444 53 (13) 2,484
------- ------- ------- -------
TOTAL $14,080 $ 236 $ (22) $14,294
======= ======= ======= =======
SECURITIES AVAILABLE-FOR-SALE
U.S. Treasury Securities $16,325 $ 56 $ -- $16,381
Mortgage-backed securities of
U.S. Government agencies 4,029 28 (14) 4,043
Other 59 -- (1) 58
------- ------- ------- -------
TOTAL $20,413 $ 84 $ (15) $20,482
======= ======= ======= =======
</TABLE>
At June 30, 1996 and December 31, 1995 securities with a book value of $894,000
and $614,000, respectively, were pledged to secure public deposits and for other
purposes as required by law and banking regulation.
NOTE C - LOANS
June 30, 1996 Dec. 31, 1995
------------- -------------
(In thousands)
Real estate $ 94,855 $ 96,384
Commercial and financial 11,325 12,892
Installment and consumer credit 12,339 10,562
Deferred loan fees (194) (247)
--------- ---------
TOTAL $ 118,325 $ 119,591
========= =========
NOTE D - STANDBY LETTERS OF CREDIT
On June 30, 1996, standby letters of credit totaled $1,810,000.
NOTE E - STOCKHOLDERS' EQUITY
An $.11 per share cash dividend was distributed February 3, 1995 to
stockholders of record on January 23, 1995. An $.11 per share cash dividend was
distributed May 5, 1995 to stockholders of record on April 26, 1995.
- 6 -
<PAGE>
VILLAGE BANCORP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED)
(Continued)
- --------------------------------------------------------------------------------
A $.15 per share cash dividend was distributed February 2, 1996 to
stockholders of record on January 19, 1996. A $.17 per share cash dividend was
distributed May 3, 1996 to stockholders of record on April 25, 1996.
NOTE F - PENDING BUILDING
The Bank announced plans to build a three-story, 17,000 square foot
building on Parcel 3 of the Danbury Redevelopment Area on National Place, in
Danbury, Connecticut. All necessary approvals to build and open this office have
been received. Construction has begun with completion estimated to occur in the
second quarter of 1997. The first floor will contain a branch banking office
with the back office deposit operations department occupying the second floor.
- 7 -
<PAGE>
VILLAGE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
- --------------------------------------------------------------------------------
GENERAL
Village Bancorp, Inc. ("Company") through its only subsidiary, The Village
Bank & Trust Company ("Village") had total assets of $171,874,000 on June 30,
1996 in comparison to total assets of $174,277,000 on December 31, 1995. This is
a decrease of $2,403,000 or 1.4%.
For the three month periods ended June 30, 1995 and 1996, the Company's
net income increased from $265,000 for the 1995 period to $421,000 for the 1996
period. Net interest income increased $19,000 (1.0%) from $1,914,000 for the
1995 period to $1,933,000 for the 1996 period.
For the six month periods ended June 30, 1995 and 1996, the Company's net
income increased from $601,000 for the 1995 period to $813,000 for the 1996
period. Net interest income increased $80,000 (2.1%) from $3,818,000 for the
1995 period to $3,898,000 for the 1996 period.
ASSETS AND RELATED INCOME ANALYSIS (Six Month Comparison)
Loans outstanding on June 30, 1996 totaled $118,325,000 which is a
decrease of $1,266,000 (1.1%) from the $119,591,000 outstanding at December 31,
1995. This decrease in loans is primarily due to a softening of loan demand
coupled with intense competition in the Banks trade areas. Loan income increased
$356,000 (7.3%) from $4,847,000 for the 1995 period to $5,203,000 for the 1996
period. This increase is due to an increase in average outstanding loans from
$113,578,000 in the 1995 period to $119,336,000 in the 1996 period, coupled with
an increase in the average rate earned from 8.54% in the 1995 period to 8.72% in
the 1996 period.
Securities, which consist of securities held-to-maturity and securities
available-for-sale, decreased $2,057,000 (6.0%) from $34,562,000 at December 31,
1995 to $32,505,000 at June 30, 1996. Security income increased $169,000 (18.8%)
from $899,000 in the period ending June 30, 1995 to $1,068,000 in the 1996
period. This increase was due to an increase in the average dollar amount of
securities held, from $28,953,000 in the 1995 period to $37,244,000 in the 1996
period, offset by a decrease in the average rate earned from 6.21% in the 1995
period to 5.74% in the 1996 period. The Company holds
- 8 -
<PAGE>
VILLAGE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Continued)
- --------------------------------------------------------------------------------
securities held-to-maturity until maturity and does not trade them. Securities
classified as available-for-sale are used to compensate for liquidity
forecasting deviations.
Federal funds sold increased $400,000 (4.9%) from $8,200,000 at December
31, 1995 to $8,600,000 at June 30, 1996. Federal funds sold income increased
$24,000 (15.0%) from $160,000 for the 1995 period to $184,000 for the 1996
period, primarily due to an increase in the average dollar amount outstanding
from $5,276,000 in the 1995 period to $6,968,000 in the 1996 period, offset by a
decrease in the average rate earned from 6.07% in the 1995 period to 5.28% for
the 1996 period.
LIABILITIES AND RELATED EXPENSE ANALYSIS (Six Month Comparison)
Deposits decreased $2,758,000 (1.7%) from $158,539,000 at December 31,
1995 to $155,781,000 at June 30, 1996. Interest on deposits increased $469,000
(22.5%) from $2,088,000 for the 1995 period to $2,557,000 for the 1996 period.
This increase was primarily attributable to an increase in the average rate paid
from 2.96% in the 1995 period to 3.24% in the 1996 period, coupled with an
increase in the average outstandings from $141,190,000 for the 1995 period to
$157,878,000 for the 1996 period.
Data processing services expense increased $32,000 (14.0%) primarily as a
result of utilization of new services coupled with increased volumes.
ASSETS AND RELATED INCOME ANALYSIS (Three Month Comparison)
Loans outstanding increased $45,000 during the three month period ended
June 30, 1996. This compares to the $6,954,000 (6.1%) increase in the 1995
period. Loan income increased $4,000 (.2%) from $2,551,000 for the 1995 period
to $2,555,000 for the 1996 period. This increase is due to an increase in the
average outstanding loans from $117,533,000 for the 1995 period to $118,791,000
for the 1996 period offset by a decrease in the average rate earned from 8.68%
for the 1995 period to 8.60% for the 1996 period.
Securities, which consist of securities held-to-maturity and securities
available-for-sale, decreased $6,804,000 (17.3%) during the 1996 period as
compared to a decrease of $6,760,000 (23.3%) for
- 9 -
<PAGE>
VILLAGE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Continued)
- --------------------------------------------------------------------------------
the 1995 period. Security income increased from $397,000 for the 1995 period to
$556,000 for the 1996 period, primarily as a result of an increase in the
average dollar amount of securities held from $22,946,000 for the 1995 period to
$38,894,000 for the 1996 period, offset by a decrease in the average rate earned
from 6.92% for the 1995 period to 5.72% for the 1996 period.
Federal funds sold decreased $1,150,000 (11.8%) during the 1996 period as
compared to an increase of $9,200,000 (287.5%) for the 1995 period. Federal
funds sold income decreased $69,000 (57.5%) from $120,000 in the 1995 period to
$51,000 in the 1996 period primarily as a result of a decrease in the average
dollar amount outstanding from $7,826,000 for the 1995 period as compared to
$3,947,000 for the 1996 period couple with a decrease in the average rate earned
of 6.13% for the 1995 period as compared to 5.17% for the 1996 period.
LIABILITIES AND RELATED EXPENSE ANALYSIS (Three Month Comparison)
Deposits decreased $6,559,000 (4.0%) during the 1996 period as compared to
an increase of $10,719,000 (7.6%) for the 1995 period. Interest on deposits
increased $75,000 (6.5%) from $1,154,000 for the 1995 period to $1,229,000 for
the 1996 period. This increase is mainly attributable to an increase in the
average dollar amount outstanding from $143,246,000 for the 1995 period to
$156,085,000 for the 1996 period offset by a decrease in the average rate paid
from 3.22% in the 1995 period to 3.15% in the 1996 period.
LIQUIDITY
Liquidity is the ability to provide funds for loan requests, unexpected
deposit outflows and meeting other recurring financial obligations. Cash and
cash equivalents at June 30, 1996 were $18,140,000 or 10.6% of total assets as
compared to $17,325,000 or 9.9% of total assets at December 31, 1995. The Bank
also maintains excess stored liquidity reserves to compensate for liquidity
forecasting deviations. These reserves are comprised of investment grade
securities that are highly marketable and liquid. The primary source of
liquidity, cash and due from banks and federal funds sold, have historically
surpassed the liquidity needs of the Company. Management closely monitors the
Bank's liquidity/cash flow position and does not anticipate any liquidity
problems in the future.
- 10 -
<PAGE>
VILLAGE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Continued)
- --------------------------------------------------------------------------------
PROVISION FOR LOAN LOSSES
The provision for loan losses is closely monitored by management to maintain a
provision and an allowance that is considered adequate. There is no assurance
that the Bank will not be required to make future adjustments to the allowance
in response to changing economic conditions or regulatory examinations.
CAPITAL RESOURCES
The table below lists the minimum capital requirements along with the
Company's capital position at June 30, 1996:
Capital Minimum Capital Bank's Capital
Standard Requirement Position at
-------- ----------- -----------
Total capital to risk
weighted assets 8.00% 16.79%
Stockholders' equity to
risk weighted assets 4.00% 15.54%
Leverage ratio 3.0 - 5.0% 8.49%
- 11 -
<PAGE>
VILLAGE BANCORP, INC.
- --------------------------------------------------------------------------------
PART II. - OTHER INFORMATION
<PAGE>
VILLAGE BANCORP, INC.
- --------------------------------------------------------------------------------
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings Not Applicable
Item 2. Changes in Securities Not Applicable
Item 3. Defaults Upon Senior Securities Not Applicable
Item 4. Results of Votes of Security Holders Not Applicable
Item 5. Other Information Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - None
(b) Reports on Form 8-K - There were no reports on Form 8-K filed for the
three months ended June 30, 1996.
- 12 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
Village Bancorp, Inc.
---------------------
(Registrant)
Date: August 14, 1996 /s/ James R Umbarger
-------------------------- -----------------------------------------
James R. Umbarger, Executive Vice
President and Chief Financial Officer
Date: August 14, 1996 /s/ Gerard P Shpunt
-------------------------- -----------------------------------------
Gerard P. Shpunt - Senior Vice President
and Controller
- 13 -
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 9,540
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 8,600
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 14,545
<INVESTMENTS-CARRYING> 17,960
<INVESTMENTS-MARKET> 17,731
<LOANS> 118,325
<ALLOWANCE> 1,351
<TOTAL-ASSETS> 171,874
<DEPOSITS> 155,781
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,543
<LONG-TERM> 0
0
0
<COMMON> 3,167
<OTHER-SE> 11,383
<TOTAL-LIABILITIES-AND-EQUITY> 171,874
<INTEREST-LOAN> 5,203
<INTEREST-INVEST> 1,068
<INTEREST-OTHER> 184
<INTEREST-TOTAL> 6,455
<INTEREST-DEPOSIT> 2,557
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 3,898
<LOAN-LOSSES> 60
<SECURITIES-GAINS> 2
<EXPENSE-OTHER> 2,844
<INCOME-PRETAX> 1,243
<INCOME-PRE-EXTRAORDINARY> 1,243
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 813
<EPS-PRIMARY> 0.86
<EPS-DILUTED> 0.86
<YIELD-ACTUAL> 7.89
<LOANS-NON> 647
<LOANS-PAST> 14
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 441
<ALLOWANCE-OPEN> 1,311
<CHARGE-OFFS> 20
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1,351
<ALLOWANCE-DOMESTIC> 1,351
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 819
</TABLE>
