UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 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 OCTOBER 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
September 30, 1996 and December 31, 1995 (unaudited) ........ 1
Condensed Consolidated Statements of Income For The
Three Months Ended September 30, 1996 and 1995 (unaudited)
Nine Months Ended September 30, 1996 and 1995 (unaudited) .. 2
Condensed Consolidated Statements of Cash Flows For The
Nine Months Ended September 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)
- -------------------------------------------------
ASSETS Sept. 30, 1996 Dec. 31, 1995
- ------ -------------- -------------
(In thousands, except share data)
Cash and due from banks $ 8,746 $ 9,125
Federal funds sold 3,150 8,200
--------- ---------
Total cash and cash equivalents 11,896 17,325
Securities:
Available-for-sale (at fair value) 12,924 20,482
Held-to-maturity (market value of
$17,496 at Sept. 30, 1996 and $14,294 at
December 31, 1995) 17,666 14,080
Loans, net of deferred loan fees - Note C 125,222 119,591
Allowance for loan losses (1,242) (1,311)
--------- ---------
Loans - net 123,980 118,280
Loans held for sale 150 552
Bank premises and equipment - net 1,522 1,550
Accrued interest and other assets 3,232 2,008
--------- ---------
TOTAL ASSETS $ 171,370 $ 174,277
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Deposits:
Noninterest bearing $ 16,802 $ 17,265
Interest bearing 137,705 141,274
--------- ---------
Total deposits 154,507 158,539
Accrued interest payable 1,099 1,161
Other liabilities 883 429
--------- ---------
Total liabilities 156,489 160,129
--------- ---------
Stockholders' Equity:
Common stock, par value $3.33 per share;
authorized - 2,000,000 shares, issued
and outstanding, 951,617 at Sept. 30,
1996 and 950,317 at December 31, 1995 3,169 3,165
Additional paid-in capital 7,993 7,982
Retained earnings 3,765 2,960
Net unrealized (loss) gain on available-
for-sale securities, net of tax (46) 41
--------- ---------
Total stockholders' equity 14,881 14,148
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 171,370 $ 174,277
========= =========
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
- 1 -
<PAGE>
VILLAGE BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - (UNAUDITED)
- ---------------------------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPT. 30, SEPT. 30,
1996 1995 1996 1995
---- ---- ---- ----
(In thousands, except per share data)
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans, including fees $2,633 $2,665 $7,836 $7,512
Investment securities:
Taxable 456 386 1,465 1,229
Tax-exempt 33 28 92 84
Federal funds sold 43 140 227 300
----- ----- ----- -----
Total interest income 3,165 3,219 9,620 9,125
INTEREST EXPENSE ON DEPOSITS 1,170 1,282 3,727 3,370
----- ----- ----- -----
NET INTEREST INCOME 1,995 1,937 5,893 5,755
PROVISION FOR LOAN LOSSES 30 75 90 180
----- ----- ----- -----
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 1,965 1,862 5,803 5,575
----- ----- ----- -----
OTHER INCOME:
Security gains/(losses) - net (7) (8) (5) (2)
Other operating income 124 118 371 383
----- ----- ----- -----
Total other income 117 110 366 381
----- ----- ----- -----
OTHER EXPENSES:
Salaries and employee benefits 768 714 2,274 2,261
Net occupancy 136 137 431 406
Furniture and equipment 67 69 202 211
Data processing services 137 129 398 358
Regulatory assessments 1 (5) 3 129
Printing, stationery and supplies 46 56 126 157
Other operating expenses 419 299 984 830
----- ----- ----- -----
Total other expenses 1,574 1,399 4,418 4,352
----- ----- ----- -----
INCOME BEFORE PROVISION FOR INCOME TAXES 508 573 1,751 1,604
PROVISION FOR INCOME TAXES 50 255 480 685
----- ----- ----- -----
NET INCOME $ 458 $ 318 $1,271 $ 919
====== ====== ====== =====
PER SHARE DATA - Note E:
Cash dividends declared $ .17 $ .11 $ .49 $ .33
Net income $ .48 $ .34 $ 1.34 $ .97
Number of shares outstanding 951,617 946,633 951,617 946,633
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
- 2 -
<PAGE>
VILLAGE BANCORP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (UNAUDITED)
- -------------------------------------------------------------
Nine Months Ended Sept. 30,
1996 1995
---- ----
OPERATING ACTIVITIES: (In thousands)
Net income $ 1,271 $ 919
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 90 180
Provision for depreciation and amortization 183 194
(Accretion) amortization of investment security
(premiums) discounts - net (224) (118)
Net decrease in deferred loan fees (8) (51)
(Decrease) increase in interest payable (62) 737
(Increase) decrease in accrued int. and other assets (1,159) 193
Increase in other liabilities 454 71
Origination of loans for sale (6,428) (2,016)
Proceeds from sales of loans 6,830 1,891
-------- --------
Net cash provided by operating activities 947 2,000
-------- --------
INVESTING ACTIVITIES:
Proceeds from sales of available-for-sale securities 2,177 5,335
Proceeds from maturities of avail.-for-sale securities 13,732 2,483
Proceeds from maturities of held-to-maturity securities 5,775 9,819
Purchases of available-for-sale securities (8,207) (10,614)
Purchases of held-to-maturity securities (9,433) (347)
Net increase in loans (5,782) (14,352)
Purchases of premises and equipment (155) (154)
-------- --------
Net cash used in investing activities (1,893) (7,830)
-------- --------
FINANCING ACTIVITIES:
Net (decrease) increase in deposits (4,032) 5,888
Cash dividends (466) (312)
Net proceeds from issuance of common stock 15 3
-------- --------
Net cash (used in) provided by financing activities (4,483) 5,579
-------- --------
DECREASE IN CASH AND CASH EQUIVALENTS (5,429) (251)
-------- --------
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 17,325 12,893
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 11,896 $ 12,642
======== ========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid on deposits $ 3,789 $ 2,633
Income tax payments, net of refunds of $149 579 615
Change in net unrealized (loss) gain on
available-for-sale securities, net of tax (87) 139
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 September
30, 1996 was $380,000. Included in this amount is $380,000 of impaired loans for
which specific valuation allowances of $89,000 have been established. During the
first nine months of 1996 the average recorded investment in impaired loans was
approximately $486,000. No interest income was recognized on impaired loans,
either on the accrual or on the cash basis method of interest recognition.
Loans 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 judgment as to the collectibility of loan principal, either as a
reduction of principal or as interest income. At September 30, 1996, the amount
of both nonaccrual loans and nonperforming assets was $631,000.
NOTE B - SECURITIES
The amortized cost and the approximate fair values of securities were as follows
(in thousands):
September 30, 1996
------------------------------------------
Amortized Unrealized Fair
Cost Gain (Loss) Value
------- ------- ------- -------
SECURITIES HELD-TO-MATURITY
U.S. Treasury securities $10,167 $ 39 $ (170) $10,036
U.S. Government agency 4,944 12 (70) 4,886
Mortgage-backed securities of
U.S. Government agencies 65 1 -- 66
Obligations of states and
political subdivision 2,490 41 (23) 2,508
------- ------- ------- -------
TOTAL $17,666 $ 93 $ (263) $17,496
======= ======= ======= =======
SECURITIES AVAILABLE-FOR-SALE
U.S. Treasury securities $12,394 $ 7 $ (76) $12,325
Mortgage-backed securities of
U.S. Government agencies 564 -- (14) 550
Other 49 -- -- 49
------- ------- ------- -------
TOTAL $13,007 $ 7 $ (90) $12,924
======= ======= ======= =======
- 5 -
<PAGE>
VILLAGE BANCORP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (UNAUDITED)
(Continued)
- ------------------------------------------------------------------
December 31, 1995
------------------------------------------
Amortized Unrealized Fair
Cost Gain (Loss) Value
------- ------- ------- -------
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
======= ======= ======= =======
At September 30, 1996 and December 31, 1995 securities with a book value of
$892,000 and $614,000, respectively, were pledged to secure public deposits and
for other purposes as required by law and banking regulation.
NOTE C - LOANS
Sept. 30, 1996 Dec. 31, 1995
-------------- -------------
(In thousands)
Real estate $ 102,659 $ 96,384
Commercial and financial 11,335 12,892
Installment and consumer credit 11,467 10,562
Deferred loan fees (239) (247)
--------- ---------
TOTAL $ 125,222 $ 119,591
========= =========
NOTE D - STANDBY LETTERS OF CREDIT
On September 30, 1996, standby letters of credit totaled $2,551,000.
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. An $.11 per
share cash dividend was distributed August 4, 1995 to stockholders of record on
July 25, 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. A $.17 per
share cash dividend was distributed August 2, 1996 to stockholders of record on
July 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 midyear 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 $171,370,000 on September
30, 1996 in comparison to total assets of $174,277,000 on December 31, 1995.
This is a decrease of $2,907,000 or 1.7%.
For the three month periods ended September 30, 1995 and 1996, the Company's
net income increased from $318,000 for the 1995 period to $458,000 for the 1996
period. Net interest income increased $58,000 (3.0%) from $1,937,000 for the
1995 period to $1,995,000 for the 1996 period.
For the nine month periods ended September 30, 1995 and 1996, the Company's
net income increased from $919,000 for the 1995 period to $1,271,000 for the
1996 period. Net interest income increased $138,000 (2.4%) from $5,755,000 for
the 1995 period to $5,893,000 for the 1996 period.
ASSETS AND RELATED INCOME ANALYSIS (Nine Month Comparison)
Loans outstanding on September 30, 1996 totaled $125,222,000 which is an
increase of $5,631,000 (4.7%) from the $119,591,000 outstanding at December 31,
1995. This increase in loans is primarily due to an increase in loan demand
coupled with an increased marketing effort by the Bank. Loan income increased
$324,000 (4.3%) from $7,512,000 for the 1995 period to $7,836,000 for the 1996
period. This increase is due to an increase in average outstanding loans from
$115,822,000 in the 1995 period to $120,469,000 in the 1996 period, coupled with
a slight increase in the average rate earned from 8.65% in the 1995 period to
8.67% in the 1996 period.
Securities, which consist of securities held-to-maturity and securities
available-for-sale, decreased $3,972,000 (11.5%) from $34,562,000 at December
31, 1995 to $30,590,000 at September 30, 1996. Securities income increased
$244,000 (18.6%) from $1,313,000 in the period ending September 30, 1995 to
$1,557,000 in the 1996 period. This increase was due to an increase in the
average dollar amount of securities held, from $28,220,000 in the 1995 period to
$35,823,000 in the 1996 period, offset by a decrease in the average rate earned
from 6.20% in the 1995 period to 5.80% in the 1996 period.
- 8 -
<PAGE>
VILLAGE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Continued)
- --------------------------------------------------------------------------------
The Company holds 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 decreased $5,050,000 (61.6%) from $8,200,000 at December
31, 1995 to $3,150,000 at September 30, 1996. Federal funds sold income
decreased $73,000 (24.3%) from $300,000 for the 1995 period to $227,000 for the
1996 period, primarily due to a decrease in the average dollar amount
outstanding from $6,803,000 in the 1995 period to $5,726,000 in the 1996 period,
coupled with a decrease in the average rate earned from 5.88% in the 1995 period
to 5.29% for the 1996 period.
LIABILITIES AND RELATED EXPENSE ANALYSIS (Nine Month Comparison)
Deposits decreased $4,032,000 (2.5%) from $158,539,000 at December 31, 1995
to $154,507,000 at September 30, 1996. Interest on deposits increased $357,000
(10.6%) from $3,370,000 for the 1995 period to $3,727,000 for the 1996 period.
This increase was primarily attributable to an increase in the average rate paid
from 3.10% in the 1995 period to 3.18% in the 1996 period, coupled with an
increase in the average outstandings from $144,730,000 for the 1995 period to
$156,299,000 for the 1996 period.
Data processing services expense increased $40,000 (11.2%) primarily as a
result of utilization of new services coupled with increased volumes.
Other operating expense increased $154,000 (18.6%) from $830,000 in the 1995
period to $984,000 in the 1996 period, primarily as a result of an increase in
the legal and professional fees category.
ASSETS AND RELATED INCOME ANALYSIS (Three Month Comparison)
Loans outstanding increased $6,897,000 (5.8%) during the three month period
ended September 30, 1996. This compares to a $46,000 increase in the 1995
period. Loan income decreased $32,000 (1.2%) from $2,665,000 for the 1995 period
to $2,633,000 for the 1996 period. This decrease is due to a decrease in the
average rate earned from 8.86% for the 1995 period to 8.58% for the 1996 period
offset by an increase in the average outstanding loans from $120,320,000 for the
1995 period to $122,734,000 for the 1996 period.
Securities, which consist of securities held-to-maturity and securities
available-for-sale, decreased $1,915,000 (5.9%) during the 1996 period as
compared to an increase of $7,181,000 (32.3%) for
- 9 -
<PAGE>
VILLAGE BANCORP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Continued)
- --------------------------------------------------------------------------------
the 1995 period. Securities income increased from $414,000 for the 1995 period
to $489,000 for the 1996 period, primarily as a result of an increase in the
average dollar amount of securities held from $26,748,000 for the 1995 period to
$32,980,000 for the 1996 period, offset by a decrease in the average rate earned
from 6.19% for the 1995 period to 5.93% for the 1996 period.
Federal funds sold decreased $5,450,000 (63.4%) during the 1996 period as
compared to a decrease of $7,800,000 (62.9%) for the 1995 period. Federal funds
sold income decreased $97,000 (69.3%) from $140,000 in the 1995 period to
$43,000 in the 1996 period primarily as a result of a decrease in the average
dollar amount outstanding from $9,869,000 for the 1995 period as compared to
$3,244,000 for the 1996 period coupled with a decrease in the average rate
earned of 5.67% for the 1995 period as compared to 5.30% for the 1996 period.
LIABILITIES AND RELATED EXPENSE ANALYSIS (Three Month Comparison)
Deposits decreased $1,274,000 (.8%) during the 1996 period as compared to a
decrease of $2,818,000 (1.9%) for the 1995 period. Interest on deposits
decreased $112,000 (8.7%) from $1,282,000 for the 1995 period to $1,170,000 for
the 1996 period. This decrease is mainly attributable to a decrease in the
average rate paid from 3.38% in the 1995 period to 3.06% in the 1996 period
offset by an increase in the average dollar amount outstanding from $151,933,000
for the 1995 period to $153,030,000 for 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 September 30, 1996 were $11,896,000 or 6.9% 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 September 30, 1996:
Capital Minimum Capital Company's Capital
Standard Requirement Position
-------- ---------------- -----------------
Total capital to risk
weighted assets 8.00% 14.78%
Stockholders' equity to
risk weighted assets 4.00% 13.64%
Leverage ratio 3.0 - 5.0% 8.81%
- 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 - The Company's adoption of a Stockholders Rights
Plan was reported on Form 8-K which was filed on September 19, 1996.
No other reports on Form 8-K were filed for the three month period
ended September 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: November 13, 1996 /s/ Robert V. Macklin
------------------- ----------------------------------------
Robert V. Macklin, President and
Chief Executive Officer
Date: November 13, 1996 /s/ James R. Umbarger
------------------- ---------------------------------------
James R. Umbarger, Executive Vice
President and Chief Financial Officer
- 13 -
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 8,746
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 3,150
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 12,924
<INVESTMENTS-CARRYING> 17,666
<INVESTMENTS-MARKET> 17,496
<LOANS> 125,222
<ALLOWANCE> 1,242
<TOTAL-ASSETS> 171,370
<DEPOSITS> 154,507
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,982
<LONG-TERM> 0
0
0
<COMMON> 3,169
<OTHER-SE> 11,712
<TOTAL-LIABILITIES-AND-EQUITY> 171,370
<INTEREST-LOAN> 7,836
<INTEREST-INVEST> 1,557
<INTEREST-OTHER> 227
<INTEREST-TOTAL> 9,620
<INTEREST-DEPOSIT> 3,727
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 5,893
<LOAN-LOSSES> 90
<SECURITIES-GAINS> (5)
<EXPENSE-OTHER> 4,418
<INCOME-PRETAX> 1,751
<INCOME-PRE-EXTRAORDINARY> 1,751
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,271
<EPS-PRIMARY> 1.34
<EPS-DILUTED> 1.34
<YIELD-ACTUAL> 8.07
<LOANS-NON> 631
<LOANS-PAST> 1,217
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 380
<ALLOWANCE-OPEN> 1,311
<CHARGE-OFFS> 170
<RECOVERIES> 11
<ALLOWANCE-CLOSE> 1,242
<ALLOWANCE-DOMESTIC> 1,242
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 817
</TABLE>
