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, 1995
Commission File Number: 000-18507
Citi-Bancshares, Inc.
(Exact name of registrant as specified in its charter)
Florida 59-2298309
(State Or Other Jurisdiction Of (Internal Revenue Service Employer
Incorporation Or Organization) Identification Number)
1211 N. Boulevard W., Leesburg, Florida 34748
(Address of principal executive offices) (Zip Code)
904-787-5111
(Registrant's telephone number, including area code)
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.
4,047,643
<PAGE>
FINANCIAL STATEMENTS (UNAUDITED)
CITI-BANCSHARES, INC. AND SUBSIDIARY
LEESBURG, FLORIDA
SEPTEMBER 30, 1995
CONTENTS
Part I - Financial Information Page
Item 1.
Condensed Consolidated Balance Sheet 1
Condensed Consolidated Statement of Income 2
Condensed Consolidated Statements of Changes In
Stockholders' Equity 3
Condensed Consolidated Statements of Cash Flows 4-5
Notes to Condensed Consolidated Financial Statements 6-8
Item 2.
Management's Discussion and Analysis of Financial 9-15
Conditions and Results of Operations.
Part II - Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information 16
See attached
Item 6. Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
ended September 30, 1995.
Signatures
Pursuant to the requiremtns of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CITI-BANCSHARES, INC.
(REGISTRANT)
Dated: October 20, 1995 By /s/ K.W. MULLIS
K. W. MULLIS
PRESIDENT
Dated: October 20, 1995 By /s/ BOBBY A. SULLIVAN
BOBBY A. SULLIVAN
SECRETARY
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEETS
CITI-BANCSHARES, INC. AND SUBSIDIARY - LEESBURG, FLORIDA
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
(Unaudited) (Audited) (Unaudited)
Month End as Year End as Month End as
of 9/30/95 of 12/31/94 of 9/30/94
---------------------------------------------------------------------
<S> <C> <C> <C>
Cash and Demand Deposits Due From Banks $14,370 $14,321 $10,573
Investment Securities (Market Value 9/30/95 -
$208,577; 12/31/94 - $203,881; 9/30/94 -
$205,522) $206,137 $206,547 $206,440
Fed Funds Sold 7,754 0 0
Loan Receivables 221,843 199,976 195,117
Less: Unearned Income (881) (1,024) (1,100)
Allowance For Loan Losses (3,234) (2,994) (2,938)
--------------------- ------------------- ---------------------
Loan Receivables, Net 217,728 195,958 191,079
Real Estate Owned 613 687 797
Premises and Equipment, Net 6,880 6,807 6,924
Accrued Interest Receivable 4,336 3,974 3,924
Other Assets 2,073 4,534 2,687
--------------------- ------------------- ---------------------
Total Assets 459,891 432,828 422,424
===================== =================== =====================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-Bearing 35,528 34,540 33,202
Interest -Bearing 368,694 354,327 347,567
--------------------- ------------------- ---------------------
Total Deposits 404,222 388,867 380,769
Federal Funds Purchased and Securities Sold
Under Agreements to Repurchase 7,834 5,633 2,831
Accrued Interest Payable 3,869 2,393 2,062
Other Liabilities 866 1,959 295
--------------------- ------------------- ---------------------
Total Liabilities 416,791 398,852 385,957
--------------------- ------------------- ---------------------
Stockholders' Equity
Common Stock - Par Value $.01 Per Share;
Authorized 10,000,000 Shares; Issued
4,184,631 Shares 42 42 42
Capital Surplus 11,208 11,208 11,208
Retained Earnings 32,106 27,338 27,212
Less: Treasury Stock at Cost (136,988
Shares in 1995 and 1994) (792) (792) (792)
Unrealized Gains (Losses) on Certain Securities 536 (3,820) (1,203)
--------------------- ------------------- ---------------------
Total Stockholders' Equity 43,100 33,976 36,467
--------------------- ------------------- ---------------------
Total Liabilities and Stockholders' Equity 459,891 432,828 422,424
===================== =================== ==================
</TABLE>
See accompanying notes.
1
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
CITI-BANCSHARES, INC. AND SUBSIDIARY - LEESBURG, FLORIDA
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
-------------- ----------------
1995 1994 1995 1994
------ ----- ----- ------
<S> <C> <C> <C> <C>
Interest Income
Loans, Including Fees $14,095 $10,849 $4,933 $3,798
-------- ------- ------- -------
Investment Securities:
Taxable 8,531 8,741 2,892 2,925
Exempt From Federal Income Taxes 2,113 2,049 686 723
----- ----- ----- -----
Total Investments Securities 10,644 10,790 3,578 3,648
Federal Funds Sold 439 173 187 55
------ ------ ------ ------
Total Interest Income 25,178 21,812 8,698 7,501
------ ------ ------ ------
Interest Expense
Deposits 11,927 8,933 4,191 3,177
Securities Sold Under Repurchase
Agreements 257 104 98 38
------- ----- ----- ------
Total Interest Expense 12,184 9,037 4,289 3,215
------- ----- ----- ------
Net Interest Income 12,994 12,775 4,409 4,286
Provision For Loan Losses (255) (523) (130) (201)
-------- ------ ------ -------
Net Interest Income After Provision
For Loan Losses 12,739 12,252 4,279 4,085
---------- ------ ------ ------
Noninterest Income
Investment Securities Gains (Losses) 29 (124) 26 0
Service Charges on Deposit Accounts 839 835 299 267
Trust Income 629 539 212 174
Other Income 191 171 57 76
-------- ----- ------- ------
Total Noninterest Income 1,688 1.421 594 517
--------- ----- ------- -------
Noninterest Expense
Salaries and Employee Benefits 4,300 3,994 1,458 1,334
Occupancy Expense 862 809 280 284
Equipment Expense 691 682 221 220
Other Expenses 2,107 2,179 535 682
------- ------ ------ ------
Total Noninterest Expense 7,960 7,664 2,494 2,520
------- ------ ------ ------
Income Before Income Taxes 6,467 6,009 2,379 2,082
Provision For Income Taxes (1,699) (1,547) (652) (532)
-------- ------ ------ ------
Net Income $4,768 $4,462 $1,727 $1,550
========= ======== ======= =======
Earnings Per Common Share and Common
Shares Equivalent $1.18 $1.10 $0.43 $0.38
========= ========= ====== =======
Average Number of Shares 4,052,326 4,047,643 4,052,326 4,047,643
========= ========== ========= =========
Return on Average Assets 1.42% 1.43%
========= =========
Return on Average Equity 15.85% 16.24%
========= ========
</TABLE>
See accompanying notes.
2
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
CITI-BANCSHARES, INC. AND SUBSIDIARY - LEESBURG, FLORIDA
(IN THOUSANDS)
<TABLE>
<CAPTION>
Unrealized
Gains(Losses)
Common Capital Retained Treasury on Certain
Stock Surplus Earnings Stock Securities Total
------- -------- --------- ------- ------------- -----
<S> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1993
(Audited) $42 $11,208 $22,750 $ (792) $3,586 $36,794
Net Income 0 0 6,005 0 0 6,005
Cash Dividend Declared
($.35 Per Share) 0 0 (1,417) 0 0 (1,417)
Unrealized (Losses) on
Certain Securities 0 0 0 0 (7,406) (7,406)
-------- -------- --------- ------ ---------- ---------
Balances, December 31, 1994
(Audited) 42 11,208 27,338 (792) (3,820) 33,976
Net Income 0 0 4,768 0 0 4,768
Unrealized Gains on
Certain Securities 0 0 0 0 4,356 4,356
--------- -------- ------- ------- --------- --------
Balances, September 30, 1995
(Unaudited) $42 $11,208 $32,106 $(792) $ 536 $43,100
========== ========== ========== ======== ========== ========
</TABLE>
See accompanying notes.
3
<PAGE>
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
CITI-BANCHARES, INC. AND SUBSIDIARY - LEESBURG, FLORIDA
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------
1995 1994
------ ------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income $4,768 $4,462
Adjustments to Reconcile Net Income to Net Cash
Provided By Operating Activities:
Provision For Loan Losses 255 523
Depreciation 489 518
Net (Accretion)/Amortization of Discount on Investments (330) (271)
(Gain) Loss on Sale of Investments and Real Estate Owned (30) 74
Decrease (Increase) in Accrued Interest Receivable (362) (253)
Increase (Decrease) in Accrued Interest Payable 1,476 121
Other 158 (406)
------- -------
Net Cash Provided By Operating Activities 6,424 4,768
-------- -------
Cash Flows From Investing Activities
Proceeds From Sales of Investment Securities 65,151 17,816
Proceeds From Maturities of Investment Securities 17,728 22,270
Purchases of Investment Securities (75,269) (47,356)
Net (Increase) in Loan Receivables (21,910) (15,498)
Proceeds From Sale of Real Estate Owned 102 1,500
Purchases of Premises and Equipment (562) (772)
---------- --------
Net Cash (Used In) Investing Activities (14,760) (22,040)
----------- ---------
Cash Flows From Financing Activities
Net Increase in Demand Deposits, NOW Accounts, and
Savings Accounts 988 2,453
Net Increase in Certificate of Deposit 14,367 14,041
Net Increase (Decrease) in Federal Funds Purchased
and Securities Sold Under Agreements to Repurchase 2,201 (2,660)
Dividends Paid (1,417) (1,255)
--------- ---------
Net Cash Provided By Financing Activities 16,139 12,579
---------- ----------
Net Increase (Decrease) in Cash and Cash Equivalents 7,803 (4,693)
Cash and Cash Equivalents, Beginning of Period 14,321 15,266
---------- ----------
Cash and Cash Equivalents, End of Period $22,124 $10,573
=========== ===========
</TABLE>
See accompanying notes.
4
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
CITI-BANCHARES, INC. AND SUBSIDIARY - LEESBURG, FLORIDA
(UNAUDITED)
(IN THOUSANDS)
(Concluded)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
------------------
1995 1994
------ ------
<S> <C> <C>
Supplemental Disclosures of Cash Flow Information
Cash and Cash Equivalents
Cash and Demand Deposits Due From Banks $14,370 $10,573
Federal Funds Sold 7,754 0
-------- --------
Total Cash and Cash Equivalents $22,124 $10,573
========= =========
--------- ---------
Interest Paid $10,709 $8,916
========== =========
========== =========
Income Taxes Paid $1,476 $1,493
========== ==========
</TABLE>
See accompanying notes.
5
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CITI-BANCSHARES, INC. AND SUBSIDIARY - LEESBURG, FLORIDA
Note 1 - Significant Accounting Policies
The accounting and reporting policies of Citi-Banshares, Inc. (the Company) and
its subsidiary conform to generally accepted accounting principles and to
predominant practices with the banking industry.
In the opinion of the Company's management, all adjustments necessary to present
fairy the financial position as of September 30, 1995, and the results of
operations and cash flows for the period then ended have been included and are
of a normal and recurring nature.
Certain amounts for 1995 and 1994 were reclassified to conform with statement
presentation for September 30, 1995. These reclassifications have no
effect on stockholders' equity or net income as previously reported.
Note 2 - Income Taxes
Federal and state income taxes are provided on income reported for financial
statement purposes and include both current and deferred income tax expense.
Current income tax expense is recorded to reflect income taxes based upon the
tax returns filed with the appropriate taxing agencies. Deferred income taxes
are recorded to reflect the tax consequences on future years of differences
between the tax bases of assets and liabilities and their financial reporting
amounts at year end. The change in deferred taxes attributable to the carrying
value of investments categorized as "available-for-sale" is recognized as a
change in stockholders' equity. The change in deferred income taxes attributable
to all other timing differences is recognized as deferred income tax expense or
benefit. The tax benefit related to operating loss and tax credit carryforwards,
if any, are recognized if management believes, based on available evidence, that
it is more likely than not that they will be realized. Investment tax credits,
if any, are accounted for using the flow-through method.
The Company files consolidated federal and state income tax returns with its
subsidiary, Citizens National Bank of Leesburg. Federal and state income taxes
are allocated between the Company and its subsidiary in proportion to the
respective contributions in consolidated taxable income.
Note 3 - Loans and Allowance For Loan Losses
Major categories of loans included in the loan portfolio are:
<TABLE>
<CAPTION>
(In Thousands)
--------------------------------------------
(Unaudited) (Audited) (Unaudited)
9/30/95 12/31/94 9/30/94
---------- ---------- ----------
<S> <C> <C> <C>
Commercial, Financial, and Agricultural $ 21,722 $ 13,457 $ 15,425
Real Estate 178,643 166,039 159,654
Installment Loans 21,478 20,480 20,038
---------- ---------- ---------
Loans Receivables $ 221,843 $ 199,976 $ 195,117
========== ========== =========
</TABLE>
6
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CITI-BANCSHARES, INC. AND SUBSIDIARY - LEESBURG, FLORIDA
Note 3 - Loans and Allowance For Loan Losses- (Concluded)
Changes in the allowance for loan loses are summarized as follows:
<TABLE>
<CAPTION>
(In Thousands)
--------------------------------------------
(Unaudited) (Audited) (Unaudited)
9/30/95 12/31/94 9/30/94
---------- ---------- ----------
<S> <C> <C> <C>
Balance, Beginning of Period $ 2,994 $ 2,490 $ 2,490
Additions:
Provision Charged to Expense 255 600 523
Recoveries on Loans Previously
Charged Off 58 115 90
---------- ---------- ---------
Total Additions 313 715 613
(Loans Charged Off) (73) (211) (165)
---------- --------- ---------
Balance, End of Period $ 3,234 $ 2,994 $ 2,938
========== ========== =========
</TABLE>
Note 4 - Unrealized Gain on Securities Available-For-Sale
Effective December 31, 1993, the Company adopted the investment categorization
and carrying value rules as required by Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 115 ( FASB No. 115), Accounting
for Certain Investments in Debt and Equity Securities. Under this statement,
the unrealized gain or loss on investment securities available-for-sale, net of
the applicable deferred income taxes, is shown as a separate component of
stockholders' equity in the balance sheet. The following is a summary of the
effects of the statement of stockholders' equity as of September 30, 1995,
December 31, 1994, and September 30, 1994:
<TABLE>
<CAPTION>
(In Thousands)
--------------------------------------------
(Unaudited) (Audited) (Unaudited)
9/30/95 12/31/94 9/30/94
---------- ---------- ----------
<S> <C> <C> <C>
Gross Unrealized Gains (Losses) on
Investment Securities Available-
For-Sale $ 841 $ (5,999) $ (1,886)
Deferred Income Tax (Liability) Asset
on Unrealized Gain (305) 2,179 683
------ ---------- ----------
Net Increase (Decrease) in Stockholders'
Equity $ 536 $ (3,820) $ (1,203)
======= ========= ===========
</TABLE>
7
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CITI-BANCSHARES, INC. AND SUBSIDIARY - LEESBURG, FLORIDA
(Concluded)
Note 5 - Premises and Equipment
A summary of premises and equipment is as follows:
<TABLE>
<CAPTION>
(In Thousands)
-------------------------------------------
(Unaudited) (Audited) (Unaudited)
9/30/95 12/31/94 9/30/94
---------- --------- -----------
<S> <C> <C> <C>
Land $ 1,059 $ 840 $ 840
Buildings 6,847 6,670 6,657
Furniture, Fixtures and Equipment 5,065 4,899 5,298
-------- ------- --------
12,971 12,409 12,795
(Accumulated Depreciation) (6,091) (5,602) (5,871)
--------- -------- ---------
Total Premises and Equipment $ 6,880 $ 6,807 $ 6,924
========= ======== =========
</TABLE>
Note 6 - Deposits
<TABLE>
<CAPTION>
(In Thousands)
(Unaudited) (Audited) (Unaudited)
9/30/95 12/31/94 9/30/94
---------- ----------- -----------
<S> <C> <C> <C>
Demand $ 50,807 $ 54,122 $ 49,611
Savings 90,387 111,648 113,097
Time 227,500 188,557 184,859
--------- ---------- --------
Total Interest-Bearing Accounts $368,694 $ 354,327 $347,567
========= ========== ========
</TABLE>
Note 7 - Stock Option Plan
In 1994, the Company adopted a stock option plan for granting nonqualified stock
options to specified officers. The nonqualified stock options are granted to the
officers provided the Bank meets certain target performance and asset quality
criteria. The stock options are exercisable at a price equal to the book value
per share as of the date of grant. These stock options are exercisable two years
after the date of grant. In February 1995, options for 11,250 shares were
granted effective January 1, 1995.
These securities were included in the calculation of primary earning per share
as a common stock equivalent.
Note 8 - Commitments
On September 15, 1995, the Company signed a nonbinding letter of intent to
acquire a local financial institution. The agreement is subject to an indepth
due diligence investigation and regulatory approval.
8
<PAGE>
MANAGEMENT DISCUSSION
OUTSTANDING BALANCES
LOANS
Gross loans at September 30, 1995 were up $21,867,000 over December 31, 1994,
an annualized increase of 14.58%. This is up from the $15,251,000 growth we
enjoyed in the first nine months of last year. Our loan growth in the first nine
months of this year was primarily in residential and commercial real estate
mortgages. The ratio of gross loans to total deposits for September 30, 1995
was 54.88% compared to 51.43% at year-end 1994.
DEPOSITS
Total deposits at September 30, 1995 were up $15,355,000 over
December 31, 1994, an annualized increase of 5.26%. In comparison, deposits
grew $16,494,000 in the same period last year. Non-interest bearing
deposits increased $988,000 from December 31, 1994 to September 30, 1995 and
interest-bearing deposits increased $14,367,000, during the same period.
From December 31, 1994 to Spetmber 30, 1995 we saw the following change in
interest-bearing deposits:
<TABLE>
<CAPTION>
(in thousands)
$ %
9/30/95 12/31/94 GROWTH GROWTH
------- -------- ------- -------
<S> <C> <C> <C> <C>
Demand $ 50,807 $ 54,122 $(3,315) (6.13%)
Savings 90,387 111,648 (21,261) (19.04%)
Time 227,500 188,557 38,943 20.65%
-------- -------- ------- -------
Total Interest-Bearing $368,694 $354,327 $14,367 4.05%
Non-Interest Bearing $ 35,528 $ 34,540 $ 988 2.86%
Total Deposits $404,222 $388,867 $15,355 3.95%
Annualized Total Deposit Growth: 5.26%
</TABLE>
9
<PAGE>
NET INTEREST INCOME
INTEREST INCOME
The interest income on earning assets was $8,698,000 in the third
quarter of 1995, an increase of $1,197,000 when compared to the third quarter
of 1994. The increase in income was due entirely from the increase in
outstanding loan balances. There were no changes in income directly
attributable to changes in rates on loans.
INTEREST EXPENSE
Interest expense was $4,289,000 in the third quarter of 1995, an increase of
$1,074,000 when compared to the same period in 1994. Most of the increase in
interest expense is due to the increase in rates paid by the bank in the
third quarter of 1995. It appears that the decline in net interest margin
stabilized in the third quarter of 1995. The dollar volume of interest bearing
deposits increased $21,127,000 from the ending of third quarter 1994 as compared
to the ending balance of third quarter 1995.
NET INTEREST INCOME
Third quarter net interest income in 1995 was $4,409,000, an increase of
$123,000 over the third quarter 1994 level of $4,286,000.
LOAN QUALITY
PROVISION/ALLOWANCE FOR LOAN LOSSES
The provision for loan losses was $130,000 in the third quarter of
1995. This is a decrease of $71,000 when compared to the 1994 third
quarter loan provision of $201,000. The decrease in the provision is a
direct benefit of the continued improvement of our asset quality of the bank.
10
<PAGE>
Year-to-date net charge-offs in the first nine months of 1995 are $15,000
compared to $75,000 for the first nine months of 1994.
The allowance for loan losses as a percentage of gross loans is as follows:
<TABLE>
<CAPTION>
96/30/95 12/31/94
<S> <C> <C>
ALL/Gross Loans 1.46% 1.50%
Actual $ In Loan Loss Reserve $3,324,000 $2,994,000
</TABLE>
RISK ELEMENTS
All loan delinquencies over 30 days past due and all loans on non-accrual as a
percentage of total loans are reflected below:
<TABLE>
<CAPTION>
9/30/95 12/31/94 9/30/94
<S> <C> <C> <C>
Total Loan Delinquencies 0.61% 0.59% 0.90%
Total Non-Accrual Loans 0.28% 0.25% 0.31%
Total Delinquencies and
Non-Accruals 0.89% 0.84% 0.90%
</TABLE>
Other Real Estate Owned (O.R.E.O.) consists primarily of foreclosed
real estate and has decreased in the past year as the Company
disposed of O.R.E.O. in an improving economy:
<TABLE>
<CAPTION>
9/30/95 12/31/94 9/30/94
<S> <C> <C> <C>
O.R.E.O./Total Real
Estate Loans 0.35% 0.41% 0.49%
Actual $ In O.R.E.O. $613,000 $686,735 $ 797,328
</TABLE>
All O.R.E.O. has been written down to the current appraised value
at the time the bank took ownership.
11
<PAGE>
NON-INTEREST INCOME
Non-interest income for the third quarter of 1995, net of securities
gains/losses was $568,000, an increase of $51,000 or 9.87% over the third
quarter of 1994 figure of $517,000.
Gains on the sale of securities in the third quarter of 1995 were $26,000 as
compared to the no gains or losses on sales of securities in the third quarter
of 1994.
The Company will continue to manage its securities portfolio in this moderately
flat yield curve rate environment to sell any lower yielding securities and
purchase higher yielding investments as the opportunity arises.
Trust income for the third quarter of 1995 was up $38,000 over the same period
a year ago.
NON-INTEREST EXPENSE
The Company's non-interest expense was $2,494,000 in the third quarter of 1995,
down $26,000 or 1.03% over the corresponding period in 1994. The Company
experienced a favorable reduction in FDIC insurance rates in the third quarter
of 1995. The after taxes reduction in non-interest expense due to the refund
of the reduced FDIC insurance premiums amount to $159,000 in the third quarter
of 1995.
Management continues to emphasize expense control in all areas as evidenced by
the Bank Holding Company Performance Report for June 30, 1995, which compares
our holding company to 231 holding companies in our peer group:
<TABLE>
<CAPTION>
6/30/95 6/30/95
OUR PEER
COMPANY GROUP
<S> <C> <C>
Overhead Expense as Percentage
of Average Assets 2.46% 3.44%
</TABLE>
12
<PAGE>
NET INCOME
Third quarter net income for 1995 was up $177,000 from the third quarter of
1994.
Earnings per share for the third quarter of 1995 were $0.43 compared to $0.38
per share from total income in the third quarter of 1994.
The annualized return on average assets as of September 30, 1995 was 1.42%
compared to 1.43% for the same period in 1994.
Return on average equity, excluding the impact of FASB 115, for the third
quarter of 1995 is 15.82%. This is down from 16.79% for the same period in 1994.
CAPITAL
Total stockholders' equity, excluding the effect of FASB 115, was
$42,564,000 on September 30, 1995, an increase of $4,768,000 over the
December 31, 1994 level of $37,796,000. This 12.62% increase in capital was
provided entirely through retained earnings.
When including the effect of FASB 115 by adding in the net unrealized gain on
securities classified "available for sale" the September 30, 1995 total
stockholders' equity is $43,100,000 compared to year-end 1994
stockholders' equity of $33,976,000. On December 31, 1994 the Company had
$(3,820,000) in net unrealized losses on securities classified as "available
for sale" compared to $536,000 in net unrealized gains on September 30, 1995.
As a percentage of total assets, stockholders' equity including adjustments
for FASB 115, increased from 7.85% on December 31, 1994 to 9.37% on September
30, 1995. Excluding the impact of FASB 115, stockholders' equity as a
percentage of total assets was 9.26% on September 30, 1995 compared to 8.73% on
December 31, 1994.
13
<PAGE>
Risk based capital ratios, excluding the effect of FASB 115, are shown below:
<TABLE>
<CAPTION>
REGULATORY
ACTUAL MINIMUM
9/30/95 12/31/94
<S> <C> <C>
Tier I Risk Based Capital
(Tier I: Stockholders' Equity
/ Risk Based Assets at
Quarter End) 18.77% 4.0%
Total Risk Based Capital
(Total: Stockholders' Equity
plus Loan Loss Reserve /
Risk Based Assets at Quarter
End) 20.02% 8.0%
Leverage Capital (excluding
FASB 115)
(Stockholders' Equity /
Average Total Assets for
the Quarter) 9.31% 3.0%
</TABLE>
14
<PAGE>
SUMMARY
The Company continues to enjoy good earnings and growth through the
third quarter of 1995. While Interest margins have narrowed in the last nine
months, good investment portfolio management, expense control and loan growth
have all contributed to this profitability. During the third quarter of
1995, the Company continued to build its loan loss reserve. "Other Real
Estate Owned" and non-performing assets have declined to very satisfactory
levels.
The Company has no securities in its investments portfolio that equal 10%
or more of our capital as of Septmber 30, 1995. The unrealized gains in
our investment portfolio on securities classified "held-to-maturity" on
September 30, 1995 were $2,440,000. The unrealized gains in our investment
portfolio on those securities classified "available-for-sale" as of September
30, 1995 were $841,824. Each of these numbers are shown without any
consideration of income tax effects. While FASB 115 requires the "available-for
- -sale" securities be shown at the market value we would receive if they were
sold, the majority of these securities will be held to maturity and no gain
or loss will be incurred. Management opted at year-end 1994 to put
approximately 75% of its portfolio in the available-for-sale classification
simply to provide the flexibility needed to maintain liquidity and reposition
its portfolio as necessary. Management does not know of any loans not already
classified or on non-accrual that would materially impact future operating
results, liquidity or capital resources. Nor does Management know of any
trends, events, current regulatory proposals or uncertainties that will
have, or that are reasonably likely to have material effect on the Company
liquidity, capital, resources or operations.
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PART II OTHER INFORMATION
Item 5 Other Information
On September 15, 1995, Citi-Bancshares, Inc. entered into a nonbinding Letter
of Intent with Citizens First Bancshares, Inc., Ocala, Florida to acquire 100%
of the outstnading shares of Citizens First Bancshares stock. The agreement
is subject to an indepth due diligence investigation and regulatory approval.
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