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 March 31, 1996
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.
4,060,876
<PAGE>
FINANCIAL STATEMENTS (UNAUDITED)
CITI-BANCSHARES, INC. AND SUBSIDIARY
LEESBURG, FLORIDA
MARCH 31, 1996
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
None
Item 6. Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
ended March 31, 1996.
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 thereunto duly authorized.
CITI-BANCSHARES, INC.
(REGISTRANT)
Dated: May 9, 1996 By /s/ K.W. MULLIS
K. W. MULLIS
PRESIDENT
Dated: May 9, 1996 By /s/ T. MICHAEL KILLINGSWORTH
T. MICHAEL KILLINGSWORTH
SECRETARY
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEETS
CITI-BANCSHARES, INC. AND SUBSIDIARY - LEESBURG, FLORIDA
(IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS
(Unaudited) (Audited)
of 3/31/96 of 12/31/95
----------- -------------
<S> <C> <C>
Cash and Demand Deposits Due From Banks $13,787 $15,731
Investment Securities (Market Value 3/31/96 -
$212,555; 12/31/95 - $220,278; 212,555 $220,278
Fed Funds Sold 8,874 6,156
Loan Receivables 236,352 227,768
Less: Unearned Income (726) (803)
Allowance For Loan Losses (3,400) (3,395)
-------- ----------
Receivables, Net 232,226 223,570
Real Estate Owned 529 663
Premises and Equipment, Net 7,583 7,371
Accrued Interest Receivable 4,726 4,254
Other Assets 2,097 1,936
--------- ---------
Total Assets 482,377 479,959
===================== ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Noninterest-Bearing 41,185 41,678
Interest -Bearing 383,067 375,206
----------- -----------
Total Deposits 424,252 416,884
Federal Funds Purchased and Securities Sold
Under Agreements to Repurchase 6,889 8,498
Accrued Interest Payable 3,563 3,978
Other Liabilities 2,176 4,187
------------ ------------
Total Liabilities 436,880 433,547
------------ ------------
Stockholders' Equity
Common Stock - Par Value $.01 Per Share;
Authorized 10,000,000 Shares; Issued
4,184,631 Shares 42 42
Capital Surplus 11,208 11,208
Retained Earnings 33,470 32,128
Less: Treasury Stock at Cost (136,988
Shares in 1995 and 1994) (792) (792)
Unrealized Gains (Losses) on Certain Securities 1,569 3,826
----------- ----------
Total Stockholders' Equity 45,497 46,412
------------ ---------
Total Liabilities and Stockholders' Equity 482,377 479,959
===================== ============
</TABLE>
See accompanying notes.
1
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
CITI-BANCSHARES, INC. AND SUBSIDIARY - LEESBURG, FLORIDA
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1996 1995
------ -----
<S> <C> <C>
Interest Income
Loans, Including Fees $ 5,121 $ 4,434
-------- -------
Investment Securities:
Taxable 2,689 2,756
Exempt From Federal Income Taxes 849 723
----- -----
Total Investments Securities 3,538 3,479
Federal Funds Sold 110 86
------ ------
Total Interest Income 8,769 7,999
------ ------
Interest Expense
Deposits 4,126 3,662
Securities Sold Under Repurchase
Agreements 87 58
------- -----
Total Interest Expense 4,213 3,720
------- -----
Net Interest Income 4,556 4,279
Provision For Loan Losses 0 (30)
-------- ------
Net Interest Income After Provision
For Loan Losses 4,556 4,249
---------- ------
Noninterest Income
Investment Securities Gains (Losses) 11 (15)
Service Charges on Deposit Accounts 331 271
Trust Income 229 215
Other Income 86 64
-------- -----
Total Noninterest Income 657 535
--------- -----
Noninterest Expense
Salaries and Employee Benefits 1,451 1,410
Occupancy Expense 276 281
Equipment Expense 267 238
Other Expenses 739 840
------- ------
Total Noninterest Expense 2,733 2,769
------- ------
Income Before Income Taxes 2 480 2,015
Provision For Income Taxes 652 510
-------- ------
Net Income $1,828 $1,505
========= ========
Earnings Per Common Share and Common
Shares Equivalent $ .45 $ .37
========= =========
Average Number of Shares 4,060,876 4,052,326
========= ==========
</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, 1994
(Audited) $42 $11,208 $27,338 $ (792) (3,820) $33,976
Net Income 0 0 6,570 0 0 6,570
Cash Dividend Declared
($.44 Per Share) 0 0 (1,780) 0 0 (1,780)
Unrealized (Losses) on
Certain Securities 0 0 0 0 7,646 7,646
-------- -------- --------- ------ ---------- ---------
Balances, December 31, 1995
(Audited) 42 11,208 32,128 (792) 3,826 46,412
Net Income 0 0 1,828 0 0 1,828
Cash Dividend Declared
($.12 Per Share) 0 0 (486) 0 0 (486)
Unrealized Gains on
Certain Securities 0 0 0 0 (2,257) (2,257)
--------- -------- ------- ------- --------- --------
Balances, March 31, 1996
(Unaudited) $42 $11,208 $33,470 $(792) $1,569 $45,497
========== ========== ========== ======== ========== ========
</TABLE>
See accompanying notes.
3
<PAGE>
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
CITI-BANCHARES, INC. AND SUBSIDIARY - LEESBURG, FLORIDA
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------
1996 1995
------ ------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income $1,828 $1,505
Adjustments to Reconcile Net Income to Net Cash
Provided By Operating Activities:
Provision For Loan Losses 0 30
Depreciation 159 175
Net (Accretion)/Amortization of Discount on Investments 82 (123)
(Gain) Loss on Sale of Investments and Real Estate Owned (11) 15
Net Amortization of Deferred Loans Fees (130) (45)
(Increase) in Accrued Interest Receivable (472) (135)
Increase (Decrease) in Accrued Interest Payable (415) 378
Other 435 26
------- -------
Net Cash Provided By Operating Activities 1,476 1,826
-------- -------
Cash Flows From Investing Activities
Proceeds From Sales of Investment Securities 21,645 18,592
Proceeds From Maturities of Investment Securities 1,811 1,998
Purchases of Investment Securities (19,374) (15,889)
Net (Increase) in Loan Receivables ( 8,548) ( 6,577)
Proceeds From Sale of Real Estate Owned 156 102
Purchases of Premises and Equipment (371) (109)
---------- --------
Net Cash (Used In) Investing Activities (4,681) (1,883)
----------- ---------
Cash Flows From Financing Activities
Net Increase in Demand Deposits, NOW Accounts, and
Savings Accounts 3,873 411
Net Increase in Certificate of Deposit 3,495 9,544
Net Increase (Decrease) in Federal Funds Purchased
and Securities Sold Under Agreements to Repurchase (1,609) (1,060)
Dividends Paid (1,780) (1,417)
--------- ---------
Net Cash Provided By Financing Activities 3,979 7,478
---------- ----------
Net Increase (Decrease) in Cash and Cash Equivalents 774 7,421
Cash and Cash Equivalents, Beginning of Period 21,887 14,321
---------- ----------
Cash and Cash Equivalents, End of Period $22,661 $21,742
=========== ===========
</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>
Three Months Ended
March 31,
------------------
1996 1995
------ ------
<S> <C> <C>
Supplemental Disclosures of Cash Flow Information
Cash and Cash Equivalents
Cash and Demand Deposits Due From Banks $13,787 $13,745
Federal Funds Sold 8,874 7,997
-------- --------
Total Cash and Cash Equivalents $22,661 $21,742
========= =========
--------- ---------
Interest Paid $ 4,628 $3,342
========== =========
========== =========
Income Taxes Paid $1,039 $ 97
========== ==========
</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 within the banking industry.
In the opinion of the Company's management, all adjustments necessary to present
fairy the financial position as of March 31, 1996, and the results of
operations and cash flows for the period then ended have been included and are
of a normal and recurring nature.
Accounting Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Cash Equivalents
Cash equivalents include cash, demand deposits due from banks and federal
fund sold. Generally, federal funds sold mature within ninety days.
Reclassifications
Certain amounts for 1996 and 1995 were reclassified to conform with statement
presentation for March 31, 1996. 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)
3/31/96 12/31/95
---------- ----------
<S> <C> <C>
Commercial, Financial, and Agricultural $ 24,109 $ 20,211
Real Estate 189,835 185,985
Installment Loans 22,408 21,572
---------- ----------
Loans Receivables $ 236,352 $ 227,768
========== ==========
</TABLE>
Changes in the allowance for loan losses are summarized as follows
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CITI-BANCSHARES, INC. AND SUBSIDIARY - LEESBURG, FLORIDA
<TABLE>
<CAPTION>
(In Thousands)
-----------------------------
(Unaudited) (Audited)
3/31/96 12/31/95
---------- ----------
<S> <C> <C>
Balance, Beginning of Period $ 3,395 $ 2,994
Additions:
Provision Charged to Expense 0 255
Recoveries on Loans Previously
Charged Off 34 $ 279
---------- -----------
Total Additions 34 534
(Loans Charged Off) (29) (133)
----------- -----------
Balance, End of Period $ 3,400 $ 3,395
=========== ===========
</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 March 31, 1996, and
December 31, 1995:
<TABLE>
<CAPTION>
(In Thousands)
------------------------------
(Unaudited) (Audited)
3/31/96 12/31/95
---------- ----------
<S> <C> <C>
Gross Unrealized Gains (Losses) on
Investment Securities Available-
For-Sale $2,481 $ 6,051
Deferred Income Tax (Liability) Asset
on Unrealized Gain (912) (2,225)
------ ----------
Net Increase (Decrease) in Stockholders'
Equity $1,569 $ 3,826
======= =========
</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)
3/31/96 12/31/95
---------- ---------
<S> <C> <C>
Land $ 1,073 $ 1,059
Buildings 7,592 7,270
Furniture, Fixtures and Equipment 5,372 5,337
-------- -------
14,037 13,666
(Accumulated Depreciation) (6,454) (6,295)
--------- --------
Total Premises and Equipment $ 7,583 $ 7,371
========= ========
</TABLE>
Note 6 - Deposits
<TABLE>
<CAPTION>
(In Thousands)
(Unaudited) (Audited)
3/31/96 12/31/95
---------- -----------
<S> <C> <C>
Demand $ 53,922 $ 52,691
Savings 90,464 87,329
Time 238,681 285,186
--------- ----------
Total Interest-Bearing Accounts $383,067 $ 375,206
========= ==========
</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, after a two year vesting requirement, are
exercisable at a price equal to the book value per share, net of FASB No. 115.
The Board normally makes it decision on whether or not to grant the options for
a given year in February of the following year, allowing time to review complete
financial data and achievement of certain performance criteria. If approved,
the options are granted effective the first business day following the end of
the year. The option price is the year-end book value, net of FASB No. 115, for
the year just completed. Should a grantee retire, the options for 11,250
shares were granted effective January 2, 1995, based on the Company's
performance for the year ended December 31, 1994. The Company follows APB
Opinion No. 25, Accounting for Stock Issued to Employees in recognizing stock
options. In December 1995, the Board approved a stock option of 6,250 shares
for the Chief Financial Officer to be effective starting January 2, 1996. This
was done as per discussions with the Chief Financial Officer prior to his
employment in March 1995. These options may be earned by the Chief Financial
Officer if future performance criteria is met. In February 1996, the Board
approved 11,250 options, effective 1996. Total shares outstanding at March
31, 1996 was 28,750.
These securities were included in the calculation of primary earnings per
share as a common stock equivalent.
Note 8 - Merger Commitments
An Agreement and Plan of Merger, dated October 19, 1995, was signed by the
Company in anticipation of acquiring a local financial institution. A due
diligence investigation has been completed and a Form S-4 Registration Statement
filed with the Securities and Exchange Commission (SEC) on January 2, 1996,
under the Securities Act of 1993. The Registration Statement was approved by
the SEC on March 20, 1996.
8
<PAGE>
MANAGEMENT DISCUSSION
OUTSTANDING BALANCES
LOANS
Gross loans at March 31 30, 1996 were up $8,584,000 over December 31, 1995,
an annualized increase of 15.07%. This is up from the $6,560,000 growth we
enjoyed in the first three months of last year. Our loan growth in the first
three months of this year was in residential and commercial real estate
mortgages. The ratio of gross loans to total deposits for March 31, 1996
was 55.71% compared to 54.64% at year-end 1995.
DEPOSITS
Total deposits at March 31, 1996 were up $7,368,000 over December
31, 1995, an annualized increase of 7.07%. In comparison, deposits
grew $9,955,000 in the same period last year. Non-interest bearing
deposits decreased $493,000 from December 31, 1995 to March 31, 1996 and
interest-bearing deposits increased $7,861,000 during the same period.
From December 31, 1995 to March 31, 1996 we saw the following change in
interest-bearing deposits:
<TABLE>
<CAPTION>
(in thousands)
$ %
3/31/96 12/31/95 GROWTH GROWTH
------- -------- ------- -------
<S> <C> <C> <C> <C>
Demand $ 53,922 $ 52,691 $ 1,231 2.34%
Savings 90,464 87,329 3,135 3.59%
Time 238,681 235,186 3,495 1.49%
-------- -------- ------- -------
Total Interest-Bearing $383,067 $375,206 $ 7,861 2.10%
Non-Interest Bearing $ 41,185 $ 41,678 $ 493 1.18%
Total Deposits $424,252 $416,884 $ 7,368 1.77%
Annualized Total Deposit Growth: 7.08%
</TABLE>
9
<PAGE>
NET INTEREST INCOME
INTEREST INCOME
The interest income on earning assets was $8,769,000 in the first
quarter of 1996, an increase of $770,000 when compared to the first quarter
of 1995. The increase in income was due mostly from the increase in
outstanding loan balances.
INTEREST EXPENSE
Interest expense was $4,213,000 in the first quarter of 1996, an increase of
$493,000 when compared to the same period in 1995. The increase in
interest expense is due entirely to the increase in interest bearing deposits
of $19,193,000 from the ending of first quarter 1995 as compared to the ending
balance of first quarter 1996.
NET INTEREST INCOME
First quarter net interest income in 1996 was $4,556,000, an increase of
$277,000 over the first quarter 1995 level of $4,279,000. The continued loan
growth is responsible for the year-to-date March 31, 1996 increase in net
interest income over the same period in 1995.
LOAN QUALITY
PROVISION/ALLOWANCE FOR LOAN LOSSES
There was no provision to loan losses in the first quarter of 1996.
This is a decrease of $30,000 when compared to the 1995 first
quarter loan provision of $30,000. The decrease in the provision is a
direct benefit of the continued improvement of our asset quality.
10
<PAGE>
Year-to-date net recoveries in the first quarter of 1996 are $5,000
compared to net recoveries of $6,000 for the first quarter of 1995.
The allowance for loan losses as a percentage of gross loans is as follows:
<TABLE>
<CAPTION>
03/31/96 12/31/95
<S> <C> <C>
ALL/Gross Loans 1.47% 1.50%
Actual $ In Loan Loss Reserve $3,400,000 $3,395,000
</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>
3/31/96 12/31/95 3/31/95
<S> <C> <C> <C>
Total Loan Delinquencies 0.23% 0.31% 1.19%
Total Non-Accrual Loans 0.27% 0.35% 0.29%
Total Delinquencies and
Non-Accruals 0.50% 0.66% 1.48%
</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>
3/31/96 12/31/95 3/31/95
<S> <C> <C> <C>
O.R.E.O./Total Real
Estate Loans 0.35% 0.46% 0.36%
Actual $ In O.R.E.O. $529,479 $662,822 $ 613,055
</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 first quarter of 1996, net of securities
gains/losses was $646,000, a decrease of $3,000 just under the first
quarter of 1995 figure of $649,000.
Gains on the sale of securities in the first quarter of 1996 were $11,000 as
compared to the losses on sales of securities in the first quarter of 1995
of $15,000.
The Company will continue to manage its securities portfolio in the current
rate environment to take advantage of profits found in repricing some of the
lower yielding securities and reinvesting in higher yielding issues.
Trust income for the first quarter of 1996 was up $14,000 over the same period
a year ago offsetting slight declines in other non-interest income.
NON-INTEREST EXPENSE
The Company's non-interest expense was $2,733,000 in the first quarter of 1996,
down $36,000 or 1.30% under the corresponding period in 1995.
Management continues to emphasize expense control in all areas as evidenced by
the Bank Holding Company Performance Report for December 31, 1995, which
compares our holding company to 242 holding companies in our peer group:
<TABLE>
<CAPTION>
12/31/95 12/31/95
OUR PEER
COMPANY GROUP
<S> <C> <C>
Overhead Expense as Percentage
of Average Assets 2.32% 3.37%
</TABLE>
12
<PAGE>
NET INCOME
First quarter net income for 1996 was up $323,000 from the first quarter of
1995.
Earnings per share for the first quarter of 1996 were $0.45 compared to $0.37
per share from total income in the first quarter of 1995.
The annualized return on average assets as of March 31, 1996 was 1.54%
compared to 1.38% for the same period in 1995.
Return on average equity, excluding the impact of FASB 115, for the first
quarter of 1996 is 17.03%. This is up from 15.63% for the same period in 1995.
CAPITAL
Total stockholders' equity, excluding the effect of FASB 115, was
$43,928,000 on March 31, 1996, an increase of $1,342,000 over the December 31,
1995 level of 42,586,000, after excluding the impact of FASB 115. This 3.15%
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 March 31, 1996 total
stockholders' equity is $45,497,000 compared to year-end 1995
stockholders' equity. On December 31, 1995 the Company had
$3,826,000 in unrealized gain on securities classified as "available
for sale" compared to $1,569,000 in unrealized gains on March 31, 1996.
As a percentage of total assets, stockholders' equity including adjustments
for FASB 115, decreased from 11.45% on December 31, 1995 to 9.43% on March
31, 1996. Excluding the impact of FASB 115, stockholders' equity as a
percentage of total assets was 9.11% on March 31, 1996 compared to 10.51% on
December 31, 1995.
13
<PAGE>
Risk based capital ratios, excluding the effect of FASB 115, are shown below:
<TABLE>
<CAPTION>
REGULATORY
ACTUAL MINIMUM
3/31/96 12/31/95
<S> <C> <C>
Tier I Risk Based Capital
(Tier I: Stockholders' Equity
/ Risk Based Assets at
Quarter End) 19.52% 4.0%
Total Risk Based Capital
(Total: Stockholders' Equity
plus Loan Loss Reserve /
Risk Based Assets at Quarter
End) 20.40% 8.0%
Leverage Capital (excluding
FASB 115)
(Stockholders' Equity /
Average Total Assets for
the Quarter) 9.43% 3.0%
</TABLE>
14
<PAGE>
SUMMARY
The Company continues to enjoy good earnings and growth through the
first quarter of 1996. Interest margins, good investments portfolio
management, expense control and loan growth have all contributed to
this profitability. "Other Real Estate Owned" and non-performing assets
have declined to very satisfactory levels.
The bank has no securities in its investments portfolio that equal 10%
or more of our capital as of March 31, 1996. The unrealized gains in our
investment portfolio on those securities classified "available-for-sale" as of
March 31, 1996 were $2,481,000. 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 loss
will be incurred. Management opted during December of 1995 to reclassify
the Held-to-Maturity portfolio to the Available-for-Sale classification.
This reclassification will allow the bank the flexiblity to manage the entire
securities portfolio for liquidity purposes.
15
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
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0
0
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</TABLE>
