FORM 10-Q
Securities and Exchange Commission
Washington, D.C. 20549
[ X ] Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
For the quarterly period ended: March 31, 1996
or
[ ] Transition Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
For the transition period from to
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Commission file no.: 0-12377
BT FINANCIAL CORPORATION
------------------------
(Exact Name of Registrant as Specified in its Charter)
Pennsylvania 25-1441348
------------ ----------
(State of Incorporation) (I.R.S. Employer Identification Number)
551 Main Street, Johnstown, Pennsylvania 15901
-----------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(814) 532-3801
--------------
Registrant's Telephone Number
Indicate by checkmark 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:
3,826,581 shares common stock
($5.00 par value)
as of April 29, 1996
<PAGE>
BT FINANCIAL CORPORATION AND AFFILIATES
FORM 10-Q
March 31, 1996
Part I. Financial Information
------------------------------
Item 1.
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Consolidated Balance Sheet - March 31, 1996
and December 31, 1995
Consolidated Statement of Income
Three Months Ended
March 31, 1996 and 1995
Consolidated Statement of Cash Flows
Three Months Ended March 31, 1996
and 1995
Notes to Consolidated Financial Statements
Item 2.
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Management's Discussion and Analysis of
Financial Condition and Results
of Operations
Part II. Other Information
---------------------------
Item 5.
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Other Information
Item 6.
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Exhibits and Reports
Signatures
ITEM 1
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FINANCIAL STATEMENTS
--------------------
BT FINANCIAL CORPORATION AND AFFILIATES
---------------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
(In thousands, except share data)
March 31 December 31
1996 1995
(Unaudited)
------------------------------
ASSETS
Cash and cash equivalents $ 41,210 $ 50,108
Money market investments:
Interest-bearing deposits with banks 357 1,188
Federal funds sold 25,600 1,500
------------------------------
Total money market investments 25,957 2,688
------------------------------
Securities available-for-sale 169,348 208,148
Securities held-to-maturity (market value
of $50,288 at March 31, 1996 and
$35,924 at December 31, 1995) 50,171 35,161
------------------------------
Total securities 219,519 243,309
------------------------------
Loans: 912,293 907,188
Less: Unearned interest 49,106 49,631
Reserve for loan losses 7,766 8,071
------------------------------
Net loans 855,421 849,486
Premises and equipment 26,603 25,672
Accrued interest receivable 8,177 7,890
Other assets 23,157 23,249
------------------------------
Total assets $1,200,044 $1,202,402
==============================
LIABILITIES
Deposits:
Non-interest-bearing 136,180 138,252
Interest-bearing 906,548 897,395
------------------------------
Total deposits 1,042,728 1,035,647
Federal funds purchased and securities
sold under agreements to repurchase 23,322 35,313
Short-term borrowings 4,618 2,266
Accrued interest payable 5,221 5,518
Other liabilities 1,928 1,532
Long-term debt 19,365 20,083
-----------------------------
Total liabilities $1,097,182 $1,100,359
-----------------------------
SHAREHOLDERS' EQUITY
Preferred stock, no par value
Authorized shares: 2,000,000 - -
Common stock,
Par value: $5.00
Authorized shares: 10,000,000
Shares issued: 3,826,581 19,133 19,133
Surplus 33,320 33,320
Retained earnings 50,237 48,336
Net unrealized holding gains on
securities available-for-sale 172 1,254
------------------------------
Total shareholders' equity 102,862 102,043
------------------------------
Total liabilities and
shareholders' equity $1,200,044 $1,202,402
==============================
The accompanying notes are an integral part of the consolidated
financial statements.
BT FINANCIAL CORPORATION AND AFFILIATES
---------------------------------------
CONSOLIDATED STATEMENT OF INCOME
--------------------------------
(Unaudited)
(In thousands, except shares and per share data)
Three months ended
March 31
1996 1995
------------------
INTEREST INCOME
Loans, including fees $ 18,276 $ 15,538
Investment securities:
Taxable 3,615 4,014
Tax-exempt 34 37
Deposits with banks 18 111
Federal funds sold 194 31
--------------------
TOTAL INTEREST INCOME 22,137 19,731
--------------------
INTEREST EXPENSE
Deposits 8,331 7,416
Federal funds purchased
and securities sold under
agreements to repurchase 339 524
Short-term borrowings 32 51
Term debt 330 195
---------------------
TOTAL INTEREST EXPENSE 9,032 8,186
---------------------
NET INTEREST INCOME 13,105 11,545
Provision for loan losses 388 169
---------------------
NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES 12,717 11,376
---------------------
OTHER INCOME
Trust income 498 482
Fees for other services 1,351 1,108
Net security gains (losses) (15) 15
Other income 198 97
---------------------
TOTAL OTHER INCOME 2,032 1,702
---------------------
OTHER EXPENSES
Salaries and wages 4,327 4,082
Pension and other
employee benefits 809 567
Net occupancy expense 1,038 929
Equipment expense 755 662
F.D.I.C. insurance 133 534
Amortization of intangible
assets 461 283
Other operating expense 2,416 2,224
----------------------
TOTAL OTHER EXPENSES 9,939 9,281
----------------------
INCOME BEFORE INCOME TAXES 4,810 3,797
Provision for income taxes 1,684 1,153
----------------------
NET INCOME $ 3,126 $ 2,644
======================
NET INCOME PER SHARE .82 .69
Dividends paid per share .32 .30
Weighted average shares
outstanding 3,826,581 3,826,581
The accompanying notes are an integral part of the consolidated
financial statements.
BT Financial Corporation and Affiliates
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(In thousands)
Three months ended
March 31
1996 1995
-----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.............................. $ 3,126 $ 2,644
Adjustments to reconcile net income to
net cash provided by operating activities
Provision for loan losses............. 388 169
Provision for depreciation and
amortization..................... 751 662
Amortization of intangible assets 461 283
Amortization of premium, net of
accretion of discount on loans and
securities....................... 142 303
Deferred income taxes................. (38) (103)
Realized securities (gains) losses.... 2 (15)
Increase in interest receivable....... (287) (28)
Increase (decrease) in interest
payable.......................... (297) 1,965
Other assets and liabilities, net..... 655 (1,076)
-------------------
Net cash provided by operating
activities 4,903 4,804
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities....... 2,998 8,054
Repayments and maturities of securities
available-for-sale.................... 34,219 14,791
Purchases of securities available-for-
sale.................................. (255) (25)
Purchase of securities held-to-maturity (15,000) (2,300)
Net decrease (increase) in money market
investments........................... (23,269) 1,487
Proceeds from sales of loans............ 1,751 1,240
Net increase in loans................... (8,062) (15,101)
Purchases of premises and equipment
and other............................. (1,682) (1,266)
-------------------
Net cash provided by (used in)
investing activities (9,300) 6,880
-------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits................ 7,081 17,416
Net decrease in Federal Funds
purchased and securities sold
under agreements to repurchase........ (11,991) (34,620)
Net increase (decrease) in short-term
borrowing............................. 2,352 (1,966)
Cash dividends paid..................... (1,225) (1,148)
Payment on long-term debt............... (718) (1,760)
-------------------
Net cash used in
financing activities (4,501) (22,078)
-------------------
Decrease in cash and cash equivalents... (8,898) (10,394)
Cash and cash equivalents at beginning
of the year........................... 50,108 47,679
-------------------
Cash and cash equivalents at end of
period................................ $41,210 $37,285
===================
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest on deposits and other
borrowings....................... $ 9,329 $ 6,221
Federal income taxes.................. 0 0
The accompanying notes are an integral part of the consolidated
financial statements.
BT FINANCIAL CORPORATION AND AFFILIATES
---------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(Unaudited)
1. In the opinion of the management of BT Financial Corporation
(BT or the Corporation), the accompanying consolidated
financial statements include all normal recurring adjustments
necessary for a fair presentation of the financial position
and results of operations of BT for the periods presented.
All significant intercompany transactions have been eliminated
in consolidation. Certain amounts have been reclassified for
comparative purposes. The consolidated financial statements
of BT include the accounts of BT and its wholly-owned
affiliates, Johnstown Bank and Trust Company (Bank and Trust),
Laurel Bank (Laurel), Fayette Bank (Fayette), BT Management
Trust Company (Trust Company) and Bedford Associates, Inc.
These statements should be read in conjunction with the
financial statements and the notes thereto included in BT's
annual report to the Securities and Exchange Commission on
Form 10-K for the year ended December 31, 1995. The results
of operations for the three month period ended March 31, 1996
are not necessarily indicative of the results which may be
expected for the full year.
2. Tax provisions for interim financial statements are based on
the estimated effective tax rates for the full fiscal year.
The estimated effective tax rates differ from the statutory
tax rate principally due to tax-exempt interest income.
3. Allowance for credit losses -- The Corporation adopted FASB
Statement No. 114, "Accounting by Creditors for Impairment of
a Loan", and FASB Statement No. 118, "Accounting by Creditors
for Impairment of a Loan-Income Recognition and Disclosures,"
on January 1, 1995. Under the new guidelines, a loan is
considered impaired, based on current information and events,
if it is probable that the Corporation will be unable to
collect the scheduled payments of principal or interest when
due according to the contractual terms of the loan agreement.
When conducting loan evaluations, management considers various
factors such as historical loan performance, the financial
condition of the debtor and collateral adequacy to determine
when a loan is impaired. Recurring shortfalls or delays in
payments and/or extended delinquency periods may provide
evidence that a delay or shortfall is significant to warrant a
review of the loan for impairment. Generally, the minimum
period without payment that typically can occur before a loan
is considered for impairment is 90 days. The measurement of
impaired loans is generally based on the present value of
expected future cash flows discounted at the historical
effective interest rate, except that all collateral-dependent
loans are measured for impairment based on the fair value of
the collateral. FASB 114 does not apply to large groups of
smaller balance homogeneous loans such as residential mortgage
and consumer loans due to the similarily of the attributes and
risks associated with these loan types. The corporation
collectively evaluates these types of loans for impairment.
In addition, the Corporation collectively reviews for impairment,
commercial real estate and commercial loans under $250,000.
The aggregation of these loans is based upon common risk
characteristics such as, among other factors, loan type;
geographic or industry risk concentrations; whether the loans
have similar terms, such as interest and principal repayment
terms; levels and types of collateral; and external credit
ratings or internal risk ratings for the particular loans.
The adequacy of the allowance for credit losses is
periodically evaluated by the Corporation in order to maintain
the allowance at a level that is sufficient to absorb probable
credit losses. Management's evaluation of the adequacy of the
allowance is based on a review of the Corporation's historical
loss experience, known and inherent risks in the loan
portfolio, including adverse circumstances that may affect the
ability of the borrower to repay interest and/or principal,
the estimated value of collateral, and an analysis of the
levels and trends of delinquencies, charge-offs, and the risk
ratings of the various loan categories.
At March 31, 1996, the recorded investment in loans for which
impairment has been recognized in accordance with FASB 114
totalled $3.5 million, with a corresponding valuation
allowance of $1.6 million. All of the impaired loans at March
31, 1996, are collateral-dependent loans measured for
impairment based on the fair value of the collateral securing
the loan. The Corporation does not have any impaired loans
for which there is not a related valuation allowance.
For the quarter ended March 31, 1996, the average recorded
investment in impaired loans did not differ materially from
the amount outstanding at March 31, 1996. The allowance for
loan losses related to impaired loans increased $698,000
during the first quarter of 1996. The increase was mainly due
to the addition of an impaired commercial loan and its
associated valuation allowance.
Income recognition on impaired and nonaccrual loans -- Loans,
including impaired loans, are generally classified as
nonaccrual if they are past due as to maturity or payment of
principal or interest for a period of more than 90 days,
unless such loans are well-secured and in the process of
collection. Loans that are on a current payment status or
past due less than 90 days may also be classified as impaired or
nonaccrual if repayment in full of principal and/or interest
is in doubt. Impaired loans are generally nonaccrual loans,
however, the ultimate determination of an impaired loan is
based on the aforementioned factors without regard solely to
nonaccrual classification. The adoption of FASB 114 did not
have any material impact on the comparability of BT's non-
performing asset tables.
A loan remains on nonaccrual status until it becomes current
as to principal and interest or it is determined to be
uncollectible and is charged off against the reserve for loan
losses. Impaired loans are charged off when the loans are
determined to be uncollectible.
While a loan is classified as nonaccrual and the future
collectibility of the recorded loan balance is doubtful,
collections of interest and principal are generally applied as
a reduction to principal outstanding. When the future
collectibility of the recorded loan balance is expected,
interest income may be recognized on a cash basis. BT
recognized approximately $57,000 of interest revenue on
impaired loans during the first quarter of 1996, of which
approximately $28,000 and $29,000 was recognized using the
accrual basis and cash basis methods of income recognition,
respectively.
4. In March 1995, FASB issued Statement No. 121, "Accounting for
the Impairment of Long-Lived Assets to Be Disposed Of." The
standard requires long-lived assets and certain identifiable
intangible assets, such as goodwill, be reviewed for
impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be
recoverable. BT adopted this statement on January 1, 1996,
and the effect on BT's financial statements as a result of the
adoption was not material.
5. In May 1995, FASB issued Statement No. 122, "Accounting for
Mortgage Servicing Rights." On January 1, 1996, BT adopted
Statement 122. The new standard requires capitalization of
mortgage servicing rights on mortgage loans originated for
sale and measurement of impairment of all capitalized mortgage
servicing rights based on their fair values. Adoption of
Statement No. 122 did not have any material impact on BT's
financial condition or results of operations.
6. In October 1995, FASB issued Statement No. 123, "Accounting for
Stock-Based Compensation," which requires adoption no later
than fiscal years beginning after December 15, 1995. The new
standard defines a fair value method of accounting for stock
options and similar equity instrument compensation plans.
BT Financial has no stock-based compensation plans. Therefore,
Statement No. 123 will have no effect on BT's financial
condition or results of operations.
7. On December 14, 1995, BT acquired The Huntington National Bank of
Pennsylvania, (Huntington), Uniontown, Pennsylvania, and
merged it into Fayette Bank. Huntington had total assets of
approximately $102 million and operated five branches in
Fayette and Greene counties. On January 8, 1996, Huntington's
former Uniontown branch was closed and merged into Fayette
Bank's Uniontown office. The acquisition was accounted for as
a purchase, with a purchase price of $25.5 million in cash.
Goodwill and other intangibles of approximately $10.2 million
were recorded in connection with the transaction. Goodwill is
being amortized over a 15 year period.
8. On October 24, 1995, Bank and Trust, BT's largest banking
affiliate, entered into an Agreement and Plan of Merger to
acquire Armstrong County Trust Company (Armstrong) of
Kittanning, Pennsylvania. Armstrong will be merged into Bank
and Trust, with Bank and Trust as the surviving bank. BT
expects the merger to be completed during the second quarter
of 1996. Armstrong had approximately $48 million in total
assets at March 31, 1996. The Armstrong acquisition agreement
provides that if the average price per share for BT common
stock is between $34 and $27.50 for a specified period of time
before closing of the transaction, or if BT enters into an
agreement that would result in an acquisition of BT by another
organization, each share of Armstrong common stock will be
exchanged for 26.5 shares of BT common stock and $596.25 in
cash. If the average price for BT common stock is more than
$34 per share during the valuation period, BT will have the
option to adjust the exchange ratio by reducing the number of
shares of BT common stock or cash as agreed to by Armstrong so
that the total consideration does not exceed $1,497.25 per
Armstrong share, or $11,978,000 in the aggregate for all 8,000
Armstrong shares outstanding. If the average price for BT
common stock is less than $27.50 per share during the
valuation period, Armstrong may terminate the agreement if BT
does not increase the number of shares and cash to maintain a
total consideration of $1,325 per Armstrong share, or
$10,600,000 in the aggregate. The Armstrong agreement is
subject to approval by Armstrong's shareholders as well as
state and federal authorities and to the satisfaction of
certain other conditions.
9. On January 12, 1996, BT signed a definitive merger agreement
with Moxham Bank Corporation (Moxham), Johnstown,
Pennsylvania. Moxham's two banks, Moxham National Bank,
Johnstown, Pennsylvania, and First National Bank of Garrett,
Garrett, Pennsylvania will be merged into Bank and Trust. The
agreement is subject to regulatory and shareholder approval.
According to the merger agreement, each Moxham common
shareholder will receive 1.15 shares of BT common stock,
bringing the value of the transaction to approximately $41.0
million. AT March 31, 1996, Moxham had total assets of
approximately $239 million and operated 12 branches in
Cambria, Somerset and Westmoreland counties. The transaction
will be accounted for as pooling of interests and is expected
to be completed during the second quarter of 1996.
If the acquisitions of Armstrong and Moxham had occurred on
March 31, 1996, BT's total assets would have been
approximately $1.5 billion on a pro forma basis.
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ITEM 2
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
The following is Management's Discussion and Analysis of the
material changes in financial position between December 31, 1995
and March 31, 1996, and the material changes in results of
operations comparing the three month period ending March 31, 1996
with the respective results for the comparable period of 1995
for BT Financial Corporation ("BT"). The following should be
read in conjunction with BT's Annual Report on Form 10-K for the
year ended December 31, 1995.
Certain information contained in this report may be considered
"forward-looking" information. Refer to BT's Annual Report on
Form 10-K for the year ended December 31, 1995 for a discussion
of factors that may affect such forward-looking information.
FINANCIAL REVIEW
- ----------------
CHANGES IN FINANCIAL POSITION
Total loans outstanding, net of unearned interest, increased $5.6
million at March 31, 1996, compared to year-end 1995 and $107.0
million compared to March 31, 1995. During the first quarter of 1996,
BT experienced increased commercial loan levels which was partially
offset by a decline in consumer loans. The increase in loans
over the same period last year is mainly due to approximately $70
million in loans acquired in the acquisition of The Huntington
National Bank of Pennsylvania ("Huntington") in December 1995,
and growth in commercial loans. The level of non-performing
loans was $8.9 million at March 31, 1996 and $6.2 million at
December 31, 1995 compared to $4.0 million at March 31, 1995.
Non-performing loans as a percent of outstanding loans, net of
unearned interest were 1.03%, 0.72% and 0.52% for the same
periods, respectively. The increase in non-performing loans was
primarily due to several commercial loans that were placed on
nonaccrual status and an increased level of non-performing
consumer loans. In March 1996, BT began placing most consumer
loans 90 days past-due on nonaccrual status. This policy change
conforms to our nonaccrual policy for commercial and mortgage
loans. As a result, BT experienced a fairly dramatic increase in
nonaccrual loans along with a corresponding decrease in loans 90
days or more past-due. Various loans acquired in the Huntington
acquisition accounted for approximately $2.9 million of the total
non-performing loans at March 31, 1996.
The following table provides information with respect to the
components of BT's non-performing assets for the periods
indicated.
MARCH 31 DECEMBER 31 MARCH 31
(In thousands) 1996 1995 1995
--------------------------------------
Loans 90 days or more
past-due $ 83 $ 1,685 $ 461
Restructured loans 318 318 668
Nonaccrual loans 8,477 4,202 2,833
--------------------------------------
Total non-performing
loans 8,878 6,205 3,962
Other real estate owned 871 793 175
--------------------------------------
Total non-performing
assets $ 9,749 $ 6,998 $ 4,137
======================================
The reserve for loan losses was $7.8 million at March 31, 1996,
compared to $8.1 million at year-end 1995 and $7.1 million at
March 31, 1995. The reserve as a percent of the amount of non-
performing loans was 87%, 130%, and 180% for the same periods,
respectively. The decline at March 31, 1996, is due primarily to
charge-offs of certain consumer loans from the Huntington
acquisition, which were reflected in higher reserve levels at
December 31, 1995. As a percent of total outstanding loans, net
of unearned interest, the reserve for loan losses was .90% at
March 31, 1996, compared to .94% at year-end 1995 and March 31,
1995. Based upon loan reviews and corresponding collateral,
management believes the reserve for loan losses is adequate to
cover potential losses in the current portfolio.
Securities, consisting mainly of U.S. Treasury and other U.S.
Government agencies, decreased $23.8 million compared to December
31, 1995, and $35.8 million compared to March 31, 1995, primarily
due to a high level of calls of various issues due to market
rates. Money market investments increased $23.3 million and
$20.1 million over the same periods, respectively, mainly due to
the shifting of the funds from the securities portfolio.
Management views this increased level of money market investments
as temporary in nature as this funding is redeployed to acquire
additional securities along with providing for anticipated loan
growth.
Total deposits at March 31, 1996, increased $7.1 million over
year-end 1995 and $77.1 million compared to March 31, 1995. The
deposit increase in 1996 is primarily due to higher levels of
time deposits. The increase over March 31, 1995 is due mainly to
approximately $75 million in deposits acquired in the Huntington
acquisition. Increases in deposit levels enabled BT to reduce
the amount of its borrowed funds, as Federal funds purchased and
securities sold under agreements to repurchase decreased $12.0
million at March 31, 1996 compared to year-end 1995.
RESULTS OF OPERATIONS
The first quarter of 1996 produced net income of $3.1 million, or
$.82 per share, an increase of $482,000, or $.13 per share, over
the same period of 1995. Compared with the first quarter of
1995, BT's first quarter 1996 results reflected higher levels of
net interest income and total other income offset in part by
increases in the provision for loan losses, total other expenses
and the provision for income taxes.
The annualized return on average assets for the first quarters of
1996 and 1995 was 1.04% and 0.96%, respectively. The annualized
return on average shareholders' equity was 12.09% in 1996 and
11.81% in 1995.
Fully taxable equivalent net interest income was $13.4 million
for the first quarter of 1996, compared to $11.8 million for the
same period of 1995. The increase of $1.6 million was due
primarily to a higher level of interest-earning assets resulting
from The Huntington acquisition as well as a higher-yielding
asset mix. The net interest margin, on a fully taxable
equivalent basis, improved 21 basis points to 4.86% in 1996,
compared to 4.65% in the first quarter of 1995. Based on
internal analysis, management is currently anticipating a fairly
stable net interest margin level during the second quarter of
1996, subject to a continuation of current market interest rates
and excluding the effect of any previously announced
acquisitions. The utilization of recent technological
enhancements has enabled management to more effectively monitor
its asset/liability position while providing the capability to
develop advanced interest rate risk strategies through
sophisticated modeling techniques.
The provision for loan losses increased $219,000 in the first
quarter of 1996, compared to the same period of 1995 due to
management's assessment of the provision necessary to maintain an
adequate reserve against potential future losses based upon
current size and quality of the loan portfolio. Net charge-offs
were $693,000 in 1996 compared to $258,000 in the first quarter
of 1995. The higher level of net charge-offs in 1996 is mainly
due to credit losses associated with certain loans acquired in
the Huntington acquisition.
Total other income increased $330,000 in the first quarter of
1996 compared to the same quarter last year. Trust income
increased $16,000 due to an adjusted fee schedule and a greater
volume of assets under management. Service fees increased
$243,000 due primarily to higher levels of checking account
related fees. Security transactions income declined $30,000
while other income increased $101,000 due mainly to a gain
related to the sale of a bank-owned property.
Total other expenses increased $658,000 in the first quarter of
1996 compared to the first quarter of 1995. Salaries and wages
increased $245,000, primarily due to periodic merit increases.
In 1995, certain reserves associated with self-funded health care
costs provided additional reductions in those costs when a new
health care insurance provider was selected. Employee benefit
costs increased $242,000 in the first quarter of 1996 to a level
which is expected to be representative of ongoing costs. The
transition to the new carrier has resulted in reduced ongoing
hospitalization expense due to lower premiums. Occupancy expense
increased $109,000 due to the addition of four branches from the
Huntington acquisition and additional maintenance costs
associated with the severe weather conditions over the past
winter. Equipment expense increased $93,000 mainly due to
greater depreciation expense. F.D.I.C. insurance expense declined
$401,000 due to lower deposit insurance premiums. Based on
recently proposed legislation, management is anticipating a one-
time deposit insurance assessment of approximately $1.5 million
in 1996 relating to deposits acquired from savings and loan
institutions. Amortization of intangible assets increased
$178,000 due to the onset of expense attributed to intangible
assets associated with the Huntington acquisition. Other
operating expenses increased $192,000 due primarily to a higher
level of professional services expense.
BT's effective tax rate was 35.0% for the first quarter of 1996,
compared to 30.4% for the same period in 1995. The increase is
primarily due to a change in federal income tax rules resulting
in the retroactive deduction in 1995 of goodwill amortization
associated with acquisitions in prior years. Prior to the
change, certain amortization expense associated with these
acquisitions was nondeductible for federal income tax purposes.
PART II
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OTHER INFORMATION
-----------------
ITEM 5
------
OTHER INFORMATION
-----------------
The information contained in footnotes 8 and 9 to the
Consolidated Balance Sheet included in Part I of this report on
Form 10-Q is incorporated by reference in response to this item.
ITEM 6
------
EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
--------
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K
-------------------
A Form 8-K dated January 12, 1996, was filed on March 18, 1996,
under Item 5 of Form 8-K, to report the definitive agreement to
acquire Moxham Bank Corporation.
A Form 8-K/A was filed on February 27, 1996 (amending a Report
on Form 8-K dated December 14, 1995), under Item 7 of Form 8-K,
which amended and restated financial statements, pro forma
financial information and exhibits for BT and The Huntington
National Bank of Pennsylvania.
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.
BT FINANCIAL CORPORATION
Date May 14, 1996 /s/ John H. Anderson
----------------- --------------------
John H. Anderson, Chairman
and Chief Executive Officer
Date May 14, 1996 /s/ Mark L. Sollenberger
----------------- ------------------------
Mark L. Sollenberger, Executive
Vice President, Treasurer and
Assistant Secretary
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 41,210
<INT-BEARING-DEPOSITS> 357
<FED-FUNDS-SOLD> 25,600
<TRADING-ASSETS> 0
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<INVESTMENTS-CARRYING> 50,171
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<DEPOSITS> 1,042,728
<SHORT-TERM> 27,940
<LIABILITIES-OTHER> 7,149
<LONG-TERM> 19,365
0
0
<COMMON> 19,133
<OTHER-SE> 83,729
<TOTAL-LIABILITIES-AND-EQUITY> 1,200,044
<INTEREST-LOAN> 18,276
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<INTEREST-OTHER> 212
<INTEREST-TOTAL> 22,137
<INTEREST-DEPOSIT> 8,331
<INTEREST-EXPENSE> 9,032
<INTEREST-INCOME-NET> 13,105
<LOAN-LOSSES> 388
<SECURITIES-GAINS> (15)
<EXPENSE-OTHER> 9,939
<INCOME-PRETAX> 4,810
<INCOME-PRE-EXTRAORDINARY> 4,810
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,126
<EPS-PRIMARY> .82
<EPS-DILUTED> 0
<YIELD-ACTUAL> 4.86
<LOANS-NON> 8,477
<LOANS-PAST> 83
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<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 8,071
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<ALLOWANCE-CLOSE> 7,766
<ALLOWANCE-DOMESTIC> 7,766
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
