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: June 30, 2000
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
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(State of Incorporation) (I.R.S. Employer Identification Number)
551 Main Street, Johnstown, Pennsylvania 15901
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(Address of Principal Executive Offices) (Zip Code)
(814) 532-3801
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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:
16,683,294 shares common stock
($5.00 par value)
as of August 2, 2000
BT FINANCIAL CORPORATION AND AFFILIATES
FORM 10-Q
June 30, 2000
Part I. Financial Information Page No.
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Item 1.
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Consolidated Balance Sheet - June 30, 2000
and December 31, 1999 3
Consolidated Statement of Income
Three and Six Months Ended June 30, 2000 and 1999 4
Consolidated Statement of Cash Flows
Six Months Ended June 30, 2000 and 1999 5
Consolidated Statement of Comprehensive Income
Three and Six Months Ended June 30, 2000 and 1999 6
Notes to Consolidated Financial Statements 7
Item 2.
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Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Item 3.
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Quantitative and Qualitative Disclosures about Market Risk 21
Part II. Other Information
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Item 1.
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Legal Proceedings 21
Item 2.
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Changes in Securities and Use of Proceeds 21
Item 3.
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Defaults Under Senior Securities 21
Item 4.
-------
Submission of Matters to a Vote of Security Holders 21
Item 5.
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Other Information 22
Item 6.
-------
Exhibits and Reports on Form 8-K 22
Signatures 23
ITEM 1
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FINANCIAL STATEMENTS
--------------------
BT FINANCIAL CORPORATION AND AFFILIATES
---------------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------
(In thousands, except shares and per share data)
JUNE 30 December 31
2000 1999
(UNAUDITED)
-------------------------
ASSETS
Cash and cash equivalents $ 70,195 $ 65,812
Interest-bearing deposits with banks 893 136
Federal funds sold 5,000 49,000
Securities available-for-sale 404,636 359,883
Securities held-to-maturity (market values
of $1,976 at June 30, 2000 and
$1,983 at December 31, 1999) 2,000 1,999
-------------------------
Total securities 406,636 361,882
-------------------------
Loans: 1,495,124 1,529,696
Less: Unearned interest 11,020 14,872
Reserve for loan losses 15,707 15,654
-------------------------
Net loans 1,468,397 1,499,170
Premises and equipment 28,124 29,265
Accrued interest receivable 12,729 12,660
Other assets 43,631 42,747
-------------------------
Total assets $2,035,605 $2,060,672
=========================
LIABILITIES
Deposits:
Non-interest-bearing $ 236,711 $ 241,293
Interest-bearing 1,374,549 1,353,826
-------------------------
Total deposits 1,611,260 1,595,119
Federal funds purchased and securities sold
under agreements to repurchase 40,914 37,607
Short-term borrowings 27,478 78,750
Accrued interest payable 8,903 7,840
Other liabilities 5,555 6,319
Long-term borrowings 150,740 150,010
--------------------------
Total liabilities 1,844,850 1,875,645
--------------------------
SHAREHOLDERS' EQUITY
Preferred stock, no par value
2,000,000 shares authorized,
None outstanding --- ---
Common stock, par value $5 per share,
25,000,000 shares authorized,
shares issued: 16,683,294 at June 30, 2000
and December 31, 1999 83,416 83,416
Surplus 58,950 58,956
Retained earnings 59,106 53,666
Accumulated other comprehensive (loss) income (10,717) (11,011)
---------------------------
Total shareholders' equity 190,755 185,027
---------------------------
Total liabilities and
shareholders' equity $2,035,605 $2,060,672
===========================
The accompanying notes are an integral part of the consolidated financial
statements.
3
BT FINANCIAL CORPORATION AND AFFILIATES
---------------------------------------
CONSOLIDATED STATEMENT OF INCOME
--------------------------------
(Unaudited)
(In thousands, except shares and per share data)
Three months ended Six months ended
June 30 June 30
2000 1999 2000 1999
-------------------------------------------
INTEREST INCOME
Loans, including fees $29,933 $28,360 $59,999 $55,455
Investment securities:
Taxable 4,630 4,399 9,015 9,069
Tax-exempt 1,285 1,362 2,577 2,694
Deposits with banks 3 3 5 4
Federal funds sold 534 219 1,144 362
--------------------------------------------
TOTAL INTEREST INCOME 36,385 34,343 72,740 67,584
--------------------------------------------
INTEREST EXPENSE
Deposits 13,981 11,617 27,046 23,637
Federal funds purchased
and securities sold under
agreements to repurchase 394 344 757 660
Short-term borrowings 426 201 1,440 229
Long-term borrowings 2,022 1,853 4,036 3,143
--------------------------------------------
TOTAL INTEREST EXPENSE 16,823 14,015 33,279 27,669
--------------------------------------------
NET INTEREST INCOME 19,562 20,328 39,461 39,915
Provision for loan losses 897 1,693 2,100 3,170
--------------------------------------------
Net interest income
after provision for
loan losses 18,665 18,635 37,361 36,745
--------------------------------------------
OTHER INCOME
Trust and investment
management income 1,129 1,045 2,260 2,018
Fees for other services 2,676 2,650 5,040 4,904
Net security gains 43 13 72 90
Other income 388 833 724 999
--------------------------------------------
TOTAL OTHER INCOME 4,236 4,541 8,096 8,011
--------------------------------------------
OTHER EXPENSES
Salaries and wages 5,953 5,650 11,913 11,658
Pension and other
employee benefits 1,158 1,322 2,292 2,673
Net occupancy expense 1,175 1,219 2,419 2,486
Equipment expense 1,414 1,519 2,806 3,019
Amortization of intangible
assets 492 523 984 1,047
Other taxes 473 449 954 929
Other operating expense 3,584 3,637 6,680 7,037
--------------------------------------------
TOTAL OTHER EXPENSES 14,249 14,319 28,048 28,849
--------------------------------------------
INCOME BEFORE INCOME TAXES 8,652 8,857 17,409 15,907
Provision for income taxes 2,491 2,599 5,130 4,588
--------------------------------------------
NET INCOME $ 6,161 $ 6,258 $12,279 $11,319
============================================
Earnings per common share-Basic
and Diluted $ .37 $ .38 $ .74 $ .68
Weighted average common shares
Outstanding-Basic 16,683,294 16,683,294 16,683,294 16,683,294
Weighted average common shares
Outstanding-Diluted 16,683,294 16,683,294 16,683,294 16,684,536
Dividends paid per common
share $ .21 $ .17 $ .41 $ .33
The accompanying notes are an integral part of the consolidated financial
statements.
4
BT FINANCIAL CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(In thousands)
Six months ended
June 30
2000 1999
------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $12,279 $11,319
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses 2,100 3,170
Provision for depreciation and
amortization 1,985 2,344
Amortization of intangible assets 984 1,047
Amortization of premium, net of
accretion of discount on loans and
securities (98) (123)
Deferred income taxes (253) (421)
Gain from sale of branches -- (609)
Realized net securities gains (72) (90)
Proceeds from sale of loans 9,451 1,253
Increase in interest receivable (69) (172)
Increase in interest payable 1,063 14
Equity in loss of limited partnerships 108 123
Other assets and liabilities, net (2,659) (1,328)
-------------------
Net cash provided by operating activities 24,819 16,527
-------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities 4,377 --
Repayments and maturities of securities
available-for-sale 8,987 30,420
Repayments and maturities of securities
held-to-maturity -- 79,193
Purchases of securities available-for-sale (57,601) (64,847)
Purchase of securities held-to-maturity --- (6,726)
Net increase in interest-bearing deposits
with banks (757) (28)
Net decrease in federal funds sold 44,000 8,900
Net decrease (increase) in loans 19,341 (159,943)
Purchases of premises and equipment and other (844) (18)
Net increase in investment in limited partnerships -- (37)
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Net cash provided by (used in) investing activities 17,503 (113,086)
--------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits 16,141 (6,719)
Net increase in federal funds purchased
and securities sold under agreements to repurchase 3,307 13,783
Net (decrease) increase in short-term borrowings (51,272) 32,797
Common stock cash dividends paid (6,839) (5,534)
Proceeds from long-term borrowings 740 50,000
Payment on long-term borrowings (10) (9)
Other (6) --
--------------------
Net cash (used in) provided by financing activities (37,939) 84,318
--------------------
Increase (decrease) in cash and cash equivalents 4,383 (12,241)
Cash and cash equivalents at beginning
of the year 65,812 67,823
--------------------
Cash and cash equivalents at end of period $70,195 $55,582
====================
The accompanying notes are an integral part of the consolidated financial
statements.
5
BT FINANCIAL CORPORATION AND AFFILIATES
---------------------------------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
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(Unaudited)
------------
(In thousands)
----------------
Three months ended Six months ended
June 30 June 30
2000 1999 2000 1999
---------------- ----------------
Net income $ 6,161 $ 6,258 $ 12,279 $ 11,319
Other comprehensive income (loss), net of tax:
Unrealized holding gains (losses) on
securities arising during period,
net of tax of $242, $(3,864),
$183, and $(4,864) 450 (7,176) 341 (9,034)
Less: Reclassification adjustment for
gains included in net income,
net of tax of $15, $5, $25, and $32 28 8 47 58
------------------ ---------------
Other comprehensive income (loss),
net of tax of $227, $(3,869),
$158, and $(4,896) 422 (7,184) 294 (9,092)
------------------ ---------------
Comprehensive income (loss) $ 6,583 $ (926) $ 12,573 $ 2,227
================== ===============
The accompanying notes are an integral part of the consolidated
financial statements.
6
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.
The consolidated financial statements of BT include the accounts of
BT and its wholly owned affiliates, Laurel Bank (Laurel), Laurel
Trust Company (the Trust Company), Bedford Associates, Inc., Laurel
Community Development Corporation, Bedford Associates of Delaware,
Inc., Flex Financial Consumer Discount (Flex), and Laurel Investment
Advisors, Inc. On July 14, 1999, BT completed a merger with First
Philson Financial Corporation (Philson). At the time of the merger,
Philson's assets were approximately $221 million. Philson owned
First Philson Bank, N.A. and Flex, a finance company subsidiary.
The merger was accounted for as a pooling-of-interests, and
accordingly, BT's accompanying consolidated financial statements
have been restated retroactively to include the accounts and
operations of Philson for all periods presented prior to the merger.
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, 1999. The results of operations for the six-
month period ended June 30, 2000 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 may differ from the statutory tax rate
due primarily to tax-exempt interest income.
3. Reserve for loan losses -- The recorded investment in loans for
which impairment has been recognized in accordance with Statement of
Financial Accounting Standards (SFAS) No. 114 totaled $5.8 million
at June 30, 2000, compared to $5.4 million at December 31, 1999 and
$856,000 at June 30, 1999. The corresponding loan loss valuation
allowance was $972,000 at June 30, 2000, compared to $1.1 million at
December 31, 1999 and $199,000 at June 30, 1999. BT recognized $71,000
and $2,000 of interest revenue on impaired loans during the six months
ended June 30, 2000 and 1999, respectively. The interest revenue
during both periods was recorded using the cash basis of income
recognition.
7
4. Earnings Per Share
------------------
The following table shows the calculation of basic and diluted
earnings per share. Except for the six months ended June 30, 1999,
BT's stock options are antidilutive for the periods presented.
Share and per share data has been adjusted to reflect the five
percent stock dividend distributed on February 1, 2000.
Three months ended Six months ended
June 30 June 30
2000 1999 2000 1999
------------------ -------------------
Basic Earnings Per Share:
Net income (in thousands) $ 6,161 $ 6,258 $ 12,279 $ 11,319
====== ====== ====== ======
Weighted average number
of common shares
outstanding-Basic 16,683,294 16,683,294 16,683,294 16,683,294
Basic Earnings Per Share $ .37 $ .38 $ .74 $ .68
====== ====== ====== ======
Diluted Earnings Per Share:
Net Income (in thousands) $ 6,161 $ 6,258 $ 12,279 $ 11,319
====== ====== ======= ======
Weighted average number
of common shares
outstanding-Basic 16,683,294 16,683,294 16,683,294 16,683,294
Effect of dilutive
stock options -- -- -- 1,242
------ ------ ------ ------
Weighted average number
of common shares
outstanding-Diluted 16,683,294 16,683,294 16,683,294 16,684,536
========== ========== ========== ==========
Diluted Earnings Per Share $ .37 $ .38 $ .74 $ .68
====== ====== ====== =====
5. Recent Accounting Pronouncements
--------------------------------
In June 1998, the Financial Accounting Standards Board (FASB)
issued SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities." The statement establishes accounting and
reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging
activities. It requires, among other things, that an entity
recognizes all derivatives as either assets or liabilities in the
8
statement of financial condition and measures those instruments at
fair value. In June of 1999, the FASB issued SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of SFAS No. 133," which postponed the
adoption date of SFAS No. 133. As such, the Corporation is not
required to adopt SFAS No. 133 until fiscal year 2001.
In June of 2000, the FASB issued SFAS No. 138, "Accounting for
Certain Derivative Instruments and Certain Hedging Activities -
an Amendment of SFAS No. 133". This statement amends the accounting
and reporting standards of SFAS No. 133 for certain derivative
instruments and hedging activities. Since BT does not currently
use derivative financial instruments, the standards would not
have any material impact on BT's financial position or results
of operations upon adoption.
In March of 2000, the FASB issued Interpretation No. 44,
"Accounting for Certain Transactions Involving Stock Compensation,
an interpretation of Accounting Principles Board Opinion (APB) No.
25". The interpretation is intended to provide accounting guidance
involving stock compensation and to clarify certain problems that
have arisen in practice since the issuance of APB No. 25 in October
1972. This interpretation is effective on July 1, 2000.
Accordingly, BT adopted the interpretation on July 1, 2000. BT does
have a stock-based compensation plan, however, the interpretation
did not have any impact on BT's financial position or results of
operations upon adoption.
6. Litigation
-----------
A purported class action was instituted in the Court of Common
Pleas of Cambria County, Pennsylvania against the former Johnstown
Bank & Trust Company (Bank and Trust), now Laurel Bank, and Security
of America Life Insurance Company (Security) in November, 1996
alleging various calculation irregularities in connection with a
residential mortgage loan to the plaintiff in the principal amount
of approximately $13,000 resulting in, among other things,
overcharges on credit life and disability insurance coverage and
other items. The plaintiff purports to represent a class of persons
who made a mortgage payment to the former Bank and Trust or any of
its subsidiaries within six years before November 21, 1996 and/or
had credit life or disability insurance coverage with Security
within six years before November 21, 1996. The complaint seeks
unspecified damages. The Corporation has filed an answer denying
that its actions breached its agreements with plaintiffs. All
parties have come to an agreement to settle the action. The Court
entered an order approving the settlement on April 20, 2000. The
parties have agreed to a settlement class of 432 accounts, the
number of residential mortgages which the bank converted from one
method of accounting to another. Notices were sent to all 432
accounts and 3 potential class members opted not to participate in
the settlement, meaning these borrowers could bring lawsuits for
their individual claims against the defendants if they choose. One
borrower stated its good relations with Bank and Trust as its reason
for opting out. The other 2 borrowers did not state their reasons
for opting out. Laurel Bank and Security agreed to contribute
$200,000 and $25,000, respectively, to the settlement fund, with
interest on the settlement contributions calculated at 5.9% per
annum until the time of payment. On May 18, 2000, Laurel Bank's
counsel transmitted to plaintiff's counsel Laurel Bank's settlement
check in the amount of $204,364. The amount represents Laurel
Bank's contribution toward the settlement of $200,000 plus $4,364
in interest.
9
On November 19, 1997, Laurel Capital Group, Inc, and its wholly-
owned subsidiary, Laurel Savings Bank, filed a suit in the United
States District Court in the Western District of Pennsylvania
claiming that Laurel Bank infringed on its common law trademark and
servicemark rights by using the name "Laurel" and a related logo in
an undefined market area referred to as the "Pittsburgh area." The
suit seeks to enjoin Laurel from using its name and related logo in
the "Pittsburgh area" and seeks unspecified damages. Laurel Savings
Bank is a thrift institution with five branch locations in the North
Hills of Pittsburgh and one branch in Butler County. Pending a
hearing on plaintiffs' motion for preliminary injunction, Laurel
agreed to refrain from using the "Laurel" name or any related logo
on any bank documents, advertisements, or promotional materials in
the "Pittsburgh area". In April 1999, the Court granted plaintiff's
partial motion for summary judgment, concluding that plaintiff has
the exclusive right to use the word "Laurel" in its name within a
geographic area around its offices in the Pittsburgh area, but the
court did not define the area of exclusive use. While the plaintiff
contends that the zone of exclusive use encompasses the metropolitan
"Pittsburgh area", Laurel Bank contends that this zone is
substantially smaller. The issue of the scope of the "Pittsburgh
area" remains to be decided. On April 26, 2000, the Court held a
conference for the purpose of facilitating settlement discussions.
In the meantime, the court has suspended the schedule for expert
reports and briefing on the issue of the scope of the "Pittsburgh
area" in an effort to facilitate a settlement. The impact of this
litigation on BT cannot be fully assessed at this stage of the
proceedings.
Due to the nature of their activities, BT and its subsidiaries are
at all times engaged in other various legal proceedings which arise
in the normal course of their businesses. While it is difficult to
predict the outcome of these proceedings, management believes the
ultimate liability, if any, will not materially affect BT's
consolidated financial position or results of operations.
7. Stock Dividend
---------------
On December 22, 1999, BT's Board of Directors declared a five
percent stock dividend. The dividend was distributed on February 1,
2000, to shareholders of record as of January 4, 2000. All share
and per share data in this report has been adjusted to reflect the
stock dividend.
8. Stock Based Compensation Plan
-------------------------------
On January 5, 2000, under the 1998 Equity Incentive Plan, BT granted
non-qualified stock options to certain employees and directors to
purchase 111,500 shares of BT Common Stock. The exercise price of
the options was $20 per share which equaled the market price of BT's
Common Stock on the date of grant. The stock options became
exercisable on January 6, 2000 and have a maximum term of 10 years.
10
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 June 30, 2000 and December 31, 1999,
and the material changes in results of operations comparing the three and
six month periods ending June 30, 2000 with the respective results for the
comparable periods of 1999 for BT. The following should be read in
conjunction with BT's Annual Report on Form 10-K for the year ended
December 31, 1999.
On July 14, 1999, BT completed a merger with First Philson Financial
Corporation (Philson). Philson owned First Philson Bank, N.A. and Flex
Financial Consumer Discount Company, a finance company subsidiary. At the
time of the merger, Philson's assets were approximately $221 million. The
merger has been accounted for as a pooling-of-interests, and accordingly,
BT's consolidated financial statements have been restated retroactively to
include the accounts and operations of Philson for all periods presented
prior to the merger. This acquisition strengthened BT's leading market
position in Somerset County, Pennsylvania, where BT currently represents
over one-third of total bank and thrift deposits.
Forward-Looking Statements
--------------------------
Except for historical information contained herein, the matters discussed in
this report or incorporated by reference in this report may contain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
that involve substantial risks and uncertainties. When used in this
report, or in the documents incorporated by reference in this report, the
words "anticipate," "believe," "estimate," "may," "intend," "expect" and
similar expressions identify certain of such forward-looking statements.
Actual results, performance or achievements could differ materially from
those contemplated, expressed or implied by the forward-looking statements
contained herein. Factors that could cause future results to vary from
current expectations include, but are not limited to the following:
changes in economic conditions (both generally and more specifically in
the markets in which BT operates); changes in interest rates, deposit
flows, loan demand, real estate values and competition; changes in
accounting principles, policies or guidelines and in government
legislation and regulation (which change from time to time and over which
BT has no control); other factors affecting BT's operations, markets,
products and services; and other risks detailed in this report and in BT's
other Securities and Exchange commission filings. Readers are cautioned
not to place undue reliance on these forward-looking statements, which
reflect management's analysis only as of the date hereof. The Company
undertakes no obligation to publicly revise these forward-looking
statements to reflect events or circumstances that arise after the date
hereof.
11
FINANCIAL REVIEW
----------------
Overview
--------
BT's primary financial objectives are to expand the growth and
profitability of the Corporation through: (1) expansion and
diversification of revenue streams in fee income, trust, and investment
management areas, (2) increases in market share growth by way of expanded
sales-focused initiatives, (3) implementation of various efficiency
strategies including the continuous refinement of BT's product delivery
systems and (4) strategic mergers and acquisitions. Maintaining high
asset quality while managing internal and merger-related growth remains an
essential element in BT's expansion strategies. BT's strategic business
plan targets retail consumers and small to mid-sized businesses by
offering a full menu of banking and financial services.
BT's merger with Philson in July of 1999 increased total assets to
approximately $2.0 billion. Philson's banking subsidiary, First Philson
Bank, N.A., operated nine branches in Somerset and Fayette counties and
was merged into Laurel Bank upon consummation of the merger. Philson also
owned Flex Financial Consumer Discount Company (Flex), which continues to
operate as a non-bank subsidiary of BT. Targeted synergies and
efficiencies resulting from the merger have been realized as evidenced by
an improved efficiency ratio of 56.7% in the first six months of 2000
compared to 58.3% in the same period of 1999. Additionally, total other
expenses declined $801,000 or 2.8% over the same period. Cost-saving
measures included the elimination of redundant overhead expenses and some
branch closures due to overlapping market areas. During the fourth
quarter of 1999, two branches of the former Philson Bank, N.A., along with
one branch of Laurel, were closed and consolidated into nearby locations
as a result of duplicate service areas created by the merger. BT is
generating additional revenues through the expansion of Flex's market and
by targeting trust and investment services to the former Philson customer
base.
BT reported net income of $12.3 million or $.74 per share for the six
month period ending June 30, 2000, a 12.1% increase over core operating
earnings of $11.0 million or $.66 per share earned in the same period of
1999. A nonrecurring net after-tax gain on the sale of branch offices of
$366,000 in the second quarter of 1999 contributed to total net income of
$11.3 million or $.68 per share for the six month period ended June 30,
1999. The strong core earnings improvement was driven primarily by
increased fee income along with a reduction in operating expenses which
offset a decreased level of net interest income due to margin pressure.
Additionally, a lower loan loss provision was realized in the current year
due to reduced lending activity caused mainly by rising interest rates.
For the second quarter of 2000, BT recorded net income of $6.2 million or
$.37 per share, a 4.6% increase when compared to core operating earnings
of $5.9 million or $.35 per share in the second quarter of 1999. The net
effect from the nonrecurring sale of branches increased 1999's second
quarter to $6.3 million or $.38 per share.
On July 26, 2000, BT's Board of Directors declared a quarterly cash
dividend of $.21 per share to shareholders of record on August 7, 2000,
payable September 1, 2000. On a current year-to-date basis, dividends per
share have increased 24.2% over the same period of 1999. This increase is
in keeping with BT's practice of reflecting the Company's success in its
dividend policy.
12
CHANGES IN FINANCIAL POSITION
Total assets at June 30, 2000 were $2.036 billion compared to $2.061
billion at December 31, 1999 and $2.003 billion at June 30, 1999. The
1.2% decrease from year-end 1999 was primarily due to the retirement of
$50 million in a short-term borrowing at the Federal Home Loan Bank. The
1.6% increase over June 30, 1999 was mainly due to a higher level of
securities funded primarily by increased deposit levels. Average total
assets for the six months ended June 30, 2000 were $2.031 billion,
representing an increase of $99.6 million or 5.2% over the six months
ended June 30, 1999. Average total assets for the quarter ended June 30,
2000 were $2.024 billion, representing a $62.0 million or 3.2% increase
over the quarter ended June 30, 1999. The rise over both comparison
periods was primarily due to increased loan levels. Average total assets
declined slightly by $14.2 million or 0.7% in the current quarter compared
to the first quarter of 2000 due mainly to reduced loan activity.
Total shareholders' equity was $190.8 million at June 30, 2000 compared to
$185.0 million at year-end 1999 and $185.8 million at June 30, 1999. The
increase of $5.7 million over year-end 1999 and $4.9 million over June 30,
1999 was mainly due to BT's net income. The increase compared to June
30, 1999 was tempered by a reduction in accumulated other comprehensive
income (loss) due to decreases in market values on securities
available-for-sale. The generally upward interest rate movement
experienced over the last twelve months has resulted in a net-of-tax fair
value securities valuation decline of $3.7 million, comparing the current
period versus June 30, 1999.
Total loans outstanding at June 30, 2000, net of unearned interest,
declined $30.7 million, or 2.0%, compared to year-end 1999 versus a
minimal increase of $1.0 million, or 0.1% compared to June 30, 1999. The
decline from year-end 1999 resulted primarily from decreases in consumer
and residential mortgage loans. Decreased loan activity in these areas
has been directly attributable to a higher interest rate environment.
These declines are consistent with national trends suggesting a general
slowdown in lending activity this year due to the increased rates.
However, BT's commercial loan levels have remained fairly steady as
lenders continue to target existing and potential commercial relationship
opportunities within BT's market area. The slight increase in loans over
June 30, 1999 was due to higher balances in consumer home equity and
commercial loans which were offset by a decline in residential mortgage
loans. BT operates six local sales-focused banking regions throughout its
market area, designed to incorporate local market knowledge with the
backing of a corporate business plan tailored to offer customers a
complete array of lending and other financial products. In 2000, BT has
focused on enhancing its consumer loan function by centralizing the direct
consumer lending area. The key benefits of this centralization include
consistent credit scoring, quicker approval and turnaround time, enhanced
documentation, and improved control over the entire loan process.
Customers will benefit by the time-savings features inherent in the
centralized structure and the resulting improvement in customer service.
Additionally, BT has recently stimulated consumer lending demand by
offering competitive rates on selected products through various
promotional campaigns. In order to profitably expand customer
relationships and meet customer needs, BT has expanded its offering of
loan terms and maturities to its customer base. BT then executes funding
strategies and other balance sheet management techniques to optimize the
related impact on BT's operating results. As an example, BT has
established secondary market relationships which allow the sale of certain
13
longer-term loans. This enhances BT's capability to manage its balance
sheet more effectively both from a liquidity and risk perspective while
providing the potential for fee gains related to the asset sales. In
2000, BT has sold some selected residential mortgage and consumer home
equity loans to third parties as part of the aforementioned strategy.
BT's nonperforming assets increased $3.4 million, or 31.2%, and $3.3
million, or 29.7%, compared to year-end 1999 and June 30, 1999,
respectively. The increase over both periods was principally due to the
addition of two nonperforming commercial lending relationships totaling
approximately $4.2 million at June 30, 2000. Management is currently
anticipating only a nominal loss in connection with these credits and is
expecting these particular loans to pay off within the next few quarters.
BT's loans are targeted to individuals and businesses within its marketing
region. This strategy enables BT to leverage its local market expertise to
attain its goal of a strong credit culture without exposure to areas outside
of BT's markets.
Management's policy is to maintain an adequate loan loss reserve to cover
inherent losses in the loan portfolio. The evaluation process to
determine potential losses includes loan reviews, collateral adequacy
assessments, an analysis of specific conditions of the borrower and an
assessment of general economic conditions. The BT Credit and Collection
functions continuously monitor and assess credit quality to minimize
exposure to potential future credit losses. The reserve for loan losses
as a percent of loans, net of unearned interest, increased to 1.06% at
June 30, 2000, compared to 1.03% at year-end 1999 and June 30, 1999. BT
has gradually increased the loan loss reserve as a percent of loans
outstanding and will continue to monitor the effect of the economy and
other trends on credit quality. The following table provides information
with respect to the components of BT's nonperforming assets and related
ratios for the periods indicated.
14
JUNE 30 December 31 June 30
(In thousands) 2000 1999 1999
-------------------------------
Loans 90 days or more past-due $ 867 $ 582 $ 4,118
Restructured loans 211 212 213
Nonaccrual loans 12,125 8,936 5,604
-------------------------------
Total nonperforming loans 13,203 9,730 9,935
Other real estate owned 297 502 633
Repossessed assets 949 784 573
-------------------------------
Total nonperforming assets $ 14,449 $ 11,016 $ 11,141
===============================
Nonperforming loans as a % of
loans, net of unearned interest .89% .64% .67%
Reserve for loan losses to
nonperforming loans 1.2x 1.6x 1.5x
Reserve for loan losses as a % of
loans, net of unearned interest 1.06% 1.03% 1.03%
Total investment securities have increased $44.8 million, or 12.4%, and
$22.8 million, or 5.9%, compared to year-end 1999 and June 30, 1999,
respectively. Most of the increase over both periods was due to a higher
level of mortgage-backed securities in the current period. BT's
securities are purchased to enhance the overall yield on earning assets
and to contribute to the management of interest rate risk and liquidity.
Loans generally provide higher yields than securities, and sound loan
expansion remains one of BT's key growth strategies.
Period-end total deposits increased by $16.1 million, or 1.0%, and $39.8
million, or 2.5%, compared to year-end 1999 and June 30, 1999,
respectively. The increase over both periods was driven by higher
certificate of deposit balances. BT has recently targeted growth in this
product line by offering more aggressive rates for selected maturities.
This strategy allows BT to meet its funding needs at rates lower than
current wholesale credit sources. BT's total average deposits for the
first six months of 2000 were $1.592 billion, representing an increase of
$33.1 million, or 2.1%, compared to the first six months of 1999. BT's
total average deposits for the second quarter of 2000 were $1.603 billion,
representing a $43.5 million or 2.8% increase over the second quarter of
1999. The six-month and quarterly average increases were due to
certificate of deposit and demand deposit growth, which offset declines in
savings, interest-checking, and money market accounts.
BT's short-term borrowings (consisting of federal funds purchased,
securities sold under agreements to repurchase and other short-term
borrowings) declined $48.0 million compared to year-end 1999 due mainly to
the retirement of $50 million in short-term debt at the Federal Home Loan
Bank (FHLB) in the first quarter of 2000. Short-term borrowings decreased
$17.4 million compared to June 30, 1999 due to a $17.0 million decline in
federal funds purchased. BT had long-term borrowings of $150.0 million at
June 30, 2000 provided by the FHLB during 1998 and 1999. The borrowings,
15
scheduled to mature in years 2008 and 2009, had interest rates ranging
from 4.99% to 5.56% at June 30, 2000. BT's funding strategy utilizes
alternative nondeposit funding sources when deemed appropriate as a means
to supplement internal deposit growth. Loans, net of unearned interest,
as a percentage of deposits, were 92.1%, 95.0%, and 94.4% at June 30, 2000,
December 31, 1999, and June 30, 1999, respectively. BT strives to
maintain the loan to deposit ratio under 100% in order not to become
dependent on higher cost funding sources. Funding strategies are actively
managed by BT's Asset/Liability Committee to ensure adequate liquidity and
to control interest rate risk exposure while maximizing profitability.
RESULTS OF OPERATIONS
A five percent stock dividend was declared on December 22, 1999 to
shareholders of record at January 4, 2000. The stock dividend was
distributed on February 1, 2000. All per share data in the following
discussions reflects the stock dividend.
Second Quarter 2000 vs. Second Quarter 1999
For the second quarter of 2000, BT produced net income of $6.2 million,
or $.37 per share, compared to core operating earnings of $5.9 million,
or $.35 per share earned in the same period of 1999. Second quarter 1999
earnings were impacted by the sale of two Indiana, PA branches of Laurel
Bank which produced an after-tax gain of $366,000 ($.02 per share). The
$269,000 or 4.6% increase in core operating results, which excludes the
nonrecurring gain from the sale of branches, primarily resulted from
improved fee income levels and expense control in the current quarter. A
decline in net interest income was largely offset by a reduced provision
for loan losses. Including the nonrecurring gain, net income decreased
$97,000 or 1.6% in the current quarter compared to the quarter ended June
30, 1999.
The annualized return on average assets for the second quarters of 2000
and 1999 was 1.22% and 1.20%, respectively. The annualized return on
average shareholders' equity was 13.16% in 2000 and 12.44% in 1999. The
return on average tangible shareholders' equity, which excludes
intangible amortization expense from net income and intangibles from
average shareholders' equity was 15.74% and 15.16% for the second
quarters of 2000 and 1999, respectively. The above ratios exclude the
impact of the gain from the sale of the two Indiana, PA branches in the
second quarter of 1999. Including the nonrecurring gain, the ratios for
the second quarter of 1999 were 1.28% (return on average assets), 13.21%
(return on average equity), and 16.03% (return on average tangible
equity).
Fully taxable equivalent net interest income decreased $874,000, or 4.1%,
to $20.6 million in the second quarter of 2000 compared to the second
quarter of 1999. The decrease was primarily due to a decline in the net
interest margin of 37 basis points to 4.29% in the current quarter. The
decline in the margin has resulted from a rise in interest rates
initiated by the Federal Reserve over the past year. The rising interest
rate environment has the effect of reducing the net interest margin as
the cost of funds rises faster than the yield on interest earning assets.
Total average earning assets increased $78.9 million or 4.3% to $1.922
billion, while average interest-bearing liabilities rose $57.3 million or
3.8% to $1.579 billion in the current quarter compared to the second
quarter of 1999. Average earning assets yielded 7.80% compared to 7.71%
while the rate paid on average interest-bearing liabilities increased to
16
4.27% from 3.69% over the same period, respectively. The increased cost
of funds has primarily resulted from both volume and rate increases in
certificates of deposit balances. BT has pursued growth in non-interest
bearing demand deposits as a means to mitigate margin compression.
Accordingly, average demand deposits rose $2.6 million or 1.1% to $240.4
million in the current quarter compared to the second quarter of 1999.
This increase supported the improvement in the effective
yield on non-interest paying funds of 12 basis points to .76%
from .64% over the same period. Average demand deposits increased
by $7.2 million in the current quarter compared to the first quarter
of 2000. This increase supported the stabilization of the net
interest margin in the current quarter compared to the first quarter
of this year as the margin held relatively steady at 4.29% versus 4.33%,
respectively. BT is anticipating some additional margin pressure in its
near-term outlook due to the higher interest rate environment. However,
management believes any further margin reductions from current levels will
be somewhat minimal as evidenced by its recent stabilization.
The provision for loan losses decreased $796,000 in the second quarter of
2000, compared to the same period in 1999 due to management's assessment
of the provision necessary to maintain an adequate reserve against
potential future losses based upon the current size and quality of the
loan portfolio. Additionally, the provision has decreased due to the
recent moderate loan activity. Net charge-offs were approximately
$846,000 in 2000 compared to $750,000 in 1999. The increase was due to a
higher level of credit losses in consumer loans which offset a decline in
charged off commercial loans. Net charge-offs represented .23% of average
loans, net of unearned interest, on an annualized basis for the second
quarter of 2000 compared to .21% for the same quarter last year.
Total other income, excluding a pre-tax $609,000 one-time gain from the sale of
two branches in the second quarter of 1999, increased $304,000 or 7.7% in
the second quarter of 2000 compared to the same period last year. The
gain in other income reflects BT's continuing strategy of emphasis on
growth in fee-related revenues and less reliance on net interest income.
As a percent of total revenue, BT's other income increased to 17.8% in the
current quarter compared to 16.2% for the quarter ended June 30, 1999,
excluding the branch sale gain. Trust and investment management income
increased $84,000, or 8.0%, to $1.1 million, reflecting continued
expansion in assets under management. Service fees are the most
significant component of BT's other income, generating 63.2% of total
other income in the current quarter. Service fees increased 1.0% to $2.7
million despite a lower level of loan insurance commissions related to
decreased loan activity this year. In the current quarter, the other
income component of total other income grew to $388,000, representing an
increase of $164,000, or 73.2%, over the second quarter of 1999 excluding
the branch sale gains. The higher level was primarily due to an $89,000
increase in gains realized in connection with the sale of certain loans.
Security gains increased $30,000 in the current quarter compared to the
same quarter last year.
Other expenses declined by 0.5% to $14.2 million in the second quarter of
2000 compared to the same period last year despite a $204,000 reduction of
the deferral of loan origination costs as prescribed under Statement of
Financial Accounting Standards No. 91. This reduction has resulted from a
lower level of loan activity this year. Excluding the impact of the loan
origination costs, total expenses declined $274,000 or 1.9% in the current
quarter compared to the second quarter of 1999. The lower expense level
was primarily due to the successful implementation of targeted cost
savings associated with the Philson acquisition and management's ongoing
17
cost-containment efforts. Salaries and benefits rose 2.0% due to the
reduced loan origination cost deferral. Occupancy and equipment expense
declined 3.6% and 6.9%, respectively. Occupancy expense was impacted by
the consolidation of three branch offices resulting from the Philson
acquisition and the two branches sold in the second quarter of 1999.
Other operating expenses declined 1.5% reflecting the elimination of
duplicative expense structures at BT and Philson. BT continuously
evaluates the efficiency of its operations to seek improved processes and
delivery channels which will best serve its customers while reducing
operating costs. BT's Internet banking product is currently in its final
testing phase and should be fully operational in the near future. BT will
employ the newest technologies to offer its customers a superior and
highly secure on-line banking product.
BT's effective tax rate was 28.8% for the second quarter of 2000 compared
to 29.3% for the same period of 1999. The change in the effective rate
reflects the change in tax-exempt interest income and the application of
permanent and temporary differences during the respective periods.
Six Months Ended June 30, 2000 vs. Six Months Ended June 30, 1999
Consolidated net income increased 12.1%, to $12.3 million,
or $.74 per share in the first six months of 2000 compared to
core earnings of $11.0 million, or $.66 per share earned in the same
period of 1999. Earnings in the six month period ended June 30, 1999
were impacted by a nonrecurring after-tax gain of $366,000 realized in
connection with the sale of two branches in the second quarter of 1999.
The improved core profit performance in net income and earnings per share
growth of 12.1%, which excludes the branch sale gain, was largely
a result of targeted cost savings from the July 1999 Philson
merger and continued fee income increases. The rise in interest rates
over the last year has increased the cost of funds and contributed
to a decline in demand for loans, resulting in continued erosion of
the net interest margin. Accordingly, net interest income delined
$454,000 or 1.1% when comparing the first six months of 2000 to
the same period of 1999. This decline was offset by a $1.1
million decrease in the provision for loan losses, which also
resulted from reduced loan activity. BT's efficiency ratio of
56.7% in the first half of 2000 compared favorably to the 58.3%
core ratio in the first half of 1999, reflecting the successful
integration of Philson into BT and management's ongoing efforts to
control overhead costs. The branch sale gain contributed to total
net income of $11.3 million or $.68 per share earned for the six
month period ended June 30, 1999.
For the first six months of 2000, the annualized core return on average
assets was 1.21% compared to 1.14% in 1999. The annualized core return
on average shareholders' equity for the first six months of 2000 and 1999
was 13.21% and 11.64%, respectively. The return on average tangible
shareholders' equity, which excludes intangible amortization expense from
net income and intangibles from average shareholders' equity, was 15.86%
for the first half of 2000 compared to 14.30% in 1999. The above ratios
exclude the impact of the gain from the sale of the two branches in the
second quarter of 1999. Including the gain, the returns on average
assets, equity, and tangible equity were 1.18%, 12.03% and 14.73% for the
first half of 1999, respectively.
Fully taxable equivalent net interest income decreased $609,000, or 1.4%,
to $41.5 million in the first six months of 2000 compared to the same
period of 1999. The decrease was primarily due to a decline in the net
interest margin of 37 basis points to 4.31% in the first half of 2000.
The decline in the margin has resulted from a rise in interest rates
initiated by the Federal Reserve over the past year which has increased
18
funding costs and hampered loan growth. The contraction of the net
interest margin resulted from a minimal increase of 1 basis point in the
yield on earning assets to 7.77% and a rise of 46 basis points in the
cost of funds to 4.19%. Total average earning assets increased $118.0
million or 6.5% to $1.930 billion, while average interest-bearing
liabilities rose $93.4 million or 6.2% to $1.591 billion in the first half
of 2000 compared to the same period of 1999. The increased cost of funds
has primarily resulted from both volume and rate increases in
certificates of deposit balances. Average demand deposits rose $5.0
million or 2.2% to $236.8 million in the first six months of 2000
compared to the same period of 1999. This increase supported the
improvement in the effective yield on non-interest paying funds of
18 basis points to .73% from .65% over the same period. BT continues
to emphasize growth in demand deposits which contribute additional
funds available for investment at no interest cost.
The provision for loan losses decreased $1.1 million in the first half of
2000, compared to the same period in 1999 due to management's assessment
of the provision necessary to maintain an adequate reserve against
potential future losses based upon the current size and quality of the
loan portfolio. Additionally, the provision has decreased due to the
recent moderate loan activity. Net charge-offs were approximately $2.0
million in 2000 compared to $1.6 million in 1999. The increase was due to
a higher level of credit losses in consumer loans in the current year.
Net charge-offs represented .27% of average loans, net of unearned
interest, on an annualized basis for the first half of 2000 compared to
.22% for the same period of last year.
Total other income, excluding a $609,000 one-time gain from the sale of
two branches in the second quarter of 1999, increased $694,000 or 9.4% in
the first half of 2000 compared to the same period last year. The gain
in other income reflects BT's continuing strategy of emphasis on growth
in fee-related revenues and less reliance on net interest income. As a
percent of total revenue, BT's other income increased to 17.0% in the
first six months of 2000 compared to 15.6% for the same period of 1999,
excluding the branch sale gain. Trust and investment management income
increased $242,000, or 12.0%, to $2.3 million, reflecting continued
expansion in assets under management. Service fees generated 62.3% of
total other income in the first half of 2000. These fees increased
2.8% to $5.0 million despite a lower level of credit life insurance fees
which was related to decreased loan activity this year. The other income
component of total other income grew to $724,000, representing an increase
of $334,000, or 85.6%, over 1999 excluding the branch sale gains. The
higher level was primarily due to a $167,000 increase in gains realized
in connection with the sale of certain loans. Security gains declined
$18,000 in the first half of 2000 compared to the same period last year.
Other expenses declined by 2.8% or $801,000 comparing the first six
months of 2000 to the first six months of 1999, primarily due to the
successful implementation of targeted cost savings associated with the
Philson acquisition, which was consummated in July of 1999. Accordingly,
BT's efficiency ratio improved to 56.7% for the first half of 2000
compared to 58.3% for the same period of 1999 reflecting the lower
expense levels. Employee expense declined approximately 1% comparing the
first six months of 2000 to the same period in 1999. Net occupancy
expense declined 2.7% in the first half of 2000 and equipment expense
declined 7.1% due to branch consolidations, the sale of two branch
locations in May of 1999 and the consolidation of data processing
functions at BT and Philson. All other expenses declined by 4.4%
primarily due to the elimination of duplicate cost structures at BT and
Philson.
19
BT's effective tax rate was 29.5% for the first half of 2000 compared to
28.9% for the same period of 1999. The change in the effective rate
reflects the change in tax-exempt interest income and the application of
permanent and temporary differences during the respective periods.
CAPITAL ADEQUACY
At June 30, 2000, BT continued to maintain capital levels designating BT
as "Well Capitalized". BT's capital ratios as of June 30, 2000 and
December 31, 1999 are presented in the table below. The required
regulatory ratios, representing the level needed to meet "Adequately
Capitalized" status are also presented.
Regulatory
6-30-00 12-31-99 Requirement
------- -------- -----------
Tier I Risk Based Ratio 12.37% 11.79% 4.00%
Total Capital Risk Based Ratio 13.43% 12.83% 8.00%
Tier I Leverage Ratio 9.06% 8.56% 4.00%
COMMITMENTS AND CONTINGENCIES:
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
The Corporation is a party to financial instruments with off-balance-sheet
risk in the normal course of business to meet the financing needs of its
customers. These financial instruments consist of loan commitments and
standby letters of credit. The Corporation's exposure to loss in the
event of nonperformance by the other party to the financial instrument for
loan commitments and standby letters of credit is represented by the
contractual amount of these instruments. The Corporation uses the same
credit policies in making commitments and conditional obligations as it
does for on-balance-sheet instruments.
The face amounts of financial instruments with off-balance-sheet risk at
June 30, 2000 were as follows:
(In thousands)
Loan commitments $176,870
Standby letters of credit 11,480
Since many of the loan commitments may expire without being drawn upon,
the total commitment amount does not necessarily represent future cash
requirements or loss exposures. The Corporation evaluates each customer's
creditworthiness on a case-by-case basis. The amount of collateral
obtained, if deemed necessary by the Corporation upon extension of credit,
is based on management's credit evaluation of the customer. Standby
letters of credit are unconditional commitments issued by the Corporation
to support the financial obligations of a customer to a third party.
These guarantees are primarily issued to support public and private
borrowing arrangements. The credit risk involved in issuing letters of
credit is essentially the same as that involved in extending loans. The
collateral varies but may include accounts receivable, inventory and
property, plant and equipment for those commitments for which collateral
is deemed necessary.
20
ITEM 3
------
Quantitative and Qualitative Disclosures about Market Risk
----------------------------------------------------------
There have been no material changes in the Corporation's market risk during
the three or six months ended June 30, 2000. For additional information,
refer to pages 50 and 51 in the Annual Report of BT on Form 10-K as filed
on March 29, 2000 for the fiscal year ended December 31, 1999 which is
incorporated by reference.
PART II
-------
OTHER INFORMATION
-----------------
ITEM 1
------
Legal Proceedings
-----------------
The information regarding legal proceedings can be found in this current
filing of Form 10-Q under BT and Affiliates Notes to Consolidated Financial
Statements in Footnote 6, Litigation.
ITEM 2
------
Changes in Securities and Use of Proceeds
-----------------------------------------
Not applicable.
ITEM 3
------
Defaults Under Senior Securities
--------------------------------
Not applicable.
ITEM 4
------
Submission of Matters to a Vote of Security Holders
---------------------------------------------------
The Annual Meeting of BT was held on Tuesday, May 9, 2000, at the
Holiday Inn-Downtown Johnstown, 250 Market Street, Johnstown, Pennsylvania.
The following directors were elected:
Name Votes For Votes Withheld Term Expires
---- --------- -------------- ----------
James E. Croner 11,230,188 836,962 2004
Ethel J. Otrosina 11,282,908 784,242 2004
Harry F. Radcliffe 11,355,252 711,898 2004
James A. Ulmer 11,343,378 723,772 2004
Earl K. Wahl, Jr. 11,247,471 819,679 2004
21
ITEM 5
------
Other Information
-----------------
Not applicable.
ITEM 6
------
Exhibits and Reports on Form 8-K
---------------------------------
(a) Exhibits
---------
Exhibit No. Description Prior Filing or Sequential
----------- ----------- Page Number
-------------------------
27.1 Financial Data Schedule Filed herewith.
Reports on Form 8-K
-------------------
The Registrant did not file any Current Reports on Form
8-K during the second quarter of 2000.
22
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
(Registrant)
Date August 14, 2000 /s/ John H. Anderson
------------------ ----------------------------
John H. Anderson, Chairman
and Chief Executive Officer
Date August 14, 2000 /s/ Brian H. Lehman
------------------ -------------------------------
Brian H. Lehman,
Senior Vice President and Chief
Financial Officer
23
