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<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the quarterly period ended JUNE 30, 1996
OR
[_] Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934
For the transition period from _______ to ________
Commission File Number 0-11033
MERCHANTS BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 76-0045946
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4200 WESTHEIMER, SUITE 210,
HOUSTON, TEXAS 77027
(Address of principal executive offices) (zip code)
(713) 622-0042
(Registrant's telephone number, including area code)
GULF SOUTHWEST BANCORP, INC.
(Former name, former address and former fiscal year,
if changed since last report)
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
----
As of August 1, 1996, Registrant had outstanding 1,944,970 shares of its $1.00
par value per share common stock.
1
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following financial statements are provided in response to item 1:
2
<PAGE>
PRESENTATION OF FINANCIAL INFORMATION
The consolidated balance sheet as of June 30, 1996 and the consolidated
statements of income for the three and six months ended June 30, 1996 and 1995
and the consolidated statements of cash flows for the three and six months ended
June 30, 1996 and 1995, have been prepared by the Company without audit. In the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows as of June 30, 1996, and for all periods presented
have been made.
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. The results of operations for the period ended
June 30, 1996 are not necessarily indicative of the operating results of the
full year.
Effective May 1, 1995, the Company consummated its' acquisition of Texas Gulf
Coast Bancorp, Inc. Such acquisition has been accounted for as a purchase.
3
<PAGE>
MERCHANTS BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
--------- ------------
<S> <C> <C>
Cash and due from banks $ 25,866 $ 29,848
Interest bearing deposits with banks 503 23,529
Time deposits in banks 2,798 898
Federal funds sold 12,100 28,175
Investment securities:
Held-to-Maturity 21,072 21,382
Available-for-Sale 129,094 130,651
Loans, net of allowance for
loan losses 260,787 235,154
Bank premises and equipment
Accrued interest receivable 11,896 8,692
Other assets 3,914 3,930
4,785 4,390
-------- --------
Total Assets
$472,815 $486,649
======== ========
</TABLE>
4
<PAGE>
MERCHANTS BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (CONTINUED)
(Dollars in thousands)
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
-------- -----------
<S> <C> <C>
Deposits:
Non-interest bearing $122,599 $120,058
Interest bearing 297,980 311,323
-------- --------
420,579 431,381
Accrued interest, taxes and
other liabilities 2,061 2,576
Borrowings 0 3,083
Minority Interest 0 287
-------- --------
Total Liabilities 422,640 437,327
-------- --------
Stockholders' Equity:
Common stock 1,978 1,978
Paid-in capital 25,767 25,767
Retained earnings 23,381 21,167
Unrealized securities
gains (losses) (532) 859
-------- --------
50,594 49,771
-------- --------
Less cost of stock held in treasury:
Common Stock (419) (449)
-------- --------
Total Stockholders' Equity 50,175 49,322
-------- --------
Total Liabilities and
Stockholders' Equity $472,815 $486,649
======== ========
</TABLE>
5
<PAGE>
MERCHANTS BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
------------------
1996 1995
-------- -------
<S> <C> <C>
Interest Income:
Interest and fees on loans $6,018 $4,868
Investment securities:
Taxable 2,043 1,488
Non-taxable 230 195
Interest bearing deposits with banks 66 114
Time deposits with banks 23 19
Federal funds sold 292 497
------ ------
Total Interest Income 8,672 7,181
------ ------
Interest Expense:
Interest bearing deposits 2,686 2,279
Borrowed funds 0 78
------ ------
Total Interest Expense 2,686 2,357
------ ------
Net interest income 5,986 4,824
Provision for possible loan losses 82 40
------ ------
Net interest income after provision
for loan losses 5,904 4,784
------ ------
Non-Interest Income:
Service charges and fees 1,136 971
Other operating income 217 192
Securities gains (losses) 0 0
------ ------
Total Non-Interest Income 1,353 1,163
------ ------
</TABLE>
6
<PAGE>
MERCHANTS BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (CONTINUED)
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
---------------------------
1996 1995
---------- -----------
<S> <C> <C>
Non-Interest Expense:
Salaries and employee benefits 2,984 2,083
Furniture, equipment and
occupancy expense 845 752
Other operating expenses 1,323 1,231
--------- ---------
Total Non-Interest Expense 5,152 4,066
--------- ---------
Income before income taxes 2,105 1,881
Income taxes 640 546
--------- ---------
Net Income $ 1,465 $ 1,335
========= =========
Per Share:
Net Income $ .75 $ .77
========= =========
Dividends - Common Stock $ .20 $ .08
========= =========
Average Number of Shares Outstanding 1,944,303 1,722,773
========= =========
</TABLE>
7
<PAGE>
MERCHANTS BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
--------------------
1996 1995
------- --------
<S> <C> <C>
Interest Income:
Interest and fees on loans $11,657 $ 8,295
Investment securities:
Taxable 4,055 2,278
Non-taxable 461 270
Interest bearing deposits with banks 203 114
Time deposits with banks 51 43
Federal funds sold 797 815
------- -------
Total Interest Income 17,224 11,815
------- -------
Interest Expense:
Interest bearing deposits 5,506 3,555
Borrowed funds 9 78
------- -------
Total Interest Expense 5,515 3,633
------- -------
Net interest income 11,709 8,182
Provision for possible loan losses 162 40
------- -------
Net interest income after provision
for loan losses 11,547 8,142
------- -------
Non-Interest Income:
Service charges and fees 2,303 1,587
Other operating income 449 394
Securities gains (losses) 0 0
------- -------
Total Non-Interest Income 2,752 1,981
------- -------
</TABLE>
8
<PAGE>
MERCHANTS BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (CONTINUED)
(Dollars in thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
---------------------------
1996 1995
--------- ----------
<S> <C> <C>
Non-Interest Expense:
Salaries and employee benefits 5,782 3,316
Furniture, equipment and
occupancy expense 1,569 1,135
Other operating expenses 2,713 2,212
-------- ---------
Total Non-Interest Expense 10,064 6,663
--------- ---------
Income before income taxes 4,235 3,460
Income taxes 1,300 1,031
--------- ---------
Net Income $ 2,935 $ 2,429
========= =========
Per Share:
Net Income $ 1.51 $ 1.63
========= =========
Dividends - Common Stock $ .37 $ .16
========= =========
Average Number of Shares Outstanding 1,943,720 1,490,703
========= =========
</TABLE>
9
<PAGE>
MERCHANTS BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------
1996 1995
-------- --------
<S> <C> <C>
Increase (Decrease) in Cash and
Cash Equivalents:
Operating Activities:
Net Income $ 2,935 $ 2,429
Adjustments to Reconcile Net
Income to Net Cash Provided by
Operating Activities:
Provision for loan losses 163 40
Origination of mortgage loans for sale (6,148) (1,947)
Proceeds of mortgage loans sold 6,126 1,499
Depreciation and amortization,
net of accretions 847 516
Provision for losses on real
estate and other assets 124 22
Loss (gain) on sale of real estate
and other assets 2 (16)
(Increase) decrease in interest
receivable 16 145
(Decrease) increase in accrued
interest and other liabilities,
taxes and other (466) (356)
------- -------
Net Cash Flows From Operating Activities 3,599 2,332
------- -------
</TABLE>
10
<PAGE>
MERCHANTS BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------------
1996 1995
---------- ------------
<S> <C> <C>
Investing Activities:
Net (increase) decrease in time deposits
in banks (1,900) 650
Proceeds from the maturities of held-to-
maturity investment securities 1,660 9,359
Proceeds from the maturities of available-
for-sale investment securities 19,317 5,550
Purchase of held-to-maturity
investment securities (1,368) (8,315)
Purchase of available-for-sale
investment securities (20,213) (752)
Net decrease (increase) in loans (25,013) (5,529)
Rebates paid to customers (728) (380)
Recoveries of loans charged-off 102 54
Proceeds from sale of premises
and equipment 43 3
Capital expenditures (3,731) (347)
Proceeds from sale of real estate
and other loan related assets 200 145
Other (189) 0
------- ------
Net Cash From Investing Activities (31,820) 438
------- ------
</TABLE>
11
<PAGE>
MERCHANTS BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------------
1996 1995
---------- ---------
<S> <C> <C>
Financing Activities:
Net increase (decrease) in deposits (10,802) 5,449
Dividends paid (720) (258)
Sale of Treasury stock 30 0
Repayment of borrowings (3,083) (181)
Purchase minority interest (287) 0
-------- -------
Net Cash Flows from Financing Activities (14,862) 5,010
-------- -------
Net Increase (decrease) in Cash
and Cash Equivalents (43,083) 7,780
Cash and Cash Equivalents at
Beginning of Period 81,552 41,912
Net cash received in acquisition of banks 0 29,730
------- -------
Cash and Cash Equivalents at
End of Period $ 38,469 $79,422
======== =======
For the six months ended June 30:
Interest paid $ 5,667 $ 3,561
======== =======
Income taxes paid $ 1,200 $ 675
======== =======
</TABLE>
12
<PAGE>
MERCHANTS BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------
1996 1995
-------- ----------
<S> <C> <C>
Non-Cash Transactions:
Foreclosed properties transferred
to other real estate and loan
related assets $ 589 $ 314
====== =======
Bank loans for other real estate
and loan related assets sold $ 700 $ 147
====== =======
Issuance of 696,205 shares of
common stock for the issued
and outstanding common stock
of Texas Gulf Coast Bancorp, Inc. $ 0 $17,833
====== =======
</TABLE>
13
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
ANALYSIS OF STATEMENT OF INCOME
The following analysis discusses material changes in the results of operations
for the second quarter of 1996 compared to the second quarter of 1995 and the
first six months of 1996 as compared to the first six months of 1995. The
Company recorded earnings of $1,465,000 in the second quarter of 1996 and
$2,935,000 in the first six months of 1996 compared to $1,335,000 in the second
quarter of 1995 and $2,429,000 in the first six months of 1995.
NET INTEREST INCOME
Net interest income increased 24.1% in the second quarter of 1996 when compared
to the same period of 1995 and increased by 43.1% during the first six months of
1996 as compared to the first six months of 1995. Higher volumes of interest
earning assets and interest bearing liabilities attributable to the acquisition
of Texas Gulf Coast Bancorp, Inc. were the primary reasons for the increases.
The Company's subsidiary bank (the "Subsidiary Bank") attempts to adjust the
rates paid or earned on interest bearing liabilities and interest earning assets
to maintain a consistent net interest margin to the extent possible.
PROVISION FOR POSSIBLE LOAN LOSSES
The provision for possible loan losses increased by $42,000 for the second
quarter of 1996 compared to the second quarter of 1995 and increased by $122,000
for the first six months of 1996 as compared to same period in 1995. The
provision for possible loan losses for the first six months of 1996 was offset
by $71,000 in net losses charged to the allowance as compared with net losses of
$40,000 for the same period in 1995. The ratio of the allowance for possible
loan losses to outstanding loans was .95% on June 30, 1996, as compared to 1.22%
on June 30, 1995.
It is the policy of the Subsidiary Bank to maintain a level in the allowance for
possible loan losses that is adequate to cover the loan losses sustained plus
provide for any future possible losses on problem loans. The adequacy of the
allowance is continually monitored and management considers the current level to
be appropriate based on an evaluation of the Subsidiary Bank's loan portfolio.
The transactions in the allowance for possible loan losses were as follows:
14
<PAGE>
PROVISION FOR POSSIBLE LOAN LOSSES (CONTINUED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30,
------------------------------
1996 1995
------------- ------------
<S> <C> <C>
Loans outstanding at period end $263,290,000 $229,947,000
============ ============
Allowance at beginning of period $ 2,411,000 $ 2,063,000
------------ ------------
Allowance of acquired banks 0 738,000
------------ -----------
Provision charged to expense 162,000 40,000
------------ -----------
Loans charged off:
Commercial and industrial (24,000) (23,000)
Real estate (15,000) (0)
Installment (134,000) (71,000)
------------ ------------
Total (173,000) (94,000)
------------ ------------
Loans recovered:
Commercial and industrial 59,000 27,000
Real estate 8,000 13,000
Installment 35,000 14,000
------------ ------------
Total 102,000 54,000
------------ -----------
Net Loans recovered (charged off) (71,000) (40,000)
------------ -----------
Allowance at end of period $ 2,502,000 $ 2,801,000
============ ============
Ratios:
Allowance as a percent of
loans outstanding .95% 1.22%
============ ============
Allowance as a percent of
nonperforming loans 88.5% 118.2%
============ ============
</TABLE>
NON-PERFORMING ASSETS
All loans which cause management to have doubt as to the borrower's ability to
substantially comply with present loan repayment terms are included in the
schedule of non-performing loans.
Non-performing loans consist of loans on which interest is not being accrued and
loans which are 90 days or more past due as to principal and/or interest payment
and not yet in a non-accruing status. The policy of the Subsidiary Bank is to
continue to accrue interest on loans which are 90 days or more past due if
periodic payments are being made on the loans. If a loan is classified as past
due and payments then resume on the loan, it continues to be classified as past
due until all past due amounts are paid.
15
<PAGE>
NON-PERFORMING ASSETS (CONTINUED)
The following table discloses information regarding non-performing assets for
the indicated periods:
<TABLE>
<CAPTION>
JUNE 30,
--------------------------------------
1996 1995
---------- ----------
<S> <C> <C>
Non-accrual loans $2,061,000 $1,657,000
Past due 90 days or more 767,000 713,000
---------- ----------
Total 2,828,000 2,370,000
Other real estate owned 1,428,000 2,256,000
---------- ----------
Total non-performing assets $4,256,000 $4,626,000
========== ==========
NON-INTEREST INCOME
The components included in non-interest income for the indicated periods
are as follows:
FOR THE QUARTER
ENDED JUNE 30,
--------------------------------------
1996 1995
---------- ----------
Service charges and fees $1,136,000 $ 971,000
Other operating income 217,000 192,000
Securities transactions 0 0
---------- ----------
Total non-interest income $1,353,000 $1,163,000
========== ==========
FOR THE SIX MONTHS
ENDED JUNE 30,
--------------------------------------
1996 1995
---------- ----------
Service charges and fees $2,303,000 $1,587,000
Other operating income 449,000 394,000
Securities transactions 0 0
---------- ----------
Total non-interest income $2,752,000 $1,981,000
========== ==========
</TABLE>
Total non-interest income increased by 16.3% for the second quarter of 1996 as
compared to the second quarter of 1995 and increased 38.9% for the first six
months of 1996 compared to 1995. The increases are primarily due to the
acquisition of Texas Gulf Coast Bancorp, Inc.
The Company maintains a policy of constantly monitoring and evaluating service
charges and fees to ensure that the fees charged reflect the cost of service
provided and remain competitive with other financial institutions located in the
Subsidiary Bank's market area.
16
<PAGE>
NON-INTEREST EXPENSE
Non-interest expenses increased by 26.7% for the second quarter of 1996 over the
second quarter of 1995 and increased 51.0% for the first six months of 1996
compared to the first six months of 1995. The totals were as follows:
<TABLE>
<CAPTION>
FOR THE QUARTER
ENDED JUNE 30,
-------------------------------
1996 1995
----------- -----------
<S> <C> <C>
Salaries and employee benefits $ 2,984,000 $2,083,000
Furniture, equipment and occupancy
expense 845,000 752,000
Other operating expenses 1,323,000 1,231,000
----------- ----------
Total non-interest expenses $ 5,152,000 $4,066,000
=========== ==========
FOR THE SIX MONTHS
ENDED JUNE 30,
-------------------------------
1996 1995
----------- -----------
Salaries and employee benefits $ 5,782,000 $3,316,000
Furniture, equipment and occupancy
expense 1,569,000 1,135,000
Other operating expenses 2,713,000 2,212,000
----------- ----------
Total non-interest expenses $10,064,000 $6,663,000
=========== ==========
</TABLE>
Salaries and employee benefits are the most significant operating expenses of
the Company. Of the 43.3% and 74.4% increases for the second quarter and the
first six months of 1996, respectively, over the comparable periods of 1995, the
acquisition of Texas Gulf Coast Bancorp, Inc. accounted for the majority of such
increases.
Furniture, equipment and occupancy expenses increased by 12.4% for the second
quarter of 1996 over the same quarter of 1995 and increased by 38.2% for the
first six months of 1996 as compared to the first six months of 1995. Other
operating expenses increased by 7.5% and 22.6% for the second quarter and the
first six months of 1996 over the comparable periods of 1995, respectively.
The major components of other operating expenses are legal and accounting fees,
data processing, supplies and advertising expenses. Also included are expenses
related to real estate held for sale and other loan-related assets acquired
through foreclosure.
17
<PAGE>
ANALYSIS OF BALANCE SHEET
EARNING ASSETS
When comparing the total of earning assets at June 30, 1996, to the total at
December 31, 1995, earning assets decreased 3.1%. The decrease of $13,435,000
was due to the decreases of $23,026,000 in interest bearing deposits in banks,
$16,075,000 in federal funds sold, and $1,867,000 in investment securities.
These decreases were partially offset by increases of $25,633,000 and $1,900,000
in loans and time deposits in banks, respectively.
Included in the total of earning assets at June 30, 1996 are loans totaling
$2,061,000 which are on a non-accrual status. This compares to non-accrual
loans totaling $1,657,000 and $3,125,000 at June 30, 1995 and December 31, 1995,
respectively.
DEPOSITS
The most important funding source for earning asset growth is deposits. Total
deposits decreased by 2.5% from December 31, 1995 to June 30, 1996, compared to
an increase of 82.5% from December 31, 1994 to June 30, 1995. The large
increase in 1995 was attributable to the acquisition of Texas Gulf Coast
Bancorp, Inc. The June 30, 1996 decrease was attributable to a 4.3% decrease in
interest bearing deposits partially offset by a 2.1% increase in non-interest
bearing deposits.
CAPITAL
Shareholders' equity increased $853,000, or 1.7%, for the six months ended June
30, 1996, as compared to an increase of $20,110,000 for the comparable period in
1995. The 1995 increase is primarily attributable to the acquisition of Texas
Gulf Coast Bancorp, Inc. The ratio of shareholders' equity to total assets was
10.6% on June 30, 1996, as compared to 10.1% on December 31, 1995 and 9.8% on
June 30, 1995.
Bank holding companies and their bank subsidiaries are required to maintain
certain capital ratios. The Federal Reserve Board's guidelines classify capital
into two tiers, referred to as Tier 1 and Tier 2. Tier 1 capital consists of
common and qualifying preferred shareholders' equity less goodwill. Tier 2
capital consists of mandatory convertible debt, preferred stock not qualifying
as Tier 1, qualifying subordinated debt and the allowance for loan losses up to
1.25% of risk-weighted assets. The minimum ratio for the sum of Tier 1 and Tier
2 to risk weighted assets is 8.0%, at least one-half of which should be in the
form of Tier 1 capital. At June 30, 1996, core capital (Tier 1) and total
capital (Tier 1 and Tier 2) as a percentage of risk-weighted assets was 17.77%
and 18.67%, respectively. The Subsidiary Bank at June 30, 1996 had core capital
of 16.31% and total capital of 17.22% as a percentage of risk weighted assets.
In addition to the foregoing ratios, bank holding companies are required to
maintain a minimum ratio of core capital to total assets (hereinafter referred
to as the "Leverage Ratio") of at least 3.0%. At June 30, 1996, the Company's
Leverage Ratio was 10.34%. A similar leverage ratio applicable to the
Subsidiary Bank has been adopted by the FDIC. At June 30, 1996, the Subsidiary
Bank's ratio was 9.54%.
18
<PAGE>
LIQUIDITY AND CAPITAL COMMITMENTS
Liquidity is the ability of the Company and its Subsidiary Bank to meet their
short-term needs for cash arising from demands such as operating expenses,
withdrawal of deposits and demand for loans. The liquidity of the Company is
primarily provided by dividends from the Subsidiary Bank and interest on time
deposits in financial institutions.
The Subsidiary Bank's liquidity is primarily provided by maturing loans,
deposits, cash, short-term investments, time deposits in other banks, federal
funds sold and profits. With bank regulators critically reviewing liquidity,
the Company has adopted a policy of maintaining a minimum liquidity level of 20%
as measured by the FDIC formula, at the Subsidiary Bank. As of June 30, 1996,
the liquidity level of the Subsidiary Bank was 40.03%.
The Company believes that both it and the Subsidiary Bank have sufficient
capital and financial resources to meet its current and anticipated capital
commitments.
19
<PAGE>
PART 2 - OTHER INFORMATION
Item 1. Legal proceedings.
Not applicable
Item 2. Changes in securities.
Not applicable
Item 3. Defaults upon senior securities.
Not applicable
Item 4. Submission of matters to a vote of security holders.
Not applicable
Item 5. Other information.
Not applicable
Item 6. Exhibits and reports on Form 8-K.
A Form 8-K was filed on July 19, 1996 reporting the name change
of the Company to Merchants Bancshares, Inc. which became
effective on June 13, 1996.
20
<PAGE>
EXHIBIT INDEX
Exhibit number and description
(2) Plan of acquisition, reorganization, arrangement, liquidation or
succession. *)
(4) Instruments defining the rights of security holders, including
indentures. *)
(10) Material contracts. *)
(11) Statement re computation of per share earnings. *)
(15) Letter re unaudited interim financial information. *)
(18) Letter re change in accounting principles. *)
(19) Report furnished to security holders. *)
(22) Published report regarding matters submitted to vote of security
holder. *)
(23) Consent of experts and counsel. *)
(24) Power of attorney. *)
(27) Financial data schedule.
* Exhibit 27.1. Financial Data Schedule
(99) Additional exhibits. *)
*) Not applicable.
21
<PAGE>
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.
MERCHANTS BANCSHARES, INC.
/s/ J.W. Lander, Jr.
Date: August 13, 1996 BY: ___________________________
J. W. Lander, Jr., Chairman
/s/ J.W. Lander, III
Date: August 13, 1996 BY: ____________________________
J. W. Lander, III, President
(principal financial and chief accounting
officer)
22
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 25,866,000
<INT-BEARING-DEPOSITS> 3,301,000
<FED-FUNDS-SOLD> 12,100,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 129,094,000
<INVESTMENTS-CARRYING> 150,166,000
<INVESTMENTS-MARKET> 150,286,000
<LOANS> 263,289,000
<ALLOWANCE> 2,502,000
<TOTAL-ASSETS> 472,815,000
<DEPOSITS> 420,579,000
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,061,000
<LONG-TERM> 0
0
0
<COMMON> 1,978,000
<OTHER-SE> 48,197,000
<TOTAL-LIABILITIES-AND-EQUITY> 472,815,000
<INTEREST-LOAN> 11,657,000
<INTEREST-INVEST> 4,561,000
<INTEREST-OTHER> 1,051,000
<INTEREST-TOTAL> 17,224,000
<INTEREST-DEPOSIT> 5,506,000
<INTEREST-EXPENSE> 9,000
<INTEREST-INCOME-NET> 11,709,000
<LOAN-LOSSES> 162,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 10,064,000
<INCOME-PRETAX> 4,235,000
<INCOME-PRE-EXTRAORDINARY> 4,235,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,935,000
<EPS-PRIMARY> 1.51
<EPS-DILUTED> 1.51
<YIELD-ACTUAL> 5.40
<LOANS-NON> 2,061,000
<LOANS-PAST> 767,000
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,411,000
<CHARGE-OFFS> 173,000
<RECOVERIES> 102,000
<ALLOWANCE-CLOSE> 2,502,000
<ALLOWANCE-DOMESTIC> 2,502,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
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