28
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1996 Commission file number 0-16878
CBT CORPORATION
(Exact name of registrant as specified in its charter)
Kentucky 61-1030727
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
333 Broadway, Paducah, Kentucky 42001
(Address of principal executive offices)
Registrant's telephone number, including area code (502) 575-5100
Indicate by check mark whether the registrant (a) 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.
Class Outstanding at September 30, 1996
Common Stock, No Par Value 7,856,210
Page 1
This filing contains 27 pages.
CBT CORPORATION
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements
Consolidated Balance Sheets at September 30, 1996,
December 31, 1995 and September 30, 1995 3
Consolidated Statements of Income for Three
Months and Nine Months Ended September 30, 1996 and
September 30, 1995 4
Consolidated Statements of Changes in Shareholders'
Equity for Nine Months Ended September 30, 1996 and
September 30, 1995 5
Consolidated Statements of Cash Flows for Nine
Months Ended September 30, 1996 and September
30, 1995 6
Notes to Consolidated Financial Statements 7 - 12
Item 2. Management's Discussion and Analysis of
Consolidated Financial Condition and Results
of Operations 13 - 23
PART II. OTHER INFORMATION
Item 1. through Item 6. 24
SIGNATURE PAGE 25
EXHIBIT INDEX 26
FINANCIAL DATA SCHEDULE 27
CBT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited) (audited) (unaudited)
($ in thousands) September 30 December 31 September 30
1996 1995 1995
ASSETS
Cash and due from banks $34,888 $33,662 $31,595
Federal funds sold 0 1,000 -
Total cash and cash equivalents 34,888 34,662 31,595
Securities to be held to maturity 54,654 46,427 46,250
Securities available for sale
(at fair market value) 155,419 158,474 153,786
Loans, net of unearned interest 674,296 644,661 641,670
Allowance for loan losses (8,734) (11,004) (11,299)
Loans, net 665,562 633,657 630,371
Premises and equipment, net 18,383 18,872 18,248
Accrued interest receivable 6,417 6,752 6,286
Other 7,367 5,897 6,170
TOTAL ASSETS $942,690 $904,741 $892,706
LIABILITIES
Deposits:
Non-interest bearing $70,190 $69,628 $69,631
Interest bearing 602,907 604,106 600,242
Total deposits 673,097 673,734 669,873
Borrowings:
Federal funds purchased and
securities sold under agreements
to repurchase 59,538 39,037 39,210
Notes payable - U.S. Treasury 2,010 459 1,952
Revolving lines of credit 5,000 4,000 2,500
Federal Home Loan Bank advances 73,169 61,893 55,899
Term debt 10,046 10,069 10,069
Total borrowings 149,763 115,458 109,630
Accrued interest payable 6,019 4,341 5,131
Other 6,819 6,837 6,644
TOTAL LIABILITIES 835,698 800,370 791,278
SHAREHOLDERS' EQUITY
Common stock, no par value, authorized
12,000,000 shares; issued and outstanding
7,856,210 shares at September 30, 1996;
7,907,435 shares at December 31, 1995; and
7,904,935 shares at September 30,1995 4,100 4,100 4,100
Capital surplus 18,252 19,003 18,985
Retained earnings 86,132 80,961 78,488
Unrealized gains (losses) on securities
available for sale, net of deferred taxes (1,492) 307 (145)
TOTAL SHAREHOLDERS' EQUITY 106,992 104,371 101,428
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $942,690 $904,741 $892,706
CBT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) September 30 September 30
($ in thousands except per share data) 1996 1995 1996 1995
INTEREST INCOME
Loans, including fees:
Taxable $16,064 $15,965 $47,292 $45,788
Tax-exempt 34 34 111 128
Securities:
Taxable 2,498 2,388 7,543 7,290
Tax-exempt 953 852 2,762 2,635
Other 4 24 30 101
Total interest income 19,553 19,263 57,738 55,942
INTEREST EXPENSE
Deposits 7,461 7,580 21,673 21,839
Borrowings 1,804 1,466 5,127 4,277
Total interest expense 9,265 9,046 26,800 26,116
NET INTEREST INCOME 10,288 10,217 30,938 29,826
PROVISION FOR LOAN LOSSES 810 338 1,765 828
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 9,478 9,879 29,173 28,998
NON-INTEREST INCOME
Trust and investment advisory fees 563 378 1,562 1,086
Service charges on deposit accounts 862 913 2,492 2,670
Insurance commissions 334 331 975 955
Net gain (loss) on sale of securities 0 81 34 214
Other 502 299 1,289 1,005
Total non-interest income 2,261 2,002 6,352 5,930
NON-INTEREST EXPENSE
Salaries and employee benefits 3,948 3,763 11,826 12,023
Net occupancy 339 325 1,020 863
Depreciation and amortization 548 464 1,656 1,352
Supplies 194 210 650 606
Data processing 390 379 1,176 1,053
FDIC assessments 617 376 731 1,127
Tax on bank shares 303 247 909 838
Other 2,038 2,027 5,573 5,067
Total non-interest expense 8,377 7,791 23,541 22,929
INCOME BEFORE INCOME TAXES 3,362 4,090 11,984 11,999
INCOME TAXES 908 1,183 3,400 3,398
NET INCOME $2,454 $2,907 $8,584 $8,601
NET INCOME PER COMMON SHARE $0.31 $0.37 $1.09 $1.08
CBT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(unaudited)
($ in thousands)
Total
Shareholders'
Equity
Balance, December 31, 1995 $104,371
Net income 8,584
Dividends on common stock (2,914)
Stock options exercised 79
Purchase of common stock (1,329)
Net change in unrealized gains (losses) on
securities available for sale (1,799)
Balance, September 30, 1996 $106,992
Balance, December 31, 1994 $91,337
Net income 8,601
Dividends on common stock (2,692)
Stock options exercised 432
Purchase of common stock (1,491)
Net change in unrealized gains (losses) on
securities available for sale 5,241
Balance, September 30, 1995 $101,428
CBT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited) Nine Months Ended
($ in thousands) September 30
1996 1995
OPERATING ACTIVITIES
Net income $8,584 $8,601
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 1,765 828
Depreciation 1,491 1,183
Amortization 165 169
Amortization and accretion of securities 32 9
Loss (gain) on sale of fixed assets 13 17
Loss (gain) on sale of securities (34) (214)
Changes in assets and liabilities:
Accrued interest receivable 335 (218)
Other assets (586) (555)
Accrued interest payable 1,678 1,250
Other liabilities (18) 1,540
Net cash provided by operating activities 13,425 12,610
INVESTING ACTIVITIES
Proceeds from maturities of securities to be held
to maturity 1,234 2,953
Proceeds from sales of securities available for
sale - 32,182
Proceeds from maturities of securities available
for sale 13,481 6,382
Principal collected on mortgage-backed securities,
including those classified as available for sale 7,554 5,588
Payment for purchases of securities (30,208) (29,220)
Net increase in loans (33,670) (26,723)
Proceeds from sale of premises and equipment 30 -
Payment for purchase of premises and equipment (1,196) (3,538)
Net cash (used in) provided by investing
activities (42,775) (12,376)
FINANCING ACTIVITIES
Net decrease in deposits (637) 296
Net increase (decrease) in short-term borrowings 22,052 (12,555)
Net increase in FHLB advances 11,276 20,467
Net cash advanced on revolving lines of credit 1,000 (3,500)
Principal payments on term debt (23) -
Cash dividends paid (2,842) (2,692)
Stock options exercised 79 432
Purchase of common stock (1,329) (1,491)
Net cash provided by (used in) financing
activities 29,576 957
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 226 1,191
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 34,662 30,404
CASH AND CASH EQUIVALENTS, END OF PERIOD 34,888 $31,595
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest 10,943 $24,866
Federal income taxes 3,757 $3,013
CBT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
September 30, 1996
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation and Presentation Basis
The accompanying unaudited consolidated financial statements of CBT
Corporation have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-1 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. The financial statements include the accounts of CBT Corporation
(the Parent Company) and its wholly-owned subsidiaries: Citizens Bank &
Trust Company (Citizens), Pennyrile Citizens Bank & Trust Company, Bank of
Marshall County, Graves County Bank and United Commonwealth Bank FSB.
Collectively these entities constitute the "Corporation", which provides
financial services primarily in western Kentucky and surrounding
communities. Fidelity Credit Corporation is a wholly-owned subsidiary of
Citizens. All significant inter-company accounts and transactions have
been eliminated in consolidation.
Operating results for the three month period and nine month period ended
September 30, 1996, are not necessarily indicative of the results that may
be expected for the year ended December 31, 1996. For further information,
refer to the consolidated financial statements and footnotes thereto
included in the Corporation's annual report on Form 10-K for the year ended
December 31, 1995.
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include
cash and due from banks and federal funds sold.
Allowance for Loan Losses
The allowance for loan losses is maintained at a level considered adequate
to provide for potential losses based on management's evaluation of the
loan portfolio, including the financial strength of guarantors, valuation
of collateral, and the likelihood of further collection based upon the
borrower's financial condition, as well as on prevailing and anticipated
economic conditions.
Although management believes it uses the best information available to make
determinations with respect to the Corporation's allowances, future
adjustments may be necessary if economic or other conditions differ
substantially from the economic and other conditions in the assumptions
used in making the initial determinations, and such adjustments could be
material.
Effective January 1, 1995, the Corporation adopted SFAS No. 114, "Accounting
by Creditors for Impairment of a Loan" as amended by SFAS No. 118
"Accounting by Creditors for Impairment of a Loan-Income Recognition and
Disclosures." These pronouncements require that impaired loans be measured
based upon the present value of expected future cash flows, discounted at
the loans' effective interest rate or at the loans' market price or fair
value of collateral, if the loan is collateral dependent. When the measure
of the impaired loan is less than that recorded investment in the loan, the
impairment is recorded through a valuation allowance that is included in
the allowance for loan losses. The adoption of these pronouncements did
not have a material impact on the Corporation's consolidated financial
statements.
The Corporation's impaired loans are generally measured on a loan by loan
basis. Interest payments received on impaired loans are recorded as
interest income unless collection of the loan is doubtful, in which case
payments are recorded as a reduction of principal.
Premises and Equipment
Premises and equipment are stated at cost, less accumulated depreciation.
Depreciation of premises and equipment is computed using the straight-line
and accelerated methods over the estimated useful lives of the assets, as
follows:
Years
Buildings and improvements 15 - 35
Furniture and fixtures 7
Equipment 5
Repurchase Agreements
Certain securities are sold under agreements to repurchase and are treated
as financings. The obligation to repurchase such securities is reflected
as a liability on the consolidated balance sheets. The dollar amounts of
securities underlying the agreements are included in the respective asset
accounts.
Trust Fees and Assets
Revenues from trust services are reported on the cash basis in accordance
with customary banking practice. Reporting such revenues on the accrual
basis would not materially affect the accompanying consolidated financial
statements. Assets held in a fiduciary or agency capacity for customers
and beneficiaries are not included in the consolidated financial statements
as such items are not assets of the Corporation.
Securities to be Held to Maturity and Securities Available for Sale
Effective January 1, 1994, the Corporation changed its method of accounting
for securities to conform with Statement of Financial Accounting Standards
(SFAS) No. 115 "Accounting for Certain Investments in Debt and Equity
Securities." Securities to be held to maturity are reported at cost,
adjusted for premiums and discounts and consist of securities for which the
Corporation has the positive intent and ability to hold to maturity.
Available for sale securities are reported at fair value and consist of
securities not classified as securities to be held to maturity. Unrealized
holding gains and losses, net of deferred taxes, on available for sale
securities are reported as a net amount in a separate component of
shareholders' equity until realized.
Federal Home Loan Bank stock is not considered to be a marketable equity
security under SFAS No. 115 and, therefore, is carried at cost. The stock
is included in securities available for sale.
Amortization of premiums and accretion of discounts are recorded primarily
on the interest method. Gains and losses on disposition of investment
securities and securities available for sale are computed by the specific
identification method.
Loans and Interest Income
Loans are stated at the principal balance outstanding, net of unearned
interest. Interest on loans is based upon the principal balance
outstanding, except interest on some consumer installment loans, which is
recognized on the sum-of-the-years-digits method, and does not differ
materially from the interest method.
The accrual of interest income is generally reviewed for discontinuance
when a loan becomes 90 days past due as to principal or interest. When
interest is discontinued, all unpaid accrued interest is reversed.
Management may elect to continue the accrual of interest when the estimated
net realizable value of collateral is sufficient to cover the principal
balance and accrued interest or, in the opinion of management, the interest
is collectible.
Income Taxes
The provision for income taxes in the interim periods has been calculated
using the anticipated effective tax rate for the respective calendar year,
taking into consideration certain tax exempt loan and investment income and
non-deductible expenses.
Per Common Share Data
Net income per common share data for the three months ended September 30,
1996 and 1995 is based upon 7,860,051 average shares outstanding and
7,904,935 average shares outstanding, respectively. Net income per common
share data for the nine months ended September 30, 1996 and 1995 is based
upon 7,880,635 average shares outstanding and 7,935,760 average shares
outstanding, respectively.
Reclassifications
Certain reclassifications have been made in the 1995 financial statements
to conform to the presentation of the 1996 financial statements.
Uses of Estimates in the Preparation of Financial Statements
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
NOTE 2: SECURITIES TO BE HELD TO MATURITY
($ in thousands) September 30, 1996
ESTIMATED
AMORTIZED FAIR GROSS UNREALIZED
COST VALUE GAIN LOSS
U.S. Treasury securities and
obligations of other U.S. Government
agencies $2,019 $2,019 $8 $8
State and political subdivisions 52,635 53,950 2,067 752
Total securities $54,654 $55,969 $2,075 $760
December 31, 1995
ESTIMATED
AMORTIZED FAIR GROSS UNREALIZED
COST VALUE GAIN LOSS
U.S. Treasury securities and
obligations of other
U.S. Government agencies $2,333 $2,352 $27 $8
State and political subdivisions 43,894 46,068 2,435 261
Other 200 199 - 1
Total securities $46,427 $48,619 $2,462 $270
Certain securities to be held to maturity were pledged to secure public
deposits, securities sold under agreements to repurchase, and other
purposes as required or permitted by law. These pledged securities had an
estimated amortized cost and estimated fair value of approximately
$19,183,982 and $19,494,532 respectively, at September 30, 1996.
NOTE 3: SECURITIES AVAILABLE FOR SALE
($ in thousands) September 30, 1996
ESTIMATED
AMORTIZED FAIR GROSS UNREALIZED
COST VALUE GAIN LOSS
U.S. Treasury securities
and obligations of other
U.S. Government agencies $53,813 $52,800 $100 $1,113
State and political 9,589 10,030 494 53
subdivisions
Mortgage-backed securities 80,751 79,152 349 1,949
Derivative securities 4,801 4,676 0 124
Federal Home Loan Bank Stock 8,659 8,659 - -
(at cost)
Other 102 102 - -
Total securities $157,715 $155,419 $943 $3,239
December 31, 1995
ESTIMATED
AMORTIZED FAIR GROSS UNREALIZED
COST VALUE GAIN LOSS
U.S. Treasury securities and
obligations of other
U.S. Government agencies $44,821 $45,236 $479 $64
State and political 9,587 10,186 646 47
subdivisions
Mortgage-backed securities 83,952 83,557 576 971
Derivative securities 11,747 11,600 10 157
Federal Home Loan Bank Stock 7,873 7,873 - -
(at cost)
Other 22 22 - -
Total securities $158,002 $158,474 $1,711 $1,239
Certain securities available for sale were pledged to secure public
deposits, securities sold under agreements to repurchase, and other
purposes as required or permitted by law. These pledged securities had an
amortized cost and estimated fair value of approximately $106,181,555 and
$105,269,691 respectively, at September 30, 1996.
NOTE 4: LOANS
($ in thousands) September 30 December 31 September 30
1996 1995 1995
Commercial, industrial,
and agricultural loans $202,732 $212,266 $201,291
Residential real estate loans 273,609 253,556 258,590
Installment loans 206,970 189,036 191,864
Total loans 683,311 654,858 651,745
Less: Unearned interest 9,015 10,197 10,075
Total loans, net of unearned interest $674,296 $644,661 $641,670
NOTE 5: PREMISES AND EQUIPMENT
($ in thousands) September 30 December 31 September 30
1996 1995 1995
Land $1,971 $1,971 $1,996
Buildings and improvements 14,000 17,715 16,569
Furniture and equipment 17,626 13,537 12,074
Construction in progress 303 20 1,692
Total premises and equipmen 33,900 33,243 32,331
Less: Accumulated depreciation
and amortization 15,517 14,371 14,083
Net premises and equipment $18,383 $18,872 $18,248
NOTE 6: INTEREST BEARING DEPOSITS
($ in thousands) September 30 December 31 September 30
1996 1995 1995
NOW accounts $91,966 $101,448 $93,908
Money Manager acunts 36,646 45,581 44,804
Individual retirement accounts 47,598 50,601 49,635
Savings accounts 53,699 44,845 45,982
Certificates of deposit under $100,000 289,815 292,489 292,241
Certificates of deposit $100,000 and
above 83,183 69,142 73,672
Total interest bearing deposits $602,907 $604,106 $600,242
PART I - FINANCIAL INFORMATION
ITEM 2. Management's Discussion and Analysis of Consolidated Financial
Condition and Results of Operations
CBT Corporation ("CBT") is a multi-bank holding company consisting of four
state chartered commercial banks, one federal savings bank, and a consumer
finance company. The banks' 18 locations provide financial services
primarily in western Kentucky, while the finance company has 27 locations
throughout the state. The following discussion and analysis is presented
on a consolidated basis, with all significant intercompany accounts and
transactions eliminated.
For the third quarter, CBT Corporation earned $2,454,000 and $2,907,000 in
1996 and 1995, respectively. Net income per share was $0.31 for the three
month period ended September 30, 1996 compared with $0.37 for the
comparable period in 1995.
For the first nine months of 1996, CBT reported net income of $8,584,000,
virtually unchanged from the first nine months of 1995, which was
$8,601,000. Net income per share was $1.09 for the nine months ended
September 30, 1996 compared with $1.08 for the nine months ended September
30, 1995.
Return on average equity was 8.96 percent and 11.27 percent for the third
quarter of 1996 and 1995, respectively. Return on average assets for the
three month period ended September 30, 1996 was 1.05 percent, compared with
1.30 percent for the similar 1995 period.
Return on average equity was 10.70 percent for the first nine months of
1996 compared with 11.48 percent for the first nine months of 1995. Return
on average assets was 1.25 percent for the first nine months of 1996,
compared with 1.31 percent for the first nine months of 1995.
Consolidated Income Statement Analysis
Net Interest Income
Net interest income is the difference between interest earned on assets and
interest incurred on liabilities. It is affected by changes in the mix and
volume of earning assets and interest-bearing liabilities, their related
yields, and overall interest rates. For discussion purposes herein, net
interest income is presented on a tax-equivalent basis with adjustments
made to present yields on tax-exempt assets as if such income was fully
taxable.
In the third quarter of 1996, tax-equivalent net interest income provided
82.4 percent of CBT's net revenue, compared with 84.0 percent in the third
quarter of 1995. The change was a result of higher fee income in 1996
rather than a reduction in net interest income. Total tax-equivalent net
interest income for the third quarter of 1996 increased 0.9 percent from
the third quarter a year ago. Growth in tax-equivalent net interest income
for the third quarter of 1996 over 1995 was due to growth in earning assets
of 4.5 percent partially offset by a 16 basis point decline in net interest
margin.
Through September 30, tax-equivalent net interest income provided 83.4
percent of net revenue for 1996, compared to 83.9 percent for 1995. Total
tax-equivalent net interest income increased 3.6 percent comparing the
first nine months of 1996 and 1995, solely as the result of a 3.6 percent
increase in earning assets. Net interest margin was 4.95 percent for both
periods.
Net interest margin, the ratio of tax-equivalent net interest income
divided by average earning assets, was 4.83 percent and 4.99 percent for
the three months ended September 30, 1996 and September 30, 1995,
respectively. Through September 30, the year-to-date net interest margin
for 1996 and 1995 was the same: 4.95 percent. The following schedule
presents yields and costs on key components of interest income and interest
expense for the third quarter and year-to-date for 1996 and 1995.
Three Months Ended Nine Months Ended
September 30 September 30
1996 1995 1996 1995
Yield on securities 7.03% 7.07% 6.99% 6.56%
Yield on loans (including fees) 9.71% 9.99% 9.81% 9.80%
Yield on federal funds sold and other
money market investments 5.36% 6.33% 4.90% 6.03%
Yield on earning assets 9.04% 9.29% 9.10% 8.99%
Rate on interest-bearing deposit 4.88% 5.02% 4.81% 4.90%
Rate on borrowings 5.34% 5.52% 5.29% 5.49%
Rate on interest bearing
liabilities 4.96% 5.09% 4.90% 4.98%
Net interest spread 4.08% 4.20% 4.20% 4.01%
Net interest margin (including fees) 4.83% 4.99% 4.95% 4.95%
Provision for Loan Losses
The provision for loan losses reflects management's judgment of the current
period cost associated with maintaining adequate reserves for the credit
risk inherent in CBT's loan portfolio. The consolidated provision for loan
losses was $810,000 for the third quarter of 1996, a 139.6 percent increase
from the $338,000 provision recorded in the third quarter of 1995. The
third quarter provision for loan losses was 0.48 percent of average loans
on an annualized basis, compared with 0.21 percent in the prior year.
Provision expense was substantially increased in the third quarter of 1996
in light of a significant increase in loan charge-offs, principally related
to one commercial account.
The consolidated provision for loan losses was $1,765,000 for the nine
months ended September 30, 1996, a 113.2 percent increase from the $828,000
for the same period in 1995. Year-to-date provision as a percent of
average loans was 0.36 percent and 0.18 percent for 1996 and 1995,
respectively.
Net loan losses were $1,972,000 for the third quarter of 1996 compared to
$463,000 for the third quarter of 1995. Approximately $1.5 million was
charged-off in the third quarter of 1996 related to the commercial account
referenced above. Net loan losses as a percent of average loans on an
annualized basis were 1.18 percent for the three months ended September
30, 1996, compared to 0.29 percent for the three months ended September 30,
1995. Net loan losses were $4,035,000 and $1,068,000 for the nine months
ended September 30, 1996 and 1995, respectively. Net loan losses as a
percent of average loans on an annualized basis were 0.83 and 0.23 percent
for the nine month period ended September 30, 1996 and 1995, respectively.
The increase in year-to-date net loan losses in 1996 over 1995 is primarily
attributable to $2.8 million charged off on the aforementioned commercial
account.
The following is a progression of the allowance for loan losses:
Three Months Ended Nine Months Ended
($ in thousands) September 30 September 30
1996 1995 1996 1995
Balance, beginning of period $9,896 $11,424 $11,004 $11,533
Adjustment for finance receivables - - - 6
Provision for loan losses 810 338 1,765 828
Loans charged off (2,114) (513) (4,354) (1,359)
Recoveries 142 50 319 291
Net charge-offs (1,972) (463) (4,035) (1,068)
Balance, end of period $8,734 $11,299 $8,734 $11,299
Allowance for loan losses to total loans,
net of unearned interest 1.30% 1.76% 1.30% 1.76%
Net charge-offs to average loans 1.18% 0.29% 0.83% 0.23%
Non-performing assets to period-end
loans and other real estate 1.39% 0.70% 1.39% 0.70%
Non-Interest Income
Non-interest income represents 17.6 percent of CBT's tax-equivalent revenue
in the third quarter of 1996, compared with 16.0 percent in the third
quarter of 1995. Consolidated non-interest income increased 12.9 percent
or $259,000 in the third quarter of 1996 to $2,261,000, compared to the
comparable 1995 period. Trust and investment advisory fees increased 48.9
percent over the third quarter of 1995 from $378,000 to $563,000. This
increase was primarily the result of higher volumes generated through CBT's
strategic alliance with J.C. Bradford & Co. ("JCB"), a Nashville-based
regional brokerage firm. All other non-interest income increased 4.6
percent over the third quarter of 1995, with improvements in insurance
commissions and other fees offsetting a decline in service charges on
deposit accounts and securities gains. Exclusive of securities gains, all
other non-interest income grew 10.0 in the third quarter of 1996 compared
to the prior year.
Non-interest income represents 16.6 percent of CBT's tax-equivalent revenue
for the first nine months of 1996, compared to 16.1 percent for the
comparable 1995 period. Consolidated non-interest income increased 7.1
percent or $422,000 to $6,352,000 for the nine months ended September 30,
1996 compared to September 30, 1995. As noted above, the trust and
investment advisory fees increased significantly (43.8 percent), offset
partially by the decrease in gains on sales of securities. In addition,
service charges on deposit accounts decreased 6.7 percent due to a lower
collection rate in 1996. Insurance commissions and other fee income
increased 15.5 percent comparing the first nine months of 1996 with the
similar period in 1995.
The following table shows a breakdown of non-interest income:
Three Months Ended Nine Months Ended
($ in thousands) September 30 September 30
1996 1995 1996 1995
Trust and investment advisory fees $563 $378 $1,562 $1,086
Service charges on deposit accounts 862 913 2,492 2,670
Insurance commissions 334 331 975 955
Gain (loss) on sale of securities 0 81 34 214
Other 502 299 1,289 1,005
Total non-interest income $2,261 $2,002 $6,352 $5,930
Non-Interest Expenses
Total non-interest expense grew $586,000, or 7.5 percent, for the third
quarter of 1996 compared to the third quarter of 1995. FDIC assessment
increases accounted for $241,000 (41.1 percent) of the increase, as a
government-mandated recapitalization of the Savings Association Insurance
Fund resulted in a one-time charge of $560,000. Salaries and benefits
increased $185,000 (4.9 percent) as a result of merit increases and the
filling of open positions, while the tax on bank shares was up $56,000
(22.7 percent) because of accrual adjustments made in 1995. Depreciation
and amortization grew $84,000 (18.1 percent) because of investments in
technology made in the latter part of 1995. All other non-interest expense
increased $20,000 (0.7 percent).
For the nine month period ended September 30, 1996, total non-interest
expense increased $612,000 compared to the similar period in 1995.
Salaries and benefits were $197,000 lower, as non-recurring costs
associated with the 1995 re-engineering totaling $1,135,000 were partially
offset by merit increases and new personnel. Net occupancy grew $157,000
(18.2 percent) while depreciation and amortization was up $305,000 (22.6
percent), primarily because of new FCC offices, bank branch remodeling and
technology investments. Supplies increased $43,000 (7.1 percent) while
data processing expense grew $123,000 (11.7 percent), with both increases
due to additional business volume. In spite of the one-time
recapitalization charge, FDIC assessments were lower by $396,000 (35.1
percent) while tax on bank shares increased $71,000 (8.5 percent). All
other non-interest expense grew $506,000 (10.0 percent) primarily because
of various accrual adjustments made in the first and second quarters of
1995.
The following table shows a breakdown of non-interest expense:
Three Months Ended Nine Months Ended
($ in thousands) September 30 September 30
1996 1995 1996 1995
Salaries and employee benefits $3,948 $3,763 $11,826 $12,023
Net occupancy 339 325 1,020 863
Depreciation and amortization 548 464 1,656 1,352
Supplies 194 210 650 606
Data processing 390 379 1,176 1,053
FDIC assessments 617 376 731 1,127
Tax on bank shares 303 247 909 838
Other 2,038 2,027 5,573 5,067
Total non-interest expense $8,377 $7,791 $23,541 $22,929
The efficiency ratio, defined as non-interest expense divided by tax-
equivalent revenue, is a measure of how effective a financial services
company is in leveraging its resources to produce revenue. A lower ratio
indicates better performance. For the three months ended September 30,
1996, CBT's efficiency ratio was 65.09 percent compared with 62.26 percent
for the same period in 1995. Without the one-time recapitalization
charge, the third quarter 1996 efficiency ratio was 60.7 percent. For the
nine month period ended September 30, 1996, CBT's efficiency ratio was
61.55 percent compared to 62.47 percent for the comparable 1995 period.
Income Taxes
CBT's income tax planning is based upon the goal of maximizing long-term,
after-tax profitability. Income tax expense is significantly affected by
the mix of taxable versus tax-exempt revenues.
The effective income tax rate for the three months ended September 30, 1996
and 1995 was 27.0 percent and 28.9 percent, respectively. The effective
income tax rate for the nine months ended September 30, 1996 and 1995 was
28.4 percent and 28.3 percent, respectively. The lower effective tax rate
for the third quarter of 1996 was the result of higher tax-exempt revenue
for the period compared to 1995.
Consolidated Balance Sheet Analysis
Earning Assets
At September 30, 1996, earning assets were $886.7 million, compared with
$841.9 million at September 30, 1995. This increase is due to a $32.6
million increase in loans and a $12.2 million increase in securities.
Total earning assets at September 30, 1996 consisted of 76.1 percent loans
and 23.9 percent securities. The September 30, 1995 earning asset mix was
identical to 1996. Average earning assets for the third quarter of 1996
were $836.3 million, an increase of 5.1 percent over the third quarter of
1995.
Investment Risk Management
CBT has certain securities in its available for sale portfolio that are
classified as derivative securities by banking regulators. At September
30, 1996 and December 31, 1995, respectively, CBT had $4,801,000 and
$11,747,000 book value in derivative securities. These amounts represent
3.0 percent and 7.4 percent of the total securities available for sale at
September 30, 1996 and December 31, 1995, respectively. Market value for
these securities was $4,676,000 at September 30, 1996 and $11,600,000 at
December 31, 1995. The significant decrease in such securities is due to
calls issued in 1996 based upon a favorable interest rate environment. All
are guaranteed by government agencies and none have a maturity of over 6
years. The amount and nature of these securities pose no undue risk to
CBT's financial position and there are no plans to acquire additional
derivative securities.
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt
and Equity Securities," which was adopted by CBT in the third quarter of
1994. The Statement requires that investment securities classified as
available for sale be reported at fair value with unrealized gains and
losses reported, net of deferred taxes, as a separate component of
shareholders' equity. As of September 30, 1996, net unrealized losses
related to investment securities available for sale were $1,492,000, net of
deferred taxes. At December 31, 1995, the fair value of securities
available for sale reflected unrealized gains of $307,000, net of deferred
taxes.
Credit Risk Management
CBT manages exposure to credit risk though loan portfolio diversification
by customer, industry, and loan type. As a result, there is no undue
concentration in any single sector. CBT annually evaluates economic
conditions affecting its lending markets. Economic indicators such as
unemployment levels, construction activity, and bankruptcy filings are
evaluated. During the third quarter of 1996, CBT's primary market areas
continued to experience favorable unemployment levels and strong real
estate values and commercial development. Bankruptcy filings in CBT's
markets have increased sharply during 1996 compared to the prior year,
however. CBT's credit risk is diversified by loan type. At September 30,
1996, 40.5 percent of the portfolio consisted of residential real estate
and mobile home loans, 31.5 percent of commercial loans and 28.0 percent of
consumer loans.
Credit risk management also includes monitoring the performance of existing
portfolios. CBT has in place a comprehensive internal credit review
program to assess the current financial condition and operating performance
of significant commercial borrowers.
Loans by type appear below:
($ in thousands) September 30 December 31 September 30
1996 1995 1995
Commercial, industrial, and
agricultural loans $202,732 $212,266 $201,291
Residential real estate and mobile
home loans 273,609 253,556 258,590
Consumer loans 206,970 189,036 191,864
Total loans 683,311 654,858 651,745
Less: Unearned interest 9,015 10,197 10,075
Total loans, net of unearned interest $674,296 $644,661 $641,670
CBT continues to classify its loans consistent with current regulatory
review results. There are no material commitments to lend additional funds
to customers whose loans were classified as non-accrual or restructured at
September 30, 1996.
Allowance for Loan Losses
At September 30, 1996, the allowance for loan losses was $8.7 million, or
1.30 percent of net loans outstanding, compared with $11.0 million, or 1.71
percent at December 31, 1995. The ratio of the allowance for loan losses
to non-performing assets was 92.9 percent at September 30, 1996, compared
with 225.8 percent at December 31, 1995. Non-performing assets consist of
non-accrual loans, restructured loans, loans past-due ninety days or more
that are still accruing interest and other real estate owned. The decline
in the allowance as a percent of loans is the result of modest loan growth
(4.6 percent since year-end 1995) and a $2.3 million decline in the
allowance, the latter occurring as the result of $2.8 million in charge-
offs taken on a single large commercial borrower. The significant drop in
the ratio of allowance for loan losses to non-performing assets was due to
the aforementioned decrease in the allowance to $8.7 million, coupled with
a $4.5 million increase in non-performing assets. Approximately $3.6
million of the increase in non-performing assets relate to outstanding
borrowings to the large commercial customer referred to above. Principal
loss exposure on the $3.6 million, which consists of $1.8 million in non-
accrual and $1.8 million in renegotiated outstandings, is estimated to be
not greater than $700,000.
Although it is impossible for any lender to predict future loan losses with
complete accuracy, management monitors the allowance for loan losses with
the intent to provide for all losses that can reasonably be anticipated
based on current conditions. CBT has a comprehensive credit grading system
and other internal loan monitoring systems to support this assessment.
Such systems fully comply with the loan review guidelines set forth in the
December 21, 1993 Interagency Policy Statement on the Allowance for Loan
and Lease Losses. CBT management maintains the allowance available to
cover future loan losses within the entire loan portfolio and believes the
allowance for loan losses is adequate at September 30, 1996 based on the
current level of non-performing assets and the expected level of future
charge-offs.
Non-Performing Assets
The table below presents data on CBT's non-performing assets. As
previously defined, non-performing assets consist of non-accrual loans,
restructured loans, loans past due ninety days or more that are still
accruing interest and other real estate owned. At September 30, 1996, non-
performing assets totaled $9.4 million, or 1.39 percent of net loans and
other real estate owned, compared with $4.9 million, or 0.77 percent of net
loans and other real estate owned, at December 31, 1995.
The $1.7 million increase in non-accrual loans consists of $1.8 million of
such loans from the aforementioned commercial borrower, less $100,000 net
of reductions in other non-accrual loans. The $1.8 million of debt is
collateralized with assets having an estimated fair value of $600,000 and
carries a $500,000 personal guarantee. The $1.8 million restructured loan,
which is a related credit, is secured by real estate and equipment and
bears an interest rate of 50 percent of New York prime. The $1 million
increase in loans past due 90 days or more and still accruing represents
various consumer credits, which collectively do not pose significant risk
to CBT's allowance for loan losses.
($ in thousands) September 30 December 31 September 30
1996 1995 1995
Non-accrual loans $5,784 $4,059 $3,873
Restructured loans 1,805 - -
Accruing loans which are
contractually past due 90 days
or more 1,781 785 637
Total non-performing loans 9,370 4,844 4,510
Other real estate owned 30 30 -
Total non-performing assets $9,400 $4,874 $4,510
In 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 114, "Accounting by Creditors for
Impairment of a Loan", (FAS 114). It was subsequently amended in 1994 with
the issue of FAS 118, "Accounting by Creditors for Impairment of a Loan-
Income Recognition and Disclosure". FAS 114, as amended, requires that
impaired loans be measured based on the present value of expected future
cash flow discounted at the loan's effective rate, at the loan's market
price, or the fair value of the collateral is the loan is collateral
dependent. CBT adopted FAS 114 in 1995. The adoption of FAS 114 did not
have a material effect on CBT's consolidated financial statements.
Funding Sources
Non-Interest Bearing Deposits
Non-interest bearing deposits, which represent a portion of CBT's core
deposits, were $70.2 million at September 30, 1996, a $562,000 increase
from December 31, 1995. Average non-interest bearing deposits were $67.8
for the third quarter of 1996 compared with $67.0 million for fourth
quarter of 1995. Non-interest bearing deposits represented 8.5 percent of
CBT's total funding sources at September 30, 1996, compared with 8.8
percent at December 31, 1995.
Interest-Bearing Liabilities
Interest-bearing liabilities for CBT consist of certain core deposits,
purchased deposits, short-term and long-term borrowings. At September 30,
1996, interest-bearing liabilities totaled $752.7 million, an increase of
$33.1 million over December 31, 1995. The increase is due to a $24.3
million increase in short-term borrowings, a $10.0 million increase in long-
term borrowings and a $1.2 million decrease in interest-bearing deposits.
Interest-bearing Core Deposits - In CBT's banking subsidiaries, NOW, Money
Manager, Individual Retirement and savings accounts, and certificates of
deposit under $100,000 provide a stable source of funding. At September
30, 1996 these deposits accounted for 63.2 percent of CBT's total funding
sources compared with 67.8 percent at December 31, 1995. Interest-bearing
core deposits declined $15.3 million comparing December 31, 1995 to
September 30, 1996 as customers continued to avail themselves of attractive
non-deposit investment opportunities.
Purchased Deposits - Purchased deposits, which CBT defines as certificates
of deposit with denominations of $100,000 or more and brokered certificates
of deposit, increased $14.1 million or 20.4 percent to $83.2 million from
$69.1 million at December 31, 1995. Purchased deposits represented 10.1
percent of CBT's total funding sources at September 30, 1996, compared
with 8.8 percent at December 31, 1995. At September 30, 1996, CBT held
$5.0 million of brokered certificates with a maturity of greater than one
year. Purchased funds have been acquired to offset the decline in interest-
bearing core deposits.
Borrowings - CBT's borrowings are both short-term and long-term. Short-
term borrowings include Federal funds purchased, securities sold under
agreements to repurchase, U.S. Treasury notes payable, revolving lines of
credit, and short-term Federal Home Loan Bank advances. Management views
short-term borrowings as a cost-effective alternative to purchased deposits
and interest-bearing core deposits and actively manages CBT's short-term
borrowing position to maintain acceptable net interest margins and
liquidity. At September 30, 1996, short-term borrowings accounted for
13.8 percent of CBT's total funding sources, compared with 11.3 percent at
December 31, 1995. The increase was primarily in Federal funds purchased
and securities sold under agreements to repurchase. Long-term borrowings,
which totaled $36.4 million and $26.4 million at September 30, 1996 and
December 31, 1995, respectively, include Federal Home Loan bank advances
with maturities in excess of one year and term debt used to fund FCC. At
September 30, 1996, long-term borrowings represented 4.4 percent of CBT's
total funding sources compared with 3.3 percent at December 31, 1995.
Asset and Liability Management
Financial institutions manage the inherently different maturity and
repricing characteristics of earning assets and interest-bearing funding to
achieve a desired interest rate sensitivity position and to limit their
exposure to interest rate risk. The goal of the asset and liability
management process is to manage the structure of the balance sheet to
provide the optimal level of net interest income while maintaining
acceptable levels of interest rate risk (as defined below) and liquidity.
The focal point of this process is the Asset and Liability Management
Committee (ALCO) of CBT, an executive level management committee. ALCO
meets monthly to consider CBT's consolidated interest rate risk and
liquidity posture. The committee takes an active role in maintaining and
hedging CBT's profitability under a variety of interest rate scenarios.
The actual management of interest rate risk is governed by an asset and
liability management policy.
Interest Rate Risk and Its Measurement
Interest rate risk is the risk that future changes in interest rates will
reduce net interest income or the market value of a financial institution.
Management uses various measurement tools to monitor CBT's interest rate
risk position. One measurement tool is the GAP report, which classifies
assets and liabilities and their respective yields and costs in terms of
maturity or repricing dates. While considerable judgment is necessary to
appropriately classify certain balance sheet items that have no contractual
maturity or repricing dates, the GAP report provides management a basic
measure of interest rate risk. CBT monitors the GAP position of each
subsidiary individually (FCC is included with Citizens), as well as on a
consolidated basis. The asset and liability management policy at each
subsidiary specifies targets based primarily on the one year cumulative GAP
position in conjunction with a market volatility risk analysis At
September 30, 1996 the one year cumulative interest rate GAP, defined as
the ratio of rate sensitive assets to rate sensitive liabilities, was .99,
while at December 31, 1995, the one year cumulative interest rate GAP was
.91. The above levels were within corporate guidelines. A GAP of less
than one indicates that, over the time horizon measured, more liabilities
will reprice than assets. Generally, such a position is favorable in a
falling interest rate environment. As the GAP approaches 1.0, a neutral
posture is obtained.
GAP as an interest rate risk measurement tool has some limitations: it is a
static measurement; it requires the establishment of an subjective time
horizon; and it does not capture basis risk or risk that varies non-
proportionally with rate movements. Because of such limitations, CBT
supplements its use of GAP with a computer model to estimate the impact of
various parallel shifts in the yield curve on net interest income and the
fair value of equity under a variety of interest rate scenarios. CBT's
management believes the two approaches compliment each other in
understanding the impact of changes in interest rates on the financial
performance and condition of CBT. Based on modeling using September 30,
1996 data, CBT would expect its net interest income to change no more than
3.0 percent under a 200 basis point parallel shift up or down of the yield
curve.
Liquidity Management
Liquidity management involves planning to meet funding needs at a
reasonable cost, as well as developing contingency plans to meet
unanticipated funding needs or a loss of funding sources. Liquidity
management for CBT is monitored by ALCO, which takes into account the
marketability of assets, the sources and stability of funding, and the
level of unfunded loan commitments.
CBT's consumer deposits provide a certain level of stability with respect
to liquidity. In addition, membership in the Federal Home Loan Bank of
Cincinnati provides a cost-effective alternate source of funding, as does
access to brokered certificates of deposits. CBT's available for sale
investment portfolio also provides an additional source of liquidity.
Capital Management
CBT management believes that a strong capital position is vital to
continued profitability and promotes depositor and investor confidence.
Bank subsidiaries are required to maintain capital levels sufficient to
qualify for "well capitalized" status with banking regulators and to meet
anticipated growth needs. Net income is the primary source of new capital
for subsidiaries. Net income of subsidiaries in excess of capital
requirements is available to CBT in the form of dividends and is used
primarily to pay corporate dividends.
The following analysis shows comparisons between the regulatory
requirements for "well capitalized" institutions and the actual capital
position of CBT:
Well
Capitalized Actual Excess
September 30, 1996
Leverage Ratio (Equity to Assets) 5.00% 11.30% 6.30%
Tier 1 Risk-Based 6.00% 15.98% 9.98%
Total Risk-Based 10.00% 17.23% 7.23%
December 31, 1995
Leverage Ratio (Equity to Assets) 5.00% 11.35% 6.35%
Tier 1 Risk-Based 6.00% 16.12% 10.12%
Total Risk-Based 10.00% 17.37% 7.37%
Because of solid performance and conservative capital management, CBT has
consistently maintained a strong capital position. These ratios compare
favorably with industry standards and CBT's peers.
The Corporation occasionally repurchases and retires common stock. All
repurchases are done in non-block sizes (less than 5,000 shares) and are
accomplished to meet internal needs (e.g. 401(k), stock options). For the
nine month period ended September 30, 1996, 57,384 shares had been
repurchased at an aggregate price of $1,303,000.
For the nine month period ended September 30, 1996, CBT's shareholders'
equity, exclusive of the unrealized loss on securities available for sale
(net of deferred tax) and stock repurchases, grew $5.7 million. CBT's
internal capital growth rate (ICGR) for the nine months ended September 30,
1996 was 7.3 percent. The ICGR represents the rate at which CBT's
shareholders' equity grew as a result of earnings retained (net income less
dividends paid).
CBT declared a $0.13 per share dividend in the third quarter of 1996, which
represented an 8.3 percent increase over one year ago. The dividend payout
ratio for the third quarter of 1996 was 41.6 percent of net income, which
was higher than management's general payout guideline of 25 to 35 percent,
primarily because of the one-time charge to earnings related to
recapitalization of the insurance fund. Exclusive of that charge, the
payout ratio was 35.7 percent for the third quarter of 1996. The 1996 year-
to-date payout ratio is 33.9 percent (32.5 percent exclusive of
recapitalization).
Management is currently not aware of any recommendation by regulatory
authorities which, if implemented, would have a material effect on the
Corporation's liquidity, capital resources, or operations. Management is
also not aware of any events or uncertainties that will have or that are
reasonably likely to have a material impact on CBT's liquidity, capital
resources or operations.
Market Data
At September 30, 1996, CBT had issued and outstanding 7,856,210 shares of
common stock held by approximately 1,463 shareholders of record.
Shareholders have received cash dividends for each share of common stock on
a quarterly basis in 1995 and 1996.
CBT Corporation common stock is traded on the NASDAQ Stock Market under the
symbol CBTC.
The following table summarizes common stock prices and cash dividends
declared in 1996 and 1995. The price information reflects the range of
prices for CBT Corporation common stock as reported by NASDAQ.
Price
Quarter High Low Dividends
September 30, 1996 23.50 20.00 0.13
June 30, 1996 24.25 21.50 0.12
March 31, 1996 24.50 21.50 0.12
December 31, 1995 23.00 20.00 0.12
September 30, 1995 24.25 19.25 0.12
June 30, 1995 24.00 19.75 0.11
March 31, 1995 24.75 21.00 0.11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits set out on the Exhibit Index included as page
26 of this report are furnished as a part of this report.
(b) No Form 8-K has been filed during the third quarter of 1996.
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.
CBT CORPORATION
DATE: November 14, 1996 SIGNED:''''''''''''''''''''
John E. Sircy
Executive Vice President
and Chief Operating Officer
EXHIBIT INDEX
NUMBER DESCRIPTION PAGE
3(a) Articles of Incorporation of CBT Corporation,
as amended are incorporated by reference to
Exhibit 4(a), of Amended Form 10-Q of CBT
Corporation dated September 6, 1994.
3(b) Articles of Amendment to the Articles of Incorporation
of CBT Corporation are incorporated by reference to
Exhibit 4(b) of Form 10-Q of CBT Corporation
dated September 30, 1995.
3(c) By-Laws of CBT Corporation are incorporated
by reference to Exhibit 3, to the Registration
Statement of Form S-14 of CBT Corporation
(Registration No. 2-83583).
10(a) **Form of Severance Protection Agreement
between CBT Corporation and certain executive
officers is incorporated by reference to Exhibit 10 of
Form 10-Q of CBT Corporation dated September 30, 1995.
10(b) **CBT Corporation 1986 Stock Option Plan is
incorporated by reference to Exhibit 4 of
Registration Statement on Form S-8 of CBT
Corporation (Registration No. 33-28512).
10(c) **CBT Corporation 1993 Stock Option Plan
is incorporated by reference to Form 10-Q
of CBT Corporation dated September 30, 1993.
10(d) **Salary Continuance Agreement is incorporated
by reference to Exhibit 10(c) of the Form 10-K
of CBT Corporation for the year ended December
31, 1990.
10(e) **Description of Incentive Compensation Plan is
incorporated by reference to Exhibit 10(d) of the
Form 10-K of CBT Corporation for the year ended
December 31, 1990.
10(f) **CBT Corporation 1993 Stock Option Plan, as
amended and restated effective March 16, 1996, is
incorporated by reference to Exhibit 10(f) of the Form
10-Q of CBT Corporation dated June 30, 1996.
27 Financial Data Schedule 27
** Denotes management contracts or compensatory plans or arrangements
required to be filed as exhibits to this Form 10-Q.
EXHIBIT 27
FINANCIAL DATA SCHEDULE
(filed in electronic format)
FOR
CBT CORPORATION
For the Period Ended
SEPTEMBER 30, 1996
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