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
or the quarter ended March 31, 1997 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 March 31, 1997
Common Stock, No Par Value 7,862,627
Page 1
This filing contains 26 pages.
<PAGE> 2
CBT CORPORATION
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
NO.
<S> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets at March 31, 1997,
December 31, 1996 and March 31, 1996 3
Consolidated Statements of Income for Three
Months Ended March 31, 1997 and March 31, 1996 4
Consolidated Statements of Changes in Shareholders'
Equity for Three Months Ended March 31, 1997 and
March 31, 1996 5
Consolidated Statements of Cash Flows for Three
Months Ended March 31, 1997 and March 31, 1996 6
Notes to Consolidated Financial Statements 7 - 12
Item 2. Management's Discussion and Analysis of
Consolidated Financial Condition and Results
of Operations 13 - 21
PART II. OTHER INFORMATION
Item 1. through Item 6. 22
SIGNATURE PAGE 23
EXHIBIT INDEX 24
FINANCIAL DATA SCHEDULE 25 - 26
</TABLE>
Page 2
<PAGE> 3
[CAPTION]
<TABLE>
CBT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited) (audited) (unaudite)
($ in thousands) March 31, December 31, March 31
- --------------------------------------------------------------------------------
1997 1996 1996
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 35,111 $ 43,821 $ 30,621
Securities to be held to maturity 55,205 56,241 53,557
Securities available for sale
(at fair market value) 169,457 149,254 167,787
Loans, net of unearned interest 682,333 687,218 635,292
Allowance for loan losses (8,707) (8,243) (9,858)
-------------------------------
Loans, net 673,626 678,975 625,434
Premises and equipment, net 17,828 18,198 18,797
Accrued interest receivable 6,409 6,845 6,455
Other 7,422 7,218 6,628
-------------------------------
TOTAL ASSETS $965,058 $960,552 $909,279
================================
LIABILITIES
Deposits:
Non-interest bearing $ 73,690 $ 78,596 $ 60,036
Interest bearing 629,363 631,535 599,929
-------------------------------
Total deposits 703,053 710,131 659,965
Borrowings:
Federal funds purchased and securities
sold under agreements to repurchase 44,221 41,866 52,704
Notes payable - U.S. Treasury 2,009 1,136 2,072
Revolving lines of credit 6,500 6,500 5,000
Federal Home Loan Bank advances 75,803 69,118 61,879
Term Debt 10,046 10,046 10,069
-------------------------------
Total borrowings 138,579 128,666 131,724
Accrued interest payable 5,344 4,715 4,832
Other 6,816 6,824 7,273
-------------------------------
TOTAL LIABILITIES 853,792 850,336 803,794
STOCKHOLDERS' EQUITY
Common stock, no par value, authorized
12,000,000 shares; issued and
outstanding
7,862,627 shares at March 31, 1997;
7,858,986 shares at December 31, 1996; 4,100 4,100 4,100
and
7,898,569 shares at March 31, 1996
Capital surplus 16,042 16,160 18,783
Retained earnings 92,249 90,143 82,945
Unrealized losses on securities available
for sale, net of deferred taxes (1,125) (187) (343)
-------------------------------
TOTAL STOCKHOLDERS' EQUITY 111,266 110,216 105,485
-------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' $965,058 $960,552 $909,279
EQUITY ===============================
</TABLE>
Page 3
<PAGE> 4
<TABLE>
<CAPTION>
CBT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME Three Months Ended
- ------------------------------------------------------------------------
($ in thousands except per share data) (unaudited) March 31
- ------------------------------------------------------------------------
1997 1996
<S> <C> <C>
INTEREST INCOME
Loans, including fees:
Taxable $ 16,334 $ 15,574
Tax-exempt 34 40
Securities:
Taxable 2,511 2,506
Tax-exempt 926 868
Other 69 18
------------------------
Total interest income 19,874 19,006
INTEREST EXPENSE
Deposits 7,814 7,170
Other borrowings 1,709 1,617
------------------------
Total interest expense 9,523 8,787
------------------------
NET INTEREST INCOME 10,351 10,219
Provision for loan losses 930 470
------------------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 9,421 9,749
------------------------
NON-INTEREST INCOME
Trust and investment advisory fees 538 465
Service charges on deposit 836 760
accounts
Insurance commissions 364 312
Gain on sale of securities - 13
Gain on sale of finance 185 -
receivables receivables loans
Other 549 420
------------------------
Total non-interest income 2,472 1,970
------------------------
NON-INTEREST EXPENSE
Salaries and employee benefits 4,071 3,962
Net occupancy 359 353
Depreciation and amortization 546 554
Supplies 173 244
Data processing 442 415
FDIC assessments (8) 57
Tax on bank shares 294 303
Other 1,585 1,707
------------------------
Total non-interest expense 7,462 7,595
------------------------
INCOME BEFORE INCOME TAXES 4,431 4,124
Income taxes 1,300 1,192
------------------------
NET INCOME $ 3,131 $ 2,932
========================
NET INCOME PER COMMON SHARE $ 0.40 $ 0.37
========================
</TABLE>
Page 4
<PAGE> 5
<TABLE>
<CAPTION>
CBT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY
($ in thousands)
- --------------------------------------------------------------------------
Total
Stockholders'
Equity
- --------------------------------------------------------------------------
<S> <C>
Balance, December 31, 1996 $110,216
Net income 3,131
Dividends on common stock (1,025)
Stock options exercised -
Purchase of common stock (118)
Net unrealized loss on securities available for sale (938)
- --------------------------------------------------------------------------
Balance, March 31, 1997 $111,266
=======
- --------------------------------------------------------------------------
Balance, December 31, 1995 $104,371
Net income 2,932
Dividends on common stock (948)
Stock options exercised -
Purchase of common stock (220)
Net unrealized loss on securities available for sale (650)
- --------------------------------------------------------------------------
Balance, March 31, 1996 $105,485
=======
</TABLE>
Page 5
<PAGE> 6
<TABLE>
CBT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited) Three Months Ended
($ in thousands) March 31
- --------------------------------------------------------------------------
<S> <C> <C>
1997 1996
OPERATING ACTIVITIES:
Net income $ 3,131 $ 2,932
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 464 470
Depreciation 502 498
Amortization 44 56
Amortization and accretion of securities 87 15
Net (gain) loss on sale of securities - (13)
Net (gain) loss on sale of premises and 1 -
equipment
Net (gain) loss on sale of finance (185) -
receivables
Changes in assets and liabilities:
Accrued interest receivable 436 297
Other assets 257 (436)
Accrued interest payable 629 491
Dividends payable 2 -
Other liabilities (10) 436
-----------------
Net cash provided by operating activities 5,358 4,746
INVESTING ACTIVITIES:
Proceeds from maturities of securities to be held 1,025 400
to maturity
Proceeds from maturities of securities available 35 7,360
for sale
Principal collected on mortgage-backed securities,
including those classified as available for sale 2,330 2,423
Payment for purchases of securities (24,087) (27,628)
Net (increase) decrease in loans 4,885 7,753
Proceeds from sales of premises and equipment 2 -
Proceeds from sales of finance receivables 185 -
Payment for purchase of premises and equipment (135) (424)
-----------------
Net cash provided by (used in) investing (15,760) (10,116)
activities
FINANCING ACTIVITIES:
Net decrease in deposits (7,078) (13,769)
Net increase (decrease) in short term borrowings 3,228 15,280
Net decrease in FHLB advances 6,685 (14)
Cash advanced on revolving lines of credit - 1,000
Cash dividends paid (1,025) (948)
Purchase of common stock (118) (220)
------------------
Net cash provided by (used in) financing 1,692 1,329
activities
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (8,710) (4,041)
-----------------
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 43,821 34,662
-----------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $35,111 $30,621
=================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $8,894 $ 8,296
Federal income taxes $ 0 $ 325
</TABLE>
Page 6
<PAGE> 7
CBT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
March 31, 1997
NOTE 1: BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying unaudited consolidated financial statements 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 and Trust Company
of Paducah (Citizens), Pennyrile Citizens Bank and Trust Company (PCB),
Bank of Marshall County (BOMC), Graves County Bank, Inc. (GCB), and United
Commonwealth Bank, FSB (UCB). 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 intercompany accounts
and transactions have been eliminated in consolidation.
Operating results for the three month period ended March 31, 1997, are not
necessarily indicative of the results that may be expected for the year
ended December 31, 1997. 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,
1996.
Cash and Cash Equivalents
For purpose of reporting cash flows, cash and cash equivalents include cash
and due from banks, federal funds sold and money market investments.
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 considered 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 the recorded investment in the loan, the
impairment is recorded through a valuation allowance that is included in
Page 7
<PAGE> 8
the allowance for loan losses. 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 tax, on available for sale securities are
reported as a net amount in a separate component of stockholders' equity
until realized. The change had the effect of increasing stockholders'
equity at January 1, 1994 by $2,639,000.
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.
Page 8
<PAGE> 9
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, when 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.
Per Common Share Data
Net income per common share is based on 7,624,217 average shares
outstanding during the three months ended March 31, 1997, and 7,906,912
average shares outstanding during the three months ended March 31, 1996.
Common stock options are not included in net income per common share data
since their effect is not significant.
Reclassifications
Certain reclassifications have been made in the 1996 financial statements
to conform to the presentation of the 1997 financial statements.
Uses of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Page 9
<PAGE> 10
NOTE 2: SECURITIES TO BE HELD TO MATURITY
<TABLE>
<CAPTION>
SECURITIES TO BE HELD TO MATURITY
($ in thousands) March 31, 1997
- ----------------------------------------------------------------------
AMORTIZED ESTIMATED GROSS UNREALIZED
COST FAIR VALUE GAIN LOSS
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 1,104 $ 1,103 $ - $ 1
U.S. Government agency
obligations 906 913 8 1
State and political
subdivisions 53,195 54,606 1,933 522
Other* - - - -
--------------------------------------------
Total $ 55,205 $ 56,622 $1,941 $ 524
============================================
</TABLE>
<TABLE>
<CAPTION>
December 31, 1996
AMORTIZED ESTIMATED GROSS UNREALIZED
COST FAIR VALUE GAIN LOSS
VALUE
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 1,108 $ 1,106 $ - $ 2
U.S. Government agency
obligations 907 921 14 -
State and political
subdivisions 54,226 55,922 2,204 508
Other - - - -
--------------------------------------------
Total securities $ 56,241 $ 57,949 $2,218 $ 510
============================================
</TABLE>
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
amortized cost and estimated fair value of approximately $25,770,607 and
$26,281,213, respectively, at March 31, 1997.
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<PAGE> 11
NOTE 3: SECURITIES AVAILABLE FOR SALE
<TABLE>
<CAPTION>
($ in thousands) March 31, 1997
- ----------------------------------------------------------------------
AMORTIZED ESTIMATED GROSS UNREALIZED
COST FAIR VALUE GAIN LOSS
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 7,720 $ 7,707 $ 6 $ 19
U.S. Government agency
obligations 53,250 52,467 6 789
State and political
subdivisions 7,226 7,401 222 47
Mortgage-backed 92,649 91,541 347 1,455
securities
Derivative Securities 1,002 1,000 - 2
Federal Home Loan Bank
Stock - at cost 9,239 9,239 - -
Other 102 102 - -
----------------------------------------
Total $171,188 $169,457 $ 581 $ 2,312
</TABLE>
<TABLE>
<CAPTION>
December 31, 1996
AMORTIZED ESTIMATED GROSS UNREALIZED
COST FAIR VALUE GAIN LOSS
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 7,715 $ 7,728 $ 17 $ 4
U.S. Government agency
obligations 37,250 37,018 26 258
State and political
subdivisions 7,259 7,489 270 40
Mortgage-backed 87,402 87,109 495 788
securities
Derivative Securities 1,003 997 - 6
Federal Home Loan Bank
- at cost 8,791 8,791 - -
Other 122 122 - -
$149,542 $149,254 $ 808 $1,096
</TABLE>
Certain securities available for sale were pledged to secure public
deposits, securities sold under agreements to repurchase, and for other
purposes as required or permitted by law. These pledged securities had an
amortized cost and estimated fair value of approximately $115,621,325 and
$113,872,367 respectively, at March 31, 1997. Federal Home Loan Bank
stock, which is classified as available for sale, is carried at cost.
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<TABLE>
<CAPTION>
NOTE 4: LOANS
($ in thousands) March 31 December 31 March 31
- ---------------------------------------------------------------------------
1997 1996 1996
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Commercial, industrial,
and agricultural loans $202,530 $209,941 $204,900
Residential real estate loans 280,054 279,803 250,623
Installment loans 208,466 206,998 189,152
--------------------------------
Total loans 691,050 696,742 644,675
Less: Unearned interest 8,717 9,524 9,383
--------------------------------
Total loans, net of unearned $682,333 $687,218 $635,292
interest ================================
</TABLE>
<TABLE>
<CAPTION>
NOTE 5: PREMISES AND EQUIPMENT
($ in thousands) March 31 December 31 March 31
- -----------------------------------------------------------------------------
1997 1996 1996
<S> <C> <C> <C>
Land $1,971 $1,971 $ 1,971
Buildings and improvements 18,588 18,568 18,357
Furniture and equipment 13,652 13,569 13,224
Construction in progress 11 - 80
---------------------------------
Total premises and equipment 34,222 34,108 33,632
Less: Accumulated depreciation
and amortization 16,394 15,910 14,835
---------------------------------
Net premises and equipment $17,828 $18,198 $18,797
=================================
</TABLE>
<TABLE>
<CAPTION>
NOTE 6: INTEREST BEARING DEPOSITS
($ in thousands) March 31 December 31 March 31
- ----------------------------------------------------------------------------
1997 1996 1996
---------------------------------
<S> <C> <C> <C>
NOW accounts $93,671 $106,882 $ 97,958
Money Manager accounts 54,098 39,008 41,910
Individual Retirement accounts 49,036 49,542 48,753
Savings accounts 53,132 51,984 47,942
Certificates of deposit under $100,000 286,800 291,154 294,300
Certificates of deposit $100,000 and 92,626 92,965 69,066
above
--------------------------------
Total interest bearing deposits $629,363 $631,535 $599,929
================================
</TABLE>
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<PAGE> 13
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 26 locations
throughout the Commonwealth. The following discussion and analysis is
presented on a consolidated basis, with all significant intercompany
accounts and transactions eliminated.
For the first quarter, CBT Corporation earned $3,131,000 and $2,932,000 in
1997 and 1996, respectively. Net income per share was $0.40 for the three
month period ended March 31, 1997 compared with $0.37 for the comparable
period in 1996.
Return on average equity was 11.38 percent and 11.21 percent for the first
quarter of 1997 and 1996, respectively. Return on average assets for the
three month period ended March 31, 1997 was 1.33 percent, compared with
1.31 percent for the similar 1996 period.
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 first quarter of 1997, tax-equivalent net interest income provided
81.2 percent of CBT's net revenue, compared with 84.2 percent in the first
quarter of 1996. The change was a result of higher fee income in 1997
rather than a reduction in net interest income. Total tax-equivalent net
interest income for the first quarter of 1997 increased 1.4 percent from
the first quarter a year ago. Growth in tax-equivalent net interest income
for the first quarter of 1997 over 1996 was due to growth in earning assets
of 5.8 percent partially offset by a 16 basis point decline in net interest
margin.
Net interest margin, the ratio of tax-equivalent net interest income
divided by average earning assets, was 4.81 percent and 4.97 percent for
the three months ended March 31, 1997 and March 31, 1996, respectively.
The following schedule presents yields and costs on key components of
interest income and interest expense for the first quarter of 1997 and 1996.
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<TABLE>
<CAPTION>
Three Months
Ended
March 31
- --------------------------------------------------------
1997 1996
<S> <C> <C>
Yield on securities 7.13% 6.99%
Yield on loans 9.74% 9.83%
Yield on federal funds sold and other
money market investments 5.25% 5.13%
Yield on earning assets 9.09% 9.12%
Rate on interest-bearing deposits 5.00% 4.82%
Rate on borrowings 5.56% 5.33%
Rate on interest bearing 5.09% 4.90%
liabilities
Net interest spread 4.00% 4.22%
Net interest margin 4.81% 4.97%
</TABLE>
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 $930,000 for the first quarter of 1997, a 97.9 percent increase
from the $470,000 provision recorded in the first quarter of 1996. The
first quarter provision for loan losses was 0.55 percent of average loans
on an annualized basis, compared with 0.30 percent in the prior year.
Provision expense was substantially increased in the first quarter of 1997
in light of a significant increase in loan charge-offs during 1996,
principally related to one commercial account.
Net loan losses were $438,000 for the first quarter of 1997 compared to
$1,616,000 for the first quarter of 1996. Net loan losses as a percent of
average loans on an annualized basis were .26 percent for the three months
ended March 31, 1997, compared to 1.02 percent for the three months ended
March 31, 1996.
The following is a progression of the allowance for loan losses:
<TABLE>
<CAPTION>
Three Months
Ended
($ in thousands) March 31
- ---------------------------------------------------------
1997 1996
----------------
<S> <C> <C>
Balance, beginning of period $8,243 $11,004
Adjustment for finance receivables (28) -
Provision for loan losses 930 470
Loans charged off (571) (1,719)
Recoveries 133 103
Net charge-offs (438) (1,616)
----------------
Balance, end of period $8,707 $9,858
================
Allowance for loan losses to total
loans,
net of unearned interest 1.28% 1.55%
Net charge-offs to average loans .26% 1.02%
Non-performing assets to period-end
loans and other real estate 1.13% 1.66%
</TABLE>
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<PAGE> 15
Non-Interest Income
Non-interest income represented 18.8 percent of CBT's tax-equivalent revenue
in the first quarter of 1997, compared with 15.8 percent in the first
quarter of 1996. Consolidated non-interest income increased 25.4 percent
or $502,000 in the first quarter of 1997 to $2,472,000, compared with the
comparable 1996 period. Non-interest income was enhanced during the first
quarter of 1997 by the sale of finance receivables by FCC. Exclusive of
the $185,000 gain realized on that sale, non-interest income increased 16.1
percent during the first quarter of 1997 compared to the first quarter of
1996. Trust and investment advisory fees increased 15.8 percent over the
first quarter of 1996 from $465,000 to $538,000. This increase was principally
the result of higher volumes generated through CBT's strategic alliance with
J.C. Bradford & Co. ("JCB"), a Nashville-based regional brokerage firm.
Service charges on deposit accounts grew 10.0 percent from $760,000 in the
first quarter of 1996 to $836,000 in the first quarter of 1997, primarily
as a result of increased return check charges and commercial analysis fees.
Credit-related insurance fees grew 16.7 percent from $312,000 to $364,000
as a result of consumer loan growth and all other fee income increased 30.7
percent to $549,000 from $420,000 primarily because of fees related to the
outsourcing of official check processing and increased automobile club
revenue.
The following table shows a breakdown of non-interest income:
<TABLE>
<CAPTION>
Three Months
Ended
($ in thousands) March 31
- ----------------------------------------------------------
1997 1996
-----------------
<S> <C> <C>
Trust and investment advisory fees $ 538 $ 465
Service charges on deposit accounts 836 760
Insurance commissions 364 312
Net gain on sale of securities - 13
Net gain on sale of finance 185 -
receivables
Other 549 420
-----------------
Total non-interest income $2,472 $1,970
=================
</TABLE>
Non-Interest Expenses
Total non-interest expense fell $133,000, or 1.8 percent, for the first
quarter of 1997 compared to the first quarter of 1996. Salaries and
benefits increased $109,000 (2.8 percent) as a result of merit increases
and the filling of open positions, while data processing was up $27,000
(6.5 percent) because of increased volumes and additional services provided
in 1997. All other non-interest expense decreased $269,000 (8.4 percent).
The following table shows a breakdown of non-interest expense:
<TABLE>
<CAPTION>
Three Months
Ended
($ in thousands) March 31
- --------------------------------------------------------
1997 1996
---------------
<S> <C> <C>
Salaries and employee benefits $4,071 $3,962
Net occupancy 359 353
Depreciation and amortization 546 554
Supplies 173 244
Data processing 442 415
FDIC assessments (8) 57
Franchise tax 294 303
Other 1,585 1,707
---------------
Total non-interest expense $7,462 $7,595
===============
</TABLE>
Page 15
<PAGE> 16
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 March 31, 1997,
CBT's efficiency ratio was 56.75 percent compared with 60.80 percent for
the same period in 1996.
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 March 31, 1997 and
1996 was 29.3 percent and 28.9 percent, respectively. The increase is
attributable to the decline of tax-exempt revenue as a percent of total
revenue.
Consolidated Balance Sheet Analysis
Earning Assets
At March 31, 1997, earning assets were $907.0 million, compared with $856.6
million at March 31, 1996. This increase is due to a $47.0 million
increase in loans and a $13.4 million increase in securities. Total
earning assets at March 31, 1997 consisted of 75.2 percent loans and 24.8
percent securities, while the March 31, 1996 earning asset mix consisted of
74.2 percent loans and 25.8 percent securities. Average earning assets for
the first quarter of 1997 were $900.9 million, an increase of 5.8 percent
over the first quarter of 1996.
Investment Risk Management
CBT has certain securities in its available for sale portfolio that are
classified as derivative securities by banking regulators. At March 31,
1997 and December 31, 1996, respectively, CBT had $1,000,000 and $1,003,000
in derivative securities. These amounts represent 0.6 percent and 0.7
percent of the total securities available for sale at March 31, 1997 and
December 31, 1996, respectively. All are guaranteed by government agencies
and none have a maturity of over 2 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 March 31, 1997, net unrealized losses related
to investment securities available for sale were $1,125,000, net of
deferred taxes. At March 31, 1996, the fair value of securities available
for sale reflected unrealized losses of $345,000, net of deferred taxes.
Page 16
<PAGE> 17
Credit Risk Management
CBT manages exposure to credit risk though loan portfolio diversification
by customer, industry, and loan type. As a result, there is no undue
concentration in any single sector. CBT annually evaluates economic
conditions affecting its lending markets. Economic indicators such as
unemployment levels, construction activity, and bankruptcy filings are
evaluated. During the first quarter of 1997, CBT's primary market areas
continued to experience favorable unemployment levels and stable real
estate values and commercial development. Bankruptcy filings in CBT's
markets have continued to increase during 1997, however. Management has
considered expected economic trends in assessing the adequacy of the
allowance for loan losses and believes that the allowance for loan losses
is adequate in light of these trends, among other factors. CBT's credit
risk is diversified by loan type. At March 31, 1997, 41.0 percent of the
portfolio consisted of residential real estate and mobile home loans, 29.7
percent of commercial loans and 29.3 percent of consumer loans.
Credit risk management also includes monitoring the performance of existing
portfolios. CBT has in place a comprehensive internal credit review
program to assess the current financial condition and operating performance
of significant commercial borrowers.
Loans by type appear below:
<TABLE>
<CAPTION>
($ in thousands) March 31 December 31 March 31
- --------------------------------------------------------------------------
1997 1996 1996
---------------------------------
<S> <C> <C> <C>
Commercial, industrial, and
agricultural $202,530 $209,941 $204,900
loans
Residential real estate and mobile 280,054 279,803 250,623
home loans
Consumer loans 208,466 206,998 189,152
---------------------------------
Total loans 691,050 696,742 644,675
Less: Unearned interest 8,717 9,524 9,383
---------------------------------
Total loans, net of unearned $682,333 $687,218 $635,292
interest =================================
</TABLE>
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 at March 31, 1997.
Allowance for Loan Losses
At March 31, 1997, the allowance for loan losses was $8.7 million, or 1.28
percent of net loans outstanding, compared with $8.2 million, or 1.2
percent at December 31, 1996. The ratio of the allowance for loan losses
to non-performing assets was 114.1 percent at March 31, 1997, compared with
111.9 percent at December 31, 1996. Non-performing assets consist of non-
accrual loans, loans past-due ninety days or more that are still accruing
interest and other real estate owned.
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 March 31, 1997 based on the
Page 17
<PAGE> 18
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,
loans past due ninety days or more that are still accruing interest and
other real estate owned. At March 31, 1997, non-performing assets totaled
$7.6 million, or 1.12 percent of net loans and other real estate owned,
compared with $7.4 million, or 1.07 percent of net loans and other real estate
owned, at December 31, 1996.
<TABLE>
<CAPTION>
($ in thousands) March 31 December 31 March 31
- ---------------------------------------------------------------------------
1997 1996 1996
----------------------------------
<S> <C> <C> <C>
Non-accrual loans $ 5,832 $ 5,158 $ 9,069
Accruing loans which are contractually
past due 90 days or more 1,684 2,207 1,475
Total non-performing loans 7,516 7,365 10,544
Other real estate owned 117 - 30
----------------------------------
Total non-performing assets $7,633 $7,365 $10,574
==================================
</TABLE>
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 $73.7 million at March 31, 1997, a $4.9 million decline from
December 31, 1996. Average non-interest bearing deposits were $68.0
million for the first quarter of 1997 compared with $64.4 million for first
quarter of 1996. Non-interest bearing deposits represented 8.8 percent of
CBT's total funding sources at March 31, 1997, compared with 9.4 percent at
December 31, 1996.
Interest-Bearing Liabilities
Interest-bearing liabilities for CBT consist of certain core deposits,
purchased deposits, short-term and long-term borrowings. At March 31,
1997, interest-bearing liabilities totaled $767.9 million, an increase of
$7.7 million over December 31, 1996. The increase is due to a $6.7 million
increase in Federal Home Loan Bank advances, a $3.2 million increase in
other borrowings and a $2.2 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 are considered core interest-bearing deposits. At
Page 18
<PAGE> 19
March 31, 1997 these deposits accounted for 64.1 percent of CBT's total
funding sources compared with 64.2 percent at December 31, 1996.
Purchased Deposits - Purchased deposits, which CBT defines as certificates
of deposit with denominations of $100,000 or more and brokered certificates
of deposit, decreased $3.3 million or 6.1 percent to $89.7 million from
$93.0 million at December 31, 1996. Purchased deposits represented 10.7
percent of CBT's total funding sources at March 31, 1997, compared with
11.1 percent at December 31, 1996. At March 31, 1997, CBT held $11.6
million of brokered certificates of deposit.
Borrowings - Borrowings include Federal funds purchased, securities sold
under agreements to repurchase, U.S. Treasury notes payable, revolving
lines of credit, and Federal Home Loan Bank advances. Management views
borrowings as a cost-effective alternative to purchased deposits and
interest-bearing core deposits and actively manages CBT's borrowing
position to maintain acceptable net interest margins and liquidity. At
March 31, 1997, borrowings accounted for 16.5 percent of CBT's total
funding sources, compared with 15.3 percent at December 31, 1996. The
increase was primarily in Federal funds purchased and securities sold under
agreements to repurchase as well as Federal Home Loan Bank advances.
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 March
31, 1997 the one year cumulative interest rate GAP, defined as the ratio of
rate sensitive assets to rate sensitive liabilities, was .86, while at
December 31, 1996, the one year cumulative interest rate GAP was .99. The
change was primarily the result of an investment strategy implemented in
anticipation of a branch deposit acquisition scheduled to close in May
1997. Exclusive of that, the GAP is within corporate guidelines. A GAP of
less than one indicates that, over the time horizon measured, more
liabilities will reprice than assets.
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
Page 19
<PAGE> 20
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 March 31, 1997
data, CBT would expect its net interest income to change no more than 2.0
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 deposit. 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.
CBT 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 and capital infusions from the parent
are the primary sources 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 and to
infuse other subsidiaries with capital, as required.
The following analysis shows comparisons between the regulatory
requirements for "well capitalized" institutions and the actual capital
position of CBT:
<TABLE>
<CAPTION>
Well
Capitalized Actual Excess
- ------------------------------------------------------------------------
March 31, 1997
<S> <C> <C> <C>
Leverage Ratio (Equity to 5.00% 11.62% 6.62%
Assets)
Tier 1 Risk-Based 6.00% 16.42% 10.42%
Total Risk-Based 10.00% 17.67% 7.67%
December 31, 1996
Leverage Ratio (Equity to 5.00% 11.37% 6.37%
Assets)
Tier 1 Risk-Based 6.00% 15.90% 9.90%
Total Risk-Based 10.00% 17.10% 7.10%
</TABLE>
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
three month period ended March 31, 1997, 5,000 shares had been repurchased
at an aggregate price of $118,000.
Page 20
<PAGE> 21
For the three month period ended March 31, 1997, CBT's shareholders'
equity, exclusive of the unrealized loss on securities available for sale
(net of deferred tax) and stock repurchases, grew $6.0 million. CBT's
internal capital growth rate (ICGR) for the three months ended March 31,
1997 was 5.6 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 first quarter of 1997, which
represented an 8.3 percent increase over one year ago. The dividend payout
ratio for the first quarter of 1997 was 32.7 percent of net income, which
was within management's general payout guideline of 25 to 35 percent.
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 March 31, 1997, CBT had issued and outstanding 7,862,627 shares of
common stock held by approximately 1,465 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 National Stock Market
under the symbol CBTC.
The following table summarizes common stock prices and cash dividends
declared in 1997, 1996, and 1995. The price information reflects the range
of prices for CBT Corporation common stock as reported by NASDAQ.
<TABLE>
<CAPTION>
Price
--------------------
Quarter High Low Dividends
-----------------------------------------------------------------
<S> <C> <C> <C>
March 31, 1997 26.50 20.50 0.13
December 31, 1996 28.00 21.00 0.13
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
</TABLE>
Page 21
<PAGE> 22
PART II - OTHER INFORMATION
<TABLE>
<CAPTION>
<S> <C>
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
24 of this report are furnished as a part of this report.
(b) No Form 8-K has been filed during the first quarter of 1997.
</TABLE>
Page 22
<PAGE> 23
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: May 13, 1997 SIGNED: /s/ John E. Sircy
John E. Sircy
Executive Vice President
and Chief Operating Officer
Page 23
<PAGE> 24
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION PAGE
<S> <C> <C>
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 June 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 March 31, 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 March 31, 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.
27 Financial Data Schedule 25-26
** Denotes management contracts or compensatory plans or arrangements
required to be filed as exhibits to this Form 10-Q.
Page 24
<PAGE> 25
EXHIBIT 27
FINANCIAL DATA SCHEDULE
FOR
CBT CORPORATION
For the Period Ended
March 31, 1997
Page 25
<PAGE> 26
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<CURRENCY> US CURRENCY
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<EXCHANGE-RATE> 1
<CASH> 35011
<INT-BEARING-DEPOSITS> 100
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 55205
<INVESTMENTS-CARRYING> 171188
<INVESTMENTS-MARKET> 169457
<LOANS> 682333
<ALLOWANCE> 8707
<TOTAL-ASSETS> 965058
<DEPOSITS> 703053
<SHORT-TERM> 118253
<LIABILITIES-OTHER> 12160
<LONG-TERM> 20326
0
0
<COMMON> 4100
<OTHER-SE> 107166
<TOTAL-LIABILITIES-AND-EQUITY> 965058
<INTEREST-LOAN> 16368
<INTEREST-INVEST> 3437
<INTEREST-OTHER> 69
<INTEREST-TOTAL> 19874
<INTEREST-DEPOSIT> 7814
<INTEREST-EXPENSE> 9523
<INTEREST-INCOME-NET> 10351
<LOAN-LOSSES> 930
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 7462
<INCOME-PRETAX> 4431
<INCOME-PRE-EXTRAORDINARY> 4431
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3131
<EPS-PRIMARY> .40
<EPS-DILUTED> .40
<YIELD-ACTUAL> 4.81
<LOANS-NON> 5832
<LOANS-PAST> 1684
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 8243
<CHARGE-OFFS> 571
<RECOVERIES> 133
<ALLOWANCE-CLOSE> 8707
<ALLOWANCE-DOMESTIC> 8707
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
