<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1996 Commission File Number 0-16187
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FWB BANCORPORATION
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(Exact name of small business issuer as specified in its charter)
Maryland 52-1332050
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(State or other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1800 Rockville Pike, Rockville, Maryland 20852
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(Address of principal executive offices)
(301) 770-1300
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(Issuer's telephone number, including area code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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
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At July 31, 1996, there were 3,258,833 shares of Common Stock, Par Value
$.10 per share outstanding.
Transitional Small Business Disclosure Format
YES NO X
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TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION PAGE
- - ------------------------------ ----
Item 1 - Consolidated Financial Statements
Consolidated Balance Sheets................................. 1
Consolidated Statements of Income (Loss).................... 2
Consolidated Statements of Changes in Stockholders' Equity.. 3
Consolidated Statements of Changes in Cash Flow............. 4
Notes to Consolidated Financial Statements.................. 5
Item 2 - Management's Discussion and Analysis
Financial Condition......................................... 5-9
Results of Operations....................................... 9-11
PART II - OTHER INFORMATION
- - ---------------------------
Items 1 - 5...................................................... 12
Item 6 - Exhibits and Reports on Form 8-K........................ 12-13
SIGNATURES....................................................... 14
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- - ------------------------------------------
PART I - FINANCIAL INFORMATION
Item 1 - Consolidated Financial Statements
- - ------------------------------------------
FWB BANCORPORATION
CONSOLIDATED BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
(unaudited) (audited)
<S> <C> <C>
ASSETS
Cash and due from banks $1,739 $1,557
Time deposits with banks --- 95
Federal funds sold 705 ---
Investment securities:
Available for sale - at fair value 3,209 3,073
Held to maturity - at amortized cost 4,996 4,953
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Total investment securities 8,205 8,026
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Loans 32,219 29,812
Less allowance for loan losses (879) (748)
Loans - net 31,340 29,064
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Property and equipment 399 351
Foreclosed real estate 1,052 1,052
Accrued interest receivable 372 316
Other assets 308 217
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TOTAL ASSETS $44,120 $40,678
============ ============
LIABILITIES
Non-interest bearing deposits $7,960 $7,948
Interest bearing deposits 29,940 28,722
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Total deposits 37,900 36,670
Advances from the Federal Home Loan Bank 2,200 ---
Federal funds purchased and securities sold under
agreements to repurchase --- 59
Accrued expenses and other liabilities 231 209
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TOTAL LIABILITIES 40,331 36,938
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STOCKHOLDERS' EQUITY
Common stock - $.10 par value, shares authorized
7,500,000; shares outstanding 3,258,833 and
3,258,833, respectively 326 326
Additional paid-in capital 8,476 8,476
Accumulated deficit (4,773) (4,805)
Net unrealized holding loss on investment securities (240) (257)
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Total stockholders' equity 3,789 3,740
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TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $44,120 $40,678
============ ============
</TABLE>
1
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FWB BANCORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the Six Second Quarter
Months Ended Ended
June 30, June 30,
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $1,527 $1,447 $755 $742
Interest on investment securities:
U. S. Government, its agencies, and sponsored entities 188 223 95 110
Other investments 8 --- 8 ---
Interest on federal funds sold 22 66 19 46
------ ------ ------ ------
Total interest income 1,745 1,736 877 898
------ ------ ------ ------
INTEREST EXPENSE:
Interest on certificates of deposit of $100,000 or more 43 56 22 41
Interest on other deposits 488 481 249 253
------ ------ ------ ------
531 537 271 294
Interest on Federal Home Loan Bank advances 48 --- 30 ---
Interest on other borrowed funds 8 2 1 ---
------ ------ ------ ------
Total interest expense 587 539 302 294
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NET INTEREST INCOME 1,158 1,197 575 604
PROVISION (RECOVERY) FOR LOAN LOSSES --- (30) --- ---
------ ------ ------ ------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 1,158 1,227 575 604
------ ------ ------ ------
NON-INTEREST INCOME:
Service charges on deposit accounts 175 115 101 56
Other income 65 74 35 27
------ ------ ------ ------
Total non-interest income 240 189 136 83
------ ------ ------ ------
NON-INTEREST EXPENSE:
Salaries and employee benefits 624 637 303 316
Occupancy and equipment expense 278 235 147 117
Data processing services 127 98 64 51
FDIC insurance 5 45 2 22
Insurance 35 18 19 8
Legal fees 88 94 45 57
Other real estate owned expense 17 41 11 7
Other expenses 189 137 101 69
------ ------ ------ ------
Total non-interest expense 1,363 1,305 692 647
------ ------ ------ ------
INCOME (LOSS) BEFORE INCOME TAXES 35 111 19 40
APPLICABLE INCOME TAX 3 --- 2 ---
------ ------ ------ ------
NET INCOME (LOSS) $32 $111 $17 $40
====== ====== ====== ======
EARNINGS PER COMMON SHARE: $0.02 $0.07 $0.01 $0.02
</TABLE>
2
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FWB BANCORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Additional Unrealized Total
Common Paid-In Accumulated Holding (Loss) Stockholders'
Stock Capital (Deficit) on Securities Equity
------- ---------- ---------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $ 318 $ 8,331 $ (5,081) $ (463) $ 3,105
Net income for the three months
ended June 30, 1995 --- --- 111 --- 111
Issuance of common stock at $2.00 per share 6 113 --- --- 119
Net change in unrealized loss on
investment securities --- --- --- 97 97
------- ---------- ---------- ------------- -----------
Balance at June 30, 1995 $ 324 $ 8,444 $ (4,970) $ (366) $ 3,432
======= ========== ========== ============= ============
Balance at December 31, 1995 $ 326 $ 8,476 $ (4,805) $ (257) $ 3,740
Net income for the three months
ended June 30, 1996 --- --- 32 --- 32
Net change in unrealized loss on
investment securities --- --- --- 17 17
------- ---------- ---------- -------------- -------------
Balance at June 30, 1996 $ 326 $ 8,476 $ (4,773) $ (240) $ 3,789
======= ========== ========== ============== ==============
</TABLE>
3
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FWB BANCORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For Six Months Ended
June 30
1996 1995
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $32 $111
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 51 50
Accretion and amortization of securities (7) (5)
Provision for loan losses --- (30)
Other real estate owned - write downs --- 30
Net changes in:
Accrued interest receivable (56) 122
Accounts receivable 3 27
Other assets (93) (64)
Accrued expenses and other liabilities 22 45
Other - net 196 65
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Net cash provided by operating activities 148 351
---- ----
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturity of time deposit 95 ---
Net increase in federal funds sold (705) (2,761)
Purchases of available for sale securities (407) (1,248)
Purchases of held to maturity securities (500) ---
Proceeds from maturities/principal payments on available for sale securities --- 50
Proceeds from maturities/principal payments on held to maturity securities 500 ---
Proceeds from sale of available for sale securities 250 4,000
Net increase in loans originated (2,471) (3,151)
Purchases of loans --- 167
Proceeds from sale of participation loans --- 293
Purchases of property and equipment (99) (68)
Net cash used by investing activities (3,337) (2,718)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 1,230 3,933
Net decrease in federal funds purchased and
securities sold under agreements to repurchase (59) (1,352)
Net increase in advances from Federal Home
Loan Bank 2,200 ---
Proceeds from issuance of common stock --- 119
---- ----
Net cash provided by financing activities 3,371 2,700
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NET DECREASE IN CASH AND CASH EQUIVALENTS 182 333
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,557 1,567
----- -----
CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,739 $1,900
====== ======
Supplemental disclosures:
Interest payments $565 $487
Income tax payments 3 ---
Noncash investing and financing activities:
Unrealized gain (loss) on investment securities 14 (366)
</TABLE>
4
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Management is responsible for the financial statements which have been
prepared in accordance with generally accepted accounting principles. The
financial statements contained herein, except for the financial statements
as of December 31, 1995, are unaudited. In management's opinion, the
financial statements present fairly the financial condition of the
Corporation and its subsidiary at June 30, 1995 and June 30, 1996, and all
adjustments necessary to fairly state the results of operations and
financial condition are reflected and that such adjustments are of a normal
recurring nature. The results of operations presented for the three and
six months ended June 30, 1996 are not necessarily indicative of the
results of operations to be expected for the remainder of the year.
The Corporation and its wholly owned Maryland chartered bank subsidiary,
FWB Bank, Rockville, Maryland (the "Bank") entered into a Purchase and
Assumption Agreement (the "Agreement") dated as of April 10, 1996, with
First Commonwealth Financial Corp ("FCFC") and its wholly owned federal
savings bank subsidiary, First Commonwealth Savings Bank FSB, Alexandria,
Virginia ("FSB"), pursuant to which the Bank will acquire certain loans and
assume certain deposit liabilities relating to the Alexandria, Virginia
branch of FSB (the "Branch"), and the corporation will purchase certain
real and personal property relating to the Branch. In connection with, and
contingent upon, the consummation of the Agreement, FWB plans to sell
666,667 to 766,667 newly issued shares of common stock, par value $.10 per
share, in a private placement offering to a limited number of accredited
investors, at a price of $3.00 per share. The Agreement was amended as of
July 1, 1996, to provide for the payment by FCFC or FSB of certain expenses
of the Corporation and the Bank, to eliminate provisions that had called
for the issuance of preferred stock of the Bank and warrants to acquire
common stock of the Corporation to FCFC, and to provide that consummation
of the transactions are conditioned upon the Corporation obtaining
extensions of credit meeting certain criteria. The Agreement and the
transactions contemplated thereby are subject to numerous conditions,
including regulatory approval. Assuming the satisfaction of all conditions
to each party's obligation to consummation, it is anticipated that the
transactions contemplated by the Agreement will become effective in the
third quarter of 1996. As of April 10, 1996, the aggregate amount of
deposits to be assumed was approximately $66.1 million, and the aggregate
principal amount of loans to be acquired was approximately $39.7 million,
subject in each case to adjustment in accordance with the provisions of the
Agreement.
5
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Item 2 - Management's Discussion and Analysis
FINANCIAL CONDITION
FWB Bancorporation's (the "Corporation") total assets at June 30, 1996 of
$44,120,000 reflected an increase of $3,442,000 or 8.46% from December 31,
1995. This increase resulted primarily from increased loan demand which
was funded by a fixed rate advance from the Federal Home Loan Bank of
Atlanta in the amount of $2,200,000 and growth in deposits of $1,230,000.
The growth in deposits consists primarily of growth in transaction
accounts.
The Corporation's Stockholders' Equity of $3,789,000 at June 30, 1996
reflected an increase of $49,000 or 1.31% from December 31, 1995. The
increase is attributable primarily to earnings from operations of $32,000.
See "Stockholders' Equity of the Corporation" below.
Total loans of the Corporation's wholly owned financial institution
subsidiary, FWB Bank, (the "Bank") at June 30, 1996 of $32,219,000
reflected an increase of $2,276,000 or 7.83% from December 31, 1995. This
increase consists primarily of loans made to small and medium sized
businesses, the Bank's primary target market.
Total deposits of the Bank at June 30, 1996 of $37,900,000 reflected an
increase of $1,230,000 or 3.35% from December 1995. This increase consists
primarily of an increase in interest bearing transaction account deposits
of $1,114,000 at June 30 1996 compared to December 31, 1995. At June 30,
1996, non-interest bearing deposits increased slightly from year end 1995
and are approximately 21% of total deposits.
Liquidity. The Bank's liquidity position, those assets invested in cash,
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federal funds, and securities available for sale, totalling $5,233,000,
reflected an increase of $603,000 from December 31, 1995. This increase
consists primarily of an increase in federal funds sold of $705,000. The
Bank also purchased $338,000 in shares of stock of the Federal Home Loan
Bank of Atlanta ("FHLB") in 1996 in connection with the Bank's membership
in the FHLB and advances for which the Bank has been approved.
Funds available through the Bank's sources of short term borrowing, asset
maturities, and available-for-sale securities are considered adequate to
meet current needs. However, management continues to monitor the Bank's
asset and liability mix to ensure that adequate liquidity is maintained.
The Bank's loan to deposit ratio was 85.01% at June 30, 1996 compared to
81.30% at December 31, 1995.
Investment Activity. The Corporation invests in various types of liquid
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assets, including United States Treasury obligations, securities of federal
government agencies and government sponsored entities, certain certificates
of deposit, federal funds, and other qualifying liquid investments. In
1996, one floating rate security
6
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issued by a government sponsored entity in the amount of $500,000 and one
fixed rate Treasury bond in the amount of $250,000 matured. A fixed rate
callable security was purchased at par value, $500,000 in the first quarter
of 1996. In July, the Bank purchased another fixed rate callable security
at par value of $500,000 which will settle in August. These transactions
were the result of an evaluation of short term liquidity needs and current
yields.
Allowance for Loan Losses. The allowance for loan losses at June 30, 1996
--------------------------
was $879,000 or 2.73% of total loans outstanding, compared to $748,000 or
2.51% at December 31, 1995. In the period ended June 30, 1996, there were
$62,000 in charge-offs including a $22,000 write down of a non-accrual loan
to the current fair value of the collateral. Recoveries in the period
ended June 30, 1996 totalled $195,000 including proceeds from a prejudgment
attachment of an account pledged as collateral for a loan charged off in a
prior year in the amount of $121,000. Net recoveries in the period ended
June 30, 1996 were $133,000 compared to net recoveries of $36,000 in the
period ended June 30, 1995. Although the allowance for loan losses at June
30, 1996 increased since December 31, 1995, non-performing loans increased
$837,000 to $1,302,000 at June 30, 1996 from $465,000 at December 31, 1995.
This increase is attributable to an increase in loans delinquent 90 days or
more in the amount of $882,000 in the period ended June 30, 1996. See
"Non-performing Loans and Assets" below. At June 30, 1996, the allowance
for loan losses was 67.51% of non-performing loans compared to 160.86% at
December 31, 1995. In management's opinion, the allowance for loan losses
as of June 30, 1996 is adequate to cover potential losses that can be
anticipated at this time based on current risks and knowledge of the
portfolio.
As a result of management's evaluation of the adequacy of the allowance for
loan losses, a reduction of $35,000 of the allowance through the provision
for loan losses was approved in July 1996. The resulting allowance for
loan losses is expected to be 2.62% of loans outstanding.
Non-performing Loans and Assets. The Bank's non-performing assets
-------------------------------
totalling $2,454,000 consist of loans delinquent 90 days or more, non-
accrual loans, restructured loans, other real estate owned ("OREO"), and
other assets. The percentage of non-performing assets to total assets
increased to 5.57% at June 30, 1996 from 3.98% at December 31, 1995. This
increase is attributable to an increase in loans delinquent 90 days or more
of $882,000 at June 30, 1996. In July 1996, one property classified as
OREO in the amount of $77,000 was sold for $41,000. Management intends to
continue its efforts to reduce non-performing assets through future sales
of OREO and other assets and upgrading of non-performing loans.
Non-performing loans totalled $1,302,000 at June 30, 1996 compared to
$465,000 at December 31, 1995, an increase of $837,000 or 180%. Non-
performing loans at June 30, 1996 consist of loans delinquent 90 days or
more totalling $882,000, one loan in non-accrual status in the amount of
$55,000, and one restructured loan in the amount of $365,000. This
restructured loan has been
7
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renegotiated and is currently performing within its new terms. The
percentage of non-performing loans to total loans increased to 4.04% at
June 30, 1996 compared to 1.56% at December 31, 1995.
Of the loans totalling $882,000 which were delinquent 90 days or more as of
June 30, 1996, $90,000 is current as of July 31, 1996. The balance
consists primarily of a residential construction loan in the amount of
$648,000 made to a builder to finance the sale of a foreclosed property of
the Bank. This loan is collateralized by lots on which single family homes
will be built. A specific reserve for this loan has been established.
At June 30, 1996, OREO, net of valuation reserve, was $1,052,000, which is
equal to the amount of net OREO at December 31, 1995. This amount includes
five properties. There is a valuation reserve in the amount of $30,000
which was established in the first quarter of 1995 for one property as a
result of an updated appraisal. This property is currently generating
rental income on a monthly basis. In addition, the lease agreement
contains a purchase option at a price significantly above the Bank's
carrying value. It is management's belief that the property will be sold
for the option price at the end of the lease. Generally, the Bank
evaluates the fair value of each property owned annually. These
evaluations may be appraisals or other market studies. At June 30, 1996,
management believes the carrying amounts for OREO properties approximate
fair value. There were no additions to OREO in the current period.
In July 1996 one property was sold for approximately $35,000 less than its
carrying amount. This property in the amount of $77,000 has been
classified as OREO since July 1992. The purchaser is the owner of the
adjacent property and agreed to purchase with cash. Therefore, management
chose to reduce its holding of non-performing assets by selling this
property.
Non-performing assets also include an asset in the amount of $100,000 which
represents the Bank's contractual interest in sales proceeds from a
property which is owned by an affiliate of the Bank as a result of
foreclosure. A significant portion of this asset was sold as of July 31,
1995. The portion which continues to be held as other assets in the amount
of $100,000 remains available for sale.
Stockholders' Equity. Stockholders' equity of $3,789,000 at June 30, 1996
---------------------
increased $49,000 or 1.31% from December 31, 1995. The increase in equity
since December 31, 1995 includes year-to-date earnings from operations in
the amount of $32,000. Also included in stockholders' equity at June 30,
1996 is an unrealized holding gain of $2,000 for securities available for
sale compared to an unrealized holding gain of $32,000 at December 31, 1995
and $243,000 of unamortized loss on securities held to maturity compared to
$289,000 at December 31, 1995. The unamortized loss on securities held to
maturity relates to the transfer of securities from the available for sale
portfolio to the held to maturity portfolio in 1994. This unrealized loss
is being amortized over the remaining life of the securities as an
adjustment of yield.
8
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A private placement offering was initiated in May 1996 in connection with
the consummation of the acquisition of assets and assumption of deposit
liabilities discussed above.
Capital Adequacy and Regulatory Requirements. At June 30, 1996, the Bank's
--------------------------------------------
ratio of Tier I capital to total average assets equalled 8.94%, which
exceeded the minimum leverage capital ratio of 4% by 4.94%.
At June 30, 1996, the Bank's Tier I capital to risk-weighted assets ratio
was 12.09% which exceeded the minimum required ratio of 4% by 8.09%. The
Bank's total capital to risk-weighted assets ratio at June 30, 1996 was
13.34% which exceeded the minimum required ratio of 8% by 5.34%.
RESULTS OF OPERATIONS
For the six months ended June 30, 1996, the Corporation had net income of
$35,000 before taxes of $3,000 compared to net income from the
corresponding period in 1995 of $111,000 a decrease of $76,000 or 68.47%.
The decrease is attributable to a decrease in net interest income of
$39,000 and an increase in noninterest expense of $58,000.
The earnings per share were $0.02 for the six months ended June 30, 1996,
compared to $0.07 per share for the corresponding period in 1995.
Net Interest Income. Net interest income is the difference between
-------------------
interest income on earning assets and interest expense on interest bearing
deposits and other borrowings. Net interest income for the six month
period ended June 30, 1996 of $1,158,000 reflected a decrease of $39,000 or
3.26% compared to the corresponding period in 1995. Interest income for
the six month period ended June 30, 1996 was $1,745,000, an increase of
$9,000 or .52% from the same period in 1995. Interest and fees on loans
was $1,527,000 for the period ended June 30, 1996 reflected an increase of
$80,000 or 5.53% compared to the corresponding period of 1995. This
increase was primarily due to an increase in average loans outstanding of
$1,557,000 at June 30, 1996 compared to June 30, 1995. Interest income on
investment securities for the six month period ended June 30, 1996 of
$188,000 reflected a decrease of $35,000 or 15.70% compared to the
corresponding period in 1995. This decrease is primarily the result of the
repricing of floating rate securities in the investment portfolio. The
earnings on these securities will continue to be affected by changes in the
relationship of long term and short term rates. Interest expense of
$587,000 for the period ended June 30, 1996 reflected an increase $48,000
or 8.91% from the corresponding period in 1995. This includes a decrease
in interest expense on deposits of $6,000 and an increase of $54,000 in
interest expense on advances and other borrowed funds for the period ended
June 30, 1996 compared to the corresponding period of 1995. This is due
primarily to an increase in other borrowed funds in the form of an advance
from the FHLB. Interest expense on deposits of $271,000 in the quarter
ended June 30, 1996 reflects a decrease from the corresponding quarter in
1995 of $23,000 or 7.82% primarily due to a
9
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decrease in certificates of deposit of $100,000 or more. Since December of
1995, the Bank has increased deposits of transaction accounts as a result
of its marketing strategy to expand banking relationships to consumers.
These transaction account deposits have a lower interest cost to the Bank.
The average yield on interest earning assets for the six month period ended
June 30, 1996, was 8.74% compared to 9.06% for the six months ended June
30, 1995. The average cost of funds for the six months ended June 30,
1996, was 3.80% compared to 3.66% for the same period in 1995.
Additionally, the net interest margin was 5.80% for the period ended June
30, 1996 compared to 6.25% for the corresponding period in 1995.
Provision for Loan Losses. There was no provision for loan losses in the
-------------------------
period ended June 30, 1996. Although there has been an increase in non-
performing assets due to an increase in loans delinquent 90 days or more,
specific reserves have been established and the Bank considers the
allowance adequate at this time.
In July 1996, as a result of management's evaluation of the adequacy of the
Bank's allowance for loan losses, there has been a reduction of the
allowance through the provision in the amount of $35,000.
Noninterest Income. Noninterest income for the six month period ended June
------------------
30, 1996, was $240,000 compared to $189,000 for the six months ended June
30, 1995, an increase of $51,000 or 26.98%. This includes a decrease in
non-recurring other income of $9,000 and by an increase of $60,000 in
service charges on deposit accounts. This increase consists primarily of
an increase of $45,000 in the second quarter of 1996 compared to the
corresponding period of 1995.
Noninterest Expense. Noninterest expense for the period ended June 30,
-------------------
1996 of $1,363,000 reflected an increase of $58,000 or 4.44% compared to
the corresponding period of 1995. Expense for occupancy and equipment of
$278,000 increased $43,000 or 18.30% in the period ended June 30, 1996
compared to the corresponding period of 1995 as a result of increased
expenses associated with the relocation of the Germantown branch in the
fourth quarter of 1995 and the opening of the Bank's fourth branch in
downtown Bethesda, Maryland in May 1996. Data processing services expense
increased $29,000 or 20.59% in the period ended June 30, 1996 compared to
the same period of 1995 due to outsourcing of certain back office
functions. In addition, the Bank is taking advantage of advances in
technology available in order to improve its product line, service
delivery, and achieve other operating efficiencies. The Bank's expense for
FDIC insurance for the period ended June 30, 1996 of $5,000 decreased by
$41,000 or 88.89% compared to the same period in 1995. On August 8, 1995,
the FDIC voted to reduce the deposit insurance premium paid by most members
of the Bank Insurance Fund ("BIF") effective June 1, 1995. Therefore, the
Bank was eligible for a refund in the amount of $23,420 which it received
in September 1995. In addition, the Bank's FDIC insurance expense
continues to decrease due to its improved supervisory rating and well-
capitalized
10
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position. The Bank's current assessment rate is .03% of deposits. The FDIC
has established a process for raising or lowering all assessment rates for
BIF-insured institutions semi-annually if conditions warrant a change. The
Corporation's expense for other insurance for the period ended June 30,
1996 of $35,000 increased by $17,000 or 94.44% compared to the
corresponding period in 1995 due to increased coverage acquired for general
banking activities resulting from re-evaluation of the Bank's existing
coverage and reduced premiums due to its improved financial condition and
results of operations.
In July 1996, the Bank incurred an increase in other real estate owned
expense due to a loss on the sale of a property in the amount of $35,000.
Applicable Income Tax. Net operating loss carryforwards for the first six
---------------------
months of 1996 offset current tax expense except to the extent of the
effect of the Alternative Minimum Tax. Income tax expense posted in the
period ended June 30, 1996 in the amount of $3,000 includes $1,000 which
will be applied to tax liability for 1995 and $2,000 which will be applied
to tax liability for 1996.
11
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PART II - OTHER INFORMATION
Item 1 - Legal Proceedings N/A
Item 2 - Changes in Securities N/A
Item 3 - Defaults Upon Senior Securities N/A
Item 4 - Submission of Matters to a Vote of Security Holders N/A
The Annual Meeting of Stockholders of FWB Bancorporation (the
"Corporation") was held at FWB Bank, 1800 Rockville Pike, Rockville,
Maryland 20852, on April 10, 1996.
ELECTION OF DIRECTORS
The following persons were elected as Directors of the Corporation, to
serve for a period of one year.
NAME VOTES FOR VOTES WITHHELD
Wilma E. Bernstein 2,508,032 1,003
Abbey J. Butler 2,508,032 1,003
Steven K. Colliatie 2,507,730 1,305
Melvyn J. Estrin 2,508,032 1,003
Nella C. Manes 2,506,520 2,515
Avis Y. Pointer 2,507,004 2,031
Joan H. Schonholtz 2,506,520 2,515
Item 5 - Other Information N/A
Item 6 - Exhibits and Reports on Form 8-K
A. Exhibits
(11) Statement regarding computation of per share earnings:
Earnings per share have been computed based upon 3,258,833
shares, the weighted average number of shares outstanding
during the period ended June 30, 1996.
(27) Financial Data Schedule: Filed herewith.
B. Reports on Form 8-K
(b) Reports on Form 8-K. On April 18, 1996, the Corporation filed a
-------------------
report on Form 8-K, under Item 5 of that Form, reporting that the
Corporation and its wholly owned Maryland chartered bank subsidiary, FWB
Bank, Rockville, Maryland (the "Bank") had entered into a Purchase and
Assumption Agreement (the "Agreement"), dated as of April 10, 1996, with
First Commonwealth Financial Corp ("FCFC") and its wholly owned federal
savings bank subsidiary, First Commonwealth Savings Bank FSB,
Alexandria, Virginia ("FSB"), pursuant to which the Bank will acquire
certain loans and assume certain deposit liabilities relating to the
Alexandria, Virginia branch of FSB (the "Branch") and the Corporation
will purchase certain real and
12
<PAGE>
personal property relating to the Branch, and a related private
placement of Common Stock of the Corporation.
13
<PAGE>
SIGNATURES
----------
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
FWB BANCORPORATION
(Registrant)
Date: August 12, 1996
----------------------- -----------------------------------------
Steven K. Colliatie
President
Date: August 12, 1996
----------------------- -----------------------------------------
Barbara L. Martinez
Chief Financial Officer
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FORM
10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000719488
<NAME> FWB BANCORPORATION
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,739
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 705
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 3,209
<INVESTMENTS-CARRYING> 4,996
<INVESTMENTS-MARKET> 0<F1>
<LOANS> 32,219
<ALLOWANCE> 879
<TOTAL-ASSETS> 44,120
<DEPOSITS> 37,900
<SHORT-TERM> 2,200
<LIABILITIES-OTHER> 231
<LONG-TERM> 0
0
0
<COMMON> 326
<OTHER-SE> 3,463
<TOTAL-LIABILITIES-AND-EQUITY> 44,120
<INTEREST-LOAN> 1,527
<INTEREST-INVEST> 188
<INTEREST-OTHER> 30
<INTEREST-TOTAL> 1,745
<INTEREST-DEPOSIT> 531
<INTEREST-EXPENSE> 587
<INTEREST-INCOME-NET> 1,158
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,363
<INCOME-PRETAX> 35
<INCOME-PRE-EXTRAORDINARY> 35
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
<YIELD-ACTUAL> 5.80
<LOANS-NON> 55
<LOANS-PAST> 882
<LOANS-TROUBLED> 365
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 748
<CHARGE-OFFS> 62
<RECOVERIES> 195
<ALLOWANCE-CLOSE> 879<F2>
<ALLOWANCE-DOMESTIC> 101
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 778<F3>
<FN>
<F1>NOT BROKEN OUT IN QSB
<F2>ALLOWANCE FOR LOAN LOSS AT END OF PERIOD INCLUDES AN ADJUSTMENT OF INTEREST
RECOVERY POSTED TO THE ALLOWANCE IN ERROR.
<F3>ALL UNALLOCATED IS FOR DOMESTIC LOANS.
</FN>
</TABLE>
