SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________
Commission File Number: 0-18533
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
(Exact name of registrant as specified in its charter)
___New York __16-1168175
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
50 North Main Street Box 129 Castile NY 14427
(Address of principal executive offices) (Zip Code)
(716) 493-2576
Registrant's telephone number, including area code)
____________________________________________________________
(Former name, address, fiscal year, if changed)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(b) 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.
Y Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding as of July 31, 1996
Common Stock, $1.00 per share 913,770 shares
Transitional Small Business Disclosure Format (Check One):
Yes__ No X
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
INDEX
Page
PART I Financial Information
Item 1. Financial Statements
Consolidated Statement of Condition
June 30, 1996(Unaudited) and
December 31, 1995(Unaudited) 3
Consolidated Statement of Income (Unaudited)
Three Months and Six Months Ended June 30, 1996
and 1995, respectively 4
Consolidated Statement of Cash Flows (Unaudited)
Six Months Ended June 30,1996 and 1995,
respectively 5
Notes to Consolidated Financial Information 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
PART II Other Information 14
Item 6 Exhibits and Reports on Form 8-K 15
Exhibit 11 16
Signatures 17
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
CONSOLIDATED STATEMENT OF CONDITION
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
Assets
<S> <C> <C>
Cash and due from banks $9,901,233 $7,752,080
Fed funds sold 300,000 2,050,000
Investment securities:
Available for sale, 39,461,591 38,200,900
Held to maturity 39,936,195 44,406,441
Loans 134,855,170 133,479,088
Less-Allowance for possible loan losses (1,750,107) (1,716,300)
Net Loans $133,105,063 $131,762,788
Accrued interest receivable 2,037,045 1,949,266
Premises and equipment, net 5,129,464 4,998,697
Other assets 2,613,817 2,373,972
Total Assets $232,484,408 $233,494,144
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing $24,509,299 $26,443,148
Interest bearing 176,953,169 177,370,635
Total deposits $201,462,468 $203,813,783
Securities sold under agreements to purchase 2,191,635 1,767,984
Accrued interest payable 755,505 747,351
Accrued taxes and other liabilities 716,215 832,126
Advances from Federal Home Loan Bank 3,275,446 3,507,020
Total Liabilities $208,401,269 $210,668,264
Shareholders' equity:
Common stock, par value $1.00 per share
1,500,000 shares authorized, 915,320 and 899,970
shares issued $915,320 $899,970
Capital surplus 10,505,724 10,206,024
Retained earnings 12,878,344 11,778,164
Unrealized gain on securities 36,846 307,400
Employee stock ownership plan loan payable (253,095) (365,678)
Total shareholders' equity $24,083,139 $22,825,880
Total Liabilities and Shareholders' Equity $232,484,408 $233,494,144
</TABLE>
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Interest income:
<S> <C> <C> <C> <C>
Interest and fees on loans $3,200,558 $3,232,602 $6,426,520 $6,264,024
Interest on investment securities
Taxable $926,029 888,704 1,864,293 1,709,072
Tax-Exempt $278,792 270,056 560,560 530,630
Interest on federal funds sold $83,500 108,814 151,842 196,187
Total interest income $4,488,879 $4,500,176 $9,003,215 $8,699,913
Interest on deposits $1,827,386 1,895,712 3,812,169 3,600,979
Net interest income $2,661,493 $2,604,464 $5,191,046 $5,098,934
Provision for possible loan $77,259 58,444 97,249 138,507
losses
Net interest income after
provision for possible loan
losses $2,584,234 $2,546,020 $5,093,797 $4,960,427
Other operating income:
Service charges on deposit
accounts $233,204 $222,624 $447,566 $433,505
Other charges and fees $18,806 25,123 43,643 45,730
Other operating income $32,461 18,664 47,788 44,794
Gains on sales of loans and
securities available for sale $13,221 6,594 13,221 9,559
Total other operating income $297,692 $273,005 $552,218 $533,588
Other operating expenses:
Salaries and employee benefits $931,235 $948,365 $1,855,842 $1,811,288
Occupancy expense $131,440 100,580 270,049 210,586
Printing and supplies $51,949 69,712 131,084 161,027
Equipment expense $156,833 119,064 321,686 266,551
FDIC assessment $28,166 99,306 43,490 200,315
Other non-detailed expenses $476,281 487,519 949,146 913,861
Total other operating expens$1,775,904 $1,824,546 $3,571,297 $3,563,628
Income before income taxes 1,106,022 994,479 2,074,718 1,930,387
Provision for income taxes $364,500 336,650 684,000 642,650
Net income $741,522 $657,829 $1,390,718 $1,287,737
Net income per common and
common equivalent share $0.75 $0.72 $1.41 $1.42
</TABLE>
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
Cash flows from operating activities:
<S> <C> <C>
Interest received $9,011,454 $7,602,547
Service charges, fees and other inc. received 538,997 524,029
Interest paid (3,820,323) (3,854,728)
Cash paid to suppliers and employees (3,051,581) (709,353)
Income taxes paid (652,000) (490,000)
Net cash provided by operating activities 2,026,547 3,072,495
Cash flows from investing activities:
Proceeds from sale of investments-AFS $2,027,500 $0
Proceeds from maturities of invest. 8,109,318 6,354,852
securities
Purchases of investment securities-HTM (5,400,888) (12,910,389)
Purchases of investment securities-AFS (1,880,173) 0
Net (increase) in loans (2,201,246) (6,722,109)
Proceeds from sale of loans 509,075 1,317,409
Expenditures for capital assets (394,576) (311,015)
Net cash used in investing activities 769,010 (12,271,252)
Cash flows from financing activities:
Net (decrease) increase in demand deposits,NOW
accounts and money market accounts 3,536,465 958,375
Net increase in time deposits (6,149,458) 11,825,492
Proceeds from current FHLB borrowings 0 540,511
Repayment FHLB borrowings (231,574) (211,699)
Exercise of warrants 254,400 0
Exercise of stock options 60,650 0
Increase in repos 423,651 259,087
Dividends paid (290,538) (197,276)
Net cash provided by financing activities (2,396,404) 13,174,490
Net increase in cash and cash equivalents 399,153 3,975,733
Cash and cash equivalents, beginning of year 9,802,080 11,864,350
Cash and cash equivalents, end of quarter $10,201,233 $15,840,083
<PAGE>
Reconciliation of net income to
net cash provided by operating activities:
Net income $1,390,718 $1,287,737
Adjustments to reconcile net income to
net cash provided by operating activities-
Depreciation 351,628 307,001
Provision for possible loan losses 97,249 138,507
(Gain) on sale of investments (12,774) 0
(Gain) on sale of loans (448) (9,559)
(Increase) in interest receivable (87,779) (211,118)
Amortization of bond premium 141,224 147,149
Accretion of bond discount (45,206) (33,397)
(Decrease) increase in other assets (541,058) 594,449
Increase in interest payable 8,154 253,749
Decrease in accrued taxes
and other liabilities 724,839 597,977
Net cash provided by operating activities $2,026,547 $3,072,495
</TABLE>
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
June 30, 1996
Note 1 Basis of Presentation
The unaudited interim financial information includes the accounts of
Letchworth Independent Bancshares Corporation and its subsidiary, The
Bank of Castile. The financial information has been prepared in
accordance with the Summary of Significant Accounting Policies as
outlined in the Company's Form 10-KSB for the year ended December 31,
1995 and, in the opinion of management contains all adjustments
necessary to present fairly the Company's financial position as of
June 30, 1996 and December 31, 1995, the results of its operations for
the three month and six month periods ended June 30, 1996 and 1995,
respectively, and its cash flows for the six month periods ended June
30, 1996 and 1995, respectively.
Certain amounts in the prior period financial statements have been
reclassified to conform to the current period presentation.
Note 2 Loans
Loans consist of the following:
June-30 December-31
1996 1995
(unaudited)
Agricultural loans $24,446,010 $25,168,552
Commercial and industrial 25,702,007 23,317,057
loans
Real estate loans:
Secured by 1 to 4 family
residential properties 43,665,662 41,120,730
Other 32,012,584 33,917,880
$75,678,246 $75,038,610
Consumer loans 9,028,907 9,954,869
$134,855,170 $133,479,088
An analysis of changes in the
allowance for possible loan losses
is as follows:
June-30 June-30
1996 1995
(unaudited) (unaudited)
Balance, beginning of year $1,716,319 $1,526,877
Provision, expense 97,249 138,507
Charge-offs 79,471 121,134
Recoveries 16,010 42,133
Balance, end of period $1,750,107 $1,586,383
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL INFORMATION, CONTINUED
Note 3 Investment Securities
The book and approximate market
value of investment securities
at June 30, 1996:
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
Amortized Cost Market Value Amortized Cost Market
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Available for Sale
U.S. Treasury securities and
obligations of U.S.Government
corporations and agencies $30,857,597 $30,983,328 $31,907,710 $32,380,800
State and political subdivision
obligations $1,052,473 $1,061,043 $1,054,794 $1,070,000
Mortgage-Backed Securities $6,673,459 $6,602,320 $4,086,984 $4,113,800
Federal Home Loan Bank stock $814,900 $814,900 $636,300 $636,300
$39,398,429 $39,461,591 $37,685,788 $38,200,900
Held to Maturity
U.S. Treasury securities and
obligations of U.S.Government
corporations and agencies $12,308,077 $12,456,284 $15,992,787 $16,483,900
State and political subdivision
obligations $21,587,354 $21,929,789 $21,674,732 $22,396,100
Mortgage-Backed Securities $6,040,764 $5,987,168 $6,738,922 $6,742,500
$39,936,195 $40,373,241 $44,406,441 $45,622,500
</TABLE>
Note 4 Earnings Per Share
Earnings per share are based on the weighted average number of common,
and when applicable, common equivalent shares outstanding during the
period.
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
June 30, 1996
Financial Condition
Total assets of Letchworth Independent Bancshares
Corporation (the "Company") were $232.5 million as of June
30, 1996, a decrease of $1.0 million, or .43%, below total
assets at December 31, 1995. Deposits, the Company's
primary source of funds, decreased $2.6 million, or 1.28%,
to $201.5 million at June 30, 1996. There are two primary
reasons for the decrease in deposits. First, the delay in
the passage of the New York State budget temporarily
withheld some funding from our school district customers.
Secondly, in an attempt to increase its net interest margin,
the Company made a conscious effort to be less aggressive in
bidding for municipal certificates of deposit.
Total loans outstanding as of June 30, 1996 increased by
$1.4 million, or 1.03%, over total loans at December 31,
1995. The total loans outstanding figure of $134.9 million
is net of loans sold. As of June 30, 1996, residential real
estate loans increased by $2.5 million or 6.19%;
agricultural loans decreased $.7 million or 2.87%;
commercial and industrial loans increased $ 2.4 million or
10.23%; consumer loans decreased $.9 million or 9.30%; and
other real estate loans decreased $1.9 million or 5.62%.
Consumer loans have been decreasing slowly over the past
several years, as a result of increased competition from non-
bank organizations and the Company's focus on different loan
products.
The Company's shareholders' equity increased to $24.08
million, an increase of 5.51% or $ 1.3 million from December
31, 1995. As of June 30, 1996, 13,850 warrants have been
exercised at $23 per share, or 6.93% of the original 200,000
warrants outstanding.
The Risk-based capital ratios are a very good indicator of
the Company's financial soundness. As of June 30, 1996, the
Company had a Tier 1 capital ratio of 16.86%, a total
capital ratio of 18.11%, and a Tier 1 leverage ratio of
9.96%. Each of these ratios compares favorably with the
regulatory minimum requirements of 4.00%, 8.00%, and 4.00%,
respectively.
"Potential problem loans" consist of loans which are
generally secured and not currently considered
nonperforming, but where information about possible credit
problems has caused management to have doubts as to the
ability of such borrowers to comply with present repayment
terms. As of June 30, 1996, the Company considers
$2,185,277 to be "potentially problem loans", as described
above. Historically, however, only a very small portion of
those loans have resulted in actual losses for the Company.
Loans, including impaired loans, are placed on non-accrual
status in accordance with policies established by
management. Loans are generally transferred to non-accrual
status when principal or interest payments become ninety
days past due. Any accrued but uncollected interest
previously recorded on such loans is reversed in the current
period and interest income is subsequently recognized only
when actually collected. Loans are returned to accrual
status when management determines that the circumstances
have improved to the extent that both principal and interest
are deemed collectible and there has been a sustained period
of repayment performance. The Company may continue to
accrue interest on loans past due ninety days or more which
are well secured and in the process of collection. The
following table summarized the Company's non-performing
loans at the dates indicated.
June 30,
1996 1995 1994
Non-accruing loans 558,624 80,570 63,185
Accruing loans past due 90 days or more 134,099 79,457 458,026
Renegotiated loans 0 0 0
The average balance of impaired loans during the first six
months of 1996 was approximately $482,248. At June 30,
1996, the balance of impaired loans and related reserve
against that balance was $377,847 and $106,037,
respectively. Interest income recognized on impaired loans
and interest income recognized on a cash basis was not
significant.
Liquidity measures the ability of the Company to meet its
maturing obligations and existing commitments, to withstand
fluctuations in deposit levels, to fund its operations, and
to provide for customer credit needs. At June 30, 1996, the
Company sold $.3 million in federal funds. These funds are
available on one day notice to meet upcoming obligations.
However, due to the low return available on federal funds
the Company has attempted to minimize the level of federal
funds while maintaining adequate daily liquidity. Pursuing
this aggressive cash policy will may cause the Company to
experience a negative excess cash position at certain times.
During the last two weeks in June, the Company was in a
borrowing position for federal funds. In the view of
management, the primary factor for this position was the
delay in the passage of the New York State budget which, in
turn, caused anticipated cash inflows from our school
district customers to be delayed. Consequently, the Company
sold two lower yielding US Treasury securities from the
available for sale portfolio, adding about $2.0 million to
the cash position. When there is a need to borrow
occasionally, the Company accesses lines of credit available
with M & T Bank, the Federal Home Loan Bank of New York, and
the Federal Reserve Bank of New York. Specifically, during
the six months ended June 30, 1996, these lines were
utilized for twenty-two days in order to access additional
liquidity. As additional sources of liquidity, the Company
may also sell loans on the secondary market or participate
large commercial loans with other financial institutions.
Results of Operations - Three Months Ended June 30, 1996
Compared to Three Months Ended June 30, 1995
Net income of $741,522 for the three months ended June 30,
1996 represents an increase of $83,693, or 12.72%, over the
$657,829 earned during the same period ended June 30, 1995.
Net income per common share was $.75 for the three months
ended June 30, 1996 compared to $.72 for the same period in
1995.
Net interest income was $2.7 million for the three months
ended June 30, 1996, up 2.19% from the $2.6 million earned
during the three months ended June 30, 1995. Lower interest
rates on interest earning assets was more than offset by
increased volume over the second quarter of 1995. Interest
expense on deposits decreased by $68,326.
The provision for possible loan losses, the charge to
earnings for potential credit losses associated with lending
activities, was $77,259 for the three months ended June 30,
1996, up 32.2% from the $58,544 provision recorded during
the three months ended June 30, 1995. Net charge-offs were
$47,221 in the second quarter of 1996, as compared to
$23,075 for the same period last year.
Other operating expense for the three month period ended
June 30, 1996 was $1,775,904, a decrease of 2.67% from the
$1,824,546 recorded for the same period in the prior year.
Increases in this category occurred in the following areas:
occupancy expense increased by $30,860 or 30.68%;and
equipment expense increased by $37,769 or 31.72%. In
addition, printing and supplies expense decreased by
$17,763; salaries and employee benefits decreased by
$17,130; and FDIC assessment decreased by $71,140.
Results of Operations - Six Months Ended June 30, 1996
Compared to Six Months Ended June 30, 1995
Net income of $1,390,718 for the six months ended June 30,
1996 represents an increase of $102,981, or 8.00%, over the
$1,287,737 earned during the same period ended June 30,
1995. Net income per common share was $1.41 for the six
months ended June 30, 1996 compared to $1.42 for the same
period in 1995. This decrease was primarily due to the
dilutive effect of outstanding options and warrants on the
earnings per share calculation.
Net interest income increased to $5.2 million for the six
months ended June 30, 1996, up 1.81% from the $5.1 million
earned during the six months ended June 30, 1995. Lower
interest rates on interest earning assets was more than
offset by increased volume for the second quarter of 1996,
when compared to the second quarter of 1995. Interest
expense on deposits also increased by $.2 million as deposit
volumes more than offset the general downward trend in
interest rates.
The provision for possible loan losses, the charge to
earnings for potential credit losses associated with lending
activities, was $97,249 for the six months ended June 30,
1996, down 30.0% from the $138,507 provision recorded during
the six months ended June 30, 1995. Net charge offs were
$63,461 in the first half of 1996, as compared to $79,001
for the same period last year. Management conducts a
periodic evaluation which assigns risk weights for
individual loans and different classes of loan groups in
determining the adequacy of the reserve. Regulatory
examination, historical gross loan losses, an assessment of
prevailing and anticipated economic conditions and other
relevant factors are used in this analysis. Management of
the Company believes this analysis indicates that the level
of the loan loss reserve is adequate to absorb any potential
losses within the loan portfolio. The allowance for
possible loan losses of the Company at June 30, 1996 was
$1,750,107 or 1.298% of total loans and is up 1.97% or
$33,807 from the allowance at December 31, 1995.
Other operating expense for the six month period ended June
30, 1996 was $3,571,297, an increase of .22% over the
$3,563,628 recorded for the same period in the prior year.
Increases in this category occurred in the following areas:
salaries and employee benefits expense increased by $44,554
or 2.46%; occupancy expense increased by $59,463 or 28.24%;
equipment expense increased by $55,135 or 20.68%. All
salary increases throughout the organization took effect on
January 1st of this year. This represents a change in
practice from previous years, when such increases took place
throughout the year. The increase in occupancy expense
results mainly from the major addition to the operations
center building. In addition, printing and supplies expense
decreased by $29,943 in the first half of 1996, compared to
the first half of 1995, while the FDIC assessment dropped by
$156,825 during the same period. This decrease in the FDIC
premium during the later part of 1995 is attributed to the
industry wide decrease in the premium rate for deposits
insured under the "BIF". Virtually all of the 1996
assessment is attributed to deposits covered under the
"SAIF" fund that were acquired in connection with the 1992
purchase of certain deposits from Anchor Savings Bank.
New Accounting Pronouncements
Other Events of Significance:
Letchworth Independent Bancshares Corporation has
implemented a major core software system upgrade during the
second quarter of 1996. This enhancement is expected to
generate increased operating efficiency. Also, the Company
will install an imaging system during the third quarter of
1996. This equipment is expected to greatly increase the
Company's item processing efficiency and cost effectiveness,
as well as provide exciting improvements in customer service
and product delivery. Per the Company's 1996 Strategic
Plan, various non bank opportunities including financial,
trust and insurance related businesses are being considered.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders fo the
Company which was held on May 9, 1996, James H. Van Arsdale,
III was re-elected as a director of the Company for a term
of three (3) years, and Price Waterhouse LLP was elected as
independent accountants of the Company for the year ending
December 31, 1996. Of the total of 905,470 shares of common
stock outstanding and eligible to vote at the Annual
Meeting, 758,135 shares were voted in favor of the election
of Mr. Van Arsdale, and the authority to vote 2,970 shares
was withheld for Mr Van Arsdale. In addition, 755,391
shares of common stock were voted in favor of the election
of Price Waterhouse LLP as independent accountants of the
Company, 175 shares of common stock were voted against such
election, and 5,539 shares of common stock abstained from
the vote.
<PAGE>
ITEM 6. Exhibits and Reports on From 8-K
(a) Index to Exhibits
3(a) Certificate of Incorporation of Registrant filed by the New
York Department of State on July 17, 1981, incorporated by reference
to the Registrant's Registration Statement on Form S-18 (Reg. No. 33-
31149-NY), filed with the commission on September 2, 1989 and wherein
such Exhibit is designed Exhibit 3(a).
3(b) Certificate of Amendment of Certificate of Incorporation of
Registrant filed by the New York Department of State on July 26, 1989,
incorporated by reference to the Registrant's Registration Statement
on Form S-18 (Reg. No. 33-31149-NY), filed with the Commission on
September 2, 1989, and wherein such Exhibit is designated Exhibit
3(b).
3(c) Certificate of Amendment to Certificate of Incorporation of
Registrant filed by the New York Department of State on May 2, 1990,
incorporated by reference to the Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1990 and filed with the Commission
on August 9, 1990, and wherein such Exhibit is designed Exhibit (4)b.
3(d) Bylaws of Registrant, as amended by the stockholders of the
Registrant at a special meeting of stockholders on July 11, 1989,
incorporated by reference to the Registrant's Registration Statement
on From S-18 (Reg. No. 33-31149-NY), filed with the Commission on
September 2, 1989 and wherein such Exhibit is designated Exhibit 3(c).
4(a) Form of Common Stock Certificate of Registrant, incorporated by
reference to the Registrant's Amendment No. 1 to Form s-18
Registration Statement (Reg. No. 33-31149-NY), filed with the
Commission on October 31, 1989, and wherein such Exhibit is designated
Exhibit 4.
4(b) Letchworth Independent Bancshares Corporation Stock Option Plan
of 1990 and form of Stock Option Agreement, incorporated by reference
to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1990 and filed with the Commission on August 9, 1990,
and wherein such Exhibit is designated Exhibit 4.
4(c) Form of Warrant of Registrant, and Warrant Agreement, dated as
of September 27, 1993, by and between Registrant and Mellon Securities
Trust Company, incorporated by reference to the registrants annual
report on Form 10KSB for the year ended 12/31/94, filed with the
Commission on March 31, 1995, and therein such Exhibit is designated
Exhibit 4(c).
11 Computation of Earnings Per Share for the quarter ended June
30, 1996 is presented on Exhibit 11 of this Report, Form 10-QSB.
(b). The Registrant did not file any current reports on Form 8-K
during the quarter ended June 30, 1996.
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
COMPUTATION OF EARNINGS PER SHARE
June 30, 1996
Exhibit 11:
Six Months Ended
June 30, 1996
Net income $1,390,718
Add: Adjustment due to assumed interest
savings on debt reduction 1,698
Adjusted Net Income $1,392,416
Weighted average number of shares
outstanding 901,245
Add: Common stock equivalent shares due
to assumed exercise of options and warrants 89,634
Less: ESOP shares accounted for in accordance
with SOP 93-6 not committed to be released (14,015)
Adjusted common and common equivalent shares 985,864
Net Income per common and common equivalent
share $ 1.41
Three Months Ended
June 30, 1996
Net income $741,522
Add: Adjustment due to assumed interest
savings on debt reduction 0
Adjusted Net Income $741,522
Weighted average number of shares
outstanding 915,320
Add: Common stock equivalent shares due
to assumed exercise of options and warrants 84,344
Less: ESOP shares accounted for in accordance
with SOP 93-6 not committed to be released (13,140)
Adjusted common and common equivalent shares 985,204
Net Income per common and common equivalent
share $ .75
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
Date_08/09/96 /s/ James W. Fulmer
James W. Fulmer
President & Chief Executive Officer
Date_08/09/96 /s/ Steven C. Lockwood
Steven C. Lockwood
Treasurer & Chief Financial Officer
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