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, 1997
( ) 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 25, 1997
Common Stock, $1.00 per share 964,422 shares
Transitional Small Business Disclosure Format (Check One):
Yes__ No X
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
INDEX
Page
PART I Financial Information
Item 1. Financial Statements
Consolidated Statement of Condition
June 30, 1997(Unaudited) and
December 31, 1996(Unaudited) 3
Consolidated Statement of Income (Unaudited)
Three Months and Six Months Ended June 30, 1997
and 1996, respectively 4
Consolidated Statement of Cash Flows (Unaudited)
Six Months Ended June 30,1997 and 1996,
respectively 5
Notes to Consolidated Financial Information 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
PART II Other Information
Item 4 Submission of Matters to a Vote of Security
Holders 13
Item 6 Exhibits and Reports on Form 8-K 14
Signatures 15
Exhibit 11
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
CONSOLIDATED STATEMENT OF CONDITION
(UNAUDITED)
June 30, December 31,
1997 1996
Assets
Cash and due from banks $8,276,327 $11,115,746
Fed funds sold 0 450,000
Securities available for sale, 32,815,882 36,151,500
Securities held to maturity, market 43,672,665 42,071,869
value o $44,574,105 and $42,968,700,
respectively
Loans, net of allowance for loan losses
of $1,916,280 and $1,841,200, 147,966,409 144,455,041
respectively
Accrued interest receivable 1,800,927 1,716,241
Federal Hone Loan Bank stock 1,213,300 1,105,000
Premises and equipment, net 5,546,472 5,649,294
Other assets 2,349,722 2,338,019
Total Assets $243,641,704 $245,052,710
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing $26,905,214 $27,344,602
Interest bearing 176,429,050 180,149,695
Total deposits $203,334,264 $207,494,297
Fed funds purchase/REPO's 3,699,283 1,702,729
Accrued interest payable 788,834 708,380
Accrued taxes and other liabilities 226,768 1,196,913
Advances from Federal Home Loan Bank 8,382,962 8,144,797
Total Liabilities $216,432,111 $219,247,116
Shareholders' equity:
Common stock, par value $1.00 per share
1,500,000 shares authorized, 963,786
and 939,386
shares issued $963,786 $939,386
Capital surplus 11,438,920 10,910,120
Retained earnings 15,174,920 14,046,314
Unrealized gain on securities 118,628 162,869
Employee stock ownership plan loan (486,661) (253,095)
payable
Total shareholders' equity $27,209,593 $25,805,594
Total Liabilities and Shareholders' $243,641,704 $245,052,710
Equity
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $3,617,521 $3,200,558 $7,072,424 $6,426,520
Interest on investment securities
Taxable 804,158 926,029 1,636,196 1,864,293
Tax-Exempt 313,647 278,792 626,473 560,560
Interest on federal funds sold 74,178 83,500 124,833 151,842
Total interest income $4,809,504 $4,488,879 $9,459,926 $9,003,215
Interest on deposits 1,961,717 1,827,386 3,853,572 3,812,169
Net interest income $2,847,787 $2,661,493 $5,606,354 $5,191,046
Provision for possible loan 68,687 77,259 162,290 97,249
losses
Net interest income after
provision for possible loan
losses $2,779,100 $2,584,234 $5,444,064 $5,093,797
Other operating income:
Service charges on deposit
accounts $235,729 $233,204 $465,611 $447,566
Other charges and fees 22,538 18,806 41,687 43,643
Other operating income 13,348 32,461 75,031 47,788
Gains on sales of loans and
securities available for sale 29,642 13,221 37,657 13,221
Total other operating income $301,257 $297,692 $619,986 $552,218
Other operating expenses:
Salaries and employee benefits $1,026,197 $931,235 $1,992,787 $1,855,842
Occupancy expense 128,626 131,440 256,377 270,049
Equipment expense 174,646 156,833 380,446 321,686
FDIC assessment 15,259 28,166 19,045 43,490
Other non-detailed expenses 624,561 528,230 1,188,884 1,080,230
Total other operating expense $1,969,289 $1,775,904 $3,837,539 $3,571,297
Income before income taxes 1,111,068 1,106,022 2,226,511 2,074,718
Provision for income taxes 343,000 364,500 717,500 684,000
Net income $768,068 $741,522 $1,509,011 $1,390,718
Net income per common and
common share equivalent $ .77 $ .75 $ 1.52 $ 1.41
</TABLE>
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
1997 1996
Cash flows from operating activities:
Net income $1,509,011 $1,390,718
Adjustments to reconcile net income to
net cash provided by operating activities-
Depreciation and amortization 473,814 447,646
Provision for possible loan losses 162,290 97,249
ESOP compensation expense 112,584 112,584
Gain on sale of investments (36,850) (12,774)
Gain on sale of loans (807) (448)
(Increase) in interest receivable (84,686) (87,779)
Increase in other assets (125,514) (541,058)
Increase in interest payable 80,454 8,154
(Decrease) increase in accrued taxes
and other liabilities (504,534) 724,839
Net cash provided by operating activities $1,585,762 $2,139,131
Cash flows from investing activities:
Proceeds from sales of securities-
available
for sale $4,028,594 $2,027,500
Proceeds from calls and maturities of $4,496,690 $8,109,318
securities
Proceeds from sale of loans $340,250 $509,075
Purchases of securities-held to maturity ($3,952,904) ($5,400,888)
Purchases of securities-available for sale ($3,035,277) ($1,880,173)
Net increase in loans ($4,013,101) ($2,201,246)
Expenditures for capital assets ($219,395) ($394,576)
Net cash provided by investing activities ($2,355,143) $769,010
Cash flows from financing activities:
Net decrease (increase) in demand deposits,
NOW
accounts and money market accounts ($3,692,385) $3,536,465
Net decrease in time deposits (467,648) (6,149,458)
Proceeds from current ESOP borrowings (486,661) 0
Repayment FHLB borrowings (86,935) (231,574)
Exercise of warrants & stock options 553,200 315,050
Fed funds purchased/repos 1,996,554 423,651
Dividends paid (380,405) (290,538)
Net cash provided by financing activities ($2,564,280) ($2,396,404)
Net (decrease) increase in cash and cash ($3,289,419) $399,153
equivalents
Cash and due from banks, beginning of year 11,565,746 9,802,080
Cash and due from banks, end of quarter $8,276,327 $10,201,233
Interest paid $3,934,026 $3,820,323
Income taxes paid $380,003 $652,000
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
June 30, 1997
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,
1996 and, in the opinion of management contains all adjustments
necessary to present fairly the Company's financial position as of
June 30, 1997 and December 31, 1996, the results of its operations for
the three month and six month periods ended June 30, 1997 and 1996,
respectively, and its cash flows for the six month periods ended June
30, 1997 and 1996, respectively.
The accounting policies of the Company conform with generally accepted
accounting principles and prevailing practices within the banking
industry. The preparation of financial information in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial information and the
reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
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
1997 1996
Residential real estate $ 47,618,991 $ 45,656,220
Commercial real estate 34,565,287 33,852,371
Agricultural loans 27,637,040 29,025,726
Commercial and industrial loans 30,376,204 28,118,416
Consumer loans 9,685,167 9,643,508
$149,882,689 $146,296,241
An analysis of changes in the
allowance for possible loan losses
is as follows:
June 30, June 30,
1997 1996
(unaudited) (unaudited)
Balance, beginning of year $1,841,200 $1,716,319
Chargeoffs:
Agricultural loans 0 0
Commercial and industrial loans 38,148 30,462
Real estate mortgages 13,564 0
Consumer loans 43,556 49,009
$95,268 $79,471
Recoveries:
Agricultural loans 0 0
Commercial and industrial loans 1,878 2,685
Real estate mortgages 0 0
Consumer loans 6,180 13,325
8,058 16,010
Net charge-offs $87,210 $63,461
Additional charges to operations 162,290 97,249
Balance, end of period $1,916,280 $1,750,107
The following table summarized the Company's non-performing loans at
the dates indicated.
June 30,
1997 1996 1995
Non-accruing loans 287,350 558,624 80,570
Accruing loans past due 90 days or more 252,399 134,099 79,457
Renegotiated loans 0 0 0
The average balance of impaired loans during the first six months of
1997 was approximately $362,950. At June 30, 1997, the balance of
impaired loans and related reserve against that balance was $347,845
and $116,716, respectively. Interest income recognized on impaired
loans and interest income recognized on a cash basis was not
significant.
Note 3 Investment Securities
The book and approximate
market value of investment
securities at June 30, 1997:
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
Amortized Market Amortized Market
Cost Value Cost Value
(unaudited) (unaudited) (unaudited) (unaudited)
Available for Sale
<S> <C> <C> <C> <C>
U.S. Treasury securities
and obligations of U.S.
Government corporations
and agencies $19,861,053 $20,018,802 $26,662,060 $26,923,000
State and political
subdivision obligations $500,045 $500,635 $501,030 $505,200
Mortgage-Backed Securities $12,267,010 $12,296,445 $8,716,609 $8,723,300
$32,628,108 $32,815,882 $35,879,699 $36,151,500
Held to Maturity
U.S. Treasury securities
and obligations of U.S.
Government corporations
and agencies $12,029,905 $12,226,246 $12,203,294 $12,465,800
State and political
subdivision obligations $24,893,561 $25,588,297 $24,413,840 $25,039,300
Mortgage-Backed Securities $6,749,199 $6,759,562 $5,454,735 $5,463,600
$43,672,665 $44,574,105 $42,071,869 $42,968,700
</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, 1997
Financial Condition
Total assets of Letchworth Independent Bancshares Corporation (the
"Company") were $243.6 million as of June 30, 1997, a decrease of
$1.4 million, or .58%, below total assets at December 31, 1996.
Deposits, the Company's primary source of funds, decreased $4.2
million, or 2.00%, to $203.3 million at June 30, 1997. The primary
reason for the decrease in deposits was the Company's conscious
effort to be less aggressive in bidding for municipal certificates of
deposit.
Total loans outstanding as of June 30, 1997 increased by $3.6
million, or 2.50%, over total loans at December 31, 1996. The total
loans outstanding figure of $149.9 million is net of loans sold. As
of June 30, 1997, residential real estate loans increased by $2.0
million or 4.31%; agricultural loans decreased $1.4 million or 4.78%;
commercial and industrial loans increased $2.3 million or 8.03%;
consumer loans increased $.04 million or .43%; and commercial real
estate loans increased $.7 million or 2.11%. Consumer loans have
remained fairly constant 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 $27.2 million, an
increase of 5.44% or $1.4 million from December 31, 1996. As of June
30, 1997, 41,050 warrants or 20.53% of the original 200,000 warrants
outstanding have been exercised at $23 per share.
The Risk-based capital ratios are a very good indicator of the
Company's financial soundness. As of June 30, 1997, the Company had
a Tier 1 capital ratio of 17.33%, a total capital ratio of 18.58%,
and a Tier 1 leverage ratio of 10.86%. 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, 1997, the Company considers
$2,655,251 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. A loan is considered impaired when it is
probable that the bank will be unable to collect all amounts due
according the contractual terms of the loan agreement. 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.
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. Federal 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 may cause the Company to experience a
negative cash position at certain times. During the six months ended
June 30, 1997, the Company utilized the overnight lines of credit
four days. 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, 1997 Compared to
Three Months Ended June 30, 1996
Net income of $768,068 for the three months ended June 30, 1997
represents an increase of $26,546, or 3.58%, over the $741,522 earned
during the same period ended June 30, 1996. Net income per common
share and common share equivalent was $.77 for the three months ended
June 30, 1997 compared to $.75 for the same period in 1996.
Net interest income was $2.8 million for the three months ended June
30, 1997, up 7.00% from the $2.7 million earned during the three
months ended June 30, 1996. Higher interest rates on interest
earning assets and increased volume in the loan portfolio primarily
account for this increase in interest income in 1997. Interest
expense on deposits increased to $2.0 million, up 7.35% over the
interest expense for the three months ended June 30,1996.
The provision for possible loan losses, the charge to earnings for
potential credit losses associated with lending activities, was
$68,687 for the three months ended June 30, 1997, down 11.10% from
the $77,259 provision recorded during the three months ended June 30,
1996. Net charge-offs were $38,596 in the second quarter of 1997,
compared to $47,221 for the same period last year.
Other operating expense for the three month period ended June 30,
1997 was $1,969,289, an increase of 10.89% over the $1,775,904
recorded for the same period in the prior year. Increases in this
category occurred in the following areas: The increase in equipment
expense of $17,813 or 11.36% was due largely to the increase in
depreciation expense of 1996 and 1997 equipment purchases including a
new core processing system and imaging system and equipment.
Salaries increases to Company employees for 1997 took effect on
January 1, 1997 and represent an approximately 4% increase to all
employees. The increase in addition to an accrual for an anticipated
year end bonus result in the $94,962 or 10.20% increase in the
salaries and employee benefits expense. In addition, occupancy
expense decreased by $2,814 or 2.14% and FDIC assessment decreased by
$12,907 or 45.82%. Other non-detailed expenses also increased $96,331
or 18.24% over the first six months of 1996.
Results of Operations - Six Months Ended June 30, 1997 Compared to
Six Months Ended June 30, 1996
Net income of $1,509,011 for the six months ended June 30, 1997
represents an increase of $118,293, or 8.51%, over the $1,390,718
earned during the same period ended June 30, 1996. Net income per
common share was $1.52 for the six months ended June 30, 1997
compared to $1.41 for the same period in 1996.
Net interest income increased to $5.6 million for the six months
ended June 30, 1997, up 8.00% from the $5.2 million earned during the
six months ended June 30, 1996. Interest expense on deposits
increased only slightly to $3.9 million for the six months period
ended June 30, 1997.
Provision for possible loan losses, the charge to earnings for
potential credit losses associated with lending activities, was
$162,290 for the six months ended June 30, 1997, up 66.88% from the
$97,249 provision recorded during the six months ended June 30,1996.
Net charge offs were $87,210 in the first half of 1997, as compared
to $63,461 for the same period in 1996. 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. Internal and regulatory loan classifications, historical
loan losses, and 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, 1997 was $1,916,280 or 1.28% of
total loans and is up 4.08% or $75,080 from the allowance at December
31, 1996.
Other operating expense for the six month period ended June 30, 1997
was $3,837,539, an increase of 7.46% over the $3,571,297 recorded for
the same period in the prior year. As explained in the three months
comparison, the increase of $136,945 or 7.38% in salaries and
employee benefits expense represents the monthly accrual for the
anticipated year end bonus to employees plus the general salary
increase to employees which went into effect on January 1, 1997. The
$58,760 or 18.27% increase in equipment expense was also explained in
the three months comparison of the full year of depreciation recorded
for the Company's new core processing and imaging systems. The
$108,654 or 10.06% increase in other non-detailed expenses can be
broken down into several individual accounts including a $56,291 or
62% increase in printing and supplies, a $29,655 or 200.67% increase
in training, a $10,672 or 21.00% increase in audits and exams and a
$30,836 or 107.43% increase in legal expenses and a decrease in the
FDIC assessment of $24,445 or 56.21%.
New Accounting Pronouncements:
Statement of Financial Accounting Standards No. 128, "Earnings per
Share," was issued in February 1997 and is effective for financial
statements issued for periods ending after December 15, 1997. This
Statement replaces the presentation of primary earnings per share
(EPS) previously required by Accounting Principles Board (APB)
Opinion No. 15, "Earnings per Share", with basic EPS. It also
requires dual presentation of basic EPS and diluted EPS on the face
of the income statement for all entities with complex capital
structures. Diluted EPS is computed similarly to fully diluted EPS
pursuant to APB Opinion No. 15.
Basic EPS excludes dilution and is computed by dividing income
available to common stockholders by the weighted-average number of
common shares outstanding for the period. Diluted EPS reflects the
potential dilution that could occur if securities or other contracts
to issue common stock were exercised or converted to common stock.
The Company will adopt this Statement for its financial statements
for the period ending December 31, 1997. Had the Company computed
earnings per share pursuant to this Statement for the quarter ended
June 30, 1997, basic EPS would have been $0.81 and diluted EPS would
have been $0.74. For the quarter ended June 30, 1996, basic EPS and
diluted EPS would have been $0.83 and $0.75, respectively. For the
six months ended June 30, 1997, basic EPS would have been $1.61 and
diluted EPS would have been $1.46. For the six months ended June 30,
1996, basic EPS and diluted EPS would have been $1.56 and $1.42,
respectively.
Other Events of Significance:
Letchworth Independent Bancshares Corporation installed a new check
imaging system in during the fourth quarter of 1996. This equipment
is expected to greatly improve customer service. Additionally, it
will help to reduce costs by reducing statement preparation time,
lowering postage costs, and by streamlining research time. Per the
Company's 1997 Strategic Plan, various non-bank opportunities,
including financial and insurance related businesses, are being
considered.
The Bank of Castile received permission from its primary regulators
during the 2nd quarter to begin offering "Trust and Investment"
related services to its customers. During the 3rd quarter of 1997,
the Bank of Castile plans to initiate the department by utilizing its
previously established agreement with Tompkins County Trust Company t
provide the necessary "backroom" support and to hire a Trust and
Investment Officer. Present plans call for the department to be
housed in the Bank's soon to be opened Geneseo office. The goal of
this endeavor is to solicit money management, employee benefit,
corporate and personal trust business among others.
A "voice response system" was installed during the second quarter of
1997. It is currently in the testing stage and is expected to be
offered to customers in the third quarter of this year. This system
will give our customers the added convenience of being able to access
information from their accounts twenty-four hours a day.
The Company has received all regulatory approvals for its 11th office
in the Livingston County community of Geneseo. The Bank purchased a
9,600 square foot building in the village of Geneseo, half of which
is rented for at least the next six years to the US Postal Service.
The remaining space will be converted to a financial center to
include typical branch retail services, a lending officer, as well as
the trust and investment department. The building is located less
than one block from the campus of SUNY at Geneseo.
OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders of the Company which
was held on May 8, 1997, Charles L. VanArsdale and James W. Fulmer
were re-elected as directors 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, 1997. Of
the 943,172 shares of common stock outstanding and eligible to vote
at the Annual Meeting, 767,839 shares were voted in favor of the
election of each Mr. VanArsdale and Mr. Fulmer, and the authority to
vote 319 shares was withheld for Mr. VanArsdale and Mr. Fulmer. In
addition, 763,111 shares of common stock were voted in favor of the
election of Price Waterhouse LLP as independent accountants of the
Company, 700 shares of common stock were voted against such election,
and 7,137 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, 1997 is presented on Exhibit 11 of this Report on Form 10-QSB.
(b). The Registrant did not file any current reports on Form 8-K
during the quarter ended June 30, 1997.
<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_8/8/97 /s/ James W. Fulmer
James W. Fulmer
President & Chief Executive Officer
Date_8/8/97 /s/ Steven C. Lockwood
Steven C. Lockwood
Treasurer & Chief Financial Officer
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
COMPUTATION OF EARNINGS PER SHARE
June 30, 1997
Exhibit 11:
Three Months Ended
June 30, 1997
Net income $768,068
Weighted average number of shares
outstanding 955,533
Add: Common stock equivalent shares due
to assumed exercise of options and warrants 48,339
Less: ESOP shares accounted for in accordance
with SOP 93-6 not committed to be released (10,023)
Adjusted common and common equivalent shares 993,848
Net Income per common and common equivalent
share $ .77
Six Months Ended
June 30, 1997
Net income $1,509,011
Weighted average number of shares
outstanding 943,836
Add: Common stock equivalent shares due
to assumed exercise of options and warrants 56,955
Less: ESOP shares accounted for in accordance
with SOP 93-6 not committed to be released (10,350)
Adjusted common and common equivalent shares 990,441
Net Income per common and common equivalent
share $ 1.52
<PAGE>
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