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 September 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 October 24, 1997
Common Stock, $1.00 per share 971,536 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
September 30, 1997(Unaudited) and
December 31, 1996 3
Consolidated Statement of Income (Unaudited)
Three Months and Nine Months Ended
September 30, 1997 and 1996, respectively 4
Consolidated Statement of Cash Flows (Unaudited)
Nine Months Ended September 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 6 Exhibits and Reports on Form 8-K 14
Signatures 16
Exhibit 11
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
CONSOLIDATED STATEMENT OF CONDITION
(UNAUDITED)
September 30, December 31,
1997 1996
Assets
Cash and due from banks $11,438,337 $11,115,746
Fed funds sold 10,025,000 450,000
Securities available for sale, 32,715,566 36,151,500
Securities held to maturity, market 43,813,211 42,071,869
value of $44,822,845 and $42,968,700,
respectively
Loans, net of allowance for loan
losses of $1,941,297 and $1,841,200, 151,737,187 144,455,041
respectively
Accrued interest receivable 1,930,012 1,716,241
Federal Home Loan Bank stock 1,213,300 1,105,000
Premises and equipment, net 6,115,661 5,649,294
Other assets 2,384,184 2,338,019
Total Assets $261,372,458 $245,052,710
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing $27,125,402 $27,344,602
Interest bearing 194,778,021 180,149,695
Total deposits $221,903,423 $207,494,297
Fed funds purchased/repurchase 2,081,678 1,702,729
agreements
Advances from Federal Home Loan Bank 7,853,072 8,144,797
Accrued interest payable 803,196 708,380
Accrued taxes and other liabilities 709,998 1,196,913
Total Liabilities $233,351,367 $219,247,116
Shareholders' Equity:
Common stock, par value $1.00 per
share 1,500,000 shares authorized,
968,986 and 939,386 shares issued $968,986 $939,386
Capital surplus 11,553,320 10,910,120
Retained earnings 15,806,067 14,046,314
Unrealized gain on securities 179,379 162,869
Employee stock ownership plan loan (486,661) (253,095)
payable
Total shareholders' equity $28,021,091 $25,805,594
Total Liabilities and Shareholders' $261,372,458 $245,052,710
Equity
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
<S> <C> <C> <C> <C>
1997 1996 1997 1996
Interest income:
Interest and fees on loans $3,706,521 $3,329,094 $10,778,945 $9,755,614
Interest on investment securities
Taxable 810,070 853,566 2,446,266 2,717,859
Tax-Exempt 312,811 276,152 939,284 836,712
Interest on federal funds sold 92,647 40,458 217,480 192,300
Total interest income $4,922,049 $4,499,270 $14,381,975 $13,502,485
Interest on deposits, fed funds
purchased and repurchase 2,063,939 1,800,212 5,917,511 5,612,381
agreements
Net interest income $2,858,110 $2,699,058 $8,464,464 $7,890,104
Provision for possible loan 87,151 83,426 249,441 180,675
losses
Net interest income after
provision for possible loan
losses $2,770,959 $2,615,632 $8,215,023 $7,709,429
Other operating income:
Service charges on deposit
accounts $254,653 $230,765 $720,264 $678,331
Other charges and fees 24,309 26,002 65,996 69,645
Other operating income 77,806 61,686 152,837 109,474
Gains on sales of loans and
securities available for sale - 14,077 37,657 27,298
Total other operating income $356,768 $332,530 $976,754 $884,748
Other operating expenses:
Salaries and employee benefits$1,041,144 $970,590 $3,033,931 $2,826,432
Occupancy expense 117,647 111,542 374,024 381,591
Equipment expense 187,980 142,771 568,426 464,457
FDIC assessment 6,054 136,737 25,099 180,227
Other expenses 558,320 447,144 1,747,204 1,527,374
Total other operating expense$1,911,145 $1,808,784 $5,748,684 $5,380,081
Income before income taxes 1,216,582 1,139,378 3,443,093 3,214,096
Provision for income taxes 392,500 351,000 1,110,000 1,035,000
Net income $824,082 $788,378 $2,333,093 $2,179,096
Net income per common and
common share equivalent $ 0.79 $ 0.80 $ 2.31 $ 2.21
</TABLE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
September 30,
1997 1996
Cash flows from operating activities:
Net income $2,333,093 $2,179,096
Adjustments to reconcile net income to
net cash provided by operating activities-
Depreciation and amortization 632,634 666,770
Provision for possible loan losses 249,441 180,675
ESOP compensation expense 112,584 112,583
Gain on sale of investments & loans (37,657) (27,298)
Increase in interest receivable (213,771) (11,079)
Increase in other assets (150,519) (355,563)
Increase (decrease) in interest payable 94,816 (25,789)
(Decrease) increase in accrued taxes
and other liabilities (486,915) 636,448
Net cash provided by operating activities $2,533,706 $3,355,843
Cash flows from investing activities:
Proceeds from sales of securities-available
for sale $4,028,594 $4,519,219
Proceeds from calls and maturities of $14,625,145 $11,865,280
securities
Proceeds from sale of loans $340,250 $1,118,657
Purchases of securities-held to maturity ($5,470,057) ($5,829,206)
Purchases of securities-available for sale ($11,650,955) ($3,471,113)
Net increase in loans ($7,871,030) ($6,666,844)
Expenditures for capital assets ($887,722) ($550,010)
Net cash provided by investing activities ($6,885,775) $985,983
Cash flows from financing activities:
Net increase in demand deposits, NOW
accounts and money market accounts $4,952,637 $4,238,721
Net increase (decrease) in time deposits 9,456,489 (6,827,217)
Repayment of FHLB borrowings (291,725) (298,935)
Exercise of warrants and stock options 326,650 355,300
Net increase in fed funds 378,949 119,553
purchased/repurchase agreements
Dividends paid (573,340) (437,037)
Net cash provided by financing activities $14,249,660 ($2,849,615)
Net increase in cash and cash equivalents $9,897,591 $1,492,211
Cash and due from banks, beginning of year 11,565,746 9,802,080
Cash and due from banks, end of quarter $21,463,337 $11,294,291
Interest paid $5,822,695 $5,586,315
Income taxes paid $740,003 $977,000
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL INFORMATION
September 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
September 30, 1997 and December 31, 1996, the results of its
operations for the three month and nine month periods ended September
30, 1997 and 1996, respectively, and its cash flows for the nine month
periods ended September 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.
Note 2 Loans
Loans consist of the following:
September 30, December 31,
1997 1996
Residential real estate $ 48,814,375 $45,656,220
Commercial real estate 34,742,033 33,852,371
Agricultural loans 28,880,933 29,025,726
Commercial and industrial loans 31,173,906 28,118,416
Consumer loans 10,067,237 9,643,508
$ 153,678,484 $146,296,241
An analysis of changes in the
allowance for possible loan losses
is as follows:
September 30, September 30,
1997 1996
(unaudited) (unaudited)
Balance, beginning of year $1,841,200 $1,716,300
Chargeoffs:
Agricultural loans 0 0
Commercial and industrial loans 71,038 39,926
Real estate mortgages 23,564 24,603
Consumer loans 71,296 68,522
$165,898 $133,051
Recoveries:
Agricultural loans 0 0
Commercial and industrial loans 2,883 3,479
Real estate mortgages 0 0
Consumer loans 13,671 20,786
16,554 24,265
Net charge-offs $149,344 $108,805
Provision for possible loan losses 249,441 180,675
Balance, end of period $1,941,297 $1,788,189
The following table summarized the Company's non-performing loans at
the dates indicated.
September 30,
1997 1996 1995
Non-accruing loans 264,399 503,644 190,257
Accruing loans past due 90 days or more 174,566 216,883 162,074
Renegotiated loans 0 0 0
The average balance of impaired loans during the first nine months of
1997 was approximately $390,523. At September 30, 1997, the balance
of impaired loans and related reserve against that balance was
$445,669 and $76,870, 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 September 30, 1997:
<TABLE>
<CAPTION>
September 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 $14,857,977 $15,029,812 $26,662,060 $26,923,000
State and political subdivision
obligations $2,060,936 $2,089,355 $501,030 $505,200
Mortgage-Backed Securities $15,511,877 $15,596,399 $8,716,609 $8,723,300
$32,430,790 $32,715,566 $35,879,699 $36,151,500
Letchworth Independent Bancshares
Notes
Continued
Held to Maturity
U.S. Treasury securities and
obligations of U.S. Government
corporations and agencies $12,023,043 $12,237,088 $12,203,294 $12,465,800
State and political subdivision
obligations $25,282,498 $26,066,032 $24,413,840 $25,039,300
Mortgage-Backed Securities $6,507,670 $6,537,283 $5,454,735 $5,463,600
$43,813,211 $44,840,403 $42,071,869 $42,968,700
</TABLE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
September 30, 1997
Financial Condition
Total assets of Letchworth Independent Bancshares Corporation (the
"Company") were $261.4 million as of September 30, 1997, an increase
of $16.3 million, or 6.66%, above total assets at December 31, 1996.
Deposits, the Company's primary source of funds, increased $14.4
million, or 6.94%, to $221.9 million at September 30, 1997. The
primary reason for the increase in deposits was an inflow of
certificates of deposit as a result of a CD special offered during
the summer and an inflow of municipal money from aid payments
received near the quarter end.
Total loans outstanding as of September 30, 1997 increased by $7.4
million, or 5.05%, over total loans at December 31, 1996. As of
September 30, 1997, residential real estate loans increased by $3.2
million or 6.92%; agricultural loans decreased $.1 million or .50%;
commercial and industrial loans increased $3.1 million or 10.87%;
consumer loans increased $.4 million or 4.39%; and commercial real
estate loans increased $.9 million or 2.63%. The near 11% increase in
commercial and industrial loans is a result of additional
opportunities from new branch locations in Avon and Batavia.
"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 September 30, 1997, the Company
considers $2,455,035 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.
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
September 30, 1997 was $1,941,297 or 1.26% of total loans and is up
5.44% or $100,097 from the allowance at December 31, 1996.
The Company's shareholders' equity increased to $28.0 million, an
increase of 8.59% or $2.2 million from December 31, 1996. As of
September 30, 1997, 46,250 warrants or 23.13% of the original 200,000
warrants outstanding have been exercised at $23 per share. The
remaining warrants are due to expire on December 31, 1997.
The Risk-based capital ratios are a very good indicator of the
Company's financial soundness. As of September 30, 1997, the Company
had a Tier 1 capital ratio of 17.37%, a total capital ratio of
18.59%, and a Tier 1 leverage ratio of 11.18%. Each of these ratios
compares favorably with the regulatory minimum requirements of 4.00%,
8.00%, and 4.00%, respectively.
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 September 30, 1997, the Company sold $10 million in
federal funds. These funds are available on one day notice to meet
upcoming obligations. During the nine months ended September 30,
1997, the Company utilized the overnight lines of credit seven 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 September 30, 1997
Compared to Three Months Ended September 30, 1996
Net income of $824,082 for the three months ended September 30, 1997
represents an increase of $35,704, or 4.53%, over the $788,378 earned
during the same period ended September 30, 1996. Net income per
common share and common share equivalent was $.79 for the three
months ended September 30, 1997 compared to $.80 for the same period
in 1996. The quarter's earnings per share figure was negatively
impacted by the dilutive effect of stock warrants which increased the
number of outstanding shares.
Net interest income was $2.9 million for the three months ended
September 30, 1997, up 5.89% from the $2.7 million earned during the
three months ended September 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 $2.1 million, up 14.65%
over the interest expense for the three months ended September
30,1996. An increase in interest-bearing deposits accounts for the
main reason for this increase in interest expense.
The provision for possible loan losses, the charge to earnings for
potential credit losses associated with lending activities, was
$87,151 for the three months ended September 30, 1997, up 4.47% from
the $83,426 provision recorded during the three months ended
September 30, 1996. Net charge-offs were $62,134 in the third quarter
of 1997, compared to $45,344 for the same period last year.
Other operating expense for the three month period ended September
30, 1997 was $1,911,145, an increase of 5.67% over the $1,808,784
recorded for the same period in the prior year. The increase in
equipment expense of $45,209 or 31.67% 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. Salary increases to Company employees for 1997 took
effect on January 1, 1997 and represent an approximately 4% increase
to all employees. The salary increase, in addition to an accrual for
an anticipated year end bonus, result in the $70,554 or 7.27%
increase in the salaries and employee benefits expense. In addition,
occupancy expense increased by $6,105 or 5.47%, and other expenses
also increased $111,176 or 24.86% over the third quarter of 1996.
This 24.86% increase is mainly due to: a $41,686 or 70.0% increase in
legal expense, a $5,461 or 22.7% increase in consulting expense, and
a $4,997 or 23.5% increase in NYCE charges
Results of Operations - Nine Months Ended September 30, 1997 Compared
to Nine Months Ended September 30, 1996
Net income of $2,333,093 for the nine months ended September 30, 1997
represents an increase of $153,997, or 7.07%, over the $2,179,096
earned during the same period ended September 30, 1996. Net income
per common share was $2.31 for the nine months ended September 30,
1997 compared to $2.21 for the same period in 1996.
Net interest income increased to $8.5 million for the nine months
ended September 30, 1997, up 7.28% from the $7.9 million earned
during the nine months ended September 30, 1996. Interest expense on
deposits increased only slightly to $5.9 million for the nine months
period ended September 30, 1997.
Provision for possible loan losses, the charge to earnings for
potential credit losses associated with lending activities, was
$249,441 for the nine months ended September 30, 1997, up 38.06% from
the $180,675 provision recorded during the nine months ended
September 30,1996. Net charge offs were $149,344 in the first nine
months of 1997, as compared to $108,805 for the same period in 1996.
The increase in loan volume along with several identified charge-offs
explain the increase in the 1997 provision for loan losses.
Other operating expense for the nine month period ended September 30,
1997 was $5,748,684, an increase of 6.85% over the $5,380,081
recorded for the same period in the prior year. As explained in the
three months comparison, the increase of $207,499 or 7.34% 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 $103,969 or 22.39% increase in equipment expense was also
explained in the three month comparison as the full year's
depreciation recorded for the Company's new core processing and
imaging systems. The $219,830 or 14.39% increase in other expenses
can be attributed to several causes including a $57,619 or 37.56%
increase in printing and supplies, a $32,154 or 144.47% increase in
training, a $12,119 or 15.00% increase in audits and exams and a
$63,960 or 170.17% increase in legal expenses, offset by a decrease
in the FDIC assessment of $155,128 or 86.07%.
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
September 30, 1997, basic EPS would have been $0.88 and diluted EPS
would have been $0.79. For the quarter ended September 30, 1996,
basic EPS and diluted EPS would have been $0.87 and $0.80,
respectively. For the nine months ended September 30, 1997, basic
EPS would have been $2.49 and diluted EPS would have been $2.26. For
the nine months ended September 30, 1996, basic EPS and diluted EPS
would have been $2.43 and $2.25, respectively.
Other Events of Significance:
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. The Bank has recently hired a Trust
Officer who has been involved in the insurance business for almost
twenty years. The Bank of Castile has initiated the department by
utilizing its previously established agreement with Tompkins County
Trust Company to provide the necessary "backroom" support. 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 and became operational during the third quarter. This system
gives our customers the added convenience of being able to access
information, and effect transfers, from their accounts twenty-four
hours a day. Currently, the average daily number of calls received by
the system is 170.
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 to the US Postal Service for at least the next six years.
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. The anticipated
opening date for this newest branch office is December 1997.
The Bank of Castile recently installed marketing software which will
enable us to more easily identify our most profitable products and
customers. It will also allow demographic information to be imported
so that the bank may more effectively target potential customers.
OTHER INFORMATION
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
September 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 September 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_11/12/97 /s/ James W. Fulmer
James W. Fulmer
President & Chief Executive Officer
Date_11/12/97 /s/ Steven C. Lockwood
Steven C. Lockwood
Treasurer & Chief Financial Officer
<PAGE>
LETCHWORTH INDEPENDENT BANCSHARES CORPORATION
COMPUTATION OF EARNINGS PER SHARE
September 30, 1997
Exhibit 11:
Three Months Ended
September 30, 1997
Net income $824,082
Weighted average number of shares
outstanding 965,620
Add: Common stock equivalent shares due
to assumed exercise of options and warrants 105,338
Less: ESOP shares accounted for in accordance
with SOP 93-6 not committed to be released (24,419)
Adjusted common and common equivalent shares 1,046,539
Net Income per common and common equivalent
share $ .79
Nine Months Ended
September 30, 1997
Net income $2,333,093
Weighted average number of shares
outstanding 953,865
Add: Common stock equivalent shares due
to assumed exercise of options and warrants 72,244
Less: ESOP shares accounted for in accordance
with SOP 93-6 not committed to be released (15,040)
Adjusted common and common equivalent shares 1,011,069
Net Income per common and common equivalent
share $ 2.31
<TABLE> <S> <C>
<ARTICLE> 9
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