SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934
FOR THE QUARTER PERIOD ENDED
JUNE 30, 1996
CNB BANCSHARES, INC. 0-11510
(Exact name of registrant as specified in its charter) (Commission file number)
Indiana 35-1568731
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
20 N.W. Third Street, Evansville, Indiana 47739
(Address of principal executive office) (Zip Code)
(812) 464-3400
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No _____
As of July 31, 1996, there were 18,426,392 outstanding shares, without par
value, of the registrant.
Exhibit index is on page 22.
Page
INDEX
Page No.
--------
PART I. Financial Information
Item 1. Financial Statements:
Consolidated Balance Sheet 1
Consolidated Condensed Statement
of Income 2
Consolidated Condensed Statement of
Changes in Shareholders' Equity 3
Consolidated Statement of Cash Flows 4
Notes to Consolidated Financial Statements 5-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-19
PART II. Other Information 20
Signatures 21
Exhibit Index 22
Page
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
<TABLE>
CNB BANCSHARES, INC.
CONSOLIDATED BALANCE SHEET
(In thousands except for share data)
(Unaudited)
<CAPTION>
June 30, December 31, June 30,
1996 1995 1995
---- ---- ----
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 117,594 $ 130,239 $ 115,864
Federal funds sold and other short-term
money market investments 28,407 8,546 15,343
---------- ---------- ----------
TOTAL CASH AND CASH EQUIVALENTS 146,001 138,785 131,207
Real estate loans held for sale 76,150 222,157 29,726
Investment securities available for sale 1,264,419 972,320 584,447
Investment securities held to maturity
(Market value $236,417 at June 30, 1996,
$199,966 at December 31, 1995, and
$505,985 at June 30, 1995) 238,843 198,240 510,164
Loans, net of unearned income 2,075,447 1,971,454 2,142,013
Less: Allowance for loan losses 29,589 28,806 28,507
----------- ----------- -----------
NET LOANS 2,045,858 1,942,648 2,113,506
Premises and equipment 69,897 66,224 68,883
Foreclosed properties 3,193 1,727 2,652
Intangible assets 31,342 23,741 18,830
Interest receivable and other assets 72,715 62,840 62,286
----------- ----------- -----------
TOTAL ASSETS $3,948,418 $3,628,682 $3,521,701
=========== =========== ===========
LIABILITIES
Deposits:
Non-interest bearing $ 322,605 $ 322,706 $ 296,814
Interest bearing 2,563,565 2,467,283 2,324,021
----------- ----------- -----------
TOTAL DEPOSITS 2,886,170 2,789,989 2,620,835
Securities sold under repurchase
agreements 445,124 325,271 324,013
Federal funds purchased 67,025 18,370 21,925
Other short-term borrowings 13,070 7,441 14,193
Long-term debt 199,846 158,046 219,344
Interest payable and other liabilities 33,648 31,872 37,119
----------- ----------- -----------
TOTAL LIABILITIES 3,644,883 3,330,989 3,237,429
SHAREHOLDERS' EQUITY
Preferred stock, no par or stated value
Shares authorized & unissued: 2,000,000
Common stock, $1 stated value
Shares authorized: 50,000,000
Shares issued: 18,339,330 at
June 30, 1996, 17,894,770 at
December 31, 1995, and 16,961,084
at June 30, 1995 18,339 17,895 16,961
Capital surplus 243,930 246,492 231,426
Retained earnings 46,574 29,672 34,707
Net unrealized gains (losses) on
investment securities available for
sale (5,308) 3,634 1,178
----------- ----------- -----------
TOTAL SHAREHOLDERS' EQUITY 303,535 297,693 284,272
----------- ----------- -----------
TOTAL LIABILITIES & SHAREHOLDERS'
EQUITY $3,948,418 $3,628,682 $3,521,701
=========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
Page 1
<TABLE>
CNB BANCSHARES, INC.
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(In thousands, except for share data)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest Income
Loans, including fees:
Taxable $47,817 $47,825 $ 93,312 $ 95,043
Tax exempt 365 422 746 861
Investment securities:
Taxable 22,395 16,753 41,093 32,904
Tax exempt 1,987 1,176 3,650 2,372
Real estate loans held for sale 230 799 3,462 849
Federal funds sold and other
short-term money market
investments 266 364 582 876
--------- --------- --------- ---------
Total interest income 73,060 67,339 142,845 132,905
INTEREST EXPENSE
Deposits 28,544 26,181 57,195 50,776
Short-term borrowings 5,672 4,699 9,965 9,196
Long-term debt 2,742 3,674 5,191 7,257
--------- --------- --------- ---------
Total interest expense 36,958 34,554 72,351 67,229
--------- --------- --------- ---------
NET INTEREST INCOME 36,102 32,785 70,494 65,676
Provision for loan losses 1,985 1,497 3,587 3,051
--------- --------- --------- ---------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 34,117 31,288 66,907 62,625
NON-INTEREST INCOME
Net securities gains 148 1,072 554 1,202
Other non-interest income 11,528 10,740 25,099 20,867
--------- --------- --------- ---------
Total non-interest income 11,676 11,812 25,653 22,069
NON-INTEREST EXPENSE
Salaries, benefits, occupancy,
other operating expenses 30,547 29,806 62,174 58,968
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 15,246 13,294 30,386 25,726
Income taxes 5,407 4,963 10,862 9,481
--------- --------- --------- ---------
NET INCOME $ 9,839 $ 8,331 $19,524 $16,245
========= ========= ========= =========
NET INCOME PER SHARE $ 0.54 $ 0.46 $ 1.08 $ 0.89
========= ========= ========= =========
AVERAGE COMMON AND EQUIVALENT
SHARES OUTSTANDING 18,254,496 18,261,863 18,148,190 18,330,332
=========== =========== =========== ===========
</TABLE>
See notes to consolidated financial statements.
Page 2
CNB BANCSHARES, INC.
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Beginning Balance $295,585 $282,042 $297,693 $273,828
Net income 9,839 8,331 19,524 16,245
Cash dividends declared (3,756) (3,354) (7,509) (6,561)
Purchase and retirement of
common stock (2,632) (8,447) (6,579) (10,855)
Issuance of common stock
related to acquisition of
subsidiaries 6,286 6,286
Dividends reinvested 874 731 1,796 1,492
Stock options exercised 554 324 718 436
Exercise and conversion of stock
purchase contracts and
debentures 291 33 352 215
Other shares issued - 141 196 360
Change in unrealized gains/losses
on investment securities
available for sale (3,506) 4,471 (8,942) 9,112
--------- --------- --------- ---------
ENDING BALANCE $303,535 $284,272 $303,535 $284,272
========= ========= ========= =========
</TABLE>
See notes to consolidated financial statements.
Page 3
CNB BANCSHARES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $19,524 $16,245
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 6,635 5,331
Provision for loan losses 3,587 3,051
Amortization of securities' premiums and discounts 838 813
Net gains on securities (554) (1,202)
Loans originated for sale (38,461) (94,779)
Proceeds from sale of loans 44,616 76,719
Increase in other assets, net of amortization (10,314) (14,604)
Increase in other liabilities 916 10,820
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES 26,787 2,394
INVESTING ACTIVITIES:
Cash and cash equivalents of subsidiaries acquired,
net of purchase price 2,869 -
Proceeds from the maturity of investment securities
available for sale 144,804 62,429
Proceeds from the sale of investment securities
available for sale 193,567 107,716
Purchase of investment securities available for
sale (459,733) (206,611)
Proceeds from the maturity of investment
securities held to maturity 6,663 23,059
Purchase of investment securities held to maturity (36,015) (6,515)
Net increase in loans (89,036) (27,429)
Purchase of bank premises and equipment (5,938) (3,527)
--------- ---------
NET CASH USED BY INVESTING ACTIVITIES (242,819) (50,878)
FINANCING ACTIVITIES:
Net increase in deposits 22,133 25,367
Net increase in short-term borrowings 170,667 2,644
Payment of long-term debt (9,178) (62,331)
Proceeds from long-term borrowings 51,200 71,795
Proceeds from exercise of stock options 718 436
Payment of cash dividends (7,509) (6,230)
Proceeds from common stock issued for dividend
reinvestment plan 1,796 1,492
Purchase and retirement of common stock (6,579) (10,855)
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 223,248 22,318
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 7,216 (26,166)
CASH AND CASH EQUIVALENTS AT JANUARY 1, 138,785 157,373
--------- ---------
CASH AND CASH EQUIVALENTS AT JUNE 30, $146,001 $131,207
========= =========
Supplemental disclosure:
Cash paid for:
Interest $71,993 $62,102
Income taxes 12,074 9,833
Non-cash investing and financing activities:
Common stock issued for acquisitions 6,286 -
Stock issued in exchange of debentures and
equity contracts and pursuant to employee
benefit plans 562 442
</TABLE>
See notes to consolidated financial statements.
Page 4
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements include the accounts of CNB Bancshares,
Inc. (Corporation) and its wholly-owned subsidiaries, after elimination of all
material intercompany accounts and transactions.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial reporting and do not include all the information and footnotes
required for a complete presentation of statements. The Corporation's
accounting and reporting policies for interim financial reporting are consistent
with those followed for annual financial reporting. In the opinion of
management, all adjustments (consisting of normal recurring accruals) necessary
for a fair presentation of the results of operations for the periods reported
have been included in the foregoing interim consolidated financial statements.
The interim results of operations presented are not necessarily indicative of
the results that may be expected for the full year. A complete description of
the Corporation's accounting policies and complete footnotes are contained in
the 1995 Annual Report to Shareholders.
NOTE 2: BUSINESS COMBINATIONS
Information relating to mergers and acquisitions since July 1, 1995, for which
stock was issued includes:
<TABLE>
<CAPTION>
Merger Common Shares Method of
Date Issued Accounting
<S> <C> <C> <C>
DuQuoin Bancorp, Inc.,
DuQuoin, Illinois May 17, 1996 499,200 Pooling*
Southern Finance Co., Inc.,
Madisonville, Kentucky December 1, 1995 31,932 Pooling*
Service Financial, Inc.,
Harriman, Tennessee December 1, 1995 37,064 Pooling*
UF Bancorp, Inc.,
Evansville, Indiana August 4, 1995 2,370,208 Pooling
Bank of Orleans, Indiana August 4, 1995 334,420 Pooling*
</TABLE>
*Accounted for as a pooling of interests without restatement of prior periods as
the amounts involved were not material to the Corporation's financial results.
On May 31, 1996, subsidiaries of the Corporation completed three acquisitions.
Peoples Security Finance acquired $11,785,000 of loans from 12 offices of Money
One Credit Company. Citizens Insurance of Evansville acquired a portion of the
insurance policy customer base from Evansville Insurance Group. Citizens Trust
Company of Indiana, N.A. purchased Small, Parker and Blossom, Inc., a third
party administrator of employee benefit plans. Goodwill originated from these
acquisitions totaled approximately $6,474,000 and is being amortized on a
straight line basis not exceeding 15 years. These acquisitions were accounted
for under the purchase method of accounting, and accordingly, the consolidated
financial statements include the assets and liabilities from the May 31, 1996
transaction date forward. The amounts involved in the transactions were not
material to the Corporation's financial results.
Page 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
NOTE 2: BUSINESS COMBINATIONS (continued):
On August 4, 1995, a subsidiary of the Corporation, Citizens Bank of Western
Indiana, acquired the four Indiana offices of Household Bank, f.s.b., a
subsidiary of Household International and assumed deposit liabilities of
$78,897,000. Goodwill of $5,345,000 is being amortized on a straight-line basis
over 15 years. The acquisition was accounted for under the purchase method of
accounting and, accordingly, the consolidated financial statements include the
assets and liabilities from the August 4, 1995, transaction date forward.
NOTE 3: INVESTMENT SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
Available for Sale at
June 30, 1996:
U.S. Treasury $ 11,774 $ 76 $ (12) $ 11,838
Federal agencies:
Bonds and notes 212,219 464 (1,672) 211,011
Mortgage-backed
securities 902,495 2,577 (10,952) 894,120
State and municipal 36,753 957 (126) 37,584
Collateralized
mortgage obligations 84,763 724 (721) 84,766
Other securities 25,173 60 (133) 25,100
----------- ----------- ---------- -----------
TOTAL $1,273,177 $4,858 $(13,616) $1,264,419
=========== =========== ========== ===========
Held to Maturity at
June 30, 1996:
Federal agencies:
Mortgage-backed
securities $ 110,493 $ 77 $ (3,154) $ 107,416
State and municipal 125,449 2,291 (1,619) 126,121
Collateralized
mortgage obligations 2,901 1 (22) 2,880
----------- ----------- ----------- -----------
TOTAL $ 238,843 $2,369 $(4,795) $ 236,417
=========== =========== =========== ===========
</TABLE>
Net unrealized gains or (losses) on investment securities available for sale,
net of tax, at December 31, 1995 and June 30, 1996 and 1995, were $3,634,000,
$(5,308,000) and $1,178,000, respectively. The amortized cost and estimated
market value of investment securities at June 30, 1996, by contractual maturity,
are shown in the following table. Expected maturities will differ from
contractual maturities because issuers may have the right to call or prepay
obligations with or without call or prepayment penalties.
Page 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
NOTE 3: INVESTMENT SECURITIES AVAILABLE FOR SALE AND HELD TO MATURITY
(continued)
<TABLE>
<CAPTION>
Available for Sale Held to Maturity
Amortized Market Amortized Market
Cost Value Cost Value
<S> <C> <C> <C> <C>
Maturity distribution at
June 30, 1996:
Due in one year or less $ 18,849 $ 18,930 $ 202 $ 207
Due after one year
through five years 187,384 186,896 15,923 16,430
Due after five years
through ten years 49,567 49,573 37,256 37,968
Due after ten years 6,398 6,467 72,068 71,516
Mortgage-backed
securities 902,495 894,120 110,493 107,416
Collateralized
mortgage obligations 84,763 84,766 2,901 2,880
----------- ----------- ---------- ----------
TOTAL DEBT SECURITIES 1,249,456 1,240,752 238,843 236,417
Equity securities 23,721 23,667
TOTAL $1,273,177 $1,264,419 $238,843 $236,417
=========== =========== ========== ==========
</TABLE>
Proceeds from sales of investment securities available for sale during the six
months ended June 30, 1996, were $193,567,000. Gross gains and losses realized
on those sales were $924,000 and $370,000, respectively.
NOTE 4: IMPAIRED LOANS
At June 30, 1996, impaired loans totaled $13,727,000. An allowance for loan
losses was not deemed necessary for impaired loans totaling $5,074,000, but an
allowance of $2,096,000 was recorded for the remaining balance of impaired loans
of $8,653,000. At December 31, 1995, impaired loans totaled $14,149,000. An
allowance of $1,212,000 was recorded for impaired loans totaling $7,448,000.
The average balance for impaired loans was $14,700,000 for the six months ended
June 30, 1996.
NOTE 5: ACCOUNTING FOR MORTGAGE SERVICING RIGHTS
At June 30, 1996 and 1995, and December 31, 1995, the carrying value of
mortgage servicing rights, which are reported as intangible assets on the
consolidated balance sheet, were $2,948,000, $159,000, and $589,000,
respectively. The impact of recognizing originated mortgage servicing rights
(OMSRs) as assets in the Corporation's financial statements was an increase in
non-interest income of $2,359,000 and $159,000 for the six months ended June 30,
1996 and 1995, respectively. OMSRs of $2,561,000 and $162,000 were capitalized
during the first six months of 1996 and 1995, respectively. For purposes of
measuring impairment, the Corporation stratified mortgage servicing rights on
the basis of loan term, interest rate and type of interest rate (fixed or
adjustable). The servicing assets were reduced only by normal amortization of
$202,000 and $3,000 for the six month periods ended June 30, 1996 and 1995,
respectively. No valuation allowance was required at June 30, 1995, December
31, 1995, or June 30, 1996.
Page 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
NOTE 6: INTEREST RATE CONTRACTS
Through the purchase of interest rate cap agreements (caps), the Corporation
has reduced the impact of increased interest rates on its costs to acquire
certain repurchase agreements and long-term borrowings being hedged. These caps
entitle the Corporation to receive periodic payments from counterparties based
upon the notional amount of the caps and the excess of the index rate over the
strike price. Amortization of premiums paid for interest rate caps totaled
$647,000 and $639,000 for the six months ended June 30, 1996 and 1995,
respectively. This expense was offset by counterparty reimbursements of
$398,000 during the six months ended June 30, 1996, and $742,000 during the six
months ended June 30, 1995.
At June 30, 1996, the notional amount of the interest rate caps was
$135,000,000. The caps are indexed to LIBOR with contract strike prices ranging
from 4 percent to 7 percent and mature in 1997. The carrying value and
estimated market value of the caps at June 30, 1996, was $848,000 and $675,000,
respectively.
The Corporation has entered into interest rate swaps as a hedge against
certain long-term borrowings to manage its interest rate sensitivity. The
contracts represent an exchange of interest payments and the underlying
principal balances of the liabilities are not affected. At June 30, 1996, the
Corporation had swaps with a notional value of $45,000,000. The agreements
require the Corporation to pay a fixed rate of interest ranging from 5.77% to
6.12% and receive a variable rate based on three-month LIBOR. The agreements
terminate on or prior to January 12, 2001.
The Corporation is exposed to credit losses in the event of nonperformance by
the counterparties but has no off-balance sheet credit risk of accounting loss.
Although collateral or other security is not obtained, the Corporation minimizes
its credit risk by monitoring the credit standing of the counterparties and
anticipates that the counterparties will be able to fully satisfy their
obligation under the agreements.
At June 30, 1996, option forward contracts outstanding, if exercised,
committed the Corporation to sell $23,798,000 par value of mortgage-backed
securities during the third quarter of 1996. Fees received from these contracts
have been deferred until completion of the transactions.
Page 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
NOTE 7: LONG-TERM DEBT
<TABLE>
<CAPTION>
June 30, December 31, June 30,
1996 1995 1995
---- ---- ----
<S> <C> <C> <C>
Parent Company:
Convertible subordinated debentures,
7.50%, redemptions of $1,125
annually beginning in 2001,
balance due 2011 $ 6,262 $ 6,538 $ 6,636
Redeemable subordinated debentures,
9.50% due 1997 2,187 2,187 2,192
Notes payable, unsecured:
9.81%, payable $600 annually
through 1996, balance due in 1997 3,000 3,000 3,600
Variable rate adjusted with
changes in LIBOR, payable $250
quarterly through 2000 (6.04%,
6.69% and 6.81% at June 30, 1996,
December 31, 1995, and June 30,
1995, respectively) 5,000 5,500 6,000
Variable rate adjusted with changes
in LIBOR, due 1997 (6.04% and
6.81% at June 30, 1996, and
June 30, 1995, respectively) 12,200 5,000
Subsidiaries:
Federal Home Loan Bank advances, due
at various dates through 2014
(weighted average rates of 5.54%,
5.89% and 6.37% at June 30, 1996,
December 31, 1995 and June 30, 1995,
respectively) 147,840 115,794 176,756
Notes payable, revolving credit
agreement, secured by finance
receivables, variable rate adjusted
with changes in LIBOR (6.10%, 6.63%
and 6.88% at June 30, 1996,
December 31, 1995, and June 30,
1995, respectively) 18,247 19,851 13,650
Other, including capitalized leases 5,110 5,176 5,510
--------- --------- ---------
TOTAL $199,846 $158,046 $219,344
========= ========= =========
</TABLE>
Qualifying unencumbered mortgage loans held in the loan portfolio that equal
at least 170 percent of the aggregate amount of advances have been pledged as
collateral for the Federal Home Loan Bank advances. The 9.5% subordinated
debentures are being redeemed without premium by the Corporation effective
August 15, 1996.
NOTE 8: NET INCOME PER SHARE
Net income per share has been computed by dividing net income by the weighted
average number of common and common equivalent shares outstanding during each
period. The assumed conversion of the convertible subordinated debentures into
common shares had no materially dilutive effect on net income per share. All
share data included in the notes to the financial statements and Management's
Discussion and Analysis has been adjusted for the one-for-twenty stock dividend
declared on October 18, 1995.
Page 9
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Overview
Net income for the three months ended June 30, 1996, was $9,839,000, an
increase of 18.1 percent over the $8,331,000 earned in the same period of 1995.
Net income per share increased by 17.4 percent to $.54 for the three months
ended June 30, 1996, compared to $.46 for the three months ended June 30, 1995.
Net income for the first six months of 1996 was $19,524,000 compared to
$16,245,000 earned in the same period of 1995, an increase of 20.2 percent. Net
income per share was $1.08 and $.89 for the six months ended June 30, 1996 and
1995, respectively. The increased earnings improvement was due to an improved
net interest margin and continued growth in earning assets which resulted in a
7.3 percent increase in net interest income over the first six months of 1995.
The net interest margin was 4.20 percent for the six months ended June 30, 1996,
compared to 4.17 percent for the six months ended June 30, 1995. During the
first six months of 1996 average earning assets were 6.8 percent greater than
during the same period of 1995.
Net income of $9,839,000 for the second quarter of 1996 was also increased
over 1996 first quarter results of $9,685,000. Net income per share was $.54
each for the first two quarters of 1996.
The Corporation's total assets at June 30, 1996 were $3,948,418,000, which
were 12.1 percent greater than the $3,521,701,000 at June 30, 1995, and 8.8
percent greater than total assets at December 31, 1995. Total loans of
$2,075,447,000 at June 30, 1996, increased from $1,971,454,000 at December 31,
1995, but decreased from $2,142,013,000 from one year ago. The efforts begun
during the fourth quarter 1995 to sell or securitize a significant amount of
residential real estate loans continued through the second quarter 1996. At
year-end 1995, the Corporation reclassified $209 million of fixed rate
residential mortgage loans from the loan portfolio into real estate loans held
for sale. An additional $70 million of adjustable rate mortgage loans were
reclassified into real estate loans held for sale at the end of the second
quarter of 1996. Initiated to provide more flexibility in balance sheet
management, the Corporation securitized $162 million of the fixed rate mortgages
and anticipates completing the securitization of the adjustable rate mortgages
during the third quarter of 1996.
Annualized returns on average assets and average shareholders' equity for the
six months ended June 30, 1996, were 1.06 percent and 13.15 percent,
respectively, compared with .94 percent and 11.40 percent for the same period of
1995. For the quarter ended June 30, 1996, annualized returns on average assets
and average shareholders' equity were 1.04 percent and 13.08 percent,
respectively, compared to .96 percent and 11.68 percent in the second quarter of
1995.
Cash dividends of $.21 per share were declared during the second quarter of
1996 compared with $.19 per share during the same period of 1995, representing
an increase of 10.5 percent. For the six months ended June 30, 1996 and 1995,
total dividends declared were $7,509,000 and $6,561,000, respectively.
Page 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Net Interest Income
Net interest income is the Corporation's largest component of income and
represents the difference between interest and fees earned on loans and
investments and the interest paid on interest bearing liabilities. Net interest
income was $70,494,000 for the six months ended June 30, 1996, compared with
$65,676,000 for the same period in 1995. Net interest income for the most
recent quarter was $36,102,000 compared to $32,785,000 for the three months
ended June 30, 1995. The increased net interest income was the result of a
9.6 percent and 6.8 percent increase in average earning assets on a quarter and
year-to-date basis, respectively, compared to 1995 periods, and an improved net
interest margin. Net interest income for the most recent quarter was $1,710,000
greater than the $34,392,000 recorded in the first quarter of 1996 due to the
effects of a slightly lower net interest margin offsetting a $196,509,000
increase in average earning assets.
The interest margin is a percentage computed by dividing net interest income
on a fully taxable equivalent basis ("FTE") by average earning assets and
represents a measure of basic earnings on interest bearing assets held by the
Corporation. The annualized net interest margins were 4.20 percent and 4.17
percent, respectively, for the six months ended June 30, 1996 and 1995. Average
earning assets for the six months ended June 30, 1996, increased to
$3,472,457,000 from $3,250,969,000 for the same period in 1995. Average loans
decreased by $92,211,000 to $2,021,267,000 for the first six months of 1996 and
represented 58.2 percent of earning assets compared to 65.0 percent in 1995.
Investment securities increased by 23.7 percent for the first six months of 1996
compared to 1995 and represented 38.7 percent and 33.5 percent of earning assets
for similar periods of 1996 and 1995, respectively. This shift in earning asset
mix is primarily the result of the Corporation securitizing approximately $162
million of fixed rate residential first mortgage loans during the first quarter
of 1996 as discussed under the Loans caption. The prime lending rate decreased
during the first half of 1996 by 25 basis points, as opposed to the same period
one year ago when the prime rate increased by 50 basis points. As a result of
continued efforts to alter the mix and reprice earning assets and interest
bearing liabilities acquired in recent thrift acquisitions, the Corporation has
been able to improve the net interest margin from 4.13 percent for the second
quarter of 1995 to 4.19 percent for the second quarter of 1996. The net
interest margin for the first quarter of 1996 was 4.21 percent.
An ongoing objective of the Corporation's asset/liability management policy is
to match rate-adjustable assets and liabilities at similar maturity horizons so
that changes in interest rates will not result in wide fluctuations in net
interest income. The rate sensitivity position is computed for various
repricing intervals by calculating rate sensitivity gaps. The Corporation had a
cumulative one-year negative gap on June 30, 1996, of $85,791,000 which
represented 2.3 percent of the $3,683,266,000 in earning assets at that date
and, in the opinion of management, represented a balanced position. Net
interest income at financial institutions with negative gaps tends to increase
in periods of falling interest rates and decline as interest rates rise.
Non-Interest Income
During the first six months of 1996, non-interest income, which includes
deposit fees, insurance commissions, trust fees, credit card and other non-
interest fees on loans, mortgage loan origination and servicing revenues,
investment products fees, and net securities gains, was $25,653,000 compared to
$22,069,000 reported for the same period in 1995. Net security gains of
$554,000 were recorded during
Page 11
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Non-Interest Income, continued:
the first six months of 1996 compared to $1,202,000 for the same period of 1995.
Non-interest income excluding net securities gains totaled $25,099,000, which
represented an increase of 20.3 percent over the same period of 1995.
Service charges on deposit accounts were increased by $747,000 or l4.5 percent
due to increased volumes and improved efforts to collect a greater percentage of
accessible fees. Mortgage loan origination and servicing fees increased by
$1,933,000 during the first half of 1996 compared to the same period of 1995.
The securitization of $162 million of residential mortgage loans, as
subsequently discussed under Loans, generated net gains of $2,578,000. This was
partially offset by the closing of an East Coast mortgage banking subsidiary
during the second quarter of 1995 which resulted in fewer mortgage loan
originations and related revenues during the current year. Trust fees, based
primarily on the market value of assets under management, increased by $267,000
or 10.4 percent compared to the first six months of 1995 due to an increase in
the number of accounts and an increase in the market value of assets managed.
Investment products fees increased by 28.8 percent to $1,903,000 as the
Corporation continued to place greater emphasis on sale of annuities, mutual
funds and other non-traditional banking products. Other income increased to
$3,717,000 during the six months ended June 30, 1996, from $3,023,000 for the
comparable period of 1995. The first half of 1996 included revenues of $427,000
from the expiration of interest rate option contracts and administrative service
and direct marketing revenues of $149,000. New revenue sources, including plan
administration fees, generated by the recently acquired Small, Parker and
Blossom, and non-customer ATM surcharges totaled $136,000 and $85,000,
respectively, during the second quarter 1996.
Non-Interest Income
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30, Increase
1996 1995 (Decrease)
---- ---- ----------
<S> <C> <C> <C>
Service charges on deposit accounts $ 5,893 $ 5,146 $ 747
Mortgage loan origination and servicing 5,041 3,108 1,933
Insurance premiums and commissions 3,209 3,195 14
Trust fees 2,828 2,561 267
Credit card and other non-interest fees
on loans 2,508 2,357 151
Investment products fees 1,903 1,477 426
Net securities gains 554 1,202 (648)
Other 3,717 3,023 694
-------- -------- --------
Total non-interest income $25,653 $22,069 $3,584
======== ======== ========
</TABLE>
Page 12
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Non-Interest Expense
Non-interest expense, which includes personnel, occupancy costs, equipment and
other operating expenses was $62,174,000 for the six months ended June 30, 1996,
compared to $58,968,000 for the same period of 1995, an increase of 5.4 percent.
Non-recurring charges of $2.3 million, primarily related to recent office
closures, are included in non-interest expenses for the first quarter of 1996.
Excluding these charges, non-interest expenses increased $929,000 or 1.6 percent
from the six months ended June 30, 1995.
Salaries and employee benefits increased by $2,499,000 or 8.6 percent for the
six month period in 1996 over 1995. A portion of this increase is due to
increased staff from acquisitions since June 30, 1995. Performance-based
incentives and commissions increased $597,000 during the first half of 1996
compared to 1995 due to increased sales activity and earnings. The remaining
increase was generally due to normal salary increases, additional staff and
related expenses associated with increased business activity. Data processing
expense in 1996 increased by $79,000 due to credit card processing expenses
increasing by $326,000. The issuance of additional credit cards and the related
increased transaction volumes resulted in increased processing expenses. This
increase in expense was partially offset by savings realized from the conversion
of four wholly-owned entities to our internal data processing systems during the
last three quarters of 1995. Occupancy expenses increased by $284,000 to
$4,182,000 and equipment expense increased by $184,000 to $3,536,000 during the
first half of 1996 due to additional banking offices acquired, as compared to
the same period of 1995. Advertising and promotion expense increased by
$521,000 during the six months ended June 30, 1996, compared to the same period
one year ago due to increased marketing efforts related to loan and deposit
promotions, Corporate identity promotions and non-traditional banking services.
Expenses for postage and freight increased by $288,000 during the first six
months of 1996 compared to 1995 primarily due to mailing promotional materials
related to various loan and deposit direct marketing campaigns and increased
communications with a larger customer and shareholder base. Professional fees
totaled $1,714,000 at June 30, 1996, $264,000 less than the same period a year
ago. These expenses were higher during 1995 due to the UF Bancorp and other
mergers consummated August 1995. FDIC assessments decreased by $1,896,000
during the six months ended June 30, 1996, compared to the same period of 1995.
The assessment rate was reduced from $.23 to only minimal amounts for deposits
insured by the Bank Insurance Fund (BIF) effective January 1, 1996. The portion
of the Corporation's deposits acquired from thrifts over the years remains
insured by the Savings Association Insurance Fund (SAIF) of the FDIC which
continues to be assessed at $.23 per $100 of deposits. Congress is currently
considering a special, one-time assessment on SAIF-insured deposits. If
enacted, this assessment could result in a one-time, pre-tax charge of up to
$7,300,000, which could be offset by lower insurance costs in the future. Other
expenses were increased by $1,474,000 during the first half of 1996 compared to
the same period of 1995. One-time charges of $1,983,000, related to the recent
closure of five offices, accounted for all of this increase. These offices were
generally near other Corporate-owned banking facilities and no significant loss
of customer base is anticipated. Operating expenses as a percentage of
revenues, commonly referred to as the efficiency ratio, improved from 66.4
percent to 62.9 percent during the first six months of 1995 and 1996,
respectively.
Page 13
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Non-Interest Expense
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30, Increase
1996 1995 (Decrease)
---- ---- ----------
<S> <C> <C> <C>
Salaries and employee benefits $31,417 $28,918 $ 2,499
Data processing and other services 5,989 5,910 79
Occupancy expense 4,182 3,898 284
Equipment expense 3,536 3,352 184
Advertising and promotion 2,273 1,752 521
Postage and freight 1,854 1,566 288
Printing and supplies 1,810 1,773 37
Professional fees 1,714 1,978 (264)
FDIC assessments 1,036 2,932 (1,896)
Other 8,363 6,889 1,474
-------- -------- --------
Total non-interest expense $62,174 $58,968 $ 3,206
</TABLE>
Income Tax Expense
Income tax expense was $10,862,000 for the six months ended June 30, 1996,
compared with $9,481,000 for the same period in 1995. The effective tax rate
was 35.7 percent and 36.9 percent for the six months ended June 30, 1996 and
1995, respectively. The decline in the effective tax rate can be attributed to
an increase in tax free income from tax exempt investments.
Loans
Total loans were $2,075,447,000 at June 30, 1996, compared to $2,142,013,000
at June 30, 1995, and $1,971,454,000 at December 31, 1995. The loan portfolio
increased by $104.0 million from year-end 1995 but decreased by $66.6 million or
3.1 percent from one year ago. At year-end 1995, management made a decision to
sell or securitize a significant amount of residential mortgage loans and
reclassified $209 million from the loan portfolio to real estate loans held for
sale. Approximately $162 million of fixed rate residential loans were
securitized during the first quarter 1996 and $38 million that could not be
securitized was returned to the loan portfolio. Management continued its
efforts to sell or securitize residential mortgage loans throughout 1996 and
during the second quarter learned that certain adjustable rate loans could be
securitized. Consequently, $70 million of adjustable rate first mortgages were
reclassified from the loan portfolio to real estate loans held for sale. It is
anticipated that these loans will be securitized during the third quarter. No
significant additional amount of portfolio loans is expected to be securitized
but current production of residential loans will continue to be sold or
securitized from time-to-time. Commercial loans totaled $555,571,000 at
December 31, 1995, compared to $598,361,000 and $337,208,000 at June 30, 1996
and 1995, respectively. As of December 31, 1995, the Corporation reclassified
$215 million of real estate mortgage loans secured by owner-occupied commercial
or service related businesses. Management believes that classifying such loans
as commercial loans is more consistent with their underwriting criteria and also
more accurately reflects the credit risk associated with such loans. As prior
year's loan balances in the accompanying table have not been reclassified using
the
Page 14
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Loans, continued
new criteria, the $261.2 million increase in commercial loans must be viewed in
the context of the reclassification. Real estate mortgage loans, which consist
of residential, commercial and agricultural loans secured by real estate and
construction loans, totaled $893,076,000 at June 30, 1996, compared to
$1,265,242,000 one year prior. Residential real estate loans decreased as the
Corporation reclassified $209 million of fixed rate and $70 million of
adjustable rate first mortgage real estate loans to loans held for sale as
discussed above. The Corporation has continued to experience demand for new
residential real estate mortgage loans, but has sold most new production during
the current quarter. Customer preference in the current rate environment has
shifted from adjustable rate residential real estate loans to fixed rate 15-
year and shorter term balloon loans. In addition to residential real estate
mortgages reported as loans, the Corporation held $76,150,000 and $222,157,000
of real estate loans for sale at June 30, 1996, and December 31, 1995,
respectively. These loans were $29,726,000 at June 30, 1995.
Consumer loans at June 30, 1996, were $46.6 million greater than at June 30,
1995, and $22.1 million greater than at December 31, 1995. Of this increase
from year-end, $18.9 million is the result of the recent acquisitions. Direct
consumer loan demand has continued through 1995 and 1996 due to direct mail and
in-office promotions, for both fixed and variable rate automobile and other
personal loans. The volume of new indirect consumer loans purchased through
automobile dealers, however, was not sufficient to replace normal payments and
payoffs and these balances continued to decline during late 1995 and early 1996.
New marketing efforts were initiated and the volume of these loans purchased
late in the first quarter and thus far in the second quarter has increased.
Loans Outstanding
(in thousands)
<TABLE>
<CAPTION>
June 30, Increase
1996 1995 (Decrease)
---- ---- ----------
<S> <C> <C> <C>
Commercial, industrial and agricultural
production loans $ 598,361 $ 555,571 $ 337,208
Tax exempt loans 21,014 23,354 23,154
Real estate mortgage loans:
Commercial and agricultural 147,287 136,941 343,783
Construction 60,480 48,690 64,976
Residential 685,309 665,986 856,483
Consumer loans 562,996 540,912 516,409
---------- ---------- ----------
Total loans $2,075,447 $1,971,454 $2,142,013
========== ========== ==========
</TABLE>
The Corporation's loan portfolio contains no loans to foreign governments,
foreign enterprises, foreign operations of domestic companies, nor any
concentrations to borrowers engaged in the same or similar industries that
exceed 10 percent of total loans.
Page 15
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Loan Quality
The allowance for loan losses is maintained at a level considered adequate to
absorb potential loan losses based upon quarterly evaluations of the loan
portfolio by management and the boards of directors of the Corporation and each
subsidiary bank. These evaluations include consideration of past loan loss
experience, changes in the composition of the portfolio, the volume and
condition of loans outstanding, expected cash flows or the observable market
price of the loans or the fair value of the collateral for impaired loans, as
well as current economic conditions.
Summary of Allowance for Loan Losses
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
---- ----
<S> <C> <C>
Beginning balance $28,806 $28,502
Allowance of subsidiaries at acquisition date 1,872
Provision for loan losses 3,587 3,051
Loans charged-off (6,287) (3,998)
Recoveries 1,611 952
-------- --------
Ending balance $29,589 $28,507
======== ========
Percent of total loans 1.43% 1.33%
</TABLE>
The allowance for loan losses was $29,589,000 at June 30, 1996, representing
1.43 percent of total loans, compared with $28,507,000 at June 30, 1995, which
represented 1.33 percent of total loans. At December 31, 1995, the allowance
for loan losses was $28,806,000 and represented 1.46 percent of total loans.
Annualized net charge-offs to average loans increased to .46 percent during the
first half of 1996 from .29 percent for the same period of 1995. The increase
is primarily the result of a single $1.6 million commercial loan, previously
classified as non-accrual, charged-off during the second quarter. The provision
for loan losses to average loans was .35 percent and .29 percent for the six
months ending June 30, 1996 and 1995, respectively. The allowance for loan
losses to non-performing loans at June 30, 1996, and 1995, and at December 31,
1995, were 162 percent, 156 percent, and 138 percent, respectively.
Page 16
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Loan Quality (continued)
Non-Performing and Risk Assets
(in thousands)
<TABLE>
<CAPTION>
June 30, December 31, June 30,
1996 1995 1995
---- ---- ----
<S> <C> <C> <C>
Non-accrual loans:
Commercial, agricultural, and
tax exempt $ 9,444 $10,393 $ 3,461
Real estate mortgage 5,699 6,326 11,549
Consumer 1,768 3,194 2,218
-------- -------- --------
Total non-accrual 16,911 19,913 17,228
Restructured loans:
Commercial, agricultural, and
tax exempt 668 479 846
Real estate mortgage 612 464 191
Consumer 43 5
-------- -------- --------
Total restructured 1,323 948 1,037
-------- -------- --------
Total non-performing loans 18,234 20,861 18,265
Foreclosed properties 3,193 1,727 2,652
-------- -------- --------
Total non-performing assets 21,427 22,588 20,917
90 days or more past due:
Commercial, agricultural,
and tax exempt 1,406 344 442
Real estate mortgage 1,422 1,285 827
Consumer 1,887 598 1,425
-------- -------- --------
Total 90 days or more past due 4,715 2,227 2,694
-------- -------- --------
Total risk assets $26,142 $24,815 $23,611
======== ======== ========
Risk assets to loan-related assets 1.26% 1.26% 1.10%
</TABLE>
Risk assets consist of non-performing loans, foreclosed properties and loans
90 days or more past due but accruing. Although these assets have more than a
normal risk of loss, they will not necessarily result in a higher level of
future charge-offs or losses.
Non-performing loans consist of loans classified as troubled debt
restructurings and loans on non-accrual status. As indicated by the previous
table, the Corporation's non-performing loans as of June 30, 1996, totaled
$18,234,000, a decrease of $2.6 million from December 31, 1995. The non-
performing loans to total loans ratio was .88 percent on June 30, 1996, as
compared to .85 percent on June 30, 1995, and 1.06 percent on December 31, 1995.
In addition to loans classified as non-performing, there were other loans
totaling $5,824,000, at June 30, 1996, where the borrowers are experiencing
difficulties and management is closely monitoring the borrowers' abilities to
comply with payment terms. However, conditions at this time do not warrant
classification as non-performing.
Page 17
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Deposits and Other Sources of Funds
Total deposits were $2,886,170,000 at June 30, 1996, compared to
$2,620,835,000 and $2,789,989,000 at June 30, 1995, and December 31, 1995,
respectively. Non-interest bearing deposits increased from June 30, 1995 by
$25.8 million while interest bearing deposits were increased by $239.5 million.
Since December 31, 1995, non-interest bearing deposits, which were seasonally
high at year-end, declined by $101 thousand and interest bearing deposits
increased by $96.3 million. The mix of interest bearing deposits is continuing
to shift to certificates of deposit as competitive pricing on these products
modified customers' previous preferences of interest bearing checking, savings
and money market deposit accounts.
Securities sold under repurchase agreements are acquired in national markets
as well as from the Corporation's commercial customers as part of a cash
management service. Repurchase agreements were $445,124,000, $324,013,000, and
$325,271,000 at June 30, 1996, June 30, 1995, and December 31, 1995,
respectively, and play a key role in funding earning assets. A portion of these
repurchase agreements, acquired to fund certain fixed rate earning assets, is
being hedged by interest rate caps.
Long-term debt totaled $199,846,000 at June 30, 1996, compared to $219,344,000
at June 30, 1995, and $158,046,000 at December 31, 1995. Repurchase agreements,
federal funds purchased, other short-term borrowings and long-term debt
increased in aggregate by $215,937,000 from December 31, 1995 to fund the growth
in earning assets. Earning assets increased by $310,549,000 to $3,683,266,000
during this period, with only $96,181,000 of this increase funded by deposit
growth.
Investment Securities
Total investment securities available for sale and held to maturity
represented 40.8 percent of earning assets at June 30, 1996, compared to 33.4
percent and 34.7 percent at June 30, 1995, and December 31, 1995, respectively.
This increase in the investment portfolio is primarily the result of the
Corporation securitizing approximately $162 million of fixed rate residential
mortgage loans, as discussed previously. The portfolio has continued to shift
toward investments in mortgage-backed securities, predominately underwritten to
the standards of, and guaranteed by government sponsored agencies. These
securities generally yield 70-100 basis points more than comparable U.S.
Treasury securities. Mortgage-backed securities differ from traditional debt
securities in that they have uncertain maturity dates and are priced based on
estimated prepayment rates on the underlying mortgages. Prepayment rates
generally can be expected to increase during periods of lower interest rates as
the underlying mortgages are refinanced at lower market rates. Conversely, the
average lives of these securities generally are extended as interest rates
increase. The estimated average life of these securities and the overall
portfolio was 4.0 years and 4.5 years, respectively, at June 30, 1996.
Liquidity and Capital Resources
Liquidity is a measure of the Corporation's ability to meet its customers'
present and future deposit withdrawals and increased loan demand without unduly
penalizing earnings. The Corporation manages its liquidity needs through a
coordinated asset/liability management program directed by the Funds Management
and Investment Committee.
Page 18
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Liquidity is provided by projecting credit demand and other financial needs
and then maintaining sufficient cash and assets readily convertible into cash or
available federal funds lines to meet these requirements. The Corporation has
provided for its liquidity needs through growth in core deposits, maturing loans
and investments in its securities portfolio, and by maintaining adequate
balances in other short-term securities and money market assets. At June 30,
1996, the Corporation had $175,603,000 in investment securities maturing within
one year. The Corporation additionally has federal funds lines and other
borrowing sources available to it and its banks. Investment securities maturing
within one year and unused borrowing sources were considered by management to
provide adequate liquidity in view of projected needs.
Total shareholders' equity at June 30, 1996, was $303,535,000, compared to
$297,693,000 at December 31, 1995. The Federal Reserve Board has established a
minimum leverage ratio of 3.0 percent for the most highly rated bank holding
companies that do not anticipate significant growth. All other institutions are
required to maintain a ratio of 4.0 to 5.0 percent depending on their particular
circumstances and risk profile. This ratio is defined as shareholders' equity
less non-qualifying intangible assets, as a percentage of the sum of quarter to
date total average assets less non-qualifying intangible assets. The
Corporation's leverage ratio at June 30, 1996, was 7.44 percent as compared to
7.56 percent at the end of 1995. The Federal Reserve Board has also adopted
risk-based capital guidelines which assign various risk weightings to assets and
off-balance sheet items and set minimum capital requirements. Banks are
required to have core capital (Tier 1) of at least 4.0 percent of risk weighted
assets and total capital of 8.0 percent of risk weighted assets. Tier 1 capital
consists primarily of shareholders' equity less intangible assets; and total
capital consists of Tier 1 capital, certain long-term debt and convertible
debentures and a portion of the allowance for loan losses. Under the provisions
of the Federal Deposit Insurance Corporation Improvement Act of 1991,
institutions must have a leverage ratio of 5.0 percent or above, Tier 1 capital
to risk-based assets of 6.0 percent or above, and total capital to risk-based
assets of 10.0 percent or above in order to qualify as well capitalized. At
June 30, 1996, the Corporation's leverage, Tier 1 and total capital ratios were
7.44 percent, 12.07 percent, and 13.68 percent, respectively, well above all
regulatory minimums. Furthermore, each of the Corporation's subsidiary banks
has been rated as "well capitalized" by the Federal Deposit Insurance
Corporation. The Corporation is not aware of any current recommendations by its
regulatory authorities or any other known trends, events, or uncertainties that
will have or that are reasonably likely to have a material effect on its
liquidity, capital resources, or operations.
Page 19
PART II. OTHER INFORMATION
Item 1. Legal Proceedings None
Item 2. Changes in Securities None
Item 3. Defaults Upon Senior Securities None
Item 4. Submission of Matters to a Vote of Security Holders None
Item 5. Other Information None
Item 6. Exhibits and Reports on Form 8-K
Exhibits
a. The following exhibit is submitted herewith:
27 - Financial Data Schedule
Reports on Form 8-K
b. No reports were filed
No other information is required to be filed under Part II of the form.
Page 20
CNB Bancshares, Inc.
FORM 10-Q
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.
CNB Bancshares, Inc.
(Registrant)
Date August 9, 1996 by /s/ James J. Giancola
James J. Giancola,
President and Chief Executive Officer
Date August 9, 1996 by /s/ Ralph L. Alley
Ralph L. Alley, Senior Vice President
and Controller, Treasurer
(Principal Accounting Officer)
Page 21
EXHIBIT INDEX
Reg. S-K
Exhibit No. Description of Exhibit Page
27 Financial Data Schedule 23
Page 22
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from CNB
Bancshares, Inc's consolidated balance sheet as of June 30, 1996 and the
consolidated statement of income for the six months ended June 30, 1996, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 117,594
<INT-BEARING-DEPOSITS> 257
<FED-FUNDS-SOLD> 28,150
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,264,419
<INVESTMENTS-CARRYING> 238,843
<INVESTMENTS-MARKET> 236,417
<LOANS> 2,151,597
<ALLOWANCE> 29,589
<TOTAL-ASSETS> 3,948,418
<DEPOSITS> 2,886,170
<SHORT-TERM> 525,219
<LIABILITIES-OTHER> 33,648
<LONG-TERM> 199,846
0
0
<COMMON> 18,339
<OTHER-SE> 285,196
<TOTAL-LIABILITIES-AND-EQUITY> 3,948,418
<INTEREST-LOAN> 97,520
<INTEREST-INVEST> 44,743
<INTEREST-OTHER> 582
<INTEREST-TOTAL> 142,845
<INTEREST-DEPOSIT> 57,195
<INTEREST-EXPENSE> 72,351
<INTEREST-INCOME-NET> 70,494
<LOAN-LOSSES> 3,587
<SECURITIES-GAINS> 554
<EXPENSE-OTHER> 62,174
<INCOME-PRETAX> 30,386
<INCOME-PRE-EXTRAORDINARY> 30,386
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,524
<EPS-PRIMARY> 1.08
<EPS-DILUTED> 1.08
<YIELD-ACTUAL> 4.20
<LOANS-NON> 16,911
<LOANS-PAST> 4,715
<LOANS-TROUBLED> 1,323
<LOANS-PROBLEM> 5,824
<ALLOWANCE-OPEN> 28,806
<CHARGE-OFFS> 6,287
<RECOVERIES> 1,611
<ALLOWANCE-CLOSE> 29,589
<ALLOWANCE-DOMESTIC> 25,005
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 4,584
</TABLE>
