U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
For the Quarter Ended March 31, 1995
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from ___________________ to
__________________
Commission file number 0-12724
Belmont Bancorp.
An Ohio Corporation
IRS Employer ID number - 34-1376776
325 Main Street
Bridgeport, Ohio 43912
Telephone (614) 695-3323
Check whether the issuer (1) filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act
during the past 12 months, and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___
The number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
Common Stock, $0.50 par value,
2,114,644 shares outstanding
as of May 11, 1995
<PAGE>
FORM 10-Q
BELMONT BANCORP.
Quarter Ending March 31, 1995
INDEX
Part I. Financial information
Financial highlights
Management's report on financial statements
Consolidated Statements of Condition - March 31, 1995,
December 31, 1994, and March 31, 1994
Consolidated Statements of Income-Three Months
Ended March 31, 1995 and March 31, 1994
Consolidated Statements of Cash Flows-Three Months
Ended March 31, 1995 and March 31, 1994
Consolidated Statements of Changes in Shareholders' Equity
Three Months Ended March 31, 1995 and Year Ended
December 31, 1994
Notes to the Consolidated Financial Statements
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Part II - Other Information
Legal Proceedings
Changes in Securities
Defaults upon Senior Securities
Submission of Matters to a Vote of Security Holders
Other Information
Signature page
<PAGE>
<TABLE>
BELMONT BANCORP. AND
SUBSIDIARIES
Financial Highlights
<CAPTION>
<S> <C> <C> <C>
March 31 1995 1994 % Change
Earnings and dividends
($000's)
Net income $1,006 $641 56.9
Operating earnings (1) 1,242 844 47.2
Cash dividends declared on
common stock 222 178 24.7
Per common share (2):
Net income $0.4663 $0.2937 58.8
Cash dividends declared 0.1050 0.0840 25.0
Book value 9.86 8.62 14.5
Market price :
High 36.00 22.00 63.6
Low 30.00 21.00 42.9
At quarter-end ($000's)
Assets $309,532 $271,934 13.8
Loans and leases 146,908 130,226 12.8
Deposits 258,774 239,639 8.0
Stockholders' equity 21,860 19,215 13.8
Key Ratios
Return on average assets 1.28% 0.95% 35.4
Return on average common 19.87% 13.40% 48.3
shareholders' equity
Net interest margin (TE) 4.55% 3.96% 14.9
Number of shares (2) 2,114,644 2,114,332 0.0
Number of full time equivalent
employees 112.0 107.0 4.7
Total assets per FTE
employee $2,764 $ 2,541 8.7
<FN>
<F1>
(1) Operating earnings are defined as earnings before income taxes
minus securities and trading gains or plus securities and
trading losses.
<F2>
(2) Per common share amounts (except for market prices)
have been restated for the effect of a 25% common stock
dividend paid in July 1994 and a 100% common stock dividend
to be distributed May 8, 1995.
</TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
MANAGEMENT'S REPORT ON FINANCIAL STATEMENTS
The following consolidated financial statements and related
notes of Belmont Bancorp. and subsidiaries were prepared by
management which has the primary responsibility for the integrity
of the financial information. The statements are prepared in
conformity with generally accepted accounting principles
appropriate in the circumstances, and include amounts that are
based on management's best estimates and judgments. Financial
information elsewhere in the quarterly report is prepared on a
basis consistent with that in the financial statements.
In meeting its responsibility for the accuracy of the
financial statements, management relies on the Corporation's
comprehensive system of internal accounting controls. This system
provides reasonable assurance that assets are safeguarded and
transactions are recorded to permit the preparation of appropriate
financial information. The system of internal controls is
characterized by an effective control oriented environment within
the Corporation which is augmented by written policies and
procedures, internal audits and the careful selection and training
of qualified personnel.
The functioning of the accounting system and related internal
accounting controls is under the general oversight of the Audit
Committee of the Board of Directors which is comprised of five
outside directors. The accounting system and related controls are
reviewed by a program of internal audits and by the Corporations'
independent accountants. The Audit Committee meets regularly with
the internal auditor and the independent public accountants to
review the work of each and ensure that each group is properly
discharging its responsibilities. In addition, the Committee
reviews and approves the scope and timing of the internal and
external audits and any findings with respect to the system of
internal controls. Reports of examinations conducted by federal
regulatory agencies are also reviewed by the Committee.
The annual consolidated financial statements of Belmont
Bancorp. and subsidiaries will be examined by S.R. Snodgrass A.C.,
the Corporation's independent certified public accountants. Their
examination will be conducted in accordance with generally
accepted auditing standards and will include a review of internal
controls and a test of transactions in sufficient detail to allow
them to report on the fair presentation of the consolidated
operating results and financial condition of Belmont Bancorp. and
subsidiaries.
BASIS OF PRESENTATION
The consolidated financial statements include the accounts of
Belmont Bancorp. and its subsidiaries, Belmont National Bank and
Belmont Financial Network.
<TABLE>
CONSOLIDATED BALANCE SHEET
(Unaudited) ($ expressed in 000s)
BELMONT BANCORP.
<CAPTION>
March 31, December March 31,
31,
1995 1994 1994
ASSETS <C> <C> <C>
<S>
Cash and due from
banks 7,885 11,770 7,676
Federal funds sold 0 0 260
Securities available-
for-sale 53,088 49,132 43,463
Securities in trading
account 0 0 0
Securities held to
maturity (market value
of $87,500, $86,828 and
$76,201, respectively) 90,104 92,463 78,124
Loans 146,908 147,096 130,226
Less allowance for
possible loan losses 1,931 1,537 1,457
Net loans 144,977 145,559 128,769
Premises and equipment, net 4,894 4,648 4,357
Other real estate owned 586 586 69
Accrued income receivable 2,065 2,133 1,789
Other assets 5,933 6,672 7,427
Total assets 309,532 312,963 271,934
LIABILITIES
Non-interest bearing
deposits:
Demand 24,420 27,269 22,524
Interest bearing
deposits:
Demand 24,861 26,273 27,708
Savings 77,627 84,023 102,905
Time 131,866 118,358 86,502
Total deposits 258,774 255,923 239,639
Short term borrowings 27,386 35,498 12,076
Accrued interest on
deposits and other
borrowings 771 590 480
Other liabilities 741 738 524
Total liabilities 287,672 292,749 252,719
SHAREHOLDERS' EQUITY
Preferred stock -
authorized, 90,000
shares with no par value;
issued and outstanding, none 0 0 0
Senior cumulative
preferred stock- authorized,
issued and outstanding
10,000 shares with a
$100 par value 1,000 1,000 1,000
Common stock - $0.50
par value, 8,900,000 shares
authorized;
2,115,060 issued 1,057 3,777 3,023
Surplus 7,253 5,061 5,061
Treasury stock (424
shares and 728 shares,
respectively) (8) (8) (7)
Retained earnings:
Unappropriated 11,790 11,026 9,873
Appropriated for contingencies 850 850 850
Stock dividend to
be distributed 529 0 0
Net unrealized loss
on securities
available for sale (611) (1,492) (585)
Total Shareholders' equity 21,860 20,214 19,215
Total liabilities
and shareholders' equity 309,532 312,963 271,934
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) ($ expressed in 000s except per share amounts)
BELMONT BANCORP.
Three Months
Ended Increase
3/31/95 3/31/94 (Decrease)
<S> <C> <C> <C>
INTEREST INCOME
Loans & lease financing:
Taxable $3,346 $ 2,608 $ 738
Tax-exempt 58 40 18
Investment securities:
Taxable 2,099 1,354 745
Tax-exempt 355 229 126
Dividends 1 1 -
Interest on trading securities - - -
Interest on federal funds sold 17 3 14
Total interest income 5,876 4,235 1,641
INTEREST EXPENSE
Deposits 2,249 1,825 424
Short-term borrowings 497 62 435
Total interest expense 2,746 1,887 859
Net interest income 3,130 2,348 782
Provision for possible loan
losses 400 250 150
Net interest income after
provision for possible loan
losses 2,730 2,098 632
NON-INTEREST INCOME
Trust fees 183 132 51
Service charges on deposits
and loan accounts 153 138 15
Other operating income 116 120 (4)
Investment securities gains
(losses) 1 (3) 4
Gains (losses) on securities
available for sale 126 18 108
Trading gains(losses) - - -
Total non-interest income 579 405 174
NON-INTEREST EXPENSE
Salary and employee benefits 805 634 171
Net occupancy expense of
premises 147 140 7
Equipment expenses 177 143 34
Other operating expense 811 727 84
Total non-interest expense 1,940 1,644 296
Income before income taxes 1,369 859 510
Income taxes
363 218 145
NET INCOME $1,006 $ 641 $ 365
Weighted average number of 2,114,644 2,114,332
shares outstanding
EARNINGS PER COMMON SHARE $0.4663 $ 0.2937
</TABLE>
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Months Ended March 31
(Unaudited) ($ expressed in 000s)
BELMONT BANCORP.
<CAPTION>
<S> <C> <C>
1995 1994
OPERATING ACTIVITIES:
Net income 1,006 641
Adjustments to reconcile net
income to net cash flows
provided by operating activities:
Provision for loan losses 400 250
Depreciation expense 149 124
Amortization of investment
security premiums 242 664
Accretion of investment security
discounts (127) (63)
Investment and trading securities
(gains) losses (128) (15)
Proceeds on sale of securities
available for sale 27,113 7,383
Purchase of securities available
for sale (31,555) (6,289)
Loss (Gain) on sale of fixed assets 4 0
Gain on sale of loans (10) 0
(Increase) decrease in
interest receivable 68 (76)
Increase (decrease) in interest
payable 181 27
Others, net 290 121
NET CASH PROVIDED BY
OPERATING ACTIVITES (2,367) 2,767
INVESTING ACTIVITIES:
Proceeds from maturities and calls of
investment securities 981 511
Purchases of investment securities (762) (15,194)
Principal collected on mortgage-
backed securities 3,973 11,390
Net (increase) decrease in loans and
leases, net of charge offs (1,459) (5,416)
Proceeds on loans sold 1,740 0
Loans purchased (94) 0
Recoveries on loans previously 6 12
charged off
Purchases of fixed assets (404) (21)
Proceeds on sale of fixed assets 4 0
NET CASH USED BY
INVESTING ACTIVITIES 3,985 (8,718)
FINANCING ACTIVITIES:
Net increase (decrease) in deposits 2,851 (3,593)
Net increase (decrease) in
short-term borrowings (8,112) 8,367
Dividends paid on common and
and preferred stock (242) (203)
Sale of treasury stock 0 7
NET CASH PROVIDED BY FINANCING
ACTIVITIES (5,503) 4,578
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (3,885) (1,373)
Cash and Equivalents, Beginning 11,770 9,309
Cash and Equivalents, Ending 7,885 7,936
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited) ($ expressed in 000s)
BELMONT BANCORP.
Year Ended December 31, 1993 and
Three Months Ended March 31, 1995
<CAPTION> Unrealized
Stock Loss on
Retained Earnings Dividend Securities
Preferred Common Unappro- Appro- to be Treasury Available-
Stock Stock Surplus priated priated Distributed Stock for-Sale
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance,
December
31, 1993 1,000 2,749 3,647 11,122 850 0 (13) 0
Effect of adopting
SFAS 115 6
10% Common stock
dividend at fair
market value 274 1,413 (1,687)
25% Common stock
dividend at
par value 754 (754)
1994 Net income 3,234
Cash dividends
declared:
Preferred stock (80)
Common stock
($0.3780 per share) (799)
Cash paid in lieu- (10)
stock dividends
Change in unrealized
loss-securities
available for sale (1,498)
Sale of treasury
stock 1 5
Balance, December 31,
1994 1,000 3,777 5,061 11,026 850 (8) (1,492)
100% Common stock
dividend to be
distributed
at par value (3,775) 3,775
1995 Net income 1,006
Cash dividends
declared:
Preferred stock (20)
Common stock
($0.1050 per share) (222)
Change in unrealized
loss-Securities
available-for-sale 881
Change in par value (2,720) 5,967 (3,246)
Balance,
March 31, 1995 1,000 1,057 7,253 11,790 850 529 (8) (611)
</TABLE>
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The foregoing financial statements are unaudited, however, in
the opinion of Management, all adjustments necessary for a fair
presentation of the financial statements have been included. A
summary of the Corporation's significant accounting policies is
set forth in Note 1 to the Consolidated Financial Statements in
the Corporation's Annual Report on Form 10-K for 1994.
Related party transactions - The Corporation's and it
Subsidiaries' directors and officers and their associates were
customers of, and had other transactions with, the subsidiary bank
in the ordinary course of business during 1995. All loans and
commitments included in such transactions were made on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other persons and did not involve more than the
normal risk of collectibility.
On February 21, 1995, the Board of Directors declared a 2 for
1 stock split payable in the form of a 100% common stock dividend
subject to the approval by the shareholders at the annual meeting
of an amendment to the Corporation's Articles of Incorporation to
increase the number of authorized shares of capital stock to
9,000,000 shares of which 8,900,000 would be designated as common
stock. Approval for this proposal was received at the annual
meeting held April 18, 1995. In addition, the shareholders
approved an amendment to the Corporation's Articles of
Incorporation to reduce the par value of its common stock from
$3.57 per share to $0.50 per share. These amendments are
reflected in the accompanying financial statements as of March 31,
1995. All references in the accompanying financial statements to
the number of common shares and per share amounts for 1994 and for
the first quarter of 1995 have been restated to reflect the stock
dividend to be paid on May 8, 1995 to shareholders of record May
1, 1995. It is expected that as a result of the stock dividend,
1,057,322 additional shares will be issued.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
SUMMARY
The net income of Belmont Bancorp. for the three months ended
March 31, 1995 increased 56.9% to $1,006,000, compared to $641,000
for the first three months of 1994. Earnings per common share
were $0.47 for the first three months of 1995, compared to $0.29
for the corresponding period last year, an increase of 62.1%.
Operating earnings increased to $1,242,000 for the three months of
1995, up 47.2% from $844,000 for the same period last year.
The following table presents the return on average
shareholders' equity and the return on average assets for
comparative periods of 1995 and 1994.
<TABLE>
<CAPTION>
Quarter ended
March 31,
($000s) 1995 1994
<S> <C> <C>
Return on average assets 1.28% 0.95%
Return on
shareholders' equity 19.30% 13.12%
Return on average
common equity 19.87% 13.40%
Average assets $313,890 $270,791
Average shareholders'
equity $20,854 $19,543
</TABLE>
Average assets increased $43.1 million from $270.8 million to
$313.9 million from March 31, 1994 to March 31, 1995. Average
shareholders' equity increased $1.3 million through the retention
of earnings.
NET INTEREST INCOME
A major share of the Corporation's income results from the
spread between income on earning assets and interest expense on
the liabilities used to fund those assets. Net interest income
is affected by changes in interest rates and the amounts and
distributions of interest earning assets and interest bearing
liabilities outstanding. Net interest margin is net interest
income divided by the average earning assets outstanding. A third
frequently used measure is net interest rate spread which is the
difference between the average rate earned on assets and the
average rate paid on liabilities without regard to the amounts
outstanding in either category.
Table 1, Consolidated Average Balance Sheets and Analysis of
Net Interest Income, compares interest revenue and interest
earning assets outstanding with interest cost and liabilities
outstanding for the three months ended March 31, 1995, 1994 and
1993. The table contains net interest income, net interest margin
and net interest rate spread for each period. All three of these
measures are reported on a taxable equivalent basis.
The taxable equivalent yield on interest earning assets
increased from 7.00% during the first quarter of 1994 to 8.31% in
1995, an increase of 131 basis points. (A basis point (bp) is
equivalent to .01%.) The cost of interest bearing liabilities
rose 80 basis points from 3.38%% during the first quarter of 1994
to 4.18% in 1995. The net interest margin increased from 3.96% to
4.55% during the comparative quarters.
Table 2, Analysis of Net Interest Income Changes, separates
the dollar change in the Corporation's net interest income into
three components: changes caused by (1) an increase or decrease
in the average asset and liability balances outstanding (volume);
(2) the changes in average yields on interest earning assets and
average rates for interest bearing liabilities (yield/rate); and
(3) combined volume and yield/rate effects (mix).
<TABLE>
TABLE 1. - CONSOLIDATED AVERAGE BALANCE SHEETS AND
ANALYSIS OF NET INTEREST INCOME
(Fully Taxable Equivalent Basis) ($000's)
<CAPTION>
Three Months Ended March 31,
1995 1994 1993
Average Average Average Average Average Average
Out- Revenue/ Yield/ Out- Revenue/ Yield/ Out- Revenue/ Yield/
standing Cost Rate standing Cost Rate standing Cost Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Interest earning
assets
Loans and
leases $147,013 $3,431 9.46% $127,892 $2,667 8.46% $114,503 $2,617 9.27%
Securities
Taxable 122,429 2,099 6.95% 107,404 1,355 5.12% 116,880 1,418 4.92%
Exempt from
income tax 25,177 515 8.30% 16,636 329 8.02% 12,298 263 8.67%
Trading
account assets 0 0 0.00% 0 0 0.00% 0 0 0.00%
Federal funds
sold 1,191 17 5.79% 468 3 2.60% 1,791 14 3.17%
Interest
bearing
deposits 0 0 0.00% 0 0 0.00% 102 1 3.98%
Total interest
earning assets 295,810 6,062 8.31% 252,400 4,354 7.00% 245,574 4,313 7.12%
Cash and due
from banks 8,472 8,168 7,500
Other assets 13,165 11,736 11,440
Valuation
allowance-
available for
sale
securities (1,869) (10) 0
Allowance for
possible loan
loss (1,688) (1,503) (1,135)
Total assets 313,890 270,791 263,379
Liabilities
Interest
bearing
liabilities
Interest
checking 25,070 144 2.33% 27,274 142 2.11% 31,422 206 2.66%
Savings 80,203 590 2.98% 101,197 750 3.01% 72,351 600 3.36%
Other time
deposits 125,391 1,515 4.90% 89,186 933 4.24% 118,249 1,437 4.93%
Short term
borrowings 35,507 497 5.68% 8,537 62 2.95% 3,511 24 2.77%
Total interest
bearing
liabilities 266,171 2,746 4.18% 226,194 1,887 3.38% 225,533 2,267 4.08%
Demand deposits 25,274 23,508 18,972
Other
liabilities 1,591 1,546 1,338
Total
liabilities 293,036 251,248 245,843
Shareholders'
equity 20,854 19,543 17,536
Liabilities &
shareholders'
equity 313,890 270,791 263,379
Net interest
income
margin on a
taxable
equivalent
basis 3,316 4.55% 2,467 3.96% 2,046 3.38%
Net interest
rate spread 4.13% 3.61% 3.05%
Interest bearing
liabilities
to interest
earning assets 89.98% 89.62% 91.84%
</TABLE>
<TABLE>
TABLE 2. - ANALYSIS OF NET INTEREST INCOME CHANGES
(Taxable Equivalent Basis) ($000's)
<CAPTION>
Three Months Ended March 31, 1995
1995 Compared to 1994 1994 Compared to 1993
Volume Yield Mix Total Volume Yield Mix Total
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Increase (Decrease)
in Interest Income:
Loans and Leases $399 $318 $48 $765 $306 ($229) ($27) $50
Securities:
Taxable 190 486 68 744 (115) 57 (5) (63)
Exempt from
income taxes 169 11 6 186 93 (20) (8) 65 Income Taxes
Federal Funds Sold 5 4 5 14 (10) (3) 2 (11)
Interest bearing
deposits 0 0 0 0 (1) (1) 1 (1) Deposits
Total Interest
Income Change 763 819 127 1,709 273 (196) (37) 40
Increase (Decrease)
in Interest Expense:
Interest Checking (11) 15 (2) 2 (27) (42) 6 (63)
Savings (156) (6) 1 (161) 239 (64) (25) 150
Other Time
Deposits 379 145 59 583 (353) (200) 49 (504)
Short Term
Borrowings 196 57 182 435 34 1 2 37
Total Interest
Expense Change 408 211 240 859 (107) (305) 32 (380)
Increase (Decrease)
in Net Interest
Income on a Taxable
Equivalent Basis $355 $608 ($113) $850 $380 $109 ($69) $420
(Increase) Decrease
in Taxable
Equivalent
Adjustment (68) (23)
Net Interest Income
Change $782 $397
</TABLE>
OTHER OPERATING INCOME
Other operating income, excluding securities gains and
losses, increased 15.9%, or $62,000, and totaled $452,000 for the
first three months of 1995, compared to $390,000 for the
respective period last year. Changes in various categories of
other income are depicted in the table below.
<TABLE>
<CAPTION>
Three months ended March 31,
($000s) 1995 1994 % Change
<S> <C> <C> <C>
Trust fees $183 $132 38.6%
Service charges on
deposits 130 123 5.7%
Other service charges and
fees 23 15 53.3%
Other income 116 120 -3.3%
Subtotal 452 390 15.9%
Security gains (losses) 1 (3) 133.3%
Gains (losses) securities
available for sale 126 18 600.0%
Total $579 $405 43.0%
</TABLE>
<TABLE>
INVESTMENT SECURITIES
The amortized cost and estimated market values of securities
held to maturity at March 31, 1995 are as follows:
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Market
($000s) Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S.
Government corporations and
agencies $4,342 $0 $240 $4,102
Obligations of states and
political subdivisions 23,672 118 691 23,099
Mortgage-backed securities 49,954 4 1,331 48,627
Mortgage derivatives 12,136 15 479 11,672
Total $90,104 $137 $2,741 $87,500
</TABLE>
Included in obligations of U.S. Government corporations and
agencies are two structured notes. One of these notes (book value
of $1,000,000 and an estimated market value of $979,000) was
called for early redemption at par value in April 1995. The other
structured note (book value of $976,000 and an estimated market
value of $973,000) stepped up from a coupon of 4.90% to 6.61%
during March 1995; there will be no further rate adjustments on
this note.
<TABLE>
The amortized cost and estimated market values of securities
available for sale at March 31, 1995 are as follows:
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Market
($000s) Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Treasury securities and
obligations of U.S.
Government corporations and
agencies $11,494 $0 $54 $11,440
Obligations of states and
political subdivisions 179 0 0 179
Mortgage-backed securities 39,144 39 816 38,367
Mortgage derivatives 1,103 3 98 1,008
Marketable equity securities 2,094 0 0 2,094
Total $54,014 $42 $968 $53,088
</TABLE>
The mortgage derivatives are comprised solely of
collateralized mortgage obligations. Market factors and
prepayment speeds can have an impact on the yield and average
lives of mortgage-backed securities including mortgage
derivatives.
OPERATING EXPENSES
Successful expense control is an essential element in
maintaining the Corporation's profitability. Historically, when
comparing the Corporation to various peer groups, the overhead
costs of the Corporation have been significantly lower than peer.
The following table shows the dollar amounts and growth in various
components of operating expenses.
<TABLE>
<CAPTION>
Three months ended March 31,
($000s) 1995 1994 % Change
<S> <C> <C> <C>
Salaries and
wages $560 $494 13.4%
Employee benefits 245 140 75.0%
Net occupancy expense 147 140 5.0%
Equipment expense 177 143 23.8%
Other operating expenses 811 727 11.6%
Total $1,940 $1,644 18.0%
Equipment expense increased 23.8% during the first three
months of 1995 compared to last year. This increase is primarily
attributable to changing the method of data processing for the
subsidiary bank from an third party vendor to an in-house system
which required the purchase of additional data processing
equipment. Employee benefits included an increase in the rate of
accrual for the contribution to the subsidiary bank's defined
contribution profit sharing plan as well as increases in payroll
taxes and insurance benefits.
PROVISION AND ALLOWANCE FOR POSSIBLE LOAN LOSSES
The Corporation provides as an expense an amount which
reflects expected loan losses. This provision is based on the
growth of the loan and lease portfolio and on historical loss
experience. The expense is called the provision for possible loan
losses in the Consolidated Statement of Income. Actual losses on
loans and leases are charged against the allowance built up on the
Consolidated Balance Sheet through the allowance for possible loan
losses. The amount of loans and leases actually removed as assets
from the Consolidated Balance Sheets is referred to as charge-offs
and, after netting out recoveries previously charged-off assets,
becomes net charge-offs.
For the first three months of 1995, $400,000 was added to the
allowance and charged to expense compared to $250,000 in 1994. At
March 31, 1995, the allowance for possible loan losses to total
loans and leases was 1.31% compared to 1.12% last year. The ratio
of the Allowance for Possible Loan Losses to underperforming
assets increased to 262.01% at March 31, 1995, up from 60.99% last
year. The following table details the Allowance for Possible Loan
Losses and also includes various loan charge off statistics for
1995 and 1994
</TABLE>
<TABLE>
<CAPTION>
Three months ended March 31,
($000s) 1995 1994
<S> <C> <C>
Balance, beginning of period $1,537 $1,617
Provision for possible loan
losses 400 250
Loans charged-off 11 422
Recoveries on loans previously
charged-off 5 12
Net charge offs 6 410
Balance, end of period $1,931 $1,457
</TABLE>
<TABLE>
<CAPTION>
March 31, 1995 March 31, 1994
<S> <C> <C>
Loans and leases outstanding
at period $146,908 $130,226
Average loans and leases $147,013 $127,892
Annualized net charge offs as a
percent of:
Average loans and leases 0.02% 1.28%
Total loans at end of period 0.02% 1.26%
Reserve for possible
loan losses 1.24% 112.56%
Reserve for possible loan losses
to:
Average loans and leases 1.31% 1.14%
Total loans at end of period 1.31% 1.12%
Under-performing assets 262.01% 60.99%
</TABLE>
UNDER-PERFORMING ASSETS
Under-performing assets consist of (1) non-accrual loans,
leases and debt securities on which the ultimate collectibility of
the full amount of interest is uncertain, (2) loans and leases
past due ninety days or more as to principal or interest and (3)
other real estate owned. A summary of under-performing assets at
March 31 follows:
<TABLE>
<CAPTION>
Under-performing assets March 31,
($000s) 1995 1994
<S> <C> <C>
Non-accrual loans and
leases $96 $2,297
Ninety days past due loans
and leases still accruing
interest 55 23
Other real estate owned 586 69
Total $737 $2,389
Restructured loans and
leases included in above
totals $0 $695
Restructured loans and
leases in compliance with
modified terms 231 923
</TABLE>
Loans restructured and in compliance with modified terms are
not included in total nonperforming assets.
Asset quality has improved since the year ago period. Total
under-performing assets declined from $2.4 million at March 31,
1994 to $0.7 million at March 31, 1995.
CAPITAL RESOURCES
The Corporation maintains a relatively high level of capital
as a margin of safety for its depositors and shareholders. At
March 31, 1995, shareholders' equity was $21,860,000 compared to
$20,214,000 at December 31, 1994 and $19,215,000 at March 31,
1994. The following table presents various capital ratios as of
March 31:
March 31, 1995 1994
Average shareholder's
equity to :
Average assets 6.6% 7.2%
Average deposits 9.2% 8.1%
Average loans and
leases 14.2% 15.3%
Primary capital 7.7% 7.6%
Risk-based capital
ratio:
Tier 1 12.8% 16.2%
Total 14.0% 17.1%
Leverage ratio 6.7% 6.5%
The Federal Reserve Board's capital adequacy guidelines
require a minimum primary capital ratio of 5.5%. At March 31,
1995, the Corporation's primary capital (shareholders' equity plus
the allowance for possible loan loans) was $23,791,000 or 7.7% of
total assets.
The Federal Reserve Board has adopted risk-based capital
guidelines that assign risk weightings to assets and off-balance
sheet items. The guidelines also define and set minimum capital
requirements (risk-based capital ratios). Banks are required to
have core capital (Tier 1) of at least 4.0% or risk-weighted
assets and total capital of 8.0% or risk-weighted assets. Tier 1
capital consists principally of shareholders' equity less
goodwill, while total capital consists of core capital, certain
debt instruments and a portion of the reserve for possible loan
losses. At March 31, 1995, the Corporation had a Tier 1 capital
ratio of 12.8% and a total capital ratio of 14.0%, well above
regulatory minimum requirements.
National banks are required to maintain Tier 1 capital in an
amount equal to at least 3.0% of adjusted total assets, referred
to as a total assets leverage ratio. At March 31, 1995, the
Corporation's leverage ratio was 6.7%.
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 shareholders
The annual meeting of Belmont Bancorp. was held April
18, 1995. The following items were submitted to a vote of
the shareholders:
Proposal Number 1: Election of Directors
The following individuals were elected to serve on the Board
of Directors Election of Directors for a three-year term
expiring at the annual shareholders' meeting in 1998:
J. Vincent Ciroli, Jr., President & Chief Executive Officer
of Belmont Bancorp.
For 823,407.799
Against 1,665
John H. Goodman, II, Realtor, President of Goodman Group,
Inc.
For 767,887.934
Against 1,665
Keith A. Sommer, Attorney, Partner, Sommer, Sollovan,
Liberati & Shaheen
For 774,402.716
Against 1,665
James R. Miller, Vice President & General Manager Joy
Technologies, Inc.
For 777,354.907
Against 1,665
Other members of the Board of Directors are listed in the
Corporation's proxy statement dated March 17, 1995 and which
is hereby incorporated by reference.
Proposal Number 2: To amend the Corporation's Amended
Articles of Incorporation to increase the number of
authorized shares of capital stock from 1,850,000 shares to
9,000,000 shares. Of the 9,000,000 shares, 8,900,000 are
designated as common stock and 100,000 are designated as
preferred shares.
This proposal was approved as follows:
For 739,618.314
Against 40,793.538
Abstain 10,615.882
Proposal Number 3: To amend the Corporation's Amended
Articles of Incorporation to reduce the par value of the
common stock from $3.57 per share to $0.50 per share.
This proposal was approved as follows:
For 692,492.738
Against 60,675.182
Abstain 37,859.816
Proposal Number 4: To amend the Corporation's Automatic
Dividend Reinvestment Plan to allow the agent to purchase
authorized but unissued shares of common stock from the
Corporation.
This proposal was approved as follows:
For 727,225.595
Against 49,791.323
Abstain 13,158.816
Proposal Number 5: To ratify the appointment of S. R.
Snodgrass A.C. as independent auditors for the year ending
December 31, 1995.
This proposal was approved as follows:
For 776,915.607
Against 10,138.245
Abstain 3,973.882
Proposal Number 6: To transact other such business as may
come before the meeting.
This proposal was approved as follows:
For 752,616.781
Against 11,989.786
Abstain 26,421.167
Item 5. Other information
None
Item 6. Exhibits
None
SIGNATURE
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.
Belmont Bancorp.
(Registrant)
May 11, 1995 s/ J. Vincent Ciroli, Jr.
J. Vincent Ciroli, Jr.
President & CEO
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 7885
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 53088
<INVESTMENTS-CARRYING> 90104
<INVESTMENTS-MARKET> 87500
<LOANS> 146908
<ALLOWANCE> 1931
<TOTAL-ASSETS> 309532
<DEPOSITS> 258774
<SHORT-TERM> 27386
<LIABILITIES-OTHER> 1512
<LONG-TERM> 0
<COMMON> 1057
0
1000
<OTHER-SE> 19803
<TOTAL-LIABILITIES-AND-EQUITY> 309532
<INTEREST-LOAN> 3404
<INTEREST-INVEST> 2472
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 5876
<INTEREST-DEPOSIT> 2249
<INTEREST-EXPENSE> 2746
<INTEREST-INCOME-NET> 3130
<LOAN-LOSSES> 400
<SECURITIES-GAINS> 127
<EXPENSE-OTHER> 1940
<INCOME-PRETAX> 1369
<INCOME-PRE-EXTRAORDINARY> 1369
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1006
<EPS-PRIMARY> .466
<EPS-DILUTED> .466
<YIELD-ACTUAL> 4.55
<LOANS-NON> 96
<LOANS-PAST> 55
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 439
<ALLOWANCE-OPEN> 1537
<CHARGE-OFFS> 11
<RECOVERIES> 5
<ALLOWANCE-CLOSE> 1931
<ALLOWANCE-DOMESTIC> 1931
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1841
</TABLE>
