<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
/X/ QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1995
/ / TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ______________ to _____________
Commission file number 0-19028
CCFNB BANCORP, INC.
(Name of small business Issuer in its charter)
<TABLE>
<S> <C>
PENNSYLVANIA 23-2254643
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
232 East Street, Bloomsburg, PA 17815
(Address of principal executive offices) (Zip Code)
</TABLE>
Issuer's telephone number, including area code: (717) 784-4400
Check whether the issuer (1) 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 issuer was required to file
such reports), and (2) has been subject to such filing requirings for the past
90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date. 1,368,331 shares
---------
of $1.25 (par) common stock were outstanding as of July 28, 1995.
-------------
<PAGE> 2
CCFNB BANCORP, INC. AND SUBSIDIARY
JUNE 30, 1995
INDEX 10-QSB
<TABLE>
<S> <C>
PART I - FINANCIAL INFORMATION:
---------------------
- Consolidated Balance Sheets 1
- Consolidated Statements of Income 2
- Consolidated Statements of Cash Flows 3
- Notes to Consolidated Financial Statements 4 - 5
- Management's Discussion and Analysis of Financial Condition
and Results of Operations 6 - 12
PART II - OTHER INFORMATION 13
-----------------
SIGNATURES 14
</TABLE>
<PAGE> 3
CCFNB BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
UNAUDITED
<TABLE>
<CAPTION>
JUNE DECEMBER
30, 1995 31, 1994
-------- --------
<S> <C> <C>
ASSETS
Cash and due from banks........................................ $ 4,051 $ 4,170
Interest-bearing deposits with other banks..................... 4,525 4
Federal funds sold............................................. 2,725 0
Investment securities:
Held-to-maturity securities, approximate fair value of
$16,589 and $25,566........................................ 16,242 25,894
Available-for-sale securities carried at fair value.......... 22,228 13,429
Loans, net of unearned income.................................. 110,570 109,800
Allowance for loan losses...................................... 936 943
-------- --------
Net loans.................................................... $109,634 $108,857
Premises and equipment......................................... 3,426 3,290
Accrued interest receivable.................................... 825 843
Other assets................................................... 549 637
-------- --------
TOTAL ASSETS.............................................. $164,205 $157,124
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Non-interest bearing......................................... $ 11,255 $ 11,678
Interest bearing............................................. 120,198 115,186
-------- --------
Total Deposits............................................ $131,453 $126,864
Short-term borrowings:
Federal funds purchased and securities sold under agreements
to repurchase.............................................. 12,323 9,769
Other........................................................ 905 2,140
Accrued interest and other expenses............................ 852 678
Other liabilities.............................................. 18 23
-------- --------
TOTAL LIABILITIES......................................... $145,551 $139,474
-------- --------
STOCKHOLDERS' EQUITY
Common stock, par value $1.25 per share; Authorized 5,000,000
shares; issued 1995 - 1,368,331, 1994 - 1,365,622 shares..... $ 1,710 $ 1,707
Surplus........................................................ 5,643 5,626
Retained earnings.............................................. 11,320 10,808
Allowance for unrealized gain (loss) on available-for-sale
investment securities, net of deferred tax of 1995 - $10,
1994 - $253.................................................. (19) (491)
-------- --------
TOTAL STOCKHOLDERS' EQUITY................................ $ 18,654 $ 17,650
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................ $164,205 $157,124
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-1-
<PAGE> 4
CCFNB BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER SHARE DATA)
UNAUDITED
<TABLE>
<CAPTION>
FOR THE SIX FOR THE THREE
MONTHS ENDING MONTHS ENDING
JUNE 30, JUNE 30,
-------- --------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans:
Taxable........................................ $ 4,358 $ 3,852 $ 2,208 $ 1,944
Tax exempt..................................... 78 37 33 18
Interest and dividends on investment securities:
Taxable interest............................... 809 788 409 401
Tax exempt interest............................ 241 230 121 115
Dividends...................................... 25 19 15 12
Interest on federal funds sold................... 27 8 27 6
Interest on deposits in other banks.............. 53 47 44 24
-------- -------- -------- --------
TOTAL INTEREST INCOME....................... $ 5,591 $ 4,981 $ 2,857 $ 2,520
-------- -------- -------- --------
INTEREST EXPENSE
Interest on deposits............................. $ 2,398 $ 2,092 $ 1,260 $ 1,062
Interest on short-term borrowings................ 284 193 134 100
-------- -------- -------- --------
TOTAL INTEREST EXPENSE...................... $ 2,682 $ 2,285 $ 1,394 $ 1,162
-------- -------- -------- --------
Net interest income.............................. $ 2,909 $ 2,696 $ 1,463 $ 1,358
Provision for loan losses........................ 32 60 8 30
-------- -------- -------- --------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES.................................. $ 2,877 $ 2,636 $ 1,455 $ 1,328
-------- -------- -------- --------
NON-INTEREST INCOME
Service charges and fees......................... $ 237 $ 207 $ 124 $ 103
Trust department income.......................... 23 29 11 26
Other income..................................... 27 25 21 22
Investment securities gain (losses) - net........ 0 63 0 0
-------- -------- -------- --------
TOTAL NON-INTEREST INCOME................... $ 287 $ 324 $ 156 $ 151
-------- -------- -------- --------
NON-INTEREST EXPENSES
Salaries and wages............................... $ 738 $ 670 $ 370 $ 343
Pensions and other employee benefits............. 254 239 124 121
Occupancy expense, net........................... 128 148 60 64
Furniture and equipment expense.................. 154 154 76 78
FDIC insurance................................... 144 138 72 69
Other operating expenses......................... 697 629 334 329
-------- -------- -------- --------
TOTAL NON-INTEREST EXPENSES................. $ 2,115 $ 1,978 $ 1,036 $ 1,004
-------- -------- -------- --------
Income before income taxes....................... $ 1,049 $ 982 $ 575 $ 475
Income tax expense............................... 264 250 157 118
-------- -------- -------- --------
NET INCOME................................... $ 785 $ 732 $ 418 $ 357
======== ======== ======== ========
NET INCOME PER SHARE............................. $ .57 $ .66 $ .31 $ .32
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
-2-
<PAGE> 5
CCFNB BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
UNAUDITED FOR THE SIX MONTHS
ENDING JUNE 30,
---------------
1995 1994
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income............................................................. $ 785 $ 732
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for loan losses........................................... 32 60
Provision for depreciation and amortization......................... 128 123
Premium amortization on investment securities....................... 5 13
Discount accretion on investment securities......................... (6) (4)
Deferred income taxes (benefit)..................................... (3) 18
(Gain) loss on sales of investment securities....................... 0 (63)
(Increase) decrease in accrued interest receivable and other assets. (135) (67)
Increase (decrease) in accrued interest and other expenses
and other liabilities............................................. 169 (23)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES......................... $ 975 $ 789
-------- --------
INVESTING ACTIVITIES
Proceeds from sales of investment securities:
Available-for-sale securities........................................ $ 1,000 $ 1,069
Proceeds from maturities and redemptions of held-to-maturity
investment securities................................................ 10,111 13,893
Purchase of investment securities:
Held-to-maturity securities.......................................... (588) (11,076)
Available-for-sale securities........................................ (8,953) 0
Net (increase) decrease in loans....................................... (809) (3,250)
Purchases of premises and equipment.................................... (264) (70)
Proceeds from sale of premises and equipment........................... 0 6
-------- --------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES............... $ 497 $ 572
-------- --------
FINANCING ACTIVITIES
Net increase (decrease) in deposits.................................... $ 4,589 $ 1,454
Net increase (decrease) in short-term borrowings....................... 1,319 (3,760)
Proceeds from sale of treasury stock................................... 0 18
Acquisition of treasury stock.......................................... 0 (18)
Proceeds from sale of stock............................................ 20 0
Cash dividends paid.................................................... (273) (222)
-------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES............... $ 5,655 $ (2,528)
-------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.................. $ 7,127 $ (1,167)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR......................... 4,174 7,764
-------- --------
CASH AND CASH EQUIVALENTS AT END OF YEAR.......................... $ 11,301 $ 6,597
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest............................................................. $ 2,603 $ 2,294
Income taxes......................................................... $ 256 $ 179
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITY
In accordance with FASB #115, certain investment securities are classified as
available-for-sale and those investments so classified are required to be
carried at fair value. Accordingly, the required adjustment to reflect fair
value for the current year through June 30, 1995 resulted in an increase to
the available-for-sale investments in the amount of $715 thousand which was
transferred to an allowance for unrealized loss as an equity adjustment in the
net amount of $472 thousand after giving effect to the related deferred tax of
$243 thousand.
The accompanying notes are an integral part of these consolidated financial
statements.
-3-
<PAGE> 6
CCFNB BANCORP, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995
UNAUDITED
BASIS OF PRESENTATION
NOTE 1 - The accounting and reporting policies of CCFNB Bancorp and its
subsidiary conform to generally accepted accounting principles and
to general practices within the banking industry. These consolidated
interim financial statements include the accounts of CCFNB Bancorp,
Inc. and its wholly owned subsidiary, Columbia County Farmers National
Bank. All significant inter-company balances have been eliminated.
NOTE 2 - The accompanying consolidated interim financial statements are
unaudited. In management's opinion, the consolidated interim
financial statements reflect a fair presentation of the consolidated
financial position of CCFNB Bancorp, Inc. and Subsidiary, and the
results of their operations and their cash flows for the interim
periods presented. Further, the consolidated interim financial
statements reflect all adjustments, which are in the opinion of
management, necessary to present fairly the consolidated financial
condition and consolidated results of operations and cash flows for the
interim period presented and that all such adjustments to the
consolidated financial statements are of a normal recurring nature.
NOTE 3 - The results of operations for the three month period ended June 30,
1995 are not necessarily indicative of the results to be expected for
the full year.
NOTE 4 - Net income per share of common stock for the interim periods is based
on the weighted average number of shares for each period; 1995 -
1,365,757 shares and 1994 - 1,109,666 shares.
NOTE 5 - Management considers the allowance for possible loan losses to be
adequate at the present time.
-4-
<PAGE> 7
NOTE 6 - The consolidated interim financial statements have been prepared in
accordance with requirements of Form 10-QSB and therefore do not
include all the disclosures normally required by generally
accepted accounting principles, or those normally made in the
Corporation's annual 10-KSB filing. The reader of these consolidated
interim financial statements may wish to refer to the Corporation's
annual report on Form 10-KSB for the period ended December 31, 1994,
filed with the Securities and Exchange Commission.
-5-
<PAGE> 8
CCFNB BANCORP, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Consolidated Summary of Operations
(Dollars in Thousands, except for per share data)
<TABLE>
<CAPTION>
AT AND FOR THE SIX
------------------
MONTHS ENDED JUNE 30, ----------AT AND FOR THE YEAR ENDED DECEMBER 31,----------
--------------------- --------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Interest income....................... $ 5,591 $ 4,981 $ 10,459 $ 9,838 $ 9,701 $ 9,946 $ 9,949
Interest expense...................... 2,682 2,285 4,785 4,634 5,053 5,707 6,066
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income................... $ 2,909 $ 2,696 $ 5,674 $ 5,204 $ 4,648 $ 4,239 $ 3,883
Provision for loan losses............. 32 60 160 105 167 190 165
Non-interest income................... 287 324 569 644 614 554 772
Non-interest expense.................. 2,115 1,978 3,958 3,763 3,468 3,228 2,750
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income taxes and
cumulative effect of a change in
accounting principle................ $ 1,049 $ 982 $ 2,125 $ 1,980 $ 1,627 $ 1,375 $ 1,740
Income tax expense.................... 264 250 560 497 414 346 439
Cumulative effect of a change in
accounting principle................ 0 0 0 196 0 0 0
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income............................ $ 785 $ 732 $ 1,565 $ 1,679 $ 1,213 $ 1,029 $ 1,301
========== ========== ========== ========== ========== ========== ==========
Per Share:(1)
Net income(2)......................... $ .57 $ .66 $ 1.35 $ 1.34 $ 1.09 $ .93 $ 1.18
Cash dividends paid................... .20 .20 .42 .40 .33 .30 .30
Weighted average number of shares
outstanding........................... 1,365,757 1,109,666 1,163,199 1,109,837 1,109,602 1,109,382 1,103,101
Balance Sheet Data:
Total assets.......................... $ 164,205 $ 150,291 $ 157,124 $ 152,386 $ 139,273 $ 118,558 $ 109,526
Investment securities................. 38,470 40,292 39,323 44,542 39,448 34,489 29,399
Loans, net of earned income........... 109,634 99,550 109,800 96,423 82,055 74,155 70,771
Deposits.............................. 131,453 125,477 126,864 124,023 113,291 95,334 88,567
Stockholders' equity.................. 18,654 13,686 17,650 13,452 12,208 11,361 10,667
Book value per share (1).............. 13.63 12.33 12.92 12.12 11.00 10.24 9.61
Number of shares outstanding.......... 1,368,331 1,110,262 1,365,622 1,110,262 1,109,602 1,109,613 1,109,841
Ratios: (3)
Return on average assets (2).......... 1.00% .98% 1.03% 1.04% .94% .90% 1.18%
Return on average stockholders' equity(2) 8.66 10.86 11.39 11.64 10.13 9.47 12.37
Dividend payout....................... 34.78 30.34 36.54 26.44 30.17 32.34 25.38
</TABLE>
(1) Per share data has been calculated on the weighted average number of shares
outstanding, except for the book value per share which was calculated on the
actual number of shares outstanding at the end of the period.
(2) Before cumulative effect of change in accounting principle.
(3) The ratios for the six month periods ending June 30 are annualized.
-6-
<PAGE> 9
The following discussion and analysis of financial condition and results of
operations of the Company should be read in conjunction with the consolidated
financial statements of the Company. The consolidated financial condition and
results of operations of the Company are essentially those of the Bank.
Therefore, the discussion and analysis that follows is directed primarily at
the performance of the Bank.
Overview
Total assets increased 4.5% in 1995 to $164.2 million at June 30, from $157.1
million at December 31, 1994. Net income increased 7.2% through June 30, 1995
to $785,000, or $.57 per share, compared to $732,000, or $.66 per share for the
same six month period ended June 30, 1994. Loans increased in 1995 by 7.0% to
$110.6 million at June 30, from $109.8 million at December 31, 1994.
Results of Operations - For the Six Months Ended June 30, 1995 and June 30, 1994
Net income is affected by five major components: net interest income or the
difference between interest income earned on loans and investments and interest
expense paid on deposits and borrowed funds; the provision for loan losses,
which is the amount charged against net interest income and added to the
allowance for loan losses to provide a reserve for future loan losses; other
non-interest income, which is made up of certain fees, gains and losses from the
sale of investment securities, trust department income and other items; and
other non-interest expenses, which consist primarily of salaries and benefits,
general overhead expenses, other operating expenses and income taxes. Each of
these major components is reviewed in more detail in the following discussion.
Net income for the six months ended June 30, 1995 was $785,000, or $.57 per
share, as compared to $732,000, or $.66 per share, for the comparable period in
1994. The principal factor for the increase was due to greater loan interest
income resulting in more net interest income.
Return on assets and return on equity were 1.00% and 8.06%, respectively, for
the six months ended June 30, 1995, as compared with .98% and 10.86%,
respectively, for the comparable period in 1994.
Net Interest Income
For the six months ended June 30, 1995, net interest income was $2.9 million as
compared to $2.7 million for the comparable period of 1994. The net interest
margin increased to 4.10% for the six months ended June 30, 1995 from 3.98% for
the comparable period in 1994. Average interest earning assets at June 30, 1995
increased by 5.1% over June 30, 1994.
Average loans outstanding grew from $97.2 million, respectively, or 14.1%, for
the six months ended June 30, 1994, as compared to the six months ended June
30, 1995. This growth resulted in a 12.3% increase in interest income from
loans, from $3.9 million to $4.4 million, for the six months ended June 30, 1994
and June 30, 1995, respectively.
-7-
<PAGE> 10
Shown below is a summary of past due and non-accrual loans:
<TABLE>
<CAPTION>
IN THOUSANDS OF DOLLARS
-----------------------
JUNE DECEMBER
30, 1995 31, 1994
-------- --------
<S> <C> <C>
Past due and non-accrual:
Days 30 - 89.............................................. $ 846 $ 875
Days 90 plus.............................................. 162 304
Non-accrual............................................... 14 24
-------- --------
$ 1,022 $ 1,203
======== ========
</TABLE>
Any loans classified for regulatory purposes as loss, doubtful, substandard, or
special mention that have not been disclosed under Industry Guide 3 do not (i)
represent or result from trends or uncertainties which management reasonably
expects will materially impact future operating results, liquidity, or capital
resources, or (ii) represent material credits about which management is aware of
any information which causes management to have serious doubts as to the ability
of such borrowers to comply with the loan repayment terms.
Furthermore, the Company was required to adopt Financial Accounting Standards
Board Statement No. 114, "Accounting by Creditors for Impairment of a Loan".
Since the Company does not have any "impaired loans" by definition under
Statement 114 there is no impact on the June 30, 1995 financial statements.
The following analysis provides a comparative schedule of loan maturities/
interest rate sensitivities including a schedule of all loans due after one year
by fixed and variable rate categories:
<TABLE>
<CAPTION>
IN THOUSANDS OF DOLLARS
-----------------------
MATURITY AND REPRICING DATA FOR LOANS AND LEASES JUNE DECEMBER
(EXCLUDING THOSE IN NON-ACCRUAL STATUS) 30, 1995 31, 1994
--------------------------------------- -------- --------
<S> <C> <C>
Fixed rate loans & leases with a remaining maturity of:
Three months or less...................................... $ 2,349 $ 1,826
Over three months through 12 months....................... 3,583 4,608
Over one year through five years.......................... 9,673 8,117
Over five years........................................... 25,028 19,751
-------- --------
Total Fixed Rate Loans and Leases.................... $ 40,633 $ 34,302
Floating rate loans & leases with a repricing frequency of:
Quarterly or more frequently.............................. 10,486 11,378
Annually or more frequently, but less frequently than
quarterly............................................... 0 0
Every five years or more frequently, but less frequently
than annually........................................... 60,067 64,512
-------- --------
Total Floating Rate Loans and Leases................. $ 70,553 $ 75,890
-------- --------
Total Loans and Leases............................... $111,186 $110,192
======== ========
</TABLE>
Interest income from investment securities reflects a 3.7% increase comparing
$1.1 million for the six months ended June 30, 1995, and the comparable
period of 1994. The Company typically invests in U.S. Government securities.
The average balance of investment securities for the six months ended June 30,
1995 decreased 13.9% to $36.1 million, under the $41.9 million for the
comparable period of 1994. A better yield on those investments held, however
resulted in an increase in income.
Total interest expense increased $397,000 or 17.4% for the first half of 1995,
as compared to the first half of 1994. This increase in interest expense
reflects the higher rates paid on deposit accounts since June 30, 1994 as
calculated on the increased deposit volume. Interest on short-term borrowings
increased by $91,000 from $193,000 in 1994 to $284,000 in 1995 principally due
to the Company being in a "borrowed position" early in 1995 as well as increased
interest rates.
-8-
<PAGE> 11
The following table sets forth, for the periods indicated, information
regarding: (1) the total dollar amount of interest income from
interest-earning assets and the resultant average yields; (2) the total dollar
amount of interest expense on interest-bearing liabilities and the resultant
average cost; (3) net interest income; (4) net interest margin; (5) tax
equivalent net interest income; and (6) tax equivalent net interest margin.
Information is based on average daily balances during the indicated periods.
Average Balance Sheet and Rate Analysis
(Dollars in Thousands)
<TABLE>
<CAPTION>
SIX MONTHS ENDED SIX MONTHS ENDED
---------JUNE 30, 1995-------- ---------JUNE 30, 1994--------
------------- -------------
INTEREST AVERAGE INTEREST AVERAGE
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
ASSETS: BALANCE(1) EXPENSE(2) RATE BALANCE(1) EXPENSE(2) RATE
---------- ---------- ---- ---------- ---------- ----
<S> <C> <C> <C> <C> <C> <C>
Interest bearing deposits with other financial
institutions.................................... $ 1,783 $ 53 5.95% $ 2,728 $ 47 3.45%
Investment securities:
U.S. government securities...................... 23,966 701 5.85 29,522 654 4.43
State and municipal obligations................. 8,485 241 8.61 8,161 230 8.54
Other securities................................ 3,652 133 7.28 4,260 153 7.18
-------- -------- ---- -------- -------- -----
Total Investment Securities....................... 36,103 1,075 5.96 41,943 1,037 4.94
Federal funds sold................................ 910 27 5.93 517 8 3.09
Consumer.......................................... 11,089 554 9.99 8,497 430 10.12
Mortgage.......................................... 83,346 3,162 7.59 74,742 2,917 7.81
Commercial........................................ 13,847 640 9.24 12,992 506 7.79
Tax free (3)...................................... 2,546 79 9.40 926 37 12.11
-------- -------- ---- -------- -------- -----
Total loans....................................... 110,828 4,435 8.00 97,157 3,890 8.01
Total interest earning assets..................... 149,624 5,590 7.47 142,345 4,982 7.00
-------- -------- ---- -------- -------- -----
Reserve for loan losses........................... (941) (885)
Cash and due from banks........................... 1,627 3,595
Other assets...................................... 6,799 4,526
-------- --------
Total assets...................................... $157,109 $149,581
======== ========
LIABILITIES AND CAPITAL:
SUPER NOW deposits................................ $ 19,167 $ 276 2.88% $ 17,504 $ 250 2.86%
IRA............................................... 8,340 206 4.94 7,911 196 4.96
Money market deposits............................. 19,692 328 3.33 29,428 481 3.27
Savings deposits.................................. 26,281 445 3.39 25,024 423 3.38
C/D's over $100,000............................... 8,116 221 5.45 5,111 111 4.34
Other time deposits............................... 35,493 924 5.21 28,712 631 4.40
-------- -------- ---- -------- -------- -----
Total interest bearing deposits................... 117,089 2,400 4.10 113,690 2,092 3.68
-------- -------- ---- -------- -------- -----
Federal funds purchased........................... 0 0 0.00 0 0 0.00
Other borrowed funds.............................. 1,229 37 6.02 600 10 3.33
Repurchase agreements............................. 9,480 247 5.21 10,580 183 3.46
-------- -------- ---- -------- -------- -----
Total interest bearing liabilities................ 127,798 2,684 4.20 124,870 2,285
-------- -------- ---- -------- --------
Demand deposits................................... 10,516 10,391
Other liabilities................................. 1,031 839
Stockholders' equity.............................. 17,764 13,481
-------- --------
Total liabilities and capital..................... $157,109 $149,581
======== ========
NET INTEREST INCOME/NET INTEREST MARGIN (4)...... 2,906 3.88 2,697 3.79
TAX EQUIVALENT NET INTEREST INCOME/ ======== ==== ======== =====
NET INTEREST MARGIN (5).......................... 3,070 4.10 2,835 3.98
======== ==== ======== =====
</TABLE>
-9-
<PAGE> 12
(1) Average volume information was computed using daily averages.
(2) Interest on loans includes fee income.
(3) Yield on tax-exempt obligations has been computed on a tax-equivalent basis.
(4) Net interest margin is computed by dividing net interest income by total
interest earning assets.
(5) Interest and yield are presented on a tax equivalent basis using 34% for
1995 and 1994.
Provision for Loan Losses
The provision for loan losses is based on management's evaluation of the
allowance for loan losses in relation to the credit risk inherent in the
loan portfolio. In establishing the amount of the provision required,
management considers a variety of factors, including but not limited to, general
economic conditions, volumes of various types of loans, collateral adequacy and
potential losses from significant borrowers. The Company strengthened its
internal loan review process in 1987 by implementing stringent analytical
standards in the review procedure. On a monthly basis, the Board of Directors
and the Credit Administration Committee review information regarding specific
loans and the total loan portfolio in general in order to determine the amount
to be charged to the provision for loan losses.
For the six month period ending June 30, 1995, the provision for loan losses was
$32,000, compared to $60,000 for the corresponding period in 1994. The primary
reason for the decrease in the provision for loan losses was due to the low
non-accrual and past due components of the loan portfolio.
Non-Interest Income
The following table sets forth, for the periods indicated, the major components
of non-interest income:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
--------------
1995 1994
---- ----
(Dollars in Thousands)
<S> <C> <C>
Service charges and fees.................................. $ 237 $ 207
Trust department income................................... 23 29
Investment securities gain (loss) - net................... 0 63
Other..................................................... 27 25
-------- --------
Total................................................ $ 287 $ 324
======== ========
</TABLE>
For the six months ended June 30, 1995, total non-interest income decreased
$37,000, to $287,000, compared with $324,000 for the six months ended June 30,
1994. The principal reasons for the decrease was a $63,000 decrease in gains
from the sale of investment securities offset by an increase in service charges
and fees of $30,000.
-10-
<PAGE> 13
Non-Interest Expenses
Generally, non-interest expense accounts for the costs of maintaining
facilities, providing salaries and necessary benefits to employees, and
general operating costs such as insurance, supplies, advertising, data
processing services, taxes and other related expenses. Some of the costs and
expenses are variable while others are fixed. To the extent possible, the
Company utilizes budgets and related measures to control variable expenses. The
following table sets forth, for the periods indicated, the major components of
non-interest expenses:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30,
--------------
1995 1994
---- ----
(Dollars in Thousands)
<S> <C> <C>
Salaries and wages....................................... $ 738 $ 670
Employee benefits........................................ 254 239
Net occupancy expense.................................... 128 148
Furniture and equipment expense.......................... 154 154
FDIC insurance........................................... 144 138
State shares tax......................................... 57 52
Other expense............................................ 640 577
-------- --------
Total............................................... $ 2,115 $ 1,978
======== ========
</TABLE>
Non-interest expenses totalled $2.1 million for the six months ended June 30,
1995, representing an increase of $137,000, or 6.9% from the $2.0 million in
non-interest expenses incurred for the same period in 1994.
Salary and wage expense increased 10.1% due primarily to internal promotions and
normal merit increases and senior management deferred compensation plan costs.
Employee benefits expense increased 6.3% due primarily to increased health
insurance premiums, occupancy expense decreased in 1995 by $20,000 principally
due to the reduction of utilities and related expenses due to the milder 1995
winter.
Other expenses increased by $63,000 when comparing 1995 to 1994. The principal
factor for the increase is the accrual for the contingent termination fee
payable to the current data processing center in the accrued amount of $58,000.
This termination will occur in the third quarter 1995 at which time the total
cost will be due in the amount of $125,000.
Capital
A major strength of a financial institution is a strong capital position. This
capital is very critical as it must provide growth, payment to shareholders, and
absorption of unforeseen losses. The federal regulators provide standards that
must be met. These standards measure "risk-adjusted" assets against different
categories of capital. The "risk-adjusted" assets reflect off balance sheet
items, such as commitments to make loans, and also place balance sheet assets on
a "risk" basis for collectibility. The adjusted assets are measured against
Tier I Capital and Total Qualifying Capital. Tier I capital is common
stockholders' equity and Tier II Capital includes the allowance for loan
losses. Allowance for loan losses must be lower than or equal to common
stockholders' equity to be eligible for Total Qualifying Capital.
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<PAGE> 14
The Company exceeds all minimum capital requirements as reflected in the
following table:
<TABLE>
<CAPTION>
JUNE 30, 1995 DECEMBER 31, 1994
------------- -----------------
MINIMUM MINIMUM
CALCULATED STANDARD CALCULATED STANDARD
RATIOS RATIOS RATIOS RATIOS
------ ------ ------ ------
<S> <C> <C> <C> <C>
Risk Based Ratios:
Tier I capital to risk-weighted assets.. 19.70% 4.00% 20.19% 4.00%
Total qualifying capital to
risk-weighted assets.................. 20.71% 8.00% 21.24% 8.00%
</TABLE>
Additionally, certain other ratios also provide capital analysis as follows:
<TABLE>
<CAPTION>
JUNE DECEMBER
30, 1995 31, 1994
-------- --------
<S> <C> <C>
Tier I capital to total assets.............................. 11.18% 11.55%
Tier II capital to total assets............................. 11.77% 12.15%
</TABLE>
Management believes that the Bank's current capital position and liquidity
positions are strong and that its capital position is adequate to support its
operations.
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<PAGE> 15
PART II - Other Information:
Item I. Legal Proceedings
Management and the Corporation's legal counsel are not aware of any litigation
that would have a material adverse effect on the consolidated financial position
of the Corporation. There are no proceedings pending other than the ordinary
routine litigation incident to the business of the Corporation and its
subsidiary, Columbia County Farmers National Bank. In addition, no material
proceedings are pending or are known to be threatened or contemplated against
the Corporation and the Bank by government authorities.
Item 2. Changes in Securities - Nothing to report.
Item 3. Defaults Upon Senior Securities - Nothing to report.
Item 4. Submission of Matters to a Vote of Security Holders
On January 26, 1995, the Board of Directors approved an Employee Stock Purchase
Plan, which was approved at the April 25, 1995 annual stockholders' meeting.
The maximum number of shares of the Common Stock to be issued under this plan
shall be 20,000. A participating employee shall elect deductions of at least 1%
of base pay, but not more than 10% of base pay, to cover purchases of shares
under this plan. A participating employee shall be deemed to have been granted
an option to purchase a number of shares of the Common Stock equal to the annual
aggregate amount of payroll deductions elected by the employee divided by 90% of
the fair market value of Common Stock on the first day of January in each year
or on the subsequent thirty-first day of December of each year. Form S-8 was
filed with the Securities and Exchange Commission on February 1, 1995 regarding
this matter.
Item 5. Other Information - Nothing to report.
Item 6. Exhibits and Reports on Form 8-K - Nothing to report.
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<PAGE> 16
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.
CCFNB BANCORP, INC.
(Registrant)
By /s/ PAUL E. REICHART
-------------------------------
Paul E. Reichart
President & CEO
Date:
By /s/ VIRGINIA D. KOCHER
-------------------------------
Virginia D. Kocher
Treasurer
Date:
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